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Exhibit 10.9
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DEBTOR-IN-POSSESSION
CREDIT AND GUARANTY AGREEMENT
DATED AS OF JULY 13, 2000
AMONG
PRIME SUCCESSION, INC.,
AS BORROWER,
THE PARENT AND SUBSIDIARIES OF THE BORROWER
NAMED HEREIN,
AS GUARANTORS,
THE LENDERS FROM TIME TO TIME PARTIES HERETO,
AS LENDERS,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
AS SYNDICATION AGENT,
AND
THE BANK OF NOVA SCOTIA,
AS ADMINISTRATIVE AGENT
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CREDIT AGREEMENT
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS..............................................................................2
1.1 Certain Defined Terms.............................................................2
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement.....................................................28
1.3 Other Definitional Provisions and Rules of Construction..........................28
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS..............................................29
2.1 Revolving Loan Commitments; Making of Revolving Loans;
the Register; Revolving Notes....................................................29
2.2 Interest on the Loans............................................................33
2.3 Fees ........................................................................34
2.4 Repayments of Loans, General Provisions Regarding Payments; Application of
Proceeds of Collateral and Other Payments........................................35
2.5 Use of Proceeds..................................................................39
2.6 [Reserved].......................................................................40
2.7 Increased Costs; Taxes; Capital Adequacy.........................................40
2.8 Obligation of Lenders and Issuing Lender to Mitigate.............................45
SECTION 2A PRIORITIES AND LIENS; SURVIVAL OF CLAIMS................................................46
2A.1 Priorities and Liens.............................................................46
2A.2 No Discharge: Survival of Claims.................................................48
SECTION 3. LETTERS OF CREDIT.......................................................................48
3.1 Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein...........................................................48
3.2 Letter of Credit Fees............................................................50
3.3 Drawings and Reimbursement of Amounts Paid Under Letters
of Credit........................................................................51
3.4 Obligations Absolute.............................................................54
3.5 Indemnification; Nature of Issuing Lender's Duties...............................55
3.6 Increased Costs and Taxes Relating to Letters of Credit..........................56
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT...............................................57
4.1 Conditions to Closing............................................................58
4.2 Conditions to All Loans..........................................................62
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4.3 Conditions to Letters of Credit..................................................65
SECTION 5. REPRESENTATIONS AND WARRANTIES..........................................................65
5.1 Organization, Powers, Qualification, Good Standing, Business
and Subsidiaries.................................................................66
5.2 Authorization of Borrowing, Etc..................................................66
5.3 Financial Condition..............................................................68
5.4 No Material Adverse Change; No Restricted Junior Payments........................68
5.5 Title to Properties; Liens.......................................................68
5.6 Litigation; Adverse Facts........................................................69
5.7 Payment of Taxes.................................................................69
5.8 Performance of Agreements; Materially Adverse Agreements;
Material Contracts...............................................................70
5.9 Governmental Regulation..........................................................70
5.10 Securities Activities............................................................70
5.11 Employee Benefit Plans...........................................................70
5.12 Certain Fees.....................................................................71
5.13 Environmental Protection.........................................................71
5.14 Employee Matters.................................................................72
5.15 [Reserved].......................................................................73
5.16 Matters Relating to Collateral...................................................73
5.17 [Reserved].......................................................................74
5.18 Disclosure.......................................................................74
SECTION 6. AFFIRMATIVE COVENANTS...................................................................74
6.1 Financial Statements and Other Reports...........................................74
6.2 Corporate Existence, Etc. .......................................................80
6.3 Payment of Taxes and Claims; Tax Consolidation...................................81
6.4 Maintenance of Properties; Insurance; Application of Net
Insurance/ Condemnation Proceeds.................................................81
6.5 Inspection Rights................................................................82
6.6 Compliance with Laws, Etc........................................................82
6.7 Environmental Review and Investigation, Disclosure, Etc.;
Borrower's Actions Regarding Hazardous Materials Activities, Environmental
Claims and Violations of Environmental Laws......................................82
6.8 Payment of Obligations...........................................................86
6.9 Additional Security; Further Assurances..........................................86
6.10 Post-Closing Deliveries. ........................................................88
6.11 Replacement of Existing Cash Management Letter of Credit.........................88
SECTION 7. NEGATIVE COVENANTS .....................................................................88
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7.1 Indebtedness.....................................................................88
7.2 Liens and Related Matters........................................................90
7.3 Investments; Joint Ventures. ....................................................91
7.4 Contingent Obligations...........................................................93
7.5 Restricted Junior Payments.......................................................93
7.6 Minimum Consolidated Adjusted EBITDA.............................................95
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions.................95
7.8 Consolidated Capital Expenditures................................................96
7.9 Sales and Lease-Backs............................................................96
7.10 Transactions with Shareholders and Affiliates....................................97
7.11 Disposal of Subsidiary Stock.....................................................97
7.12 Conduct of Business..............................................................98
7.13 Amendments or Waivers of Certain Related Agreements;
Designation of "Senior Indebtedness"............................................98
7.14 Fiscal Year......................................................................99
7.15 Limitation on Creation of Subsidiaries...........................................99
7.16 Certain Payments.................................................................99
7.17 Chapter 11 Claims................................................................99
7.18 Use of Proceeds.................................................................100
7.19 Prepetition Payments............................................................100
7.20 Employment Matters..............................................................100
7.21 Leases; etc.....................................................................101
SECTION 8. EVENTS OF DEFAULT......................................................................101
8.1 Failure to Make Payments When Due...............................................101
8.2 Default in Other Agreements.....................................................101
8.3 Breach of Certain Covenants.....................................................102
8.4 Breach of Warranty..............................................................102
8.5 Other Defaults Under Loan Documents.............................................102
8.6 [Reserved]......................................................................102
8.7 [Reserved]......................................................................102
8.8 [Reserved]......................................................................102
8.9 Dissolution.....................................................................103
8.10 Employee Benefit Plans..........................................................103
8.11 [Reserved]......................................................................103
8.12 Invalidity of Guaranty; Failure of Security; Repudiation of
Obligations.....................................................................103
8.13 Subordinated Indebtedness.......................................................104
8.14 [Reserved]......................................................................104
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8.15 Bankruptcy Matters..............................................................104
SECTION 9. AGENTS ................................................................................106
9.1 Appointment. ...................................................................106
9.2 Powers and Duties; General Immunity.............................................108
9.3 Representations and Warranties; No Responsibility for Appraisal of
Creditworthiness................................................................109
9.4 Right to Indemnity..............................................................110
9.5 Successor Administrative Agent..................................................110
9.6 Collateral Documents and Guaranty...............................................111
SECTION 10. MISCELLANEOUS ........................................................................112
10.1 Assignments and Participations in Revolving Loans and Letters of Credit.........112
10.2 Expenses .......................................................................115
10.3 Indemnity.......................................................................116
10.4 Set-Off; Security Interest in Deposit Accounts..................................117
10.5 Ratable Sharing.................................................................117
10.6 Amendments and Waivers..........................................................118
10.7 Independence of Covenants.......................................................120
10.8 Notices .......................................................................120
10.9 Survival of Representations, Warranties and Agreements..........................120
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative...........................120
10.11 Marshalling; Payments Set Aside.................................................121
10.12 Severability....................................................................121
10.13 Obligations Several; Independent Nature of Lenders' Rights......................121
10.14 Headings .......................................................................122
10.15 Applicable Law..................................................................122
10.16 Successors and Assigns..........................................................122
10.17 Consent to Jurisdiction and Service of Process..................................122
10.18 Waiver of Jury Trial............................................................123
10.19 Confidentiality.................................................................124
10.20 Maximum Amount..................................................................124
10.21 Counterparts; Effectiveness.....................................................125
SECTION 11. GUARANTY..............................................................................125
11.1 Guaranty .......................................................................125
11.2 Nature of Liability.............................................................126
11.3 Absolute and Independent Obligation.............................................126
11.4 Authorization...................................................................127
11.5 Reliance .......................................................................128
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11.6 Subordination...................................................................128
11.7 Waivers .......................................................................129
11.8 Nature of Liability.............................................................130
Signature pages S-1
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
III FORM OF BUDGET
IV-A FORM OF REVOLVING NOTE
IV-B FORM OF CASH MANAGEMENT INDEMNITY NOTE
V FORM OF COMPLIANCE CERTIFICATE
VI FORM OF OPINION OF COUNSEL TO LOAN PARTIES
VII FORM OF IN-HOUSE COUNSEL OPINION
VIII FORM OF ASSIGNMENT AGREEMENT
IX FORM OF CERTIFICATE RE NON-BANK STATUS
X FORM OF COLLATERAL ACCOUNT AGREEMENT
XI FORM OF PLEDGE AGREEMENT
XII FORM OF SECURITY AGREEMENT
XIII FORM OF INTERCOMPANY NOTE
XIV FORM OF INTERIM ORDER
XV FORM OF SHARING OF INFORMATION LETTER
XVI FORM OF REAFFIRMATION
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SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1 CERTAIN SUBSIDIARIES
5.1 SUBSIDIARIES OF COMPANY
5.6 LITIGATION
5.11 CERTAIN EMPLOYEE BENEFIT PLANS
5.13 ENVIRONMENTAL MATTERS
5.14 EMPLOYEE MATTERS
6.10 POST CLOSING DELIVERIES
7.7-A PERMITTED SUBSIDIARY MERGERS
7.7-B PERMITTED ASSET SALES
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DEBTOR-IN-POSSESSION
CREDIT AND GUARANTY AGREEMENT
This DEBTOR-IN-POSSESSION CREDIT AND GUARANTY AGREEMENT is dated as of
July 13, 2000 and entered into by and among PRIME SUCCESSION, INC. (f/k/a Prime
Succession Acquisition Corp.), a Delaware corporation and a debtor and
debtor-in-possession in a case pending under Chapter 11 of the Bankruptcy Code
(the "BORROWER"), its parent corporation, PRIME SUCCESSION HOLDINGS, INC. (f/k/a
Prime Succession, Inc.), a Delaware corporation and a debtor and debtor-in-
possession in a case under Chapter 11 of the Bankruptcy Code ("HOLDINGS"), THE
SUBSIDIARIES OF THE BORROWER NAMED HEREIN, each of which (other than Whitney &
▇▇▇▇▇▇ Life Insurance Agency, Inc. (the "NON-FILING SUBSIDIARY") is a debtor and
debtor-in-possession in their respective cases pending under Chapter 11 of the
Bankruptcy Code (the "SUBSIDIARY GUARANTORS"; and together with the Parent, the
"GUARANTORS" and each, a "GUARANTOR") (the cases of the Borrower and the
Guarantors, each a "CASE" and collectively, the "CASES"), ▇▇▇▇▇▇▇ SACHS CREDIT
PARTNERS L.P., as syndication agent (in such capacity, "SYNDICATION AGENT"), THE
FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTIES HERETO (each individually
referred to herein as a "LENDER" and collectively as "LENDERS"), and THE BANK OF
NOVA SCOTIA ("SCOTIABANK"), as administrative agent for Lenders (in such
capacity, "ADMINISTRATIVE AGENT").
R E C I T A L S
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WHEREAS, on July 12, 2000 (the "PETITION DATE"), the Borrower and each
of the Guarantors filed voluntary petitions under Chapter 11 of the Bankruptcy
Code with the United States Bankruptcy Court for the District of Delaware (the
"BANKRUPTCY COURT") initiating the Cases, and have continued in possession of
their assets and in the management of their businesses pursuant to Sections 1107
and 1108 of the Bankruptcy Code;
WHEREAS, the Borrower and Holdings are party to that certain Credit
Agreement dated as of August 26, 1996 among the Borrower, Holdings, the Lenders
party thereto (the "PREPETITION LENDERS"), ▇▇▇▇▇▇▇, ▇▇▇▇▇ and Co., as
Syndication Agent and Arranging Agent, and The Bank of Nova Scotia, as
administrative agent (collectively, the "PREPETITION AGENTS"), as amended (the
"PREPETITION CREDIT AGREEMENT"), pursuant to which the Borrower and the
Guarantors executed various Loan Documents (as defined therein) (together with
the Cash Management Indemnity Reimbursement Agreement (as defined below), the
"PREPETITION LOAN DOCUMENTS") which, among other things, guarantied and secured
the obligations of the Borrower under the Prepetition Credit Agreement;
WHEREAS, under the terms of the Prepetition Credit Agreement the
Lenders provided certain loans and other financial accommodations to the
Borrower;
WHEREAS, the Borrower and the Guarantors have requested that the
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Lenders agree to provide post-petition financing to the Borrower and the
Lenders;
WHEREAS, the Borrower and the Guarantors desire to secure their
respective obligations hereunder and under the other Loan Documents by granting
to the Administrative Agent, on behalf of itself and the Lenders, a first
priority security interest in substantially all of their assets, as set forth in
the Security Agreement, the Pledge Agreement and other Collateral Documents
(each as defined below), and superpriority administrative expense claim status;
and
WHEREAS, the Lenders are willing to extend such post-petition financing
to the Borrower in accordance with the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Holdings, Borrower, Lenders and
Agents agree as follows:
SECTION 1.
DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
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The following terms used in this Agreement shall have the following
meanings:
"ADMINISTRATIVE AGENT" has the meaning assigned to that term
in the introduction to this Agreement and also means and includes any
successor Administrative Agent appointed pursuant to subsection 9.5A.
"ADMINISTRATIVE AGREEMENT" means the Administrative Services
Agreement dated as of August 26, 1996, by and between Borrower and
▇▇▇▇▇▇, as such agreement may be amended from time to time to the
extent permitted under subsection 7.13A.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common
control with, that Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with"), as
applied to any Person, means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting
securities or by contract or otherwise.
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"AGENT" means, individually, each of Syndication Agent and
Administrative Agent and "AGENTS" means Syndication Agent and
Administrative Agent, collectively.
"AGREEMENT" means this Post-Petition Credit and Guaranty
Agreement, as it may be amended, supplemented or otherwise modified
from time to time.
"AGGREGATE AMOUNTS DUE" has the meaning provided in subsection
10.5.
"ASSET SALE" means the sale by Holdings or any of its
Subsidiaries to any Person other than Holdings or any of its Wholly
Owned Subsidiaries of (i) any of the stock of any of Holdings'
Subsidiaries, (ii) substantially all of the assets of any division or
line of business of Holdings or any of its Subsidiaries, or (iii) any
other assets (whether tangible or intangible) of Holdings or any of its
Subsidiaries (other than (a) inventory sold in the ordinary course of
business and (b) any such other assets to the extent that the aggregate
value of such assets sold in any single transaction or related series
of transactions is equal to or less than $100,000).
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of EXHIBIT VIII annexed hereto.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor
statute.
"BASE RATE" means, at any time, the higher of (i) the Prime
Rate or (ii) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate.
"BLACKSTONE INVESTORS" means Blackstone Capital Partners II
Merchant Banking Fund L.P. and its Affiliates.
"BORROWER" has the meaning assigned to such term in the
introduction to this Agreement.
"BUDGET" means the cash flow projections attached hereto as
EXHIBIT III showing on a line-item basis monthly anticipated cash
receipts and expenditures, monthly projected balance sheets and monthly
projected income statements initially for the period from the Petition
Date through December 31, 2000, and the additional budget delivered to
the Administrative Agent and the Lenders pursuant to subsection 6.1(xi)
hereof, as the same may be modified from time to time with the consent
of the Administrative Agent and the Requisite Lenders.
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"BUSINESS DAY" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the State of New
York or is a day on which banking institutions located in such state
are authorized or required by law or other governmental action to
close.
"CAPITAL LEASE", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee
that, in conformity with GAAP, is accounted for as a capital lease on
the balance sheet of that Person.
"CARVE-OUT" means (i) until the Final Order is entered, the
meaning provided in the Interim Order and (ii) after the Final Order is
entered, the meaning provided in the Final Order.
"CASE" and "CASES" each have the meanings assigned to such
terms in the introduction to this Agreement.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH COLLATERAL" shall have the meaning set forth in Section
363(a) of the Bankruptcy Code.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally
guaranteed as to interest and principal by the United States Government
or (b) issued by any agency of the United States the obligations of
which are backed by the full faith and credit of the United States, in
each case maturing within one year after such date; (ii) marketable
direct obligations issued by any state of the United States of America
or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after
such date and having, at the time of the acquisition thereof, the
highest rating obtainable from either S&P or ▇▇▇▇▇'▇; (iii) commercial
paper maturing no more than one year from the date of creation thereof
and having, at the time of the acquisition thereof, a rating of at
least A-1 from S&P or at least P-1 from ▇▇▇▇▇'▇; (iv) certificates of
deposit or bankers' acceptances maturing within one year after such
date and issued or accepted by any Lender or by any commercial bank
organized under the laws of the United States of America or any state
thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal
banking regulator) and (b) has Tier 1 capital (as defined in such
regulations) of not less than $100,000,000; and (v) shares of any money
market mutual fund that (a) has at least 95% of its assets invested
continuously in the types of investments referred to in clauses (i) and
(ii)
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above, (b) has net assets of not less than $500,000,000, and (c) has
the highest rating obtainable from either S&P or ▇▇▇▇▇'▇.
"CASH MANAGEMENT INDEMNITY AGREEMENT" means that certain
schedule dated August 24, 1998 to the Global Banking Alliance Agreement
referenced therein addressed to The First National Bank of Chicago and
executed by Scotiabank, as amended, relating to an indemnity for cash
management services provided by Scotiabank in the maximum amount of
$2,000,000.
"CASH MANAGEMENT INDEMNITY LOAN EXPOSURE" means (i) prior to
the termination of the Cash Management Indemnity Loan Commitment, the
Cash Management Indemnity Loan Commitment and (ii) after the
termination of the Cash Management Indemnity Loan Commitment, the
aggregate outstanding principal amount of the Cash Management Indemnity
Loans.
"CASH MANAGEMENT INDEMNITY REIMBURSEMENT AGREEMENT" means that
certain letter agreement between Scotiabank and Borrower, dated
November 10, 1997 relating to Borrower's agreement to indemnify
Scotiabank for amounts paid by Scotiabank under the Cash Management
Indemnity Agreement, as the same has been reaffirmed as of the Closing
Date under the Reaffirmation delivered pursuant to subsection 4.1A(v)
hereto.
"CASH MANAGEMENT INDEMNITY LOANS" has the meaning provided in
subsection 2.1F.
"CASH MANAGEMENT INDEMNITY LOAN COMMITMENT" means the
commitment of Scotiabank to make Cash Management Indemnity Loans to
Borrower pursuant to subsection 2.1F in an amount not to exceed
$2,000,000.
"CASH MANAGEMENT INDEMNITY NOTES" means (i) the promissory
notes of Borrower issued pursuant to subsection 2.1F on the Closing
Date and (ii) any promissory notes issued by Borrower pursuant to the
last sentence of subsection 10.1B(i) in connection with assignments of
the Cash Management Indemnity Loan Commitment and Cash Management
Indemnity Loans of Scotiabank, in each case substantially in the form
of EXHIBIT IV-B annexed hereto, as they may be amended, supplemented or
otherwise modified from time to time.
"CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of EXHIBIT IX annexed hereto delivered by a
Lender to Administrative Agent pursuant to subsection 2.7B(iii).
"CLOSING DATE" means the date on or before July 14, 2000, on
which
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all of the conditions precedent to the making of the initial Loans have
been met or waived by each Lender.
"COLLATERAL" means, collectively, all of the real and personal
property (including capital stock) in which Liens are purported to be
granted pursuant to the Collateral Documents and/or the Orders as
security for the Obligations.
"COLLATERAL ACCOUNT" has the meaning assigned to that term in
the Collateral Account Agreement.
"COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account
Agreement executed and delivered by Borrower, each Guarantor and
Administrative Agent on the Closing Date, substantially in the form of
EXHIBIT X annexed hereto, as such Collateral Account Agreement may
hereafter be amended, supplemented or otherwise modified from time to
time.
"COLLATERAL DOCUMENTS" means the Pledge Agreement, the
Security Agreement, the Collateral Account Agreement, and all other
mortgages, deeds of trust and other instruments or documents delivered
by any Loan Party pursuant to this Agreement or any of the other Loan
Documents in order to grant to Administrative Agent, on behalf of
Lenders, a Lien on any real or personal property of that Loan Party as
security for the Obligations.
"COMMERCIAL LETTER OF CREDIT" means any letter of credit or
similar instrument issued for the purpose of providing the primary
payment mechanism in connection with the purchase of any materials,
goods or services by Borrower or any of its Subsidiaries consistent
with past practice.
"COMMITMENT TERMINATION DATE" means the earliest of (a) July
14, 2000, if the Interim Order has not been entered by such time, (b)
August 29, 2000, if the Final Order has not been entered by such time,
(c) ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) the effective date of a plan of reorganization
in the Cases and (e) the date that the Revolving Loan Commitments are
terminated pursuant to Section 8 of this Agreement.
"COMMITMENTS" means the collective reference to the Revolving
Loan Commitment and the Cash Management Indemnity Loan Commitment.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of EXHIBIT V annexed hereto delivered to Administrative Agent
and Lenders by Borrower pursuant to subsection 6.1(iii).
"CONFORMING PLAN" means a plan of reorganization for the Loan
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Parties that provides for the payment in full of all of the Obligations
and all of the Prepetition Obligations or that is otherwise acceptable
to the Administrative Agent and the Requisite Lenders in their sole
discretion.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, the sum
of the amounts (without duplication) for such period of (i)
Consolidated Net Income, (ii) Consolidated Interest Expense, (iii)
provision for income taxes, (iv) total depreciation expense, (v) total
amortization expense, (vi)(a) other non-cash items reducing
Consolidated Net Income LESS (b) non-cash items increasing Consolidated
Net Income and (vii)(a) non-recurring items reducing Consolidated Net
Income (including restructuring costs not in excess of $6,800,000 in
the aggregate and including any reduction in Consolidated Net Income
resulting solely from the implementation of SAB 101 and any other
accounting changes relating thereto) LESS (b) non-recurring items
increasing Consolidated Net Income, all of the foregoing as determined
on a consolidated basis for Holdings and its Subsidiaries in conformity
with GAAP.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate of all expenditures (whether paid in Cash or other
consideration or accrued as a liability and including that portion of
Capital Leases which is capitalized on the consolidated balance sheet
of Holdings and its Subsidiaries) by Holdings and its Subsidiaries
during that period that, in conformity with GAAP, are included in
"additions to property, plant or equipment" or comparable items
reflected in the consolidated statement of cash flows of Holdings and
its Subsidiaries and all environmental remediation expenses incurred by
Holdings and its Subsidiaries after the Petition Date.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital
Leases, Covenants not to Compete in accordance with GAAP and
capitalized interest) of Holdings and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of
Holdings and its Subsidiaries, including all commissions, discounts and
other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and net costs under Interest Rate
Agreements.
"CONSOLIDATED NET INCOME" means, for any period, the net
income (or loss) of Holdings and its Subsidiaries on a consolidated
basis for such period taken as a single accounting period determined in
conformity with GAAP; PROVIDED that there shall be excluded (i) the
income (or loss) of any Person (other than a Subsidiary of Holdings) in
which any other Person (other than Holdings or any of its Subsidiaries)
has a joint interest, except to the extent of the amount of dividends
or other distributions actually paid to Holdings or any of its
Subsidiaries by such Person during such period, (ii) the
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income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary of Holdings or is merged into or consolidated with Holdings
or any of its Subsidiaries or that Person's assets are acquired by
Holdings or any of its Subsidiaries, (iii) the income of any Subsidiary
of Holdings to the extent that the declaration or payment of dividends
or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, (iv) any
after-tax gains or losses attributable to asset sales or returned
surplus assets of any Pension Plan, and (v) (to the extent not included
in clauses (i) through (iv) above) any net extraordinary gains or net
non-cash extraordinary losses.
"CONTINGENT OBLIGATION", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person
(i) with respect to any Indebtedness, lease, dividend or other
obligation of another if the primary purpose or intent thereof by the
Person incurring the Contingent Obligation is to provide assurance to
the obligee of such obligation of another that such obligation of
another will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the
account of that Person or as to which that Person is otherwise liable
for reimbursement of drawings, or (iii) under Hedge Agreements.
Contingent Obligations shall include (a) the direct or indirect
guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the obligation of another, (b) the
obligation to make take-or-pay or similar payments if required
regardless of non-performance by any other party or parties to an
agreement, and (c) any liability of such Person for the obligation of
another through any agreement (contingent or otherwise) (1) to
purchase, repurchase or otherwise acquire such obligation or any
security therefor, or to provide funds for the payment or discharge of
such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (2) to maintain the
solvency or any balance sheet item, level of income or financial
condition of another if, in the case of any agreement described under
subclauses (1) or (2) of this sentence, the primary purpose or intent
thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or
other instrument
17
to which that Person is a party or by which it or any of its properties
is bound or to which it or any of its properties is subject.
"COVENANTS NOT TO COMPETE" means any covenants not to compete,
consulting agreements, former owner agreements (including employment
agreements) or other similar arrangements pursuant to which Holdings or
any of its Subsidiaries agree to make periodic payments to certain
Persons in connection with the acquisition of funeral homes and
cemeteries.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic
cap or other similar agreement or arrangement to which Holdings or any
of its Subsidiaries is a party.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or
like organization, other than an account evidenced by a negotiable
certificate of deposit.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized
under the laws of the United States or any state thereof; (b) a savings
and loan association or savings bank organized under the laws of the
United States or any state thereof; (c) a commercial bank organized
under the laws of any other country or a political subdivision thereof;
PROVIDED that (1) such bank is acting through a branch or agency
located in the United States or (2) such bank is organized under the
laws of, and acting through a branch or agency located in, a country
that is a member of the Organization for Economic Cooperation and
Development or a political subdivision of such country; and (d) any
finance company, insurance company, or other financial institution or
fund (whether a corporation, partnership, trust or other entity) that
is engaged in making, purchasing or otherwise investing in commercial
loans in the ordinary course of its business that is organized under
the laws of members of the OECD or their respective political
subdivisions, PROVIDED that an Eligible Assignee shall (x) have a
senior, unsecured debt rating of not less than (1) BBB from S&P or (2)
Baa2 from ▇▇▇▇▇'▇ or (y) if such Person's senior, unsecured debt is not
rated by S&P or ▇▇▇▇▇'▇, such Person shall have a combined capital and
surplus or net assets of at least $100,000,000, as demonstrated to the
reasonable satisfaction of the Administrative Agent; and FURTHER
PROVIDED that no Affiliate of Borrower shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is or was maintained or
contributed to by Holdings, any of its Subsidiaries or any of their
respective ERISA
18
Affiliates.
"ENVIRONMENTAL CLAIM" means any investigation, written notice,
written notice of violation, claim, action, suit, proceeding, written
demand, written abatement order or other written order or directive
(conditional or otherwise), by any governmental authority or any other
Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials
Activity, or (iii) in connection with any actual or alleged damage,
injury, threat or harm to health, safety, natural resources or the
environment.
"ENVIRONMENTAL LAWS" means any and all applicable statutes,
ordinances, orders, rules, regulations, judgments, Governmental
Authorizations, or any other binding requirements of governmental
authorities relating to (i) environmental matters, including those
relating to any Hazardous Materials Activity, (ii) the generation, use,
storage, transportation or disposal of Hazardous Materials, or (iii)
occupational safety and health, industrial hygiene, land use or the
protection of human, plant or animal health or welfare as relating to
the environment, in any manner applicable to Holdings or any of its
Subsidiaries or any Facility, including the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. Sec 9601 ET SEQ.),
the Hazardous Materials Transportation Act (49 U.S.C. Sec 1801 ET
SEQ.), the Resource Conservation and Recovery Act (42 U.S.C. Sec 6901
ET SEQ.), the Federal Water Pollution Control Act (33 U.S.C. Sec 1251
ET SEQ.), the Clean Air Act (42 U.S.C. Sec 7401 ET SEQ.), the Toxic
Substances Control Act (15 U.S.C. Sec 2601 ET SEQ.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Sec 136 ET SEQ.),
the Occupational Safety and Health Act (29 U.S.C. Sec 651 ET SEQ.), the
Oil Pollution Act (33 U.S.C. Sec 2701 ET SEQ.) and the Emergency
Planning and Community Right-to-Know Act (42 U.S.C. Sec 11001 ET SEQ.),
each as amended or supplemented, any analogous state or local statutes
or laws, and any regulations promulgated pursuant to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations
within the meaning of Section 414(b) of the Internal Revenue Code of
which that Person is a member; (ii) any trade or business (whether or
not incorporated) which is a member of a group of trades or businesses
under common control within the meaning of Section 414(c) of the
Internal Revenue Code of which that Person is a member; and (iii) any
member of an affiliated service group within the meaning of Section
414(m) or (o) of the Internal Revenue Code of which
19
that Person, any corporation described in clause (i) above or any trade
or business described in clause (ii) above is a member. Any former
ERISA Affiliate of Holdings or any of its Subsidiaries shall continue
to be considered an ERISA Affiliate of Holdings or such Subsidiary
within the meaning of this definition with respect to the period such
entity was an ERISA Affiliate of Holdings or such Subsidiary and with
respect to liabilities arising after such period for which Holdings or
such Subsidiary could be liable under the Internal Revenue Code or
ERISA.
"ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder
with respect to any Pension Plan (excluding those for which the
provision for 30-day notice to the PBGC has been waived by regulation);
(ii) the failure to meet the minimum funding standard of Section 412 of
the Internal Revenue Code with respect to any Pension Plan (whether or
not waived in accordance with Section 412(d) of the Internal Revenue
Code) or the failure to make by its due date a required installment
under Section 412(m) of the Internal Revenue Code with respect to any
Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any
Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of
intent to terminate such plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the withdrawal by Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates from any
Pension Plan with two or more contributing sponsors or the termination
of any such Pension Plan resulting in liability pursuant to Section
4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings
to terminate any Pension Plan, or the occurrence of any event or
condition which could reasonably be expected to constitute grounds
under ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (vi) the imposition of material liability
on Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of
the application of Section 4212(c) of ERISA; (vii) the withdrawal of
Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates in a complete or partial withdrawal (within the meaning of
Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there
could reasonably be expected to be any material liability therefor, or
the receipt by Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates of notice from any Multiemployer Plan that
it is in reorganization or insolvency pursuant to Section 4241 or 4245
of ERISA, or that it intends to terminate or has terminated under
Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or
omission which could give rise to the imposition on Holdings, any of
its Subsidiaries or any of their respective ERISA Affiliates of
material
20
fines, material penalties, material taxes or material related charges
under Chapter 43 of the Internal Revenue Code or under Section 409,
Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any
Employee Benefit Plan; (ix) the assertion of a material claim (other
than routine claims for benefits) against any Employee Benefit Plan
other than a Multiemployer Plan or the assets thereof, or against
Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates in connection with any Employee Benefit Plan; (x) receipt
from the Internal Revenue Service of notice of the failure of any
Pension Plan (or any other Employee Benefit Plan intended to be
qualified under Section 401(a) of the Internal Revenue Code) to qualify
under Section 401(a) of the Internal Revenue Code, or the failure of
any trust forming part of any Pension Plan to qualify for exemption
from taxation under Section 501(a) of the Internal Revenue Code; or
(xi) the imposition of a material Lien pursuant to Section 401(a)(29)
or 412(n) of the Internal Revenue Code or pursuant to ERISA with
respect to any Pension Plan.
"EVENT OF DEFAULT" means each of the events set forth in
Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXISTING CASH MANAGEMENT LETTER OF CREDIT" means the
Irrevocable Standby Letter of Credit No. S310/43695/98 in the face
amount of $500,000 dated June 30, 1998 and issued by Scotia Bank, as
amended.
"FACILITIES" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now,
hereafter or heretofore owned, leased, operated or used by Holdings or
any of its Subsidiaries or any of their respective predecessors or
Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is
a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds
brokers of recognized standing selected by Administrative Agent.
"FINAL ORDER" means a final order of the Bankruptcy Court
entered in the Cases after a final hearing under Bankruptcy Rule
4001(c)(2) granting final approval of this Agreement and the other Loan
Documents and granting the Liens and Super-priority Claims described
herein and in the Collateral Documents in favor of the Agents and the
Lenders, substantially in the form
21
of, and containing substantially similar provisions as, the Interim
Order and otherwise in form and substance satisfactory to the Agents
and the Requisite Lenders.
"FINANCIAL OFFICER CERTIFICATION" means, with respect to the
financial statements for which such certification is required, the
certification of the chief financial officer or corporate controller of
Holdings that such financial statements fairly present, in all material
respects, the financial condition of Holdings and its Subsidiaries as
at the dates indicated and the results of their operations and, to the
extent provided to the board of directors, their cash flows for the
periods indicated, subject to changes resulting from audit and normal
year-end adjustments.
"FINANCIAL PLAN" has the meaning assigned to that term in
subsection 6.1(xi).
"FIRST PRIORITY" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that
(i) such Lien has priority over any other Lien on such Collateral
(other than Liens permitted pursuant to subsection 7.2A (iii), (vi) and
(vii) and other than Permitted Encumbrances except those described in
clause (1) of the definition thereof) and (ii) such Lien is the only
Lien (other than Permitted Encumbrances and Liens permitted pursuant to
subsection 7.2) to which such Collateral is subject.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Holdings and its
Subsidiaries ending on December 31 of each calendar year.
"FUNDING AND PAYMENT OFFICE" means (i) the office of
Administrative Agent located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or (ii) such other office of Administrative Agent
located in the United States as may from time to time hereafter be
designated as such in a written notice delivered by Administrative
Agent to Borrower and each Lender.
"FUNDING DATE" means the date of the funding of a Revolving
Loan or a Cash Management Indemnity Loan.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting
principles set forth in opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and
22
pronouncements of the Financial Accounting Standards Board or in such
other statements by such other entity as may be approved by a
significant segment of the accounting profession, in each case as the
same are applicable to the circumstances as of the date of
determination.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or
from any federal, state or local governmental authority, agency or
court.
"GUARANTOR" and "GUARANTORS" each have the meaning assigned to
such term in the introduction to this Agreement.
"GUARANTY" has the meaning provided in subsection 11.1.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous materials",
"extremely hazardous waste", "acutely hazardous waste", "radioactive
waste", "biohazardous waste", "pollutant", "toxic pollutant",
"contaminant", "restricted hazardous waste", "infectious waste", "toxic
substances", or any other term or expression intended to define, list
or classify substances by reason of properties harmful to health,
safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or
"EP toxicity" or words of similar import under any applicable
Environmental Laws); (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters
and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (iv) any
explosives; (v) any radioactive materials; (vi) any asbestos-containing
materials; (vii) urea formaldehyde foam insulation; (viii) electrical
equipment which contains any oil or dielectric fluid containing
polychlorinated biphenyls; (ix) pesticides; and (x) any other chemical,
material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority or which may or could pose a
hazard to the health and safety of the owners, occupants or any Persons
in the vicinity of any Facility or to the indoor or outdoor
environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current,
proposed or threatened activity, event or occurrence involving any
Hazardous Materials, including the use, manufacture, possession,
storage, holding, presence, existence, location, Release, threatened
Release, discharge, placement, generation, transportation, processing,
construction, treatment, abatement, removal, remediation, disposal,
disposition or handling of any Hazardous Materials, and any corrective
action or response action with respect to any of the foregoing.
23
"HEDGE AGREEMENT" means an Interest Rate Agreement or a
Currency Agreement designed to hedge against fluctuations in interest
rates or currency values, respectively.
"HOLDINGS" has the meaning assigned to such term in the
introduction to this Agreement.
"HOLDINGS CERTIFICATE OF DESIGNATIONS" means the provisions of
Holdings' Certificate of Incorporation relating to the Holdings
Preferred Stock, in the form delivered to Administrative Agent prior to
the execution of this Agreement.
"HOLDINGS PREFERRED STOCK" means the Preferred Stock of
Holdings, with a liquidation preference of $10,000 per share and with
the other terms set forth in the Holdings Certificate of Designations.
"INDEBTEDNESS", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with
respect to Capital Leases that is properly classified as a liability on
a balance sheet in conformity with GAAP, (iii) notes payable and drafts
accepted representing extensions of credit whether or not representing
obligations for borrowed money, (iv) any obligation owed for all or any
part of the deferred purchase price of property or services (including
those portions of obligations with respect to Covenants not to Compete
that are properly classified as liabilities on a balance sheet in
conformity with GAAP, but excluding any such obligations incurred under
ERISA), which purchase price is (a) due more than six months from the
date of incurrence of the obligation in respect thereof or (b)
evidenced by a note or similar written instrument, (v) all indebtedness
secured by any Lien on any property or asset owned or held by that
Person regardless of whether the indebtedness secured thereby shall
have been assumed by that Person or is nonrecourse to the credit of
that Person, (vi) any reimbursement obligations of that Person in
respect of letters of credit and (vii) all obligations to make payments
to Scotiabank under the Cash Management Indemnity Reimbursement
Agreement. Obligations under Interest Rate Agreements and Currency
Agreements constitute (1) in the case of Hedge Agreements, Contingent
Obligations, and (2) in all other cases, Investments, and in neither
case constitute Indebtedness.
"INDEMNITEE" has the meaning assigned to that term in
subsection 10.3.
"INTELLECTUAL PROPERTY" means all patents, trademarks,
tradenames, copyrights, technology, know-how and processes used in or
necessary for the
24
conduct of the business of Borrower and its Subsidiaries as currently
conducted that are material to the condition (financial or otherwise),
business or operations of Borrower and its Subsidiaries, taken as a
whole.
"INTERCOMPANY NOTE" means a promissory note executed by a Loan
Party or any of its Subsidiaries on, before or after the date hereof
evidencing intercompany Indebtedness substantially in the form of
EXHIBIT XII annexed hereto.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement
or other similar agreement or arrangement to which Borrower or any of
its Subsidiaries is a party.
"INTERIM ORDER" means that interim order captioned "Interim
Order Approving Postpetition Financing Pursuant to 11 U.S.C. ss. 364(c)
and (d), Granting Superpriority Liens and Administrative Claims,
Authorizing Use of Cash Collateral, Modifying the Automatic Stay and
Scheduling a Final Hearing Pursuant to Bankruptcy Rule 4001(c)" and
otherwise in form and substance satisfactory to the Agents and the
Requisite Lenders, entered by the Bankruptcy Court in the Cases on or
about the Petition Date.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter,
and any successor statute.
"INVENTORY" means, with respect to any Person as of any date
of determination, all goods, merchandise and other personal property
which are then held by such Person for sale or lease, including raw
materials and work in process.
"INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by Holdings or any of its Subsidiaries of, or of a
beneficial interest in, any Securities of any other Person (including
any Subsidiary of Holdings), (ii) any direct or indirect redemption,
retirement, purchase or other acquisition for value, by any Subsidiary
of Holdings from any Person other than Holdings or any of its
Subsidiaries, of any equity Securities of such Subsidiary, (iii) any
direct or indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital
contribution by Holdings or any of its Subsidiaries to any other Person
(other than a Wholly Owned Subsidiary of Holdings), including all
indebtedness and accounts receivable from that other Person that are
not current assets or
25
did not arise from sales to that other Person in the ordinary course of
business, or (iv) Interest Rate Agreements or Currency Agreements not
constituting Hedge Agreements. The amount of any Investment shall be
(a) the original cost of such Investment PLUS (b) the cost of all
additions thereto, without any adjustments for increases or decreases
in value, or write-ups, write-downs or write-offs with respect to such
Investment MINUS (c) the lesser of (1) the aggregate amount of any
repayments, redemptions, dividends or distributions thereon or proceeds
from the sale thereof, in each case to the extent of any Cash payments
(including any Cash received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and
when so received) actually received by Borrower or any of its
Subsidiaries in connection therewith, and (2) the aggregate amount
described in the immediately preceding clauses (a) and (b).
"INVESTORS" means collectively ▇▇▇▇▇▇ and the Blackstone
Investors.
"ISSUING LENDER" means, Scotiabank, or any Person serving as
its successor hereunder, in its capacity as Issuing Lender.
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal
form; PROVIDED that in no event shall any corporate Subsidiary of any
Person be considered to be a Joint Venture to which such Person is a
party.
"LENDER" and "LENDERS" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement, together
with their successors and permitted assigns pursuant to subsection
10.1.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Commercial
Letters of Credit and Standby Letters of Credit issued or to be issued
by Issuing Lender for the account of Borrower pursuant to subsection
3.1.
"LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or
at any time thereafter may become available for drawing under all
Letters of Credit then outstanding PLUS (ii) the aggregate amount of
all drawings under Letters of Credit honored by Issuing Lender and not
theretofore reimbursed by Borrower (including any such reimbursement
out of the proceeds of Revolving Loans pursuant to subsection 3.3B).
"LIEN" means any lien, mortgage, pledge, collateral
assignment, security interest, charge or encumbrance of any kind
(including any conditional sale or other title retention agreement, any
lease in the nature thereof, and any agreement to give any security
interest) and any option or trust having the practical effect of any of
the foregoing.
26
"LOAN DOCUMENTS" means this Agreement, the Notes, any
applications for, or reimbursement agreements or other documents or
certificates executed by Borrower in favor of Issuing Lender relating
to, the Letters of Credit, the Cash Management Indemnity Reimbursement
Agreement, the Collateral Documents, any fee agreements entered into
from time to time by any Loan Party for the benefit of any Agent or
Lender.
"LOAN PARTY" means each of Holdings, Borrower and any of
Holdings' Subsidiaries from time to time executing a Loan Document, and
"Loan Parties" means all such Persons, collectively.
"LOANS" means the collective reference to the Revolving Loans
and the Cash Management Indemnity Loans.
"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Group International Inc., a Delaware
corporation and a wholly owned Subsidiary of ▇▇▇▇▇▇ Group.
"▇▇▇▇▇▇ GROUP" means The ▇▇▇▇▇▇ Group, Inc., a corporation
organized under the laws of British Columbia.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as
in effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) any material adverse
effect on or affecting the business, properties, assets, condition
(financial or otherwise) or prospects of Holdings and its Subsidiaries,
taken as a whole, or (ii) the impairment of the ability of Holdings,
Borrower or the Loan Parties, taken as a whole, to perform, or of
Administrative Agent or Lenders to enforce, the Obligations, in either
case, other than such effects that result (A) solely from the
commencement of the Cases and (B) from the implementation of SAB 101
and any other regulatory or accounting changes related thereto.
"MATERIAL CONTRACT" means any contract or other arrangement to
which Holdings or any of its Subsidiaries is a party (other than the
Loan Documents) for which breach, nonperformance, cancellation or
failure to renew could have a Material Adverse Effect.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is
a "multiemployer plan" as defined in Section 3(37) of ERISA.
27
"NON-FILING SUBSIDIARY" has the meaning assigned to such term
in the introduction to this Agreement.
"NOTES" means the collective reference to the Revolving Notes
and the Cash Management Indemnity Notes.
"NOTICE OF BORROWING" means a notice substantially in the form
of EXHIBIT I annexed hereto delivered by Borrower to Administrative
Agent pursuant to subsection 2.1B with respect to a proposed borrowing.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice
substantially in the form of EXHIBIT II annexed hereto delivered by
Borrower to Administrative Agent pursuant to subsection 3.1B(i) with
respect to the proposed issuance of a Letter of Credit.
"OBLIGATIONS" means all obligations of every nature of each
Loan Party from time to time owed to Agents, Lenders or their
respective Affiliates or any of them under the Loan Documents, whether
for principal, interest, reimbursement of amounts drawn under Letters
of Credit, fees, expenses, indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, as applied to any corporation,
a certificate executed on behalf of such corporation by its chairman of
the board (if an officer) or its president or one of its vice
presidents and by its chief financial officer or its treasurer;
PROVIDED that any Officers' Certificate with respect to compliance with
a condition precedent to the making of the initial Revolving Loans
hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition
and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the signers,
they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed
opinion as to whether or not such condition has been complied with, and
(iii) a statement as to whether, in the opinion of the signers, such
condition has been complied with.
"OPERATING LEASE" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of
any property (whether real, personal or mixed) that is not a Capital
Lease other than any such lease under which that Person is the lessor.
"ORDERS" means the collective reference to the Interim Order
and the Final Order.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
28
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multi-employer Plan, which is subject to Section 412 of the Internal
Revenue Code or Section 302 of ERISA.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or
412(n) of the Internal Revenue Code or by ERISA, any such Lien relating
to or imposed in connection with any Environmental Claim, and any such
Lien expressly prohibited by any applicable terms of any of the
Collateral Documents):
(1) Liens for taxes, assessments or governmental
charges or claims the payment of which is not, at the time,
required by subsection 6.3;
(2) statutory Liens of landlords, statutory Liens of
banks and rights of set-off, statutory Liens of carriers,
warehousemen, mechanics, repairmen, workmen and materialmen,
and other Liens imposed by law, in each case incurred in the
ordinary course of business (a) for amounts not yet overdue or
(b) for amounts that are overdue and that are being contested
in good faith by appropriate proceedings, so long as (1) such
reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made for any such contested
amounts, and (2) in the case of a Lien with respect to any
material portion of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the
Collateral on account of such Lien;
(3) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or
to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts,
trade contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations for the
payment of borrowed money), so long as no foreclosure, sale or
similar proceedings have been commenced with respect to any
material portion of the Collateral on account thereof;
(4) [Reserved]
(5) leases or subleases granted to third parties in
accordance with any applicable terms of the Collateral
Documents and not interfering in any material respect with the
ordinary conduct of the
29
business of Borrower or any of its Subsidiaries or resulting
in a material diminution in the value of any Collateral as
security for the Obligations;
(6) easements, rights-of-way, restrictions,
encroachments, and other minor defects or irregularities in
title, in each case which do not and will not interfere in any
material respect with the ordinary conduct of the business of
any Loan Party or result in a material diminution in the value
of any Collateral as security for the Obligations;
(7) any (a) interest or title of a lessor or sublessor
under any lease, (b) restriction or encumbrance that the
interest or title of such lessor or sublessor may be subject
to, or (c) subordination of the interest of the lessee or
sublessee under such lease to any restriction or encumbrance
referred to in the preceding clause (b), so long as the holder
of such restriction or encumbrance agrees to recognize the
rights of such lessee or sublessee under such lease;
(8) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement;
(9) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties
in connection with the importation of goods; and
(10) any zoning or similar law or right reserved to or
vested in any governmental office or agency to control or
regulate the use of any real property.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability
companies, limited liability partnerships, joint stock companies, Joint
Ventures, associations, companies, trusts, banks, trust companies, land
trusts, business trusts or other organizations, whether or not legal
entities, and governments (whether federal, state or local, domestic or
foreign, and including political subdivisions thereof) and agencies or
other administrative or regulatory bodies thereof.
"PETITION DATE" has the meaning assigned to such term in the
introduction to this Agreement.
"PLEDGE AGREEMENT" means the Post-Petition Pledge Agreement
executed and delivered by Borrower, each Guarantor and Administrative
Agent on the Closing Date, substantially in the form of EXHIBIT XI
annexed hereto, as such Pledge Agreement may thereafter be amended,
supplemented
30
or otherwise modified from time to time.
"PLEDGED COLLATERAL" has the meaning provided in the Pledge
Agreement.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of
Default.
"PREPETITION AGENTS" has the meaning provided in the Recitals
to this Agreement.
"PREPETITION CREDIT AGREEMENT" has the meaning provided in the
Recitals to this Agreement.
"PREPETITION INDEBTEDNESS" means all of the Indebtedness of
the Loan Parties incurred prior to the Petition Date.
"PREPETITION LENDERS" has the meaning provided in the Recitals
to this Agreement.
"PREPETITION LOAN DOCUMENTS" has the meaning provided in the
Recitals to this Agreement.
"PREPETITION OBLIGATIONS" has the meaning provided in
subsection 2A.1(A) of this Agreement.
"PREPETITION PERMITTED LIENS" has the meaning provided in
subsection 2A.1(A) of this Agreement.
"PRIME RATE" means the rate that Administrative Agent
announces from time to time as its prime lending rate for Dollars at
its Funding and Payment Office, as in effect from time to time. The
Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer. Administrative
Agent or any other Lender may make commercial loans or other loans at
rates of interest at, above or below the Prime Rate.
"PRO RATA SHARE" means, with respect to any Lender, the
percentage obtained by DIVIDING (a) the Revolving Loan Exposure of that
Lender BY (b) the aggregate Revolving Loan Exposure of all Lenders, as
the applicable percentage may be adjusted by assignments permitted
pursuant to subsection 10.1. The initial Pro Rata Share of each Lender
is set forth opposite the name of that Lender in SCHEDULE 2.1 annexed
hereto.
31
"REGISTER" has the meaning assigned to that term in subsection
2.1D.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELATED AGREEMENTS" means, collectively, the Prepetition Loan
Documents, the Holdings Certificate of Designations, the Senior
Subordinated Note Indenture and the Administrative Agreement.
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge,
dispersal, dumping, leaching or migration of Hazardous Materials into
the indoor or outdoor environment (including the abandonment or
disposal of any barrels, containers or other closed receptacles
containing any Hazardous Materials), including the movement of any
Hazardous Materials through the air, soil, surface water or
groundwater.
"REQUISITE LENDERS" means Lenders having or holding more than
50% of the sum of the aggregate of the Revolving Loan Exposure and the
Cash Management Indemnity Loan Exposure of all Lenders; PROVIDED, that
so long as there are only two Lenders (for the purpose of this
calculation, each Lender and its Affiliates that are Lenders shall
constitute a single Lender), Requisite Lenders shall mean all of the
Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of stock of Holdings or Borrower now or hereafter outstanding, except a
dividend payable solely in shares of that class of stock to the holders
of that class, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of stock of Borrower or Holdings now or
hereafter outstanding, (iii) any payment made to retire, or to obtain
the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of stock of Borrower or Holdings now or
hereafter outstanding, and (iv) any payment or prepayment of principal
of, premium, if any, or interest on, or redemption, purchase,
retirement, defeasance (including in-substance or legal defeasance),
sinking fund or similar payment with respect to, any Subordinated
Indebtedness.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender
to make Revolving Loans to Borrower pursuant to subsection 2.1A, and
"REVOLVING LOAN COMMITMENTS" means such commitments of all Lenders in
the aggregate.
32
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as
of any date of determination (i) prior to the termination of the
Revolving Loan Commitments, that Lender's Revolving Loan Commitment and
(ii) after the termination of the Revolving Loan Commitments, the sum
of (a) the aggregate outstanding principal amount of the Revolving
Loans of that Lender PLUS (b) in the event that Lender is Issuing
Lender, the aggregate Letter of Credit Usage in respect of all Letters
of Credit issued by that Lender (in each case net of any participations
purchased by other Lenders in such Letters of Credit or any
unreimbursed drawings thereunder) PLUS (c) the aggregate amount of all
participations purchased by that Lender in any outstanding Letters of
Credit or any unreimbursed drawings under any Letters of Credit.
"REVOLVING LOANS" means the loans made by Lenders to Borrower
pursuant to subsection 2.1A.
"REVOLVING NOTES" means (i) the promissory notes of Borrower
issued pursuant to subsection 2.1E(i) on the Closing Date and (ii) any
promissory notes issued by Borrower pursuant to the last sentence of
subsection 10.1B(i) in connection with assignments of the Revolving
Loan Commitments and Revolving Loans of any Lenders, in each case
substantially in the form of EXHIBIT IV-A annexed hereto, as they may
be amended, supplemented or otherwise modified from time to time.
"S&P" means Standard and Poors Rating Services, a division of
▇▇▇▇▇▇-▇▇▇▇, Inc.
"SCOTIABANK" has the meaning provided in the first paragraph
of this Agreement.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in
any profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates
for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SECURITY AGREEMENT" means the Post-Petition Security
Agreement
33
executed and delivered by Borrower, each Guarantor and Administrative
Agent on the Closing Date, substantially in the form of EXHIBIT XII
annexed hereto, as such Security Agreement may thereafter be amended,
supplemented or otherwise modified from time to time.
"SENIOR SUBORDINATED NOTE INDENTURE" means the indenture
pursuant to which the Senior Subordinated Notes are issued, as such
indenture may be amended from time to time to the extent permitted
under subsection 7.13A.
"SENIOR SUBORDINATED NOTES" means the $100,000,000 in
aggregate principal amount of 10.75% Senior Subordinated Notes due 2004
of Borrower issued pursuant to the Senior Subordinated Note Indenture.
"STANDBY LETTER OF CREDIT" means any standby letter of credit
or similar instrument issued for the purpose of supporting (i) workers'
compensation liabilities of Borrower or any of its Subsidiaries, (ii)
surety obligations of Borrower or any of its Subsidiaries, in any case
if required by law or govern mental rule or regulation or in accordance
with custom and practice in the industry, (iii) Borrower's obligations
to its cash management bank in the face amount equal to, and on
substantially the terms set forth in, the Existing Cash Management
Letter of Credit and (iv) other obligations of Borrower and its
Subsidiaries permitted hereunder consistent with prior practices and
other obligations of the Borrower and its Subsidiaries as are
acceptable to the Administrative Agent in its reasonable discretion;
PROVIDED that Standby Letters of Credit may not be issued without the
consent of Issuing Lender (which consent may be withheld in the sole
discretion of Issuing Lender) for the purpose of supporting (a) trade
payables or (b) any Indebtedness constituting "antecedent debt" (as
that term is used in Section 547 of the Bankruptcy Code).
"SUBORDINATED INDEBTEDNESS" means Indebtedness of Borrower
evidenced by the Senior Subordinated Notes.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, limited liability company, association, joint
venture or other business entity of which more than 50% of the total
voting power of shares of stock or other ownership interests entitled
(without regard to the occurrence of any contingency) to vote in the
election of the Person or Persons (whether directors, managers,
trustees or other Persons performing similar functions) having the
power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or
a combination thereof.
"SUPERPRIORITY CLAIM" means a claim against the Borrower or
any
34
Guarantor in any of the Cases which is an administrative expense having
priority over any and all administrative expenses of the kind specified
in Sections 503(b) or 507(b) of the Bankruptcy Code.
"SUPPLEMENTAL COLLATERAL AGENT" has the meaning assigned to
that term in subsection 9.1B.
"SYNDICATION AGENT" has the meaning assigned to that term in
the introduction to this Agreement.
"TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and
whatever called, by whomsoever, on whomsoever and wherever imposed,
levied, collected, withheld or assessed; PROVIDED that "Tax on the
overall net income" of a Person shall be construed as a reference to a
tax imposed by the jurisdiction in which that Person is organized or in
which that Person's principal office (and/or, in the case of a Lender,
its lending office) is located or in which that Person (and/or, in the
case of a Lender, its lending office) is deemed to be doing business on
all or part of the net income, profits or gains (whether worldwide, or
only insofar as such income, profits or gains are considered to arise
in or to relate to a particular jurisdiction, or otherwise) of that
Person (and/or, in the case of a Lender, its lending office).
"TERMINATION DATE" means the date on which all Obligations
have been paid in full, all Letters of Credit shall have been
terminated, expired or cash collateralized to the satisfaction of
Issuing Lender and all Commitments shall have been terminated or shall
have expired.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at
any date of determination, the sum of (i) the aggregate principal
amount of all outstanding Revolving Loans (other than Revolving Loans
made for the purpose of reimbursing Issuing Lender for any amount drawn
under any Letter of Credit but not yet so applied) plus (ii) the Letter
of Credit Usage.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"WHOLLY OWNED SUBSIDIARY" means, with respect to any Person,
any Subsidiary of such Person of which such Person owns, directly or
indirectly, 90% or more of all classes of the capital stock.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
------------------------------------------------------------------
UNDER AGREEMENT.
----------------
35
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Borrower to Lenders pursuant to clauses (i), (ii),
(iii) and (xi) of subsection 6.1 shall be prepared in accordance with GAAP as in
effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(iv)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those in effect on the date hereof and adopted by Holdings for use in the
preparation of its financial statements for periods on and after the second
Fiscal Quarter of Holdings' 2000 Fiscal Year.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
--------------------------------------------------------
Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
References to "Sections" and "subsections" shall be to Sections and subsections,
respectively, of this Agreement unless otherwise specifically provided. The use
herein of the word "include" or "including", when following any general
statement, term or matter, shall not be construed to limit such statement, term
or matter to the specific items or matters set forth immediately following such
word or to similar items or matters, whether or not nonlimiting language (such
as "without limitation" or "but not limited to" or words of similar import) is
used with reference thereto, but rather shall be deemed to refer to all other
items or matters that fall within the broadest possible scope of such general
statement, term or matter.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 REVOLVING LOAN COMMITMENTS; MAKING OF REVOLVING LOANS; THE REGISTER;
--------------------------------------------------------------------
REVOLVING NOTES.
----------------
A. REVOLVING LOAN COMMITMENTS. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of
Borrower herein set forth, each Lender severally agrees, subject to the
limitations set forth below with respect to the maximum amount of Revolving
Loans permitted to be outstanding from time to time, to lend to Borrower from
time to time during the period from the Closing Date to but excluding the
Commitment Termination Date an aggregate amount not exceeding its Pro Rata Share
of the aggregate amount of the Revolving Loan Commitments, in each case to be
used for the purposes identified in subsection 2.5. The original amount of each
Lender's Revolving Loan Commitment is set forth opposite its name on SCHEDULE
2.1 annexed hereto and the aggregate original amount of the Revolving Loan
Commitments is $8,000,000; PROVIDED that
36
the Revolving Loan Commitments of Lenders shall be adjusted to give effect to
any assignments of the Revolving Loan Commitments pursuant to subsection 10.1B;
and PROVIDED, FURTHER that the amount of the Revolving Loan Commitments shall be
reduced from time to time pursuant to the terms of this Agreement. In no event
shall Borrower request, and no Lender shall be required to make, any Revolving
Loans in an aggregate principal amount greater than that approved by the
Bankruptcy Court pursuant to the Interim Order or, when applicable, the Final
Order. Each Lender's Revolving Loan Commitment shall expire on the Commitment
Termination Date and all Revolving Loans and all other amounts owed hereunder
with respect to the Revolving Loans and the Revolving Loan Commitments shall be
paid in full no later than that date. Amounts borrowed under this subsection
2.1A may be repaid and reborrowed to but excluding the Commitment Termination
Date.
Anything contained in this Agreement to the contrary notwithstanding,
the Revolving Loans and the Revolving Loan Commitments shall be subject to the
limitations that in no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed the Revolving Loan Commitments then in effect.
B. BORROWING MECHANICS. Revolving Loans made on any Funding Date (other
than Revolving Loans made pursuant to subsection 3.3B for the purpose of
reimbursing Issuing Lender for the amount of a drawing under a Letter of Credit
issued by it) shall be in an aggregate minimum amount of $500,000 and in an
integral multiple of $100,000 in excess thereof. Whenever Borrower desires that
Lenders make Revolving Loans, it shall deliver to Administrative Agent an
irrevocable Notice of Borrowing no later than 10:00 A.M. (New York City time) at
least one Business Day in advance of the proposed Funding Date. The Notice of
Borrowing shall specify (i) the proposed Funding Date (which shall be a Business
Day) and (ii) the amount of the Revolving Loans so requested. Advances
constituting Cash Management Indemnity Loans shall be made pursuant to the terms
of the Cash Management Indemnity Agreement and the Cash Management Indemnity
Reimbursement Agreement.
Neither Administrative Agent nor any Lender shall incur any liability
to Borrower in acting upon any notice referred to above that Administrative
Agent believes in good faith to have been given by a duly authorized officer or
other person authorized to borrow on behalf of Borrower or for otherwise acting
in good faith under this subsection 2.1B, and upon funding of Revolving Loans by
Lenders in accordance with this Agreement pursuant to any such notice Borrower
shall have effected Revolving Loans hereunder.
Borrower shall notify Administrative Agent prior to the funding of any
Revolving Loans in the event that any of the matters to which Borrower has
certified in the applicable Notice of Borrowing is no longer true and correct as
of the applicable Funding Date, and the acceptance by Borrower of the proceeds
of any Revolving Loans shall constitute a re-certification by Borrower, as of
the applicable Funding Date, as to the matters to which Borrower is required to
certify in the applicable Notice of Borrowing.
37
C. DISBURSEMENT OF FUNDS. All Revolving Loans under this Agreement
shall be made by Lenders simultaneously and proportionately to their respective
Pro Rata Shares, it being understood that no Lender shall be responsible for any
default by any other Lender in that other Lender's obligation to make a
Revolving Loan requested hereunder nor shall the Revolving Loan Commitment of
any Lender to make the particular Revolving Loan requested be increased or
decreased as a result of a default by any other Lender in that other Lender's
obligation to make a Revolving Loan requested hereunder. Promptly after receipt
by Administrative Agent of a Notice of Borrowing pursuant to subsection 2.1B,
Administrative Agent shall notify each Lender of the proposed borrowing. Each
Lender shall make the amount of its Revolving Loan available to Administrative
Agent not later than 11:00 a.m. (New York City time) on the applicable Funding
Date, in same-day funds in Dollars, at the Funding and Payment Office. Except as
provided in subsection 3.3B with respect to Revolving Loans used to reimburse
Issuing Lender for the amount of a drawing under a Letter of Credit issued by
it, upon satisfaction or waiver of the conditions precedent specified in
subsections 4.1 (in the case of Revolving Loans made on the Closing Date) and
4.2 (in the case of all Revolving Loans), Administrative Agent shall make the
proceeds of such Revolving Loans available to Borrower on the applicable Funding
Date by causing an amount of same day funds in Dollars equal to the proceeds of
all such Revolving Loans received by Administrative Agent from Lenders to be
credited to the account of Borrower at the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any Lender
prior to the Funding Date for any Revolving Loans that such Lender does not
intend to make available to Administrative Agent the amount of such Lender's
Revolving Loan requested on such Funding Date, Administrative Agent may assume
that such Lender has made such amount available to Administrative Agent on such
Funding Date and Administrative Agent may, in its sole discretion, but shall not
be obligated to, make available to Borrower a corresponding amount on such
Funding Date. If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Funding Date until the date such amount
is paid to Administrative Agent, at the customary rate set by Administrative
Agent for the correction of errors among banks for three Business Days and
thereafter at the Base Rate. If such Lender does not pay such corresponding
amount forthwith upon Administrative Agent's demand therefor, Administrative
Agent shall promptly notify Borrower and Borrower shall immediately pay such
corresponding amount to Administrative Agent together with interest thereon, for
each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the rate payable under this Agreement for Revolving
Loans. Nothing in this subsection 2.1C shall be deemed to relieve any Lender
from its obligation to fulfill its Revolving Loan Commitment hereunder or to
38
prejudice any rights that Borrower may have against any Lender as a result of
any default by such Lender hereunder.
D. THE REGISTER.
(i) Administrative Agent shall maintain, at its address
referred to in subsection 10.8, a register for the recordation of the names and
addresses of Lenders and the Commitments and Loans of each Lender from time to
time (the "Register"). The Register shall be available for inspection by
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(ii) Administrative Agent shall record in the Register the
Commitments and Loans from time to time of each Lender, and each repayment or
prepayment in respect of the principal amount of the Loans of each Lender. Any
such recordation shall be conclusive and binding on Borrower and each Lender,
absent demonstrable error; PROVIDED that failure to make any such recordation,
or any error in such recordation, shall not affect any Lender's Commitment, or
Borrower's Obligations in respect of any applicable Loans.
(iii) Each Lender shall record on its internal records
(including the Notes held by such Lender) the amount of each Loan made by it and
each payment in respect thereof. Any such recordation shall be conclusive and
binding on Borrower, absent demonstrable error; PROVIDED that failure to make
any such recordation, or any error in such recordation, shall not affect any
Lender's Commitment, or Borrower's Obligations in respect of any applicable
Loans; and PROVIDED, FURTHER that in the event of any inconsistency between the
Register and any Lender's records, the recordations in the Register shall
govern.
(iv) Borrower, Administrative Agent and Lenders shall deem and
treat the Persons listed as Lenders in the Register as the holders and owners of
the Commitments and Loans listed therein for all purposes hereof, and no
assignment or transfer of any such Commitment or Loan shall be effective, in
each case unless and until an Assignment Agreement effecting the assignment or
transfer thereof shall have been accepted by Administrative Agent and recorded
in the Register as provided in subsection 10.1B(ii). Prior to such recordation,
all amounts owed with respect to the applicable Commitment or Loan shall be owed
to the Lender listed in the Register as the owner thereof, and any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or transferee of the
corresponding Commitments or Loans.
(v) Borrower hereby designates Administrative Agent to serve
as Borrower's agent solely for purposes of maintaining the Register as provided
in this subsection 2.1D, and Borrower hereby agrees that, to the extent
Administrative Agent serves in such capacity, Administrative Agent and its
officers, directors,
39
employees, agents and affiliates shall constitute Indemnitees for all purposes
under subsection 10.3.
E. REVOLVING NOTES. Borrower shall execute and deliver to each Lender
on the Closing Date a Revolving Note to evidence that Lender's Revolving Loans,
in the principal amount of that Lender's Revolving Loan Commitment and with
other appropriate insertions.
F. CASH MANAGEMENT INDEMNITY LOANS. Subject to the terms and conditions
of this Agreement, Scotiabank agrees to make loans for the account of the
Borrower on the terms set forth in this subsection 2.1F to fund demands made by
Bank One, N.A. under the Cash Management Indemnity Agreement (which are not
supported by a Letter of Credit issued pursuant to this Agreement) (such loans
being "CASH MANAGEMENT INDEMNITY LOANS"); PROVIDED that in no event shall the
aggregate principal amount of Cash Management Indemnity Loans made by Scotiabank
exceed the Cash Management Indemnity Loan Commitment. No Lender other than
Scotiabank shall have any obligation with respect to any Cash Management
Indemnity Loan. Borrower shall execute and deliver on the Closing Date a Cash
Management Indemnity Note to evidence Scotiabank's Cash Management Indemnity
Loans, in the principal amount of Scotiabank's Cash Management Indemnity Loan
Commitment and with other appropriate insertions. In no event shall the Borrower
request, and Scotiabank shall not be required to make, any Cash Management
Indemnity Loans in an aggregate principal amount greater than that approved by
the Bankruptcy Court pursuant to the Interim Order or, when applicable, the
Final Order. Scotiabank's Cash Management Indemnity Loan Commitment shall expire
on the Commitment Termination Date and all Cash Management Indemnity Loans and
all other amounts owed hereunder with respect to the Cash Management Indemnity
Loans and the Cash Management Indemnity Loan Commitments shall be paid in full
no later than that date. Amounts borrowed under this subsection 2.1F shall be
repaid pursuant to the terms of the Cash Management Indemnity Reimbursement
Agreement. Anything contained in this Agreement to the contrary notwithstanding,
in no event shall the aggregate principal amount of Cash Management Indemnity
Loans then outstanding at any time exceed the Cash Management Indemnity Loan
Commitment then in effect.
2.2 INTEREST ON THE LOANS.
----------------------
A. RATE OF INTEREST. Subject to the provisions of subsections 2.2E and
2.7, each Loan shall bear interest on the unpaid principal amount thereof from
the date made through the Termination Date at a rate equal to the Base Rate plus
2% per annum.
B. [Reserved]
40
C. INTEREST PAYMENTS. Subject to the provisions of subsection 2.2E and
2.7, interest on each Loan shall be payable in arrears on the last Business Day
of each calendar month and on the Termination Date, except that interest on Cash
Management Loans shall be payable on demand.
D. [Reserved]
E. POST-DEFAULT INTEREST. At any time an Event of Default has occurred
and is continuing, each Loan shall bear interest on the unpaid principal amount
thereof at the Base Rate plus 4% per annum (the "DEFAULT RATE"). In addition, to
the extent permitted by applicable law, any interest payments on the Loans or
any fees or other amounts owed hereunder not paid when due, in each case whether
at stated maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest payable on demand at the Default Rate. Payment or
acceptance of the increased rates of interest provided for in this subsection
2.2E is not a permitted alternative to timely payment and shall not constitute a
waiver of any Event of Default or otherwise prejudice or limit any rights or
remedies of Agent or any Lender.
F. COMPUTATION OF INTEREST. Interest on the Loans shall be computed on
the basis of a 365-day or 366-day year, as the case may be, for the actual
number of days elapsed in the period during which it accrues. In computing
interest on any Loan, the date of the making of such Loan shall be included, and
the date of payment of such Loan shall be excluded; PROVIDED that if a Loan is
repaid on the same day on which it is made, one day's interest shall be paid on
that Loan.
2.3 FEES.
-----
A. COMMITMENT FEES. Borrower agrees to pay to Administrative Agent:
(i) for distribution to each Lender in proportion to that Lender's
Pro Rata Share, commitment fees for the period from and
including the Closing Date to and excluding the Commitment
Termination Date equal to the average of the daily excess of
the Revolving Loan Commitments over the sum of (i) the
aggregate principal amount of outstanding Revolving Loans PLUS
(ii) the Letter of Credit Usage MULTIPLIED BY 1/2 of 1% per
annum, and
(ii) for distribution to Scotiabank, commitment fees for the period
from and including the Closing Date to and excluding the
Commitment Termination Date in an amount equal to the average
of the daily excess of the Cash Management Indemnity Loan
Commitment over the aggregate principal amount of outstanding
Cash Management
41
Indemnity Loans MULTIPLIED BY 1/2 of 1% per annum.
Such commitment fees shall be calculated on the basis of a 365- or 366-day year
and the actual number of days elapsed and to be payable monthly in arrears on
the last Business Day of each calendar month (commencing July 31, 2000), and on
the Commitment Termination Date.
B. OTHER FEES. Borrower agrees to pay: (i) to the Administrative Agent
on the Closing Date for the account of the Lenders, a Facility Fee in the
amounts of $160,000, (ii) to the Administrative Agent for its own account, an
annual management fee equal to $15,000 payable on the Closing Date and on each
anniversary thereof and (iii) to Scotiabank, an administration fee equal to
$12,000 payable on the Closing Date.
C. FEES EARNED. All fees payable to Agent or any Lender by Borrower
hereunder or pursuant to any other agreement executed in connection herewith
shall be fully earned when due hereunder or thereunder and shall be
non-refundable.
2.4 REPAYMENTS OF LOANS, GENERAL PROVISIONS REGARDING PAYMENTS; APPLICATION
-----------------------------------------------------------------------
OF PROCEEDS OF COLLATERAL AND OTHER PAYMENTS.
---------------------------------------------
A. [Reserved]
B. PREPAYMENTS OF LOANS; NO VOLUNTARY REDUCTIONS OF COMMITMENTS.
(i) VOLUNTARY PREPAYMENTS. Borrower may, upon not less than
one Business Day's prior written or telephonic notice given to Administrative
Agent by 12:00 noon (New York City time) on the date required and, if given by
telephone, promptly confirmed in writing to Administrative Agent (which original
written or telephonic notice Administrative Agent will promptly transmit by
telefacsimile or telephone to each Lender), at any time and from time to time
prepay any Loans on any Business Day in whole or in part in an aggregate minimum
amount of $500,000. Notice of prepayment having been given as aforesaid, the
principal amount of the Loans specified in such notice shall become due and
payable on the prepayment date specified therein. Any such voluntary prepayment
shall be applied to reduce the outstanding principal balance of the Revolving
Loans and the Cash Management Indemnity Loans pro-rata and may, subject to the
terms of this Agreement, be reborrowed.
(ii) VOLUNTARY REDUCTIONS OF COMMITMENTS. Borrower may not
voluntarily terminate in whole or reduce in part any Commitment except for the
repayment of the Loans and the termination of the Commitments in connection with
the implementation of the Loan Parties' plans of reorganization or in connection
with the termination of this Credit Agreement and the payment in full of the
Obligations and the Prepetition Obligations.
42
(iii) MANDATORY PREPAYMENTS.
---------------------
(a) The Borrower shall repay the Revolving Loans to
the extent necessary to ensure that Holdings and its
Subsidiaries do not have cash or Cash Equivalents in excess of
$1,500,000 for a three consecutive Business Day period during
the last ten days of each calendar month. Amounts repaid under
this subsection may be reborrowed by the Borrower upon its
compliance with the requirements of this subsection.
(b) The Borrower shall from time to time repay (x)
the Revolving Loans to the extent necessary so that the Total
Utilization of Revolving Loan Commitments shall not at any
time exceed the Revolving Loan Commitments then in effect and
(y) the Cash Manage ment Indemnity Loans to the extent
necessary so that the outstanding principal amount thereof
shall not at any time exceed the Cash Manage ment Indemnity
Commitments then in effect.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) MANNER AND TIME OF PAYMENT. All payments by Borrower of
principal, interest, fees and other Obligations hereunder and under the Notes
shall be made in Dollars in same day funds, without defense, setoff or
counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 1:00 P.M. (New York City time) on the date
due at the Funding and Payment Office for the account of Lenders; funds received
by Administrative Agent after that time on such due date shall be deemed to have
been paid by Borrower on the next succeeding Business Day. Borrower hereby
authorizes Administrative Agent to charge its accounts with Administrative Agent
in order to cause timely payment to be made to Administrative Agent of all
principal, interest, fees and expenses due hereunder (subject to sufficient
funds being available in its accounts for that purpose).
(ii) [Reserved]
(iii) APPORTIONMENT OF PAYMENTS. Aggregate principal and
interest payments in respect of Revolving Loans shall be apportioned among all
outstanding Revolving Loans to which such payments relate, in each case
proportionately to Lenders' respective Pro Rata Shares. Administrative Agent
shall promptly distribute to each Lender, at its primary address set forth below
its name on the appropriate signature page hereof or at such other address as
such Lender may request, its Pro Rata Share of all such payments received by
Administrative Agent and the commitment fees of such Lender when received by
Administrative Agent pursuant to subsection 2.3.
(iv) PAYMENTS ON BUSINESS DAYS. Whenever any payment to be
43
made hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder or of the commitment fees hereunder, as the case may be.
(v) NOTATION OF PAYMENT. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all Loans
evidenced by that Note and all principal payments previously made thereon and of
the date to which interest thereon has been paid; provided that the failure to
make (or any error in the making of) a notation of any Loan made under such Note
shall not limit or otherwise affect the obligations of Borrower hereunder or
under such Note with respect to any Loan or any payments of principal or
interest on such Note.
D. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS BY GUARANTORS.
(i) APPLICATION OF PROCEEDS OF COLLATERAL. All proceeds
received by Administrative Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral under any Collateral
Document shall be applied by Administrative Agent against the applicable Secured
Obligations (used hereinafter as defined in such Collateral Document) then due
and owing in the following order of priority:
(a) To the payment of all costs and expenses of
such sale, collection or other realization, including reasonable
compensation to Administrative Agent and its agents and counsel, and
all other expenses, liabilities and advances made or incurred by
Administrative Agent in connection therewith, and all amounts for which
Administrative Agent is entitled to indemnification under such
Collateral Document and all advances made by Administrative Agent
thereunder for the account of the applicable Loan Party, and to the
payment of all costs and expenses paid or incurred by Administrative
Agent in connection with the exercise of any right or remedy under such
Collateral Document, including fees and expenses of counsel, all in
accordance with the terms of this Agreement and such Collateral
Document;
(b) thereafter, to the extent of any excess of
such proceeds, to the payment of all other such Obligations for the
ratable benefit of the holders thereof;
(c) thereafter, to the extent of any excess of
such proceeds, to the Collateral Account in an amount not greater than
105% of the Letter of Credit Usage to serve as Collateral for the Loan
Parties' obligations with respect to Letters of Credit then
outstanding; and
44
(d) thereafter, to the extent of any excess such
proceeds, to the payment to or upon the order of such Loan Party or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
(ii) APPLICATION OF PAYMENTS UNDER GUARANTY. All payments
received by Administrative Agent under the Guaranty shall be applied promptly
from time to time by Administrative Agent in the following order of priority:
(a) To the payment of the costs and expenses of
any collection or other realization under the Guaranty, including
reasonable compensation to Administrative Agent and its agents and
counsel, and all expenses, liabilities and advances made or incurred by
Administrative Agent in connection therewith, including fees and
expenses of counsel, all in accordance with the terms of this Agreement
and such Guaranty;
(b) thereafter, to the extent of any excess of
such payments, to the payment of all other Obligations for the ratable
benefit of the holders thereof;
(c) thereafter, to the extent of any excess of
such payment, to the Collateral Account in an amount not greater than
105% of the Letter of Credit Usage to serve as Collateral for the Loan
Parties' obligations with respect to Letters of Credit then
outstanding; and
(d) thereafter, to the extent of any excess of
such payments, to the payment to the applicable Guarantor or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
2.5 USE OF PROCEEDS.
A. REVOLVING LOANS. The proceeds of any Revolving Loans shall be used
by Borrower (i) to fund general corporate purposes relating to the operations of
the Borrower and the Guarantors after the Petition Date in accordance with, and
limited to the items set forth in, the Budget, (ii) to pay all interest, fees
and expenses of the Agents and the Lenders under the Loan Documents and of the
Prepetition Agents and the Prepetition Lenders under the Prepetition Credit
Agreement and the Prepetition Loan Documents and (iii) to pay those prepetition
claims as may be approved by the Bankruptcy Court. The proceeds of Cash
Management Indemnity Loans shall be used solely to make payments required to be
made to Bank One, N.A. under the Cash Management Indemnity Agreement.
B. PROHIBITED USES. No portion of the proceeds of any borrowing under
45
this Agreement shall be used (1) in any manner that might cause the borrowing or
the application of such proceeds to violate Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System or to
violate any other law, in each case as in effect on the date or dates of such
borrowing and such use of proceeds, or (2) to commence or prosecute any action
or objection with respect to the claims, liens or security interests that relate
to the Prepetition Credit Agreement, the Prepetition Loan Documents, the Cash
Management Indemnity Reimbursement Agreement, the Credit Agreement or the Loan
Documents.
2.6 [Reserved]
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
-----------------------------------------
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall determine (which
determination shall, absent demonstrable error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective after the
date hereof, or compliance by such Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or other
governmental or quasi-governmental authority (whether or not having the force of
law):
(i) subjects such Lender (or its applicable lending office) to
any additional Tax (other than any Tax on the overall net income of such Lender)
with respect to this Agreement or any of its obligations hereunder or any
payments to such Lender (or its applicable lending office) of principal,
interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other reserve),
special deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of, or
advances or loans by, or other credit extended by, or any other acquisition of
funds by, any office of such Lender; or
(iii) imposes any other condition (other than with respect to
a Tax matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder; and the result of any of the foregoing is to increase
the cost to such Lender of agreeing to make, making or maintaining Loans
hereunder or to reduce any amount received or receivable by such Lender (or its
applicable lending office) with respect thereto; then, in any such case,
Borrower shall within 10 days pay to such Lender, upon receipt of the statement
referred to in the next sentence,
46
such additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Borrower (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
Promptly after any Lender has determined, in its sole judgment, that it
will make a request for increased compensation pursuant to this Section 2.7A,
such Lender will notify Borrower thereof. Failure on the part of any Lender so
to notify Borrower or to demand compensation for any increased costs or
reduction in amounts received or receivable or reduction in return on capital
with respect to any period shall not constitute a waiver of such Lender's right
to demand compensation with respect to such period or any other period; provided
that Borrower shall not be under any obligation to compensate any Lender with
respect to increased costs or reductions with respect to any period prior to the
date that is six months prior to such request if such Lender knew of the
circumstances giving rise to such increased costs or reductions and of the fact
that such circumstances would in fact result in a claim for increased
compensation by reason of such increased costs or reductions; and provided,
further, that the foregoing limitation shall not apply to any increased costs or
reductions arising out of the retroactive application of any law, regulation,
rule, guideline or directive as aforesaid within such six-month period.
B. WITHHOLDING OF TAXES.
(i) PAYMENTS TO BE FREE AND CLEAR. All sums payable by
Borrower under this Agreement and the other Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net income
of any Lender) imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of the United States
of America or any other jurisdiction from or to which a payment is made by or on
behalf of Borrower or by any federation or organization of which the United
States of America or any such jurisdiction is a member at the time of payment.
(ii) GROSSING-UP OF PAYMENTS. If Borrower or any other Person
is required by law to make any deduction or withholding on account of any such
Tax from any sum paid or payable by Borrower to Administrative Agent or any
Lender under any of the Loan Documents:
(a) Borrower shall notify Administrative Agent of
any such requirement or any change in any such requirement as soon as
Borrower becomes aware of it;
47
(b) Borrower shall pay any such Tax before the
date on which penalties attach thereto, such payment to be made (if the
liability to pay is imposed on Borrower) for its own account or (if
that liability is imposed on Administrative Agent or such Lender, as
the case may be) on behalf of and in the name of Administrative Agent
or such Lender;
(c) the sum payable by Borrower in respect of
which the relevant deduction, withholding or payment is required shall
be increased to the extent necessary to ensure that, after the making
of that deduction, withholding or payment, Administrative Agent or such
Lender, as the case may be, receives on the due date a net sum equal to
what it would have received had no such deduction, withholding or
payment been required or made; and
(d) within 30 days after paying any sum from
which it is required by law to make any deduction or withholding, and
within 30 days after the due date of payment of any Tax which it is
required by clause (b) above to pay, Borrower shall deliver to
Administrative Agent evidence satisfactory to the other affected
parties of such deduction, withholding or payment and of the remittance
thereof to the relevant taxing or other authority; provided that no
such additional amount shall be required to be paid to any Lender under
clause (c) above except to the extent that any change after the date
hereof (in the case of each Lender listed on the signature pages
hereof) or after the date of the Assignment Agreement pursuant to which
such Lender became a Lender (in the case of each other Lender) in any
such requirement for a deduction, withholding or payment as is
mentioned therein shall result in an increase in the rate of such
deduction, withholding or payment from that in effect at the date of
this Agreement or at the date of such Assignment Agreement, as the case
may be, in respect of payments to such Lender.
(iii) EVIDENCE OF EXEMPTION FROM U.S. WITHHOLDING TAX.
(a) Each Lender that is organized under the laws of
any jurisdiction other than the United States or any state or other
political subdivision thereof (for purposes of this subsection
2.7B(iii), a "NON-US LENDER") shall deliver to Administrative Agent for
transmission to Borrower, on or prior to the Closing Date (in the case
of each Lender listed on the signature pages hereof) or on or prior to
the date of the Assignment Agreement pursuant to which it becomes a
Lender (in the case of each other Lender), and at such other times as
may be necessary in the determination of Borrower or Administrative
Agent (each in the reasonable exercise of its discretion), (1) two
original copies of Internal Revenue Service Form 1001 or
48
4224 (or any successor forms), properly completed and duly executed by
such Lender, together with any other certificate or statement of
exemption required under the Internal Revenue Code or the regulations
issued thereunder to establish that such Lender is not subject to
deduction or withholding of United States federal income tax with
respect to any payments to such Lender of principal, interest, fees or
other amounts payable under any of the Loan Documents or (2) if such
Lender is not a "bank" or other Person described in Section 881(c)(3)
of the Internal Revenue Code and cannot deliver either Internal Revenue
Service Form 1001 or 4224 pursuant to clause (1) above, a Certificate
re Non-Bank Status together with two original copies of Internal
Revenue Service Form W-8 (or any successor form), properly completed
and duly executed by such Lender, together with any other certificate
or statement of exemption required under the Internal Revenue Code or
the regulations issued thereunder to establish that such Lender is not
subject to deduction or withholding of United States federal income tax
with respect to any payments to such Lender of interest payable under
any of the Loan Documents.
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States federal
income tax withholding matters pursuant to subsection 2.7B(iii)(a)
hereby agrees, from time to time after the initial delivery by such
Lender of such forms, certificates or other evidence, whenever a lapse
in time or change in circumstances renders such forms, certificates or
other evidence obsolete or inaccurate in any material respect, that
such Lender shall promptly (1) deliver to Administrative Agent for
transmission to Borrower two new original copies of Internal Revenue
Service Form 1001 or 4224, or a Certificate re Non-Bank Status and two
original copies of Internal Revenue Service Form W-8, as the case may
be, properly completed and duly executed by such Lender, together with
any other certificate or statement of exemption required in order to
confirm or establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to
payments to such Lender under the Loan Documents or (2) notify
Administrative Agent and Borrower of its inability to deliver any such
forms, certificates or other evidence.
(c) Borrower shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of subsection
2.7B(ii) if such Lender shall have failed to satisfy the requirements
of clause (a) or (b)(1) of this subsection 2.7B(iii); PROVIDED that if
such Lender shall have satisfied the requirements of subsection
2.7B(iii)(a) on the Closing Date (in the case of each Lender listed on
the signature pages hereof) or on the date of the Assignment Agreement
pursuant to which it became a Lender (in the case of each other
Lender), nothing in this subsection 2.7B(iii)(c) shall relieve Borrower
of its obligation to pay any additional amounts pursuant to clause (c)
of subsection 2.7B(ii) in the event that, as a result of any change in
any
49
applicable law, treaty or governmental rule, regulation or order, or
any change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date establishing the
fact that such Lender is not subject to withholding as described in
subsection 2.7B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after the date
hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by the National Association of Insurance Commissioners,
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
applicable lending office) with any guideline, request or directive regarding
capital adequacy (whether or not having the force of law) of the National
Association of Insurance Commissioners, any such governmental authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on the capital of such Lender or any corporation controlling such Lender
as a consequence of, or with reference to, such Lender's Loans or Commitments or
Letters of Credit or participations therein or other obligations hereunder with
respect to the Loans or the Letters of Credit to a level below that which such
Lender or such controlling corporation could have achieved but for such
adoption, effectiveness, phase-in, applicability, change or compliance (taking
into consideration the policies of such Lender or such controlling corporation
with regard to capital adequacy), then from time to time, within ten Business
Days after receipt by Borrower from such Lender of the statement referred to in
the next sentence, Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling corporation on an
after-tax basis for such reduction. Such Lender shall deliver to Borrower (with
a copy to Administrative Agent) a written statement, setting forth in reasonable
detail the basis of the calculation of such additional amounts, which statement
shall be conclusive and binding upon all parties hereto absent demonstrable
error.
2.8 OBLIGATION OF LENDERS AND ISSUING LENDER TO MITIGATE.
-----------------------------------------------------
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may
be, becomes aware of the occurrence of an event or the existence of a condition
that would entitle such Lender or Issuing Lender to receive payments under
subsection 2.7 or subsection 3.6, it will, to the extent not inconsistent with
the internal policies of such Lender or Issuing Lender and any applicable legal
or regulatory restrictions, use reasonable efforts (i) to make, issue, fund or
maintain the Commitments of such Lender or the affected Loans or Letters of
Credit of such Lender or Issuing Lender through another lending or letter of
credit office of such Lender or Issuing Lender, or
50
(ii) take such other measures as such Lender or Issuing Lender may deem
reasonable, if as a result thereof additional amounts which would otherwise be
required to be paid to such Lender or Issuing Lender pursuant to subsection 2.7
or subsection 3.6 would be materially reduced and if, as determined by such
Lender or Issuing Lender in its sole discretion, the making, issuing, funding or
maintaining of such Commitments or Loans or Letters of Credit through such other
lending or letter of credit office or in accordance with such other measures, as
the case may be, would not otherwise materially adversely affect such
Commitments or Loans or Letters of Credit or the interests of such Lender or
Issuing Lender; provided that such Lender or Issuing Lender will not be
obligated to utilize such other lending or letter of credit office pursuant to
this subsection 2.8 unless Borrower agrees to pay all incremental expenses
incurred by such Lender or Issuing Lender as a result of utilizing such other
lending or letter of credit office as described in clause (i) above. A
certificate as to the amount of any such expenses payable by Borrower pursuant
to this subsection 2.8 (setting forth in reasonable detail the basis for
requesting such amount) submitted by such Lender or Issuing Lender to Borrower
(with a copy to Administrative Agent) shall be conclusive absent demonstrable
error.
SECTION 2A
PRIORITIES AND LIENS; SURVIVAL OF CLAIMS
2A.1 PRIORITIES AND LIENS.
--------------------
(A) The Borrower and each of the Guarantors hereby covenants,
represents and warrants that the Obligations of the Borrower and the Guarantors
hereunder and under the other Loan Documents shall at all times be: (i) secured,
pursuant to section 364(c)(2) of the Bankruptcy Code, by a first priority
perfected lien on, and security interest in, all present and after acquired
property of the Borrower and the Guarantors (other than their respective rights
to commence and prosecute avoidance actions in connection with prepetition
claims) not subject to a lien or security interest on the Petition Date; (ii)
secured, pursuant to section 364(d)(1) of the Bankruptcy Code, by a first
priority, senior priming perfected lien on, and security interest in, all
present and after acquired property of the Borrower and the Guarantors that is
(or is intended or is purported to be) subject to a lien or security interest on
the Petition Date to secure the obligations of the Borrower and the Guarantors
to the Prepetition Agents and the Prepetition Lenders under the Prepetition
Credit Agreement and the other Prepetition Loan Documents or to secure the
obligations of the Borrower to Scotiabank under the Cash Management Indemnity
Reimbursement Agreement (the "PREPETITION OBLIGATIONS"); except property subject
to Liens permitted pursuant to subsection 7.2A of the Prepetition Credit
Agreement ("PREPETITION PERMITTED LIENS"); (iii) secured, pursuant to section
364(c)(3) of the Bankruptcy Code, by a perfected junior lien on, and security
interest in, all property of the Borrower and the Guarantors that is otherwise
subject
51
to a valid and perfected Prepetition Permitted Lien on the Petition Date or a
valid lien perfected (but not granted) after the Petition Date to the extent
such post- Petition Date perfection in respect of a pre-Petition Date claim is
expressly permitted under the Bankruptcy Code, PROVIDED that the Liens and
security interests granted to the Agents and the Lenders hereunder and under the
Interim Order (and Final Order, as applicable) shall be senior to (a) any
Prepetition Permitted Lien which is expressly stated in the Prepetition Credit
Agreement to be junior to the Liens and security interests granted to the
Prepetition Agent or the Prepetition Lenders and (b) any Liens or security
interests granted in and to the Collateral which were not permitted pursuant to
the Prepetition Credit Agreement, and (iv) Superpriority Claims entitled to the
benefits of section 364(c)(1) of the Bankruptcy Code, subject and subordinate in
each case with respect to subclauses (i) through (iv) above, only to the
Carve-out.
(B) As to all Collateral, each of the Borrower and the Guarantors
hereby assigns, grants and conveys as security, grants a security interest in,
hypothecates, mortgages, pledges and sets over unto the Administrative Agent,
for the ratable benefit of the Lenders and the Agent, all of the right, title
and interest of the Borrower and such Guarantor in all of such Collateral,
together in each case with all of the right, title and interest of the Borrower
and each Guarantor in and to all buildings, improvements, and fixtures related
thereto, any lease or sublease thereof, all general intangibles relating thereto
and all proceeds thereof. The Borrower and each Guarantor acknowledge that,
pursuant to the Interim Order and the Final Order, all of the Collateral shall
be perfected without the filing or recordation of any UCC financing statements,
notices of Lien or other instruments of mortgage or assignment and without the
necessity of any party delivering, filing, registering or recording any other
financing statements, filings, notices, recordings or other instruments or
otherwise taking any other action to perfect such security interests or Liens.
The Borrower and each Guarantor further agree that (i) the Administrative Agent
shall have rights and remedies set forth in Section 9 in respect of the
Collateral and (ii) if requested by any Agent, each of the Borrower and the
Guarantors shall promptly enter into separate security agreements, pledge
agreements and fee and leasehold mortgages with respect to such Collateral on
terms reasonably satisfactory to the Agent and shall cause to be filed in the
public record such financing statements, mortgages, notices and other documents
and instruments as the Administrative Agent may reasonably require.
(C) The Borrower and the Guarantors acknowledge and agree that, as
adequate protection for the use of the Prepetition Lenders' Cash Collateral, the
use, sale, or lease of the Prepetition Collateral (other than such Cash
Collateral), the Prepetition Lenders' interests in the Liens that are being
primed as set forth in subsection 2A.1(A)(ii) and the imposition of the
automatic stay pursuant to Section 362(a) of the Bankruptcy Code, the
Prepetition Agent and the Prepetition Lenders shall, pursuant to the Interim
Order (and the Final Order, as applicable), receive to the extent of any
diminution (if any) in the value of the Prepetition Collateral (i) a
Superpriority Claim junior only to the Super-priority Claim granted to the
Agents and the Lenders, (ii) a replacement Lien (to the extent, validity and
priority as
52
described in the Final Order) on the Collateral having a priority immediately
junior to the priming and other Liens granted in favor of the Agents and the
Lenders hereunder and under the other Loan Documents and the Orders (subject and
subordinate, in the case of clauses (i) and (ii) above, to the Carve-Out and
valid and perfected Liens which are senior (after giving effect to the Interim
Order (and the Final Order, as applicable)) to the Liens granted to the Agent
and the Lenders pursuant to the Interim Order (and the Final Order, as
applicable), and (iii) the Borrower shall deliver to the Prepetition Agent and
the Prepetition Lenders (without duplication) copies of all financial and other
reporting, notices and other information delivered to the Agent and the Lenders
under or in connection with this Agreement concurrently with the delivery of
such information to the Agent and the Lenders. Nothing contained in this
Agreement shall prejudice the right of the Prepetition Agents or the Prepetition
Lenders to seek relief from the automatic stay or any other relief, including
the right to seek to terminate the use of Cash Collateral.
2A.2 NO DISCHARGE: SURVIVAL OF CLAIMS.
---------------------------------
The Borrower and each of the Guarantors agrees that to the extent its
Obligations hereunder are not satisfied in full, (i) its Obligations arising
hereunder shall not be discharged by the entry of a confirmation order (and the
Borrower and each Guarantor, pursuant to Section 1141(d)(4) of the Bankruptcy
Code, hereby waives any such discharge) and (ii) the Superpriority Claim granted
to the Agents and the Lenders pursuant to the Orders and described in subsection
2A.1(A) and the Liens granted to the Agents and the Lenders pursuant to the
Orders and described in subsection 2A.1(A) shall not be affected in any manner
by the entry of a confirmation order.
SECTION 3.
LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF PARTICIPATIONS
---------------------------------------------------------------------
THEREIN.
--------
A. LETTERS OF CREDIT. In addition to Borrower requesting that Lenders
make Revolving Loans pursuant to subsection 2.1A, Borrower may request, in
accordance with the provisions of this subsection 3.1, from time to time during
the period from the Closing Date to but excluding the Commitment Termination
Date, that Issuing Lender issue Letters of Credit for the account of Borrower
for the purposes specified in the definitions of Commercial Letters of Credit
and Standby Letters of Credit. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrower
herein set forth, Issuing Lender shall issue such Letters of Credit in
accordance with the provisions of this subsection 3.1; provided that Borrower
shall not request that Issuing Lender issue
53
(and Lender shall not issue):
(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan Commitments would exceed the
Revolving Loan Commitments then in effect; or
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $5,000,000; or
(iii) any Standby Letter of Credit having an expiration date
later than the Commitment Termination Date; or
(iv) any Commercial Letter of Credit having an expiration date
(a) later than the earlier of (a) the date which is 30 days prior to the
Commitment Termination Date and (b) the date which is 180 days from the date of
issuance of such Commercial Letter of Credit or (b) that is otherwise
unacceptable to Issuing Lender in its reasonable discretion; or
(v) any Letter of Credit denominated in a currency other than
Dollars.
B. MECHANICS OF ISSUANCE.
(i) NOTICE OF ISSUANCE. Whenever Borrower desires the issuance
of a Letter of Credit, it shall deliver to Issuing Lender a Notice of Issuance
of Letter of Credit no later than 10:00 a.m. (New York City time) at least three
Business Days, or such shorter period as may be agreed to by Issuing Lender, in
its sole discretion, in any particular instance, in advance of the proposed date
of issuance. The Notice of Issuance of Letter of Credit shall specify (a) the
proposed date of issuance (which shall be a Business Day), (b) whether the
Letter of Credit is to be a Standby Letter of Credit or a Commercial Letter of
Credit, (c) the face amount of the Letter of Credit, (d) the expiration date of
the Letter of Credit, (e) the name and address of the beneficiary, and (f)
either the verbatim text of the proposed Letter of Credit or the proposed terms
and conditions thereof, including a precise description of any documents to be
presented by the beneficiary which, if presented by the beneficiary prior to the
expiration date of the Letter of Credit, would require Issuing Lender to make
payment under the Letter of Credit; provided that Issuing Lender, in its
reasonable discretion, may require changes in the text of the proposed Letter of
Credit or any such documents; and provided, further that, unless otherwise
agreed by the Issuing Lender, no Letter of Credit shall require payment against
a conforming draft to be made thereunder on the same business day (under the
laws of the jurisdiction in which the office of Issuing Lender to which such
draft is required to be presented is located) that such draft is presented if
such presentation is made after 10:00 A.M. (in the time zone of such office of
Issuing Lender) on such business day.
54
Borrower shall notify Issuing Lender (and Administrative Agent, if
Administrative Agent is not Issuing Lender) prior to the issuance of any Letter
of Credit in the event that any of the matters to which Borrower has certified
in the applicable Notice of Issuance of Letter of Credit is no longer true and
correct as of the proposed date of issuance of such Letter of Credit, and upon
the issuance of any Letter of Credit Borrower shall be deemed to have
re-certified, as of the date of such issuance, as to the matters to which
Borrower is required to certify in the applicable Notice of Issuance of Letter
of Credit.
(ii) ISSUANCE OF LETTER OF CREDIT. Upon satisfaction or waiver
(in accordance with subsection 10.6) of the conditions set forth in subsection
4.3, Issuing Lender shall issue the requested Letter of Credit in accordance
with Issuing Lender's standard operating procedures.
(iii) NOTIFICATION TO LENDERS. Upon the issuance of any Letter
of Credit Issuing Lender shall promptly notify Administrative Agent (if Issuing
Lender is not Administrative Agent) and each other Lender of such issuance,
which notice shall be accompanied by a copy of such Letter of Credit. Promptly
after receipt of such notice (or, if Administrative Agent is Issuing Lender,
together with such notice), Administrative Agent shall notify each Lender of
the amount of such Lender's respective participation in such Letter of Credit,
determined in accordance with subsection 3.1C.
(iv) REPORTS TO LENDERS. Within 30 days after the end of each
calendar quarter ending after the Closing Date, so long as any Letter of Credit
shall have been outstanding during such calendar quarter, Issuing Lender shall
deliver to each other Lender a report setting forth for such calendar quarter
the daily aggregate amount available to be drawn under the Letters of Credit
issued by Issuing Lender that were outstanding during such calendar quarter.
C. LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT.
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby agrees to, have irrevocably purchased from Issuing Lender
a participation in such Letter of Credit and any drawings honored thereunder in
an amount equal to such Lender's Pro Rata Share of the maximum amount which is
or at any time may become available to be drawn thereunder.
3.2 LETTER OF CREDIT FEES.
----------------------
Borrower agrees to pay the following amounts with respect to Letters of
Credit issued hereunder:
(i) with respect to each Letter of Credit, (a) a fronting fee,
payable directly to Issuing Lender for its own account, equal to the greater of
(1) $500 and (2) 0.25% per annum of the daily amount available to be drawn under
such Letter of Credit and (b) a letter of credit fee, payable to Administrative
Agent for the account of Lenders, equal to 3% per annum on the daily amount
available to be drawn under
55
such Letter of Credit, each such fronting fee or letter of credit fee to be
payable in arrears on the last Business Day of each calendar month and computed
on the basis of a 365-day or 366-day year, as the case may be, for the actual
number of days elapsed; and
(ii) with respect to the issuance, amendment or transfer of
each Letter of Credit and each payment of a drawing made thereunder (without
duplication of the fees payable under clause (i) above), documentary and
processing charges payable directly to Issuing Lender for its own account in
accordance with Issuing Lender's standard schedule for such charges in effect at
the time of such issuance, amendment, transfer or payment, as the case may be.
For purposes of calculating any fees payable under clause (i) of this subsection
3.2, the daily amount available to be drawn under any Letter of Credit shall be
determined as of the close of business on any date of determination. Promptly
upon receipt by Administrative Agent of any amount described in clause (i)(b) of
this subsection 3.2, Administrative Agent shall distribute to each Lender its
Pro Rata Share of such amount.
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF CREDIT.
------------------------------------------------------------------
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. REIMBURSEMENT BY BORROWER OF AMOUNTS PAID UNDER LETTERS OF CREDIT.
In the event Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, Issuing Lender shall immediately notify Borrower and
Administrative Agent, and Borrower shall reimburse Issuing Lender on or before
11:00 a.m. (New York City time) the Business Day immediately following the date
on which such drawing is honored (the "REIMBURSEMENT DATE") in an amount in
Dollars and in same day funds equal to the amount of such honored drawing;
provided that, anything contained in this Agreement to the contrary
notwithstanding, (i) unless Borrower shall have notified Administrative Agent
and Issuing Lender prior to 10:00 A.M. (New York City time) on the date such
drawing is honored that Borrower intends to reimburse Issuing Lender for the
amount of such honored drawing with funds other than the proceeds of Revolving
Loans, Borrower shall be deemed to have given a timely Notice of Borrowing to
Administrative Agent requesting Lenders to make Revolving Loans on the
Reimbursement Date in an amount in Dollars equal to the amount of such honored
drawing and (ii) subject to satisfaction or waiver of the conditions specified
in subsection 4.2B-1, Lenders shall, on the Reimbursement Date, make Revolving
Loans in the amount of such honored drawing, the proceeds of which shall be
applied directly by Administrative Agent to
56
reimburse Issuing Lender for the amount of such honored drawing; and provided,
further that if for any reason proceeds of Revolving Loans are not received by
Issuing Lender on the Reimbursement Date in an amount equal to the amount of
such honored drawing, Borrower shall reimburse Issuing Lender, on demand, in an
amount in same day funds equal to the excess of the amount of such honored
drawing over the aggregate amount of such Revolving Loans, if any, which are so
received. Nothing in this subsection 3.3B shall be deemed to relieve any Lender
from its obligation to make Revolving Loans on the terms and conditions set
forth in this Agreement, and Borrower shall retain any and all rights it may
have against any Lender resulting from the failure of such Lender to make such
Revolving Loans under this subsection 3.3B.
C. PAYMENT BY LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER LETTERS OF
CREDIT.
(i) PAYMENT BY LENDERS. In the event that Borrower shall fail
for any reason to reimburse Issuing Lender as provided in subsection 3.3B in an
amount equal to the amount of any drawing honored by Issuing Lender under a
Letter of Credit issued by it, Issuing Lender shall promptly notify each other
Lender of the unreimbursed amount of such honored drawing and of such other
Lender's respective participation therein based on such Lender's Pro Rata Share.
Each Lender shall make available to Issuing Lender an amount equal to its
respective participation, in Dollars and in same day funds, at the office of
Issuing Lender specified in such notice, not later than 12:00 Noon (New York
City time) on the first business day (under the laws of the jurisdiction in
which such office of Issuing Lender is located) after the date notified by
Issuing Lender. In the event that any Lender fails to make available to Issuing
Lender on such business day the amount of such Lender's participation in such
Letter of Credit as provided in this subsection 3.3C, Issuing Lender shall be
entitled to recover such amount on demand from such Lender together with
interest thereon at the rate customarily used by Issuing Lender for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. Nothing in this subsection 3.3C shall be deemed to prejudice the
right of any Lender to recover from Issuing Lender any amounts made available by
Lender to Issuing Lender pursuant to this subsection 3.3C in the event that it
is determined by the final judgment of a court of competent jurisdiction that
the payment with respect to a Letter of Credit by Issuing Lender in respect of
which payment was made by Lender constituted gross negligence or willful
misconduct on the part of Issuing Lender.
(ii) DISTRIBUTION TO LENDERS OF REIMBURSEMENTS RECEIVED FROM
BORROWER. In the event Issuing Lender shall have been reimbursed by other
Lenders pursuant to subsection 3.3C(i) for all or any portion of any drawing
honored by Issuing Lender under a Letter of Credit issued by it, Issuing Lender
shall distribute to each other Lender which has paid all amounts payable by it
under subsection 3.3C(i) with respect to such honored drawing such other
Lender's Pro Rata Share of all payments subsequently received by Issuing Lender
from Borrower in reimbursement
57
of such honored drawing when such payments are received. Any such distribution
shall be made to a Lender at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as such Lender may
request.
D. INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.
(i) PAYMENT OF INTEREST BY BORROWER. Borrower agrees to pay to
Issuing Lender, with respect to drawings honored under any Letters of Credit
issued by it, interest on the amount paid by Issuing Lender in respect of each
such honored drawing from the date such drawing is honored to but excluding the
date such amount is reimbursed by Borrower (including any such reimbursement out
of the proceeds of Revolving Loans pursuant to subsection 3.3B) at a rate equal
to (a) for the period from the date such drawing is honored to but excluding the
Reimbursement Date, the rate then in effect under this Agreement with respect to
Revolving Loans and (b) thereafter, a rate which is 2% per annum in excess of
the rate of interest otherwise payable under this Agreement with respect to
Revolving Loans. Interest payable pursuant to this subsection 3.3D(i) shall be
computed on the basis of a 365-day or 366-day year, as the case may be, for the
actual number of days elapsed in the period during which it accrues and shall be
payable on demand or, if no demand is made, on the date on which the related
drawing under a Letter of Credit is reimbursed in full.
(ii) DISTRIBUTION OF INTEREST PAYMENTS BY ISSUING LENDER.
Promptly upon receipt by Issuing Lender of any payment of interest pursuant to
subsection 3.3D(i) with respect to a drawing honored under a Letter of Credit
issued by it, (a) Issuing Lender shall distribute to each other Lender, out of
the interest received by Issuing Lender in respect of the period from the date
such drawing is honored to but excluding the date on which Issuing Lender is
reimbursed for the amount of such drawing (including any such reimbursement out
of the proceeds of Revolving Loans pursuant to subsection 3.3B), the amount that
such other Lender would have been entitled to receive in respect of the letter
of credit fee that would have been payable in respect of such Letter of Credit
for such period pursuant to subsection 3.2 if no drawing had been honored under
such Letter of Credit, and (b) in the event Issuing Lender shall have been
reimbursed by other Lenders pursuant to subsection 3.3C(i) for all or any
portion of such honored drawing, Issuing Lender shall distribute to each other
Lender which has paid all amounts payable by it under subsection 3.3C(i) with
respect to such honored drawing such other Lender's Pro Rata Share of any
interest received by Issuing Lender in respect of that portion of such honored
drawing so reimbursed by other Lenders for the period from the date on which
Issuing Lender was so reimbursed by other Lenders to but excluding the date on
which such portion of such honored drawing is reimbursed by Borrower. Any such
distribution shall be made to a Lender at its primary address set forth below
its name on the appropriate signature page hereof or at such other address as
such Lender may
58
request.
3.4 OBLIGATIONS ABSOLUTE.
---------------------
The obligation of Borrower to reimburse Issuing Lender for drawings
honored under the Letters of Credit issued by it and to repay any Revolving
Loans made by Lenders pursuant to subsection 3.3B and the obligations of Lenders
under subsection 3.3C(i) shall be unconditional and irrevocable and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other
right which Borrower or any Lender may have at any time against a beneficiary or
any transferee of any Letter of Credit (or any Persons for whom any such
transferee may be acting), Issuing Lender or other Lender or any other Person
or, in the case of a Lender, against Borrower, whether in connection with this
Agreement, the transactions contemplated herein or any unrelated transaction
(including any underlying transaction between Borrower or one of its
Subsidiaries and the beneficiary for which any Letter of Credit was procured);
(iii) any draft or other document presented under any Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(iv) payment by Issuing Lender under any Letter of Credit
against presentation of a draft or other document which does not substantially
comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Borrower
or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document
by any party thereto;
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event
of Default shall have occurred and be continuing; provided, in each case, that
payment by Issuing Lender under the applicable Letter of Credit shall not have
constituted gross negligence, willful misconduct or bad faith of Issuing Lender
under the circumstances in question.
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3.5 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
---------------------------------------------------
A. INDEMNIFICATION. In addition to amounts payable as provided in
subsection 3.6, Borrower hereby agrees to protect, indemnify, pay and save
harmless Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by Issuing
Lender, other than as a result of (a) the gross negligence, willful misconduct
or bad faith of Issuing Lender or (b) subject to the following clause (ii), the
wrongful dishonor by Issuing Lender of a proper demand for payment made under
any Letter of Credit issued by it or (ii) the failure of Issuing Lender to honor
a drawing under any such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions herein called
"GOVERNMENTAL ACTS").
B. NATURE OF ISSUING LENDER'S DUTIES. As between Borrower and Issuing
Lender, Borrower assumes all risks of the acts and omissions of, or misuse of
the Letters of Credit issued by Issuing Lender by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in limitation of the
foregoing, Issuing Lender shall not be responsible for: (i) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of any such Letter
of Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or assign
any such Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or ineffective for
any reason; (iii) failure of the beneficiary of any such Letter of Credit to
comply fully with any conditions required in order to draw upon such Letter of
Credit; (iv) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher; (v) errors in interpretation of technical terms; (vi)
any loss or delay in the transmission or otherwise of any document required in
order to make a drawing under any such Letter of Credit or of the proceeds
thereof; (vii) the misapplication by the beneficiary of any such Letter of
Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any
consequences arising from causes beyond the control of Issuing Lender, including
any Governmental Acts, and none of the above shall affect or impair, or prevent
the vesting of, any of Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by Issuing Lender under or in connection with the Letters of
Credit issued by it or any
60
documents and certificates delivered thereunder, if taken or omitted in good
faith, shall not put Issuing Lender under any resulting liability to Borrower.
Notwithstanding anything to the contrary contained in this subsection
3.5, Borrower shall retain any and all rights it may have against Issuing Lender
for any liability arising solely out of the gross negligence, willful misconduct
or bad faith of Issuing Lender.
3.6 INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
-------------------------------------------------------
Subject to the provisions of subsection 2.7B (which shall be
controlling with respect to the matters covered thereby), in the event that
Issuing Lender or any Lender shall determine (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto)
that any law, treaty or governmental rule, regulation or order, or any change
therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by
Issuing Lender or any Lender with any guideline, request or directive issued or
made after the date hereof by any central bank or other governmental or
quasi-governmental authority (whether or not having the force of law):
(i) subjects Issuing Lender or such Lender (or its applicable
lending or letter of credit office) to any additional Tax (other than any Tax on
the overall net income of Issuing Lender or such Lender) with respect to the
issuing or maintaining of any Letters of Credit or the purchasing or maintaining
of any participations therein or any other obligations under this Section 3,
whether directly or by such being imposed on or suffered by Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other reserve),
special deposit, compulsory loan, FDIC insurance or similar requirement in
respect of any Letters of Credit issued by Issuing Lender or participations
therein purchased by such Lender; or
(iii) imposes any other condition (other than with respect to
a Tax matter) on or affecting Issuing Lender or Lender (or its applicable
lending or letter of credit office) regarding this Section 3 or any Letter of
Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to Issuing Lender
or such Lender of agreeing to issue, issuing or maintaining any Letter of Credit
or agreeing to purchase, purchasing or maintaining any participation therein or
to reduce any amount received or receivable by Issuing Lender or such Lender (or
its applicable
61
lending or letter of credit office) with respect thereto; then, in any case,
Borrower shall promptly pay to Issuing Lender or such Lender, upon receipt of
the statement referred to in the next sentence, such additional amount or
amounts as may be necessary to compensate Issuing Lender or such Lender for any
such increased cost or reduction in amounts received or receivable hereunder.
Issuing Lender or such Lender shall deliver to Borrower a written statement,
setting forth in reasonable detail the basis for calculating the additional
amounts owed to Issuing Lender or such Lender under this subsection 3.6, which
statement shall be conclusive and binding upon all parties hereto absent
demonstrable error. Promptly after Issuing Lender or any Lender has determined,
in its sole judgment, that it will make a request for increased compensation
pursuant to this subsection 3.6, Issuing Lender or such Lender, as the case may
be, will notify Borrower thereof. Failure on the part of Issuing Lender or such
Lender, as the case may be, so to notify Borrower or to demand compensation for
any increased costs or reduction in amounts received or receivable or reduction
in return on capital with respect to any period shall not constitute a waiver of
Issuing Lender's or such Lender's right to demand compensation with respect to
such period or any other period; provided that Borrower shall not be under any
obligation to compensate Issuing Lender or any Lender with respect to increased
costs or reductions with respect to any period prior to the date that is six
months prior to such request if Issuing Lender or such Lender knew of the
circumstances giving rise to such increased costs or reductions and of the fact
that such circumstances would in fact result in a claim for increased
compensation by reason of such increased costs or reductions; provided, further,
that the foregoing limitation shall not apply to any increased costs or
reductions arising out of the retroactive application of any law, regulation,
rule, guideline or directive as aforesaid within such six-month period.
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of Letters of
Credit hereunder are subject to the satisfaction of the following conditions.
4.1 CONDITIONS TO CLOSING.
----------------------
The obligations of Lenders to make the initial Loans hereunder are, in
addition to the conditions precedent specified in subsection 4.2, subject to
prior or concurrent satisfaction of the following conditions:
A. LOAN PARTY DOCUMENTS. On or before the Closing Date, Borrower and
each Guarantor shall deliver to Lenders (or to Administrative Agent for Lenders
with sufficient originally executed copies, where appropriate, for each Lender
and its counsel) the following with respect to such Loan Party each, unless
otherwise noted, dated the Closing Date:
62
(i) With respect to Borrower, Holdings and each Subsidiary
Guarantor listed on Schedule 4.1 hereto, a long-form good standing certificate
from the Secretary of State of its jurisdiction of organization, each dated a
recent date prior to the Closing Date;
(ii) Copies of the Bylaws and Articles or Certificates of
Incorporation of such Person, certified as of the Closing Date by such Person's
corporate secretary or an assistant secretary or a certificate from such
Person's secretary or assistant secretary stating that such Person's Bylaws and
Articles or Certificate of Incorporation have not been amended since the
delivery thereof to the Prepetition Agents in November 1999;
(iii) Resolutions of the Board of Directors of such Person
approving and authorizing the execution, delivery and performance of the Loan
Documents to which it is a party and authorizing the commencement of the Case
with respect to which it is a debtor, each in form and substance satisfactory to
the Administrative Agent, certified as of the Closing Date by the corporate
secretary or an assistant secretary of such Person as being in full force and
effect without modification or amendment;
(iv) Signature and incumbency certificates of the officers of
such Person executing the Loan Documents to which it is a party which
certificates shall be executed by the secretary or assistant secretary of such
Person;
(v) Executed originals of a reaffirmation agreement (the
"REAFFIRMATION"), substantially in the form of Exhibit XVI hereto, relating to
the Cash Manage ment Indemnity Reimbursement Agreement; and
(vi) Executed originals of each Loan Document to which such
Person is a party.
B. NO MATERIAL ADVERSE CHANGE. Since December 31, 1999, no event,
change or development has occurred which has had, or could reasonably be
expected to have, a Material Adverse Effect.
C. INITIAL ORDER. On or before the fifteenth day after the Petition
Date, Agent and each Lender shall have received a copy (to be followed by a
certified copy when available) of an order of the Bankruptcy Court in
substantially the form of EXHIBIT XIV (the "INTERIM ORDER") approving the Loan
Documents and granting the Superpriority Claim status and senior priming and
other Liens described in Section 2A, which Interim Order (i) shall have been
entered, with the consent or non-objection of a preponderance, as determined by
the Administrative Agent in their sole judgment, of the Prepetition Lenders,
upon an application or motion of the Borrower reasonably satisfactory in form
and substance to the Agents, on such prior
63
notice to such parties (including the Prepetition Lenders) as may in each case
be reasonably satisfactory to the Agents, (ii) shall authorize extensions of
credit in amounts satisfactory to the Agents, (iii) shall approve the payment by
the Borrower of all of the fees set forth in Subsection 2.3 and the fees of
professionals of the DIP Agents, (iv) shall be in full force and effect, and (v)
shall not have been stayed, reversed, modified or amended in any respect without
the prior written consent of the Agents and the Requisite Lenders; and, if the
Interim Order is the subject of a pending appeal in any respect, neither the
making of Loans nor the issuance of any Letter of Credit nor the performance by
the Borrower or any of the Guarantors of any of their respective obligations
hereunder or under the other Loan Documents or under any other instrument or
agreement referred to herein shall be the subject of a presently effective stay
pending appeal, and in the event the Interim Order is reversed or modified on
appeal, the validity of any action taken pursuant to the Interim Order shall not
be affected as provided in section 364(e) of the Bankruptcy Code
D. OTHER ORDERS. The Agents shall have received, with a copy to each
Lender and Prepetition Lender, a copy of such other order or orders of the
Bankruptcy court as the Agents may deem necessary or desirable, including,
without limitation, an order or orders entered by the Bankruptcy Court, in form
and substance satisfactory to the Agents (i) with each Loan Party thereto
acknowledging the validity and enforceability of obligations under the
Prepetition Credit Agreement and the other Prepetition Loan Documents and the
priority and liens therefor against all such Loan Parties under the Prepetition
Credit Agreement and the other Prepetition Loan Documents (subject to a limited
reservation of rights for any official creditors' committee appointed in the
Cases) and (ii) granting and approving adequate protection of the interests of
the Prepetition Lenders on account of the priming of the Prepetition Lenders'
Liens by the Liens of the Lenders under this Agreement and the use of the
Prepetition Lenders cash collateral as provided in Section 2A hereof, which
orders shall be in full force and effect and shall not have been stayed,
reversed, vacated or rescinded.
E. FEES. The Borrower shall have paid (i) to the Prepetition Agents and
the Prepetition Lenders all costs, fees and expenses owing to the Prepetition
Agents and the Prepetition Lenders on the Petition Date and (ii) to the Agents
and the Lenders all costs, fees and expenses owing to the Agents and the Lenders
and payable on the Closing Date, including, without limitation, professional
fees and other fees listed in Subsection 2.3.
F. BUDGET. The Agents shall have received, with a copy to each Lender,
a copy of the initial Budget and other cash flow and financial projections which
the Agents may request, all in form and substance satisfactory to the Agents and
the Requisite Lenders.
G. DUE DILIGENCE. The Agents and the Lenders shall have received such
information (financial and otherwise) as may be reasonably requested by the
Agents
64
or the Lenders and the Agents shall have completed, and shall be satisfied with
the results of, all due diligence deemed necessary by them.
H. CASH MANAGEMENT SYSTEM. The Loan Parties shall have continued and
maintained a cash management system acceptable to the Agents.
I. OPINIONS OF COUNSEL. The Agents shall have received from (i) ▇▇▇▇,
Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the Borrower, an opinion
addressed to the Agents and each of the Lenders and dated the Closing Date
covering the matters set forth in EXHIBIT VI and such other matters incident to
the transaction contemplated herein as the Agents may reasonably request, (ii)
the general counsel of the Borrower, an opinion addressed to the Agents and each
of the Lenders and dated the Closing Date, covering the matters set forth in
EXHIBIT VII and such other matters incident to the transaction contemplated
herein as the Agents may reasonably request and (iii) such other legal opinions
as the Administrative Agent may request.
J. FIRST DAY ORDERS. All orders submitted to the Bankruptcy Court on or
about the Petition Date shall be in form and substance satisfactory to the
Agents.
K. NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS. Each Loan Party
shall have obtained all Governmental Authorizations and all consents of other
Persons, in each case that are necessary or advisable in connection with the
transactions contemplated by the Loan Documents and each of the foregoing shall
be in full force and effect.
L. SECURITY INTERESTS AND LIENS. Each of Syndication Agent and
Administrative Agent shall have received evidence satisfactory to it that each
Loan Party shall have taken or caused to be taken all such actions, executed and
delivered or caused to be executed and delivered all such agreements, documents
and instruments, and made or caused to be made all such filings and recordings
that either Agent may require to have been taken or made prior to the Closing
Date, in order to effect a valid and perfected First Priority security interest
in the Collateral in favor of Administrative Agent, for the benefit of Lenders.
M. FINANCIAL STATEMENTS. On or before the Closing Date, Lenders shall
have received from Borrower (i) audited financial statements of Holdings and its
Subsidiaries for Fiscal Year 1999, consisting of a balance sheet and the related
consolidated statements of income, stockholders' equity and cash flows for such
Fiscal Year, and (ii) unaudited financial statements of Holdings and its
Subsidiaries for the Fiscal Quarter ended March 31, 2000 and for the monthly
periods ended April 30, 2000 and May 31, 2000 consisting of a balance sheet and
the related consolidated statements of income, stockholders' equity and cash
flows for such periods, all in reasonable detail and certified by the chief
financial officer of Holdings that they fairly present the financial condition
of Holdings and its Subsidiaries as at the dates
65
indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-end
adjustments.
N. EVIDENCE OF INSURANCE. Syndication Agent and Administrative Agent
shall have received a certificate from Borrower's insurance broker or other
evidence satisfactory to it that all insurance required to be maintained
pursuant to subsection 6.4 is in full force and effect and that Administrative
Agent on behalf of Lenders has been named as additional insured and/or loss
payee thereunder to the extent required under subsection 6.4.
O. [Reserved]
P. [Reserved]
Q. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. Holdings
and Borrower shall have delivered to Syndication Agent and Administrative Agent
an Officers' Certificate, in form and substance satisfactory to Syndication
Agent and Administrative Agent, to the effect that the representations and
warranties in Section 5 hereof are true and correct in all material respects on
and as of the Closing Date to the same extent as though made on and as of that
date (or, to the extent such representations and warranties specifically relate
to an earlier date, that such representations and warranties were true and
correct in all material respects on and as of such earlier date) and that each
Loan Party shall have performed in all material respects all agreements and
satisfied in all material respects all conditions which this Agreement provides
shall be performed or satisfied by it on or before the Closing Date except as
otherwise disclosed to and agreed to in writing by Syndication Agent,
Administrative Agent and Requisite Lenders.
R. PREPETITION LENDER CONSENT. Administrative Agent and Syndication
Agent shall have received a consent to the transactions contemplated hereunder
and under the other Loan Documents, in form and substance satisfactory to each
of them, executed by the Requisite Lenders (as defined in the Prepetition Credit
Agreement).
S. SHARING OF INFORMATION LETTER. Borrower shall have duly executed and
delivered to Scotiabank an agreement and acknowledgment to a letter agreement
substantially in the form of Exhibit XV hereto.
T. COMPLETION OF PROCEEDINGS. All corporate and other proceedings taken
or to be taken in connection with the Cases and the transactions contemplated
hereby and all documents incidental thereto not previously found acceptable by
Administrative Agent, acting on behalf of Lenders, or Syndication Agent and its
counsel shall be satisfactory in form and substance to Administrative Agent and
Syndication Agent and such counsel, and Administrative Agent, Syndication Agent
and such counsel shall have received all such counterpart originals or certified
copies
66
of such documents as Administrative Agent or Syndication Agent may reasonably
request.
Notwithstanding anything herein to the contrary, it is understood and
agreed that documents, certificates and other items set forth on Schedule 6.10
annexed hereto shall be delivered after the Closing Date in accordance with
subsection 6.10.
Each Lender by delivering its signature page to this Agreement and
funding its initial Revolving Loan on the Closing Date shall be deemed to have
acknowledged receipt of, and consented to and approved (as long as substantially
in the form delivered to Lenders including any changed pages thereto delivered
to Lenders), each Loan Document and each other document required to be approved
by Requisite Lenders or Lenders, as applicable.
4.2 CONDITIONS TO ALL LOANS.
------------------------
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. Administrative Agent shall have received before that Funding Date,
in accordance with the provisions of subsection 2.1B, an originally executed
Notice of Borrowing, in each case signed by the chief executive officer, the
president, the chief financial officer or the treasurer of Borrower or by any
executive officer of Borrower designated by any of the above-described officers
on behalf of Borrower in a writing delivered to Administrative Agent.
B-1. The Administrative Agent shall have received a certificate, dated
such Funding Date, and executed by the executive officer, the president, the
chief financial officer or the treasurer of the Borrower and of each Guarantor
certifying that (i) the proposed extension of credit and its intended use are
consistent with the terms of this Agreement and the Budget and is necessary,
after utilization and application of the Loan Parties' available cash, in order
to satisfy the Loan Parties' obligations in the ordinary course of business or
approved by the Bankruptcy Court and is otherwise permitted under this
Agreement; and (ii) such officer(s) have no knowledge of any Event of Default or
Potential Event of Default.
B-2. Each delivery of a Notice of Borrowing and the acceptance by
Borrower of the proceeds of such Loans shall constitute a representation and
warranty by Borrower that on such Funding Date (both immediately before and
immediately after such Loans are made and the proceeds thereof are applied) the
statements made in subsection 4.2C are true and correct in all material
respects.
C. AS OF THAT FUNDING DATE:
(i) The representations and warranties contained herein and in
the other Loan Documents shall be true and correct in all material respects on
and as of
67
that Funding Date to the same extent as though made on and as of that date,
except to the extent such representations and warranties specifically relate to
an earlier date, in which case such representations and warranties shall have
been true and correct in all material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute an Event of Default or a Potential Event of
Default;
(iii) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator or
govern mental authority shall purport to enjoin or restrain any Lender from
making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding Date
shall not violate any law including Regulation T, Regulation U or Regulation X
of the Board of Governors of the Federal Reserve System; and
(vi) The Interim Order shall be in full force and effect or,
if the date of the requested extension of credit is more than 45 days after the
Closing Date, or if the amount of such requested Loan or Letter of Credit,
together with the outstanding principal amount of all Loans and the Letter of
Credit Usage at such time, shall exceed the maximum amount authorized pursuant
to the Interim Order, the Final Order of the Bankruptcy Court granting final
approval of the Agreement (and permitting such Loan or Letter of Credit) shall
have been entered in form and substance satisfactory to the Agents, and shall be
in full force and effect and shall not have been stayed, reversed, vacated or
otherwise modified;
(vii) The Borrower shall have paid to the Agents and each
Lender all fees, costs and expenses and other amounts (including, without
limitation, legal fees and expenses) payable to the Agent and such Bank to the
extent then due;
(viii) Unless otherwise consented to by the Administrative
Agent, there shall have been no change to the Loan Parties' cash management
system;
(ix) The Administrative Agent and each of the Lenders shall
have received and the Requisite Lenders shall be satisfied with the Loan
Parties' business plan and supporting projections and the Administrative Agent
and the Requisite Lenders shall be satisfied, in their respective good faith
judgments, with the Loan Parties' general bankruptcy strategy; and
68
(x) There shall not be pending or, to the knowledge of
Borrower, threatened, any action, suit, proceeding, governmental investigation
or arbitration against or affecting Holdings or any Loan Party or any of their
properties that has not been disclosed by Borrower in writing pursuant to
subsection 5.6 or 6.1(viii) prior to the making of the last preceding Loans (or,
in the case of the initial Loans, prior to the execution of this Agreement), and
there shall have occurred no development not so disclosed in any such action,
suit, proceeding, governmental investigation or arbitration so disclosed, that,
in either event, in the opinion of Administrative Agent or of Requisite Lenders,
could reasonably be expected to have a Material Adverse Effect; and no
injunction or other restraining order shall have been issued and no hearing to
cause an injunction or other restraining order to be issued shall be pending or
noticed with respect to any action, suit or proceeding seeking to enjoin or
otherwise prevent the consummation of, or to recover any damages or obtain
relief as a result of, the transactions contemplated by this Agreement or the
making of Loans or the Issuance of Letters of Credit hereunder.
4.3 CONDITIONS TO LETTERS OF CREDIT.
--------------------------------
The issuance of any Letter of Credit hereunder (whether or not Issuing
Lender is obligated to issue such Letter of Credit) is subject to the following
conditions precedent:
A. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Revolving Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Notice of Issuance of Letter of
Credit, in each case signed by the chief executive officer, the president, the
chief financial officer or the treasurer of Borrower or by any executive officer
of Borrower designated by any of the above-described officers on behalf of
Borrower in a writing delivered to Administrative Agent, together with all other
information specified in subsection 3.1B(i) and such other documents or
information as Issuing Lender may reasonably require in connection with the
issuance of such Letter of Credit. Each delivery of a Notice of Issuance of
Letter of Credit and the acceptance by Borrower of the issuance of any Letter of
Credit shall constitute a representation and warranty by Borrower that on the
date of the issuance of such Letter of Credit (both immediately before and
immediately after such Letter of Credit is issued and delivered to the
beneficiary thereof) the statements made in subsection 4.2C are true and correct
in all material respects.
C. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsections 4.2C shall be satisfied to the same extent as
if the issuance of such Letter of Credit were the making of a Loan and the date
of issuance
69
of such Letter of Credit were a Funding Date.
SECTION 5.
REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Loans, to induce Issuing Lender to issue Letters of Credit and to induce other
Lenders to purchase participations therein, Borrower and each Guarantor each
represent and warrant to each Lender, on the date of this Agreement, on each
Funding Date and on the date of issuance of each Letter of Credit, that the
following statements are true, correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
----------------------------------------------------------------
SUBSIDIARIES.
-------------
A. ORGANIZATION AND POWERS. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation as specified in SCHEDULE 5.1 annexed hereto,
except where failure to be in good standing has not had and could not reasonably
be expected to have a Material Adverse Effect. Each Loan Party has all requisite
corporate power and authority to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to enter into the
Loan Documents to which it is a party and to carry out the transactions
contemplated thereby.
B. QUALIFICATION AND GOOD STANDING. Each Loan Party is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and could not reasonably be expected to have a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Loan Parties are engaged only in the businesses
permitted to be engaged in pursuant to subsection 7.12.
D. SUBSIDIARIES. All of the Subsidiaries of Holdings as of the Closing
Date are identified in SCHEDULE 5.1 annexed hereto, as said SCHEDULE 5.1 may be
supplemented from time to time pursuant to the provisions of subsection
6.1(xiv). The capital stock of each of the Subsidiaries of Holdings identified
in SCHEDULE 5.1 annexed hereto (as so supplemented) is duly authorized, validly
issued, fully paid and nonassessable and none of such capital stock constitutes
Margin Stock. SCHEDULE 5.1 annexed hereto (as so supplemented) correctly sets
forth the ownership interest of Borrower and each of its Subsidiaries in each of
the Subsidiaries of Borrower identified therein.
5.2 AUTHORIZATION OF BORROWING, ETC.
--------------------------------
70
A. AUTHORIZATION OF BORROWING. The execution, delivery and performance
of the Loan Documents have been duly authorized by all necessary corporate
action on the part of each Loan Party that is a party thereto.
B. NO CONFLICT. The execution, delivery and performance by the Loan
Parties of the Loan Documents to which they are parties and the consummation of
the transactions contemplated by the Loan Documents do not and will not (i)
violate any provision of (a) any law or any governmental rule or regulation
applicable to any Loan Party or any of its Subsidiaries except for such
violations which could not reasonably be expected to have a Material Adverse
Effect, (b) the Certificate or Articles of Incorporation or Bylaws of any Loan
Party or any of its Subsidiaries or (c) any order, judgment or decree of any
court or other agency of government binding on any Loan Party or any of its
Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
any Loan Party or any of its Subsidiaries which could reasonably be expected to
have a Material Adverse Effect, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of any Loan Party or
any of its Subsidiaries (other than Liens created under any of the Loan
Documents in favor of Administrative Agent on behalf of Lenders), or (iv)
require any approval of stockholders or any approval or consent of any Person
under any Contractual Obligation of any Loan Party or any of its Subsidiaries,
except for such approvals or consents which will be obtained on or before the
Closing Date and disclosed in writing to Lenders or which could not reasonably
be expected to have a Material Adverse Effect.
C. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Loan Parties of the Loan Documents to which they are parties and the
consummation of the transactions contemplated by the Loan Documents do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any federal, state or other governmental authority
or regulatory body except for the entry by the Bankruptcy Court of the Interim
Order (and the Final Order when applicable).
D. BINDING OBLIGATION. Each of the Loan Documents has been duly
executed and delivered by each Loan Party that is a party thereto and is the
legally valid and binding obligation of such Loan Party, enforceable against
such Loan Party in accordance with its respective terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium,
other similar laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in equity or at
law).
E. INTERIM AND FINAL ORDERS. As of the date of the making by the
Lenders of the initial Loan hereunder, the Interim Order has been entered and
has not been stayed, amended, vacated, reversed, rescinded or otherwise modified
in any respect without the consent of the Lenders. As of the date of the making
of any
71
subsequent Loan and the issuance of each Letter of Credit hereunder, the Interim
Order and/or the Final Order, as the case may be, have been entered and have not
been stayed, amended, reversed, vacated, rescinded or otherwise modified (except
in accordance with the terms hereof) in any respect.
5.3 FINANCIAL CONDITION.
--------------------
Borrower has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheet of Holdings and its Subsidiaries as at December 31, 1999 and the
related consolidated statements of income, stockholders' equity and cash flows
of Holdings and its Subsidiaries for the Fiscal Year then ended and (ii) the
unaudited consolidated balance sheet of Holdings and its Subsidiaries as at
March 31, 2000 and the related unaudited consolidated statements of income,
stockholders' equity and cash flows of Holdings and its Subsidiaries for the
three months then ended. All such statements were prepared in conformity with
GAAP and fairly present, in all material respects, the financial position (on a
consolidated basis) of the entities described in such financial statements as at
the respective dates thereof and the results of operations and cash flows (on a
consolidated basis) of the entities described therein for each of the periods
then ended, subject, in the case of any such unaudited financial statements, to
changes resulting from audit and normal year-end adjustments. Except as was
permitted under the Prepetition Credit Agreement on the Petition Date, as of the
Closing Date, Borrower does not (and will not following the funding of the
initial Revolving Loans) have any Contingent Obligation, contingent liability or
liability for taxes, long-term lease or unusual forward or long-term commitment
that is not reflected in the foregoing financial statements or the notes thereto
and which in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Borrower
or any of its Subsidiaries.
5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
----------------------------------------------------------
Since December 31, 1999, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect. Since December 31, 1999, neither Holdings nor any of its Subsidiaries
has directly or indirectly declared, ordered, paid or made, or set apart any sum
or property for, any Restricted Junior Payment or agreed to do so.
5.5 TITLE TO PROPERTIES; LIENS.
---------------------------
Loan Parties have (i) good, sufficient and legal title to (in the case
of fee interests in real property), (ii) valid leasehold interests in (in the
case of leasehold interests in real or personal property), or (iii) good title
to (in the case of all other personal property), all of their respective
properties and assets reflected in the financial statements referred to in
subsection 5.3 or in the most recent financial
72
statements delivered pursuant to subsection 6.1, in each case except for
Permitted Encumbrances and assets disposed of since the date of such financial
statements as permitted under subsection 7.7. Except as permitted by this
Agreement, all such properties and assets are free and clear of Liens.
5.6 LITIGATION; ADVERSE FACTS.
--------------------------
Except as set forth in SCHEDULE 5.6 annexed hereto, there are no
actions, suits, proceedings, arbitrations or governmental investigations
(whether or not purportedly on behalf of any Loan Party or any of its
Subsidiaries) at law or in equity, or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (including any Environmental Claims) that
are pending or, to the knowledge of any Loan Party, threatened against or
affecting any Loan Party or any of its Subsidiaries or any property of any Loan
Party or any of its Subsidiaries and that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect. No Loan
Party nor any of its Subsidiaries (i) is in violation of any applicable laws
(including Environmental Laws) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect, or (ii) is
subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
-----------------
Except to the extent permitted by subsection 6.3, all income tax
returns and reports of Holdings and its Subsidiaries required to be filed by any
of them have been timely filed, and all taxes shown on such tax returns to be
due and payable and all assessments, fees and other governmental charges upon
Holdings and its Subsidiaries and upon their respective properties, assets,
income, businesses and franchises which are due and payable have been paid when
due and payable. No Loan Party knows of any proposed tax assessment against any
Loan Party or any of its Subsidiaries which is not being actively contested by
such Loan Party or such Subsidiary in good faith and by appropriate proceedings;
provided that such reserves or other appropriate provisions, if any, as shall be
required in conformity with GAAP shall have been made or provided therefor.
5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS; MATERIAL
------------------------------------------------------------------
CONTRACTS.
----------
A. No Loan Party nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
73
conditions contained in any of its Contractual Obligations not constituting
prepetition obligations, and no condition exists that, with the giving of notice
or the lapse of time or both, would constitute such a default, except where the
consequences, direct or indirect, of such default or defaults, if any, could not
reasonably be expected to have a Material Adverse Effect.
B. No Loan Party nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
5.9 GOVERNMENTAL REGULATION.
------------------------
No Loan Party nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation (other than the Bankruptcy Code, usury
laws, Regulation X and other similar laws) which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
5.10 SECURITIES ACTIVITIES.
----------------------
A. No Loan Party nor any of its Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.
B. No Loan Party owns, legally or beneficially, any Margin Stock.
5.11 EMPLOYEE BENEFIT PLANS.
-----------------------
A. Each Loan Party and each of their respective ERISA Affiliates are in
material compliance with all applicable provisions and requirements of ERISA and
the regulations and published interpretations thereunder with respect to each
Employee Benefit Plan, and have performed all obligations under each Employee
Benefit Plan which could reasonably be expected to result in a material
liability. Each Employee Benefit Plan which is intended to qualify under Section
401(a) of the Internal Revenue Code is so qualified.
B. No ERISA Event has occurred or is reasonably expected to occur.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code or except as set forth in SCHEDULE 5.11 annexed hereto, no Employee
Benefit Plan provides health or welfare benefits (through the purchase of
insurance
74
or otherwise) for any retired or former employee of any Loan Party or any of
their respective ERISA Affiliates.
D. As of the most recent valuation date for any Pension Plan, the
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), does not exceed $1,000,000.
E. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of Loan Parties
and their respective ERISA Affiliates for a complete withdrawal from such
Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA, does not exceed $1,000,000.
5.12 CERTAIN FEES.
-------------
No broker's or finder's fee or commission will be payable by Holdings
or any of its Subsidiaries with respect to this Agreement or any of the
transactions contemplated hereby, and Holdings and Borrower hereby, jointly and
severally, indemnify Lenders against, and agrees that it will hold Lenders
harmless from, any claim, demand or liability for any such broker's or finder's
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.
5.13 ENVIRONMENTAL PROTECTION.
-------------------------
Except as set forth in SCHEDULE 5.13 annexed hereto,
(i) No Loan Party nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written
order, consent decree or settlement agreement with any Person relating to (a)
any Environmental Law, (b) any Environmental Claim, or (c) any Hazardous
Materials Activity;
(ii) No Loan Party nor any of its Subsidiaries has received
any letter or request for information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. ss. 9604) or
any comparable state law;
(iii) There are and, to Holdings' and Borrower's knowledge
have been, no conditions, occurrences, or Hazardous Materials Activities which
could reasonably be expected to form the basis of an Environmental Claim against
any
75
Loan Party or any of its Subsidiaries that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect;
(iv) Except as could not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect, (a) no Loan Party nor any
of its Subsidiaries nor, to Holdings' or Borrower's knowledge, any predecessor
of any Loan Party or any of its Subsidiaries has filed any notice under any
Environmental Law indicating past or present treatment of Hazardous Materials at
any Facility, and (b) no Loan Party's or any of its Subsidiaries' operations
involve the transportation, treatment, storage or disposal of hazardous waste,
as defined under 40 C.F.R. Parts 260-270 or any state equivalent; and
(v) Compliance with all current or, to the best knowledge of
each Loan Party and its Subsidiaries, future requirements pursuant to or under
Environmental Laws could not, individually or in the aggregate, reasonably be
expected to give rise to a Material Adverse Effect.
Notwithstanding anything in this subsection 5.13 to the contrary, no
event or condition has occurred or is occurring with respect to any Loan Party
relating to any Environmental Law, any Release of Hazardous Materials, or any
Hazardous Materials Activity, including any matter disclosed on SCHEDULE 5.13
annexed hereto, which individually or in the aggregate has had or could
reasonably be expected to have a Material Adverse Effect.
5.14 EMPLOYEE MATTERS.
-----------------
Except as set forth on SCHEDULE 5.14 annexed hereto, no Loan Party nor
any of its Subsidiaries is party to any collective bargaining agreement and, to
the knowledge of Holdings and Borrower, no union representation question exists
with respect to the employees of any Loan Party or any of its Subsidiaries.
There is no strike, work stoppage, slow down, lockout or other labor dispute
pending, or to the knowledge of Holdings and Borrower, threatened, involving any
Loan Party or any of its Subsidiaries that singly or in the aggregate could
reasonably be expected to have a Material Adverse Effect.
5.15 [Reserved]
5.16 MATTERS RELATING TO COLLATERAL.
-------------------------------
A. CREATION, PERFECTION AND PRIORITY OF LIENS. The execution and
delivery of the Collateral Documents by Loan Parties, together with the entry by
the Bankruptcy Court of the Interim Order (and the Final Order when applicable)
are effective to create in favor of Administrative Agent for the benefit of
Lenders, as security for the respective Secured Obligations (as defined in the
applicable
76
Collateral Document in respect of any Collateral), a valid and perfected First
Priority Lien on all of the Collateral, and no filings or other actions are
necessary or desirable to perfect and maintain the perfection and First Priority
status of such Liens.
B. GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan Party
of the Liens purported to be created in favor of Administrative Agent pursuant
to any of the Collateral Documents (other than the entry by the Bankruptcy Court
of the Interim Order (and the Final Order when applicable)) or (ii) the exercise
by Administrative Agent of any rights or remedies in respect of any Collateral
(whether specifically granted or created pursuant to any of the Collateral
Documents or created or provided for by applicable law), except for such action,
if any, of the Bankruptcy Court required under the Orders and except as may be
required in connection with the disposition of any Pledged Collateral by laws
generally affecting the offering and sale of securities.
C. ABSENCE OF THIRD-PARTY FILINGS. Except as may be filed in favor of
Administrative Agent in connection with the Loan Documents and in respect of
Liens permitted under subsection 7.2 hereof, no effective UCC financing
statement, fixture filing or other instrument similar in effect covering all or
any part of the Collateral is on file in any filing or recording office.
D. MARGIN REGULATIONS. The pledge of the Pledged Collateral pursuant to
the Collateral Documents does not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
E. INFORMATION REGARDING COLLATERAL. All information supplied to
Administrative Agent by or on behalf of any Loan Party with respect to any of
the Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
5.17 [Reserved]
5.18 DISCLOSURE.
-----------
No representation or warranty of any Loan Party contained in any Loan
Document or in any other document, certificate or written statement furnished to
Lenders by any Loan Party for use in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made. Any projections and pro forma financial information
contained in such materials are based upon good faith estimates and assumptions
believed by Holdings and Borrower to be reasonable at the time made, it being
recognized by Lenders that such projections as to future events are not to be
viewed as facts and that actual results
77
during the period or periods covered by any such projections will differ from
the projected results. There are no facts known (or which should upon the
reasonable exercise of diligence be known) to any Loan Party (other than matters
of a general economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have not
been disclosed herein or in such other documents, certificates and statements
furnished to Lenders for use in connection with the transactions contemplated
hereby.
SECTION 6.
AFFIRMATIVE COVENANTS
Each Loan Party covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, each Loan Party shall perform, and shall cause each of its Subsidiaries
to perform, all covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
---------------------------------------
Holdings will maintain, and cause each of its Subsidiaries to maintain,
a system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Borrower will deliver to Administrative Agent and Lenders:
(i) QUARTERLY FINANCIALS: as soon as available and in any
event within 45 days after the end of each Fiscal Quarter, (a) the consolidated
balance sheet of Holdings and its Subsidiaries as at the end of such Fiscal
Quarter and the related consolidated statements of income, stockholders' equity
and cash flows of Holdings and its Subsidiaries for such Fiscal Quarter and for
the period from the beginning of the then current Fiscal Year to the end of such
Fiscal Quarter and setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal Year
and the corresponding figures from the Budget for the current Fiscal Year, all
in reasonable detail and certified by the chief financial officer of Holdings
that they fairly present, in all material respects, the financial condition of
Holdings and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments, and (b) a narrative report
describing the operations of Holdings and its Subsidiaries in the form prepared
for presentation to senior management for such Fiscal Quarter and for the period
from the beginning of the then current Fiscal Year to the end of such Fiscal
Quarter; provided that delivery of Borrower's Form 10-Q for such Fiscal Quarter
(if any) shall be deemed to satisfy the requirements of this clause (b);
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(ii) YEAR-END FINANCIALS: as soon as available and in any
event within 90 days after the end of each Fiscal Year, (a) the consolidated
balance sheet of Holdings and its Subsidiaries as at the end of such Fiscal Year
and the related consolidated statements of income, stockholders' equity and cash
flows of Holdings and its Subsidiaries for such Fiscal Year, setting forth in
each case in comparative form the corresponding figures for the previous Fiscal
Year and the corresponding figures from the Budget for the Fiscal Year covered
by such financial statements, all in reasonable detail and certified by the
chief financial officer of Holdings that they fairly present, in all material
respects, the financial condition of Holdings and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows for the
periods indicated, (b) a narrative report describing the operations of Holdings
and its Subsidiaries in the form prepared for presentation to senior management
for such Fiscal Year; provided that delivery of Borrower's Form 10-K (if any)
for such Fiscal Year shall be deemed to satisfy the requirements of this clause
(b), and (c) in the case of such consolidated financial statements, a report
thereon of KPMG Peat Marwick LLP or other independent certified public
accountants of recognized national standing selected by Holdings and
satisfactory to Administrative Agent, which report shall be unqualified (other
than qualifications relating to the Cases and going concern qualifications), and
shall state that such consolidated financial statements fairly present, in all
material respects, the consolidated financial position of Holdings and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in connection
with such consolidated financial statements has been made in accordance with
generally accepted auditing standards;
(iii) OFFICERS' AND COMPLIANCE CERTIFICATES: together with
each delivery of financial statements of Holdings and its Subsidiaries pursuant
to subdivisions (i) and (ii) above and subdivision (xviii), below, (a) an
Officers' Certificate of Holdings stating that the signers have reviewed the
terms of this Agreement and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and condition of
Holdings and its Subsidiaries during the accounting period covered by such
financial statements and that such review has not disclosed the existence during
or at the end of such accounting period, and that the signers do not have
knowledge of the existence as at the date of such Officers' Certificate, of any
condition or event that constitutes an Event of Default or Potential Event of
Default, or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action Holdings has taken, is
taking and proposes to take with respect thereto; and (b) a Compliance
Certificate demonstrating in reasonable detail compliance during and at the end
of the applicable accounting periods with the restrictions contained in Section
7, in each case to the extent compliance with such restrictions is required to
79
be tested at the end of the applicable accounting period;
(iv) RECONCILIATION STATEMENTS: if, as a result of any change
in accounting principles and policies from those used in the preparation of the
audited financial statements referred to in subsection 5.3, the consolidated
financial statements of Holdings and its Subsidiaries delivered pursuant to
subdivisions (i), (ii) or (xi) of this subsection 6.1 will differ in any
material respect from the consolidated financial statements that would have been
delivered pursuant to such subdivisions had no such change in accounting
principles and policies been made, then (a) together with the first delivery of
financial statements pursuant to subdivision (i), (ii) or (xi) of this
subsection 6.1 following such change to the extent Borrower is required to
prepare such pro forma financial statements under the Securities Act or the
Exchange Act or the rules and regulations thereunder, consolidated financial
statements of Holdings and its Subsidiaries for (1) the current Fiscal Year to
the effective date of such change and (2) the two full Fiscal Years immediately
preceding the Fiscal Year in which such change is made, in each case prepared on
a pro forma basis as if such change had been in effect during such periods, and
(b) together with each delivery of financial statements pursuant to subdivision
(i), (ii) or (xi) of this subsection 6.1 following such change, a written
statement of the chief accounting officer or chief financial officer of Holdings
setting forth the material differences (including any differences that would
affect any calculations relating to the financial covenants set forth in
subsection 7.6) which would have resulted if such financial statements had been
prepared without giving effect to such change;
(v) ACCOUNTANTS' CERTIFICATION: concurrently with any delivery
of financial statements under subdivision (ii) above, a certificate of the
accounting firm opining on or certifying such statements on behalf of Borrower
(which certificate may be limited to accounting matters and may disclaim
responsibility for legal interpretations) certifying that no Event of Default
or Potential Event of Default has occurred or, if such an Event of Default or
Potential Event of Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with respect
thereto;
(vi) SEC FILINGS AND PRESS RELEASES: promptly upon their
becoming available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Holdings to its security
holders or by any Subsidiary of Holdings to its security holders other than
Holdings or another Subsidiary of Holdings, (b) all regular and periodic reports
and all registration statements (other than on Form S-8 or a similar form) and
prospectuses, if any, filed by Holdings or any of its Subsidiaries with any
securities exchange or with the Securities and Exchange Commission, and (c) all
press releases and other statements made available generally by Holdings or any
of its Subsidiaries to the public concerning material developments in the
business of Holdings or any of its
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Subsidiaries;
(vii) EVENTS OF DEFAULT, ETC.: promptly upon any officer of
any Loan Party obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or becoming aware
that any Lender has given any notice (other than to Administrative Agent) or
taken any other action with respect to a claimed Event of Default or Potential
Event of Default, (b) that any Person has given any notice to any Loan Party or
taken any other action with respect to a claimed default or event or condition
of the type referred to in subsection 8.2, (c) at any time when neither Holdings
nor Borrower is required to file such reports, of any condition or event that
would be required to be disclosed in a current report filed by Holdings or
Borrower with the Securities and Exchange Commission on Form 8-K (Items 1, 2, 4,
5 and 6 of such Form as in effect on the date hereof) if Holdings or Borrower
were required to file such reports under the Exchange Act, or (d) of the
occurrence of any event or change that has caused or evidences, either in any
case or in the aggregate, a Material Adverse Effect, an Officers' Certificate
specifying the nature and period of existence of such condition, event or
change, or specifying the notice given or action taken by any such Person and
the nature of such claimed Event of Default, Potential Event of Default,
default, event or condition, and what action Holdings has taken, is taking and
proposes to take with respect thereto;
(viii) LITIGATION OR OTHER PROCEEDINGS: promptly upon any
officer of Holdings or Borrower obtaining knowledge of (a) the institution of,
or non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Holdings or any of its Subsidiaries or any
property of Holdings or any of its Subsidiaries (collectively, "PROCEEDINGS")
not previously disclosed in writing by Holdings to Lenders or (b) any material
development in any Proceeding that, in any case:
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated hereby;
written notice thereof together with such other information as may be reasonably
available to Holdings to enable Lenders and their counsel to evaluate such
matters;
(ix) ERISA EVENTS: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written notice
specifying the nature thereof, what action Holdings, any of its Subsidiaries or
any of their respective ERISA Affiliates has taken, is taking or proposes to
take with
81
respect thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto;
(x) ERISA NOTICES: with reasonable promptness, copies of (a)
if requested by Administrative Agent each Schedule B (Actuarial Information) to
the annual report (Form 5500 Series) filed by Holdings, any of its Subsidiaries
or any of their respective ERISA Affiliates with the Internal Revenue Service
with respect to each Pension Plan; (b) all notices received by Holdings, any of
its Subsidiaries or any of their respective ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event; and (c) copies of such
other documents or governmental reports or filings relating to any Employee
Benefit Plan as Administrative Agent shall reasonably request;
(xi) 2001 BUDGET: as soon as practicable and in any event no
later than November 30, 2000, cash flow projections, substantially in the form
of EXHIBIT III hereto, showing on a line-item basis monthly anticipated cash
receipts and expenditures, monthly projected balance sheets and monthly
projected income statements for the period from January 1, 2001 through March
31, 2001, all of which shall be in form and substance satisfactory to the
Administrative Agent;
(xii) INSURANCE: as soon as practicable and in any event by
the last day of each Fiscal Year, a report in form and substance satisfactory to
Administrative Agent outlining all material insurance coverage maintained as of
the date of such report by Holdings and its Subsidiaries and all material
insurance coverage planned to be maintained by Holdings and its Subsidiaries in
the immediately succeeding Fiscal Year;
(xiii) BOARD OF DIRECTORS: with reasonable promptness, written
notice of any change in the Board of Directors of Holdings or Borrower;
(xiv) NEW SUBSIDIARIES: promptly upon any Person becoming a
Subsidiary of Holdings, a written notice setting forth with respect to such
Person (a) the date on which such Person became a Subsidiary of Holdings and (b)
all of the data required to be set forth in SCHEDULE 5.1 annexed hereto with
respect to all Subsidiaries of Holdings (it being understood that such written
notice shall be deemed to supplement SCHEDULE 5.1 annexed hereto for all
purposes of this Agreement);
(xv) MATERIAL CONTRACTS: promptly, and in any event within ten
Business Days after any Material Contract of Holdings or any of its Subsidiaries
(other than the Administrative Agreement) is terminated or any Material Contract
is amended in a manner that is materially adverse to Holdings or such
Subsidiary, as the case may be, or any new Material Contract is entered into, a
written statement describing such event with copies of such material amendments
or new contracts, and an explanation of any actions being taken with respect
thereto;
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(xvi) [Reserved]
(xvii) [Reserved]
(xviii) MONTHLY REPORTS AND OTHER INFORMATION (i) As soon as
available, and in any event within twenty five (25) days after the end of each
month the monthly report prepared for the board of directors which shall
include, to the extent and with the format and content provided to the board of
directors, the consolidated balance sheet of Holdings and its Subsidiaries as at
the end of such month and the related consolidated statements of income,
stockholders' equity and cash flows of Holdings and its Subsidiaries for such
month and for the period from the beginning of the then current Fiscal Year to
the end of such month, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal Year
and the corresponding figures from the Budget for the current Fiscal Year, to
the extent prepared on a monthly basis, all in reasonable detail, together with
a Financial Officer Certification with respect thereto, (ii) weekly report at
the beginning of each week which shall include the consolidated cash balance of
Holdings and its Subsidiaries as of the end of the immediately preceding week
and (iii) with reasonable promptness, such other information and data with
respect to Holdings or any of its Subsidiaries as from time to time may be
reasonably requested by any Lender;
(xix) MONTHLY CASH FLOW BUDGET AND VARIANCE REPORTS. Not later
than the twenty-fifth day of each calendar month, the Borrower shall deliver to
each Agent and each Lender, (i) cash flow forecasts, in form and substance
satisfactory to the Administrative Agent and the Requisite Lenders, reflecting
on a line-item basis anticipated monthly cash receipts and expenditures for the
succeeding month, and (ii) a copy of a variance report, in form and substance
satisfactory to the Administrative Agent and the Requisite Lenders, reflecting
on a line-item basis the actual cash receipts and disbursements for the
preceding month and the variance of such actual results from those reflected in
the Budget for the preceding month.
(xx) BANKRUPTCY INFORMATION. Promptly after the same is
available, the Loan Parties shall furnish to counsel for the Agents all
pleadings, motions, applications, judicial information, financial information
and other documents filed by or on behalf of any Loan Party with the Bankruptcy
Court or the United States Trustee in the Cases, or distributed by or on behalf
of any Loan Party to any official committee appointed in the Cases.
(xxi) BANKRUPTCY SCHEDULES. Each Loan Party shall file their
respective bankruptcy schedules and statements of financial affairs no later
than the date set forth in the Federal Rules of Bankruptcy Procedure or in any
order entered by the Bankruptcy Court on the Petition Date with respect to an
extension of time to file such schedules and statements (and shall not, without
the consent of the
83
Administrative Agent, seek a further extension of time to file such schedules
and statements) and shall promptly deliver a copy thereof to the Agents and
their counsel.
6.2 CORPORATE EXISTENCE, ETC.
-------------------------
Holdings will, and will cause each of its Subsidiaries to, at all times
preserve and keep in full force and effect (i) its corporate existence (other
than the corporate existence of Subsidiary Guarantors merged into other
Subsidiary Guarantors or the Borrower as permitted under subsection 7.7(i)) and
(ii) all rights and franchises the loss of which could reasonably be expected to
have a Material Adverse Effect.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
-----------------------------------------------
A. Holdings will, and will cause each of its Subsidiaries to, pay all
taxes, assessments and other governmental charges (not constituting prepetition
claims) imposed upon it or any of its properties or assets or in respect of any
of its income, businesses or franchises before any penalty accrues thereon, and
all claims (including claims for labor, services, materials and supplies) for
sums that have become due and payable and that by law have or may become a Lien
upon any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided that no such charge or claim
need be paid if it is being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, so long as (i) such reserve or
other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made therefor and (ii) in the case of a charge or claim
which has or may become a Lien against any of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the
Collateral to satisfy such charge or claim.
B. Holdings will not, nor will it permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax return with any
Person (other than Holdings or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET INSURANCE/
-------------------------------------------------------------------
CONDEMNATION PROCEEDS.
----------------------
A. MAINTENANCE OF PROPERTIES. Each Loan Party will, and will cause each
of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all properties
used or useful in the business of such Loan Party and its Subsidiaries
(including all Intellectual Property) that are material to Holdings and its
Subsidiaries, taken as a whole, and from time to time will make or cause to be
made all appropriate repairs, renewals and replacements thereof.
B. INSURANCE. Borrower will maintain or cause to be maintained, with
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financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Borrower and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the generality
of the foregoing, Borrower will maintain or cause to be maintained replacement
value casualty insurance on the Collateral constituting tangible personal
property under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all times
satisfactory to Administrative Agent in its commercially reasonable judgment.
Each such policy of insurance shall (i) name Administrative Agent for the
benefit of Lenders as an additional insured thereunder as its interests may
appear and (ii) in the case of each business interruption and casualty insurance
policy, contain a loss payable clause or endorsement, satisfactory in form and
substance to Administrative Agent, that names Administrative Agent for the
benefit of Lenders as the loss payee thereunder and provides for at least 30
days prior written notice to Administrative Agent of any modification or
cancellation of such policy.
6.5 INSPECTION RIGHTS.
------------------
Each Loan Party shall, and shall cause each of its Subsidiaries to,
permit any authorized representatives designated by any Lender to visit and
inspect the headquarters of such Loan Party, to inspect its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that such Loan party may, if it so chooses, be present at or
participate in any such discussion), all upon reasonable notice and at such
reasonable times during normal business hours and as often as may reasonably be
requested.
6.6 COMPLIANCE WITH LAWS, ETC.
--------------------------
Each Loan Party shall comply, and shall cause each of its Subsidiaries
and all other Persons occupying any Facilities to comply, with the requirements
of all applicable laws, rules, regulations and orders of any governmental
authority (including all applicable current and future Environmental Laws and
all laws, rules, regulations and orders relating to prearranged funeral products
and services and the maintenance of trust accounts in respect thereof),
noncompliance with which could reasonably be expected to cause, individually or
in the aggregate, a Material Adverse Effect.
85
6.7 ENVIRONMENTAL REVIEW AND INVESTIGATION, DISCLOSURE, ETC.; BORROWER'S
ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES, ENVIRONMENTAL CLAIMS
AND VIOLATIONS OF ENVIRONMENTAL LAWS.
A. ENVIRONMENTAL REVIEW AND INVESTIGATION. Each Loan Party agrees that
Administrative Agent may, from time to time and in its reasonable discretion,
(i) retain, at Borrower's reasonable expense, an independent professional
consultant to review any environmental audits, investigations, analyses and
reports relating to Hazardous Materials prepared by or for any Loan Party and
provided to Administrative Agent pursuant to subsection 6.7B(i) and (ii) in the
event (a) an Event of Default occurs as a result of a breach of subsection 5.6
(to the extent relating to Environmental Laws or Environmental Claims), 5.13,
6.6 (to the extent resulting from noncompliance with Environmental Laws) or 6.7
and is continuing, or (b) the Loans and all other Obligations shall
(automatically or by declaration) have become immediately due and payable
pursuant to Section 8, conduct its own investigation of reasonable scope and at
reasonable expense; provided that, the Loan Parties shall only be obligated to
use commercially reasonable efforts to obtain permission for Administrative
Agent's professional consultant to conduct an investigation of any Facility
which is the basis of such Event of Default or such acceleration of the Loans
and Obligations that is (x) no longer owned, leased, operated or used by
Borrower or any of its Subsidiaries, or (y) currently used by a Loan Party (but
not owned, leased, or operated by any Loan Party) and with respect to which
Borrower has no right or authority to permit Administrative Agent's professional
consultant to conduct an investigation thereon. For purposes of conducting such
a review and/or investigation, each Loan Party, to the extent that it has the
power and authority to do so, hereby grants to Administrative Agent and its
agents, employees, consultants and contractors the right to enter into or onto
any Facilities currently owned, leased, operated or used by such Loan Party or
any of its Subsidiaries and to perform such tests on such property (including
taking samples of soil, groundwater and suspected asbestos-containing materials)
as are reasonably necessary in connection therewith. Any such investigation of
any Facility shall be conducted, unless otherwise agreed to by Borrower and
Administrative Agent, during normal business hours and, to the extent reasonably
practicable, shall be conducted so as not to interfere with the ongoing
operations at such Facility or to cause any damage or loss to any property at
such Facility. To the extent reasonably practicable, Administrative Agent shall
restore any property damaged by such investigation to its condition immediately
prior to such investigation. Each Loan Party and Administrative Agent hereby
acknowledge and agree that any report of any investigation conducted at the
request of Administrative Agent pursuant to this subsection 6.7A will be
obtained and shall be used by Administrative Agent and Lenders for the purposes
of Lenders' internal credit decisions, to monitor and police the Loans and to
protect Lenders' security interests, if any, created by the Loan Documents.
Administrative Agent agrees to deliver a copy of any such report to Borrower
with the understanding that each Loan Party acknowledges and agrees that (1) it
will indemnify and hold harmless Administrative Agent and each Lender from any
costs, losses or liabilities relating to Borrower's use of or reliance on such
report,
86
(2) neither Administrative Agent nor any Lender makes any representation or
warranty with respect to such report, and (3) by delivering such report to
Borrower, neither Administrative Agent nor any Lender is requiring or
recommending the implementation of any suggestions or recommendations contained
in such report.
B. ENVIRONMENTAL DISCLOSURE. Borrower will deliver to Administrative
Agent and Lenders:
(i) ENVIRONMENTAL AUDITS AND REPORTS. As soon as practicable
following receipt thereof, copies of all material and non-privileged
environmental audits, investigations, analyses and reports of any kind or
character, whether prepared by personnel of Borrower or any of its Subsidiaries
or by independent consultants, governmental authorities or any other Persons,
with respect to environmental matters at any Facility which, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect or with respect to any Environmental Claims which, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect;
(ii) NOTICE OF CERTAIN RELEASES, REMEDIAL ACTIONS, ETC. Promptly
upon the occurrence thereof, written notice describing in reasonable detail (a)
any Release required to be reported to any federal, state or local governmental
or regulatory agency under any applicable Environmental Laws that could
reasonably be expected to have a Material Adverse Effect, (b) any remedial
action taken by any Loan Party or any other Person in response to (1) any
Hazardous Materials Activities the existence of which could reasonably be
expected to result in one or more Environmental Claims having, individually or
in the aggregate, a Material Adverse Effect, or (2) any Environmental Claims
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, and (c) any Loan Party's discovery of any occurrence or
condition on any real property adjoining or in the vicinity of any Facility that
could cause such Facility or any part thereof to be subject to any material
restrictions on the ownership, occupancy, transferability or use thereof under
any Environmental Laws which, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
(iii) WRITTEN COMMUNICATIONS REGARDING ENVIRONMENTAL CLAIMS,
RELEASES, ETC. As soon as practicable following the sending or receipt thereof
by any Loan Party or any of their Subsidiaries, a copy of any and all material
and non-privileged written communications with respect to (a) any Environmental
Claims that, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect, (b) any Release required to be reported to any
federal, state or local governmental or regulatory agency that could reasonably
be expected to have a Material Adverse Effect, and (c) any request for
information from any governmental agency that suggests such agency is
investigating whether any Loan Party or any of their Subsidiaries may be
potentially responsible for any Hazardous Materials Activity that could
reasonably be expected to have a Material Adverse Effect.
87
(iv) NOTICE OF CERTAIN PROPOSED ACTIONS HAVING ENVIRONMENTAL IMPACT.
Prompt written notice describing in reasonable detail (a) any proposed
acquisition of stock, assets, or property by any Loan Party or any of their
Subsidiaries that could reasonably be expected to (1) expose any Loan Party or
any of their Subsidiaries to, or result in, Environmental Claims that could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect or (2) affect the ability of any Loan Party or any of their
Subsidiaries to maintain in full force and effect all Governmental
Authorizations required under any Environmental Laws for their respective
operations, except to the extent the failure to maintain such Governmental
Authorizations could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, and (b) any proposed action to be
taken by any Loan Party or any of their Subsidiaries to commence manufacturing
or other industrial operations or to modify current operations in a manner that
could reasonably be expected to subject any Loan Party or any of their
Subsidiaries to any additional obligations or requirements under any
Environmental Laws which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
(v) OTHER INFORMATION. With reasonable promptness, such other
material and non-privileged documents and information as from time to time may
be reasonably requested by Administrative Agent in relation to any matters
disclosed pursuant to this subsection 6.7.
C. LOAN PARTY ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES,
ENVIRONMENTAL CLAIMS AND VIOLATIONS OF ENVIRONMENTAL LAWS.
(i) REMEDIAL ACTIONS RELATING TO HAZARDOUS MATERIALS ACTIVITIES.
Subject to the limitations contained in subsection 7.8 hereof, each Loan Party
shall promptly undertake, and shall cause each of their Subsidiaries promptly to
undertake, any and all investigations, studies, sampling, testing, abatement,
cleanup, removal, remediation or other response actions necessary to remove,
remediate, clean up or ▇▇▇▇▇ any Hazardous Materials Activity on, under or about
any Facility that is in violation of any Environmental Laws or that is
reasonably likely to give rise to an Environmental Claim, in each case that
could reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect. In the event any Loan Party or any of their
Subsidiaries undertakes any such action with respect to any Hazardous Materials,
such Loan Party or Subsidiary shall conduct and complete such action in all
material respects in compliance with all applicable Environmental Laws and in
accordance with the binding policies, orders and directives of all relevant
federal, state and local governmental authorities except when, and only to the
extent that, such Loan Party's or Subsidiary's liability with respect to such
Hazardous Materials Activity is being contested in good faith by such Loan Party
or Subsidiary.
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(ii) ACTIONS WITH RESPECT TO ENVIRONMENTAL CLAIMS AND VIOLATIONS OF
ENVIRONMENTAL LAWS. Subject to the limitations contained in subsection 7.8
hereof, each Loan Party shall promptly take, and shall cause each of their
Subsidiaries promptly to take, any and all actions necessary to (i) cure any
material violation of applicable Environmental Laws by such Loan Party or
Subsidiaries where failure to do so could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and (ii) make an
appropriate response to any Environmental Claim against such Loan Party or
Subsidiary and discharge any obligations it may have to any Person thereunder
where failure to do so could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
6.8 PAYMENT OF OBLIGATIONS.
Except as provided in the Bankruptcy Code or an applicable order of the
Bankruptcy Court, each Loan Party shall pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature that constitute administrative expenses
under Section 503(b) of the Bankruptcy Code in the Cases, except, so long as no
material property or assets of the Loan Parties is in danger of being lost or
forfeited as a result thereof, no such obligation need be paid if the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of each Loan Party as the case may be.
6.9 ADDITIONAL SECURITY; FURTHER ASSURANCES.
A. Promptly upon the Administrative Agent's request therefor, each of
the Loan Parties will duly authorize, execute and deliver the following:
(i) proper Uniform Commercial Code financing statements (Form UCC-1
or the equivalent) fully executed for filing under the UCC or other appropriate
filing offices of each jurisdiction as may be necessary or, in the reasonable
opinion of the Administrative Agent, desirable to perfect the security interests
purported to be created by the Collateral Documents;
(ii) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, listing all effective financing statements that
name any Loan Party as debtor and that are filed in the jurisdictions referred
to in clause (i) above, together with copies of such other financing statements
that name any Loan Party as debtor (none of which shall cover the Collateral
except to the extent evidencing Liens permitted pursuant to subsection 7.2A;
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(iii) evidence of the completion of all other recordings and filings
of, or with respect to, the Collateral Documents as may be necessary or, in the
reasonable opinion of the Administrative Agent, desirable to perfect the
security interests intended to be created by the Collateral Documents; and
(iv) evidence that all other actions necessary or, in the reasonable
opinion of the Administrative Agent, desirable to perfect and protect the
security interests purported to be created by the Collateral Documents have been
taken.
B. Each of the Loan Parties will grant to the Administrative Agent
security interests and Liens in such assets and properties of such Loan Party as
are not covered by the Collateral Documents (other than the right to commence
and prosecute avoidance actions in connection with prepetition claims), as may
be reasonably requested from time to time by the Administrative Agent or the
Requisite Lenders (collectively, the "ADDITIONAL SECURITY DOCUMENTS"). All such
security interests and Liens shall be granted pursuant to documentation
reasonably satisfactory in form and substance to the Administrative Agent and
shall constitute valid and enforceable perfected First Priority security
interests and Liens. The Additional Security Documents or instruments related
thereto shall been duly recorded or filed in such manner and in such places as
are required by law to establish, perfect, preserve and protect the Liens in
favor of the Administrative Agent required to be granted pursuant to the
Additional Security Documents and all taxes, fees and other charges payable in
connection therewith shall have be paid in full by the Loan Parties.
C. Each Loan Party will at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to the Administrative Agent from time to time
such vouchers, invoices, schedules, confirmatory assignments, conveyances,
financing statements, transfer endorsements, powers of attorney, certificates,
surveys, reports and other assurances or instruments and take such further steps
relating to the Collateral covered by any of the Collateral Documents as the
Administrative Agent may reasonably require. Furthermore, each Loan Party will
cause to be delivered to the Administrative Agent such opinions of counsel,
title insurance and other related documents as may be reasonably requested by
the Administrative Agent to assure itself that this subsection 6.9 has been
complied with.
D. Each Loan Party agrees that each action required above by this
subsection shall be completed as soon as possible, but in no event later than 90
days after such action is either requested to be taken by the Administrative
Agent or the Requisite Lenders or required to be taken by Holdings and/or its
Subsidiaries pursuant to the terms of this subsection 6.9.
6.10 POST-CLOSING DELIVERIES.
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Borrower shall cause (i) any actions set forth on Schedule 6.10 annexed
hereto to be taken and (ii) each document, certificate or other item set forth
on Schedule 6.10 to be delivered, in each case within the time period specified
on Schedule 6.10 and in form and substance reasonably satisfactory to
Administrative Agent and Syndication Agent.
6.11 REPLACEMENT OF EXISTING CASH MANAGEMENT LETTER OF CREDIT.
Within five Business Days of the Closing Date, the Borrower will
request that the beneficiary of the Existing Cash Management Letter of Credit
(i) accept a Letter of Credit issued as a replacement for the Existing Cash
Management Letter of Credit and (ii) surrender the Existing Cash Management
Letter of Credit for termination.
SECTION 7.
NEGATIVE COVENANTS
Each Loan Party covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, each of Holdings and Borrower shall perform, and shall cause each of
its Subsidiaries to perform, all covenants in this Section 7.
7.1 INDEBTEDNESS.
No Loan Party shall, shall permit their Subsidiaries to, or shall apply
to the Bankruptcy Court for authority to, directly or indirectly, create, incur,
assume or guaranty, or otherwise become or remain directly or indirectly liable
with respect to, any Indebtedness, except:
(i) the Loan Parties may become and remain liable with respect to
the Obligations;
(ii) the Loan Parties and their Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by subsection 7.4 and,
upon any matured obligations actually arising pursuant thereto, the Indebtedness
corresponding to the Contingent Obligations so extinguished;
(iii) [Reserved]
(iv) the Loan Parties and their Subsidiaries may become and remain
liable with respect to Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business, provided that such
Indebtedness is
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extinguished within two Business Days of its incurrence;
(v) [Reserved]
(vi) the Loan Parties and their Subsidiaries may become and
remain liable with respect to Indebtedness in respect of Capital Leases and
purchase money Indebtedness, in each case which is incurred in respect of the
acquisition of equipment constituting Consolidated Capital Expenditures
permitted by subsection 7.8; provided that any such purchase money Indebtedness
or Indebtedness in respect of Capital Leases is incurred by any Loan Party or
any of their Subsidiaries prior to or within 270 days after the applicable
Consolidated Capital Expenditure;
(vii) the Loan Parties and their Subsidiaries may become and
remain liable with respect to Indebtedness under Capital Leases of automobiles
to be used by employees and directors of the Loan Parties and their Subsidiaries
entered into in the ordinary course of business;
(viii) the Loan Parties may become and remain liable with
respect to Indebtedness to any other Loan Party PROVIDED THAT (a) all such
intercompany Indebtedness shall be subordinated in right of payment to the
Obligations, (b) any payment by any Guarantor of any of the Obligations pursuant
to the Guaranty shall result in a pro tanto reduction of the amount of any
intercompany Indebtedness owed by such Guarantor to Borrower or to any of its
Subsidiaries for whose benefit such payment is made and (c) the proceeds of any
Indebtedness incurred by ▇▇▇▇ ▇. ▇▇▇▇ Company from any other Loan Party shall
only be used for working capital purposes consistent with past practices;
(ix) the Loan Parties, as applicable, may remain liable with
respect to Indebtedness incurred prior to the Petition Date which was permitted
under the terms of the Prepetition Credit Agreement or which was otherwise
approved by the Prepetition Lenders in writing prior to the Petition Date;
(x) [Reserved]
(xi) the Loan Parties may become and remain liable with
respect to other Indebtedness in an aggregate principal amount not to exceed
$500,000 at any time outstanding.
7.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. No Loan Party shall, shall permit their
Subsidiaries to, or shall apply to the Bankruptcy Court for authority to,
directly or indirectly, create, incur, assume or permit to exist any Lien on or
with respect to its property or asset of any kind (including any document or
instrument in respect of
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goods or accounts receivable), whether now owned or hereafter acquired, or any
income or profits therefrom, or file or permit the filing of, or permit to
remain in effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the Uniform
Commercial Code of any State or under any similar recording or notice statute,
except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens existing on the Petition Date that were permitted
under the terms of the Prepetition Credit Agreement or which were otherwise
approved by the Prepetition Lenders in writing prior to the Petition Date;
(iv) [Reserved]
(v) [Reserved]
(vi) purchase money security interests or Capital Leases of
equipment hereafter acquired by a Loan Party (including the interests of vendors
and lessors under conditional sale and title retention agreements), provided
that (a) such security interests secure Indebtedness permitted by subsections
7.1(vi) or (vii), (b) such security interests are created, and the Indebtedness
secured thereby is incurred, at or prior to such acquisition, (c) the
Indebtedness secured thereby does not exceed 100% of the cost of such equipment
at the time of such acquisition, and (d) such security interests do not encumber
any other property or assets of any Loan Party (other than accessions to such
equipment and provided that individual financings of equipment provided by a
single lender may be cross-collateralized to other financings of equipment
provided solely by such lender); and
(vii) the replacement, extension or renewal of any Lien
permitted by clause (vi) above, provided that such replacement, extension or
renewal Lien shall not encumber any property other than the property that was
subject to such Lien prior to such replacement, extension or renewal; and
provided, further, that the Indebtedness and other obligations secured by such
replacement, extension or renewal Lien are permitted by subsection 7.1.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If any Loan Party shall create
or assume any Lien upon any of its properties or assets, whether now owned or
hereafter acquired, other than Liens excepted by the provisions of subsection
7.2A, it shall make or cause to be made effective provision whereby the
Obligations will be secured by such Lien equally and ratably with any and all
other Indebtedness secured thereby as long as any such Indebtedness shall be so
secured; provided that, notwithstanding the foregoing, this covenant shall not
be construed as a consent by Requisite Lenders to the creation or assumption of
any such Lien not permitted by the provisions of subsection 7.2A.
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C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, no Loan Party
shall enter into any agreement prohibiting the creation or assumption of any
Lien upon any of its properties or assets, whether now owned or hereafter
acquired.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. Except as provided
herein, in the Prepetition Credit Agreement and in the Senior Subordinated Note
Indenture, no Loan Party shall, shall permit their Subsidiaries to, or shall
apply to the Bankruptcy Court for authority to, create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any such Subsidiary to (i) pay dividends or make any
other distributions on any of such Subsidiary's capital stock owned by any Loan
Party, (ii) repay or prepay any Indebtedness owed by such Subsidiary to any
Loan Party, (iii) make loans or advances to any Loan Party, or (iv) transfer any
of its property or assets to any Loan Party.
7.3 INVESTMENTS; JOINT VENTURES.
No Loan Party shall, shall permit their Subsidiaries to, or shall apply
to the Bankruptcy Court for authority to, directly or indirectly, make or own
any Investment in any Person, including any Joint Venture, except:
(i) each Loan Party may make and own Investments in Cash and Cash
Equivalents;
(ii) each Loan Party may make and own Investments in Persons that
are Loan Parties;
(iii) each Loan Party may make intercompany loans to the extent
permitted under subsection 7.1(viii);
(iv) each Loan Party may continue to own the Investments owned by
them on the Petition Date that were permitted under the terms of the Prepetition
Credit Agreement or were otherwise approved by the Prepetition Lenders in
writing prior to the Petition Date;
(v) [Reserved]
(vi) [Reserved]
(vii) Borrower and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time $100,000;
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(viii) Borrower and its Subsidiaries may make and own Investments
arising out of the receipt by Borrower or any of its Subsidiaries of non-cash
consideration for any sale of assets permitted under subsection 7.7; provided
that such consideration (if the stated amount or value thereof is in excess of
$100,000) is pledged upon receipt to Administrative Agent;
(ix) Borrower and its Subsidiaries may make loans and advances to
employees of Borrower or its Subsidiaries not to exceed $100,000 in the
aggregate at any time outstanding; and
(x) Borrower and its Subsidiaries may make and own Investments in
respect of (a) accounts receivable arising and trade credit granted in the
ordinary course of business and any securities received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to the
extent reasonably necessary in order to prevent or limit loss and (b)
prepayments and other credits to suppliers made in the ordinary course of
business consistent with the past practices of Borrower and its Subsidiaries.
7.4 CONTINGENT OBLIGATIONS.
No Loan Party shall, shall permit their Subsidiaries to, or shall apply
to the Bankruptcy Court for authority to, directly or indirectly, create or
become or remain liable with respect to any Contingent Obligation, except:
(i) the Guarantors may become and remain liable with respect to
Contingent Obligations in respect of the Guaranty;
(ii) Borrower may become and remain liable with respect to
Contingent Obligations in respect of Letters of Credit,;
(iii) [Reserved];
(iv) Borrower and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of customary indemnification and
purchase price adjustment obligations incurred in connection with Asset Sales or
other sales of assets;
(v) Borrower and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of any Indebtedness of Borrower or
any of its Subsidiaries permitted by subsection 7.1;
(vi) Borrower and its Subsidiaries, as applicable, may remain liable
with respect to Contingent Obligations existing on the Petition Date that were
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permitted under the terms of the Prepetition Credit Agreement or were otherwise
approved by the Prepetition Lenders in writing prior to the Petition Date;
(vii) Borrower and its Subsidiaries may become and remain liable
with respect to other Contingent Obligations relating to surety bonds supporting
merchandise trust obligations under the Florida Administrative Code; provided
that the maximum aggregate liability, contingent or otherwise, of Borrower and
its Subsidiaries in respect of all such Contingent Obligations shall at no time
exceed $2,000,000; and
(viii) [Reserved]
7.5 RESTRICTED JUNIOR PAYMENTS.
No Loan Party shall, shall permit their Subsidiaries to, or shall apply
to the Bankruptcy Court for authority to, declare, order, pay, make or set apart
any sum for any Restricted Junior Payment; provided that (i) Borrower's
Subsidiaries may pay dividends to Borrower and its Wholly Owned Subsidiaries,
(ii) so long as no Event of Default or Potential Event of Default shall have
occurred and be continuing or shall be caused thereby, Borrower may make
Restricted Junior Payments to Holdings (a) to the extent necessary to permit
Holdings to pay general administrative costs and expenses set forth in the
Budget then due and payable in the ordinary course of business of Holdings in an
amount not greater than that provided in the Budget and (b) to the extent
necessary to permit Holdings to discharge the consolidated tax liabilities of
Holdings and its Subsidiaries, in each case so long as Holdings applies the
amount of any such Restricted Junior Payment for such purpose, and (iii)
Borrower may seek Bankruptcy Court authority to make Restricted Junior Payments
upon, and in connection with, the confirmation of a Conforming Plan. Other than
in connection with the confirmation of a Conforming Plan, no Loan Party shall,
shall permit their Subsidiaries to, or shall apply to the Bankruptcy Court for
authority to, pay, make or set apart any sum for the payment of any Prepetition
Obligations, including any interest thereon, if (i) an Event of Default or
Potential Event of Default has then occurred and is continuing and (ii)
Administrative Agent or Requisite Lenders have notified Borrower that such
payments are not to be made and have not rescinded such notice.
7.6 MINIMUM CONSOLIDATED ADJUSTED EBITDA.
The Loan Parties shall not permit Consolidated Adjusted EBITDA for the
period commencing on July 1, 2000 and ending on any of the dates set forth below
(taken as a single accounting period) periods set forth below to be less than
the correlative amount indicated:
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ENDING DATE MINIMUM
CONSOLIDATED
ADJUSTED EBITDA
============================= ======================================
September 30, 2000 $4,000,000
============================= ======================================
October 31, 2000 $5,375,000
============================= ======================================
November 30, 2000 $6,600,000
============================= ======================================
December 31, 2000 $8,500,000
============================= ======================================
January 31, 2001 $10,750,000
============================= ======================================
February 28, 2001 $12,500,000
============================= ======================================
March 31, 2001 $13,500,000
============================= ======================================
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
No Loan Party shall, shall permit their Subsidiaries to, or shall apply
to the Bankruptcy Court for authority to, alter their corporate, capital or
legal structures, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor),
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business of any Person, except:
(i) the Loan Parties may consummate the Subsidiary Guarantor mergers
identified on Schedule 7.7-A hereof;
(ii) the Loan Parties may dispose of obsolete, worn out or surplus
property in the ordinary course of business PROVIDED that the aggregate amount
of proceeds received from such sales shall not exceed $500,000;
(iii) the Loan Parties may sell or otherwise dispose of assets in
transactions that do not constitute Asset Sales; PROVIDED that the consideration
received for such assets shall be in an amount at least equal to the fair market
value thereof as determined by such Loan Party in good faith provided that the
aggregate amount of proceeds received from such sales shall not exceed $500,000
and PROVIDED FURTHER that the total consideration received by such Loan Party in
each such sale consists of at least 90% Cash received at closing;
(iv) subject to subsection 7.11 and to the receipt of the prior
written consent of the Administrative Agent, the Loan Parties may make Asset
Sales of assets having a fair market value not in excess of $1,000,000 in the
aggregate after
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the Closing Date;
(v) the Loan Parties may consummate the sales of assets identified
on Schedule 7.7-B hereof;
(vi) the Loan Parties may apply to the Bankruptcy Court for
authority to enter into transactions otherwise prohibited by this subsection 7.7
upon, and in connection with, the confirmation of a Conforming Plan; and
(vii) the Loan Parties may discount or otherwise transfer defaulted
receivables in connection with the collection thereof in the ordinary course of
business.
7.8 CONSOLIDATED CAPITAL EXPENDITURES.
No Loan Party shall, shall permit their Subsidiaries to, or shall apply
to the Bankruptcy Court for authority to, make or incur Consolidated Capital
Expenditures (i) in excess of $2,500,000 for the 2000 Fiscal Year of Borrower or
(ii) in excess of $1,000,000 for the period commencing on January 1, 2001 and
ending on the Commitment Termination Date.
7.9 SALES AND LEASE-BACKS.
No Loan Party shall, shall permit their Subsidiaries to, or shall apply
to the Bankruptcy Court for authority to, directly or indirectly, become or
remain liable as lessee or as a guarantor or other surety with respect to any
Operating Lease of any property (whether real, personal or mixed), whether now
owned or hereafter acquired, (i) which any Loan Party or any of their
Subsidiaries has sold or transferred or is to sell or transfer to any other
Person (other than a Loan Party) or (ii) which any Loan Party or their
Subsidiaries intends to use for substantially the same purpose as any other
property which has been or is to be sold or transferred by such Loan Party or
their Subsidiaries to any Person (other than a Loan Party) in connection with
such lease;
7.10 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
No Loan Party shall, or shall permit any of its Subsidiaries to, or
shall apply to the Bankruptcy Court for authority to, directly or indirectly,
enter into or permit to exist any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
holder of 5% or more of any class of equity Securities of Holdings or with any
Affiliate of Holdings or of any such holder, on terms that are less favorable to
Holdings or that Subsidiary, as the case may be, than those that might be
obtained at the time from Persons who are not such a holder or Affiliate or make
any payment to any Investor or (except to the extent that the same are made in
the ordinary course of business consistent with past practices and on an
arms-length basis) any Affiliates of any Investor, whether under the
Administrative
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Agreement or otherwise; provided that the foregoing restriction shall not apply
to (i) any transaction between Holdings and any of its Wholly Owned Subsidiaries
or between any of its Wholly Owned Subsidiaries; (ii) reasonable and customary
fees paid to members of the Boards of Directors of Holdings and its
Subsidiaries; (iii) cash management, tax sharing and administrative services
rendered to ▇▇▇▇ ▇.. ▇▇▇▇ Company consistent with past practices and (iv)
application to the Bankruptcy Court by any Loan Party for authority to enter
into transactions otherwise prohibited by this subsection 7.10 upon, and in
connection with, the confirmation of a Conforming Plan.
7.11 DISPOSAL OF SUBSIDIARY STOCK.
Except for the mergers identified on Schedule 7.7-A, no Loan Party
shall, shall permit their Subsidiaries to, or shall apply to the Bankruptcy
Court for authority to (other than in connection with the confirmation of a
Conforming Plan):
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity Securities of
any of its Subsidiaries, except to qualify directors or funeral directors if
required by applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of capital stock
or other equity Securities of any of its Subsidiaries (including such
Subsidiary), except to Borrower, another domestic Wholly Owned Subsidiary of
Borrower, or to qualify directors or funeral directors if required by applicable
law.
7.12 CONDUCT OF BUSINESS.
(i) From and after the Closing Date, no Loan Party shall, shall
permit their Subsidiaries to, or shall apply to the Bankruptcy Court for
authority to, engage in any business other than (i) the businesses engaged in by
the Loan Parties on the Closing Date and similar businesses and (ii) such other
lines of business as may be consented to by Requisite Lenders.
(ii) Holdings shall engage in no business and have no assets or
liabilities other than (a) owning the stock of Borrower, (b) the performance of
its obligations under the Loan Documents, (c) liabilities associated with the
maintenance of its corporate existence and with respect to consolidated tax
liabilities of Holdings and its Subsidiaries and, (d) the receipt of Cash
dividends or Cash distributions from Borrower in accordance with the provisions
of subsection 7.5.
7.13 AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS; DESIGNATION OF
"SENIOR INDEBTEDNESS".
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A. AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS. Other than in
connection with the confirmation of a Conforming Plan, no Loan Party shall,
shall permit their Subsidiaries to, or shall apply to the Bankruptcy Court for
authority to, agree to any amendment to, request any material waiver of (other
than a waiver for which no fee is paid and no other concessions or consideration
are granted by Loan Party), or waive any of their respective rights under, any
of the Related Agreements (other than any amendment or waiver described in the
next succeeding sentence) without in each case obtaining the prior written
consent of Administrative Agent and Requisite Lenders (and giving notice to
Syndication Agent) to such amendment, request or waiver. Notwithstanding the
foregoing, the Loan Parties may agree to amend or waive any provisions of the
Related Agreements (i) to cure any ambiguity, to correct or supplement any
provision therein which may be defective or inconsistent with any other
provision therein, (ii) to comply with the Trust Indenture Act of 1939, as
amended or (iii) to make modifications of a technical or clarifying nature or
which are no less favorable to the Lenders, in the reasonable opinion of
Administrative Agent, than the provisions of the Related Agreements as in effect
on the Closing Date (for the purposes of this subsection 7.13, any amendment,
modification or change which would extend the maturity or reduce the amount of
any payment of principal on the Senior Subordinated Notes or which would reduce
the rate or extend the date for payment of interest thereon, provided that no
fee is payable in connection therewith, shall be deemed to be an amendment,
modification or change that is no less favorable to the Lenders).
B. DESIGNATION OF "SENIOR INDEBTEDNESS". Borrower shall not designate
any Indebtedness as "Designated Senior Indebtedness" (as defined in the Senior
Subordinated Note Indenture) for purposes of the Senior Subordinated Note
Indenture without the prior written consent of Requisite Lenders.
7.14 FISCAL YEAR.
Holdings shall not change its Fiscal Year-end from December 31.
7.15 LIMITATION ON CREATION OF SUBSIDIARIES.
No Loan Party shall, shall permit their Subsidiaries to, or shall apply
to the Bankruptcy Court for authority to, establish, create or acquire after the
Petition Date any Subsidiary.
7.16 CERTAIN PAYMENTS.
Except as permitted in subsection 7.19 and other than applications to
the Bankruptcy Court for authority to make any such payments upon, and in
connection with, the confirmation of a Conforming Plan, no Loan Party shall,
shall permit their Subsidiaries to, or shall apply to the Bankruptcy Court for
authority to, make any non-ordinary course payments, other than (i)
non-ordinary course payments
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contemplated by the first day orders, (ii) the payment of cure amounts in
connection with the assumption of contracts approved by Administrative Agent and
the Requisite Lenders and (iii) other payments in the amounts and during the
periods set forth in the Budget.
7.17 CHAPTER 11 CLAIMS.
Except for the Carve-Out or as otherwise provided in the Collateral
Documents, no Loan Party shall, or shall apply to the Bankruptcy Court for
authority to, incur, create, assume, suffer to exist or permit any other
Superpriority Claim or Lien which is PARI PASSU with or senior to (a) the claims
of the Agents and the Lenders granted pursuant to the Loan Documents or (b) the
claims of the Prepetition Agents and the Prepetition Lenders granted pursuant to
the Orders other than (i) with respect to prepetition assets of the Loan
Parties, perfected Prepetition Permitted Liens and (ii) with respect to
postpetition assets of the Loan Parties, Liens permitted under subsections
7.2A(i), (vi) and (vii) hereof (collectively "PRIOR PERMITTED LIENS").
7.18 USE OF PROCEEDS.
No Loan Party shall, or shall apply to the Bankruptcy Court for
authority to (a) use the proceeds of the Loans for purposes other than those
detailed in the Budget, or (b) use the proceeds of the Loans or the Carve-Out to
commence or prosecute any action or objection with respect to (i) the claims of
the Prepetition Agents or the Prepetition Lenders against the Borrower or the
Guarantors or the Prepetition Agents' or the Prepetition Banks' Liens which
secure the Prepetition Obligations or (ii) the Superpriority Claim or Liens
granted to the Agents and the Lenders pursuant to the Collateral Documents;
PROVIDED, HOWEVER, that proceeds of the Revolving Loans up to $25,000 may be
used for fees and expenses incurred by the Loan Parties, unsecured creditors'
committee or any statutory committee to investigate the extent, validity and
priority of the Prepetition Agent's or the Prepetition Banks' Liens.
7.19 PREPETITION PAYMENTS.
Without the prior written consent of the Administrative Agent, no Loan
Party shall, or shall apply to the Bankruptcy Court for authority to: (i) make
any payment with respect to prepetition obligations of any of the Loan Parties
(other than as permitted by the first-day orders, the Orders or this Agreement),
(ii) amend, modify or change any agreement or document relating to any
prepetition Indebtedness, or (iii) make any payment on any post-petition
Indebtedness outside of such Loan Party's ordinary course of business; PROVIDED,
HOWEVER, (i) the Loan Parties may make the payments specifically contemplated in
the first-day orders, the Budget or payments in connection with the assumption
of any contract or lease approved by the
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and consented to by the Administrative Agent pursuant to
subsection 7.21 hereof and (ii) the Loan Parties may apply to the Bankruptcy
Court for authority to make any such payments or changes upon, and in connection
with, the confirmation of a Conforming Plan and PROVIDED, FURTHER that the
Administrative Agent shall (for the purposes of this Agreement and without
prejudice to the right of any Agent or Lender to object in any proceeding before
the Bankruptcy Court) be deemed to have consented to any matter otherwise
prohibited under this subsection 7.19 if it shall have failed to object within
15 days of its receipt of written notice from Borrower identifying the action
proposed to be taken.
7.20 EMPLOYMENT MATTERS.
No Loan Party shall, shall permit their Subsidiaries to, or shall apply
to the Bankruptcy Court for authority to: (i) make any material adverse change
to the severance arrangements currently in effect for their respective
employees, and (ii) pay, or enter into any agreement to pay, any retention, stay
or similar payment to its employees other than pursuant to (A) agreements or
plans entered into prior to the Petition Date not in contemplation of bankruptcy
or (B) agreements or plans approved by the Administrative Agent and the
Requisite Lenders, and (C) renewals and extensions of such agreements described
in clauses (A) and (B) above on the same terms (other than immaterial changes to
non-economic terms); PROVIDED, HOWEVER, the Loan Parties may apply to the
Bankruptcy Court to do any of the foregoing upon, and in connection with, the
confirmation of a Conforming Plan.
7.21 LEASES; ETC.
No Loan Party shall, or permit any of its Subsidiaries to, or shall
apply to the Bankruptcy Court for authority to, enter into any agreements to
rent or lease any real property (other than upon the confirmation of a
Conforming Plan), or assume or reject the obligations under any such agreements
entered into prior to the Petition Date or under any Material Contract, in
either case without the prior written consent of the Administrative Agent
PROVIDED, that the Administrative Agent shall (for the purposes of this
Agreement and without prejudice to the right of any Agent or Lender to object in
any proceeding before the Bankruptcy Court) be deemed to have consented to any
matter otherwise prohibited under this subsection 7.21 if it shall have failed
to object within 15 days of its receipt of written notice from Borrower
identifying the action proposed to be taken.
SECTION 8.
EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
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Failure by Borrower to pay any installment of principal of, or interest
on, any Loan or any fees or other amounts payable under the Loan Documents when
due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Borrower to pay
when due any amount payable to Issuing Lender in reimbursement of any drawing
under a Letter of Credit.
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of any Loan Party to pay when due any principal of or
interest on or any other amount payable in respect of one or more items of
Indebtedness incurred after the Petition Date (other than Indebtedness referred
to in subsection 8.1) or Contingent Obligations incurred after the Petition Date
in an aggregate principal amount of $50,000 or more, in each case beyond the end
of any grace period provided therefor; or (ii) breach or default by any Loan
Party with respect to any other material term of (a) one or more items of
Indebtedness or Contingent Obligations incurred after the Petition Date in the
individual or aggregate principal amounts referred to in clause (i) above or (b)
any loan agreement, mortgage, indenture or other agreement relating to such
item(s) of Indebtedness or Contingent Obligation(s), if the effect of such
breach or default is to cause, or to permit the holder or holders of that
Indebtedness or Contingent Obligation(s) (or a trustee on behalf of such holder
or holders) to cause, that Indebtedness or Contingent Obligation(s) to become or
be declared due and payable prior to its stated maturity or the stated maturity
of any underlying obligation, as the case may be (upon the giving or receiving
of notice, lapse of time, both, or otherwise).
8.3 BREACH OF CERTAIN COVENANTS.
Failure of Holdings or its Subsidiaries to perform or comply with any
term or condition contained in subsection 2.5, Section 2A, subsection
6.1(vii)(a), subsections 6.2, 6.3, 6.4, 6.8 or 6.9, Section 7 or Section 11 of
this Agreement.
8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made by
any Loan Party in any Loan Document or in any statement or certificate at any
time given by any Loan Party in writing pursuant hereto or thereto or in
connection herewith or therewith shall be false in any material respect on the
date as of which made.
8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or compliance with
any
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term contained in this Agreement or any of the other Loan Documents, other than
any such term referred to in any other subsection of this Section 8, and such
default shall not have been remedied or waived within ten days after the
occurrence thereof.
8.6 [Reserved]
8.7 [Reserved]
8.8 [Reserved]
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against any Loan Party
decreeing the dissolution or split up of such Loan Party; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually or in the
aggregate results in or might reasonably be expected to result in liability any
Loan Party, or any of their respective ERISA Affiliates in excess of $100,000
during the term of this Agreement; or there shall exist an amount of unfunded
benefit liabilities (as defined in Section 4001(a)(18) of ERISA), individually
or in the aggregate for all Pension Plans (excluding for purposes of such
computation any Pension Plans with respect to which assets exceed benefit
liabilities), which exceeds $100,000, and the minimum funding standards of
Section 412 of the Internal Revenue Code (whether or not waived in accordance
with Section 412(d) of the Internal Revenue Code) have not been met with respect
to any Pension Plan; or
8.11 [Reserved]
8.12 INVALIDITY OF GUARANTY; FAILURE OF SECURITY; REPUDIATION OF
OBLIGATIONS.
At any time after the execution and delivery thereof, (i) the Guaranty
for any reason, other than the satisfaction in full of all Obligations, shall
cease to be in full force and effect against one or more Guarantors or shall be
declared to be null and void; (ii) any Collateral Document shall cease to be in
full force and effect (other than by reason of a release of Collateral
thereunder in accordance with the terms hereof or thereof or the satisfaction in
full of the Obligations or shall be declared null and void, or Administrative
Agent shall not have or shall cease to have a valid and perfected First Priority
Lien in any Collateral purported to be covered thereby, in each case for any
reason other than the failure of Administrative Agent or any Lender to take any
action within its control; or (iii) any Loan Party shall contest the validity or
enforceability of any Loan Document in writing or deny in writing that it has
any further liability, including with respect to future advances by Lenders,
under any Loan Document to which it is a party; or
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8.13 SUBORDINATED INDEBTEDNESS.
The subordination provisions contained in the Senior Subordinated Note
Indenture or any other agreement governing any other Subordinated Indebtedness
shall cease to be in full force and effect.
8.14 [Reserved]
8.15 BANKRUPTCY MATTERS.
(i) (a) Any of the Cases shall be dismissed or converted to a case
under Chapter 7 of the Bankruptcy Code, (b) a trustee under Chapter 11 of the
Bankruptcy Code shall be appointed in any of the Cases, or (c) an examiner
having enlarged powers relating to the operation of the business of the Borrower
or any Guarantor (beyond those set forth under Section 1106(a)(3) and (4) of the
Bankruptcy Code) under Section 1106(b) of the Bankruptcy Code shall be
appointed; or
(ii) (a) an order of a court of competent jurisdiction shall be
entered staying or rescinding the Interim Order or the Final Order; (b) an order
of a court of competent jurisdiction shall be entered amending, supplementing or
otherwise modifying either the Interim Order or the Final Order without the
consent of the Administrative Agent and the Requisite Lenders; (c) without the
consent of the Prepetition Agents and the Requisite Lenders (as defined in the
Prepetition Credit Agreement), the Prepetition Lenders' Cash Collateral shall be
used in a manner inconsistent with the orders authorizing use of Cash Collateral
or (except as provided in the Final Order) an order of a court of competent
jurisdiction authorizes the use of Cash Collateral without the written consent
of each of the Administrative Agent and the Requisite Lenders; or (d) an order
of a court of competent jurisdiction shall be entered terminating the use of the
Prepetition Lenders' Cash Collateral; or
(iii) Any Loan Party shall make any payments of Prepetition
Indebtedness other than (a) as permitted under the Interim Order and/or the
Final Order (as applicable), (b) as permitted by any of the orders entered by
the Bankruptcy Court on or about the Petition Date and in the approximate
amounts reflected on the Budget, (c) as otherwise permitted in this Agreement,
or (d) in connection with the assumption of any contract or lease approved by
the Bankruptcy Court and consented to by the Administrative Agent; or
(iv) An order shall be entered granting relief from the automatic
stay so as to allow a third party to proceed against any property or assets of
any Loan Party having a value in excess of $50,000 in the aggregate; or
(v) There shall occur any event after the Petition Date which
results in a Material Adverse Effect; or
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(vi) The entry of the Final Order shall not have occurred within 45
days after the Petition Date; or
(vii) Except for the Carve-Out, any Loan Party shall file, or fail
to actively oppose, any pleading seeking, or otherwise consenting to, (a) the
invalidation, subordination or otherwise challenging the Liens and Superpriority
Claim status granted to secure the Obligations hereunder or under the
Prepetition Credit Agreement, or (b) any relief under Section 506(c) of the
Bankruptcy Code with respect to any assets which secure the Prepetition
Obligations or an order shall be entered by the Bankruptcy Court invalidating or
subordinating the Liens or the superpriority status of the Obligations
hereunder; or
(viii) The Bankruptcy Court or any other court having jurisdiction
over the Loan Parties makes a final determination with respect to any motion or
proceeding brought by any Person which results in the impairment of the rights
of the Agents or the Lenders under any of the Loan Documents; or
(ix) The Loan Parties shall have failed to either (a) file a
Conforming Plan by September 1, 2000, (b) obtain approval of a disclosure
statement with respect thereto by November 15, 2000, or (c) confirm such plan by
December 31, 2000, or any of the Loan Parties shall support any alternative plan
of reorganization or
THEN upon the occurrence and during the continuation of any Event of
Default, and without further order of or application to the Bankruptcy Court,
Administrative Agent shall, upon the written request or with the written consent
of Requisite Lenders, (or, in the case of the Cash Management Indemnity Loans
and the Cash Management Indemnity Loan Commitment, Scotiabank) by written notice
to Borrower, (i) declare all or any portion of the principal of, interest on,
and other amounts payable on the Loans, and all or any portion of the other
obligations to be, and the same shall forthwith become, immediately due and
payable; (ii) terminate the Commitments and the obligation of each Lender to
make any Loan, the obligation of Issuing Bank to issue any Letter of Credit
(provided that the foregoing shall not affect in any way the obligations of
Lenders under subsection 3.3C(i)); (iii) terminate any Letter of Credit which
may be terminated by the Issuing Lender in accordance with its terms; (iv)
direct the Borrower to pay (and the Borrower agrees that upon receipt of such
notice, it will pay) to the Administrative Agent such additional amount of cash
or Cash Equivalents, to be held as security by the Administrative Agent, as is
equal to 105% of the aggregate undrawn face amounts of all Letters of Credit
then outstanding; (v) enforce all of the Liens and security interests created
pursuant to the Collateral Documents and/or the Orders; (vi) apply any cash
collateral held by the Administrative Agent to the repayment of the Obligations;
(vii) setoff amounts in bank accounts maintained with any Agent or
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Lender, or otherwise enforce rights against any other Collateral in the
possession of any Agent or Lender; and/or (viii) take any other action or
exercise any other right or remedy permitted to the Agents or Lenders under any
of the Loan Documents, the Orders or applicable law; PROVIDED, HOWEVER, that in
accordance with the terms of the Orders, the Agents and the Lenders may take the
actions described in clauses (v) through (viii) only after providing three
Business Days' prior written notice to the Borrower, its counsel, the United
States Trustee, the Prepetition Agent, the Prepetition Lenders and counsel to
any statutory committee appointed in the Cases.
Any amounts described in clause (iv) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of the Collateral Account Agreement and shall be applied as therein
provided.
SECTION 9.
AGENTS
9.1 APPOINTMENT.
A. APPOINTMENT OF AGENTS. ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P. is hereby
appointed Syndication Agent hereunder, and each Lender hereby authorizes
Syndication Agent to act as its agent in accordance with the terms of this
Agreement and the other Loan Documents. Scotiabank is hereby appointed
Administrative Agent hereunder and under the other Loan Documents and each
Lender hereby authorizes Administrative Agent to act as its agent in accordance
with the terms of this Agreement and the other Loan Documents. Each Agent hereby
agrees to act upon the express conditions contained in this Agreement and the
other Loan Documents, as applicable. The provisions of this Section 9 are solely
for the benefit of Agents and Lenders and neither Borrower nor any Guarantor
shall have any rights as a third party beneficiary of any of the provisions
thereof. In performing its functions and duties under this Agreement, each Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or trust
with or for Borrower or any Guarantor. As of the Closing Date, all obligations
of Syndication Agent hereunder shall terminate. Such termination shall not
affect in any way the rights and obligations of ▇▇▇▇▇▇▇ Sachs Credit Partners
L.P. as a Lender hereunder.
B. APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the purpose of
this Agreement and the other Loan Documents that there shall be no violation of
any law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact business as agent or trustee in such
jurisdiction. It is recognized that in case of litigation under this Agreement
or any of the other Loan Documents, and in particular in case of the enforcement
of any of the Loan Documents, or in case Administrative Agent deems that by
reason of any present or future law of any jurisdiction it may not exercise any
of the rights, powers or remedies granted herein or in any of the other Loan
Documents or take any other
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action which may be desirable or necessary in connection therewith, it may be
necessary that Administrative Agent appoint an additional individual or
institution as a separate trustee, co-trustee, collateral agent or collateral
co-agent (any such additional individual or institution being referred to herein
individually as a "SUPPLEMENTAL COLLATERAL AGENT" and collectively as
"SUPPLEMENTAL COLLATERAL AGENTS").
In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Collateral Agent to the extent, and only to the
extent, necessary to enable such Supplemental Collateral Agent to exercise such
rights, powers and privileges with respect to such Collateral and to perform
such duties with respect to such Collateral, and every covenant and obligation
contained in the Loan Documents and necessary to the exercise or performance
thereof by such Supplemental Collateral Agent shall run to and be enforceable by
either Agent or such Supplemental Collateral Agent, and (ii) the provisions of
this Section 9 and of subsections 10.2 and 10.3 that refer to Administrative
Agent shall inure to the benefit of such Supplemental Collateral Agent and all
references therein to Administrative Agent shall be deemed to be references to
Administrative Agent and/or such Supple mental Collateral Agent, as the context
may require.
Should any instrument in writing from Borrower or any other Loan Party
be required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, each Loan Party shall execute,
acknowledge and deliver any and all such instruments promptly upon request by
Administrative Agent. In case any Supplemental Collateral Agent, or a successor
thereto, shall die, become incapable of acting, resign or be removed, all the
rights, powers, privileges and duties of such Supplemental Collateral Agent, to
the extent permitted by law, shall vest in and be exercised by Administrative
Agent until the appointment of a new Supplemental Collateral Agent.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
▇. ▇▇▇▇▇▇; DUTIES SPECIFIED. Each Lender irrevocably authorizes each
Agent to take such action on such Lender's behalf and to exercise such powers,
rights and remedies hereunder and under the other Loan Documents as are
specifically delegated or granted to such Agent by the terms hereof and thereof,
together with such powers, rights and remedies as are reasonably incidental
thereto. Each Agent shall have only those duties and responsibilities that are
expressly specified in this Agreement and the other Loan Documents. Each Agent
may exercise such powers,
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rights and remedies and perform such duties by or through its agents or
employees. No Agent shall have, by reason of this Agreement or any of the other
Loan Documents, a fiduciary relationship in respect of any Lender; and nothing
in this Agreement or any of the other Loan Documents, expressed or implied, is
intended to or shall be so construed as to impose upon any Agent any obligations
in respect of this Agreement or any of the other Loan Documents except as
expressly set forth herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. No Agent shall be responsible
to any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by any of Agent to Lenders or by or on behalf of any
Loan Party to any Agent or any Lender in connection with the Loan Documents and
the transactions contemplated thereby or for the financial condition or business
affairs of Borrower or any other Person liable for the payment of any
Obligations, nor shall any Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Loan Documents or as to the use of the
proceeds of the Loans or as to the existence or possible existence of any Event
of Default or Potential Event of Default. Anything contained in this Agreement
to the contrary notwithstanding, Administrative Agent shall not have any
liability arising from confirmations of the amount of outstanding Loans or the
Letter of Credit Usage or the component amounts thereof.
C. EXCULPATORY PROVISIONS. None of Agents nor any of their respective
officers, partners, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by any Agent under or in connection with any of
the Loan Documents except to the extent caused solely by such Agent's gross
negligence or willful misconduct. Each Agent shall be entitled to refrain from
any act or the taking of any action (including the failure to take an action) in
connection with this Agreement or any of the other Loan Documents or from the
exercise of any power, discretion or authority vested in it hereunder or
thereunder unless and until such Agent shall have received instructions in
respect thereof from Requisite Lenders (or such other Lenders as may be required
to give such instructions under subsection 10.6) and, upon receipt of such
instructions from Requisite Lenders (or such other Lenders, as the case may be),
such Agent shall be entitled to act or (where so instructed) refrain from
acting, or to exercise such power, discretion or authority, in accordance with
such instructions. Without prejudice to the generality of the foregoing, (i)
each Agent shall be entitled to rely, and shall be fully protected in relying,
upon any communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and
shall be entitled to rely and shall be protected in relying on opinions and
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judgments of attorneys (who may be attorneys for Borrower and its Subsidiaries),
accountants, experts and other professional advisors selected by it; and (ii) no
Lender shall have any right of action whatsoever against any Agent as a result
of such Agent acting or (where so instructed) refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions
of Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 10.6).
D. AGENT ENTITLED TO ACT AS LENDER. The agency hereby created shall in
no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same obligations, rights and powers hereunder as any other
Lender and may exercise the same as though it were not performing the duties and
functions delegated to it hereunder, and the term "Lender" or "Lenders" or any
similar term shall, unless the context clearly otherwise indicates, include each
Agent in its individual capacity. Any Agent and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with Borrower or any of its Affiliates as
if it were not performing the duties specified herein, and may accept fees and
other consideration from Borrower for services in connection with this Agreement
and otherwise without having to account for the same to Lenders.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Borrower and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Borrower and its Subsidiaries. No Agent
shall not have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter, and no Agent shall not have any responsibility
with respect to the accuracy of or the completeness of any information provided
to Lenders.
9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify Administrative Agent, to the extent that Administrative Agent shall
not have been reimbursed by Borrower, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
110
Administrative Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Loan Documents or otherwise in its
capacity as Administrative Agent in any way relating to or arising out of this
Agreement or the other Loan Documents; provided that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from such
Agent's gross negligence or willful misconduct.
9.5 SUCCESSOR ADMINISTRATIVE AGENT.
Administrative Agent may resign at any time by giving 30 days' prior
written notice thereof to Lenders and Borrower. Upon any such notice of
resignation, Requisite Lenders shall have the right, upon five Business Days'
notice to Borrower, to appoint a successor Administrative Agent. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent and the retiring Administrative Agent shall
be discharged from its duties and obligations under this Agreement. After any
retiring Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Section 9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
9.6 COLLATERAL DOCUMENTS AND GUARANTY.
Each Lender hereby further authorizes Administrative Agent, on behalf
of and for the benefit of Lenders, to enter into each Collateral Document as
secured party and to be the agent for and representative of Lenders under the
Collateral Documents, and each Lender agrees to be bound by the terms of each
Collateral Document; provided that Administrative Agent shall not (i) enter into
or consent to any material amendment, modification, termination or waiver of any
provision contained in any Collateral Document or (ii) release any Collateral
(except, in either case, as otherwise expressly permitted or required pursuant
to the terms of this Agreement or the applicable Collateral Document), in each
case without the prior consent of Requisite Lenders (or, if required pursuant to
subsection 10.6, all Lenders); provided further, however, that, without further
written consent or authorization from Lenders, Administrative Agent may execute
any documents or instruments necessary to (a) release any Lien encumbering any
item of Collateral that is the subject of a sale or other sale or disposition of
assets permitted by this Agreement or to which Requisite Lenders have otherwise
consented in accordance with the provisions of this subsection 9.6 or (b)
release any Subsidiary Guarantor from the Guaranty if all of the capital stock
of such Subsidiary Guarantor is sold to any Person (other than an Affiliate of
Borrower) pursuant to a sale or other disposition to which Requisite Lenders
have otherwise consented. In the event
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Collateral is sold in such a sale or other disposition, Administrative Agent
may, without further consent or authorization from Lenders, release the Liens
granted under the Collateral Documents on the Collateral that is the subject of
such sale or other disposition concurrently with the consummation thereof;
provided that, in connection with any sale or disposition of assets or related
sale or dispositions of assets with a value of $100,000 or greater,
Administrative Agent shall have received ten Business Days' prior written notice
of such Asset Sale or such other transaction from Borrower; and an Officers'
Certificate (1) certifying that no Event of Default or Potential Event of
Default shall have occurred and be continuing as of the date of such release of
Collateral, (2) setting forth a detailed description of the Collateral subject
to such transaction, and (3) certifying such transaction is permitted under this
Agreement and that all conditions precedent to such sale or disposition under
this Agreement have been met. Upon payment in full of all of the Obligations and
termination of the Commitments, Administrative Agent shall release the Liens on
such Collateral granted pursuant to the Collateral Documents. Upon any release
of Collateral pursuant to the foregoing, Administrative Agent shall, at
Borrower's expense, execute and deliver such documents (without recourse or
representation or warranty) as reasonably requested to evidence such release.
Anything contained in any of the Loan Documents to the contrary notwithstanding,
Borrower, Administrative Agent and each Lender hereby agree that (1) no Lender
shall have any right individually to realize upon any of the Collateral under
any Collateral Document or to enforce the Guaranty, it being understood and
agreed that all powers, rights and remedies under the Collateral Documents and
such guaranty may be exercised solely by Administrative Agent for the benefit of
Lenders in accordance with the terms thereof, and (2) in the event of a
foreclosure by Administrative Agent on any of the Collateral pursuant to a
public or private sale, Administrative Agent or any Lender may be the purchaser
of any or all of such Collateral at any such sale and Administrative Agent, as
agent for and representative of Lenders (but not any Lender or Lenders in its
or their respective individual capacities unless Requisite Lenders shall
otherwise agree in writing) shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any collateral payable by
Administrative Agent at such sale.
SECTION 10.
MISCELLANEOUS
10.1 ASSIGNMENTS AND PARTICIPATIONS IN REVOLVING LOANS AND LETTERS OF
CREDIT.
A. GENERAL. Subject to subsection 10.1B, each Lender shall have the
right at any time to (i) sell, assign or transfer to any Eligible Assignee, or
(ii) sell participations to any Person in, all or any part of its Commitments or
its Loans made by it or its Letters of Credit or participations therein or any
other interest herein or in
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any other Obligations owed to it; provided that no such sale, assignment,
transfer or participation shall require Borrower to file a registration
statement with the Securities and Exchange Commission or apply to qualify such
sale, assignment, transfer or participation under the securities laws of any
state; provided, further that no such sale, assignment or transfer described in
clause (i) above shall be effective unless and until an Assignment Agreement
effecting such sale, assignment or transfer shall have been accepted by
Administrative Agent and recorded in the Register as provided in subsection
10.1B(ii); PROVIDED, FURTHER, that no such sale, assignment, transfer or
participation of any Letter of Credit or any participation therein may be made
separately from a sale, assignment, transfer or participation of a corresponding
interest in the Revolving Loan Commitment and the Revolving Loans of the Lender
effecting such sale, assignment, transfer or participation. Except as otherwise
provided in this subsection 10.1, no Lender shall, as between Borrower and such
Lender, be relieved of any of its obligations hereunder as a result of any sale,
assignment or transfer of, or any granting of participations in, all or any part
of its Commitment or the Loans, the Letters of Credit or participations therein,
or the other Obligations owed to such Lender.
B. ASSIGNMENTS. (i) AMOUNTS AND TERMS OF ASSIGNMENTS. Any Lender (or
any Lender together with one or more other Lenders) may (a) assign all or a
portion of its Commitments (and related outstanding Obligations) hereunder
and/or risk participation therein to an Affiliate pursuant to subsection 3.1C,
PROVIDED that such Affiliate (x) is an Eligible Assignee or (y) represents that
it has the financial resources to fulfill its commitments hereunder and shall
provide such documents requested by the Administrative Agent which demonstrate
to the reasonable satisfaction of the Administrative Agent that it has the
financial resources to fulfill its commitments hereunder, or (b) with the
consent of the Administrative Agent (which consent shall not be unreasonably
withheld or delayed), assign all, or if less than all, a portion equal to at
least $1,000,000 in the aggregate for the assigning Lender or Lenders, of its or
their Commitments (and related outstanding Obligations) hereunder to one or more
Eligible Assignees, each of which assignees shall become a party to this
Agreement as a Lender by execution of an Assignment and Assumption Agreement,
PROVIDED that (x) at such time Schedule 2.1 shall be deemed modified to reflect
the Commitments of such new Lender and of the existing Lenders, (y) new Notes
will be issued, at the Borrower's expense, to such new Lender and to the
assigning Lender upon the request of such new Lender or assigning Lender, such
new Notes to be in conformity with the requirements of subsection 2.1E (with
appropriate modifications) to the extent needed to reflect the revised
Commitments, and (z) the Administrative Agent shall receive at the time of each
such assignment, from the assigning or assignee Lender, the payment of a non-
refundable assignment fee of $2,000. To the extent of any assignment pursuant to
this subsection 10.1B, the assigning Lender shall be relieved of its obligations
hereunder with respect to its assigned Commitments (it being understood that the
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indemnification provisions under this Agreement shall survive as to such
assigning Lender). At the time of each assignment pursuant to this subsection
10.1B to a Person which is not already a Lender hereunder and which is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) for Federal income tax purposes, the respective assignee Lender, as a
condition to its becoming a Lender hereunder, shall provide to the Borrower and
the Administrative Agent the appropriate Internal Revenue Service Forms (and, if
applicable, a Subsection 4.04(b)(ii) Certificate) described in subsection
4.04(b).
(ii) ACCEPTANCE BY ADMINISTRATIVE AGENT; RECORDATION IN REGISTER.
Upon its receipt of an Assignment Agreement executed by an assigning Lender and
an assignee representing that it is an Eligible Assignee, together with the
processing and recordation fee referred to in subsection 10.1B(i) and any forms,
certificates or other evidence with respect to United States federal income tax
withholding matters that such assignee may be required to deliver to
Administrative Agent pursuant to subsection 2.7B(iii)(a), Administrative Agent
shall, if Administrative Agent has consented to the assignment evidenced thereby
(to the extent such consent is required pursuant to subsection 10.1B(i)), (a)
accept such Assignment Agreement by executing a counterpart thereof as provided
therein (which acceptance shall evidence any required consent of Administrative
Agent to such assignment), (b) record the information contained therein in the
Register, and (c) give prompt notice thereof to Borrower. Administrative Agent
shall maintain a copy of each Assignment Agreement delivered to and accepted by
it as provided in this subsection 10.1B(ii).
C. PARTICIPATIONS. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of any
Loan allocated to such participation or (ii) a reduction of the principal
amount of or the rate of interest payable on any Loan allocated to such
participation, and all amounts payable by Borrower hereunder (including amounts
payable to such Lender pursuant to subsections 2.6D, 2.7 and 3.6) shall be
determined as if such Lender had not sold such participation. No holder of any
participation hereunder shall have any rights under any Order with respect to
such participation. Borrower and each Lender hereby acknowledge and agree that,
solely for purposes of subsections 10.4 and 10.5, (a) any participation will
give rise to a direct obligation of Borrower to the participant and (b) the
participant shall be considered to be a "LENDER".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the assignments
and participations permitted under the foregoing provisions of this subsection
10.1, any Lender may assign and pledge all or any portion of its Loans, the
other Obligations owed to such Lender, and its Notes to any Federal Reserve Bank
as collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; provided that (i) no Lender shall, as between Borrower and such
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Lender, be relieved of any of its obligations hereunder as a result of any such
assignment and pledge and (ii) in no event shall such Federal Reserve Bank be
considered to be a "Lender" or be entitled to require the assigning Lender to
take or omit to take any action hereunder.
E. INFORMATION. Each Lender may furnish any information concerning
Borrower and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 10.19.
F. REPRESENTATIONS OF LENDERS. Each Lender listed on the signature
pages hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (i) of the definition thereof; (ii) that it has experience
and expertise in the making of loans such as the Loans; and (iii) that it will
make its Loans for its own account in the ordinary course of its business and in
accordance with all applicable laws). Each Lender that becomes a party hereto
pursuant to an Assignment Agreement shall be deemed to agree that the
representations and warranties of such Lender contained in Section 2(c) of such
Assignment Agreement are incorporated herein by this reference.
10.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to pay promptly (i) all the actual and reasonable
costs and expenses of Administrative Agent and Syndication Agent in connection
with the preparation of the Loan Documents and any consents, amendments, waivers
or other modifications thereto; (ii) all the costs of furnishing all opinions by
counsel for Borrower (including any opinions requested by Lenders as to any
legal matters arising hereunder) and of Borrower's performance of and compliance
with all agreements and conditions on its part to be performed or complied with
under this Agreement and the other Loan Documents including with respect to
confirming compliance with environmental and insurance requirements; (iii) the
reasonable fees, expenses and disbursements of counsel and financial advisors to
Syndication Agent and counsel and financial advisors to Administrative Agent in
connection with the negotiation, preparation, execution and administration of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto and any other documents or matters requested by any Loan Party; (iv) all
the actual costs and reasonable expenses of creating and perfecting Liens in
favor of Administrative Agent on behalf of Lenders pursuant to any Collateral
Document, including filing and recording fees, expenses and taxes, stamp or
documentary taxes, search fees, and reasonable fees, expenses and disbursements
of counsel to Syndication Agent and counsel to Administrative Agent and of
counsel providing any opinions that Syndication Agent, Administrative Agent or
Requisite Lenders may request in respect of the Collateral Documents or the
Liens created pursuant thereto; (v) all the
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actual costs and reasonable expenses (including the reasonable fees, expenses
and disbursements of any auditors, accountants, appraisers, environmental
consultants or any other consultants, advisors and agents employed or retained
by Administrative Agent and its counsel) in connection with the valuation (upon
the occurrence and during the continuance of an Event of Default), custody or
preservation of any of the Collateral; (vi) all other actual and reasonable
costs and expenses incurred by Syndication Agent or Administrative Agent in
connection with the syndication of the Commitments and the negotiation,
preparation and execution of the Loan Documents and any consents, amendments,
waivers or other modifications thereto and the transactions contemplated
thereby; and (vii) after the occurrence and during the continuance of an Event
of Default, all costs and expenses, including reasonable attorneys' fees and
costs of settlement, incurred by Syndication Agent, Administrative Agent and
Lenders in enforcing any Obligations of or in collecting any payments due from
any Loan Party hereunder or under the other Loan Documents by reason of such
Event of Default (including in connection with the sale of, collection from, or
other realization upon any of the Collateral or the enforcement of the Guaranty)
or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.
10.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Borrower agrees to indemnify, pay and hold harmless Agents and Lenders, and the
officers, partners, directors, trustees, employees, agents and affiliates of any
of Agents and Lenders (collectively called the "INDEMNITEES"), from and against
any and all Indemnified Liabilities (as hereinafter defined); PROVIDED that
Borrower shall not have any obligation to any Indemnitee hereunder with respect
to any Indemnified Liabilities to the extent such Indemnified Liabilities arise
solely from the gross negligence, willful misconduct or bad faith of that
Indemnitee.
As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any and
all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including the costs of any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or ▇▇▇▇▇ any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on
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common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner relating
to or arising out of (i) this Agreement or the other Loan Documents or the
Related Agreements or the transactions contemplated hereby or thereby (including
Lenders' agreement to make the Loans hereunder or the use or intended use of the
proceeds thereof or the issuance of Letters of Credit hereunder or the use or
intended use of any thereof, or any enforcement of any of the Loan Documents
(including any sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Guaranty)), (ii) the statements contained
in the commitment letter delivered by any Lender to Borrower with respect
thereto, or (iii) any Environmental Claim or any Hazardous Materials Activity
relating to or arising from, directly or indirectly, any past or present
activity, operation, land ownership, or practice of Borrower or any of its
Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Borrower shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence of any
Event of Default each Lender is hereby authorized by Borrower at any time or
from time to time, without notice to Borrower or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all deposits (general or special, including Indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including trust
accounts) and any other Indebtedness at any time held or owing by that Lender to
or for the credit or the account of Borrower against and on account of the
obligations and liabilities of Borrower to that Lender under this Agreement, the
Letters of Credit and participations therein and the other Loan Documents,
including all claims of any nature or description arising out of or connected
with this Agreement, the Letters of Credit and participations therein or any
other Loan Document, irrespective of whether or not (i) that Lender shall have
made any demand hereunder or (ii) the principal of or the interest on the Loans
or any amounts in respect of the Letters of Credit or any other amounts due
hereunder shall have become due and payable pursuant to Section 8 and although
said obligations and liabilities, or any of them, may be contingent or
unmatured.
10.5 RATABLE SHARING.
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Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as Cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "AGGREGATE
AMOUNTS DUE" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of Borrower or otherwise,
those purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. Borrower expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Borrower to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
10.6 AMENDMENTS AND WAIVERS.
A. No amendment, modification, termination or waiver of any provision
of this Agreement or of the Revolving Notes, and no consent to any departure by
Borrower therefrom, shall in any event be effective without the written
concurrence of Requisite Lenders (unless the consent of any other Person or
Persons is expressly required); provided that any such amendment, modification,
termination, waiver or consent which: increases the amount of any of the
Revolving Loan Commitments or reduces the principal amount of any of the
Revolving Loans; increases the maximum amount of Letters of Credit; changes in
any manner the definition of "Pro Rata Share" or the definition of "Requisite
Lenders"; changes in any manner any provision of this Agreement which, by its
terms, expressly requires the approval or concurrence of all Lenders; postpones
the scheduled final maturity date; postpones the date on which any interest or
any fees are payable; decreases the interest rate borne by any of the Revolving
Loans (other than any waiver of any increase in the
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interest rate applicable to any of the Revolving Loans pursuant to subsection
2.2E) or the amount of any fees payable hereunder; reduces the amount or
postpones the due date of any amount payable in respect of, or increases the
maximum term hereunder of, any Letter of Credit; changes in any manner the
obligations of Lenders relating to the purchase of participations in Letters of
Credit; releases any Lien granted in favor of Administrative Agent with respect
to any substantial portion of the Collateral; any Guarantor from its obligations
under the Guaranty, in each case other than in accordance with the terms of the
Loan Documents; or changes in any manner the provisions contained in subsection
8.1 or this subsection 10.6 shall be effective only if evidenced by a writing
signed by or on behalf of each Lender affected thereby. In addition, (i) any
amendment, modification, termination or waiver of any of the provisions
contained in Section 4 shall be effective only if evidenced by a writing signed
by or on behalf of Administrative Agent and Requisite Lenders, (ii) no
amendment, modification, termination or waiver of any provision of any Note
shall be effective without the written concurrence of the Lender which is the
holder of that Note, (iii) no amendment, modification, termination or waiver of
any provision relating to any Cash Management Indemnity Loan without the written
concurrence of Scotiabank and, (iv) no amendment, modification, termination or
waiver of any provision of Section 9 or of any other provision of this Agreement
which, by its terms, expressly requires the approval or concurrence of any Agent
shall be effective without the written concurrence of such Agent. Administrative
Agent may, but shall have no obligation to, with the concurrence of any Lender,
execute amendments, modifications, waivers or consents on behalf of that Lender.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on Borrower
in any case shall entitle Borrower to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance with this subsection 10.6 shall be binding
upon each Lender at the time outstanding, each future Lender and, if signed by
Borrower, on Borrower.
B. If, in connection with any proposed change, waiver, discharge or
termination to any of the provision of this Agreement as contemplated by the
proviso in the first sentence of subsection 10.6A, the consent of Requisite
Lenders is obtained but consent of one or more of such other Lenders whose
consent is required is not obtained, then Borrower may, so long as all
non-consenting Lenders are so treated, elect to terminate such Lender as a party
to this Agreement; provided that, concurrently with such termination, (i)
Borrower shall pay that Lender all principal, interest and fees and other
amounts owed to such Lender through such date of termination, (ii) another
financial institution satisfactory to Borrower and Administrative Agent (or if
Administrative Agent is also the Lender to be terminated, the successor
Administrative Agent) shall agree, as of such date, to become a Lender for all
purposes under this Agreement (whether by assignment or amendment) and to assume
all obligations of the Lender to be terminated as of such date, and (iii) all
documents and supporting materials necessary, in the judgment of Administrative
Agent (or if Administrative Agent is also the Lender to be terminated, the
successor Administrative Agent), to evidence the substitution of such
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Lender shall have been received and approved by Administrative Agent as of such
date.
10.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service or upon receipt if sent by telefacsimile or by the United
States mail with postage prepaid and properly addressed. For the purposes
hereof, the address of each party hereto shall be as set forth under such
party's name on the signature pages hereof or (i) as to Borrower and
Administrative Agent, such other address as shall be designated by such Person
in a written notice delivered to the other parties hereto and (ii) as to each
other party, such other address as shall be designated by such party in a
written notice delivered to Administrative Agent and Borrower.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the
Revolving Loans and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Borrower set forth in subsections 2.7, 3.5A, 3.6,
10.2, 10.3 and 10.4 and the agreements of Lenders set forth in subsections 9.2C,
9.4 and 10.5 shall survive the payment of the Loans, the cancellation or
expiration of the Letters of Credit and the reimbursement of any amounts drawn
thereunder, and the termination of this Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Administrative Agent or any Lender
in the exercise of any power, right or privilege hereunder or under any other
Loan Document shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any
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such power, right or privilege preclude other or further exercise thereof or of
any other power, right or privilege. All rights and remedies existing under this
Agreement and the other Loan Documents are cumulative to, and not exclusive of,
any rights or remedies otherwise available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Borrower or any other party or
against or in payment of any or all of the Obligations. To the extent that
Borrower makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
10.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or any Note
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as 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 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.
10.14 HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
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10.15 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES AND, TO THE EXTENT APPLICABLE, THE BANKRUPTCY CODE.
10.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither Holdings
nor Borrower's rights or obligations hereunder nor any interest therein may be
assigned or delegated by Holdings or Borrower without the prior written consent
of all Lenders.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST HOLDINGS OR BORROWER ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN THE BANKRUPTCY COURT, AND IF THE
BANKRUPTCY COURT DOES NOT HAVE (OR ABSTAINS FROM) JURISDICTION, ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH OF HOLDINGS AND HOLDINGS
OR BORROWER, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I)
ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF
SUCH COURTS; (II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT
SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO HOLDINGS OR BORROWER
AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION 10.8; (IV) AGREES THAT
SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL
JURISDICTION OVER HOLDINGS OR BORROWER IN ANY SUCH PROCEEDING IN ANY SUCH COURT,
AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V)
AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN
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ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST HOLDINGS OR
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION; AND (VI) AGREES THAT THE
PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO JURISDICTION AND VENUE SHALL BE
BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL
OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
10.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
10.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement which has been identified as confidential by
Borrower in accordance with such Lender's customary procedures for handling
confidential information of this nature and in accordance with prudent lending
or investing practices, it being understood and agreed by Borrower that in any
event a Lender shall be permitted to disclose such information (a) to Affiliates
of such Lender or disclosures reasonably required by any actual or potential
assignee,
123
transferee or participant in connection with the contemplated assignment or
transfer by such Lender of its Loans or any participations therein; provided
that such actual or potential assignee, transferee or participant agrees in
writing to be bound by the provisions of this subsection 10.19, (b) to such of
its respective officers, directors, employees, agents, affiliates and
representatives as need to know such information, (c) to the extent requested by
any regulatory authority, (d) to the extent otherwise required by applicable
laws and regulations or by any subpoena or similar legal process or disclosures
required by the National Association of Insurance Commissioners, (e) in
connection with any suit, action or proceeding relating to the enforcement of
its rights hereunder or under the other Loan Documents or (f) to the extent such
information (i) publicly available other than as a result of a breach of this
Section 10.19 or (ii) becomes available to an Agent or any Lender on a
nonconfidential basis from a source other than Borrower.
10.20 MAXIMUM AMOUNT.
A. It is the intention of Borrower and Lenders to conform strictly to
the usury and similar laws relating to interest from time to time in force, and
all agreements between Borrower, Administrative Agent and Lenders, whether now
existing or hereafter arising and whether oral or written, are hereby expressly
limited so that in no contingency or event whatsoever, whether by acceleration
of maturity hereof or otherwise, shall the amount paid or agreed to be paid in
the aggregate to Lenders or to Administrative Agent on behalf of Lenders as
interest hereunder or under the other Loan Documents or in any other security
agreement given to secure the Obligations, or in any other document evidencing,
securing or pertaining to the Indebtedness evidenced hereby or thereby, exceed
the maximum amount permissible under applicable usury or such other laws (the
"Maximum Amount"). If under any circumstances whatsoever fulfillment of any
provision hereof, or of any of the other Loan Documents, at the time performance
of such provision shall be due, shall involve exceeding the Maximum Amount,
then, ipso facto, the obligation to be fulfilled shall be reduced to the Maximum
Amount. For the purposes of calculating the actual amount of interest paid
and/or payable hereunder in respect of laws pertaining to usury or such other
laws, all sums paid or agreed to be paid to Lenders for the use, forbearance or
detention of the Indebtedness of Borrower evidenced hereby, outstanding from
time to time shall, to the extent permitted by applicable law, be amortized, pro
rated, allocated and spread from the date of disbursement of the proceeds of the
relevant Loans until payment in full of all of such Indebtedness, so that the
actual rate of interest on account of such Indebtedness is uniform throughout
the term hereof. The terms and provisions of this subsection shall control and
supersede every other provision of all agreements between Borrower,
Administrative Agent and Lenders.
B. If under any circumstances Lenders shall receive an amount which
would exceed the Maximum Amount, such amount shall be deemed a payment in
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reduction of the principal amount of the applicable Loans and shall be treated
as a voluntary prepayment under subsection 2.4B(i), or if such amount exceeds
the unpaid balance of the applicable Loans and any other Indebtedness of
Borrower in favor of Lenders, the excess shall be deemed to have been a payment
made by mistake and shall be refunded to Borrower.
10.21 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Borrower and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
SECTION 11.
GUARANTY
11.1 GUARANTY.
In order to induce the Agents, the Issuing Bank and the Lenders
(collectively, the "GUARANTEED CREDITORS") to enter into this Agreement and to
extend credit hereunder and in recognition of the direct benefits to be received
by the Guarantors from the proceeds of the Loans and the issuance of the Letters
of Credit, the Guarantors hereby agree with the Guaranteed Creditors as follows:
each Guarantor hereby jointly and severally, unconditionally, absolutely and
irrevocably guarantees as primary obligor and not merely as a surety the full
and prompt payment when due, whether upon maturity, acceleration or otherwise,
of any and all of the Obligations of the Borrower to the Guaranteed Creditors.
If any or all of the Obligations of the Borrower to the Guaranteed Creditors
becomes due and payable hereunder, the Guarantors unconditionally and
irrevocably promise to pay such indebtedness to the Administrative Agent and/or
the other Guaranteed Creditors, or order, on demand, together with any and all
expenses which may be incurred by the Agents or the other Guaranteed Creditors
in collecting any of the Obligations. If claim is ever made upon any Guaranteed
Creditor for repayment or recovery of any amount or amounts received in payment
or on account of any of the Obligations and any of the aforesaid payees repays
all or part of said amount by reason of (i) any judgment, decree or order of any
court or administrative body having jurisdiction over such payee or any of its
property or (ii) any settlement or compromise of any such claim effected by
125
such payee with any such claimant (including the Borrower), then and in such
event the Guarantors agree that any such judgment, decree, order, settlement or
compromise shall be binding upon the Guarantors, notwithstanding any revocation
of this Guaranty or other instrument evidencing any liability of the Borrower,
and the Guarantors shall be and remain liable to the aforesaid payees hereunder
for the amount so repaid or recovered to the same extent as if such amount had
never originally been received by any such payee. The guaranty contained in this
Section 11 (the "GUARANTY") is a guaranty of payment, and not merely of
collection.
11.2 NATURE OF LIABILITY.
The liability of the Guarantors hereunder is exclusive and independent
of any security for or other guaranty of the Obligations of the Borrower whether
executed by the Guarantors, any other guarantor or by any other party, and the
liability of the Guarantors hereunder shall not be affected or impaired by (a)
any direction as to application of payment by the Borrower or by any other
party, (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the Obligations of the
Borrower, (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or change
in personnel by the Borrower.
11.3 ABSOLUTE AND INDEPENDENT OBLIGATION.
No invalidity, irregularity or unenforceability of all or any part of
the Obligations or of any security therefor shall affect, impair or be a defense
to this Guaranty and this Guaranty shall be a primary obligation of each
Guarantor, absolute and unconditional notwithstanding the occurrence of any
event or the existence of any other circumstances which might constitute a legal
or equitable discharge of a surety or guarantor except payment in full of the
Obligations. The obligations of the Guarantors hereunder are independent of the
obligations of any other guarantor, any other party or the Borrower, and a
separate action or actions may be brought and prosecuted against the Guarantors
or any of them whether or not action is brought against any other guarantor, any
other party or the Borrower and whether or not any other guarantor, any other
party or the Borrower be joined in any such action or actions. Any payment by
the Borrower or other circumstance which operates to toll any statute of
limitations as to the Borrower shall operate to toll the statute of limitations
as to the Guarantors.
11.4 AUTHORIZATION.
The Guarantors authorize the Guaranteed Creditors without notice or
demand (except as shall be required by applicable statute and cannot be waived),
and without affecting or impairing its liability hereunder, from time to time
to:
A. change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of the
126
Obligations (including any increase or decrease in the rate of interest or fees
thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the Guaranty herein made shall apply to the
Obligations as so changed, extended, renewed or altered;
B. take and hold security for the payment of the Obligations and sell,
exchange, release, impair, surrender, realize upon or otherwise deal with in any
manner and in any order any property by whomsoever at any time pledged or
mortgaged to secure, or howsoever securing, the Obligations or any liabilities
(including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and/or any offset there against;
C. exercise or refrain from exercising any rights against the Borrower,
any other Loan Party or others or otherwise act or refrain from acting;
D. release or substitute any one or more endorsers, guarantors, the
Borrower, other Loan Parties or other obligors;
▇. ▇▇▇▇▇▇ or compromise any of the Obligations, any security therefor
or any liability (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, and may subordinate the payment of all
or any part thereof to the payment of any liability (whether due or not) of the
Borrower to its creditors other than the Guaranteed Creditors;
F. apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Guaranteed Creditors regardless
of what liability or liabilities of the Borrower remain unpaid;
G. consent to or waive any breach of, or any act, omission or default
under, this Agreement, any other Loan Document or any of the instruments or
agreements referred to herein or therein, or otherwise amend, modify or
supplement this Agreement, any other Loan Document or any of such other
instruments or agreements; and/or
H. take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of the
Guarantors from their respective liabilities under this Guaranty.
11.5 RELIANCE.
It is not necessary for any Guaranteed Creditor to inquire into the
capacity or powers of the Borrower or any of the Guarantors or the officers,
directors, partners or agents acting or purporting to act on their behalf, and
any Obligations made or created in reliance upon the professed exercise of such
powers shall be guaranteed
127
hereunder.
11.6 SUBORDINATION.
Any indebtedness of the Borrower now or hereafter owing to the
Guarantors is hereby subordinated to the Obligations of the Borrower owing to
the Guaranteed Creditors; and if the Administrative Agent so requests at a time
when an Event of Default exists, all such indebtedness of the Borrower to the
Guarantors shall be collected, enforced and received by the Guarantors for the
benefit of the Guaranteed Creditors and be paid over to the Administrative Agent
on behalf of the Guaranteed Creditors on account of the Obligations of the
Borrower to the Guaranteed Creditors, but without affecting or impairing in any
manner the liability of the Guarantors under the other provisions of this
Guaranty. Prior to the transfer by the Guarantors of any note or negotiable
instrument evidencing any such indebtedness of the Borrower to any of the
Guarantors, the Guarantors shall ▇▇▇▇ such note or negotiable instrument with a
legend that the same is subject to this subordination. Without limiting the
generality of the foregoing, each Guarantor hereby agrees with the Guaranteed
Creditors that it will not exercise any right of subrogation which it may at any
time otherwise have as a result of this Guaranty (whether contractual, under
Section 509 of the Bankruptcy Code or otherwise) until all Obligations have been
irrevocably paid in full in cash.
11.7 WAIVERS.
A. Each Guarantor waives any right (except as shall be required by
applicable statute and cannot be waived) to require any Guaranteed Creditor to
(i) proceed against the Borrower, any other guarantor or any other party, (ii)
proceed against or exhaust any security held from the Borrower, any other
guarantor or any other party or (iii) pursue any other remedy in any Guaranteed
Creditor's power whatsoever. Each Guarantor waives any defense based on or
arising out of any defense of the Borrower, any other guarantor or any other
party, other than payment in full of the Obligations, based on or arising out of
the disability of the Borrower, any other guarantor or any other party, or the
validity, legality or unenforceability of the Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the Borrower
other than payment in full of the Obligations. The Guaranteed Creditors may, at
their election, foreclose on any security held by the Agents, the Collateral
Agents or any other Guaranteed Creditor by one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially reasonable
(to the extent such sale is permitted by applicable law), or exercise any other
right or remedy the Guaranteed Creditors may have against the Borrower or any
other party, or any security, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the Obligations have
been paid. Each Guarantor waives any defense arising out of any such election by
the Guaranteed Creditors, even though such election operates to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
each Guarantor against the Borrower or any other party or any security.
128
B. Each Guarantor waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
Obligations. Each Guarantor assumes all responsibility for being and keeping
itself informed of the Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Obligations and
the nature, scope and extent of the risks which each Guarantor assumes and
incurs hereunder, and agrees that no Guaranteed Creditor shall have no duty to
advise any of the Guarantors of information known to them regarding such
circumstances or risks.
C. Until such time as the Obligations have been paid in full in cash,
each Guarantor hereby waives all rights of subrogation which it may at any time
otherwise have as a result of this Guaranty (whether contractual, under Section
509 of the Bankruptcy Code, or otherwise) to the claims of the Guaranteed
Creditors against the Borrower or any other guarantor of the Obligations and all
contractual, statutory or common law rights of reimbursement, contribution or
indemnity from the Borrower or any other guarantor which it may at any time
otherwise have as a result of this Guaranty.
11.8 NATURE OF LIABILITY.
It is the desire and intent of each Guarantor and the Guaranteed
Creditors that this Guaranty shall be enforced against each Guarantor to the
fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. If, however, and to the extent
that, the obligations of the Guarantors under this Guaranty shall be adjudicated
to be invalid or unenforceable for any reason (including, without limitation,
because of any applicable state or federal law relating to fraudulent
conveyances or transfers), then the amount of the Guarantors' obligations under
this Guaranty shall be deemed to be reduced and the Guarantors shall pay the
maximum amount of the Obligations which would be permissible under applicable
law.
[Remainder of page intentionally left blank]
129
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers hereunto duly
authorized as of the date first written above.
BORROWER:
PRIME SUCCESSION, INC.
By:
Name:
Title:
Notice Address:
Olympic ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ Safer ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
130
GUARANTORS:
PRIME SUCCESSION HOLDINGS, INC.
By:
Name:
Title:
▇▇▇▇▇ CREMATION & BURIAL SERVICES, INC.
▇▇▇▇▇-CREMATION & BURIAL SERVICES P.C.
▇▇▇▇▇▇▇-▇▇▇▇ ENTERPRISES, INC.
BURY-PINE FUNERAL HOME, INC.
▇▇▇▇▇-▇▇▇▇▇▇ FUNERAL HOME, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & SONS, INC.,
COMMANDER FUNERAL HOME, INC.
CREMATION SOCIETY OF AMERICA, INCORPO
RATED
FRASER FUNERAL HOME, INC.
▇▇▇▇ ▇▇▇▇▇▇ MEMORIAL SERVICES, INC.,
▇▇▇▇▇▇▇▇▇ SIMI VALLEY MORTUARY, INC.
▇▇▇▇▇▇ FUNERAL CHAPEL
J&W, INC.
▇▇▇▇ ▇. ▇▇▇▇ COMPANY
▇▇▇▇▇▇▇ CORPORATION, INC.
MCWANE FAMILY FUNERAL HOME, INC.
▇▇▇▇-▇▇▇▇▇▇▇, INC.
PINE FUNERAL HOME, INC.
PRIME BUSINESS SOLUTIONS, INC.
PRIME BUSINESS SOLUTIONS OF KENTUCKY,
INC.
PRIME ENTERPRISES OF CALIFORNIA, INC.
PRIME HOLDINGS OF ARKANSAS, INC.
PRIME HOLDINGS OF CALIFORNIA, INC.
PRIME HOLDINGS OF MINNESOTA, INC.
PRIME HOLDINGS OF NEBRASKA, INC.
PRIME HOLDINGS OF OHIO, INC.
PRIME HOLDINGS OF WEST VIRGINIA, INC.
PRIME INDIANA LIMITED PARTNERSHIP
PRIME SUCCESSION OF ALABAMA, INC.
PRIME SUCCESSION OF ARIZONA, INC.
PRIME SUCCESSION OF ARKANSAS, INC.
PRIME SUCCESSION OF CALIFORNIA, INC.
PRIME SUCCESSION OF FLORIDA, INC.
131
PRIME SUCCESSION OF GEORGIA, INC.
PRIME SUCCESSION OF ILLINOIS, INC.
PRIME SUCCESSION OF IOWA, INC.
PRIME SUCCESSION OF KENTUCKY, INC.
PRIME SUCCESSION OF MINNESOTA, INC.
PRIME SUCCESSION OF MISSOURI, INC.
PRIME SUCCESSION OF NEBRASKA, INC.
PRIME SUCCESSION OF NEW YORK, INC.
PRIME SUCCESSION OF TENNESSEE, INC.
PRIME SUCCESSION OF TEXAS, INC.
PRIME SUCCESSION PARTNERS, INC.
ROSELAWN MEMORIAL GARDENS, INC.
▇▇▇▇▇▇ MORTUARY, INC.
TALISMAN ENTERPRISES, INC.
THE FUNERAL OUTLET STORE, INC.
WHITNEY & ▇▇▇▇▇▇ FUNERAL HOMES, INC.
WHITNEY & ▇▇▇▇▇▇ LIFE INSURANCE
AGENCY, INC.
By:
Name:
Title:
PRIME INDIANA LIMITED PARTNERSHIP
By: Prime Succession of Illinois, Inc., its
General Partner
By:
Name:
Title:
132
Notice Address:
Olympic Corporate Center
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
1285 Avenue of the Americas
New York, New York 10012-6064
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
133
AGENTS AND LENDERS:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.
as Syndication Agent and Lender
By:
Name:
Title:
Notice Addresses:
▇▇▇▇▇▇▇ Sachs Credit Partners L.P.
c/o Goldman, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
For Borrowings, Repayments and other asset servicing
notices:
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
For ongoing financial reporting information:
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
For amendments, waivers and other notices:
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
individually and as Administrative Agent
By:
Name:
Title:
Notice Address:
The Bank of Nova Scotia
Atlanta Agency
Suite 2700
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
135
SCHEDULE 2.1 TO
DEBTOR-IN-POSSESSION CREDIT AND GUARANTY AGREEMENT
LENDERS' COMMITMENTS AND PRO RATA SHARES
REVOLVING LOAN
LENDER COMMITMENT PRO-RATA SHARE
------ ---------- --------------
The Bank of Nova Scotia $ 4,000,000 50%
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit
Partners L.P. $ 4,000,000 50%
136
136
SCHEDULE 2.3B TO
DEBTOR-IN-POSSESSION CREDIT AND GUARANTY AGREEMENT
FACILITY FEES
LENDER FACILITY FEE
------ ------------
The Bank of Nova Scotia $ 80,000
▇▇▇▇▇▇▇ Sachs Credit Partners L.P. $ 80,000
137
137
SCHEDULE 4.1 TO
DEBTOR-IN-POSSESSION CREDIT AND GUARANTY AGREEMENT
--------------------------------------------------
CERTAIN SUBSIDIARIES
▇▇▇▇ ▇▇▇▇▇▇ MEMORIAL SERVICES, INC.
PRIME HOLDINGS OF CALIFORNIA, INC.
PRIME SUCCESSION OF ALABAMA, INC.
PRIME SUCCESSION OF CALIFORNIA, INC.
PRIME SUCCESSION OF ILLINOIS, INC.
PRIME SUCCESSION OF KENTUCKY, INC.
PRIME SUCCESSION OF TENNESSEE, INC.
▇▇▇▇▇▇▇-▇▇▇▇▇▇ FUNERAL HOMES, INC.
138