EXHIBIT 10.9
POST-PETITION LOAN AGREEMENT
Dated as of January 2, 2002
among
EACH OF THE FINANCIAL INSTITUTIONS PARTY HERETO,
as the Lenders,
BANK OF AMERICA, NATIONAL ASSOCIATION,
as the Administrative Agent,
PNC BANK, NATIONAL ASSOCIATION,
as the Documentation Agent,
and
METALS USA, INC.
and
CERTAIN OF ITS SUBSIDIARIES PARTY HERETO,
as the Borrowers
BANK OF AMERICA, NATIONAL ASSOCIATION
PNC BANK, NATIONAL ASSOCIATION
Co-Lead Arrangers and Co-Syndication Agents
TABLE OF CONTENTS
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ARTICLE 1 INTERPRETATION OF THIS AGREEMENT......................................................................1
Section 1.1 Definitions.................................................................................1
Section 1.2 Accounting Terms...........................................................................32
Section 1.3 Interpretive Provisions....................................................................32
ARTICLE 2 LOANS AND LETTERS OF CREDIT..........................................................................33
Section 2.1 Total Facility.............................................................................33
Section 2.2 Revolving Loans............................................................................33
Section 2.3 Letters of Credit and Credit Support.......................................................39
Section 2.4 Bank Products..............................................................................47
Section 2.5 Extension of Stated Termination Date.......................................................48
ARTICLE 3 INTEREST AND FEES....................................................................................48
Section 3.1 Interest...................................................................................48
Section 3.2 Maximum Interest Rate......................................................................49
Section 3.3 Unused Line Fee............................................................................50
Section 3.4 Letter of Credit Fee.......................................................................50
Section 3.5 Facility Fee...............................................................................51
Section 3.6 Other Fees.................................................................................51
ARTICLE 4 PAYMENTS AND PREPAYMENTS.............................................................................51
Section 4.1 Revolving Loans............................................................................51
Section 4.2 Reduction of Commitments; Termination of Facility..........................................51
Section 4.3 Payments and Prepayments from Collections and Dispositions.................................52
Section 4.4 Payments by the Borrowers..................................................................54
Section 4.5 Payments as Revolving Loans................................................................54
Section 4.6 Apportionment, Application, and Reversal of Payments.......................................54
Section 4.7 Indemnity for Returned Payments............................................................55
Section 4.8 The Agent's and the Lenders' Books and Records; Monthly Statements.........................55
ARTICLE 5 TAXES AND YIELD PROTECTION...........................................................................56
Section 5.1 Taxes......................................................................................56
Section 5.2 Increased Costs and Reduction of Return....................................................57
Section 5.3 Certificates of Lenders....................................................................57
Section 5.4 Survival...................................................................................57
Section 5.5 Claims Under Section 5.1...................................................................57
Section 5.6 Replacement of Affected Lender.............................................................57
ARTICLE 6 COLLATERAL...........................................................................................58
Section 6.1 Security Interest..........................................................................58
Section 6.2 Perfection and Protection of Security Interest.............................................59
Section 6.3 Location of Collateral.....................................................................61
Section 6.4 Title to, Liens on, and Sale and Use of Collateral.........................................61
Section 6.5 Appraisals.................................................................................62
Section 6.6 Access and Examination; Confidentiality....................................................62
Section 6.7 Collateral Reporting.......................................................................63
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Section 6.8 Accounts...................................................................................63
Section 6.9 Collection of Accounts; Payments...........................................................65
Section 6.10 Inventory; Perpetual Inventory.............................................................65
Section 6.11 Equipment and Real Estate..................................................................66
Section 6.12 Documents, Instruments, and Chattel Paper..................................................66
Section 6.13 Right to Cure..............................................................................67
Section 6.14 Power of Attorney..........................................................................67
Section 6.15 The Agent's and the Lenders' Rights, Duties, and Liabilities...............................67
Section 6.16 Site Visits, Observations and Testing......................................................68
Section 6.17 Guaranties; Third Party Joinder............................................................68
Section 6.18 Voting Rights, Distributions, Etc. in Respect of Investment Property.......................69
Section 6.19 Revised UCC Article 9......................................................................70
ARTICLE 7 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES....................................................71
Section 7.1 Books and Records..........................................................................71
Section 7.2 Financial Information......................................................................72
Section 7.3 Notices to the Lenders.....................................................................74
Section 7.4 Revisions or Updates to Schedules..........................................................76
ARTICLE 8 GENERAL WARRANTIES AND REPRESENTATIONS...............................................................77
Section 8.1 Authorization, Validity, and Enforceability of this Agreement
and the Loan Documents; No Conflicts.......................................................77
Section 8.2 Validity and Priority of Security Interest.................................................77
Section 8.3 Organization and Qualification.............................................................78
Section 8.4 Corporate Name; Prior Transactions.........................................................78
Section 8.5 Subsidiaries...............................................................................78
Section 8.6 Financial Statements.......................................................................78
Section 8.7 Solvency...................................................................................78
Section 8.8 Debt.......................................................................................78
Section 8.9 Distributions..............................................................................79
Section 8.10 Title to Property..........................................................................79
Section 8.11 Real Estate; Leases........................................................................79
Section 8.12 Proprietary Rights.........................................................................79
Section 8.13 Trade Names................................................................................79
Section 8.14 Litigation.................................................................................79
Section 8.15 Restrictive Agreements.....................................................................80
Section 8.16 Labor Matters..............................................................................80
Section 8.17 Environmental Matters......................................................................80
Section 8.18 No Violation of Law........................................................................81
Section 8.19 No Default.................................................................................81
Section 8.20 ERISA Compliance...........................................................................81
Section 8.21 Taxes......................................................................................82
Section 8.22 Regulated Entities.........................................................................82
Section 8.23 Use of Proceeds; Margin Regulations........................................................82
Section 8.24 No Material Adverse Change.................................................................82
Section 8.25 Full Disclosure............................................................................82
Section 8.26 Material Agreements........................................................................83
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Section 8.27 Bank Accounts..............................................................................83
Section 8.28 Governmental Authorization.................................................................83
Section 8.29 Investment Property........................................................................83
Section 8.30 Common Enterprise..........................................................................83
ARTICLE 9 AFFIRMATIVE AND NEGATIVE COVENANTS...................................................................84
Section 9.1 Taxes and Other Obligations................................................................84
Section 9.2 Existence and Good Standing................................................................84
Section 9.3 Compliance with Law and Agreements; Maintenance of Licenses................................84
Section 9.4 Maintenance of Property....................................................................85
Section 9.5 Insurance..................................................................................85
Section 9.6 Condemnation...............................................................................86
Section 9.7 Environmental Laws.........................................................................86
Section 9.8 Compliance with ERISA......................................................................87
Section 9.9 Mergers, Consolidations, Sales, Acquisitions...............................................87
Section 9.10 Distributions; Capital Change; Restricted Investments; Loans...............................88
Section 9.11 Transactions Affecting Collateral or Obligations...........................................88
Section 9.12 Guaranties.................................................................................88
Section 9.13 Debt.......................................................................................88
Section 9.14 Prepayment of Debt.........................................................................88
Section 9.15 Transactions with Affiliates...............................................................88
Section 9.16 Investment Banking and Finder's Fees.......................................................88
Section 9.17 Business Conducted.........................................................................88
Section 9.18 Liens......................................................................................89
Section 9.19 Sale and Leaseback Transactions............................................................89
Section 9.20 New Subsidiaries...........................................................................89
Section 9.21 Fiscal Year................................................................................89
Section 9.22 Capital Expenditures.......................................................................89
Section 9.23 Operating Lease Obligations................................................................89
Section 9.24 Fixed Charge Coverage Ratio................................................................90
Section 9.25 Minimum Average Availability...............................................................90
Section 9.26 Use of Proceeds............................................................................90
Section 9.27 Further Assurances.........................................................................90
Section 9.28 Bank and Documentation Agent as Depository.................................................91
Section 9.29 THIS SECTION IS RESERVED...................................................................91
Section 9.30 DIP Financing..............................................................................91
Section 9.31 Alteration of Rights of Lenders............................................................91
Section 9.32 Chapter 11 Claims..........................................................................91
Section 9.33 Minimum Net Proceeds.......................................................................91
Section 9.34 Carve-Out..................................................................................91
Section 9.35 Equipment Sublimit Reductions..............................................................91
Section 9.36 Cash Applied to Loan.......................................................................92
Section 9.37 Inventory Valuation........................................................................92
Section 9.38 Real Estate Taxes..........................................................................92
Section 9.39 Directors and Officers Insurance...........................................................92
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ARTICLE 10 CONDITIONS OF LENDING...............................................................................92
Section 10.1 Conditions Precedent to Making of Revolving Loans
on the Closing Date........................................................................92
Section 10.2 Conditions Precedent to Each Revolving Loan................................................95
ARTICLE 11 DEFAULT AND REMEDIES................................................................................96
Section 11.1 Events of Default..........................................................................96
Section 11.2 Remedies...................................................................................99
ARTICLE 12 TERM AND TERMINATION...............................................................................102
Section 12.1 Term and Termination......................................................................102
ARTICLE 13 AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS.......................................102
Section 13.1 No Waivers; Cumulative Remedies...........................................................102
Section 13.2 Amendments and Waivers....................................................................102
Section 13.3 Assignments; Participations...............................................................103
ARTICLE 14 THE AGENT..........................................................................................105
Section 14.1 Appointment and Authorization.............................................................105
Section 14.2 Delegation of Duties......................................................................106
Section 14.3 Liability of the Agent....................................................................106
Section 14.4 Reliance by the Agent.....................................................................107
Section 14.5 Notice of Default.........................................................................107
Section 14.6 Credit Decision...........................................................................107
Section 14.7 Indemnification...........................................................................108
Section 14.8 The Agent in Individual Capacity..........................................................108
Section 14.9 Successor Agent...........................................................................109
Section 14.10 Withholding Tax...........................................................................109
Section 14.11 Co-Agents.................................................................................111
Section 14.12 Collateral Matters........................................................................111
Section 14.13 Restrictions on Actions by Lenders; Sharing of Payments...................................112
Section 14.14 Agency for Perfection.....................................................................112
Section 14.15 Payments by the Agent to the Lenders......................................................113
Section 14.16 Concerning the Collateral and the Related Loan Documents..................................113
Section 14.17 Field Audit and Examination Reports; Disclaimer by Lenders................................113
Section 14.18 Relation Among Lenders....................................................................114
ARTICLE 15 MISCELLANEOUS......................................................................................114
Section 15.1 Cumulative Remedies; No Prior Recourse to Collateral......................................114
Section 15.2 Severability..............................................................................114
Section 15.3 Governing Law; Choice of Forum............................................................114
Section 15.4 Waiver of Jury Trial......................................................................115
Section 15.5 Survival of Representations and Warranties................................................115
Section 15.6 Other Security and Guaranties.............................................................116
Section 15.7 Fees and Expenses.........................................................................116
Section 15.8 Notices...................................................................................116
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Section 15.9 Waiver of Notices.........................................................................118
Section 15.10 Binding Effect............................................................................118
Section 15.11 Indemnity of the Agent and the Lenders by the Borrowers...................................118
Section 15.12 Limitation of Liability...................................................................119
Section 15.13 Final Agreement...........................................................................120
Section 15.14 Counterparts..............................................................................120
Section 15.15 Captions..................................................................................120
Section 15.16 Right of Set-off..........................................................................120
Section 15.17 Joint and Several Liability...............................................................120
Section 15.18 Contribution and Indemnification among the Borrowers......................................122
Section 15.19 Agency of the Parent for Each Other Borrower..............................................122
Section 15.20 Additional Borrowers......................................................................123
Section 15.21 Express Waivers By Borrowers In Respect of Cross Guaranties
and Cross Collateralization...............................................................123
Section 15.22 Designated Senior Debt....................................................................124
Schedules:
Schedule 1.1(A) - Permitted Liens
Schedule 1.1(B) - Permitted Investments
Schedule 1.1(C) - Loan Value of Real Estate
Schedule 6.3 - Location of Collateral
Schedule 6.7 - Information Contained in Monthly Reports
Schedule 8.3 - Organization and Qualification
Schedule 8.4 - Corporate Names
Schedule 8.5 - Subsidiaries
Schedule 8.8 - Debt
Schedule 8.11 - Real Estate; Leases
Schedule 8.12 - Proprietary Rights
Schedule 8.13 - Trade Names
Schedule 8.14 - Litigation
Schedule 8.16 - Labor Matters
Schedule 8.17 - Environmental Matters
Schedule 8.20 - ERISA Matters
Schedule 8.26 - Material Agreements
Schedule 8.27 - Bank Accounts
Schedule 8.29 - Investment Property
Exhibits:
Exhibit A - Form of Revolving Note
Exhibit B - Form of Borrowing Base Certificate
Exhibit C - Form of Notice of Borrowing
Exhibit D - Budget
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Form of Compliance Certificate
v
POST-PETITION LOAN AGREEMENT
This
Post-Petition Loan Agreement, dated as of January 2, 2002, among the
financial institutions listed on the signature pages hereof (such financial
institutions, together with their respective successors and assigns, are
referred to hereinafter each individually as a "LENDER" and collectively as the
"LENDERS"), Bank of America, National Association with an office located at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, as administrative agent for the
Lenders (in its capacity as administrative agent, the "AGENT"), and Metals USA,
Inc., a Delaware corporation, and each of its Subsidiaries party hereto.
W I T N E S S E T H
A. On November 14, 2001 (the "FILING DATE"), the Borrowers (as herein
defined) filed with the Bankruptcy Court (as herein defined) a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (as herein defined);
B. The Borrowers have requested the Lenders to make available to the
Borrowers a revolving line of credit for DIP Loans (as herein defined) and
letters of credit in an aggregate amount of $350,000,000 which extensions of
credit the Borrowers will use for the purposes set forth in SECTION 9.26.
C. The Lenders have agreed to make available to the Borrowers such credit
facility upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth in this Agreement, and for good and valuable consideration, the
receipt of which is hereby acknowledged, the Lenders, the Agent, and the
Borrowers hereby agree as follows.
ARTICLE 1
INTERPRETATION OF THIS AGREEMENT
Section 1.1 DEFINITIONS. As used herein:
"ACCOUNT" means, with respect to a Person, any of such Person's now owned
and hereafter acquired or arising accounts, as defined in the UCC, including any
rights to payment for the sale or lease of goods or rendition of services,
whether or not they have been earned by performance, and "ACCOUNTS" means, with
respect to any such Person, all of the foregoing.
"ACCOUNT DEBTOR" means each Person obligated on an Account.
"ACH TRANSACTIONS" means any cash management or related services including
the automated clearing house transfer of funds by the Bank or the Documentation
Agent for the account of any Borrower pursuant to agreement or overdrafts.
POST-PETITION LOAN AGREEMENT - Page 1
"ADJUSTED NET INCOME" means, as applied to any Person (the "subject
Person"), the Net Income of the subject Person for the period in question,
PROVIDED that there shall be excluded:
(a) the net income (or net loss) of any Person accrued prior to
the date it becomes a Subsidiary of, or is merged into or consolidated
with, the subject Person or a consolidated Subsidiary of the subject
Person;
(b) any net gains or losses on the sale or other disposition,
not in the ordinary course of business, of investments and other capital
assets, PROVIDED that there shall also be excluded any related charges for
taxes thereon;
(c) any net gain arising from the collection of the proceeds of
any insurance policy;
(d) any write-up or write-down of any asset;
(e) costs of professional advisors to the Borrowers (for the
professional advisors to the Borrowers, the Agent, the Lenders and the
creditors' committee) in the Bankruptcy Case up to an amount of $3,000,000
in any rolling three-month period; and
(f) any other extraordinary item, as determined according to GAAP.
"AFFILIATE" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person or which owns, directly or indirectly, ten percent (10.0%) or more
of the outstanding equity interest of such Person. A Person shall be deemed to
control another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of the other Person, whether through the ownership of voting
securities, by contract, or otherwise.
"AGENT" means the Bank, solely in its capacity as the administrative agent
for the Lenders, and any successor administrative agent.
"AGENT ADVANCES" has the meaning specified in SECTION 2.2(g).
"AGENT'S LIENS" means the Liens in the Collateral granted to the Agent, for
the benefit of the Lenders, the Bank, the Documentation Agent, and the Agent,
pursuant to this Agreement and the other Loan Documents.
"AGENT-RELATED PERSONS" means the Agent, together with its Affiliates, and
the officers, directors, employees, agents, and attorneys-in-fact of the Agent
and its Affiliates.
"AGGREGATE PRE-PETITION OUTSTANDINGS" means as of any date of
determination, the aggregate unpaid balance of the Pre-Petition Obligations.
"AGREEMENT" means this
Post-Petition Loan Agreement as it may be amended or
otherwise modified from time to time.
POST-PETITION LOAN AGREEMENT - Page 2
"ANNIVERSARY DATE" means a yearly (twelve-month) anniversary of the Closing
Date.
"ANNUAL AGENT FEE" means $150,000.
"APPLICABLE MARGIN" means two percent (2.0%)
"APPRAISED VALUE OF EQUIPMENT" means the orderly liquidation value of the
Borrower's Equipment as reflected in the December 18, 2001, appraisal prepared
by ▇▇▇▇▇-▇▇▇▇▇▇ Appraisal Corporation for the Agent.
"ASSIGNEE" has the meaning specified in SECTION 13.3(a).
"ASSIGNMENT AND ACCEPTANCE" has the meaning specified in SECTION 13.3(a).
"ATTORNEY COSTS" means and includes all reasonable and customary fees,
expenses, and disbursements of any law firm or other counsel engaged by the
Agent, the allocated costs of internal legal services of the Agent or any
Lender, and the reasonable expenses of internal counsel to the Agent.
Additionally, "Attorney Costs" includes up to $100,000 in the aggregate for
reasonable attorneys' fees for counsel to PNC National Association and Fleet
Capital Corporation, combined, in connection with any Post-Petition and
Post-Closing Date legal services performed by such counsel.
"AVAILABLE CREDIT" means, at any time, (a) the Borrowing Base MINUS (b) (i)
the Post-Petition Revolver Outstandings, and (ii) the Aggregate Pre-Petition
Outstandings.
"AVAILABILITY" means, at any time, (a) the Borrowing Base, calculated
pursuant to CLAUSE (b) of the definition of Borrowing Base, MINUS (b) (i) the
Post-Petition Revolver Outstandings, and (ii) the Aggregate Pre-Petition
Outstandings.
"BANK" means Bank of America, National Association, a national banking
association, or any successor entity thereto.
"BANK PRODUCTS" means any one or more of the following types of services or
facilities extended to any Borrower by the Bank, the Documentation Agent, or any
Affiliate of the Bank or the Documentation Agent in reliance on the Bank's or
the Documentation Agent's, as applicable, agreement to indemnify such Affiliate:
(a) credit cards, (b) ACH Transactions, (c) Hedge Agreements, (d) treasury
management services, and (e) foreign exchange contracts.
"BANK PRODUCT RESERVES" means all reserves which the Agent or the
Documentation Agent from time to time establishes in its sole discretion for the
Bank Products then provided or outstanding.
"BANKRUPTCY CASES" means, the Chapter 11 Cases or any conversion of the
same to any other case under the Bankruptcy Code, each of which being a
"BANKRUPTCY CASE" as to any Borrower.
"BANKRUPTCY CODE" means Title 11 of the United States Code (11 U.S.C.
Section 101 ET SEQ.).
POST-PETITION LOAN AGREEMENT - Page 3
"BANKRUPTCY COURT" means the United States Bankruptcy Court for the
Southern District of
Texas, Houston,
Texas, or such other court as shall have
jurisdiction over the Chapter 11 Cases.
"BASE RATE" means, for any day, the rate of interest in effect for such day
as publicly announced from time to time by the Bank in Charlotte, North Carolina
as its "prime rate" (the "prime rate" being a rate set by the Bank based upon
various factors including the Bank's costs and desired return, general economic
conditions, and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate). Any change
in the prime rate announced by the Bank shall take effect at the opening of
business on the day specified in the public announcement of such change. Each
Interest Rate based upon the Base Rate shall be adjusted simultaneously with any
change in the Base Rate.
"BLOCKED ACCOUNT" means any deposit/collection account established pursuant
to a Blocked Account Agreement; collectively, such accounts are referred to as
the "BLOCKED ACCOUNTS."
"BLOCKED ACCOUNT AGREEMENT" means an agreement among one or more of the
Borrowers, the Agent, and a Clearing Bank, in form and substance satisfactory to
the Agent, concerning the collection of payments which represent the proceeds of
Accounts and other Collateral of a Borrower.
"BORROWER" means, separately and individually, any of the Parent, Aerospace
Specification Metals, Inc., Aerospace Specification Metals-U.K., Inc., Allmet
Building Products, L.P., Allmet GP, Inc., Allmet LP, Inc., Cornerstone Building
Products, Inc., Cornerstone Metals Corporation, Cornerstone Patio Concepts,
L.L.C., ▇▇▇▇▇▇ Titanium, Ltd., Interstate Steel Supply Company of Maryland,
Intsel GP, Inc., Intsel LP, Inc., i-Solutions Direct, Inc., ▇▇▇▇▇▇▇▇ Real Estate
Corporation, ▇▇▇▇▇▇▇▇ Steel GP, Inc., ▇▇▇▇▇▇▇▇ Steel LP, Inc., Metalmart, Inc.,
Metal Ventures, L.L.C., Metals Aerospace International, Inc., Metals Receivables
Corporation, Metals USA Building Products Southeast, Inc., Metals USA Carbon
Flat Rolled, Inc., Metals USA Finance Corp., Metals USA Flat Rolled Central,
Inc., Metals USA Management Co., L.P., Metals USA Plates and Shapes
Northcentral, Inc., Metals USA Plates and Shapes Northeast, L.P., Metals USA
Plates and Shapes Southcentral, Inc., Metals USA Plates and Shapes Southeast,
Inc., Metals USA Plates and Shapes Southwest, Limited Partnership, Metals USA
Realty Company, Metals USA Specialty Metals Northcentral, Inc., Metals USA
Specialty Metals Northwest, Inc., MUSA GP, Inc., MUSA LP, Inc., National
Manufacturing, Inc., Queensboro, L.L.C.,
Texas Aluminum Industries, Inc., Valley
Aluminum Co., Valley Aluminum of Nevada, Inc., Western Awning Company,
▇▇▇▇▇▇-▇▇▇▇▇▇ Steel Corporation, WSS Transportation, Inc., and any other Person
who becomes a party to this Agreement as a "Borrower" pursuant to the terms
hereof, jointly, severally, and collectively, and "BORROWERS" means more than
one or all of the foregoing Persons, jointly, severally, and collectively, as
the context requires.
"BORROWING" means a borrowing hereunder consisting of Revolving Loans made
on the same day by the Lenders, or by the Agent (in the case of a Borrowing
consisting of an Agent Advance) to a Borrower, or the issuance of Letters of
Credit or Credit Support hereunder.
POST-PETITION LOAN AGREEMENT - Page 4
"BORROWING BASE" means, at any time, an amount equal to the lesser of
(a) the Maximum Revolver Amount or
(b) the sum of
(i) eighty-five percent (85.0%) of the Net Amount of Eligible
Accounts, PLUS
(ii) sixty percent (60.0%) of GAAP Value of Eligible Plates
and Shapes Inventory, PLUS
(iii) sixty percent (60.0%) of the GAAP Value of Eligible Flat
Rolled Inventory, PLUS
(iv) sixty percent (60.0%) of the GAAP Value of Eligible
Aerospace Inventory, PLUS
(v) fifty percent (50.0%) of GAAP Value of Eligible Specialty
Metals Inventory, PLUS
(vi) twenty six and one-half percent (26.50%) of the GAAP
Value of Eligible Building Products Inventory, plus
(viii) the Equipment Sublimit, PLUS
(ix) the Real Estate Sublimit, MINUS
(x) the sum of
(A) reserves for accrued and unpaid interest on the
Obligations,
(B) the Environmental Compliance Reserve,
(C) the Bank Product Reserves, and
(D) the Professionals Fees Reserve, and
(E) the Inventory Value Reserve, which the Agent will
impose ONLY whenever the Agent has a reasonable
basis for believing that a material change has
occurred in the market value of the Borrower's
Eligible Inventory, and ONLY during such periods
when the Inventory Valuation Adjustment Percentage
is equal to or greater than fifteen percent (15.0%),
and
(F) all other reserves which the Agent deems necessary
in the exercise of its reasonable credit judgment to
maintain with
POST-PETITION LOAN AGREEMENT - Page 5
respect to any Borrower, including without
limitation, reserves for any amounts which the Agent
or any Lender may be obligated to pay in the future
for the account of any Borrower.
"BORROWING BASE CERTIFICATE" means a certificate by a Responsible Officer
of the Parent, substantially in the form of EXHIBIT B (or another form
acceptable to the Agent) setting forth the calculation of the Borrowing Base,
including a calculation of each component thereof (including, to the extent a
Borrower has received notice of any such reserve from the Agent, any of the
reserves included in such calculation pursuant to CLAUSE (b)(x) of the
definition of Borrowing Base), all in such detail as shall be reasonably
satisfactory to the Agent. All calculations of the Borrowing Base in connection
with the preparation of any Borrowing Base Certificate shall originally be made
by the Parent and certified to the Agent; PROVIDED that the Agent shall have the
right to review and adjust, in the exercise of its reasonable credit judgment,
any such calculation (a) to reflect its reasonable estimate of declines in value
of any of the Collateral described therein, and (b) to the extent that such
calculation is not in accordance with this Agreement.
"BUDGET" means as to the Borrower, the consolidated monthly financial
projections attached hereto as EXHIBIT D, or such subsequent budget as may be
provided pursuant to SECTION 2.5.
"BUILDING PRODUCTS BORROWER" means each of Allmet Building Products, Inc.,
Allmet GP, Inc., Allmet LP, Inc., Cornerstone Building Products, Inc.,
Cornerstone Metals Corporation, Cornerstone Patio Concepts, L.L.C., Metals USA
Building Products Southeast, Inc., National Manufacturing, Inc.,
Texas Aluminum
Industries, Inc., Valley Aluminum Co., Valley Aluminum of Nevada, Inc., Western
Awning Company, Inc., and any other Subsidiary of the Parent designated in
writing to the Agent by the Parent as a Building Products Borrower and which is
engaged in substantially the same line of business as the then existing Building
Products Borrowers.
"BUSINESS DAY" means any day that is not a Saturday, Sunday, or a day on
which banks in Dallas,
Texas, or Charlotte, North Carolina are required or
permitted to be closed.
"CAPITAL ADEQUACY REGULATION" means any guideline, request, or directive of
any central bank or other Governmental Authority, or any other law, rule, or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.
"CAPITAL EXPENDITURES" means expenditures (whether paid in cash or by
entering into any Debt, including any Capital Leases) required to be included in
or reflected by the property, plant, equipment, or similar fixed asset accounts
reflected in the consolidated balance sheet of the Parent and its Subsidiaries,
excluding expenditures incurred (a) in connection with Permitted Acquisitions,
by the Parent and its Subsidiaries that, in accordance with GAAP, and (b) to
replace, repair, restore, or rebuild any Fixed Assets which are the subject of
any loss, damage, or destruction to the extent such expenditures are paid from,
or have been reimbursed by proceeds of, a policy of insurance.
POST-PETITION LOAN AGREEMENT - Page 6
"CAPITAL LEASE" means, with respect to any Person, any lease of property
which, in accordance with GAAP, should be reflected as a capital lease on a
balance sheet of such Person.
"CAPITAL STOCK" means any and all corporate stock, units, shares,
partnership interests, membership interests, equity interests, rights,
securities, or other equivalent evidences of ownership (however designated)
issued by any Person.
"CARVE OUT" has the meaning given such term in the Interim Order.
"CHANGE OF CONTROL" means the occurrence of any of the following: (a)
except as allowed by SECTION 9.9, the adoption of a plan relating to the
liquidation or dissolution of the Parent or any other Borrower; (b) the
acquisition by any Person or group (as such term is used in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended) of a direct or indirect
majority in interest (more than fifty percent (50.0%)) of the voting power of
the voting stock of the Parent by way of merger or consolidation or otherwise;
(c) during any period of twelve (12) consecutive calendar months, individuals
(i) who were members of the Management Group of the Parent on the first day of
such period, or (ii) whose election or nomination for election to the Management
Group of the Parent was recommended or approved by at least a majority of the
Management Group then still in office who were members of the Management Group
of the Parent on the first day of such period, or whose election or nomination
for election was so approved, shall cease to constitute a majority of the
Management Group of the Borrower; or (d) except as allowed by SECTION 9.9, any
Borrower (other than the Parent) shall cease to be a Wholly-Owned Subsidiary of
the Parent.
"CHAPTER 11 CASES" means the voluntary bankruptcy cases of the Parent and
the other Borrowers under Case Nos. 01-425300-H4-11 through 01-42573-H4-11 in
the Bankruptcy Court.
"CLEARING BANK" means the Bank, the Documentation Agent, or any other
banking institution with whom a Payment Account has been established pursuant to
a Blocked Account Agreement.
"CLOSING DATE" means the date of this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute, and the regulations promulgated thereunder.
"COLLATERAL" has the meaning specified in SECTION 6.1.
"COMMITMENT" means, at any time with respect to a Lender, the principal
amount set forth beside such Lender's name under the heading "COMMITMENT" on the
signature pages of this Agreement or on the signature page of the Assignment and
Acceptance pursuant to which such Lender became a Lender hereunder, or the most
recent Assignment and Acceptance such Lender is a party to, in accordance with
the provisions of SECTION 13.3, and "COMMITMENTS" means, collectively, the
aggregate amount of the Commitments of all of the Lenders.
"COMPLIANCE CERTIFICATE" has the meaning specified in SECTION 7.2(d).
POST-PETITION LOAN AGREEMENT - Page 7
"CONSUMMATION DATE" with respect to a plan of reorganization for one or
more of the Borrowers proposed pursuant to Section 1121 ET SEQ. of the
Bankruptcy Code, as the case may be, the earlier of the date on which (i) the
effective date of such plan of reorganization occurs, or (ii) "substantial
consummation" (as defined in Section 1101(2) of the Bankruptcy Code) of the plan
of reorganization occurs.
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in any form or condition, polychlorinated biphenyls
("PCBs"), or any constituent of any such substance or waste.
"COPYRIGHT, PATENT, AND TRADEMARK AGREEMENTS" means each Copyright Security
Agreement, Patent Security Agreement, and Trademark Security Agreement executed
and delivered by a Borrower to the Agent to evidence and perfect the Agent's
security interest in such Borrower's present and future copyrights, patents,
trademarks, and related licenses and rights, for the benefit of the Agent and
the Lenders.
"CREDIT SUPPORT" has the meaning specified in SECTION 2.3(a).
"DEBT" means, without duplication, with respect to any Person (the "subject
Person"), all indebtedness, liabilities, and obligations of the subject Person
of any kind or nature, now or hereafter owing, arising, due, or payable,
howsoever evidenced, created, incurred, acquired, or owing, whether primary,
secondary, direct, contingent, fixed, or otherwise, and including, without in
any way limiting the generality of the foregoing: (a) indebtedness, liabilities,
and obligations to trade creditors; (b) in the case of a Borrower, all
Obligations; (c) all indebtedness, liabilities, and obligations of any other
Person, whether or not owed by the subject Person, secured by any Lien on the
subject Person's property, even though the subject Person shall not have assumed
or become liable for the payment thereof; PROVIDED, HOWEVER, that all such
indebtedness, liabilities, and obligations which are limited in recourse to such
property shall be included in Debt only to the extent of the book value of such
property as would be shown on a balance sheet of the subject Person prepared in
accordance with GAAP; (d) all indebtedness, liabilities, and obligations created
or arising under any Capital Lease or conditional sale or other title retention
agreement with respect to property used or acquired by the subject Person, even
if the rights and remedies of the lessor, seller, or lender thereunder are
limited to repossession of such property; PROVIDED, HOWEVER, that all such
indebtedness, liabilities, and obligations which are limited in recourse to such
property shall be included in Debt only to the extent of the book value of such
property as would be shown on a balance sheet of the subject Person prepared in
accordance with GAAP; and (e) all indebtedness, liabilities, and obligations
under Guaranties.
"DEFAULT" means any event or circumstance which, with the giving of notice,
the lapse of time, or both, would (if not cured, waived, or otherwise remedied
during such time) constitute an Event of Default.
"DEFAULT RATE" means a fluctuating per annum interest rate at all times
equal to the sum of (a) the otherwise applicable Interest Rate PLUS (b) two
percent (2.0%). Each Default Rate shall be adjusted simultaneously with any
change in the applicable Interest Rate. In addition, with
POST-PETITION LOAN AGREEMENT - Page 8
respect to Letters of Credit and Credit Support, the Default Rate shall mean the
Letter of Credit Fee Percentage, PLUS two percent (2.0%).
"DEFAULTING LENDER" has the meaning specified in SECTION 2.2(f)(ii).
"DIP LOANS" means all of the "Revolving Loans" as defined in Section 2.2,
including the Letters of Credit.
"DIP FINANCING DOCUMENTS" means, collectively, this Agreement, all Letters
of Credit, and all other orders, instruments, documents and other agreements
(executed by the Borrowers, the Agent, the Lenders, or the Borrowers and the
agent or the Lenders) in connection with or as required by this Agreement or
such orders.
"DISPOSITION" means any sale, transfer, assignment, sale/leaseback, pledge,
refinancing or other conveyance or hypothecation.
"DISTRIBUTION" means, with respect to any Person: (a) the payment or making
of any dividend or other distribution of property in respect of such Person's
Capital Stock (or any options or warrants for, or other rights with respect to,
such Capital Stock), other than distributions solely in such Person's Capital
Stock (or any options or warrants for, or other rights with respect to, such
Capital Stock) of the same class; or (b) the redemption or other acquisition by
such Person of any Capital Stock (or any options or warrants for, or other
rights with respect to, such Capital Stock).
"DOCUMENTATION AGENT" means PNC Bank, National Association, a national
banking association.
"DOL" means the United States Department of Labor or any successor
department or agency.
"DOLLAR" and "$" means dollars in the lawful currency of the United States.
"EBITDA" means, for any period, the sum of Adjusted Net Income, PLUS, the
sum of the following to the extent deducted in the determination of Adjusted Net
Income, without duplication: (a) the amount, if any, by which Interest Expense
exceeds interest income; PLUS (b) income and franchise taxes; PLUS (c)
depreciation and amortization expense.
"ELIGIBLE ACCOUNTS" means the Pre-Petition Accounts and Post-Petition
Accounts of a Borrower which the Agent in the exercise of its reasonable
discretion determines to be Eligible Accounts. Without limiting the discretion
of the Agent to establish other criteria of ineligibility, Eligible Accounts
shall not, unless the Agent in its sole discretion elects, include any Account:
(a) with respect to which more than one hundred twenty (120) days
have elapsed since the date of the original invoice therefor or which is
more than sixty (60) days past due;
POST-PETITION LOAN AGREEMENT - Page 9
(b) with respect to which any of the representations, warranties,
covenants, and agreements contained in SECTION 6.8 are not or have ceased
to be complete and correct or have been breached;
(c) with respect to which Account (or any other Account due from
such Account Debtor), in whole or in part, a check, promissory note, draft,
trade acceptance, or other instrument for the payment of money has been
received, presented for payment, and returned uncollected for any reason;
(d) which represents a progress billing; PROVIDED that for the
purposes hereof, "progress billing" means any invoice for goods sold or
leased or services rendered under a contract or agreement pursuant to which
the Account Debtor's obligation to pay such invoice is conditioned upon
such Borrower's completion of any further performance under the contract or
agreement;
(e) with respect to which any one or more of the following events
has occurred to the Account Debtor on such Account: (i) death or judicial
declaration of incompetency of an Account Debtor who is an individual; (ii)
the filing by or against the Account Debtor of a request or petition for
liquidation, reorganization, arrangement, adjustment of debts, adjudication
as a bankrupt, winding-up, or other relief under the bankruptcy,
insolvency, or similar laws of the United States, any state or territory
thereof, or any foreign jurisdiction, now or hereafter in effect; (iii) the
making of any general assignment by the Account Debtor for the benefit of
creditors; (iv) the appointment of a receiver or trustee for the Account
Debtor or for any of the assets of the Account Debtor, including, without
limitation, the appointment of or taking possession by a "custodian," as
defined in the Bankruptcy Code; (v) the institution by or against the
Account Debtor of any other type of insolvency proceeding (under the
Bankruptcy Code or otherwise) or of any formal or informal proceeding for
the dissolution or liquidation of, settlement of claims against, or winding
up of affairs of, the Account Debtor; (vi) the sale, assignment, or
transfer of all or any material part of the assets of the Account Debtor;
(vii) the nonpayment generally by the Account Debtor of its debts as they
become due; or (viii) the cessation of the business of the Account Debtor
as a going concern;
(f) if fifty percent (50.0%) or more of the aggregate Dollar amount
of outstanding Accounts owed at such time by the Account Debtor thereon is
classified as ineligible under CLAUSE (a) preceding;
(g) owed by an Account Debtor which: (i) does not maintain its chief
executive office in the United States or Canada; or (ii) is not organized
under the laws of the United States or Canada or any political subdivision,
state, or province thereof; or (iii) is the government of any foreign
country or sovereign state, or of any state, province, municipality, or
other political subdivision thereof, or of any department, agency, public
corporation, or other instrumentality thereof; except to the extent that
such Account is secured or payable by a letter of credit satisfactory to
the Agent in its discretion;
(h) owed by an Account Debtor which is an Affiliate or employee of
such Borrower;
POST-PETITION LOAN AGREEMENT - Page 10
(i) except as agreed by the Agent as provided in CLAUSE (g)
preceding or CLAUSE (l) following, with respect to which either the
perfection, enforceability, or validity of the Agent's Lien in such
Account, or the Agent's right or ability to obtain direct payment to the
Agent of the proceeds of such Account, is governed by any federal, state,
or local statutory requirements other than those of the UCC;
(j) owed by an Account Debtor to which a Borrower or any of their
respective Subsidiaries is indebted in any way, or which is subject to any
right of set-off or recoupment by the Account Debtor, unless the Account
Debtor has entered into an agreement acceptable to the Agent to waive
set-off rights; or if the Account Debtor thereon has disputed liability or
made any claim with respect to any other Account due from such Account
Debtor; but in each such case only to the extent of such indebtedness,
set-off, recoupment, dispute, or claim;
(k) with respect to which such Borrower has deemed such Account as
uncollectible or has any reason to believe that such Account is
uncollectible;
(l) owed by the government of the United States, or any department,
agency, public corporation, or other instrumentality thereof, unless the
Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. Section
3727 ET SEQ.), and any other steps necessary to perfect the Agent's Lien
therein, have been complied with to the Agent's satisfaction with respect
to such Account;
(m) owed by any state of the United States or any municipality, or
other political subdivision, department, agency, public corporation, or
other instrumentality thereof, and as to which the Agent determines that
its Lien therein is not or cannot be perfected;
(n) which represents a sale on a ▇▇▇▇-and-hold, guaranteed sale,
sale and return, sale on approval, consignment, or other repurchase or
return basis;
(o) which is evidenced by a promissory note or other instrument or
by chattel paper;
(p) with respect to which the Agent believes, in the exercise of its
reasonable credit judgment, that the prospect of collection of such Account
is impaired or that the Account may not be paid by reason of the Account
Debtor's financial inability to pay;
(q) with respect to which the Account Debtor is located in any state
requiring the filing of a Notice of Business Activities Report or similar
report in order to permit such Borrower to seek judicial enforcement in
such state of payment of such Account, unless such Borrower has qualified
to do business in such state or has filed a Notice of Business Activities
Report or equivalent report for the then current year;
(r) which arises out of a sale not made in the ordinary course of
such Borrower's business;
POST-PETITION LOAN AGREEMENT - Page 11
(s) with respect to which the goods giving rise to such Account have
not been shipped and delivered to, or have been rejected or objected to, by
the Account Debtor or the services giving rise to such Account have not
been performed by such Borrower, and, if applicable, accepted by the
Account Debtor, or the Account Debtor revokes its acceptance of such goods
or services;
(t) owed by an Account Debtor which is obligated to such Borrower
respecting Accounts the aggregate unpaid balance of which exceeds
twenty-five percent (25.0%) of the aggregate unpaid balance of all Accounts
owed to such Borrower at such time by all of such Borrower's Account
Debtors, but only to the extent of such excess;
(u) which arises out of an enforceable contract or order which, by
its terms, forbids, restricts, or makes void or unenforceable the granting
of a Lien by such Borrower to the Agent with respect to such Account;
(v) which is not subject to a first priority and perfected security
interest in favor of the Agent, for the benefit of the Agent and the
Lenders, or which is subject to any other Lien; or
(w) which the Agent determines, in its reasonable discretion, is
ineligible for any other reason.
If any Account at any time ceases to be an Eligible Account, then such Account
shall promptly be excluded from the calculation of the Borrowing Base.
"ELIGIBLE AEROSPACE INVENTORY" means the Pre-Petition Inventory and
Post-Petition Inventory of a Borrower which meets all of the following
requirements:
(a) such Inventory meets all of the requirements of the definition
of Eligible Inventory, and
(b) such Inventory is located at the Borrowers' facilities in Santa
▇▇▇▇▇▇, Fort Lauderdale or Whitier and is not reported in the Borrowing Base
Certificate within any other group of Eligible Inventory.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank, commercial finance
company, or other asset based lender having total assets in excess of
$1,000,000,000; (b) any Lender; (c) any Affiliate of any Lender; (d) any other
asset based lender which is regularly engaged in making, purchasing, or
investing in loans which are similar to the loans provided for in this Agreement
and which are in excess of $150,000,000; (e) any mutual fund, insurance company
or investment fund that is an "accredited investor" (as defined in Regulation D
of the Securities Act of 1933, as amended) and is regularly engaged in making,
purchasing or investing in loans of the type to be assigned to it; and (f) any
other Person reasonably acceptable to the Agent.
POST-PETITION LOAN AGREEMENT - Page 12
"ELIGIBLE BUILDING PRODUCTS INVENTORY" means the Pre-Petition Inventory and
Post-Petition Inventory of a Borrower which meets all of the following
requirements:
(a) such Inventory meets all of the requirements of the definition
of Eligible Inventory, and
(b) such Inventory is owned by and carried on the books of a
Building Products Borrower.
"ELIGIBLE FLAT ROLLED INVENTORY" means the Pre-Petition Inventory and
Post-Petition Inventory of a Borrower which meets all of the following
requirements:
(a) such Inventory meets all of the requirements of the definition
of Eligible Inventory, and
(b) such Inventory is reflected as flat rolled Inventory on the
books of the Borrowers and is not reported in the Borrowing Base
Certificate within any other group of Eligible Inventory.
"ELIGIBLE INVENTORY" means Pre-Petition Inventory and Post-Petition
Inventory of a Borrower which the Agent, in its reasonable discretion
(consistent with practices of Agent in its loans to other borrowers in the same
industry as the Borrowers), determines to be Eligible Inventory. Without
limiting the discretion of the Agent to establish other criteria of eligibility,
Eligible Inventory shall meet all of the following requirements:
(a) such Inventory is owned by such Borrower;
(b) such Inventory is subject to the Agent's Liens, which are
perfected as to such Inventory, and is subject to no other Lien whatsoever
(other than the Liens described in CLAUSE (c) and CLAUSE (e) of the
definition of Permitted Liens; PROVIDED that such Permitted Liens (i) are
junior in priority to the Agent's Liens (other than statutory landlord's
Liens to the extent provided otherwise by a Requirement of Law) and (ii) do
not impair directly or indirectly the ability of the Agent to realize on or
obtain the full benefit of the Collateral);
(c) such Inventory consists of finished goods or raw materials;
(d) such Inventory does not consist of work-in-process, chemicals,
supplies, packing and shipping materials, or advertising or marketing
materials (including samples);
(e) such Inventory is in good condition, not unmerchantable, and
meets all standards imposed by any Governmental Authority having regulatory
authority over such goods, its use, or sale;
POST-PETITION LOAN AGREEMENT - Page 13
(f) such Inventory is currently either usable or salable, at prices
approximating at least cost, in the normal course of such Borrower's
business and is not slow moving or stale;
(g) such Inventory is not obsolete, defective, or returned or
repossessed or used goods taken in trade;
(h) such Inventory is located within the United States (and not
in-transit from vendors or suppliers, except that Inventory in-transit will
not be deemed ineligible if it has been paid for in advance of shipment and
legal ownership thereof has passed to the Borrowers as evidenced by
customary documents of title);
(i) if such Inventory is located in a public warehouse or in
possession of a bailee or in a facility leased by such Borrower, the
warehouseman, the bailee, or the lessor has delivered to the Agent, if
requested by the Agent, a subordination agreement in form and substance
reasonably satisfactory to the Agent;
(j) if such Inventory contains or bears any Proprietary Rights
licensed to a Borrower by any Person, the Agent shall be satisfied that it
may sell or otherwise dispose of such Inventory in accordance with ARTICLE
11 without infringing the rights of the licensor of such Proprietary Rights
or violating any contract with such licensor (and without payment of any
royalties other than any royalties due with respect to the sale or
disposition of such Inventory pursuant to the existing license agreement),
and, if the Agent deems it necessary, such Borrower shall deliver to the
Agent a consent or sublicense agreement from such licensor in form and
substance acceptable to the Agent; and
(k) such Inventory is not determined by the Agent in its reasonable
discretion, to be ineligible for any other reason.
If any Inventory at any time ceases to be Eligible Inventory, the Agent will not
require exclusion from the Borrowing Base until ten (10) days following the date
on which the Agent gives notice to the Parent of such ineligibility.
"ELIGIBLE PLATES AND SHAPES INVENTORY" means the Pre-Petition Inventory and
Post-Petition Inventory of a Borrower which meets all of the following
requirements:
(a) such Inventory meets all of the requirements of the definition
of Eligible Inventory, and
(b) such Inventory is reflected as plates and shapes Inventory on
the books of the Borrowers and is not included as specialty metals on the
books of the Borrowers and is not reported in the Borrowing Base
Certificate within any other group of Eligible Inventory.
"ELIGIBLE REAL ESTATE" means Real Estate owned by a Borrower which meets
each of the following criteria, as determined by the Agent in its reasonable
discretion:
POST-PETITION LOAN AGREEMENT - Page 14
(a) (i) the Agent shall have received a Mortgage covering such Real
Estate, executed by the Borrower that is the record owner thereof, in
proper form for recording in each jurisdiction in which such Real Estate
covered thereby is located along with all other certifications and
documentation necessary to record such Mortgage in each such jurisdiction,
in form and substance satisfactory to the Agent, or (ii) an Interim Order
shall have been entered which, INTER ALIA, grants to the Lenders a first
priority lien in such Real Estate;
(b) the Agent shall have received each of the following in respect
of such Real Estate, in each case in form and substance satisfactory to the
Agent: (i) an appraisal, in compliance with applicable Requirements of Law,
of the Market Value of such Real Estate prepared by a credentialed
appraiser satisfactory to the Agent and (ii) such other information,
documentation, opinions, affidavits and certifications with respect to such
Real Estate, or any Mortgage in respect thereof, as may be required by the
Agent;
(c) the Agent shall have a valid and enforceable, first priority and
exclusive Lien in such Real Estate; and
(d) such Real Estate is otherwise acceptable to the Agent in its
reasonable discretion for inclusion in the Real Estate Sublimit.
"ELIGIBLE SPECIALTY METALS INVENTORY" means the Pre-Petition and
Post-Petition Inventory of a Borrower which meets all of the following
requirements:
(a) such Inventory meets all of the requirements of the definition
of Eligible Inventory, and
(b) such Inventory is located at the Borrowers' facilities in
Detroit, Broadview, Newark or ▇▇▇▇▇▇▇▇ and is not reported in the Borrowing
Base Certificate within any other group of Eligible Inventory.
"ENACTMENT STATE" means, from and after the effective date of its enactment
thereof, any state (or the District of Columbia) of the United States that
enacts Revised Article 9.
"ENVIRONMENTAL COMPLIANCE RESERVE" means any reserve which the Agent, after
the Closing Date, establishes in its reasonable discretion from time to time for
amounts that are reasonably likely to be expended by a Borrower in order for
such Borrower and its operations and property (a) to comply with any notice from
a Governmental Authority asserting material non-compliance with Environmental
Laws, or (b) to correct any such material non-compliance identified in a report
delivered to the Agent and the Lenders pursuant to SECTION 9.7.
"ENVIRONMENTAL LAWS" means all federal, state, or local laws, statutes,
common law duties, rules, regulations, ordinances, and codes, together with all
administrative orders, directed duties, licenses, authorizations, and permits
of, and agreements with, any Governmental Authority, in each case relating to
environmental, health, safety, and land use matters.
POST-PETITION LOAN AGREEMENT - Page 15
"ENVIRONMENTAL LIEN" means a Lien in favor of any Governmental Authority
for (a) any liability under Environmental Laws or (b) damages arising from, or
costs incurred by such Governmental Authority in response to, a Release or
threatened Release of a Contaminant into the environment.
"EQUIPMENT" means, with respect to a Person, all of such Person's now owned
and hereafter acquired machinery, equipment, as defined by the UCC, furniture,
furnishings, fixtures, and other tangible personal property (except Inventory),
including motor vehicles and other rolling stock with respect to which a
certificate of title has been issued, aircraft, dies, tools, jigs, and office
equipment, as well as all of such types of property leased by such Person and
all of such Person's rights and interests with respect thereto under such leases
(including, without limitation, options to purchase); together with all present
and future additions and accessions thereto, replacements therefor, component
and auxiliary parts and supplies used or to be used in connection therewith, and
all substitutes for any of the foregoing, and all manuals, drawings,
instructions, warranties, and rights with respect thereto, wherever any of the
foregoing is located.
"EQUIPMENT SUBLIMIT" means, as of any date of determination, the
Pre-Petition M&E Loan Balance, PLUS the Post-Petition M&E Loan Balance (which
together total $31,000,000 as of the Closing Date), MINUS the Equipment Sublimit
Reduction.
"EQUIPMENT SUBLIMIT REDUCTION" means an amount determined as of the first
day of each calendar month equal to the greater of (a) the aggregate cumulative
amount, determined as of the first day of each calendar month after the Closing
Date, equal to the sum of the product of $500,000 MULTIPLIED BY the number of
full calendar months elapsed since December 31, 2001 PLUS at June 30, 2002, an
additional $13,000,000, PLUS, at December 31, 2002, an additional $7,000,000, or
(b) the aggregate amount of all reductions in the Equipment Sublimit arising
pursuant to SECTION 4.3(c); PROVIDED, HOWEVER; the computations in the preceding
parts (a) and (b) of this sentence shall be interpreted so that if at any time
during the period beginning December 31, 2001 and ending December 31, 2002, the
reductions arising under part (b) of this sentence exceed the cumulative monthly
reductions in part (a) of this sentence, then the part (a) reductions will not
be required again until such time as they exceed, on a cumulative monthly basis,
the aggregate reductions computed under part (b) preceding.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not incorporated)
under common control with a Borrower within the meaning of Section 414(b) or (c)
of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a Pension Plan,
(b) a withdrawal by a Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations which is treated as such a withdrawal under Section 4062(e) of
ERISA, (c) a complete or partial withdrawal by a Borrower or any ERISA Affiliate
from a Multi-employer Plan or notification that a Multi-employer Plan is in
POST-PETITION LOAN AGREEMENT - Page 16
reorganization, (d) the filing of a notice of intent to terminate, the treatment
of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multi-employer Plan, (e) the occurrence of an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan
or Multi-employer Plan, or (f) the imposition of any liability under Title IV of
ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon a Borrower or any ERISA Affiliate.
"EVENT OF DEFAULT" has the meaning specified in SECTION 11.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, and regulations
promulgated thereunder.
"EXISTING ARTICLE 9" means, with respect to the UCC as in effect in any
state (or the District of Columbia) of the United States, Article 9 of the UCC
as in effect in such jurisdiction from time to time prior to the date of
enactment by such state of Revised Article 9.
"FACILITY FEE" means the product of three-fourths of one percent (0.75%)
multiplied by $350,000,000.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1.0%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; PROVIDED that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate charged to the
Bank on such day on such transactions as determined by the Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"FILING DATE" has the meaning given such term in the "Witnesseth"
paragraphs of this Agreement.
"FINAL ORDER" means an order of the Bankruptcy Court which contains
substantially the same provisions as the Interim Order.
"FINANCIAL STATEMENTS" means, according to the context in which it is used,
the financial statements referred to in SECTION 8.6 or any other financial
statements required to be given to the Agent or the Lenders pursuant to this
Agreement.
"FINANCING ORDER" means, collectively, the Interim Order and the Final
Order, as amended from time to time by order of the Bankruptcy Court.
POST-PETITION LOAN AGREEMENT - Page 17
"FISCAL QUARTER" means one of the four three (3) calendar month fiscal
measurement periods in each Fiscal Year.
"FISCAL PERIOD" means a calendar month.
"FISCAL YEAR" means the Parent's fiscal year for financial accounting
purposes. The current Fiscal Year of the Parent ends on December 31, 2001.
"FIXED ASSETS" means, with respect to a Person, the Equipment and Real
Estate of such Person.
"FIXED CHARGE COVERAGE MEASUREMENT DATE" means the last day of each Fiscal
Period, beginning with the Fiscal Period ending on March 31, 2002 and continuing
thereafter (as applicable).
"FIXED CHARGE COVERAGE RATIO" means, as of the end of any Fiscal Period,
determined for the Parent and its Subsidiaries for the preceding three (3)
Fiscal Periods on a consolidated basis in accordance with GAAP (other than the
exclusion from such determination of any of the following items used in such
determination to the extent that it arises with respect to a Subsidiary of a
Borrower prior to the date such Subsidiary becomes a Subsidiary of, or is
consolidated with, a Borrower), the ratio of (a) EBITDA for such period to (b)
the sum of (i) the aggregate amount of the $500,000 per-month reduction portion
of the Equipment Sublimit Reduction attributable to such three (3) Fiscal
Periods, PLUS (ii) the cash amount of Interest Expense paid during such period,
plus (iv) the amount of Net Capital Expenditures during such period.
"FUNDED DEBT" means with respect to a Person, without duplication, (a) all
Debt of such Person for borrowed money, (b) all Debt of such Person evidenced by
bonds, notes, debentures, or other similar instruments, (c) the amount of all
Debt of such Person under Capital Leases, (d) the amount of all Debt of such
Person secured by a Lien existing on property owned by such Person whether or
not the Debt secured thereby has been assumed by such Person or is non-recourse
to such Person, (e) all Debt of such Person to redeem or retire any Capital
Stock of such Person; PROVIDED that the holder(s) of such Capital Stock shall on
the date of determination hold the right to redeem or retire such Capital Stock
for cash, (f) all Debt of such Person in respect of unfunded vested benefits
under any Plan, (g) all obligations of such Person to pay the deferred purchase
price of property or services (excluding trade accounts payable of such Person
arising in the ordinary course of business that are not past due by more than
ninety (90) days or that are being contested in good faith by appropriate
proceedings diligently pursued and for which adequate reserves have been
established in accordance with GAAP), (h) all reimbursement obligations of such
Person (whether contingent or otherwise) in respect of letters of credit,
bankers' acceptances, surety or other bonds, and similar instruments, and (i)
the imputed principal balance outstanding under any synthetic lease, tax
retention operating lease, off balance sheet loan, or similar off balance sheet
financing product to which such Person is a party, where such transaction is
considered borrowed money indebtedness for tax purposes but is classified as an
operating lease in accordance with GAAP.
"FUNDING DATE" means the date on which a Borrowing occurs.
POST-PETITION LOAN AGREEMENT - Page 18
"GAAP" means generally accepted accounting principles and practices set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
United States accounting profession) PROVIDED, HOWEVER, that with respect to the
calculation of financial ratios and other financial tests required by this
Agreement, "GAAP" means generally accepted accounting principles as in effect as
of the Closing Date.
"GAAP VALUE" means the value of Inventory carried on the books of the
Borrowers in accordance with GAAP requirements for market value adjustments to
the book value of Inventory.
"GENERAL INTANGIBLES" means, with respect to a Person, all of such Person's
now owned or hereafter acquired general intangibles, as defined in the UCC,
choses in action and causes of action and all other intangible personal property
of such Person of every kind and nature (other than Accounts), including,
without limitation, all contract rights, Proprietary Rights, corporate or other
business records, inventions, designs, blueprints, plans, specifications,
patents, patent applications, trademarks, service marks, trade names, trade
secrets, goodwill, copyrights, computer software, customer lists, registrations,
licenses, franchises, tax refund claims, any funds which may become due to such
Person in connection with the termination of any Plan or other employee benefit
plan or any rights thereto and any other amounts payable to such Person from any
Plan or other employee benefit plan, rights and claims against carriers and
shippers, rights to indemnification, business interruption insurance and
proceeds thereof, property, casualty or any similar type of insurance and any
proceeds thereof, proceeds of insurance covering the lives of key employees on
which such Person is beneficiary, and any letter of credit, guarantee, claim,
security interest, or other security held by or granted to such Person.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"GUARANTY" means, with respect to any Person, all obligations of such
Person which in any manner directly or indirectly guarantee or assure, or in
effect guarantee or assure, the payment or performance of any indebtedness,
dividend, or other obligations of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including any such obligations
incurred through an agreement, contingent or otherwise: (a) to purchase the
guaranteed obligations or any property constituting security therefor; (b) to
advance or supply funds for the purchase or payment of the guaranteed
obligations or to maintain a working capital or other balance sheet condition;
or (c) to lease property or to purchase any debt or equity securities or other
property or services.
"GUARANTY AGREEMENT" means the Parent Guaranty or a Subsidiary Guaranty, as
the case may be.
POST-PETITION LOAN AGREEMENT - Page 19
"HEDGE AGREEMENT" means any and all transactions, agreements, or documents
now existing or hereafter entered into, which provide for an interest rate,
credit, commodity, or equity swap, cap, floor, collar, forward foreign exchange
transaction, currency swap, cross currency rate swap, currency option, or any
combination of, or option with respect to, these or similar transactions, for
the purpose of hedging a Person's exposure to fluctuations in interest or
exchange rates, loan, credit exchange, security, or currency valuations, or
commodity prices.
"INDENTURE" means that certain Indenture, dated as of February 11, 1998, by
and among Metals USA, Inc., the "Guarantors" named therein, and U.S. Trust
Company of California, N.A., as trustee, as such indenture may be amended,
restated, supplemented, or otherwise modified from time to time.
"INTERCOMPANY ACCOUNTS" means all assets and liabilities, however arising,
which are due to any Borrower from, which are due from any Borrower to, or which
otherwise arise from any transaction by any Borrower with, any Affiliate of such
Borrower.
"INTEREST EXPENSE" means, with respect to any Person for any period, the
interest expense of such Person for such period, determined in accordance with
GAAP.
"INTEREST RATE" means each or any of the interest rates, including the
Default Rate, set forth in SECTION 3.1.
"INTERIM ORDER" means an Interim Order entered by the Bankruptcy Court
approving the DIP Loans in form and substance acceptable to the Lenders.
"INVENTORY" means, with respect to a Person, all of such Person's now owned
and hereafter acquired inventory, as defined in the UCC, goods, and merchandise,
wherever located, in each case to be furnished under any contract of service or
held for sale or lease, all returned goods, raw materials, other materials, and
supplies of any kind, nature, or description which are used or consumed in such
Person's business or used in connection with the packing, shipping, advertising,
selling, or finishing of such goods, merchandise, and other property, and all
documents of title or other documents representing them.
"INVENTORY VALUATION ADJUSTMENT PERCENTAGE" means the amount, expressed as
a percentage, by which the GAAP Value of the Borrowers' Eligible Inventory,
taken as a whole, exceeds the Replacement Cost of the Borrowers' Eligible
Inventory, taken as a whole.
"INVENTORY VALUE RESERVE" means, as of any date of determination of any
Inventory Valuation Adjustment Percentage, the Dollar amount determined by
multiplying (i) the amount (as a percentage) by which the Inventory Valuation
Adjustment Percentage exceeds ten percent (10.0%) by (ii) the GAAP Value of the
Borrowers' Eligible Inventory.
"INVESTMENT PROPERTY" means, with respect to a Person, all of such Person's
right, title, and interest in and to any and all investment property, as defined
in the UCC, including, without limitation, all (a) securities whether
certificated or uncertificated, (b) securities entitlements, (c) securities
accounts, (d) commodity contracts and (e) commodity accounts; together with all
POST-PETITION LOAN AGREEMENT - Page 20
other units, shares, partnership interests, membership interests, equity
interests, rights, or other equivalent evidences of ownership (howsoever
designated) issued by any Person.
"IRS" means the Internal Revenue Service and any Governmental Authority
succeeding to any of its principal functions under the Code.
"ISSUER" has the meaning specified in SECTION 6.2(d).
"LENDER" and "LENDERS" have the meanings specified in the introductory
paragraph hereof and shall include the Agent to the extent of any Agent Advance
outstanding.
"LETTER OF CREDIT" has the meaning specified in SECTION 2.3.
"LETTER OF CREDIT FEE" has the meaning specified in SECTION 3.4.
"LETTER OF CREDIT FEE PERCENTAGE" means with respect to any Letter of
Credit issued by the Letter of Credit Issuer, a per annum percentage equal to
two percent (2.00%).
"LETTER OF CREDIT ISSUER" means the Bank, any Affiliate of the Bank, or any
other financial institution that issues any Letter of Credit pursuant to this
Agreement.
"LIEN" means (a) any interest in property securing an obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute, or contract, and including a
security interest, charge, claim, or lien arising from a mortgage, deed of
trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement,
agreement, security agreement, conditional sale or trust receipt or a lease,
consignment, or bailment for security purposes, (b) to the extent not included
under CLAUSE (a) preceding, any reservation, exception, encroachment, easement,
right-of-way, covenant, condition, restriction, lease, or other title exception
or encumbrance affecting property, and (c) any contingent or other agreement to
provide any of the foregoing.
"LOAN ACCOUNT" means the loan account of the Borrowers, which account shall
be maintained by the Agent.
"LOAN DOCUMENTS" means, collectively, all Pre-Petition Loan Documents (as
defined in the Pre-Petition Loan Agreement), and this Agreement, the Revolving
Notes, the Copyright, Patent, and Trademark Agreements, the Mortgages, the
Guaranty Agreements, the Agents' Letter and each other agreement, certificate,
document, or instrument executed or delivered by any Borrower to the Agent or
any Lender in connection with this Agreement, the Obligations, or the Collateral
whether prior to, on, or after the Closing Date, and any and all renewals,
extensions, amendments, modifications, or restatements of any of the foregoing.
"LOAN VALUE OF EQUIPMENT" means, as to any item of Equipment, seventy-five
percent (75%) multiplied by the Appraised Value of Equipment for such item.
POST-PETITION LOAN AGREEMENT - Page 21
"LOAN VALUE OF REAL ESTATE" means, with reference to SCHEDULE 1.1(C)
attached hereto, and as to any parcel of Real Estate listed thereon, the "Loan
Amount" reflected on such SCHEDULE 1.1(C), for such parcel.
"MAJORITY LENDERS" means, as of any date of determination, the Lenders
whose Pro Rata Shares aggregate more than fifty percent (50.0%) as such
percentage is determined according to the definition of Pro Rata Share.
"MANAGEMENT GROUP" means, as of any date of determination, the board of
directors, board of managers, or similar constituency having management
authority in respect of an entity under any Requirement of Law.
"MARGIN STOCK" means "margin stock" as such term is defined in Regulation
T, U, or X of the Federal Reserve Board.
"MARKET VALUE" means, with respect to any Real Estate, the market value
thereof as determined by the Agent in its reasonable discretion based upon a
market value appraisal prepared by a credentialed appraiser acceptable to, and
in form satisfactory to, the Agent.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise), or prospects of the Borrowers, taken as a whole, or of
a material portion of the Collateral, (b) a material impairment of the ability
of the Borrowers, taken as a whole, to perform under any Loan Document to which
they are a party and to avoid any Event of Default, or (c) a material adverse
effect upon the legality, validity, binding effect, or enforceability against
any Borrower of any Loan Document to which it is a party.
"MAXIMUM RATE" means, at any time, the maximum rate of interest the Lenders
may lawfully contract for, charge, or receive in respect of the Obligations as
allowed by any Requirement of Law. For purposes of determining the Maximum Rate
under the Requirements of Law of the State of
Texas, the applicable rate ceiling
shall be (a) the "weekly ceiling" described in and computed in accordance with
the provisions of Section 303.003 of the
Texas Finance Code, as amended or (b)
if the parties subsequently contract as allowed by any Requirement of Law, the
"quarterly ceiling" or the "annualized ceiling" computed pursuant to Section
303.008 of the
Texas Finance Code, as amended; PROVIDED, HOWEVER, that at any
time the "weekly ceiling", the "quarterly ceiling", or the "annualized ceiling"
shall be less than eighteen percent (18.0%) per annum or more than twenty-four
percent (24.0%) per annum, the provisions of Section 303.009(a) and Section
303.009(b) of the
Texas Finance Code, as amended, shall control for purposes of
such determination, as applicable.
"MAXIMUM REVOLVER AMOUNT" means $350,000,000.
"METALS INVENTORY BORROWER" means any Borrower other than a Building
Products Borrower.
POST-PETITION LOAN AGREEMENT - Page 22
"METALS PRE-PETITION LOAN AGREEMENT" means the Loan and Security Agreement
dated as of March 12, 2001, among the Borrowers (excluding MRC) and the
financial institutions party thereto, as amended.
"MORTGAGES" means and includes any and all of the mortgages, deeds of
trust, deeds to secure debt, assignments, and other instruments executed and
delivered by any Borrower to or for the benefit of the Agent by which the Agent,
for the benefit of the Agent and the Lenders, acquires a Lien on Real Estate of
a Borrower or a collateral assignment of such Borrower's interest under leases
of Real Estate, and all amendments, modifications, and supplements thereto, each
of which, individually, being a "MORTGAGE".
"MRC" means Metals Receivables Corporation, a Delaware corporation and
Wholly-Owned Subsidiary of the Parent, and its successors and assigns.
"MRC PRE-PETITION LOAN AGREEMENT" means the Loan and Security Agreement
dated as of March 12, 2001, between MRC and the financial institutions party
thereto as such agreement may be amended, restated, or otherwise modified from
time to time.
"MULTI-EMPLOYER PLAN" means a "multi-employer plan" as defined in Section
4001(a)(3) of ERISA which is or was at any time during the current year or the
immediately preceding six (6) years contributed to by a Borrower or any ERISA
Affiliate.
"NEGATIVE PLEDGE" means any agreement, contract, or other arrangement
whereby any Borrower is prohibited from, or would otherwise be in default as a
result of, creating, assuming, incurring, or suffering to exist, directly or
indirectly, any Lien on any of its assets in favor of the Agent under the Loan
Documents.
"NET AMOUNT OF ELIGIBLE ACCOUNTS" means, at any time, the gross amount of
Eligible Accounts less sales, excise, or similar taxes, and less returns,
discounts, claims, credits, and allowances of any nature at any time issued,
owing, granted, outstanding, available, or claimed.
"NET CAPITAL EXPENDITURES" means, for any period, the aggregate amount of
Capital Expenditures during such period less the aggregate amount of such
Capital Expenditures which were financed during such period with Funded Debt
other than the Revolving Loans.
"NET INCOME" means, as applied to any Person (the "subject Person"), the
net income (or net loss) of the subject Person for the period in question after
giving effect to deduction of or provision for all operating expenses, all taxes
and reserves (including, without limitation, reserves for deferred taxes), and
all other proper deductions, all determined in accordance with GAAP.
"NET PROCEEDS" means the gross proceeds of any Disposition, minus all
customary and reasonable costs and expenses directly relating to, and due at
closing in connection with, any Disposition.
"NOTICE OF BORROWING" has the meaning specified in SECTION 2.2(b).
POST-PETITION LOAN AGREEMENT - Page 23
"OBLIGATIONS" means all present and future loans, advances, liabilities,
obligations, covenants, duties, and debts owing by the Borrowers, or any of
them, to the Agent and/or any Lender, arising under or pursuant to this
Agreement or any of the other Loan Documents, whether or not evidenced by any
note, or other instrument or document, whether arising from an extension of
credit, opening of a letter of credit, acceptance, loan, guaranty,
indemnification, or otherwise, whether direct or indirect, absolute or
contingent, due or to become due, primary or secondary, as principal or
guarantor, and including all principal, interest, charges, expenses, fees,
attorneys' fees, filing fees, and any other sums chargeable to any Borrower
hereunder or under any of the other Loan Documents. "Obligations" includes,
without limitation, (a) all debts, liabilities, and obligations now or hereafter
arising from or in connection with the Letters of Credit and Credit Support and
(b) all debts, liabilities, and obligations now or hereafter arising from or in
connection with Bank Products; PROVIDED, HOWEVER, that notwithstanding the
foregoing, in the case of and with regard to or in connection with any Newly
Obligated Party, the term "Obligations," wherever in any manner used in the Loan
Documents, excludes Existing Obligations.
"OTHER TAXES" means any present or future stamp or documentary taxes or any
other excise or property taxes, charges, or similar levies (excluding, in the
case of each Lender and the Agent, such taxes (including income taxes or
franchise taxes) as are imposed on or measured by each Lender's or the Agent's
net income) which arise from any payment made hereunder or from the execution,
delivery, or registration of, or otherwise with respect to, this Agreement or
any other Loan Documents.
"PARENT" means Metals USA, Inc., a Delaware corporation.
"PARENT GUARANTY" means an agreement of Guaranty executed by the Parent
pursuant to SECTION 6.17.
"PARTICIPANT" means any commercial bank, financial institution, or other
Person not an Affiliate of the Borrower who shall have been granted the right by
any Lender to participate in the financing provided by such Lender under this
Agreement, and who shall have entered into a participation agreement in form and
substance satisfactory to such Lender.
"PAYMENT ACCOUNT" means each bank account established pursuant to SECTION
6.9, to which the funds of the Borrowers (including proceeds of Accounts and
other Collateral) are deposited or credited, and which is maintained in the name
of the Agent or any Borrower, or any of them, as the Agent may determine, on
terms acceptable to the Agent.
"PBGC" means the Pension Benefit Guaranty Corporation or any Governmental
Authority succeeding to the functions thereof.
"PENDING REVOLVING LOANS" means, at any time, the aggregate principal
amount of all Revolving Loans requested in any Notice of Borrowing received by
the Agent which have not yet been advanced.
"PENSION PLAN" means a pension plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA which any Borrower or any ERISA Affiliate sponsors,
maintains, or to which
POST-PETITION LOAN AGREEMENT - Page 24
it makes, is making, or is obligated to make contributions, or in the case of a
Multi-employer Plan has made contributions at any time during the immediately
preceding five (5) calendar years.
"PERMITTED LIENS" means:
(a) the Agent's Liens;
(b) Liens, if any, which are described on SCHEDULE 1.1A ("Permitted
Liens") on the Closing Date and Liens resulting from the refinancing of the
related Debt, PROVIDED that such refinancing is on the same or
substantially similar terms, the Debt secured thereby shall not be
increased, and the Liens shall not cover any additional property;
(c) Liens for taxes, fees, assessments, or other charges of a
Governmental Authority which are (i) not delinquent (including statutory
Liens for taxes not delinquent) or (ii) due and payable in an aggregate
amount not in excess of $3,000,000; PROVIDED that the payment of such
taxes, fees, assessments, or other charges described in this CLAUSE (ii) is
being contested in good faith and by appropriate proceedings diligently
pursued and adequate financial reserves have been established in accordance
with GAAP on the appropriate Borrower's books and records and a stay of
enforcement of any such Lien is in effect;
(d) Liens consisting of deposits made in the ordinary course of
business in connection with, or to secure payment of, obligations under
worker's compensation, unemployment insurance, social security and other
similar laws, or to secure the performance of bids, tenders, or contracts
(other than for the repayment of Funded Debt) or to secure indemnity,
performance, or other similar bonds for the performance of bids, tenders,
or contracts (other than for the repayment of Funded Debt) or to secure
statutory obligations (other than liens arising under ERISA or
Environmental Liens) or surety or appeal bonds, or to secure indemnity,
performance, or other similar bonds;
(e) Liens securing the claims or demands of materialmen, mechanics,
repairmen, carriers, warehousemen, landlords, and other like Persons if (i)
as to any individual claim, it does not exceed $500,000, and if as to all
such claims, they do not exceed $2,500,000 in the aggregate, and (ii) as to
each such claim it is being contested in good faith, and reserves have been
established for such claim in accordance with GAAP;
(f) Liens constituting encumbrances in the nature of reservations,
exceptions, encroachments, easements, rights of way, covenants running with
the land, and other similar title exceptions or encumbrances affecting any
Real Estate; PROVIDED such Liens do not in the aggregate materially detract
from the value of such Real Estate or materially interfere with its use in
the ordinary conduct of a Borrower's business;
(g) Liens arising from judgments and attachments in connection with
court proceedings; PROVIDED that the attachment or enforcement of such
Liens would not result in an Event of Default hereunder and such Liens are
being contested in good faith by
POST-PETITION LOAN AGREEMENT - Page 25
appropriate proceedings, adequate reserves have been set aside and no
material Property is subject to a material risk of loss or forfeiture, and
a stay of execution pending appeal or proceeding for review is in effect;
(h) Such other Liens provided for in the Interim Order;
(i) Purchase money Liens and Capital Leases, if after giving effect
to the transaction pursuant to which such Liens or Capital Leases arise the
Borrowers are in compliance with the financial covenants contained in this
Agreement;
PROVIDED that (i) none of such Liens listed in CLAUSE (b) through CLAUSE (i)
preceding may attach to any Accounts, and (ii) none of such Liens listed in
CLAUSE (b) through CLAUSE (h) preceding, other than such Liens of a type and to
the extent provided by CLAUSE (e) preceding, may attach to any Inventory owned
by a Borrower.
"PERSON" means any individual, sole proprietorship, partnership, limited
liability company, joint venture, trust, unincorporated organization,
association, corporation, Governmental Authority, or any other entity.
"PLAN" means an employee benefit plan (as defined in Section 3(3) of ERISA)
which any Borrower sponsors or maintains or to which any Borrower makes, is
making, or is obligated to make contributions and includes any Pension Plan.
"POST-PETITION" means, in the context of time, any date that is after the
Filing Date. When used in connection with items or events, Post-Petition means
such items or events existing or arising after the Filing Date.
"POST-PETITION ACCOUNTS" means all Accounts of the Borrowers originating
and arising after the Filing Date.
"POST-PETITION INVENTORY" means all Inventory of the Borrowers to which
legal ownership under applicable law became vested in the Borrowers after the
Filing Date.
"POST-PETITION M&E LOAN BALANCE" means, as of any date of determination,
$5,000,000, MINUS all reductions to the Post-Petition M&E Loan Balance as
provided in SECTION 4.3, together with all accrued and unpaid interest thereon
at the rate of interest provided for the Aggregate Revolver Outstandings under
this Agreement.
"POST-PETITION REVOLVER OUTSTANDINGS" means, at any time: the sum of (a)
the unpaid balance of Revolving Loans, (b) the aggregate amount of Pending
Revolving Loans, (c) one hundred percent (100%) of the aggregate undrawn amount
of all outstanding Letters of Credit and Credit Support, and (d) the aggregate
amount of any unpaid reimbursement obligations in respect of Letters of Credit
and Credit Support.
"PRE-PETITION" means in the context of time, any date that is on or before
the Filing Date. When used in connection with items or events, Pre-Petition
means such items or events existing or arising on or before the Filing Date.
POST-PETITION LOAN AGREEMENT - Page 26
"PRE-PETITION ACCOUNTS" means all Accounts of the Borrowers existing on the
Filing Date.
"PRE-PETITION ACCOUNTS LOAN BALANCE" means, as of the Filing Date, the
aggregate loans outstanding under the Metals Pre-Petition Loan Agreement and the
MRC Pre-Petition Loan Agreement (together with accrued and unpaid interest
thereon computed at the rate provided therein) attributable to advances under
the Accounts portion of the Borrowing Base under (and as defined in) the Metals
Pre-Petition Loan Agreement and in the MRC Pre-Petition Loan Agreement,
respectively.
"PRE-PETITION AGENT" means Bank of America, National Association.
"PRE-PETITION COLLATERAL" means all "Collateral" as defined in the
Pre-Petition Loan Agreement.
"PRE-PETITION INTEREST" means the accrued and unpaid interest portion of
the Aggregate Pre-Petition Outstandings.
"PRE-PETITION INVENTORY" means all Inventory of the Borrowers existing on
the Filing Date.
"PRE-PETITION INVENTORY LOAN BALANCE" means, as of the Filing Date, the
aggregate loans outstanding under the Pre-Petition Loan Agreement (together with
accrued and unpaid interest thereon computed at the rate provided in the
Pre-Petition Loan Agreement) attributable to advances under the Inventory
portion of the Borrowing Base under (and as defined in) the Pre-Petition Loan
Agreement.
"PRE-PETITION LENDERS" means the financial institutions party to the
Pre-Petition Loan Agreement in their capacities as such.
"PRE-PETITION LOAN AGREEMENT" means, collectively, and as the context
requires, the Metals Pre-Petition Loan Agreement and the MRC Pre-Petition Loan
Agreement.
"PRE-PETITION M&E LOAN BALANCE" means $26,000,000 (in principal balance),
as subsequently reduced by the application of SECTION 4.3.
"PRE-PETITION OBLIGATIONS" means the "Obligations" as such term is defined
in the Pre-Petition Loan Agreement.
"PRE-PETITION REVOLVER OUTSTANDINGS" means, at any time, the unpaid balance
of the Revolving Loans under (and as defined in) the Pre-Petition Loan
Agreement.
"PROFESSIONALS FEES RESERVE" means, at any time of determination an amount
equal to amounts owed by the Borrowers to the professional advisors engaged by
the Borrowers in connection with the Bankruptcy Cases which are (a) amounts
which a Borrower is obligated (and permitted by the Bankruptcy Court) to pay and
which have remained unpaid by the Borrowers for more than fifteen (15) days
after the due date for the same as per the invoice terms relating to such unpaid
amounts, or (b) amounts which exceed the Carve Out.
POST-PETITION LOAN AGREEMENT - Page 27
"PRO RATE SHARE" means, with respect to a Lender, a fraction (expressed as
a percentage), the numerator of which is the amount of such Lender's Commitment
and the denominator of which is the sum of the amounts of all of the Lenders'
Commitments, or if no Commitments are outstanding, a fraction (expressed as a
percentage), the numerator of which is the amount of Obligations owed to such
Lender and the denominator of which is the aggregate amount of the Obligations
owed to the Lenders, in each case giving effect to a Lender's participation in
Agent Advances.
"PROPRIETARY RIGHTS" means, with respect to a Person, all of such Person's
now owned and hereafter arising or acquired licenses, franchises, permits,
patents, patent rights, copyrights, works which are the subject matter of
copyrights, trademarks, service marks, trade names, trade styles, patent,
trademark and service ▇▇▇▇ applications, and all licenses and rights related to
any of the foregoing, including those registered patents and trademarks set
forth on SCHEDULE 8.12, and all other rights under any of the foregoing, all
extensions, renewals, reissues, divisions, continuations, and
continuations-in-part of any of the foregoing, and all rights to ▇▇▇ for past,
present, and future infringement of any of the foregoing.
"REAL ESTATE" means, with respect to any Person, all of such Person's now
or hereafter owned or leased estates in real property, including, without
limitation, all fees, leaseholds, and future interests, together with all of
such Person's now and hereafter owned or leased interests in the improvements
thereon, the fixtures attached thereto, and the easements appurtenant thereto.
"REAL ESTATE SUBLIMIT" means, as of any date of determination, $30,000,000
MINUS the Real Estate Sublimit Reduction.
"REAL ESTATE SUBLIMIT REDUCTION" means the aggregate amount of all required
reductions in the Real Estate Sublimit pursuant to SECTION 4.3. Each reduction
in the Real Estate Sublimit will result in a reduction (of equivalent amount) in
the Commitment of each Lender and in the Borrowing Base.
"RELEASE" means a release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching, or migration of a Contaminant
into the indoor or outdoor environment or into or out of any Real Estate or
other property, including the movement of Contaminants through or in the air,
soil, surface water, groundwater, or Real Estate or other property.
"RENTALS" has the meaning specified in SECTION 9.23.
"REPLACEMENT COST" means, as to Eligible Inventory, at any date of
determination, the cost of the Borrowers' Eligible Inventory based upon current
quoted prices received from the Borrowers' customary vendors, without trade
discounts.
"REPORTABLE EVENT" means, any of the events set forth in Section 4043(b) of
ERISA or the regulations thereunder, other than any such event for which the
30-day notice requirement under ERISA has been waived in regulations issued by
the PBGC.
POST-PETITION LOAN AGREEMENT - Page 28
"REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
common), treaty, rule, or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject. In
respect of contracts relating to interest or finance charges that are made or
performed in the State of
Texas, "Requirement of Law" includes the laws of the
United States, including, without limitation, 12 USC Sections 85 and 86(a), as
amended from time to time, and any other statute of the United States now or at
any time hereafter prescribing the maximum rates of interest on loans and
extensions of credit, and the laws of the State of Texas, including, without
limitation, Chapter 306 of the Texas Finance Code, if applicable, and if Chapter
306 of the Texas Finance Code is not applicable, Chapter 303 of the Texas
Finance Code, and any other statute of the State of Texas now or at any time
hereafter prescribing maximum rates of interest on loans and extensions of
credit; PROVIDED that the parties hereto agree pursuant to Texas Finance Code
Section 346.004 that the provisions of Chapter 346 of the Texas Finance Code
shall not apply to the Revolving Loans, this Agreement, or any other Loan
Documents.
"RESPONSIBLE OFFICER" means, with respect to any Borrower, the chief
executive officer, president, chief financial officer, chief accounting officer,
treasurer, or controller and, in each case preceding, any other officer having
substantially the same authority and responsibility.
"RESTRICTED INVESTMENT" means, with respect to any Borrower, any
acquisition of any Funded Debt, equity interests, or securities by such Borrower
in exchange for cash or other property, whether in the form of an acquisition of
stock, debt, or other indebtedness or obligation, or a loan, advance, capital
contribution, or subscription, except the following: (a) current assets acquired
in the ordinary course of business of such Borrower; (b) direct obligations of
the United States, or any agency thereof, or obligations guaranteed by the
United States; PROVIDED that such obligations mature within one (1) year from
the date of acquisition thereof; (c) acquisitions of certificates of deposit
maturing within one (1) year from the date of acquisition, bankers' acceptances,
Eurodollar bank deposits, or overnight bank deposits, in each case issued by,
created by, or with a bank or trust company organized under the laws of the
United States or any state thereof having capital and surplus aggregating at
least $100,000,000; (d) acquisitions of commercial paper given a rating of "A2"
or better by Standard & Poor's Corporation or "P2" or better by ▇▇▇▇▇'▇
Investors Service, Inc. and maturing not more than ninety (90) days from the
date of creation thereof; (e) Hedge Agreements entered into for the purpose of
hedging interest payable under this Agreement; (f) investments in mutual funds
substantially all of the assets of which are comprised of securities of the
types described in CLAUSES (b), (c), and (d) preceding; (g) Permitted
Acquisitions; (h) investments consisting of intercompany loans between any
Borrower and another Borrower; (i) existing investments listed on the attached
SCHEDULE 1.1(b); (j) other investments not listed in CLAUSE (a) through CLAUSE
(i) preceding in an aggregate amount at any time not exceeding $10,000,000; and
(k) with respect to each RPA Seller, loans by such Borrower to MRC consisting of
"Originator Revolving Loans" as defined by, and pursuant to, the RPA.
"REVISED ARTICLE 9" means, with respect to the UCC as in effect in any
Enactment State, Uniform Commercial Code, Article 9, 1999 Official Text, as
enacted in such state.
POST-PETITION LOAN AGREEMENT - Page 29
"REVOLVING LOANS" has the meaning specified in SECTION 2.2 and includes
each Agent Advance.
"REVOLVING NOTE" means a promissory note made by the Borrowers payable to
the order of a Lender evidencing the obligation of the Borrowers to pay the
aggregate unpaid principal amount of the Revolving Loans made to each of the
Borrowers by such Lender (and any promissory note or notes that may be issued
from time to time in substitution, renewal, extension, replacement, or exchange
thereof whether payable to such Lender or to a different Lender in connection
with a Person becoming a Lender after the Closing Date or otherwise)
substantially in the form of EXHIBIT A, with all of the blanks properly
completed, either as originally executed or as such promissory note may be
renewed, extended, modified, amended, supplemented, or restated from time to
time.
"SETTLEMENT" and "SETTLEMENT DATE" have the meanings specified in SECTION
2.2(h)(i).
"SOLVENT" means, with respect to any Person, as of any date, that on and as
of such date (both before and after effecting the transactions contemplated by
this Agreement and making any Revolving Loans or issuing any Letter of Credit or
taking any other actions permitted by this Agreement proposed to be taken as of
such date) (a) the sum of such Person's debts is not greater than all of such
Person's property, at a fair valuation, (b) the sum of such Person's debts is
not greater than all of such Person's assets, at a fair valuation, (c) such
Person is generally paying its debts as they become due, (d) such Person is not
engaged or about to engage in any business or any transaction for which (i) its
property is an unreasonably small capital or (ii) the remaining assets of such
Person are unreasonably small in relation to any such business or transaction,
(e) such Person does not intend to incur, and does not believe that it will
incur, debts that are or would be beyond its ability to pay as such debts mature
or become due, and (f) such Person does not intend to hinder, delay, or defraud
any creditor of such Person. For this purpose "debts" includes anything included
within the definition of "debt" as used in Section 548 of the United States
Bankruptcy Code or as defined or used by Section 24.002 or Section 24.003 of the
Texas Uniform Fraudulent Transfer Act, and "assets" has the meaning defined or
used by Section 24.002 of the Texas Uniform Fraudulent Transfer Act. Contingent,
unliquidated, or disputed obligations or liabilities (if any) are valued at the
amount which, in light of all relevant facts and circumstances, is reasonably
expected to become absolute, liquidated, or mature.
"STATED TERMINATION DATE" means June 30, 2003, subject to extension in
accordance with SECTION 2.5.
"STRATEGIC DISPOSITION" means the Disposition of substantially all of the
assets, in a transaction or series of transactions of any of the entities
described in that certain letter dated January 2, 2002, from the Parent to the
Agent. Dispositions not meeting the foregoing standards will be treated as a
Disposition.
"SUBSIDIARY" means, with respect to any Person (the "subject Person"), any
corporation, association, partnership, limited liability company, joint venture,
or other business entity of which more than fifty percent (50.0%) of the voting
stock or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the subject
Person, or one or more of the Subsidiaries of the subject Person, or a
combination thereof.
POST-PETITION LOAN AGREEMENT - Page 30
Unless the context otherwise clearly requires, references herein to a
"Subsidiary" refer to a Subsidiary of a Borrower.
"SUBSIDIARY GUARANTY" means an agreement of Guaranty executed by a
Subsidiary of the Parent pursuant to SECTION 6.17.
"SUPERPRIORITY CLAIMS" means indebtedness or other claims arising out of
credit obtained or debt incurred by one or more Borrowers having priority in
accordance with the provisions of Section 3.64(c)(1) of the Bankruptcy Code over
any and all administrative expenses of the kind specified in Section 503(b) or
507(b) of the Bankruptcy Code.
"TAXES" means any and all present or future taxes, levies, imposts,
deductions, charges, or withholdings, and all liabilities with respect thereto,
excluding, in the case of the Agent and each Lender, such taxes (including
income taxes or franchise taxes) as are imposed on or measured by the Agent's or
such Lender's net income in any jurisdiction (whether federal, state, or local
and including any political subdivision thereof) under the laws of which the
Agent or such Lender, as the case may be, is organized or maintains a lending
office.
"TERMINATION DATE" means the earliest to occur of (a) the Stated
Termination Date or (b) the date of occurrence of a Termination Event.
"TERMINATION EVENT" (i) means any material non-compliance by the Borrowers
with any of the terms or provisions of either of the Financing Orders, (ii) any
Event of Default shall have occurred (unless waived in accordance with this
Agreement), (iii) consummation of a sale of substantially all of the Borrowers'
assets pursuant to an order of the Bankruptcy Court pursuant to Section 363 of
the Bankruptcy Code approving such sale, (iv) the Consummation Date, or (v) the
Stated Termination Date.
"TOTAL FACILITY" has the meaning specified in SECTION 2.1.
"UCC" means the Uniform Commercial Code (or any successor statute), as in
effect from time to time, of the State of Texas or of any other state the laws
of which are required as a result thereof to be applied in connection with the
issue of perfection of security interests.
"UNFUNDED PENSION LIABILITY" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.
"UNITED STATES" means the United States of America.
"UNUSED LETTER OF CREDIT SUBFACILITY" means an amount equal to $20,000,000
MINUS the sum of (a) the aggregate undrawn amount of all outstanding Letters of
Credit and Credit Support, PLUS (b) the aggregate unpaid reimbursement
obligations with respect to all Letters of Credit and Credit Support.
"UNUSED LINE FEE" has the meaning specified in SECTION 3.3.
POST-PETITION LOAN AGREEMENT - Page 31
"UNUSED LINE FEE PERCENTAGE" means, as of the Closing Date, one-half
percent (0.50%).
"WHOLLY-OWNED SUBSIDIARY" when used to determine the relationship of a
Subsidiary to a Person, means a Subsidiary all of the issued and outstanding
Capital Stock (other than directors' qualifying shares) of which shall at the
time be owned by such Person or one or more of such Person's Wholly-Owned
Subsidiaries or by such Person and one or more of such Person's Wholly-Owned
Subsidiaries.
Section 1.2 ACCOUNTING TERMS. Any accounting term used in this Agreement
shall have, unless otherwise specifically provided herein, the meaning
customarily given to such term in accordance with GAAP, and all financial
computations hereunder shall be computed, unless otherwise specifically provided
herein, in accordance with GAAP as consistently applied and using the same
method for inventory valuation as used in the preparation of the Financial
Statements.
Section 1.3 INTERPRETIVE PROVISIONS.
(a) The meanings of defined terms are equally applicable to the 6
singular and plural forms of the defined terms. Terms used herein that are
defined in the UCC and are not otherwise defined herein, shall have the meaning
specified therefor in the UCC.
(b) The words "hereof," "herein," "hereunder," and similar words
refer to this Agreement as a whole and not to any particular provision of
this Agreement. Section, Schedule, and Exhibit references are to this
Agreement unless otherwise specified. The term "documents" includes any and
all instruments, documents, agreements, certificates, indentures, notices,
and other writings, however evidenced. The term "including" is not limiting
and means "including, without limitation." In the computation of periods of
time from a specified date to a later specified date, the word "from" means
"from and including," the words "to" and "until" each mean "to but
excluding" and the word "through" means "to and including."
(c) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments
shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and
(ii) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing, or interpreting the statute or regulation.
(d) The captions and headings of this Agreement are for convenience
of reference only and shall not affect the interpretation of this
Agreement.
(e) This Agreement and the other Loan Documents may use several
different limitations, tests, or measurements to regulate the same or
similar matters. All such limitations, tests, and measurements are
cumulative and shall each be performed in accordance with their terms.
POST-PETITION LOAN AGREEMENT - Page 32
(f) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the
Lenders, and the Borrowers and are the products of all parties.
Accordingly, they shall not be construed against the Agent, the Lenders, or
the Borrowers merely because of the Agent's, the Lenders', or the
Borrowers' involvement in their preparation.
ARTICLE 2
LOANS AND LETTERS OF CREDIT
Section 2.1 TOTAL FACILITY. Subject to all of the terms and conditions of
this Agreement, the Lenders severally agree to make available a total credit
facility of $350,000,000 (the "TOTAL FACILITY") for use by any one or more of
the Borrowers from time to time during the term of this Agreement. The Total
Facility shall be composed of a revolving line of credit consisting of Revolving
Loans and Letters of Credit and Credit Support, as described in SECTION 2.2 and
SECTION 2.3.
Section 2.2 REVOLVING LOANS.
(a) AMOUNTS. Subject to the satisfaction of the conditions precedent
set forth in ARTICLE 10, and subject to the provisions of the next
paragraph of this SECTION 2.2(a), each Lender severally, but not jointly,
agrees, upon a Borrower's request from time to time on any Business Day
during the period from the Closing Date (or the date next following the
date of the Interim Order, whichever is later) to the Termination Date, to
make revolving loans (the "REVOLVING LOANS") to the Borrowers in amounts
not to exceed (except for the Agent with respect to Agent Advances) such
Lender's Pro Rata Share of the Borrowing Base. The Lenders, however, in
their unanimous discretion, may elect to make Revolving Loans or issue or
arrange to have issued Letters of Credit and Credit Support in excess of
the Available Credit on one or more occasions, but if they do so, neither
the Agent nor the Lenders shall be deemed thereby to have changed the
limits of the Borrowing Base or to be obligated to exceed such limits on
any other occasion. If the aggregate Post-Petition Revolver Outstandings
plus the aggregate Pre-Petition Revolver Outstandings exceed the Borrowing
Base, the Lenders may refuse to make or otherwise restrict the making of
Revolving Loans and the issuance of Letters of Credit and Credit Support as
the Lenders determine until such excess has been eliminated, subject to the
Agent's authority, in its sole discretion, to make Agent Advances pursuant
to the terms of SECTION 2.2(g).
Notwithstanding the foregoing, it is agreed that the Lenders will fund
only a one-time, single advance of $5,000,000 under the Equipment Sublimit
and will fund only a one-time, single advance for $30,000,000 under the
Real Estate Sublimit, in each case to be funded on the date next following
the date of entry of the Interim Order. It is further agreed that the
Equipment Sublimit and the Real Estate Sublimit are reducing components of
the Borrowing Base as provided by SECTION 4.3, and that the Borrowers are
not entitled to any subsequent additional advances thereunder. The Lenders
acknowledge that they are in receipt of Real Estate appraisals which (as to
the
POST-PETITION LOAN AGREEMENT - Page 33
$30,000,000 advance referenced above) satisfy the "appraisal" requirements
set forth in the definition of Eligible Real Estate.
(b) PROCEDURE FOR BORROWING.
(i) Each Borrowing shall be made upon a Borrower's irrevocable
written notice delivered to the Agent in the form of a notice of
borrowing in the form attached hereto as EXHIBIT C (a "NOTICE OF
BORROWING"), which must be received by the Agent prior to 11:00
a.m. (Dallas, Texas time) on the requested Funding Date,
specifying:
(A) the amount of the Borrowing shall be in an amount that is
not less than $100,000 or an integral multiple of $100,000 in excess thereof;
(B) the requested Funding Date, which shall be a Business Day;
and
(C) the account (as acceptable to the Agent pursuant to SECTION
2.2(C)) to which the proceeds of such Borrowing are to be deposited, or wire
transfer instructions satisfactory to the Agent with respect to any Borrowing
which is permitted to be funded directly to any Person other than a Borrower;
(ii) With respect to any request for Revolving Loans, in lieu of
delivering the above-described Notice of Borrowing, a Borrower
may give the Agent telephonic notice of such request by the
required time, with such telephonic notice to be confirmed in
writing no later than the Business Day following the giving of
such telephonic notice but the Agent at all times shall be
entitled to rely on such telephonic notice in making such
Revolving Loans, regardless of whether any such confirmation is
received by the Agent.
(c) DISBURSEMENT; RELIANCE UPON AUTHORITY. The Borrowers shall
deliver to the Agent, prior to the Closing Date, a writing setting forth
the deposit account to which the Agent is authorized by the Borrowers to
transfer the proceeds of the Revolving Loans requested pursuant to this
SECTION 2.2, which deposit account shall be reasonably acceptable to the
Agent. The Agent shall be entitled to rely conclusively on any individual's
request for Revolving Loans on behalf of a Borrower, the proceeds of which
are to be transferred to the deposit account specified by the Borrowers
pursuant to the immediately preceding sentence, until the Agent receives
written notice from the Borrowers that the proceeds of the Revolving Loans
are to be sent to a different deposit account. The Agent shall have no duty
to verify the identity of any individual representing himself or herself as
a person authorized by any Borrower to make such requests on its behalf.
(d) NO LIABILITY. The Agent shall not incur any liability to the
Borrowers as a result of acting upon any notice referred to in SECTION
2.2(b) and SECTION 2.2(c), which notice the Agent believes in good faith to
have been given by an officer or other person duly authorized by a Borrower
to request Revolving Loans on its behalf or for otherwise
POST-PETITION LOAN AGREEMENT - Page 34
acting in good faith under this SECTION 2.2, and the crediting of Revolving
Loans to a Borrower's deposit account, or wire transfer to such Person as a
Borrower shall direct, shall conclusively establish the obligation of the
Borrowers to repay such Revolving Loans as provided herein.
(e) NOTICE IRREVOCABLE. Any Notice of Borrowing (or telephonic
notice in lieu thereof) made pursuant to SECTION 2.2(B) shall be
irrevocable and such Borrower shall be bound to borrow the funds requested
therein in accordance therewith.
(f) MAKING OF REVOLVING LOANS.
(i) In the event that the Agent shall elect to have the terms of
this SECTION 2.2(f) apply to a requested Borrowing, then
promptly after receipt of a Notice of Borrowing or telephonic
notice pursuant to SECTION 2.2(b), the Agent shall notify the
Lenders by telecopy, telephone, or other similar form of
transmission, of the requested Borrowing. Each Lender shall make
the amount of such Lender's Pro Rata Share of the requested
Borrowing available to the Agent in immediately available funds,
to such account of the Agent as the Agent may designate, not
later than 12:00 noon (Dallas, Texas time) on the Funding Date
applicable thereto. After the Agent's receipt of the proceeds of
such requested Borrowing, the Agent shall make the proceeds of
such requested Borrowing available to the applicable Borrower on
the applicable Funding Date by transferring same day funds equal
to the proceeds of such Revolving Loans received by the Agent to
the deposit account designated pursuant to SECTION 2.2(c) or
disbursing such funds in such other manner as the Borrower
requesting such Borrowing may direct to the Agent.
(ii) Unless the Agent receives notice from a Lender on or prior to
the Closing Date or, with respect to any Borrowing after the
Closing Date, at least one Business Day prior to the date of
such Borrowing, that such Lender will not make available as and
when required hereunder to the Agent for the account of the
Borrowers the amount of that Lender's Pro Rata Share of such
Borrowing, the Agent may assume that each Lender has made such
amount available to the Agent in immediately available funds on
the Funding Date and the Agent may (but shall not be so
required), in reliance upon such assumption, make available to
the Borrowers on such date a corresponding amount. If and to the
extent any Lender shall not have made its full amount available
to the Agent in immediately available funds and the Agent in
such circumstances has made available to the applicable Borrower
such amount, that Lender shall on the Business Day following
such Funding Date make such amount available to the Agent,
together with interest at the Federal Funds Rate for each day
during such period. A notice by the Agent submitted to any
Lender with respect to amounts owing under this CLAUSE (ii)
shall be conclusive, absent manifest error. If such amount is so
made available, such payment to the Agent shall
POST-PETITION LOAN AGREEMENT - Page 35
constitute such Lender's Revolving Loan for all purposes of this
Agreement. If such amount is not made available to the Agent on
the Business Day following the Funding Date, the Agent will
notify the Borrowers of such failure to fund and, upon demand by
the Agent, the Borrowers shall pay such amount to the Agent for
the Agent's account, together with interest thereon for each day
elapsed since the date of such Borrowing, at a rate per annum
equal to the Interest Rate applicable at the time to the
Revolving Loans comprising such Borrowing. The failure of any
Lender to make any Revolving Loan on any Funding Date (any such
Lender, prior to the cure of such failure, being hereinafter
referred to as a "DEFAULTING LENDER") shall not relieve any
other Lender of any obligation hereunder to make a Revolving
Loan on such Funding Date, but no Lender shall be responsible
for the failure of any other Lender to make the Revolving Loan
to be made by such other Lender on any Funding Date.
(iii) The Agent shall not be obligated to transfer to a Defaulting
Lender any payments made by any Borrower to the Agent for the
Defaulting Lender's benefit, nor shall a Defaulting Lender be
entitled to the sharing of any payments hereunder. Amounts
payable to a Defaulting Lender shall instead be paid to or
retained by the Agent. The Agent may hold and, in its
discretion, re-lend to any Borrower the amount of all such
payments received or retained by it for the account of such
Defaulting Lender. Any amounts so re-lent to a Borrower shall
bear interest at the rate applicable to Revolving Loans and for
all other purposes of this Agreement shall be treated as if they
were Revolving Loans, PROVIDED, HOWEVER, that for purposes of
voting or consenting to matters with respect to the Loan
Documents and determining Pro Rata Shares, such Defaulting
Lender shall be deemed not to be a "Lender". Until a Defaulting
Lender cures its failure to fund its Pro Rata Share of any
Borrowing (A) such Defaulting Lender shall not be entitled to
any portion of the Unused Line Fee and (B) the Unused Line Fee
shall accrue in favor of the Lenders which have funded their
respective Pro Rata Shares of such requested Borrowing and shall
be allocated among such performing Lenders ratably based upon
their relative Commitments. This Section shall remain effective
with respect to such Lender until such time as the Defaulting
Lender shall no longer be in default of any of its obligations
under this Agreement. The terms of this Section shall not be
construed to increase or otherwise affect the Commitment of any
Lender, or relieve or excuse the performance by any Borrower of
its duties and obligations hereunder.
(g) AGENT ADVANCES.
(i) Subject to the limitations set forth in the provisos contained
in this SECTION 2.2(g) and SECTION 13.2, the Agent is hereby
authorized by the Borrowers and the Lenders, from time to time
in the Agent's sole discretion, (A) after the occurrence of a
Default or an Event of Default, or
POST-PETITION LOAN AGREEMENT - Page 36
(B) at any time that any of the other applicable conditions
precedent set forth in ARTICLE 10 have not been satisfied, to
make Revolving Loans to any Borrower on behalf of the Lenders
which the Agent, in its reasonable business judgment, deems
necessary or desirable (1) to preserve or protect the
Collateral, or any portion thereof, (2) to enhance the
likelihood of, or maximize the amount of, repayment of the
Revolving Loans and other Obligations, or (3) to pay any other
amount chargeable to the Borrowers pursuant to the terms of this
Agreement, including costs, fees, and expenses as described in
SECTION 15.7 (any of the advances described in this SECTION
2.2(g) being hereinafter referred to as "AGENT ADVANCES");
PROVIDED that the Majority Lenders may at any time revoke the
Agent's authorization contained in this SECTION 2.2(g) to make
Agent Advances, any such revocation to be in writing and to
become effective prospectively upon the Agent's receipt thereof;
(ii) The Agent Advances shall be repayable on demand and secured by
the Agent's Liens in and to the Collateral, shall constitute
Revolving Loans and Obligations hereunder, and shall bear
interest at the rate applicable to Base Rate Revolving Loans
from time to time. The Agent shall notify each Lender in writing
of each Agent Advance; PROVIDED that any delay or failure of the
Agent in providing any such notice to any Lender shall not
result in any liability or constitute the breach of any duty or
obligation of the Agent hereunder.
(h) SETTLEMENT. Except as may be specifically provided otherwise by
this SECTION 2.2, it is agreed that each Lender's funded portion of the
Revolving Loans is intended by the Lenders to be equal at all times to such
Lender's Pro Rata Share of the outstanding Revolving Loans. Notwithstanding
such agreement, the Agent, the Bank, and the Lenders agree (which agreement
shall not be for the benefit of or enforceable by the Borrowers) that in
order to facilitate the administration of this Agreement and the other Loan
Documents, settlement among them as to the Revolving Loans, including the
Agent Advances, shall take place on a periodic basis in accordance with the
following provisions:
(i) The Agent shall request settlement (a "SETTLEMENT") with the
Lenders on at least a weekly basis, or on a more frequent basis
if so determined by the Agent, (A) for itself, with respect to
each Agent Advance, and (B) with respect to collections
received, in each case, by notifying the Lenders of such
requested Settlement by telecopy, telephone, or other similar
form of transmission, of such requested Settlement, no later
than 11:00 a.m. (Dallas,Texas time) on the date of such
requested Settlement (the "SETTLEMENT DATE"). Each Lender (other
than the Agent, in the case of Agent Advances) shall make the
amount of such Lender's Pro Rata Share of the outstanding
principal amount of the Agent Advances with respect to which
Settlement is requested available to the Agent, to such account
of the Agent as the Agent may designate, not later than 2:00
p.m. (Dallas,
POST-PETITION LOAN AGREEMENT - Page 37
Texas time), on the Settlement Date applicable thereto,
which may occur before or after the occurrence or during the
continuation of a Default or an Event of Default and whether or
not the applicable conditions precedent set forth in ARTICLE 10
have then been satisfied. Such amounts made available to the
Agent shall be applied against the amounts of the applicable
Agent Advance and, together with the portion of such Agent
Advance representing the Bank's Pro Rata Share thereof, shall
constitute Revolving Loans of the Lenders, respectively. If any
such amount is not made available to the Agent by any Lender on
the Settlement Date applicable thereto, the Agent shall, on
behalf of itself with respect to each Agent Advance, be entitled
to recover such amount on demand from such Lender together with
interest thereon at the Federal Funds Rate for the first three
(3) days from and after the Settlement Date and thereafter at
the Interest Rate then applicable to Revolving Loans.
(ii) Notwithstanding the foregoing, not more than one (1) Business
Day after demand is made by the Agent (whether before or after
the occurrence of a Default or an Event of Default and
regardless of whether the Agent has requested a Settlement with
respect to an Agent Advance), each Lender (A) shall irrevocably
and unconditionally purchase and receive from the Bank or the
Agent, as applicable, without recourse or warranty, an undivided
interest and participation in such Agent Advance equal to such
Lender's Pro Rata Share of such Agent Advance and (B) if
Settlement has not previously occurred with respect to such
Agent Advance, upon demand by the Bank or the Agent, as
applicable, shall pay to the Bank or the Agent, as applicable,
as the purchase price of such participation an amount equal to
one-hundred percent (100%) of such Lender's Pro Rata Share of
such Agent Advances. If such amount is not in fact made
available to the Agent by any Lender, the Agent shall be
entitled to recover such amount on demand from such Lender
together with interest thereon at the Federal Funds Rate for the
first three (3) days from and after such demand and thereafter
at the Interest Rate then applicable to Revolving Loans.
(iii) From and after the date, if any, on which any Lender purchases
an undivided interest and participation in any Agent Advance
pursuant to CLAUSE (ii) preceding, the Agent shall promptly
distribute to such Lender such Lender's Pro Rata Share of all
payments of principal and interest and all proceeds of
Collateral received by the Agent in respect of such Agent
Advance.
(iv) Between Settlement Dates, to the extent no Agent Advances are
outstanding, the Agent may pay over to the Bank any payments
received by the Agent, which in accordance with the terms of
this Agreement would be applied to the reduction of the
Revolving Loans, for application to the Bank's Revolving Loans.
If, as of any Settlement Date, collections
POST-PETITION LOAN AGREEMENT - Page 38
received since the then immediately preceding Settlement Date
have been applied to the Bank's Revolving Loans (other than to
Agent Advances in which a Lender has not yet funded its purchase
of a participation pursuant to SECTION 2.2(h)(ii)), as provided
for in the previous sentence, the Bank shall pay to the Agent
for the accounts of the Lenders, to be applied to the
outstanding Revolving Loans of such Lenders, an amount such that
each Lender shall, upon receipt of such amount, have, as of such
Settlement Date, its Pro Rata Share of the Revolving Loans.
During the period between Settlement Dates, the Bank with
respect to the Agent with respect to Agent Advances, and each
Lender with respect to the Revolving Loans other than Agent
Advances, shall be entitled to interest at the applicable rate
or rates payable under this Agreement on the actual average
daily amount of funds employed by the Bank, the Agent, and the
Lenders.
(i) NOTATION. The Agent shall record on its books the principal
amount of the Revolving Loans owing to each Lender, including the Agent
Advances owing to the Agent, from time to time. In addition, each Lender is
authorized, at such Lender's option, to note the date and amount of each
payment or prepayment of principal of such Lender's Revolving Loans in its
books and records, including computer records, such books and records
constituting presumptive evidence, absent manifest error, of the accuracy
of the information contained therein.
(j) LENDERS' FAILURE TO PERFORM. All Revolving Loans (other than
Agent Advances) shall be made by the Lenders simultaneously and in
accordance with their Pro Rata Shares. It is understood that (i) no Lender
shall be responsible for any failure by any other Lender to perform its
obligation to make any Revolving Loans hereunder, nor shall any Commitment
of any Lender be increased or decreased as a result of any failure by any
other Lender to perform its obligation to make any Revolving Loans
hereunder, (ii) no failure by any Lender to perform its obligation to make
any Revolving Loans hereunder shall excuse any other Lender from its
obligation to make any Revolving Loans hereunder, and (iii) the obligations
of each Lender hereunder shall be several, not joint and several.
(k) REVOLVING NOTES. The Borrowers shall execute and deliver to the
Agent, on behalf of each Lender, effective as of the Closing Date and on
the date of the assignment of any portion of any Lender's Revolving Loans,
a Revolving Note, to evidence such Lender's Revolving Loans, in the
principal amount equal to the amount of such Lender's Commitment with
respect to the Revolving Loans.
Section 2.3 LETTERS OF CREDIT AND CREDIT SUPPORT.
(a) AGREEMENT TO ISSUE OR CAUSE TO ISSUE. Subject to the terms and
conditions of this Agreement, and in reliance upon the representations and
warranties of the Borrowers herein set forth, the Agent agrees (i) to cause
the Letter of Credit Issuer to issue for the account of any of the
Borrowers (whether one or more) one or more commercial/documentary and
standby letters of credit (each a "LETTER OF CREDIT" and
POST-PETITION LOAN AGREEMENT - Page 39
collectively, the "LETTERS OF CREDIT") and/or (ii) to provide credit
support or other enhancement to a Letter of Credit Issuer acceptable to the
Agent, which issues a Letter of Credit for the account of a Borrower (any
such credit support or enhancement being herein referred to as a "CREDIT
SUPPORT") in accordance with this SECTION 2.3 from time to time during the
term of this Agreement, PROVIDED, HOWEVER, no Letter of Credit or Credit
Support may be used for any industrial revenue bond or industrial
development bond credit enhancement transaction, it being understood that
Letters of Credit and Credit Support are to be provided only in conjunction
with the Borrowers' ordinary course of business with their vendors.
(b) AMOUNTS; OUTSIDE EXPIRATION DATE. The Agent shall not have any
obligation to take steps to issue or cause to be issued any Letter of
Credit or to provide Credit Support at any time if: (i) the maximum face
amount of the requested Letter of Credit or Credit Support is greater than
the Unused Letter of Credit Subfacility at such time; (ii) after taking
into account the maximum undrawn amount of the requested Letter of Credit
or Credit Support (PROVIDED that the requesting Borrower shall, to the
Agent's satisfaction, have made provision for all commissions, fees, and
charges due from such Borrower in connection with the opening of the
requested Letter of Credit or Credit Support), the Availability at such
time would be less than the minimum amount prescribed by SECTION 9.25; or
(iii) such Letter of Credit or Credit Support has an expiration date later
than thirty (30) days prior to the Stated Termination Date or more than
twelve (12) calendar months from the date of issuance for standby letters
of credit and six (6) calendar months from the date of issuance for
commercial or documentary letters of credit.
(c) OTHER CONDITIONS. In addition to being subject to the
satisfaction of the applicable conditions precedent contained in ARTICLE
10, the obligation of the Agent to issue or to cause to be issued any
Letter of Credit or to provide Credit Support is subject to the following
conditions precedent having been satisfied in a manner satisfactory to the
Agent:
(i) The Borrowers shall have delivered to the Letter of Credit
Issuer, at such times and in such manner as the Letter of Credit
Issuer may prescribe, an application in form and substance
satisfactory to the Letter of Credit Issuer and satisfactory to
the Agent for the issuance of the Letter of Credit and such
other documents as may be required pursuant to the terms
thereof, and the form and terms of the proposed Letter of Credit
shall be satisfactory to the Agent and the Letter of Credit
Issuer (PROVIDED that in the event any term of such application
or any other document is inconsistent with the terms of this
Agreement and the Letter of Credit Issuer and the Agent are the
same Person, then the terms of this Agreement shall be
controlling); and
(ii) As of the date of issuance, no order of any court, arbitrator,
or Governmental Authority shall purport by its terms to enjoin
or restrain banks generally from issuing letters of credit of
the type and in the amount
POST-PETITION LOAN AGREEMENT - Page 40
of the proposed Letter of Credit, and no law, rule, or
regulation applicable to banks generally and no request or
directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over banks generally
shall prohibit, or request that the Letter of Credit Issuer
refrain from, the issuance of letters of credit generally or the
issuance of such proposed Letter of Credit.
(d) ISSUANCE OF LETTERS OF CREDIT.
(i) REQUEST FOR ISSUANCE. Any Borrower that wishes to cause the
issuance of a Letter of Credit or any Credit Support shall give
the Agent three (3) Business Days prior written notice of such
Borrower's request for the issuance of such Letter of Credit or
Credit Support. Such notice shall be irrevocable and shall
specify the original amount of the Letter of Credit or Credit
Support requested, the effective date (which date shall be a
Business Day) of issuance of such requested Letter of Credit or
Credit Support, whether such Letter of Credit or Credit Support
may be drawn in a single or in partial draws, the date on which
such requested Letter of Credit or Credit Support is to expire
(which date shall be a Business Day), the purpose for which such
Letter of Credit or Credit Support is to be issued, and the
beneficiary of the requested Letter of Credit or Credit Support,
and in addition shall include as an attachment the proposed form
of any requested Letter of Credit.
(ii) RESPONSIBILITIES OF THE AGENT; ISSUANCE. The Agent shall
determine, as of the Business Day immediately preceding the
requested effective date of issuance of the Letter of Credit or
Credit Support set forth in the notice from a Borrower pursuant
to SECTION 2.3(d)(i), (A) the amount of the Unused Letter of
Credit Subfacility and (B) the Availability as of such date. If
the amount of the requested Letter of Credit or Credit Support
is not greater than the Unused Letter of Credit Subfacility the
Agent shall, so long as the other conditions required by this
Agreement are met, cause the Letter of Credit Issuer to issue
the requested Letter of Credit or Credit Support on such
requested effective date of issuance.
(iii) NOTICE OF ISSUANCE. On each Settlement Date, the Agent shall
give notice to each Lender of the issuance of all Letters of
Credit and Credit Support issued since the last Settlement Date.
(iv) EXTENSIONS AND AMENDMENTS. The Agent shall not be obligated to
cause the Letter of Credit Issuer to extend or amend any Letter
of Credit or Credit Support issued pursuant hereto unless the
requirements of this SECTION 2.3 are met as though a new Letter
of Credit or Credit Support were being requested and issued.
With respect to any Letter of Credit or Credit Support which
contains any "evergreen" or automatic renewal provision, each
Lender shall be deemed to have consented to any such
POST-PETITION LOAN AGREEMENT - Page 41
extension or renewal unless any such Lender shall have provided
to the Agent, not less than thirty (30) days prior to the last
date on which the Letter of Credit Issuer can in accordance with
the terms of the applicable Letter of Credit or Credit Support
decline to extend or renew such Letter of Credit or Credit
Support, written notice that it declines to consent to any such
extension or renewal; PROVIDED, that if all of the requirements
of this SECTION 2.3 are met and no Default or Event of Default
exists, no Lender shall decline to consent to any such extension
or renewal.
(e) PAYMENTS PURSUANT TO LETTERS OF CREDIT.
(i) PAYMENT OF LETTER OF CREDIT AND CREDIT SUPPORT OBLIGATIONS. The
Borrower for whose account any Letter of Credit or Credit
Support is issued agrees immediately upon demand to reimburse
the Letter of Credit Issuer for any draw under any such Letter
of Credit and the Agent for the account of the Lenders upon any
payment pursuant to any Credit Support, and to pay the Letter of
Credit Issuer and the Agent the amount of all other obligations
and other amounts payable to the Letter of Credit Issuer under
or in connection with any Letter of Credit immediately when due,
irrespective of any claim, set-off, defense, or other right
which such Borrower may have at any time against the Letter of
Credit Issuer or any other Person.
(ii) REVOLVING LOANS TO SATISFY REIMBURSEMENT OBLIGATIONS. Each
drawing under any Letter of Credit or Credit Support shall
constitute a request by the applicable Borrower to the Agent for
a Borrowing of a Base Rate Revolving Loan in the amount of such
drawing. The Funding Date with respect to such Borrowing shall
be the date of such drawing. In the event that the Letter of
Credit Issuer of any Letter of Credit honors a draw under such
Letter of Credit or the Agent shall have made any payment
pursuant to any Credit Support and the Borrower for whose
account such Letter of Credit or Credit Support was issued shall
not have repaid such amount to the Letter of Credit Issuer of
such Letter of Credit or the Agent, as applicable, pursuant to
SECTION 2.3(e)(i), the Agent shall, upon receiving notice of
such failure, notify each Lender of such failure, and each
Lender shall unconditionally pay to the Agent, for the account
of the Letter of Credit Issuer or the Agent, as applicable, as
and when provided hereinbelow, an amount equal to such Lender's
Pro Rata Share of the amount of such payment in Dollars and in
same day funds. If the Agent so notifies the Lenders prior to
11:00 a.m. (Dallas, Texas time) on any Business Day, each Lender
shall make available to the Agent the amount of such payment, as
provided in the immediately preceding sentence, on such Business
Day. Such amounts paid by the Lenders to the Agent shall
constitute Revolving Loans which shall be deemed to have been
requested by such Borrower pursuant to SECTION 2.2 and made as
provided by SECTION 4.5.
POST-PETITION LOAN AGREEMENT - Page 42
(f) PARTICIPATIONS.
(i) PURCHASE OF PARTICIPATIONS. Immediately upon issuance of any
Letter of Credit or Credit Support in accordance with SECTION
2.3(d), each Lender shall be deemed to have irrevocably and
unconditionally purchased and received without recourse or
warranty, an undivided interest and participation equal to such
Lender's Pro Rata Share of the face amount of such Letter of
Credit or Credit Support provided through the Agent to the
Letter of Credit Issuer, if not the Agent, in connection with
the issuance of such Letter of Credit or Credit Support
(including all obligations of the Borrower for whose account
such Letter of Credit or Credit Support was issued and any
security therefor or guaranty pertaining thereto).
(ii) SHARING OF REIMBURSEMENT OBLIGATION PAYMENTS. Whenever the Agent
receives a payment from a Borrower on account of reimbursement
obligations in respect of a Letter of Credit or Credit Support
as to which the Agent has previously received for the account of
the Agent or the Letter of Credit Issuer thereof payment from a
Lender pursuant to SECTION 2.3(e)(ii), the Agent shall promptly
pay to such Lender such Lender's Pro Rata Share of such payment
from such Borrower in Dollars. Each such payment shall be made
by the Agent on the Business Day on which the Agent receives
immediately available funds paid to such Person pursuant to the
immediately preceding sentence, if received prior to 2:00 p.m.
(Dallas, Texas time) on such Business Day and otherwise on the
next succeeding Business Day.
(iii) DOCUMENTATION. Upon the request of any Lender, the Agent shall
furnish to such Lender copies of any Letter of Credit, Credit
Support, reimbursement agreement executed in connection
therewith, application for any Letter of Credit or Credit
Support, and such other documentation as may reasonably be
requested by such Lender.
(iv) OBLIGATIONS IRREVOCABLE. The obligation of each Lender to make
payments to the Agent, for the account of the Lenders, with
respect to any Letter of Credit or Credit Support and the
obligation of the Borrowers to make payments to the Agent, for
the account of the Lenders, with respect to any Letter of Credit
or Credit Support shall be irrevocable, not subject to any
qualification or exception whatsoever, including any of the
following circumstances:
(A) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents;
(B) the existence of any claim, set-off, defense, or other right
which such Borrower may have at any time against a beneficiary named in a Letter
of Credit or any transferee of any Letter of Credit (or any Person for whom any
such transferee may be acting), any Lender, the Agent, the Letter of Credit
Issuer, or any other Person, whether in connection
POST-PETITION LOAN AGREEMENT - Page 43
with this Agreement, any Letter of Credit, the transactions contemplated herein,
or any unrelated transactions (including any underlying transactions between
such Borrower or any other Person and the beneficiary named in any Letter of
Credit);
(C) any draft, certificate, or any 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;
(D) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents; or
(E) the occurrence of any Default or Event of Default.
(g) RECOVERY OR AVOIDANCE OF PAYMENTS. In the event any payment by
or on behalf of any Borrower received by the Agent with respect to any
Letter of Credit or Credit Support and distributed by the Agent to the
Lenders on account of their respective participations therein is thereafter
set aside, avoided, or recovered from the Agent in connection with any
receivership, liquidation, or bankruptcy proceeding, the Lenders shall,
upon demand by the Agent, pay to the Agent their respective Pro Rata Shares
of such amount set aside, avoided, or recovered, together with interest at
the rate required to be paid by the Agent upon the amount required to be
repaid by it.
(h) INDEMNIFICATION; EXONERATION; POWER OF ATTORNEY.
(i) INDEMNIFICATION. IN ADDITION TO AMOUNTS PAYABLE AS ELSEWHERE
PROVIDED IN THIS SECTION 2.3, EACH BORROWER HEREBY AGREES TO
PROTECT, INDEMNIFY, PAY, AND SAVE THE LENDERS AND THE AGENT
HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS,
LIABILITIES, DAMAGES, LOSSES, COSTS, CHARGES, AND EXPENSES
(INCLUDING ATTORNEYS COSTS) WHICH ANY LENDER OR THE AGENT (OTHER
THAN THE BANK IN ITS CAPACITY AS THE LETTER OF CREDIT ISSUER)
MAY INCUR OR BE SUBJECT TO AS A CONSEQUENCE, DIRECT OR INDIRECT,
OF THE ISSUANCE OF ANY LETTER OF CREDIT OR THE PROVISION OF ANY
CREDIT SUPPORT OR ENHANCEMENT IN CONNECTION THEREWITH (OTHER
THAN ANY SUCH CLAIMS, DEMANDS, LIABILITIES, DAMAGES, LOSSES,
COSTS, CHARGES, AND EXPENSES RESULTING FROM THE GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT OF SUCH LENDER OR THE AGENT). THE
AGREEMENT IN THIS SECTION 2.3(h)(i) SHALL SURVIVE PAYMENT OF ALL
OBLIGATIONS. NOTHING CONTAINED IN THIS AGREEMENT IS INTENDED TO
LIMIT ANY BORROWER'S RIGHTS, IF ANY, WITH RESPECT TO THE LETTER
OF CREDIT ISSUER WHICH ARISE AS A RESULT OF THE LETTER OF CREDIT
APPLICATION AND RELATED DOCUMENTS EXECUTED BY AND
POST-PETITION LOAN AGREEMENT - Page 44
BETWEEN ANY BORROWER AND THE LETTER OF CREDIT ISSUER.
(ii) ASSUMPTION OF RISK BY THE BORROWERS. As among the Borrowers, the
Lenders, and the Agent, the Borrowers assume all risks of the
acts and omissions of, or misuse of any of the Letters of Credit
by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Lenders
and the Agent shall not be responsible for: (A) the form,
validity, sufficiency, accuracy, genuineness, or legal effect of
any document submitted by any Person in connection with the
application for and issuance of and presentation of drafts with
respect to any of the Letters of Credit, even if it should prove
to be in any or all respects invalid, insufficient, inaccurate,
fraudulent, or forged; (B) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer
or assign any 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; (C) the
failure of the beneficiary of any Letter of Credit to comply
duly with conditions required in order to draw upon such Letter
of Credit; (D) 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; (E) errors in interpretation of technical terms; (F) any
loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any Letter of Credit
or of the proceeds thereof; (G) the misapplication by the
beneficiary of any Letter of Credit of the proceeds of any
drawing under such Letter of Credit; or (H) any consequences
arising from causes beyond the control of the Lenders or the
Agent, including any act or omission, whether rightful or
wrongful, of any present or future DE JURE or DE FACTO
Governmental Authority; PROVIDED that, subject to any
application for a Letter of Credit between the applicable
Borrower and the Letter of Credit Issuer, the applicable
Borrower shall retain any claim it may have, if any, against the
Letter of Credit Issuer with respect to any actual damages, but
excluding any consequential damages, suffered by such Borrower
which were directly caused by (1) the Letter of Credit Issuer's
willful misconduct or gross negligence in determining whether
documents presented under a Letter of Credit complied with such
Letter of Credit or (2) the Letter of Credit Issuer's willful
failure to make lawful payment under any Letter of Credit after
the presentation to it of a draft and all documents required
under such Letter of Credit strictly complying with the terms
and conditions of such Letter of Credit. None of the foregoing
shall affect, impair, or prevent the vesting of any rights or
powers of the Agent or any Lender under this SECTION 2.3(h).
(iii) EXONERATION. In furtherance and extension, and not in
limitation, of the specific provisions set forth above, any
action taken or omitted by the
POST-PETITION LOAN AGREEMENT - Page 45
Agent or any Lender under or in connection with any of the
Letters of Credit or any related certificates, in the absence of
gross negligence or willful misconduct, shall not put the Agent
or any Lender under any resulting liability to any Borrower or
relieve any Borrower of any of its obligations hereunder to any
such Person.
(iv) INDEMNIFICATION BY LENDERS. The Lenders agree to indemnify the
Letter of Credit Issuer (to the extent not reimbursed by the
Borrowers and without limiting the obligations of the Borrowers
hereunder) ratably in accordance with their respective Pro Rata
Shares, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses
(including Attorney Costs), or disbursements of any kind and
nature whatsoever that may be imposed on, incurred by, or
asserted against the Letter of Credit Issuer in any way relating
to or arising out of any Letter of Credit or the transactions
contemplated thereby or any action taken or omitted by the
Letter of Credit Issuer under any Letter of Credit or any Loan
Document in connection therewith; PROVIDED that no Lender shall
be liable for any of the foregoing to the extent it arises from
the gross negligence or willful misconduct of the Person to be
indemnified. Without limitation of the foregoing, each Lender
agrees to reimburse the Letter of Credit Issuer promptly upon
demand for its Pro Rata Share of any costs or expenses payable
by any Borrower to the Letter of Credit Issuer, to the extent
that the Letter of Credit Issuer is not promptly reimbursed for
such costs and expenses by a Borrower. The agreement contained
in this Section shall survive payment in full of all
Obligations.
(v) POWER OF ATTORNEY. In connection with all Inventory financed by
Letters of Credit, each Borrower hereby appoints the Agent, or
the Agent's designee, as its attorney, with full power and
authority: (A) to sign and/or endorse such Borrower's name upon
any warehouse or other receipts; (B) to sign such Borrower's
name on bills of lading and other negotiable and non-negotiable
documents; (C) to clear Inventory through customs in the Agent's
or such Borrower's name, and to sign and deliver to customs
officials powers of attorney in such Borrower's name for such
purpose; (D) to complete in such Borrower's or the Agent's name,
any order, sale, or transaction, obtain the necessary documents
in connection therewith, and collect the proceeds thereof; and
(E) to do such other acts and things as are necessary in order
to enable the Agent to obtain possession or control of such
Inventory and to obtain payment of the Obligations. Neither the
Agent nor its designee, as such Borrower's attorney, will be
liable for any acts or omissions, nor for any error of judgment
or mistakes of fact or law other than for gross negligence or
willful misconduct. This power, being coupled with an interest,
is irrevocable until all Obligations have been paid and
satisfied.
POST-PETITION LOAN AGREEMENT - Page 46
(vi) ACCOUNT PARTY. Each Borrower hereby authorizes and directs the
Letter of Credit Issuer to name any Borrower as the "Account
Party" in each Letter of Credit issued pursuant to this
Agreement and to deliver to the Agent all instruments,
documents, and other writings and property received by the
Letter of Credit Issuer pursuant to each such Letter of Credit,
and to accept and rely upon the Agent's instructions and
agreements with respect to all matters arising in connection
with each such Letter of Credit or the application therefor.
(vii) CONTROL OF INVENTORY. In connection with all Inventory financed
by Letters of Credit, each Borrower for whose account such
Letter of Credit was issued will, at the Agent's request,
instruct all suppliers, carriers, forwarders, customs brokers,
warehouses, or others receiving or holding cash, checks,
Inventory, documents, or instruments in which the Agent holds a
security interest to deliver them to the Agent and/or subject to
the Agent's order, and if they shall come into such Borrower's
possession, to deliver them, upon request, to the Agent in their
original form. Each such Borrower shall also, at the Agent's
request, designate the Agent as the consignee on all bills of
lading and other negotiable and non-negotiable documents.
(i) SUPPORTING LETTER OF CREDIT; CASH COLLATERAL. If,
notwithstanding the provisions of SECTION 2.3(b) and SECTION 12.1 any
Letter of Credit or Credit Support is outstanding upon the termination of
this Agreement, then upon such termination the Borrower for whose account
such Letter of Credit or such Credit Support was issued shall deposit with
the Agent, for the ratable benefit of the Agent and the Lenders, with
respect to each such Letter of Credit or such Credit Support then
outstanding, as the Majority Lenders in their discretion shall specify,
either (i) a standby letter of credit (a "Supporting LETTER OF CREDIT") in
form and substance satisfactory to the Agent, issued by an issuer
satisfactory to the Agent in an amount equal to the greatest amount for
which such Letter of Credit or such Credit Support may be drawn plus any
fees and expenses associated with such Letter of Credit or such Credit
Support, under which Supporting Letter of Credit the Agent is entitled to
draw amounts necessary to reimburse the Agent and the Lenders for payments
to be made by the Agent and the Lenders under such Letter of Credit or such
Credit Support and any fees and expenses associated with such Letter of
Credit or such Credit Support, or (ii) cash in amounts necessary to
reimburse the Agent and the Lenders for payments made by the Agent or the
Lenders under such Letter of Credit or such Credit Support and any fees and
expenses associated with such Letter of Credit or such Credit Support. Such
Supporting Letter of Credit or deposit of cash shall be held by the Agent,
for the ratable benefit of the Agent and the Lenders, as security for, and
to provide for the payment of, the aggregate undrawn amount of such Letters
of Credit or such Credit Support remaining outstanding.
Section 2.4 BANK PRODUCTS. Any Borrower may request and the Bank or the
Documentation Agent (as applicable) may, in its sole and absolute discretion,
arrange for such Borrower to obtain from the Bank, the Documentation Agent, or
the Bank's or the
POST-PETITION LOAN AGREEMENT - Page 47
Documentation Agent's (as applicable) Affiliates Bank Products, although no
Borrower is required to do so. To the extent Bank Products are provided by an
Affiliate of the Bank or the Documentation Agent, each Borrower agrees to
indemnify and hold the Bank or the Documentation Agent (as applicable) and the
Lenders harmless from any and all costs and obligations now or hereafter
incurred by the Bank, the Documentation Agent, or any of the Lenders which arise
from the indemnity given by the Bank or the Documentation Agent (as applicable)
to its Affiliates related to such Bank Products. The agreement contained in this
Section shall survive termination of this Agreement. Each Borrower acknowledges
and agrees that the obtaining of Bank Products from the Bank, the Documentation
Agent, or the Bank's or the Documentation Agent's (as applicable) Affiliates (a)
is in the sole and absolute discretion of the Bank, the Documentation Agent, or
their applicable Affiliates, and (b) is subject to all rules and regulations of
the Bank, the Documentation Agent, or their applicable Affiliates.
Section 2.5 EXTENSION OF STATED TERMINATION DATE. The Borrowers may, upon
written notice through the Parent to the Agent, given no earlier than April 15,
2003 and no later than May 15, 2003, extend the Stated Termination Date for one
three-month period (to September 30, 2003) if and only if (i) on the proposed
extension date, no Default or Event of Default shall have occurred and be
continuing (unless otherwise waived in accordance with this Agreement); and (ii)
concurrent with delivery of the notice required hereunder, the Borrowers deliver
to the Agent and the Lenders a twelve-month business plan and a new Budget for
the next six-month period, and such Budget must indicate that the Borrowers will
be in compliance with SECTIONS 9.22, 9.24, 9.25, of this Agreement during such
extended period. Subsequent to such extension, September 30, 2003, will be
deemed to be the Stated Termination Date.
If the foregoing three-month extension is granted as provided above, the
Borrowers may again extend the Stated Termination Date (as extended) to December
31, 2003 if (i) such written request is given no earlier than July 15, 2003 and
no later than August 15, 2003, and (ii) all other requirements set forth above
for the first extension are again satisfied (which in the case of a business
plan and Budget means that such business plan must cover the period ending
September 30, 2004 and March 31, 2004, respectively). Subsequent to such
extension, December 31, 2003 will be deemed to be the Stated Termination Date.
No other or further extensions of the Stated Termination Date are contemplated,
and the Agent and the Lenders are not obligated to grant any such other or
further extensions.
ARTICLE 3
INTEREST AND FEES
Section 3.1 INTEREST.
(a) INTEREST RATES. All outstanding Obligations shall bear interest
on the unpaid principal amount thereof (including, to the extent permitted
by law, on accrued interest thereon not paid when due) from the date made
until paid in full in cash at a rate determined by reference to the Base
Rate and this SECTION 3.1(a), but not to exceed the Maximum Rate. Except as
otherwise provided herein, the outstanding Obligations shall bear interest
at a fluctuating per annum rate equal to the lesser of (A) the Base Rate
PLUS
POST-PETITION LOAN AGREEMENT - Page 48
the Applicable Margin or (B) the Maximum Rate. Each change in the Base Rate
shall be reflected in the interest rate described in CLAUSE (A) preceding
as of the effective date of such change. Subject to SECTION 3.2, all
interest charges shall be computed on the basis of a year of 360 days and
actual days elapsed (which results in more interest being paid than if
computed on the basis of a 365-day year).
(b) DEFAULT RATE. During the existence of any Default or Event of
Default if the Agent or the Majority Lenders in their discretion so elect,
then, while such Default or Event of Default exists, the Obligations shall
bear interest at a rate per annum equal to the lesser of (i) the Default
Rate applicable thereto or (ii) the Maximum Rate.
Section 3.2 MAXIMUM INTEREST RATE. If the Interest Rate, absent the
limitation set forth in this SECTION 3.2, would have exceeded the Maximum Rate,
then the Interest Rate shall be the Maximum Rate, and, if in the future, the
Interest Rate would otherwise be less than the Maximum Rate, then the Interest
Rate shall remain at the Maximum Rate until such time as the amount of interest
paid hereunder equals the amount of interest which would have been paid if the
same had not been limited by the Maximum Rate. In the event that, upon payment
in full of the Obligations, the total amount of interest paid or accrued under
the terms of this Agreement is less than the total amount of interest which
would, but for this SECTION 3.2, have been paid or accrued if the Interest Rate
otherwise set forth in this Agreement had at all times been in effect, then the
Borrowers shall, to the extent permitted by applicable law, pay the Agent, for
the account of the Lenders, an amount equal to the excess of (a) the lesser of
(i) the amount of interest which would have been paid or accrued if the Maximum
Rate had, at all times, been in effect or (ii) the amount of interest which
would have been paid or accrued had the interest rate otherwise set forth in
this Agreement, at all times, been in effect over (b) the amount of interest
actually paid or accrued under this Agreement. The Agent, each Lender, and each
Borrower acknowledges, agrees, and declares that it is its intention to
expressly comply with all Requirements of Law in respect of limitations on the
amount or rate of interest that can legally be contracted for, charged, or
received under or in connection with the Loan Documents. Notwithstanding
anything to the contrary contained in any Loan Document (even if any such
provision expressly declares that it controls all other provisions of the Loan
Documents), in no contingency or event whatsoever shall the amount of interest
(including the aggregate of all charges, fees, benefits, or other compensation
which constitutes interest under any Requirement of Law) under the Loan
Documents paid by any Borrower, received by the Agent, the Letter of Credit
Issuer, or any Lender, agreed to be paid by any Borrower, or requested or
demanded to be paid by the Agent, the Letter of Credit Issuer, or any Lender,
exceed the Maximum Rate, and all provisions of the Loan Documents in respect of
the contracting for, charging, or receiving compensation for the use,
forbearance, or detention of money shall be limited as provided by this SECTION
3.2. In the event any such interest is paid to the Agent, the Letter of Credit
Issuer, or any Lender by the Borrowers, or any of them, in an amount or at a
rate which would exceed the Maximum Rate, the Agent, the Letter of Credit
Issuer, or such Lender, as the case may be, shall automatically apply such
excess to any unpaid amount of the Obligations other than interest, in inverse
order of maturity, or if the amount of such excess exceeds said unpaid amount,
such excess shall be paid to the paying Borrowers or Borrower, as applicable.
All interest paid, or agreed to be paid, by any Borrower, or taken, reserved, or
received by the Agent, the Letter of Credit Issuer, or any Lender, shall be
amortized, prorated, spread, and allocated in respect of the
POST-PETITION LOAN AGREEMENT - Page 49
Obligations throughout the full term of this Agreement. Notwithstanding any
provision contained in any of the Loan Documents, or in any other related
documents executed pursuant hereto, neither the Agent, the Letter of Credit
Issuer, nor any Lender shall ever be entitled to charge, receive, take, reserve,
collect, or apply as interest any amount which, together with all other interest
under the Loan Documents would result in a rate of interest under the Loan
Documents in excess of the Maximum Rate and, in the event the Agent, the Letter
of Credit Issuer, or any Lender ever charges, receives, takes, reserves,
collects, or applies any amount in respect of the Borrowers, or any of them,
that otherwise would, together with all other interest under the Loan Documents,
be in excess of the Maximum Rate, such amount shall automatically be deemed to
be applied in reduction of the unpaid principal balance of the Obligations and,
if such principal balance is paid in full, any remaining excess shall forthwith
be paid to the applicable Borrowers or Borrower. The Borrowers, the Agent, the
Letter of Credit Issuer, and the Lenders shall, to the maximum extent permitted
under any Requirement of Law, (A) characterize any non-principal payment as a
standby fee, commitment fee, prepayment charge, delinquency charge, expense, or
reimbursement for a third-party expense rather than as interest and (B) exclude
prepayments, acceleration, and the effects thereof. Nothing in any Loan Document
shall be construed or so operate as to require or obligate the Borrowers, or any
of them, to pay any interest, fees, costs, or charges greater than is permitted
by any Requirement of Law. Subject to the foregoing, the Borrowers hereby agree
that the actual effective rate of interest from time to time existing under the
Loan Documents, including all amounts agreed to by the Borrowers or charged or
received by the Agent, the Letter of Credit Issuer, or the Lenders pursuant to
and in accordance with the Loan Documents, which may be deemed to be interest
under any Requirement of Law, shall be deemed to be a rate which is agreed to
and stipulated by the Borrowers and the Lenders in accordance with Requirements
of Law.
Section 3.3 UNUSED LINE FEE. Until the Revolving Loans have been paid in
full and this Agreement terminated, the Borrowers agree to pay, on the first day
of each calendar month and on the Termination Date, to the Agent, for the
account of the Lenders, in accordance with their respective Pro Rata Shares, an
unused line fee (the "UNUSED LINE FEE") equal to the Unused Line Fee Percentage
multiplied by the amount by which the Maximum Revolver Amount exceeded the sum
of the average daily outstanding amount of the Revolving Loans and the average
daily undrawn face amount of all outstanding Letters of Credit and Credit
Support during the immediately preceding calendar month or shorter period if
calculated on the Termination Date. Subject to SECTION 3.2, the Unused Line Fee
shall be computed on the basis of a 360-day year for the actual number of days
elapsed. For purposes of calculating the Unused Line Fee pursuant to this
SECTION 3.3, any payment received by the Agent (if received prior to 2:00 p.m.
Dallas, Texas time) shall be deemed to be credited to the Borrowers' Loan
Account on the date such payment is received by the Agent.
Section 3.4 LETTER OF CREDIT FEE. The Borrowers agree to pay to the Agent,
for the account of the Lenders, in accordance with their respective Pro Rata
Shares, for each Letter of Credit or Credit Support, a fee (the "LETTER OF
CREDIT FEE") equal to the Letter of Credit Fee Percentage, or during the
existence of any Default or Event of Default the Default Rate with respect to
Letters of Credit, multiplied by the undrawn face amount of each Letter of
Credit or Credit Support, PLUS all out-of-pocket costs, fees, and expenses
incurred by the Agent and the Letter of Credit Issuer in connection with the
application for, processing of, issuance of, or
POST-PETITION LOAN AGREEMENT - Page 50
amendment to any Letter of Credit or Credit Support, which costs, fees, and
expenses shall include a "fronting fee" of one-quarter percent (0.25%) payable
to the Letter of Credit Issuer on the date of issuance of each Letter of Credit
or Credit Support. The Letter of Credit Fee shall be payable quarterly in
arrears on the first day of each calendar quarter following any calendar quarter
in which a Letter of Credit or Credit Support was issued and/or in which a
Letter of Credit or Credit Support remains outstanding and on the Termination
Date. Subject to SECTION 3.2, the Letter of Credit Fee shall be computed on the
basis of a 360-day year for the actual number of days elapsed.
Section 3.5 FACILITY FEE. The Borrowers agree to pay (to the Agent, for the
ratable benefit of the Lenders) the Facility Fee on the date of execution of
this Agreement.
Section 3.6 OTHER FEES. The Borrowers agree to pay timely when due all
other fees and expenses of the Agent as provided for in this Agreement,
including, without limitation, the Annual Agent Fee (for the benefit of the
Agent), which is due initially on March 1, 2002, and on each March 1 thereafter
on a non-prorated basis.
ARTICLE 4
PAYMENTS AND PREPAYMENTS
Section 4.1 REVOLVING LOANS. The Borrowers shall repay the outstanding
principal balance of the Revolving Loans together with all other Obligations,
including all accrued but unpaid interest thereon, on the Termination Date. The
Borrowers may prepay the Revolving Loans at any time, and reborrow subject to
the terms of this Agreement. In addition, and without limiting the generality of
the foregoing, upon demand the Borrowers shall pay to the Agent, for the account
of the Lenders, the amount, if any and without duplication, by which the
Aggregate Revolver Outstandings LESS the aggregate amount of Pending Revolving
Loans exceeds the Borrowing Base. Accrued interest on the Revolving Loans shall
be due and payable in arrears on the first day of each calendar month and on the
Termination Date.
Section 4.2 REDUCTION OF COMMITMENTS; TERMINATION OF FACILITY.
(a) The Borrowers may reduce the Maximum Revolver Amount to an
amount, not less than $200,000,000, as may be designated by the Borrowers
at any time effective upon five (5) Business Days prior written notice
thereof to the Agent and the Lenders, PROVIDED, that any such reduction (i)
shall be in an amount of at least $5,000,000 or any integral multiple of
$1,000,000 in excess thereof and (ii) shall be permanent. The Lenders shall
have no obligation at any time to increase the Maximum Revolver Amount
following any such reduction.
(b) The Borrowers may terminate this Agreement upon at least thirty
(30) days prior written notice thereof to the Agent and the Lenders, upon
the payment in full of all outstanding Revolving Loans, together with
accrued and unpaid interest thereon, and the cancellation and return of all
outstanding Letters of Credit and Credit Support (or, alternatively, with
respect to each such Letter of Credit or Credit Support, the furnishing
POST-PETITION LOAN AGREEMENT - Page 51
to the Agent, for the benefit of the Lenders, of a Supporting Letter of
Credit or cash deposit, in each case in amounts and in the manner required
by SECTION 2.3(i)).
Section 4.3 PAYMENTS AND PREPAYMENTS FROM COLLECTIONS AND DISPOSITIONS.
(a) All proceeds in cash from the day-to-day, ordinary course of
business collections from Accounts and from Inventory sales will be applied
FIRST, to the Pre-Petition Accounts Loan Balance, to the Pre-Petition
Inventory Loan Balance, and to the Pre-Petition M&E Loan Balance (in that
order), until paid in full, AND THEN, to the Post-Petition Revolver
Outstandings.
(b) All Net Proceeds in cash from Accounts and Inventory pursuant to
a Disposition, including a Strategic Disposition, will be applied FIRST, to
the Pre-Petition Accounts Loan Balance and to the Pre-Petition Inventory
Loan Balance, and to the Pre-Petition M&E Loan Balance (in that order)
until paid in full, AND THEN to the Post-Petition Revolver Outstandings.
(c) All Net Proceeds in cash from Dispositions of Equipment (other
than in connection with a Strategic Disposition, and except as provided in
SECTION 4.3(d) below) will be applied FIRST, to the Pre-Petition M&E Loan
Balance until paid in full, AND then to the Post-Petition M&E Loan Balance
until paid in full, in each case to the extent of the Loan Value of
Equipment of such Equipment; any remaining Net Proceeds (if any) will be
applied on a percentage basis as follows:
(i) until the amount of the outstanding principal balance of the
Equipment Sublimit advances is less than or equal to
$15,000,000, (x) 65% of such Net Proceeds will be applied FIRST
to the Pre-Petition M&E Loan Balance, THEN to the outstanding
Post-Petition M&E Loan Balance, AND THEN to the outstanding
balance under the Real Estate Sublimit (in that order, to the
extent a balance exists for any of the foregoing and to the
extent Net Proceeds are available for such application), and (y)
35% will be applied FIRST to the Pre-Petition Revolver
Outstandings, AND THEN to the Post-Petition Revolver
Outstandings;
(ii) until the amount of the outstanding principal balance of the
Equipment Sublimit advances is less than or equal to $5,000,000,
(x) 50% of such Net Proceeds will be applied FIRST to the
Pre-Petition M&E Loan Balance, THEN to the outstanding
Post-Petition M&E Loan Balance, AND THEN to the outstanding
balance under the Real Estate Sublimit (in that order, to the
extent a balance exists for any of the foregoing and to the
extent Net Proceeds are available for such application), and (y)
50% of such Net Proceeds will be applied FIRST to the
Pre-Petition Revolver Outstandings AND THEN, to the
Post-Petition Revolver Outstandings;
(iii) at such time as the outstanding principal balance of the
Equipment Sublimit advances is less than $5,000,000, (x) 35% of
such Net Proceeds will be applied FIRST to the Pre-Petition M&E
Loan Balance, THEN to the
POST-PETITION LOAN AGREEMENT - Page 52
outstanding Post-Petition M&E Loan Balance, AND THEN to the
outstanding balance under the Real Estate Sublimit (in that
order, to the extent a balance exists for any of the foregoing
and to the extent Net Proceeds are available for such
application), and (y) 65% will be applied first to the
Pre-Petition Revolver Outstandings, and then, to the
Post-Petition Revolver Outstandings.
(d) Notwithstanding paragraph (c) above of this SECTION 4.3, the
first $4,000,000 of Net Proceeds in cash from Dispositions of Equipment for
which the Agent has no appraisal (other than in connection with a Strategic
Disposition or a Disposition of an entire business operating unit or bulk
sale of Equipment), will be allocated on a percentage basis identical to
the allocations set forth in subparagraphs (c)(i), (c)(ii), and (c)(iii)
above of this SECTION 4.3, as applicable; in all other instances of
Dispositions of Equipment for which the Agent has no appraisal, Net
Proceeds therefrom will be allocated on a percentage basis in accordance
with subparagraph (c)(i) of this SECTION 4.3.
(e) All Net Proceeds in cash from Dispositions of Real Estate (other
than in connection with a Strategic Disposition) will be applied FIRST (to
the extent of the Loan Value of Real Estate for such Real Estate) to the
unpaid advances under the Real Estate Sublimit until paid in full. Any
remaining Net Proceeds in cash from Dispositions of Real Estate, if any,
will be allocated on a percentage basis identical to the allocations set
forth in subparagraphs c(i), c(ii), and c(iii) above of this SECTION 4.3,
as applicable.
(f) Except as to SECTION 4.3(b) above, notwithstanding the foregoing
allocation requirements, the Net Proceeds of any Strategic Disposition, to
the extent they represent cash, will be allocated, as follows:
(i) first, to the unpaid advances under the Equipment Sublimit and
the Real Estate Sublimit to the extent of the Loan Value of Real
Estate or the Loan Value of Equipment for the Real Estate or
Equipment included as part of the subject Strategic Disposition;
and
(ii) any remaining Net Proceeds, if any, will be allocated as
follows: 65% of any such Net Proceeds will be allocated FIRST to
the Pre-Petition Revolver Outstandings, THEN to the
Post-Petition Revolver Outstandings, and the remaining 35% of
such proceeds will be allocated FIRST, to the unpaid advances
under the Equipment Sublimit balance, AND THEN, to the unpaid
advances under the Real Estate Sublimit.
(g) Any allocations to the principal balance of the Equipment
Sublimit advances and/or to the Real Estate Sublimit advances will
automatically result in equivalent permanent reductions in the Equipment
Sublimit and the Real Estate Sublimit, respectively (thus resulting in
permanent equivalent reductions in those components of the Borrowing Base).
It is agreed, however, that any application of proceeds to the Pre-Petition
M&E Loan Balance by reason of SECTIONS 4.3(a) and 4.3(b) above will not
result in any reduction of the Equipment Sublimit.
POST-PETITION LOAN AGREEMENT - Page 53
(h) As to any unpaid advances allocations provided above, all
allocations to principal, interest and fees will be made as determined by
the Agent.
Section 4.4 PAYMENTS BY THE BORROWERS.
(a) All payments to be made by the Borrowers shall be made without
set-off, recoupment, or counterclaim. Except as otherwise expressly
provided herein, all payments by the Borrowers shall be made to the Agent
for the account of the Lenders at the Agent's address set forth in SECTION
15.8, and shall be made in Dollars and in immediately available funds, no
later than 2:00 p.m. (Dallas, Texas time) on the date specified herein. Any
payment received by the Agent later than 2:00 p.m. (Dallas, Texas time)
shall be deemed to have been received on the following Business Day and any
applicable interest or fee shall continue to accrue.
(b) Whenever any payment is due on a day other than a Business Day,
such payment shall be due on the following Business Day, and such extension
of time shall in such case be included in the computation of interest or
fees, as the case may be.
(c) Unless the Agent receives notice from the Borrowers prior to the
date on which any payment is due to the Lenders that the Borrowers will not
make such payment in full as and when required, the Agent may assume that
the Borrowers have made such payment in full to the Agent on such date in
immediately available funds and the Agent may (but shall not be so
required), in reliance upon such assumption, distribute to each Lender on
such due date an amount equal to the amount then due such Lender. If and to
the extent the Borrowers have not made such payment in full to the Agent,
each Lender shall repay to the Agent on demand such amount distributed to
such Lender, together with interest thereon at the Federal Funds Rate for
each day from the date such amount is distributed to such Lender until the
date repaid.
Section 4.5 PAYMENTS AS REVOLVING LOANS. All payments of principal,
interest, reimbursement obligations in connection with Letters of Credit and
Credit Support, fees, premiums, and other sums payable hereunder, including,
without limitation, all reimbursement for expenses pursuant to SECTION 15.7,
may, at the option of the Agent, in its sole discretion, subject only to the
terms of this SECTION 4.5, be paid from the proceeds of Revolving Loans made
hereunder, whether made following a request by the Borrowers, or any of them,
pursuant to SECTION 2.2 or a deemed request as provided in this SECTION 4.5. The
Borrowers hereby irrevocably authorize the Agent to charge the Loan Account for
the purpose of paying principal, interest, reimbursement obligations in
connection with Letters of Credit and Credit Support, fees, premiums, and other
sums payable hereunder, including, without limitation, reimbursing expenses
pursuant to SECTION 15.7, and agree that all such amounts charged shall
constitute Revolving Loans (including Agent Advances) and that all such
Revolving Loans so made shall be deemed to have been requested pursuant to
SECTION 2.2.
Section 4.6 APPORTIONMENT, APPLICATION, AND REVERSAL OF PAYMENTS. Except
as otherwise expressly provided by this Agreement, aggregate principal and
interest payments shall be apportioned ratably among the Lenders (according to
the unpaid principal balance of the Revolving Loans to which such payments
relate held by each Lender) and payments of the fees
POST-PETITION LOAN AGREEMENT - Page 54
shall, as applicable, be apportioned ratably among the Lenders. All payments
shall be remitted to the Agent and all such payments not relating to principal
or interest of specific Revolving Loans, or not constituting payment of specific
fees, and all proceeds of any Borrower's Accounts or any other Collateral
received by the Agent, shall be applied, ratably, subject to the provisions of
this Agreement, FIRST, to pay any fees, indemnities, or expense reimbursements,
then due to the Agent from the Borrowers; SECOND, to pay any fees or expense
reimbursements then due to the Lenders from the Borrowers; THIRD, to pay
interest due in respect of the Revolving Loans; FOURTH, to pay or prepay
principal of the Agent Advances; FIFTH, to pay or prepay principal of the
Revolving Loans (other than the Agent Advances), unpaid reimbursement
obligations in respect of Letters of Credit and Credit Support, and any amounts
relating to Bank Products; and SIXTH, to the payment of any other Obligation due
to the Agent or any Lender by the Borrowers. The Agent shall promptly distribute
to each Lender, pursuant to the applicable wire transfer instructions received
from each Lender in writing, such funds as it may be entitled to receive,
subject to a Settlement delay as provided for in SECTION 2.2(h). The Agent and
the Lenders shall have the continuing and exclusive right to apply and reverse
and reapply any and all such proceeds and payments to any portion of the
Obligations.
Section 4.7 INDEMNITY FOR RETURNED PAYMENTS. If after receipt of any
payment which is applied to the payment of all or any part of the Obligations,
the Agent or any Lender is for any reason compelled to surrender such payment or
proceeds to any Person because such payment or application of proceeds is
invalidated, declared fraudulent, set aside, determined to be void or voidable
as a preference, impermissible set-off, or a diversion of trust funds, or for
any other reason, then the Obligations or part thereof intended to be satisfied
shall be revived and continued and this Agreement shall continue in full force
as if such payment or proceeds had not been received by the Agent or such Lender
and the Borrowers shall be liable to pay to the Agent and the Lenders, and each
Borrower hereby indemnifies the Agent and the Lenders and holds the Agent and
the Lenders harmless for the amount of such payment or proceeds surrendered. The
provisions of this SECTION 4.7 shall be and remain effective notwithstanding any
contrary action which may have been taken by the Agent or any Lender in reliance
upon such payment or application of proceeds, and any such contrary action so
taken shall be without prejudice to the Agent's and the Lenders' rights under
this Agreement and shall be deemed to have been conditioned upon such payment or
application of proceeds having become final and irrevocable. The provisions of
this SECTION 4.7 shall survive the termination of this Agreement.
Section 4.8 THE AGENT'S AND THE LENDERS' BOOKS AND RECORDS; MONTHLY
STATEMENTS. The Borrowers agree that the Agent's and each Lender's books and
records showing the Obligations and the transactions pursuant to this Agreement
and the other Loan Documents shall be admissible in any action or proceeding
arising therefrom, and shall constitute presumptive proof thereof, irrespective
of whether any Obligation is also evidenced by a promissory note or other
instrument. The Agent will provide to the Borrowers a monthly statement of
Revolving Loans, payments, and other transactions pursuant to this Agreement.
Such statement shall be deemed correct, accurate, and binding on the Borrowers
and an account stated (except for reversals and reapplications of payments made
as provided in SECTION 4.6 and corrections of errors discovered by the Agent),
unless a Borrower notifies the Agent in writing to the contrary within thirty
(30) days after such statement is rendered. In the event a timely written notice
of
POST-PETITION LOAN AGREEMENT - Page 55
objections is given by a Borrower, only the items to which exception is
expressly made will be considered to be disputed.
ARTICLE 5
TAXES AND YIELD PROTECTION
Section 5.1 TAXES.
(a) Any and all payments by or on behalf of the Borrowers, or any of
them, to the Agent or any Lender under this Agreement and any other Loan
Document shall be made free and clear of, and without deduction or
withholding for any Taxes. In addition, the Borrowers shall pay all Other
Taxes.
(b) The Borrowers agree to indemnify and hold harmless the Agent and
each Lender for the full amount of Taxes or Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under
this Section) paid by the Agent or any Lender and any liability (including
penalties, interest, additions to tax, and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification shall be
made within thirty (30) days after the date the Agent or any Lender makes
written demand therefor.
(c) If the Borrowers shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder to
the Agent or any Lender, then:
(i) the sum payable shall be increased as necessary so that after
making all required deductions and withholdings (including,
without limitation, deductions and withholdings applicable to
additional sums payable under this Section) the Agent or such
Lender, as the case may be, receives an amount equal to the sum
it would have received had no such deductions or withholdings
been made;
(ii) the Borrowers shall make such deductions and withholdings;
(iii) the Borrowers shall pay the full amount deducted or withheld to
the relevant taxing authority or other authority in accordance
with any Requirement of Law; and
(iv) the Borrowers shall also pay to the Agent, for the account of
each Lender, or each Lender at the time interest is paid, all
additional amounts which the respective Lender specifies as
necessary to preserve the after-tax yield such Lender would have
received if such Taxes or Other Taxes had not been imposed.
(d) Within thirty (30) days after the date of any payment by the
Borrowers of Taxes or Other Taxes, the Borrowers shall furnish the Agent
the original or a certified
POST-PETITION LOAN AGREEMENT - Page 56
copy of a receipt evidencing payment thereof, or other evidence of payment
satisfactory to the Agent.
(e) If the Borrowers are required to pay additional amounts to the
Agent or any Lender pursuant to SECTION 5.1(c), then the applicable Lender
shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its lending office so as to
eliminate any such additional payment by the Borrowers which may thereafter
accrue, if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.
Section 5.2 INCREASED COSTS AND REDUCTION OF RETURN. If any Lender shall
have determined that (i) the introduction of any Capital Adequacy Regulation,
(ii) any change in any Capital Adequacy Regulation, (iii) any change in the
interpretation or administration of any Capital Adequacy Regulation by any
central bank or other Governmental Authority charged with the interpretation or
administration thereof, or (iv) compliance by such Lender or any corporation or
other entity controlling such Lender with any Capital Adequacy Regulation,
affects or would affect the amount of capital required or expected to be
maintained by such Lender or any corporation or other entity controlling such
Lender and (taking into consideration such Lender's or such corporation's or
other entity's policies with respect to capital adequacy and such Lender's
desired return on capital) determines that the amount of such capital is
increased as a consequence of its Commitments, loans, credits, or obligations
under this Agreement, then, upon demand of such Lender to the Borrowers through
the Agent, the Borrowers shall pay to such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender for such increase.
Section 5.3 CERTIFICATES OF LENDERS. Any Lender claiming reimbursement or
compensation under this ARTICLE 5 shall deliver to the Borrowers (with a copy to
the Agent) a certificate setting forth in reasonable detail the amount payable
to such Lender hereunder and such certificate shall be conclusive and binding on
the Borrowers in the absence of manifest error.
Section 5.4 SURVIVAL. The agreements and obligations of the Borrowers in
this ARTICLE 5 shall survive the payment of all other Obligations.
Section 5.5 CLAIMS UNDER SECTION 5.1. Each Lender shall notify the
Borrowers and the Agent of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Lender to payment of any amount under
SECTION 5.1 and will designate a different lending office if such designation
will avoid the need for, or reduce the amount of, such payment and will not, in
the judgment of such Lender be otherwise disadvantageous to it.
Section 5.6 REPLACEMENT OF AFFECTED LENDER. Within thirty (30) days after
receipt by the Borrowers of written notice and demand from any Lender for any
payment under the terms of SECTION 5.1 then, subject to this SECTION 5.6, the
Borrowers may, at their option, notify the Agent and such Lender (the "AFFECTED
LENDER") of their intention to obtain, at the Borrowers' sole expense, a
replacement Lender ("REPLACEMENT LENDER") to purchase the Affected Lender's
Loans and its obligations under the Loan Documents. Subject to this SECTION 5.6,
the Borrowers shall, within thirty (30) days following the delivery of such
notice from the Borrowers, cause the
POST-PETITION LOAN AGREEMENT - Page 57
Replacement Lender to purchase (and the Affected Lender hereby agrees to sell
and convey to such Replacement Lender) the Loans and other obligations of the
Affected Lender and assume the Affected Lender's Commitment and obligations
hereunder in accordance with the terms of an Assignment and Acceptance for cash
in an aggregate amount equal to the aggregate unpaid principal of the Loans and
other Obligations held by such Affected Lender, all unpaid interest and fees
accrued thereon or with respect thereto, and all other Obligations owed to such
Affected Lender, including amounts owed under SECTION 5.1 (but excluding any
amount pursuant to Section 4.2). Notwithstanding the foregoing, (a) the
Borrowers shall continue to be obligated to pay to the Affected Lender in full
all amounts then demanded and due under SECTION 5.1 in accordance with the terms
of this Agreement, (b) neither the Agent nor any Lender shall have any
obligation to find a Replacement Lender, (c) the Replacement Lender must be
acceptable to the Agent in its reasonable discretion, and (d) the Bank may not
be replaced under this SECTION 5.6 without its consent. If the Borrowers elect
to replace any Affected Lender, the Borrowers must replace all Affected Lenders
as set forth in this Section, each such replacement to occur within a reasonable
period of time not to exceed sixty (60) days from the date such Affected Lender
requested any payment under SECTION 5.1.
ARTICLE 6
COLLATERAL
Section 6.1 SECURITY INTEREST.
(a) Pursuant to the Interim Order and Final Order, as security
for the Obligations, Agent, for the benefit of the Agent and
the Lenders, has been granted first priority continuing
security interests in, liens on, collateral assignments of,
and rights of set-off against, all of the following property
and assets of such Borrower, whether now owned or existing or
hereafter acquired or arising, regardless of where located:
(i) all Accounts (including any credit enhancement therefor);
(ii) all Inventory;
(iii) in the case of each Borrower that is an RPA Seller, the RPA
Seller Note payable to such Borrower and all rights,
remedies, powers, and privileges of such Borrower thereunder
and all security therefor;
(iv) all contract rights, letters of credit, chattel paper,
instruments, notes, documents, and documents of title;
(v) all General Intangibles;
(vi) all Equipment;
(vii) all Investment Property;
POST-PETITION LOAN AGREEMENT - Page 58
(viii) all money, cash, cash equivalents, securities, and other
property of any kind of such Borrower;
(ix) all of such Borrower's deposit accounts, credits, and
balances with and other claims against the Agent, any Lender,
any Affiliate of the Agent or any Lender, or any other
financial institution with which such Borrower maintains
deposits, including any Payment Accounts;
(x) all books, records, and other property related to or
referring to any of the foregoing, including books, records,
account ledgers, data processing records, computer software
and other property, and General Intangibles at any time
evidencing or relating to any of the foregoing;
(xi) all accessions to, substitutions for, and replacements,
products, and proceeds of any of the foregoing, including,
but not limited to, proceeds of any insurance policies,
claims against third parties, and condemnation or requisition
payments with respect to all or any of the foregoing;
(xii) all real property, including without limitation, the Real
Estate; and
(xiii) all other property described in the Interim Order and the
Final Order.
All of the foregoing, together with the Real Estate covered by any
Mortgages, and all other property of the Borrower's in which the Agent or
any Lender may at any time be granted a Lien, is herein collectively
referred to as the "COLLATERAL".
(b) The Obligations shall be secured by all of the Collateral. Each
Borrower acknowledges and expressly agrees with the Agent and each Lender
that the grant by such Borrower of the Agent's Lien in the Collateral of
such Borrower as security for the Obligations of the other Borrowers is
required solely as a condition to, and is given solely as inducement for
and in consideration of, credit or accommodations extended or to be
extended under the Loan Documents to any or all of the other Borrowers and
is not required or given as a condition of extensions of credit to such
Borrower.
Section 6.2 PERFECTION AND PROTECTION OF SECURITY INTEREST.
(a) Each Borrower shall, at its expense, perform all steps requested
by the Agent at any time to perfect, maintain, protect, and enforce the
Agent's Liens, including: (i) executing, delivering, and/or filing and
recording of the Mortgages, the Copyright, Patent, and Trademark
Agreements, and executing and filing financing or continuation statements,
and amendments thereof, in form and substance satisfactory to the Agent;
(ii) delivering to the Agent the originals of all instruments, documents,
and chattel paper, and all other Collateral of which the Agent determines
it should have physical possession in order to perfect and protect the
Agent's security interest therein, duly pledged, endorsed, or assigned to
the Agent without restriction; (iii) delivering to the Agent (A) warehouse
receipts covering any portion of the Collateral located in warehouses and
for which warehouse receipts are issued and (B) if requested by the Agent,
certificates of
POST-PETITION LOAN AGREEMENT - Page 59
title reflecting the Agent's Liens covering any portion of the Collateral
for which certificates of title have been issued; (iv) when an Event of
Default exists, transferring Inventory to warehouses or other locations
designated by the Agent; (v) delivering to the Agent all letters of credit
on which such Borrower is named beneficiary; and (vi) taking such other
steps as are reasonably deemed necessary or desirable by the Agent to
maintain and protect the Agent's Liens. To the extent permitted by any
Requirement of Law, the Agent may file, without any Borrower's signature,
one or more financing statements disclosing the Agent's Liens. Each
Borrower agrees that a carbon, photographic, photostatic, or other
reproduction of this Agreement or of a financing statement executed and
delivered by such Borrower is sufficient as a financing statement.
(b) If any Collateral is at any time in the possession or control of
any warehouseman, bailee, or any of such Borrower's agents or processors,
then such Borrower shall notify the Agent thereof and shall, at the request
of the Agent, notify such Person of the Agent's security interest in such
Collateral and instruct such Person to hold all such Collateral for the
Agent's account subject to the Agent's instructions. If at any time any
Collateral is located at any operating facility of a Borrower which is not
owned by such Borrower, such Borrower shall use commercially reasonable
efforts to obtain written landlord lien waivers or subordinations, in form
and substance reasonably satisfactory to the Agent, of all present and
future Liens to which the owner or lessor of such premises may be entitled
to assert against the Collateral; PROVIDED that in the event any Borrower
is unable to obtain any such written waiver or subordination, the Agent
may, in its discretion establish a reserve with respect to any such
Collateral.
(c) From time to time, each Borrower shall, upon the Agent's
request, execute and deliver confirmatory written instruments pledging to
the Agent, for the benefit of the Agent and the Lenders, the Collateral
with respect to such Borrower, but the failure to do so shall not affect or
limit any security interest or any other rights of the Agent or any Lender
in and to the Collateral with respect to such Borrower. So long as this
Agreement is in effect and until all Obligations have been fully satisfied,
the Agent's Liens shall continue in full force and effect in all Collateral
(whether or not deemed eligible for the purpose of calculating the
Available Credit or the Availability or as the basis for any advance, loan,
extension of credit, or other financial accommodation).
(d) To the extent any Borrower is the owner of or becomes the issuer
of any Investment Property that is Collateral (each such Person which
issues any such Investment Property being referred to herein as an
"ISSUER"), each such Borrower which is an Issuer agrees, and each Borrower
which is the owner of any Investment Property agrees to cause any the
Issuer thereof to agree, as follows with respect to such Investment
Property:
(i) All such Investment Property issued by such Issuer, all
warrants, and all non-cash dividends and other non-cash
distributions in respect thereof at any time registered in the
name of, or otherwise deliverable to, any Borrower, shall be
delivered directly to the Agent, for the account of such
Borrower, at the Agent's address for notices set forth in
SECTION 15.8.
POST-PETITION LOAN AGREEMENT - Page 60
(ii) During the existence of any Event of Default, all cash
dividends, cash distributions, and other cash or cash
equivalents in respect of such Investment Property at any time
payable or deliverable to any Borrower shall be delivered
directly to the Agent, for the account of the Agent and the
Lenders, at the Agent's address for notices set forth in SECTION
15.8.
(iii) Such Issuer will not acknowledge any transfer or encumbrance in
respect of such Investment Property to or in favor of any Person
other than the Agent or a Person designated by the Agent in
writing.
(iv) With respect to any of such Investment Property at any time
constituting an uncertificated security as defined by the UCC,
such Issuer will comply with instructions originated by the
Agent without further consent by the registered owner thereof.
Section 6.3 LOCATION OF COLLATERAL. Each Borrower represents and
warrants to the Agent and the Lenders that: (a) SCHEDULE 6.3 is a correct and
complete list of such Borrower's chief executive office, the location of its
books and records, the locations of the Collateral (other than Inventory in
transit, rolling stock, and Collateral in the Agent's possession), and the
locations of all of its other places of business; and (b) SCHEDULE 6.3 correctly
identifies any of such facilities and locations that are not owned by such
Borrower and sets forth the names of the owners and lessors or sublessors of
such facilities and locations. Each Borrower covenants and agrees that it will
not (x) maintain any Collateral (other than Inventory in transit, rolling stock,
and Collateral in the Agent's possession) at any location other than those
locations listed for such Borrower on SCHEDULE 6.3, (y) otherwise change or add
to any of such locations, or (z) change the location of its chief executive
office from the location identified in SCHEDULE 6.3, unless it gives the Agent
at least thirty (30) days prior written notice thereof and executes any and all
financing statements and other documents that the Agent reasonably requests in
connection therewith. In the event any Borrower requests to change or add any
location of Collateral and has provided the Agent with all financing statements
and other documents requested by the Agent in connection therewith, the Borrower
shall prepare and deliver to the Agent a revised SCHEDULE 6.3 which shall
automatically be adopted as SCHEDULE 6.3 for all purposes. Without limiting the
foregoing, each Borrower represents that all of its Inventory (other than
Inventory in transit) is, and covenants that all of its Inventory will be,
located either (A) on premises owned by such Borrower, or (B) on premises leased
by such Borrower and included on SCHEDULE 6.3.
Section 6.4 TITLE TO, LIENS ON, AND SALE AND USE OF COLLATERAL. Each
Borrower represents and warrants to the Agent and the Lenders and agrees with
the Agent and the Lenders that: (a) all of its Collateral is and will continue
to be owned by such Borrower free and clear of all Liens whatsoever, except for
Permitted Liens; (b) the Agent's Liens in the Collateral will not be subject to
any prior Lien except for those Liens identified, and to the limited extent
provided, in CLAUSES (d), (e), and (h) of the definition of Permitted Liens; (c)
such Borrower will use, store, and maintain the Collateral with all reasonable
care and will use such Collateral for lawful purposes only; and (d) such
Borrower will not, without the Agent's prior written approval, sell or dispose
of, or permit the sale or disposition of, any of the Collateral except for (i)
sales of Inventory in the ordinary course of business, (ii) sales of Equipment
and Real Estate as permitted
POST-PETITION LOAN AGREEMENT - Page 61
by SECTION 9.9(c)(ii) and SECTION 9.19 and (iii) subject to and as provided by
SECTION 9.9, sales of Accounts by any RPA Seller to MRC pursuant to the RPA.
Each RPA Seller represents and warrants to the Agent and the Lenders that it is
the owner and holder of its RPA Seller Note.
Section 6.5 APPRAISALS. Whenever an Event of Default exists, and at such
other times as the Agent requests (not to exceed two times in any calendar year
and not to exceed one time during any six-month period), the Borrowers shall, at
their expense and upon the Agent's request, provide the Agent with appraisals or
updates thereof of any or all of the Collateral from credentialed appraisers,
and prepared in a form and on a basis, reasonably satisfactory to the Agent,
such appraisals and updates to include, without limitation, information required
by Requirements of Law and by the internal policies of the Lenders.
Section 6.6 ACCESS AND EXAMINATION; CONFIDENTIALITY.
(a) The Agent, accompanied by any Lender which so elects, may at all
reasonable times during regular business hours, and at any time when a
Default or Event of Default exists, have access to, examine, audit, make
extracts from or copies of, and inspect any or all of the Borrowers'
records, files, and books of account and the Collateral, and discuss the
Borrowers' affairs with the Borrowers' officers and senior management. The
Borrowers will deliver to the Agent any instrument necessary for the Agent
to obtain records from any service bureau maintaining records for the
Borrowers. The Agent may, and at the direction of the Majority Lenders
shall, at any time when a Default or Event of Default exists, and at the
Borrowers' expense, make copies of all of the Borrowers' books and records,
or require the Borrowers to deliver such copies to the Agent. The Agent
may, without expense to the Agent, use such of the Borrowers' respective
personnel, supplies, and premises as may be reasonably necessary for
maintaining or enforcing the Agent's Liens. The Agent shall have the right,
at any time, in the Agent's name or in the name of a nominee of the Agent,
to verify the validity, amount, or any other matter relating to the
Accounts, Inventory, or other Collateral, by mail, telephone, or otherwise.
(b) Each of the Borrowers hereby consents that the Agent and each
Lender may issue and disseminate to the public general information
describing the credit accommodation entered into pursuant to this
Agreement, including the names and addresses of the Borrowers and a general
description of the Borrowers' business and may use the Borrowers' names in
advertising and other promotional material.
(c) Each Lender severally agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information identified as "confidential" or "secret" by any Borrower and
provided to the Agent or such Lender by or on behalf of such Borrower,
under this Agreement or any other Loan Document, except to the extent that
such information (i) was or becomes generally available to the public other
than as a result of disclosure by the Agent or such Lender, or (ii) was or
becomes available on a nonconfidential basis from a source other than the
Borrowers; PROVIDED that such source is not bound by a confidentiality
agreement with the Borrowers known to the Agent or such Lender.
Notwithstanding the foregoing, the Agent and any
POST-PETITION LOAN AGREEMENT - Page 62
Lender may disclose any such information (1) at the request or pursuant to
any requirement of any Governmental Authority to which the Agent or such
Lender is subject or in connection with an examination of the Agent or such
Lender by any such Governmental Authority, (2) pursuant to subpoena or
other court process, (3) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (4) to the extent
reasonably required in connection with any litigation or proceeding
(including, but not limited to, any bankruptcy proceeding) to which the
Agent, any Lender, or their respective Affiliates may be party, (5) to the
extent required in connection with the exercise of any remedy or
enforcement of any rights hereunder or under any other Loan Document, (6)
to the Agent's or such Lender's independent auditors, accountants,
attorneys, and other professional advisors, (7) to any prospective
Participant or Assignee, actual or potential, PROVIDED that such
prospective Participant or Assignee agrees to keep such information
confidential to the same extent required of the Agent and the Lenders
hereunder, (8) as expressly permitted under the terms of any other document
or agreement regarding confidentiality to which any Borrower is a party or
is deemed a party with the Agent or such Lender, and (9) to its Affiliates.
Section 6.7 COLLATERAL REPORTING. The Parent shall provide, or cause to
be provided, to the Agent (a) on each Business Day, a Borrowing Base Certificate
for the immediately preceding Business Day, and (b) on the 20th day of each
month, the information identified in SCHEDULE 6.7 for the month immediately
preceding. If any of the Borrowers' records or reports of the Collateral are
prepared by an accounting service or other agent, each Borrower hereby
authorizes such service or agent to deliver such records, reports, and related
documents to the Agent, for distribution to the Lenders.
Section 6.8 ACCOUNTS. Each Borrower covenants, agrees, represents, and
warrants, as to itself, as follows:
(a) With respect to such Borrower's Accounts: (i) each existing
Account represents, and each future Account will represent, a BONA FIDE
sale or lease and delivery of goods by such Borrower, or rendition of
services by such Borrower, in the ordinary course of such Borrower's
business; (ii) each existing Account is, and each future Account will be,
for a liquidated amount payable by the Account Debtor thereon on the terms
then in effect or in the schedule thereof delivered to the Agent, without
any offset, deduction, defense, or counterclaim except those known to such
Borrower and disclosed to the Agent and the Lenders as required by this
Agreement; (iii) no payment will be received with respect to any Account,
and no credit, discount, or extension, or agreement therefor will be
granted on any Account except as reported to the Agent and the Lenders in
accordance with this Agreement; (iv) each copy of an invoice delivered to
the Agent by such Borrower will be a genuine copy of the original invoice
sent to the Account Debtor named therein; and (v) all goods described in
any invoice representing a sale of goods will have been delivered to the
Account Debtor and all services of such Borrower described in each invoice
will have been performed.
(b) Such Borrower shall not re-date any invoice or sale or make
sales on extended dating beyond that customary in such Borrower's business
or extend or modify
POST-PETITION LOAN AGREEMENT - Page 63
any Account outside the ordinary course of business. If such Borrower
becomes aware of any matter adversely affecting the collectibility of any
Account or the Account Debtor therefor involving an amount greater than
$1,000,000, including information regarding the Account Debtor's
creditworthiness, such Borrower will promptly so advise the Agent.
(c) Such Borrower shall not, without the Agent's prior written
consent, accept any note or other instrument (except a check or other
instrument for the immediate payment of money) with respect to any Account
other than Accounts which (i) do not exceed $1,000,000 individually and
(ii) at the time of accepting such note or other instrument are not less
than ninety (90) days past due from the date of the original invoice
therefor. If the Agent consents to the acceptance of any such instrument,
it shall be considered as evidence of the Account and not payment thereof
and such Borrower will promptly deliver such instrument to the Agent,
endorsed by such Borrower to the Agent in a manner satisfactory in form and
substance to the Agent. Regardless of the form of presentment, demand, or
notice of protest with respect thereto, such Borrower shall remain liable
thereon until such instrument is paid in full.
(d) Such Borrower shall notify the Agent promptly of all offsets,
deductions, defenses, or counterclaims in excess of $1,000,000 with any
Account Debtor, and agrees to settle, contest, or adjust such dispute or
claim at no expense to the Agent or any Lender. No discount, credit, or
allowance shall be granted to any such Account Debtor without the Agent's
prior written consent, except for discounts, credits, and allowances made
or given in the ordinary course of such Borrower's business when no Event
of Default exists hereunder. The Borrower shall promptly send the Agent a
copy of each credit memorandum in excess of $1,000,000. The Agent may at
all times when an Event of Default exists, settle or adjust disputes and
claims directly with Account Debtors of any Borrower for amounts and upon
terms which the Agent or the Majority Lenders, as applicable, shall
consider advisable and, in all cases, the Agent will credit the Loan
Account with the net amounts received by the Agent in payment of any
Accounts.
(e) If an Account Debtor returns any Inventory to a Borrower when no
Event of Default exists, then such Borrower shall promptly determine the
reason for such return and shall issue a credit memorandum to the Account
Debtor in the appropriate amount. The Borrowers shall immediately report to
the Agent any return involving an amount in excess of $1,000,000. Each such
report shall indicate the reasons for the returns and the locations and
condition of the returned Inventory. In the event any Account Debtor
returns Inventory to a Borrower when an Event of Default exists, such
Borrower, upon the request of the Agent, shall: (i) hold the returned
Inventory in trust for the Agent; (ii) segregate all returned Inventory
from all of its other property; (iii) dispose of the returned Inventory
solely according to the Agent's written instructions; and (iv) not issue
any credits or allowances with respect thereto without the Agent's prior
written consent. All returned Inventory of any Borrower shall be subject to
the Agent's Liens thereon. Whenever any Inventory is returned, the related
Account shall be deemed ineligible to the extent of the amount owing by the
Account Debtor with respect to such returned Inventory.
POST-PETITION LOAN AGREEMENT - Page 64
Section 6.9 COLLECTION OF ACCOUNTS; PAYMENTS.
(a) No later than thirty (30) days from the Closing Date, the
Borrowers shall establish a lock-box service for collections of Accounts at
Clearing Banks acceptable to the Agent and subject to Blocked Account
Agreements and other documentation acceptable to the Agent. The Borrowers
shall instruct all Account Debtors to make all payments directly to the
address established for each such lock-box service. If, notwithstanding
such instructions, any Borrower receives any proceeds of Accounts, it shall
receive such payments as the Agent's trustee, and shall immediately deliver
such payments to the Agent in their original form duly endorsed in blank or
deposit them into a Payment Account, as the Agent may direct. All
collections received in any lock-box or Payment Account or directly by any
Borrower or the Agent, and all funds in any Payment Account or other
account to which such collections are deposited shall be subject to the
Agent's sole control and withdrawals by any Borrower shall not be
permitted. The Agent or the Agent's designee may, at any time after the
occurrence of an Event of Default, notify Account Debtors that the Accounts
have been assigned to the Agent and of the Agent's security interest
therein, and may collect them directly and charge the collection costs and
expenses to the Loan Account as a Revolving Loan. So long as an Event of
Default exists, the Borrowers at the Agent's request, shall execute and
deliver to the Agent such documents as the Agent shall require to grant the
Agent access to any post office box in which collections of Accounts are
received.
(b) If sales of Inventory are made or services are rendered by any
Borrower for cash, such Borrower shall immediately deliver, or cause to be
delivered to the Agent or deposit into a Payment Account, the cash which
such Borrower receives.
(c) All payments received by the Agent in a bank account designated
by the Borrowers and the Agent will be the Agent's sole property for its
benefit and the benefit of the Lenders and will be credited to the Loan
Account (conditional upon final collection) on the same day received (if
received prior to 2:00 p.m. (Dallas, Texas time); PROVIDED that the
Borrowers shall compensate the Bank for the cost of collection and
clearance of remittances applied to the Loan Account, including interest
for one (1) day, on all uncollected funds credited to the Loan Account as
provided by this SECTION 6.9(c).
(d) In the event all of the Obligations are repaid upon the
termination of this Agreement or upon acceleration of the Obligations,
other than through the Agent's receipt of payments on account of the
Accounts or proceeds of the other Collateral, such payment will be credited
(conditional upon final collection) to the Loan Account (i) on the date of
the Agent's receipt of such funds if such funds are collected funds or (ii)
one (1) Business Day after the Agent's receipt of such funds if such funds
are uncollected funds.
Section 6.10 INVENTORY; PERPETUAL INVENTORY. Each Borrower represents and
warrants to the Agent and the Lenders and agrees with the Agent and the Lenders
that all of the Inventory (other than returned or obsolete Inventory) owned by
such Borrower is and will be held for sale or lease, or to be furnished in
connection with the rendition of services, in the ordinary course of
POST-PETITION LOAN AGREEMENT - Page 65
such Borrower's business, and is and will be fit for such purposes. Each
Borrower will keep its Inventory (other than returned or obsolete Inventory) in
good and marketable condition, except for damaged or defective goods arising in
the ordinary course of such Borrower's business. No Borrower will, without the
prior written consent of the Agent, acquire or maintain any Inventory in excess
of $1,000,000 at any time on consignment or approval unless such Inventory is
disclosed to the Agent pursuant to SECTION 6.7 and the applicable Borrower takes
appropriate steps to insure that all of such Inventory is excluded from any
determination of Eligible Inventory. Each Borrower agrees that all Inventory
produced in the United States will be produced in accordance with the Federal
Fair Labor Standards Act of 1938, as amended, and all rules, regulations, and
orders thereunder. Each Borrower will conduct a physical count of its Inventory
at least once per Fiscal Year, and during the existence of an Event of Default,
at such other times as the Agent may reasonably request. Each Metals Inventory
Borrower will maintain a perpetual inventory reporting system at all times.
Without the Agent's written consent, no Borrower will sell, through a single
transaction or a series of related transactions, Inventory on a ▇▇▇▇-and-hold,
guaranteed sale, sale and return, sale on approval, consignment, or other
repurchase or return basis in excess of $1,000,000.
Section 6.11 EQUIPMENT AND REAL ESTATE.
(a) Each Borrower represents and warrants to the Agent and the
Lenders and agrees with the Agent and the Lenders that all of the Equipment
(other than obsolete Equipment or Equipment no longer used or useful in
such Borrower's business) owned by such Borrower is and will be used or
held for use in such Borrower's business, and is and will be fit for such
purposes. Each Borrower shall keep and maintain its Equipment in good
operating condition and repair (ordinary wear and tear excepted) and shall
make all necessary replacements thereof.
(b) Each Borrower shall promptly inform the Agent of any material
additions to or deletions from its Equipment and Real Estate. No Borrower
shall permit any of its Equipment to become a fixture with respect to real
property or to become an accession with respect to other personal property
with respect to which real or personal property the Agent does not have a
Lien. No Borrower will, without the Agent's prior written consent, alter or
remove any identifying symbol or number on any Equipment constituting
Collateral.
(c) No Borrower shall, without the Agent's prior written consent,
sell, lease as a lessor, or otherwise dispose of any of its Equipment or
Real Estate; PROVIDED, HOWEVER, that subject to the provisions of
SECTION 9.9(c)(ii) and SECTION 9.19, the Borrowers may dispose of Equipment
and Real Estate if the proceeds of any such disposition are applied to the
Obligations pursuant to SECTION 4.3.
Section 6.12 DOCUMENTS, INSTRUMENTS, AND CHATTEL PAPER. Each Borrower
represents and warrants to the Agent and the Lenders that (a) all documents,
instruments, and chattel paper of such Borrower describing, evidencing, or
constituting Collateral, and all signatures and endorsements thereon, are and
will be complete, valid, and genuine, and (b) all goods evidenced
POST-PETITION LOAN AGREEMENT - Page 66
by such documents, instruments, and chattel paper are and will be owned by such
Borrower free and clear of all Liens other than Permitted Liens.
Section 6.13 RIGHT TO CURE. The Agent may, in its discretion, and shall,
at the direction of the Majority Lenders, pay any amount or do any act required
of any Borrower hereunder or under any other Loan Document in order to preserve,
protect, maintain, or enforce the Obligations, the Collateral or the Agent's
Liens therein, and which any Borrower fails to pay or do, including payment of
any judgment against any Borrower, any insurance premium, any warehouse charge,
any finishing or processing charge, any landlord's or bailee's claim, and any
other Lien upon or with respect to the Collateral. All payments that the Agent
makes under this SECTION 6.13 and all out-of-pocket costs and expenses that the
Agent pays or incurs in connection with any action taken by it hereunder shall
be charged to the Loan Account as a Revolving Loan. Any payment made or other
action taken by the Agent under this SECTION 6.13 shall be without prejudice to
any right to assert an Event of Default hereunder and to proceed thereafter as
herein provided.
Section 6.14 POWER OF ATTORNEY. Each Borrower, as to itself, hereby
appoints the Agent and the Agent's designee as such Borrower's attorney, with
power: (a) to endorse such Borrower's name on any checks, notes, acceptances,
money orders, or other forms of payment or security that come into the Agent's
or any Lender's possession; (b) to sign such Borrower's name on any invoice,
▇▇▇▇ of lading, warehouse receipt, or other document of title relating to any
Collateral, on drafts against customers, on assignments of Accounts, on notices
of assignment, financing statements, and other public records and to file any
such financing statements by electronic means with or without a signature as
authorized or required by applicable law or filing procedure; (c) so long as any
Event of Default exists, to notify the post office authorities to change the
address for delivery of such Borrower's mail to an address designated by the
Agent and to receive, open, and dispose of all mail addressed to such Borrower;
(d) to send requests for verification of Accounts to customers or Account
Debtors; (e) to clear Inventory through customs in such Borrower's name, the
Agent's name, or the name of the Agent's designee, and to sign and deliver to
customs officials powers of attorney in such Borrower's name for such purpose;
and (f) to do all things the Agent determines are necessary to carry out this
Agreement. Each Borrower ratifies and approves all acts of such attorney. None
of the Lenders, the Agent, nor their attorneys will be liable for any acts or
omissions or for any error of judgment or mistake of fact or law other than any
such liability arising from any such Person's gross negligence or willful
misconduct. This power, being coupled with an interest, is irrevocable until
this Agreement has been terminated and the Obligations have been fully
satisfied.
Section 6.15 THE AGENT'S AND THE LENDERS' RIGHTS, DUTIES, AND
LIABILITIES. The Borrowers assume all responsibility and liability arising from
or relating to the use, sale, or other disposition of the Collateral. The
Obligations shall not be affected by any failure of the Agent or any Lender to
take any steps to perfect the Agent's Liens or to collect or realize upon the
Collateral, nor shall loss of or damage to the Collateral release any Borrower
from any of the Obligations. Following the occurrence and continuation of an
Event of Default, the Agent may (but shall not be required to), and at the
direction of the Majority Lenders shall, without notice to or consent from any
Borrower ▇▇▇ upon or otherwise collect, extend the time for payment of, modify
or amend the terms of, compromise or settle for cash, credit, or otherwise upon
any
POST-PETITION LOAN AGREEMENT - Page 67
terms, grant other indulgences, extensions, renewals, compositions, or releases,
and take or omit to take any other action with respect to the Collateral, any
security therefor, any agreement relating thereto, any insurance applicable
thereto, or any Person liable directly or indirectly in connection with any of
the foregoing, without discharging or otherwise affecting the liability of any
Borrower for the Obligations or under this Agreement or any other agreement now
or hereafter existing between the Agent and/or any Lender and any Borrower.
Section 6.16 SITE VISITS, OBSERVATIONS AND TESTING. The Agent and its
representatives will have the right at any reasonable time to enter and visit
the Real Estate and any other place where any property of any Borrower is
located for the purposes of observing the Real Estate, taking and removing soil
or groundwater samples, and conducting tests on any part of the Real Estate. The
Agent is under no duty, however, to visit or observe the Real Estate or to
conduct tests, and any such acts by the Agent will be solely for the purposes of
protecting the Agent's Liens and preserving the Agent's and the Lenders' rights
under this Agreement. No site visit, observation or testing by the Agent or the
Lenders will result in a waiver of any Default or Event of Default or impose any
liability on the Agent or the Lenders. In no event will any site visit,
observation, or testing by the Agent be a representation that hazardous
substances are or are not present in, on, or under the Real Estate, or that
there has been or will be compliance with any Environmental Law. Neither any
Borrower nor any other party is entitled to rely on any site visit, observation,
or testing by the Agent. The Agent and the Lenders owe no duty of care to
protect the Borrowers or any other party against, or to inform the Borrowers or
any other party of, any hazardous substances or any other adverse condition
affecting the Real Estate. The Agent will promptly disclose to the Parent upon
its request, or to any other party as required by law, any report or findings
made as a result of, or in connection with, any site visit, observation, or
testing by the Agent. The Borrowers understand and agree that the Agent makes no
warranty or representation to the Borrowers or any other party regarding the
truth, accuracy, or completeness of any such report or findings that may be
disclosed. The Borrowers also understand that depending on the results of any
site visit, observation, or testing by the Agent and disclosed to the Borrowers,
the Borrowers may have a legal obligation to notify one or more environmental
agencies of the results, that such reporting requirements are site-specific, and
are to be evaluated by the Borrowers without advice or assistance from the
Agent. In each instance, the Agent will give the Borrowers reasonable notice
before entering the Real Estate or any other place the Agent is permitted to
enter under this SECTION 6.16. The Agent will make reasonable efforts to avoid
interfering with the Borrowers' use of the Real Estate or any other property in
exercising any rights provided hereunder.
Section 6.17 GUARANTIES; THIRD PARTY JOINDER. Each Borrower shall
guarantee payment and performance of the Obligations (other than Obligations
owing by itself and excluding Existing Obligations in the case of any such
guarantee by a Newly Obligated Party) pursuant to a Guaranty Agreement in form
and substance satisfactory to the Agent, duly executed by each such Borrower.
Each such guaranteeing Borrower acknowledges and expressly agrees with the Agent
and each Lender that the Guaranty by such Borrower is required solely as a
condition to, and is given solely as inducement for and in consideration of,
credit or accommodations extended or to be extended under the Loan Documents to
any or all of the other Borrowers and is not required or given as a condition of
extensions of credit to such Borrower. Subject to the provisions of and pursuant
to SECTION 15.20, promptly upon creation or acquisition of any
POST-PETITION LOAN AGREEMENT - Page 68
Subsidiary of a Borrower, such Borrower shall, to the extent required pursuant
to SECTION 9.20, cause such new Subsidiary to become a Borrower and a Guarantor
by executing and delivering to the Agent such Loan Documents and other
instruments, certificates, and agreements as the Agent may request. Upon
execution and delivery of such Loan Documents and other instruments,
certificates, and agreements, such newly created or acquired Subsidiary shall
automatically become a Borrower and thereupon shall have all of the rights,
benefits, duties, and obligations of a Borrower and a Guarantor under the Loan
Documents.
Section 6.18 VOTING RIGHTS, DISTRIBUTIONS, ETC. IN RESPECT OF INVESTMENT
PROPERTY.
(a) So long as no Event of Default exists (i) each Borrower shall be
entitled to exercise any and all voting and other consensual rights
(including, without limitation, the right to give consents, waivers, and
notifications in respect of any securities) pertaining to its Investment
Property or any part thereof; PROVIDED, HOWEVER, that without the prior
written consent of the Agent and the Majority Lenders, no vote shall be
cast or consent, waiver, or ratification given or action taken which would
(A) be inconsistent with or violate any provision of this Agreement or any
other Loan Document or (B) amend, modify, or waive any material term,
provision, or condition of the certificate of incorporation, bylaws,
certificate of formation, or other charter document or other agreement
relating to, evidencing, providing for the issuance of, or securing any
such Investment Property, in any manner that would impair such Investment
Property, the transferability thereof, or the Agent's Liens therein, and
(ii) each Borrower shall be entitled to receive and retain any and all
dividends and interest paid in respect of any of such Investment Property
(unless otherwise required by this Agreement).
(b) During the existence of an Event of Default, (i) the Agent may,
without notice to any Borrower or any other Person obligated for payment of
all or any part of the Obligations, transfer or register in the name of the
Agent or any of its nominees, for the benefit of the Agent and the Lenders,
any or all of the Collateral consisting of Investment Property, the
proceeds thereof (in cash or otherwise), and all liens, security, rights,
remedies, and claims of any Borrower with respect thereto (as used in this
SECTION 6.18 collectively, the "PLEDGED COLLATERAL") held by the Agent
hereunder, and the Agent or its nominee may thereafter, after delivery of
notice to the applicable Borrower, exercise all voting and corporate rights
at any meeting of any corporation, partnership, or other business entity
issuing any of the Pledged Collateral and any and all rights of conversion,
exchange, subscription, or any other rights, privileges, or options
pertaining to any of the Pledged Collateral as if it were the absolute
owner thereof, including, without limitation, the right to exchange at its
discretion any and all of the Pledged Collateral upon the merger,
consolidation, reorganization, recapitalization, or other readjustment of
any corporation, partnership, or other business entity issuing any of such
Pledged Collateral or upon the exercise by any such issuer or the Agent of
any right, privilege, or option pertaining to any of the Pledged
Collateral, and in connection therewith, to deposit and deliver any and all
of the Pledged Collateral with any committee, depositary, transfer agent,
registrar, or other designated agency upon such terms and conditions as it
may determine, all without liability except to account for property
actually received by it, but the Agent shall have no duty to exercise any
of the aforesaid rights, privileges, or options,
POST-PETITION LOAN AGREEMENT - Page 69
and the Agent shall not be responsible for any failure to do so or delay in
so doing, (ii) after the Agent's giving of the notice specified in
CLAUSE (i) of this SECTION 6.18(b), all rights of any Borrower to exercise
the voting and other consensual rights which it would otherwise be entitled
to exercise pursuant to CLAUSE (i) of SECTION 6.18(a) and to receive the
dividends, interest, and other distributions which it would otherwise be
authorized to receive and retain thereunder shall be suspended until such
Event of Default shall no longer exist, and all such rights shall, until
such Event of Default shall no longer exist, thereupon become vested in the
Agent which shall thereupon have the sole right to exercise such voting and
other consensual rights and to receive and hold as Pledged Collateral such
dividends, interest, and other distributions, (iii) all dividends,
interest, and other distributions which are received by any Borrower
contrary to the provisions of this SECTION 6.18(b) shall be received in
trust for the benefit of the Agent, shall be segregated from other funds of
such Borrower and shall be forthwith paid over to the Agent as Collateral
in the same form as so received (with any necessary endorsement), and (iv)
each Borrower shall execute and deliver (or cause to be executed and
delivered) to the Agent all such proxies and other instruments as the Agent
may reasonably request for the purpose of enabling the Agent to exercise
the voting and other rights which it is entitled to exercise pursuant to
this SECTION 6.18(b) and to receive the dividends, interest, and other
distributions which it is entitled to receive and retain pursuant to this
SECTION 6.18(b). The foregoing shall not in any way limit the Agent's power
and authority granted pursuant to SECTION 6.14.
Section 6.19 REVISED UCC ARTICLE 9. The parties to this Agreement
acknowledge that Revised Article 9 became effective in the State of Texas and in
various other Enactment States on July 1, 2001, and that it may be adopted and
become effective in one or more other Enactment States at any time thereafter.
In anticipation of the effectiveness of Revised Article 9 in any Enactment State
and its resulting application to the Loan Documents or any matters contemplated
thereby, the Agent, the Lenders, and the Borrowers hereby agree as follows:
(a) ATTACHMENT. Without otherwise limiting any other provision
of this Agreement or of Part 7 of Revised Article 9, in applying the law of
any Enactment State at any time on and after the Enactment Date with
respect to such Enactment State (i) the Collateral includes, without
limitation, each of the following categories as defined by Revised
Article 9, and all property of the Borrowers included therein at any time
owned or acquired: goods (including, without limitation, inventory,
equipment, fixtures and accessions); instruments (including, without
limitation, promissory notes); documents of title; accounts; chattel paper
(whether tangible or electronic); deposit accounts; letter-of-credit
rights; commercial tort claims (to the extent described in any notice
delivered by the Borrowers pursuant to SECTION 6.20(c); investment
property; general intangibles; leases; money; supporting obligations; and
proceeds; in each case wherever located, and whenever owned or acquired,
and (ii) the Agent's Lien in all such property created under this Agreement
(whether pursuant to Existing Article 9 or other Requirement of Law) on the
Closing Date shall continue in full force and effect on and under and
pursuant to Revised Article 9 and other Requirements of Law.
POST-PETITION LOAN AGREEMENT - Page 70
(b) PERFECTION BY FILING. The Agent may, at any time and from time
to time, file financing statements, continuation statements, and amendments
thereto that describe the Collateral as "all assets" of the Borrowers, or
words of similar effect, and which contain any other information required
pursuant to Revised Article 9 for the sufficiency of filing office
acceptance of any financing statement, continuation statement, or
amendment, and each Borrower agrees to furnish any such information to the
Agent promptly upon request. Any such financing statement, continuation
statement, or amendment may be signed by the Agent on behalf of a Borrower
and may be filed at any time in any jurisdiction whether or not Revised
Article 9 is then in effect in that jurisdiction.
(c) OTHER PERFECTION, ETC. Each Borrower shall, at any time and from
time to time, whether or not Revised Article 9 is in effect in any
particular jurisdiction, take such steps as the Agent may reasonably
request for the Agent (i) to obtain an acknowledgment, in form and
substance reasonably satisfactory to the Agent, of any bailee having
possession of any of the Collateral, stating that the bailee holds such
Collateral for the Agent, (ii) to obtain "control" of any investment
property, deposit accounts, letter-of-credit rights, or electronic chattel
paper (as such terms are defined by Revised Article 9 with corresponding
provisions thereof defining what constitutes "control" for such items of
Collateral), with any agreements establishing control to be in form and
substance reasonably satisfactory to the Agent, and (iii) otherwise to
insure the continued perfection and priority of the Agent's security
interest in any of the Collateral and of the preservation of its rights
therein, whether in anticipation of or following the effectiveness of
Revised Article 9 in any jurisdiction. If any Borrower shall at any time,
whether or not Revised Article 9 is in effect in any particular
jurisdiction, acquire a "commercial tort claim" (as such term is defined in
Revised Article 9) in excess of $1,000,000, such Borrower shall promptly
notify the Agent thereof in a writing, therein providing a reasonable
description and summary thereof, and upon delivery thereof to the Agent,
such Borrower shall be deemed to thereby grant to the Agent (and such
Borrower hereby grants to the Agent) a security interest and lien in and to
such commercial tort claim and all proceeds thereof, all upon the terms of
and governed by this Agreement.
(d) SAVINGS CLAUSE. Nothing contained in this SECTION 6.20 shall be
construed to narrow the scope of the Agent's Liens or the perfection or
priority thereof or to impair or otherwise limit any of the rights, powers,
privileges, or remedies of the Agent or any Lender under the Loan
Documents.
ARTICLE 7
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
Section 7.1 BOOKS AND RECORDS. The Borrowers shall maintain, at all
times, correct and complete books, records, and accounts in which complete,
correct, and timely entries are made of their respective transactions in
accordance with GAAP applied consistently with the audited Financial Statements
required to be delivered pursuant to SECTION 7.2(a). The Borrowers shall, by
means of appropriate entries, reflect in such accounts and in all Financial
Statements
POST-PETITION LOAN AGREEMENT - Page 71
proper liabilities and reserves for all taxes and proper provision for
depreciation and amortization of property and bad debts, all in accordance with
GAAP. The Borrowers shall maintain at all times books and records pertaining to
the Collateral in such detail, form, and scope as the Agent shall reasonably
require, including, but not limited to, records of (a) all payments received and
all credits and extensions granted with respect to the Accounts, (b) the return,
rejection, repossession, stoppage in transit, loss, damage, or destruction of
any Inventory, and (c) all other dealings affecting the Collateral.
Section 7.2 FINANCIAL INFORMATION. The Borrowers shall promptly furnish
to the Agent, all such information regarding each Borrower's financial and
business affairs as the Agent or any Lender (through the Agent) shall reasonably
request. Without limiting the foregoing, the Borrowers will furnish, or cause to
be furnished, to the Agent the following in sufficient copies for distribution
by the Agent to each Lender and in such detail as the Agent or the Lenders shall
request.
(a) The Borrowers will furnish, or cause to be furnished, as soon as
available, but in any event not later than ninety (90) days after the close
of each Fiscal Year, consolidated audited, and consolidating unaudited,
balance sheets, statements of income, cash flow, and stockholders' equity
for the Parent and its Subsidiaries for such Fiscal Year, the accompanying
notes thereto, and setting forth in comparative form figures for the
previous Fiscal Year, all in reasonable detail, fairly presenting the
financial position and the results of operations of the Parent and its
Subsidiaries as at the date thereof and for the Fiscal Year then ended, and
prepared in accordance with GAAP. Such Financial Statements shall be
examined in accordance with generally accepted auditing standards by and,
in the case of such Financial Statements performed on a consolidated basis,
accompanied by a report thereon, unqualified in any respect, of independent
certified public accountants of national standing selected by the Parent.
Each Borrower hereby authorizes the Agent to communicate directly with its
certified public accountants and, by this provision, authorizes those
accountants to disclose to the Agent any and all financial statements and
other supporting financial documents and schedules relating to such
Borrower and to discuss directly with the Agent such Borrower's finances
and affairs.
(b) The Borrowers will furnish, or cause to be furnished, as soon as
available, but in any event not later than thirty (30) days after the end
of each Fiscal Period, other than any Fiscal Period which is a Fiscal
Quarter end and with respect to any such Fiscal Quarter end within
forty-five (45) days after the end of such Fiscal Quarter, a Compliance
Certificate, and consolidated and consolidating (with respect to MRC only)
unaudited balance sheets of the Parent and its Subsidiaries as at the end
of such Fiscal Period or Fiscal Quarter, as applicable, and consolidated
and consolidating (as to MRC only) unaudited statements of income and cash
flow for the Parent and its Subsidiaries for such Fiscal Period or Fiscal
Quarter, as applicable, and for the period from the beginning of the Fiscal
Year to the end of such Fiscal Period or Fiscal Quarter, as applicable, all
in reasonable detail, fairly presenting the financial position and results
of operations of the Parent and its Subsidiaries as at the date thereof and
for such periods, and setting forth in each case updates of the Budget,
including actual results in comparison to the Budget as submitted to the
Agent on the Closing Date. Such information shall be prepared in
POST-PETITION LOAN AGREEMENT - Page 72
accordance with GAAP (other than presentation of footnotes and subject to
normal year-end audit adjustments) applied consistently with the audited
Financial Statements required to be delivered pursuant to SECTION 7.2(a).
The Parent shall certify by a certificate signed by its chief financial
officer or chief accounting officer that all such Financial Statements have
been prepared in accordance with GAAP and present fairly, subject to normal
year-end adjustments, the financial position of the Parent and its
Subsidiaries as at the dates thereof and its results of operations for the
periods then ended.
(c) [Reserved].
(d) The Borrowers will furnish, or cause to be furnished, within
forty-five days (45) of the last day of each Fiscal Quarter, a certificate
of the chief financial officer or chief accounting officer of the Parent in
the form of EXHIBIT F (a "COMPLIANCE CERTIFICATE") (i) setting forth in
reasonable detail the calculations required to establish compliance with
the covenants set forth in SECTION 9.22 through SECTION 9.25 during the
period covered by such Financial Statements and as at the end thereof, (ii)
setting forth for the Fiscal Quarter and Fiscal Year to date period then
ended the aggregate amount of all dispositions of property covered under
SECTION 4.3 and the aggregate amount of the cost of any replacements of
such property, and (iii) stating that, except as explained in reasonable
detail in such certificate, (A) all of the representations and warranties
of the Borrowers contained in this Agreement and the other Loan Documents
are correct and complete in all material respects as at the date of such
certificate as if made at such time, except for those that speak as of a
particular date, (B) the Borrowers are, at the date of such certificate, in
compliance in all material respects with all of their respective covenants
and agreements in this Agreement and the other Loan Documents, and (C) no
Default or Event of Default then exists or existed during the period
covered by such Financial Statements. If such certificate discloses that a
representation or warranty is not correct or complete, or that a covenant
has not been complied with, or that a Default or Event of Default existed
or exists, such certificate shall set forth what action the Borrowers have
taken or propose to take with respect thereto.
(e) The Borrowers will furnish, or cause to be furnished, no sooner
than September 30, 2002 and not later than October 31, 2002, annual
forecasts for Fiscal Year 2003, prepared by the Parent during such time
period (to include forecasted consolidated and consolidating balance sheets
and statements of income and cash flow, adjusted for assets sales and
showing budgeted performance for 2003) for the Parent and its Subsidiaries
as at the end of and for each Fiscal Period of such Fiscal Year.
(f) The Borrowers will furnish weekly, on the third Business Day of
each week, a flash report reflecting actual net sales, gross margins and
units sold by product categories, prepared as a rolling quarterly basis,
and setting forth in comparative form the figures for such items on a
quarter-to-date basis, reflecting actual figures to forecast figures and to
prior year.
POST-PETITION LOAN AGREEMENT - Page 73
(g) Upon the Agent's request, the Borrowers will furnish, or cause
to be furnished, promptly after filing with the PBGC and the IRS, a copy of
each annual report or other filing filed with respect to each Plan of any
Borrower.
(h) The Borrowers will furnish, or cause to be furnished, promptly
upon the filing thereof, copies of all reports, if any, to or other
documents filed by any Borrower with the Securities and Exchange Commission
under the Exchange Act, and all reports, notices, or statements sent or
received by any Borrower to or from the holders of any equity interests of
any Borrower (other than routine non-material correspondence sent by
shareholders of any Borrower to such Borrower) or of any Funded Debt of any
Borrower registered under the Securities Act of 1933 or to or from the
trustee under any indenture under which the same is issued.
(i) The Borrowers will furnish, or cause to be furnished, as soon as
available, but in any event not later than fifteen (15) days after any
Borrower's receipt thereof, a copy of all management reports and management
letters prepared by any independent certified public accountants of the
Parent or any other Borrower.
(j) The Borrowers will furnish, or cause to be furnished, promptly
after their preparation, copies of any and all proxy statements, financial
statements, and reports which the Parent makes available to its
shareholders or any holder of any Funded Debt.
(k) Upon the Agent's request, the Borrowers will furnish, or cause
to be furnished, promptly after filing with the IRS, a copy of each tax
return filed by any Borrower.
(l) The Borrowers will furnish, or cause to be furnished, such
additional information as the Agent and/or any Lender may from time to time
reasonably request regarding the financial and business affairs of any
Borrower.
Section 7.3 NOTICES TO THE LENDERS. The Borrowers shall notify the Agent
and the Lenders in writing of the following matters at the following times:
(a) promptly after becoming aware of any Default or Event of
Default;
(b) promptly after becoming aware of the assertion by the holder of
any Capital Stock of any Borrower or of any Funded Debt in excess of
$5,000,000 that a default exists that occurred after the Closing Date with
respect thereto or that any Borrower is not in compliance with the terms
thereof, or the written threat or commencement by such holder of any
enforcement action because of such asserted default or non-compliance;
(c) promptly after becoming aware of any event or circumstance which
could have, or has resulted in, a Material Adverse Effect;
POST-PETITION LOAN AGREEMENT - Page 74
(d) promptly after becoming aware of any pending or threatened
(in writing) action, suit, proceeding, or counterclaim by any Person, or
any pending or threatened investigation by a Governmental Authority;
(e) promptly after becoming aware of any pending or threatened
(in writing) strike, work stoppage, unfair labor practice claim, or other
labor dispute affecting any Borrower;
(f) promptly after becoming aware of any violation of any law,
statute, regulation, or ordinance of a Governmental Authority affecting any
Borrower;
(g) promptly after receipt of any written notice of any
violation by any Borrower of any Environmental Law or that any Governmental
Authority has asserted in writing that any Borrower is not in compliance
with any Environmental Law or is investigating any Borrower's compliance
therewith;
(h) promptly after receipt of any written notice that any
Borrower is or may be liable to any Person as a result of the Release or
threatened Release of any Contaminant or that any Borrower is subject to
investigation by any Governmental Authority evaluating whether any remedial
action is needed to respond to the Release or threatened Release of any
Contaminant which, in either case, is reasonably likely to give rise to
liability in excess of $5,000,000;
(i) promptly after receipt of any written notice of the
imposition of any Environmental Lien with respect to liability in excess of
$5,000,000 against any property of any Borrower;
(j) any change in any Borrower's name, state of organization, or
form of organization, trade names under which any Borrower will sell
Inventory or create Accounts, or to which instruments in payment of
Accounts may be made payable, in each case at least thirty (30) days prior
thereto;
(k) within ten (10) Business Days after any Borrower or any
ERISA Affiliate knows or has reason to know, that an ERISA Event or a
prohibited transaction (as defined in Sections 406 of ERISA and 4975 of the
Code) has occurred, and, when known, any action taken or threatened by the
IRS, the DOL, or the PBGC with respect thereto;
(l) upon request, or, in the event that such filing reflects a
significant change with respect to the matters covered thereby, within
three (3) Business Days after the filing thereof with the PBGC, the DOL, or
the IRS, as applicable, copies of the following: (i) each annual report
(form 5500 series), including Schedule B thereto, filed with the PBGC, the
DOL, or the IRS with respect to each Plan, (ii) a copy of each funding
waiver request filed with the PBGC, the DOL or the IRS with respect to any
Plan and all communications received by any Borrower or any ERISA Affiliate
from the PBGC, the DOL, or the IRS with respect to such request, and (iii)
a copy of each other filing or notice filed with the PBGC, the DOL, or the
IRS, with respect to each Plan of any Borrower or any ERISA Affiliate;
POST-PETITION LOAN AGREEMENT - Page 75
(m) upon request, copies of each actuarial report for any Plan
or Multi-employer Plan and annual report for any Multi-employer Plan, and
within three (3) Business Days after receipt thereof by any Borrower or any
ERISA Affiliate, copies of the following: (i) any notices of the PBGC's
intention to terminate a Plan or to have a trustee appointed to administer
such Plan; (ii) any favorable or unfavorable determination letter from the
IRS regarding the qualification of a Plan under Section 401(a) of the Code;
or (iii) any notice from a Multi-employer Plan regarding the imposition of
withdrawal liability;
(n) within three (3) Business Days after the occurrence thereof:
(i) any changes in the benefits of any existing Plan which increase any
Borrower's annual costs with respect thereto by an amount in excess of
$1,000,000, or the establishment of any new Plan or the commencement of
contributions in excess of $1,000,000 to any Plan to which any Borrower or
any ERISA Affiliate was not previously contributing or (ii) any failure by
any Borrower or any ERISA Affiliate to make a required installment or any
other required payment in excess of $1,000,000 under Section 412 of the
Code on or before the due date for such installment or payment;
(o) within three (3) Business Days after any Borrower or any
ERISA Affiliate knows or has reason to know that any of the following
events has or will occur: (i) a Multi-employer Plan has been or will be
terminated; (ii) the administrator or plan sponsor of a Multi-employer Plan
intends to terminate a Multi-employer Plan; or (iii) the PBGC has
instituted or will institute proceedings under Section 4042 of ERISA to
terminate a Multi-employer Plan;
(p) promptly upon becoming aware of any default or event of
default under the Subordinated Notes;
(q) promptly upon commencement of any proceedings contesting any
tax, fee, assessment, or other governmental charge in excess of $250,000;
and
Each notice given under this Section shall describe the subject matter thereof
in reasonable detail, and shall set forth the action that any Borrower or any
ERISA Affiliate, as applicable, has taken or proposes to take with respect
thereto.
Section 7.4 REVISIONS OR UPDATES TO SCHEDULES. Should any of the
information or disclosures provided on any of the schedules originally attached
hereto become outdated or incorrect in any material respect, the Borrowers from
time to time shall deliver to the Agent and the Lenders, together with an
officer's certificate of the type required pursuant to SECTION 7.2(d), such
revisions or updates to such schedule(s) whereupon such schedules shall be
deemed to be amended by such revisions or updates, as may be necessary or
appropriate to update or correct such schedule(s), PROVIDED that,
notwithstanding the foregoing, no such revisions or updates to SCHEDULES 8.5,
8.11, 8.12, 8.14, 8.16, 8.17, or 8.20 shall be deemed to have amended, modified,
or superseded any such schedules as originally attached hereto, or to have cured
any breach of warranty or representation resulting from the inaccuracy or
incompleteness of any such schedules, unless and until the Agent and the
Majority Lenders shall have accepted in writing such revisions or updates to any
such schedules.
POST-PETITION LOAN AGREEMENT - Page 76
ARTICLE 8
GENERAL WARRANTIES AND REPRESENTATIONS
Each Borrower warrants and represents to the Agent and the Lenders that
except as set forth in the Schedules to this Agreement as they may be modified
from time to time pursuant to SECTION 7.4, and except as hereafter disclosed to
and accepted by the Majority Lenders in writing:
Section 8.1 AUTHORIZATION, VALIDITY, AND ENFORCEABILITY OF THIS
AGREEMENT AND THE LOAN DOCUMENTS; NO CONFLICTS. Each Borrower has the power and
authority to execute, deliver, and perform this Agreement and the other Loan
Documents to which it is a party, to incur the Obligations, and to grant to the
Agent Liens upon the Collateral. Each Borrower has taken all necessary action
(including obtaining approval of its stockholders, partners, general partner(s),
members, or other applicable equity owners, if necessary) to authorize its
execution, delivery, and performance of this Agreement and the other Loan
Documents to which it is a party. This Agreement and the other Loan Documents
have been duly executed and delivered by each Borrower, and constitute the
legal, valid, and binding obligations of each Borrower, enforceable against it
in accordance with their respective terms without defense, set-off, or
counterclaim, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws at the time in effect affecting the
rights of creditors generally and to the effect of general principles of equity
whether applied by a court of law or equity. Each Borrower's execution,
delivery, and performance of this Agreement and the other Loan Documents to
which it is a party do not and will not conflict with, or constitute a violation
or breach of, or constitute a default under, or result in or require the
creation or imposition of any Lien upon the property of any Borrower by reason
of the terms of (a) any contract, mortgage, Lien, lease, agreement, indenture,
document, or agreement related to any the Debt evidenced by the Subordinated
Notes, the Indenture, and any other agreements entered into in connection
therewith), or instrument to which such Borrower is a party or which is binding
upon it, (b) any Requirement of Law applicable to such Borrower, or (c) the
certificate or articles of incorporation, by-laws, or other organizational or
constituent documents, as the case may be, of such Borrower. The Borrowers'
entering into this Agreement and incurrence of the Obligations resulting from
each Borrowing is not prohibited under the Subordinated Notes.
Section 8.2 VALIDITY AND PRIORITY OF SECURITY INTEREST. The provisions
of this Agreement, the Mortgages, and the other Loan Documents create legal and
valid Liens on all the Collateral in favor of the Agent, for the benefit of the
Agent and the Lenders, and, to the extent any such Liens may be perfected under
the UCC, such Liens constitute perfected and continuing Liens on the Collateral,
securing all the Obligations, and enforceable against the Borrowers and all
third parties, and having priority over all other Liens on the Collateral (a)
except in the case of Liens described in CLAUSES (d), (d), and (f) of the
definition of Permitted Liens to the extent any such Liens would have priority
over the Agent's Liens pursuant to any Requirement of Law) and (b) except for
Liens the perfection of which is outside the scope of the UCC, Liens in
certificated vehicles, and Liens perfected only by possession to the extent the
Agent has not obtained or does not maintain possession of such Collateral.
POST-PETITION LOAN AGREEMENT - Page 77
Section 8.3 ORGANIZATION AND QUALIFICATION. Each Borrower (a) is duly
formed or organized and validly existing in good standing under the laws of the
jurisdiction of its formation or organization, (b) is qualified to do business
as a foreign business entity and is in good standing in the jurisdictions set
forth on SCHEDULE 8.3, which are the only jurisdictions in which qualification
is necessary in order for it to own or lease its property and conduct its
business except for any jurisdiction for which the failure to so qualify could
not reasonably be expected to have a Material Adverse Effect, and (c) has all
requisite power and authority to conduct its business and to own its property as
presently conducted or owned.
Section 8.4 CORPORATE NAME; PRIOR TRANSACTIONS. Except as set forth on
SCHEDULE 8.4, since the date of its organization or acquisition as a Subsidiary
of the Parent, whichever time period is shorter, no Borrower has been known by
or used any other corporate or fictitious name, or been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any Person,
or acquired any of its property outside of the ordinary course of business.
Section 8.5 SUBSIDIARIES. SCHEDULE 8.5 is a correct and complete list,
as of the Closing Date, of the name and relationship to the Parent of each and
all of the Parent's Subsidiaries. SCHEDULE 8.5 sets forth, as of the Closing
Date, a true and complete listing of each class of each Borrower's authorized
Capital Stock, of which all of such issued shares are validly issued,
outstanding, fully paid and non-assessable, and owned beneficially and of record
by the Persons identified on SCHEDULE 8.5. All Borrowers (other than the Parent)
are Wholly-Owned Subsidiaries of the Parent. As of the Closing Date the
Borrowers (other than the Parent) constitute all of the Subsidiaries of the
Parent excluding MRC.
Section 8.6 FINANCIAL STATEMENTS. The Parent has delivered to the Agent
and the Lenders the audited balance sheet and related statements of income,
retained earnings, cash flow, and changes in stockholders equity for the Parent
and its Subsidiaries as of December 31, 2000, and for the Fiscal Year then
ended, accompanied by the report thereon of the Parent's independent certified
public accountants, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP. The Parent has also delivered to the
Agent and the Lenders the unaudited balance sheet and related statements of
income and cash flow for the Parent and its Subsidiaries as of September 30,
2001. All such financial statements have been prepared in accordance with GAAP
and fairly present the financial position of the Parent and its Subsidiaries as
at the dates thereof and their results of operations for the periods then ended
(except with respect to the financial statements dated September 30, 2001, for
the absence of applicable footnotes.
Section 8.7 SOLVENCY. Each Borrower is Solvent prior to and after giving
effect to the making of the Revolving Loans to be made on the Closing Date and
the issuance of the Letters of Credit and Credit Support to be issued on the
Closing Date (if any), and shall remain Solvent during the term of this
Agreement.
Section 8.8 DEBT. After giving effect to the making of the Revolving
Loans to be made on the Closing Date, the Borrowers have no Debt, except (a) the
Obligations, (b) Debt described on SCHEDULE 8.8, (c) trade payables and other
obligations arising in the ordinary course of business, (d) other Debt existing
on the Closing Date and reflected in the Financial Statements
POST-PETITION LOAN AGREEMENT - Page 78
described in SECTION 8.6, and (e) other Debt entered into after the Closing Date
as permitted by SECTION 9.13 and reflected in the Financial Statements delivered
pursuant to SECTION 7.2.
Section 8.9 DISTRIBUTIONS. As of the Closing Date, since September 30,
2001, no Distribution has been declared, paid, or made upon or in respect of any
Capital Stock or other equity securities of the Parent.
Section 8.10 TITLE TO PROPERTY. Each Borrower has good and indefeasible
title in fee simple to the Real Estate identified on SCHEDULE 8.11 as owned by
such Borrower, and each Borrower has good, indefeasible, and merchantable title
to all of its other property (including the assets reflected on the October 31,
2001 Financial Statements delivered to the Agent and the Lenders, except as
sold, transferred, or otherwise disposed of in the ordinary course of business
since the date thereof or as permitted by this Agreement), free of all Liens
except Permitted Liens.
Section 8.11 REAL ESTATE; LEASES. SCHEDULE 8.11 sets forth, as of the
Closing Date, a correct and complete list of all Real Estate owned by each
Borrower, all leases and subleases of real or personal property by each Borrower
as lessee or sublessee (other than leases of personal property as to which it is
lessee or sublessee for which the value of such personal property is less than
$500,000), and all leases and subleases of real or personal property by each
Borrower as lessor or sublessor. Each of such leases and subleases is valid and
enforceable in accordance with its terms and is in full force and effect, and,
to the Borrowers' knowledge, no default by any party to any such lease or
sublease exists.
Section 8.12 PROPRIETARY RIGHTS. SCHEDULE 8.12 sets forth a correct and
complete list of all of each Borrower's registered patents and trademarks
material to its business. None of the patents and trademarks listed in SCHEDULE
8.12 is subject to any licensing agreement or similar arrangement except as set
forth on SCHEDULE 8.12. The patents and trademarks described on SCHEDULE 8.12
constitute all of the property of such type necessary to the current and
anticipated future conduct of the Borrowers' business. To the best of each
Borrower's knowledge, no slogan or other advertising device, product, process,
method, substance, part, or other material now employed, or now contemplated to
be employed, by any Borrower infringes in any material respect upon any rights
held by any other Person. No claim or litigation regarding any of the foregoing
is pending or threatened, and no patent, invention, device, application,
principle or any statute, law, rule, regulation, standard, or code is pending
or, to the knowledge of any Borrower, proposed, which, in either case, could
reasonably be expected to have a Material Adverse Effect.
Section 8.13 TRADE NAMES. All trade names or styles under which any
Borrower will sell Inventory or create Accounts, or to which instruments in
payment of Accounts may be made payable, are listed on SCHEDULE 8.13.
Section 8.14 LITIGATION. Except as set forth on SCHEDULE 8.14, there is
no pending, or to the best of any Borrower's knowledge threatened, action, suit,
proceeding, or counterclaim by any Person, or investigation by any Governmental
Authority, or any basis for any of the foregoing, which could reasonably be
expected to have a Material Adverse Effect.
POST-PETITION LOAN AGREEMENT - Page 79
Section 8.15 RESTRICTIVE AGREEMENTS. No Borrower is a party to any
contract or agreement, or subject to any charter or other corporate restriction,
which affects its ability to execute, deliver, and perform the Loan Documents to
which it is a party and repay the Obligations or which could have a Material
Adverse Effect.
Section 8.16 LABOR MATTERS. Except as set forth on SCHEDULE 8.16, as of
the Closing Date (a) there is no collective bargaining agreement or other labor
contract covering employees of any Borrower, (b) no such collective bargaining
agreement or other labor contract is scheduled to expire during the term of this
Agreement, (c) no union or other labor organization is seeking to organize, or
to be recognized as, a collective bargaining unit of employees of any Borrower
or for any similar purpose, and (d) there is no pending or threatened, strike,
work stoppage, material unfair labor practice claim, or other material labor
dispute against or affecting any Borrower or its employees.
Section 8.17 ENVIRONMENTAL MATTERS. Except as otherwise disclosed on
SCHEDULE 8.17:
(a) Each Borrower has complied in all material respects with all
Environmental Laws and no Borrower nor any of its presently owned Real
Estate or presently conducted operations, nor its previously owned Real
Estate or prior operations, is subject to any enforcement order from or
liability agreement with any Governmental Authority or private Person
respecting (i) compliance with any Environmental Law or (ii) any potential
liabilities and costs or remedial action (involving a liability or
potential liability in excess of $1,000,000) arising from the Release or
threatened Release of a Contaminant.
(b) Each Borrower has obtained all permits necessary for its current
operations under Environmental Laws other than permits which the failure to
obtain could not reasonably be expected to have a Material Adverse Effect,
and all such permits are in good standing and each Borrower is in
compliance with all material terms and conditions of such permits.
(c) No Borrower, nor to the best of any Borrower's knowledge any of
its predecessors in interest, has in violation of any Environmental Law
stored, treated, or disposed of any hazardous waste (as defined pursuant to
40 CFR Part 261 or any equivalent Environmental Law).
(d) No Borrower has received any summons, complaint, order, or
similar written notice indicating that it is not currently in compliance
with, or that any Governmental Authority is investigating its compliance
with, any Environmental Laws or that it is or may be liable to any other
Person as a result of a Release or threatened Release of a Contaminant.
(e) None of the present or past operations of any Borrower is the
subject of any investigation by any Governmental Authority evaluating
whether any remedial action is needed to respond to a Release or threatened
Release of a Contaminant in each such case.
POST-PETITION LOAN AGREEMENT - Page 80
(f) There is not now, nor to the best of any Borrower's knowledge
has there ever been on or in the Real Estate of any Borrower in violation
of Environmental Laws:
(i) any underground storage tanks or surface impoundments,
(ii) any asbestos-containing material, or
(iii) any polychlorinated biphenyls (PCBs) used in hydraulic oils,
electrical transformers, or other equipment.
(g) Since December 31, 2000 or as otherwise disclosed to the Agent
pursuant to SECTION 7.3(g), SECTION 7.3(h), or SECTION 7.3(i), no Borrower
has filed any notice under any requirement of Environmental Law reporting a
spill or accidental and unpermitted Release or discharge of a Contaminant
into the environment.
(h) No Borrower has entered into any negotiations or settlement
agreements with any Person (including the prior owner of its property)
imposing material obligations or liabilities on any Borrower with respect
to any remedial action in response to the Release of a Contaminant or
environmentally related claim.
(i) None of the products manufactured, distributed, or sold by any
Borrower contains asbestos containing material.
(j) No Environmental Lien has attached to the Real Estate of any
Borrower.
Section 8.18 NO VIOLATION OF LAW. No Borrower is in violation of any law,
statute, regulation, ordinance, judgment, order, or decree applicable to it,
which violation could reasonably be expected to have a Material Adverse Effect.
Section 8.19 NO DEFAULT. No Borrower is in default with respect to any
Post-Petition note, indenture, loan agreement, mortgage, lease, deed, or other
material agreement to which such Borrower is a party or by which it is bound.
Section 8.20 ERISA COMPLIANCE. Except as specifically disclosed in
SCHEDULE 8.20:
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code, and other federal or state law.
Each Plan which is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS and nothing has
occurred which would cause the loss of such qualification. Each Borrower
and each ERISA Affiliate has made all required contributions to any Plan
subject to Section 412 of the Code, and no application for a funding waiver
or an extension of any amortization period pursuant to Section 412 of the
Code has been made with respect to any Plan.
(b) There are no pending or threatened claims, actions, or lawsuits,
or action by any Governmental Authority, with respect to any Plans. There
has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan.
POST-PETITION LOAN AGREEMENT - Page 81
(c) Except for instances, if any, which together do not give rise to
liability in excess of $1,000,000 in the aggregate, (i) no ERISA Event has
occurred or is reasonably expected to occur; (ii) no Pension Plan has any
Unfunded Pension Liability; (iii) no Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of
ERISA with respect to any Pension Plan (other than premiums due and not
delinquent under Section 4007 of ERISA); (iv) no Borrower nor any ERISA
Affiliate has incurred, or expects to incur, any liability (and no event
has occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Section 4201 or 4243 of ERISA with
respect to a Multi-employer Plan; and (v) no Borrower nor any ERISA
Affiliate has engaged in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA.
Section 8.21 TAXES. Each Borrower has filed all federal and other tax
returns and reports required to be filed (or appropriate extensions have been
timely filed), and has paid all federal and other taxes, assessments, fees, and
other governmental charges levied or imposed upon them or their properties,
income, or assets otherwise due and payable unless such unpaid taxes and
assessments would constitute a Permitted Lien.
Section 8.22 REGULATED ENTITIES. No Borrower nor any Person controlling a
Borrower is an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940. No Borrower
is a "holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of a "holding company" or a "public utility" within the meaning of
the Public Utility Holding Company Act of 1935, or a regulated entity under the
Federal Power Act, the Interstate Commerce Act, any state public utilities code
or law, or any other federal or state statute or regulation limiting its ability
to incur indebtedness.
Section 8.23 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the
Revolving Loans are to be used solely for the purposes specified in SECTION
9.26. No Borrower is engaged in the business of buying or selling Margin Stock
or extending credit for the purpose of buying or carrying Margin Stock.
Section 8.24 NO MATERIAL ADVERSE CHANGE. No material adverse change has
occurred in the property, business, operations, or conditions (financial or
otherwise), profits, or prospects of the Borrowers, taken as a whole, since
November 15, 2001.
Section 8.25 FULL DISCLOSURE. None of the representations or warranties
made by any Borrower in the Loan Documents as of the date such representations
and warranties are made or deemed made, and none of the statements contained in
any exhibit, report, statement, or certificate furnished by or on behalf of any
Borrower in connection with the Loan Documents (including the offering and
disclosure materials delivered by or on behalf of any Borrower to the Lenders
prior to the Closing Date), contain any untrue statement of a material fact or
omit any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they are
made, not misleading as of the time when made or delivered.
POST-PETITION LOAN AGREEMENT - Page 82
Section 8.26 MATERIAL AGREEMENTS. As of the Closing Date, SCHEDULE 8.26
sets forth all material agreements and contracts (other than this Agreement) of
any Borrower which are required to be publicly disclosed pursuant to any
Requirement of Law since the date of the Parent's quarterly report for the
Fiscal Quarter ended September 30, 2001.
Section 8.27 BANK ACCOUNTS. As of the Closing Date, SCHEDULE 8.27 contains
a complete and accurate list of all bank accounts maintained by each Borrower
with any bank or other financial institution.
Section 8.28 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or other Person is necessary or required in connection
with the execution, delivery, or performance by, or enforcement against, any
Borrower of this Agreement or any other Loan Document except for those which
have been duly obtained by the Borrowers, copies of which have been provided to
the Agent and the Lenders, and for filing of financing statements and mortgages.
Section 8.29 INVESTMENT PROPERTY.
(a) SCHEDULE 8.29 sets forth a correct and complete list of all
Investment Property owned by each Borrower. Each Borrower is the legal and
beneficial owner of such Investment Property, as so reflected, free and
clear of any Lien (other than Permitted Liens), and has not sold, granted
any option with respect to, assigned or transferred, or otherwise disposed
of any of its rights or interest therein.
(b) To the extent any Borrower is an Issuer (as defined in
SECTION 6.2(d)): (i) the Issuer's shareholders that are Borrowers and the
ownership interest of each such shareholder are as set forth on SCHEDULE
8.5, and each such shareholder is the registered owner thereof on the books
of the Issuer; (ii) the Issuer acknowledges the Agent's Lien; (iii) to the
extent required to perfect the Agent's Liens, such security interest,
collateral assignment, lien, and pledge in favor of the Agent has been
registered on the books of the Issuer for such purpose as of the date
hereof; and (iv) the Issuer is not aware of any liens, restrictions, or
adverse claims which exist on any such Investment Property other than the
continuing security interest, collateral assignment, lien, and pledge in
favor of the Agent granted pursuant to the terms of SECTION 6.1.
Section 8.30 COMMON ENTERPRISE. The successful operation and condition of
each of the Borrowers is dependent on the continued successful performance of
the functions of the group of Borrowers as a whole and the successful operation
of each Borrower is dependent on the successful performance and operation of
each other Borrower. Each of the Borrowers expects to derive benefit (and its
board of directors or other governing body has determined that it may reasonably
be expected to derive benefit), directly and indirectly, from successful
operations of the Parent and each of the other Borrowers. Each Borrower expects
to derive benefit (and the boards of directors or other governing body of each
such Borrower have determined that it may reasonably be expected to derive
benefit), directly and indirectly, from the credit extended by the Lenders to
the Borrowers hereunder, both in their separate capacities and as members of the
group of companies. Each Borrower has determined that execution, delivery, and
performance of this Agreement and any other Loan Documents to be executed by
such
POST-PETITION LOAN AGREEMENT - Page 83
Borrower is within its corporate purpose, will be of direct and indirect benefit
to such Borrower, and is in its best interest.
ARTICLE 9
AFFIRMATIVE AND NEGATIVE COVENANTS
Each Borrower covenants to the Agent and each Lender that so long as any of
the Obligations remain outstanding or this Agreement is in effect unless waived
pursuant to SECTION 13.2 each Borrower will keep and perform each of the
following covenants:
Section 9.1 TAXES AND OTHER OBLIGATIONS. Except as otherwise permitted by
the terms of this Agreement, each Borrower shall (a) file when due all tax
returns and other reports which it is required to file, (b) pay, or provide for
the payment, when due, of all taxes, fees, assessments, and other governmental
charges against it or upon its property, income, and franchises, make all
required withholding and other tax deposits, and establish adequate reserves for
the payment of all such items, and provide to the Agent and the Lenders, upon
request, satisfactory evidence of its timely compliance with the foregoing, and
(c) pay when due all Funded Debt owed by it and all claims of materialmen,
mechanics, carriers, warehousemen, landlords, processors, and other like
Persons, and all other indebtedness owed by it and perform and discharge in a
timely manner all other obligations undertaken by it; PROVIDED, HOWEVER, such
Borrower need not pay any tax, fee, assessment, or governmental charge, that (w)
it is contesting in good faith by appropriate proceedings diligently pursued,
(x) such Borrower has established proper reserves for as provided in accordance
with GAAP, (y) no Lien (other than a Permitted Lien) results from such
non-payment, and (z) with respect to any such tax, fee, assessment, or
governmental charge in excess of $250,000, such Borrower has notified the Agent
in writing of any contest described in CLAUSE (w) preceding.
Section 9.2 EXISTENCE AND GOOD STANDING. Except with respect to any
Borrower that merges into or consolidates with another Borrower as allowed by
SECTION 9.9, each Borrower shall maintain its existence and its qualification
and good standing in all jurisdictions in which the failure to maintain such
existence and qualification or good standing could reasonably be expected to
have a Material Adverse Effect.
Section 9.3 COMPLIANCE WITH LAW AND AGREEMENTS; MAINTENANCE OF LICENSES.
Each Borrower shall comply with all Requirements of Law of any Governmental
Authority having jurisdiction over it or its business (including the Federal
Fair Labor Standards Act and all Environmental Laws) except for any
noncompliance which could not reasonably be expected to have a Material Adverse
Effect. Each Borrower shall obtain and maintain all licenses, permits,
franchises, and governmental authorizations necessary to own its property and,
except as could not reasonably be expected to have a Material Adverse Effect, to
conduct its business as conducted on the Closing Date. No Borrower shall modify,
amend, or alter its certificate or articles of incorporation (or other similar
constituent documents) other than in a manner which does not adversely affect
the rights of the Lenders or the Agent.
POST-PETITION LOAN AGREEMENT - Page 84
Section 9.4 MAINTENANCE OF PROPERTY. Each Borrower shall maintain all of
its property necessary and useful in the conduct of its business, in good
operating condition and repair, ordinary wear and tear excepted.
Section 9.5 INSURANCE.
(a) Each Borrower shall maintain with financially sound and
reputable insurers insurance that is reasonably consistent with prudent
industry practice and acceptable to the Agent in its reasonable discretion.
Without limiting the foregoing, each Borrower shall maintain flood
insurance, in the event of a designation of the area in which any of its
Real Estate is located as "flood prone" or a "flood risk area,"
(hereinafter "SFHA") as defined by the Flood Disaster Protection Act of
1973, in an amount to be reasonably determined by the Agent, and shall
comply with the additional requirements of the National Flood Insurance
Program as set forth in said Act.
(b) For each of the insurance policies issued as required by this
SECTION 9.5 each Borrower shall cause the Agent, for the benefit of the
Agent and the Lenders, to be named as secured party or mortgagee and loss
payee or additional insured, in a manner acceptable to the Agent. Each
policy of insurance shall contain a clause or endorsement requiring the
insurer to give not less than thirty (30) days prior written notice to the
Agent in the event of cancellation of such policy for any reason whatsoever
and a clause or endorsement stating that the interest of the Agent shall
not be impaired or invalidated by any act or neglect of the insured Person
or the owner of any premises for purposes more hazardous than are permitted
by such policy. All premiums for such insurance shall be paid by the
Borrowers when due, and certificates of insurance and, if requested by the
Agent, photocopies of the policies shall be delivered to the Agent, in each
case, in sufficient quantity for distribution by the Agent to each of the
Lenders. If any Borrower fails to procure such insurance or to pay the
premiums therefor when due, the Agent may, and at the direction of the
Majority Lenders shall, do so from the proceeds of Revolving Loans.
(c) Each Borrower shall promptly notify the Agent and the Lenders
of any loss, damage, or destruction to the Collateral in excess of (A)
$5,000,000 if covered by insurance or (B) $1,000,000 if not covered by
insurance. The Agent is hereby authorized to directly collect all insurance
proceeds in respect of Collateral and to apply or remit such proceeds as
follows:
(i) With respect to insurance proceeds relating to Collateral other
than Fixed Assets, after deducting from such proceeds the
reasonable expenses, if any, incurred by the Agent in the
collection or handling thereof, the Agent shall apply such
proceeds to the reduction of the Obligations in the manner
provided for in, and such proceeds shall be subject to the
provisions of, SECTION 4.3.
(ii) With respect to insurance proceeds relating to Collateral
consisting of Fixed Assets, after deducting from such proceeds
the reasonable expenses, if any, incurred by the Agent in the
collection or handling thereof, the
POST-PETITION LOAN AGREEMENT - Page 85
Agent shall apply such proceeds, ratably, to the reduction of
the Revolving Loans, or at the option of the Majority Lenders,
may permit or require such money, or any part thereof, to be
used to replace, repair, restore, or rebuild the relevant Fixed
Assets in a diligent and expeditious manner with materials and
workmanship of substantially the same quality as existed before
the loss, damage, or destruction.
Section 9.6 CONDEMNATION.
(a) Each Borrower shall, promptly upon learning of the institution
of any proceeding for the condemnation or other taking of any of its
property, notify the Agent of the pendency of such proceeding, and agrees
that the Agent may participate in any such proceeding, and the Borrowers
from time to time will deliver to the Agent all instruments reasonably
requested by the Agent to permit such participation.
(b) The Agent is hereby authorized to directly collect the proceeds
of any condemnation claim or award, and to apply or remit such proceeds in
the same manner as insurance proceeds under SECTION 9.5.
Section 9.7 ENVIRONMENTAL LAWS.
(a) Each Borrower shall conduct its business in material compliance
with all Environmental Laws applicable to it, including those relating to
the generation, handling, use, storage, and disposal of any Contaminant.
Each Borrower shall take prompt and appropriate action to respond to any
non-compliance with Environmental Laws and shall regularly report to the
Agent on such response.
(b) Without limiting the generality of the foregoing, the Borrowers
shall, upon the Agent's request, submit to the Agent and the Lenders an
update of the status of each environmental compliance or liability issue
concerning any Borrower or any of their respective properties or operations
(whether past or present). The Agent or any Lender may request copies of
technical reports prepared by any Borrower and its communications with any
Governmental Authority to determine whether such Borrower is proceeding
reasonably to correct, cure, or contest in good faith any alleged
non-compliance or environmental liability. Each Borrower shall, at the
Agent's or the Majority Lenders' request and at such Borrower's expense,
(i) retain an independent environmental engineer acceptable to the Agent to
evaluate any site, including tests if appropriate, where the non-compliance
or alleged non-compliance with Environmental Laws has occurred and prepare
and deliver to the Agent, in sufficient quantity for distribution by the
Agent to the Lenders, a report setting forth the results of such
evaluation, a proposed plan for responding to any environmental problems
described therein, and an estimate of the costs thereof, and (ii) provide
to the Agent, in sufficient quantity for distribution by the Agent to the
Lenders, a supplemental report of such engineer whenever the scope of the
environmental problems (if any), or the response thereto or the estimated
costs thereof, shall change in any material respect.
POST-PETITION LOAN AGREEMENT - Page 86
(c) Within ninety (90) days from the Closing Date, the Borrower
will provide to the Lenders at the Borrowers' expense an environmental site
assessment, Phase 1, for each parcel of Real Estate in accordance with
Designation: E1527-00 of the American Society of Testing and Materials.
Section 9.8 COMPLIANCE WITH ERISA. Each Borrower shall, and shall cause
each of its ERISA Affiliates to: (a) maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code, and other
federal or state law; (b) cause each Plan which is qualified under Section
401(a) of the Code to maintain such qualification; (c) make all required
contributions to any Plan subject to Section 412 of the Code; (d) not engage in
a prohibited transaction or violation of the fiduciary responsibility rules with
respect to any Plan; and (e) not engage in a transaction that could be subject
to Section 4069 or 4212(c) of ERISA.
Section 9.9 MERGERS, CONSOLIDATIONS, SALES, ACQUISITIONS. No Borrower shall
enter into any transaction of merger, reorganization, or consolidation, or
transfer, sell, assign, lease, or otherwise dispose of all or any part of its
property, or wind up, liquidate or dissolve, or agree to do any of the
foregoing, except for sales of Inventory in the ordinary course of its business
and sales or other dispositions of Real Estate and Equipment in the ordinary
course of its business that is obsolete or no longer useable by such Borrower in
its business; PROVIDED that, notwithstanding the foregoing or any other
provision of this Agreement, as long as no Default or Event of Default exists or
would result therefrom and provided the Parent gives the Agent and the Lenders
prior written notice:
(a) a Borrower, other than the Parent, may wind-up, dissolve, or
liquidate if (i) its property is transferred to the Parent or another
Borrower and (ii) the Person acquiring such property complies with its
obligations under SECTION 6.2 and SECTION 9.27 simultaneously with such
acquisition;
(b) a Borrower, other than the Parent, may merge or consolidate
with the Parent or another Borrower (PROVIDED the Parent is the survivor of
any such merger or consolidation to which it is a party); and
(c) a Borrower may enter into sales or other dispositions of its
property consisting of:
(i) Inventory sold in the ordinary course of business;
(ii) Equipment and Real Estate if the Net Proceeds in cash from such
sale satisfies the requirements of SECTION 9.33; and
(iii) sales approved by the Bankruptcy Court after a hearing,
PROVIDED THAT the proceeds of any such sale are allocated in
accordance with SECTION 4.3.
The inclusion of proceeds in the definition of Collateral shall not be deemed to
constitute the Agent's or any Lender's consent to any sale or other disposition
of the Collateral except as expressly permitted herein.
POST-PETITION LOAN AGREEMENT - Page 87
Section 9.10 DISTRIBUTIONS; CAPITAL CHANGE; RESTRICTED INVESTMENTS; LOANS.
No Borrower shall (a) directly or indirectly declare or make, or incur any
liability to make, any Distribution, except Distributions by a Borrower to
another Borrower, (b) make any change in its capital structure which could have
a Material Adverse Effect, (c) make any Restricted Investment, or (d) make any
loan, advance or extension of credit (except for advances from one Borrower to
another Borrower).
Section 9.11 TRANSACTIONS AFFECTING COLLATERAL OR OBLIGATIONS. No Borrower
shall enter into any transaction which could reasonably be expected to result in
a Material Adverse Effect.
Section 9.12 GUARANTIES. No Borrower shall make, issue, or become liable
on any Guaranty, except Guaranties of the Obligations and Guaranties of Debt
allowed under SECTION 9.13.
Section 9.13 DEBT. No Borrower shall incur or maintain any Debt, other
than: (a) the Obligations; (b) trade payables and obligations arising in the
ordinary course of business; (c) other Debt existing on the Closing Date and
reflected in the Financial Statements described in SECTION 8.6, and (d) in the
case of a Borrower that is an RPA Seller, Debt incurred by such Borrower under
the RPA.]
Section 9.14 PREPAYMENT OF DEBT. No Borrower shall voluntarily prepay any
Funded Debt, except the Obligations in accordance with the terms of this
Agreement and except for repayment of Debt secured by assets sold.
Section 9.15 TRANSACTIONS WITH AFFILIATES. Except as set forth below, no
Borrower shall sell, transfer, distribute, or pay any money or property,
including, but not limited to, any fees or expenses of any nature (including,
but not limited to, any fees or expenses for management services), to any
Affiliate that is not a Borrower, or lend or advance money or property to any
Affiliate that is not a Borrower, or invest in (by capital contribution or
otherwise) or purchase or repurchase any stock or indebtedness, or any property,
of any Affiliate that is not a Borrower, or become liable on any Guaranty of the
indebtedness, dividends, or other obligations of any Affiliate that is not a
Borrower.
Section 9.16 INVESTMENT BANKING AND FINDER'S FEES. No Borrower shall pay
or agree to pay, or reimburse any other party with respect to, any investment
banking or similar or related fee, underwriter's fee, finder's fee, or broker's
fee to any Person in connection with this Agreement other than pursuant to the
Agents' Letter. The Borrowers shall defend and indemnify the Agent and the
Lenders against and hold them harmless from (a) all claims of any Person that
any Borrower is obligated to pay any such fees and (b) all costs and expenses
(including attorneys' fees) incurred by the Agent and/or any Lender in
connection therewith.
Section 9.17 BUSINESS CONDUCTED. The Borrowers shall not engage directly
or indirectly, in any line of business other than the businesses in which the
Borrowers are engaged on the Closing Date and any business activities that are
substantially similar, related, or incidental thereto.
POST-PETITION LOAN AGREEMENT - Page 88
Section 9.18 LIENS. No Borrower shall create, incur, assume, or permit to
exist any Lien on any property now owned or hereafter acquired by it, except
Permitted Liens. Other than as set forth in this Agreement or in connection with
the creation or incurrence of any Debt under SECTION 9.13(d) no Borrower will
enter into or become subject to any Negative Pledge.
Section 9.19 SALE AND LEASEBACK TRANSACTIONS. No Borrower shall, directly
or indirectly, enter into any arrangement with any Person providing for such
Borrower to lease or rent property that such Borrower has sold or will sell or
otherwise transfer to such other Person, PROVIDED that, subject to SECTION 4.3,
any Borrower may at any time enter into any such arrangement so long as the
aggregate net book value of all property sold by the Borrowers in connection
with all such arrangements does not exceed $20,000,000 and the aggregate amount
of all obligations incurred by the Borrowers in connection with all such
arrangements does not exceed $20,000,000 in the aggregate at any time
outstanding.
Section 9.20 NEW SUBSIDIARIES. No Borrower shall directly or indirectly,
organize, create, acquire or permit to exist any Subsidiary except as permitted
by this SECTION 9.20. Promptly upon creation or acquisition of any Subsidiary of
a Borrower (including any Subsidiary acquired pursuant to SECTION 9.9), such
Borrower shall propose to the Agent that such new Subsidiary become and, with
the Agent's and the Majority Lenders' consent, pursuant and subject to SECTION
15.20 cause such Subsidiary to become a Borrower and a Guarantor hereunder.
Section 9.21 FISCAL YEAR. The Parent shall not change the last day of its
Fiscal Year without prior notice to the Agent given concurrently with any
required notice to the Securities and Exchange Commission.
Section 9.22 CAPITAL EXPENDITURES. As of each Fiscal Period, no Borrower
shall make or incur any Capital Expenditure if, after giving effect thereto, the
aggregate amount of all Capital Expenditures by the Borrowers on a consolidated
basis during such period would exceed one hundred twenty percent (120%) of the
respective amount set forth in the Budget for such period (with cumulative
month-by-month credit for any unused amount in any prior month(s), but with no
cumulative credit or carryover from one Fiscal Year of the Borrowers to the next
Fiscal Year of the Borrowers); PROVIDED, HOWEVER, if during any Fiscal Year the
Borrower's Fixed Charge Coverage Ratio as of any Fixed Charge Coverage Ratio
Measurement Date is equal to or greater than 2.0 to 1.0, then the preceding 120%
limitation will be increased to 200% for each month in the Budget, effective
with the first month of the next following Fiscal Year, for so long as the 2.0
to 1.0 Fixed Charge Coverage Ratio is maintained.
Section 9.23 OPERATING LEASE OBLIGATIONS. No Borrower shall enter into, or
suffer to exist, any lease of real or personal property as lessee or sublessee
(excluding Capital Leases), if, after giving effect thereto, the aggregate
amount of Rentals payable by the Borrowers on a consolidated basis in any Fiscal
Year in respect of such lease and all other such leases would exceed
$45,000,000. The term "RENTALS" means all payments due from the lessee or
sublessee under a lease, including, without limitation, basic rent, percentage
rent, property taxes, utility or maintenance costs, and insurance premiums.
POST-PETITION LOAN AGREEMENT - Page 89
Section 9.24 FIXED CHARGE COVERAGE RATIO. On each respective Fixed Charge
Coverage Measurement Date as follows, the Borrowers shall not permit the Fixed
Charge Coverage Ratio to be less than the following respective ratios:
MEASUREMENT DATE REQUIRED MINIMUM RATIO
---------------- ----------------------
March 31, 2002 0.50 to 1.0
April 30, 2002 0.50 to 1.0
May 31, 2002 0.75 to 1.0
At June 30, 2002 and at 1.0 to 1.0
each Fixed Charge Coverage
Measurement Date thereafter
Section 9.25 MINIMUM AVERAGE AVAILABILITY. As of the end of each of the
following Fiscal Periods, the Borrowers shall not permit the average daily
Availability (when calculating the average daily Availability, Availability for
a non-Business Day shall be Availability as of the immediately preceding
Business Day) for each calendar month to be less than the following respective
amounts:
FISCAL PERIOD ENDING REQUIRED MINIMUM AVERAGE
-------------------- AVAILABILITY
------------
January 31, 2002 and each month $5 million
end through May 31, 2002
June 30, 2002 $10 million
July 31, 2002 and each month end $15 million
through February 28, 2003
March 31, 2003 and each month end $20 million
through maturity
Section 9.26 USE OF PROCEEDS. The Borrowers shall use the proceeds of the
Loans for general corporate purposes, and shall not use any portion of Revolving
Loan proceeds, directly or indirectly, (i) to buy or carry any Margin Stock,
(ii) to repay or otherwise refinance indebtedness of the Borrowers or others
incurred to buy or carry any Margin Stock, (iii) to extend credit for the
purpose of buying or carrying any Margin Stock, or (iv) to acquire any security
in any transaction that is subject to Section 13 or 14 of the Exchange Act.
Section 9.27 FURTHER ASSURANCES. The Borrowers shall execute and deliver,
or cause to be executed and delivered, to the Agent and/or the Lenders such
documents and agreements, and shall take or cause to be taken such actions, as
the Agent or any Lender may, from time to time, reasonably request to carry out
the terms and conditions of this Agreement and the other Loan Documents.
POST-PETITION LOAN AGREEMENT - Page 90
Section 9.28 BANK AND DOCUMENTATION AGENT AS DEPOSITORY. Each Borrower
shall maintain its master collection and operating accounts with the Bank. Each
Borrower shall otherwise utilize either the Bank and/or the Documentation Agent
as its principal depository banks, including for the maintenance of
administrative, cash management, collection activity, and other deposit accounts
for the conduct of its business.
Section 9.29 THIS SECTION IS RESERVED
Section 9.30 DIP FINANCING. The Borrowers shall not incur or apply to the
Bankruptcy Court for authority to incur, or suffer to exist, any (i)
indebtedness having the priority afforded by Section 364(c) or (d) of the
Bankruptcy Code (including any Superpriority Claims) other than the financing
provided for under this Agreement and the other DIP Financing Documents or as
authorized pursuant to the Financing Orders or (ii) obligation to make adequate
protection payments, or otherwise provide adequate protection, other than as
contemplated by the Financing Orders.
Section 9.31 ALTERATION OF RIGHTS OF LENDERS. No Borrower shall limit,
affect or modify, or apply to the Bankruptcy Court to limit, affect or modify,
any of the Agent's or the Lenders' rights with respect to the Obligations,
including rights with respect to the Post-Petition Collateral and the priority
thereof.
Section 9.32 CHAPTER 11 CLAIMS. Except as permitted under the Financing
Orders, no Borrower shall apply to the Bankruptcy Court for the authority to
incur, create, assume, suffer or permit any claim, Lien or encumbrance (other
than Permitted Liens) against the Borrowers, or any of their assets in the
Chapter 11 Cases to be PARI PASSU with, or senior to, the Liens and claims of
the Lenders granted and arising hereunder and under the Financing Orders.
Section 9.33 MINIMUM NET PROCEEDS. The Borrowers will not (without the
prior consent of that percentage of Lenders required under SECTION 13.2 for the
release of Collateral whenever (as to Dispositions of Accounts or Inventory) the
aggregate Disposition proceeds to be paid to the Lenders will be less than the
aggregate amount eligible for advances against such Accounts or Inventory under
the Borrowing Base, or (as to Dispositions of Equipment or Real Estate) the
aggregate Loan Value of Equipment or Loan Value of Real Estate, as the case may
be) make any Disposition(s) unless in connection therewith the Net Proceeds to
be received in cash by the Borrower as a result thereof is at least equal (in
aggregate amount) to the amount eligible for advances against such Accounts or
Inventory under the Borrowing Base (in the case of an Accounts or Inventory
Disposition), to the aggregate Loan Value of Real Estate (in the case of a Real
Estate Disposition) and the Loan Value of Equipment (in the case of an Equipment
Disposition).
Section 9.34 CARVE-OUT. The Borrowers will use the Carve-Out for the
limited purposes set forth in the Interim Order.
Section 9.35 EQUIPMENT SUBLIMIT REDUCTIONS. The Borrowers will pay timely
to the Lenders all amounts necessary to cause the Equipment Sublimit Reductions
to be satisfied so that the Equipment Sublimit is never exceeded.
POST-PETITION LOAN AGREEMENT - Page 91
Section 9.36 CASH APPLIED TO LOAN. On the Closing Date, the Borrowers will
cause all cash on hand in all accounts, wherever located (in excess of such
minimal amounts as the Agent shall approve), to be applied to the Pre-Petition
Accounts Loan Balance.
Section 9.37 INVENTORY VALUATION. Upon any request by the Agent whenever
the Agent has a reasonable basis for believing that a material change has
occurred in the value of the Borrowers' Eligible Inventory, the Borrowers will
act promptly to determine the Replacement Cost of Eligible Inventory and to
prepare and provide to the Agent a written comparison of Replacement Cost of
Eligible Inventory to GAAP Book Value of Eligible Inventory.
Section 9.38 REAL ESTATE TAXES. At the Closing Date, to the extent any
past-due Real Estate taxes are unpaid, the Borrowers will pay such past-due
amounts in full, including any penalties and interest.
Section 9.39 DIRECTORS AND OFFICERS INSURANCE. The Borrowers will maintain
at all times directors and officers liability insurance having such terms of
coverage and such policy limits as are consistent with their past coverage
practices for such insurance.
ARTICLE 10
CONDITIONS OF LENDING
Section 10.1 CONDITIONS PRECEDENT TO MAKING OF REVOLVING LOANS ON THE
CLOSING DATE. The obligation of the Lenders to make the initial Revolving Loans
on the Closing Date, and the obligation of the Agent to cause the Letter of
Credit Issuer to issue any Letter of Credit or Credit Support on the Closing
Date, are subject to the following conditions precedent having been satisfied in
a manner satisfactory to the Agent and each Lender:
(a) The Agent shall have received each of the following documents,
or the following shall have occurred, as the case may be, all of which
shall be satisfactory in form and substance to the Agent and the Lenders:
(i) the Agent shall have received a counterpart of this Agreement
for each Lender duly executed and delivered by a duly
authorized officer of each of the Borrowers;
(ii) the consummation of the transactions contemplated hereby or
entered into in contemplation hereof, shall not contravene,
violate or conflict with, nor involve any Lender in a violation
of, any requirement of law;
(iii) all consents, authorizations and filings, if any, required in
connection with the execution, delivery and performance by the
Borrowers, and the validity and enforceability against the
Borrowers, of the DIP Financing Documents to which they are a
party, shall have been obtained or made, and such consents,
authorizations and filings shall be in full force and effect,
except such consents, authorizations and filings, the failure
to obtain which would not have a Material Adverse Effect;
POST-PETITION LOAN AGREEMENT - Page 92
(iv) the Agent shall have received each additional document and
other information regarding the assets, business, liabilities,
financial position, projection, results of operations or
business prospects of the Borrowers as are customary for
transactions of this type or are reasonably requested by the
Lenders;
(v) the Agent shall have received, with a copy for each Lender, the
Budget, which shall be in form and substance satisfactory to
the Lenders and the Agent;
(vi) the Borrowers shall have paid (A) all fees, costs (including
without limit, Attorney Costs) and expenses of the Agent, and
all other fees then due and payable under this Agreement,
including, without limitation, those relating to the
negotiation and preparation of the Loan Documents, those
relating to the Bankruptcy Cases and the invoiced and unpaid
fees and expenses of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C. and Ernst
& Young Corporate Finance, LLP, and (B) the invoiced and unpaid
attorneys fees of all Lenders (excluding the Agent, whose
attorneys fees are covered by the preceding clause) which in
the aggregate do not exceed $180,000 and which relate to the
negotiation and preparation of the Loan Documents or relating
to the Bankruptcy Cases up to and through (but not beyond) the
Closing Date;
(vii) the Agent shall have received, with a copy for each Lender, a
copy of the Interim Order, entered by the Bankruptcy Court and
the Interim Order shall be in full force and effect and shall
not have been vacated, stayed, reversed, modified or amended;
(viii) the Agent shall have received resolutions of the Board of
Directors of each Borrower certified by its Secretary, an
Assistant Secretary or other officer which authorize the
execution, delivery, and performance by such Borrower of this
Agreement and the other DIP Financing Documents to which such
Borrower is or is to be a party; and
(ix) the Agent shall have received a certificate of incumbency
certified by the Secretary, an Assistant Secretary or other
officer of each Borrower certifying the names of the officers
of each Borrower authorized to sign this Agreement and each of
the other DIP Financing Documents to which such Borrower is or
is to be a party (including the certificates contemplated
herein) together with specimen signatures of such officers;
(x) with respect to any Letter of Credit or Credit Support to be
issued, all documentation required by SECTION 2.3, duly
executed;
(xi) a Revolving Note payable to the order of each Lender in the
amount of its Commitment, duly executed and delivered by each
Borrower, complying with the requirements of SECTION 2.2;
POST-PETITION LOAN AGREEMENT - Page 93
(xii) a Borrowing Base Certificate effective as of the Business Day
preceding the day such initial Revolving Loans are to be funded
or any such Letter of Credit or Credit Support is to be issued;
(xiii) each Blocked Account Agreement duly executed as requested by
the Agent;
(xiv) the Agent shall have received evidence, in form, scope, and
substance, reasonably satisfactory to the Agent, of all
insurance coverage as required by this Agreement;
(xv) such other documents and instruments as the Agent or any Lender
may reasonably request.
(b) This Agreement and the other Loan Documents shall have been
executed by each party thereto and the Borrowers shall have performed and
complied with all covenants, agreements, and conditions contained herein
and in the other Loan Documents which are required to be performed or
complied with by the Borrowers before or on the Closing Date.
(c) Upon making the initial Revolving Loans (including such
Revolving Loans made to finance the fees, costs, and expenses then payable
under this Agreement) and issuing any Letters of Credit or Credit Support
on the date of making the initial Revolving Loans, and with all their
obligations current, the Borrowers shall have remaining Availability of not
less than $5,000,000.
(d) All representations and warranties made hereunder and in the
other Loan Documents shall be true and correct on the Closing Date.
(e) No Default or Event of Default shall exist on the Closing Date,
or would exist after giving effect to the Revolving Loans to be made, the
Letters of Credit to be issued, and the Credit Support to be in place on
such date.
(f) The Agent and the Lenders shall have had an opportunity, if
they so choose, to examine the books of account and other records and files
of the Borrowers and to make copies thereof, and to conduct a pre-closing
audit which shall include, without limitation, verification of Inventory,
Accounts, and the Borrowing Base, and the results of such examination and
audit shall have been satisfactory to the Agent and the Lenders in all
respects.
(g) All proceedings taken in connection with the execution of this
Agreement, all other Loan Documents and all documents and papers relating
thereto shall be satisfactory in form, scope, and substance to the Agent
and the Lenders.
(h) No action, proceeding, investigation, regulation, or
legislation shall have been instituted, threatened, or proposed by or
before any Governmental Authority to enjoin, restrain, or prohibit, or to
obtain damages in respect of, or which is related to or
POST-PETITION LOAN AGREEMENT - Page 94
arises out of this Agreement or the consummation of the transactions
contemplated by this Agreement or which, in the Agent's or the Lenders'
reasonable discretion, would make it inadvisable to consummate the
transactions contemplated by this Agreement.
(i) The Facility Fee shall have been paid in full to Agent, for the
benefit of the Lenders.
(j) The Borrowers will pay when due the Annual Agent's Fee.
The acceptance by the Borrowers of any Revolving Loans made or Letters of Credit
or Credit Support issued on the Closing Date shall be deemed to be a
representation and warranty made by the Borrowers to the effect that all of the
conditions precedent to the making of such Revolving Loans or the issuance of
such Letters of Credit or Credit Support have been satisfied, with the same
effect as delivery to the Agent and the Lenders of a certificate signed by a
Responsible Officer of the Borrowers, dated the Closing Date, to such effect.
Execution and delivery to the Agent by a Lender of a counterpart of this
Agreement shall be deemed confirmation by such Lender that (i) all conditions
precedent in this SECTION 10.1 have been fulfilled to the satisfaction of such
Lender, (ii) the decision of such Lender to execute and deliver to the Agent an
executed counterpart of this Agreement was made by such Lender independently and
without reliance on the Agent or any other Lender as to the satisfaction of any
condition precedent set forth in this SECTION 10.1, and (iii) all documents sent
to such Lender for approval, consent, or satisfaction were acceptable to such
Lender.
Section 10.2 CONDITIONS PRECEDENT TO EACH REVOLVING LOAN. The obligation
of the Lenders to make each Revolving Loan, including the initial Revolving
Loans on the Closing Date, and the obligation of the Agent to cause the Letter
of Credit Issuer to issue any Letter of Credit or provide any Credit Support
shall be subject to the further conditions precedent that on and as of the date
of any such extension of credit:
(a) the following statements shall be true, and the acceptance by
the Borrowers of any extension of credit shall be deemed to be a statement
to the effect set forth in CLAUSE (I) and CLAUSE (II) following with the
same effect as the delivery to the Agent and the Lenders of a certificate
signed by a Responsible Officer of each Borrower, dated the date of such
extension of credit, stating that:
(i) The representations and warranties contained in this Agreement
and the other Loan Documents are correct in all material
respects on and as of the date of such extension of credit as
though made on and as of such date, other than any such
representation or warranty which relates to a specified prior
date and except to the extent the Agent and the Lenders have
been notified by the Borrowers that any representation or
warranty is not correct and the Majority Lenders have
explicitly waived in writing compliance with such
representation or warranty; and
(ii) No event has occurred and is continuing, or would result from
such extension of credit, which constitutes a Default or an
Event of Default;
POST-PETITION LOAN AGREEMENT - Page 95
(b) the Borrowers shall have paid all fees, costs and other
expenses due under this Agreement; and
(c) as of the Closing Date and as of the date of funding such
Revolving Loan or issuing such Letter of Credit or Credit Support, there
shall not have occurred or exist any event or condition which constitutes a
Material Adverse Effect.
The foregoing conditions precedent are not conditions to each Lender
participating in or reimbursing the Bank or the Agent for such Lenders' Pro Rata
Share of any Agent Advance made in accordance with the provisions of SECTION
2.2(g).
ARTICLE 11
DEFAULT AND REMEDIES
Section 11.1 EVENTS OF DEFAULT. It shall constitute an event of default
("EVENT OF DEFAULT") if any one or more of the following shall occur for any
reason:
(a) any failure by the Borrowers to pay the principal of or
interest or premium on any of the Obligations or any fee or other amount
owing hereunder when due, whether upon demand or otherwise;
(b) any representation or warranty made or deemed made by the
Borrowers in this Agreement or in any of the other Loan Documents, any
Financial Statement, or any certificate furnished by the Borrowers at any
time to the Agent or any Lender shall prove to be untrue in any material
respect as of the date on which made, deemed made, or furnished;
(c) any default shall occur in
(i) the observance or performance of any of the covenants and
agreements contained in SECTION 9.2 (insofar as it requires the
preservation of the existence of the Borrowers) or SECTION 9.9
through SECTION 9.39, or
(ii) the observance or performance of any of the covenants and
agreements contained in ARTICLE 6 or ARTICLE 7, and such
default shall continue for a period of three (3) Business Days
after written notice thereof has been given to the Parent by
the Agent,
(iii) the observance or performance of any of the covenants and
agreements contained in this Agreement, other than as
referenced in SECTION 11.1(a), SECTION 11.1(b), SECTION
11.1(c)(i), and SECTION 11.1(c)(ii) or any other Loan
Documents, or any other agreement entered into at any time to
which the Borrowers and the Agent or any Lender are party
(including in respect of any Bank Products) and such default
shall continue for a period of twenty (20) days after written
notice thereof has been given to the Parent by the Agent, or if
any such agreement or document shall terminate
POST-PETITION LOAN AGREEMENT - Page 96
(other than in accordance with its terms or the terms hereof or
with the written consent of the Agent and the Majority Lenders)
or become void or unenforceable, without the written consent of
the Agent and the Majority Lenders;
(d) the Bankruptcy Court shall enter an order with respect to any
of the Borrowers dismissing its Chapter 11 Case or converting it to a case
under Chapter 7 of the Bankruptcy Code, or, without the prior written
consent of the Agent, appointing a trustee in its Chapter 11 Case or
appointing a responsible officer or an examiner with powers that are
substantially the same as those of a trustee;
(e) the Bankruptcy Court shall enter an order granting relief from
the automatic stay applicable under Section 362 of the Bankruptcy Code to
the holder or holders of any Lien(s) in any assets of any of the Borrowers
having, collectively, an aggregate value in excess of $1,000,000;
(f) any Borrower shall apply for authority to amend, supplement,
stay, vacate or otherwise modify any of the Financing Orders without the
consent of the Required Lenders and the Agent, and the Agent has sent
notice of such default to Borrowers;
(g) any Borrower shall support (in any such case by way of any
motion or other pleading filed with the Bankruptcy Court or any other
writing to another party-in-interest executed by or on behalf of any
Borrower) any other Person's opposition of, any motion made in the
Bankruptcy Court by any Lender seeking confirmation of the amount of such
Lender's claim or the validity and enforceability of the Liens in favor of
such Lender (including, without limitation, the Liens securing Pre-Petition
Indebtedness owed to such Lender); PROVIDED HOWEVER, the Borrowers shall
have the right to take a position with respect to any Lien dispute between
the Pre-Petition Lenders and/or Post-Petition Lenders and any other
creditors, including materials suppliers, capital lessors, purchase money
financiers, or vendors, but not including the official committee of
unsecured creditors, the United States Trustee, or any Chapter 7 or Chapter
11 Trustee appointed in the Bankruptcy Cases, who may claim an interest in
specific property;
(h) any Borrower shall seek to, or shall support (in any such case
by way of any motion or other pleading filed with the Bankruptcy Court or
any other writing to another party-in-interest executed by or on behalf of
any Borrowers) any other Person's motion to, disallow in whole or in part
any Lender's claim in respect of the Pre-Petition Indebtedness or the
Obligations or to challenge the validity, perfection and enforceability of
the Liens in favor of the Pre-Petition Agent or any Lender (including,
without limitation, the Liens securing Pre-Petition Indebtedness owed to
such Lender); PROVIDED HOWEVER, the Borrowers shall have the right to take
a position with respect to any Lien dispute between the Pre-Petition
Lenders and/or Post-Petition Lenders and any other creditors, including
materials suppliers, capital lessors, purchase money financiers, or
vendors, but not including the official committee of unsecured creditors,
the United States Trustee, or any Chapter 7 or Chapter 11 Trustee appointed
in the Bankruptcy Cases, who may claim an interest in specific property;
POST-PETITION LOAN AGREEMENT - Page 97
(i) from and after the date of entry thereof, the Interim Order
shall cease to be in full force and effect (or shall have been vacated,
stayed, reversed, modified or amended), in each case without the consent of
all of the Lenders and the Agent, and the Final Order shall not have been
entered prior to such cessation (or vacatur, stay, reversal, modification
or amendment);
(j) the Final Order shall not have been entered by the Bankruptcy
Court on or before January 23, 2002
(k) from and after the date of entry thereof, the Final Order shall
cease to be in full force and effect or shall have been vacated, stayed,
reversed, modified or amended, in each case without the consent of all of
the Lenders and the Agent;
(l) any of the Borrowers or any Subsidiary thereof shall make any
payments on any Indebtedness of such Borrower or Subsidiary (other than as
permitted under the Financing Orders or permitted hereunder) arising before
the Filing Date, except as expressly allowed by order of the Bankruptcy
Court;
(m) any of the Borrowers shall fail to comply with the terms of the
Financing Orders in any material respect;
(n) one or more judgments or decrees shall be entered against (i)
any of the Borrowers involving in the aggregate a post-Filing Date
liability (not paid or fully covered by insurance, and not disputed by the
insurer) of $5,000,000 or more or (ii) any Subsidiary of any of the
Borrowers which would have a Material Adverse Effect, and all such
judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within the time required by the terms of such
judgment;
(o) any DIP Financing Document shall cease, for any reason, to be
in full force and effect or any of the Borrowers or any of their
Subsidiaries shall so assert in writing, or any DIP Financing Document
shall cease to be effective to grant a perfected Lien on any material item
of collateral described therein with the priority purported to be created
thereby;
(p) any Borrower shall file a certificate of dissolution under
applicable state law or shall be liquidated, dissolved, or wound-up (except
in a transaction allowed under SECTION 9.9) or shall commence or have
commenced against it any action or proceeding for dissolution, winding-up,
or liquidation, or shall take any corporate action in furtherance thereof;
(q) all or any material part of the property of any Borrower shall
be nationalized, expropriated, or condemned, seized, or otherwise
appropriated, or custody or control of such property or of any Borrower
shall be assumed by any Governmental Authority or any court of competent
jurisdiction at the instance of any Governmental Authority, except where
contested in good faith by proper proceedings diligently pursued where a
stay of enforcement is in effect;
POST-PETITION LOAN AGREEMENT - Page 98
(r) any Guaranty of the Obligations shall be terminated, revoked,
or declared void or invalid;
(s) any loss, theft, damage, or destruction of any item or items of
Collateral or other property of any Borrower occurs which reasonably could
be expected to cause a Material Adverse Effect and is not adequately
covered by insurance;
(t) there occurs a Material Adverse Effect;
(u) there is filed against any Borrower any action, suit, or
proceeding under any federal or state racketeering statute (including the
Racketeer Influenced and Corrupt Organization Act of 1970), which action,
suit or proceeding (i) is not dismissed within one hundred twenty (120)
days, and (ii) could reasonably be expected to result in the confiscation
or forfeiture of any material portion of the Collateral;
(v) for any reason other than the failure of the Agent to take any
action available to it to maintain perfection of the Agent's Liens,
pursuant to the Loan Documents, any Loan Document ceases to be in full
force and effect or any Lien with respect to any material portion of the
Collateral intended to be secured thereby ceases to be, or is not, valid,
perfected, and prior to all other Liens (other than Permitted Liens which
are expressly permitted to have priority over the Agent's Liens) or is
terminated, revoked, or declared void;
(w) (i) an ERISA Event shall occur with respect to a Pension Plan
or Multi-employer Plan which has resulted or could reasonably be expected
to result in liability of any Borrower under Title IV of ERISA to the
Pension Plan, Multi-employer Plan, or the PBGC in an aggregate amount in
excess of $1,000,000; (ii) the aggregate amount of Unfunded Pension
Liability among all Pension Plans at any time exceeds $1,000,000; or (iii)
any Borrower or any ERISA Affiliate shall fail to pay when due, after the
expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multi-employer Plan in an aggregate amount in excess of $1,000,000; or
(x) there occurs a Change of Control.
Section 11.2 REMEDIES.
(a) Notwithstanding any cure periods provided for in this
Agreement, if a Default or an Event of Default exists and unless such Event
of Default has been waived in accordance with the provisions of
SECTION 13.2, the Agent may, in its discretion, and shall, at the direction
of the Majority Lenders, do one or more of the following at any time or
times and in any order, without notice to or demand on any Borrower: (i)
reduce the Maximum Revolver Amount, or the advance rates against Eligible
Accounts and/or Eligible Inventory used in computing the Borrowing Base, or
reduce or increase one or more of the other elements used in computing the
Borrowing Base; (ii) restrict the amount of or refuse to make Revolving
Loans; and (iii) restrict or refuse to provide Letters of Credit or Credit
Support. Notwithstanding any cure periods provided for in
POST-PETITION LOAN AGREEMENT - Page 99
this Agreement, if an Event of Default exists and unless such Event of
Default has been waived in accordance with the provisions of SECTION 13.2,
the Agent shall, do one or more of the following, in addition to the
actions described in the preceding sentence, at any time or times and in
any order, without notice to or demand on any Borrower: (A) terminate the
Commitments and this Agreement; (B) declare any or all Obligations to be
immediately due and payable; PROVIDED, HOWEVER, that upon the occurrence of
any Event of Default described in SECTION 11.1(e), Section 11.1(f),
SECTION 11.1(g), or SECTION 11.1(h), the Commitments shall automatically
and immediately expire and all Obligations shall automatically become
immediately due and payable without notice or demand of any kind; and (C)
pursue its other rights and remedies under the Loan Documents and
applicable law.
(b) If an Event of Default has occurred and is continuing: (i) the
Agent shall have for the benefit of the Lenders, in addition to all other
rights of the Agent and the Lenders, the rights and remedies of a secured
party under the UCC; (ii) the Agent may, at any time, take possession of
the Collateral and keep it on any Borrower's premises, at no cost to the
Agent or any Lender, or remove any part of it to such other place or places
as the Agent may desire, or any Borrower shall, upon the Agent's demand, at
such Borrower's cost, assemble the Collateral and make it available to the
Agent at a place reasonably convenient to the Agent; and (iii) the Agent
may sell and deliver any Collateral at public or private sales, for cash,
upon credit, or otherwise, at such prices and upon such terms as the Agent
deems advisable, in its sole discretion, and may, if the Agent deems it
reasonable, postpone or adjourn any sale of the Collateral by an
announcement at the time and place of sale or of such postponed or
adjourned sale without giving a new notice of sale. Without in any way
requiring notice to be given in the following manner, each Borrower agrees
that any notice by the Agent of sale, disposition, or other intended action
hereunder or in connection herewith, whether required by the UCC or
otherwise, shall constitute reasonable notice to the Borrowers if such
notice is mailed by registered or certified mail, return receipt requested,
postage prepaid, or is delivered personally against receipt, at least five
(5) days prior to such action to the Borrowers' address specified in or
pursuant to SECTION 15.8. If any Collateral is sold on terms other than
payment in full at the time of sale, no credit shall be given against the
Obligations until the Agent or the Lenders receive payment, and if the
buyer defaults in payment, the Agent may resell the Collateral without
further notice to any Borrower. In the event the Agent seeks to take
possession of all or any portion of the Collateral by judicial process,
each Borrower irrevocably waives: (A) the posting of any bond, surety, or
security with respect thereto which might otherwise be required; (B) any
demand for possession prior to the commencement of any suit or action to
recover the Collateral; and (C) any requirement that the Agent retain
possession and not dispose of any Collateral until after trial or final
judgment. Each Borrower agrees that the Agent has no obligation to preserve
rights to the Collateral or marshal any Collateral for the benefit of any
Person. The Agent is hereby granted a license or other right to use,
without charge, each Borrower's labels, patents, copyrights, name, trade
secrets, trade names, trademarks, and advertising matter, or any similar
property, in completing production of, advertising or selling any
Collateral, and each Borrower's rights under all licenses and all franchise
agreements shall inure to the Agent's benefit for such purpose. The
proceeds of
POST-PETITION LOAN AGREEMENT - Page 100
sale shall be applied first to all expenses of sale, including attorneys'
fees, and then to the Obligations. The Agent will return any excess to the
Borrowers, and the Borrowers shall remain liable for any deficiency.
(c) Notwithstanding any cure periods provided for in this
Agreement, if an Event of Default occurs and is continuing, each Borrower
hereby waives all rights to notice and hearing prior to the exercise by the
Agent of the Agent's rights to repossess the Collateral without judicial
process or to replevy, attach, or levy upon the Collateral without notice
or hearing.
(d) Each Borrower recognizes that the Agent may be unable to effect
a public sale of any or all of the Collateral or other property to be sold
by reason of certain prohibitions contained in the laws of any jurisdiction
outside the United States or in applicable federal or state securities laws
but may be compelled to resort to one or more private sales thereof to a
restricted group of purchasers who will be obliged to agree, among other
things, to acquire such Collateral or other property to be sold for their
own account for investment and not with a view to the distribution or
resale thereof. Each Borrower acknowledges and agrees that any such private
sale may result in prices and other terms less favorable to the seller than
if such sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall, to the extent permitted by law, be
deemed to have been made in a commercially reasonable manner. Unless
required by a Requirement of Law, the Agent shall not be under any
obligation to delay a sale of any of the Collateral or other property to be
sold for the period of time necessary to permit the issuer of such
securities to register such securities under the laws of any jurisdiction
outside the United States under any applicable federal or state securities
laws, even if such issuer would agree to do so. Each Borrower further
agrees to do or cause to be done, to the extent that such Borrower may do
so under Requirements of Law, all such other acts and things as may be
necessary to make such sales or resales of any portion or all of the
Collateral or other property to be sold valid and binding and in compliance
with any and all Requirements of Law at the Borrowers' expense. Each
Borrower further agrees that a breach of any of the covenants contained in
this SECTION 11.2(d) will cause irreparable injury to the Agent and the
Lenders for which there is no adequate remedy at law and, as a consequence,
agrees that each covenant contained in this SECTION 11.2(d) shall be
specifically enforceable against such Borrower and such Borrower hereby
waives and agrees, to the fullest extent permitted by law, not to assert as
a defense against an action for specific performance of such covenants that
(i) such Borrower's failure to perform such covenants will not cause
irreparable injury to the Agent and the Lenders or (ii) the Agent or the
Lenders have an adequate remedy at law in respect of such breach. Each
Borrower further acknowledges the impossibility of ascertaining the amount
of damages which would be suffered by the Agent and the Lenders by reason
of a breach of any of the covenants contained in this SECTION 11.2(d) and,
consequently, agrees that, if such Borrower shall breach any of such
covenants and the Agent or the Lenders shall ▇▇▇ for damages for such
breach, such Borrower shall pay to the Agent, for the benefit of the Agent
and the Lenders, as liquidated damages and not as a penalty, an aggregate
amount equal to the value of the Collateral or other property to be sold on
the date the Agent shall demand compliance with this SECTION 11.2(d).
POST-PETITION LOAN AGREEMENT - Page 101
ARTICLE 12
TERM AND TERMINATION
Section 12.1 TERM AND TERMINATION. The term of this Agreement shall end on
the Stated Termination Date unless terminated or extended as provided in
SECTION 2.5 of this Agreement. The Agent upon direction from the Majority
Lenders may terminate this Agreement without notice to the Borrowers during the
existence of an Event of Default. Upon the effective date of termination of this
Agreement for any reason whatsoever, all Obligations (including all unpaid
principal, accrued and unpaid interest, and any early termination or prepayment
fees but excluding indemnification obligations to the extent no claim with
respect thereto has been asserted and remains unsatisfied) shall become
immediately due and payable and the Borrowers shall immediately arrange for the
cancellation and return of all Letters of Credit and Credit Support then
outstanding. Notwithstanding the termination of this Agreement, until all
Obligations are indefeasibly paid and performed in full in cash, the Borrowers
shall remain bound by the terms of this Agreement and shall not be relieved of
any of their Obligations hereunder or under any other Loan Document, and the
Agent and the Lenders shall retain all their rights and remedies hereunder
(including, without limitation, the Agent's Liens in and all rights and remedies
with respect to all then existing and after-arising Collateral).
ARTICLE 13
AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
Section 13.1 NO WAIVERS; CUMULATIVE REMEDIES. No failure by the Agent or
any Lender to exercise any right, remedy, or option under this Agreement or any
present or future supplement hereto, or in any other agreement between or among
any Borrower and the Agent and/or any Lender, or delay by the Agent or any
Lender in exercising the same, will operate as a waiver thereof. Subject to
SECTION 13.2, no waiver by the Agent or any Lender will be effective unless it
is in writing, and then only to the extent specifically stated. No waiver by the
Agent or the Lenders on any occasion shall affect or diminish the Agent's and
each Lender's rights thereafter to require strict performance by the Borrowers
of any provision of this Agreement. The Agent's and each Lender's rights under
this Agreement will be cumulative and not exclusive of any other right or remedy
which the Agent or any Lender may have.
Section 13.2 AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by any Borrower therefrom, shall be effective unless
the same shall be in writing and signed by the Majority Lenders (or by the Agent
at the written request of the Majority Lenders) and the Borrowers and then any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; PROVIDED, HOWEVER, that (i) (A) a waiver
of any Event of Default (or any modification of any covenant contained in this
Agreement), or (B) any consent to a release of Collateral whenever (as to
Dispositions of Accounts or Inventory) the aggregate proceeds to be received by
the Lenders is less than the aggregate amount eligible for advance against such
Accounts and Inventory under the Borrowing Base, or (as to Dispositions of
Equipment or Real Estate) the aggregate proceeds to be received by the Lenders
is less than
POST-PETITION LOAN AGREEMENT - Page 102
the aggregate Loan Value of Equipment or Loan Value of Real Estate, as the case
may be, shall require the affirmative approval of the Lenders whose Pro Rata
Shares, on the date of determination, aggregate at least fifty eight percent
(58.0%) as such percentage is determined according to the definition of Pro Rata
Share, and (ii) no such waiver, amendment, or consent shall, unless in writing
and signed by all the Lenders and the Borrowers and acknowledged by the Agent,
do any of the following:
(a) increase or extend the Commitment of any Lender;
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees, or other
amounts due to the Lenders (or any of them) hereunder or under any other
Loan Document;
(c) reduce the principal of, or the rate of interest specified
herein on any Revolving Loan, or any fees or other amounts payable
hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Revolving Loans which is required for the
Lenders or any of them to take any action hereunder;
(e) increase any of the percentages set forth in the definition of
the Borrowing Base;
(f) amend this Section or any provision of the Agreement providing
for consent or other action by all Lenders;
(g) change the definition of "Majority Lenders"; or
(h) increase the Maximum Revolver Amount, or increase the Unused
Letter of Credit Sublimit above $35,000,000, it being understood that an
increase of the Letter of Credit Sublimit up to $35,000,000 requires the
consent of only the Majority Lenders.
PROVIDED, HOWEVER, the Agent may, in its sole discretion and notwithstanding the
limitations contained in CLAUSE (e) and CLAUSE (h) preceding and any other terms
of this Agreement, make Revolving Loans (including Agent Advances) in an amount
not to exceed $5,000,000 (including Agent Advances made when an Event of Default
has occurred) in the aggregate, PROVIDED FURTHER, that no amendment, waiver, or
consent shall, unless in writing and signed by the Agent, affect the rights or
duties of the Agent under this Agreement or any other Loan Document.
Section 13.3 ASSIGNMENTS; PARTICIPATIONS.
(a) Any Lender may assign and delegate to one or more Eligible
Assignees (each an "ASSIGNEE") all, or any ratable part of all, of the
Revolving Loans, the Commitments, and the other rights and obligations of
such Lender hereunder (any such assignment and delegation being referred to
herein as an "ASSIGNMENT"), in a minimum amount of $7,777,777.78 (PROVIDED
that, unless an assignor Lender has assigned and
POST-PETITION LOAN AGREEMENT - Page 103
delegated all of its Revolving Loans and Commitments, no such assignment
and/or delegation shall be permitted unless, after giving effect thereto,
such assignor Lender retains a Commitment in a minimum amount of
$7,777,777.78); PROVIDED, HOWEVER, that the Borrowers and the Agent may
continue to deal solely and directly with such Lender in connection with
the interest so assigned to an Assignee until (i) written notice of such
assignment, together with payment instructions, addresses, and related
information with respect to the Assignee, shall have been given to the
Borrowers and the Agent by such Lender and the Assignee; (ii) such Lender
and its Assignee shall have delivered to the Borrowers and the Agent an
Assignment and Acceptance in the form of EXHIBIT E ("ASSIGNMENT AND
ACCEPTANCE") together with any Note or Notes subject to such assignment,
and (iii) the assignor Lender or Assignee has paid to the Agent a
processing fee in the amount of $5,000.
(b) From and after the date that the Agent notifies the assignor
Lender that it has received an executed Assignment and Acceptance and
payment of the above-referenced processing fee, (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations,
including, but not limited to, the obligation to participate in Letters of
Credit and Credit Support have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assignor Lender shall, to the
extent that rights and obligations hereunder and under the other Loan
Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations
under this Agreement (and in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party
hereto).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Lender
makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties, or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency, or value of this Agreement or any
other Loan Document furnished pursuant hereto or the attachment,
perfection, or priority of any Lien granted by the Borrowers to the Agent
or any Lender in the Collateral; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to
the financial condition of the Borrowers or the performance or observance
by any Borrower of any of its obligations under this Agreement or any other
Loan Document furnished pursuant hereto; (iii) such Assignee confirms that
it has received a copy of this Agreement, together with such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such Assignee will, independently and without reliance upon the Agent,
such assigning Lender, or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement;
(v) such Assignee appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such
POST-PETITION LOAN AGREEMENT - Page 104
powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers, including the discretionary rights and
incidental power, as are reasonably incidental thereto; and (vi) such
Assignee agrees that it will perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
(d) Immediately upon satisfaction of the requirements of
SECTION 13.3(a), this Agreement shall be deemed to be amended to the
extent, but only to the extent, necessary to reflect the addition of the
Assignee and the resulting adjustment of the Commitments arising therefrom.
The Commitment allocated to each Assignee shall reduce such Commitments of
the assigning Lender PRO TANTO.
(e) Any Lender may at any time sell to one or more Participants
participating interests in any Revolving Loans, the Commitment of that
Lender, and the other interests of that Lender (the "ORIGINATING LENDER")
hereunder and under the other Loan Documents; PROVIDED, HOWEVER, that (i)
the originating Lender's obligations under this Agreement shall remain
unchanged, (ii) the originating Lender shall remain solely responsible for
the performance of such obligations, (iii) the Borrowers and the Agent
shall continue to deal solely and directly with the originating Lender in
connection with the originating Lender's rights and obligations under this
Agreement and the other Loan Documents, and (iv) no Lender shall transfer
or grant any participating interest under which the Participant has rights
to approve any amendment to, or any consent or waiver with respect to, this
Agreement or any other Loan Document, and (v) all amounts payable by the
Borrowers hereunder shall be determined as if such Lender had not sold such
participation; except that, if amounts outstanding under this Agreement are
due and unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall
be deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement to the same extent and
subject to the same limitation as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement.
(f) Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the Federal Reserve
Board or U.S. Treasury Regulation 31 CFR Section 203.14, and such Federal
Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
ARTICLE 14
THE AGENT
Section 14.1 APPOINTMENT AND AUTHORIZATION. Each Lender hereby designates
and appoints the Bank (acting in its capacity as the Agent) as its agent under
this Agreement and the other Loan Documents and each Lender hereby irrevocably
authorizes the Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and
POST-PETITION LOAN AGREEMENT - Page 105
to exercise such powers and perform such duties as are expressly delegated to it
by the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. The Agent agrees to act as such on
the express conditions contained in this ARTICLE 14. The provisions of this
ARTICLE 14 are solely for the benefit of the Agent and the Lenders and the
Borrowers shall have no rights as a third party beneficiary of any of the
provisions contained herein other than as expressly provided in SECTION 14.10
and SECTION 14.12. Notwithstanding any provision to the contrary contained
elsewhere in this Agreement or in any other Loan Document, the Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
nor shall the Agent have or be deemed to have any fiduciary relationship with
any Lender, and no implied covenants, functions, responsibilities, duties,
obligations, or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent. Without limiting the generality
of the foregoing sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties. Except as expressly otherwise provided in this Agreement,
the Agent shall have and may use its sole discretion with respect to exercising
or refraining from exercising any discretionary rights or taking or refraining
from taking any actions which the Agent is expressly entitled to take or assert
under this Agreement and the other Loan Documents, including (a) the
determination of the applicability of ineligibility criteria with respect to the
calculation of the Borrowing Base, (b) the making of Agent Advances pursuant to
SECTION 2.2(g), and (c) the exercise of remedies pursuant to SECTION 11.2, and
any action so taken or not taken shall be deemed consented to by the Lenders.
Section 14.2 DELEGATION OF DUTIES. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees,
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent, employee, or attorney-in-fact that it
selects as long as such selection was made without gross negligence or willful
misconduct.
Section 14.3 LIABILITY OF THE AGENT. None of the Agent-Related Persons
shall (a) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (b) be responsible in any manner to any of the Lenders for any
recital, statement, representation, or warranty made by any Borrower or
Affiliate of any Borrower, or any officer thereof, contained in this Agreement
or in any other Loan Document, or in any certificate, report, statement, or
other document referred to or provided for in, or received by the Agent under or
in connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability, or sufficiency of this Agreement or
any other Loan Document, or for any failure of any Borrower or any other party
to any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any
POST-PETITION LOAN AGREEMENT - Page 106
other Loan Document, or to inspect the properties, books, or records of any
Borrower or any Borrower's Affiliates.
Section 14.4 RELIANCE BY THE AGENT.
(a) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex, or telephone
message, statement, or other document or conversation believed by it to be
genuine and correct and to have been signed, sent, or made by the proper
Person or Persons, and upon advice and statements of legal counsel
(including, without limitation, counsel to any Borrower), independent
accountants and other experts selected by the Agent. The Agent shall be
fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Majority Lenders as it deems appropriate and,
if it so requests, it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The Agent
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with
a request or consent of the Majority Lenders (or all Lenders if so required
by SECTION 13.2) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in SECTION 10.1, each Lender that has executed this Agreement
shall be deemed to have consented to, approved, or accepted or to be
satisfied with, each document or other matter either sent by the Agent to
such Lender for consent, approval, acceptance, or satisfaction, or required
thereunder to be consented to or approved by or acceptable or satisfactory
to the Lender.
Section 14.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, unless
the Agent shall have received written notice from a Lender or a Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." The Agent will notify the
Lenders of its receipt of any such notice. The Agent shall take such action with
respect to such Default or Event of Default as may be requested by the Majority
Lenders in accordance with ARTICLE 11; PROVIDED, HOWEVER, that unless and until
the Agent has received any such request, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable.
Section 14.6 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Borrowers and their Affiliates, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations,
POST-PETITION LOAN AGREEMENT - Page 107
property, financial and other condition, and creditworthiness of the Borrowers
and their Affiliates, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Borrowers. Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals, and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition, and
creditworthiness of the Borrowers. Except for notices, reports, and other
documents expressly herein required to be furnished to the Lenders by the Agent,
the Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, prospects, operations,
property, financial and other condition, or creditworthiness of any Borrower
which may come into the possession of any of the Agent-Related Persons.
Section 14.7 INDEMNIFICATION. WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED
HEREBY ARE CONSUMMATED, THE LENDERS SHALL INDEMNIFY UPON DEMAND THE
AGENT-RELATED PERSONS (TO THE EXTENT NOT REIMBURSED BY OR ON BEHALF OF THE
BORROWERS AND WITHOUT LIMITING THE OBLIGATION OF THE BORROWERS TO DO SO), PRO
RATA, FROM AND AGAINST ANY AND ALL INDEMNIFIED LIABILITIES AS SUCH TERM IS
DEFINED IN SECTION 15.11; PROVIDED, HOWEVER, THAT NO LENDER SHALL BE LIABLE FOR
THE PAYMENT TO THE AGENT-RELATED PERSONS OF ANY PORTION OF SUCH INDEMNIFIED
LIABILITIES RESULTING SOLELY FROM SUCH PERSON'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. Without limitation of the foregoing, each Lender shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment, or
enforcement (whether through negotiations, legal proceedings, or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Borrowers. The undertaking in this Section shall survive the payment of
all Obligations hereunder and the resignation or replacement of the Agent.
Section 14.8 THE AGENT IN INDIVIDUAL CAPACITY.
(a) The Bank and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests
in and generally engage in any kind of banking, trust, financial advisory,
underwriting, or other business with any Borrower and its Affiliates as
though the Bank were not the Agent hereunder and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, the Bank or its Affiliates may receive information regarding
any Borrower or its Affiliates (including information that may be subject
to confidentiality obligations in favor of any such Borrower or such
Affiliate) and acknowledge that the Agent and the Bank shall be under no
obligation to provide such information to the Lenders. With respect to its
Revolving Loans, the Bank shall have the same rights and powers under this
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Agreement as any other Lender and may exercise the same as though it were
not the Agent, and the terms "Lender" and "Lenders" include the Bank in its
individual capacity.
(b) Each of the Lenders acknowledges and agrees that the Bank acts,
and/or may in the future act, as administrative agent under the MRC Loan
Agreement. Each Lender hereby acknowledges and consents to the Bank acting
in such capacity and agrees that in connection with acting in such capacity
the Bank may take or refrain from taking any action, and each of the
Lenders hereby holds the Bank harmless in connection with taking or
refraining from taking any such action, which the Bank in its sole
discretion deems appropriate in the circumstances, subject to the terms of
the MRC Loan Agreement.
Section 14.9 SUCCESSOR AGENT. The Agent may resign as Agent upon thirty
(30) days notice to the Lenders and the Borrowers, such resignation to be
effective upon the acceptance of a successor agent to its appointment as Agent.
In the event the Bank sells all of its Commitment and Revolving Loans as part of
a sale, transfer, or other disposition by the Bank of substantially all of its
loan portfolio, the Bank shall resign as Agent and such purchaser or transferee
shall become the successor Agent hereunder. If the Agent resigns under this
Agreement, subject to the proviso in the preceding sentence, the Majority
Lenders shall appoint from among the Lenders a successor agent for the Lenders.
If no successor agent is appointed prior to the effective date of the
resignation of the Agent, the Agent may appoint, after consulting with the
Lenders and the Borrowers, a successor agent from among the Lenders. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers, and duties of the retiring Agent and
the term "Agent" shall mean such successor agent, and the retiring Agent's
appointment, powers, and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this ARTICLE 14 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.
Section 14.10 WITHHOLDING TAX.
(a) If any Lender is a "foreign corporation, partnership, or trust"
within the meaning of the Code and such Lender claims exemption from, or a
reduction of, United States withholding tax under Sections 1441 or 1442 of
the Code, such Lender agrees with and in favor of the Agent, to deliver to
the Agent and the Parent:
(i) if such Lender claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly
completed IRS Forms 1001 and W-8 before the payment of any
interest in the first calendar year and before the payment of
any interest in each third succeeding calendar year during
which interest may be paid under this Agreement;
(ii) if such Lender claims that interest paid under this Agreement
is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of
such Lender, two properly completed and executed copies of IRS
Form 4224 before the payment of any interest is due in the
first taxable year of such Lender and in each
POST-PETITION LOAN AGREEMENT - Page 109
succeeding taxable year of such Lender during which interest
may be paid under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the Code or
other laws of the United States as a condition to exemption
from, or reduction of, United States withholding tax.
Such Lender agrees to promptly notify the Agent and the Parent of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001
and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations owing to such Lender, such Lender
agrees to notify the Agent and the Parent of the percentage amount in which
it is no longer the beneficial owner of Obligations owing to such Lender.
To the extent of such percentage amount, the Agent and the Parent will
treat such Lender's IRS Form 1001 as no longer valid.
(c) If any Lender claiming exemption from United States withholding
tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations
owing to such Lender, such Lender agrees to undertake sole responsibility
for complying with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent or any Borrower may withhold from any interest
payment to such Lender an amount equivalent to the applicable withholding
tax after taking into account such reduction. If the forms or other
documentation required by CLAUSE (A) of this Section are not delivered to
the Agent and the Parent, then the Agent or any Borrower may withhold from
any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent or any Borrower
did not properly withhold tax from amounts paid to or for the account of
any Lender (because the appropriate form was not delivered, was not
properly executed, or because such Lender failed to notify the Agent or any
Borrower of a change in circumstances which rendered the exemption from, or
reduction of, withholding tax ineffective, or for any other reason) such
Lender shall indemnify the Agent and the Borrowers fully for all amounts
paid, directly or indirectly, by the Agent or any Borrower as tax or
otherwise, including penalties and interest, and including any taxes
imposed by any jurisdiction on the amounts payable to the Agent under this
SECTION 14.10, together with all costs and expenses (including Attorney
Costs). The obligation of the Lenders under this SECTION 14.10(e) shall
survive the payment of all Obligations and the resignation or replacement
of the Agent.
POST-PETITION LOAN AGREEMENT - Page 110
Section 14.11 CO-AGENTS. None of the Lenders identified on the facing page
or signature pages of this Agreement as a "co-agent" shall have any right,
power, obligation, liability, responsibility, or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of the Lenders so identified as a "co-agent" shall have or be deemed to
have any fiduciary relationship with any Lender. Each Lender acknowledges that
it has not relied, and will not rely, on any of the Lenders so identified in
deciding to enter into this Agreement or in taking or not taking action
hereunder.
Section 14.12 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize the Agent, at its
option and in its sole discretion, to release any Agent's Lien upon any
Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full of all Revolving Loans and reimbursement obligations
in respect of Letters of Credit and Credit Support, and the termination of
all outstanding Letters of Credit and Credit Support (whether or not any of
such obligations are due) and all other Obligations; (ii) constituting
property being sold or disposed of if the Borrower disposing of such
property certifies to the Agent that the sale or disposition is made in
compliance with SECTION 9.9 or SECTION 9.19 (and the Agent may rely
conclusively on any such certificate, without further inquiry); (iii)
constituting property in which no Borrower owned any interest at the time
the Lien was granted or at any time thereafter; or (iv) constituting
property leased to a Borrower under a lease which has expired or been
terminated in a transaction permitted under this Agreement. Except as
provided above, the Agent will not release any of the Agent's Liens without
the prior written authorization of the Lenders; PROVIDED that the Agent
may, in its discretion, release the Agent's Liens on Collateral valued in
the aggregate not in excess of $500,000 during any one (1) year period
without the prior written authorization of the Lenders. Upon request by the
Agent or the Borrowers at any time, the Lenders will confirm in writing the
Agent's authority to release any Agent's Liens upon particular types or
items of Collateral pursuant to this SECTION 14.12.
(b) Upon receipt by the Agent of any authorization required
pursuant to SECTION 14.12(a) from the Lenders of the Agent's authority to
release any Agent's Liens upon particular types or items of Collateral, and
upon at least five (5) Business Days prior written request by the
Borrowers, the Agent shall (and is hereby irrevocably authorized by the
Lenders to) execute such documents as may be necessary to evidence the
release of the Agent's Liens upon such Collateral; PROVIDED, HOWEVER, that
(i) the Agent shall not be required to execute any such document on terms
which, in the Agent's opinion, would expose the Agent to liability or
create any obligation or entail any consequence other than the release of
such Liens without recourse or warranty, and (ii) such release shall not in
any manner discharge, affect, or impair the Obligations or any Liens (other
than those expressly being released) upon (or obligations of the Borrowers
in respect of) all interests retained by the Borrowers, including the
proceeds of any sale, all of which shall continue to constitute part of the
Collateral.
(c) The Agent shall have no obligation whatsoever to any of the
Lenders to assure that the Collateral exists or is owned by any Borrower or
is cared for, protected, or
POST-PETITION LOAN AGREEMENT - Page 111
insured or has been encumbered, or that the Agent's Liens have been
properly or sufficiently or lawfully created, perfected, protected, or
enforced or are entitled to any particular priority, or to exercise at all
or in any particular manner or under any duty of care, disclosure, or
fidelity, or to continue exercising, any of the rights, authorities, and
powers granted or available to the Agent pursuant to any of the Loan
Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission, or event related thereto, the Agent may
act in any manner it may deem appropriate, in its sole discretion given the
Agent's own interest in the Collateral in its capacity as one of the
Lenders and that the Agent shall have no other duty or liability whatsoever
to any Lender as to any of the foregoing.
Section 14.13 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without the
express consent of the Agent, and that it shall, to the extent it is
lawfully entitled to do so, upon the request of all other Lenders, set-off
against the Obligations, any amounts owing by such Lender to any Borrower
or any accounts of any Borrower now or hereafter maintained with such
Lender. Each of the Lenders further agrees that it shall not, unless
specifically requested to do so by the Agent, take or cause to be taken any
action to enforce its rights under this Agreement or against any Borrower,
including the commencement of any legal or equitable proceedings, to
foreclose any Lien on, or otherwise enforce any security interest in, any
of the Collateral.
(b) If at any time or times any Lender shall receive (i) by
payment, foreclosure, set-off, or otherwise, any proceeds of Collateral or
any payments with respect to the Obligations owing to such Lender arising
under, or relating to, this Agreement or the other Loan Documents, except
for any such proceeds or payments received by such Lender from the Agent
pursuant to the terms of this Agreement, or (ii) payments from the Agent in
excess of such Lender's ratable portion of all such distributions by the
Agent, such Lender shall promptly (A) turn the same over to the Agent, in
kind, and with such endorsements as may be required to negotiate the same
to the Agent, or in same day funds, as applicable, for the account of all
of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (B) purchase, without
recourse or warranty, an undivided interest and participation in the
Obligations owed to the other Lenders so that such excess payment received
shall be applied ratably as among the Lenders in accordance with their Pro
Rata Shares; PROVIDED, HOWEVER, that if all or part of such excess payment
received by the purchasing party is thereafter recovered from it, those
purchases of participations shall be rescinded in whole or in part, as
applicable, and the applicable portion of the purchase price paid therefor
shall be returned to such purchasing party, but without interest except to
the extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
Section 14.14 AGENCY FOR PERFECTION. Each Lender hereby appoints each other
Lender as agent for the purpose of perfecting the Lenders' security interest in
assets which, in accordance with Article 9 of the UCC can be perfected only by
possession. Should any Lender (other than
POST-PETITION LOAN AGREEMENT - Page 112
the Agent) obtain possession of any such Collateral, such Lender shall notify
the Agent thereof, and, promptly upon the Agent's request therefor shall deliver
such Collateral to the Agent or otherwise deal with such Collateral in
accordance with the Agent's instructions.
Section 14.15 PAYMENTS BY THE AGENT TO THE LENDERS. All payments to be made
by the Agent to the Lenders shall be made by bank wire transfer or internal
transfer of immediately available funds to each Lender pursuant to wire transfer
instructions delivered in writing to the Agent on or prior to the Closing Date
(or if such Lender is an Assignee, in the applicable Assignment and Acceptance),
or pursuant to such other wire transfer instructions as each party may designate
for itself by written notice to the Agent. Concurrently with each such payment,
the Agent shall identify whether such payment (or any portion thereof)
represents principal, premium, or interest on the Revolving Loans or otherwise.
Section 14.16 CONCERNING THE COLLATERAL AND THE RELATED LOAN DOCUMENTS.
Each Lender authorizes and directs the Agent to enter into this Agreement and
the other Loan Documents for the benefit and obligation of the Agent and the
Lenders. Each Lender agrees that any action taken by the Agent or the Majority
Lenders, as applicable, in accordance with the terms of this Agreement or the
other Loan Documents, and the exercise by the Agent or the Majority Lenders, as
applicable, of their respective powers set forth therein or herein, together
with such other powers that are reasonably incidental thereto, shall be binding
upon all of the Lenders.
Section 14.17 FIELD AUDIT AND EXAMINATION REPORTS; DISCLAIMER BY LENDERS.
By signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish such Lender,
promptly after it becomes available, a copy of each field audit or
examination report (each a "REPORT" and collectively, "REPORTS") prepared
by the Agent;
(b) expressly agrees and acknowledges that neither the Bank nor the
Agent (i) makes any representation or warranty as to the accuracy of any
Report, or (ii) shall be liable for any information contained in any
Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agent, the Bank, or other
party performing any audit or examination will inspect only specific
information regarding the Borrowers and will rely significantly upon the
Borrowers' books and records, as well as on representations of the
Borrowers' personnel;
(d) agrees to keep all Reports confidential and strictly for its
internal use, and not to distribute except to its participants, or use any
Report in any other manner; and
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold the Agent and
any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may
reach or draw from any Report in connection with any loans or other credit
accommodations that the indemnifying Lender has made or may make to the
Borrowers, or the indemnifying Lender's participation in, or the
POST-PETITION LOAN AGREEMENT - Page 113
indemnifying Lender's purchase of, a loan or loans of the Borrowers; and
(ii) to pay and protect, and indemnify, defend, and hold the Agent and any
such other Lender preparing a Report harmless from and against, the claims,
actions, proceedings, damages, costs, expenses, and other amounts
(including Attorney Costs) incurred by the Agent and any such other Lender
preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying Lender.
Section 14.18 RELATION AMONG LENDERS. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Agent) authorized to act
for, any other Lender.
ARTICLE 15
MISCELLANEOUS
Section 15.1 CUMULATIVE REMEDIES; NO PRIOR RECOURSE TO COLLATERAL. The
enumeration herein of the Agent's and each Lender's rights and remedies is not
intended to be exclusive, and such rights and remedies are in addition to and
not by way of limitation of any other rights or remedies that the Agent and the
Lenders may have under the UCC or other applicable law. The Agent and the
Lenders shall have the right, in their sole discretion, to determine which
rights and remedies are to be exercised and in which order. The exercise of one
right or remedy shall not preclude the exercise of any others, all of which
shall be cumulative. The Agent and the Lenders may, without limitation, proceed
directly against any Person liable therefor to collect the Obligations without
any prior recourse to the Collateral. No failure to exercise and no delay in
exercising, on the part of the Agent or any Lender, any right, remedy, power, or
privilege hereunder, shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power, or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power, or privilege.
Section 15.2 SEVERABILITY. The illegality or unenforceability of any
provision of this Agreement, any Loan Document, or any instrument or agreement
required hereunder shall not in any way affect or impair the legality or
enforceability of the remaining provisions of this Agreement or any instrument
or agreement required hereunder.
Section 15.3 GOVERNING LAW; CHOICE OF FORUM.
(a) THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE
INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF LAWS PROVISIONS PROVIDED THAT
PERFECTION ISSUES WITH RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO
APPLICABLE CHOICE OR CONFLICT OF LAW RULES SET FORTH IN ARTICLE 9 OF THE
UCC) OF THE STATE OF TEXAS; PROVIDED THAT THE AGENT AND THE LENDERS SHALL
RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE
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▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ OR OF THE UNITED STATES FOR THE NORTHERN
DISTRICT OF TEXAS, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
THE BORROWERS, THE AGENT, AND THE LENDERS CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.
EACH OF THE BORROWERS, THE AGENT, AND THE LENDERS IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF
THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. NOTWITHSTANDING THE
FOREGOING (i) THE AGENT AND THE LENDERS SHALL HAVE THE RIGHT TO BRING ANY
ACTION OR PROCEEDING AGAINST ANY BORROWER OR ITS PROPERTY IN THE COURTS OF
ANY OTHER JURISDICTION THE AGENT OR THE LENDERS DEEM NECESSARY OR
APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE
OBLIGATIONS AND (ii) EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT ANY
APPEALS FROM THE COURTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE MAY
HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS.
Section 15.4 WAIVER OF JURY TRIAL. EACH OF THE BORROWERS, THE LENDERS, AND
THE AGENT IRREVOCABLY WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING, OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON,
PARTICIPANT, OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS,
OR OTHERWISE. EACH OF THE BORROWERS, THE LENDERS, AND THE AGENT AGREES THAT ANY
SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.
WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE
RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY
ACTION, COUNTERCLAIM, OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS, OR MODIFICATIONS TO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS.
Section 15.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of each Borrower contained in this Agreement
shall survive the execution, delivery, and acceptance thereof by the parties,
notwithstanding any investigation by the Agent or the Lenders or their
respective agents.
POST-PETITION LOAN AGREEMENT - Page 115
Section 15.6 OTHER SECURITY AND GUARANTIES. The Agent, may, without notice
or demand and without affecting the Borrowers' obligations hereunder, from time
to time: (a) take from any Person and hold collateral (other than the
Collateral) for the payment of all or any part of the Obligations and exchange,
enforce, or release such collateral or any part thereof; and (b) accept and hold
any endorsement or guaranty of payment of all or any part of the Obligations and
release or substitute any such endorser or guarantor, or any Person who has
given any Lien in any other collateral as security for the payment of all or any
part of the Obligations, or any other Person in any way obligated to pay all or
any part of the Obligations.
Section 15.7 FEES AND EXPENSES. Each Borrower agrees to pay to the Agent,
for its benefit, on demand, all costs and expenses that the Agent pays or incurs
in connection with the negotiation, preparation, syndication, consummation,
administration, enforcement, and termination of this Agreement or any of the
other Loan Documents to the extent permitted by the Bankruptcy Court, including:
(a) Attorney Costs; (b) costs and expenses (including attorneys' and paralegals'
fees and disbursements) for any amendment, supplement, waiver, consent, or
subsequent closing in connection with the Loan Documents and the transactions
contemplated thereby; (c) costs and expenses of lien and title searches and
title insurance; (d) taxes, fees, and other charges for recording the Mortgages,
filing financing statements and continuations, and other actions to perfect,
protect, and continue the Agent's Liens (including costs and expenses paid or
incurred by the Agent in connection with the consummation of this Agreement);
(e) sums paid or incurred to pay any amount or take any action required of any
Borrower under the Loan Documents that such Borrower fails to pay or take; (f)
costs of appraisals, inspections, and verifications of the Collateral, including
travel, lodging, and meals for inspections of the Collateral and the Borrowers'
operations by the Agent plus the Agent's then customary charge for field
examinations and audits and the preparation of reports thereof (such charge is
currently $650 per day (or portion thereof) for each agent or employee of the
Agent with respect to each field examination or audit); (g) costs and expenses
of forwarding loan proceeds, collecting checks, and other items of payment, and
establishing and maintaining Payment Accounts and lock boxes; (h) costs and
expenses of preserving and protecting the Collateral; and (i) costs and expenses
(including Attorney Costs) paid or incurred to obtain payment of the
Obligations, enforce the Agent's Liens, sell or otherwise realize upon the
Collateral, and otherwise enforce the provisions of the Loan Documents, or to
defend any claims made or threatened against the Agent or any Lender arising out
of the transactions contemplated hereby (including preparations for and
consultations concerning any such matters). The foregoing shall not be construed
to limit any other provisions of the Loan Documents regarding costs and expenses
to be paid by the Borrowers. All of the foregoing costs and expenses shall be
charged to the Loan Account as Revolving Loans as described in SECTION 4.5.
Each Borrower also agrees to pay, on demand, to PNC National Association
and Fleet Capital Corporation, all amounts which represent their portion of
Attorney Costs (within the definition of such term) if an invoice representing
the Attorney Costs have been delivered to the Parent and such payments are
permitted by the Bankruptcy Court.
Section 15.8 NOTICES. Except as otherwise provided herein, all notices,
demands, and requests that any party is required or elects to give to any other
shall be in writing, or by a telecommunications device capable of creating a
written record, and any such notice shall
POST-PETITION LOAN AGREEMENT - Page 116
become effective (a) upon personal delivery thereof, including, but not limited
to, delivery by overnight mail and courier service, (b) four (4) days after it
shall have been mailed by United States mail, first class, certified or
registered, with postage prepaid, or (c) in the case of notice by such a
telecommunications device, when properly transmitted, in each case addressed to
the party to be notified as follows:
IF TO THE AGENT OR TO THE BANK:
Bank of America, National Association
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Finance Business Credit/Manager: URGENT
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
WITH A COPY TO:
Bank of America, National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Finance Business Credit/
Regional Manager: URGENT
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
WITH A COPY TO:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
IF TO THE BORROWERS:
c/o Metals USA, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
WITH A COPY TO:
Bracewell & ▇▇▇▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
POST-PETITION LOAN AGREEMENT - Page 117
WITH A COPY TO:
Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
or to such other address as each party may designate for itself by like notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration, or other communication to the persons designated above to
receive copies shall not adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration, or other communication.
Section 15.9 WAIVER OF NOTICES. Unless otherwise expressly provided
herein, each Borrower waives presentment, notice of demand or dishonor, and
protest as to any instrument, notice of intent to accelerate the Obligations,
and notice of acceleration of the Obligations, as well as any and all other
notices to which it might otherwise be entitled. No notice to or demand on any
Borrower which the Agent or any Lender may elect to give shall entitle any
Borrower to any or further notice or demand in the same, similar, or other
circumstances.
Section 15.10 BINDING EFFECT. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective representatives,
successors, and assigns of the parties hereto; PROVIDED, HOWEVER, that no
interest herein may be assigned by any Borrower without the prior written
consent of the Agent and each Lender. The rights and benefits of the Agent and
the Lenders hereunder shall, if such Persons so agree, inure to any party
acquiring any interest in the Obligations or any part thereof.
Section 15.11 INDEMNITY OF THE AGENT AND THE LENDERS BY THE BORROWERS.
(a) EACH BORROWER AGREES TO DEFEND, INDEMNIFY, AND HOLD THE
AGENT-RELATED PERSONS AND EACH LENDER AND EACH OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, COUNSEL, AGENTS, AND ATTORNEYS-IN-FACT
(EACH, AN "INDEMNIFIED PERSON") HARMLESS FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, CHARGES, EXPENSES, AND DISBURSEMENTS (INCLUDING ATTORNEY
COSTS) OF ANY KIND OR NATURE WHATSOEVER WHICH MAY AT ANY TIME (INCLUDING AT
ANY TIME FOLLOWING REPAYMENT OF THE REVOLVING LOANS AND THE TERMINATION,
RESIGNATION, OR REPLACEMENT OF THE AGENT OR REPLACEMENT OF ANY LENDER) BE
IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANY SUCH PERSON IN ANY WAY
RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY DOCUMENT CONTEMPLATED
BY OR REFERRED TO HEREIN, OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR ANY
ACTION TAKEN OR OMITTED BY ANY SUCH PERSON UNDER OR IN CONNECTION WITH ANY
OF THE FOREGOING, INCLUDING WITH RESPECT TO ANY INVESTIGATION,
POST-PETITION LOAN AGREEMENT - Page 118
LITIGATION, OR PROCEEDING (INCLUDING ANY INSOLVENCY PROCEEDING OR APPELLATE
PROCEEDING) RELATED TO OR ARISING OUT OF THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT, OR THE REVOLVING LOANS OR THE USE OF THE PROCEEDS THEREOF,
WHETHER OR NOT ANY INDEMNIFIED PERSON IS A PARTY THERETO (ALL THE
FOREGOING, COLLECTIVELY, THE "INDEMNIFIED LIABILITIES"); PROVIDED THAT THE
BORROWERS SHALL HAVE NO OBLIGATION HEREUNDER TO ANY INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES RESULTING SOLELY FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PERSON. THE AGREEMENTS
IN THIS SECTION 15.11 SHALL SURVIVE PAYMENT OF ALL OTHER OBLIGATIONS.
(b) EACH BORROWER AGREES TO INDEMNIFY, DEFEND, AND HOLD HARMLESS
THE AGENT AND THE LENDERS FROM ANY LOSS OR LIABILITY DIRECTLY OR INDIRECTLY
ARISING OUT OF THE USE, GENERATION, MANUFACTURE, PRODUCTION, STORAGE,
RELEASE, THREATENED RELEASE, DISCHARGE, DISPOSAL, OR PRESENCE OF A
HAZARDOUS SUBSTANCE RELATING TO ANY BORROWER'S OPERATIONS, BUSINESS, OR
PROPERTY. THIS INDEMNITY WILL APPLY WHETHER THE HAZARDOUS SUBSTANCE IS ON,
UNDER, OR ABOUT ANY BORROWER'S PROPERTY OR OPERATIONS OR PROPERTY LEASED TO
ANY BORROWER. THE INDEMNITY INCLUDES BUT IS NOT LIMITED TO ATTORNEY COSTS.
THE INDEMNITY EXTENDS TO THE AGENT AND THE LENDERS, THEIR PARENTS,
AFFILIATES, SUBSIDIARIES, AND ALL OF THEIR DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, SUCCESSORS, ATTORNEYS, AND ASSIGNS. "HAZARDOUS SUBSTANCES" MEANS
ANY SUBSTANCE, MATERIAL, OR WASTE THAT IS OR BECOMES DESIGNATED OR
REGULATED AS "TOXIC," "HAZARDOUS," "POLLUTANT," OR "CONTAMINANT" OR A
SIMILAR DESIGNATION OR REGULATION UNDER ANY FEDERAL, STATE, OR LOCAL LAW
(WHETHER UNDER COMMON LAW, STATUTE, REGULATION, OR OTHERWISE) OR JUDICIAL
OR ADMINISTRATIVE INTERPRETATION OF SUCH, INCLUDING PETROLEUM OR NATURAL
GAS. THIS INDEMNITY WILL SURVIVE REPAYMENT OF ALL OTHER OBLIGATIONS.
Section 15.12 LIMITATION OF LIABILITY. NO CLAIM MAY BE MADE BY ANY
BORROWER, ANY LENDER, OR OTHER PERSON AGAINST THE AGENT, ANY LENDER, OR THE
AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, OR AGENTS OF ANY OF THEM FOR ANY
SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM
FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR
RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION THEREWITH, AND
EACH BORROWER AND EACH LENDER HEREBY WAIVES, RELEASES, AND AGREES NOT TO ▇▇▇
UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN
OR SUSPECTED TO EXIST IN ITS FAVOR.
POST-PETITION LOAN AGREEMENT - Page 119
Section 15.13 FINAL AGREEMENT. This Agreement and the other Loan Documents
are intended by the Borrowers, the Agent, and the Lenders to be the final,
complete, and exclusive expression of the agreement between them. This Agreement
and the other Loan Documents supersede any and all prior oral or written
agreements relating to the subject matter hereof and thereof. No modification,
rescission, waiver, release, or amendment of any provision of this Agreement or
any other Loan Document shall be made, except by a written agreement signed by
the Borrowers and a duly authorized officer of each of the Agent and the
requisite Lenders.
THIS WRITTEN LOAN AND SECURITY AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 15.14 COUNTERPARTS. This Agreement and the other Loan Documents may
be executed in any number of counterparts, and by the Agent, each Lender, and
the Borrowers in separate counterparts, each of which shall be an original, but
all of which shall together constitute one and the same agreement. Signature
pages may be detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are physically attached to the
same document, and a telecopy of any such executed signature page shall be valid
as an original.
Section 15.15 CAPTIONS. The captions contained in this Agreement and the
other Loan Documents are for convenience of reference only, are without
substantive meaning and should not be construed to modify, enlarge, or restrict
any provision.
Section 15.16 RIGHT OF SET-OFF. In addition to any rights and remedies of
the Lenders provided by law, if an Event of Default exists or the Revolving
Loans have been accelerated, each Lender is authorized at any time and from time
to time, without prior notice to the Borrowers, any such notice being waived by
the Borrowers to the fullest extent permitted by law, to set-off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held by, and other indebtedness at any time owing by, such Lender to or
for the credit or the account of any Borrower against any and all Obligations
owing to such Lender, now or hereafter existing, irrespective of whether or not
the Agent or such Lender shall have made demand under this Agreement or any Loan
Document and although such Obligations may be contingent or unmatured. Each
Lender agrees promptly to notify the Borrowers and the Agent after any such
set-off and application made by such Lender; PROVIDED, HOWEVER, that the failure
to give such notice shall not affect the validity of such set-off and
application. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE ANY RIGHT
OF SET-OFF, BANKER'S LIEN, OR THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY
OF ANY BORROWER HELD OR MAINTAINED BY SUCH LENDER WITHOUT THE PRIOR WRITTEN
CONSENT OF THE AGENT.
Section 15.17 JOINT AND SEVERAL LIABILITY. All Revolving Loans, upon
funding, shall be deemed to be jointly funded to and received by the Borrowers.
Each Borrower jointly and severally agrees to pay, and shall be jointly and
severally liable under this Agreement for, all
POST-PETITION LOAN AGREEMENT - Page 120
Obligations (excluding Existing Obligations in the case of a Newly Obligated
Party), regardless of the manner or amount in which proceeds of Revolving Loans
are used, allocated, shared, or disbursed by or among the Borrowers themselves,
or the manner in which the Agent and/or any Lender accounts for such Revolving
Loans or other extensions of credit on its books and records. Each Borrower
shall be liable for all amounts due to the Agent and/or any Lender under this
Agreement, regardless of which Borrower actually receives Revolving Loans or
other extensions of credit hereunder or the amount of such Revolving Loans and
extensions of credit received or the manner in which the Agent and/or such
Lender accounts for such Revolving Loans or other extensions of credit on its
books and records. Each Borrower's Obligations with respect to Revolving Loans
and other extensions of credit made to it, and such Borrower's Obligations
arising as a result of the joint and several liability of such Borrower
hereunder, with respect to Loans made to the other Borrowers hereunder, shall be
separate and distinct obligations, but all such Obligations shall be primary
obligations of such Borrower. The Borrowers acknowledge and expressly agree with
the Agent and each Lender that the joint and several liability of each Borrower
is required solely as a condition to, and is given solely as inducement for and
in consideration of, credit or accommodations extended or to be extended under
the Loan Documents to any or all of the other Borrowers and is not required or
given as a condition of extensions of credit to such Borrower. Each Borrower's
obligations under this Agreement and as an obligor under a Guaranty Agreement
shall be separate and distinct obligations. Each Borrower's obligations under
this Agreement shall, to the fullest extent permitted by law, be unconditional
irrespective of (i) the validity or enforceability, avoidance, or subordination
of the Obligations of any other Borrower or of any promissory note or other
document evidencing all or any part of the Obligations of any other Borrower,
(ii) the absence of any attempt to collect the Obligations from any other
Borrower, any Guarantor, or any other security therefor, or the absence of any
other action to enforce the same, (iii) the waiver, consent, extension,
forbearance, or granting of any indulgence by the Agent and/or any Lender with
respect to any provision of any instrument evidencing the Obligations of any
other Borrower or Guarantor, or any part thereof, or any other agreement now or
hereafter executed by any other Borrower or Guarantor and delivered to the Agent
and/or any Lender, (iv) the failure by the Agent and/or any Lender to take any
steps to perfect and maintain its security interest in, or to preserve its
rights to, any security or collateral for the Obligations of any other Borrower
or Guarantor, (v) the Agent's and/or any Lender's election, in any proceeding
instituted under the Bankruptcy Code, of the application of Section 1111(b)(2)
of the Bankruptcy Code, (vi) any borrowing or grant of a security interest by
any other Borrower, as debtor-in-possession under Section 364 of the Bankruptcy
Code, (vii) the disallowance of all or any portion of the Agent's and/or any
Lender's claim(s) for the repayment of the Obligations of any other Borrower
under Section 502 of the Bankruptcy Code, or (viii) any other circumstances
which might constitute a legal or equitable discharge or defense of a guarantor
or of any other Borrower. With respect to any Borrower's Obligations arising as
a result of the joint and several liability of the Borrowers hereunder with
respect to Revolving Loans or other extensions of credit made to any of the
other Borrowers hereunder, such Borrower waives, until the Obligations shall
have been paid in full and the Loan Agreement shall have been terminated, any
right to enforce any right of subrogation or any remedy which the Agent and/or
any Lender now has or may hereafter have against any other Borrower, any
endorser or any guarantor of all or any part of the Obligations, and any benefit
of, and any right to participate in, any security or collateral given to the
Agent and/or any Lender to secure payment of the Obligations or any other
liability of any Borrower to the Agent and/or any
POST-PETITION LOAN AGREEMENT - Page 121
Lender. Upon any Event of Default, the Agent may proceed directly and at once,
without notice, against any Borrower to collect and recover the full amount, or
any portion of the Obligations, without first proceeding against any other
Borrower or any other Person, or against any security or collateral for the
Obligations. Each Borrower consents and agrees that the Agent shall be under no
obligation to marshal any assets in favor of any Borrower or against or in
payment of any or all of the Obligations.
Section 15.18 CONTRIBUTION AND INDEMNIFICATION AMONG THE BORROWERS. Each
Borrower is obligated to repay the Obligations as joint and several obligors
under this Agreement. To the extent that any Borrower shall, under this
Agreement as a joint and several obligor, repay any of the Obligations
constituting Revolving Loans made to another Borrower hereunder or other
Obligations incurred directly and primarily by any other Borrower (an
"ACCOMMODATION PAYMENT"), then the Borrower making such Accommodation Payment
shall be entitled to contribution and indemnification from, and be reimbursed
by, each of the other Borrowers in an amount, for each of such other Borrowers,
equal to a fraction of such Accommodation Payment, the numerator of which
fraction is such other Borrower's Allocable Amount (as defined below) and the
denominator of which is the sum of the Allocable Amounts of all of the
Borrowers. As of any date of determination, the "ALLOCABLE AMOUNT" of each
Borrower shall be equal to the maximum amount of liability for Accommodation
Payments which could be asserted against such Borrower hereunder without (a)
rendering such Borrower "insolvent" within the meaning of Section 101 (31) of
the Bankruptcy Code, Section 2 of the Uniform Fraudulent Transfer Act ("UFTA")
or Section 2 of the Uniform Fraudulent Conveyance Act ("UFCA"), (b) leaving such
Borrower with unreasonably small capital or assets, within the meaning of
Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or Section 5 of the
UFCA, or (c) leaving such Borrower unable to pay its debts as they become due
within the meaning of Section 548 of the Bankruptcy Code or Section 4 of the
UFTA, or Section 5 of the UFCA. All rights and claims of contribution,
indemnification, and reimbursement under this Section shall be subordinate in
right of payment to the prior payment in full of the Obligations. The provisions
of this Section shall, to the extent expressly inconsistent with any provision
in any Loan Document, supersede such inconsistent provision.
Section 15.19 AGENCY OF THE PARENT FOR EACH OTHER BORROWER. Each of the
other Borrowers irrevocably appoints the Parent as its agent for all purposes
relevant to this Agreement, including the giving and receipt of notices and
execution and delivery of all documents, instruments, and certificates
contemplated herein (including, without limitation, execution and delivery to
the Agent of Borrowing Base Certificates, Notices of Borrowing, and Notices of
Conversion/Continuation) and all modifications hereto. Any acknowledgment,
consent, direction, certification, or other action which might otherwise be
valid or effective only if given or taken by all or any of the Borrowers or
acting singly, shall be valid and effective if given or taken only by the
Parent, whether or not any of the other Borrowers joins therein, and the Agent
and the Lenders shall have no duty or obligation to make further inquiry with
respect to the authority of the Parent under this SECTION 15.19, PROVIDED that
nothing in this SECTION 15.19 shall limit the effectiveness of, or the right of
the Agent and the Lenders to rely upon, any notice (including without limitation
a Notice of Borrowing or a Notice of Conversion/Continuation), document,
instrument, certificate, acknowledgment, consent, direction, certification, or
other action delivered by any Borrower pursuant to this Agreement.
POST-PETITION LOAN AGREEMENT - Page 122
Section 15.20 ADDITIONAL BORROWERS. Addition of any Person as a party to
this Agreement is subject to approval of the Agent and the Majority Lenders, and
may be conditioned upon such requirements as they may determine in their
discretion, including, without limitation, (a) the furnishing of such financial
and other information as the Agent or any such Lender may request; (b) approval
by all appropriate approval authorities of the Agent and each such Lender; (c)
execution and delivery by the Borrowers, such Person, the Agent, and the
Majority Lenders of such agreements and other documentation (including, without
limitation, an amendment to this Agreement or any other Loan Document), and the
furnishing by such Person or any of the Borrowers of such certificates,
opinions, and other documentation, as the Agent and any such Lender may request.
Neither the Agent nor any Lender shall have any obligation to approve any such
Person for addition as a party to this Agreement.
Section 15.21 EXPRESS WAIVERS BY BORROWERS IN RESPECT OF CROSS GUARANTIES
AND CROSS COLLATERALIZATION. Each Borrower agrees as follows:
(a) Each Borrower hereby waives: (i) notice of acceptance of this
Agreement; (ii) notice of the making of any Revolving Loans, the issuance
of any Letter of Credit or any other financial accommodations made or
extended under the Loan Documents or the creation or existence of any
Obligations; (iii) notice of the amount of the Obligations, subject,
however, to such Borrower's right to make inquiry of the Agent to ascertain
the amount of the Obligations at any reasonable time; (iv) notice of any
adverse change in the financial condition of any other Borrower or of any
other fact that might increase such Borrower's risk with respect to such
other Borrower under the Loan Documents; (v) notice of presentment for
payment, demand, protest, and notice thereof as to any promissory notes or
other instruments among the Loan Documents; and (vii) all other notices
(except if such notice is specifically required to be given to such
Borrower hereunder or under any of the other Loan Documents to which such
Borrower is a party) and demands to which such Borrower might otherwise be
entitled;
(b) Each Borrower hereby waives the right by statute or otherwise
to require the Agent or any Lender to institute suit against any other
Borrower or to exhaust any rights and remedies which the Agent or any
Lender has or may have against any other Borrower. Each Borrower further
waives any defense arising by reason of any disability or other defense of
any other Borrower (other than the defense that the Obligations shall have
been fully and finally performed and indefeasibly paid) or by reason of the
cessation from any cause whatsoever of the liability of any such Borrower
in respect thereof.
(c) Each Borrower hereby waives and agrees not to assert against
the Agent, any Lender, or the Letter of Credit Issuer: (i) any defense
(legal or equitable), set-off, counterclaim, or claim which such Borrower
may now or at any time hereafter have against any other Borrower or any
other party liable under the Loan Documents; (ii) any defense, set-off,
counterclaim, or claim of any kind or nature available to any other
Borrower against the Agent, any Lender, or the Letter of Credit Issuer,
arising directly or indirectly from the present or future lack of
perfection, sufficiency, validity, or enforceability of the Obligations or
any security therefor; (iii) any right or defense arising by reason of any
claim or defense based upon an election of remedies by the Agent, any
POST-PETITION LOAN AGREEMENT - Page 123
Lender, or the Letter of Credit Issuer under any applicable law; (iv) the
benefit of any statute of limitations affecting any other Borrower's
liability hereunder;
(d) Each Borrower consents and agrees that, without notice to or by
such Borrower and without affecting or impairing the obligations of such
Borrower hereunder, the Agent may (subject to any requirement for consent
of any of the Lenders to the extent required by this Agreement), by action
or inaction: (i) compromise, settle, extend the duration or the time for
the payment of, or discharge the performance of, or may refuse to or
otherwise not enforce the Loan Documents; (ii) release all or any one or
more parties to any one or more of the Loan Documents or grant other
indulgences to any other Borrower in respect thereof; (iii) amend or modify
in any manner and at any time (or from time to time) any of the Loan
Documents; or (iv) release or substitute any Person liable for payment of
the Obligations, or enforce, exchange, release, or waive any security for
the Obligations or any Guaranty of the Obligations;
Each Borrower represents and warrants to the Agent and the Lenders that such
Borrower is currently informed of the financial condition of all other Borrowers
and all other circumstances which a diligent inquiry would reveal and which bear
upon the risk of nonpayment of the Obligations. Each Borrower further represents
and warrants that such Borrower has read and understands the terms and
conditions of the Loan Documents. Each Borrower agrees that neither the Agent,
any Lender, nor the Letter of Credit Issuer has any responsibility to inform any
Borrower of the financial condition of any other Borrower or of any other
circumstances which bear upon the risk of nonpayment or nonperformance of the
Obligations.
Section 15.22 DESIGNATED SENIOR DEBT. Each of the Borrowers represents,
warrants, and agrees that the Obligations constitute, and are hereby designated
as, "Designated Senior Debt" as such term is defined in the Indenture.
[Remainder of page intentionally left blank]
POST-PETITION LOAN AGREEMENT - Page 124
IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
BORROWERS:
METALS USA, INC.
By:
-------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and
Chief Accounting Officer
AEROSPACE SPECIFICATION METALS, INC.
AEROSPACE SPECIFICATION METALS - U.K., INC.
ALLMET BUILDING PRODUCTS, L.P.
By: Allmet GP, Inc., its General Partner
ALLMET GP, INC.
ALLMET LP, INC.
CORNERSTONE BUILDING PRODUCTS, INC.
CORNERSTONE METALS CORPORATION
CORNERSTONE PATIO CONCEPTS, L.L.C.
By: Metals USA, Inc., its sole Member
▇▇▇▇▇▇ TITANIUM, LTD.
INTERSTATE STEEL SUPPLY CO. OF MARYLAND, INC.
INTSEL GP, INC.
INTSEL LP, INC.
i-SOLUTIONS DIRECT, INC.
▇▇▇▇▇▇▇▇ REAL ESTATE CORPORATION
▇▇▇▇▇▇▇▇ STEEL GP, INC.
▇▇▇▇▇▇▇▇ STEEL LP, INC.
METALMART, INC.
METALS AEROSPACE INTERNATIONAL, INC.
METALS RECEIVABLES CORPORATION
METALS USA BUILDING PRODUCTS SOUTHEAST, INC.
METALS USA CARBON FLAT ROLLED, INC.
METALS USA FINANCE CORP.
METALS USA FLAT ROLLED CENTRAL, INC.
METALS USA MANAGEMENT CO., L.P.
By: MUSA GP, Inc., its General Partner
METALS USA PLATES AND SHAPES NORTHCENTRAL, INC.
METALS USA PLATES AND SHAPES, NORTHEAST, L.P.
By: ▇▇▇▇▇▇▇▇ Steel GP, Inc., its General Partner
METALS USA PLATES AND SHAPES SOUTHCENTRAL, INC.
METALS USA PLATES AND SHAPES SOUTHEAST, INC.
METALS USA PLATES AND SHAPES SOUTHWEST,
LIMITED PARTNERSHIP
By: Intsel GP, Inc., its General Partner
METALS USA REALTY COMPANY
METALS USA SPECIALTY METALS NORTHCENTRAL, INC.
METALS USA SPECIALTY METALS NORTHWEST, INC.
METAL VENTURES L.L.C.
By: Metals USA Specialty Metals Northcentral,
Inc., its Managing Member
MUSA GP, INC.
MUSA LP, INC.
NATIONAL MANUFACTURING, INC.
QUEENSBORO, L.L.C.
By: Metals USA Plates and Shapes Southeast, Inc.,
its sole Member
TEXAS ALUMINUM INDUSTRIES, INC.
VALLEY ALUMINUM CO.
VALLEY ALUMINUM OF NEVADA, INC.
WESTERN AWNING COMPANY, INC.
▇▇▇▇▇▇-▇▇▇▇▇▇ STEEL CORPORATION
WSS TRANSPORTATION, INC.
By:
---------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
AGENT:
BANK OF AMERICA, NATIONAL ASSOCIATION
By:
--------------------------------------------------
Name:
Title:
LENDERS:
Commitment: $60,277,000 BANK OF AMERICA, NATIONAL ASSOCIATION
By:
--------------------------------------------------
Name:
Title:
Commitment: $60,277,000 PNC BANK, NATIONAL ASSOCIATION
By:
--------------------------------------------------
Name:
Title:
Commitment: $31,111,500 THE CIT GROUP/BUSINESS CREDIT, INC.
By:
--------------------------------------------------
Name:
Title:
Commitment: $19,446,000 TRANSAMERICA BUSINESS CAPITAL CORPORATION
By:
--------------------------------------------------
Name:
Title:
Commitment: $27,223,000 CONGRESS FINANCIAL CORPORATION
(SOUTHWEST)
By:
--------------------------------------------------
Name:
Title:
Commitment: $31,111,500 GENERAL ELECTRIC CAPITAL CORPORATION
By:
--------------------------------------------------
Name:
Title:
Commitment: $19,446,000 U.S. BANK, NATIONAL ASSOCIATION
(f/k/a and d/b/a "FIRSTAR BANK, N.A.")
By:
--------------------------------------------------
Name:
Title:
Commitment: $15,554,000 GUARANTY BUSINESS CREDIT CORPORATION
By:
--------------------------------------------------
Name:
Title:
Commitment: $11,665,500 RZB FINANCE LLC
By:
--------------------------------------------------
Name:
Title:
By:
--------------------------------------------------
Name:
Title:
Commitment: $7,777,000 THE PROVIDENT BANK
By:
--------------------------------------------------
Name:
Title:
Commitment: $11,665,500 AMSOUTH BANK
By:
--------------------------------------------------
Name:
Title:
Commitment: $31,111,500 GMAC COMMERCIAL CREDIT LLC
By:
--------------------------------------------------
Name:
Title:
Commitment: $23,334,500 FLEET CAPITAL CORPORATION
By:
--------------------------------------------------
Name:
Title:
SCHEDULE 1.1(A)
TO
LOAN AND SECURITY AGREEMENT
PERMITTED LIENS
SCHEDULE 1.1(A) - Solo Page
SCHEDULE 1.1(B)
TO
LOAN AND SECURITY AGREEMENT
PERMITTED INVESTMENTS
None.
SCHEDULE 1.1(A) - Solo Page
SCHEDULE 1.1(C)
TO
LOAN AND SECURITY AGREEMENT
LOAN VALUE OF REAL ESTATE
SCHEDULE 1.1(C) - Solo Page
SCHEDULE 6.3
TO
LOAN AND SECURITY AGREEMENT
LOCATION OF COLLATERAL
SCHEDULE 6.3 - Solo Page
SCHEDULE 6.7
TO
LOAN AND SECURITY AGREEMENT
COLLATERAL REPORTING
SCHEDULE 6.7 - Solo Page
SCHEDULE 8.3
TO
LOAN AND SECURITY AGREEMENT
ORGANIZATION AND QUALIFICATION
SCHEDULE 8.3 - Solo Page
SCHEDULE 8.4
TO
LOAN AND SECURITY AGREEMENT
CORPORATE NAMES
SCHEDULE 8.4 - Solo Page
SCHEDULE 8.5
TO
LOAN AND SECURITY AGREEMENT
SUBSIDIARIES
SCHEDULE 8.5 - Solo Page
SCHEDULE 8.8
TO
LOAN AND SECURITY AGREEMENT
DEBT
SCHEDULE 8.8 - Solo Page
SCHEDULE 8.11
TO
LOAN AND SECURITY AGREEMENT
REAL ESTATE; LEASES
SCHEDULE 8.11 - Solo Page
SCHEDULE 8.12
TO
LOAN AND SECURITY AGREEMENT
PROPRIETARY RIGHTS
SCHEDULE 8.12 - Solo Page
SCHEDULE 8.13
TO
LOAN AND SECURITY AGREEMENT
TRADE NAMES
SCHEDULE 8.13 - Solo Page
SCHEDULE 8.14
TO
LOAN AND SECURITY AGREEMENT
LITIGATION
SCHEDULE 8.14 - Solo Page
SCHEDULE 8.16
TO
LOAN AND SECURITY AGREEMENT
LABOR MATTERS
SCHEDULE 8.16 - Solo Page
SCHEDULE 8.17
TO
LOAN AND SECURITY AGREEMENT
ENVIRONMENTAL MATTERS
SCHEDULE 8.17 - Solo Page
SCHEDULE 8.20
TO
LOAN AND SECURITY AGREEMENT
ERISA MATTERS
SCHEDULE 8.20 - Solo Page
SCHEDULE 8.26
TO
LOAN AND SECURITY AGREEMENT
MATERIAL AGREEMENTS
None.
SCHEDULE 8.26 - Solo Page
SCHEDULE 8.27
TO
LOAN AND SECURITY AGREEMENT
BANK ACCOUNTS
SCHEDULE 8.27 - Solo Page
SCHEDULE 8.29
TO
LOAN AND SECURITY AGREEMENT
INVESTMENT PROPERTY
See SCHEDULE 8.5.
SCHEDULE 8.29 - Solo Page
EXHIBIT A
TO
LOAN AND SECURITY AGREEMENT
FORM OF REVOLVING NOTE
EXHIBIT A - Cover Page
EXHIBIT B
TO
LOAN AND SECURITY AGREEMENT
FORM OF BORROWING BASE CERTIFICATE
EXHIBIT B - Cover Page
EXHIBIT C
TO
LOAN AND SECURITY AGREEMENT
FORM OF NOTICE OF BORROWING
EXHIBIT C - Cover Page
EXHIBIT D
TO
LOAN AND SECURITY AGREEMENT
FORM OF NOTICE OF CONVERSION/CONTINUATION
EXHIBIT D - Cover Page
EXHIBIT E
TO
LOAN AND SECURITY AGREEMENT
FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT E - Cover Page
EXHIBIT F
TO
LOAN AND SECURITY AGREEMENT
FORM OF COMPLIANCE CERTIFICATE
EXHIBIT F - Cover Page