Exhibit 10.5
--------------------------------------------------------------------------------
TERM LOAN AGREEMENT
DATED AS OF AUGUST 30, 2002
BY AND AMONG
ANCHOR GLASS CONTAINER CORPORATION,
AS BORROWER,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO,
AS LENDERS,
AND
ABLECO FINANCE LLC,
AS AGENT
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS; CERTAIN TERMS......................................................................... 5
Section 1.01 Definitions..................................................................... 5
Section 1.02 Terms Generally................................................................. 20
Section 1.03 Accounting and Other Terms...................................................... 20
Section 1.04 Time References................................................................. 21
ARTICLE II THE TERM LOAN..................................................................................... 21
Section 2.01 Term Loan Commitments........................................................... 21
Section 2.02 Making the Term Loan............................................................ 21
Section 2.03 Repayment of Term Loan; Evidence of Debt........................................ 22
Section 2.04 Interest........................................................................ 22
Section 2.05 Reduction of Term Loan Commitment; Prepayment of the Term Loan.................. 23
Section 2.06 Fees............................................................................ 24
Section 2.07 Securitization.................................................................. 24
Section 2.08 Taxes........................................................................... 25
ARTICLE III FEES, PAYMENTS AND OTHER COMPENSATION............................................................ 26
Section 3.01 Audit and Collateral Monitoring Fees............................................ 26
Section 3.02 Payments; Computations and Statements........................................... 27
Section 3.03 Sharing of Payments, Etc........................................................ 27
Section 3.04 Apportionment of Payments....................................................... 27
Section 3.05 Increased Costs and Reduced Return.............................................. 28
ARTICLE IV CONDITIONS TO FUNDING............................................................................. 29
Section 4.01 Conditions Precedent to the Term Loan........................................... 29
- i -
ARTICLE V REPRESENTATIONS AND WARRANTIES..................................................................... 32
Section 5.01 Representations and Warranties.................................................. 32
ARTICLE VI COVENANTS OF THE BORROWER......................................................................... 35
Section 6.01 Covenants Incorporated by Reference From the Revolving Loan Agreement........... 36
Section 6.02 Additional Affirmative and Negative Covenants................................... 36
Section 6.03 Financial Covenants............................................................. 48
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES................................................................... 48
Section 7.01 Events of Default............................................................... 48
Section 7.02 Remedies........................................................................ 50
ARTICLE VIII AGENT........................................................................................... 53
Section 8.01 Appointment..................................................................... 53
Section 8.02 Nature of Duties................................................................ 54
Section 8.03 Rights, Exculpation, Etc........................................................ 54
Section 8.04 Reliance........................................................................ 55
Section 8.05 Indemnification................................................................. 55
Section 8.06 Agent Individually.............................................................. 55
Section 8.07 Successor Agent................................................................. 56
Section 8.08 Collateral Matters.............................................................. 56
Section 8.09 Agency for Perfection........................................................... 57
ARTICLE IX MISCELLANEOUS..................................................................................... 58
Section 9.01 Notices, Etc.................................................................... 58
Section 9.02 Amendments, Etc................................................................. 59
Section 9.03 No Waiver; Remedies, Etc........................................................ 59
Section 9.04 Expenses; Taxes; Attorneys' Fees................................................ 59
Section 9.05 Right of Set-off................................................................ 60
- ii -
Section 9.06 Severability.................................................................... 60
Section 9.07 Assignments and Participations.................................................. 60
Section 9.08 Counterparts.................................................................... 63
Section 9.09 GOVERNING LAW................................................................... 63
Section 9.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE........................... 64
Section 9.11 WAIVER OF JURY TRIAL, ETC....................................................... 64
Section 9.12 Consent by the Agent and Lenders................................................ 65
Section 9.13 No Party Deemed Drafter......................................................... 65
Section 9.14 Reinstatement; Certain Payments................................................. 65
Section 9.15 Indemnification................................................................. 65
Section 9.16 Records......................................................................... 66
Section 9.17 Binding Effect.................................................................. 66
Section 9.18 Interest........................................................................ 67
Section 9.19 Confidentiality................................................................. 68
Section 9.20 Integration..................................................................... 68
- iii -
SCHEDULE AND EXHIBITS
Schedule 1.01(A) Lenders and Lenders' Term Loan Commitments
Schedule 1.01(B) Permitted Holders
Exhibit A Form of Security Agreement
Exhibit B Form of Pledge Agreement
Exhibit C Form of Notice of Borrowing
Exhibit D Form of Assignment and Acceptance
TERM LOAN AGREEMENT
Term Loan Agreement, dated as of August 30, 2002, by and among Anchor
Glass Container Corporation, a Delaware corporation (the "Borrower"), the
financial institutions from time to time party hereto (each a "Lender" and
collectively the "Lenders") and Ableco Finance LLC, a Delaware limited liability
company ("Ableco"), as agent for the Lenders (in such capacity the "Agent").
RECITALS
A. On April 15, 2002, the Borrower commenced a case (the "Chapter 11
Case") under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy
Code") in the United States Bankruptcy Court for the Middle District of Florida
(the "Bankruptcy Court") and the Borrower has retained possession of its assets
and has been authorized under the Bankruptcy Code to continue the management and
operation of its business as debtor-in-possession pursuant to Sections 1107 and
1108 of the Bankruptcy Code.
B. In the Chapter 11 Case, the Borrower filed the Plan of
Reorganization (as hereinafter defined) which was confirmed by the Bankruptcy
Court pursuant to the Confirmation Order (as hereinafter defined).
C. The Borrower, as contemplated by the Plan of Reorganization, has
asked the Lenders to extend credit to the Borrower consisting of a term loan in
the aggregate principal amount of $20,000,000, the proceeds of which are to be
used to finance payments under the Plan of Reorganization. The Lenders are
willing to extend such credit to the Borrower subject to the terms and
conditions hereinafter set forth.
In consideration of the premises and the covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CERTAIN TERMS
Section 1.01 Definitions. As used in this Agreement, the following
terms shall have the respective meanings indicated below, such meanings to be
applicable equally to both the singular and plural forms of such terms:
"Ableco" has the meaning specified therefor in the preamble hereto.
"Action" has the meaning specified therefor in Section 9.12.
"Affiliate" means, with respect to a specified Person, any other
Person which directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with, such Person, and
without limiting the generality of the foregoing, includes (a) any Person which
beneficially owns or holds ten (10%) percent or more of any class of Voting
Stock of such Person or other equity interests in such Person and (b) any
director or executive
- 5 -
officer of such Person. For the purposes of this definition, the term "control"
(including with correlative meanings, the terms "controlled by" and "under
common control with), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of Voting
Stock, by agreement or otherwise. Notwithstanding anything herein to the
contrary, in no event shall the Agent or any Lender be considered an "Affiliate"
of the Borrower.
"Agent" has the meaning specified therefor in the preamble hereto.
"Agreement" means this Term Loan Agreement.
"Assignment and Acceptance" means an assignment and acceptance entered
into by an assigning Lender and an assignee, and accepted by the Agent, in
accordance with Section 9.07 and substantially in the form of Exhibit D or such
other form acceptable to the Agent.
"Authorized Officer" means, with respect to any Person, the chief
executive officer, chief financial officer, president or executive vice
president of such Person.
"Bankruptcy Code" means the United States Bankruptcy Code, being Title
11 of the United States Code as enacted in 1978, as amended, recodified,
modified or supplemented from time to time, together with all rules, regulations
and interpretations thereunder or related thereto.
"Bankruptcy Court" means the United States Bankruptcy Court for the
Middle District of Florida or any other court having jurisdiction over the
Chapter 11 Case from time to time.
"Benefit Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Borrower or any Guarantor sponsors, maintains, or to
which it makes, is making, or is obligated to make contributions, or in the case
of a Multiemployer Plan has made contributions at any time during the
immediately preceding six (6) plan years.
"Board" means the Board of Governors of the Federal Reserve System of
the United States.
"Board of Directors" means, with respect to any Person, the board of
directors (or comparable managers) of such Person or any committee thereof duly
authorized to act on behalf of the board.
"Borrower" has the meaning specified therefor in the preamble hereto.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required to
close.
"Capital Guideline" means any law, rule, regulation, policy, guideline
or directive (whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) of any central bank or
Governmental Authority (i) regarding capital adequacy,
- 6 -
capital ratios, capital requirements, the calculation of a bank's capital or
similar matters, or (ii) affecting the amount of capital required to be obtained
or maintained by any Lender, any Person controlling any Lender, or the manner in
which any Lender, any Person controlling any Lender, allocates capital to any of
its contingent liabilities (including letters of credit), advances, acceptances,
Term Loan Commitments, assets or liabilities.
"Capital Expenditures" means, with respect to any Person, all
expenditures made and liabilities incurred for the acquisition of assets which
are not, in accordance with GAAP, treated as expense items for such Person in
the year made or incurred or as a prepaid expense applicable to a future year or
years.
"Capital Leases" means, as applied to any Person, any lease of (or any
agreement conveying the right to use) any property (whether real, personal or
mixed) by such Person as lessee which in accordance with GAAP, is required to be
reflected as a liability capital lease on the balance sheet of such Person.
"Capital Stock" means with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's capital stock or partnership, limited liability company or other equity
interest at ant time outstanding, and any and all rights, warrants or options
exchangeable for or convertible into such capital stock or other interests (but
excluding any debt security that is exchangeable for or convertible into such
capital stock).
"Cash Equivalents" means, at any time, (a) any evidence of
Indebtedness with a maturity date of one hundred eighty (180) days or less
issued or directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof; provided, that, the full faith
and credit of the United States of America is pledged in support thereof; (b)
certificates of deposit or bankers' acceptances with a maturity of one hundred
eighty (180) days or less of any financial institution that is a member of the
Federal Reserve System having combined capital and surplus and undivided profits
of not less than $250,000,000; (c) commercial paper (including variable rate
demand notes) with a maturity of one hundred eighty (180) days or less issued by
a corporation (except an Affiliate of the Borrower) organized under the laws of
any State of the United States of America or the District of Columbia and rated
at least A-1 by Standard & Poor's Ratings Service, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. or at least P-1 by ▇▇▇▇▇'▇ Investors Service, Inc.; (d)
repurchase obligations with a term of not more than thirty (30) days for
underlying securities of the types described in clause (a) above entered into
with any financial institution having combined capital and surplus and undivided
profits of not less than $250,000,000; (e) repurchase agreements and reverse
repurchase agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the United States of America or issued by any
governmental agency thereof and backed by the full faith and credit of the
United States of America, in each case maturing within one hundred (100) days or
less from the date of acquisition; provided, that, the terms of such agreements
comply with the guidelines set forth in the Federal Financial Agreements of
Depository Institutions with Securities Dealers and Others, as adopted by the
Comptroller of the Currency on October 31, 1985; and (f) investments in money
market funds and mutual funds which invest substantially all of their assets in
securities of the types described in clauses (a) through (e) above.
- 7 -
"Change of Control" means [(a) the transfer (in one transaction or a
series of transactions) of all or substantially all of the assets of the
Borrower to any Person or group (as such term is used in Section 13(d)(3) of the
Exchange Act); (b) the liquidation or dissolution of the Borrower or the
adoption of a plan by the stockholders of the Borrower relating to the
dissolution or liquidation of the Borrower, (c) to the extent clause (e) below
is triggered, the acquisition by any Person or group (as such term is used in
Section 13(d)(3) of the Exchange Act), except for one or more Permitted Holders,
of beneficial ownership (as determined in accordance with rules 13d-3 and 13d-5
under the Exchange Act, except that a person will be deemed to have beneficial
ownership of all shares that such person has the right to acquire, whether such
right is exercisable immediately or only after a passage of time), directly or
indirectly, of more than forty percent (40%) (or after a Qualified Public
Offering twenty-five percent (25%)) of the voting power of the total outstanding
Voting Stock (on a fully diluted basis) of the Borrower or the Board of
Directors of the Borrower; (d) during any period of two (2) consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Borrower (together with any new directors who have been
appointed by any Permitted Holder, or whose nomination for election by the
stockholders of the Borrower was approved by a vote of at least sixty-six and
two-thirds percent (66 2/3%) of the directors of the Borrower then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Borrower then
still in office; or (e) the failure of the Permitted Holders to own directly or
indirectly at least thirty percent (30%) of the voting power of the total
outstanding Voting Stock of the Borrower].
"Chapter 11 Case" means the Chapter 11 Case of the Borrower under the
Bankruptcy Code and referred to as In re: Anchor Glass Container Corporation,
Case No. 02-07233-8Cl pending in the Bankruptcy Court.
"Collateral" means all of the property and assets and all interests
therein and proceeds thereof now owned or hereafter acquired by any Person upon
which a Lien is granted or purported to be granted by such Person as security
for all or any part of the Term Loan Obligations.
"Collateral Access Agreement" means an agreement in writing, in form
and substance satisfactory to the Agent, from any lessor of premises to the
Borrower, or any other person to whom any Collateral is consigned or who has
custody, control or possession of any such Collateral or is otherwise the owner
or operator of any premises on which any of such Collateral is located, pursuant
to which such lessor, consignee or other person, among other things,
acknowledges the security interest of the Agent in such Collateral (subject to
liens and security interests permitted herein), agrees to waive any and all
claims such lessor, consignee or other person may, at any time, have against
such Collateral, whether for processing, storage or otherwise, and agrees to
permit the Agent access to, and the right to remain on, the premises of such
lessor, consignee or other person so as to exercise the Agent's rights and
remedies and otherwise deal with such Collateral and in the case of any
consignee or other person who at any time has custody, control or possession of
any Collateral, acknowledges that it holds and will hold possession of the
Collateral for the benefit of the Agent and the Lenders and agrees to follow all
instructions of the Agent with respect thereto.
- 8 -
"Collateral Agency Agreement" means the Collateral Agency and
Intercreditor Agreement, dated as of August 30, 2002, by and among the Revolving
Loan Agent, the Revolving Loan Lenders, the Agent, the Lenders and the
Collateral Agent, as acknowledged by the Borrower.
"Collateral Agent" means Congress, in its capacity as collateral agent
under the Collateral Agency Agreement, and any successor or replacement
Collateral Agent appointed pursuant to the terms of the Collateral Agency
Agreement.
"Confirmation Order" means the Order Confirming the Amended Chapter 11
Plan of Reorganization issued by the Bankruptcy Court and entered on August 8,
2002 in the Chapter 11 Case.
"Congress" means Congress Financial Corporation (Central), an Illinois
corporation, in its individual capacity.
"Default" means an event which, with the giving of notice or the lapse
of time or both, would constitute an Event of Default.
"Disposition" means any transaction, or series of related
transactions, pursuant to which any Person or any of its Subsidiaries sells,
assigns, transfers or otherwise disposes of any property or assets (whether now
owned or hereafter acquired) to any other Person, in each case, whether or not
the consideration therefor consists of cash, securities or other assets owned by
the acquiring Person, excluding any sales of Inventory in the ordinary course of
business on ordinary business terms.
"Dollar," "Dollars" and the symbol "$" each means lawful money of the
United States of America.
"EBITDA" means, as to any Person, with respect to any period, an
amount equal to: the Net Income of such Person and its Subsidiaries for such
period on a consolidated basis determined in accordance with GAAP, plus
depreciation, amortization and other non-cash charges (including, but not
limited to, imputed interest and deferred compensation) of such Person and its
Subsidiaries for such period (to the extent deducted in the computation of Net
Income of such Person and its Subsidiaries in such period), all determined in
accordance with GAAP, plus the Interest Expense of such Person and its
Subsidiaries for such period (to the extent deducted in the computation of Net
Income in such period), plus charges for Federal, State, local and foreign
income taxes (to the extent deducted in the computation of Net Income in such
period).
"Equipment Financing" means the proposed equipment financing of the
Borrower described in writing by the Borrower to the Agent prior to the date
hereof.
"Equipment Lease Term Loan Agreements" means the agreements,
instruments and other documents executed and delivered in connection with the
Equipment Financing.
"ERISA" means the United States Employee Retirement Income Security
Act of
- 9 -
1974, together with all rules, regulations and interpretations thereunder or
related thereto.
"ERISA Affiliate" means, any Person, required to be aggregated with
the Borrower or any Subsidiaries under Sections 414(b), 414(c), 414(m) and
414(o) of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043(c) of ERISA or the regulations issued thereunder, with respect to a Benefit
Plan; (b) the adoption of any amendment to a Benefit Plan that would require the
provision of security pursuant to Section 401(a)(29) of the Code or Section 307
of ERISA; (c) the existence with respect to any Benefit Plan of an "accumulated
funding deficiency" (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived; (d) the filing pursuant to Section 412 of the
Code or Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Benefit Plan; (e) the occurrence of a
"prohibited transaction" with respect to which the Borrower or any of its
Subsidiaries, or any of its or their respective Subsidiaries is a "disqualified
person" (within the meaning of Section 4975 of the Code) or with respect to
which the Borrower, any of its Subsidiaries or any of its or their respective
Subsidiaries could otherwise be liable; (f) a complete or partial withdrawal by
the Borrower, any of its Subsidiaries or any ERISA Affiliate from a
Multiemployer Plan or a cessation of operations which is treated as such a
withdrawal or notification that a Multiemployer Plan is in reorganization; (g)
the filing of a notice of intent to terminate, the treatment of a Benefit Plan
amendment as a termination under Section 4041 or 4041A of ERISA, or the
commencement of proceedings by the Pension Benefit Guaranty Corporation to
terminate a Benefit Plan; (h) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Benefit Plan; (i) the
imposition of any liability under Title IV of ERISA, other than the Pension
Benefit Guaranty Corporation premiums due but not delinquent under Section 4007
of ERISA, upon the Borrower, any of its Subsidiaries or any ERISA Affiliate in
excess of [$1,000,000] and (j) any other event or condition with respect to a
Benefit Plan including any Benefit Plan subject to Title IV of ERISA maintained,
or contributed to, by any ERISA Affiliate that could reasonably be expected to
result in liability of the Borrower in excess of [$1,000,000].
"Event of Default" means any of the events set forth in Section 7.01.
"Excess Availability Covenant Trigger Event" means, at any time, when
Excess Availability (as defined in the Revolving Loan Agreement) is equal to or
less than $10,000,000.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extraordinary Receipts" means any cash received by the Borrower or
any of its Subsidiaries not in the ordinary course of business (and not
consisting of proceeds described in Section 2.05(c)(ii)or (iii)), including,
without limitation, (i) foreign, United States, state or local tax refunds, (ii)
pension plan reversions, (iii) proceeds of insurance, (iv) judgments, proceeds
of settlements or other consideration of any kind in connection with any cause
of action, (v) condemnation awards (and payments in lieu thereof), (vi)
indemnity payments and (vii) any purchase price adjustment received in
connection with any purchase agreement.
- 10 -
"Final Maturity Date" means March 31, 2005, or such earlier date on
which the Term Loan shall become due and payable in accordance with the terms of
this Agreement.
"Fixed Charge Coverage Ratio" means, with respect to the Borrower and
its Subsidiaries, on a consolidated basis, (a) measured quarterly, at any time
during which an Excess Availability Covenant Trigger Event has not occurred and
is continuing, the ratio of (i) EBITDA of the Borrower and its Subsidiaries
during the four (4) full fiscal quarters immediately preceding the determination
date with respect to the calculation of the Fixed Charge Coverage Ratio to (ii)
Fixed Charges of the Borrower and its Subsidiaries for such four (4) fiscal
quarter period and (b) measured monthly, at any time during which an Excess
Availability Covenant Trigger Event has occurred and is continuing, the ratio of
(i) EBITDA of the Borrower and its Subsidiaries during the twelve (12) months
immediately preceding the determination date with respect to the calculation of
the Fixed Charge Coverage Ratio to (ii) Fixed Charges of the Borrower and its
Subsidiaries for such twelve (12) month period.
"Fixed Charges" means, as to any Person, with respect to any period,
the sum of, without duplication, (a) all Interest Expense of such Person and its
Subsidiaries (which for purposes of this definition shall not include amortizing
payments of deferred financing charges that do not constitute interest), (b) all
Capital Expenditures (other than (i) Capital Expenditures that are financed with
proceeds of Indebtedness for borrowed money other than loans made under the
Revolving Loan Agreement and (ii) Capital Expenditures that are made using the
proceeds of asset sales to the extent permitted hereunder) of such Person and
its Subsidiaries, (c) dividends, repurchases or redemptions by such Person and
its Subsidiaries during such period in respect of Capital Stock, (d) payments to
the PBGC under the PBGC Settlement Agreement as in effect on the date hereof,
(e) all regularly scheduled (as determined at the beginning of the respective
period) principal payments of Indebtedness for borrowed money and Indebtedness
with respect to Capital Leases (and without duplicating in items (a) and (b) of
this definition, the interest component with respect to Indebtedness under
Capital Leases), (f) federal, state, local and foreign income taxes paid in
cash, and (g) management fees paid in cash (in each case, of such Person and its
Subsidiaries for such period and to the extent not included in the calculation
of EBITDA of such Person and its Subsidiaries for such period).
"Funding Date" means the Business Day (a) which is at least eleven
(11) days after the date on which the Confirmation Order is entered on the
docket by the Clerk of the Bankruptcy Court, (b) by which all of the conditions
precedent set forth in the Plan of Reorganization and the Confirmation Order
have been satisfied and (c) on which the conditions precedent hereunder to the
making of the Term Loan have been satisfied.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time as set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board which are applicable to the circumstances
as of the date of determination consistently applied, except that, for purposes
of Section 6.02; GAAP shall be determined on the basis of such principles in
effect on the date hereof and consistent with those used in the preparation of
the most recent audited financial statements delivered to the Agent prior to the
date hereof.
- 11 -
"Governmental Authority" means any nation or government, any Federal,
state, city, town, municipality, county, local or other political subdivision
thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantor" means a Subsidiary of the Borrower formed or acquired
after the date hereof that has guaranteed the Term Loan Obligations pursuant to
a guaranty that has not been released in accordance with the provisions hereof.
"Hedge Agreement" means any and all transactions, agreements or
documents now existing or hereafter entered into, which provides 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 the Borrower's exposure to fluctuations in interest
or exchange rates, loan, credit exchange, security or currency valuations or
commodity prices.
"Indebtedness" means, [with respect to any Person, any liability,
whether or not contingent, (a) in respect of borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof) or evidenced by bonds, notes, debentures or similar
instruments; (b)representing the balance deferred and unpaid of the purchase
price of any property or services (except any such balance that constitutes an
account payable to a trade creditor (whether or not an Affiliate) created,
incurred, assumed or guaranteed by such Person in the ordinary course of
business of such Person in connection with obtaining goods, materials or
services that is not overdue by more than ninety (90) days, unless the trade
payable is being contested in good faith); (c) all obligations as lessee under
leases which have been, or should be, in accordance with GAAP recorded as
Capital Leases; (d) any contractual obligation, contingent or otherwise, of such
Person to pay or be liable for the payment of any indebtedness described in this
definition of another Person, including, without limitation, any such
indebtedness, directly or indirectly guaranteed, or any agreement to purchase,
repurchase, or otherwise acquire such indebtedness, obligation or liability or
any security therefor, or to provide funds for the payment or discharge thereof;
or to maintain solvency, assets, level of income, or other financial condition;
(e) all obligations to purchase, redeem, retire or otherwise acquire for value
any Capital Stock or other equity securities issued by such Person valued, in
the case of redeemable stock at the greater of voluntary liquidation preference
and the involuntary liquidation preference plus accrued and unpaid dividends;
(f) all reimbursement obligations and other liabilities of such Person with
respect to surety bonds (whether bid, performance or otherwise), letters of
credit, banker's acceptances, drafts or similar documents or instruments issued
for such Person's account; (g) all indebtedness of such Person in respect of
indebtedness of another Person for borrowed money or indebtedness of another
Person otherwise described in this definition which is secured by any consensual
lien, security interest, collateral assignment, conditional sale, mortgage, deed
of trust, or other encumbrance on any asset of such Person, whether or not such
obligations, liabilities or indebtedness are assumed by or are a personal
liability of such Person, all as of such time; (b)all obligations, liabilities
and indebtedness of such Person (marked to market) arising under Hedge
Agreements; and (i) all
- 12 -
obligations owed by such Person under License Agreements with respect to
non-refundable, advance or minimum guarantee royalty payments].
"Indemnified Matters" has the meaning specified therefor in Section
9.15.
"Indemnitees" has the meaning specified therefor in Section 9.15.
"Information Certificate" means the Information Certificate of the
Borrower containing material information with respect to the Borrower, its
businesses and assets and provided by or on behalf of the Borrower to the Agent
and the Lenders in connection with the preparation of this Agreement and the
other Loan Documents and the financing arrangements provided for herein.
"Interest Expense" means, for any period as to any Person, all of the
following as determined in accordance with GAAP: (a) total interest expense of
such Person and its Subsidiaries on a consolidated basis for such period,
whether paid or accrued (including the interest component of Capital Leases for
such period), including, without limitation, all bank fees, commissions,
discounts and other fees and charges owed with respect to letters of credit (but
excluding amortization of discount and amortization of deferred financing fees
paid in cash in connection with the transactions contemplated hereby, interest
(payable by addition to principal or in the form of property other than cash and
any other interest expense not payable in cash), minus (b) any net payments
received by such Person and its Subsidiaries on a consolidated basis during such
period as interest income received in respect of its investments in cash.
"Insolvency Proceeding" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, or extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended (or any successor statute thereto) and the regulations thereunder.
"Lender" has the meaning specified therefor in the preamble hereto.
"Liabilities" has the meaning specified therefor in Section 2.07.
"Lien" means any mortgage, deed of trust, pledge, lien (statutory or
otherwise), security interest, charge or other encumbrance or security or
preferential arrangement of any nature, including, without limitation, any
conditional sale or title retention arrangement, any Capital Lease and any
assignment, deposit arrangement or financing lease intended as, or having the
effect of, security.
"Loan Document" means this Agreement and all notes, guaranties,
security agreements, deposit account control agreements, investment property
control agreements, intercreditor agreements, and all other agreements,
documents and instruments, now or at any time hereafter executed and/or
delivered by the Borrower in connection with this Agreement.
- 13 -
"Loan Parties" means the Borrower and each Guarantor.
"Material Adverse Effect" means a material adverse effect on (a) the
financial condition, business, performance or operations of the Borrower, or (b)
the legality, validity or enforceability of this Agreement or any of the other
Loan Documents; (c) the legality, validity, enforceability, perfection or
priority of the security interests and liens of the Agent upon the Collateral;
(d) any Collateral having an aggregate value in excess of $100,000; (e) the
ability of the Borrower to repay the Term Loan Obligations or of the Borrower to
perform its obligations under this Agreement or any of the other Loan Documents
as and when to be performed; or (f) the ability of the Agent or any Lender to
enforce the Term Loan Obligations or realize upon the Collateral or otherwise
with respect to the rights and remedies of the Agent and Lenders under this
Agreement or any of the other Loan Documents.
"Material Contract" means any other contract or other agreement (other
than the Loan Documents), whether written or oral, to which the Borrower is a
party as to which the breach, nonperformance, cancellation or failure to renew
by any party thereto would have a Material Adverse Effect, including, without
limitation, the contracts and agreements set forth on Schedule 8.15 to the
Information Certificate.
"Mortgage Note Agreements" means the following: (a) the Mortgage Note
Indenture; (b) the Mortgage Notes; (c) the Security Agreements (as defined in
the Mortgage Note Indenture); (d) all other agreements, instruments and other
documents executed or delivered by the Borrower with, to or in favor of the
Mortgage Note Trustee or any Mortgage Note Holder in connection therewith or
related thereto.
"Mortgage Note Collateral" has the meaning specified therefor in the
Mortgage Note Intercreditor Agreement.
"Mortgage Note Debt" means all obligations, liabilities and
indebtedness of every kind, nature and description owing by the Borrower to the
Mortgage Note Trustee or any Mortgage Note Holder, including principal,
interest, charges, fees, premiums, indemnities, costs and expenses, however
evidenced, whether as principal, surety, endorser, guarantor or otherwise,
arising under the Mortgage Note Agreements.
"Mortgage Note Holders" means the holders from time to time of the
Mortgage Notes.
"Mortgage Note Indenture" means the Indenture, dated as of April 17,
1997, by and among the Borrower, the Mortgage Note Trustee, and Consumers U.S.,
Inc., as guarantor, as amended by Supplemental Indenture No. 1 thereto.
"Mortgage Note Intercreditor Agreement" means the Amended and Restated
Intercreditor Agreement, dated as of August 30, 2002, by and between the
Collateral Agent and the Mortgage Note Trustee, for itself and on behalf of the
Mortgage Note Holders, and as acknowledged and agreed to by the Borrower.
"Mortgage Note Trustee" means The Bank of New York, a New York banking
- 14 -
corporation, in its capacity as trustee acting for and on behalf of the Mortgage
Note Holders pursuant to the Mortgage Note Agreements, and any replacement or
successor or additional trustee acting for or on behalf of the Mortgage Note
Holders).
"Mortgage Notes" means the 11-1/4% Notes issued by Anchor Glass
Container Corporation before the commencement of the Chapter 11 Case, due April
1, 2005 in the original aggregate principal amount of $150,000,000.
"Multiemployer Plan" means a "multi-employer plan" as defined in
Section 3(37) of ERISA which is or was at any time during the current year or
the immediately preceding six (6) years contributed to by the Borrower or any
ERISA Affiliate.
"Net Cash Proceeds" means, (i) with respect to any Disposition by any
Person or any of its Subsidiaries, the amount of cash received (directly or
indirectly) from time to time (whether as initial consideration or through the
payment or disposition of deferred consideration) by or on behalf of such Person
or such Subsidiary, in connection therewith after deducting therefrom only (A)
the amount of any Indebtedness secured by any Lien permitted on any asset (other
than Indebtedness assumed by the purchaser of such asset) which is required to
be, and is, repaid in connection with such Disposition (other than Indebtedness
under this Agreement), (B) reasonable expenses related thereto incurred by such
Person or such Subsidiary in connection therewith, (C) transfer taxes paid to
any taxing authorities by such Person or such Subsidiary in connection
therewith, and (D) net income taxes to be paid in connection with such
Disposition (after taking into account any tax credits or deductions and any tax
sharing arrangements) and (ii) with respect to the issuance or incurrence of any
Indebtedness by any Person or any of its Subsidiaries, or the sale or issuance
by any Person or any of its Subsidiaries of any shares of its Capital Stock, the
aggregate amount of cash received (directly or indirectly) from time to time
(whether as initial consideration or through the payment or disposition of
deferred consideration) by or on behalf of such Person or such Subsidiary in
connection therewith, after deducting therefrom only (A) reasonable expenses
related thereto incurred by such Person or such Subsidiary in connection
therewith, (B) transfer taxes paid by such Person or such Subsidiary in
connection therewith and (C) net income taxes to be paid in connection therewith
(after taking into account any tax credits or deductions and any tax sharing
arrangements); in each case of clause (i) and (ii) to the extent, but only to
the extent, that the amounts so deducted are (x) actually paid to a Person that,
except in the case of reasonable out-of-pocket expenses, is not an Affiliate of
such Person or any of its Subsidiaries and (y) properly attributable to such
transaction or to the asset that is the subject thereof.
"Net Income" means with respect to any Person, for any period, the
aggregate of the net income (loss) of such Person and its Subsidiaries, on a
consolidated basis, for such period (excluding to the extent included therein
any extraordinary, one-time or non-recurring gains or non-cash losses) after
deducting all charges which should be deducted before arriving at the net income
(loss) for such period and after deducting the Provision for Taxes for such
period, all as determined in accordance with GAAP; provided, that, (a) the net
income of any Person that is not a Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the amount
of dividends or distributions paid or payable to such Person or a wholly-owned
Subsidiary of such Person; (b) the effect of any change in accounting principles
- 15 -
adopted by (or applicable to) such Person or its Subsidiaries after the date
hereof shall be excluded, and (c) the net income (if positive) of any Subsidiary
to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary to such Person or to any other Subsidiary of
such Person is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Subsidiary shall be excluded. For the
purpose of this definition, net income excludes any gain (or non-cash loss)
together with any related Provision for Taxes for such gain (or non-cash loss)
realized upon the sale or other disposition of any assets that are not sold in
the ordinary course of business (including, without limitation, dispositions
pursuant to sale and leaseback transactions) or of any Capital Stock of such
Person or a Subsidiary of such Person.
"Notice of Borrowing" has the meaning specified therefor in Section
2.02(a).
"Participant Register" has the meaning specified therefor in Section
9.07(b)(v).
"Payment Office" means the Agent's office located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other office or offices of the
Agent as may be designated in writing from time to time by the Agent to the
Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PBGC Settlement Agreement" means the agreement, dated as of July 31,
2002 between PBGC and the Borrower regarding treatment of the Borrower's Glass
Companies' Multiemployer Pension Plan.
"PBGC Settlement Agreements" means: (a) the PBGC Settlement Agreement,
(b) the PBGC Warrant, and (c) all agreements, instruments and other documents
issued in connection with any of the foregoing.
"PBGC Warrant" means the Common Stock Purchase Warrant, dated as of
August 30, 2002, issued by the Borrower to the PBGC for the purchase of 474,000
shares of Capital Stock of the Borrower.
"Permitted Holder" means the Persons identified as such on Schedule
1.01(B) hereto.
"Person" means an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.
"Plan of Reorganization" means the Amended Plan of Reorganization of
Anchor Glass Container Corporation, dated June 13, 2002, as confirmed pursuant
to the Confirmation Order in the Chapter 11 Case.
"Pledge Agreement" means the Pledge and Security Agreement made by the
- 16 -
Borrower in favor of the Agent for the benefit of the Lenders, substantially
in the form of Exhibit B, securing the Term Loan Obligations and delivered to
the Agent.
"Post-Default Rate" means 18% per annum.
"Pro Rata Share" means:
(a) with respect to the Lender's obligation to make its portion of
the Term Loan and receive payments of interest, fees, and principal with respect
thereto, the percentage obtained by dividing (i) such Lender's portion of the
Term Loan Commitment by (ii) the Total Term Loan Commitment, provided that if
the Total Term Loan Commitment has been reduced to zero, the numerator shall be
the aggregate unpaid principal amount of such Lender's portion of the Term Loan
and the denominator shall be the aggregate unpaid principal amount of the Term
Loan, and
(b) with respect to all other matters (including, without limitation,
the indemnification obligations arising under Section 8.05), the percentage
obtained by dividing (i) the unpaid principal amount of such Lender's portion
of the Term Loan by (ii) the aggregate unpaid principal amount of the Term Loan.
"Qualified Public Offering" means any bona fide, firm commitment,
underwritten offering to the public by the Borrower of its Capital Stock
pursuant to an effective registration statement under the Securities Act.
"Rating Agencies" has the meaning specified therefor in Section 2.07.
"Register" has the meaning specified therefor in Section 9.07(b)(ii).
"Registered Loan" has the meaning specified therefor in Section
9.07(b)(ii).
"Regulation T", "Regulation U" and "Regulation X" mean, respectively,
Regulations T, U and X of the Board or any successor, as the same may be amended
or supplemented from time to time.
"Required Lenders" means Lenders whose Pro Rata Shares of the Term
Loan aggregate at least 51%
"Revolving Debt" means all obligations, liabilities and indebtedness
of every kind, nature and description owing by the Borrower to the Revolving
Loan Agent and the Revolving Loan Lenders, including principal, interest,
charges, fees, premiums, indemnities, costs and expenses, however evidenced,
whether as principal, surety, endorser, guarantor or otherwise, arising under
the Revolving Loan Lender Agreements.
"Revolving Loan Agent" means Congress, in its capacity as
administrative agent and collateral agent on behalf of Revolving Lenders
pursuant to the terms of the Revolving Loan Agreement and any replacement or
successor agent appointed pursuant to the terms and conditions hereof.
- 17 -
"Revolving Loan Agreement" means the Loan and Security Agreement,
dated as August 30, 2002, by and among the Borrower, the Revolving Loan
Lenders, the Revolving Loan Agent and the other agents named therein.
"Revolving Loan Lenders" means the financial institutions who are
parties from time to time as lenders to the Revolving Loan Agreement as
Lenders.
"Revolving Loan Lender Agreements" means the Revolving Loan Agreement
and all other agreements, instruments and other documents executed and delivered
by the Borrower with, to or in favor of the Revolving Loan Lenders in connection
therewith or related thereto.
"Revolving Loans" means the loans made from time to time by or on
behalf of any Revolving Loan Lender or by the Revolving Loan Agent for the
account of any Revolving Loan Lender on a revolving basis pursuant to the
Revolving Loan Agreement.
"SEC" means the Securities and Exchange Commission or any other
similar or successor agency of the Federal government administering the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect from time to time.
"Securitization" has the meaning specified therefor in Section 2.07.
"Securitization Parties" has the meaning specified therefor in
Section 2.07.
"Security Agreement" means the Security Agreement made by the
Borrower in favor of the Agent for the benefit of the Lenders, substantially in
the form of Exhibit A, securing the Term Loan Obligations and delivered to the
Agent.
"Series C Participating Preferred Stock" means the shares of Capital
Stock issued by the Borrower pursuant to the Certificate of the Designations of
Series C Participating Preferred Stock of the Borrower filed with the Delaware
Secretary of State.
"Shared Collateral" has the meaning specified therefor in the
Mortgage Note Intercreditor Agreement.
"Solvent" means, at any time with respect to any Person, that at such
time such Person (a) is able to pay its debts as they mature and has (and has a
reasonable basis to believe it will continue to have) sufficient capital (and
not unreasonably small capital) to any on its business as conducted and
proposed to be conducted as set forth in the Disclosure Statement relating to
the Plan of Reorganization or otherwise disclosed to the Agent in writing prior
to the date hereof, and (b) the assets and properties of such Person at a fair
valuation (and including as assets for this purpose at a fair valuation all
rights of subrogation, contribution or indemnification arising pursuant to any
guarantees given by such Person) are greater than the Indebtedness of such
Person, and including subordinated and contingent liabilities computed at the
amount which, such Person has a reasonable basis to believe, represents an
amount which
- 18 -
can reasonably be expected to become an actual or matured liability (and
including as to contingent liabilities arising pursuant to any guarantee the
face amount of such liability as reduced to reflect the probability of it
becoming a matured liability).
"Subordinated Indebtedness" means Indebtedness of the Borrower the
terms of which are satisfactory to the Agent and the Required Lenders and which
has been expressly subordinated in right of payment to all Indebtedness of the
Borrower under the Loan Documents (i) by the execution and delivery of a
subordination agreement, in form and substance satisfactory to the Agent and the
Required Lenders, or (ii) otherwise on terms and conditions (including, without
limitation, subordination provisions, payment terms, interest rates, covenants,
remedies, defaults and other material terms) satisfactory to the Agent and the
Required Lenders.
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, limited liability partnership or other limited or
general partnership, trust, association or other business entity of which an
aggregate of at least a majority of the outstanding Capital Stock or other
interests entitled to vote in the election of the board of directors of such
corporation (irrespective of whether, at the time, Capital Stock of any other
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency), managers, trustees or other
controlling persons of such Person is, at the time, directly or indirectly,
owned by such Person and/or one or more subsidiaries of such Person.
"Term Loan" means, the loan made by the Lenders to the Borrower on the
Funding Date pursuant to Article II.
"Term Loan Commitment" means, with respect to each Lender, the Term
Loan Commitment of such Lender to make its portion of the Term Loan to the
Borrower in the amount set forth in Schedule 1.01(A) hereto, as the same may be
terminated or reduced from time to time in accordance with the terms of this
Agreement.
"Term Loan Obligations" means all present and future indebtedness,
obligations, and liabilities of the Borrower to the Agent and the Lenders,
whether or not the right of payment in respect of such claim is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, disputed,
undisputed, legal, equitable, secured, unsecured, and whether or not such claim
is discharged, stayed or otherwise affected by any proceeding referred to in
Section 7.01. Without limiting the generality of the foregoing, the Term Loan
Obligations of the Borrower under the Loan Documents include (a) the obligation
to pay principal, interest, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by such Person under the
Loan Documents, and (b) the obligation of such Person to reimburse any amount in
respect of any of the foregoing that the Agent or any Lender (in its sole
discretion) may elect to pay or advance on behalf of such Person.
"Term Note" means any note issued by the Borrower pursuant to this
Agreement and made payable to the order of a Lender in the principal amount of
the portion of the Term Loan owing to such Lender.
"Total Term Loan Commitment" means the sum of the amounts of the
Lenders'
- 19 -
Term Loan Commitments.
"UCC Filing Authorization Letter" means a letter duly executed by the
Borrower authorizing the Agent to file appropriate financing statements on Form
UCC-1 without the signature of the Borrower in such office or offices as may be
necessary or, in the opinion of the Agent, desirable to perfect the security
interests purported to be created by each Security Agreement and each Pledge
Agreement.
"Uniform Commercial Code" has the meaning specified therefor in
Section 1.03.
"Voting Stock" means, with respect to any Person, (a) one or more
classes of Capital Stock of such Person having general voting powers to elect at
least a majority of the Board of Directors of such Person, irrespective of
whether at the time Capital Stock of any other class or classes have or might
have voting power by reason of the happening of any contingency, and (b) any
Capital Stock of such Person convertible or exchangeable without restriction at
the option of the holder thereof into Capital Stock of such Person described in
clause (a) of this definition.
Section 1.02 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any right or interest in or to assets and properties of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
References in this Agreement to "determination" by the Agent include good faith
estimates by the Agent (in the case of quantitative determinations) and good
faith beliefs by the Agent (in the case of qualitative determinations).
Section 1.03 Accounting and Other Terms. Unless otherwise expressly
provided herein, each accounting term used herein shall have the meaning given
it under GAAP applied on a basis consistent with those used in preparing the
Financial Statements. All terms used in this Agreement which are defined in
Article 8 or Article 9 of the Uniform Commercial Code as in effect from time to
time in the State of New York (the "Uniform Commercial Code") and which are not
otherwise defined herein shall have the same meanings herein as set forth
therein, provided that terms used herein which are defined in the Uniform
Commercial Code as in effect in the State
- 20 -
of New York on the date hereof shall continue to have the same meaning
notwithstanding any replacement or amendment of such statute except as the Agent
may otherwise determine.
Section 1.04 Time References. Unless otherwise indicated herein,
all references to time of day refer to Eastern Standard Time or Eastern daylight
saving time, as in effect in New York City on such day. For purposes of the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding"; provided, however, that with respect to a computation
of fees or interest payable to the Agent, any Lender or the L/C Issuer, such
period shall in any event consist of at least one full day.
ARTICLE II
THE TERM LOAN
Section 2.01 Term Loan Commitments. Subject to the terms and
conditions and relying upon the representations and warranties herein set forth,
each Lender severally agrees to make its portion of the Term Loan to the
Borrower on the Funding Date, in an aggregate principal amount not to exceed the
amount of the Lender's Term Loan Commitment. The aggregate principal amount of
the Term Loan made on the Funding Date shall not exceed the Total Term Loan
Commitment. Any principal amount of the Term Loan which is repaid or prepaid may
not be reborrowed.
Section 2.02 Making the Term Loan. (a) The Borrower shall give the
Agent prior telephonic notice (immediately confirmed in writing, in
substantially the form of Exhibit E hereto (a "Notice of Borrowing")), not later
than 12:00 noon (New York City time) on the Funding Date. Such Notice of
Borrowing shall be irrevocable and shall specify (i) the principal amount of the
Term Loan, (ii) the use of the proceeds of the Term Loan, and (iii) the
borrowing date, which must be the Funding Date. The Agent and the Lender may act
without liability upon the basis of written, telecopied or telephonic notice
believed by the Agent in good faith to be from the Borrower (or from any
Authorized Officer thereof designated in writing purportedly from the Borrower
to the Agent). The Borrower hereby waives the right to dispute the Agent's
record of the terms of any such telephonic Notice of Borrowing. The Agent and
each Lender shall be entitled to rely conclusively on any Authorized Officer's
authority to request the Term Loan on behalf of the Borrower until the Agent
receives written notice to the contrary. None of the Agent and the Lenders shall
have any duty to verify the authenticity of the signature appearing on the
written Notice of Borrowing.
(b) The Notice of Borrowing pursuant to this Section 2.02 shall
be irrevocable and the Borrower shall be bound to make a borrowing in accordance
therewith.
(c) Except as otherwise provided in this subsection 2.02(b), the
Term Loan under this Agreement shall be made by the Lenders proportionately to
their respective Pro Rata Shares of the Total Term Loan Commitment, it being
understood that no Lender shall be responsible for any default by any other
Lender in that other Lender's obligations to make the Term Loan requested
hereunder, nor shall the Commitment of any Lender be increased or decreased as a
- 21 -
result of the default by any other Lender in that other Lender's obligation to
make the Term Loan requested hereunder, and each Lender shall be obligated to
make the Term Loan required to be made by it by the terms of this Agreement
regardless of the failure by any other Lender.
Section 2.03 Repayment of Term Loan; Evidence of Debt. (a) The
outstanding principal of the Term Loan shall be repaid in full on the Final
Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the Borrower to
such Lender resulting from the portion of the Term Loan made by such Lender,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.
(c) The Agent shall maintain accounts in which it shall record
(i) the amount of the Term Loan made hereunder, (ii) the amount of any principal
or interest due and payable or to become due and payable from the Borrower to
each Lender hereunder and (iii) the amount of any sum received by the Agent
hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (c) or (d) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Term Loan in accordance with the terms of this Agreement.
(e) Any Lender may request that the portion of the Term Loan
made by it be evidenced by a promissory note. In such event, the Borrower shall
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) in a form furnished by the Agent and reasonably acceptable to the
Borrower. Thereafter, the Term Loan evidenced by such promissory note and
interest thereon shall at all times (including after assignment pursuant to
Section 9.07) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is
a registered note, to such payee and its registered assigns).
Section 2.04 Interest.
(a) Interest Rate. The Term Loan shall bear interest on the
principal amount thereof from time to time outstanding, from the date of the
Term Loan until such principal amount becomes due, at a rate per annum equal to
14%, provided, that upon the occurrence and during the continuance of an Event
of Default, the principal of, and all accrued and unpaid interest on, the Term
Loan, and all other Term Loan Obligations of the Borrower shall bear interest,
from the date such Event of Default occurred until the date such Event of
Default is cured or waived in writing in accordance herewith, at a rate per
annum equal at all times to the Post-Default Rate.
(b) Interest Payment. Interest on the Term Loan shall be payable
monthly, in arrears, on the first day of each month, commencing on the first day
of the month following the month in which the Term Loan is made and at maturity
(whether upon demand, by
- 22 -
acceleration or otherwise). Interest at the Post-Default Rate shall be payable
on demand.
(c) General. All interest shall be computed on the basis of a
year of 360 days for the actual number of days, including the first day but
excluding the last day, elapsed.
Section 2.05 Reduction of Term Loan Commitment; Prepayment of the
Term Loan.
(a) Reduction of Term Loan Commitment. The Total Term Loan
Commitment shall terminate at 5:00 p.m. (New York City time) on the Funding
Date.
(b) Optional Prepayment. The Borrower may, upon at least five
(5) Business Days' prior written notice to the Agent, the principal of the Term
Loan, in whole or in part. Each prepayment made pursuant to this Section
2.05(b) shall be accompanied by the payment of accrued interest to the date of
such payment on the amount prepaid.
(c) Mandatory Prepayment.
(i) The Borrower will immediately prepay the outstanding
principal amount of the Term Loan in the event that the Revolving Loan
Obligations become due and payable or the Revolving Commitments are terminated
or the Revolving Loan Agreement is terminated.
(ii) Upon any Disposition by the Borrower or its
Subsidiaries, the Borrower shall prepay the outstanding principal amount of the
Term Loan in an amount equal to 100% of the Net Cash Proceeds received by such
Person in connection with such Disposition to the extent that the aggregate
amount of Net Cash Proceeds received by the Borrower and its Subsidiaries (and
not paid to the Agent as a prepayment of the Term Loan) shall not have been
applied to repay or redeem the Mortgage Notes. Nothing contained in this
Subsection 2.05(c)(ii) shall permit the Borrower or any of its Subsidiaries to
make a Disposition of any property that is not otherwise permitted hereunder.
(iii) Upon the issuance or incurrence by the Borrower or
any of its Subsidiaries of any Indebtedness (other than Indebtedness described
in Section 6.02(d)(ii)), or the sale or issuance by the Borrower or any of its
Subsidiaries of any shares of its Capital Stock (other than to the Borrower),
the Borrower shall prepay the outstanding amount of the Term Loan in an amount
equal to 100% of the Net Cash Proceeds received by such Person in connection
therewith. The provisions of this Section 2.05(c)(iii) shall not be deemed to be
implied consent to any such issuance, incurrence or sale that is not otherwise
permitted by the terms and conditions of this Agreement.
(iv) Upon the receipt by the Borrower or any of its
Subsidiaries of any Extraordinary Receipt in an amount in excess of $100,000,
the Borrower shall prepay the outstanding principal of the Term Loan in an
amount equal to 100% of such Extraordinary Receipt, net of any reasonable
expenses incurred in collecting such Extraordinary Receipt.
(d) Interest and Fees. Any prepayment made pursuant to this
Section 2.05
- 23 -
shall be accompanied by accrued interest on the principal amount
being prepaid to the date of prepayment, and if such prepayment would reduce the
amount of the outstanding Term Loan to zero, such prepayment shall be
accompanied by the payment of all fees accrued to such date pursuant to Section
2.06.
(e) Cumulative Prepayments. Except as otherwise expressly
provided in this Section 2.05, payments with respect to any subsection of this
Section 2.05 are in addition to payments made or required to be made under any
other subsection of this Section 2.05.
Section 2.06 Fees.
(a) Closing Fee. On the Funding Date, the Borrower shall pay to
the Agent for the account of the Lenders, in accordance with their Pro Rata
Shares, a non-refundable closing fee equal to $400,000, which shall be due and
deemed fully earned on the Funding Date.
(b) Anniversary Fee. On each anniversary date of the Funding
Date on which the Term Loan Obligations have not been paid in full, the Borrower
shall pay to the Agent for the account of the Lenders, in accordance with their
Pro Rata Shares, a non-refundable anniversary fee equal to $2,000,000, which
shall be due and deemed fully earned on such anniversary of the Funding Date.
(c) Prepayment Fee. In the event that the Borrower prepays all
or any portion of the outstanding principal amount of the Term Loan at any time
during the period from the Funding Date through the date that is 18 months after
the Funding Date, the Borrower shall pay to the Agent for the account of the
Lenders, in accordance with their Pro Rata Shares, a non-refundable prepayment
fee equal to 1.5% of the principal amount prepaid.
Section 2.07 Securitization. The Borrower hereby acknowledge that
the Lenders and their Affiliates may sell or securitize the Term Loan (a
"Securitization") through the pledge of the Term Loan as collateral security for
loans to the Lender or their Affiliates or through the sale of the Term Loan or
the issuance of direct or indirect interests in the Term Loan, which loans to
the Lenders or their Affiliates or direct or indirect interests will be rated by
▇▇▇▇▇'▇, Standard & Poor's or one or more other rating agencies (the "Rating
Agencies"). The Borrower shall cooperate with the Lenders and their Affiliates
to effect the Securitization including, without limitation, by (a) amending this
Agreement and the other Loan Documents, and executing such additional documents,
as reasonably requested by the Lenders in connection with the Securitization,
provided that (i) any such amendment or additional documentation does not impose
material additional costs on the Borrower and (ii) any such amendment or
additional documentation does not materially adversely affect the rights, or
materially increase the obligations, of the Borrower under the Loan Documents or
change or affect in a manner adverse to the Borrower the financial terms of the
Term Loan, (b) providing such information as may be reasonably requested by the
Lenders in connection with the rating of the Term Loan or the Securitization,
and (c) providing in connection with any rating of the Term Loan a certificate
(i) agreeing to indemnify the Lenders and their Affiliates, any of the Rating
Agencies, or any party providing credit support or otherwise participating in
the Securitization (collectively, the "Securitization Parties") for any losses,
claims, damages or liabilities (the "Liabilities") to which
- 24 -
the Lenders, their Affiliates or such Securitization Parties may become subject
insofar as the Liabilities arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any Loan Document
or in any writing delivered by or on behalf of any the Borrower to the Lenders
in connection with any Loan Document or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, and such
indemnity shall survive any transfer by the Lenders or their successors or
assigns of the Term Loan and (ii) agreeing to reimburse the Lenders and their
Affiliates for any legal or other expenses reasonably incurred by such Persons
in connection with defending the Liabilities.
Section 2.08 Taxes. (a) All payments made by the Borrower hereunder
or under any other Loan Document shall be made without set-off, counterclaim,
deduction or other defense. All such payments shall be made free and clear of
and without deduction for any present or future income, franchise, sales, use,
excise, stamp or other taxes, levies, imposts, deductions, charges, fees,
withholdings, restrictions or conditions of any nature now or hereafter imposed,
levied, collected, withheld or assessed by any jurisdiction (whether pursuant to
Federal, state, local or foreign law) or by any political subdivision or taxing
authority thereof or therein, and all interest, penalties or additional amounts,
excluding taxes on the net income of any Lender, or the Agent imposed by the
jurisdiction in which such Lender, or such Agent is organized or any political
subdivision thereof or taxing authority thereof or any jurisdiction in which
such Person's principal office is located or any political subdivision thereof
or taxing authority thereof (such nonexcluded taxes, levies, imposts,
deductions, charges, fees, withholdings, restrictions, conditions, interest,
penalties and additional amounts being hereinafter collectively referred to as
"Taxes"). If the Borrower shall be required to deduct or to withhold any Taxes
from or in respect of any amount payable hereunder or under any other Loan
Document,
(i) the amount so payable shall be increased so that
after making all required deductions and withholdings (including Taxes on
amounts payable pursuant to this sentence) the Lenders or the Agent, as the case
may be, receive an amount equal to the sum they would have received had no such
deduction or withholding been made,
(ii) the Borrower shall make such deduction or
withholding,
(iii) the Borrower shall pay the full amount deducted or
withheld to the relevant taxation authority in accordance with applicable law,
and
(iv) as promptly as possible thereafter, the Borrower
shall send the Lenders and the Agent an official receipt (or, if an official
receipt is not available, such other documentation as shall be satisfactory to
the Lender or the Agent as the case may be) evidencing payment of the amount or
amounts so deducted or withheld. In addition, the Borrower agrees to pay any
present or future taxes, charges or similar levies which arise from any payment
made hereunder or from the execution, delivery, performance, recordation or
filing of, or otherwise with respect to, this Agreement or any other Loan
Document other than the foregoing excluded taxes (hereinafter referred to as
"Other Taxes").
- 25 -
(b) The Borrower hereby indemnifies and agrees to hold the
Lenders and the Agent harmless from and against Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.08) paid by any Lender or the Agent and any
liability (including penalties, interest and expenses for nonpayment, late
payment or otherwise) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted. Such
indemnification shall be paid within 10 days from the date on which any such
Lender or the Agent makes written demand therefor, which demand shall identify
in reasonable detail the nature and amount of such Taxes or Other Taxes.
(c) Each Lender that is organized in a jurisdiction outside the
United States hereby agrees that it shall, no later than the Funding Date or, in
the case of a Lender which becomes a party hereto pursuant to Section 9.07 after
the Funding Date, the date upon which such Lender becomes a party hereto (and
from time to time thereafter upon the reasonable request of the Borrower or the
Agent, but only if such Lender is legally able to do so), deliver to the
Borrower and the Agent either (i) two accurate, complete and signed copies of
either (x) U.S. Internal Revenue Service Form W-8ECI or successor form, or (y)
U.S. Internal Revenue Service Form W-8BEN or successor form, in each case,
indicating that such Lender is on the date of delivery thereof entitled to
receive payments of interest hereunder free from, or subject to a reduced rate
of, withholding of United States Federal income tax or (ii) in the case of such
a Lender that is entitled to claim exemption from withholding of United States
Federal income tax under Section 871(h) or Section 881(c) of the Internal
Revenue Code, (x) a certificate to the effect that such Lender is (A) not a
"bank" within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code,
(B) not a "10 percent shareholder" of the Parent within the meaning of Section
881(c)(3)(B) of the Internal Revenue Code and (C) not a controller foreign
corporation receiving interest from a related person within the meaning of
Section 881(c)(3)(C) of the Internal Revenue Code and (y) two accurate, complete
and signed copies of U.S. Internal Revenue Service Form W-8BEN or successor
form.
(d) If the Borrower fails to perform any of its obligations
under this Section 2.08, the Borrower shall indemnify the Lender and the Agent
for any taxes, interest or penalties that may become payable as a result of any
such failure. The obligations of the Borrower under this Section 2.08 shall
survive the termination of this Agreement and the payment of the Term Loan and
all other amounts payable hereunder.
ARTICLE III
FEES, PAYMENTS AND OTHER COMPENSATION
Section 3.01 Audit and Collateral Monitoring Fees. The Borrower
acknowledges that representatives of the Agent may visit any or all of the
Borrower and/or conduct audits, inspections, valuations and/or field
examinations of any or all of the Borrower at any time and from time to time in
a manner so as to not unduly disrupt the business of the Borrower. The Borrower
agrees to pay (i) $1,500 per day per examiner plus the examiner's out-of-pocket
costs and reasonable expenses incurred in connection with all such visits,
audits, inspections, valuations and field examinations and (ii) the cost of all
visits, audits, inspections, valuations and field examinations conducted by a
third party on behalf of the Agent.
- 26 -
Section 3.02 Payments; Computations and Statements. The Borrower
will make each payment under this Agreement not later than 12:00 noon (New York
City time) on the day when due, in lawful money of the United States of America
and in immediately available funds, to the Agent's Account. All payments
received by the Agent after 12:00 noon (New York City time) on any Business Day
will be credited to the Loan Account on the next succeeding Business Day. All
payments shall be made by the Borrower without set-off, counterclaim, deduction
or other defense to the Agent and the Lenders. Except as provided in Section
2.02, after receipt, the Agent will promptly thereafter cause to be distributed
like funds relating to the payment of principal ratably to the Lenders in
accordance with their Pro Rata Shares and like funds relating to the payment of
any other amount payable to any Lender to such Lender, in each case to be
applied in accordance with the terms of this Agreement, provided that the Agent
will cause to be distributed all interest and fees received from or for the
account of the Borrower not less than once each month and in any event promptly
after receipt thereof. Whenever any payment to be made under any such Loan
Document shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be. All computations of fees shall be made by the Agent on the
basis of a year of 360 days for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such fees are
payable. Each determination by the Agent of an interest rate or fees hereunder
shall be conclusive and binding for all purposes in the absence of manifest
error.
Section 3.03 Sharing of Payments, Etc. Except as provided in Section
2.02, if any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on account of any
Obligation in excess of its ratable share of payments on account of similar
obligations obtained by all the Lenders, such Lender shall forthwith purchase
from the other Lenders such participations in such similar obligations held by
them as shall be necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; provided, however, that if all or any portion
of such excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
of (i) the amount of such Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender of any interest or other amount paid by
the purchasing Lender in respect of the total amount so recovered). The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 3.03 may, to the fullest extent permitted by law,
exercise all of its rights (including the Lender's right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
Section 3.04 Apportionment of Payments. Subject to Section 2.02:
(a) all payments of principal and interest in respect of
outstanding Term Loan all payments of fees (other than the fees set forth in
Section 2.06, and the audit and collateral monitoring fee provided for in
Section 3.01) and all other payments in respect of any other Term Loan
Obligations, shall be allocated by the Agent among such of the Lenders as are
entitled thereto, in proportion to their respective Pro Rata Shares or otherwise
as provided herein or, in
- 27 -
respect of payments not made on account of the Term Loan, as designated by the
Person making payment when the payment is made.
(b) After the occurrence and during the continuance of an Event
of Default, the Agent may, and upon the direction of the Required Lenders shall,
apply all payments in respect of any Term Loan Obligations and all proceeds of
the Collateral, subject to the provisions of this Agreement, (i) first, ratably
to pay the Term Loan Obligations in respect of any fees, expense reimbursements,
indemnities and other amounts then due to the Agent until paid in full; (ii)
second, ratably to pay the Term Loan Obligations in respect of any fees and
indemnities then due to the Term Loan Lenders until paid in full; (iii) third,
ratably to pay interest due in respect of the Term Loan until paid in full; (iv)
fourth, ratably to pay principal of the Term Loan until paid in full, and (v)
fifth, to the ratable payment of all other Term Loan Obligations then due and
payable.
(c) In each instance, so long as no Event of Default has
occurred and is continuing, Section 3.04(b) shall not be deemed to apply to any
payment by the Borrower specified by the Borrower to the Agent to be for the
payment of Term Loan Obligations then due and payable under any provision of
this Agreement or the prepayment of all or part of the principal of the Term
Loan in accordance with the terms and conditions of Section 2.05.
(d) For purposes of Section 3.04(b), "paid in full" with respect
to interest shall include interest accrued after the commencement of any
Insolvency Proceeding irrespective of whether a claim for such interest is
allowable in such Insolvency Proceeding.
(e) In the event of a direct conflict between the priority
provisions of this Section 3.04 and other provisions contained in any other Loan
Document, it is the intention of the parties hereto that both such priority
provisions in such documents shall be read together and construed, to the
fullest extent possible, to be in concert with each other. In the event of any
actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms
and provisions of this Section 3.04 shall control and govern.
Section 3.05 Increased Costs and Reduced Return. If any Lender or
the Agent shall have determined that any Capital Guideline or the adoption or
implementation of, or any change in, any Capital Guideline by the Governmental
Authority charged with the interpretation or administration thereof, or
compliance by any Lender or the Agent or any Person controlling such Lender or
the Agent with any Capital Guideline or with any request or directive of any
such Governmental Authority with respect to any Capital Guideline, or the
implementation of, or any change in, any applicable accounting principles (in
each case, whether or not having the force of law), either (i) affects or would
affect the amount of capital required or expected to be maintained by any Lender
or the Agent or any Person controlling such Lender or the Agent, and any Lender,
the Agent determines that the amount of such capital is increased as a direct or
indirect consequence of the Term Loan made or maintained, any Lender's or the
Agent's or any such other controlling Person's other obligations hereunder, or
(ii) has or would have the effect of reducing the rate of return on any Lender's
or the Agent's any such other controlling Person's capital to a level below that
which such Lender or the Agent or such controlling Person could have achieved
but for such circumstances as a consequence of the Term Loan made or
- 28 -
maintained, or any agreement to make the Term Loan, or such Lender's, the
Agent's or such other controlling Person's other obligations hereunder (in each
case, taking into consideration, such Lender's or the Agent's or such other
controlling Person's policies with respect to capital adequacy), then, upon
demand by any Lender or the Agent, the Borrower shall pay to such Lender or the
Agent from time to time such additional amounts as will compensate such Lender,
the Agent for such cost of maintaining such increased capital or such reduction
in the rate of return on such Lender's or the Agent's or such other controlling
Person's capital. A certificate of such Lender or the Agent claiming
compensation under this Section 3.05, specifying the event herein above
described and the nature of such event shall be submitted by such Lender or the
Agent to the Borrower, setting forth the additional amount due and an
explanation of the calculation thereof, and such Lender's or the Agent's reasons
for invoking the provisions of this Section 3.05, and shall be final and
conclusive absent manifest error.
ARTICLE IV
CONDITIONS TO FUNDING
Section 4.01 Conditions Precedent to the Term Loan. The obligation of
any Lender to make its portion of the Term Loan is subject to the fulfillment in
a manner satisfactory to the Agent of each of the following conditions precedent
on or prior to the Funding Date:
(a) Payment of Fees, Etc. The Borrower shall have paid on or
before the date of this Agreement all fees, costs, expenses and taxes then
payable pursuant to Section 2.06 and Section 9.04.
(b) Representations and Warranties; No Event of Default. The
following statements shall be true and correct: (i) the representations and
warranties contained in Article V and in each other Loan Document, certificate
or other writing delivered to the Agent or any Lender pursuant hereto or thereto
on or prior to the Funding Date are true and correct on and as of the Funding
Date as though made on and as of such date, (ii) the representations and
warranties contained in the Revolving Loan Agreement and each other Revolving
Loan Lender Agreement, certificate or other writing delivered to the Revolving
Loan Agent and any Revolving Loan Lender pursuant thereto on or prior to the
Funding Date are true and correct on and as of the Funding Date as though made
on and as of such Funding Date, and (ii) no Default or Event of Default shall
have occurred and be continuing on the Funding Date or would result from the
consummation on the Funding Date of the transactions contemplated hereby and by
the Plan of Reorganization.
(c) Legality. The making of any portion of the Term Loan shall
not contravene any law, rule or regulation applicable to the Agent or any
Lender.
(d) Revolving Loan Agreement. The Agent shall have received
evidence that (i) the Revolving Credit Agreement is effective and the conditions
precedent in Section 4.01 of the Revolving Loan Agreement have been satisfied
and (ii) the Revolving Loan Lenders are funding the initial Revolving Loans in
an amount not less than $57,000,000.
(e) Series C Participating Preferred Stock. The Agent shall have
received
- 29 -
evidence that (i) 75,000 shares of Series C Participating Preferred Stock have
been issued pursuant to the Certificate of Designations of Series C
Participating Preferred Stock of the Borrower, and the Borrower has received not
less than $75,000,000 in cash as payment therefor.
(f) Common Stock. The Agent shall have received evidence that
(i) 9,000,000 shares of common stock of the Borrower have been issued pursuant
to the charter of the Borrower as in effect on the date hereof, and (ii) the
Borrower has received not less than $5,000,000 in cash as payment therefor.
(g) Delivery of Documents. The Agent shall have received on or
before the Funding Date the following, each in form and substance satisfactory
to the Agent and, unless indicated otherwise, dated the Funding Date:
(i) the Security Agreement, duly executed by the
Borrower;
(ii) the Pledge Agreement, duly executed by the Borrower,
together with the original stock certificates representing all of the common
stock of the Borrower's subsidiaries and all intercompany promissory notes of
the Borrower, accompanied by undated stock powers executed in blank and other
proper instruments of transfer;
(iii) a UCC Filing Authorization Letter, duly executed by
the Borrower, together with appropriate financing statements on Form UCC-1 duly
filed in such office or offices as may be necessary or, in the opinion of the
Agent, desirable to perfect the security interests purported to be created by
each Security Agreement and each Pledge Agreement;
(iv) certified copies of request for copies of information
on Form UCC-11, listing all effective financing statements which name as debtor
the Borrower and which are filed in the offices referred to in paragraph (iii)
above, together with copies of such financing statements, none of which, except
as otherwise agreed in writing by the Agent, shall cover any of the Collateral
and the results of searches for any tax Lien and judgment Lien filed against
such Person or its property, which results, except as otherwise agreed to in
writing by the Agent, shall not show any such Liens;
(v) a copy of the resolutions of the Borrower, certified as
of the Funding Date by an Authorized Officer thereof, authorizing (A) the
borrowings hereunder and the transactions contemplated by the Loan Documents to
which the Borrower is or will be a party, and (B) the execution, delivery and
performance by the Borrower of each Loan Document to which the Borrower is or
will be a party and the execution and delivery of the other documents to be
delivered by such Person in connection herewith and therewith;
(vi) a certificate of an Authorized Officer of the
Borrower, certifying the names and true signatures of the representatives of the
Borrower authorized to sign each Loan Document to which the Borrower is or will
be a party and the other documents to be executed and delivered by the Borrower
in connection herewith and therewith, together with evidence of the incumbency
of such authorized officers;
- 30 -
(vii) a certificate of the appropriate official(s) of the
state of organization and each state of foreign qualification of the Borrower
certifying as to the subsistence in good standing of, and the payment of taxes
by, the Borrower in such states, together with confirmation by telephone or
telegram (where available) on the Funding Date from such official(s) as to such
matters;
(viii) a true and complete copy of the charter of the
Borrower certified as of a recent date by an appropriate official of the state
of organization of such Loan Party which shall set forth the same complete name
of the Borrower as is set forth herein and the organizational number of the
Borrower, if an organized number is issued in such jurisdiction;
(ix) a copy of the charter and by-laws of the Borrower,
together with all amendments thereto, certified as of the Funding Date by an
Authorized Officer of the Borrower;
(x) (A) an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special
counsel to the Borrower, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, P.A., special counsel to the
Borrower, in each case as to such matters as the Agent may reasonably request;
(xi) a certificate of an Authorized Officer of the
Borrower, certifying as to the matters set forth in subsection (b) of this
Section 4.01;
(xii) evidence of the insurance coverage required by this
Agreement and the Security Agreement, in each case, with such endorsements as to
the named insured or loss payees thereunder as the Agent may request and
providing that such policy may be terminated or canceled (by the insurer or the
insured thereunder) only upon 30 days' prior written notice to the Agent and
each such named insured or loss payee, together with evidence of the payment of
all premiums due in respect thereof for such period as the Agent may request;
(xiii) a certificate of an Authorized Officer of the
Borrower, certifying the names and true signatures of the persons that are
authorized to provide Notices of Borrowing, and all other notices under this
Agreement and the other Loan Documents;
(xiv) a Collateral Access Agreement, duly executed by the
Borrower and each other Person designated by the Agent in its reasonable
discretion;
(xv) copies of the Material Contracts as in effect on the
Funding Date, certified as true and correct copies thereof by an Authorized
Officer of the Borrower, together with a certificate of an Authorized Officer of
the Borrower stating that such agreements remain in full force and effect and
that the Borrower has not breached or defaulted in any of its obligations under
such agreements;
(xvi) to the extent requested by the Agent, a termination
and release agreement with respect to any Indebtedness or other obligations and
liens to be satisfied on the Funding Date pursuant to the Plan of
Reorganization, duly executed by the Borrower and the holder of such
Indebtedness or obligation, together with termination statements for all UCC
financing statements naming such Person as secured party and covering any
property of the
- 31 -
Borrower securing such Indebtedness or obligations;
(xvii) a copy of the Confirmation Order as duly entered by
the Bankruptcy Court and entered on the docket of the Clerk of the Bankruptcy
Court in the Chapter 11 Case of the Bankruptcy Court, following due notice to
such creditors and other parties-in-interests as required by the Bankruptcy
Court; and
(xviii) such other agreements, instruments, approvals,
opinions and other documents, each satisfactory to the Agent in form and
substance, as the Agent may reasonably request.
(h) Approvals. All consents, authorizations and approvals of,
and filings and registrations with, and all other actions in respect of, any
Governmental Authority or other Person required in connection with the
consummation of the Plan of Reorganization, the making of the Term Loan or the
conduct of the Borrower's business shall have been obtained and shall be in full
force and effect.
(i) Proceedings; Receipt of Documents. All proceedings in
connection with the making of the Term Loan and the other transactions
contemplated by this Agreement and the other Loan Documents, and all documents
incidental hereto and thereto, shall be satisfactory to the Agent and its
counsel, and the Agent and such counsel shall have received all such information
and such counterpart originals or certified or other copies of such documents as
the Agent or such counsel may reasonably request.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01 Representations and Warranties. The Borrower hereby
represents and warrants to the Agent and the Lenders as follows:
(a) Confirmation Order. The Borrower has delivered to the Agent
a complete and correct copy of the Plan of Reorganization and the Confirmation
Order (including all schedules, exhibits, amendments, supplements,
modifications, assignments and all other documents delivered pursuant thereto or
in connection therewith). The Borrower is not in default in the performance of
or compliance with any provisions of the Plan of Reorganization. The Plan of
Reorganization is in full force and effect as of the date hereof and has not
been terminated, rescinded or withdrawn. The Confirmation Order is a Final Order
and is in full force and effect, and has not been amended, modified or stayed
and no appeal therefrom or request for hearing with respect thereto is pending.
All conditions to confirmation and effectiveness of the Plan of Reorganization
have been satisfied or validly waived pursuant to the Plan of Reorganization
(other than conditions consisting of the effectiveness of this Agreement). No
court of competent jurisdiction has issued any injunction, restraining order or
other order which prohibits consummation of the transactions described in the
Confirmation Order and no governmental or other action or proceeding has been
commenced, seeking any injunction, restraining order or other order which seeks
to void or otherwise modify the transactions described in the Confirmation
- 32 -
Order.
(b) Organization, Good Standing, Etc. The Borrower (i) is a
corporation, limited liability company or limited partnership duly organized,
validly existing and in good standing under the laws of the state or
jurisdiction of its organization, (ii) has all requisite power and authority to
conduct its business as now conducted and as presently contemplated and, in the
case of the Borrower, to make the borrowings hereunder, and to execute and
deliver each Loan Document to which it is a party, and to consummate the
transactions contemplated thereby, and (iii) is duly qualified to do business
and is in good standing in each jurisdiction in which the character of the
properties owned or leased by it or in which the transaction of its business
makes such qualification necessary.
(c) Authorization, Etc. The execution, delivery and performance
by the Borrower of each Loan Document to which it is or will be a party, (i)
have been duly authorized by all necessary action, (ii) do not and will not
contravene its charter or by-laws, its limited liability company or operating
agreement or its certificate of partnership or partnership agreement, as
applicable, or any applicable law or any contractual restriction binding on or
otherwise affecting it or any of its properties, (iii) do not and will not
result in or require the creation of any Lien (other than pursuant to any Loan
Document) upon or with respect to any of its properties, and (iv) do not and
will not result in any default, noncompliance, suspension, revocation,
impairment, forfeiture or nonrenewal of any permit, license, authorization or
approval applicable to its operations or any of its properties.
(d) Governmental Approvals. No authorization or approval or
other action by, and no notice to or filing with, any Governmental Authority is
required in connection with the due execution, delivery and performance by the
Borrower of any Loan Document to which it is or will be a party.
(e) Enforceability of Loan Documents. This Agreement is, and
each other Loan Document to which the Borrower is or will be a party, when
delivered hereunder, will be, a legal, valid and binding obligation of such
Person, enforceable against such Person in accordance with its terms, except as
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws.
(f) Litigation; Commercial Tort Claims. Except as set forth in
Schedule 8.6 to the Information Certificate, (i) there is no pending or, to the
best knowledge of the Borrower, threatened action, suit or proceeding affecting
the Borrower before any court or other Governmental Authority or any arbitrator
that (A) if adversely determined, could have a Material Adverse Effect or (B)
relates to this Agreement or any other Loan Document or any transaction
contemplated hereby or thereby or by the Plan of Reorganization and (ii) as of
the Funding Date, the Borrower does not hold any commercial tort claims in
respect of which a claim has been filed in a court of law or a written notice by
an attorney has been given to a potential defendant.
(g) Financial Condition.
(i) The audited financial statements of the Borrower for
the
- 33 -
fiscal year ended December 31, 2001 and for the fiscal quarters of the
Borrower ended March 31, 2002 and June 30, 2002, respectively, copies of which
have been delivered by the Borrower to the Agent and each Lender, fairly
present, in all material respects, the financial condition of the Borrower as at
the respective dates thereof and the results of operations of the Borrower for
the fiscal periods ended on such respective dates, all in accordance with GAAP,
and since December 31, 2001 no event or development has occurred that has had or
could have a Material Adverse Effect.
(ii) The financial projections, dated August 23, 2002,
copies of which have been delivered by the Borrower to the Agent and each
Lender, have been prepared in good faith by the Borrower, based on assumptions
believed by the Borrower to be reasonable at the time made and upon the best
information then reasonably available to the Borrower, and the Borrower is not
aware of any facts or information that would lead it to believe that such
projections, are incorrect or misleading in any material respect.
(h) Regulations T, U and X. The Borrower is not or will not be
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation T, U or X), and no
proceeds of the Term Loan will be used to purchase or carry any margin stock or
to extend credit to others for the purpose of purchasing or carrying any margin
stock.
(i) Adverse Agreements, Etc. The Borrower is not is a party to
any agreement or instrument, or subject to any charter, limited liability
company agreement, partnership agreement or other corporate, partnership or
limited liability company restriction or any judgment, order, regulation, ruling
or other requirement of a court or other Governmental Authority, which has, or
in the future could have, a Material Adverse Effect.
(j) Use of Proceeds. The proceeds of the Term Loan shall
be used to pay obligations payable on the Funding Date in accordance with the
Confirmation Order and the Plan of Reorganization.
(k) Solvency. After giving effect to the consummation of
transactions contemplated by this Agreement and the Plan of Reorganization to
take place on the Funding Date, the Borrower is Solvent.
(l) Material Contracts. Set forth on Schedule 1.86 to the
Information Certificate is a complete and accurate list as of the Funding Date
of all Material Contracts of the Borrower. Each such Material Contract (i) is
in full force and effect and is binding upon and enforceable against the
Borrower that is a party thereto and, to the best knowledge of the Borrower, all
other parties thereto in accordance with its terms, (ii) has not been otherwise
amended or modified, and (iii) is not in default due to the action of the
Borrower or, to the best knowledge of the Borrower, any other party thereto.
(m) Holding Company and Investment Company Acts. The Borrower
is not (i) a "holding company" or a "subsidiary company" of a "holding company
" or an "affiliate" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of
- 34 -
1935, as amended, or (ii) an "investment company" or an "affiliated person" or
"promoter" of, or "principal underwriter" of or for, an "investment company", as
such terms are defined in the Investment Company Act of 1940, as amended.
(n) Subsidiaries. The Borrower has no Subsidiaries.
(o) Name; Jurisdiction of Organization; Organizational ID
Number; Chief Place of Business; Chief Executive Office; FEIN. The Information
Certificate sets forth a complete and accurate list as of the date hereof of (i)
the exact legal name of the Borrower, (ii) the jurisdiction of organization of
the Borrower, (iii) the organizational identification number of the Borrower (or
indicates that the Borrower has no organizational identification number), (iv)
each place of business of the Borrower, (v) the chief executive office of the
Borrower, (vi) the federal employer identification number of the Borrower and
(vii) all tradenames used by the Borrower.
(p) Locations of Collateral. There is no location at which the
Borrower has any Collateral (except for Inventory in transit) other than those
locations listed on Schedule 5.01(p). Schedule 5.01(p) hereto contains a true,
correct and complete list, as of the Funding Date, of the legal names and
addresses of each warehouse at which Collateral of the Borrower is stored. None
of the receipts received by the Borrower from any warehouse states that the
goods covered thereby are to be delivered to bearer or to the order of a named
Person or to a named Person and such named Person's assigns.
(q) Security Interests. The Security Agreement creates in favor
of the Agent, for the benefit of the Lenders, a legal, valid and enforceable
security interest in the Collateral secured thereby. Upon the filing of the
UCC-1 financing statements described in Section 4.01(e)(iii) and the recording
of the Assignments for Security referred to in each Security Agreement in the
United States Patent and Trademark Office and the United States Copyright
Office, as applicable, such security interests in and Liens on the Collateral
granted thereby shall be perfected security interests, subject as to priority
only to the Liens created pursuant to the Revolving Credit Agreement and the
Mortgage Note Agreements, and no further recordings or filings are or will be
required in connection with the creation, perfection or enforcement of such
security interests and Liens, other than (i) the filing of continuation
statements in accordance with applicable law, (ii) the recording of the
Assignments for Security pursuant to each Security Agreement in the United
States Patent and Trademark Office and the United States Copyright Office, as
applicable, with respect to after-acquired U.S. patent and trademark
applications and registrations and U.S. copyrights and (iii) the recordation of
appropriate evidence of the security interest in the appropriate foreign
registry with respect to all foreign intellectual property.
(r) Representations and Warranties in Revolving Loan Lender
Agreements. All representations and warranties set forth in the Revolving Loan
Agreement and the other Revolving Loan Lender Agreements are true and correct in
all respects at the time as of which such representations were made and on the
Funding Date.
ARTICLE VI
COVENANTS OF THE BORROWER
- 35 -
Section 6.01 Covenants Incorporated by Reference From the Revolving
Loan Agreement. So long as any principal of or interest on the Term Loan or any
other Obligation (whether or not due) shall remain unpaid or any Lender shall
have any Term Loan Commitment hereunder:
Covenants Incorporated by Reference. Sections 7.1 through 7.7, 9.1
through 9.6, 9.13 through 9.16 and 9.18 through 9.21 of the Revolving Loan
Agreement, as in effect on the date hereof and without giving effect to any
amendment, waiver, other modification or termination of the Revolving Loan
Agreement, are incorporated herein by reference as subsections (a) through (u)
of this Section 6.01, together with the defined terms used therein and the
definitions of such terms, and all references in such sections to other sections
or subsections of, or schedules attached to, the Revolving Loan Agreement being
deemed to refer to the corresponding sections or subsections of, or schedules
attached to, this Agreement, provided that any provision of the Revolving Loan
Agreement that is incorporated by reference in this Agreement pursuant to this
Section 6.01 shall be subject to the condition that, as incorporated in this
Agreement, (a) each reference therein to "each Lender", "any Lender", "a
Lender", the "Lenders" or words of similar import shall be deemed to be a
reference to the Lenders hereunder, (b) each reference therein to "each Agent",
"any Agent", "an Agent", the "Agent" or words of similar import shall be deemed
to be a reference to the Agent hereunder, (c) each reference therein to the
"Commitment" or "Commitments" shall be deemed to be a reference to the Term Loan
Commitments hereunder, (d) each reference to "this Agreement" or words of
similar import shall be deemed to be a reference to this Agreement, (e) each
reference to "Loans" or words of similar import shall be deemed a reference to
the Term Loan hereunder, (f) each reference to "Default" or "Event of "Default"
or words of similar import shall be deemed to be a reference to a Default or an
Event of Default, respectively, under this Agreement and (g) the projections
referred to in Section 9.6(b) of the Revolving Loan Agreement shall present the
projected financial information therein on a monthly basis.
Section 6.02 Additional Affirmative and Negative Covenants. So long
as any principal of or interest on the Term Loan or any other Term Loan
Obligation (whether or not due) shall remain unpaid or any Lender shall have a
Term Loan Commitment hereunder, unless the Required Lenders shall otherwise
consent in writing:
(a) Additional Collateral Security. The Borrower shall, to the
extent not prohibited by the terms of the Revolving Loan Agreement or the
Mortgage Note Agreement, cause:
(i) each Subsidiary of the Borrower not in existence on
the Funding Date, to execute and deliver to the Agent promptly and in any event
within three days after the formation, acquisition or change in status thereof
(A) a guaranty guaranteeing the Term Loan Obligations, (B) a security agreement
providing for security interests in substantially all of such Subsidiary's
assets, (C) if such Subsidiary has any Subsidiaries, a pledge agreement
providing for a security interest in all shares of such Capital Stock, in each
case in form and substance reasonably satisfactory to the Required Lenders,
together with (x) a UCC Filing Authorization Letter, duly executed by such
Subsidiary, (y) certificates evidencing all of the Capital Stock of any Person
owned by such Subsidiary and (z) undated stock powers executed in
- 36 -
blank with signature guaranteed, (D) such other agreements, instruments,
approvals, legal opinions or other documents requested by the Agent in order to
create, perfect or otherwise protect any Lien purported to be covered by any
such security agreement or pledge agreement or otherwise to effect the intent
that such Subsidiary shall become bound by all of the terms, convenants and
agreements contained in the Loan Documents and that all property and assets of
such Subsidiary shall become Collateral for the Term Loan Obligations; and
(ii) each owner of the Capital Stock of any such
Subsidiary to execute and deliver promptly and in any event within three days
after the formation or acquisition of such Subsidiary a pledge agreement, in
form and substance satisfactory to the Agent, together with (A) certificates
evidencing all of the Capital Stock of such Subsidiary, (B) undated stock powers
or other appropriate instruments of assignment executed in blank with signature
guaranteed, (C) such opinion of counsel and such approving certificate of such
Subsidiary as the Agent may reasonably request in respect of complying with any
legend on any such certificate or any other matter relating to such shares and
(D) such other agreements, instruments, approvals, legal opinions or other
documents requested by the Agent.
(b) Sale of Assets, Consolidation, Merger, Dissolution, Etc. The
Borrower shall not, and shall not permit any Subsidiary of the Borrower to,
directly or indirectly,
(i) merge into or with or consolidate with any other
Person or permit any other Person to merge into or with or consolidate with it,
except that a Subsidiary of the Borrower may merge into or with or consolidate
with the Borrower or a wholly-owned domestic Subsidiary of the Borrower,
provided, that, each of the following conditions is satisfied as determined by
the Agent: (A) the Agent shall have received not less than ten (10) Business
Days' prior written notice of the intention of the Borrower to so merge or
consolidate, and such information with respect thereto as the Agent may
reasonably request, (B) as of the effective date of such merger or consolidation
and after giving effect thereto, no Event of Default shall exist or have
occurred, (C) the Agent shall have received true, correct and complete copies of
all agreements, instruments and other documents relating to such merger,
including, but not limited to, the certificate or certificates of merger as
filed with each appropriate Secretary of State, (D) the Borrower or such
wholly-owned domestic Subsidiary shall be the surviving entity and shall
immediately upon the effectiveness of the merger expressly confirm in writing
pursuant to an agreement, in form and substance satisfactory to the Agent, its
continuing liability in respect of the Term Loan Obligations and the Loan
Documents to which it is a party and execute and deliver such other agreements,
instruments and other documents and instruments as the Agent may reasonably
request in connection therewith, (E) any Guarantor shall ratify and confirm that
its guarantee of the Term Loan Obligations shall apply to the Term Loan
Obligations as assumed by such surviving entity and ratify and confirm any other
agreements by such Obligors in favor of the Agent, and (F) the surviving entity
shall not become obligated with respect to any Indebtedness, nor any of its
property become subject to any lien, unless the Borrower could incur such
Indebtedness or create such lien hereunder;
(ii) sell, issue, assign, lease, license, transfer,
abandon or otherwise dispose of any Capital Stock or Indebtedness to any other
Person or any of its assts to any other Person, except for:
- 37 -
(A) sales of Inventory in the ordinary course of
business,
(B) the sale or other Disposition of Equipment
(including worn-out or obsolete Equipment or Equipment no longer used or useful
in the business of the Borrower) or other assets (other than any Collateral) no
longer used in the conduct of its business so long as such sales or other
Dispositions do not involve Equipment or such other assets (other than any
Collateral) having an aggregate fair market value in excess of $3,000,000 for
all such Equipment or other assets (other than Collateral) disposed of in any
fiscal year of the Borrower and the Net Cash Proceeds of such sale or other
Disposition are applied in accordance with Section 2.05,
(C) sales or other Dispositions by the Borrower of
assets or properties consisting of the Mortgage Note Collateral; provided, that,
as to each and all such sales or Dispositions, (1) the Agent shall have received
not less than ten (10) Business Days' prior written notice of such sale or
Disposition, and such other information with respect thereto as the Agent may
reasonably request, (2) such sale or Disposition is consummated in accordance
with the terms and conditions of the Mortgage Note Agreements and the Mortgage
Note Intercreditor Agreement, and (3) the Net Cash Proceeds of such sale or
other Disposition are applied in accordance with Section 2.05;
(D) the issuance or sale of Capital Stock by the
Borrower or any Subsidiary of the Borrower after the date hereof or as sales or
issuances of Capital Stock issued by Subsidiaries formed or acquired to the
extent permitted hereby; provided, that (1) in the case of any such sale or
issuance of Capital Stock of a Subsidiary or, if an Event of Default has
occurred and is continuing, any issuance of Capital Stock of the Borrower, the
Agent shall have received not less than ten (10) Business Days' prior written
notice of such issuance and sale, which notice shall specify the parties to whom
such shares are to be sold, the terms of such sale, the total amount which it is
anticipated will be realized from the issuance and sale of such stock and the
net cash proceeds which it is anticipated will be received by the Borrower from
such sale, (2) the Borrower shall not be required to pay any cash dividends or
repurchase or redeem such Capital Stock or make any other payments in respect
thereof prior to March 31, 2005, except as otherwise permitted by Section
6.02(f), (3) the terms of Capital Stock, and the terms and conditions of the
purchase and sale thereof, shall not include any terms that are more restrictive
or burdensome to the Borrower than the terms of any Capital Stock of the
Borrower in effect on the date hereof, (4) in the case of any such sale or
issuance of Capital Stock of a Subsidiary or, if an Event of Default has
occurred and is continuing, any issuance of Capital Stock of the Borrower, after
giving effect to such issuance or sale, no Event of Default shall exist or have
occurred and be continuing and (5) the Net Cash Proceeds of such sale or other
Disposition are applied in accordance with Section 2.05;
(E) (1) the issuance of Capital Stock of the Borrower
consisting of common stock (and options therefor) in accordance with the terms
and conditions of the Plan of Reorganization as in effect on the date hereof and
the Confirmation Order as in effect on the date hereof. (2) the issuance of the
PBGC Warrant and the Series C Participating Preferred Stock in accordance with
the terms and conditions of the Plan of Reorganization as in effect on the date
hereof and the Confirmation Order as in effect on the date hereof, (3) the
- 38 -
issuance of Capital Stock of the Borrower consisting of common stock pursuant to
the exercise of options therefor that have been issued pursuant to the Plan of
Reorganization as in effect on the date hereof or pursuant to the exercise of
its PBGC Warrant as in effect on the date hereof and (4) the issuance of Capital
Stock to qualify directors to the extent required by applicable law in the
ordinary course:
(F) the issuance of Capital Stock of the Borrower
consisting of common stock pursuant to an employee stock option or grant or
similar equity plan or 401(k) plans of the Borrower for the benefit of its
employees, directors and consultants;
(G) the deposit of $450,000 on the date hereof in an
escrow fund pursuant to which the Borrower becomes a contributing member of the
GMP Multiemplover Plan in accordance with the terms and conditions of the Plan
of Reorganization as in effect on the date hereof and the Confirmation Order as
in effect on the date hereof,
(H) the licensing by the Borrower or a Subsidiary of
the Borrower of Intellectual Property owned by it to another Person: provided,
that, as to any such license: (1) the transaction with respect to such license
is an arm's length transaction in the ordinary course of business of the
Borrower or such Subsidiary, (2) the Borrower or such Subsidiary receives at
least fair market value with respect to the value of such license as determined
by the Borrower in good faith, and (3) any rights of the Borrower or such
Subsidiary shall be subject to the rights of the Agent in such Intellectual
Property, including, without limitation, the rights of the Agent to use such
Intellectual Property in connection with the exercise of the Agent's rights and
remedies with respect to the Collateral;
(I) Investments permitted by Section 6.02(e);
(J) sale and leaseback transactions with respect to
Equipment, real property or other assets not constituting Collateral so long as
the following conditions shall have been satisfied, (1) the Agent shall have
received not less than ten (10) Business Days' prior written notice of such sale
or leaseback and such other information with respect thereto as the Agent may
reasonably request, (2) after giving effect to such transaction no Default or
Event of Default has occurred and is continuing, (3) such transaction is an
arm's length transaction and the Borrower or such Subsidiary, as the case may
be, receives at least fair market value, as determined in good faith by the
Borrower, in connection with such transaction and (4) the Agent shall have
received, in form and substance satisfactory to the Agent, a Collateral Access
Agreement with respect to such Equipment, real property or other assets and (5)
the Net Cash Proceeds of such transaction are applied in accordance with Section
2.05;
(K) discounts, settlement or compromise of
Indebtedness evidenced by the Pabst Notes to the extent permitted by Section
6.02(s);
(iii) form or acquire any Subsidiaries, except, that, the
Borrower may form or acquire Subsidiaries (to the extent permitted by subsection
(i) above and Section 6.02(e)) after the date hereof; provided, that (A) as of
the date of such formation or acquisition, and after giving effect thereto or
otherwise, no Default or Event of Default shall have occurred
- 39 -
and be continuing,(B) such Subsidiary shall be incorporated in a State of the
United States, (C) upon such formation or acquisition, the Borrower shall comply
with Section 6.02(a) with respect to such Subsidiary and (D) the amount of the
investment by the Borrower in the Capital Stock of such Subsidiary and any other
amounts paid by the Borrower, to or in connection with the formation or
acquisition of such Subsidiary shall not exceed the amount permitted under
Section 6.02(e);
(iv) wind up, liquidate or dissolve, except that any
Subsidiary of the Borrower (other than a Guarantor) may wind up. liquidate and
dissolve so long as, each of the following conditions is satisfied, (A) such
winding up, liquidation or dissolution shall be done in accordance with the
requirements of all applicable laws and regulations, (B) effective upon such
winding up, liquidation or dissolution, all of the assets and properties of such
Subsidiary shall be duly and validly transferred and assigned to its
shareholders or its creditors, (C) upon the request of the Agent, the Borrower
shall deliver to the Agent all agreements, instruments and other documents that
the Borrower or any Subsidiary of the Borrower has filed with any Governmental
Authority or as are otherwise required to effectuate such winding up,
liquidation or dissolution, (D) the Borrower or such Subsidiary, as the case may
be, shall not acquire any material liabilities not otherwise permitted hereby as
a result of such winding up, liquidation or dissolution, (E) the Agent shall
have received not less than ten (10) Business Days prior written notice of the
intention of such Subsidiary to wind up, liquidate or dissolve, and (F) as of
the date of such winding up, liquidation or dissolution and after giving effect
thereto, no Default or Event of Default shall exist or have occurred; or
(v) agree to do any of the foregoing provided that any of
the Borrower and its Subsidiaries may enter into agreements to effectuate any
transaction otherwise prohibited by this Section 6.02(b) so long as (i)
concurrently with the execution and delivery of any such agreement, the Borrower
shall provide the Agent notice thereof and (ii) the consummation of any such
agreement is conditioned upon obtaining the consent of the Required Lenders or
the repayment in full of the Term Loan Obligations in accordance with its terms
hereof.
(c) Encumbrances. The Borrower shall not, and shall not
permit any Subsidiary of the Borrower to, create, incur, assume or suffer to
exist any security interest, mortgage, pledge, lien, charge or other encumbrance
of any nature whatsoever on any of its assets or properties, including the
Collateral, except:
(i) the security interests and liens of the Agent for
itself and the benefit of the Lenders;
(ii) liens securing the payment of taxes,
assessments or other governmental charges or levies either not yet overdue or
the validity of which are being contested in good faith by appropriate
proceedings diligently pursued and available to the Borrower or any Subsidiary
of the Borrower, as the case may be, and with respect to which adequate reserves
have been set aside on its books;
(iii) non-consensual statutory liens (other than liens
securing the
- 40 -
payment of taxes) arising in the ordinary course of the Borrower 's or such
Subsidiary's business to the extent: (A) such liens secure Indebtedness which is
not overdue or does not exceed $250,000 at any one time outstanding, or (B) such
liens secure Indebtedness or other obligations relating to claims or liabilities
which are fully insured and being defended at the sole cost and expense and at
the sole risk of the insurer or being contested in good faith by appropriate
proceedings diligently pursued and available to the Borrower or such Subsidiary,
in each case prior to the commencement of foreclosure or other similar
proceedings and with respect to which adequate reserves have been set aside on
its books;
(iv) zoning restrictions, easements, licenses, covenants
and other restrictions affecting the use of real property which do not interfere
in any material respect with the use of such Real Property or ordinary conduct
of the business of the Borrower or such Subsidiary as presently conducted
thereon or materially impair the value of the Real Property which may be subject
thereto;
(v) purchase money security interests in Equipment
(including Capital Leases) and purchase money mortgages on Real Property to
secure Indebtedness permitted under Section 6.02(d)(ii);
(vi) liens and security interests of the Equipment Lender
to secure the Indebtedness arising in connection with the Equipment Financing to
the extent permitted by Section 6.02(d)(vi) (including precautionary UCC
financing statements in connection therewith);
(vii) pledges and deposits of cash after the date hereof in
the ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security benefits consistent
with the current practices of the Borrower as of the date hereof;
(viii) pledges and deposits of cash after the date hereof to
secure the performance of tenders, bids, leases, trade contracts (other than for
the repayment of Indebtedness), statutory obligations and other similar
obligations in each case in the ordinary course of business consistent with the
current practices of the Borrower as of the date hereof;
(ix) liens arising from (A) operating leases and the
precautionary UCC financing statement filings in respect thereof, and (B)
equipment or other materials which are not owned by the Borrower or a Subsidiary
of the Borrower but are located on the premises of the Borrower or a Subsidiary
of the Borrower (but not in connection with, or as part of, the financing
thereof) from time to time in the ordinary course of business and consistent
with current practices of the Borrower and the precautionary UCC financing
statement filings thereof;
(x) the security interests in and mortgages and liens
upon the Mortgage Note Collateral and the Shared Collateral in favor of Mortgage
Note Trustee to secure the Mortgage Note Debt to the extent permitted hereunder;
provided, that, such security interests in and mortgages and liens upon Mortgage
Note Trustee are and shall at all times extend to and
- 41 -
include the Mortgage Note Collateral and the Shared Collateral (and not any of
the Collateral) as set forth in the Mortgage Note Intercreditor Agreement;
(xi) the security interests in and mortgages and liens
upon the Collateral and the Shared Collateral of the Revolving Loan Agent to
secure the Revolving Loan Debt to the extent permitted hereunder; provided,
that, such security interests in and mortgages and liens upon the Collateral and
Shared Collateral of Revolving Loan Agent are and shall at all times be subject
to the terms of the Mortgage Note Intercreditor Agreement and the Collateral
Agency Agreement;
(xii) judgments and other similar liens arising in
connection with court proceedings that do not constitute an Event of Default;
provided, that, (A) such liens are being contested in good faith and by
appropriate proceedings diligently pursued, (B) adequate reserves or other
appropriate provision, if any, as are required by GAAP have been made therefor,
and (C) a stay of enforcement of any such liens is in effect;
(xiii) leases or subleases of equipment, real property or
other property (not including Collateral) granted to other Persons in the
ordinary course of business by the Borrower or a Subsidiary of the Borrower so
long as (A) the Agent shall have received not less than ten (10) Business Days'
prior written notice of such lease or sublease, and such other information with
respect thereto as the Agent may reasonably request, and (B) the Agent shall
have received, in form and substance satisfactory to the Agent, a Collateral
Access Agreement:
(xiv) security interests, liens and mortgages existing on
property or assets (other than Collateral) acquired pursuant to an acquisition
permitted by Section 6.02(e) or on property or assets (other than any
Collateral) of a Person in existence at the time such Person becomes a
Subsidiary of the Borrower pursuant to an acquisition permitted by Section
6.02(e), provided, that, (i) any Indebtedness that is secured by any such
security interests or liens is otherwise permitted by Section 6.02(d), (ii) such
security interests and liens are not incurred in connection with. or in
contemplation of, any such acquisition, and do not attach to any Collateral or
any asset of the Borrower or any of its Subsidiaries, other than the property or
assets (or the property or assets of the Person) being so acquired (but in any
event not any Collateral) after giving effect to such acquisition, and (iii) the
Borrower shall have used its reasonable best efforts to cause to be delivered to
the Agent, in form and substance satisfactory to the Agent, a Collateral Access
Agreement, duly authorized, executed and delivered by the holder of any such
security interest or lien; and
(xv) the security interests and liens set forth on
Schedule 8.4 to the Information Certificate.
(d) Indebtedness. The Borrower shall not, and shall not permit
any Subsidiary of the Borrower to, incur, create, assume, become or be liable in
any manner with respect to, or permit to exist, any Indebtedness, or guarantee,
assume, endorse, or otherwise become responsible for (directly or indirectly),
the Indebtedness, performance, obligations or dividends of any other Person,
except:
- 42 -
(i) the Term Loan Obligations;
(ii) purchase money Indebtedness (including Capital
Leases) arising after the date hereof to the extent secured by purchase money
security interests in Equipment (including Capital Leases) and purchase money
mortgages on real property not to exceed $15,000,000 in the aggregate at any
time outstanding so long as such security interests and mortgages do not apply
to any property of the Borrower or any Subsidiary of the Borrower other than the
Equipment or real property so acquired, and the Indebtedness secured thereby
does not exceed the cost of the Equipment or real property so acquired, as the
case may be;
(iii) unsecured Indebtedness of the Borrower arising after
the date hereof to any third person; provided, that, each of the following
conditions is satisfied as determined by the Agent: (A) such Indebtedness shall
be on terms and conditions acceptable to the Agent and the Lenders and shall be
subject and subordinate in right of payment to the right of the Agent and the
Lenders to receive the prior indefeasible payment and satisfaction of all of the
Term Loan Obligations pursuant to the terms of a subordination agreement between
the Agent and such third party, in form and substance satisfactory to the Agent
its good faith judgment, (B) the Agent shall have received not less than ten
(10) days prior written notice of the intention of the Borrower to incur such
Indebtedness, which notice shall set forth in reasonable detail satisfactory to
the Agent the amount of such Indebtedness, the person or persons to whom such
Indebtedness will be owed, the interest rate, the schedule of repayments and
maturity date with respect thereto and such other information as the Agent may
request with respect thereto, (C) promptly upon request by the Agent, the Agent
shall have received true, correct and complete copies of all agreements,
documents and instruments evidencing or otherwise related to such Indebtedness,
(D) all of the proceeds of such Indebtedness shall be paid to the Agent for
application to the Term Loan Obligations in accordance with Section 2.05 and (E)
after giving effect thereto, no Default or Event of Default shall exist;
(iv) Indebtedness of the Borrower to the Revolving Loan
Agent and Revolving Loan Lenders evidenced by or arising under the Revolving
Loan Agreement and other Revolving Loan Lender Agreements (as in effect on the
date hereof); provided, that the principal amount of such Indebtedness shall not
exceed the lesser of $110,000,000 (reduced by any permanent reduction of the
commitments thereunder) and 110% of Availability thereunder;
(v) Indebtedness of the Borrower to the Mortgage Note
Trustee and the Mortgage Note Holders evidenced by or arising under the Mortgage
Notes and the other Mortgage Note Agreements (as in effect on the date hereof);
provided, that the principal amount of such Indebtedness shall not exceed
$150,000,000, less the aggregate amount of all repayments, repurchases or
redemptions thereof, whether optional or mandatory, plus interest thereon at the
rate provided in the Mortgage Notes as in effect on the date hereof;
(vi) the Indebtedness set forth on Schedule 9.9 to the
Information Certificate in accordance with the terms of such Indebtedness in
effect on the Funding Date;
(vii) Indebtedness with respect to surety bonds, appeal
bonds or
- 43 -
like instruments acquired in the ordinary course of business or in
connection with the enforcement of rights or claims of the Borrower or any of
its Subsidiaries or in connection with judgments that do not result in a Default
or an Event of Default provided. that. the aggregate outstanding amount of all
such surety bonds, appeal bonds and like instruments permitted by this clause
(i) shall not at any time exceed $500,000;
(viii) Indebtedness under Hedge Agreements on terms
acceptable to the Agent; and
(ix) intercompany Indebtedness among the Borrower and its
Subsidiaries to the extent permitted by Section 6.02(e).
(e) Loans, Investments, Etc. The Borrower shall not, and shall
not permit any Subsidiary of the Borrower to, directly or indirectly, make any
loans or advance money or property to any Person, or invest in (by capital
contribution or otherwise) or purchase or repurchase the Capital Stock or
Indebtedness or all or a substantial part of the assets or property of any
Person, or form or acquire any Subsidiaries, or agree to do any of the
foregoing, except:
(i) the endorsement of instruments for collection or
deposit in the ordinary course of business;
(ii) investments in cash or Cash Equivalents;
(iii) loans and advances by the Borrower or any Subsidiary
of the Borrower to officers, directors and other employees not to exceed the
principal amount of $100,000 in the aggregate at any time outstanding for: (A)
reasonably and necessary work-related travel or other ordinary business expenses
to be incurred by such employee in connection with their work for the Borrower
or such Subsidiary, as the case may be, and (B) reasonable and necessary
relocation expenses of such employees (including home mortgage financing for
relocated employees);
(iv) stock or obligations issued to the Borrower or any
Subsidiary of the Borrower by any Person (or the representative of such Person)
in respect of Indebtedness of such Person owing to the Borrower or such
Subsidiary in connection with the insolvency, bankruptcy, receivership or
reorganization of such Person or a composition or readjustment of the debts of
such Person; provided, that, the original of any such stock or instrument
evidencing such obligations shall be promptly delivered to the Revolving Credit
Agent or the Agent, together with such stock power, assignment or endorsement by
the Borrower as the Revolving Credit Agent or the Agent may request;
(v) obligations of account debtors arising from Accounts
which are past due evidenced by a promissory note made by such account debtor
payable to the Borrower or any Subsidiary of the Borrower; provided, that,
promptly upon the receipt of the original of any such promissory note by the
Borrower or such Subsidiary, such promissory note shall be endorsed to the order
of the Revolving Credit Agent or the Agent and promptly delivered to the
Revolving Credit Agent or the Agent, as applicable, as so endorsed;
- 44 -
(vi) loans of money or property (other than Collateral)
after the date hereof by the Borrower or any Subsidiary of the Borrower to any
Person other than an existing Affiliate of the Borrower as of the date hereof or
investments after the date hereof by the Borrower or any Subsidiary of the
Borrower by capital contribution in any Person other than an existing Affiliate
of the Borrower as of the date hereof, that is or thereupon becomes a Subsidiary
of the Borrower or the formation or acquisition after the date hereof of any
Subsidiary of the Borrower organized under the laws of a State of the United
States after the date hereof, provided, that, as to any such loans or
investments, or the formation or acquisition of any such Subsidiary, each of the
following conditions shall be satisfied;
(A) as of the date of any such loan or investment, or
the formation or acquisition of such Subsidiary or any payments in connection
with the formation or acquisition of such Subsidiary, and in each case after
giving effect thereto, no Default or Event of Default shall exist or have
occurred and be continuing,
(B) as of the date of any such loan or investment, or
the formation or acquisition of such Subsidiary or any payments in connection
with the formation or acquisition of such Subsidiary, and in each case after
giving effect thereto, the aggregate amount of the Excess Availability shall
have been not less than $10,000,000 for each of the immediately preceding thirty
(30) consecutive days and as of the date of any such loan or investment or
formation or acquisition or any payment in connection therewith and after giving
effect thereto, the aggregate amount of the Excess Availability shall be not
less than $10,000,000,
(C) the Person receiving such loan or investment or
the Subsidiary formed or acquired, as the case may be, shall be engaged in a
business related, ancillary or complimentary to the business of the Borrower
permitted in this Agreement,
(D) in the case of loans, the Indebtedness of such
Person to the Borrower or a Subsidiary of the Borrower arising pursuant to such
loan, if evidenced by a note shall be evidenced by a single original promissory
note issued by such Person payable to the Borrower or such Subsidiary, which
shall evidence a valid and legally enforceable Indebtedness of Person to the
Borrower or such Subsidiary that is, unless such note is made by a Subsidiary,
unconditionally owing to the Borrower or such Subsidiary, without offset,
defense or counterclaim of any kind, nature or description whatsoever, and the
original of such promissory note issued by such Person to the Borrower or such
Subsidiary shall be delivered to, and held by, the Agent as part of the
Collateral, accompanied by such instruments of transfer or assignment duly
executed in blank as the Agent may specify,
(E) the Agent shall have received (1) not less than
ten (10) Business Days' prior written notice thereof setting forth in reasonable
detail the nature and terms thereof, (2) true, correct and complete copies of
all agreements, documents and instruments relating thereto and (3) such other
information with respect thereto as the Agent may reasonably request, and
(F) the aggregate amount of all such loans,
investments, acquisitions or payments shall not in any 12 month period exceed
$5,000,000.
- 45 -
(vii) investments consisting of non-cash consideration
received by the Borrower or any of its Subsidiaries in connection with any asset
sale to the extent permitted by Section 6.02(a);
(viii) Hedge Agreements to the extent permitted by Section
6.02(d); and
(ix) intercompany loans and advances between or among the
Borrower and its Subsidiaries to the extent permitted hereby.
(f) Dividends and Redemptions. The Borrower shall not, directly
or indirectly, declare or pay any dividends on account of any shares of class of
any Capital Stock of the Borrower now or hereafter outstanding, or set aside or
otherwise deposit or invest any sums for such purpose, or redeem, retire,
defease, purchase or otherwise acquire any shares of any class of Capital Stock
(or set aside or otherwise deposit or invest any sums for such purpose) for any
consideration or apply or set apart any sum, or make any other distribution (by
reduction of capital or otherwise) in respect of any such shares or agree to do
or agree to do any of the foregoing, or permit any of its Subsidiaries to do any
of the foregoing, except that: (i) the Borrower and each Subsidiary of the
Borrower may declare and pay such dividends or redeem, retire, defease, purchase
or otherwise acquire any shares of any class of Capital Stock for consideration
in the form of shares of common stock so long as after giving effect thereto no
Change of Control or other Default or Event of Default shall exist or occur and
such dividend, redemption, or repurchase shall not violate any law or regulation
or the terms of any indenture, agreement or undertaking to which the Borrower or
such Subsidiary or its property is bound;
(ii) any Subsidiary of the Borrower may declare and pay
dividends with respect to any class of Capital Stock, in cash or other property
(other than property in or on which the Agent has a security interest or other
lien), to the Borrower or any Subsidiary of the Borrower or to any other Person
that holds such class of Capital Stock, so long as (A) any such dividends are
paid using funds other than proceeds of Collateral, (B) any such dividends are
paid ratably to the holders of such Capital Stock, (C) as of the date of and
after giving effect to the declaration and payment of such dividend, no Default
or Event of Default shall exist or have occurred and be continuing, (D) any such
dividends will not violate any law or regulation or the terms of any indenture,
agreement or undertaking to which such Subsidiary or its property is bound, (E)
any such dividends shall be paid out of legally available funds therefor; and
(F) as to any such dividends by any such Subsidiaries that are not wholly-owned
Subsidiaries of the Borrower, the aggregate amount of all such dividends that
may be paid to the holders of any such Capital Stock of such Subsidiary other
than the Borrower or a Subsidiary of the Borrower may not exceed $250,000 in the
aggregate.
(g) Transactions with Affiliates. The Borrower shall not, and
shall not permit any Subsidiary of the Borrower to, directly or indirectly:
(i) purchase, acquire or lease any property from, or
sell, transfer or lease any property to, or enter into any transaction with, any
officer, director or other Affiliate of the Borrower or of such Subsidiary,
except in the ordinary course of and pursuant to
- 46 -
the reasonable requirements of the Borrower's or such Subsidiary's business (as
the case may be) and upon fair and reasonable terms no less favorable to the
Borrower or to such Subsidiary than the Borrower or such Subsidiary, as the case
may be, would obtain in a comparable arm's length transaction with an
unaffiliated person; or
(ii) make any payments (whether by dividend, loan or
otherwise) of management, consulting or other fees for management or similar
services, or of any Indebtedness owing to any officer, employee, shareholder,
director or any other Affiliate of the Borrower or such Subsidiary, except (A)
reasonable compensation to officers, employees and directors for services
rendered to the Borrower or such Subsidiary in the ordinary course of business
and loans or advances to the extent permitted by Section 6.02(e), (B) the
transactions contemplated by the Loan Documents, (C) the declaration and payment
of dividends to the extent permitted by Section 2.06(f),(D) transactions by or
among the Borrower and its Subsidiaries, (E) issuance of stock options to the
extent permitted by Section 6.02(a) and (F) payments to former shareholders of
the Borrower in accordance with the Ghaznavi Settlement Documents (as defined in
the Revolving Loan Agreement) as in effect on the date hereof.
(h) Modifications of Indebtedness, Organizational Documents and
Certain Other Agreements; Etc. (i) The Borrower will not, and will not permit
any Subsidiary of the Borrower to, amend, modify or otherwise change (or permit
the amendment, modification or other change in any manner of) the Revolving Loan
Agreement or any of the other Revolving Loan Lender Agreements or any the
provisions of any of its or its Subsidiaries' Indebtedness or of any instrument
or agreement (including, without limitation, any purchase agreement, indenture,
loan agreement or security agreement) relating to any such Indebtedness; (ii)
except for the Term Loan Obligations, make any voluntary or optional payment,
prepayment, redemption, defeasance, sinking fund payment or other acquisition
for value of any of its or its Subsidiaries' Indebtedness (including, without
limitation, by way of depositing money or securities with the trustee therefor
before the date required for the purpose of paying any portion of such
Indebtedness when due), or refund, refinance, replace or exchange any other
Indebtedness for any such Indebtedness, or make any payment, prepayment,
redemption, defeasance, sinking fund payment or repurchase of any outstanding
Indebtedness as a result of any asset sale, change of control, issuance and sale
of debt or equity securities or similar event, or give any notice with respect
to any of the foregoing, (iii) amend, modify or otherwise change its name,
jurisdiction of organization, organizational identification number or FEIN or
(iv) amend, modify or otherwise change its certificate of incorporation or
bylaws (or other similar organizational documents), including, without
limitation, by the filing or modification of any certificate of designation, or
any agreement or arrangement entered into by it, with respect to any of its
Capital Stock (including any shareholders' agreement), or enter into any new
agreement with respect to any of its Capital Stock, except any such amendments,
modifications or changes or any such new agreements or arrangements pursuant to
this clause (iv) that either individually or in the aggregate, could not have a
Material Adverse Effect.
(i) Operating Lease Obligations. The Borrower shall not
permit the present value of the aggregate obligations of the Borrower and its
Subsidiaries for the payment of rent and similar charges under all leases (other
than Capital Leases) to exceed $50,000,000 at any one time outstanding.
- 47 -
Section 6.03 Financial Covenants. So long as any principal of or
interest on the Term Loan or any other Term Loan Obligation (whether or not due)
shall remain unpaid or any Lender shall have any Term Loan Commitment hereunder,
the Borrower shall not, unless the Required Lenders shall otherwise consent in
writing:
(a) Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio for each period of four consecutive fiscal quarters of the
Borrower and its Subsidiaries or for each period of 12 consecutive months, as
applicable, to be less than .9 to 1 for any such period ending on or before
October 31, 2003 or 1.0 to 1 for any such period ending on any date subsequent
to October 31, 2003.
(b) Consolidated EBITDA. Permit EBITDA of the Borrower and its
Subsidiaries for any period of four consecutive fiscal quarters of the Borrower
and its Subsidiaries to be less than $70,000,000.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.01 Events of Default. The occurrence or existence of any
one or more of the following events are referred to herein individually as an
"Event of Default", and collectively as "Events of Default":
(a) (i) The Borrower fails to pay any of the Term Loan
Obligations within three (3) days or (ii) the Borrower fails to perform any of
the covenants contained in Section 6.01(j), 6.01(k), 6.01(l), 6.01(m), 6.01(n),
6.01(q), 6.01(s), 6.01(u) and 6.01(v) and such failure shall continue for
fifteen (15) days; provided, that, such day period shall not apply in the case
of: (A) any failure to observe any such covenant which is not capable of being
cured at all or within such fifteen (15) day period or which has been the
subject of a prior failure within a six (6) month period or (B) an intentional
breach by the Borrower of any such covenant or (iii) the Borrower or any
Subsidiary of the Borrower fails to perform any of the terms, covenants,
conditions or provisions contained in this Agreement or any of the other Loan
Documents other than those described in clause (i) or (ii) above;
(b) any representation or warranty made by any Loan Party to the
Agent in this Agreement, the other Loan Documents or any other written
agreement, schedule, confirmatory assignment or certificate (including, without
limitation, any statement of fact made in any written agreement, schedule,
confirmation, assignment or certificate) issued in connection with any Loan
Document or the transactions contemplated thereby shall when made or deemed made
be false or misleading in any material respect;
(c) any Loan Party revokes or terminates, or purports to revoke
or terminate, or fails to perform any of the terms, covenants, conditions or
provisions of any guarantee, endorsement or other agreement of such party in
favor of the Agent or any Lender;
(d) any judgment for the payment of money is rendered against
the
- 48 -
Borrower or any of its Subsidiaries in excess of $1,000,000 in any one case or
in excess of $2,500,000 in the aggregate (to the extent not covered by insurance
where the insurer has assumed responsibility in writing for such judgment) and
shall remain undischarged or unvacated for a period in excess of sixty (60) days
or execution shall at any time not be effectively stayed, or any judgment other
than for the payment of money, or injunction, attachment, garnishment or
execution is rendered against the Borrower or any of its Subsidiaries or any of
the Collateral having a value in excess of $1,000,000;
(e) the Borrower or any Guarantor makes an assignment for the
benefit of creditors, makes or sends notice of a bulk transfer or calls a
meeting of its creditors or principal creditors in connection with a moratorium
or adjustment of the Indebtedness due to them;
(f) a case or proceeding under the bankruptcy laws of the United
States of America now or hereafter in effect or under any insolvency,
reorganization, receivership, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction now or hereafter in effect (whether at law or
in equity) is filed against the Borrower or any Guarantor or all or any part of
its properties and such petition or application is not dismissed within sixty
(60) days after the date of its filing or the Borrower or any Guarantor shall
file any answer admitting or not contesting such petition or application or
indicates its consent to, acquiescence in or approval of; any such action or
proceeding or the relief requested is granted sooner;
(g) a case or proceeding under the bankruptcy laws of the United
States of America now or hereafter in effect or under any insolvency,
reorganization, receivership, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction now or hereafter in effect (whether at a law
or equity) is filed by the Borrower or any Guarantor or for all or any part of
its property;
(h) (A) any default in respect of any Indebtedness of the
Borrower or any Guarantor (other than Indebtedness owing to the Agent and
Lenders hereunder), in any case in an amount in excess of $5,000,000 or (B) any
default by the Borrower or any Guarantor under the Plan of Reorganization, the
Confirmation Order, the Revolving Loan Lender Agreements, or the PBGC Settlement
Agreements or (C) any default by the Borrower under any Material Contract, which
default, in any case under the immediately preceding clause (A), (B) or (C)
continues for more than the applicable cure period, if any, with respect thereto
or is not waived in writing by the other parties thereto;
(i) any material provision hereof or of any of the other Loan
Documents shall for any reason cease to be valid, binding and enforceable with
respect to any party hereto or thereto (other than the Agent) in accordance with
its terms, or any such party shall challenge the enforceability hereof or
thereof; or shall assert in writing, or take any action or fail to take any
action based on the assertion that any provision hereof or of any of the other
Loan Documents has ceased to be or is otherwise not valid, binding or
enforceable in accordance with its terms, or any security interest provided for
herein or in any of the other Loan Documents shall cease to be a valid and
perfected first priority security interest in any of the Collateral purported to
be subject thereto (except as otherwise permitted herein or therein);
- 49 -
(j) an ERISA Event shall occur which results in or could
reasonably be expected to result in liability of the Borrower in an aggregate
amount in excess of $5,000,000;
(k) any Change of Control;
(l) the indictment by any Governmental Authority, or as the
Agent may reasonably and in good faith determine, the threatened indictment by
any Governmental Authority of the Borrower or any Guarantor of which the
Borrower, such Guarantor or the Agent receives notice, in either case, as to
which there is a reasonable possibility of an adverse determination, in the good
faith determination of the Agent, under any criminal statute, or commencement or
threatened commencement of criminal or civil proceedings against the Borrower or
any Guarantor, pursuant to which statute or proceedings the penalties or
remedies sought or available include forfeiture of(i) any of the Collateral
having a value in excess of $500,000 or (ii) any other property of the Borrower
which is necessary or material to the conduct of its business;
(m) there shall be an act, condition or event that has a
Material Adverse Effect after the date hereof.
Section 7.02 Remedies.
(a) At any time an Event of Default exists or has occurred and
is continuing, the Agent and the Lenders shall have all rights and remedies
provided in this Agreement, the other Loan Documents, the Uniform Commercial
Code and other applicable law, all of which rights and remedies may be exercised
without notice to or consent by the Borrower or any Guarantor, except as such
notice or consent is expressly provided for hereunder or required by applicable
law. All rights, remedies and powers granted to the Agent and Lenders hereunder,
under any of the other Loan Documents, the Uniform Commercial Code or other
applicable law, are cumulative, not exclusive and enforceable, in the Agent's
discretion, alternatively, successively, or concurrently on any one or more
occasions, and shall include, without limitation, the right to apply to a court
of equity for an injunction to restrain a breach or threatened breach by the
Borrower or any of its Guarantor of this Agreement or any of the other Loan
Documents. Subject to Article VIII, the Agent may, and at the direction of the
Required Lenders shall, at any time or times, proceed directly against the
Borrower or any Guarantor to collect the Term Loan Obligations without prior
recourse to the Collateral.
(b) Without limiting the foregoing, at any time an Event of
Default exists or has occurred and is continuing, the Agent may, in its
discretion, and upon the direction of the Required Lenders, shall (i) accelerate
the payment of all Term Loan Obligations and demand immediate payment thereof to
the Agent upon notice to the Borrower for itself and the ratable benefit of
Lenders (provided, that, upon the occurrence of any Event of Default described
in Section 7.01(f) and Section 7.01(g), all Term Loan Obligations shall
automatically become immediately due and payable), (ii) with or without judicial
process or the aid or assistance of others, enter upon any premises on or in
which any of the Collateral may be located and take possession of the Collateral
or complete processing, manufacturing and repair of all or any portion of the
Collateral, (iii) require the Borrower on any Obligor, at the Borrower's
expense, to assemble and make available to the Agent any part or all of the
Collateral at any place and time designated
- 50 -
by the Agent, (iv) collect, foreclose, receive, appropriate, setoff and realize
upon any and all Collateral, (v) remove any or all of the Collateral from any
premises on or in which the same may be located for the purpose of effecting the
sale, foreclosure or other disposition thereof or for any other purpose, (vi)
sell, lease, transfer, assign, deliver or otherwise dispose of any and all
Collateral (including entering into contracts with respect thereto, public or
private sales at any exchange, broker's board, at any office of the Agent or
elsewhere) at such prices or terms as the Agent may deem reasonable, for cash,
upon credit or for future delivery, with the Agent having the right to purchase
the whole or any part of the Collateral at any such public sale, all of the
foregoing being free from any right or equity of redemption of the Borrower on
any Obligor, which right or equity of redemption is hereby expressly waived and
released by the Borrower and Obligors and/or (vii) terminate this Agreement. If
any of the Collateral is sold or leased by the Agent upon credit terms or for
future delivery, the Term Loan Obligations shall not be reduced as a result
thereof until payment therefor is finally collected by the Agent. If notice of
disposition of Collateral is required by law, ten (10) days prior notice by the
Agent to the Borrower designating the time and place of any public sale or the
time after which any private sale or other intended disposition of Collateral is
to be made, shall be deemed to be reasonable notice thereof and the Borrower
waives any other notice to the extent permitted by applicable law. In the event
the Agent institutes an action to recover any Collateral or seeks recovery of
any Collateral by way of prejudgment remedy, the Borrower waives the posting of
any bond which might otherwise be required.
(c) At any time or times that an Event of Default exists or has
occurred and is continuing, the Agent may, in its discretion, and upon the
direction of the Required Lenders, the Agent shall, enforce the rights of the
Borrower or any Obligor against any account debtor, secondary obligor or other
obligor in respect of any of the Accounts or other Receivables. Without limiting
the generality of the foregoing, the Agent may, in its discretion, and upon the
direction of the Required Lenders, the Agent shall, at such time or times (i)
notify any or all account debtors, secondary obligors or other obligors in
respect thereof that the Receivables have been assigned to the Agent and that
the Agent has a security interest therein and the Agent may direct any or all
account debtors, secondary obligors and other obligors to make payment of
Receivables directly to the Agent, (ii) extend the time of payment of,
compromise, settle or adjust for cash, credit, return of merchandise or
otherwise, and upon any terms or conditions, any and all Receivables or other
obligations included in the Collateral and thereby discharge or release the
account debtor or any secondary obligors or other obligors in respect thereof
without affecting any of the Term Loan Obligations, (iii) demand, collect or
enforce payment of any Receivables or such other obligations, but without any
duty to do so, and the Agent and Lenders shall not be liable for any failure to
collect or enforce the payment thereof nor for the negligence of its agents or
attorneys with respect thereto and (iv) take whatever other action the Agent may
deem necessary or desirable for the protection of its interests and the
interests of Lenders. At any time that an Event of Default exists or has
occurred and is continuing, at the Agent's request, all invoices and statements
sent to any account debtor shall state that the Accounts and such other
obligations have been assigned to the Agent and are payable directly and only to
the Agent and the Borrower shall deliver to the Agent such originals of
documents evidencing the sale and delivery of goods or the performance of
services giving rise to any Accounts as the Agent may require. In the event any
account debtor returns Inventory when an Event of Default exists or has occurred
and is continuing, the Borrower shall, upon the Agent's request, hold the
returned Inventory in trust for the Agent, segregate all
- 51 -
returned Inventory from all of its other property, dispose of the returned
Inventory solely according to the Agent's instructions, and not issue any
credits, discounts or allowances with respect thereto without the Agent's prior
written consent.
(d) To the extent that applicable law imposes duties on the
Agent or any Lender to exercise remedies in a commercially reasonable manner
(which duties cannot be waived under such law) the Borrower acknowledges and
agrees that it is not commercially unreasonable for the Agent or any Lender (i)
to fail to incur expenses reasonably deemed significant by the Agent or any
Lender to prepare Collateral for disposition or otherwise to complete raw
material or work in process into finished goods or other finished products for
disposition, (ii) to fail to obtain third party consents for access to
Collateral to be disposed of, or to obtain or, if not required by other law, to
fail to obtain consents of any Governmental Authority or other third party for
the collection or disposition of Collateral to be collected or disposed of;
(iii) to fail to exercise collection remedies against account debtors, secondary
obligors or other persons obligated on Collateral or to remove liens or
encumbrances on or any adverse claims against Collateral, (iv) to exercise
collection remedies against account debtors and other persons obligated on
Collateral directly or through the use of collection agencies and other
collection specialists, (v) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (vi) to contact other persons, whether or not in the
same business as the Borrower, for expressions of interest in acquiring all or
any portion of the Collateral, (vii) to hire one or more professional
auctioneers to assist in the disposition of Collateral, whether or not the
collateral is of a specialized nature, (viii) to dispose of Collateral by
utilizing Internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capability of doing so,
or that match buyers and sellers of assets, (ix) to dispose of assets in
wholesale rather than retail markets, (x) to disclaim disposition warranties,
(xi) to purchase insurance or credit enhancements to insure the Agent or Lenders
against risks of loss, collection or disposition of Collateral or to provide to
the Agent or Lenders a guaranteed return from the collection or disposition of
Collateral, or (xii) to the extent deemed appropriate by the Agent, to obtain
the services of other brokers, investment bankers, consultants and other
professionals to assist the Agent in the collection or disposition of any of the
Collateral. The Borrower acknowledges that the purpose of this Section is to
provide non-exhaustive indications of what actions or omissions by the Agent or
any Lender would not be commercially unreasonable in the exercise by the Agent
or any Lender of remedies against the Collateral and that other actions or
omissions by the Agent or any Lender shall not be deemed commercially
unreasonable solely on account of not being indicated in this Section. Without
limitation of the foregoing, nothing contained in this Section shall be
construed to grant any rights to the Borrower or to impose any duties on the
Agent or Lenders that would not have been granted or imposed by this Agreement
or by applicable law in the absence of this Section.
(e) For the purpose of enabling the Agent to exercise the rights
and remedies hereunder, the Borrower hereby grants to the Agent, to the extent
assignable, an irrevocable, non-exclusive license (exercisable at any time an
Event of Default shall exist or have occurred and for so long as the same is
continuing) without payment of royalty or other compensation to the Borrower, to
use, assign, license or sublicense any of the trademarks, service-marks, trade
names, business names, trade styles, designs, logos and other source of business
identifiers and other Intellectual Property and general intangibles now owned or
hereafter acquired
- 52 -
by the Borrower, wherever the same maybe located, including in such license
reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer programs used for the compilation or
printout thereof.
(f) The Agent may apply the cash proceeds of Collateral actually
received by the Agent from any sale, lease, foreclosure or other disposition of
the Collateral to payment of the Term Loan Obligations, in whole or in part and
in such order as the Agent may elect, whether or not then due. The Borrower and
Obligors shall remain liable to the Agent and Lenders for the payment of any
deficiency with interest at the highest rate provided for herein and all costs
and expenses of collection or enforcement, including attorneys' fees and
expenses.
ARTICLE VIII
AGENT
Section 8.01 Appointment. Each Lender hereby irrevocably appoints and
authorizes the Agent to perform the duties of the Agent as set forth in this
Agreement including: (i) to receive on behalf of each Lender any payment of
principal of or interest on the Term Loan outstanding hereunder and all other
amounts accrued hereunder for the account of the Lenders and paid to the Agent,
and, subject to Section 2.02 of this Agreement, to distribute promptly to each
Lender its Pro Rata Share of all payments so received; (ii) to distribute to
each Lender copies of all material notices and agreements received by the Agent
and not required to be delivered to each Lender pursuant to the terms of this
Agreement, provided that the Agent shall not have any liability to the Lenders
for the Agent's inadvertent failure to distribute any such notices or agreements
to the Lenders; (iii) to maintain, in accordance with its customary business
practices, ledgers and records reflecting the status of the Term Loan
Obligations, the Term Loan, and related matters and to maintain, in accordance
with its customary business practices, ledgers and records reflecting the status
of the Collateral and related matters; (iv) to execute or file any and all
financing or similar statements or notices, amendments, renewals, supplements,
documents, instruments, proofs of claim, notices and other written agreements
with respect to this Agreement or any other Loan Document; (v) to make the Term
Loan and Agent Advances for the Agent or on behalf of the applicable Lenders as
provided in this Agreement or any other Loan Document; (vi) to perform,
exercise, and enforce any and all other rights and remedies of the Lenders with
respect to the Borrower, the Term Loan Obligations, or otherwise related to any
of same to the extent reasonably incidental to the exercise by the Agent of the
rights and remedies specifically authorized to be exercised by the Agent by the
terms of this Agreement or any other Loan Document; (vii) to incur and pay such
fees necessary or appropriate for the performance and fulfillment of its
functions and powers pursuant to this Agreement or any other Loan Document; and
(viii) subject to Section 8.03 of this Agreement, to take such action as the
Agent deems appropriate on its behalf to administer the Term Loan and the Loan
Documents and to exercise such other powers delegated to the Agent by the terms
hereof or the other Loan Documents (including, without limitation, the power to
give or to refuse to give notices, waivers, consents, approvals and instructions
and the power to make or to refuse to make determinations and calculations)
together with such powers as are reasonably incidental thereto to carry out the
purposes hereof and thereof. As to any matters not expressly provided for by
this Agreement and the other Loan Documents (including, without limitation,
enforcement or collection of the
- 53 -
Term Loan), the Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions of the Required Lenders shall be
binding upon all Lenders and all makers of the Term Loan; provided, however,
that and the Agent shall not be required to take any action which, in the
reasonable opinion of the Agent, exposes the Agent to liability or which is
contrary to this Agreement or any other Loan Document or applicable law.
Section 8.02 Nature of Duties. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the
other Loan Documents. The duties of the Agent shall be mechanical and
administrative in nature. The Agent shall not have by reason of this Agreement
or any other Loan Document a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any other Loan Document, express or implied, is
intended to or shall be construed to impose upon the Agent any obligations in
respect of this Agreement or any other Loan Document except as expressly set
forth herein or therein. Each Lender shall make its own independent
investigation of the financial condition and affairs of the Borrower in
connection with the making and the continuance of the Term Loan hereunder and
shall make its own appraisal of the creditworthiness of the Borrower and the
value of the Collateral, and the Agent shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Lender with any credit
or other information with respect thereto, whether coming into its possession
before the Term Loan hereunder or at any time or times thereafter, provided
that, upon the reasonable request of a Lender, the Agent shall provide to such
Lender any documents or reports delivered to the Agent by the Borrower pursuant
to the terms of this Agreement or any other Loan Document. If the Agent seeks
the consent or approval of the Required Lenders to the taking or refraining from
taking any action hereunder, the Agent shall send notice thereof to each Lender.
The Agent shall promptly notify each Lender any time that the Required Lenders
have instructed the Agent to act or refrain from acting pursuant hereto.
Section 8.03 Rights, Exculpation, Etc. The Agent and its directors,
officers, agents or employees shall not be liable for any action taken or
omitted to be taken by them under or in connection with this Agreement or the
other Loan Documents, except for their own gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction. Without limiting the generality of the foregoing, the Agent (i)
may treat the payee of the Term Loan as the owner thereof until the Agent
receives written notice of the assignment or transfer thereof, pursuant to
Section 9.07, signed by such payee and in form satisfactory to the Agent; (ii)
may consult with legal counsel (including, without limitation, counsel to the
Agent or counsel to the Borrower), independent public accountants, and other
experts selected by any of them and shall not be liable for any action taken or
omitted to be taken in good faith by any of them in accordance with the advice
of such counsel or experts; (iii) make no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements,
certificates, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (iv) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of this Agreement or the other Loan Documents on the part of any
Person, the existence or possible existence of any Default or Event of Default,
or to inspect the Collateral or other property (including, without
- 54 -
limitation, the books and records) of any Person; (v) shall not be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto; and
(vi) shall not be deemed to have made any representation or warranty regarding
the existence, value or collectibility of the Collateral, the existence,
priority or perfection of the Agent's Lien thereon, or any certificate prepared
by the Borrower in connection therewith, nor shall the Agent be responsible or
liable to the Lenders for any failure to monitor or maintain any portion of the
Collateral. The Agent shall not be liable for any apportionment or distribution
of payments made in good faith pursuant to Section 3.04, and if any such
apportionment or distribution is subsequently determined to have been made in
error the sole recourse of any Lender to whom payment was due but not made,
shall be to recover from other Lenders any payment in excess of the amount which
they are determined to be entitled. The Agent may at any time request
instructions from the Lenders with respect to any actions or approvals which by
the terms of this Agreement or of any of the other Loan Documents the Agent is
permitted or required to take or to grant, and if such instructions are promptly
requested, the Agent shall be absolutely entitled to refrain from taking any
action or to withhold any approval under any of the Loan Documents until it
shall have received such instructions from the Required Lenders. Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against the Agent as a result of the Agent acting or refraining from acting
under this Agreement or any of the other Loan Documents in accordance with the
instructions of the Required Lenders.
Section 8.04 Reliance. The Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the other Loan Documents and its
duties hereunder or thereunder, upon advice of counsel selected by it.
Section 8.05 Indemnification. To the extent that the Agent is not
reimbursed and indemnified by the Borrower, the Lenders will reimburse and
indemnify the Agent from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, advances
or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Agent in any way relating to or arising out
of this Agreement or any of the other Loan Documents or any action taken or
omitted by the Agent under this Agreement or any of the other Loan Documents,
in proportion to each Lender's Pro Rata Share, including, without limitation,
advances and disbursements made pursuant to Section 8.08; provided, however,
that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, advances
or disbursements for which there has been a final judicial determination that
such liability resulted from the Agent's gross negligence or willful misconduct.
The obligations of the Lenders under this Section 8.05 shall survive the payment
in full of the Term Loan and the termination of this Agreement.
Section 8.06 Agent Individually. With respect to its Pro Rata Share
of the Total Term Loan Commitment hereunder and the Term Loan made by it, the
Agent shall have and may exercise the same rights and powers hereunder and is
subject to the same obligations
- 55 -
and liabilities as and to the extent set forth herein for any other Lender or
maker of the Term Loan. The terms "Lenders" or "Required Lenders" or any
similar terms shall, unless the context clearly otherwise indicates, include the
Agent in its individual capacity as a Lender or one of the Required Lenders.
The Agent and its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with the
Borrower as if it were not acting as the Agent pursuant hereto without any duty
to account to the other Lenders.
Section 8.07 Successor Agent. (a) The Agent may resign from the
performance of all its functions and duties hereunder and under the other Loan
Documents at any time by giving at least thirty (30) Business Days' prior
written notice to the Borrower and each Lender. Such resignation shall take
effect upon the acceptance by a successor Agent of appointment pursuant to
clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Lenders
shall appoint a successor Agent. Upon the acceptance of any appointment as the
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the Agent, and the Agent shall be discharged from its duties and obligations
under this Agreement and the other Loan Documents. After the Agent's
resignation hereunder as the Agent, the provisions of this Article VIII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was the Agent under this Agreement and the other Loan Documents.
(c) If a successor Agent shall not have been so appointed within
said thirty (30) Business Day period, the Agent shall then appoint a successor
Agent who shall serve as the Agent until such time, if any, as the Required
Lenders appoint a successor Agent as provided above.
Section 8.08 Collateral Matters.
(a) The Agent may from time to time make such disbursements and
advances ("Agent Advances") which the Agent, in its sole discretion, deems
necessary or desirable to preserve, protect, prepare for sale or lease or
dispose of the Collateral or any portion thereof, to enhance the likelihood or
maximize the amount of repayment by the Borrower of the Term Loan and other Term
Loan Obligations or to pay any other amount chargeable to the Borrower pursuant
to the terms of this Agreement, including, without limitation, costs, fees and
expenses as described in Section 9.04. The Agent Advances shall be repayable on
demand and be secured by the Collateral. The Agent Advances shall constitute
Term Loan Obligations hereunder which may be charged to the Loan Account in
accordance with Section 3.02. The Agent shall notify each Lender and the
Borrower in writing of each such Agent Advance, which notice shall include a
description of the purpose of such Agent Advance. Without limitation to its
obligations pursuant to Section 8.05, each Lender agrees that it shall make
available to the Agent, upon the Agent's demand, in Dollars in immediately
available funds, the amount equal to such Lender's Pro Rata Share of each such
Agent Advance. If such funds are not made available to the Agent by such
Lender, the Agent shall be entitled to recover such funds on demand from such
Lender, together with interest thereon for each day from the date such payment
was due until the date such amount is paid to the Agent, at the Federal Funds
Rate for three Business Days and thereafter at the Reference Rate.
- 56 -
(b) The Lenders hereby irrevocably authorize the Agent, at its
option and in its discretion, to release any Lien granted to or held by the
Agent upon any Collateral upon termination of the Total Term Loan Commitment and
payment and satisfaction of the Term Loan and all other Term Loan Obligations
which have matured and which the Agent has been notified in writing are then due
and payable; or constituting property being sold or disposed of in the ordinary
course of the Borrower's business and in compliance with the terms of this
Agreement and the other Loan Documents; or constituting property in which the
Borrower owned no interest at the time the Lien was granted or at any time
thereafter; or if approved, authorized or ratified in writing by the Lenders.
Upon request by the Agent at any time, the Lenders will confirm in writing the
Agent's authority to release particular types or items of Collateral pursuant to
this Section 8.08(b).
(c) Without in any manner limiting the Agent's authority to act
without any specific or further authorization or consent by the Lenders (as set
forth in Section 8.08(b)), each Lender agrees to confirm in writing, upon
request by the Agent, the authority to release Collateral conferred upon the
Agent under Section 8.08(b). Upon receipt by the Agent of confirmation from the
Lenders of its authority to release any particular item or types of Collateral,
and upon prior written request by the Borrower, 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 Liens granted to the Agent for the
benefit of the Lenders 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 obligations
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 Term Loan Obligations or any Lien upon (or obligations of the
Borrower in respect of) all interests in the Collateral retained by the
Borrower.
(d) The Agent shall have no obligation whatsoever to any Lender
to assure that the Collateral exists or is owned by the Borrower or is cared
for, protected or insured or has been encumbered or that the Lien granted to the
Agent pursuant to this Agreement or any other Loan Document has been properly or
sufficiently or lawfully created, perfected, protected or enforced or is
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 in this Section 8.08 or in any other Loan Document, 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 as one
of the Lenders and that the Agent shall have no duty or liability whatsoever to
any other Lender, except as otherwise provided herein.
Section 8.09 Agency for Perfection. Each Lender hereby appoints the
Agent and each other Lender as agent and bailee for the purpose of perfecting
the security interests in and liens upon the Collateral in assets which, in
accordance with Article 9 of the Uniform Commercial Code, can be perfected only
by possession or control (or where the security interest of a secured party with
possession or control has priority over the security interest of another secured
party) and the Agent and each Lender hereby acknowledges that it holds
possession of or otherwise controls any such Collateral for the benefit of the
Agent and the Lenders as secured party. Should any Lender obtain possession or
control of any such Collateral, such Lender shall
- 57 -
notify the Agent thereof, and, promptly upon the Agent's request therefor shall
deliver such Collateral to the Agent or in accordance with the Agent's
instructions. The Borrower by its execution and delivery of this Agreement
hereby consents to the foregoing.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and shall be mailed, telecopied or
delivered, if to the Borrower, at the following address:
Anchor Glass Container Corporation
One Anchor Plaza
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Agent, to it at the following address:
Ableco Finance LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
or, as to each party, at such other address as shall be designated by
such party in a written notice to the other parties complying as to delivery
with the terms of this Section 9.01. All such notices and other communications
shall be effective, (i) if mailed, when received or three days after deposited
in the mails, whichever occurs first, (ii) if telecopied, when transmitted and
confirmation received, or (iii) if delivered, upon delivery, except that notices
to the Agent pursuant to ARTICLE II shall not be effective until received by the
Agent, as the case may be.
Section 9.02 Amendments, Etc. No amendment or waiver of any provision
of this Agreement, and no consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Required Lenders or by the Agent with the consent of the Required
Lenders, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given, provided, however, that
no amendment, waiver or consent shall (i) increase the Term Loan Commitment of
any Lender, reduce the principal of, or interest on, the portion of the Term
Loan payable to any Lender, reduce the amount of any fee payable for the account
of any Lender, or postpone or extend any date fixed for any payment of principal
of, or interest or fees on, the portion of the Term Loan payable to any Lender,
in each case without the written consent of any Lender
- 58 -
affected thereby, (ii) increase the Total Term Loan Commitment without the
written consent of each Lender, (iii) change the percentage of the Term Loan
Commitments or of the aggregate unpaid principal amount of the Term Loan that is
required for the Lenders or any of them to take any action hereunder, (iv) amend
the definition of "Required Lenders" or "Pro Rata Share", (v) release all or a
substantial portion of the Collateral (except as otherwise provided in this
Agreement and the other Term Loan Documents), subordinate any Lien granted in
favor of the Agent for the benefit of the Lenders, or release the Borrower, or
(vi) amend, modify or waive Section 3.04 or this Section 9.02, in each case,
without the written consent of each Lender. Notwithstanding the foregoing, no
amendment, waiver or consent shall, unless in writing and signed by the Agent,
affect the rights or duties of the Agent (but not in its capacity as a Lender)
under this Agreement or the other Loan Documents.
Section 9.03 No Waiver; Remedies, Etc. No failure on the part of the
Agent or any Lender to exercise, and no delay in exercising, any right hereunder
or under any other Loan Document shall operate as a waiver thereof; nor shall
any single or partial exercise of any right under any Loan Document preclude any
other or further exercise thereof or the exercise of any other right. The
rights and remedies of the Agent and the Lenders provided herein and in the
other Loan Documents are cumulative and are in addition to, and not exclusive
of, any rights or remedies provided by law. The rights of the Agent and the
Lenders under any Loan Document against any party thereto are not conditional or
contingent on any attempt by the Agent and the Lenders to exercise any of their
rights under any other Loan Document against such party or against any other
Person.
Section 9.04 Expenses; Taxes; Attorneys' Fees. The Borrower will pay
on demand, all costs and expenses incurred by or on behalf of the Agent (and, in
the case of clauses (b) through (m) below, each Lender), regardless of whether
the transactions contemplated hereby are consummated, including, without
limitation, reasonable fees, costs, client charges and expenses of counsel for
the Agent (and, in the case of clauses (b) through (m) below, each Lender),
accounting, due diligence, periodic field audits, physical counts, valuations,
investigations, searches and filings, monitoring of assets, appraisals of
Collateral, title searches and reviewing environmental assessments,
miscellaneous disbursements, examination, travel, lodging and meals, arising
from or relating to: (a) the negotiation, preparation, execution, delivery,
performance and administration of this Agreement and the other Loan Documents
(including, without limitation, the preparation of any additional Loan Documents
pursuant to Section 6.02(a), (b) any requested amendments, waivers or consents
to this Agreement or the other Loan Documents whether or not such documents
become effective or are given, (c) the preservation and protection of any of the
Lenders' rights under this Agreement or the other Loan Documents, (d) the
defense of any claim or action asserted or brought against the Agent or any
Lender by any Person that arises from or relates to this Agreement, any other
Loan Document, the Agent's or the Lenders' claims against the Borrower, or any
and all matters in connection therewith, (e) the commencement or defense of, or
intervention in, any court proceeding arising from or related to this Agreement
or any other Loan Document, (f) the filing of any petition, complaint, answer,
motion or other pleading by the Agent or any Lender, or the taking of any action
in respect of the Collateral or other security, in connection with this
Agreement or any other Loan Document, (g) the protection, collection, lease,
sale, taking possession of or liquidation of, any Collateral or other security
in connection with this Agreement or any other
- 59 -
Loan Document, (h) any attempt to enforce any Lien or security interest in any
Collateral or other security in connection with this Agreement or any other Loan
Document, (i) any attempt to collect from the Borrower, (j) all liabilities and
costs arising from or in connection with the past, present or future operations
of the Borrower involving any damage to real or personal property or natural
resources or harm or injury alleged to have resulted from any Release of
Hazardous Materials on, upon or into such property, (k) any Environmental
Liabilities and Costs incurred in connection with the investigation, removal,
cleanup and/or remediation of any Hazardous Materials present or arising out of
the operations of any facility the Borrower, (l) any Environmental Liabilities
and Costs incurred in connection with any Environmental Lien; or (m) the receipt
by the Agent or any Lender of any advice from professionals with respect to any
of the foregoing. Without limitation of the foregoing or any other provision of
any Loan Document: (x) the Borrower agrees to pay all stamp, document, transfer,
recording or filing taxes or fees and similar impositions now or hereafter
determined by the Agent or any Lender to be payable in connection with this
Agreement or any other Loan Document, and the Borrower agrees to save the Agent
and each Lender harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or
delay in paying any such taxes, fees or impositions, (y) the Borrower agrees to
pay all broker fees that may become due in connection with the transactions
contemplated by this Agreement and the other Loan Documents, and (z) if the
Borrower fails to perform any covenant or agreement contained herein or in any
other Loan Document, the Agent may itself perform or cause performance of such
covenant or agreement, and the expenses of the Agent incurred in connection
therewith shall be reimbursed on demand by the Borrower.
Section 9.05 Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, the Agent or any Lender may, and is hereby
authorized to, at any time and from time to time, without notice to the Borrower
(any such notice being expressly waived by the Borrower) and to the fullest
extent permitted by law, set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
Indebtedness at any time owing by the Agent or such Lender to or for the credit
or the account of the Borrower against any and all obligations of the Borrower
either now or hereafter existing under any Loan Document, irrespective of
whether or not the Agent or such Lender shall have made any demand hereunder or
thereunder and although such obligations may be contingent or unmatured. The
Agent and each Lender agrees to notify the Borrower promptly after any such
set-off and application made by the Agent or such Lender provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Agent and the Lenders under this Section 9.05
are in addition to the other rights and remedies (including other rights of
set-off) which the Agent and the Lenders may have under this Agreement or any
other Loan Documents of law or otherwise.
Section 9.06 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 9.07 Assignments and Participations. (a) This Agreement and
the other Loan Documents shall be binding upon and inure to the benefit of the
Borrower and the
- 60 -
Agent and each Lender and their respective successors and assigns; provided,
however, that none of the Borrower may assign or transfer any of its rights
hereunder without the prior written consent of each Lender and any such
assignment without the Lenders' prior written consent shall be null and void.
(b) Each Lender may, with the written consent of the Agent,
assign to one or more other lenders or other entities all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Term Loan Commitments, the Term Loan made by it); provided,
however, that (i) such assignment is in an amount which is at least $1,000,000
or a multiple of $500,000 in excess thereof (or the remainder of such Lender's
Term Loan Commitment) (except such minimum amount shall not apply to an
assignment by a Lender to an Affiliate of such Lender or a fund or account
managed by such Lender or an Affiliate of such Lender), (ii) the parties to each
such assignment shall execute and deliver to the Agent, for its acceptance, an
Assignment and Acceptance, together with any promissory note subject to such
assignment and such parties shall deliver to the Agent a processing and
recordation fee of $5,000 (except the payment of such fee shall not be required
in connection with an assignment by a Lender to an Affiliate of such Lender or a
fund or account managed by such Lender or an Affiliate of such Lender) and (iii)
no written consent of the Agent shall be required in connection with any
assignment by a Lender to an Affiliate of such Lender or a fund or account
managed by such Lender or an Affiliate of such Lender. Upon such execution,
delivery and acceptance, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least three Business
Days after the delivery thereof to the Agent (or such shorter period as shall be
agreed to by the Agent and the parties to such assignment), (A) the assignee
thereunder shall become a "Lender" hereunder and, in addition to the rights and
obligations hereunder held by it immediately prior to such effective date, have
the rights and obligations hereunder that have been assigned to it pursuant to
such Assignment and Acceptance and (B) the assigning Lender thereunder shall, to
the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (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).
(i) By executing and delivering an Assignment and
Acceptance, the assigning Lender and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (A) other than as
provided in such Assignment and Acceptance, the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document furnished pursuant hereto; (B) the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or any of its Subsidiaries or the
performance or observance by the Borrower of any of its obligations under this
Agreement or any other Loan Document furnished pursuant hereto; (C) such
assignee confirms that it has received a copy of this Agreement and the other
Loan Documents, together with such other documents and information it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (D) such assignee will,
- 61 -
independently and without reliance upon the assigning Lender, the Agent or any
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement and the other Loan Documents; (E) such assignee
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental hereto and thereto; and (F) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement and the other Loan Documents
are required to be performed by it as a Lender.
(ii) The Borrower authorizes the Agent, and the Agent
agrees, to maintain, or cause to be maintained at the Payment Office, a copy of
each Assignment and Acceptance delivered to and accepted by it and a register
(the "Register") for the recordation of the names and addresses of the Lenders
and the Term Loan Commitments of, and principal amount of the Term Loan (the
"Registered Loans") owing to each Lender from time to time. The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Agent and the Lenders shall treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower and
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(iii) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee, together with any promissory
notes subject to such assignment, the Agent shall, if the Agent consents to such
assignment and if such Assignment and Acceptance has been completed (i) accept
such Assignment and Acceptance and (ii) record the information contained therein
in the Register.
(iv) A Registered Loan (and the registered note, if any,
evidencing the same) may be assigned or sold in whole or in part only by
registration of such assignment or sale on the Register (and each registered
note shall expressly so provide). Any assignment or sale of all or part of such
Registered Loan (and the registered note, if any, evidencing the same) may be
effected only by registration of such assignment or sale on the Register,
together with the surrender of the registered note, if any, evidencing the same
duly endorsed by (or accompanied by a written instrument of assignment or sale
duly executed by) the holder of such registered note, whereupon, at the request
of the designated assignee(s) or transferee(s), one or more new registered notes
in the same aggregate principal amount shall be issued to the designated
assignee(s) or transferee(s). Prior to the registration of assignment or sale
of any Registered Loan (and the registered note, if any, evidencing the same),
the Agent shall treat the Person in whose name such Registered Loan (and the
registered note, if any, evidencing the same) is registered as the owner thereof
for the purpose of receiving all payments thereon and for all other purposes,
notwithstanding notice to the contrary.
(v) In the event that any Lender sells participations in
a Registered Loan, such Lender shall maintain a register on which it enters the
name of all participants in the Registered Loans held by it (the "Participant
Register"). A Registered Loan (and the registered note, if any, evidencing the
same) may be participated in whole or in part
- 62 -
only by registration of such participation on the Participant Register (and each
registered note shall expressly so provide). Any participation of such
Registered Loan (and the registered note, if any, evidencing the same) may be
effected only by the registration of such participation on the Participant
Register.
(vi) Any foreign Person who purchases or is assigned or
participates in any portion of such Registered Loan shall provide the Agent and
the Lender with a completed Internal Revenue Service Form W-8BEN (Certificate of
Foreign Status) or a substantially similar form for such purchaser, participant
or any other affiliate who is a holder of beneficial interests in the Registered
Loan.
(c) Each Lender may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations under
this Agreement and the other Loan Documents (including, without limitation, all
or a portion of its Term Loan Commitments, the Term Loan made by it); provided,
that (i) such Lender's obligations under this Agreement (including without
limitation, its Term Loan Commitments hereunder) and the other Loan Documents
shall remain unchanged; (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, and the Borrower,
the Agent and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents; and (iii) a participant shall not be
entitled to require such Lender to take or omit to take any action hereunder
except (A) action directly effecting an extension of the maturity dates or
decrease in the principal amount of the Term Loan, (B) action directly effecting
an extension of the due dates or a decrease in the rate of interest payable on
the Term Loan or the fees payable under this Agreement, or (C) actions directly
effecting a release of all or a substantial portion of the Collateral or any
Loan Party (except as set forth in Section 8.08 or any other Loan Document).
The Loan Parties agree that each participant shall be entitled to the benefits
of Section 2.08 and Section 3.05 respect to its participation in any portion of
the Term Loan Commitments and the Term Loan as if it was a Lender.
Section 9.08 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement. Delivery of an executed
counterpart of this Agreement by telecopier shall be equally as effective as
delivery of an original executed counterpart of this Agreement. Any party
delivering an executed counterpart of this Agreement by telecopier also shall
deliver an original executed counterpart of this Agreement but the failure to
deliver an original executed counterpart shall not affect the validity,
enforceability, and binding effect of this Agreement. The foregoing shall apply
to each other Loan Document mutatis mutandis.
Section 9.09 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN
RESPECT OF SUCH OTHER LOAN DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK.
- 63 -
Section 9.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE.
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ IN THE COUNTY OF
NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY
IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
THE JURISDICTION OF THE AFORESAID COURTS. EACH THE BORROWER HEREBY IRREVOCABLY
APPOINTS THE SECRETARY OF STATE OF THE STATE OF NEW YORK AS ITS AGENT FOR
SERVICE OF PROCESS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING AND FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS
FOR NOTICES AS SET FORTH IN Section 9.01 AND TO THE SECRETARY OF STATE OF THE
STATE OF NEW YORK, SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH
MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT AND THE LENDERS TO
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY OTHER JURISDICTION.
THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN
AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE
BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
Section 9.11 WAIVER OF JURY TRIAL, ETC. THE BORROWER, THE AGENT AND
EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR
OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION
THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION
WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THE BORROWER
CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT OR ANY
LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT OR ANY LENDER
- 64 -
WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO
ENFORCE THE FOREGOING WAIVERS. THE BORROWER HEREBY ACKNOWLEDGES THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING INTO
THIS AGREEMENT.
Section 9.12 Consent by the Agent and Lenders. Except as otherwise
expressly set forth herein to the contrary, if the consent, approval,
satisfaction, determination, judgment, acceptance or similar action (an
"Action") of the Agent or any Lender shall be permitted or required pursuant to
any provision hereof or any provision of any other agreement to which any the
Borrower is a party and to which the Agent or any Lender has succeeded thereto,
such Action shall be required to be in writing and may be withheld or denied by
the Agent or such Lender, in its sole discretion, with or without any reason,
and without being subject to question or challenge on the grounds that such
Action was not taken in good faith.
Section 9.13 No Party Deemed Drafter. Each of the parties hereto
agrees that no party hereto shall be deemed to be the drafter of this Agreement.
Section 9.14 Reinstatement; Certain Payments. If any claim is ever
made upon the Agent or any Lender for repayment or recovery of any amount or
amounts received by the Agent or such Lender in payment or on account of any of
the Term Loan Obligations, the Agent or such Lender shall give prompt notice of
such claim to each other Lender and the Borrower, and if the Agents, such Lender
repays all or part of such amount by reason of (i) any judgment, decree or order
of any court or administrative body having jurisdiction over the Agent or such
Lender or any of its property, or (ii) any good faith settlement or compromise
of any such claim effected by the Agent or such Lender with any such claimant,
then and in such event the Borrower agrees that (A) any such judgment, decree,
order, settlement or compromise shall be binding upon it notwithstanding the
cancellation of any Indebtedness hereunder or under the other Loan Documents or
the termination of this Agreement or the other Loan Documents, and (B) it shall
be and remain liable to the Agent or such Lender hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by the Agent or such Lender.
Section 9.15 Indemnification.
(a) General Indemnity. In addition to the Borrower's other Term
Loan Obligations under this Agreement, the Borrower agrees to defend, protect,
indemnify and hold harmless the Agent and each Lender and all of their
respective officers, directors, employees, attorneys, consultants and agents
(collectively called the "Indemnitees") from and against any and all losses,
damages, liabilities, obligations, penalties, fees, reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees, costs and
expenses) incurred by such Indemnitees, whether prior to or from and after the
Funding Date, whether direct, indirect or consequential, as a result of or
arising from or relating to or in connection with any of the following: (i) the
negotiation, preparation, execution or performance or enforcement of this
Agreement, any other Loan Document or of any other document executed in
connection with the transactions contemplated by this Agreement, (ii) the
Agent's or any Lender's furnishing of funds to the Borrower for the account of
the Borrower under this Agreement or the other Loan
- 65 -
Documents, including, without limitation, the management of the Term Loan (iii)
any matter relating to the financing transactions contemplated by this Agreement
or the other Loan Documents or by any document executed in connection with the
transactions contemplated by this Agreement or the other Loan Documents, or
(iv) any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto (collectively, the
"Indemnified Matters"); provided, however, that the Borrower shall not have any
obligation to any Indemnitee under this subsection (a) for any Indemnified
Matter caused by the gross negligence or willful misconduct of such Indemnitee,
as determined by a final judgment of a court of competent jurisdiction.
(b) Environmental Indemnity. Without limiting Section 9.15(a),
the Borrower agrees to defend, indemnify, and hold harmless the Indemnitees
against any and all Environmental Liabilities and Costs and all other claims,
demands, penalties, fines, liability (including strict liability), losses,
damages, costs and expenses (including without limitation, reasonable legal fees
and expenses, consultant fees and laboratory fees), arising out of (i) any
Releases or threatened Releases (x) at any property presently or formerly owned
or operated by the Borrower or any Subsidiary of the Borrower, or any
predecessor in interest, or (y) of any Hazardous Materials generated and
disposed of by the Borrower or any Subsidiary of the Borrower, or any
predecessor in interest; (ii) any violations of Environmental Laws; (iii) any
Environmental Action relating to the Borrower or any Subsidiary of the Borrower,
or any predecessor in interest; (iv) any personal injury (including wrongful
death) or property damage (real or personal) arising out of exposure to
Hazardous Materials used, handled, generated, transported or disposed by the
Borrower or any Subsidiary of the Borrower, or any predecessor in interest; and
(v) any breach of any warranty or representation regarding environmental matters
made by the Borrower herein, or the breach of any covenant made by the Borrower.
Notwithstanding the foregoing, the Borrower shall not have any obligation to any
Indemnitee under this subsection (b) regarding any potential environmental
matter covered hereunder which is caused by the gross negligence or willful
misconduct of such Indemnitee, as determined by a final judgment of a court of
competent jurisdiction.
(c) The indemnification for all of the foregoing losses,
damages, fees, costs and expenses of the Indemnitees are chargeable against the
Loan Account. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in this Section 9.15 may be unenforceable because it is
violative of any law or public policy, the Borrower shall, jointly and
severally, contribute the maximum portion which it is permitted to pay and
satisfy under applicable law, to the payment and satisfaction of all Indemnified
Matters incurred by the Indemnitees. The indemnities set forth in this Section
9.15 shall survive the repayment of the Term Loan Obligations and discharge of
any Liens granted under the Loan Documents.
Section 9.16 Records. The unpaid principal of and interest on the
Term Loan, the interest rate or rates applicable to such unpaid principal and
interest, the duration of such applicability, the Term Loan Commitments, and the
accrued and unpaid fees payable pursuant to Section 2.06 shall at all times be
ascertained from the records of the Agent, which shall be conclusive and binding
absent manifest error.
Section 9.17 Binding Effect. This Agreement shall become effective
when it
- 66 -
shall have been executed by the Borrower, the Agent and each Lender and when the
conditions precedent set forth in Section 4.01 hereof have been satisfied or
waived in writing by the Agent, and thereafter shall be binding upon and inure
to the benefit of the Borrower, the Agent and each Lender, and their respective
successors and assigns, except that the Borrower shall not have the right to
assign their rights hereunder or any interest herein without the prior written
consent of each Lender, and any assignment by any Lender shall be governed by
Section 9.07 hereof.
Section 9.18 Interest. It is the intention of the parties hereto that
the Agent and each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby or by any other Loan
Document would be usurious as to the Agent or any Lender under laws applicable
to it (including the laws of the United States of America and the State of New
York or any other jurisdiction whose laws may be mandatorily applicable to the
Agent or such Lender notwithstanding the other provisions of this Agreement),
then, in that event, notwithstanding anything to the contrary in this Agreement
or any other Loan Document or any agreement entered into in connection with or
as security for the Term Loan Obligations, it is agreed as follows: (i) the
aggregate of all consideration which constitutes interest under law applicable
to the Agent or any Lender that is contracted for, taken, reserved, charged or
received by the Agent or such Lender under this Agreement or any other Loan
Document or agreements or otherwise in connection with the Term Loan Obligations
shall under no circumstances exceed the maximum amount allowed by such
applicable law, any excess shall be canceled automatically and if theretofore
paid shall be credited by the Agent or such Lender on the principal amount of
the Term Loan Obligations (or, to the extent that the principal amount of the
Term Loan Obligations shall have been or would thereby be paid in full, refunded
by the Agent or such Lender, as applicable, to the Borrower); and (ii) in the
event that the maturity of the Term Loan Obligations is accelerated by reason of
any Event of Default under this Agreement or otherwise, or in the event of any
required or permitted prepayment, then such consideration that constitutes
interest under law applicable to the Agent or any Lender may never include more
than the maximum amount allowed by such applicable law, and excess interest, if
any, provided for in this Agreement or otherwise shall be canceled automatically
by the Agent or such Lender, as applicable, as of the date of such acceleration
or prepayment and, if theretofore paid, shall be credited by the Agent or such
Lender, as applicable, on the principal amount of the Term Loan Obligations (or,
to the extent that the principal amount of the Term Loan Obligations shall have
been or would thereby be paid in full, refunded by the Agent or such Lender to
the Borrower). All sums paid or agreed to be paid to the Agent or any Lender
for the use, forbearance or detention of sums due hereunder shall, to the extent
permitted by law applicable to the Agent or such Lender, be amortized, prorated,
allocated and spread throughout the full term of the Term Loan until payment in
full so that the rate or amount of interest on account of the Term Loan
hereunder does not exceed the maximum amount allowed by such applicable law. If
at an time and from time to time (x) the amount of interest payable to the Agent
or any Lender on any date shall be computed at the Highest Lawful Rate
applicable to the Agent or such Lender pursuant to this Section 9.18 and (y) in
respect of any subsequent interest computation period the amount of interest
otherwise payable to the Agent or such Lender would be less than the amount of
interest payable to the Agent or such Lender computed at the Highest Lawful Rate
applicable to the Agent or such Lender, then the amount of interest payable to
the Agent or such Lender in respect of such subsequent interest computation
period shall continue to be computed at the
- 67 -
Highest Lawful Rate applicable to the Agent or such Lender until the total
amount of interest payable to the Agent or such Lender shall equal the total
amount of interest which would have been payable to the Agent or such Lender
if the total amount of interest had been computed without giving effect to this
Section 9.18.
For purposes of this Section 9.18, the term "applicable law" shall
mean that law in effect from time to time and applicable to the loan transaction
between the Borrower, on the one hand, and the Agent and the Lenders, on the
other, that lawfully permits the charging and collection of the highest
permissible, lawful non-usurious rate of interest on such loan transaction and
this Agreement, including laws of the State of New York and, to the extent
controlling, laws of the United States of America.
The right to accelerate the maturity of the Term Loan Obligations does
not include the right to accelerate any interest that has not accrued as of the
date of acceleration.
Section 9.19 Confidentiality. The Agent and each Lender agrees (on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with its customary procedures for handling confidential information
of this nature and in accordance with safe and sound practices of comparable
commercial finance companies, any non-public information supplied to it by the
Borrower pursuant to this Agreement or the other Loan Documents which is
identified in writing by the Borrower as being confidential at the time the same
is delivered to such Person (and which at the time is not, and does not
thereafter become, publicly available or available to such Person from another
source not known to be subject to a confidentiality obligation to such Person
not to disclose such information), provided that nothing herein shall limit the
disclosure of any such information (i) to the extent required by statute, rule,
regulation or judicial process, (ii) to counsel for the Agent or any Lender,
(iii) to examiners, auditors, accountants or Securitization Parties, (iv) in
connection with any litigation to which the Agent or any Lender is a party or
(v) to any assignee or participant (or prospective assignee or participant) so
long as such assignee or participant (or prospective assignee or participant)
first agrees, in writing, to be bound by confidentiality provisions similar in
substance to this Section 9.19. The Agent and each Lender agrees that, upon
receipt of a request or identification of the requirement for disclosure
pursuant to clause (iv) hereof, it will make reasonable efforts to keep the
Borrower informed of such request or identification; provided that the each the
Borrower acknowledges that the Agent and each Lender may make disclosure as
required or requested by any Governmental Authority or representative thereof
and that the Agent and each Lender may be subject to review by Securitization
Parties or other regulatory agencies and may be required to provide to, or
otherwise make available for review by, the representatives of such parties or
agencies any such non-public information.
Section 9.20 Integration. This Agreement, together with the other
Loan Documents, reflects the entire understanding of the parties with respect to
the transactions contemplated hereby and shall not be contradicted or qualified
by any other agreement, oral or written, before the date hereof.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
- 68 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWER:
ANCHOR GLASS CONTAINER CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
AGENT AND LENDER:
ABLECO FINANCE LLC
By: /s/ ▇▇▇▇▇ Genoa
----------------------
Name: ▇▇▇▇▇ Genoa
Title: Senior Vice President