POST-PETITION
LOAN AND SECURITY AGREEMENT
EXHIBIT 4
DATED AS OF
APRIL 1, 2001
AMONG
THE FINANCIAL INSTITUTIONS NAMED HEREIN
AS THE LENDERS
BANK OF AMERICA, N.A.
AS THE AGENT
AND
▇. ▇. ▇▇▇▇▇ & CO. AND THE
SUBSIDIARIES OF ▇. ▇. ▇▇▇▇▇ & CO. NAMED HEREIN,
AS DEBTORS AND DEBTORS-IN-POSSESSION
AS THE BORROWERS
TABLE OF CONTENTS
ARTICLE PAGE
ARTICLE 1 LOANS, LETTERS OF CREDIT AND SECURITY...................................................................2
1.1 TOTAL FACILITY...........................................................................................2
1.2 REVOLVING LOANS..........................................................................................2
1.3 [INTENTIONALLY OMITTED]..................................................................................5
1.4 LETTERS OF CREDIT........................................................................................5
1.5 BANK PRODUCTS............................................................................................9
1.6 JOINT AND SEVERAL LIABILITY OF BORROWERS.................................................................9
1.7 SECURITY................................................................................................10
1.8 SECTION 364(C)(1) SUPERPRIORITY ADMINISTRATIVE CLAIM AND
SECTIONS 364(C)(2) AND SECTION 364(C)(3) LIENS AND SECURITY INTERESTS..................................20
ARTICLE 2 INTEREST AND FEES......................................................................................22
2.1 INTEREST................................................................................................22
2.2 CONTINUATION AND CONVERSION ELECTIONS...................................................................22
2.3 MAXIMUM INTEREST RATE...................................................................................23
2.4 FACILITY FEE; SYNDICATION FEE; ADMINISTRATION FEE.......................................................24
2.5 UNUSED LINE FEE.........................................................................................24
2.6 LETTER OF CREDIT FEE....................................................................................24
ARTICLE 3 PAYMENTS AND PREPAYMENTS...............................................................................25
3.1 REVOLVING LOANS.........................................................................................25
3.2 TERMINATION OF FACILITY.................................................................................25
3.3 LIBOR RATE LOAN PREPAYMENTS.............................................................................25
3.4 PAYMENTS BY THE BORROWERS...............................................................................25
3.5 PAYMENTS AS REVOLVING LOANS.............................................................................26
3.6 APPORTIONMENT, APPLICATION AND REVERSAL OF PAYMENTS.....................................................26
3.7 INDEMNITY FOR RETURNED PAYMENTS.........................................................................26
3.8 AGENT'S AND LENDERS' BOOKS AND RECORDS; MONTHLY STATEMENTS..............................................27
ARTICLE 4 TAXES, YIELD PROTECTION AND ILLEGALITY.................................................................27
4.1 TAXES...................................................................................................27
4.2 ILLEGALITY..............................................................................................28
4.3 INCREASED COSTS AND REDUCTION OF RETURN.................................................................29
4.4 FUNDING LOSSES..........................................................................................29
4.5 INABILITY TO DETERMINE RATES............................................................................30
4.6 CERTIFICATES OF AGENT...................................................................................30
4.7 WITHHOLDING TAX.........................................................................................30
4.8 SURVIVAL................................................................................................31
ARTICLE 5........................................................................................................31
BOOKS AND RECORDS; FINANCIAL INFORMATION;........................................................................31
NOTICES; BANKRUPTCY CASES........................................................................................31
5.1 BOOKS AND RECORDS.......................................................................................31
5.2 FINANCIAL INFORMATION...................................................................................31
5.3 NOTICES TO THE LENDERS..................................................................................34
5.4 BANKRUPTCY CASES........................................................................................36
ARTICLE 6 GENERAL WARRANTIES AND REPRESENTATIONS.................................................................36
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6.1 AUTHORIZATION, VALIDITY, AND ENFORCEABILITY OF THIS AGREEMENT
AND THE LOAN DOCUMENTS..................................................................................36
6.2 VALIDITY AND PRIORITY OF SECURITY INTEREST..............................................................37
6.3 BORROWERS' ORGANIZATION AND QUALIFICATION OF BORROWERS..................................................37
6.4 OTHER SUBSIDIARIES AND AFFILIATES.......................................................................37
6.5 FINANCIAL STATEMENTS AND PROJECTIONS....................................................................37
6.6 [INTENTIONALLY OMITTED.]................................................................................38
6.7 DEBT....................................................................................................38
6.8 [INTENTIONALLY OMITTED.]................................................................................38
6.9 TITLE TO PROPERTY; LIENS................................................................................38
6.10 PROPRIETARY RIGHTS...................................................................................38
6.11 [INTENTIONALLY OMITTED.].............................................................................38
6.12 LITIGATION...........................................................................................38
6.13 [INTENTIONALLY OMITTED.].............................................................................38
6.14 ENVIRONMENTAL LAWS...................................................................................38
6.15 NO VIOLATION OF LAW..................................................................................39
6.16 NO DEFAULT...........................................................................................39
6.17 ERISA COMPLIANCE.....................................................................................39
6.18 TAXES................................................................................................40
6.19 REGULATED ENTITIES...................................................................................40
6.20 USE OF PROCEEDS; MARGIN REGULATIONS..................................................................40
6.21 COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC....................................................41
6.22 FULL DISCLOSURE......................................................................................41
6.23 BANK ACCOUNTS........................................................................................41
6.24 GOVERNMENTAL AUTHORIZATION...........................................................................41
6.25 SUBSIDIARY BORROWERS.................................................................................41
6.26 OTHER SUBSIDIARIES...................................................................................41
ARTICLE 7 AFFIRMATIVE AND NEGATIVE COVENANTS.....................................................................42
7.1 TAXES AND OTHER OBLIGATIONS.............................................................................42
7.2 LEGAL EXISTENCE AND GOOD STANDING.......................................................................42
7.3 COMPLIANCE WITH LAW AND AGREEMENTS; MAINTENANCE OF LICENSES.............................................42
7.4 MAINTENANCE OF PROPERTY; INSPECTION OF PROPERTY.........................................................43
7.5 INSURANCE...............................................................................................43
7.6 INSURANCE AND CONDEMNATION PROCEEDS.....................................................................44
7.7 ENVIRONMENTAL LAWS......................................................................................44
7.8 COMPLIANCE WITH ERISA...................................................................................45
7.9 MERGERS, CONSOLIDATIONS OR SALES........................................................................46
7.10 DISTRIBUTIONS; CAPITAL CHANGE; RESTRICTED INVESTMENTS................................................46
7.11 TRANSACTIONS AFFECTING COLLATERAL OR OBLIGATIONS.....................................................46
7.12 GUARANTIES...........................................................................................47
7.13 DEBT.................................................................................................47
7.14 PREPAYMENT...........................................................................................47
7.15 TRANSACTIONS WITH AFFILIATES.........................................................................48
7.16 INVESTMENT BANKING AND FINDER'S FEES.................................................................48
7.17 BUSINESS CONDUCTED...................................................................................48
7.18 LIENS................................................................................................48
7.19 [INTENTIONALLY OMITTED]..............................................................................48
7.20 NEW SUBSIDIARIES.....................................................................................48
7.21 FISCAL YEAR..........................................................................................49
7.22 EBITDAR..............................................................................................49
7.23 CASH EQUIVALENTS.....................................................................................49
7.24 USE OF PROCEEDS......................................................................................49
7.25 SECURITIZATION.......................................................................................49
7.26 ACCOUNTS.............................................................................................49
7.27 POST CLOSING MATTERS.................................................................................50
7.28 FURTHER ASSURANCES...................................................................................50
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ARTICLE 8 CONDITIONS OF LENDING..................................................................................50
8.1 CONDITIONS PRECEDENT TO MAKING OF INITIAL LOANS.........................................................50
8.2 CONDITIONS PRECEDENT TO EACH LOAN.......................................................................52
ARTICLE 9 DEFAULT; REMEDIES......................................................................................54
9.1 EVENTS OF DEFAULT.......................................................................................54
9.2 REMEDIES................................................................................................57
ARTICLE 10 TERM AND TERMINATION..................................................................................59
10.1 TERM AND TERMINATION.................................................................................59
ARTICLE 11 AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS..........................................59
11.1 AMENDMENTS AND WAIVERS...............................................................................59
11.2 ASSIGNMENTS; PARTICIPATIONS..........................................................................61
ARTICLE 12 THE AGENT.............................................................................................63
12.1 APPOINTMENT AND AUTHORIZATION........................................................................63
12.2 DELEGATION OF DUTIES.................................................................................63
12.3 LIABILITY OF AGENT...................................................................................63
12.4 RELIANCE BY AGENT....................................................................................64
12.5 NOTICE OF DEFAULT....................................................................................64
12.6 CREDIT DECISION......................................................................................64
12.7 INDEMNIFICATION......................................................................................65
12.8 AGENT IN INDIVIDUAL CAPACITY.........................................................................65
12.9 SUCCESSOR AGENT......................................................................................65
12.10 WITHHOLDING TAX......................................................................................66
12.11 COLLATERAL MATTERS...................................................................................67
12.12 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS..............................................68
12.13 AGENCY FOR PERFECTION................................................................................69
12.14 PAYMENTS BY AGENT TO LENDERS.........................................................................69
12.15 SETTLEMENT...........................................................................................69
12.16 LETTERS OF CREDIT; INTRA-LENDER ISSUES...............................................................72
12.17 CONCERNING THE COLLATERAL AND THE RELATED LOAN DOCUMENTS.............................................74
12.18 FIELD AUDIT AND EXAMINATION REPORTS; DISCLAIMER BY LENDERS...........................................74
12.19 RELATION AMONG LENDERS...............................................................................75
ARTICLE 13 MISCELLANEOUS.........................................................................................75
13.1 NO WAIVERS; CUMULATIVE REMEDIES......................................................................75
13.2 SEVERABILITY.........................................................................................75
13.3 GOVERNING LAW; CHOICE OF FORUM; SERVICE OF PROCESS...................................................76
13.4 WAIVER OF JURY TRIAL.................................................................................76
13.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES...........................................................77
13.6 OTHER SECURITY AND GUARANTIES........................................................................77
13.7 FEES AND EXPENSES....................................................................................77
13.8 NOTICES..............................................................................................78
13.9 WAIVER OF NOTICES....................................................................................79
13.10 BINDING EFFECT.......................................................................................79
13.11 INDEMNITY OF THE AGENT AND THE LENDERS BY THE BORROWERS..............................................79
13.12 LIMITATION OF LIABILITY..............................................................................80
13.13 FINAL AGREEMENT......................................................................................80
13.14 COUNTERPARTS.........................................................................................81
13.15 CAPTIONS.............................................................................................81
13.16 RIGHT OF SETOFF......................................................................................81
13.17 CONFIDENTIALITY......................................................................................81
13.18 CONFLICTS WITH OTHER LOAN DOCUMENTS..................................................................82
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ANNEXES, EXHIBITS AND SCHEDULES
ANNEX A - DEFINED TERMS
EXHIBIT A - FORM OF REVOLVING LOAN NOTE
EXHIBIT B - FORM OF BORROWING BASE CERTIFICATE
EXHIBIT C - FINANCIAL STATEMENTS
EXHIBIT D - FORM OF NOTICE OF BORROWING
EXHIBIT E - FORM OF NOTICE OF CONTINUATION/CONVERSION
EXHIBIT F - FORM OF INTERIM ORDER
EXHIBIT G - [INTENTIONALLY OMITTED]
EXHIBIT H - FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
SCHEDULE 1.1 - LENDERS' COMMITMENTS (ANNEX A - DEFINED TERMS)
SCHEDULE 1.7 - SECURITY MATTERS
SCHEDULE 6.3 - ORGANIZATION AND QUALIFICATIONS OF BORROWERS
SCHEDULE 6.4 - OTHER SUBSIDIARIES AND AFFILIATES
SCHEDULE 6.7 - DEBT; GUARANTIES; LIENS
SCHEDULE 6.12 - LITIGATION; JUDGMENTS
SCHEDULE 6.14 - ENVIRONMENTAL LAW
SCHEDULE 6.17 - ERISA COMPLIANCE
SCHEDULE 6.23 - BANK ACCOUNTS
SCHEDULE 6.25 - OTHER DOMESTIC SUBSIDIARIES
SCHEDULE 7.15 - TRANSACTIONS WITH AFFILIATES
SCHEDULE A-1 - EXISTING INVESTMENTS
SCHEDULE A-2 - LAND AND BUILDINGS
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POST-PETITION LOAN AND SECURITY AGREEMENT
This Post-Petition Loan and Security Agreement, dated as of
April 1, 2001, among the financial institutions from time to time parties hereto
(such financial institutions, together with their respective successors and
assigns, are referred to hereinafter each individually as a "Lender" and
collectively as the "Lenders"), Bank of America, N.A. with an office at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as agent for the Lenders (in its
capacity as agent, the "Agent"), ▇. ▇. ▇▇▇▇▇ & Co., a Delaware corporation, a
debtor and a debtor-in-possession under Chapter 11 of the Bankruptcy Code (as
defined below) (the "Company"), and the Subsidiaries of the Company which are
parties to this Agreement, each a debtor and a debtor-in-possession under
Chapter 11 of the Bankruptcy Code (as defined below) (together with the Company,
each a "Borrower" and collectively, the "Borrowers").
W I T N E S S E T H:
WHEREAS, the Borrowers, each of which is a debtor and
debtor-in-possession in a case pending under chapter 11 of the Bankruptcy Code
(the cases of the Borrowers each, a "Bankruptcy Case" and, collectively the
"Bankruptcy Cases"), have requested the Lenders to make available to the
Borrowers a revolving line of credit for loans and letters of credit in an
amount not to exceed $250,000,000, and which extensions of credit the Borrowers
will use for the purposes permitted hereunder;
WHEREAS, capitalized terms used in this Agreement and not
otherwise defined herein shall have the meanings ascribed thereto in Annex A
which is attached hereto and incorporated herein; the rules of construction
contained therein shall govern the interpretation of this Agreement, and all
Annexes, Exhibits and Schedules attached hereto are incorporated herein by
reference;
WHEREAS, the Lenders have agreed to make available to the
Borrowers a revolving credit facility upon the terms and conditions set forth in
this Agreement.
WHEREAS, on the Petition Date, the Borrowers will have filed
voluntary petitions with the Bankruptcy Court initiating the Bankruptcy Cases;
WHEREAS, the Borrowers have continued in possession of their
respective assets and in the management of their respective businesses as
debtors-in-possession pursuant to sections 1107 and 1108 of the Bankruptcy Code;
WHEREAS, to provide security for the repayment of the loans
and letters of credit made available pursuant hereto and payment of the other
obligations of the Borrowers under the Loan Documents, the Borrowers have agreed
to provide the Agent and the Lenders (upon and after the entry of the Interim
Order) with respect to the obligations of the Borrowers hereunder and under the
other Loan Documents, an allowed superpriority administrative expense claim in
each of the Bankruptcy Cases pursuant to section 364(c)(1) of the Bankruptcy
Code having priority over all administrative expenses of the kind specified in,
or arising or ordered under, any sections of the Bankruptcy Code, including
without limitation, sections 503(b), 105, 326, 328, 330, 331, 506(c), 507(a),
507(b), 546(c), 726 or 1112 of the Bankruptcy Code (subject
only to the Carve-Out) and liens and security interests with priority under
section 364(c)(2) and section 364(c)(3) of the Bankruptcy Code;
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged, the Lenders, the Agent, and the
Borrowers hereby agree as follows.
ARTICLE 1
LOANS, LETTERS OF CREDIT AND SECURITY
1.1 Total Facility. Subject to all of the terms and conditions of this
Agreement, the Lenders agree to make available a total credit facility of up to
$250,000,000 (the "Total Facility") to the Borrowers from time to time during
the term of this Agreement. The Total Facility shall be composed of a revolving
line of credit consisting of Revolving Loans and Letters of Credit.
1.2 Revolving Loans.
---------------
(a) (i) Amounts. Subject to the satisfaction of the conditions
precedent set forth in Article 8, each Lender severally, but not jointly,
agrees, upon the Borrower Representative's request from time to time on any
Business Day during the period from the Closing Date to the Termination Date, to
make revolving loans (the "Revolving Loans") to the Borrowers in amounts not to
exceed such Lender's Pro Rata Share of Availability, except for Non-Ratable
Loans and Agent Advances. The Lenders, however, in their unanimous discretion,
may elect to make Revolving Loans or issue or arrange to have issued Letters of
Credit in excess of the Borrowing Base on one or more occasions, but if they do
so, neither the Agent nor the Lenders shall be deemed thereby to have changed
the limits of the Borrowing Base or to be obligated to exceed such limits on any
other occasion. If the Aggregate Revolver Outstandings would exceed Availability
after giving effect to any Borrowing, the Lenders may refuse to make or may
otherwise restrict the making of Revolving Loans as the Lenders determine until
such excess has been eliminated, subject to the Agent's authority, in its sole
discretion, to make Agent Advances pursuant to the terms of Section 1.2(i). The
entire unpaid balance of the Revolving Loans and all other Obligations shall be
immediately due and payable in full in immediately available funds on the
Termination Date.
(ii) The Borrowers shall execute and deliver to each Lender that
requests the same a note to evidence the Revolving Loans of that Lender to the
Borrowers. Each note shall be in the principal amount of the Lender's Pro Rata
Share of the Revolving Loan Commitments, dated the date hereof and substantially
in the form of Exhibit A (each a "Revolving Loan Note" and, collectively, the
"Revolving Loan Notes"). Each Revolving Loan Note shall represent the joint and
several obligation of the Borrowers to pay the amount of Lender's Pro Rata Share
of the Revolving Loan Commitments, or, if less, such Lender's Pro Rata Share of
the aggregate unpaid principal amount of all Revolving Loans to the Borrowers
together with interest thereon as prescribed in Section 2.1.
2
(b) Procedure for Borrowing.
(1) Each Borrowing shall be made upon the Borrower Representative's
irrevocable written notice delivered to the Agent in the form of a notice of
borrowing ("Notice of Borrowing"), which must be received by the Agent prior to
(i) 12:00 noon (New York time) three Business Days prior to the requested
Funding Date, in the case of LIBOR Rate Loans and (ii) 11:00 a.m. (New York
time) on the requested Funding Date, in the case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which in the case of a LIBOR Rate
Loan must equal or exceed $5,000,000 (or the then unused portion of the
Commitments, if less) (and increments of $1,000,000 in excess of such amount);
(B) the requested Funding Date, which must be a Business Day;
(C) whether the Revolving Loans requested are to be Base Rate
Revolving Loans or LIBOR Revolving Loans (and if not specified, it shall be
deemed a request for a Base Rate Revolving Loan);
(D) the duration of the Interest Period for LIBOR Revolving Loans
(and if not specified, it shall be deemed a request for an Interest Period of
one month);
provided, however, that with respect to any Borrowing to be made on the Closing
Date, such Borrowings will initially consist of Base Rate Revolving Loans only.
(2) In lieu of delivering a Notice of Borrowing, the Borrower
Representative may give the Agent telephonic notice of such Borrowing request
for advances to the Designated Account on or before the deadline set forth
above. The Agent at all times shall be entitled to rely on such telephonic
notice in making such Revolving Loans, regardless of whether any written
confirmation is received.
(3) The Borrower Representative shall have no right to request a LIBOR
Rate Loan while a Default or an Event of Default has occurred and is continuing.
(c) Appointment of Borrower Representative; Reliance upon Authority.
(1) Each Borrower hereby designates the ▇. ▇. ▇▇▇▇▇ & Co.-Conn. as its
representative and agent on its behalf (the "Borrower Representative") for the
purposes of issuing Notices of Borrowing and Notices of Conversion/Continuation,
giving instructions with respect to the disbursement of the proceeds of the
Loans, selecting interest rate options, requesting Letters of Credit, giving and
receiving all other notices and consents hereunder or under any of the other
Loan Documents and taking all other actions (including in respect of compliance
with covenants) on behalf of any Borrower or Borrowers under the Loan Documents.
The Borrower Representative hereby accepts such appointment. The Agent and each
Lender may regard any notice or other communication pursuant to any Loan
Document from the Borrower Representative as a notice or communication from all
Borrowers, and may give any notice or communication required or permitted to be
given to any Borrower or Borrowers
3
hereunder to the Borrower Representative on behalf of such Borrower or
Borrowers. Each Borrower agrees that each notice, election, representation and
warranty, covenant, agreement and undertaking made on its behalf by the Borrower
Representative shall be deemed for all purposes to have been made by such
Borrower and shall be binding upon and enforceable against such Borrower to the
same extent as if the same had been made directly by such Borrower.
(2) Prior to the Closing Date, the Borrower Representative shall
deliver to the Agent, a notice setting forth an account of the Borrowers to
which the Agent is authorized to transfer the proceeds of the Revolving Loans
requested hereunder (the "Designated Account"). The Borrower Representative may
designate a replacement account from time to time by written notice. Such
Designated Account must be reasonably satisfactory to the Agent. The Agent is
entitled to rely conclusively on any person's request for Revolving Loans on
behalf of the Borrower Representative, so long as the proceeds thereof are to be
transferred to the Designated Account. The Agent has no duty to verify the
identity of any individual representing himself or herself as a person
authorized by the Borrower Representative to make such requests on its behalf.
(d) No Liability. The Agent shall not incur any liability to any Borrower
as a result of acting upon any notice referred to in Sections 1.2(b) and (c),
which the Agent believes in good faith to have been given by an officer or other
person duly authorized by the Borrower Representative to request Revolving
Loans. The crediting of Revolving Loans to the Designated Account conclusively
establishes the joint and several obligation of the Borrowers to repay such
Revolving Loans as provided herein.
(e) Notice Irrevocable. Any Notice of Borrowing (or telephonic notice in
lieu thereof) made pursuant to Section 1.2(b) shall be irrevocable. The
Borrowers shall be bound to borrow the funds requested therein in accordance
therewith.
(f) Agent's Election. Promptly after receipt of a Notice of Borrowing (or
telephonic notice in lieu thereof), the Agent shall elect to have the terms of
Section 1.2(g) or the terms of Section 1.2(h) apply to such requested Borrowing.
If the Bank declines in its sole discretion to make a Non-Ratable Loan pursuant
to Section 1.2(h), the terms of Section 1.2(g) shall apply to the requested
Borrowing.
(g) Making of Revolving Loans. If the Agent elects to have the terms of
this Section 1.2(g) apply to a requested Borrowing, then promptly after receipt
of a Notice of Borrowing or telephonic notice in lieu thereof, the Agent shall
notify the Lenders by telecopy, telephone or e-mail of the requested Borrowing.
Each Lender shall make its Pro Rata Share of the requested Borrowing available
to the Agent in immediately available funds, to the account from time to time
designated by Agent, not later than 2:00 p.m. (New York time) on the applicable
Funding Date. After the Agent's receipt of all proceeds of such Revolving Loans,
the Agent shall make the proceeds of such Revolving Loans available to the
Borrowers on the applicable Funding Date by transferring same day funds to the
Designated Account; provided, however, that the amount of Revolving Loans so
made on any date shall not exceed the Availability on such date.
4
(h) Making of Non-Ratable Loans.
(A) At the Borrowers' request, if the Agent elects, with the consent of
the Bank, to have the terms of this Section 1.2(h) apply to a requested
Borrowing requested to be made as a Base Rate Loan, the Bank shall make a
Revolving Loan in the amount of that Borrowing available to the Borrowers on the
applicable Funding Date by transferring same day funds to the Designated
Account. Each Revolving Loan made solely by the Bank pursuant to this Section is
herein referred to as a "Non-Ratable Loan", and such Revolving Loans are
collectively referred to as the "Non-Ratable Loans." Each Non-Ratable Loan shall
be subject to all the terms and conditions applicable to other Revolving Loans
except that all payments thereon shall be payable to the Bank solely for its own
account. The aggregate amount of Non-Ratable Loans outstanding at any time shall
not exceed $25,000,000. The Agent shall not request the Bank to make any
Non-Ratable Loan if (1) the Agent has received written notice from any Lender
that one or more of the applicable conditions precedent set forth in Article 8
will not be satisfied on the requested Funding Date for the applicable
Borrowing, or (2) the requested Borrowing would exceed Availability on that
Funding Date.
(B) The Non-Ratable Loans shall be secured by the Agent's Liens in and
to the Collateral and shall constitute Base Rate Revolving Loans and Obligations
hereunder.
(i) Agent Advances.
(A) Subject to the limitations set forth below, the Agent is authorized
by the Borrowers and the Lenders, from time to time in the Agent's sole
discretion, (A) after the occurrence of a Default or an Event of Default, or (B)
at any time that any of the other conditions precedent set forth in Article 8
have not been satisfied, to make Base Rate Revolving Loans to the Borrowers on
behalf of the Lenders in an aggregate amount outstanding at any time not to
exceed 10% of the Borrowing Base but not in excess of the Maximum Revolver
Amount which the Agent, in its reasonable business judgment, deems necessary or
desirable (1) to preserve or protect the Collateral, or any portion thereof, (2)
to enhance the likelihood of, or maximize the amount of, repayment of the Loans
and other Obligations, or (3) to pay any other amount chargeable to any Borrower
pursuant to the terms of this Agreement, including costs, fees and expenses as
described in Section 13.7 (any of such advances are herein referred to as "Agent
Advances"); provided, that the Required Lenders may at any time revoke the
Agent's authorization to make Agent Advances. Any such revocation must be in
writing and shall become effective prospectively upon the Agent's receipt
thereof.
(B) The Agent Advances shall be secured by the Agent's Liens in and to
the Collateral and shall constitute Base Rate Revolving Loans and Obligations
hereunder.
1.3 [Intentionally Omitted]
1.4 Letters of Credit.
(a) Agreement to Issue or Cause To Issue. Subject to the terms and
conditions of this Agreement, the Agent agrees (i) to cause the Letter of Credit
Issuer to issue for the account of any Borrower one or more
commercial/documentary or standby letters of credit ("Letter of Credit") and/or
(ii) to provide credit support or other enhancement to a Letter of
5
Credit Issuer acceptable to Agent, which issues a Letter of Credit for the
account of any Borrower (any such credit support or enhancement being herein
referred to as a "Credit Support") from time to time during the term of this
Agreement. Letters of Credit may be requested for the benefit of Other
Subsidiaries (as long as such transaction is not prohibited by Section 7.10
hereof); provided that a Borrower shall be the account party with respect
thereto (and the fact that such Letters of Credit may be for the benefit of
Other Subsidiaries shall not effect the Borrowers' joint and several
reimbursement Obligations with respect to such Letters of Credit and any related
Credit Supports); provided further, that the sum of the undrawn face amount of
all such Letters of Credit plus all amounts drawn thereunder for which the
Borrowers have not been repaid by the Other Subsidiaries shall not exceed
$15,000,000 in the aggregate at any time.
(b) Amounts; Outside Expiration Date. The Agent shall not have any
obligation to issue or cause to be issued any Letter of Credit or to provide
Credit Support for any Letter of Credit at any time if: (i) the maximum face
amount of the requested Letter of Credit is greater than the Unused Letter of
Credit Subfacility at such time; (ii) the maximum undrawn amount of the
requested Letter of Credit and all commissions, fees, and charges due from the
Borrowers in connection with the opening thereof would exceed Availability at
such time; or (iii) such Letter of Credit has an expiration date (1) in the case
of standby letters of credit, of more than 12 months from the date of issuance
(although any such Letter of Credit may provide for automatic extensions of its
expiration date for one or more successive 12 month periods, provided that the
Letter of Credit Issuer has the right to terminate such Letter of Credit on each
such annual expiration date) and (2) in the case of documentary letters of
credit, 180 days from the date of issuance. With respect to any Letter of Credit
which contains any "evergreen" or automatic renewal provision, each Lender shall
be deemed to have consented to any such extension or renewal unless any such
Lender shall have provided to the Agent, written notice that it declines to
consent to any such extension or renewal at least thirty (30) days prior to the
date on which the Letter of Credit Issuer is entitled to decline to extend or
renew the Letter of Credit. If all of the requirements of this Section 1.4 are
met and no Default or Event of Default has occurred and is continuing, no Lender
shall decline to consent to any such extension or renewal.
(c) Other Conditions. In addition to conditions precedent contained in
Article 8, the obligation of the Agent to issue or to cause to be issued any
Letter of Credit or to provide Credit Support for any Letter of Credit is
subject to the following conditions precedent having been satisfied in a manner
reasonably satisfactory to the Agent:
(1) The Borrower Representative shall have delivered to the Letter of
Credit Issuer, at such times and in such manner as such Letter of Credit Issuer
may prescribe, an application in form and substance satisfactory to such Letter
of Credit Issuer and reasonably satisfactory to the Agent for the issuance of
the Letter of Credit and such other documents as may be required pursuant to the
terms thereof, and the form, terms and purpose of the proposed Letter of Credit
shall be reasonably satisfactory to the Agent and the Letter of Credit Issuer;
and
(2) As of the date of issuance, no order of any court, arbitrator or
Governmental Authority shall purport by its terms to enjoin or restrain money
center banks generally from issuing letters of credit of the type and in the
amount of the proposed Letter of Credit, and no law, rule or regulation
applicable to money center banks generally and no request
6
or directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over money center banks generally shall prohibit, or
request that the proposed Letter of Credit Issuer refrain from, the issuance of
letters of credit generally or the issuance of such Letters of Credit.
(d) Issuance of Letters of Credit.
(1) Request for Issuance. The Borrower Representative must notify the
Agent of a requested Letter of Credit at least two (2) Business Days prior to
the proposed issuance date. Such notice must specify the Borrower for whose
account such Letter of Credit will be issued, the original face amount of the
Letter of Credit requested, the Business Day of issuance of such requested
Letter of Credit, whether such Letter of Credit may be drawn in a single or in
partial draws, the Business Day on which the requested Letter of Credit is to
expire, the purpose for which such Letter of Credit is to be issued, and the
beneficiary of the requested Letter of Credit. The Borrower Representative shall
attach to such notice the proposed form of the Letter of Credit.
(2) Responsibilities of the Agent; Issuance. As of the Business Day
immediately preceding the requested issuance date of the Letter of Credit, the
Agent shall determine the amount of the Unused Letter of Credit Subfacility and
Availability. If (i) the face amount of the requested Letter of Credit is less
than the Unused Letter of Credit Subfacility and (ii) the amount of such
requested Letter of Credit and all commissions, fees, and charges due from the
Borrowers in connection with the opening thereof would not exceed Availability,
the Agent shall cause the Letter of Credit Issuer to issue the requested Letter
of Credit on the requested issuance date so long as the other conditions hereof
are met.
(3) No Extensions or Amendment. The Agent shall not be obligated to
cause the Letter of Credit Issuer to extend or amend any Letter of Credit issued
pursuant hereto unless the requirements of this Section 1.4 are met as though a
new Letter of Credit were being requested and issued.
(e) Payments Pursuant to Letters of Credit. The Borrowers jointly and
severally agree to reimburse immediately the Letter of Credit Issuer for any
draw under any Letter of Credit and the Agent for the account of the Lenders
upon any payment pursuant to any Credit Support, and to pay the Letter of Credit
Issuer the amount of all other charges and fees payable to the Letter of Credit
Issuer in connection with any Letter of Credit immediately when due,
irrespective of any claim, setoff, defense or other right which any Borrower may
have at any time against the Letter of Credit Issuer or any other Person. Except
as otherwise agreed by the Agent, each drawing under any Letter of Credit shall
constitute a request by the Borrowers to the Agent for a Borrowing of a Base
Rate Revolving Loan in the amount of such drawing. The Funding Date with respect
to such Borrowing shall be the date of such drawing.
(f) Indemnification; Exoneration; Power of Attorney
(1) Indemnification. In addition to amounts payable as elsewhere
provided in this Section 1.4, the Borrowers jointly and severally agree to
protect, indemnify, pay and save the Lenders and the Agent harmless from and
against any and all claims, demands,
7
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) which any Lender or the Agent (other than any Lender in its
capacity as Letter of Credit Issuer) may incur or be subject to as a
consequence, direct or indirect, of the issuance of any Letter of Credit or the
provision of any Credit Support or enhancement in connection therewith. The
Borrowers' obligations under this Section shall survive payment of all other
Obligations.
(2) Assumption of Risk by the Borrowers. As among the Borrowers, the
Lenders, and the Agent, the Borrowers assume all risks of the acts and omissions
of, or misuse of any of the Letters of Credit by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in limitation of the
foregoing, the Lenders and the Agent shall not be responsible for: (A) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any Person in connection with the application for and issuance of
and presentation of drafts with respect to any of the Letters of Credit, even if
it should prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; (C) the
failure of the beneficiary of any Letter of Credit to comply duly with
conditions required in order to draw upon such Letter of Credit; (D) errors,
omissions, interruptions, or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher;
(E) errors in interpretation of technical terms; (F) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof; (G) the misapplication by
the beneficiary of any Letter of Credit of the proceeds of any drawing under
such Letter of Credit; (H) any consequences arising from causes beyond the
control of the Lenders or the Agent, including any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto Governmental
Authority or (I) the Letter of Credit Issuer's honor of a draw for which the
draw or any certificate fails to comply in any respect with the terms of the
Letter of Credit. None of the foregoing shall affect, impair or prevent the
vesting of any rights or powers of the Agent or any Lender under this Section
1.4(f).
(3) Exoneration. Without limiting the foregoing, no action or omission
whatsoever by Agent or any Lender (excluding any Lender in its capacity as a
Letter of Credit Issuer) shall result in any liability of Agent or any Lender to
any Borrower, or relieve any Borrower of any of its obligations hereunder to any
such Person.
(4) Rights Against Letter of Credit Issuer. Nothing contained in this
Agreement is intended to limit any Borrower's rights, if any, with respect to
the Letter of Credit Issuer which arise as a result of the letter of credit
application and related documents executed by and between such Borrower and the
Letter of Credit Issuer.
(5) Account Party. Each Borrower hereby authorizes and directs any
Letter of Credit Issuer to name such Borrower as the "Account Party" therein and
to deliver to the Agent all instruments, documents and other writings and
property received by the Letter of Credit Issuer pursuant to the Letter of
Credit, and to accept and rely upon the Agent's instructions and agreements with
respect to all matters arising in connection with the Letter of Credit or the
application therefor.
8
(g) Supporting Letter of Credit; Cash Collateral. If, notwithstanding the
provisions of Section 1.4(b) and Section 10.1, any Letter of Credit or Credit
Support is outstanding upon the termination of this Agreement, then upon such
termination the Borrowers shall, with respect to each Letter of Credit or Credit
Support then outstanding, at the election of the Borrower Representative either
(i) deposit with the Agent, for the ratable benefit of the Agent and the
Lenders, a standby letter of credit in form and substance satisfactory to the
Agent, issued by an issuer satisfactory to the Agent (a "Supporting Letter of
Credit") or (ii) deposit immediately available funds into a cash collateral
account with the Agent and under the sole dominion and control of the Agent (the
"Cash Collateral"), for the ratable benefit of the Agent and the Lenders, in
either case in an amount equal to the aggregate undrawn amount of such Letter of
Credit or such Credit Support plus any fees and expenses associated with such
Letter of Credit or such Credit Support. The Agent shall be entitled to make
draws under such Supporting Letter of Credit, or to indefeasibly apply such Cash
Collateral, in amounts necessary to reimburse the Agent and the Lenders for
payments to be made by the Agent and the Lenders under such Letter of Credit or
Credit Support and any fees and expenses associated with such Letter of Credit
or Credit Support. Such Supporting Letter of Credit or Cash Collateral shall be
held by the Agent, for the ratable benefit of the Agent and the Lenders, as
security for, and to provide for the payment of, the aggregate undrawn amount of
such Letters of Credit or such Credit Support remaining outstanding. After such
Letters of Credit and such Credit Supports shall have expired or otherwise have
been fully drawn upon and all reimbursement obligations and fees with respect
thereto shall have been paid in full, the balance, if any, of such Cash
Collateral and/or all remaining outstanding Supporting Letters of Credit, if
any, shall be returned to the Borrower Representative or as otherwise required
by law.
1.5 Bank Products. Any Borrower may request and the Agent may, in its sole
and absolute discretion, arrange for any Borrower to obtain from the Bank or the
Bank's Affiliates Bank Products although no Borrower is required to do so. If
Bank Products are provided by an Affiliate of the Bank, the Borrowers jointly
and severally agree to indemnify and hold the Agent, the Bank and the Lenders
harmless from any and all costs and obligations now or hereafter incurred by the
Agent, the Bank or any of the Lenders which arise from any indemnity given by
the Agent to its Affiliates related to such Bank Products; provided, however,
nothing contained herein is intended to limit any Borrower's rights, with
respect to the Bank or its Affiliates, if any, which arise as a result of the
execution of documents by and between such Borrower and the Bank which relate to
Bank Products. The agreement contained in this Section shall survive termination
of this Agreement. The Borrowers acknowledge and agree that the obtaining of
Bank Products from the Bank or the Bank's Affiliates (a) is in the sole and
absolute discretion of the Bank or the Bank's Affiliates, and (b) is subject to
all rules and regulations of the Bank or the Bank's Affiliates.
1.6 Joint and Several Liability of Borrowers. Each Borrower acknowledges and
agrees that all Obligations (including without limitation the Borrowers'
Obligations in respect of the Loans and in respect of any Letter of Credit or
Credit Support) shall be the joint and several obligations of the Borrowers,
regardless of whether such Borrower actually receives Loans or other extensions
of credit hereunder or the amounts of such Loans received or the manner in which
the Agent and/or any Lender accounts for such Loans or other extensions of
credit on its books and records.
9
1.7 Security.
(a) Grant Of Lien. As security for all Obligations, each Borrower hereby
grants to the Agent, for the benefit of the Agent and the Lenders, a continuing
security interest in, lien on, and right of set-off against, all of the assets
of such Borrower, including, without limitation, the following property and
assets of such Borrower, whether now owned or existing or hereafter acquired or
arising, regardless of where located:
(i) all Accounts;
(ii) all Inventory;
(iii) all contract rights;
(iv) all Chattel Paper;
(v) all Documents;
(vi) all Instruments;
(vii) all Supporting Obligations;
(viii) all General Intangibles;
(ix) all Equipment;
(x) all Investment Property;
(xi) all money, cash, cash equivalents, securities and other property
of any kind of such Borrower held directly or indirectly by the Agent or any
Lender;
(xii) all of such Borrower's deposit accounts, credits, and balances
with and other claims against the Agent or any Lender or any of their Affiliates
or any other financial institution with which the Borrower maintains deposits;
(xiii) all causes of action and all monies and other property of any
kind received therefrom, and all monies and other property of any kind recovered
by any Borrower;
(xiv) all Real Estate;
(xv) all policies of insurance, the cash surrender value of all
policies of insurance and all rights under each policy of insurance;
(xvi) all books, records and other property related to or referring to
any of the foregoing, including books, records, account ledgers, data processing
records, computer software and other property and General Intangibles at any
time evidencing or relating to any of the foregoing; and
10
(xvii) all accessions to, substitutions for and replacements, products
and proceeds of any of the foregoing, including, but not limited to, proceeds of
any insurance policies, claims against third parties, and condemnation or
requisition payments with respect to all or any of the foregoing.
Notwithstanding the foregoing, Collateral shall not include (i) any equity
interest in a Foreign Subsidiary (ii) any avoidance claim arising under Sections
544, 546, 547, 548, 549, 550 or 553 of the Bankruptcy Code (iii) the COLI (it
being agreed and understood that any and all proceeds of the assets described in
the clauses (i) and (iii) of this sentence shall constitute Collateral).
(b) Perfection And Protection Of Security Interest.
(1) Each Borrower shall, at its expense, perform all steps requested by
the Agent at any time to perfect, maintain, protect, and enforce the Agent's
Liens, including: (i) executing, delivering and/or filing and recording of
mortgage(s), the copyright security agreement and patent and trademark
agreements and executing and filing financing or continuation statements, and
amendments thereof, in form and substance reasonably satisfactory to the Agent;
(ii) delivering to the Agent the originals of all Instruments, Documents, and
Chattel Paper, and all other Collateral of which the Agent determines it should
have physical possession in order to perfect and protect the Agent's security
interest therein, duly pledged, endorsed or assigned to the Agent without
restriction; (iii) delivering to the Agent warehouse receipts covering any
portion of the Collateral located in warehouses and for which warehouse receipts
are issued and certificates of title covering any portion of the Collateral for
which certificates of title have been issued; (iv) when an Event of Default has
occurred and is continuing, transferring Inventory to warehouses or other
locations designated by the Agent; (v) placing notations on such Borrower's
books of account to disclose the Agent's security interest; (vi) obtaining
control agreements from securities intermediaries with respect to financial
assets in the possession of securities intermediaries; (vii) assigning and
delivering to the Agent all Supporting Obligations, including letters of credit
on which any Borrower is named beneficiary with the written consent of the
issuer thereof; and (viii) taking such other steps as are deemed necessary or
desirable by the Agent to maintain and protect the Agent's Liens. To the extent
permitted by applicable law, the Agent may file, without any Borrower's
signature, one or more financing statements disclosing the Agent's Liens. The
Borrowers agree that a carbon, photographic, photostatic, or other reproduction
of this Agreement or of a financing statement is sufficient as a financing
statement.
(2) If any Collateral is at any time in the possession or control of
any warehouseman, bailee or any of any Borrower's agents or processors, then
such Borrower shall notify the Agent thereof and shall, if requested by the
Agent, obtain a bailee letter acknowledged by the bailee that notifies such
Person of the Agent's security interest in such Collateral and instructs such
Person to hold all such Collateral for the Agent's account subject to the
Agent's instructions. If at any time any Collateral is located in any operating
facility of any Borrower that is leased by such Borrower, then, at the request
of the Agent, such Borrower shall use its best efforts to obtain written
landlord lien waivers or subordinations, in form and substance reasonably
satisfactory to the Agent, that waives or subordinates all present and future
Liens which the owner or lessor of such premises may be entitled to assert
against the Collateral.
11
(3) From time to time, each Borrower shall, upon the Agent's request,
execute and deliver confirmatory written instruments pledging to the Agent, for
the ratable benefit of the Agent and the Lenders, the Collateral, but a
Borrower's failure to do so shall not affect or limit any security interest or
any other rights of the Agent or any Lender in and to the Collateral with
respect to any Borrower. So long as this Agreement is in effect and until all
Obligations have been fully satisfied, the Agent's Liens shall continue in full
force and effect in all Collateral (whether or not deemed eligible for the
purpose of calculating the Availability or as the basis for any advance, loan,
extension of credit, or other financial accommodation).
(c) Location of Collateral. Each Borrower represents and warrants to the
Agent and the Lenders that: (1) Schedule 1.7 sets forth a correct and complete
list of each Borrower's chief executive office, the location of its books and
records, the locations of its Collateral, and the locations of all of its other
places of business (other than in each case locations of real property where no
Borrower has any operations and where no Collateral (other than such real
property) is located); and (2) Schedule 1.7 correctly identifies any of such
facilities and locations that are not owned by a Borrower and sets forth the
names of the owners and lessors or sublessors of such facilities and locations.
Each Borrower covenants and agrees that it will not (i) maintain any Collateral
at any location other than those locations listed for such Borrower on Schedule
1.7 (other than Collateral consisting solely of real property at which no
Borrower has any operations), (ii) otherwise change or add to any of such
locations, or (iii) change the location of its chief executive office from the
location identified in Schedule 1.7, unless it gives the Agent at least thirty
(30) days' prior written notice thereof and executes any and all financing
statements and other documents that the Agent reasonably requests in connection
therewith.
(d) [Intentionally Omitted]
(e) Appraisals. Whenever a Default or Event of Default exists, and at such
other times not more frequently than once a year as the Agent requests, each
Borrower shall, at its expense and upon the Agent's request, provide the Agent
with appraisals or updates thereof of any or all of the Collateral from an
appraiser, and prepared on a basis, satisfactory to the Agent, such appraisals
and updates to include, without limitation, information required by applicable
law and regulation and by the internal policies of the Lenders.
(f) Access And Examination. Each Borrower will deliver to the Agent any
instrument necessary for the Agent to obtain records from any service bureau
maintaining records for a Borrower. The Agent may, and at the direction of the
Majority Lenders shall, at any time when a Default or Event of Default exists,
and at the Borrowers' expense, make copies of all of the Borrowers' books and
records, or require each Borrower to deliver such copies to the Agent. The Agent
may, without expense to the Agent, use such of the Borrowers' respective
personnel, supplies, and Real Estate as may be reasonably necessary for
maintaining or enforcing the Agent's Liens. The Agent shall have the right, at
any time, in the Agent's name or in the name of a nominee of the Agent, to
verify the validity, amount or any other matter relating to the Accounts,
Inventory, or other Collateral, by mail, telephone, or otherwise.
(g) Collateral Reporting. Each Borrower shall provide the Agent with the
following documents at the following times in form satisfactory to the Agent:
(1) on a monthly
12
basis, by the 20th day of the following month, or more frequently if requested
by the Agent, an aging of the Borrowers' Accounts, together with a
reconciliation to the corresponding Borrowing Base and to the Borrowers' general
ledgers; (2) on a monthly basis by the 20th day of the following month, or more
frequently if requested by the Agent, an aging of the Borrowers' accounts
payable; (3) on a monthly basis by the 20th day of the following month (or more
frequently if requested by the Agent), a detailed calculation of Eligible
Accounts and Eligible Inventory; (4) on a monthly basis by the 20th day of the
following month (or more frequently if requested by the Agent), Inventory
reports by category and location, together with a reconciliation to the
corresponding Borrowing Base and to the Borrowers' general ledgers; (5) upon
request, copies of invoices in connection with the Borrowers' Accounts, customer
statements, credit memos, remittance advices and reports, deposit slips,
shipping and delivery documents in connection with the Borrowers' Accounts and
for Inventory and Equipment acquired by the Borrowers, purchase orders and
invoices; (6) such other reports as to the Collateral of the Borrowers as the
Agent shall reasonably request from time to time; and (7) with the delivery of
each of the foregoing, a certificate of the Borrowers executed by an officer
thereof certifying as to the accuracy and completeness of the foregoing. If any
of the Borrowers' records or reports of the Collateral are prepared by an
accounting service or other agent, each Borrower hereby authorizes such service
or agent to deliver such records, reports, and related documents to the Agent,
for distribution to the Lenders.
(h) Accounts.
(1) Each Borrower hereby represents and warrants to the Agent and the
Lenders, with respect to the Borrowers' Accounts, that: (i) each existing
Account represents, and each future Account will represent, a bona fide sale or
lease and delivery of goods by the applicable Borrower, or rendition of services
by applicable Borrower, in the ordinary course of applicable Borrower's
business; (ii) each existing Account is, and each future Account will be, for a
liquidated amount payable by the Account Debtor thereon on the terms set forth
in the invoice therefor or in the schedule thereof delivered to the Agent,
without any offset, deduction, defense, or counterclaim except those known to
the Borrower and disclosed to the Agent pursuant to this Agreement; (iii) no
payment will be received with respect to any Account, and no credit, discount,
or extension, or agreement therefor will be granted on any Account, except as
reported to the Agent in Borrowing Base Certificates delivered in accordance
with this Agreement; (iv) each copy of an invoice delivered to the Agent by any
Borrower will be a genuine copy of the original invoice sent to the Account
Debtor named therein; and (v) all goods described in any invoice representing a
sale of goods will have been delivered to the Account Debtor and all services of
a Borrower described in each invoice will have been performed.
(2) The Borrowers shall not re-date any invoice or sale or make sales
on extended dating beyond that customary in the Borrowers' business or extend or
modify any Account. If a Borrower becomes aware of any matter adversely
affecting the collectibility of any Account or the Account Debtor therefor
involving an amount greater than $1,000,000, including information regarding the
Account Debtor's creditworthiness, such Borrower will promptly so advise the
Agent and exclude such Account from Eligible Accounts.
(3) The Borrowers shall not accept any note or other instrument (except
a check or other instrument for the immediate payment of money) with respect to
any
13
Account without the Agent's written consent. If the Agent consents to the
acceptance of any such instrument, it shall be considered as evidence of the
Account and not payment thereof and the applicable Borrower will promptly
deliver such instrument to the Agent, endorsed by such Borrower to the Agent in
a manner satisfactory in form and substance to the Agent. Regardless of the form
of presentment, demand, notice of protest with respect thereto, the Borrowers
shall remain liable thereon until such instrument is paid in full.
(4) The Borrowers shall notify the Agent promptly of all disputes and
claims in excess of $1,000,000 with any Account Debtor, and agrees to settle,
contest, or adjust such dispute or claim at no expense to the Agent or any
Lender. No discount, credit or allowance shall be granted to any such Account
Debtor without the Agent's prior written consent, except for discounts, credits
and allowances made or given in the ordinary course of the Borrowers' business
when no Event of Default exists hereunder. The Borrowers shall send the Agent a
copy of each credit memorandum in excess of $1,000,000 as soon as issued, and
the Borrowers shall promptly report that credit on Borrowing Base Certificates
submitted by or on behalf of the Borrowers. The Agent may at all times when an
Event of Default exists hereunder, settle or adjust disputes and claims directly
with Account Debtors for amounts and upon terms which the Agent or the Majority
Lenders, as applicable, shall consider advisable and, in all cases, the Agent
will credit the Borrowers' Loan Account with the net amounts received by the
Agent in payment of any Accounts.
(5) If an Account Debtor returns any Inventory to a Borrower when no
Event of Default exists, then such Borrower shall promptly determine the reason
for such return and shall issue a credit memorandum to the Account Debtor in the
appropriate amount. The Borrower Representative shall, promptly upon obtaining
knowledge thereof, report to the Agent any return involving an amount in excess
of $1,000,000. Each such report shall indicate the reasons for the returns and
the locations and condition of the returned Inventory. In the event any Account
Debtor returns Inventory to a Borrower when an Event of Default exists, such
Borrower, upon the request of the Agent, shall: (i) hold the returned Inventory
in trust for the Agent; (ii) segregate all returned Inventory from all of its
other property; (iii) dispose of the returned Inventory solely according to the
Agent's written instructions; and (iv) not issue any credits or allowances with
respect thereto without the Agent's prior written consent. All returned
Inventory shall be subject to the Agent's Liens thereon. Whenever any Inventory
is returned, the related Account shall be deemed ineligible to the extent of the
amount owing by the Account Debtor with respect to such returned Inventory and
such returned Inventory shall not be Eligible Inventory.
(i) Inventory; Perpetual Inventory.
(1) Each Borrower represents and warrants to the Agent and the Lenders
and agrees with the Agent and the Lenders that all of the Inventory owned by
each Borrower is and will be held for sale or lease, or to be furnished in
connection with the rendition of services, in the ordinary course of each
Borrower's business, and is and will be fit for such purposes. Each Borrower
will keep its Inventory in good and marketable condition, except for damaged or
defective goods arising in the ordinary course of such Borrower's business. No
Borrower will, without the prior written consent of the Agent, acquire or accept
any Inventory on consignment or approval. Each Borrower agrees that all
Inventory produced by such Borrower
14
in the United States of America will be produced in accordance with the Federal
Fair Labor Standards Act of 1938, as amended, and all rules, regulations, and
orders thereunder. Each Borrower will conduct a physical count of the Inventory
at least once per Fiscal Year, and after and during the continuation of an Event
of Default, at such other times as the Agent requests. The Borrowers will
maintain a perpetual inventory reporting system at all times. No Borrower will,
without the Agent's written consent, sell any Inventory on a ▇▇▇▇-and-hold,
guaranteed sale, sale and return, sale on approval, consignment, or other
repurchase or return basis.
(2) In connection with all Inventory financed by Letters of Credit,
each Borrower will, at the Agent's request, instruct all suppliers, carriers,
forwarders, customs brokers, warehouses or others receiving or holding cash,
checks, Inventory, Documents or Instruments in which the Agent holds a security
interest to deliver them to the Agent and/or subject to the Agent's order, and
if they shall come into a Borrower's possession, to deliver them, upon request,
to the Agent in their original form. Each Borrower shall also, at the Agent's
request, designate the Agent as the consignee on all bills of lading and other
negotiable and non-negotiable documents.
(j) Equipment.
(1) Each Borrower represents and warrants to the Agent and the Lenders
and agrees with the Agent and the Lenders that all of the Equipment owned by
such Borrower is and will be used or held for use in such Borrower's business,
and is and will be fit for such purposes. Each Borrower shall keep and maintain
its Equipment in good operating condition and repair (ordinary wear and tear
excepted) and shall make all necessary replacements thereof.
(2) Each Borrower shall promptly inform the Agent of any material
additions to or deletions from the Equipment. No Borrower shall permit any
Equipment to become a fixture with respect to real property or to become an
accession with respect to other personal property with respect to which real or
personal property the Agent does not have a Lien. No Borrower will, without the
Agent's prior written consent, alter or remove any identifying symbol or number
on any of such Borrower's Equipment constituting Collateral.
(3) Except as set forth herein, no Borrower shall, without the Agent's
prior written consent, sell, lease as a lessor, or otherwise dispose of any of
such Borrower's Equipment.
(k) Documents, Instruments, And Chattel Paper. Each Borrower represents and
warrants to the Agent and the Lenders that (a) all Documents, Instruments, and
Chattel Paper describing, evidencing, or constituting Collateral, and all
signatures and endorsements thereon, are and will be complete, valid, and
genuine, and (b) all goods evidenced by such Documents, Instruments, and Chattel
Paper are and will be owned by the Borrowers, free and clear of all Liens other
than Permitted Liens.
(l) Right To Cure. The Agent may, in its discretion, and shall, at the
direction of the Majority Lenders, pay any amount or do any act required of a
Borrower hereunder or under any other Loan Document in order to preserve,
protect, maintain or enforce the
15
Obligations, the Collateral or the Agent's Liens therein, and which a Borrower
fails to pay or do, including payment of any judgment against a Borrower, any
insurance premium, any warehouse charge, any finishing or processing charge, any
landlord's or bailee's claim, and any other Lien upon or with respect to the
Collateral. All payments that the Agent makes under this Section 1.7 and all
out-of-pocket costs and expenses that the Agent pays or incurs in connection
with any action taken by it hereunder shall be charged to the Borrowers' Loan
Account as a Revolving Loan. Any payment made or other action taken by the Agent
under this Section 1.7 shall be without prejudice to any right to assert an
Event of Default hereunder and to proceed thereafter as herein provided.
(m) Power Of Attorney. Each Borrower hereby appoints the Agent and the
Agent's designee as such Borrower's attorney, with power: (a) to endorse such
Borrower's name on any checks, notes, acceptances, money orders, or other forms
of payment or security that come into the Agent's or any Lender's possession;
(b) to sign such Borrower's name on any invoice, ▇▇▇▇ of lading, warehouse
receipt or other negotiable or non-negotiable Document constituting Collateral,
on drafts against customers, on assignments of Accounts, on notices of
assignment, financing statements and other public records and to file any such
financing statements by electronic means with or without a signature as
authorized or required by applicable law or filing procedure; (c) so long as any
Event of Default has occurred and is continuing to, to the extent not prohibited
by the Bankruptcy Court, notify the post office authorities to change the
address for delivery of such Borrower's mail to an address designated by the
Agent and to receive, open and dispose of all mail addressed to such Borrower;
(d) to send requests for verification of Accounts to customers or Account
Debtors; (e) to complete in the Borrower's name or the Agent's name, any order,
sale or transaction, obtain the necessary Documents in connection therewith, and
collect the proceeds thereof; (f) to clear Inventory through customs in such
Borrower's name, the Agent's name or the name of the Agent's designee, and to
sign and deliver to customs officials powers of attorney in such Borrower's name
for such purpose; and (g) to do all things necessary to carry out this
Agreement. Each Borrower ratifies and approves all acts of such attorney. None
of the Lenders or the Agent nor their attorneys will be liable for any acts or
omissions or for any error of judgment or mistake of fact or law except for
their gross negligence or willful misconduct. This power, being coupled with an
interest, is irrevocable until this Agreement has been terminated and the
Obligations have been fully satisfied.
(n) The Agent's And Lenders' Rights, Duties And Liabilities.
(1) Each Borrower assumes all responsibility and liability arising from
or relating to the use, sale or other disposition of the Collateral. The
Obligations shall not be affected by any failure of the Agent or any Lender to
take any steps to perfect the Agent's Liens or to collect or realize upon the
Collateral, nor shall loss of or damage to the Collateral release any Borrower
from any of the Obligations. Following the occurrence and during the
continuation of an Event of Default, the Agent may (but shall not be required
to), and at the direction of the Majority Lenders shall, without notice to or
consent from any Borrower, ▇▇▇ upon or otherwise collect, extend the time for
payment of, modify or amend the terms of, compromise or settle for cash, credit,
or otherwise upon any terms, grant other indulgences, extensions, renewals,
compositions, or releases, and take or omit to take any other action with
respect to the Collateral, any security therefor, any agreement relating
thereto, any insurance
16
applicable thereto, or any Person liable directly or indirectly in connection
with any of the foregoing, without discharging or otherwise affecting the
liability of any Borrower for the Obligations or under this Agreement or any
other agreement now or hereafter existing between the Agent and/or any Lender
and any Borrower.
(2) It is expressly agreed by each Borrower that, anything herein to
the contrary notwithstanding, each Borrower shall remain liable under each of
its contracts and each of its licenses to observe and perform all the conditions
and obligations to be observed and performed by it thereunder. Neither Agent nor
any Lender shall have any obligation or liability under any contract or license
by reason of or arising out of this Agreement or the granting herein of a Lien
thereon or the receipt by Agent or any Lender of any payment relating to any
contract or license pursuant hereto. Neither Agent nor any Lender shall be
required or obligated in any manner to perform or fulfill any of the obligations
any Borrower under or pursuant to any contract or license, or to make any
payment, or to make any inquiry as to the nature or the sufficiency of any
payment received by it or the sufficiency of any performance by any party under
any contract or license, or to present or file any claims, or to take any action
to collect or enforce any performance or the payment of any amounts which may
have been assigned to it or to which it may be entitled at any time or times.
(3) Agent may at any time after a Default or Event of Default shall
have occurred and be continuing, without prior notice to any Borrower, notify
Account Debtors, parties to the Contracts and obligors in respect of Instruments
and Chattel Paper, that the Accounts and the right, title and interest of a
Borrower in and under such Contracts, Instruments and Chattel Paper have been
assigned to Agent, and that payments shall be made directly to Agent, for itself
and the benefit of Lenders. Upon the request of Agent, each Borrower shall so
notify Account Debtors, parties to Contracts and obligors in respect of
Instruments and Chattel Paper.
(4) Agent may at any time in Agent's own name or in the name of any
Borrower communicate with Account Debtors, parties to Contracts, obligors in
respect of Instruments and obligors in respect of Chattel Paper to verify with
such Persons, to Agent's satisfaction, the existence, amount and terms of any
such Accounts, Contracts, Instruments or Chattel Paper. If a Default or Event of
Default shall have occurred and be continuing, each Borrower, at its own
expense, shall cause the independent certified public accountants then engaged
by such Borrower to prepare and deliver to Agent and each Lender at any time and
from time to time promptly upon Agent's request the following reports with
respect to such Borrower: (i) a reconciliation of all Accounts; (ii) an aging of
all Accounts; (iii) trial balances; and (iv) a test verification of such
Accounts as Agent may request. Each Borrower, at its own expense, shall deliver
to Agent the results of each physical verification, if any, which Borrower may
in its discretion have made, or caused any other Person to have made on its
behalf, of all or any portion of its Inventory.
(o) Patent, Trademark And Copyright Collateral.
(1) This Agreement is effective to create a valid and continuing Lien
on and, together with the Interim Order or Final Order, as applicable, perfected
Liens in favor of Agent on each Borrower's patents, trademarks and copyrights.
17
(2) Each Borrower shall notify Agent immediately if it knows or has
reason to know that any application or registration relating to any patent,
trademark or copyright (now or hereafter existing) may become abandoned or
dedicated, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright
Office or any court) regarding such Borrower's ownership of any patent,
trademark or copyright, its right to register the same, or to keep and maintain
the same.
(3) In no event shall any Borrower, either directly or through any
agent, employee, licensee or designee, file an application for the registration
of any patent, trademark or copyright with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or
agency without giving Agent prior written notice thereof, and, upon request of
Agent, each Borrower shall execute and deliver any and all patent security
agreements, copyright security agreements or trademark security agreements as
Agent may request to evidence Agent's Lien on such patent, trademark or
copyright, and the General Intangibles of each Borrower relating thereto or
represented thereby.
(4) Each Borrower shall take all actions necessary or requested by
Agent to maintain and pursue each application, to obtain the relevant
registration and to maintain the registration of each of the patents, trademarks
and copyrights (now or hereafter existing), including the filing of applications
for renewal, affidavits of use, affidavits of noncontestability and opposition
and interference and cancellation proceedings, unless Borrower shall reasonably
determine that such patent, trademark or copyright is not material to the
conduct of its business.
(5) In the event that any of the patent, trademark or copyright
Collateral is infringed upon, or misappropriated or diluted by a third party,
the applicable Borrower shall notify Agent promptly after such Borrower learns
thereof. Each Borrower shall, unless it shall reasonably determine that such
patent, trademark or copyright Collateral is in no way material to the conduct
of its business or operations, promptly ▇▇▇ for infringement, misappropriation
or dilution and to recover any and all damages for such infringement,
misappropriation or dilution, and shall take such other actions as Agent shall
deem appropriate under the circumstances to protect such patent, trademark or
copyright Collateral.
(p) Indemnification. In any suit, proceeding or action brought by Agent or
any Lender relating to any Account, Chattel Paper, Contract, Document, General
Intangible or Instrument for any sum owing thereunder or to enforce any
provision of any Account, Chattel Paper, Contract, Document, General Intangible
or Instrument, each Borrower will save, indemnify and keep Agent and Lenders
harmless from and against all expense (including reasonable attorneys' fees and
expenses), loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability whatsoever of the obligor
thereunder, arising out of a breach by a Borrower of any obligation thereunder
or arising out of any other agreement, indebtedness or liability at any time
owing to, or in favor of, such obligor or its successors from a Borrower, except
in the case of Agent or any Lender, to the extent such expense, loss, or damage
is attributable solely to the gross negligence or willful misconduct of Agent or
such Lender as finally determined by a court of competent jurisdiction. All such
obligations of Borrowers shall be and remain enforceable against and only
against Borrowers and shall not be enforceable against Agent or any Lender.
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(q) Notice Regarding Collateral. Borrowers will advise Agent promptly, in
reasonable detail, (i) of any Lien (other than Permitted Liens) or claim made or
asserted against any of the Collateral, and (ii) of the occurrence of any other
event which would have a Material Adverse Effect.
(r) Remedies, Rights Upon Default.
(1) In addition to all other rights and remedies granted to it under
this Agreement, the other Loan Documents and under any other instrument or
agreement securing, evidencing or relating to any of the Obligations, if any
Event of Default shall have occurred and be continuing, Agent may exercise all
rights and remedies of a secured party under the UCC. Without limiting the
generality of the foregoing, Borrower expressly agrees that in any such event
Agent, without demand of performance or other demand, advertisement or notice of
any kind (except the notice specified below of time and place of public or
private sale) to or upon any Borrower or any other Person (all and each of which
demands, advertisements and notices are hereby expressly waived to the maximum
extent permitted by the UCC and other applicable law), may forthwith enter upon
the premises of any Borrower where any Collateral is located through self-help,
without judicial process, without first obtaining a final judgment or giving any
Borrower or any other Person notice (except to the extent ordered by the
Bankruptcy Court) and opportunity for a hearing on Agent's claim or action and
may collect, receive, assemble, process, appropriate and realize upon the
Collateral, or any part thereof, and may forthwith sell, lease, assign, give an
option or options to purchase, or sell or otherwise dispose of and deliver said
Collateral (or contract to do so), or any part thereof, in one or more parcels
at a public or private sale or sales, at any exchange at such prices as it may
deem acceptable, for cash or on credit or for future delivery without assumption
of any credit risk. Agent or any Lender shall have the right upon any such
public sale or sales and, to the extent permitted by law, upon any such private
sale or sales, to purchase for the benefit of Agent and Lenders, the whole or
any part of said Collateral so sold, free of any right or equity of redemption,
which equity of redemption Borrowers hereby release. Such sales may be adjourned
and continued from time to time with or without notice. Agent shall have the
right to conduct such sales on any Borrower's premises or elsewhere and shall
have the right to use any Borrower's premises without charge for such time or
times as Agent deems necessary or advisable.
(2) Borrowers further agree, at Agent's request, to assemble the
Collateral and make it available to Agent at places which Agent shall select,
whether at a Borrower's premises or elsewhere. Until Agent is able to effect a
sale, lease, or other disposition of Collateral, Agent shall have the right to
hold or use Collateral, or any part thereof, to the extent that it deems
appropriate for the purpose of preserving Collateral or its value or for any
other purpose deemed appropriate by Agent. Agent shall have no obligation to any
Borrower to maintain or preserve the rights of any Borrower as against third
parties with respect to Collateral while Collateral is in the possession of
Agent. Agent may, if it so elects, seek the appointment of a receiver or keeper
to take possession of Collateral and to enforce any of Agent's remedies (for the
benefit of Agent and Lenders), with respect to such appointment without prior
notice or hearing as to such appointment. Agent shall apply the net proceeds of
any such collection, recovery, receipt, appropriation, realization or sale to
the Obligations as provided herein, and only after so paying over such net
proceeds, and after the payment by Agent of any other amount required by any
provision of law, need Agent account for the surplus, if any, to any Borrower.
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To the maximum extent permitted by applicable law, each Borrower waives all
claims, damages, and demands against Agent or any Lender arising out of the
repossession, retention or sale of the Collateral except such as arise solely
out of the gross negligence or willful misconduct of Agent or such Lender as
finally determined by a court of competent jurisdiction. Each Borrower agrees
that ten (10) days' prior notice by Agent of the time and place of any public
sale or of the time after which a private sale may take place is reasonable
notification of such matters. Borrower shall remain liable for any deficiency if
the proceeds of any sale or disposition of the Collateral are insufficient to
pay all Obligations, including any attorneys' fees or other expenses incurred by
Agent or any Lender to collect such deficiency.
(3) Except as otherwise specifically provided herein, each Borrower
hereby waives presentment, demand, protest or any notice (to the maximum extent
permitted by applicable law) of any kind in connection with this Agreement or
any Collateral.
(s) Grant of License To Use. For the purpose of enabling Agent to exercise
rights and remedies under this Section hereof (including, without limiting the
terms of this Section hereof, in order to take possession of, hold, preserve,
process, assemble, prepare for sale, market for sale, sell or otherwise dispose
of Collateral) at such time as Agent shall be lawfully entitled to exercise such
rights and remedies, each Borrower hereby grants to Agent, for the benefit of
Agent and Lenders, an irrevocable, nonexclusive license (exercisable without
payment of royalty or other compensation to any Borrower) to use, license or
sublicense any Proprietary Rights now owned or hereafter acquired by any
Borrower, and wherever the same may be located, and including in such license
access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout
thereof.
(t) Limitation On Agent's And Lenders' Duty In Respect Of Collateral. Agent
and each Lender shall use reasonable care with respect to the Collateral in its
possession or under its control. Neither Agent nor any Lender shall have any
other duty as to any Collateral in its possession or control or in the
possession or control of any agent or nominee of Agent or such Lender, or any
income thereon or as to the preservation of rights against prior parties or any
other rights pertaining thereto.
1.8 Section 364(c)(1) Superpriority Administrative Claim and Sections
364(c)(2) and Section 364(c)(3) Liens and Security Interests. It is the intent
of the parties hereto that:
(a) Effective on and after the date of the entry by the Bankruptcy Court of
the Interim Order, notwithstanding any term to the contrary herein, in
accordance with section 364(c)(1) of the Bankruptcy Code, the Obligations shall
constitute claims with priority in payment from the Collateral, whether now
existing or hereafter acquired, over any and all unsecured pre-petition claims,
all post-petition claims and all administrative expenses of the kinds specified
in, or arising or ordered under any sections of the Bankruptcy Code, including,
without limitation, sections 503(b), 105, 326, 328, 330, 331, 506(c), 507(a),
507(b), 546(c), 726 and 1112 of the Bankruptcy Code, whether or not such claims
or expenses may become secured by a judgment lien or other non-consensual lien,
levy or attachment, and such claims shall at all times be senior to the rights
of the Borrowers, any Chapter 11 trustee, any Chapter 7 trustee, or any other
creditor (including, without limitation, post-petition vendors and other
post-petition
20
creditors) in the Bankruptcy Cases or any subsequent proceedings under the
Bankruptcy Code, including, without limitation, any chapter 7 cases if any of
the Borrowers' cases are converted to cases under chapter 7 of the Bankruptcy
Code, subject only to the Carve-Out (as defined below), valid and unvoidable
liens or security interests to the extent and in the amounts existing as of the
commencement of the Bankruptcy Cases and Liens permitted hereunder or by the
Interim Order or the Final Order, as applicable. No cost or expense of
administration under sections 105, 364(c)(1), 503(b), 506(c), 507(b) of the
Bankruptcy Code, any other section of the Bankruptcy Code, or pursuant to any
order of the Bankruptcy Court, shall be senior to, equal to, or pari passu with,
the superpriority administrative claim of the Lenders arising out of the
Obligations, whether or not such claims or expenses may become secured by a
judgment lien or other non-consensual lien, levy or attachment (subject only to
the Carve-Out as provided in the Interim Order and the Final Order). As long as
no unwaived Event of Default has occurred (each a "Carve-Out Event"), the
Borrowers shall be permitted to pay allowed unpaid professional fees and
disbursements as the same may be due and payable, and such payments shall not
reduce the Carve-Out.
(b) The superpriority administrative claim referred to in clause (a) above
shall be subject only to (1) the Carve-Out (as defined in the Interim Order or
the Final Order, as applicable) (the "Carve Out") and (2) non-avoidable, valid,
enforceable and perfected liens on and security interests in the assets of the
Borrowers to the extent and in the amounts existing as of the Petition Date and
permitted hereunder.
(c) In addition, as security for the Obligations, and as provided in the
Loan Documents, the Agent and the Lenders have been granted (without the
necessity of the execution, filing and/or recordation by the Borrowers of
mortgages, security agreements, patent security agreements, trademark security
agreements, pledge agreements, financing statements or otherwise), valid and
perfected Liens upon all present and after-acquired personal and real property
of the Borrowers of any nature whatsoever, wherever located, other than equity
interests in Foreign Subsidiaries, claims of the Borrowers arising under
Sections 544, 546, 547, 548, 549, 550 or 553 of the Bankruptcy Code and COLI, as
follows:
(i) pursuant to section 364(c)(2) of the Bankruptcy Code, a first
priority, perfected Lien upon all of the Borrowers' right, title and
interest in, to and under all Collateral that is not otherwise encumbered
by a Permitted Lien; and
(ii) pursuant to section 364(c)(3) of the Bankruptcy Code, a junior
priority, perfected Lien upon all of the Borrowers' right, title and
interest in, to and under the Collateral, that is subject to a Permitted
Lien subject only to the Permitted Lien.
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ARTICLE 2
INTEREST AND FEES
2.1 Interest.
(a) Interest Rates. All outstanding Obligations shall bear interest on
the unpaid principal amount thereof (including, to the extent permitted by law,
on interest thereon not paid when due) from the date made until paid in full in
cash at a rate determined by reference to the Base Rate or the LIBOR Rate plus
the Applicable Margins as set forth below, but not to exceed the Maximum Rate.
If at any time Loans are outstanding with respect to which the Borrower
Representative has not delivered to the Agent a notice specifying the basis for
determining the interest rate applicable thereto in accordance herewith, those
Loans shall bear interest at a rate determined by reference to the Base Rate
until notice to the contrary has been given to the Agent in accordance with this
Agreement and such notice has become effective. Except as otherwise provided
herein, the outstanding Obligations shall bear interest as follows:
(i) For all Base Rate Loans at a fluctuating per annum rate equal to
the Base Rate plus the Applicable Margin; and
(ii) For all LIBOR Rate Loans at a per annum rate equal to the LIBOR
Rate plus the Applicable Margin.
Each change in the Base Rate shall be reflected in the interest rate applicable
to Base Rate Loans as of the effective date of such change. All interest charges
shall be computed on the basis of a year of 360 days and actual days elapsed
(which results in more interest being paid than if computed on the basis of a
365-day year). The Borrowers shall pay to the Agent, for the ratable benefit of
Lenders, interest accrued on all Loans in arrears on the first day of each month
hereafter and on the Termination Date. The Borrowers shall pay to the Agent, for
the ratable benefit of Lenders, interest on all LIBOR Rate Loans in arrears on
each LIBOR Interest Payment Date.
(b) Default Rate. If any Event of Default occurs and is continuing and
the Agent or the Majority Lenders in their discretion so elect, then, while any
such Event of Default is continuing, all of the Obligations shall bear interest
at the Default Rate applicable thereto.
2.2 Continuation and Conversion Elections.
(a) The Borrower Representative may:
(i) elect, as of any Business Day, in the case of Base Rate Loans to
convert any Base Rate Loans or any part thereof (in an amount not less than
$5,000,000, or that is in an integral multiple of $1,000,000 in excess thereof)
into LIBOR Rate Loans; or
(ii) elect, as of the last day of the applicable Interest Period, to
continue any LIBOR Rate Loans having Interest Periods expiring on such day or
any part thereof (in an amount not less than $5,000,000 (or if lesser, the
amount of the LIBOR Rate Loan having
22
an Interest Period expiring on such day), or that is in an integral multiple of
$1,000,000 in excess thereof);
provided, that if at any time the aggregate amount of LIBOR Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $5,000,000, such LIBOR Rate Loans shall
automatically convert into Base Rate Loans; provided further that if the Notice
of Continuation/Conversion shall fail to specify the duration of the Interest
Period, such Interest Period shall be one month.
(b) The Borrower Representative shall deliver a notice of
continuation/conversion ("Notice of Continuation/Conversion") to the Agent not
later than 12:00 noon (New York time) at least three (3) Business Days in
advance of the Continuation/Conversion Date, if the Loans are to be converted
into or continued as LIBOR Rate Loans and specifying:
(i) the proposed Continuation/Conversion Date;
(ii) the aggregate amount of Loans to be converted or continued;
(iii) the type of Loans resulting from the proposed conversion or
continuation; and
(iv) the duration of the requested Interest Period, provided,
however, the Borrower Representative may not select an Interest Period that ends
after the Stated Termination Date.
(c) If upon the expiration of any Interest Period applicable to
LIBOR Rate Loans, the Borrower Representative has failed to select timely a new
Interest Period to be applicable to LIBOR Rate Loans or if any Default or Event
of Default then exists, the Borrower Representative shall be deemed to have
elected to convert such LIBOR Rate Loans into Base Rate Loans effective as of
the expiration date of such Interest Period.
(d) The Agent will promptly notify each Lender of its receipt of a
Notice of Continuation/Conversion. All conversions and continuations shall be
made ratably according to the respective outstanding principal amounts of the
Loans with respect to which the notice was given held by each Lender.
(e) There may not be more than twenty (20) different Interest
Periods with respect to LIBOR Rate Loans in effect hereunder at any time.
2.3 Maximum Interest Rate. In no event shall any interest rate provided for
hereunder exceed the maximum rate legally chargeable by any Lender under
applicable law for such Lender with respect to loans of the type provided for
hereunder (the "Maximum Rate"). If, in any month, any interest rate, absent such
limitation, would have exceeded the Maximum Rate, then the interest rate for
that month shall be the Maximum Rate, and, if in future months, that interest
rate would otherwise be less than the Maximum Rate, then that interest rate
shall remain at the Maximum Rate until such time as the amount of interest paid
hereunder equals the amount of interest which would have been paid if the same
had not been limited by the Maximum Rate.
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In the event that, upon payment in full of the Obligations, the total amount of
interest paid or accrued under the terms of this Agreement is less than the
total amount of interest which would, but for this Section 2.3, have been paid
or accrued if the interest rate otherwise set forth in this Agreement had at all
times been in effect, then the Borrowers shall, to the extent permitted by
applicable law, pay the Agent, for the account of the Lenders, an amount equal
to the excess of (a) the lesser of (i) the amount of interest which would have
been charged if the Maximum Rate had, at all times, been in effect or (ii) the
amount of interest which would have accrued had the interest rate otherwise set
forth in this Agreement, at all times, been in effect over (b) the amount of
interest actually paid or accrued under this Agreement. If a court of competent
jurisdiction determines that the Agent and/or any Lender has received interest
and other charges hereunder in excess of the Maximum Rate, such excess shall be
deemed received on account of, and shall automatically be applied to reduce, the
Obligations other than interest, in the inverse order of maturity, and if there
are no Obligations outstanding, the Agent and/or such Lender shall refund to the
Borrower Representative, on behalf of the Borrowers, such excess.
2.4 Facility Fee; Syndication Fee; Administration Fee. The Borrowers jointly
and severally agree to pay the Agent, for the Agent's sole account, on the date
that the Interim Order is entered:
(a) a facility fee (the "Facility Fee") in the amount $1,375,000;
(b) a syndication fee (the "Syndication Fee") in the amount of $1,250,000;
and
(c) an administration fee (the "Administration Fee") in the amount of
$150,000.
2.5 Unused Line Fee. On the first day of each month and on the Termination
Date, the Borrowers jointly and severally agree to pay to the Agent, for the
account of the Lenders, in accordance with their respective Pro Rata Shares, an
unused line fee (the "Unused Line Fee") equal to three-eighths of one percent
(.375%) per annum times the amount by which the Maximum Revolver Amount exceeded
the sum of the average daily outstanding amount of Revolving Loans and the
average daily undrawn face amount of outstanding Letters of Credit during the
immediately preceding month or shorter period if calculated for the first month
hereafter or on the Termination Date. The Unused Line Fee shall be computed on
the basis of a 360-day year for the actual number of days elapsed. All principal
payments received by the Agent shall be deemed to be credited to the Borrowers'
Loan Account immediately upon receipt for purposes of calculating the Unused
Line Fee pursuant to this Section 2.5.
2.6 Letter of Credit Fee. With respect to any month during which a Letter of
Credit is outstanding, the Borrowers jointly and severally agree to pay to the
Agent, for the account of the Lenders, in accordance with their respective Pro
Rata Shares, for Letters of Credit, a fee (the "Letter of Credit Fee") equal to
the Applicable L/C Margin per annum from time to time in effect multiplied by
the average daily maximum aggregate amount from time to time available to be
drawn under all outstanding Letters of Credit during such month, and to the
Letter of Credit Issuer, all out-of-pocket costs, fees and expenses incurred by
the Letter of Credit Issuer in connection with the application for, processing
of, issuance of, or amendment to any Letter of
24
Credit, which costs, fees and expenses shall include a "fronting fee" of
one-quarter of one percent (0.25%) per annum of the average daily maximum
aggregate amount from time to time available to be drawn under all outstanding
standby Letters of Credit during such month, payable to the Letter of Credit
Issuer. The Letter of Credit Fee and such "fronting fee" shall be payable
monthly in arrears on the first of each month following any month in which a
Letter of Credit is outstanding and on the Termination Date. The Letter of
Credit Fee shall be computed on the basis of a 360-day year for the actual
number of days elapsed.
ARTICLE 3
PAYMENTS AND PREPAYMENTS
3.1 Revolving Loans. The Borrowers shall repay the outstanding principal
balance of the Revolving Loans, plus all accrued but unpaid interest thereon, on
the Termination Date. The Borrowers may prepay Revolving Loans at any time, and
reborrow subject to the terms of this Agreement. In addition, and without
limiting the generality of the foregoing, upon demand the Borrowers shall pay to
the Agent, for account of the Lenders, the amount, by which the Aggregate
Revolver Outstandings exceed the lesser of the Borrowing Base or the Maximum
Revolver Amount.
3.2 Termination of Facility. The Borrower Representative may terminate this
Agreement upon at least ten (10) Business Days' notice to the Agent and the
Lenders upon (a) the payment in full of all outstanding Revolving Loans,
together with accrued and unpaid interest thereon, and the cancellation and
return of all outstanding Letters of Credit (or the delivery of Supporting
Letters of Credit or Cash Collateral in respect thereof in accordance with
Section 1.4(g)), (b) the payment in full in cash of all reimbursable expenses
and other Obligations, and (c) with respect to any LIBOR Rate Loans prepaid in
connection with such termination prior to the expiration date of the Interest
Period applicable thereto, the payment of the amounts described in Section 4.4.
The Agent and the Lenders shall be entitled to assume (without any
investigation) that any notice required to be delivered hereunder by the
Borrower to the Committee has been so delivered.
3.3 LIBOR Rate Loan Prepayments. In connection with any prepayment of LIBOR
Rate Loans, if any LIBOR Rate Loans are prepaid prior to the expiration date of
the Interest Period applicable thereto, the Borrowers shall pay to the Lenders
the amounts described in Section 4.4.
3.4 Payments by the Borrowers.
(a) All payments to be made by the Borrowers shall be made without set-off,
recoupment or counterclaim. Except as otherwise expressly provided herein, all
payments by the Borrowers shall be made to the Agent for the account of the
Lenders, at the account designated by the Agent and shall be made in Dollars and
in immediately available funds, no later than 12:00 noon (New York time) on the
date specified herein. Any payment received by the Agent after such time shall
be deemed (for purposes of calculating interest only) to have been received on
the following Business Day and any applicable interest or fee shall continue to
accrue.
25
(b) Subject to the provisions set forth in the definition of "Interest
Period", whenever any payment is due on a day other than a Business Day, such
payment shall be due on the following Business Day, and such extension of time
shall in such case be included in the computation of interest or fees, as the
case may be.
3.5 Payments as Revolving Loans. Except as otherwise agreed by the
Agent, all payments of principal, interest, reimbursement obligations in
connection with Letters of Credit and Credit Support for Letters of Credit,
fees, premiums, reimbursable expenses and other sums payable hereunder, may be
paid from the proceeds of Revolving Loans made hereunder. The Borrowers hereby
irrevocably authorize the Agent to charge the Loan Account for the purpose of
paying all amounts from time to time due hereunder and agrees that all such
amounts charged shall constitute Revolving Loans (including Non-Ratable Loans
and Agent Advances).
3.6 Apportionment, Application and Reversal of Payments. Principal and
interest payments shall be apportioned ratably among the Lenders (according to
the unpaid principal balance of the Loans to which such payments relate held by
each Lender) and payments of the fees shall, as applicable, be apportioned
ratably among the Lenders, except for fees payable solely to Agent and the
Letter of Credit Issuer and except as provided in Section 11.1(b). All payments
shall be remitted to the Agent and all such payments not relating to principal
or interest of specific Loans, or not constituting payment of specific fees, and
all proceeds of Accounts or other Collateral received by the Agent, shall be
applied, ratably, subject to the provisions of this Agreement, first, to pay any
fees, indemnities or expense reimbursements including any such amounts relating
to Bank Products then due to the Agent from the Borrowers; second, to pay any
fees or expense reimbursements then due to the Lenders from the Borrowers;
third, to pay interest due in respect of all Loans, including Non-Ratable Loans
and Agent Advances; fourth, to pay or prepay principal of the Non-Ratable Loans
and Agent Advances; fifth, to pay or prepay principal of the Revolving Loans
(other than Non-Ratable Loans and Agent Advances) and unpaid reimbursement
obligations in respect of Letters of Credit; sixth, to pay an amount to Agent
equal to all outstanding Letter of Credit Obligations to be held as cash
collateral for such Obligations; and seventh, to the payment of any other
Obligation including any amounts relating to Bank Products due to the Agent, the
Bank or any Affiliate of the Bank by any Borrower. Notwithstanding anything to
the contrary contained in this Agreement, unless so directed by the Borrower
Representative, or unless an Event of Default has occurred and is continuing,
neither the Agent nor any Lender shall apply any payments which it receives to
any LIBOR Rate Loan, except (a) on the expiration date of the Interest Period
applicable to any such LIBOR Rate Loan, or (b) in the event, and only to the
extent, that there are no outstanding Base Rate Loans and, in any event, the
Borrowers shall pay LIBOR breakage losses in accordance with Section 4.4. After
the occurrence and during the continuance of an Event of Default, the Agent and
the Lenders shall have the continuing and exclusive right to apply and reverse
and reapply any and all such proceeds and payments to any portion of the
Obligations.
3.7 Indemnity for Returned Payments. If after receipt of any payment
which is applied to the payment of all or any part of the Obligations, the Agent
or any Lender, the Bank or any Affiliate of the Bank is for any reason compelled
to surrender such payment or proceeds to any Person because such payment or
application of proceeds is invalidated, declared fraudulent, set aside,
determined to be void or voidable as a preference, impermissible setoff, or a
diversion of trust funds, or for any other reason, then the Obligations or part
thereof intended to be
26
satisfied shall be revived and continued and this Agreement shall continue in
full force as if such payment or proceeds had not been received by the Agent or
such Lender and the Borrowers shall be liable to pay to the Agent and the
Lenders, and hereby do indemnify the Agent and the Lenders and hold the Agent
and the Lenders harmless for the amount of such payment or proceeds surrendered.
The provisions of this Section 3.7 shall be and remain effective notwithstanding
any contrary action which may have been taken by the Agent or any Lender in
reliance upon such payment or application of proceeds, and any such contrary
action so taken shall be without prejudice to the Agent's and the Lenders'
rights under this Agreement and shall be deemed to have been conditioned upon
such payment or application of proceeds having become final and irrevocable. The
provisions of this Section 3.7 shall survive the termination of this Agreement.
3.8 Agent's and Lenders' Books and Records; Monthly Statements. The Agent
shall record the principal amount of the Loans owing to each Lender, the undrawn
face amount of all outstanding Letters of Credit and the aggregate amount of
unpaid reimbursement obligations outstanding with respect to the Letters of
Credit from time to time on its books. In addition, each Lender may note the
date and amount of each payment or prepayment of principal of such Lender's
Loans in its books and records. Failure by Agent or any Lender to make such
notation shall not affect the obligations of the Borrowers with respect to the
Loans or the Letters of Credit. The Borrowers agree that the Agent's and each
Lender's books and records showing the Obligations and the transactions pursuant
to this Agreement and the other Loan Documents shall be admissible in any action
or proceeding arising therefrom, and shall constitute rebuttably presumptive
proof thereof, irrespective of whether any Obligation is also evidenced by a
promissory note or other instrument. The Agent will provide to the Borrower
Representative a monthly statement of Loans, payments, and other transactions
pursuant to this Agreement. Such statement shall be deemed correct, accurate,
and binding on the Borrowers and an account stated (except for reversals and
reapplications of payments made as provided in Section 3.6 and corrections of
errors discovered by the Agent), unless the Borrower Representative notifies the
Agent in writing to the contrary within thirty (30) days after such statement is
rendered. In the event a timely written notice of objections is given by the
Borrower Representative, only the items to which exception is expressly made
will be considered to be disputed by the Borrower Representative.
ARTICLE 4
TAXES, YIELD PROTECTION AND ILLEGALITY
4.1 Taxes.
(a) Any and all payments by each Borrower to each Lender or the Agent
under this Agreement and any other Loan Document shall be made free and clear
of, and without deduction or withholding for any Taxes. In addition, the
Borrowers shall pay all Other Taxes.
(b) The Borrowers jointly and severally agree to indemnify and hold
harmless each Lender and the Agent for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section) paid by any Lender or the Agent and any liability
(including penalties, interest, additions to tax and expenses)
27
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted (and the Agent and each Lender agrees
to use good faith efforts to notify the Borrower Representative of an assertion
of an amount which the Borrowers are liable for pursuant to this Section
4.1(b)). Payment under this indemnification shall be made within 30 days after
the date such Lender or the Agent makes written demand therefor to the Borrower
Representative.
(c) If any Borrower shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, then:
(i) the sum payable shall be increased as necessary so that after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section) such
Lender or the Agent, as the case may be, receives an amount equal to the sum it
would have received had no such deductions or withholdings been made;
(ii) such Borrower shall make such deductions and withholdings;
(iii) such Borrower shall pay the full amount deducted or withheld
to the relevant taxing authority or other authority in accordance with
applicable law; and
(iv) without duplication of the amounts paid pursuant to clause (i)
above, such Borrower shall also pay to each Lender or the Agent for the account
of such Lender, at the time interest is paid, all additional amounts which the
respective Lender specifies as necessary to preserve the after-tax yield such
Lender would have received if such Taxes or Other Taxes had not been imposed.
(d) At the Agent's request, within 30 days after the date of any
payment by any Borrower of Taxes or Other Taxes, the Borrower Representative
shall furnish the Agent the original or a certified copy of a receipt evidencing
payment thereof, or other appropriate evidence of payment.
(e) If any Borrower is required to pay additional amounts to any Lender
or the Agent pursuant to subsection (c) of this Section 4.1, then such Lender
shall use reasonable efforts (consistent with legal and regulatory restrictions)
to change the jurisdiction of its lending office so as to eliminate any such
additional payment by such Borrower which may thereafter accrue, if such change
in the judgment of such Lender is not otherwise disadvantageous to such Lender.
4.2 Illegality.
(a) If any Lender determines that the introduction of any Requirement
of Law, or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law, in each case, after the date hereof,
has made it unlawful, or that any central bank or other Governmental Authority
has asserted that it is unlawful, for any Lender or its applicable lending
office to make LIBOR Rate Loans, then, on notice thereof by that Lender to the
Borrower Representative through the Agent, any obligation of that Lender to make
LIBOR
28
Rate Loans shall be suspended until that Lender notifies the Agent and the
Borrower Representative that the circumstances giving rise to such determination
no longer exist.
(b) If a Lender determines that it is unlawful to maintain any LIBOR
Rate Loan, the Borrowers shall, upon the Borrower Representative's receipt of
notice of such fact and demand from such Lender (with a copy to the Agent),
prepay in full such LIBOR Rate Loans of such Lender then outstanding, together
with interest accrued thereon and amounts required under Section 4.4, either on
the last day of the Interest Period thereof, if that Lender may lawfully
continue to maintain such LIBOR Rate Loans to such day, or immediately, if that
Lender may not lawfully continue to maintain such LIBOR Rate Loans. If the
Borrowers are required to so prepay any LIBOR Rate Loans, then concurrently with
such prepayment, the Borrowers shall borrow from the affected Lender, in the
amount of such repayment, a Base Rate Loan.
4.3 Increased Costs and Reduction of Return.
(a) If any Lender determines that due to either (i) the introduction of
or any change in the interpretation of any law or regulation or (ii) the
compliance by that Lender with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to such Lender of agreeing to make or making,
funding or maintaining any LIBOR Rate Loans, then the Borrowers shall be liable
for, and shall from time to time, upon demand (with a copy of such demand to be
sent to the Agent), pay to the Agent for the account of such Lender, additional
amounts as are sufficient to compensate such Lender for such increased costs.
(b) If any Lender shall have determined that (i) the introduction of
any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or (iv) compliance by
such Lender or any corporation or other entity controlling such Lender with any
Capital Adequacy Regulation, affects or would affect the amount of capital
required or expected to be maintained by such Lender or any corporation or other
entity controlling such Lender and (taking into consideration such Lender's or
such corporation's or other entity's policies with respect to capital adequacy
and such Lender's desired return on capital) determines that the amount of such
capital is increased as a consequence of its Commitments, loans, credits or
obligations under this Agreement, then, upon demand of such Lender to the
Borrower Representative through the Agent, the Borrowers shall pay to such
Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender for such increase.
4.4 Funding Losses. The Borrowers shall reimburse each Lender and hold each
Lender harmless from any loss or expense which such Lender may sustain or incur
as a consequence of:
(a) the failure of the Borrowers to make on a timely basis any payment
of principal of any LIBOR Rate Loan;
29
(b) the failure of the Borrowers to borrow, continue or convert a Loan
after the Borrower Representative has given (or is deemed to have given) a
Notice of Borrowing or a Notice of Continuation/Conversion; or
(c) the prepayment or other payment (including after acceleration
thereof) of any LIBOR Rate Loans on a day that is not the last day of the
relevant Interest Period;
including any such loss of anticipated profit and any loss or expense arising
from the liquidation or reemployment of funds obtained by it to maintain its
LIBOR Rate Loans or from fees payable to terminate the deposits from which such
funds were obtained. Borrower shall also pay any customary administrative fee
charged by any Lender in connection with the foregoing.
4.5 Inability to Determine Rates. If, the Agent determines that for any
reason adequate and reasonable means do not exist for determining the LIBOR Rate
for any requested Interest Period with respect to a proposed LIBOR Rate Loan, or
that the LIBOR Rate for any requested Interest Period with respect to a proposed
LIBOR Rate Loan does not adequately and fairly reflect the cost to the Lenders
of funding such Loan, the Agent will promptly so notify the Borrower
Representative and each Lender. Thereafter, the obligation of the Lenders to
make or maintain LIBOR Rate Loans hereunder shall be suspended until the Agent
revokes such notice in writing. Upon receipt of such notice, the Borrower
Representative may revoke any Notice of Borrowing or Notice of
Continuation/Conversion then submitted by it. If the Borrower Representative
does not revoke such Notice, the Lenders shall make, convert or continue the
Loans, as proposed by the Borrower Representative, in the amount specified in
the applicable notice submitted by the Borrower Representative, but such Loans
shall be made, converted or continued as Base Rate Loans instead of LIBOR Rate
Loans.
4.6 Certificates of Agent. If any Lender claims reimbursement or
compensation under this Article 4, Agent shall determine the amount thereof and
shall deliver to the Borrower Representative (with a copy to the affected
Lender) a certificate setting forth in reasonable detail the amount payable to
the affected Lender, and such certificate shall be conclusive and binding on the
Borrowers in the absence of manifest error.
4.7 Withholding Tax.
(a) If any Lender is a "foreign corporation, partnership or trust"
within the meaning of the Code such Lender shall be entitled to claim exemption
from, or a reduction of, U.S. withholding tax under Sections 1441 or 1442 of the
Code or otherwise, and such Lender agrees with and in favor of the Borrower
Representative, to deliver to the Borrower Representative:
(i) if such Lender is entitled to claim an exemption from, or a
reduction of, withholding tax under a United States of America tax treaty,
properly completed IRS Forms W-8BEN and W-8ECI before the payment of any
interest in the first calendar year and before the payment of any interest in
each third succeeding calendar year during which interest may be paid under this
Agreement;
(ii) if such Lender is entitled to claim that interest paid under
this Agreement is exempt from United States of America withholding tax because
it is effectively
30
connected with a United States of America trade or business of such Lender, two
properly completed and executed copies of IRS Form W-8ECI before the payment of
any interest is due in the first taxable year of such Lender and in each
succeeding taxable year of such Lender during which interest may be paid under
this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the Code or
other laws of the United States of America as a condition to exemption from, or
reduction of, United States of America withholding tax.
Such Lender agrees to promptly notify the Borrower Representative of any change
in circumstances which would modify or render invalid any claimed exemption or
reduction.
4.8 Survival. The agreements and obligations of the Borrowers in this
Article 4 shall be joint and several and shall survive the payment of all other
Obligations.
ARTICLE 5
BOOKS AND RECORDS; FINANCIAL INFORMATION;
NOTICES; BANKRUPTCY CASES
5.1 Books and Records. The Borrowers shall, and shall cause their
respective Subsidiaries to, maintain, at all times, correct and complete books,
records and accounts in which complete, correct and timely entries are made of
its transactions in accordance with GAAP applied consistently with the audited
Financial Statements required to be delivered pursuant to Section 5.2(a). The
Borrowers shall, and shall cause their respective Subsidiaries to, by means of
appropriate entries, reflect in such accounts and in all Financial Statements
proper liabilities and reserves for all taxes and proper provision for
depreciation and amortization of property and bad debts, all in accordance with
GAAP. The Borrowers shall maintain at all times books and records pertaining to
the Collateral in such detail, form and scope as the Agent or any Lender shall
reasonably require, including, but not limited to, records of (a) all payments
received and all credits and extensions granted with respect to the Accounts of
the Borrowers; (b) the return, rejection, repossession, stoppage in transit,
loss, damage, or destruction of any Inventory of the Borrowers, and (c) all
other dealings affecting the Collateral.
5.2 Financial Information. The Borrowers shall promptly furnish to each
Lender, all such financial information as the Agent shall reasonably request.
Without limiting the foregoing, the Borrowers will furnish to the Agent, in
sufficient copies for distribution by the Agent to each Lender, in such detail
as the Agent or the Lenders shall request, the following:
(a) As soon as available, but in any event not later than one hundred
five (105) days after the close of each Fiscal Year, consolidated audited
balance sheets, and related consolidated income statements, cash flow statements
and changes in stockholders' equity for (i) the Company and its consolidated
Subsidiaries for such Fiscal Year and (ii) the Borrowers on a consolidated basis
for such Fiscal Year, in each case together with the accompanying notes thereto,
setting forth in each case in comparative form figures for the previous Fiscal
Year, all in reasonable detail, fairly presenting in all material respects the
financial position and the results of
31
operations of the Company and its consolidated Subsidiaries or the Borrowers on
a consolidated basis, as applicable as at the date thereof and for the Fiscal
Year then ended, and prepared in accordance with GAAP (provided, however, that
if such audited financial reports for the Borrowers on a consolidated basis are
not otherwise required to be delivered in connection with the Bankruptcy Cases,
the financial reports for the Borrowers on a consolidated basis which are
required to be delivered pursuant to this sentence may be unaudited). The
audited statements required to be delivered pursuant to the immediately
preceding sentence shall be examined in accordance with generally accepted
auditing standards by PricewaterhouseCoopers or other independent certified
public accountants selected by the Company and reasonably satisfactory to the
Agent, and accompanied by a report of such accountants on such statements, which
report shall be unqualified as to scope of audit. The Company hereby authorizes
the Agent to communicate directly with its certified public accountants and, by
this provision, authorizes those accountants to disclose to the Agent any and
all financial statements and other supporting financial documents and schedules
relating to the Company and its consolidated Subsidiaries and to discuss
directly with the Agent the finances and affairs of the Company and its
consolidated Subsidiaries.
(b) As soon as available, but in any event not later than thirty (30)
days after the end of each month, unaudited balance sheets of the Borrowers on a
consolidated basis as at the end of such month, and consolidated unaudited
income statements and cash flow statements for the Borrowers on a consolidated
basis for such month and for the period from the beginning of the Fiscal Year to
the end of such month, all in reasonable detail, fairly presenting the financial
position and results of operations of the Borrowers on a consolidated basis as
at the date thereof and for such periods, and, in each case, in comparable form,
figures for the corresponding period in the prior Fiscal Year, and prepared in
accordance with GAAP (except for the absence or abbreviation of footnotes and
subject to normal year-end adjustments) applied consistently with the audited
Financial Statements required to be delivered pursuant to Section 5.2(a). The
Borrower Representative, on behalf of the Borrowers, shall certify by a
certificate signed by its chief financial officer that all such statements have
been prepared in accordance with GAAP (except for the absence or abbreviation of
footnotes and subject to normal year-end adjustments) and present fairly the
financial position of the Borrowers on a consolidated basis as at the dates
thereof and the results of operations of the Borrowers on a consolidated basis
for the periods then ended.
(c) As soon as available, but in any event not later than sixty (60)
days after the end of each of the first three fiscal quarters of each Fiscal
Year, unaudited balance sheets of the Borrowers on a consolidated basis as at
the end of such fiscal quarter, and consolidated unaudited income statements and
cash flow statements for the Borrowers on a consolidated basis for such fiscal
quarter and for the period from the beginning of the Fiscal Year to the end of
such fiscal quarter, all in reasonable detail, fairly presenting the financial
position and results of operations of the Borrowers on a consolidated basis as
at the date thereof and for such periods, and, in each case, in comparable form,
figures for the corresponding period in the prior Fiscal Year, and prepared in
accordance with GAAP (except for the absence or abbreviation of footnotes and
subject to normal year-end adjustments) applied consistently with the audited
Financial Statements required to be delivered pursuant to Section 5.2(a). The
Borrower Representative, on behalf of the Borrowers, shall certify by a
certificate signed by its chief financial officer that all such statements have
been prepared in accordance with GAAP (except
32
for the absence or abbreviation of footnotes and subject to normal year-end
adjustments) and present fairly the financial position of the Borrowers on a
consolidated basis as at the dates thereof and the results of operations of the
Borrowers on a consolidated basis for the periods then ended.
(d) With each of the audited annual Financial Statements delivered
pursuant to Section 5.2(a), a certificate of the independent certified public
accountants that examined such statement to the effect that they have reviewed
and are familiar with this Agreement and that, in examining such Financial
Statements, they did not become aware of any fact or condition which then
constituted a Default or Event of Default with respect to the financial covenant
set forth in Section 7.21, except for those, if any, described in reasonable
detail in such certificate.
(e) With each of the annual Financial Statements delivered pursuant to
Section 5.2(a), and within sixty (60) days after the end of each fiscal quarter,
a certificate of the chief financial officer of the Company setting forth in
reasonable detail the calculations required to establish that the Borrowers were
in compliance with the covenant set forth in Section 7.22 during the period
covered in such Financial Statements and as at the end thereof. Within sixty
(60) days after the end of each fiscal quarter a certificate of the chief
financial officer of the Company stating that, except as explained in reasonable
detail in such certificate, (A) all of the representations and warranties of the
Borrowers contained in this Agreement and the other Loan Documents are correct
and complete in all material respects as at the date of such certificate as if
made at such time, except for those that speak as of a particular date, (B) the
Borrowers are, at the date of such certificate, in compliance in all material
respects with all of their respective covenants and agreements in this Agreement
and the other Loan Documents, (C) no Default or Event of Default then exists or
existed during the period covered by the Financial Statements for such month,
(D) describing and analyzing in reasonable detail all material trends, changes,
and developments in each and all Financial Statements; and (E) explaining the
variances of the figures in the corresponding operating plans and prior Fiscal
Year financial statements. If such certificate discloses that a representation
or warranty is not correct or complete, or that a covenant has not been complied
with, or that a Default or Event of Default existed or exists, such certificate
shall set forth what action the Borrowers have taken or propose to take with
respect thereto.
(f) Not less than thirty (30) days prior to the beginning of each
Fiscal Year, an annual forecasts (to include forecasted consolidated balance
sheets, income statements and cash flow statements) for the Borrowers on a
consolidated basis as at the end of and for each month of such Fiscal Year.
(g) Promptly after filing with the PBGC and the IRS, a copy of each
annual report or other filing filed with respect to each Plan of any Borrower.
(h) Within ten Business Days after the same are sent, copies of all
financial statements and reports which the Company sends to its shareholders
generally relating to the business of the Company and its Subsidiaries, and
within ten Business Days after the same are filed, copies of all reports on
Forms 10-K, 10-Q, 8-K, 8 and 10, and Schedules 13D, 13E-3, 13E-4, 13-G, 14D-1
and 14D-9, or successor forms or schedules, and the final prospectus in each
effective registration statement (other than registration statements on Form
S-8) and each post-
33
effective amendment to such registration statement which the Company may make
to, or file with, the Securities and Exchange Commission, and any successor or
analogous Governmental Authority.
(i) As soon as available, but in any event not later than 15 days after
any Borrower's receipt thereof, a copy of all management reports and management
letters prepared for any Borrower by any independent certified public accounts
of any Borrower.
(j) If requested by the Agent, promptly after filing with the IRS, a
copy of each tax return filed by the Company or by any of its consolidated
Subsidiaries.
(k) (i) On or prior to the date that the initial Loan is to be made
hereunder or the date that the initial Letter of Credit is to be issued
hereunder, whichever is first, a Borrowing Base Certificate as of February 28,
2001 and (ii) thereafter, within fifteen (15) days after the end of each month
(for such month), a Borrowing Base Certificate and supporting information in
accordance with Section 1.7(g); provided that the Agent may request that the
Borrower Representative provide a Borrowing Base Certificate and supporting
information on a more frequent basis at any time when an Event of Default has
occurred and is continuing or Availability is less than $75,000,000.
(l) Such additional information as the Agent and/or any Lender may from
time to time reasonably request regarding the financial and business affairs of
the Company or any Subsidiary.
5.3 Notices to the Lenders. Promptly upon a Responsible Officer becoming
aware thereof, the Borrowers shall notify the Agent and the Lenders in writing
of the following matters:
(a) any Default or Event of Default;
(b) the commencement by the holder of any capital stock of any Other
Subsidiary or the holder of any Debt of any Other Subsidiary in a face amount in
excess of $10,000,000 of any enforcement action because of an asserted default
or non-compliance;
(c) any event or circumstance which would reasonably be expected to
have a Material Adverse Effect;
(d) any pending or threatened action, suit, or proceeding, by any
Person, or any pending or threatened investigation by a Governmental Authority,
which would reasonably be expected to have a Material Adverse Effect; or the
rendering of any judgment against one or more of the Borrowers in any action,
suit or proceeding awarding damages in excess of $10,000,000;
(e) any pending or threatened strike, work stoppage, unfair labor
practice claim, or other labor dispute affecting any Borrower or any Other
Subsidiary in a manner which would reasonably be expected to have a Material
Adverse Effect;
34
(f) receipt of any notice of any violation of any law, statute,
regulation, or ordinance of a Governmental Authority affecting any Borrower or
any Other Subsidiary which would reasonably be expected to have a Material
Adverse Effect;
(g) receipt of any notice of any violation by any Borrower or any Other
Subsidiary of any Environmental Law which would reasonably be expected to have a
Material Adverse Effect or that any Governmental Authority has asserted in
writing that any Borrower or any Other Subsidiary is not in compliance with any
Environmental Law or is investigating any Borrower's or such Other Subsidiary's
compliance therewith which noncompliance would reasonably be expected to have a
Material Adverse Effect;
(h) receipt of any written notice that any Borrower or any Other
Subsidiary is or may be liable to any Person as a result of the Release or
threatened Release of any Contaminant or that any Borrower or any Other
Subsidiary is subject to investigation by any Governmental Authority evaluating
whether any remedial action is needed to respond to the Release or threatened
Release of any Contaminant which, in either case, would reasonably be expected
to have a Material Adverse Effect;
(i) receipt of any written notice of the imposition of any
Environmental Lien against any property of any Borrower or, if reasonably likely
to have a Material Adverse Effect, any Other Subsidiary;
(j) an ERISA Event or a prohibited transaction (as defined in Sections
406 of ERISA and 4975 of the Code) has occurred, and, when known, any action
taken or threatened by the IRS, the DOL or the PBGC with respect thereto, which
would reasonably be expected to have a Material Adverse Affect;
(k) the filing with the PBGC, the DOL or the IRS, as applicable, of a
copy of each funding waiver request with respect to any Pension Plan and all
communications received by any Borrower or any ERISA Affiliate from the PBGC,
the DOL or the IRS with respect to such request;
(l) the receipt of: (i) any notices of the PBGC's intention to
terminate a Pension Plan or to have a trustee appointed to administer such Plan;
(ii) any unfavorable determination letter from the IRS regarding the
qualification of a Plan under Section 401(a) of the Code which would reasonably
be expected to have a Material Adverse Effect; or (iii) any notice from a
Multi-employer Plan regarding the imposition of withdrawal liability which would
reasonably be expected to have a Material Adverse Effect;
(m) (i) any changes in the benefits of any existing Plan which increase
any Borrower's annual costs with respect thereto by an amount in excess of
$10,000,000, or the establishment of any new Plan or the commencement of
contributions to any Plan to which any Borrower or any ERISA Affiliate was not
previously contributing; or (ii) any failure by any Borrower or any ERISA
Affiliate to make a required installment or any other required payment under
Section 412 of the Code on or before the due date for such installment or
payment; or
(n) to the extent it would reasonably be expected to have a Materially
Adverse Effect, receipt of any notice to the effect that a Multi-employer Plan
has been or will be
35
terminated, the administrator or plan sponsor of a Multi-employer Plan intends
to terminate a Multi-employer Plan, or the PBGC has instituted or will institute
proceedings under Section 4042 of ERISA to terminate a Multi-employer Plan.
Each notice given under this Section shall describe the subject matter
thereof in reasonable detail, and shall set forth the action that any Borrower,
any Other Subsidiary, or any ERISA Affiliate, as applicable, has taken or
proposes to take with respect thereto.
5.4 Bankruptcy Cases. Promptly upon the filing of each motion, application
or similar filing relating to one or more of the Bankruptcy Cases and promptly
upon the entry of each order, decree or judgment relating to one or more of the
Bankruptcy Cases, the Borrowers shall provide the Agent's counsel with a copy of
each such motion, application, filing, order, decree or judgment.
ARTICLE 6
GENERAL WARRANTIES AND REPRESENTATIONS
Each Borrower jointly and severally warrants and represents to the
Agent and the Lenders that except as hereafter disclosed to and accepted by the
Agent and the Majority Lenders in writing and subject to the entry by the
Bankruptcy Court of the Interim Order or the Final Order, as applicable:
6.1 Authorization, Validity, and Enforceability of this Agreement and the
Loan Documents. Each Borrower has the corporate or other legal power and
authority to execute, deliver and perform this Agreement and the other Loan
Documents to which it is a party and to incur the Obligations, and to grant to
the Agent Liens upon and security interests in the Collateral. Each Borrower has
taken all necessary action (including obtaining approval of its stockholders if
necessary) to authorize its execution, delivery, and performance of this
Agreement and the other Loan Documents to which it is a party. This Agreement
and the other Loan Documents to which it is a party have been duly executed and
delivered by each Borrower, and constitute the legal, valid and binding
obligations of such Borrower, enforceable against it in accordance with their
respective terms. Each Borrower's execution, delivery, and performance of this
Agreement and the other Loan Documents to which it is a party do not and will
not (i) result in the imposition of any Lien (other than the Agent's Liens) upon
the property of such Borrower, by reason of the terms of (1) any contract,
mortgage, lease, agreement, indenture, or instrument to which such Borrower is a
party or which is binding upon it (including any of the foregoing entered into
after the Petition Date), (2) any Requirement of Law applicable to such
Borrower, or (3) the certificate or articles of incorporation or by-laws or the
limited liability company or limited partnership agreement of such Borrower or
(ii) conflict with, or constitute a violation of (1) any contract, mortgage,
lease, agreement, indenture, or instrument to which such Borrower is a party or
which is binding upon it and that was entered into after the Petition Date,
except where such conflict, violation or breach would not reasonably be expected
to have a Material Adverse Effect, (2) any Requirement of Law applicable to such
Borrower, except where such conflict, violation or breach would not reasonably
be expected to have a Material Adverse Effect or (3) the certificate or articles
of incorporation or by-laws or the limited liability company or limited
partnership agreement of such Borrower.
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6.2 Validity and Priority of Security Interest. The provisions of this
Agreement and the other Loan Documents create legal and valid Liens on all the
Collateral in favor of the Agent, for the ratable benefit of the Agent and the
Lenders, and such Liens constitute perfected and continuing Liens on all the
Collateral, having the priority set forth in the Interim Order or the Final
Order, as applicable.
6.3 Borrowers' Organization and Qualification of Borrowers. Each Borrower
(a) is duly organized or incorporated and validly existing in good standing
under the laws of the state of its organization or incorporation (and such
jurisdictions are identified as such on Schedule 6.3 hereto), (b) is qualified
to do business and is in good standing in the jurisdictions set forth on
Schedule 6.3 applicable to such Borrower which are the only jurisdictions in
which the failure to so qualify or be in good standing would reasonably be
expected to have a Material Adverse Effect and (c) has all requisite power and
authority to conduct its business and to own its property, except where the
failure to have such power and authority could not reasonably be expected to
have a Material Adverse Effect.
6.4 Other Subsidiaries and Affiliates. As of the Closing Date, Schedule 6.4
is a correct and complete list of the name and relationship to the Company of
each Borrower, the Other Subsidiaries and other Affiliates. Each Other
Subsidiary is (a) duly incorporated or organized and validly existing in good
standing under the laws of its jurisdiction of incorporation or organization set
forth on Schedule 6.4, except where the failure to be validly existing could not
reasonably be expected to have a Material Adverse Effect and (b) qualified to do
business and in good standing in each jurisdiction in which the failure to so
qualify or be in good standing would reasonably be expected to have a Material
Adverse Effect and (c) has all requisite power and authority to conduct its
business and own its property, except where the failure to have such power and
authority could not reasonably be expected to have a Material Adverse Effect.
6.5 Financial Statements and Projections.
(a) The Borrower Representative has delivered to the Agent and the
Lenders a draft of the audited balance sheet and related statements of income,
retained earnings, cash flows, and changes in stockholders equity for the
Company and its consolidated Subsidiaries as of December 31, 2000 and for the
Fiscal Year then ended, accompanied by a draft of the report thereon of the
Company's independent certified public accountants, PricewaterhouseCoopers. When
the audited financial statements required to be delivered pursuant to Section
5.2 hereof for the Fiscal Year ending on or about December 31, 2000 have been
delivered to the Agent, the Agent shall (and each of the parties hereto hereby
authorizes the Agent to) attach such financial statements hereto as Exhibit C.
All such financial statements have been prepared in accordance with GAAP and
present accurately and fairly in all material respects the financial position of
the Company and its consolidated Subsidiaries as at the dates thereof and the
results of operations of the Company and its consolidated Subsidiaries for the
periods then ended.
(b) The Latest Projections when submitted to the Lenders as required
herein represent the Borrowers' good faith estimate of the future financial
performance of the Company and its consolidated Subsidiaries for the periods set
forth therein. The Latest Projections have been prepared on the basis of the
assumptions set forth therein, which Borrowers believe are fair and reasonable
in light of current and reasonably foreseeable business conditions at the time
37
submitted to the Lenders, it being understood that nothing contained in this
Section 6.5(b) shall constitute a representation or warranty of the future
financial performance or results of operations of the Company or any of its
Subsidiaries.
6.6 [Intentionally Omitted.]
6.7 Debt. As of the Closing Date, no Borrower, nor any Other
Subsidiary-Domestic, has any Debt except (a) the Obligations, and (b) Debt
described on Schedule 6.7.
6.8 [Intentionally Omitted.]
6.9 Title to Property; Liens. Each Borrower has good title in fee simple to
all material Real Estate owned by such Borrower, and valid leasehold interests
in all material Real Estate leased by such Borrower, and each Borrower has good
title or valid ownership of all of its other material property (including the
assets reflected on the latest Financial Statements delivered to the Agent and
the Lenders, except as disposed of in the ordinary course of business since the
date thereof or as otherwise permitted under this Agreement), free of all Liens
except Liens permitted under Section 7.18.
6.10 Proprietary Rights. To the best of each Borrower's knowledge, none of
the Proprietary Rights of any Borrower or any Other Subsidiary infringes on or
conflicts with any other Person's property, and no other Person's property
infringes on or conflicts with the Proprietary Rights of any Borrower or any
Other Subsidiary, in any case where such infringement or conflict would
reasonably be expected to have a Material Adverse Effect.
6.11 [Intentionally Omitted.]
6.12 Litigation. Except as set forth on Schedule 6.12, there is no pending,
or to the best of any Borrower's knowledge threatened, action, suit, proceeding,
or counterclaim against the Company or any of its consolidated Subsidiaries
before any Governmental Authority or arbitrator or panels of arbitrators that
may not be stayed as a result of the Bankruptcy Cases.
6.13 [Intentionally Omitted.]
6.14 Environmental Laws. Except as otherwise disclosed on Schedule 6.14 or
as would not be reasonably likely to have a Material Adverse Effect:
(a) The Borrowers have complied in all material respects with all
Environmental Laws and none of the Borrowers nor any of its presently owned real
property or presently conducted operations, nor its previously owned real
property or prior operations, is subject to any enforcement order from or
liability agreement with any Governmental Authority or private Person respecting
(i) compliance with any Environmental Law or (ii) any potential liabilities and
costs or remedial action arising from the Release or threatened Release of a
Contaminant.
(b) The Borrowers have obtained all permits necessary for their
current operations under Environmental Laws, and all such permits are in good
standing and the Borrowers are in compliance with all material terms and
conditions of such permits.
38
(c) None of the Borrowers, nor, to the best of the Borrower's
knowledge, any of their respective predecessors in interest, has in violation of
applicable law stored, treated or disposed of any hazardous waste.
(d) None the Borrowers has received any summons, complaint, order or
similar written notice indicating that it is not currently in compliance with,
or that any Governmental Authority is investigating its compliance with, any
Environmental Laws or that it is or may be liable to any other Person as a
result of a Release or threatened Release of a Contaminant.
(e) To the best of the Borrowers' knowledge, none of the present or
past operations of any Borrower or any of its Subsidiaries is the subject of any
investigation by any Governmental Authority evaluating whether any remedial
action is needed to respond to a Release or threatened Release of a Contaminant.
(f) There is not now, nor to the best of the Borrowers' knowledge
has there ever been on or in the Real Estate:
(1) any underground storage tanks or surface impoundments, or
(2) any polychlorinated biphenyls (PCBs) used in hydraulic oils,
electrical transformers or other equipment.
(g) None of the Borrowers has filed any notice under any requirement
of Environmental Law reporting a spill or accidental and unpermitted Release or
discharge of a Contaminant into the environment.
(h) None of the Borrowers has entered into any negotiations or
settlement agreements with any Person (including the prior owner of its
property) imposing material obligations or liabilities on any Borrower or the
with respect to any remedial action in response to the Release of a Contaminant
or environmentally related claim.
(i) No Environmental Lien has attached to any or all of the Real
Estate.
6.15 No Violation of Law. No Borrower nor any Other Subsidiary is in
violation of any law, statute, regulation, ordinance, judgment, order, or decree
applicable to it which violation would reasonably be expected to have a Material
Adverse Effect.
6.16 No Default. Except as caused solely by the filing of the Bankruptcy
Cases, no Borrower nor any Other Subsidiary is in default with respect to any
note, indenture, loan agreement, mortgage, lease, deed, or other agreement to
which such Borrower or such Other Subsidiary is a party or by which it is bound,
which default would reasonably be expected to have a Material Adverse Effect.
6.17 ERISA Compliance. Except as specifically disclosed in Schedule 6.17
and except to the extent that any of the following would not reasonably be
expected to have a Material Adverse Effect:
39
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law. Each
Plan which is intended to qualify under Section 401(a) of the Code has received
a favorable determination letter from the IRS (or to the best of the Borrower's
knowledge is qualified under such Code Section) and to the best of any
Borrower's knowledge, nothing has occurred which would cause the loss of such
qualification. Each Borrower and each ERISA Affiliate has made all required
contributions to any Plan subject to Section 412 of the Code, and no application
for a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best of the Borrowers' knowledge,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or would reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules under ERISA with respect to any
Plan which has resulted or would reasonably be expected to result in a Material
Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) no Borrower nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
to the PBGC under Title IV of ERISA with respect to any Pension Plan (other than
premiums due and not delinquent under Section 4007 of ERISA); (iv) no Borrower
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 of
ERISA with respect to a Multi-employer Plan; and (v) no Borrower nor any ERISA
Affiliate has engaged in a transaction that could be subject to Section 4069 or
4212(c) of ERISA.
6.18 Taxes. Each Borrower and each Other Subsidiary have filed all federal
(or the equivalent thereof) and other tax returns and reports required to be
filed, and have paid all federal and other taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable other than (a) in the case of the Borrowers,
such taxes, assessments, fees and other governmental charges (i) the payment of
which has been stayed as a result of the Borrowers' status as
debtors-in-possession in the Bankruptcy Cases or by an order of the Bankruptcy
Court, (ii) that are not yet delinquent or (iii) that are being contested in
good faith and for which adequate reserves have been established by the
Borrowers in accordance with GAAP and (b) in the case of the Other Subsidiaries,
such taxes, assessments fees and other charges the nonpayment of which could not
reasonably be expected to have a Material Adverse Effect.
6.19 Regulated Entities. No Borrower and no Person controlling any
Borrower, is an "Investment Company" within the meaning of the Investment
Company Act of 1940. No Borrower is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, any state public utilities code or law, or any other federal or
state statute or regulation limiting its ability to incur indebtedness.
6.20 Use of Proceeds; Margin Regulations. The proceeds of the Loans are to
be used solely for working capital and other general corporate purposes arising
after the date hereof and
40
to pay certain pre-petition claims permitted to be paid in accordance with the
terms of the First Day Orders. No Borrower nor any Other Subsidiary is engaged
in the business of purchasing or selling Margin Stock or extending credit for
the purpose of purchasing or carrying Margin Stock. No part of the proceeds of
any Borrowing will be used in violation of Regulation U of the Board of
Governors of the Federal Reserve System as in effect from time to time
6.21 Copyrights, Patents, Trademarks and Licenses, etc. Each Borrower and
each Other Subsidiary owns or is licensed or otherwise has the right to use all
of the patents, trademarks, service marks, trade names, copyrights, contractual
franchises, licenses, rights of way, authorizations and other rights that are
reasonably necessary for the operation of its businesses, without conflict with
the rights of any other Person, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect. To the best of the
Borrowers' knowledge, no slogan or other advertising device, product, process,
method, substance, part or other material now employed, by any Borrower or any
Other Subsidiary infringes upon any rights held by any other Person, except for
such claims and infringements that would not reasonably be expected to have a
Material Adverse Effect. No claim or litigation regarding any of the foregoing
is pending or, to the knowledge of the Borrowers, threatened, and no patent,
invention, device, application, principle or any statute, law, rule, regulation,
standard or code is pertaining or, to the knowledge of the Borrowers, proposed,
which, in either case, would reasonably be expected to have a Material Adverse
Effect.
6.22 Full Disclosure. None of the representations or warranties made by any
Borrower in the Loan Documents as of the date such representations and
warranties are made or deemed made, and none of the statements contained in any
exhibit, report, statement or certificate furnished by or on behalf of any
Borrower or any Subsidiary in connection with the Loan Documents (including the
offering and disclosure materials delivered by or on behalf of the Borrowers to
the Lenders prior to the Closing Date), contains any untrue statement of a
material fact.
6.23 Bank Accounts. Schedule 6.23 contains as of the Closing Date a
complete and accurate list of all bank accounts maintained by any Borrower with
any bank or other financial institution.
6.24 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to (other than notices of default
hereunder), or filing with, any Governmental Authority or other Person (other
than the Bankruptcy Court) is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, any Borrower of
this Agreement or any other Loan Document, except the Bankruptcy Court and
notices to creditors required by the Bankruptcy Code.
6.25 Subsidiary Borrowers. As of the Closing Date, the Subsidiaries that
are Borrowers constitute all of the Subsidiaries of the Company incorporated or
organized under the laws of any state in the United States of America ("Domestic
Subsidiaries"), other than those Domestic Subsidiaries listed on Schedule 6.25
hereto.
6.26 Other Subsidiaries. None of the Other Subsidiaries, excluding the
Foreign Subsidiaries, owns any material amount of assets or has any material
income. None of the Other
41
Subsidiaries owns any patents, trademarks or licenses therefor or other assets
that are material to the business operations of any Borrower.
ARTICLE 7
AFFIRMATIVE AND NEGATIVE COVENANTS
Each Borrower jointly and severally covenants to the Agent and each
Lender that so long as any of the Obligations remain outstanding (other than not
yet asserted indemnification obligations) or this Agreement is in effect:
7.1 Taxes and Other Obligations. Each Borrower shall, and the Company shall
cause Other Subsidiary to, (a) file when due (subject to any applicable grace
periods and extensions obtained) all tax returns and other reports which it is
required to file; (b) pay, or provide for the payment, when due (or in
accordance with any relevant extension obtained), of all taxes, fees,
assessments and other governmental charges against it or upon its property,
income and franchises (in the case of any Borrower, arising after the Petition
Date), and make all required withholding and other tax deposits, and establish
adequate reserves for the payment of all such items; and (c) pay when due all
Debt owed by it (in the case of any Borrower, arising after the Petition Date)
and all claims of materialmen, mechanics, carriers, warehousemen, landlords,
processors and other like Persons (in the case of any Borrower, arising after
the Petition Date), and all other indebtedness owed by it (in the case of any
Borrower, arising after the Petition Date) and perform and discharge in a timely
manner all other obligations undertaken by it (in the case of any Borrower,
arising after the Petition Date); provided, however, no Borrower need pay any of
the foregoing (i) it is contesting in good faith by appropriate proceedings
diligently pursued, (ii) as to which such Borrower has established proper
reserves as required under GAAP, and (iii) the nonpayment of which does not
result in the imposition of a Lien (other than a Permitted Lien); provided,
further, that no Other Subsidiary need pay any of the foregoing where failure to
pay such obligation could not reasonably be expected to have a Material Adverse
Effect.
7.2 Legal Existence and Good Standing. Except as permitted under Section
7.9, each Borrower shall maintain its legal existence and its qualification and
good standing in all jurisdictions in which the failure to maintain such
existence and qualification or good standing would reasonably be expected to
have a Material Adverse Effect.
7.3 Compliance with Law and Agreements; Maintenance of Licenses. Each
Borrower shall comply, in all material respects, with all Requirements of Law of
any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act and all Environmental Laws),
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect. Each Borrower shall obtain and maintain all licenses,
permits, franchises, and governmental authorizations necessary to own its
property and to conduct its business as conducted on the Closing Date, except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect. No Borrower shall modify, amend or alter its certificate or
articles of incorporation, or its limited liability company operating agreement
or limited partnership agreement, as applicable, other than in a manner which
does not adversely affect the rights of the Lenders or the Agent in any material
respect.
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7.4 Maintenance of Property; Inspection of Property.
(a) Each Borrower shall maintain all of its property necessary and
useful in the conduct of its business, in good operating condition and repair,
ordinary wear and tear excepted, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
(b) Each Borrower shall permit representatives and independent
contractors of the Agent (at the expense of the Borrowers not to exceed four (4)
times per year unless an Event of Default has occurred and is continuing),
subject to reasonable safety requirements, to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom) and to discuss its affairs, finances and
account debtors, with its directors, officers, and following notice to the
Borrower Representative, independent public accountants, at such reasonable
times during normal business hours and as soon as may be reasonably desired,
upon reasonable advance notice to the Borrower Representative.
7.5 Insurance.
(a) Each Borrower shall maintain, and shall cause each of its
Subsidiaries to maintain, with financially sound and reputable insurers, such
insurance as is customary for Persons engaged in the same or similar business,
as the applicable Borrower (or such Subsidiary). In addition and without
limiting the foregoing, in the event that any improved Real Estate is determined
to be located within an area that has been identified by the Director of the
Federal Emergency Management Agency as a Special Flood Hazard Area ("SFHA"), the
Borrowers shall purchase and maintain flood insurance on the improved Real
Estate and any Equipment and Inventory located on such Real Estate. The amount
of said flood insurance will be reasonably determined by the Agent, and shall,
at a minimum, comply with applicable federal regulations as required by the
Flood Disaster Protection Act of 1973, as amended. The Borrowers shall also
maintain flood insurance for its Inventory and Equipment which is, at any time,
located in a SFHA.
(b) With respect to the insurance maintained by the Borrowers, the
Borrowers shall cause the Agent, for the ratable benefit of the Agent and the
Lenders, to be named as secured party or mortgagee and sole loss payee or
additional insured, in a manner acceptable to the Agent. Each policy of
insurance shall contain a clause or endorsement requiring the insurer to give
not less than thirty (30) days' (but ten (10) days' for nonpayment of premiums)
prior written notice to the Agent in the event of cancellation of the policy for
any reason whatsoever and a clause or endorsement stating that the interest of
the Agent shall not be impaired or invalidated by any act or neglect of any
Borrower or any of its Subsidiaries or the owner of any Real Estate for purposes
more hazardous than are permitted by such policy. All premiums for such
insurance shall be paid by the Borrowers when due, and certificates of insurance
and, if requested by the Agent or any Lender, photocopies of the policies, shall
be delivered to the Agent, in each case in sufficient quantity for distribution
by the Agent to each of the Lenders. If any Borrower fails to procure such
insurance or to pay the premiums therefor when due, the Agent may, and at the
direction of the Majority Lenders shall, do so from the proceeds of Revolving
Loans.
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7.6 Insurance and Condemnation Proceeds. The Borrower shall promptly notify
the Agent and the Lenders of any loss, damage, or destruction to the Collateral
with a value for any one incident or related incidents in excess of $100,000 or
a value for all incidents after the Closing Date in excess of $1,000,000,
whether or not covered by insurance. The Agent is hereby authorized to collect
all insurance and condemnation proceeds in respect of Collateral directly and to
apply or remit them as follows:
(i) With respect to insurance and condemnation proceeds
relating to Collateral other than Fixed Assets, after deducting from
such proceeds the reasonable expenses, if any, incurred by the Agent in
the collection or handling thereof, the Agent shall apply such
proceeds, ratably, to the reduction of the Obligations in the order
provided for in Section 3.6.
(ii) With respect to insurance and condemnation proceeds
relating to Collateral consisting of Fixed Assets, the Agent shall
permit or require the applicable Borrower to use such proceeds, or any
part thereof, to replace, repair, restore or rebuild the relevant Fixed
Assets in a diligent and expeditious manner with materials and
workmanship of substantially the same quality as existed before the
loss, damage or destruction so long as (1) no Default or Event of
Default has occurred and is continuing, (2) the aggregate proceeds
(plus the aggregate Net Proceeds of Material Asset Dispositions)
received after the Closing Date do not exceed $20,000,000 and (3) the
Borrower first (i) provides the Agent and the Majority Lenders with
plans and specifications for any such repair or restoration which shall
be reasonably satisfactory to the Agent and the Majority Lenders and
(ii) demonstrates to the reasonable satisfaction of the Agent and the
Majority Lenders that the funds available to it will be sufficient to
complete such project in the manner provided therein. In all other
circumstances, the Agent shall apply such insurance and condemnation
proceeds, ratably, to the reduction of the Obligations in the order
provided for in Section 3.6.
7.7 Environmental Laws.
(a) The Borrowers shall, and shall cause each of its Subsidiaries
to, conduct its business in compliance with all Environmental Laws applicable to
it, including those relating to the generation, handling, use, storage, and
disposal of any Contaminant. The Borrowers shall, and shall cause each of their
Subsidiaries to, take prompt and appropriate action to respond to any
non-compliance with Environmental Laws and shall regularly report to the Agent
on such response.
(b) Without limiting the generality of the foregoing, the Borrowers
shall, upon the request of the Agent, submit to the Agent and the Lenders
annually, commencing on the first anniversary of the Closing Date, and on each
anniversary of the Closing Date thereafter, an update of the status of each
environmental compliance or liability issue that would be reasonably likely to
have a Material Adverse Effect. The Agent or any Lender may request copies of
technical reports prepared by any Borrower and its communications with any
Governmental Authority to determine whether the Borrower or any of its
Subsidiaries is proceeding reasonably to correct, cure or contest in good faith
any alleged non-compliance or
44
environmental liability. The Borrowers shall, at the Agent's or the Majority
Lenders' request and at the Borrowers' expense, (i) retain an independent
environmental engineer acceptable to the Agent to evaluate the site, including
tests if appropriate, where the non-compliance or alleged non-compliance with
Environmental Laws has occurred and prepare and deliver to the Agent, in
sufficient quantity for distribution by the Agent to the Lenders, a report
setting forth the results of such evaluation, a proposed plan for responding to
any environmental problems described therein, and an estimate of the costs
thereof, and (ii) provide to the Agent and the Lenders a supplemental report of
such engineer whenever the scope of the environmental problems, or the response
thereto or the estimated costs thereof, shall increase in any material respect.
(c) Subject to the rights of landlords, tenants and subtenants, the
Agent and its representatives will have the right at any reasonable time to
enter and visit the Real Estate and any other place where any property of the
Borrower is located for the purposes of observing the Real Estate, taking and
removing soil or groundwater samples, and conducting tests on any part of the
Real Estate. The Agent is under no duty, however, to visit or observe the Real
Estate or to conduct tests, and any such acts by the Agent will be solely for
the purposes of protecting the Agent's Liens and preserving the Agent and the
Lenders' rights under the Loan Documents. No site visit, observation or testing
by the Agent and the Lenders will result in a waiver of any default of the
Borrowers or impose any liability on the Agent or the Lenders. In no event will
any site visit, observation or testing by the Agent be a representation that
hazardous substances are or are not present in, on or under the Real Estate, or
that there has been or will be compliance with any Environmental Law. No
Borrower nor any other party is entitled to rely on any site visit, observation
or testing by the Agent. The Agent and the Lenders owe no duty of care to
protect the Borrowers or any other party against, or to inform the Borrowers or
any other party of, any hazardous substances or any other adverse condition
affecting the Real Estate. The Agent may in its discretion disclose to the
Borrowers or to any other party if so required by law any report or findings
made as a result of, or in connection with, any site visit, observation or
testing by the Agent. The Borrowers understand and agree that the Agent makes no
warranty or representation to the Borrowers or any other party regarding the
truth, accuracy or completeness of any such report or findings that may be
disclosed. The Borrowers also understand that depending on the results of any
site visit, observation or testing by the Agent and disclosed to the Borrowers,
the Borrowers may have a legal obligation to notify one or more environmental
agencies of the results, that such reporting requirements are site-specific, and
are to be evaluated by the Borrowers without advice or assistance from the
Agent. In each instance, the Agent will give the Borrowers reasonable notice
before entering the Real Estate or any other place the Agent is permitted to
enter under this Section 7.7(c). The Agent will make reasonable efforts to avoid
interfering with any Borrower's use of the Real Estate or any other property in
exercising any rights provided hereunder.
7.8 Compliance with ERISA. Except as required under the Bankruptcy Code or
an order of the Bankruptcy Court, or except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect, each Borrower shall,
and the Company shall cause each of its ERISA Affiliates to: (a) maintain each
Plan in compliance in all material respects with the applicable provisions of
ERISA, the Code and other federal or state law; (b) cause each Plan which is
qualified under Section 401(a) of the Code to maintain such qualification; (c)
make all required contributions to any Plan subject to Section 412 of the Code;
(d) not engage in a
45
prohibited transaction (as defined in Sections 406 of ERISA and 4975 of the
Code) or violation of the fiduciary responsibility rules with respect to any
Plan; and (e) not engage in a transaction that could be subject to Section 4069
or 4212(c) of ERISA.
7.9 Mergers, Consolidations or Sales. Except for Permitted Acquisitions, no
Borrower shall enter into any transaction of merger, reorganization, or
consolidation, or transfer, sell, assign, lease, or otherwise dispose of all or
any part of its property, or wind up, liquidate or dissolve, or agree to do any
of the foregoing (or apply to the Bankruptcy Court for authority to do so),
except (i) for sales of Inventory in the ordinary course of its business; (ii)
for sales or other dispositions of property in the ordinary course of business
that is surplus, worn out, obsolete or no longer useable by any Borrower; (iii)
for any merger or consolidation of any Borrower with any other Borrower; (iv)
for any transfer, sale, assignment, lease or other disposition of all or any
part of its assets (upon voluntary liquidation or otherwise) by any Borrower to
any other Borrower; (v) the sale or compromise of past due accounts receivable
in connection with the collection thereof in the ordinary course of business;
(vi) leases or subleases (or assignments of leases or subleases) of fixed assets
which are not included or intended to be included in the Borrowing Base or
licenses or sublicenses (or assignments of licenses or sublicenses) of
intangibles, in either case in the ordinary course of business; (vii)
dispositions of Cash Equivalents; (viii) as long as no Default or Event of
Default has occurred and is continuing, asset dispositions which are not
Material Asset Dispositions, (ix) as long as no Default or Event of Default has
occurred and is continuing, a Material Asset Disposition as long as, after
giving effect to such Material Asset Disposition, the aggregate Net Proceeds
from all Material Asset Dispositions (plus the aggregate amount of insurance and
condemnation proceeds relating to Collateral consisting of Fixed Assets)
received by the Borrowers after the date hereof is less than $20,000,000, (x) as
long as no Default or Event of Default has occurred and is continuing, a
Material Asset Disposition if, after giving effect to such Material Asset
Disposition, (a) the aggregate Net Proceeds from all Material Asset Dispositions
(plus the aggregate amount of insurance and condemnation proceeds relating to
Collateral consisting of Fixed Assets) received by the Borrowers after the date
hereof is greater than $20,000,000 but less than $50,000,000, (b) the aggregate
outstanding Obligations at the time of the consummation of the relevant Material
Asset Disposition are less than $150,000,000 and (c) none of the assets which
are the subject of such Material Asset Disposition is or was an Eligible Fixed
Asset or an asset located at or on any Real Estate included within the
definition of Land and Buildings.
7.10 Distributions; Capital Change; Restricted Investments. No Borrower
shall (or apply to the Bankruptcy Court for authority to) (i) directly or
indirectly declare or make, or incur any liability to make, any Distribution,
except (A) Distributions to any other Borrower and (B) the acquisitions of
shares of the Company's stock pursuant to any compensation or benefit plan
approved by the Majority Lenders (in their sole discretion) and the Bankruptcy
Court, (ii) make any change in its capital structure which would be reasonably
expected to have a Material Adverse Effect or (iii) make any Restricted
Investment, except Permitted Acquisitions.
7.11 Transactions Affecting Collateral or Obligations. No Borrower nor any
of its Subsidiaries shall enter into any transaction which would be reasonably
expected to have a Material Adverse Effect.
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7.12 Guaranties. No Borrower shall make, issue, or become liable on (or
apply to the Bankruptcy Court for authority to make, issue or become liable on)
any Guaranty, except (a) Guaranties of the Obligations in favor of the Agent;
(b) unsecured Guaranties outstanding on the date hereof and listed on Schedule
6.7 and including, in the case of guaranties for the benefit of the Other
Subsidiaries, renewals, extensions and refinancings of such Guaranties to the
extent of the aggregate amount of such Guaranties as of the date hereof; (c)
unsecured Guaranties by any Borrower of Debt or other obligations of any
Borrower other than Guaranties of Debt or other obligations of any other
Borrower existing on the Petition Date; (d) unsecured Guaranties by any Borrower
of Debt or other obligations of any Other Subsidiary incurred in the ordinary
course of business of such Other Subsidiary incurred after the Closing Date.
7.13 Debt. No Borrower shall incur or maintain any Debt (or apply to the
Bankruptcy Court for authority to do so), other than: (a) the Obligations; (b)
Debt existing on the Closing Date and described on Schedule 6.7; (c) Capital
Leases of Equipment and purchase money secured Debt incurred following the
Closing Date to purchase Equipment provided that (i) Liens securing the same
attach only to the Equipment acquired by the incurrence of such Debt, and (ii)
the aggregate amount of such Debt (including Capital Leases) outstanding does
not exceed $25,000,000 at any time; (d) Permitted Intercompany Debt; (e) Debt
consisting of Guaranties which are permitted by Section 7.12; (f) Debt arising
pursuant to Hedging Agreements entered into in the ordinary course of business
and not for speculative purposes); (g) Debt of any entity existing at the time
such entity is acquired by a Borrower or any Other Subsidiary provided that such
Debt shall not have been incurred in contemplation of such acquisition and no
Borrower shall guaranty or otherwise assume such Debt; (h) Debt owing by ▇. ▇.
▇▇▇▇▇ & Co.-▇▇▇▇. to ART incurred in a manner consistent with the joint venture
arrangements relating to ART which are in existence on the Closing Date, (i)
Debt (1) incurred after the Petition Date, but prior to the time at which the
initial Revolving Loans are made hereunder, (2) owing to one or more Other
Subsidiaries, and (3) which is repaid with the proceeds of the initial Loans
hereunder, (j) Debt incurred (i) while no Default or Event of Default has
occurred and is continuing, (ii) while the Obligations exceed $50,000,000 and
(iii) owing to one or more Other Subsidiaries, and (k) other unsecured Debt not
exceeding $25,000,000 in aggregate principal amount at any time outstanding. The
aggregate amount of lease payments under synthetic leases entered into by the
Borrowers following the Petition Date shall not exceed $15,000,000.
7.14 Prepayment. No Borrower shall voluntarily prepay or repay any Debt (or
apply to the Bankruptcy Court for authority to do so), except (i) any Borrower
may repay or prepay the Obligations in accordance with the terms of this
Agreement, (ii) any Borrower may repay or prepay Debt of such Borrower to any
other Borrower, (iii) any Borrower may repay or prepay Debt permitted hereunder:
(a) from the proceeds of new Debt (other than the Obligations) incurred to
refinance such Debt and permitted hereunder to be incurred, (b) under Capital
Leases for property no longer used by the Borrowers in connection with the
settlement, termination or assignment of such Capital Lease, (c) secured by
assets in connection with any sale or other disposition of such assets permitted
hereunder to the extent such prepayment is financed with the proceeds of such
sale or disposition, or (d) consisting of Capital Leases as long as such Capital
Leases are paid in full in connection with any such prepayment and such
prepayment is made in connection with the sale of the property subject to such
Capital Lease and (iv) as long as no Default or Event of Default has occurred
and is continuing, Borrower may repay or prepay Debt permitted under Section
7.13(h) hereof, Section 7.13(i) hereof, Section 7.13(j) hereof and, as
47
long as such repayment or prepayment is in the ordinary course of business,
Section 7.13(k) hereof.
7.15 Transactions with Affiliates. Except as set forth on Schedule 7.15,
except as set forth below, except Investments described in clauses (h), (i) and
(k) of the definition of Restricted Investment and except for the repurchase of
receivables from Receivables Purchasing (for an amount not to exceed the
aggregate amount owed by Receivables Purchasing under the Receivables Purchase
Agreement which is a part of the Receivables Facility) which were acquired by
Receivables Purchasing pursuant to the Receivables Facility, no Borrower shall
sell, transfer, distribute, or pay any money or property, including, but not
limited to, any fees or expenses of any nature (including, but not limited to,
any fees or expenses for management services), to any Affiliate, or lend or
advance money or property to any Affiliate, or invest in (by capital
contribution or otherwise) or purchase or repurchase any stock or indebtedness,
or any property, of any Affiliate, or become liable on any Guaranty of the
indebtedness, dividends, or other obligations of any Affiliate, unless such
transaction is (a) otherwise permitted under this Agreement or (b) entered into
in the ordinary course of business consistent with past practices (including,
without limitation, those transactions authorized by the First Day Orders), in
amounts and upon terms no less favorable to such Borrower than would be obtained
in a comparable arm's-length transaction with a third party who is not an
Affiliate.
7.16 Investment Banking and Finder's Fees. The Borrowers shall defend and
indemnify the Agent and the Lenders against and hold them harmless from all
claims of any Person that any Borrower is obligated to pay to such Person for
any investment banking or similar or related fee, underwriter's fee, finder's
fee or broker's fee in connection with this Agreement, and all reasonable costs
and expenses (including reasonable attorneys' fees) incurred by the Agent and/or
any Lender in connection therewith.
7.17 Business Conducted. No Borrower shall engage directly or indirectly in
any line of business other than the businesses in which the Company and its
Subsidiaries are engaged on the Closing Date and businesses related or similar
thereto or entered into in connection therewith.
7.18 Liens. No Borrower shall create, incur, assume, or permit to exist any
Lien on any property now owned or hereafter acquired by any of them, except
Permitted Liens. No Borrower shall create, incur, assume or permit to exist any
Lien on Accounts, Inventory or Eligible Fixed Assets, except Permitted Liens
described in clauses (a) - (f) of the definition thereof.
7.19 [Intentionally Omitted]
7.20 New Subsidiaries. No Borrower shall, directly or indirectly, organize,
create, acquire or permit to exist any Subsidiary other than (a) those listed on
Schedule 6.4, (b) those acquired pursuant to Permitted Acquisitions, (c) Foreign
Subsidiaries and (d) subsidiaries which become a Borrower hereunder or are
otherwise fully liable for the Obligations (and have granted a lien on all of
their assets to the Agent to secure the Obligations), in each case pursuant to
documentation acceptable to the Agent.
48
7.21 Fiscal Year. The Borrowers shall not change their Fiscal Year.
7.22 EBITDAR. The Borrowers shall have EBITDAR of not less than the
following amounts for the following fiscal quarters of each Fiscal Year,
commencing with the 2001 Fiscal Year:
Fiscal Quarter EBITDAR
-------------- -------
First fiscal quarter $20,000,000
Second fiscal quarter $35,000,000
Third fiscal quarter $35,000,000
Fourth fiscal quarter $30,000,000
In addition, the Borrowers shall have EBITDAR of not less than
$120,000,000 for the twelve calendar months ending on March 31, 2001 and for the
twelve (12) calendar months ending on the last day of each calendar month
thereafter.
7.23 Cash Equivalents. The Borrowers shall at all times maintain cash, Cash
Equivalents (plus, without duplication, the cash value of COLI, net of all loans
with respect thereto) which are owned by the Borrowers free and clear of all
Liens and rights of any other Person (other than the Agent) of not less than
$50,000,000 in the aggregate (in each case as determined in accordance with
GAAP).
7.24 Use of Proceeds. No Borrower shall, nor shall the Company cause or
permit any Other Subsidiary to, use any portion of the Loan proceeds, directly
or indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of any Borrower or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act, (v) for any purpose other than
(a) working capital and other general corporate purposes arising after the
Petition Date, (b) the payment of certain claims arising on or prior to the
Petition Date and permitted to be paid pursuant to the terms of the First Day
Orders, (c) to repurchase all of the receivables of Receivables Purchasing (for
an aggregate amount not to exceed the aggregate amount owed by Receivables
Purchasing under the Receivables Purchase Agreement which is a part of the
Receivables Facility) which were acquired by Receivables Purchasing pursuant to
the Receivables Facility or (d) with respect to the initial Loans hereunder, to
repay Debt described in Section 7.13(i) hereof.
7.25 Securitization. In furtherance and not in limitation of Section 7.9
and Section 7.18 hereof, no Borrower may sell, transfer, ▇▇▇▇▇ ▇ ▇▇▇▇ on or
otherwise transfer any Accounts or related rights or interests pursuant to a
securitization facility.
7.26 Accounts. The Borrowers shall, unless otherwise agreed to in writing
by the Agent, continue to cause all proceeds of Accounts to be forwarded to
lockbox accounts in existence on the date hereof and as described as such on
Schedule 6.23 hereof.
49
7.27 Post Closing Matters. On or prior to the entry of the Final Order:
(i) The Borrowers shall deliver to any Agent a Schedule 7.27(i) which
shall set forth all Patents, Trademarks and Copyrights in which a Borrower has
an interest in or title to (and the Borrowers shall, promptly upon obtaining any
such interests after the initial delivery of such Schedule, provide the Agent
with the relevant information regarding each such interest;
(ii) The Agent shall have received duly executed tri-party agreements
in form and substance satisfactory to the Agent with respect to the lockbox
accounts and other relevant accounts of the Borrowers (which agreements shall
provide that the Agent may, after the occurrence of an Event of Default, direct
the applicable bank to transfer funds from the applicable accounts as the Agent
directs);
(iii) The Borrowers shall provide the Agent with a listing, in
reasonable detail, of the real property owned or leased by all or more Borrowers
with is not otherwise listed or described on Schedule 1.7; and
(iv) The Borrowers shall provide the Agent the results of UCC-1 and
other Lien searches, in all applicable jurisdictions, against the Borrowers (in
each case dated as of a date reasonably satisfactory to the Agent) which
searches shall reflect the absence of Liens on assets (including Inventory and
Accounts) of the Borrowers, other than Liens (a) which are Permitted Liens
(other than Liens which are Miscellaneous Liens as permitted on Schedule 6.7)
and which secure obligations in an aggregate amount not to exceed $5,000,000,
(b) which are otherwise reasonably satisfactory to the Agent or (c) for which
termination statements and releases reasonably satisfactory to the Agent have
been tendered.
7.28 Further Assurances. Each Borrower shall execute and deliver, or cause
to be executed or delivered, to the Agent and/or the Lenders such documents and
agreements, and shall take or cause to be taken such actions, as the Agent or
any Lender may, from time to time, request to carry out the terms and conditions
of this Agreement and the other Loan Documents.
ARTICLE 8
CONDITIONS OF LENDING
8.1 Conditions Precedent to Making of Initial Loans. The obligation of the
Lenders to make the initial Revolving Loans (if any) (and the obligation of the
Agent to cause the Letter of Credit Issuer to issue the initial Letter of
Credit), are subject to the following conditions precedent having been satisfied
in a manner satisfactory to the Agent and each Lender (or waived in writing by
the Agent and each Lender):
(a) This Agreement and the other Loan Documents shall have been
executed by each party thereto and the Borrowers shall have performed and
complied with all covenants, agreements and conditions contained herein and the
other Loan Documents which are required to be performed or complied with by the
Borrowers before or on such date.
(b) All representations and warranties made hereunder and in the other
Loan Documents shall be true and correct as if made on such date.
50
(c) No Default or Event of Default shall have occurred and be
continuing after giving effect to the Loans to be made and the Letters of Credit
to be issued on such date.
(d) The Agent shall have received ALTA title policies, in form and
substance acceptable to Agent, with respect to the Land and Buildings.
(e) The Agent shall have received the results of UCC-1 and other Lien
searches, in all applicable jurisdictions, against ▇. ▇. ▇▇▇▇▇ & Co.-▇▇▇▇. (in
each case dated as of a date reasonably satisfactory to the Agent) which
searches shall reflect the absence of Liens on assets (including Inventory and
Accounts) of ▇. ▇. ▇▇▇▇▇ & Co.-Conn., other than Liens (a) which are Permitted
Liens (other than Liens which are Miscellaneous Liens as permitted on Schedule
6.7) and which secure obligations in an aggregate amount not to exceed
$5,000,000, (b) which are otherwise reasonably satisfactory to the Agent or (c)
for which termination statements and releases reasonably satisfactory to the
Agent have been tendered.
(f) The Agent shall have received copies of (i) the articles of
incorporation or certificates of formation or other charter documents, (ii)
copies of the bylaws or other similar agreement and all amendments thereto,
(iii) copies of resolutions of the Board of Directors or similar managing body
of each Borrower approving and adopting the Loan Documents to which it is a
party, the transactions contemplated therein and authorizing execution and
delivery thereof, in each case, of each Borrower and certified by a secretary or
assistant secretary of the Company to be true and correct and in force and
effect as of such date and (iv) a certificate of the Secretary or Assistant
Secretary (or equivalent thereof) of each Borrower certifying as to the
incumbency of the officers of each Borrower executing one or more Loan
Documents.
(g) The Borrowers shall have paid all fees and expenses of the Agent
and the Attorney Costs incurred in connection with any of the Loan Documents and
the transactions contemplated thereby to the extent invoiced.
(h) The Agent shall have received evidence, in form, scope, and
substance, reasonably satisfactory to the Agent, of all insurance coverage as
required by this Agreement.
(i) The Agent and the Lenders shall have had an opportunity, if they so
choose, to examine the books of account and other records and files of the
Borrowers and to make copies thereof, and to conduct a pre-funding audit which
shall include, without limitation, verification of Inventory, Accounts, and the
Borrowing Base, and the results of such examination and audit shall have been
satisfactory to the Agent and the Lenders in all respects.
(j) All proceedings taken in connection with the execution of this
Agreement, the Revolving Loan Notes (if any), all other Loan Documents and all
documents and papers relating thereto shall be satisfactory in form, scope, and
substance to the Agent and the Lenders.
(k) The Bankruptcy Cases shall have been commenced by the Borrowers,
and the Borrowers shall each be a debtor and debtor-in-possession.
(l) All First Day Orders and all other orders entered in the Bankruptcy
Cases shall be in form and substance reasonably satisfactory to the Agent and
its counsel.
51
(m) Without limiting the generality of the items described above, the
Borrowers shall have delivered or caused to be delivered to the Agent (in form
and substance reasonably satisfactory to the Agent), the financial statements,
instruments, resolutions, documents, agreements, certificates and other items
required by this Section 8.1.
(n) The Agent shall have received a signed copy of the interim order
(the "Interim Order") of the Bankruptcy Court (promptly upon entry thereof but
no later than fifteen (15) days after the Petition Date) in substantially the
form of Exhibit F authorizing and approving the transactions contemplated hereby
and the Loan Documents and the granting of the superpriority claim status and
liens as described in Section 1.8 and the Interim Order. The Interim Order (i)
shall be in form and substance satisfactory to the Agent, (ii) shall be
certified by the Clerk of the Bankruptcy Court as having been duly entered,
(iii) shall have authorized extensions of credit by the Lenders in amounts up to
$100,000,000, (iv) shall approve the payment by the Borrowers of all of the fees
set forth in Section 2.4 or 2.5, and (v) shall be in full force and effect and
shall not have been vacated, reversed, modified, amended or stayed.
(o) The Agent shall have received an appraisal, in scope, form and
substance satisfactory to the Agent, with respect to the machinery, equipment
and Land and Buildings of the Borrowers included (or contemplated to be
included) in the Borrowing Base.
(p) Environmental reports, in form and substance, and prepared by a
Person, satisfactory to the Agent, with respect to the Real Estate included (or
contemplated to be included) in the Borrowing Base.
The acceptance by the Borrowers of any Loans made or Letters
of Credit issued on any date shall be deemed to be a representation and warranty
made by the Borrowers to the effect that all of the conditions precedent to the
making of such Loans or the issuance of such Letters of Credit have been
satisfied, with the same effect as delivery to the Agent and the Lenders of a
certificate signed by a Responsible Officer of the Borrowers, dated such date,
to such effect.
Execution and delivery to the Agent by a Lender of a
counterpart of this Agreement shall be deemed confirmation by such Lender that
(i) the decision of such Lender to execute and deliver to the Agent an executed
counterpart of this Agreement was made by such Lender independently and without
reliance on the Agent or any other Lender as to the satisfaction of any
condition precedent set forth in this Section 8.1, and (ii) all documents sent
to such Lender for approval consent, or satisfaction were acceptable to such
Lender.
8.2 Conditions Precedent to Each Loan. The obligation of the Lenders to
make each Loan, including the initial Revolving Loans, and the obligation of the
Agent to cause the Letter of Credit Issuer to issue any Letter of Credit shall
be subject to the further conditions precedent that on and as of the date of any
such extension of credit (provided, however, that such conditions precedent are
not conditions to each Lender participating in or reimbursing the Bank or the
Agent for such Lenders' Pro Rata Share of any Non-Ratable Loan made in
accordance with the provisions of Section 1.2(h) or for any drawing under a
Letter of Credit or payment under a Credit Support):
52
(a) The following statements shall be true, and the acceptance by the
Borrowers of any extension of credit shall be deemed to be a statement to the
effect set forth in clauses (i) and (ii) with the same effect as the delivery to
the Agent and the Lenders of a certificate signed by a Responsible Officer of
the Borrower Representative, dated the date of such extension of credit, stating
that:
(i) The representations and warranties contained in this Agreement and
the other Loan Documents are correct in all material respects on and as of the
date of such extension of credit as though made on and as of such date, other
than any such representation or warranty which relates to a specified prior date
and except to the extent the Agent and the Lenders have been notified in writing
by the Borrower Representative that any representation or warranty is not
correct and the Majority Lenders have explicitly waived in writing compliance
with such representation or warranty; and
(ii) No event has occurred and is continuing, or would result from such
extension of credit, which constitutes a Default or an Event of Default; and
(iii) No event has occurred and is continuing, or would result from
such extension of credit, which has had or would reasonably be expected to have
a Material Adverse Effect.
(b) No such Borrowing shall exceed Availability.
(c) None of the Bankruptcy Cases shall have been dismissed or converted
to chapter 7 of the Bankruptcy Code, no Borrower shall have filed an application
for an order dismissing its or any other Borrower's Bankruptcy Case or
converting its or any other Borrower's Bankruptcy Case to a case under chapter 7
of the Bankruptcy Code, and no trustee under chapter 7 or chapter 11 of the
Bankruptcy Code shall have been appointed in any of the Bankruptcy Cases. No
application shall have been filed by any Borrower for the approval of any other
superpriority administrative claim in any Bankruptcy Case which is pari passu
with or senior to the Claims of the Agent and/or any Lender against the Borrower
(and, other than the Carve-Out, no such claim or lien has arisen) and neither
the Interim Order nor the Final Order, as applicable, shall be stayed, modified,
amended, reversed, rescinded or vacated.
(d) If such Revolving Loan is to be made or such Letter of Credit is to
be issued prior to the time at which the Bankruptcy Court shall have entered a
final order (the "Final Order") in form and substance satisfactory to the Agent
in its sole discretion, certified by the Clerk of the Bankruptcy Court as having
been duly entered, the Interim Order shall be in full force and effect and shall
not have been vacated, reversed, modified, amended or stayed, and if such
Revolving Loan is to be made or such Letter of Credit is to be issued after the
45th day after the Petition Date, the Final Order shall be in full force and
effect and shall not have been vacated, reversed, modified, amended or stayed.
(e) As to each Revolving Loan to be made on or after the date on which
the Final Order is entered, and with all their obligations current, the
Borrowers shall have or shall have had Availability of at least $100,000,000 as
of the date on which the Final Order is entered.
53
(f) If, after giving effect to such Loan or such Letter of Credit, the
aggregate outstanding principal amount of all Loans plus the aggregate
outstanding undrawn amount of all Letters of Credit shall exceed $25,000,000,
the Borrowers shall have delivered to the Agent the results of UCC-1 and other
Lien searches, in all applicable jurisdictions, against the Borrowers (in each
case dated as of a date reasonably satisfactory to the Agent) which searches
shall reflect the absence of Liens on assets (including Inventory and Accounts)
of the Borrowers, other than Liens (a) which are Permitted Liens (other than
Liens which are Miscellaneous Liens as permitted on Schedule 6.7) and which
secure obligations in an aggregate amount not to exceed $5,000,000, (b) which
are otherwise reasonably satisfactory to the Agent or (c) for which termination
statements and releases reasonably satisfactory to the Agent have been tendered.
ARTICLE 9
DEFAULT; REMEDIES
9.1 Events of Default. It shall constitute an event of default ("Event of
Default") if any one or more of the following shall occur for any reason:
(a) (i) any failure by any Borrower to pay the principal of any of the
Loans or to pay any reimbursement obligations relating to Letters of Credit or
Credit Supports when due, whether upon demand or otherwise, or (ii) any failure
by any Borrower to pay any interest on any of the Loans or any fees or other
Obligations or other amount owing hereunder within three (3) Business Days of
the applicable due date, whether upon demand or otherwise;
(b) any representation or warranty made or deemed made by any Borrower
in this Agreement or in any of the other Loan Documents, any Financial
Statement, or any certificate furnished by any Borrower or any Other Subsidiary
at any time to the Agent or any Lender pursuant to any Loan Document shall prove
to be untrue in any material respect as of the date on which made, deemed made,
or furnished;
(c) (i) any default shall occur in the observance or performance of any
of the covenants and agreements contained in Sections 7.2, 7.8, 7.9, 7.10, 7.11,
7.12, 7.13, 7.14, 7.15, 7.17, 7.20, 7.21, 7.22, 7.24, and 7.25, (ii) any default
shall occur in the observance or performance of any of the covenants and
agreements contained in Sections 5.2, 5.3, 7.5, 7.26 and 7.27 and such default
shall continue for three (3) Business Days or more; or (iii) any default shall
occur in the observance or performance of any of the other covenants or
agreements contained in any other Section of this Agreement or any other Loan
Document, any other Loan Documents, or any other agreement entered into at any
time to which the Borrowers or any Subsidiary and the Agent or any Lender are
party (including in respect of any Bank Products) and such default shall
continue for fifteen (15) days or more;
(d) any Borrower shall file a certificate of dissolution under
applicable state law or shall be liquidated, dissolved or wound-up or shall
commence any action or proceeding for dissolution, winding-up or liquidation, or
shall take any corporate action in furtherance thereof;
54
(e) all or any material part of the property of the Borrowers, taken as
a whole, shall be nationalized, expropriated or condemned, seized or otherwise
appropriated, or custody or control of such property or of any Borrower shall be
assumed by any Governmental Authority or any court of competent jurisdiction at
the instance of any Governmental Authority, except where contested in good faith
by proper proceedings diligently pursued where a stay of enforcement is in
effect;
(f) Any Loan Document shall be terminated, revoked or declared void or
invalid or unenforceable or challenged by any Borrower or any other obligor;
(g) one or more judgments, orders, decrees or arbitration awards is
entered against any Borrowers involving in the aggregate liability (to the
extent not covered by independent third-party insurance as to which the insurer
does not dispute coverage) as to any single or related or unrelated series of
transactions, incidents or conditions, of $10,000,000 or more, and the same
shall remain unsatisfied, unvacated and unstayed pending appeal for a period of
thirty (30) days after the entry thereof;
(h) any loss, theft, damage or destruction of any item or items of
Collateral or other property of any Borrower or any Other Subsidiary occurs, or
any Litigation is commenced against any Borrower (or any Other Subsidiary or any
change in the facts and circumstances of such Litigation occurs), which would
reasonably be expected to cause a Material Adverse Effect and is not adequately
covered by insurance;
(i) there is filed against any Borrower or any Other Subsidiary any
action, suit or proceeding under any federal or state racketeering statute
(including the Racketeer Influenced and Corrupt Organization Act of 1970), which
action, suit or proceeding (i) is not dismissed within one hundred twenty (120)
days, and (ii) would reasonably be expected to result in the confiscation or
forfeiture of any material portion of the Collateral;
(j) for any reason any Loan Document ceases to be in full force and
effect or any Lien with respect to any material portion of the Collateral
intended to be secured thereby ceases to be, or is not, valid, perfected and
prior to all other Liens (other than Permitted Liens) or is terminated (other
than as permitted hereby), revoked or declared void;
(k) (i) an ERISA Event shall occur with respect to a Pension Plan or
Multi-employer Plan which has resulted or would reasonably be expected to result
in liability of any Borrower under Title IV of ERISA to the Pension Plan,
Multi-employer Plan or the PBGC in an aggregate amount in excess of $25,000,000;
(ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans
at any time exceed $25,000,000; or (iii) any Borrower or any ERISA Affiliate
shall fail to pay when due, after the expiration of any applicable grace period,
any installment payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multi-employer Plan in an aggregate amount in excess of
$25,000,000;
(l) there occurs a Change of Control;
(m) any of the Bankruptcy Cases shall be dismissed or converted to a
case under chapter 7 of the Bankruptcy Code, or any Borrower shall file an
application for an order dismissing any of the Bankruptcy Cases or converting
any of the Bankruptcy Cases to a case
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under chapter 7 of the Bankruptcy Code; or an application shall be filed by any
Borrower for the approval of any other superpriority administrative claim or
lien in any Bankruptcy Case (other than the Carve-Out) which is pari passu with
or senior to the claims or liens of the Agent and/or any Lender against the
Borrowers, or there shall arise any such pari passu or senior superpriority
administrative claim or lien (other than the Carve-Out);
(n) the Bankruptcy Court shall enter an order or orders that are not
vacated, reversed, rescinded or stayed pending appeal granting relief from the
automatic stay applicable under Section 362 of the Bankruptcy Code to the holder
or holders of any security interest to permit foreclosure (or the granting of a
deed in lieu of foreclosure or the like) in any assets of any Borrower with a
value equal to or in excess of $5,000,000; or an order shall be entered by the
Bankruptcy Court granting relief from the automatic stay applicable under
Section 362 of the Bankruptcy Code to permit the creation, perfection or
enforcement of any judgment, lien, levy or attachment based on any judgment,
whether or not such judgment arises from or gives rise to a pre-petition or
post-petition claim with a value equal to or in excess of $5,000,000; or an
order shall be entered by the Bankruptcy Court that is not stayed pending appeal
otherwise granting relief from the automatic stay to any creditor of any
Borrower (other than the Agent and the Lenders in their capacities as such) with
respect to any claim with a value equal to or in excess of $5,000,000; provided,
however, that it shall not be an Event of Default if relief from the automatic
stay is lifted solely for the purpose of (i) allowing such creditor to determine
the liquidated amount of its claim against any Borrower; or (ii) seeking payment
from a source other than any of the Borrowers or any of their assets.
(o) any Borrower shall propose a Plan of Reorganization in any of the
Bankruptcy Cases which does not include a provision for termination of the
Commitments and indefeasible payment in full in cash of all Obligations of the
Borrowers hereunder and under the other Loan Documents (including the
cancellation and return of all Letters of Credit and Credit Support, delivery of
cash collateral with respect to such Letters of Credit and Credit Support or the
deposit with the Agent of a Supporting Letter of Credit, in either case in an
amount equal to the aggregate undrawn amount of such Letters of Credit and
Credit Support) on or before the effective date of such Plan of Reorganization;
(p) an order by the Bankruptcy Court shall be entered, or the Borrowers
shall file an application for an order, dismissing any of the Bankruptcy Cases
which does not require a provision for termination of the Commitments and
indefeasible payment in full in cash of all Obligations of the Borrowers
hereunder and under the other Loan Documents (including the cancellation and
return of all Letters of Credit and Credit Support, delivery of cash collateral
with respect to such Letters of Credit and Credit Support or the deposit with
the Agent of a Supporting Letter of Credit, in either case in an amount equal to
the aggregate undrawn amount of such Letters of Credit and Credit Support) prior
to any such dismissal;
(q) an order by the Bankruptcy Court shall be entered in or with
respect to any of the Bankruptcy Cases or any Borrower shall file an application
for an order with respect to any Bankruptcy Case, (i) to revoke, reverse, stay,
rescind, modify, vacate, supplement or amend the Interim Order or the Final
Order, (ii) to permit any administrative expense or any claim (now existing or
hereafter arising, of any kind or nature whatsoever) to have an administrative
priority as to any Borrower equal or superior to the priority of the claims of
the Agent and the Lenders in
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respect of the Obligations (other than the Carve-Out), or (iii) to grant or
permit the grant of a Lien on the property of any Borrower (other than Liens
permitted under Section 7.18);
(r) an application for any of the orders described in any or all of
clauses (m), (n), (o), (p) or (q) above shall be made by a Person other than a
Borrower and such application is not contested by the applicable Borrower in
good faith and the relief requested is granted in an order that is not vacated,
reversed, rescinded or stayed pending appeal; or
(s) (i) The Interim Order shall cease to be in full force and effect
and the Final Order shall not have been entered prior to such cessation, or (ii)
the Final Order shall not have been entered by the Bankruptcy Court on or before
the 45th day following the Petition Date, or (iii) from and after the date of
entry thereof, the Final Order shall cease to be in full force and effect, or
(iv) any Borrower shall fail to comply with the terms of the Interim Order or
the Final Order in any material respect, or (v) the Interim Order or the Final
Order shall be amended, supplemented, stayed, reversed, vacated or otherwise
modified (or any Borrower shall apply for authority to do so); or
(t) The Bankruptcy Court shall enter an order appointing a trustee in any of the
Cases or appointing a responsible officer or an examiner with powers beyond the
duty to investigate and report, as set forth in section 1106(a)(3) and (4) of
the Bankruptcy Code, in any of the Cases.
9.2 Remedies.
(a) If a Default or an Event of Default exists, the Agent may, in its
discretion, and shall, at the direction of the Majority Lenders, without further
order of or application to the Bankruptcy Court as permitted by the Interim
Order or the Final Order, do one or more of the following at any time or times
and in any order, without notice to or demand on any Borrower: (i) reduce the
Maximum Revolver Amount, or the advance rates against Eligible Accounts and/or
Eligible Inventory used in computing the Borrowing Base, or reduce one or more
of the other elements used in computing the Borrowing Base; (ii) restrict the
amount of or refuse to make Revolving Loans; and (iii) restrict or refuse to
provide Letters of Credit or Credit Support. If an Event of Default exists, the
Agent shall, at the direction of the Majority Lenders, do one or more of the
following, in addition to the actions described in the preceding sentence, at
any time or times and in any order, without notice to or demand on any Borrower:
(A) terminate the Commitments and this Agreement; (B) declare any or all
Obligations to be immediately due and payable; provided, however, that upon the
occurrence of any Event of Default described in Sections 9.1(m), (n), (o), (p),
(q), (s), or (t), the Commitments shall automatically and immediately expire and
all Obligations shall automatically become immediately due and payable without
notice or demand of any kind; (C) require the Borrowers to cash collateralize
all outstanding Letters of Credit; and (D) pursue its other rights and remedies
under the Loan Documents and applicable law.
(b) If an Event of Default has occurred and is continuing: (i) the
Agent shall have for the benefit of the Lenders, in addition to all other rights
of the Agent and the Lenders, the rights and remedies of a secured party under
the Loan Documents and the UCC; (ii) the Agent may, subject to any notice
requirements set forth in the Interim Order or the Final Order,
57
at any time, take possession of the Collateral and keep it on any Borrower's
premises, at no cost to the Agent or any Lender, or remove any part of it to
such other place or places as the Agent may desire, or the Borrowers shall, upon
the Agent's demand, at the Borrowers' cost, assemble the Collateral and make it
available to the Agent at a place reasonably convenient to the Agent; and (iii)
the Agent may sell and deliver any Collateral at public or private sales, for
cash, upon credit or otherwise, at such prices and upon such terms as the Agent
deems advisable, in its sole discretion, and may, if the Agent deems it
reasonable, postpone or adjourn any sale of the Collateral by an announcement at
the time and place of sale or of such postponed or adjourned sale without giving
a new notice of sale. Without in any way requiring notice to be given in the
following manner, the Borrowers agree that any notice by the Agent of sale,
disposition or other intended action hereunder or in connection herewith,
whether required by the UCC or otherwise, shall constitute reasonable notice to
the Borrowers if any such notice is mailed by registered or certified mail,
return receipt requested, postage prepaid, or is delivered personally against
receipt, at least five (5) Business Days prior to such action to the Borrower
Representative's address specified in or pursuant to Section 13.8. If any
Collateral is sold on terms other than payment in full at the time of sale, no
credit shall be given against the Obligations until the Agent or the Lenders
receive payment, and if the buyer defaults in payment, the Agent may resell the
Collateral without further notice to the Borrowers. In the event the Agent seeks
to take possession of all or any portion of the Collateral by judicial process,
the Borrowers irrevocably waive: (A) the posting of any bond, surety or security
with respect thereto which might otherwise be required; (B) any demand for
possession prior to the commencement of any suit or action to recover the
Collateral; and (C) any requirement that the Agent retain possession and not
dispose of any Collateral until after trial or final judgment. The Borrowers
agree that the Agent has no obligation to preserve rights to the Collateral or
marshal any Collateral for the benefit of any Person. The Agent is hereby
granted a license or other right to use, without charge, the Borrowers' labels,
patents, copyrights, name, trade secrets, trade names, trademarks, and
advertising matter, or any similar property, in completing production of,
advertising or selling any Collateral, and the Borrowers' rights under all
licenses and all franchise agreements shall inure to the Agent's benefit for
such purpose. The proceeds of sale shall be applied first to all expenses of
sale, including attorneys' fees, and then to the Obligations. The Agent will
return any excess to the Borrowers and the Borrowers shall remain liable for any
deficiency.
(c) If an Event of Default occurs, the Borrowers hereby waive all
rights to notice and hearing prior to the exercise by the Agent of the Agent's
rights to repossess the Collateral without judicial process or to reply, to
attach or levy upon the Collateral without notice or hearing.
(d) If an Event of Default has occurred and is continuing, subject only
to any notice requirements set forth in the Interim Order or the Final Order as
the case may be, all stays and injunctions, including the automatic stay
pursuant to Bankruptcy Code section 362, shall be vacated and terminated to the
extent necessary to permit the Agent and the Lenders full exercise of all of
their rights and remedies, including, without limitation, all of their rights
and remedies with respect to the Borrowers' property under all applicable
bankruptcy and non-bankruptcy law.
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ARTICLE 10
TERM AND TERMINATION
10.1 Term and Termination. The term of this Agreement shall end on the
Stated Termination Date unless sooner terminated in accordance with the terms
hereof. The Agent upon direction from the Majority Lenders may terminate this
Agreement without notice upon the occurrence of an Event of Default. Upon the
effective date of termination of this Agreement for any reason whatsoever, all
Obligations (including all unpaid principal, accrued and unpaid interest and any
early termination or prepayment fees or penalties, but excluding not yet
asserted indemnification obligations) shall become immediately due and payable
and the Borrowers shall immediately arrange for the cancellation and return of
Letters of Credit then outstanding (or the delivery of Supporting Letters of
Credit or Cash Collateral in accordance with Section 1.4(g). Notwithstanding the
termination of this Agreement, until all Obligations are indefeasibly paid and
performed in full in cash, each Borrower shall remain bound by the terms of this
Agreement and shall not be relieved of any of its Obligations hereunder or under
any other Loan Document, and the Agent and the Lenders shall retain all their
rights and remedies hereunder (including the Agent's Liens in and all rights and
remedies with respect to all then existing and after arising Collateral).
ARTICLE 11
AMENDMENTS; WAIVERs; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
11.1 Amendments and Waivers.
(a) No amendment or waiver of any provision of this Agreement or any
other Loan Document, and no consent with respect to any departure by any
Borrower therefrom, shall be effective unless the same shall be in writing and
signed by the Majority Lenders (or by the Agent at the written request of the
Majority Lenders) and each Borrower (or the Borrower Representative) and then
any such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no such
waiver, amendment, or consent shall, unless in writing and signed by all the
Lenders and each Borrower (or the Borrower Representative) and acknowledged by
the Agent, do any of the following:
(i) increase or extend the Commitment of any Lender;
(ii) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees or other amounts due
to the Lenders (or any of them) hereunder or under any other Loan Document;
(iii) reduce the principal of, or the rate of interest specified herein
on any Loan, or any fees or other amounts payable hereunder or under any other
Loan Document;
(iv) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Lenders or any of
them to take any action hereunder;
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(v) increase any of the percentages set forth in the definition of the
Borrowing Base;
(vi) amend this Section or any provision of this Agreement providing
for consent or other action by all Lenders;
(vii) release or subordinate Collateral other than as permitted by
Section 12.11;
(viii) change the definitions of "Majority Lenders" or "Required
Lenders"; or
(ix) increase the Maximum Revolver Amount and Letter of Credit
Subfacility;
provided, however, the Agent may, in its sole discretion and notwithstanding the
limitations contained in clauses (v) and (ix) above and any other terms of this
Agreement, make Agent Advances in accordance with Section 1.2(i) and, provided
further, that no amendment, waiver or consent shall, unless in writing and
signed by the Agent, affect the rights or duties of the Agent under this
Agreement or any other Loan Document and provided further, that Schedule 1.1
hereto (Commitments) may be amended from time to time by the Agent alone to
reflect assignments of Commitments in accordance herewith.
(b) If any fees are paid to the Lenders as consideration for
amendments, waivers or consents with respect to this Agreement, at Agent's
election, such fees may be paid only to those Lenders that agree to such
amendments, waivers or consents within the time specified for submission
thereof.
(c) If, in connection with any proposed amendment, waiver or consent (a
"Proposed Change"):
(i) requiring the consent of all Lenders, the consent of Required
Lenders is obtained, but the consent of other Lenders is not obtained (any such
Lender whose consent is not obtained as described in this clause (i) and in
clause (ii) below being referred to as a "Non-Consenting Lender"), or
(ii) requiring the consent of Required Lenders, the consent of Majority
Lenders is obtained,
then, so long as the Agent is not a Non-Consenting Lender, at the Borrower
Representative's request, the Agent or an Eligible Assignee shall have the right
(but not the obligation) with the Agent's approval, to purchase from the
Non-Consenting Lenders, and the Non-Consenting Lenders agree that they shall
sell, all the Non-Consenting Lenders' Commitments for an amount equal to the
principal balances thereof and all accrued interest and fees with respect
thereto through the date of sale pursuant to Assignment and Acceptance
Agreement(s), without premium or discount.
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11.2 Assignments; Participations.
(a) Any Lender may, with the written consent of the Agent (and with
respect to any assignment to be consummated after the first time at which the
Commitment of Bank of America, N.A. has been reduced to an amount less than or
equal to $50,000,000 and while no Default or Event of Default exists, with the
written consent of the Borrower Representative) (which consents shall not be
unreasonably withheld or delayed), assign and delegate to one or more Eligible
Assignees (provided that no consent of the Agent or the Borrower Representative
shall be required in connection with any assignment and delegation by a Lender
to an Affiliate of such Lender) (each an "Assignee") all, or any ratable part of
all, of the Loans, the Commitments and the other rights and obligations of such
Lender hereunder, in a minimum amount of $5,000,000 (provided that, unless an
assignor Lender has assigned and delegated all of its Loans and Commitments, no
such assignment and/or delegation shall be permitted unless, after giving effect
thereto, such assignor Lender retains a Commitment in a minimum amount of
$5,000,000; provided, however, that the Borrowers and the Agent may continue to
deal solely and directly with such Lender in connection with the interest so
assigned to an Assignee until (i) written notice of such assignment, together
with payment instructions, addresses and related information with respect to the
Assignee, shall have been given to the Borrower Representative and the Agent by
such Lender and the Assignee; (ii) such Lender and its Assignee shall have
delivered to the Borrower Representative and the Agent an Assignment and
Acceptance in the form of Exhibit H ("Assignment and Acceptance") duly executed
by such Lender and its Assignee, together with any note or notes subject to such
assignment, and such Assignment and Acceptance shall have been acknowledged by
the Agent; and (iii) the assignor Lender or Assignee has paid to the Agent a
processing fee in the amount of $3,500. The Borrowers agree to promptly execute
and deliver new promissory notes and replacement promissory notes as reasonably
requested by the Agent to evidence assignments of the Loans and Commitments in
accordance herewith.
(b) From and after the date that the Agent notifies the assignor Lender
that it has received an executed Assignment and Acceptance and payment of the
above-referenced processing fee, (i) the Assignee thereunder shall be a party
hereto and, to the extent that rights and obligations, including, but not
limited to, the obligation to participate in Letters of Credit and Credit
Support have been assigned to it pursuant to such Assignment and Acceptance,
shall have the rights and obligations of a Lender under the Loan Documents, and
(ii) the assignor Lender shall, to the extent that rights and obligations
hereunder and under the other Loan Documents have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto or the attachment,
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perfection, or priority of any Lien granted by a Borrower to the Agent or any
Lender in the Collateral; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Borrower or the performance or observance by any Borrower of any of its
obligations under this Agreement or any other Loan Document furnished pursuant
hereto; (iii) such Assignee confirms that it has received a copy of this
Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such Assignee will, independently and without
reliance upon the Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such Assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Agent by the terms hereof, together with such powers,
including the discretionary rights and incidental power, as are reasonably
incidental thereto; and (vi) such Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(d) Immediately upon satisfaction of the requirements of Section
11.2(a), this Agreement shall be deemed to be amended to the extent, but only to
the extent, necessary to reflect the addition of the Assignee and the resulting
adjustment of the Commitments arising therefrom. The Commitment allocated to
each Assignee shall reduce such Commitments of the assigning Lender pro tanto.
(e) Any Lender may at any time sell to one or more commercial banks,
other financial institutions, or other Persons not Affiliates of the Company (a
"Participant") participating interests in any Loans, the Commitment of that
Lender and the other interests of that Lender (the "originating Lender")
hereunder and under the other Loan Documents; provided, however, that (i) the
originating Lender's obligations under this Agreement shall remain unchanged,
(ii) the originating Lender shall remain solely responsible for the performance
of such obligations, (iii) the Borrowers and the Agent shall continue to deal
solely and directly with the originating Lender in connection with the
originating Lender's rights and obligations under this Agreement and the other
Loan Documents, and (iv) no Lender shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment to, or
any consent or waiver with respect to, this Agreement or any other Loan Document
except the matters set forth in Section 11.1(a) (i), (ii) and (iii), and all
amounts payable by the Borrowers hereunder shall be determined as if such Lender
had not sold such participation; except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of set-off in respect of its participating interest in amounts owing under
this Agreement to the same extent and subject to the same limitation as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement. Each Lender agrees that it will use good faith efforts to notify
the Borrower Representative of the identity of each Participant such Lender
sells an interest to pursuant to this Section 11.2(e).
(f) Notwithstanding any other provision in this Agreement, any Lender
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement in favor of any Federal Reserve
Bank in accordance with Regulation
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A of the FRB or U.S. Treasury Regulation 31 CFR ss.203.14, and such Federal
Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
ARTICLE 12
THE AGENT
12.1 Appointment and Authorization. Each Lender hereby designates and
appoints Bank as its Agent under this Agreement and the other Loan Documents and
each Lender hereby irrevocably authorizes the Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to it
by the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. The Agent agrees to act as such on
the express conditions contained in this Article 12. The provisions of this
Article 12 are solely for the benefit of the Agent and the Lenders and none of
the Borrowers shall have any rights as a third party beneficiary of any of the
provisions contained herein. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent. Without limiting the generality
of the foregoing sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties. Except as expressly otherwise provided in this Agreement,
the Agent shall have and may use its sole discretion with respect to exercising
or refraining from exercising any discretionary rights or taking or refraining
from taking any actions which the Agent is expressly entitled to take or assert
under this Agreement and the other Loan Documents, including (a) the
determination of the applicability of ineligibility criteria with respect to the
calculation of the Borrowing Base, (b) the making of Agent Advances pursuant to
Section 1.2(i), and (c) the exercise of remedies pursuant to Section 9.2, and
any action so taken or not taken shall be deemed consented to by the Lenders.
12.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
12.3 Liability of Agent. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by any Borrower or any Other
Subsidiary or Affiliate of any Borrower, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided
63
for in, or received by the Agent under or in connection with, this Agreement or
any other Loan Document, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or
for any failure of any Borrower or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Agent-Related Person shall
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Borrower or any Other Subsidiaries or Affiliates.
12.4 Reliance by Agent. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Borrowers), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Majority Lenders as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the Majority
Lenders (or all Lenders if so required by Section 11.1) and such request and any
action taken or failure to act pursuant thereto shall be binding upon all of the
Lenders.
12.5 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default, unless the Agent
shall have received written notice from a Lender or the Borrower Representative
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." The Agent will notify the
Lenders of its receipt of any such notice. The Agent shall take such action with
respect to such Default or Event of Default as may be requested by the Majority
Lenders in accordance with Section 9; provided, however, that unless and until
the Agent has received any such request, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable.
12.6 Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Borrowers and their Affiliates, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Borrowers and their Affiliates, and all applicable bank regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Borrowers. Each Lender also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue
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to make its own credit analysis, appraisals and decisions in taking or not
taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrowers. Except for notices, reports and other documents
expressly herein required to be furnished to the Lenders by the Agent, the Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of any Borrower which may come
into the possession of any of the Agent-Related Persons.
12.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrowers and without limiting the obligation of the Borrowers to do so), in
accordance with their Pro Rata Shares, from and against any and all Indemnified
Liabilities as such term is defined in Section 13.11; provided, however, that no
Lender shall be liable for the payment to the Agent-Related Persons of any
portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender shall reimburse the Agent upon demand for its Pro Rata Share of any
costs or out-of-pocket expenses (including Attorney Costs) incurred by the Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Borrowers. The undertaking
in this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of the Agent.
12.8 Agent in Individual Capacity. The Bank and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with any Borrower and its
Subsidiaries and Affiliates as though the Bank were not the Agent hereunder and
without notice to or consent of the Lenders. The Bank or its Affiliates may
receive information regarding any Borrower, its Affiliates and Account Debtors
(including information that may be subject to confidentiality obligations in
favor of such Borrower or such Subsidiary) and acknowledge that the Agent and
the Bank shall be under no obligation to provide such information to them. With
respect to its Loans, the Bank shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Agent, and the terms "Lender" and "Lenders" include the Bank in its
individual capacity.
12.9 Successor Agent. The Agent may resign as Agent upon at least 30
days' prior notice to the Lenders and the Borrower Representative, such
resignation to be effective upon the acceptance of a successor agent to its
appointment as Agent. In the event the Bank sells all of its Commitment and
Revolving Loans as part of a sale, transfer or other disposition by the Bank of
substantially all of its loan portfolio, the Bank shall resign as Agent and such
purchaser or transferee shall become the successor Agent hereunder. Subject to
the foregoing, if the Agent resigns under this Agreement, the Majority Lenders
shall appoint from among the Lenders a successor agent for the Lenders. If no
successor agent is appointed prior to the effective date of
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the resignation of the Agent, the Agent may appoint, after consulting with the
Lenders and the Borrower Representative, a successor agent from among the
Lenders. Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent and the
retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article 12 shall continue to inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
12.10 Withholding Tax.
(a) If any Lender is a "foreign corporation, partnership or trust" within
the meaning of the Code and such Lender claims exemption from, or a reduction
of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such Lender
agrees with and in favor of the Agent, to deliver to the Agent:
(i) if such Lender claims an exemption from, or a reduction of, withholding
tax under a United States of America tax treaty, properly completed IRS Forms
W-8BEN and W-8ECI before the payment of any interest in the first calendar year
and before the payment of any interest in each third succeeding calendar year
during which interest may be paid under this Agreement;
(ii) if such Lender claims that interest paid under this Agreement is
exempt from United States of America withholding tax because it is effectively
connected with a United States of America trade or business of such Lender, two
properly completed and executed copies of IRS Form W-8ECI before the payment of
any interest is due in the first taxable year of such Lender and in each
succeeding taxable year of such Lender during which interest may be paid under
this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the Code or other
laws of the United States of America as a condition to exemption from, or
reduction of, United States of America withholding tax.
Such Lender agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Lender claims exemption from, or reduction of, withholding tax
under a United States of America tax treaty by providing IRS Form W-8BEN and
such Lender sells, assigns, grants a participation in, or otherwise transfers
all or part of the Obligations owing to such Lender, such Lender agrees to
notify the Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Borrowers to such Lender. To the extent
of such percentage amount, the Agent will treat such Lender's IRS Form W-8BEN as
no longer valid.
(c) If any Lender claiming exemption from United States of America
withholding tax by filing IRS Form W-8ECI with the Agent sells, assigns, grants
a participation in, or otherwise transfers all or part of the Obligations owing
to such Lender, such Lender agrees
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to undertake sole responsibility for complying with the withholding tax
requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable withholding
tax, the Agent may withhold from any interest payment to such Lender an amount
equivalent to the applicable withholding tax after taking into account such
reduction. If the forms or other documentation required by subsection (a) of
this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United States of
America or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify the Agent of a change in circumstances which rendered
the exemption from, or reduction of, withholding tax ineffective, or for any
other reason) such Lender shall indemnify the Agent fully for all amounts paid,
directly or indirectly, by the Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Agent under this Section, together with all costs and expenses
(including Attorney Costs). The obligation of the Lenders under this subsection
shall survive the payment of all Obligations and the resignation or replacement
of the Agent.
12.11 Collateral Matters.
(a) The Lenders hereby irrevocably authorize the Agent, at its option and
in its sole discretion, to release or subordinate any Agent's Liens upon any
Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full by the Borrowers of all Loans and reimbursement obligations
in respect of Letters of Credit and Credit Support, and the termination of all
outstanding Letters of Credit (whether or not any of such obligations are due)
and all other Obligations; (ii) constituting property being sold or disposed of
if the Borrower Representative certifies to the Agent that the sale or
disposition is made in compliance with Section 7.9 (and the Agent may rely
conclusively on any such certificate, without further inquiry); (iii)
constituting property in which the Borrowers owned no interest at the time the
Lien was granted or at any time thereafter; or (iv) constituting property leased
to any Borrower under a lease which has expired or been terminated in a
transaction permitted under this Agreement. Except as provided above, the Agent
will not release any of the Agent's Liens without the prior written
authorization of the Required Lenders; provided that the Agent may, in its
discretion, release or subordinate the Agent's Liens on Collateral valued in the
aggregate not in excess of $5,000,000 during each Fiscal Year without the prior
written authorization of the Lenders and the Agent may release the Agent's Liens
on Collateral valued in the aggregate not in excess of $15,000,000 during each
Fiscal Year with the prior written authorization of Required Lenders. Upon
request by the Agent or the Borrower Representative at any time, the Lenders
will confirm in writing the Agent's authority to release any Agent's Liens upon
particular types or items of Collateral pursuant to this Section 12.11.
(b) Upon receipt by the Agent of any authorization required pursuant to
Section 12.11(a) from the Required Lenders of the Agent's authority to release
Agent's Liens
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upon particular types or items of Collateral, and upon at least five (5)
Business Days prior written request by the Borrower Representative, the Agent
shall (and is hereby irrevocably authorized by the Lenders to) execute such
documents as may be necessary to evidence the release of the Agent's Liens upon
such Collateral; provided, however, that (i) the Agent shall not be required to
execute any such document on terms which, in the Agent's opinion, would expose
the Agent to liability or create any obligation or entail any consequence other
than the release of such Liens without recourse or warranty, and (ii) such
release shall not in any manner discharge, affect or impair the Obligations or
any Liens (other than those expressly being released) upon (or obligations of
the Borrowers in respect of) all interests retained by the Borrowers, including
the proceeds of any sale, all of which shall continue to constitute part of the
Collateral.
(c) The Agent shall have no obligation whatsoever to any of the Lenders
to assure that the Collateral exists or is owned by the Borrowers or is cared
for, protected or insured or has been encumbered, or that the Agent's Liens have
been properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to the Agent pursuant to any of the Loan Documents, it being
understood and agreed that in respect of the Collateral, or any act, omission or
event related thereto, the Agent may act in any manner it may deem appropriate,
in its sole discretion given the Agent's own interest in the Collateral in its
capacity as one of the Lenders and that the Agent shall have no other duty or
liability whatsoever to any Lender as to any of the foregoing.
12.12 Restrictions on Actions by Lenders; Sharing of Payments.
(a) Each of the Lenders agrees that it shall not, without the express
consent of all Lenders, and that it shall, to the extent it is lawfully entitled
to do so, upon the request of all Lenders, set off against the Obligations, any
amounts owing by such Lender to any Borrower or any accounts of any Borrower now
or hereafter maintained with such Lender. Each of the Lenders further agrees
that it shall not, unless specifically requested to do so by the Agent, take or
cause to be taken any action to enforce its rights under this Agreement or
against any Borrower, including the commencement of any legal or equitable
proceedings, to foreclose any Lien on, or otherwise enforce any security
interest in, any of the Collateral.
(b) If at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations of any Borrower to such Lender arising under, or
relating to, this Agreement or the other Loan Documents, except for any such
proceeds or payments received by such Lender from the Agent pursuant to the
terms of this Agreement, or (ii) payments from the Agent in excess of such
Lender's ratable portion of all such distributions by the Agent, such Lender
shall promptly (1) turn the same over to the Agent, in kind, and with such
endorsements as may be required to negotiate the same to the Agent, or in same
day funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable provisions of
this Agreement, or (2) purchase, without recourse or warranty, an undivided
interest and participation in the Obligations owed to the other Lenders so that
such excess payment received shall be applied ratably as among the Lenders in
accordance with their Pro Rata Shares; provided, however, that if all or part of
such excess payment received by the purchasing party is
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thereafter recovered from it, those purchases of participations shall be
rescinded in whole or in part, as applicable, and the applicable portion of the
purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.
12.13 Agency for Perfection. Each Lender hereby appoints each other Lender
as agent for the purpose of perfecting the Lenders' security interest in assets
which, in accordance with Article 9 of the UCC can be perfected only by
possession. Should any Lender (other than the Agent) obtain possession of any
such Collateral, such Lender shall notify the Agent thereof, and, promptly upon
the Agent's request therefor shall deliver such Collateral to the Agent or in
accordance with the Agent's instructions.
12.14 Payments by Agent to Lenders. All payments to be made by the Agent to
the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds to each Lender pursuant to wire transfer
instructions delivered in writing to the Agent on or prior to the Closing Date
(or if such Lender is an Assignee, on the applicable Assignment and Acceptance),
or pursuant to such other wire transfer instructions as each party may designate
for itself by written notice to the Agent. Concurrently with each such payment,
the Agent shall identify whether such payment (or any portion thereof)
represents principal, premium or interest on the Revolving Loans or other
amounts payable hereunder. Unless the Agent receives notice from the Borrower
Representative prior to the date on which any payment is due to the Lenders that
the Borrowers will not make such payment in full as and when required, the Agent
may assume that the Borrowers have made such payment in full to the Agent on
such date in immediately available funds and the Agent may (but shall not be so
required), in reliance upon such assumption, distribute to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent the Borrowers have not made such payment in full to the Agent, each
Lender shall repay to the Agent on demand such amount distributed to such
Lender, together with interest thereon at the Federal Funds Rate for each day
from the date such amount is distributed to such Lender until the date repaid.
12.15 Settlement.
(a) (i) Each Lender's funded portion of the Revolving Loans is intended
by the Lenders to be equal at all times to such Lender's Pro Rata Share of the
outstanding Revolving Loans. Notwithstanding such agreement, the Agent, the
Bank, and the other Lenders agree (which agreement shall not be for the benefit
of or enforceable by any Borrower) that in order to facilitate the
administration of this Agreement and the other Loan Documents, settlement among
them as to the Revolving Loans, the Non-Ratable Loans and the Agent Advances
shall take place on a periodic basis in accordance with the following
provisions:
(ii) The Agent shall request settlement ("Settlement") with the Lenders
on at least a weekly basis, or on a more frequent basis at Agent's election, (A)
on behalf of the Bank, with respect to each outstanding Non-Ratable Loan, (B)
for itself, with respect to each Agent Advance, and (C) with respect to
collections received, in each case, by notifying the Lenders of such requested
Settlement by telecopy, telephone or other similar form of transmission, of such
requested Settlement, no later than 12:00 noon (New York time) on the date of
such requested Settlement (the "Settlement Date"). Each Lender (other than the
Bank, in
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the case of Non-Ratable Loans) shall transfer the amount of such Lender's Pro
Rata Share of the outstanding principal amount of the Non-Ratable Loans and
Agent Advances with respect to each Settlement to the Agent, to Agent's account,
not later than 2:00 p.m. (New York time), on the Settlement Date applicable
thereto. Settlements may occur during the continuation of a Default or an Event
of Default and whether or not the applicable conditions precedent set forth in
Article 8 have then been satisfied. Such amounts made available to the Agent
shall be applied against the amounts of the applicable Non-Ratable Loan or Agent
Advance and, together with the portion of such Non-Ratable Loan or Agent Advance
representing the Bank's Pro Rata Share thereof, shall constitute Revolving Loans
of such Lenders. If any such amount is not transferred to the Agent by any
Lender on the Settlement Date applicable thereto, the Agent shall be entitled to
recover such amount on demand from such Lender together with interest thereon at
the Federal Funds Rate for the first three (3) days from and after the
Settlement Date and thereafter at the Interest Rate then applicable to the
Revolving Loans (A) on behalf of the Bank, with respect to each outstanding
Non-Ratable Loan, and (B) for itself, with respect to each Agent Advance.
(iii) Notwithstanding the foregoing, not more than one (1) Business Day
after demand is made by the Agent (whether before or after the occurrence of a
Default or an Event of Default and regardless of whether the Agent has requested
a Settlement with respect to a Non-Ratable Loan or Agent Advance), each other
Lender (A) shall irrevocably and unconditionally purchase and receive from the
Bank or the Agent, as applicable, without recourse or warranty, an undivided
interest and participation in such Non-Ratable Loan or Agent Advance equal to
such Lender's Pro Rata Share of such Non-Ratable Loan and (B) if Settlement has
not previously occurred with respect to such Non-Ratable Loans, upon demand by
Bank or Agent, as applicable, shall pay to Bank or Agent, as applicable, as the
purchase price of such participation an amount equal to one hundred percent
(100%) of such Lender's Pro Rata Share of such Non-Ratable Loans or Agent
Advances. If such amount is not in fact made available to the Agent by any
Lender, the Agent shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Federal Funds Rate for the first
three (3) days from and after such demand and thereafter at the Interest Rate
then applicable to Base Rate Revolving Loans.
(iv) From and after the date, if any, on which any Lender purchases an
undivided interest and participation in any Non-Ratable Loan or Agent Advance
pursuant to clause (iii) above, the Agent shall promptly distribute to such
Lender, such Lender's Pro Rata Share of all payments of principal and interest
and all proceeds received by the Agent in respect of such Non-Ratable Loan or
Agent Advance.
(v) Between Settlement Dates, the Agent, to the extent no Agent
Advances are outstanding may pay over to the Bank any payments received by the
Agent, which in accordance with the terms of this Agreement would be applied to
the reduction of the Revolving Loans, for application to the Bank's Revolving
Loans including Non-Ratable Loans. If, as of any Settlement Date, collections
received since the then immediately preceding Settlement Date have been applied
to the Bank's Revolving Loans (other than to Non-Ratable Loans or Agent Advances
in which such Lender has not yet funded its purchase of a participation pursuant
to clause (iii) above), as provided for in the previous sentence, the Bank shall
pay to the Agent for the accounts of the Lenders, to be applied to the
outstanding Revolving Loans of such
70
Lenders, an amount such that each Lender shall, upon receipt of such amount,
have, as of such Settlement Date, its Pro Rata Share of the Revolving Loans.
During the period between Settlement Dates, the Bank with respect to Non-Ratable
Loans, the Agent with respect to Agent Advance, and each Lender with respect to
the Revolving Loans other than Non-Ratable Loans and Agent Advances, shall be
entitled to interest at the applicable rate or rates payable under this
Agreement on the actual average daily amount of funds employed by the Bank, the
Agent and the other Lenders.
(i) Unless the Agent has received written notice from a Lender to the
contrary, the Agent may assume that the applicable conditions precedent set
forth in Article 8 have been satisfied and the requested Borrowing will not
exceed Availability on the Funding Date for a Revolving Loan or Non-Ratable
Lien,
(b) Lenders' Failure to Perform. All Revolving Loans (other than
Non-Ratable Loans and Agent Advances) shall be made by the Lenders
simultaneously and in accordance with their Pro Rata Shares. It is understood
that (i) no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Revolving Loans hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligation to make any Revolving Loans
hereunder, (ii) no failure by any Lender to perform its obligation to make any
Revolving Loans hereunder shall excuse any other Lender from its obligation to
make any Revolving Loans hereunder, and (iii) the obligations of each Lender
hereunder shall be several, not joint and several.
(c) Defaulting Lenders. Unless the Agent receives notice from a Lender
on or prior to the Closing Date or, with respect to any Borrowing after the
Closing Date, at least one Business Day prior to the date of such Borrowing,
that such Lender will not make available as and when required hereunder to the
Agent that Lender's Pro Rata Share of a Borrowing, the Agent may assume that
each Lender has made such amount available to the Agent in immediately available
funds on the Funding Date. Furthermore, the Agent may, in reliance upon such
assumption, make available to the Borrowers on such date a corresponding amount.
If any Lender has not transferred its full Pro Rata Share to the Agent in
immediately available funds and the Agent has transferred corresponding amount
to the Borrowers, on the Business Day following such Funding Date that Lender
shall make such amount available to the Agent, together with interest at the
Federal Funds Rate for that day. A notice by the Agent submitted to any Lender
with respect to amounts owing shall be conclusive, absent manifest error. If
each Lender's full Pro Rata Share is transferred to the Agent as required, the
amount transferred to the Agent shall constitute that Lender's Revolving Loan
for all purposes of this Agreement. If that amount is not transferred to the
Agent on the Business Day following the Funding Date, the Agent will notify the
Borrower Representative of such failure to fund and, upon demand by the Agent,
the Borrowers shall pay such amount to the Agent for the Agent's account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the Interest Rate applicable at the time
to the Revolving Loans comprising that particular Borrowing. The failure of any
Lender to make any Revolving Loan on any Funding Date (any such Lender, prior to
the cure of such failure, being hereinafter referred to as a "Defaulting
Lender") shall not relieve any other Lender of its obligation hereunder to make
a Revolving Loan on that Funding Date. No Lender shall be responsible for any
other Lender's failure to advance such other Lenders' Pro Rata Share of any
Borrowing.
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(d) Retention of Defaulting Lender's Payments. The Agent shall not be
obligated to transfer to a Defaulting Lender any payments made by the Borrowers
to the Agent for the Defaulting Lender's benefit; nor shall a Defaulting Lender
be entitled to the sharing of any payments hereunder. Amounts payable to a
Defaulting Lender shall instead be paid to or retained by the Agent. In its
discretion, the Agent may loan the Borrowers the amount of all such payments
received or retained by it for the account of such Defaulting Lender. Any
amounts so loaned to the Borrowers shall bear interest at the rate applicable to
Base Rate Revolving Loans and for all other purposes of this Agreement shall be
treated as if they were Revolving Loans, provided, however, that for purposes of
voting or consenting to matters with respect to the Loan Documents and
determining Pro Rata Shares, such Defaulting Lender shall be deemed not to be a
"Lender". Until a Defaulting Lender cures its failure to fund its Pro Rata Share
of any Borrowing (A) such Defaulting Lender shall not be entitled to any portion
of the Unused Line Fee and (B) the Unused Line Fee shall accrue in favor of the
Lenders which have funded their respective Pro Rata Shares of such requested
Borrowing and shall be allocated among such performing Lenders ratably based
upon their relative Commitments. This Section shall remain effective with
respect to such Lender until such time as the Defaulting Lender shall no longer
be in default of any of its obligations under this Agreement. The terms of this
Section shall not be construed to increase or otherwise affect the Commitment of
any Lender, or relieve or excuse the performance by the Borrowers of their
duties and obligations hereunder.
(e) Removal of Defaulting Lender. At the Borrower Representative's
request, the Agent or an Eligible Assignee reasonably acceptable to the Agent
and the Borrower Representative shall have the right (but not the obligation) to
purchase from any Defaulting Lender, and each Defaulting Lender shall, upon such
request, sell and assign to the Agent or such Eligible Assignee, all of the
Defaulting Lender's outstanding Commitments hereunder. Such sale shall be
consummated promptly after the Agent has arranged for a purchase by the Agent or
an Eligible Assignee pursuant to an Assignment and Acceptance, and at a price
equal to the outstanding principal balance of the Defaulting Lender's Loans,
plus accrued and unpaid interest and fees, without premium or discount.
12.16 Letters of Credit; Intra-Lender Issues.
(a) Notice of Letter of Credit Balance. On each Settlement Date the Agent
shall notify each Lender of the issuance of all Letters of Credit since the
prior Settlement Date.
(b) Participations in Letters of Credit.
(i) Purchase of Participations. Immediately upon issuance of any Letter
of Credit in accordance with Section 1.4(d), each Lender shall be deemed to have
irrevocably and unconditionally purchased and received without recourse or
warranty, an undivided interest and participation equal to such Lender's Pro
Rata Share of the face amount of such Letter of Credit or the Credit Support
provided through the Agent to the Letter of Credit Issuer, if not the Bank, in
connection with the issuance of such Letter of Credit (including all obligations
of the Borrowers with respect thereto, and any security therefor or guaranty
pertaining thereto).
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(ii) Sharing of Reimbursement Obligation Payments. Whenever the Agent
receives a payment from the Borrowers on account of reimbursement obligations in
respect of a Letter of Credit or Credit Support as to which the Agent has
previously received for the account of the Letter of Credit Issuer thereof
payment from a Lender, the Agent shall promptly pay to such Lender such Lender's
Pro Rata Share of such payment from the Borrowers. Each such payment shall be
made by the Agent on the next Settlement Date.
(iii) Documentation. Upon the request of any Lender, the Agent shall
furnish to such Lender copies of any Letter of Credit, Credit Support for any
Letter of Credit, reimbursement agreements executed in connection therewith,
applications for any Letter of Credit, and such other documentation as may
reasonably be requested by such Lender.
(iv) Obligations Irrevocable. The obligations of each Lender to make
payments to the Agent with respect to any Letter of Credit or with respect to
their participation therein or with respect to any Credit Support for any Letter
of Credit or with respect to the Revolving Loans made as a result of a drawing
under a Letter of Credit and the joint and several obligations of the Borrowers
to make payments to the Agent, for the account of the Lenders, shall be
irrevocable and shall not be subject to any qualification or exception
whatsoever , including any of the following circumstances:
(1) any lack of validity or enforceability of this Agreement or any
of the other Loan Documents;
(2) the existence of any claim, setoff, defense or other right which
any Borrower may have at any time against a beneficiary named in a Letter of
Credit or any transferee of any Letter of Credit (or any Person for whom any
such transferee may be acting), any Lender, the Agent, the issuer of such Letter
of Credit, or any other Person, whether in connection with this Agreement, any
Letter of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transactions between any Borrower or any
other Person and the beneficiary named in any Letter of Credit);
(3) any draft, certificate or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
(4) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Loan Documents;
(5) the occurrence of any Default or Event of Default; or
(6) the failure of the Borrowers to satisfy the applicable
conditions precedent set forth in Article 8. ---------
(c) Recovery or Avoidance of Payments; Refund of Payments In Error. In
the event any payment by or on behalf of any Borrower received by the Agent with
respect to any Letter of Credit or Credit Support provided for any Letter of
Credit and distributed by the Agent to the Lenders on account of their
respective participations therein is thereafter set aside, avoided or recovered
from the Agent in connection with any receivership, liquidation or bankruptcy
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proceeding, the Lenders shall, upon demand by the Agent, pay to the Agent their
respective Pro Rata Shares of such amount set aside, avoided or recovered,
together with interest at the rate required to be paid by the Agent upon the
amount required to be repaid by it. Unless the Agent receives notice from the
Borrower Representative prior to the date on which any payment is due to the
Lenders that the Borrowers will not make such payment in full as and when
required, the Agent may assume that the Borrowers have made such payment in full
to the Agent on such date in immediately available funds and the Agent may (but
shall not be so required), in reliance upon such assumption, distribute to each
Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent the Borrowers have not made such payment in full to the Agent,
each Lender shall repay to the Agent on demand such amount distributed to such
Lender, together with interest thereon at the Federal Funds Rate for each day
from the date such amount is distributed to such Lender until the date repaid.
(d) Indemnification by Lenders. To the extent not reimbursed by the
Borrowers and without limiting the obligations of the Borrowers hereunder, the
Lenders agree to indemnify the Letter of Credit Issuer ratably in accordance
with their respective Pro Rata Shares, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including attorneys' fees) or disbursements of any kind and nature whatsoever
that may be imposed on, incurred by or asserted against the Letter of Credit
Issuer in any way relating to or arising out of any Letter of Credit or the
transactions contemplated thereby or any action taken or omitted by the Letter
of Credit Issuer under any Letter of Credit or any Loan Document in connection
therewith; provided that no Lender shall be liable for any of the foregoing to
the extent it arises from the gross negligence or willful misconduct of the
Person to be indemnified. Without limitation of the foregoing, each Lender
agrees to reimburse the Letter of Credit Issuer promptly upon demand for its Pro
Rata Share of any costs or expenses payable by the Borrowers to the Letter of
Credit Issuer, to the extent that the Letter of Credit Issuer is not promptly
reimbursed for such costs and expenses by the Borrowers. The agreement contained
in this Section shall survive payment in full of all other Obligations.
12.17 Concerning the Collateral and the Related Loan Documents. Each Lender
authorizes and directs the Agent to enter into the other Loan Documents, for the
ratable benefit and obligation of the Agent and the Lenders. Each Lender agrees
that any action taken by the Agent, the Majority Lenders or the Required
Lenders, as applicable, in accordance with the terms of this Agreement or the
other Loan Documents, and the exercise by the Agent, the Majority Lenders or the
Required Lenders, as applicable, of their respective powers set forth therein or
herein, together with such other powers that are reasonably incidental thereto,
shall be binding upon all of the Lenders. The Lenders acknowledge that the
Revolving Loans, Agent Advances, Non Ratable Loans, Hedge Agreements, the Bank
Products and all interest, fees and expenses hereunder constitute one Debt,
secured pari passu by all of the Collateral.
12.18 Field Audit and Examination Reports; Disclaimer by Lenders. By
signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish such Lender,
promptly after it becomes available, a copy of each field audit or examination
report (each a "Report" and collectively, "Reports") prepared by on behalf of
the Agent;
74
(b) expressly agrees and acknowledges that neither the Bank nor the
Agent (i) makes any representation or warranty as to the accuracy of any Report,
or (ii) shall be liable for any information contained in any Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agent or the Bank or other party
performing any audit or examination will inspect only specific information
regarding the Borrowers and will rely significantly upon the Borrowers' books
and records, as well as on representations of the Borrower's personnel;
(d) agrees to keep all Reports confidential and strictly for its
internal use, and not to distribute except, to its participants, or use any
Report in any other manner; and
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold the Agent and any
such other Lender preparing a Report harmless from any action the indemnifying
Lender may take or conclusion the indemnifying Lender may reach or draw from any
Report in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to the Borrowers, or the indemnifying
Lender's participation in, or the indemnifying Lender's purchase of, a loan or
loans of the Borrowers; and (ii) to pay and protect, and indemnify, defend and
hold the Agent and any such other Lender preparing a Report harmless from and
against, the claims, actions, proceedings, damages, costs, expenses and other
amounts (including Attorney Costs) incurred by the Agent and any such other
Lender preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying Lender.
12.19 Relation Among Lenders. The Lenders are not partners or co-venturers,
and no Lender shall be liable for the acts or omissions of, or (except as
otherwise set forth herein in case of the Agent) authorized to act for, any
other Lender.
ARTICLE 13
MISCELLANEOUS
13.1 No Waivers; Cumulative Remedies. No failure by the Agent or any Lender
to exercise any right, remedy, or option under this Agreement or any present or
future supplement thereto, or in any other agreement between or among the
Borrowers and the Agent and/or any Lender, or delay by the Agent or any Lender
in exercising the same, will operate as a waiver thereof. No waiver by the Agent
or any Lender will be effective unless it is in writing, and then only to the
extent specifically stated. No waiver by the Agent or the Lenders on any
occasion shall affect or diminish the Agent's and each Lender's rights
thereafter to require strict performance by the Borrowers of any provision of
this Agreement. The Agent and the Lenders may proceed directly to collect the
Obligations without any prior recourse to the Collateral. The Agent's and each
Lender's rights under this Agreement will be cumulative and not exclusive of any
other right or remedy which the Agent or any Lender may have.
13.2 Severability. The illegality or unenforceability of any provision of
this Agreement or any Loan Document or any instrument or agreement required
hereunder shall not
75
in any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
13.3 Governing Law; Choice of Forum; Service of Process.
(a) IN THE EVENT OF A CONFLICT BETWEEN THE TERMS OF THIS AGREEMENT AND
THE FINAL ORDER OR INTERIM ORDER, AS APPLICABLE, THE FINAL ORDER OR INTERIM
ORDER, AS APPLICABLE, SHALL CONTROL. THIS AGREEMENT SHALL BE INTERPRETED AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE
INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF LAWS PROVISIONS PROVIDED THAT
PERFECTION ISSUES WITH RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO
APPLICABLE CHOICE OR CONFLICT OF LAW RULES SET FORTH IN ARTICLE 9 OF THE UCC) OF
THE STATE OF NEW YORK TO THE EXTENT NOT PREEMPTED BY FEDERAL BANKRUPTCY LAWS;
PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE BANKRUPTCY COURT (OR, IF A
BANKRUPTCY CASE IS DISMISSED, OR WITH RESPECT TO ANY BORROWER WHICH IS NO LONGER
SUBJECT TO THE JURISDICTION OF THE BANKRUPTCY COURT, IN THE FEDERAL, DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH OF THE BORROWERS, THE AGENT AND THE LENDERS CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE JURISDICTION OF SUCH COURTS. EACH
OF THE BORROWERS, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO.
(c) EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY FACSIMILE
OR BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWER
REPRESENTATIVE AT ITS ADDRESS SET FORTH IN SECTION 13.8 AND SERVICE SO MADE
SHALL BE DEEMED TO BE COMPLETED UPON THE EARLIER OF RECEIPT OR FIVE (5) DAYS
AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S. MAILS POSTAGE PREPAID.
NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR THE LENDERS TO
SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.
13.4 WAIVER OF JURY TRIAL. THE BORROWERS, THE LENDERS AND THE AGENT EACH
IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR THE
76
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWERS, THE LENDERS AND THE
AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER
AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN
WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
13.5 Survival of Representations and Warranties. All of the Borrowers'
representations and warranties contained in this Agreement shall survive the
execution, delivery, and acceptance thereof by the parties, notwithstanding any
investigation by the Agent or the Lenders or their respective agents.
13.6 Other Security and Guaranties. The Agent, may, without notice or
demand and without affecting the Borrowers' obligations hereunder, from time to
time: (a) take from any Person and hold collateral (other than the Collateral)
for the payment of all or any part of the Obligations and exchange, enforce or
release such collateral or any part thereof; and (b) accept and hold any
endorsement or guaranty of payment of all or any part of the Obligations and
release or substitute any such endorser or guarantor, or any Person who has
given any Lien in any other collateral as security for the payment of all or any
part of the Obligations, or any other Person in any way obligated to pay all or
any part of the Obligations
13.7 Fees and Expenses. The Borrowers, jointly and severally, agree to pay
to the Agent, for its benefit, on demand, all costs and expenses that Agent pays
or incurs in connection with the negotiation, preparation, syndication,
consummation, administration, enforcement, and termination of this Agreement or
any of the other Loan Documents, including: (a) Attorney Costs; (b) costs and
expenses (including attorneys' and paralegals' fees and disbursements) for any
amendment, supplement, waiver, consent, or subsequent closing in connection with
the Loan Documents and the transactions contemplated thereby; (c) costs and
expenses of lien and title searches and title insurance; (d) taxes, fees and
other charges for recording the Mortgages, filing financing statements and
continuations, and other actions to perfect, protect, and continue the Agent's
Liens (including costs and expenses paid or incurred by the Agent in connection
with the consummation of Agreement); (e) sums paid or incurred to pay any amount
or take any action required of the Borrowers under the Loan Documents that any
Borrower fails to pay or take; (f) costs of inspections, and verifications of
the Collateral, including travel, lodging, and meals for inspections of the
Collateral and the Borrowers' operations by the Agent plus the Agent's then
customary charge for field examinations and audits and the preparation of
reports thereof (such charge is currently $750 per day (or portion thereof) for
each Person retained or employed by the Agent with respect to each field
examination or audit); (g) costs and out-of-
77
pocket expenses of forwarding loan proceeds, collecting checks and other items
of payment and costs and expenses of preserving and protecting the Collateral.
In addition, the Borrowers agree to pay costs and expenses incurred by the Agent
(including Attorneys' Costs) to the Agent, for its benefit, on demand, and to
the other Lenders for their benefit, on demand, and all reasonable fees,
expenses and disbursements incurred by such other Lenders for one law firm
retained by such other Lenders, in each case Attorneys' Costs) paid or incurred
to obtain payment of the Obligations, enforce the Agent's Liens, sell or
otherwise realize upon the Collateral, and otherwise enforce the provisions of
the Loan Documents, or to defend any claims made or threatened against the Agent
or any Lender arising out of the transactions contemplated hereby (including
preparations for and consultations concerning any such matters). The foregoing
shall not be construed to limit any other provisions of the Loan Documents
regarding costs and expenses to be paid by the Borrowers. All of the foregoing
costs and expenses shall be charged to the Borrower's Loan Account as Revolving
Loans as described in Section 3.5.
13.8 Notices. Except as otherwise provided herein, all notices, demands and
requests that any party is required or elects to give to any other shall be in
writing, or by a telecommunications device capable of creating a written record,
and any such notice shall become effective (a) upon personal delivery thereof,
including, but not limited to, delivery by overnight mail and courier service,
(b) four (4) days after it shall have been mailed by United States mail, first
class, certified or registered, with postage prepaid, or (c) in the case of
notice by such a telecommunications device, when properly transmitted, in each
case addressed to the party to be notified as follows:
If to the Agent or to the Bank:
Bank of America, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
and ▇▇ ▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
78
If to any Borrower, to the Borrower Representative:
▇. ▇. ▇▇▇▇▇ & Co.-▇▇▇▇.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as each party may designate for itself by like notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the persons designated above to
receive copies shall not adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.
13.9 Waiver of Notices. Unless otherwise expressly provided herein, the
Borrowers waive presentment, and notice of demand or dishonor and protest as to
any instrument, notice of intent to accelerate the Obligations and notice of
acceleration of the Obligations, as well as any and all other notices to which
any Borrower might otherwise be entitled. No notice to or demand on the
Borrowers which the Agent or any Lender may elect to give shall entitle the
Borrowers to any or further notice or demand in the same, similar or other
circumstances.
13.10 Binding Effect. The provisions of this Agreement shall be binding
upon and inure to the benefit of the respective representatives, successors, and
permitted assigns of the parties hereto; provided, however, that no interest
herein may be assigned by any Borrower without prior written consent of the
Agent and each Lender. The rights and benefits of the Agent and the Lenders
hereunder shall, if such Persons so agree, inure to any party acquiring any
interest in the Obligations or any part thereof.
13.11 Indemnity of the Agent and the Lenders by the Borrowers.
(a) The Borrowers, jointly and severally, agree to defend, indemnify
and hold the Agent-Related Persons, and each Lender and each of its respective
officers, directors, employees, counsel, representatives, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including Attorney
Costs) of any kind or nature whatsoever which may at any time (including at any
time following repayment of the Loans and the termination, resignation or
replacement of the Agent or replacement of any Lender) be imposed on, incurred
by or asserted against any such Person in
79
any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein, or the transactions contemplated hereby,
or any action taken or omitted by any such Person under or in connection with
any of the foregoing, including with respect to any investigation, litigation or
proceeding (including any insolvency proceeding or appellate proceeding) related
to or arising out of this Agreement, any other Loan Document, or the Loans or
the use of the proceeds thereof, whether or not any Indemnified Person is a
party thereto (all the foregoing, collectively, the "Indemnified Liabilities");
provided, that no Borrower shall have any obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities resulting solely from
the gross negligence or willful misconduct of such Indemnified Person. The
agreements in this Section shall survive payment of all other Obligations.
(b) The Borrowers, jointly and severally, agree to indemnify, defend
and hold harmless the Agent and the Lenders from any loss or liability imposed
upon or incurred by any such Person directly or indirectly arising out of the
use, generation, manufacture, production, storage, release, threatened release,
discharge, disposal or presence of a hazardous substance relating to any
Borrower's operations, business or property. This indemnity will apply whether
the hazardous substance is on, under or about any Borrower's property or
operations or property leased to any Borrower. The indemnity includes but is not
limited to Attorneys Costs. The indemnity extends to the Agent and the Lenders,
their parents, affiliates, Subsidiaries and all of their directors, officers,
employees, agents, successors, attorneys and assigns. "Hazardous substances"
means any substance, material or waste that is or becomes designated or
regulated as "toxic," "hazardous," "pollutant," or "contaminant" or a similar
designation or regulation under any federal, state or local law (whether under
common law, statute, regulation or otherwise) or judicial or administrative
interpretation of such, including petroleum or natural gas. This indemnity will
survive repayment of all other Obligations.
13.12 Limitation of Liability. NO CLAIM MAY BE MADE BY ANY BORROWER, ANY
LENDER OR OTHER PERSON AGAINST THE AGENT, ANY LENDER, OR THE AFFILIATES,
DIRECTORS, OFFICERS, EMPLOYEES, COUNSEL, REPRESENTATIVES, AGENTS OR ATTORNEYS IN
FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES
IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY
ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION
THEREWITH, AND ANY BORROWER AND EACH LENDER HEREBY WAIVE, RELEASE AND AGREE NOT
TO ▇▇▇ UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR
NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
13.13 Final Agreement. This Agreement and the other Loan Documents are
intended by the Borrowers, the Agent and the Lenders to be the final, complete,
and exclusive expression of the agreement between them. This Agreement
supersedes any and all prior oral or written agreements relating to the subject
matter hereof. No modification, rescission, waiver, release, or amendment of any
provision of this Agreement or any other Loan Document shall be made, except by
a written agreement signed by the Borrowers and a duly authorized officer of
each of the Agent and the requisite Lenders.
80
13.14 Counterparts. This Agreement may be executed in any number of
counterparts, and by the Agent, each Lender and each Borrower in separate
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement; signature pages may be detached
from multiple separate counterparts and attached to a single counterpart so that
all signature pages are physically attached to the same document.
13.15 Captions. The captions contained in this Agreement are for
convenience of reference only, are without substantive meaning and should not be
construed to modify, enlarge, or restrict any provision.
13.16 Right of Setoff. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to any Borrower, any such notice being waived by the
Borrowers to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Lender or any
Affiliate of such Lender to or for the credit or the account of any Borrower
against any and all Obligations owing to such Lender, now or hereafter existing,
irrespective of whether or not the Agent or such Lender shall have made demand
under this Agreement or any Loan Document and although such Obligations may be
contingent or unmatured. Each Lender agrees promptly to notify the Borrower
Representative and the Agent after any such set-off and application made by such
Lender; provided, however, that the failure to give such notice shall not affect
the validity of such set-off and application. NOTWITHSTANDING THE FOREGOING, NO
LENDER SHALL EXERCISE ANY RIGHT OF SET-OFF, BANKER'S LIEN, OR THE LIKE AGAINST
ANY DEPOSIT ACCOUNT OR PROPERTY OF ANY BORROWER HELD OR MAINTAINED BY SUCH
LENDER WITHOUT THE PRIOR WRITTEN UNANIMOUS CONSENT OF THE LENDERS.
13.17 Confidentiality.
(a) The Borrowers hereby consent that the Agent and each Lender may
issue and disseminate to the public general information describing the credit
accommodation entered into pursuant to this Agreement, including the names and
addresses of the Borrowers and a general description of the Borrowers' business
and may use the Borrowers' names in advertising and other promotional material.
(b) Each Lender severally agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information identified as "confidential" or "secret" by the Borrowers and
provided to the Agent or such Lender by or on behalf of the Borrowers, under
this Agreement or any other Loan Document, except to the extent that such
information (i) was or becomes generally available to the public other than as a
result of disclosure by the Agent or such Lender, or (ii) was or becomes
available on a nonconfidential basis from a source other than the Borrowers,
provided that such source is not bound by a confidentiality agreement with the
Borrowers known to the Agent or such Lender; provided, however, that the Agent
and any Lender may disclose such information (1) at the request or pursuant to
any requirement of any Governmental Authority to which the Agent or such Lender
is subject or in connection with an examination of the Agent or such Lender by
any such Governmental Authority; (2) pursuant to subpoena or other court
process; (3) when required to
81
do so in accordance with the provisions of any applicable Requirement of Law;
(4) to the extent reasonably required in connection with any litigation or
proceeding (including, but not limited to, any bankruptcy proceeding) to which
the Agent, any Lender or their respective Affiliates may be party; (5) to the
extent reasonably required in connection with the exercise of any remedy
hereunder or under any other Loan Document; (6) to the Agent's or such Lender's
independent auditors, accountants, attorneys and other professional advisors;
(7) to any prospective Participant or Assignee under any Assignment and
Acceptance, actual or potential, provided that such prospective Participant or
Assignee agrees to keep such information confidential to the same extent
required of the Agent and the Lenders hereunder; (8) as expressly permitted
under the terms of any other document or agreement regarding confidentiality to
which any Borrower is party or is deemed party with the Agent or such Lender,
and (9) to its Affiliates.
13.18 Conflicts with Other Loan Documents. Unless otherwise expressly
provided in this Agreement (or in another Loan Document by specific reference to
the applicable provision contained in this Agreement), if any provision
contained in this Agreement conflicts with any provision of any other Loan
Document, the provision contained in this Agreement shall govern and control.
82
IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
BORROWERS:
▇. ▇. ▇▇▇▇▇ & Co.
A-1 Bit & Tool Co., Inc.
Alewife Boston Ltd.
Alewife Land Corporation
Amicon, Inc.
CB Biomedical, Inc.
CCHP, Inc.
Coalgrace, Inc.
Coalgrace II, Inc.
Creative Food 'N Fun Company
Darex Puerto Rico, Inc.
Del Taco Restaurants, Inc.
Ecarg, Inc.
Five Alewife Boston Ltd.
G C Limited Partners I, Inc.
G C Management, Inc.
GEC Management Corporation
GN Holdings, Inc.
GPC Thomasville Corp.
Gloucester New Communities Company, Inc.
Grace A-B Inc.
Grace ▇-▇ ▇▇ Inc.
Grace Chemical Company of Cuba
Grace Culinary Systems, Inc.
Grace Drilling Company
Grace Energy Corporation
Grace Environmental, Inc.
Grace Europe, Inc.
Grace H-G Inc.
Grace ▇-▇ ▇▇ Inc.
Grace Hotel Services Corporation
Grace International Holdings, Inc.
Grace Offshore Company
Grace PAR Corporation
Grace Petroleum Libya Incorporated
Grace Tarpon Investors, Inc.
Grace Ventures Corp.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Inc.
[SIGNATURE PAGE TO THE POST-PETITION LOAN AND SECURITY AGREEMENT]
S-1
▇. ▇. ▇▇▇▇▇ Capital Corporation
▇. ▇. ▇▇▇▇▇ & Co.-▇▇▇▇.
▇. ▇. ▇▇▇▇▇ Land Corporation
Gracoal, Inc.
Gracoal II, Inc.
Guanica-Caribe Land Development Corporation
Hanover Square Corporation
Homco International, Inc.
Kootenai Development Company
L B Realty, Inc.
Litigation Management, Inc.
Monolith Enterprises, Incorporated
Monroe Street, Inc.
MRA Holdings Corp.
MRA Intermedco, Inc.
MRA Staffing Systems, Inc.
Remedium Group, Inc.
Southern Oil, Resin & Fiberglass, Inc.
Water Street Corporation, each as a
Debtor and a Debtor-in-Possession
By: ----------------------------------------
Its Senior Vice President or Vice President
S-2
CC Partners, as a Debtor and Debtor-in-Possession
By: MRA Staffing Systems, Inc., a General Partner
By:
-----------------------------------
Its:
-----------------------------------
By: CCHP, Inc., a General Partner
By:
-----------------------------------
Its:
-----------------------------------
Axial Basin Rand Company, as a Debtor and
Debtor-in-Possession
By: Grace ▇-▇ ▇▇, Inc., a General Partner
By:
-----------------------------------
Its:
-----------------------------------
By: Grace A-B, Inc., a General Partner
By:
-----------------------------------
Its:
-----------------------------------
Hayden-Gulch West Coal Company, as a Debtor and
Debtor-in-Possession
By: Grace H-G, Inc., a General Partner
By:
-----------------------------------
Its:
-----------------------------------
[SIGNATURE PAGE TO THE POST-PETITION LOAN AND SECURITY AGREEMENT]
S-3
By: Grace ▇-▇ ▇▇, Inc., a General Partner
By:
-----------------------------------
Its:
-----------------------------------
H-G Coal Company, as a Debtor and Debtor-in-Possession
By: Coalgrace, Inc., a General Partner
By:
-----------------------------------
Its:
-----------------------------------
By: Coalgrace II, Inc., a General Partner
By:
-----------------------------------
Its:
-----------------------------------
▇▇▇▇▇ and ▇▇▇▇, LLC, as a Debtor and Debtor-in-Possession
By: ▇. ▇. ▇▇▇▇▇ & Co.-Conn., its sole member
By:
-----------------------------------
Its:
-----------------------------------
[SIGNATURE PAGE TO THE POST-PETITION LOAN AND SECURITY AGREEMENT]
S-4
AGENT:
BANK OF AMERICA, N.A., as the Agent
By:
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Title:
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LENDERS:
BANK OF AMERICA, N.A., as a Lender
By:
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Title: Vice President
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[SIGNATURE PAGE TO THE POST-PETITION LOAN AND SECURITY AGREEMENT]
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ANNEX A
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have the following
respective meanings (unless otherwise defined therein), and all section
references in the following definitions shall refer to sections of the
Agreement:
"Accounts" means, with respect to any Person, all of such Person's now
owned or hereafter acquired or arising accounts, as defined in the UCC,
including any rights to payment for the sale or lease of goods or rendition of
services, whether or not they have been earned by performance.
"Account Debtor" means each Person obligated in any way on or in connection
with an Account.
"ACH Transactions" means any cash management or related services including
the automatic clearing house transfer of funds by the Bank for the account of
any Borrower pursuant to agreement or overdrafts.
"Adjusted Net Earnings from Operations" means, with respect to any fiscal
period of the Company, net income of the Company and its consolidated
Subsidiaries, excluding Other Subsidiaries, after provision for income taxes for
such fiscal period, as determined in accordance with GAAP and reported on the
Financial Statements for such period, including interest payments received in
cash by any Borrower from an Other Subsidiary, excluding any and all of the
following included in such net income: (a) gain or loss arising from the sale of
any capital assets; (b) gain arising from any write-up in the book value of any
asset; (c) earnings of any Person, substantially all the assets of which have
been acquired by the Company or any of its consolidated Subsidiaries in any
manner, to the extent realized by such other Person prior to the date of
acquisition; (d) earnings of any Person in which the Company or any of its
consolidated Subsidiaries has an ownership interest unless (and only to the
extent) such earnings shall actually have been received by the Company or any of
its consolidated Subsidiaries in the form of cash distributions; (e) earnings of
any Person to which assets of the Company or any of its consolidated
Subsidiaries shall have been sold, transferred or disposed of, or into which the
Company or any of its consolidated Subsidiaries shall have been merged, or which
has been a party with a Borrower to any consolidation or other form of
reorganization, prior to the date of such transaction; (f) gain arising from the
acquisition of debt or equity securities of the Company or any of its
consolidated Subsidiaries or from cancellation or forgiveness of Debt; and (g)
gain arising from extraordinary items, as determined in accordance with GAAP, or
from any other non-recurring transaction.
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person or which owns, directly or indirectly, ten percent (10%) or more of
the outstanding equity interest of such Person. A Person shall be deemed to
control another Person if the controlling Person possesses,
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directly or indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the ownership of
voting securities, by contract, or otherwise.
"Administration Fee" has the meaning specified in Section 2.4.
"Agent" means the Bank, solely in its capacity as agent for the Lenders,
and any successor agent.
"Agent Advances" has the meaning specified in Section 1.2(i).
"Agent's Liens" means the Liens in the Collateral granted to the Agent, for
the benefit of the Lenders, Bank, and Agent pursuant to this Agreement and the
other Loan Documents.
"Agent-Related Persons" means the Agent, together with its Affiliates, and
the officers, directors, employees, counsel, representatives, agents and
attorneys-in-fact of the Agent and such Affiliates.
"Aggregate Revolver Outstandings" means, at any date of determination: the
sum of (a) the unpaid balance of Revolving Loans, (b) the aggregate amount of
Pending Revolving Loans, (c) one hundred percent (100%) of the aggregate undrawn
face amount of all outstanding Letters of Credit, and (d) the aggregate amount
of any unpaid reimbursement obligations in respect of drawn Letters of Credit.
"Agreement" means the Loan and Security Agreement to which this Annex A is
attached, as from time to time amended, modified or restated.
"Applicable L/C Margin" means the Applicable Margin with
respect to LIBOR Rate Loans as from time to time in effect, plus, during the
continuance of an Event of Default, if the Agent or the Majority Lenders in
their discretion so elect, 2% per annum.
"Applicable Margin" means
(i) with respect to Base Rate Loans and all other Obligations (other
than LIBOR Rate Loans), 0%; and
(ii) with respect to LIBOR Rate Loans, 2.00%.
The Applicable Margins shall be adjusted (up or down) prospectively on the
first day of each calendar month, commencing May 1, 2001, based upon the Average
Daily Outstanding Exposure during the immediately preceding calendar month, as
calculated by the Agent. Adjustments in Applicable Margins shall be determined
by reference to the following grid:
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AVERAGE DAILY LEVEL OF
OUTSTANDING EXPOSURE APPLICABLE MARGINS:
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Base Rate Loans LIBOR Loans
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>$125,000,000 .25% 2.25%
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<$125,000,000 .00% 2.00%
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"Appraised Value" means the appraised liquidation value in place of
Borrowers' Eligible Fixed Assets as reflected in an appraisal prepared by an
appraisal firm, in each case reasonably satisfactory to Agent.
"ART" shall mean Advanced Refining Technologies, LLC, a Delaware limited
liability company.
"Assignee" has the meaning specified in Section 11.2(a).
"Assignment and Acceptance" has the meaning specified in Section 11.2(a).
"Attorney Costs" means and includes all reasonable documented fees,
expenses and disbursements of any law firm or other counsel engaged by the
Agent, the reasonably allocated costs and expenses of internal legal services of
the Agent.
"Availability" means, at any time (a) the lesser of (i) the Maximum
Revolver Amount or (ii) the Borrowing Base, minus (b) a reserve in the amount of
the Carve-Out and other Reserves other than Reserves deducted in the calculation
of the Borrowing Base, minus (c) in each case, the Aggregate Revolver
Outstandings.
"Average Daily Outstanding Exposure" means, for any period, an amount equal
to the average daily Aggregate Revolver Outstandings (excluding any Pending
Revolving Loans) during such period.
"Bank" means Bank of America, N.A., a national banking association, or any
successor entity thereto.
"Bank Products" means any one or more of the following types of services or
facilities extended to any Borrower by the Bank or any affiliate of the Bank in
reliance on the Bank's agreement to indemnify such affiliate: (i) credit cards;
(ii) ACH Transactions; (iii) cash management, including controlled disbursement
services; and (iv) Hedge Agreements.
"Bank Product Reserves" means all reserves which the Agent from time to
time establishes in its reasonable discretion for the Bank Products then
provided or outstanding.
"Bankruptcy Case(s)" has the meaning specified in the recitals to this
Agreement.
"Bankruptcy Code" means Title 11 of the United States Code (11 ▇.▇.▇.▇▇.
101 et seq.), as amended.
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"Bankruptcy Court" means the United States Bankruptcy Court for the
District of Delaware, or any other court having jurisdiction over the Bankruptcy
Cases from time to time, including, without limitation, the United States
District Court for the District of Delaware if and to the extent it withdraws
the reference with respect to the Bankruptcy Cases, any part thereof, or any
matter or proceeding therein.
"Base Rate" means, for any day, the rate of interest in effect for such day
as publicly announced from time to time by the Bank in Charlotte, North Carolina
as its "prime rate" (the "prime rate" being a rate set by the Bank based upon
various factors including the Bank's costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate). Any change
in the prime rate announced by the Bank shall take effect at the opening of
business on the day specified in the public announcement of such change. Each
Interest Rate based upon the Base Rate shall be adjusted simultaneously with any
change in the Base Rate.
"Base Rate Loans" means the Base Rate Revolving Loans.
"Base Rate Revolving Loan" means a Revolving Loan during any period in
which it bears interest based on the Base Rate.
"Borrower" and "Borrowers" have the meanings set forth in the Preamble to
the Agreement.
"Borrower Representative" has the meaning set forth in Section 1.2(c).
"Borrowing" means a borrowing hereunder consisting of Revolving Loans made
on the same day by the Lenders to the Borrowers or by Bank in the case of a
Borrowing funded by Non-Ratable Loans or by the Agent in the case of a Borrowing
consisting of an Agent Advance, or the issuance of Letters of Credit hereunder.
"Borrowing Base" means, at any time, an amount equal to (a) the sum of (A)
eighty-five percent (85%) of the Net Amount of Eligible Accounts; plus (B) sixty
percent (60%) of the value of Eligible Inventory; plus (C) the lesser of (i)
$125,000,000 and (ii) fifty percent (50%) of the Appraised Value of Eligible
Fixed Assets; plus (D) forty percent (40%) of the cost of Eligible In-Transit
Inventory (provided that when such Inventory is received at a Borrower's
operating facility in the United States of America and paid for it shall
constitute Eligible Inventory subject to a sixty percent (60%) advance rate);
minus (b) Reserves from time to time established by the Agent in its reasonable
credit judgment after consultation with the Borrower Representative.
"Borrowing Base Certificate" means a certificate by a Responsible Officer
of the Borrower Representative, substantially in the form of Exhibit B (or
another form acceptable to the Agent) setting forth the calculation of the
Borrowing Base, including a calculation of each component thereof, all in such
detail as shall be reasonably satisfactory to the Agent. All calculations of the
Borrowing Base in connection with the preparation of any Borrowing Base
Certificate shall originally be made by the Borrower Representative and
certified to the Agent; provided, that the Agent shall have the right to review
and adjust, in the exercise of its reasonable credit judgment, any such
calculation (1) to reflect its reasonable estimate of declines
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in value of any of the Collateral described therein, and (2) to the extent that
such calculation is not in accordance with this Agreement.
"Business Day" means (a) any day that is not a Saturday, Sunday, or a day
on which banks in New York, New York or Charlotte, North Carolina are required
or permitted to be closed, and (b) with respect to all notices, determinations,
fundings and payments in connection with the LIBOR Rate or LIBOR Rate Loans, any
day that is a Business Day pursuant to clause (a) above and that is also a day
on which trading in Dollars is carried on by and between banks in the London
interbank market.
"Capital Adequacy Regulation" means any guideline, request or directive of
any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.
"Capital Lease" means, with respect to any Person, any lease of property by
such Person which, in accordance with GAAP, should be reflected as a capital
lease on the balance sheet of the such Person.
"Carve-Out" has the meaning specified in Section 1.8.
"Carve-Out Event" has the meaning specified in Section 1.8.
"Cash Equivalents" means (a) direct obligations of, or obligations
guaranteed by, the United States of America or any agency thereof, (b)
commercial paper issued in the United States of America and rated at least A-1
or P-1 by at least one nationally recognized rating organization, (c)
certificates of deposit issued by or eurodollar deposits made with any Lender,
any Affiliate of any Lender, or any bank or trust company which has (or the
parent of which has) capital, surplus and undivided profits aggregating at least
$100,000,000 (or the equivalent amount in another currency), (d) drafts accepted
by any bank or trust company referred to in clause (c) above or any other
negotiable instrument guaranteed or endorsed with full recourse by any such bank
or trust company, (e) repurchase agreements with respect to any of the foregoing
types of securities described in clauses (a) and (b) above, and (f) investments
in money market funds substantially all of whose assets are comprised of
securities of the types described in clause (a) through (e) above; provided that
(i) each such obligation, certificate of deposit, draft, investment, security
and instrument (including those subject to repurchase agreements) matures within
one year after it is acquired and (ii) each item of such commercial paper
(including those subject to repurchase agreements) matures within ninety days
after it is acquired by the applicable Borrower or any Other Subsidiary.
"Chattel Paper" means all of the Borrower's now owned or hereafter acquired
chattel paper, as defined in the UCC, including electronic chattel paper.
"Change of Control" means any of the following: (i) any Person or group of
related Persons has direct or indirect beneficial ownership of 30% or more of
the outstanding capital stock of the Company having ordinary voting power (other
than stock having such power only by reason of the happening of a contingency)
for the election of a majority of the board of directors of the Company, (ii)
any Person or group of related Persons shall acquire all or
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substantially all of the assets of the Company or (iii) the Company ceases to
own and control, directly or indirectly, all of the economic and voting rights
associated with all of the outstanding capital stock of any other Borrower.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986.
"COLI" shall mean life insurance policies owned by or assigned to one or
more Borrowers.
"Collateral" means all of the Borrowers' real and personal property and all
other assets of any Person from time to time subject to Agent's Liens securing
payment or performance of the Obligations.
"Committee" means any official committee(s) appointed in the Bankruptcy
Cases.
"Commitment" or "Revolving Loan Commitment" means, at any time with respect
to a Lender, the principal amount set forth beside such Lender's name under the
heading "Commitment" on Schedule 1.1 attached to the Agreement or on the
signature page of the Assignment and Acceptance pursuant to which such Lender
became a Lender hereunder in accordance with the provisions of Section 11.2, as
such Commitment may be adjusted from time to time in accordance with the
provisions of Section 11.2, and "Commitments" means, collectively, the aggregate
amount of the commitments of all of the Lenders.
"Company" has the meaning set forth in the Preamble to this Agreement.
"Contaminant" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, polychlorinated biphenyls ("PCBs"), or any constituent of
any such substance or waste.
"Continuation/Conversion Date" means the date on which a Loan is converted
into or continued as a LIBOR Rate Loan.
"Credit Support" has the meaning specified in Section 1.4(a).
"Debt" means, without duplication, all liabilities, obligations and
indebtedness of any Borrower to any Person, of any kind or nature, now or
hereafter owing, arising, due or payable, howsoever evidenced, created,
incurred, acquired or owing, whether primary, secondary, direct, contingent,
fixed or otherwise, consisting of indebtedness for borrowed money or the
deferred purchase price of property, excluding trade payables, but including (a)
all Obligations; (b) all obligations and liabilities of any Person secured by
any Lien (other than Liens described in clauses (c), (d) or (g) of the
definition of Permitted Liens) on any Borrower's or any Other Subsidiary's
property, even though such Borrower or Other Subsidiary shall not have assumed
or become liable for the payment thereof; provided, however, that all such
obligations and liabilities which are limited in recourse to such property shall
be included in Debt only to the extent of the book value of such property as
would be shown on a balance sheet of any Borrower or any Other Subsidiary
prepared in accordance with GAAP; (c) all obligations
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or liabilities created or arising under any Capital Lease or conditional sale or
other title retention agreement with respect to property used or acquired by any
Borrower or any Other Subsidiary, even if the rights and remedies of the lessor,
seller or lender thereunder are limited to repossession of such property;
provided, however, that all such obligations and liabilities which are limited
in recourse to such property shall be included in Debt only to the extent of the
book value of such property as would be shown on a balance sheet of any Borrower
or any Other Subsidiary prepared in accordance with GAAP; and (d) all
obligations and liabilities under Guaranties and (e) the present value
(discounted at the Base Rate) of lease payments due under synthetic leases.
"Default" means any event or circumstance which, with the giving of notice,
the lapse of time, or both, would (if not cured, waived, or otherwise remedied
during such time) constitute an Event of Default.
"Default Rate" means a fluctuating per annum interest rate at all times
equal to the sum of (a) the otherwise applicable Interest Rate plus (b) two
percent (2%) per annum. Each Default Rate shall be adjusted simultaneously with
any change in the applicable Interest Rate.
"Defaulting Lender" has the meaning specified in Section 12.15(c).
"Designated Account" has the meaning specified in Section 1.2(c).
"Distribution" means, in respect of any corporation: (a) the payment or
making of any dividend or other distribution of property in respect of capital
stock, or any options or warrants for, or other rights with respect to, such
stock, of such corporation, other than dividends or distributions in capital
stock of the same class; or (b) the redemption or other acquisition by such
corporation of any capital stock, or any options or warrants for, or other
rights with respect to, such stock, of such corporation.
"Documents" means all documents as such term is defined in the UCC,
including bills of lading, warehouse receipts or other documents of title, now
owned or hereafter acquired by any Borrower.
"DOL" means the United States Department of Labor or any successor
department or agency.
"Dollar" and "$" means the lawful currency of the United States. Unless
otherwise specified, all payments under the Agreement shall be made in Dollars.
"EBITDAR" means, with respect to any fiscal period of the Company, Adjusted
Net Earnings from Operations, plus, to the extent deducted in the determination
of Adjusted Net Earnings from Operations for that fiscal period, interest
expenses, Federal, state, local and foreign income taxes, depreciation and
amortization plus Restructuring Costs.
"Eligible Accounts" means all Accounts owned by the Borrowers except for
any Account:
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(a) with respect to which more than 120 days have elapsed since the
date of the original invoice therefor or which is more than 60 days past due;
(b) with respect to which any of the representations, warranties,
covenants, and agreements contained in the Security Agreement are incorrect or
have been breached;
(c) with respect to which Account (or any other Account due from such
Account Debtor), in whole or in part, a check, promissory note, draft, trade
acceptance or other instrument for the payment of money has been received,
presented for payment and returned uncollected for any reason;
(d) which represents a progress billing (as hereinafter defined) or as
to which the applicable Borrower has extended the time for payment without the
consent of the Agent; for the purposes hereof, "progress billing" means any
invoice for goods sold or leased or services rendered under a contract or
agreement pursuant to which the Account Debtor's obligation to pay such invoice
is conditioned upon the applicable Borrower's completion of any further
performance under the contract or agreement;
(e) with respect to which any one or more of the following events has
occurred to the Account Debtor on such Account: the filing by or against the
Account Debtor of a request or petition for liquidation, reorganization,
arrangement, adjustment of debts, adjudication as a bankrupt, winding-up, or
other relief under the bankruptcy, insolvency, or similar laws of the United
States, any state or territory thereof, or any foreign jurisdiction, now or
hereafter in effect; the making of any general assignment by the Account Debtor
for the benefit of creditors; the appointment of a receiver or trustee for the
Account Debtor or for any of the assets of the Account Debtor, including,
without limitation, the appointment of or taking possession by a "custodian," as
defined in the Bankruptcy Code; the institution by or against the Account Debtor
of any other type of insolvency proceeding (under the bankruptcy laws of the
United States or otherwise) or of any formal or informal proceeding for the
dissolution or liquidation of, settlement of claims against, or winding up of
affairs of, the Account Debtor; the sale, assignment, or transfer of all or any
material part of the assets of the Account Debtor; the nonpayment generally by
the Account Debtor of its debts as they become due; or the cessation of the
business of the Account Debtor as a going concern;
(f) if fifty percent (50%) or more of the aggregate Dollar amount of
outstanding Accounts owed at such time by the Account Debtor thereon is
classified as ineligible under clause (a) above;
(g) owed by an Account Debtor which: (i) does not maintain its chief
executive office in the United States of America or Canada (other than the
Province of Newfoundland); or (ii) is not organized under the laws of the United
States of America or Canada or any state or province thereof; or (iii) is the
government of any foreign country or sovereign state, or of any state, province,
municipality, or other political subdivision thereof, or of any department,
agency, public corporation, or other instrumentality thereof; except in the case
of clauses (i) and (ii) above to the extent that such Account Debt is rated at
least A-1 or P-1 by at least one nationally recognized rating organization and
has substantial operating assets
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located in the United States of America and except to the extent that such
Account is secured or payable by a letter of credit satisfactory to the Agent in
its discretion;
(h) owed by an Account Debtor which is an Affiliate or employee of any
Borrower other than an Affiliate which does not control any Borrower or as to
which no Borrower has voting control (as long as (i) the maximum amount of such
Accounts included the Borrowing Base at any time shall not exceed $10,000,000,
and (ii) the Agent has determined, in its sole discretion, that the applicable
Account Debtor is not an Account Debtor described in clause (i) below);
(i) owed by an Account Debtor to which any Borrower or any of its
Subsidiaries, is indebted in any way, or which is subject to any right of setoff
or recoupment by the Account Debtor (a "contra account"), unless the Account
Debtor has entered into an agreement acceptable to the Agent to waive setoff
rights; or if the Account Debtor thereon has disputed liability or made any
claim with respect to any other Account due from such Account Debtor; but in
each such case only to the extent of such indebtedness, setoff, recoupment,
dispute, or claim;
(j) which represents a sale on a ▇▇▇▇-and-hold, guaranteed sale, sale
and return, sale on approval, consignment, or other repurchase or return basis;
(k) which is evidenced by a promissory note or other instrument or by
chattel paper;
(l) if the Agent believes, in the exercise of its reasonable judgment,
that the prospect of collection of such Account is impaired or that the Account
may not be paid by reason of the Account Debtor's financial inability to pay;
(m) with respect to which the Account Debtor is located in any state
requiring the filing of a Notice of Business Activities Report or similar report
in order to permit the applicable Borrower to seek judicial enforcement in such
State of payment of such Account, unless such Borrower has qualified to do
business in such state or has filed a Notice of Business Activities Report or
equivalent report for the then current year;
(n) which arises out of a sale not made in the ordinary course of the
applicable Borrower's business;
(o) with respect to which the goods giving rise to such Account have
not been shipped and delivered to and accepted by the Account Debtor or the
services giving rise to such Account have not been performed by the applicable
Borrower, and, if applicable, accepted by the Account Debtor, or the Account
Debtor revokes its acceptance of such goods or services;
(p) owed by an Account Debtor which is obligated to the Borrowers
respecting Accounts the aggregate unpaid balance of which exceeds twenty-five
percent (25%) of the aggregate unpaid balance of all Accounts owed to the
Borrowers at such time by all of the Borrowers' Account Debtors, but only to the
extent of such excess;
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(q) which is not subject to a first priority and perfected security
interest in favor of the Agent for the benefit of the Lenders;
(r) which is payable in any currency other than Dollars; or
(s) which is subject to a securitization facility; or
(t) that the Agent otherwise determines to be ineligible in its
reasonable credit judgment after consultation with the Borrower Representative
due to facts, circumstances or events determined pursuant to the Agent's initial
field audit or facts, circumstances or events arising, occurring or discovered
after the completion of Agent's initial field audit and affecting the Agent's or
the applicable Borrower's ability to collect all or any portion of such Account
in a timely manner.
If any Account at any time ceases to be an Eligible Account, then such
Account shall promptly be excluded from the calculation of Eligible Accounts.
"Eligible Assignee" means (a) a commercial bank, commercial finance company
or other asset based lender, having total assets in excess of $1,000,000,000;
(b) any Lender listed on the signature page of this Agreement; (c) any Affiliate
of any Lender; and (d) if an Event of Default has occurred and is continuing,
any Person reasonably acceptable to the Agent.
"Eligible Fixed Assets" means (i) machinery and equipment owned by a
Borrower, located in the United States of America, installed in a manufacturing
facility, in operating condition, subject to Liens in favor of the Agent as
provided herein, subject only to Permitted Liens described in clauses (a) - (f)
of the definition thereof, and as to which an Appraised Value has been
determined and (ii) the Land and Buildings, subject to Liens in favor of the
Agent as described herein, and subject only to Permitted Liens described in
clauses (a) - (f) of the definition thereof.
"Eligible In-Transit Inventory" means raw materials purchased by a Borrower
that would qualify as Eligible Inventory if it were not in-transit which
Inventory is in-transit from a supplier to an operating facility of a Borrower,
the payment for which is provided for by a documentary Letter of Credit, and as
to which the bills of lading or other documents evidencing title thereto are
subject to Agent's Liens.
"Eligible Inventory" means all Inventory owned by a Borrower, valued at the
lower of cost (on a first-in, first-out basis) or market, except any Inventory:
(a) that is not owned by one of the Borrowers;
(b) that is not subject to the Agent's Liens, which are perfected as to
such Inventory, or that are subject to any other Lien whatsoever (other than the
Liens described in clause (d) of the definition of Permitted Liens provided that
such Permitted Liens (i) are junior in priority to the Agent's Liens or subject
to Reserves and (ii) do not impair directly or indirectly the ability of the
Agent to realize on or obtain the full benefit of the Collateral);
(c) that does not consist of finished goods or raw materials;
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(d) that consists of samples, prototypes, supplies, or packing and
shipping materials;
(e) that is not in good condition, is unmerchantable, or does not meet
all standards imposed by any Governmental Authority, having regulatory authority
over such goods, their use or sale;
(f) that is not currently either usable or salable, at prices
approximating at least cost, in the normal course of the applicable Borrower's
business, or that is slow moving or stale;
(g) that is obsolete or returned or repossessed or used goods taken in
trade;
(h) that is located outside the United States of America or that is
in-transit from vendors or suppliers, except for inventory that is in-transit in
the United States of America between an operating facility of a Borrower and
another operating facility of a Borrower, and except for Eligible In-Transit
Inventory;
(i) that contains or bears any Proprietary Rights licensed to a
Borrower by any Person, if the Agent is not satisfied that it may sell or
otherwise dispose of such Inventory in accordance with the terms of Section 9.2
without infringing the rights of the licensor of such Proprietary Rights or
violating any contract with such licensor (and without payment of any royalties
other than any royalties due with respect to the sale or disposition of such
Inventory pursuant to the existing license agreement), and, as to which the
Borrower Representative has not delivered to the Agent a consent or sublicense
agreement from such licensor in form and substance acceptable to the Agent if
requested;
(j) that is not reflected in the details of a current perpetual
inventory report; or
(k) that is Inventory held on consignment and owned by a supplier;
(l) that the Agent otherwise determines to be ineligible in its
reasonable credit judgment after consultation with the Borrower Representative
due to facts, circumstances or events determined pursuant to Agent's initial
field audit or facts, circumstances or events arising, occurring or discovered
after the completion of Agent's initial field audit and affecting the Agent's or
the applicable Borrower's ability to sell such Inventory at least at its book
value in the ordinary course of business and pursuant to customary terms;
(m) that consists of freight-in charges which are not associated with
the cost of such Inventory;
(n) that consists of hazardous materials; or
(o) that is not covered by appropriate insurance arrangements.
If any Inventory at any time ceases to be Eligible Inventory, such
Inventory shall promptly be excluded from the calculation of Eligible Inventory.
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"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for a Release or
injury to the environment.
"Environmental Compliance Reserve" means any reserve which the Agent
establishes in its reasonable discretion after prior written notice to the
Borrower Representative from time to time for amounts that are reasonably likely
to be expended by the Borrowers in order for the Borrowers and their respective
operations and property (a) to comply with any notice from a Governmental
Authority asserting material non-compliance with Environmental Laws, or (b) to
correct any such material non-compliance identified in a report delivered to the
Agent and the Lenders pursuant to Section 7.7.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, licenses, authorizations and permits of,
and agreements with, any Governmental Authority, in each case relating to
environmental, health, safety and land use matters.
"Environmental Lien" means a Lien in favor of any Governmental Authority
for (a) any liability under Environmental Laws, or (b) damages arising from, or
costs incurred by such Governmental Authority in response to, a Release or
threatened Release of a Contaminant into the environment.
"Equipment" means, with respect to any Person, all of such Person's now
owned and hereafter acquired machinery, equipment, furniture, furnishings,
fixtures, and other tangible personal property (except Inventory), including
embedded software, motor vehicles with respect to which a certificate of title
has been issued, aircraft, dies, tools, jigs, molds and office equipment, as
well as all of such types of property leased by such Person and all of such
Person's rights and interests with respect thereto under such leases (including,
without limitation, options to purchase); together with all present and future
additions and accessions thereto, replacements therefor, component and auxiliary
parts and supplies used or to be used in connection therewith, and all
substitutes for any of the foregoing, and all manuals, drawings, instructions,
warranties and rights with respect thereto; wherever any of the foregoing is
located.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with any Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan,
(b) a withdrawal by any Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations which is treated as such a withdrawal under Section 4062(e) of
ERISA, (c) a complete or partial withdrawal by any Borrower or any ERISA
Affiliate from a Multi-employer Plan or notification that a Multi-employer Plan
is in
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reorganization, (d) the filing of a notice of intent to terminate, the treatment
of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multi-employer Plan, (e) the occurrence of an event (other than the act of the
filing of the Bankruptcy Cases) which might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan or Multi-employer Plan, or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon any Borrower
or any ERISA Affiliate.
"Event of Default" has the meaning specified in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, and regulations
promulgated thereunder.
"Facility Fee" has the meaning specified in Section 2.4.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the Bank on such
day on such transactions as determined by the Agent.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"Final Order" has the meaning specified in Section 8.2.
"Financial Statements" means, according to the context in which it is used,
the financial statements referred to in Sections 5.2 and 6.6 or any other
financial statements required to be given to the Lenders pursuant to this
Agreement.
"First Day Orders" means those orders of the Bankruptcy Court, in form and
substance satisfactory to the Agent, which are entered in response or relating
to applications or motions made or filed by the Borrowers on the Petition Date.
"Fiscal Year" means the Borrowers' fiscal year for financial accounting
purposes. The current Fiscal Year of the Borrowers will end on December 31,
2001.
"Fixed Assets" means the Equipment and Real Estate of the Borrowers.
A-13
"Foreign Subsidiary" means any direct or indirect Subsidiary of the Company
organized or incorporated under the laws of a jurisdiction outside the United
States of America.
"Funding Date" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles and practices set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
U.S. accounting profession).
"General Intangibles" means with respect to any Person, all of such
Person's now owned or hereafter acquired general intangibles, choses in action
and causes of action and all other intangible personal property of such Person
of every kind and nature (other than Accounts), including, without limitation,
all contract rights, payment intangibles, Proprietary Rights, corporate or other
business records, inventions, designs, blueprints, plans, specifications,
patents, patent applications, trademarks, service marks, trade names, trade
secrets, goodwill, copyrights, computer software, customer lists, registrations,
licenses, franchises, tax refund claims, any funds which may become due to such
Person in connection with the termination of any Plan or other employee benefit
plan or any rights thereto and any other amounts payable to such Person from any
Plan or other employee benefit plan, rights and claims against carriers and
shippers, rights to indemnification, business interruption insurance and
proceeds thereof, property, casualty or any similar type of insurance and any
proceeds thereof, proceeds of insurance covering the lives of key employees on
which such Person is beneficiary, rights to receive dividends, distributions,
cash, Instruments and other property in respect of or in exchange for pledged
equity interests or Investment Property and any letter of credit, guarantee,
claim, security interest or other security held by or granted to such Person.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guaranty" means, with respect to any Person, all obligations of such
Person which in any manner directly or indirectly guarantee or assure, or in
effect guarantee or assure, the payment or performance of any indebtedness,
dividend or other obligations of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including any such obligations
incurred through an agreement, contingent or otherwise: (a) to purchase the
guaranteed obligations or any property constituting security therefor; (b) to
advance or supply funds for the purchase or payment of the guaranteed
obligations or to maintain a working capital or other balance sheet condition;
or (c) to lease property or to purchase any debt or equity securities or other
property or services. The amount of any Guaranty of any guaranteeing Person
shall be deemed to be the lower of (i) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guaranty
is made and (ii) the maximum amount for which such guaranteeing Person may be
liable pursuant to the terms of the instrument embodying such Guaranty, unless
such primary
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obligation and the maximum amount for which such guaranteeing Person may be
liable are not stated or determinable, in which case the amount of such Guaranty
shall be such guaranteeing Person's maximum reasonably anticipated liability in
respect thereof as determined by such guaranteeing Person in good faith.
"Hedge Agreement" means, with respect to any Person, 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 any
Person's exposure to fluctuations in interest or exchange rates, loan, credit
exchange, security or currency valuations or commodity prices.
"Instruments" means, with respect to any Person, all instruments as such
term is defined in the UCC, now owned or hereafter acquired by such Person.
"Interest Period" means, as to any LIBOR Rate Loan, from the Funding Date
of such Loan or the Continuation/Conversion Date on which the Loan is converted
into or continued as a LIBOR Rate Loan, to the date one, two, three or six
months thereafter as selected by the Borrower Representative in its Notice of
Borrowing, in the form attached hereto as Exhibit D, or Notice of
Continuation/Conversion, in the form attached hereto as Exhibit E, provided
that:
(a) if any Interest Period would otherwise end on a day that is not a
Business Day, that Interest Period shall be extended to the following Business
Day unless the result of such extension would be to carry such Interest Period
into another calendar month, in which event such Interest Period shall end on
the preceding Business Day;
(b) any Interest Period pertaining to a LIBOR Rate Loan that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period; and
(c) no Interest Period shall extend beyond the Stated Termination Date.
"Interest Rate" means each or any of the interest rates, including the
Default Rate, set forth in Section 2.1.
"Interim Order" has the meaning specified in Section 8.1(m).
"Inventory" means, with respect to any Persons all of such Person's now
owned and hereafter acquired inventory, goods and merchandise, wherever located,
to be furnished under any contract of service or held for sale or lease, all
returned goods, raw materials, work-in-process, finished goods (including
embedded software), other materials and supplies of any kind, nature or
description which are used or consumed in such Person's business or used in
connection with the packing, shipping, advertising, selling or finishing of such
goods, merchandise, and all documents of title or other Documents representing
them.
A-15
"Investment Property" means, with respect to any Person, all of such
Person's right title and interest in and to any and all: (a) securities whether
certificated or uncertificated; (b) securities entitlements; (c) securities
accounts; (d) commodity contracts; or (e) commodity accounts.
"Investments" has the meaning given such term in the definition of
"Restricted Investments".
"IRS" means the Internal Revenue Service and any Governmental Authority
succeeding to any of its principal functions under the Code.
"Land and Buildings" means the operating facilities owned by the Borrowers
located in the United States of America and described on Schedule A-2 hereto.
"Latest Projections" means: (a) on the Closing Date and thereafter until
the Agent receives new projections pursuant to Section 5.2(f), the projections
of the Company's financial condition, results of operations, and cash flows, for
the period commencing on April 1, 2001 and ending on April 1, 2003 and delivered
to the Agent prior to the Closing Date; and (b) thereafter, the projections most
recently received by the Agent pursuant to Section 5.2(f).
"Lender" and "Lenders" have the meanings specified in the introductory
paragraph hereof and shall include the Agent to the extent of any Agent Advance
outstanding and the Bank to the extent of any Non-Ratable Loan outstanding;
provided that no such Agent Advance or Non-Ratable Loan shall be taken into
account in determining any Lender's Pro Rata Share.
"Letter of Credit" has the meaning specified in Section 1.4(a).
"Letter of Credit Fee" has the meaning specified in Section 2.6.
"Letter of Credit Issuer" means the Bank, any affiliate of the Bank or any
other financial institution that issues any Letter of Credit pursuant to this
Agreement; provided however that the Agent shall not cause any Letter of Credit
to be issued by a Person which is not a Lender and which is not reasonably
acceptable to the Borrower.
"Letter of Credit Subfacility" means $150,000,000.
"LIBOR Interest Payment Date" means, with respect to a LIBOR Rate Loan, the
first day of each month, the Termination Date and the last day of each Interest
Period applicable to such Loan.
"LIBOR Rate" means, for any Interest Period, with respect to LIBOR Rate
Loans, the rate of interest per annum determined pursuant to the following
formula:
LIBOR Rate = Offshore Base Rate
--------------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
A-16
"Offshore Base Rate" means the rate per annum appearing on Telerate Page
3750 (or any successor page) as the London interbank offered rate for deposits
in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period for a term comparable to such Interest
Period. If for any reason such rate is not available, the Offshore Base Rate
shall be, for any Interest Period, the rate per annum appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates. If for any
reason none of the foregoing rates is available, the Offshore Base Rate shall
be, for any Interest Period, the rate per annum determined by Agent as the rate
of interest at which dollar deposits in the approximate amount of the LIBOR Rate
Loan comprising part of such Borrowing would be offered by the Bank's London
Branch to major banks in the offshore dollar market at their request at or about
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period; and
"Eurodollar Reserve Percentage" means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, rounded upward to the
next 1/100th of 1%) in effect on such day applicable to member banks under
regulations issued from time to time by the Federal Reserve Board for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as "Eurocurrency liabilities"). The LIBOR Rate
for each outstanding LIBOR Rate Loan shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage.
"LIBOR Rate Loans" means the LIBOR Revolving Loans.
"LIBOR Revolving Loan" means a Revolving Loan during any period in which it
bears interest based on the LIBOR Rate.
"Lien" means: (a) any interest in property securing an obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute, or contract, and including a
security interest, charge, claim, or lien arising from a mortgage, deed of
trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement,
agreement, security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes; (b) to the extent not included
under clause (a), any reservation, exception, encroachment, easement,
right-of-way, covenant, condition, restriction, lease or other title exception
or encumbrance affecting property; and (c) any contingent or other agreement to
provide any of the foregoing.
"Loan Account" means the loan account of the Borrowers, which account shall
be maintained by the Agent.
"Loan Documents" means this Agreement, Revolving Loan Notes, the Interim
Order, the Final Order, and any other agreements, instruments, and documents
heretofore, now or hereafter evidencing, securing, guaranteeing or otherwise
relating to the Obligations, the Collateral or any other aspect of the
transactions contemplated by this Agreement.
A-17
"Loans" means, collectively, all loans and advances provided for in
Article 1.
"Majority Lenders" means at any date of determination Lenders whose Pro
Rata Shares aggregate more than 50%.
"Margin Stock" means "margin stock" as such term is defined in Regulation
T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) of the Borrowers taken as a whole; (b) a material
impairment of any Borrower's ability to pay any of the Loans or pay or perform
any of its other obligations in accordance with the terms of this Agreement or
any other Loan Document; (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against any Borrower of any Loan
Document to which it is a party; or (d) a material impairment of the validity,
extent or priority of the Agent's Liens.
"Material Asset Disposition" means an asset disposition if the Net Proceeds
thereof (together with all related asset dispositions) exceeds $500,000.
"Maximum Revolver Amount" means $250,000,000.
"Mortgages" means and includes any and all of the mortgages, deeds of
trust, deeds to secure debt, assignments and other instruments, if any, executed
and delivered by a Borrower to or for the benefit of the Agent by which the
Agent, on behalf of the Lenders, acquires a Lien on the Real Estate or a
collateral assignment of the Borrower's interest under leases of Real Estate,
and all amendments, modifications and supplements thereto.
"Multi-employer Plan" means a "multi-employer plan" as defined in Section
4001(a)(3) of ERISA which is or was at any time during the current year or the
immediately preceding six (6) years contributed to by any Borrower or any ERISA
Affiliate.
"Net Amount of Eligible Accounts" means, at any time, the gross amount of
Eligible Accounts less sales, excise or similar taxes, and less returns,
discounts, claims, credits, allowances, accrued rebates, offsets, deductions,
counterclaims, disputes and other defenses of any nature at any time issued,
owing, granted, outstanding, available or claimed.
"Net Proceeds" means the cash proceeds of any asset disposition or any sale
of the stock of any Subsidiary of any Borrower, net of (A) commissions and other
reasonable and customary transaction costs, fees and expenses properly
attributable to such transaction and payable by any Borrower in connection
therewith (in each case, paid to non-Affiliates), (B) transfer taxes, (C)
amounts payable to holders of senior Liens (to the extent such Liens constitute
Permitted Liens hereunder), if any, and (D) an appropriate reserve for income
taxes in accordance with GAAP in connection therewith.
"Non-Ratable Loan" and "Non-Ratable Loans" have the meanings specified in
Section 1.2(h).
"Notes" means Revolving Loan Notes.
A-18
"Notice of Borrowing" has the meaning specified in Section 1.2(b).
"Notice of Continuation/Conversion" has the meaning specified in
Section 2.2(b).
"Obligations" means all present and future loans, advances, liabilities,
obligations, covenants, duties, and debts owing by any Borrower to the Agent
and/or any Lender, arising under or pursuant to this Agreement or any of the
other Loan Documents, whether or not evidenced by any note, or other instrument
or document, whether arising from an extension of credit, opening of a letter of
credit, acceptance, loan, guaranty, indemnification or otherwise, whether direct
or indirect, absolute or contingent, due or to become due, primary or secondary,
as principal or guarantor, and including all principal, interest, charges,
expenses, fees, attorneys' fees, filing fees and any other sums chargeable to
any Borrower hereunder or under any of the other Loan Documents. "Obligations"
includes, without limitation, (a) all debts, liabilities, and obligations now or
hereafter arising from or in connection with the Letters of Credit and (b) all
debts, liabilities and obligations now or hereafter arising from or in
connection with Bank Products.
"Other Subsidiary" means any Subsidiary of the Company other than those
Subsidiaries which are Borrowers.
"Other Subsidiary-Domestic" means each Other Subsidiary which is organized
under the laws of the United States of America or a political subdivision
thereof.
"Other Taxes" means any present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies which arise from any
payment made hereunder or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any other Loan Documents.
"Participant" means any Person who shall have been granted the right by any
Lender to participate in the financing provided by such Lender under this
Agreement, and who shall have entered into a participation agreement in form and
substance satisfactory to such Lender.
"PBGC" means the Pension Benefit Guaranty Corporation or any Governmental
Authority succeeding to the functions thereof.
"Pending Revolving Loans" means, at any time, the aggregate principal
amount of all Revolving Loans requested in any Notice of Borrowing received by
the Agent which have not yet been advanced.
"Pension Plan" means a pension plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA and Code Section 412 which any Borrower or ERISA
Affiliate of any Borrower sponsors or maintains.
"Permitted Acquisitions" means the acquisition by a Borrower of all or
substantially all of the assets of any Person or an operating business division
of any Person, the acquisition by a Borrower by merger of any Person, or the
purchase by a Borrower of a majority of the issued and outstanding voting stock
of any Person; provided that (i) no Event of Default
A-19
shall have occurred and be continuing at the time of such acquisition or
purchase or would result after giving effect thereto; (ii) Borrowers shall be in
compliance with the covenant contained in Section 7.22 as of the last day of the
fiscal quarter of the Borrowers immediately preceding the date such acquisition
or purchase is consummated after giving pro forma effect thereto; (iii)
Borrowers shall have obtained Bankruptcy Court approval therefor; and (iv) after
giving effect to any such acquisition or purchases, Borrowers shall have
Availability of at least $75 million.
"Permitted Intercompany Debt" means (a) unsecured Debt of any Borrower to
any other Borrower and (b) unsecured Debt of any Borrower to any Other
Subsidiary that is subordinated to the Obligations hereunder.
"Permitted Liens" means, as to any Borrower:
(a) Liens for taxes, assessments and other governmental charges not
delinquent or statutory Liens for taxes in an amount (not to exceed $1,000,000
in the aggregate for the Borrowers) provided that the payment of such taxes
which are due and payable is being contested in good faith and by appropriate
proceedings diligently pursued and as to which adequate financial reserves, to
the extent required by GAAP, have been established on the applicable Borrower's
books and records and a stay of enforcement of any such Lien is in effect;
(b) the Agent's Liens;
(c) Liens consisting of deposits made in the ordinary course of
business in connection with, or to secure payment of, obligations under worker's
compensation, unemployment insurance, social security and other similar laws, or
to secure the performance of bids, tenders or contracts (other than for the
repayment of Debt) or to secure indemnity, performance or other similar bonds
for the performance of bids, tenders or contracts (other than for the repayment
of Debt) or to secure statutory obligations (other than liens arising under
ERISA or Environmental Liens) or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds;
(d) Liens securing the claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other like Persons, provided that if any
such Lien arises from the nonpayment of such claims or demand when due, such
claims or demands shall not exceed $1,000,000 in the aggregate;
(e) Liens constituting encumbrances in the nature of reservations,
exceptions, encroachments, easements, rights of way, covenants running with the
land, and other similar title exceptions or encumbrances affecting any Real
Estate; provided that they do not in the aggregate materially detract from the
value of the Real Estate or materially interfere with its use in the ordinary
conduct of such Borrower's business;
(f) Liens arising from judgments and attachments in connection with
court proceedings provided that the attachment or enforcement of such Liens
would not result in an Event of Default hereunder and such Liens are being
contested in good faith by appropriate proceedings, adequate reserves have been
set aside and no material Property is subject to a material risk of loss or
forfeiture and the claims in respect of such Liens are fully covered by
A-20
insurance (subject to ordinary and customary deductibles) and a stay of
execution pending appeal or proceeding for review is in effect.
(g) Liens constituting a lease or sublease granted by any Borrower
prior to the date hereof to others in the ordinary course of business;
(h) Liens on any asset leased by any Borrower constituting the interest
of the lessor of such asset or secured by the interest of the lessor of such
asset;
(i) Liens existing on any asset (other than Accounts or Inventory or
proceeds thereof) prior to the acquisition thereof by any Borrower but only if
such Lien was not created in contemplation thereof and so long as the obligation
secured by such Lien is not in default and such Lien is and will remain confined
to the asset subject to it at the time such asset is acquired and to fixed
improvements thereafter erected on such asset if constituting real property;
(j) Liens constituting a renewal, extension or replacement of a Lien
constituting a Lien permitted under clause (k) below or clause (h) above, but
only, in the case of each such renewal, extension or replacement Lien, to the
extent that the principal amount of indebtedness secured by such Lien does not
exceed the principal amount of such indebtedness so secured at the time of the
extension, renewal or replacement, and that such renewal, extension or
replacement Lien is limited to all or part of the asset that was subject to the
Lien extended, renewed or replaced and to fixed improvements then or thereafter
erected on any such asset constituting real property;
(k) Liens, if any, in effect as of the Closing Date and described on
Schedule 6.7 securing Debt described in Schedule 6.7;
(l) Liens securing Capital Leases and purchase money debt permitted
pursuant to Section 7.13(c);
(m) Liens in favor of a Borrower; and
(n) Any other Lien so long as the amount of indebtedness secured by
such Lien and all other Liens not otherwise permitted hereunder does not exceed
$1,000,000 at any time outstanding in the aggregate for the Borrowers.
"Person" means any individual, sole proprietorship, partnership, limited
liability company, joint venture, trust, unincorporated organization,
association, corporation, Governmental Authority, or any other entity.
"Petition Date" means April 2, 2001.
"Plan" means an employee benefit plan (as defined in Section 3(3) of ERISA)
which any Borrower or any ERISA Affiliate of Borrower sponsors or maintains or
to which any Borrower or any ERISA Affiliate of Borrower makes, is making, or is
obligated to make contributions and includes any Pension Plan and Multi-employer
Plan.
A-21
"Proprietary Rights" means, with respect to any Person, all of such
Person's now owned and hereafter arising or acquired: licenses, franchises,
permits, patents, patent rights, copyrights, works which are the subject matter
of copyrights, trademarks, service marks, trade names, trade styles, patent,
trademark and service ▇▇▇▇ applications, and all licenses and rights related to
any of the foregoing, and all other rights under any of the foregoing, all
extensions, renewals, reissues, divisions, continuations, and
continuations-in-part of any of the foregoing, and all rights to ▇▇▇ for past,
present and future infringement of any of the foregoing.
"Pro Rata Share" means, with respect to a Lender, a fraction (expressed as
a percentage), the numerator of which is the amount of such Lender's Commitment
and the denominator of which is the sum of the amounts of all of the Lenders'
Commitments, or if no Commitments are outstanding, a fraction (expressed as a
percentage), the numerator of which is the amount of Obligations owed to such
Lender and the denominator of which is the aggregate amount of the Obligations
owed to the Lenders, in each case giving effect to a Lender's participation in
Non-Ratable Loans and Agent Advances.
"Real Estate" means, with respect to any Person, all of such Person's now
or hereafter owned or leased estates in real property, including, without
limitation, all fees, leaseholds and future interests, together with all of such
Person's now or hereafter owned or leased interests in the improvements thereon,
the fixtures attached thereto and the easements appurtenant thereto.
"Receivables Facility" means the facility providing for the sale of certain
accounts receivable and consummated pursuant to (i) that certain Purchase and
Sale Agreement dated as of December 22, 1998, between ▇. ▇. ▇▇▇▇▇ & Co.-▇▇▇▇.
and Receivables Purchasing, as amended, and (ii) that certain Receivables
Purchase Agreement dated as of December 22, 1998 among Grace Receivables
Purchasing, Inc., ▇. ▇. ▇▇▇▇▇ & Co.-▇▇▇▇., ▇. ▇. ▇▇▇▇▇ & Co., Blue Ridge Asset
Funding Corporation and Wachovia Bank, N.A., as amended.
"Receivables Purchasing" means Grace Receivables Purchasing, Inc., a Texas
corporation.
"Release" means a release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration of a Contaminant
into the indoor or outdoor environment or into or out of any Real Estate or
other property, including the movement of Contaminants through or in the air,
soil, surface water, groundwater or Real Estate or other property.
"Reportable Event" means, any of the events set forth in Section 4043(c) of
ERISA or the regulations thereunder, other than any such event for which the
30-day notice requirement under ERISA has been waived in regulations issued by
the PBGC.
"Required Lenders" means at any time Lenders whose Pro Rata Shares
aggregate more than 66-2/3%.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in
A-22
each case applicable to or binding upon the Person or any of its property or to
which the Person or any of its property is subject.
"Reserves" means reserves that limit the availability of credit hereunder,
consisting of reserves against Availability, Eligible Accounts, Eligible
Inventory or Eligible In-Transit Inventory, established by Agent from time to
time in Agent's reasonable credit judgment. Without limiting the generality of
the foregoing, the following reserves shall be deemed to be a reasonable
exercise of Agent's credit judgment: (a) Bank Product Reserves, (b) a reserve
for accrued, unpaid interest on the Obligations, (c) reserves for rent at leased
locations subject to statutory or contractual landlord liens, (d) Inventory
shrinkage, (e) Environmental Compliance Reserves, (g) customs charges, (h)
dilution, (i) a Reserve equal to the amount of the Carve-Out from time to time
outstanding, (j) warehousemen's or bailees' charges, and (k) a reserve in an
amount equal to $5,000,000 until such time as the Agent is satisfied that the
Liens basket of $5,000,000 set forth on Schedule 6.7 is not necessary (and the
parties hereto agree that the Borrower Representative may provide an updated
Schedule 6.7 solely to remove such basket and such updated Schedule 6.7 shall at
such all times thereafter constitute Schedule 6.7 hereto).
"Responsible Officer" means the chief executive officer, chief financial
officer, any vice president or the president of the Company, or any other
officer having substantially the same authority and responsibility; or, with
respect to compliance with financial covenants and the preparation of the
Borrowing Base Certificate, the chief financial officer or an assistant
treasurer of the Company, or any other officer having substantially the same
authority and responsibility.
"Restricted Investment" means, as to any Borrower, any acquisition of
property by such Person in exchange for cash or other property, whether in the
form of an acquisition of stock, debt, or other indebtedness or obligation, or
the purchase or acquisition of any other property, or a loan, advance, capital
contribution, or subscription, including in connection with the organization,
creation or acquisition of any Subsidiary (each an "Investment"), except the
following: (a) acquisitions of Equipment and other capital assets in the
ordinary course of business of such Person; (b) acquisitions of Inventory in the
ordinary course of business of such Person; (c) acquisitions of current assets
acquired in the ordinary course of business of such Person; (d) Investments in
Cash Equivalents; (e) Investments by any Borrower in any other Borrower, (f)
extensions of trade credit and prepaid expenses made in the ordinary course of
business, (g) (i) loans to officers of any Borrower in the ordinary course of
business, (ii) loans and advances to employees of any Borrower for travel,
entertainment and relocation expenses in the ordinary course of business and
(iii) loans by any Borrower to employees in connection with management incentive
plans, provided that the aggregate outstanding principal amount of all such
loans and advances made pursuant to this clause (g) shall not exceed $5,000,000
at any time; (h) loans, made while no Default or Event of Default has occurred
and is continuing, in an aggregate amount not to exceed $11,000,000 at any time
outstanding made to ART by ▇. ▇. ▇▇▇▇▇ & Co.-▇▇▇▇.; (i) loans, made while no
Default or Event of Default has occurred and is continuing, to The Separations
Group in an aggregate amount not to exceed $5,000,000 at any time outstanding,
as long as payment and performance of such loan is secured by a lien on
substantially all of the assets of The Separations Group pursuant to documents
in form and substance satisfactory to the Agent (and the Agent is satisfied that
the Agent has a first priority lien on the applicable Borrower's rights relating
to such loan and security interest);
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(j) Investments outstanding on the Closing Date and listed on Schedule A-1; (k)
Investments, made while no Default or Event of Default has occurred and is
continuing, not otherwise permitted hereunder by any Borrower in any Other
Subsidiary, provided that after giving effect to such Investments, the aggregate
then outstanding amount of all such Investments made pursuant to this clause (k)
subsequent to the Closing Date shall not exceed $15,000,000, including the value
of all Debt or other obligations (including, without limitation, Letters of
Credit hereunder) incurred for the benefit of or on behalf of all Other
Subsidiaries subsequent to the Closing Date; (l) Investments received in
connection with the collection of Accounts in the ordinary course of business;
(m) Investments received as consideration in connection with any asset sale or
other disposition of assets permitted hereunder, and (n) other Investments not
otherwise permitted hereunder made by any Borrower, provided that, after giving
effect thereto, the aggregate amount of all such Investments made at any time
after the Closing Date by all Borrowers under this clause (n) shall not exceed
$1,000,000 at any time outstanding.
"Restructuring Costs" means those restructuring costs (as determined in
accordance with GAAP) set forth in operating plans delivered from time to time
to the Agent and which operating plans are acceptable to the Agent, in its sole
discretion.
"Revolving Loans" has the meaning specified in Section 1.2 and includes
each Agent Advance and Non-Ratable Loan.
"Revolving Loan Note" and "Revolving Loan Notes" have the meanings
specified in Section 1.2(a)(ii).
"The Separations Group" means The Separations Group, a California
corporation.
"Settlement" and "Settlement Date" have the meanings specified in Section
12.15(a)(ii).
"Stated Termination Date" means April 1, 2003.
"Subsidiary" of a Person means any corporation, association, partnership,
limited liability company, joint venture or other business entity of which more
than fifty percent (50%) of the voting stock or other equity interests (in the
case of Persons other than corporations), is owned or controlled directly or
indirectly by the Person, or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly requires, references
herein to a "Subsidiary" refer to a Subsidiary of the Company.
"Supporting Letter of Credit" has the meaning set forth in Section 1.4
hereof.
"Supporting Obligations" means all supporting obligations as such term is
defined in the UCC.
"Syndication Fee" has the meaning specified in Section 2.4.
"Taxes" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent, such taxes (including
income taxes or franchise taxes) as are imposed on
A-24
or measured by the Agent's or each Lender's net income in any jurisdiction
(whether federal, state or local and including any political subdivision
thereof) under the laws of which such Lender or the Agent, as the case may be,
is organized or maintains a lending office.
"Termination Date" means the earliest to occur of (i) the Stated
Termination Date, (ii) the date the Total Facility is terminated either by the
Borrowers pursuant to Section 3.2 or by the Majority Lenders pursuant to Section
9.2, (iii) the date this Agreement is otherwise terminated for any reason
whatsoever pursuant to the terms of this Agreement and (iv) if the Final Order
has not been entered on or prior thereto, the date which is forty-five (45) days
after the Petition Date.
"Total Facility" has the meaning specified in Section 1.1.
"UCC" means the Uniform Commercial Code, as in effect from time to time, of
the State of New York or of any other state the laws of which are required as a
result thereof to be applied in connection with the issue of perfection of
security interests.
"Unfunded Pension Liability" means the excess of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan's assets, determined in accordance with the assumptions used under
Section 412(c) of the Code for determining whether the Pension Plan meets the
minimum funding standards of Section 412 of the Code for the applicable plan
year.
"Unused Letter of Credit Subfacility" means an amount equal to $150,000,000
minus the sum of (a) the aggregate undrawn amount of all outstanding Letters of
Credit plus, without duplication, (b) the aggregate unpaid reimbursement
obligations with respect to all Letters of Credit.
"Unused Line Fee" has the meaning specified in Section 2.5.
Accounting Terms. Any accounting term used in the Agreement shall have,
unless otherwise specifically provided herein, the meaning customarily given in
accordance with GAAP, and all financial computations hereunder shall be
computed, unless otherwise specifically provided herein, in accordance with GAAP
as consistently applied and using the same method for inventory valuation as
used in the preparation of the Financial Statements. If any change in generally
accepted accounting principles subsequent to the date of this Agreement is
material to either any Borrower or the Lenders for the purpose of determining
the Borrowers' compliance with any covenant contained in this Agreement, then
(A) such change shall not, without the consent of the Majority Lenders, if such
change makes such covenant less restrictive, or the Borrower Representative, if
such change makes such covenant more restrictive, be effective for the
calculation of such covenant unless and until an amendment pursuant to clause
(B) below with respect to such change and such covenant becomes effective, and
(B) the Borrowers and the Agent and the Lenders agree to enter into
negotiations, at the request of the Borrowers or the Representative Lenders, in
order to amend such covenant so as equitably to reflect such change with the
desired result that the criteria for evaluating the consolidated financial
condition of the Company and its consolidated Subsidiaries shall be the same
after such change as before such change.
A-25
Interpretive Provisions. (a) The meanings of defined terms are equally
applicable to the singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar words refer
to the Agreement as a whole and not to any particular provision of this
Agreement; and Subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified date to
a later specified date, the word "from" means "from and including," the words
"to" and "until" each mean "to but excluding" and the word "through" means "to
and including."
(iv) The word "or" is not exclusive.
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(e) The captions and headings of the Agreement and other Loan Documents
are for convenience of reference only and shall not affect the interpretation of
this Agreement.
(f) The Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
(g) For purposes of Section 9.1, a breach of a financial covenant
contained in Section 7.22 shall be deemed to have occurred as of any date of
determination thereof by the Agent or as of the last day of any specified
measuring period, regardless of when the Financial Statements reflecting such
breach are delivered to the Agent.
(h) The Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Borrowers
and the other parties, and are the products of all parties. Accordingly, they
shall not be construed against the Lenders or the Agent merely because of the
Agent's or Lenders' involvement in their preparation.
A-26
EXHIBIT A
FORM OF REVOLVING LOAN NOTE
New York, New York
$________________ ____________, ____
FOR VALUE RECEIVED, the undersigned (each, a "Borrower" and
collectively, the "Borrowers"), HEREBY JOINTLY AND SEVERALLY PROMISE TO PAY to
the order of ____________________________ (the "Lender"), at the offices of BANK
OF AMERICA, N.A., as Agent for the Lenders (the "Agent"), at its address at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place as the Agent
may designate from time to time in writing, in lawful money of the United States
of America and in immediately available funds, the amount of ___________________
DOLLARS AND __/100 CENTS ($________________) or, if less, the aggregate unpaid
amount of all Revolving Loans made to the undersigned under the "Loan and
Security Agreement" (as hereinafter defined). All capitalized terms used but not
otherwise defined herein have the meanings given to them in the Loan and
Security Agreement or in Annex A thereto.
This Revolving Loan Note is one of the Revolving Loan Notes
issued pursuant to that certain Post-Petition Loan and Security Agreement dated
as of April 1, 2001 by and among the Borrowers, the Agent, the Lender and the
other Persons signatory thereto from time to time as Lenders (including all
annexes, exhibits and schedules thereto, and as from time to time amended,
restated, supplemented or otherwise modified, the "Loan and Security
Agreement"), and is entitled to the benefit of the Loan and Security Agreement
and all of the other Loan Documents referred to therein. Reference is hereby
made to the Loan and Security Agreement for a statement of all of the terms and
conditions under which the Loans evidenced hereby are made and are to be repaid.
The date and amount of each Revolving Loan Borrowing made by the Lenders to the
Borrowers, the rates of interest applicable thereto and each payment made on
account of the principal thereof, shall be recorded by the Agent on its books;
provided that the failure of the Agent to make any such recordation shall not
affect the obligations of the Borrowers to make a payment when due of any amount
owing under the Loan and Security Agreement or this Revolving Loan Note in
respect of the Revolving Loan Borrowings made by the Lender to the Borrowers.
The principal amount of the indebtedness evidenced hereby
shall be payable in the amounts and on the dates specified in the Loan and
Security Agreement, the terms of which are hereby incorporated herein by
reference. Interest thereon shall be paid until such principal amount is paid in
full at such interest rates and at such times, and pursuant to such
calculations, as are specified in the Loan and Security Agreement.
Upon and after the occurrence and during the continuance of
any Event of Default, this Revolving Loan Note may, as provided in the Loan and
Security Agreement, and without demand, notice or legal process of any kind, be
declared, and immediately shall become, due and payable.
Time is of the essence of this Revolving Loan Note. Demand,
presentment, protest and notice of nonpayment and protest are hereby waived by
the Borrowers.
Except as provided in the Loan and Security Agreement, this
Revolving Loan Note may not be assigned by the Lender to any Person.
2
THIS REVOLVING LOAN NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND PERFORMED IN THAT STATE.
BORROWERS:
▇. ▇. ▇▇▇▇▇ & Co.
A-1 Bit & Tool Co., Inc.
Alewife Boston Ltd.
Alewife Land Corporation
Amicon, Inc.
CB Biomedical, Inc.
CCHP, Inc.
Coalgrace, Inc.
Coalgrace II, Inc.
Creative Food 'N Fun Company
Darex Puerto Rico, Inc.
Del Taco Restaurants, Inc.
Ecarg, Inc.
Five Alewife Boston Ltd.
G C Limited Partners I, Inc.
G C Management, Inc.
GEC Management Corporation
GN Holdings, Inc.
GPC Thomasville Corp.
Gloucester New Communities Company, Inc.
Grace A-B Inc.
Grace ▇-▇ ▇▇ Inc.
Grace Chemical Company of Cuba
Grace Culinary Systems, Inc.
Grace Drilling Company
Grace Energy Corporation
Grace Environmental, Inc.
Grace Europe, Inc.
Grace H-G Inc.
Grace ▇-▇ ▇▇ Inc.
Grace Hotel Services Corporation
Grace International Holdings, Inc.
Grace Offshore Company
Grace PAR Corporation
Grace Petroleum Libya Incorporated
Grace Tarpon Investors, Inc.
Grace Ventures Corp.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Inc.
▇. ▇. ▇▇▇▇▇ Capital Corporation
▇. ▇. ▇▇▇▇▇ & Co.-▇▇▇▇.
1
▇. ▇. ▇▇▇▇▇ Land Corporation
Gracoal, Inc.
Gracoal II, Inc.
Guanica-Caribe Land Development Corporation
Hanover Square Corporation
Homco International, Inc.
Kootenai Development Company
L B Realty, Inc.
Litigation Management, Inc.
Monolith Enterprises, Incorporated
Monroe Street, Inc.
MRA Holdings Corp.
MRA Intermedco, Inc.
MRA Staffing Systems, Inc.
Remedium Group, Inc.
Southern Oil, Resin & Fiberglass, Inc.
Water Street Corporation, each as a Debtor and a
Debtor-in-Possession
By: __________________________________________
Its Senior Vice President or Vice President
2
CC Partners, as a Debtor and Debtor-in-Possession
By: MRA Staffing Systems, Inc., a General Partner
By: __________________________________________
Its: _________________________________________
By: CCHP, Inc., a General Partner
By: __________________________________________
Its: _________________________________________
Axial Basin Rand Company, as a Debtor and
Debtor-in-Possession
By: Grace ▇-▇ ▇▇, Inc., a General Partner
By: __________________________________________
Its: _________________________________________
By: Grace A-B, Inc., a General Partner
By: __________________________________________
Its: _________________________________________
Hayden-Gulch West Coal Company, as a Debtor and
Debtor-in-Possession
By: Grace H-G, Inc., a General Partner
By: __________________________________________
Its: _________________________________________
By: Grace ▇-▇ ▇▇, Inc., a General Partner
By: __________________________________________
Its: _________________________________________
3
H-G Coal Company, as a Debtor and Debtor-in-Possession
By: Coalgrace, Inc., a General Partner
By: __________________________________________
Its: _________________________________________
By: Coalgrace II, Inc., a General Partner
By: __________________________________________
Its: _________________________________________
▇▇▇▇▇ and ▇▇▇▇, LLC, as a Debtor and Debtor-in-Possession
By: ▇. ▇. ▇▇▇▇▇ & Co.-Conn., its sole member
By: __________________________________________
Its: _________________________________________
4
EXHIBIT B
FORM OF BORROWING BASE CERTIFICATE
EXHIBIT C
FINANCIAL STATEMENTS
EXHIBIT D
NOTICE OF BORROWING
Date: ______________, 200_
To: Bank of America, N.A. as Agent for the Lenders who are parties to the
Post-Petition Loan and Security Agreement dated as of April 1, 2001 (as
extended, renewed, amended or restated from time to time, the "Loan and
Security Agreement") among ▇. ▇. ▇▇▇▇▇ & Co. and certain of its
Subsidiaries thereto, as
Borrowers, certain Lenders which are signatories thereto and Bank of
America, N.A., as Agent
Ladies and Gentlemen:
The undersigned, ▇. ▇. ▇▇▇▇▇ & Co. (the "Borrower Representative"),
refers to the Loan and Security Agreement, the terms defined therein being used
herein as therein defined, and hereby gives you notice irrevocably of the
Borrowing specified below:
1. The Business Day of the proposed Borrowing is _________, 200_.
2. The aggregate amount of the proposed Borrowing is $__________.
3. The Borrowing is to be comprised of $_______ of Base Rate and
$________ of LIBOR Rate Loans.
4. The duration of the Interest Period for the LIBOR Rate Loans,
if any, included in the Borrowing shall be _____ months.
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the proposed Borrowing, before
and after giving effect thereto and to the application of the proceeds
therefrom:
(a) The representations and warranties of the Borrowers contained in
the Loan and Security Agreement and the other Loan Documents are correct in all
material respects on and as of such date as though made on and as of such date,
other than any such representation or warranty which relates to a specified
prior date and except to the extent the Agent and the Lenders have been notified
in writing by the Borrower Representative that any representation or warranty is
not correct and the Majority Lenders have explicitly waived in writing
compliance with such representation or warranty;
(b) No Default or Event of Default has occurred and is continuing, or
would result from such proposed Borrowing; and
(c) The proposed Borrowing will not cause the aggregate principal
amount of all outstanding Revolving Loans plus the aggregate amount available
for drawing under all
1
outstanding Letters of Credit, to exceed the Borrowing Base, or the combined
Commitments of the Lenders.
▇. ▇. ▇▇▇▇▇ & CO.
By: _________________________________________
Title: ______________________________________
2
EXHIBIT E
NOTICE OF CONTINUATION/CONVERSION
Date:____________, 200_
To: Bank of America, N.A. as Agent for the Lenders to the Post-Petition
Loan and Security Agreement dated as of April 1, 2001 (as extended,
renewed, amended or restated from time to time, the "Loan and Security
Agreement") among ▇. ▇. ▇▇▇▇▇ & Co. and certain of its Subsidiaries
which are signatories thereto, as Borrowers, certain Lenders which are
signatories thereto and Bank of America, N.A., as Agent
Ladies and Gentlemen:
The undersigned, ▇. ▇. ▇▇▇▇▇ & Co. (the "Borrower Representative"), refers
to the Loan and Security Agreement, the terms defined therein being used herein
as therein defined, and hereby gives you notice irrevocably of the [conversion]
[continuation] of the Loans specified herein, that:
1. The Continuation/Conversion Date is _________, 200_.
2. The aggregate amount of the Loans to be [converted] [continued] is $ .
3. The Loans are to be [converted into] [continued as] [LIBOR Rate] [Base
Rate] Loans.
4. The duration of the Interest Period for the LIBOR Rate Loans included
in the [conversion] [continuation] shall be months.
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the proposed Continuation/Conversion Date,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) The representations and warranties of the Borrowers contained in
the Loan and Security Agreement and the other Loan Documents are correct in all
material respects on and as of such date as though made on and as of such date,
other than any such representation or warranty which relates to a specified
prior date and except to the extent the Agent and the Lenders have been notified
in writing by the Borrower Representative that any representation or warranty is
not correct and the Majority Lenders have explicitly waived in writing
compliance with such representation or warranty;
(b) Default or Event of Default has occurred and is continuing, or
would result from such proposed [conversion] [continuation]; and
1
(c) The proposed conversion-continuation will not cause the aggregate
principal amount of all outstanding Revolving Loans plus the aggregate amount
available for drawing under all outstanding Letters of Credit to exceed the
Borrowing Base.
▇. ▇. ▇▇▇▇▇ & CO.
By: _________________________________________
Title: ______________________________________
2
EXHIBIT H
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
Acceptance") dated as of ____________________, 200_ is made between
______________________________ (the "Assignor") and __________________________
(the "Assignee").
RECITALS
WHEREAS, the Assignor is party to that certain Post-Petition Loan and
Security Agreement dated as of April 1, 2001 (as amended, amended and restated,
modified, supplemented or renewed, the "Loan and Security Agreement") among ▇.
▇. ▇▇▇▇▇ & Co., a Delaware corporation (the "Company"), and certain Subsidiaries
of the Company which are signatory thereto (together with the Company, each a
"Borrower" and collectively "Borrowers"), the several financial institutions
from time to time party thereto (including the Assignor, the "Lenders"), and
Bank of America, N. A., as agent for the Lenders (the "Agent"). Any terms
defined in the Loan and Security Agreement and not defined in this Assignment
and Acceptance are used herein as defined in the Loan and Security Agreement;
WHEREAS, as provided under the Loan and Security Agreement, the Assignor
has committed to making Loans (the "Committed Loans") to the Borrowers in an
aggregate amount not to exceed $__________ (the "Commitment");
WHEREAS, the Assignor has made Committed Loans in the aggregate principal
amount of $__________ to the Borrowers;
WHEREAS, [the Assignor has acquired a participation in its pro rata share
of the Lenders' liabilities under Letters of Credit in an aggregate principal
amount of $____________ (the "L/C Obligations")] [no Letters of Credit are
outstanding under the Loan and Security Agreement]; and
WHEREAS, the Assignor wishes to assign to the Assignee [part of the] [all]
rights and obligations of the Assignor under the Loan and Security Agreement in
respect of its Commitment, together with a corresponding portion of each of its
outstanding Committed Loans and L/C Obligations, in an amount equal to
$__________ (the "Assigned Amount") on the terms and subject to the conditions
set forth herein and the Assignee wishes to accept assignment of such rights and
to assume such obligations from the Assignor on such terms and subject to such
conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers and assigns to the
Assignee, and (ii) the Assignee hereby
1
purchases, assumes and undertakes from the Assignor, without recourse and
without representation or warranty (except as provided in this Assignment and
Acceptance) __% (the "Assignee's Percentage Share") of (A) the Commitment, the
Committed Loans and the L/C Obligations of the Assignor and (B) all related
rights, benefits, obligations, liabilities and indemnities of the Assignor under
and in connection with the Loan and Security Agreement and the Loan Documents.
(b) With effect on and after the Effective Date (as defined in Section
5 hereof), the Assignee shall be a party to the Loan and Security Agreement and
succeed to all of the rights and be obligated to perform all of the obligations
of a Lender under the Loan and Security Agreement, including the requirements
concerning confidentiality and the payment of indemnification, with a Commitment
in an amount equal to the Assigned Amount. The Assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of the Loan and Security Agreement are required to be performed by it as a
Lender. It is the intent of the parties hereto that the Commitment of the
Assignor shall, as of the Effective Date, be reduced by an amount equal to the
Assigned Amount and the Assignor shall relinquish its rights and be released
from its obligations under the Loan and Security Agreement to the extent such
obligations have been assumed by the Assignee; provided, however, the Assignor
shall not relinquish its rights under Sections __ and __ of the Loan and
Security Agreement to the extent such rights relate to the time prior to the
Effective Date.
(c) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignee's Commitment will be $__________.
(d) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignor's Commitment will be $__________.
2. Payments.
(a) As consideration for the sale, assignment and transfer contemplated
in Section 1 hereof, the Assignee shall pay to the Assignor on the Effective
Date in immediately available funds an amount equal to $__________, representing
the Assignee's Pro Rata Share of the principal amount of all Committed Loans.
(b) The Assignee further agrees to pay to the Agent a processing fee in
the amount specified in Section 11.2(a) of the Loan and Security Agreement.
3. Reallocation of Payments.
Any interest, fees and other payments accrued to the Effective Date
with respect to the Commitment, and Committed Loans and L/C Obligations shall be
for the account of the Assignor. Any interest, fees and other payments accrued
on and after the Effective Date with respect to the Assigned Amount shall be for
the account of the Assignee. Each of the Assignor and the Assignee agrees that
it will hold in trust for the other party any interest, fees and other amounts
which it may receive to which the other party is entitled pursuant to the
preceding sentence and pay to the other party any such amounts which it may
receive promptly upon receipt.
2
4. Independent Credit Decision.
The Assignee (a) acknowledges that it has received a copy of the Loan
and Security Agreement and the Schedules and Exhibits thereto, together with
copies of the most recent financial statements of the Company and its
Subsidiaries, all applicable materials filed with the Bankruptcy Court and all
applicable orders relating to the Bankruptcy Cases as it has deemed appropriate,
and such other documents and information as it has deemed appropriate to make
its own credit and legal analysis and decision to enter into this Assignment and
Acceptance; and (b) agrees that it will, independently and without reliance upon
the Assignor, the Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit and legal decisions in taking or not taking action under the Loan and
Security Agreement.
5. Effective Date; Notices.
(a) As between the Assignor and the Assignee, the effective date for this
Assignment and Acceptance shall be __________, 200_ (the "Effective Date");
provided that the following conditions precedent have been satisfied on or
before the Effective Date:
(i) this Assignment and Acceptance shall be executed and delivered by
the Assignor and the Assignee;
[(ii) the consent of the Agent required for an effective assignment of
the Assigned Amount by the Assignor to the Assignee shall have been duly
obtained and shall be in full force and effect as of the Effective Date;]
(iii) the Assignee shall pay to the Assignor all amounts due to the
Assignor under this Assignment and Acceptance;
[(iv) the Assignee shall have complied with Section 11.2 of the Loan
and Security Agreement (if applicable);]
(v) the processing fee referred to in Section 2(b) hereof and in
Section 11.2(a) of the Loan and Security Agreement shall have been paid to
the Agent; and
(b) Promptly following the execution of this Assignment and Acceptance, the
Assignor shall deliver to the Borrower Representative and the Agent for
acknowledgment by the Agent, a Notice of Assignment in the form attached hereto
as Schedule 1.
6. [Agent. [INCLUDE ONLY IF ASSIGNOR IS AGENT]
(a) The Assignee hereby appoints and authorizes the Assignor to take such
action as agent on its behalf and to exercise such powers under the Loan and
Security Agreement as are delegated to the Agent by the Lenders pursuant to the
terms of the Loan and Security Agreement.
(b) The Assignee shall assume no duties or obligations held by the Assignor
in its capacity as Agent under the Loan and Security Agreement.]
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7. Withholding Tax.
The Assignee (a) represents and warrants to the Lender, the Agent and the
Borrowers that under applicable law and treaties no tax will be required to be
withheld by the Lender with respect to any payments to be made to the Assignee
hereunder, (b) agrees to furnish (if it is organized under the laws of any
jurisdiction other than the United States or any State thereof) to the Agent and
the Borrowers prior to the time that the Agent or Borrowers is required to make
any payment of principal, interest or fees hereunder, duplicate executed
originals of either U.S. Internal Revenue Service Form W-8ECI or U.S. Internal
Revenue Service Form W-8BEN (wherein the Assignee claims entitlement to the
benefits of a tax treaty that provides for a complete exemption from U.S.
federal income withholding tax on all payments hereunder) and agrees to provide
new Forms W-8ECI or W-8BEN upon the expiration of any previously delivered form
or comparable statements in accordance with applicable U.S. law and regulations
and amendments thereto, duly executed and completed by the Assignee, and (c)
agrees to comply with all applicable U.S. laws and regulations with regard to
such withholding tax exemption.
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any Lien or other adverse claim; (ii) it is duly
organized and existing and it has the full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Loan and Security Agreement, no further action by, or notice to, or filing
with, any Person is required of it for such execution, delivery or performance;
and (iv) this Assignment and Acceptance has been duly executed and delivered by
it and constitutes the legal, valid and binding obligation of the Assignor,
enforceable against the Assignor in accordance with the terms hereof, subject,
as to enforcement, to bankruptcy, insolvency, moratorium, reorganization and
other laws of general application relating to or affecting creditors' rights and
to general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan and Security Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Loan and Security Agreement or any other instrument or document furnished
pursuant thereto. The Assignor makes no representation or warranty in connection
with, and assumes no responsibility with respect to, the solvency, financial
condition or statements of the Borrowers, or the performance or observance by
the Borrowers, of any of its respective obligations under the Loan and Security
Agreement or any other instrument or document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly organized
and existing and it has full power and authority to take, and has taken, all
action necessary to execute and deliver this Assignment and Acceptance and any
other documents required or permitted to
4
be executed or delivered by it in connection with this Assignment and
Acceptance, and to fulfill its obligations hereunder; (ii) no notices to, or
consents, authorizations or approvals of, any Person are required (other than
any already given or obtained) for its due execution, delivery and performance
of this Assignment and Acceptance; and apart from any agreements or undertakings
or filings required by the Loan and Security Agreement, no further action by, or
notice to, or filing with, any Person is required of it for such execution,
delivery or performance; (iii) this Assignment and Acceptance has been duly
executed and delivered by it and constitutes the legal, valid and binding
obligation of the Assignee, enforceable against the Assignee in accordance with
the terms hereof, subject, as to enforcement, to bankruptcy, insolvency,
moratorium, reorganization and other laws of general application relating to or
affecting creditors' rights and to general equitable principles; [and (iv) it is
an Eligible Assignee.]
9. Further Assurances.
The Assignor and the Assignee each hereby agree to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Assignment and
Acceptance, including the delivery of any notices or other documents or
instruments to the Borrowers or the Agent, which may be required in connection
with the assignment and assumption contemplated hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No failure or
delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance shall be without prejudice to any
rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any set-off or
counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution and
performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. The Assignor and the
Assignee each irrevocably submits to the non-exclusive jurisdiction of any State
or Federal court sitting in [New York, New York] over any suit, action or
proceeding arising out of or relating to this Assignment and Acceptance and
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such State or Federal court. Each party to this
Assignment and Acceptance hereby irrevocably waives, to the fullest extent it
may effectively do so, the defense of an inconvenient forum to the maintenance
of such action or proceeding.
5
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH
THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY RELATED DOCUMENTS AND
AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR STATEMENTS (WHETHER
ORAL OR WRITTEN).
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By: __________________________________
Title: _______________________________
Address: _____________________________
[ASSIGNEE]
By: __________________________________
Title: _______________________________
Address: _____________________________
6
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_______________, 200_
Bank of America, N.A.
_______________________________
_______________________________
Attn: _________________________
Re: [Name and Address of Borrower]
Ladies and Gentlemen:
We refer to the Loan and Security Agreement dated as of April 1, 2001 (as
amended, amended and restated, modified, supplemented or renewed from time to
time the "Loan and Security Agreement") among ▇. ▇. ▇▇▇▇▇ & Co. and certain of
its Subsidiaries (collectively, the "Borrowers"), the Lenders referred to
therein and Bank of America, N. A., as agent for the Lenders (the "Agent").
Terms defined in the Loan and Security Agreement are used herein as therein
defined.
1. We hereby give you notice of, and request your consent to, the
assignment by __________________ (the "Assignor") to _______________ (the
"Assignee") of _____% of the right, title and interest of the Assignor in and to
the Loan and Security Agreement (including the right, title and interest of the
Assignor in and to the Commitments of the Assignor, all outstanding Loans made
by the Assignor and the Assignor's participation in the Letters of Credit
pursuant to the Assignment and Acceptance Agreement attached hereto (the
"Assignment and Acceptance"). We understand and agree that the Assignor's
Commitment, as of , 200 , is $ ___________, the aggregate amount of its
outstanding Loans is $_____________, and its participation in L/C Obligations is
$_____________.
2. The Assignee agrees that, upon receiving the consent of the Agent to
such assignment, the Assignee will be bound by the terms of the Loan and
Security Agreement as fully and to the same extent as if the Assignee were the
Lender originally holding such interest in the Loan and Security Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name: _____________________________
Address: ___________________________________
___________________________________
___________________________________
Attention: _________________________________
Telephone: (___) __________________________
Telecopier: (___) _________________________
Telex (Answerback): ________________________
(B) Payment Instructions:
Account No.: _______________________________
At: _______________________________
_______________________________
_______________________________
Reference: _______________________________
Attention: _______________________________
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment and
Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Notice
of Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By: __________________________________
Title: _______________________________
[NAME OF ASSIGNEE]
By: __________________________________
Title: _______________________________
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
Bank of America, N. A.
as Agent
By: __________________________________
Title: _______________________________