EXHIBIT 10(a)
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CREDIT AGREEMENT
Dated as of December 21, 2001
among
TITAN DISTRIBUTION, INC.,
TITAN INTERNATIONAL, INC.,
TITAN INVESTMENT CORPORATION,
TITAN TIRE CORPORATION,
TITAN TIRE CORPORATION OF NATCHEZ,
TITAN TIRE CORPORATION OF TEXAS,
TITAN WHEEL CORPORATION OF ILLINOIS,
TITAN WHEEL CORPORATION OF IOWA,
TITAN WHEEL CORPORATION OF SOUTH CAROLINA, and
TITAN WHEEL CORPORATION OF VIRGINIA
as Borrowers,
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
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TABLE OF CONTENTS
Page
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1. AMOUNT AND TERMS OF CREDIT....................................................................................2
1.1 Credit Facilities.........................................................................................2
1.2 Intentionally Omitted.....................................................................................3
1.3 Prepayments...............................................................................................3
1.4 Use of Proceeds...........................................................................................5
1.5 Interest and Applicable Margins...........................................................................5
1.6 Intentionally omitted.....................................................................................7
1.7 Intentionally omitted.....................................................................................7
1.8 Cash Management Systems...................................................................................7
1.9 Fees......................................................................................................7
1.10 Receipt of Payments......................................................................................8
1.11 Application and Allocation of Payments...................................................................8
1.12 Loan Account and Accounting..............................................................................8
1.13 Indemnity................................................................................................9
1.14 Access...................................................................................................9
1.15 Taxes...................................................................................................10
1.16 Capital Adequacy; Increased Costs; Illegality...........................................................11
1.17 Single Loan.............................................................................................12
2. CONDITIONS PRECEDENT.........................................................................................12
2.1 Conditions to the Initial Loans..........................................................................12
2.2 Further Conditions to Each Loan..........................................................................13
3. REPRESENTATIONS AND WARRANTIES...............................................................................14
3.1 Corporate Existence; Compliance with Law.................................................................14
3.2 Executive Offices; FEIN; State Organizational Number; Legal Name.........................................14
3.3 Corporate Power, Authorization, Enforceable Obligations..................................................14
3.4 Financial Statements and Projections.....................................................................15
3.5 Material Adverse Effect..................................................................................16
3.6 Ownership of Property; Liens.............................................................................16
3.7 Labor Matters............................................................................................17
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness................................17
3.9 Government Regulation....................................................................................17
3.10 Margin Regulations......................................................................................17
3.11 Taxes...................................................................................................18
3.12 ERISA...................................................................................................18
3.13 No Litigation...........................................................................................19
3.14 Brokers.................................................................................................19
3.15 Intellectual Property...................................................................................19
3.16 Full Disclosure.........................................................................................19
3.17 Environmental Matters...................................................................................19
3.18 Insurance...............................................................................................20
3.19 Deposit and Disbursement Accounts.......................................................................20
3.20 Government Contracts....................................................................................20
3.21 Customer and Trade Relations............................................................................20
3.22 Agreements and Other Documents..........................................................................20
3.23 Solvency................................................................................................21
3.24 Subordinated Debt.......................................................................................21
4. FINANCIAL STATEMENTS AND INFORMATION.........................................................................21
4.1 Reports and Notices......................................................................................21
5. AFFIRMATIVE COVENANTS........................................................................................22
5.1 Maintenance of Existence and Conduct of Business.........................................................22
5.2 Payment of Obligations...................................................................................22
5.3 Books and Records........................................................................................23
5.4 Insurance; Damage to or Destruction of Collateral........................................................23
5.5 Compliance with Laws.....................................................................................25
5.6 Supplemental Disclosure..................................................................................25
5.7 Intellectual Property....................................................................................25
5.8 Environmental Matters....................................................................................25
5.9 Landlords' Agreements, Mortgagee Agreements and Bailee Letters...........................................26
5.10 Further Assurances......................................................................................26
6. NEGATIVE COVENANTS...........................................................................................27
6.1 Mergers, Subsidiaries, Etc...............................................................................27
6.2 Investments; Loans and Advances..........................................................................27
6.3 Indebtedness.............................................................................................28
6.4 Employee Loans and Affiliate Transactions................................................................29
6.5 Capital Structure and Business...........................................................................29
6.6 Guaranteed Indebtedness..................................................................................30
6.7 Liens....................................................................................................30
6.8 Sale of Stock and Assets.................................................................................30
6.9 ERISA....................................................................................................31
6.10 Financial Covenants.....................................................................................31
6.12 Sale-Leasebacks.........................................................................................31
6.13 Cancellation of Indebtedness............................................................................31
6.14 Restricted Payments.....................................................................................31
6.15 Change of Corporate Name or Location; Change of Fiscal Year.............................................31
6.16 No Impairment of Intercompany Transfers.................................................................32
6.17 No Speculative Transactions.............................................................................32
6.18 Leases..................................................................................................32
6.19 Changes Relating to Subordinated Debt...................................................................32
6.20 Credit Parties Other than Borrowers.....................................................................32
7. TERM.........................................................................................................32
7.1 Termination..............................................................................................32
7.2 Survival of Obligations Upon Termination of Financing Arrangements.......................................33
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES.......................................................................33
8.1 Events of Default........................................................................................33
8.2 Remedies.................................................................................................35
8.3 Waivers by Credit Parties................................................................................36
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT..........................................................36
9.1 Assignment and Participations............................................................................36
9.2 Appointment of Agent and Revolving Credit Agent..........................................................38
9.3 Agent's Reliance, Etc....................................................................................38
9.4 GE Capital and Affiliates................................................................................39
9.5 Lender Credit Decision...................................................................................39
9.6 Indemnification..........................................................................................39
9.7 Successor Agent..........................................................................................40
9.8 Setoff and Sharing of Payments...........................................................................40
9.9 Advances; Payments; Non-Funding Lenders; Information; Actions in Concert.................................41
10. SUCCESSORS AND ASSIGNS......................................................................................42
10.1 Successors and Assigns..................................................................................42
11. MISCELLANEOUS...............................................................................................42
11.1 Complete Agreement; Modification of Agreement...........................................................42
11.2 Amendments and Waivers..................................................................................42
11.3 Fees and Expenses.......................................................................................44
11.4 No Waiver...............................................................................................45
11.5 Remedies................................................................................................45
11.6 Severability............................................................................................45
11.7 Conflict of Terms.......................................................................................46
11.8 Confidentiality.........................................................................................46
11.9 GOVERNING LAW...........................................................................................46
11.10 Notices................................................................................................47
11.11 Section Titles.........................................................................................47
11.12 Counterparts...........................................................................................47
11.13 WAIVER OF JURY TRIAL...................................................................................48
11.14 Press Releases.........................................................................................48
11.15 Reinstatement..........................................................................................48
11.16 Advice of Counsel......................................................................................48
11.17 No Strict Construction.................................................................................49
12. CROSS-GUARANTY..............................................................................................49
12.1 Cross-Guaranty..........................................................................................49
12.2 Waivers by Borrowers....................................................................................49
12.3 Benefit of Guaranty.....................................................................................50
12.4 Subordination of Subrogation, Etc.......................................................................50
12.5 Election of Remedies....................................................................................50
12.6 Limitation..............................................................................................50
12.7 Contribution with Respect to Guaranty Obligations.......................................................51
12.8 Liability Cumulative....................................................................................52
12.9 Subordination...........................................................................................52
CREDIT AGREEMENT, dated as of December 21, 2001 among TITAN
DISTRIBUTION, INC., an Illinois corporation ("Distribution"), TITAN
INTERNATIONAL, INC., an Illinois corporation ("International"), TITAN INVESTMENT
CORPORATION, an Illinois corporation ("Investment"), TITAN TIRE CORPORATION, an
Illinois corporation ("TTC"), TITAN TIRE CORPORATION OF NATCHEZ, a Mississippi
corporation ("TTC of Natchez"), TITAN TIRE CORPORATION OF TEXAS, a Texas
corporation ("TTC of Texas"), TITAN WHEEL CORPORATION OF ILLINOIS, an Illinois
corporation ("TWC of Illinois"), TITAN WHEEL CORPORATION OF IOWA, an Iowa
corporation ("TWC of Iowa"), TITAN WHEEL CORPORATION OF SOUTH CAROLINA, a South
Carolina corporation ("TWC of South Carolina"), and TITAN WHEEL CORPORATION OF
VIRGINIA, a Virginia corporation ("TWC of Virginia"; Distribution,
International, Investment, TTC, TTC of Natchez, TTC of Texas, TWC of Illinois,
TWC of Iowa, TWC of South Carolina and TWC of Virginia, are sometimes
collectively referred to herein as the "Borrowers" and individually as a
"Borrower"); the other Credit Parties signatory hereto; GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation (in its individual capacity, "GE Capital"),
for itself, as Lender, and as Agent for Lenders, and the other Lenders signatory
hereto from time to time.
RECITALS
WHEREAS, Borrowers desire that Lenders extend term credit facilities to
Borrowers of up to Ninety Nine Million Dollars ($99,000,000) in the aggregate
for the purpose of refinancing certain indebtedness of Borrowers and to provide
(a) working capital financing for Borrowers, and (b) funds for other general
corporate purposes of Borrowers; and for these purposes, Lenders are willing to
make certain loans and other extensions of credit to Borrowers of up to such
amount upon the terms and conditions set forth herein; and
WHEREAS, Borrowers desire to secure all of their obligations under the
Loan Documents by granting to Agent, for the benefit of Agent and Lenders, a
security interest in and lien upon all of their existing and after-acquired
personal and real property; and
WHEREAS, capitalized terms used in this Agreement shall have the
meanings ascribed to them in Annex A. All Annexes, Disclosure Schedules,
Exhibits and other attachments (collectively, "Appendices") hereto, or expressly
identified to this Agreement, are incorporated herein by reference, and taken
together, shall constitute but a single agreement. These Recitals shall be
construed as part of the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1. Credit Facilities.
(a) Intentionally omitted.
(b) Term Loan.
(i) Subject to the terms and conditions hereof, each
Term Lender, by its acceptance hereof, severally agrees to make a term
loan on the Closing Date to Borrowers (the "Term Loan") in the original
principal amount of its Term Loan Commitment. The obligations of each
Term Lender hereunder shall be several and not joint. Each such Term
Loan shall be evidenced by promissory notes substantially in the form
of Exhibit 1.1(b)(i) (each a "Term Note" and collectively the "Term
Notes"), and Borrowers shall execute and deliver the Term Notes to the
applicable Term Lenders. The Term Notes shall represent the obligation
of Borrowers to pay the amount of the applicable Term Lender's Term
Loan Commitment to Borrowers, together with interest thereon as
prescribed in Section 1.5. The Loans from all of Lenders shall be made
concurrently and in a single drawing on the Closing Date.
(ii) Borrowers shall pay the principal amount of the
Term Notes in twenty (20) consecutive quarterly installments on the
first day of January, April, July and October of each year, commencing
April 1, 2002, as follows:
Payment Date Installment Amount
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April 1, 2002 $825,000
July 1, 2002 $825,000
October 1, 2002 $825,000
January 1, 2003 $825,000
April 1, 2003 $1,650,000
July 1, 2003 $1,650,000
October 1, 2003 $1,650,000
January 1, 2004 $1,650,000
April 1, 2004 $2,475,000
July 1, 2004 $2,475,000
October 1, 2004 $2,475,000
January 1, 2005 $2,475,000
April 1, 2005 $3,300,000
July 1, 2005 $3,300,000
October 1, 2005 $3,300,000
January 1, 2006 $3,300,000
April 1, 2006 $4,125,000
July 1, 2006 $4,125,000
October 1, 2006 $4,125,000
December 20, 2006 $53,625,000
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(iii) Notwithstanding the foregoing, the aggregate
outstanding principal balance of the Term Notes shall be due and
payable in full in immediately available funds on the Commitment
Termination Date, if not sooner paid in full.
(iv) Each payment of principal with respect to the
Term Notes shall be paid to Agent for the ratable benefit of each Term
Lender, ratably in proportion to each such Term Lender's respective
Term Loan Commitment. Any payment by Borrowers to Agent for the account
of Lenders in accordance with the terms hereof shall be applied to the
Obligations as set forth herein.
(c) Intentionally Omitted.
(d) Reliance on Notices; Appointment of Borrower
Representative. Agent shall be entitled to rely upon, and shall be
fully protected in relying upon, any notice believed by Agent to be
genuine. Agent may assume that each Person executing and delivering
such a notice was duly authorized, unless the responsible individual
acting thereon for Agent has actual knowledge to the contrary. Each
Borrower hereby designates International as its representative and
agent on its behalf for the purposes of giving instructions with
respect to the disbursement of the proceeds of the Loans and 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. Borrower Representative hereby accepts such
appointment. Agent and each Lender may regard any notice or other
communication pursuant to any Loan Document from 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 hereunder to 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 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.
1.2. Intentionally Omitted.
1.3. Prepayments.
(a) Voluntary Prepayments. Borrowers may at any time on at
least five (5) days' prior written notice by Borrower Representative to Agent
voluntarily prepay all or part of the Term Loan; provided that (x) any such
prepayments shall be in a minimum amount of $500,000 and integral multiples of
$250,000 in excess of such amount, and (y) any such prepayment shall be made
only on the first day of a calendar month. Any such voluntary prepayment of the
Term Loan which exceeds, in any Fiscal Year, an amount equal to the aggregate
amount of the scheduled principal payments on the Term Loan due during such
Fiscal Year must be accompanied by the payment of the fee required by Section
1.9(c), if any. Any partial prepayments of the Term Loan shall be applied to
prepay the scheduled installments of the Term Loan in inverse order of maturity.
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(b) Mandatory Prepayments.
(i) Intentionally omitted.
(ii) Except as set forth in clause (b)(v) below,
immediately upon receipt by any Credit Party of proceeds of any asset
disposition (including condemnation proceeds, but excluding proceeds of
asset dispositions permitted by Section 6.8(a) and (b), and Section
6.8(c) to the extent that such disposition takes place before July 1,
2002) or any sale of Stock of any Subsidiary of any Credit Party,
Borrowers shall prepay the Loans in an amount equal to all such
proceeds, net of (A) commissions and other reasonable and customary
transaction costs, fees and expenses properly attributable to such
transaction and payable by Borrowers 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 Encumbrances hereunder), if any, and (D) an appropriate
reserve for income taxes in accordance with GAAP in connection
therewith (the "Net Proceeds). The Credit Parties are not required to
make any mandatory prepayment of the Loans with respect to an asset
disposition authorized by Section 6.8(a). To the extent that any Credit
Party makes any disposition of assets permitted by Section 6.8(c) prior
to July 1, 2002, such Credit Party shall prepay the Loans in an amount
equal to the first $9,000,000 of Net Proceeds realized in connection
with such disposition. Any such prepayment shall be applied in
accordance with clause (c) below.
(iii) Except as set forth in clause (b)(v) below, if
any Borrower sells or issues any Stock or issues any Indebtedness
(other than the Obligations), no later than the Business Day following
the date of receipt of the cash proceeds thereof, the selling or
issuing Borrower shall prepay the Loans in an amount equal to all Net
Proceeds thereof. Any such prepayment shall be applied in accordance
with clause (c) below.
(iv) Immediately upon receipt by any Credit Party of
cash proceeds of any asset disposition permitted by Section 6.8(b),
Borrowers shall prepay the Loans in an amount equal to the Orderly
Liquidation Value of all such assets disposed multiplied by .963.
(v) If any Credit Party sells the stock of any
Foreign Subsidiary, no later than the Business Day following the date
of receipt of the cash proceeds thereof, the selling Credit Party shall
prepay the Loans in an amount equal to fifty percent (50%) of the
amount equal to all Net Proceeds thereof.
(c) Application of Certain Mandatory Prepayments. Any
prepayments made by any Credit Party pursuant to clauses (b)(ii),
(b)(iii), (b)(iv) or (b)(v) above shall be applied as follows: first,
to Prepayment Fees, other Fees and reimbursable expenses of Agent then
due and payable pursuant to any of the Loan Documents; second, to
interest then due and payable on the Term Loan; and last, to prepay the
scheduled installments of the Term Loan in inverse order of maturity
(provided that, any prepayment made pursuant to the penultimate
sentence of Section 1.3(b)(ii) shall be applied to all remaining
scheduled installments of the Term Loan on a pro rata basis), until
such Loan shall have been prepaid in full.
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(d) Application of Prepayments from Insurance Proceeds.
Prepayments from insurance proceeds in accordance with Section 5.4(c)
shall be applied to all remaining scheduled installments of the Term
Loan on a pro rata basis.
(e) Nothing in this Section 1.3 shall be construed to
constitute Agent's or any Lender's consent to any transaction referred
to in clauses (b)(ii), (b)(iii), (b)(iv)or (b)(v) above which is not
permitted by other provisions of this Agreement or the other Loan
Documents.
1.4. Use of Proceeds. Borrowers shall utilize the proceeds of the Term
Loan solely for the Refinancing (and to pay any related transaction expenses)
and for the financing of Borrowers' ordinary working capital and general
corporate needs (but excluding in any event the making of any Restricted Payment
not specifically permitted by Section 6.14). Disclosure Schedule (1.4) contains
a description of Borrowers' sources and uses of funds as of the Closing Date,
including Loans to be made or incurred on that date, and a funds flow memorandum
detailing how funds from each source are to be transferred to particular uses.
To the extent that Borrowers use the proceeds of the Loans to purchase
Collateral, Borrowers' repayment of the Loans shall apply on a "first in, first
out" basis so that the portion of the Loans used to purchase a particular item
of Collateral shall be paid in the chronological order that Borrowers purchased
the Collateral.
1.5. Interest and Applicable Margins.
(a) Borrowers shall pay interest to Agent for the ratable
benefit of Lenders on the outstanding principal balance on the Term
Notes, in arrears on each applicable Interest Payment Date, commencing
January 1, 2002, at the applicable LIBOR Rate plus the Applicable LIBOR
Margin per annum. Through December 31, 2002, the Applicable LIBOR
Margin will be 4.50%. From January 1, 2003 through the Termination Date
the Applicable LIBOR Margin shall be determined according to the
following grid:
APPLICABLE LIBOR TRAILING 12 MONTH
MARGIN EBITDA
-------------------------------------------------- -------------------------------------------------
4.50% <$25,000,000
4.25% > $25,000,000 and < $35,000,000
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4.00% >$35,000,000
All adjustments, if any, in the Applicable LIBOR Margin beginning
January 1, 2003 and thereafter, will be implemented quarterly on a
prospective basis, for each calendar month thereafter until again
readjusted based upon the EBITDA for the four (4) immediate calendar
quarters just ended, commencing at least five (5) days after the date
of delivery to Agent of the quarterly unaudited or annual audited (as
applicable) Financial Statements of Borrowers evidencing the need for
an adjustment with such new Applicable LIBOR Margin to continue in
effect until the effectiveness of the next redetermination thereof.
Concurrently with the delivery of those Financial Statements, Borrower
Representative shall deliver to Agent a certificate, signed by its
Financial Officer, setting forth in reasonable detail the basis for the
continuance of, or any change in, the Applicable LIBOR Margin. Failure
to timely deliver such Financial Statements shall, in addition to
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any other remedy provided for in this Agreement, result in an increase
in the Applicable LIBOR Margin to the highest level set forth in the
foregoing grid, until the first day of the first calendar month
following the delivery of those Financial Statements demonstrating that
such an increase is not required. If a Default or Event of Default
shall have occurred or be continuing at the time any reduction in the
Applicable LIBOR Margin is to be implemented, that reduction shall be
deferred until the date such Default or Event of Default is waived or
cured.
(b) If any payment on any Loan becomes due and payable on a
day other than a Business Day, the maturity thereof will be extended to
the next succeeding Business Day and, with respect to payments of
principal, interest thereon shall be payable at the then applicable
rate during such extension.
(c) All computations of Fees calculated on a per annum basis
and interest shall be made by Agent on the basis of a three hundred
sixty (360) day year, in each case for the actual number of days
occurring in the period for which such interest and Fees are payable.
Each determination by Agent of an interest rate and Fees hereunder
shall be conclusive, absent manifest error. Agent shall use reasonable
efforts to notify Borrower Representative by mail or facsimile of the
amount and calculation of each interest payment at least three (3) days
prior to the applicable Interest Payment Date, but in no event shall
such notification be a condition to Borrowers' obligation to make any
payment hereunder.
(d) So long as an Event of Default shall have occurred and be
continuing under Section 8.1(a), (h) or (i) or so long as any other
Default or Event of Default shall have occurred and be continuing and
at the election of Agent (or upon the written request of Requisite
Lenders) confirmed by written notice from Agent to Borrower
Representative, the interest rates applicable to the Loans shall be
increased by two percent (2%) per annum above the rates of interest
otherwise applicable hereunder ("Default Rate"), and all outstanding
Obligations shall bear interest at the Default Rate applicable to such
Obligations. Interest at the Default Rate shall accrue from the initial
date of such Default or Event of Default until that Default or Event of
Default is cured or waived and shall be payable upon demand.
(e) Notwithstanding anything to the contrary set forth in this
Section 1.5, if a court of competent jurisdiction determines in a final
order that the rate of interest payable hereunder exceeds the highest
rate of interest permissible under law (the "Maximum Lawful Rate"),
then so long as the Maximum Lawful Rate would be so exceeded, the rate
of interest payable hereunder shall be equal to the Maximum Lawful
Rate; provided, however, that if at any time thereafter the rate of
interest payable hereunder is less than the Maximum Lawful Rate,
Borrowers shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Agent, on
behalf of Lenders, is equal to the total interest which would have been
received had the interest rate payable hereunder been (but for the
operation of this paragraph) the interest rate payable since the
Closing Date as otherwise provided in this Agreement. Thereafter,
interest hereunder shall be paid at the rate(s) of interest and in the
manner provided in
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Sections 1.5(a) through (d) above, unless and until the rate of
interest again exceeds the Maximum Lawful Rate, and at that time this
paragraph shall again apply. If, prior to the entry of such final
order, Borrowers shall pay any interest in excess of such Maximum
Lawful Rate, then the excess of such payment over the Maximum Lawful
Rate shall be applied by Agent to reduce the outstanding principal
balance of the Loans without any prepayment premium or penalty. In no
event shall the total interest received by any Lender pursuant to the
terms hereof exceed the amount which such Lender could lawfully have
received had the interest due hereunder been calculated for the full
term hereof at the Maximum Lawful Rate. If the Maximum Lawful Rate is
calculated pursuant to this paragraph, such interest shall be
calculated at a daily rate equal to the Maximum Lawful Rate divided by
the number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this Section 1.5(e), a court of
competent jurisdiction shall finally determine that a Lender has
received interest hereunder in excess of the Maximum Lawful Rate, Agent
shall, to the extent permitted by applicable law, promptly apply such
excess in the order specified in Section 1.11 and thereafter shall
refund any excess to Borrowers or as a court of competent jurisdiction
may otherwise order.
1.6. Intentionally omitted.
1.7. Intentionally omitted.
1.8. Cash Management Systems. On or prior to the Closing Date,
Borrowers will establish and will maintain until the Termination Date, the cash
management systems described on Annex C (the "Cash Management Systems").
1.9. Fees.
(a) Borrowers shall pay to GE Capital, individually, the Fees
specified in that certain fee letter of even date herewith among
Borrowers and GE Capital (the "GE Capital Fee Letter"), at the times
specified for payment therein.
(b) Intentionally omitted.
(c) Except as set forth in Section 1.3(a), if Borrowers prepay
all or any portion of the Term Loan prior to the third anniversary of
the Closing Date, whether voluntarily or involuntarily and whether
before or after acceleration of the Obligations, Borrowers shall pay to
Agent, for the benefit of Lenders as liquidated damages and
compensation for the costs of making funds available hereunder an
amount determined by multiplying the Applicable Percentage (as defined
below) by the principal amount of the Term Loan prepaid over and above
that amount permitted to be prepaid without penalty under Section
1.3(a). As used herein, the term "Applicable Percentage" shall mean (x)
three percent (3%), in the case of a prepayment on or prior to the
first anniversary of the Closing Date, (y) two percent (2%), in the
case of a prepayment after the first anniversary of the Closing Date
but on or prior to the second anniversary of the Closing Date, and (z)
one percent (1%), in the case of a prepayment after the second
anniversary of the Closing Date but on or prior to the third
anniversary of the Closing Date. Notwithstanding the foregoing, no
prepayment fee shall be payable by Borrowers under this Section 1.9(c)
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upon any prepayment made after the third anniversary of the Closing
Date or upon a mandatory prepayment made pursuant to Sections 1.3(b)
(except for a mandatory prepayment arising out of the issuance of
Indebtedness used to refinance the Obligations), 1.3(d) or 1.16(c);
provided that in the case of prepayments made pursuant to Section
1.3(b)(ii), (b)(iii) or (b)(iv) the transaction giving rise to the
applicable prepayment is expressly permitted under Section 6. In
addition to the foregoing, no prepayment fee shall be payable with
respect to any additional payment made by any Credit Party at the time
of making a mandatory prepayment pursuant to Section 1.3(b)(v) in an
amount not exceeding the amount of such mandatory prepayment so long as
any such additional payment does not pay the Loans in full.
1.10. Receipt of Payments. Borrowers shall make each payment under this
Agreement not later than 2:00 p.m. (New York time) on the day when due in
immediately available funds in Dollars to the Collection Account. For purposes
of computing interest as of any date, all payments shall be deemed received on
the day of receipt of immediately available funds therefor in the Collection
Account prior to 2:00 p.m. New York time. Payments received after 2:00 p.m. New
York time on any Business Day shall be deemed to have been received on the
following Business Day.
1.11. Application and Allocation of Payments. So long as no Default or
Event of Default shall have occurred and be continuing, (i) payments matching
specific scheduled payments then due shall be applied to those scheduled
payments; (ii) voluntary prepayments shall be applied as determined by Borrower
Representative, subject to the provisions of Section 1.3(a); and (iii) mandatory
prepayments shall be applied as set forth in Sections 1.3(c) and 1.3(d). All
payments and prepayments applied to a particular Loan shall be applied ratably
to the portion thereof held by each Lender as determined by its Pro Rata Share.
As to each other payment, and as to all payments made when a Default or Event of
Default shall have occurred and be continuing or following the Commitment
Termination Date, each Borrower hereby irrevocably waives the right to direct
the application of any and all payments received from or on behalf of such
Borrower, and each Borrower hereby irrevocably agrees that Agent shall have the
continuing exclusive right to apply any and all such payments against the
Obligations of Borrowers as Agent may deem advisable notwithstanding any
previous entry by Agent in the Loan Account or any other books and records. In
the absence of a specific determination by Agent with respect thereto, payments
shall be applied to amounts then due and payable in the following order: (1) to
Fees and Agent's expenses reimbursable hereunder; (2) to interest on the Loans,
ratably in proportion to the interest accrued as to each Loan; (3) to principal
payments on the Loans ratably to the aggregate, combined principal balance of
the Loans; and (4) to all other Obligations including expenses of Lenders to the
extent reimbursable under Section 11.3.
1.12. Loan Account and Accounting. Agent shall maintain a loan account
(the "Loan Account") on its books to record the Term Loan, all payments made by
Borrowers, and all other debits and credits as provided in this Agreement with
respect to the Term Loan. All entries in the Loan Account shall be made in
accordance with Agent's customary accounting practices as in effect from time to
time. The balance in the Loan Account, as recorded on Agent's most recent
printout or other written statement, shall, absent manifest error, be
presumptive evidence of the amounts due and owing to Agent and Lenders by each
Borrower; provided that any failure to so
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record or any error in so recording shall not limit or otherwise affect any
Borrower's duty to pay the Obligations. Agent shall render to Borrower
Representative a monthly accounting of transactions with respect to the Loans
setting forth the balance of the Loan Account as to each Borrower. Unless
Borrower Representative notifies Agent in writing of any objection to any such
accounting (specifically describing the basis for such objection), within thirty
(30) days after notice thereof to Borrower Representative pursuant to Section
11.10, each and every such accounting shall (absent manifest error) be deemed
final, binding and conclusive upon Borrowers in all respects as to all matters
reflected therein. Only those items expressly objected to in such notice shall
be deemed to be disputed by Borrowers. Notwithstanding any provision herein
contained to the contrary, any Lender may elect (which election may be revoked)
to dispense with the issuance of Notes to that Lender and may rely on the Loan
Account as evidence of the amount of Obligations from time to time owing to it.
1.13. Indemnity. Each Credit Party that is a signatory hereto shall
jointly and severally indemnify and hold harmless each of Agent, Lenders and
their respective Affiliates, and each such Person's respective officers,
directors, and employees (each, an "Indemnified Person"), from and against any
and all suits, actions, proceedings, claims, damages, losses, liabilities and
expenses (including reasonable attorneys' fees and disbursements and other costs
of investigation or defense, including those incurred upon any appeal) which may
be instituted or asserted against or incurred by any such Indemnified Person as
the result of credit having been extended, suspended or terminated under this
Agreement and the other Loan Documents and the administration of such credit,
and in connection with or arising out of the transactions contemplated hereunder
and thereunder and any actions or failures to act in connection therewith,
including any and all Environmental Liabilities and legal costs and expenses
arising out of or incurred in connection with disputes between or among any
parties to any of the Loan Documents (collectively, "Indemnified Liabilities");
provided, that no such Credit Party shall be liable for any indemnification to
an Indemnified Person to the extent that any such suit, action, proceeding,
claim, damage, loss, liability or expense results from (x) that Indemnified
Person's gross negligence or willful misconduct and (y) disputes, lawsuits,
claims, costs or liabilities which are exclusively among Lenders or Lenders and
Agent and which do not arise out of any action or inaction of any Credit Party.
NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY
LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON
OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR
INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A
RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN
DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR
THEREUNDER.
1.14. Access. In the absence of the existence or continuance of a
Default or an Event of Default, each Credit Party which is a party hereto shall,
during normal business hours and upon three (3) Business Days prior notice, as
frequently as Agent determines to be appropriate in its reasonable discretion
but not to exceed twice per calendar year: (a) provide Agent and any of its
officers, employees and agents access to its properties, facilities, advisors
and employees (including officers) of each Credit Party and to the Collateral,
(b) permit Agent, and any of its officers, employees and agents, to inspect,
audit and make extracts from any Credit Party's
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books and records, and (c) permit Agent, and its officers, employees and agents,
to inspect, review, evaluate and make test verifications and counts of the
Accounts, Inventory and other Collateral of any Credit Party. If a Default or
Event of Default shall have occurred and be continuing or if access is necessary
to preserve or protect the Collateral as determined by Agent, each such Credit
Party shall provide such access to Agent and to each Lender at all times and
without advance notice. Furthermore, so long as any Event of Default shall have
occurred and be continuing, Borrowers shall provide Agent and each Lender with
access to their suppliers and customers provided that Agent obtains a
confidentiality agreement from each such supplier or customer prior to the
delivery of any confidential information to any such supplier or customer. Each
Credit Party shall make available to Agent and its counsel, as quickly as is
possible under the circumstances, originals or copies of all books and records
which Agent may request. Each Credit Party shall deliver any document or
instrument necessary for Agent, as it may from time to time request, to obtain
records from any service bureau or other Person which maintains records for such
Credit Party, and shall maintain duplicate records or supporting documentation
on media, including computer tapes and discs owned by such Credit Party. Agent
will give Lenders at least ten (10) days' prior written notice of audits
performed under subsection (c) above. Representatives of other Lenders may
accompany Agent's representatives on such audits performed under subsection (c)
above at the sole cost and expense of such Lender.
1.15. Taxes.
(a) Except as otherwise required by law, any and all payments
by each Borrower hereunder (including any payments made pursuant to
Section 12) or under the Notes shall be made, in accordance with this
Section 1.15, free and clear of and without deduction for any and all
present or future Taxes. If any Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder
(including any sum payable pursuant to Section 12) or under the Notes,
(i) the sum payable shall be increased as much as shall be necessary so
that after making all required deductions (including deductions
applicable to additional sums payable under this Section 1.15) Agent or
Lenders, as applicable, receive an amount equal to the sum they would
have received had no such deductions been made, (ii) such Borrower
shall make such deductions, and (iii) such Borrower shall pay the full
amount deducted to the relevant taxing or other authority in accordance
with applicable law. Within thirty (30) days after the date of any
payment of Taxes, Borrower Representative shall furnish to Agent the
original or a certified copy of a receipt evidencing payment thereof.
(b) Each Credit Party that is a signatory hereto shall jointly
and severally indemnify and, within ten (10) days of demand therefor,
pay Agent and each Lender for the full amount of Taxes (including any
Taxes imposed by any jurisdiction on amounts payable under this Section
1.15) paid by Agent or such Lender, as appropriate, and any liability
(including expenses) arising therefrom or with respect thereto, whether
or not such Taxes were correctly or legally asserted.
(c) Each Lender organized under the laws of a jurisdiction
outside the United States (a "Foreign Lender") as to which payments to
be made under this Agreement or under the Notes are exempt from United
States withholding tax under an applicable
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statute or tax treaty shall provide to Borrower Representative and
Agent on or before the Closing Date a properly completed and executed
IRS Form W-8ECI or Form W-8BEN or other applicable form, certificate or
document prescribed by the IRS or the United States certifying as to
such Foreign Lender's entitlement to such exemption (a "Certificate of
Exemption"). Any foreign Person that seeks to become a Lender under
this Agreement shall provide a Certificate of Exemption to Borrower
Representative and Agent prior to becoming a Lender hereunder. No
foreign Person may become a Lender hereunder if such Person is unable
to deliver a Certificate of Exemption.
1.16. Capital Adequacy; Increased Costs; Illegality.
(a) If any Lender shall have determined in good faith that any
law, treaty, governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy, reserve requirements or
similar requirements or compliance by any Lender with any request or
directive regarding capital adequacy, reserve requirements or similar
requirements (whether or not having the force of law), in each case,
adopted after the Closing Date, from any central bank or other
Governmental Authority increases or would have the effect of increasing
the amount of capital, reserves or other funds required to be
maintained by such Lender and thereby reducing the rate of return on
such Lender's capital as a consequence of its obligations hereunder,
then Borrowers shall from time to time upon demand by such Lender (with
a copy of such demand to Agent) pay to Agent, for the account of such
Lender, additional amounts sufficient to compensate such Lender for
such reduction. A certificate as to the amount of that reduction and
showing the basis of the computation thereof submitted by such Lender
to Borrower Representative and to Agent shall, absent manifest error,
be final, conclusive and binding for all purposes.
(b) If, due to either (i) the introduction of or any change in
any law or regulation (or any change in the interpretation thereof)
other than a change in the taxation of the overall net income or gross
receipts of a Lender or (ii) the compliance with any guideline or
request from any central bank or other Governmental Authority (whether
or not having the force of law), in each case adopted after the Closing
Date, there shall be any increase in the cost to any Lender of agreeing
to make or making, funding or maintaining any Loan, then Borrowers
shall from time to time, upon demand by such Lender (with a copy of
such demand to Agent), pay to Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost
(including an explanation of the basis for and the computation of such
loss, cost or expense), submitted to Borrower Representative and to
Agent by such Lender, shall be conclusive and binding on Borrowers for
all purposes, absent manifest error. Each Lender agrees that, as
promptly as practicable after it becomes aware of any circumstances
referred to above which would result in any such increased cost, the
affected Lender shall, to the extent not inconsistent with such
Lender's internal policies of general application, use reasonable
commercial efforts to minimize costs and expenses incurred by it and
payable to it by Borrowers pursuant to this Section 1.16(b).
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(c) Intentionally omitted.
(d) Replacement of Lender in Respect of Increased Costs.
Within fifteen (15) days after receipt by Borrower Representative of
written notice and demand from any Lender (an "Affected Lender") for
payment of additional amounts or increased costs as provided in Section
1.15(a), 1.16(a) or 1.16(b), Borrower Representative may, at its
option, notify Agent and such Affected Lender of its intention to
replace the Affected Lender. So long as no Default or Event of Default
shall have occurred and be continuing, Borrower Representative, with
the consent of Agent (which such consent shall not be unreasonably
withheld), may obtain, at Borrowers' expense, a replacement Lender
("Replacement Lender") for the Affected Lender, which Replacement
Lender must be satisfactory to Agent. If Borrowers obtain a Replacement
Lender within ninety (90) days following notice of their intention to
do so, the Affected Lender must sell and assign its Loans and
Commitments to such Replacement Lender for an amount equal to the
principal balance of all Loans held by the Affected Lender and all
accrued interest with respect thereto through the date of such sale,
provided that Borrowers shall have reimbursed such Affected Lender for
the additional amounts or increased costs that it is entitled to
receive under this Agreement through the date of such sale and
assignment.
Notwithstanding the foregoing, Borrowers shall not have the right to
obtain a Replacement Lender if the Affected Lender rescinds its demand
for increased costs or additional amounts within fifteen (15) days
following its receipt of Borrowers' notice of intention to replace such
Affected Lender. Furthermore, if Borrowers give a notice of intention
to replace and do not so replace such Affected Lender within ninety
(90) days thereafter, Borrowers' rights under this Section 1.16(d)
shall terminate and Borrowers shall promptly pay all increased costs or
additional amounts demanded by such Affected Lender pursuant to
Sections 1.15(a), 1.16(a) and 1.16(b).
1.17. Single Loan. All Loans to Borrowers and all of the other
Obligations of Borrowers arising under this Agreement and the other Loan
Documents shall constitute one general obligation of Borrowers secured, until
the Termination Date, by all of the Collateral.
1.18. Designated Senior Indebtedness under the Indenture. The
Obligations constitute "Designated Senior Indebtedness" as such term is defined
in the Indenture.
2. CONDITIONS PRECEDENT
2.1. Conditions to the Initial Loans. No Lender shall be obligated to
make any Loan on the Closing Date, or to take, fulfill, or perform any other
action hereunder, until the following conditions have been satisfied or provided
for in a manner satisfactory to Agent, or waived in writing by Agent and
Lenders:
(a) Credit Agreement; Loan Documents. This Agreement or
counterparts hereof shall have been duly executed by, and delivered to,
Borrowers, Agent and Lenders; and Agent shall have received such
documents, instruments, agreements and legal opinions as Agent shall
reasonably request in connection with the transactions contemplated by
this
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Agreement and the other Loan Documents, including all those listed in
the Closing Checklist attached hereto as Annex D, each in form and
substance satisfactory to Agent.
(b) Repayment of Prior Lenders Obligations; Satisfaction of
Outstanding L/Cs. (i) Agent shall have received a fully executed
original of a pay-off letter satisfactory to Agent confirming that all
of the Prior Lenders Obligations will be repaid in full from the
proceeds of the Term Loan and all Liens other than the Permitted
Encumbrances upon any of the property of Borrowers or any of their
Domestic Subsidiaries in favor of Prior Lenders shall be terminated by
Prior Lenders immediately upon such payment; and (ii) all letters of
credit issued or guaranteed by Prior Lenders shall have been cash
collateralized or terminated.
(c) Approvals. Agent shall have received (i) satisfactory
evidence that the Credit Parties have obtained all required consents
and approvals of all Persons including all requisite Governmental
Authorities, to the execution, delivery and performance of this
Agreement and the other Loan Documents and the consummation of the
Related Transactions or (ii) an officer's certificate in form and
substance satisfactory to Agent affirming that, to such officer's
knowledge, no such consents or approvals are required.
(d) Revolving Credit Facility. International shall have
secured a revolving credit facility in the maximum principal amount of
not less than Twenty Million Dollars ($20,000,000) from a lender or
lenders satisfactory to Agent in its reasonable discretion, upon terms
consistent with this Credit Agreement and upon such other terms as are
reasonably requested by Agent, which such revolving credit facility
shall, in any event, not be secured by any of the Credit Parties'
assets other than the Revolving Credit Cash Collateral and a junior and
subordinate lien, subject to an intercreditor agreement acceptable to
Agent in its sole and absolute discretion, on the Collateral, and shall
be for a term extending until the Commitment Termination Date or later
(the "Revolving Credit Facility"). As of the Closing Date, Borrowers
shall not have drawn upon the Revolving Credit Facility and no letters
of credit, banker's acceptances or other guarantees or undertakings
shall have been issued thereunder.
(e) Payment of Fees. Borrowers shall have paid the Fees
required to be paid on the Closing Date in the respective amounts
specified in Section 1.9 (including the Fees specified in the GE
Capital Fee Letter), and shall have reimbursed Agent for all fees,
costs and expenses of closing presented as of the Closing Date.
(f) Capital Structure: Other Indebtedness. The capital
structure of each Credit Party and the terms and conditions of all
Indebtedness of each Credit Party shall be acceptable to Agent in its
sole discretion.
2.2. Further Conditions to Each Loan. Except as otherwise expressly
provided herein, no Lender shall be obligated to fund any Loan, if, as of the
date thereof:
(a) Any representation or warranty by any Credit Party
contained herein or in any of the other Loan Documents shall be untrue
or incorrect as of the date hereof; or
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(b) Except as specifically set forth in Section 3.5 below, any
event or circumstance having a Material Adverse Effect shall have
occurred since September 30, 2001 as determined by Agent; or
(c) Any Event of Default shall have occurred and be continuing
or would result after giving effect to any Loan, or
The request and acceptance by any Borrower of the proceeds of any Loan, shall be
deemed to constitute, as of the date of such request or acceptance, (i) a
representation and warranty by Borrowers that the conditions in this Section 2.2
have been satisfied and (ii) a reaffirmation by Borrowers of the cross-guaranty
provisions set forth in Section 12 and of the granting and continuance of
Agent's Liens, on behalf of itself and Lenders, pursuant to the Collateral
Documents.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans, the Credit Parties executing this
Agreement, jointly and severally, make the following representations and
warranties to Agent and each Lender with respect to all Credit Parties, each and
all of which shall survive the execution and delivery of this Agreement.
3.1. Corporate Existence; Compliance with Law. Each Credit Party (a) is
a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation as set forth in Disclosure Schedule
(3.1); (b) is duly qualified to conduct business and is in good standing in each
other jurisdiction where its ownership or lease of property or the conduct of
its business requires such qualification, except where the failure to be so
qualified would not result in a Material Adverse Effect; (c) has the requisite
corporate power and authority and the legal right to own, pledge, mortgage or
otherwise encumber and operate its properties, to lease the property it operates
under lease and to conduct its business as now, heretofore and proposed to be
conducted; (d) subject to specific representations regarding Environmental Laws,
has all licenses, permits, consents or approvals from or by, and has made all
filings with, and has given all notices to, all Governmental Authorities having
jurisdiction, to the extent required for such ownership, operation and conduct;
(e) is in compliance with its charter and by-laws; and (f) subject to specific
representations set forth herein regarding ERISA, Environmental Laws, tax and
other laws, is in compliance with all applicable provisions of law, except where
the failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
3.2. Executive Offices; FEIN; State Organizational Numbers; Legal
Names. As of the Closing Date, the current location of each Credit Party's chief
executive office and principal place of business is set forth in Disclosure
Schedule (3.2), and none of such locations have changed within the twelve (12)
months preceding the Closing Date. In addition, Disclosure Schedule (3.2) lists
the federal employer identification number of each Credit Party, the state
organizational number of each Credit Party and each Credit Party's exact legal
name.
3.3. Corporate Power, Authorization, Enforceable Obligations. The
execution, delivery and performance by each Credit Party of the Loan Documents
to which it is a party and the
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creation of all Liens provided for therein: (a) are within such Person's
corporate power; (b) have been duly authorized by all necessary or proper
corporate and shareholder action; (c) do not contravene any provision of such
Person's charter or bylaws; (d) do not violate any law or regulation, or any
order or decree of any court or Governmental Authority; (e) do not conflict with
or result in the breach or termination of, constitute a default under or
accelerate or permit the acceleration of any performance required by, any
indenture, mortgage, deed of trust, lease, agreement or other instrument to
which such Person is a party or by which such Person or any of its property is
bound; (f) do not result in the creation or imposition of any Lien upon any of
the property of such Person other than those in favor of Agent, on behalf of
itself and Lenders, pursuant to the Loan Documents; and (g) do not require the
consent or approval of any Governmental Authority or any other Person, except
those referred to in Section 2.1(c), all of which will have been duly obtained,
made or complied with prior to the Closing Date. On or prior to the Closing
Date, each of the Loan Documents shall have been duly executed and delivered by
each Credit Party thereto and each such Loan Document shall then constitute a
legal, valid and binding obligation of such Credit Party enforceable against it
in accordance with its terms except as such enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.
3.4. Financial Statements and Projections. Except for the Projections,
all Financial Statements concerning Borrowers and their respective Subsidiaries
which are referenced below have been prepared in accordance with GAAP
consistently applied throughout the periods covered (except as disclosed therein
and except, with respect to unaudited Financial Statements, for the absence of
footnotes and normal year-end audit adjustments) and present fairly in all
material respects the financial position of the Persons covered thereby as at
the dates thereof and the results of their operations and cash flows for the
periods then ended.
(a) The following Financial Statements attached hereto as
Disclosure Schedule (3.4(A)) have been delivered on the date hereof:
(i) The audited consolidated balance sheets at
December 31, 1999 and 2000 and the related statements of income and
cash flows of Borrowers and their Subsidiaries for the Fiscal Years
then ended, certified by PricewaterhouseCoopers LLP.
(ii) The unaudited balance sheet(s) at September 30,
2001, and the related statement(s) of income and cash flows of
Borrowers and their Subsidiaries for the three Fiscal Quarters then
ended (the "September 30, 2001 Statements").
(b) Pro Forma. The Pro Forma delivered on the date hereof and
attached hereto as Disclosure Schedule (3.4(B)) was prepared by
Borrowers giving pro forma effect to the Related Transactions, was
based on the unaudited consolidated balance sheets of Borrowers and
their Subsidiaries.
(c) Projections. The Projections delivered on the date hereof
and attached hereto as Disclosure Schedule (3.4(C)) have been prepared
by Borrowers in light of the past operations of their businesses and
reflect projections for the five year period beginning on January 1,
2002 on a year by year basis. Borrowers believe the Projections to be
reasonable and fair in light of current conditions and current facts
known to Borrowers
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and, as of the Closing Date, reflect Borrowers' good faith and
reasonable estimates of the future financial performance of Borrowers
and of the other information projected therein for the period set forth
therein.
3.5. Material Adverse Effect. Between December 31, 2000 and the Closing
Date, except for (i) shutting down the Natchez, Mississippi facility, (ii)
ratifying the Des Moines, Iowa and Natchez, Mississippi union contracts, (iii)
as may be reflected in the September 30, 2001 Statements, and (iv) add-backs for
restructuring charges not in excess of 5% of the total value of the assets shown
on the audited consolidated balance sheets at December 31, 2000 of Borrowers and
their Subsidiaries: (a) no Credit Party has incurred any obligations, contingent
or non-contingent liabilities, liabilities for Charges, long-term leases or
unusual forward or long-term commitments which are not reflected in the Pro
Forma and which, alone or in the aggregate, could reasonably be expected to have
a Material Adverse Effect, (b) no contract, lease or other agreement or
instrument has been entered into by any Credit Party or has become binding upon
any Credit Party's assets and no law or regulation applicable to any Credit
Party has been adopted which has had or could reasonably be expected to have a
Material Adverse Effect, and (c) no Credit Party is in default and to the best
of Borrowers' knowledge no third party is in default under any material
contract, lease or other agreement or instrument, which alone or in the
aggregate could reasonably be expected to have a Material Adverse Effect. Except
as set forth in this Section, between December 31, 2000 and the Closing Date no
event has occurred, which alone or together with other events, could reasonably
be expected to have a Material Adverse Effect.
3.6. Ownership of Property; Liens. As of the Closing Date, the real
estate ("Real Estate") listed on Disclosure Schedule (3.6) constitutes all of
the real property owned, leased, subleased, or used by any Credit Party. Each
Credit Party owns good and marketable fee simple title to all of its owned real
estate, and valid and marketable leasehold interests in all of its leased Real
Estate, all as described on Disclosure Schedule (3.6), and copies of all such
leases or a summary of terms thereof satisfactory to Agent have been delivered
to Agent. Disclosure Schedule (3.6) further describes any Real Estate with
respect to which any Credit Party is a lessor, sublessor or assignor as of the
Closing Date. Each Credit Party also has good and marketable title to, or valid
leasehold interests in, all of its personal properties and assets. As of the
Closing Date, none of the properties and assets of any Credit Party are subject
to any Liens other than Permitted Encumbrances and Liens in favor of the Prior
Lenders which will be discharged and released on the Closing Date, and there are
no facts, circumstances or conditions known to any Credit Party that may result
in any Liens (including Liens arising under Environmental Laws) other than
Permitted Encumbrances. Each Credit Party has received all deeds, assignments,
waivers, consents, non-disturbance and recognition or similar agreements, bills
of sale and other documents, and has duly effected all recordings, filings and
other actions necessary to establish, protect and perfect such Credit Party's
right, title and interest in and to all such Real Estate and other properties
and assets. Disclosure Schedule (3.6) also describes any purchase options,
rights of first refusal or other similar contractual rights pertaining to any
Real Estate. As of the Closing Date, no portion of any Credit Party's Real
Estate has suffered any material damage by fire or other casualty loss which has
not heretofore been repaired and restored in all material respects to its
original condition or otherwise remedied. As of the Closing Date, all material
permits required to have been issued or appropriate to enable the Real Estate to
be lawfully occupied and
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used for all of the purposes for which they are currently occupied and used have
been lawfully issued and are in full force and effect.
3.7. Labor Matters. As of the Closing Date (a) except as set forth in
Disclosure Schedule (3.7) no strikes or other material labor disputes against
any Credit Party are pending or, to any Credit Party's knowledge, threatened
which could (insofar as Borrowers may reasonably foresee) have a Material
Adverse Effect, and (b) except as set forth in Disclosure Schedule (3.7), no
Credit Party is a party to or bound by any collective bargaining agreement,
management agreement, consulting agreement or any employment agreement (and true
and complete copies of any agreements described on Disclosure Schedule (3.7)
have been delivered to Agent).
3.8. Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness. Except as set forth in Disclosure Schedule (3.8), no Credit Party
has any Domestic Subsidiaries, is engaged in any joint venture or partnership
with any other Person, or is an Affiliate of any other Person. All of the issued
and outstanding Stock of each Credit Party is owned by each of the stockholders
and in the amounts set forth on Disclosure Schedule (3.8). There are no
outstanding rights to purchase, options, warrants or similar rights or
agreements pursuant to which any Credit Party may be required to issue, sell,
repurchase or redeem any of its Stock or other equity securities or any Stock or
other equity securities of its Domestic Subsidiaries. All outstanding
Indebtedness of each Credit Party as of the Closing Date is described in Section
6.3 (including Disclosure Schedule (6.3)). None of the Credit Parties other than
Borrowers has any assets or any Indebtedness or Guaranteed Indebtedness (except
the Obligations).
3.9. Government Regulation. No Credit Party is an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940 as amended. No Credit Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, or any other federal
or state statute that restricts or limits its ability to incur Indebtedness or
to perform its obligations hereunder. The making of the Loans by Lenders to
Borrowers, the application of the proceeds thereof and repayment thereof and the
consummation of the Related Transactions will not violate any provision of any
such statute or any rule, regulation or order issued by the SEC.
3.10. Margin Regulations. No Credit Party is engaged, nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
security" as such terms are defined in Regulation U of the Federal Reserve Board
as now and from time to time hereafter in effect (such securities being referred
to herein as "Margin Stock"). No Credit Party owns any Margin Stock, and none of
the proceeds of the Loans or other extensions of credit under this Agreement
will be used, directly or indirectly, for the purpose of purchasing or carrying
any Margin Stock, for the purpose of reducing or retiring any Indebtedness which
was originally incurred to purchase or carry any Margin Stock or for any other
purpose which might cause any of the Loans or other extensions of credit under
this Agreement to be considered a "purpose credit" within the meaning of
Regulation T, U or X of the Federal Reserve Board. No Credit Party will take or
permit to be taken any action which might cause any Loan Document to violate any
regulation of the Federal Reserve Board.
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3.11. Taxes. Credit Parties have filed all United States federal tax
returns and all other tax returns required to be filed and have paid all taxes
due pursuant to such returns or pursuant to any assessment received by Borrower
Representative or any other Credit Party, except such taxes, if any, as are
being contested in good faith and for which adequate reserves have been
provided. No notices of tax liens have been filed and no claims are being
asserted concerning any such taxes, which liens are material to the financial
condition of Credit Parties on a consolidated basis taken as a whole. The
charges, accruals, and reserves on the books of Credit Parties for any taxes or
other government assessments are adequate. Proper and accurate amounts have been
withheld by each Credit Party from its respective employees for all periods in
full and complete compliance with all applicable federal, state, local and
foreign law and such withholdings have been timely paid to the respective
Governmental Authorities. As of the Closing Date, no Credit Party has agreed or
been requested to make any adjustment under IRC Section 481(a), by reason of a
change in accounting method or otherwise, which would have a Material Adverse
Effect.
3.12. ERISA.
(a) Disclosure Schedule (3.12) lists and separately identifies
all Title IV Plans, Multiemployer Plans, ESOPs and Retiree Welfare
Plans. Copies of all such listed Plans, together with a copy of the
latest form 5500 for each such Plan, have been delivered to Agent.
Except with respect to Multiemployer Plans, each Qualified Plan has
been determined by the IRS to qualify under Section 401 of the IRC, and
the trusts created thereunder have been determined to be exempt from
tax under the provisions of Section 501 of the IRC, and nothing has
occurred which would cause the loss of such qualification or tax-exempt
status. Each Plan is in compliance with the applicable provisions of
ERISA and the IRC, including the filing of reports required under the
IRC or ERISA. No Credit Party has failed to make any contribution or
pay any amount due as required by either Section 412 of the IRC or
Section 302 of ERISA or the terms of any such Plan. No Credit Party has
engaged in a prohibited transaction, as defined in Section 4975 of the
IRC, in connection with any Plan, which would subject any Credit Party
to a material tax on prohibited transactions imposed by Section 4975 of
the IRC.
(b) Except as set forth in Disclosure Schedule (3.12): (i) no
Title IV Plan has any Unfunded Pension Liability in violation of
applicable law; (ii) no ERISA Event or event described in Section
4062(e) of ERISA with respect to any Title IV Plan has occurred or is
reasonably expected to occur; (iii) there are no pending, or to the
knowledge of any Credit Party, threatened claims (other than claims for
benefits in the normal course), sanctions, actions or lawsuits,
asserted or instituted against any Plan or any Person as fiduciary or
sponsor of any Plan; (iv) no Credit Party has incurred or reasonably
expects to incur any liability as a result of a complete or partial
withdrawal from a Multiemployer Plan; (v) within the last five years no
Title IV Plan with Unfunded Pension Liabilities has been transferred
outside of the "controlled group" (within the meaning of Section
4001(a)(14) of ERISA) of any Credit Party; and (vi) no liability under
any Title IV Plan has been satisfied with the purchase of a contract
from an insurance company that is not rated AAA by the Standard &
Poor's Corporation or the equivalent by another nationally recognized
rating agency.
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3.13. No Litigation. No action, claim, lawsuit, demand, or proceeding
is now pending or, to the knowledge of any Credit Party, threatened against any
Credit Party, before any court (collectively, "Litigation"), (a) which
challenges any Credit Party's right or power to enter into or perform any of its
obligations under the Loan Documents to which it is a party, or the validity or
enforceability of any Loan Document or any action taken thereunder, or (b)
Except as set forth on Disclosure Schedule (3.13), which has a reasonable risk
of being determined adversely to any Credit Party and which, if so determined,
could have a Material Adverse Effect.
3.14. Brokers. No broker or finder acting on behalf of any Credit Party
brought about the obtaining, making or closing of the Loans or the Related
Transactions, and no Credit Party has any obligation to any Person in respect of
any finder's or brokerage fees in connection therewith.
3.15. Intellectual Property. As of the Closing Date, each Credit Party
owns or has rights to use all Intellectual Property necessary to continue to
conduct its business as now or heretofore conducted by it or proposed to be
conducted by it, and each Patent, Trademark, Copyright and License is listed,
together with application or registration numbers, as applicable, in Disclosure
Schedule (3.15) hereto. Each Credit Party conducts its business and affairs
without infringement of or interference with any Intellectual Property of any
other Person.
3.16. Full Disclosure. No information contained in this Agreement, any
of the other Loan Documents, any Projections, Financial Statements or Collateral
Reports or other reports from time to time delivered hereunder or any written
statement furnished by or on behalf of any Credit Party to Agent or any Lender
pursuant to the terms of this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading in
light of the circumstances under which they were made.
3.17. Environmental Matters.
(a) Except as set forth in Disclosure Schedule (3.17), as of
the Closing Date: (i) no Credit Party has, to the best of its
knowledge, caused or suffered to occur any Release of Hazardous
Materials on, at, in, under, above, to, from or about any of its Real
Estate during the period in which such Credit Party owned or occupied
such Real Estate; (ii) the Credit Parties are and have been in
compliance with all Environmental Laws, except for such noncompliance
which would not result in Environmental Liabilities which could
reasonably be expected to have a Material Adverse Effect; (iii) the
Credit Parties have obtained, and are in compliance with, all
Environmental Permits required by Environmental Laws for the operations
of their respective businesses as presently conducted or as proposed to
be conducted, except where the failure to so obtain or comply with such
Environmental Permits would not result in Environmental Liabilities
which could reasonably be expected to have a Material Adverse Effect,
and all such Environmental Permits are valid, uncontested and in good
standing; (iv) no Credit Party is involved in operations or knows of
any facts, circumstances or conditions, including any Releases of
Hazardous Materials, that are likely to result in any Environmental
Liabilities of such Credit Party which could reasonably be expected to
have a Material Adverse Effect, and no Credit Party has permitted any
current or former tenant or
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occupant of the Real Estate to engage in any such operations; (v) there
is no Litigation arising under or related to any Environmental Laws,
Environmental Permits or Hazardous Material which seeks damages,
penalties, fines, costs or expenses which would have a Material Adverse
Effect or injunctive relief, or which alleges criminal misconduct by
any Credit Party; and (vi) no notice has been received by any Credit
Party identifying it as a material "potentially responsible party", and
to the knowledge of the Credit Parties, there are no facts,
circumstances or conditions that may result in any Credit Party being
identified as a material "potentially responsible party" under CERCLA
or analogous state statutes.
(b) Each Credit Party hereby acknowledges and agrees that
Agent (i) other than Agent's ownership of the building at TTC of Texas'
Brownsville, Texas facility, is not now, and has not ever been, in
control of any of the Real Estate or any Credit Party's affairs, and
(ii) does not have the capacity through the provisions of the Loan
Documents or otherwise to control or direct any Credit Party's conduct
with respect to the ownership, operation or management of any of its
Real Estate or compliance with Environmental Laws or Environmental
Permits.
3.18. Insurance. Disclosure Schedule (3.18) lists all insurance
policies of any nature maintained, as of the Closing Date, for current
occurrences by each Credit Party, as well as a summary of the terms of each such
policy.
3.19. Deposit. Disclosure Schedule (3.19) lists all banks and other
financial institutions at which any Credit Party maintains deposits and/or other
accounts with an average closing balance over any Fiscal Quarter of more than
$100,000, including all Deposit Accounts, as of the Closing Date, and such
Schedule correctly identifies the name, address and telephone number of each
depository, the name in which the account is held, a description of the purpose
of the account, and the complete account number.
3.20. Government Contracts. Except as set forth in Disclosure Schedule
(3.20), as of the Closing Date, no Credit Party is a party to any contract or
agreement with any Governmental Authority and no Credit Party's Accounts are
subject to the Federal Assignment of Claims Act, as amended (31 U.S.C. Section
3727) or any similar state or local law.
3.21. Customer and Trade Relations. As of the Closing Date, there
exists no actual or, to the knowledge of any Credit Party, threatened
termination or cancellation of, or any material adverse modification or material
adverse change in: the business relationship of any Credit Party with any
customer or group of customers whose purchases during the preceding twelve (12)
months caused them to be ranked among the ten largest customers of the Credit
Parties taken as a whole; or the business relationship of any Credit Party with
any supplier material to its operations.
3.22. Agreements and Other Documents. As of the Closing Date, Borrower
Representative has provided to Agent or its counsel, on behalf of Lenders,
accurate and complete copies (or summaries) of all of the following agreements
or documents to which any Credit Party is subject and each of which are listed
on Disclosure Schedule (3.22): any lease of Equipment having a remaining term of
one year or longer and requiring aggregate rental and other payments
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in excess of $500,000 per annum; licenses and permits held by the Credit
Parties, the absence of which could be reasonably likely to have a Material
Adverse Effect; instruments or documents evidencing Indebtedness of such Credit
Party and any security interest granted by such Credit Party with respect
thereto; and instruments and agreements evidencing the issuance of any equity
securities, warrants, rights or options to purchase equity securities of such
Credit Party.
3.23. Solvency. Both before and after giving effect to (a) the Loans to
be made on the Closing Date or such other date as Loans requested hereunder are
made, (b) the disbursement of the proceeds of such Loans pursuant to the
instructions of Borrower Representative, (c) the Refinancing and the
consummation of the other Related Transactions and (d) the payment and accrual
of all transaction costs in connection with the foregoing, each Credit Party is
Solvent.
3.24. Subordinated Debt.
(a) As of the Closing Date, Borrowers have delivered to Agent
a complete and correct copy of the Subordinated Bonds (including all
schedules, exhibits, amendments, supplements, modifications,
assignments and all other documents delivered pursuant thereto or in
connection therewith). The Credit Parties thereto have the corporate
power and authority to incur the Indebtedness evidenced by the
Subordinated Bonds. The subordination provisions of the Subordinated
Bonds are enforceable against the holders of the Subordinated Bonds by
Agent and Lenders. All Obligations, including the Obligations to pay
principal of and interest on the Loans constitute senior Indebtedness
entitled to the benefits of the subordination provisions contained in
the Subordinated Bonds. The principal of and interest on the Notes, and
all other Obligations will constitute "senior debt" as that or any
similar term is or may be used in any other instrument evidencing or
applicable to any other Subordinated Debt. Borrowers acknowledge that
Agent and each Lender are entering into this Agreement and are
extending the Commitments in reliance upon the subordination provisions
of the Subordinated Bonds and this Section 3.24.
(b) Not in any way in limitation of the foregoing, the
Obligations constitute "Designated Senior Indebtedness" and "Permitted
Indebtedness" as such terms are defined in the Indenture. The Loans and
the credit facility evidenced by this Agreement constitute a "Bank
Credit Facility" as such term is defined in the Indenture.
3.25. Dissolved Subsidiaries. The affairs of the Subsidiaries listed in
Disclosure Schedule (3.25) (the "Dissolved Subsidiaries") are in the process of
being wound up and Borrowers will diligently prosecute such wind up and an
ultimate dissolution of the Dissolved Subsidiaries and use their best efforts to
complete the dissolution of the Dissolved Subsidiaries on or before July 1,
2002.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1. Reports and Notices.
(a) Borrower Representative hereby agrees that from and after
the Closing Date and until the Termination Date, it shall deliver to
Agent, as required, the Financial
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Statements, notices, Projections and other information at the times, to
the Persons and in the manner set forth in Annex E.
(b) Borrower Representative hereby agrees that from and after
the Closing Date and until the Termination Date, it shall deliver to
Agent, as required, the various Collateral Reports at the times, to the
Persons and in the manner set forth in Annex F.
(c) Communication with Accountants. Each Credit Party
executing this Agreement authorizes Agent and Lenders, so long as a
Default or Event of Default shall have occurred and be continuing, to
communicate directly with its independent certified public accountants
including PricewaterhouseCoopers LLP, and authorizes and shall instruct
those accountants and advisors to disclose and make available to Agent
and each Lender any and all Financial Statements and other supporting
financial documents, schedules and information relating to any Credit
Party (including copies of any issued management letters) with respect
to the business, financial condition and other affairs of any Credit
Party.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this Credit Agreement jointly and severally
agrees as to all Credit Parties that from and after the date hereof and until
the Termination Date:
5.1. Maintenance of Existence and Conduct of Business. Each Credit
Party shall: do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence and its rights; continue to
conduct its business substantially as now conducted or as otherwise permitted
hereunder; at all times maintain, preserve and protect all of its assets and
properties used or useful in the conduct of its business, and keep the same in
reasonable repair, working order and condition in all material respects (taking
into consideration ordinary wear and tear) and from time to time make, or cause
to be made, all necessary or appropriate repairs, replacements and improvements
thereto consistent with industry practices so that the overall efficiency
thereof shall be preserved; and transact business only in such corporate and
trade names as are set forth in Disclosure Schedule (5.1).
5.2. Payment of Obligations.
(a) Subject to Section 5.2(b), each Credit Party shall pay and
discharge or cause to be paid and discharged promptly all Charges
payable by it, including (A) Charges imposed upon it, its income and
profits, or any of its property (real, personal or mixed) and all
Charges with respect to tax, social security and unemployment
withholding with respect to its employees, and (B) lawful claims for
labor, materials, supplies and services or otherwise, before any
thereof shall become past due.
(b) Each Credit Party may in good faith contest, by
appropriate proceedings, the validity or amount of any Charges
described in Section 5.2(a); provided, that (i) adequate reserves with
respect to such contest are maintained on the books of such Credit
Party, in accordance with GAAP, (ii) no Lien shall be imposed to secure
payment of such Charges that is superior to any of the Liens securing
the Obligations and such contest is
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maintained and prosecuted continuously and with diligence and operates
to suspend collection or enforcement of such Charges, (iii) none of the
Collateral becomes subject to forfeiture or loss as a result of such
contest, (iv) such Credit Party shall promptly pay or discharge such
contested Charges or claims and all additional charges, interest,
penalties and expenses, if any, and shall deliver to Agent evidence
acceptable to Agent of such compliance, payment or discharge, if such
contest is terminated or discontinued adversely to such Credit Party or
the conditions set forth in this Section 5.2(b) are no longer met, and
(v) Agent has not advised Borrowers in writing that Agent reasonably
believes that nonpayment or nondischarge thereof could have or result
in a Material Adverse Effect.
5.3. Books and Records. Borrower Representative shall keep adequate
books and records with respect to the business activities of Borrower
Representative and the other Credit Parties on a consolidated basis in which
proper entries, reflecting all financial transactions, are made in accordance
with GAAP and on a basis consistent with the Financial Statements attached as
Disclosure Schedule (3.4(A)).
5.4. Insurance; Damage to or Destruction of Collateral.
(a) The Credit Parties shall, at their sole cost and expense,
maintain the policies of insurance described on Disclosure Schedule
(3.18) as in effect on the date hereof or otherwise in form and amounts
and with insurers acceptable to Agent. If any Credit Party at any time
or times hereafter shall fail to obtain or maintain any of the policies
of insurance required above or to pay all premiums relating thereto,
Agent may at any time or times thereafter obtain and maintain such
policies of insurance and pay such premiums and take any other action
with respect thereto which Agent deems advisable. Agent shall have no
obligation to obtain insurance for any Credit Party or pay any premiums
therefor. By doing so, Agent shall not be deemed to have waived any
Default or Event of Default arising from any Credit Party's failure to
maintain such insurance or pay any premiums therefor. All sums so
disbursed by Agent, including attorneys' fees, court costs and other
charges related thereto, shall be payable on demand by Borrowers to
Agent and shall be additional Obligations hereunder secured by the
Collateral.
(b) Agent reserves the right at any time upon any change in
any Credit Party's risk profile (including any change in the product
mix maintained by any Credit Party or any laws affecting the potential
liability of such Credit Party) to require additional forms and limits
of insurance to, in Agent's opinion, adequately protect both Agent's
and Lender's interests in all or any portion of the Collateral and to
ensure that each Credit Party is protected by insurance in amounts and
with coverage customary for its industry. If requested by Agent, each
Credit Party shall deliver to Agent from time to time a report of a
reputable insurance broker, satisfactory to Agent, with respect to its
insurance policies.
(c) Each Borrower shall deliver to Agent, in form and
substance satisfactory to Agent, endorsements to (i) all "All Risk" and
business interruption insurance naming Agent, on behalf of itself and
Lenders, as loss payee, and (ii) all general liability and other
liability policies naming Agent, on behalf of itself and Lenders, as
additional insured. Each Borrower irrevocably makes, constitutes and
appoints Agent (and all
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officers, employees or agents designated by Agent), so long as any
Default or Event of Default shall have occurred and be continuing or
the anticipated insurance proceeds exceed $10,000,000, as such
Borrower's true and lawful agent and attorney-in-fact for the purpose
of making, settling and adjusting claims under such "All Risk" policies
of insurance, endorsing the name of such Borrower on any check or other
item of payment for the proceeds of such "All Risk" policies of
insurance and for making all determinations and decisions with respect
to such "All Risk" policies of insurance. Agent shall have no duty to
exercise any rights or powers granted to it pursuant to the foregoing
power-of-attorney. Borrower Representative shall promptly notify Agent
of any loss, damage, or destruction to the Collateral in the amount of
$250,000 or more, whether or not covered by insurance. After deducting
from such proceeds the expenses, if any, incurred by Agent in the
collection or handling thereof, Agent may, at its option, apply such
proceeds to the reduction of the Obligations in accordance with Section
1.3(d), or permit or require the applicable Borrower to use such money,
or any part thereof, to replace, repair, restore or rebuild the
Collateral in a diligent and expeditious manner with materials and
workmanship of substantially the same quality as existed before the
loss, damage or destruction. Notwithstanding the foregoing, (x) if the
casualty giving rise to such insurance proceeds would not reasonably be
expected to have a Material Adverse Effect (without regard to the
second sentence of the definition of Material Adverse Effect), (y) such
insurance proceeds do not exceed $10,000,000 in the aggregate, and (z)
so long as no Default or Event of Default then exists, then Agent shall
permit the applicable Borrower to replace, restore, repair or rebuild
the property; provided that if such Borrower shall not have completed
or entered into binding agreements to complete such replacement,
restoration, repair or rebuilding within 180 days of such casualty,
Agent may apply such insurance proceeds to the Obligations in
accordance with Section 1.3(d). All insurance proceeds which are to be
made available to any Borrower to replace, repair, restore or rebuild
the Collateral shall be deposited in a cash collateral account held by
Agent or under Agent's control and subject to a first and prior lien in
favor of Agent to secure the Obligations. Thereafter, such funds shall
be made available to that Borrower to provide funds to replace, repair,
restore or rebuild the Collateral as follows: (i) Borrower
Representative shall request that a release from the cash collateral
account be made to such Borrower in the amount requested to be
released; and (ii) so long as the conditions set forth in Section 2.2
have been met, Agent shall release funds from the cash collateral
account. To the extent not used to replace, repair, restore or rebuild
the Collateral, such insurance proceeds shall be applied in accordance
with Section 1.3(d).
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5.5. Compliance with Laws. Each Credit Party shall comply with all
federal, state, local and foreign laws and regulations applicable to it,
including those relating to ERISA and labor matters and Environmental Laws and
Environmental Permits, except to the extent (x) any Credit Party shall be
contesting such law, regulation or ordinance, in good faith by appropriate
proceedings, and reserves in conformity with GAAP have been provided therefor on
the books of such Credit Party or (y) that the failure to comply, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
5.6. Supplemental Disclosure. From time to time as may be reasonably
requested by Agent (which request will not be made more frequently than once
each year absent the occurrence and continuance of a Default or an Event of
Default), the Credit Parties shall supplement such of the Disclosure Schedules
hereto as may be reasonably requested by Agent, or any representation herein or
in any other Loan Document, with respect to any matter hereafter arising which,
if existing or occurring at the date of this Agreement, would have been required
to be set forth or described in such Disclosure Schedule or as an exception to
such representation or which is necessary to correct any information in such
Disclosure Schedule or representation which has been rendered inaccurate thereby
(and, in the case of any supplements to any Disclosure Schedule, such Disclosure
Schedule shall be appropriately marked to show the changes made therein);
provided that (a) no such supplement to any such Disclosure Schedule or
representation shall be or be deemed a waiver of any Default or Event of Default
resulting from the matters disclosed therein, except as consented to by Agent
and Requisite Lenders in writing; and (b) no supplement shall be required as to
representations and warranties that relate solely to the Closing Date.
5.7. Intellectual Property. Each Credit Party will conduct its business
and affairs without infringement of or interference with any Intellectual
Property of any other Person in any material respect.
5.8. Environmental Matters. Each Credit Party shall and shall cause
each Person within its control to: (a) conduct its operations and keep and
maintain its Real Estate in compliance with all Environmental Laws and
Environmental Permits other than noncompliance which could not reasonably be
expected to have a Material Adverse Effect; (b) implement any and all
investigation, remediation, removal and response actions which are appropriate
or necessary to comply with Environmental Laws and Environmental Permits
pertaining to the presence, generation, treatment, storage, use, disposal,
transportation or Release of any Hazardous Material on, at, in, under, above,
to, from or about any of its Real Estate; (c) notify Agent promptly after such
Credit Party becomes aware of any violation of Environmental Laws or
Environmental Permits or any Release on, at, in, under, above, to, from or about
any Real Estate which is reasonably likely to have a Material Adverse Effect;
and (d) promptly forward to Agent a copy of any order, notice, request for
information or any communication or report received by such Credit Party in
connection with any such violation or Release or any other matter relating to
any Environmental Laws or Environmental Permits that could reasonably be
expected to result in a Material Adverse Effect, in each case whether or not the
Environmental Protection Agency or any Governmental Authority has taken or
threatened any action in connection with any such violation, Release or other
matter. If Agent at any time has a reasonable basis to believe that there may be
a violation of any Environmental Laws or Environmental Permits by any Credit
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Party or any Environmental Liability arising thereunder, or a Release of
Hazardous Materials on, at, in, under, above, to, from or about any of its Real
Estate, which, in each case, could reasonably be expected to have a Material
Adverse Effect, then each Credit Party shall, with respect to such Real Estate,
upon Agent's written request cause the performance of such environmental audits
including subsurface sampling of soil and groundwater, and preparation of such
environmental reports, at Borrowers' expense, as Agent and Borrower's
Representative may mutually agree, or, if any Default of Event of Default then
exists and is continuing, as Agent may from time to time request, which shall be
conducted by reputable environmental consulting firms reasonably acceptable to
Agent and shall be in form and substance acceptable to Agent.
5.9. Landlords' Agreements, Mortgagee Agreements and Bailee Letters.
Each Credit Party shall use its best efforts to obtain a landlord's agreement,
mortgagee agreement or bailee letter, as applicable, from the lessor of each
leased property or mortgagee of owned property or with respect to any warehouse,
processor or converter facility or other location where Collateral is located,
which agreement or letter shall contain an acknowledgement that the landlord,
mortgagee or bailee is holding the Collateral for Agent and a waiver or
subordination of all Liens or claims that the landlord, mortgagee or bailee may
assert against the Inventory or Collateral at that location, and shall otherwise
be satisfactory in form and substance to Agent. No real property or warehouse
space shall be leased or acquired by any Credit Party after the Closing Date and
no Inventory shall be shipped to a processor or converter under arrangements
established after the Closing Date without the prior written consent of Agent
or, unless and until a satisfactory landlord or mortgagee agreement or bailee
letter, as appropriate, shall first have been obtained with respect to such
location. Each Credit Party shall timely and fully pay and perform its
obligations under all leases and other agreements with respect to each leased
location or public warehouse where any Collateral is or may be located.
5.10. Further Assurances. Each Credit Party executing this Agreement
agrees that it shall and shall cause each other Credit Party to, at such Credit
Party's expense and upon request of Agent, duly execute and deliver, or cause to
be duly executed and delivered, to Agent such further instruments and do and
cause to be done such further acts as may be necessary or proper in the
reasonable opinion of Agent to carry out more effectively the provisions and
purposes of this Agreement or any other Loan Document.
5.11. Revolving Loan. Borrowers shall keep the Revolving Credit
Facility in place until the Termination Date, and shall not, without the prior
written consent of Agent, (a) make any amendment thereto which has the effect of
(i) increasing or decreasing the face amount thereof, (ii) shortening the
maturity thereof, (iii) restricting, limiting or reducing the availability or
the reserve established thereunder, (iv) increasing the interest rate, (v)
changing any default or event of default other than to delete or make less
restrictive any default provision therein, or add any covenant with respect to
the Revolving Credit Facility; (vi) changing or amending any other term if such
change or amendment would materially increase the obligations of Borrowers or
confer additional material rights to the lender under the Revolving Credit
Facility, or, (b) except as provided in Section 2.1(d), collateralize the
Revolving Credit Facility with assets of any Credit Party without the prior
written consent of Agent and the Lenders.
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5.12. Appraisals. Each Credit Party shall, upon Agent's written
request, (i) cause the performance of such appraisals of the Collateral
(excluding the Real Estate), at Borrowers' expense, as Agent may from time to
time reasonably request, which shall be conducted by reputable firms reasonably
acceptable to Agent and shall be in form and substance acceptable to Agent, and
(ii) permit Agent or its representatives to have access to all Real Estate for
the purpose of conducting such appraisals as Agent deems appropriate; provided
that if an Event of Default shall not have occurred, Agent shall request such
appraisals no more frequently than once annually from and after the Closing
Date. Agent agrees with the other Lenders to require or cause the performance of
such annual appraisals as set forth herein. Borrowers shall reimburse Agent for
the costs of such appraisals and the same will constitute a part of the
Obligations secured hereunder. Agent agrees to use reasonable efforts to limit
the costs of such appraisals to not more than $75,000 per year without limiting
the scope of any such appraisal. Agent agrees to notify Borrower Representative
if any such appraisal exceeds or is anticipated to exceed such amount.
5.13. Dissolved Subsidiaries. Borrowers will use their best efforts to
wind up the affairs of the Dissolved Subsidiaries and dissolve the Dissolved
Subsidiaries on or before July 1, 2002.
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally agrees
as to all Credit Parties that, without the prior written consent of Agent and
the Requisite Lenders, from and after the date hereof until the Termination
Date:
6.1. Mergers, Subsidiaries, Etc. No Credit Party shall directly or
indirectly, by operation of law or otherwise, (a) form or acquire any
Subsidiary, or (b) merge with, consolidate with, acquire all or substantially
all of the assets or capital stock of, or otherwise combine with or acquire, any
Person, except that any Borrower may merge with another Borrower, provided that
Borrower Representative shall be the survivor of any such merger to which it is
a party.
6.2. Investments; Loans and Advances. Except as otherwise expressly
permitted by this Section 6, no Credit Party shall make or permit to exist any
investment in, or make, accrue or permit to exist loans or advances of money to,
any Person, through the direct or indirect lending of money, holding of
securities or otherwise, except that (a) Borrowers may hold investments
comprised of notes payable, or stock or other securities issued by Account
Debtors to any Borrower pursuant to negotiated agreements with respect to
settlement of such Account Debtor's Accounts in the ordinary course of business,
so long as Borrowers deliver physical possession of such note payable, stock or
other security to Agent along with all endorsements and stock powers requested
by Agent with respect to any such note payable, stock or security that exceeds
$100,000; (b) each Credit Party may maintain its existing investments in its
Subsidiaries as of the Closing Date; (c) the Revolving Credit Cash Collateral;
(d) so long as no Default or Event of Default shall have occurred and be
continuing, Borrowers may invest (x) up to $500,000 in the aggregate at any time
in which an outstanding balance exists on the Revolving Credit Facility, or (y)
its available unrestricted cash balances at any time in which no outstanding
balance on the Revolving Credit Facility exists, subject to Control Letters in
favor of Agent for the benefit of Lenders or otherwise subject to a perfected
security interest in favor of Agent for the benefit of
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Lenders, in (i) marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof maturing within
one year from the date of acquisition thereof, (ii) commercial paper maturing no
more than one year from the date of creation thereof and currently having the
highest rating obtainable from either Standard & Poor's Ratings Group or ▇▇▇▇▇'▇
Investors Service, Inc., (iii) certificates of deposit, maturing no more than
one year from the date of creation thereof, issued by commercial banks
incorporated under the laws of the United States of America, each having
combined capital, surplus and undivided profits of not less than $200,000,000
and having a senior unsecured rating of "A" or better by a nationally recognized
rating agency (an "A Rated Bank"), (iv) time deposits, maturing no more than 30
days from the date of creation thereof with A Rated Banks and (v) mutual funds
that invest solely in one or more of the investments described in clauses (i)
through (iv) above; (e) Borrowers may hold the AWI Agreement and the Polymer
Stock, and (f) Borrowers may hold notes payable or other indebtedness from any
Foreign Subsidiary of any Credit Party, provided that (A) each such Foreign
Subsidiary shall have executed and delivered to each such Credit Party, a demand
note (collectively, the "Intercompany Notes") to evidence any such intercompany
Indebtedness owing at any time by such Foreign Subsidiary to such Credit Party,
which Intercompany Notes shall be in form and substance satisfactory to Agent
and shall be pledged and delivered to Agent pursuant to a pledge agreement or
security agreement in form and content satisfactory to Agent in its sole
discretion as additional collateral security for the Obligations, (B) each
Credit Party shall record all intercompany transactions on its books and records
in a manner consistent with past practices, (C) at the time any such
intercompany loan or advance is made by any Borrower to any Foreign Subsidiary
and after giving effect thereto, each such Borrower shall be Solvent, (D) no
Default or Event of Default exists or would occur and be continuing after giving
effect to any such proposed intercompany loan, (E) the recipient of such
intercompany loans shall be creditworthy as determined by Agent, and (F) such
intercompany loans do not exceed at any time, in the aggregate, the sum of
$5,000,000.
6.3. Indebtedness.
(a) No Credit Party shall create, incur, assume or permit to
exist any Indebtedness, except (without duplication) (i) Indebtedness
secured by purchase money security interests and Capitalized Leases
permitted in clause (c) of Section 6.7; (ii) the Loans and the other
Obligations; (iii) unfunded pension fund and other employee benefit
plan obligations and liabilities to the extent they are permitted to
remain unfunded under applicable law; (iv) existing Indebtedness
described in Disclosure Schedule (6.3) and refinancings thereof or
amendments or modifications thereto which do not have the effect of
increasing the principal amount thereof or changing the amortization
thereof (other than to extend the same) and which are otherwise on
terms and conditions no less favorable to any Credit Party, Agent or
any Lender, as determined by Agent, than the terms of the Indebtedness
being refinanced, amended or modified; (v) the Revolving Credit
Facility and any letter of credit issued pursuant thereto; (vi)
Subordinated Debt with terms and in form and substance satisfactory to
Agent and Lenders in their sole discretion; (vii) Indebtedness in
respect of Taxes, assessments, governmental charges or levies and
claims for labor, materials and supplies to the extent that payment
thereof shall not at the time be required to be made in accordance with
the provisions of Section 5.2; (viii) Indebtedness in favor of Prior
Lenders consisting of reimbursement obligations
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arising out of letters of credit issued by Prior Lenders under the
Prior Lender Credit Agreement provided the same are fully cash
collateralized (the "Prior Lender Letter of Credit Cash Collateral"),
(ix) Indebtedness not otherwise permitted by this Section of not more
than $1,000,000 in the aggregate at any time outstanding; and (x)
Indebtedness consisting of intercompany loans by any Borrower to any
other Borrower.
(b) No Credit Party shall, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any,
interest or other amount payable in respect of any Indebtedness, other
than (i) the Obligations, (ii) Indebtedness secured by a Permitted
Encumbrance if the asset securing such Indebtedness has been sold or
otherwise disposed of in accordance with Sections 6.8(b) or (c) and
(iii) other Indebtedness (excluding Subordinated Debt) not in excess of
$500,000.
6.4. Employee Loans and Affiliate Transactions.
(a) No Credit Party shall enter into or be a party to any
transaction with any other Credit Party or any Affiliate thereof except
in the ordinary course of and pursuant to the reasonable requirements
of such Credit Party's business and upon fair and reasonable terms that
are no less favorable to such Credit Party than would be obtained in a
comparable arm's length transaction with a Person not an Affiliate of
such Credit Party. In addition, if any such transaction or series of
related transactions involves payments in excess of $100,000 in the
aggregate, the terms of these transactions if not previously disclosed
in Disclosure Schedule (6.4(a)) must be disclosed in advance to Agent
and Lenders. All such transactions existing as of the date hereof are
described on Disclosure Schedule (6.4(a)).
(b) No Credit Party shall enter into any lending or borrowing
transaction with any employees of any Credit Party, except loans to
their respective employees on an arm's-length basis in the ordinary
course of business consistent with past practices for travel expenses,
relocation costs and similar purposes and stock option financing up to
a maximum of $250,000 in the aggregate at any one time outstanding.
(c) Except to comply with employment agreements existing as of
the Closing Date, Credit Parties shall not increase the direct or
indirect compensation (excluding stock options) of each of the ten most
highly compensated employees of the Credit Parties, by more than 10%
per annum in excess of the current compensation level for those
employees, expressed as a dollar amount and set forth in Disclosure
Schedule (6.4(c)).
6.5. Capital Structure and Business. No Credit Party shall (a) make any
changes in any of its business objectives, purposes or operations which could in
any way adversely affect the repayment of the Loans or any of the other
Obligations or could reasonably be expected to have or result in a Material
Adverse Effect, (b) make any change in its capital structure as described on
Disclosure Schedule (3.8), including the issuance of any shares of Stock,
warrants or other securities convertible into Stock or any revision of the terms
of its outstanding Stock, or (c) amend its charter or bylaws in a manner which
would adversely affect Agent or Lenders or such Credit Party's duty or ability
to repay the Obligations. No Credit Party shall engage in any
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business other than the businesses currently engaged in by it or businesses
reasonably related thereto.
6.6. Guaranteed Indebtedness. No Credit Party shall create, incur,
assume or permit to exist any Guaranteed Indebtedness except (a) by endorsement
of instruments or items of payment for deposit to the general account of any
Credit Party, and (b) for Guaranteed Indebtedness incurred for the benefit of
any other Credit Party if the primary obligation is expressly permitted by this
Agreement.
6.7. Liens. No Credit Party shall, and Agent does not authorize any
Credit Party to, create, incur, assume or permit to exist any Lien on or with
respect to its Accounts or any of its other properties or assets (whether now
owned or hereafter acquired) except for (a) Permitted Encumbrances; (b) Liens in
existence on the date hereof and summarized on Disclosure Schedule (6.7); (c)
Liens securing the Revolving Credit Facility to the extent permitted by Section
2.1(d), (d) Liens created after the date hereof by conditional sale or other
title retention agreements (including Capital Leases) or in connection with
purchase money Indebtedness with respect to Equipment and Fixtures acquired by
any Credit Party in the ordinary course of business, involving the incurrence of
an aggregate amount of purchase money Indebtedness and Capital Lease Obligations
of not more than $500,000 outstanding at any one time for all such Liens
(provided that such Liens attach only to the assets subject to such purchase
money debt and such Indebtedness is incurred within twenty (20) days following
such purchase and does not exceed 100% of the purchase price of the subject
assets), and (e) Liens in favor of Prior Lenders on the Prior Lender Letter of
Credit Cash Collateral. In addition, no Credit Party shall become a party to any
agreement, note, indenture or instrument, or take any other action, which would
prohibit the creation of a Lien on any of its properties or other assets in
favor of Agent, on behalf of itself and Lenders, as additional collateral for
the Obligations, except operating leases, Capital Leases or Licenses which
prohibit Liens upon the assets that are subject thereto.
6.8. Sale of Stock and Assets. No Credit Party shall, and Agent does
not authorize any Credit Party to, sell, transfer, convey, assign or otherwise
dispose of any of its properties or other assets, including the capital Stock of
any of its Domestic Subsidiaries (whether in a public or a private offering or
otherwise) or any of their Accounts, other than (a) the sale of Inventory in the
ordinary course of business, (b) with Agent's prior written consent (such
consent not to be unreasonably withheld), the sale, transfer, conveyance or
other disposition by a Credit Party of Equipment during the term of this
Agreement having an Orderly Liquidation Value not exceeding $50,000,000 in the
aggregate, provided however, no disposition may occur if and to the extent that
any such contemplated disposition is for a cash amount which is less than the
Orderly Liquidation Value of any such asset, (c) the sale, transfer, conveyance
or other disposition by Borrowers of the AWI Agreement or the Polymer Stock, (d)
transfers between Credit Parties provided that Agent maintains a first priority
perfected security interest in the asset transferred, (e) sales of the Capital
Stock of any Foreign Subsidiary, and (f) the sale, transfer, conveyance or other
disposition by a Credit Party of Equipment or Fixtures that are obsolete or no
longer used or useful in such Credit Party's business and having a value not
exceeding $1,000,000 in the aggregate in any Fiscal Year, provided such
Equipment or Fixtures is replaced by Equipment or Fixtures of comparable value
or worth and provided further that Agent maintains a first priority perfected
security interest in the replacement Equipment or Fixtures.
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With respect to any disposition of assets or other properties permitted pursuant
to clause (b) or (c) above, Agent agrees on reasonable prior written notice to
release its Lien on such assets or other properties in order to permit the
applicable Credit Party to effect such disposition and shall execute and deliver
to Borrowers, at Borrowers' expense, appropriate UCC-3 termination statements
and other releases as reasonably requested by Borrowers.
6.9. ERISA. No Credit Party shall cause or permit to occur an event
which could result in the imposition of a Lien under Section 412 of the IRC or
Section 302 or 4068 of ERISA or cause or permit to occur an ERISA Event to the
extent such ERISA Event could reasonably be expected to have a Material Adverse
Effect.
6.10. Financial Covenants. Borrowers shall not breach or fail to comply
with any of the Financial Covenants (the "Financial Covenants") set forth in
Annex G.
6.11. Intentionally Omitted.
6.12. Sale-Leasebacks. Except for the synthetic lease in Brownsville,
Texas, no Credit Party shall engage in any sale-leaseback or synthetic lease
involving any of its assets.
6.13. Cancellation of Indebtedness. No Credit Party shall cancel any
claim or debt owing to it, except for (a) reasonable consideration negotiated on
an arm's-length basis and in the ordinary course of its business consistent with
past practices, and (b) customary write downs and charge offs for bad debts
consistent with past practices.
6.14. Restricted Payments. No Credit Party shall make any Restricted
Payment, except (a) intercompany loans and advances between Borrowers to the
extent permitted by Section 6.3 above, (b) dividends and distributions by
Subsidiaries of any Borrower paid to such Borrower, (c) employee loans permitted
under Section 6.4(b) above, (d) scheduled payments of interest with respect to
the Subordinated Debt; (e) payment of directors' fees and reimbursable expenses
of directors consistent with past practices; (f) payment of a cash dividend in
any calendar quarter of not more than $500,000 in the aggregate with respect to
International's common stock; and (g) Permitted Company Redemption on or after
January 1, 2001; provided that no Default or Event of Default shall have
occurred and be continuing or would result after giving effect to any payment
pursuant to clause (d), or (f) or (g) above.
6.15. Change of Corporate Name or Location; Change of Fiscal Year. No
Credit Party shall (a) change its corporate name, or (b) change its chief
executive office, principal place of business, state of incorporation, corporate
offices or warehouses or locations at which Collateral is held or stored, or the
location of its records concerning the Collateral, in any case without at least
thirty (30) days prior written notice to Agent and after Agent's written
acknowledgment that any reasonable action requested by Agent in connection
therewith, including to continue the perfection of any Liens in favor of Agent,
on behalf of Lenders, in any Collateral, has been completed or taken, and
provided that any such new location shall be in the continental United States.
No Credit Party shall change its Fiscal Year. Without limiting the foregoing, no
Credit Party shall change its name, identity or corporate structure in any
manner that might make any financing statement or continuation statement filed
in connection herewith seriously misleading within the meaning Section 9-506 of
the Code or any other then applicable provision of the Code
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except upon prior written notice to Agent and Lenders and after Agent's written
acknowledgement that any reasonable action requested by Agent in connection
therewith, including to continue the perfection of any Liens in favor of Agent,
on behalf of Lenders, in any Collateral, has been completed or taken.
6.16. No Impairment of Intercompany Transfers. No Credit Party shall
directly or indirectly enter into or become bound by any agreement, instrument,
indenture or other obligation (other than this Agreement and the other Loan
Documents) which could directly or indirectly restrict, prohibit or require the
consent of any Person with respect to the payment of dividends or distributions
or the making or repayment of intercompany loans by a Subsidiary of any Borrower
to any Borrower or between Borrowers.
6.17. No Speculative Transactions. No Credit Party shall engage in any
transaction that is speculative and not for hedging purposes involving commodity
options, futures contracts or similar transactions, except solely to hedge
against fluctuations in the prices of commodities owned or purchased by it and
the values of foreign currencies receivable or payable by it and interest swaps,
caps or collars.
6.18. Leases. No Credit Party shall enter into any operating lease for
Equipment or Real Estate, if the aggregate of all such operating lease payments
payable in any year for Borrowers and their Domestic Subsidiaries on a
consolidated basis would exceed $6,000,000.
6.19. Changes Relating to Subordinated Debt. No Credit Party shall
change or amend the terms of any Subordinated Debt (or any indenture or
agreement in connection therewith) if the effect of such amendment is to: (a)
increase the interest rate on such Subordinated Debt; (b) change the dates upon
which payments of principal or interest are due on such Subordinated Debt other
than to extend such dates; (c) change any default or event of default other than
to delete or make less restrictive any default provision therein, or add any
covenant with respect to such Subordinated Debt; (d) change the redemption or
prepayment provisions of such Subordinated Debt other than to extend the dates
therefor or to reduce the premiums payable in connection therewith; (e) grant
any security or collateral to secure payment of such Subordinated Debt; or (f)
change or amend any other term if such change or amendment would materially
increase the obligations of the obligor or confer additional material rights to
the holder of such Subordinated Debt in a manner adverse to any Credit Party,
Agent or any Lender.
6.20. Credit Parties Other than Borrowers. None of the Credit Parties
other than Borrowers shall engage in any assembly, manufacturing or distribution
trade or business, or own any material assets or incur any Indebtedness or
Guaranteed Indebtedness (other than the Obligations).
7. TERM
7.1. Termination. The financing arrangements contemplated hereby shall
be in effect until the Commitment Termination Date, and the Loans and all other
Obligations shall be automatically due and payable in full on such date.
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7.2. Survival of Obligations Upon Termination of Financing
Arrangements. Except as otherwise expressly provided for in the Loan Documents,
no termination or cancellation (regardless of cause or procedure) of any
financing arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Credit Parties or the rights of Agent
and Lenders relating to any unpaid portion of the Loans or any other
Obligations, due or not due, liquidated, contingent or unliquidated or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the Commitment Termination
Date. Except as otherwise expressly provided herein or in any other Loan
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Credit Parties, and all rights of Agent
and each Lender, all as contained in the Loan Documents, shall not terminate or
expire, but rather shall survive any such termination or cancellation and shall
continue in full force and effect until the Termination Date; provided however,
that in all events the provisions of Section 11 and the indemnities contained in
the Loan Documents shall survive the Termination Date for a period of seven (7)
years.
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES
8.1. Events of Default. The occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute an "Event
of Default" hereunder:
(a) Any Borrower (i) fails to make any payment of principal
of, or interest on, or Fees owing in respect of, the Loans or any of
the other Obligations within three (3) Business Days of when such
payment is due and payable, or (ii) fails to pay or reimburse Agent or
Lenders for any expense reimbursable hereunder or under any other Loan
Document within ten (10) days following Agent's demand for such
reimbursement or payment of expenses.
(b) Any Credit Party shall fail or neglect to perform, keep or
observe any of the provisions of Sections 1.4, 1.8, 5.4, 5.8 or 6, or
any of the provisions set forth in Annexes C or G, respectively.
(c) Any Borrower shall fail or neglect to perform, keep or
observe any of the provisions of Section 4 or any provisions set forth
in Annexes E or F, respectively, and the same shall remain unremedied
for five (5) days or more.
(d) Any Credit Party shall fail or neglect to perform, keep or
observe any other provision of this Agreement or of any of the other
Loan Documents (other than any provision embodied in or covered by any
other clause of this Section 8.1) and the same shall remain unremedied
for thirty (30) days or more.
(e) A default or breach shall occur under any other agreement,
document or instrument to which any Credit Party is a party which is
not cured within any applicable grace period, and such default or
breach (i) involves the failure to make any payment when due in respect
of any Indebtedness (other than the Obligations) of any Credit Party in
excess of $4,000,000 in the aggregate, or (ii) causes, or permits any
holder of such Indebtedness or a trustee to cause, Indebtedness or a
portion thereof in excess of
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$4,000,000 in the aggregate to become due prior to its stated maturity
or prior to its regularly scheduled dates of payment.
(f) Any representation or warranty herein or in any Loan
Document or in any written statement, report, financial statement or
certificate made or delivered to Agent or any Lender by any Credit
Party is untrue or incorrect in any material respect as of the date
when made or deemed made.
(g) Assets of any Credit Party with a book value of $750,000
or more shall be attached, seized, levied upon or subjected to a writ
or distress warrant, or come within the possession of any receiver,
trustee, custodian or assignee for the benefit of creditors of any
Credit Party and such condition continues for thirty (30) days or more.
(h) A case or proceeding shall have been commenced against any
Credit Party seeking a decree or order in respect of any Credit Party
(i) under Title 11 of the United States Code, as now constituted or
hereafter amended or any other applicable federal, state or foreign
bankruptcy or other similar law, (ii) appointing a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for
any Credit Party or of any substantial part of any such Person's
assets, or (iii) ordering the winding-up or liquidation of the affairs
of any Credit Party, and such case or proceeding shall remain
undismissed or unstayed for sixty (60) days or more or such court shall
enter a decree or order granting the relief sought in such case or
proceeding.
(i) Any Credit Party (i) shall file a petition seeking relief
under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable federal, state or foreign
bankruptcy or other similar law, (ii) shall fail to contest in a timely
and appropriate manner or shall consent to the institution of
proceedings thereunder or to the filing of any such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) of
any Credit Party or of any substantial part of any such Person's
assets, (iii) shall make an assignment for the benefit of creditors,
(iv) shall take any corporate action in furtherance of any of the
foregoing; or (v) shall admit in writing its inability to, or shall be
generally unable to, pay its debts as such debts become due.
(j) A final judgment or judgments for the payment of money
which would result in a Material Adverse Effect (other than a judgment
for which a financially sound and reputable insurer has admitted
liability) shall be rendered against any Credit Party and the same
shall not, within sixty (60) days after the entry thereof, have been
discharged or execution thereof stayed or bonded pending appeal, or
shall not have been discharged prior to the expiration of any such
stay.
(k) Any material provision of any Loan Document shall for any
reason cease to be valid, binding and enforceable in accordance with
its terms (or any Credit Party shall challenge the enforceability of
any Loan Document or shall assert in writing, or engage in any action
or inaction based on any such assertion, that any provision of any of
the Loan Documents has ceased to be or otherwise is not valid, binding
and enforceable in accordance with its terms), or any security interest
created under any Loan Document
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shall cease to be a valid and perfected first priority security
interest or Lien (except as otherwise permitted herein or therein) in
any of the Collateral purported to be covered thereby.
(l) Any Change of Control shall occur.
(m) Any event shall occur, whether or not insured or
insurable, as a result of which revenue-producing activities cease or
are substantially curtailed at any facility of Borrowers generating
more than 20% of Borrowers' consolidated revenues for the Fiscal Year
preceding such event and such cessation or curtailment continues for
more than twenty (20) days (or, if any such event is insured, including
business interruption insurance at the levels necessary to compensate
such affected Borrower for its losses during such period, one hundred
eighty (180) days), except where such event shall result in prepayments
to Agent under Section 1.3(d).
(n) Any default or breach by any Borrower shall occur and be
continuing under the Revolving Credit Facility or the Revolving Credit
Facility shall be terminated, reduced below the face amount of
$20,000,000, or International shall be unable to borrow the full amount
of Revolving Credit Facility (less any reserve thereunder to pay Fees
to Agent from time to time) for any reason.
(o) Any default or breach by any Borrower shall occur and be
continuing under any agreement, including without limitation, any
security agreement, pledge agreement, credit agreement or loan
agreement, any note, loan or lease, including without limitation, any
personal property lease, real property lease, synthetic lease or
aircraft lease, or any credit facility with or in favor of GE Capital,
either individually, or as agent for others, and any modification,
extension, amendment or restatement of any of the foregoing.
8.2. Remedies.
(a) If any Default or Event of Default shall have occurred and
be continuing, Agent may (and at the written request of Requisite
Lenders shall), without notice except as otherwise expressly provided
herein, increase the rate of interest applicable to the Loans to the
Default Rate.
(b) If any Event of Default shall have occurred and be
continuing, Agent may (and at the written request of the Requisite
Lenders shall), without notice, (i) declare all or any portion of the
Obligations, including all or any portion of any Loan to be forthwith
due and payable, all without presentment, demand, protest or further
notice of any kind, all of which are expressly waived by Borrowers and
each other Credit Party; and (ii) exercise any rights and remedies
provided to Agent under the Loan Documents and/or at law or equity,
including all remedies provided under the Code; provided, however, that
upon the occurrence of an Event of Default specified in Sections
8.1(g), (h) or (i), all of the Obligations shall become immediately due
and payable without declaration, notice or demand by any Person. If
Agent declares all or any portion of the Obligations to be due and
payable under clause (i) above, Agent shall use its best efforts to
promptly notify
-▇▇-
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ of such declaration, provided that failure to
notify shall not rescind or otherwise adversely impact any such
declaration.
8.3. Waivers by Credit Parties. Except as otherwise provided for in
this Agreement or by applicable law, each Credit Party waives (including for
purposes of Section 12): (a) presentment, demand and protest and notice of
presentment, dishonor, notice of intent to accelerate, notice of acceleration,
protest, default, nonpayment, maturity, release, compromise, settlement,
extension or renewal of any or all commercial paper, accounts, contract rights,
documents, instruments, chattel paper and guaranties at any time held by Agent
on which any Credit Party may in any way be liable, and hereby ratifies and
confirms whatever Agent may do in this regard, and (b) the benefit of all
valuation, appraisal, marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1. Assignment and Participations.
(a) The Credit Parties signatory hereto consent to any
Lender's assignment of, and/or sale of participations in, at any time
or times, the Loan Documents, Loans, and any Commitment or of any
portion thereof or interest therein, including any Lender's rights,
title, interests, remedies, powers or duties thereunder, whether
evidenced by a writing or not. Any assignment by a Lender shall (i)
require the consent of Agent (which such consent shall not be
unreasonably withheld or delayed), provided that any assignment to an
existing Lender or an Affiliate of an existing Lender shall not require
the consent of the Agent, provided that the parties to any such
assignment have given prior written notice of such assignment to Agent,
(ii) require the execution of an assignment agreement (an "Assignment
Agreement") substantially in the from attached hereto as Exhibit 9.1(a)
and otherwise in form and substance satisfactory to, and acknowledged
by, Agent; (iii) be conditioned on such assignee Lender representing to
the assigning Lender and Agent that it is purchasing the applicable
Loans to be assigned to it for its own account, for investment purposes
and not with a view to the distribution thereof; (iv) if a partial
assignment, be in an amount at least equal to $5,000,000 and, after
giving effect to any such partial assignment, the assigning Lender
shall have retained Commitments in an amount at least equal to
$5,000,000; and (v) include a payment to Agent of an assignment fee of
$3,500. In the case of an assignment by a Lender under this Section
9.1, the assignee shall have, to the extent of such assignment, the
same rights, benefits and obligations as it would if it were a Lender
hereunder. The assigning Lender shall be relieved of its obligations
hereunder with respect to its Commitments or assigned portion thereof
from and after the date of such assignment. Each Borrower hereby
acknowledges and agrees that any assignment will give rise to a direct
obligation of Borrowers to the assignee and that the assignee shall be
considered to be a "Lender". In all instances, each Lender's liability
to make Loans hereunder shall be several and not joint and shall be
limited to such Lender's Pro Rata Share of the applicable Commitment.
In the event Agent or any Lender assigns or otherwise transfers all or
any part of the Obligations, Agent shall so notify Borrowers and
Borrowers shall, upon the request of Agent, execute new Notes in
exchange for the Notes, if any, being assigned. Notwithstanding the
foregoing provisions of this Section 9.1(a), any Lender
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may at any time pledge the Obligations held by it and such Lender's
rights under this Agreement and the other Loan Documents to a Federal
Reserve Bank, and any Lender that is an investment fund may assign the
Obligations held by it and such Lender's rights under this Agreement
and the other Loan Documents to another investment fund managed by the
same investment advisor; provided, however, that no such pledge to a
Federal Reserve Bank shall release such Lender from such Lender's
obligations hereunder or under any other Loan Document.
(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts
payable by Borrowers hereunder shall be determined as if that Lender
had not sold such participation. Solely for purposes of Sections 1.13,
1.15, 1.16 and 9.8, each Borrower acknowledges and agrees that a
participation shall give rise to a direct obligation of Borrowers to
the participant and the participant shall be considered to be a
"Lender". Except as set forth in the preceding sentence no Borrower or
Credit Party shall have any obligation or duty to any participant.
Neither Agent nor any Lender (other than the Lender selling a
participation) shall have any duty to any participant and may continue
to deal solely with the Lender selling a participation as if no such
sale had occurred.
(c) Except as expressly provided in this Section 9.1, no
Lender shall, as between Borrowers and that Lender, or Agent and that
Lender, be relieved of any of its obligations hereunder as a result of
any sale, assignment, transfer or negotiation of, or granting of
participation in, all or any part of the Loans, the Notes or other
Obligations owed to such Lender.
(d) Each Credit Party executing this Agreement shall assist
any Lender permitted to sell assignments or participations under this
Section 9.1 as reasonably required to enable the assigning or selling
Lender to effect any such assignment or participation, including the
execution and delivery of any and all agreements, notes and other
documents and instruments as shall be requested and, if requested by
Agent, the preparation of informational materials for, and the
participation of management in meetings with, potential assignees or
participants. Each Credit Party executing this Agreement shall certify
the correctness, completeness and accuracy of all descriptions of the
Credit Parties and their affairs contained in any selling materials
provided by them and all other information provided by them and
included in such materials, except that any Projections delivered by
Borrowers shall only be certified by Borrowers as having been prepared
by Borrowers in compliance with the representations contained in
Section 3.4(c).
(e) A Lender may furnish any information concerning Credit
Parties in the possession of such Lender from time to time to assignees
and participants (including prospective assignees and participants) but
in no case shall such material be provided to any competitor, customer
or supplier of a Credit Party without the consent of such Credit Party.
Each Lender shall obtain from assignees or participants confidentiality
covenants substantially equivalent to those contained in Section 11.8
prior to providing any information concerning any Credit Party.
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(f) So long as no Event of Default shall have occurred and be
continuing, no Lender shall assign or sell participations in any
portion of its Loans or Commitments to a potential Lender or
participant, if, as of the date of the proposed assignment or sale, the
assignee Lender or participant would be subject to capital adequacy or
similar requirements under Section 1.16(a), increased costs under
Section 1.16(b) or withholding taxes in accordance with Section
1.15(a).
9.2. Appointment of Agent.
(a) GE Capital is hereby appointed to act on behalf of all
Lenders as Agent under this Agreement and the other Loan Documents. The
provisions of this Section 9.2 are solely for the benefit of Agent and
Lenders and no Credit Party nor any other Person shall have any rights
as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement and the other
Loan Documents, Agent shall act solely as an agent of Lenders and does
not assume and shall not be deemed to have assumed any obligation
toward or relationship of agency or trust with or for any Credit Party
or any other Person. Agent shall have no duties or responsibilities
except for those expressly set forth in this Agreement and the other
Loan Documents. The duties of Agent shall be mechanical and
administrative in nature and Agent shall not have, or be deemed to
have, by reason of this Agreement, any other Loan Document or otherwise
a fiduciary relationship in respect of any Lender. Neither Agent nor
any of its Affiliates nor any of their respective officers, directors,
employees, agents or representatives shall be liable to any Lender for
any action taken or omitted to be taken by it hereunder or under any
other Loan Document, or in connection herewith or therewith, except for
damages caused by its or their own gross negligence or willful
misconduct.
(b) If Agent shall request instructions from Requisite Lenders
or all affected Lenders with respect to any act or action (including
failure to act) in connection with this Agreement or any other Loan
Document, then Agent shall be entitled to refrain from such act or
taking such action unless and until Agent shall have received
instructions from Requisite Lenders or all affected Lenders, as the
case may be, and Agent shall not incur liability to any Person by
reason of so refraining. Agent shall be fully justified in failing or
refusing to take any action hereunder or under any other Loan Document
(a) if such action would, in the opinion of Agent, be contrary to law
or the terms of this Agreement or any other Loan Document, (b) if such
action would, in the opinion of Agent, expose Agent to Environmental
Liabilities or (c) if Agent shall not first be indemnified to its
satisfaction by 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. Without limiting the foregoing, no Lender shall have any
right of action whatsoever against Agent as a result of Agent acting or
refraining from acting hereunder or under any other Loan Document in
accordance with the instructions of Requisite Lenders or all affected
Lenders, as applicable.
9.3. Agent's Reliance, Etc. Neither Agent nor any of its Affiliates nor
any of their respective directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by them under or in connection with
this Agreement or the other Loan Documents,
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except for damages caused by their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, Agent: (a) may treat the
payee of any Note as the holder thereof until Agent receives written notice of
the assignment or transfer thereof signed by such payee and in form satisfactory
to Agent; (b) may consult with legal counsel, independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements, warranties
or representations made in or in connection with this Agreement or the other
Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of any Credit Party or to
inspect the Collateral (including the books and records) of any Credit Party;
(e) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; and (f) shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopy, telegram,
cable or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
9.4. GE Capital and Affiliates. With respect to its Commitments
hereunder, GE Capital shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise the same as
though it was not Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include GE Capital in its individual capacity. GE
Capital and its Affiliates may lend money to, invest in, and generally engage in
any kind of business with, any Credit Party, any of their Affiliates and any
Person who may do business with or own securities of any Credit Party or any
such Affiliate, all as if GE Capital was not Agent and without any duty to
account therefor to Lenders. GE Capital and its Affiliates may accept fees and
other consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders. Each
Lender acknowledges the potential conflict of interest between GE Capital as a
Lender holding disproportionate interests in the Loans and GE Capital as Agent.
9.5. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the Financial Statements referred to in Section 3.4(a) and such other documents
and information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests in the Loans, and expressly
consents to, and waives any claim based upon, such conflict of interest.
9.6. Indemnification. Lenders agree to indemnify Agent (to the extent
not reimbursed by Credit Parties and without limiting the obligations of
Borrowers hereunder), ratably according to their respective Pro Rata Shares,
from and against any and all liabilities, obligations, losses,
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damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against Agent in any way relating to or arising out of this Agreement
or any other Loan Document or any action taken or omitted by Agent in connection
therewith; provided, however, that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from Agent's gross negligence
or willful misconduct. Without limiting the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including counsel fees) incurred by 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
and each other Loan Document, to the extent that Agent is not reimbursed for
such expenses by Credit Parties.
9.7. Successor Agent. Agent may resign at any time by giving not less
than thirty (30) days' prior written notice thereof to Lenders and Borrower
Representative. Upon any such resignation of Agent, the Requisite Lenders shall
have the right to appoint a successor Agent. If no successor Agent shall have
been so appointed by the Requisite Lenders and shall have accepted such
appointment within 30 days after the resigning Agent's giving notice of
resignation, then the resigning Agent may, on behalf of Lenders, appoint a
successor Agent, which shall be a Lender, as the case may be, if a Lender is
willing to accept such appointment, or otherwise shall be a commercial bank or
financial institution or a subsidiary of a commercial bank or financial
institution if such commercial bank or financial institution is organized under
the laws of the United States of America or of any State thereof and has a
combined capital and surplus of at least $300,000,000. If no successor Agent has
been appointed pursuant to the foregoing, by the 30th day after the date such
notice of resignation was given by the resigning Agent, such resignation shall
become effective and the Requisite Lenders, as applicable, shall thereafter
perform all the duties of Agent hereunder until such time, if any, as the
Requisite Lenders appoint a successor Agent as provided above. Any successor
Agent appointed by Requisite Lenders hereunder shall be subject to the approval
of Borrower Representative, such approval not to be unreasonably withheld or
delayed; provided that such approval shall not be required if a Default or an
Event of Default shall have occurred and be continuing. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall succeed to and become vested with all the rights, powers, privileges and
duties of the resigning Agent. Upon the earlier of the acceptance of any
appointment as Agent hereunder by a successor Agent or the effective date of the
resigning Agent's resignation, the resigning Agent shall be discharged from its
duties and obligations under this Agreement and the other Loan Documents, except
that any indemnity rights or other rights in favor of such resigning Agent shall
continue. After any resigning Agent's resignation hereunder, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement and the other Loan
Documents.
9.8. Setoff and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
each Lender and each holder of any Note is hereby authorized at any time or from
time to time, without notice to any Credit Party or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and to
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apply any and all balances held by it at any of its offices for the account of
any Borrower or Guarantor (regardless of whether such balances are then due to
such Borrower or Guarantor) and any other properties or assets any time held or
owing by that Lender or that holder to or for the credit or for the account of
any Borrower or Guarantor against and on account of any of the Obligations which
are not paid when due. Any Lender or holder of any Note exercising a right to
set off or otherwise receiving any payment on account of the Obligations in
excess of its Pro Rata Share thereof shall purchase for cash (and the other
Lenders or holders shall sell) such participations in each such other Lender's
or holder's Pro Rata Share of the Obligations as would be necessary to cause
such Lender to share the amount so set off or otherwise received with each other
Lender or holder in accordance with their respective Pro Rata Shares. Each
Credit Party that is a Borrower or Guarantor agrees, to the fullest extent
permitted by law, that (a) if an Event of Default under Section 8.1(a) exists or
the Obligations have been accelerated pursuant to Section 8.2(b), any Lender or
holder may exercise its right to set off with respect to amounts in excess of
its Pro Rata Share of the Obligations and may sell participations in such amount
so set off to other Lenders and holders (but the same shall not change the
amount of the Obligations due and owing to Lenders from Borrowers) and (b) any
Lender or holders so purchasing a participation in the Loans made or other
Obligations held by other Lenders or holders may exercise all rights of set-off,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender or holder were a direct holder of the Loans and the
other Obligations in the amount of such participation. Notwithstanding the
foregoing, if all or any portion of the set-off amount or payment otherwise
received is thereafter recovered from the Lender that has exercised the right of
set-off, the purchase of participations by that Lender shall be rescinded and
the purchase price restored without interest.
9.9. Information; Actions in Concert.
(a) Return of Payments.
(i) If Agent pays an amount to a Lender under this
Agreement in the belief or expectation that a related payment has been
or will be received by Agent from Borrowers and such related payment is
not received by Agent, then Agent will be entitled to recover such
amount from such Lender on demand without set-off, counterclaim or
deduction of any kind.
(ii) If Agent determines at any time that any amount
received by Agent under this Agreement must be returned to any Borrower
or paid to any other Person pursuant to any insolvency law or
otherwise, then, notwithstanding any other term or condition of this
Agreement or any other Loan Document, Agent will not be required to
distribute any portion thereof to any Lender. In addition, each Lender
will repay to Agent on demand any portion of such amount that Agent has
distributed to such Lender, together with interest at such rate, if
any, as Agent is required to pay to any Borrower or such other Person,
without set-off, counterclaim or deduction of any kind.
(b) Dissemination of Information. Agent will use reasonable
efforts to provide Lenders with any notice of Default or Event of
Default received by Agent from, or delivered by Agent to, any Credit
Party, with notice of any Event of Default of which Agent has actually
become aware and with notice of any action taken by Agent following
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any Event of Default; provided, however, that Agent shall not be liable
to any Lender for any failure to do so, except to the extent that such
failure is attributable to Agent's gross negligence or willful
misconduct. Lenders acknowledge that Borrowers are required to provide
Financial Statements and Collateral Reports to Agent in accordance with
Annexes E and F hereto, and Agent acknowledges that upon receipt Agent
shall promptly provide copies of such Financial Statements and
Collateral Reports to each Lender.
(c) Actions in Concert. Anything in this Agreement to the
contrary notwithstanding, each Lender hereby agrees with each other
Lender that no Lender shall take any action to protect or enforce its
rights arising out of this Agreement or the Notes (including exercising
any rights of set-off) without first obtaining the prior written
consent of Agent and Requisite Lenders, it being the intent of Lenders
that any such action to protect or enforce rights under this Agreement
and the Notes shall be taken in concert and at the direction or with
the consent of Agent.
10. SUCCESSORS AND ASSIGNS
10.1. Successors and Assigns. This Agreement and the other Loan
Documents shall be binding on and shall inure to the benefit of each Credit
Party, Agent, Lenders and their respective successors and assigns (including, in
the case of any Credit Party, a debtor-in-possession on behalf of such Credit
Party), except as otherwise provided herein or therein. No Credit Party may
assign, transfer, hypothecate or otherwise convey its rights, benefits,
obligations or duties hereunder or under any of the other Loan Documents without
the prior express written consent of Agent and Requisite Lenders. Any such
purported assignment, transfer, hypothecation or other conveyance by any Credit
Party without the prior express written consent of Agent and Required Lenders
shall be void. The terms and provisions of this Agreement are for the purpose of
defining the relative rights and obligations of each Credit Party, Agent, and
Lenders with respect to the transactions contemplated hereby and no Person shall
be a third party beneficiary of any of the terms and provisions of this
Agreement or any of the other Loan Documents.
11. MISCELLANEOUS
11.1. Complete Agreement; Modification of Agreement. The Loan Documents
constitute the complete agreement between the parties with respect to the
subject matter thereof and may not be modified, altered or amended except as set
forth in Section 11.2 below. Any letter of interest, commitment letter, and/or
fee letter (other than the GE Capital Fee Letter) and/or confidentiality
agreement between any Credit Party and Agent or any Lender or any of their
respective Affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this
Agreement.
11.2. Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by
Agent, no amendment, modification, termination or waiver of any
provision of this Agreement or any other Loan Document, or any consent
to any departure by any Credit Party therefrom, shall in any event be
effective unless the same shall be in writing and signed by Borrowers,
and by Requisite Lenders or all affected Lenders as applicable. Except
as set forth in clause (b)
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below, all such amendments, modifications, terminations or waivers
requiring the consent of any Lenders shall require the written consent
of Requisite Lenders.
(b) No amendment, modification, termination or waiver shall,
unless in writing and signed by Agent and each Lender directly affected
thereby, do any of the following: (i) increase the principal amount of
any Lender's Commitment (which action shall be deemed to directly
affect all Lenders); (ii) reduce the principal of, rate of interest on
or Fees payable with respect to any Loan of any affected Lender; (iii)
extend any scheduled payment date or final maturity date of the
principal amount of any Loan of any affected Lender; (iv) waive,
forgive, defer, extend or postpone any payment of interest or Fees as
to any affected Lender; (v) except as otherwise permitted herein or in
the other Loan Documents, release, agree to any subordinate lien on, or
permit any Credit Party to sell or otherwise dispose of, any Collateral
with a book value exceeding $5,000,000 in the aggregate (which action
shall be deemed to directly affect all Lenders); (vi) change the
percentage of the Commitments or of the aggregate unpaid principal
amount of the Loans which shall be required for Lenders or any of them
to take any action hereunder; and (vii) amend or waive this Section
11.2 or the definition of the term "Requisite Lenders", insofar as such
definition affects the substance of this Section 11.2. Furthermore, no
amendment, modification, termination or waiver affecting the rights or
duties of Agent under this Agreement or any other Loan Document shall
be effective unless in writing and signed by Agent, in addition to
Lenders required hereinabove to take such action. Each amendment,
modification, termination or waiver shall be effective only in the
specific instance and for the specific purpose for which it was given.
No amendment, modification, termination or waiver shall be required for
Agent to take additional Collateral pursuant to any Loan Document. No
amendment, modification, termination or waiver of any provision of any
Note shall be effective without the written concurrence of the holder
of that Note. No notice to or demand on any Credit Party in any case
shall entitle such Credit Party or any other Credit Party to any other
or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in
accordance with this Section 11.2 shall be binding upon each holder of
the Notes at the time outstanding and each future holder of the Notes.
(c) If, in connection with any proposed amendment,
modification, waiver or termination (a "Proposed Change"):
(i) requiring the consent of all affected Lenders,
the consent of Requisite Lenders is obtained, but the consent of other
Lenders whose consent is required is not obtained (any such Lender
whose consent is not obtained as described this clause (i) and in
clause (ii) below being referred to as a "Non-Consenting Lender"), or
(ii) requiring the consent of Requisite Lenders, the
consent of Lenders holding 51% or more of the aggregate Commitments is
obtained, but the consent of Requisite Lenders is not obtained,
then, so long as Agent is not a Non-Consenting Lender, at Borrower
Representative's request, Agent or a Person acceptable to Agent shall
have the right with Agent's consent and in Agent's sole discretion (but
shall have no obligation) to purchase from such Non-Consenting Lenders,
and such Non-
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Consenting Lenders agree that they shall, upon Agent's request, sell
and assign to Agent or such Person, all of the Commitments of such
Non-Consenting Lender for an amount equal to the principal balance of
all Loans held by the Non-Consenting Lender and all accrued interest
and Fees with respect thereto through the date of sale, such purchase
and sale to be consummated pursuant to an executed Assignment
Agreement.
(d) Upon indefeasible payment in full in cash and performance
of all of the Obligations (other than indemnification Obligations under
Section 1.13) and a release of all claims against Agent and Lenders,
and so long as no suits, actions, proceedings, or claims are pending or
threatened against any Indemnified Person asserting any damages, losses
or liabilities that are Indemnified Liabilities, Agent shall deliver to
Borrowers termination statements, mortgage releases and other documents
necessary or appropriate to evidence the termination of the Liens
securing payment of the Obligations.
11.3. Fees and Expenses. Borrowers shall reimburse Agent for all
out-of-pocket expenses incurred in connection with the preparation of the Loan
Documents (including the reasonable fees and expenses of all of its special loan
counsel, advisors, consultants and auditors retained in connection with the Loan
Documents and the Related Transactions and advice in connection therewith).
Borrowers shall reimburse Agent (and, with respect to clauses (c) and (d) below,
all Lenders) for all fees, costs and expenses, including the reasonable fees,
costs and expenses of counsel or other advisors (including environmental and
management consultants and appraisers) for advice, assistance, or other
representation in connection with:
(a) the forwarding to Borrowers or any other Person on behalf
of Borrowers by Agent of the proceeds of the Loans;
(b) any amendment, modification or waiver of, or consent with
respect to, any of the Loan Documents or advice in connection with the
administration of the Loans made pursuant hereto or its rights
hereunder or thereunder;
(c) any litigation, contest, dispute, suit, proceeding or
action (whether instituted by Agent, any Lender, any Borrower or any
other Person) in any way relating to the Collateral, any of the Loan
Documents or any other agreement to be executed or delivered in
connection therewith or herewith, whether as party, witness, or
otherwise, including any litigation, contest, dispute, suit, case,
proceeding or action, and any appeal or review thereof, in connection
with a case commenced by or against any or all of the Borrowers or any
other Person that may be obligated to Agent by virtue of the Loan
Documents; including any such litigation, contest, dispute, suit,
proceeding or action arising in connection with any work-out or
restructuring of the Loans during the pendency of one or more Events of
Default; provided that in the case of reimbursement of counsel for
Lenders other than Agent, such reimbursement shall be limited to one
counsel for all such Lenders;
(d) any attempt to enforce any remedies of Agent against any
or all of the Credit Parties or any other Person that may be obligated
to Agent or any Lender by virtue of any of the Loan Documents;
including any such attempt to enforce any such remedies in the
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course of any work-out or restructuring of the Loans during the
pendency of one or more Events of Default; provided that in the case of
reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders;
(e) any work-out or restructuring of the Loans during the
pendency of one or more Events of Default;
(f) efforts to (i) monitor the Loans or any of the other
Obligations, (ii) evaluate, observe or assess any of the Credit Parties
or their respective affairs, and (iii) verify, protect, evaluate,
assess, appraise, or, after an Event of Default, collect, sell,
liquidate or otherwise dispose of any of the Collateral;
including, as to each of clauses (a) through (f) above, all attorneys' and other
professional and service providers' fees arising from such services, including
those in connection with any appellate proceedings; and all expenses, costs,
charges and other fees incurred by such counsel and others in any way or respect
arising in connection with or relating to any of the events or actions described
in this Section 11.3 shall be payable, on demand, by Borrowers to Agent. Without
limiting the generality of the foregoing, such expenses, costs, charges and fees
may include: fees, costs and expenses of accountants, environmental advisors,
appraisers, investment bankers, management and other consultants and paralegals;
court costs and expenses; photocopying and duplication expenses; court reporter
fees, costs and expenses; long distance telephone charges; air express charges;
telegram or telecopy charges; secretarial overtime charges; and reasonable
expenses for travel, lodging and food paid or incurred in connection with the
performance of such legal or other advisory services.
11.4. No Waiver. Agent's or any Lender's failure, at any time or times,
to require strict performance by the Credit Parties of any provision of this
Agreement and any of the other Loan Documents shall not waive, affect or
diminish any right of Agent or such Lender thereafter to demand strict
compliance and performance therewith. Any suspension or waiver of an Event of
Default shall not suspend, waive or affect any other Event of Default whether
the same is prior or subsequent thereto and whether the same or of a different
type. Subject to the provisions of Section 11.2, none of the undertakings,
agreements, warranties, covenants and representations of any Credit Party
contained in this Agreement or any of the other Loan Documents and no Default or
Event of Default by any Credit Party shall be deemed to have been suspended or
waived by Agent or any Lender, unless such waiver or suspension is by an
instrument in writing signed by an officer of or other authorized employee of
Agent and the applicable required Lenders, and directed to Borrowers specifying
such suspension or waiver.
11.5. Remedies. Agent's and Lenders' rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
which Agent or any Lender may have under any other agreement, including the
other Loan Documents, by operation of law or otherwise. Recourse to the
Collateral shall not be required.
11.6. Severability. Wherever possible, each provision of this Agreement
and the other Loan Documents shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under
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applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
11.7. Conflict of Terms. Except as otherwise provided in this Agreement
or any of the other Loan Documents by specific reference to the applicable
provisions of this Agreement, if any provision contained in this Agreement is in
conflict with, or inconsistent with, any provision in any of the other Loan
Documents, the provision contained in this Agreement shall govern and control.
11.8. Confidentiality. Agent and each Lender agree to use commercially
reasonable efforts (equivalent to the efforts Agent or such Lender applies to
maintaining the confidentiality of its own confidential information) to maintain
as confidential all confidential information provided to them by the Credit
Parties and designated as confidential for a period of two (2) years following
receipt thereof, except that Agent and any Lender may disclose such information
(a) to Persons employed or engaged by Agent or such Lender in evaluating,
approving, structuring or administering the Loans and the Commitments; (b) to
any bona fide assignee or participant or potential assignee or participant that
has agreed to comply with the covenant contained in this Section 11.8 (and any
such bona fide assignee or participant or potential assignee or participant may
disclose such information to Persons employed or engaged by them as described in
clause (a) above); (c) as required or requested by any Governmental Authority or
reasonably believed by Agent or such Lender to be compelled by any court decree,
subpoena or legal or administrative order or process; (d) as, on the advice of
Agent's or such Lender's counsel, required by law; (e) in connection with the
exercise of any right or remedy under the Loan Documents or in connection with
any Litigation to which Agent or such Lender is a party; or (f) which ceases to
be confidential through no fault of Agent or such Lender.
11.9. GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF
THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND
ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY HEREBY
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN ▇▇▇▇ COUNTY,
CITY OF CHICAGO, ILLINOIS SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, AGENT AND LENDERS
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS,
PROVIDED, THAT AGENT, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
▇▇▇▇ COUNTY, CITY OF CHICAGO, ILLINOIS AND, PROVIDED, FURTHER NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR
TAKING OTHER
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LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN
FAVOR OF AGENT. EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH
CREDIT PARTY HEREBY WAIVES ANY OBJECTION WHICH SUCH CREDIT PARTY MAY HAVE BASED
UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. EACH
CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN ANNEX I OF THIS
AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF
SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF OR THREE (3) BUSINESS DAYS AFTER
DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.
11.10. Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other parties, or whenever any of the parties desires to give or
serve upon any other parties any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be deemed to have been validly
served, given or delivered (a) upon the earlier of actual receipt and three (3)
Business Days after deposit in the United States Mail, registered or certified
mail, return receipt requested, with proper postage prepaid, (b) upon
transmission, when sent by telecopy or other similar facsimile transmission
(with such telecopy or facsimile promptly confirmed by delivery of a copy by
personal delivery or United States Mail as otherwise provided in this Section
11.10), (c) one (1) Business Day after deposit with a reputable overnight
courier with all charges prepaid or (d) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the party to be notified and sent
to the address or facsimile number indicated on Annex I or to such other address
(or facsimile number) as may be substituted by notice given as herein provided.
The giving of any notice required hereunder may be waived in writing by the
party entitled to receive such notice. Failure or delay in delivering copies of
any notice, demand, request, consent, approval, declaration or other
communication to any Person (other than Borrower Representative or Agent)
designated on Annex I to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration or
other communication.
11.11. Section Titles. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
11.12. Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
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11.13. WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,
TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY CREDIT PARTY ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
11.14. Press Releases. Each Credit Party executing this Agreement
agrees that neither it nor its Affiliates will in the future issue any press
releases or other public disclosure, with the exception of disclosures mandated
by the rules and regulations of the SEC, using the name of GE Capital or its
Affiliates or referring to this Agreement or the other Loan Documents without at
least two (2) Business Days' prior notice to GE Capital and without the prior
written consent of GE Capital unless (and only to the extent that) such Credit
Party or Affiliate is required to do so under law and then, in any event, such
Credit Party or Affiliate will consult with GE Capital before issuing such press
release or other public disclosure. Each Credit Party consents to the
publication by Agent or any Lender of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement.
Agent reserves the right to provide to industry trade organizations information
necessary and customary for inclusion in league table measurements with
Borrowers' consent which shall not be unreasonably withheld or delayed.
11.15. Reinstatement. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Borrower for liquidation or reorganization, should any Borrower become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of any
Borrower's assets, and shall continue to be effective or to be reinstated, as
the case may be, if at any time payment and performance of the Obligations, or
any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the
Obligations, whether as a "voidable preference," "fraudulent conveyance," or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
11.16. Advice of Counsel. Each of the parties represents to each other
party hereto that it has discussed this Agreement and, specifically, the
provisions of Sections 11.9 and 11.13, with its counsel.
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11.17. No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
12. CROSS-GUARANTY
12.1. Cross-Guaranty. Each Borrower hereby agrees that such Borrower is
jointly and severally liable for, and hereby absolutely and unconditionally
guarantees to Agent and Lenders and their respective successors and assigns, the
full and prompt payment (whether at stated maturity, by acceleration or
otherwise) and performance of, all Obligations owed or hereafter owing to Agent
and Lenders by each other Borrower. Each Borrower agrees that its guaranty
obligation hereunder is a continuing guaranty of payment and performance and not
of collection, that its obligations under this Section 12 shall not be
discharged until payment and performance, in full, of the Obligations has
occurred, and that its obligations under this Section 12 shall be absolute and
unconditional, irrespective of, and unaffected by,
(a) the genuineness, validity, regularity, enforceability or
any future amendment of, or change in, this Agreement, any other Loan
Document or any other agreement, document or instrument to which any
Borrower is or may become a party;
(b) the absence of any action to enforce this Agreement
(including this Section 12) or any other Loan Document or the waiver or
consent by Agent and Lenders with respect to any of the provisions
thereof;
(c) the existence, value or condition of, or failure to
perfect its Lien against, any security for the Obligations or any
action, or the absence of any action, by Agent and Lenders in respect
thereof (including the release of any such security);
(d) the insolvency of any Credit Party; or
(e) any other action or circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or
guarantor.
Each Borrower shall be regarded, and shall be in the same position, as principal
debtor with respect to the Obligations guaranteed hereunder.
12.2. Waivers by Borrowers. Each Borrower expressly waives all rights
it may have now or in the future under any statute, or at common law, or at law
or in equity, or otherwise, to compel Agent or Lenders to ▇▇▇▇▇▇▇▇ assets or to
proceed in respect of the Obligations guaranteed hereunder against any other
Credit Party, any other party or against any security for the payment and
performance of the Obligations before proceeding against, or as a condition to
proceeding against, such Borrower. It is agreed among each Borrower, Agent and
Lenders that the foregoing waivers are of the essence of the transaction
contemplated by this Agreement and the other Loan Documents and that, but for
the provisions of this Section 12 and such waivers, Agent and Lenders would
decline to enter into this Agreement.
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12.3. Benefit of Guaranty. Each Borrower agrees that the provisions of
this Section 12 are for the benefit of Agent and Lenders and their respective
successors, transferees, endorsees and assigns, and nothing herein contained
shall impair, as between any other Borrower and Agent or Lenders, the
obligations of such other Borrower under the Loan Documents.
12.4. Subordination of Subrogation, Etc. Notwithstanding anything to
the contrary in this Agreement or in any other Loan Document, and except as set
forth in Section 12.7, each Borrower hereby expressly and irrevocably
subordinates to payment of the Obligations any and all rights at law or in
equity to subrogation, reimbursement, exoneration, contribution, indemnification
or set off and any and all defenses available to a surety, guarantor or
accommodation co-obligor until the Obligations are indefeasibly paid in full in
cash. Each Borrower acknowledges and agrees that this subordination is intended
to benefit Agent and Lenders and shall not limit or otherwise affect such
Borrower's liability hereunder or the enforceability of this Section 12, and
that Agent, Lenders and their respective successors and assigns are intended
third party beneficiaries of the waivers and agreements set forth in this
Section 12.4.
12.5. Election of Remedies. If Agent or any Lender may, under
applicable law, proceed to realize its benefits under any of the Loan Documents
giving Agent or such Lender a Lien upon any Collateral, whether owned by any
Borrower or by any other Person, either by judicial foreclosure or by
non-judicial sale or enforcement, Agent or any Lender may, at its sole option,
determine which of its remedies or rights it may pursue without affecting any of
its rights and remedies under this Section 12. If, in the exercise of any of its
rights and remedies, Agent or any Lender shall forfeit any of its rights or
remedies, including its right to enter a deficiency judgment against any
Borrower or any other Person, whether because of any applicable laws pertaining
to "election of remedies" or the like, each Borrower hereby consents to such
action by Agent or such Lender and waives any claim based upon such action, even
if such action by Agent or such Lender shall result in a full or partial loss of
any rights of subrogation which each Borrower might otherwise have had but for
such action by Agent or such Lender. Any election of remedies which results in
the denial or impairment of the right of Agent or any Lender to seek a
deficiency judgment against any Borrower shall not impair any other Borrower's
obligation to pay the full amount of the Obligations. In the event Agent or any
Lender shall bid at any foreclosure or trustee's sale or at any private sale
permitted by law or the Loan Documents, Agent or such Lender may bid all or less
than the amount of the Obligations and the amount of such bid need not be paid
by Agent or such Lender but shall be credited against the Obligations. The
amount of the successful bid at any such sale, whether Agent, Lender or any
other party is the successful bidder, shall be conclusively deemed to be the
fair market value of the Collateral and the difference between such bid amount
and the remaining balance of the Obligations shall be conclusively deemed to be
the amount of the Obligations guaranteed under this Section 12, notwithstanding
that any present or future law or court decision or ruling may have the effect
of reducing the amount of any deficiency claim to which Agent or any Lender
might otherwise be entitled but for such bidding at any such sale.
12.6. Limitation. Notwithstanding any provision herein contained to the
contrary, each Borrower's liability under this Section 12 (which liability is in
any event in addition to amounts
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for which such Borrower is primarily liable under Section 1) shall be limited to
an amount not to exceed as of any date of determination the greater of:
(a) the net amount of all Loans advanced to any other Borrower
under this Agreement and then re-loaned or otherwise transferred to, or
for the benefit of, such Borrower; and
(b) the amount which could be claimed by Agent and Lenders
from such Borrower under this Section 12 without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy
Code or under any applicable state Uniform Fraudulent Transfer Act,
Uniform Fraudulent Conveyance Act or similar statute or common law
after taking into account, among other things, such Borrower's right of
contribution and indemnification from each other Borrower under Section
12.7.
12.7. Contribution with Respect to Guaranty Obligations.
(a) To the extent that any Borrower shall make a payment under
this Section 12 of all or any of the Obligations (other than Loans made
to that Borrower for which it is primarily liable) (a "Guarantor
Payment") which, taking into account all other Guarantor Payments then
previously or concurrently made by any other Borrower, exceeds the
amount which such Borrower would otherwise have paid if each Borrower
had paid the aggregate Obligations satisfied by such Guarantor Payment
in the same proportion that such Borrower's "Allocable Amount" (as
defined below) (as determined immediately prior to such Guarantor
Payment) bore to the aggregate Allocable Amounts of each of the
Borrowers as determined immediately prior to the making of such
Guarantor Payment, then, following indefeasible payment in full in cash
of the Obligations and termination of the Commitments, such Borrower
shall be entitled to receive contribution and indemnification payments
from, and be reimbursed by, each other Borrower for the amount of such
excess, pro rata based upon their respective Allocable Amounts in
effect immediately prior to such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of
any Borrower shall be equal to the maximum amount of the claim which
could then be recovered from such Borrower under this Section 12
without rendering such claim voidable or avoidable under Section 548 of
Chapter 11 of the Bankruptcy Code or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar
statute or common law.
(c) This Section 12.7 is intended only to define the relative
rights of Borrowers and nothing set forth in this Section 12.7 is
intended to or shall impair the obligations of Borrowers, jointly and
severally, to pay any amounts as and when the same shall become due and
payable in accordance with the terms of this Agreement, including
Section 12.1. Nothing contained in this Section 12.7 shall limit the
liability of any Borrower to pay the Loans made directly or indirectly
to that Borrower and accrued interest, Fees and expenses with respect
thereto for which such Borrower shall be primarily liable.
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(d) The parties hereto acknowledge that the rights of
contribution and indemnification hereunder shall constitute assets of
the Borrower to which such contribution and indemnification is owing.
(e) The rights of the indemnifying Borrowers against other
Credit Parties under this Section 12.7 shall be exercisable upon the
full and indefeasible payment of the Obligations.
12.8. Liability Cumulative. The liability of Borrowers under this
Section 12 is in addition to and shall be cumulative with all liabilities of
each Borrower to Agent and Lenders under this Agreement and the other Loan
Documents to which such Borrower is a party or in respect of any Obligations or
obligation of the other Borrower, without any limitation as to amount, unless
the instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.
12.9. Subordination.
(a) Each Credit Party executing this Agreement covenants and
agrees that the payment of all indebtedness, principal, interest
(including interest which accrues after the commencement of any case or
proceeding in bankruptcy, or for the reorganization of any Credit
Party), fees, charges, expenses, reasonable attorneys' fees and any
other sum, obligation or liability owing by any other Credit Party to
such Credit Party, including any intercompany trade payables or royalty
or licensing fees (collectively the "Subordinated Obligations"), is
subordinated, to the extent and in the manner provided in this Section
12.9, to the prior payment in full of all Obligations (herein, the
"Senior Obligations") and that the subordination is for the benefit of
the Agent and the Lenders, and Agent may enforce such provisions
directly.
(b) Each Credit Party executing this Agreement hereby (i)
authorizes Agent to demand specific performance of the terms of this
Section 12.9 whether or not any other Credit Party shall have complied
with any of the provisions hereof applicable to it, at any time when
such Credit Party shall have failed to comply with any provisions of
this Section 12.9 which are applicable to it and (ii) irrevocably
waives any defense based on the adequacy of a remedy at law, which
might be asserted as a bar to such remedy of specific performance.
(c) Upon any distribution of assets of any Credit Party in any
dissolution, winding up,. liquidation or reorganization (whether in
bankruptcy, insolvency or receivership proceedings or upon an
assignment for the benefit of creditors or otherwise):
(i) The Agent and Lenders shall first be entitled to
receive payment in full in cash of the Senior Obligations
before any Credit Party is entitled to receive any payment on
account of the Subordinated Obligations.
(ii) Any payment or distribution of assets of any
Credit Party of any kind or character, whether in cash,
property or securities, to which any other Credit Party would
be entitled except for the provisions of this Section 12.9,
shall be
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paid by the liquidating trustee or agent to other Person
making such payment or distribution directly to the Agent, to
the extent necessary to make payment in full of all Senior
Obligations remaining unpaid after giving effect to any
concurrent payment or distribution or provisions therefor to
the Agent and Lenders.
(iii) In the event that notwithstanding the foregoing
provisions of this Section 12.9, any payment or distribution
of assets of any Credit Party of any kind or character,
whether in cash, property or securities, shall be received by
any other Credit Party on account of the Subordinated
Obligations before all Senior Obligations are paid in full,
such payment or distribution shall be received and held in
trust for and shall be paid over to the Agent for application
to the payment of the Senior Obligations until all of the
Senior Obligations shall have been paid in full, after giving
effect to any concurrent payment or distribution or provision
therefor to the Agent and Lenders.
(d) No right of the Agent and Lenders or any other present or
future holders of any Senior Obligations to enforce the subordination
provisions herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of any Credit Party
or by any act or failure to act, in good faith, by any such holder, or
by any noncompliance by any Credit Party with the terms hereof,
regardless of any knowledge thereof which any such holder may have or
be otherwise charged with.
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