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SECURED SUPER-PRIORITY DEBTOR-IN-POSSESSION FINANCING AGREEMENT
Dated as of January 24, 2002
AMENDED AND RESTATED
as of February 4, 2002
among
HARVARD INDUSTRIES, INC.,
HARVARD TRANSPORTATION CORPORATION,
and
▇▇▇▇▇-ALBION CORPORATION
as Debtors-In-Possession and as Borrowers
TRIM TRENDS CANADA LIMITED and ▇▇▇▇▇▇ ▇▇▇▇▇▇ INC.
as Guarantors
THE CIT GROUP/BUSINESS CREDIT, INC.
as Administrative Agent, Collateral Agent and Lender
CITICORP USA, INC.
as Syndication Agent and Lender
CITIBANK N.A.
as Issuing Bank
$35,000,000
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS................................................3
1.1 Certain Defined Terms..........................................3
1.2 Construction of Certain Terms.................................32
1.3 GAAP Terminology..............................................32
1.4 No Presumption in Construction................................33
1.5 Independence of Provisions....................................33
1.6 Inactive Guarantor............................................33
SECTION 2. CONDITIONS PRECEDENT......................................34
2.1 Conditions Precedent to Initial Loans on the Initial Closing
Date........................................................34
2.2 Conditions to Each Extension of Credit........................37
2.3 Conditions Relating to Issuance of Letters of Credit..........40
SECTION 3. AMOUNT AND TERM OF LOANS..................................40
3.1 Revolving Loans...............................................40
3.2 Covenants Involving Accounts and Inventory....................42
3.3 Representations Regarding Accounts and Inventory..............42
3.4 Establishment of Blocked Accounts; Matters Relating to
Accounts....................................................43
3.5 Reports Involving Accounts and Related Matters................45
3.6 Revolving Loan Account........................................45
3.7 Overadvance Due on Demand.....................................48
SECTION 4. LETTERS OF CREDIT.........................................48
4.1 Letter of Credit Commitment...................................48
4.2 Procedure for Issuance of Letters of Credit...................49
4.3 Reimbursement Agreement.......................................50
4.4 Responsibilities of Issuing Bank..............................50
4.5 L/C Participations............................................51
4.6 Reimbursement Obligations.....................................51
4.7 Payments by Revolving Facility Lenders........................52
4.8 Reimbursement Obligations Absolute............................52
4.9 Actions and Reliance by the Issuing Bank......................53
SECTION 5. TERMINATION OR REDUCTION OF COMMITMENTS; REIMBURSEMENT AND
LOAN OBLIGATIONS GENERALLY..............................53
5.1 Revolving Line of Credit......................................53
5.2 Letter of Credit Sub-Line.....................................54
5.3 Reimbursement and Loan Obligations Generally..................54
SECTION 6. PREPAYMENTS OF LOANS......................................54
6.1 Prepayments...................................................54
6.2 Optional Prepayment of Revolving Loans........................54
6.3 Mandatory Application of Certain Proceeds.....................54
6.4 Mandatory Application of Insurance Proceeds and Sale of Asset
Proceeds....................................................55
SECTION 7. COLLATERAL FOR OBLIGATIONS................................55
7.1 Grant of Security Interest....................................55
7.2 Related Collateral Matters....................................57
7.3 Certain Dealings, Rights and Matters Relating to Collateral...57
7.4 Continuing Nature of Security Interest and Rights.............61
7.5 Administrative Agent's Exercise of Rights and Remedies........61
7.6 Application of Credit Balances as Security; Loan Account
Charges.....................................................61
7.7 Insurance on Collateral.......................................61
7.8 Taxes Relating to Collateral..................................63
7.9 Mortgages.....................................................64
7.10 Plan Confirmation.............................................64
7.11 Modifications.................................................64
SECTION 8. REPRESENTATIONS; WARRANTIES AND COVENANTS.................65
8.1 Representations and Warranties................................65
8.2 Covenants.....................................................72
8.3 Final Order; Administrative Priority; Lien Priority; Payment
of Claims...................................................81
8.4 Indemnification...............................................82
SECTION 9. INTEREST, FEES AND EXPENSES INVOLVING OBLIGATIONS.........84
9.1 Revolving Loans...............................................84
9.2 L/C Participation Fees........................................84
9.3 Charges Relating to Letters of Credit.........................85
9.4 Other Expenses................................................85
9.5 Commitment Fee................................................85
9.6 DIP Facility Fee..............................................85
9.7 Administrative Management Fee.................................86
9.8 Other Charges of the Administrative Agent.....................86
9.9 Taxes.........................................................86
9.10 Revolving Loan Account Charges................................87
9.11 Capital Adequacy Changes......................................87
9.12 Additional Costs..............................................88
SECTION 10. POWERS INVOLVING OBLIGATIONS; OBLIGATIONS ABSOLUTE........89
10.1 Power of Attorney.............................................89
10.2 Joint and Several Liability of Borrowers......................90
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SECTION 11. EVENTS OF DEFAULT AND REMEDIES............................92
11.1 Events of Default.............................................92
11.2 Remedies Upon an Event of Default and Otherwise...............96
11.3 Right of Set-Off..............................................99
SECTION 12. TERMINATION..............................................100
SECTION 13. MISCELLANEOUS............................................100
13.1 Waivers......................................................100
13.2 Entire Agreement.............................................100
13.3 Usury........................................................101
13.4 Severability.................................................101
13.5 Waiver of Jury Trial.........................................101
13.6 Notices......................................................102
13.7 Certain Notices..............................................104
13.8 Governing Laws...............................................104
13.9 Intentionally Deleted........................................104
13.10 Headings.....................................................104
13.11 Replacement of Promissory Note...............................104
13.12 Counterparts.................................................105
13.13 Waiver of Claims.............................................105
13.14 Assignments and Participations...............................105
13.15 Currency.....................................................108
13.16 Rate of Interest for Canadian Companies......................108
13.17 Amendments; Waivers..........................................108
13.18 Confidentiality..............................................109
13.19 Contribution.................................................109
SECTION 14. AGREEMENT BETWEEN THE LENDERS............................110
14.1 Disbursements................................................110
14.2 Lender and Administrative Agent Adjustments..................111
14.3 Statement of Accounts........................................112
14.4 Sharing of Payments..........................................112
14.5 Pro Rata Responsibility......................................112
SECTION 15. AGENTS AND ISSUING BANK..................................113
15.1 Appointment of Agent.........................................113
15.2 Delegation...................................................113
15.3 Exculpatory Provisions.......................................113
15.4 Reliance.....................................................114
15.5 Notice of Default............................................114
15.6 Non-Reliance on Agents, Issuing Bank and Other Lenders.......114
15.7 Indemnification by Lenders...................................115
15.8 The Agents and the Issuing Bank in Their Individual
Capacities.................................................115
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15.9 Successor Agents.............................................116
15.10 Arrangements Requiring Consent of Lenders; Administrative
Agent's Discretion.........................................116
15.11 Nonconsenting Lenders........................................117
15.12 Refund of Payments...........................................117
15.13 Relationship.................................................117
SECTION 16. GUARANTY.................................................117
16.1 Guaranty.....................................................117
16.2 Guaranty Obligations Unconditional...........................118
16.3 Waivers......................................................120
16.4 Subrogation..................................................121
16.5 Reaffirmation of Pre-Petition Agreements.....................121
EXHIBITS
Exhibit A - Form of Revolving Loan Promissory Note
Exhibit B - Form of Interim Order
Exhibit C - Form of Secretary's Certificate
Exhibit D - Form of Officer's Certificate
Exhibit E - Form of Notice of Borrowing
Exhibit F - Form of Assignment and Transfer Agreement
Exhibit G - Form of Participating Customer Agreement Matters
SCHEDULES
Schedule 1 - Litigation
Schedule 2 - Capital Stock
Schedule 3 - Certain Indebtedness and Permitted Encumbrances
Schedule 4 - Certain Financial Obligations
Schedule 5 - Taxes
Schedule 6 - ERISA Matters
Schedule 7 - Environmental Matters
Schedule 8 - Intellectual Property Matters
Schedule 9 - Guarantors
Schedule 10 - Collective Bargaining Agreements
Schedule 11 - Visteon/American Axle Participating Customer Agreement
iv
SECURED SUPER-PRIORITY DEBTOR-IN-POSSESSION FINANCING AGREEMENT dated
as of January 24, 2002, Amended and Restated as of February 4, 2002 (the "First
Amendment Date") with effect as of January 24, 2002 and, among HARVARD
INDUSTRIES, INC., a Delaware corporation (hereinafter, "Harvard"), HARVARD
TRANSPORTATION CORPORATION, a Michigan corporation and ▇▇▇▇▇-ALBION CORPORATION,
a Michigan corporation, as debtors and debtors-in-possession in cases pending
under Chapter 11 of the Bankruptcy Code (as defined below) (each individually a
"Borrower" and together with Harvard, the "Borrowers"); THE CIT GROUP/BUSINESS
CREDIT, INC., a New York corporation, with offices located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter "CIT"), as administrative agent and
collateral agent for the Lenders (in such capacities, the "Administrative
Agent"); CITICORP USA, INC., a Delaware corporation, with offices located at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter, "CUSA"), as syndication agent
in connection with the Loans referred to below (in such capacity, the
"Syndication Agent"), each Lender (as that term is defined below) party hereto
from time to time; CITIBANK, N.A. ("Citibank"), as issuing bank in respect of
Letters of Credit as contemplated herein (the "Issuing Bank"); and ▇▇▇▇▇▇ ▇▇▇▇▇▇
INC. and TRIM TRENDS CANADA LIMITED (each individually a "Guarantor" and
collectively, the "Guarantors"), as joint and several obligors in respect of the
Obligations (as defined below), in the case of the Borrowers, or, in the case of
the Guarantors, as joint and several guarantors of the Harvard Obligations (as
defined below) and, severally, as obligors in respect of their own Reimbursement
Obligations, if any (as defined below).
RECITALS
On January 15, 2002 (the "Filing Date"), the Borrowers each filed
voluntary petitions with the United States Bankruptcy Court for the District of
New Jersey (the "Bankruptcy Court") initiating the Cases (as defined below) and
have continued in the possession of their assets and in the management of their
businesses pursuant to Sections 1107 and 1108 of the Bankruptcy Code.
The Borrowers are parties to that certain Agreement dated May 31, 2001
(the "Pre-Petition Credit Agreement") among CIT, CUSA, Citibank and the
Pre-Petition Borrowers (as defined herein) and certain related security and
mortgage or other collateral documents and agreements relating thereto
(collectively, the "Pre-Petition Agreements").
On the Filing Date, the total obligations due and owing to the Lenders
from the Pre-Petition Borrowers under the Pre-Petition Agreements was
approximately $41,107,277 (the "Pre-Petition Obligations") of which
approximately $18,185,000 was and continues to be owing as Term Loans (as
defined in the Pre-Petition Agreements) (the "Pre-Petition Term Loans"),
approximately $16,850,000 was and continues to be owing as Revolving Loans (as
defined in the Pre-Petition Agreements) (the "Pre-Petition Revolving Loans"),
and approximately $6,072,277 in letters of credit for which Borrowers are liable
(the "Pre-Petition L/C Obligations"). The Pre-Petition Obligations of the
Borrowers to the Lenders are secured by valid, perfected liens on and security
interests in substantially all of the real and personal property and interests
in such property that the Borrowers owned on the Filing Date and may own
thereafter, and the products and proceeds thereof, all as set forth in the
Pre-Petition Agreements.
The Borrowers have requested that the Lenders extend a line of credit
in an aggregate principal amount not to exceed $35,000,000.00 to the Borrowers
as debtors and debtors in possession under the Bankruptcy Code, which
$35,000,000.00 shall be used to pre-pay the Pre-Petition Revolving Loans, to pay
Obligations hereunder which arise out of Pre-Petition L/C Obligations and for
working capital of the Borrowers as provided herein. The Pre-Petition Borrowers
have agreed to make adequate protection payments to the Lenders in respect of
the Pre-Petition Term Loans.
The Borrowers, the Guarantors, the Lenders, the Administrative Agent,
the Syndication Agent and the Issuing Bank are parties to that certain Secured
Super-Priority Debtor-In-Possession Financing Agreement dated as of January 24,
2002 (the "Original Agreement"), and have agreed that the Original Agreement
shall be amended and restated as set forth herein, to implement amendments
contemplated in the Original Agreement and restate the amended terms and
conditions upon which, among other things, the Lenders and the Issuing Bank have
agreed to make available to the Borrowers such post-petition loans and other
extensions of credit (including those already made available under the Original
Agreement); each of the Guarantors has agreed to ratify and confirm its guaranty
of the obligations of the Borrowers, and to confirm that the guaranty extends to
the Obligations and each of the Borrowers and Guarantors has agreed to provide
or cause to be provided to the Agents, the Issuing Bank and the Lenders the
following (each as more fully described herein):
(a) with respect to the obligations of the Borrowers under the
Loan Documents, subject to the Carve-Out, an allowed
administrative expense claim in the Cases pursuant to Section
364(c)(1) of the Bankruptcy Code having priority over all
administrative expenses of the kind specified in Sections
503(b), 507(b) and 546(c) of the Bankruptcy Code;
(b) with respect to the obligations of the Borrowers under the
Loan Documents, subject to the Carve-Out and the United States
Trustees Fees, a perfected first priority lien, pursuant to
Sections 364(c)(2) and 364(d)(1) of the Bankruptcy Code, upon
all of the Collateral;
(c) with respect to the obligations of the Borrowers and the
Pre-Petition Borrowers under the Pre-Petition Agreements, an
order of the Bankruptcy Court authorizing the Borrowers and
the Pre-Petition Borrowers to affirm and continue the
Pre-Petition Agreements and to authorize the Loans under this
Agreement to be used to pay off in part certain outstanding
obligations under the Pre-Petition Agreements; and
(d) as to the Guarantors, a confirmation of the continued
guaranty, and security therefore, pursuant to the terms of the
Pre-Petition Agreements and hereunder.
Accordingly, the parties hereto hereby agree as follows:
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SECTION 1. DEFINITIONS
1.1 Certain Defined Terms. The following terms shall have the meanings
indicated below.
Access and Security Agreement shall mean the Access and Security
Agreement dated as of January 1, 2001, between Harvard and Pottstown, on the one
hand, and General Motors Corporation, on the other hand, each of the three
Access and Security Agreements dated as of the same date between Harvard and
▇▇▇▇▇-Albion, on the one hand, and General Motors Corporation, on the other
hand, relating to the ▇▇▇▇▇-Albion facility in Jackson, Michigan, the
Trim-Trends facility in Bryan, Ohio, and the Trim-Trends facility in
Spencerville, Ohio, and the Access and Security Agreement referred to in the
Visteon/American Axle Participating Customer Agreement and each other access and
security or similar agreement with other Participating Customers of any Borrower
facility entered into with the prior written consent of the Lenders and the
Junior Lien Lender in connection with a Participating Customer Agreement with
such customer.
Accounts shall mean all of an Obligor's now existing and future: (a)
accounts (as defined in the UCC), and any and all other receivables (whether or
not specifically listed on schedules furnished to the Administrative Agent),
including, without limitation, all accounts created by, or arising from, all of
such Obligor's sales, leases, rentals of goods or renditions of services to its
customers, including but not limited to, those accounts arising under such
Obligor's trade names or styles, or through any of such Obligor's divisions; (b)
any and all instruments, documents, chattel paper (including electronic chattel
paper) (all as defined in the UCC); (c) unpaid seller's or lessor's rights
(including rescission, replevin, reclamation, repossession and stoppage in
transit) relating to the foregoing or arising therefrom; (d) rights to any goods
represented by any of the foregoing, including rights to returned, reclaimed or
repossessed goods; (e) reserves and credit balances arising in connection with
or pursuant hereto; (f) guarantees, supporting obligations, payment intangibles
and letter of credit rights (all as defined in the UCC); (g) insurance policies
or rights relating to any of the foregoing; (h) general intangibles pertaining
to any and all of the foregoing (including all rights to payment, including
those arising in connection with bank and non-bank credit cards), and including
books and records and any electronic media and software thereto; (i) notes,
deposits or property of account debtors securing the obligations of any such
account debtors to such Obligor; and (j) cash and non-cash proceeds (as defined
in the UCC) of any and all of the foregoing.
Administrative Management Fee shall mean the sum of $6,250.00 payable
per month, on or after May 31, 2002, which shall be paid to the Administrative
Agent, for its own account, in accordance with Paragraph 9.7 of Section 9
hereof.
Accounts Receivable Availability shall mean 85% of Eligible Accounts
Receivable.
Administrative Agent shall have the meaning specified in the recitals
hereto.
Agents shall mean each of the Administrative Agent and the Syndication
Agent.
3
Agreement means the Secured Super-Priority Debtor-In-Possession
Financing Agreement identified in the Recitals hereto as the Original Agreement,
as Amended and Restated herein.
Approved Fund shall mean any Fund that is advised or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or Affiliate of an entity
that administers or manages a Lender.
Assignment and Transfer Agreement shall mean an Assignment and Transfer
Agreement in the form of Exhibit F hereto.
Authorized Officer shall mean with respect to an Obligor, the chairman
of the board of directors, the chief executive officer or the president of that
Obligor or, with respect to financial matters, the chief financial officer or
comptroller of that Obligor, in each case, acting in that Person's capacity as
such (or any other officer of the relevant Obligor who is duly authorized to
take the relevant action or issue the relevant certification or other document
on behalf of that Obligor as contemplated herein or in another relevant Loan
Document).
Availability shall mean, at any time of calculation, the amount by
which: (i) the Borrowing Base exceeds (ii) the outstanding aggregate amount of
all Obligations.
Availability Reserve shall mean the sum of the following items as
calculated in relation to the Obligors: (a) (i) the sum of the lesser of (A)
three (3) months' rental payments or similar charges for leased premises or
other Collateral locations for which the Administrative Agent has not received a
landlord's waiver in form and substance reasonably satisfactory to the
Administrative Agent and (B) the aggregate value of Collateral at such location
(subject to the final sentence of this definition), plus (ii) three (3) months'
estimated payments plus any other fees or charges owing by any Obligor to any
applicable warehousemen or third party processor (as determined by the
Administrative Agent in its reasonable business judgment), provided that any of
the foregoing amounts shall be adjusted from time to time hereafter upon (x)
delivery to the Administrative Agent of any such acceptable waiver, (y) the
opening or closing of a Collateral location and/or (z) any change in the amount
of rental, storage or processor payments or similar charges, (b) the Carve-Out
Reserve, and (c) any reserve which the Administrative Agent may reasonably
require from time to time pursuant to this Agreement (including without
limitation, for Letters of Credit issued pursuant to Paragraph 4.2(b) of Section
4 hereof, for certain Insurance Proceeds, pursuant to Paragraph 7.7(e) of
Section 7 hereof) and, in respect of Eligible Accounts Receivable, a dilution
reserve for each percentage point, or portion of a percentage point, by which
actual dilution exceeds five percent (5%). For purposes of clause (a)(i)(B) of
this definition, the value of any Collateral at a location shall be as
determined by the Administrative Agent in its reasonable business judgment and
may, among other things, take into account a value ascribed by it to the books
and records of any Obligor maintained at such location which may relate to any
Collateral. However, it is understood that the value so ascribed may not exceed
the amount specified in clause (a)(i)(A) for such location.
Bankruptcy Code shall mean each of the United States Bankruptcy Code,
11 U.S.C. ▇▇.▇▇. 101 et seq.
4
Bankruptcy Court shall have the meaning set forth in the recitals
hereto or shall mean any court having competent jurisdiction over the Cases.
Beneficiary shall have the meaning set forth in Paragraph 16.1(a) of
Section 16 hereof.
Blocked Accounts shall have the meaning set forth in Paragraph 3.4(b)
of Section 3 hereof.
Borrowers shall have the meaning specified in the recitals hereto.
Borrowing Base shall mean the sum of (x) the Accounts Receivable
Availability and (y) the lesser of (I) the Inventory Loan Cap and (II) the sum
of 60% of Eligible Raw Materials Inventory, 25% of Eligible Work-in-Process
Inventory, and 60% of Eligible Finished Goods Inventory (each at the lower of
cost or market, on a first in first out basis) and (z) the Supplemental
Availability (as applicable at the relevant time), less any applicable
Availability Reserves.
Borrowing Base Certificate shall mean a certificate, in form and
substance satisfactory to the Agents, of the Borrowers signed by an Authorized
Officer of Harvard certifying as to the amount calculated by the Borrowers, in
accordance with this Agreement, to be the Borrowing Base on the date of such
certificate, setting out in reasonable detail the basis for such calculation,
together with a schedule setting out with respect to each of the Obligors, as at
the same date, its outstanding Eligible Accounts Receivable, the value of its
Eligible Raw Material Inventory, Eligible Work-in-Process Inventory and Eligible
Finished Goods Inventory, in each case at the lower of cost or market, on a
first in, first out basis as well as all other matters required to be set forth
therein pursuant to Paragraph 8.2(h)(v) of Section 8 of this Agreement.
Budget shall mean a projected budget of the Borrowers to be delivered
by Harvard to the Administrative Agent and the Junior Lien Lender, prepared on a
consolidated basis, setting forth the anticipated sources and uses of cash,
including but not limited to professional fees and expenses for the period
beginning on the Filing Date through and including the Termination Date,
prepared in a manner and using assumptions, consistent with financial statements
and the projections provided by the Borrowers to Pre-Petition Lenders under the
Pre-Petition Agreements, and in form and substance reasonably satisfactory to
the Administrative Agent and the Lenders.
Business Day shall mean any day on which the Administrative Agent and
the principal office in New York City of Citibank are open for business.
Canadian Deposit Account shall have the meaning set forth in Paragraph
2.1(p) of Section 2 of this Agreement.
Capital Expenditures shall mean, for any period, the aggregate
expenditures of the Obligors during such period on account of, property, plant,
equipment or similar fixed assets that, in conformity with GAAP, are required to
be reflected in the balance sheets of the Obligors, including, without
limitation, the portion of each Capital Lease.
5
Capital Lease shall mean any lease of property (whether real, personal
or mixed) to the extent that, in conformity with GAAP, it is or should be
accounted for as a capital lease or a Capital Expenditure in the balance sheets
of the Obligors.
Carve-Out shall mean, subject to the remainder of this provision
regarding calculations and limitations, the aggregate allowed unpaid fees and
expenses of professional persons under Sections 330 and 331 of the Bankruptcy
Code retained pursuant to an order or orders of the Bankruptcy Court up to the
amounts that are generally consistent with the total amount of professionals'
fees and expenses in the Budget for the relevant period, which fees and expenses
have accrued, so long as such accrual is prior to the date which is five (5)
Business Days after notice of the Termination Date is given to Borrowers;
provided, however, that the Carve-Out shall not include, apply to or be
available for (i) any fees or expenses incurred by any party, including the
Borrowers or any committee of creditors or professional persons acting for them,
(A) to the extent they exceed the applicable Permitted Carve-Out Claim Amount
(as defined below) at any time or (B) in connection with the investigation
(including discovery proceedings, initiation or prosecution of any claims,
causes of action, adversary proceeding, or other litigation) against the
Administrative Agent, the Lenders or the Issuing Bank or any of them, including
challenging the amount, validity, perfection, priority or enforceability of or
asserting any defense, counterclaim or offset to, the Obligations or the
security interests and Liens of them as secured parties in respect thereof or
(ii) any success fee of any investment banks; and provided further, however,
that the Borrowers and the Guarantors shall be permitted to pay compensation and
reimbursement of expenses allowed and payable under Sections 330 and 331 of the
Bankruptcy Code, as the same may be due and payable, and the same shall reduce
the Carve-Out. The foregoing listed types of qualifying claims of professional
persons ("Professional Claims") constituting the Carve-Out shall at any time be
limited to the following maximum amounts (the "Permitted Carve-Out Claim Amount"
at that time): (i) for the period commencing January 15, 2002 through January
30, 2002, $300,000 in respect only of (A) Professional Claims that are not
Creditors' Committee Professional Claims and (B) to the extent allowed by an
order of the Bankruptcy Court, reasonable fees and expenses incurred prior to
the Filing Date; and (ii) thereafter, the sum of (A) the Permitted Carve-Out
Claim Amount as at the last day of the preceding month plus (B) an amount for
each month beginning with February 2002 and ending with June 2002 which shall be
added with effect on the last day of the relevant month, equal to (i) $500,000
for Professional Claims other than Creditors' Committee Professional Claims less
the aggregate amount of all such Professional Claims that have been paid at or
before the time, and (ii) $50,000 for Creditors' Committee Professional Claims,
less the aggregate amount of all Creditors' Committee Professional Claims that
have been paid at or before the time. Any Professional Claims that at any time
exceed the relevant Permitted Carve-Out Claim Amount applicable at the time will
not fall within the Carve-Out, regardless of whether they are included in the
Budget and the Agents, the Issuing Bank and the Lenders shall have no duty to
inquire as to or otherwise with respect to the determination of Professional
Claims that are or are not at any time within the Carve-Out. For purposes of the
foregoing, "Creditors' Committee Professional Claims" shall mean any and all
Professional Claims in respect of fees and expenses of counsel and other
professionals acting on behalf of the Creditors' Committee or any member thereof
(or any agent of any of them). The Carve-Out shall be in addition to, and
therefore shall not include, any retainers held on the date of this Agreement by
any professionals in respect of Professional Claims.
6
Carve-Out Reserve shall equal an amount, adjusted at the last Business
Day of each Fiscal Month, which equals the then existing Permitted Carve-Out
Claim Amount (as that term is defined in the preceding definition of the term
"Carve-Out").
Cases shall mean each of the cases of the Borrowers pursuant to Chapter
11 of the Bankruptcy Code pending in the Bankruptcy Court.
Cash Collateral has the meaning specified in Section 363(a) of the
Bankruptcy Code.
Cash Collateral Account shall have the meaning set forth in Paragraph
2.1(q) of Section 2 hereof.
Citibank Base Rate shall mean , for any period, a fluctuating interest
rate per annum as shall be in effect from time to time, which rate per annum
shall be equal at all times to the highest of:
(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest quarter of one percent (0.25%) or,
if there is no nearest quarter of one percent (0.25%), to the next higher
quarter of one percent (0.25%) of
(i) 0.50% per annum plus
(ii) the rate per annum obtained by dividing (A) the latest
three-week moving average of secondary market morning offering
rates in the United States for three-month certificates of
deposit of major United States money market banks, such
three-week moving average being determined weekly on each
Monday (or, if any such day is not a Business Day, on the next
succeeding Business Day) for the three-week period ending on
the previous Friday by Citibank on the basis of such rates
reported by certificate of deposit dealers to and published by
the Federal Reserve Bank of New York or, if such publication
shall be suspended or terminated, on the basis of quotations
for such rates received by Citibank from three New York
certificate of deposit dealers of recognized standing selected
by Citibank, by (B) a percentage equal to one hundred percent
(100%) minus the average of the daily percentages specified
during such three-week period by the Federal Reserve Board for
determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement)
for Citibank in respect of liabilities consisting of or
including (among other liabilities) three-month U.S. dollar
nonpersonal time deposits in the United States, plus
(iii) the average during such three-week period of the maximum
annual assessment rates estimated by Citibank for determining
the then current annual assessment payable by Citibank to the
Federal Deposit Insurance Corporation (or any successor) for
insuring U.S. dollar deposits in the United States; and
7
(c) the sum of (i) one-half of one percent (0.50%) per annum plus (ii)
the Federal Funds Rate.
Code shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations promulgated thereunder from time to time.
Collateral shall have the meaning set forth in Paragraph 7.1 of Section
7 of this Agreement.
Collective Borrowers shall mean each and all of the Borrowers, as
specified in Paragraph 3.6(b) of Section 3 of this Agreement.
Commitment shall mean each Lender's commitment in accordance with this
Agreement to make Revolving Loans and acquire L/C Participations (the "Revolving
Credit Commitment"), in the amount of their respective pro rata shares of the
Revolving Credit Commitment set forth in the schedules prepared by the
Administrative Agent or the Assignment and Transfer Agreement executed by the
relevant Lender, and the commitment of the Issuing Bank to issue Letters of
Credit pursuant to Section 4 of this Agreement.
Commitment Fee shall: (a) mean the fee due the Administrative Agent,
for allocation among the Lenders, at the last Business Day of each month
beginning with the month in which the Initial Closing Date occurs, and (b) be
determined by multiplying (i) the difference between (A) the Revolving Credit
Facility and (B) the sum, for that month, of (x) the average daily balance of
Revolving Loans plus (y) the average daily balance of the Letter of Credit
Undrawn Amounts for that month, by (ii) one half of one percent (0.50%) per
annum, calculated on the basis of the number of days in that month and a year of
360 days.
Consolidated Balance Sheet shall mean a consolidated or compiled, as
applicable, balance sheet for the Obligors and their consolidated subsidiaries,
eliminating all inter-company transactions and prepared in accordance with GAAP.
Consolidating Balance Sheet shall mean (subject to Paragraph 1.3 of
this Section 1) a Consolidated Balance Sheet plus individual balance sheets for
the Obligors and their consolidated subsidiaries, showing all eliminations of
intercompany transactions, including a balance sheet for each of the Obligors
exclusively, all prepared in accordance with GAAP.
Consultant shall have the meaning set forth in subparagraph (f) of
Paragraph 8.2 of this Agreement.
Copyrights shall mean all of each of the Obligors' present and
hereafter acquired copyrights, copyright registrations, recordings, copyright
applications, designs, styles, marks, prints and labels bearing any of the
foregoing, copyright licenses, and all of the Obligors' cash and non-cash
proceeds thereof.
Current Assets shall mean those assets of the Obligors which, in
accordance with GAAP, are classified as current.
8
Current Liabilities shall mean those liabilities of the Obligors which,
in accordance with GAAP, are classified as "current," provided however, that,
notwithstanding GAAP, the Revolving Loans and the current portion of Permitted
Indebtedness shall be considered "current liabilities."
Default shall mean any event specified in Section 11 hereof, whether or
not any requirement for the giving of notice, the lapse of time, or both, or any
other condition, event or act, has been satisfied.
Default Rate of Interest shall mean a rate of interest per annum equal
to the sum of: (a) two percent (2%) and (b) the applicable increment over the
Citibank Base Rate (as set forth in Paragraph 9.1 or Paragraph 9.2 of Section 9
hereof) plus the Citibank Base Rate, which shall apply to the Reimbursement
Obligations as provided in Paragraph 4.6 of Section 4 of this Agreement and to
all other Obligations or Guaranty Obligations (as applicable) due from the
Obligors as provided in Paragraph 9.1(c) of Section 9 of this Agreement.
Depository Account shall mean a collection account subject to the
Administrative Agent's control.
DIP Facility Fee has the meaning set forth in Paragraph 9.6 of Section
9 of this Agreement.
Disposition shall mean any transaction, or series of related
transactions, pursuant to which any Obligor or any of its subsidiaries sells,
assigns, transfers or otherwise disposes of any property or assets (whether now
owned or hereafter acquired) to any other Person, in each case, whether or not
the consideration therefor consists of cash, securities or other assets owned by
the acquiring Person, excluding any sales of Inventory in the ordinary course of
business on ordinary business terms (and it is understood that any items
disposed of pursuant to a Participating Customer Agreement shall not be treated
as effected in the ordinary course of business).
Documents of Title shall mean all of each of the Obligors' present and
future documents (as defined in the UCC), and any and all warehouse receipts,
bills of lading, shipping documents, chattel paper, instruments and similar
documents, all whether negotiable or not and all goods and Inventory relating
thereto and all cash and non-cash proceeds of the foregoing.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Plan shall mean the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Pension Plan for Wage
Basis Employees.
EBITDA shall mean, for any applicable period, pro forma combined net
income of Trim Trends and the Trim Trends Division minus (to the extent included
in determining net income) each of the following to the extent distributable to
Trim Trends and the Trim Trends Division: (A) income tax credits, (B) interest
income, (C) gains from extraordinary items, (D) aggregate non-cash net gains
(but not any aggregate net loss) arising from the sale, exchange or other
disposition of capital assets, (E) any other non-cash gains that would have been
included in consolidated net income under GAAP but for this provision, and (F)
any other income that does not arise in the ordinary course of business; plus
(to the extent included in determining net income) each of the following: (A)
any provision for income taxes, (B) interest expense, (C) the amount of any
non-cash charges (including amortization, depreciation and the non-cash portion
9
of imputed interest on employee post-retirement benefits other than pension
benefits), (D) amortized debt discount and (E) any aggregate non-cash net loss
arising from the sale, exchange or other disposition of capital assets. All
items and classifications relevant to the determination of EBITDA for a period
shall be determined in accordance with GAAP applied on a basis consistent with
its application in the audited financial statements of the Obligors for the
Fiscal Year ended September 30, 2000.
Eligible Accounts Receivable shall mean, as to any Obligor, the gross
amount of such Obligor's Trade Accounts Receivable, other than Excluded Albion
Receivables, that are subject to a valid, first priority and fully perfected
security interest in favor of the Administrative Agent, on behalf of the Agents,
the Issuing Bank and the Lenders subject as to priority only to the Carve-Out
and the United States Trustees Fees, which conform to the warranties contained
herein and which, at all times, continue to be acceptable to the Administrative
Agent in the exercise of its reasonable business judgment, less, without
duplication, the sum of:
(a) any returns, discounts, claims, credits and allowances of any
nature (whether issued, owing, granted, claimed or outstanding), and
(b) reserves for any such Trade Accounts Receivable that arise from or
are subject to or include:
(i) sales (A) to the United States, any state or other
governmental entity of or in the United States or to any
agency, department or division thereof, except for any such
sales as to which such Obligor has complied with the
Assignment of Claims Act of 1940 or (B) to Canada, any
province or other governmental entity of or in Canada or to
any agency, department or division thereof, except where the
Administrative Agent is satisfied that the Administrative
Agent holds a valid perfected first priority security interest
in the Accounts Receivable, in any case covered by (A) or (B),
any other applicable statute, rules or regulation, to the
Administrative Agent's satisfaction in the exercise of its
reasonable business judgment;
(ii) foreign sales, other than sales which otherwise comply
with all of the other criteria for eligibility hereunder and
are (x) secured by letters of credit (in form and substance
satisfactory to the Administrative Agent) issued or confirmed
by, and payable at, banks having a place of business in the
United States, or (y) to customers located in Canada provided
such Accounts do not exceed $5,000,000.00 in the aggregate at
any one time;
(iii) Accounts that remain unpaid more than ninety (90) days
from original invoice date;
(iv) contra accounts;
(v) sales to any other Obligor, any subsidiary, or to any
company affiliated with the Obligors in any way;
(vi) ▇▇▇▇ and hold (deferred shipment) or consignment sales;
10
(vii) sales to any customer which is: (A) insolvent, (B) the
debtor in any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceedings under any
federal, state law or provincial, (C) negotiating, or has
called a meeting of its creditors for purposes of negotiating,
a compromise of its debts, or (D) financially unacceptable to
the Agents or has a credit rating unacceptable to the Agents;
(viii) all sales to any customer if fifty percent (50%) or
more of the aggregate U.S. dollar amount (or equivalent) of
all outstanding invoices to such customer are unpaid more than
ninety (90) days from invoice date;
(ix) pre-billed receivables and receivables arising from
progress billing;
(x) an amount representing returns, discounts, claims,
credits, allowances and applicable terms;
(xi) sales not payable in United States or Canadian currency;
and
(xii) any other reasons deemed necessary by the Lenders less
any reserves required by the Administrative Agent in its
reasonable discretion, and which are customary either in the
commercial finance industry or in the lending practices of
either of the Agents and/or the Lenders. It is understood that
any payment due under the GM Transition Supply Agreement, or
any similar agreement to the extent such agreement provides
for a lump sum or scheduled payments to the applicable
Obligors not in the ordinary course and not in the form of per
item price adjustments will not be included in Eligible
Accounts Receivable.
Eligible Assignee shall mean (a) a Lender or any Affiliate or Approved
Fund of such Lender, (b) a commercial bank having total assets in excess of
$5,000,000,000, (c) a finance company, insurance company, other financial
institution or fund reasonably acceptable to the Administrative Agent, regularly
engaged in making, purchasing or investing in loans and having a net worth,
determined in accordance with GAAP, in excess of $500,000,000 (or, to the extent
net worth is less than such amount, a finance company, insurance company, other
financial institution or fund, reasonably acceptable to the Administrative Agent
or (d) a savings and loan association or savings bank organized under the laws
of the United States or any State thereof having a net worth, determined in
accordance with GAAP, in excess of $500,000,000.
Eligible Finished Goods Inventory shall mean, as to any Obligor, the
gross amount of such Obligor's Inventory, other than Excluded Albion Inventory,
that is subject to a valid, first priority and fully perfected security interest
in favor of the Administrative Agent, on behalf of the Agents, the Issuing Bank
and the Lenders subject as to priority only to the Carve-Out and the United
States Trustees Fees, and which conforms to the warranties contained herein and
which, at all times, continues to be acceptable to the Administrative Agent in
the exercise of its reasonable business judgment, less, without duplication, any
(a) Inventory at the relevant time treated as Eligible Raw Materials Inventory
or Eligible Work-in-Process Inventory or other raw materials or work-in-process
or OMC Reserve Inventory or Tooling, (b) supplies, (c) Inventory
11
not present in the United States or Canada or constituting a test count
variance, (d) Inventory returned or rejected by any of such Obligor's customers
(other than goods that are undamaged and re-sellable in the normal course of
business) and goods to be returned to such Obligor's suppliers, (e) Inventory in
transit to third parties (other than such Obligor's agents or warehouses), or in
the possession of a warehouseman, bailee, third party processor, or other third
party, unless such warehouseman, bailee or third party has executed a notice of
security interest agreement (in form and substance satisfactory to the
Administrative Agent) and the Administrative Agent, on behalf of the Lenders,
the Agents and the Issuing Bank, shall have a first priority perfected security
interest in such Inventory, and (f) less any reserves required by the
Administrative Agent in its reasonable discretion, including without limitation
for special order goods, discontinued, slow-moving and obsolete Inventory,
market value declines, ▇▇▇▇ and hold (deferred shipment), consignment sales,
shrinkage and any applicable customs, freight, duties and Taxes.
Eligible Inventory shall mean all (a) Eligible Finished Goods
Inventory, (b) Eligible Raw Material Inventory and (c) Eligible Work-in-Process
Inventory.
Eligible Raw Materials Inventory shall mean, as to any Obligor, the
gross amount of such Obligor's Inventory, other than Excluded Albion Inventory,
which consists of raw materials and is subject to a valid, first priority and
fully perfected security interest in favor of the Administrative Agent, on
behalf of the Lenders, the Agents and the Issuing Bank subject as to priority
only to the Carve-Out and the United States Trustees Fees, and which conforms to
the warranties contained herein and which, at all times, continues to be
acceptable to the Administrative Agent in the exercise of its reasonable
business judgment, less, without duplication, any such raw materials Inventory
(a) at the relevant time treated as Eligible Finished Goods Inventory or
Eligible Work-in-Process Inventory or OMC Reserve Inventory or Tooling, (b) not
present in the United States or Canada or constituting a test count variance,
(c) not usable in the normal course of such Obligor's business to produce
Eligible Finished Goods Inventory, whether as a result of obsolescence or
otherwise, (d) in transit to third parties (other than such Obligor's agents or
warehouses), or in the possession of a warehouseman, bailee, third party
processor, or other third party, unless such warehouseman, bailee or third party
has executed a notice of security interest agreement (in form and substance
satisfactory to the Administrative Agent) and the Administrative Agent,
on behalf of the Lenders, the Agents and the Issuing Bank, shall have a first
priority perfected security interest in such Inventory, and (e) less any
reserves required by the Administrative Agent in its reasonable discretion,
including without limitation for market value declines, shrinkage and any
applicable customs, freight, duties and Taxes.
Eligible Work-in-Process Inventory shall mean, as to any Obligor, the
gross amount of such Obligor's Inventory, other than Excluded Albion Inventory,
that is subject to a valid, first priority and fully perfected security interest
in favor of the Administrative Agent, on behalf of the Lenders, the Agents and
the Issuing Bank subject as to priority only to the Carve-Out and the United
States Trustees Fees, and which conforms to the warranties contained herein and
which, at all times, continues to be acceptable to the Administrative Agent in
the exercise of its reasonable business judgment, less, without duplication, any
(a) Inventory at the relevant time treated as Eligible Raw Materials Inventory
or Eligible Finished Goods Inventory or OMC Reserve Inventory or Tooling, (b)
supplies, (c) Inventory not present in the United States or Canada or
constituting a test count variance, (d) Inventory not usable in the ordinary
course of
12
such Obligor's business to produce Eligible Finished Goods Inventory and goods
to be returned to such Obligor's suppliers, (e) Inventory in transit to third
parties (other than such Obligor's agents or warehouses), or in the possession
of a warehouseman, bailee, third party processor, or other third party, unless
such warehouseman, bailee or third party has executed a notice of security
interest agreement (in form and substance satisfactory to the Administrative
Agent) and the Administrative Agent, on behalf of the Lenders, the Agents and
the Issuing Bank, shall have a first priority perfected security interest in
such Inventory, and (f) less any reserves required by the Administrative Agent
in its reasonable discretion, including without limitation for obsolete
Inventory, market value declines, shrinkage and any applicable customs, freight,
duties and Taxes.
Environmental Laws shall mean all international, national, state,
provincial, regional, federal, municipal and local laws (including, without
limitation, principles of common law and decisional law), statutes, treaties,
codes, ordinances, rules, regulations, decrees, judgments, directives, binding
policies, permits, authorizations, consents, licenses, or orders relating to or
addressing the environment (including, without limitation, natural resources) or
the health or safety of humans or other living organisms.
Equipment shall mean, as to any Obligor, all of such Obligor's present
and hereafter acquired equipment (as defined in the UCC) including, without
limitation, all machinery, equipment, furnishings and fixtures, and all
additions, substitutions and replacements thereof, wherever located, together
with all attachments, components, parts, equipment and accessories installed
thereon or affixed thereto and all proceeds thereof of whatever sort.
ERISA shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time and the rules and regulations promulgated
thereunder from time to time.
ERISA Affiliate shall mean any corporation or trade or business which
is a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as any Borrower or is under common control (within
the meaning of Section 414(c) of the Code) with any Borrower.
ERISA Event shall mean (a) with respect to a Plan subject to Title IV
of ERISA, a Reportable Event or an event described in Section 4068 of ERISA, (b)
the withdrawal of any Borrower or ERISA Affiliate from a Multiple Employer Plan
during a plan year in which it was a "substantial employer", as such term is
defined in Section 4001(a)(2) of ERISA, or the incurrence of liability by any
Borrower or ERISA Affiliate under Section 4064 of ERISA upon the termination of
a Multiple Employer Plan, (c) providing notice of intent to terminate a Plan
pursuant to Section 4041(c) of ERISA or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, (d) the institution of proceedings to
terminate a Plan by the PBGC under Section 4042 of ERISA, (e) a complete or
partial withdrawal by any Borrower or ERISA Affiliate from a Multiemployer Plan,
(f) a failure by any Borrower or ERISA Affiliate to make required contributions
to a Plan, (g) the imposition of any liability under Title IV of ERISA, other
than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any
Borrower or ERISA Affiliate, (h) an application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Code with
respect to any Single Employer Plan, (i) the imposition of a lien upon any
Borrower or ERISA Affiliate pursuant to Section 412
13
of the Code or Section 302 of ERISA, (j) any event or condition that results in
the reorganization or insolvency of a Multiemployer Plan under Section 4241 or
4245 of ERISA, (k) any Borrower or ERISA Affiliate engages in a Prohibited
Transaction or otherwise becomes liable with respect to a Prohibited
Transaction, or (l) any breach by Harvard of the Agreement Between Harvard
Industries, Inc. and the PBGC, dated October 15, 1998 and as hereafter amended,
or any action by the PBGC to enforce the terms of such agreement.
Event(s) of Default shall have the meaning set forth in Paragraph 11.1
of Section 11 of this Agreement.
Excluded Albion Inventory shall mean all Inventory of ▇▇▇▇▇-Albion
which is used for production of a Participating Customer which is party to a
Participating Customer Agreement if such Inventory is created after the date of
such agreement and is purchased by such customer on terms set forth in such
agreement.
Excluded Albion Receivables shall mean all Trade Accounts Receivable
payable to ▇▇▇▇▇-Albion by any Participating Customer which is party to a
Participating Customer Agreement relating to the facility in Albion, Michigan,
and which arises after the effective date of such agreement.
Excluded Property shall mean any contract, lease, license or other
agreement that contains a provision prohibiting the assignment or grant of a
security interest therein without the consent of another Person to the extent
(but only to the extent) that such consent has not been obtained and the
prohibition either exists on the date of this Agreement or, after the date of
this Agreement is included in such contract, lease, license or other agreement
with the prior written consent of the Agents and Required Revolving Facility
Lenders (other than any of the foregoing constituting an account or a general
intangible for money due or to be come due to which Section 9-318(4) of the UCC
applies). Notwithstanding anything set forth herein to the contrary, the
Administrative Agent will be deemed to have, and at all times to have had, a
security interest in the proceeds of such Excluded Property which, as to
priority, is subject only to the Carve-Out and the United States Trustees Fees.
Excluded Stock shall mean capital stock of the subsidiaries of the
Borrowers that are organized outside the United States representing thirty-five
percent (35%) of their capital stock on the Initial Closing Date.
Federal Funds Rate shall mean, for any day, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent
from three Federal funds brokers of recognized standing selected by it.
Federal Reserve Board shall mean the Board of Governors of the Federal
Reserve System.
Filing Date shall have the meaning set forth in the recitals of this
Agreement.
14
Final Order shall mean an order of the Bankruptcy Court pursuant to
Sections 363 and 364 of the Bankruptcy Code and Bankruptcy Rule 4001, approving
this Agreement and the other Loan Documents and authorizing the incurrence by
the Borrowers of permanent post-petition secured and super-priority indebtedness
in accordance with this Agreement, and as to which no stay has been entered and
which has not been reversed, modified, vacated or overturned, and which is in
form and substance satisfactory to the Agents.
Final Closing Date shall mean the date that this Agreement has been
duly executed by the parties and delivered to the Administrative Agent, after
approval by the Final Order of the Bankruptcy Court.
First Amendment Date shall have the meaning set forth in the title of
this Agreement.
First Day Orders means those orders presented to the Bankruptcy Court
for consideration on the first day of the Cases, regardless of whether such
orders are entered on the first day of the Cases or shortly thereafter.
Fiscal Month shall mean, with respect to the Obligors, the successive
periods ending January 15, 2002, February 24, 2002, March 24, 2002, April 28,
2002, May 26, 2002 and June 23, 2002.
Fiscal Year shall mean each twelve (12) month period commencing on
October 1 of each year and ending on the following September 30.
Fund shall mean any investment fund or commingled investment vehicle
(however organized) that invests in commercial loans or advances made under
credit agreements.
Funded Debt shall mean, with respect to the Obligors, without
duplication, the aggregate of all Indebtedness of the Obligors other than any
referred to in clause (b) of the definition of "Indebtedness" or in clause (d)
of that definition, to the extent that such Indebtedness under clause (d) arises
in respect of Indebtedness under clause (b) or clause (d) of that definition
including PIK interest. Without limiting the foregoing, Funded Debt shall
include the Obligations (including the L/C Obligations), the Guaranty
Obligations and the obligations of the Obligors under the Junior Lien Financing
Documents.
GAAP shall mean generally accepted accounting principles in the United
States as in effect from time to time and for the period as to which such
accounting principles are to apply, provided that in the event any of the
Obligors modifies its accounting principles and procedures as applied as of the
Initial Closing Date, such Obligor shall provide to the Agents and the Lenders
such statements of reconciliation as shall be in form and substance acceptable
to the Agents.
GECC shall mean General Electric Capital Corporation.
General Intangibles shall mean, as to any Obligor, all of each of such
Obligor's present and hereafter acquired general intangibles (as defined in the
UCC), and shall include, without limitation, all present and future right, title
and interest in and to: (a) all Trademarks, tradenames, corporate names,
business names, logos and any other designs or sources of business
15
identities, (b) Patents, together with any improvements on said Patents, utility
models, industrial models, and designs, (c) Copyrights, (d) trade secrets, (e)
licenses, permits and franchises, (f) all applications with respect to the
foregoing, (g) all right, title and interest in and to any and all extensions
and renewals, (h) goodwill with respect to any of the foregoing, (i) any other
forms of similar intellectual property, (j) all customer lists, distribution
agreements, supply agreements, blue prints, indemnification rights and Tax
refunds, together with all monies and claims for monies now or hereafter due and
payable in connection with any of the foregoing or otherwise, and all cash and
non-cash proceeds thereof, including, without limitation, the proceeds or
royalties of any licensing agreements between such Obligor and any licensee of
any such Obligor's General Intangibles other than Excluded Property.
GM Transition Supply Agreement shall mean the Transition Supply
Agreement dated as of January 1, 2001 between Harvard and Pottstown, on the one
hand, and General Motors Corporation, on the other hand.
Governmental Authority shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
Guarantors shall mean each of Trim Trends Canada Limited and ▇▇▇▇▇▇
▇▇▇▇▇▇ Inc.
Guaranty shall have the meaning set forth in Paragraph 16.1(a) of
Section 16 of this Agreement.
Guaranty Obligations shall have the meaning set forth in Paragraph
16.1(c) of Section 16 of this Agreement.
Harvard Obligations shall have the meaning set forth in Paragraph
16.1(a) of Section 16 of this Agreement.
▇▇▇▇▇-Albion shall mean ▇▇▇▇▇-Albion Corporation or any successor.
Hedging Agreement shall mean, in relation to any Person, (a) any
interest rate protection agreement, interest rate future, interest rate option,
interest rate swap, interest rate cap or other interest rate hedge or
arrangement to which that Person is a party and (b) any other agreement,
transaction or other arrangement for the transfer or assumption of risk and/or
exposure to fluctuations in currency exchange rates, credit risk or any other
variable that is not within that Person's control.
Inactive Guarantor shall mean 177192 Canada Inc.
Indebtedness shall mean, without duplication, in relation to any
Person, all liabilities, contingent or otherwise, which are any of the
following: (a) obligations in respect of borrowed money (including obligations
in respect of interest that is capitalized or paid in kind (PIK interest)), (b)
obligations (contingent or other) in respect of any Hedging Agreement or the
deferred purchase price of property, services or assets, other than Inventory,
(c) Capital Lease obligations, (d) the maximum available amount of all standby
letters of credit or acceptances issued or created for the account of such
Person and (e) all other indebtedness of another Person assumed
16
or guaranteed by such Person, in respect of which such Person is secondarily
liable, or which are secured by a lien on any property of such Person, to the
extent there is recourse to such Person in respect of such liabilities, or to
the extent of the fair market value of the property which is subject to such
lien, if less. The Indebtedness of a Person shall include the Indebtedness of
any partnership or joint venture in which such Person is a general partner or
joint venturer, but only to the extent to which there is recourse to such Person
for the payment of such Indebtedness.
Initial Closing Date shall mean the second Business Day after the date
that this Agreement has been approved by the Interim Order of the Bankruptcy
Court and executed by the parties hereto.
Insurance Proceeds shall mean proceeds or payments from an insurance
carrier with respect to any loss, casualty or damage to Collateral.
Intercompany Transfer shall mean any sale, lease, license, assignment,
transfer or other disposition (including without limitation any dividend or
distribution) of assets of any of the Obligors or any subsidiary of any of them
that is to another Obligor.
Intercreditor Agreement shall mean the Lien Intercreditor Agreement
entered into among the Pre-Petition Lenders, Hilco Capital LP, and CIT as the
Administrative Agent under the Pre-Petition Credit Agreement, dated as of May
31, 2001.
Interest Expense shall mean the total interest obligations (paid or
accrued) of the Obligors, determined in accordance with GAAP, applied on a
consistent basis with the latest audited financial statements of the Obligors.
Interim Order shall mean the order of the Bankruptcy Court, dated
January 24, 2002, entered into in connection with the Cases and authorizing this
Agreement on an interim basis which is substantially similar to Exhibit B hereto
or is otherwise in form and substance satisfactory to the Agents.
Inventory shall mean, as to any Obligor, all of such Obligor's present
and hereafter acquired inventory (as defined in the UCC) and including, without
limitation, all merchandise, inventory and goods, and all additions,
substitutions and replacements thereof, wherever located, together with all
goods and materials used or usable in manufacturing, processing, packaging or
shipping same in all stages of production from raw materials through
work-in-process to finished goods.
Inventory Loan Cap shall mean the amount of $10,000,000.
Investment Property shall mean all present and hereafter acquired
investment property (as defined in the UCC), including, without limitation, (a)
all securities and capital stock or other interests in any other Person whether
certificated or uncertificated; all warrants, options and other rights to
acquire securities, capital stock or other interests in any other Person; all
securities entitlements; and all securities accounts, together with all
financial assets credited thereto; (b) all accessions and additions to,
substitutions for, and replacements, products and proceeds of any of the
foregoing, and, to the extent not otherwise included, all (c) payments under
insurance, or (d) any indemnity, warranty, guaranty or letter of credit, payable
by reason of loss or damage to or
17
otherwise with respect to any of the foregoing, and (e) any and all supporting
obligations in respect of any of the foregoing.
IP Collateral shall mean all of the following:
(i) all Patents, including, without limitation, the patents
and applications, listed on (1) Schedule A and (2) Schedule
Foreign Patents attached to the IP Security Agreement referred
to in the Pre-Petition Credit Agreement (which is hereby
incorporated in and made a part hereof) along with any and all
(a) inventions and improvements described and claimed therein,
(b) any and all reissues and renewals, divisions,
continuations, extensions and continuations-in-part thereof,
(c) all income, royalties, damages and payments now and
hereafter due and/or payable in connection therewith,
including, without limitation, damages and payments for past,
present or future infringements thereof, and (d) rights to ▇▇▇
for past, present or future infringements thereof (all of the
foregoing are sometimes hereinafter individually and/or
collectively referred to as the "Patent Collateral");
(ii) all Trademarks, including federal, state and common law
trademark registrations and/or applications and tradenames
including, without limitation, the trademarks and
applications, if any, listed on (1) Schedule B and (2)
Schedule Foreign Trademarks attached to the IP Security
Agreement referred to in the Pre-Petition Credit Agreement
(which is hereby incorporated in and made a part hereof), and
any and all (a) reissues and/or renewals thereof, and (b) all
income, royalties, damages and payments now and hereafter due
and/or payable in connection therewith, including, without
limitation, damages and payments for past, present or future
infringements thereof and rights to ▇▇▇ for past, present or
future infringements thereof (all of the foregoing are
sometimes hereinafter individually and/or collectively
referred to as the "Trademark Collateral");
(iii) all Copyrights, including, without limitation,
registrations, recordings and applications in the United
States Copyright office, including, without limitation, any
thereof referred to in Schedule C attached to the IP Security
Agreement referred to in the Pre-Petition Credit Agreement
(which is hereby incorporated in and made a part hereof);
(iv) any Copyright License, Patent License or Trademark
License, including, without limitation, such licenses, if any,
listed on Schedule D attached to the IP Security Agreement
referred to in the Pre-Petition Credit Agreement (which is
hereby incorporated in and made a part hereof) along with (a)
any renewals, extensions, supplement and continuations
thereof, (b) all income, royalties, damages and payments now
and hereafter due and/or payable in connection therewith,
including, without limitation, damages and payments for past,
present or future breaches thereof, (c)
18
rights to ▇▇▇ for past, present or future breaches thereof,
and (d) any other rights to use, exploit or practice any or
all of the patents, trademarks or copyrights pertaining
thereto (all of the foregoing are sometimes referred to herein
individually and/or collectively as the "License Collateral");
(v) all goodwill of any Obligor's business connected with and
symbolized by the Trademarks and other general intangibles,
including, without limitation, know-how, trade secrets,
customer lists, proprietary information, inventions, methods,
procedures and formulae;
(vi) all cash and non-cash proceeds of the foregoing described
in clauses (i) through (v) of this definition, and, to the
extent not otherwise included, any payments under any
insurance, indemnity, warranty or guarantee or letter of
credit payable with respect to any of the foregoing described
in clauses (i) through (v) of this definition;
(vii) payments (in any form whatsoever) made or due and
payable to any Obligor from time to time in connection with
any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of any of the foregoing
described in clauses (i) through (v) of this definition by any
Governmental Authority (or any person acting under color of a
Governmental Authority);
(viii) instruments representing obligations to pay amounts in
respect of any products of any of the foregoing described in
clauses (i) through (v) of this definition; and
(ix) other amounts from time to time paid or payable under or
in connection with any of any of the foregoing described in
clauses (i) through (v) of this definition.
(x) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks, and related data processing
software (owned by any Obligor or in which it has an interest)
that at any time evidence or contain information relating to
any IP Collateral or are otherwise necessary or helpful in the
use thereof, collection thereof or realization thereupon.
IP Interests shall have the meaning set forth in Paragraph 7.3(b) of
Section 7 of this Agreement.
Issuing Bank shall mean Citibank (understood to include any successor),
as issuer of any Letter of Credit (or, in substitution for Citibank, any Lender
or Affiliate of a Lender acceptable to the Agents, Harvard and the Required
Financing Facility Lenders which assumes all functions, rights and obligations
under the Loan Documents given to the Issuing Bank, pursuant to an agreement
with and in form and substance satisfactory to Harvard and the Agents and the
institution previously acting as the Issuing Bank).
19
Junior Lien Financing Agreement shall mean that certain Agreement dated
as of May 31, 2001 between the Junior Lien Lender, the Pre-Petition Borrowers
and the Guarantors.
Junior Lien Financing Documents shall mean the Junior Financing
Agreement, the promissory notes provided for therein, the Securities Purchase
Agreement and the security documents provided for therein, providing for liens
junior to the liens of the Pre-Petition Agreements, and any other ancillary loan
and security agreements executed from time to time in connection with Junior
Secured Obligations, the Junior Secured Guaranty Obligations or the Junior
Financing Agreement.
Junior Lien Lender means Hilco Capital LP, in its capacity as lender
under the Junior Lien Financing Agreement and, where relevant in the context, in
its capacity as party to the other Junior Lien Financing Documents.
Junior Secured Guaranty Obligations shall have the meaning set forth in
Paragraph 14.2(b) of Section 14 of the Junior Financing Agreement.
Junior Secured Obligations shall mean all indebtedness and other
obligations of the Borrowers, or any one of them, which may at any time be owing
by the Borrowers or any one of them to the Junior Lien Lender under or in
respect of any of the Junior Lien Financing Documents or the transactions or
interests contemplated therein, whether such indebtedness is absolute or
contingent, joint or several, matured or unmatured, direct or indirect and
whether the Borrowers are liable to the Junior Lien Lender for such indebtedness
and obligations as principal, surety, endorser, guarantor or otherwise. Junior
Secured Obligations shall also include indebtedness owing to the Junior Lien
Lender by the Borrowers or any one of them under any Junior Lien Financing
Document or under any other agreement or arrangement now or hereafter entered
into between the Borrowers and the Junior Lien Lender; indebtedness or
obligations incurred by, or imposed on, the Junior Lien Lender as a result of
environmental claims arising out of any of the Borrowers' operations, premises
or waste disposal practices or sites in accordance with the Junior Financing
Agreement and the Borrowers' liability to the Junior Lien Lender as maker or
endorser of any promissory note or other instrument for the payment of money in
connection with other Junior Secured Obligations. However, the Junior Secured
Obligations shall not include any such obligations to the extent they arise
after the Filing Date unless they arise pursuant to the terms of the Junior Lien
Financing Documents as in effect prior to the Filing Date, subject only to such
amendments or other modifications as are contemplated in the Initial Order or
the Final Order or another order submitted for approval by the Bankruptcy Court
with the prior written consent of the Agents and the Lenders.
L/C Application shall have the meaning set forth in Paragraph 4.2(a) of
Section 4 of this Agreement.
L/C Eligible Account Parties shall mean each of the Borrowers and Trim
Trends.
L/C Obligations shall mean at any time, an amount equal to the sum of
(a) the Pre-Petition L/C Obligations (for so long as they remain "Letter of
Credit Undrawn Amounts" under the Pre-Petition Credit Agreement), (b) the
aggregate of the Letter of Credit Undrawn Amounts at the time and (c) the
aggregate of the Reimbursement Obligations at the time.
20
L/C Participant shall mean each Revolving Facility Lender.
L/C Participation shall have the meaning set forth in Paragraph 4.5 of
Section 4 of this Agreement.
L/C Participation Fee shall mean the fee the Administrative Agent and
the Revolving Facility Lenders may charge the Borrowers under Paragraph 9.3 of
Section 9 of this Agreement for: (a) making extensions of credit by taking L/C
Participations hereunder, and/or (b) otherwise aiding the L/C Eligible Account
Parties, or any one of them, in obtaining Letters of Credit, all pursuant to
Section 4 hereof.
Lender shall mean each financial institution or other entity that (a)
is listed on the signature pages hereof as a "Lender" or (b) from time to time
becomes a party hereto by execution of an Assignment and Transfer Agreement.
Letter of Credit Sub-Line shall mean the commitment of the Issuing Bank
to issue Letters of Credit, pursuant to Section 4 hereof, in an aggregate amount
of up to $10,000,000 outstanding at any time (subject to reduction as
contemplated in this Agreement), and the commitment of the Revolving Facility
Lenders to assist the Borrowers in obtaining those Letters of Credit by taking
L/C Participations.
Letter of Credit Undrawn Amounts shall mean, at any time, the aggregate
undrawn and unexpired face amount of all Letters of Credit outstanding at such
time and Pre-Petition L/C Obligations while they remain "Letter of Credit
Undrawn Amounts" as that term is defined in the Pre-Petition Credit Agreement).
Letters of Credit shall mean all letters of credit issued in accordance
with Section 4 hereof by the Issuing Bank for or on behalf of any of the L/C
Eligible Account Parties.
Line of Credit shall mean the aggregate commitment of the Lenders (a)
to make Revolving Loans pursuant to Section 3 of this Agreement, and (b) as
Issuers, to assist any of the L/C Eligible Account Parties in opening Letters of
Credit pursuant to Section 4 of this Agreement provided that nothing herein
shall be deemed to increase any Lender's commitment hereunder, as it shall be
set forth in the applicable schedules prepared by the Administrative Agent or in
the Assignment and Transfer Agreements executed by such Lender, and the
aggregate amount of all such commitments shall not exceed $35,000,000.00.
Loan Documents shall mean this Agreement, the Promissory Notes, the L/C
Applications, the Reimbursement Agreements, the other closing documents and any
other ancillary loan and security agreements executed from time to time in
connection with the Obligations, the Guaranty Obligations or this Agreement, all
as may be renewed, amended, extended, increased or supplemented from time to
time.
Loans shall mean the Revolving Loans.
Material Adverse Change shall mean a material adverse change in (i) the
ability of the Obligors to perform their respective obligations under the Loan
Documents or (ii) the ability of the Agents and the Lenders to enforce the Loan
Documents or (iii) the ability of the Borrowers to
21
carry out their business plan as delivered pursuant to Paragraph 2.2(i) of
Section 2 of this Agreement within the context of the Budget.
Material Adverse Effect shall mean a material adverse effect on (i) the
ability of the Obligors to perform their respective obligations under the Loan
Documents or (iii) the ability of the Agents and the Lenders to enforce the Loan
Documents.
Multiemployer Plan shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which any Borrower or ERISA Affiliate is making
or accruing an obligation to make contributions, or with respect to which it has
any liability.
Multiple Employer Plan shall mean a Single Employer Plan, which (a) is
maintained for employees of any Borrower or ERISA Affiliate and at least one
Person other than any of the Borrowers or ERISA Affiliates or (b) was so
maintained and in respect of which any Borrower or ERISA Affiliate could have
liability under Section 4064 or 4069 of ERISA in the event such Plan has been or
were to be terminated.
Net Cash Proceeds shall mean, (i) with respect to any Disposition by
any Obligor or any of its subsidiaries, the amount of cash received (directly or
indirectly) from time to time (whether as initial consideration or through the
payment of deferred consideration) by or on behalf of such Obligor or such
subsidiary, in connection therewith after deducting therefrom only (A) the
amount of any Indebtedness secured by any lien permitted by Paragraph 8.2(k)(i)
on any asset (other than Indebtedness assumed by the purchaser of such asset)
which is required to be, and is, repaid in connection with such Disposition
(other than Indebtedness under this Agreement), (B) reasonable expenses related
thereto incurred by such Obligor or such subsidiary in connection therewith, (C)
transfer taxes paid to any taxing authorities by such Obligor or such subsidiary
in connection therewith, and (D) net income taxes to be paid in connection with
such Disposition (after taking into account any tax credits or deductions and
any tax sharing arrangements) and (ii) with respect to the issuance or
incurrence of any Indebtedness by any Obligor or any of its subsidiaries, or the
sale or issuance by any Obligor or any of its subsidiaries of any shares of its
capital stock, the aggregate amount of cash received (directly or indirectly)
from time to time (whether as initial consideration or through the payment of
deferred consideration) by or on behalf of such Obligor or such subsidiary in
connection therewith, after deducting therefrom only (A) reasonable brokerage
commissions, underwriting fees and discounts, legal fees and similar fees and
commissions, (B) transfer taxes paid by such Obligor or such subsidiary in
connection therewith and (C) net income taxes to be paid in connection therewith
(after taking into account any tax credits or deductions and any tax sharing
arrangements).
Nonconsensual Overadvances shall mean Overadvances to the extent they
exist as a result of (a) a decline in the value of any of the Collateral, (b)
any act or omission of any Borrower or Guarantor in violation of this Agreement
or (c) any other circumstance that is not caused by the Administrative Agent or
any of the Lenders.
Obligations shall mean all Pre-Petition L/C Obligations and all loans,
advances and extensions of credit made or to be made hereunder or under any of
the other Loan Documents, and includes, as to the Guarantors, the continued
obligations under the guaranty of the
22
Borrowers' Obligations, as continued, extended and restated hereunder, including
those made by the restatement or the reaffirmation of the Pre-Petition
Obligations, by the Administrative Agent, the Issuing Bank or the Lenders to the
Borrowers, or any one of them, or to others for the Borrowers' account in
respect of any of the Loans (including, without limitation, all Revolving Loans
and all L/C Obligations); any and all Indebtedness and obligations which may at
any time be owing by the Borrowers or any one of them to either Agent, the
Issuing Bank or any of the Lenders howsoever arising, whether now in existence
or incurred by the Borrowers or any one of them from time to time hereafter;
whether principal, interest fees, costs, expenses or otherwise; whether secured
by pledge, lien upon or security interest in any of the Collateral, or any
assets or property of any Person, firm, entity or corporation; whether such
Indebtedness is absolute or contingent, joint or several, matured or unmatured,
direct or indirect and whether the Borrowers are liable to either Agent, the
Issuing Bank or any of the Lenders for such Indebtedness as principal, surety,
endorser, guarantor or otherwise. Obligations shall also include all other
Indebtedness owing to either Agent, the Issuing Bank or any of the Lenders by
the Borrowers or any one of them under any Loan Document (including the
obligations owing from time to time by the Borrowers to the Lenders by way of
subrogation of such Lenders to the rights of the Issuing Bank in respect of the
Letters of Credit), or under any other agreement or arrangement now or hereafter
entered into between the Borrowers and either Agent, the Issuing Bank or the
Lenders in connection with any of the Loan Documents; Indebtedness or
obligations incurred by, or imposed on, an Agent, the Issuing Bank or any of the
Lenders as a result of environmental claims arising out of any of the Borrowers'
operations, premises or waste disposal practices or sites; and the Borrowers'
liability to either Agent, the Issuing Bank or any of the Lenders as maker or
endorser of any promissory note or other instrument for the payment of money;
the Borrowers' liability to either Agent, the Issuing Bank or any of the Lenders
under any instrument of guaranty or indemnity, or arising under any guaranty,
endorsement or undertaking which such Agent, the Issuing Bank and/or such Lender
may make or issue to others for the Borrowers' account, including any
accommodation extended with respect to L/C Applications, an Agent's and/or a
Lender's or the Issuing Bank's acceptance of drafts or an Agent's and/or a
Lender's or Issuing Bank's endorsement of notes or other instruments for the
Borrowers' account and benefit in connection with other Obligations.
Obligor shall mean each of the Borrowers and each of the Guarantors.
OMC Reserve Inventory shall mean, at any time, reserve for unsaleable
Inventory manufactured for Outboard Marine Corporation which was purchased or
manufactured prior to December 31, 2000, that is maintained on the books and
records of any Obligor in a manner satisfactory to the Administrative Agent.
Operating Cash Flow shall mean EBITDA less Capital Expenditures
consistently applied.
Operating Leases shall mean all leases of property (whether real,
personal or mixed) other than Capital Leases.
Orders shall mean the Interim Order and/or the Final Order, as
applicable.
23
Other Collateral shall mean, as to any Obligor, the Cash Collateral
Account and all of such Obligor's now owned and hereafter acquired lockbox,
blocked accounts and any other deposit accounts maintained with any bank or
financial institutions into which the proceeds of Collateral are or may be
deposited; all cash and other monies and property in the possession or control
of the any Agent, the Issuing Bank and/or any of the Lenders; all books,
records, ledger cards, disks and related data processing software at any time
evidencing or containing information relating to any of the Collateral described
herein or otherwise necessary or helpful in the collection thereof or
realization thereon; and all cash and non-cash proceeds of the foregoing; and
all contract rights, letters of credit, letter of credit rights, claims and
causes of action, including all payment intangibles (as defined in the UCC)
which are not otherwise described herein as Collateral, all governmental
approvals, licenses, franchises and authorizations, to the maximum extent
permitted by applicable law, in each case other than Excluded Property.
Out-of-Pocket Expenses shall mean all of the Agents' (and the Lenders'
upon the occurrence of an Event of Default which is not waived by the Required
Lenders), Issuing Bank's present and future reasonable expenses (including
reasonable fees and expenses of counsel) incurred relative to this Agreement or
any other Loan Documents and the exercise of rights and remedies hereunder and
under the other Loan Documents and Pre-Petition Security Documents (including
without limitation, all due diligence, syndication efforts and all efforts in
connection with monitoring and/or enforcing compliance with the terms of this
Agreement and any other Loan Document) whether incurred heretofore or hereafter;
which expenses shall include, without being limited to: the cost of record
searches, all costs and expenses incurred by the Agents or the Issuing Bank in
opening bank accounts, depositing checks, receiving and transferring funds, and
wire transfer charges, any charges imposed on an Agent due to returned items and
"insufficient funds" of deposited checks and the applicable Agent's standard
fees relating thereto, any amounts paid by, incurred by or charged to, an Agent
and/or a Revolving Facility Lender by the Issuing Bank in connection with an L/C
Participation or a Reimbursement Obligation in respect of any Letter of Credit
or in connection with an L/C Application or other like document which pertain
either directly or indirectly to such Letter of Credit, and any drafts
thereunder, travel, lodging and similar expenses of any Agent's personnel in
connection with inspecting and monitoring the Collateral for the Obligations and
the Guaranty Obligations from time to time hereunder, any applicable counsel
fees and disbursements relating to documenting, advising and enforcing the
Obligations and the Guaranty Obligations (which shall be understood to include,
without limitation, subsequent to the Initial Closing Date, the Agents' and
Issuing Bank's standard fees and their standard allocated fees and expenses of
internal counsel relating to any and all modifications, waivers, releases,
amendments or additional collateral with respect to this Agreement, the
Collateral and/or the Obligations and the Guaranty Obligations), fees and taxes
relative to the filing of financing statements, all expenses, costs and fees set
forth in Paragraph 9.5 of Section 9 of this Agreement, and title insurance
premiums, real estate survey costs, costs of preparing, recording
mortgages/deeds of trust against the Real Estate, and, in connection with the
monitoring and enforcing of the Junior Lien Financing Documents, the travel,
lodging and similar expenses of the Junior Lien Lender's personnel and the
reasonable fees and expenses of counsel for the Junior Lien Lender.
Overadvance Rate shall mean a rate equal to one-half of one percent
(1/2%) per annum in excess of the applicable contract rate of interest
determined in accordance with Paragraph 9.1(a) of Section 9 of this Agreement.
24
Overadvances shall mean the amount by which (a) the sum of all
outstanding Revolving Loans, Letters of Credit and advances made hereunder
exceed (b) the Borrowing Base.
Participating Customer shall mean each of Visteon Corporation and
American Axle & Manufacturing, Inc. in Albion, Michigan and each other customer
of a Borrower which enters into a Participating Customer Agreement.
Participating Customer Agreement shall mean each of the
Visteon/American Axle Participating Customer Agreement and each other agreement
as to some or all of the matters set forth in Exhibit G attached hereto and/or
such other matters as the Lenders and the Junior Lien Lender approve, which may,
with the prior written consent of the Lenders and the Junior Lien Lender, be
entered into by any Borrower with any of its customers.
Patents shall mean as to any Obligor, such Obligor's present and
hereafter acquired patents, patent applications, patent registrations, any
reissues or renewals thereof, any inventions and improvements claimed
thereunder, patent licenses, and all patent rights with respect thereto and all
income, royalties, cash and non-cash proceeds thereof.
PBGC shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor thereto.
Permitted Asset Transfer shall mean any sale, lease, license,
assignment, transfer or other disposition of assets of any of the Obligors that
is any of the following:
(i) a sale of Inventory in the ordinary course of business;
(ii) a license of intellectual property in the ordinary course of
business;
(iii) a sale, exchange or other disposition of obsolete or surplus
Equipment in the ordinary course of business; and
(iv) a sale expressly provided for in any Participating Customer
Agreement as in effect on the date of such agreement, provided
the sale is consummated against receipt of the required payment;
provided that the aggregate Net Cash Proceeds to any Obligor of such sale,
exchange, license or other disposition of assets, are paid upon consummation of
the sale, exchange, license or disposition to the Administrative Agent for
application to repayment of the Revolving Loans or the Pre-Petition Term Loans
or, if applicable, as otherwise required by Section 7 of this Agreement.
Permitted Encumbrances shall (A) in relation to Trim Trends, have the
meaning given to the term in the Pre-Petition Credit Agreement and (B) in
relation to any Borrower, (i) with respect to obligations outstanding prior to
the Filing Date, have the meaning given to the term in the Pre-Petition Credit
Agreement, and (ii) with respect to obligations arising on or after the Filing
Date, mean:
25
(a) security deposits for utility services and security deposits for
vendors (not to exceed $1,500,000 in the aggregate);
(b) liens granted to customers under access and security agreements
which have received the prior written consent of the Agents and the Lenders;
(c) liens granted to the Administrative Agent by the Obligors or any of
them to secure the Obligations and/or the Guaranty Obligations arising under
this Agreement or the Loan Documents;
(d) statutory liens of landlords and liens of carriers, warehousemen,
bailees, mechanics, materialmen and other like liens imposed by law, except for
liens imposed by any Environmental Laws, created in the ordinary course of
business and for amounts not yet due (or which are being contested in good
faith, by appropriate proceedings or other appropriate actions which are
sufficient to prevent imminent foreclosure of such liens) and with respect to
which adequate reserves or other appropriate provisions are being maintained by
each of the Obligors, as applicable, in accordance with GAAP; and
(e) Tax liens which are not yet due and payable or which are being
diligently contested in good faith by the Obligors by appropriate proceedings,
or which are due and not paid as a result of the filing of the Cases, and which
liens are not (x) filed on any public records, (y) other than with respect to
Real Estate, senior to the liens of the Administrative Agent; or (z) for Taxes
due the United States or Canada or any state or province thereof having similar
priority statutes, as further set forth in Paragraph 7.8 hereof; and
(f) liens granted pursuant to any Access and Security Agreement, as in
effect on the date of such agreement.
There shall be no Permitted Encumbrances in relation to the Inactive Guarantor.
Permitted Indebtedness shall exclude all Indebtedness in respect of
Hedging Agreements but otherwise shall mean: (a) current Indebtedness maturing
in less than one year and incurred in the ordinary course of business for raw
materials, supplies, equipment, services, Taxes or labor; (b) Indebtedness
arising under the Letters of Credit and this Agreement; (c) the Pre-Petition
Obligations; (d) the Junior Secured Obligations; (e) deferred Taxes and other
expenses incurred in the ordinary course of business; (f) other Indebtedness
existing on the date of execution of this Agreement and listed in the most
recent financial statements and the Budget delivered to the Agents, the Issuing
Bank and the Lenders or otherwise disclosed to the Agents, the Issuing Bank and
the Lenders in writing prior to the Final Closing Date; (g) Indebtedness between
or among the Obligors (provided that any instruments evidencing such
Indebtedness are Pledged Notes); and (h) Indebtedness under a Participating
Customer Agreement as in effect on the date of such agreement.
Permitted Liquidation shall mean, in relation to any Obligor, its
dissolution or liquidation at or after the transfer of all its remaining assets
in an Intercompany Transfer or otherwise as agreed upon in writing in advance by
the Agents and Required Revolving Facility Lenders.
26
Person shall mean an individual, corporation, limited liability
company, partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.
Plan shall mean any Single Employer Plan or Multiemployer Plan.
Plan Liability shall mean any liabilities relating to or in respect of
any Plan.
Plan of Reorganization shall mean a Plan of Reorganization filed in the
Cases.
Pledged Notes shall mean all promissory notes now or hereafter owned by
any of the Obligors.
Pledged Stock shall mean any and all of the capital stock (other than
Excluded Stock) of all subsidiaries of the Borrowers and the Guarantors now or
hereafter held by any of the Borrowers or the Guarantors.
Pottstown shall mean Pottstown Precision Casting, Inc.
PPSA shall mean the Personal Property Security Act (Ontario) as in
effect from time to time.
Pre-Petition Agents means the "Administrative Agent", the "Collateral
Agent" and the "Syndication Agent" as defined in the Pre-Petition Credit
Agreement.
Pre-Petition Borrowers means the Borrowers, ▇▇▇▇▇▇▇-▇▇▇▇▇▇, Inc.,
▇▇▇▇▇▇▇-▇▇▇▇▇▇ Greeneville, Inc., Pottstown Precision Casting, Inc., Harvard
Industries Risk Management, Inc., ▇▇▇▇▇▇▇-▇▇▇▇▇▇ Toledo, Inc., ▇▇▇▇▇▇
Automotive, Inc. and KWCI Liquidating Corporation.
Pre-Petition Collateral means the "Collateral" as defined in the
Pre-Petition Credit Agreement.
Pre-Petition Credit Agreement shall have the meaning specified in the
recitals hereto.
Pre-Petition L/C Obligations shall have the meaning specified in the
recitals hereto.
Pre-Petition Lenders means the "Lenders" as defined in the Pre-Petition
Credit Agreement.
Pre-Petition Agreements shall have the meaning specified in the
recitals hereto.
Pre-Petition Obligations shall have the meaning specified in the
recitals hereto.
Pre-Petition Revolving Loan shall have the meaning specified in the
recitals hereto.
Pre-Petition Security Documents shall mean the Security Documents
referred to in the Pre-Petition Credit Agreement.
Pre-Petition Term Loans shall have the meaning specified in the
recitals hereto.
27
Pre-Petition Term Loan A means the "Term Loan A" as defined in the
Pre-Petition Credit Agreement.
Pre-Petition Term Loan B means the "Term Loan B" as defined in the
Pre-Petition Credit Agreement.
Prohibited Transaction shall mean any transaction set forth in Section
406 of ERISA or Section 4975 of the Code for which there is no applicable
statutory, regulatory or administrative exemption (including a class exemption
or an individual exemption).
Promissory Note shall mean the note, in the form of Exhibit A attached
hereto, delivered by the Borrowers to the Administrative Agent to evidence the
loans made under the Revolving Credit Facility pursuant to, and repayable in
accordance with this Agreement.
Real Estate shall mean each of the Obligors' fee and/or leasehold
interests in the real property, including any such real property which has been,
or will be, encumbered, mortgaged, pledged or assigned to the Administrative
Agent or its designee.
Register shall have the meaning specified in Paragraph 13.14(d) of
Section 13 hereof.
Reimbursement Agreement shall have the meaning set forth in Paragraph
4.3 of Section 4 of this Agreement.
Reimbursement Obligations shall mean at any time the aggregate of the
liabilities of each of the L/C Eligible Account Parties to reimburse the Issuing
Bank pursuant to Section 4 for amounts that at or before that time have been
drawn under Letters of Credit (from the date of the drawing, regardless of
whether any notice remains to be given or any period remains to lapse before
such reimbursement is due).
Reorganization shall mean, with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
Reportable Event shall mean any of the events set forth in Section
4043(c) of ERISA other than those events for which the notice requirement has
been waived under applicable regulations.
Required Lenders shall mean, in relation to any matter, the Lenders
and, if applicable, other Persons whose consent or approval is required under
Paragraph 13.17 in relation to such matters.
Required Revolving Facility Lenders shall mean, at any time, the
Revolving Facility Lenders whose aggregate Revolving Credit Commitments and
outstanding Revolving Loans and L/C Participations at the time total more than
fifty percent (50%) of the Revolving Credit Commitments and outstanding
Revolving Loans and L/C Participations at the time.
Requirements of Law shall mean, as to any Person, the certificate of
incorporation or by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule
28
or regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
Revolving Credit Availability shall mean the available credit under the
Revolving Credit Facility which will be subject to the Borrowing Base and such
Availability Reserves as the Agents in their sole discretion deem appropriate;
provided, however, that the Revolving Credit Availability shall not be an amount
less than zero.
Revolving Credit Commitment shall have the meaning set forth in the
definition of "Commitment" herein.
Revolving Credit Percentage shall mean, as to any Revolving Facility
Lender at any time, the percentage which such Lender's Revolving Credit
Commitment then constitutes of the aggregate Revolving Credit Commitments (or,
at any time after the Revolving Credit Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such Lender's
Revolving Loans then outstanding constitutes of the aggregate principal amount
of the Revolving Loans then outstanding).
Revolving Credit Facility shall mean the aggregate commitment of the
Revolving Facility Lenders to make loans and advances to the Borrowers pursuant
to Section 3 of this Agreement and to acquire L/C Participations pursuant to
Section 4 hereof, in the aggregate amount of up to $35,000,000.00 outstanding at
any time (subject, except for purposes of the calculation of the Commitment Fee
and the DIP Facility Fee, to the Revolving Credit Availability during the period
from the Initial Closing Date through (but excluding) the Termination Date).
Revolving Facility Lender shall mean each Lender with a Revolving
Credit Commitment or an outstanding Revolving Loan.
Revolving Loan Account(s) shall mean the account or accounts on the
Administrative Agent's books, in each Borrower's name (or the names of the
Borrowers collectively) in which each Borrower will be charged with all
applicable Obligations under this Agreement.
Revolving Loans shall mean the loans and advances made, from time to
time, to or for the account of the Borrowers by the Administrative Agent on
behalf of the Lenders pursuant to Section 3 of this Agreement and, subject to
Paragraph 4.5 of Section 4 of this Agreement, the Reimbursement Obligations that
become Revolving Loans from time to time hereunder pursuant to Paragraph 4.6 of
Section 4 of this Agreement and all other Obligations that arise hereunder or
under any other Loan Document that are charged from time to time to the
Revolving Loan Account(s), as authorized herein or therein.
Secured Transaction Laws shall mean the Uniform Commercial Code as the
same may be amended and in effect from time to time in the State of New York,
and the Personal Property Security Act (Ontario), the expression Secured
Transaction Laws meaning each and every of these personal security statutes.
29
Settlement Date shall mean the date, weekly (and more frequently, at
the discretion of the Administrative Agent, upon the occurrence of an Event of
Default or a continuing decline or increase of the Revolving Loans) on which the
Administrative Agent and the Lenders shall settle amongst themselves so that (x)
the Administrative Agent shall not have, as the Administrative Agent, any money
at risk and (y) on such Settlement Date the Lenders shall each have a pro rata
amount (proportionate to their respective Commitments) of all outstanding
Revolving Loans made (or deemed made) for the Lenders by the Administrative
Agent provided that each Settlement Date for a Lender shall be a Business Day on
which such Lender and its bank are open for business.
Single Employer Plan shall mean a "single-employer plan", as defined in
Section 4001(a)(15) of ERISA, which any Borrower or ERISA Affiliate maintains,
administers, contributes to or is required to contribute to, or under which any
Borrower or ERISA Affiliate has any liability.
Stock Purchase Agreement shall mean the Stock Purchase Agreement
delivered by Harvard under the Junior Lien Financing Documents.
Supplemental Availability shall mean (i) during February 2002,
$1,500,000 and (ii) thereafter, $2,000,000.
Super-Priority Claim shall mean a perfected first priority claim
pursuant to Section 364(c)(1) of the Bankruptcy Code.
Taxes shall mean all federal, state, provincial, municipal and other
governmental taxes, levies, charges, claims and assessments which are or may be
due from the Borrowers or the Guarantors (as applicable) with respect to their
business, operations, Collateral or otherwise.
Termination Date shall be, and all Obligations of the Borrowers to the
Agents, the Issuing Bank and the Lenders will become due and payable, without
notice or demand, upon the earliest to occur of the following: (a) thirty (30)
Business Days after the Interim Order is entered, unless the Bankruptcy Court
enters a Final Order that, among other things, approves the Interim Order,
including the repayment of the Pre-Petition Revolving Loans as provided in this
Agreement, prior to such time; (b) June 30, 2002; (c) the date this Agreement is
otherwise terminated for any reason whatsoever pursuant to the terms herein; (d)
the effective date of any plan of reorganization for any of the Borrowers in the
Cases; or (e) May 31, 2002, unless the requirements of the Trim Trends Sale are
fulfilled as and when required in the definition of that term.
Tooling shall mean all tooling, fixtures, gauges, jigs, patterns,
casting patterns, dyes, cavities, moulds and documentation together with any
accessions, attachments, parts, accessories, substitutions, replacements and
appurtenances to any of the foregoing, but excluding machinery, Equipment and
Equipment spare parts.
Trade Accounts Receivable shall mean, with respect to an Obligor, that
portion of such Obligor's Accounts which arises from the sale of Inventory or
the rendition of services in the ordinary course of such Obligor's business.
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Trademarks shall mean, as to any Obligor, all of such Obligor's present
and hereafter acquired trademarks, trademark registrations, trademark
applications, tradenames, trade styles, service marks, prints and labels (on
which any of the foregoing may appear), reissues and renewals of the foregoing,
trademark licenses, internet domain names and URLs and any trademark rights of
the Obligors pertaining to any of the foregoing, together with the goodwill
associated therewith, and all of the Obligors' cash and non-cash proceeds
thereof.
Trim Trends shall mean Trim Trends Canada Limited (or any successor).
Trim Trends Division shall mean the Trim Trends division of
▇▇▇▇▇-Albion.
Trim Trends Sale shall refer to the following events: (i) the filing,
by the Obligors, of a motion with the Bankruptcy Court pursuant to Section 363
of the Bankruptcy Code (the "Section 363 Motion") seeking the approval of a sale
of the Trim Trends Division and Trim Trends, pursuant to Section 363 of the
Bankruptcy Code subject to higher and better offers, by March 31, 2002, and (ii)
the Borrowers, effecting a closing of such sale within forty-five (45) days of
the entry of the order approving the Section 363 Motion.
UCC shall mean the Uniform Commercial Code as the same may be amended
and in effect from time to time in the State of New York.
Unfunded Pension Liabilities shall mean, with respect to any Single
Employer Plan, any amount by which the present value of the aggregate benefit
liabilities under the Plan (whether or not vested), determined as of the date of
such Plan's most recent actuarial report on the basis of the actuarial
assumptions specified for funding purposes in such report, exceeds the aggregate
current value of the assets of such Plan allocable to such benefit liabilities
as specified in such report. For purposes of this definition of "Unfunded
Pension Liabilities," the term "benefit liabilities" has the meaning specified
in Section 4001 of ERISA and the terms "current value" and "present value" have
the meaning specified in ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇ shall mean the United States of America.
United States Trustees Fees shall mean the statutory unpaid fees of the
United States Trustee in the Cases.
U.S. dollar or $ shall mean lawful currency of the United States.
Visteon/American Axle Participating Customer Agreement shall mean the
Accommodation Agreement, dated as of February 4, 2002, executed and delivered on
or before the First Amendment Date, in the form attached as Schedule 11 hereto,
among Visteon Corporation, American Axle & Manufacturing, Inc., ▇▇▇▇▇-Albion,
the Administrative Agent, the Lenders, the Issuing Bank and the Junior Lien
Lender.
Voluntary Overadvances shall mean the Revolving Loans (if any) that
constitute Overadvances at the time they are made and shall exclude
Nonconsensual Overadvances.
Withdrawal Liability shall have the meaning set forth under Part I of
Subtitle E of Title IV of ERISA.
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Working Capital shall mean Current Assets in excess of Current
Liabilities.
1.2 Construction of Certain Terms. (a) As used in this Agreement, (i)
the words "hereof," "herein" and "hereunder" and words of similar import refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Paragraph, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified; (ii) the words "include," "includes" and
"including" shall be deemed to be followed by the phrase "without limitation,"
(iii) the word "or" shall not be exclusive, (iv) the word "will" shall be
construed to have the same meaning and effect as the word "shall" and (v) the
plural form of any term defined in the singular in this Agreement shall merely
express the grammatical plural of that defined term unless otherwise expressly
provided herein.
(b) Unless the context requires otherwise (i) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to that agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(ii) any reference herein to any Person shall be construed to include that
Person's successors and assigns (without prejudice to any restrictions on
transfer or other consequences of a transfer contemplated herein), (iii) the
words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights, (iv) as
applied to any transaction or action by any Borrower, the expression "ordinary
course of business" shall be understood to have the same meaning it would have
had if the transaction or action had occurred before the Filing Date, and (v)
any reference to documents that are ancillary to this Agreement will include the
Access and Security Agreements and the Participating Customer Agreements, any
letter of credit delivered thereunder and any instrument or document delivered
in connection with any such letter of credit.
1.3 GAAP Terminology. (a) As used herein, and in the other Loan
Documents, accounting terms relating to any Obligor or any of its subsidiaries
that are not defined in Paragraph 1.1 of Section 1 and accounting terms that are
partly defined in Paragraph 1.1 of Section 1, to the extent not defined, shall
have the respective meanings given to them under GAAP, except as otherwise
provided in such Loan Document. All financial statements that any Obligor is
required to deliver hereunder shall be prepared in accordance with GAAP applied
on a consistent basis, except as otherwise expressly prescribed herein, subject
to the following paragraph and except that any financial statements which are
not audited shall not be required to have footnotes.
(b) If GAAP changes while any of the Obligations or Guaranty
Obligations remains outstanding or any Lender or the Issuing Bank has any
further commitment to make a Loan or issue a Letter of Credit hereunder and, as
a result, the financial covenants set forth in subparagraphs (h) and (i) of
Paragraph 8.2 of Section 8 would be calculated in a manner or with components
different from those applicable prior to the change, (i) the Obligors and the
Lenders will enter into good faith negotiations to amend this Agreement in such
respects as are necessary to conform those financial covenants as criteria for
evaluating the Obligors' financial condition to substantially the same criteria
as were effective prior to the relevant change in GAAP and (ii) the Obligors
shall be deemed to be in compliance with those financial covenants during the
32
period of 30 days beginning with the effective date of that change in GAAP if
and to the extent that the Obligors would have been in compliance therewith
under GAAP if the change had not occurred and compliance were tested applying
GAAP as in effect immediately before the change. At the end of that period of 30
days, if an amendment of the kind described above has not been executed by all
parties to this Agreement, GAAP as modified by the relevant change shall
automatically be taken into account in determining whether the Obligors are in
compliance with those financial covenants.
(c) Any reference in this Agreement or other Loan Documents to
"consolidating" balance sheets or other financial statements or to
"consolidating" Borrowing Base computations shall mean such balance sheets,
financial statements or Borrowing Base computations (in a format submitted to
and accepted by the Lenders) showing consolidating entries only for the major
entities listed below, some of which consist of multiple entities (and such
other entities as may become successors or transferees of any of the business
owned or operated on the date of this Agreement by any entity listed below (if
such business would be consolidated in accordance with GAAP) and any other
direct or indirect subsidiary of Harvard, if consolidating balance sheets or
other financial statements are hereafter prepared by any such other subsidiary):
▇▇▇▇▇-Albion (excluding Trim Trends)
Harvard Transportation Corporation
Trim Trends
Harvard Electronics
Pottstown
Harvard Corporate/Other
1.4 No Presumption in Construction. Neither this Agreement nor any
other Loan Document nor any uncertainty or ambiguity herein or therein shall be
construed or resolved against any Lender, any Agent, or the Issuing Bank under
any rule of construction or otherwise merely by virtue of being a party involved
in its drafting. On the contrary, this Agreement and the other Loan Documents
have been reviewed by each of the parties and their counsel and shall be
construed and interpreted according to the ordinary meaning of the words used so
as to fairly accomplish the purposes and intentions of the parties.
1.5 Independence of Provisions. All agreements and covenants herein and
in the other Loan Documents shall be given independent effect so that, if a
particular action or condition is prohibited by the terms of any such agreement
or covenant, the fact that such action or condition would be permitted within
the limitations of another agreement or covenant shall not be construed as
allowing such action to be taken or condition to exist.
1.6 Inactive Guarantor. Notwithstanding anything else to the contrary
elsewhere in this Agreement (including the definitions of the term "Permitted
Asset Transfer" and "Intercompany Transfer") none of the terms of this Agreement
or any other Loan Documents shall be interpreted to permit, or constitute the
consent by the Agents, the Issuing Bank or the Lenders to any transaction or
action by the Inactive Guarantor (other than those incidental to maintaining its
existence and compliance with the Loan Documents or its liquidation or
dissolution) or by any other Obligor with the Inactive Guarantor.
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SECTION 2. CONDITIONS PRECEDENT
2.1 Conditions Precedent to Initial Loans on the Initial Closing Date.
The obligation of the Administrative Agent, on behalf of the Lenders, and the
Lenders to make the initial Loans to be made by them hereunder are subject to
the satisfaction of, extension of or waiver in writing of, on or prior to, the
Initial Closing Date, the following conditions precedent:
(a) Interim Order. The Administrative Agent shall have received a copy
of an order of the Bankruptcy Court in substantially the form of Exhibit B (the
"Interim Order") and the Interim Order shall be in full force and effect and
shall not have been vacated, reversed, modified or amended and there shall be no
stay of the performance of any obligation of any of the Obligors. The parties
hereto acknowledge that the foregoing shall not preclude the entry of any order
of the Bankruptcy Court approving or authorizing an amendment or modification of
this Agreement or any other Loan Document or the Interim Order, which amendment
or modification shall be acceptable to the Lenders whose consent would be
required pursuant to Section 13.17 to waive the default created by such
amendment or modification.
(b) Satisfactory Proceedings. All proceedings taken in connection with
the execution of this Agreement, the making of the Loans, and the execution and
delivery of all other Loan Documents and all documents and papers relating
thereto shall be satisfactory to the Administrative Agent and its counsel. The
Administrative Agent and its counsel shall have received copies of such
documents and papers as the Administrative Agent or its counsel may reasonably
request in connection therewith, all in form and substance satisfactory to the
Administrative Agent and its counsel.
(c) Loan Documents; Additional Documents. On or before the Initial
Closing Date, the Obligors shall have delivered to the Lenders (or to the
Administrative Agent for the Lenders with sufficient originally executed copies,
where appropriate, for each Lender and counsel to the Administrative Agent) duly
executed copies of this Agreement or counterparts hereof and all the other Loan
Documents and such other documents, instruments, certificates, opinions and the
following with respect to such Obligor, each, unless otherwise noted, dated the
Initial Closing Date.
(d) Secretary's Certificate. The Administrative Agent shall have
received a certificate of the Secretary or Assistant Secretary of each Obligor
(each, a "Secretary's Certificate") dated as of the Initial Closing Date (except
that the items required in subparagraph (i) below may be delivered on or before
the Final Closing Date), substantially in the form of Exhibit C hereto, which
certificate shall include:
(i) certified copies of each such Person's respective Certificate
or Articles of Incorporation or Certificate of Formation or foreign
equivalent, which shall be certified and be accompanied by a good
standing certificate (in long form if available from such jurisdiction)
or foreign equivalent, if any, from the jurisdiction of its
organization and good standing certificates, from the jurisdiction in
which it is incorporated and from the jurisdiction in which it has its
principal place of business (other than a good standing certificate in
respect of Harvard from the state of Delaware), each to be dated a
recent date prior to the Final Closing Date;
34
(ii) copies of the respective By-Laws or operating agreement or
foreign equivalent of such Person;
(iii) resolutions of the Board of Directors or Board of Managers
of such Person, as the case may be, approving and authorizing the
execution, delivery, and performance of the Loan Documents to which it
is a party, certified as of the Initial Closing Date by the corporate
secretary or assistant secretary of such Person as being in full force
and effect without modification or amendment; and
(iv) signature and incumbency certificates of officers of such
Person executing the Loan Documents to which it is a party.
(e) Officer's Certificate. The Administrative Agent shall have received
a certificate of each of the Obligors, executed by an Authorized Officer in each
case, satisfactory in form and substance to the Agents (each, an "Officer's
Certificate"), dated as of the Initial Closing Date, substantially in the form
of Exhibit D hereto, certifying that (i) the representations and warranties of
such Obligor contained herein and in the other Loan Documents to which such
Obligor is a party are true and correct in all material respects on and as of
the Initial Closing Date; (ii) such Obligor is in compliance with all of the
terms and provisions set forth herein and in the other Loan Documents to which
such Obligor is a party; and (iii) no Default or Event of Default has occurred.
(f) Budget. On or before the Initial Closing Date, the Lenders shall
have received the Budget, executed by an Authorized Officer of Harvard.
(g) Absence of Default; No Material Adverse Change. No Default or Event
of Default shall have occurred and be continuing and no Material Adverse Change
shall have occurred and the making of the Loans (or the issuance of any Letter
of Credit) shall not violate any requirement of law and shall not be enjoined
temporarily, preliminarily or permanently.
(h) Legal Restraints/Litigation. Other than the Cases, as of the
Initial Closing Date, there shall be no: (x) litigation, investigation or
proceeding (judicial or administrative) pending or threatened against the
Obligors, or any one of them, or their assets, by any agency, division or
department of any county, city, state, provincial or federal government arising
out of this Agreement or any of the other Loan Documents; (y) injunction, writ
or restraining order restraining or prohibiting the financing arrangements
contemplated under this Agreement and the other Loan Documents; or (z) suit,
action, investigation or proceeding (judicial or administrative) pending against
the Obligors, or any one of them, or their assets, which, in the opinion of the
Required Revolving Facility Lenders (i) could reasonably be expected to result
in a Material Adverse Change or, except as set forth in Schedule 1 hereto, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect, or (ii) restrains, prevents or imposes or can reasonably be expected to
impose materially adverse conditions upon the Loans or the transactions
contemplated under this Agreement.
(i) Financials; Projections. The Lenders shall have received and the
Required Revolving Facility Lenders shall be satisfied with (i) the Budget and
(ii) the Obligors' business plan, which shall include a financial forecast,
including, without limitation, cash projections and
35
projections of Revolving Credit Availability, in a format previously submitted
to and accepted by the Lenders and in substance reasonably satisfactory to the
Required Revolving Facility Lenders, on a monthly basis through the Termination
Date.
(j) Disbursement Authorization. The Borrowers shall have delivered to
the Administrative Agent all information necessary for the Administrative Agent
and the Lenders to issue wire transfer instructions on behalf of each of the
Borrowers for the initial and subsequent loans and/or advances to be made under
this Agreement including, but not limited to, disbursement authorizations in
form acceptable to the Agents.
(k) Casualty Insurance. Each of the Obligors shall have delivered to
the Administrative Agent evidence satisfactory to the Required Revolving
Facility Lenders that casualty insurance policies listing the Administrative
Agent as an additional insured, loss payee or mortgagee, as the case may be, are
in full force and effect, all as set forth in Paragraph 8.2(c) of Section 8 of
this Agreement (and the certificates evidencing such insurance shall be issued
on form Accord 27).
(l) Schedules. Each Obligor or its counsel shall have provided the
Administrative Agent with updated schedules of: (i) all of such Obligor's and
its subsidiaries' (A) Trademarks, (B) Patents, and (C) Copyrights, as
applicable, and all in such detail as to provide appropriate recording
information with respect thereto, (ii) any tradenames, (iii) monthly rental
payments for any leased premises or any other premises where any Collateral may
be stored or processed, (iv) all insurance policies of any nature maintained by
an Obligor, (v) all joint ventures or partnerships engaged in by an Obligor with
any other Person, and (vi) existing Indebtedness and Permitted Encumbrances, as
well as all other schedules required by this Agreement or any of the other Loan
Documents, all of the foregoing in form and substance satisfactory to the
Required Revolving Facility Lenders; provided, however, that if certain
schedules as described above are substantially similar to those schedules
delivered by the Borrowers to the Administrative Agent in connection with the
Pre-Petition Credit Agreement, Harvard shall provide to the Administrative
Agent, a certificate executed by an Authorized Officer, in form and substance
satisfactory to the Agents and the Lenders, certifying that such schedule(s) are
reaffirmed as of such date.
(m) Consents; Requirements of Law. All necessary governmental and third
party consents and approvals necessary in connection with this Agreement and the
transactions contemplated hereby shall have been obtained (without the
imposition of any conditions that are not reasonably acceptable to the Required
Revolving Facility Lenders) including without limitation, the Orders of the
Bankruptcy Court, and shall remain in effect, unless the failure to obtain and
keep in effect any such third-party consent and approval has been disclosed to
the Agents and, other than the Plan Liability, such failure could not reasonably
be expected to result in a Material Adverse Change; and all applicable
governmental filings shall have been made and all applicable waiting periods
shall have expired without in either case any action being taken by any
competent authority. There shall not exist any law or regulation in the judgment
of the Lenders that restrains, prevents or imposes materially adverse conditions
upon this Agreement or the transactions contemplated hereby other than the entry
by the Bankruptcy Court of the Interim Order or the Final Order, as applicable.
36
(n) Fees; Expenses. All fees and expenses (including, without
limitation, reasonable fees and expenses of counsel) required to be paid to the
Agents, the Issuing Bank and the Lenders on or before the Initial Closing Date
shall have been paid.
(o) Access and Security Agreements; Transition Agreement. The Agents
and the Lenders shall have received a certification from the chief executive
officer of Harvard that the Obligors are not in violation of any terms of the
Access and Security Agreements (other than a default attributable solely to the
Pre-Petition Lenders' having ceased to provide financing under the Pre-Petition
Credit Agreement) or Transition Agreement as well as certified copies of
amendments to each such agreement satisfactory to the Required Revolving
Facility Lenders, reflecting the security interests provided under the Loan
Documents to the Administrative Agent.
(p) Canadian Collateral Account. The Administrative Agent and the
Required Revolving Facility Lenders shall be satisfied with all matters relating
to arrangements for payment of Accounts due from time to time to Trim Trends,
and any other active Obligor organized in Canada, directly to an account of Trim
Trends established and maintained with Canadian Imperial Bank of Commerce (the
"Canadian Deposit Account"), with acknowledgment by that depositary of the
security interest granted by the relevant Guarantor to the Administrative Agent
for the benefit of the Lenders, the Agents and the Issuing Bank (including
waiver by that depositary of any right of setoff that it might otherwise have in
respect of that account).
(q) Cash Collateral Account. The Lenders shall be satisfied with all
arrangements relating to the establishment of an account subject to the lien
created by this Agreement and the control of the Administrative Agent, with a
depository institution satisfactory to the Lenders, established for amounts that
the Borrowers may be required to maintain as Cash Collateral pursuant to this
Agreement (the "Cash Collateral Account").
(r) Junior Lien Lender Consent. The Administrative Agent shall have
received not later than the date of entry of the Interim Order, a consent of the
Junior Lien Lender to the terms of this Agreement and matters relating thereto
which are relevant to the Intercreditor Agreement, in form and substance
satisfactory to the Agents, the Issuing Bank and the Lenders.
Upon the execution of this Agreement and the initial disbursement of Loans and
issuance of Letters of Credit, all of the above Conditions Precedent shall have
been deemed satisfied or waived as set forth above in the introductory paragraph
of Paragraph 2.1 of this Section 2 or as the Obligors and the Administrative
Agent shall otherwise agree in writing.
2.2 Conditions to Each Extension of Credit. Subject to the terms of
this Agreement, the agreement of the Administrative Agent on behalf of the
Lenders, the Agents and the Issuing Bank to make any extension of credit
requested to be made by it to any of the Borrowers on any date (including
without limitation, the initial extension of credit hereunder, unless otherwise
specified below in this Paragraph), is subject to the satisfaction of the
following conditions precedent:
(a) Representations and Warranties. After giving effect to the
extension of credit requested to be made on such date, each of the
representations and warranties made by each of the Obligors in or pursuant to
this Agreement or any other Loan Document shall be true and
37
correct in all material respects on and as of such date as if made on and as of
such date except those which are expressly made only as of the Initial Closing
Date and, insofar as the representations and warranties relate to Participating
Customer Agreements, Access and Security Agreements, Permitted Indebtedness and
Permitted Encumbrances, only as to such agreements, indebtedness and Liens which
qualify as Participating Customer Agreements, Access and Security Agreements,
Permitted Indebtedness and Permitted Encumbrances, respectively, on the relevant
date, and if the Administrative Agent or the Lenders shall so request, the
Obligors shall deliver to the Administrative Agent a certificate to that effect.
(b) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the extension of credit
requested to be made on such date.
(c) Interim Order. At any time prior to the entry of the Final Order,
the Interim Order shall be in full force and effect and shall not have been
stayed, revised, modified or amended in any respect except for such
modifications and amendments agreed to by the Administrative Agent.
(d) Final Order. A Final Order approving the financing contemplated in
this Agreement (the "Final Order"), shall have been entered by the Bankruptcy
Court within thirty (30) days of the commencement of the Cases. On the date of
the funding of any Loan at any time after that day, other than any Loan funded
prior to the date the Final Order is issued, the Final Order shall be in full
force and effect and shall not have been revised, stayed, modified or amended
except for such modifications and amendments agreed to by the Administrative
Agent. Unless the Administrative Agent shall have joined in or expressly
consented in writing to the same, there shall be no motion pending: (i) to
revise, modify or amend the Final Order or (ii) to permit any administrative
expense or unsecured claim against any Borrower existing or hereafter arising,
of any kind or nature whatsoever, to have administrative priority as to such
Borrower equal or superior to the priority of the lien and security interest
granted herein to the Administrative Agent for the benefit of the Agents, the
Issuing Bank and the Lenders in respect of the Obligations, except for the
Carve-Out and the United States Trustees Fees, or (iii) to grant or permit the
grant of a lien on any property or assets of the Borrowers.
(e) No Material Adverse Change. No Material Adverse Change shall have
occurred as of such date or after giving effect to the extension of credit
requested to be made on such date.
(f) Requirements of Law. The extension of credit requested to be made
on such date shall not violate any Requirement of Law and no Requirement of Law
shall be applicable in the judgment of the Lenders, in each case that restrains,
prevents, enjoins or imposes materially adverse conditions upon the transactions
contemplated by the Loan Documents or the rights of the Obligors or any of their
subsidiaries freely to transfer or otherwise dispose of, or to create any lien
on, any properties now owned or hereafter acquired by any of them.
(g) Pleadings. The Administrative Agent shall have received copies of
all pleadings, motions and other documents filed on behalf of all Obligors with
the Bankruptcy Court, and all proceedings taken in connection with the execution
and delivery of this Agreement and the other
38
Loan Documents and the making of the Loans, shall be in form and substance
satisfactory to the Agent and the Lenders.
(h) Officer's Certificate. With respect to the first Loan made on or
after the First Amendment Date, the Administrative Agent shall have received a
certificate of each of the Obligors, executed by an Authorized Officer in each
case, satisfactory in form and substance to the Agents (each, an "Officer's
Certificate"), dated as of the First Amendment Date, substantially in the form
of Exhibit D hereto, certifying that (i) the representations and warranties of
such Obligor contained herein and in the other Loan Documents to which such
Obligor is a party are true and correct in all material respects on and as of
the First Amendment Date; (ii) such Obligor is in compliance with all of the
terms and provisions set forth herein and in the other Loan Documents to which
such Obligor is a party; and (iii) no Default or Event of Default has occurred.
(i) Opinion. With respect to any Loans to be made on or after the date
of entry of the Final Order, the Administrative Agent shall have received an
opinion of legal counsel to the Guarantors in form and substance satisfactory to
the Administrative Agent and the Lenders.
(j) Covenants. With respect to any Loans to be made on or after the
date of entry of the Final Order, the Obligors, the Agents, the Issuing Bank,
the Lenders and the Junior Lien Lender shall have agreed to the terms of an
amendment or amendments to this Agreement providing for (i) reporting to the
Administrative Agent of the information that will enable it and the Lenders to
monitor whether the operations of the ▇▇▇▇▇-Albion facility in Albion, Michigan
and in Rock Valley, Iowa are being conducted on a cash neutral basis, (ii) one
or more agreements (in addition to the Visteon/American Axle Participating
Customer Agreement) with customers of the type authorized by paragraph 18 of the
Interim Order to become Permitted Indebtedness and Permitted Encumbrances under
this Agreement and the other Loan Documents within a framework satisfactory to
the Agents, the Lenders and the Junior Lien Lender, (iii) the maintenance by
Trim Trends and the Trim Trends Division of EBITDA, on a consolidated basis, at
levels satisfactory to the Agents and the Lenders, and (iv) such related matters
as the Agents and the Lenders shall determine to be reasonable in the
circumstances.
(k) Other Matters. With respect to any Loans to be made after the
Initial Closing Date and before the date of entry of the Final Order, the
Lenders shall be satisfied as to the progress in the negotiation of the
amendments contemplated in the preceding subparagraph. In addition, with respect
to any Loans to be made on or after the First Amendment Date, the Lenders shall
have received either (i) confirmation that the Budget and projections delivered
pursuant to Paragraphs 2.1(f) and 2.1(i) of this Section 2 require no
modification in light of the arrangements contemplated in the Visteon/American
Axle Participating Customer Agreement and the prohibitions herein on use of
proceeds in Paragraph 8.2(r) of Section 8 or (ii) a modified Budget and modified
projections satisfying the requirements set forth in the definition of the term
"Budget" and in Paragraph 2.1(i), reflecting those factors, and the Required
Revolving Facility Lenders shall be satisfied with such confirmation and the
data supporting it or with such revised Budget and projections.
Each borrowing by the Borrowers hereunder shall constitute a representation and
warranty by the Borrowers to the Agents, the Lenders and the Issuing Bank as of
the date of such loan or advance
39
that each of the representations, warranties and covenants contained in this
Agreement and the other Loan Documents have been satisfied and are true and
correct, in all material respects, except those expressly made only as of the
Initial Closing Date and the Final Closing Date, as applicable, and except as
the Borrowers and the Agents and/or the Required Revolving Facility Lenders
shall otherwise agree herein or in a separate writing.
2.3 Conditions Relating to Issuance of Letters of Credit. The
obligation of the Issuing Bank to issue any Letter of Credit as contemplated in
Section 4 of this Agreement is subject to the satisfaction of each of conditions
precedent set forth above in this Section 2 (as if the related request for
issuance of the Letter of Credit were a request for a borrowing from the
Administrative Agent on behalf of the Revolving Facility Lenders) as well as
such additional conditions precedent as are set forth in Section 4 and any
related L/C Application or Reimbursement Agreement. For all purposes of this
Section 2, a renewal of a Letter of Credit shall be treated as the issuance of a
Letter of Credit.
SECTION 3. AMOUNT AND TERM OF LOANS
3.1 Revolving Loans. (a) Until the Termination Date, the Administrative
Agent and the Lenders, severally, agree, subject to the terms and conditions of
this Agreement, from time to time, and within the Revolving Credit Availability
(but subject to the provisions of this Agreement on Overadvances), to make loans
and advances to the Borrowers on a revolving basis (i.e. subject to the
limitations set forth herein, the Borrowers may borrow, repay and re-borrow
Revolving Loans). Such loans and advances to the Borrowers shall be joint and
several obligations of the Borrowers and shall be in amounts not to exceed the
Borrowing Base. Except as otherwise expressly provided in Paragraph 15.10 of
Section 15 hereof, Voluntary Overadvances shall be made by the Administrative
Agent only with the consent of all the Lenders, and in all cases, subject to any
additional terms that the Administrative Agent and/or the Lenders deem
necessary.
(b) Borrowing Requests and Procedures. (i) Whenever the Borrowers
desire the Administrative Agent, on behalf of the Lenders, to make a Revolving
Loan pursuant to this Section 3, Harvard shall give the Administrative Agent a
notice in writing specifically in the form of Exhibit E hereto (a "Notice of
Borrowing") or irrevocable telephonic notice confirmed promptly in writing,
specifying (A) the amount to be borrowed, and (B) the requested borrowing date
(which shall be a Business Day and shall be prior to the Termination Date). All
requests for Revolving Loans pursuant to this provision must be received by an
officer of the Administrative Agent no later than 1:00 P.M. New York time on any
borrowing date. The procedure for Revolving Loans to be made on a requested
borrowing date may be such other procedure as is mutually satisfactory to
Harvard and the Administrative Agent. The Administrative Agent shall make
Revolving Loans to the account designated by Harvard for such purpose.
(ii) Subject to Paragraph 15.10 hereof, should the Administrative
Agent, on behalf of the Revolving Facility Lenders, for any reason honor a
request for a Voluntary Overadvance, such Voluntary Overadvance shall be made by
the Administrative Agent only with the consent of all the Revolving Facility
Lenders and subject to any additional terms that the Administrative Agent and/or
the Revolving Facility Lenders deem necessary. Requests for Voluntary
40
Overadvances pursuant to this provision shall be made solely by Harvard and
shall be directed to the Administrative Agent.
(c) Funding Settlements. The Administrative Agent shall on any
Settlement Date, and upon notice given by the Administrative Agent no later than
2:00 P.M. New York time, request each Lender to make, and each Lender hereby
agrees to make, a Revolving Loan in an amount equal to such Lender's Revolving
Credit Commitment percentage (calculated with respect to the aggregate Revolving
Credit Commitments then outstanding) of the aggregate amount of the Revolving
Loans made by the Administrative Agent from the preceding Settlement Date to the
date of such notice. Each Lender's obligation to make the Revolving Loans
referred to in subsection (a) and to make the settlements pursuant to this
subsection (c) shall be absolute and unconditional and shall not be affected by
any circumstance, including without limitation (i) any set-off, counterclaim,
recoupment, defense or other right which any such Lender or any of the Borrowers
may have against the Administrative Agent, the other Borrowers, any other Lender
or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default or an Event of Default; (iii) any adverse change in the
condition (financial or otherwise) of the Borrowers or any one of them; (iv) any
breach of this Agreement or any other Loan Document by any of the Borrowers, any
Guarantor or any one of them or any other Lender; or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
Without limiting the liability and obligation of each Lender to make such
advances, the Borrowers authorize the Administrative Agent to charge the
Borrowers' Revolving Loan Account(s) with the Administrative Agent to the extent
amounts received from the Lenders are not sufficient to repay in full the amount
of any such deficiency.
(d) Revolving Loan Promissory Note. The Borrowers' Revolving Loan
Obligations hereunder, which are joint and several, shall be evidenced by
promissory notes in the form of Exhibit A attached hereto to be delivered by
each of the Borrowers.
(e) Repayment of Obligations. In order to repay all Pre-Petition
Obligations of the Borrowers under the Pre-Petition Agreements in respect of
principal of the Pre-Petition Revolving Loans together with interest accrued
thereon on the date the Bankruptcy Court enters the Final Order, the Borrowers
hereby agree to borrow from the Lenders as Revolving Loans hereunder (in
accordance with the respective Commitment shares of each Lender) such amount as
is necessary, without regard to the Borrowing Base at the time, to effect such
repayments and interest payments. The Borrowers hereby irrevocably instruct and
authorize the Lenders to make such Revolving Loans available to the Borrowers on
such date by applying the proceeds of such Loans in full to repayment of such
Pre-Petition Obligations owing by the Borrowers to the Lenders, and the Lenders
hereby agree, on the terms and subject to the conditions of this Agreement, to
make such Revolving Loans to the Borrowers on such date, without need for
delivery by the Borrowers of a Notice of Borrowing. The Borrowers acknowledge
that they shall have no right to receive any funds from the Lenders on account
of the Revolving Loans to be made by them under this subparagraph otherwise than
through application of the proceeds of such Loans as expressly provided for in
this subparagraph, and the Lenders will be deemed to have made such Revolving
Loans to the Borrowers by applying the proceeds thereof in accordance with this
subparagraph. ▇▇▇▇▇-Albion also hereby authorizes the Administrative Agent to
apply all funds, if any, received by it under any letter of credit issued in its
favor and delivered to it pursuant to the Visteon/American Axle Participating
Customer Agreement to the
41
payment of the Obligations and for that purpose, to make a drawing under such
letter of credit when permitted by its terms. However, the Administrative Agent
shall not be required to make any such drawing except upon instructions from the
Lenders and subject to the terms of Section 15 of this Agreement.
3.2 Covenants Involving Accounts and Inventory. (a) In furtherance of
the continuing assignment and security interest by each Obligor in such
Obligor's Accounts and Inventory in favor of the Administrative Agent, for the
benefit of the Lenders, the Issuing Bank and the Agents, as security for the
Obligations, in the case of each Borrower, or, in the case of each Guarantor, as
security for its Guaranty Obligations, each of the Obligors will, upon the
creation of Accounts, other than Excluded Albion Receivables, and purchase or
acquisition of Inventory, other than Excluded Albion Inventory, execute and
deliver to the Administrative Agent in such form and manner as the
Administrative Agent may reasonably require, solely for the Administrative
Agent's convenience in maintaining records of Collateral, such confirmatory
schedules of Accounts and Inventory as the Administrative Agent may reasonably
request, including without limitation, weekly schedules of Accounts and monthly
schedules of Inventory, all in form and substance satisfactory to the
Administrative Agent, and such other appropriate reports designating,
identifying and describing the Accounts and Inventory as the Administrative
Agent may reasonably request, and provided further that the Administrative Agent
may request any such information more frequently, from time to time, upon its
reasonable prior request.
(b) In addition, upon the Administrative Agent's request, each of the
Obligors shall provide the Administrative Agent with copies of agreements with,
or purchase orders from, such Obligor's customers, and copies of invoices to
customers, proof of shipment or delivery, access to their computers, electronic
media and software programs associated therewith (including any electronic
records, contracts and signatures) and such other documentation and information
relating to said Accounts, other than Excluded Albion Receivables, and other
Collateral, other than Excluded Albion Inventory, as the Administrative Agent
may reasonably require. Failure to provide the Administrative Agent with any of
the foregoing shall in no way affect, diminish, modify or otherwise limit the
security interests granted herein. Each of the Obligors hereby authorizes the
Administrative Agent to regard the printed name or rubber stamp signature of
such Obligor on assignment schedules or invoices as the equivalent of a manual
signature by an Authorized Officers or agent of such Obligor.
3.3 Representations Regarding Accounts and Inventory. Each of the
Obligors hereby represents and warrants to the Agents and the Lenders that: each
Trade Account Receivable of such Obligor, other than Excluded Albion
Receivables, is based on an actual and bona fide sale and delivery of Inventory
or rendition of services to their respective customers, any other Account of
such Obligor is bona fide, made by such Obligor in the ordinary course of its
business; the Inventory of such Obligor being sold, and Trade Accounts
Receivable created, other than Excluded Albion Receivables and Excluded Albion
Inventory, are the exclusive property of such Obligor and are not and shall not
be subject to any lien, consignment arrangement, encumbrance, security interest
or financing statement whatsoever, other than the Permitted Encumbrances; the
invoices evidencing such Trade Accounts Receivable, other than Excluded Albion
Receivables, are in the name of such Obligor, as applicable; and the customers
of the relevant Obligor have accepted the Inventory, other than Excluded Albion
Inventory, or services, owe and are obligated to pay the full amounts stated in
the invoices according to their
42
terms, without dispute, offset, defense, counterclaim or contra, except for
disputes and other matters arising in the ordinary course of business with
respect to which such Obligor has complied with the notification requirements of
Paragraph 3.5 of this Section 3 and matters relating to the filing of the Cases.
Each Obligor confirms to the Administrative Agent and the Lenders that any and
all Taxes or fees relating to its business, its sales, the Accounts or Inventory
relating thereto, are its sole responsibility and that same will be paid by such
Obligor when due, subject to Paragraph 8.2(e) of Section 8 of this Agreement,
and that none of said Taxes or fees represents a lien on or claim against the
Accounts. Each of the Obligors hereby further represents and warrants to the
Administrative Agent and the Lenders that such Obligor shall not acquire any
Inventory, other than Excluded Albion Inventory, on a consignment basis, nor
co-mingle its Inventory with any of inventory of any of its customers or any
other Person (other than Inventory of another Obligor which constitutes
Collateral), including pursuant to any ▇▇▇▇ and hold sale or otherwise, and that
such Obligor's Inventory, other than Excluded Albion Inventory, is marketable to
its customers in the ordinary course of business of such Obligor, except as such
Obligor may otherwise report in writing to the Administrative Agent pursuant to
Paragraph 3.5 hereof from time to time.
3.4 Establishment of Blocked Accounts; Matters Relating to Accounts.
(a) (i) Until the Administrative Agent has advised the Obligors to the contrary
after the occurrence of an Event of Default, the Obligors, at their expense,
will enforce, collect and receive all amounts owing on their respective Accounts
in the ordinary course of their business and any proceeds they so receive shall,
except for proceeds of Excluded Albion Receivables, be subject to the terms
hereof, and held on behalf of and in trust for the Administrative Agent on
behalf of the Lenders, the Issuing Bank and the Agents. Such privilege shall
terminate at the election of the Administrative Agent, upon the occurrence of an
Event of Default, and until such Event of Default is waived in writing by the
Lenders or cured to the Administrative Agent's and/or the Lender's satisfaction.
(ii) Each Obligor shall ensure that any checks, cash, credit card sales
and receipts, notes or other instruments or property received by such Obligor
with respect to any Collateral, including Accounts, other than Excluded Albion
Receivables, shall be held by such Obligor in trust for the Administrative
Agent, on behalf of the Lenders, the Issuing Bank and the Agents, separate from
such Obligor's own property and funds, and promptly turned over to the
Administrative Agent with proper assignments or endorsements by deposit to the
Depository Account, subject to subparagraph (c) of this Paragraph 3.4, where
Trim Trends is concerned.
(iii) Each of the Obligors shall do each of the following, subject to
subparagraph (c) of this Paragraph 3.4, where Trim Trends is concerned, and
except that ▇▇▇▇▇-Albion is not required to do the following with respect to
Excluded Albion Receivables, the proceeds thereof and related invoices and
checks and other related instruments of payment: (A) indicate on all of its
invoices that funds should be delivered to and deposited in a Blocked Account;
(B) direct all payments due to any of the Obligors to be made into a Blocked
Account; (C) irrevocably authorize and direct any banks which maintain the
Obligors' initial receipt of cash, checks and other items to promptly wire
transfer all available funds to a Blocked Account; and (D) advise all such banks
of the Administrative Agent's security interest in such funds.
43
(iv) Each Obligor shall provide the Administrative Agent with prior
written notice of any and all deposit accounts opened or to be opened subsequent
to the Initial Closing Date. All amounts received by the Administrative Agent in
payment of Accounts, other than Excluded Albion Receivables, will be credited to
the Revolving Loan Account when the Administrative Agent is advised by its bank
of its receipt of "collected funds" at the Administrative Agent's bank account
in New York, New York on the Business Day of such advice if advised no later
than 1:00 p.m. EST or on the next succeeding Business Day if so advised after
1:00 PM EST. However, the Revolving Loan Account will be charged monthly with
the cost of one (1) additional Business Day on all such collections at the
interest rate (based upon the Citibank Base Rate) applicable to Revolving Loans
(the aggregate amount of such interest, the "Collection Day Interest" for the
relevant month). No checks, drafts or other instrument received by the
Administrative Agent shall constitute final payment to the Administrative Agent
and/or the Lenders or the Agents unless and until such instruments have actually
been collected.
(b) (i) The Obligors shall establish and maintain, in their name and at
their expense, the deposit accounts, including the Canadian Deposit Account,
with such banks as are acceptable to the Administrative Agent (the "Blocked
Accounts") into which each of the Obligors shall promptly cause to be deposited:
(i) all proceeds of Collateral received by any of the Obligors, including all
amounts payable to the Obligors from credit card issuers and credit card
processors, and (ii) all amounts on deposit in deposit accounts used by the
Obligors at each of their locations, all as further provided in Paragraph 3.4(a)
above, but in each case excluding proceeds of Excluded Albion Receivables and
any deposit account into which such proceeds are deposited.
(ii) The Obligors shall cause each of the banks at which any of the
Blocked Accounts is established to enter into an agreement, in form and
substance satisfactory to the Administrative Agent (the "Blocked Account
Agreements"), providing that (A) all cash, checks and items received or
deposited in the Blocked Accounts are the property of the Administrative Agent
(or, in the case of the Canadian Deposit Account, are subject to the lien of
this Agreement in favor of the Administrative Agent), (B) the depository bank
has no lien upon, or right of set off against, the Blocked Accounts and any
cash, checks, items, wires or other funds from time to time on deposit therein,
except as otherwise provided in the Blocked Account Agreements, and (C) subject
to subparagraph (c) of this Paragraph 3.4, where Trim Trends is concerned,
automatically, on a daily basis, the depository bank will wire, or otherwise
transfer, in immediately available funds, on a daily basis, all funds received
or deposited into the Blocked Accounts to such bank account as the
Administrative Agent may from time to time designate for such purpose. Each of
the Obligors hereby confirms and agrees that all amounts deposited in such
Blocked Accounts and any other funds received and collected by the
Administrative Agent, whether as proceeds of Inventory or other Collateral or
otherwise, shall be the property of the Administrative Agent.
(c) Notwithstanding anything to the contrary elsewhere in this
Paragraph 3.4, but subject to the final sentence of this subparagraph (c), so
long as there is no continuing Default or Event of Default: up to $300,000 may
remain in the Canadian Deposit Account (the excess over such permitted balance,
and all funds in the Canadian Deposit Account at any time there is a Default or
Event of Default, an "Excess Amount"); and the amounts permitted by this
sentence to remain therein may be used by Trim Trends for its working capital
purposes. The provisions of this Paragraph 3.4(b), clause (ii)(C), requiring the
automatic daily wire or other transfer of
44
funds to an account designated by the Administrative Agent shall not apply to
the depositary at which the Canadian Deposit Account is maintained; however, the
Administrative Agent is hereby irrevocably authorized by Trim Trends to instruct
that depositary to transfer all Excess Amounts believed by the Administrative
Agent to exist from time to time as follows:
(1) at any time when a Default or Event of Default is continuing to
an account designated by the Administrative Agent for application
to repayment of the Revolving Loan; and
(2) at all other times, to a Blocked Account established and
maintained in the name of ▇▇▇▇▇-Albion (or if such an account
acceptable to the Administrative Agent does not at the time
exist, to a Blocked Account established and maintained in the
name of a Borrower to the satisfaction of the Administrative
Agent).
▇▇▇▇▇-Albion and each of the other Borrowers hereby irrevocably directs, and the
Administrative Agent hereby acknowledges, that all Excess Amounts transferred at
any time to a Blocked Account in the name of ▇▇▇▇▇-Albion or such other
Borrower, as the case may be, shall be transferred directly from the Canadian
Deposit Account as provided above. The Administrative Agent shall have no
responsibility to any Person for any failure by it to give, or delay by it in
giving, any instructions of the kind referred to above in this subparagraph (c)
in connection with the Canadian Deposit Account. In addition, unless the
Administrative Agent, at the direction of the Required Revolving Facility
Lenders, shall determine otherwise, the first sentence of this subparagraph (c)
shall cease to apply if, by the fifteenth Business Day after the statement
cutoff date for each month or monthly fiscal period, and at such other times as
the Administrative Agent shall request, as promptly as practicable after the
request, Trim Trends shall have not caused the Administrative Agent to receive a
correct and full copy of a bank statement for the Canadian Deposit Account and
each other account maintained by Trim Trends.
3.5 Reports Involving Accounts and Related Matters. The Obligors shall
notify the Administrative Agent: (a) of any matters affecting the value,
enforceability or collectibility of any Account and of all customer disputes,
offsets, defenses, counterclaims, returns, rejections and all reclaimed or
repossessed merchandise or goods, and of any adverse effect in the value of
their Inventory, in their weekly and monthly collateral reports (as applicable)
provided to the Administrative Agent hereunder, in such detail and format as the
Administrative Agent may reasonably require from time to time and (b) promptly
of any such matters which are material, as a whole, to the Accounts and/or the
Inventory. The Obligors agree to issue credit memoranda promptly (with
duplicates to the Administrative Agent upon request after the occurrence of an
Event of Default) upon accepting returns or granting allowances. Upon the
occurrence of an Event of Default (which is not waived in writing by the
Required Revolving Facility Lenders or cured to the satisfaction of the Required
Revolving Facility Lenders) and on notice from the Administrative Agent, the
Obligors agree to ensure that all returned, reclaimed or repossessed merchandise
or goods shall be set aside by the Obligors, marked with the Administrative
Agent's name (as secured party) and held by the Obligors for the Administrative
Agent's account.
3.6 Revolving Loan Account. (a) Subject to the provisions of paragraph
(b) below, the Administrative Agent shall maintain a Revolving Loan Account on
its books in which each of the Borrowers will be charged with all Revolving
Loans, L/C Obligations and Voluntary
45
Overadvances made or delivered by the Administrative Agent to any of the
Borrowers or for the account of any of the Borrowers, and with any other
Obligations, including any and all costs, expenses and reasonable attorney's
fees which the Administrative Agent may incur in connection with the exercise by
or for the Administrative Agent of any of the rights or powers herein or in any
other Loan Document conferred upon the Administrative Agent, or in the
prosecution or defense of any action or proceeding to enforce or protect any
rights of any of the Agents, the Issuing Bank or any of the Lenders in
connection with this Agreement, the other Loan Documents or the Collateral
assigned hereunder, or any Obligations. The Borrowers will be credited with all
amounts received by the Administrative Agent and/or the Lenders (or in respect
of amounts owing to them hereunder, the Issuing Bank or the Agents) from the
Borrowers or from others for the Borrowers' account, including, as above set
forth, all amounts received by the Administrative Agent in payment of Accounts,
and such amounts will be applied to payment of the Obligations as set forth
herein. In no event shall prior recourse to any Accounts or other security
granted to or by the Borrowers be a prerequisite to the Administrative Agent's
right to demand payment of any Obligation. Further, it is understood that the
Agents, the Issuing Bank and/or the Lenders shall have no obligation whatsoever
to perform in any respect any of the Obligors' contracts or obligations relating
to the Accounts.
(b) In order to utilize the collective borrowing powers of the
Borrowers (collectively the "Collective Borrowers") in the most efficient and
economical manner, and in order to facilitate the handling of the accounts of
the Collective Borrowers on the Administrative Agent's books, the Collective
Borrowers have requested, and the Administrative Agent has agreed to handle
accounts of the Collective Borrowers on the Administrative Agent's books on a
combined basis, all in accordance with the following provisions:
(i) In lieu of maintaining separate accounts on the
Administrative Agent's books in the name of each of the Collective
Borrowers, the Administrative Agent shall maintain one account under
the name: Harvard Industries et al (herein the "Collective Account").
Confirmatory assignments of Accounts will continue to be made to the
Administrative Agent by each of the Collective Borrowers. Loans, L/C
Obligations and Voluntary Overadvances made to any of the Collective
Borrowers will be joint and several obligations of the Borrowers and
charged to the Collective Account indicated above, along with any
charges and expenses under this Agreement made in relation to any of
the Obligations. The Collective Account will be credited, with all
amounts received by the Administrative Agent from any of the Collective
Borrowers or from others for their account including all amounts
received by the Administrative Agent in payment of Accounts assigned to
the Administrative Agent as provided in this Agreement.
(ii) Each month the Administrative Agent will render to the
Collective Borrowers one extract of the combined Collective Account,
which shall be deemed to be an account stated as to each of the
Collective Borrowers and which will be deemed correct and accepted by
all of the Collective Borrowers unless the Administrative Agent
receives a written statement of exceptions from them, through Harvard,
within thirty (30) days after such extract has been rendered by the
Administrative Agent. It is expressly understood and agreed by each of
the Collective Borrowers that the Administrative Agent shall have no
obligation to account separately to any of the Collective Borrowers.
46
(iii) Requests for Loans, L/C Obligations and Voluntary
Overadvances hereunder by the Administrative Agent on behalf of the
Lenders and/or the Lenders may be made by Harvard as agent for the
Collective Borrowers and the Administrative Agent is hereby authorized
and directed to accept, honor and rely on such instructions and
requests, subject to the limitation and provisions set forth in this
Agreement. It is expressly understood and agreed by each of the
Collective Borrowers that none of the Agents, the Issuing Bank or the
Lenders shall have any responsibility to inquire into the correctness
of the apportionment, allocation, or disposition of (x) any Loans
(including any Overadvance), L/C Obligations made to any of the
Collective Borrowers or (y) any of the expenses and charges of either
Agent relating thereto. All loans and advances made by the
Administrative Agent (on behalf of the Lenders, the Agents and the
Issuing Bank) and/or the Lenders are made for the Collective Account.
(iv) The Collective Borrowers jointly and severally and
unconditionally guarantee to the Agents and the Lenders the prompt
payment in full of (A) all Loans (including any Overadvances) and L/C
Obligations made and to be made hereunder by any Lender (directly or
through the Administrative Agent) to any of the Borrowers, as well as
(B) all other Obligations of the Collective Borrowers to the Agents
and/or the Lenders and hereby expressly confirm in all respects the
agreements and instruments executed by each of the Collective Borrowers
in any Agent's and/or the Lenders' favor as more fully set forth
therein.
(v) All Accounts assigned to the Administrative Agent for the
benefit of the Lenders by any of the Collective Borrowers or any of
their subsidiaries and any other collateral security now or hereafter
given to the Administrative Agent and/or the Lenders by any of the
Collective Borrowers or any of their subsidiaries (be it Accounts or
otherwise), shall secure all Loans (including any Overadvance) and L/C
Obligations made by the Lenders, directly or through the Administrative
Agent, to any of the Collective Borrowers, and shall be deemed to be
pledged to the Administrative Agent as security for any and all other
Obligations and Guaranty Obligations to the Agents, the Issuing Bank
and/or the Lenders as set forth under this Agreement, or any other
agreements between any Agent and/or the Lenders and any of the
Collective Borrowers or Guarantors.
(vi) The handling of the accounts of the Collective Borrowers in
a combined fashion, as more fully set forth herein, is done solely as
an accommodation to the Collective Borrowers and at their request, and
the Agents, the Issuing Bank and Lenders shall incur no liability to
the Collective Borrowers as a result hereof.
It is expressly understood that the foregoing request was made because the
Collective Borrowers are engaged in an integrated operation that requires
financing on a basis permitting the availability of credit from time to time to
each of the Collective Borrowers as required for the continued successful
operation of each of the Collective Borrowers. Each of the Collective Borrowers
expects to derive benefit, directly or indirectly, from such availability since
the successful operation of each of the Collective Borrowers is dependent on the
continued successful performance of the functions of the integrated group. In
addition, the Borrowers have informed the Agents and the Lenders that:
47
(A) Harvard, in order to increase the efficiency and
productivity of each of the other Collective Borrowers, has
centralized in itself a cash management system which entails,
in part, central disbursement and operating accounts in which
it provides the working capital needs of each of the other
Collective Borrowers and manages and timely pays the accounts
payable of each of the other Collective Borrowers;
(B) Harvard is further enhancing the operating efficiencies of
the other Collective Borrowers by purchasing, or causing to be
purchased, in its name for its account all materials,
supplies, inventory and services required by the other
Collective Borrowers which will result in reducing the
operating costs of the other Collective Borrowers; and
(C) Since all of the Collective Borrowers are now engaged in
an integrated operation that requires financing on an
integrated basis and since each Collective Borrower expects to
benefit from the continued successful performance of such
integrated operations and in order to best utilize the
collective borrowing powers of each Collective Borrower in the
most effective and cost efficient manner and to avoid adverse
effects on the operating efficiencies of each Collective
Borrower and the existing back-office practices of the
Collective Borrowers, each Collective Borrower has requested
that all Revolving Loans and L/C Obligations be disbursed
solely upon the request of Harvard and to bank accounts
managed solely by Harvard and that Harvard will manage for the
benefit of each Collective Borrower the expenditure and usage
of such funds.
3.7 Overadvance Due on Demand. In the event that any requested
Revolving Loan exceeds Availability or that (a) the sum of (i) the outstanding
balance of Revolving Loans and (ii) outstanding balance of Letters of Credit
exceeds (b)(x) the Borrowing Base or (y) the Revolving Facility Credit, any such
Voluntary Overadvance or Nonconsensual Overadvance shall be due and payable by
the Borrowers to the Administrative Agent on behalf of the Revolving Facility
Lenders immediately upon the Administrative Agent's demand therefor.
SECTION 4. LETTERS OF CREDIT
4.1 Letter of Credit Commitment. (a) On the terms and subject to the
conditions contained in this Agreement, from time to time during the period
commencing on the Initial Closing Date and ending on the earlier of the
termination of the Revolving Credit Commitment and thirty (30) days prior to the
Termination Date, the Issuing Bank agrees to issue one or more Letters of Credit
for the account of the L/C Eligible Account Parties, at the request of the L/C
Eligible Account Parties, made by Harvard, in accordance with Paragraph 4.2 of
this Section 4; provided, however, that the Issuing Bank shall be under no
obligation to issue any Letter of Credit if:
48
(i) any order, judgment or decree of any Governmental
Authority or arbitrator not in effect on the date of
this Agreement shall purport by its terms to enjoin or
restrain the Issuing Bank from issuing such Letter of
Credit or any Requirement of Law applicable to the
Issuing Bank or any request or directive (whether or not
having the force of law) from any Governmental Authority
with jurisdiction over the Issuing Bank shall prohibit,
or request that the Issuing Bank refrain from, the
issuance of letters of credit generally or such Letter
of Credit in particular or shall impose upon the Issuing
Bank with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which
the Issuing Bank is not otherwise compensated hereunder
by an L/C Eligible Account Party) or shall result in any
unreimbursed loss, cost or expense that was not
applicable, in effect or known to the Issuing Bank as of
the date of this Agreement and which the Issuing Bank in
good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
(ii) the Issuing Bank shall have received written notice from
the Administrative Agent, any Lender or the Borrowers,
on or prior to the requested date of issuance of such
Letter of Credit, that one or more of the conditions
contained in Section 2 applicable to the Issuing Bank's
obligation to issue such Letter of Credit is not then
satisfied (if not theretofore waived as provided
herein);
(iii) after giving effect to the issuance of such Letter of
Credit, the L/C Obligations would exceed the Revolving
Credit Availability as then in effect;
(iv) after giving effect to the issuance of such Letter of
Credit, the L/C Obligations would exceed the Letter of
Credit Sub-Line as then in effect; or
(v) any fees due in connection with a requested issuance
have not been paid.
For all purposes of the foregoing and the other provisions of this Section 4,
the renewal of a Letter of Credit shall be treated as an issuance. None of the
Lenders (other than the Issuing Bank in its capacity as such) shall have any
obligation to issue any Letter of Credit.
(b) In no event shall the expiration date of any Letter of Credit (i)
be more than one year after the date of issuance thereof or (ii) be less than
thirty (30) days prior to the Termination Date. Any and all L/C Obligations in
respect of Letters of Credit issued hereunder shall be reserved dollar for
dollar from Availability as an Availability Reserve.
4.2 Procedure for Issuance of Letters of Credit. (a) In connection with
the issuance of each Letter of Credit, the L/C Eligible Account Parties, through
Harvard, shall give the Issuing Bank and the Administrative Agent at least two
Business Days' prior written notice, in such written or electronic form as is
acceptable to the Issuing Bank), of the requested issuance of such Letter of
Credit (an "L/C Application"). Such notice shall be irrevocable and shall
specify the stated amount of the Letter of Credit requested, which stated amount
shall not be less
49
than $50,000 (unless otherwise agreed by the Issuing Bank), the requested date
of issuance of such Letter of Credit (which shall be a Business Day), the date
on which such Letter of Credit is to expire (which shall be a Business Day), and
the beneficiary of such requested Letter of Credit. Such notice, to be
effective, must be received by the Issuing Bank and the Administrative Agent not
later than 12:00 noon (New York City time) on the second Business Day prior to
the requested date for issuance of such Letter of Credit.
(b) Subject to the satisfaction of the conditions applicable under
tParagraph 2.3 of Section 2 hereof to the issuance of Letters of Credit and the
conditions set forth in this Section 4, the Issuing Bank shall, on the requested
date, issue a Letter of Credit on behalf of the L/C Eligible Account Parties in
accordance with the Issuing Bank's usual and customary business practices. The
Issuing Bank shall not issue any Letter of Credit in the period commencing on
the first Business Day after it receives written notice from any Agent or Lender
that one or more of the conditions precedent contained in Paragraph 2.3 of
Section 2 hereof shall not on such date be satisfied (unless previously waived),
and ending when such conditions are satisfied or waived. The Issuing Bank shall
not otherwise be required to determine that, or take notice whether, the
conditions precedent set forth in Paragraph 2.3 of Section 2 hereof have been
satisfied or waived in connection with the issuance of any Letter of Credit.
4.3 Reimbursement Agreement. If requested by the Issuing Bank, prior to
the issuance of each Letter of Credit by the Issuing Bank, and as a condition of
such issuance and of the participation of each Revolving Facility Lender in the
L/C Obligations arising with respect thereto, the L/C Eligible Account Parties
shall have delivered to the Issuing Bank a letter of credit reimbursement
agreement, in such form as the Issuing Bank may employ in its ordinary course of
business for its own account, with such modification thereto as may be agreed
upon by the Issuing Bank and Harvard, on behalf of the L/C Eligible Account
Parties, and as are not materially adverse (in the judgment of the Issuing Bank
and the Agents) to the interests of the Lenders (a "Reimbursement Agreement"),
signed by each of the L/C Eligible Account Parties, and such other documents or
items as may be required pursuant to the terms thereof. It shall, however, be
understood that the inclusion of Trim Trends as a party to a Reimbursement
Agreement shall be required only in connection with a Letter of Credit issued
for the account of Trim Trends. In the event of any conflict between the terms
of any Reimbursement Agreement and this Agreement, the terms of this Agreement
shall govern.
4.4 Responsibilities of Issuing Bank. The Issuing Bank shall:
(a) give the Administrative Agent written notice (or telephonic notice
confirmed promptly thereafter in writing), which writing may be a telecopy or
electronic mail, of the issuance or renewal of a Letter of Credit issued by it,
of all drawings under a Letter of Credit issued by it and of the payment (or the
failure to pay when due) by the L/C Eligible Account Parties of any
Reimbursement Obligation when due (which notice the Administrative Agent shall
promptly transmit by telecopy, electronic mail or similar transmission to each
Revolving Facility Lender);
(b) upon the request of any Agent or Lender, furnish to such Lender
copies of any Reimbursement Agreement to which the Issuing Bank is a party and
such other documentation as may reasonably be requested by such Agent or Lender;
and
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(c) no later than ten (10) Business Days following the last day of each
calendar month, provide to the Administrative Agent (and the Administrative
Agent shall provide a copy to each Lender requesting the same) a schedule of the
Letters of Credit issued by it, in form and substance reasonably satisfactory to
the Administrative Agent, setting forth the aggregate L/C Obligations
outstanding at the end of each month and any information requested by the L/C
Eligible Account Parties (through Harvard) or the Administrative Agent relating
thereto.
4.5 L/C Participations. Immediately upon the issuance by the Issuing
Bank of a Letter of Credit in accordance with the terms and conditions of this
Agreement, the Issuing Bank shall be deemed to have sold and transferred to each
Revolving Facility Lender, and each Revolving Facility Lender shall be deemed
irrevocably and unconditionally to have purchased and received from the Issuing
Bank, without recourse or warranty, an undivided interest and participation
(each, an "L/C Participation"), to the extent of such Revolving Facility
Lender's Revolving Credit Percentage, in such Letter of Credit and the
Obligations of the L/C Eligible Account Parties with respect thereto (including
all L/C Obligations with respect thereto) and any security therefor and the
Guaranty and any other guaranty pertaining thereto. In addition to the
foregoing, the L/C Participations of each Revolving Facility Lender shall
include, from and after the date of this Agreement, each of such Revolving
Facility Lender's "L/C Participations" under and as defined in the Pre-Petition
Credit Agreement, to the extent applicable to the Pre-Petition L/C Obligations.
4.6 Reimbursement Obligations. (a) The Borrowers shall pay to the
Issuing Bank the amount of all Reimbursement Obligations owing to the Issuing
Bank under any Letter of Credit issued for the account of any of the L/C
Eligible Account Parties, no later than the date (the "Reimbursement Date")
which is one Business Day after the L/C Eligible Account Parties receive written
notice from the Issuing Bank that payment has been made under such Letter of
Credit, irrespective of any claim, set-off, defense or other right that any of
the L/C Eligible Account Parties may have at any time against the Issuing Bank
or any other Person.
(b) In the event that the Issuing Bank makes any payment under any
Letter of Credit and any of the L/C Eligible Account Parties shall not have
repaid such amount to the Issuing Bank pursuant to this Paragraph 4.6 or such
payment is rescinded or set aside for any reason, such Reimbursement Obligation
shall be payable by the Borrowers on demand with interest thereon computed (i)
from and including the date on which such Reimbursement Obligation arose to but
excluding the Reimbursement Date at the rate of interest applicable during such
period to Revolving Loans pursuant to Paragraph 9.1(a) of Section 9 of this
Agreement and, (ii) from and including the Reimbursement Date to but excluding
the date of payment in full of such Reimbursement Obligation at the Default Rate
of Interest during such period, and the Issuing Bank shall promptly notify the
Administrative Agent, which shall promptly notify each Revolving Facility Lender
of such failure.
(c) Upon receipt of any such notice, the Administrative Agent, on
behalf of each Revolving Facility Lender, shall promptly and unconditionally pay
to the Issuing Bank the amount of such Revolving Facility Lender's Revolving
Credit Percentage of such payment in U.S. dollars and in immediately available
funds. If the Issuing Bank gives the relevant notice to the Administrative Agent
prior to 11:00 A.M. (New York City time) on any Business Day, the Administrative
Agent shall make available to the Issuing Bank each Revolving Facility Lender's
51
Revolving Credit Percentage of the amount of such payment on such Business Day
as provided above. Upon such payment by the Administrative Agent, each Revolving
Facility Lender shall, except during the continuance of a Default or Event of
Default under subparagraphs (a) through (c) of Paragraph 11.1 of Section 11
hereof and notwithstanding whether or not the conditions precedent set forth in
Paragraph 2.3 of Section 2 shall have been satisfied (which conditions precedent
the Lenders hereby irrevocably waive) be deemed to have made a Revolving Loan to
the Borrowers in the principal amount of such Revolving Facility Lender's
Revolving Credit Percentage of the total amount of such payment.
(d) Whenever the Issuing Bank receives from any Obligor (or any of the
Collateral or by way of right of setoff) a payment of a Reimbursement Obligation
as to which the Administrative Agent, on behalf of the Revolving Facility
Lenders, has made a payment to the Issuing Bank pursuant to this Paragraph 4.6,
the Issuing Bank shall pay to the Administrative Agent (for distribution by the
Administrative Agent to each Revolving Facility Lender as provided in Paragraph
14.2 of Section 14 hereof), in immediately available funds, an amount equal to
such Revolving Facility Lender's Revolving Credit Percentage of the amount of
such payment (adjusted, as necessary, to reflect the respective amounts the
Revolving Facility Lenders have paid in respect of such Reimbursement Obligation
through any settlement required from them under Paragraph 14.2 of Section 14
hereof).
4.7 Payments by Revolving Facility Lenders. If and to the extent the
Administrative Agent, on behalf of the Revolving Facility Lenders, shall not
have so made the amount of any payment required by Paragraph 4.6 of this Section
4 available to the Issuing Bank, such amount shall be payable by the Revolving
Facility Lenders pro rata, in accordance with their respective Revolving
Facility Percentages thereof, forthwith on demand together with interest
thereon, for the first Business Day after payment was first due at the Federal
Funds Rate and, thereafter until such amount is paid to the Issuing Bank, at the
rate per annum applicable to Revolving Loans under Paragraph 9.1(a) of Section 9
of this Agreement.
4.8 Reimbursement Obligations Absolute. The L/C Eligible Account
Parties' obligations to pay each Reimbursement Obligation and the obligations of
the Revolving Facility Lenders to make payments to the Administrative Agent for
the account of the Issuing Bank with respect to Letters of Credit shall be
absolute, unconditional and irrevocable and shall be performed strictly in
accordance with the terms of this Agreement, under any and all circumstances
whatsoever, including the occurrence of any Default or Event of Default, and
irrespective of:
(a) any lack of validity or enforceability of any Letter of Credit or
any Loan Document, or any term or provision therein;
(b) any amendment or waiver of or any consent to departure from all or
any of the provisions of any Letter of Credit or any Loan Document;
(c) the existence of any claim, set off, defense or other right that
the L/C Eligible Account Parties, the Guarantors, any other party guaranteeing,
or otherwise obligated with, the L/C Eligible Account Parties, any subsidiary or
other affiliate thereof or any other Person may at any time have against the
beneficiary under any Letter of Credit, the Issuing Bank, the
52
Administrative Agent or any Lender or any other Person, whether in connection
with this Agreement, any other Loan Document or any other related or unrelated
agreement or transaction;
(d) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(e) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms of
such Letter of Credit; and
(f) any other act or omission to act or delay of any kind of the
Issuing Bank, the Lenders, the Administrative Agent or any other Person or any
other event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Paragraph 4.8 of this
Section 4, constitute a legal or equitable discharge of any L/C Eligible Account
Party's obligations hereunder or any Guarantor's obligations under the Guaranty.
4.9 Actions and Reliance by the Issuing Bank. Without prejudice to the
provisions of Section 15, in determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof, the Issuing
Bank may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary (subject to the gross negligence or willful
misconduct of the Issuing Bank) and, in making any payment under any Letter of
Credit the Issuing Bank may rely exclusively on the documents presented to it
under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever, and any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute willful misconduct or gross negligence of
the Issuing Bank. The Issuing Bank shall use reasonable efforts to notify
Harvard (which shall be solely responsible for further notice to the other L/C
Eligible Account Parties) prior to paying any Letter of Credit (it being
understood that the Issuing Bank shall have no liability to the L/C Eligible
Account Parties or the Guarantors for the Issuing Bank's failure to deliver such
notice). Notwithstanding anything herein to the contrary, nothing shall relieve
the Issuing Bank of liability for its own gross negligence or willful
misconduct, as finally determined by a court of competent jurisdiction.
SECTION 5. TERMINATION OR REDUCTION OF COMMITMENTS; REIMBURSEMENT AND LOAN
OBLIGATIONS GENERALLY
5.1 Revolving Line of Credit. Harvard, on behalf of the Obligors may,
upon at least three Business Days' notice to the Administrative Agent, terminate
in whole or reduce in part the unused portion of the Line of Credit (determined
by subtracting the sum (without duplication) of the Revolving Loans and the L/C
Obligations from the then total amount of the Line of Credit);
53
provided, however, that each partial reduction of the Line of Credit shall be
made ratably among the Lenders in accordance with their Revolving Credit
Commitments; and provided, further, that any mandatory prepayment resulting from
such reduction shall have been made in accordance with Section 6.
5.2 Letter of Credit Sub-Line. The Letter of Credit Sub-Line shall be
permanently reduced from time to time on the date of each reduction in the Line
of Credit so that, after giving effect to each reduction of the Line of Credit
the Letter of Credit Sub-Line equals 28.57% of the Line of Credit.
5.3 Reimbursement and Loan Obligations Generally. The Borrowers and the
Guarantors confirm their understanding with the Agents, the Issuing Bank and the
Lenders that the amount of each payment made by the Issuing Bank under any
Letter of Credit or any "Letter of Credit" referred to in the Pre-Petition
Credit Agreement which gave rise to any of the Pre-Petition L/C Obligations
shall thereafter until fully, finally and indefeasibly paid in full by the
Borrowers or the Guarantors constitute a Reimbursement Obligation payable to the
Issuing Bank and, in the circumstances contemplated in Paragraph 4.6(d) of
Section 4 hereof, Obligations payable to the Lenders in respect of Revolving
Loans and, so long as there is no duplication in the treatment of any such
amount in the calculation of the Availability or the total of the Obligations in
respect of interest payable hereunder, its treatment as a Reimbursement
Obligation or an Obligation in respect of a Revolving Loan shall be as
determined by the Administrative Agent, the Issuing Bank and the Lenders so as
to reflect and preserve their respective rights and interests vis-a-vis each
other, the obligations of the L/C Eligible Account Parties to pay each such
amount in full and the related Guaranty Obligations of the Guarantors.
SECTION 6. PREPAYMENTS OF LOANS
6.1 Prepayments. For purposes of this Agreement it should be understood
that, whenever it is stated that funds shall be applied to the prepayment of all
or any portion of the principal of any Loan, such application shall be deemed to
require simultaneous payment of interest accrued to but excluding the date of
prepayment, to the extent then unpaid.
6.2 Optional Prepayment of Revolving Loans. The Borrowers may, upon at
least three (3) Business Days' notice, prepay, at their option, in whole or in
part, the Revolving Loans (or either of them), provided that on each such
prepayment, the Borrowers shall pay accrued interest on the principal so prepaid
to the date of such prepayment. Each such partial prepayment shall be in an
aggregate principal amount of $5,000,000.00 or an integral multiple of
$1,000,000.00 in excess thereof.
6.3 Mandatory Application of Certain Proceeds. On any date on which any
of the Obligors receives (1) any proceeds of credit obtained or consideration
for any debt incurred by a Borrower prior to the repayment in full of all
Obligations and the termination of the Commitments hereunder or (2) Net Cash
Proceeds from the incurrence or issuance by any of the Obligors of any balance
sheet debt other than: (a) Permitted Indebtedness or (b) any factoring of
accounts receivable or trade payables by non-U.S. subsidiaries of Harvard the
Borrowers shall apply an amount equal to 100% of the proceeds of such credit
obtained or consideration of such debt incurred and Net Cash Proceeds referred
to above in this Paragraph 6 (as applicable) to
54
prepay the aggregate principal amount of the Pre-Petition Term Loans and then
the Revolving Loans. Each such prepayment under the preceding sentence shall be
applied first to the principal installments of the Pre-Petition Term Loan B in
inverse order of maturities until the Obligations in respect of the Pre-Petition
Term Loan B have been repaid-in-full, and second to prepay the principal
installments of Pre-Petition Term Loan A in inverse order of maturities until
the obligations in respect of Pre-Petition Term Loan A have been repaid-in-full
and third to prepay the Revolving Loans (with a corresponding decrease in the
Lenders' commitments under the Revolving Credit Facility).
6.4 Mandatory Application of Insurance Proceeds and Sale of Asset
Proceeds. (a) On the date of receipt by any Obligor of
(i) Insurance Proceeds (other than Insurance Proceeds that are
reinvested in compliance with Paragraph 7.7), or
(ii) Net Cash Proceeds from the sale, lease, transfer or other
disposition of any assets of any of the Obligors (except for Permitted
Asset Transfers and as otherwise provided in accordance with
subparagraph (b) of this Paragraph 6.4 and Paragraph 7.7(c) of Section
7) ("Sale Proceeds"),
the Borrowers shall prepay the aggregate principal amount of the Pre-Petition
Term Loans and the Revolving Loans in an amount equal to 100% of the amount of
said Insurance Proceeds and/or net sale proceeds. Each such prepayment shall be
applied (1) in the case of Net Cash Proceeds of the loanable value of Accounts
and/or Inventory included in the assets giving rise to such Insurance Proceeds
or Sales Proceeds to repay the Revolving Loans (with a corresponding decrease in
the Lenders' Commitments under the Line of Credit); and (2) in all other cases,
otherwise, first to prepay Pre-Petition Term Loan B until the Obligations in
respect of Pre-Petition Term Loan B have been paid-in-full, second to prepay
Pre-Petition Term Loan A until the Obligations under Pre-Petition Term Loan A
have been paid-in-full and third to prepay the Revolving Loans (with a
corresponding decrease in the Lenders' commitments under the Revolving Credit
Facility). All such mandatory prepayments of the Pre-Petition Term Loans shall
be applied to remaining installments of the Pre-Petition Term Loans in inverse
order of maturity.
SECTION 7. COLLATERAL FOR OBLIGATIONS
7.1 Grant of Security Interest. (a) To induce the Lenders to make the
Loans, each of the Obligors hereby (i) pledges and grants to the Administrative
Agent, for the benefit of the Agents, the Issuing Bank and the Lenders, as
security for the Obligations a continuing security interest and first priority
lien (subject, as to priority, only to the Carve-Out and the United States
Trustees Fees) in accordance with Sections 364(c)(2) and (3) of the Bankruptcy
Code in and to the Collateral, (ii) further pledges and grants to the
Administrative Agent for the benefit of the Agents, the Issuing Bank and the
Lenders as security for the Obligations a first priority priming lien which is
senior to the Tax Liens in accordance with Section 364(d)(1) of the Bankruptcy
Code, (iii) further pledges and grants to the Administrative Agent for the
benefit of the Agents, the Issuing Bank and the Lenders as security for the
Obligations a continuing security interest and first priority lien (subject, as
to priority, only to the Carve-Out and the United States Trustees Fees) in
accordance
55
with Sections 364(c)(2) and (3) and 364(d)(1) of the Bankruptcy Code, and (iv)
as to the Guarantors, confirms and specifically acknowledges the continuation of
the grant of security interest provided to the Administrative Agent on behalf of
the Agents, Lenders and the Issuing Bank under the Pre-Petition Agreements, in
all property and interests of such Obligor and its estate, real or personal,
tangible or intangible, whether now owned or existing or hereafter acquired or
arising and regardless of where located including, but not limited to:
(a) Accounts;
(b) Inventory;
(c) General Intangibles;
(d) Documents of Title;
(e) Equipment;
(f) Real Estate;
(g) Investment Property other than the Excluded Stock;
(h) chattel paper;
(i) leasehold interests;
(j) contracts together with all contract rights arising thereunder;
(k) IP Collateral;
(l) Other Collateral; and
to the extent not listed above, all other items that constitute "Collateral"
under any of the Pre-Petition Security Documents and all cash and non-cash
proceeds of any and all of the foregoing Collateral and, to the extent not
otherwise included, all payments under insurance (whether or not the
Administrative Agent is the loss payee thereof) and any indemnity, warranty or
guaranty payable by reason of loss or damages to or otherwise with respect to
any of the foregoing (all of the foregoing, collectively, the "Collateral").
(b) Each of the Obligors acknowledges that, pursuant to the Interim
Order and the Final Order, the Liens granted in favor of the Administrative
Agent (on behalf of the Lenders, the Agents and the Issuing Bank) in all of the
Collateral shall be perfected without the recordation of any UCC Financing
Statements, notices of Liens or other instruments of mortgage or assignment or
recordation or that any other action be taken under applicable bankruptcy law.
(c) The security interest of the Administrative Agent under this
Agreement and the other Loan Documents extends to all Collateral of each kind
which is the subject of this Agreement which any Obligor may acquire at any time
for so long as any of the Obligations remains outstanding.
56
7.2 Related Collateral Matters. The security interests granted
hereunder shall extend and attach to:
(a) All Collateral which is owned by any of the Obligors or in which
the Obligors have any interest, whether held by the Obligors or held by others
for their account, and, if any Collateral is Equipment, whether the Obligors'
interest in such Equipment is as owner, finance lessee or conditional vendee;
(b) All Equipment, whether the same constitutes personal property or
fixtures, including, but without limiting the generality of the foregoing, all
Tooling, dies, jigs, tools, benches, molds, tables, accretions, component parts
thereof and additions thereto, as well as all accessories, motors, engines and
auxiliary parts used in connection with, or attached to, the Equipment; and
(c) All Inventory and any portion thereof which may be returned,
rejected, reclaimed or repossessed by either the Administrative Agent or any of
the Obligors from the Obligors' customers, as well as to all supplies, goods,
incidentals, packaging materials, labels and any other items which contribute to
the finished goods or products manufactured or processed by the Obligors, or to
the sale, promotion or shipment thereof.
7.3 Certain Dealings, Rights and Matters Relating to Collateral.
(a) Inventory. The provisions of this Paragraph 7.3 shall not apply to
Excluded Albion Inventory. Each Obligor shall safeguard, protect and hold all
Inventory for the Administrative Agent's account and make no disposition thereof
except Permitted Asset Transfers. Each of the Obligors shall sell and ship
Inventory to its customers only in the ordinary course of such Obligor's
business, and then only on open account and on terms currently being extended by
such Obligor to its customers, provided that, absent the prior written consent
of the Administrative Agent and the Lenders, such Obligor shall not sell
Inventory on a consignment basis nor retain any lien or security interest in any
sold Inventory. Upon the sale, exchange, or other disposition of Inventory, as
herein provided, the security interest in the Inventory provided for herein
shall, without break in continuity and without further formality or act,
continue in, and attach to, all proceeds, including any instruments for the
payment of money, Trade Accounts Receivable, documents of title, shipping
documents, chattel paper and all other cash and non-cash proceeds of such sale,
exchange or disposition. As to any such sale, exchange or other disposition, the
Administrative Agent shall have all of the rights of an unpaid seller, including
stoppage in transit, replevin, rescission and reclamation. Each of the Borrowers
shall immediately forward any and all proceeds of any sale or other disposition
of Inventory to the Depository Account, and hold any such proceeds (including
any notes and instruments), in trust for the Administrative Agent on behalf of
the Lenders pending delivery to the Administrative Agent. Irrespective of the
Administrative Agent's perfection status in any and all of the General
Intangibles, including, without limitations, any Patents, Trademarks, Copyrights
or licenses with respect thereto, each of the Obligors hereby irrevocably grants
the Administrative Agent on behalf of the Agents, the Issuing Bank and the
Lenders a royalty free license to sell, or otherwise dispose or transfer, in
accordance with Paragraph 11.2 of Section 11 of this Agreement, and the
applicable terms hereof, of any of the Inventory upon the occurrence of an Event
of Default which has not been waived in writing by the Administrative Agent.
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(b) General Intangibles. Each of the Obligors shall maintain its rights
in, and the value of, its General Intangibles in the ordinary course of its
business, including, without limitation, by making timely payment with respect
to any applicable licensed rights, except for Permitted Asset Transfers. Each of
the Obligors shall deliver to the Administrative Agent, and/or shall cause the
appropriate party to deliver to the Administrative Agent, from time to time such
pledge or security agreements with respect to General Intangibles (now or
hereafter acquired) of such Obligor as the Administrative Agent shall (except as
to Excluded Property) require to obtain valid (and, subject to any Permitted
Encumbrance with priority) first liens thereon. In furtherance of the foregoing,
each of the Obligors shall provide timely notice to the Administrative Agent of
any additional Patents, Trademarks, tradenames, service marks, Copyrights, brand
names, trade names, logos and other trade designations acquired or applied for
by such Obligor subsequent to the Initial Closing Date and each of the Obligors
shall execute such documentation as the Administrative Agent or the Required
Revolving Facility Lenders may reasonably require to obtain and perfect the
Administrative Agent's lien thereon. Each of the Obligors hereby irrevocably
grants to the Administrative Agent on behalf of the Agents, the Issuing Bank and
the Lenders a royalty-free, non-exclusive license in the General Intangibles,
including tradenames, Trademarks, Copyrights, Patents, licenses, and any other
proprietary and intellectual property rights and any and all right, title and
interest in any of the foregoing, for the sole purpose, upon the occurrence of
an Event of Default, of the right to: (i) advertise for sale and sell or
transfer any Inventory bearing any of the General Intangibles, and (ii) make,
assemble, prepare for sale or complete, or cause others to do so, any applicable
raw materials or Inventory bearing any of the General Intangibles, including use
of the Equipment and Real Estate for the purpose of completing the manufacture
of unfinished goods, raw materials or work-in-process comprising Inventory, and
apply the proceeds thereof to the Obligations (in the case of a Borrower) or the
Guaranty Obligations (in the case of a Guarantor) hereunder, all as further set
forth in this Agreement and irrespective of the Administrative Agent's lien and
perfection in any General Intangibles. Notwithstanding any of the foregoing, an
Obligor may, in the ordinary course of its business, abandon any of its rights,
title and interest in certain Trademarks, Copyrights, Patents, licenses or any
other proprietary or intellectual property rights (collectively, the "IP
Interest") if such IP Interest has ceased to be useful to such Obligor;
provided, that any abandonment of an Obligor's IP Interest which is (x)
identified in Schedule A or Schedule B to the IP Security Agreement or (y) is
necessary for the operation of any material portion of any Obligor's business is
subject to the delivery by such Obligor with the IP Interest to the
Administrative Agent and the Lenders of a certificate of an Authorized Officer
of such Obligor (which certificate shall be in form and substance satisfactory
to the Administrative Agent and the Lenders) explaining the circumstances
causing the applicable IP interest to cease to be useful and; provided further
that no such abandonment shall be allowed with respect to any IP Interest
referred to in clause (x) or clause (y) of the preceding proviso which is
maintainable merely by the payment of maintenance fees.
(c) Equipment. Each of the Obligors shall use the Equipment owned by
such Obligor only in the business of the Obligors and such Equipment shall not
be held for sale or lease, or removed from their premises, or otherwise disposed
of by any Obligors except for Permitted Asset Transfers. Each of the Obligors
shall, at such Obligor's own cost and expense, keep the Equipment in as good and
substantial repair and condition as the same is now or at the time the lien and
security interest granted herein shall attach thereto, reasonable wear and tear
excepted, making any and all repairs and replacements when and where necessary.
Each of the
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Obligors shall safeguard, protect and hold all Equipment in accordance with the
terms hereof and subject to the Administrative Agent's security interest. The
proceeds of any Permitted Asset Transfer of Equipment shall be held in trust by
the Obligors for the Administrative Agent and shall be immediately delivered to
the Administrative Agent by deposit to the Depository Account designated by the
Administrative Agent, except that the Obligors may retain and use such proceeds
to purchase forthwith replacement Equipment which the Obligors determine in
their reasonable business judgment to have a collateral value at least equal to
the Equipment so disposed of or sold; provided, however, that the aforesaid
right shall not apply to the proceeds of sale of Equipment by any Borrower to
any Participating Customer and shall automatically cease upon the occurrence of
a Default or an Event of Default which is not waived in writing by the
Administrative Agent. Upon the sale, exchange, or other disposition of the
Equipment, as herein provided, the security interest provided for herein shall,
without break in continuity and without further formality or act, continue in,
and attach to, all proceeds, including any instruments for the payment of money,
Accounts, documents of title, shipping documents, chattel paper and all other
cash and non-cash proceeds of such sale, exchange or disposition. As to any such
sale, exchange or other disposition, the Administrative Agent and the Lenders
shall have all of the rights of an unpaid seller, including stoppage in transit,
replevin, rescission and reclamation.
(d) Pledged Stock and Pledged Notes. Each of the Obligors hereby
confirms that, if after the date of this Agreement it obtains any Pledged Stock
or Pledged Notes, it shall promptly give notice to that effect to the
Administrative Agent and take all such action with respect to such Pledged Stock
or Pledged Notes as it would be required to take if it were a party to the
Pledge Agreement referred to in the Pre-Petition Credit Agreement. Without
limiting the foregoing, such Obligor shall deliver, or cause to be delivered,
all such Pledged Stock or Pledged Notes to the Administrative Agent in the
manner contemplated in that Pledge Agreement and, prior to such delivery, shall
hold any such stock in trust for the Administrative Agent. In addition, the
following shall apply with respect to the Pledged Stock and the Pledged Notes:
(i) Unless and until an Event of Default shall have occurred and be
continuing:
(A) Each Obligor shall be entitled to exercise any and all voting
and/or other consensual rights and powers inuring to an owner of such
Collateral or any part thereof for any purpose; provided, however, that
such Obligor will not be entitled to exercise any such right if the
result thereof could reasonably be expected to adversely affect the
rights inuring to a holder of the such Collateral, the Administrative
Agent's rights and remedies or the rights and remedies of any Agent,
the Issuing Bank or any Lender under this Agreement or any other Loan
Document or your ability or that of any Agent, the Issuing Bank or any
Lender to exercise the same.
(B) The Administrative Agent will execute and deliver to each Obligor
that owns any such Pledged Stock or Pledged Notes, or cause to be
executed and delivered to such Obligor, all such proxies, powers of
attorney and other instruments as such Obligor may reasonably request
for the purpose of enabling such Obligor to exercise the voting and/or
consensual rights and powers it is entitled to exercise pursuant to
subparagraph (i) above and to receive the cash dividends it is entitled
to receive pursuant to subparagraph (ii) below.
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(ii) Each Obligor shall be entitled to receive and retain any and all
cash dividends, interest and principal paid on the Pledged Stock and
Pledged Notes to the extent and only to the extent that such cash
dividends, interest and principal are permitted by, and otherwise paid
in accordance with, the terms and conditions of this Agreement, the
other Loan Documents and applicable laws. All noncash dividends,
interest and principal, and all dividends, interest and principal paid
or payable in cash or otherwise in connection with a partial or total
liquidation or dissolution, return of capital, capital surplus or
paid-in surplus, and all other distributions (other than distributions
referred to in the preceding sentence) made on or in respect of Pledged
Stock or Pledged Notes, whether paid or payable in cash or otherwise,
whether resulting from a subdivision, combination or reclassification
of the outstanding capital stock of the issuer of any such Collateral
or received in exchange for any such Collateral or any part thereof, or
in redemption thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a
party or otherwise, shall be and become part of the Collateral, and, if
received by any Obligor, shall not be commingled by such Obligor with
any of its other funds or property but shall be held separate and apart
therefrom, shall be held in trust for the benefit of the Administrative
Agent (for the benefit of the Agents, the Issuing Bank and the Lenders)
the Beneficiaries and shall be forthwith delivered to the
Administrative Agent by such Obligor in the same form as so received
(with any necessary endorsement or instrument of transfer or assignment
executed in blank).
(C) Upon the occurrence and during the continuance of an Event of
Default, all rights of any Obligor to dividends, interest or principal
that such Obligor is authorized to receive pursuant to paragraph
(B)(ii) above shall cease, and all such rights shall thereupon become
vested in the Administrative Agent, and the Administrative Agent shall
have the sole and exclusive right and authority to receive and retain
such dividends, interest or principal. All dividends, interest or
principal received by an Obligor contrary to the provisions of this
paragraph shall be held in trust for the benefit of the Administrative
Agent (for the benefit of the Agents, the Issuing Bank and the
Lenders), shall be segregated from other property or funds of such
Obligor and shall be forthwith delivered to the Administrative Agent by
such Obligor upon demand in the same form as so received (with any
necessary endorsement or instrument of transfer or assignment executed
in blank). Any and all money and other property paid over to or
received by the Administrative Agent pursuant to the provisions of this
paragraph shall be retained by the Administrative Agent in an account
to be established by it upon receipt of such money or other property
and may be applied in accordance with the provisions of this Agreement
but the Administrative Agent shall not be required to segregate such
money or other property from other Collateral or have any trust or
other fiduciary responsibility in respect thereof.
(D) Upon the occurrence and during the continuance of an Event of
Default, all rights of any Obligor to exercise the voting and
consensual rights and powers it is entitled to exercise pursuant to
subparagraph (i)(A) of this provision, and the Administrative Agent's
obligations under paragraph (i)(B) of this provision, shall cease, and
all such rights shall thereupon become vested in the Administrative
Agent, and it shall have the right and authority to exercise such
voting and consensual rights and powers, in accordance with the terms
of this Agreement.
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(iii) Further, each Obligor hereby expressly grants to the
Administrative Agent the right and irrevocable proxy, in the
circumstances contemplated in subparagraph (ii)(D), to vote or exercise
any other consensual rights a holder of Pledged Stock or Pledged Notes
may have for any purposes as the Administrative Agent in its sole
discretion (after consultation with the Lenders) deems advisable, and
to otherwise exercise as to such Collateral, all rights, powers and
remedies as the owner thereof. Each Obligor that is organized and
existing under the laws of the State of Delaware, in contemplation of
Section 212(b) of the General Corporation Law of the State of Delaware,
hereby agrees that the irrevocable proxy granted to the Administrative
Agent in this Section 4 may be voted and acted upon by you for a period
of five (5) years from the date of this Agreement.
7.4 Continuing Nature of Security Interest and Rights. The rights and
security interests granted to the Administrative Agent, for the benefit of the
Agents, the Issuing Bank and the Lenders, hereunder are to continue in full
force and effect, notwithstanding the termination of this Agreement or the fact
that the Revolving Loan Accounts maintained in the Borrowers' name on the books
of the Administrative Agent may from time to time be temporarily in a credit
position, until the final payment in full to the Administrative Agent of all
Obligations and with respect to a Guarantor, all Guaranty Obligations, and the
termination of this Agreement.
7.5 Administrative Agent's Exercise of Rights and Remedies.
Notwithstanding the Administrative Agent's security interest in the Collateral
for the benefit of the Lenders, the Issuing Bank and the Agents and to the
extent that the Obligations or Guaranty Obligations (as the case may be) are now
or hereafter secured by any assets or property other than the Collateral or by
the guarantee, endorsement, assets or property of any other Person, the
Administrative Agent shall have the right, subject to any requirement of notice
provided in the Orders and pursuant to direction from the Lenders, to determine
which rights, liens, security interests or remedies the Administrative Agent
shall at any time pursue, foreclose upon, relinquish, subordinate, modify or
take any other action with respect to, without in any way modifying or affecting
any of them, or any of the Agents' and/or the Issuing Bank's or the Lenders'
rights hereunder.
7.6 Application of Credit Balances as Security; Loan Account Charges.
Any balances to the credit of the Obligors, or any one of them, and any other
property or assets of the Obligors, or any one of them, in the possession or
control of the Administrative Agent, the Issuing Bank and/or any of the Lenders
may be held by such Agent, the Issuing Bank or such Lender as security for any
Obligations or Guaranty Obligations (as the case may be) and applied in whole or
partial satisfaction of such Obligations or Guaranty Obligations (as the case
may be) when due. The liens and security interests granted herein, and any other
lien or security interest that any Agent, the Issuing Bank and/or the Lenders
may have in any other assets of the Obligors, shall secure payment and
performance of all now existing and future Obligations. The Administrative Agent
may in its discretion charge any or all of the Obligations to the Revolving Loan
Account when due.
7.7 Insurance on Collateral. (a) At the request of any Obligor, or if
any Obligor fails to maintain insurance in respect of any of the Collateral as
required by Paragraph 8.2(c) of Section 8, or fails to provide the
Administrative Agent with timely evidence, acceptable to the
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Administrative Agent, of its maintenance of such insurance coverage, the
Administrative Agent may purchase, at the Borrowers' or, in the case where such
Obligor is a Guarantor, the Guarantors', expense (as contemplated in
subparagraph (d) of this Paragraph 7.7), arrange for and acquire insurance to
protect the Administrative Agent's interests in the Collateral, but at the
Borrowers' or, in the case where such Obligor is a Guarantor, the Guarantors',
expense and without any responsibility on the Administrative Agent's part for:
(i) obtaining the insurance; (ii) the solvency of the insurance companies; (iii)
the adequacy of the coverage; or (iv) the collection of claims. Upon the
occurrence of an Event of Default which is not waived in writing by the Required
Revolving Facility Lenders, the Administrative Agent shall, subject to the
rights of any holders of Permitted Encumbrances holding claims senior to the
Administrative Agent and subject to any requirement of notice in the Orders,
have the sole right and at its option, in the name of the Administrative Agent
or the Obligors or any of them, to file claims under any insurance policies, to
receive, receipt and give acquittance for any payments that may be payable
thereunder, and to execute any and all endorsements, receipts, releases,
assignments, reassignments or other documents that may be necessary to effect
the collection, compromise or settlement of any claims under any such insurance
policies.
(b) In the event of any loss or damage by fire or other casualty,
Insurance Proceeds relating to the Obligors' or an Obligor's Inventory shall be
applied to reduce the Obligations as provided by and in accordance with
Paragraph 6.4 of Section 6 or otherwise as provided therein. Upon the occurrence
of a Default or Event of Default, such Insurance Proceeds may be applied to the
Obligations in such order as the Administrative Agent may elect.
(c) In the event any part of the Obligors' or an Obligor's Real Estate
or Equipment is damaged by fire or other casualty and the Insurance Proceeds for
such damage or other casualty is less than or equal to $100,000.00, the
Administrative Agent shall promptly apply such proceeds in accordance with
Paragraph 6.4 of Section 6. Upon the occurrence of a Default or Event of
Default, such Insurance Proceeds may be applied to the Obligations in such order
as the Administrative Agent may elect.
(d) Absent the occurrence of an Event of Default (which has not been
waived in writing by the Required Lenders), and provided that (x) the Obligors
have sufficient business interruption insurance to replace the lost profits of
any of the Obligors' facilities, and (y) the Insurance Proceeds are in excess of
$100,000.00, Harvard may request the consent of the Agents and the Lenders (by
delivering a request to the Administrative Agent) to replace, repair or restore
such Real Estate or Equipment to substantially the equivalent condition prior to
such fire or other casualty as set forth herein. If Harvard is not permitted by
the Agents or the Lenders, or cannot, elect to use the Insurance Proceeds as set
forth above, the Administrative Agent may, subject to the rights of any holders
of Permitted Encumbrances holding claims senior to the Administrative Agent,
apply the Insurance Proceeds to the payment of the Obligations in such manner
and in such order as the Required Revolving Facility Lenders may reasonably
elect.
(e) If Harvard receives the written consent of the Administrative Agent
and elects to use the Insurance Proceeds for the repair, replacement or
restoration of any Real Estate and/or Equipment, and there is then no Event of
Default, Insurance Proceeds for any such loss in excess of $100,000.00 on
Equipment and/or Real Estate will be applied to the reduction of the Revolving
Loans in accordance with and pursuant to Paragraph 6.4 of Section 6, and the
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Administrative Agent will set up an Availability Reserve for an amount equal to
such Insurance Proceeds. The Availability Reserve will be reduced
dollar-for-dollar upon receipt of evidence satisfactory to the Administrative
Agent of payment for or on account of the price for the replacement, repair or
restoration of Equipment and/or the Real Estate and disbursements in connection
therewith provided that the delivery or completion date, as applicable, is
determined by the Required Lender, in their reasonable business judgment, to be
sufficiently imminent to warrant the reduction and the Junior Lien Lender has
agreed with that determination. Prior to the commencement of any material
restoration, repair or replacement of Real Estate, Harvard shall provide the
Administrative Agent with a restoration plan and a total budget certified by an
independent third party experienced in construction costing. If there are
insufficient Insurance Proceeds to cover the cost of restoration as so
determined, the Borrowers and, if a Guarantor has an interest in the relevant
Real Estate and/or Equipment, such Guarantor shall be responsible for the amount
of any such insufficiency, prior to the commencement of restoration and shall
demonstrate evidence of such before the reserve will be reduced. Completion of
restoration shall be evidenced by a final, unqualified certification of the
design architect employed, if any; an unconditional Certificate of Occupancy, if
applicable; such other certification as may be required by law; or if none of
the above is applicable, a written good faith determination of completion by
Harvard (herein collectively the "Completion"). Upon Completion, any remaining
reserve as established hereunder will be automatically released.
(f) Any insurance acquired by the Administrative Agent as contemplated
in subparagraph (a) of this Paragraph 7.7 may, but need not, protect the
Obligors' respective interests in the Collateral, and therefore the Obligors
acknowledge that such insurance may not pay claims which the Obligors may have
with respect to the Collateral or pay any claim which may be made against the
Obligors in connection with the Collateral. In the event the Administrative
Agent purchases, obtains or acquires insurance covering all or any portion of
the Collateral, the Borrowers and, if a Guarantor has an interest in such
Collateral, such Guarantor, shall be responsible for all of the applicable costs
of such insurance, including premiums, interest (at the applicable Citibank Base
Rate for Revolving Loans set forth in Paragraph 9.1 of Section 9 hereof), fees
and any other charges with respect thereto, until the effective date of the
cancellation or the expiration of such insurance. The Administrative Agent may
charge all of such premiums, fees, costs, interest and other charges to the
Borrowers' Revolving Loan Accounts. Each of the Borrowers hereby acknowledges
that the costs of the premiums of any insurance acquired by the Administrative
Agent may exceed the costs of insurance which the Borrowers may be able to
purchase on their own. In the event that the Administrative Agent purchases such
insurance, the Administrative Agent will notify Harvard of said purchase within
thirty (30) days of the date of such purchase. If, within thirty (30) days after
the date of such notice, Harvard provides the Administrative Agent with proof
that the Obligors had the insurance coverage required pursuant to Paragraph
8.2(c) (in form and substance satisfactory to the Administrative Agent) as of
the date on which the Administrative Agent purchased insurance and the Borrowers
continued at all times to have such insurance, then the Administrative Agent
agrees to cancel the insurance purchased by the Administrative Agent and credit
the Borrowers' Revolving Loan Account with the amount of all costs, interest and
other charges associated with any insurance purchased by the Administrative
Agent, including with any amounts previously charged to any Revolving Loan
Accounts.
7.8 Taxes Relating to Collateral. If, notwithstanding the Obligors'
covenants regarding the payment of post-petition Taxes, in Paragraph 8.2(d), any
lien shall be filed or
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claimed (i) for post-petition Taxes due the United States or Canada or any state
or province of either such jurisdiction, or (ii) which in the Administrative
Agent's opinion might create a valid obligation having priority over the rights
granted to the Administrative Agent herein (exclusive of Real Estate), such lien
shall not be deemed to be a Permitted Encumbrance hereunder and the Obligors
(and, if such lien relates to any asset of a Guarantor, such Guarantor) shall
immediately pay such post-petition Taxes and remove the lien of record. If the
Borrowers or any one of them or, if applicable, a Guarantor, fails to do so
promptly, then the Administrative Agent may (or, upon direction of the Required
Revolving Facility Lenders, shall) do either of the following, in its
discretion: (a) create an Availability Reserve in such amount as it may deem
appropriate in its business judgement, or (b) upon the occurrence of a Default
or Event of Default, imminent risk of seizure, filing of any priority lien,
forfeiture, or sale of the Collateral, pay such post-petition Taxes on the
Obligors' or such Guarantor's behalf, and the amount thereof shall be an
Obligation (in the case of a Borrower) or a Guaranty Obligation (in the case of
a Guarantor) secured hereby and due on demand.
7.9 Mortgages. This Agreement and the obligation of the Obligors to
perform all of their covenants and obligations hereunder are further secured by
the Real Estate and rights and interests of the Obligors therein.
Each of the Obligors shall give to the Administrative Agent from time to time,
such mortgage(s), deed(s) of trust or assignment(s) on real estate acquired by
such Obligor after the date hereof as the Administrative Agent or the Required
Revolving Facility Lenders shall require to obtain for the Administrative Agent
a valid first lien thereon, for the benefit of the Agents, the Issuing Bank and
the Lenders, subject only to Permitted Encumbrances, subject as to priority only
to the Carve-Out and the United States Trustees Fees, and to those exceptions of
title as set forth in future title insurance policies that are satisfactory to
the Administrative Agent and the Required Revolving Facility Lenders. Each of
the Guarantors hereby confirms the continuing effect of all such mortgage(s),
deed(s) of trust or assignment(s) on real estate which constitute Pre-Petition
Security Documents.
7.10 Plan Confirmation. Each Borrower agrees that (i) its obligations
hereunder shall not be discharged by the entry of an order confirming a Plan of
Reorganization (and each Borrower pursuant to Section 1141(d)(4) of the
Bankruptcy Code, hereby waives any such discharge) and (ii) the Super-Priority
Claim granted pursuant to the Orders, and as described herein and the liens
granted pursuant to the Orders, the Loan Documents and as described herein shall
not be affected in any manner by the entry of an order confirming a Plan of
Reorganization.
7.11 Modifications. (a) The Liens, lien priority, administrative
priorities and other rights and remedies granted to the Administrative Agent for
the benefit of the Agents, the Issuing Bank and the Lenders pursuant to this
Agreement, the Interim Order and/or the Final Order (specifically, including,
but not limited to, the existence, perfection and priority of the Liens provided
herein and therein and the administrative super-priority provided herein and
therein) shall not be modified, altered or impaired in any manner by any other
financing or extension of credit or incurrence of Indebtedness by any of the
Obligors (pursuant to Section 364 of the Bankruptcy Code or otherwise), or by
any dismissal or conversion of the Cases, or by any other act or omission
whatsoever. Without limitation, notwithstanding any such order, financing,
extension, incurrence, dismissal, conversion, act or omission:
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(i) except for the Carve-Out and the United States Trustees Fees
having priority over the Obligations, no costs or expenses of
administration which have been or may be incurred in any of the Cases
or any conversion of the same or in any other proceedings related
thereto, and no priority claims, are or will be prior to or on a parity
with any claim of the Administrative Agent (or any other Agent, or the
Issuing Bank or any of the Lenders) against the Obligors in respect of
any Obligation; and
(ii) the liens and security interests granted herein shall
constitute valid and perfected first priority liens and security
interests (subject, as to priority, only to (A) purchase money liens in
accordance with Sections 364(c)(2) and (3) of the Bankruptcy Code (but
the foregoing shall not be interpreted to provide that any such
purchase money lien is a Permitted Encumbrance), and (B) the Carve-Out
and the United States Trustees Fees, and shall be prior to all other
liens and security interests, now existing or hereafter arising, in
favor of any other creditor or any other Person whatsoever except for
the Carve-Out and the United States Trustees Fees.
(b) Notwithstanding any failure on the part of any Obligor or the
Administrative Agent or the Lenders to perfect, maintain, protect or enforce the
liens and security interests in the Collateral granted hereunder, the Interim
Order and the Final Order (when entered) shall automatically, and without
further action by any Person, perfect such liens and security interests against
the Collateral.
SECTION 8. REPRESENTATIONS; WARRANTIES AND COVENANTS
8.1 Representations and Warranties. To induce the Agents, the Issuing
Bank and the Lenders to enter into this Agreement and make the Loans, each of
the Obligors hereby makes the representations and warranties set forth in each
of the following subparagraphs of this Paragraph 8.1 to the Agents, the Lenders
and the Issuing Bank.
(a) Corporate Status. Each Obligor (a) is a duly organized and validly
existing corporation or limited liability company in good standing under the
laws of the jurisdiction of its organization; (b) has the requisite corporate or
other organizational power and authority and has obtained all requisite
governmental licenses, authorizations, consents and approvals to own and operate
its property and assets and to transact the business in which it is engaged and
presently proposes to engage, except for those governmental licenses,
authorizations, consents or approvals the failure of which to be so obtained
would not have a Material Adverse Effect; and (c) is duly qualified and is
authorized to carry on its business as now being conducted and each is duly
qualified to do business and is in good standing in each jurisdiction in which
the character of the properties owned or leased by it therein or in which the
transaction of its business makes such qualification necessary and where the
failure to be so qualified would have a Material Adverse Effect.
(b) Corporate Power and Authority. Each Obligor has the requisite
corporate or other organizational power and authority to execute, deliver and
carry out the terms and provisions of the Loan Documents to which it is a party
and has taken all necessary corporate or other organizational action to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party.
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(c) No Violation. Upon entry of the Bankruptcy Court of the Interim
Order (or the Final Order, when applicable) the execution, delivery and
performance by each Obligor of each Loan Document to which it is or is to be a
party, and the consummation of the transactions contemplated by the Loan
Documents, are within such Obligor's powers, have been duly authorized by all
necessary corporate or other action and are authorized by the Interim Order or
the Final Order, as applicable, and do not (a) contravene such Obligor's charter
or bylaws, (b) violate any law, rule, regulation (including, without limitation,
Regulation U and X of the Board of Governors of the Federal Reserve System),
order, writ, judgment, injunction, decree, determination or award, (c) conflict
with or result in the breach of, or constitute a default or require any payment
to be made under, any contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument binding on or affecting any Obligor or any of
its properties entered into after the Filing Date, except where such conflict,
breach, default or payment would not be reasonably likely to have a Material
Adverse Effect, or (d) except for the Liens created under the Loan Documents,
the Interim Order, and the Final Order, result in or require the creation or
imposition of any Lien upon or with respect to any of the properties of any
Obligor. No Obligor is in violation of any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or in breach of any
such contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument, the violation or breach of which could be reasonably likely to
have a Material Adverse Effect.
(d) Enforceable Obligation. Upon the entry of the Interim Order (or
Final Order, when applicable), this Agreement has been, and each other Loan
Document when delivered hereunder will have been, duly executed and delivered by
each Obligor party thereto. Upon the entry of the Interim Order (or Final Order,
when applicable), this Agreement is, and each other Loan Document when delivered
hereunder will be, the legal, valid and binding obligation of each Obligor party
thereto, enforceable against such Obligor in accordance with its terms and the
Interim Order or the Final Order as applicable.
(e) Collateral and Related Matters.
(i) Except for the Permitted Encumbrances, such Obligor is, or will be,
at the time additional Collateral is acquired by it, the absolute owner of the
Collateral owned by such Obligor, with full right to pledge, sell, consign,
transfer and create a security interest therein, free and clear of any and
claims or liens in favor of others.
(ii) The Equipment constituting Collateral does not comprise a part of
such Obligor's Inventory.
(iii) Such Obligor possesses all General Intangibles and rights thereto
necessary to conduct its business as conducted as of the Initial Closing Date.
(f) Litigation. There are no actions, judgments, suits or proceedings
pending or, to the Borrowers' knowledge, threatened with respect to any Obligor
as to which there is a reasonable likelihood of a Material Adverse Effect or
(ii) purports to affect the legality, validity or enforceability of any Loan
Document or the consummation of the transactions contemplated by the Loan
Documents other than the Orders.
66
(g) No Default. Since the Filing Date, no Default or Event of Default
has occurred.
(h) Use of Proceeds.
(i) The proceeds of Loans and Letters of Credit will be used
solely as specified in Paragraph 8.2(o) of Section 8 of this Agreement,
subject to the limitations in Paragraph 8.2(r) of Section 8 and
Paragraph 11.2(f) of Section 11 of this Agreement, and in compliance
with the Budget (as revised pursuant to Paragraph 2.2(k) of Section 2
of this Agreement, if applicable).
(ii) Neither the making of any Loan hereunder, nor the use of the
proceeds thereof, will violate or be inconsistent with the provisions
of Regulation U or X of the Board of Governors of the Federal Reserve
System.
(i) Governmental Approvals. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any third party or any foreign or domestic governmental or public
body or authority, or by any subdivision thereof (other than those orders,
consents, approvals, licenses, authorizations or validations which, if not
obtained or made, would not reasonably be expected to have a Material Adverse
Effect or which have previously been obtained or made), is required to authorize
or is required in connection with (a) the due execution, delivery, recordation,
filing or performance by any Obligor of any Loan Document to which it is or is
to be a party, or for the consummation of the transactions contemplated by the
Loan Documents, (b) the grant by any Obligor of the Liens granted by it pursuant
hereto, (c) the perfection or maintenance of the Liens created hereunder
(including the first priority nature thereof), or (d) the exercise by the
Administrative Agent or any Lender of its rights under the Loan Documents or the
remedies in respect of the Collateral pursuant hereto, except, in each case, for
the entry by the Bankruptcy Court of the Interim Order or the Final Order, as
applicable. As of the Initial Closing Date, there does not exist any judgment,
order, injunction or other restraint issued or filed with respect to the
transactions contemplated hereby and by the other Loan Documents.
(j) Regulatory Status. Neither such Obligor nor any of its subsidiaries
is (i) an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, or (ii) subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, each as
amended, or any foreign, federal, state or local statute or regulation limiting
its ability to incur indebtedness for money borrowed as contemplated hereby.
(k) Intellectual Property. Except as set forth on Schedule 8: (i) such
Obligor and each of its subsidiaries owns, or is licensed to use, all
Trademarks, Copyrights, technology, know how and processes necessary for the
conduct of its business as currently conducted (the "Intellectual Property")
except for those the failure to own or license which could not have a Material
Adverse Effect; (ii) no claim has been asserted in writing (or is otherwise
known to such Obligor to exist) and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does such Obligor know of
any valid basis for any such claim; and (iii) the use of such Intellectual
Property by such Obligor and its subsidiaries does not infringe the rights of
any Person except for such claims and infringements that, in the aggregate do
not have a Material
67
Adverse Effect. The Obligors, however, make no representations or warranties
regarding the Intellectual Property identified in the schedules of Intellectual
Property entitled "Schedule Foreign Patents" and "Schedule Foreign Trademarks"
delivered pursuant to Paragraph 2.1(l) of Section 2 of this Financing Agreement.
(l) Budget. The Budget and the financial projections referred to in
Paragraph 2.1(i) of Section 2 of this Agreement (as revised, if applicable,
pursuant to Paragraph 2.2(k) of Section 2 of this Agreement) have been (or when
delivered as provided herein, will have been) prepared in good faith on the
basis of the assumptions stated therein, which assumptions were fair in light of
the conditions existing at the time of delivery of the Budget and such
projections, and represented, at the time of delivery, the Obligor's best
estimate of their future financial performance.
(m) Material Adverse Change. Since the Filing Date, there has been no
Material Adverse Change (other than the commencement of the Cases).
(n) Capital Stock. Schedule 2 identifies (i) all capital stock of each
Obligor, other than Harvard and of the subsidiaries of each Obligor, the
respective jurisdictions in which they are organized and how and by whom such
stock is owned, and (ii) all of the authorized capital stock of Harvard, by
class, and, as of the Initial Closing Date, the number of shares of each such
class that are issued and outstanding. All such shares of the capital stock of
any Obligor which constitutes Pledged Stock have been validly issued and, as of
the Initial Closing Date, are fully paid, non assessable shares free of
preemptive rights or, other similar rights suffered or permitted by such Obligor
other than as described on Schedule 2, as of the Initial Closing Date, (A) there
are no subscriptions, options, warrants, rights to subscribe for, or calls or
commitments or similar rights relating to any shares of such Obligor's capital
stock, including any right of conversion or exchange under any outstanding
security or other instrument, and (B) such Obligor is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital stock or any security convertible into or
exchangeable for any of its capital stock. Harvard may amend Schedule 2 from
time to time to reflect any Permitted Asset Transfer, merger or liquidation
effected in accordance with the terms of this Agreement and subject to the
consent of the Junior Lien Lender.
(o) Indebtedness. Schedule 3 identifies all indebtedness for borrowed
money of such Obligor and all its subsidiaries which is outstanding on the date
of this Financing Agreement as well as all other Indebtedness of such Obligor
and its subsidiaries which is secured by any lien or other encumbrance on any of
the property of any of such Obligor or any of its Subsidiaries.
(p) True and Complete Disclosure. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of any Obligor
in writing to the Administrative Agent, any Lender or the Bankruptcy Court
(including, without limitation, all information contained in the Loan Documents)
for purposes of or in connection with this Agreement or any transaction
contemplated herein is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of any such Persons in writing to the
Administrative Agent, any Lender or the Bankruptcy Court will be, true and
accurate in all material respects on the date as of which such information is
dated or certified and not
68
incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided. For purposes of this
Section 8.1, the Budget and the financial projections referred to in Paragraph
2.1(i) of Section 2 of this Agreement shall not constitute "factual
information."
(q) Guarantors. Schedule 9 hereto lists each Guarantor, indicating (a)
its jurisdiction of incorporation or formation and (b) its owners (by holder and
percentage interest).
(r) Compliance with Laws, etc. After giving effect to the Orders and
filing the Cases, each Obligor is in material compliance with all laws and
regulations in all jurisdictions in which it is presently doing business, and
each Obligor will comply with all such laws and regulations which may be imposed
in the future in jurisdictions in which it may then be doing business except to
the extent the non-compliance with such laws and regulations would not
reasonably be expected to have a Material Adverse Effect.
(s) Properties. Each Obligor has (a) good and marketable title to and
beneficial ownership of all material properties owned by it and (b) a valid,
marketable and insurable leasehold interest in all properties leased by it, free
and clear of all Liens, other than Permitted Encumbrances and tax liens which
are due but have not yet been paid as a result of the filing of the Cases. Each
Obligor or its respective Subsidiaries holds all material licenses, certificates
of occupancy or operation and similar certificates and clearances of municipal
and other authorities necessary to own and operate its properties in the manner
and for the purposes currently operated by such party.
(t) Collective Bargaining Agreements. Set forth on Schedule 10 hereto
is a list and description (including dates of termination) of all collective
bargaining or similar agreements between or applicable to any Obligor as of the
date hereof and any union, labor organization or other bargaining agent in
respect of the employees of any Obligor.
(u) Material Restrictions. No Obligor is a party to any indenture, loan
or credit agreement or any lease or other agreement or instrument or subject to
any charter or corporate restriction that would be reasonably likely to have a
Material Adverse Effect.
(v) Liens. On and after the Initial Closing Date, the provisions of the
Loan Documents and the Orders, as applicable, create in favor of the
Administrative Agent for the benefit of the Agents, the Issuing Bank and the
Lenders, a legal, valid and enforceable fully perfected Lien on and security
interest in all of the Obligors' right, title and interest in the Collateral, in
each case prior and superior in right to any Person, except for the Carve-Out
and United States Trustees Fees and as otherwise provided in the Interim Order
and the Final Order, as applicable. The Obligors are the legal and beneficial
owners of the Collateral free and clear of any Lien, except for the liens and
security interests created under the Loan Documents, the Interim Order and the
Final Order and other Permitted Encumbrances disclosed herein.
(w) Environmental Matters. Except as disclosed in Schedule 7 hereto,
such Obligor and each of its subsidiaries (i) is in compliance in all material
respects with all applicable Environmental Laws; (ii) has obtained or has taken
steps to obtain all necessary permits, consents, licenses, and other approvals
applicable under any Environmental Laws; (iii) is not
69
subject to any investigation, or any judicial or administrative proceeding,
notice, order, judgment, decree or settlement alleging or pertaining to any
violation of Environmental Laws that could result in a Material Adverse Effect;
(iv) is not subject to any claims or liabilities arising from any Environmental
Laws that could result in a Material Adverse Effect; and (v) does not have any
lien attached based on any Environmental Laws that could result in a Material
Adverse Effect. Except for certain summary reports in respect of the
environmental database research results performed in 1998 (and referenced in the
Financing Transaction Checklist, dated September 30, 1999 in connection with the
financing set forth in the Existing Credit Agreement with GECC referred to in
the Pre-Petition Credit Agreement as "Environmental Reports (done in 1998)"),
such Obligor has provided all environmental reports relating to the Real Estate
to the Lenders and the Agents or has disclosed the information in such reports
in Schedule 7.
(x) Financial Statements and Other Information. (i) Except as set forth
in Schedule 6 or reflected in financial statements delivered to the
Administrative Agent and the Lenders on or before the date of this Agreement,
(A) neither such Obligor nor any of its subsidiaries has, on the date of this
Agreement, any material obligation, contingent liability or liability for Taxes,
or any long-term lease or unusual forward or long-term exchange transaction, any
Hedging Agreement or other financial derivative which is not reflected in those
financial statements; and (B) there has been no sale, transfer or other
disposition by such Obligor or any of its subsidiaries of any material part of
its business or property other than any Permitted Asset Transfer and no purchase
or other acquisition of any business or property, including capital stock of any
other Person (other than any Borrower or Guarantor), that is material in
relation to the consolidated financial position of the Obligors at September 30,
2000, as reflected in those financial statements, except, on a date after the
date of this Agreement on which this representation is repeated or deemed
repeated or required to be true as if then made, for any other acquisition or
transfer made after the date of this Agreement which at the time was expressly
permitted in or pursuant to this Agreement and reported as required herein to
the Agents and the Lenders.
(ii) The audited consolidated and unaudited consolidating balance
sheets of such Obligor and its subsidiaries as of September 30, 2000, and the
related consolidated and consolidating statements of operations, changes in
stockholder's equity and cash flows for the fiscal year ended on that date,
copies of which have been furnished to the Administrative Agent and the Lenders,
fairly present in all material respects the consolidated financial condition of
such Obligor and its consolidated subsidiaries as at such date, and the results
of their operations and their retained earnings and cash flows for the fiscal
year then ended. All such financial statements, including the related schedules
and notes thereto relating to those financial statements, have been prepared in
accordance with GAAP applied consistently throughout the periods involved,
except as disclosed therein.
(iii) The operating forecast and cash flow projections of such Obligor
and its subsidiaries which have been furnished to the Lenders have been prepared
in good faith under the direction of Authorized Officers of such Obligor and the
relevant subsidiaries. Those forecasts and projections with respect to such
Obligor and its subsidiaries were prepared and presented in good faith based
upon facts and assumptions that such Obligor believes to have been reasonable in
light of current and foreseeable conditions, it being understood that
projections are subject to significant uncertainties and contingencies, many of
which are beyond
70
the control of such Obligor and its subsidiaries and that no assurance can be
given that the financial results set forth in those forecasts and projections
will actually be realized.
(y) ERISA. Except in each case as set forth in Schedule 6: (i) each
Plan has been and is being maintained and funded in accordance with its terms
and in material compliance with all provisions of ERISA and the Code applicable
thereto; (ii) No Obligor nor any ERISA Affiliate has incurred any liability
(other than routine liability for premiums) under Title IV of ERISA which could
reasonably be expected to have a Material Adverse Effect; (iii) No ERISA Event
has occurred, nor has any other event occurred that may result in an ERISA
Event, which could reasonably be expected to have a Material Adverse Effect;
(iv) Each Single Employer Plan has been determined by the Internal Revenue
Service to qualify under Section 401 of the Code, and to the best knowledge of
the Obligors nothing has occurred which would cause the loss of such
qualification or tax-exempt status; (v) No Single Employer Plan subject to Title
IV of ERISA has any Unfunded Pension Liability as to which any Obligor or ERISA
Affiliate is or may be liable and which could reasonably be expected to have a
Material Adverse Effect; (vi) No Plan maintained or sponsored by any Obligor or
ERISA Affiliate provides medical or other welfare benefits or extends coverage
relating to such benefits beyond the date of a participant's termination of
employment with such Obligor or ERISA Affiliate, except to the extent required
by Section 4980B of the Code or as otherwise set forth in Schedule 6 hereto;
(vii) Each Obligor and ERISA Affiliate has complied in all material respects
with the notice and continuation coverage requirements of Section 4980B of the
Code; (viii) There are no pending or, to the best knowledge of the Obligors,
threatened claims, actions or lawsuits, other than routine claims for benefits
in the usual and ordinary course, with respect to any Single Employer Plan for
which any Obligor or ERISA Affiliate may be directly or indirectly liable,
through indemnification obligations or otherwise, which could reasonably be
expected to have a Material Adverse Effect; (ix) Neither any Obligor nor any
ERISA Affiliate has transferred any Unfunded Pension Liability to an entity
other than an ERISA Affiliate or otherwise engaged in a transaction that could
be subject to Section 4069 or 4212(c) of ERISA; and (x) Each Plan that is not
subject to the laws of the United States (a "Foreign Plan") is being maintained
and funded in compliance with its terms and in compliance with any and all
provisions of the laws applicable thereto, and there are no unfunded pension or
benefit liabilities or claims or causes of action (other than routine claims for
benefits) with respect to such Foreign Plan which, in the aggregate and together
with the liabilities, claims or causes of action with respect to any other
Foreign Plans, could reasonably be expected to have a Material Adverse Effect.
(z) Taxes. Except as identified in Schedule 5, the Borrowers have filed
all federal, state and other income tax returns that, to the knowledge of the
Borrowers, are required to be filed, and have paid, to the extent consistent
with the rights and obligations of the Borrowers as debtors in possession under
the Bankruptcy Code, all taxes as shown on said returns and on all assessments
received by them to the extent that such taxes have become due, except for any
failure to file or pay that could not reasonably be expected to have a Material
Adverse Effect.
(aa) Administrative Expenses. The Obligations of the Borrowers will
constitute allowed administrative expenses in the Cases having priority over all
administrative expenses and unsecured claims against the Borrowers now existing
or hereafter arising, of any kind or nature whatsoever, including, without
limitation, all administrative expenses of the kind
71
specified in Sections 503(b), 507(b) and 546(c) of the Bankruptcy Code, subject,
as to priority, only to the Carve-Out and the United States Trustees Fees.
(bb) Inactive Guarantor. The Inactive Guarantor (i) is not currently
actively engaged in business and (ii) currently has no assets whatsoever (other
than its corporate name, corporate charter and goodwill).
8.2 Covenants. Each of the Obligors shall perform and comply with each
of the covenants and agreements set forth in following subparagraphs of this
Paragraph 8.2 (it being understood that, where the relevant covenant calls for
compliance by the Obligors on a consolidated basis, each Obligor shall take or
refrain from taking such action as is necessary to cause compliance by the
Obligors on a consolidated basis).
(a) Books and Records Relating to Collateral; Change in Location. Such
Obligor shall, and shall cause each of its subsidiaries to, maintain books and
records pertaining to the Collateral in such detail, form and scope as the
Administrative Agent shall reasonably require, shall maintain such financial
books and records as shall be required to enable it to provide the financial
statements required by Paragraph (h) of this Section 8.2 and shall cause the
books and records of such Obligor to reflect the Administrative Agent's interest
in the Accounts, Inventory and other Assets of such Obligor. Such Obligor shall
permit and cause each of its subsidiaries to permit the Agent(s) (or either of
them) or their agents and any of the Lenders who may wish to accompany the
Agent(s) (or either of them) at their own cost and expense, upon reasonable
notice to enter upon such Obligor's premises at any time during normal business
hours, and from time to time in its reasonable business judgment, for the
purpose of inspecting the Collateral and any and all records pertaining thereto,
and shall make all such books and records available in such inspections,
including any records handled or maintained for such Obligor by any other
company or entity. Such Obligor shall afford the Administrative Agent ten (10)
days' prior written notice of any (i) change in the location of any such
Collateral, other than to locations, that as of the Initial Closing Date, are
known to the Administrative Agent and at which the Administrative Agent has
fully perfected its liens thereon, (ii) change in the location of its chief
executive office/chief place of business from its address specified for notices
herein, or (iii) change of its name (including the adoption of any new trade
name), jurisdiction of incorporation, identity or corporate structure. In
addition, such Obligor shall not make any of the changes described in this
Paragraph 8.2(a) of this Section 8 until such filings and other measures as may
be required under applicable law to continue uninterrupted the perfected lien or
security interest created hereunder shall have been taken, and until the
Administrative Agent shall have received such opinions of counsel with respect
thereto as it may have reasonably requested. Such Obligor shall also advise the
Administrative Agent promptly, in sufficient detail, of any material adverse
change relating to the type, quantity or quality of the Collateral or on the
security interests granted to the Administrative Agent herein or in any other
Loan Document.
(b) Information Regarding Collateral. Such Obligor shall, and shall
cause each of its subsidiaries to, execute and deliver to the Administrative
Agent, from time to time, solely for the Administrative Agent's convenience in
maintaining a record of the Collateral, such written statements, and schedules
as the Administrative Agent may reasonably require, designating, identifying or
describing the Collateral. Any failure, however, to promptly give the
Administrative Agent such statements, or schedules shall not affect, diminish,
modify or
72
otherwise limit the Administrative Agent's and/or the Lenders' security
interests in the Collateral.
(c) Insurance. Such Obligor shall maintain insurance on its Real
Estate, Equipment and Inventory under such policies of insurance, with such
insurance companies, in such reasonable amounts and covering such insurable
risks as are at all times reasonably satisfactory to the Agents. All policies
covering the Real Estate, Equipment and Inventory of such Obligor shall, subject
to the rights of any holders of Permitted Encumbrances holding claims senior to
the Administrative Agent, be made payable to the Administrative Agent on behalf
of the Lenders, in case of loss, under a standard non-contributory "mortgagee",
"lender" or "secured party" clause and are to contain such other provisions as
the Administrative Agent may require to fully protect the Administrative Agent's
interest in the Real Estate, Inventory and Equipment and to any payments to be
made under such policies. All original policies or true copies thereof shall be
delivered by such Obligor to the Administrative Agent, premium prepaid, with the
loss payable endorsement in the Administrative Agent's favor, and shall provide
for not less than thirty (30) days' prior written notice to the Administrative
Agent of the exercise of any right of cancellation.
(d) Taxes. Such Obligor shall pay, when due, all post-petition Taxes,
including sales taxes, assessments, claims and other charges lawfully levied or
assessed upon such Obligor or the Collateral unless such post-petition Taxes are
being diligently contested in good faith by the applicable Obligor by
appropriate proceedings and adequate reserves are established in accordance with
GAAP.
(e) Compliance with Requirements of Law. Such Obligor: (i) shall comply
with all acts, rules, regulations and orders of any legislative, administrative
or judicial body or official and other Requirements of Law, which the failure to
comply with would have a Material Adverse Effect, provided that such Obligor may
contest any acts, rules, regulations, orders and directions of such bodies or
officials in any reasonable manner which will not, in the Administrative Agent's
reasonable opinion, materially and adversely effect the Administrative Agent's
and/or another Agent's, or the Issuing Bank's or any Lender's rights or priority
in the Collateral; (ii) shall comply with all Environmental Laws, applicable to
the Collateral, the ownership and/or use of their real property and operation of
their business, which the failure to comply with would have a material adverse
effect on the Collateral, or any material part thereof, or on the operation of
the business of such Obligor or any other Obligor; and (iii) shall not be deemed
to have breached any provision of this Paragraph 8.2(e) if (x) the failure to
comply with the requirements of this Paragraph 8.2(e) resulted from good faith
error or innocent omission, (y) the Obligors promptly commence and diligently
pursue a cure of such breach, and (z) such failure is cured within (30) days
following such Obligor's receipt of notice of such failure, or if such failure
cannot in good faith be cured within thirty (30) days, then such breach is cured
within a reasonable time frame based upon the extent and nature of the breach
and the necessary remediation, and in conformity with any applicable consent
order, consensual agreement and applicable law.
(f) Consultant. The Lenders, in their sole discretion, may require that
Harvard retain a duly qualified consultant or crisis manager (the "Consultant"),
which shall be mutually acceptable to the Lenders, Harvard and the Junior Lien
Lender, and Harvard shall co-operate fully with the Consultant or any
pre-existing consultant providing services on behalf of the
73
Lenders (the "Pre-Existing Consultant") in connection with the exercise of the
Consultant's or the Pre-Existing Consultant's professional duties. For purposes
of this Agreement, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ shall constitute a Consultant acceptable to
the Lenders, Harvard and the Junior Lien Lender.
(g) Budget. If the Termination Date is extended to June 30, 2002 as
provided for in the definition of such term, the Borrowers shall adhere in all
material respects to the projections itemized in the Budget (as revised pursuant
to Paragraph 2.2(k) of Section 2 of this Agreement, if applicable).
(h) Financial Information. The Obligors (or, in the case of clauses (i)
and (ii), Harvard, and, in the case of clause (vi), ▇▇▇▇▇-Albion or Harvard, as
agent for ▇▇▇▇▇-Albion) shall furnish to the Agents and each Lender, at the
times indicated, each of the following:
(i) within eight (8) Business Days after the end of each Fiscal
Month, (x) an updated thirteen week statement of cash flow showing
actual cash flow for the preceding five weeks and projected cash flow
for the next eight weeks, together with a certification as to all such
matters prepared by an Authorized Officer of Harvard and (y) a
statement of EBITDA with respect to Trim Trends and the Trim Trends
Division, each certified by an Authorized Officer of the Obligors (or
relevant Obligor)
(ii) within thirty (30) days after the end of each Fiscal Month
(x) a Consolidated Balance Sheet as at the end of such period and (y)
consolidated and consolidating statements of profit and loss, cash flow
and surplus of the Obligors and their subsidiaries for such period;
(iii) from time to time, such further information regarding the
business affairs and financial condition of the Obligors and/or any
subsidiaries thereof as the Agents may reasonably request;
(iv) within fifteen (15) days after the end of each Fiscal Month,
a statement setting forth each of the following for the Obligors: (i)
all Accounts (including and distinguishing Accounts that are not
Eligible Accounts Receivable); (ii) accounts payable; and (iii)
Inventory (including and distinguishing Inventory that is not Eligible
Inventory), together with a certification as to all such matters
prepared by an Authorized Officer of Harvard;
(v) on the second Business Day of each week and at such other
times as the Administrative Agent shall request, a Borrowing Base
Certificate compared to the Budget and showing (x) Eligible Accounts as
of the close of business on the last Business Day of the preceding
week, and (y) Eligible Inventory as of the close of business on the
last Business Day of the preceding month and as of such other times as
the Administrative Agent in its reasonable business judgment shall
require and (z) the total amount of each component of the Carve-Out,
specifying Professional Claims (as defined in the definition of the
term "Carve-Out") that have been incurred (to the extent known to
Harvard) and, where applicable, paid; provided, however, that upon the
occurrence of any change in the information provided on the most
recently provided Borrowing Base Certificate which is
74
inconsistent with the Budget or which could have or could reasonably be
expected to have a Material Adverse Effect, Harvard shall promptly
provide to the Administrative Agent a new Borrowing Base Certificate
reflecting such change;
(vi) (A) on the first Business Day after the First Amendment
Date, a report on the funds received by ▇▇▇▇▇-Albion under the
Visteon/American Axle Participating Customer Agreement, setting forth
in reasonable detail both the amounts received and any amounts due
under that agreement at or immediately after execution of that
agreement which have not been received; (B) simultaneously with their
delivery to the Customers under that agreement, a copy of each Weekly
Proposed Budget (as defined therein); (C) on each Tuesday after the
First Amendment Date, a report setting forth the amount of funds
supplied to ▇▇▇▇▇-Albion pursuant to the Visteon/American Axle
Participating Customer Agreement during the relevant week and
identifying any shortfall between that amount and the amount provided
for in the Weekly Proposed Budget in respect of which the funds were
supplied as well as any further amount received under that agreement on
account of any other Weekly Proposed Budget since the preceding report
submitted pursuant to this clause; (D) a report of each further amount
received, and each reconciliation made, under that agreement on account
of Pre-Petition Payables (as defined therein), identifying the date of
receipt and whether any dispute continues to exist regarding any such
Pre-Petition Payables, promptly after receipt of such amount; (E) a
report of each other amount (including the Purchase Price (as defined
therein)) if any received under that agreement from time to time,
identifying the item in respect of which the amount was received; and
(F) notice of each of the following, promptly after it occurs (with a
copy of each related notice or other communication received or given
thereunder from or to a Participating Customer): (1) failure by a
Participating Customer to confirm the final reconciliation of the
Pre-Petition Payables as and when required in that agreement; (2) any
notice given by a Participating Customer stating that a Default under
the Access and Security Agreement referred to in the Visteon/American
Axle Participating Customer Agreement has occurred, that the Right of
Access referred to therein is being exercised or terminated; (3) any
other notice given by a Participating Customer under either agreement
referred to in clause (2); and (4) any other matter relating to that or
any other existing or proposed Participating Customer Agreement which
has a bearing on the ability of ▇▇▇▇▇-Albion to continue operating on a
cash neutral basis; and (5) the same kinds of information and such
further information relating to any Participating Customer Agreement or
Access and Security Agreement which the Administrative Agent or any
Lender may reasonably request.
Each of the financial statements which the Obligors are required to submit as
provided above in clause (i) of this Paragraph 8.2(h) must be accompanied by an
officer's certificate, signed by the President, Vice President, Controller, or
Treasurer or other Authorized Officer, pursuant to which any one such officer
must certify that: (x) the financial statement(s) present fairly, in all
material respects, the relevant Obligors' financial condition at the end of the
particular accounting period, as well as such Obligors' operating results during
such accounting period, subject to year-end audit adjustments; and (y) during
the particular accounting period: (A) there has been no Default or Event of
Default under this Agreement, provided, however, that if any such officer has
knowledge that any such Default or Event of Default, has occurred during such
period, the existence of and a detailed description of same shall be set forth
in such officer's
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certificate; (B) the Obligors have not received any notice of cancellation with
respect to their property insurance policies; (C) the Obligors have not received
any notice that could result in a material adverse effect on the value of the
Collateral taken as a whole; and (D) the exhibits attached to such financial
statement(s) constitute detailed calculations showing compliance with all
financial covenants contained in this Agreement.
(i) The Borrowers shall cause the Trim Trends Sale requirements to be
complied with as contemplated in the definition of that term.
(j) Other Negative Covenants. Such Obligor shall not, and shall not
permit its subsidiaries to do any of the following, except as otherwise
expressly permitted in this Agreement:
(i) Mortgage, assign, pledge, transfer or otherwise permit any
lien, charge, security interest, encumbrance or judgment
(whether as a result of a purchase money or title retention
transaction, or other security interest, or otherwise) to
exist on any of the Collateral or any other assets, whether
now owned or hereafter acquired, of such Obligor or
subsidiary except for the Permitted Encumbrances (which
include the Liens contemplated herein and in the other Loan
Documents, in the Pre-Petition Agreements and in the Junior
Lien Financing Documents which secure the Junior Secured
Obligations);
(ii) Enter into, or permit any subsidiary to enter into, any
Hedging Agreement (regardless of whether the purpose
thereof is to hedge), or incur or create any other
Indebtedness other than the Permitted Indebtedness;
(iii) Except for Permitted Asset Transfers, sell, lease, assign,
transfer or otherwise dispose of any of its assets or any
beneficial interest therein or, in the case of any capital
stock owned by an Obligor, in any way relinquish control
over any related voting power except pursuant to the
Pre-Petition Security Documents, this Agreement and the
Junior Lien Financing Documents;
(iv) Except with respect to the transfer of Pledged Stock of one
Obligor to another and except for a Permitted Liquidation,
merge, amalgamate, consolidate or otherwise alter or modify
their respective corporate names, principal places of
business, structure, or existence, re-incorporate or
re-organize, or enter into or engage in any operation or
activity materially different from that presently being
conducted by such Obligor (or such subsidiary), except that
(A) an Obligor may change its corporate name or address, or
(B) a Borrower may merge or amalgamate with and into any
other Borrower and a Guarantor may merge or amalgamate with
and into any other Guarantor (other than the Inactive
Guarantor) or Borrower so long as a Borrower is the
survivor of such merger or amalgamation, provided that: (i)
in any such instance under clause (A) or (B) above Harvard
shall give the Administrative Agent thirty (30) days' prior
written
76
notice thereof and; and (ii) the relevant Obligors shall
execute and deliver, prior to or simultaneously with any
such action, any and all documents and agreements
reasonably requested by the Administrative Agent to confirm
the continuation and preservation of all security interests
and liens granted to the Administrative Agent hereunder or
under any other Loan Document;
(v) Assume, guarantee, endorse, or otherwise become liable upon
the obligations of any Person, firm, entity or corporation
(other than any obligation of another Obligor which such
Obligor is permitted hereunder to incur), except by the
endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course
of business and except for any Obligations under the Loan
Documents, the Pre-Petition Agreements and obligations
under the Junior Financing Documents to the extent
contemplated in these documents as in effect on the date
hereof;
(vi) Declare or pay any dividend or distributions of any kind
on, or purchase, acquire, redeem or retire, any capital
stock or equity interest of any class whatsoever, whether
now or hereafter outstanding, except that the Obligors may
declare and pay dividends or distributions on their capital
stock (to the extent permitted by order of the Bankruptcy
Court, in the case of the Borrowers);
(vii) Except with respect to loans or capital contributions to
other Obligors and customary travel advances made in the
ordinary course of business to employees, officers and
directors of Obligors, make any advance or loan to, or any
investment in, any firm, entity, Person or corporation or
purchase or acquire all or substantially all of the stock
or assets of any entity, Person or corporation;
(viii)Pay any management, consulting or other similar fees to any
Person, corporation or other entity affiliated with any
Obligor other than a guarantee fee payable to the
Guarantors for any guaranty permitted by this Agreement (it
being understood that prior to the entry of the Final
Order, the Agents shall conduct negotiations with the
Borrowers regarding retention/severance arrangements for
the employees of the Borrowers that will be acceptable to
the Agents, the Issuing Bank and the Lenders);
(ix) Permit any change in accounting treatment or reporting
practices of such Obligor, except as required by applicable
GAAP or as permitted by applicable GAAP existing on the
Initial Closing Date and as otherwise permitted by this
Agreement;
(x) Prepay, redeem, purchase, defease, exchange or repurchase
any debt or amend or modify any of the terms of any such
debt or other similar agreements entered into by such
Obligor or its subsidiaries;
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(xi) Except with respect to loans permitted under clause (vii)
of this Paragraph 8.2(k) (and subject to the provisos
therein), enter into any transaction, including, without
limitation, any purchase, sale, lease, loan or exchange of
property with any subsidiary or affiliate of any of the
Obligors, provided that, except as otherwise set forth in
this Agreement, the Obligors or any one of them may enter
into sale and service transactions in the ordinary course
of their business and pursuant to the reasonable
requirements of any such Obligor, provided that any such
transaction involving the price paid by an Obligor in any
such sale of Inventory is no greater than the prevailing
market price therefor or the price that could be obtained
in a comparable arms' length transaction with an unrelated
third party, provided further that no Default or Event of
Default exists or will occur hereunder prior to and after
giving effect to any such transaction;
(xii) use the proceeds of the Loans to purchase or carry margin
stock (as defined in Regulation U of the Federal Reserve
Board) or to extend credit to others for the purpose of
purchasing or carrying any margin stock (as so defined) in
violation of Regulation U or X of the Federal Reserve
Board; or permit the aggregate value of margin stock (as so
defined) at any time owned or held by such Obligor or any
of its subsidiaries to exceed an amount equal to 25% of the
value of all consolidated assets subject at such time to
any "arrangement" (as such term is used in the definition
of "indirectly secured" in Section 221.2 of Regulation U of
the Federal Reserve Board);
(xiii)amend, modify or waive or request an amendment,
modification or waiver of any provision of the Junior Lien
Financing Agreement or any other document evidencing any of
the Junior Secured Obligations or the Junior Secured
Guaranty Obligations (except for any such amendment to
correct a manifest error);
(xiv) request or use any Letter of Credit for the purchase of
domestic Inventory or to secure present or future debt of
domestic Inventory supplies (domestic understood in
relation to each Obligor to refer to purchases with and
debt owed to suppliers located in such Obligor's country of
organization);
(xv) Make any payments in respect of obligations arising or due
prior to the Filing Date (other than repayment of the
Pre-Petition Revolving Obligations) without the written
consent of the Administrative Agent; provided, however,
that to the extent permitted pursuant to orders of the
Bankruptcy Court obtained on notice to the Administrative
Agent, the Borrowers may pay the following obligations
which arose prior to the Filing Date, subject to the
restrictions specified in this subparagraph: (a) amounts
owed in respect of (1) obligations to pay employee wages
and salaries, (2) reimbursable employee business expenses,
(3) payments owed for payroll deductions and contributions
to employee benefit plans, and (4)
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certain costs and expenses relating to the foregoing, in
the aggregate not to exceed $2,200,000; or
(xvi) enter into any Operating Lease with a lease term in excess
of one year or contract for, purchase, make expenditures
for, lease pursuant to a Capital Lease or otherwise incur
obligations with respect to Capital Expenditures (whether
subject to a security interest or otherwise).
(k) Reports. Harvard shall advise the Administrative Agent in writing
of each of the following promptly upon learning of the relevant event,
circumstance or condition:
(i) all expenditures (actual or anticipated) in excess of
$150,000 from the budgeted amount therefor through the
Termination Date for (x) environmental clean-up, (y)
environmental compliance or (z) environmental testing and
the impact of said expenses on such Obligor's Working
Capital;
(ii) any material labor dispute to which such Obligor or any of
its subsidiaries may become a party and which involves any
group of employees, any strikes or walkouts relating to any
of its facilities and the expiration or termination of any
labor contract to which such Obligor or subsidiary is a
party or by which such Obligor or subsidiary is bound, if
the dispute could reasonably be expected to materially
disrupt the operations of such Obligor or subsidiary;
(iii) any Borrower or ERISA Affiliate knows or has reason to know
that (x) any ERISA Event has occurred or exists, (y) any
Single Employer Plan (other than the ▇▇▇▇▇▇▇-▇▇▇▇▇▇ Plan)
subject to Title IV of ERISA has any Unfunded Pension
Liabilities or (z) the ▇▇▇▇▇▇▇-▇▇▇▇▇▇ Plan has Unfunded
Pension Liabilities in excess of $50,000,000.00;
(iv) receipt by any Borrower or ERISA Affiliate from the PBGC of
any notice of the PBGC's intention to terminate any Single
Employer Plan or to have a trustee appointed to administer
such Plan;
(v) any notice is given or required to be given to the PBGC
under Section 302(f)(4)(A) of ERISA of the failure of any
Borrower or ERISA Affiliate to make timely payments to a
Plan;
(vi) receipt by any Borrower or ERISA Affiliate, from a
Multiemployer Plan sponsor, of any notice concerning (a)
the imposition of Withdrawal Liability by a Multiemployer
Plan, (b) the determination that a Multiemployer Plan is,
or is expected to be, in reorganization or insolvent within
the meaning of Title IV of ERISA, (c) the termination of a
Multiemployer Plan within the meaning of Title IV of ERISA,
or (d) the amount of liability incurred, or which may be
incurred, by such Borrower or ERISA Affiliate in connection
with any event described in clause (a), (b) or (c) above;
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Each notice pursuant to this Paragraph 8.2(l) shall be accompanied by a
statement of an Authorized Officer setting forth details of the occurrence
referred to therein and stating what action the relevant Obligor or subsidiary
has taken or proposes to take with respect thereto. For the purposes of this
Paragraph 8.2(l), an Obligor shall be deemed to have knowledge when any officer
of such Obligor charged with responsibility for any matter that is the subject
of such notice requirement knows that such notice was required.
(l) RICO. Each Obligor shall comply, and cause each of its subsidiaries
to comply with all applicable laws, rules, regulations and orders, such
compliance to include, without limitation, compliance with the Racketeer
Influenced and Corrupt Organizations Chapter of the Organized Crime Control Act
of 1970.
(m) Perform Obligations. Each Obligor shall perform, and cause each of
its subsidiaries to perform its respective obligations under the Loan Documents
and its material obligations under other material agreements (other than any
rejected in the Cases) (it being understood that any obligation under any such
other agreement will be deemed material if its nonperformance could reasonably
be expected to have a Material Adverse Effect or result in a Material Adverse
Change).
(n) Maintain Existence, Structure and Licenses. Except for a Permitted
Liquidation or as permitted by Paragraph 8.2(k)(iv) of this Section 8, each
Obligor shall preserve and maintain, and cause each of its subsidiaries to
preserve and maintain, its existence, legal structure, legal name, rights
(charter and statutory), and all permits, licenses, approvals, privileges and
franchises used or useful in the conduct of its business (other than any
rejected in the Cases).
(o) Use of Proceeds. Subject to Paragraph 8.2(r) of this Section 8 and
Paragraph 11.2(f) of Section 11 of this Agreement, the Obligors shall use, and
cause their respective subsidiaries to use, the proceeds of the Loans and the
Letters of Credit for the sole purposes of (i) refinancing the Pre-Petition
Revolving Obligations incurred under the Pre-Petition Revolving Loans, (ii)
paying related transaction costs, fees and expenses due under the Pre-Petition
Agreements, (iii) providing Working Capital from time to time for the Obligors
in accordance with the Budget, and (iv) other general corporate purposes.
(p) Inventories, Appraisals and Field Examinations.
(i) The Obligors, at their own expense, shall cause not less
than one (1) physical inventory to be undertaken during the
period in which this Agreement is in effect which shall be
conducted by such inventory takers and following such
methodology as is consistent with the Obligors' past
practices.
(ii) Upon the occurrence and during the continuance of a Default
or an Event of Default, the Administrative Agent may, at
the expense of the Borrowers, cause such additional
inventories to be taken as the Administrative Agent may
determine in its discretion or as Required Revolving
Facility Lenders may require.
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(iii) The Agents, the Issuing Bank and the Lenders shall be
entitled to obtain appraisals of the Collateral from time
to time (in all events, at the Borrowers' expense),
conducted by such appraisers as are satisfactory to the
Agents and the Required Revolving Facility Lenders,
including, without limitation, desktop appraisals and full
appraisals of the Collateral. The Obligors shall cooperate
with and provide information relating to the Collateral
reasonably requested by each of the appraisers engaged by
any Agent or the Lenders to conduct the appraisals of the
Collateral.
(iv) At the Lenders' discretion, if deemed necessary, the
Administrative Agent, the Issuing Bank and the Lenders
shall be entitled to conduct two (2) collateral finance
field examinations (in each event, at the Borrowers'
expense) of the Borrowers' books and records during the
period in which this Agreement is in effect, provided that
upon the occurrence and during the continuance of a Default
or an Event of Default, the Administrative Agent and the
Lenders may, at the expense of the Borrowers, undertake
such additional field examinations as the Agents or
Required Revolving Facility Lenders may determine in their
discretion.
(q) Accounts. To the extent it has not already done so on or before the
Initial Closing Date, such Obligor shall, not later than the 7th day thereafter,
establish, and shall thereafter maintain, Blocked Accounts and concentration
accounts as required in Paragraph 3.4 of Section 3 hereof.
(r) Limitation on Use of Proceeds for Albion and Rock Valley. From and
after the First Amendment Date, the Borrowers shall not use any of the proceeds
of any Loan or any Letter of Credit to fund the operations of the Albion,
Michigan, facility of ▇▇▇▇▇-Albion without the prior written consent of the
Lenders and the Junior Lien Lender; and from and after the ninth Business Day
after the Initial Closing Date, the Borrowers shall not use any of the proceeds
of any Loan to fund the operations of the Rock Valley, Iowa, facility of
▇▇▇▇▇-Albion without the prior written consent of the Lenders and the Junior
Lien Lender. The foregoing shall not limit the ability of the Borrowers to use
the proceeds of a Loan to fund any fee or other amount payable for the opening
of the letter of credit to be issued in favor of the Administrative Agent
pursuant to the Visteon/American Axle Participating Customer Agreement.
(s) Prepayment of Obligations. If at any time prior to the repayment in
full of all the Obligations and the termination of the Commitments of the
Lenders and the Issuing Bank to make Loans and advance or extend credit
hereunder, the Borrowers shall obtain credit or incur debt pursuant to Sections
364(b), 364(c) and 364(d) of the Bankruptcy Code, then all of the consideration
for such credit or debt shall immediately be turned over to the Administrative
Agent, on behalf of the Agents, the Lenders and the Issuing Bank, for prepayment
of the Loans as provided for in Paragraph 6.3 of Section 6 hereof.
8.3 Final Order; Administrative Priority; Lien Priority; Payment of
Claims. (a) The Borrowers shall not at any time seek, consent to or suffer to
exist any modification, stay, vacation or amendment of the Final Order except
for any modifications and amendments agreed to by the Administrative Agent, the
Junior Lien Lender and the Lenders;
81
(b) The Borrowers shall not at any time suffer to exist a priority for
any administrative expense or unsecured claim against the Borrowers (now
existing or hereafter arising of any kind or nature whatsoever, including,
without limitation, any administrative expenses of the kind specified in
Sections 503(b), 507(b) and 546(c) of the Bankruptcy Code) equal or superior to
the priority of Administrative Agent (for the benefit of the Agents, the Issuing
Bank and the Lenders) in respect of the Loans, except for the Carve-Out and the
United States Trustees Fees; and
(c) The Borrowers shall not at any time suffer to exist any lien on the
Collateral having a priority equal or superior to the liens and security
interests in favor of Administrative Agent (for its benefit and that of the
Lenders) in respect of the Obligations.
8.4 Indemnification. (a) Each of the Obligors hereby, jointly and
severally, agrees to indemnify and hold harmless the Agents, the Issuing Bank,
each Lender and each of their affiliates and each of the respective officers,
directors, employees, attorneys and agents of each (each an "Indemnified Party"
under this subparagraph) from and against any and all claims, damages, losses,
liabilities, obligations, payments, made or required to be made by the Agents or
the Issuing Bank (or any of them) pursuant to any indemnity provided by the
Agents or the Issuing Bank (or any of them) and reasonable expenses (including,
without limitation, reasonable fees and disbursements of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party including,
without limitation, in connection with or by reason of :
(i) the Line of Credit, the Letters of Credit (or any of them)
or any drafts or acceptances relating thereto,
(ii) this Agreement or the other Loan Documents or any of the
transactions contemplated thereby,
(iii) the Blocked Accounts, the lockbox, the Revolving Loan
Account, and/or any other deposit accounts and/or the
agreements executed in connection therewith,
(iv) the method of handling the accounts and Accounts of the
Collective Borrowers and Guarantors as herein provided,
(v) the Administrative Agent's or the Issuing Bank's or any
Lender's relying on any instructions of any of the
Collective Borrowers or any Guarantor,
(vi) any other action taken by the Administrative Agent in
accordance with subparagraph (b) of Paragraph 3.6 of
Section 3 of this Agreement,
(vii) any violation or alleged violation of any Environmental Law
by the Obligor and each of its subsidiaries; or any claim
or expense which results from any of the Obligor's and each
of its subsidiaries' operations, or from the release or
threatened release at, to, or from any Real Estate of any
Contaminants, or remedial action (as defined under the
Comprehensive, Environmental Response, Compensation and
Liability Act, 42 U.S.C.Ass.9601 et seq., or any
equivalent state, local or foreign law) or corrective
82
action (as this term is used in Section 3004(u), 3004(v),
and 3008(h) of the Resource Conservation and Recovery Act
or any equivalent state, local or foreign law),
(viii) any other matter relating to or arising in connection
with this Agreement or any of the other Loan Documents or
other ancillary document or any part of the Collateral,
which such Indemnified Party may sustain or incur, all whether through the
alleged or actual negligence of such Person or otherwise, except and to the
extent that the same results solely and directly from the gross negligence or
willful misconduct of such Indemnified Party, as finally determined in a
non-appealable judgment by a court of competent jurisdiction. Trim Trends agrees
to indemnify and hold harmless each of the Indemnified Parties from and against
any and all claims, damages, losses, liabilities, obligations, and payments,
made or required to be made by any of them as contemplated above to the extent
they relate to the Trim Trends L/C Reimbursement Obligations or otherwise to any
Letter of Credit issues for the account of Trim Trends pursuant to Section 4 of
this Agreement. Each of the Borrowers and Trim Trends hereby agrees that this
indemnity shall survive termination of this Agreement, as well as payment of the
Obligations and the Guaranty Obligations.
(b) The Agents may, in their sole business judgment, establish such
Availability Reserves with respect to the indemnity provided for in subparagraph
(a) of this Paragraph 8.4 as they may deem advisable under the circumstances
and, upon any termination of the Revolving Credit Facility, the Administrative
Agent may hold such reserves as cash reserves in the Cash Collateral Account for
any such contingent liabilities. In the case of an investigation, litigation or
other proceeding to which the indemnity in this paragraph applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by any of the Borrowers or Guarantors, any of their
respective directors, securityholders or creditors, an Indemnified Party or any
other Person, or an Indemnified Party is otherwise a party thereto and whether
or not the transactions contemplated by the Loan Documents are consummated.
(c) None of the Indemnified Parties shall have any liability (whether
direct or indirect, in contract, tort or otherwise) to any of the Obligors or
any of their respective securityholders or creditors for or in connection with
the transactions contemplated by the Loan Documents except for direct damages
(as opposed to special, indirect, consequential or punitive damages (including,
without limitation, any loss of profits, business or anticipated savings)) that
are determined in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct.
(d) Each of the Borrowers hereby indemnifies the Administrative Agent
and holds the Administrative Agent harmless from any and all costs, expenses,
claims, liabilities, Out-of-Pocket Expenses or otherwise, incurred or imposed on
the Administrative Agent and/or the Agents, the Issuing Bank or the Lenders by
reason of the exercise of the rights, remedies and interests under Section 11 of
this Agreement or any rights or remedies exercised under any of the other Loan
Documents in respect of any of the Collateral, including, without limitation,
from any sale or transfer of Collateral, preserving, maintaining or securing the
Collateral, defending its interests in Collateral (including pursuant to any
claims brought by the Obligors, any of the
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Obligors as debtor-in-possession, the Junior Lien Lender or any other secured or
unsecured creditors of any of the Obligors, any trustee or receiver in
bankruptcy, or otherwise) or dealing with any of the Collateral as provided in
the Loan Documents (or any claim brought against the Obligors or the
Administrative Agent by the Junior Lien Lender in respect of any of the
foregoing), and the Borrowers hereby agree to so indemnify and hold the
Administrative Agent harmless, absent the Administrative Agent's gross
negligence or willful misconduct as finally determined in a non-appealable
judgment by a court of competent jurisdiction. The foregoing indemnification
shall survive termination of the Line of Credit and this Agreement until such
time as all Obligations (including the foregoing) and Guaranty Obligations have
been fully, finally and indefeasibly paid in full. In furtherance thereof the
Administrative Agent, may establish such Availability Reserve for Obligations
and Guaranty Obligations hereunder (including any contingent Obligations) as it
may deem advisable in its reasonable business judgment.
SECTION 9. INTEREST, FEES AND EXPENSES INVOLVING OBLIGATIONS
9.1 Revolving Loans. (a) Interest on the Revolving Loans shall be
payable monthly as of the end of each month and accrue at the rate per annum
equal for each day to the sum of the Citibank Base Rate for such day plus one
and three quarters percent (1.75%) on the average of the net balances owing by
each of the Borrowers to the Administrative Agent in their Revolving Loan
Accounts at the close of each day during such month. In the event of any change
in the Citibank Base Rate, the rate hereunder for the Revolving Loans shall
change, as of the date of such change, so as to remain one and three quarters
percent (1.75%) above the Citibank Base Rate. The rate hereunder for the
Revolving Loans shall be calculated based on a 360-day year. The Administrative
Agent shall be entitled to charge each such Borrowers' Revolving Loan Account at
the rate provided for herein when due until all Obligations have been paid in
full.
(b) Notwithstanding any provision to the contrary contained in this
Section 9, in the event that the sum of (i) the outstanding Revolving Loans and
(ii) the outstanding Letters of Credit exceeds the lesser of either (x) the
maximum aggregate amount available under Sections 3 and 4 of this Agreement or
(y) the Revolving Credit Facility: (A) as a result of any Voluntary Overadvance,
for any one (1) or more days in any month, or (B) any Nonconsensual Overadvance
and such Nonconsensual Overadvance continues for five (5) or more days in any
month, the average net balance of all Revolving Loans for such month shall bear
interest at the Overadvance Rate.
(c) Upon and after the occurrence of an Event of Default and the giving
of any required notice by the Administrative Agent in accordance with the
provisions of Section 11, Paragraph 11.2 hereof, all Obligations shall bear
interest at the Default Rate of Interest.
9.2 L/C Participation Fees. In consideration of each of the L/C
Participations and the Commitment of the Revolving Facility Lenders hereunder to
acquire them, as well as the Administrative Agent's agreement herein to make
payments to the Issuing Bank on behalf of the Revolving Facility Lenders, the
Borrowers shall pay to the Administrative Agent for the ratable benefit of the
Revolving Facility Lenders, the Letter of Credit Participation Fee, which shall
be an amount equal to three and one half percent (3.50%) per annum, payable
monthly, on the face amount of each Letter of Credit less the amount of any and
all amounts previously drawn under
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such Letter of Credit; provided, however, notwithstanding any of the foregoing,
during the continuance of an Event of Default, the Letter of Credit
Participation Fee shall be increased by an additional two percent (2.00%) per
annum.
9.3 Charges Relating to Letters of Credit. (a) Any and all charges,
fees, commissions, costs and expenses charged to any of the Lenders for the
account of any L/C Eligible Account Party by the Issuing Bank in connection
with, or arising out of, Letters of Credit or out of transactions relating
thereto (including the L/C Participations) will be charged to the Revolving Loan
Account in full when charged to, or paid by any Lender, or as may be due upon
any termination of the Revolving Credit Facility, and when made by the Issuing
Bank shall be conclusive on the Revolving Facility Lenders.
(b) The Issuing Bank's standard charges, fees, commissions, costs and
expenses payable to the Issuing Bank by the L/C Eligible Account Parties in
connection with the issuance of the Letters of Credit shall be as separately
agreed by Harvard, for the L/C Eligible Account Parties, with the Issuing Bank
in connection with each L/C Application and may include, without limitation, any
amounts of the kinds identified in Paragraph 9.4 of this Section 9.
9.4 Other Expenses. Each of the Obligors shall reimburse or pay the
Agents and/or the Lenders, as applicable, for (a) all Out-of-Pocket Expenses,
(b) in the case of the Administrative Agent, an audit fee in the amount of
$750.00 per Person per day or such higher amount as at the time is being charged
by the Administrative Agent or the agent or agents used by it for the purpose,
for each Person who, for or at the request of the Administrative Agent, is
engaged in appraising, valuing, inspecting or monitoring the Collateral from
time to time hereunder and (c) reasonable fees and costs incurred in connection
with the enforcement and protection of the rights of the Agents (or any either
of them) and, after any Event of Default or, whether or not it ultimately
becomes an Event of Default, any Default of a kind contemplated in any of
sub-paragraphs (c) or (g) of Paragraph 11.1, the Lenders and the Issuing Bank,
under this Agreement or any other Loan Document, including the protection of the
rights of the Agents (or either of them) and the Lenders and the Issuing Bank in
any bankruptcy, reorganization, liquidation or insolvency proceeding, whether or
not litigation is commenced.
9.5 Commitment Fee. On the last Business Day of each month, commencing
with January 2002 and on the Termination Date, the Borrowers shall pay to the
Administrative Agent a non-refundable Commitment Fee at the annual rate of
one-half percent (0.5%) which shall accrue during each of the successive periods
beginning on (and including) the date of this Agreement and ending on (and
including) January 31, 2002, in the case of the first period, and thereafter
beginning on (and including) the first day and ending on (and including) the
last day of the relevant month, on the daily average unused portion of the
Revolving Credit Facility (including, without limitation, Letter of Credit
Undrawn Amounts, whether or not then available), as specified in the definition
of "Commitment Fee" in Paragraph 1.1 of Section 1 of this Agreement.
9.6 DIP Facility Fee. On the Initial Closing Date, the Borrowers shall
pay to the Administrative Agent a fee (the "DIP Facility Fee"), in the amount of
$550,000, which shall be deemed fully earned when paid and non-refundable, of
which $350,000 shall be distributed to the
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Agents (for allocation between the Lenders pro rata in accordance with their
respective Commitments) and $200,000 of which shall be distributed to the Junior
Lien Lender.
9.7 Administrative Management Fee. On or after May 31, 2002 and on the
last Business Day of each month thereafter until all Obligations and/or Guaranty
Obligations (as the case may be) of the Obligors under the Loan Documents shall
have been fully, finally and indefeasibly paid and all the Commitments have
expired or terminated, the Borrowers shall pay to the Administrative Agent, for
its own account, the Administrative Management Fee in the amount of $6,250.00.
This fee shall be deemed fully earned when paid in advance for each month.
9.8 Other Charges of the Administrative Agent. Without duplication of
the fees provided for in Paragraph 9.4(b) and as Out-of-Pocket Expense, the
Borrowers shall pay the Administrative Agent's standard charges and fees for the
Administrative Agent's Personnel used by the Agent for reviewing the books and
records of the Borrowers and for appraising, valuing, examining, verifying,
testing, protecting, safeguarding, preserving or disposing of all or any part of
the Collateral (which fees shall be in addition to the Administrative Management
Fee and any Out-of-Pocket Expenses).
9.9 Taxes. (a) Each payment by each Obligor under this Agreement or any
other Loan Document shall be made without withholding on account of any present
or future Tax, levy, impost, duty, charge, assessment or fee of any nature that
is imposed by any Governmental Authority or taxing authority unless withholding
is required by applicable law. If applicable law requires any such withholding
by any Obligor, such Obligor shall give notice to that effect to the
Administrative Agent, make the necessary withholding and make timely payment of
the amount withheld to the appropriate Governmental Authority. All amounts so
withheld shall be paid before penalties attach thereto or interest accrues
thereon. If any such penalties or interest nonetheless become due, the Borrowers
shall make prompt payment thereof to the appropriate Governmental Authority. If
any Lender or Agent pays any amount in respect of any such tax, levy, impost,
duty, charge, assessment or fee that is not a net income or net receipts Tax or
a franchise Tax imposed in lieu of such net income or receipts Tax (each such
non-excluded tax, an "Indemnifiable Tax") which is imposed on any payment due
from any Obligor hereunder or penalties or interest thereon, the Borrowers shall
reimburse such Lender or Agent in U.S. dollars for that payment on demand. If
any Obligor pays any such Indemnifiable Taxes or penalties or interest thereon,
it shall deliver official tax receipts evidencing the payment or certified
copies thereof to the Administrative Agent (for the relevant Lender or Agent)
not later than the thirtieth (30th) day after payment.
(b) If any Lender or Agent that is organized outside the United States
is or becomes entitled to a reduced withholding rate or a complete exemption
from withholding with respect to Indemnifiable Taxes on payments to it by an
Obligor under this Agreement or any of the other Loan Documents, within thirty
(30) days after receipt of a request of such Obligor, such Lender or Agent shall
as promptly as practicable, and provided it is not burdensome for it to do so,
complete and deliver from time to time to such Obligor such form as such Obligor
is required to obtain from such Lender or Agent in order to give effect to the
reduced rate or exemption.
(c) If any Indemnifiable Taxes are withheld from a payment due to a
Lender or an Agent in accordance with this Paragraph, the Borrowers shall
promptly pay to the Administrative
86
Agent, for such Lender or Agent, such additional amount as is necessary to
ensure that the net amount actually received by such Lender or Agent free and
clear of those Indemnifiable Taxes is equal to the amount that such Lender or
Agent would have received had those Indemnifiable Taxes not been withheld,
except that, if an Agent or Lender is organized outside the United States no
such additional amount shall be payable to such Lender to the extent that the
relevant Indemnifiable Taxes would not have been imposed but for failure by such
relevant Agent or Lender to comply with the provisions of Paragraph 9.9(b)
hereof. The obligation of the Borrowers to pay these additional amounts shall
constitute Obligations and shall survive the termination of the Lenders'
Commitments, repayment of the principal of the Loans and payment of all other
Obligations.
(d) The Borrowers shall pay any registration or transfer taxes, stamp
duties or similar levies, and any penalties or interest that may be due with
respect thereto, that may be imposed by any jurisdiction in connection with this
Agreement or the other Loan Documents. If any Lender or Agent pays any amount in
respect of any such taxes, duties, levies, penalties or interest, (or if any
Lender pays any such amount to the Issuing Bank in connection with an L/C
Participation) the Borrowers shall reimburse such Lender or such Agent for that
payment on demand.
9.10 Revolving Loan Account Charges. Each of the Obligors hereby
authorizes the Administrative Agent to charge the Revolving Loan Account(s) with
the amount of all Obligations due hereunder as such payments become due. The
Borrowers hereby confirm and agree that they shall promptly pay the Obligations
to the Administrative Agent upon its request therefor. Each of the Borrowers
confirms that (i) its liability for any and all of the fee obligations and
Out-of-Pocket Expenses, set forth in this Agreement and in any of the other Loan
Documents is joint and several, (ii) the Borrowers, as between themselves, shall
determine how to pro-rate any such payments due hereunder (and how to pro rate
any such payment in respect of any Letter of Credit issued for the account of
Trim Trends, as between themselves and Trim Trends) and (iii) for ease of
administration, the Administrative Agent may charge any of the Revolving Loan
Accounts with the amount of any such fee payments, and any such charges which
the Administrative Agent may so make to any of the Borrowers' Revolving Loan
Accounts as herein provided will be made as an accommodation to the Borrowers
and solely at the Administrative Agent's discretion.
9.11 Capital Adequacy Changes. In the event that any Agent, the Issuing
Bank or Lender (or any financial institution which may from time to time become
a participant in a Loan hereunder) shall have determined in the exercise of its
reasonable business judgment that, subsequent to the Initial Closing Date, any
change in applicable law, rule, regulation or guideline regarding capital
adequacy, or any change in the interpretation or administration thereof, or
compliance by such Agent, the Issuing Bank or such Lender or participant (or any
corporation controlling any of them) with any new request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Agent's, the Issuing Bank's or such Lender's or
participant's (or controlling corporation's) capital as a consequence of its
obligations hereunder to a level below that which such Agent, the Issuing Bank,
such Lender or participant (or controlling corporation) could have achieved but
for such adoption, change or compliance (taking into consideration the policies
with respect to capital adequacy of such Agent, the Issuing Bank, such Lender or
participant (or controlling corporation)) by an amount reasonably deemed
87
by such Agent, the Issuing Bank, such Lender or participant (or controlling
corporation)) to be material, then, from time to time, the Borrowers shall pay
no later than five (5) days following demand to such Agent, the Issuing Bank or
Lender (for itself or for any participant in any of its Loans or for its
respective controlling corporation)) such additional amount or amounts as will
compensate such Agent, the Issuing Bank, such Lender or participant (or
controlling corporation)) for such reduction. In determining such amount or
amounts, such Agent, the Issuing Bank, such Lender or participant (or
controlling corporation)) may use any reasonable averaging or attribution
methods. The protection of this Paragraph 9.11 shall be available to such Agent,
the Issuing Bank, such Lender or participant (or controlling corporation))
regardless of any possible contention of invalidity or inapplicability with
respect to the applicable law, regulation or condition. A certificate of such
Agent, the Issuing Bank, such Lender or participant (or controlling
corporation)) setting forth such amount or amounts as shall be necessary to
compensate such Agent, the Issuing Bank, such Lender or participant (or holding
company)) with respect to this Section 9 and the calculation thereof when
delivered to the Borrowers shall be conclusive on the Borrowers absent manifest
error. Notwithstanding anything in this paragraph to the contrary, in the event
such Agent, the Issuing Bank, such Lender or participant (or controlling
corporation)) has exercised its rights (directly or through an Agent, the
Issuing Bank or Lender) pursuant to this paragraph, and subsequent thereto
determines that the additional amounts paid by the Borrowers in whole or in part
exceed the amount which such Agent, Lender or participant (or controlling
corporation)) actually required to be made whole, the excess, if any, shall be
returned to the Borrowers by such Agent, the Issuing Bank, such Lender or,
through the Issuing Bank, the relevant Agent or Lender, such participant or
controlling corporation, as applicable.
9.12 Additional Costs. In the event that on or after the date hereof
any applicable law, treaty or governmental regulation is adopted, or any change
therein or in the interpretation or application thereof becomes effective, or
compliance by any Agent, the Issuing Bank, any Lender or any such participant
with any request or directive (whether or not having the force of law) from any
central bank or other financial, monetary or other authority, shall:
(a) subject such Agent, the Issuing Bank, such Lender or participant to
any tax of any kind whatsoever with respect to this Agreement or change the
basis of taxation of payments to such Agent, the Issuing Bank, such Lender or
participant of principal, fees, interest or any other amount payable hereunder
or under any other Loan Documents (except for changes in the rate of tax on the
overall net income or gross receipts of such Agent, the Issuing Bank, such
Lender or participant by the federal government or the jurisdiction in which it
maintains its principal office);
(b) impose, modify or hold applicable any reserve, special deposit,
assessment or similar requirement against assets held by, or deposits in or for
the account of, advances or loans by, or other credit extended by such Agent,
the Issuing Bank, such Lender or participant by reason of or in respect to this
Agreement and the Loan Documents, including (without limitation) pursuant to
Regulation D of the Board of Governors of the Federal Reserve System; or
(c) impose on such Agent, the Issuing Bank, such Lender or participant
any other condition with respect to this Agreement or any other Loan Document,
and the result of any of the foregoing is to increase the cost to such Agent,
the Issuing Bank, such Lender or participant
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of making, renewing or maintaining its Loans or interests therein or any such
other extension of credit provided pursuant to this Agreement or any other Loan
Document by an amount that such Agent, the Issuing Bank, such Lender or
participant deems to be material in the exercise of its reasonable business
judgment or to reduce the amount of any payment (whether of principal, interest
or otherwise) in respect of any of such Loans, interests or other extensions of
credit by an amount that such Agent, the Issuing Bank, such Lender or
participant (or controlling corporation) deems to be material in the exercise of
its reasonable business judgment, then, in any such case the Borrowers shall pay
such Agent, the Issuing Bank, such Lender or participant, within five (5) days
following its demand, such additional cost or such reduction, as the case may
be. Such Agent, the Issuing Bank, or such Lender or, through the relevant
Lender, such participant shall certify the amount of such additional cost or
reduced amount to the Borrowers and the calculation thereof and such
certification shall be conclusive upon the Obligors absent manifest error.
Notwithstanding anything in this paragraph to the contrary, in the event such
Agent, the Issuing Bank, such Lender or participant has exercised its rights
pursuant to this paragraph, and subsequent thereto determines that the
additional amounts paid by the Borrowers in whole or in part exceed the amount
which such Agent, the Issuing Bank, such Lender or participant actually required
pursuant hereto, the excess, if any, shall be returned to the Borrowers by such
Agent, the Issuing Bank, such Lender or, through the relevant Lender, such
participant.
SECTION 10. POWERS INVOLVING OBLIGATIONS; OBLIGATIONS ABSOLUTE
10.1 Power of Attorney. Each Obligor hereby appoints the Administrative
Agent, or any Person or agent the Administrative Agent may designate, as its
attorney-in-fact, at the Obligor's cost and expense, to exercise all of the
following powers, which being coupled with an interest, shall be irrevocable
until all Obligations, in the case of any Borrower, or all Guaranty Obligations,
in the case of any Guarantor, have been fully, finally and indefeasibly paid:
(a) To receive, take, endorse, sign, assign and deliver, all in the
name of the Administrative Agent or the Obligors or any one of them, any and all
checks, notes, drafts, and other documents or instruments relating to the
Collateral;
(b) To receive, open and dispose of all mail addressed to the Obligors
or any one of them and to notify postal authorities to change the address for
delivery thereof to such address as the Administrative Agent may designate;
(c) To request from customers indebted on Accounts at any time, in the
name of the Administrative Agent information concerning the amounts owing on the
Accounts;
(d) To request from customers indebted on Accounts at any time, in the
name of the Obligors or any one of them, in the name of certified public
accountant designated by the Administrative Agent (after consultation with the
Syndication Agent) or in the name of the Administrative Agent's designee,
information concerning the amounts owing on the Accounts;
(e) To transmit to customers indebted on Accounts notice of the
Administrative Agent's interest therein and to notify customers indebted on
Accounts to make payment directly to the Administrative Agent for the relevant
Obligor's account;
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(f) To take or bring, in the name of the Administrative Agent or the
Obligors or any one of them, all steps, actions, suits or proceedings deemed by
the Administrative Agent necessary or desirable to enforce or effect collection
of the Accounts; and
(g) To take and refrain from taking any and all actions contemplated
for it in any Pre-Petition Security Document or elsewhere in this Agreement.
Notwithstanding anything hereinabove contained to the contrary, the powers set
forth in clauses (b), (c), (e) and (f) of this Paragraph 10.1 may only be
exercised after the occurrence of an Event of Default or a Default of a kind
referred to in subparagraph (c) or (g) of Paragraph 11.1 of Section 11 hereof,
and until such time as such Default is remedied or, in the case of any Event of
Default, until such time as it is waived in writing by the Required Lenders,
subject to the following. If, in connection with any such Event of Default, the
Administrative Agent has (as provided in Paragraph 11.2) declared all
Obligations to be immediately due and payable (or they have, as contemplated in
Section 11 hereof, become so payable without need for any such declaration), the
Administrative Agent shall not be limited in the further exercise of the powers
set forth in this Paragraph 10.1, regardless of any subsequent remedy of any
such Event of Default, until all the Obligations and Guaranty Obligations have
been fully, finally and indefeasibly paid.
10.2 Joint and Several Liability of Borrowers. (a) Notwithstanding
anything in this Agreement or any other Loan Document to the contrary, each of
the Borrowers hereby accepts joint and several liability hereunder and under the
other Loan Documents in consideration of the financial accommodations to be
provided by the Administrative Agent, the Lenders and the Issuing Bank under
this Agreement and the other Loan Documents, for the mutual benefit, directly
and indirectly, of each of the Borrowers and other L/C Eligible Account Parties
and in consideration of the undertakings of the other Borrowers to accept joint
and several liability for the Loans and the other Obligations hereunder, as well
as the undertaking of Trim Trends for its own obligations relating to Letters of
Credit issued for its account. Each of the Borrowers, jointly and severally,
hereby irrevocably and unconditionally accepts, not merely as a surety but also
as a co-debtor, joint and several liability with the other Borrowers, with
respect to the payment and performance of all of the Obligations (including,
without limitation, any Obligations arising under this Paragraph 10.2), it being
the intention of the parties hereto that all of the Obligations shall be the
joint and several obligations of each of the Borrowers without preferences or
distinction among them. If and to the extent that any of the Borrowers shall
fail to make any payment with respect to any of the Obligations as and when due
or to perform any of the Obligations in accordance with the terms thereof, then
in each such event the other Borrowers will make such payment with respect to,
or perform, such Obligation.
(b) Subject to the terms and conditions hereof, the Obligations of each
of the Borrowers under the provisions of this Paragraph 10.2 constitute the
absolute and unconditional, full recourse Obligations of each of the Borrowers
enforceable against each Borrower to the full extent of its properties and
assets, irrespective of all of the following:
(i) any lack of validity or enforceability, any irregularity, default
or omission in any relevant documentation, including any Loan
Document, or of the Obligations, or any delay, failure or
omission to enforce or agreement not to enforce, or the stay or
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enjoining, by order of court, by operation of law or otherwise,
of the exercise of any right with respect to the foregoing
(including, in each case, without limitation, as a result of the
insolvency, bankruptcy or reorganization of the Issuing Bank, any
Agent, any Lender, any Borrower or any other Person);
(ii) any change in the time, manner or place of payment of, or in any
other term in respect of, all or any of the Loan Documents;
(iii) any exchange or release of, or non-perfection of any lien on or
in, any Collateral, any release or amendment or waiver of or
consent to any departure from any guaranty or security, for all
or any of the Obligations or any release of any other Obligor
from all or any part of its obligations under this Agreement or
any of the terms of any other Loan Document;
(iv) any claim, set-off, counterclaim, defense or other rights,
including any as to marshalling of any security or guaranties
that any Obligor may have at any time and from time to time
against the Issuing Bank, any Agent, any Lender, or any other
Person, whether in connection with the transactions contemplated
in the Loan Documents or any other transaction; or
(v) any other circumstances which might otherwise constitute a
defense based on suretyship or otherwise available to, or a
discharge of, any Borrower in respect of (A) the Obligations of
any Borrower, (B) the release of or waiver of any rights against
any other Obligor and the settlement, compromise or release of
any Obligations of any of them or (C) the failure by the
Administrative Agent, the Issuing Bank or any Lender to attempt,
or delay by it in attempting, to collect any Obligations from any
other Borrower or Guaranty Obligations from any Guarantor or to
realize upon any Collateral; and the Issuing Bank, the Agents and
the Lenders may deal with any of the Borrowers as they see fit
without prejudice or effect on this Agreement or the security for
the Obligations;
and each Borrower hereby irrevocably waives all defenses that it might otherwise
have based on any of the matters identified above in this Paragraph 10.2 or
based on any other circumstances other than the full, final and indefeasible
payment of all Obligations; provided that the foregoing provisions of this
sentence relating to any Borrower and an Obligation shall not be understood to
constitute a waiver of any defense based on the full and final release of all
responsibility of such Borrower for such Obligation given in writing by the
Agents, the Issuing Bank and the Lenders.
(c) The provisions of this Paragraph 10.2 are made for the benefit of
the Agents, the Issuing Bank and the Lenders and their successors and assigns,
and may be enforced by it or them from time to time against any or all of the
Borrowers as often as occasion therefor may arise and without requirement on the
part of the Agents, the Issuing Bank and/or the Lenders or such successors or
assigns first to marshal any of its or their claims or to exercise any of its or
their rights against any other Borrower or to exhaust any remedies available to
it or them against any other Borrower or to resort to any other source or means
of obtaining payment of any of the
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Obligations hereunder or to elect any other remedy. The provisions of this
Paragraph 10.2 shall remain in effect until all of the Obligations have been
fully, finally and indefeasibly paid in cash.
(d) Each of the Borrowers hereby agrees that it will not enforce any of
its rights of contribution or subrogation against any other Borrower with
respect to any liability incurred by it hereunder or under any of the other Loan
Documents, any payments made by it with respect to any of the Obligations or the
application of any Collateral owned by it in respect of any of the Obligations,
until such time as all the Obligations have been fully, finally and indefeasibly
paid in cash. Except as otherwise expressly permitted in this Agreement or any
Order obtained with the consent of the Administrative Agent, the Lenders and the
Junior Lien Lender, any claim which any Borrower may have against any other
Borrower with respect to any such payments made by it or the application of any
such Collateral in respect of any of the Obligations are hereby expressly made
subordinate and junior in right of payment, without limitation, as to any
increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations and, in the event of any insolvency,
bankruptcy, receivership, liquidation, reorganization or other similar
proceeding under the laws of any jurisdiction relating to any Borrower, its
debts or its assets, whether voluntary or involuntary, all such Obligations
shall be fully, finally and indefeasibly paid in cash before any payment or
distribution of any character, whether in cash, securities or other property,
shall be made by any Borrower to any other Borrower therefor.
SECTION 11. EVENTS OF DEFAULT AND REMEDIES
11.1 Events of Default. Each of the events and circumstances listed
below in this Paragraph 11.1 (each an "Event of Default") shall constitute an
event of default and material breach by the Borrowers of their obligations to
the Agents, the Issuing Bank and the Lenders (except that a breach of the
covenant in Paragraph 8.2(i) shall not constitute an Event of Default):
(a) the Bankruptcy Court shall enter an order dismissing or
suspending any of the Cases or converting any of the Cases to a
case under Chapter 7 of the Bankruptcy Code;
(b) the Bankruptcy Court shall enter an order appointing a trustee in
any of the Cases;
(c) the Bankruptcy Court shall enter an order granting, or there
shall arise, any other claim having priority senior to or pari
passu with the claims of the Agents, the Issuing Bank and the
Lenders under the Loan Documents or any other claim having
priority over any or all administrative expenses of the kind
specified in Sections 503(b), 507(a), or 507(b) of the Bankruptcy
Code (other than the Carve-Out and the United States Trustees
Fees), unless the proceeds of any new loan made in connection
therewith shall repay in full the Obligations and the
Pre-Petition Obligations, if any;
(d) the Bankruptcy Court shall enter an order appointing an examiner
with powers beyond the duty to investigate and report as set
forth in Section 1106(a)(3) and (4)
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of the Bankruptcy Code, in any of the Cases and such order is not
reversed within thirty (30) days;
(e) the Bankruptcy Court shall enter an order (i) granting relief
from the automatic stay applicable under Section 362 of the
Bankruptcy Code to any holder of any security interest in any
assets in the aggregate in excess of $100,000 for any and all
such holders other than as expressly contemplated by the Interim
Order or the Final Order, but only in the event that such relief
shall not have been concomitantly granted therewith to the
Administrative Agent for the benefit of the Agents, the Issuing
Bank and the Lenders, or (ii) approving any settlement or other
stipulation with any creditor of any Obligor other than the
Agents the Issuing Bank and the Lenders or otherwise providing
for payments as adequate protection or otherwise to such creditor
individually or in the aggregate in excess of $100,000 per month
for any and all such creditors, other than as expressly
contemplated by the Interim Order or the Final Order;
(f) the Bankruptcy Court shall enter an order amending,
supplementing, staying, reversing or vacating or otherwise
modifying the Interim Order or the Final Order;
(g) the Bankruptcy Court shall enter an order amending,
supplementing, staying, reversing or vacating or otherwise
modifying the Obligations;
(h) any Obligor shall file or cause to be filed any pleading seeking,
or otherwise consenting to, any of the matters set forth in
Section 11.1(b) through (g) of this Agreement;
(i) any Obligor shall file or cause to be filed (i) any complaint;
(ii) any objection; or (iii) any pleading; in each case which
seeks to affect adversely the Pre-Petition Obligations or the
Liens securing the Pre-Petition Obligations, other than the
Interim Order and the Final Order;
(j) any Obligor shall file a motion seeking, or the Bankruptcy Court
shall enter an order (other than the Interim Order or the Final
Order) (i) adversely affecting the Pre-Petition Obligations or
Liens securing such Pre-Petition Obligations, (ii) finding that
the Pre-Petition Obligations are not fully secured, (iii) that
the Liens securing such Pre-Petition Obligations are avoidable
for any reason or (iv) approving liens having a priority senior
to or pari passu with the Liens securing the Pre-Petition
Obligations.
(k) the entry of the Final Order shall not have occurred within
thirty (30) days after the Filing Date;
(l) any challenge by any Obligor validity of any Loan Document or the
applicability or enforceability of any Loan Document or which
seeks to void, avoid, limit, or otherwise adversely affect the
security interest created by or in any Loan Document or any
payment made pursuant thereto;
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(m) any Borrower shall make any payment (as adequate protection or
otherwise) on account of any claim arising or deemed to have
arisen prior to the Filing Date except as expressly contemplated
by this Agreement, the Interim Order or the Final Order or any
Guarantor shall make any payment on account of any such claim
against a Borrower without the prior written consent of the
Administrative Agent and the Lenders;
(n) the Borrowers shall fail to timely make any adequate protection
payments due to the Pre-Petition Lenders as may be required by
the Bankruptcy Court;
(o) (i) the Borrowers shall fail to pay any principal of any Loan
when the same shall become due and payable, (ii) the Borrowers
shall fail to pay when due any interest on any Loan, (iii) the
Borrowers shall fail to pay when due any fees due under any Loan
Document, and (iv) the Borrowers shall fail to reimburse an
Agent, the Issuing Bank or any Lender upon invoice by such Agent,
the Issuing Bank or such Lender for any expenses due in
connection with any of the Loan Documents or administration of
the Loans, in each case under this subsection within one (1) day
after the same becomes due and payable;
(p) any representation, warranty or statement made or deemed made by
any Obligor or its respective Subsidiaries herein, in any other
Loan Document, or in any statement or certificate delivered or
required to be delivered pursuant hereto or thereto shall prove
to be untrue in any material respect on the date as of which made
or deemed made;
(q) any Obligor shall (i) default in the due performance or
observance by it of any term, covenant or agreement contained in
Section 8 hereof or (ii) default in the due performance or
observance by it of any other term, covenant or agreement
contained in this Agreement or any other Loan Document and such
default shall continue unremedied for a period of at least ten
(10) days after the date of such default;
(r) this Agreement shall cease to give the Administrative Agent the
Liens, rights, powers and privileges purported to be created
thereby, for the benefit of the Agents, the Issuing Bank and the
Lenders, superior to and prior to the rights of all third
Persons, and subject as to priority, to no Liens other than the
Carve-Out and the United States Trustees Fees;
(s) any Guaranty or any provisions thereof shall cease to be in full
force or effect in all material respects, or the Guarantor
thereunder or Person acting by or on behalf of such Guarantor
shall deny or disaffirm such Guarantor's obligations under the
Guaranty or the Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any Guaranty;
(t) any judgments or orders, either individually or in the aggregate,
for the payment of money in excess of $100,000 as an
administrative expense of the kind
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specified in Section 503(b) of the Bankruptcy Code, shall be
rendered against any Borrower and the amount thereof is not
included in the Budget, either (i) enforcement proceedings shall
have been commenced by any creditor upon such judgment or order
or (ii) there shall be any period of ten (10) consecutive days
during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect;
(u) any non-monetary judgment or order shall be rendered against any
Obligor that is reasonably likely to have a Material Adverse
Effect, and there shall be any period of fifteen (15) consecutive
days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be
in effect;
(v) any Obligor shall incur or have asserted against it liabilities
under any Environmental Law in excess of $500,000 in the
aggregate unless such liabilities are covered by the
indemnification provisions of the acquisition agreements pursuant
to which such Obligor acquired such Person (and as to which the
seller representative has acknowledged coverage).
(w) the Collateral Agent, for the ratable benefit of the Lenders,
does not have a perfected first priority mortgage or security
interest in and lien on any of the Collateral (with
super-priority as contemplated in the Recitals to this Agreement,
subject only to the Carve-Out and the United States Trustees
Fees) except as expressly permitted by this Agreement or any
order entered in the Cases with the consent of the Agents, the
Issuing Bank and the Lenders;
(x) any Obligor fails to perform or be in compliance with any of its
covenants or other agreements contained herein, other than those
referred to in subparagraph (o) or subparagraph (p) above, or in
any other Loan Document or other written agreement between such
Obligor and any Agent or Lender, provided that such failure of
performance or noncompliance by such Obligor of any of the
covenants referred in this subparagraph (x) shall not be deemed
to be an Event of Default unless and until it shall remain
unremedied to the Administrative Agent's satisfaction for a
period of ten (10) days from the date the failure of performance
or noncompliance occurs;
(y) failure by any of the Borrowers to make a prepayment as and when
required in Paragraph 6.3 or Paragraph 6.4 of Section 6 hereof or
failure of the Obligors or any one of them otherwise to pay (or
to remit the proceeds of any Permitted Asset Transfer other than
an Intercompany Transfer to the Administrative Agent for payment
of) any of the Obligations (in the case of the Borrowers) or
Guaranty Obligations (in the case of a Guarantor) on the due date
thereof;
(z) an event or condition constituting an ERISA Event or Unfunded
Pension Liabilities shall occur or exist with respect to any
Plan, which event or condition could reasonably be expected to
have a Material Adverse Effect;
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(aa) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ceases for any reason whatsoever (other than as
a result of death) to be actively engaged in the management of
the Borrowers;
(bb) one or more judgments or decrees shall be entered against one or
more of the Obligors (or any subsidiary of any of them that is
not a party to this Agreement) involving in the aggregate a
liability (to the extent not covered by third-party insurance as
to which the insurer has acknowledged coverage) of $50,000.00 or
more and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within
thirty (30) days from the entry thereof;
(cc) the Inactive Guarantor shall, at any time after the date of this
Agreement, engage in any business or receive any assets or be
involved in any transaction whatsoever other than those
incidental to maintaining its existence in compliance with the
Loan Documents; or
(dd) any Participating Customer Agreement is not approved by the
Bankruptcy Court in the Final Order.
11.2 Remedies Upon an Event of Default and Otherwise. (a) Upon the
occurrence of an Event of Default, other than one referred to in Paragraph
11.1(dd), the Administrative Agent (i) may or shall at the written request of
the Required Lenders, by notice to the Borrowers (with a copy to counsel for any
statutory committee of unsecured creditors appointed to the Cases and to the
United States Trustee), declare the Commitments of each Lender and the
obligations of the Administrative Agent and each Lender to make Loans and the
obligations of the Issuing Bank to issue Letters of Credit, to be terminated,
whereupon the same shall forthwith terminate, (ii) may or shall at the written
request of the Required Lenders, by notice to the Borrowers, declare the Loans,
all interest, fees, expenses, other charges and indemnities thereon and all
other amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Loans, all such interest, fees,
expenses, other charges and indemnities in connection with the Loan Documents
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Borrowers, and (iii) subject to the notice referred to in subsection
11.2(b) below, exercise all other rights and remedies under this Agreement and
the Interim Order and Final Order, as applicable.
(b) Upon the occurrence and during the continuance of an Event of
Default, the automatic stay provided in Section 362 of the Bankruptcy Code shall
be deemed automatically vacated as to the Lenders, the Agents and the Issuing
Bank, and the Administrative Agent, on behalf of the Agents, the Issuing Bank
and the Lenders, shall, upon three (3) Business Days' prior written notice to
the Borrowers and any creditors' committee appointed in the Cases pursuant to
Section 1102 of the Bankruptcy Code, be immediately permitted to, among other
things, pursue any and all of its remedies against any Obligors or the
Collateral (including foreclosure thereon) and seek payment in respect of all
Obligations, but in the case of an Event of Default referred to in Paragraph
11.1(dd), only to the extent provided in Paragraph 11.2(f).
(c) Upon the occurrence of an Event of Default, the automatic stay
provided under Section 362 of the Bankruptcy Code shall be deemed automatically
vacated to permit the
96
Administrative Agent, upon three (3) Business Days' prior written notice from
the Administrative Agent to the Borrowers, to take any action permitted under
this Agreement, the other Loan Documents, the Pre-Petition Agreements, the
Bankruptcy Code, the UCC or other applicable law with respect to the Collateral.
(d) For this purpose, in addition to the rights and remedies relating
to the Collateral provided for elsewhere in this Agreement, the Administrative
Agent shall have all the rights and remedies of a secured party provided for in
the UCC and, if any Event of Default or if a Default consisting of a failure of
payment of a kind referred to in Paragraph 11.1(o) of this Agreement (a "Payment
Default") occurs and is continuing, then on three (3) Business Days' prior
notice to Harvard, without the curing of such default within such time, the
Administrative Agent may, without demand of performance, advertisement or notice
of intention to sell, or of the time or place of sale, and without notice to
redeem, or other notice or demand whatsoever to or upon any Obligor (all and
each of which demands, advertisements and/or notices are hereby expressly waived
by each Obligor), forthwith or at any time or times thereafter:
(i) transfer to and/or register in the Administrative Agent's
name, or the name of the Administrative Agent's nominee,
any or all of the IP Collateral and/or collect, receive,
appropriate and realize upon said IP Collateral;
(ii) sell, assign, transfer and deliver to any other person all
right, title and interest in and to all or any part of the
IP Collateral then held by the Administrative Agent under
this Agreement or subject to this Agreement;
(iii) as attorney-in-fact hereunder of such Obligor and at such
Obligor's cost and expense, liquidate any IP Collateral and
otherwise deal in or with the IP Collateral or the proceeds
or avails thereof, as fully and effectually as if the
Administrative Agent were absolute owner thereof, and apply
the proceeds thereof to payment of the Obligations,
notwithstanding the fact that such liquidation may give
rise to penalties;
(iv) as attorney-in-fact hereunder of such Obligor and at such
Obligor's cost and expense, transmit to any persons
indebted on any IP Collateral notice of the Administrative
Agent's interest therein and notify any persons indebted on
any IP Collateral to make payment directly to the
Administrative Agent for such Obligor's account and receive
and give acquittance and receipts for moneys due and to be
come due under or in respect of any of the IP Collateral;
(v) transfer to and/or register in the Administrative Agent's
name, or the name of its nominee, any or all of the Pledged
Stock and Pledged Notes and/or collect, receive,
appropriate and realize upon the Pledged Stock and Pledged
Notes;
(vi) sell, assign, transfer and deliver the whole or any part of
the Pledged Stock and/or Pledged Notes then held by the
Administrative Agent under this Agreement or any
Pre-Petition Security Document or subject to this
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Agreement in one or more parcels, at public or private sale
or sales, through any securities exchange, broker, dealer
or over-the-counter market, electronic trading facility or
other securities market, at the Administrative Agent's
office or elsewhere, on such terms and conditions, and at
such prices as the Administrative Agent may deem advisable,
for cash, upon credit, or for future delivery, with the
right on the Administrative Agent's part, or that of any
Lender, to become the purchaser thereof at any such sale or
sales, free and clear of any right to equity of redemption
(which right or equity is hereby expressly waived and
released by the Obligors);
Notwithstanding anything hereinabove contained to the contrary, the powers set
forth in clauses (iii) and (iv) above may only be exercised after the occurrence
of an Event of Default and until such time as such Event of Default is waived in
writing by the Required Lenders. Each Obligor hereby ratifies and approves all
of the Administrative Agent's acts taken as such Obligors attorney in facts
pursuant to this Agreement, other than acts constituting gross negligence or
willful misconduct, and the Administrative Agent, as attorney-in-fact of each
Obligor, will not be liable for any acts of commission or omission, or for any
error of judgment or mistake of fact or law, other than those that constitute
gross negligence or willful misconduct on the part of the Administrative Agent.
Each Obligor agrees that, in the event the Administrative Agent exercises its
rights hereunder and/or pursuant to the power of attorney herein in accordance
with its terms, after written notification of such exercise from the
Administrative Agent to such Obligor, such Obligor shall never thereafter,
without the prior written authorization of the owner or owners of such IP
Collateral, use any of such IP Collateral. The condition of the foregoing
provision is such that unless and until there occurs an Event of Default, each
Obligor shall continue to own and use the IP Collateral in the normal course of
its business and to enjoy the benefits, royalties and profits therefrom;
provided, however, that from and after the occurrence of an Event of Default
such right will, upon the exercise by the Administrative Agent of the rights
contemplated in this Agreement (including those provided for in any other Loan
Document or by applicable law), be revoked and the right of such Obligor to
enjoy the uses, benefits, royalties and profits of said IP Collateral will
wholly cease, whereupon the Administrative Agent or its transferee(s) shall be
entitled to all of such Obligor's right, title and interest in and to the IP
Collateral. This Agreement will not operate to place upon the Administrative
Agent any duty or responsibility to maintain the IP Collateral.
(e) Each Obligor agrees that any notice of sale, disposition, or other
intended action by the Administrative Agent that may be required by applicable
law, if sent to Harvard, as agent for such Obligor, at least three (3) Business
Days prior to such action shall constitute reasonable notice to such Obligor.
Notwithstanding anything to the contrary elsewhere in this Agreement, if the
Obligations are declared or automatically become immediately due and payable
pursuant to Paragraph 11.2 of this Agreement, in connection with an Event of
Default, the rights and remedies of the Administrative Agent provided for
herein, including, without limitation, its rights to exercise the powers granted
to the Administrative Agent in the power of attorney included in this Agreement,
shall continue and shall not cease to be effective until the full, final and
indefeasible payment of all the Obligations, regardless of whether such Event of
Default is subsequently remedied.
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(f) If any Event of Default referred to in Paragraph 11.1(dd) of this
Section 11 occurs because any Participating Customer Agreement is not approved
in the Final Order, the following shall apply:
(i) If before the date of such notice the Borrowers were still
permitted hereunder to use the proceeds of Loans or to
obtain Letters of Credit to fund the operations of the
facility referred to in such Participating Customer
Agreement, upon written direction from the Lenders and with
the written consent of the Junior Lien Lender, the
Administrative Agent shall give notice that the proceeds of
Loans shall no longer be used, and Letters of Credit shall
no longer be issued, for such purpose, from and after the
date specified in such notice (which shall not be earlier
than the third Business Day following the day such notice
is given). If such notice is given, the Borrowers shall, on
such date, cease to use the proceeds of any Loan or any
Letter of Credit for such purpose.
(ii) The Administrative Agent, upon such direction and with such
consent, shall give Harvard notice that all operations of
the facility referred to in such Participating Customer
Agreement shall cease on the date specified in such notice
(which shall not be before the third Business Day after the
day such notice is given). If such notice is given, the
relevant Borrower shall, on such date, cease all operations
of such facility on or before such date. In addition, from
and after such date, the Administrative Agent, on behalf of
the Agents, the Issuing Bank and the Lenders, shall be
entitled to exercise all rights and remedies provided for
in this Section 11 relating to Collateral which constitutes
any part of such facility or the property at which it is
located and Collateral used therein (and all proceeds
thereof), and apply the proceeds of the exercise of such
rights and remedies to the Obligations.
11.3 Right of Set-Off. Upon the occurrence and during the continuance
of any Event of Default, each Agent and each Lender and the Issuing Bank is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Agent or such Lender or the Issuing Bank to or for the
credit or the account of any Obligor against any and all of the Obligations (in
the case of any Obligor which is a Borrower), against any and all of the
Guaranty Obligations (in the case of any Guarantor), in each case, including all
such relevant Obligations or Guaranty Obligations (as the case may be) now or
hereafter existing under any of the Loan Documents, irrespective of whether or
not such Lender or any Agent or the Issuing Bank shall have made any demand and
although such Obligations or Guaranty Obligations (as the case may be) may be
unmatured. Each Lender and each Agent and the Issuing Bank agrees promptly to
notify the Obligors after any such set-off and application made by such Lender
or Agent or the Issuing Bank, as the case may be; provided that the failure to
give such notice shall not affect the validity of such set-off and application.
99
SECTION 12. TERMINATION
The Borrowers or any one of them may request the termination of this
Agreement at any time with such advance notice as is required and otherwise as
contemplated in the provisions of this Agreement providing for reduction to zero
of the Line of Credit and Commitments of the Lenders and prepayment in full of
the Loans, but the actual termination shall be subject to the following. Notice
of request of termination, as aforesaid, by Harvard shall be deemed to be notice
by the Borrowers for purposes hereof. All Obligations shall become due and
payable as of any termination under this provision and, pending a final
accounting, the Administrative Agent may withhold any balances in the Borrowers'
accounts (unless supplied with an indemnity satisfactory to the Administrative
Agent) to cover all of the Obligations, whether absolute or contingent,
including, but not limited to, cash reserves for any L/C Obligations, or
otherwise, including an amount of one hundred five percent (105%) of the face
amount of any outstanding Letters of Credit with an expiry date on, or within
thirty (30) days of the effective date of termination of this Agreement. Upon
satisfaction of the Agents, the Lenders and the Issuing Bank as to all of the
foregoing, the Agents, the Issuing Bank and Lenders, at the expense of the
Borrowers, shall execute and deliver such releases, termination statements or
other documents and take such actions as Harvard may reasonably request, to
confirm the release of the security interest and liens created in the Collateral
by this Agreement and the other Loan Documents and to confirm the termination of
this Agreement.
SECTION 13. MISCELLANEOUS
13.1 Waivers. Each Obligor hereby waives diligence, notice of intent to
accelerate, notice of acceleration, demand, presentment and protest and any
notices thereof as well as notice of nonpayment except as otherwise expressly
provided in this Agreement. No delay or omission of any Agent or any Lender, the
Issuing Bank or any Obligor to exercise any right or remedy hereunder, whether
before or after the happening of any Event of Default, shall impair any such
right or shall operate as a waiver thereof or as a waiver of any such Event of
Default. No single or partial exercise by an Agent, the Issuing Bank or any
Lender of any right or remedy precludes any other or further exercise thereof,
or precludes any other right or remedy. A waiver on any one occasion shall not
be construed as a bar to, or waiver of, any right or remedy on any future
occasion. No waiver of any right or remedy provided for herein shall be
effective as a waiver unless it is in writing and signed by the Administrative
Agent
13.2 Entire Agreement. This Agreement and the Loan Documents executed
and delivered in connection therewith constitute the entire agreement between
the Borrowers, the Guarantors, the Agents, the Issuing Bank and the Lenders
relating to the subject matter hereof and thereof; supersede any agreements
relating to that subject matter existing on the date of this Agreement other
than the Agents' Commitment Letter (including, insofar as it relates to certain
fees payable thereunder and hereunder, the terms of the Fee Letter referred to
therein relating to those fees); may, subject to Paragraph 15.10, be changed
only by a writing signed by the Borrowers, the Guarantors, the Administrative
Agent (acting on behalf of the Required Lenders) and the Issuing Bank; and shall
bind the Obligors, the Agents, the Lenders, the Issuing Bank and their
respective successors and assigns, and shall benefit the Obligors, the Agents,
the Issuing Bank and the Lenders and their respective successors and assigns.
The foregoing is subject to the exception that, except as otherwise expressly
provided in Paragraph 15.10, the signature of
100
the Issuing Bank on any such writing shall not be required at any time unless
the relevant change affects any right, commitment or obligation hereunder of the
Issuing Bank.
13.3 Usury. In no event shall an Obligor, upon demand by the
Administrative Agent for payment of any Indebtedness relating to any Obligation
or Guaranty Obligation, by acceleration of the maturity thereof, or otherwise,
be obligated to pay interest and fees in excess of the amount permitted by
applicable law. Regardless of any provision herein or in any agreement made in
connection herewith, none of the Lenders or Agents or the Issuing Bank shall
ever be entitled to receive, charge or apply, as interest on any indebtedness
relating hereto, any amount in excess of the maximum amount of interest
permissible under applicable law. If an Agent or a Lender or the Issuing Bank
ever receives, collects or applies any such excess, it shall be deemed a partial
repayment of principal owed to it hereunder and treated as such; and if
principal is paid in full, any remaining excess shall be refunded to the
Obligors, as the case may be. This paragraph shall control every other provision
hereof, the Loan Documents and of any other agreement made in connection
herewith. As used herein, the term "applicable law" shall mean the law in effect
as of the date hereof provided, however, that in the event there is a change in
the law which results in a higher permissible rate of interest, then this
Agreement and the Loan Documents shall be governed by such new law insofar as it
relates to the permissible rate of interest as of its effective date.
13.4 Severability. If any provision hereof or of any other agreement
made in connection herewith is held to be illegal or unenforceable, such
provision shall be fully severable, and the remaining provisions of the
applicable agreement shall remain in full force and effect and shall not be
affected by such provision's severance. Furthermore, in lieu of any such
provision, there shall be added automatically as a part of the applicable
agreement a legal and enforceable provision as similar in terms to the severed
provision as may be possible.
13.5 Waiver of Jury Trial. NONE OF THE BORROWERS, THE GUARANTORS, THE
LENDERS, THE AGENTS OR THE ISSUING BANK AND NO SUCCESSOR, ASSIGN OR PERSONAL
REPRESENTATIVE OF ANY OF THEM SHALL SEEK A JURY TRIAL IN ANY LAWSUIT,
PROCEEDING, COUNTERCLAIM OR ANY OTHER LITIGATION PROCEDURE INVOLVING ANY OF THE
BORROWERS, THE GUARANTORS, THE LENDERS, THE AGENTS OR THE ISSUING BANK (OR ANY
OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF ANY OF THEM) BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, ANY COLLATERAL FOR THE
PAYMENT OF ANY OF THE OBLIGATIONS OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR
AMONG SUCH PERSONS OR ENTITIES, OR ANY OF THEM. NONE OF THE BORROWERS, THE
GUARANTORS, THE LENDERS, THE AGENTS OR THE ISSUING BANK WILL SEEK TO CONSOLIDATE
ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS
PARAGRAPH 13.5 OF THIS SECTION 13 HAVE BEEN FULLY DISCUSSED BY THE BORROWERS,
THE AGENTS, THE LENDERS AND THE ISSUING BANK, AND THE PROVISIONS HEREOF SHALL BE
SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO
ANY OTHER
101
PARTY THAT THE PROVISIONS OF THIS PARAGRAPH 13.5 OF THIS SECTION 13 WILL NOT BE
FULLY ENFORCED IN ALL INSTANCES.
13.6 Notices. Except as otherwise herein provided, any notice or other
communication required hereunder or relating to this Agreement or any other Loan
Document shall except as otherwise expressly provided herein or in such other
Loan Document be in writing and may be given by personal delivery, including by
any commercial courier or overnight delivery service, or by United States
registered or certified mail, return receipt requested, with all postage and
fees fully prepaid. Notices shall be effective upon receipt by the party being
given notice, as indicated by the return receipt if mailed; except that if a
party has relocated without providing the other party with its new address for
service of notices, or if a party refuses delivery of a notice upon its tender,
the notice shall be effective upon the attempt to serve the notice at the last
address given for service of notices upon that party. In addition to (but not in
lieu of) the foregoing, notice may be served by facsimile transmission, in which
case service shall be deemed effective only upon receipt by the party serving
the notice of telephonic or return facsimile transmission confirmation that the
party to whom the notice is directed has received a complete and legible copy of
the notice (provided that, any electronic communications from any of the
Obligors with respect to any request, transmission, document, electronic
signature, electronic mail or facsimile transmission shall be deemed binding on
the Obligors for purposes of this Agreement, provided further that any such
transmission shall not relieve the Obligors from any other obligation hereunder
to communicate further in writing). Notices shall be addressed to the party to
be notified as follows or to such other address as that party may designate for
itself by notice to the sender:
(A) if to the Administrative Agent, at:
The CIT Group/Business Credit, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Regional Manager
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
With a courtesy copy of any material notice to the Administrative
Agent's counsel at:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
(B) if to the Syndication Agent, at:
Citicorp USA Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Mr. Miles ▇▇▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
102
With a courtesy copy of any material notice to the Syndication Agent's
counsel at:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
(C) if to the Issuing Bank as follows, except as otherwise
provided in a Letter of Credit or, if applicable in the related L/C Application:
Citicorp USA, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Miles ▇▇▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
With a courtesy copy of any material notice to the Issuing Bank's
counsel at:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
(D) if to any of the Borrowers or Guarantors at:
Harvard Industries, Inc.
▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
With a courtesy copy of any material notice to the Borrowers' counsel
at:
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
(provided, however, that the failure of any Agent to provide the Borrowers' or
Guarantors' counsel with a copy of such notice shall not invalidate any notice
given to the Borrowers and shall not give the Borrowers any rights, claims or
defenses due to the failure of any Agent to provide such additional notice);
103
(E) if to any Lender hereunder,
at the address set forth for that Lender below or in the applicable Assignment
and Assumption Agreement:
As Lenders:
The CIT Group/Business Credit, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Regional Manager
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Citicorp USA Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Mr. Miles ▇▇▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
13.7 Certain Notices. (a) The Borrowers shall notify Administrative
Agent of litigation involving the Borrowers.
(b) The Borrowers shall give or cause to be given or served on
Administrative Agent and its counsel copies of all pleadings, motions,
applications, financial information and reports and other papers and documents
filed or received by the Borrowers in or relating to the Cases.
(c) The Borrowers shall notify Administrative Agent promptly of receipt
of any Asset Disposition Proceeds and, in advance, of its intention to cash any
check expected to generate or otherwise seek to receive any Asset Disposition
Proceeds, the Borrower shall take such steps as Administrative Agent may request
to cause such Asset Disposition Proceeds to be credited directly to
Administrative Agent by the financial institution or other Person making the
relevant payment.
13.8 Governing Laws. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT TO
THE EXTENT THAT ANY OTHER LOAN DOCUMENT INCLUDES AN EXPRESS ELECTION TO BE
GOVERNED BY THE LAWS OF ANOTHER JURISDICTION AND EXCEPT AS OTHERWISE REQUIRED BY
THE UNIFORM COMMERCIAL CODE.
13.9 Intentionally Deleted.
13.10 Headings. The headings of this Agreement are solely for the
purpose of identification and shall not be construed as a part of the paragraphs
or sections they head.
13.11 Replacement of Promissory Note. Upon receipt of an affidavit
of an officer of the Administrative Agent or a Lender, as applicable, as to the
loss, theft, destruction or
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mutilation of a Promissory Note or any other Loan Document, and, in the case of
any such loss, theft, destruction or mutilation, upon cancellation of such
Promissory Note or other Loan Document, the Borrowers will issue, in lieu
thereof, a replacement Promissory Note or other Loan Document in the same
principal amount thereof and otherwise of like tenor. In addition, if any Lender
shall so request, the Borrowers shall execute and deliver to such Lender,
through the Administrative Agent, Promissory Notes evidencing such Lender's
share of the Loans and, in substitution for the Promissory Notes previously
delivered to the Administrative Agent evidencing the Loans, shall execute and
deliver to the Administrative Agent new Promissory Notes evidencing the portions
thereof not evidenced by separate Promissory Notes delivered to evidence any
individual Lender's share of the Loans.
13.12 Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto were upon the same
instrument.
13.13 Waiver of Claims. (a) In consideration of the Loans to be made to
the Borrowers hereunder, the Borrowers hereby agree not to assert and
affirmatively waive any claim the Borrowers otherwise might have under Section
506(c) of the Bankruptcy Code and agree that the Collateral securing the
Obligations to the Agents, the Issuing Bank and the Lenders may not be charged
with costs or expenses.
(b) In consideration of the Loans to be made to the Borrowers and the
Letters of Credit to be issued for the account of the L/C Eligible Account
Parties hereunder, the Borrowers hereby agree not to assert and affirmatively
waive any claim the Borrowers might have under Section 510 of the Bankruptcy
Code against the Agents, the Issuing Bank and the Lenders in any form or manner
whatsoever and further releases each of the Agents, the Issuing Bank and the
Lenders from and affirmatively waive any and all claims the Borrowers may have
against the Agents, the Issuing Bank and the Lenders from the beginning of time
to the date hereof.
(c) Except as expressly permitted by this Agreement, the Borrowers
hereby agree not to request an order of the Bankruptcy Court permitting it to
use any Cash Collateral pursuant to Section 363 of the Bankruptcy Code while
this Agreement is in effect and the Obligations are outstanding.
13.14 Assignments and Participations. (a) The Borrowers may not assign
or transfer any of their rights under this Agreement, the Promissory Notes or
the other Loan Documents without the prior written consent of the Agents and the
Lenders, and any such assignment or transfer without the Agents and the Lenders'
prior written consent shall be null and void.
(b) Each Lender may sell, transfer, negotiate or assign to one or more
Eligible Assignees all or a portion of its rights and obligations hereunder
(including all of its rights and obligations with respect to the Loans, the
Revolving Loans and the L/C Participations); provided, however, that (i) if any
such assignment shall be of the assigning Lender's Revolving Loans or Revolving
Credit Commitment or any related L/C Participation, such assignment shall cover
the same percentage of such Lender's Revolving Loans and Revolving Credit
Commitment and L/C Participations, (ii) the aggregate amount being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event (if less than
the assigning Lender's entire interest) be less than $5,000,000 and,
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unless such assigning Lender is assigning its entire interest, the aggregate
amount retained by any such assigning Lender (determined as of such date) shall
in no event be less than $5,000,000, except, in either case, (A) with the
consent of the Administrative Agent or (B) if such assignment is being made to a
Lender or an Affiliate or Approved Fund of such Lender and (iii) if such
Eligible Assignee is not, prior to the date of such assignment, a Lender or an
Affiliate or Approved Fund of a Lender, such assignment shall be subject to the
prior consent of the Agents and Harvard (which consent of Harvard shall not be
unreasonably withheld or delayed) and shall not be required during the
continuance of a Default or an Event of Default.
(c) The parties to each assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording, an Assignment and
Transfer Agreement, together with any Promissory Note (if the assigning Lender's
Loans are evidenced by a Promissory Note) subject to such assignment, and if any
Revolving Loan or Revolving Credit Commitment is involved, shall at the same
time deliver a copy to the Issuing Bank. Upon such execution, delivery,
acceptance and recording and the receipt by the Administrative Agent from the
assignee of an assignment fee in the amount of $3,500 (subject to any consents
required pursuant to the preceding subparagraph), from and after the effective
date specified in such Assignment and Transfer Agreement, (i) the assignee
thereunder shall become a party hereto and, to the extent that rights and
obligations under the Loan Documents have been assigned to such assignee
pursuant to such Assignment and Transfer Agreement, have the rights and
obligations of a Lender and L/C Participant and (ii) the assignor thereunder
shall, to the extent that rights and obligations under this Agreement have been
assigned by it pursuant to such Assignment and Transfer Agreement, relinquish
its rights (except those that survive the payment in full of the Obligations)
and be released from its obligations under the Loan Documents, other than those
relating to events or circumstances occurring prior to such assignment (and, in
the case of an Assignment and Transfer Agreement covering all or the remaining
portion of an assigning Lender's rights and obligations under the Loan
Documents, such Lender shall cease to be a party hereto).
(d) The Administrative Agent shall maintain at its address referred to
in Paragraph 13.6 a copy of each Assignment and Transfer Agreement delivered to
and accepted by it and a register for the recording of the names and addresses
of the Lenders and the Commitments of and principal amount of the Loans and,
where applicable, Revolving Credit Percentage of L/C Obligations owing to each
Lender from time to time (the "Register"). Any assignment pursuant to this
Paragraph 13.14(d) shall not be effective until such assignment is recorded in
the Register. The entries in the Register shall be conclusive and binding for
all purposes absent manifest error, and each party to any of the Loan Documents
may treat each Person whose name is recorded in the Register as a Lender as such
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrowers, the Guarantors, the Agents, the Issuing Bank or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Notwithstanding anything to the contrary contained in the preceding
subparagraph of this Paragraph 13.14, the Loans (including the Promissory Notes
evidencing the Loans) are registered obligations and the right, title, and
interest of the Lenders and their assignees in and to the Loans shall be
transferable only upon notation of such transfer in the Register. A Promissory
Note shall only evidence a Lender's or an assignee's right title and interest in
and to the related Loan, and in no event is any such Promissory Note to be
considered a bearer instrument or
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obligation. This Paragraph 13.14 shall be construed so that the Loans are at all
times maintained in "registered form" within the meaning of Sections 163(f),
871(h)(2) and 881(c)(2) of the Code and any related regulations (or any
successor provisions of the Code or such regulations). Solely for purposes of
this Paragraph and for tax purposes only, the Administrative Agent shall act as
the Borrowers' agent for purposes of maintaining such notations of transfer in
the Register.
(f) Upon its receipt of an Assignment and Transfer Agreement executed
by an assigning Lender and an assignee, the Administrative Agent shall, if such
Assignment and Transfer Agreement has been completed, and subject to any
consents required pursuant to subparagraph (b) of this Paragraph 13.14, (i)
accept such Assignment and Transfer Agreement, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to
Harvard (for it to give to the other Borrowers). Within five (5) Business Days
after its receipt of such notice, the Borrowers, at their own expense, shall, if
requested by such assignee, execute and deliver to the Administrative Agent, new
Promissory Notes to the order of such assignee in an amount equal to the Loans
assigned to it pursuant to such Assignment and Acceptance and, if the assigning
Lender has surrendered any Promissory Note for exchange in connection with the
assignment and has retained Loans hereunder, new Promissory Notes to the order
of the assigning Lender in an amount equal to the Loans retained by it
hereunder.
(g) In addition to the other assignment rights provided in this
Paragraph 13.14, each Lender may assign, as collateral or otherwise, any of its
rights under this Agreement (including rights to payments of principal or
interest on the Loans) to (i) any Federal Reserve Bank pursuant to Regulation A
of the Federal Reserve Board without notice to or consent of the Borrowers or
the Administrative Agent or the Issuing Bank and (ii) any trustee for the
benefit of the holders of such Lender's securities; provided, however, that no
such assignment shall release the assigning Lender from any of its obligations
hereunder.
(h) Each Lender may sell participations to one or more Persons in or to
all or a portion of its rights and obligations under the Loan Documents. The
terms of such participation shall not, in any event, require the participant's
consent to any amendments, waivers or other modifications of any provision of
any Loan Documents, the consent to any departure by any party to a Loan
Document, or to the exercising or refraining from exercising any powers or
rights such Lender may have under or in respect of the Loan Documents (including
the right to enforce the obligations of the parties to the Loan Documents),
except if any such amendment, waiver or other modification or consent would
require the consent of all the Lenders pursuant to Section 13.17 of this
Agreement. In the event of the sale of any participation by any Lender, (A) such
Lender's obligations under the Loan Documents shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties for the performance
of such obligations, (C) such Lender shall remain the holder of such Obligations
for all purposes of this Agreement and other relevant Loan Documents and (D) the
Obligors, the Administrative Agent and the other Lenders and the Issuing Bank
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and other relevant
Loan Documents. Each participant shall be entitled to the benefits of Paragraph
9.9, Paragraph 9.11 and Paragraph 9.12 as if it were a Lender; provided,
however, that anything herein to the contrary notwithstanding, the Borrowers
shall not, at any time, be obligated to make under Paragraph 9.9, Paragraph 9.11
and Paragraph 9.12 to the participants in the rights and obligations of any
Lender (together with such Lender) any payment in excess of the amount the
Borrowers
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would have been obligated to pay to such Lender in respect of such interest had
such participation not been sold.
(i) The Obligors authorize each Lender to disclose to any participant
or purchasing lender (each, a "Transferee") and any prospective Transferee any
and all financial information in such Lender's possession concerning such
Obligors which has been delivered to such Lender by or on behalf of an Obligor
pursuant to this Agreement or which has been delivered to such Lender by or on
behalf of an Obligor in connection with such Lender's credit evaluation of an
Obligor prior to entering into this Agreement, provided that such Transferee
agrees in writing to hold such information, to the extent it is marked
confidential, in confidence.
(j) Notwithstanding any of the foregoing in this Paragraph 13.14, the
Obligors shall, if necessary, execute any documents reasonably required to
effectuate an assignment or transfer by a Lender contemplated by this Paragraph
13.14, including, without limitation, amendments to the Agreement, the
Promissory Notes or any other Loan Document, as the Administrative Agent shall
reasonably deem necessary to effect the foregoing.
13.15 Currency. All Obligations and Guaranty Obligations shall be
payable in U.S. dollars. The foregoing reference to U.S. dollars is of the
essence. The Obligations and Guaranty Obligations shall, notwithstanding any
payment in any other currency (whether pursuant to a judgment or otherwise), be
discharged only to the extent of the amount in U.S. dollars that the
Administrative Agent may, in accordance with normal banking procedures, purchase
with the sum paid in that other currency (after deducting any premium and costs
of exchange) on the Business Day immediately following the day on which the
Administrative Agent receives that payment. If the amount in U.S. dollars that
may be so purchased for any reason falls short of the amount originally due, the
Obligors shall pay to the Administrative Agent such additional amount, in U.S.
dollars, as is necessary to compensate for the shortfall. Any Obligation and
Guaranty Obligation not discharged by that payment shall, to the fullest extent
permitted by applicable law, be due as a separate and independent Obligation or
Guaranty Obligation, as applicable, and, until discharged as provided herein,
shall continue in full force and effect.
13.16 Rate of Interest for Canadian Companies. For purposes of
disclosure pursuant to the Interest Act (Canada), the yearly rate of interest to
which any rate of interest payable under this Agreement which is to be
calculated on any basis other than a full calendar year is equivalent may be
determined by multiplying such rate by a fraction, the numerator of which is the
number of days in the calendar year in which the period for which the interest
at such rate is payable ends and the denominator of which is the number of days
comprising such other basis.
13.17 Amendments; Waivers. (a) No amendment or waiver of any provision
of this Agreement or any other Loan Document nor consent to any departure by any
Borrower or Guarantor therefrom shall in any event be effective unless (i) the
same shall be in writing and signed by the Lenders and (ii) in the judgment of
the Borrowers, the Agents and the Lenders, such waiver or amendment is either
non-prejudicial to the rights of third parties or is not material and, in the
case of any amendment, by the Borrowers or, if a party to the relevant Loan
Documents, the Guarantors, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that (A) no amendment, waiver or consent shall, unless
in writing and signed by the Administrative Agent in
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addition to the Lenders, affect the rights or duties of the Administrative Agent
under this Agreement or the other Loan Documents, (B) no amendment, waiver or
consent shall, unless in writing and signed by the Issuing Bank in addition to
the Lenders, affect the rights or duties of the Issuing Bank under this
Agreement or the other Loan Documents, and (C) no amendment, waiver or consent
shall, unless in writing and signed by the Syndication Agent, in addition to the
Lenders, affect the rights or duties of the Syndication Agent under this
Agreement or the other Loan Documents.
(b) The Administrative Agent may, but shall have no obligation to, with
the written concurrence of any Lender, execute amendments, modifications,
waivers or consents on behalf of such Lender. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on the Obligors (or any of them) in any
case shall entitle the Obligors (or any of them) to any other or further notice
or demand in similar or other circumstances.
13.18 Confidentiality. The Lenders, the Agents and the Issuing Bank
agree to maintain the confidentiality of any non-public information provided by
the Obligors to them, in the ordinary course of their business, provided that
the foregoing confidentiality provision shall terminate one (1) year after the
termination of the Line of Credit, and provided further that the Lenders may
disclose such information (a) after such information shall have become public
other than through a violation of this Paragraph 13.18 of this Section 13, (b)
to the extent required by statute, rule, regulation or judicial process, (c) to
counsel for any of the Lenders or any Agent, (d) to bank examiners or any other
regulatory authority having jurisdiction over any Lender or any Agent, or to
auditors or accountants, (e) to any Agent, or any Lender, (f) in connection with
any litigation to which any one or more of the Lenders or any Agent is a party,
or in connection with the enforcement of rights or remedies hereunder or under
any other Loan Document, (g) to a subsidiary or affiliate of such Lender, (h) to
any assignee or participant (or prospective assignee or participant) so long as
such assignee or participant agrees to be bound by the provisions hereof or (i)
to the Junior Lien Lender.
13.19 Contribution.(a) Notwithstanding anything to the contrary in
Paragraph 10.2 of Section 10 or Paragraph 15.4 of Section 15, if any Obligor
makes any payment in respect of any of the Obligations or Guaranty Obligations,
other than Obligations in respect of Loans to the extent the proceeds thereof
were received by or for such Obligor, through Harvard or otherwise (an "Obligor
Payment") and, taking into account all other Obligor Payments then previously
made or concurrently being made by any of the other Obligors, the amount of such
Obligor Payment exceeds the amount such Obligor would otherwise have paid if
each Obligor had paid the aggregate Obligations satisfied by such Obligor
Payment in the same proportion as such Obligor's Allocable Amount (as defined
below), determined immediately prior to such Obligor Payment, bore to the
aggregate Allocable Amounts of all the Obligors as determined immediately prior
to the making of such Obligor Payment, then, following full, final and
indefeasible payment of the Obligations and the Guaranty Obligations and the
termination of the Commitments, such Obligor shall be entitled to receive
contribution and indemnification payments from, subject to an applicable
Bankruptcy Court order, and be reimbursed by, each other Obligor for the amount
of the excess, pro rata, based upon their respective Allocable Amounts of the
Obligors in effect immediately prior to such Obligor Payment.
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(b) As of any date of determination, the "Allocable Amount" of each
Obligor shall be equal to the maximum amount of the claim that could then be
recovered from such Obligor under this Paragraph 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 Paragraph 13.19 is intended only to define certain relative
rights of the Obligors vis-a-vis each other, and nothing set forth in this
Paragraph 13.19 is intended to or shall impair the obligations of the Obligors
to pay any amounts as and when the same shall become due and payable in
accordance with the terms of this Agreement, as their joint and several
obligations in respect of the Obligations, in the case of the Borrowers, as
their joint and several obligations in respect of the Harvard Obligations, in
the case of the Guarantors, and as their own Guaranty Obligations, in the case
of the Guarantors (to the extent those Guaranty Obligations exceed the Harvard
Obligations). Nothing in this Paragraph 13.19 shall limit the liability of any
Borrower to pay the Loans made directly or indirectly to that Borrower and
accrued interest and expenses with respect thereto, for which such Borrower
shall be primarily liable.
(d) The parties hereto acknowledge that the rights of contribution and
indemnification provided for in this Paragraph 13.19 shall constitute assets of
the Obligor to which such contribution and indemnification is owing.
(e) The rights of the indemnifying Obligors against other Obligors
under this Paragraph 13.19 shall be exercisable upon the full, final and
indefeasible payment of the Obligations and the Guaranty Obligations and the
termination of the Commitments.
SECTION 14. AGREEMENT BETWEEN THE LENDERS
14.1 Disbursements. (a) The Administrative Agent, for the account of
the Lenders, shall disburse all loans and advances to the Borrowers to be made
hereunder by the Lenders and shall handle all collections of Collateral and
repayment of Obligations and Guaranty Obligations. It is understood that for
purposes of advances to the Borrowers and for purposes of this Section 14 the
Administrative Agent is using the funds of the Administrative Agent.
(b) Unless the Administrative Agent shall have been notified in writing
by any Lender prior to any advance to the Borrowers that such Lender will not
make the amount which would constitute its share of the borrowing of any Loan on
such date available to the Administrative Agent, the Administrative Agent may
assume that such Lender shall make such amount available to the Administrative
Agent on a Settlement Date, and the Administrative Agent may, in reliance upon
such assumption, make available to the Borrowers a corresponding amount. A
certificate of the Administrative Agent submitted to any Lender with respect to
any amount owing under this subsection shall be conclusive, absent manifest
error. If such Lender's share of such borrowing is not in fact made available to
the Administrative Agent by such Lender on the Settlement Date, the
Administrative Agent shall be entitled to recover such amount with interest
thereon at the rate per annum applicable to Revolving Loans hereunder, on
demand, from the Borrowers without prejudice to any rights which the
Administrative Agent may have against such Lender hereunder. Nothing contained
in this subsection shall relieve any Lender which has failed to make available
its ratable portion of any borrowing hereunder from
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its obligation to do so in accordance with the terms hereof. Nothing contained
herein shall be deemed to obligate the Administrative Agent to make available to
the Borrowers the full amount of a requested advance when the Administrative
Agent has any notice (written or otherwise) that any of the Lenders will not
advance its ratable portion thereof.
14.2 Lender and Administrative Agent Adjustments. (a) On each
Settlement Date, the Administrative Agent and the Lenders shall (subject to
Paragraph 14.2(c)) each remit to the other, in immediately available funds, all
amounts necessary so as to ensure that, as of the Settlement Date, the Lenders
shall have their proportionate shares of all outstanding Obligations and
Guaranty Obligations as provided below in this Paragraph 14.2 (where "Lender"
shall be understood to include the Administrative Agent), each of the Revolving
Facility Lenders shall have paid to the Administrative Agent an amount equal to
such Revolving Facility Lender's Revolving Credit Percentage of each payment
made by the Administrative Agent to the Issuing Bank, on behalf of the Revolving
Facility Lenders, pursuant to Paragraph 4.7 of Section 4 of this Agreement
(taking into account the provisions of Paragraph 14.2(b)), and each Revolving
Facility Lender shall have received its Revolving Credit Percentage of each
payment made by the Issuing Bank to the Administrative Agent for distribution
among the Revolving Facility Lenders as contemplated in Paragraph 4.6(d) of
Section 4 of this Agreement.
(b) The amounts payable by each Revolving Facility Lender to the
Administrative Agent on account of such Lender's Revolving Facility Percentage
of each such payment made on its behalf by the Administrative Agent to the
Issuing Bank shall be increased by the interest payable to the Issuing Bank on
the same percentage of such payment pursuant to Paragraph 4.7 of Section 4
hereof, to the extent paid by the Administrative Agent. The failure of any
Revolving Facility Lender to make available to the Administrative Agent its
Revolving Credit Percentage or other relevant proportionate share of any such
payment shall not relieve any other Lender of its obligation hereunder to make
available to the Administrative Agent its Revolving Credit Percentage or other
relevant proportionate share of any payment on a Settlement Date, but no Lender
shall be responsible for the failure of any other Lender to make available to
the Administrative Agent such other Revolving Facility Lender's Revolving Credit
Percentage or other relevant proportionate share of any such payment.
(c) The Administrative Agent is hereby irrevocably authorized by each
of the Lenders to make the settlements provided for in Paragraph 14.2(a) on a
net basis, setting off against the amounts otherwise distributable to any Lender
by the Administrative Agent all amounts payable by such Lender to the
Administrative Agent hereunder at the time, but each Lender shall remain
responsible for remitting to the Administrative Agent and the Lenders the net
amount payable by such Lender to the Administrative Agent or another Lender (as
the case may be) on each Settlement Date.
(d) In the event that any Lender shall obtain payment in respect of any
Loan, L/C Obligations or any other Obligation or Guaranty Obligation owing to
such Lender under this Agreement or any other Loan Document through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of Title 11 of the United States Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Agreement,
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such Lender shall promptly, by way of assignment or participation, purchase from
the other Lenders an interest (an "Interest") in such Loans, L/C Obligations and
other Obligations and Guaranty Obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all Lenders
share such payment in accordance with their respective ratable shares as
provided for in this Agreement. The Lenders further agree among themselves that
if payment to a Lender obtained by such Lender through the exercise of a right
of setoff, banker's lien, counterclaim or other event as aforesaid shall be
rescinded or must otherwise be restored, each Lender which shall have shared the
benefit of such payment shall, by repurchase of the Interest theretofore sold,
return its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each Lender whose payment shall have
been rescinded or otherwise restored.
(e) The Obligors agrees that any Lender so purchasing such an Interest
by way of participation may, to the fullest extent permitted by law, exercise
all rights of payment, including setoff, banker's lien or counterclaim, with
respect to such Interest as fully as if such Lender were a holder of such Loan,
L/C Obligations or other obligation in the amount of such Interest. Except as
otherwise expressly provided in this Agreement, if any Lender or the
Administrative Agent shall fail to remit to the Administrative Agent or any
other Lender an amount payable by such Lender or the Administrative Agent to the
Administrative Agent or such other Lender pursuant to this Agreement on the date
when such amount is due, such payments shall be made together with interest
thereon for each date from the date such amount is due until the date such
amount is paid to the Administrative Agent or such other Lender at a rate per
annum equal to the Federal Funds Rate. If under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a setoff to which this Paragraph applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders under this Paragraph to share in the
benefits of any recovery on such secured claim.
14.3 Statement of Accounts. The Administrative Agent shall forward to
each Lender, at the end of each month, a copy of the account statement rendered
by the Administrative Agent hereunder to the Obligors.
14.4 Sharing of Payments. The Administrative Agent shall, after receipt
of any interest and fees earned under this Agreement, promptly remit to the
Lenders: (a) their respective pro rata portions of all fees, provided, however,
that the Lenders (other than CIT in its role as the Administrative Agent) shall
(x) not share in the fees provided for in Paragraphs 9.8, 9.7 and 9.4 of Section
9, as applicable; and (y) receive their respective shares of the DIP Facility
Fee in accordance with their respective agreements with the Administrative
Agent; (b) interest computed at the rate and as provided for in Section 9 of
this Agreement on all outstanding amounts advanced by the Lenders on each
Settlement Date, prior to adjustment, that are subsequent to the last remittance
by the Administrative Agent to the Lenders of the Borrowers' interest; (c) their
respective pro rata portions of all principal repaid on any Loan; and (d)
interest on the Loans computed at the rate and as provided for in Section 9 of
this Agreement.
14.5 Pro Rata Responsibility. The Borrowers hereby agree that each
Lender is acting hereunder individually and is solely responsible for its
portion of the Line of Credit and that the Issuing Bank, the Agents and the
other Lenders shall not be responsible for, nor assume any
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obligations for, the failure of any other Lender to make available its portion
of the Line of Credit. Further, should any Lender refuse to make available its
portion of the Line of Credit, then the other Lenders may, but without
obligation to do so, increase, unilaterally, their respective portions of the
Line of Credit, in which event the Borrowers are so obligated to the other
Lenders.
SECTION 15. AGENTS AND ISSUING BANK
15.1 Appointment of Agent. Each Lender hereby irrevocably designates
and appoints CIT as the Administrative Agent for the Lenders and CUSA as
Syndication Agent for the Lenders under this Agreement and any ancillary loan
documents and irrevocably authorizes CIT as the Administrative Agent for such
Lender, and CUSA as Syndication Agent for such Lender, to take such action on
its behalf under the provisions of this Agreement and all ancillary documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent or the Syndication Agent, as the case may be, by the
terms of this Agreement and all ancillary documents together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement, neither the Administrative Agent nor
the Syndication Agent shall have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement and the ancillary documents or
otherwise exist against the Administrative Agent or the Syndication Agent.
Further, without limiting any of the foregoing, each Lender hereby confirms its
irrevocable authorization to the Administrative Agent to execute the
acknowledgments and consents required (1) by General Motors Corporation in
connection with its interest under the Access and Security Agreements or (2) in
connection with any Participating Customer Agreement, and in each case ratifies
such action by the Administrative Agent.
15.2 Delegation. (a) The Administrative Agent may execute any of its
duties under this Agreement and all ancillary documents by or through agents or
attorneys-in-fact and shall be entitled to the advice of counsel concerning all
matters pertaining to such duties or functions.
(b) The Syndication Agent (in its capacity as such, as distinct from
CUSA, acting as Lender) shall have no duties, obligations or liabilities
hereunder. It may exercise any rights given to it hereunder or under any
ancillary documents by or through agents or other attorneys-in-fact and shall be
entitled to the advice of counsel concerning all matters pertaining to this
Agreement and the other Loan Documents.
15.3 Exculpatory Provisions. None of the Agents or the Issuing Bank nor
any of the officers, directors, employees, agents, or attorneys-in-fact of any
of them shall be (i) liable to any Lender for any action lawfully taken or
omitted to be taken by it or such Person under or in connection with any Loan
Document or all ancillary documents (except for its or such Person's own gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction), or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Obligors or any
officer thereof contained in any Loan Document or ancillary document or
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent or such Agent under or in connection
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with, any Letter of Credit, all ancillary documents or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any Loan Document,
all ancillary documents or for any failure of the Obligors to perform their
obligations thereunder. The Agents and the Issuing Bank shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement and all ancillary documents or to inspect the properties, books or
records of the Obligors.
15.4 Reliance. Each of the Obligors, Agents and the Issuing Bank shall
be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Obligors), independent accountants and other experts selected by such Agent or
the Issuing Bank. Each Agent and the Issuing Bank shall be fully justified in
failing or refusing to take any action under this Agreement and all ancillary
documents unless it shall first receive such advice or concurrence of the
Lenders, or the Required Lenders, as the case may require, as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Each Agent and the Issuing Bank
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and all ancillary documents in accordance with a request of
the Lenders, or the Required Lenders, as the case may be, and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
the Lenders. The foregoing is without prejudice to Paragraph 4.9 of Section 4
relating to certain actions and reliance by the Issuing Bank.
15.5 Notice of Default. In no circumstance will the Syndication Agent
or the Issuing Bank be deemed to have knowledge or notice of any Default or
Event of Default or any duty or responsibility relating thereto. The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received written notice from a Lender or Harvard
describing such Default or Event of Default. In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall
promptly give notice thereof to the Lenders and the Issuing Bank. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Lenders, or Required
Lenders, as the case may require; provided that unless and until the
Administrative Agent shall have received such direction, the Administrative
Agent may in the interim (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable and in the best interests of the Lenders.
15.6 Non-Reliance on Agents, Issuing Bank and Other Lenders. Each
Lender expressly acknowledges that neither of the Agents nor the Issuing Bank
nor any of the officers, directors, employees, agents or attorneys-in-fact of
any of them has made any representations or warranties to it and that no act by
such Agent or the Issuing Bank hereinafter taken, including any review of the
affairs of the Obligors shall be deemed to constitute any representation or
warranty by such Agent or the Issuing Bank to any Lender. Each Lender represents
to each Agent, the Issuing Bank and each other Lender that it has, independently
and without reliance
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upon such Agent, the Issuing Bank or any other Lender and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, financial and
other condition and creditworthiness of the Obligors and made its own decision
to enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon either Agent, the Issuing Bank 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 analysis, appraisals
and decisions in taking or not taking action under the Agreement and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition or creditworthiness of the
Obligors. The Administrative Agent, however, shall provide the Lenders with
copies of all financial statements, projections and business plans which come
into the possession of the Administrative Agent in its capacity as such pursuant
to this Agreement.
15.7 Indemnification by Lenders. (a) Each of the Lenders agrees to
indemnify each Agent in its capacity as such (to the extent not reimbursed by
the Obligors and without limiting the obligation of the Obligors to do so), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements (including, without
limitation, all Out-of-Pocket Expenses) of any kind whatsoever (including
negligence on the part of such Agent) which may at any time be imposed on,
incurred by or asserted against such Agent in any way relating to or arising out
of this Agreement or any ancillary documents or any documents contemplated by or
referred to herein or the transactions contemplated hereby or any action taken
or omitted by such Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from such Agent's gross
negligence or willful misconduct, as finally determined by a court of competent
jurisdiction. The agreements in this paragraph shall survive the payment of the
Obligations and the Guaranty Obligations.
(b) The Administrative Agent will use its reasonable business judgment
in handling the collection of the Accounts, enforcement of its rights hereunder
and realization upon the Collateral but shall not be liable to the Lenders or
any other Person for any action taken or omitted to be taken in good faith or on
the written advice of counsel or otherwise as contemplated in Paragraph 15.4 of
this Section 15. Each of the Lenders expressly releases the Administrative Agent
from any and all liability and responsibility (express or implied), for any
loss, depreciation of or delay in collecting or failing to realize on any
Collateral, the Obligations, the Guaranty Obligations or any guaranties therefor
(including the Guaranty) and for any mistake, omission or error in judgment in
passing upon or accepting any Collateral or in making (or in failing to make)
examinations or audits or for granting indulgences or extensions to the
Obligors, any account debtor or any guarantor, other than resulting from the
Administrative Agent's gross negligence or willful misconduct, as finally
determined by a court of competent jurisdiction.
15.8 The Agents and the Issuing Bank in Their Individual Capacities.
Each of the Issuing Bank and each Agent may make loans to, and generally engage
in any kind of business with the Borrowers as though it were not an Agent or the
Issuing Bank hereunder. With respect to its Loans made or deemed made by it or
obligations hereunder as Lender, the Administrative Agent or the Syndication
Agent or Issuing Bank, as the case may be, shall have the same rights
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and powers, duties and liabilities under this Agreement and the other Loan
Documents as any other Lender and may exercise the same as though it was not the
Administrative Agent or the Syndication Agent or the Issuing Bank, as the case
may be, and the terms "Lender" and "Lenders" shall include each of the
Administrative Agent and the Syndication Agent and the Issuing Bank in its
individual capacity as a Lender.
15.9 Successor Agents. An Agent may resign as the Administrative Agent
or Syndication Agent (as the case may be) upon 30 days' notice to the Lenders
and such resignation shall be effective upon the appointment of a successor
Agent acting in the same capacity. If either the Administrative Agent or the
Syndication Agent shall resign as Administrative Agent or Syndication Agent, as
the case may be, then the Lenders shall appoint a successor Administrative Agent
or, if appropriate, Syndication Agent, as applicable, for the Lenders whereupon
such successor Administrative Agent or Syndication Agent shall succeed to the
rights, powers and duties of the Administrative Agent or Syndication Agent, as
applicable, and the term "Administrative Agent" or "Syndication Agent", as the
case may be, shall mean such successor agent effective upon its appointment, and
the former Administrative Agent `s or Syndication Agent's (as the case may be)
rights, powers and duties as Administrative Agent or Syndication Agent (as the
case may be) shall be terminated, without any other or further act or deed on
the part of such former Agent or any of the parties to this Agreement. After any
retiring Administrative Agent's or Syndication Agent's (as the case may be)
resignation hereunder as the Administrative Agent or Syndication Agent, as
applicable, the provisions of this Section 15 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was the Administrative
Agent or Syndication Agent, as applicable.
15.10 Arrangements Requiring Consent of Lenders; Administrative Agent's
Discretion. Notwithstanding anything contained in this Agreement to the
contrary, the Administrative Agent shall not, without the prior written consent
of all Lenders, knowingly make any Voluntary Overadvance at the request of any
of the Borrowers, provided that the foregoing limitations shall not prohibit or
restrict (x) Nonconsensual Overadvances or (y) Overadvances by the
Administrative Agent to preserve and protect Collateral and immediately after
such Voluntary Overadvance the aggregate amount of the Revolving Loans and the
outstanding Letters of Credit would not exceed the Revolving Credit Line
("Administrative Agent Permitted Overadvances"). Subject to the provisions of
Section 13, Paragraph 13.2 and the provisions of this Paragraph 15.10 of Section
15 of this Agreement, in all other respects the Administrative Agent is
authorized by each of the Lenders to take such actions or fail to take such
actions under this Agreement and any other Loan Document if the Administrative
Agent, in its reasonable discretion, deems such to be advisable and in the best
interest of the Lenders. Notwithstanding any provision to the contrary contained
in this Agreement (including the provisions of Section 13, Paragraphs 13.2 and
13.17 and this Section 15, Paragraph 15.10 hereof) the Administrative Agent is
authorized to take such actions or fail to take such actions in connection with
(a) the exercise of (i) any and all rights and remedies under this Agreement
(including but not limited to the exercise of rights and remedies under Section
11, Paragraph 11.2 of this Agreement) and (ii) its discretion in (x) determining
compliance with the eligibility requirements of Eligible Accounts Receivable
and/or Eligible Inventory and establishing reserves against Availability in
connection therewith and/or (y) the making of Administrative Agent Permitted
Overadvances, and/or (b) the release of Collateral not to exceed $250,000 in the
aggregate during any Fiscal Year, and/or (c) curing any ambiguity, defect or
inconsistency in the terms of this Agreement;
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provided that the Administrative Agent, in its reasonable discretion, deems such
to be advisable and in the best interests of the Lenders. In the event the
Administrative Agent terminates this Agreement pursuant to the written
instructions of the Required Lenders, the Administrative Agent will cease making
any loans or advances upon the effective date of termination except for any
loans or advances which the Administrative Agent deems, in its sole discretion,
to be reasonably required to maintain, protect or realize upon the Collateral.
15.11 Nonconsenting Lenders. In the event any Lender's consent is
required pursuant to the provisions of this Agreement and such Lender does not
respond to any request by the Administrative Agent for such consent within ten
(10) days after such request is made to such Lender, such failure to respond
shall be deemed a consent. In addition, in the event that any Lender declines to
give its consent to any such request, it is hereby mutually agreed that the
Administrative Agent and/or any other Lender shall have the right (but not the
obligation) to purchase such Lender's share of the Loans and, if applicable, L/C
Participations for the full amount thereof together with accrued interest
thereon to the date of such purchase.
15.12 Refund of Payments. If the Administrative Agent is required at
any time to return to any Obligor or to a trustee, receiver, liquidator,
custodian or other similar official any portion of the payments received by the
Administrative Agent in respect of any of the Obligations in connection with the
Cases or any bankruptcy or similar proceeding with respect to any Guarantor or
any other Person or entity or otherwise, then each Lender shall, on demand of
the Administrative Agent, forthwith return to the Administrative Agent its
ratable share of any such payments made to such Lender by the Administrative
Agent, together with its ratable share of interest and/or penalties, if any,
payable by the Lenders. This provision shall survive the termination of this
Agreement.
15.13 Relationship. The Obligors acknowledge that the relationship
between and among the Agents and the Lenders and the Issuing Bank, shall not be
construed as giving rise to or constituting a joint venture, and the Agents, the
Issuing Bank, the Lenders and the Obligors agree that none of the Agents or
Lenders or the Issuing Bank is a partner or joint venturer with the Obligors or
with any entity comprising the Obligors, in any manner whatsoever.
SECTION 16. GUARANTY
16.1 Guaranty. (a) Each Guarantor, as primary obligor and not merely as
surety, hereby irrevocably, absolutely and unconditionally ratifies, confirms
and acknowledges the continued force and effect of the guaranties given in
connection with the Pre-Petition Agreements, and hereby further gives additional
guaranty, to each Lender, to the Issuing Bank and to each Agent (each, and the
respective successors, transferees and assigns of each, a "Beneficiary") the
prompt and full payment in cash as and when due (whether at stated maturity or
by required or optional prepayment, acceleration, demand or otherwise), of all
existing and future Obligations payable by Harvard, hereunder and under the
other Loan Documents, each Guarantor acknowledging and confirming that this
Agreement and the Loan Documents and the Pre-Petition Agreements together
constitute an amendment and restatement of the obligations guaranteed under the
existing guaranties and security therefor, and that the obligations guaranteed
include but are not limited to the Obligations payable by Harvard in respect of
the principal of and interest (including, without limitation, all interest that
accrues after the
117
commencement of any case, proceeding or other action relating to bankruptcy,
insolvency or reorganization of any Obligor) on the Loans, Reimbursement
Obligations, and the fees, expenses and other amounts payable under this
Agreement or any other Loan Document and specifically including all amounts
payable by Harvard arising from its joint and several obligations as a
co-obligor in respect of the Obligations, whether its obligations in respect of
such amounts are in the nature of a guaranty or otherwise (all such amounts
payable by Harvard in respect of the Obligations, the "Harvard Obligations").
The guaranty set forth in this Section 16 is the "Guaranty" referred to herein
and in the other Loan Documents. The statement of account issued by the
Administrative Agent to Harvard as to the amount and status of the Harvard
Obligations shall be conclusive in the absence of manifest error.
(b) If any Harvard Obligation is not paid as and when due by Harvard,
each Guarantor shall pay such Harvard Obligation on demand, together with
interest thereon, which shall accrue from and including the date such Harvard
Obligation fell due, to but excluding the date such Harvard Obligation is paid
in full, at the highest rate of interest then applicable to any of the Harvard
Obligations at the time which is overdue and unpaid. This interest shall be
calculated on the basis of a year of 360 days for the actual number of days
elapsed in the relevant period.
(c) Each Guarantor shall, on demand, pay to each Beneficiary any and
all expenses (including reasonable fees and expenses of counsel) which may be
paid or incurred by such Beneficiary in collecting any or all of the Harvard
Obligations and/or enforcing the rights of the Beneficiaries against such
Guarantor under the Guaranty, and the Guaranty specifically includes all such
expenses, as well as all obligations of such Guarantor (in respect of Taxes and
otherwise, including, in the case of Trim Trends, relating to Letters of Credit
issued for its account) provided for in this Agreement or any other Loan
Document (together with the Harvard Obligations, such obligations, in relation
to each Guarantor, its "Guaranty Obligations").
16.2 Guaranty Obligations Unconditional. (a) Each Guarantor shall
perform its obligations under the Guaranty in respect of the Harvard Obligations
so that they are paid strictly in accordance with the terms of the Loan
Documents.
(b) Without limiting the foregoing, this Guaranty is a guaranty of
payment by each Guarantor, and not merely a guaranty of collection, and shall
not be affected in any way by the absence of, or conditioned or contingent upon,
any action to obtain payment of any of the Harvard Obligations (by way of setoff
or otherwise) from Harvard or any other Person who now or hereafter may be
responsible for all or any part of the Harvard Obligations, including any other
Guarantor or any Borrower, or from any Collateral or other property, and each
Guarantor specifically waives any argument or defense that the Beneficiaries or
any of them make, seek or exhaust any recourse of any nature, including any
right to realize as to security held, against any other Person before making
demands under this Guaranty. In addition, this Guaranty shall be absolute and
unconditional irrespective of:
(i) any change in, or in the interpretation or application of,
the law in any jurisdiction which affects or purports to
affect any of the terms giving rise to any of the Harvard
Obligations or the rights of any Beneficiary with respect
thereto;
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(ii) any lack of validity or enforceability, any irregularity,
default or omission in any relevant documentation,
including, without limitation, any Loan Document, of any of
the Harvard Obligations, or any delay, failure or omission
to enforce or agreement not to enforce, or the stay or
enjoining, by order of court, by operation of law or
otherwise, of the exercise of any right with respect to the
foregoing (including, in each case, without limitation, as
a result of the insolvency, bankruptcy or reorganization of
any Beneficiary, Harvard, any other Obligor or any other
Person);
(iii) any change in the time, manner or place of payment of, or
in any other term in respect of, all or any of the Loan
Documents;
(iv) any exchange or release of, or non-perfection of any lien
on or in, any Collateral, any release or amendment or
waiver of or consent to any departure from any other
guaranty or security, for all or any of the Harvard
Obligations or any release of any Borrower or any other
Guarantor from all or any part of its obligations under
this Guaranty, any other part of this Agreement or any of
the terms of any other Loan Document;
(v) any claim, set-off, counterclaim, defense or other rights,
including, without limitation, any as to marshalling of any
security or other guaranties that any Obligor may have at
any time and from time to time against any Beneficiary or
any other Person, whether in connection with the
transactions contemplated in the Loan Documents or any
other transaction;
(vi) the merger, consolidation or amalgamation of Harvard with
or into any other Person or the loss by Harvard or any
other Guarantor of its separate legal identity, or its
ceasing to exist; or
(vii) any other circumstances which might otherwise constitute a
defense based on suretyship or otherwise available to, or a
discharge of, any other Obligor or any other Guarantor in
respect of (A) the Harvard Obligations or the Guaranty
Obligations, (B) the release of or waiver of any rights
against any other Obligor and the settlement, compromise or
release of any other Obligor, or (C) the failure by any
Beneficiary to attempt, or delay by it in attempting, to
collect any Guaranty Obligations from any other Guarantor
or any Obligations from any Borrower or to realize upon any
Collateral; and the Beneficiaries may deal with Harvard,
and any of the Obligors as it sees fit without prejudice to
or effect on this Guaranty or the security for the Guaranty
Obligations;
and each Guarantor hereby irrevocably waives all defenses that it might
otherwise have based on any of the matters identified above in this Paragraph
16.2 or based on any other circumstances other than, in each case, the full,
final and indefeasible payment of all Harvard Obligations and all Guaranty
Obligations of such Guarantor.
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(c) This Guaranty is a continuing guaranty and shall remain in full
force and effect in relation to each Guarantor until the payment in full and
indefeasible satisfaction of (i) all the Harvard Obligations and (ii) all of
such Guarantor's Guaranty Obligations. This Guaranty shall continue to be
effective or shall be reinstated, as the case may require, if at any time any
payment, or any part thereof, of any of the Harvard Obligations is rescinded or
must otherwise be returned by any Beneficiary upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Harvard or any Guarantor or
otherwise, all as though such payment had not been made. This Guaranty shall not
be affected by any change in status, of any kind, of Harvard, any Borrower or
any Guarantor or of any Beneficiary.
(d) Without the necessity of any reservation of rights against any
Obligor and without notice to or further assent by any Obligor, any demand for
payment of any of the Harvard Obligations made by any Beneficiary to any
Guarantor may be rescinded by such Beneficiary and any of the Harvard
Obligations continued after such rescission.
(e) Each Guarantor confirms there has been no agreement, promise,
representation or stipulation by any Person which in any way affects this
Guaranty or its Guaranty Obligations.
16.3 Waivers. To the extent permitted by applicable law (and without
limiting the waivers of defenses of the Guarantors in Paragraph 16.2 of this
Section 16), each Guarantor hereby irrevocably waives:
(a) promptness and diligence;
(b) notice of or proof of reliance by any Beneficiary upon this
Guaranty or acceptance of this Guaranty;
(c) notice of the incurrence of any Harvard Obligation or of any
Guaranty Obligation of any Guarantor, or of the renewal, extension or accrual of
any Harvard Obligation or Guaranty Obligation;
(d) notice of any actions taken by any Beneficiary, Harvard, any other
Borrower, any Guarantor or any other party to any Harvard Obligation Document;
(e) all other notices, demands and protests, and all other formalities
of every kind in connection with the enforcement of the Harvard Obligations or
the Guaranty Obligations of any Guarantor, the omission of or delay in which,
but for the provisions of this Paragraph 16.3, might constitute grounds for
relieving Harvard of any of the Harvard Obligations or any Guarantor of any of
its Guaranty Obligations;
(f) any requirement that any Beneficiary protect, secure, perfect or
insure any lien on any Collateral or other property subject thereto or exhaust
any right or take any action against Harvard, any other Borrower or any other
Guarantor or any other Person or any Collateral; and
(g) each other circumstance, other than the payment of the Harvard
Obligations in full, that might otherwise result in a discharge or exoneration
of, or constitute a defense to, such Guarantor's obligations under the Guaranty.
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16.4 Subrogation. Each Guarantor hereby irrevocably waives and releases
any rights which it may acquire by way of subrogation under or in respect of
this Guaranty, whether acquired by any payment made hereunder, by any setoff or
application of funds of Harvard or any other Guarantor by any Beneficiary or
otherwise. Each Guarantor further hereby agrees that, if any of the Harvard
Obligations is paid (by way of setoff or otherwise) by such Guarantor, any claim
or right that such Guarantor may, as a result, have against any other Guarantor
or any Borrower, for contribution or otherwise, shall be subordinate to the
rights and claims of the Beneficiaries in respect of all Harvard Obligations and
the Guaranty Obligations of each Guarantor, without limitation, as to any
increases in the Harvard Obligations or the Guaranty Obligations arising
hereunder or thereunder, and shall not be payable until all the Harvard
Obligations and the Guaranty Obligations of each Guarantor have been fully,
finally and indefeasibly paid in full in cash and, in the event of any
insolvency, bankruptcy, receivership, liquidation, reorganization or other
similar proceeding under the laws of any jurisdiction relating to any Guarantor,
its debts or its assets, whether voluntary or involuntary, all such Harvard
Obligations and Guaranty Obligations shall be fully, finally and indefeasibly
paid in cash before any payment or distribution of any character, whether in
cash, securities or other property, shall be made by any Guarantor to any other
Obligor therefor. If, notwithstanding the foregoing, any Guarantor receives, in
respect of any payment made by it under the Guaranty, any amount from Harvard or
any other Borrower or another Guarantor, such Guarantor shall promptly pay such
amount received by it to the Administrative Agent for the Beneficiaries, for
application to the Harvard Obligations or the Guaranty Obligations in such order
as the Administrative Agent shall elect and, until such payment is paid to the
Administrative Agent, such amount shall be held by such Guarantor for the
benefit of the Beneficiaries.
16.5 Reaffirmation of Pre-Petition Agreements. Each of the Obligors
acknowledges and confirms the Obligations and the Guaranty Obligations, as
applicable, to the Agents, the Issuing Bank and the Lenders arising out of, in
connection with, or as a consequence of, the Pre-Petition Agreements and the
other Loan Documents, as amended or modified by this Agreement and the Orders.
Each of the Obligors further acknowledges and confirms that each of the Agents,
the Issuing Bank and each of the Lenders is entitled to all benefits of the
security interest and liens granted under and pursuant to the terms of the
Pre-Petition Agreements and any and all of the Loan Documents, as amended and
modified by this Agreement and the Orders. Each of the Obligors hereby further
acknowledges and confirms the validity, priority and extent of the security
interests, liens and claims of the Administrative Agent (for itself and for the
Agents, the Issuing Banks and the Lenders) and the claims of the Agents, the
Issuing Banks and the Lenders in and to the Pre-Petition Collateral and waive
their rights to challenge the entitlements thereto of Agents, the Issuing Bank
and the Lenders, and acknowledge that such liens, security interests and claims
are valid, enforceable, and binding and entitled to first priority as and
against all other claims against the Pre-Petition Collateral, except for valid
and perfected liens arising prior to and existing on the Filing Date. Each of
the Obligors hereby waives and releases any and all it they may have to
challenge the validity, extent and perfection of the liens, claims and security
interests in and to the Pre-Petition Collateral of Agents, the Issuing Bank and
the Lenders, whether arising under the Loan Documents, this Agreement, or
otherwise.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
effective, executed, accepted and delivered at New York, New York, by their
proper and duly authorized officers as of the date set forth above.
THE CIT GROUP/BUSINESS CREDIT, INC.
(as Administrative Agent, Collateral Agent and
Lender)
By:
----------------------------------------
CITICORP USA, INC.,
(as Syndication Agent and Lender)
By:
----------------------------------------
CITIBANK, N.A.,
(as Issuing Bank)
By:
----------------------------------------
Vice President
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BORROWERS:
HARVARD INDUSTRIES, INC.
By: ______________
Title:
By: ______________
Title:
HARVARD TRANSPORTATION CORPORATION
By:
------------------------------------------------
Title:
▇▇▇▇▇-ALBION CORPORATION
By:
------------------------------------------------
Title:
GUARANTORS:
TRIM TRENDS CANADA LIMITED
By:
--------------------------------------------------
Title:
177192 CANADA INC.
By:
--------------------------------------------------
Title:
123
EXHIBIT A
REVOLVING LOAN PROMISSORY NOTE
January ___, 2002
$35,000,000
FOR VALUE RECEIVED, the undersigned, HARVARD INDUSTRIES, INC., a Delaware
corporation, HARVARD TRANSPORTATION CORPORATION, a Michigan corporation,
▇▇▇▇▇-ALBION CORPORATION, a Michigan corporation, (each, a "Borrower" and
collectively, the "Borrowers"), promises to pay to the order of THE CIT
GROUP/BUSINESS CREDIT, INC. (herein "CIT") as Administrative Agent for the
Lenders referred to in the Agreement identified below (in that capacity, the
"Administrative Agent") at its office located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, in lawful money of the United States of America and in
immediately available funds, the principal amount of Thirty-Five Million Dollars
and No Cents ($35,000,000.00) or such other principal amount as may from time to
time be advanced or deemed advanced under the Revolving Credit Line, as defined
in the Agreement (each a "Revolving Loan") pursuant to the Agreement (as herein
defined). Such Revolving Loan advances shall be repaid on a daily basis as a
result of the application of the proceeds of collections of the Accounts and the
making of additional Revolving Loans as described in Section 3 of the Agreement.
Subject to the terms of the Agreement, the Revolving Loans may be borrowed,
repaid and reborrowed by the Borrowers. A final balloon payment in an amount
equal to the outstanding aggregate balance of principal and interest remaining
unpaid, if any, under this Note as shown on the books and records of the
Administrative Agent shall be due and payable on the termination of the
Agreement or such earlier time as is provided in the Agreement.
Each Borrower further agrees to pay interest at said office, in like money, on
the unpaid principal amount owing hereunder from time to time from the date
hereof on the dates, at the rates and otherwise as specified in Section 9 of the
Secured Super-Priority Debtor-In-Possession Financing Agreement, of even date
herewith between the Borrowers, the Guarantors, and the entities identified
therein as the Lenders, the Administrative Agent, the Syndication Agent and the
Issuing Bank identified therein (as amended from time to time, the "Agreement").
Capitalized terms used herein and defined in the Agreement shall have the same
meanings as set forth therein unless otherwise specifically defined herein.
If any payment on this Note becomes due and payable on a day other than a
Business Day, the maturity thereof shall 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.
This Note is a Revolving Loan Promissory Note referred to in Section 3.1(d) of
the Agreement, evidences the obligations of the Borrowers in respect of
Revolving Loans thereunder, and is subject to, and entitled to, all provisions
and benefits thereof and is subject to mandatory prepayment, in whole or in
part, as provided therein.
The date and amount of the advances made hereunder may be recorded on the grid
page or pages which are attached hereto and hereby made part of this Note or the
separate ledgers maintained by the Administrative Agent. The aggregate unpaid
principal amount of all Revolving Loan advances may be set forth in the balance
column on said grid page or such ledgers maintained by the Administrative Agent.
All such advances, whether or not so recorded, shall be due as part of this
Note. The holder of this Note is authorized to record the date and amount of
each Revolving Loan and the date and amount of each payment or prepayment of
principal thereof on those grid page or pages.
Each Borrower confirms that any amount received by or paid to the Administrative
Agent in connection with the Agreement and/or any balances standing to its
credit on any of its accounts or those of any other Borrower on the
Administrative Agent's books under the Agreement may in accordance with the
terms of the Agreement be applied in reduction of this Note, but no balance or
amounts shall be deemed to effect payment in whole or in part of this Note or
the Revolving Loans unless the Administrative Agent shall have actually charged
such account or accounts for the purposes of such reduction or payment of this
Note.
Upon the occurrence of any Event of Default specified in the Agreement or upon
termination of the Agreement, all amounts then remaining unpaid on this Note may
become, or be declared to be, immediately due and payable as provided in the
Agreement.
For purposes of disclosure pursuant to the Interest Act (Canada), the yearly
rate of interest to which any rate of interest payable under this Note which is
to be calculated on any basis other than a full calendar year is equivalent may
be determined by multiplying such rate by a fraction, the numerator of which is
the number of days in the calendar year in which the period for which the
interest at such rate is payable ends and the denominator of which is the number
of days comprising such other basis.
HARVARD INDUSTRIES, INC.,
HARVARD TRANSPORTATION CORPORATION,
▇▇▇▇▇-ALBION CORPORATION,
By:
--------------------------------
Title:
2
GRID PAGES TO REVOLVING NOTE
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3
GRID PAGES TO REVOLVING NOTE
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Date Loan Payment Balance
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4
EXHIBIT C
CERTIFICATE OF THE SECRETARY
I, ___________________, hereby certify that I am the duly elected,
qualified and acting Secretary of __________________ (the "Company"), a
_________ corporation, and that, as such, I have access to its corporate records
and am familiar with the matters herein certified, and I am authorized to
execute and deliver this Certificate in the name and on behalf of the Company
and that:
1. This Certificate is being delivered pursuant to Section 2.1(e) of
that certain Secured Super-Priority Debtor-in-Possession Financing Agreement
dated as of January 24, 2002, by and among the Company, the lenders from time to
time party thereto and The CIT Group/Business Credit, Inc., as Administrative
Agent (the "Agreement").
2. Attached hereto as Exhibit A is a true and correct copy of the
Certificate of Incorporation of the Company as certified by the Secretary of
State of its State of Incorporation, as in full force and effect immediately
prior to the date hereof.
3. Attached hereto as Exhibit B is a true, correct and complete copy of
the bylaws of the Company as in full force and effect on and as of the date
hereof.
4. Attached hereto as Exhibit C is a resolution of the Board of
Directors or Board of Managers of the Company, as the case may be, approving and
authorizing the execution, delivery, and performance of the Loan Documents to
which it is a party as in full force and effect without modification or
amendment on and as of the date hereof.
5. The following persons have been duly elected to the offices of the
Company set forth beside their names, have been duly qualified, and on the date
hereof, hold the offices set forth opposite their respective names below and the
signatures set forth opposite their respective names are their respective
genuine signatures:
Name Title Signature
---- ----- ---------
_____________ Chief Financial Officer ________________
_____________ General Counsel ________________
IN WITNESS WHEREOF, I hereby set forth my signature this ____ day of
January, 2002.
--------------------------
Name:
Title:
I, __________________, hereby certify that (a) I am the duly elected,
qualified and acting __________ of the company (b) __________ is the duly
elected, qualified and acting Secretary of the Company, and (c) the signature of
__________ set forth above is her genuine signature.
--------------------------
Name:
Title:
2
EXHIBIT D
OFFICER'S CERTIFICATE
Reference is made to the Secured Super-Priority
Debtor-In-Possession Financing Agreement dated as of January 24, 2002, [as
Amended and Restricted as of February 4, 2002]* between the Borrowers, the
Lenders and Issuers party thereto, and The CIT Group/Business Credit, Inc.
("CIT"), as agent for the Lenders and the Issuers (in such capacity, the
"Administrative Agent") (the "Agreement"; terms defined therein being used
herein as therein defined). The undersigned, the Chief Financial Officer of
______________, in such capacity and not in any personal capacity, hereby
certified to the Administrative Agent and each Lender as follows:
1. The representations and warranties set forth in Section 8 of the
Agreement and in the other Loan Documents to which the Company is a party are
true and correct in all material respects on and as of the date hereof.
2. The Company is in compliance with all of the terms and provisions
set forth in the Agreement and in the other Loan Documents to which the Company
is a party.
3. As of the date hereof, no Default or Event of Default has occurred
and is continuing.
IN WITNESS WHEREOF, I hereby set forth my signature this ____
day of [ ], 2002.
--------------------------
Name:
Title:
-------------
*Bracketed language to be used on and after the First Amendment Date.
EXHIBIT E
NOTICE OF BORROWING
Date: _________, 2002
The CIT Group/Business Credit, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Loan Administrative Officer
Re: $35,000,000 SECURED SUPER-PRIORITY DEBTOR-IN-POSSESSION FINANCING
AGREEMENT DATED AS OF JANUARY 24, 2002, AS AMENDED AND RESTATED
AS OF FEBRUARY 4, 2002, BY AND AMONG HARVARD INDUSTRIES, INC.,
HARVARD TRANSPORTATION CORPORATION, AND ▇▇▇▇▇-ALBION CORPORATION,
AS BORROWERS, TRIM TRENDS CANADA LIMITED AND ▇▇▇▇▇▇ ▇▇▇▇▇▇ INC.,
AS GUARANTORS, THE CIT GROUP/BUSINESS CREDIT, INC., AS
ADMINISTRATIVE AGENT, COLLATERAL AGENT AND LENDER, CITICORP USA,
INC., AS SYNDICATION AGENT AND LENDER, AND CITIBANK N.A., AS
ISSUING BANK (AS AT ANY TIME AMENDED, THE "AGREEMENT")
This Notice of Borrowing is delivered to you pursuant to Section 3.1(b)
of the Agreement. Unless otherwise defined herein, capitalized terms used herein
shall have the meanings attributable thereto in the Agreement. Borrower hereby
requests an Advance in the aggregate principal amount of $___________, to be
made on ___________, 2002.
Borrower hereby ratifies and reaffirms all of its liabilities and
obligations under the Loan Documents and Borrower hereby certifies that no
Default or Event of Default exists on the date hereof.
Borrower has caused this Notice of Borrowing to be executed and
delivered by its duly authorized officer, this ____ day of ______, 2002.
By:________________________
Name:
Title:
EXHIBIT F
FORM OF
ASSIGNMENT AND TRANSFER
ASSIGNMENT AND TRANSFER AGREEMENT dated as of ___________, ____ between
[insert name of assigning Lender] (the "Assignor") and [insert name of Assignee]
(the "Assignee").
PRELIMINARY STATEMENTS
1. This Assignment and Transfer Agreement (this "Agreement")
relates to the Secured Super-Priority Debtor-In-Possession Financing Agreement
dated as of January 24, 2002 (as amended from time to time, the "Agreement"),
among THE CIT GROUP/BUSINESS CREDIT, INC., ("CIT"), as administrative agent for
the Lenders party thereto from time to time (in that capacity, the
"Administrative Agent"), CITICORP USA, INC., as syndication agent, each Lender
party thereto from time to time, CITIBANK, N.A., as Issuing Bank, and HARVARD
INDUSTRIES, INC., and certain of its direct and indirect subsidiaries as joint
and several co-obligors and guarantors. All capitalized terms used and not
otherwise defined herein shall have the respective meanings set forth in the
Agreement.
The Assignor, at commencement of business on the date hereof
(i) is the lender in respect of Revolving Loans in an aggregate amount
of $__________,
(ii) the Assignor's Revolving Credit Percentage is _______ percent
(____%) of the total Revolving Credit Commitment.
2. This Agreement shall become effective prior to the making of
any Loan that is made on the date hereof.
3. The Assignor proposes to sell and assign to the Assignee all
of the rights and interests of the Assignor under the Agreement, and the
Assignee proposes to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms, in each case in
respect and to the extent of the interests set forth in the table below (the
"Transferred Interest"):
Principal Amount of
Transferred Interest
(Principal or %) Percentage Assigned*
(i) Revolving Loans; $
(ii) Revolving Credit Percentage %
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
A. Assignment. (1) The Assignor hereby assigns and sells to the
Assignee the Transferred Interest, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the obligations of the Assignor
under the Agreement corresponding to the Transferred Interest including, without
limitation, the related portion of the Assignor's Commitments. Upon such
execution, delivery, acceptance and recording hereof by the Assignor and
Assignee and the receipt by the Administrative agent from the Assignee of an
assignment fee of $3,500 (subject to any consent required in subparagraph (b) of
paragraph 13.17 of the Agreement) and the payment by the Assignee of the amount
specified in Part B required to be paid on the date hereof, (2) the Assignee
shall, as of the commencement of business on the date hereof, succeed to the
rights and be obligated to perform the obligations of a Lender under the
Agreement and the Loan Documents, in respect of the Transferred Interest and (3)
the Loans and Commitments of the Assignor shall, as of the commencement of
business on the date hereof, be reduced correspondingly and the Assignor
released from its obligations under the Agreement and Loan Documents to the
extent such obligations have been assumed by the Assignee. The assignment
provided for herein shall be without recourse to the Assignor.
(2) After giving effect to this Assignment and Transfer Agreement
the parties hereto agree that the Loans and Commitment of each of the Assignor
and the Assignee will be as set forth on Schedule I following the signature
lines hereof.
B. Payments. As consideration for the assignment and sale contemplated
in Section 1 hereof, the Assignee shall pay to the Assignor on the date hereof
in immediately available funds an amount equal to ________________ ($________).
It is understood that interest and fees payable to the Assignor under the
Agreement accrued to the date hereof are for the account of the Assignor and
such interest and fees accruing from and including the date hereof are for the
account of the Assignee. Each of the Assignor and the Assignee hereby agrees
that if it receives any amount under the Agreement which is for the account of
the other party hereto, it shall receive the same for the account of such other
party to the extent of such other party's interest therein and shall promptly
pay the same to such other party.
-------------------------
* After the Initial Closing Date only.
2
C. Agreement. Each of the Assignor and the Assignee agrees that this
Assignment and Transfer Agreement is made in accordance with and subject to the
terms of Section 13.14 of the Agreement, which is hereby incorporated by
reference herein.
D. Representations and Warranties of Assignee. The Assignee represents
and warrants that (i) the Assignee is legally authorized to enter into this
Agreement and is an Eligible Assignee under the terms of the Agreement and (ii)
the Assignee has received copies of the Agreement and the Loan Documents, such
financial statements and such other documents and information as it has
requested or deemed appropriate to make its own credit analysis and decision to
enter into this Agreement and the transactions contemplated herein.
E. Non-Reliance on Assignor. The Assignee expressly acknowledges that
neither the Assignor nor the Agents nor the Issuing Bank nor any of the
officers, directors, employees, agents or attorneys-in-fact of any of them has
made any representations or warranties to it and that no act by such Assignor,
Agent or the Issuing Bank hereinafter taken, including any review of the affairs
of the Obligors shall be deemed to constitute any representation or warranty by
such Assignor, Agent or the Issuing Bank to the Assignee. The Assignee
represents to each of the Assignor, the Agents, the Issuing Bank and each other
Lender that it has, independently and without reliance upon the Assignor or any
Agent, the Issuing Bank or any Lender and based on such documents and
information as the Assignee alone has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, financial and
other condition and creditworthiness of the Obligors and made its own decision
to enter into this Agreement.
F. Governing Law. This Agreement and any disputes that may arise in
connection with this Agreement or any transaction hereunder shall be governed by
and construed in accordance with the internal laws of the State of New York
without respect to principles of conflicts of laws.
G. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
H. Other Documentation. Any notice or other communication required
under or relating to the Agreement shall be addressed to the Assignee as
identified in Schedule II.
I. Notice. Upon receipt of this Agreement and payment of the fee
referred to in Paragraph A from the Assignee, the Administrative Agent is hereby
requested, if this Agreement has been completed, and subject to any consents
required pursuant to subparagraph (b) of Paragraph 13.15 of the Agreement, to
(i) accept such Assignment and Transfer Agreement, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to
Harvard (for further notice from Harvard to the other Borrowers).
3
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the
date first above written.
[NAME OF ASSIGNOR]
By:
--------------------------
Name:
Title:
[NAME OF ASSIGNEE]
By:
---------------------------
Name:
Title:
ACCEPTED AND ACKNOWLEDGED* TO:
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Administrative Agent
By:
-----------------------------------
Name:
Title:
-------------------------
* Subject to any consents required pursuant to subparagraph (b) of Paragraph
13.14 of the Agreement.
*[CONSENTED TO:
HARVARD INDUSTRIES INC.,
By:
----------------------------------
Name:
Title: ]
-------------------------
*If required.
Schedule I
After giving effect to this Assignment and Transfer Agreement the amount of the
Commitment, each of the Loans and the Revolving Credit Percentage of each of the
Assignor and the Assignee will be as follows:
Assignor:
---------
Amount Percentage
Revolving Loans $ %
Revolving Credit Percentage %
Assignee:
---------
Amount Percentage
Revolving Loans $ %
Revolving Credit Percentage %
Schedule II
LEGAL NAME OF ASSIGNEE TO APPEAR IN DOCUMENTATION
------------------------------------------------------------------------------
GENERAL INFORMATION
LENDING OFFICE:
Institution Name: _____________________________________________________________
Street Address: _______________________________________________________________
City, State, Country, Zip Code: _______________________________________________
CONTACTS/NOTIFICATION METHODS
CREDIT CONTACTS
Contact: ______________________________________________________________________
Street Address: _______________________________________________________________
City, State, Country, Zip Code: _______________________________________________
Phone Number: ________________________________________________________________
Fax Number: __________________________________________________________________
ADMINISTRATIVE CONTACTS -- BORROWINGS, PAYDOWNS, INTEREST, FEES, ETC.
Contact: ______________________________________________________________________
Street Address: _______________________________________________________________
City, State, Country, Zip Code: _______________________________________________
Phone Number: ________________________________________________________________
Fax Number: __________________________________________________________________