FINANCING AGREEMENT
dated as of June 14, 1999
among
THE CIT GROUP/BUSINESS CREDIT, INC.
("Agent"),
THE LENDERS WHICH ARE PARTIES HERETO
(the "Lenders")
and
VISKASE CORPORATION and VISKASE SALES CORPORATION
(collectively, the "Companies")
TABLE OF CONTENTS
Page
SECTION 1. Definitions 1
SECTION 2. Conditions Precedent 19
SECTION 3. Revolving Loans 24
SECTION 4. Term Loan 27
SECTION 5. Letters of Credit 28
SECTION 6. Collateral 30
SECTION 7. Representations, Warranties and Covenants 34
SECTION 8. Interest, Fees and Expenses 45
SECTION 9. Powers 48
SECTION 10. Events of Default and Remedies 49
SECTION 11. Termination 52
SECTION 12. Miscellaneous 52
SECTION 13. Agreements Regarding the Lenders 55
SECTION 14. Agency 58
EXHIBITS
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Exhibit A - Form of Term Loan Promissory Note
Exhibit B - Form of Assignment and Transfer Agreement
SCHEDULES
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Schedule 1.1(a) - Permitted Liens
Schedule 1.1(b) - Certain Customers
Schedule 1.1(c) - Permitted Indebtedness
Schedule 6.1 - Excluded Assets
Schedule 7.1 - Collateral Locations, Chief
Executive Office and Tradenames
Schedule 7.7 - Environmental Matters
Schedule 7.9(e) - Existing Guaranties
FINANCING AGREEMENT
-------------------
THE CIT GROUP/BUSINESS CREDIT, INC., a New York corporation
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("CITBC"), with offices located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇; any other party hereafter becoming a Lender hereunder
pursuant to Section 13.5 hereof hereinafter are collectively referred to
------------
as the "Lenders" and individually as a "Lender"); and CITBC, as Agent
for the Lenders (hereinafter the "Agent"); are pleased to confirm the
terms and conditions under which the Lenders acting through the Agent
shall make revolving loans, term loans and other financial
accommodations to each of VISKASE CORPORATION, a Pennsylvania
-------------------
corporation ("Viskase Corporation"), with its principal place of
business at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and
VISKASE SALES CORPORATION, a Delaware corporation ("Viskase Sales"),
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with its principal place of business at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, jointly and severally (Viskase Corporation and
Viskase Sales are hereinafter sometimes referred to individually as a
"Company" and collectively as the "Companies").
SECTION 1. Definitions
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1.1 For purposes of this Financing Agreement (this "Agreement"
or this "Financing Agreement"), the following terms shall be defined in
the following manner:
Accounts shall mean all of each Company's now existing and future:
--------
(a) accounts (as defined in the U.C.C.) and any and all other
receivables (whether or not specifically listed on schedules furnished
to the Agent), including, without limitation, all accounts created by or
arising from each Company's sales of goods or rendition of services to
its customers, and all accounts arising from sales or rendition of
services made under any Company's trade names or styles, or through any
Company's divisions; (b) instruments (as defined in the U.C.C.),
documents (as defined in the U.C.C.), contract rights and chattel paper
(as defined in the U.C.C.); (c) unpaid seller's rights (including
rescission, replevin, reclamation 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 or repossessed
goods; (e) reserves and credit balances arising hereunder;
(f) guarantees or collateral for any of the foregoing; (g) insurance
policies or rights relating to any of the foregoing; and (h) cash and
non-cash proceeds of any and all the foregoing.
Accounts Receivable Advance Percentage shall mean eighty-five
--------------------------------------
percent (85%).
Agent Proposal Letter shall mean the Proposal Letter dated
---------------------
April 14, 1999 issued by Agent, and accepted by Viskase Corporation.
Alternate Base Rate shall mean the higher of (i) the annual rate of
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interest announced from time to time by The Chase Manhattan Bank in New
York, New York as its Base Rate and (ii) one-half of one percent (.50%)
above the Federal Funds Effective Rate.
Applicable Margin shall mean the percentage per annum set forth
below:
Applicable Margin for Applicable Margin for Applicable Margin for Applicable Margin for
Revolving Base Rate Loans Revolving LIBOR Loans Term Base Rate Loans Term LIBOR Loans
------------------------- --------------------- --------------------- ---------------------
0.75% 2.75% 1.25% 3.25%
Assignment and Transfer Agreement shall mean the Assignment and
---------------------------------
Transfer Agreement in the form of Exhibit B hereto.
---------
Availability shall mean at any time the excess, if any, of (a) the
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lesser of (i) the Revolving Line of Credit and (ii) the Borrowing Base
over (b) the sum of (i) the outstanding aggregate principal amount of
all Obligations then due and owing (other than the unpaid principal
balance of the Term Loan) and (ii) the Availability Reserve.
Availability Reserve shall mean (a) an amount equal to three (3)
--------------------
months rental payments on each Company's leased premises for which each
Company has not delivered to the Agent a landlord's waiver (in form and
substance satisfactory to the Agent in the exercise of its reasonable
business judgment), provided that such amount shall be adjusted from
time to time hereafter upon (i) delivery to the Agent of an acceptable
landlord's waiver, (ii) the opening or closing of a Collateral location
and/or (iii) any change in rental payment, plus (b) the aggregate amount
of rebates granted by any Company on Trade Accounts Receivable to any
customers of such Company, provided that the amount of rebates relating
to any such customer at any time shall in no event exceed the aggregate
amount of such Trade Accounts Receivable owed by such customers at such
time.
Base Rate shall mean the rate of interest (expressed as a
---------
percentage per annum) most recently announced or published publicly from
time to time by The Chase Manhattan Bank in New York, New York as its
base or prime rate of interest, which is not necessarily the lowest or
most favorable rate of interest charged by The Chase Manhattan Bank in
New York, New York on commercial loans at any one time. The Base Rate
shall change automatically and immediately as and when such announced
rate shall change, without notice to the Companies, and any such change
in The Chase Manhattan Bank in New York, New York Base Rate shall not
affect any of the terms and conditions of this Agreement, all of which
shall remain in full force and effect.
Borrowing Base shall mean the sum of (a) the outstanding Eligible
--------------
Accounts Receivable of each Company multiplied by the Accounts
Receivable Advance Percentage, plus (b) the lesser of (i) the Inventory
Loan Cap and (ii) the aggregate value of Eligible Inventory of each
Company (as determined at the lower of cost or market on a first-in,
first-out basis) multiplied by the Inventory Advance Percentage.
Business Day shall mean any day on which the Agent, each Lender and
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The Chase Manhattan Bank in New York, New York are open for business.
Canada Intercompany Loan shall have the meaning assigned to such
------------------------
term in Section 2.1(cc).
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Canada Security Agreement shall have the meaning assigned to such
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term in Section 2.1(cc).
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Capital Expenditures for any period shall mean the aggregate of all
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expenditures of each Company during such period that in conformity with
GAAP are required to be included in or reflected by the property, plant
or equipment or similar fixed asset account reflected in the
consolidated balance sheet of the Companies.
Capital Improvements shall mean operating Equipment and facilities
--------------------
(other than land) acquired or installed for use in each Company's
business operations.
Capital Lease shall mean any lease of property (whether real,
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personal or mixed) which, in conformity with GAAP, is accounted for as
a capital lease or a Capital Expenditure on the consolidated balance
sheet of the Parent and its Subsidiaries.
Closing Date shall mean the date (on or after the date hereof) on
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which the Lenders (or the Agent on behalf of the Lenders) makes the
initial extension of credit hereunder, whether in the form of Revolving
Loans, Letters of Credit or the Term Loan.
Collateral Assignment of Intercompany Loan shall have the meaning
------------------------------------------
assigned to such term in Section 2.1(cc) below.
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Collateral shall mean all present and future Accounts, Equipment,
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Inventory, Documents of Title, General Intangibles, Investment Property,
Other Collateral and Real Estate of each Company; provided, however,
that "Collateral" shall not include the items listed in clauses (i) -
(iv) of Section 6.1.
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Collateral Assignment of Lawsuit Proceeds means that certain
-----------------------------------------
Collateral Assignment of Lawsuit Proceeds of even date herewith made by
Viskase Corporation in favor of Agent.
Collateral Management Fee shall mean the sum of Seventy-Five
-------------------------
Thousand Dollars ($75,000) which the Companies shall pay to Agent for
its own account in accordance with Section 8.9 hereof to offset the
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expenses and costs of CITBC in connection with record keeping, periodic
examinations and analyzing and evaluating the Collateral.
Consolidated Balance Sheet shall mean a consolidated balance sheet
--------------------------
for Parent, eliminating all inter-company transactions and prepared in
accordance with GAAP.
Consolidating Balance Sheet shall mean a consolidating balance
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sheet for (a) Parent, (b) the Companies and Viskase Holding, (c) Viskase
Europe and its Subsidiaries, (d) Viskase Brazil, (e) Viskase Canada and
(f) Viskase Chile, in each case showing all eliminations of
inter-company transactions and prepared in accordance with GAAP.
Copyrights shall have the meaning assigned to that term in the
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definition of "General Intangibles" in this Agreement, and all cash and
non-cash proceeds thereof.
Current Assets means all current assets of each Company, as
--------------
determined in accordance with GAAP.
Current Liabilities means all current liabilities of each Company,
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as determined in accordance with GAAP.
Customarily Permitted Liens shall mean: (a) liens of local or
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state authorities for franchise or other like taxes provided the
aggregate amount of such liens shall not exceed One Hundred Thousand
Dollars ($100,000) in the aggregate at any one time; (b) statutory liens
of landlords and liens of carriers, warehousemen, mechanics,
materialmen, lessors and other like liens imposed by law, 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 in accordance with GAAP;
(c) deposits made (and the liens thereon) in the ordinary course of
business (including, without limitation, security deposits for leases,
surety bonds and appeal bonds) in connection with workers' compensation,
unemployment insurance, pensions and other types of social security
benefits or to secure the performance of tenders, bids, contracts (other
than for the repayment or guarantee of borrowed money or purchase money
obligations), statutory obligations, surety and appeal bonds and other
similar obligations arising as a result of progress payments under
government contracts; and (d) easements (including, without limitation,
reciprocal easement agreements and utility agreements), zoning
restrictions, licenses, reservations, covenants, encroachments, minor
defects or irregularities in title, variations and other restrictions,
charges or encumbrances (whether or not recorded) affecting the Real
Estate and which are listed in Schedule B of each title insurance policy
-----------
delivered to the Agent in connection with this Financing Agreement or
which arise after the date hereof and which do not in the aggregate
materially impair the use of such Real Estate in the operation of the
business of the owner thereof as determined in Agent's reasonable
discretion.
Default shall mean any event specified in Section 10 hereof,
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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 two percent (2.0%) plus the Alternate Base Rate,
----
which the Lenders shall be entitled to charge the Company on all
Obligations to the extent provided in Section 10.2 of this Financing
------------
Agreement.
Depository Account shall mean the bank account owned and maintained
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by the Agent, for the benefit of the Lenders, and designated for the
deposit of proceeds of Collateral.
Documentation Fee shall mean (a) the reasonable legal fees and
-----------------
costs and expenses of outside counsel for the Agent in documenting, in
whole or in part, the initial transaction on behalf of the Agent, plus
Out-of-Pocket Expenses, (b) the reasonable legal fees and costs and
expenses necessary to compensate the Agent for the use of Agent's in-
house legal department and facilities for any documentation of
transactions after the initial transaction, and (c) the Agent's
reasonable legal fees and costs and expenses relating to any and all
modifications, waivers, releases, amendments or additional collateral
with respect to this Financing Agreement, the Collateral and/or the
Obligations.
Documents of Title shall mean all present and future documents (as
------------------
defined in the U.C.C.) including, without limitation, all warehouse
receipts, bills of lading, shipping documents and similar documents,
whether negotiable or nonnegotiable, and all goods and Inventory
relating thereto and all cash and non-cash proceeds of the foregoing.
▇.▇. ▇▇▇▇▇ shall mean ▇.▇. ▇▇▇▇▇ & Associates, L.P., a Delaware
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limited partnership.
▇.▇. ▇▇▇▇▇ Financing Agreement shall mean that certain Financing
------------------------------
Agreement, dated as of the date hereof, by and between ▇.▇. ▇▇▇▇▇ and
the Companies, as the same may be amended, restated or supplemented from
time to time.
▇.▇. ▇▇▇▇▇ Loan Documents shall mean the ▇.▇. ▇▇▇▇▇ Financing
-------------------------
Agreement and all other instruments and documents that are in effect as
of the date hereof and are executed in connection with or otherwise
relating to the ▇.▇. ▇▇▇▇▇ Financing Agreement, as the same may be
amended, restated or supplemented from time to time.
Early Termination Date shall mean any date other than the
----------------------
Termination Date on which the Companies terminate this Financing
Agreement or the Revolving Line of Credit.
Early Termination Fee shall mean the fee payable by the Companies
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to the Lenders in the event the Companies terminate the Revolving Line
of Credit or this Financing Agreement on a date other than the date
occurring between the thirtieth (30th) day preceding the Termination
Date and the Termination Date, and be equal to the product obtained by
multiplying the aggregate amount of the Revolving Line of Credit by one
percent (1%).
EBITDA shall mean, for any period, all earnings before all
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interest, tax obligations and depreciation and amortization expense for
such period, all determined in accordance with GAAP on a basis
consistent with the latest consolidated audited financial statements of
the Parent and its Subsidiaries, but excluding the effect of
extraordinary and/or nonrecurring gains or losses for such period.
Eligible Accounts Receivable shall mean the gross amount of each
----------------------------
Company's Trade Accounts Receivable that are subject to a valid, first
priority and fully perfected security interest in favor of the Agent,
for the benefit of the Lenders, and which conform to the warranties
contained herein and at all times continue to be acceptable to the 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 or outstanding)
and (b) reserves for: (i) sales to the United States of America or to
any agency, department or division thereof, unless such Company assigns
its right to payment therefor to Agent, in form and substance acceptable
to Agent, and takes all other action necessary to comply with the
Assignment of Claims Act of 1940, as amended (31 U.S.C. Sub-section 203
et seq.), or any successor statute; (ii) foreign sales other than sales
(x) secured by stand-by letters of credit (in form and substance
reasonably satisfactory to the Agent) issued or confirmed by, and
payable at, banks having a place of business in the United States of
America and payable in United States currency, (y) to customers residing
in Canada, provided that such sales otherwise comply with all of the
other criteria for eligibility hereunder, are payable in United States
currency and do not exceed Five Million Dollars ($5,000,000) in the
aggregate at any one time, or (z) subject to credit insurance payable to
Agent, for the benefit of the Lenders, issued by an insurer, reasonably
acceptable to Agent, and on terms and in an amount acceptable to Agent;
(iii) accounts that remain unpaid more than either ninety (90) days from
invoice date or sixty (60) days from the due date thereof; provided,
however, that only such sixty (60) day limitation shall be applicable
for the customers listed on Schedule 1.1(b) hereto: (iv) contras;
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(v) sales to Parent, any Subsidiary, or to any company affiliated with
any Company, Parent or any Subsidiary in any way; (vi) ▇▇▇▇ and hold
(deferred shipment) or consignment sales; (vii) sales to any customer
which is (w) insolvent, (x) the debtor in any bankruptcy, insolvency,
arrangement, reorganization, receivership or similar proceedings under
any federal or state law, (y) negotiating, or has called a meeting of
its creditors for purposes of negotiating, a compromise of its debts or
(z) financially unacceptable to the Agent or has a credit rating
unacceptable to the Agent, in each case as determined by Agent in its
reasonable discretion; (viii) all sales to any customer if fifty percent
(50%) or more of either (x) all outstanding invoices or (y) the
aggregate dollar amount of all outstanding invoices, are unpaid more
than either ninety (90) days from invoice date or sixty (60) days from
the due date thereof; (ix) historical returns, discounts, claims,
credits and allowances; and (x) any other reasons deemed necessary by
the Agent in its reasonable business judgment and which are customary
either in the commercial finance industry or in the lending practices of
the Agent. Notwithstanding the foregoing, Trade Accounts Receivable for
foreign sales subject to credit insurance in accordance with the
foregoing shall be deemed Eligible Accounts Receivable whether or not
such foreign Trade Accounts Receivable meet all of the other foregoing
eligibility requirements; provided, however, that the gross amount of
such foreign Trade Accounts Receivable that shall be deemed Eligible
Accounts Receivable shall not exceed the aggregate amount that any
credit insurer is obligated to pay with respect thereto.
Eligible Inventory shall mean the gross amount of each Company's
------------------
Inventory that is subject to a valid, first priority and fully perfected
security interest in favor of the Agent, for the benefit of the Lenders
and which conform to the warranties contained herein and which at all
times continue to be acceptable to the Agent in the exercise of its
reasonable business judgment, excluding, however, without duplication of
--------- -------
reserves taken by the Companies, (a) supplies (other than raw
materials), (b) goods not present in the United States of America,
(c) goods returned or rejected by any Company's customers (other than
goods that are undamaged and resalable in the normal course of
business), (d) goods to be returned to any Company's suppliers and
(e) goods in transit to third parties (other than to any Company's
agents, processors or warehouses), and less any reserves required by the
Agent in its reasonable discretion for special order goods, market value
declines, goods subject to ▇▇▇▇ and hold (deferred shipment) or
consignment sales, damaged goods, out-of-season goods and obsolete
goods. After July 15, 1999, Eligible Inventory shall not include
Inventory in possession of a warehouseman, bailee, customer or other
third party, unless such warehouseman, bailee, customer or third party
has executed an agreement acknowledging the security interest in favor
of Agent and agreeing to permit Agent to repossess the inventory (in
form and substance satisfactory to the Agent) and the Agent has taken
all other action required to perfect its security interest in such
Inventory.
Equipment shall mean all present and hereafter acquired equipment
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(as defined in the U.C.C.) 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 of whatever sort.
ERISA shall mean the Employee Retirement Income Security Act of
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1974, as amended from time to time and the rules and regulations
promulgated thereunder from time to time.
Event(s) of Default shall have the meaning provided for in
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Section 10 of this Financing Agreement.
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Excluded Assets shall have the meaning provided for in Section 6.1
--------------- -----------
below.
Federal Funds Effective Rate means, for any day, the rate per annum
----------------------------
equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day (or, if such day is not
a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not published for any day
that is a Business Day, the average of the quotations for such day on
such transactions received by The Chase Manhattan Bank in New York, New
York from three (3) funds brokers of recognized standing selected by The
Chase Manhattan Bank in New York, New York.
Fixed Charge Coverage Ratio shall mean, for any period, the ratio
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determined by dividing (a) EBITDA by (b) Fixed Charges.
Fixed Charges shall mean the sum of (i) all interest obligations
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paid or due during such period, (ii) the amount of principal repaid or
scheduled to be repaid on all Indebtedness during such period,
(iii) Capital Expenditures paid for in cash by each Company during such
period, (iv) all federal, state and local income tax expenses due and
payable during such period, (v) the amount of Permitted Distributions
made during such period, and (vi) all payments due under the Lease
Documents.
GAAP shall mean generally accepted accounting principles in the
----
United States of America as in effect from time to time and for the
period as to which such accounting principles are to apply.
GECC shall mean General Electric Capital Corporation.
----
GECC Intercreditor Agreement shall mean that certain Intercreditor
----------------------------
Agreement dated as of June 14, 1999 among Agent, the Term Financiers,
▇.▇. ▇▇▇▇▇, General Electric Capital Corporation, State Street Bank and
Trust Company of Connecticut, Parent and the Companies, as the same may
be amended, restated or supplemented from time to time.
General Intangibles shall mean all present and hereafter acquired
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general intangibles (as defined in the U.C.C.) including, without
limitation, all right, title and interest in and to all (a) all
inventions (whether patentable or unpatentable and whether or not
reduced to practice), all improvements thereon, and all patents, patent
applications and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions and
reexaminations thereof (collectively referred to herein as "Patents"),
(b) all trademarks, service marks, trade dress, logos, trade names,
domain names, and corporate names, together with all translations,
adaptations, derivations and combinations thereof and including all
goodwill associated therewith, and all applications, registrations and
renewals in connection therewith (collectively referred to herein as
"Trademarks"), (c) all copyrightable works, all copyrights and all
applications, registrations and renewals in connection therewith
(collectively referred to herein as "Copyrights"), (d) all mask works
and all applications, registrations and renewals in connection
therewith, (e) all trade secrets and confidential business information
(including ideas, research and development, know-how, formulas,
compositions, manufacturing and production processes and techniques,
methods, schematics, technology, technical data, designs, drawings,
flowcharts, block diagrams, specifications, customer and supplier lists,
pricing and cost information and business and marketing plans and
proposals), (f) all computer software (including data and related
documentation), (g) all other proprietary rights, (h) all copies and
tangible embodiments of the foregoing categories of intellectual
property listed in subsections (a) through (g) herein (in whatever form
or medium), and (i) all licenses, sublicenses, agreements, or
permissions related to the foregoing categories of intellectual property
listed in subsections (a) through (g) herein (categories (a) through (i)
herein are collectively referred to as "Intellectual Property"), and
distribution agreements, supply agreements and tax refunds, together
with all money and claims for money now or hereafter due and payable in
connection with any of the foregoing or otherwise, and all cash and non-
cash proceeds thereof.
Guaranty means the Joint and Several Guaranty Agreement of even
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date herewith of the Guarantors.
Guarantors shall mean, collectively (a) Parent and (b) Viskase
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Holding.
Indebtedness shall mean, without duplication, all liabilities,
------------
contingent or otherwise, which are either (a) obligations in respect of
borrowed money or for the deferred purchase price of property, services
or assets, other than Inventory, or (b) lease obligations which, in
accordance with GAAP, have been, or which should be capitalized.
Intellectual Property shall have the meaning assigned to such term
---------------------
in the definition of "General Intangibles" in this Agreement.
Intellectual Property Assignment means those certain Grants of
--------------------------------
Security Interests in Intellectual Property of even date herewith made
by Parent and each Company in favor of Agent, on behalf of the Lenders.
Intercompany Loans shall mean all Indebtedness incurred by any
------------------
Company from any Subsidiary.
Intercompany Receivables shall mean all bona fide Trade Accounts
------------------------
Receivable resulting from the sale of goods or the rendering of services
by any Company, Guarantor or Subsidiary to any other Company, Guarantor
or Subsidiary, provided that the amounts payable with respect thereto is
in the ordinary course of business consistent with past practice.
Inventory shall mean all of each Company's present and hereafter
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acquired inventory (as defined in the U.C.C.) 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 - and all proceeds
thereof of whatever sort.
Inventory Advance Percentage shall mean sixty-five percent (65%).
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Inventory Loan Cap shall mean Thirty-Five Million Dollars
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($35,000,000).
Investment Property shall mean all of each Company's present and
-------------------
hereafter acquired securities, securities entitlements, securities
accounts and other investment property (as such terms are defined in the
U.C.C.).
Issuing Bank shall mean the bank issuing Letters of Credit for each
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Company, which shall initially be The Chase Manhattan Bank, New York,
New York, unless otherwise elected by Agent.
Lease Documents shall have the meaning assigned to such term in
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Schedule I to the GECC Intercreditor Agreement.
Letters of Credit shall mean all letters of credit issued with the
-----------------
assistance of the Lenders (acting through the Agent) by an Issuing Bank
for or on behalf of each Company.
Letter of Credit Guaranty shall mean the guaranty of each Company's
-------------------------
reimbursement obligation under the Issuing Bank's reimbursement
agreement, application for letter of credit or other like document which
the Agent, on behalf of the Lenders, delivers to the Issuing Bank.
Letter of Credit Guaranty Fee shall mean the fee that the Agent,
-----------------------------
for the benefit of the Lenders, may charge the Company under Section 8.5
-----------
of this Financing Agreement for (a) issuing the Letter of Credit
Guaranty or (b) otherwise aiding any Company in obtaining Letters of
Credit.
Letter of Credit Sub-Line shall mean Twenty-Six Million Dollars
-------------------------
($26,000,000) in the aggregate.
Leverage Ratio shall mean the ratio determined by dividing
--------------
(a) Total Liabilities by (b) EBITDA.
LIBOR shall mean at any time of determination and subject to
-----
availability, for each LIBOR Period, the London Interbank Offered Rate
paid in London on dollar deposits from other banks for such LIBOR Period
as quoted by The Chase Manhattan Bank in New York, New York. In the
event that The Chase Manhattan Bank in New York, New York ceases to
quote such a rate for any LIBOR Period requested by Representative, then
LIBOR shall mean at any time of determination and subject to
-----
availability, for each LIBOR Period, the London Interbank Offered Rate
paid in London on dollar deposits from other banks for such LIBOR Period
as determined by the Agent based upon information presented by Telerate
Systems on page 3750 as of 11:00 a.m. (London Time).
LIBOR Loan shall mean those Revolving Loans and the Term Loan for
----------
which the Representative has elected, in accordance with the provisions
of Section 8 hereof, to use LIBOR as the applicable interest rate.
---------
LIBOR Period shall mean a one (1) month, two (2) month, three (3)
------------
month or six (6) month period, as selected by Representative in
accordance with the provisions of this Financing Agreement.
Line of Credit Fee shall (a) mean the monthly fee owed by the
------------------
Companies to the Lenders for the Revolving Line of Credit, and (b) be
equal to the product obtained by multiplying (i) the difference between
(x) aggregate amount of the Revolving Line of Credit, and (y) the sum of
the average daily balance of Revolving Loans and the average daily
undrawn face amount of all Letters of Credit outstanding for each month,
by (ii) one-half of one percent (0.50%) per annum for the number of days
in said month.
Loan Documents shall mean this Financing Agreement, the Guaranty,
--------------
the Viskase Companies Pledge, the Viskase Corporation Pledge, the
Viskase Holding Pledge, the Collateral Assignment of Lawsuit Proceeds,
the Security Agreements, the Patent, Trademark and License Assignments,
the Subordination Agreements, the Real Estate Collateral Documents, the
Collateral Assignment of Intercompany Loan, the Canada Security
Agreement, the GECC Intercreditor Agreement and any other document,
instrument or agreement entered into in connection with this Financing
Agreement.
Mandatory Prepayment shall (a) mean the amount, if any, by which
--------------------
the Companies must prepay the Term Loan on or before the 90th day after
the end of the Companies' fiscal year, and (b) be determined as set
forth in Section 4.6 of this Financing Agreement.
Material Adverse Effect shall mean a material adverse effect on
-----------------------
either (a) the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Companies, taken as a whole,
(b) the ability of any Company to perform its obligations under this
Financing Agreement or (c) the ability of the Agent or the Lenders to
enforce the Obligations or their respective rights and remedies under
this Financing Agreement.
Net Worth shall mean assets in excess of liabilities, determined in
---------
accordance with GAAP, on a consistent basis with the latest consolidated
audited financial statements of the Parent and its Subsidiaries.
Obligations shall mean (a) all loans and advances made by the Agent
-----------
and the Lenders to each Company or to others for each Company's account
(including, without limitation, all Revolving Loans, Letters of Credit
and the Term Loan); (b) any and all other indebtedness, obligations and
liabilities which may be owed by any Company to the Agent or any Lender
and arising out of, or incurred in connection with, this Financing
Agreement or any of the other Loan Documents (including, without
limitation, all Out-of-Pocket Expenses and interest accruing after
commencement of a case under the Bankruptcy Code, 11 U.S.C. 101-1331),
whether (i) now in existence or incurred by any Company from time to
time hereafter (including any Company operating as a Debtor or Debtor in
Possession under the Bankruptcy Code, 11 U.S.C. 101-1331),
(ii) secured by pledge, lien upon or security interest in any Company's
assets or property or the assets or property of any other person, firm,
entity or corporation, (iii) such indebtedness is absolute or
contingent, joint or several, matured or unmatured, direct or indirect,
or (iv) any Company is liable to the Agent or any Lender for such
indebtedness as principal, surety, endorser, guarantor or otherwise;
(c) all indebtedness, obligations and liabilities owed by each Company
to the Agent or the Lenders under any other agreement or arrangement now
or hereafter entered into between any Company, on one hand, and the
Agent and/or the Lenders, on the other hand, relating to the
transactions contemplated by this Financing Agreement; (d) indebtedness,
obligations and liabilities incurred by, or imposed on, the Agent and/or
the Lenders as a result of environmental claims relating to each
Company's operations, premises or waste disposal practices or disposal
sites; (e) each Company's liabilities to the Agent and the Lenders as
maker or endorser on any promissory note or other instrument for the
payment of money pursuant to the terms hereof or any other Loan
Document; (f) each Company's liabilities to the Agent and the Lenders
under any instrument of guaranty or indemnity, or arising under any
guaranty, endorsement or undertaking which the Agent and/or the Lenders
may make or issue to others for any Company's account pursuant to the
terms hereof or any other Loan Document, including any accommodations
extended by the Agent or any Lender with respect to applications for
Letters of Credit, the Agent's acceptance of drafts on behalf of the
Lenders or the Agent's endorsement of notes or other instruments on
behalf of the Lenders for the Company's account and benefit; and (g) the
amount of any payments made by Agent to cure any "Events of Default" (as
such term is defined in the GECC Intercreditor Agreement) as permitted
by Section 4 of the GECC Intercreditor Agreement. By virtue of its
execution of this Agreement, the Companies hereby consent to the Agent's
making payments to cure any "Event of Default" pursuant to Section 4 of
the GECC Intercreditor Agreement.
Operating Leases shall mean all leases of property (whether real,
----------------
personal or mixed) other than Capital Leases.
Other Collateral shall mean: (a) all now owned and hereafter
----------------
acquired deposit accounts maintained by or on behalf of each Company
with any bank or financial institution; (b) all of each Company's cash
and other money and property in the possession or control of the Agent
or any Lender; (c) all of each Company's 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; (d) all cash and non-cash proceeds of the
foregoing; and (e) all payments and damage awards received by Viskase
Corporation in connection with the lawsuit between Viskase Corporation
and American National Can Company pursuant to the terms of the
Collateral Assignment of Lawsuit Proceeds.
Out-of-Pocket Expenses shall mean all of the Agent's present and
----------------------
future out-of-pocket-expenses incurred in connection with this Financing
Agreement and the other Loan Documents, including, without limitation,
(a) the cost of lien searches (including tax lien and judgment lien
searches), pending litigation searches and similar items, (b) fees and
taxes imposed in connection with the filing of any financing statements
or other personal property security documents; (c) all costs and
expenses incurred by the Agent and the Lenders in opening and
maintaining Deposit Accounts, depositing checks, receiving and
transferring funds (including charges imposed on the Agent and the
Lenders for "insufficient funds" and the return of deposited checks;
(d) any amounts paid by, incurred by or charged to the Agent or any
Lender by the Issuing Bank under any Letter of Credit Guaranty or any
Company's reimbursement agreement, application for Letter of Credit or
other like document which pertains either directly or indirectly to
Letters of Credit, and the Agent's standard fees relating to the Letters
of Credit and any drafts thereunder; (e) title insurance premiums, real
estate survey costs and mortgage or recording taxes and fees; (f) all
expenses, costs and fees incurred by the Agent in connection with any
action taken under Section 10.3 hereof; and (g) without duplication, all
costs and expenses incurred by the Agent and the Lenders in connection
with the collection, liquidation, enforcement and defense of the
Obligations and the Agent's and the Lenders' rights in the Collateral,
and all disbursements and reasonable fees of in-house and outside
counsel to the Agent and the Lenders, including but not limited to such
fees and disbursements incurred as a result of a workout, restructuring,
reorganization, liquidation, insolvency proceeding and in any appeals
arising therefrom, whether incurred before, during or after the
termination of this Financing Agreement or the commencement of any case
with respect to Parent, any Company or any Subsidiary under the United
States Bankruptcy Code or any similar statute.
Parent shall mean Viskase Companies, Inc. (formerly known as
------
Envirodyne Industries, Inc.), a Delaware corporation.
Patents shall have the meaning assigned in the definition of
-------
"General Intangibles" in this Agreement, and all cash and non-cash
proceeds thereof.
Permitted Distributions shall mean (a) distributions from Viskase
-----------------------
Corporation to the Parent not to exceed Fifty-Five Million Dollars
($55,000,000), plus accrued interest and any applicable prepayment fees,
for the sole purpose of permitting Parent to satisfy a mandatory
redemption payment due and payable on or before June 15, 1999 in
connection with the Senior Secured Notes, (b) dividends from the
Companies and any Subsidiary to the parent corporation thereof;
provided, however, that dividends to Parent shall be limited to
dividends needed for Parent to make payments on the Senior Unsecured
Notes, existing Indebtedness under that certain Amended and Restated
Credit Agreement dated as of June 1, 1998 among Parent, the lenders
party thereto and BT Commercial Corporation, as agent, and for the
payment of corporate overhead items (up to Two Million Five Hundred
Thousand Dollars ($2,500,000) in the aggregate during any fiscal year),
and (c) dividends paid in shares of capital stock of Parent or any
Subsidiary.
Permitted Encumbrances shall mean: (a) liens existing on the date
----------------------
hereof on specific items of Equipment and listed on Schedule 1.1(a)
hereto; (b) Purchase Money Liens; (c) Customarily Permitted Liens;
(d) liens granted to the Agent, on behalf of the Lenders, by each
Company and the Guarantors and liens granted to secure the Canada
Intercompany Loan; (e) liens of judgment creditors provided such liens
do not exceed, in the aggregate, at any time, One Million Dollars
($1,000,000) (other than liens bonded or insured to the reasonable
satisfaction of the Agent); (f) liens for taxes not yet due and payable,
or liens for taxes due and payable, which are being contested diligently
and in good faith by such Company, Guarantor or Subsidiary by
appropriate proceedings, and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP, but only if such liens (i) are not (other than with respect to
Real Estate) senior to the liens granted by the Companies to the Agent,
on behalf of the Lenders, or (ii) do not secure taxes owed to the United
States of America or any department thereof; (g) liens to secure
(i) Intercompany Loans made by any Guarantor or any Subsidiary to any
Company, (ii) Intercompany Loans made by a Subsidiary (not a Guarantor)
to another Subsidiary (not a Guarantor), and (iii) Intercompany
Receivables that qualify as Permitted Indebtedness hereunder; (h) liens
to secure Indebtedness of foreign domiciled Subsidiaries that qualifies
as Permitted Indebtedness hereunder; provided, that such liens are not
granted on the stock, share interests or equity interests of any such
Subsidiaries; (i) liens granted by each Company and the Guarantors to
the Term Financiers pursuant to the Term Financiers Loan Documents;
(j) liens granted by each Company and the Guarantors to ▇.▇. ▇▇▇▇▇
pursuant to the ▇.▇. ▇▇▇▇▇ Loan Documents; and (k) renewals and
extensions of liens constituting Permitted Encumbrances hereunder,
provided that the lien encumbering the asset giving rise to such
Permitted Encumbrance does not encumber any other asset of a Company,
Guarantor or Subsidiary.
Permitted Indebtedness 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 secured by Purchase Money Liens;
(c) Subordinated Debt; (d) Indebtedness arising under the Letters of
Credit and this Financing Agreement; (e) indebtedness arising under the
Term Financiers Financing Agreement, in an amount not to exceed, without
the prior written consent of the Agent, $30,000,000 plus, accrued and
unpaid interest thereon and all fees payable thereunder;
(f) indebtedness arising under the ▇.▇. ▇▇▇▇▇ Financing Agreement in an
amount not to exceed, without the prior written consent of the Agent,
$5,000,000 plus, accrued and unpaid interest thereon; (g) deferred taxes
and other expenses incurred in the ordinary course of business;
(h) other Indebtedness existing on the date of execution and set forth
on Schedule 1.1(c) attached hereto; (i) Intercompany Loans and
---------------
Intercompany Receivables; (j) Indebtedness incurred by foreign domiciled
Subsidiaries for their own working capital and general corporate
purposes not to exceed Fifteen Million Dollars ($15,000,000) in the
aggregate at any one time outstanding; provided, that in no event shall
such Indebtedness be guaranteed by a Company or Guarantor or be secured
by assets other than the assets of such Subsidiary incurring the
applicable Indebtedness; (k) Indebtedness to a third party, not secured
by liens or security interests of any kind, not to exceed Two Million
Five Hundred Thousand Dollars ($2,500,000) in the aggregate at any one
time outstanding; (l) the Canada Intercompany Loan; (m) guaranties
permitted under Section 7.9(e) hereof; and (n) refinancings and renewals
--------------
of Permitted Indebtedness, provided that the aggregate principal amount
thereof does not increase as a result of any such refinancing or renewal
from the amount outstanding at the time of such refinancing or renewal
unless such increase does not cause such Indebtedness to fail to qualify
as Permitted Indebtedness hereunder.
Permitted Investments shall mean: (a) readily marketable direct
---------------------
obligations of the United States of America or of any agency or
instrumentality thereof, the obligations of which are backed by the full
faith and credit of the United States of America, or readily marketable
obligations unconditionally guaranteed by the United States of America
or by any such agency or instrumentality, in each case maturing within
one year from the date of acquisition thereof; (b) certificates of
deposit, time deposits or bankers' acceptances maturing within one year
from the date of acquisition thereof issued by, or demand deposit
accounts maintained with, any commercial bank or trust company which is
a member of the Federal Reserve System, the long-term debt obligations
of which are rated at least A by ▇▇▇▇▇'▇ Investors Service Inc.
("Moody's") or Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. ("S&P") and which has combined capital and
surplus of at least Two Hundred Fifty Million Dollars ($250,000,000)
(any such bank or trust company, an "Eligible Bank"); (c) repurchase
agreements with respect to securities of the type referred to in the
foregoing clause (a) transacted with Eligible Banks, provided that each
such repurchase agreement obligates an Eligible Bank to repurchase the
securities which are the subject thereof no later than thirty (30) days
after the acquisition of such repurchase agreement; (d) money-market
preferred stock or money-market auction notes, in each case maturing or
redeemable at the option of the holder thereof no more than one year
after the date of acquisition thereof and having a rating of at least A3
by Moody's or at least A- by S&P, and Tax Exempt Obligations (as
hereinafter defined) in the form of auction rate reset notes that reset
within one year from the date of acquisition thereof; (e) obligations,
the interest with respect to which is exempt from federal income
taxation under Section 103 of the Internal Revenue Code, having a long
term rating of at least A3 or A-, or a short term rating of at least P-1
or A-1, by Moody's or S&P, respectively, and having a maturity of less
than two years ("Tax Exempt Obligations"), in addition to those
described in the foregoing clause (d); (f) open market commercial paper
of United States corporations maturing not later than Two Hundred
Seventy (270) days after the issuance thereof and having a rating of at
least P-2 by Moody's or at least A-2 by S&P; (g) investments in any
mutual fund registered under the Investment Company Act of 1940, as
amended, the portfolio of which is limited to Investments of the
character described in the foregoing clauses (a) through (f); and (h)
notes or other debt obligations or securities received in connection
with the bankruptcy or reorganization of customers and in settlement of
delinquent obligations of, or disputes with, customers or suppliers in
the ordinary course of business.
Person shall mean and include an individual, a partnership, a joint
------
venture, a limited liability company, a corporation (whether or not for
profit), a trust, an unincorporated organization, a government or any
department or agency thereof or any other entity or organization.
Pledgors means, collectively, Viskase Companies, Viskase
--------
Corporation, Viskase Sales and Viskase Holding.
Pledge Agreements means, collectively, the Viskase Companies
-----------------
Pledge, the Viskase Corporation Pledge, the Viskase Sales Pledge and the
Viskase Holding Pledge.
Prepayment Premium shall (a) mean the amount payable by the
------------------
Companies to the Agent for the benefit of the Lenders upon a voluntary
prepayment, in whole or in part, of the Term Loan on a date other than
the date occurring between the thirtieth (30th) day preceding the
Termination Date and the Termination Date and (b) be computed by
multiplying the amount so prepaid by one percent (1.00%).
Notwithstanding the foregoing, (a) if the Term Loan is prepaid in full
with the proceeds of asset sales (regardless of whether the Revolving
Line of Credit is terminated concurrently), the Lenders shall earn a
prepayment premium equal to one-quarter of one percent (0.25%) of the
principal amount of the Term Loan prepaid and (b) if the Term Loan is
prepaid in whole or in part with the proceeds of payments or damage
awards in connection with the existing American National Can litigation
described in the Collateral Assignment of Lawsuit Proceeds (regardless
of whether the Revolving Line of Credit is terminated concurrently), no
Prepayment Premium shall be due and payable.
Promissory Note shall mean the note, in the form of Exhibit A
--------------- ---------
attached hereto, delivered by the Company to Agent to evidence the Term
Loan.
Purchase Money Liens shall mean liens on any item of Equipment or
--------------------
real property (other than the Real Estate) acquired after the date of
this Financing Agreement (including by way of Capital Lease) provided
that (a) each such lien shall attach only to the property to be
acquired, (b) a description of the property so acquired (having a book
value in excess of One Hundred Thousand Dollars ($100,000)) is furnished
to the Agent, and (c) the debt incurred in connection with such
acquisitions shall not exceed in the aggregate Five Million Dollars
($5,000,000) at any time outstanding.
Real Estate shall mean the Companies' owned real property located
-----------
in Centerville, Iowa; Kentland, Indiana; Loudon, Tennessee; Osceola,
Arkansas; Pauls Valley, Oklahoma; Bensalem, Pennsylvania; Chicago,
Illinois and Bedford Park, Illinois , each parcel of which has been, or
will be, encumbered, mortgaged, pledged or assigned to the Agent on
behalf of the Lenders or its designee.
Real Estate Collateral Documents shall mean each Mortgage, Security
--------------------------------
Agreement and Assignment of Leases and Rents, each Deed of Trust,
Security Agreement and Assignment of Leases and Rents and the
Environmental Indemnity Agreement, each of even date herewith made by
the Companies, as applicable, in favor of Agent on behalf of the Lenders
with respect to each owned parcel of Real Estate.
Representative shall mean Viskase Corporation, which shall act as
--------------
Companies' sole and exclusive representative under this Agreement for
all purposes, including, without limitation, to receive funds advanced
hereunder, to receive notices and other communications from Lenders or
Agent hereunder, to make requests for advances of funds hereunder and to
amend this Agreement.
Required Lenders shall mean (a) at all times while there are (2)
----------------
two or fewer Lenders hereunder, all of the Lenders, and (b) at all times
while there are three (3) or more Lenders hereunder, those Lenders
holding at least fifty-one percent (51%) of the commitments under the
Line of Credit (or fifty-one percent (51%) of the outstanding balance of
all loans and Letters of Credit, in the event that the commitments of
the Lenders have terminated).
Revolving Base Rate Loans shall mean Revolving Loans bearing
-------------------------
interest at the Base Rate plus the Applicable Margin.
Revolving LIBOR Loans shall mean Revolving Loans which are LIBOR
---------------------
Loans.
Revolving Line of Credit shall mean the commitments of the Lenders
------------------------
to make Revolving Loans pursuant to Section 3 of this Financing
Agreement and to assist each Company in obtaining Letters of Credit
pursuant to Section 5 of this Financing Agreement (subject to the Letter
of Credit Sub-Line) in the maximum aggregate amount equal to FIFTY
MILLION DOLLARS ($50,000,000).
Revolving Loans shall mean the loans and advances made, from time
---------------
to time, to or for the account of each Company by the Agent on behalf of
the Lenders pursuant to Section 3 of this Financing Agreement.
Revolving Loan Account shall have the meaning specified in
----------------------
Section 3.6 of this Financing Agreement.
-----------
Security Agreements means, collectively, the Viskase Companies
-------------------
Security Agreement and the Viskase Holding Security Agreement.
Senior Secured Notes shall means those certain First Priority
--------------------
Senior Secured Notes due 2000 issued by Parent, pursuant to that certain
Indenture dated as of June 20, 1995 between Parent and Shawmut Bank
Connecticut, National Association, as Trustee.
Senior Unsecured Notes shall mean those certain 10 1/4% senior
----------------------
notes issued by Parent pursuant to that certain Indenture dated as of
December 31, 1993 between Parent and Bankers Trust Company, as Trustee.
Settlement Date shall mean Friday of each week (or if any Friday is
---------------
not a Business Day, the immediately preceding Business Day), provided
that, after the occurrence of an Event of Default or during a continuing
decline or sudden increase in the principal amount of Revolving Loans,
the Agent, in its discretion, may require that the Settlement Date occur
more frequently (even daily), so long as the Settlement Date chosen by
the Agent is a Business Day.
Subordinated Debt shall mean the debt owed by each Company to a
-----------------
Subordinating Creditor (and the instrument evidencing such debt).
Subordinating Creditors shall mean each of the Term Financiers and
-----------------------
▇.▇. ▇▇▇▇▇.
Subordination Agreements shall mean each agreement, in form and
------------------------
substance satisfactory to the Agent, among each Company, each Guarantor,
as applicable, each Subordinating Creditor and the Agent, on behalf of
the Lenders, pursuant to which the Subordinated Debt is subordinated to
the prior payment and satisfaction of the Companies' Obligations to the
Agent and the Lenders.
Subsidiary means any domestic or foreign corporation, partnership,
----------
joint venture, limited liability company or other entity or organization
of which a Person owns, directly or indirectly through one or more
intermediaries, more than fifty percent (50%) of the voting stock at the
time of determination.
Surplus Cash shall mean for any fiscal year of the Parent, the
------------
excess of the Parent's EBITDA for such fiscal year over Fixed Charges
for such fiscal year, in each case on a consolidated basis.
Tangible Net Worth shall mean, at any time, Net Worth plus
------------------
Subordinated Debt after subtracting therefrom the amount of any
intangible assets (as determined in accordance with GAAP), including
amounts due from Subsidiaries and amounts due from investments in
Subsidiaries (to the extent such amounts due were treated as assets in
the determination of Net Worth).
Term Base Rate Loans shall mean any borrowing of a Term Loan
--------------------
bearing interest at the Base Rate plus the Applicable Margin.
Term Financiers shall mean, collectively, General Motors Employee
---------------
Global Group Pension Trust, Department of Pensions - City of Los
Angeles, Navy Exchange Service Command Retirement Trust, Ratheon Co.
Master Pension Trust, and First Data Corporation Master Retirement Trust
and their successors and assigns.
Term Financiers Financing Agreement shall mean that certain
-----------------------------------
Financing Agreement, dated as of the date hereof, by and between the
Term Financiers and the Companies, as the same may be amended, restated
or supplemented from time to time.
Term Financiers Loan Documents shall mean the Term Financiers
------------------------------
Financing Agreement and all other instruments and documents that are in
effect as of the date hereof and are executed in connection with or
otherwise relating to the Term Financiers Financing Agreement, as the
same may be amended, restated or supplemented from time to time.
Term LIBOR Loans shall mean any borrowing of a Term Loan which is
----------------
a LIBOR Loan.
Term Loan Promissory Note shall mean the promissory note in the
-------------------------
form of Exhibit A hereto, executed by the Company to evidence the Term
Loan .
Term Loan shall mean the term loan in the original principal amount
---------
of FIFTY MILLION DOLLARS ($50,000,000), made by the Lenders pursuant to,
and repayable in accordance with, the provisions of Section 4 of this
---------
Financing Agreement.
Termination Date shall mean June 30, 2001.
----------------
Total Liabilities shall mean total liabilities of each Company
-----------------
determined in accordance with GAAP, on a basis consistent with the
latest audited financial statements of the Companies.
Trade Accounts Receivable shall mean that portion of Accounts which
-------------------------
arises from the sale of Inventory or the rendition of services in the
ordinary course of business.
Trademarks shall have the meaning assigned to that term in the
----------
definition of "General Intangibles" in this Agreement, and all cash and
non-cash proceeds thereof.
U.C.C. shall mean the Uniform Commercial Code as in effect from
-----
time to time in the State of Illinois.
Viskase Brazil means Viskase Brasil Embalagens, organized under the
--------------
laws of Brazil.
Viskase Canada means Viskase Canada Inc., a corporation organized
--------------
under the laws of Ontario, Canada.
Viskase Chile means Viskase Chile Embalajes LTDA, organized under
-------------
the laws of Chile.
Viskase Companies Pledge means that certain Pledge Agreement of
------------------------
even date herewith made by Parent in favor of Agent pledging one hundred
percent (100%) of the capital stock of Viskase Corporation, Viskase
Films and all other directly owned Subsidiaries of Parent, as described
therein.
Viskase Companies Security Agreement means that certain Security
------------------------------------
Agreement of even date herewith made by Parent in favor of Agent.
Viskase Corporation Pledge means that certain Pledge Agreement of
--------------------------
even date herewith made by Viskase Corporation in favor of Agent
pledging one hundred percent (100%) of the capital stock of Viskase
Sales and Viskase Holding.
Viskase Europe means Viskase Europe Limited, organized under the
--------------
laws of the United Kingdom.
Viskase Films means Viskase Films, Inc., a Delaware corporation.
-------------
Viskase Holding means Viskase Holding, Inc., a Delaware
---------------
corporation.
Viskase Holding Pledge means that certain Pledge Agreement of even
----------------------
date herewith made by Viskase Holding in favor of Agent pledging (i)
sixty-five percent (65%) of the capital stock of Viskase Europe and
Viskase Brazil and (ii) one hundred percent (100%) of the capital stock
of Viskase Australia Limited.
Viskase Holding Security Agreement means that certain Security
----------------------------------
Agreement of even date herewith made by Viskase Holding in favor of
Agent.
Viskase Sales Pledge means that certain Pledge Agreement of even
--------------------
date herewith made by Viskase Sales in favor of Agent pledging one
hundred percent (100%) of the capital stock of Viskase Puerto Rico
Corporation.
Working Capital means Current Assets less Current Liabilities.
---------------
SECTION 2. Conditions Precedent
--------------------
2.1 The obligation of the Agent and the Lenders to make the
initial loans hereunder is subject to the satisfaction, immediately
prior to or concurrently with the making of such loans, of the following
conditions precedent:
(a) Lien Priority - The liens granted in favor of the Agent
-------------
pursuant to the Loan Documents shall be valid and perfected, first
priority liens on the Collateral subject only to the Permitted
Encumbrances.
(b) Term Financiers Loan Documents and ▇.▇. ▇▇▇▇▇ Loan
--------------------------------------------------
Documents. The terms and conditions of each of the Term Financiers Loan
---------
Documents and the ▇.▇. ▇▇▇▇▇ Loan Documents shall be satisfactory to
Agent in all respects. Each Company shall have executed and delivered
to the Agent the Term Financiers Loan Documents and the ▇.▇. ▇▇▇▇▇ Loan
Documents.
(c) Fraudulent Conveyances and Similar Issues. The Agent
-----------------------------------------
shall be satisfied with all fraudulent conveyances and similar issues
arising out of the structure of the financing arrangements provided for
under the terms and conditions of the Loan Documents, the Term
Financiers Loan Documents and the ▇.▇. ▇▇▇▇▇ Loan Documents.
(d) Lien Searches - The Agent shall have received tax,
-------------
judgment and U.C.C. searches (or the foreign country equivalents
thereof) satisfactory to the Agent for all locations presently occupied
or used by each Company, each Guarantor, and such other Subsidiaries
deemed necessary by Agent.
(e) Casualty Insurance - Each Company and each Guarantor
------------------
shall have delivered to the Agent evidence satisfactory to the Agent
that casualty insurance policies listing the Agent on behalf of the
Lenders as loss payee or mortgagee, as the case may be, are in full
force and effect, all as set forth in paragraph (a) of Section 7.5 of
this Financing Agreement.
(f) Mortgages/Deeds of Trust/Assignments of Rents - The
---------------------------------------------
Companies shall have executed and delivered to the Agent on behalf of
the Lenders (or to an agent of the Agent or an agent of a title
insurance company acceptable to the Agent), such mortgages, deeds of
trust and assignments of rents and leases as the Agent may reasonably
require to obtain first liens on the Real Estate, including, without
limitation, the Real Estate Collateral Documents.
(g) UCC Filings - Any documents (including without
-----------
limitation, financing statements) required to be filed in order to
create, in favor of the Agent on behalf of the Lenders, a first priority
and, subject to Permitted Encumbrances, exclusive perfected security
interest in the Collateral and substantially all of the assets of the
Guarantors (to the extent that such a security interest may be perfected
by a filing under the U.C.C.), shall have been properly filed in each
office in each jurisdiction required in order to create in favor of the
Agent on behalf of the Lenders a perfected lien on the Collateral. The
Agent shall have received acknowledgment copies of all such filings (or,
in lieu thereof, the Agent shall have received other evidence
satisfactory to the Agent that all such filings have been made); and the
Agent shall have received evidence that all necessary filing fees, taxes
and other expenses related to such filings have been paid in full.
(h) Title Insurance Policies - The Agent shall have
------------------------
received, in respect of each mortgage or deed of trust, a mortgagee's
marked-up unconditional commitment for title insurance from a title
insurance company reasonably satisfactory to the Agent (the "Title
Insurance Company"). Each such commitment shall obligate the Title
Insurance Company to issue to the Agent a title insurance policy (i) in
an amount not less than the appraised value of the Real Estate covered
thereby; (ii) that insures that the mortgage or deed of trust insured
thereby creates a valid first priority lien on the property covered by
such mortgage or deed of trust, free and clear of all defects and
encumbrances except for Permitted Encumbrances; (iii) that names the
Agent, for the benefit of the Lenders, as the insured thereunder; and
(iv) that contains such endorsements and effective coverage as the Agent
may reasonably request, including without limitation a revolving line of
credit endorsement. The Agent also shall have received evidence that
all premiums in respect of the policies to be issued have or will be
paid on the Closing Date and that all charges for mortgage taxes and
recording fees, if any, shall have been paid.
(i) Surveys - The Agent and the Title Insurance Company shall
-------
have received maps or plats of a perimeter or boundary of the site of
each of the properties covered by the mortgages or deeds of trust, dated
a date satisfactory to the Agent and the Title Insurance Company
prepared by an independent professional licensed land surveyor
satisfactory to the Agent and the relevant Title Insurance Company,
which maps or plats and the surveys on which they are based shall be
made in accordance with the Minimum Standard Detail Requirements for
Land Title Surveys jointly established and adopted by the American Land
Title Association and the American Congress on Surveying and Mapping;
and, without limiting the generality of the foregoing, there shall be
surveyed and shown on the maps or plats or surveys the following:
(i) the locations on such sites of all the buildings, structures and
other improvements and the established building setback lines insofar as
the foregoing affect the perimeter or boundary of such property;
(ii) the lines of streets abutting the sites and width thereof;
(iii) all access and other easements appurtenant to the sites or
necessary or desirable to use the sites; (iv) all roadways, paths,
driveways, easements, encroachments and overhanging projections and
similar encumbrances affecting the sites, whether recorded, apparent
from a physical inspection of the sites or otherwise known to the
surveyor; (v) any encroachments on any adjoining property by the
building structures and improvements on the sites; and (vi) if the site
is designated as being on a filed map, a legend relating the survey to
said map. Further, the survey shall be certified to the Agent in behalf
of the Lenders and the Title Insurance Company and contain a legend
reciting as to whether or not the site is located in a flood zone.
(j) Guaranty and Guarantor Security Agreements - (i) Each
------------------------------------------
Guarantor shall have executed and delivered to the Agent a guaranty, in
form acceptable to the Agent, guaranteeing the Obligations, including,
but not limited to, the Guaranty, and (ii) each of Parent and Viskase
Holding shall have executed a security agreement and other appropriate
security documents, including, but not limited to, the Security
Agreements, pursuant to which Parent and Viskase Holding each grant to
the Agent, for the benefit of the Lenders, a security interest in
substantially all of its assets.
(k) Opinions - Subject to the filing, priority and remedies
--------
provisions of the U.C.C., the provisions of the Bankruptcy Code,
insolvency statutes or other like laws, the equity powers of a court of
law and such other matters as may be agreed upon with the Agent, counsel
for the Company, the Pledgors and the Guarantors shall have delivered to
the Agent opinion(s) satisfactory to the Agent opining, inter alia,
that: (x) this Financing Agreement, the Guaranties, the Security
Agreements and the Pledge Agreements executed by each Company, each
Guarantor and each Pledgor, as applicable, and all other Loan Documents
executed by each Company and delivered to the Agent in connection with
this Financing Agreement are (1) valid, binding and enforceable
according to their respective terms, (2) duly authorized and (3) do not
violate any terms, provisions, representations or covenants in the
charter, by-laws or other organizational agreement of any Company, any
Pledgor or any Guarantor or, to the best knowledge of such counsel, of
any loan agreement, mortgage, deed of trust, note, security or pledge
agreement or indenture to which any Company, any Pledgor or any
Guarantor is a signatory or by which any Company, any Pledgor, any
Guarantor or any Company's, any Pledgor's or any Guarantor's assets are
bound.
(l) Pledge Agreements - Each Pledgor, as applicable, shall
-----------------
(i) execute and deliver to the Agent on behalf of the Lenders the Pledge
Agreements, and (ii) deliver to the Agent on behalf of the Lenders the
stock certificates evidencing such stock together with duly executed
stock powers with respect thereto, as applicable.
(m) Intercreditor Agreement - GECC and all applicable parties
-----------------------
shall have entered into the GECC Intercreditor Agreement with Agent, in
form and substance acceptable to Agent.
(n) Additional Documents - Each Company shall have executed
--------------------
and delivered to the Agent loan documents necessary to consummate the
lending arrangement contemplated among the Companies and the Lenders.
(o) Subordination Agreement(s) - Each Subordinating
--------------------------
Creditor(s) shall have executed and delivered to the Agent a
Subordination Agreement.
(p) Environmental Reports - The Agent shall have received
---------------------
environmental audit reports on (i) all of each Company's leasehold and
fee interests in the Real Estate, and (ii) the Company's waste disposal
practices. The reports must be satisfactory to the Agent and not
disclose or indicate any material liability (real or potential) arising
out of any Company's premises, its operations, its waste disposal
practices or waste disposal sites used by any Company.
(q) Board Resolutions - The Agent shall have received a copy
-----------------
of the resolutions of the Board of Directors of each Company, each
Pledgor and each Guarantor (as the case may be) authorizing the
execution, delivery and performance of (i) this Financing Agreement, as
applicable, (ii) the Guaranties executed by the Guarantors, as
applicable, (iii) the Pledge Agreements executed by each Pledgor, as
applicable, and (iv) any related agreements, in each case certified by
the Secretary or Assistant Secretary of each Company, the Pledgors and
the Guarantors (as the case may be) as of the date hereof, together with
a certificate of the Secretary or Assistant Secretary of each Company,
each Pledgor and each Guarantor (as the case may be) as to the
incumbency and signature of the officers executing such agreements and
any certificate or other documents to be delivered by them pursuant
hereto.
(r) Corporate Organization - The Agent shall have received
----------------------
(i) a copy of the Certificate or Articles of Incorporation (or other
equivalent organizational documents) of each Company, each Pledgor and
each Guarantor, certified by the applicable authority in such entity's
State of organization or foreign country of organization, as applicable,
and (ii) copies of the By-Laws or equivalent corporate constituent
document (as amended through the date hereof), if any, of each Company,
each Pledgor and each Guarantor, certified by the Secretary or Assistant
Secretary thereof.
(s) Officer's Certificate - The Agent shall have received an
---------------------
executed Officer's Certificate of each Company, satisfactory in form and
substance to the Agent, certifying that (i) the representations and
warranties contained herein are true and correct in all material
respects on and as of the date hereof, (ii) each Company is in
compliance with all of the terms and provisions set forth herein and
(iii) no Default or Event of Default has occurred.
(t) Absence of Default - No Default, Event of Default or any
------------------
fact or circumstance having a Material Adverse Effect shall have
occurred or arisen.
(u) Appraisals - The Agent shall have received appraisals on
----------
each Company's fixed assets, which appraisals shall be by an appraiser
acceptable to Agent and shall indicate an orderly liquidation value
acceptable to the Agent with respect to the Equipment, and a fair market
value acceptable to the Agent with respect to the aggregate value of the
owned Real Estate.
(v) Legal Restraints/Litigation - At the date of execution of
---------------------------
this Financing Agreement, there shall be no (i) litigation,
investigation or proceeding (judicial or administrative) pending or
threatened against any Company, any Pledgor or any Guarantor or any of
their assets or respective Subsidiaries, by any agency, division or
department of any county, city, state or federal government arising out
of this Financing Agreement, (ii) injunction, writ or restraining order
restraining or prohibiting the consummation of the financing
arrangements contemplated under this Financing Agreement or (iii) to the
best knowledge of each Company, suit, action, investigation or
proceeding (judicial or administrative) pending or threatened against
any Company, any Pledgor, any Guarantor or any of their respective
Subsidiaries or their assets, which, in the opinion of the Agent, if
adversely determined could have a Material Adverse Effect.
(w) Disbursement Authorization - The Companies shall have
--------------------------
delivered to the Agent all information necessary for the Agent to issue
wire transfer instructions on behalf of the Companies for the initial
and subsequent loans and/or advances to be made by the Agent and/or the
Lenders under this Financing Agreement including, but not limited to,
disbursement authorizations in form acceptable to the Agent.
(x) Examination & Verification; Availability - The Agent
----------------------------------------
shall have completed to the satisfaction of the Agent an examination and
verification of the Accounts, Inventory, books and records of each
Company and each Guarantor which examination shall indicate that, after
giving effect to all loans, advances and extensions of credit to be made
at closing, the Companies shall have an opening additional Availability
of Ten Million Dollars ($10,000,000).
(y) Collection Accounts; Payment Direction - The Agent on
--------------------------------------
behalf of the Lenders shall have established a lockbox and opened a bank
account in its name for the collection of each Company's Accounts and
the deposit of the proceeds of the Collateral, and the Agent, each
Company and the depository bank shall have entered into an agreement in
form and substance satisfactory to the Agent regarding the
administration and control of such lockbox and bank account. In
addition, each Company shall have provided the Agent with satisfactory
evidence that such Company has directed its account debtors to send
payments on all Accounts directly to such lockbox.
(z) Existing Revolving Credit Agreement - (i) The Companies'
-----------------------------------
existing credit agreement agented by BT Commercial Corporation shall be
terminated, (ii) all loans and obligations of each Company and/or the
Guarantors and each Pledgor thereunder shall be paid or satisfied in
full utilizing the proceeds of the initial Revolving Loans and the Term
Loan to be made under this Financing Agreement and (iii) all liens upon
or security interest in favor of BT Commercial Corporation, as
collateral agent, in connection therewith shall be terminated and/or
released upon such payment.
(aa) Agent Proposal Letter/Fee Letter - Each Company shall
--------------------------------
have (i) fully complied, to the satisfaction of the Agent, with all of
the terms and conditions of the Agent Proposal Letter (except to the
extent specifically overridden in the fee letter referred to in clause
(ii) below), and (ii) paid to Agent all sums due to Agent pursuant to
the fee letter agreement dated as of June 14, 1999 between Agent and the
Companies, which fee letter agreement is deemed incorporated herein by
this reference.
(ab) ▇.▇. ▇▇▇▇▇ Payoff - All amounts owed to ▇.▇. ▇▇▇▇▇,
-----------------
however evidenced, incurred prior to the date hereof, shall be fully
paid or refinanced and all liens, mortgages, deeds of trust, security
interests and filings related thereto shall be duly released prior to
the Closing Date, and evidence of such releases, satisfactory to Agent,
shall be provided to Agent on or prior to the Closing Date.
(ac) Collateral Assignment of Intercompany Loan - All amounts
------------------------------------------
owed by Viskase Canada to any Company or any Guarantor from time to time
shall be (i) evidenced by a Promissory Note payable by Viskase Canada to
such Company or Guarantor and (ii) secured by all of the assets of
Viskase Canada pursuant to a Security Agreement in form and substance
acceptable to Agent (the "Canada Security Agreement"). On the Closing
Date, and from time to time thereafter, as applicable, such Company or
Guarantor loaning funds to Viskase Canada shall execute a Collateral
Assignment of Intercompany Note and Security Agreement of even date
herewith (the "Collateral Assignment of Intercompany Loan") in favor of
Agent, for the benefit of the Lenders, pursuant to which such Company or
Guarantor shall assign all right, title and interest in the Canada
Intercompany Loan and the Canada Security Agreement to Agent as
collateral security for the Obligations, and such Company or Guarantor
shall execute such financing statements, documents, instruments and
agreements as shall be necessary to perfect the foregoing security
interest assignment in favor of Agent, as Agent so requests.
Upon the execution of this Financing Agreement and the initial
disbursement of loans hereunder, all of the above conditions precedent
shall have been deemed satisfied except as each Company and the Agent
shall otherwise agree herein or in a separate writing.
2.2 The obligation of the Agent and the Lenders to make any loan
to any Company or to assist any Company in the issuance of any Letter of
Credit after the Closing Date is subject to the satisfaction,
immediately prior to or concurrently with the making of such loan, of
the following conditions precedent:
(a) No Default or Event of Default shall have occurred and
remain outstanding; and
(b) All representations and warranties made by each Company
in this Financing Agreement shall be true and correct in all material
respects.
All of the representations and warranties made by each Company in this
Financing Agreement shall be deemed to be remade by each Company each
time that any Company requests a Revolving Loan or a Letter of Credit
hereunder, and each such request shall also constitute, unless otherwise
disclosed in writing to Agent, a representation and warranty by each
Company that after giving effect to the requested advance, no Default or
Event of Default then exists or would result therefrom, and that such
requested Revolving Loan is within the Revolving Line of Credit
Availability.
SECTION 3. Revolving Loans
---------------
3.1 The Agent and the Lenders severally (and not jointly) agree,
subject to the terms and conditions of this Financing Agreement from
time to time, so long as sufficient Availability exists (but subject to
the Agent's and each Lender's right to make "overadvances"), to make
loans and advances to each Company on a revolving basis in amounts up to
the Borrowing Base. All requests for loans and advances must be
received from Representative by an officer of Agent no later than
1:00 p.m., New York time, of the Business Day on which such loans and
advances are required. Should Agent for any reason honor requests for
advances in excess of the limitations set forth herein, such advances
shall be considered "overadvances" and shall be made in Agent's sole
discretion, subject to any additional terms Agent deems necessary.
3.2 In furtherance of the continuing assignment and security
interest in each Company's Accounts, each Company will, upon the
reasonable request of Agent relating to the creation of Accounts,
execute and deliver to the Agent, in such form and manner as the Agent
may reasonably require, solely for the Agent's convenience in
maintaining records of collateral, such confirmatory schedules of
Accounts as the Agent may reasonably request, and such other appropriate
reports designating, identifying and describing the Accounts as the
Agent may reasonably require. In addition, upon the Agent's reasonable
request, each Company shall provide the Agent with copies of agreements
with, or purchase orders from, such Company's customers, and copies of
invoices to customers, proof of shipment or delivery and such other
documentation and information relating to said Accounts and other
collateral as the Agent may reasonably require. Failure to provide the
Agent with any of the foregoing shall in no way affect, diminish, modify
or otherwise limit the security interests granted herein. Each Company
hereby authorizes the Agent to regard each Company's printed name or
rubber stamp signature on assignment schedules or invoices as the
equivalent of a manual signature by one of such Company's authorized
officers or agents.
3.3 Each Company hereby represents and warrants to the Agent and
the Lenders that: (a) each Trade Account Receivable is based on an
actual and bona fide sale and delivery of goods or rendition of services
to customers, made by such Company in the ordinary course of its
business; (b) the Inventory being sold and the Trade Accounts Receivable
created are the exclusive property of such Company 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; (c) the invoices evidencing such Trade Accounts
Receivable are in the name of such Company; and (d) except as may
otherwise be disclosed to Agent from time to time pursuant to
Section 3.5 below, the customers of each Company have accepted the goods
or services, owe and are obligated to pay the full amounts stated in the
invoices according to their terms, without dispute, offset, defense,
counterclaim or contra, other than normal returns, disputes and other
matters arising in the ordinary course of business. Each Company
confirms to the Agent that any and all taxes or fees relating to its
business, its sales, the Accounts or goods relating thereto, are its
sole responsibility. Each Company also represents and warrants to the
Agent and the Lenders that each Company is a duly and validly existing
corporation, and is qualified in all states where the failure to so
qualify would have a Material Adverse Effect. Each Company agrees to
maintain such books and records regarding Accounts as the Agent may
reasonably require and agrees that the books and records of each Company
will reflect the interest of the Agent, on behalf of the Lenders, in the
Accounts. All of the books and records of each Company will be
available to the Agent and the Lenders at normal business hours upon
reasonable notice of at least one (1) Business Day prior to an Event of
Default, including any records handled or maintained for each Company by
any other company or entity.
3.4 Each Company may and will enforce, collect and receive all
Accounts and other proceeds from sales of Inventory for the Lenders'
benefit and on the Lenders' behalf, but at each Company's expense. All
checks, cash, notes or other instruments or property received by any
Company with respect to sales of Inventory shall be held by such Company
in trust for the Agent, for the benefit of the Lenders, separate from
such Company's other property and funds, and deposited directly into the
Depository Account on each Business Day. Funds remaining on deposit in
the Depository Account at the end of each Business Day shall be wire
transferred to the Agent's bank account at The Chase Manhattan Bank in
New York, New York ("Agent's Bank Account") for application against the
obligations in accordance with the terms hereof. Each Company agrees to
take all actions reasonably required by the Agent or any financial
institution at which the Depository Account is maintained in order to
effectuate the transfer of funds contemplated above. All amounts
received by the Agent from the Depository Account and any other proceeds
of the Collateral deposited into the Agent's Bank Account will be
credited to the Companies' Revolving Loan Account upon the Agent's
receipt of "collected funds" at the Agent's Bank Account on the Business
Day of receipt, if received no later than 1:00 pm, New York time, or on
the next succeeding Business Day, if received after 1:00 pm, New York
time. No checks, drafts or other instrument received by the Agent shall
constitute final payment to the Lenders unless and until such
instruments have actually been collected.
3.5 Each Company agrees to notify the Agent promptly of any
matters materially affecting the value, enforceability or collectibility
of the Accounts and of all material customer disputes, offsets,
defenses, counterclaims, returns, rejections and all reclaimed or
repossessed merchandise or goods. Each Company agrees to issue credit
memoranda promptly (with duplicates to the Agent upon request after the
occurrence of an Event of Default) upon accepting returns or granting
allowances, and may continue to do so until the Agent has notified the
Representative following the occurrence and during the continuance of an
Event of Default that all future credits or allowances are to be made
only after the Agent's prior written approval. Upon the occurrence of
an Event of Default and until such time as such Event of Default is
waived, and on notice from the Agent, each Company agrees that all
returned, reclaimed or repossessed merchandise or goods shall be set
aside by each Company and held by each Company for the account of the
Agent, on behalf of the Lenders, as owner and assignee.
3.6 The Agent shall maintain an account on its books in the
Companies' name (the "Revolving Loan Account") in which the Companies
will be charged with loans and advances made by the Agent and the
Lenders to each Company or for each Company's account, and with any
other Obligations, including any and all costs, expenses and reasonable
attorney's fees which the Agent may incur in connection with the
exercise by or for the Agent of any of the rights or powers herein
conferred upon the Agent, or in the prosecution or defense of any action
or proceeding to enforce or protect any rights of the Agent or the
Lenders in connection with this Financing Agreement or the Collateral
assigned hereunder, or any Obligations. The Companies will be credited
with all amounts received by the Agent from each of the Companies or
from others for the Companies' account, including, as above set forth,
all amounts received by the Agent in payment of Accounts and sales of
Inventory, and such amounts will be applied to payment of the
Obligations. In no event shall prior recourse to any Accounts,
Inventory or other security granted to or by any Company be a
prerequisite to the Agent's or the Lenders' rights to demand payment of
any Obligation.
3.7 After the end of each month, the Agent shall promptly send the
Representative and the Lenders a statement showing the accounting for
the charges, loans, advances and other transactions occurring among the
Agent, the Lenders and the Companies during that month. The monthly
statements shall be deemed correct and binding upon each Company and the
Lenders, and shall constitute accounts stated between the Companies and
the Lenders absent manifest error, unless the Agent receives a written
statement of the exception from the Representative or any Lender within
thirty (30) days of the date of the monthly statement.
3.8 If at any time (a) the sum of the outstanding balance of
Revolving Loans and outstanding balance of Letters of Credit exceed the
Revolving Line of Credit, or (b) Availability is less than zero, the
amount of such excess (in the case of clause (a)) or the amount of the
Obligations required to be repaid to make Availability greater than zero
(in the case of clause (b)), shall be immediately due and payable to the
Agent, for the benefit of the Lenders.
SECTION 4. Term Loan
---------
4.1 Each Company hereby agrees to execute and deliver to the Agent
the Term Loan Promissory Note to evidence the Term Loan to be extended
to each Company by the Lenders.
4.2 Upon receipt of the Term Loan Promissory Note, the Lenders
hereby severally (and not jointly) agree to extend to the Companies the
Term Loan in the original principal amount of Fifty Million Dollars
($50,000,000).
4.3 The principal amount of the Term Loan shall be repaid by the
Company in six (6) consecutive quarterly principal installments of One
Million Seven Hundred Eighty-Five Thousand Seven Hundred Fifteen Dollars
($1,785,715) each, commencing January 4, 2000 and on the first day of
each calendar quarter thereafter through April 1, 2001. The entire
remaining principal balance of the Term Loan shall be due and payable in
full on June 30, 2001.
4.4 In the event this Financing Agreement or the Line of Credit is
terminated by one or more Lenders (acting through the Agent) or the
Companies for any reason whatsoever as provided in Section 11 hereof,
the Term Loans shall become due and payable on the effective date of
such termination notwithstanding any provision to the contrary in the
Term Loan Promissory Note or this Financing Agreement.
4.5 The Companies, at their option, may prepay the Term Loan at
any time, in whole or in part, provided that on each such prepayment,
the Companies shall pay (a) accrued interest on the principal so prepaid
to the date of such prepayment and (b) the Prepayment Premium then due,
if any.
4.6 In the event the Companies have generated Surplus Cash in any
fiscal year, on or prior to the date which is ninety (90) days after the
end of such fiscal year, there shall be due and payable a Mandatory
Prepayment of the Term Loan in an amount equal to fifty percent (50%) of
the Surplus Cash for such fiscal year; provided, that no such Mandatory
--------
Prepayment shall be required hereunder to the extent that such Mandatory
Prepayment would reduce the average daily amount of Availability for the
thirty (30) day period ending on the date such Mandatory Prepayment is
due to less than Ten Million Dollars ($10,000,000). No Prepayment
Premium shall be due with respect to prepayments made under this
Section.
4.7 Each prepayment of the Term Loan (whether voluntary or
mandatory) shall be applied to the last maturing installments of
principal of the Term Loan until fully repaid.
4.8 Each Company hereby authorizes the Agent to charge the
Companies' Revolving Loan Account with the amount of all amounts due
under this Section 4 as such amounts become due. Any amount charged to
---------
the Companies' Revolving Loan Account shall be deemed a Revolving Loan
hereunder and shall incur interest at the rate provided in Section 8.1
-----------
of this Financing Agreement. Each Company confirms that any charges
which the Agent may make to the Companies' Revolving Loan Account as
herein provided will be made as an accommodation to the Companies and
solely at the Agent's discretion.
SECTION 5. Letters of Credit
-----------------
In order to assist the Companies in establishing or opening Letters
of Credit with an Issuing Bank, the Companies have requested that the
Agent, on behalf of the Lenders, join in the applications for such
Letters of Credit, and/or guarantee payment or performance of such
Letters of Credit and any drafts or acceptances thereunder through the
issuance of a Letter of Credit Guaranty, thereby lending the Lenders'
credit to each Company, and the Agent and the Lenders have agreed to do
so. These arrangements shall be handled by the Agent subject to the
terms and conditions set forth below.
5.1 Within the Revolving Line of Credit and Availability, the
Lenders (acting through the Agent) shall assist each Company in
obtaining Letters of Credit in an aggregate undrawn amount outstanding
at any time equal to or less than the Letter of Credit Sub-Line. The
Lenders' assistance for amounts in excess of the limitation set forth
herein shall at all times and in all respects be in the Agent's sole
discretion. It is understood that the terms, conditions and purpose of
each Letter of Credit (and any modifications thereof) shall be subject
to the prior approval of the Agent in the exercise of its reasonable
discretion. Any and all outstanding Letters of Credit shall be treated
as Revolving Loans for Availability purposes. Notwithstanding anything
herein to the contrary, upon the occurrence of a Default or Event of
Default, the Agent's and the Lenders' assistance in connection with any
Letter of Credit Guaranty shall be in the Agent's sole discretion until
such Event of Default is waived.
5.2 The Agent shall have the right, without notice to any Company,
to charge the Companies' Revolving Loan Account with the amount of any
and all indebtedness, liability or obligation of any kind incurred by
the Agent under any Letter of Credit Guaranty at the earlier of
(a) payment by the Agent, on behalf of the Lenders, under such Letter of
Credit Guaranty, (b) the occurrence of an Event of Default or (c) the
termination of the Revolving Line of Credit or this Financing Agreement.
Any amount charged to the Companies' Revolving Loan Account shall be
deemed a Revolving Loan hereunder and shall incur interest at the rate
provided in Section 8.1 of this Financing Agreement.
-----------
5.3 Each Company unconditionally indemnifies the Agent and the
Lenders against, and holds the Agent and the Lenders harmless from, any
and all loss, claim or liability incurred by the Agent or the Lenders
arising from any transactions or occurrences relating to Letters of
Credit established or opened for the Companies' account, the collateral
relating thereto and any drafts or acceptances thereunder, and all
Obligations thereunder, other than for any such loss, claim or liability
arising out of the gross negligence or willful misconduct by the Agent
under the Letter of Credit Guaranty. Each Company further agrees to
hold the Agent and the Lenders harmless from any errors or omission,
negligence or misconduct by the Issuing Bank. Each Company's
unconditional obligations to the Agent and the Lenders hereunder shall
not be modified or diminished for any reason or in any manner
whatsoever, other than as a result of the Agent's gross negligence or
willful misconduct. Each Company agrees that any charges incurred by
the Agent for the Companies' account by the Issuing Bank shall be
conclusive on the Agent and the Lenders, and may be charged to the
Companies' Revolving Loan Account.
5.4 Neither the Agent nor any Lender shall be responsible for:
(a) the existence, character, quality, quantity, condition, packing,
value or delivery of the goods purporting to be represented by any
documents; (b) any difference or variation in the character, quality,
quantity, condition, packing, value or delivery of the goods from that
expressed in the documents; (c) the validity, sufficiency or genuineness
of any documents or of any endorsements thereon, even if such documents
should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (d) the time, place, manner or order in which
shipment is made; (e) partial or incomplete shipment, or failure or
omission to ship any or all of the goods referred to in the Letters of
Credit or documents; (f) any deviation from instructions; (g) delay,
default, or fraud by the shipper and/or anyone else in connection with
the Collateral or the shipping thereof; or (h) any breach of contract
between the shipper or vendors and any Company. Furthermore, without
being limited by the foregoing, neither the Agent nor any Lender shall
be responsible for any act or omission with respect to or in connection
with any Collateral unless such act or omission constitutes gross
negligence or willful misconduct.
5.5 Each Company agrees that any action taken by the Agent or any
Lender, if taken in good faith, or any action taken by any Issuing Bank
of whatever nature under or in connection with the Letters of Credit,
the guarantees, the drafts or acceptances, or the Collateral, shall be
binding on each Company and shall not put the Agent or any Lender in any
resulting liability to any Company. In furtherance thereof but subject
to Section 5.6 below, the Agent shall have the full right and authority
-----------
to clear and resolve any questions of non-compliance of documents; to
give any instructions as to acceptance or rejection of any documents or
goods; to execute any and all steamship or airways guaranties (and
applications therefor), indemnities or delivery orders; to grant any
extensions of the maturity of, time of payment for, or time of
presentation of, any drafts, acceptances, or documents; and to agree to
any amendments, renewals, extensions, modifications, changes or
cancellations of any of the terms or conditions of any of the
applications, Letters of Credit, drafts or acceptances; all in the sole
name of the Agent, on behalf of the Lenders, and the Issuing Bank shall
be entitled to comply with and honor any and all such documents or
instruments executed by or received solely from the Agent, all without
any notice to or any consent from any Company.
5.6 Without the Agent's express consent and endorsement in
writing, each Company agrees: (a) not to execute any and all
applications for steamship or airway guaranties, indemnities or delivery
orders; to grant any extensions of the maturity of, time of payment for,
or time of presentation of, any drafts, acceptances or documents; or to
agree to any amendments, renewals, extensions, modifications, changes or
cancellations of any of the terms or conditions of any of the
applications, Letters of Credit, drafts or acceptances; and (b) upon
instruction from the Agent, after the occurrence of an Event of Default
which is not waived, not to (i) clear and resolve any questions of non-
compliance of documents or (ii) give any instructions as to acceptances
or rejection of any documents or goods.
5.7 Each Company agrees that any necessary import, export or other
licenses or certificates for the import or handling of the Collateral
will have been promptly procured; all foreign and domestic governmental
laws and regulations in regard to the shipment and importation of the
Collateral, or the financing thereof will have been promptly and fully
complied with in all material respects; and any certificates in that
regard that the Agent may at any time request will be promptly
furnished. In this connection, each Company warrants and represents to
the Agent and the Lenders that all shipments made under any such Letters
of Credit are in accordance in all material respects with the laws and
regulations of the countries in which the shipments originate and
terminate, and are not prohibited by any such laws and regulations.
Each Company assumes all risk, liability and responsibility for, and
agrees to pay and discharge, all present and future local, state,
federal or foreign taxes, duties, or levies pertaining to the
importation and delivery of the Collateral. Any embargo, restriction,
laws, customs or regulations of any country, state, city, or other
political subdivision, where the Collateral is or may be located, or
wherein payments are to be made, or wherein drafts may be drawn,
negotiated, accepted, or paid, shall be solely the Companies' risk,
liability and responsibility.
5.8 Upon any payments made to the Issuing Bank under the Letter of
Credit Guaranty, the Agent, for the benefit of the Lenders, shall
acquire by subrogation, any rights, remedies, duties or obligations
granted or undertaken by each Company to the Issuing Bank in any
application for Letters of Credit, any standing agreement relating to
Letters of Credit or otherwise, all of which shall be deemed to have
been granted to the Agent and apply in all respects to the Agent, and
shall be in addition to any rights, remedies, duties or obligations
contained herein.
SECTION 6. Collateral
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6.1 As security for the prompt payment in full of all loans and
advances made and to be made to each Company from time to time by the
Agent and the Lenders pursuant hereto, as well as to secure the payment
in full of the other Obligations, each Company hereby pledges and grants
to the Agent, for the benefit of the Lenders, a continuing general lien
upon and security interest in all of such Company's:
(a) present and hereafter acquired Inventory;
(b) present and hereafter acquired Equipment;
(c) present and future Accounts;
(d) present and future Documents of Title;
(e) present and future General Intangibles;
(f) present and future Investment Property;
(g) present and future Other Collateral;
(h) Real Estate; and
(i) any such other property not included under clauses
(a) through (h) above that would otherwise be deemed to constitute
"Collateral" as defined in the Term Financiers Loan Documents or the
▇.▇. ▇▇▇▇▇ Loan Documents, as such agreements may be amended, modified
or replaced from time to time.
Notwithstanding anything contained herein to the contrary, the
Collateral shall not include, and neither Company shall be deemed to
have granted a lien or security interest hereunder in:
(i) any property or asset to the extent, and only for so
long as, such property is subject to a Permitted Encumbrance (in
favor of Persons other than the Term Financiers and ▇.▇. ▇▇▇▇▇)
which specifically restricts the granting of additional liens or
security interests on such property; provided that (A) such lien or
security interest constitutes a Permitted Encumbrance and (B) the
restriction on the granting of additional liens or security
interests extends only to the property subject to such a Permitted
Encumbrance and the proceeds thereof;
(ii) any contract that prohibits the granting of a
security interest in such contract or the rights thereunder without
the consent of the other party(ies) thereto, which consent has not
been obtained (except to the extent any such prohibition would be
rendered ineffective or unenforceable under applicable laws);
(iii) any "Sale-Leaseback Property" as defined in the
GECC Intercreditor Agreement; or
(iv) the specific assets identified on Schedule 6.1
------------
hereto (the "Excluded Assets"); provided, however, that the
Companies agree to cause the proceeds of the sale of the Excluded
Assets to be used as set forth in Section 7.16 below.
6.2 The security interests granted hereunder shall extend and
attach to:
(a) All Collateral which is presently in existence and which
is owned by any Company or in which any Company has any interest,
whether held by any Company or others for its account, and, if any
Collateral is Equipment, whether such Company's interest in such
Equipment is as owner or 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 dies, jigs, tools, benches, 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 Agent or any
Company from such Company's 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 any Company, or to the sale, promotion or shipment thereof.
6.3 Each Company agrees to safeguard, protect and hold all
Inventory for the account of the Agent, on behalf of the Lenders, and
make no disposition thereof except in the regular course of the business
of each Company; provided, however, that each Company may make bulk
sales of Inventory that is obsolete and non-marketable under ordinary
terms if such Company gives prompt written notice to Agent after any
such sale. Inventory may be sold and shipped by each Company to its
customers in the ordinary course of each Company's business, on open
account and on commercially reasonable terms, provided that all proceeds
of all sales (including cash, accounts receivable, checks, notes,
instruments for the payment of money and similar proceeds) are forthwith
transferred, endorsed, and turned over and delivered to the Agent by
deposit in the Depository Accounts. The Agent shall have the right to
withdraw this permission at any time upon the occurrence of an Event of
Default which results in acceleration of the Obligations due and payable
under this Agreement, in which event no further disposition shall be
made of the Inventory by any Company without the Agent's prior written
approval. Cash sales or sales of Inventory in which a lien upon, or
security interest in, Inventory is retained by each Company shall be
made by such Company only with the approval of the Agent, and the
proceeds of such sales or sales of Inventory for cash shall not be
commingled with any Company's other property, but shall be segregated,
held by such Company in trust for the Agent, on behalf of the Lenders as
the Lenders' exclusive property, and shall be delivered immediately by
each Company to the Agent by deposit to the Depository Accounts. Upon
the sale, exchange, or other disposition of Inventory, as herein
provided, the security interest in each Company's 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, accounts receivable, contract
rights, 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 Agent shall have
all of the rights of an unpaid seller, including stoppage in transit,
replevin, rescission and reclamation.
6.4 Each Company agrees at its own cost and expense to keep the
Equipment in as good 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 Company also agrees to
safeguard, protect and hold all Equipment for the account of the Agent,
on behalf of the Lenders, and make no disposition thereof (other than
dispositions expressly permitted hereunder) unless such Company first
obtains the prior written approval of the Agent (which approval shall
not be unreasonably withheld). Any sale, exchange or other disposition
of any Equipment (other than dispositions expressly permitted hereunder)
shall only be made by the Companies with the prior written approval of
the Agent, and the proceeds of any such sales shall not be commingled
with any Company's other property, but shall be segregated, held by each
Company in trust for the Agent, for the benefit of the Lenders, as the
Lenders' exclusive property, and shall be delivered immediately by each
Company to the Agent by deposit to the Depository Accounts. 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 receivable, contract rights, documents of title,
shipping documents, chattel paper and all other cash and non-cash
proceeds of such sales, exchanges or dispositions. As to any such sale,
exchange or other disposition, the Agent shall have all of the rights of
an unpaid seller, including stoppage in transit, replevin, rescission
and reclamation. Notwithstanding anything set forth herein to the
contrary, each Company may sell, exchange or otherwise dispose of (a)
obsolete Equipment or Equipment no longer needed in such Company's
operations, provided that the then book value of the Equipment so
disposed of does not exceed Five Hundred Thousand Dollars ($500,000) in
the aggregate in any fiscal year and (b) items of Equipment not listed
in or appraised pursuant to the appraisals described in Section 2.1(u)
--------------
above to Subsidiaries, provided (i) Representative shall notify Agent of
any such disposition in reasonable detail if the Equipment subject
thereto has a minimum book value of Two Hundred Fifty Thousand Dollars
($250,000.00) per item and (ii) that the aggregate book value of any
such Equipment so disposed to Subsidiaries shall not exceed Seven
Hundred Fifty Thousand Dollars ($750,000.00) in the aggregate in any
fiscal year. To the extent that any Equipment is sold, exchanged or
otherwise disposed of pursuant to the preceding sentence, the proceeds
of such sales or dispositions shall be delivered to the Agent by deposit
into the Depository Account in accordance with the foregoing provisions
of this Section 6.4, except that each Company may retain and use such
-----------
proceeds to purchase forthwith replacement Equipment which such Company
determines in its reasonable business judgment to have a collateral
value at least equal to the Equipment so disposed of or sold, and
provided further that the aforesaid right shall automatically cease upon
the occurrence of an Event of Default which is not waived.
6.5 The rights and security interests granted hereunder to the
Agent, for the benefit of the Lenders, are to continue in full force and
effect, notwithstanding the termination of this Financing Agreement or
the fact that the account maintained in the Companies' name on the books
of the Agent may from time to time be temporarily in a credit position,
until the final payment in full to the Agent and the Lenders of all
Obligations and the termination of this Financing Agreement. Any delay,
or omission by the Agent or the Lenders to exercise any right hereunder,
shall not be deemed a waiver thereof, or be deemed a waiver of any other
right, unless such waiver be in writing and signed by the Agent. 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.
6.6 To the extent that the Obligations 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, then the
Agent shall have the right in its sole discretion to determine which
rights, security, liens, security interests or remedies the 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 Agent's or the Lenders' rights
hereunder.
6.7 Any reserves or balances to the credit of any Company and any
other property or assets of any Company in the possession of the Agent
may be held by the Agent, for the benefit of the Lenders, as security
for any Obligations and applied in whole or partial satisfaction of such
Obligations when due upon written notice to the Companies. The liens
and security interests granted herein and any other lien or security
interest which the Agent may have in any other assets of any Company,
shall secure payment and performance of all now existing and future
Obligations. The Agent may in its discretion charge any or all of the
Obligations to the Companies' Revolving Loan Account when due and
payable.
6.8 This Financing Agreement and the obligation of each Company to
perform all of its covenants and obligations hereunder are further
secured by mortgage(s), deed(s) of trust or assignment(s) covering the
Real Estate including, but not limited to, the Real Estate Collateral
Documents.
6.9 From time to time, each Company shall deliver to the Agent,
for the benefit of the Lenders, such mortgage(s), deed(s) of trust or
assignment(s) covering the Real Estate or real estate acquired after the
date hereof as the Agent shall require to obtain a valid first lien
thereon, subject only to Permitted Encumbrances.
6.10 From time to time, each Company, each Guarantor and each
Pledgor shall deliver to the Agent, or shall cause Parent to deliver to
the Agent, such pledge or security agreements with respect to
(a) trademarks, patents, licenses and capital stock in each Company and
(b) capital stock in any and all direct Subsidiaries of each Company,
each Guarantor and each Pledgor, as applicable, as the Agent shall
require to obtain valid first liens thereon (subject to Permitted
Encumbrances); provided, however, that in no event shall a pledge of
more than sixty-five percent (65%) of the equity interests of any
foreign entity directly owned be required so long as applicable law
would treat any such pledge in excess of such amount as a "deemed
dividend" to the parent company of such foreign entity.
SECTION 7. Representations, Warranties and Covenants
-----------------------------------------
7.1 Each Company hereby warrants and represents and/or covenants
that: (a) the fair value of each Company's assets exceeds the book
value of each Company's liabilities; (b) each Company is generally able
to pay its debts as they become due and payable; (c) no Company has
unreasonably small capital to carry on its business as it is currently
conducted absent extraordinary and unforeseen circumstances; (d) the
consolidated audited balance sheet and related statements of operations
and cash flow and changes in stockholders' equity for the Parent as of
December 31, 1998 and for the fiscal year then ended, and the
consolidated unaudited balance sheet and related statements of
operations and cash flow for the Parent as of March 31, 1999 and for the
three (3) months then ended, have been prepared in accordance with GAAP
and present accurately and fairly in all material respects the Parent's
financial position as at the dates thereof and the Parent's results of
operation for the periods then ended; (e) each Company is duly organized
and validly existing under the laws of the state of its incorporation,
and is qualified to do business in each State where the failure to so
qualify would have a Material Adverse Effect; (f) Schedule 7.1 hereto
------------
correctly and completely sets forth each Company's chief executive
office, all of the Collateral locations and all tradenames used by each
Company; (g) the execution and delivery of this Financing Agreement by
each Company and the consummation of the transactions contemplated
hereby, do not violate any term, provision or covenant contained in the
Articles or Certificate of Incorporation or Bylaws of any Company, or
any term, provision, covenant or representation contained in any loan
agreement, lease, indenture, mortgage, deed of trust, note, security
agreement or pledge agreement to which any Company is a signatory or by
which any Company or any Company's assets are bound; (h) except for the
Permitted Encumbrances, the security interests granted herein and in the
other Loan Documents constitute and shall at all times constitute first
priority and exclusive liens on the Collateral; (i) except for the
Permitted Encumbrances, each Company is or will be at the time
additional Collateral is acquired by it, the absolute owner of the
Collateral with full right to pledge, sell, transfer and create a
security interest therein, free and clear of any and all claims or liens
in favor of others; (j) the Indebtedness listed on Schedule 1.1(c)
---------------
hereto constitutes all funded indebtedness of each Company existing as
of the date hereof; (k) each Company will at its expense forever warrant
and, at the Agent's request, defend the Collateral from any and all
claims and demands of any other person other than the Permitted
Encumbrances; (l) no Company will grant, create or permit to exist, any
lien upon or security interest in the Collateral, or any proceeds
thereof, in favor of any other person other than the holders of the
Permitted Encumbrances; and (m) each Company will provide the Agent with
prior written notice of any change in the location of any Collateral.
7.2 Each Company agrees to maintain books and records pertaining
to the Collateral in such detail, form and scope as the Agent shall
reasonably require. Each Company agrees that the Agent and/or its
designated agents, accompanied by any Lender and/or such Lender's
designated agents (at such Lender's expense), may enter upon each
Company's offices, or other premises at any time during normal business
hours and upon reasonable notice of at least one (1) Business Day prior
to an Event of Default, and from time to time, in order to (a) examine
and inspect the books and records of each Company, and make copies
thereof and take extracts therefrom, and (b) verify, inspect, appraise
and perform physical counts and other valuations of the Collateral and
any and all records pertaining thereto; provided, however, that so long
as no Event of Default exists and is continuing, the number of such
examinations, inspections, appraisals, physical counts and other
valuations shall be limited to four (4) per annum. All reasonable
costs, fees and expenses incurred by the Agent in connection with such
examinations, inspections, appraisals, physical counts and other
valuations shall constitute Out-of-Pocket Expenses for purposes of this
Financing Agreement.
7.3 Each Company agrees to execute and deliver to the Agent, from
time to time, solely for the Agent's convenience in maintaining a record
of the Collateral, such written statements, schedules and other
information and documentation as the Agent may reasonably require,
designating, identifying or describing the Collateral. Without limiting
the foregoing, each Company shall deliver to the Agent, in such detail
as the Agent shall reasonably require, (a) at least once each week (but
more frequently upon the Agent's reasonable request) weekly sales
reports and collection journals indicating cash received by the
Companies from sources other than account debtors with respect to the
Trade Accounts Receivable, (b) on or before the twentieth (20th) day
following the last day of each month, a borrowing base certificate (as
of the last day of the immediately preceding month) in a form
satisfactory to the Companies and the Agent, certified by the treasurer
or chief financial officer of each Company (or any other authorized
officer satisfactory to the Agent), and (c) on or before the twentieth
(20th) day of each fiscal month, an aging of all Accounts existing as of
the last day of the preceding fiscal month and a summary of Inventory as
of the last day of the preceding fiscal month, certified by the
treasurer or the chief financial officer of each Company (or any other
authorized officer satisfactory to the Agent). Any Company's failure,
however, to promptly give the Agent such statements or schedules shall
not affect, diminish, modify or otherwise limit the security interests
of the Agent, for the benefit of the Lenders, in the Collateral.
7.4 Each Company agrees to comply with the requirements of all
state and federal laws in order to grant to the Agent, for the benefit
of the Lenders, valid and perfected first security interests in the
Collateral, subject only to the Permitted Encumbrances. The Agent is
hereby authorized by each Company to file any financing statements
covering the Collateral whether or not such Company's signature appears
thereon. Each Company agrees to do whatever the Agent reasonably may
request from time to time, by way of: (a) filing notices of liens,
financing statements, amendments, renewals and continuations thereof;
(b) cooperating with the Agent's designated agents and employees;
(c) keeping Collateral records; (d) transferring proceeds of Collateral
to the Agent's possession in accordance with the terms hereof; and
(e) performing such further acts as the Agent reasonably may require in
order to effect the purposes of this Financing Agreement.
7.5 (a) Each Company agrees to maintain insurance on the 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 Agent
(the "Required Insurance"). All policies covering the Real Estate,
Equipment and Inventory are, subject to the rights of any holders of
Permitted Encumbrances holding claims senior to the Agent, to be made
payable to the Agent, for the benefit 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 Agent
reasonably may require to fully protect the Agent's and the Lenders'
interests in the Real Estate, Inventory and Equipment and to any
payments to be made under such policies. All summaries of such policies
are to be delivered to the Agent. All such insurance policies shall be
prepaid, with a loss payable endorsement in favor of the Agent, for the
benefit of the Lenders, and shall provide for not less than thirty (30)
days prior written notice to the Agent of the exercise of any right of
cancellation. Upon the occurrence of an Event of Default which is not
waived, the Agent shall, subject to the rights of any holders of
Permitted Encumbrances holding claims senior to the Agent, have the sole
right, in the name of the Agent or any Company, 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) Unless any Company provides the Agent with evidence of
the Required Insurance in the manner set forth in paragraph (a) above,
the Agent may, upon prior notice to the Companies, purchase insurance at
each Company's expense to protect the interests of the Agent and the
Lenders in the Collateral. The insurance purchased by the Agent may,
but need not, protect such Company's interests in the Collateral, and
therefore such insurance may not pay any claim which any Company makes
or any claim which is made against any Company in connection with the
Collateral. The Companies may later request that the Agent cancel any
insurance purchased by the Agent, but only after providing the Agent
with satisfactory evidence that the Companies have the Required
Insurance. If the Agent, on behalf of the Lenders, purchases insurance
covering all or any portion of the Collateral, the Companies shall be
responsible for the costs of such insurance, including interest (at the
applicable rate set forth hereunder) and other charges accruing on the
purchase price therefor, until the effective date of the cancellation or
the expiration of the insurance, and the Agent may charge all of such
costs, interest and other charges to the Revolving Loan Account. The
costs of the premiums of any insurance purchased by the Agent may exceed
the costs of insurance which the Companies may be able to purchase on
their own. In the event that the Agent purchases insurance, the Agent
will notify the Representative of such purchase within thirty (30) days
after the date of such purchase. If, within thirty (30) days of the
date of such notice, the Companies provide the Agent with proof that the
Companies had the Required Insurance as of the date on which the Agent
purchased insurance and the Companies have continued at all times
thereafter to have the Required Insurance, then the Agent agrees to
cancel the insurance purchased by the Agent and credit the Revolving
Loan Account by the amount of all costs, interest and other charges
associated with such insurance previously charged to the Revolving Loan
Account.
(c)
(i) In the event of any loss or damage by condemnation,
fire or other casualty, insurance proceeds relating to Inventory
shall first reduce the Revolving Loan and then the Term Loan.
(ii) In the event any part of the Company's Real Estate
or Equipment is condemned or damaged by fire or other casualty and
the insurance or condemnation proceeds for such condemnation,
damage or other casualty (the "Proceeds") is less than or equal to
One Million Dollars ($1,000,000.00), the Agent shall promptly apply
such Proceeds to reduce the Revolving Loan.
(iii) As long as an Event of Default has not occurred
(which is not waived), the Companies have sufficient business
interruption insurance to replace the lost profits of any Company's
facilities, and the Proceeds are in excess of One Million Dollars
($1,000,000.00), the Companies may elect (by delivering written
notice to the Agent) to replace, repair or restore such Real Estate
or Equipment to substantially the equivalent condition prior to
such condemnation, fire or other casualty as set forth herein. If
the Companies do not, or cannot, elect to use the Proceeds as set
forth above, the Agent may, subject to the rights of any holders of
Permitted Encumbrances holding claims senior to the Agent, apply
the Proceeds to the payment of the Obligations in such manner and
in such order as the Agent reasonably may elect.
(iv) If the Companies elect to use the Proceeds for the
repair, replacement or restoration of any Real Estate or Equipment,
and there is then no Event of Default, (x) proceeds of insurance on
Equipment or Real Estate in excess of One Million Dollars
($1,000,000.00) will be applied to the reduction of the Revolving
Loans of the Companies and (y) the Agent may set up a reserve
against Availability for an amount equal to the proceeds referred
to in clause (x) hereof. The reserve will be reduced dollar-for-
dollar upon receipt of non-cancelable executed purchase orders,
delivery receipts or contracts for the replacement, repair or
restoration of Equipment or the Real Estate and disbursements in
connection therewith. Prior to the commencement of any
restoration, repair or replacement of Real Estate, the Companies
shall provide the Agent with a restoration plan and a total budget
certified by an independent third party experienced in construction
costing. If there are insufficient Proceeds to cover the cost of
restoration as so determined, the Companies shall be responsible
for the amount of any such deficiency, and shall fund such
deficiency 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 the
Companies (herein collectively the "Completion"). Upon Completion,
any remaining reserve as established hereunder will be
automatically released.
(v) The Companies agree to pay any reasonable costs,
fees or expenses which the Agent may reasonably incur in connection
with this Section 7.5.
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7.6 The Companies agree to pay, prior to the imposition of any
lien or penalty (other than Permitted Encumbrances), all taxes,
assessments, claims and other charges (herein "taxes") lawfully levied
or assessed upon any Company or the Collateral, including, without
limitation, all sales taxes collected by any Company on behalf of any
Company's customers in connection with sales of Inventory. If such
taxes remain unpaid after such date (unless such taxes are being
diligently contested in good faith by such Company by appropriate
proceedings), or if any lien shall be claimed thereunder (a) for taxes
due the United States of America or (b) which in the Agent's opinion
secures an obligation having priority over the rights granted to the
Agent and the Lenders herein, then the Agent may, on behalf of the
Companies and/or the Lenders, pay such taxes, and the amount thereof
shall be an Obligation secured hereby and due to the Agent on demand.
7.7
(a) Each Company agrees to comply with all acts, rules,
regulations and orders of any legislative, administrative or judicial
body or official, which the failure to comply with would have a Material
Adverse Effect on such Company, provided that any Company may contest
any acts, rules, regulations, orders and directions of such bodies or
officials in any reasonable manner which will not, in the Agent's
reasonable opinion, materially and adversely effect the Agent's or the
Lenders' rights or priorities in the Collateral.
(b) Without limiting the generality of paragraph (a) above,
each Company agrees to comply with all environmental statutes, acts,
rules, regulations or orders, as presently existing or as adopted or
amended in the future, applicable to the ownership and/or use of its
real property and operation of its business, if the failure to so comply
would have a Material Adverse Effect on such Company. Each Company
hereby indemnifies the Agent and the Lenders, and agrees to defend and
hold the Agent and the Lenders harmless, from and against any and all
loss, damage, claim, liability, injury or expense which the Agent or the
Lenders may sustain or incur in connection with any claim or expense
asserted against the Agent or the Lenders as a result of any
environmental pollution, hazardous material or environmental clean-up of
any Company's owned or leased real property; or any claim or expense
which results from any Company's operations (including, but not limited
to, the Company's off-site disposal practices) except as a result of the
gross negligence or willful misconduct of the Agent or any Lender, and
each Company further agrees that this indemnification shall survive
termination of this Financing Agreement as well as the payment of all
Obligations or amounts payable hereunder. No Company shall be deemed to
have breached any provision of this Section 7.7 if (i) the failure to
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comply with the requirements of this Section 7.7 resulted from good
-----------
faith error or innocent omission, (ii) the Companies promptly commence
and diligently pursue a cure of such breach and (iii) such failure is
cured within fifteen (15) Business Days following any Company's receipt
of notice of such failure.
(c) As of the date hereof, each Company represents and
warrants to the Agent and the Lenders that except as disclosed on
Schedule 7.7 attached hereto, (i) none of the operations of any Company
------------
are, to their knowledge after diligent inquiry, the subject of any
federal, state or local investigation to determine whether any remedial
action is needed to address the presence or disposal of any
environmental pollution, hazardous material or environmental clean-up of
the Real Estate or any Company's leased real property, (ii) no Company
has any known contingent liability with respect to any release of any
environmental pollution or hazardous material, (iii) each Company
presently is in compliance with all environmental statutes, acts, rules,
regulations or orders applicable to each Company's owned or leased real
property or the operation of each Company's business, except where the
failure to be in such compliance would not have a Material Adverse
Effect, (iv) no enforcement proceeding, complaint, summons, citation,
notice, order, claim, litigation, investigation, letter or other
communication from a federal, state or local authority has been filed
against or delivered to any Company, regarding or involving any release
of any environmental pollution or hazardous material on any real
property now or previously owned or leased by any Company, and (v) each
Company has obtained and maintains all permits, approvals,
authorizations and licenses, if any, required by applicable
environmental statutes, acts, rules, regulations and orders, except
where the failure to have such permits, approvals, authorizations or
licenses would not have a Material Adverse Effect on such Company.
7.8 Until termination of this Financing Agreement and payment and
satisfaction of all Obligations due hereunder, each Company agrees that,
unless Agent shall have otherwise consented in writing, the Companies
will furnish to Agent: (a) within ninety (90) days after the end of
each fiscal year of the Parent, a Consolidated Balance Sheet and a
Consolidating Balance Sheet as at the close of such year, and statements
of operations, cash flow and reconciliation of stockholders' equity for
such year, in the case of the Consolidated Balance Sheet and related
statements audited by such independent public accountants selected by
the Parent and satisfactory to the Agent, together with the unqualified
opinion of the accountants preparing such financial statements (except
that for the fiscal year 2000 audited financial statements, the opinion
of such accountants may be qualified, if necessary, for the sole purpose
of reflecting that, as of the date of such opinion, the Companies do not
have a financing commitment in place for the period commencing on the
Termination Date); (b) within forty-five (45) days of the end of each
fiscal quarter, a Consolidated Balance Sheet and a Consolidating Balance
Sheet as at the end of such fiscal quarter, and a consolidated statement
of operations and cash flow for such fiscal quarter and for the period
commencing on the first day of the current fiscal quarter through the
end of such fiscal quarter; (c) within thirty-five (35) days after the
end of each fiscal month, a Consolidated Balance Sheet and a
Consolidating Balance Sheet as at the end of such fiscal month, and a
consolidated statement of operations and cash flow for such fiscal month
and for the period commencing on the first day of the current fiscal
year through the end of such fiscal month; (d) no later than thirty (30)
days after the beginning of each fiscal year, monthly projections of the
Consolidated Balance Sheet, Consolidating Balance Sheet, the
consolidated and consolidating statements of operations and cash flow of
Parent, as well as projected Availability for such fiscal year; and
(e) from time to time, such further information regarding the business
affairs and financial condition of each Company as the Agent may
reasonably request. Each financial statement which the Companies are
required to submit hereunder must be accompanied by an officer's
certificate, signed by the Treasurer or Chief Financial Officer of
Representative, pursuant to which such officer must certify that:
(x) the financial statement(s) fairly and accurately represent(s)
Parent's and the Companies' financial condition at the end of the
particular accounting period, as well as Parent's and the Companies'
operating results during such accounting period, subject to year-end
audit adjustments; (y) during the particular accounting period (i) there
has occurred no Default or Event of Default under this Financing
Agreement, or, 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
certificate, and (ii) no Company has received any notice of cancellation
with respect to its property insurance policies; and (z) the exhibits
attached to such financial statement(s) constitute detailed calculations
showing compliance with all financial covenants contained in this
Financing Agreement and, in the case of the exhibits to the financial
statements referred to in clauses (a) and (b) above, setting forth the
computation of the Leverage Ratio level for purposes of determination of
the Applicable Margin (it being understood that the Applicable Margin
determination will be made based upon the computation of the Leverage
Ratio level on a quarterly basis as of each Test Date after the Start
Date).
7.9 Until termination of this Financing Agreement and payment and
satisfaction of all Obligations due hereunder, each Company agrees that,
without the prior written consent of the Required Lenders, except as
otherwise herein provided, no Company will, and will not permit any
Guarantor or Subsidiary to:
(a) Except for transfers of assets permitted under Section
7.9(c) below and Permitted Encumbrances, 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 its assets or goods, whether real, personal or mixed,
whether now owned or hereafter acquired;
(b) Incur or create any Indebtedness other than the Permitted
Indebtedness;
(c) Sell, lease, assign, transfer or otherwise dispose of
(i) Collateral, except as otherwise specifically permitted by this
Financing Agreement, or (ii) either all or any substantial part of its
assets, if any, which do not constitute Collateral; provided, however,
that (A) transfers of Inventory solely among the Companies and/or the
Guarantors (other than Parent) shall be permitted hereunder so long as
any such transfer would be classified as an Intercompany Receivable,
(B) sales or dispositions of Excluded Assets shall be permitted
hereunder, and (C) sales or transfers of Collateral to either Company by
the other Company or by any Subsidiary to any Company shall be permitted
hereunder;
(d) (i) Merge or consolidate with any other entity; provided,
however, that (x) any Company may merge or consolidate with any
Guarantor (other than Parent) and (y) any non-Guarantor Subsidiary may
merge or consolidate with any other non-Guarantor Subsidiary;
(ii) change its corporate name or principal place of business without at
least thirty (30) days prior written notice to the Agent, (iii) change
the form of its organization from for-profit corporation or (iv) enter
into or engage in any operation or activity materially different from
that presently being conducted by either Company.
(e) Assume, guarantee, endorse, or otherwise become liable
upon the obligations of any person, firm, entity or corporation, except
(i) by the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business,
(ii) existing guaranties listed on Schedule 7.9(e) hereof,
---------------
(iii) guaranties in favor of Agent under the Loan Documents,
(iv) guaranties entered into in the ordinary course of business by any
Company or any Guarantor of the obligations of any Company or any
Guarantor, (v) guaranties entered into in the ordinary course of
business by any Subsidiary that is not a Guarantor of the obligations of
any other Subsidiary that is not a Guarantor, (vi) guaranties in support
of the Subordinated Debt, and (vii) guaranties entered into in
connection with the refinancing of any Indebtedness permitted to be
guaranteed by this Section, provided that the guarantor thereof was
previously guaranteeing the Indebtedness being refinanced and the
principal amount of such Indebtedness being refinanced shall not be
increased from such principal amount outstanding on the day prior to the
date of such refinancing; provided, however, that the principal amount
of such Indebtedness being guaranteed may be increased by up to Two
Million Five Hundred Thousand ($2,500,000.00) if, and only if, such
Indebtedness is Permitted Indebtedness;
(f) Declare or pay any dividend or distribution of any kind
on, or purchase, acquire, redeem or retire, any of Parent's or any
Company's equity interests (of any class or type whatsoever), whether
now or hereafter issued and outstanding, other than Permitted
Distributions;
(g) Create any new Subsidiary, or make any advance or loan
to, or any investment in, or acquire all or substantially all of the
assets or capital stock of, or other equity interests in, any firm,
entity, person or corporation, other than (i) investments in the
Subsidiaries, (ii) Permitted Investments, (iii) loans constituting
Permitted Indebtedness hereunder, and (iv) advances to officers and
directors in the ordinary course of business for travel expenses,
employment relocation programs and similar business expenses subject to
a limit of Seven Hundred Fifty Thousand Dollars ($750,000) in the
aggregate at any one time outstanding; provided, however that such limit
shall not apply with respect to legally required and permissible
indemnification of officers and directors;
(h) Amend or modify any provision of the Lease Documents to
the extent such amendments or modifications would (i) accelerate the
term or maturity date of any obligations thereunder, (ii) increase the
amount of rental payments, royalty payments or other payments required
thereunder, (iii) accelerate any obligations thereunder, (iv) increase
the amount of any interest or royalty rate attributable thereto, or (v)
otherwise impose any covenant, term, restriction, condition or
obligation determined by Agent, in its reasonable discretion, to be
materially more restrictive or burdensome to any Company or Parent than
existed prior to such amendment or modification. It is understood and
agreed that to the extent an amendment or modification of the Lease
Documents is permissible hereunder, Agent shall be promptly provided
with a copy thereof; and
(i) Amend or modify any provisions of the Term Financiers
Loan Documents or the ▇.▇. ▇▇▇▇▇ Loan Documents.
7.10 Until termination of this Financing Agreement and payment and
satisfaction in full of all Obligations hereunder, each Company shall:
(a) cause Parent to maintain at all times during the periods
below a Tangible Net Worth of not less than the amount set forth below
for the applicable period:
Quarterly Period Ending Tangible Net Worth Quarterly Period Ending Tangible Net Worth
---------------------- ------------------ ----------------------- ------------------
June 30, 1999 $99,000,000 June 30, 2000 $88,000,000
September 30, 1999 $95,000,000 September 30, 2000 $86,000,000
December 31, 1999 $91,000,000 December 31, 2000 $86,000,000
March 31, 2000 $88,000,000 March 31, 2001 $82,000,000
June 30, 2001 and
each quarter
thereafter $83,000,000
(b) maintain at the end of each fiscal quarter during the
periods set forth below a Fixed Charge Coverage Ratio of not less than
the ratio set forth below for the applicable period (measured as
follows: (i) for the quarter ending June 30, 1999, measured on a
trailing basis taking into account the prior quarter; (ii) for the
quarter ending September 30, 1999, measured on a trailing basis taking
into account the prior two (2) quarters; (iii) for the quarter ending
December 31, 1999, measured on a trailing basis taking into account the
prior three (3) quarters; and (iv) for the quarter ending March 31, 2000
and each fiscal quarter thereafter, measured on a rolling four (4)
quarter basis taking into account such quarter and the prior three (3)
fiscal quarters):
Fiscal Quarter Ending Ratio Fiscal Quarter Ending Ratio
--------------------- -------------- --------------------- ---------------
June 30, 1999 0.61 to 1.0 June 30, 2000 0.75 to 1.0
September 30, 1999 0.80 to 1.0 September 30, 2000 0.84 to 1.0
December 31, 1999 0.80 to 1.0 December 31, 2000 0.89 to 1.0
March 31, 2000 0.68 to 1.0 March 31, 2001 0.91 to 1.0
June 30, 2001 and
each fiscal quarter
thereafter 0.93 to 1.0
(c) maintain at the end of each quarter during the periods
set forth below a Leverage Ratio of no more than the ratio set forth
below for the applicable period:
Quarterly Period Ending Ratio Quarterly Period Ending Ratio
----------------------- ----------- ----------------------- --------------
June 30, 1999 45 to 1.0 June 30, 2000 35 to 1.0
September 30, 1999 40 to 1.0 September 30, 2000 35 to 1.0
December 31, 1999 35 to 1.0 December 31, 2000 30 to 1.0
March 31, 2000 42 to 1.0 March 31, 2001 37 to 1.0
June 30, 2001 and
each quarter
thereafter 30 to 1.0
7.11 Without the prior written consent of the Required Lenders, the
Parent, on a consolidated basis with its Subsidiaries, will not:
(a) enter into any Operating Lease if after giving effect thereto the
aggregate obligations with respect to Operating Leases of the Companies
during any fiscal year would exceed Seven Million Dollars ($7,000,000),
or (b) make any Capital Expenditures (whether subject to a security
interest or otherwise) during any fiscal year in the aggregate amount in
excess of:
(i) $28,000,000.00 for the fiscal year ending
December 31, 1999;
(ii) $14,000,000.00 for the fiscal year ending
December 31, 2000;
(iii) $7,500,000.00 for the six (6) month period
ending June 30, 2001;
provided that if the maximum amount set forth above for any year exceeds
--------
the aggregate amount of Capital Leases and Capital Expenditures made or
incurred (or committed to be made or incurred) during such period, then
the maximum amount set forth above for the following period(s) shall be
increased by up to Three Million Dollars ($3,000,000) of the amount of
such excess.
7.12 The Company agrees to advise Agent in writing of (a) all
expenditures (actual or anticipated) in excess of Five Hundred Thousand
Dollars ($500,000.00) for (i) environmental clean-up, (ii) environmental
compliance or (iii) environmental testing and the impact of said
expenses on any Company's Working Capital, and (b) any notices any
Company receives from any local, state or federal authority advising any
Company of any environmental liability (real or potential) stemming from
any Company's operations, its premises, its waste disposal practices, or
waste disposal sites used by any Company and to provide Agent with
copies of all such notices if so required.
7.13 Without the prior written consent of the Required Lenders,
each Company agrees that it will not enter into any transaction,
including, without limitation, any purchase, sale, lease, loan or
exchange of property, with any person or entity affiliated with either
Parent, any Company or any Subsidiary, unless such transaction otherwise
complies with the provisions of this Financing Agreement and is on
arms-length terms, except that the foregoing restrictions shall not
apply to (a) Intercompany Receivables, (b) fees payable to members of
the Board of Directors of Parent in the ordinary course of business
consistent with past practice, except the amount of such fees may be
increased by ten percent (10%) per annum, and (c) advances of expenses
otherwise permitted by this Agreement.
7.14 Each Company, each Guarantor and each Subsidiary shall take
all action reasonably necessary to assure that its computer-based
systems are able to effectively process date-sensitive data functions.
Each Company represents and warrants to the Agent that the "Year 2000"
problem (that is, the inability of certain computer applications to
recognize and properly perform date-sensitive functions involving dates
subsequent to December 31, 1999) will not have a Material Adverse Effect
on any such entity. Each Company, each Guarantor and each Subsidiary
reasonably anticipates that all computer applications which are material
to the operation of its business will, on a timely basis, properly
perform date-sensitive functions on and after January 1, 2000. Upon the
Agent's request from time to time, each Company shall provide the Agent
with assurances, in form and substance reasonably satisfactory to the
Agent, that each Company's, each Guarantor's and each Subsidiary's
computer systems and applications are, or will be, Year 2000 compliant
on a timely basis.
7.15 Each Company hereby represents and warrants to Agent that
Viskase Holding has no creditors with respect to Indebtedness (other
than the Lenders under the Guaranty) and no trade credit of any kind as
of the date hereof. Each Company hereby covenants to Agent that it
shall cause Viskase Holding not to incur any additional Indebtedness
and/or trade credit.
7.16 The Companies agree to utilize all net proceeds received by
either of them, any Guarantor or any Subsidiary of the sale, transfer or
other disposition of the Excluded Assets to pay the outstanding
principal balance plus accrued interest on the Revolving Loans then
outstanding.
7.17 Each Company hereby represents and warrants to Agent that its
execution and delivery of a guaranty and grant of a security interest in
its assets to support Parent's obligations under the Senior Secured
Notes was for fair consideration and that a substantial portion of the
proceeds of the Senior Secured Notes were used to pay direct obligations
of the Companies as well as to provide funds to the Companies for
working capital and capital expenditures.
7.18 Each Company hereby represents and warrants that the Lease
Documents were entered into on December 18, 1990 and have not been
amended or modified since such date except for (a) certain Lease
Supplements dated as of December 28, 1990 and July 24, 1991,
respectively, and (b) a certain Amendment No. 1 to Participation
Agreement dated July 24, 1991 and a Waiver to Participation Agreement
dated on or about the date hereof. Each Company hereby further
represents and warrants that true and correct copies of the Lease
Documents, as so amended, have been provided to Agent.
7.19 Each Company hereby represents and warrants that each of
Viskase Argentina and Viskase De Mexico S.A. de C.V. have ceased all
business operations. Each Company covenants and agrees that it will not
conduct any business within such entities until such time as sixty-five
percent (65%) of the capital stock of each such entity has been pledged
to Agent, for the benefit of the Lenders, pursuant to pledge
arrangements in form and substance satisfactory to Agent.
7.20 Each Company hereby represents and warrants that it has
delivered to the Agent pursuant to Section 2.1(b) hereof true, correct
and complete copies of the Term Financiers Loan Documents and the
▇.▇. ▇▇▇▇▇ Loan Documents.
SECTION 8. Interest, Fees and Expenses
---------------------------
8.1 Interest on the outstanding balances of the Revolving Base
Rate Loans shall be payable monthly on the first Business Day of each
month and shall accrue at a rate per annum equal to the Alternate Base
Rate plus the Applicable Margin on the average of the net balances owing
by the Companies to the Agent and the Lenders in the Companies'
Revolving Loan Account at the close of each day during the immediately
preceding month. With respect to Revolving LIBOR Loans, interest shall
be payable monthly on the first Business Day of each month and shall
accrue at a rate per annum equal to the applicable LIBOR plus the
Applicable Margin on the average balances of all LIBOR Loans outstanding
during the immediately preceding month. In the event of any change in
the Alternate Base Rate, the rate set forth in the first sentence of
this Section 8.1 shall change, as of the first of the month following
-----------
any such change, so as to remain by a percentage equal to the Applicable
Margin above the Alternate Base Rate then in effect. All interest rates
shall be calculated based on a 360-day year. The Agent, on behalf of
the Lenders, shall be entitled to charge the Companies' Revolving Loan
Account for all interest provided for herein when due until all
Obligations have been paid in full.
8.2 Interest on any portion of the principal amount of the Term
Loan for which the Companies have not elected to use LIBOR as the basis
for the interest rate (i.e., a Term Base Rate Loan) shall be payable
---
monthly on the first Business Day of each month and shall accrue at a
rate per annum equal to the sum of the Alternate Base Rate plus the
----
Applicable Margin. Interest on any portion of the principal amount of
the Term Loan for which the Companies have elected to use LIBOR as the
basis for the interest rate (i.e., a Term LIBOR Loan) shall be payable
---
monthly on the first Business Day of each month and shall accrue at a
rate per annum equal to the sum of the applicable LIBOR plus the
----
Applicable Margin. In the event of any change in the Alternate Base
Rate, the rate set forth in the first sentence of this Section 8.2 shall
-----------
change, as of the first of the month following any such change, so as to
remain by a percentage equal to the Applicable Margin above the
Alternate Base Rate then in effect. All interest rates shall be
calculated based on a 360-day year. The Agent, on behalf of the
Lenders, shall be entitled to charge the Companies' Revolving Loan
Account for all interest provided for herein when due until all
Obligations have been paid in full.
8.3 The Companies may elect to use LIBOR as to any outstanding
Revolving Loans and any portion of the principal amount of the Term Loan
provided that there then exists no Default or Event of Default and the
Representative has so advised the Agent of its election to use LIBOR and
the LIBOR Period selected no later than three (3) Business Days
preceding the first day of a LIBOR Period. The election and LIBOR shall
be effective, provided there then exists no Default or Event of Default,
on the fourth Business Day following said notice. The LIBOR elections
must be for One Million Dollars ($1,000,000) or whole multiples thereof
and there shall be no more than seven (7) LIBOR Loans outstanding at one
time. If no such election is timely made or can be made, or if the
LIBOR rate can not be determined, then the Agent shall use the Alternate
Base Rate plus the Applicable Margin for Revolving Base Rate Loans or
Term Base Rate Loans, as applicable, to compute interest. Upon demand
by the Lenders, each Company shall pay to the Agent, for the benefit of
the Lenders, such amount or amounts as shall compensate the Lenders for
any loss, costs or expenses incurred by the Lenders (as reasonably
determined by the Lenders) as a result of (a) any payment or prepayment
on a date other than the last day of a LIBOR Period for such LIBOR Loan,
or (b) any failure of any Company to borrow a LIBOR Loan on the date for
such borrowing specified in the relevant notice; such compensation to
include, without limitation, an amount equal to any loss or expense
suffered by each Lender during the period from the date of receipt of
such payment or prepayment or the date of such failure to borrow to the
last day of such LIBOR Period if the rate of interest obtained by such
Lender upon the reemployment of an amount of funds equal to the amount
of such payment, prepayment or failure to borrow is less than the rate
of interest applicable to such LIBOR Loan for such LIBOR Period. The
determination by the Lenders of the amount of any such loss or expense,
when set forth in a written notice to the Representative from the Agent,
containing the Lenders' calculations thereof in reasonable detail, shall
be conclusive on the Companies, in the absence of manifest error.
Calculation of all amounts payable to the Lenders under this paragraph
with regard to LIBOR Loans shall be made as though each Lender had
actually funded the LIBOR Loans through the purchase of deposits in the
relevant market and currency, as the case may be, bearing interest at
the rate applicable to such LIBOR Loans in an amount equal to the amount
of the LIBOR Loans and having a maturity comparable to the relevant
interest period, provided that the Lenders may fund each of the LIBOR
Loans in any manner the Lenders see fit and the foregoing assumption
shall be used only for calculation of amounts payable under this
Section 8.3. In addition, notwithstanding anything to the contrary
-----------
contained herein, the Agent shall apply all proceeds of Collateral,
including the Accounts, and all other amounts received by it from or on
behalf of the Companies initially to the loans accruing interest at the
Alternate Base Rate and then to LIBOR Loans, provided that upon the
occurrence and during the continuance of an Event of Default, or in the
event the aggregate amount of outstanding LIBOR Loans exceeds
Availability or the applicable maximum levels set forth therefor, the
Agent may apply all such amounts received by it to the payment of
Obligations in such manner and in such order as the Agent may elect in
its reasonable business judgment. In the event that any such amounts
are applied to Revolving Loans which are LIBOR Loans, such application
shall be treated as a prepayment of such loans and the Lenders shall be
entitled to indemnification hereunder.
8.4
(a) Notwithstanding any other provision of this Financing
Agreement to the contrary, if any law, regulation, treaty or directive,
or any change therein or in the interpretation or application thereof,
shall make it unlawful for the Agent or any Lender to make or maintain
LIBOR Loans as contemplated herein, the then outstanding LIBOR Loans so
affected, if any, shall be converted automatically to loans accruing
interest at the Alternate Base Rate, plus the Applicable Margin for
Revolving Base Rate Loans or Term Base Rate Loans, as applicable, at the
end of the applicable LIBOR Period or within such earlier period as
required by law. Each Company hereby agrees to pay the Agent, for the
benefit of the Lenders, on demand, any additional amounts necessary to
compensate the Agent or any Lender for any costs incurred by the Agent
or any Lender in making any conversion in accordance with Section 8.3.
-----------
(b) Notwithstanding any other provision of this Financing
Agreement to the contrary, in the event that, by reason of any
Regulatory Change (for purposes hereof "Regulatory Change" shall mean,
with respect to the Agent or any Lender, any change after the date of
this Agreement in United States federal, state or foreign law or
regulations or the adoption or making after such date of any
interpretation, directive or request applying to a class of banks
including the Agent or any Lender of or under any United States federal,
state or foreign law or regulations (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful)),
the Agent or any Lender either (i) incurs any material additional costs
based on or measured by the excess above a specified level of the amount
of a category of deposits or other liabilities of such bank which
includes deposits by reference to which the interest rate on LIBOR Loans
is determined as provided in this Financing Agreement or a category of
extensions of credit or other assets of the Agent or any Lender which
includes LIBOR Loans or (ii) becomes subject to any material
restrictions on the amount of such a category of liabilities or assets
which it may hold, then, if the Agent or the Required Lenders so elect
by notice to the Representative, the obligation of the Agent and the
Lenders to make or continue LIBOR Loans hereunder shall be suspended
until such Regulatory Change ceases to be in effect.
8.5 In consideration of the Letter of Credit Guaranty, the Company
shall pay to the Agent, for the benefit of the Lenders, a Letter of
Credit Guaranty Fee equal to two and one-quarter percent (2.25%) per
annum on the undrawn face amount of each Letter of Credit. For each
documentary Letter of Credit, the entire Letter of Credit Guaranty Fee
shall be payable on the date of issuance, and for each standby Letter of
Credit, the Letter of Credit Guaranty fee shall be payable monthly on
the first day of each month.
8.6 Any charges, fees, commissions, costs and expenses charged to
the Agent for any Company's account by any Issuing Bank in connection
with or arising out of Letters of Credit issued pursuant to this
Financing Agreement or out of transactions relating thereto will be
charged to the Companies' Revolving Loan Account in full when charged to
or paid by the Agent, and when made by any such Issuing Bank shall be
conclusive and binding upon the Agent and the Lenders.
8.7 On demand, the Companies shall reimburse or pay the Agent for
all Out-of-Pocket Expenses and the Documentation Fee.
8.8 Commencing on the first day of the month following the month
in which the Closing Date occurs, and on the first day of each month
thereafter, each Company shall pay to the Agent, for the benefit of the
Lenders, the Line of Credit Fee.
8.9 On the date hereof and on July 1, 2000, the Companies shall
pay to the Agent, for its own account, the Collateral Management Fee,
which shall be fully earned and not refundable or rebateable when due.
8.10 After the occurrence and during the continuance of an Event of
Default, each Company shall pay the Agent's standard charges for, and
the reasonable fees and expenses of, the Agent's personnel used by Agent
for reviewing the books and records of each Company and for verifying,
testing protecting, safeguarding, preserving or disposing of all or any
part of the Collateral, which fees and expenses shall be in addition to
the Collateral Management Fee.
8.11 Each Company hereby authorizes the Agent to charge the
Companies' Revolving Loan Account with the amount of all payments due
under this Section 8 as such payments become due. Any amount charged to
the Companies' Revolving Loan Account shall be deemed a Revolving Loan
hereunder and shall incur interest at the rate provided in Section 8.1
-----------
of this Financing Agreement. Each Company confirms that any charge
which the Agent may make to the Companies' Revolving Loan Account as
herein provided will be made as an accommodation to each Company and
solely at the Agent's discretion.
8.12 If the Term Loan is not prepaid in full before March 1, 2000,
the Companies shall pay to the Agent, for the benefit of the Lenders, a
fee on March 1, 2000 in the amount of Two Hundred Fifty Thousand Dollars
($250,000). If the Term Loan is not prepaid in full before June 1,
2000, the Companies shall pay to the Agent, for the benefit of the
Lenders, an additional fee on June 1, 2000, in the amount of Five
Hundred Thousand Dollars ($500,000). If the Term Loan is not prepaid in
full prior to any September 1, December 1, March 1, or June 1,
commencing September 1, 2000, on each such date, the Companies shall pay
to Agent, for the benefit of the Lenders, additional fees in the amount
of Two Hundred Fifty Thousand Dollars ($250,000) each.
8.13 The Companies agree that, subsequent to the Closing Date,
Agent will conduct comprehensive appraisals of the fixed assets of the
Companies (in addition to the appraisals referred to in Section 2.1(u)
--------------
above) at the expense of the Companies, payable on demand of Agent;
provided, that the cost thereof to the Companies shall not exceed Sixty-
Seven Thousand Five Hundred Dollars ($67,500).
SECTION 9. Powers
------
9.1 Each Company hereby constitutes the Agent, on behalf of the
Lenders, or any person or agent which the Agent may designate, as its
attorney-in-fact, at each Company's cost and expense, to exercise all of
the following powers, which being coupled with an interest, shall be
irrevocable until all of the Obligations have been paid in full:
(a) To receive, take, endorse, sign, assign and deliver, all
in the name of the Agent or any Company, 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
each Company and to notify postal authorities to change the address for
delivery thereof to such address as the Agent may designate;
(c) To request from customers indebted on Accounts at any
time, in the name of the Agent or any Company or that of the Agent's
designee, information concerning the amounts owing on the Accounts;
(d) To transmit to customers indebted on Accounts notice of
the Agent's and the Lenders' interests therein and to notify customers
indebted on Accounts to make payment directly to the Agent, on behalf of
the Lenders, for each Company's account; and
(e) To take or bring, in the name of the Agent, the Lenders
and/or any Company, all steps, actions, suits or proceedings deemed by
the Agent necessary or desirable to enforce or effect collection of the
Accounts.
9.2 Notwithstanding anything set forth herein to the contrary, the
powers set forth in paragraphs (b), (d) and (e) of Section 9.1 may only
-----------
be exercised after the occurrence of an Event of Default and until such
time as such Event of Default is waived.
SECTION 10. Events of Default and Remedies
------------------------------
10.1 Notwithstanding any provision of this Financing Agreement to
the contrary, Agent may terminate this Financing Agreement immediately
upon the occurrence of any of the following (herein "Events of
Default"):
(a) cessation of the business of Parent, any Company or any
Guarantor or the calling of a meeting of the creditors of any of them
for purposes of compromising the debts and obligations of any Company;
(b) the failure of the Parent, any Company or any Guarantor
to generally meet its debts as those debts mature;
(c) the commencement by or against the Parent, any Company or
any Guarantor of any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceedings under any federal or
state law, provided that in the event of any involuntary proceeding
commenced against any Company and such proceeding is not dismissed or
discharged within thirty (30) days after commencement thereof;
(d) (i) breach by any Company of any covenant contained
herein (other than those referred to in paragraph (e) below) or in any
of the other Loan Documents, provided that such breach by any Company of
any of the covenants referenced in this paragraph (d) shall not be
deemed to be an Event of Default unless and until such breach shall
remain unremedied to Agent's satisfaction for a period of fifteen (15)
days from the date of such breach or (ii) any representation or warranty
contained herein shall be false or misleading in any material respect
when made or remade;
(e) breach by any Company of any warranty, representation or
covenant of Sections 3.3 (other than the third sentence of Section 3.3)
------------ ------------
and 3.4, Section 4, Sections 6.3 and 6.4 (other than the first sentence
--- --------- ----------- ---
of Section 6.4), and Sections 7.1, 7.5, 7.6, 7.9 through 7.11,
----------- ------------ --- --- --- ----
inclusive, and 7.16;
---
(f) failure of any Company to pay any of the Obligations on
the due date thereof, provided that nothing contained herein shall
prohibit the Agent from charging such amounts to the Companies'
Revolving Loan Account on the due date thereof;
(g) any Company shall (i) engage in any "prohibited
transaction" as defined in ERISA, (ii) incur any "accumulated funding
deficiency" as defined in ERISA, (iii) incur any "Reportable Event" as
defined in ERISA, (iv) terminate any "Plan", subject to Title IV of
ERISA or (v) engage in any proceeding in which the Pension Benefit
Guaranty Corporation shall seek appointment, or is appointed, as trustee
or administrator of any Plan, as defined in ERISA; and with respect to
this paragraph (g) such event or condition (x) remains uncured for a
period of thirty (30) days from date of occurrence and (y) could subject
any Company to any tax, penalty or other liability that could reasonably
be expected to have a Material Adverse Effect;
(h) a default (after all applicable cure periods with respect
thereto have expired) or an "Event of Default" shall occur under any of
the other Loan Documents;
(i) without the prior written consent of Agent, any Company
shall either (i) amend or modify the Subordinated Debt, or (ii) make any
payment on account of or in connection with any Subordinated Debt
including, without limitation, the Term Financiers Loan Documents or the
▇.▇. ▇▇▇▇▇ Loan Documents, except as expressly permitted in the
applicable Subordination Agreement;
(j) the occurrence of any event of default (after giving
effect to any applicable grace or cure periods) under any instrument or
agreement evidencing either (i) the Subordinated Debt or (ii) any other
Indebtedness of any Company having a principal amount in excess of Two
Million Five Hundred Thousand Dollars ($2,500,000); or
(k) a default (after all applicable cure periods with respect
thereto have expired) or an "Event of Default" shall occur under any of
the Lease Documents.
10.2 Upon the occurrence of an Event of Default, the Agent may, at
its option, and the Agent shall, upon the request of the Required
Lenders, declare that all loans, advances and extensions of credit
provided for in Sections 3, 4 and 5 of this Financing Agreement
------------- -
thereafter shall be made in the Lender's sole discretion, and the
obligation of the Lenders to make Revolving Loans and/or open Letters of
Credit shall cease unless such Event of Default is waived. In addition,
upon the occurrence of an Event of Default, the Agent may, at its
option, and the Agent shall, upon the request of the Required Lenders:
(a) declare all Obligations immediately due and payable; (b) charge each
Company the Default Rate of Interest on all then outstanding or
thereafter incurred Obligations in lieu of the interest provided for in
Section 8 of this Financing Agreement, provided that with respect to
---------
this clause (b), the Agent gives Representative written notice of the
Event of Default (provided that no notice is required if the Event of
Default is the Event listed in paragraph (c) of Section 10.1) and the
------------
Companies fail to cure the Event of Default to the Agent's satisfaction
within ten (10) days after Representative is deemed to have received
such notice hereunder (or within 10 days of the occurrence of the Event
of Default, in the case of an Event of Default listed in paragraph (c)
of Section 10.1); and (c) immediately terminate this Financing Agreement
------------
upon notice to Representative, provided that no notice of termination is
required in the case of an Event of Default listed in paragraph (c) of
Section 10.1. The exercise of any option is not exclusive of any other
------------
option which may be exercised at any time by the Agent or the Lenders.
10.3 Immediately after the occurrence and during the continuance of
any Event of Default, the Agent may, at its option, and the Agent shall,
upon the request of the Required Lenders: (a) remove from any premises
where same may be located any and all documents, instruments, files and
records, and any receptacles or cabinets containing same, relating to
the Accounts, or the Agent may use, at each Company's expense, such of
each Company's personnel, supplies or space at each Company's places of
business or otherwise, as may be necessary to properly administer and
control the Accounts or the handling of collections and realizations
thereon; (b) bring suit, in the name of any Company, the Agent and/or
the Lenders, and generally shall have all other rights respecting said
Accounts, including, without limitation, the right to (i) accelerate or
extend the time of payment, (ii) settle, compromise, release in whole or
in part any amounts owing on any Accounts and (iii) issue credits in the
name of any Company, the Agent and/or the Lenders; (c) sell, assign and
deliver the Collateral and any returned, reclaimed or repossessed
merchandise, with or without advertisement, at public or private sale,
for cash, on credit or otherwise, at the Agent's sole option and
discretion, and the Agent, on behalf of the Lenders, may bid or become
a purchaser at any such sale, free from any right of redemption, which
right is hereby expressly waived by each Company; (d) foreclose its
security interests in the Collateral by any available judicial
procedure, or take possession of any or all of the Inventory and/or
Other Collateral without judicial process, and enter any premises where
any Inventory and/or Other Collateral may be located for the purpose of
taking possession of or removing the same, and (e) exercise any other
rights and remedies provided in law, in equity, by contract or
otherwise. For the purpose of enabling Agent, on behalf of the Lenders,
to exercise rights and remedies hereunder, the Companies hereby grant to
the Agent, to the extent assignable, licensable, or sublicensable,
without breaching any underlying agreements with third parties, an
irrevocable, nonexclusive license (exercisable without payment of
royalty or other compensation to the Companies) to use, assign, license
or sublicense any of the General Intangibles. After the occurrence and
during the continuance of an Event of Default, the Agent shall have the
right, without notice or advertisement, to sell, lease, or otherwise
dispose of all or any part of the Collateral whether in its then
condition or after further preparation or processing, in the name of
each Company, the Agent and/or the Lenders, or in the name of such other
party as the Agent may designate, either at public or private sale or at
any broker's board, in lots or in bulk, for cash or for credit, with or
without warranties or representations, and upon such other terms and
conditions as the Agent and the Lenders in their sole discretion may
deem advisable. Any Lender or the Agent, on behalf of the Lenders,
shall have the right to purchase at any such sale. If any Inventory
shall require rebuilding, repairing, maintenance or preparation, the
Agent, on behalf of the Lenders, shall have the right, at its option, to
do such of the aforesaid as is necessary, for the purpose of putting the
Inventory in such saleable form as the Agent shall deem appropriate.
Each Company agrees, at the request of the Agent, to assemble the
Inventory and to make it available to the Agent at premises of each
Company or elsewhere, and to make available to the Agent the premises
and facilities of each Company for the purpose of the Agent's taking
possession of, removing or putting the Inventory in saleable form.
However, if notice of intended disposition of any Collateral is required
by law, it is agreed that ten (10) days notice shall constitute
reasonable notification and full compliance with the law. The net cash
proceeds resulting from the exercise of any of the foregoing rights
(after deducting all charges, costs and expenses, including reasonable
attorneys' fees) shall be applied by the Agent to the payment of the
Obligations, whether due or to become due, in such order as the Agent
and the Lenders may elect, and each Company shall remain liable to the
Agent and the Lenders for any deficiencies. The Agent, on behalf of the
Lenders, in turn agrees to remit to each Company or its successors or
assigns, any surplus resulting therefrom. The enumeration of the
foregoing rights is not intended to be exhaustive and the exercise of
any right shall not preclude the exercise of any other rights by the
Agent or the Lenders, all of which shall be cumulative. The
mortgage(s), deed(s) of trust and other documents relating to the Real
Estate including, but not limited to, the Real Estate Collateral
Documents shall govern the rights and remedies of the Agent with respect
thereto.
SECTION 11. Termination
-----------
11.1 Except as otherwise provided herein, this Financing Agreement
shall terminate on the Termination Date. Notwithstanding the foregoing,
(a) the Lenders (acting through the Agent) may terminate the Financing
Agreement immediately upon the occurrence of an Event of Default,
provided that in the case of an Event of Default listed in paragraph (c)
of Section 10.1 hereof, the Agent and the Lenders may regard the
------------
Financing Agreement as terminated and notice to that effect is not
required, and (b) the Companies may terminate this Financing Agreement
and the Revolving Line of Credit prior to the Termination Date upon at
least fifteen (15) days' prior written notice to the Agent, provided
that the Companies pay to the Agent, for the benefit of the Lenders,
immediately on demand, any applicable Early Termination Fee and
Prepayment Premium. For purposes of this Financing Agreement, the
repayment of the Revolving Loans in full, by itself, shall not
constitute a termination of this Financing Agreement or the Revolving
Line of Credit. All Obligations shall become due and payable as of any
termination hereunder or under Section 10 hereof and, pending a final
----------
accounting, the Agent may withhold any balances in the Companies'
Revolving Loan Account (unless supplied with an indemnity satisfactory
to the Agent) to cover all of the Obligations, whether absolute or
contingent. All of the Agent's and the Lenders' rights, liens and
security interests shall continue after any termination until all
Obligations have been paid and satisfied in full.
SECTION 12. Miscellaneous
-------------
12.1 Each Company hereby waives diligence, demand, presentment and
protest and any notices thereof as well as notice of nonpayment. No
waiver of any Event of Default shall be effective unless made by the
Required Lenders, and such waiver must be in writing and signed by an
officer of the Required Lenders. No delay or failure by the Agent or
the Lenders 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 of such right or as a waiver of any
such Event of Default. No single or partial exercise by the Agent or
the Lenders of any right or remedy precludes any other or further
exercise thereof, or precludes any other right or remedy.
12.2 This Financing Agreement and the documents executed and
delivered in connection therewith: (a) constitute the entire agreement
among each Company, the Agent and the Lenders; (b) supersede any prior
agreements; (c) subject to the provisions of Section 14.10 hereof, may
-------------
be amended only by a writing signed by each Company, the Agent and the
Required Lenders; and (d) shall bind and benefit each Company, the
Agent, the Lenders and their respective successors and assigns.
12.3 In no event shall any Company, upon demand by the Agent for
payment of any Indebtedness relating hereto, by acceleration of the
maturity thereof, or otherwise, be obligated to pay interest and fees in
excess of the amount permitted by law. Regardless of any provision
herein or in any agreement made in connection herewith, the Agent and
the Lenders shall never 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 the
Agent or any Lender ever receives, collects or applies any such excess,
it shall be deemed a partial repayment of principal and treated as such.
If as a result, principal is paid in full, any remaining excess shall be
refunded to the Companies. This Section 12.3 shall control every other
------------
provision hereof and of any other agreement made in connection herewith.
12.4 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.
12.5 EACH COMPANY, THE AGENT AND THE LENDERS EACH HEREBY WAIVE ANY
-------------------------------------------------------------
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF
-------------------------------------------------------------------
THIS FINANCING AGREEMENT. EACH COMPANY HEREBY IRREVOCABLY WAIVES
------------------------------------------------------------------
PERSONAL SERVICE OF PROCESS AND CONSENTS TO SERVICE OF PROCESS BY
-----------------------------------------------------------------
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED.
------------------------------------------------------
12.6 Except as otherwise herein provided, any notice or other
communication required hereunder shall be in writing, and shall be
deemed to have been validly served, given or delivered when received by
the recipient if hand delivered, sent by commercial overnight courier or
sent by facsimile, or three (3) Business Days after deposit in the
United State mail, with proper first class postage prepaid and addressed
to the party to be notified as follows:
(a) if to the Agent, at:
The CIT Group/Business Credit, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Regional Manager
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇;
with a copy to:
Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Companies at:
Viskase Companies, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President and General Counsel
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & Coff
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ Brilliant, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to any Lender, at its address set forth below its
signature to this Financing Agreement or its address specified in the
Assignment and Transfer Agreement executed by such Lender; or
(d) to such other address as any party may designate for
itself by like notice.
12.7 THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS FINANCING
--------------------------------------------------------------
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS.
------------------------------------------------------------------
12.8 Joint and Several Liability. The liability of each Company
---------------------------
under this Agreement and the Loan Documents in general shall be joint
and several, and each reference herein to the Companies shall be deemed
to refer to each such Company. In furtherance and not in limitation of
Agent's rights and remedies hereunder or at law, Agent may proceed under
this Agreement and the Loan Documents against any one or more of the
Companies in its absolute and sole discretion for any of the Obligations
or any other liability or obligation of any Company arising hereunder.
12.9 Interrelationship Among the Companies. Each Company
-------------------------------------
acknowledges that: (a) that the business operations of each Company are
interrelated and compliment one another, and that such entities have a
common business purpose; (b) to permit their uninterrupted and
continuous operations, such entities now require and will in the future
require various funds and other credit accommodations from the Lenders;
and (c) the funds obtained by the Companies under the this Agreement
will be used by each Company to (i) refinance certain obligations for
which the Companies were guarantors and which obligations were secured
by liens on each Company's assets and (ii) for general working capital
purposes.
12.10 Within thirty (30) days of the Closing Date, each Company
shall, to the extent permitted by law, cause Viskase Holding to pledge
or transfer to Agent, for the benefit of Lenders, a participating
equity interest in sixty-five percent (65%) of the equity interest owned
by Viskase Holding in Viskase Chile, which pledge or transfer, as
applicable, shall be (a) in form and substance reasonably satisfactory
to Agent and (b) effective only upon the acceleration of the Obligations
hereunder.
SECTION 13. Agreements Regarding the Lenders
--------------------------------
13.1 (a) The Agent, on behalf of the Lenders, shall disburse all
loans and advances to the Representative and shall handle all
collections of Collateral and repayment of all Obligations. It is
understood that for purposes of advances to each Company and for
purposes of this Section 13, the Agent will be using the funds of the
Agent.
(b) Unless the Agent shall have been notified in writing by
any Lender prior to any advance to any Company that such Lender will not
make the amount which would constitute its pro rata share of the
--- ----
borrowing (based on the "Commitment Amount" set forth on the signature
pages of this Financing Agreement or on the amount of the "Assigned
Facilities" set forth in an Assignment and Transfer Agreement delivered
in accordance herewith, as the case may be) on such date available to
the Agent, the Agent may assume that such Lender shall make such amount
available to the Agent on a Settlement Date, and in reliance upon such
assumption, the Agent may make available to such Company a corresponding
amount. A certificate of the Agent submitted to any Lender with respect
to any amount owing under this subsection shall be conclusive, absent
manifest error. If such Lender's pro rata share of such borrowing is
--- ----
not in fact made available to the Agent by such Lender on the Settlement
Date, the 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 Companies without prejudice to any rights which the
Agent may have against such Lender hereunder. Nothing contained in this
subsection shall relieve any Lender which has failed to make available
its pro rata share of any borrowing hereunder from its obligation to do
so in accordance with the terms hereof. In addition, nothing contained
herein shall be deemed to obligate the Agent to make available to any
Company the full amount of a requested advance when the Agent has any
notice (written or otherwise) that any of the Lenders will not advance
its pro rata share thereof.
13.2 On each Settlement Date, the Agent and the Lenders shall 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 pro rata share of all outstanding Obligations.
--- ----
13.3 The Agent shall forward to each Lender, at the end of each
month, a copy of the account statement rendered by the Agent to the
Representative.
13.4 After the Agent's receipt of any interest and fees earned
under this Financing Agreement, the Agent promptly will remit to the
Lenders (a) their pro rata share of all fees to which the Lenders are
entitled hereunder and (b) interest computed at the rate and as provided
for in Section 8 of this Financing 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 Agent to the Lenders
of the Companies' interest.
13.5 (a) The Lenders may, with the prior written consent of the
Agent, which consent will not unreasonably be withheld or delayed, sell
to one or more commercial banks, commercial finance lenders or other
financial institutions, participations in the loans and extensions of
credit made and to be made to the Companies hereunder. Such participant
shall have no rights as a Lender hereunder, and notwithstanding the sale
of any participation by a Lender, (i) such Lender shall remain solely
responsible to the other parties hereto for the performance of its
obligations hereunder, and (ii) the Companies, the Agent and the Lenders
may continue to deal solely with such Lender with respect to all matters
relating to this Financing Agreement and the transactions contemplated
hereby. It is understood and agreed that no Lender shall transfer or
grant any participation under this Agreement under which the participant
shall have any rights to approve any amendment to or waiver of this
Agreement or any other Loan Document except to the extent such amendment
or waiver would (A) extend the final scheduled maturity of any
Obligations or extend the expiry date of any Letter of Credit in which
such participant is participating beyond the Termination Date,
(B) increase the amount of the participant's participation beyond over
the amount thereof in effect (it being understood that waivers or
modifications of conditions precedent, covenants, defaults or Events of
Default shall not constitute a change in the terms of such participation
and that an increase in any Lender's Commitment or Obligations shall be
permitted without the consent of any participant if the participant's
participation is not increased as a result thereof), (C) consent to the
assignment or transfer by the Companies of any of their rights and
obligations under this Agreement, (D) decrease the interest rate
applicable to the principal amount of the Obligations in which the
participant is participating, or (E) release all or substantially all of
the Collateral with respect to any portion of the Obligations in which
a participant is participating. In addition, all amounts payable under
this Financing Agreement to any Lender which sells a participation in
accordance with this paragraph shall continue to be paid directly to
such Lender and shall be determined as if such Lender had not sold any
such participation.
(b) The Lenders may also (after Agent's consultation with the
Representative), with the prior written consent of the Agent, which
consent will not be unreasonably withheld or delayed, assign to one or
more commercial banks, commercial finance lenders or other financial
institutions, all or a portion of their rights and obligations under
this Financing Agreement (including, without limitation, its obligations
under the Line of Credit and its rights and obligations with respect to
Letters of Credit). Any such assignment shall (i) apply to the same pro
rata share of such Lender's commitments and interests in the Revolving
Loans, Term Loan and Letters of Credit and (ii) if such assignment is a
partial assignment, be in a minimum principal amount of Five Million
Dollars ($5,000,000) and in integral multiples of One Million Dollars
($1,000,000) in excess thereof. Upon execution of an Assignment and
Transfer Agreement, (i) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such assignment, have the rights and
obligations of the assigning Lender as the case may be hereunder and
(ii) the assigning Lender shall, to the extent that rights and
obligations hereunder have been assigned by such Lender pursuant to such
assignment, relinquish such Lender's rights and be released from its
obligations under this Financing Agreement. Each Company shall, if
necessary, execute any documents reasonably required to effectuate and
acknowledge the assignments.
(c) Subject to the provisions of Section 13.9, each Company
------------
authorizes each Lender to disclose to any participant or purchasing
lender any and all financial information in such Lender's possession
concerning each Company and their affiliates which has been delivered to
such Lender by or on behalf of each Company pursuant to this Financing
Agreement or which has been delivered to such Lender by or on behalf of
each Company in connection with such Lender's credit evaluation of each
Company and its affiliates prior to entering into this Financing
Agreement.
13.6 Each Company hereby agrees that each Lender is solely
responsible for funding its pro rata share of the Line of Credit and
that neither the Agent nor any Lender shall be responsible for, nor
assume any obligations for, the failure of any Lender to make available
its pro rata share of the Line of Credit. Further, should any Lender
--- ----
refuse to make available its pro rata share of the Line of Credit, then
--- ----
any other Lender may, but without obligation to do so, increase,
unilaterally, its pro rata share of the Line of Credit, in which event
--- ----
each Company shall be obligated to that other Lender.
13.7 In the event that the Agent, the Lenders or any one of them
is sued or threatened with suit by any Company, or by any receiver,
trustee, creditor or any committee of creditors on account of any
preference, voidable transfer or lender liability issue, alleged to have
occurred or been received as a result of, or during the transactions
contemplated under this Financing Agreement, then in such event any
money paid in satisfaction or compromise of such suit, action, claim or
demand and any expenses, costs and attorneys' fees paid or incurred in
connection therewith, whether by the Agent, the Lenders or any one of
them, shall be shared proportionately by the Lenders. In addition, any
costs, expenses, fees or disbursements incurred by outside agencies or
attorneys retained by the Agent to effect collection or enforcement of
any rights in the Collateral, including enforcing, preserving or
maintaining rights under this Financing Agreement shall be shared pro
rata among the Lenders to the extent not reimbursed by the Companies or
from the proceeds of Collateral. The provisions of this paragraph shall
not apply to any suits, actions, proceedings or claims that (a) predate
the date of this Financing Agreement or (b) are based on transactions,
actions or omissions that predate the date of this Financing Agreement.
13.8 Each Company authorizes each Lender, and each Lender shall
have the right, without notice, after the acceleration of the
Obligations, to set-off and apply against any and all property held by,
or in the possession of such Lender, any of the Obligations owed to such
Lender.
13.9 For the purposes of this Section 13.9, "Confidential
------------
Information" means all financial projections and all other information
delivered to the Agent or any Lender by or on behalf of Parent, any
Company or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Financing Agreement that
is proprietary in nature and that is clearly marked or labeled or
otherwise adequately identified as being confidential information of
Parent, any Company or any Subsidiary, provided that such term does not
include information that (a) was publicly known or otherwise known to
the Agent or the Lenders prior to the time of such disclosure,
(b) subsequently becomes publicly known through no act or omission by
the Agent or the Lenders or any person acting on their behalf,
(c) otherwise becomes known to the Agent or the Lenders other than
through disclosure by the Agent, the Lenders, any Company or any
Subsidiary or (d) constitutes financial statements delivered under
Section 7.8 that are otherwise publicly available. The Agent and the
-----------
Lenders will maintain the confidentiality of such Confidential
Information in accordance with commercially reasonable procedures
adopted by the Agent and the Lenders in good faith to protect
confidential information of third parties delivered to them, provided
that the Agent and the Lenders may deliver or disclose Confidential
Information to (a) their respective directors, officers, employees,
agents, attorneys and affiliates (to the extent such disclosure
reasonably relates to the administration of the Revolving Line of Credit
and such Person has been notified of these confidentiality provisions),
(b) their respective financial advisors and other professional advisors
who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 13.9, (c) any
----
other Lender, (d) any bank or other commercial lender to which the Agent
or a Lender sells or offers to sell a portion of their rights and
obligations under this Financing Agreement or any participation therein
(if such person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this
Section 13.9), or (e) any other person (including bank auditors and
------------
other regulatory officials) to which such delivery or disclosure may be
necessary or appropriate (i) to comply with compliance with any
applicable law, rule, regulation or order, (ii) in response to any
subpoena or other legal process after giving the Companies notice and an
opportunity to seek judicial protection for such materials, (iii) in
connection with any litigation to which the Agent or a Lender is a party
or (iv) if an Event of Default has occurred and is continuing, to the
extent the Agent may reasonably determine such delivery and disclosure
to be necessary or appropriate in the enforcement or for the protection
of the rights and remedies under this Financing Agreement. Each Lender
becoming a Lender subsequent to the initial execution and delivery of
this Financing Agreement, by its execution and delivery of an Assignment
and Transfer Agreement, will be deemed to have agreed to be bound by,
and to be entitled to the benefits of, this Section 13.9.
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SECTION 14. Agency
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14.1 Each Lender hereby irrevocably designates and appoints Agent
to act as the Agent for the Lenders under this Financing Agreement and
any ancillary loan documents, and irrevocably authorizes Agent, as Agent
for such Lender, to take such action on its behalf under the provisions
of this Financing Agreement and all ancillary documents, and to exercise
such powers and perform such duties as are expressly delegated to the
Agent by the terms of this Financing Agreement and all ancillary
documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in
this Financing Agreement, the Agent shall not 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 Financing Agreement and the ancillary documents or
otherwise exist against the Agent.
14.2 The Agent may execute any of its duties under this Financing
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.
14.3 Neither the Agent nor any of its officers, directors,
employees, agents, or attorneys-in-fact shall be (a) liable to any
Lender for any action lawfully taken or omitted to be taken by the Agent
or such person under or in connection with the Financing Agreement and
all ancillary documents (except for its or such person's own gross
negligence or willful misconduct), or (b) responsible in any manner to
any of the Lenders for (i) any recitals, statements, representations or
warranties made by any Company or any officer thereof contained in this
Financing Agreement or in any ancillary document or in any certificate,
report, statement or other document referred to or provided for in, or
received by the Agent under or in connection with, this Financing
Agreement, (ii) the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Financing Agreement or any
ancillary document or (iii) any failure of any Company to perform its
obligations hereunder or under any ancillary document. The Agent 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 Financing Agreement or any ancillary document, or
to inspect the properties, books or records of any Company.
14.4 The Agent 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 the Agent 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 Companies), independent accountants and other experts
selected by the Agent. The Agent shall be fully justified in failing or
refusing to take any action under this Financing Agreement and all
ancillary documents unless the Agent (a) shall first receive such advice
or concurrence of the Lenders or the Required Lenders, as the case may
be, as the Agent deems appropriate, or (b) shall first be indemnified to
its satisfaction by the Lenders against any and all liability and
expense which may be incurred by the Agent by reason of taking or
continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this
Financing Agreement and all ancillary documents in accordance with a
request of all 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.
14.5 The Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default hereunder unless the
Agent has received notice from a Lender or Representative describing
such Default or Event of Default. In the event that the Agent receives
such a notice, the Agent shall promptly give notice thereof to the
Lenders. The 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 be; provided that unless and until the
Agent shall have received such direction, the Agent may (but shall not
be obligated to) in the interim take such action, or refrain from taking
such action, with respect to such Default or Event of Default as the
Agent shall deem advisable and in the best interests of the Lenders.
14.6 Each Lender expressly acknowledges that neither the Agent nor
any of its officers, directors, employees, agents or attorneys-in-fact
has made any representations or warranties to such Lender, and agrees
that no act by the Agent hereinafter taken, including any review of the
affairs of any Company, shall be deemed to constitute any representation
or warranty by the Agent to any Lender. Each Lender represents to the
Agent that such Lender has, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as
such Lender has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and
other condition and creditworthiness of each Company and made its own
decision to enter into this Financing Agreement. Each Lender also
represents to the Agent that such Lender will, independently and without
reliance upon the Agent or any other Lender and based on such documents
and information as such Lender shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under the Financing Agreement and to make
such investigation as such Lender deems necessary to inform itself as to
the business, operations, property, financial and other condition or
creditworthiness of each Company. The Agent, however, agrees to provide
the Lenders with copies of all financial statements, projections and
business plans which come into the possession of the Agent.
14.7 The Lenders agree to indemnify the Agent (to the extent not
reimbursed by the Companies and without limiting the obligation of the
Companies to do so), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any
time be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of (a) this Financing Agreement or any
ancillary document, or any documents contemplated by or referred to
herein, (b) the transactions contemplated hereby or (c) any action taken
or omitted by the 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 the Agent's gross negligence or willful
misconduct. The agreements of the Lenders set forth in this paragraph
shall survive the payment of the Obligations.
14.8 The Agent may make loans to, and generally engage in any kind
of business with either Company as though the Agent were not the Agent
hereunder. With respect to loans made or renewed by the Agent, or loan
obligations hereunder as Lender, the Agent shall have the same rights
and powers, duties and liabilities under this Financing Agreement as any
Lender and may exercise the same as though it was not the Agent, and the
terms "Lender" and "Lenders" shall include the Agent in its individual
capacities.
14.9 The Agent may resign as the Agent upon thirty (30) days'
notice to the Lenders and such resignation shall be effective upon the
appointment of a successor Agent. If the Agent shall resign as Agent,
then the Lenders promptly shall appoint a successor to the Agent,
whereupon such successor shall succeed to the rights, powers and duties
of the Agent, and the term "Agent" shall mean such successor effective
upon its appointment. Upon such appointment, the former Agent's rights,
powers and duties as Agent 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 Financing Agreement. After any Agent's resignation
hereunder, the provisions of this Section 14 shall inure to its benefit
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as to any actions taken or omitted to be taken by it while acting as the
Agent.
14.10 Notwithstanding anything contained in this Financing
Agreement to the contrary, the Agent will not, without the prior written
consent of all Lenders: (a) amend the Financing Agreement to
(i) increase the Line of Credit, (ii) reduce the interest rates;
(iii) reduce or waive (A) any fees in which the Lenders share hereunder
or (B) the repayment of any Obligations due the Lenders, (iv) extend the
maturity of the Obligations or (v) alter or amend (1) this Section 14.10
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or (2) the definitions of Availability, Availability Reserve, Borrowing
Base, Eligible Inventory, Inventory Advance Percentage or Required
Lenders; (b) release Collateral in bulk without a corresponding
reduction in the Obligations; or (c) intentionally make any Revolving
Loan or assist in opening any Letter of Credit hereunder, if after
giving effect thereto the aggregate amount of Revolving Loans and
Letters of Credit made or issued hereunder would exceed one hundred ten
percent (110%) of the maximum amount available under Sections 3 and 5
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hereof. In all other respects the Agent is authorized to take or to
refrain from taking any action which the Agent, in its reasonable
discretion, deems to be advisable and in the best interest of the
Lenders (including, without limitation, the making of an overadvance or
the termination of the Financing Agreement upon the occurrence of an
Event of Default), unless this Financing Agreement specifically requires
the Companies or the Agent to obtain the consent of, or act at the
direction of, the Required Lenders.
14.11 In the event any Lender's consent is required pursuant to
the provisions of this Financing Agreement and such Lender does not
respond to any request by the 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, the Lenders hereby
mutually agree that the Agent and/or any other Lender shall have the
right (but not the obligation) to purchase such Lender's pro rata share
of the Obligations for the full amount thereof as of the date of such
purchase.
14.12 Each Lender agrees that notwithstanding the provisions of
Section 11 of this Financing Agreement, any Lender may terminate this
Financing Agreement and the Line of Credit only as of the Termination
Date.
[SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Financing
Agreement to be executed, agreed to, accepted and delivered in Chicago,
Illinois by their proper and duly authorized officers as of the 14th day
of June, 1999.
Commitment Amount THE CIT GROUP/BUSINESS CREDIT,
----------------- INC., as the Agent and a Lender
$100,000,000
By:
--------------------------
Its: Vice President
VISKASE CORPORATION, a Pennsylvania
corporation
By:
---------------------------
Its:
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VISKASE SALES CORPORATION, a
Delaware corporation
By:
----------------------------
Its:
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