Exhibit 99.1
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REVOLVING CREDIT AND GUARANTY AGREEMENT
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Among
▇▇▇▇▇ & LORD, INC.,
a Debtor and a Debtor-in-Possession under Chapter 11 of the Bankruptcy Code
as Borrower
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and
THE SUBSIDIARIES OF THE BORROWER NAMED HEREIN,
Each a Debtor and a Debtor-in-Possession under Chapter 11 of the
Bankruptcy Code
as Guarantors
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and
THE BANKS PARTY HERETO,
and
FIRST UNION NATIONAL BANK,
as Administrative Agent, Documentation Agent
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and Collateral Agent
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WACHOVIA SECURITIES, INC.,
as Book Manager
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and
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Lead Arranger
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Dated as of February 20, 2002
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS ................................................................... 2
SECTION 1.01 Defined Terms ........................................................ 2
SECTION 1.02 Terms Generally ...................................................... 15
SECTION 2. AMOUNT AND TERMS OF CREDIT .................................................... 15
SECTION 2.01 Commitment of the Banks .............................................. 15
SECTION 2.02 Borrowing Base ....................................................... 16
SECTION 2.03 Letters of Credit .................................................... 16
SECTION 2.04 Issuance ............................................................. 18
SECTION 2.05 Nature of Letter of Credit Obligations Absolute ...................... 18
SECTION 2.06 Making of Loans; Swingline Loans ..................................... 18
SECTION 2.07 Repayment of Loans; Evidence of Debt ................................. 20
SECTION 2.08 Interest on Loans .................................................... 21
SECTION 2.09 Default Interest ..................................................... 21
SECTION 2.10 Optional Termination or Reduction of Commitment ...................... 22
SECTION 2.11 Alternate Rate of Interest ........................................... 22
SECTION 2.12 Refinancing of Loans ................................................. 22
SECTION 2.13 Mandatory Prepayment; Commitment Termination; Cash Collateral ........ 23
SECTION 2.14 Optional Prepayment of Loans; Reimbursement of Banks ................. 24
SECTION 2.15 Reserve Requirements; Change in Circumstances ........................ 25
SECTION 2.16 Change in Legality ................................................... 26
SECTION 2.17 Pro Rata Treatment, etc .............................................. 27
SECTION 2.18 Taxes ................................................................ 27
SECTION 2.19 Certain Fees ......................................................... 28
SECTION 2.20 Commitment Fee ....................................................... 28
SECTION 2.21 Letter of Credit Fees ................................................ 28
SECTION 2.22 Nature of Fees ....................................................... 29
SECTION 2.23 Priority and Liens ................................................... 29
SECTION 2.24 Right of Set-Off ..................................................... 30
SECTION 2.25 Security Interest in Letter of Credit Account ........................ 31
SECTION 2.26 Payment of Obligations ............................................... 31
SECTION 2.27 No Discharge; Survival of Claims ..................................... 31
TABLE OF CONTENTS
(continued)
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SECTION 2.28 Use of Cash Collateral ............................................... 31
SECTION 3. REPRESENTATIONS AND WARRANTIES ................................................ 32
SECTION 3.01 Organization and Authority ........................................... 32
SECTION 3.02 Due Execution ........................................................ 32
SECTION 3.03 Statements Made ...................................................... 32
SECTION 3.04 Financial Statements ................................................. 33
SECTION 3.05 Ownership ............................................................ 33
SECTION 3.06 Liens ................................................................ 33
SECTION 3.07 Compliance with Law .................................................. 33
SECTION 3.08 Insurance ............................................................ 34
SECTION 3.09 Use of Proceeds ...................................................... 34
SECTION 3.10 Litigation ........................................................... 34
SECTION 4. CONDITIONS OF LENDING ......................................................... 34
SECTION 4.01 Conditions Precedent to Initial Loans and Initial Letters of Credit... 34
SECTION 4.02 Conditions Precedent to Each Loan and Each Letter of Credit .......... 37
SECTION 5. AFFIRMATIVE COVENANTS ......................................................... 38
SECTION 5.01 Financial Statements, Reports, etc ................................... 38
SECTION 5.02 Corporate Existence .................................................. 41
SECTION 5.03 Insurance ............................................................ 41
SECTION 5.04 Obligations and Taxes ................................................ 41
SECTION 5.05 Notice of Event of Default, etc ...................................... 41
SECTION 5.06 Access to Books and Records .......................................... 41
SECTION 5.07 Maintenance of Concentration Account ................................. 42
SECTION 5.08 Borrowing Base Certificate ........................................... 42
SECTION 5.09 Collateral Monitoring and Review ..................................... 42
SECTION 5.10 Business Plan ........................................................ 42
SECTION 5.11 Blocked Account Arrangements ......................................... 42
SECTION 6. NEGATIVE COVENANTS ............................................................ 43
SECTION 6.01 Liens ................................................................ 43
SECTION 6.02 Merger, etc .......................................................... 43
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TABLE OF CONTENTS
(continued)
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SECTION 6.03 Indebtedness ......................................................... 43
SECTION 6.04 Capital Expenditures ................................................. 43
SECTION 6.05 EBITDA ............................................................... 44
SECTION 6.06 Guarantees and Other Liabilities ..................................... 44
SECTION 6.07 Chapter 11 Claims .................................................... 44
SECTION 6.08 Dividends; Capital Stock ............................................. 44
SECTION 6.09 Transactions with Affiliates ......................................... 44
SECTION 6.10 Investments, Loans and Advances ...................................... 44
SECTION 6.11 Disposition of Assets ................................................ 44
SECTION 6.12 Nature of Business ................................................... 45
SECTION 7. EVENTS OF DEFAULT ............................................................. 45
SECTION 7.01 Events of Default .................................................... 45
SECTION 8. THE AGENT ..................................................................... 48
SECTION 8.01 Administration by Agent .............................................. 48
SECTION 8.02 Advances and Payments ................................................ 48
SECTION 8.03 Sharing of Setoffs ................................................... 49
SECTION 8.04 Agreement of Required Banks .......................................... 49
SECTION 8.05 Liability of Agent ................................................... 49
SECTION 8.06 Reimbursement and Indemnification .................................... 50
SECTION 8.07 Rights of Agent ...................................................... 50
SECTION 8.08 Independent Banks .................................................... 51
SECTION 8.09 Notice of Transfer ................................................... 51
SECTION 8.10 Successor Agent ...................................................... 51
SECTION 9. GUARANTY ...................................................................... 51
SECTION 9.01 Guaranty ............................................................. 51
SECTION 9.02 No Impairment of Guaranty ............................................ 52
SECTION 9.03 Subrogation .......................................................... 52
SECTION 10. MISCELLANEOUS ................................................................. 53
SECTION 10.01 Notices .............................................................. 53
SECTION 10.02 Survival of Agreement, Representations and Warranties, etc ........... 53
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TABLE OF CONTENTS
(continued)
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SECTION 10.03 Successors and Assigns ............................................... 53
SECTION 10.04 Confidentiality ...................................................... 55
SECTION 10.05 Expenses ............................................................. 56
SECTION 10.06 Indemnity ............................................................ 56
SECTION 10.07 CHOICE OF LAW ........................................................ 57
SECTION 10.08 No Waiver ............................................................ 57
SECTION 10.09 Extension of Maturity ................................................ 57
SECTION 10.10 Amendments, etc ...................................................... 57
SECTION 10.11 Severability ......................................................... 58
SECTION 10.12 Headings ............................................................. 58
SECTION 10.13 Execution in Counterparts ............................................ 58
SECTION 10.14 Prior Agreements ..................................................... 58
SECTION 10.15 Further Assurances ................................................... 58
SECTION 10.16 WAIVER OF JURY TRIAL ................................................. 59
ANNEX A Commitment Amounts
EXHIBIT A - Form of Interim Order
EXHIBIT B - Form of Security and Pledge Agreement
EXHIBIT C - Form of Opinion of Counsel
EXHIBIT D - Form of Assignment and Acceptance
SCHEDULE 1.01 - List of Existing Agreements
SCHEDULE 3.05 - Subsidiaries
SCHEDULE 3.06 - Liens
SCHEDULE 3.07 - Environmental
SCHEDULE 3.10 - Litigation
SCHEDULE 5.11 - Blocked Accounts
SCHEDULE 6.06 - Existing Guaranties
SCHEDULE 6.10 - Existing Investments
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REVOLVING CREDIT AND GUARANTY AGREEMENT
Dated as of February 20, 2002
REVOLVING CREDIT AND GUARANTY AGREEMENT, dated as of February 20,
2002, among ▇▇▇▇▇ & LORD, INC., a Delaware corporation (the "Borrower"), a
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debtor and debtor-in-possession in a case pending under Chapter 11 of the
Bankruptcy Code, the direct and indirect domestic subsidiaries of the Borrower
signatory hereto (each a "Guarantor" and collectively, the "Guarantors"), each
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of which Guarantors is a debtor and debtor-in-possession in a case pending under
Chapter 11 of the Bankruptcy Code (the cases of the Borrower and the Guarantors,
each a "Case" and collectively, the "Cases"), FIRST UNION NATIONAL BANK, a
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national banking corporation ("First Union"), and its successors, each of the
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other financial institutions from time to time party hereto (together with First
Union, the "Banks") and FIRST UNION NATIONAL BANK, as administrative agent (in
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such capacity, the "Agent"), and its successors, for the Banks.
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INTRODUCTORY STATEMENT
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On February 19, 2002, the Borrower and the Guarantors filed voluntary
petitions with the Bankruptcy Court initiating the Cases and have continued in
the possession of their assets and in the management of their business pursuant
to Sections 1107 and 1108 of the Bankruptcy Code.
The Borrower has applied for and First Union has agreed to, upon the
terms and subject to the conditions set forth herein, provide a revolving credit
and letter of credit facility in an aggregate principal amount not to exceed
$100,000,000, all of the Borrower's obligations under which are to be guaranteed
by the Guarantors.
The proceeds of the Loans will be used for working capital purposes
of the Borrower and the Guarantors.
To provide guarantees and security for the repayment of the Loans,
the reimbursement of any draft drawn under a Letter of Credit and the payment of
the other obligations of the Borrower and the Guarantors hereunder and under the
other Loan Documents (including, without limitation, the obligations of the
Borrower and the Guarantors to First Union and its banking Affiliates permitted
by Section 6.03(vi)), the Borrower and the Guarantors will provide to the Agent
and the Banks the following (each as more fully described herein):
(a) a guaranty from each of the Guarantors of the due and punctual
payment and performance of the obligations of the Borrower hereunder;
(b) an allowed administrative expense claim in each of the Cases pursuant
to Section 364(c)(1) of the Bankruptcy Code having joint and several
superpriority over all administrative expenses of the kind specified in Sections
503(b) and 507(b) of the Bankruptcy Code;
(c) a perfected first priority Lien, pursuant to Section 364(c)(2) of the
Bankruptcy Code, upon all property of the Borrower and the Guarantors'
respective estates in the Cases that is not subject to valid, perfected and
non-avoidable liens on the Filing Date, including, without
limitation, all accounts receivable and inventory of the Borrower and Guarantors
(excluding the Borrower's and the Guarantors' rights in respect of (i) avoidance
actions under the Bankruptcy Code and proceeds thereof and (ii) in excess of 65%
of the capital stock of any entity that is a directly controlled foreign entity)
and on all cash and cash equivalents in the Letter of Credit Account;
(d) a perfected Lien, pursuant to Section 364(c)(3) of the Bankruptcy
Code, upon all property of the Borrower and the Guarantors' respective estates
in the Cases (other than the property referred to in paragraph (e) below that is
subject to the valid and perfected Liens that presently secure the Borrower's
and Guarantors' pre-petition Indebtedness under the Existing Agreement) that is
subject to valid, perfected and non-avoidable Liens in existence on the Filing
Date or that is subject to valid Liens in existence on the Filing Date that are
perfected subsequent to the Filing Date as permitted by Section 546(b) of the
Bankruptcy Code or that is subject to Permitted Liens, which perfected Lien of
the Agent shall be junior to such valid, perfected and non-avoidable Liens; and
(e) perfected first priority senior priming Liens, pursuant to Section
364(d)(1) of the Bankruptcy Code, upon all property of the Borrower and the
Guarantors that is subject to (x) the existing Liens that presently secure the
Borrower's and Guarantors' pre-petition Indebtedness under or in connection with
that certain Credit Agreement dated as of January 29, 1998, among the Borrower,
certain of the Borrower's subsidiaries party thereto as guarantors, the secured
lenders from time to time party thereto and First Union, as administrative
agent, First Union, as issuing lender, (as amended, the "Existing Agreement")
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(but subject to any Liens to which the Liens being primed hereby are subject on
the Filing Date or become subject subsequent to the Filing Date as permitted by
Section 546(b) of the Bankruptcy Code) and (y) any Liens granted after the
Filing Date to provide adequate protection in respect of the Existing Agreement,
which first priority priming Liens in favor of the Agent and the Banks shall be
senior in all respects to all of such existing Liens under or in connection with
the Existing Agreement, and to any Liens granted after the Filing Date to
provide adequate protection in respect thereof; provided, however, that the
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Borrower and the Guarantors shall not be required to pledge in excess of 65% of
the capital stock of any entity that is a directly controlled foreign entity.
All of the claims and the Liens granted hereunder in the Cases to the
Agent and the Banks shall be subject to the Carve-Out to the extent provided in
Section 2.23.
Accordingly, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
SECTION 1.01 Defined Terms.
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"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
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"ABR Loan" shall mean any Loan bearing interest at a rate determined
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by reference to the Alternate Base Rate in accordance with the provisions of
Section 2.
"Additional Credit" shall have the meaning given such term in Section
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4.02(d) hereof.
2
"Adjusted LIBOR Rate" shall mean, with respect to any Eurodollar
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Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/100 of 1%) equal to the quotient of (a) the LIBOR
Rate in effect for such Interest Period divided by (b) a percentage (expressed
as a decimal) equal to 100% minus the Eurodollar Reserve Percentage. For
purposes hereof, the term "LIBOR Rate" shall mean for the Interest Period of
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such Eurodollar Loan, the rate per annum determined on the basis of the offered
rate for deposits in Dollars of amounts equal or comparable to the principal
amount of such Eurodollar Loan offered for a term comparable to such Interest
Period, which rate appears as the British Bankers Association Settlement Rate
for U.S. Dollars on the Telerate Screen Page 3750 effective as of 11:00 A.M.,
London time, 2 Euro-Dollar Business Days prior to the first day of such Interest
Period, provided that if no such offered rate appears on such page, the "LIBOR
Rate" for such Interest Period will be the arithmetic average (rounded upward,
if necessary, to the next higher 1/100th of 1%) of rates quoted by not less than
2 major banks in New York City, selected by the Administrative Agent, at
approximately 10:00 A.M., New York City time, 2 Eurodollar Business Days prior
to the first day of such Interest Period, for deposits in Dollars offered to
leading European banks for a period comparable to such Interest Period in an
amount comparable to the principal amount of such Eurodollar Loan. The Adjusted
LIBOR Rate shall be adjusted automatically on and as of the effective date of
any change in the Eurodollar Reserve Percentage.
"Affiliate" shall mean, as to any Person, any other Person which,
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directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, a Person (a
"Controlled Person") shall be deemed to be "controlled by" another Person (a
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"Controlling Person") if the Controlling Person possesses, directly or
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indirectly, power to direct or cause the direction of the management and
policies of the Controlled Person whether by contract or otherwise.
"Agent" shall have the meaning set forth in the Introduction.
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"Agreement" shall mean this Revolving Credit and Guaranty Agreement,
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as the same may from time to time be further amended, modified or supplemented.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal
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to the greatest of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Rate in effect on such day plus 1/2 of 1%. For purposes hereof, "Prime
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Rate" shall mean the rate of interest per annum publicly announced from time to
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time by the Agent as its prime rate in effect at its principal office in
Charlotte, North Carolina; each change in the Prime Rate shall be effective on
the date such change is publicly announced. If for any reason the Agent shall
have determined (which determination shall be conclusive absent manifest error)
that it is unable to ascertain the Federal Funds Rate for any reason, including
the inability or failure of the Agent to obtain sufficient quotations in
accordance with the terms hereof, the Alternate Base Rate shall be determined
without regard to clause (b) of the first sentence of this definition, as
appropriate, until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the Prime Rate
or the Federal Funds Rate shall be effective on the effective date of such
change in the Prime Rate or the Federal Funds Rate, respectively.
3
"Assignment and Acceptance" shall mean an assignment and acceptance
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entered into by a Bank and an Eligible Assignee, and accepted by the Agent,
substantially in the form of Exhibit D.
"Bank Affiliate" shall mean, (a) with respect to any Bank, (i) an
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Affiliate of such Bank or (ii) any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and is administered or managed by a Bank or an Affiliate of such
Bank and (b) with respect to any Bank that is a fund which invests in bank loans
and similar extensions of credit, any other fund that invests in bank loans and
similar extensions of credit and is managed by the same investment advisor as
such Bank or by an Affiliate of such investment advisor.
"Bankruptcy Code" shall mean The Bankruptcy Reform Act of 1978, as
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heretofore and hereafter amended, and codified as 11 U.S.C. Section 101 et seq.
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"Bankruptcy Court" shall mean the United States Bankruptcy Court for
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the Southern District of New York or any other court having jurisdiction over
the Cases from time to time.
"Banks" shall have the meaning set forth in the Introduction.
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"Board" shall mean the Board of Governors of the Federal Reserve
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System of the United States.
"Borrower" shall have the meaning set forth in the Introduction.
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"Borrowing" shall mean the incurrence of Loans of a single Type made
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from all the Banks on a single date and having, in the case of Eurodollar Loans,
a single Interest Period (with any ABR Loan made pursuant to Section 2.16 being
considered a part of the related Borrowing of Eurodollar Loans).
"Borrowing Base" shall be defined in a manner mutually satisfactory
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to the Agent and the Borrower and reflected in the Borrowing Base Amendment;
such Borrowing Base shall include accounts receivable and inventory of the
Borrower and the Guarantors meeting certain eligibility standards determined by
the Agent in consultation with the Borrower and shall reflect a reserve for the
Carve-Out. Borrowing Base eligibility standards may be determined from time to
time by the Agent in its sole discretion exercised reasonably. The Borrowing
Base shall be subject to reserves from time to time established by the Agent
with any changes in such standards and reserves to be effective five (5) days
after delivery of notice thereof to the Borrower.
"Borrowing Base Amendment" shall mean an amendment to this Agreement
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satisfactory to the Agent and the Borrower to be executed and delivered prior to
the entry of the Final Order.
"Borrowing Base Certificate" shall mean a certificate substantially
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in the form of an exhibit to the Borrowing Base Amendment (with such changes
therein as may be required by
4
the Agent to reflect the components of and reserves against the Borrowing Base
as provided for hereunder from time to time), executed and certified by a
Financial Officer of the Borrower, which shall include appropriate exhibits and
schedules as referred to therein and as provided for in Section 5.08.
"Business Day" shall mean any day other than a Saturday, Sunday or
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other day on which banks in the State of North Carolina are required or
permitted to close (and, for a Letter of Credit, other than a day on which the
Fronting Bank issuing such Letter of Credit is closed); provided, however, that
when used in connection with a Eurodollar Loan, the term "Business Day" shall
also exclude any day on which banks are not open for dealings in dollar deposits
on the London interbank market.
"Capital Expenditures" shall mean, for any period, the aggregate of
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all expenditures (whether (i) paid in cash and not theretofore accrued or (ii)
accrued as liabilities during such period, and including that portion of any
post-petition Capitalized Lease which is capitalized on the consolidated balance
sheet of the Borrower and the Guarantors) net of cash amounts received by the
Borrower and the Guarantors from other Persons during such period in
reimbursement of Capital Expenditures made by the Borrower and the Guarantors,
excluding interest capitalized during construction, made by the Borrower and the
Guarantors during such period that, in conformity with GAAP, are required to be
included in or reflected by the property, plant, equipment or similar fixed
asset accounts reflected in the consolidated balance sheet of the Borrower and
the Guarantors (including equipment which is purchased simultaneously with the
trade-in of existing equipment owned by the Borrower or any of the Guarantors to
the extent of the gross amount of such purchase price less the book value of the
equipment being traded in at such time), but excluding expenditures made in
connection with the replacement or restoration of assets to the extent
reimbursed or financed from (x) insurance proceeds paid on account of the loss
of or the damage to the assets being replaced or restored or (y) awards of
compensation arising from the taking by condemnation or eminent domain of such
assets being replaced.
"Capitalized Lease" shall mean, as applied to any Person, any lease
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of property by such Person as lessee which would be capitalized on a balance
sheet of such Person prepared in accordance with GAAP.
"Carve-Out" shall have the meaning set forth in Section 2.23.
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"Cases" shall have the meaning set forth in the Introduction.
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"Change of Control" shall mean (i) the acquisition of ownership,
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directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof),
of shares representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Borrower; or (ii)
the occupation of a majority of the seats (other than vacant seats) on the Board
of Directors of the Borrower by Persons who were neither (A) nominated by the
Board of Directors of the Borrower nor (B) appointed by directors so nominated.
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"Closing Date" shall mean the date on which this Agreement has been
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executed and the conditions precedent to the making of the initial Loans set
forth in Section 4.01 have been satisfied or waived, which date shall occur
promptly upon entry of the Interim Order, but not later than 10 days following
the entry of the Interim Order.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
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time to time, and the regulations promulgated and rulings issued thereunder.
"Collateral" shall mean the "Collateral" as defined in the Security
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and Pledge Agreement.
"Commitment" shall mean, with respect to each Bank, the commitment of
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each Bank hereunder in the amount set forth opposite its name on Annex A hereto
or as may subsequently be set forth in the Register from time to time, as the
same may be reduced from time to time pursuant to this Agreement.
"Commitment Fee" shall have the meaning set forth in Section 2.20.
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"Commitment Letter" shall mean that certain Commitment Letter dated
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February 15, 2002, among the Agent, Wachovia Securities, Inc. and the Borrower.
"Commitment Percentage" shall mean at any time, with respect to each
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Bank, the percentage obtained by dividing its Commitment at such time by the
Total Commitment at such time.
"Consummation Date" shall mean the date of the substantial
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consummation (as defined in Section 1101 of the Bankruptcy Code and which for
purposes of this Agreement shall be no later than the effective date) of a
Reorganization Plan that is confirmed pursuant to an order of the Bankruptcy
Court.
"Dollars" and "$" shall mean lawful money of the United States of
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America.
"EBITDA" shall mean, for any period, all as determined in accordance
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with GAAP, the consolidated net income (or net loss) of the Borrower and the
Guarantors, for such period, plus (a) the sum of (i) depreciation expense, (ii)
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amortization expense, (iii) other non-cash expenses, (iv) lower of cost or
market adjustment for LIFO inventories, (v) consolidated federal, state and
local income tax expense (to the extent not a negative number), (v) cash
interest expense for such period less cash interest income for such period, (vi)
extraordinary losses, (vii) the cumulative effect of any change in accounting
principles and (viii) "Chapter 11 expenses" (or "administrative costs reflecting
Chapter 11 expenses") as shown on the Borrower's consolidated statement of
income for such period less (b) extraordinary gains.
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"Eligible Assignee" shall mean (i) a commercial bank having total
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assets in excess of $1,000,000,000; (ii) a finance company, insurance company or
other financial institution or fund, in each case reasonably acceptable to the
Agent, which in the ordinary course of business extends credit of the type
contemplated herein and has total assets in excess of $200,000,000 and whose
becoming an assignee would not constitute a prohibited transaction under Section
4975 of ERISA; (iii) a Bank Affiliate of the assignor Bank; and (iv) any other
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financial institution satisfactory to the Borrower (but only for so long as an
Event of Default shall not have occurred and be continuing) and the Agent.
"Environmental Lien" shall mean a Lien in favor of any Governmental
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Authority for (i) any liability under federal or state environmental laws or
regulations, or (ii) damages arising from or costs incurred by such Governmental
Authority in response to a release or threatened release of a hazardous or toxic
waste, substance or constituent, or other substance into the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
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1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
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of ERISA) which together with the Borrower or a Subsidiary of the Borrower would
be deemed to be a single employer within the meaning of Section 414(b), (c),
(m), or (o) of the Code.
"Eurocurrency Liabilities" shall have the meaning assigned thereto in
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Regulation D issued by the Board, as in effect from time to time.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
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Loans.
"Eurodollar Business Day" means any Business Day on which dealings in
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Dollar deposits are carried out in the London interbank market.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate
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determined by reference to the Adjusted LIBOR Rate in accordance with the
provisions of Section 2.
"Eurodollar Reserve Percentage" shall mean on any date the percentage
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(expressed as a decimal) established by the Board and any other banking
authority for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in respect of "Eurocurrency liabilities" (or in
respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Eurodollar Loans is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any Lender to United States residents).
"Event of Default" shall have the meaning given such term in Section
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7.
"Excluded Taxes" shall mean, with respect to the Agent, any Bank, the
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Fronting Bank or any other recipient of any payment to be made by or on account
of any obligation of the Borrower hereunder, (a) income or franchise taxes
imposed on (or measured by) its net income by the United States of America, or
by the jurisdiction under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Bank, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a Foreign
Bank, any withholding tax that is imposed on amounts payable to such Foreign
Bank at the time such Foreign Bank becomes a party to this Agreement (or
designates a new lending office) or is attributable to such Foreign Bank's
failure to comply with Section 2.18(e), except to the extent that such Foreign
Bank (or its assignor, if any) was entitled,
7
at the time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.18(a).
"Existing Agreement" shall have the meaning set forth in the
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Introduction and shall include all of the agreements granting security interests
and Liens in property and assets of the Borrower and the Guarantors to the
Existing Lenders, including without limitation, the security agreements,
mortgages and leasehold mortgages listed on Schedule 1.01 hereto, each of which
documents was executed and delivered (to the extent party thereto) by the
Borrower and the Guarantors prior to the Filing Date, as each may have been
amended or modified from time to time.
"Existing Lenders" shall mean, collectively, the lenders under the
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Existing Agreement, together with any successors or assigns thereof.
"Federal Funds Rate" means the rate per annum (rounded upwards, if
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necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Agent and confirmed in Federal Reserve Board
Statistical Release H.15 (519) or any successor or substitute publication
selected by the Agent. If, for any reason, such rate is not available, then
"Federal Funds Rate" shall mean a daily rate which is determined, in the opinion
of the Agent, to be the rate at which federal funds are being offered for sale
in the national federal funds market at 9:00 a.m. (Charlotte, North Carolina
time). Rates for weekends or holidays shall be the same as the rate for the most
immediate preceding Business Day.
"Fees" shall collectively mean the Commitment Fees, Letter of Credit
----
Fees and other fees referred to in Sections 2.19, 2.20 and 2.21.
"Filing Date" shall mean February 19, 2002.
-----------
"Final Order" shall have the meaning given such term in Section
-----------
4.02(d).
"Financial Officer" shall mean the Chief Financial Officer, Chief
-----------------
Accounting Officer, Controller or Treasurer of the Borrower.
"First Union" shall have the meaning set forth in the Introduction.
-----------
"Foreign Bank" means any Bank that is organized under the laws of a
------------
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Fronting Bank" shall mean First Union (or any of its banking
-------------
Affiliates) or such other Bank (which other Bank shall be reasonably
satisfactory to the Borrower) as may agree with First Union to act in such
capacity.
"GAAP" shall mean generally accepted accounting principles applied in
----
accordance with Section 1.02.
8
"Governmental Authority" shall mean any Federal, state, municipal or
----------------------
other governmental department, commission, board, bureau, agency or
instrumentality or any court, in each case whether of the United States or
foreign.
"Guarantor" shall have the meaning set forth in the Introduction.
---------
"Indebtedness" shall mean, at any time and with respect to any
------------
Person, (i) all indebtedness of such Person for borrowed money (other than
current trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices), (ii) all indebtedness of such
Person for the deferred purchase price of property or services (other than
property, including inventory, and services purchased, and expense accruals and
deferred compensation items arising, in the ordinary course of business), (iii)
all obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments (other than performance, surety and appeal bonds arising in
the ordinary course of business), (iv) all indebtedness of such Person created
or arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property) (other than customary reservations or
retentions of title under agreements with suppliers entered into in the ordinary
course of business), (v) all obligations of such Person under Capitalized
Leases, (vi) all reimbursement, payment or similar obligations of such Person,
contingent or otherwise, under acceptance, letter of credit or similar
facilities and all obligations of such Person in respect of (x) currency swap
agreements, currency future or option contracts and other similar agreements
(other than such agreements to protect against fluctuations in raw material
values) designed to hedge against fluctuations in foreign interest rates and (y)
interest rate swap, cap or collar agreements and interest rate future or option
contracts; (vii) all Indebtedness referred to in clauses (i) through (vi) above
guaranteed directly or indirectly by such Person, or in effect guaranteed
directly or indirectly by such Person through an agreement (A) to pay or
purchase such Indebtedness or to advance or supply funds for the payment or
purchase of such Indebtedness, (B) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Indebtedness or to assure the holder
of such Indebtedness against loss in respect of such Indebtedness, (C) to supply
funds to or in any other manner invest in the debtor (including any agreement to
pay for property or services irrespective of whether such property is received
or such services are rendered) or (D) otherwise to assure a creditor against
loss in respect of such Indebtedness, and (viii) all Indebtedness referred to in
clauses (i) through (vii) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property (including, without limitation, accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such Indebtedness.
"Indemnified Taxes" shall mean Taxes other than Excluded Taxes.
-----------------
"Insufficiency" shall mean, with respect to any Plan, its "amount of
-------------
unfunded benefit liabilities" within the meaning of Section 4001(a)(18) of
ERISA, if any.
"Interim Order" shall have the meaning given such term in Section
-------------
4.01(b).
9
"Interest Payment Date" shall mean (i) as to any Eurodollar Loan, the
---------------------
last day of each consecutive 30 day period running from the commencement of the
applicable Interest Period, and (ii) as to all ABR Loans, the last calendar day
of each month and the date on which any ABR Loans are refinanced with Eurodollar
Loans pursuant to Section 2.12.
"Interest Period" shall mean, as to any Borrowing of Eurodollar
---------------
Loans, the period commencing on the date of such Borrowing (including as a
result of a refinancing of ABR Loans) or on the last day of the preceding
Interest Period applicable to such Borrowing and ending on the numerically
corresponding day (or if there is no corresponding day, the last day) in the
calendar month that is one or three months thereafter, as the Borrower may elect
in the related notice delivered pursuant to Sections 2.06(b) or 2.12; provided,
--------
however, that (i) if any Interest Period would end on a day which shall not be a
-------
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day, and (ii) no Interest Period shall end later than the
Termination Date.
"Investments" shall have the meaning given such term in Section 6.10.
-----------
"Letter of Credit" shall mean any irrevocable letter of credit issued
----------------
pursuant to Section 2.03, which letter of credit shall be (i) an import
documentary or a standby letter of credit, (ii) issued for purposes that are
reasonably acceptable to the Agent, (iii) denominated in Dollars and (iv)
otherwise in such form as may be reasonably approved from time to time by the
Agent and the applicable Fronting Bank.
"Letter of Credit Account" shall mean the account established by the
------------------------
Borrower under the sole and exclusive control of the Agent maintained at the
office of the Agent at One First Union Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, designated as the "▇▇▇▇▇ & Lord Letter of
Credit Account" that shall be used solely for the purposes set forth in Sections
2.03(b) and 2.13.
"Letter of Credit Fees" shall mean the fees payable in respect of
---------------------
Letters of Credit pursuant to Section 2.21.
"Letter of Credit Outstandings" shall mean, at any time, the sum of
-----------------------------
(i) the aggregate undrawn stated amount of all Letters of Credit then
outstanding plus (ii) all amounts theretofore drawn under Letters of Credit and
not then reimbursed.
"Lien" shall mean any mortgage, pledge, security interest,
----
encumbrance, lien or charge of any kind whatsoever (including any conditional
sale or other title retention agreement or any lease in the nature thereof).
"Loan" shall have the meaning given such term in Section 2.01.
----
"Loan Documents" shall mean this Agreement, the Letters of Credit,
--------------
the Security and Pledge Agreement, and any other instrument or agreement
executed and delivered to the Agent or any Bank in connection herewith.
"Maturity Date" shall mean August 19, 2003.
-------------
10
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
------------------
Section 4001(a)(3) of ERISA, which is maintained or contributed to by (or to
which there is an obligation to contribute of) the Borrower or a Subsidiary of
the Borrower or an ERISA Affiliate, and each such plan for the five-year period
immediately following the latest date on which the Borrower, or a Subsidiary of
the Borrower or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
"Multiple Employer Plan" shall mean a Single Employer Plan, which (i)
----------------------
is maintained for employees of the Borrower or an ERISA Affiliate and at least
one person (as defined in Section 3(9) of ERISA) other than the Borrower and its
ERISA Affiliates or (ii) was so maintained and in respect of which the Borrower
or an ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA
in the event such Plan has been or were to be terminated.
"Net Proceeds" shall mean, in respect of any sale of assets, the cash
------------
proceeds of such sale after the payment of or reservation for (x) expenses that
are directly related to (or the need for which arises as a result of) the
transaction of sale, including, but not limited to, related severance costs,
estimated taxes payable, taxes payable, brokerage commissions, professional
expenses, other similar costs that are directly related to the sale (all of
which expenses shall be satisfactory to the Agent in its reasonable judgment),
(y) the amount secured by valid and perfected Liens, if any, that are senior to
the Liens on such assets held by the Agent on behalf of the Banks (and, in
respect of any calculation of Net Proceeds payable to the Existing Lenders,
Liens that are senior to the Liens held by the Existing Lenders) and (z) the
reasonable costs and expenses of any repairs, alterations or improvements made
by the Borrower or any Guarantor to the assets sold to the extent such repairs,
alterations or improvements were required pursuant to the terms of such sale.
"Obligations" shall mean (a) the due and punctual payment of principal
-----------
of and interest on the Loans and the reimbursement of all amounts drawn under
Letters of Credit, and (b) the due and punctual payment of the Fees and all
other present and future, fixed or contingent, monetary obligations of the
Borrower and the Guarantors to the Banks and the Agent under the Loan Documents.
"Orders" shall mean the Interim Order and the Final Order of the
------
Bankruptcy Court referred to in Sections 4.01(b) and 4.02(d).
"Other Taxes" shall mean any and all present or future stamp or
-----------
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
----
successor agency or entity performing substantially the same functions.
"Pension Plan" shall mean a defined benefit plan (as defined in
------------
Section 414(j) of the Code and Section 3(35) of ERISA) which meets and is
subject to the requirements of Section 401(a) of the Code.
"Permitted Investments" shall mean:
---------------------
11
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within twelve months from the date of acquisition thereof;
(b) without limiting the provisions of paragraph (d) below,
investments in commercial paper maturing within six months from the date of
acquisition thereof and having, at such date of acquisition, a rating of at
least "A-2" or the equivalent thereof from Standard & Poor's Ratings Services or
of at least "P-2" or the equivalent thereof from ▇▇▇▇▇'▇ Investors Service,
Inc.;
(c) investments in certificates of deposit, banker's acceptances and
time deposits (including Eurodollar time deposits) maturing within six months
from the date of acquisition thereof issued or guaranteed by or placed with (i)
any domestic office of the Agent or the bank with whom the Borrower and the
Guarantors maintain their cash management system, provided, that if such bank is
not a Bank hereunder, such bank shall have entered into an agreement with the
Agent pursuant to which such bank shall have waived all rights of setoff and
confirmed that such bank does not have, nor shall it claim, a security interest
therein or (ii) any domestic office of any other commercial bank of recognized
standing organized under the laws of the United States of America or any State
thereof that has a combined capital and surplus and undivided profits of not
less than $250,000,000 and is the principal banking Subsidiary of a bank holding
company having a long-term unsecured debt rating of at least "A-2" or the
equivalent thereof from Standard & Poor's Ratings Services or at least "P-2" or
the equivalent thereof from ▇▇▇▇▇'▇ Investors Service, Inc.;
(d) investments in commercial paper maturing within six months from
the date of acquisition thereof and issued by (i) the holding company of the
Agent or (ii) the holding company of any other commercial bank of recognized
standing organized under the laws of the United States of America or any State
thereof that has (A) a combined capital and surplus in excess of $250,000,000
and (B) commercial paper rated at least "A-2" or the equivalent thereof from
Standard & Poor's Ratings Services or of at least "P-2" or the equivalent
thereof from ▇▇▇▇▇'▇ Investors Service, Inc.;
(e) investments in repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clause (a) above
entered into with any office of a bank or trust company meeting the
qualifications specified in clause (c) above;
(f) investments in money market funds substantially all the assets of
which are comprised of securities of the types described in clauses (a) through
(e) above; and
(g) to the extent owned on the Filing Date, investments by the
Borrower or any Guarantor in the capital stock or membership interests of any
direct or indirect Subsidiary.
"Permitted Liens" shall mean (i) Liens imposed by law (other than
---------------
Environmental Liens and any Lien imposed under ERISA) for taxes, assessments or
charges of any Governmental Authority for claims not yet due or which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate
12
provisions are being maintained in accordance with GAAP; (ii) Liens of landlords
and Liens of carriers, warehousemen, mechanics, materialmen and other Liens
(other than Environmental Liens and any Lien imposed under ERISA) in existence
on the Filing Date or thereafter imposed by law and created in the ordinary
course of business; (iii) Liens (other than any Lien imposed under ERISA)
incurred or deposits made in the ordinary course of business (including, without
limitation, surety bonds and appeal bonds) in connection with workers'
compensation, unemployment insurance and other types of social security benefits
or to secure the performance of tenders, bids, leases, contracts (other than for
the repayment of Indebtedness), statutory obligations and other similar
obligations or arising as a result of progress payments under government
contracts; (iv) easements (including, without limitation, reciprocal easement
agreements and utility agreements), rights-of-way, covenants, consents,
reservations, encroachments, variations and zoning and other restrictions,
charges or encumbrances (whether or not recorded) and interest of ground
lessors, which do not interfere materially with the ordinary conduct of the
business of the Borrower or any Guarantor, as the case may be, and which do not
materially detract from the value of the property to which they attach or
materially impair the use thereof to the Borrower or any Guarantor, as the case
may be; (v) purchase money Liens (including Capitalized Leases) upon or in any
property acquired or held in the ordinary course of business to secure the
purchase price of such property or to secure Indebtedness permitted by Section
6.03(iv) solely for the purpose of financing the acquisition of such property;
(vi) letters of credit or deposits in the ordinary course to secure leases; and
(vii) extensions, renewals or replacements of any Lien referred to in paragraphs
(i) through (vi) above, provided that the principal amount of the obligation
--------
secured thereby is not increased and that any such extension, renewal or
replacement is limited to the property originally encumbered thereby.
"Person" shall mean any natural person, corporation, division of a
------
corporation, partnership, trust, joint venture, association, company, estate,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan" shall mean a Single Employer Plan or a Multiemployer Plan.
----
"Prepayment Date" shall mean the date that is thirty (30) days after
---------------
the entry of the Interim Order by the Bankruptcy Court if the Final Order has
not been entered by the Bankruptcy Court prior to the expiration of such thirty
(30) day period.
"Pre-Petition Agent" shall mean First Union National Bank as agent for
------------------
the Existing Lenders.
"Pre-Petition Payment" shall mean a payment (by way of adequate
--------------------
protection or otherwise) of principal or interest or otherwise on account of any
pre-petition Indebtedness or trade payables or other pre-petition claims against
the Borrower or any Guarantor.
"Register" shall have the meaning set forth in Section 10.03(d).
--------
"Reorganization Plan" shall mean a plan of reorganization in any of
-------------------
the Cases.
"Required Banks" shall mean, at any time, Banks holding Loans (other
--------------
than Swingline Loans) representing in excess of 50% of the aggregate principal
amount of such Loans
13
outstanding or, if no Loans are outstanding, ▇▇▇▇▇ having Commitments
representing in excess of 50% of the Total Commitment.
"Security and Pledge Agreement" shall have the meaning set forth in
-----------------------------
Section 4.01(c).
"Single Employer Plan" shall mean a single employer plan, as defined
--------------------
in Section 4001(a)(15) of ERISA, that (i) is maintained for employees of the
Borrower or an ERISA Affiliate or (ii) was so maintained and in respect of which
the Borrower could have liability under Title IV of ERISA in the event such Plan
has been or were to be terminated.
"Subsidiary" shall mean, with respect to any Person (herein referred
----------
to as the "parent"), any corporation, association or other business entity
------
(whether now existing or hereafter organized) of which at least a majority of
the securities or other ownership or membership interests having ordinary voting
power for the election of directors is, at the time as of which any
determination is being made, owned or controlled by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
"Super-majority Banks" shall have the meaning given such term in
--------------------
Section 10.10(b).
"Superpriority Claim" shall mean a claim against the Borrower and any
-------------------
Guarantor in any of the Cases which is an administrative expense claim having
priority over any or all administrative expenses of the kind specified in
Sections 503(b) or 507(b) of the Bankruptcy Code.
"Swingline Lender" shall mean First Union in its capacity as Swingline
----------------
lender herein.
"Swingline Loan" shall have the meaning given such term in Section
--------------
2.06(c).
"Taxes" shall mean any and all present or future taxes, levies,
-----
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Termination Date" shall mean the earliest to occur of (i) the
----------------
Prepayment Date, (ii) the Maturity Date, (iii) the Consummation Date and (iv)
the acceleration of the Loans and the termination of the Total Commitment in
accordance with the terms hereof.
"Termination Event" shall mean (i) a "reportable event", as such term
-----------------
is described in Section 4043(c) of ERISA (other than a "reportable event" as to
which the 30-day notice is waived under subsection .22, .23, .25, .27 or .28 of
PBGC Regulation Section 4043) or an event described in Section 4068 of ERISA and
excluding events which would not be reasonably likely (as reasonably determined
by the Agent) to have a material adverse effect on the financial condition,
operations, business, properties or assets of the Borrower and the Guarantors
taken as a whole, or (ii) the withdrawal of the Borrower or any ERISA Affiliate
from a Multiple Employer Plan during a plan year in which it was a "substantial
employer," as such term is defined in Section 4001(a)(2) of ERISA, the
incurrence of liability by the Borrower or any ERISA Affiliate under Section
4064 of ERISA upon the termination of a Multiple Employer
14
Plan, the imposition of Withdrawal Liability, or (iii) providing notice of
intent to terminate a Plan pursuant to Section 4041(c) of ERISA or the treatment
of a Plan amendment as a termination under Section 4041 of ERISA, if such
amendment requires the provision of security, or (iv) the institution of
proceedings to terminate a Plan by the PBGC under Section 4042 of ERISA, or (v)
any other event or condition (other than the commencement of the Cases and the
failure to have made any contribution accrued as of the Filing Date but not
paid) which would reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the imposition of any liability under Title IV of ERISA
(other than for the payment of premiums to the PBGC in the ordinary course).
"Total Commitment" shall mean, at any time, the sum of the Commitments
----------------
at such time.
"Type" when used in respect of any Loan or Borrowing shall refer to
----
the Rate of interest by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "Rate" shall mean
the Adjusted LIBOR Rate and the Alternate Base Rate.
"Unused Total Commitment" shall mean, at any time, (i) the Total
-----------------------
Commitment less (ii) the sum of (x) the aggregate outstanding principal amount
of all Loans and (y) the aggregate Letter of Credit Outstandings.
"Withdrawal Liability" shall have the meaning given such term under
--------------------
Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02 Terms Generally. The definitions in Section 1.01 shall apply
---------------
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. All references herein to Sections, Exhibits and
Schedules shall be deemed references to Sections of, and Exhibits and Schedules
to, this Agreement unless the context shall otherwise require. Except as
otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time; provided, however, that for purposes of determining compliance with any
-------- -------
covenant set forth in Section 6, such terms shall be construed in accordance
with GAAP as in effect on the date of this Agreement applied on a basis
consistent with the application used in the Borrower's audited financial
statements referred to in Section 3.04.
SECTION 2. AMOUNT AND TERMS OF CREDIT
SECTION 2.01 Commitment of the Banks.
-----------------------
(a) Each Bank severally and not jointly with the other Banks agrees,
upon the terms and subject to the conditions herein set forth (including,
without limitation, the provisions of Section 2.28), to make revolving credit
loans (together with Swingline Loans referred to in Section 2.06, each a "Loan"
----
and collectively, the "Loans") to the Borrower at any time and from time to time
-----
during the period commencing on the date hereof and ending on the Termination
Date in an aggregate principal amount (exclusive of the aggregate principal
amount of the
15
Swingline Loans, if any, made by such Bank) not to exceed, when added to such
Bank's Commitment Percentage of the then aggregate Letter of Credit
Outstandings, the Commitment of such Bank, which Loans may be repaid and
reborrowed in accordance with the provisions of this Agreement. At no time shall
the sum of the then outstanding aggregate principal amount of the Loans plus the
----
then aggregate Letter of Credit Outstandings exceed the lesser of (i) the Total
Commitment of $100,000,000 as the same may be reduced from time to time pursuant
to Sections 2.10 and 2.13 and (ii) after the execution and delivery of the
Borrowing Base Amendment, the Borrowing Base.
(b) Each Borrowing shall be made by the Banks pro rata in accordance
--- ----
with their respective Commitments (except as set forth in Section 2.06(c) with
respect to Swingline Loans); provided, however, that the failure of any Bank to
-------- -------
make any Loan shall not in itself relieve the other Banks of their obligations
to lend.
SECTION 2.02 Borrowing Base. Notwithstanding any other provision of this
--------------
Agreement to the contrary, the aggregate principal amount of all outstanding
Loans plus the then aggregate Letter of Credit Outstandings (in excess of the
amount of cash then held in the Letter of Credit Account pursuant to Section
2.03(b)) shall not at any time following the date upon which the Borrowing Base
Amendment shall have been executed exceed the Borrowing Base and no Loan shall
be made or Letter of Credit issued in violation of the foregoing.
SECTION 2.03 Letters of Credit.
-----------------
(a) Upon the terms and subject to the conditions herein set forth, the
Borrower may request a Fronting Bank, at any time and from time to time after
the date hereof and prior to the Termination Date, to issue, and, subject to the
terms and conditions contained herein, such Fronting Bank shall issue, for the
account of the Borrower or a Guarantor one or more Letters of Credit, provided
that no Letter of Credit shall be issued if after giving effect to such issuance
(i) the aggregate Letter of Credit Outstandings shall exceed $15,000,000 or (ii)
the aggregate Letter of Credit Outstandings, when added to the aggregate
outstanding principal amount of the Loans, would exceed the Total Commitment
and, provided further, that no Letter of Credit shall be issued if the Fronting
-------- -------
Bank shall have received notice from the Agent or the Required Banks that the
conditions to such issuance set forth herein and any other documentation
relating to such Letter of Credit have not been met.
(b) No Letter of Credit shall expire later than the Maturity Date,
provided that if any Letter of Credit shall be outstanding on the Termination
--------
Date, the Borrower shall, at or prior to the Termination Date, except as the
Agent may otherwise agree in writing, (i) cause all Letters of Credit which
expire after the Termination Date to be returned to the Fronting Bank undrawn
and marked "cancelled" or (ii) if the Borrower is unable to do so in whole or in
part, either (x) provide a "back-to-back" letter of credit to one or more
Fronting Banks in a form satisfactory to such Fronting Bank and the Agent (in
their sole discretion), issued by a bank satisfactory to such Fronting Bank and
the Agent (in their sole discretion), and in an amount equal to 105% of the then
undrawn stated amount of all outstanding Letters of Credit issued by such
Fronting Banks (less the amount, if any, then on deposit in the Letter of Credit
Account) and/or (y) deposit cash in the Letter of Credit Account in an amount
equal to 105% of the then undrawn stated amount of all Letter of Credit
Outstandings (less the amount, if any, then on
----
16
deposit in the Letter of Credit Account) as collateral security for the
Borrower's reimbursement obligations in connection therewith, such cash to be
promptly remitted to the Borrower upon the expiration, cancellation or other
termination or satisfaction of such reimbursement obligations.
(c) The Borrower shall pay to each Fronting Bank, in addition to such
other fees and charges as are specifically provided for in Section 2.21 hereof,
such fees and charges in connection with the issuance and processing of the
Letters of Credit issued by such Fronting Bank as are customarily imposed by
such Fronting Bank from time to time in connection with letter of credit
transactions.
(d) Drafts drawn under each Letter of Credit shall be reimbursed by
the Borrower in Dollars not later than the first Business Day following the date
of draw and shall bear interest from the date of draw until the first Business
Day following the date of draw at a rate per annum equal to the Alternate Base
Rate plus 2.0% and thereafter on the unreimbursed portion until reimbursed in
----
full at a rate per annum equal to the Alternate Base Rate plus 4.0% (computed on
----
the basis of the actual number of days elapsed over a year of 365 days or 366
days in a leap year). The Borrower shall effect such reimbursement (x) if such
draw occurs prior to the Termination Date, in cash or through a Borrowing
without the satisfaction of the conditions precedent set forth in Section 4.02
or (y) if such draw occurs on or after the Termination Date, in cash. Each Bank
agrees to make the Loans described in clause (x) of the preceding sentence
notwithstanding a failure to satisfy the applicable lending conditions thereto
or the provisions of Sections 2.02 or 2.28.
(e) Immediately upon the issuance of any Letter of Credit by any
Fronting Bank, such Fronting Bank shall be deemed to have sold to each Bank
other than such Fronting Bank and each such other Bank shall be deemed
unconditionally and irrevocably to have purchased from such Fronting Bank,
without recourse or warranty, an undivided interest and participation, to the
extent of such Bank's Commitment Percentage, in such Letter of Credit, each
drawing thereunder and the obligations of the Borrower and the Guarantors under
this Agreement with respect thereto. Upon any change in the Commitments pursuant
to Section 10.03, it is hereby agreed that with respect to all Letter of Credit
Outstandings, there shall be an automatic adjustment to the participations
hereby created to reflect the new Commitment Percentages of the assigning and
assignee Banks. Any action taken or omitted by a Fronting Bank under or in
connection with a Letter of Credit, if taken or omitted in the absence of gross
negligence or willful misconduct, shall not create for such Fronting Bank any
resulting liability to any other Bank.
(f) In the event that a Fronting Bank makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to such Fronting Bank pursuant to this Section, the Fronting Bank shall promptly
notify the Agent, which shall promptly notify each Bank of such failure, and
each Bank shall promptly and unconditionally pay to the Agent for the account of
the Fronting Bank the amount of such Bank's Commitment Percentage of such
unreimbursed payment in Dollars and in same day funds. If the Fronting Bank so
notifies the Agent, and the Agent so notifies the Banks prior to 11:00 a.m.
(Charlotte, North Carolina) on any Business Day, such Banks shall make available
to the Fronting Bank such Bank's Commitment Percentage of the amount of such
payment on such Business Day in same day funds. If and to the extent such Bank
shall not have so made its Commitment
17
Percentage of the amount of such payment available to the Fronting Bank, such
Bank agrees to pay to such Fronting Bank, forthwith on demand such amount,
together with interest thereon, for each day from such date until the date such
amount is paid to the Agent for the account of such Fronting Bank at the Federal
Funds Effective Rate. The failure of any Bank to make available to the Fronting
Bank its Commitment Percentage of any payment under any Letter of Credit shall
not relieve any other Bank of its obligation hereunder to make available to the
Fronting Bank its Commitment Percentage of any payment under any Letter of
Credit on the date required, as specified above, but no Bank shall be
responsible for the failure of any other Bank to make available to such Fronting
Bank such other Bank's Commitment Percentage of any such payment. Whenever a
Fronting Bank receives a payment of a reimbursement obligation as to which it
has received any payments from the Banks pursuant to this paragraph, such
Fronting Bank shall pay to each Bank which has paid its Commitment Percentage
thereof, in Dollars and in same day funds, an amount equal to such Bank's
Commitment Percentage thereof.
SECTION 2.04 Issuance. Whenever the Borrower desires a Fronting Bank to
--------
issue a Letter of Credit, it shall give to such Fronting Bank and the Agent
prior written (including telegraphic, telex, facsimile or cable communication)
notice reasonably in advance of the requested date of issuance specifying the
date on which the proposed Letter of Credit is to be issued (which shall be a
Business Day), the stated amount of the Letter of Credit so requested, the
expiration date of such Letter of Credit and the name and address of the
beneficiary thereof.
SECTION 2.05 Nature of Letter of Credit Obligations Absolute. The
-----------------------------------------------
obligations of the Borrower to reimburse the Banks for drawings made under any
Letter of Credit shall be unconditional and irrevocable and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including, without limitation (it being understood that any such payment by the
Borrower shall be without prejudice to, and shall not constitute a waiver of,
any rights the Borrower might have or might acquire as a result of the payment
by the Fronting Bank of any draft or the reimbursement by the Borrower thereof):
(i) any lack of validity or enforceability of any Letter of Credit; (ii) the
existence of any claim, setoff, defense or other right which the Borrower or any
Guarantor may have at any time against a beneficiary of any Letter of Credit or
against any of the Banks, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction; (iii) any draft,
demand, certificate or other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; (iv) payment by a
Fronting Bank of any Letter of Credit against presentation of a demand, draft or
certificate or other document which does not comply with the terms of such
Letter of Credit; (v) any other circumstance or happening whatsoever, which is
similar to any of the foregoing; or (vi) the fact that any Event of Default
shall have occurred and be continuing. The Fronting Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit to determine whether such documents
comply with the draw requirements set forth in such Letter of Credit.
SECTION 2.06 Making of Loans; Swingline Loans.
--------------------------------
(a) Except as contemplated by Section 2.11, Loans shall be either ABR
Loans or Eurodollar Loans as the Borrower may request subject to and in
accordance with this Section, provided that (x) all Loans made pursuant to the
same Borrowing shall, unless otherwise
18
specifically provided herein, be Loans of the same Type and (y) all Swingline
Loans shall be ABR Loans. Each Bank may fulfill its Commitment with respect to
any Eurodollar Loan or ABR Loan by causing any lending office of such Bank to
make such Loan; provided that any such use of a lending office shall not affect
the obligation of the Borrower to repay such Loan in accordance with the terms
of this Agreement. Each Bank shall, subject to its overall policy
considerations, use reasonable efforts (but shall not be obligated) to select a
lending office which will not result in the payment of increased costs by the
Borrower pursuant to Section 2.15. Subject to the other provisions of this
Section and the provisions of Section 2.12, Borrowings of Loans of more than one
Type may be incurred at the same time, provided that no more than eight (8)
Borrowings of Eurodollar Loans may be outstanding at any time.
(b) The Borrower shall give the Agent prior notice of each Borrowing
hereunder of at least three Business Days for Eurodollar Loans and one Business
Day for ABR Loans (provided, that Swingline Loans shall be made as set forth in
Section 2.06(c)); such notice shall be irrevocable and shall specify the amount
of the proposed Borrowing (which shall not be less than $2,000,000 (and integral
multiples of $100,000) in the case of Eurodollar Loans and $500,000 (and
integral multiples of $100,000 in the case of ABR Loans) and the date thereof
(which shall be a Business Day) and shall contain disbursement instructions.
Such notice, to be effective, must be received by the Agent not later than 1:00
p.m., Charlotte, North Carolina time, on the third Business Day in the case of
Eurodollar Loans and 12:00 noon, Charlotte, North Carolina time on the first
Business Day in the case of ABR Loans, preceding the date on which such
Borrowing is to be made. Such notice shall specify whether the Borrowing then
being requested is to be a Borrowing of ABR Loans or Eurodollar Loans (and with
respect to Eurodollar Loans, such notice shall specify the Interest Period). If
no election is made as to the Type of Loan, such notice shall be deemed a
request for Borrowing of ABR Loans. The Agent shall promptly notify each Bank of
its proportionate share of such Borrowing, the date of such Borrowing, the Type
of Borrowing or Loans being requested and the Interest Period or Interest
Periods applicable thereto, as appropriate. On the borrowing date specified in
such notice, each Bank shall make its share of the Borrowing available at the
office of the Agent at One First Union Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, no later than 11:00 a.m., Charlotte, North
Carolina time, in immediately available funds. Upon receipt of the funds made
available by the Banks to fund any borrowing hereunder, the Agent shall disburse
such funds in the manner specified in the notice of borrowing delivered by the
Borrower and shall use reasonable efforts to make the funds so received from the
Banks available to the Borrower no later than 2:00 p.m. Charlotte, North
Carolina time.
(c) Subject to the terms and conditions hereof, and notwithstanding
the provisions hereof which would otherwise require Borrowings to be made from
the Bank on a pro rata basis, the Swingline Lender shall make non-pro rata Loans
--- ---- --- ----
(individually, a "Swingline Loan", and collectively, the "Swingline Loans") to
-------------- ---------------
the Borrower from time to time prior to the Termination Date in an aggregate
principal amount at any one time outstanding not in excess of $3,000,000,
provided, that at no time may the sum of the aggregate outstanding principal
--------
amount of the Swingline Loans, plus the aggregate outstanding principal amount
----
of all other Loans, plus the then aggregate Letter of Credit Outstandings exceed
----
the Total Commitment. Amounts borrowed by the Borrower under this subsection (c)
may be repaid and reborrowed up to but not including the Termination Date. All
Swingline Loans shall be made as ABR Loans, shall not be entitled to be
converted into Eurodollar Loans (except in accordance with Section 2.12), shall
be
19
payable on the Termination Date (or as otherwise provided in Section 2.06(d))
and shall otherwise be subject to all the terms and conditions that are
generally applicable to Loans hereunder, except that all interest thereon shall
be payable to the Swingline Lender solely for its own account. The Borrower
shall give the Agent irrevocable notice (which notice must be received by the
Agent prior to 12:30 p.m. Charlotte, North Carolina time) on the date upon which
Swingline Loans are requested to be made specifying the amount of each requested
Swingline Loan, which shall be in a minimum amount of $100,000 or a whole
multiple thereof. The Agent shall promptly give the Swingline Lender notice of
its proportionate share of such Swingline Loans.
(d) Upon demand by the Swingline Lender, the Borrower shall borrow ABR
Loans pursuant to Section 2.06(b) from each of the Banks on a pro rata basis in
--- ----
amounts equal to each Bank's Commitment Percentage of such outstanding Swingline
Loans, and apply the proceeds of such ABR Loans to the repayment of such
Swingline Loans. Each Bank hereby agrees to make its pro rata portion of such
--- ----
ABR Loans available to the Borrower and to remit the proceeds thereof directly
to the Swingline Lender, regardless of whether the conditions precedent thereto
set forth in Section 4.02 hereof are then satisfied and whether or not the
Borrower has requested a Borrowing and notwithstanding any reduction of the
Total Commitment subsequent to the making of Swingline Loans. In the event that
the Borrower shall fail to borrow ABR Loans to repay any such Swingline Loan
within two (2) Business Days after demand therefor by the Swingline Lender, or
in any event upon request by the Agent and on the Termination Date, each other
Bank shall irrevocably and unconditionally purchase from the Swingline Lender,
without recourse or warranty, an undivided interest and participation in such
Swingline Loan to the extent of such Bank's Commitment Percentage thereof and
pay the proceeds thereof to the Swingline Lender, in Charlotte, North Carolina,
in Dollars and in same day funds. If any Bank fails to purchase from the
Swingline Lender and pay for such participation, the Swingline Lender shall be
entitled to recover the amount thereof on demand from such Bank together with
accrued interest thereon, for each day from the date of demand therefor, if made
prior to 11:00 a.m. (Charlotte, North Carolina time) on any Business Day, or, if
made at any other time, from the next Business Day following the date of such
demand, until the date such amount is paid to the Swingline Lender by such Bank
at the Federal Funds Rate until two (2) Business Days have expired and
thereafter at the Alternative Base Rate. If such Bank does not pay such amount
forthwith upon the Swingline Lenders's demand therefor, and until such time as
such Bank makes the required payment, the Swingline Lender shall be deemed to
continue to have outstanding a Swingline Loan in the amount of such unpaid
participation obligation for all purposes of this Agreement other than those
provisions requiring the other Banks to purchase a participation therein.
(e) Notwithstanding anything to the contrary contained herein, if the
Borrower shall prepay any of the Loans pursuant to Section 2.13 or 2.14 at a
time when Swingline Loans are outstanding, such prepayment shall be applied to
the Swingline Loans before being applied to any other Loans.
SECTION 2.07 Repayment of Loans; Evidence of Debt.
------------------------------------
(a) The Borrower hereby unconditionally promises to pay to the Agent
for the account of each Bank the then unpaid principal amount of each Loan on
the Termination Date.
20
(b) Each Bank shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Bank
resulting from each Loan made by such Bank, including the amounts of principal
and interest payable and paid to such Bank from time to time hereunder.
(c) The Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the Type thereof and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Bank hereunder and (iii)
the amount of any sum received by the Agent hereunder for the account of the
Banks and each Bank's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
----- -----
amounts of the obligations recorded therein; provided that the failure of any
--------
Bank or the Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement. Notwithstanding anything contained
herein, in no event shall the Borrower be obligated to pay amounts in excess of
amounts actually owed hereunder.
(e) Any Bank may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall execute and deliver to such
Bank a promissory note payable to the order of such Bank (or, if requested by
such Bank, to such Bank and its registered assigns) in a form furnished by the
Agent and reasonably acceptable to the Borrower. Thereafter, the Loans evidenced
by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.03) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.08 Interest on Loans.
-----------------
(a) Subject to the provisions of Section 2.09, each ABR Loan shall
bear interest (computed on the basis of the actual number of days elapsed over a
year of 360 days or, when the Alternate Base Rate is based on the Prime Rate, a
year with 365 days or 366 days in a leap year) at a rate per annum equal to the
Alternate Base Rate plus 2.0%.
----
(b) Subject to the provisions of Section 2.09, each Eurodollar Loan
shall bear interest (computed on the basis of the actual number of days elapsed
over a year of 360 days) at a rate per annum equal, during each Interest Period
applicable thereto, to the Adjusted LIBOR Rate for such Interest Period in
effect for such Borrowing plus 3.25%.
----
(c) Accrued interest on all Loans shall be payable monthly in arrears
on each Interest Payment Date applicable thereto, on the Termination Date, after
the Termination Date on demand and (with respect to Eurodollar Loans) upon any
repayment or prepayment thereof (on the amount prepaid).
SECTION 2.09 Default Interest. If the Borrower or any Guarantor, as the
----------------
case may be, shall default in the payment of the principal of or interest on any
Loan or in the payment of any other amount becoming due hereunder (including,
without limitation, the reimbursement
21
pursuant to Section 2.03(d) of any draft drawn under a Letter of Credit),
whether at stated maturity, by acceleration or otherwise, the Borrower or such
Guarantor, as the case may be, shall on demand from time to time pay interest,
to the extent permitted by law, on such defaulted amount up to (but not
including) the date of actual payment (after as well as before judgment) at a
rate per annum (computed on the basis of the actual number of days elapsed over
a year of 360 days or when the Alternate Base Rate is applicable and is based on
the Prime Rate, a year with 365 days or 366 days in a leap year) equal to (x) in
the case of Borrowings consisting of Eurodollar Loans, the Adjusted LIBOR Rate
in effect for such Borrowing plus 5.25% and (y) in the case of all other
----
amounts, the Alternate Base Rate plus 4.0%.
----
SECTION 2.10 Optional Termination or Reduction of Commitment. Upon at least
-----------------------------------------------
two Business Days' prior written notice to the Agent, the Borrower may at any
time in whole permanently terminate, or from time to time in part permanently
reduce, the Unused Total Commitment. Each such reduction of the Commitments
shall be in the principal amount of $1,000,000 or any integral multiple thereof.
Simultaneously with each reduction or termination of the Commitment, the
Borrower shall pay to the Agent for the account of each Bank the Commitment Fee
accrued and unpaid on the amount of the Commitment of such Bank so terminated or
reduced through the date thereof. Any reduction of the Total Commitment pursuant
to this Section shall be applied pro rata to reduce the Commitment of each Bank.
--- ----
SECTION 2.11 Alternate Rate of Interest. In the event, and on each
--------------------------
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Loan, the Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower absent manifest
error) that reasonable means do not exist for ascertaining the applicable
Adjusted LIBOR Rate, the Agent shall, as soon as practicable thereafter, give
written, facsimile or telegraphic notice of such determination to the Borrower
and the Banks, and any request by the Borrower for a Borrowing of Eurodollar
Loans (including pursuant to a refinancing with Eurodollar Loans) pursuant to
Section 2.06 or 2.12 shall be deemed a request for a Borrowing of ABR Loans.
After such notice shall have been given and until the circumstances giving rise
to such notice no longer exist, each request for a Borrowing of Eurodollar Loans
shall be deemed to be a request for a Borrowing of ABR Loans.
SECTION 2.12 Refinancing of Loans. The Borrower shall have the right, at
--------------------
any time, on three Business Days' prior irrevocable notice to the Agent (which
notice, to be effective, must be received by the Agent not later than 1:00 p.m.,
Charlotte, North Carolina time, on the third Business Day preceding the date of
any refinancing), (x) to refinance (without the satisfaction of the conditions
set forth in Section 4 as a condition to such refinancing, except as set forth
in subsection (a) below) any outstanding Borrowing or Borrowings of Loans of one
Type (or a portion thereof) with a Borrowing of Loans of the other Type or (y)
to continue an outstanding Borrowing of Eurodollar Loans for an additional
Interest Period, subject to the following:
(a) as a condition to the refinancing of ABR Loans with Eurodollar
Loans and to the continuation of Eurodollar Loans for an additional Interest
Period, no Event of Default shall have occurred and be continuing at the time of
such refinancing;
22
(b) if less than a full Borrowing of Loans shall be refinanced, such
refinancing shall be made pro rata among the Banks in accordance with the
--- ----
respective principal amounts of the Loans comprising such Borrowing held by the
Banks immediately prior to such refinancing;
(c) the aggregate principal amount of Loans being refinanced shall be
at least $5,000,000, provided that no partial refinancing of a Borrowing of
--------
Eurodollar Loans shall result in the Eurodollar Loans remaining outstanding
pursuant to such Borrowing being less than $5,000,000 in aggregate principal
amount;
(d) each Bank shall effect each refinancing by applying the proceeds
of its new Eurodollar Loan or ABR Loan, as the case may be, to its Loan being
refinanced;
(e) the Interest Period with respect to a Borrowing of Eurodollar
Loans effected by a refinancing or in respect to the Borrowing of Eurodollar
Loans being continued as Eurodollar Loans shall commence on the date of
refinancing or the expiration of the current Interest Period applicable to such
continuing Borrowing, as the case may be;
(f) a Borrowing of Eurodollar Loans may be refinanced only on the last
day of an Interest Period applicable thereto; and
(g) each request for a refinancing with a Borrowing of Eurodollar
Loans which fails to state an applicable Interest Period shall be deemed to be a
request for an Interest Period of one month.
In the event that the Borrower shall not give notice to refinance any Borrowing
of Eurodollar Loans, or to continue such Borrowing as Eurodollar Loans, or shall
not be entitled to refinance or continue such Borrowing as Eurodollar Loans, in
each case as provided above, such Borrowing shall automatically be refinanced
with a Borrowing of ABR Loans at the expiration of the then-current Interest
Period. The Agent shall, after it receives notice from the Borrower, promptly
give each Bank notice of any refinancing, in whole or part, of any Loan made by
such Bank.
SECTION 2.13 Mandatory Prepayment; Commitment Termination; Cash Collateral.
-------------------------------------------------------------
(a) If at any time the aggregate principal amount of the outstanding
Loans plus the Letter of Credit Outstandings exceeds the lesser of (x) the Total
----
Commitment and (y) on or after the date as of which a Borrowing Base Certificate
is required to be delivered to the Agent, the Borrowing Base, the Borrower will
within one Business Day (i) prepay the Loans in an amount necessary to cause the
aggregate principal amount of the outstanding Loans plus the aggregate Letter of
----
Credit Outstandings to be equal to or less than the Total Commitment and/or the
Borrowing Base, as the case may be, and (ii) if, after giving effect to the
prepayment in full of the Loans, the undrawn amount of outstanding Letter of
Credit Outstandings in excess of the amount of cash held in the Letter of Credit
Account exceeds the Total Commitment and/or the Borrowing Base, as the case may
be, deposit into the Letter of Credit Account an amount equal to 105% of the
amount by which the aggregate Letter of Credit Outstandings in excess of the
amount of cash held in the Letter of Credit Account so exceeds the Total
Commitment or Borrowing Base, as the case may be.
23
(b) Upon the repatriation of funds from the Borrower's foreign
subsidiaries, the Borrower shall apply 100% of such proceeds thereof to the
prepayment of the Loans; provided, however, that any prepayment pursuant to the
-------- -------
foregoing shall not reduce the Total Commitment.
(c) Promptly and in any event within 5 Business Days after the date of
receipt of the Net Proceeds, upon the sale of assets permitted in Section
6.11(iv), the Borrower shall apply 100% of such Net Proceeds thereof to the
prepayment of the Loans, provided, however, that any prepayment pursuant to the
-------- -------
foregoing shall not reduce the Total Commitment.
(d) Upon the Termination Date, the Total Commitment shall be
terminated in full and the Borrower shall repay the Loans in full (plus any
accrued but unpaid interest and fees thereon) and, except as the Agent may
otherwise agree in writing, if any Letter of Credit remains outstanding, to the
Cash Collateralization of the Letter of Credit Outstandings, such cash to be
remitted to the Borrower upon the expiration, cancellation, satisfaction or
other termination of such reimbursement obligations, or otherwise comply with
Section 2.03(b).
SECTION 2.14 Optional Prepayment of Loans; Reimbursement of Banks.
----------------------------------------------------
(a) The Borrower shall have the right at any time and from time to
time to prepay any Loans, in whole or in part, (x) with respect to Eurodollar
Loans, upon at least three Business Days' prior written or facsimile notice to
the Agent, (y) with respect to Swingline Loans, on the same Business Day if
written or facsimile notice is received by the Swingline Lenders prior to 12:30
p.m., Charlotte, North Carolina time and (z) with respect to ABR Loans (other
than Swingline Loans) on the same Business Day if written or facsimile notice is
received by the Agent prior to 12:00 noon, Charlotte, North Carolina time, and
thereafter upon at least one Business Day's prior written or facsimile notice to
the Agent; provided, however, that (i) with respect to Swingline Loans each such
-------- -------
partial prepayment shall be in multiples of $100,000, (ii) with respect to ABR
Loans (other than Swingline Loans) and Eurodollar Loans, each such partial
prepayment shall be in multiples of $1,000,000, (iii) no prepayment of
Eurodollar Loans shall be permitted pursuant to this Section 2.14(a) other than
on the last day of an Interest Period applicable thereto unless such prepayment
is accompanied by the payment of the amounts described in clause (i) of the
first sentence of Section 2.14(b), and (iv) no partial prepayment of a Borrowing
of Eurodollar Loans shall result in the aggregate principal amount of the
Eurodollar Loans remaining outstanding pursuant to such Borrowing being less
than $1,000,000. Each notice of prepayment shall specify the prepayment date,
the principal amount of the Loans to be prepaid and in the case of Eurodollar
Loans, the Borrowing or Borrowings pursuant to which made, shall be irrevocable
and shall commit the Borrower to prepay such Loan by the amount and on the date
stated therein. The Agent shall, promptly after receiving notice from the
Borrower hereunder, notify each Bank of the principal amount of the Loans held
by such Bank which are to be prepaid, the prepayment date and the manner of
application of the prepayment.
(b) The Borrower shall reimburse each Bank on demand for any loss
incurred or to be incurred by it in the reemployment of the funds released (i)
resulting from any prepayment (for any reason whatsoever, including, without
limitation, refinancing with ABR Loans) of any Eurodollar Loan required or
permitted under this Agreement, if such Loan is prepaid other than on the last
day of the Interest Period for such Loan (including, without
24
limitation, any such prepayment in connection with the syndication of the credit
facility evidenced by this Agreement) or (ii) in the event that after the
Borrower delivers a notice of borrowing under Section 2.06 in respect of
Eurodollar Loans, such Loans are not made on the first day of the Interest
Period specified in such notice of borrowing for any reason other than a breach
by such Bank of its obligations hereunder. Such loss shall be the amount as
reasonably determined by such Bank as the excess, if any, of (A) the amount of
interest which would have accrued to such Bank on the amount so paid or not
borrowed at a rate of interest equal to the Adjusted LIBOR Rate for such Loan,
for the period from the date of such payment or failure to borrow to the last
day (x) in the case of a payment or refinancing with ABR Loans other than on the
last day of the Interest Period for such Loan, of the then current Interest
Period for such Loan, or (y) in the case of such failure to borrow, of the
Interest Period for such Loan which would have commenced on the date of such
failure to borrow, over (B) the amount of interest which would have accrued to
such Bank on such amount by placing such amount on deposit for a comparable
period with leading banks in the London interbank market. Each Bank shall
deliver to the Borrower from time to time one or more certificates setting forth
the amount of such loss as determined by such Bank.
(c) In the event the Borrower fails to prepay any Loan on the date
specified in any prepayment notice delivered pursuant to Section 2.14(a), the
Borrower on demand by any Bank shall pay to the Agent for the account of such
Bank any amounts required to compensate such Bank for any loss incurred by such
Bank as a result of such failure to prepay, including, without limitation, any
loss, cost or expenses incurred by reason of the acquisition of deposits or
other funds by such Bank to fulfill deposit obligations incurred in anticipation
of such prepayment, but without duplication of any amounts paid under Section
2.14(b). Each Bank shall deliver to the Borrower from time to time one or more
certificates setting forth the amount of such loss as determined by such Bank.
(d) Any partial prepayment of the Loans by the Borrower pursuant to
Sections 2.13 or 2.14 shall be applied as specified by the Borrower or, in the
absence of such specification, as determined by the Agent, provided that in the
--------
latter case no Eurodollar Loans shall be prepaid pursuant to Section 2.13 to the
extent that such Loan has an Interest Period ending after the required date of
prepayment unless and until all outstanding ABR Loans and Eurodollar Loans with
Interest Periods ending on such date have been repaid in full.
SECTION 2.15 Reserve Requirements; Change in Circumstances.
---------------------------------------------
(a) Notwithstanding any other provision herein, if after the date of
this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law) shall change the basis of taxation of payments to any Bank of the
principal of or interest on any Eurodollar Loan made by such Bank or any fees or
other amounts payable hereunder (other than charges in respect of Taxes, Other
Taxes and taxes imposed on, or measured by, the net income or overall gross
receipts or franchise taxes of such Bank by the national jurisdiction in which
such Bank has its principal office or in which the applicable lending office for
such Eurodollar Loan is located or by any political subdivision or taxing
authority therein, or by any other jurisdiction or by any political subdivision
or taxing authority therein other than a jurisdiction in which such Bank would
not be subject to tax but for
30
the execution and performance of this Agreement), or shall impose, modify or
deem applicable any reserve, special deposit or similar requirement against
assets of, deposits with or for the account of or credit extended by such Bank
(except any such reserve requirement which is reflected in the Adjusted LIBOR
Rate) or shall impose on such Bank or the London interbank market any other
condition affecting this Agreement or the Eurodollar Loans made by such Bank,
and the result of any of the foregoing shall be to increase the cost to such
Bank of making or maintaining any Eurodollar Loan or to reduce the amount of any
sum received or receivable by such Bank hereunder (whether of principal,
interest or otherwise) by an amount deemed by such Bank to be material, then the
Borrower will pay to such Bank in accordance with paragraph (c) below such
additional amount or amounts as will compensate such Bank for such additional
costs incurred or reduction suffered.
(b) If any Bank shall have determined that the adoption or
effectiveness after the date hereof of any law, rule, regulation or guideline
regarding capital adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or any lending office of such
Bank) or any Bank's holding company with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Bank's capital or on the capital of such Bank's holding
company, if any, as a consequence of this Agreement, the Loans made by such Bank
pursuant hereto, such Bank's Commitment hereunder or the issuance of, or
participation in, any Letter of Credit by such Bank to a level below that which
such Bank or such Bank's holding company could have achieved but for such
adoption, change or compliance (taking into account Bank's policies and the
policies of such Bank's holding company with respect to capital adequacy) by an
amount deemed by such Bank to be material (except to the extent that such amount
is reflected in the Adjusted LIBOR Rate), then from time to time the Borrower
shall pay to such Bank such additional amount or amounts as will compensate such
Bank or such Bank's holding company for any such reduction suffered.
(c) A certificate of each Bank setting forth in reasonable detail such
amount or amounts as shall be necessary to compensate such Bank or its holding
company as specified in paragraph (a) or (b) above, as the case may be, shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay each Bank the amount shown as due on any such certificate
delivered to it within 10 days after its receipt of the same. Any Bank receiving
any such payment shall promptly make a refund thereof to the Borrower if the
law, regulation, guideline or change in circumstances giving rise to such
payment is subsequently deemed or held to be invalid or inapplicable.
(d) Failure on the part of any Bank to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of
such Bank's right to demand compensation with respect to such period or any
other period, provided that the Borrower shall not be required to compensate a
--------
Bank pursuant to this Section for any increased costs or reductions incurred
more than 270 days prior to the date that such Bank notifies the Borrower of the
circumstance giving rise to such increased costs or reductions and of such
Bank's intention to claim compensation therefor. The protection of this Section
shall be available to each Bank regardless of any possible
26
contention of the invalidity or inapplicability of the law, rule, regulation,
guideline or other change or condition which shall have occurred or been
imposed.
SECTION 2.16 Change in Legality.
------------------
(a) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, if (x) any change after the date of this Agreement in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration thereof shall make it unlawful for a Bank to
make or maintain a Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to a Eurodollar Loan or (y) at any time any
Bank determines that the making or continuance of any of its Eurodollar Loans
has become impracticable as a result of a contingency occurring after the date
hereof which adversely affects the London interbank market or the position of
such Bank in such market, then, by written notice to the Borrower, such Bank may
(i) declare that Eurodollar Loans will not thereafter be made by such Bank
hereunder, whereupon any request by the Borrower for a Eurodollar Borrowing
shall, as to such Bank only, be deemed a request for an ABR Loan unless such
declaration shall be subsequently withdrawn; and (ii) require that all
outstanding Eurodollar Loans made by it be converted to ABR Loans, in which
event all such Eurodollar Loans shall be automatically converted to ABR Loans as
of the effective date of such notice as provided in paragraph (b) below. In the
event any Bank shall exercise its rights under clause (i) or (ii) of this
paragraph (a), all payments and prepayments of principal which would otherwise
have been applied to repay the Eurodollar Loans that would have been made by
such Bank or the converted Eurodollar Loans of such Bank shall instead be
applied to repay the ABR Loans made by such Bank in lieu of, or resulting from
the conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.16, a notice to the Borrower by any
Bank pursuant to paragraph (a) above shall be effective, if lawful, and if any
Eurodollar Loans shall then be outstanding, on the last day of the then-current
Interest Period, otherwise, such notice shall be effective on the date of
receipt by the Borrower.
SECTION 2.17 Pro Rata Treatment, etc. All payments and repayments of
-----------------------
principal and interest in respect of the Loans (except as provided in Sections
2.06(c), 2.06(d), 2.15 and 2.16) shall be made pro rata among the Banks in
--- ----
accordance with the then outstanding principal amount of the Loans and/or
participations in Letter of Credit Outstandings hereunder and all payments of
Commitment Fees and Letter of Credit Fees (other than those payable to a
Fronting Bank) shall be made pro rata among the Banks in accordance with their
--- ----
Commitments. All payments by the Borrower hereunder shall be (i) net of any tax
applicable to the Borrower or Guarantor and (ii) made in Dollars in immediately
available funds at the office of the Agent by 12:00 noon, Charlotte, North
Carolina time, on the date on which such payment shall be due. Interest in
respect of any Loan hereunder shall accrue from and including the date of such
Loan to but excluding the date on which such Loan is paid in full or converted
to a Loan of a different Type.
SECTION 2.18 Taxes.
-----
(a) Any and all payments by or on account of any obligation of the
Borrower hereunder shall be made free and clear of, and without deduction for,
any Indemnified
27
Taxes or Other Taxes; provided that if the Borrower shall be required to deduct
--------
any Indemnified Taxes or Other Taxes from such payments, then (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) the Agent, Bank or Fronting Bank (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower will indemnify the Agent, each Bank and the Fronting
Bank, within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Agent, such Bank or the Fronting
Bank, as the case may be, on or with respect to any payment by or on account of
any obligation of the Borrower hereunder (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Borrower by a Bank or the Fronting Bank, or by the Agent on its own
behalf or on behalf of a Bank or the Fronting Bank, shall be conclusive absent
manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Agent.
(e) Any Foreign Bank that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement or any other Loan Document shall
deliver to the Borrower (with a copy to the Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Borrower as will
permit such payments to be made without withholding or at a reduced rate.
SECTION 2.19 Certain Fees. The Borrower shall pay to the Agent, for the
------------
respective accounts of the Agent and the Banks, the fees set forth in that
certain fee letter dated February 15, 2002 among the Agent, Wachovia Securities,
Inc. and the Borrower at the times set forth therein.
SECTION 2.20 Commitment Fee. The Borrower shall pay to the Banks a
--------------
commitment fee (the "Commitment Fee") for the period commencing on the Closing
--------------
Date to the Termination Date or the earlier date of termination of the
Commitment, computed (on the basis of the actual number of days elapsed over a
year of 360 days) at the rate of one-half of one percent (1/2%) per annum on the
average daily Unused Total Commitment. Such Commitment
28
Fee, to the extent then accrued, shall be payable (x) monthly, in arrears, on
the last calendar day of each month, (y) on the Termination Date and (z) as
provided in Section 2.10 hereof, upon any reduction or termination in whole or
in part of the Total Commitment.
SECTION 2.21 Letter of Credit Fees. The Borrower shall pay with respect to
---------------------
each Letter of Credit (i) to the Agent on behalf of the Banks a fee calculated
(on the basis of the actual number of days elapsed over a year of 360 days) at
the rate per annum on the daily average Letter of Credit Outstandings equal to
the interest rate spread for Eurodollar Loans pursuant to Section 2.08(b) and
(ii) to the Fronting Bank such Fronting Bank's customary fees for issuance,
amendments and processing referred to in Section 2.03. In addition, the Borrower
agrees to pay each Fronting Bank for its account a fronting fee of one quarter
of one percent (1/4%) per annum in respect of each Letter of Credit issued by
such Fronting Bank, for the period from and including the date of issuance of
such Letter of Credit to and including the date of termination of such Letter of
Credit, and payable quarterly in arrears, to be determined by such Fronting
Bank, the Borrower and the Agent. Accrued fees described in clause (i) of the
first sentence of this paragraph in respect of each Letter of Credit shall be
due and payable monthly in arrears on the last calendar day of each month and on
the Termination Date. Accrued fees described in clause (ii) of the first
sentence of this paragraph in respect of each Letter of Credit shall be payable
at times to be determined by the Fronting Bank, the Borrower and the Agent.
SECTION 2.22 Nature of Fees. All Fees shall be paid on the dates due, in
--------------
immediately available funds, to the Agent for the respective accounts of the
Agent and the Banks, as provided herein and in the fee letter described in
Section 2.19. Once paid, none of the Fees shall be refundable under any
circumstances.
SECTION 2.23 Priority and Liens.
------------------
(a) The Borrower and each of the Guarantors hereby covenants,
represents and warrants that, upon entry of the Interim Order (and the Final
Order, as applicable), the Obligations of the Borrower and the Guarantors
hereunder and under the Loan Documents and in respect of Indebtedness owing to
First Union and its banking Affiliates permitted by Section 6.03(vi): (i)
pursuant to Section 364(c)(1) of the Bankruptcy Code, shall at all times
constitute allowed administrative expense claims in the Cases having priority
over all administrative expenses of the kind specified in Sections 503(b) or
507(b) of the Bankruptcy Code; (ii) pursuant to Section 364(c)(2) of the
Bankruptcy Code, shall at all times be secured by a perfected first priority
Lien on all unencumbered property of the Borrower and the Guarantors' respective
estates in the Cases, including, without limitation, all accounts receivable and
inventory of the Borrower and Guarantors (excluding the Borrower's and the
Guarantors' rights in respect of (x) avoidance actions under the Bankruptcy Code
and proceeds thereof and (y) in excess of 65% of the capital stock of any entity
that is a directly controlled foreign corporation) and on all cash maintained in
the Letter of Credit Account and any direct investments of the funds contained
therein; (iii) pursuant to Section 364(c)(3) of the Bankruptcy Code, shall be
secured by a perfected Lien upon all property of the Borrower and the Guarantors
(other than the property that is subject to existing Liens that presently secure
the obligations of the Borrower and the Guarantors under the Existing Agreement,
as to which the Lien in favor of the Agent and the Banks will be as described in
clause (iv) of this sentence) that is subject to valid, perfected and
non-avoidable Liens in existence on the Filing Date or to valid Liens in
existence on the Filing
29
Date that are perfected subsequent to the Filing Date as permitted by Section
546(b) of the Bankruptcy Code or to Permitted Liens, junior to such valid,
perfected and non-avoidable Liens; and (iv) pursuant to Section 364(d)(1) of the
Bankruptcy Code, shall be secured by a perfected first priority, senior priming
Lien on all of the tangible and intangible property of the Borrower and the
Guarantors (including without limitation, accounts receivable, inventory,
patents, copyrights, trademarks, tradenames and all other intellectual property,
and the capital stock of all direct subsidiaries of the Borrower and each
Guarantor and the proceeds thereof) that is subject to existing Liens that
presently secure the Borrower's and the Guarantors' pre-petition Indebtedness
under the Existing Agreement (but subject to any outstanding liens at the time
of the commencement of the Cases that were permitted under the Existing Credit
Agreement, as permitted by Section 546(b) of the Bankruptcy Code) and any Liens
granted after the Filing Date to provide adequate protection in respect of the
Existing Agreement, senior to all of such Liens, provided, however, that the
-------- -------
Borrower and the Guarantors shall not be required to pledge to the Agent in
excess of 65% of the capital stock of any entity that is a directly controlled
foreign corporation; subject only to (x) in the event of the occurrence and
during the continuance of an Event of Default or an event that would constitute
an Event of Default with the giving of notice or lapse of time or both, the
payment of allowed and unpaid professional fees and disbursements incurred by
the Borrower, the Guarantors and any statutory committees appointed in the Cases
in an aggregate amount not in excess of $3,000,000 (plus all unpaid professional
fees and disbursements incurred prior to the occurrence of an Event of Default
or an event that would constitute an Event of Default with the giving of notice
or lapse of time or both and reflected on the most recent Borrowing Base
Certificate delivered to the Agent to the extent allowed by the Bankruptcy Court
at any time) and (y) the payment of unpaid fees pursuant to 28 U.S.C. ss. 1930
and to the Clerk of the Bankruptcy Court (collectively, the "Carve-Out"),
---- ---
provided that, except as otherwise provided in the Orders, no portion of the
--------
Carve-Out shall be utilized for the payment of professional fees and
disbursements incurred in connection with any challenge to the amount, extent,
priority, validity, perfection or enforcement of the indebtedness of the
Borrower and the Guarantors owing to the Existing Lenders or the Banks or to the
collateral securing such indebtedness. The Banks agree that so long as no Event
of Default or event which with the giving of notice or lapse of time or both
would constitute an Event of Default shall have occurred, the Borrower and the
Guarantors shall be permitted to pay compensation and reimbursement of expenses
allowed and payable under 11 U.S.C. (S)(S) 328, 330 and 331, as the same may be
due and payable, and the same shall not reduce the Carve-Out.
(b) Subject to the priorities set forth in subsection (a) above and to the
Carve-Out, as to all real property the title to which is held by the Borrower or
any of the Guarantors, or the possession of which is held by the Borrower or any
of the Guarantors pursuant to leasehold interests and which secures the
obligations under the Existing Agreement, the Borrower and each Guarantor hereby
assigns and conveys as security, grants a security interest in, hypothecates,
mortgages, pledges and sets over unto the Agent on behalf of the Banks all of
the right, title and interest of the Borrower and such Guarantor in all of such
owned real property and in all such leasehold interests, together in each case
with all of the right, title and interest of the Borrower and such Guarantor in
and to all buildings, improvements, and fixtures related thereto, any lease or
sublease thereof, all general intangibles relating thereto and all proceeds
thereof. The Borrower and each Guarantor acknowledges that, pursuant to the
Orders, the Liens in favor of the Agent on behalf of the Banks in all of such
real property and leasehold instruments shall be perfected without the
recordation of any instruments of mortgage or assignment. The Borrower
30
and each Guarantor further agree that, upon the request of the Agent, the
Borrower and such Guarantor shall enter into separate fee and leasehold
mortgages in recordable form with respect to such properties on terms reasonably
satisfactory to the Agent.
SECTION 2.24 Right of Set-Off. Subject to the provisions of Section 7.01,
----------------
upon the occurrence and during the continuance of any Event of Default, the
Agent and each Bank is hereby authorized at any time and from time to time, to
the fullest extent permitted by law and without further order of or application
to the Bankruptcy Court, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Agent and each such Bank to or for the
credit or the account of the Borrower or any Guarantor against any and all of
the obligations of such Borrower or Guarantor now or hereafter existing under
the Loan Documents, irrespective of whether or not such Bank shall have made any
demand under any Loan Document and although such obligations may not have been
accelerated. Each Bank and the Agent agrees promptly to notify the Borrower and
Guarantors after any such set-off and application made by such Bank or by the
Agent, as the case may be, provided that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of each Bank
and the Agent under this Section are in addition to other rights and remedies
which such Bank and the Agent may have upon the occurrence and during the
continuance of any Event of Default.
SECTION 2.25 Security Interest in Letter of Credit Account. Pursuant to
---------------------------------------------
Section 364(c)(2) of the Bankruptcy Code, the Borrower and the Guarantors hereby
assign and pledge to the Agent, for its benefit and for the ratable benefit of
the Banks, and hereby grant to the Agent, for its benefit and for the ratable
benefit of the Banks, a first priority security interest, senior to all other
Liens, if any, in all of the Borrower's and the Guarantors' right, title and
interest in and to the Letter of Credit Account and any direct investment of the
funds contained therein. Cash held in the Letter of Credit Account shall not be
available for use by the Borrower, whether pursuant to Section 363 of the
Bankruptcy Code or otherwise and shall be released to the Borrower as described
in clause (ii)(y) of Section 2.03(b).
SECTION 2.26 Payment of Obligations. Subject to the provisions of Section
----------------------
7.01, upon the maturity (whether by acceleration or otherwise) of any of the
Obligations under this Agreement or any of the other Loan Documents of the
Borrower and the Guarantors, the Banks shall be entitled to immediate payment of
such Obligations without further application to or order of the Bankruptcy
Court.
SECTION 2.27 No Discharge; Survival of Claims. Each of the Borrower and the
--------------------------------
Guarantors agrees that (i) its obligations hereunder shall not be discharged by
the entry of an order confirming a Reorganization Plan (and each of the Borrower
and the Guarantors, pursuant to Section 1141(d)(4) of the Bankruptcy Code,
hereby waives any such discharge) and (ii) the Superpriority Claim granted to
the Agent and the Banks pursuant to the Orders and described in Section 2.23 and
the Liens granted to the Agent pursuant to the Orders and described in Sections
2.23 and 2.25 shall not be affected in any manner by the entry of an order
confirming a Reorganization Plan.
SECTION 2.28 Use of Cash Collateral. Notwithstanding anything to the
----------------------
contrary contained herein, the Borrower shall not be permitted (i) to request a
Borrowing under Section
31
2.06 or request the issuance of a Letter of Credit under Section 2.04 unless the
Bankruptcy Court shall have entered the Interim Order or (ii) to request a
Borrowing under Section 2.06 unless the Borrower and the Guarantors shall at
that time have the use of all cash collateral subject to the Orders for the
purposes described in Section 3.09.
SECTION 2.29 Replacement of Certain Banks. In the event a Bank ("Affected
---------------------------- --------
Lender") shall have (i) failed to fund its Commitment Percentage of any Loan
------
requested by the Borrower or to fund its Commitment Percentage of any
unreimbursed payment made by the Fronting Bank, which such Bank is obligated to
fund under the terms of this Agreement and which failure has not been cured,
(ii) requested compensation from the Borrower under Section 2.15 with respect to
increased costs or capital or under Section 2.18 to recover Taxes, Other Taxes
or other additional costs incurred by such Bank which, in any case, are not
being incurred generally by the other Banks, or (iii) delivered a notice
pursuant to Section 2.16 claiming that such Bank is unable to extend Eurodollar
Loans to the Borrower or the Guarantors for reasons not generally applicable to
the other Banks, then, in any case, the Borrower or the Agent may make written
demand on such Affected Lender (with a copy to the Agent in the case of a demand
by the Borrower and a copy to the Borrower in the case of a demand by the Agent)
for the Affected Lender to assign, and such Affected Lender shall use
commercially reasonable efforts to assign pursuant to one or more duly executed
Assignments and Acceptances five (5) Business Days after the date of such
demand, to one or more financial institutions that comply with the provisions of
Section 10.03 which the Borrower or the Agent, as the case may be, shall have
engaged for such purpose ("Replacement Lender"), all of such Affected Lender's
------------------
rights and obligations under this Agreement and the other Loan Documents
(including, without limitation, its Commitment, all Loans owing to it, all of
its participation interests in existing Letters of Credit, and its obligations
to participate in additional Letters of Credit hereunder) in accordance with
Section 10.03. The Agent agrees, upon the occurrence of such events with respect
to an Affected Lender and upon the written request of the Borrower, to use its
reasonable efforts to obtain the commitments from one or more financial
institutions to act as a Replacement Lender. Further, with respect to such
assignment the Affected Lender shall have concurrently received, in cash, all
amounts due and owing to the Affected Lender hereunder or under any other Loan
Document, including, without limitation, the aggregate outstanding principal
amount of the Loans owed to such Bank, together with accrued interest thereon
through the date of such assignment, amounts payable under Section 2.15 with
respect to such Affected Lender and compensation payable under Section 2.20 in
the event of any replacement of any Affected Lender under clause (ii) or clause
(iii) of this Section 2.29; provided that upon such Affected Lender's
replacement, such Affected Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 2.15, 10.05 and 10.06, as
well as to any fees accrued for its account hereunder and not yet paid, and
shall continue to be obligated under Section 8.06 with respect to losses,
obligations, liabilities, damages, penalties, actions, judgments, costs,
expenses or disbursements for matters which occurred prior to the date the
Affected Lender is replaced.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to make Loans and issue and/or
participate in Letters of Credit hereunder, the Borrower and each of the
Guarantors jointly and severally represent and warrant as follows:
32
SECTION 3.01 Organization and Authority. Each of the Borrower and the
--------------------------
Guarantors (i) is a corporation duly organized and validly existing under the
laws of the State of its organization and is duly qualified to do business and
is in good standing in each jurisdiction in which the failure to so qualify
would have a material adverse effect on the financial condition, operations,
business, properties, assets or prospects of the Borrower and the Guarantors
taken as a whole; (ii) subject to the entry by the Bankruptcy Court of the
Interim Order (or the Final Order, when applicable) has the requisite corporate
or company, as the case may be, power and authority to effect the transactions
contemplated hereby, and by the other Loan Documents to which it is a party, and
(iii) subject to the entry by the Bankruptcy Court of the Interim Order (or the
Final Order, when applicable) has all requisite corporate or company, as the
case may be, power and authority and the legal right to own, pledge, mortgage
and operate its properties, and to conduct its business as now or currently
proposed to be conducted.
SECTION 3.02 Due Execution. Upon the entry by the Bankruptcy Court of the
-------------
Interim Order (or the Final Order, when applicable), the execution, delivery and
performance by each of the Borrower and the Guarantors of each of the Loan
Documents to which it is a party (i) are within the respective corporate powers
of each of the Borrower and the Guarantors, have been duly authorized by all
necessary company or corporate (as applicable) action including the consent of
shareholders or members where required, and do not (A) contravene the charter or
by-laws, limited liability company agreement or any other organizational
document of any of the Borrower or the Guarantors, (B) violate any law
(including, without limitation, the Securities Exchange Act of 1934) or
regulation (including, without limitation, Regulations T, U or X of the Board of
Governors of the Federal Reserve System), or any order or decree of any court or
Governmental Authority, (C) conflict with or result in a breach of, or
constitute a default under, any material indenture, mortgage or deed of trust
entered into after the Filing Date or any material lease, agreement or other
instrument entered into after the Filing Date binding on the Borrower or the
Guarantors or any of their properties, or (D) result in or require the creation
or imposition of any Lien upon any of the property of any of the Borrower or the
Guarantors other than the Liens granted pursuant to this Agreement, the other
Loan Documents or the Orders; and (ii) do not require the consent, authorization
by or approval of or notice to or filing or registration with any Governmental
Authority other than the entry of the Orders. Upon the entry by the Bankruptcy
Court of the Interim Order (or the Final Order, when applicable), this Agreement
has been duly executed and delivered by each of the Borrower and the Guarantors.
This Agreement is, and each of the other Loan Documents to which the Borrower
and each of the Guarantors is or will be a party, when delivered hereunder or
thereunder, will be, a legal, valid and binding obligation of the Borrower and
each Guarantor, as the case may be, enforceable against the Borrower and the
Guarantors, as the case may be, in accordance with its terms and the Orders.
SECTION 3.03 Statements Made. The information that has been delivered in
---------------
writing by the Borrower or any of the Guarantors to the Agent or to the
Bankruptcy Court in connection with any Loan Document, and any financial
statement delivered pursuant hereto or thereto (other than to the extent that
any such statements constitute projections), taken as a whole and in light of
the circumstances in which made, contains no untrue statement of a material fact
and does not omit to state a material fact necessary to make such statements not
misleading; and, to the extent that any such information constitutes
projections, such projections were prepared in good faith on the basis of
assumptions, methods, data, tests and information believed by the Borrower or
such Guarantor to be reasonable at the time such projections were furnished.
33
SECTION 3.04 Financial Statements. The Borrower has furnished the Banks
--------------------
with copies of the audited consolidated financial statements and schedules of
the Borrower for the fiscal years ended September 29, 2001 and the fiscal
quarter ended December 31, 2001. Such financial statements present fairly the
financial condition and results of operations of the Borrower and the Guarantors
on a consolidated basis as of such date and for such period; such balance sheets
and the notes thereto disclose all liabilities, direct or contingent, of the
Borrower and the Guarantors as of the dates thereof required to be disclosed by
GAAP and such financial statements were prepared in a manner consistent with
GAAP. No material adverse change in the operations, business, properties,
assets, prospects or condition (financial or otherwise) of the Borrower and the
Guarantors, taken as a whole, has occurred from that set forth in the Borrower's
consolidated financial statements for the fiscal year ended September 29, 2001
and the fiscal quarter ended December 31, 2001 other than those which
customarily occur as a result of events leading up to and following the
commencement of a proceeding under Chapter 11 of the Bankruptcy Code and the
commencement of the Cases (including, without limitation, those reflected in the
financial projections heretofore made available to the Agent).
SECTION 3.05 Ownership. Other than as set forth on Schedule 3.05, (i) each
---------
of the Persons listed on Schedule 3.05 is a wholly-owned, direct or indirect
Subsidiary of the Borrower, and (ii) the Borrower owns no other Subsidiaries,
whether directly or indirectly. Each of the Borrower's domestic Subsidiaries is
a Guarantor.
SECTION 3.06 Liens. Except for Liens existing on the Filing Date as
-----
reflected on Schedule 3.06, there are no Liens of any nature whatsoever on any
assets of the Borrower or any of the Guarantors other than: (i) Liens granted
pursuant to the Existing Agreement; (ii) Permitted Liens; (iii) other Liens
permitted pursuant to Section 6.01; and (iv) Liens in favor of the Agent and the
Banks. Neither the Borrower nor the Guarantors are parties to any contract,
agreement, lease or instrument the performance of which, either unconditionally
or upon the happening of an event, will result in or require the creation of a
Lien on any assets of the Borrower or any Guarantor or otherwise result in a
violation of this Agreement other than the Liens granted to the Agent and the
Banks as provided for in this Agreement.
SECTION 3.07 Compliance with Law.
-------------------
(a) Other than as set forth on Schedule 3.07 and except for matters
which would not reasonably be expected to have a material adverse effect on the
financial condition, operations, business, properties, assets or prospects of
the Borrower and the Guarantors taken as a whole (i) the operations of the
Borrower and the Guarantors comply in all material respects with all applicable
environmental, health and safety statutes and regulations, including, without
limitation, regulations promulgated under the Resource Conservation and Recovery
Act (42 U.S.C. (S) 6901 et seq.); (ii) to the Borrower's and each of the
-- ---
Guarantor's knowledge, none of the operations of the Borrower or the Guarantors
is the subject of any Federal or state investigation evaluating whether any
remedial action involving a material expenditure by the Borrower or any
Guarantor is needed to respond to a release of any Hazardous Waste or Hazardous
Substance (as such terms are defined in any applicable state or Federal
environmental law or regulations) into the environment; and (iii) to the
Borrower's and each of the Guarantor's knowledge, the Borrower and the
Guarantors do not have any material contingent liability in connection with any
release of any Hazardous Waste or Hazardous Substance into the environment.
34
(b) Neither the Borrower nor any Guarantor is, to the best of its
knowledge, in violation of any law, rule or regulation, or in default with
respect to any judgment, writ, injunction or decree of any Governmental
Authority the violation of which, or a default with respect to which, would have
a material adverse effect on the financial condition, operations, business,
properties, assets or prospects of the Borrower and the Guarantors taken as a
whole.
SECTION 3.08 Insurance. All policies of insurance of any kind or nature
---------
owned by or issued to the Borrower and the Guarantors, including, without
limitation, policies of life, fire, theft, product liability, public liability,
property damage, other casualty, employee fidelity, workers' compensation,
employee health and welfare, title, property and liability insurance, are in
full force and effect and are of a nature and provide such coverage as is
customarily carried by companies of the size and character of the Borrower and
the Guarantors.
SECTION 3.09 Use of Proceeds. The proceeds of the Loans shall be used for
---------------
working capital purposes of the Borrower and the Guarantors.
SECTION 3.10 Litigation. Other than as set forth on Schedule 3.10, there
----------
are no unstayed actions, suits or proceedings pending or, to the knowledge of
the Borrower or the Guarantors, threatened against or affecting the Borrower or
the Guarantors or any of their respective properties, before any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which is reasonably likely to be determined adversely to
the Borrower or the Guarantors and, if so determined adversely to the Borrower
or the Guarantors would have a material adverse effect on the financial
condition, business, properties, prospects, operations or assets of the Borrower
and the Guarantors, taken as a whole.
SECTION 4. CONDITIONS OF LENDING
SECTION 4.01 Conditions Precedent to Initial Loans and Initial Letters of
------------------------------------------------------------
Credit. The obligation of the Banks to make the initial Loans or the Fronting
------
Bank to issue the initial Letter of Credit, whichever may occur first, is
subject to the following conditions precedent:
(a) Supporting Documents. The Agent shall have received for each
--------------------
of the Borrower and the Guarantors:
(i) a copy of such entity's organizational documents, as
amended, certified as of a recent date by the Secretary of State of the state of
its incorporation;
(ii) a certificate of such Secretary of State, dated as of a
recent date, as to the good standing of and payment of taxes by that entity and
as to the charter documents on file in the office of such Secretary of State;
and
(iii) a certificate of the Secretary or an Assistant Secretary
of that entity dated the date of the initial Loans or the initial Letter of
Credit hereunder, whichever first occurs, and certifying (A) that attached
thereto is a true and complete copy of the by-laws of that entity as in effect
on the date of such certification, (B) that attached thereto is a true and
complete copy of resolutions or other authorization documents adopted by the
appropriate Person or Persons of such entity authorizing the Borrowings and
Letter of Credit extensions hereunder, the Guaranty hereunder, the execution,
delivery and performance in accordance with their respective terms of
35
this Agreement, the Loan Documents and any other documents required or
contemplated hereunder or thereunder and the granting of the security interest
in the Letter of Credit Account and other Liens contemplated hereby, (C) that
the certificate of incorporation of that entity has not been amended since the
date of the last amendment thereto indicated on the certificate of the Secretary
of State furnished pursuant to clause (i) above and (D) as to the incumbency and
specimen signature of each officer of that entity executing this Agreement and
the Loan Documents or any other document delivered by it in connection herewith
or therewith (such certificate to contain a certification by another officer of
that entity as to the incumbency and signature of the officer signing the
certificate referred to in this clause (iii)).
(b) Interim Order. At the time of the making of the initial Loans or
-------------
at the time of the issuance of the initial Letters of Credit, whichever first
occurs, the Agent and the Banks shall have received a certified copy of an order
of the Bankruptcy Court in substantially the form of Exhibit A (the "Interim
-------
Order") approving the Loan Documents and granting the Superpriority Claim status
-----
and senior priming and other Liens described in Section 2.23 which Interim Order
(i) shall have been entered, with the consent or non-objection of a
preponderance (as determined by the Agent) of the Existing Lenders, upon an
application or motion of the Borrower reasonably satisfactory in form and
substance to the Agent, on such prior notice to such parties (including the
Existing Lenders) as may in each case be reasonably satisfactory to the Agent,
(ii) shall authorize extensions of credit in amounts satisfactory to the Agent,
(iii) shall approve the payment by the Borrower of all of the Fees referred to
in Section 2.19, (iv) shall be in full force and effect, (v) shall have
authorized the use by the Borrower and the Guarantors of any cash collateral in
which any Existing Lender under the Existing Agreement may have an interest and
shall have provided, as adequate protection for the use of such cash collateral
and the priming contemplated hereby, for (A) the monthly payment of current
interest and letter of credit fees (including the payment on the Closing Date of
any such interest and fees that are accrued and unpaid as of the Filing Date) at
the applicable non-default rates (including LIBOR pricing options) provided for
pursuant to the Existing Agreement (the payments described in this clause to be
without prejudice to the rights of any Existing Lender to assert a claim for the
payment of additional interest and letters of credit fees calculated at any
other applicable rates of interest (including, without limitation, at any
default rates), or on any other basis, set forth in the Existing Agreement or to
the rights of the Borrower to contest such assertion), (B) a superpriority claim
as contemplated by Section 507(b) of the Bankruptcy Code immediately junior to
the claims under Section 364(c)(1) of the Bankruptcy Code held by the Agent and
the Banks (without the requirement to file any motion or pleading or to make any
demand), (C) a Lien on substantially all of the assets of the Borrower and the
Guarantors in favor of the Pre-Petition Agent having a priority immediately
junior to the priming and other Liens granted in favor of the Agent and the
Banks hereunder and under the other Loan Documents, (D) the payment on a current
basis of the reasonable fees and disbursements of respective professionals
(including, but not limited to, the reasonable fees and disbursements of counsel
and internal and third-party consultants, including financial consultants, and
auditors) for the Pre-Petition Agent (including the payment on the Closing Date
or as soon thereafter as is practicable of any unpaid pre-petition fees and
expenses) and the continuation of the payment to the Pre-Petition Agent on a
current basis of the administration fees that are provided for under the
Existing Agreement, (E) the receipt of all financial statements and other
reports that are furnished to the Banks and such other protection as agreed
between the Borrower, the Guarantors and the Existing Lenders, (F) the payment
for the application to the obligations of the Borrower under the Existing
Agreement of 100% of the
36
repatriated funds received from foreign subsidiaries to the extent such funds
are not required to be applied to satisfy the Borrower's Obligations hereunder,
and (G) shall not have been vacated, stayed, reversed, modified or amended in
any respect; and, if the Interim Order is the subject of a pending appeal in any
respect, neither the making of such Loans nor the issuance of such Letter of
Credit nor the performance by the Borrower or any of the Guarantors of any of
their respective obligations hereunder or under the Loan Documents or under any
other instrument or agreement referred to herein shall be the subject of a
presently effective stay pending appeal.
(c) Security and Pledge Agreement. The Borrower and each of the
-----------------------------
Guarantors shall have duly executed and delivered to the Agent a Security and
Pledge Agreement in substantially the form of Exhibit B (the "Security and
------------
Pledge Agreement").
----------------
(d) First Day Orders. All of the "first day orders" entered by the
----------------
Bankruptcy Court at the time of the commencement of the Cases shall be
reasonably satisfactory in form and substance to the Agent.
(e) Opinion of Counsel. The Agent and the Banks shall have received
------------------
the favorable written opinion of counsel to the Borrower and the Guarantors
reasonably acceptable to the Agent, dated the date of the initial Loans or the
issuance of the initial Letter of Credit, whichever first occurs, substantially
in the form of Exhibit C.
(f) Payment of Fees. The Borrower shall have paid to the Agent the
---------------
then unpaid balance of all accrued and unpaid Fees due under and pursuant to
this Agreement and the letter referred to in Section 2.19.
(g) Corporate and Judicial Proceedings. All corporate and judicial
----------------------------------
proceedings and all instruments and agreements in connection with the
transactions among the Borrower, the Guarantors, the Agent and the Banks
contemplated by this Agreement shall be reasonably satisfactory in form and
substance to the Agent, and the Agent shall have received all information and
copies of all documents and papers, including records of corporate and judicial
proceedings, which the Agent may have reasonably requested in connection
therewith, such documents and papers where appropriate to be certified by proper
corporate, governmental or judicial authorities.
(h) Information. The Agent shall have received such information
-----------
(financial or otherwise) as may be reasonably requested by the Agent and shall
have discussed the Borrower's business plan heretofore delivered to the Agent
with the Borrower's management and shall be satisfied with the nature and
substance of such discussions.
(i) Business Plan. The Agent shall have received from the Borrower the
-------------
Borrower's business plans, consolidated and by division, for the period ending
on the Maturity Date and such business plans shall be satisfactory in form and
substance to the Agent.
(j) Compliance with Laws. The Borrower and the Guarantors shall have
--------------------
granted the Agent access to and the right to inspect all reports, audits and
other internal information of the Borrower and the Guarantors relating to
environmental matters, and any third party verification of certain matters
relating to compliance with environmental laws and regulations requested by the
Agent, and the Agent shall be reasonably satisfied that the Borrower
37
and the Guarantors are in compliance in all material respects with all
applicable environmental laws and regulations and the Borrower has made adequate
provision for the costs of maintaining such compliance.
(k) Closing Documents. The Agent shall have received all documents
-----------------
required by Section 4.01 reasonably satisfactory in form and substance to the
Agent.
SECTION 4.02 Conditions Precedent to Each Loan and Each Letter of Credit.
-----------------------------------------------------------
The obligation of the Banks to make each Loan and of the Fronting Bank to issue
each Letter of Credit, including the initial Loan and the initial Letter of
Credit, is subject to the following conditions precedent:
(a) Notice. The Agent shall have received a notice with respect to
------
such borrowing or issuance, as the case may be, as required by Section 2.
(b) Representations and Warranties. All representations and warranties
------------------------------
contained in this Agreement and the other Loan Documents shall be true and
correct in all material respects on and as of the date of each Borrowing or the
issuance of each Letter of Credit hereunder with the same effect as if made on
and as of such date except to the extent such representations and warranties
expressly relate to an earlier date.
(c) No Default. On the date of each Borrowing hereunder or the
----------
issuance of each Letter of Credit, no Event of Default or event which upon
notice or lapse of time or both would constitute an Event of Default shall have
occurred and be continuing.
(d) Orders. The Interim Order shall be in full force and effect and
------
shall not have been stayed, reversed, modified or amended in any respect without
the prior written consent of the Agent, the Required Banks and the Pre-Petition
Agent, provided, that at the time of the making of any Loan or the issuance of
--------
any Letter of Credit the aggregate amount of either of which, when added to the
sum of the principal amount of all Loans then outstanding and the Letter of
Credit Outstandings, would exceed the amount authorized by the Interim Order
(collectively, the "Additional Credit"), the Agent and each of the Banks shall
-----------------
have received a certified copy of an order of the Bankruptcy Court in
substantially the form of the Interim Order (with only such modifications
thereto as are satisfactory in form and substance to the Agent) (the "Final
-----
Order") which, in any event, shall have been entered by the Bankruptcy Court no
-----
later than thirty (30) days after the entry of the Interim Order and at the time
of the extension of any Additional Credit the Final Order shall be in full force
and effect, and shall not have been vacated, stayed, reversed, modified or
amended in any respect without the prior written consent of the Agent, and the
Required Banks and the Pre-Petition Agent; and if either the Interim Order or
the Final Order is the subject of a pending appeal in any respect, neither the
making of the Loans nor the issuance of any Letter of Credit nor the performance
by the Borrower or any Guarantor of any of their respective obligations under
any of the Loan Documents shall be the subject of a presently effective stay
pending appeal.
(e) Payment of Fees. The Borrower shall have paid to the Agent and the
---------------
Pre-Petition Agent the then unpaid balance of all accrued and unpaid Fees then
payable under and pursuant to this Agreement, the Orders and the letter referred
to in Section 2.19.
38
(f) Borrowing Base Certificate. From and after the execution and
--------------------------
delivery of the Borrowing Base Amendment, the Agent shall have received the
timely delivery of the most recent Borrowing Base Certificate (dated no more
than seven (7) days prior to the making of a Loan or the issuance of a Letter of
Credit) required to be delivered hereunder.
The request by the Borrower for, and the acceptance by the Borrower of, each
extension of credit hereunder shall be deemed to be a representation and
warranty by the Borrower that the conditions specified in this Section have been
satisfied or waived at that time.
SECTION 5. AFFIRMATIVE COVENANTS
From the date hereof and for so long as any Commitment shall be in
effect or any Letter of Credit shall remain outstanding (in a face amount in
excess of the amount of cash then held in the Letter of Credit Account, or in
excess of the face amount of back-to-back letters of credit delivered, in each
case pursuant to Section 2.03(b)), or any amount shall remain outstanding or
unpaid under this Agreement, the Borrower and each of the Guarantors agree that,
unless the Required Banks shall otherwise consent in writing, the Borrower and
each of the Guarantors will:
SECTION 5.01 Financial Statements, Reports, etc. In the case of the
----------------------------------
Borrower and the Guarantors, deliver to the Agent and each of the Banks:
(a) within 90 days after the end of each fiscal year, the Borrower's
consolidated and consolidating balance sheets and related statements of income
and cash flows, showing the financial condition of (i) the Borrower and the
Guarantors and (ii) the Borrower and its Subsidiaries, each on a consolidated
and consolidating basis as of the close of such fiscal year and the results of
their respective operations during such year, such consolidated statements of
the Borrower to be audited according to generally acceptable auditing standards
by ▇▇▇▇▇ & ▇▇▇▇▇ or other independent public accountants of recognized national
standing and accompanied by an opinion of such accountants (which shall not be
qualified in any material respect other than with respect to the Cases or a
going concern qualification) and to be certified by a Financial Officer of the
Borrower to the effect that such consolidated and consolidating financial
statements fairly present the financial condition and results of operations of
the Borrower and the Guarantors on a consolidated and consolidating basis in
accordance with GAAP;
(b) within 45 days after the end of each of the first three fiscal
quarters, the Borrower's consolidated and consolidating balance sheets and
related statements of income and cash flows, showing the financial condition of
(i) the Borrower and the Guarantors and (ii) the Borrower and its Subsidiaries,
each on a consolidated and consolidating basis as of the close of such fiscal
quarter and the results of their operations during such fiscal quarter and the
then elapsed portion of the fiscal year, each certified by a Financial Officer
as fairly presenting the financial condition and results of operations of the
Borrower and its Subsidiaries on a consolidated and consolidating basis in
accordance with GAAP, subject to normal year-end audit adjustments;
39
(c) commencing with the first fiscal month following the Closing Date,
as soon as practicable, but in no event later than 45 days after the end of each
fiscal month of the Borrower (i) consolidated and consolidating monthly
unaudited balance sheets and related statements of earnings and cash flows of
(A) the Borrower and the Guarantors and (B) the Borrower and its Subsidiaries
for the prior fiscal month, each certified by a Financial Officer of the
Borrower and (ii) a monthly report detailing professional fees and expenses that
have been billed and paid or billed but unpaid to date, the accumulated
"hold-back" of professional fees and expenses to date, material adverse events
or changes (if any) and material litigation (if any);
(d) (i) concurrently with any delivery of financial statements under
(a) and (b) above, a certificate of a Financial Officer certifying such
statements (A) certifying that no Event of Default or event which upon notice or
lapse of time or both would constitute an Event of Default has occurred, or, if
such an Event of Default or event has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with respect
thereto and (B) setting forth computations in reasonable detail satisfactory to
the Agent demonstrating compliance with the provisions of Sections 6.04 and 6.05
and (ii) concurrently with any delivery of financial statements under (a) above,
a certificate (which certificate may be limited to accounting matters and
disclaim responsibility for legal interpretations) of the accountants auditing
the consolidated financial statements delivered under (a) above certifying that,
in the course of the regular audit of the business of the Borrower and its
Subsidiaries, such accountants have obtained no knowledge that an Event of
Default has occurred and is continuing, or if, in the opinion of such
accountants, an Event of Default has occurred and is continuing, specifying the
nature thereof and all relevant facts with respect thereto;
(e) concurrently with any delivery of financial statements under (c)
above, monthly financial projections for the Borrower and the Guarantors for the
following monthly period in the event that there has been a material variance
from the financial projections provided to the Agent for the period reported in
such financial statements;
(f) as soon as possible, and in any event within 45 days of the
Closing Date, a consolidated pro forma balance sheet of the Borrower's and the
--- -----
Guarantors' financial condition as of the Filing Date;
(g) not later than 5:00 p.m. Charlotte, North Carolina time on the
first Friday following the Filing Date and on each Friday thereafter, the
Borrower's and Guarantor's forecast of cash receipts and disbursements for the
ensuing 13-week period together with a reconciliation of such cash flows to
actual results;
(h) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by it
with the Securities and Exchange Commission, or any governmental authority
succeeding to any of or all the functions of said commission, or with any
national securities exchange, as the case may be;
(i) as soon as available and in any event (A) within 30 days after the
Borrower or any of its ERISA Affiliates knows or has reason to know that any
Termination Event described in clause (i) of the definition of Termination Event
with respect to any Single Employer Plan of the Borrower or such ERISA Affiliate
has occurred and (B) within 10 days
40
after the Borrower or any of its ERISA Affiliates knows or has reason to know
that any other Termination Event with respect to any such Plan has occurred, a
statement of a Financial Officer of the Borrower describing the full details of
such Termination Event and the action, if any, which the Borrower or such ERISA
Affiliate is required or proposes to take with respect thereto, together with
any notices required or proposed to be given to or filed with or by the
Borrower, the ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto;
(j) promptly and in any event within 10 days after receipt thereof by
the Borrower or any of its ERISA Affiliates from the PBGC copies of each notice
received by the Borrower or any such ERISA Affiliate of the PBGC's intention to
terminate any Single Employer Plan of the Borrower or such ERISA Affiliate or to
have a trustee appointed to administer any such Plan;
(k) if requested by the Agent, promptly and in any event within 30 days
after the filing thereof with the Internal Revenue Service, copies of each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Single Employer Plan of the Borrower or any of its ERISA
Affiliates;
(l) within 10 days after notice is given or required to be given to the
PBGC under Section 302(f)(4)(A) of ERISA of the failure of the Borrower or any
of its ERISA Affiliates to make timely payments to a Plan, a copy of any such
notice filed and a statement of a Financial Officer of the Borrower setting
forth (A) sufficient information necessary to determine the amount of the lien
under Section 302(f)(3), (B) the reason for the failure to make the required
payments and (C) the action, if any, which the Borrower or any of its ERISA
Affiliates proposed to take with respect thereto;
(m) promptly and in any event within 10 days after receipt thereof by
the Borrower or any ERISA Affiliate from a Multiemployer Plan sponsor, a copy of
each notice received by the Borrower or any ERISA Affiliate concerning (A) the
imposition of Withdrawal Liability by a Multiemployer Plan, (B) the
determination that a Multiemployer Plan is, or is expected to be, in
reorganization within the meaning of Title IV of ERISA, (C) the termination of a
Multiemployer Plan within the meaning of Title IV of ERISA, or (D) the amount of
liability incurred, or which may be incurred, by the Borrower or any ERISA
Affiliate in connection with any event described in clause (A), (B) or (C)
above;
(n) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Borrower or any
Guarantor, or compliance with the terms of any material loan or financing
agreements as the Agent, at the request of any Bank, may reasonably request; and
(o) furnish to the Agent and its counsel promptly after the same is
available, copies of all pleadings, motions, applications, judicial information,
financial information and other documents filed by or on behalf of the Borrower
or any of the Guarantors with the Bankruptcy Court in the Cases, or distributed
by or on behalf of the Borrower or any of the Guarantors to any official
committee appointed in the Cases.
41
SECTION 5.02 Corporate Existence. Preserve and maintain in full force
-------------------
and effect all governmental rights, privileges, qualifications, permits,
licenses and franchises necessary or desirable in the normal conduct of its
business except (i)(A) if in the reasonable business judgment of the Borrower or
its subsidiary, as the case may be, it is in its best economic interest not to
preserve and maintain such rights, privileges, qualifications, permits, licenses
and franchises, and (B) such failure to preserve the same could not, in the
aggregate, reasonably be expected to have a material adverse effect on the
operations, business, properties, assets, prospects or condition (financial or
otherwise) of the Borrower and the Guarantors, taken as a whole, and (ii) as
otherwise permitted in connection with sales of assets permitted by Section
6.11.
SECTION 5.03 Insurance. (a) Keep its insurable properties insured at
---------
all times, against such risks, including fire and other risks insured against by
extended coverage, as is customary with companies of the same or similar size in
the same or similar businesses; and maintain in full force and effect public
liability insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by the Borrower or any Guarantor, as the case may
be, in such amounts (giving effect to self-insurance) and with such deductibles
as are customary with companies of the same or similar size in the same or
similar businesses and in the same geographic area; and (b) maintain such other
insurance or self insurance as may be required by law.
SECTION 5.04 Obligations and Taxes. With respect to the Borrower and
---------------------
each Guarantor, pay all its material obligations arising after the Filing Date
promptly and in accordance with their terms and pay and discharge promptly all
material taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits or in respect of its property arising after the
Filing Date, before the same shall become in default, as well as all material
lawful claims for labor, materials and supplies or otherwise arising after the
Filing Date which, if unpaid, would become a Lien or charge upon such properties
or any part thereof; provided, however, that the Borrower and each Guarantor
shall not be required to pay and discharge or to cause to be paid and discharged
any such obligation, tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings (if the Borrower and the Guarantors shall have set aside on their
books adequate reserves therefor).
SECTION 5.05 Notice of Event of Default, etc. Promptly give to the
-------------------------------
Agent notice in writing of any Event of Default or the occurrence of any event
or circumstance which with the passage of time or giving of notice or both would
constitute an Event of Default.
SECTION 5.06 Access to Books and Records. Maintain or cause to be
---------------------------
maintained at all times true and complete books and records in a manner
consistent with GAAP of the financial operations of the Borrower and the
Guarantors; and provide the Agent and its representatives access to all such
books and records during regular business hours, in order that the Agent may
upon reasonable prior notice examine and make abstracts from such books,
accounts, records and other papers for the purpose of verifying the accuracy of
the various reports delivered by the Borrower or the Guarantors to the Agent or
the Banks pursuant to this Agreement or for otherwise ascertaining compliance
with this Agreement; and at any reasonable time and from time to
42
time during regular business hours, upon reasonable notice, permit the Agent and
any agents or representatives (including, without limitation, appraisers)
thereof to visit the properties of the Borrower and the Guarantors and to
conduct examinations of and to monitor the Collateral held by the Agent.
SECTION 5.07 Maintenance of Concentration Account. Continue to maintain
------------------------------------
with the Agent an account or accounts to be used by the Borrower and the
Guarantors as their principal concentration account for day-to-day operations
conducted by the Borrower and the Guarantors, provided that the Borrower and the
--------
Guarantors may maintain up to $1,000,000 in concentration accounts outside the
principal concentration account maintained with the Agent.
SECTION 5.08 Borrowing Base Certificate. Following the execution and
--------------------------
delivery of the Borrowing Base Amendment, furnish to the Agent as soon as
available and in any event (i) on or before the day of each week set forth in
the Borrowing Base Amendment, a weekly Borrowing Base Certificate as of the last
day of the immediately preceding week; (ii) if requested by the Agent at any
other time when the Agent reasonably believes that the then existing Borrowing
Base Certificate is materially inaccurate, as soon as reasonably available but
in no event later than five (5) Business Days after such request, a Borrowing
Base Certificate showing the Borrowing Base as of the date so requested, in each
case with supporting documentation (including, without limitation, the
documentation described on Schedule 1 to Exhibit E), and (iii) such other
supporting documentation and additional reports with respect to the Borrowing
Base as the Agent shall reasonably request.
SECTION 5.09 Collateral Monitoring and Review. At any time upon the
--------------------------------
request of the Agent or the Required Banks through the Agent, permit the Agent
or professionals (including, without limitation, internal and third party
consultants, accountants and appraisers) retained by the Agent or its
professionals to conduct evaluations and appraisals of (i) the Borrower's
practices in the computation of the Borrowing Base and (ii) the assets included
in the Borrowing Base, and pay the reasonable fees and expenses in connection
therewith (including, without limitation, the reasonable and customary fees and
expenses associated with the Agent's collateral agent services group as set
forth in the Fee Letter referred to in Section 2.19). In connection with any
collateral monitoring or review and appraisal relating to the computation of the
Borrowing Base, the Borrower shall make such adjustments to the Borrowing Base
as the Agent shall require based upon the terms of this Agreement and results of
such collateral monitoring, review or appraisal.
SECTION 5.10 Business Plan.
-------------
(a) Furnish to the Agent within 20 days after the Filing Date, an
updated business plan setting forth variations from the business plan delivered
to the Agent pursuant to Section 4.01(i).
(b) Make its senior officers available to discuss the Borrower's
business plans, consolidated and by division (a copy of which has heretofore
been delivered to the Agent and the Banks in accordance with Section 4.01(i)),
with the Agent and/or the Banks upon the Agent's reasonable request.
43
SECTION 5.11 Blocked Account Arrangements.
----------------------------
(a) Within thirty (30) days of the Closing Date, establish blocked
account arrangements between the Agent and each of the Borrower's banks set
forth in Schedule 5.11 on terms satisfactory to the Agent.
(b) Within thirty (30) days of the opening of any additional
accounts with banks other than the Agent, establish blocked account arrangements
between the Agent and such bank on terms satisfactory to the Agent.
SECTION 5.12 Lockbox Arrangement. Upon the request of the Agent (i)
-------------------
enter into a lockbox agreement, in form and substance satisfactory to the Agent,
pursuant to which a lockbox account is set up and all proceeds of the Borrower
and the Guarantors from accounts receivable shall be deposited into such account
and the Borrower and the Guarantors shall not be permitted to withdraw any funds
held therein, (ii) arrange for each of the Borrower's and the Guarantors'
account debtors to be notified that all payments made in respect of such account
debtor's account shall be directed to the lockbox account and (iii) enter into
such amendments to this Agreement as the Agent may reasonably request with
respect to such lockbox agreements and incorporating a cash sweep.
SECTION 6. NEGATIVE COVENANTS
From the date hereof and for so long as any Commitment shall be in
effect or any Letter of Credit shall remain outstanding (in a face amount in
excess of the amount of cash then held in the Letter of Credit Account, or in
excess of the face amount of back-to-back letters of credit delivered, in each
case pursuant to Section 2.03(b)) or any amount shall remain outstanding or
unpaid under this Agreement, unless the Required Banks shall otherwise consent
in writing, the Borrower and each of the Guarantors will not (and will not apply
to the Bankruptcy Court for authority to):
SECTION 6.01 Liens. Incur, create, assume or suffer to exist any Lien
-----
on any asset of the Borrower or the Guarantors, now owned or hereafter acquired
by the Borrower or any of such Guarantors, other than (i) Liens which were
existing on the Filing Date as reflected on Schedule 3.06 hereto and Liens
granted pursuant to the Existing Agreement; (ii) Liens in favor of the Existing
Lenders as adequate protection granted pursuant to the Orders, which Liens are
junior to the Liens contemplated hereby in favor of the Agent and the Banks,
provided that the Interim Order and the Final Order provide that the holder of
such junior Liens shall not be permitted to take any action to foreclose with
respect to such junior Liens so long as any amounts shall remain outstanding
hereunder or any Commitment shall be in effect; (iii) Permitted Liens; (iv)
Liens in favor of the Agent and the Banks; and (v) Liens securing purchase money
Indebtedness or Capitalized Leases permitted by Section 6.03(iv).
SECTION 6.02 Merger, etc. Consolidate or merge with or into another
-----------
Person.
SECTION 6.03 Indebtedness. Contract, create, incur, assume or suffer to
------------
exist any Indebtedness, except for (i) Indebtedness under the Loan Documents;
(ii) Indebtedness incurred prior to the Filing Date (including existing
Capitalized Leases); (iii) intercompany Indebtedness
44
between the Borrower and the Guarantors, (iv) Indebtedness incurred subsequent
to the Filing Date secured by purchase money Liens or Capitalized Leases to the
extent permitted by Section 6.04 in an aggregate amount not to exceed $500,000
outstanding at any time; (v) Indebtedness arising from Investments among the
Borrower and the Guarantors that are permitted hereunder; and (vi) Indebtedness
owed to First Union or any of its Bank Affiliates in respect of any overdrafts
and related liabilities arising from treasury, depository and cash management
services or in connection with any automated clearing house transfers of funds
and (vii) other Indebtedness in an aggregate amount not to exceed $100,000.
SECTION 6.04 Capital Expenditures. Make Capital Expenditures during the
--------------------
period commencing on the Closing Date through the Maturity Date in excess of
$22,500,000 (of which no more than $15,200,000 may be expending during any 12
month period).
SECTION 6.05 EBITDA. Permit EBITDA for certain periods to be less than
------
corresponding amounts for each such period as may be mutually agreed to by the
Agent and the Borrower and reflected in the Borrowing Base Amendment.
SECTION 6.06 Guarantees and Other Liabilities. Purchase or repurchase
--------------------------------
(or agree, contingently or otherwise, so to do) the Indebtedness of, or assume,
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance of any obligation or capability of so
doing, or otherwise), endorse or otherwise become liable, directly or
indirectly, in connection with the obligations, stock or dividends of any
Person, except (i) for any guaranty of Indebtedness or other obligations of the
Borrower or Guarantor if such person could have incurred such Indebtedness or
obligations under this Agreement, (ii) by endorsement of negotiable instruments
for deposit or collection in the ordinary course of business and (iii) for
guaranty of Indebtedness or other obligations of the Borrower or Guarantors
existing as of the Filing Date as set forth on Schedule 6.06.
SECTION 6.07 Chapter 11 Claims. Incur, create, assume, suffer to exist
-----------------
or permit any other Superpriority Claim which is pari passu with or senior to
---- -----
the claims of the Agent and the Banks against the Borrower and the Guarantors
hereunder, except for the Carve-Out.
SECTION 6.08 Dividends; Capital Stock. Declare or pay, directly or
------------------------
indirectly, any dividends or make any other distribution or payment, whether in
cash, property, securities or a combination thereof, with respect to (whether by
reduction of capital or otherwise) any shares of capital stock (or any options,
warrants, rights or other equity securities or agreements relating to any
capital stock), or set apart any sum for the aforesaid purposes, provided that
--------
any Guarantor may pay dividends to the Borrower and to any other Guarantor that
is its direct parent.
SECTION 6.09 Transactions with Affiliates. Sell or transfer any
----------------------------
property or assets to, or otherwise engage in any other material transactions
with, any of its Affiliates (other than the Borrower and the Guarantors) or its
shareholders, except for transactions that are entered into in the ordinary
course of business at prices and on terms and conditions not less favorable to
the Borrower or such Guarantor than could be obtained on an arm's-length basis
from unrelated third parties.
45
SECTION 6.10 Investments, Loans and Advances. Purchase, hold or acquire
-------------------------------
any capital stock, evidences of indebtedness or other securities of, make or
permit to exist any loans or advances to, or make or permit to exist any
investment in, any other Person (all of the foregoing, "Investments"), except
-----------
for (i) ownership by the Borrower of the capital stock of each of the Guarantors
listed on Schedule 3.05, (ii) Permitted Investments, (iii) advances and loans
among the Borrower and the Guarantors in the ordinary course of business, (iv)
existing Investments described on Schedule 6.10 hereto and (v) investments in
joint ventures in Mexico and Europe in an aggregate amount not to exceed
$2,500,000 at any one time outstanding.
SECTION 6.11 Disposition of Assets. Sell or otherwise dispose of any
---------------------
assets (including, without limitation, the capital stock of any subsidiary)
except for (i) sales of inventory, fixtures and equipment in the ordinary course
of business; (ii) dispositions of surplus, obsolete or damaged equipment no
longer used in production, (iii) sales of assets among the Borrower, the
Guarantors in the ordinary course of business, in good faith and upon
commercially reasonable terms and (iv) sales in arm's-length transactions, at
fair market value and for cash in an aggregate amount not to exceed $2,500,000.
SECTION 6.12 Nature of Business. Modify or alter in any material manner
------------------
the nature and type of its business as conducted at or prior to the Filing Date
or the manner in which such business is conducted (except as required by the
Bankruptcy Code), it being understood that asset sales permitted by Section 6.11
shall not constitute such a material modification or alteration.
SECTION 7. EVENTS OF DEFAULT
SECTION 7.01 Events of Default. In the case of the happening of any of
-----------------
the following events and the continuance thereof beyond the applicable period of
grace if any (each, an "Event of Default"):
----------------
(a) any material representation or warranty made by the Borrower or
any Guarantor in this Agreement or in any Loan Document or in connection with
this Agreement or the credit extensions hereunder or any material statement or
representation made in any report, financial statement, certificate or other
document furnished by the Borrower or any Guarantors to the Banks under or in
connection with this Agreement, shall prove to have been false or misleading in
any material respect when made or delivered; or
(b) default shall be made in the payment of any (i) Fees or interest
on the Loans when due, and such default shall continue unremedied for more than
two (2) Business Days or (ii) principal of the Loans or other amounts payable by
the Borrower hereunder (including, without limitation, reimbursement obligations
or cash collateralization in respect of Letters of Credit), when and as the same
shall become due and payable, whether at the due date thereof (including the
Prepayment Date) or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise; or
(c) default shall be made by the Borrower or any Guarantor in the
due observance or performance of any covenant, condition or agreement contained
in Section 6 hereof; or
46
(d) default shall be made by the Borrower or any Guarantor in the
due observance or performance of any other covenant, condition or agreement to
be observed or performed pursuant to the terms of this Agreement, any of the
Orders or any of the other Loan Documents and such default shall continue
unremedied for more than ten (10) days; or
(e) any of the Cases shall be dismissed or converted to a case under
Chapter 7 of the Bankruptcy Code or the Borrower or any Guarantor shall file a
motion or other pleading seeking the dismissal of any of the Cases under Section
1112 of the Bankruptcy Code or otherwise; a trustee under Chapter 7 or Chapter
11 of the Bankruptcy Code, a responsible officer or an examiner with enlarged
powers relating to the operation of the business (powers beyond those set forth
in Section 1106(a)(3) and (4) of the Bankruptcy Code) under Section 1106(b) of
the Bankruptcy Code shall be elected or appointed in any of the Cases and the
order appointing such trustee, responsible officer or examiner shall not be
reversed or vacated within 30 days after the entry thereof; or an application
shall be filed by the Borrower or any Guarantor for the approval of any other
Super-Priority Claim (other than the Carve-Out) in any of the Cases which is
pari passu with or senior to the claims of the Agent and the Banks against the
---- -----
Borrower or any Guarantor hereunder, or there shall arise or be granted any such
pari passu or senior Super-Priority Claim; or
---- -----
(f) the Bankruptcy Court shall enter an order or orders granting
relief from the automatic stay applicable under Section 362 of the Bankruptcy
Code to the holder or holders of any security interest to permit foreclosure (or
the granting of a deed in lieu of foreclosure or the like) on any assets of the
Borrower or any of the Guarantors which have a value in excess of $1,000,000 in
the aggregate; or
(g) a Change of Control shall occur; or
(h) the Borrower shall fail to deliver a certified Borrowing Base
Certificate when due and such default shall continue unremedied for more than
three (3) Business Days; or
(i) any material provision of any Loan Document shall, for any
reason, cease to be valid and binding on the Borrower or any of the Guarantors,
or the Borrower or any of the Guarantors shall so assert in any pleading filed
in any court; or
(j) an order of the Bankruptcy Court shall be entered reversing,
staying for a period in excess of 10 days, vacating or (without the written
consent of the Agent) otherwise amending, supplementing or modifying any of the
Orders in a manner that is adverse to the Banks as determined by the Agent or
terminating the use of cash collateral by the Borrower or the Guarantors
pursuant to the Orders; or
(k) any judgment or order as to a post-petition liability or debt
for the payment of money in excess of $1,000,000 not covered by insurance shall
be rendered against the Borrower or any of the Guarantors and the enforcement
thereof shall not have been stayed; or
(l) any non-monetary judgment or order with respect to a post-
petition event shall be rendered against the Borrower or any of the Guarantors
which (i) causes a material adverse change in the financial condition, business,
prospects, operations or assets of the Borrower and the Guarantors taken as a
whole on a consolidated basis, (ii) has a material adverse
47
effect on the ability of the Borrower or any of the Guarantors to perform their
respective obligations under any Loan Document, or (iii) has a material adverse
effect on the rights and remedies of the Agent or any Bank under any Loan
Document, and there shall be any period of 10 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(m) except as permitted by the Orders or as otherwise agreed to by
the Agent, the Borrower or the Guarantors shall make any Pre-Petition Payment
other than Pre-Petition Payments authorized by the Bankruptcy Court (v) in
accordance with other "first day" orders reasonably satisfactory to the Agent,
(w) not in excess of $14,003,094 in respect of certain critical vendors and
service providers, (x) in connection with the assumption of executory contracts
and unexpired leases, (y) in respect of accrued payroll and related expenses and
employee benefits as of the Filing Date and (z) in respect of reclamation claims
the aggregate amount of which is satisfactory to the Agent;
(n) any Termination Event described in clauses (iii) or (iv) of the
definition of such term shall have occurred and shall continue unremedied for
more than 10 days and the sum (determined as of the date of occurrence of such
Termination Event) of the Insufficiency of the Plan in respect of which such
Termination Event shall have occurred and be continuing and the Insufficiency of
any and all other Plans with respect to which such a Termination Event
(described in such clauses (iii) or (iv)) shall have occurred and then exist is
equal to or greater than $5,000,000; or
(o) (i) the Borrower or any ERISA Affiliate thereof shall have been
notified by the sponsor or trustee of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan, (ii) the Borrower or such ERISA
Affiliate does not have reasonable grounds, in the opinion of the Agent, to
contest such Withdrawal Liability and is not in fact contesting such Withdrawal
Liability in a timely and appropriate manner, and (iii) the amount of such
Withdrawal Liability specified in such notice, when aggregated with all other
amounts required to be paid to Multiemployer Plans in connection with Withdrawal
Liabilities (determined as of the date of such notification), exceeds $5,000,000
allocable to post-petition obligations or requires payments exceeding $500,000
per annum in excess of the annual payments made with respect to such
Multiemployer Plans by the Borrower or such ERISA Affiliate for the plan year
immediately preceding the plan year in which such notification is received; or
(p) the Borrower or any ERISA Affiliate thereof shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is
in reorganization or is being terminated, within the meaning of Title IV of
ERISA, if as a result of such reorganization or termination the aggregate annual
contributions of the Borrower and its ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the plan
years that include the date hereof by an amount exceeding $5,000,000; or
(q) the Borrower or any ERISA Affiliate shall have committed a
failure described in Section 302(f)(1) of ERISA (other than the failure to make
any contribution accrued
48
and unpaid as of the Filing Date) and the amount determined under Section
302(f)(3) of ERISA is equal to or greater than $5,000,000; or
(r) it shall be determined (whether by the Bankruptcy Court or by
any other judicial or administrative forum) that the Borrower or any Guarantor
is liable for the payment of claims arising out of any failure to comply (or to
have complied) with applicable environmental laws or regulations the payment of
which will have a material adverse effect on the financial condition, business,
properties, operations, assets or prospects of the Borrower and the Guarantors,
taken as a whole, and the enforcement thereof shall not have been stayed;
then, and in every such event and at any time thereafter during the continuance
of such event, and without further order of or application to the Bankruptcy
Court, the Agent may, and at the request of the Required Banks, shall, by notice
to the Borrower (with a copy to counsel for the Official Creditors' Committee
appointed in the Cases, to counsel for the Pre-Petition Agent and to the United
States Trustee for the Southern District of New York), take one or more of the
following actions, at the same or different times (provided, that with respect
to clause (iv) below and the enforcement of Liens or other remedies with respect
to the Collateral under clause (v) below, the Agent shall provide the Borrower
(with a copy to counsel for the Official Creditors' Committee in the Cases, to
counsel for the Pre-Petition Agent and to the United States Trustee for the
Southern District of New York) with five (5) Business Days' written notice prior
to taking the action contemplated thereby and provided, further, that upon
receipt of notice referred to in the immediately preceding clause with respect
to the accounts referred to in clause (iv) below, the Borrower may continue to
make ordinary course disbursements from such accounts (other than the Letter of
Credit Account) but may not withdraw or disburse any other amounts from such
accounts): (i) terminate forthwith the Total Commitment; (ii) declare the Loans
then outstanding to be forthwith due and payable, whereupon the principal of the
Loans together with accrued interest thereon and any unpaid accrued Fees and all
other liabilities of the Borrower accrued hereunder and under any other Loan
Document, shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by the Borrower and the Guarantors, anything contained herein or in any
other Loan Document to the contrary notwithstanding; (iii) require the Borrower
and the Guarantors upon demand to forthwith deposit in the Letter of Credit
Account cash in an amount which, together with any amounts then held in the
Letter of Credit Account, is equal to the sum of 105% of the then Letter of
Credit Outstandings (and to the extent the Borrower and the Guarantors shall
fail to furnish such funds as demanded by the Agent, the Agent shall be
authorized to debit the accounts of the Borrower and the Guarantors maintained
with the Agent in such amount five (5) Business Days after the giving of the
notice referred to above); (iv) set-off amounts in the Letter of Credit Account
or any other accounts maintained with the Agent and apply such amounts to the
obligations of the Borrower and the Guarantors hereunder and in the other Loan
Documents; and (v) exercise any and all remedies under the Loan Documents and
under applicable law available to the Agent and the Banks.
SECTION 8. THE AGENT
SECTION 8.01 Administration by Agent. The general administration of the
-----------------------
Loan Documents shall be by the Agent. Each Bank hereby irrevocably authorizes
the Agent, at its discretion, to take or refrain from taking such actions as
agent on its behalf and to exercise or
49
refrain from exercising such powers under the Loan Documents as are delegated by
the terms hereof or thereof, as appropriate, together with all powers reasonably
incidental thereto (including the release of Collateral in connection with any
transaction that is expressly permitted by the Loan Documents). The Agent shall
have no duties or responsibilities except as set forth in this Agreement and the
remaining Loan Documents.
SECTION 8.02 Advances and Payments.
---------------------
(a) On the date of each Loan, the Agent shall be authorized (but not
obligated) to advance, for the account of each of the Banks, the amount of the
Loan to be made by it in accordance with its Commitment hereunder. Should the
Agent do so, each of the Banks agrees forthwith to reimburse the Agent in
immediately available funds for the amount so advanced on its behalf by the
Agent, together with interest at the Federal Funds Effective Rate if not so
reimbursed on the date due from and including such date but not including the
date of reimbursement.
(b) Any amounts received by the Agent in connection with this
Agreement (other than amounts to which the Agent is entitled pursuant to
Sections 2.19, 8.06, 10.05 and 10.06), the application of which is not otherwise
provided for in this Agreement shall be applied, first, in accordance with each
Bank's Commitment Percentage to pay accrued but unpaid Commitment Fees or Letter
of Credit Fees, and second, in accordance with each Bank's Commitment Percentage
to pay accrued but unpaid interest and the principal balance outstanding and all
unreimbursed Letter of Credit drawings. All amounts to be paid to a Bank by the
Agent shall be credited to that Bank, after collection by the Agent, in
immediately available funds either by wire transfer or deposit in that Bank's
correspondent account with the Agent, as such Bank and the Agent shall from time
to time agree.
SECTION 8.03 Sharing of Setoffs. Each Bank agrees that if it shall,
------------------
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower, including, but not limited to, a secured claim under Section 506
of the Bankruptcy Code or other security or interest arising from, or in lieu
of, such secured claim and received by such Bank under any applicable
bankruptcy, insolvency or other similar law, or otherwise, obtain payment in
respect of its Loans as a result of which the unpaid portion of its Loans is
proportionately less than the unpaid portion of the Loans of any other Bank (a)
it shall promptly purchase at par (and shall be deemed to have thereupon
purchased) from such other Bank a participation in the Loans of such other Bank,
so that the aggregate unpaid principal amount of each Bank's Loans and its
participation in Loans of the other Banks shall be in the same proportion to the
aggregate unpaid principal amount of all Loans then outstanding as the principal
amount of its Loans prior to the obtaining of such payment was to the principal
amount of all Loans outstanding prior to the obtaining of such payment and (b)
such other adjustments shall be made from time to time as shall be equitable to
ensure that the Banks share such payment pro-rata, provided that if any such
non-pro-rata payment is thereafter recovered or otherwise set aside such
purchase of participations shall be rescinded (without interest). The Borrower
expressly consents to the foregoing arrangements and agrees that any Bank
holding (or deemed to be holding) a participation in a Loan may exercise any and
all rights of banker's lien, setoff (in each case, subject to the same notice
requirements as pertain to clause (iv) of the remedial provisions of Section
7.01) or counterclaim with respect to any and all moneys owing by the Borrower
to such
50
Bank as fully as if such Bank held a Note and was the original obligee thereon,
in the amount of such participation.
SECTION 8.04 Agreement of Required Banks. Upon any occasion requiring
---------------------------
or permitting an approval, consent, waiver, election or other action on the part
of the Required Banks, action shall be taken by the Agent for and on behalf or
for the benefit of all Banks upon the direction of the Required Banks, and any
such action shall be binding on all Banks. No amendment, modification, consent,
or waiver shall be effective except in accordance with the provisions of Section
10.10.
SECTION 8.05 Liability of Agent.
------------------
(a) The Agent when acting on behalf of the Banks, may execute any of
its respective duties under this Agreement by or through any of its respective
officers, agents, and employees, and neither the Agent nor its directors,
officers, agents, employees or Affiliates shall be liable to the Banks or any of
them for any action taken or omitted to be taken in good faith, or be
responsible to the Banks or to any of them for the consequences of any oversight
or error of judgment, or for any loss, unless the same shall happen through its
gross negligence or willful misconduct. The Agent and its respective directors,
officers, agents, employees and Affiliates shall in no event be liable to the
Banks or to any of them for any action taken or omitted to be taken by them
pursuant to instructions received by them from the Required Banks or in reliance
upon the advice of counsel selected by it. Without limiting the foregoing,
neither the Agent, nor any of its respective directors, officers, employees,
agents or Affiliates shall be responsible to any Bank for the due execution,
validity, genuineness, effectiveness, sufficiency, or enforceability of, or for
any statement, warranty, or representation in, this Agreement, any Loan Document
or any related agreement, document or order, or shall be required to ascertain
or to make any inquiry concerning the performance or observance by the Borrower
of any of the terms, conditions, covenants, or agreements of this Agreement or
any of the Loan Documents.
(b) Neither the Agent nor any of its respective directors, officers,
employees, agents or Affiliates shall have any responsibility to the Borrower or
the Guarantors on account of the failure or delay in performance or breach by
any Bank or by the Borrower or the Guarantors of any of their respective
obligations under this Agreement or any of the Loan Documents or in connection
herewith or therewith.
(c) The Agent, in its capacity as Agent hereunder, shall be entitled
to rely on any communication, instrument, or document reasonably believed by
such person to be genuine or correct and to have been signed or sent by a person
or persons believed by such person to be the proper person or persons, and such
person shall be entitled to rely on advice of legal counsel, independent public
accountants, and other professional advisers and experts selected by such
person.
SECTION 8.06 Reimbursement and Indemnification. Each Bank agrees (i) to
---------------------------------
reimburse the Agent for such Bank's Commitment Percentage of any expenses and
fees incurred for the benefit of the Banks under this Agreement and any of the
Loan Documents, including, without limitation, counsel fees and compensation of
agents and employees paid for services rendered on behalf of the Banks, and any
other expense incurred in connection with the
51
operations or enforcement thereof, not reimbursed by the Borrower or the
Guarantors and (ii) to indemnify and hold harmless the Agent and any of its
directors, officers, employees, agents or Affiliates, on demand, in the amount
of its proportionate share, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against it or any of them in any way relating to or
arising out of this Agreement or any of the Loan Documents or any action taken
or omitted by it or any of them under this Agreement or any of the Loan
Documents to the extent not reimbursed by the Borrower or the Guarantors (except
such as shall result from their respective gross negligence or willful
misconduct).
SECTION 8.07 Rights of Agent. It is understood and agreed that First Union
---------------
shall have the same rights and powers hereunder (including the right to give
such instructions) as the other Banks and may exercise such rights and powers,
as well as its rights and powers under other agreements and instruments to which
it is or may be party, and engage in other transactions with the Borrower or any
Guarantor, as though it were not the Agent of the Banks under this Agreement.
SECTION 8.08 Independent Banks. Each Bank acknowledges that it has decided
-----------------
to enter into this Agreement and to make the Loans hereunder based on its own
analysis of the transactions contemplated hereby and of the creditworthiness of
the Borrower and the Guarantors and agrees that the Agent shall bear no
responsibility therefor.
SECTION 8.09 Notice of Transfer. The Agent may deem and treat a Bank party
------------------
to this Agreement as the owner of such Bank's portion of the Loans for all
purposes, unless and until a written notice of the assignment or transfer
thereof executed by such Bank shall have been received by the Agent.
SECTION 8.10 Successor Agent. The Agent may resign at any time by giving
---------------
written notice thereof to the Banks and the Borrower. Upon any such resignation,
the Required Banks shall have the right to appoint a successor Agent, which
shall be reasonably satisfactory to the Borrower. If no successor Agent shall
have been so appointed by the Required Banks and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of notice of
resignation, the retiring Agent may, on behalf of the Banks, appoint a successor
Agent, which shall be a commercial bank organized under the laws of the United
States of America or of any State thereof and having a combined capital and
surplus of a least $100,000,000, which shall be reasonably satisfactory to the
Borrower. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 8 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
52
SECTION 9. GUARANTY
SECTION 9.01 Guaranty.
--------
(a) Each of the Guarantors unconditionally and irrevocably guarantees
the due and punctual payment by the Borrower of the Obligations. Each of the
Guarantors further agrees that the Obligations may be extended or renewed, in
whole or in part, without notice to or further assent from it, and it will
remain bound upon this guaranty notwithstanding any extension or renewal of any
of the Obligations. The Obligations of the Guarantors shall be joint and
several.
(b) Each of the Guarantors waives presentation to, demand for payment
from and protest to the Borrower or any other Guarantor, and also waives notice
of protest for nonpayment. The Obligations of the Guarantors hereunder shall not
be affected by (i) the failure of the Agent or a Bank to assert any claim or
demand or to enforce any right or remedy against the Borrower or any other
Guarantor under the provisions of this Agreement or any other Loan Document or
otherwise; (ii) any extension or renewal of any provision hereof or thereof;
(iii) any rescission, waiver, compromise, acceleration, amendment or
modification of any of the terms or provisions of any of the Loan Documents;
(iv) the release, exchange, waiver or foreclosure of any security held by the
Agent for the Obligations or any of them; (v) the failure of the Agent or a Bank
to exercise any right or remedy against any other Guarantor; or (vi) the release
or substitution of any Guarantor or any other Guarantor.
(c) Each of the Guarantors further agrees that this guaranty
constitutes a guaranty of payment when due and not just of collection, and
waives any right to require that any resort be had by the Agent or a Bank to any
security held for payment of the Obligations or to any balance of any deposit,
account or credit on the books of the Agent or a Bank in favor of the Borrower
or any other Guarantor, or to any other Person.
(d) Each of the Guarantors hereby waives any defense that it might have
based on a failure to remain informed of the financial condition of the Borrower
and of any other Guarantor and any circumstances affecting the ability of the
Borrower to perform under this Agreement.
(e) Each Guarantor's guaranty shall not be affected by the genuineness,
validity, regularity or enforceability of the Obligations or any other
instrument evidencing any Obligations, or by the existence, validity,
enforceability, perfection, or extent of any collateral therefor or by any other
circumstance relating to the Obligations which might otherwise constitute a
defense to this Guaranty. Neither of the Agent, nor any of the Banks makes any
representation or warranty in respect to any such circumstances or shall have
any duty or responsibility whatsoever to any Guarantor in respect of the
management and maintenance of the Obligations.
(f) Subject to the provisions of Section 7.01, upon the Obligations
becoming due and payable (by acceleration or otherwise), the Banks shall be
entitled to immediate payment of such Obligations by the Guarantors upon written
demand by the Agent, without further application to or order of the Bankruptcy
Court.
53
SECTION 9.02 No Impairment of Guaranty. The obligations of the Guarantors
-------------------------
hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason, including, without limitation, any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense or set-off, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality or unenforceability of the Obligations. Without
limiting the generality of the foregoing, the obligations of the Guarantors
hereunder shall not be discharged or impaired or otherwise affected by the
failure of the Agent or a Bank to assert any claim or demand or to enforce any
remedy under this Agreement or any other agreement, by any waiver or
modification of any provision thereof, by any default, failure or delay, willful
or otherwise, in the performance of the Obligations, or by any other act or
thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of the Guarantors or would otherwise
operate as a discharge of the Guarantors as a matter of law, unless and until
the Obligations are paid in full.
SECTION 9.03 Subrogation. Upon payment by any Guarantor of any sums to the
-----------
Agent or a Bank hereunder, all rights of such Guarantor against the Borrower
arising as a result thereof by way of right of subrogation or otherwise, shall
in all respects be subordinate and junior in right of payment to the prior final
and indefeasible payment in full of all the Obligations. If any amount shall be
paid to such Guarantor for the account of the Borrower, such amount shall be
held in trust for the benefit of the Agent and the Banks and shall forthwith be
paid to the Agent and the Banks to be credited and applied to the Obligations,
whether matured or unmatured.
SECTION 10. MISCELLANEOUS
SECTION 10.01 Notices. Notices and other communications provided for herein
-------
shall be in writing (including facsimile communication) and shall be mailed,
transmitted by facsimile or delivered to the Borrower or any Guarantor at ▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and to a
Bank or the Agent to it at its address set forth on Annex A, or such other
address as such party may from time to time designate by giving written notice
to the other parties hereunder. All notices and other communications given to
any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the fifth Business Day after the date when sent by
registered or certified mail, postage prepaid, return receipt requested, if by
mail; or when receipt is acknowledged, if by any facsimile equipment of the
sender; in each case addressed to such party as provided in this Section 10.01
or in accordance with the latest unrevoked written direction from such party;
provided, however, that in the case of notices to the Agent notices pursuant to
the preceding sentence with respect to change of address and pursuant to Section
2 shall be effective only when received by the Agent.
SECTION 10.02 Survival of Agreement, Representations and Warranties, etc.
----------------------------------------------------------
All warranties, representations and covenants made by the Borrower or any
Guarantor herein or in any certificate or other instrument delivered by it or on
its behalf in connection with this Agreement shall be considered to have been
relied upon by the Banks and shall survive the making of the Loans herein
contemplated regardless of any investigation made by any Bank or on its behalf
and shall continue in full force and effect so long as any amount due or to
become due hereunder is outstanding and unpaid and so long as the Commitments
have not been terminated. All statements in any such certificate or other
instrument shall constitute
54
representations and warranties by the Borrower and the Guarantors hereunder with
respect to the Borrower.
SECTION 10.03 Successors and Assigns.
----------------------
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Agent and the Banks and their respective successors and
assigns. Neither the Borrower nor any of the Guarantors may assign or transfer
any of their rights or obligations hereunder without the prior written consent
of all of the Banks. Each Bank may sell participations to any Person in all or
part of any Loan, or all or part of its Commitment, in which event, without
limiting the foregoing, the provisions of Section 2.15 shall inure to the
benefit of each purchaser of a participation (provided that such participant
shall look solely to the seller of such participation for such benefits and the
Borrower's and the Guarantors' liability, if any, under Sections 2.15 and 2.18
shall not be increased as a result of the sale of any such participation) and
the pro rata treatment of payments, as described in Section 2.17, shall be
--- ----
determined as if such Bank had not sold such participation. In the event any
Bank shall sell any participation, such Bank shall retain the sole right and
responsibility to enforce the obligations of the Borrower and each of the
Guarantors relating to the Loans, including, without limitation, the right to
approve any amendment, modification or waiver of any provision of this Agreement
(provided that such Bank may grant its participant the right to consent to such
Bank's execution of amendments, modifications or waivers which (i) reduce any
Fees payable hereunder to the Banks, (ii) reduce the amount of any scheduled
principal payment on any Loan or reduce the principal amount of any Loan or the
rate of interest payable hereunder or (iii) extend the maturity of the
Borrower's obligations hereunder). The sale of any such participation shall not
alter the rights and obligations of the Bank selling such participation
hereunder with respect to the Borrower.
(b) Each Bank may assign to one or more Banks or Eligible Assignees all
or a portion of its interests, rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment and the same
portion of the related Loans at the time owing to it), provided, however, that
-------- -------
(i) other than in the case of an assignment to a Bank Affiliate of such assignor
Bank, or to another Bank, the Agent and the Fronting Bank must give their
respective prior written consent to such assignment, which consent will not be
unreasonably withheld, (ii) the aggregate amount of the Commitment and/or Loans
of the assigning Bank subject to each such assignment (determined as of the date
the Assignment and Acceptance with respect to such assignment is delivered to
the Agent) shall, unless otherwise agreed to in writing by the Agent, in no
event be less than $1,000,000 or the remaining portion of such Bank's Commitment
and/or Loans, if less and (iii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register (as defined below), an Assignment and Acceptance with blanks
appropriately completed, together with a processing and recordation fee of
$3,500 (for which the Borrower shall have no liability). Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be within ten
Business Days after the execution thereof (unless otherwise agreed to in writing
by the Agent), (A) the assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder and (B) the Bank thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
55
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Bank's rights and obligations under
this Agreement, such Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, the Bank
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than the representation
and warranty that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim, such Bank assignor makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any of the other Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any of the other Loan Documents; (ii) such Bank assignor makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or any Guarantor or the performance or observance by
the Borrower or any Guarantor of any of its obligations under this Agreement or
any of the other Loan Documents or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement and the other Loan Documents, together with copies of the
financial statements referred to in Section 3.04 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such Bank assignor or any
other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
thereto, together with such powers as are reasonably incidental hereof; and (vi)
such assignee agrees that it will perform in accordance with their terms all
obligations that by the terms of this Agreement are required to be performed by
it as a Bank.
(d) The Agent shall maintain at its office a copy of each Assignment
and Acceptance delivered to it and a register for the recordation of the names
and addresses of the Banks and the Commitments of, and principal amount of the
Loans owing to, each Bank from time to time (the "Register"). The entries in the
--------
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Guarantors, the Agent and the Banks shall treat each Person the
name of which is recorded in the Register as a Bank hereunder for all purposes
of this Agreement. The Register shall be available for inspection by the
Borrower or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank and the assignee thereunder together with the fee payable in
respect thereto, the Agent shall, if such Assignment and Acceptance has been
completed with blanks appropriately filled and consented to by the Agent and the
Fronting Bank (to the extent such consent is required hereunder), (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt written notice thereof to the Borrower
(together with a copy thereof). No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in this
paragraph.
56
(f) Any Bank may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 10.03, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Borrower or any of the Guarantors furnished to such Bank by or
on behalf of the Borrower or any of the Guarantors; provided that prior to any
such disclosure, each such assignee or participant or proposed assignee or
participant shall agree in writing to be bound by the provisions of Section
10.04.
(g) The Borrower hereby agrees, to the extent set forth in the
Commitment Letter, to actively assist and cooperate with the Agent in the
Agent's efforts to sell participations herein (as described in Section 10.03(a))
and assign to one or more Banks or Eligible Assignees a portion of its
interests, rights and obligations under this Agreement (as set forth in Section
10.03(b)).
SECTION 10.04 Confidentiality. Each Bank agrees to keep any information
---------------
delivered or made available by the Borrower or any of the Guarantors to it
confidential from anyone other than persons employed or retained by such Bank
who are or are expected to become engaged in evaluating, approving, structuring
or administering the Loans; provided that nothing herein shall prevent any Bank
from disclosing such information (i) to any of its Affiliates or to any other
Bank, provided such Affiliate agrees to keep such information confidential to
the same extent required by the Banks hereunder, (ii) upon the order of any
court or administrative agency, (iii) upon the request or demand of any
regulatory agency or authority, (iv) which has been publicly disclosed other
than as a result of a disclosure by the Agent or any Bank which is not permitted
by this Agreement, (v) in connection with any litigation to which the Agent, any
Bank, or their respective Affiliates may be a party to the extent reasonably
required, (vi) to the extent reasonably required in connection with the exercise
of any remedy hereunder, (vii) to such Bank's legal counsel and independent
auditors, and (viii) to any actual or proposed participant or assignee of all or
part of its rights hereunder subject to the proviso in Section 10.03(f). Each
Bank shall use reasonable efforts to notify the Borrower of any required
disclosure under clause (ii) of this Section.
SECTION 10.05 Expenses. Whether or not the transactions hereby contemplated
--------
shall be consummated, the Borrower and the Guarantors agree to pay all
reasonable and documented out-of-pocket expenses incurred by the Agent
(including but not limited to the reasonable fees and disbursements of ▇▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, special counsel for the Agent, any other counsel that the
Agent shall retain and any internal or third-party appraisers, consultants and
accountants advising the Agent and Wachovia Securities, Inc.) in connection with
the preparation, execution, delivery and administration of this Agreement and
the other Loan Documents, the making of the Loans and the issuance of the
Letters of Credit, the perfection of the Liens contemplated hereby, the
syndication of the transactions contemplated hereby, the reasonable and
customary costs, fees and expenses (including, without limitation, internally
allocated charges and expenses relating to the Agent's initial and ongoing
Borrowing Base examinations as set forth in the Fee Letter referred to in
Section 2.19) of the Agent in connection with its monthly and other periodic
field examinations, monitoring of assets (including reasonable and customary
internal collateral monitoring fees as set forth in the Fee Letter referred to
in Section 2.19) and publicity expenses, and, following the occurrence of an
Event of Default, all reasonable out-of-pocket expenses incurred by the Banks
and the Agent in the
57
enforcement or protection of the rights of any one or more of the Banks or the
Agent in connection with this Agreement or the other Loan Documents, including
but not limited to the reasonable fees and disbursements of any counsel for the
Banks or the Agent. Such payments shall be made on the date of the Interim Order
and thereafter on demand upon delivery of a statement setting forth such costs
and expenses. Whether or not the transactions hereby contemplated shall be
consummated, the Borrower and the Guarantors agree to reimburse the Agent and
Wachovia Securities, Inc. for the expenses set forth in the Commitment Letter
and the reimbursement provisions thereof are hereby incorporated herein by
reference. The obligations of the Borrower and the Guarantors under this Section
shall survive the termination of this Agreement and/or the payment of the Loans.
SECTION 10.06 Indemnity. The Borrower and each of the Guarantors agree to
---------
indemnify and hold harmless the Agent, Wachovia Securities, Inc. and the Banks
and their directors, officers, employees, agents and Affiliates (each an
"Indemnified Party") from and against any and all expenses, losses, claims,
-----------------
damages and liabilities incurred by such Indemnified Party arising out of claims
made by any Person in any way relating to the transactions contemplated hereby,
but excluding therefrom all expenses, losses, claims, damages, and liabilities
to the extent that they are determined by the final judgment of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such Indemnified Party. The obligations of the Borrower and the
Guarantors under this Section shall survive the termination of this Agreement
and/or the payment of the Loans.
SECTION 10.07 CHOICE OF LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
-------------
SHALL IN ALL RESPECTS BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK AND (TO THE EXTENT APPLICABLE) THE BANKRUPTCY CODE.
SECTION 10.08 No Waiver. No failure on the part of the Agent or any of the
---------
Banks to exercise, and no delay in exercising, any right, power or remedy
hereunder or any of the other Loan Documents shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right, power or remedy
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law.
SECTION 10.09 Extension of Maturity. Should any payment of principal of or
---------------------
interest or any other amount due hereunder become due and payable on a day other
than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, in the case of principal, interest shall be payable
thereon at the rate herein specified during such extension.
SECTION 10.10 Amendments, etc.
---------------
(a) No modification, amendment or waiver of any provision of this
Agreement or the Security and Pledge Agreement, and no consent to any departure
by the Borrower or any Guarantor therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Required Banks, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given; provided, however, that no
-------- -------
58
such modification or amendment shall without the written consent of (1) the
Super-majority Banks release of any of the Liens granted to the Agent hereunder,
under the Orders or under any other Loan Document, or release any of the
Guarantors, (2) the Bank affected thereby (x) increase the Commitment of a Bank
(it being understood that a waiver of an Event of Default shall not constitute
an increase in the Commitment of a Bank), or (y) reduce the principal amount of
any Loan or the rate of interest payable thereon, or extend any date for the
payment of interest hereunder or reduce any Fees payable hereunder or extend the
final maturity of the Borrower's obligations hereunder or (3) all of the Banks
(i) amend or modify any provision of this Agreement which provides for the
unanimous consent or approval of the Banks, (ii) amend this Section 10.10 or the
definition of Required Banks, (iii) amend or modify the Superpriority Claim
status of the Banks contemplated by Section 2.23 or (iv) release all or
substantially all of the Liens granted to the Agent hereunder, under the Orders
or under any other Loan Document, or release all or substantially all of the
Guarantors. No such amendment or modification may adversely affect the rights
and obligations of the Agent, any Fronting Bank hereunder, the Swingline Lender
or First Union in the capacity referred to in Section 6.03(vi) without its prior
written consent. No notice to or demand on the Borrower or any Guarantor shall
entitle the Borrower or any Guarantor to any other or further notice or demand
in the same, similar or other circumstances. Each assignee under Section
10.03(b) shall be bound by any amendment, modification, waiver, or consent
authorized as provided herein, and any consent by a Bank shall bind any Person
subsequently acquiring an interest on the Loans held by such Bank. No amendment
to this Agreement shall be effective against the Borrower or any Guarantor
unless signed by the Borrower or such Guarantor, as the case may be.
(b) Notwithstanding anything to the contrary contained in Section
10.10(a), in the event that the Borrower requests that this Agreement be
modified or amended in a manner which would require the unanimous consent of all
of the Banks and such modification or amendment is agreed to by the
Super-majority Banks (as hereinafter defined), then with the consent of the
Borrower and the Super-majority Banks, the Borrower and the Super-majority Banks
shall be permitted to amend the Agreement without the consent of the Bank or
Banks which did not agree to the modification or amendment requested by the
Borrower (such Bank or Banks, collectively the "Minority Banks") to provide for
--------------
(w) the termination of the Commitment of each of the Minority Banks, (x) the
addition to this Agreement of one or more other financial institutions (each of
which shall be an Eligible Assignee), or an increase in the Commitment of one or
more of the Super-majority Banks, so that the Total Commitment after giving
effect to such amendment shall be in the same amount as the Total Commitment
immediately before giving effect to such amendment, (y) if any Loans are
outstanding at the time of such amendment, the making of such additional Loans
by such new financial institutions or Super-majority Bank or Banks, as the case
may be, as may be necessary to repay in full the outstanding Loans of the
Minority Banks immediately before giving effect to such amendment and (z) such
other modifications to this Agreement as may be appropriate. As used herein, the
term "Super-majority Banks" shall mean, at any time, Banks holding Loans
representing at least 66-2/3% of the aggregate principal amount of the Loans
outstanding, or if no Loans are outstanding, Banks having Commitments
representing at least 66-2/3% of the Total Commitment.
SECTION 10.11 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any
59
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 10.12 Headings. Section headings used herein are for convenience
--------
only and are not to affect the construction of or be taken into consideration in
interpreting this Agreement.
SECTION 10.13 Execution in Counterparts. This Agreement may be executed in
-------------------------
any number of counterparts, each of which shall constitute an original, but all
of which taken together shall constitute one and the same instrument.
SECTION 10.14 Prior Agreements. This Agreement represents the entire
----------------
agreement of the parties with regard to the subject matter hereof and the terms
of any letters and other documentation entered into between the Borrower or a
Guarantor and any Bank or the Agent prior to the execution of this Agreement
which relate to Loans to be made hereunder shall be replaced by the terms of
this Agreement (except as otherwise expressly provided herein with respect to
the Commitment Letter and the fee letter referred to therein, including without
limitation the Borrower's agreements to actively assist the Agent in the
syndication of the transactions contemplated hereby referred to in Section
10.03(g) and with respect to interest rates and Commitment Fees and including
also the provisions of Section 2.19).
SECTION 10.15 Further Assurances. Whenever and so often as reasonably
------------------
requested by the Agent, the Borrower and the Guarantors will promptly execute
and deliver or cause to be executed and delivered all such other and further
instruments, documents or assurances, and promptly do or cause to be done all
such other and further things as may be necessary and reasonably required in
order to further and more fully vest in the Agent all rights, interests, powers,
benefits, privileges and advantages conferred or intended to be conferred by
this Agreement and the other Loan Documents.
SECTION 10.16 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE GUARANTORS,
--------------------
THE AGENT AND EACH BANK HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY OF THE
LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.
60
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and the year first written.
BORROWER:
▇▇▇▇▇ & LORD, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President, Secretary
and Treasurer
GUARANTORS:
▇▇▇▇▇ & LORD INDUSTRIES, INC.
G&L SERVICE COMPANY NORTH AMERICA, INC.
SWIFT ▇▇▇▇▇▇▇▇ ▇▇▇.
SWIFT DENIM ▇▇▇▇▇▇▇▇ ▇▇▇.
GREENSBORO TEXTILE ADMINISTRATION LLC
BRIGHTON WEAVING LLC
FLINT SPINNING LLC
SOCIETY HILL FINISHING LLC
MC ▇▇▇▇▇▇ WEAVING LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
GUARANTORS:
▇▇▇▇▇ & LORD PROPERTIES, INC.
SWIFT DENIM PROPERTIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice-President and Treasurer
61
FIRST UNION NATIONAL BANK,
Individually and as Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
62
ANNEX A
to
REVOLVING CREDIT AND GUARANTY AGREEMENT
Dated as of February __, 2002
Commitment Commitment
Bank Amount Percentage
---- ------ ----------
First Union National Bank $ 100,000,000.00 100.0000%
One First Union Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: _______________________
________________________
Total $ 100,000,000.00 100.0000%
================
