EXHIBIT 10.2
DEBTOR IN POSSESSION CREDIT AGREEMENT
among
NUTRAMAX PRODUCTS, INC.
AND CERTAIN SUBSIDIARIES,
as borrowers,
THE LENDERS PARTY HERETO,
as lenders,
and
THE CIT GROUP/BUSINESS CREDIT, INC.,
as agent
_____________, 2000
TABLE OF CONTENTS
SECTION PAGE
------- ----
SECTION 1: INTERPRETATION.................................................2
1.1 Defined Terms.....................................2
1.2 Uniform Commercial Code Terms....................17
1.3 Accounting Terms.................................18
1.4 Computation of Time Periods......................18
1.5 Headings and References..........................18
1.6 Construction.....................................19
SECTION 2: CREDIT........................................................19
2.1 Credit Facilities................................19
2.2 Loan and Letter of Credit Procedures.............23
2.3 Repayment of Loans; Evidence of Debt.............24
2.4 Interest on Loans................................26
2.5 Conversion and Continuation of Loans.............26
2.6 Reduction of Revolving Commitment; Prepayments...27
2.7 Fees.............................................29
2.8 Pro Rata Treatment...............................30
2.9 No Discharge; Survival of Claims.................30
SECTION 3: CHANGE IN CIRCUMSTANCES; INCREASED COSTS......................31
3.1 Reserve Requirements; Change in Circumstances....31
3.2 Change in Legality...............................32
3.3 Taxes............................................32
3.4 Inability to Determine LIBOR.....................34
3.5 Funding Losses...................................35
SECTION 4: PRIORITY; COLLATERAL..........................................35
4.1 Priority and Liens...............................35
4.2 Collateral.......................................36
4.3 Security Interest in Accounts....................37
4.4 Further Assurances...............................37
SECTION 5: CONDITIONS OF LENDING.........................................38
5.1 Conditions Precedent to Initial Loans and
Letters of Credit................................38
5.2 Conditions Precedent to Each Loan and Each
Letter of Credit.................................41
SECTION 6: REPRESENTATIONS AND WARRANTIES................................42
6.1 Organization and Authority.......................42
6.2 Due Execution....................................42
6.3 Disclosure.......................................42
6.4 Financial Statements.............................42
6.5 Subsidiaries.....................................43
6.6 Liens............................................43
6.7 Compliance with Law..............................43
6.8 Insurance........................................43
6.9 The Final Order..................................44
6.10 Use of Proceeds..................................44
6.11 Litigation.......................................44
6.12 Governmental Regulation..........................44
6.13 Payment of Taxes.................................44
6.14 Assets and Properties............................45
6.15 Bank Accounts....................................45
SECTION 7: REPORTING REQUIREMENTS........................................45
7.1 Financial Statements and Reports.................45
7.2 Borrowing Base Certificate.......................47
SECTION 8: AFFIRMATIVE COVENANTS.........................................48
8.1 Existence........................................48
8.2 Compliance with Laws.............................48
8.3 Insurance........................................49
8.4 Obligations and Taxes............................49
8.5 Notice of Default................................49
8.6 Access to Books and Records......................49
8.7 Maintenance of Financial Statements..............49
8.8 Audits...........................................49
8.9 ERISA Compliance.................................50
8.10 Maintenance of Property..........................50
8.11 Condemnation.....................................50
8.12 Borrowing Base...................................50
8.13 Change in Collateral; Collateral Records.........50
8.14 Cash Management System...........................50
8.15 Leases...........................................51
8.16 Post-Closing Requirements........................51
SECTION 9: NEGATIVE COVENANTS............................................52
9.1 Liens............................................52
9.2 Mergers or Consolidations........................52
9.3 Indebtedness.....................................52
9.4 Use of Proceeds..................................52
9.5 Capital Expenditures.............................52
9.6 Guarantees and Other Liabilities.................52
9.7 Chapter 11 Claims................................53
9.8 Dividends; Capital Stock.........................53
9.9 Transactions with Affiliates.....................53
9.10 Investments......................................53
9.11 Disposition of Assets............................53
9.12 Nature of Business...............................53
9.13 Sales and Leasebacks; Operating Leases...........53
9.14 ERISA............................................54
9.15 Environmental....................................54
9.16 Amendment of Certain Documents...................55
9.17 Matters Respecting the Cases.....................55
9.18 Restricted Payments..............................55
SECTION 10: FINANCIAL COVENANTS..........................................55
10.1 Tangible Net Worth...............................56
10.2 Fixed Charge Coverage Ratio......................56
SECTION 11: EVENTS OF DEFAULT; REMEDIES..................................56
11.1 Events of Default................................56
11.2 Remedies.........................................59
11.3 Right of Set-Off.................................60
SECTION 12: THE AGENT....................................................60
12.1 Administration by Agent..........................60
12.2 Advances and Payments............................60
12.3 Sharing of Setoffs...............................61
12.4 Agreement of Required Lenders....................61
12.5 Liability of Agent...............................61
12.6 Reimbursement and Indemnification................62
12.7 Rights of Agent..................................62
12.8 Independent Lenders..............................62
12.9 Notice of Transfer...............................63
12.10 Successor Agent..................................63
SECTION 13: GENERAL......................................................63
13.1 Notices..........................................63
13.2 Survival of Agreement, Representations
and Warranties...................................63
13.3 Successors and Assigns...........................63
13.4 Confidentiality..................................65
13.5 Expenses.........................................66
13.6 Indemnity........................................66
13.7 CHOICE OF LAW....................................67
13.8 No Waiver........................................67
13.9 Extension of Maturity............................67
13.10 Amendments.......................................67
13.11 Severability.....................................68
13.12 Execution in Counterparts........................68
13.13 Prior Agreements.................................68
13.14 Further Assurances...............................68
13.15 WAIVER OF JURY TRIAL.............................................68
ATTACHMENTS
Annex A Revolving Commitments
Exhibit A Form of Promissory Note
Exhibit B Form of Final Order
Exhibit C Form of Depository Account Notice
Exhibit D Form of Blocked Account Agreement
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Borrowing Base Certificate
Exhibit G Budget
Schedule 1 Adequate Protection Obligations
Schedule 2 Existing Agreements
Schedule 6.4 Financial Statements
Schedule 6.5 Subsidiaries
Schedule 6.6 Existing Liens
Schedule 6.7 Compliance with Laws
Schedule 6.11 Litigation
Schedule 6.13 Payment of Taxes
Schedule 6.14 Intellectual Property
Schedule 6.15 Bank Accounts
Schedule 8.13 Locations of Collateral
Schedule 9.9 Transactions with Affiliates
Schedule 13.1 Notices
DEBTOR IN POSSESSION CREDIT AGREEMENT
This Debtor in Possession Credit Agreement, dated as of ___________,
2000 (this "Agreement"), is among NutraMax Products, Inc., a Delaware
corporation and a debtor and debtor-in-possession in a case pending under
chapter 11 of the United States Bankruptcy Code (the "Parent"), and each of
the Parent's direct or indirect domestic subsidiaries party hereto and each
a debtor and debtor-in-possession in a case pending under chapter 11 of the
United States Bankruptcy Code, as borrowers (together with the Parent,
collectively, the "Borrowers" and each a "Borrower"), the financial
institutions from time to time party hereto, as lenders (collectively, the
"Lenders" and each a "Lender"), and The CIT Group/Business Credit, Inc., a
New York corporation, as agent for the Lenders (in such capacity, the
"Agent").
PRELIMINARY STATEMENTS:
1. On May __, 2000 (the "Petition Date"), each Borrower filed a
voluntary petition with the United States Bankruptcy Court for the District
of Delaware initiating the chapter 11 cases of the Borrowers (collectively,
the "Cases" and each a "Case") and has continued in the possession of its
assets and in the management of its businesses pursuant to sections 1107
and 1108 of the United States Bankruptcy Code, 11 U.S.C. ss.ss.101-1330
(the "Bankruptcy Code").
2. The Borrowers have applied to the Agent and the Lenders for a
revolving credit, term loan and letter of credit facility in an aggregate
principal amount not to exceed $30,000,000, the proceeds of which will be
used for repayment of certain existing secured indebtedness of the
Borrowers, fees and expenses relating to the Cases and working capital
requirements of the Borrowers, each in accordance with the terms of this
Agreement.
3. To provide 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 Borrowers under this Agreement and any
other related agreement, instrument or document, the Borrowers will provide
the Agent and the Lenders with the following (each as more fully described
in this Agreement):
(A) an allowed administrative expense claim in the Cases pursuant to
section 364(c)(1) of the Bankruptcy Code having priority over all
administrative expenses of the kind specified in sections 105,
326, 328, 503(b), 506(c), 507(a), 507(b) and 726 of the
Bankruptcy Code;
(B) a perfected first priority lien, pursuant to section 364(c)(2) of
the Bankruptcy Code, upon all unencumbered property of each
Borrower and on all cash and cash equivalents in the Cash
Collateral Account, the Concentration Account and each Depository
Account (each as defined in this Agreement);
(C) a perfected lien, pursuant to section 364(c)(3) of the Bankruptcy
Code, upon all property of each Borrower (other than the property
referred to in clause (d) below that is subject to the ----------
valid and perfected liens that presently secure the Borrowers'
and their respective Subsidiaries' pre-petition indebtedness
under the Existing Agreements (as defined in this Agreement))
that is subject to (i) valid and perfected liens in existence on
the Petition Date, (ii) valid liens in existence on the Petition
Date that are perfected subsequent to the Petition Date as
permitted by section 546(b) of the Bankruptcy Code and (iii)
liens expressly permitted by this Agreement, in each case junior
to such valid and perfected liens; and
(D) perfected first priority priming liens, pursuant to section
364(d)(1) of the Bankruptcy Code, upon all property of each
Borrower, including, without limitation, accounts receivable,
instruments, contract rights, chattel paper, general intangibles,
inventory, equipment, fixtures, documents of title, intellectual
property, rights under license agreements, real estate (whether
owned or leased) and all proceeds thereof, that is subject to (i)
the existing liens that presently secure the Borrowers' and their
respective Subsidiaries' prepetition indebtedness under or in
connection with the Existing Agreements (but subject to any liens
to which the liens being primed by this Agreement are subject on
the Petition Date or become subject subsequent to the Petition
Date as permitted by section 546(b) of the Bankruptcy Code) and
(ii) any liens granted after the Petition Date to provide
adequate protection in respect of the Existing Agreements, which
first priority priming liens in favor of the Agent and the
Lenders shall be senior in all respects to all of such existing
liens under or in connection with the Existing Agreements and to
any Liens granted after the Petition Date to provide adequate
protection in respect thereof.
4. All of the claims and the security interests and liens granted
under this Agreement in the Cases to the Agent and the Lenders are subject
to the carve-out to the extent provided in Section 4.1.
AGREEMENT:
In consideration of the premises and the mutual agreements contained
in this Agreement, the Borrowers, the Lenders and the Agent agree as
follows:
SECTION 1: INTERPRETATION
1.1 Defined Terms. As used in this Agreement, the following terms
have the meanings specified below (such meanings to 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):
"Account" has the meaning set forth in the Uniform Commercial Code and
includes, without limitation, all present and future rights of a Borrower
to payment, whether or not they have been earned by performance, for goods
sold or for services rendered that are not evidenced by instruments or
chattel paper.
"Adequate Protection Obligations" means each of the payments, claims
or Liens, if any, granted to the Existing Lenders and described on Schedule 1.
"Adjusted LIBOR" means, with respect to any Eurodollar Loan for any
Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the quotient of (i) LIBOR in effect for
such Interest Period divided by (ii) a percentage (expressed as a decimal)
equal to 100% minus the Eurodollar Reserve Percentage.
"Affiliate" means, as to any Person, any other Person that, 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 "Controlling Person") if the Controlling Person possesses, directly or
indirectly, power to direct or cause the direction of the management and
policies of the Controlled Person whether by contract or otherwise. Unless
the context otherwise requires, each reference to an Affiliate in this
Agreement is a reference to an Affiliate of a Borrower.
"Agent" has the meaning set forth in the Preamble.
"Agent Account" means an account in the name of the Agent designated
to the Borrowers from time to time into which the Borrowers shall make all
payments required to made to the Agent under this Agreement.
"Agreement" has the meaning set forth in the Preamble. 1.16
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or
other disposition by a Borrower, in one or a series of related
transactions, of any property of such Borrower to any Person, other than
(i) sales of Inventory in the ordinary course of business and (ii) sales,
issuances, conveyances, transfers, leases or other dispositions to a
Borrower.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the Agent,
substantially in the form of Exhibit E.
"Availability Reserves" means, as of any date of determination, such
amounts as the Agent may from time to time establish and revise in good
faith and in its reasonable discretion reducing the Borrowing Base for such
matters as the Agent, in its discretion, deems appropriate, including,
without limitation, (i) to reflect events, conditions, contingencies or
risks that, as determined by the Agent, do or may affect either (a) the
Collateral or its value, (b) the assets, business or prospects of the
Borrowers or (c) the Liens and other rights of the Agent in the Collateral
(including the enforceability, perfection and priority thereof), (ii) to
reflect the Agent's good faith belief that any Borrowing Base Certificate,
collateral report or financial information furnished by or on behalf of a
Borrower to the Agent is or may have been incomplete, inaccurate or
misleading in any material respect, (iii) in respect of any state of facts
that the Agent determines in good faith constitutes a Default or Event of
Default or (iv) to reflect unpaid taxes that are due and owing and future
unpaid rental and other payments on leases and warehouse arrangements.
"Bankruptcy Code" has the meaning set forth in the first Preliminary
Statement.
"Bankruptcy Court" means the United States Bankruptcy Court for the
District of Delaware or any other court having jurisdiction over the Cases
from time to time.
["Base Rate" means, on any date, a fluctuating interest rate per annum
equal to the rate of interest that the Reference Bank announces at its
principal office from time to time as its prime commercial lending rate
(whether or not such rate is actually charged by the Reference Bank), which
rate is not necessarily the lowest rate of interest charged by the
Reference Bank with respect to commercial loans. Any change in the Base
Rate announced by the Reference Bank is effective as of the effective date
specified in the public announcement by the Reference Bank of such change.]
"Base Rate Loan" means any Loan or Borrowing bearing interest at a
rate determined by reference to the Base Rate in accordance with the
provisions of Section 2.
"Borrowers" has the meaning set forth in the Preamble.
"Borrowing" means the incurrence of Loans of a single Type made from
all the Lenders on a single date and having, in the case of Eurodollar
Loans, a single Interest Period (with any Base Rate Loan made under Section
3.2 being considered a part of the related Borrowing of Eurodollar Loans).
"Borrowing Base" means, as of any date of determination, an amount
equal to (i) up to 85% of the face amount (less discounts, credits,
allowances and payments) of Eligible Accounts plus (ii) the lesser of (a)
$7,000,000, (b) the sum of (1) up to 55% of the cost, determined on a
first-in, first-out basis, of Eligible Inventory consisting of finished
goods and (2) up to 15% of the cost, determined on a first-in, first-out
basis, of Eligible Inventory consisting of raw materials and supplies and
(c) 80% of the appraised orderly liquidation value of all Inventory minus
(iii) the amount of the Carve-Out, as determined by the Agent in its
reasonable discretion minus (iv) any Availability Reserves. Notwithstanding
anything in this Agreement to the contrary, the Agent may elect at any
time, in its reasonable discretion, to change the foregoing method of
calculating the Borrowing Base by reducing advances against Eligible
Accounts and Eligible Inventory.
"Borrowing Base Certificate" means a certificate, in the form of
Exhibit F or otherwise satisfactory in form and substance to the Agent,
executed and certified by a Responsible Officer of the Parent, which shall
include appropriate exhibits and schedules as referred to in such
certificate.
"Budget" means, collectively, (i) the cash budget detailing the
Borrowers' and its Subsidiaries' anticipated cash receipts and
disbursements for the period commencing on the Closing Date and (ii) the
projected financial statements, in each case attached as Exhibit G.
"Business Day" means any day other than a Saturday, Sunday or other
day on which banks in the State of Illinois and New York are required or
permitted to close (and, for a Letter of Credit, other than a day on which
the Letter of Credit Issuer is closed); provided 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" means, for any period, the aggregate of all
expenditures (whether paid in cash and not theretofore accrued subsequent
to the Closing Date or accrued as liabilities during such period and
including that portion of Capitalized Leases that are capitalized on the
consolidated balance sheet of the Borrowers) net of cash amounts received
by the Borrowers from other Persons during such period in reimbursement of
Capital Expenditures made by the Borrowers, excluding interest capitalized
during construction, by the Borrowers during such period that, in
conformity with GAAP, are required to be included in or reflected by the
property, plant, equipment or intangibles or similar fixed asset accounts
reflected in the consolidated balance sheet of the Borrowers (including
equipment that is purchased simultaneously with the trade-in of existing
equipment owned by any Borrower 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
insurance proceeds paid on account of the loss of or the damage to the
assets being replaced or restored, or from awards of compensation arising
from the taking by condemnation or eminent domain of such assets being
replaced.
"Capitalized Lease" means, as applied to any Person, any lease of
property by such Person as lessee that would be capitalized on a balance
sheet of such Person prepared in accordance with GAAP.
"Carve-Out" means, collectively, (i) in the event of the occurrence
and during the continuance of a Default or Event of Default, the payment of
allowed and unpaid professional fees and disbursements incurred by the
Borrowers and any statutory committees appointed in the Cases in an
aggregate amount not in excess of $1,000,000 and (ii) the payment of unpaid
fees pursuant to 28 U.S.C. ss. 1930 and to the Clerk of the Bankruptcy
Court.
"Cases" has the meaning set forth in the first Preliminary Statement.
"Cash Collateral Account" means the account established by the
Borrowers under the sole and exclusive control of the Agent maintained at
the Office and designated as the "NutraMax Products, Inc. Cash Collateral
Account" and used solely for the purposes set forth in Sections 2.1(C)(xii)
and 2.6(B).
"Change of Control" means (i) the acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended, a "Controlling Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Securities Exchange Act of 1934, as amended), other than, individually
or in the aggregate, the Junior Lenders, of more than 20% of the combined
voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors of the Parent, (ii) during any
period of up to 24 consecutive months, commencing before or after the
Closing Date, individuals who at the beginning of such 24-month period were
directors of the Parent shall cease for any reason (other than due to
death, disability or previously established mandatory retirement) to
constitute a majority of the board of directors of the Parent, (iii) the
Junior Lenders, individually or in the aggregate, cease to have beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended) of greater than 51% of the
outstanding capital stock of the Parent and (iv) the chief executive
officer, chief financial officer, chief operating officer or president of
the Parent on the Closing Date cease to serve in such capacity and a
replacement officer satisfactory to the Agent is not appointed within 60
days of thereof.
"Closing Date" means the date on which this Agreement has been
executed and the conditions precedent to the making of the initial Loans
set forth in Section 5.1 have been satisfied or waived.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all property and interests in property now owned or
hereafter acquired by any Borrower in or upon which a Lien has been granted
under any of the Loan Documents.
"Commitment Fee" has the meaning set forth in Section 2.7(B).
"Commitment Percentage" means at any time, with respect to each Lender,
the percentage obtained by dividing its Revolving Commitment at such time
by the Total Revolving Commitment at such time.
"Concentration Account" means the deposit account maintained by the
Agent at The Chase Manhattan Bank, which deposit account is under the sole
dominion and control of the Agent.
"Consummation Date" means the date of the substantial consummation (as
defined in section 1101 of the Bankruptcy Code and that for purposes of
this Agreement shall be no later than the effective date) of a
Reorganization Plan of any Borrower that is confirmed pursuant to an order
of the Bankruptcy Court.
"Default" means any event that, with lapse of time or notice or lapse
of time and notice, will constitute an Event of Default.
"Depository Account" means the depository accounts maintained by a
Borrower for the collection of cash of the Borrowers and the proceeds from
Collateral.
"Dollars" and "$" means lawful money of the United States of America.
"EBITDA" means, for any period, all as determined in accordance with
GAAP, the consolidated net income (or net loss) of the Borrowers for such
period plus (i) the sum of (a) depreciation expense, (b) amortization
expense, (c) other non-cash expenses, (d) net total federal, state and
local income tax expense, (e) gross interest expense for such period less
gross interest income for such period, (f) extraordinary losses, (g) any
non-recurring charge or restructuring charge, (h) the cumulative effect of
any change in accounting principles and (i) "Chapter 11 expenses" (or
"administrative costs reflecting Chapter 11 expenses") as shown on the
Borrowers' consolidated statement of income for such period minus (ii)
extraordinary gains plus or minus (iii) the amount of cash received or
expended in such period in respect of any amount that, under clauses (c)
and (g) above, was taken into account in determining EBITDA for such or any
prior period.
"Eligible Accounts" means Accounts of each Borrower that at the time
of determination meet all the following qualifications and is otherwise
acceptable by the Agent as eligible, based on criteria that the Agent may
from time to time otherwise establish and adjust in its sole credit
judgment:
(i) it is lawfully owned by such Borrower and not subject to any
senior Lien or prior assignment, other than a Lien in favor of
the Agent that secures the payment of the Obligations;
(ii) it is not unpaid 90 days after the invoice date therefor;
(iii) it is not owing by a single Account Debtor if 20% or more of
the balance owing by such Account Debtor to the Borrower
remains unpaid 90 days after the invoice date therefor;
(iv) the account debtor of which (a) is not a director, officer,
employee, Subsidiary or Affiliate of such Borrower, (b) is not
the United States of America or any department, agency or
instrumentality thereof, (c) is not the subject of bankruptcy
or a similar insolvency proceeding or has made an assignment
for the benefit of creditors or whose assets have been conveyed
to a receiver or trustee, (d) has asserted a counterclaim or
has a right of setoff or (e) is a resident of the United States
of America or the Canadian provinces of Alberta, British
Columbia, Manitoba, Ontario or Saskatchewan unless (1) such
account debtor has supplied the applicable Borrower with an
irrevocable letter of credit, issued by a financial institution
satisfactory to the Agent or (2) the applicable Borrower has
assigned to the Agent a credit insurance policy from an insurer
satisfactory to the Agent, in each case sufficient to cover
such Account in form and substance satisfactory to the Agent;
and
(v) for which the prospect of payment or performance by the account
debtor of which is not or will not be (a) conditional upon the
account debtor's approval or otherwise subject to any
repurchase obligation or return right (as with sales made on a
▇▇▇▇-and-hold, guaranteed sale, sale-or-return, sale on
approval or consignment basis) or (b) otherwise impaired as
determined by the Agent in its sole credit judgement.
If any Account at any time ceases to be an Eligible Account by reason of
its failure to meet any of the foregoing, or its failure to meet any other
eligibility criteria established by the Agent in its sole credit judgment
upon notice to the Parent, such Account shall promptly be excluded from the
calculation of Eligible Accounts. With respect to any Eligible Account, if
the Agent or the Required Lenders at any time after the Closing Date
determine in their reasonable discretion that the prospect of payment or
performance by the account debtor with respect thereto is materially
impaired for any reason whatsoever, such Account shall cease to be an
Eligible Account after notice of such determination is given to the Parent.
"Eligible Assignee" means (i) a commercial bank having total assets in
excess of $1,000,000,000, (ii) a finance company, insurance company or
other financial institution or fund, in each case acceptable to the Agent,
that in the ordinary course of business extends credit of the type
contemplated in this Agreement 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 or (iii) any other
financial institution satisfactory to the Borrowers and the Agent.
"Eligible Inventory" means Inventory of each Borrower (other than work
in progress) that at the time of determination meets all the following
qualifications and is otherwise acceptable as eligible, based on criteria
that the Agent may from time to time otherwise establish and adjust in its
sole credit judgment:
(i) it is lawfully owned by such Borrower and not subject to any
Lien or prior assignment, other than a Lien in favor of the
Agent that secures the payment of the Obligations, and it is
not held on consignment and may be lawfully sold;
(ii) it is (a) located in such Borrower's distribution center,
warehouses or retail locations listed on Schedule 8.13 or (b)
located in other locations in the continental United States of
America as the Agent shall have approved in writing from time
to time, which approval shall be given upon such Borrower
providing the Agent (1) with evidence, reasonably satisfactory
to the Agent, of the Agent's perfected, first priority Lien on
all Inventory of such Borrower located in such locations, (2)
with evidence, reasonably satisfactory to the Agent, of the
absence of any other Liens on any Inventory of such Borrower
located in such locations and (3) to the extent such Inventory
location is owned or operated by Person other than such
Borrower and such Borrower is not a lessee with respect to such
location, a bailment agreement, ▇▇▇▇▇▇/bailee financing
statements and such other documentation and filings with
respect to such location, in each case in form and substance
acceptable to the Agent;
(iii) it is not Inventory returned or rejected by such Borrower's
customers (other than Inventory that is undamaged and resalable
in the ordinary course of business) or returned to any of such
Borrower's suppliers;
(iv) it is not (a) Inventory constituting fruits, vegetables,
produce, livestock products meats or meat products, (b)
Inventory constituting pharmaceutical products that are subject
to regulation by a Governmental Authority and not substantially
similar to pharmaceutical products maintained by the Borrowers
in recent historical operations prior to the Closing Date and
(c) Inventory constituting perishable goods with a shelf-life
of less than seven months; and
(v) it is determined in the reasonable judgment of the Agent to be,
when taken as a whole, substantially similar in quality and mix
(giving effect to the seasonal nature of the Borrowers'
businesses) to the Inventory maintained by such Borrower and
described in the appraisal dated February 8, 2000, and prepared
by Hilco/Great American.
If any Inventory at any time ceases to be Eligible Inventory by reason of
its failure to meet any of the foregoing, or its failure to meet any other
eligibility criteria established by the Agent in its sole credit judgment
upon notice to the Parent, such Inventory shall promptly be excluded from
the calculation of Eligible Inventory. With respect to any Eligible
Inventory, if the Agent or the Required Lenders at any time after the
Closing Date determine in their reasonable discretion that the value as
collateral for lending purposes with respect thereto is materially impaired
for any reason whatsoever, such Inventory shall cease to be Eligible
Inventory after notice of such determination is given to the Parent.
"Environmental Lien" means a Lien in favor of any Governmental
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" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is a member of a group of which a Borrower is a member
and that is under common control within the meaning of Section 414(b) or
(c) of the Code and the regulations promulgated and rulings issued
thereunder.
"Eurodollar Loan" means any Loan or Borrowing bearing interest at a
rate determined by reference to Adjusted LIBOR in accordance with the
provisions of Section 2.
"Eurodollar Reserve Percentage" means on any date the percentage
(expressed as a decimal) established by the Board of Governors of the
Federal Reserve System of the United States and any other banking authority
that is the then stated maximum rate for all reserves (including but not
limited to any emergency, supplemental or other marginal reserve
requirements) applicable to any member bank of the Federal Reserve System
in respect of "Eurocurrency Liabilities" (as defined in Regulation D issued
by such Board of Governors), or any successor category of liabilities under
Regulation D issued by such Board of Governors, as in effect from time to
time. The Eurodollar Reserve Percentage shall be adjusted automatically on
and as of the effective date of any change in such percentage.
"Event of Default" has the meaning set forth in Section 11.1.
"Excess Cash Flow" means (i) EBITDA for any fiscal year of the
Borrowers and their respective Subsidiaries minus (ii) for each such fiscal
year for the Borrowers and their respective Subsidiaries, the sum of (a)
all scheduled and required payments of principal of Indebtedness of the
Borrowers and their respective Subsidiaries (including, without limitation,
required principal payments of the Term Loan and Capital Leases) that were
paid during such fiscal year plus (b) gross interest expense paid in cash
for such fiscal year plus (c) total federal, state and local income tax
expense paid in cash during such fiscal year plus (d) actual Capital
Expenditures made during such fiscal year, in each case determined on a
consolidated basis in accordance with GAAP.
"Existing Agreements" means the Revolving Credit and Term Loan
Agreement dated as of December 30, 1996, among the Parent, the lenders
party thereto and Fleet National Bank (as successor to The First National
Bank of Boston), as agent, and includes all promissory notes, letters of
credit, interest rate protection agreements, indemnity agreements, cash
management agreements, reimbursement agreements and the agreements granting
security interests and Liens in property and assets of any Borrower or any
Subsidiary to the Existing Lenders, including, without limitation, the
security agreements, mortgages, leasehold mortgages, pledge agreements and
guaranty agreements listed on Schedule 2, each of which documents was
executed and delivered (to the extent party thereto) by a Borrower or a
Subsidiary prior to the Petition Date, as each may have been amended or
modified from time to time.
"Existing Lender Claim" means the $4,000,000 portion of the claim
under the Existing Agreements that is retained by the Existing Lenders.
"Existing Lenders" means, collectively, those lenders to the Borrowers
and their respective Subsidiaries (to the extent party thereto) under the
Existing Agreements, and any agents therefor, together with any successors
or assigns thereof.
"Fees" means, collectively, the Commitment Fees and other fees
described in Section 2.7.
"Final Order" means an order of the Bankruptcy Court entered in the
Cases after a final hearing under Bankruptcy Rule 4001(c)(2) granting final
approval of this Agreement and the other Loan Documents and granting the
Liens and Superpriority Claim described in Section 4.1.
"Fixed Charge Coverage Ratio" means, as of any date, the ratio of (i)
an amount equal to (a) EBITDA minus (b) net total federal, state and local
income tax expense to the extent included in the determination of net
income (or net loss) of the Borrowers during such period to (ii) the sum of
(a) gross interest expense for such period less gross interest income for
such period plus (b) all scheduled, required payments of principal of
Indebtedness of the Borrowers and their respective Subsidiaries (including,
without limitation, required principal payments of the Term Loan) that were
due and payable during such period plus (c) Capital Expenditures made
during such period, in each case determined on a consolidated basis in
accordance with GAAP.
"Foreign Subsidiary" means a Subsidiary that is organized under the
laws of a jurisdiction other than the United States of America, any State
or Commonwealth thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants Standards Board or in
such other statements by such other entity as may be in general use by
significant segments of the accounting profession as in effect on the
Closing Date, subject to the provisions of Section 1.3.
"Governmental Authority" means 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 of
America or foreign.
"Indebtedness" means, at any time and with respect to any Person, (i)
all indebtedness of such Person for borrowed money, (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), (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 (a) currency swap agreements, currency future or
option contracts and other similar agreements designed to hedge against
fluctuations in foreign interest rates and (b) 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.
"Insufficiency" means, with respect to any Plan, the amount, if any,
of its unfunded benefit liabilities within the meaning of Section
4001(a)(18) of ERISA.
"Interest Payment Date" means (i) as to any Eurodollar Loan, the last
day of each Interest Period and (ii) as to all Base Rate Loans, the first
Business Day of each month and the date on which any Base Rate Loans are
converted to Eurodollar Loans under Section 2.5.
"Interest Period" means, as to any Eurodollar Loan, the period
commencing on the date of such Eurodollar Loan (including as a result of a
conversion to Base Rate Loans) or on the last day of the preceding Interest
Period applicable to such Eurodollar Loan and ending on the numerically
corresponding day (or if there is no corresponding day, the last day) in
the calendar month that is one, two or three months thereafter, as the
Parent may elect in the related notice delivered under Sections 2.2(A) or
2.5; provided that (i) if any Interest Period would end on a day that is
not 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 Maturity Date.
"Inventory" has the meaning set forth in the Uniform Commercial Code
and includes, without limitation, any and all goods, including, without
limitation, goods in transit, wheresoever located, whether now owned or
hereafter acquired by a Borrower, which are held for sale or lease,
furnished under any contract of service, or held as raw materials, work in
process or supplies, and all materials used or consumed in a Borrower's
business, and includes such property the sale or other disposition of which
has given rise to Accounts and which has been returned to or repossessed or
stopped in transit by a Borrower.
"Investment" means (i) to purchase, hold or acquire all or
substantially all of the assets of a business conducted by another Person,
any capital stock of any other Person, any evidences of Indebtedness or
other securities of another Person, (ii) to make or permit to exist any
loans or advances to another Person or (iii) to make or permit to exist any
investment in any other Person.
"Junior Facility" means a subordinated debtor in possession loan made
to the Borrowers by the Junior Lenders.
"Junior Lenders" means, collectively, Cape ▇▇▇ Investors LLC, Pelitus
Capital Partners LLC and ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
"Lenders" has the meaning set forth in the Preamble.
"Letter of Credit" means any irrevocable letter of credit issued under
Section 2.1(C), which letter of credit shall be (i) a standby or import
documentary letter of credit, (ii) issued for purposes that are consistent
with the ordinary course of business of the Borrowers or any of their
respective Subsidiaries or for such other purposes as are reasonably
acceptable to the Agent and (iii) denominated in Dollars.
"Letter of Credit Application and Reimbursement Agreement" means an
application fora Letter of Credit and a reimbursement agreement therefor
(whether in a single or several documents, taken together) as the Letter of
Credit Issuer may request.
"Letter of Credit Guaranty" means one or more guaranty agreements
delivered by the Agent to the Letter of Credit Issuer, guaranteeing the
Borrowers' Reimbursement Obligations, which guaranty agreements shall be in
form and substance acceptable in all respects to the Agent, in its sole
discretion, all amendments, restatements, substitutions, extensions and
other modifications from time to time entered into with respect thereto.
"Letter of Credit Issuer" means The Chase Manhattan Bank as an issuer
of Letters of Credit under this Agreement and each other issuer of Letters
of Credit under this Agreement that is approved by the Agent and the
Borrowers.
"Letter of Credit Outstandings" means, at any time, the sum of (i) the
aggregate undrawn stated amount of all Letters of Credit then outstanding
plus (ii) all Reimbursement Obligations.
"LIBOR" means the rate of interest per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) specified by notice to the Agent by the
Reference Bank at which deposits in Dollars are offered by the Reference
Bank in London, England to major banks in the London interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of the Interest Period for the Eurodollar Loan to be
outstanding during such Interest Period and in an amount substantially
equal to the amount of such Eurodollar Loan.
"Lien" means 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).
"Loans" means, collectively, the Revolving Loans and the Term Loan.
"Loan Documents" means this Agreement, the Final Order, any promissory
note issued under Section 2.3(F), the Letters of Credit, the Letter of
Credit Guaranties, the Letter of Credit Application and Reimbursement
Agreements and any other instrument or agreement executed and delivered in
connection with this Agreement.
"Material Adverse Effect" means (i) a material adverse effect upon the
condition (financial or otherwise), operations, assets, business,
properties, performance or prospects of the Borrowers, taken as a whole,
(ii) a material adverse effect on the ability of any of the Borrowers to
perform their respective obligations under the Loan Documents or (iii) a
material adverse effect on the ability of the Lenders or the Agent to
enforce the Loan Documents.
"Maturity Date" means the second anniversary of the Closing Date.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which a Borrower or any ERISA Affiliate is
making or accruing an obligation to make contributions or has within any of
the preceding five plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" means a Single Employer Plan that (i) is
maintained for employees of a Borrower or an ERISA Affiliate and at least
one Person other than a Borrower and its ERISA Affiliates or (ii) was so
maintained and in respect of which a 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 Casualty Proceeds" means, with respect to any damage, destruction
or condemnation, as the case may be, of any property of such Person, the
excess of (i) the gross amount of all insurance proceeds or condemnation
awards received by such Person as a result of such damage destruction or
condemnation over (ii) the sum (without duplication) of (a) the reasonable
and customary legal and other professional fees and expenses actually
incurred in connection with the receipt of such proceeds or awards and (b)
all taxes and other governmental costs and expenses actually paid or
estimated by such Person (in good faith) to be payable in cash in
connection with the receipt of such proceeds or awards; provided that if,
after the payment of all taxes and other governmental costs and expenses
with respect to such proceeds, the amount of estimated taxes and other
governmental costs and expenses, if any, under clause (ii)(b) above
exceeded the amount actually paid in cash in respect of such proceeds, the
aggregate amount of such excess shall, within two Business Days thereafter,
be payable, under Section 2.6(B)(iv) as Net Casualty Proceeds.
"Net Disposition Proceeds" means, in respect of any sale of assets,
the proceeds of such sale after the payment of or reservation for expenses
that are directly related to (or the need for which arises as a result of)
the transaction of sale, including, without limitation, related severance
costs, taxes payable, brokerage commissions, professional expenses, other
similar costs that are directly related to the sale and 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 Lenders.
"Obligations" means (i) the due and punctual payment of principal of
and interest on the Loans and Reimbursement Obligations and (ii) the due
and punctual payment of the Fees and all other present and future, fixed or
contingent, monetary obligations of the Borrowers to the Lenders and the
Agent under the Loan Documents.
"Office" when used in connection with the Agent means its office
located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, or at such other
office or offices of the Agent as may be designated in writing from time to
time by the Agent to the Parent and when used in connection with a Lender
or the Letter of Credit Issuer means the office of such entity designated
in writing from time to time by the Agent to the Parent.
"Other Taxes" has the meaning set forth in Section 3.3.
"Parent" has the meaning set forth in the Preamble.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency or entity performing substantially the same functions.
"Pension Plan" means a defined benefit pension or retirement plan that
meets and is subject to the requirements of Section 401(a) of the Code.
"Permitted Investments" means, collectively:
(i) 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;
(ii) without limiting the provisions of clause (iv) 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 Rating Group or of at least
"P-2" or the equivalent thereof from ▇▇▇▇▇'▇ Investors Service,
Inc.;
(iii) 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 (a) any domestic office of the
Agent or the bank with whom the Borrowers maintain their cash
management system; provided that if such bank is not a --------
Lender under this Agreement, such bank shall have entered into
an agreement with the Agent pursuant to which such bank waives
all rights of setoff and confirmed that such bank does not
have, nor shall it claim, a security interest therein or (b)
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 Group or
at least "P-2" or the equivalent thereof from ▇▇▇▇▇'▇ Investors
Service, Inc.;
(iv) investments in commercial paper maturing within six months from
the date of acquisition thereof and issued by (a) the holding
company of the Agent or (b) 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
(1) a combined capital and surplus in excess of $250,000,000
and (2) commercial paper rated at least "A-2" or the equivalent
thereof from Standard & Poor's Rating Group or of at least
"P-2" or the equivalent thereof from ▇▇▇▇▇'▇ Investors Service,
Inc.;
(v) investments in repurchase obligations with a term of not more
than seven days for underlying securities of the types
described in clause (i) above entered into with any office of a
bank or trust company meeting the qualifications specified in
clause (iii) above;
(vi) investments in money market funds substantially all the assets
of which are comprised of securities of the types described in
clauses (i) through (v) above; and
(vii) to the extent owned on the Petition Date, investments in the
capital stock of any direct or indirect Subsidiary of a
Borrower.
"Permitted Liens" means, collectively,
(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 that are
being contested in good faith by appropriate proceedings and
with respect to which adequate reserves or other appropriate
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 Petition 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, that do not interfere
materially with the ordinary conduct of the business of the
Borrowers and that do not materially detract from the value of
the property to which they attach or materially impair the use
thereof to the Borrowers;
(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 9.3(iii) solely for
the purpose of financing the acquisition of such property; and
(vi) extensions, renewals or replacements of any Lien referred to in
clauses (i) through (v) 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" means 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.
"Petition Date" has the meaning set forth in the first Preliminary
Statement.
"Plan" means a Single Employer Plan or a Multiemployer Plan.
"Reference Bank" means The Chase Manhattan Bank.
"Register" has the meaning set forth in Section 13.3(D).
"Reimbursement Obligations" means, as to the Borrowers, the aggregate
reimbursement or repayment obligations of the Borrowers under a Letter of
Credit Application and Reimbursement Agreement or other similar document
with respect to amounts drawn under Letters of Credit.
"Reorganization Plan" means a plan of reorganization in any of the
Cases.
"Required Lenders" means, at any time, Lenders holding at least 51% of
the sum of (i) the aggregate outstanding principal amount of the Term Loan
and (ii) the aggregate principal amount of Revolving Loans outstanding or,
if no Revolving Loans are outstanding, the Total Revolving Commitment.
"Responsible Officer" means any executive officer of the Parent or any
other officer of any Borrower designated in writing by the chief executive
officer or chief financial officer of the Parent to the Agent as
responsible for overseeing or reviewing compliance with this Agreement or
any other Loan Document.
"Revolving Commitment" means, with respect to each Lender, the
commitment of such Lender under this Agreement in the amount set forth
opposite its name on Annex A or as may subsequently be set forth in the
Register from time to time, as such commitment may be reduced from time to
time under this Agreement.
"Revolving Loans" has the meaning set forth in Section 2.1(A)(i).
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (i) is maintained for employees of a
Borrower or an ERISA Affiliate or (ii) was so maintained and in respect of
which a Borrower could have liability under Section 4069 of ERISA in the
event such Plan has been or were to be terminated.
"Subsidiary" means, with respect to any Person, 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 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, directly or indirectly, by such Person. Unless the
context otherwise requires, each reference to a Subsidiary in this
Agreement is a reference to a Subsidiary of a Borrower.
"Superpriority Claim" means a claim against any Borrowers in any of
the Cases that is an administrative expense claim having priority over any
or all administrative expenses of the kind specified in sections 105, 326,
328, 503(b), 506(c), 507(a), 507(b) and 726 of the Bankruptcy Code.
"Tangible Net Worth" means, at any time, an amount equal to the
Borrower's total assets minus total liabilities, determined on a
consolidated basis in accordance with GAAP; provided that the resulting
amount will be decreased by (i) the book value of all general intangibles
of the Borrowers, including, without limitation, patents, trademarks, trade
names, copyrights, deferred charges, non-competition payments, goodwill,
unamortized loan and organization costs and other assets that are properly
classified as "intangible assets" in accordance with GAAP, (ii) all loans
by the Borrowers to its officers, directors and employees, (iii)
Investments in Affiliates and (iv) all obligations owed to the Borrowers by
any Affiliate or Subsidiary.
"Taxes" has the meaning set forth in Section 3.3.
"Term Loan" has the meaning set forth in Section 2.1(B).
"Termination Date" means the earliest to occur of (i) the Maturity
Date, (ii) the Consummation Date and (iii) the acceleration of the Loans
and the termination of the Total Revolving Commitment in accordance with
the terms of this Agreement.
"Termination Event" means (i) a "reportable event", as such term is
described in Section 4043 of ERISA and the regulations issued thereunder
(other than a "reportable event" not subject to the provision for 30-day
notice to the PBGC under Section 4043 of ERISA or such regulations) or an
event described in Section 4068 of ERISA excluding events described in
Section 4043(c)(9) of ERISA or 29 CFR ss.ss.2615.21 or 2615.23 and
excluding events that could 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 Borrowers
taken as a whole, (ii) the withdrawal of a 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(c) of ERISA
or the incurrence of liability by a Borrower or any ERISA Affiliate under
Section 4064 of ERISA upon the termination of a Multiple Employer Plan,
(iii) providing notice of intent to terminate a Plan under Section 4041(c)
of ERISA or the treatment of a Plan amendment as a termination under
Section 4041 of ERISA, (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 Petition Date but not paid) that
could 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).
"Total Revolving Commitment" means, at any time, the sum of the
Revolving Commitments at such time. The Total Revolving Commitment on the
Closing Date is $20,000,000.
"Type" when used in respect of any Loan or Borrowing refers to the
rate of interest (either Adjusted LIBOR or Base Rate) by reference to which
interest on such Loan or on the Loans comprising such Borrowing is
determined.
"Uniform Commercial Code" means the Uniform Commercial Code as enacted
in the State of Illinois, as it may be amended from time to time.
"Unused Total Commitment" means, at any time, (i) the Total Revolving
Commitment less (ii) the sum of (a) the outstanding principal amount of all
Revolving Loans and (b) all Letter of Credit Outstandings.
"Withdrawal Liability" has the meaning given such term under Part I of
Subtitle E of Title IV of ERISA.
1.2 Uniform Commercial Code Terms. Except as otherwise indicated, all
terms not specifically defined in this Agreement that are defined, or used,
in Article 9 of the Uniform Commercial Code have the respective meanings
assigned to such terms in Article 9 of the Uniform Commercial Code.
1.3 Accounting Terms. Except as otherwise indicated, all accounting
terms not specifically defined in this Agreement shall be construed in
accordance with, and certificates of compliance with covenants shall be
based upon, GAAP; provided that for purposes of determining compliance with
any covenant set forth in Section 10, 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 6.4. If any changes in
accounting principals or practices from those used by the Borrowers on the
Closing Date are occasioned after the Closing Date by the promulgation of
rules, regulations, pronouncements and opinions by or required by the
Financial Accounting Standards Board or the American Institute of Certified
Public Accountants (or any successor or agencies with similar functions),
which results in a material change in the method of accounting in the
financial statements required to be furnished to the Agent under this
Agreement or in the calculation of financial covenants, standards or terms
contained in this Agreement or any other Loan Document, the Agent and the
Parent agree to enter into negotiations in good faith to amend such
provisions so as equitably to reflect such changes to the end that the
criteria for evaluating the financial condition and performance of the
Borrowers will be the same after such changes as they were before such
changes. If the parties fail to agree on the amendment of such provisions,
the Borrowers will furnish financial statements in accordance with such
changes but will provide calculations for all financial covenants, perform
all financial covenants and otherwise observe all financial standards and
terms in accordance with applicable accounting principles and practices in
effect immediately prior to such changes. Calculations with respect to
financial covenants required to be stated in accordance with applicable
accounting principles and practices in effect immediately prior to such
change will be reviewed and certified by the Borrowers' accountants.
1.4 Computation of Time Periods. In this Agreement in the computation
of periods of time from a specified date to a later specified date, the
words "from" or "commencing on" means "from and including" and the words
"to," "through," "ending on" and "until" each mean "to but excluding."
1.5 Headings and References. Section and other headings are for
reference only, and do not affect the interpretation or meaning of any
provision of this Agreement. Any Section or clause references are to this
Agreement, unless otherwise specified. References to an annex, schedule or
exhibit are, unless otherwise specified, to an Annex, Schedule or Exhibit
attached to this Agreement. References in this Agreement and the other Loan
Documents or any other agreement include this Agreement and the other Loan
Documents and other agreements as the same may be amended, restated,
supplemented or otherwise modified from time to time under their respective
terms. A reference to any law, statute or regulation mean that law, statute
or regulation as it may be amended, supplemented or otherwise modified from
time to time, and any successor law, statute or regulation. A reference to
a Person includes the successors and assigns of such Person, but such
reference shall not increase, decrease or otherwise modify in any way the
provisions in this Agreement or any other Loan Document governing the
assignment of rights and obligations under or the binding effect of any
provision of this Agreement or any other Loan Document. The provisions of
this Agreement relating to Subsidiaries apply only during such times as a
Borrower has one or more Subsidiaries.
1.6 Construction. Each covenant contained in this Agreement shall be
construed (absent express provision to the contrary) as being independent
of each other covenant contained herein, so that compliance with any one
covenant shall not (absent such an express contrary provision) be deemed to
excuse compliance with any other covenant. Where any provision in this
Amendment or any other Loan Document refers to action to be taken by any
Person, or which such Person is prohibited from taking, such provision
shall be applicable whether such action is taken directly or indirectly by
such Person. The term "including" is not limiting and means "including
without limitation."
SECTION 2: CREDIT
2.1 Credit Facilities. Upon the terms and subject to the conditions
set forth in this Agreement (including, without limitation, the provisions
of Section 2.2(D)), the Lenders, severally and not jointly with the other
Lenders, agree to extend the following credit facilities to the Borrowers:
(A) Revolving Loans. Each Lender will make revolving loans
(collectively, the "Revolving Loans" and each a "Revolving Loan") to the
Borrowers, on a joint and several basis, at any time and from time to time
during the period commencing on the Closing Date and ending on the
Termination Date in an aggregate principal amount not to exceed, when added
to such Lender's Commitment Percentage of the then aggregate Letter of
Credit Outstandings, the Revolving Commitment of such Lender, which
Revolving Loans may be repaid and reborrowed in accordance with the
provisions of this Agreement. At no time shall the outstanding aggregate
principal amount of all Revolving Loans plus the aggregate Letter of Credit
Outstandings exceed the lesser of (i) the Total Revolving Commitment then
in effect and (ii) the Borrowing Base then in effect. Each Revolving Loan
shall be made by the Lenders pro rata in accordance with their respective
Revolving Commitments; provided that the failure of any Lender to make any
Revolving Loan shall not relieve the other Lenders of their obligations to
lend.
(B) Term Loan. The Lenders will make a term loan (the "Term Loan") to
the Borrowers, on a joint and several basis, on the date the Final Order is
entered by the Bankruptcy Court in the original principal amount of
$10,000,000. The Term Loan shall be repaid in monthly installments of
$166,666.67 on the first Business Day of each month (commencing on the
first Business Day of the fourth month after the Closing Date, including
the month in which the Closing Date occurs), with all remaining outstanding
principal of the Term Loan, together with any accrued and unpaid interest
thereon, payable on the Termination Date. No portion of the Term Loan that
has been repaid may be reborrowed. Notwithstanding anything in this
Agreement or the other Loan Documents to the contrary, the Obligations in
connection with the Term Loan become immediately due and payable on the
Termination Date.
(C) Letters of Credit. To assist the Borrowers in establishing or
opening Letters of Credit with the Letter of Credit Issuer, the Borrowers
have requested the Agent join in the applications for such Letters of
Credit or guarantee payment or performance of such Letters of Credit and
any drafts or acceptances under such Letters of Credit through the issuance
of a guaranty. The Agent agrees to issue a Letter of Credit Guaranty on
behalf of the Borrowers for one or more Letters of Credit during the period
from the Closing Date to the date that is 30 days prior to the Maturity
Date. The Agent shall not have any obligation to arrange for a Letter of
Credit Guaranty at any time:
(a) if the aggregate Letter of Credit Obligations, after giving
effect to the issuance of Letters of Credit requested under
Section 2.2(C), exceeds $2,500,000 or if the aggregate
outstanding principal amount of the Revolving Loans plus the
then aggregate Letter of Credit Obligations exceeds the lesser
of the Total Revolving Commitment then in effect and the
Borrowing Base then in effect;
(b) if the Agent receives written notice from the Required Lenders
at or before 12:00 p.m. (Chicago, Illinois time) on the third
Business Day immediately preceding the date on which the
proposed Letter of Credit will be issued that one or more of
the conditions precedent contained in Section 5 would not on
such date be satisfied;
(c) if the requested Letter of Credit has an expiration date later
than the earlier of (1) the date that occurs 180 days following
the date of issuance with respect to a commercial Letter of
Credit or the date that occurs 360 days following the date of
issuance with respect to a standby Letter of Credit or (2) the
15th Business Day immediately preceding the Maturity Date; or
(d) if the applicable Letter of Credit is in a currency other than
Dollars.
(ii) Notwithstanding any provisions to the contrary in any Letter of
Credit Application and Reimbursement Agreement, (a) the Borrowers shall
reimburse the Letter of Credit Issuer for amounts drawn under each Letter
of Credit no later than the date (the "Reimbursement Date") that is one
Business Day after the Parent receives written notice from the Letter of
Credit Issuer that a draft has been presented under such Letter of Credit
by the beneficiary thereof and (b) all Reimbursement Obligations with
respect to any Letter of Credit shall bear interest at the rate applicable
to Base Rate Loans that are Revolving Loans in accordance with Section
2.4(A) from the date of the relevant drawing under such Letter of Credit
until the Reimbursement Date and thereafter at the rate applicable to Base
Rate Loans that are Revolving Loans in accordance with Section 2.4(D).
(iii) Immediately upon the issuance by the Letter of Credit Issuer of
any Letter of Credit in accordance with the procedures set forth in this
Section 2.1(C), each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from the Agent, without recourse or
warranty, an undivided interest and participation, to the extent of such
Lender's Commitment Percentage, in all obligations of the Agent with
respect to such Letter of Credit.
(iv) In the event that (a) any amount, charge, fee, commission, cost
or expense is charged to the Agent for the account of the Borrowers by the
Letter of Credit Issuer in connection with or arising out of Letters of
Credit for the amount of any and all indebtedness, liability or obligation
of any kind (including indemnification for breakage costs, capital adequacy
and reserve requirement charges) incurred by the Agent or the Lenders under
the Letter of Credit Guaranty upon payment by the Agent under the Letter of
Credit Guaranty or (b) upon the occurrence of an Event of Default, the
Letter of Credit Obligations exceeds the amount of the cash collateral in
the Cash Collateral Account, then each Lender shall promptly and
unconditionally pay to the Agent, in immediately available funds, the
amount of such Lender's Commitment Percentage of such payment, pursuant to
this Section 2.1(C)(iv). All such payments shall constitute Revolving Loans
made to the Borrowers pursuant to Section 2.1(A) (irrespective of the
satisfaction of the conditions in Section 5.2 or the requirement in Section
2.2(A) to deliver a notice of Borrowing, which conditions and requirement,
for the purpose of refunding any Reimbursement Obligation owing to the
Lenders, the Lenders irrevocably waive). If a Lender does not make its
Commitment Percentage of the amount of such payment available to the Agent,
such Lender agrees to pay to the Agent, forthwith on demand, such amount
together with interest thereon, for each day from the date such payment was
due until the date such amount is paid to the Agent, at the customary rate
set by the Agent for the correction of errors among banks for three
Business Days and thereafter at the rate applicable to Base Rate Loans that
are Revolving Loans in accordance with Section 2.4(A). The failure of any
such Lender to make available to the Agent its Commitment Percentage of any
such payment shall neither relieve any other Lender of its obligation under
this Agreement to make available to the Agent such other Lender's
Commitment Percentage of any payment on the date such payment is to be made
nor increase the obligation of any other Lender to make such payment to the
Agent. This Section 2.1(C)(iv) does not relieve any Borrower of its
obligation to pay or repay any Lender funding its Commitment Percentage of
such payment pursuant to this Section 2.1(C)(iv) interest on the amount of
such payment from such date such payment is to be made until the date on
which payment is repaid in full.
(v) The obligations of a Lender to make payments to the Agent with
respect to a Letter of Credit shall be irrevocable, not subject to any
qualification or exception whatsoever and shall be made in accordance with,
but not subject to, the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(a) any lack of validity or enforceability of this Agreement or any
of the other Loan Documents;
(b) the existence of any claim, setoff, defense or other right that
the Borrowers may have at any time against a beneficiary named
in a Letter of Credit or any transferee of any Letter of Credit
(or any Person for whom any such transferee may be acting), the
Agent, Letter of Credit Issuer, any Lender or any other Person,
whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated in this Agreement or any
unrelated transactions (including any underlying transactions
between a Borrower or any other party and the beneficiary named
in any Letter of Credit);
(c) any draft, certificate or any other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(d) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Loan Documents;
(e) any failure by the Agent to provide any notices required under
this Agreement relating to Letters of Credit; or
(f) the occurrence of any Default or Event of Default.
(vi) The Borrowers agree that any action taken by the Agent or any
Lender, if taken in good faith, and any action taken by the Letter of
Credit Issuer, under or in connection with the Letters of Credit, the
Letter of Credit Guaranty, the Letter of Credit Application and
Reimbursement Agreement, the guarantees, the drafts or acceptances or the
goods purported to be represented by any documents, shall be binding on the
Borrowers (with respect to the Letter of Credit Issuer, the Agent and the
Lenders) and shall not put the Agent or any Lender in any resulting
liability to the Borrowers. In furtherance of the foregoing, (a) the Agent
shall have the full right and authority to: clear and resolve any questions
of non-compliance of documents; give any instructions as to acceptance or
rejection of any documents or goods; execute any and all guaranties (and
applications therefore), indemnities or delivery orders; grant any
extensions of the maturity of, time of payment for, or time of presentation
of, any drafts, acceptances, or documents; and agree to any amendments,
renewals, extensions, modifications, changes or cancellations of any of the
terms or conditions of any of the applications, Letters of Credit, drafts
or acceptances, all in the Agent's sole name and (b) the Letter of Credit
Issuer shall be entitled to comply with and honor any and all such
documents or instruments executed by or received solely from the Agent, all
without any notice to or any consent from the Borrowers.
(vii) None of the Agent, the Letter of Credit Issuer or any of the
Lenders shall be responsible for: the existence, character, quality,
quantity, condition, packing, value or delivery of the goods purporting to
be represented by any documents; any difference or variation in the
character, quality, quantity, condition, packing, value or delivery of the
goods from that expressed in the documents; the validity, sufficiency or
genuineness of any documents or of any endorsements thereof even if such
documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; the time, place, manner or order in
which shipment is made; partial or incomplete shipments or failure or
omission to ship any or all of the goods referred to in the Letters of
Credit or documents; any deviation from instructions; delay, default or
fraud by the shipper or anyone else in connection with any such goods or
the shipping thereof; or any breach of contract between the shipper or
vendors and the Borrowers. Furthermore, without being limited by the
foregoing, none of the Agent, the Letter of Credit Issuer or any of the
Lenders shall be responsible for any act or omission with respect to or in
connection with any goods covered by Letters of Credit.
(viii) Without the Agent's prior consent and endorsement in writing,
the Borrowers agree (a) not to: execute any applications for steamship or
airway guaranties, indemnities or delivery orders; grant any extensions of
the maturity of, time of payment for, or time of presentation of, any
drafts, acceptances or documents; or agree to any amendments, renewals,
extensions, modifications, changes or cancellations of any of the terms or
conditions of any of the applications, Letters of Credit, drafts or
acceptances and (b) after the occurrence of an Event of Default, not to
clear and resolve any questions of non-compliance of documents or give any
instructions as to acceptances or rejection of any documents or goods.
(ix) The Borrowers agree that any necessary and material import,
export or other license or certificates for the import or handling of
Inventory will have been promptly procured, all foreign and domestic
governmental laws and regulations in regard to the shipment and importation
of Inventory or the financing thereof will have been promptly and fully
complied with, and any certificates in that regard that the Agent may at
any time reasonably request will be promptly furnished. In this connection,
each Borrower represents and warrants that all shipments made under any
such Letters of Credit are in accordance with the laws and regulations of
the countries in which the shipments originate and terminate and are not
prohibited by any such laws and regulations. As between the Borrowers, on
the one hand, and the Agent, the Lenders and the Letter of Credit Issuer,
on the other hand, the Borrowers assume all risk, liability and
responsibility for, and agree to pay and discharge, all present and future
local, state, federal or foreign taxes, duties or levies. As between the
Borrowers, on the one hand, and the Agent, the Lenders and the Letter of
Credit Issuer, on the other hand, any embargo, restriction, laws, customs
or regulations of any country, state, city, or other political subdivision,
where such Inventory is or may be located, or wherein payments are to be
made, or wherein drafts may be drawn, negotiated, accepted or paid, shall
be solely the Borrowers' risk, liability and responsibility.
(x) Upon any payments made to the Letter of Credit Issuer under the
Letter of Credit Guaranty, the Agent shall, without prejudice to its rights
under this Agreement, acquire by subrogation, any rights, remedies, duties
or obligations granted or undertaken by the Borrowers to the Letter of
Credit Issuer in any application for Letters of Credit, any standing
agreement relating to Letters of Credit or otherwise, all of which shall be
deemed to have been granted to the Agent and apply in all respects to the
Agent and shall be in addition to any rights, remedies, duties or
obligations contained in this Agreement.
(xi) In the event that the Borrowers are required to provide cash
collateral for any Letter of Credit, the Borrowers shall deposit such cash
collateral in the Cash Collateral Account, which cash collateral shall be
held in the Cash Collateral Account until all Obligations have been paid in
full in cash; provided that, when the Borrowers elect, and are not required
to provide cash collateral for a Letter of Credit, the cash collateral for
such Letter of Credit shall be returned to the Borrowers if at such time
(a) a Default or Event of Default has not occurred and is not continuing
and (b) no Letter of Credit is outstanding and all Reimbursement
Obligations have been paid in full.
(xii) If upon the Termination Date any Letter of Credit will remain
outstanding, the Borrowers will, on or prior to the Termination Date, (i)
cause all Letters of Credit that expire after the Termination Date to be
returned to the Letter of Credit Issuer undrawn and marked "canceled" or
(ii) if the Borrowers are unable to do so in whole or in part, either (a)
provide a "back-to-back" letter of credit to the Letter of Credit Issuer in
a form satisfactory to the Letter of Credit Issuer and the Agent (in their
sole discretion), issued by a bank satisfactory to the Letter of Credit
Issuer and the Agent (in their sole discretion), in an amount equal to 105%
of the then undrawn stated amount of all outstanding Letters of Credit
issued by the Letter of Credit Issuer or (b) deposit cash in the Cash
Collateral Account in an amount equal to 105% of the Letter of Credit
Outstandings, such cash to be remitted to the Borrowers upon the
expiration, cancellation or other termination or satisfaction of the Letter
of Credit Outstandings.
2.2 Loan and Letter of Credit Procedures.
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(A) Making of Revolving Loans. The Parent, on behalf of the Borrowers,
shall give the Agent prior notice of each Borrowing of Revolving Loans
under this Agreement of at least three Business Days for Eurodollar Loans
and one Business Day for Base Rate Loans, Such notice of Borrowing shall be
irrevocable and shall specify the amount of the proposed Borrowing (which
shall not be less than $1,000,000 in the case of Eurodollar Loans and
$100,000 in the case of Base Rate Loans) and the date of such Borrowing
(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 12:00 p.m. (Chicago, Illinois time) on the third Business
Day in the case of Eurodollar Loans and the first Business Day in the case
of Base Rate Loans, preceding the date on which such Borrowing is to be
made. Such notice of Borrowing shall specify whether the Borrowing then
being requested is to be a Borrowing of Base Rate Loans or Eurodollar
Loans. If no election is made as to the Type of Revolving Loan, such notice
shall be deemed a request for Borrowing of Base Rate Loans. The Agent shall
promptly notify each Lender 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 Lender
shall make its share of the Borrowing available at the Office no later than
12:00 noon (Chicago, Illinois time) in immediately available funds. Upon
receipt of the funds made available by the Lenders to fund any borrowing
under this Agreement, the Agent shall disburse such funds in the manner
specified in the notice of borrowing delivered by the Parent and shall use
reasonable efforts to make the funds so received from the Lenders available
to the Borrowers no later than 2:00 p.m. (Chicago, Illinois time).
(B) Making of the Term Loan. The Term Loan will be made on the Closing
Date. On or prior to the Closing Date, the Parent will give the Agent a
notice of Borrowing that will specify whether the Term Loan is to be a
Borrowing of Base Rate Loans, Eurodollar Loans or both. If no election is
made as to the Type of Loan, such notice shall be deemed a request for
Borrowing of Base Rate Loans. The Agent shall promptly notify each Lender
of its proportionate share of the Term Loan, the Type of Borrowing being
requested and the Interest Period or Interest Periods applicable thereto,
as appropriate. On the Closing Date, each Lender shall make its share of
the Term Loan available at the Office no later than 12:00 noon (Chicago,
Illinois time) in immediately available funds. Upon receipt of such funds,
the Agent shall disburse such funds in the manner specified in the notice
of Borrowing delivered by the Parent and shall use reasonable efforts to
make the funds so received from the Lenders available to the Borrowers no
later than 2:00 p.m. (Chicago, Illinois time).
(C) Issuance of Letters of Credit. The Parent, on behalf of the
Borrowers, shall give the Agent written notice that it is requesting that
the Letter of Credit Issuer issue a Letter of Credit and that the Agent
issue a Letter of Credit Guaranty not later than 12:00 p.m. (Chicago time)
at least ten Business Days preceding the requested date for issuance of
such Letter of Credit. Such notice of Letter of Credit shall specify (i)
that the requested Letter of Credit is either a commercial Letter of Credit
or a standby Letter of Credit, (ii) the face amount of the Letter of Credit
requested, (iii) the effective date (which shall be a Business Day) of
issuance of such Letter of Credit, (iv) the date on which such Letter of
Credit is to expire, (v) the Person for whose benefit such Letter of Credit
is to be issued, (vi) other relevant terms of such Letter of Credit and
(vii) the amount of the then outstanding Letter of Credit Obligations. The
Agent shall promptly notify each Lender of such request for a Letter of
Credit and the proposed date of issuance for such Letter of Credit.
(D) Use of Cash Collateral. Notwithstanding anything in this Agreement
to the contrary, the Borrowers shall not be permitted (i) to request a
Borrowing under Section 2.2(A) or request the issuance of a Letter of
Credit under Section 2.2(C) unless the Bankruptcy Court shall have entered
the Final Order or (ii) to request a Borrowing under Sections 2.2(A) or
2.2(B) or request the issuance of a Letter of Credit under Section 2.2(C)
unless the Borrowers shall at that time have the use of all cash collateral
subject to an order of the Bankruptcy Court for the purposes described in
Section 6.10.
2.3 Repayment of Loans; Evidence of Debt. Each Borrower
unconditionally promises, jointly and severally, to pay to the Agent for
the account of each Lender, in Dollars, (i) the principal amount of each
Loan, interest and other amounts payable by the Agent in connection with
any Loan and (ii) the amount of all Reimbursement Obligations, interest and
other amounts payable by the Agent under or in connection with any Letter
of Credit Guaranty, in each case when such amounts are due and payable,
irrespective of any claim, setoff, defense or other right that the
Borrowers may have at any time against the Agent or any other Person.
Subject to the provisions of Section 11, upon the maturity (whether by
acceleration or otherwise) of any of the Obligations under this Agreement
or any of the other Loan Documents, the Lenders shall be entitled to
immediate payment of such Obligations without further application to or
order of the Bankruptcy Court.
(B) All payments and prepayments to be made in respect of principal,
interest, Fees or other amounts due from the Borrowers under this Agreement
or the other Loan Documents shall be payable at or before 12:00 p.m.
(Chicago, Illinois time) on the day when due without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived.
Such payments shall be made to the Agent for the account of the Agent or
the Lenders, as the case may be, at the Agent Account in funds immediately
available at the Office without setoff, counterclaim or other deduction of
any nature. The Agent shall maintain a separate loan account (the
"Borrowers' Account") on its books in the name of the Borrowers in which
the Borrowers will be charged with Loans made by the Agent or the Lenders
to the Borrowers and with any other Obligations. The Borrowers and the
Lenders authorize the Agent to, and the Agent may, from time to time charge
the Borrowers' Account with any interest, Fees, expenses and other
Obligations that are due and payable under this Agreement or any Loan
Document. The Borrowers' Account will be credited one Business Day after
receipt of immediately available funds in the Agent Account for all amounts
actually received by the Agent. The Agent shall use reasonable efforts to
provide the Borrowers with copies or other evidence of all charges to the
Borrowers' Account promptly after such charges are made, provided that the
failure to provide such copies or other evidence to the Borrowers shall not
relieve the Borrowers of any of its obligations under this Agreement.
(C) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the Indebtedness of the Borrowers to such
Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(D) The Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made under this Agreement, 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 Borrowers to
each Lender under this Agreement and (iii) the amount of any sum received
by the Agent under this Agreement for the account of the Lenders and each
Lender's share thereof.
(E) The entries made in the accounts maintained under Sections 2.3(C)
or 2.3(D) shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that the failure of any Lender or
the Agent to maintain such accounts or any error therein shall not in any
manner affect the obligation of the Borrowers to repay the Obligations in
accordance with the terms of this Agreement.
(F) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrowers shall execute and deliver to
such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) in the
form of Exhibit A. Thereafter, the Loans evidenced by such promissory note
and interest thereon shall at all times (including after assignment under
Section 13.3) 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).
2.4 Interest on Loans. (A) Subject to the provisions of Section 2.4(D),
(i) each Revolving Loan that is a Base Rate 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 to the Base Rate plus 1.00% and (ii)
each Borrowing under the Term Loan that is a Base Rate 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 to the Base Rate plus 2.00%.
(B) Subject to the provisions of Section 2.4(D), (i) each Revolving
Loan that is a 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 Adjusted
LIBOR for such Interest Period in effect for such Borrowing plus 3.50% and
(ii) each Borrowing under the Term Loan that is a 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 Adjusted LIBOR for such Interest Period in
effect for such Borrowing plus 4.50%.
(C) Accrued interest on all Loans shall be payable in arrears on each
Interest Payment Date applicable thereto, at maturity (whether by
acceleration or otherwise), after such maturity on demand and, with respect
to Eurodollar Loans, upon any repayment or prepayment thereof (on the
amount prepaid). Interest in respect of any Loan under this Agreement 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 under Section 2.5.
(D) Effective immediately upon the occurrence of any Event of Default
and for as long thereafter as such Event of Default shall be continuing,
the principal balance of all Loans and of all other Obligations, shall bear
interest at a rate that is 2.00% per annum in excess of the rate of
interest that is otherwise applicable to such Loans and other Obligations
from time to time.
2.5 Conversion and Continuation of Loans. Loans shall be either Base
Rate Loans or Eurodollar Loans as the Borrowers may request subject to and
in accordance with Sections 2.2(A), 2.5(B) and 2.5(C); provided that all
Loans made pursuant to the same Borrowing shall, unless otherwise
specifically provided in this Agreement, be Loans of the same Type. Each
Lender may fulfill its Revolving Commitment or its commitment to make the
Term Loan with respect to any Eurodollar Loan or Base Rate Loan by causing
any lending office of such Lender to make such Loan; provided that any such
use of a lending office shall not affect the obligation of the Borrowers to
repay such Loan in accordance with the terms of this Agreement. Each Lender
shall, subject to its overall policy considerations, use reasonable efforts
(but shall not be obligated) to select a lending office that will not
result in the payment of increased costs by the Borrowers under Section
3.1. Subject to the provisions of Sections 2.2(A), 2.5(B) and 2.5(C),
Borrowings of Loans of more than one Type may be incurred at the same time;
provided that no more than three Borrowings of Eurodollar Loans may be
outstanding at any time.
(B) The Borrowers 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. (Chicago, Illinois time)
on the third Business Day preceding the date of any such conversion or
continuation), (i) to convert any outstanding Borrowing or Borrowings of
Loans of one Type (or a portion thereof) with a Borrowing of Loans of the
other Type or (ii) to continue an outstanding Borrowing of Eurodollar Loans
for an additional Interest Period, subject to the following:
(a) as a condition to the conversion of Base Rate Loans to
Eurodollar Loans and to the continuation of Eurodollar Loans
for an additional Interest Period, no Default or Event of
Default shall have occurred and be continuing at the time of
such conversion or continuation;
(b) if less than a full Borrowing of Loans shall be converted or
continued, such conversion or continuation shall be made pro
rata among the Lenders in accordance with the respective
principal amounts of the Loans comprising such Borrowing held
by the Lenders immediately prior to such conversion or
continuation;
(c) the aggregate principal amount of Loans being converted shall
be at least $1,000,000; provided that no partial conversion of
a Borrowing of Eurodollar Loans shall result in the Eurodollar
Loans remaining outstanding pursuant to such Borrowing being
less than $1,000,000 in aggregate principal amount;
(d) each Lender shall effect each conversion or continuation by
applying the proceeds of its new Eurodollar Loan or Base Rate
Loan, as the case may be, to its Loan being converted or
continued;
(e) the Interest Period with respect to a Borrowing of Eurodollar
Loans effected by a conversion or in respect to the Borrowing
of Eurodollar Loans being continued as Eurodollar Loans shall
commence on the date of conversion 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 converted or continued
only on the last day of an Interest Period applicable thereto;
and
(g) each request for a conversion or continuation of a Borrowing of
Eurodollar Loans that fails to state an applicable Interest
Period shall be deemed to be a request for an Interest Period
of one month.
(C) In the event that the Borrowers shall not give notice to
conversion of any Borrowing of Eurodollar Loans or to continue such
Borrowing as Eurodollar Loans or shall not be entitled to convert or
continue such Borrowing as Eurodollar Loans, in each case as provided
above, such Borrowing shall automatically be converted with a Borrowing of
Base Rate Loans at the expiration of the then-current Interest Period. The
Agent shall, after it receives notice from the Borrowers, promptly give
each Lender notice of any conversion or continuation, in whole or part, of
any Loan made by such Lender.
2.6 Reduction of Revolving Commitment; Prepayments.
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(A) Reduction and Termination of Revolving Commitment. Upon at least
two Business Days' prior written notice to the Agent, the Borrowers 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
Revolving Commitments shall be in the principal amount of $1,000,000 or any
integral multiple thereof; provided that the Borrowers may not reduce the
Total Revolving Commitment below $10,000,000 without reducing the Total
Revolving Commitment in full. Simultaneously with each reduction or
termination of the Revolving Commitments, the Borrowers shall pay to the
Agent for the account of each Lender the Commitment Fee accrued on the
amount of the Revolving Commitment of such Lender so terminated or reduced
through the date thereof. Any reduction of the Revolving Commitments under
this Section 2.6(A) shall be applied pro rata to reduce the Revolving
Commitment of each Lender.
(B) Mandatory Prepayments. (i) If at any time the aggregate principal
amount of the outstanding Revolving Loans plus the aggregate Letter of
Credit Outstandings exceeds the lesser of (a) the Total Revolving
Commitment and (b) the Borrowing Base, the Borrowers will within three
Business Days (1) prepay the Revolving Loans in an amount necessary to
cause the aggregate principal amount of the outstanding Revolving Loans
plus the aggregate Letter of Credit Outstandings to be equal to or less
than the Total Revolving Commitment or Borrowing Base, as the case may be,
and (2) if, after giving effect to the prepayment in full of the aggregate
of the Revolving Loans, the aggregate Letter of Credit Outstandings in
excess of the amount of cash held in the Cash Collateral Account exceeds
the Total Revolving Commitment or the Borrowing Base, as the case may be,
deposit into the Cash Collateral 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 Cash Collateral Account so exceeds the Total
Revolving Commitment or the Borrowing Base, as the case may be.
(ii) The Borrowers agree to make a prepayment of the Term Loan for
each fiscal year (commencing with the fiscal year ending September 30,
2000), on the date the financial statements described in Section 7.1(A) are
due for such fiscal year, in an amount equal to 50% of Excess Cash Flow for
such fiscal year. Any such prepayments of the Term Loan pursuant to this
Section 2.6(B)(ii) shall be applied to the remaining installments thereof
in the inverse order of maturity.
(iii) As soon as practicable, but no later than three Business Days
after the receipt of any Net Disposition Proceeds by any Borrower or
Subsidiary, the Borrowers will deliver to the Agent a calculation of the
amount of such Net Disposition Proceeds and make a mandatory prepayment of
the Loans in an amount equal to 100% of such Net Disposition Proceeds to be
applied as follows: first, to the remaining installments of the Term Loan
in the inverse order of maturity until repaid in full; second, to repay
Revolving Loans until reduced to zero, and third to be deposited into the
Cash Collateral Account an amount equal to 105% of the amount by which the
aggregate Letter of Credit Outstandings is in excess of the amount of cash
held in the Cash Collateral Account.
(iv) As soon as practicable, but no later than 60 days following the
receipt by any Borrower or Subsidiary of any Net Casualty Proceeds in
excess of $50,000 (individually or in the aggregate over the course of a
calendar year), the Borrowers will make a mandatory prepayment of the Loans
in an amount equal to 100% of all Net Casualty Proceeds, to be applied as
follows: first, to the remaining installments of the Term Loan in the
inverse order of maturity until repaid in full; second, to repay Revolving
Loans until reduced to zero, and third to be deposited into the Cash
Collateral Account an amount equal to 105% of the amount by which the
aggregate Letter of Credit Outstandings is in excess of the amount of cash
held in the Cash Collateral Account; provided that (viii) no mandatory
prepayment of Net Casualty Proceeds shall be required (a) if the Parent
notifies the Agent no later than 60 days following the date of the casualty
of the Borrowers' good faith intention to apply any Net Casualty Proceeds
relating to such casualty to the rebuilding or replacement of such damaged,
destroyed or condemned assets or property and (b) to the extent the
Borrowers use such Net Casualty Proceeds to begin rebuilding or replacing
the damaged, destroyed or condemned assets or property within 180 days
following the receipt of such Net Casualty Proceeds and continues
diligently to complete such rebuilding or replacement of such damaged,
destroyed or condemned assets or property within the time reasonably
required therefor (the "Rebuilding and Replacement Work"), with the amount
of Net Casualty Proceeds unused after the completion of such Rebuilding and
Replacement Work being applied to the Loans as set forth in this Section
2.6(B)(iv).
(v) Simultaneously with the reduction of the Total Revolving
Commitment to zero under Section 2.6(A), the Borrowers will make a
mandatory prepayment of the outstanding principal amount of the Term Loan.
(C) Optional Prepayments. The Borrowers have the right at any time and
from time to time to prepay any Loans, in whole or in part, (i) with
respect to Eurodollar Loans, upon at least three Business Days' prior
written notice to the Agent and (ii) with respect to Base Rate Loans on the
same Business Day if written notice is received by the Agent prior to 12:00
noon (Chicago, Illinois time) and thereafter upon at least one Business
Day's prior written notice to the Agent; provided that (a) each such
partial prepayment shall be in multiples of $100,000, (b) no prepayment of
Eurodollar Loans shall be permitted under this Section 2.6(C) 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
Section 3.5(A) and (c) 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 Borrowers to prepay such Loan by the
amount and on the date stated therein. The Agent shall, promptly after
receiving notice from a Borrower under this Section 2.6(C), notify each
Lender of the principal amount of the Loans held by such Lender that are to
be prepaid, the prepayment date and the manner of application of the
prepayment.
(D) Application of Payments. Any partial prepayment of the Loans by
the Borrowers under Sections 2.6(C) or 3.5 shall be applied as specified by
the Borrowers or, in the absence of such specification, as determined by
the Agent; provided that in the latter case no Eurodollar Loans shall be
prepaid under Section 2.6(C) to the extent that such Loan has an Interest
Period ending after the required date of prepayment unless and until all
outstanding Base Rate Loans and Eurodollar Loans with Interest Periods
ending on such date have been repaid in full.
2.7 Fees.
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(A) Facility Fee. The Borrower shall pay to the Agent, for the
respective accounts of the Agent and the Lenders, a facility fee of
$750,000 payable on the Closing Date. The Agent acknowledges receipt of
$250,000 prior to the Closing Date that will be applied to the fee
described in this Section 2.7(A).
(B) Commitment Fee. The Borrower shall pay to the Agent, for the
respective accounts of the Agent and the Lenders, a commitment fee (the
"Commitment Fee") for the period commencing on the Closing Date to the
Termination Date, computed (on the basis of the actual number of days
elapsed over a year of 360 days) at the rate of 0.50% per annum on the
average daily Unused Total Commitment. Such Commitment Fee, to the extent
then accrued, shall be payable (i) monthly, in arrears, on the first
calendar day of each month, (ii) on the Termination Date and (iii) as
provided in Section 2.6(A), upon any reduction or termination in whole or
in part of the Total Revolving Commitment.
(C) Letter of Credit Fees. The Borrower shall pay with respect to each
Letter of Credit (i) to the Agent on behalf of the Lenders a fee calculated
(on the basis of the actual number of days elapsed over a year of 360 days)
at the rate of 2.00% per annum on the undrawn face amount of such Letter of
Credit Outstandings and (ii) to the Agent for the account of the Letter of
Credit Issuer, such fees and charges in connection with the issuance and
processing of the Letters of Credit issued by the Letter of Credit Issuer
as are customarily imposed by the Letter of Credit Issuer from time to time
in connection with letter of credit transactions. Accrued fees described in
clause (i) above in respect of each Letter of Credit shall be due and
payable monthly in arrears on the first calendar day of each month and on
the Termination Date. Accrued fees described in clause (ii) above in
respect of each Letter of Credit shall be payable at times to be determined
by the Letter of Credit Issuer and the Agent.
(D) Agent's Fee. The Borrower shall pay to the Agent, for its own
account, an annual agency fee of $100,000 payable on the Closing Date and
each anniversary thereof.
(E) Audit Fees. The Borrowers will pay to the Agent, on the last day
of each month in which an audit, Account verification, inventory analysis
or other business analysis is performed by or for the benefit of the Agent
with respect to any Borrower, an amount equal to the sum of (i) audit fees
in an amount equal to $750 per day for each person employed to perform such
audit, verification or analysis and (ii) all reasonable out-of-pocket costs
or expenses incurred by the Agent in the performance of any such audit,
verification or analysis.
(G) 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 Lenders, as provided in this Agreement. Once paid, none
of the Fees shall be refundable under any circumstances.
2.8 Pro Rata Treatment. All payments and repayments of principal and
interest in respect of the Loans (except as provided in Sections 3.1 and
3.2) shall be made pro rata among the Lenders in accordance with the then
outstanding principal amount of the Loans or participations in any Letter
of Credit Guaranty and all Letter of Credit Outstandings and all payments
of Commitment Fees and Letter of Credit Fees (other than those payable to
the Letter of Credit Issuer) shall be made pro rata among the Lenders in
accordance with their respective Commitments. All payments by the Borrowers
under this Agreement shall be (i) net of any tax applicable to the
Borrowers and (ii) made in Dollars in immediately available funds at the
Office by 12:00 noon (Chicago, Illinois time) on the date on which such
payment shall be due.
2.9 No Discharge; Survival of Claims. Each Borrower agrees that (i)
its obligations under this Agreement shall not be discharged by the entry
of an order confirming a Plan of Reorganization (and each of the Borrowers,
under section 1141(d)(4) of the Bankruptcy Code, waives any such discharge)
and (ii) the Superpriority Claim granted to the Agent and the Lenders
pursuant to the Final Order and described in Section 4.1 and the Liens
granted to the Agent pursuant to the Final Order and described in Section 4
shall not be affected in any manner by the entry of an order confirming a
Plan of Reorganization.
SECTION 3: CHANGE IN CIRCUMSTANCES; INCREASED COSTS
3.1 Reserve Requirements; Change in Circumstances. (A) Notwithstanding
any other provision in this Agreement to the contrary, if after the Closing
Date 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 Lender of the
principal of or interest on any Eurodollar Loan made by such Lender or any
fees or other amounts payable under this Agreement (other than changes 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 Lender by the
jurisdiction in which such Lender 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 Lender would not be subject to tax
but for 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 Lender (except any such reserve requirement that is
reflected in Adjusted LIBOR) or shall impose on such Lender or the London
interbank market any other condition affecting this Agreement or the
Eurodollar Loans made by such Lender, and the result of any of the
foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan or to reduce the amount of any sum received
or receivable by such Lender under this Agreement (whether of principal,
interest or otherwise) by an amount deemed by such Lender to be material,
then the Borrowers will pay to such Lender in accordance with Section
3.1(C) such additional amount or amounts as will compensate such Lender for
such additional costs incurred or reduction suffered.
(B) If any Lender shall have determined that the adoption or
effectiveness after the Closing Date 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 Lender (or
any lending office of such Lender) or any Lender'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 Lender's
capital or on the capital of such Lender's holding company, if any, as a
consequence of this Agreement, the Loans made by such Lender, such Lender's
Revolving Commitment or the issuance of, or participation in, any Letter of
Credit by such Lender to a level below that such Lender or such Lender's
holding company could have achieved but for such adoption, change or
compliance (taking into account Lender's policies and the policies of such
Lender's holding company with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time the Borrowers
shall pay to such Lender such additional amount or amounts as will
compensate such Lender or such Lender's holding company for any such
reduction suffered.
(C) A certificate of a Lender setting forth such amount or amounts as
shall be necessary to compensate such Lender or its holding company as
specified in Sections 3.1(A) and 3.1(B), as the case may be, shall be
delivered to the Parent and shall be conclusive absent manifest error. The
Borrowers shall pay each Lender the amount shown as due on any such
certificate delivered to it within 10 days after its receipt of the same.
Any Lender receiving any such payment shall promptly make a refund thereof
to the Borrowers 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 Lender 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 Lender's right to demand compensation with respect to such
period or any other period. The protection of this Section 3.1 shall be
available to each Lender regardless of any possible contention of the
invalidity or inapplicability of the law, rule, regulation, guideline or
other change or condition that has occurred or been imposed.
3.2 Change in Legality. (A) Notwithstanding anything in this Agreement
to the contrary. if (i) 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 Lender to make or maintain a Eurodollar Loan or to give effect to its
obligations as contemplated by this Agreement with respect to a Eurodollar
Loan or (ii) at any time any Lender determines that the making or
continuance of any of its Eurodollar Loans has become impracticable as a
result of a contingency occurring after the Closing Date that adversely
affects the London interbank market or the position of such Lender in such
market, then, by written notice to the Parent, such Lender may (a) declare
that Eurodollar Loans will not thereafter be made by such Lender under this
Agreement, whereupon any request by the Borrowers for a Eurodollar Loan
shall, as to such Lender only, be deemed a request for an Base Rate Loan
unless such declaration shall be subsequently withdrawn and (b) require
that all outstanding Eurodollar Loans made by it be converted to Base Rate
Loans, in which event all such Eurodollar Loans shall be automatically
converted to Base Rate Loans as of the effective date of such notice as
provided in Section 3.2(B). In the event any Lender shall exercise its
rights under clause (a) or (b) above, all payments and prepayments of
principal that would otherwise have been applied to repay the Eurodollar
Loans that would have been made by such Lender or the converted Eurodollar
Loans of such Lender shall instead be applied to repay the Base Rate Loans
made by such Lender in lieu of, or resulting from the conversion of, such
Eurodollar Loans.
(B) A notice to the Parent by any Lender under Section 3.2(A) 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 Parent.
3.3 Taxes. (A) Any and all payments by a Borrower under this Agreement
shall be made free and clear of and without deduction for any and all
current or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding (i) taxes
imposed on or measured by the net income or overall gross receipts of the
Agent or any Lender (or any transferee or assignee thereof, including a
participation holder (any such entity being called a "Transferee")) and
franchise taxes imposed on the Agent or any Lender (or Transferee) by the
United States of America or any jurisdiction under the laws of which the
Agent or any such Lender (or Transferee) is organized or in which the
applicable lending office of any such Lender (or Transferee) is located or
any political subdivision thereof or by any other jurisdiction or by any
political subdivision or taxing authority therein other than a jurisdiction
in which the Agent or such Lender would not be subject to tax but for the
execution and performance of this Agreement and (ii) taxes, levies,
imposts, deductions, charges or withholdings ("Amounts") with respect to
payments under this Agreement to a Lender (or Transferee) in accordance
with laws in effect on the later of the Closing Date and the date such
Lender (or Transferee) becomes a Lender (or Transferee, as the case may
be), but not excluding, with respect to such Lender (or Transferee), any
increase in such Amounts solely as a result of any change in such laws
occurring after such later date or any Amounts that would not have been
imposed but for actions (other than actions contemplated by this Agreement)
taken by the Borrowers after such later date (all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities,
"Taxes"). If a Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable under this Agreement to the Lenders (or
any Transferee) or the Agent, (i) the sum payable shall be increased by the
amount necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) such
Lender (or Transferee) or the Agent (as the case may be) shall receive an
amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrowers shall make such deductions and (iii) the Borrowers
shall pay the full amount deducted to the relevant taxing authority or
other Governmental Authority in accordance with applicable law.
(B) In addition, the Borrowers agree to pay any current or future
stamp or documentary taxes or any other excise or property taxes, charges,
assessments or similar levies that arise from any payment made under this
Agreement or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or any other Loan Document (all such
changes, "Other Taxes").
(C) The Borrowers will indemnify each Lender (or Transferee) and the
Agent for the full amount of Taxes and Other Taxes paid by such Lender (or
Transferee) or the Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted by the relevant taxing authority or other Governmental Authority.
Such indemnification shall be made within 30 days after the date any Lender
(or Transferee) or the Agent, as the case may be, makes written demand
therefor. If a Lender (or Transferee) or the Agent shall become aware that
it is entitled to receive a refund in respect of Taxes or Other Taxes as to
which it has been indemnified by the Borrowers under this Section 3.3(C),
it shall promptly notify the Parent of the availability of such refund and
shall, within 30 days after receipt of a request by a Borrower, apply for
such refund at the Borrowers' expense. If any Lender (or Transferee) or the
Agent receives a refund in respect of any Taxes or Other Taxes as to which
it has been indemnified by the Borrowers under this Section 3.3(C), it
shall promptly notify the Parent of such refund and shall, within 30 days
after receipt of a request by a Borrower (or promptly upon receipt, if a
Borrower has requested application for such refund under this Section
3.3(C)), repay such refund to the Borrowers (to the extent of amounts that
have been paid by the Borrowers under this Section 3.3(C) with respect to
such refund plus interest that is received by the Lender (or Transferee) or
the Agent as part of the refund), net of all out-of-pocket expenses of such
Lender (or Transferee) or the Agent and without additional interest
thereon; provided that the Borrowers, upon the request of such Lender (or
Transferee) or the Agent, agree to return such refund (plus penalties,
interest or other charges) to such Lender (or Transferee) or the Agent in
the event such Lender (or Transferee) or the Agent is required to repay
such refund. Nothing contained in this Section 3.3(C) shall require any
Lender (or Transferee) or the Agent to make available any of its tax
returns (or any other information relating to its taxes that it deems to be
confidential).
(D) Within 30 days after the date of any payment of Taxes or Other
Taxes withheld by a Borrower in respect of any payment to any Lender (or
Transferee) or the Agent, the Borrowers will furnish to the Agent the
original or a certified copy of a receipt evidencing payment thereof.
(E) Without prejudice to the survival of any other agreement contained
in this Section 3.3, such agreements and obligations survive the payment in
full of the principal of and interest on all Loans.
(F) Each Lender (or Transferee) that is organized under the laws of a
jurisdiction outside the United States of America shall, if legally able to
do so, prior to the immediately following due date of any payment by a
Borrower under this Agreement, deliver to the Parent such certificates,
documents or other evidence, as required by the Code or Treasury
Regulations issued pursuant thereto, including (i) Internal Revenue Service
Form W-8 or W-9 and (ii) Internal Revenue Service Form 1001 or Form 4224
and any other certificate or statement of exemption required by Treasury
Regulation Section 1.1441-1, 1.1441-4 or 1.1441-6(c) or any subsequent
version thereof or successors thereto, properly completed and duly executed
by such Lender (or Transferee) establishing that such payment is (a) not
subject to United States federal withholding tax under the Code because
such payment is effectively connected with the conduct by such Lender (or
Transferee) of a trade or business in the United States of America or (b)
totally exempt from United States federal withholding tax or subject to a
reduced rate of such tax under a provision of an applicable tax treaty.
Unless the Borrowers and the Agent have received forms or other documents
satisfactory to them indicating that such payments under this Agreement are
not subject to United States federal withholding tax or are subject to such
tax at a rate reduced by an applicable tax treaty, the Borrowers or the
Agent shall withhold taxes from such payments at the applicable statutory
rate.
(G) The Borrowers shall not be required to pay any additional amounts
to any Lender (or Transferee) in respect of United States federal
withholding tax under Section 3.3(A) if the obligation to pay such
additional amounts would not have arisen but for a failure by such Lender
(or Transferee) to comply with the provisions of Section 3.3(F).
(H) Any Lender (or Transferee) claiming any additional amounts payable
under this Section 3.3 shall use reasonable efforts (consistent with legal
and regulatory restrictions) to file any certificate or document requested
by the Borrowers or to change the jurisdiction of its applicable lending
office if the making of such a filing or change would avoid the need for or
reduce the amount of any such additional amounts that may thereafter accrue
and would not, in the sole reasonable determination of such Lender, be
otherwise materially disadvantageous to such Lender (or Transferee).
3.4 Inability to Determine LIBOR. 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 Borrowers absent
manifest error) that reasonable means do not exist for ascertaining
Adjusted LIBOR, the Agent shall, as soon as practicable thereafter, give
written or telegraphic notice of such determination to the Parent and the
Lenders, and any request by the Borrowers for a Borrowing of Eurodollar
Loans (including pursuant to a conversion or continuation of Eurodollar
Loans) under Section 2.2, 2.5(B) or 2.5(C) shall be deemed a request for a
Borrowing of Base Rate 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 Base Rate Loans.
3.5 Funding Losses. (A) The Borrowers shall reimburse each Lender 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 Base Rate
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 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 Borrowers deliver a notice
of borrowing under Section 2.2 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 Lender of
its obligations under this Agreement. Such loss shall be the amount as
reasonably determined by such Lender as the excess, if any, of (a) the
amount of interest which would have accrued to such Lender on the amount so
paid or not borrowed at a rate of interest equal to Adjusted LIBOR for such
Loan, for the period from the date of such payment or failure to borrow to
the last day (1) in the case of a payment or conversion of Base Rate Loans
other than on the last day of the Interest Period for such Loan, of the
then current Interest Period for such Loan or (2) 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 Lender on such amount by placing
such amount on deposit for a comparable period with leading banks in the
London interbank market. Each Lender shall deliver to the Parent from time
to time one or more certificates setting forth the amount of such loss as
determined by such Lender.
(B) In the event the Borrowers fail to prepay any Loan on the date
specified in any prepayment notice delivered under Section 2.6(C), the
Borrowers on demand by any Lender shall pay to the Agent for the account of
such Lender any amounts required to compensate such Lender for any loss
incurred by such Lender 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 Lender to fulfill deposit
obligations incurred in anticipation of such prepayment, but without
duplication of any amounts paid under Section 3.5(A). Each Lender shall
deliver to the Borrowers from time to time one or more certificates setting
forth the amount of such loss as determined by such Lender.
SECTION 4: PRIORITY; COLLATERAL
4.1 Priority and Liens. Each Borrower covenants, represents and
warrants that, upon entry of the Final Order, the Obligations (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 105, 326, 328,
503(b), 506(c), 507(a), 507(b) and 726 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 prepetition
and postpetition property of the Borrowers (other than the portion of the
capital stock of each Foreign Subsidiary that is not subject to a Lien
securing the Existing Agreements) and on all cash maintained in the Cash
Collateral Account, the Concentration Account and each Depository 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 prepetition and postpetition property of the
Borrowers (other than the property that is subject to existing Liens that
presently secure the obligations of the Borrowers and their respective
Subsidiaries under the Existing Agreements, as to which the Lien in favor
of the Agent and the Lenders will be as described in clause (iv) below)
that is subject to valid and perfected Liens in existence on the Petition
Date or to valid Liens in existence on the Petition Date that are perfected
subsequent to the Petition Date as permitted by section 546(b) of the
Bankruptcy Code or to Permitted Liens, junior to such valid and perfected
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
property of the Borrowers, including without limitation, Accounts,
instruments, contract rights, chattel paper, general intangibles
(including, without limitation, causes of action), Inventory, equipment,
fixtures, documents of title, intellectual property, rights under license
agreements, real estate (whether owned or leased) and all proceeds thereof,
upon which a Lien has been granted (a) under the Existing Agreements to
secure the Borrowers' and their respective Subsidiaries' prepetition
Indebtedness under the Existing Agreements and (b) in connection with
Adequate Protection Obligations, in all cases subject only to (1) the
Carve-Out and (2) any Liens in existence on the Petition Date to which the
Liens described in clauses (a) and (b) above are subject or become subject
subsequent to the Petition Date as permitted by section 546(b) of the
Bankruptcy Code. The Lenders agree that so long as no Default or Event of
Default shall have occurred, the Borrowers shall be permitted to pay
compensation and reimbursement of expenses allowed and payable under 11
U.S.C. ss. 330 and 11 U.S.C. ss. 331, as the same may be due and payable,
and such payments shall not reduce the Carve-Out; provided that following
the Termination Date amounts in the Cash Collateral Account shall not be
subject to the Carve-Out.
4.2 Collateral. (A) To secure payment of the Obligations and
performance of its obligations under this Agreement and the other Loan
Documents, each Borrower grants, mortgages, hypothecates and pledges to the
Agent on behalf of the Lenders a continuing lien upon and security interest
in all of such Borrower's property, wherever located, whether now or
hereafter existing, owned, licensed, leased (to the extent of such
Borrower's leasehold interest in such property), consigned (to the extent
of such Borrower's ownership interest in such property), arising or
acquired, including, without limitation, all of such Borrower's right,
title and interest in all Accounts, general intangibles (including without
limitation such Borrower's causes of action, contract rights, intellectual
property, rights under licencing agreements and tax refunds), chattel
paper, instruments, documents, documents of title, Inventory, equipment,
deposit accounts, goods, investment property, insurance proceeds of or
relating to any of the foregoing, actions with respect to preferential
transfers, fraudulent conveyances and other avoidance power claims and any
recoveries of cash or proceeds of property representing recoveries under
sections 544, 547, 548, 549, 550 or 553 of the Bankruptcy Code, books and
records relating to any of the foregoing and accessions and additions to,
substitutions for, and replacements, products and proceeds of any of the
foregoing.
(B) To secure payment of the Obligations and performance of its
obligations under this Agreement and the other Loan Documents, each
Borrower assigns and conveys as security, grants a security interest in,
hypothecates, mortgages, pledges and sets over unto the Agent on behalf of
the Lenders all of the right, title and interest of such Borrower in all
real property the title to which is held by a Borrower, or the possession
of which is held by the Borrowers under a leasehold interest, together in
each case with all of the right, title and interest of such Borrower in and
to all buildings, improvements, and fixtures related thereto, any lease or
sublease thereof, all general intangibles relating thereto and all proceeds
thereof. If at any time after the Closing Date any Borrower acquires any
fee interest in real property, such Borrower shall promptly notify the
Agent thereof.
(C) To secure payment of the Obligations and performance of its
obligations under this Agreement and the other Loan Documents, each
Borrower grants, mortgages, hypothecates and pledges to the Agent for the
benefit of the Lenders a continuing lien upon and security interest in (i)
all of the outstanding shares of capital stock of any Subsidiary of such
Borrower (other than the portion of the capital stock of each Foreign
Subsidiary that is not subject to a Lien securing the Existing Agreements),
(ii) any securities, dividends or distributions and any other right or
property at any time and from time to time receivable or otherwise
distributed in respect of or in exchange for any or all of the foregoing
and any other property substituted or exchanged for the foregoing and (iii)
any and all products or proceeds of the foregoing.
4.3 Security Interest in Accounts. Pursuant to section 364(c)(2) of
the Bankruptcy Code, each Borrower assigns and pledges to the Agent, for
its benefit and for the ratable benefit of the Lenders, and grants to the
Agent, for its benefit and for the ratable benefit of the Lenders, a first
priority security interest, senior to all other Liens, if any, in all of
such Borrower's right, title and interest in and to the Cash Collateral
Account, the Concentration Account and each Depository Account and any
direct investment of the funds contained therein. Cash held in the Cash
Collateral Account, the Concentration Account or any Depository Account
shall not be available for use by the Borrowers, whether pursuant to
section 363 of the Bankruptcy Code or otherwise.
4.4 Further Assurances. (A) Each Borrower acknowledges that, pursuant
to the Final Order, the Liens in favor of the Agent on behalf of the
Lenders in all of the Borrower's property shall be perfected without the
recordation of any financing statements or instruments of mortgage or
assignment. Each Borrower further agrees that, upon the request of the
Agent, such Borrower shall execute, acknowledge and deliver, at the sole
cost and expense of the Borrowers, all such further acts, deeds,
conveyances, mortgages, assignments, estoppel certificates, financing
statements, notices of assignment, transfers and assurances as the Agent
may require from time to time in order (i) to carry out more effectively
the purposes of this Agreement or any other Loan Document, (ii) to subject
to valid and perfected first priority Liens all the Collateral, (iii) to
perfect and maintain the validity, effectiveness and priority of any of the
Loan Documents and the Lien intended to be created thereby and (iv) to
better assure, convey, grant, assign, transfer and confirm unto the Agent,
the Lenders and the Letter of Credit Issuer the rights now or hereafter
intended to be granted to the Agent, the Lenders and the Letter of Credit
Issuer under this Agreement, any Loan Document or any other instrument
under which any Borrower may be or may hereafter become bound to convey,
mortgage or assign to the Agent, the Lenders and the Letter of Credit
Issuer.
(B) Without limiting the generality of Section 4.4(A), each Borrower
agrees that, upon the request of the Agent, it will (i) promptly execute,
deliver and record a first priority leasehold mortgage, leasehold deed of
trust or assignment of lease, in any case in form and substance acceptable
to the Agent, in favor of the Agent with respect to any lease of real
property, whether such Borrower is lessee or lessor (including, without
limitation, under a so-called ground lease or net lease), which Lease shall
expressly permit the mortgaging thereof to the Agent, contain
non-disturbance provisions reasonably satisfactory to the Agent and include
such other customary lender protections as may be reasonably required by
the Agent, (ii) promptly execute, deliver and record a first priority
mortgage or deed of trust (subject only to Permitted Liens) in favor of the
Agent covering such Borrower's real property interest in any real property
now or hereafter owned in fee simple, in form and substance satisfactory to
the Agent, and provide the Agent with a title insurance policy covering
such real property interest in an amount equal to the purchase price
thereof, a current ALTA survey thereof, a surveyor's certificate and such
other certificates, opinions and documents as may be requested by the
Agent, in each case in form and substance satisfactory to the Agent and
(iii) use its commercially reasonable efforts (but not requiring any
payment to be made by the Borrowers) to deliver to the Agent a landlord
waiver, in form and substance satisfactory to the Agent, executed by each
of the Borrowers' lessors of real property.
SECTION 5: CONDITIONS OF LENDING
5.1 Conditions Precedent to Initial Loans and Letters of Credit. The
obligation of the Lenders to make the initial Loans or the Letter of Credit
Issuer to issue the initial Letter of Credit is subject to the following
conditions precedent (which conditions precedent must be satisfied no later
than the earlier of (i) 60 days following the Petition Date and (ii) two
days after the entry of the Final Order):
(A) Loan Documents and other Closing Documents. The Agent shall have
received all of the following, each duly executed and dated the Closing
Date (or such earlier date as shall be satisfactory to the Agent), in form
and substance satisfactory to the Agent:
(i) this Agreement, any promissory notes requested under Section
2.3(F) and each other Loan Document;
(ii) the Budget; and
(iii) a certificate signed by a Responsible Officer on behalf of the
Borrowers dated as of the Closing Date, affirming the matters
set forth in Sections 5.2(C) and 5.2(D) as of the Closing Date.
(B) Supporting Documents. The Agent shall have received for each
Borrower:
(i) a copy of such Borrower's articles certificate of
incorporation, certificate of limited partnership, certificate
of formation or other instrument of organization, in each case
as amended, certified as of a recent date by the Secretary of
State of the state of its organization;
(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 such
Borrower 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
such Borrower dated the Closing Date and certifying (a) that
attached thereto is a true and complete copy of the by-laws,
partnership agreement, limited liability company agreement or
other operative document of such Borrower as in effect on the
Closing Date, (b) that attached thereto is a true and complete
copy of resolutions adopted by the board of directors, general
partner, managing member or other governing body of such
Borrower authorizing the Borrowings and Letter of Credit
extensions under this Agreement, the execution, delivery and
performance of this Agreement and the other Loan Documents and
the granting of the security interest in the Cash Collateral
Account, the Concentration Account and each Depository Account
and other Liens contemplated by the Loan Documents, (c) that
the charter documents of such Borrower have not been amended
since the date of the last amendment thereto indicated on the
certificate of the Secretary of State furnished under clause
(i) above and (d) as to the incumbency and specimen signature
of each officer of that entity executing this Agreement and the
other Loan Documents (such certificate to contain a
certification by another officer of such Borrower as to the
incumbency and signature of the officer signing the certificate
referred to in this clause (iii)).
(C) Final 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 Lenders shall have received a certified copy of
the Final Order in substantially the form of Exhibit B (with such
modifications as the Agent may approve in its discretion), which Final
Order will (i) have been entered by the Bankruptcy Court no later than 45
days after the Petition Date, (ii) have been entered, with the consent or
non-objection of a preponderance, as determined by the Agent in its sole
judgment, of the Existing Lenders, upon an application or motion of the
Borrowers 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, (iii) grant the Agent
and the Lenders the Superpriority Claim and the Liens described in Section
4.1. (iv) approve this Agreement and the other Loan Documents, (v) approve
the payment by the Borrowers of all of the Fees set forth in Section 2.7,
(vi) be in full force and effect and (vii) not have been stayed, reversed,
modified or amended in any respect. If the Final Order is the subject of a
pending appeal in any respect, neither the making of Loans nor the issuance
of Letters of Credit nor the performance by the Borrowers of any of their
respective obligations under this Agreement or the other Loan Documents or
under any other instrument or agreement referred to in this Agreement shall
be the subject of a presently effective stay pending appeal.
(D) Superpriority Claim. No other claim having a priority superior or
pari passu with those granted by the Final Order to the Agent and the
Lenders shall be granted while any portion of the Loans (or refinancing
thereof) or the commitment under this Agreement remains outstanding.
(E) Adequate Protection Obligations. The order of the Bankruptcy Court
with respect to the Adequate Protection Obligations shall be in form and
substance satisfactory to the Agent in its sole discretion.
(F) Bankruptcy Court Orders; Petitions. All of the Bankruptcy Court's
orders entered in the Cases (including, without limitation, the "first day
orders" entered by the Bankruptcy Court at the time of the commencement of
the Cases) and the voluntary petitions filed by each Borrower to commence
its Case shall be reasonably satisfactory in form and substance to the
Agent.
(G) Excess Availability. (i) The lesser of the Borrowing Base on the
Closing Date and the Total Revolving Commitment minus (ii) all Revolving
Loans and Letters of Credit to be made or issued on the Closing Date is
greater than or equal to $5,000,000.
(H) Interim Financing; Existing Lenders. All indebtedness, obligations
and liabilities of the Borrowers under the interim financing provided to
the Borrowers by the Existing Lenders on or about the Petition Date have
been repaid in full (or will be repaid with the proceeds of the Loans). The
Existing Lenders' claim under the Existing Agreements will have been
reduced by up to $36,500,000 as a result of (i) up to a $32,500,000 cash
payment from the Borrowers to the Existing Lenders on the Closing Date and
(ii) the retention by the Existing Lenders of the Existing Lender Claim.
Immediately after such reduction, the Existing Lenders will assign all of
their respective right, title and interest in and to the claim represented
by the Existing Agreements (other than that represented by the Existing
Lender Claim) to the Junior Lenders. The terms and conditions of the
Existing Lender Claim shall be satisfactory to the Agent. The Existing
Lender Claim shall be subordinated to the Obligations pursuant to a
subordination agreement in form and substance satisfactory to the Agent.
The Bankruptcy Court shall have entered an order in form and substance
satisfactory to the Agent with respect to the Existing Lender Claim and
such order shall (i) be in full force and effect and (ii) not have been
stayed, reversed, modified or amended in any respect without the prior
written consent of the Agent and the Required Lenders.
(I) Junior Facility. The Borrowers have received at least $18,000,000
from the Junior Facility, the terms and conditions of which are
satisfactory to the Agent. The Junior Facility shall be subordinated to the
Obligations pursuant to a subordination agreement in form and substance
satisfactory to the Agent. The Bankruptcy Court shall have entered an order
in form and substance satisfactory to the Agent with respect to the Junior
Facility and such order shall (i) be in full force and effect and (ii) not
have been stayed, reversed, modified or amended in any respect without the
prior written consent of the Agent and the Required Lenders.
(J) Corporate and Judicial Proceedings. All corporate, partnership,
limited liability company and similar proceedings, and all judicial
proceedings, and all instruments and agreements in connection with the
transactions among the Borrowers, the Agent and the Lenders 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.
(K) Cash Management System. The cash management system of the
Borrowers shall be satisfactory to the Agent and such cash management
system has been approved by the Bankruptcy Court pursuant to an order
acceptable to the Agent. The Borrowers shall have delivered to the Agent
(i) original depository account notices substantially in the form of
Exhibit C and (ii) blocked account agreements substantially in the form of
Exhibit D, in each case duly executed by the appropriate Borrowers, for
each of the financial institutions at which a Depository Account is
maintained on the Closing Date.
(L) Compliance with Laws. The Borrowers shall have granted the Agent
access to and the right to inspect all reports, audits and other internal
information of the Borrowers 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 Borrowers are in compliance in all
material respects with all applicable environmental laws and regulations
and be satisfied with the costs of maintaining such compliance.
(M) Other Conditions. Each of the conditions precedent set forth in
Section 5.2 have been satisfied. The Agent shall have received such other
documents as the Agent may reasonably request.
(N) Other Information. The Agent shall have received such information
(financial or otherwise) as may be reasonably requested by the Agent and
shall have discussed the Borrowers' business plan previously delivered to
the Agent with the Borrowers' management and shall be satisfied with the
nature and substance of such discussions.
5.2 Conditions Precedent to Each Loan and Each Letter of Credit. The
obligation of the Lenders to make each Loan and of the Letter of Credit
Issuer to issue each Letter of Credit, including the initial Revolving
Loans, the initial Letters of Credit and the Term Loan, 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 2.2.
(B) Letter of Credit Application. With respect a request for a Letter
of Credit, the Borrowers shall have executed and delivered to the Letter of
Credit Issuer a Letter of Credit Application and Reimbursement Agreement,
in form and substance satisfactory to the Agent, together with such other
certificates, documents and other papers and information as the Letter of
Credit Issuer or Agent may request and the terms of the proposed Letter of
Credit shall be satisfactory to the Agent in the exercise of its reasonable
discretion.
(C) 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 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.
(D) No Default. On the date of each Borrowing or the issuance of each
Letter of Credit, no Default or Event of Default shall have occurred and be
continuing.
(E) Orders. The Final 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 and the Required Lenders. If
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 any Borrower of any of their respective obligations under
any of the Loan Documents shall be the subject of a presently effective
stay pending appeal.
(F) Payment of Fees. The Borrowers shall have paid to the Agent the
then unpaid balance of all accrued and unpaid Fees then payable under this
Agreement.
(G) Borrowing Base Certificate. The Agent shall have received the
timely delivery of the most recent Borrowing Base Certificate (dated no
more than 14 days prior to the making of a Loan or the issuance of a Letter
of Credit) required to be delivered under this Agreement, which Borrowing
Base Certificate shall include supporting schedules as required by the
Agent.
The request by the Borrowers for, and the acceptance by the Borrowers
of, each extension of credit under the Agreement shall be deemed to be a
representation and warranty by the Borrowers that the conditions specified
in this Section 5.2 have been satisfied or waived at that time.
SECTION 6: REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to make Loans and issue or participate
in Letters of Credit, each Borrower jointly and severally represents and
warrants to the Agent and the Lenders as follows:
6.1 Organization and Authority. Each Borrower (i) is an organization
duly organized and validly existing under the laws of the State of its
organization and is duly qualified as a foreign organization and is in good
standing in each jurisdiction in which the failure to so qualify would have
a Material Adverse Effect, (ii) subject to the entry by the Bankruptcy
Court of the Final Order, has the requisite organizational power and
authority to effect the transactions contemplated by this Agreement and the
other Loan Documents and (iii) subject to the entry by the Bankruptcy Court
of the Final Order, has all requisite organizational 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.
6.2 Due Execution. Upon the entry by the Bankruptcy Court of the Final
Order, the execution, delivery and performance by each Borrower of the Loan
Documents to which it is a party (i) are within the respective
organizational powers of such Borrower, have been duly authorized by all
necessary organizational action, including the consent of shareholders
where required, and do not (a) contravene the charter or by-laws of
Borrower, (b) violate any law (including, without limitation, the
Securities Exchange Act of 1934, as amended) or regulation (including,
without limitation, Regulations T, U or X of the Board of Governors of the
Federal Reserve System of the United States) 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 Petition Date or any material lease,
agreement or other instrument entered into after the Petition Date binding
on such Borrower or any of its properties or (d) result in or require the
creation or imposition of any Lien upon any of the property of such
Borrower other than the Liens granted under the Loan Documents. The
execution, delivery and performance by each Borrower of each of the Loan
Documents to which it is a party 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 Final Order. Upon the
entry by the Bankruptcy Court of the Final Order, this Agreement has been
duly executed and delivered by each Borrower. This Agreement is, and each
of the other Loan Documents to which each Borrower is or will be a party,
when delivered, will be, a legal, valid and binding obligation of such
Borrower, enforceable against such Borrower in accordance with its terms
and the Final Order.
6.3 Disclosure. The information that has been delivered in writing by
the Borrowers or any of their respective Subsidiaries to the Agent or to
the Bankruptcy Court in connection with any Loan Document and any financial
statement delivered under any Loan Document (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 Borrowers or such Subsidiaries to be reasonable at the time such
projections were furnished.
6.4 Financial Statements. The Borrowers have furnished the Lenders
with copies of each financial statement described on Schedule 6.4. Such
financial statements present fairly the financial condition and results of
operations of the Borrowers and their respective Subsidiaries on a
consolidated basis as of such dates and for such periods and such balance
sheets and the notes thereto disclose all liabilities, direct or
contingent, of the Borrowers and their respective Subsidiaries as of the
dates thereof required to be disclosed by GAAP and such financial
statements were prepared in a manner consistent with GAAP, subject (in the
case of such fiscal quarter statement) to normal year end adjustments. No
Material Adverse Effect has occurred from that set forth in the Borrowers'
reviewed consolidated balance sheet dated January 29, 2000, other than
those that 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 previously made
available to the Agent).
6.5 Subsidiaries. No Borrower owns a Subsidiary, whether directly or
indirectly, other than as listed on Schedule 6.5. Each of the Persons
listed on Schedule 6.5 is a wholly owned, direct or indirect Subsidiary of
a Borrower.
6.6 Liens. Except for Liens existing on the Petition Date as reflected
on Schedule 6.6, there are no Liens of any nature whatsoever on any assets
of the Borrowers or any of their respective Subsidiaries other than (i)
Liens granted pursuant to the Existing Agreements, (ii) Permitted Liens,
(iii) Liens permitted under Section 9.1(ii) and (iv) Liens in favor of the
Agent and the Lenders. Neither a Borrower nor any Subsidiary is a party 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 a Borrower or a Subsidiary
or otherwise result in a violation of this Agreement other than the Liens
granted to the Agent and the Lenders as provided for in the Loan Documents.
6.7 Compliance with Law. (A) (i) Except as set forth in Schedule 6.7,
to the Borrowers' knowledge the operations of the Borrowers 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.
▇▇.▇▇. 6901 et seq., (ii) to the Borrowers' knowledge, none of the
operations of the Borrowers is the subject of any federal or state
investigation evaluating whether any remedial action involving a material
expenditure by a Borrower or any of its Subsidiaries 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 Borrowers' knowledge,
the Borrowers do not have any material contingent liability in connection
with any release of any Hazardous Waste or Hazardous Substance into the
environment.
(B) No Borrower 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, could reasonably be expected to have a
Material Adverse Effect.
6.8 Insurance. All policies of insurance of any kind or nature owned
by or issued to the Borrowers, 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 Borrowers.
6.9 The Final Order. On the date of the making of any Loan or the
issuance of any Letter of Credit, the Final Order shall have been entered
and shall not have been amended, stayed, vacated or rescinded. Upon the
maturity (whether by the acceleration or otherwise) of any of the
Obligations, the Lenders shall, subject to the provisions of Section 11.2,
be entitled to immediate payment of such Obligations, and to enforce the
remedies provided for under the Loan Documents, without further application
to or order by the Bankruptcy Court.
6.10 Use of Proceeds. The proceeds of the Loans shall be used (i) to
repay in full the interim financing provided to the Borrowers by the
Existing Lenders on or about the Petition Date in an amount up to
$5,000,000, (ii) to repay in part the Existing Lenders with respect to the
Existing Agreements on the Closing Date in an amount, together with the
proceeds of the Junior Facility, not to exceed $32,500,000 in the
aggregate, which repayment will be made in accordance with the Final Order
and as described in Section 5.2(H) (provided that the total repayments
permitted under clause (i) above and this clause (ii) may not exceed
$37,000,000), (iii) to pay fees and expenses relating to the Cases and (iv)
for working capital requirements of the Borrowers and their respective
Subsidiaries. The proceeds of the Term Loan may not be used for any purpose
other than to repay the Existing Lenders with respect to the Existing
Agreements as described in the preceding sentence. The proceeds of the
Loans and Letters of Credit may not be advanced to or funded to the Foreign
Subsidiaries; provided that the Borrowers may, from and after the Petition
Date, purchase product and inventory from the Foreign Subsidiaries and pay
for such purchases in the ordinary course of business on customary trade
terms consistent with past practice.
6.11 Litigation. Other than as set forth on Schedule 6.11, there are
no unstayed actions, suits or proceedings pending or, to the knowledge of
any Borrower or Subsidiary, threatened against or affecting any Borrower or
Subsidiary or any of their respective properties, before any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that could reasonably be expected to
have a Material Adverse Effect.
6.12 Governmental Regulation. No Borrower is limited in its ability to
incur Indebtedness or its ability to consummate the transactions
contemplated by the Loan Documents by reason of regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, or the Investment Company Act of 1940, or any other federal
or state statute or regulation. No Borrower is an entity that is required
to be registered as an investment company under the Investment Company Act
of 1940.
6.13 Payment of Taxes. Except as set forth on Schedule 6.13, all tax
returns and reports of each of the Borrowers required to be filed have been
timely filed (after giving effect to any extensions) and all taxes,
assessments, fees and other governmental charges shown to be due and
payable on said returns have been timely paid and all other taxes,
assessments, fees and other governmental charges imposed upon it or any of
its property by any Governmental Authority have been timely paid other than
any taxes, assessments, fees or other charges (i) which are being contested
in good faith by such Borrower by appropriate proceedings diligently
instituted and conducted and without danger of any material risk to the
Collateral and (ii) with respect to which a reserve or other appropriate
provision, if any, as is required in conformity with GAAP shall have been
made. No Borrower has any knowledge of any proposed assessment against it
or any other Borrower that has or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
6.14 Assets and Properties. Each Borrower has good and marketable
title or leasehold interests, as applicable, to all of its material assets
and property (tangible and intangible), and all such assets and property
are free and clear of all Liens except Liens securing the Obligations and
Permitted Liens. Substantially all of the assets and property owned by,
leased to or used by such Borrower are in good operating condition and
repair, ordinary wear and tear excepted, are free and clear of any known
defects except such defects as do not substantially interfere with the
continued use thereof in the conduct of normal operations, and are able to
serve the function for which they are currently being used, except in each
case where the failure of such asset to meet such requirements would not
have or is not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect. Neither this Agreement nor any other Loan
Document, nor any transaction contemplated under any Loan Document, will
affect any right, title or interest of such Borrower in and to any of such
assets in a manner that would have or is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect. The Borrowers'
registered patents, patent rights, trademarks, trademark rights, trade
names, trade name rights, service marks, service ▇▇▇▇ rights and
copyrights, and all licenses therefor, are listed on Schedule 6.14.
6.15 Bank Accounts. The Borrowers' Depository Accounts are listed on
Schedule 6.15(A). Except for the Depository Accounts, the Cash Collateral
Account, the Concentration Account and as set forth on Schedule 6.15(B), no
Borrower maintains a bank account or deposits funds with any financial
institution other than the Agent.
SECTION 7: REPORTING REQUIREMENTS
From the Closing Date and for so long as any Revolving Commitment is
in effect, any Letter of Credit remains outstanding (in a face amount in
excess of the amount of cash then held in the Cash Collateral Account or in
excess of the face amount of back-to-back letters of credit delivered, in
each case under Section 2.1(C)(xii)) or any amount remains outstanding or
unpaid under this Agreement, each Borrower agrees that, unless the Required
Lenders otherwise consent in writing, the Borrowers will, and will cause
their respective Subsidiaries to:
7.1 Financial Statements and Reports. Deliver to the Agent and each of
the Lenders:
(A) within 90 days after the end of each fiscal year, the Borrowers'
consolidated and consolidating balance sheet and related statement of
income and, with respect to the Borrowers' consolidated balance sheet, cash
flows, showing the financial condition of the Borrowers and their
respective Subsidiaries 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 financial statements to be audited by independent
public accountants of recognized national standing acceptable to the Agent
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 Responsible Officer
to the effect that such financial statements fairly present the financial
condition and results of operations of the Borrowers and their respective
Subsidiaries on a consolidated and consolidating basis in accordance with
GAAP;
(B) within 30 days after the end of each calendar month, the
Borrowers' consolidated and consolidating balance sheets and related
statements of income and, with respect to the Borrowers' consolidated
balance sheet, cash flows, showing the financial condition of the Borrowers
and their respective Subsidiaries on a consolidated and consolidating basis
as of the close of such month and the results of their operations during
such month, each certified by a Responsible Officer as fairly presenting
the financial condition and results of operations of the Borrowers and
their respective Subsidiaries on a consolidated and consolidating basis in
accordance with GAAP, subject to normal year-end audit adjustments;
(C) concurrently with any delivery of financial statements under
Section 7.1(A) or 7.11(B), as applicable, (i) a certificate of a
Responsible Officer (a) certifying that no Default or Event of Default has
occurred or, if such a Default or Event of Default 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 10 and (ii) a certificate (which certificate may
be limited to accounting matters and disclaim responsibility for legal
interpretations) of such accountants accompanying the audited financial
statements delivered under Section 7.1(A) certifying that, in the course of
the regular audit of the business of the Borrowers and their respective
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;
(D) as soon as available, but no more than 30 days after the end of
each month, the unaudited monthly cash flow reports of the Borrowers and
their respective Subsidiaries on a consolidated basis and as of the close
of such fiscal month and the results of their operations during such fiscal
period and the then elapsed portion of the fiscal year;
(E) within 30 days after the end of each calendar quarter, quarterly
financial projections for the following six fiscal month period;
(F) as soon as possible, and in any event within 45 days of the
Closing Date, a consolidated and consolidating pro forma balance sheet of
the Borrowers' and their respective Subsidiaries' financial condition as of
the Petition Date;
(G) 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 such commission or
with any national securities exchange, as the case may be;
(H) as soon as available and in any event (i) within 30 days after any
Borrower or any ERISA Affiliate 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 a Borrower or an ERISA
Affiliate has occurred and (ii) within 10 days after any Borrower or any
ERISA Affiliate knows or has reason to know that any other Termination
Event with respect to any such Plan has occurred, a statement of a
Responsible Officer describing such Termination Event and the action, if
any, which such Borrower or such ERISA Affiliate proposes to take with
respect thereto;
(I) promptly and in any event within 10 days after receipt thereof by
any Borrower or any ERISA Affiliates from the PBGC, copies of each notice
received by such Borrower or any such ERISA Affiliate of the PBGC's
intention to terminate any Single Employer Plan of such Borrower or such
ERISA Affiliate or to have a trustee appointed to administer any such Plan;
(J) 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 any Borrower or any
ERISA Affiliate;
(K) 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 any Borrower
or any ERISA Affiliate to make timely payments to a Plan, a copy of any
such notice filed and a statement of a Responsible Officer setting forth
(i) sufficient information necessary to determine the amount of the Lien
under Section 302(f)(3) of ERISA, (ii) the reason for the failure to make
the required payments and (iii) the action, if any, which such Borrowers or
such ERISA Affiliate proposes to take with respect thereto;
(L) promptly and in any event within 10 days after receipt thereof by
any Borrower or any ERISA Affiliate from a Multiemployer Plan sponsor, a
copy of each notice received by a Borrower or an ERISA Affiliate concerning
(i) the imposition of Withdrawal Liability by a Multiemployer Plan, (ii)
the determination that a Multiemployer Plan is, or is expected to be, in
reorganization within the meaning of Title IV of ERISA, (iii) the
termination of a Multiemployer Plan within the meaning of Title IV of ERISA
or (iv) 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 (i), (ii) or (iii) above;
(M) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of any Borrower or any
of their respective Subsidiaries, or compliance with the terms of any
material loan or financing agreements as the Agent, at the request of any
Lender, may reasonably request; and
(N) 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 a Borrower or any Subsidiary with the Bankruptcy Court in the
Cases or distributed by or on behalf of a Borrower or any Subsidiary to any
official committee appointed in the Cases.
7.2 Borrowing Base Certificate.
(A) By 12:00 p.m. (Chicago, Illinois time) (i) three Business Days
after the Saturday of each week and (ii) 25 days after the end of each
fiscal month (and on any other date on which the Agent reasonably
requests), the Borrowers shall furnish to the Agent a Borrowing Base
Certificate certified as true and correct by a Responsible Officer, setting
forth the Borrowing Base and the other information required therein as of
the Borrowers' close of business on the Saturday of the immediately
preceding week (in the case of the weekly Borrowing Base Certificates) or
as of the Borrowers' close of business on the last day of each fiscal month
(in the case of subsequent monthly Borrowing Base Certificates), in each
case together with such other information with respect to the Eligible
Accounts and Eligible Inventory of the Borrowers as the Agent may
reasonably request; it being understood that Inventory reports contained in
the monthly Borrowing Base Certificates will be reconciled, but the
Inventory reports contained in the weekly Borrowing Base Certificates will
not.
(B) In the event of any dispute about the eligibility of any asset for
inclusion in the Borrowing Base or the valuation thereof, the Agent's good
faith judgment controls.
(C) The Borrowing Base set forth in a Borrowing Base Certificate is
effective from and including the date such Borrowing Base Certificate is
duly received by the Agent to but not including the date on which a
subsequent Borrowing Base Certificate is duly received by the Agent, unless
the Agent disputes the eligibility of any asset for inclusion in the
Borrowing Base or the valuation thereof by notice of such dispute to the
Parent, in which case the value of such asset shall, at the discretion of
the Borrowers, either not be included in the Borrowing Base or be included
in the Borrowing Base with a value reasonably acceptable to the Agent.
(D) Each Borrowing Base Certificate shall be accompanied by backup
schedules showing the derivation thereof and containing such detail and
such other and further information as the Agent may reasonably request from
time to time.
(E) Concurrently with the delivery of each Borrowing Base Certificate,
the Borrowers shall give notice to the Agent of any mandatory prepayment
required pursuant to Section 2.6(B)(i), which notice shall specify a
prepayment date no later than the earlier of the date on which such
Borrowing Base Certificate is given and the date on which such Borrowing
Base Certificate is required to be provided to the Lenders hereunder.
(F) Notwithstanding anything to the contrary in this Section 7.2, in
no event shall any single element of value or asset be counted twice in
determining the Borrowing Base.
SECTION 8: AFFIRMATIVE COVENANTS
From the Closing Date and for so long as any Revolving Commitment is
in effect, any Letter of Credit remains outstanding (in a face amount in
excess of the amount of cash then held in the Cash Collateral Account or in
excess of the face amount of back-to-back letters of credit delivered, in
each case under Section 2.1(C)(xii)) or any amount remains outstanding or
unpaid under this Agreement, each Borrower agrees that, unless the Required
Lenders shall otherwise consent in writing, the Borrowers will, and will
cause their respective Subsidiaries to:
8.1 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) if in the reasonable business judgment of such Borrower it is in
its best economic interest not to preserve and maintain such rights,
privileges, qualifications, permits, licenses and franchises and (ii) such
failure to preserve such rights, privileges, qualifications, permits,
licenses and franchises could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
8.2 Compliance with Laws. Comply with the charter and by-laws or other
organizational or governing documents of such Person and any law, rule or
regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject, including, without limitation, the Securities Act of
1933, as amended, the Securities Exchange Act of 1934, as amended,
Regulations T, U or X of the Board of Governors of the Federal Reserve
System of the United States of America, ERISA, the Fair Labor Standards Act
and any certificate of occupancy, zoning ordinance, building, environmental
or land use requirement, permit or environmental, labor, employment,
occupational safety or health law, rule or regulation.
8.3 Insurance. (i) 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 Borrowers or
any Subsidiary, as the case may be, in such amounts 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 (ii)
maintain such other insurance or self insurance as may be required by law.
8.4 Obligations and Taxes. Pay all its material obligations arising
after the Petition 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 Petition 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 Petition Date that,
if unpaid, would become a Lien or charge upon such properties or any part
thereof; provided that the Borrowers and their respective Subsidiaries
shall not be required to pay and discharge or to cause to be paid and
discharged any such tax, assessment, charge, levy or claim so long as the
validity or amount thereof is contested in good faith by appropriate
proceedings and the Borrowers and their respective Subsidiaries have set
aside on their books adequate reserves therefor.
8.5 Notice of Default. Promptly give to the Agent notice in writing of
any Default or Event of Default.
8.6 Access to Books and Records. Maintain or cause to be maintained at
all times true and complete books and records of the financial operations
of the Borrowers and their respective Subsidiaries and provide the Agent
and its representatives access to all such books and records during regular
business hours, in order that the Agent may 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 Borrowers or their
respective Subsidiaries to the Agent or the Lenders under this Agreement or
for otherwise ascertaining compliance with this Agreement. At any
reasonable time and from time to time during regular business hours, upon
reasonable notice, the Borrower will permit the Agent and any agents or
representatives (including, without limitation, appraisers) thereof to
visit the properties of the Borrowers and to conduct examinations of and to
monitor the Collateral.
8.7 Maintenance of Financial Statements. Keep or cause to be kept
financial statements in accordance with GAAP.
8.8 Audits. At any time upon the request of the Agent or the Required
Lenders through the Agent, permit the Agent or professionals (including
consultants, accountants and appraisers) retained by the Agent to conduct
evaluations and appraisals of (i) the Borrowers' 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.
8.9 ERISA Compliance. Establish, maintain and operate, and cause each
of its ERISA Affiliates to establish, maintain and operate, all Plans to
comply in all material respects with the provisions of ERISA, the Code, all
other applicable laws and the regulations and interpretations thereunder
and the respective requirements of the governing documents for such Plans.
8.10 Maintenance of Property. Maintain in all material respects all of
its owned and leased property in good, safe and insurable condition and
repair and in accordance with any applicable manufacturers' specifications
and recommendations, not permit, commit or suffer to exist any waste
(except in the ordinary course of business) or abandonment of any such
property and, from time to time, make or cause to be made all material
repairs, renewal and replacements thereof; provided that such property may
be altered or renovated in the ordinary course of business.
8.11 Condemnation. Immediately upon learning of the institution of any
proceeding for the condemnation or other taking of any of its owned or
leased real property, notify the Agent of the pendency of such proceeding,
permit the Agent to participate in any such proceeding and, from time to
time, deliver to the Agent all instruments reasonably requested by the
Agent to permit the Agent's participation in such proceedings.
8.12 Borrowing Base. Maintain all Revolving Loans and Letters of
Credit in compliance with the then current Borrowing Base.
8.13 Change in Collateral; Collateral Records. Provide the Agent with
not less than thirty days' prior written notice of any change in the
location of any Collateral, other than to locations listed on Schedule
8.13. The Borrowers shall also advise the Agent promptly, in sufficient
detail, of any material adverse change relating to the type, quantity or
quality of the Collateral or the Liens granted on the Collateral. Each
Borrower agrees to execute and deliver to the Agent for the benefit of the
Agent from time to time, solely for the Agent's convenience in maintaining
a record of the Collateral, such written statements and schedules as the
Agent may reasonably require, designating, identifying or describing the
Collateral; provided that any Borrower's failure to promptly give the Agent
such statements or schedules shall not affect, diminish, modify or
otherwise limit the Agent's Lien in the Collateral.
8.14 Cash Management System.
----------------------
(A) The Borrowers shall maintain their cash management system as such
system exists on the Closing Date or as such system may be modified by the
terms of this Agreement. The Borrower shall (i) cause all cash and all
proceeds from Accounts and the sale of Inventory to be deposited into the
Depository Accounts in the ordinary course of business, (ii) cause all
funds in the Depository Accounts to be transferred into the Concentration
Account on a daily basis, (iii) cause all cash deposited in the
Concentration Account to be sent by wire transfer to the Agent Account on a
daily basis, (iv) instruct the Agent to cause all funds transferred to the
Agent Account to be credited to the Borrowers and applied to reduce the
Obligations as set forth in Section 2.3(B), (v) take all such actions as
the Agent deems necessary or advisable to send all cash, all proceeds from
the sale of Inventory, all proceeds from the collection of Accounts, and
all other remittances and other proceeds of Collateral to the Agent Account
to be applied to the Obligations as set forth in Section 2.3(B) and (vi)
from and after the Closing Date, take such actions as the Agent deems
necessary or advisable to grant to the Agent dominion and control over the
funds in the Concentration Account. The Borrowers shall promptly, and in
any event not later than three days after the opening of any such new
account, notify the Agent in writing of the creation of any new Depository
Account and shall at the time of such notice execute and deliver to the
Agent a depository account notice and blocked account agreement, in each
case as described in Section 5.1(K).
(B) Upon receipt by any Borrower of collections of cash and any
proceeds of Collateral, such Borrower shall immediately deposit all such
payments into the Concentration Account or any Depository Account. The
Borrowers shall cause all funds in the Depository Accounts to be promptly
transferred to the Concentration Account.
8.15 Leases. Upon the request of the Agent, provide the Agent with a
copy of each lease of real property to which a Borrower is a party, whether
as lessor or lessee. Each Borrower shall (i) comply in all material aspects
with all of its respective obligations under such leases, (ii) not modify,
amend, extend or otherwise change any of the terms, covenants or conditions
of any such leases if such modification, amendment, extension or other
change could have a Material Adverse Effect, (iii) not assign, sublease,
terminate or cancel any of such leases, (iv) upon the request of the Agent,
provide the Agent with a copy of each notice of default under any such
lease received by such Borrower immediately upon receipt thereof and
deliver to the Agent a copy of each notice of default sent by such Borrower
under any such lease simultaneously with its delivery of such notice under
such lease, (v) notify the Agent, not later than 60 days prior to the last
date on which any Borrower may exercise any renewal or extension option
granted to such Borrower under any such lease, that such Borrower has
exercised its right to renew or extend such lease or not to renew or extend
any such lease and, if such Borrower intends to renew such lease, the terms
and conditions of such renewal, (vi) notify the Agent at least 14 days
prior to the date such Borrower becomes liable under any new lease for real
property and (vii) promptly notify the Agent of such Borrower's receipt of
any notice or other knowledge of the commencement or threat of commencement
of any foreclosure or other repossession action by any holder of a mortgage
or deed of trust encumbering any fee simple interest with respect to which
such Borrower leases or conducts other operations.
8.16 Post-Closing Requirements. As soon as possible after the Closing
Date, but in any event no later than June 16, 2000, the Borrowers will
deliver to the Agent, and the Agent must be satisfied (in its discretion)
with, (i) the Borrowers' re-stated financial statements for the fiscal year
ended September 30, 1999, which re-stated financial statements and the
information presented therein will be consistent with the Borrowers'
internally prepared financial statements for such fiscal year provided to
the Agent prior to April 27, 2000, and (ii) the "reviewed" financial
statements of the Borrowers for the period from October 1, 1999, through
March 31, 2000, which "reviewed" financial statements and the information
presented therein will be consistent with the Borrowers' internally
prepared financial statements for such period provided to the Agent prior
to April 27, 2000 (or, in the case of the "reviewed" financial statements
for March 31, 2000, the Borrowers' internally prepared financial statements
for March 31, 2000, provided to the Agent prior to the Closing Date), such
review to be performed by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or such other public accounting
firm mutually agreed upon by the Parent and the Agent and who is retained
by the Borrowers (and consented to by the Agent) and paid for by the
Borrowers. As soon as possible, but no later than ___ days after the
Closing Date, the Borrowers will substantially comply with the recommended
remedial actions set forth in (a) the letters dated April 5, 2000, from
▇▇▇▇▇▇▇ Group Services, Inc. to the Agent (copies of which have been
provided to the Borrowers) with respect to the Borrowers' Northampton,
Massachusetts and Brockton, Massachusetts locations and (b) the letter
dated March 24, 2000, from ▇▇▇▇▇▇▇ Group Services, Inc. to the Agent (a
copy of which have been provided to the Borrowers) with respect to the
Borrowers' Elmwood Park, New Jersey.
SECTION 9: NEGATIVE COVENANTS
From the Closing Date and for so long as any Revolving Commitment is
in effect, any Letter of Credit under remains outstanding (in a face amount
in excess of the amount of cash then held in the Cash Collateral Account or
in excess of the face amount of back-to-back Letters of Credit delivered,
in each case under Section 2.1(C)(xii)) or any amount remains outstanding
or unpaid under this Agreement, each Borrower agrees that, unless the
Required Lenders otherwise consent in writing, the Borrowers will not (and
will not apply to the Bankruptcy Court for authority to) and will not
permit their respective Subsidiaries to:
9.1 Liens. Incur, create, assume or suffer to exist any Lien on any
asset of a Borrower or a Subsidiary now owned or hereafter acquired by a
Borrower or a Subsidiary, other than (i) Liens which were existing on the
Petition Date as reflected on Schedule 6.6 and Liens granted under the
Existing Agreements, (ii) Liens granted in connection with the Adequate
Protection Obligations; provided that the Final Order provides that the
holder of such Liens shall not be permitted to take any action to foreclose
with respect to such Liens so long as any amounts shall remain outstanding
under this Agreement or any Revolving Commitment shall be in effect, (iii)
Permitted Liens, (iv) Liens in favor of the Junior Lenders under the Junior
Facility, (v) Liens in favor of the Agent and the Lenders and (vi) Liens
securing purchase money Indebtedness or Capitalized Leases permitted by
Section 9.3(iii).
9.2 Mergers or Consolidations. Be, or permit any Subsidiary to be, a
party to any merger or consolidation, or purchase or otherwise acquire all
or substantially all of the assets or any stock of any class of, or any
partnership or joint venture interest in, any other Person; provided that
any Borrower may merge with any other Borrower and any wholly owned
Subsidiary of a Borrower may mer with such Borrower so long as the Borrower
is the surviving entity of such merger.
9.3 Indebtedness. Contract, create, incur, assume or suffer to exist
any Indebtedness, other than (i) Indebtedness under this Agreement, (ii)
Indebtedness incurred prior to the Petition Date (including existing
Capitalized Leases), (iii) Indebtedness incurred subsequent to the Petition
Date secured by purchase money Liens or Capitalized Leases in an aggregate
amount not to exceed $500,000 during any twelve-month period, (iv)
Indebtedness incurred in connection with the Junior Facility or, to the
extent applicable, the Existing Lender Claim and (v) Indebtedness arising
from Investments among the Borrowers that are permitted under the
Agreement.
9.4 Use of Proceeds. Use the proceeds of (i) the Revolving Loans or
the Letters of Credit for purposes other than those set forth in Section
6.10 or (ii) any Loan to purchase or carry "margin stock" as such term is
defined in Regulations U and X of the Board of Governors of the Federal
Reserve System of the United States.
9.5 Capital Expenditures. Make cumulative Capital Expenditures in an
aggregate amount in excess $1,000,000 in any twelve-month period.
9.6 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, other than (i) for any guaranty of Indebtedness or other
obligations of any Borrower and if such Borrower could have incurred such
Indebtedness or obligations under this Agreement and (ii) by endorsement of
negotiable instruments for deposit or collection in the ordinary course of
business.
9.7 Chapter 11 Claims. Incur, create, assume, suffer to exist or
permit any other Superpriority Claim that is pari passu with or senior to
the claims of the Agent and the Lenders against the Borrowers under this
Agreement, other than the Carve-Out.
9.8 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 of a Borrower's Subsidiaries may pay dividends to such
Borrower.
9.9 Transactions with Affiliates. Except as set forth on Schedule 9.9,
sell or transfer any property or assets to, or otherwise engage in any
other material transactions with, any of its Affiliates other than the
Borrowers and other than in the ordinary course of business at prices and
on terms and conditions not less favorable to such Borrower than could be
obtained on an arm's-length basis from unrelated third parties.
9.10 Investments. Make any Investment, other than (i) ownership by the
Borrowers of the capital stock of each of the Subsidiaries listed on
Schedule 6.5, (ii) Permitted Investments, (iii) deposits to vendors and
suppliers not to exceed $1,000,000 outstanding at any time and (iv)
advances and loans among the Borrowers and its Subsidiaries in the ordinary
course of business.
9.11 Disposition of Assets. Sell or otherwise dispose of any assets
(including, without limitation, the capital stock of any of its
Subsidiaries) except for (i) sales of inventory, fixtures and equipment in
the ordinary course of business, (ii) sales of obsolete or worn-out
inventory or equipment and (iii) sales of surplus equipment no longer used
in production.
9.12 Nature of Business. Modify or alter in any material manner the
nature and type of its business as conducted at or prior to the Petition
Date or the manner in which such business is conducted (except as required
by the Bankruptcy Code).
9.13 Sales and Leasebacks; Operating Leases. Become liable, by
assumption or otherwise, with respect to any lease, whether an operating
lease or a Capitalized Lease, of any property (whether real or personal or
mixed) (i) that such Borrower has sold or transferred or will sell or
transfer to any other Person or (ii) that such Borrower intends to use for
substantially the same purposes as any other asset which it has sold or
transferred or will sell or transfer to any other Person in connection with
such lease. No Borrower shall become liable in any way, whether directly or
by assignment or otherwise, for the obligations of a lessee under any lease
of any property (whether real, personal or mixed) by that Person as lessee
which is not a Capitalized Lease unless, immediately after giving effect to
the incurrence of liability with respect to such lease, the aggregate
amount of the annual obligations and indebtedness of the Borrowers in
respect of leases of property (whether real, personal or mixed) other than
Capitalized Leases does not exceed $250,000.
9.14 ERISA. Do any of the following to the extent that such act or
failure to act would result in the aggregate, after taking into account any
other such acts or failure to act, in a Material Adverse Effect:
(i) engage, or knowingly permit any Borrower to engage, in any
prohibited transaction described in Sections 406 of ERISA or
4975 of the Code for which a class exemption is not available
or a private exemption has not been previously obtained from
the United States Department of Labor or any Person succeeding
to the functions thereof;
(ii) permit to exist any accumulated funding deficiency (as defined
in Sections 302 of ERISA or 412 of the Code), with respect to
any Plan, that has not been waived;
(iii) fail, or permit any Borrower to fail, to pay timely required
contributions or annual installments due with respect to any
waived funding deficiency to any Plan if such failure could
result in the imposition of a Lien;
(iv) terminate, or permit any Borrower to terminate, any Plan that
would result in any liability of any Borrower or any ERISA
Affiliate under Title IV of ERISA or under such Plan; or
(v) fail, or permit any Borrower to fail, to pay any required
installment under Section 412(m) of the Code or any other
payment required under Section 412 of the Code or Section 302
of ERISA on or before the due date for such installment or
other payment, if such failure could result in the imposition
of a Lien.
9.15 Environmental. Become legally obligated, whether by settlement,
stipulation, nonappealable judgment, nonappealable conclusion of an
administrative proceeding or statute, for any liabilities and costs
(including, without limitation, all liabilities, obligations,
responsibilities, losses, damages, personal injury, death costs, punitive
damages, economic damages, consequential damages, treble damages,
intentional, willful or wanton injury, damage or threat to the environment,
natural resources or public health or welfare, costs and expenses
(including, without limitation, attorney, expert and consulting fees and
costs of investigation, feasibility or studies), fines, penalties and
monetary sanctions, interest, direct or indirect, known or unknown,
absolute or contingent, past, present or future) that exceed $150,000 in
the aggregate arising out of or relating to (i) the release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor environment or
into or out of any property (a "Release") or threatened Release at any
location of any waste, pollutant (as that term is defined in 42 U.S.C.
9601(33) or in 33 U.S.C. 1362(13)), hazardous substance (as that term is
defined in 42 U.S.C. 9601(14)), hazardous chemical (as that term is defined
by 29 CFR Section 1910.1200(c)), toxic substance, hazardous waste (as that
term is defined in 42 U.S.C. 6901), radioactive material, special waste,
petroleum, including crude oil or any petroleum-derived substance, waste,
or breakdown or decomposition product thereof, or any constituent of any
such substance or waste, including, without limitation, polychlorinated
biphenyls, and asbestos ("Contaminants") into the environment, including
the movement of Contaminants through or in the air, soil, surface water,
groundwater or Property, (ii) any action required to (a) clean up, remove,
treat or in any other way address Contaminants in the indoor or outdoor
environment, (b) prevent the Release or threat of Release or minimize the
further Release of Contaminants so they do not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment or (c) perform pre-remedial studies and investigations and
post-remedial monitoring and care or (iii) any violation of any federal,
state or local law, ordinance, rule, regulation, permit, license or other
binding determination of any Governmental Authority relating to, imposing
liability or standards concerning, or otherwise addressing the environment,
health or safety, including but not limited to the Clean Air Act, the Clean
Water Act, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. ▇▇.▇▇. 9601 et seq., the Occupational
Safety and Health Act, 29 U.S.C. ▇▇.▇▇. 651 et seq., the Resource
Conservation and Recovery Act of 1986, 42 U.S.C. ▇▇.▇▇. 6901 et seq., any
so-called "Superfund" or "Superlien" law and the Toxic Substances Control
Act, each as from time to time hereafter in effect and together with any
amendments thereto, any successor statutes, and any regulations promulgated
thereunder.
9.16 Amendment of Certain Documents. Amend, supplement or otherwise
change (i) its articles or certificate of incorporation, partnership
agreement, certificate of limited partnership, certificate of limited
liability or operating agreement (or the equivalent organizational
documents), (ii) the by-laws (or the equivalent governing documents) and
(iii) any document setting forth the designation, amount or relative
rights, limitations and preferences of any class or series of its capital
stock, partnership interests or membership interests, as the case may be,
in each case in any material respect.
9.17 Matters Respecting the Cases. (i) Seek, consent to or suffer to
exist any modification, stay, vacation or amendment to the Final Order,
(ii) prior to the date on which the Obligations have been paid in full in
cash and the Revolving Commitments have been terminated, pay any
administrative expenses, except for (a) administrative expense claims
incurred in the ordinary course of the business of the Borrowers in
accordance with the terms of the Final Order and (b) expenses included
within the Carve-Out in accordance with the terms of the Final Order or
(iii) prior to the date on which the Obligations have been paid in full in
cash and the Revolving Commitments have been terminated, make any payments
or transfer any property in excess of $250,000 in the aggregate on account
of claims asserted by any of the Borrowers' vendors for reclamation in
accordance with Section 2-702 of the Uniform Commercial Code and Section
546(h) of the Bankruptcy Code.
9.18 Restricted Payments. Make any payment or other distribution,
whether in cash, property, securities or a combination thereof, (i) to the
Junior Lenders with respect to the Junior Facility other than in accordance
with the subordination agreement described in Section 5.1(H), (ii) to the
Junior Lenders or any other equity holder of the Parent's capital stock for
any other reason, including, without limitation, management, advisor or
other similar fees or reimbursement of costs and expenses, (iii) to the
Existing Lenders with respect to the Existing Lender Claim other than in
accordance with the subordination agreement described in Section 5.1(I) or
(iv) with respect to Adequate Protection Obligations.
SECTION 10: FINANCIAL COVENANTS
From the Closing Date and for so long as any Revolving Commitment is
in effect, any Letter of Credit remains outstanding (in a face amount in
excess of the amount of cash then held in the Cash Collateral Account or in
excess of the face amount of back-to-back Letters of Credit delivered, in
each case under Section 2.1(C)(xii)) or any amount remains outstanding or
unpaid under this Agreement, each Borrower agrees that, unless the Required
Lenders otherwise consent in writing, the Borrowers will not and will not
permit the Subsidiaries to:
10.1 Tangible Net Worth. Permit Tangible Net Worth, as measured on the
last day of each fiscal quarter, to be less than [TO COME].
10.2 Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
Ratio, as measured on the last day of each month to be less than [TO COME].
10.3 Compliance with the Budget. Prior to the date that the Borrowers'
deliver, and the Agent accepts the satisfaction of, all of the financial
statements described in Section 8.16, the Borrowers will [TO COME].
SECTION 11: EVENTS OF DEFAULT; REMEDIES
11.1 Events of Default. Each of the following shall constitute an
event of default (each, an "Event of Default") under this Agreement:
(A) any material representation or warranty made by a Borrower in
this Agreement or in any Loan Document or in connection with
this Agreement or the credit extensions under this Agreement or
any material statement or representation made in any report,
financial statement, certificate or other document furnished by
a Borrower or any Subsidiary to the Agent or the Lenders under
or in connection with this Agreement, shall prove to have been
false or misleading in any material respect when made or
delivered;
(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 Business Days or (ii) principal of
the Loans or other amounts payable by the Borrower under this
Agreement (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 or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise;
(C) default shall be made by a Borrower or any Subsidiary in the
due observance or performance of any covenant, condition or
agreement contained in Section 7, 8.5, 8.12, 8.13, 8.14, 9 or
10;
(D) default shall be made by the Borrower or any of its
Subsidiaries 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 or any of the other
Loan Documents and not set forth in Section 11.1(A), 11.1(B) or
11.1(C) and such default shall continue unremedied for more
than 15 days after the occurrence thereof;
(E) any of the Cases shall be dismissed or converted to a case
under chapter 7 of the Bankruptcy Code; 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 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 a Borrower for the approval of any other Superpriority Claim
(other than the Carve-Out) in any of the Cases that is pari
passu with or senior to the claims of the Agent and the Lenders
against the Borrowers or there shall arise or be granted any
such pari passu or senior Superpriority Claim;
(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 any Borrower
that have a value in excess of $25,000 in the aggregate;
(G) an order with respect to the Cases shall be entered by the
Bankruptcy Court confirming a Reorganization Plan that does not
contain a provision for termination of the Revolving
Commitments and payment in full in cash of all Obligations on
or before the effective date of, or substantial consummation
of, such Reorganization Plan;
(H) a Change of Control occurs;
(I) any material provision of any Loan Document shall, for any
reason, cease to be valid and binding on a Borrower or a
Borrower shall so assert in any pleading filed in any court;
(J) a Borrower files any pleading seeking, or otherwise consenting
to, (i) the invalidation, subordination or other challenging of
the Liens granted to secure the Obligations under this
Agreement or the other Loan Documents or (ii) any relief under
section 506(c) of the Bankruptcy Code against the Agent or any
Lender with respect to any property which secures the
Obligations under this Agreement or the other Loan Documents;
(K) a Loan Document under which a Borrower or any Affiliate
purports to grant to the Agent a Lien on any of its property
shall for any reason fail or cease to create a valid and
perfected and, except to the extent permitted by the terms of
the Loan Documents, first priority Lien on or security interest
in any Collateral purported to be covered thereby;
(L) a Borrower, or any Affiliate of any Borrower that is a party to
any Loan Document, shall fail to pay when due any principal,
interest, premium or other payment obligation with respect to
any Indebtedness the aggregate outstanding principal balance of
which exceeds of $150,000, whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise, and
such failure shall continue after the applicable grace period,
if any, specified in the agreement or instrument relating to
such Indebtedness; or any other default under any agreement or
instrument relating to any such Indebtedness, or any other
event, shall occur and shall continue after the applicable
grace period, if any, specified in such agreement or
instrument, if the effect of such default or event is to
accelerate, cause a mandatory prepayment or repurchase of such
Indebtedness or to permit the acceleration of the maturity of
such Indebtedness or permit the holders to require a mandatory
prepayment or repurchase of such Indebtedness; or any such
Indebtedness in excess of such amount shall be declared to be
due and payable, or required to be prepaid, repurchased or
redeemed (other than by a regularly scheduled required
prepayment or redemption), prior to the stated maturity
thereof;
(M) an order of the Bankruptcy Court shall be entered reversing,
amending, supplementing, staying for a period in excess of 10
days, vacating or otherwise modifying the Final Order or
terminating the use of cash collateral by the Borrowers;
(N) any judgment or order as to a post-petition liability or debt
for the payment of money in excess of $100,000 shall be
rendered against a Borrower and the enforcement thereof shall
not have been stayed;
(O) any non-monetary judgment or order with respect to a
post-petition event shall be rendered against the Borrower or
any of its Subsidiaries that does or could reasonably be
expected to have a Material Adverse Effect 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;
(P) except as permitted by the orders entered by the Bankruptcy
Court prior to the Closing Date and the Final Order, the
Borrowers shall make any payment (by way of adequate protection
or otherwise) of principal or interest or otherwise on account
of any prepetition Indebtedness or trade payables or other
prepetition claims against a Borrower, including, without
limitation, reclamation claims and any amount due to a Foreign
Subsidiary that arose prior to the Petition Date, other than
payments authorized by the Bankruptcy Court (i) in respect of
accrued payroll and related expenses and employee benefits as
of the Petition Date and (ii) in respect of Adequate Protection
Obligations;
(Q) any Termination Event described in clauses (iii) or (iv) of the
definition of Termination Event 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 $100,000;
(R) (i) a Borrower or any ERISA Affiliate thereof shall have been
notified by the sponsor of a Multiemployer Plan that it has
incurred Withdrawal Liability to such Multiemployer Plan, (ii)
such Borrower or such ERISA Affiliate does not have reasonable
grounds 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 $100,000 allocable to
post-petition obligations or requires payments exceeding
$50,000 per annum in excess of the annual payments made with
respect to such Multiemployer Plans by such Borrower or such
ERISA Affiliate for the plan year immediately preceding the
plan year in which such notification is received;
(S) a 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 such 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 $100,000;
(T) a 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 and unpaid as of the
Petition Date) and the amount determined under Section
302(f)(3) of ERISA is equal to or greater than $100,000; or
(U) it shall be determined (whether by the Bankruptcy Court or by
any other judicial or administrative forum) that a Borrower or
any of its Subsidiaries 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 could reasonably be expected to have a Material Adverse
Effect and the enforcement thereof shall not have been stayed;
11.2 Remedies. If an Event of Default occurs, and at any time
thereafter during the continuance of such Event of Default, then without
further order of or application to the Bankruptcy Court the Agent may, and
at the request of the Required Lenders, shall, by notice to the Borrower
(with a copy to counsel for any statutory committee appointed in the Cases,
to counsel for the Existing Lenders and to the United States Trustee for
the District of Delaware), take one or more of the following actions at the
same or different times (provided that with respect to clause (D) below and
the enforcement of Liens or other remedies with respect to the Collateral
under clause (E) below, the Agent shall provide the Borrower (with a copy
to counsel for any statutory committee in the Cases, to counsel for the
Existing Lenders and to the United States Trustee for the District of
Delaware) with five Business Days' written notice prior to taking the
action contemplated thereby):
(A) immediately terminate the Total Revolving Commitment;
(B) declare the Loans then outstanding to be immediately 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 Borrowers accrued under this Agreement
and the other Loan Document, shall become immediately due and
payable, without presentment, demand, protest or any other
notice of any kind, all of which are expressly waived by the
Borrowers notwithstanding anything contained in this Agreement
or the other Loan Document to the contrary;
(C) require the Borrowers upon demand to immediately deposit in the
Cash Collateral Account cash in an amount which, together with
any amounts then held in the Cash Collateral Account, is equal
to the sum of 105% of the then outstanding Letters of Credit
(and to the extent the Borrowers shall fail to furnish such
funds as demanded by the Agent, the Agent shall be authorized
to debit the accounts of the Borrowers maintained with the
Agent in such amount five Business Days' after the giving of
the notice referred to in this Section 11.2);
(D) set-off amounts in the Cash Collateral Account or any other
accounts maintained with the Agent and apply such amounts to
the obligations of the Borrowers under this Agreement and the
other Loan Documents; and
(E) exercise any and all remedies under this Agreement and the Loan
Documents and under applicable law available to the Agent and
the Lenders.
11.3 Right of Set-Off. Subject to the provisions of Section 11.2, upon
the occurrence and during the continuance of any Event of Default, the
Agent and each Lender is 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 Lender to or for the credit or the account of the Borrowers against
any and all of the obligations of the Borrowers now or hereafter existing
under the Loan Documents, irrespective of whether or not such Lender shall
have made any demand under any Loan Document and although such obligations
may not have been accelerated. Each Lender and the Agent agrees promptly to
notify the Parent after any such set-off and application made by such
Lender 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 Lender and the Agent under this Section
11.3 are in addition to other rights and remedies which such Lender and the
Agent may have upon the occurrence and during the continuance of any Event
of Default.
SECTION 12: THE AGENT
12.1 Administration by Agent. The general administration of the Loan
Documents shall be by the Agent. Each Lender irrevocably authorizes the
Agent, at its discretion, to take or refrain from taking such actions as
agent on its behalf and to exercise or refrain from exercising such powers
under the Loan Documents as are delegated by the terms of the Loan
Documents, 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 other Loan Documents.
12.2 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 Lenders, the amount of the Loan to be made by it in accordance with
its Revolving Commitment. Should the Agent do so, each of the Lenders
agrees immediately 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 under Sections
2.7(A), 2.7(D), 2.7(E), 2.7(F), 12.6, 13.5 and 13.6), the application of
which is not otherwise provided for in this Agreement shall be applied:
first, to the payment of any Fees, expenses or other Obligations (other
than principal and interest on the Loans) due and payable to the Lenders
under the Loan Documents; second, to the payment of interest due on the
Obligations; and third, to the payment of principal due on the Loans
(provided that scheduled payments of principal under the Term Loan will be
made to the Term Loan in accordance with Section 2.1(B)), in each case in
accordance with Section 2.8. All amounts to be paid to a Lender by the
Agent shall be credited to that Lender, after collection by the Agent, in
immediately available funds either by wire transfer or deposit in that
Lender's correspondent account with the Agent, as such Lender and the Agent
shall from time to time agree.
12.3 Sharing of Setoffs. Each Lender 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 Lender 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 Lender (i) it shall promptly purchase at par (and shall
be deemed to have thereupon purchased) from such other Lender a
participation in the Loans of such other Lender, so that the aggregate
unpaid principal amount of each Lender's Loans and its participation in
Loans of the other Lenders 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 (ii) such other adjustments shall be made from time to time as
shall be equitable to ensure that the Lenders 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 Borrowers expressly consent to the foregoing
arrangements and agree that any Lender 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 Section 11.3) or counterclaim with respect
to any and all moneys owing by the Borrowers to such Lender as fully as if
such Lender was the original obligee thereon, in the amount of such
participation.
12.4 Agreement of Required Lenders. Upon any occasion requiring or
permitting an approval, consent, waiver, election or other action on the
part of the Required Lenders, action shall be taken by the Agent for and on
behalf or for the benefit of all Lenders upon the direction of the Required
Lenders, and any such action shall be binding on all Lenders. No amendment,
modification, consent, or waiver shall be effective except in accordance
with the provisions of Section 13.10.
12.5 Liability of Agent. (A) The Agent when acting on behalf of the
Lenders, 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 Lenders or any of them for any action
taken or omitted to be taken in good faith, or be responsible to the
Lenders 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 Lenders 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 Lenders
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
Lender 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 Borrowers of
any of the terms, conditions, covenants, or agreements of this Agreement or
any other Loan Document.
(B) Neither the Agent nor any of its respective directors, officers,
employees, agents or Affiliates shall have any responsibility to the
Borrowers on account of the failure or delay in performance or breach by
any Lender or by the Borrowers of any of their respective obligations under
this Agreement or any other Loan Document.
(C) The Agent, in its capacity as Agent, 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.
12.6 Reimbursement and Indemnification. Each Lender agrees (i) to
reimburse (a) the Agent for such Lender's pro rata portion, in accordance
with the then outstanding principal amount of the Loans or participations
in any Letter of Credit Guaranty and all Letter of Credit Outstandings, of
any expenses and fees incurred for the benefit of the Lenders 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 Lenders, and any other expense incurred in
connection with the operations or enforcement thereof not reimbursed by the
Borrowers and (b) the Agent for such Lender's pro rata portion, in
accordance with the then outstanding principal amount of the Loans or
participations in any Letter of Credit Guaranty and all Letter of Credit
Outstandings, of any expenses of the Agent incurred for the benefit of the
Lenders that the Borrower has agreed to reimburse pursuant to Section 13.5
and has failed to so reimburse 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 Borrowers (except such as shall result from their
respective gross negligence or willful misconduct).
12.7 Rights of Agent. It is understood and agreed that the Agent shall
have the same rights and powers under this Agreement (including the right
to give such instructions) as the other Lenders 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 Borrowers or any of their respective Subsidiaries, as
though it were not the Agent of the Lenders under this Agreement.
12.8 Independent Lenders. Each Lender acknowledges that it has decided
to enter into this Agreement and to make the Loans based on its own
analysis of the transactions contemplated by this Agreement and of the
creditworthiness of the Borrowers and agrees that the Agent shall bear no
responsibility therefor.
12.9 Notice of Transfer. The Agent may deem and treat a Lender party
to this Agreement as the owner of such Lender's portion of the Loans for
all purposes, unless and until a written notice of the assignment or
transfer thereof executed by such Lender has been received by the Agent.
12.10 Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Parent. Upon any such
resignation, the Required Lenders shall have the right to appoint a
successor Agent, which shall be reasonably satisfactory to the Borrowers.
If no successor Agent shall have been so appointed by the Required Lenders
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 Lenders, 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 Borrowers. Upon the
acceptance of any appointment as Agent under this Agreement 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 under this
Agreement as Agent, the provisions of this Section 12 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
SECTION 13: GENERAL
13.1 Notices. Notices and other communications provided for in this
Agreement shall be in writing (including telex, facsimile or cable
communication) and shall be mailed, telexed, transmitted, cabled or
delivered to the appropriate Person at its address set forth Schedule 13.1
or such other address as such person may from time to time designate by
giving written notice to the other parties under this Section 13.1. All
notices and other communications given to any Person 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 telegraphic communications or facsimile
equipment of the sender, in each case addressed to such Person as provided
in this Section 13.1 or in accordance with the latest unrevoked written
direction from such party; provided that notices to the Agent under
Sections 2 and 3 and with respect to a change in address will be effective
only when received by the Agent.
13.2 Survival of Agreement, Representations and Warranties. All
warranties, representations and covenants made by the Borrowers in any Loan
Document 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 Lenders and shall survive the making of the Loans
regardless of any investigation made by any Lender or on its behalf and
shall continue in full force and effect so long as any amount due or to
become due under this Agreement is outstanding and unpaid and so long as
the Revolving Commitments have not been terminated.
13.3 Successors and Assigns. (A) This Agreement shall be binding upon
and inure to the benefit of the Borrowers, the Agent and the Lenders and
their respective successors and assigns. The Borrowers may not assign or
transfer any of their rights or obligations under this Agreement without
the prior written consent of all of the Lenders. Each Lender may sell
participations to any Person in all or part of any Loan, or all or part of
its Revolving Commitment, in which event, without limiting the foregoing,
the provisions of Section 3.1 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 Borrowers'
liability, if any, under Sections 3.1 and 3.3 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 2.8, shall be determined as if such
Lender had not sold such participation. In the event any Lender shall sell
any participation, such Lender shall retain the sole right and
responsibility to enforce the obligations of the Borrowers 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 Lender may grant its participant the right to consent to such Lender's
execution of amendments, modifications or waivers that (i) reduce any Fees
payable to the Lenders, (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 under this Agreement or (iii) extend the maturity of
the Borrower's obligations under this Agreement ). The sale of any such
participation shall not alter the rights and obligations of the Lender
selling such participation with respect to the Borrower.
(B) Each Lender may assign to one or more Lenders 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
Revolving Commitment and the same portion of the related Loans at the time
owing to it); provided that (i) such assignment is made pro rata among the
Revolving Loans, Term Loan and Revolving Commitment held by such Lender,
(ii) other than in the case of an assignment to a Person at least 50% owned
by the assignor Lender, or by a common parent of both, or to another
Lender, the Agent and the Letter of Credit Issuer must give their
respective prior written consent to such assignment, which consent will not
be unreasonably withheld, (iii) the aggregate amount of the Revolving
Commitment or Loans of the assigning Lender 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 Borrowers and the Agent, in no event be less than
$5,000,000, (iv) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance with blanks appropriately completed, together
with a processing and recordation fee of $3,500 (for which the Borrowers
shall have no liability) and (v) The CIT Group/Business Credit, Inc. and
its Affiliates will hold, after giving effect to any assignment under this
Section 13.3, at least 66% of the outstanding Revolving Loans, the
outstanding Term Loan and the Total Revolving Commitment. 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 Lender under this
Agreement and (b) the Lender thereunder shall, to the extent provided in
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party to this Agreement).
(C) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties to this Agreement 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 Lender 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 Lender assignor makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of any Borrower or the performance or observance by any Borrower
of any of its obligations under this Agreement or any of the other Loan
Documents; (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 6.4 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
Lender assignor or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement;
(v) such assignee appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Agent by this Agreement and reasonably incidental thereto;
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 Lender.
(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 Lenders and the Revolving Commitments of, and
principal amount of the Loans owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrowers, the Agent and the Lenders
shall treat each Person the name of which is recorded in the Register as a
Lender for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower or any Lender 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 Lender 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 Letter of Credit Issuer (to the extent such consent is
required), (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt written
notice thereof to the Parent (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 Section 13.3(E).
(F) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 13.3,
disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrowers furnished to such
Lender by or on behalf of the Borrowers; 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
13.4.
(G) Upon the request of the Agent, the Borrowers agree to cooperate
with the Agent in the Agent's efforts to sell participations in this
Agreement (as described in Section 13.3(A)) and assign to one or more
Lenders or Eligible Assignees a portion of its interests, rights and
obligations under this Agreement (as set forth in Section 13.3(B)).
13.4 Confidentiality. Each Lender agrees to keep any information
delivered or made available by any Borrower to it confidential from anyone
other than persons employed or retained by such Lender who are or are
expected to become engaged in evaluating, approving, structuring or
administering the Loans; provided that nothing in this Section 13.4 shall
prevent any Lender from disclosing such information (i) to any other
Lender, (ii) upon the order of any court or administrative agency, (iii)
upon the request or demand of any regulatory agency or authority, (iv) that
has been publicly disclosed other than as a result of a disclosure by the
Agent or any Lender which is not permitted by this Agreement, (v) in
connection with any litigation to which the Agent, any Lender, 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 under this Agreement, (vii) to such Lender's legal counsel and
independent auditors and (viii) to any actual or proposed participant or
assignee of all or part of its rights subject to Section 13.3(F). Each
Lender shall use reasonable efforts to notify the Parent of any required
disclosure under clause (ii) above.
13.5 Expenses. The Borrowers 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 counsel to the Agent
and any internal or third-party appraisers, consultants and auditors
advising the Agent) 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 by this Agreement and the other Loan
Documents, the syndication of the transactions contemplated by this
Agreement and the other Loan Documents, the reasonable and customary costs,
fees and expenses of the Agent in connection with its monthly and other
periodic field audits, monitoring of assets (including reasonable and
customary internal collateral monitoring fees) and publicity expenses and,
following the occurrence of an Event of Default, all reasonable
out-of-pocket expenses incurred by the Lenders and the Agent in the
enforcement or protection of the rights of any one or more of the Lenders
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 Lenders or the Agent. Such payments shall be made on the
date of the Final Order and thereafter on demand upon delivery of a
statement setting forth such costs and expenses. The obligations of the
Borrowers under this Section 13.5 survive the termination of this Agreement
or the payment of the Loans.
13.6 Indemnity. (A) Each Borrower agrees to indemnify and hold
harmless the Agent and the Lenders 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 by this Agreement and
the other Loan Documents, 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 Borrowers under this Section 13.6(A) survive the
termination of this Agreement or the payment of the Loans.
(B) The Borrowers agree, jointly and severally, to unconditionally
indemnify the Agent and each Lender for, and to hold the Agent and each
Lender harmless from, any and all loss, claim or liability incurred by the
Agent or any such Lender arising from any transaction or occurrence
relating to any Letter of Credit or any draft thereunder, the Letter of
Credit Guaranty or the Letter of Credit Application and Reimbursement
Agreement, including any loss or claim due to any action taken by the
Letter of Credit Issuer, other than for any such loss, claim or liability
arising out of the gross negligence or willful misconduct of the Agent or
such Lender as determined by a final judgment of a court of competent
jurisdiction. The Borrowers further agree to hold the Agent and each Lender
harmless from any errors or omission, negligence or misconduct by the
Letter of Credit Issuer. The Borrowers' unconditional obligation to the
Agent and each Lender under this Section 13.6(B) shall not be modified or
diminished for any reason or in any manner whatsoever and survive the
termination of this Agreement or the payment of the Loans. The Borrowers
agree that any charges incurred by Agent for the Borrowers' account by the
Letter of Credit Issuer shall be conclusive and binding on the Borrowers
absent manifest error.
13.7 CHOICE OF LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL
BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
ILLINOIS.
13.8 No Waiver. No failure on the part of the Agent or any of the
Lenders to exercise, and no delay in exercising, any right, power or remedy
under this Agreement or any other Loan Document 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.
13.9 Extension of Maturity. Should any payment of principal of or
interest or any other amount due under this Agreement 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.
13.10 Amendments. No modification, amendment or waiver of any
provision of this Agreement, and no consent to any departure by the
Borrowers therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the
purpose for which given; provided that:
(i) no such modification or amendment shall without the written
consent of all of the Lenders (a) amend or modify any provision
of this Agreement which provides for the unanimous consent or
approval of the Lenders, (b) amend this Section 13.10 or the
definition of Required Lenders, (c) amend or modify the
Superpriority Claim status of the Lenders contemplated by
Section 4.1 or (d) release all or any substantial portion of
the Liens granted to the Agent under the Loan Documents;
(ii) no such modification or amendment shall without the written
consent of the Lender affected thereby (a) increase the
Revolving Commitment of a Lender (it being understood that a
waiver of an Event of Default shall not constitute an increase
in the Revolving Commitment of a Lender) or (b) reduce the
principal amount of any Loan or the rate of interest payable
thereon, or extend any date for the payment of interest under
this Agreement or reduce any Fees payable under this Agreement
or extend the final maturity of the Borrower's obligations
under this Agreement; or
(iii) no such amendment or modification may adversely affect the
rights and obligations of the Agent or the Letter of Credit
Issuer without its prior written consent.
No notice to or demand on the Borrowers shall entitle the Borrowers to any
other or further notice or demand in the same, similar or other
circumstances. Any consent by a Lender shall bind any Person subsequently
acquiring an interest on the Loans held by such Lender. No amendment to
this Agreement shall be effective against a Borrower unless signed by such
Borrowers.
13.11 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 of this
Agreement and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
13.12 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.
13.13 Prior Agreements. This Agreement and the other Loan Documents
represent the entire agreement of the parties with regard to the subject
matter of this Agreement and the terms of any letters and other
documentation entered into among the Borrowers and any Lender or the Agent
prior to the execution of this Agreement which relate to loans to be made
under this Agreement shall be replaced by the terms of this Agreement.
13.14 Further Assurances. Whenever and so often as reasonably
requested by the Agent, the Borrowers 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.
13.15 WAIVER OF JURY TRIAL. EACH OF THE BORROWERS, THE AGENT AND EACH
LENDER 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.
Executed and delivered in Chicago, Illinois as of the day and the year
first above written.
PARENT:
NUTRAMAX PRODUCTS, INC.
By:
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Title:
AGENT:
THE CIT GROUP/BUSINESS CREDIT, INC.
By:
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Title:
LENDERS:
THE CIT GROUP/BUSINESS CREDIT, INC.
By:
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Title:
BORROWERS:
ADHESIVE COATINGS, INC.
By:
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Title:
ELMWOOD PARK REALTY, INC.
By:
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Title:
CERTIFIED CORP.
By:
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Title:
POWERS PHARMACEUTICAL CORPORATION
By:
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Title:
FAIRETON REALTY HOLDINGS, INC.
By:
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Title:
FIRST AID PRODUCTS, INC.
By:
----------------------------------
Title:
NUTRAMAX HOLDINGS, INC.
By:
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Title:
NUTRAMAX HOLDINGS II, INC.
By:
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Title:
F.A. PRODUCTS, L.P.
By: FIRST AID PRODUCTS, INC.,
its general partner
By:
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Title:
▇▇▇▇▇▇▇▇ REALTY, INC.
By:
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Title:
NUTRAMAX ACQUISITION CORPORATION
By:
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Title:
NUTRAMAX ORTHALMICS INC.
By:
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Title:
ORAL CARE, INC.
By:
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Title: