EXHIBIT 99.1
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SENIOR SECURED, SUPER-PRIORITY DEBTOR-IN-POSSESSION
CREDIT AGREEMENT
Dated as of November 5, 2002
among
XXXXXX CUSTOM PLASTICS, LLC,
as Borrower
XXXXXX HOLDINGS, LLC
AND THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
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INDEX OF APPENDICES
Exhibit 1.1(a)(i) - Form of Notice of Revolving Credit
Advance
Exhibit 1.1(a)(ii) - Form of Revolving Note
Exhibit 1.2 - Form of Cash Flow Budget
Exhibit 4.1(b)(i) - Form of Revolving Borrowing Base
Certificate
Exhibit 9.1(a) - Form of Assignment Agreement
Schedule 1.1 - Responsible Individual
Schedule 1.4 - Sources and Uses; Funds Flow
Memorandum
Schedule 2.1 - First Day Orders
Schedule 3.2 - Executive Offices; FEIN
Schedule 3.6 - Real Estate and Leases
Schedule 3.7 - Labor Matters
Schedule 3.8 - Ventures, Subsidiaries and Affiliates;
Outstanding Stock
Schedule 3.11 - Tax Matters
Schedule 3.12 - ERISA Plans
Schedule 3.13 - Litigation
Schedule 3.15 - Intellectual Property
Schedule 3.17 - Hazardous Materials
Schedule 3.18 - Insurance
Schedule 3.19 - Deposit and Disbursement Accounts
Schedule 3.20 - Government Contracts
Schedule 3.21 - Customer and Trade Relations
Schedule 3.22 - Material Agreements
Schedule 3.26 - Security Agreement Schedules
Schedule 5.1 - Corporate and Trade Names
Schedule 5.8 - Environmental Issues Summary
Schedule 6.3 - Indebtedness
Schedule 6.4(a) - Transactions with Affiliates
Schedule 6.7 - Existing Liens
Annex A (Recitals) - Definitions
Annex B (SECTION 1.2) - Letters of Credit
Annex C (SECTION 1.8) - Cash Management Systems
Annex D (SECTION 2.1(a)) - Schedule of Additional Closing Documents
Annex E (SECTION 4.1(a)) - Financial Statements and Projections-
Reporting
Annex F (SECTION 4.1(b)) - Collateral Reports
Annex G (SECTION 6.10) - Financial Covenants
Annex H (SECTION 9.9(a)) - Lenders' Wire Transfer Information
Annex I (SECTION 11.10) - Notice Addresses
Annex J (from Annex A - - Commitments as of Closing Date
Commitments definition)
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TABLE OF CONTENTS
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1. AMOUNT AND TERMS OF CREDIT.................................................................2
1.1. Credit Facilities................................................................2
1.2. Letters of Credit................................................................4
1.3. Prepayments......................................................................4
1.4. Use of Proceeds..................................................................6
1.5. Interest and Applicable Revolver Index Margin....................................6
1.6. Eligible Accounts................................................................7
1.7. Eligible Inventory..............................................................10
1.8. Cash Management Systems.........................................................11
1.9. Fees............................................................................11
1.10. Receipt of Payments.............................................................12
1.11. Application and Allocation of Payments..........................................12
1.12. Loan Account and Accounting.....................................................13
1.13. Indemnity.......................................................................13
1.14. Access..........................................................................14
1.15. Taxes...........................................................................14
1.16. Capital Adequacy; Increased Costs; Illegality; Replacement of
Lender in Respect to Increased Costs............................................15
1.17. Single Loan.....................................................................17
1.18. Super Priority Nature of Obligations and Lenders' Liens.........................17
1.19. Payment of Obligations..........................................................18
1.20. No Discharge; Survival of Claims................................................18
2. CONDITIONS PRECEDENT......................................................................18
2.1. Conditions to the Effective of this Agreement...................................18
2.2. Further Conditions to Each Loan.................................................20
3. REPRESENTATIONS AND WARRANTIES............................................................21
3.1. Corporate or Limited Liability Company Existence; Compliance
with Law........................................................................21
3.2. Executive Offices; FEIN.........................................................22
3.3. Corporate or Limited Liability Company Power, Authorization,
Enforceable Obligations.........................................................22
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(continued)
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3.4. [Intentionally Omitted.]........................................................22
3.5. [Intentionally Omitted.]........................................................22
3.6. Ownership of Property; Liens....................................................23
3.7. Labor Matters...................................................................23
3.8. Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness....................................................................24
3.9. Government Regulation...........................................................24
3.10. Margin Regulations..............................................................24
3.11. Taxes...........................................................................25
3.12. ERISA...........................................................................25
3.13. No Litigation...................................................................26
3.14. Brokers.........................................................................26
3.15. Intellectual Property...........................................................27
3.16. Full Disclosure.................................................................27
3.17. Environmental Matters...........................................................27
3.18. Insurance.......................................................................28
3.19. Deposit and Disbursement Accounts...............................................28
3.20. Government Contracts............................................................28
3.21. Customer and Trade Relations....................................................28
3.22. Agreements and Other Documents..................................................29
3.23. [Intentionally Omitted.]........................................................29
3.24. [Intentionally Omitted.]........................................................29
3.25. Status of Holdings; IRB Subsidiary..............................................29
3.26. Security Agreements; Intellectual Property Security Agreements
and Pledge Agreements...........................................................29
3.27. Reorganization Matters..........................................................29
4. FINANCIAL STATEMENTS AND INFORMATION......................................................30
4.1. Reports and Notices.............................................................30
4.2. Communication with Accountants..................................................30
5. AFFIRMATIVE COVENANTS.....................................................................31
5.1. Maintenance of Existence and Conduct of Business................................31
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TABLE OF CONTENTS
(continued)
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5.2. Payment of Obligations..........................................................31
5.3. Books and Records...............................................................32
5.4. Insurance; Damage to or Destruction of Collateral...............................32
5.5. Compliance with Laws............................................................33
5.6. Supplemental Disclosure.........................................................34
5.7. Intellectual Property...........................................................34
5.8. Environmental Matters...........................................................34
5.9. Landlords' Agreements, Mortgagee Agreements and Bailee Letters..................35
5.10. [Intentionally Omitted.]........................................................35
5.11. [Intentionally Omitted.]........................................................35
5.12. [Intentionally Omitted.]........................................................35
5.13. Vehicle Titles..................................................................35
5.14. [Intentionally Omitted.]........................................................36
5.15. Cash Management Systems.........................................................36
5.16. Further Assurances..............................................................36
6. NEGATIVE COVENANTS........................................................................36
6.1. Mergers, Subsidiaries, Etc. ....................................................36
6.2. Investments; Loans and Advances.................................................36
6.3. Indebtedness....................................................................36
6.4. Employee Loans and Affiliate Transactions.......................................37
6.5. Capital Structure and Business..................................................37
6.6. Guaranteed Indebtedness.........................................................37
6.7. Liens...........................................................................38
6.8. Sale of Stock and Assets........................................................38
6.9. ERISA...........................................................................38
6.10. Financial Covenants.............................................................38
6.11. Hazardous Materials.............................................................38
6.12. Sale-Leasebacks.................................................................39
6.13. Cancellation of Indebtedness....................................................39
6.14. Restricted Payments.............................................................39
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(continued)
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6.15. Change of Corporate or Limited Liability Company Name or
Location; Change of Fiscal Year.................................................39
6.16. No Impairment of Intercompany Transfers.........................................39
6.17. No Speculative Transactions.....................................................40
6.18. Leases..........................................................................40
6.19. Credit Parties Other than Borrower..............................................40
6.20. Modifications of Certain Documents..............................................40
6.21. Worthington Litigation; Worthington Acquisition Agreement.......................40
6.22. Repayment of Indebtedness.......................................................40
6.23. Reclamation Claims..............................................................41
6.24. Chapter 11 Claims...............................................................41
7. TERM......................................................................................41
7.1. Termination.....................................................................41
7.2. Survival of Obligations Upon Termination of Financing
Arrangements....................................................................41
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES....................................................41
8.1. Events of Default...............................................................41
8.2. Remedies........................................................................45
8.3. Waivers by Credit Parties.......................................................46
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT.......................................46
9.1. Assignment and Participations...................................................46
9.2. Appointment of Agent............................................................48
9.3. Agent's Reliance, Etc. .........................................................49
9.4. GE Capital and Affiliates.......................................................50
9.5. Lender Credit Decision..........................................................50
9.6. Indemnification.................................................................50
9.7. Successor Agent.................................................................51
9.8. Setoff and Sharing of Payments..................................................51
9.9. Advances; Payments; Non-Funding Lenders; Information; Actions
in Concert......................................................................52
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(continued)
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10. SUCCESSORS AND ASSIGNS....................................................................54
10.1. Successors and Assigns..........................................................54
11. MISCELLANEOUS.............................................................................55
11.1. Complete Agreement; Modification of Agreement...................................55
11.2. Amendments and Waivers..........................................................55
11.3. Fees and Expenses...............................................................57
11.4. No Waiver.......................................................................58
11.5. Remedies........................................................................59
11.6. Severability....................................................................59
11.7. Conflict of Terms...............................................................59
11.8. Confidentiality.................................................................59
11.9. GOVERNING LAW...................................................................59
11.10. Notices.........................................................................60
11.11. Section Titles..................................................................61
11.12. Counterparts....................................................................61
11.13. WAIVER OF JURY TRIAL............................................................61
11.14. Press Releases..................................................................61
11.15. Reinstatement...................................................................62
11.16. Advice of Counsel...............................................................62
11.17. No Strict Construction..........................................................62
11.18. Affirmation of Existing Loan Documents..........................................62
11.19. Parties Including Trustees; Bankruptcy Court Proceedings........................63
11.20. Pre-Petition Credit Agreement...................................................63
11.21. Retention of Advisor............................................................63
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EXHIBIT 99.1
THIS SENIOR SECURED, SUPER-PRIORITY DEBTOR-IN-POSSESSION CREDIT
AGREEMENT, dated as of November 5, 2002 (this "AGREEMENT"), among XXXXXX CUSTOM
PLASTICS, LLC, a Delaware limited liability company ("MCP"), XXXXXX HOLDINGS,
LLC, a Delaware limited liability company ("HOLDINGS"), XXXXXX LEBANON KENTUCKY
IBRB, LLC, a Delaware limited liability company, as debtors and
debtors-in-possession (the "IRB SUBSIDIARY", and collectively with MCP and
Holdings, "BORROWER"), the other Credit Parties which may become signatory
hereto, GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its
individual capacity, "GE CAPITAL"), for itself, as Lender, and as Agent for
Lenders, and the other Lenders signatory hereto from time to time.
RECITALS
WHEREAS, on November 1, 2002 (the "PETITION DATE"), MCP, Holdings
and the IRB Subsidiary commenced Chapter 11 Case Nos. 02-13224 (PJW), 02-13226
(PJW), and 02-13227 (PJW), respectively (collectively, the "CHAPTER 11 CASE") by
filing voluntary petitions for reorganization under Chapter 11 of Title 11 of
the United States Code, 11 U.S.C. 101 et seq. (the "BANKRUPTCY CODE"), with the
United States Bankruptcy Court for the District of Delaware (the "BANKRUPTCY
COURT"). Borrower continues to operate its business and manage its property as
debtor and debtor-in-possession pursuant to Sections 1107(a) and 1108 of the
Bankruptcy Code.
WHEREAS, prior to the Petition Date, Lenders provided financing to
MCP pursuant to that certain Amended and Restated Credit Agreement, dated as of
March 25, 2002, among Borrower, the other credit parties signatory thereto, GE
Capital, as Agent and Lender, and the Lenders from time to time signatory
thereto (as amended, modified or supplemented, the "PRE-PETITION CREDIT
AGREEMENT");
WHEREAS, pursuant to the Pre-Petition Credit Agreement, the Lenders
agreed to make certain loans and other extensions of credit to Borrower of up to
$32,000,000 upon the terms and conditions set forth therein;
WHEREAS, Borrower has requested that Lenders provide a senior
secured super-priority revolving credit facility of up to Two Million Five
Hundred Thousand Dollars ($2,500,000) to fund the working capital requirements
of Borrower during the pendency of the Chapter 11 Case;
WHEREAS, Lenders are willing to provide to Borrower such
postpetition loans and other extensions of credit pursuant to a credit facility
having the terms and conditions set forth herein;
WHEREAS, the Credit Parties are willing to continue to secure all
of their obligations under the Loan Documents by granting to Agent, for the
benefit of Agent and Lenders, a security interest in and lien upon all of their
existing and after-acquired personal and real property (other than avoidance
actions and any proceeds thereof (the
"Avoidance Actions") available to the bankruptcy estate of the Debtor pursuant
to Sections 544, 545, 547, 548, 549, 550, 553(b) or 724(a) of the Bankruptcy
Code);
WHEREAS, Agent's and the Lenders' willingness to extend financial
accommodations to Borrower, and to administer Borrower's collateral security
therefor, on a combined basis as more fully set forth in this Agreement, is done
solely as an accommodation to Borrower and at Borrower's request and in
furtherance of Borrower's mutual and collective enterprise; and
WHEREAS, capitalized terms used in this Agreement shall have the
meanings ascribed to them in ANNEX A and, for purposes of this Agreement and the
other Loan Documents, the rules of construction set forth in ANNEX A shall
govern. All Annexes, Disclosure Schedules, Exhibits and other attachments
(collectively, "APPENDICES") hereto, or expressly identified to this Agreement,
are incorporated herein by reference, and taken together with this Agreement,
shall constitute but a single agreement. These Recitals shall be construed as
part of the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree that as of the Closing Date as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1. CREDIT FACILITIES
(a) REVOLVING CREDIT FACILITY.
(i) Subject to the terms and conditions hereof, each
Revolving Lender agrees to make available from time to time to Borrower until
the Commitment Termination Date its Pro Rata Share of revolving credit advances
(each, a "REVOLVING CREDIT ADVANCE"). The Pro Rata Share of the Revolving Loan
of any Revolving Lender shall not at any time exceed its separate Revolving Loan
Commitment. The obligations of each Revolving Lender hereunder shall be several
and not joint. The aggregate amount of Revolving Credit Advances outstanding
shall not exceed at any time the lesser of (A) the Maximum Amount and (B) the
Revolving Borrowing Base, in each case less (x) the amount of the Letter of
Credit Obligations outstanding at such time and (y) the amount of any Reserves
which may have been established at such time by Agent in its reasonable credit
judgment("BORROWING AVAILABILITY"). Until the Commitment Termination Date,
Borrower may from time to time borrow, repay and reborrow under this SECTION
1.1(a). Each Revolving Credit Advance shall be made on notice by Borrower to the
representative of Agent identified on DISCLOSURE SCHEDULE (1.1) at the address
specified thereon. Those notices must be given no later than 11:00 a.m. (
New
York time) on the Business Day of the proposed Revolving Credit Advance in the
case of an Index Rate Loan. Each such notice (a "NOTICE OF REVOLVING CREDIT
ADVANCE") must be given in writing (by telecopy or overnight courier)
substantially in the form of EXHIBIT
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1.1(a)(i), and shall include the information required in such Exhibit and such
other information as may be required by Agent.
(ii) Borrower shall execute and deliver to each Revolving
Lender a note to evidence the Revolving Loan Commitment of that Revolving
Lender. Each note shall be in the principal amount of the Revolving Loan
Commitment of the applicable Revolving Lender, dated the Closing Date and
substantially in the form of EXHIBIT 1.1(a)(ii) (each a "REVOLVING NOTE" and,
collectively, the "REVOLVING NOTES"). Each Revolving Note shall represent the
obligation of Borrower to pay the amount of each Revolving Lender's Revolving
Loan Commitment or, if less, the applicable Revolving Lender's Pro Rata Share of
the aggregate unpaid principal amount of all Revolving Credit Advances to
Borrower together with interest thereon as prescribed in SECTION 1.5. The entire
unpaid balance of the Revolving Loan and all other non-contingent Obligations
shall be immediately due and payable in full in immediately available funds on
the Commitment Termination Date.
(iii) Notwithstanding anything to the contrary contained
in this Agreement, until such time as designated by Agent to Borrower in writing
(such decision to be made by Agent in its sole and absolute discretion) (A)
during any calendar week, the amount of the Revolving Credit Advances shall not
exceed the amount scheduled under the Cash Flow Budget to be paid during such
week; and (B) any of the provisions hereof requiring Borrower to comply with the
Revolving Borrowing Base shall be inapplicable.
(b) [Intentionally Omitted.]
(c) [Intentionally Omitted.]
(d) [Intentionally Omitted.]
(e) RELIANCE ON NOTICES. Agent shall be entitled to rely upon, and
shall be fully protected in relying upon, any Notice of Revolving Credit
Advance, Notice of Conversion/Continuation or similar notice believed by Agent
to be genuine. Agent may assume that each Person executing and delivering such a
notice was duly authorized, unless the responsible individual acting thereon for
Agent has actual knowledge to the contrary.
(f) LOANS UNDER PRE-PETITION CREDIT AGREEMENT. The Credit Parties
acknowledge and agree that as of November 1, 2002, the principal balance of the
loans outstanding under the Pre-Petition Credit Agreement (excluding interest,
fees, costs and legal and other expenses (in the amount of at least $1,083,700)
but including issued and undrawn letters of credit) was approximately (i)
$10,800,000 in Revolving Credit Advances. (ii) $10,000,000 under Term Loan A,
(iii) $6,900,000 under Term Loan B, and (iv) $4,172,222 under Term Loan C.
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1.2. LETTERS OF CREDIT.
(a) Subject to and in accordance with the terms and conditions
contained herein and in ANNEX B, Borrower, on behalf of Borrower, shall have the
right to request, and Revolving Lenders agree to incur, or purchase
participations in, Letter of Credit Obligations in respect of Borrower.
(b) On and as of the Closing Date, all letters of credit issued
for the account of Borrower under the Pre-Petition Credit Agreement (the
"EXISTING LETTERS OF CREDIT") shall continue in place as Letters of Credit under
such Agreement and shall be subject to the terms and conditions of such
Agreement, including, without limitation, ANNEX B THERETO. All obligations under
or in connection with the Existing Letters of Credit shall constitute Letter of
Credit Obligations thereunder.
1.3. PREPAYMENTS
(a) VOLUNTARY PREPAYMENTS. In addition, Borrower may at any time
on at least ten (10) days' prior written notice by Borrower to Agent terminate
the Revolving Loan Commitment; provided that upon such termination, all Loans
and other Obligations shall be immediately due and payable in full. Upon any
such prepayment and termination of the Revolving Loan Commitment, Borrower's
right to request Revolving Credit Advances, or request that Letter of Credit
Obligations be incurred on its behalf shall simultaneously be terminated.
(b) MANDATORY PREPAYMENTS.
(i) If at any time the outstanding balance of the
aggregate Revolving Loan exceeds the lesser of (A) the Maximum Amount and (B)
the Revolving Borrowing Base, Borrower shall immediately repay the aggregate
outstanding Revolving Credit Advances to the extent required to eliminate such
excess. If any such excess remains after repayment in full of the aggregate
outstanding Revolving Credit Advances, Borrower shall provide cash collateral
for the Letter of Credit Obligations in the manner set forth in ANNEX B to the
extent required to eliminate such excess.
(ii) Immediately upon receipt by any Credit Party of
proceeds of any asset disposition (including condemnation proceeds, but
excluding proceeds of asset dispositions permitted by SECTION 6.8 (a)) or any
sale of Stock of any Subsidiary of any Credit Party, Borrower shall prepay the
Loans in an amount equal to all such proceeds, net of (A) commissions and other
reasonable and customary transaction costs, fees and expenses properly
attributable to such transaction and payable by Borrower in connection therewith
(in each case, paid to non-Affiliates), (B) transfer taxes, (C) amounts payable
to holders of senior Liens (to the extent such Liens constitute Permitted
Encumbrances hereunder), if any, and (D) an appropriate reserve for income taxes
in accordance with GAAP in connection therewith. Any such prepayment shall be
applied in accordance with CLAUSE (c) below.
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(iii) If Holdings or Borrower issues any Stock (other than
Stock issued upon the exercise of the Borrower Warrant) or incurs any
Indebtedness (other than Indebtedness permitted by SECTION 6.3), no later than
the Business Day following the date of receipt of the proceeds thereof, Borrower
shall prepay the Loans in an aggregate amount equal to all such proceeds, net of
underwriting discounts and commissions and other reasonable costs paid to
non-Affiliates in connection therewith. Any such prepayment shall be applied in
accordance with CLAUSE (c) below.
(iv) Borrower shall prepay the Obligations on the earlier
of the date which is ten (10) days after (A) the date on which Holdings' annual
audited Financial Statements for the immediately preceding Fiscal Year are
delivered pursuant to ANNEX E and (B) the date on which such annual audited
Financial Statements were required to be delivered pursuant to ANNEX E, in an
amount equal to 100% of Excess Cash Flow for the immediately preceding Fiscal
Year. Any prepayments from Excess Cash Flow paid pursuant to this CLAUSE (iv)
shall be allocated to Borrower's Obligations based upon Borrower's relative
contribution to Excess Cash Flow and shall be applied in accordance with CLAUSE
(c) below. Each such prepayment shall be accompanied by a certificate signed by
Borrower's chief financial officer certifying the manner in which Excess Cash
Flow, the resulting prepayment, and the method of allocation to Borrower's
Obligations were calculated, which certificate shall be in form and substance
satisfactory to Agent.
(c) APPLICATION OF CERTAIN MANDATORY PREPAYMENTS. Any prepayments
made by Borrower pursuant to CLAUSES (b)(ii), (b)(iii) or (b)(iv) above or
prescribed by SECTION 5.4(c) shall be applied as follows: FIRST, to Fees and
reimbursable expenses of Agent then due and payable pursuant to any of the Loan
Documents; SECOND, to interest then due and payable on Revolving Credit Advances
made to Borrower; THIRD, to the principal balance of Revolving Credit Advances
outstanding to Borrower until the same shall have been paid in full; FOURTH, to
repay in full the outstanding principal, accrued interest, and accrued fees and
expenses owing to Prior Lenders under the Pre-Petition Credit Agreement; and
LAST, to any Letter of Credit Obligations of Borrower to provide cash collateral
therefor in the manner set forth in ANNEX B, until all such Letter of Credit
Obligations have been fully cash collateralized in the manner set forth in ANNEX
B. The Revolving Loan Commitment shall not be permanently reduced by the amount
of any such prepayments.
(d) APPLICATION OF PREPAYMENTS FROM INSURANCE PROCEEDS.
Prepayments from insurance proceeds in accordance with SECTION 5.4(c) shall be
applied in accordance with Section 1.3(c) above.
(e) NO IMPLIED CONSENT. Nothing in this SECTION 1.3 shall be
construed to constitute Agent's or any Lender's consent to any transaction
referred to in CLAUSES (b)(i) and (b)(ii) above which is not permitted by other
provisions of this Agreement or the other Loan Documents.
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1.4. USE OF PROCEEDS. Subject to SECTION 1.1(a)(iii), Borrower shall
utilize the proceeds of the Revolving Loan which are incurred on the Closing
Date (net of any amounts used on the Closing Date to pay Fees) (x) for working
capital and general corporate purposes (including certain fees and expenses of
professionals retained by Borrower, subject to the Carve-Out Amount, but
excluding in any event the making of any Restricted Payment not specifically
permitted by SECTION 6.14) and (y) certain other pre-petition expenses that are
approved by the Bankruptcy Court and consented to by Agent. Borrower shall not
be permitted to use the proceeds of the Revolving Loan: (i) to finance in any
way any adversary action, suit, arbitration, proceeding, application, motion or
other litigation of any type relating to or in connection with the Pre-Petition
Credit Agreement or any of the loan documents or instruments entered into in
connection therewith, including, without limitation, any challenges to the
obligations under the Pre-Petition Credit Agreement, or the validity,
perfection, priority, or enforceability of any Lien securing such claims or any
payment made thereunder, and (ii) to finance in any way any action, suit,
arbitration, proceeding, application, motion or other litigation of any type
adverse to the interests of Agent and Lenders or their rights and remedies under
this Agreement, the other Loan Documents, the Interim Order or the Final Order.
DISCLOSURE SCHEDULE (1.4) contains a description of Borrower's sources and uses
of funds as of the Closing Date, including Loans and Letter of Credit
Obligations to be made or incurred on that date, and a funds flow memorandum
detailing how funds from each source are to be transferred to particular uses.
1.5. INTEREST AND APPLICABLE REVOLVER INDEX MARGIN. (a) Borrower shall
pay interest to Agent, for the ratable benefit of Lenders in accordance with the
various Loans being made by each Lender, in arrears on each applicable Interest
Payment Date, at the following rates: with respect to the Revolving Credit
Advances, the Index Rate plus the Applicable Revolver Index Margin per annum,
based on the aggregate Revolving Credit Advances outstanding from time to time.
(b) If any payment on any Loan becomes due and payable on a day
other than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis and
interest shall be made by Agent on the basis of a three hundred and sixty (360)
day year, in each case for the actual number of days occurring in the period for
which such interest and Fees are payable. The Index Rate shall be determined
each day based upon the Index Rate as in effect each day. Each determination by
Agent of an interest rate and Fees hereunder shall be conclusive, absent
manifest error.
(d) So long as an Event of Default shall have occurred and be
continuing under Section 8.1(a) or so long as any other Default or Event of
Default shall have occurred and be continuing and at the election of Agent (or
upon the written request
6
of Requisite Lenders) confirmed by written notice from Agent to Borrower, the
interest rates applicable to the Loans and the Letter of Credit Fees shall be
increased by two percent (2%) per annum above the rates of interest or the rate
of such Fees otherwise applicable hereunder ("DEFAULT RATE"), and all
outstanding Obligations shall bear interest at the Default Rate applicable to
such Obligations. Interest and Letter of Credit Fees at the Default Rate shall
accrue from the initial date of such Default or Event of Default until that
Default or Event of Default is cured or waived and shall be payable upon demand.
(e) [Intentionally Omitted.]
(f) Notwithstanding anything to the contrary set forth in this
SECTION 1.5, if a court of competent jurisdiction determines in a final order
that the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "MAXIMUM LAWFUL RATE"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; PROVIDED, HOWEVER, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrower shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Agent, on behalf
of Lenders, is equal to the total interest which would have been received had
the interest rate payable hereunder been (but for the operation of this
paragraph) the interest rate payable since the Closing Date as otherwise
provided in this Agreement. Thereafter, interest hereunder shall be paid at the
rate(s) of interest and in the manner provided in SECTIONS 1.5(a) through (e)
above, unless and until the rate of interest again exceeds the Maximum Lawful
Rate, and at that time this paragraph shall again apply. In no event shall the
total interest received by any Lender pursuant to the terms hereof exceed the
amount which such Lender could lawfully have received had the interest due
hereunder been calculated for the full term hereof at the Maximum Lawful Rate.
If the Maximum Lawful Rate is calculated pursuant to this paragraph, such
interest shall be calculated at a daily rate equal to the Maximum Lawful Rate
divided by the number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this SECTION 1.5(f), a court of competent
jurisdiction shall finally determine that a Lender has received interest
hereunder in excess of the Maximum Lawful Rate, Agent shall, to the extent
permitted by applicable law, promptly apply such excess in the order specified
in SECTION 1.11 and thereafter shall refund any excess to Borrower or as a court
of competent jurisdiction may otherwise order.
1.6. ELIGIBLE ACCOUNTS. Based on the most recent Revolving Borrowing
Base Certificate delivered by Borrower to Agent and on other information
available to Agent, Agent shall in its reasonable credit judgment determine
which Accounts of Borrower shall be "ELIGIBLE ACCOUNTS" for purposes of this
Agreement. In determining whether a particular Account of Borrower constitutes
an Eligible Account, Agent shall not include any such Account to which any of
the exclusionary criteria set forth below applies. Agent reserves the right, at
any time and from time to time after the Closing Date, to
7
adjust any such criteria or to establish new criteria, in each case in its
reasonable credit judgment. Eligible Accounts shall not include any Account of
Borrower:
(a) which does not arise from the sale of goods or the performance
of services by Borrower in the ordinary course of its business;
(b) (i) upon which Borrower's right to receive payment is not
absolute or is contingent upon the fulfillment of any condition whatsoever or
(ii) as to which Borrower is not able to bring suit or otherwise enforce its
remedies against the Account Debtor through judicial process or (iii) if the
Account represents a progress billing consisting of an invoice for goods sold or
used or services rendered pursuant to a contract under which the Account
Debtor's obligation to pay that invoice is subject to Borrower's completion of
further performance under such contract or is subject to the equitable lien of a
surety bond issuer;
(c) to the extent that any defense, counterclaim, setoff or
dispute is asserted as to such Account;
(d) that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account for merchandise sold to or
services rendered and accepted by the applicable Account Debtor;
(e) with respect to which an invoice, acceptable to Agent in form
and substance, has not been sent to the applicable Account Debtor;
(f) that (i) is not owned by Borrower or (ii) is subject to any
right, claim, security interest or other interest of any other Person, other
than Liens in favor of Agent, on behalf of itself and Lenders;
(g) that arises from a sale to any director, officer, other
employee or Affiliate of any Credit Party, or to any entity which has a majority
of directors who are also directors of any Credit Party;
(h) that is the obligation of an Account Debtor that is the United
States government or a political subdivision thereof, or any state or
municipality or department, agency or instrumentality thereof unless Agent, in
its sole discretion, has agreed to the contrary in writing and Borrower, if
necessary or desirable, has complied with the Federal Assignment of Claims Act
of 1940, and any amendments thereto, or any applicable state statute or
municipal ordinance of similar purpose and effect, with respect to such
obligation;
(i) that is the obligation of an Account Debtor located in a
foreign country other than Canada (excluding the provinces of Quebec,
Newfoundland, Nova Scotia and Xxxxxx Xxxxxx Island) unless payment thereof is
assured by a letter of credit assigned and delivered to Agent, satisfactory to
Agent as to form, amount and issue;
8
(j) to the extent Borrower or any Subsidiary thereof is liable for
goods sold or services rendered by the applicable Account Debtor (including,
without limitation, with respect to any resin expenses owing to General Electric
Company or any of its Affiliates) to Borrower or any Subsidiary thereof but only
to the extent of the potential offset;
(k) that arises with respect to goods which are delivered on a
xxxx-and-hold, cash-on-delivery basis or placed on consignment, guaranteed sale
or other terms by reason of which the payment by the Account Debtor is or may be
conditional;
(l) that is in default; PROVIDED, THAT, without limiting the
generality of the foregoing, an Account shall be deemed in default upon the
occurrence of any of the following:
(i) it is not paid within the earlier of: sixty (60)
days following its due date or ninety (90) days following its original invoice
date;
(ii) if any Account Debtor obligated upon such Account
suspends business, makes a general assignment for the benefit of creditors or
fails to pay its debts generally as they come due; or
(iii) if any petition is filed by or against any Account
Debtor obligated upon such Account under any bankruptcy law or any other
federal, state or foreign (including any provincial) receivership, insolvency
relief or other law or laws for the relief of debtors;
(m) which is the obligation of an Account Debtor if fifty percent
(50%) or more of the dollar amount of all Accounts owing by that Account Debtor
are ineligible under the criteria set forth in clause (l) of this SECTION 1.6;
(n) as to which Agent's Lien thereon, on behalf of itself and
Lenders, is not a first priority perfected Lien;
(o) as to which any of the representations or warranties
pertaining to Accounts set forth in this Agreement or the Borrower Security
Agreement is untrue;
(p) to the extent such Account is evidenced by a judgment,
Instrument or Chattel Paper;
(q) to the extent such Account exceeds any credit limit
established by Agent, in its reasonable discretion, following prior notice of
such limit by Agent to Borrower;
(r) to the extent that such Account, together with all other
Accounts owing by such Account Debtor and its Affiliates as of any date of
determination exceed
9
ten percent (10%) (or, in the case of an Account Debtor consisting of any (i)
Account Debtor (other than the ones referred to in clause (ii) below) whose
senior unsecured long-term debt is rated at least BBB by Xxxxx'x Investors
Service, Inc. or the equivalent thereof by Standard & Poor's Ratings Group or
other nationally recognized rating agency acceptable to Agent, twenty percent
(20%) or (ii) of General Electric Corporation, Deere & Company, Honda of
America, Inc. or BE Aerospace, Inc., twenty-five percent (25%)) of all Eligible
Accounts;
(s) which is payable in any currency other than Dollars; or
(t) which is unacceptable to Agent in its reasonable credit
judgment relating to such Account or the applicable Account Debtor.
1.7. ELIGIBLE INVENTORY. Based on the most recent Revolving Borrowing
Base Certificate delivered by Borrower to Agent and on other information
available to Agent, Agent shall in its reasonable credit judgment determine
which Inventory of Borrower shall be "ELIGIBLE INVENTORY" for purposes of this
Agreement. In determining whether any particular Inventory of Borrower
constitutes Eligible Inventory, Agent shall not include any such Inventory to
which any of the exclusionary criteria set forth below applies. Agent reserves
the right, at any time and from time to time after the Closing Date, to adjust
any such criteria and to establish new criteria, in its reasonable credit
judgment. Eligible Inventory shall not include any Inventory of Borrower that:
(a) is not owned by Borrower free and clear of all Liens and
rights of any other Person (including the rights of a purchaser that has made
progress payments and the rights of a surety that has issued a bond to assure
Borrower's performance with respect to that Inventory), except the Liens in
favor of Agent, on behalf of itself and Lenders, and Permitted Encumbrances in
favor of landlords and bailees to the extent permitted in SECTION 5.9 hereof
(subject to Reserves established by Agent in accordance with Section 5.9
hereof);
(b) (i) is not located on premises owned or leased by Borrower or
(ii) is stored with a bailee, warehouseman or similar Person, unless Agent has
given its prior consent thereto and unless (x) a satisfactory bailee letter or
landlord waiver has been delivered to Agent, or (y) Reserves satisfactory to
Agent have been established with respect thereto, or (iii) is located at any
site if the aggregate book value of Inventory at any such location is less than
$100,000;
(c) is placed on consignment or is in transit;
(d) is covered by a negotiable document of title, unless such
document has been delivered to Agent with all necessary endorsements, free and
clear of all Liens except those in favor of Agent and Lenders;
10
(e) in Agent's reasonable determination, is excess, obsolete,
unsalable, shopworn, seconds, damaged or unfit for sale;
(f) consists of display items or packing or shipping materials,
manufacturing supplies or replacement parts;
(g) consists of goods which have been returned by the buyer;
(h) is not of a type held for sale in the ordinary course of
Borrower's business;
(i) as to which Agent's Lien, on behalf of itself and Lenders,
therein is not a first priority perfected Lien;
(j) as to which any of the representations or warranties
pertaining to Inventory set forth in this Agreement or the Borrower Security
Agreement is untrue;
(k) consists of any costs associated with "freight-in" charges;
(l) consists of Hazardous Materials or goods that can be
transported or sold only with licenses that are not readily available;
(m) is not covered by casualty insurance meeting the requirements
of this Agreement or the other Loan Documents; or
(n) is otherwise unacceptable to Agent in its reasonable credit
judgment relating to such Inventory.
1.8. CASH MANAGEMENT SYSTEMS. On or prior to the Closing Date, Borrower
will establish and will maintain until the Termination Date, the cash management
systems described on ANNEX C (the "CASH MANAGEMENT SYSTEMS").
1.9. FEES. As consideration and compensation for the making of Revolving
Loans by the Revolving Lenders, Borrower shall pay to Agent the following:
(a) for the ratable benefit of the Revolving Lenders, a fee of
1.5% of the Revolving Loan Commitment, due and payable upon Borrower's execution
of this Agreement;
(b) for the ratable benefit of Revolving Lenders, a closing fee
of 2.5% of the Revolving Loan Commitment, due and payable as follows: 1% of the
Revolving Loan Commitment upon Borrower's execution of this Agreement and 1.5%
of the Revolving Loan Commitment on the Closing Date;
(c) for the ratable benefit of Revolving Lenders, the Letter of
Credit Fee as provided in ANNEX B;
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(d) in accordance with the terms of Section 11.3 hereof, the
field audit charges, together with actual out-of-pocket expenses related
thereto, incurred by Agent in performing up to four field examinations per
calendar year (or more if a Default or Event of Default shall have occurred and
be continuing) after the Closing Date; and
(e) a collateral monitoring fee of $2500 per calendar month,
payable on the first Business Day of each month on and after the Closing Date
through and including the Termination Date.
1.10. RECEIPT OF PAYMENTS. Borrower shall make each payment under this
Agreement not later than 2:00 p.m. (
New York time) on the day when due in
immediately available funds in Dollars to the Collection Account. For purposes
of computing interest and Fees and determining Borrowing Availability as of any
date, all payments shall be deemed received on the day of receipt of immediately
available funds therefor in the Collection Account prior to 2:00 p.m.
New York
time. Payments received after 2:00 p.m.
New York time on any Business Day shall
be deemed to have been received on the following Business Day.
1.11. APPLICATION AND ALLOCATION OF PAYMENTS. (a) So long as no Default
or Event of Default shall have occurred and be continuing, (i) payments
consisting of proceeds of Accounts received in the ordinary course of business
shall be applied to the Revolving Loan; (ii) voluntary prepayments shall be
applied as determined by Borrower, subject to the provisions of SECTION 1.3(a);
and (iii) mandatory prepayments shall be applied as set forth in SECTION 1.3(c).
All payments and prepayments applied to a particular Loan shall be applied
ratably to the portion thereof held by each Lender as determined by its Pro Rata
Share. As to each other payment, and as to all payments made when a Default or
Event of Default shall have occurred and be continuing or following the
Commitment Termination Date, Borrower hereby irrevocably waives the right to
direct the application of any and all payments received from or on behalf of
Borrower, and Borrower hereby irrevocably agrees that Agent shall have the
continuing exclusive right to apply any and all such payments against the
Obligations of Borrower as Agent may deem advisable notwithstanding any previous
entry by Agent in the Loan Account or any other books and records. In the
absence of a specific determination by Agent with respect thereto, payments
shall be applied to amounts then due and payable in the following order: (1) to
Fees and Agent's expenses reimbursable hereunder; (2) interest on the Loans,
ratably in proportion to the interest accrued as to each Loan; (3) to principal
payments on the Loans and to provide cash collateral for Letter of Credit
Obligations in the manner described in ANNEX B, ratably to the aggregate,
combined principal balance of the Loans and outstanding Letter of Credit
Obligations; and (4) to all other Obligations including expenses of Lenders to
the extent reimbursable under SECTION 11.3.
(b) Agent is authorized to, and at its sole election may, charge
to the Revolving Loan balance on behalf of Borrower and cause to be paid all
Fees, expenses, Charges, costs (including insurance premiums in accordance with
SECTION 5.4(a)) and
12
interest and principal, other than principal of the Revolving Loan, owing by
Borrower under this Agreement or any of the other Loan Documents if and to the
extent Borrower fails to promptly pay any such amounts as and when due, even if
such charges would cause the balance of the aggregate Revolving Loan to exceed
Borrowing Availability; PROVIDED, HOWEVER, that prior to an occurrence of an
Event of Default, Agent shall not make Revolving Credit Advances to pay any such
Fees, expenses, Charges, costs, and interest and principal in excess of the
amounts set forth in the Cash Flow Budget. At Agent's option and to the extent
permitted by law, any charges so made shall constitute part of the Revolving
Loan hereunder.
1.12. LOAN ACCOUNT AND ACCOUNTING. Agent shall maintain a loan account
(the "LOAN ACCOUNT") on its books to record: all Advances and the Obligations
under the Pre-Petition Credit Agreement; all payments made by Borrower, and all
other debits and credits as provided in this Agreement with respect to the Loans
or any other Obligations. All entries in the Loan Account shall be made in
accordance with Agent's customary accounting practices as in effect from time to
time. The balance in the Loan Account, as recorded on Agent's most recent
printout or other written statement, shall, absent manifest error, be
presumptive evidence of the amounts due and owing to Agent and Lenders by
Borrower; PROVIDED that any failure to so record or any error in so recording
shall not limit or otherwise affect Borrower's duty to pay the Obligations.
Agent shall render to Borrower a monthly accounting of transactions with respect
to the Loans setting forth the balance of the Loan Account as to Borrower.
Unless Borrower notifies Agent in writing of any objection to any such
accounting (specifically describing the basis for such objection), within
forty-five (45) days after the date thereof, each and every such accounting
shall (absent manifest error) be deemed final, binding and conclusive upon
Borrower in all respects as to all matters reflected therein. Only those items
expressly objected to in such notice shall be deemed to be disputed by Borrower.
Notwithstanding any provision herein contained to the contrary, any Lender may
elect (which election may be revoked) to dispense with the issuance of Notes to
that Lender and may rely on the Loan Account as evidence of the amount of
Obligations from time to time owing to it.
1.13. INDEMNITY. Each Credit Party that is a signatory hereto shall
jointly and severally indemnify and hold harmless each of Agent, Lenders and
their respective Affiliates, and each such Person's respective officers,
directors, employees, attorneys, agents and representatives (each, an
"INDEMNIFIED PERSON"), from and against any and all suits, actions, proceedings,
claims, damages, losses, liabilities and expenses (including reasonable
attorneys' fees and disbursements and other costs of investigation or defense,
including those incurred upon any appeal) which may be instituted or asserted
against or incurred by any such Indemnified Person as the result of credit
having been extended, suspended or terminated under this Agreement and the other
Loan Documents and the administration of such credit, and in connection with or
arising out of the transactions contemplated hereunder and thereunder and any
actions or failures to act in connection therewith, including any and all
Environmental Liabilities and legal costs and expenses arising out of or
incurred in connection with disputes between or among ANY PARTIES to
13
any of the Loan Documents (collectively, "INDEMNIFIED LIABILITIES"); PROVIDED,
that no such Credit Party shall be liable for any indemnification to an
Indemnified Person to the extent that any such suit, action, proceeding, claim,
damage, loss, liability or expense results from that Indemnified Person's gross
negligence or willful misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR
LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD
PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS
DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN
EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY
OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
1.14. ACCESS. Each Credit Party which is a party hereto shall, during
normal business hours, from time to time upon reasonable (but no less than one
Business Days') prior notice as frequently as Agent determines to be
appropriate: (a) provide Agent and any of its officers, employees and agents
access to its properties, facilities, advisors and employees (including
officers) of each Credit Party and to the Collateral, (b) permit Agent, and any
of its officers, employees and agents, to inspect, audit and make extracts from
any Credit Party's books and records, and (c) permit Agent, and its officers,
employees and agents, to inspect, review, evaluate and make test verifications
and counts of the Accounts, Inventory and other Collateral of any Credit Party.
If a Default or Event of Default shall have occurred and be continuing or if
access is necessary to preserve or protect the Collateral as determined by
Agent, each such Credit Party shall provide such access to Agent and to each
Lender at all times and without advance notice. Furthermore, so long as any
Event of Default shall have occurred and be continuing, Borrower shall provide
Agent and each Lender with reasonable access to their suppliers and customers.
Each Credit Party shall make available to Agent and its counsel, as quickly as
is possible under the circumstances, originals or copies of all books and
records which Agent may request. Each Credit Party shall deliver any document or
instrument necessary for Agent, as it may from time to time request, to obtain
records from any service bureau or other Person which maintains records for such
Credit Party, and shall maintain duplicate records or supporting documentation
on media, including computer tapes and discs owned by such Credit Party. Agent
will give Lenders at least ten (10) days' prior written notice of regularly
scheduled audits. Representatives of other Lenders may accompany Agent's
representatives on regularly scheduled audits at no charge to Borrower.
1.15. TAXES. (a) Any and all payments by Borrower hereunder or under the
Notes shall be made, in accordance with this SECTION 1.15, free and clear of and
without deduction for any and all present or future Taxes. If Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder (including any sum payable pursuant to SECTION 12) or under the Notes,
(i) the sum payable shall be increased
14
as much as shall be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
1.15) Agent or Lenders, as applicable, receive an amount equal to the sum they
would have received had no such deductions been made, (ii) Borrower shall make
such deductions, and (iii) Borrower shall pay the full amount deducted to the
relevant taxing or other authority in accordance with applicable law. Within
thirty (30) days after the date of any payment of Taxes, Borrower shall furnish
to Agent the original or a certified copy of a receipt evidencing payment
thereof.
(b) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and, within ten (10) Business Days' of demand therefor, pay
Agent and each Lender for the full amount of Taxes (including any Taxes imposed
by any jurisdiction on amounts payable under this SECTION 1.15) paid by Agent or
such Lender, as appropriate, and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto, whether or not such
Taxes were correctly or legally asserted.
(c) Each Lender organized under the laws of a jurisdiction outside
the United States (a "FOREIGN LENDER") as to which payments to be made under
this Agreement or under the Notes are exempt from United States withholding tax
under an applicable statute or tax treaty shall provide to Borrower and Agent a
properly completed and executed IRS Form W-8ECI or Form W-8BEN or other
applicable form, certificate or document prescribed by the IRS or the United
States certifying as to such Foreign Lender's entitlement to such exemption (a
"CERTIFICATE OF EXEMPTION"). Any foreign Person that seeks to become a Lender
under this Agreement shall provide a Certificate of Exemption to Borrower and
Agent prior to becoming a Lender hereunder. No foreign Person may become a
Lender hereunder if such Person is unable to deliver a Certificate of Exemption.
1.16. CAPITAL ADEQUACY; INCREASED COSTS; ILLEGALITY; REPLACEMENT OF
LENDER IN RESPECT TO INCREASED COSTS. (a) If any Lender shall have determined
that any law, treaty, governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy, reserve requirements or similar
requirements or compliance by any Lender with any request or directive regarding
capital adequacy, reserve requirements or similar requirements (whether or not
having the force of law), in each case, adopted after the Closing Date, from any
central bank or other Governmental Authority increases or would have the effect
of increasing the amount of capital, reserves or other funds required to be
maintained by such Lender and thereby reducing the rate of return on such
Lender's capital as a consequence of its obligations hereunder, then Borrower
shall from time to time upon demand by such Lender (with a copy of such demand
to Agent) pay to Agent, for the account of such Lender, additional amounts
sufficient to compensate such Lender for such reduction. A certificate as to the
amount of that reduction and showing the basis of the computation thereof
submitted by such Lender to Borrower and to Agent shall, absent manifest error,
be final, conclusive and binding for all purposes.
15
(b) If, due to either (i) the introduction of or any change in any
law or regulation (or any change in the interpretation thereof) or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each case
adopted after the Closing Date, there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining any Loan, then
Borrower shall from time to time, upon demand by such Lender (with a copy of
such demand to Agent), pay to Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost. A
certificate as to the amount of such increased cost, submitted to Borrower and
to Agent by such Lender, shall be conclusive and binding on Borrower for all
purposes, absent manifest error. Each Lender agrees that, as promptly as
practicable after it becomes aware of any circumstances referred to above which
would result in any such increased cost, the affected Lender shall, to the
extent not inconsistent with such Lender's internal policies of general
application, use reasonable commercial efforts to minimize costs and expenses
incurred by it and payable to it by Borrower pursuant to this SECTION 1.16(b).
(c) [Intentionally Omitted.]
(d) Within fifteen (15) days after receipt by Borrower of written
notice and demand from any Lender (an "AFFECTED LENDER") for payment of
additional amounts or increased costs as provided in SECTION 1.15(a), 1.16(a) or
1.16(b), Borrower may, at its option, notify Agent and such Affected Lender of
its intention to replace the Affected Lender. So long as no Default or Event of
Default shall have occurred and be continuing, Borrower, with the consent of
Agent, may obtain, at Borrower's expense, a replacement Lender ("REPLACEMENT
LENDER") for the Affected Lender, which Replacement Lender must be satisfactory
to Agent. If Borrower obtains a Replacement Lender within ninety (90) days
following notice of their intention to do so, the Affected Lender must sell and
assign its Loans and Commitments to such Replacement Lender for an amount equal
to the principal balance of all Loans held by the Affected Lender and all
accrued interest and Fees with respect thereto through the date of such sale,
PROVIDED that Borrower shall have reimbursed such Affected Lender for the
additional amounts or increased costs that it is entitled to receive under this
Agreement through the date of such sale and assignment.
Notwithstanding the foregoing, Borrower shall not have the right to
obtain a Replacement Lender if the Affected Lender rescinds its demand for
increased costs or additional amounts within fifteen (15) days following its
receipt of Borrower's notice of intention to replace such Affected Lender.
Furthermore, if Borrower gives a notice of intention to replace and do not so
replace such Affected Lender within ninety (90) days thereafter, Borrower's
rights under this SECTION 1.16(d) shall terminate and Borrower shall promptly
pay all increased costs or additional amounts demanded by such Affected Lender
pursuant to SECTIONS 1.15(a), 1.16(a) and 1.16(b).
16
(e) If any Lender shall fail to notify Borrower of any event
occurring after the date of this Agreement entitling such Lender to compensation
under this Section within 180 days after the officer of such Lender responsible
for the business relationship of such Lender with Borrower obtains actual
knowledge thereof, such Lender shall, with respect to compensation payable
pursuant to this Section in respect of any costs resulting from such event, only
be entitled to payment under this Section for costs incurred from and after the
date 180 days prior to the date that such Lender does give such notice.
1.17. SINGLE LOAN. All Loans to Borrower and all of the other Obligations
of Borrower arising under this Agreement and the other Loan Documents shall
constitute one general obligation of Borrower secured, until the Termination
Date, by all of its Collateral.
1.18. SUPER PRIORITY NATURE OF OBLIGATIONS AND LENDERS' LIENS.
(a) The priority of Lenders' Liens on the Collateral shall be set
forth in the Interim Order and the Final Order.
(b) All Obligations shall constitute administrative expenses of
Borrower in the Chapter 11 Case, with administrative priority and senior secured
status under Sections 364(c) and 364(d) of the Bankruptcy Code. Subject to the
Carve-Out Amount, such administrative claim shall have priority over all other
costs and expenses of the kinds specified in, or ordered pursuant to, Sections
105, 326, 330, 331, 503(b), 506(c), 507(a), 507(b), 726 or any other provision
of the Bankruptcy Code and shall at all times be senior to the rights of
Borrower, Borrower's estate, and any successor trustee or estate representative
in the Chapter 11 Case or any subsequent proceeding or case under the Bankruptcy
Code. The liens and security interests granted to Lenders, and the priorities
accorded to the Obligations shall have the priority and senior secured status
afforded by Sections 364(c) and 364(d)(1) of the Bankruptcy Code (all as more
fully set forth in the Interim Order and Final Order) senior to all claims and
interests other than (i) the Carve-Out Expenses up to the Carve-Out Amount and
(ii) the Senior Claims (PROVIDED, HOWEVER, that the Carve-Out Expenses up to the
Carve-Out Amount has priority over the liens of the Prior Lenders).
(c) Lenders' Liens on the Collateral and its administrative claim
under Sections 364(c)(1) and 364(d) of the Bankruptcy Code afforded the
Obligations shall also have priority over any claims arising under Section
506(c) of the Bankruptcy Code subject and subordinate only to the Senior Claims
and the following (hereafter referred to as the "CARVE-OUT EXPENSES"): fees and
disbursements incurred and allowed on and after the Petition Date by
professionals retained by Borrower (other than CBW) and any statutorily mandated
costs and fees of the United States Trustee with respect to the Chapter 11 Case,
up to a maximum aggregate amount unpaid on the Commitment Termination Date not
to exceed $600,000; such dollar amount being referred to herein as the
"CARVE-OUT AMOUNT") (determined without regard to fees and expenses which may be
awarded and paid on an interim basis or any pre-petition retainer paid to
Borrower's or
17
Committee's counsel in connection with the Chapter 11 Case), provided, that the
Carve-Out Expenses shall not include any other claims that are or may be senior
to or pari passu with any of the Carve-Out Expenses or any professional fees and
expenses of a Chapter 7 or Chapter 11 trustee and, provided, further, that
Carve-Out Expenses shall not include any fees or disbursements related to the
preparation for, or commencement or prosecution of, any claims or proceedings
against (i) Agent or the Lenders or their claims or security interests in or
Liens on, the Collateral whether under this Agreement or any other Loan Document
and (ii) any agent or lender under the Pre-Petition Credit Agreement or their
claims or security interests in connection with the Pre-Petition Credit
Agreement or any of the loan documents or instruments entered into in connection
therewith. Except as set forth herein or in the Final Order, no other claim
having a priority superior or pari passu to that granted to Lenders by the Final
Order shall be granted or approved while any Obligations under this Agreement
remain outstanding.
1.19. PAYMENT OF OBLIGATIONS. Upon the Maturity (whether by acceleration
or otherwise) of any of the Obligations under this Agreement or any of the other
Loan Documents, Lenders shall be entitled to immediate payment of such
Obligations without further application to or order of the Bankruptcy Court.
1.20. NO DISCHARGE; SURVIVAL OF CLAIMS. Borrower agrees that (a) the
Obligations hereunder shall not be discharged by the entry of an order
confirming a plan of reorganization in any Chapter 11 Case (and Borrower
pursuant to Section 1141(d)(4) of the Bankruptcy Code, hereby waives any such
discharge) and (ii) the superpriority administrative claim granted to Agent and
Lenders pursuant to the Interim Order and Final Order and described in SECTION
1.18 and the Liens granted to Agent pursuant to the Interim Order and Final
Order and described in SECTION 1.18 shall not be affected in any manner by the
entry of an order confirming a plan of reorganization in any Chapter 11 Case.
2. CONDITIONS PRECEDENT
2.1. CONDITIONS TO THE EFFECTIVE OF THIS AGREEMENT. This Agreement shall
not be effective, and no Lender shall be obligated to make any Loan or incur any
Letter of Credit Obligations on the Closing Date, or to take, fulfill, or
perform any other action hereunder, until the following conditions have been
satisfied or provided for in a manner satisfactory to Agent, or waived in
writing by Agent and Lenders:
(a) CREDIT AGREEMENT; LOAN DOCUMENTS. This Agreement or
counterparts hereof shall have been duly executed by, and delivered to,
Borrower, the other Credit Parties signatory hereto, Agent and Lenders; and
Agent shall have received such documents, instruments, agreements and legal
opinions as Agent shall reasonably request in connection with the transactions
contemplated by this Agreement and the other Loan Documents, including all those
listed in the Closing Checklist attached hereto as ANNEX D, each in form and
substance satisfactory to Agent.
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(b) APPROVALS. Agent shall have received (i) satisfactory evidence
that the Credit Parties have obtained all required consents and approvals of all
Persons including all requisite Governmental Authorities, to the execution,
delivery and performance of this Agreement and the other Loan Documents or (ii)
an officer's certificate in form and substance satisfactory to Agent affirming
that no such consents or approvals are required.
(c) [Intentionally Omitted.]
(d) PAYMENT OF FEES. Borrower shall have paid the Fees required to
be paid on the Closing Date in the respective amounts specified in SECTION 1.9,
and shall have reimbursed Agent for all fees, costs and expenses of closing
presented as of the Closing Date.
(e) CAPITAL STRUCTURE; OTHER INDEBTEDNESS. The capital structure
of each Credit Party and the terms and conditions of all Indebtedness
(including, without limitation, in respect of the Lebanon IRBs, the IRB Lease
Agreement and the IRB Indenture) of each Credit Party shall be acceptable to
Agent in its sole discretion.
(f) [Intentionally Omitted.]
(g) [Intentionally Omitted.]
(h) CREATION OF LENDERS' LIENS. The automatic stay shall have been
modified to permit the creation and perfection of Lenders' Liens and security
interests and shall have been automatically vacated to permit enforcement of
Lenders' rights and remedies under this Agreement.
(i) INTERIM ORDER. Entry by the Bankruptcy Court of the Interim
Order by no later than five (5) days after the Petition Date in form and
substance satisfactory to Lenders, approving the transactions contemplated
hereby and granting a first priority perfected security interest in the
Collateral subject only to (i) the Carve-Out Expenses up to the Carve-Out Amount
and (ii) the Senior Claims.
(j) DUE DILIGENCE. Agent shall have completed and be satisfied
with all business, environmental and legal due diligence (including assets
appraisals, environmental audits and collateral audits).
(k) ADEQUACY OF CORPORATE STRUCTURE. Agent shall be satisfied with
the corporate structure, capital structure, debt instruments, material
contracts, and governing documents of Borrower and its Subsidiaries, and the tax
effects resulting from the commencement of the Chapter 11 Case and the credit
facility evidenced by this Agreement.
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(l) CASH MANAGEMENT SYSTEM. Borrower shall have established the
Cash Management System described in Annex C hereto and Borrower shall have
obtained appropriate Bankruptcy Court orders approving such system, all as
acceptable to Agent; and
(m) FIRST DAY ORDERS. The "first day" orders described on
Disclosure Schedule 2.1 in form and substance satisfactory to Agent shall have
been entered in the Chapter 11 Case.
(n) XXXXXXX ACQUISITION. Agent shall have received such
information and documentation as it may require relating to the Xxxxxxx
Acquisition, including a fully executed Xxxxxxx Acquisition Agreement, all of
which shall be in form and substance acceptable to Agent in its discretion.
(o) WARN ACT COMPLIANCE. Borrower shall give all notices required
to be given under the WARN Act.
2.2. FURTHER CONDITIONS TO EACH LOAN. Except as otherwise expressly
provided herein, no Lender shall be obligated to fund any Loan, or incur any
Letter of Credit Obligation, if, as of the date thereof:
(a) The Advance requested would cause the aggregate outstanding
amount of the Loans and/or Letter of Credit Obligations to exceed the amount
then authorized by the Interim Order or the Final Order, as the case may be, or
any order modifying or vacating such order shall have been entered, or any
appeal of such order shall have been timely filed;
(b) Any representation or warranty by any Credit Party contained
herein or in any of the other Loan Documents shall be untrue or incorrect as of
such date, except to the extent that such representation or warranty expressly
relates to an earlier date and except for changes therein expressly permitted or
expressly contemplated by this Agreement; or
(c) Any event or circumstance having a Material Adverse Effect
with respect to the Credit Parties shall have occurred since the Petition Date,
as reasonably determined by the Requisite Revolving Lenders; or
(d) (i) Any Event of Default shall have occurred and be continuing
or would result after giving effect to any Loan (or the incurrence of any Letter
of Credit Obligations), or (ii) a Default shall have occurred and be continuing
or would result after giving effect to any Loan, and Agent or Requisite
Revolving Lenders shall have determined not to make any Loan or incur any Letter
of Credit Obligation so long as that Default is continuing; or
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(e) After giving effect to any Advance (or the incurrence of any
Letter of Credit Obligations), the outstanding principal amount of the aggregate
Revolving Loan would exceed the Borrowing Availability; or
(f) Such Advance (or the incurrence of any Letter of Credit
Obligations) is not contemplated and permitted by the Cash Flow Budget.
The request and acceptance by Borrower of the proceeds of any Loan, the
incurrence of any Letter of Credit Obligations, as the case may be, shall be
deemed to constitute, as of the date of such request or acceptance, (i) a
representation and warranty by Borrower that the conditions in this SECTION 2.2
have been satisfied and (ii) a reaffirmation by Borrower of the granting and
continuance of Agent's Liens, on behalf of itself and Lenders, pursuant to the
Collateral Documents.
(g) (i) The Bankruptcy Court shall not have entered the Final
Order on or before the date that is 35 days after the Petition Date, (ii) the
Bankruptcy Court shall not have entered the Final Order following the expiration
of the Interim Order, or (iii) the Interim Order or the Final Order, as the case
may be, shall have been vacated, reversed, modified or amended without Lenders'
consent, or an appeal of any such order shall have been timely filed and if such
order is the subject of a pending appeal in any respect, either the making of
any Loans, the granting of superpriority claim status with respect to the
Obligations, the granting of the Liens described herein, or the performance by
Borrower of any of its obligations under this Agreement or any other Loan
Document or under any other instrument or agreement referred to in this
Agreement shall be the subject of a presently effective stay pending appeal.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to incur Letter of Credit
Obligations, the Credit Parties executing this Agreement, jointly and severally,
make the following representations and warranties to Agent and each Lender with
respect to all Credit Parties, each and all of which shall survive the execution
and delivery of this Agreement.
3.1. CORPORATE OR LIMITED LIABILITY COMPANY EXISTENCE; COMPLIANCE WITH
LAW. Each Credit Party (a) is a corporation or limited liability company, as the
case may be, duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization; (b) is duly qualified to conduct
business and is in good standing in each other jurisdiction where its ownership
or lease of property or the conduct of its business requires such qualification,
except where the failure to be so qualified would not result in exposure to
losses, damages or liabilities in excess of $100,000; (c) has the requisite
organizational power and authority and the legal right to own, pledge, mortgage
or otherwise encumber and operate its properties, to lease the property it
operates under lease and to conduct its business as now, heretofore and proposed
to be conducted; (d) subject to specific representations regarding Environmental
Laws, has all licenses,
21
permits, consents or approvals from or by, and has made all filings with, and
has given all notices to, all Governmental Authorities having jurisdiction, to
the extent required for such ownership, operation and conduct, except when the
failure to have or do so, individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect; (e) is in compliance with its
charter and by-laws or equivalent organizational or charter or constituent
documents; and (f) subject to specific representations set forth herein
regarding ERISA, Environmental Laws, tax and other laws, is in compliance with
all applicable provisions of law, except where the failure to comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
3.2. EXECUTIVE OFFICES; FEIN. As of the Closing Date, the current
location of each Credit Party's chief executive office and principal place of
business is set forth in Disclosure Schedule (3.2), and none of such locations
have changed within the twelve (12) months preceding the Closing Date. In
addition, DISCLOSURE SCHEDULE (3.2) lists the federal employer identification
number of each Credit Party.
3.3. CORPORATE OR LIMITED LIABILITY COMPANY POWER, AUTHORIZATION,
ENFORCEABLE OBLIGATIONS. The execution, delivery and performance by each Credit
Party of the Loan Documents to which it is a party and the creation of all Liens
provided for therein: (a) are within such Person's organizational power; (b)
have been duly authorized by all necessary or proper organizational and
shareholder or membership action; (c) do not contravene any provision of such
Person's charter or bylaws or equivalent organizational or charter or other
constituent documents; (d) do not violate any law or regulation, or any order or
decree of any court or Governmental Authority; (e) do not conflict with or
result in the breach or termination of, constitute a default under or accelerate
or permit the acceleration of any performance required by, any indenture
(including, without limitation, the IRB Indenture), mortgage, deed of trust,
lease (including, without limitation, the IRB Lease Agreement), agreement or
other instrument to which such Person is a party or by which such Person or any
of its property is bound; (f) do not result in the creation or imposition of any
Lien upon any of the property of such Person other than those in favor of Agent,
on behalf of itself and Lenders, pursuant to the Loan Documents; and (g) do not
require the consent or approval of any Governmental Authority or any other
Person, except those referred to in SECTION 2.1(b), all of which will have been
duly obtained, made or complied with prior to the Closing Date. On or prior to
the Closing Date, each of the Loan Documents shall have been duly executed and
delivered by each Credit Party thereto and each such Loan Document shall then
constitute a legal, valid and binding obligation of such Credit Party
enforceable against it in accordance with its terms.
3.4. [Intentionally Omitted.]
3.5. [Intentionally Omitted.]
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3.6. OWNERSHIP OF PROPERTY; LIENS. As of the Closing Date, the real
estate ("REAL ESTATE") listed on DISCLOSURE SCHEDULE (3.6) constitutes all of
the real property owned, leased, subleased, or used by any Credit Party. Each
Credit Party owns good and marketable fee simple title to all of its owned real
estate, and valid and marketable leasehold interests in all of its leased Real
Estate, all as described on DISCLOSURE SCHEDULE (3.6), and copies of all such
leases or a summary of terms thereof satisfactory to Agent have been delivered
to Agent. DISCLOSURE SCHEDULE (3.6) further describes any Real Estate with
respect to which any Credit Party is a lessor, sublessor or assignor as of the
Closing Date. Each Credit Party also has good and marketable title to, or valid
leasehold interests in, all of its personal properties and assets. As of the
Closing Date, none of the properties and assets of any Credit Party are subject
to any Liens other than Permitted Encumbrances, and there are no facts,
circumstances or conditions known to any Credit Party that may result in any
Liens (including Liens arising under Environmental Laws) other than Permitted
Encumbrances. Each Credit Party has received all deeds, assignments, waivers,
consents, non-disturbance and recognition or similar agreements, bills of sale
and other documents, and has duly effected all recordings, filings and other
actions necessary to establish, protect and perfect such Credit Party's right,
title and interest in and to all such Real Estate and other properties and
assets. DISCLOSURE SCHEDULE (3.6) also describes any purchase options, rights of
first refusal or other similar contractual rights pertaining to any Real Estate.
As of the Closing Date, no portion of any Credit Party's Real Estate has
suffered any material damage by fire or other casualty loss which has not
heretofore been repaired and restored in all material respects to its original
condition or otherwise remedied. As of the Closing Date, all material permits
required to have been issued or appropriate to enable the Real Estate to be
lawfully occupied and used for all of the purposes for which they are currently
occupied and used have been lawfully issued and are in full force and effect.
3.7. LABOR MATTERS. As of the Closing Date (a) no strikes or other
material labor disputes against any Credit Party are pending or, to any Credit
Party's knowledge, threatened; (b) hours worked by and payment made to employees
of each Credit Party comply with the Fair Labor Standards Act and each other
federal, state, local or foreign law applicable to such matter; (c) all payments
due from any Credit Party for employee health and welfare insurance have been
paid or accrued as a liability on the books of such Credit Party; (d) except as
set forth in DISCLOSURE SCHEDULE (3.7), no Credit Party is a party to or bound
by any collective bargaining agreement, management agreement, consulting
agreement or any employment agreement (and true and complete copies of any
agreements described on DISCLOSURE SCHEDULE (3.7) have been delivered to Agent);
(e) there is no organizing activity involving any Credit Party pending or, to
any Credit Party's knowledge, threatened by any labor union or group of
employees; (f) there are no representation proceedings pending or, to any Credit
Party's knowledge, threatened with the National Labor Relations Board, and no
labor organization or group of employees of any Credit Party has made a pending
demand for recognition; and (g) except as set forth in DISCLOSURE SCHEDULE
(3.7), there are no complaints or charges against any Credit Party pending or,
to the knowledge of any Credit Party, threatened to be filed with any
23
Governmental Authority or arbitrator based on, arising out of, in connection
with, or otherwise relating to the employment or termination of employment by
any Credit Party of any individual.
3.8. VENTURES, SUBSIDIARIES AND AFFILIATES; OUTSTANDING STOCK AND
INDEBTEDNESS. Except as set forth in DISCLOSURE SCHEDULe (3.8), no Credit Party
has any Subsidiaries or is engaged in any joint venture or partnership with any
other Person. Except as set forth in DISCLOSURE SCHEDULE (3.8), as of the
Closing Date no Credit Party is an Affiliate of any other Person. All of the
issued and outstanding Stock of each Credit Party is owned by each of the
stockholders and/or members and in the amounts set forth on DISCLOSURE SCHEDULE
(3.8). There are no outstanding rights to purchase, options, warrants or similar
rights or agreements pursuant to which any Credit Party may be required to
issue, sell, repurchase or redeem any of its Stock or other equity securities or
any Stock or other equity securities of its Subsidiaries. All outstanding
Indebtedness of each Credit Party as of the Closing Date is described in SECTION
6.3 (including DISCLOSURE SCHEDULE (6.3)). None of the Credit Parties other than
Borrower has any assets (except nominal cash, Stock of their Subsidiaries, in
the case of the IRB Subsidiary, the Lebanon IRBs and the rights related thereto
and, in the case of Holdings, (i) $5,000,000 of cash received by Holdings from
Borrower and evidenced by the Holdings Note, (ii) capital contributions made to
Holdings so long as immediately thereafter an equal amount is contributed to the
capital of Borrower and (iii) payments that Holdings receives to the extent
permitted by SECTION 6.4 or SECTION 6.14) or any Indebtedness or Guaranteed
Indebtedness (except the Obligations and the Holdings Note).
3.9. GOVERNMENT REGULATION. No Credit Party is an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940 as amended. No Credit Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, or any other federal
or state statute that restricts or limits its ability to incur Indebtedness or
to perform its obligations hereunder. The making of the Loans by Lenders to
Borrower, the incurrence of the Letter of Credit Obligations on behalf of
Borrower, the application of the proceeds thereof and repayment thereof will not
violate any provision of any such statute or any rule, regulation or order
issued by the Securities and Exchange Commission.
3.10. MARGIN REGULATIONS. No Credit Party is engaged, nor will it engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin security" as
such terms are defined in Regulation U of the Federal Reserve Board as now and
from time to time hereafter in effect (such securities being referred to herein
as "MARGIN STOCK"). No Credit Party owns any Margin Stock, and none of the
proceeds of the Loans or other extensions of credit under this Agreement will be
used, directly or indirectly, for the purpose of purchasing or carrying any
Margin Stock, for the purpose of reducing or retiring any Indebtedness which was
originally incurred to purchase or carry any Margin Stock or for any other
24
purpose which might cause any of the Loans or other extensions of credit under
this Agreement to be considered a "purpose credit" within the meaning of
Regulation T, U or X of the Federal Reserve Board. No Credit Party will take or
permit to be taken any action which might cause any Loan Document to violate any
regulation of the Federal Reserve Board.
3.11. TAXES. All tax returns, reports and statements, including
information returns, required by any Governmental Authority ("TAX RETURNS") to
be filed by any Credit Party have been filed with the appropriate Governmental
Authority; all such Tax Returns are true, correct and complete in all material
respects; and all Charges have been paid prior to the date on which any fine,
penalty, interest or late charge may be added thereto for nonpayment thereof (or
any such fine, penalty, interest, late charge or loss has been paid), excluding
Charges or other amounts being contested in accordance with SECTION 5.2(b). No
adjustment relating to any Tax Return has been proposed formally or informally
by any Government Authority and, to the knowledge of each Credit Party, no basis
exists for such adjustment. Proper and accurate amounts have been withheld by
each Credit Party from its respective employees, independent contractors,
creditors, members, partners and other third parties for all periods in full and
complete compliance with all applicable federal, state, local and foreign law
and such withholdings have been timely paid to the respective Governmental
Authorities. DISCLOSURE SCHEDULE (3.11) sets forth as of the Closing Date those
taxable years for which any Credit Party's tax returns are currently being
audited by the IRS or any other applicable Governmental Authority and any
assessments or threatened assessments in connection with such audit, or
otherwise currently outstanding. Except as described on DISCLOSURE SCHEDULE
(3.11), no Credit Party has executed or filed with the IRS or any other
Governmental Authority any agreement or other document extending, or having the
effect of extending, the period for assessment or collection of any Charges.
None of the Credit Parties are liable for any Charges: (a) under any agreement
(including any tax sharing agreements other than the Tax Sharing Agreement) or
(b) to each Credit Party's knowledge, as a transferee. As of the Closing Date,
no Credit Party has agreed or been requested to make any adjustment under IRC
Section 481(a), by reason of a change in accounting method or otherwise, which
would have a Material Adverse Effect. DISCLOSURE SCHEDULE 3.11 sets forth the
federal and state net taxable income or loss, as the case may be, of Borrower
for the taxable years ending December 31, 2001, and 2001 (determined as if
Borrower were a separate taxable entity). During such years, (i) no
distributions or payments were made by Borrower to Holdings or any member of the
Xxxxxx Group with respect to the Tax Sharing Agreement and (ii) no other
distributions or payments have been made by Borrower to Holdings or any member
of the Xxxxxx Group.
3.12. ERISA. (a) DISCLOSURE SCHEDULE (3.12) lists and separately
identifies all Title IV Plans, Multiemployer Plans, ESOPs and Retiree Welfare
Plans. Copies of all such listed Plans, together with a copy of the latest form
5500 for each such Plan, have been delivered to Agent. Except with respect to
Multiemployer Plans, each Qualified Plan has been determined by the IRS to
qualify under Section 401 of the IRC, and the
25
trusts created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the IRC, and nothing has occurred which would cause
the loss of such qualification or tax-exempt status. Each Plan is in compliance
with the applicable provisions of ERISA and the IRC, including the filing of
reports required under the IRC or ERISA. No Credit Party or ERISA Affiliate has
failed to make any contribution or pay any amount due as required by either
Section 412 of the IRC or Section 302 of ERISA or the terms of any such Plan. No
Credit Party or ERISA Affiliate has engaged in a prohibited transaction, as
defined in Section 4975 of the IRC, in connection with any Plan, which would
subject any Credit Party to a material tax on prohibited transactions imposed by
Section 4975 of the IRC.
(b) Except as set forth in DISCLOSURE SCHEDULE (3.12): (i) no
Title IV Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event
described in Section 4062(e) of ERISA with respect to any Title IV Plan has
occurred or is reasonably expected to occur; (iii) there are no pending, or to
the knowledge of any Credit Party, threatened claims (other than claims for
benefits in the normal course), sanctions, actions or lawsuits, asserted or
instituted against any Plan or any Person as fiduciary or sponsor of any Plan;
(iv) no Credit Party or ERISA Affiliate has incurred or reasonably expects to
incur any liability as a result of a complete or partial withdrawal from a
Multiemployer Plan; (v) within the last five years no Title IV Plan with
Unfunded Pension Liabilities has been transferred outside of the "controlled
group" (within the meaning of Section 4001(a)(14) of ERISA) of any Credit Party
or ERISA Affiliate; and (vi) no liability under any Title IV Plan has been
satisfied with the purchase of a contract from an insurance company that is not
rated AAA by the Standard & Poor's Corporation or the equivalent by another
nationally recognized rating agency.
3.13. NO LITIGATION. No action, claim, lawsuit, demand, investigation or
proceeding is now pending or, to the knowledge of any Credit Party, threatened
against any Credit Party, before any Governmental Authority or before any
arbitrator or panel of arbitrators (collectively, "LITIGATION") which challenges
any Credit Party's right or power to enter into or perform any of its
obligations under the Loan Documents to which it is a party, or the validity or
enforceability of any Loan Document or any action taken thereunder, or (b) which
has a reasonable risk of being determined adversely to any Credit Party and
which, if so determined, could have a Material Adverse Effect. Except as set
forth on DISCLOSURE SCHEDULE (3.13), as of the Closing Date there is no
Litigation pending or, to the knowledge of any Credit Party, threatened which
seeks damages in excess of $100,000 or injunctive relief or alleges criminal
misconduct of any Credit Party.
3.14. BROKERS. No broker or finder acting on behalf of any Credit Party
brought about the obtaining, making or closing of the Loans, and no Credit Party
has any obligation to any Person in respect of any finder's or brokerage fees in
connection therewith other than to CBW as set forth in that certain engagement
letter, dated October 31, 2002, from Borrower to CBW.
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3.15. INTELLECTUAL PROPERTY. As of the Closing Date, each Credit Party
owns or has rights to use all Intellectual Property necessary to continue to
conduct its business as now conducted by it or proposed to be conducted by it,
and each Patent, Trademark, Copyright and License is listed, together with
application or registration numbers, as applicable, in DISCLOSURE SCHEDULE
(3.15) hereto. Each Credit Party conducts its business and affairs without any
known infringement of or interference with any Intellectual Property of any
other Person.
3.16. FULL DISCLOSURE. No information contained in this Agreement, any of
the other Loan Documents, any Projections, Financial Statements or Collateral
Reports or other reports from time to time delivered hereunder or any written
statement furnished by or on behalf of any Credit Party to Agent or any Lender
pursuant to the terms of this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading in
light of the circumstances under which they were made. The Liens granted to
Agent, on behalf of itself and Lenders, pursuant to the Collateral Documents
will at all times be fully perfected first priority Liens in and to the
Collateral described therein, subject, as to priority, only to Permitted
Encumbrances with respect to the Collateral other than Accounts.
3.17. ENVIRONMENTAL MATTERS. (a) Except as described in the environmental
reports listed on DISCLOSURE SCHEDULE (3.17) or as otherwise described on such
Disclosure Schedule, as of the Closing Date: (i) the Real Estate is free of
contamination from any Hazardous Material except for such contamination that
would not materially adversely impact the value or marketability of such Real
Estate and which would not result in Environmental Liabilities which could
reasonably be expected to exceed $50,000; (ii) no Credit Party has caused or
suffered to occur any Release of Hazardous Materials on, at, in, under, above,
to, from or about any of its Real Estate; (iii) the Credit Parties are and have
been in compliance with all Environmental Laws, except for such noncompliance
which would not result in Environmental Liabilities which could reasonably be
expected to exceed $50,000; (iv) the Credit Parties have obtained, and are in
compliance with, all Environmental Permits required by Environmental Laws for
the operations of their respective businesses as presently conducted or as
proposed to be conducted, except where the failure to so obtain or comply with
such Environmental Permits would not result in Environmental Liabilities which
could reasonably be expected to exceed $50,000, and all such Environmental
Permits are valid, uncontested and in good standing; (v) no Credit Party is
involved in operations or knows of any facts, circumstances or conditions,
including any Releases of Hazardous Materials, that are likely to result in any
Environmental Liabilities of such Credit Party which could reasonably be
expected to exceed $50,000, and no Credit Party has permitted any current or
former tenant or occupant of the Real Estate to engage in any such operations;
(vi) there is no Litigation arising under or related to any Environmental Laws,
Environmental Permits or Hazardous Material which seeks damages, penalties,
fines, costs or expenses in excess of $50,000 or injunctive relief, or which
alleges criminal misconduct by any Credit Party; (vii) no
27
notice has been received by any Credit Party identifying it as a "potentially
responsible party" or requesting information under CERCLA or analogous state
statutes, and to the knowledge of the Credit Parties, there are no facts,
circumstances or conditions that may result in any Credit Party being identified
as a "potentially responsible party" under CERCLA or analogous state statutes;
and (viii) the Credit Parties have provided to Agent copies of all existing
environmental reports, reviews and audits and all written information pertaining
to actual or potential Environmental Liabilities, in each case relating to any
Credit Party.
(b) Each Credit Party hereby acknowledges and agrees that Agent
(i) is not now, and has not ever been, in control of any of the Real Estate or
any Credit Party's affairs, and (ii) does not have the capacity through the
provisions of the Loan Documents or otherwise to influence any Credit Party's
conduct with respect to the ownership, operation or management of any of its
Real Estate or compliance with Environmental Laws or Environmental Permits.
3.18. INSURANCE. DISCLOSURE SCHEDULE (3.18) lists all insurance policies
of any nature maintained, as of the Closing Date, for current occurrences by
each Credit Party, as well as a summary of the terms of each such policy.
3.19. DEPOSIT AND DISBURSEMENT ACCOUNTS. DISCLOSURE SCHEDULE (3.19) lists
all banks and other financial institutions at which any Credit Party maintains
deposits and/or other accounts as of the Closing Date, including any
Disbursement Accounts, and such Schedule correctly identifies the name, address
and telephone number of each depository, the name in which the account is held,
a description of the purpose of the account, and the complete account number.
Borrower acknowledges and agrees that Annex C hereto is substantially the same
as Borrower's pre-petition cash management system and that such system,
including all accounts established thereto, shall continue to govern the rights
of the respective parties thereto, and shall be applicable under this Agreement.
3.20. GOVERNMENT CONTRACTS. Except as set forth in DISCLOSURE SCHEDULE
(3.20), as of the Closing Date, no Credit Party is a party to any contract or
agreement with any Governmental Authority and no Credit Party's Accounts are
subject to the Federal Assignment of Claims Act, as amended (31 U.S.C. Section
3727) or any similar state or local law.
3.21. CUSTOMER AND TRADE RELATIONS. Except as set forth in Disclosure
Schedule 3.21, as of the Closing Date, there exists no actual or, to the
knowledge of any Credit Party, threatened termination or cancellation of, or any
material adverse modification or change in: the business relationship of any
Credit Party with any customer or group of customers whose purchases during the
preceding twelve (12) months caused them to be ranked among the ten largest
customers of such Credit Party; or the business relationship of any Credit Party
with any supplier or group of suppliers whose supplies during the preceding
twelve (12) months caused them to be ranked among the ten largest suppliers of
such Credit Party.
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3.22. AGREEMENTS AND OTHER DOCUMENTS. As of the Closing Date, each Credit
Party has provided to Agent or its counsel, on behalf of Lenders, accurate and
complete copies (or summaries) of all of the following agreements or documents
to which it is subject and each of which are listed on DISCLOSURE SCHEDULE
(3.22): supply agreements and purchase agreements not terminable by such Credit
Party within sixty (60) days following written notice issued by such Credit
Party and involving transactions in excess of $1,000,000 per annum; any lease of
Equipment having a remaining term of one year or longer and requiring aggregate
rental and other payments in excess of $500,000 per annum; licenses and permits
held by the Credit Parties, the absence of which could be reasonably likely to
have a Material Adverse Effect; instruments or documents evidencing Indebtedness
of such Credit Party and any security interest granted by such Credit Party with
respect thereto; and instruments and agreements evidencing the issuance of any
equity securities, warrants, rights or options to purchase equity securities of
such Credit Party.
3.23. [Intentionally Omitted.]
3.24. [Intentionally Omitted.]
3.25. STATUS OF HOLDINGS; IRB SUBSIDIARY. Holdings and the IRB Subsidiary
have not engaged in any business or incurred any Indebtedness or any other
liabilities (except in connection with its corporate or limited liability
company formation, this Agreement or except as permitted under SECTION 6.19).
3.26. SECURITY AGREEMENTS; INTELLECTUAL PROPERTY SECURITY AGREEMENTS AND
PLEDGE AGREEMENTS. Attached hereto as DISCLOSURE SCHEDULE (3.26) are true,
correct and complete copies of each of the schedules to each of the Security
Agreements, the Intellectual Property Security Agreements and the Pledge
Agreements updated to, and true, correct and complete as of the Closing Date.
3.27. REORGANIZATION MATTERS.
(a) The Chapter 11 Case was commenced on the Petition Date in
accordance with applicable law and proper notice thereof and proper notice of
the hearing for the approval of the Interim Order was given and proper notice
for the hearing for the approval of the Final Order will be given.
(b) After the entry of the Interim Order, and pursuant to and to
the extent permitted in the Interim Order and the Final Order, the Obligations
will constitute allowed administrative expense claims in the Chapter 11 Case
having priority over all administrative expense claims and unsecured claims
against Borrower now existing or hereafter arising, of any kind whatsoever,
including, without limitation, all administrative expense claims of the kind
specified in Sections 105, 326, 330, 331, 503(b), 504(a), 506(c), 507(a),
507(b), 546(c), 726, 1114 or any other provision of the Bankruptcy Code, as
provided under Section 364(c)(1) of the Bankruptcy Code, subject, as to priority
only
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to the Carve-Out Amount and the Senior Claims (PROVIDED, HOWEVER, that the
Carve-Out Expenses up to the Carve-Out Amount has priority over the liens of the
Prior Lenders).
(c) After the entry of the Interim Order and pursuant to and to
the extent provided in the Interim Order and the Final Order, the Obligations
will be secured by a valid and perfected first priority Lien on all of the
Collateral.
(d) The Interim Order (with respect to the period prior to entry
of the Final Order) or the Final Order (with respect to the period on and after
entry of the Final Order), as the case may be, is in full force and effect and
has not been reversed, stayed, modified or amended.
(e) Notwithstanding the provisions of Section 362 of the
Bankruptcy Code, upon the maturity (whether by acceleration or otherwise) of any
of the Obligations, Agent and Lenders shall be entitled to immediate payment of
such Obligations and to enforce the remedies provided for hereunder, without
further application to or order by the Bankruptcy Court.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1. REPORTS AND NOTICES. (a) Each Credit Party executing this Agreement
hereby agrees that from and after the Closing Date and until the Termination
Date, it shall deliver to Agent and/or Lenders, as required, the Financial
Statements, notices, Projections and other information at the times, to the
Persons and in the manner set forth in ANNEX E.
(b) Each Credit Party executing this Agreement hereby agrees that
from and after the Closing Date and until the Termination Date, it shall deliver
to Agent and/or Lenders, as required, the various Collateral Reports (including
Revolving Borrowing Base Certificates in the form of EXHIBIT 4.1(b)(i)) at the
times, to the Persons and in the manner set forth in ANNEX F.
4.2. COMMUNICATION WITH ACCOUNTANTS. Each Credit Party executing this
Agreement authorizes Agent and, so long as a Default or Event of Default shall
have occurred and be continuing, each Lender, to communicate directly with its
independent certified public accountants, including KPMG LLP, and authorizes and
shall instruct those accountants and advisors to disclose and make available to
Agent and each Lender any and all Financial Statements and other supporting
financial documents, schedules and information relating to any Credit Party
(including copies of any issued management letters) with respect to the
business, financial condition and other affairs of any Credit Party.
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5. AFFIRMATIVE COVENANTS
Each Credit Party executing this Credit Agreement jointly and
severally agrees as to all Credit Parties that from and after the date hereof
and until the Termination Date:
5.1. MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS. Except as
occasioned by the Chapter 11 Case, each Credit Party shall: do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate or limited liability existence and its material rights and franchises;
continue to conduct its business substantially as now conducted or as otherwise
permitted hereunder; at all times maintain, preserve and protect all of its
material assets and properties used or useful in the conduct of its business,
and keep the same in good repair, working order and condition in all material
respects (taking into consideration ordinary wear and tear) and from time to
time make, or cause to be made, all necessary or appropriate repairs,
replacements and improvements thereto consistent with industry practices; and
transact business only in such limited liability company and trade names as are
set forth in DISCLOSURE SCHEDULE (5.1).
5.2. PAYMENT OF OBLIGATIONS. (a) Subject to SECTION 5.2(b), each Credit
Party shall pay and discharge or cause to be paid and discharged promptly all
Charges payable by it, including (A) Charges imposed upon it, its income and
profits, or any of its property (real, personal or mixed) and all Charges with
respect to tax, social security and unemployment withholding with respect to its
employees, and (B) lawful claims for labor, materials, supplies and services or
otherwise, provided that claims for any of the items set forth in this
subsection (B) may be paid or discharged after the date due so long as (i) such
claim is paid in the ordinary course of business consistent with past practices,
(ii) no Lien shall be imposed to secure payment of such claim that is superior
to any of the Liens securing the Obligations, (iii) none of the Collateral
becomes subject to forfeiture or loss as a result thereof and (iii) Agent has
not advised Borrower in writing that Agent reasonably believes that nonpayment
or nondischarge thereof could have or result in a Material Adverse Effect;
PROVIDED, Borrower shall not be required to pay any Charges, Taxes or Claims the
nonpayment of which is permitted by the Bankruptcy Code.
(b) Each Credit Party may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges described in SECTION 5.2(a);
provided, that (i) adequate reserves with respect to such contest are maintained
on the books of such Credit Party, in accordance with GAAP, (ii) no Lien shall
be imposed to secure payment of such Charges that is superior to any of the
Liens securing the Obligations and such contest is maintained and prosecuted
continuously and with diligence and operates to suspend collection or
enforcement of such Charges, (iii) none of the Collateral becomes subject to
forfeiture or loss as a result of such contest, (iv) such Credit Party shall
promptly pay or discharge such contested Charges or claims and all additional
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charges, interest, penalties and expenses, if any, and shall deliver to Agent
evidence acceptable to Agent of such compliance, payment or discharge, if such
contest is terminated or discontinued adversely to such Credit Party or the
conditions set forth in this SECTION 5.2(b) are no longer met, and (v) Agent has
not advised Borrower in writing that Agent reasonably believes that nonpayment
or nondischarge thereof could have or result in a Material Adverse Effect.
5.3. BOOKS AND RECORDS. Each Credit Party shall keep adequate books and
records with respect to its business activities in which proper entries,
reflecting all financial transactions, are made in accordance with GAAP.
5.4. INSURANCE; DAMAGE TO OR DESTRUCTION OF COLLATERAL. (a) The Credit
Parties shall, at their sole cost and expense, maintain the policies of
insurance described on DISCLOSURE SCHEDULE (3.18) as in effect on the date
hereof or otherwise in form and amounts and with insurers acceptable to Agent.
If any Credit Party at any time or times hereafter shall fail to obtain or
maintain any of the policies of insurance required above or to pay all premiums
relating thereto, Agent may at any time or times thereafter obtain and maintain
such policies of insurance and pay such premiums and take any other action with
respect thereto which Agent deems advisable. Agent shall have no obligation to
obtain insurance for any Credit Party or pay any premiums therefor. By doing so,
Agent shall not be deemed to have waived any Default or Event of Default arising
from any Credit Party's failure to maintain such insurance or pay any premiums
therefor. All sums so disbursed, including attorneys' fees, court costs and
other charges related thereto, shall be payable on demand by Borrower to Agent
and shall be additional Obligations hereunder secured by the Collateral.
(b) Agent reserves the right at any time upon any change in any
Credit Party's risk profile (including any change in the product mix maintained
by any Credit Party or any laws affecting the potential liability of such Credit
Party) to require additional forms and limits of insurance to, in Agent's
opinion, adequately protect both Agent's and Lender's interests in all or any
portion of the Collateral and to ensure that each Credit Party is protected by
insurance in amounts and with coverage customary for its industry. If Agent
requires any such additional forms or limits of insurance, the applicable Credit
Party shall have thirty (30) days to provide to Agent satisfactory evidence that
it has obtained such additional forms and/or limits. If requested by Agent, each
Credit Party shall deliver to Agent from time to time a report of a reputable
insurance broker, reasonably satisfactory to Agent, with respect to its
insurance policies.
(c) Borrower shall deliver to Agent, in form and substance
satisfactory to Agent, endorsements to (i) all "All Risk" and business
interruption insurance naming Agent, on behalf of itself and Lenders, as loss
payee, and (ii) all general liability and other liability policies naming Agent,
on behalf of itself and Lenders, as additional insured. Borrower irrevocably
makes, constitutes and appoints Agent (and all officers, employees or agents
designated by Agent), as Borrower's true and lawful agent and
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attorney-in-fact for the purpose of making, settling and adjusting claims under
such "All Risk" policies of insurance, endorsing the name of Borrower on any
check or other item of payment for the proceeds of such "All Risk" policies of
insurance and for making all determinations and decisions with respect to such
"All Risk" policies of insurance. Agent shall have no duty to exercise any
rights or powers granted to it pursuant to the foregoing power-of-attorney.
Borrower shall promptly notify Agent of any loss, damage, or destruction to the
Collateral, whether or not covered by insurance. After deducting from such
proceeds the expenses, if any, incurred by Agent in the collection or handling
thereof, Agent may, at its option, apply such proceeds to the reduction of the
Obligations in accordance with SECTION 1.3(d); provided that in the case of
insurance proceeds pertaining to any Credit Party that is not Borrower, such
insurance proceeds shall be applied ratably to all of the Loans owing by
Borrower, or permit or require Borrower to use such money, or any part thereof,
to replace, repair, restore or rebuild the Collateral in a diligent and
expeditious manner with materials and workmanship of substantially the same
quality as existed before the loss, damage or destruction. All insurance
proceeds which are to be made available to Borrower to replace, repair, restore
or rebuild the Collateral shall be applied by Agent to reduce the outstanding
principal balance of the Revolving Loan of Borrower (which application shall not
result in a permanent reduction of the Revolving Loan Commitment) and upon such
application, Agent shall establish a Reserve against the Revolving Borrowing
Base in an amount equal to the amount of such proceeds so applied. All insurance
proceeds made available to any Credit Party that is not a Borrower to replace,
repair, restore or rebuild Collateral shall be deposited in a cash collateral
account. Thereafter, such funds shall be made available to Borrower to provide
funds to replace, repair, restore or rebuild the Collateral as follows: (i)
Borrower shall request a Revolving Credit Advance or a release from the cash
collateral account be made to Borrower in the amount requested to be released;
(ii) so long as the conditions set forth in SECTION 2.2 have been met, Revolving
Lenders shall make such Revolving Credit Advance or Agent shall release funds
from the cash collateral account; and (iii) in the case of insurance proceeds
applied against the Revolving Loan, the Reserve established with respect to such
insurance proceeds shall be reduced by the amount of such Revolving Credit
Advance. To the extent not used to replace, repair, restore or rebuild the
Collateral, such insurance proceeds shall be applied in accordance with SECTION
1.3(d); provided that in the case of insurance proceeds pertaining to any Credit
Party that is not Borrower, such insurance proceeds shall be applied ratably to
all of the Loans owing by Borrower.
5.5. COMPLIANCE WITH LAWS. Each Credit Party shall comply with all
federal, state, local and foreign laws (including, without limitation, the
Xxxx-Xxxxx-Xxxxxx AntiTrust Improvements Act of 1976) and regulations applicable
to it, including those relating to ERISA and labor matters, and Environmental
Laws and Environmental Permits, except to the extent that the failure to comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
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5.6. SUPPLEMENTAL DISCLOSURE. From time to time as may be requested by
Agent (which request will not be made more frequently than once each year absent
the occurrence and continuance of a Default or an Event of Default), the Credit
Parties shall supplement each Disclosure Schedule hereto, or any representation
herein or in any other Loan Document, with respect to any matter hereafter
arising which, if existing or occurring at the date of this Agreement, would
have been required to be set forth or described in such Disclosure Schedule or
as an exception to such representation or which is necessary to correct any
information in such Disclosure Schedule or representation which has been
rendered inaccurate thereby (and, in the case of any supplements to any
Disclosure Schedule, such Disclosure Schedule shall be appropriately marked to
show the changes made therein); provided that (a) no such supplement to any such
Disclosure Schedule or representation shall be or be deemed a waiver of any
Default or Event of Default resulting from the matters disclosed therein, except
as consented to by Agent and Requisite Lenders in writing; and (b) no supplement
shall be required as to representations and warranties that relate solely to the
Closing Date.
5.7. INTELLECTUAL PROPERTY. Each Credit Party will conduct its business
and affairs without any known infringement of or interference with any
Intellectual Property of any other Person in any material respect.
5.8. ENVIRONMENTAL MATTERS. (a) Each Credit Party shall and shall cause
each Person within its control to: (i) conduct its operations and keep and
maintain its Real Estate in compliance with all Environmental Laws and
Environmental Permits other than noncompliance which could not reasonably be
expected to have a Material Adverse Effect; (ii) implement any and all
investigation, remediation, removal and response actions which are appropriate
or necessary to maintain the value and marketability of the Real Estate or to
otherwise comply with Environmental Laws and Environmental Permits pertaining to
the presence, generation, treatment, storage, use, disposal, transportation or
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of its Real Estate; (iii) notify Agent promptly after such Credit Party
becomes aware of any violation of Environmental Laws or Environmental Permits or
any Release on, at, in, under, above, to, from or about any Real Estate which is
reasonably likely to result in Environmental Liabilities in excess of $50,000;
and (iv) promptly forward to Agent a copy of any order, notice, request for
information or any communication or report received by such Credit Party in
connection with any such violation or Release or any other matter relating to
any Environmental Laws or Environmental Permits that could reasonably be
expected to result in Environmental Liabilities in excess of $50,000, in each
case whether or not the Environmental Protection Agency or any Governmental
Authority has taken or threatened any action in connection with any such
violation, Release or other matter. If Agent at any time has a reasonable basis
to believe that there may be a violation of any Environmental Laws or
Environmental Permits by any Credit Party or any Environmental Liability arising
thereunder, or a Release of Hazardous Materials on, at, in, under, above, to,
from or about any of its Real Estate, which, in each case, could reasonably be
expected to have a Material Adverse Effect, then each Credit
34
Party shall, upon Agent's written request (i) cause the performance of such
environmental audits including subsurface sampling of soil and groundwater, and
preparation of such environmental reports, at Borrower's expense, as Agent may
from time to time reasonably request, which shall be conducted by reputable
environmental consulting firms reasonably acceptable to Agent and shall be in
form and substance acceptable to Agent, and (ii) permit Agent or its
representatives to have access to all Real Estate for the purpose of conducting
such environmental audits and testing as Agent deems appropriate, including
subsurface sampling of soil and groundwater. Borrower shall reimburse Agent for
the costs of such audits and tests and the same will constitute a part of the
Obligations secured hereunder.
(b) In addition to, and not in limitation of, the foregoing,
Borrower and Holdings shall take all actions necessary to cause all of the
remedial actions, reporting obligations and related items listed in the
"Recommended Actions" sections of the Environmental Issues Summary set forth on
DISCLOSURE SCHEDULE (5.8) to be completed, in a manner satisfactory to Agent,
within ninety (90) days of the Closing Date.
5.9. LANDLORDS' AGREEMENTS, MORTGAGEE AGREEMENTS AND BAILEE LETTERS. As
reasonably requested by Agent and to the extent not otherwise addressed to
Agent's reasonable satisfaction in the Final Order, each Credit Party shall
obtain a landlord's agreement, mortgagee agreement or bailee letter, as
applicable, from the lessor of each leased property or mortgagee of owned
property or with respect to any warehouse, processor or converter facility or
other location where Collateral is located, which agreement or letter shall
contain a waiver or subordination of all Liens or claims that the landlord,
mortgagee or bailee may assert against the Inventory or Collateral at that
location, and shall otherwise be satisfactory in form and substance to Agent.
After the Closing Date, no real property or warehouse space shall be leased or
acquired by any Credit Party and no Inventory shall be shipped to a processor or
converter under arrangements established after the Closing Date without the
prior written consent of Agent (which consent, in Agent's discretion, may be
conditioned upon the exclusion from the Revolving Borrowing Base of Eligible
Inventory at that location or the establishment of Reserves acceptable to Agent)
or, unless and until a satisfactory landlord or mortgagee agreement or bailee
letter, as appropriate, shall first have been obtained with respect to such
location. Each Credit Party shall timely and fully pay and perform its
obligations under all leases and other agreements with respect to each leased
location or public warehouse where any Collateral is or may be located.
5.10. [Intentionally Omitted.]
5.11. [Intentionally Omitted.]
5.12. [Intentionally Omitted.]
5.13. VEHICLE TITLES. Within ten (10) days following the Closing Date,
Borrower shall have delivered to Agent, in form and substance satisfactory to
Agent,
35
evidence that all vehicles owned by Borrower have been properly titled in
Borrower's name.
5.14. [Intentionally Omitted.]
5.15. CASH MANAGEMENT SYSTEMS. Within fifteen (15) days following the
Closing Date, Borrower shall have executed, and caused to have been executed by
one or more banks, such cash management agreements as are required by Annex C
and Agent including, without limitation, pledge agreements for account nos.
000-000-0, 000-000-0, 000-000-0 and 000-000-0 at Xxxxxx Trust & Savings Bank and
account 2000001779325 at First Union National Bank.
5.16. FURTHER ASSURANCES. Each Credit Party executing this Agreement
agrees that it shall and shall cause each other Credit Party to, at such Credit
Party's expense and upon request of Agent, duly execute and deliver, or cause to
be duly executed and delivered, to Agent such further instruments and do and
cause to be done such further acts as may be necessary or proper in the
reasonable opinion of Agent to carry out more effectively the provisions and
purposes of this Agreement or any other Loan Document.
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally
agrees as to all Credit Parties that, without the prior written consent of Agent
and the Requisite Lenders, from and after the date hereof until the Termination
Date:
6.1. MERGERS, SUBSIDIARIES, ETC. No Credit Party shall directly or
indirectly, by operation of law or otherwise, (a) form or acquire any
Subsidiary, or (b) merge with, consolidate with, acquire all or substantially
all of the assets or capital stock of, or otherwise combine with or acquire, any
Person.
6.2. INVESTMENTS; LOANS AND ADVANCES. Except as otherwise expressly
permitted by this SECTION 6, no Credit Party shall make or permit to exist any
investment in, or make, accrue or permit to exist loans or advances of money to,
any Person, through the direct or indirect lending of money, holding of
securities or otherwise, except that (a) each Credit Party may maintain its
existing investments in its Subsidiaries as of the Closing Date and (b) Borrower
may hold the Holdings Note evidencing the $5,000,000 loan previously made to
Holdings and evidenced thereby.
6.3. INDEBTEDNESS. (a) No Credit Party shall create, incur, assume or
permit to exist any Indebtedness, except (without duplication) (i) Indebtedness
secured by purchase money security interests and Capitalized Leases permitted in
clause (c) of Section 6.7, (ii) the Loans and the other Obligations, (iii)
unfunded pension fund and other employee benefit plan obligations and
liabilities to the extent they are permitted to remain unfunded under applicable
law, (iv) in the case of Holdings, Indebtedness evidenced by the Holdings Note,
(v) existing Indebtedness described in DISCLOSURE SCHEDULE (6.3) and
36
refinancings thereof or amendments or modifications thereto which do not have
the effect of increasing the principal amount thereof or changing the
amortization thereof (other than to extend the same) and which are otherwise on
terms and conditions no less favorable to any Credit Party, Agent or any Lender,
as reasonably determined by Agent, than the terms of the Indebtedness being
refinanced, amended or modified, and (vi) the Existing Vendor Notes.
(b) No Credit Party shall, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any, interest
or other amount payable in respect of any Indebtedness, other than (i) the
Obligations, and (ii) Indebtedness secured by a Permitted Encumbrance if the
asset securing such Indebtedness has been sold or otherwise disposed of in
accordance with SECTIONS 6.8(b), (c) or (d).
6.4. EMPLOYEE LOANS AND AFFILIATE TRANSACTIONS. (a) Except as otherwise
expressly permitted in this Section 6 with respect to Affiliates, no Credit
Party shall enter into or be a party to any transaction with any other Credit
Party or any Affiliate thereof except in the ordinary course of and pursuant to
the reasonable requirements of such Credit Party's business and upon fair and
reasonable terms that are no less favorable to such Credit Party than would be
obtained in a comparable arm's length transaction with a Person not an Affiliate
of such Credit Party; PROVIDED, that the Credit Parties shall be permitted to
enter into the transactions relating to the Lebanon IRBs, the IRB Assignment
Documents, the IRB Indenture and the IRB Lease Agreement. All such transactions
existing as of the date hereof are described on DISCLOSURE SCHEDULE (6.4(a)).
(b) No Credit Party shall enter into any lending or borrowing
transaction with any employees of any Credit Party.
6.5. CAPITAL STRUCTURE AND BUSINESS. No Credit Party shall (a) make any
changes in any of its business objectives, purposes or operations which could
reasonably be expected to adversely affect the repayment of the Loans or any of
the other Obligations or could reasonably be expected to have or result in a
Material Adverse Effect, (b) make any change in its capital structure as
described on DISCLOSURE SCHEDULE (3.8), including the issuance of any shares of
Stock (other than the issuance of Stock in connection with the exercise of the
Borrower Warrant), warrants (other than the Borrower Warrant) or other
securities convertible into Stock or any revision of the terms of its
outstanding Stock (other than the issuance of Stock upon exercise of the
Borrower Warrant), or (c) amend its charter or bylaws, membership agreements,
operating agreements (other than the amended and restated operating agreement of
Borrower executed as of the Closing Date) or other constituent documents. No
Credit Party shall engage in any business other than the businesses currently
engaged in by it.
6.6. GUARANTEED INDEBTEDNESS. No Credit Party shall create, incur,
assume or permit to exist any Guaranteed Indebtedness except (a) by endorsement
of instruments or items of payment for deposit to the general account of any
Credit Party, and (b) for
37
Guaranteed Indebtedness incurred for the benefit of any other Credit Party if
the primary obligation is expressly permitted by this Agreement.
6.7. LIENS. No Credit Party shall create, incur, assume or permit to
exist any Lien on or with respect to its Accounts or any of its other properties
or assets (whether now owned or hereafter acquired) except for (a) Permitted
Encumbrances and(b) Liens in existence on the date hereof and summarized on
DISCLOSURE SCHEDULE (6.7). In addition, no Credit Party shall become a party to
any agreement, note, indenture or instrument, or take any other action, which
would prohibit the creation of a Lien on any of its properties or other assets
in favor of Agent, on behalf of itself and Lenders, as additional collateral for
the Obligations, except operating leases, Capital Leases (including the IRB
Lease Agreement), the IRB Indenture, or Licenses which prohibit Liens upon the
assets that are subject thereto. The prohibition provided for in this SECTION
6.7 specifically includes, without limitation, any effort by Borrower, any
Committee, or any other party-in-interest in the Chapter 11 Case to prime or
create pari passu to any claims or interest of Lenders any Lien (other than for
the Carve-Out Expenses up to the Carve-Out Amount and the Senior Claims)
irrespective of whether such claims or interests may be "ADEQUATELY PROTECTED".
6.8. SALE OF STOCK AND ASSETS. No Credit Party shall sell, transfer,
convey, assign or otherwise dispose of any of its properties or other assets,
including the capital Stock of any of its Subsidiaries (whether in a public or a
private offering or otherwise) or any of their Accounts without the prior,
written consent of Agent. Agent agrees on reasonable prior written notice to
release its Lien on such assets or other properties in order to permit the
applicable Credit Party to effect such disposition and shall execute and deliver
to Borrower, at Borrower's expense, appropriate UCC-3 termination statements and
other releases as reasonably requested by Borrower.
6.9. ERISA. No Credit Party shall, or shall cause or permit any ERISA
Affiliate to, cause or permit to occur an event which could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or cause or permit to occur an ERISA Event to the extent such ERISA Event
could reasonably be expected to have a Material Adverse Effect.
6.10. FINANCIAL COVENANTS. Borrower shall not breach or fail to comply
with any of the Financial Covenants (the "FINANCIAL COVENANTS") set forth in
ANNEX G.
6.11. HAZARDOUS MATERIALS. No Credit Party shall cause or permit a
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of the Real Estate where such Release would (a) violate in any respect, or
form the basis for any Environmental Liabilities under, any Environmental Laws
or Environmental Permits or (b) otherwise adversely impact the value or
marketability of any of the Real Estate or any of the Collateral, other than
such violations or Environmental Liabilities which could not reasonably be
expected to have a Material Adverse Effect.
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6.12. SALE-LEASEBACKS. No Credit Party shall engage in any
sale-leaseback, synthetic lease or similar transaction involving any of its
assets.
6.13. CANCELLATION OF INDEBTEDNESS. No Credit Party shall cancel any
claim or debt owing to it, except for reasonable consideration negotiated on an
arm's-length basis and in the ordinary course of its business consistent with
past practices.
6.14. RESTRICTED PAYMENTS. No Credit Party shall make any Restricted
Payments.
6.15. CHANGE OF CORPORATE OR LIMITED LIABILITY COMPANY NAME OR LOCATION;
CHANGE OF FISCAL YEAR. No Credit Party shall (a) change its name as it appears
in official filings in the state of incorporation or other organization, (b)
change its corporate or limited liability company name, (c) change its chief
executive office, principal place of business, corporate or limited liability
company offices or warehouses or locations at which Collateral is held or
stored, or the location of its records concerning the Collateral, (d) change the
type of entity that it is, (e) change its organization identification number, if
any, issued by its state of incorporation or other organization or (f) change
its state of incorporation or organization in any case without at least thirty
(30) days prior written notice to Agent and after Agent's written acknowledgment
that any reasonable action requested by Agent in connection therewith, including
to continue the perfection of any Liens in favor of Agent, on behalf of Lenders,
in any Collateral, has been completed or taken, and PROVIDED that any such new
location shall be in the continental United States. Without limiting the
foregoing, no Credit Party shall change its name, identity or corporate or
limited liability company structure in any manner which might make any financing
or continuation statement filed in connection herewith seriously misleading
within the meaning of Section 9-402(7) of the Code or any other then applicable
provision of the Code except upon prior written notice to Agent and Lenders and
after Agent's written acknowledgment that any reasonable action requested by
Agent in connection therewith, including to continue the perfection of any Liens
in favor of Agent, on behalf of Lenders, in any Collateral, has been completed
or taken. No Credit Party shall change its Fiscal Year.
6.16. NO IMPAIRMENT OF INTERCOMPANY TRANSFERS. No Credit Party shall
directly or indirectly enter into or become bound by any agreement, instrument,
indenture or other obligation (other than this Agreement and the other Loan
Documents) which could directly or indirectly restrict, prohibit or require the
consent of any Person with respect to the payment of dividends or distributions
or the making or repayment of intercompany loans by a Subsidiary of Borrower to
Borrower.
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6.17. NO SPECULATIVE TRANSACTIONS. No Credit Party shall engage in any
transaction involving commodity options, futures contracts or similar
transactions, except solely to hedge against fluctuations in the prices of
commodities owned or purchased by it and the values of foreign currencies
receivable or payable by it and interest swaps, caps or collars.
6.18. LEASES. No Credit Party shall enter into any operating lease for
Equipment or Real Estate on or after the date hereof without the prior, written
consent of Agent.
6.19. CREDIT PARTIES OTHER THAN BORROWER. None of the Credit Parties
other than Borrower shall engage in any trade or business, or own any assets
(other than Stock of their Subsidiaries) or incur any Indebtedness or Guaranteed
Indebtedness (other than the Obligations and the Holdings Note); PROVIDED that
the IRB Subsidiary shall be the holder of the Lebanon IRBs.
6.20. MODIFICATIONS OF CERTAIN DOCUMENTS. No Credit Party shall amend or
change (or permit or consent to any amendment or change of) the terms of the
Xxxxxxx Acquisition Agreement, Worthington Acquisition Agreement, the Tax
Sharing Agreement or any documentation relating to the Lebanon IRBs, including,
without limitation, the IRB Indenture or the IRB Lease Agreement.
6.21. WORTHINGTON LITIGATION; WORTHINGTON ACQUISITION AGREEMENT. Without
the express written consent of Agent, no Credit Party shall (i) settle,
withdraw, compromise, or make any payments (in cash or any other form of
consideration) in connection with the Worthington Litigation or (ii) make any
payments (in cash or any other form of consideration) (including the Contingent
Payment (as such term is defined in the Worthington Acquisition Agreement) or
the purchase price adjustment payment contemplated by Section 2.2 of the
Worthington Acquisition Agreement) contemplated or required by the Worthington
Acquisition Agreement. No Credit Party will permit (i) the payment of any
dividends upon the Preferred Stock (as such term is defined in the Worthington
Acquisition Agreement) or (ii) any party (including without limitation MIG) to
amend, cancel or otherwise modify the terms of the Preferred Stock. The Credit
Parties will promptly deliver to Agent copies of pleadings or filings and all
non-privileged case summaries and memorandum, received, filed, sent or otherwise
relating to each of the Worthington Litigation, the Worthington Acquisition
Agreement and the Preferred Stock.
6.22. REPAYMENT OF INDEBTEDNESS. Except pursuant to a confirmed
reorganization plan and except as specifically permitted hereunder, Borrower
shall not, without the express prior written consent of Lenders or pursuant to
an order of the Bankruptcy Court after notice and hearing, make any payment or
transfer with respect to any Lien or Indebtedness incurred or arising prior to
the filing of the Chapter 11 Case that is subject to the automatic stay
provisions of the Bankruptcy Code whether by way of "adequate protection" under
the Bankruptcy Code or otherwise.
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6.23. RECLAMATION CLAIMS. No Credit Party shall enter into any agreement
to return any of its Inventory to any of its creditors for application against
any Prepetition Indebtedness, Prepetition trade payables or other Prepetition
claims under Section 546(g) of the Bankruptcy Code or allow any creditor to take
any setoff or recoupment against any of its Prepetition Indebtedness,
Prepetition trade payables or other Prepetition claims based upon any such
return pursuant to Section 553(b)(1) of the Bankruptcy Code or otherwise.
6.24. CHAPTER 11 CLAIMS. No Credit Party shall incur, create, assume,
suffer to exist or permit any other superpriority administrative claim which is
pari passu with or senior to the claims of Agent and Lenders against Borrower,
except as set forth in SECTION 1.18(b).
7. TERM
7.1. TERMINATION. The financing arrangements contemplated hereby shall
be in effect until the Commitment Termination Date, and the Loans and all other
Obligations shall be automatically due and payable in full on such date.
7.2. SURVIVAL OF OBLIGATIONS UPON TERMINATION OF FINANCING ARRANGEMENTS.
Except as otherwise expressly provided for in the Loan Documents, no termination
or cancellation (regardless of cause or procedure) of any financing arrangement
under this Agreement shall in any way affect or impair the obligations, duties
and liabilities of the Credit Parties or the rights of Agent and Lenders
relating to any unpaid portion of the Loans or any other Obligations, due or not
due, liquidated, contingent or unliquidated or any transaction or event
occurring prior to such termination, or any transaction or event, the
performance of which is required after the Commitment Termination Date. Except
as otherwise expressly provided herein or in any other Loan Document, all
undertakings, agreements, covenants, warranties and representations of or
binding upon the Credit Parties, and all rights of Agent and each Lender, all as
contained in the Loan Documents, shall not terminate or expire, but rather shall
survive any such termination or cancellation and shall continue in full force
and effect until the Termination Date; provided however, that in all events the
provisions of SECTION 11, the payment obligations under SECTIONS 1.15 and 1.16,
and the indemnities contained in the Loan Documents shall survive the
Termination Date.
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES
8.1. EVENTS OF DEFAULT. Notwithstanding the provisions of Section 362 of
the Bankruptcy Code and without application or motion to the Bankruptcy Court or
any notice to any Credit Party or any party-in-interest in the Chapter 11 Case,
and subject to SECTION 8.2(b), the occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute an "EVENT
OF DEFAULT" hereunder:
41
(a) Borrower (i) fails to make any payment of principal of, or
interest on, or Fees owing in respect of, the Loans or any of the other
Obligations when due and payable, or (ii) fails to pay or reimburse Agent or
Lenders for any expense reimbursable hereunder or under any other Loan Document
within ten (10) days following Agent's demand for such reimbursement or payment
of expenses.
(b) Any Credit Party shall fail or neglect to perform, keep or
observe any of the provisions of SECTIONS 1.4, 1.8, 5.4, 5.8(b), 5.12, 5.15 or
6, or any of the provisions set forth in ANNEXES C or G, respectively.
(c) Borrower shall fail or neglect to perform, keep or observe any
of the provisions of SECTION 4 or any provisions set forth in Annexes E or F,
respectively, and the same shall remain unremedied for five (5) days or more
after such Credit Party is aware or should have been aware of such failure or
negligence.
(d) Any Credit Party shall fail or neglect to perform, keep or
observe any other provision of this Agreement or of any of the other Loan
Documents (other than any provision embodied in or covered by any other clause
of this SECTION 8.1) and the same shall remain unremedied for thirty (30) days
or more after such Credit Party is aware or should have been aware of such
failure or negligence.
(e) Except for defaults occasioned by the filing of the Chapter 11
Case and defaults resulting from obligations with respect to which the
Bankruptcy Code prohibits any Credit Party from complying or permits any Credit
Party not to comply, a default or breach occurs under any other agreement,
document or instrument entered into either (x) Prepetition and which is affirmed
after the Petition Date or (y) Postpetition, to which any Credit Party is a
party which is not cured within any applicable grace period, and such default or
breach (i) involves the failure to make any payment when due in respect of any
Indebtedness (other than the Obligations) of any Credit Party in excess of
$50,000 in the aggregate, or (ii) causes, or permits any holder of such
Indebtedness or a trustee to cause, Indebtedness or a portion thereof in excess
of $50,000 in the aggregate to become due prior to its stated maturity or prior
to its regularly scheduled dates of payment, regardless of whether such default
is waived, or such right is exercised, by such holder or trustee.
(f) Any information contained in any Revolving Borrowing Base
Certificate is untrue or incorrect in any respect, or any representation or
warranty herein or in any Loan Document or in any written statement, report,
financial statement or certificate other than a Revolving Borrowing Base
Certificate (but including the Cash Flow Budget) made or delivered to Agent or
any Lender by any Credit Party is untrue or incorrect in any material respect as
of the date when made or deemed made.
(g) Assets of any Credit Party of any amount or more shall be
attached, seized, levied upon or subjected to a writ or distress warrant, or
come within the
42
possession of any receiver, trustee, custodian or assignee for the benefit of
creditors of any Credit Party and such condition continues for forty-five (45)
days or more.
(h) [Intentionally Omitted.]
(i) [Intentionally Omitted.]
(j) A final judgment or judgments for the payment of money in
excess of $25,000 in the aggregate at any time outstanding and which is not
subject to the automatic stay provisions of the Bankruptcy Code shall be
rendered against any Credit Party and the same shall not, within thirty (30)
days after the entry thereof, have been discharged or execution thereof stayed
or bonded pending appeal, or shall not have been discharged prior to the
expiration of any such stay.
(k) Any material provision of any Loan Document shall for any
reason cease to be valid, binding and enforceable in accordance with its terms
(or any Credit Party shall challenge the enforceability of any Loan Document or
shall assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or
otherwise is not valid, binding and enforceable in accordance with its terms),
or any security interest created under any Loan Document shall cease to be a
valid and perfected first priority security interest or Lien (except as
otherwise permitted herein or therein) in any of the Collateral purported to be
covered thereby.
(l) Any Change of Control shall occur.
(m) Any event shall occur as a result of which revenue-producing
activities cease or are substantially curtailed at any facility of Borrower
generating more than 15% of Borrower's consolidated revenues for the Fiscal Year
preceding such event and such cessation or curtailment continues for more than
twenty (20) days.
(n) Any Person seeks relief from the automatic stay provisions of
the Bankruptcy Code to pursue such Person's rights or remedies with respect to
the Lebanon IRBs or any documentation related thereto, including the IRB
Indenture.
(o) Any Person other than the IRB Subsidiary (or its trustee
pursuant to the terms of the IRB Indenture) or Agent, on behalf of Lenders,
shall hold the Lebanon IRBs or have any rights related thereto.
(p) [Intentionally Omitted.]
(q) [Intentionally Omitted.]
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(r) Borrower's expenses and expenditures exceed the amounts set
forth in any Cash Flow Budget, subject to the terms and conditions of subsection
(f) of Annex G hereto.
(s) The occurrence of any of the following in the Chapter 11 Case:
(i) the bringing of a motion, taking of any action or
the filing of any plan of reorganization or disclosure statement attendant
thereto by Borrower in the Chapter 11 Case: (w) to obtain additional financing
under Section 364(c) or (d) of the Bankruptcy Code not otherwise permitted
pursuant to this Agreement; (x) to grant any Lien other than Permitted
Encumbrances upon or affecting any Collateral; (y) except as provided in the
Interim or Final Order, as the case may be, to use cash collateral of Agent
under Section 363(c) of the Bankruptcy Code without the prior written consent of
Agent and the Lenders; or (z) any other action or actions adverse to Agent and
the Lenders or their rights and remedies hereunder or their interest in the
Collateral;
(ii) the filing of any plan of reorganization or
disclosure statement attendant thereto by Borrower or any other Person to which
the Lenders do not consent or otherwise agree to the treatment of their claims;
(iii) the entry of an order confirming a plan of
reorganization that does not require repayment in full of all of the Obligations
under this Agreement;
(iv) the entry of an order amending, supplementing,
staying, vacating or otherwise modifying the Loan Documents or the Interim Order
or the Final Order without the written consent of all of the Lenders;
(v) the Final Order is not entered immediately following
the expiration of the Interim Order;
(vi) the payment of, or application for authority to pay,
any pre-petition claim without the Lenders' prior written consent or pursuant to
an order of the Bankruptcy Court after notice and hearing;
(vii) the allowance of any claim or claims under Section
506(c) of the Bankruptcy Code against or with respect to any of the Collateral;
(viii) the appointment of an interim or permanent trustee
in the Chapter 11 Case or the appointment of a receiver or an examiner in the
Chapter 11 Case with expanded powers to operate or manage the financial affairs,
the business, or reorganization of Borrower; or the sale without Agent and
Lenders' consent, of all or substantially all of Borrower's assets either
through a sale under Section 363 of the Bankruptcy Code, through a confirmed
plan or reorganization in the Chapter 11 Case, or otherwise that does not
provide for payment in full of the Obligations and termination of Lenders'
commitment to make Loans;
44
(ix) the dismissal of the Chapter 11 Case, or the
conversion of the Chapter 11 Case from one under Chapter 11 to one under Chapter
7 of the Bankruptcy Code or any Credit Party shall file a motion or other
pleading seeking the dismissal of the Chapter 11 Case under Section 1112 of the
Bankruptcy Code or otherwise;
(x) the entry of an order by the Court granting relief
from or modifying the automatic stay of Section 362 of the Bankruptcy Code (x)
to allow any creditor to execute upon or enforce a Lien on any Collateral, or
(y) with respect to any Lien of or the granting of any Lien on any Collateral to
any State or local environmental or regulatory agency or authority, which in
either case would have a Material Adverse Effect;
(xi) the commencement of a suit or action against Agent
or any Lender and, as to any suit or action brought by any Person other than a
Credit Party or a Subsidiary, officer or employee of a Credit Party, the
continuation thereof without dismissal for thirty (30) days after service
thereof on Agent or such Lender, that asserts by or on behalf of Borrower, the
Environmental Protection Agency, any state environmental protection or health
and safety agency, or any official committee in the Chapter 11 Case, any claim
or legal or equitable remedy which seeks subordination of the claim or Lien of
Agent or the Lenders;
(xii) the entry of an order in the Chapter 11 Case
avoiding or requiring repayment of any portion of the payments made on account
of the Obligations owing under this Agreement; or
(xiii) the failure of Borrower to perform any of its
obligations under the Interim Order or the Final Order.
8.2. REMEDIES. (a) If any Event of Default shall have occurred and be
continuing or if a Default shall have occurred and be continuing and Agent or
Requisite Revolving Lenders shall have determined not to make any Advances or
incur any Letter of Credit Obligations so long as that specific Default is
continuing, Agent may (and at the written request of the Requisite Revolving
Lenders shall), without notice, suspend the Revolving Loan facility with respect
to further Advances and/or the incurrence of further Letter of Credit
Obligations whereupon any further Advances and Letter of Credit Obligations
shall be made or extended in Agent's sole discretion (or in the sole discretion
of the Requisite Revolving Lenders, if such suspension occurred at their
direction) so long as such Default or Event of Default is continuing. If any
Default or Event of Default shall have occurred and be continuing, Agent may
(and at the written request of Requisite Lenders shall), without notice except
as otherwise expressly provided herein, increase the rate of interest applicable
to the Loans and the Letter of Credit Fees to the Default Rate.
(b) If any Event of Default shall have occurred and be continuing,
Agent may (and at the written request of the Requisite Lenders shall), without
notice, (i)
45
terminate the Revolving Loan facility with respect to further Advances or the
incurrence of further Letter of Credit Obligations; (ii) declare all or any
portion of the Obligations, including all or any portion of any Loan to be
forthwith due and payable, and require that the Letter of Credit Obligations be
cash collateralized as provided in ANNEX B, all without presentment, demand,
protest or further notice of any kind, all of which are expressly waived by
Borrower and each other Credit Party; and (iii) exercise any rights and remedies
provided to Agent under the Loan Documents and/or at law or equity, including
all remedies provided under the Code; and pursuant to the Interim Order and the
Final Order, the automatic stay of Section 362 of the Bankruptcy Code shall be
modified and vacated to permit Lenders to exercise their remedies under this
Agreement and the Loan Documents, without further application or motion to, or
order from, the Bankruptcy Court, PROVIDED, HOWEVER, notwithstanding anything to
the contrary contained herein, Agent shall be permitted to exercise any remedy
in the nature of a liquidation of, or foreclosure on, any interest of Borrower
in the Collateral only upon three (3) days' prior written notice to Borrower and
counsel approved by the Bankruptcy Court for the Committee. Upon the occurrence
of an Event of Default and the exercise by Lenders of their rights and remedies
under this Agreement and the other Loan Documents, Borrower shall assist Lenders
in effecting a sale or other disposition of the Collateral upon such terms as
are designed to maximize the proceeds obtainable from such sale or other
disposition.
8.3. WAIVERS BY CREDIT PARTIES. Except as otherwise provided for in this
Agreement or by applicable law, each Credit Party waives: (a) presentment,
demand and protest and notice of presentment, dishonor, notice of intent to
accelerate, notice of acceleration, protest, default, nonpayment, maturity,
release, compromise, settlement, extension or renewal of any or all commercial
paper, accounts, contract rights, documents, instruments, chattel paper and
guaranties at any time held by Agent on which any Credit Party may in any way be
liable, and hereby ratifies and confirms whatever Agent may do in this regard,
(b) all rights to notice and a hearing prior to Agent's taking possession or
control of, or to Agent's replevy, attachment or levy upon, the Collateral or
any bond or security which might be required by any court prior to allowing
Agent to exercise any of its remedies, and (c) the benefit of all valuation,
appraisal, marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1. ASSIGNMENT AND PARTICIPATIONS. (a) The Credit Parties signatory
hereto consent to any Lender's assignment of, and/or sale of participations in,
at any time or times, the Loan Documents, Loans, Letter of Credit Obligations
and any Commitment or of any portion thereof or interest therein, including any
Lender's rights, title, interests, remedies, powers or duties thereunder,
whether evidenced by a writing or not. Any assignment by a Lender shall (i)
require the consent of Agent and (so long as no Default or Event of Default has
occurred and is continuing) Borrower (which shall not be unreasonably withheld
or delayed) and the execution of an
assignment agreement (an
46
"
ASSIGNMENT AGREEMENT") substantially in the from attached hereto as EXHIBIT
9.1(a) and otherwise in form and substance satisfactory to, and acknowledged by,
Agent; (ii) be conditioned on such assignee Lender representing to the assigning
Lender and Agent that it is purchasing the applicable Loans to be assigned to it
for its own account, for investment purposes and not with a view to the
distribution thereof; (iii) if a partial assignment, be in an amount at least
equal to $1,000,000 and, after giving effect to any such partial assignment, the
assigning Lender shall have retained Commitments in an amount at least equal to
$1,000,000; and (iv) include a payment to Agent of an assignment fee of $3,500.
In the case of an assignment by a Lender under this Section 9.1, the assignee
shall have, to the extent of such assignment, the same rights, benefits and
obligations as it would if it were a Lender hereunder. The assigning Lender
shall be relieved of its obligations hereunder with respect to its Commitments
or assigned portion thereof from and after the date of such assignment. Borrower
hereby acknowledges and agrees that any assignment will give rise to a direct
obligation of Borrower to the assignee and that the assignee shall be considered
to be a "Lender". In all instances, each Lender's liability to make Loans
hereunder shall be several and not joint and shall be limited to such Lender's
Pro Rata Share of the applicable Commitment. In the event Agent or any Lender
assigns or otherwise transfers all or any part of the Obligations, Agent or any
such Lender shall so notify Borrower and Borrower shall, upon the request of
Agent or such Lender, execute new Notes in exchange for the Notes, if any, being
assigned. Notwithstanding the foregoing provisions of this SECTION 9.1(a), any
Lender may at any time pledge the Obligations held by it and such Lender's
rights under this Agreement and the other Loan Documents to a Federal Reserve
Bank, and any Lender that is an investment fund may assign the Obligations held
by it and such Lender's rights under this Agreement and the other Loan Documents
to another investment fund managed by the same investment advisor; PROVIDED,
HOWEVER, that no such pledge to a Federal Reserve Bank shall release such Lender
from such Lender's obligations hereunder or under any other Loan Document.
(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable by
Borrower hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral
Documents or the other Loan Documents). Solely for purposes of SECTIONS 1.13,
1.15, 1.16 and 9.8, Borrower acknowledges and agrees that a participation shall
give rise to a direct obligation of Borrower to the participant and the
participant shall be considered to be a "Lender". Except as set forth in the
preceding sentence neither Borrower nor any Credit Party shall have any
obligation or duty to any participant. Neither Agent nor any Lender
47
(other than the Lender selling a participation) shall have any duty to any
participant and may continue to deal solely with the Lender selling a
participation as if no such sale had occurred.
(c) Except as expressly provided in this SECTION 9.1, no Lender
shall, as between Borrower and that Lender, or Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Loans, the Notes or other Obligations owed to such Lender.
(d) Each Credit Party executing this Agreement shall assist any
Lender permitted to sell assignments or participations under this SECTION 9.1 as
reasonably required to enable the assigning or selling Lender to effect any such
assignment or participation, including the execution and delivery of any and all
agreements, notes and other documents and instruments as shall be requested and,
if requested by Agent in connection with the primary syndication of the
Commitments and/or the Loans, the preparation of informational materials for,
and the participation of management in meetings with, potential assignees or
participants. Each Credit Party executing this Agreement shall certify the
correctness, completeness and accuracy of all descriptions of the Credit Parties
and their affairs contained in any selling materials provided by them and all
other information provided by them and included in such materials, except that
any Projections delivered by Borrower shall only be certified by Borrower as
having been prepared by Borrower in compliance with the representations
contained in SECTION 3.4(c).
(e) A Lender may furnish any information concerning Credit Parties
in the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants). Each Lender shall obtain
from assignees or participants confidentiality covenants substantially
equivalent to those contained in SECTION 11.8.
(f) So long as no Event of Default shall have occurred and be
continuing, no Lender shall assign or sell participations in any portion of its
Loans or Commitments to a potential Lender or participant, if, as of the date of
the proposed assignment or sale, the assignee Lender or participant would be
subject to capital adequacy or similar requirements under SECTION 1.16(a),
increased costs under SECTION 1.16(b), or withholding taxes in accordance with
SECTION 1.15(c).
9.2. APPOINTMENT OF AGENT. GE Capital is hereby appointed to act on
behalf of all Lenders as Agent under this Agreement and the other Loan
Documents. The provisions of this SECTION 9.2 are solely for the benefit of
Agent and Lenders and no Credit Party nor any other Person shall have any rights
as a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement and the other Loan Documents, Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for any Credit Party or any other Person. Agent shall have no
48
duties or responsibilities except for those expressly set forth in this
Agreement and the other Loan Documents. The duties of Agent shall be mechanical
and administrative in nature and Agent shall not have, or be deemed to have, by
reason of this Agreement, any other Loan Document or otherwise a fiduciary
relationship in respect of any Lender. Neither Agent nor any of its Affiliates
nor any of their respective officers, directors, employees, agents or
representatives shall be liable to any Lender for any action taken or omitted to
be taken by it hereunder or under any other Loan Document, or in connection
herewith or therewith, except for damages caused by its or their own gross
negligence or willful misconduct.
If Agent shall request instructions from Requisite Lenders,
Requisite Revolving Lenders, or all affected Lenders with respect to any act or
action (including failure to act) in connection with this Agreement or any other
Loan Document, then Agent shall be entitled to refrain from such act or taking
such action unless and until Agent shall have received instructions from
Requisite Lenders, Requisite Revolving Lenders, or all affected Lenders, as the
case may be, and Agent shall not incur liability to any Person by reason of so
refraining. Agent shall be fully justified in failing or refusing to take any
action hereunder or under any other Loan Document (a) if such action would, in
the opinion of Agent, be contrary to law or the terms of this Agreement or any
other Loan Document, (b) if such action would, in the opinion of Agent, expose
Agent to Environmental Liabilities or (c) if Agent shall not first be
indemnified to its satisfaction against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
hereunder or under any other Loan Document in accordance with the instructions
of Requisite Lenders, Requisite Revolving Lenders, or all affected Lenders, as
applicable.
9.3. AGENT'S RELIANCE, ETC. Neither Agent nor any of its Affiliates nor
any of their respective directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them under or in connection
with this Agreement or the other Loan Documents, except for damages caused by
its or their own gross negligence or willful misconduct. Without limitation of
the generality of the foregoing, Agent: (a) may treat the payee of any Note as
the holder thereof until Agent receives written notice of the assignment or
transfer thereof signed by such payee and in form satisfactory to Agent; (b) may
consult with legal counsel, independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations made in or in connection with this Agreement or the other Loan
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of any Credit Party or to
inspect the Collateral (including the books and records) of any
49
Credit Party; (e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; and (f) shall incur no liability under or
in respect of this Agreement or the other Loan Documents by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telecopy, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
9.4. GE CAPITAL AND AFFILIATES. With respect to its Commitments
hereunder, GE Capital shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise the same as
though it were not Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include GE Capital in its individual capacity. GE
Capital and its Affiliates may lend money to, invest in, and generally engage in
any kind of business with, any Credit Party, any of their Affiliates and any
Person who may do business with or own securities of any Credit Party or any
such Affiliate, all as if GE Capital were not Agent and without any duty to
account therefor to Lenders. GE Capital and its Affiliates may accept fees and
other consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders. Each
Lender acknowledges the potential conflict of interest between GE Capital as a
Lender holding disproportionate interests in the Loans and GE Capital as Agent.
9.5. LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the Financial Statements referred to in SECTION 3.4(a) and such other documents
and information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests in the Loans, and expressly
consents to, and waives any claim based upon, such conflict of interest.
9.6. INDEMNIFICATION. Lenders agree to indemnify Agent (to the extent
not reimbursed by Credit Parties and without limiting the obligations of Credit
Parties hereunder), ratably according to their respective Pro Rata Shares, 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
Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by Agent in connection therewith;
PROVIDED, HOWEVER, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Agent's gross negligence or
willful
50
misconduct. Without limiting the foregoing, each Lender agrees to reimburse
Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including counsel fees) incurred by Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement and each
other Loan Document, to the extent that Agent is not reimbursed for such
expenses by Credit Parties.
9.7. SUCCESSOR AGENT. Agent may resign at any time by giving not less
than thirty (30) days' prior written notice thereof to Lenders and Borrower.
Upon any such resignation, the Requisite Lenders shall have the right to appoint
a successor Agent. If no successor Agent shall have been so appointed by the
Requisite Lenders and shall have accepted such appointment within 30 days after
the resigning Agent's giving notice of resignation, then the resigning Agent
may, on behalf of Lenders, appoint a successor Agent, which shall be a Lender,
if a Lender is willing to accept such appointment, or otherwise shall be a
commercial bank or financial institution or a subsidiary of a commercial bank or
financial institution if such commercial bank or financial institution is
organized under the laws of the United States of America or of any State thereof
and has a combined capital and surplus of at least $300,000,000. If no successor
Agent has been appointed pursuant to the foregoing, by the 30th day after the
date such notice of resignation was given by the resigning Agent, such
resignation shall become effective and the Requisite Lenders shall thereafter
perform all the duties of Agent hereunder until such time, if any, as the
Requisite Lenders appoint a successor Agent as provided above. Any successor
Agent appointed by Requisite Lenders hereunder shall be subject to the approval
of Borrower, such approval not to be unreasonably withheld or delayed; PROVIDED
that such approval shall not be required if a Default or an Event of Default
shall have occurred and be continuing. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall succeed to and
become vested with all the rights, powers, privileges and duties of the
resigning Agent. Upon the earlier of the acceptance of any appointment as Agent
hereunder by a successor Agent or the effective date of the resigning Agent's
resignation, the resigning Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents, except that any
indemnity rights or other rights in favor of such resigning Agent shall
continue. After any resigning Agent's resignation hereunder, the provisions of
this SECTION 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement and the other Loan
Documents.
9.8. SETOFF AND SHARING OF PAYMENTS. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
each Lender and each holder of any Note is hereby authorized at any time or from
time to time, without notice to any Credit Party or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and to
apply any and all balances held by it at any of its offices for the account of
Borrower or any Guarantor (regardless of whether such
51
balances are then due to Borrower or any Guarantor) and any other properties or
assets any time held or owing by that Lender or that holder to or for the credit
or for the account of Borrower or any Guarantor against and on account of any of
the Obligations which are not paid when due. Any Lender or holder of any Note
exercising a right to set off or otherwise receiving any payment on account of
the Obligations in excess of its Pro Rata Share thereof shall purchase for cash
(and the other Lenders or holders shall sell) such participations in each such
other Lender's or holder's Pro Rata Share of the Obligations as would be
necessary to cause such Lender to share the amount so set off or otherwise
received with each other Lender or holder in accordance with their respective
Pro Rata Shares. Borrower and each Credit Party that is a Guarantor agree, to
the fullest extent permitted by law, that (a) any Lender or holder may exercise
its right to set off with respect to amounts in excess of its Pro Rata Share of
the Obligations and may sell participations in such amount so set off to other
Lenders and holders and (b) any Lender or holders so purchasing a participation
in the Loans made or other Obligations held by other Lenders or holders may
exercise all rights of set-off, bankers' lien, counterclaim or similar rights
with respect to such participation as fully as if such Lender or holder were a
direct holder of the Loans and the other Obligations in the amount of such
participation. Notwithstanding the foregoing, if all or any portion of the
set-off amount or payment otherwise received is thereafter recovered from the
Lender that has exercised the right of set-off, the purchase of participations
by that Lender shall be rescinded and the purchase price restored without
interest.
9.9. ADVANCES; PAYMENTS; NON-FUNDING LENDERS; INFORMATION; ACTIONS IN
CONCERT.
(a) ADVANCES; PAYMENTS. (i) Agent shall notify Revolving Lenders,
promptly after receipt of a Notice of Revolving Credit Advance and in any event
prior to 1:00 p.m. (
New York time) on the date such Notice of Revolving Advance
is received, by telecopy, telephone or other similar form of transmission. Each
Revolving Lender shall make the amount of such Lender's Pro Rata Share of such
Revolving Credit Advance available to Agent in same day funds by wire transfer
to Agent's account as set forth in ANNEX H not later than 3:00 p.m. (
New York
time) on the requested funding date in the case of an Index Rate Loan. After
receipt of such wire transfers (or, in Agent's sole discretion, before receipt
of such wire transfers), subject to the terms hereof, Agent shall make the
requested Revolving Credit Advance to Borrower as designated by Borrower in the
Notice of Revolving Credit Advance. All payments by each Revolving Lender shall
be made without setoff, counterclaim or deduction of any kind.
(ii) On the second (2nd) Business Day of each calendar
week or more frequently as aggregate cumulative payments in excess of $500,000
are received with respect to the Loans (each, a "SETTLEMENT DATE"), Agent will
advise each Lender by telephone, or telecopy of the amount of such Lender's Pro
Rata Share of principal, interest and Fees paid for the benefit of Lenders with
respect to each applicable Loan. Provided that such Lender has funded all
payments or Advances required to be made by
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it and has purchased all participations required to be purchased by it under
this Agreement and the other Loan Documents as of such Settlement Date, Agent
will pay to each Lender such Lender's Pro Rata Share of principal, interest and
Fees paid by Borrower since the previous Settlement Date for the benefit of that
Lender on the Loans held by it. To the extent that any Lender (a "NON-FUNDING
LENDER") has failed to fund all such payments and Advances or failed to fund the
purchase of all such participations, Agent shall be entitled to set off the
funding short-fall against that Non-Funding Lender's Pro Rata Share of all
payments received from Borrower. Such payments shall be made by wire transfer to
such Lender's account (as specified by such Lender in ANNEX H or the applicable
Assignment Agreement) not later than 2:00 p.m. (
New York time) on the next
Business Day following each Settlement Date.
(b) AVAILABILITY OF LENDER'S PRO RATA SHARE. Agent may assume that
each Revolving Lender will make its Pro Rata Share of each Revolving Credit
Advance available to Agent on each funding date. If such Pro Rata Share is not,
in fact, paid to Agent by such Revolving Lender when due, Agent will be entitled
to recover such amount on demand from such Revolving Lender without set-off,
counterclaim or deduction of any kind. If any Revolving Lender fails to pay the
amount of its Pro Rata Share forthwith upon Agent's demand, Agent shall promptly
notify Borrower and Borrower shall immediately repay such amount to Agent.
Nothing in this SECTION 9.9(b) or elsewhere in this Agreement or the other Loan
Documents shall be deemed to require Agent to advance funds on behalf of any
Revolving Lender or to relieve any Revolving Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Borrower may
have against any Revolving Lender as a result of any default by such Revolving
Lender hereunder. To the extent that Agent advances funds to Borrower on behalf
of any Revolving Lender and is not reimbursed therefor on the same Business Day
as such Advance is made, Agent shall be entitled to retain for its account all
interest accrued on such Advance until reimbursed by the applicable Revolving
Lender.
(c) RETURN OF PAYMENTS. (i) If Agent pays an amount to a Lender
under this Agreement in the belief or expectation that a related payment has
been or will be received by Agent from Borrower and such related payment is not
received by Agent, then Agent will be entitled to recover such amount from such
Lender on demand without set-off, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount
received by Agent under this Agreement must be returned to Borrower or paid to
any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of this Agreement or any other Loan
Document, Agent will not be required to distribute any portion thereof to any
Lender. In addition, each Lender will repay to Agent on demand any portion of
such amount that Agent has distributed to such Lender, together with interest at
such rate, if any, as Agent is required to pay to Borrower or such other Person,
without set-off, counterclaim or deduction of any kind.
53
(d) NON-FUNDING LENDERS. The failure of any Non-Funding Lender to
make any Revolving Credit Advance or any payment required by it hereunder or to
purchase any participation to be made or purchased by it on the date specified
therefor shall not relieve any other Revolving Lender (each such other Revolving
Lender, an "OTHER LENDER") of its obligations to make such Advance or purchase
such participation on such date, but neither any Other Lender nor Agent shall be
responsible for the failure of any Non-Funding Lender to make an Advance or to
purchase a participation required hereunder. Notwithstanding anything set forth
herein to the contrary, a Non-Funding Lender shall not have any voting or
consent rights under or with respect to any Loan Document or constitute a
"Lender" or a "Revolving Lender" (or be included in the calculation of
"Requisite Lenders" or "Requisite Revolving Lenders" hereunder) for any voting
or consent rights under or with respect to any Loan Document.
(e) DISSEMINATION OF INFORMATION. Agent will use reasonable
efforts to provide Lenders with any notice of Default or Event of Default
received by Agent from, or delivered by Agent to, any Credit Party, with notice
of any Event of Default of which Agent has actually become aware and with notice
of any action taken by Agent following any Event of Default; provided, however,
that Agent shall not be liable to any Lender for any failure to do so, except to
the extent that such failure is attributable to Agent's gross negligence or
willful misconduct.
(f) ACTIONS IN CONCERT. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of set-off) without
first obtaining the prior written consent of Agent and Requisite Lenders, it
being the intent of Lenders that any such action to protect or enforce rights
under this Agreement and the Notes shall be taken in concert and at the
direction or with the consent of Agent.
10. SUCCESSORS AND ASSIGNS
10.1. SUCCESSORS AND ASSIGNS. This Agreement and the other Loan Documents
shall be binding on and shall inure to the benefit of each Credit Party, Agent,
Lenders and their respective successors and assigns (including, in the case of
any Credit Party, a debtor-in-possession on behalf of such Credit Party), except
as otherwise provided herein or therein. No Credit Party may assign, transfer,
hypothecate or otherwise convey its rights, benefits, obligations or duties
hereunder or under any of the other Loan Documents without the prior express
written consent of Agent and Lenders. Any such purported assignment, transfer,
hypothecation or other conveyance by any Credit Party without the prior express
written consent of Agent and Lenders shall be void. The terms and provisions of
this Agreement are for the purpose of defining the relative rights and
obligations of each Credit Party, Agent and Lenders with respect to the
transactions contemplated hereby and no Person shall be a third party
beneficiary of any of the terms and provisions of this Agreement or any of the
other Loan Documents.
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11. MISCELLANEOUS
11.1. COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT. The Loan Documents
constitute the complete agreement between the parties with respect to the
subject matter thereof and may not be modified, altered or amended except as set
forth in SECTION 11.2 below. Any letter of interest, and/or fee letter, if any,
between any Credit Party and Agent or any Lender or any of their respective
affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this
Agreement.
11.2. AMENDMENTS AND WAIVERS. (a) Except for actions expressly permitted
to be taken by Agent, no amendment, modification, termination or waiver of any
provision of this Agreement or any of the Notes, or any consent to any departure
by any Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by Agent and Borrower, and by Requisite Lenders,
Requisite Revolving Lenders, or all affected Lenders, as applicable. Except as
set forth in CLAUSES (b) and (c) below, all such amendments, modifications,
terminations or waivers requiring the consent of any Lenders shall require the
written consent of Requisite Lenders.
(b) No amendment, modification, termination or waiver of or
consent with respect to any provision of this Agreement which waives compliance
with the conditions precedent set forth in SECTION 2.2 to the making of any Loan
or the incurrence of any Letter of Credit Obligations shall be effective unless
the same shall be in writing and signed by Agent, Requisite Revolving Lenders
and Borrower. Notwithstanding anything contained in this Agreement to the
contrary, no waiver or consent with respect to any Default (if in connection
therewith Agent or Requisite Revolving Lenders, as the case may be, have
exercised its or their right to suspend the making or incurrence of further
Advances or Letter of Credit Obligations pursuant to SECTION 8.2(a)) or any
Event of Default shall be effective for purposes of the conditions precedent to
the making of Loans or the incurrence of Letter of Credit Obligations set forth
in SECTION 2.2 unless the same shall be in writing and signed by Agent,
Requisite Revolving Lenders and Borrower.
(c) No amendment, modification, termination or waiver shall,
unless in writing and signed by Agent and each Lender directly affected thereby,
do any of the following: (i) increase the principal amount of any Lender's
Commitment (which action shall be deemed to directly affect all Lenders); (ii)
reduce the principal of, rate of interest on or Fees payable with respect to any
Loan or Letter of Credit Obligations of any affected Lender; (iii) extend any
scheduled payment date or final maturity date of the principal amount of any
Loan of any affected Lender; (iv) waive, forgive, defer, extend or postpone any
payment of interest or Fees as to any affected Lender; (v) except as otherwise
permitted herein or in the other Loan Documents, release, or permit any Credit
Party to sell or otherwise dispose of, any Collateral (which action shall be
deemed to directly affect all Lenders) other than in the ordinary course of
business; (vi) change the
55
percentage of the Commitments or of the aggregate unpaid principal amount of the
Loans which shall be required for Lenders or any of them to take any action
hereunder; and (vii) amend or waive this SECTION 11.2 or the definitions of the
terms "Requisite Lenders" or "Requisite Revolving Lenders" insofar as such
definitions affect the substance of this SECTION 11.2. Furthermore, no
amendment, modification, termination or waiver affecting the rights or duties of
Agent under this Agreement or any other Loan Document shall be effective unless
in writing and signed by Agent, in addition to Lenders required hereinabove to
take such action. Each amendment, modification, termination or waiver shall be
effective only in the specific instance and for the specific purpose for which
it was given. No amendment, modification, termination or waiver shall be
required for Agent to take additional Collateral pursuant to any Loan Document.
No amendment, modification, termination or waiver of any provision of any Note
shall be effective without the written concurrence of the holder of that Note.
No notice to or demand on any Credit Party in any case shall entitle such Credit
Party or any other Credit Party to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance with this SECTION 11.2 shall be binding upon
each holder of the Notes at the time outstanding and each future holder of the
Notes.
(d) If, in connection with any proposed amendment, modification,
waiver or termination (a "PROPOSED CHANGE"):
(i) requiring the consent of all affected Lenders, the
consent of Requisite Lenders is obtained, but the consent of other Lenders whose
consent is required is not obtained (any such Lender whose consent is not
obtained as described this CLAUSE (i) and in CLAUSES (ii), (iii) and (iv) below
being referred to as a "NON-CONSENTING LENDER"), or
(ii) requiring the consent of Requisite Revolving
Lenders, the consent of Revolving Lenders holding 51% or more of the aggregate
Revolving Loan Commitments is obtained, but the consent of Requisite Revolving
Lenders is not obtained, or
(iii) requiring the consent of Requisite Lenders, the
consent of Lenders holding 51% or more of the aggregate Commitments is obtained,
but the consent of Requisite Lenders is not obtained, then, so long as Agent is
not a Non-Consenting Lender, at Borrower's request, Agent or a Person acceptable
to Agent shall have the right with Agent's consent and in Agent's sole
discretion (but shall have no obligation) to purchase from such Non-Consenting
Lenders, and such Non-Consenting Lenders agree that they shall, upon Agent's
request, sell and assign to Agent or such Person, all of the Commitments of such
Non-Consenting Lender for an amount equal to the principal balance of all Loans
held by the Non-Consenting Lender and all accrued interest and Fees with respect
thereto through the date of sale, such purchase and sale to be consummated
pursuant to an executed
Assignment Agreement.
56
(e) Upon indefeasible payment in full in cash and performance of
all of the Obligations (other than indemnification Obligations under Section
1.13), termination of the Commitments and a release of all claims against Agent
and Lenders, and so long as no suits, actions, proceedings, or claims are
pending or threatened against any Indemnified Person asserting any damages,
losses or liabilities that are Indemnified Liabilities, Agent shall deliver to
Borrower termination statements, mortgage releases and other documents necessary
or appropriate to evidence the termination of the Liens securing payment of the
Obligations.
11.3. FEES AND EXPENSES. Borrower shall reimburse Agent for all
out-of-pocket expenses incurred in connection with the preparation of the Loan
Documents (including the reasonable fees and expenses of all of its special loan
counsel, advisors, consultants and auditors retained in connection with the Loan
Documents and advice in connection therewith). Borrower shall reimburse Agent
(and, with respect to CLAUSES (c), (d) and (e) below, all Lenders) for all fees,
costs and expenses, including the reasonable fees, costs and expenses of counsel
or other advisors (including environmental and management consultants and
appraisers) for advice, assistance, or other representation in connection with:
(a) the forwarding to Borrower or any other Person on behalf of
Borrower by Agent of the proceeds of the Loans;
(b) any amendment, modification or waiver of, or consent with
respect to, any of the Loan Documents or advice in connection with the
administration of the Loans made pursuant hereto or its rights hereunder or
thereunder;
(c) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, any Lender, Borrower or any other Person) in any
way relating to the Collateral, any of the Loan Documents, the Pre-Petition
Credit Agreement or any other agreement to be executed or delivered in
connection therewith or herewith, whether as party, witness, or otherwise,
including any litigation, contest, dispute, suit, case, proceeding or action,
and any appeal or review thereof, in connection with a case commenced by or
against Borrower or any other Person that may be obligated to Agent by virtue of
the Loan Documents; including any such litigation, contest, dispute, suit,
proceeding or action arising in connection with any work-out or restructuring of
the Loans during the pendency of one or more Events of Default; PROVIDED that in
the case of reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders;
(d) any attempt to enforce any remedies of Agent against any or
all of the Credit Parties or any other Person that may be obligated to Agent or
any Lender by virtue of any of the Loan Documents; including any such attempt to
enforce any such remedies in the course of any work-out or restructuring of the
Loans during the pendency of one or more Events of Default; PROVIDED that in the
case of reimbursement of counsel
57
for Lenders other than Agent, such reimbursement shall be limited to one counsel
for all such Lenders;
(e) any work-out or restructuring of the Loans during the pendency
of one or more Events of Default; or
(f) efforts to (i) monitor the Loans or any of the other
Obligations, (ii) evaluate, observe or assess any of the Credit Parties or their
respective affairs, and (iii) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the Collateral;
including, as to each of clauses (a) through (f) above, all attorneys' and other
professional and service providers' fees arising from such services, including
those in connection with any appellate proceedings; and all expenses, costs,
charges and other fees incurred by such counsel and others in any way or respect
arising in connection with or relating to any of the events or actions described
in this SECTION 11.3 shall be payable, on demand, by Borrower to Agent. Without
limiting the generality of the foregoing, such expenses, costs, charges and fees
may include: fees, costs and expenses of accountants, environmental advisors,
appraisers, investment bankers, management and other consultants and paralegals;
court costs and expenses; photocopying and duplication expenses; court reporter
fees, costs and expenses; long distance telephone charges; air express charges;
telegram or telecopy charges; secretarial overtime charges; and expenses for
travel, lodging and food paid or incurred in connection with the performance of
such legal or other advisory services.
(g) the obtaining of approval of the Loan Documents by the
Bankruptcy Court;
(h) the preparation and review of pleadings, documents and reports
related to the Chapter 11 Case and any subsequent case under Chapter 7 of the
Bankruptcy Code, attendance at meetings, court hearings or conferences related
to the Chapter 11 Case and any subsequent case under Chapter 7 of the Bankruptcy
Code, and general monitoring of the Chapter 11 Case and any subsequent case
under Chapter 7 of the Bankruptcy Code.
11.4. NO WAIVER. Agent's or any Lender's failure, at any time or times,
to require strict performance by the Credit Parties of any provision of this
Agreement and any of the other Loan Documents shall not waive, affect or
diminish any right of Agent or such Lender thereafter to demand strict
compliance and performance therewith. Any suspension or waiver of an Event of
Default shall not suspend, waive or affect any other Event of Default whether
the same is prior or subsequent thereto and whether the same or of a different
type. Subject to the provisions of SECTION 11.2, none of the undertakings,
agreements, warranties, covenants and representations of any Credit Party
contained in this Agreement or any of the other Loan Documents and no Default or
Event of Default by any Credit Party shall be deemed to have been suspended or
waived by Agent or any
58
Lender, unless such waiver or suspension is by an instrument in writing signed
by an officer of or other authorized employee of Agent and the applicable
required Lenders, and directed to Borrower specifying such suspension or waiver.
11.5. REMEDIES. Agent's and Lenders' rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
which Agent or any Lender may have under any other agreement, including the
other Loan Documents, by operation of law or otherwise. Recourse to the
Collateral shall not be required.
11.6. SEVERABILITY. Wherever possible, each provision of this Agreement
and the other Loan Documents shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
11.7. CONFLICT OF TERMS. Except as otherwise provided in this Agreement
or any of the other Loan Documents by specific reference to the applicable
provisions of this Agreement, if any provision contained in this Agreement is in
conflict with, or inconsistent with, any provision in any of the other Loan
Documents, the provision contained in this Agreement shall govern and control.
11.8. CONFIDENTIALITY. Agent and each Lender agree to use commercially
reasonable efforts and at least equivalent to the efforts Agent or such Lender
applies to maintaining the confidentiality of its own confidential information
to maintain as confidential all confidential information provided to them by the
Credit Parties and designated as confidential for a period of two (2) years
following receipt thereof, except that Agent and any Lender may disclose such
information (a) to Persons employed or engaged by Agent or such Lender; (b) to
any bona fide assignee or participant or potential assignee or participant that
has agreed to comply with the covenant contained in this SECTION 11.8 (and any
such bona fide assignee or participant or potential assignee or participant may
disclose such information to Persons employed or engaged by them as described in
CLAUSE (a) above); (c) as required or requested by any Governmental Authority or
reasonably believed by Agent or such Lender to be compelled by any court decree,
subpoena or legal or administrative order or process; (d) as, on the advice of
Agent's or such Lender's counsel, required by law; (e) in connection with the
exercise of any right or remedy under the Loan Documents or in connection with
any Litigation to which Agent or such Lender is a party; or (f) which ceases to
be confidential through no fault of Agent or such Lender.
11.9. GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE
LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE
59
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND
ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY HEREBY
CONSENTS AND AGREES THAT THE BANKRUPTCY COURT SHALL HAVE NON-EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT
PARTIES, AGENT AND LENDERS PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS, PROVIDED, THAT AGENT, LENDERS AND THE CREDIT
PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THE BANKRUPTCY COURT MAY HAVE TO BE
HEARD BY A COURT OTHER THAN THE BANKRUPTCY COURT, PROVIDED, FURTHER NOTHING IN
THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT
OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER IN FAVOR OF AGENT. EACH CREDIT PARTY EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY
SUCH COURT, AND EACH CREDIT PARTY HEREBY WAIVES ANY OBJECTION WHICH SUCH CREDIT
PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM
NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH CREDIT PARTY HEREBY WAIVES
PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH
ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER
PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT
PARTY AT THE ADDRESS SET FORTH IN ANNEX I OF THIS AGREEMENT AND THAT SERVICE SO
MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH CREDIT PARTY'S ACTUAL
RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER
POSTAGE PREPAID.
11.10. NOTICES. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other parties, or whenever any of the parties desires to give or
serve upon any other parties any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be deemed to have been validly
served, given or delivered (a) upon the earlier of actual receipt and three (3)
Business Days after deposit in the United States Mail, registered or certified
mail, return receipt requested, with proper postage prepaid, (b) upon
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transmission, when sent by telecopy or other similar facsimile transmission
(with such telecopy or facsimile promptly confirmed by delivery of a copy by
personal delivery or United States Mail as otherwise provided in this SECTION
11.10), (c) one (1) Business Day after deposit with a reputable overnight
courier with all charges prepaid or (d) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the party to be notified and sent
to the address or facsimile number indicated on ANNEX I or to such other address
(or facsimile number) as may be substituted by notice given as herein provided.
The giving of any notice required hereunder may be waived in writing by the
party entitled to receive such notice. Failure or delay in delivering copies of
any notice, demand, request, consent, approval, declaration or other
communication to any Person (other than Borrower or Agent) designated on ANNEX I
to receive copies shall in no way adversely affect the effectiveness of such
notice, demand, request, consent, approval, declaration or other communication.
11.11. SECTION TITLES. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
11.12. COUNTERPARTS. This Agreement may be executed in any number
of separate counterparts, each of which shall collectively and separately
constitute one agreement.
11.13. WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY CREDIT PARTY ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
11.14. PRESS RELEASES. Each Credit Party executing this Agreement agrees
that neither it nor its Affiliates will in the future issue any press releases
or other public disclosure using the name of GE Capital or its affiliates or
referring to this Agreement, the other Loan Documents without at least two (2)
Business Days' prior notice to GE Capital and without the prior written consent
of GE Capital unless (and only to the extent that) such Credit Party or
Affiliate is required to do so under law and then, in any event,
61
such Credit Party or Affiliate will consult with GE Capital before issuing such
press release or other public disclosure. Each Credit Party consents to the
publication by Agent or any Lender of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement.
Agent reserves the right to provide to industry trade organizations information
necessary and customary for inclusion in league table measurements with
Borrower's consent which shall not be unreasonably withheld or delayed.
11.15. REINSTATEMENT. This Agreement shall remain in full force and effect
and continue to be effective should any petition (other than the Chapter 11
Case) be filed by or against Borrower for liquidation or reorganization, should
Borrower become insolvent or make an assignment for the benefit of any creditor
or creditors or should a receiver or trustee be appointed for all or any
significant part of Borrower's assets, and shall continue to be effective or to
be reinstated, as the case may be, if at any time payment and performance of the
Obligations, or any part thereof, is, pursuant to applicable law, rescinded or
reduced in amount, or must otherwise be restored or returned by any obligee of
the Obligations, whether as a "voidable preference," "fraudulent conveyance," or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
11.16. ADVICE OF COUNSEL. Each of the parties represents to each
other party hereto that it has discussed this Agreement and, specifically, the
provisions of SECTIONS 11.9 and 11.13, with its counsel.
11.17. NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
11.18. AFFIRMATION OF EXISTING LOAN DOCUMENTS. Each of the Credit Parties
(a) acknowledges, agrees and consents to the amendment and restatement of the
Pre-Petition Credit Agreement effectuated hereby, (b) confirms and agrees that
its obligations under each of the Loan Documents to which it is a party shall
continue without any diminution thereof and shall remain in full force and
effect on and after the Closing Date, (c) confirms and agrees that each of the
schedules to each of Security Agreements, the Intellectual Property Security
Agreements and the Pledge Agreements are hereby amended and replaced by the
applicable schedule attached hereto as DISCLOSURE SCHEDULE (3.26); provided that
any Exhibit or Power of Attorney to any of the Security Agreements, Intellectual
Property Security Agreements and Pledge Agreements not attached hereto as a part
of DISCLOSURE SCHEDULE (3.26) shall remain in full force and effect in the form
attached to each such agreement, as applicable, as of the Closing Date
62
and (d) confirms and agrees that the Liens granted pursuant to the Collateral
Documents to which it is a party shall continue without any diminution thereof
and shall remain in full force and effect on and after the Closing Date.
11.19. PARTIES INCLUDING TRUSTEES; BANKRUPTCY COURT PROCEEDINGS. This
Agreement, the other Loan Documents, and all Liens created hereby or pursuant
hereto or to any other Loan Document shall be binding upon each Credit Party,
the estate of Borrower, and any trustee or successor-in-interest of Borrower in
the Chapter 11 Case or any subsequent case commenced under Chapter 7 of the
Bankruptcy Code, and shall not be subject to Section 365 of the Bankruptcy Code.
This Agreement and the other Loan Documents shall be binding upon, and inure to
the benefit of, the successors of Agent and Lenders and their respective
assigns, transferees and endorsees. The Liens created by this Agreement and the
other Loan Documents shall be and remain valid and perfected in the event of the
substantive consolidation or conversion of the Chapter 11 Case or any other
bankruptcy case of any Credit Party to a case under Chapter 7 of the Bankruptcy
Code or in the event of dismissal of the Chapter 11 Case or the release of any
Collateral from the jurisdiction of the Bankruptcy Court for any reason, without
the necessity that Lenders file financing statements or otherwise perfect its
security interests or Liens under applicable law.
11.20. PRE-PETITION CREDIT AGREEMENT. Borrower hereby agrees that (i) this
Agreement is separate and distinct from the Pre-Petition Credit Agreement and
(ii) the Pre-Petition Credit Agreement is in full force and effect. Borrower
further agrees that by entering into this Agreement, Lenders do not waive any
Default or Event of Default under the Pre-Petition Credit Agreement.
11.21. RETENTION OF ADVISOR. Agent, in its sole and absolute
discretion, may retain a financial/restructuring advisor to advise Agent and
Lenders. The fees and expenses of such advisor incurred on or after October 15,
2002 shall be reimbursable by Borrower to Agent.
63
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
XXXXXX CUSTOM PLASTICS, LLC
By: Xxxxxx Holdings, LLC,
its Manager
By: Xxxxxx Industrial Group, Inc.
its Manager
By:
-------------------------------------
Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION, as
Agent and Lender
By:
----------------------------------
Name:
Title:
64
XXXXXX HOLDINGS, LLC
By: Xxxxxx Industrial Group, Inc.
its Manager
By:
-------------------------------
Name:
Title:
XXXXXX LEBANON KENTUCKY IBRB, LLC
By: Xxxxxx Custom Plastics, LLC,
its Manager
By: Xxxxxx Holdings, LLC,
its Manager
By: Xxxxxx Industrial Group, Inc.,
its Manager
By:
----------------------------
Name:
Title:
65
SCHEDULE 1.1
RESPONSIBLE INDIVIDUAL
General Electric Capital Corporation
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Custom Plastics Account
Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
66
SCHEDULE 1.4
TO
CREDIT AGREEMENT
SOURCES AND USES; FUNDS FLOW MEMORANDUM
As of Closing Date
PRE-CLOSING
Revolving Credit Advances [____________]
Term Loan A [____________]
Term Loan B [____________]
Term Loan C [____________]
Letters of Credit Outstanding [____________]
POST-CLOSING
Revolving Credit Advances [____________]
Letter of Credit Outstanding [____________]
Total [____________]
REVOLVING CREDIT ADVANCE AVAILABILITY
Total Commitment [____________]
Current Revolving Credit Advances [____________]
Letter of Credit Obligations [____________]
Reserves established by Agent [____________]
Fees payable to CBW [____________]
Fees payable to Agent for benefit of Lenders [____________]
Total available for new Revolving Advances
as of the Closing Date [____________]
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless
otherwise provided elsewhere in the Loan Documents) the following respective
meanings and all section references in the following definitions shall refer to
Sections of the Agreement:
"ACCOUNT DEBTOR" means any Person who may become obligated to any
Credit Party under, with respect to, or on account of, an Account, Chattel Paper
or General Intangibles (including a payment intangible).
"ACCOUNTS" means all "accounts," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, including (a) all
accounts receivable, other receivables, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper, or
Instruments), (including any such obligations that may be characterized as an
account or contract right under the Code), (b) all of each Credit Party's rights
in, to and under all purchase orders or receipts for goods or services, (c) all
of each Credit Party's rights to any goods represented by any of the foregoing
(including unpaid sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all rights to payment due to any Credit Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Credit Party or in connection with
any other transaction (whether or not yet earned by performance on the part of
such Credit Party), (e) all health care insurance receivables and (f) all
collateral security of any kind, given by any Account Debtor or any other Person
with respect to any of the foregoing.
"ADVANCE" shall mean any Revolving Credit Advance.
"AFFILIATE" shall mean, with respect to any Person, (a) each Person
that, directly or indirectly, owns or controls, whether beneficially, or as a
trustee, guardian or other fiduciary, five percent (5%) or more of the Stock
having ordinary voting power in the election of directors of such Persons, (b)
each Person that controls, is controlled by or is under common control with such
Person, (c) each of such Person's officers, directors, joint venturers and
partners and (d) in the case of Borrower, the immediate family members, spouses
and lineal descendants of individuals who are Affiliates of Borrower. For the
purposes of this definition, "CONTROL" of a Person shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of its
management or policies, whether through the ownership of voting securities, by
contract or otherwise;
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PROVIDED, HOWEVER, that the term "AFFILIATE" shall specifically exclude Agent
and each Lender.
"AGENT" shall mean GE Capital or its successor appointed pursuant
to SECTION 9.7.
"AGREEMENT" shall have the meaning provided in the preamble.
"APPENDICES" shall have the meaning assigned to it in the recitals
to the Agreement.
"APPLICABLE REVOLVER INDEX MARGIN" shall mean 2.0% per annum.
"
ASSIGNMENT AGREEMENT" shall have the meaning assigned to it in
SECTION 9.1(a).
"AVOIDANCE ACTIONs" shall have the meaning assigned to it in the
Recitals.
"BANKRUPTCY CODE" shall have the meaning assigned to it in the
Recitals.
"BANKRUPTCY COURT" shall have the meaning assigned to it in the
Recitals.
"BANKRUPTCY RULES" shall mean the Federal Rules of Bankruptcy
Procedure, as the same may from time to time be in effect and applicable to the
Chapter 11 Case.
"BORROWER" shall have the meaning assigned to it in the Recitals.
"BORROWER ACCOUNTS" shall have the meaning assigned to it in ANNEX
C.
"BORROWER WARRANT" shall have the meaning ascribed to such term in
the Pre-Petition Credit Agreement.
"BORROWER WARRANT AGREEMENT" shall have the meaning ascribed to
such term in the Pre-Petition Credit Agreement.
"BORROWING AVAILABILITY" shall have the meaning assigned to it in
SECTION 1.1(a)(i).
"BUSINESS DAY" shall mean any day that is not a Saturday, a Sunday
or a day on which banks are required or permitted to be closed in the State of
New York.
"CAPITAL EXPENDITURES" shall mean, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness,
including without limitation in connection with Capital Leases) by such Person
during any measuring period for any fixed assets or improvements or for
replacements, substitutions
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or additions thereto, that have a useful life of more than one year and that are
required to be capitalized under GAAP.
"CAPITAL LEASE" shall mean, with respect to any Person, any lease
of any property (whether real, personal or mixed) by such Person as lessee that,
in accordance with GAAP, would be required to be classified and accounted for as
a capital lease on a balance sheet of such Person.
"CAPITAL LEASE OBLIGATION" shall mean, with respect to any Capital
Lease of any Person, the amount of the obligation of the lessee thereunder that,
in accordance with GAAP, would appear on a balance sheet of such lessee in
respect of such Capital Lease.
"CARVE-OUT AMOUNT" shall have the meaning assigned to it in SECTION
1.18(c).
"CARVE-OUT EXPENSES" shall have the meaning assigned to it in
SECTION 1.18(c).
"CASH FLOW BUDGET" means the thirteen (13) week cash flow budget of
Borrower, relative to the operations of Borrower, in substantially the form
attached as EXHIBIT 1.2, deliver by Borrower to Agent pursuant to Annex E.
"CASH MANAGEMENT SYSTEMS" shall have the meaning assigned to it in
SECTION 1.8.
"CBW" shall mean Xxxxx, Xxxxxxxx & White, LLC.
"CHANGE OF CONTROL" shall mean any event, transaction or occurrence
as a result of which (a) MIG shall cease to own and control at least 100% of the
economic and 35% of the voting rights associated with the outstanding capital
Stock of all classes of Holdings on a fully diluted basis, (b) Holdings shall
cease to own and control all of the economic and voting rights associated with
at least 100% of the outstanding capital Stock of Borrower (other than solely by
reason of the exercise of the Borrower Warrant), (c) MIG shall cease to be the
sole Manager of Holdings and Holdings shall cease to be the sole Manager of
Borrower and Borrower shall cease to be the sole Manager of the IRB Subsidiary,
(d) Borrower shall cease to own and control all of the economic and voting
rights associated with all of the outstanding capital Stock of any of its
Subsidiaries or (e) Xxxxxxx Xxxxxx shall no longer be performing such duties and
responsibilities on behalf of Borrower which are substantially similar to those
being performed by Xxxxxxx Xxxxxx as of the Closing Date, unless at the time of
such termination or change in duties and responsibilities Borrower has
identified and engaged an individual to act as a replacement for the position or
positions held by, and the duties and responsibilities performed by Xxxxxxx
Xxxxxx at the time of such termination or change in duties and responsibilities;
provided that any such replacement shall be acceptable to Agent in its sole
discretion.
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"CHAPTER 11 CASE" shall have the meaning assigned to it in the
Recitals.
"CHARGES" shall mean all federal, state, county, city, municipal,
local, foreign or other governmental taxes (including any interest, penalties or
other additions to tax that may become payable in respect thereof and taxes owed
to the PBGC at the time due and payable), levies, assessments, charges, liens,
claims or encumbrances upon or relating to (a) the Collateral, (b) the
Obligations, (c) the employees, payroll, income or gross receipts of any Credit
Party, (d) any Credit Party's ownership or use of any properties or other
assets, or (e) any other aspect of any Credit Party's business.
"CHATTEL PAPER" means any "chattel paper," as such term is defined
in the Code, including electronic chattel paper, now owned or hereafter acquired
by any Credit Party.
"CLOSING DATE" shall mean November ___, 2002.
"CLOSING CHECKLIST" shall mean the schedule, including all
appendices, exhibits or schedules thereto, listing certain documents and
information to be delivered in connection with the Agreement, the other Loan
Documents and the transactions contemplated thereunder, substantially in the
form attached hereto as ANNEX D.
"CODE" means the Uniform Commercial Code as the same may, from time
to time, be enacted and in effect in the State of
New York; PROVIDED, that to
the extent that the Code is used to define any term herein or in any Loan
Document and such term is defined differently in different Articles or Divisions
of the Code, the definition of such term contained in Article or Division 9
shall govern; PROVIDED FURTHER, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of, or
remedies with respect to, Agent's or any Lender's Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of New York, the term "CODE" shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.
"COLLATERAL" shall mean the property covered by the Security
Agreements, the Mortgages, the Pledge Agreements and the other Collateral
Documents and any other property, real or personal, tangible or intangible, now
existing or hereafter acquired, that may at any time be or become subject to a
security interest or Lien in favor of Agent, on behalf of itself and Lenders, to
secure the Obligations.
"COLLATERAL DOCUMENTS" shall mean the Security Agreements, the
Pledge Agreements, the Guaranties, the Mortgages, the Intellectual Property
Security Agreements and all similar agreements entered into guaranteeing payment
of, or granting a Lien upon property as security for payment of, the
Obligations.
A-4
"COLLATERAL REPORTS" shall mean the reports with respect to the
Collateral referred to in ANNEX F.
"COLLECTION ACCOUNT" shall mean that certain account of Agent,
account number 000-000-00 in the name of Agent at Bankers Trust Company in New
York, New York or such other account as Agent shall specify.
"COMMITMENT TERMINATION DATE" shall mean the earliest of (a) the
Scheduled Maturity Date, (b) the date of termination of Lenders' obligations to
make Advances and/or incur Letter of Credit Obligations or permit existing Loans
to remain outstanding pursuant to SECTION 8.2(b), and (c) the date of
indefeasible prepayment in full by Borrower of the Loans and the cancellation
and return (or stand-by guarantee) of all Letters of Credit or the cash
collateralization of all Letter of Credit Obligations pursuant to ANNEX B, and
the permanent reduction of the Revolving Loan Commitment to zero dollars ($0);
(d) five (5) days following the Petition Date if the Interim Order has not been
entered by the Bankruptcy Court by such date, (e) thirty-five (35) days
following the Petition Date if the Final Order has not been entered by the
Bankruptcy Court by such date, (f) the date a plan of reorganization confirmed
in the Chapter 11 Case becomes effective that does not provide for the payment
in full of all amounts owed to Agent and the Lenders under this Agreement and
the other Loan Documents on such effective date, (g) the date of the closing of
a sale of all or substantially all of Borrower's assets pursuant to Section 363
of the Bankruptcy Code, a confirmed plan of reorganization or a liquidation
pursuant to Chapter 7 of the Bankruptcy Code, and (h) the effective date of a
plan of reorganization or arrangement in the Chapter 11 Case.
"COMMITMENTS" shall mean (a) as to any Lender, the aggregate of
such Lender's Revolving Loan Commitment as set forth on ANNEX J to the Agreement
or in the most recent
Assignment Agreement executed by such Lender and (b) as to
all Lenders, the aggregate of all Lenders' Revolving Loan Commitments, which
aggregate commitment shall be $2,500,000 on the Closing Date, as to each of
clauses (a) and (b), as such Commitments may be reduced, amortized or adjusted
from time to time in accordance with the Agreement.
"COMMITTEES" shall mean collectively, the official committee of
unsecured creditors and any other committee formed, appointed, or approved in
the Chapter 11 Case and each of such Committees shall be referred to herein as a
Committee.
"COMPLIANCE CERTIFICATE" shall have the meaning assigned to it in
ANNEX E.
"CONTINGENT PAYMENT" shall have the meaning assigned to such term
in the Worthington Acquisition Agreement.
"CONTRACTS" shall mean all "contracts," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, in any event,
including all
A-5
contracts, undertakings, or agreements (other than rights evidenced by Chattel
Paper, Documents or Instruments) in or under which any Credit Party may now or
hereafter have any right, title or interest, including any agreement relating to
the terms of payment or the terms of performance of any Account.
"COPYRIGHT LICENSE" shall mean any and all rights now owned or
hereafter acquired by any Credit Party under any written agreement granting any
right to use any Copyright or Copyright registration.
"COPYRIGHTS" shall mean all of the following now owned or hereafter
acquired by any Credit Party: (a) all copyrights and general intangibles of like
nature (whether registered or unregistered), now owned or existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, including all registrations, recordings
and applications in the United States Copyright Office or in any similar office
or agency of the United States, any state or territory thereof, or any other
country or any political subdivision thereof, and (b) all reissues, extensions
or renewals thereof.
"CREDIT PARTIES" shall mean Holdings, MCP, the IRB Subsidiary and
each of their respective Subsidiaries.
"CURRENT ASSETS" shall mean, with respect to any Person, all
current assets of such Person as of any date of determination calculated in
accordance with GAAP, but excluding cash, cash equivalents and debts due from
Affiliates.
"CURRENT LIABILITIES" shall mean, with respect to any Person, all
liabilities which should, in accordance with GAAP, be classified as current
liabilities, and in any event shall include all Indebtedness payable on demand
or within one year from any date of determination without any option on the part
of the obligor to extend or renew beyond such year, all accruals for federal or
other taxes based on or measured by income and payable within such year, and the
current portion of long-term debt required to be paid within one year, but
excluding, in the case of Borrower, the aggregate outstanding principal balances
of the Revolving Loan.
"DEFAULT" shall mean any event which, with the passage of time or
notice or both, would, unless cured or waived, become an Event of Default.
"DEFAULT RATE" shall have the meaning assigned to it in SECTION
1.5(d).
"DEPOSIT ACCOUNTS" means all "deposit accounts" as such term is
defined in the Code, now or hereafter held in the name of any Credit Party.
"DISBURSEMENT ACCOUNTS" shall have the meaning assigned to it on
ANNEX C.
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"DISCLOSURE SCHEDULES" shall mean the Schedules prepared by
Borrower and denominated as Disclosure SCHEDULES 1.4 through 6.7 in the Index to
the Agreement.
"DOCUMENTS" means all "documents," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located.
"DOLLARS" or "$" shall mean lawful currency of the United States of
America.
"EBITDA" shall mean, with respect to any Person for any fiscal
period, an amount equal to (a) consolidated net income of such Person for such
period, MINUS (b) the sum of (i) income tax credits, (ii) interest income, (iii)
gain from extraordinary items for such period, (iv) any aggregate net gain (but
not any aggregate net loss) during such period arising from the sale, exchange
or other disposition of capital assets by such Person (including any fixed
assets, whether tangible or intangible, all inventory sold in conjunction with
the disposition of fixed assets and all securities, and (v) any other non-cash
gains which have been added in determining consolidated net income, in each case
to the extent included in the calculation of consolidated net income of such
Person for such period in accordance with GAAP, but without duplication, PLUS
(c) the sum of (i) any provision for income taxes, (ii) Interest Expense, (iii)
loss from extraordinary items for such period, (iv) the amount of non-cash
charges (including depreciation and amortization) for such period, (v) amortized
debt discount for such period, and (vi) the amount of any deduction to
consolidated net income as the result of any grant to any members of the
management of such Person of any Stock, in each case to the extent included in
the calculation of consolidated net income of such Person for such period in
accordance with GAAP, but without duplication. For purposes of this definition,
the following items shall be excluded in determining consolidated net income of
a Person: (1) the income (or deficit) of any other Person accrued prior to the
date it became a Subsidiary of, or was merged or consolidated into, such Person
or any of such Person's Subsidiaries; (2) the income (or deficit) of any other
Person (other than a Subsidiary) in which such Person has an ownership interest,
except to the extent any such income has actually been received by such Person
in the form of cash dividends or distributions; (3) the undistributed earnings
of any Subsidiary of such Person to the extent that the declaration or payment
of dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary; (4) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was made out of
income accrued during such period; (5) any write-up of any asset; (6) any net
gain from the collection of the proceeds of life insurance policies; (7) any net
gain arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness, of such Person, (8) in the case of a successor
to such Person by consolidation or merger or as a transferee of its assets, any
earnings of such successor prior to such consolidation, merger or transfer of
assets, and (9) any deferred credit representing the excess of equity in any
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Subsidiary of such Person at the date of acquisition of such Subsidiary over the
cost to such Person of the investment in such Subsidiary.
"ELIGIBLE ACCOUNTS" shall have the meaning assigned to it in
SECTION 1.6 of the Agreement.
"ELIGIBLE INVENTORY" shall have the meaning assigned to it in
SECTION 1.7 of the Agreement.
"ENVIRONMENTAL LAWS" shall mean all applicable federal, state,
local and foreign laws, statutes, ordinances, codes, rules, standards and
regulations, now or hereafter in effect, and in each case as amended or
supplemented from time to time, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C.
Sections 9601 et seq.) ("CERCLA"); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C. Sections 5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sections 136 et seq.); the
Solid Waste Disposal Act (42 U.S.C. Sections 6901 et seq.); the Toxic Substance
Control Act (15 U.S.C. Sections 2601 et seq.); the Clean Air Act (42 U.S.C.
Sections 7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C.
Sections 1251 et seq.); the Occupational Safety and Health Act (29 U.S.C.
Sections 651 et seq.); and the Safe Drinking Water Act (42 U.S.C. Sections
300(f) et seq.), each as from time to time amended, and any and all regulations
promulgated thereunder, and all analogous state, local and foreign counterparts
or equivalents and any transfer of ownership notification or approval statutes.
"ENVIRONMENTAL LIABILITIES" shall mean, with respect to any Person,
all liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all fees, disbursements and expenses of counsel, experts and
consultants), fines, penalties, sanctions and interest incurred as a result of
or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
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"ENVIRONMENTAL PERMITS" shall mean all permits, licenses,
authorizations, certificates, approvals or registrations required by any
Governmental Authority under any Environmental Laws.
"EQUIPMENT" shall mean all "equipment," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, wherever located
and, in any event, including all such Credit Party's machinery and equipment,
including processing equipment, conveyors, machine tools, data processing and
computer equipment with software and peripheral equipment (other than software
constituting part of the Accounts), and all engineering, processing and
manufacturing equipment, office machinery, furniture, materials handling
equipment, tools, attachments, accessories, automotive equipment, trailers,
trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock and other
equipment of every kind and nature, trade fixtures and fixtures not forming a
part of real property, all whether now owned or hereafter acquired, and wherever
situated, together with all additions and accessions thereto, replacements
therefor, all parts therefor, all substitutes for any of the foregoing, fuel
therefor, and all manuals, drawings, instructions, warranties and rights with
respect thereto, and all products and proceeds thereof and condemnation awards
and insurance proceeds with respect thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974 (or any successor legislation thereto), as amended from time to time, and
any regulations promulgated thereunder.
"ERISA AFFILIATE" shall mean, with respect to any Credit Party, any
trade or business (whether or not incorporated) which, together with such Credit
Party, are treated as a single employer within the meaning of Sections 414(b),
(c), (m) or (o) of the IRC.
"ERISA EVENT" shall mean, with respect to any Credit Party or any
ERISA Affiliate, (a) any event described in Section 4043(c) of ERISA with
respect to a Title IV Plan; (b) the withdrawal of any Credit Party or ERISA
Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (c) the complete or partial withdrawal of any Credit Party or any ERISA
Affiliate from any Multiemployer Plan; (d) the filing of a notice of intent to
terminate a Title IV Plan or the treatment of a plan amendment as a termination
under Section 4041 of ERISA; (e) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Credit
Party or ERISA Affiliate to make when due required contributions to a
Multiemployer Plan or Title IV Plan unless such failure is cured within 30 days;
(g) any other event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan
or for the imposition of liability under Section 4069 or 4212(c) of ERISA; (h)
the termination of a Multiemployer Plan
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under Section 4041A of ERISA or the reorganization or insolvency of a
Multiemployer Plan under Section 4241 of ERISA; or (i) the loss of a Qualified
Plan's qualification or tax exempt status; or (j) the termination of a Plan
described in Section 4064 of ERISA.
"ESOP" shall mean a Plan which is intended to satisfy the
requirements of Section 4975(e)(7) of the IRC.
"EVENT OF DEFAULT" shall have the meaning assigned to it in
SECTION 8.1.
"EXCESS CASH FLOW" shall mean, without duplication, with respect to
any Fiscal Year of Borrower and its Subsidiaries, consolidated net income PLUS
(a) depreciation, amortization and Interest Expense to the extent deducted in
determining consolidated net income, PLUS decreases or MINUS increases (as the
case may be) (b) in Working Capital, MINUS (c) Capital Expenditures during such
Fiscal Year (excluding the financed portion thereof and excluding any Capital
Expenditures in such Fiscal Year to the extent in excess of the amount permitted
to be made in such Fiscal Year pursuant to CLAUSE (a) of Annex G), MINUS (d)
Interest Expense paid or accrued (excluding any original issue discount,
interest paid in kind or amortized debt discount, to the extent included in
determining Interest Expense) and scheduled principal payments paid or payable
in respect of Funded Debt, PLUS or MINUS (as the case may be), (e) extraordinary
gains or losses which are cash items not included in the calculation of net
income, MINUS (f) mandatory prepayments paid in cash pursuant to SECTION 1.3
other than mandatory prepayments made pursuant to SECTIONS 1.3(b)(i), 1.3(b)(iv)
or 1.3(d), PLUS (g) taxes deducted in determining consolidated net income to the
extent not paid for in cash. For purposes of this definition, "WORKING CAPITAL"
means Current Assets LESS Current Liabilities.
"EXISTING VENDOR NOTES" shall mean those certain promissory notes
issued by Borrower to certain of its vendors that resulted from Borrower's
conversion of accounts payable to such vendors, and set forth on DISCLOSURE
SCHEDULE 6.3-A.
"FEDERAL FUNDS RATE" shall mean, for any day, a floating rate equal
to the weighted average of the rates on overnight Federal funds transactions
among members of the Federal Reserve System, as determined by Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System, or any successor thereto.
"FEES" shall mean any and all fees payable to Agent or any Lender
pursuant to the Agreement or any of the other Loan Documents.
"FINANCIAL STATEMENTS" shall mean the consolidated income
statements, statements of cash flows and balance sheets of Borrower delivered in
accordance with SECTION 3.4 of the Agreement and ANNEX E to the Agreement.
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"FINAL ORDER" means, collectively, the order of the Bankruptcy
Court entered in the Chapter 11 Case after a final hearing under Bankruptcy Rule
4001(c)(2) or such other procedures as approved by the Court and satisfactory in
form and substance to Agent and Lenders, and from which no appeal has been
timely filed, or if timely filed, such appeal has been dismissed (unless Agent
and the Lenders waive such requirement), together with all extensions,
modifications and amendments thereto, which, among other matters but not by way
of limitation, authorizes Borrower to obtain credit, incur (or guaranty)
Indebtedness, and grant Liens under this Agreement and the other Loan Documents,
as the case may be, provides for the superpriority of Agent's and the Lenders'
claims.
"FISCAL MONTH" shall mean any of the monthly accounting periods of
Borrower.
"FISCAL QUARTER" shall mean any of the quarterly accounting periods
of Borrower, ending on March 31, June 30, September 30 and December 31 of each
year.
"FISCAL YEAR" shall mean any of the annual accounting periods of
Borrower ending on December 31 of each year.
"FIXED CHARGE COVERAGE RATIO" shall mean, with respect to any
Person for any fiscal period, the ratio of EBITDA to Fixed Charges.
"FIXED CHARGES" shall mean, with respect to any Person for any
fiscal period, (a) the aggregate of all Interest Expense paid or accrued during
such period, plus (b) scheduled payments of principal with respect to
Indebtedness during such period, plus (c) Capital Expenditures during such
period (excluding the financed portion thereof, plus (d) amounts payable by
Borrower to CBW in connection with CBW's performance of services on behalf of
Borrower, plus (e) fees and other amounts payable to GE Capital, Agent or
Lenders, as the case may be, pursuant to SECTION 1.9 of the Agreement.
"FIXTURES" means all "fixtures" as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party.
"FUNDED DEBT" shall mean, with respect to any Person, all
Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness and which by its terms matures more than one
year from, or is directly or indirectly renewable or extendible at such Person's
option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year from the date of
creation thereof, and specifically including Capital Lease Obligations, current
maturities of long-term debt, revolving credit and short-term debt extendible
beyond one year at the option of the debtor, and also including, in the case of
Borrower, the Obligations and, without duplication, Guaranteed Indebtedness
consisting of guaranties of Funded Debt of other Persons.
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"GAAP" shall mean generally accepted accounting principles in the
United States of America consistently applied, as such term is further defined
in ANNEX G to the Agreement.
"GE CAPITAL" means General Electric Capital Corporation, a Delaware
corporation.
"GENERAL INTANGIBLES" means all "general intangibles," as such term
is defined in the Code, now owned or hereafter acquired by any Credit Party,
including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contract, all payment intangibles, customer
lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor
and reissues, extensions or renewals thereof, rights in Intellectual Property,
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark or
Trademark License), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all
liability, life, key man and business interruption insurance, and all unearned
premiums), uncertificated securities, choses in action, deposit, checking and
other bank accounts, rights to receive tax refunds and other payments, rights to
receive dividends, distributions, cash, Instruments and other property in
respect of or in exchange for pledged Stock and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices
and other papers, including without limitation all tapes, cards, computer runs
and other papers and documents in the possession or under the control of such
Credit Party or any computer bureau or service company from time to time acting
for such Credit Party.
"GOODS" means all "goods" as defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located, including embedded
software to the extent included in "goods" as defined in the Code, manufactured
homes, standing timber that is cut and removed for sale and unborn young of
animals.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any
state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"GUARANTEED INDEBTEDNESS" shall mean, as to any Person, any
obligation of such Person guaranteeing any indebtedness, lease, dividend, or
other obligation ("PRIMARY OBLIGATIONS") of any other Person (the "PRIMARY
OBLIGOR") in any manner, including any obligation or arrangement of such Person
(a) to purchase or repurchase any such primary obligation, (b) to advance or
supply funds (i) for the purchase or payment of any such
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primary obligation or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet condition of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, or (d) to indemnify the owner of such primary
obligation against loss in respect thereof. The amount of any Guaranteed
Indebtedness at any time shall be deemed to be an amount equal to the lesser at
such time of (x) the stated or determinable amount of the primary obligation in
respect of which such Guaranteed Indebtedness is made and (y) the maximum amount
for which such Person may be liable pursuant to the terms of the instrument
embodying such Guaranteed Indebtedness; or, if not stated or determinable, the
maximum reasonably anticipated liability (assuming full performance) in respect
thereof.
"GUARANTIES" shall mean, collectively, the Holdings Guaranty, each
Subsidiary Guaranty and any other guaranty executed by any Guarantor in favor of
Agent and Lenders in respect of the Obligations.
"GUARANTORS" shall mean Holdings, each Subsidiary of Borrower, and
each other Person, if any, which executes a guarantee or other similar agreement
in favor of Agent in connection with the transactions contemplated by the
Agreement and the other Loan Documents.
"HAZARDOUS MATERIAL" shall mean any substance, material or waste
which is regulated by or forms the basis of liability now or hereafter under,
any Environmental Laws, including any material or substance which is (a) defined
as a "solid waste," "hazardous waste," "hazardous material," "hazardous
substance," "extremely hazardous waste," "restricted hazardous waste,"
"pollutant," "contaminant," "hazardous constituent," "special waste," "toxic
substance" or other similar term or phrase under any Environmental Laws, (b)
petroleum or any fraction or by-product thereof, asbestos, polychlorinated
biphenyls (PCB's), or any radioactive substance.
"HOLDINGS" shall mean Xxxxxx Holdings, LLC, a Delaware limited
liability company, as debtor and debtor-in-possession.
"HOLDINGS GUARANTY" shall mean the Holdings Guaranty dated as of
April 15, 1999 executed by Holdings in favor of Agent, on behalf of itself and
Lenders.
"HOLDINGS INTELLECTUAL PROPERTY SECURITY AGREEMENT" shall mean the
Intellectual Property Security Agreement dated as of April 15, 1999 entered into
between Agent, on behalf of itself and Lenders, and Holdings.
"HOLDINGS NOTE" shall mean the $5,000,000 promissory note from
Holdings to Borrower dated April 15, 1999.
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"HOLDINGS PLEDGE AGREEMENT" shall mean the Pledge Agreement dated
as of April 15, 1999 entered into between Agent, on behalf of itself and
Lenders, and Holdings.
"HOLDINGS SECURITY AGREEMENT" shall mean the Security Agreement
dated as of April 15, 1999 entered into between Agent, on behalf of itself and
Lenders, and Holdings, as amended by that certain First Amendment to Holdings
Security Agreement dated September 29, 2001.
"INDEBTEDNESS" of any Person shall mean without duplication (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property payment for which is deferred six (6) months or more, but
excluding obligations to trade creditors incurred in the ordinary course of
business that are not overdue by more than six (6) months unless being contested
in good faith, (b) all reimbursement and other obligations with respect to
letters of credit, bankers' acceptances and surety bonds, whether or not
matured, (c) all obligations evidenced by notes, bonds, debentures or similar
instruments, (d) all indebtedness 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), (e) all Capital Lease Obligations and the present value (discounted
at the Index Rate as in effect on the Closing Date) of future rental payments
under all synthetic leases, (f) all obligations of such Person under commodity
purchase or option agreements or other commodity price hedging arrangements, in
each case whether contingent or matured, (g) all obligations of such Person
under any foreign exchange contract, currency swap agreement, interest rate
swap, cap or collar agreement or other similar agreement or arrangement designed
to alter the risks of that Person arising from fluctuations in currency values
or interest rates, in each case whether contingent or matured, (h) all
Indebtedness referred to 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 or other assets (including accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness, and (i) the Obligations.
"INDEMNIFIED LIABILITIES" shall have the meaning assigned to it in
SECTION 1.13.
"INDEX RATE" shall mean, for any day, a floating rate equal to the
higher of (i) the rate publicly quoted from time to time by THE WALL STREET
JOURNAL as the "base rate on corporate loans at large U.S. money center
commercial banks" (or, if THE WALL STREET JOURNAL ceases quoting a base rate of
the type described, the highest per annum rate of interest published by the
Federal Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the Bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus fifty (50) basis points per annum. Each
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change in any interest rate provided for in the Agreement based upon the Index
Rate shall take effect at the time of such change in the Index Rate.
"INDEX RATE LOAN" shall mean a Loan or portion thereof bearing
interest by reference to the Index Rate.
"INSTRUMENTS" means all "instruments," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, wherever located,
and, in any event, including all certificated securities, all certificates of
deposit, and all promissory notes and other evidences of indebtedness, other
than instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.
"INTELLECTUAL PROPERTY" shall mean any and all Licenses, Patents,
Copyrights, Trademarks, trade secrets and customer lists.
"INTELLECTUAL PROPERTY SECURITY AGREEMENTS" shall mean,
collectively, the Holdings Intellectual Property Security Agreement, MCP
Intellectual Property Security Agreement and IRB Subsidiary Intellectual
Property Security Agreement in each case made in favor of Agent, on behalf of
itself and Lenders, by each applicable Credit Party.
"INTEREST EXPENSE" shall mean, with respect to any Person for any
fiscal period, interest expense (whether cash or non-cash) of such Person
determined in accordance with GAAP for the relevant period ended on such date,
including, in any event, interest expense with respect to any Funded Debt of
such Person and interest expense for the relevant period that has been
capitalized on the balance sheet of such Person.
"INTEREST PAYMENT DATE" means as to any Index Rate Loan, the first
Business Day of each month to occur while such Loan is outstanding; PROVIDED
that in addition to the foregoing, each of (x) the date upon which all of the
Commitments have been terminated and the Loans have been paid in full and (y)
the Commitment Termination Date shall be deemed to be an "Interest Payment Date"
with respect to any interest which is then accrued under the Agreement.
"INTERIM ORDER" means, collectively, the order of the Bankruptcy
Court entered in the Chapter 11 Case after an interim hearing (assuming
satisfaction of the standards prescribed in Section 364 of the Bankruptcy Code
and Bankruptcy Rule 4001 and other applicable law), together with all
extensions, modifications, and amendments thereto, in form and substance
satisfactory to Agent, which, among other matters but not by way of limitation,
authorizes, on an interim basis, Borrower to execute and perform under the terms
of this Agreement and the other Loan Documents, substantially in the form of
EXHIBIT A-1.
"INVENTORY" means all "inventory," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located, and
in any event
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including inventory, merchandise, goods and other personal property that are
held by or on behalf of any Credit Party for sale or lease or are furnished or
are to be furnished under a contract of service, or that constitute raw
materials, work in process, finished goods, returned goods, or materials or
supplies of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all supplies
and embedded software.
"INVESTMENT PROPERTY" means all "investment property" as such term
is defined in the Code now owned or hereafter acquired by any Credit Party,
wherever located, including (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of any Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts of any Credit Party;
(iv) all commodity contracts of any Credit Party; and (v) all commodity accounts
held by any Credit Party.
"IRB ASSIGNMENT DOCUMENTS" shall mean the documentation pursuant to
which (i) Seller assigns its rights and obligations under the IRB Lease
Agreement to Borrower and Borrower assumes such rights and obligations and (ii)
the Lebanon IRBs are transferred by an Affiliate of Seller to IRB Subsidiary.
"IRB INDENTURE" shall mean the Trust Indenture dated as of December
1, 1994 by and among the City of Lebanon, Kentucky, a city and political
subdivision of the Commonwealth of Kentucky, and Star Bank, N.A., Kentucky,
Lebanon, Kentucky (acting through the Corporate Trust Department of Star Bank,
National Association, in Cincinnati, Ohio), as Trustee, and as Paying Agent and
Bond Register.
"IRB LEASE AGREEMENT" shall mean the Lease Agreement dated as of
December 1, 1994, between the City of Lebanon, Kentucky, a city and political
subdivision of the Commonwealth of Kentucky, and Borrower, as assignee of Seller
thereunder pursuant to the terms of the IRB Assignment Documents.
"IRB SUBSIDIARY" shall mean Xxxxxx Lebanon Kentucky IBRB, LLC, a
Delaware limited liability company, as debtor and debtor-in-possession, and a
wholly-owned domestic Subsidiary of MCP which shall be the holder of the Lebanon
IRBs.
"IRB SUBSIDIARY GUARANTY" shall mean the Subsidiary Guaranty dated
as of April 15, 1999 executed by each Subsidiary of Borrower in favor of Agent,
on behalf of itself and Lenders.
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"IRB SUBSIDIARY PLEDGE AGREEMENT" shall mean the IRB Subsidiary
Pledge Agreement dated as of April 15, 1999 entered into by Agent, on behalf of
itself and Lenders, and the IRB Subsidiary.
"IRB SUBSIDIARY INTELLECTUAL PROPERTY SECURITY AGREEMENT" shall
mean the Intellectual Property Security Agreement dated as of April 15, 1999
entered into among Agent, on behalf of itself and Lenders, the IRB Subsidiary
and each other Credit Party party thereto.
"IRB SUBSIDIARY SECURITY AGREEMENT" shall mean the Security
Agreement dated as of April 15, 1999 entered into among Agent, on behalf of
itself and Lenders, the IRB Subsidiary and each other Credit Party party
thereto, as amended by that certain First Amendment to Security Agreement dated
September 29, 2001.
"IRC" shall mean the Internal Revenue Code of 1986, as amended, and
any successor thereto.
"IRS" shall mean the Internal Revenue Service, or any successor
thereto.
"L/C ISSUER" shall have the meaning assigned to such term in ANNEX
B.
"LEBANON IRBs" shall mean the industrial revenue bonds issued in
respect of Borrower's Lebanon, Kentucky location and pursuant to the terms of
the IRB Indenture.
"LENDERS" shall mean GE Capital, the other Lenders named on the
signature page of the Agreement, and, if any such Lender shall decide to assign
all or any portion of the Obligations, such term shall include such assignee.
"LETTERS OF CREDIT" shall mean commercial letters of credit issued
for the account of Borrower by any L/C Issuer for which Agent and Lenders have
incurred Letter of Credit Obligations.
"LETTER OF CREDIT FEE" has the meaning ascribed thereto in ANNEX B.
"LETTER OF CREDIT OBLIGATIONS" shall mean all outstanding
obligations incurred by Agent and Lenders at the request of Borrower, whether
direct or indirect, contingent or otherwise, due or not due, in connection with
the issuance of a reimbursement agreement or guaranty by Agent or purchase of a
participation as set forth in ANNEX B with respect to any Letter of Credit. The
amount of such Letter of Credit Obligations shall equal the maximum amount which
may be payable by Agent or Lenders thereupon or pursuant thereto.
"LETTER-OF-CREDIT RIGHTS" means letter-of-credit rights as such
term is defined in the Code, now owned or hereafter acquired by any Credit
Party, including
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rights to payment or performance under a letter of credit, whether or not such
Credit Party, as beneficiary, has demanded or is entitled to demand payment or
performance.
"LEVERAGE RATIO" means, with respect to Borrower, on a consolidated
basis, the ratio of (a) Funded Debt as of any date of determination, to (b)
EBITDA for the twelve months ending on that date of determination.
"LICENSE" shall mean any Copyright License, Patent License,
Trademark License or other license of rights or interests now held or hereafter
acquired by any Credit Party.
"LIEN" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
under the Code or comparable law of any jurisdiction).
"LITIGATION" shall have the meaning assigned to it in SECTION 3.13.
"LOAN ACCOUNT" shall have the meaning assigned to it in SECTION
1.12.
"LOAN DOCUMENTS" shall mean the Agreement, the Notes, the
Collateral Documents, the Pre-Petition Credit Agreement and all other
agreements, instruments, documents and certificates identified in the Closing
Checklist executed and delivered to, or in favor of, Agent and/or Lenders and
including all other pledges, powers of attorney, consents, assignments,
contracts, notices, and all other written matter whether heretofore, now or
hereafter executed by or on behalf of any Credit Party, or any employee of any
Credit Party, and delivered to Agent or any Lender in connection with the
Agreement or the transactions contemplated hereby, including the Interim Order
and the Final Order. Any reference in the Agreement or any other Loan Document
to a Loan Document shall include all appendices, exhibits or schedules thereto,
and all amendments, restatements, supplements or other modifications thereto,
and shall refer to such Agreement as the same may be in effect at any and all
times such reference becomes operative.
"LOANS" shall mean the Revolving Loan.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
(a) the business, assets, operations, prospects or financial or other condition
of the Credit Parties considered as a whole or, (b) Borrower's ability to pay
any of the Loans or any of the other Obligations in accordance with the terms of
the Agreement, (c) the Collateral or Agent's Liens, on behalf of itself and
Lenders, on the Collateral or the priority of such Liens, or (d) Agent's or any
Lender's rights and remedies under the Agreement and the other Loan Documents.
Without limiting the foregoing, any event or occurrence adverse
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to one or more Credit Parties which results or could reasonably be expected to
result in costs and/or liabilities and/or loss of revenues, individually or in
the aggregate, to any Credit Party in any 30-day period in excess of $1,500,000
as of any date of determination shall be deemed to have had Material Adverse
Effect.
"MAXIMUM AMOUNT" shall mean, at any particular time, an amount
equal to the Revolving Loan Commitment of all Lenders.
"MCP" shall mean Xxxxxx Custom Plastics, LLC, a Delaware limited
liability company, as debtor and debtor-in-possession.
"MCP INTELLECTUAL PROPERTY SECURITY AGREEMENT" shall mean the
Intellectual Property Security Agreement dated as of April 15, 1999 entered into
among Agent, on behalf of itself and Lenders, and MCP.
"MCP PLEDGE AGREEMENT" shall mean the Pledge Agreement dated as of
April 15, 1999 entered into among Agent, on behalf of itself and Lenders, and
MCP.
"MCP SECURITY AGREEMENT" shall mean the Security Agreement dated as
of April 15, 1999 entered into among Agent, on behalf of itself and Lenders, and
Borrower, as amended by that certain First Amendment to Borrower Security
Agreement dated September 29, 2001.
"MIG" shall mean Xxxxxx Industrial Group, Inc., a Georgia
corporation.
"MORTGAGED PROPERTIES" shall have the meaning assigned to it in
ANNEX D.
"MORTGAGES" shall mean each of the mortgages, deeds of trust,
leasehold mortgages, leasehold deeds of trust, collateral assignments of leases
or other real estate security documents previously executed and delivered by any
Credit Party to Agent with respect to the Mortgaged Properties in connection
with the Pre-Petition Credit Agreement, all in form and substance satisfactory
to Agent.
"XXXXXX PLEDGE AGREEMENT" shall mean that certain Pledge Agreement,
dated as of May 14, 2001 by and between Agent and Xxxxxxx X. Xxxxxx.
"XXXXXX GROUP" shall mean MIG or the affiliated group of
corporations or business entities that file a consolidated federal income tax
return or which MIG is a member or common parent.
"MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate
is making, is obligated to make, has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
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"NET WORTH" shall mean, with respect to any Person as of any date
of determination, the book value of the assets of such Person, MINUS (a)
reserves applicable thereto, and MINUS (b) all of such Person's liabilities on a
consolidated basis (including accrued and deferred income taxes), all as
determined in accordance with GAAP.
"NON-FUNDING LENDER" shall have the meaning assigned to it in
Section 9.9(a)(ii).
"NOTES" shall mean the Revolving Notes.
"NOTICE OF REVOLVING CREDIT ADVANCE" shall have the meaning
assigned to it in SECTION 1.1(a).
"OBLIGATIONS" shall mean all loans, advances, debts, liabilities
and obligations, for the performance of covenants, tasks or duties or for
payment of monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any Credit
Party to Agent or any Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement or other instrument, arising under the Agreement or any of
the other Loan Documents. This term includes all principal, interest (including
all interest which accrues after the commencement of any case or proceeding in
bankruptcy (including the Chapter 11 Case) after the insolvency of, or for the
reorganization of any Credit Party, whether or not allowed in such proceeding),
Fees, Charges, expenses, attorneys' fees and any other sum chargeable to any
Credit Party under the Agreement or any of the other Loan Documents.
"PATENT LICENSE" shall mean rights under any written agreement now
owned or hereafter acquired by any Credit Party granting any right with respect
to any invention on which a Patent is in existence.
"PATENTS" shall mean all of the following in which any Credit Party
now holds or hereafter acquires any interest: (a) all letters patent of the
United States or any other country, all registrations and recordings thereof,
and all applications for letters patent of the United States or any other
country, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State or Territory thereof, or any other country, and (b) all
reissues, continuations, continuations-in-part or extensions thereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"PERMITTED ENCUMBRANCES" shall mean the following encumbrances: (a)
Liens for taxes or assessments or other governmental Charges not yet due and
payable; (b) pledges or deposits of money securing statutory obligations under
workmen's compensation, unemployment insurance, social security or public
liability laws or similar
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legislation (excluding Liens under ERISA); (c) pledges or deposits of money
securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which any Credit Party is a party as lessee made in the
ordinary course of business; (d) inchoate and unperfected workers', mechanics'
or similar liens arising in the ordinary course of business, so long as such
Liens attach only to Equipment, Fixtures and/or Real Estate; (e) carriers',
warehousemen's, suppliers' or other similar possessory liens arising in the
ordinary course of business and securing liabilities in an outstanding aggregate
amount not in excess of $50,000 at any time, so long as such Liens attach only
to Inventory; (f) deposits securing, or in lieu of, surety, appeal or customs
bonds in proceedings to which any Credit Party is a party; (g) any attachment or
judgment lien not constituting an Event of Default under SECTION 8.1(j); (h)
zoning restrictions, easements, licenses, or other restrictions on the use of
any Real Estate or other minor irregularities in title (including leasehold
title) thereto, so long as the same do not materially impair the use, value, or
marketability of such Real Estate; (i) presently existing or hereinafter created
Liens in favor of Agent, on behalf of Lenders; and (j) Liens expressly permitted
under CLAUSES (b) and (c) of SECTION 6.7 of the Agreement.
"PERSON" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, public benefit corporation,
other entity or government (whether federal, state, county, city, municipal,
local, foreign, or otherwise, including any instrumentality, division, agency,
body or department thereof).
"PETITION DATE" shall have the meaning assigned to it in the
Recitals to this Agreement.
"PLAN" shall mean, at any time, an employee benefit plan, as
defined in Section 3(3) of ERISA, which any Credit Party maintains, contributes
to or has an obligation to contribute to on behalf of participants who are or
were employed by any Credit Party.
"PLEDGE AGREEMENTS" shall mean, collectively, the Holdings Pledge
Agreement, the MCP Pledge Agreement, the IRB Subsidiary Pledge Agreement, the
Xxxxxx Pledge Agreement, and any pledge agreements entered into after the
Closing Date by any Credit Party (as required by the Agreement or any other Loan
Document).
"PREPETITION INDEBTEDNESS" means all Indebtedness of Borrower
outstanding on the Petition Date immediately prior to the filing of the Chapter
11 Case other than Indebtedness under the Pre-Petition Credit Agreement.
"PRE-PETITION CREDIT AGREEMENT" shall have the meaning assigned to
it in the Recitals to this Agreement.
"PRIOR LENDER OBLIGATIONS" means all obligations of any Credit
Party and any of their Subsidiaries to the Prior Lenders pursuant to the
Pre-Petition Credit
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Agreement, and all instruments and documents executed pursuant thereto or in
connection therewith.
"PRIOR LENDERS" shall mean the lenders under the Pre-Petition
Credit Agreement.
"PROCEEDS" means "proceeds," as such term is defined in the Code,
including (a) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to any Credit Party from time to time with respect to any of
the Collateral, (b) any and all payments (in any form whatsoever) made or due
and payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority), (c) any claim of any Credit Party against
third parties (i) for past, present or future infringement of any Patent or
Patent License, or (ii) for past, present or future infringement or dilution of
any Copyright, Copyright License, Trademark or Trademark License, or for injury
to the goodwill associated with any Trademark or Trademark License, (d) any
recoveries by any Credit Party against third parties with respect to any
litigation or dispute concerning any of the Collateral including claims arising
out of the loss or nonconformity of, interference with the use of, defects in,
or infringement of rights in, or damage to, Collateral, (e) all amounts
collected on, or distributed on account of, other Collateral, including
dividends, interest, distributions and Instruments with respect to Investment
Property and pledged Stock, and (f) any and all other amounts, rights to payment
or other property acquired upon the sale, lease, license, exchange or other
disposition of Collateral and all rights arising out of Collateral.
"PROJECTIONS" means Borrower's forecasted consolidated: (a) balance
sheets; (b) profit and loss statements; (c) cash flow statements; and (d)
capitalization statements, all prepared on a Subsidiary by Subsidiary or
division by division basis, if applicable, together with appropriate supporting
details and a statement of underlying assumptions.
"PRO RATA SHARE" shall mean with respect to all matters relating to
any Lender (a) with respect to the Revolving Loan, the percentage obtained by
dividing (i) the Revolving Loan Commitment by (ii) the aggregate Revolving Loan
Commitments, (b) with respect to all Loans, the percentage obtained by dividing
(i) the aggregate Commitments of that Lender by (ii) the aggregate Commitments
of all Lenders, and (d) with respect to all Loans on and after the Commitment
Termination Date, the percentage obtained by dividing (i) the aggregate
outstanding principal balance of the Loans held by that Lender, by (ii) the
outstanding principal balance of the Loans held by all Lenders.
"QUALIFIED PLAN" shall mean a Plan which is intended to be
tax-qualified under Section 401(a) of the IRC.
"REAL ESTATE" shall have the meaning assigned to it in SECTION 3.6.
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"RELEASE" shall mean any release, threatened release, spill,
emission, leaking, pumping, pouring, emitting, emptying, escape, injection,
deposit, disposal, discharge, dispersal, dumping, leaching or migration of
Hazardous Material in the indoor or outdoor environment, including the movement
of Hazardous Material through or in the air, soil, surface water, ground water
or property.
"REQUISITE LENDERS" shall mean (a) Lenders having more than
sixty-six and two-thirds percent (66 2/3%) of the Commitments of all Lenders, or
(b) if the Commitments have been terminated, more than sixty-six and two-thirds
percent (66 2/3%) of the aggregate outstanding amount of all Loans.
"REQUISITE REVOLVING LENDERS" shall mean (a) Lenders having more
than sixty-six and two-thirds percent (66 2/3%) of the Revolving Loan
Commitments of all Lenders, or (b) if the Revolving Loan Commitments have been
terminated, more than sixty-six and two-thirds percent (66 2/3%) of the
aggregate outstanding amount of the Revolving Loan.
"RESERVES" shall mean, with respect to the Revolving Borrowing Base
(a) reserves established by Agent from time to time against Eligible Inventory
pursuant to SECTION 5.9, (b) reserves established pursuant to SECTION 5.4(c) and
(c) such other reserves against Eligible Accounts, Eligible Inventory, the
Revolving Borrowing Base, the Maximum Amount and/or Borrowing Availability which
Agent may, in its reasonable credit judgment, establish from time to time.
Without limiting the generality of the foregoing, Reserves established (i) to
ensure the payment of accrued Interest Expense or Indebtedness, (ii) because
Agent is not satisfied with its Collateral position, as determined in its sole
discretion, with respect to Borrower's assets, including Borrower's interest in
Equipment and Real Estate, located at Borrower's Lebanon Kentucky facility, or
(iii) with respect to unpaid taxes or contingent liabilities relating to
litigation claims (including preference actions), shall in each case be deemed
to be a reasonable exercise of Agent's credit judgment.
"RESTRICTED PAYMENT" shall mean (a) the declaration or payment of
any dividend or the incurrence of any liability to make any other payment or
distribution of cash or other property or assets in respect of a Person's Stock,
(b) any payment on account of the purchase, redemption, defeasance, sinking fund
or other retirement of a Person's Stock or any other payment or distribution
made in respect thereof, either directly or indirectly, (c) any payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire Stock of such Person
now or hereafter outstanding; (d) any payment of a claim for the rescission of
the purchase or sale of, or for material damages arising from the purchase or
sale of, any shares of such Person's Stock or of a claim for reimbursement,
indemnification or contribution arising out of or related to any such claim for
damages or rescission; (e) any payment, loan, contribution, or other transfer of
funds or other property to any Stockholder of such Person other than payment of
compensation in the
A-23
ordinary course to stockholders who are employees of such Person; and (f) any
payment of management fees (or other fees of a similar nature) by such Person to
any Stockholder of such Person or their Affiliates.
"RETIREE WELFARE PLAN" shall mean, at any time, a Plan that is a
"welfare plan" as defined in Section 3(2) of ERISA, that provides for continuing
coverage or benefits for any participant or any beneficiary of a participant
after such participant's termination of employment, other than continuation
coverage provided pursuant to Section 4980B of the IRC and at the sole expense
of the participant or the beneficiary of the participant.
"REVOLVING BORROWING BASE" shall mean, as of any date of
determination by Agent, from time to time, an amount equal to the sum at such
time of:
(a) up to eighty-five percent (85%) of the book value of
Borrower's Eligible Accounts, less any Reserves established by Agent at
such time;
(b) up to sixty percent (60%) of the book value of Borrower's
Eligible Inventory (other than work-in-process Inventory) valued on a
first-in, first-out basis (at the lower of cost or market), less any
Reserves established by Agent at such time; and
(c) up to twenty percent (20%) of the book value of Borrower's
Eligible Inventory consisting of work-in-process Inventory valued on a
first-in, first-out basis (at the lower of cost or market), less any
Reserves established by Agent at such time.
"REVOLVING BORROWING BASE CERTIFICATE" shall mean a certificate to
be executed and delivered from time to time by Borrower in the form attached to
the Agreement as EXHIBIT 4.1(b)(i).
"REVOLVING CREDIT ADVANCE" shall have the meaning assigned to it in
SECTION 1.1(a)(i).
"REVOLVING LENDERS" shall mean, as of any date of determination,
Lenders having a Revolving Loan Commitment.
"REVOLVING LOAN" shall mean, at any time, the sum of (i) the
aggregate amount of Revolving Credit Advances outstanding to Borrower, plus (ii)
the aggregate Letter of Credit Obligations incurred on behalf of Borrower.
Unless the context otherwise requires, references to the outstanding principal
balance of the Revolving Loan shall include the outstanding balance of Letter of
Credit Obligations.
"REVOLVING LOAN COMMITMENT" shall mean (a) as to any Lender, the
aggregate commitment of such Lender to make Revolving Credit Advances and/or
incur
A-24
Letter of Credit Obligations as set forth on ANNEX J to the Agreement or in the
most recent
Assignment Agreement executed by such Lender and (b) as to all
Lenders, the aggregate commitment of all Lenders to make Revolving Credit
Advances and/or incur Letter of Credit Obligations, which aggregate commitment
shall be $2,500,000 on the Closing Date, as such amount may be adjusted, if at
all, from time to time in accordance with the Agreement.
"REVOLVING NOTE" shall have the meaning assigned to it in SECTION
1.1(a)(ii).
"SCHEDULED MATURITY DATE" shall mean July 31, 2003.
"SECURITY AGREEMENTS" shall mean, collectively, the Holdings
Security Agreement, Borrower Security Agreement and Subsidiary Security
Agreement, in each case of even date herewith entered into among Agent, on
behalf of itself and Lenders, and each Credit Party that is a signatory thereto.
"SELLER" shall mean Worthington Custom Plastics, Inc., an Ohio
corporation.
"SENIOR CLAIMS" shall mean (a) Permitted Encumbrances and (b) at
the election of the Prior Lenders, Prior Lenders' valid, perfected and
unavoidable prepetition liens created in connection with the Pre-Petition Credit
Agreement.
"SOFTWARE" means all "software" as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, other than software
embedded in any category of goods, including all computer programs and all
supporting information provided in connection with a transaction related to any
program.
"STOCK" shall mean all shares, options, warrants, membership
interests, general or limited partnership interests or other equivalents
(regardless of how designated) of or in a corporation, partnership or equivalent
entity whether voting or nonvoting, including common stock, preferred stock or
any other "equity security" (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended).
"SUBSIDIARY" shall mean, with respect to any Person, (a) any
corporation of which an aggregate of more than fifty percent (50%) of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors of such corporation (irrespective of whether, at the time, Stock of
any other class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time, directly or
indirectly, owned legally or beneficially by such Person and/or one or more
Subsidiaries of such Person, or with respect to which any such Person has the
right to vote or designate the vote of fifty percent (50%) or more of such
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Stock whether by proxy, agreement, operation of law or otherwise, and (b) any
partnership or limited liability company in which such Person and/or one or more
Subsidiaries of such Person shall have an interest (whether in the form of
voting or participation in profits or capital contribution) of more than fifty
percent (50%) or of which any such Person is a general partner or may exercise
the powers of a general partner.
"SUPPORTING OBLIGATIONS" means all supporting obligations as such
term is defined in the Code, including letters of credit and guaranties issued
in support of Accounts, Chattel Paper, Documents, General Intangibles,
Instruments, or Investment Property.
"TANGIBLE NET WORTH" shall mean, with respect to any Person at any
date, the Net Worth of such Person at such date, EXCLUDING, HOWEVER, from the
determination of the total assets at such date, (a) all goodwill, capitalized
organizational expenses, capitalized research and development expenses,
trademarks, trade names, copyrights, patents, patent applications, licenses and
rights in any thereof, and other intangible items, (b) all unamortized debt
discount and expense, (c) treasury Stock, and (d) any write-up in the book value
of any asset resulting from a revaluation thereof.
"TAX ASSETS" has the meaning assigned to it in SECTION 6.14.
"TAX RETURNS" has the meaning assigned to it in SECTION 3.11.
"TAX SHARING AGREEMENT" shall mean the Tax Sharing Agreement dated
as of April 15, 1999 by and among MIG and Holdings.
"TAXES" shall mean taxes, levies, imposts, deductions, Charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on or measured by the net income of Agent or a Lender by the jurisdictions under
the laws of which Agent and Lenders are organized or any political subdivision
thereof or by the jurisdiction of any lending office of any Lender used to make
Loans hereunder unless the connection with such lending office jurisdiction
arises solely from any Lender having executed, delivered or performed its
obligations or receive a payment under, or enforced the Agreement or the Notes.
"TERM LOAN A" has the meaning assigned to it in SECTION 1.1(b)(i)
of the Pre-Petition Credit Agreement.
"TERM LOAN B" has the meaning assigned to it in SECTION 1.1(c)(i)
of the Pre-Petition Credit Agreement.
"TERM LOAN C" has the meaning assigned to it in SECTION 1.1(d)(i)
of the Pre-Petition Credit Agreement.
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"TERMINATION DATE" shall mean the date on which the Loans have been
indefeasibly repaid in full and all other Obligations under the Agreement and
the other Loan Documents have been completely discharged and Letter of Credit
Obligations have been cash collateralized, canceled or backed by stand-by
letters of credit in accordance with ANNEX B, and Borrower shall have no further
right to borrow any monies under the Agreement.
"THIRD PARTY INTERACTIVES" shall mean all Persons with whom any
Credit Party exchanges data electronically in the ordinary course of business,
including, without limitation, customers, suppliers, third-party vendors,
subcontractors, processors-converters, shippers and warehousemen.
"TITLE IV PLAN" shall mean an employee pension benefit plan, as
defined in Section 3 (2) of ERISA (other than a Multiemployer Plan), which is
covered by Title IV of ERISA, and which any Credit Party or ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.
"TRADEMARK LICENSE" shall mean rights under any written agreement
now owned or hereafter acquired by any Credit Party granting any right to use
any Trademark.
"TRADEMARKS" shall mean all of the following now owned or hereafter
acquired by any Credit Party: (a) all trademarks, trade names, corporate or
limited liability company names, business names, trade styles, service marks,
logos, other source or business identifiers, prints and labels on which any of
the foregoing have appeared or appear, designs and general intangibles of like
nature (whether registered or unregistered), now owned or existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state or territory thereof, or any
other country or any political subdivision thereof; (b) all reissues, extensions
or renewals thereof; and (c) all goodwill associated with or symbolized by any
of the foregoing.
"UNFUNDED PENSION LIABILITY" shall mean, at any time, the aggregate
amount, if any, of the sum of (a) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions for funding purposes in effect
under such Title IV Plan, and (b) for a period of five (5) years following a
transaction which might reasonably be expected to be covered by Section 4069 of
ERISA, the liabilities (whether or not accrued) that could be avoided by any
Credit Party or any ERISA Affiliate as a result of such transaction.
A-27
"UNIFORM COMMERCIAL CODE JURISDICTION" means any jurisdiction that
has adopted all or substantially all of Article 9 as contained in the 2000
Official Text of the Uniform Commercial Code, as recommended by the National
Conference of Commissioners on Uniform State Laws and the American Law
Institute, together with any subsequent amendments or modifications to the
Official Text."
"WARN ACT" means the Worker Adjustment and Retraining Act, as
amended.
"WARRANT HOLDER AGREEMENT" shall have the meaning ascribed to such
term in the Pre-Petition Credit Agreement.
"XXXXXXX" shall mean Xxxxxxx, Inc., a Delaware corporation.
"XXXXXXX ACQUISITION" shall mean the Bankruptcy Court approved
acquisition, pursuant to Section 363 of the Bankruptcy Code, of all or
substantially all of the assets of Borrower pursuant to the Xxxxxxx Acquisition
Agreement or an agreement in substantially similar form whether executed by
Xxxxxxx or any other person or entity.
"XXXXXXX ACQUISITION AGREEMENT" shall mean the Asset Purchase
Agreement, dated [November ___, 2002], by and between MCP and Xxxxxxx.
"WORTHINGTON" shall mean the portion of the Seller's business
consisting of substantially all of the assets of Seller's non-automotive
plastics operations located at Seller's Harrisburg and Concord, North Carolina,
St. Xxxxxxxx, South Carolina and Lebanon, Kentucky facilities.
"WORTHINGTON ACQUISITION" shall mean the acquisition of all or
substantially all of the assets of Worthington pursuant to the Worthington
Acquisition Agreement.
"WORTHINGTON ACQUISITION AGREEMENT" shall mean the Asset Purchase
Agreement, dated February 26, 1999, by and between Seller, MIG and Xxxxxx Custom
Plastics, Inc., as amended by that certain First Amendment to Asset Purchase
Agreement dated February 26, 1999 by and among Seller, MIG and Xxxxxx Custom
Plastics, Inc.
"WORTHINGTON LITIGATION" shall mean that certain case titled
Worthington Industries, Inc. and W.I. Products, Inc., f/k/a Worthington Custom
Plastics, Inc., Plaintiffs x. Xxxxxx Industrial Group, Inc. and Xxxxxx Custom
Plastics, Inc., Defendants (S.D. Ohio, Case No. C2-00-504) and all claims and
counterclaims that have been or could be brought in the future with respect to
such case.
All other undefined terms contained in any of the Loan Documents
shall, unless the context indicates otherwise, have the meanings provided for by
the Code as in effect in the State of New York to the extent the same are used
or defined therein. Unless
A-28
otherwise specified, references in the Agreement or any of the Appendices to a
Section, subsection or clause refer to such Section, subsection or clause as
contained in the Agreement. The words "herein," "hereof" and "hereunder" and
other words of similar import refer to the Agreement as a whole, including all
Annexes, Exhibits and Schedules, as the same may from time to time be amended,
restated, modified or supplemented, and not to any particular section,
subsection or clause contained in the Agreement or any such Annex, Exhibit or
Schedule.
Wherever from the context it appears appropriate, each term stated
in either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation";
references to Persons include their respective successors and assigns (to the
extent and only to the extent permitted by the Loan Documents) or, in the case
of governmental Persons, Persons succeeding to the relevant functions of such
Persons; and all references to statutes and related regulations shall include
any amendments of the same and any successor statutes and regulations. Whenever
any provision in any Loan Document refers to the knowledge (or an analogous
phrase) of any Credit Party, such words are intended to signify that such Credit
Party has actual knowledge or awareness of a particular fact or circumstance or
that such Credit Party, if it had exercised reasonable diligence, would have
known or been aware of such fact or circumstance.
A-29
ANNEX B (SECTION 1.2)
TO
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) ISSUANCE. Subject to the terms and conditions of the
Agreement, Agent and Revolving Lenders agree to incur, from time to time from
and after the date hereof and prior to the Commitment Termination Date, upon the
request of Borrower and for Borrower's account, Letter of Credit Obligations by
causing Letters of Credit to be issued (by a bank or other legally authorized
Person selected by or acceptable to Agent in its sole discretion (each, an "L/C
ISSUER")) for Borrower's account and guaranteed by Agent; PROVIDED, HOWEVER,
that if the L/C Issuer is a Revolving Lender, then such Letters of Credit shall
not be guaranteed by Agent but rather each Revolving Lender shall, subject to
the terms and conditions hereinafter set forth, purchase (or be deemed to have
purchased) risk participations in all such Letters of Credit issued with the
written consent of Agent, as more fully described in paragraph (b)(ii) below.
The aggregate amount of all such Letter of Credit Obligations shall not at any
time exceed the least of (i) $250,000 (the "L/C SUBLIMIT"), and (ii) the Maximum
Amount LESS the aggregate outstanding principal balance of the Revolving Credit
Advances. No such Letter of Credit shall have an expiry date which is more than
one year following the date of issuance thereof, and neither Agent nor Revolving
Lenders shall be under any obligation to incur Letter of Credit Obligations in
respect of, or purchase risk participations in, any Letter of Credit having an
expiry date which is later than the Commitment Termination Date. All letters of
credit issued under the Pre-Petition Credit Agreement shall be deemed to have
been issued under such Agreement and shall for all purposes constitute "Letters
of Credit" thereunder (provided that no additional issuance fees shall be
applicable in respect of such Letters of Credit) and that such Letters of Credit
shall not apply towards calculation of the L/C Sublimit unless and until such
Letters of Credit are renewed or re-issued.
(b) (i) ADVANCES AUTOMATIC; PARTICIPATIONS. In the event that Agent or
any Revolving Lender shall make any payment on or pursuant to any Letter of
Credit Obligation, such payment shall then be deemed automatically to constitute
a Revolving Credit Advance (which would extinguish the corresponding Letter of
Credit Obligations) to Borrower under SECTION 1.1(a) of the Agreement regardless
of whether a Default or Event of Default shall have occurred and be continuing
and notwithstanding Borrower's failure to satisfy the conditions precedent set
forth in SECTION 2, and each Revolving Lender shall be obligated to pay its Pro
Rata Share thereof in accordance with the Agreement. The failure of any
Revolving Lender to make available to Agent for Agent's own account its Pro Rata
Share of any such Revolving Credit Advance or payment by Agent under or in
respect of a Letter of Credit shall not relieve any other Revolving Lender of
its obligation hereunder to make available to Agent its Pro Rata Share thereof,
but no Revolving Lender shall be responsible for the failure of any other
Revolving Lender to make available such other Revolving Lender's Pro Rata Share
of any such payment.
B-1
(ii) If it shall be illegal or unlawful for Borrower to incur
Revolving Credit Advances as contemplated by paragraph (b)(i) above because of
an Event of Default or otherwise or if it shall be illegal or unlawful for any
Revolving Lender to be deemed to have assumed a ratable share of the
reimbursement obligations owed to an L/C Issuer, or if the L/C Issuer is a
Revolving Lender, then (i) immediately and without further action whatsoever,
each Revolving Lender shall be deemed to have irrevocably and unconditionally
purchased from Agent (or such L/C Issuer, as the case may be) an undivided
interest and participation equal to such Revolving Lender's Pro Rata Share
(based on the Revolving Loan Commitments) of the Letter of Credit Obligations in
respect of all Letters of Credit then outstanding and (ii) thereafter,
immediately upon issuance of any Letter of Credit, each Revolving Lender shall
be deemed to have irrevocably and unconditionally purchased from Agent (or such
L/C Issuer, as the case may be) an undivided interest and participation in such
Revolving Lender's Pro Rata Share (based on the Revolving Loan Commitments) of
the Letter of Credit Obligations with respect to such Letter of Credit on the
date of such issuance. Each Revolving Lender shall fund its participation in all
payments or disbursements made under the Letters of Credit in the same manner as
provided in the Agreement with respect to Revolving Credit Advances.
(c) CASH COLLATERAL. If Borrower is required to provide cash
collateral for any Letter of Credit Obligations pursuant to the Agreement prior
to the Commitment Termination Date, Borrower will pay to Agent for the benefit
of Revolving Lenders cash or cash equivalents acceptable to Agent ("CASH
EQUIVALENTS") in an amount equal to 105% of the maximum amount then available to
be drawn under each applicable Letter of Credit outstanding for the benefit of
Borrower. Such funds or Cash Equivalents shall be held by Agent in a cash
collateral account (the "CASH COLLATERAL ACCOUNT") maintained at a bank or
financial institution acceptable to Agent. The Cash Collateral Account shall be
in the name of Borrower and shall be pledged to, and subject to the control of,
Agent, for the benefit of Agent and Lenders, in a manner satisfactory to Agent.
Borrower hereby pledges and grants to Agent, on behalf of Lenders, a security
interest in all such funds and Cash Equivalents held in the Cash Collateral
Account from time to time and all proceeds thereof, as security for the payment
of all amounts due in respect of the Letter of Credit Obligations and other
Obligations, whether or not then due.
If any Letter of Credit Obligations, whether or not then due and
payable, shall for any reason be outstanding on the Commitment Termination Date,
Borrower shall either (i) provide cash collateral therefor in the manner
described above, or (ii) cause all such Letters of Credit and guaranties thereof
to be canceled and returned, or (iii) deliver a stand-by letter (or letters) of
credit in guaranty of such Letter of Credit Obligations, which stand-by letter
(or letters) of credit shall be of like tenor and duration (plus thirty (30)
additional days) as, and in an amount equal to 105% of, the aggregate maximum
amount then available to be drawn under, the Letters of Credit to which such
outstanding Letter of Credit Obligations relate and shall be issued by a Person,
and shall
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be subject to such terms and conditions, as are be satisfactory to Agent in its
sole discretion.
From time to time after funds are deposited in the Cash Collateral
Account by Borrower, whether before or after the Commitment Termination Date,
Agent may apply such funds or Cash Equivalents then held in the Cash Collateral
Account to the payment of any amounts, in such order as Agent may elect, as
shall be or shall become due and payable by Borrower to Lenders with respect to
such Letter of Credit Obligations of Borrower and, upon the satisfaction in full
of all Letter of Credit Obligations of Borrower, to any other Obligations of
Borrower then due and payable.
Neither Borrower nor any Person claiming on behalf of or through
Borrower shall have any right to withdraw any of the funds or Cash Equivalents
held in the Cash Collateral Account, except that upon the termination of all
Letter of Credit Obligations and the payment of all amounts payable by Borrower
to Lenders in respect thereof, any funds remaining in the Cash Collateral
Account shall be applied to other Obligations when due and owing and upon
payment in full of such Obligations, any remaining amount shall be paid to
Borrower or as otherwise required by law.
(d) FEES AND EXPENSES. Borrower agrees to pay to Agent for the
benefit of Revolving Lenders, as compensation to such Lenders for Letter of
Credit Obligations incurred hereunder, (x) all costs and expenses incurred by
Agent or any Lender on account of such Letter of Credit Obligations, and (y) for
each month during which any Letter of Credit Obligation shall remain
outstanding, a fee (the "LETTER OF CREDIT FEE") in an amount equal to the Index
Rate plus 1.5% per annum multiplied by the maximum amount available from time to
time to be drawn under the applicable Letter of Credit. Such fee shall be paid
to Agent for the benefit of the Revolving Lenders in arrears, on the first day
of each month. In addition, Borrower shall pay to any L/C Issuer, on demand,
such fees (including all per annum fees), charges and expenses of such L/C
Issuer in respect of the issuance, negotiation, acceptance, amendment, transfer
and payment of such Letter of Credit or otherwise payable pursuant to the
application and related documentation under which such Letter of Credit is
issued.
(e) REQUEST FOR INCURRENCE OF LETTER OF CREDIT OBLIGATIONS.
Borrower shall give Agent at least two (2) Business Days prior written notice
requesting the incurrence of any Letter of Credit Obligation, specifying the
date such Letter of Credit Obligation is to be incurred, identifying the
beneficiary and Borrower to which such Letter of Credit Obligation relates and
describing the nature of the transactions proposed to be supported thereby. The
notice shall be accompanied by the form of the Letter of Credit (which shall be
acceptable to the L/C Issuer) to be guarantied and, to the extent not previously
delivered to Agent, copies of all agreements between Borrower and the L/C Issuer
pertaining to the issuance of Letters of Credit. Notwithstanding anything
contained herein to the contrary, Letter of Credit applications by Borrower and
approvals by Agent and the L/C Issuer may be made and transmitted pursuant to
electronic codes
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and security measures mutually agreed upon and established by and among
Borrower, Agent and the L/C Issuer.
(f) OBLIGATION ABSOLUTE. The obligation of Borrower to reimburse
Agent and Revolving Lenders for payments made with respect to any Letter of
Credit Obligation shall be absolute, unconditional and irrevocable, without
necessity of presentment, demand, protest or other formalities, and the
obligations of each Revolving Lender to make payments to Agent with respect to
Letters of Credit shall be unconditional and irrevocable. Such obligations of
Borrower and Revolving Lenders shall be paid strictly in accordance with the
terms hereof under all circumstances including the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit or the Agreement or the other Loan Documents or any other agreement;
(ii) the existence of any claim, set-off, defense or other right
which Borrower or any of their respective Affiliates or any Lender may at
any time have against a beneficiary or any transferee of any Letter of
Credit (or any Persons or entities for whom any such transferee may be
acting), Agent, any Lender, or any other Person, whether in connection with
the Agreement, the Letter of Credit, the transactions contemplated herein
or therein or any unrelated transaction (including any underlying
transaction between Borrower or any of their respective Affiliates and the
beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(iv) payment by Agent (except as otherwise expressly provided in
paragraph (g)(ii)(C) below) or any L/C Issuer under any Letter of Credit or
guaranty thereof against presentation of a demand, draft or certificate or
other document which does not comply with the terms of such Letter of
Credit or such guaranty;
(v) any other circumstance or happening whatsoever, which is
similar to any of the foregoing; or
(vi) the fact that a Default or an Event of Default shall have
occurred and be continuing.
(g) INDEMNIFICATION; NATURE OF LENDERS' DUTIES. (i) In addition to
amounts payable as elsewhere provided in the Agreement, Borrower hereby agrees
to pay and to protect, indemnify, and save harmless Agent and each Lender from
and against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including attorneys' fees and allocated costs of internal
counsel) which Agent or any
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Lender may incur or be subject to as a consequence, direct or indirect, of (A)
the issuance of any Letter of Credit or guaranty thereof, or (B) the failure of
Agent or any Lender seeking indemnification or of any L/C Issuer to honor a
demand for payment under any Letter of Credit or guaranty thereof as a result of
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or Governmental Authority, in each case other than
to the extent solely as a result of the gross negligence or willful misconduct
of Agent or such Lender (as finally determined by a court of competent
jurisdiction).
(ii) As between Agent and any Lender and Borrower, Borrower
assumes all risks of the acts and omissions of, or misuse of any Letter of
Credit by beneficiaries of any Letter of Credit. In furtherance and not in
limitation of the foregoing, to the fullest extent permitted by law neither
Agent nor any Lender shall be responsible: (A) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document issued by any
party in connection with the application for and issuance of any Letter of
Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (C) for failure of the beneficiary of any Letter of
Credit to comply fully with conditions required in order to demand payment under
such Letter of Credit; PROVIDED that, in the case of any payment by Agent under
any Letter of Credit or guaranty thereof, Agent shall be liable to the extent
such payment was made solely as a result of its gross negligence or willful
misconduct (as finally determined by a court of competent jurisdiction) in
determining that the demand for payment under such Letter of Credit or guaranty
thereof complies on its face with any applicable requirements for a demand for
payment under such Letter of Credit or guaranty thereof; (D) for errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher;
(E) for errors in interpretation of technical terms; (F) for any loss or delay
in the transmission or otherwise of any document required in order to make a
payment under any Letter of Credit or guaranty thereof or of the proceeds
thereof; (G) for the credit of the proceeds of any drawing under any Letter of
Credit or guaranty thereof; and (H) for any consequences arising from causes
beyond the control of Agent or any Lender. None of the above shall affect,
impair, or prevent the vesting of any of Agent's or any Lender's rights or
powers hereunder or under the Agreement.
(iii) Nothing contained herein shall be deemed to limit or to
expand any waivers, covenants or indemnities made by Borrower in favor of any
L/C Issuer in any letter of credit application, reimbursement agreement or
similar document, instrument or agreement between or among Borrower and such L/C
Issuer.
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ANNEX C (SECTION 1.8)
TO
CREDIT AGREEMENT
CASH MANAGEMENT SYSTEMS
Borrower shall, and shall cause its Subsidiaries to, establish and
maintain the Cash Management Systems described below:
(a) On or before the Closing Date (or such later date as Agent
shall consent to in writing) and until the Termination Date, Borrower shall (i)
establish post office lock boxes ("LOCK BOXES") at one or more of the banks set
forth on DISCLOSURE SCHEDULE (3.19), and shall request in writing and otherwise
take such reasonable steps to ensure that all Account Debtors forward payment
directly to such Lock Boxes, and (ii) deposit and cause its Subsidiaries to
deposit or cause to be deposited promptly, and in any event no later than the
first Business Day after the date of receipt thereof, all cash, checks, drafts
or other similar items of payment relating to or constituting payments made in
respect of any and all Collateral ("COLLECTIONS"), including, without
limitation, payments, if any, in respect of the Lebanon IRBs (whether or not
otherwise delivered to a Lock Box) into bank accounts in Borrower's name or any
such Subsidiary's name (collectively, the "BORROWER ACCOUNTS") at banks set
forth on DISCLOSURE SCHEDULE (3.19) (each, a "RELATIONSHIP BANK"); provided that
notwithstanding the foregoing all Collections shall only be deposited into the
Lockboxes and/or the Lockbox Concentration Amount referred to in the immediately
succeeding sentence. Borrower acknowledges and agrees that as of the Closing
Date it has established the following Lock Boxes at Xxxxxx Trust and Savings
Bank: 95379, 95845 and 95396; and all such Lock Boxes are attached to Borrower
Account, account no. 000-000-0, at Xxxxxx Trust and Savings Bank (the "LOCK BOX
CONCENTRATION AMOUNT").
(b) On or before the Closing Date (or such later date as Agent
shall consent to in writing), each Relationship Banks, shall have entered into
tri-party blocked account agreements with Agent, for the benefit of itself and
Lenders, and Borrower and its Subsidiaries, as applicable, in form and substance
acceptable to Agent, which shall become operative on or prior to the Closing
Date. Each such blocked account agreement shall provide, among other things,
that (i) all items of payment deposited in such account and proceeds thereof
deposited in the Collection Account are held by such bank as agent or
bailee-in-possession for Agent, on behalf of Lenders, (ii) the bank executing
such agreement has no rights of setoff or recoupment or any other claim against
such account, as the case may be, other than for payment of its service fees and
other charges directly related to the administration of such account and for
returned checks or other items of payment, and (iii) from and after the Closing
Date with respect to banks at which a Borrower Account is located, such bank
agrees to forward immediately all amounts in Borrower Account to the Collection
Account and to commence the process of daily sweeps from such Borrower Account
into the Collection Account. Borrower shall not,
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and shall not cause or permit any Subsidiary thereof to, accumulate or maintain
cash in disbursement or payroll accounts as of any date of determination in
excess of checks outstanding against such accounts as of that date and amounts
necessary to meet minimum balance requirements.
(c) So long as no Default or Event of Default has occurred and is
continuing, Borrower may amend DISCLOSURE SCHEDULE (3.19) to add or replace a
Relationship Bank, Lock Box or Borrower Account or to replace any Disbursement
Account; PROVIDED, HOWEVER, THAT (i) Agent shall have consented in writing in
advance to the opening of such account or Lock Box with the relevant bank and
(ii) prior to the time of the opening of such account or Lock Box, Borrower
and/or the Subsidiaries thereof, as applicable, and such bank shall have
executed and delivered to Agent a tri-party blocked account agreement, in form
and substance satisfactory to Agent. Borrower shall close any of its accounts
(and establish replacement accounts in accordance with the foregoing sentence)
promptly and in any event within thirty (30) days of notice from Agent that the
creditworthiness of any bank holding an account is no longer acceptable in
Agent's reasonable judgment, or as promptly as practicable and in any event
within sixty (60) days of notice from Agent that the operating performance,
funds transfer and/or availability procedures or performance with respect to
accounts or lockboxes of the bank holding such accounts or Agent's liability
under any tri-party blocked account agreement with such bank is no longer
acceptable in Agent's reasonable judgment.
(d) The Lock Boxes, Borrower Accounts and Disbursement Accounts
(other than any payroll account) shall be cash collateral accounts, with all
cash, checks and other similar items of payment in such accounts securing
payment of the Loans and all other Obligations, and in which Borrower and each
Subsidiary thereof shall have granted a Lien to Agent, on behalf of itself and
Lenders, pursuant to the Security Agreements.
(e) All amounts deposited in the Collection Account shall be
deemed received by Agent in accordance with SECTION 1.10 of the Agreement and
shall be applied (and allocated) by Agent in accordance with SECTION 1.11 of the
Agreement. In no event shall any amount be so applied unless and until such
amount shall have been credited in immediately available funds to the Collection
Account.
(f) Borrower may maintain, in its name, an account (each a
"DISBURSEMENT ACCOUNT" and collectively, the "DISBURSEMENT ACCOUNTS") at a bank
acceptable to Agent into which Agent shall, from time to time, deposit proceeds
of Revolving Credit Advances made to Borrower pursuant to SECTION 1.1 for use by
Borrower solely in accordance with the provisions of SECTION 1.4; provided that
Borrower shall not have a deposit in its checking, controlled disbursement or
xxxxx cash accounts of more than $10,000 in the aggregate for any two
consecutive Business Days or deposit into any such accounts (other than the
xxxxx cash account) more funds than are necessary
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to clear checks and other items of payment which are presented for payment on
such Business Day.
(g) Borrower shall and shall cause its Affiliates, officers,
employees, agents, directors or other Persons acting for or in concert with
Borrower (each a "RELATED PERSON") to (i) hold in trust for Agent, for the
benefit of itself and Lenders, all checks, cash and other items of payment in
respect of amounts owing to Borrower or any of its Subsidiaries received by
Borrower or any such Related Person, and (ii) within one (1) Business Day after
receipt by Borrower or any such Related Person of any such checks, cash or other
items or payment, deposit the same into a Borrower Account of Borrower or
Subsidiary, as applicable. Borrower and each other Credit Party acknowledges and
agrees that all cash, checks or items of payment constituting proceeds of
Collateral are the property of Agent and Lenders. All proceeds of the sale or
other disposition of any Collateral, shall be deposited directly into the
applicable Borrower Accounts
C-3
ANNEX D (SECTION 2.1(a))
TO
CREDIT AGREEMENT
SCHEDULE OF ADDITIONAL CLOSING DOCUMENTS
In addition to, and not in limitation of, the conditions described
in SECTION 2.1 of the Agreement, pursuant to SECTION 2.1(a), the following items
must be received by Agent in form and substance satisfactory to Agent on or
prior to the Closing Date (each capitalized term used but not otherwise defined
herein shall have the meaning ascribed thereto in ANNEX A to the Agreement):
A. APPENDICES. All Appendices to the Agreement, in form and
substance satisfactory to Agent.
B. REVOLVING NOTES. Duly executed originals of the Revolving
Notes for each applicable Lender, dated the Closing Date.
C. SECURITY AGREEMENTS. Copies of each of the Security
Agreements, and all instruments, documents and agreements executed pursuant
thereto.
D. INSURANCE. Satisfactory evidence that the insurance policies
required by SECTIOn 5.4 are in full force and effect, together with appropriate
evidence showing loss payable and/or additional insured clauses or endorsements,
as requested by Agent, in favor of Agent, on behalf of Lenders.
E. SECURITY INTERESTS AND CODE FILINGS.
(1) Evidence satisfactory to Agent that Agent (for the
benefit of itself and Lenders) has (or upon the filing of documents delivered to
Agent on or prior to the Closing Date will have) a valid and perfected first
priority security interest in the Collateral, including (i) such documents duly
executed by each Credit Party (including financing statements under the Code and
other applicable documents under the laws of any jurisdiction with respect to
the perfection of Liens) as Agent may request in order to perfect its security
interests in the Collateral and (ii) copies of Code search reports in such
jurisdictions as Agent reasonably determines listing all effective financing
statements that name any Credit Party as debtor, together with copies of such
financing statements, none of which shall cover the Collateral.
(2) Evidence satisfactory to Agent, including copies, of
all UCC-1 and other financing statements filed in favor of any Credit Party with
respect to each location, if any, at which Inventory may be consigned.
D-1
F. INTELLECTUAL PROPERTY SECURITY AGREEMENTS. Copies of the
Intellectual Property Security Agreements, together with all instruments,
documents and agreements executed pursuant thereto.
G. HOLDINGS GUARANTY. A copy of the Holdings Guaranty, and all
documents, instruments and agreements executed pursuant thereto.
H. SUBSIDIARY GUARANTY. A copy of the Subsidiary Guaranty, and
all documents, instruments and agreements executed pursuant thereto.
I. CASH MANAGEMENT SYSTEM; BLOCKED ACCOUNT AGREEMENTS. Evidence
satisfactory to Agent that, as of the Closing Date, Cash Management Systems
complying with ANNEX C to the Agreement have been established and are currently
being maintained in the manner set forth in such ANNEX C, together with copies
of duly executed tri-party blocked account and lock box agreements, satisfactory
to Agent, with the banks as required by ANNEX C or on or prior to the Closing
Date, the Interim Order shall have been entered by the Bankruptcy Court
providing Agent, on behalf of the Lenders, with a first priority priming
security interest in Borrower's cash receipts and bank accounts.
J. CHARTER (OR EQUIVALENT DOCUMENTATION) AND GOOD STANDING. For
Credit Party, such Person's (a) charter (or equivalent organizational documents)
and all amendments thereto, (b) good standing certificates (including
verification of tax status) in its state of incorporation and (c) good standing
certificates (including verification of tax status) and certificates of
qualification to conduct business in each jurisdiction where its ownership or
lease of property or the conduct of its business requires such qualification,
each dated a recent date prior to the Closing Date and certified by the
applicable Secretary of State or other authorized Governmental Authority.
K. BYLAWS (OR EQUIVALENT DOCUMENTATION) AND RESOLUTIONS. For each
Credit Party, (a) such Person's bylaws (or other equivalent constituent
documentation), together with all amendments thereto and (b) resolutions of such
Person's Board of Directors (or equivalent governing body) and equityholders,
approving and authorizing the execution, delivery and performance of the Loan
Documents to which such Person is a party and the transactions to be consummated
in connection therewith, each certified as of the Closing Date by such Person's
secretary or an assistant secretary as being in full force and effect without
any modification or amendment.
L. INCUMBENCY CERTIFICATES. For Credit Party, signature and
incumbency certificates of the officers of each such Person executing any of the
Loan Documents, certified as of the Closing Date by such Person's secretary or
an assistant secretary as being true, accurate, correct and complete.
M. OPINIONS OF COUNSEL. Duly executed originals of opinions of
Husch & Eppenberger, counsel for the Credit Parties, together with any local
counsel
D-2
opinions requested by Agent, each in form and substance satisfactory to Agent
and its counsel, dated the Closing Date, and each accompanied by a letter
addressed to such counsel from the Credit Parties, authorizing and directing
such counsel to address its opinion to Agent, on behalf of Lenders, and to
include in such opinion an express statement to the effect that Agent and
Lenders are authorized to rely on such opinion.
N. PLEDGE AGREEMENTS. Copies of the Pledge Agreements accompanied
by (as applicable and to the extent not already delivered to Agent) (a)
certificates representing all of the outstanding Stock being pledged pursuant to
such Pledge Agreement and stock powers (or similar transfer instruments) for
such certificates executed in blank and (b) any instruments evidencing
Indebtedness, including, without limitation in respect of the Holdings Note and
the Lebanon IRBs, being pledged pursuant to such Pledge Agreement, duly endorsed
in blank.
O. Accountants' Letters. A letter from the Credit Parties to
their independent auditors authorizing the independent certified public
accountants of the Credit Parties to communicate with Agent and Lenders in
accordance with SECTION 4.2.
P. APPOINTMENT OF AGENT FOR SERVICE. An appointment of CT
Corporation as each Credit Party's agent for service of process.
Q. Intentionally Omitted.
R. OFFICER'S CERTIFICATE. Agent shall have received duly executed
originals of a certificate of the Chief Executive Officer and Chief Financial
Officer of Borrower or any other appropriate Person as determined by Agent,
dated the Closing Date, stating that, except for (i) the commencement of the
Chapter 11 Case, (ii) as disclosed in Borrower's public filings with the
Securities and Exchange Commission as set forth on DISCLOSURE SCHEDULE (3.5),
and (iii) as disclosed on DISCLOSURE SCHEDULE (3.5), since the Filing Date; (a)
no event or condition has occurred or is existing which could reasonably be
expected to have a Material Adverse Effect; (b) no Litigation has been commenced
which, if successful, would have a Material Adverse Effect or could challenge
any of the transactions contemplated by the Agreement and the other Loan
Documents; (d) there have been no Restricted Payments made by any Credit Party;
and (e) there has been no material increase in liabilities, liquidated or
contingent, and no material decrease in assets of Borrower or any of its
Subsidiaries.
S. WAIVERS. Agent, on behalf of Lenders, shall have received
landlord waivers and consents, bailee letters and mortgagee agreements or entry
of the Final Order providing for collateral access, each in form and substance
satisfactory to Agent, in each case as required pursuant to SECTION 5.9.
T. MORTGAGES. Borrower has previously delivered Mortgages in
connection with the Pre-Petition Credit Agreement covering all of the Real
Estate identified on ANNEX D-1 (each a "MORTGAGED PROPERTY," collectively the
"MORTGAGED
D-3
PROPERTIES"). On or prior to the Closing Date, the Interim Order shall have been
entered by the Bankruptcy Court providing Agent, on behalf of the Lenders, with
a first priority priming security interest in the Mortgaged Properties.
U. AUDITED FINANCIALS; FINANCIAL CONDITION. Agent shall have
received Borrower's audited Financial Statements for the twelve month period
ended December 31, 2001 which have been certified by KMPG LLP, and the unaudited
consolidated balance sheet of Borrower dated September 30, 2002. Borrower shall
have provided Agent with its current operating statements, a consolidated
balance sheet and statement of cash flows and Projections with respect to
Borrower certified by its Chief Financial Officer, in each case in form and
substance satisfactory to Agent, and Agent shall be satisfied, in its sole
discretion, with all of the foregoing. Agent shall have further received a
certificate of the Chief Executive Officer and/or the Chief Financial Officer of
Borrower or any other appropriate Person as determined by Agent, based on such
Projections, to the effect that the Projections are based upon estimates and
assumptions stated therein, all of which Borrower believes to be reasonable and
fair in light of current conditions and current facts known to Borrower and, as
of the Closing Date, reflect Borrower's good faith and reasonable estimates of
its future financial performance and of the other information projected therein
for the period set forth therein.
V. IRB DOCUMENTS; TAX SHARING AGREEMENT. True and correct copies,
certified by an officer of Borrower, of (x) all documents executed in connection
with the Lebanon IRB (including, without limitation, the IRB Indenture, the IRB
Lease Agreement and the IRB Assignment Documents and related consents to the
extent required by Agent with respect thereto) and (y) the Tax Sharing
Agreement.
W. OTHER DOCUMENTS. Such other certificates, documents and
agreements respecting any Credit Party as Agent may, in its sole discretion,
request.
D-4
ANNEX E (SECTION 4.1(a))
TO
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS - REPORTING
Borrower shall deliver or cause to be delivered to Agent or to
Agent and Lenders, as indicated, the following:
(a) MONTHLY FINANCIALS. To Agent, within thirty (30) days after
the end of each Fiscal Month, financial information regarding Borrower and its
Subsidiaries, certified by the Chief Financial Officer of Borrower, consisting
of consolidated (i) unaudited balance sheets as of the close of such Fiscal
Month and the related statements of income and cash flow for that portion of the
Fiscal Year ending as of the close of such Fiscal Month; and (ii) unaudited
statements of income and cash flows for such Fiscal Month, setting forth in
comparative form the figures for the corresponding period in the prior year and
the figures contained in the Projections for such Fiscal Year, all prepared in
accordance with GAAP (subject to normal year-end adjustments). Such financial
information shall be accompanied by the certification of the Chief Financial
Officer of Borrower that (i) such financial information presents fairly in
accordance with GAAP (subject to normal year-end adjustments) the financial
position and results of operations of Borrower and its Subsidiaries, on a
consolidated basis, in each case as at the end of such month and for the period
then ended and (ii) any other information presented is true, correct and
complete in all material respects and that there was no Default or Event of
Default in existence as of such time or, if a Default or Event of Default shall
have occurred and be continuing, describing the nature thereof and all efforts
undertaken to cure such Default or Event of Default;
(b) QUARTERLY FINANCIALS. To Agent, within forty-five (45) days
after the end of each Fiscal Quarter, consolidated financial information
regarding Borrower and its Subsidiaries, certified by the Chief Financial
Officer of Borrower, including (i) unaudited balance sheets as of the close of
such Fiscal Quarter and the related statements of income and cash flow for that
portion of the Fiscal Year ending as of the close of such Fiscal Quarter and
(ii) unaudited statements of income and cash flows for such Fiscal Quarter, in
each case setting forth in comparative form the figures for the corresponding
period in the prior year and the figures contained in the Projections for such
Fiscal Year, all prepared in accordance with GAAP (subject to normal year-end
adjustments). Such financial information shall be accompanied by (A) a statement
in reasonable detail (each, a "COMPLIANCE CERTIFICATE" showing the calculations
used in determining compliance with each of the financial covenants set forth on
ANNEX G which is tested on a quarterly basis and (B) the certification of the
Chief Financial Officer of Borrower that (i) such financial information presents
fairly in accordance with GAAP (subject to normal yearend adjustments) the
financial position, results of operations and statements of cash flows of
Borrower and its Subsidiaries, on both a consolidated basis, as at the end of
such Fiscal
E-1
Quarter and for the period then ended, (ii) any other information presented is
true, correct and complete in all material respects and that there was no
Default or Event of Default in existence as of such time or, if a Default or
Event of Default shall have occurred and be continuing, describing the nature
thereof and all efforts undertaken to cure such Default or Event of Default. In
addition, Borrower shall deliver to Agent and Lenders, within forty-five (45)
days after the end of each Fiscal Quarter, a management discussion and analysis
which includes a comparison to budget for that Fiscal Quarter and a comparison
of performance for that Fiscal Quarter to the corresponding period in the prior
year;
(c) [Intentionally Omitted.]
(d) ANNUAL AUDITED FINANCIALS. To Agent, within ninety (90) days
after the end of each Fiscal Year, audited Financial Statements for Borrower and
its Subsidiaries on a consolidated basis, consisting of balance sheets and
statements of income and retained earnings and cash flows, setting forth in
comparative form in each case the figures for the previous Fiscal Year, which
Financial Statements shall be prepared in accordance with GAAP, certified
without qualification, by an independent certified public accounting firm of
national standing or otherwise acceptable to Agent. Such Financial Statements
shall be accompanied by (i) a statement prepared in reasonable detail showing
the calculations used in determining compliance with each of the financial
covenants set forth on ANNEX G, (ii) a report from such accounting firm to the
effect that, in connection with their audit examination, nothing has come to
their attention to cause them to believe that a Default or Event of Default has
occurred (or specifying those Defaults and Events of Default that they became
aware of), it being understood that such audit examination extended only to
accounting matters and that no special investigation was made with respect to
the existence of Defaults or Events of Default, (iii) a letter addressed to
Agent, on behalf of itself and Lenders, in form and substance reasonably
satisfactory to Agent and subject to standard qualifications taken by nationally
recognized accounting firms, signed by such accounting firm acknowledging that
Agent and Lenders are entitled to rely upon such accounting firm's certification
of such audited Financial Statements, (iv) the annual letters to such
accountants in connection with their audit examination detailing contingent
liabilities and material litigation matters, and (v) the certification of the
Chief Executive Officer or Chief Financial Officer of Borrower that all such
Financial Statements present fairly in accordance with GAAP the financial
position, results of operations and statements of cash flows of Borrower and its
Subsidiaries on a consolidated basis, as at the end of such year and for the
period then ended, and that there was no Default or Event of Default in
existence as of such time or, if a Default or Event of Default shall have
occurred and be continuing, describing the nature thereof and all efforts
undertaken to cure such Default or Event of Default;
(e) MANAGEMENT LETTERS. To Agent, within five (5) Business Days
after receipt thereof by any Credit Party, copies of all management letters,
exception reports or similar letters or reports received by such Credit Party
from its independent certified public accountants;
E-2
(f) DEFAULT NOTICES. To Agent, as soon as practicable, and in any
event within five (5) Business Days after an executive officer of Borrower has
actual knowledge of the existence of any Default, Event of Default or other
event which has had a Material Adverse Effect, telephonic or telecopied notice
specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given telephonically,
shall be promptly confirmed in writing on the next Business Day;
(g) SEC FILINGS AND PRESS RELEASES. To Agent, promptly upon their
becoming available, copies of: (i) all Financial Statements, reports, notices
and proxy statements made publicly available by any Credit Party to its security
holders; (ii) all regular and periodic reports and all registration statements
and prospectuses, if any, filed by any Credit Party with any securities exchange
or with the Securities and Exchange Commission or any governmental or private
regulatory authority; and (iii) all press releases and other statements made
available by any Credit Party to the public concerning material changes or
developments in the business of any such Person;
(h) EQUITY NOTICES. To Agent, as soon as practicable, copies of
all material written notices given or received by any Credit Party with respect
to any Stock of such Person.
(i) SUPPLEMENTAL SCHEDULES. To Agent, supplemental disclosures, if
any, required by SECTION 5.6 of the Agreement;
(j) LITIGATION. To Agent (A) in writing, promptly upon learning
thereof, notice of any Litigation commenced or threatened against any Credit
Party that (i) seeks damages in any amount, (ii) seeks injunctive relief, (iii)
is asserted or instituted against any Plan, its fiduciaries or its assets or
against any Credit Party or ERISA Affiliate in connection with any Plan, (iv)
alleges criminal misconduct by any Credit Party, (v) alleges the violation of
any law regarding, or seeks remedies in connection with, any Environmental
Liabilities or (vi) involves any product recall; and (B) copies of all
pleadings, filings, non-privileged case summaries, memorandum and related
materials relating to any of the foregoing or to any Litigation commenced or
threatened against any Credit Party (including without limitation the
Worthington Litigation, the Victory Lane Productions litigation and the Outboard
Marine Corporation bankruptcy case); provided that the Credit Parties shall not
be obligated to deliver to Agent any items relating to any Litigation which
would compromise the attorney-client privilege between the Credit Parties and
their counsel.
(k) INSURANCE NOTICES. To Agent, disclosure of losses or
casualties required by SECTION 5.4 of the Agreement;
(l) DEFAULT NOTICES. To Agent, copies of (i) (x) any and all
default notices received under or with respect to any leased location or public
warehouse where Collateral is located, and (y) such other notices or documents
as Agent may request in its
E-3
reasonable discretion and (ii) any and all default notices received under or
with respect to the Lebanon IRBs, including, without limitation, under or with
respect to the IRB Indenture or the IRB Lease Agreement;
(m) LEASE AMENDMENTS. To Agent, copies of all material amendments
to real estate leases with respect to all Real Estate;
(n) OTHER DOCUMENTS. To Agent and Lenders, such other financial
and other information respecting any Credit Party's business or financial
condition as Agent or any Lender shall, from time to time, reasonably request;
(o) CASH FLOW BUDGET. To Agent, not later than Tuesday of every
calendar week, an updated Cash Flow Budget (in the form of EXHIBIT 1.2) for the
thirteen (13) week period commencing on the immediately preceding Friday,
together with a report, comparing the actual cash flow of Borrower for the
previous calendar week to the Cash Flow Budget for such period, together with an
explanation in reasonable detail of any variances with Cash Flow Budget for such
period. Each such updated Cash Flow Budget shall be subject to the approval of
Agent and shall not be the "Cash Flow Budget" for any purpose of this Agreement
absent such approval by Agent;
(p) DAILY CASH REPORT. To Agent, by 1 p.m. E.S.T. each Business
Day, a daily cash report of Borrower for the immediately preceding Business Day,
in a form approved by Agent;
(q) [Intentionally Omitted.]
(r) [Intentionally Omitted.];
(s) To Agent, annually, evidence that Borrower has paid in full
the annual fee necessary to retain CT Corporation as each Credit Party's agent
for service of process; and
(t) BANKRUPTCY MATTERS. To Agent, copies of all monthly reports,
projections, or other information respecting Borrower's or any Subsidiary of
Borrower's business or financial condition or prospects as well as all
pleadings, motions, applications and judicial information filed by or on behalf
of Borrower with the Bankruptcy Court or provided by or to the U.S. Trustee (or
any monitor or interim receiver, if any, appointed in the Chapter 11 Case) or
the Committee, at the time such document is filed with the Bankruptcy Court, or
provided by or, to the U.S. Trustee (or any monitor or interim receiver, if any,
appointed in the Chapter 11 Case) or the Committee.
(u) PURCHASING PERCENTAGE-TO-SALES. To Agent, not later than
Monday of every calendar week, a purchasing percentage-to-sales matrix in form
acceptable to Agent.
E-4
ANNEX F (SECTION 4.1(b))
TO
CREDIT AGREEMENT
COLLATERAL REPORTS
Borrower shall deliver or cause to be delivered the following:
To Agent, upon its request, and in no event less frequently than
five (5) Business Days after the end of each Fiscal Month (together with a copy
of all or any part of such delivery requested by any Lender in writing after the
Closing Date), each of the following:
(a) Revolving Borrowing Base Certificate accompanied by such
supporting detail and documentation as shall be requested by Agent in its
reasonable discretion:
(i) a summary of Inventory by location and type with a
supporting perpetual Inventory report, in each case accompanied by such
supporting detail and documentation as shall be requested by Agent in its
reasonable discretion; and
(ii) a monthly trial balance showing Accounts outstanding
aged from invoice due date as follows: 1 to 30 days, 31 to 60 days, 61 to
90 days and 91 days or more, accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable discretion;
(b) To Agent, on a weekly basis or at such more frequent intervals
as Agent may request from time to time (together with a copy of all or any part
of such delivery requested by any Lender in writing after the Closing Date),
collateral reports with respect to Borrower, including all additions and
reductions (cash and non-cash) with respect to Accounts of Borrower, in each
case accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion;
(c) To Agent, at the time of delivery of each of the monthly
Financial Statements delivered pursuant to ANNEX E, a reconciliation of the
Accounts trial balance and month-end Inventory reports of Borrower to Borrower's
general ledger and monthly Financial Statements delivered pursuant to such ANNEX
E, in each case accompanied by such supporting detail and documentation as shall
be requested by Agent in its reasonable discretion;
F-1
(d) To Agent, at the time of delivery of each of the annual
Financial Statements delivered pursuant to ANNEX E, (i) a listing of government
contracts of Borrower subject to the Federal Assignment of Claims Act of 1940;
and (ii) a list of any applications for the registration of any Patent,
Trademark or Copyright with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency which any Credit
Party thereof has filed in the prior Fiscal Quarter;
(e) Borrower, at its own expense, shall deliver to Agent the
results of each physical verification, if any, which Borrower or any of its
Subsidiaries may in their discretion have made, or caused any other Person to
have made on their behalf, of all or any portion of their Inventory (and, if a
Default or an Event of Default shall have occurred and be continuing, Borrower
shall, upon the request of Agent, conduct, and deliver the results of, such
physical verifications as Agent may require);
(f) Borrower, at its own expense, shall deliver to Agent such
appraisals of Equipment and Real Estate as Agent may request from time to time
(provided that so long as no Default or Event of Default has occurred and is
continuing, such appraisals shall be required no more frequently than once every
two (2) years) and such appraisals shall be prepared by an appraiser
satisfactory to Agent, and which shall otherwise be in form and substance
satisfactory to Agent (it being understood that any such appraisal in respect of
Real Estate shall be an MAI appraisal); and
(g) Such other reports, statements and reconciliations with
respect to the Collateral of any or all Credit Parties as Agent shall from time
to time request in its reasonable discretion.
F-2
ANNEX G (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrower shall not breach or fail to comply with any of the
following financial covenants, each of which shall be calculated in accordance
with GAAP consistently applied:
(a) MAXIMUM CAPITAL EXPENDITURES. Holdings and its Subsidiaries on
a consolidated basis shall not make Capital Expenditures during the following
periods that exceed in the aggregate the amounts set forth opposite each of such
periods:
Period Maximum Capital Expenditures per Period
------ ---------------------------------------
November 2002 $25,000
December 2002 $25,000
January 2003 $25,000
February 2003 $25,000
March 2003 $25,000
April 2003 $25,000
May 2003 $25,000
June 2003 $25,000
July 2003 $25,000
(d) MINIMUM EBITDA. Holdings and its Subsidiaries on a
consolidated basis shall have, at the end of each Fiscal Quarter set forth
below, EBITDA for the month then ended (or with respect to each Fiscal Month
ending on or before December 31, 2002, the period commencing on January 1, 2002
and ending on the last day of such Fiscal Month) of not less than the following:
Period Ended EBITDA
------------ ------
11/30/02 $125,000
12/31/02 $200,000
1/31/03 $250,000
2/28/03 $250,000
3/31/31 $250,000
4/30/03 $250,000
5/31/03 $250,000
G-1
Period Ended EBITDA
------------ ------
6/30/03 $250,000
7/31/03 $250,000
(e) [Intentionally Omitted.]
(f) EXPENSES AND EXPENDITURES. The expenses and expenditures of
Borrower during any aggregate period shall not exceed (i) one hundred and five
percent (105%) on an aggregate basis, and (ii) one hundred and ten percent
(110%) on a line item basis, of the expenses and expenditures set forth in the
Cash Flow Budget for such aggregate period.
(g) [Intentionally Omitted.]
(h) [Intentionally Omitted.]
Unless otherwise specifically provided herein, any accounting term
used in the Agreement shall have the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be computed
in accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any "Accounting Changes" (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in the Agreement or any other Loan
Document, then Borrower, Agent and Lenders agree to enter into negotiations in
order to amend such provisions of the Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
Borrower's and its Subsidiaries' financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made;
provided, however, that the agreement of Requisite Lenders to any required
amendments of such provisions shall be sufficient to bind all Lenders.
"ACCOUNTING CHANGES" means (a) changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions), (b)
changes in accounting principles concurred in by Borrower's certified public
accountants; (c) purchase accounting adjustments under A.P.B. 16 and/or 17 and
EITF 88-16, and the application of the accounting principles set forth in FASB
109, including the establishment of reserves pursuant thereto and any subsequent
reversal (in whole or in part) of such reserves; and (d) the reversal of any
reserves established as a result of purchase accounting adjustments. All such
adjustments resulting from expenditures made subsequent to the Closing Date
(including capitalization of costs and expenses or payment of pre-Closing Date
liabilities) shall be treated as expenses in the period the expenditures are
made and deducted as part of the calculation of EBITDA in
G-2
such period. If Agent, Borrower and Requisite Lenders agree upon the required
amendments, then after appropriate amendments have been executed and the
underlying Accounting Change with respect thereto has been implemented, any
reference to GAAP contained in the Agreement or in any other Loan Document
shall, only to the extent of such Accounting Change, refer to GAAP, consistently
applied after giving effect to the implementation of such Accounting Change. If
Agent, Borrower and Requisite Lenders cannot agree upon the required amendments
within thirty (30) days following the date of implementation of any Accounting
Change, then all Financial Statements delivered and all calculations of
financial covenants and other standards and terms in accordance with the
Agreement and the other Loan Documents shall be prepared, delivered and made
without regard to the underlying Accounting Change.
G-3
ANNEX H (SECTION 9.9(a))
TO
CREDIT AGREEMENT
LENDERS' WIRE TRANSFER INFORMATION
AGENT'S AND GE CAPITAL'S ACCOUNT:
Bank Name: Bankers Trust Company
Location: New York, New York
ABA Routing No.: 000000000
Credit Account No.: 00-000-000
Account Name: Xxxxxx
X-0
ANNEX I (SECTION 11.10)
TO
CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Agent or GE Capital, at
General Electric Capital Corporation
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Customs Account Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
and
Xxxxxx Financial, Inc.,
a GE Capital Company
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Counsel - Xxxxxx Custom Plastics
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(B) If to Borrower, to Borrower, at
Morton Custom Plastics, LLC
0000 Xxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
I-1
with copies to:
Husch & Eppenberger
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
and:
Jenner & Block
Xxx XXX Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
I-2
ANNEX J (FROM ANNEX A - COMMITMENTS DEFINITION)
TO
CREDIT AGREEMENT
LENDER(S)
Revolving Loan Commitment General Electric Capital Corporation
$2,500,000
J-1
EXHIBIT 1-A
TO
CREDIT AGREEMENT
[FORM OF INTERIM ORDER]
Xxx. 0-X-0
XXXXXXX 0.0(x)(x)
TO
CREDIT AGREEMENT
NOTICE OF REVOLVING CREDIT ADVANCE
Reference is made to that certain Senior Secured, Super-Priority
Debtor-In-Possession Credit Agreement dated as of November 5, 2002 among Xxxxxx
Custom Plastics, LLC ("MCP"), Xxxxxx Holdings, LLC ("Holdings") and Morton
Lebanon Kentucky IBRB, LLC (the "IRB Subsidiary", and collectively with MCP and
Holdings, "Borrower"), the other Persons named therein as Credit Parties,
General Electric Capital Corporation, as Agent for Lenders ("Agent"), and the
Lenders from time to time signatory thereto ("Lenders") (including all annexes,
exhibits and schedules thereto, and as from time to time amended, restated,
supplemented or otherwise modified, the "Credit Agreement"). Capitalized terms
used herein without definition are so used as defined in the Credit Agreement.
[Borrower hereby gives irrevocable notice, pursuant to SECTION
1.1(a)(i) of the Credit Agreement, of its request for a Revolving Credit Advance
to be made on [DATE] in the aggregate amount of $[________] as an Index Rate
Loan.
Borrower hereby (i) represents and warrants that all of the
conditions contained in SECTION 2.1 and SECTION 2.2 of the Credit Agreement have
been satisfied on and as of the date hereof, and will continue to be satisfied
on and as of the date of the Advance(s) requested hereby, before and after
giving effect thereto and to the application of the proceeds therefrom; and (ii)
reaffirms the granting and continuance of Agent's Liens, on behalf of itself and
Lenders, pursuant to the Collateral Documents.
IN WITNESS WHEREOF, Borrower has caused this Notice of Revolving
Credit Advance to be executed and delivered by its duly authorized officer as of
the date first set forth above.
XXXXXX CUSTOM PLASTICS, LLC
By: Xxxxxx Holdings, LLC,
its Manager
By: Xxxxxx Industrial Group, Inc.,
its Manager
By:
--------------------------------
Name:
Title:
Exh. 1.1(a)(i)-1
XXXXXX HOLDINGS, LLC
By: Xxxxxx Industrial Group, Inc.,
its Manager
By:
--------------------------------
Name:
Title:
XXXXXX LEBANON KENTUCKY IBRB, LLC
By: Xxxxxx Custom Plastics, LLC,
its Manager
By: Xxxxxx Holdings, LLC,
its Manager
By: Xxxxxx Industrial Group, Inc.,
its Manager
By:
--------------------------------
Name:
Title:
Exh. 1.1(a)(i)-2
EXHIBIT 4.1 (b)(i)
TO
CREDIT AGREEMENT
FORM OF BORROWING BASE CERTIFICATE
REVOLVING BORROWING BASE CERTIFICATE
PURSUANT TO THE SENIOR SECURED, SUPER-PRIORITY DEBTOR-IN-POSSESSION
CREDIT AGREEMENT DATED AS OF NOVEMBER 5, 2002, AMONG THE UNDERSIGNED, THE
PERSONS DESIGNATED THEREIN AS CREDIT PARTIES, THE OTHER PERSONS DESIGNATED
THEREIN AS LENDERS AND GENERAL ELECTRIC CAPITAL CORPORATION , AS AGENT (THE
"CREDIT AGREEMENT"), THE UNDERSIGNED CERTIFIES THAT AS OF THE CLOSE OF BUSINESS
ON THE DATE SET FORTH BELOW, THE BORROWING BASE IS COMPUTED AS SET FORTH BELOW.
THE UNDERSIGNED REPRESENTS AND WARRANTS THAT THIS REVOLVING
BORROWING BASE CERTIFICATE, DATED AS OF [_______, 200__], IS A TRUE AND CORRECT
STATEMENT OF, AND THAT THE INFORMATION CONTAINED HEREIN IS TRUE AND CORRECT IN
ALL MATERIAL RESPECTS REGARDING, THE STATUS OF ELIGIBLE ACCOUNTS, AND ELIGIBLE
INVENTORY AND THAT THE AMOUNTS REFLECTED HEREIN ARE IN COMPLIANCE WITH THE
PROVISIONS OF THE CREDIT AGREEMENT AND THE APPENDICES THERETO. THE UNDERSIGNED
FURTHER REPRESENTS AND WARRANTS THAT THERE IS NO DEFAULT OR EVENT OF DEFAULT AND
ALL REPRESENTATIONS AND WARRANTIES CONTAINED IN THE CREDIT AGREEMENT AND OTHER
LOAN DOCUMENTS ARE TRUE AND CORRECT. THE UNDERSIGNED UNDERSTANDS THAT GENERAL
ELECTRIC CAPITAL CORPORATION, AS AGENT FOR THE LENDERS, WILL EXTEND LOANS IN
RELIANCE UPON THE INFORMATION CONTAINED HEREIN. IN THE EVENT OF A CONFLICT
BETWEEN THE FOLLOWING SUMMARY OF ELIGIBILITY CRITERIA AND Sections 1.6 AND 1.7
OF THE CREDIT AGREEMENT, THE CREDIT AGREEMENT SHALL GOVERN. CAPITALIZED TERMS
USED HEREIN AND NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS SPECIFIED
IN THE CREDIT AGREEMENT.
See attached calculation.
XXXXXX CUSTOM PLASTICS, LLC
By: Xxxxxx Holdings, LLC,
its Manager
By: Xxxxxx Industrial Group, Inc.,
its Manager
By:
--------------------------------
Name:
Title:
Exh. 4.1 (b)(i)-1
XXXXXX HOLDINGS, LLC
By: Xxxxxx Industrial Group, Inc.,
its Manager
By:
--------------------------------
Name:
Title:
XXXXXX LEBANON KENTUCKY IBRB, LLC
By: Xxxxxx Custom Plastics, LLC,
its Manager
By: Xxxxxx Holdings, LLC,
its Manager
By: Xxxxxx Industrial Group, Inc.,
its Manager
By:
--------------------------------
Name:
Title:
Exh. 4.1(b)(i)-2
EXHIBIT 9.1(a)
ASSIGNMENT AGREEMENT
This
Assignment Agreement (this "Agreement") is made as of
___________ __, 200__ by and between __________________________________
("Assignor Lender") and ________________________ ("Assignee Lender") and
acknowledged and consented to by GENERAL ELECTRIC CAPITAL CORPORATION, as agent
("Agent"), XXXXXX CUSTOM PLASTICS, LLC ("MCP"), XXXXXX HOLDINGS, LLC
("Holdings") and MORTON LEBANON KENTUCKY IBRB, LLC (the "IRB Subsidiary", and
collectively with MCP and Holdings, "Borrower"), the other Persons named therein
as Credit Parties, ("Borrower").(1) All capitalized terms used in this Agreement
and not otherwise defined herein will have the respective meanings set forth in
the Credit Agreement (as hereinafter defined.)
RECITALS:
WHEREAS, Xxxxxx Custom Plastics, LLC ("MCP"), Xxxxxx Holdings LLC
("Holdings"), Morton Lebanon Kentucky IBRB, LLC ("Subsidiary", and collectively
with MCP and Holdings, "Borrower") and the other Persons signatory thereto as
Credit Parties, Agent, Assignor Lender and other Persons signatory thereto as
Lenders have entered into that certain Senior Secured, Super-Priority
Debtor-In-Possession Credit Agreement dated as of November 5, 2002 (as the same
may be amended, restated, supplemented or otherwise modified from time to time,
the "Credit Agreement") pursuant to which Assignor Lender has agreed to make
certain Loans to, and incur certain Letter of Credit Obligations for, Borrower;
WHEREAS, Assignor Lender desires to assign to Assignee Lender, and
Assignee Lender desires to purchase and assume, [all/a portion] of its interest
in the Loans (as described below), the Letter of Credit Obligations and the
Collateral and to delegate to Assignee Lender [all/a portion] of its Commitments
and other duties with respect to such Loans, Letter of Credit Obligations and
Collateral;
WHEREAS, Assignee Lender desires to become a Lender under the
Credit Agreement and to accept such assignment and delegation from Assignor
Lender; and
WHEREAS, Assignee Lender desires to appoint Agent to serve as agent
for Assignee Lender under the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions, and covenants herein contained, Assignor Lender and
Assignee Lender agree as follows:
1. ASSIGNMENT AND ACCEPTANCE
1.1. ASSIGNMENT. Assignor Lender hereby irrevocably transfers and
assigns to Assignee Lender, without recourse and without representations or
warranties of any kind (except as set forth in SECTION 3.2), an interest (the
"ASSIGNED INTEREST") as set forth on Schedule 1.1 in and to Assignor Lender's
rights and Obligations with respect to the Revolving Loans including the
Revolving Letter of Credit Obligations, Loan Documents and Collateral or any
portion thereof or interest therein, including any Lender's rights, title,
interests, remedies, powers or duties thereunder, whether evidenced by a writing
or
----------
(1) Insert so long as no Default or Event of Default has occurred and is
continuing on the Effective Date.
Exh. 9.1(a)-1
not. After giving effect to such assignment Assignee Lender shall have, as of
the Effective Date (as hereinafter defined) the Commitments and Pro Rata Shares
arising from such assignment as are set forth on Schedule 1.1.
1.2. ACCEPTANCE BY ASSIGNEE LENDER. By its execution of this Agreement,
Assignee Lender irrevocably purchases, assumes and accepts such assignment and
transfer of the Assigned Interest and agrees to be a Lender with respect to the
Assigned Interest under the Loan Documents and to be bound by the terms and
conditions thereof. By its execution of this Agreement, Assignor Lender agrees,
to the extent provided herein, to relinquish its rights and be released from its
obligations and duties under the Credit Agreement.
1.3. EFFECTIVE DATE. Such assignment and transfer by Assignor Lender and
acceptance by Assignee Lender will be effective and Assignee Lender (if not
already a Lender) will become a Lender under the Loan Documents as of the date
of this Agreement ("EFFECTIVE DATE") and upon payment of the Assigned Amount and
the Assignment Fee (as each term is defined below). Interest and Fees accrued
prior to the Effective Date are for the account of Assignor Lender. From and
after the Effective Date, Agent shall make to the Assignee all payments in
respect of the Assigned Interest (including payments of principal, interest,
fees and other amounts) which accrue subsequent to the Effective Date.
2. INITIAL PAYMENT AND DELIVERY OF NOTES
2.1. PAYMENT OF THE ASSIGNED AMOUNT. Assignee Lender will pay to
Assignor Lender, in immediately available funds, not later than 12:00 noon (New
York time) on the Effective Date, an amount equal to its Pro Rata Share as set
forth on Schedule 1.1 of the then outstanding principal amount of the Loans (the
"ASSIGNED AMOUNT").
2.2. PAYMENT OF ASSIGNMENT FEE. [ASSIGNOR LENDER AND/OR ASSIGNEE LENDER]
will pay to Agent, for its own account in immediately available funds, not later
than 12:00 noon (New York time) on the Effective Date, the assignment fee in the
amount of $3,500 (the "ASSIGNMENT FEE") as required pursuant to Section 9.1(a)
of the Credit Agreement.
2.3. EXECUTION AND DELIVERY OF NOTES. Following payment of the Assigned
Amount and the Assignment Fee, [EACH OF] Assignor Lender [AND ASSIGNEE LENDER]
will deliver to Agent the Notes previously delivered to it for redelivery to
Borrower and Agent will request that Borrower deliver to [ASSIGNOR LENDER AND]
Assignee Lender, newly executed Notes evidencing Assignee Lender's [AND ASSIGNOR
LENDER'S RESPECTIVE] Pro Rata Share[s] in the Loans after giving effect to the
assignment described in SECTION 1. Each new Note will be issued in the aggregate
maximum principal amount of the applicable Commitment of such Lender.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1. ASSIGNEE LENDER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
Assignee Lender hereby represents, warrants, and covenants the following to
Assignor Lender and Agent:
(a) This Agreement is a legal, valid, and binding agreement of
Assignee Lender, enforceable according to its terms;
(b) The execution and performance by Assignee Lender of its duties
and obligations under this Agreement and the Loan Documents will not require any
registration with, notice to, or consent or approval by any Governmental
Authority;
Exh. 9.1(a)-2
(c) Assignee Lender is familiar with transactions of the kind and
scope reflected in the Loan Documents and in this Agreement;
(d) Assignee Lender has made its own independent investigation and
appraisal of the financial condition and affairs of each Credit Party, has
conducted its own evaluation of the Loans and Letter of Credit Obligations, the
Loan Documents and each Credit Party's creditworthiness, has made its decision
to become a Lender to Borrower under the Credit Agreement independently and
without reliance upon Assignor Lender or Agent, and will continue to do so;
(e) Assignee Lender is entering into this Agreement in the
ordinary course of its business, and is acquiring its interest in the Loans and
Letter of Credit Obligations for its own account and not with a view to or for
sale in connection with any subsequent distribution; provided, however, that at
all times the distribution of Assignee Lender's property shall, subject to the
terms of the Credit Agreement, be and remain within its control;
(f) No future assignment or participation granted by Assignee
Lender pursuant to Section 9.1 of the Credit Agreement will require Assignor
Lender, Agent, or Borrower to file any registration statement with the
Securities and Exchange Commission or to apply to qualify under the blue sky
laws of any state;
(g) Assignee Lender has no loans to, written or oral agreements
with, or equity or other ownership interest in any Credit Party;
(h) Assignee Lender will not enter into any written or oral
agreement with, or acquire any equity or other ownership interest in, any Credit
Party without the prior written consent of Agent; and
(i) As of the Effective Date, Assignee Lender is entitled to
receive payments of principal and interest in respect of the Obligations without
deduction for or on account of any taxes imposed by the United States of America
or any political subdivision thereof.
3.2. ASSIGNOR LENDER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
Assignor Lender hereby represents, warrants and covenants the following to
Assignee Lender:
(a) Assignor Lender is the legal and beneficial owner of the
Assigned Amount;
(b) This Agreement is a legal, valid and binding agreement of
Assignor Lender, enforceable according to its terms;
(c) The execution and performance by Assignor Lender of its duties
and obligations under this Agreement and the Loan Documents will not require any
registration with, notice to or consent or approval by any Governmental
Authority;
(d) Assignor Lender has full power and authority, and has taken
all action necessary to execute and deliver this Agreement and to fulfill the
obligations hereunder and to consummate the transactions contemplated hereby;
(e) Assignor Lender is the legal and beneficial owner of the
interests being assigned hereby, free and clear of any adverse claim, lien,
encumbrance, security interest, restriction on transfer, purchase option, call
or similar right of a third party; and
Exh. 9.1(a)-3
(f) This Assignment by Assignor Lender to Assignee Lender
complies, in all material respects, with the terms of the Loan Documents.
4. LIMITATIONS OF LIABILITY
Neither Assignor Lender (except as provided in Section 3.2) nor
Agent makes any representations or warranties of any kind, nor assumes any
responsibility or liability whatsoever, with regard to (a) the Loan Documents or
any other document or instrument furnished pursuant thereto or the Loans, Letter
of Credit Obligations or other Obligations, (b) the creation, validity,
genuineness, enforceability, sufficiency, value or collectibility of any of
them, (c) the amount, value or existence of the Collateral, (d) the perfection
or priority of any Lien upon the Collateral, or (e) the financial condition of
any Credit Party or other obligor or the performance or observance by any Credit
Party of its obligations under any of the Loan Documents. Neither Assignor
Lender nor Agent has or will have any duty, either initially or on a continuing
basis, to make any investigation, evaluation, appraisal of, or any
responsibility or liability with respect to the accuracy or completeness of, any
information provided to Assignee Lender which has been provided to Assignor
Lender or Agent by any Credit Party. Nothing in this Agreement or in the Loan
Documents shall impose upon the Assignor Lender or Agent any fiduciary
relationship in respect of the Assignee Lender.
5. FAILURE TO ENFORCE
No failure or delay on the part of Agent or Assignor Lender in the
exercise of any power, right, or privilege hereunder or under any Loan Document
will impair such power, right, or privilege or be construed to be a waiver of
any default or acquiescence therein. No single or partial exercise of any such
power, right, or privilege will preclude further exercise thereof or of any
other right, power, or privilege. All rights and remedies existing under this
Agreement are cumulative with, and not exclusive of, any rights or remedies
otherwise available.
6. NOTICES
Unless otherwise specifically provided herein, any notice or other
communication required or permitted to be given will be in writing and addressed
to the respective party as set forth below its signature hereunder, or to such
other address as the party may designate in writing to the other.
7. AMENDMENTS AND WAIVERS
No amendment, modification, termination, or waiver of any provision
of this Agreement will be effective without the written concurrence of Assignor
Lender, Agent and Assignee Lender.
8. SEVERABILITY
Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law. In
the event any provision of this Agreement is or is held to be invalid, illegal,
or unenforceable under applicable law, such provision will be ineffective only
to the extent of such invalidity, illegality, or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of the
Agreement. In addition, in the event any provision of or obligation under this
Agreement is or is held to be invalid, illegal, or unenforceable in any
jurisdiction, the validity, legality, and enforceability of the remaining
provisions or obligations in any other jurisdictions will not in any way be
affected or impaired thereby.
Exh. 9.1(a)-4
9. SECTION TITLES
Section and Subsection titles in this Agreement are included for
convenience of reference only, do not constitute a part of this Agreement for
any other purpose, and have no substantive effect.
10. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.
11. APPLICABLE LAW
THIS AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
THAT STATE.
12. COUNTERPARTS
This Agreement and any amendments, waivers, consents, or
supplements may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which, when so executed and
delivered, will be deemed an original and all of which shall together constitute
one and the same instrument.
[signature page follows]
Exh. 9.1(a)-5
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
ASSIGNEE LENDER: ASSIGNOR LENDER:
------------------------------------ -------------------------------------
By: By:
--------------------------------- ----------------------------------
Title: Title:
------------------------------ -------------------------------
Notice Address: Notice Address:
------------------------------------ -------------------------------------
------------------------------------ -------------------------------------
------------------------------------ -------------------------------------
ACKNOWLEDGED AND CONSENTED TO:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent
By:
----------------------------------
Its Duly Authorized Signatory
[XXXXXX CUSTOM PLASTICS, LLC
By: Xxxxxx Holdings, LLC,
its Manager
By: Xxxxxx Industrial Group, Inc.,
its Manager
By:
----------------------------------
Name:
Title:
XXXXXX HOLDINGS, LLC
By: Xxxxxx Industrial Group, Inc.
its Manager
By:
-----------------------------
Name:
Title:
XXXXXX LEBANON KENTUCKY IBRB, LLC
By: Xxxxxx Custom Plastics, LLC,
its Manager
By: Xxxxxx Holdings, LLC,
its Manager
By: Xxxxxx Industrial Group, Inc.,
its Manager
By:
-----------------------------
Name:
Title:(2)
----------
(2) Insert so long as no Default of Event of Default has occurred and is
continuing on the Effective Date.
SCHEDULE 1.1
ASSIGNED COMMITMENTS AND LOANS
Assignor Lender's
Assigned Interest Loans after Assignment
----------------- ----------------------
Aggregate for Pro Rata Pro Rata
All Lenders Commitment Share Commitment Share
----------- ---------- ----- ---------- -----
Revolving Loan $ 2,500,000 $ % $ %
Commitment
------------ ----------- ----------
Aggregate $ 2,500,000 $ $
Commitments
Sch. 1.1-1
