THIRD AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
dated as of March 25, 2002
among
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as the Lenders
and
BANK OF AMERICA, N.A.
as the Agent
and
SWEETHEART CUP COMPANY INC.
as the Borrower
and
SWEETHEART HOLDINGS INC.
as the Parent
and
BANK OF AMERICA SECURITIES LLC
as Sole Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
Page
ARTICLE 1 INTERPRETATION OF THIS AGREEMENT................................................................2
1.1 Definitions.....................................................................................2
1.2 Accounting Terms...............................................................................34
1.3 Interpretive Provisions........................................................................34
ARTICLE 2 LOANS AND LETTERS OF CREDIT....................................................................35
2.1 Total Facility.................................................................................35
2.2 Revolving Loans................................................................................35
2.3 Term Loans.....................................................................................42
2.4 Letters of Credit..............................................................................43
2.5 Assignment to IBJ..............................................................................50
ARTICLE 3 INTEREST AND FEES..............................................................................51
3.1 Interest.......................................................................................51
3.2 Conversion and Continuation Elections..........................................................52
3.3 Maximum Interest Rate..........................................................................54
3.4 Certain Fees...................................................................................54
3.5 Unused Line Fee................................................................................54
3.6 Letter of Credit Fee...........................................................................54
3.7 Collateral Management Fee......................................................................55
ARTICLE 4 PAYMENTS AND PREPAYMENTS.......................................................................55
4.1 Revolving Loans................................................................................55
4.2 Termination of Facility........................................................................55
4.3 Repayment of the Term Loans....................................................................56
4.4 Voluntary Prepayments of the Term Loans........................................................56
4.5 Mandatory Prepayments of the Term Loans........................................................56
4.6 Payments by the Borrower.......................................................................58
4.7 Payments as Revolving Loans....................................................................59
4.8 Apportionment, Application and Reversal of Payments............................................59
4.9 Indemnity for Returned Payments................................................................60
4.10 Agent's and Lenders' Books and Records; Monthly Statements.....................................60
ARTICLE 5 TAXES, YIELD PROTECTION AND ILLEGALITY.........................................................60
5.1 Taxes ......................................................................................60
5.2 Illegality.....................................................................................61
5.3 Increased Costs and Reduction of Return........................................................62
5.4 Funding Losses.................................................................................63
5.5 Inability to Determine Rates...................................................................63
5.6 Certificates of Lenders........................................................................64
5.7 Survival.......................................................................................64
ARTICLE 6 COLLATERAL.....................................................................................64
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6.1 Grant of Security Interest.....................................................................64
6.2 Perfection and Protection of Security Interest.................................................68
6.3 Location of Collateral.........................................................................69
6.4 Title to, Liens on, and Sale and Use of Collateral.............................................70
6.5 Appraisals.....................................................................................71
6.6 Access and Examination; Confidentiality........................................................71
6.7 Collateral Reporting...........................................................................72
6.8 Accounts.......................................................................................73
6.9 Collection of Accounts; Payments...............................................................74
6.10 Inventory; Perpetual Inventory.................................................................76
6.11 Equipment......................................................................................76
6.12 Assigned Contracts.............................................................................77
6.13 Documents, Instruments, and Chattel Paper......................................................78
6.14 Right to Cure..................................................................................78
6.15 Power of Attorney..............................................................................79
6.16 The Agent's and Lenders' Rights, Duties and Liabilities........................................79
6.17 Intercreditor Agreement........................................................................80
ARTICLE 7 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES..............................................80
7.1 Books and Records..............................................................................80
7.2 Financial Information..........................................................................80
7.3 Notices to the Lenders.........................................................................83
ARTICLE 8 GENERAL WARRANTIES AND REPRESENTATIONS.........................................................85
8.1 Authorization, Validity, and Enforceability of this Agreement and the
Other Transaction Documents....................................................................85
8.2 Validity and Priority of Security Interest.....................................................86
8.3 Organization and Qualification.................................................................86
8.4 Corporate Name; Prior Transactions.............................................................87
8.5 Subsidiaries and Affiliates....................................................................87
8.6 Financial Statements and Projections...........................................................87
8.7 Capitalization.................................................................................88
8.8 Solvency...................................................................................... 88
8.9 Debt ......................................................................................88
8.10 Distributions..................................................................................88
8.11 Title to Property..............................................................................88
8.12 Real Estate; Leases............................................................................88
8.13 Proprietary Rights.............................................................................89
8.14 Trade Names....................................................................................89
8.15 Litigation.....................................................................................89
8.16 Restrictive Agreements.........................................................................89
8.17 Labor Disputes.................................................................................89
8.18 Environmental Laws.............................................................................89
8.19 No Violation of Law............................................................................91
8.20 No Default.....................................................................................91
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8.21 ERISA Compliance...............................................................................91
8.22 Taxes ......................................................................................91
8.23 Regulated Entities.............................................................................92
8.24 Use of Proceeds; Margin Regulations............................................................92
8.25 Copyrights, Patents, Trademarks and Licenses, etc..............................................92
8.26 No Material Adverse Change.....................................................................93
8.27 Full Disclosure................................................................................93
8.28 Material Agreements............................................................................93
8.29 Bank Accounts..................................................................................93
8.30 ▇▇▇▇▇ Term Loan Equipment Collateral...........................................................93
ARTICLE 9 AFFIRMATIVE AND NEGATIVE COVENANTS.............................................................93
9.1 Taxes and Other Obligations....................................................................93
9.2 Corporate Existence and Good Standing..........................................................94
9.3 Compliance with Law and Agreements; Maintenance of Licenses....................................94
9.4 Maintenance of Property........................................................................94
9.5 Insurance......................................................................................94
9.6 Condemnation...................................................................................96
9.7 Environmental Laws.............................................................................96
9.8 Compliance with ERISA..........................................................................97
9.9 Mergers, Consolidations or Sales...............................................................97
9.10 Distributions; Capital Change; Restricted Investments.........................................100
9.11 Transactions Affecting Collateral or Obligations..............................................104
9.12 Guaranties....................................................................................104
9.13 Debt .....................................................................................104
9.14 Prepayment....................................................................................105
9.15 Transactions with Affiliates..................................................................106
9.16 Investment Banking and Finder's Fees..........................................................107
9.17 Amendments of Senior Subordinated Notes and Other Documents...................................107
9.18 Business Conducted............................................................................108
9.19 Liens .....................................................................................108
9.20 Sale and Leaseback Transactions...............................................................108
9.21 New Subsidiaries..............................................................................108
9.22 Fiscal Year...................................................................................108
9.23 Capital Expenditures..........................................................................108
9.24 [Reserved]....................................................................................109
9.25 Minimum Availability..........................................................................109
9.26 Fixed Charge Coverage Ratio...................................................................109
9.27 Use of Proceeds...............................................................................109
9.28 Senior Indebtedness and Secured Sale/Leaseback Collateral.....................................109
9.29 Further Assurances............................................................................110
ARTICLE 10 CONDITIONS OF LENDING.........................................................................110
10.1 Conditions Precedent to Making of Loans on the Original Closing Date..........................110
10.2 Conditions Precedent to Each Loan.............................................................112
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10.3 Conditions Precedent to Effectiveness of Amendment and Restatement
and Making of Loans on Closing Date...........................................................113
ARTICLE 11 DEFAULT; REMEDIES.............................................................................117
11.1 Events of Default.............................................................................117
11.2 Remedies......................................................................................120
ARTICLE 12 TERM AND TERMINATION..........................................................................122
12.1 Term and Termination..........................................................................122
ARTICLE 13 AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS...................................122
13.1 No Waivers; Cumulative Remedies...............................................................122
13.2 Amendments and Waivers........................................................................122
13.3 Assignments; Participations...................................................................123
ARTICLE 14 THE AGENT.....................................................................................125
14.1 Appointment and Authorization.................................................................125
14.2 Delegation of Duties..........................................................................126
14.3 Liability of Agent............................................................................126
14.4 Reliance by Agent.............................................................................126
14.5 Notice of Default.............................................................................127
14.6 Credit Decision...............................................................................127
14.7 Indemnification...............................................................................128
14.8 Agent in Individual Capacity..................................................................128
14.9 Successor Agent...............................................................................128
14.10 Withholding Tax...............................................................................129
14.11 [Reserved]....................................................................................130
14.12 Collateral Matters............................................................................130
14.13 Restrictions on Actions by Lenders; Sharing of Payments.......................................131
14.14 Agency for Perfection.........................................................................132
14.15 Payments by Agent to Lenders..................................................................132
14.16 Concerning the Collateral and the Related Loan Documents......................................132
14.17 Field Audit and Examination Reports; Disclaimer by Lenders....................................132
14.18 Relation Among Lenders........................................................................133
14.19 Sole Lead Arranger and Sole Book Manager......................................................133
ARTICLE 15 MISCELLANEOUS.................................................................................133
15.1 Cumulative Remedies; No Prior Recourse to Collateral..........................................133
15.2 Severability..................................................................................134
15.3 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.........................134
15.4 WAIVER OF JURY TRIAL..........................................................................135
15.5 Survival of Representations and Warranties....................................................135
15.6 Other Security and Guaranties.................................................................135
15.7 Fees and Expenses.............................................................................135
15.8 Notices.......................................................................................136
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15.9 Waiver of Notices.............................................................................138
15.10 Binding Effect................................................................................138
15.11 Indemnity of the Agent and the Lenders by the Borrower........................................138
15.12 Limitation of Liability.......................................................................138
15.13 Final Agreement...............................................................................139
15.14 Counterparts..................................................................................139
15.15 Captions..................................................................................... 139
15.16 Right of Setoff...............................................................................139
15.17 Credit Agreement and Conflicts................................................................139
15.18 Intercreditor Agreement.......................................................................140
15.19 Amendments to Certain Security Documents......................................................140
15.20 Ratification and Confirmation.................................................................140
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EXHIBITS AND SCHEDULES
EXHIBITS
EXHIBIT A - FORM OF THE TERM LOAN NOTE
EXHIBIT B - FORM OF BORROWING BASE CERTIFICATE
EXHIBIT C - FINANCIAL STATEMENTS
EXHIBIT D - [RESERVED]
EXHIBIT E - FORM OF NOTICE OF BORROWING
EXHIBIT F - FORM OF NOTICE OF CONVERSION/CONTINUATION
EXHIBIT G - FORM OF ASSIGNMENT AND ACCEPTANCE
AGREEMENT
EXHIBIT H - FORM OF STOCKHOLDER SUBORDINATED NOTE
EXHIBIT I - FORM OF LILY INTERCOMPANY NOTE
SCHEDULES
SCHEDULE 1.1A ASSIGNED CONTRACTS
SCHEDULE 1.1B CREDIT AGREEMENT TERM LOAN EQUIPMENT COLLATERAL
SCHEDULE 2.3 TERM LOAN AMOUNTS
SCHEDULE 6.3 LOCATION OF COLLATERAL
SCHEDULE 8.3 ORGANIZATION AND QUALIFICATION
SCHEDULE 8.5 SUBSIDIARIES AND AFFILIATES
SCHEDULE 8.12 REAL ESTATE; LEASES
SCHEDULE 8.13 PROPRIETARY RIGHTS
SCHEDULE 8.14 TRADE NAMES
SCHEDULE 8.15 LITIGATION
SCHEDULE 8.17 LABOR DISPUTES
SCHEDULE 8.18 ENVIRONMENTAL LAWS
vi
SCHEDULE 8.21 ERISA
SCHEDULE 8.28 MATERIAL AGREEMENTS
SCHEDULE 8.29 BANK ACCOUNTS
SCHEDULE 9.13 EXISTING DEBT
SCHEDULE 9.19 EXISTING LIENS
vii
THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Third Amended and Restated Loan and Security Agreement, dated
as of March 25, 2002, among the financial institutions listed on the signature
pages hereof (such financial institutions, together with their respective
successors and assigns, are referred to hereinafter each individually as a
"Lender" and collectively as the "Lenders"), Bank of America, N.A., a national
banking association (together with any successor, "BofA") and
successor-in-interest to BankAmerica Business Credit, Inc. ("BABC") with an
office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as agent for the Lenders
(in its capacity as agent, together with any successor agent, the "Agent"),
Sweetheart Cup Company Inc., a Delaware corporation, with offices at ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Borrower"), and Sweetheart
Holdings Inc., a Delaware corporation, with offices at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Parent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower and Parent were parties to a certain
Credit Agreement, dated as of August 30, 1993, by and among the Borrower,
Parent, the banks and other financial institutions party thereto and Bankers
Trust Company, as agent, as amended by a First Amendment, dated as of July 22,
1994, a Second Amendment To Credit Agreement, dated as of September 6, 1996, a
Third Amendment To Credit Agreement, dated as of June 17, 1997, and a Fourth
Amendment and Consent To Credit Agreement, dated as of September 29, 1997 (as so
amended, the "Original Credit Agreement");
WHEREAS, the Borrower had requested BABC to make available to
the Borrower a revolving line of credit for loans and letters of credit in an
amount not to exceed $135,000,000 and which extensions of credit the Borrower
was to use for its working capital needs and general business purposes;
WHEREAS, BABC agreed to make available to the Borrower a
revolving credit facility upon certain terms and conditions;
WHEREAS, in connection with the aforesaid revolving credit
facility requested by the Borrower from BABC, effective as of October 24, 1997,
BABC purchased from the banks and other financial institutions party to the
Original Credit Agreement all of such banks' and other financial institutions'
right, title and interest in and to the Original Credit Agreement and the
documents and instruments executed and delivered in connection therewith (with
certain exceptions), all pursuant to a certain Assignment and Assumption
Agreement (the "Bank Assignment Agreement"), dated as of October 24, 1997, among
BABC, the banks and other financial institutions party to the Original Credit
Agreement, the agent and collateral agent under the Original Credit Agreement,
the Borrower and Parent;
WHEREAS, the Borrower, Parent and BABC amended and restated
the Original Credit Agreement in its entirety to provide for the aforesaid
revolving credit facility requested by the Borrower from BABC, all pursuant to a
certain Amended and Restated Loan and Security Agreement, dated as of October
24, 1997, among BABC, as the sole lender thereunder, BABC,
as Agent, the Borrower and Parent (as heretofore amended, the "First Amended and
Restated Loan and Security Agreement");
WHEREAS, the Borrower had desired (i) to redeem all of its
Senior Secured Notes (as hereinafter defined) with the proceeds of a
sale/leaseback arrangement to be entered into by the Borrower with respect to
certain of its Equipment (as hereinafter defined) and (ii) that the lenders
party to the First Amended and Restated Loan and Security Agreement provide to
the Borrower a $25,000,000 term loan facility and extend the scheduled
termination date of the revolving credit facility provided under the First
Amended and Restated Loan and Security Agreement;
WHEREAS, the Borrower, Parent, such lenders and the Agent
amended and restated the First Amended and Restated Loan and Security Agreement
in its entirety to, among other things, reflect such redemption, sale/leaseback
arrangement, term loan facility and extension of the aforesaid revolving credit
facility (such amended and restated loan and security agreement as heretofore
amended, the "Existing Loan and Security Agreement");
WHEREAS, the Borrower desires (i) to merge with ▇▇▇▇▇ (as
hereinafter defined), with the Borrower to be the surviving entity thereof (such
merger, the "▇▇▇▇▇/Cup Merger"), and (ii) to increase the credit facility
provided under the Existing Loan and Security Agreement to $235,000,000; and
WHEREAS, the Borrower, Parent, the Lenders and the Agent
desire to amend and restate the Existing Loan and Security Agreement in its
entirety in the manner hereinafter set forth to, among other things, reflect the
▇▇▇▇▇/Cup Merger and such increase in the credit facility provided under the
Existing Loan and Security Agreement.
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged, the Borrower, Parent, the Lenders
and the Agent hereby agree that the Existing Loan and Security Agreement shall
be, and hereby is, amended and restated in its entirety as follows.
ARTICLE 1
INTERPRETATION OF THIS AGREEMENT
1.1 Definitions. As used herein:
"Account Debtor" means each Person obligated in any way on or
in connection with an Account.
"Accounts" means all of the Borrower's now owned or hereafter
acquired or arising accounts, and any other rights to payment for the sale or
lease of goods or rendition of services, whether or not they have been earned by
performance.
2
"Adjusted Net Earnings from Operations" means, with respect to
any period of time, the Borrower's net income after provision for income taxes
for such period of time, as determined in accordance with GAAP and reported on
the Financial Statements for such period, excluding any and all of the following
included in such net income: (a) gain or loss arising from the sale of any
capital assets; provided that notwithstanding the foregoing, for purposes of
testing the Fixed Charge Coverage Ratio for any Test Period ending on or after
June 30, 1998, any gain arising from the sale of any capital assets (other than
Credit Agreement Collateral and Secured Sale/Leaseback Collateral) of Parent or
any of its Subsidiaries permitted under Section 9.9 may be included in such net
income if all of the net cash proceeds of such sale have been reinvested in any
business of Parent or the Borrower permitted under Section 9.18; (b) gain or
loss arising from any write-up or non-cash charge from the write-down,
respectively, in the book value of any asset; (c) earnings of any corporation,
substantially all the assets of which have been acquired by the Borrower in any
manner, to the extent realized by such other corporation prior to the date of
acquisition; (d) earnings of any business entity in which the Borrower has an
ownership interest unless (and only to the extent) such earnings shall actually
have been received by the Borrower in the form of cash distributions; (e)
earnings of any Person to which assets of the Borrower shall have been sold,
transferred or disposed of, or into which the Borrower shall have been merged,
or which has been a party with the Borrower to any consolidation or other form
of reorganization, prior to the date of such transaction; (f) non-cash gain or
non-cash loss arising from the acquisition of debt or equity securities of the
Borrower or from cancellation or forgiveness of Debt of the Borrower; and (g)
non-cash gain or non-cash loss arising from (i) extraordinary items, as
determined in accordance with GAAP, and any non-recurring transaction or (ii)
any increase or decrease in calculating the termination liability for the
Lily-Tulip, Inc. Salary Retirement Plan resulting from a change in the interest
rate reset annually by the PBGC in determining the amounts necessary to
annuitize such liability. For purposes of the Fixed Charge Coverage Ratio test
set forth in Section 9.26, any charge of the Borrower with respect to employee
severance resulting from early termination of employees of the Borrower shall
constitute an expense of the Borrower when such charge is actually paid in cash
by the Borrower and not when such charge is accrued on the books and records of
the Borrower.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person or which owns, directly or indirectly, five percent
(5%) or more of the outstanding equity interest of such Person. A Person shall
be deemed to control another Person if the controlling Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the ownership of
voting securities, by contract, or otherwise. For purposes of this Agreement and
the other Loan Documents, BofA shall not be considered an Affiliate of Parent or
any of its Subsidiaries by virtue of BofA's passive investment in one or more
funds managed by American Industrial Partners, L.P. or any of its Affiliates.
"Agent" means BofA, solely in its capacity as agent for the
Lenders, and any successor agent.
"Agent Advances" has the meaning specified in Section 2.2(i).
3
"Agent-Related Persons" means the Agent and any successor
agent appointed pursuant to Section 14.9, together with their respective
Affiliates, and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.
"Agent's Liens" means the Liens granted to the Agent, for the
ratable benefit of the Lenders, BofA and the Agent, pursuant to this Agreement
and the other Loan Documents.
"Agreement" means the Existing Loan and Security Agreement, as
amended and restated hereby.
"Anniversary Date" means each anniversary of the Closing Date.
"Anticipated Replacement Amount" means, with respect to any
Replacement Election, the amount specified in the Replacement Notice delivered
by the Borrower in connection therewith as the amount of the net after tax
proceeds from the related sale or other disposition of assets referred to in
clause (iii) of the first sentence of Section 4.5(b) that the Borrower intends
to use to purchase replacement Equipment in accordance with such clause (iii).
"Applicable Margin" means:
(i) with respect to Base Rate Revolving Loans and all other
Obligations (other than LIBOR Revolving Loans, Base Rate Term Loans and
LIBOR Term Loans), 0.50%;
(ii).....with respect to LIBOR Revolving Loans, 2.50%;
(iii)....with respect to Base Rate Term Loans, 0.50%; and
(iv).....with respect to LIBOR Term Loans, 2.50%.
"Asset Transfer Documents" means, collectively, (i) the Asset
Sale Agreement and Asset Distribution Agreement each dated as of October 6, 1993
(collectively, the "Asset Transfer Agreements") between Parent and the Borrower;
(ii) any deed or conveyance for Real Estate required pursuant to the Asset
Transfer Agreements; (iii) any ▇▇▇▇ of sale for equipment and machines or other
assignment and assumption agreements delivered pursuant to the Asset Transfer
Agreements; (iv) the wrap-around note dated as at October 6, 1993 given as part
of the consideration by Parent to the Borrower in connection with the foregoing;
(v) the Manufacturing Agreement dated as of October 6, 1993 between Parent and
the Borrower; (vi) the Patent/Know-How License Agreement dated as of October 6,
1993 between Parent and the Borrower granting to Parent certain intellectual
property rights for manufacturing process required pursuant to the Asset
Transfer Agreements; and (vii) the Acknowledgment of Distribution Assignment and
Assumption Agreement dated as of October 6, 1993 between Parent and the
Borrower.
"Assigned Contracts" means, collectively, all of the
Borrower's rights and remedies under, and all moneys and claims for money due or
to become due to the Borrower under those contracts set forth on Schedule 1.1A,
and any other material contracts, and any and all amendments, supplements,
extensions, and renewals thereof including, without limitation, all rights and
claims of the Borrower now or hereafter existing: (i) under any insurance,
4
indemnities, warranties, and guarantees provided for or arising out of or in
connection with any of the foregoing agreements; (ii) for any damages arising
out of or for breach or default under or in connection with any of the foregoing
contracts; (iii) to all other amounts from time to time paid or payable under or
in connection with any of the foregoing agreements; or (iv) to exercise or
enforce any and all covenants, remedies, powers and privileges thereunder.
"Assignee" has the meaning specified in Section 13.3(a).
"Assignment and Acceptance" has the meaning specified in
Section 13.3(a).
"Attorney Costs" means and includes all reasonable fees,
expenses and disbursements of any law firm or other external counsel engaged by
the Agent, the reasonable allocated cost of internal legal services of the Agent
and all reasonable expenses and disbursements of internal counsel of the Agent.
"Availability" means, at any time: (a) the least of (i) the
Maximum Revolver Amount, (ii) the sum of (A) eighty-five percent (85%) of the
Net Amount of Eligible Accounts plus (B) the sum of (1) sixty percent (60%) of
the value of that portion of Eligible Inventory (other than Inventory consisting
of or related to cup making machines) constituting raw materials and work in
process, (2) sixty-five percent (65%) of the value of that portion of Eligible
Inventory (other than Inventory consisting of or related to cup making machines)
constituting finished goods and (3) twenty-five percent (25%) of the value of
that portion of Eligible Inventory consisting of or related to cup making
machines constituting raw materials and finished goods, it being understood and
agreed that at no time shall Revolving Loans relating to the Eligible Inventory
referred to in this clause (3) exceed $1,250,000; provided, that at no time
shall the sum of outstanding Revolving Loans based upon the value of Eligible
Inventory exceed $135,000,000, or (iii) so long as any Senior Subordinated Notes
remain outstanding, the maximum amount which the Borrower is entitled to borrow
pursuant to clause (a) of the second paragraph of Section 4.09 of the indenture
governing the Senior Subordinated Notes (which as of the Closing Date is 80% of
the Borrower's accounts not more than 60 days past due plus 50% of the
Borrower's inventory, each calculated in accordance with GAAP); minus (b) the
sum of (i) the unpaid balance of Revolving Loans at such time, (ii) the
aggregate amount of Pending Revolving Loans at such time, (iii) the aggregate
undrawn amount of all outstanding Letters of Credit, (iv) the aggregate amount
of any unpaid reimbursement obligations (unless included in clause (b)(iii) of
this definition) in respect of the Letters of Credit, (v) reserves for accrued
interest on the Obligations, (vi) the Environmental Compliance Reserve, (vii) so
long as any Term Loans remain outstanding, the Term Loan Reserve, (viii) any
reserves established pursuant to Section 4.5(b), and (ix) all other reserves
which the Agent in good ▇▇▇▇▇ ▇▇▇▇▇ necessary in the exercise of its reasonable
credit judgment to maintain with respect to the Borrower's account and which are
customary in scope and application, in the assessment of the Agent, in the
lending practices of the Agent in effect from time to time, including, without
limitation, reserves for "special programs", inventory valuation reserves and
reserves for any amounts which the Agent or any Lender may be obligated to pay
in the future for the account of the Borrower.
"BABC" has the meaning specified in the introductory paragraph
hereof.
5
"Bank Assignment Agreement" has the meaning specified in the
recitals to this Agreement.
"Bankruptcy Code" means Title 11 of the United States Code (11
▇.▇.▇.▇▇. 101 et seq.).
"Base Rate" means, for any day, the rate of interest in effect
for such day as publicly announced from time to time by BofA in Charlotte, North
Carolina, as its "prime rate" (the "prime rate" being a rate set by BofA based
upon various factors including BofA's costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate). Any change
in the prime rate announced by BofA shall take effect at the opening of business
on the day specified in the public announcement of such change. Each Interest
Rate based upon the Base Rate shall be adjusted simultaneously with any change
in the Base Rate.
"Base Rate Loans" means, collectively, the Base Rate Revolving
Loans and the Base Rate Term Loans. "Base Rate Revolving Loan"
means a Revolving Loan during any period in which it bears
interest based on the Base
Rate.
"Base Rate Term Loan" means any portion of a Term Loan during
any period in which such portion bears interest based on the Base Rate.
"BofA" has the meaning specified in the introductory paragraph
hereof.
"BofA Fees" has the meaning specified in Section 3.4.
"BofA Loan" and "BofA Loans" have the meanings specified in
Section 2.2(h).
"Borrower" has the meaning specified in the introductory
paragraph hereof.
"Borrower Security Agreement" means the Amended and Restated
Security Agreement dated as of the Original Closing Date between the Borrower
and the Agent.
"Borrowing" means a borrowing hereunder consisting of
Revolving Loans or Term Loans made on the same day by the Lenders to the
Borrower (or by BofA in the case of a Borrowing funded by BofA Loans) or by the
Agent in the case of a Borrowing consisting of an Agent Advance.
"Borrowing Base Certificate" means a certificate by a
Responsible Officer of the Borrower, substantially in the form of Exhibit B (or
another form reasonably acceptable to the Agent) setting forth the calculation
of the Availability, including a calculation of each component thereof, as of
the close of business no more than five (5) Business Days prior to the date of
such certificate (or with respect to the calculation of the Inventory component,
a calculation thereof as of the close of business on the date which is no
earlier than the earliest of (x) five (5) Business Days prior to the date of
such certificate and (y) the last day of the calendar month just ended), all
6
in such detail as shall be satisfactory to the Agent. All calculation of
Availability in connection with the preparation of any Borrowing Base
Certificate shall originally be made by the Borrower and certified to the Agent;
provided, that the Agent shall have the right to review and adjust, in the
exercise of its reasonable credit judgment, any such calculation (1) to reflect
its reasonable estimate of declines in value of any of the Collateral described
therein, and (2) to the extent that such calculation is not in accordance with
this Agreement.
"Business Day" means (a) any day that is not a Saturday,
Sunday, or a day on which banks in Charlotte, North Carolina or Baltimore,
Maryland are required or permitted to be closed, and (b) with respect to all
notices, determinations, fundings and payments in connection with the LIBOR Rate
or LIBOR Rate Loans, any day that is a Business Day pursuant to clause (a) above
and that is also a day on which trading in Dollars is carried on by and between
banks in the London interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a bank.
"Capital Expenditures" means all payments (whether or not
paid) in respect of the cost of any fixed asset or improvement, or replacement,
substitution, or addition thereto, which has a useful life of more than one
year, including, without limitation, those costs arising in connection with the
direct or indirect acquisition of such asset by way of increased product or
service charges or offset items or in connection with a Capital Lease, in each
case, to the extent classified by GAAP as a capital expenditure.
"Capital Lease" means any lease of property by Parent or any
of its Subsidiaries which, in accordance with GAAP, is or should be reflected as
a capital lease on the balance sheet of such Person.
"Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options, contingent share issuances,
participations or other equivalents of or interests in (however designated)
equity of such Person, including any Preferred Stock, but excluding any debt
securities convertible into or exchangeable for such equity.
"Cash Equivalents" means those investments described in
clauses (d), (e), (f), (g) and (h) of the defined term "Restricted Investment"
in this Section 1.1.
"Change of Control" means the occurrence of any of the
following events:
(i) Neither American Industrial Partners Capital Fund, L.P.,
a Delaware limited partnership ("AIP"), and/or SF Holdings shall,
separately or collectively, be the record and Beneficial Owner (as
defined below) of a majority in the aggregate of the total voting power
of the Voting Stock (as defined below) of Parent, whether as a result
of an issuance of securities of Parent, any merger, consolidation,
liquidation or dissolution of Parent, any direct or indirect transfer
of securities or otherwise; or
7
(ii) Neither AIP and/or SF Holdings shall, separately or
collectively, have the right or ability, by voting power, contract or
otherwise, to elect or designate for election a majority of the Board
of Directors (as defined below) of Parent; or
(iii) Parent shall fail at any time to be the record and
Beneficial Owner of 100% of the outstanding equity interests of the
Borrower; or
(iv) American Industrial Partners, L.P., a Delaware
limited partnership, ceases to be the sole general partner of AIP, but
only if AIP is the Beneficial Owner of any Voting Stock of Parent or SF
Holdings; or
(v) there shall occur a "Change of Control" (as such term
is defined in the indenture governing any of the Senior Subordinated
Notes, the ▇▇▇▇▇ Senior Subordinated Notes or the Senior Replacement
Notes); or
(vi) None of AIP, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and/or any one or more trusts,
corporations, partnerships, limited liability companies or other
entities in which ▇▇▇▇▇▇ ▇▇▇▇▇▇ has a Beneficial Ownership interest of
a majority in the aggregate of the total voting power of such entity
(each, a "Controlled Entity") shall, separately or collectively, be the
record and Beneficial Owner of a majority in the aggregate of the total
voting power of the Voting Stock of SF Holdings, whether as a result of
an issuance of securities of SF Holdings, any merger, consolidation,
liquidation or dissolution of SF Holdings, any direct or indirect
transfer of securities or otherwise; or
(vii) None of AIP, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and/or one or more Controlled
Entities shall, separately or collectively, have the right or ability,
by voting power, contract or otherwise, to elect or designate for
election a majority of the Board of Directors of SF Holdings.
For purposes of this definition of "Change of Control", and
the definitions used within this definition (and only for such
purposes), the following terms have the following meanings:
"Beneficial Owner", and terms having similar import,
means any direct or indirect "beneficial owner", as such term
is defined in Rules 13d-3 and 13d-5 under the Exchange Act.
"Board of Directors" means, with respect to any
Person, such Person's Board of Directors or any committee
thereof duly authorized to act on behalf of such Board of
Directors.
"Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated
thereunder.
"Voting Stock" of a corporation means all classes of
Capital Stock of such corporation then outstanding and
normally entitled to vote in the election of directors.
8
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute, and regulations promulgated
thereunder.
"Collateral" has the meaning specified in Section 6.1.
"Collateral Agent" has the meaning set forth in the
Intercreditor Agreement.
"Commitment" means, at any time with respect to a Lender, the
principal amount set forth beside such Lender's name under the heading
"Commitment" on the signature pages of this Agreement or on the signature page
of the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 13.3, as such Commitment
may be adjusted from time to time in accordance with the provisions of Sections
4.5 (b) and Section 13.3, and "Commitments" means, collectively, the aggregate
amount of the commitments of all of the Lenders.
"Commodities Agreement" means any forward contract, futures
contract, option contract or similar agreement or arrangement, in each case
intended to protect the Persons entering into same from fluctuations in the
price of, or shortage of supply of, pulp, paper or paper products or any other
materials used in connection with any of the businesses of the Borrower or any
of its Subsidiaries permitted to be conducted under Section 9.18.
"Contaminant" means any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in any form or condition, polychlorinated biphenyls
("PCBs"), or any hazardous constituent of any such substance or waste.
"Credit Agreement Collateral" has the meaning set forth in the
Intercreditor Agreement.
"Credit Agreement Term Loan Equipment Collateral" means all of
the Equipment described on Schedule 1.1B, and any and all additions,
substitutions and replacements of any of the foregoing, wherever located,
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto or used or to be used in connection
therewith, and all manuals, drawings, instructions, warranties and rights with
respect thereto; wherever any of the foregoing is located.
"Credit Support" has the meaning specified in Section 2.4(a).
"Debt" means, without duplication, all indebtedness of Parent
or any of its Subsidiaries to any Person for borrowed money or as evidenced by
notes, bonds, debentures or similar instruments or documents or for the deferred
and unpaid purchase price of any property or business or any services (other
than trade payables and accrued expenses incurred in the ordinary course of
business), all obligations of Parent or any of its Subsidiaries under or with
respect to any letters of credit or guarantees or credit support therefor, all
obligations under any Interest Rate Protection or Other Hedging Agreement or
under any similar type of agreement and all
9
obligations of Parent or any of its Subsidiaries under Capital Leases, in each
instance, now or hereafter owing, arising, due or payable, howsoever evidenced,
created, incurred, acquired or owing, whether primary, secondary, direct,
contingent, fixed or otherwise, and including in any event and without in any
way limiting the generality of the foregoing: (i) all Obligations; (ii) all
obligations and liabilities of any Person secured by any Lien on the property of
Parent or any of its Subsidiaries, even though Parent or any such Subsidiary
shall not have assumed or become liable for the payment thereof; provided,
however, that all such obligations and liabilities which are limited in recourse
to such property shall be included in Debt only to the extent of the book value
of such property as would be shown on the face of a balance sheet of Parent or
such Subsidiary, as the case may be, prepared in accordance with GAAP; (iii) all
obligations or liabilities created or arising under any Capital Lease or
conditional sale or other title retention agreement with respect to property
used or acquired by Parent or any of its Subsidiaries, even if the rights and
remedies of the lessor, seller or lender thereunder are limited to repossession
of such property; provided, however, that all such obligations and liabilities
which are limited in recourse to such property shall be included in Debt only to
the extent of the book value of such property as would be shown on the face of a
balance sheet of Parent or such Subsidiary, as the case may be, prepared in
accordance with GAAP; (iv) all obligations and liabilities under Guaranties; and
(v) all Disqualified Stock of Parent or any of its Subsidiaries.
"Default" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"Default Rate" means a fluctuating per annum interest rate at
all times equal to the sum of (a) the otherwise applicable Interest Rate plus
(b) two percent (2%). Each Default Rate shall be adjusted simultaneously with
any change in the applicable Interest Rate. In addition, with respect to Letters
of Credit, the Default Rate shall mean an increase in the Letter of Credit Fee
by two percentage points.
"Defaulting Lender" has the meaning specified in Section
2.2(g)(ii).
"Demand Loans" means the demand loans made to the Borrower by
certain of the lenders which were parties to the Existing Loan and Security
Agreement on May 15, 2000 in the aggregate principal amount of $12,411,088
pursuant to the letter agreement, dated May 12, 2000, among the Borrower,
Parent, such lenders and the Agent.
"Distribution" means, in respect of any corporation: (a) the
payment or making of any dividend or other distribution of property in respect
of capital stock (or any options or warrants for such stock) of such
corporation, other than distributions in capital stock (or any options or
warrants for such stock) which is not Disqualified Stock; or (b) the redemption
or other acquisition of any capital stock (or any options or warrants for such
stock) of such corporation, except in exchange for capital stock (or warrants or
options for such capital stock) which is not Disqualified Stock.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock which by its terms (or by the terms of any security into which it
is convertible or for which it is
10
exchangeable) or upon the happening of any event (i) matures or is mandatorily
redeemable (other than redeemable only for Capital Stock of such Person which is
not itself Disqualified Stock) pursuant to a sinking fund obligation or
otherwise, (ii) is convertible or exchangeable for Debt (including, without
limitation, Disqualified Stock) or (iii) is redeemable at the option of the
holder thereof, in whole or in part, in each case on or prior to the first
anniversary of the Stated Termination Date.
"DOL" means the United States Department of Labor or any
successor department or agency.
"Dollar" and "$" mean dollars in the lawful currency of the
United States.
"Domestic Subsidiary" means any Subsidiary which is organized
under the laws of any state of the United States or the District of Columbia.
"Dopaco Asset Purchase Agreement" means the Asset Purchase
Agreement, dated as of July 20, 2001, between Dopaco, Inc. and ▇▇▇▇▇.
"Dopaco Assignment of Contract As Collateral Security" means
the Assignment of Contract As Collateral Security by the Borrower in favor of
the Agent with respect to the Dopaco Asset Purchase Agreement.
"EBITDA" means, with respect to any period of time, the total
of the following for the Borrower as determined in accordance with GAAP, each
calculated for such period of time: Adjusted Net Earnings from Operations plus,
to the extent included in the calculation of Adjusted Net Earnings from
Operations, the sum of (a) income tax expense; (b) interest expense paid or
payable in cash, net of cash interest income; (c) amortization and depreciation
expense; and (d) other non-cash charges.
"Eligible Accounts" means all Accounts of the Borrower which
the Agent, in good faith in the exercise of its reasonable commercial discretion
and based upon criteria which, in the assessment of the Agent, are customary in
the lending practices of the Agent in effect from time to time, determines to be
Eligible Accounts. Without limiting the discretion of the Agent to establish
other criteria of ineligibility, Eligible Accounts shall not, unless the Agent
in its sole discretion elects, include any Account:
(a)......with respect to which more than ninety days (one
hundred twenty days in the case of Accounts generated by the ▇▇▇▇▇ or Creative
Expressions Group units of the Borrower) have elapsed since the date of the
original invoice therefor or it is more than sixty days past due;
(b)......with respect to which any of the representations,
warranties, covenants, and agreements contained in Section 6.8 are not or have
ceased to be complete and correct or have been breached;
11
(c)......with respect to which, in whole or in part, a check,
promissory note, draft, trade acceptance or other instrument for the payment of
money has been received, presented for payment and returned uncollected for any
reason;
(d)......which represents a progress billing (as hereinafter
defined) or as to which the Borrower has extended the time for payment without
the consent of the Agent; for the purposes hereof, "progress billing" means any
invoice for goods sold or leased or services rendered under a contract or
agreement pursuant to which the Account Debtor's obligation to pay such invoice
is conditioned upon the Borrower's completion of any further performance under
the contract or agreement;
(e)......as to which any one or more of the following events
has occurred with respect to the Account Debtor on such Account: death or
judicial declaration of incompetency of an Account Debtor who is an individual;
the filing by or against the Account Debtor of a request or petition for
liquidation, reorganization, arrangement, adjustment of debts, adjudication as a
bankrupt, winding-up, or other relief under the bankruptcy, insolvency, or
similar laws of the United States, any state or territory thereof, or any
foreign jurisdiction, now or hereafter in effect; the making of any general
assignment by the Account Debtor for the benefit of creditors; the appointment
of a receiver or trustee for the Account Debtor or for any of the assets of the
Account Debtor, including, without limitation, the appointment of or taking
possession by a "custodian," as defined in the Federal Bankruptcy Code; the
institution by or against the Account Debtor of any other type of insolvency
proceeding (under the bankruptcy laws of the United States or otherwise) or of
any formal or informal proceeding for the dissolution or liquidation of,
settlement of claims against, or winding up of affairs of, the Account Debtor;
the sale, assignment, or transfer of all or any material part of the assets of
the Account Debtor; the nonpayment generally by the Account Debtor of its debts
as they become due; or the cessation of the business of the Account Debtor as a
going concern;
(f)......if fifty percent (50%) or more of the aggregate
Dollar amount of outstanding Accounts owed at such time by the Account Debtor
thereon is classified as ineligible under the criteria set forth in clauses (a)
and/or (u);
(g)......owed by an Account Debtor which: (i) does not
maintain its chief executive office in the United States; or (ii) is not
organized under the laws of the United States or any state thereof; or (iii) is
the government of any foreign country or sovereign state, or of any state,
province, municipality, or other political subdivision thereof, or of any
department, agency, public corporation, or other instrumentality thereof; except
to the extent that such Account is secured or payable by a letter of credit
reasonably satisfactory to the Agent;
(h)......owed by an Account Debtor which is an Affiliate or
employee of the Borrower;
(i)......except as provided in (k) below, as to which either
the perfection, enforceability, or validity of the Agent's Lien in such Account,
or the Agent's right or ability to obtain direct payment to the Agent of the
proceeds of such Account, is governed by any federal, state, or local statutory
requirements other than those of the UCC;
12
(j)......which is owed by an Account Debtor to which the
Borrower is indebted in any way, or which is subject to any right of setoff or
recoupment by the Account Debtor, unless the Account Debtor has entered into an
agreement reasonably acceptable to the Agent to waive setoff rights; or if the
Account Debtor thereon has disputed liability or made any claim with respect to
any other Account due from such Account Debtor; but in each such case only to
the extent of such indebtedness, setoff, recoupment, dispute, or claim;
(k)......which is owed by the government of the United States
of America, or any department, agency, public corporation, or other
instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as
amended (31 U.S.C. ss. 3727 et seq.), and any other steps necessary to perfect
the Agent's Lien therein, have been complied with to the Agent's satisfaction
with respect to such Account;
(l)......which is owed by any state, municipality, or other
political subdivision of the United States of America, or any department,
agency, public corporation, or other instrumentality thereof and as to which the
Agent determines that its Lien therein is not or cannot be perfected;
(m)......which represents a sale on a ▇▇▇▇-and-hold,
guaranteed sale, sale and return, sale on approval, consignment, or other
repurchase or return basis (other than for damage);
(n)......which is evidenced by a promissory note or other
instrument or by chattel paper;
(o)......if the Agent believes, in good faith in the exercise
of its reasonable judgment (based upon such factors that, in the assessment of
the Agent, are customary in the lending practices of the Agent in effect from
time to time), that the prospect of collection of such Account is impaired or
that the Account may not be paid by reason of the Account Debtor's financial
inability to pay;
(p)......with respect to which the Account Debtor is located
in any state requiring the filing of a Notice of Business Activities Report or
similar report in order to permit the Borrower to seek judicial enforcement in
such State of payment of such Account, unless the Borrower has qualified to do
business in such state or has filed a Notice of Business Activities Report or
equivalent report for the then current year or such failure to file and
inability to seek judicial enforcement is capable of being remedied without any
material delay or material cost;
(q)......which arises out of a sale not made in the ordinary
course of the Borrower's business;
(r)......as to which the goods giving rise to such Account
have not been shipped and delivered to and accepted by the Account Debtor or the
services giving rise to such Account have not been performed by the Borrower,
and, if applicable, accepted by the Account Debtor, or the Account Debtor
revokes its acceptance of such goods or services;
(s)......which is owed by an Account Debtor (other than
Perseco or an Account Debtor that is rated 5a1 or better by Dun & Bradstreet)
that is obligated to the Borrower
13
respecting Accounts the aggregate unpaid balance of which exceeds the lesser of
(i) $10,000,000 and (ii) ten percent (10%) of the aggregate unpaid balance of
all Accounts owed to the Borrower at such time by all of the Borrower's Account
Debtors, but only to the extent of such excess;
(t)......which arises out of a contract or order which, by its
terms, forbids, restricts or makes void or unenforceable the granting of a Lien
by the Borrower to the Agent with respect to such Account;
(u)......which is a "short pay" account (but only with respect
to that portion of the Account which is "short pay");
or
(v)......which is not subject to a first priority and
perfected security interest in favor of the Agent for the benefit of the
Lenders.
If any Account at any time ceases to be an Eligible Account by
reason of any of the foregoing exclusions or any failure to meet any other
eligibility criteria established by the Agent in good faith in the exercise of
its reasonable commercial discretion (based upon such factors that, in the
assessment of the Agent, are customary in the lending practices of the Agent in
effect from time to time) then such Account shall promptly be excluded from the
calculation of Eligible Accounts.
"Eligible Inventory" means Inventory, valued at the lower of
cost (on a FIFO basis) or market, that constitutes raw materials consisting of
(x) jumbo paper rolls, virgin resin, regrinds or resin material reconverted to
pellet form or (y) aluminum or steel rods (with respect to the manufacture of
cup making machines only), work in process (other than with respect to cup
making machines) and finished goods and that, unless the Agent in its sole
discretion elects, (a) is not, in the Agent's reasonable good faith opinion
(based upon such factors that, in the assessment of the Agent, are customary in
the lending practices of the Agent in effect from time to time), obsolete, slow
moving, defective or unmerchantable; (b) is located at premises owned by the
Borrower or on premises otherwise reasonably acceptable to the Agent, provided,
however, that, with respect to Inventory located on any premises leased to the
Borrower, unless the Borrower shall have delivered to the Agent a written
waiver, duly executed on behalf of the appropriate landlord and in form and
substance reasonably acceptable to the Agent, of all Liens which the landlord
for such premises may be entitled to assert against such Inventory the Agent
may, in its sole discretion, establish a reserve against Availability therefor
in an amount up to the aggregate of three months rent payable with respect to
such leased premises plus any rent payable with respect to such leased premises
which is then due and payable; (c) upon which the Agent for the benefit of the
Lenders has a first priority perfected security interest; (d) is not spare
parts, packaging and shipping materials, supplies, ▇▇▇▇-and-hold Inventory or
defective Inventory, or Inventory delivered to the Borrower on consignment or
Inventory in transit; and (e) the Agent, in good faith in the exercise of its
reasonable commercial discretion, deems eligible as the basis for Revolving
Loans based on such collateral and credit criteria as the Agent may from time to
time establish and which are customary in scope and application, in the
assessment of the Agent, in the lending practices of the Agent in effect from
time to time. If any Inventory at any time ceases to be Eligible Inventory, such
Inventory shall promptly be excluded from the calculation of Eligible Inventory.
14
"Environmental Compliance Reserve" means any reserves which
the Agent, after the Original Closing Date, establishes from time to time for
amounts that are reasonably likely to be expended by the Borrower in order for
the Borrower and its operations and property (a) to comply with any notice from
a Governmental Authority asserting material non-compliance with Environmental
Laws, or (b) to correct any such material non-compliance identified in a report
delivered to the Agent and the Lenders pursuant to Section 9.7, in each instance
under clause (a) or (b), for which non-compliance (or the remediation thereof)
may impose or result in an Environmental Lien in any Accounts, Inventory or
other Credit Agreement Collateral which will have priority over the Agent's
Liens therein; provided that no such reserves shall be established by the Agent
to the extent that (i) the Agent shall have determined, in its reasonable
commercial judgment, that the Borrower has the financial ability to pay for any
such compliance or remediation and has sufficient Availability therefor as well
as for its other working capital needs and to satisfy Section 9.25, in each
instance, on a prospective basis through the estimated time of completion of
such compliance or remediation and (ii) the Borrower shall have delivered a
certificate to the Agent certifying as to the Borrower having such financial
ability and Availability with appropriate projections in detail reasonably
satisfactory to the Agent supporting such certification by the Borrower (such
certificate and projections to be updated and delivered to the Agent quarterly
until the completion of such compliance or remediation).
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case relating to environmental, health or safety matters.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (1) any liability under any Environmental Laws, or (2) damages
arising from, or costs incurred by such Governmental Authority in response to, a
Release or threatened Release of a Contaminant into the environment.
"Equipment" means all of the Borrower's now owned and
hereafter acquired machinery, equipment, furniture, furnishings, fixtures, and
other tangible personal property (except Inventory), including motor vehicles
with respect to which a certificate of title has been issued, aircraft, dies,
tools, jigs, and office equipment, as well as all of such types of property
leased by the Borrower (including, without limitation, pursuant to the Secured
Sale/Leaseback Arrangements) and all of the Borrower's rights and interests with
respect thereto under such leases (including, without limitation, options to
purchase); together with all present and future additions and accessions
thereto, replacements therefor, component and auxiliary parts and supplies used
or to be used in connection therewith, and all substitutes for any of the
foregoing, and all manuals, drawings, instructions, warranties and rights with
respect thereto; wherever any of the foregoing is located.
"ERISA" means the Employee Retirement Income Security Act of
1974, and regulations promulgated thereunder, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower or Parent within the
meaning of Section 414(b) or
15
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Borrower, Parent or any ERISA Affiliate
from a Pension 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) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower, Parent
or any ERISA Affiliate from a Multi-employer Plan or notification that a
Multi-employer Plan is in reorganization; (d) the filing of a notice of intent
to terminate, the treatment of a Plan amendment as a termination under Section
4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multi-employer Plan; (e) an 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
Pension Plan or Multi-employer Plan; or (f) the imposition of any liability
under Title IV of ERISA, other than PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Borrower, Parent or any ERISA Affiliate.
"Event of Default" has the meaning specified in Section 11.1.
"Exchange Act" means the Securities and Exchange Act of 1934,
and regulations promulgated thereunder.
"Excluded Sale/Leaseback Assets" has the meaning specified in
the Intercreditor Agreement.
"Existing Debt" has the meaning specified in Section 9.13.
"Existing ▇▇▇▇▇ Credit Facility" means the Fourth Amended and
Restated Revolving Credit, Term Loan and Security Agreement, dated as of August
28, 2001, among ▇▇▇▇▇, the lenders party thereto and IBJ Whitehall Business
Credit Corporation, as agent.
"Existing Liens" has the meaning specified in clause (i) of
the defined term "Permitted Liens" in this Section 1.1.
"Existing Loan and Security Agreement" has the meaning
specified in the recitals to this Agreement.
"FDIC" means the Federal Deposit Insurance Corporation, and
any Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last transaction
in overnight
16
Federal funds arranged prior to 9:00 a.m. (New York City time) on that day by
each of three leading brokers of Federal funds transactions in New York City
selected by the Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any successor thereto.
"Fee Letter" means the Fee Letter, dated March 25, 2002,
between the Borrower and BofA with respect to the fees referred to therein.
"Financial Statements" means, according to the context in
which it is used, the financial statements referred to in Section 8.6 or any
other financial statements required to be given to the Lenders pursuant to this
Agreement.
"First Amended and Restated Loan and Security Agreement" has
the meaning specified in the recitals to this Agreement.
"Fiscal Year" means the Borrower's fiscal year for financial
accounting purposes. The current Fiscal Year of the Borrower will end on
September 29, 2002.
"Fixed Assets" means Equipment and Real Estate of the Borrower
or Parent.
"Fixed Charge Component" means, with respect to any period of
time, the following for the Borrower as determined in accordance with GAAP, each
calculated for such period of time: the sum of (i) cash interest expense, net of
cash interest income, (ii) cash income tax expense, (iii) the aggregate amount
of Capital Expenditures made by the Borrower during such period (other than
Capital Expenditures financed by the Borrower), (iv) the aggregate amount of all
cash payments of principal on Debt made by the Borrower during such period
(other than (x) under any of the Loan Documents, the Original Credit Agreement
and other Credit Documents (as defined in the Original Credit Agreement), (y)
with respect to any of the Senior Secured Notes, the Senior Subordinated Notes
or the ▇▇▇▇▇ Senior Subordinated Notes or (z) under the Existing ▇▇▇▇▇ Credit
Facility), (v) the aggregate amount of all cash payments of principal on the
Term Loans made by the Borrower during such period (other than (x) the payment
of $5,809,091.09 made on the Term Loans (as defined in the Existing Loan and
Security Agreement) in July 2001 concurrently with the increase by such amount
of the term loan under the Lily Credit Facility, (y) any payment made with
proceeds of the Senior Replacement Notes contemplated to be issued by the
Borrower as provided in clause (iii) of the first sentence of Section 9.14 and
(z) any principal payment made pursuant to Section 9.13(k)) and (vi) the
aggregate amount of payments made by the Borrower during such period pursuant to
Section 9.10(L).
"Fixed Charge Coverage Ratio" means, at any date of
determination, the ratio of (i) EBITDA for the Test Period most recently ended
(taken as one accounting period) and ending on such date to (ii) the Fixed
Charge Component for such Test Period (taken as one accounting period).
"▇▇▇▇▇" means The ▇▇▇▇▇ Group, Inc., a Delaware corporation.
17
"▇▇▇▇▇/Cup Merger" has the meaning specified in the recitals
to this Agreement.
"▇▇▇▇▇/Cup Merger Documents" means the documents pursuant to
which the ▇▇▇▇▇/Cup Merger is consummated, including, without limitation, the
documents filed with the Secretary of State of Delaware in order to effectuate
such merger.
"▇▇▇▇▇ Senior Subordinated Notes" means the $120,000,000 face
amount of 9 1/2% Senior Subordinated Notes due 2007 issued by ▇▇▇▇▇ pursuant to
an Indenture dated as of February 27, 1997.
"▇▇▇▇▇ Term Loan Equipment Collateral" means all of the
Equipment owned by ▇▇▇▇▇ immediately prior to the consummation of the ▇▇▇▇▇/Cup
Merger, and any and all additions, substitutions and replacements of any of the
foregoing, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto or used or to be
used in connection therewith, and all manuals, drawings, instructions,
warranties and rights with respect thereto; wherever any of the foregoing is
located.
"Funding Date" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of the
Original Closing Date and subject to Section 1.2.
"General Intangibles" means all of the Borrower's now owned or
hereafter acquired general intangibles, choses in action and causes of action
and all other intangible personal property of the Borrower of every kind and
nature (other than Accounts), including, without limitation, all contract
rights, Proprietary Rights, corporate or other business records, inventions,
designs, blueprints, plans, specifications, patents, patent applications,
trademarks, service marks, trade names, trade secrets, goodwill, copyrights,
computer software, customer lists, registrations, licenses, franchises, tax
refund claims, any funds which may become due to the Borrower in connection with
the termination of any Plan or other employee benefit plan or any rights thereto
and any other amounts payable to the Borrower from any Plan or other employee
benefit plan, rights and claims against carriers and shippers, rights to
indemnification, business interruption insurance and proceeds thereof, property,
casualty or any similar type of insurance and any proceeds thereof, proceeds of
insurance covering the lives of key employees on which the Borrower is
beneficiary, and any letter of credit, guarantee, claim, security interest or
other security held by or granted to the Borrower.
"Global Entities" means Global Cup, S.A. de C.V., Servicios
Tanairi, S.A. de C.V. and their respective Subsidiaries, each a Mexican
Subsidiary of the Borrower.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority)
18
thereof, any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any corporation or
other entity owned or controlled, through stock or capital ownership or
otherwise, by any of the foregoing.
"Guaranty" means, with respect to any Person, all obligations
of such Person which in any manner directly or indirectly guarantee or assure,
or in effect guarantee or assure, the payment or performance of any
indebtedness, dividend or other obligations of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including, without limitation, any
such obligations incurred through an agreement, contingent or otherwise: (a) to
purchase the guaranteed obligations or any property constituting security
therefor; (b) to advance or supply funds for the purchase or payment of the
guaranteed obligations or to maintain a working capital or other balance sheet
condition; or (c) to lease property or to purchase any debt or equity securities
or other property or services.
"Intercompany Accounts" means all assets and liabilities,
however arising, which are due to the Borrower from, which are due from the
Borrower to, or which otherwise arise from any transaction by the Borrower with,
any Affiliate.
"Intercreditor Agreement" means the Intercreditor Agreement
dated as of June 15, 2000 by and among State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee/lessor, the Credit Agent (as
defined in the Intercreditor Agreement) and the Collateral Agent, and
acknowledged by the Borrower and the Parent.
"Interest Period" means, as to any LIBOR Rate Loan, the period
commencing on the Funding Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as a LIBOR Rate Loan, and
ending on the date one, two, three or six months thereafter as selected by the
Borrower in its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
(i)......if any Interest Period would otherwise end on a day
that is not a Business Day, that Interest Period shall be extended to the
following Business Day unless the result of such extension would be to carry
such Interest Period into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;
(ii).....any Interest Period pertaining to a LIBOR Rate Loan
that begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of the calendar month
at the end of such Interest Period; and
(iii)....no Interest Period shall extend beyond the Stated
Termination Date.
"Interest Rate" means each or any of the interest rates,
including the Default Rate, set forth in Section 3.1.
"Interest Rate Protection or Other Hedging Agreement" means
one or more (i) interest rate protection agreements (including, without
limitation, swaps, caps, floors, collars
19
and similar agreements), (ii) foreign exchange contracts, currency swap
agreements or other similar agreements or arrangements designed to protect
against the fluctuations in currency values and/or (iii) other types of hedging
agreements from time to time entered into by Parent or any of its Subsidiaries
with BofA, any Lender or a syndicate of financial institutions organized by BofA
or any such Lender or an affiliate of BofA or such Lender.
"Inventory" means all of the Borrower's now owned and
hereafter acquired inventory, goods and merchandise, wherever located, to be
furnished under any contract of service or held for sale or lease, all returned
goods, raw materials, other materials and supplies of any kind, nature or
description which are or might be consumed in the Borrower's business or used in
connection with the packing, shipping, advertising, selling or finishing of such
goods, merchandise and such other personal property, and all documents of title
or other documents representing them.
"IRS" means the Internal Revenue Service and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Latest Projections" means: (a) on the Closing Date and
thereafter until the Agent receives new projections pursuant to Section 7.2(f),
the projections of the Borrower's financial condition, results of operations,
and cash flow, for each of Fiscal Years 2002 through and including 2007 and
delivered to the Agent prior to the Closing Date; and (b) thereafter, the
projections most recently received by the Agent pursuant to Section 7.2(f).
"Lender" and "Lenders" have the meanings specified in the
introductory paragraph hereof and shall include the Agent to the extent of any
Agent Advance outstanding and BofA to the extent of any BofA Loan outstanding;
provided that no such Agent Advance or BofA Loan shall be taken into account in
determining any Lender's Pro Rata Share.
"Letter of Credit" means a letter of credit issued or caused
to be issued for the account of the Borrower pursuant to Section 2.4.
"Letter of Credit Fee" has the meaning specified in Section
3.6.
"LIBOR Interest Payment Date" means, with respect to a LIBOR
Rate Loan having an Interest Period of one, two or three months, the last day of
the Interest Period applicable to such loan and, with respect to a LIBOR Rate
Loan having an Interest Period of six months, the date which occurs three months
after the initial date of such Interest Period, each of the dates which occur
one and two months after the end of such third month and the last day of such
Interest Period.
"LIBOR Rate" means, for any Interest Period, with respect to
LIBOR Rate Loans comprising part of the same Borrowing, the rate of interest per
annum (rounded upward to the next 1/1000th of 1.0%) determined by the Agent as
follows:
LIBOR Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
20
where:
"Eurodollar Reserve Percentage" means for any day for
any Interest Period the maximum reserve percentage (expressed
as a decimal, rounded upward to the next 1/100th of 1%) in
effect on such day (whether or not applicable to any Lender)
under regulations issued from time to time by the Federal
Reserve Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding
(currently referred to as "Eurocurrency liabilities"); and
"LIBOR" means the rate of interest per annum (rounded
upward to the next 1/16th of 1%) notified to the Agent by BofA
as the rate of interest at which dollar deposits in the
approximate amount of the Loan to be made or continued as, or
converted into, a LIBOR Rate Loan and having a maturity
comparable to such Interest Period would be offered by BofA's
applicable lending office to major banks in the London
eurodollar market at approximately 11:00 a.m. (London time)
two Business Days prior to the commencement of such Interest
Period.
"LIBOR Rate Loans" means, collectively, the LIBOR Revolving
Loans and the LIBOR Term Loans.
"LIBOR Revolving Loan" means a Revolving Loan during any
period in which it bears interest based on the LIBOR Rate.
"LIBOR Term Loan" means any portion of a Term Loan during any
period in which such portion bears interest based on the LIBOR Rate.
"Lien" means: (a) any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner of the
property, whether such interest is based on the common law, statute, or
contract, and including without limitation, a security interest, charge, claim,
or lien arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, agreement, security agreement,
conditional sale or trust receipt or a lease, consignment or bailment for
security purposes; and (b) to the extent not included under clause (a), any
reservation, exception, encroachment, easement, right-of-way, covenant,
condition, restriction, lease or other title exception or encumbrance affecting
real property.
"Lily Credit Facility" means the Term and Revolving Credit
Facilities Agreement, dated as of June 15, 1998, among Lily Cup, the financial
institutions party thereto and General Electric Capital Canada Inc., as lender,
as amended, modified or supplemented from time to time pursuant to the terms
thereof, and any other document or instrument entered into by Lily Cup in
connection therewith.
"Lily Cup" means Lily Cups, Inc., a Canadian corporation and a
Subsidiary of the Borrower.
21
"Loan Account" means the loan account of the Borrower, which
account shall be maintained by the Agent.
"Loan Documents" means this Agreement, the Term Loan Notes,
the Fee Letter, the Borrower Security Agreement, the Trademark, Patent and
Copyright Agreements, the Sherwood Assignment of Contract As Collateral
Security, the Dopaco Assignment of Contract As Collateral Security, the
Mortgages, the Parent Guaranty, the Parent Security Agreement, the Pledge
Agreement, the Parent Pledge Agreement, the Intercreditor Agreement, the Bank
Assignment Agreement, all other Credit Documents (as defined in the Original
Credit Agreement) to the extent assigned to BABC or the Agent pursuant to or as
contemplated by the Bank Assignment Agreement and any other agreements,
instruments and documents heretofore, now or hereafter evidencing, securing,
guaranteeing or otherwise executed and/or delivered in connection with the
Obligations, the Collateral or any other aspect of the financing transactions by
or with the Lenders and/or the Agent contemplated by this Agreement.
"Loans" means, collectively, all loans and advances provided
for in Article 2.
"Majority Lenders" means at any time Lenders whose Pro Rata
Shares aggregate more than 50%.
"Management Services Agreement" means the Second Restated
Management Services Agreement, dated as of March 12, 1998, by and among American
Industrial Partners Management Company, Inc., the Borrower, Parent and SF
Holdings.
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business, properties or
financial condition of Parent and the Borrower taken as a whole or a material
portion of the Collateral; (b) an impairment of the ability of the Borrower or
Parent to perform any material obligation under any Loan Document; or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against the Borrower or Parent of any Loan Document; provided,
however, that solely for purposes of Section 11.1(m), "Material Adverse Effect"
means the occurrence of any of the following: (i) in any calendar year the
Borrower loses a customer the sales to whom for the immediately preceding
calendar year accounted for 10% or more of the Borrower's total sales volume for
such immediately preceding year; (ii) the Borrower is at any time required to
purchase 10% or more of its raw materials on a cash on delivery or cash in
advance basis as the result of one or more vendor's unwillingness to extend
credit to the Borrower; (iii) the Borrower or Parent shall suffer a labor
strike, walkout, work stoppage or similar labor dispute which affects, without
duplication, 10% or more of the combined workforce of Borrower and Parent, (iv)
within a 60 day time period, $5,000,000 or more of Inventory (valued at the
lower of cost or market) shall be subject to a product recall or similar product
defect occurrence, (v) any of the President, Chief Executive Officer, Chief
Financial Officer or Chief Operating Officer of the Borrower is convicted of a
criminal offense; (vi) the loss of production of 10% or more of Inventory for a
period of greater than 5 consecutive days due to either or both of equipment
failure or labor strike, stoppage,
22
walkout or other labor related reason; (vii) a "force majeure event" occurs
which negatively impacts 10% or more of the Borrower's revenues, which loss of
revenues is not fully covered by insurance; or (viii) the Borrower or Parent is
unable to acquire DSP equipment consistent with projections previously given to
(and accepted by ) the Agent as a result of suppliers' inability or refusal to
provide such equipment to the Borrower or Parent.
"Maximum Revolver Amount" means at any time the lesser of (i)
that amount which is $235,000,000 less the aggregate outstanding principal
balance of the Term Loans at such time and (ii) $215,000,000, as reduced as
provided in Section 4.5(b).
"Mortgages" means: (a) each Mortgage, Security Agreement, and
Assignment of Leases and Rents (or similar agreement) entered into or to be
entered into by the Borrower or Parent in favor of the Agent and delivered to
the Agent; and (b) all other real property mortgages, leasehold mortgages,
assignments of leases, mortgage deeds, deeds of trust, deeds to secure debt,
security agreements, and other similar instruments entered into or to be entered
into which provide the Agent a lien, for the benefit of the Agent and the
Lenders, on or other interest in any portion of any Premises, any Real Estate or
any other real property in which Parent or any of its Subsidiaries has an
interest or which relate to any such Lien or interest (including, without
limitation, any of the foregoing executed in connection with the Original Credit
Agreement and assigned by Bankers Trust Company, as collateral agent, to the
Agent as contemplated by the Bank Assignment Agreement).
"Multi-employer Plan" means a "multi-employer plan" as defined
in Section 4001(a)(3) of ERISA which is or was at any time during the current
year or the immediately preceding six (6) years contributed to by the Borrower,
Parent or any ERISA Affiliate.
"Net Amount of Eligible Accounts" means, at any time, the
gross amount of Eligible Accounts less sales, excise or similar taxes, and less
returns, discounts, claims, credits and allowances of any nature at any time
issued, owing, granted, outstanding, available or claimed.
"Notice of Borrowing" has the meaning specified in Section
2.2(b), the form of which is attached as Exhibit E.
"Notice of Conversion/Continuation" has the meaning specified
in Section 3.2(b), the form of which is attached as Exhibit F.
"Obligations" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by the Borrower to
the Agent and/or any Lender, arising under or pursuant to this Agreement
(including, without limitation, pursuant to the Existing Loan and Security
Agreement) or any of the other Loan Documents, whether or not evidenced by any
note, or other instrument or document, whether arising from an extension of
credit, opening of a letter of credit, acceptance, loan, guaranty,
indemnification or otherwise, whether direct or indirect, absolute or
contingent, due or to become due, primary or secondary, as principal or
guarantor, and including, without limitation, all principal, interest, charges,
expenses, fees,
23
attorneys' fees, filing fees and any other sums chargeable to the Borrower
hereunder or under any of the other Loan Documents. "Obligations" includes,
without limitation, all debts, liabilities, and obligations now or hereafter
owing from the Borrower to the Agent and/or any Lender under or in connection
with the Letters of Credit.
"Original Closing Date" means October 24, 1997.
"Original Credit Agreement" has the meaning specified in the
recitals to this Agreement.
"Other Taxes" means any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other Loan
Documents.
"Parent" means Sweetheart Holdings Inc., a Delaware
corporation and the owner of 100% of the outstanding capital stock of the
Borrower.
"Parent Guaranty" means the Guaranty dated as of the Original
Closing Date made by Parent in favor of the Agent.
"Parent Pledge Agreement" means the Pledge Agreement dated as
of June 15, 2000 made by Parent in favor of the Collateral Agent.
"Parent Security Agreement" means the Amended and Restated
Security Agreement dated as of the Original Closing Date between Parent and the
Agent.
"Participating Lender" means any Person who shall have been
granted the right by any Lender to participate in the financing provided by such
Lender under the terms and conditions of this Agreement, and who shall have
entered into a participation agreement in form and substance satisfactory to
such Lender.
"Payment Account" means each blocked bank account established
pursuant to Section 6.9, to which the funds of the Borrower (including, without
limitation, proceeds of Accounts and other Collateral) are deposited or
credited, and which is maintained in the name of the Agent or the Borrower, as
the Agent may determine, on terms reasonably acceptable to the Agent.
"Payment and Termination Date" means the first date on which
all of the following are satisfied: the Commitments of all Lenders have been
terminated, all outstanding monetary Obligations have been paid in full and all
Letters of Credit have been terminated or canceled or have expired (or
Supporting Letters of Credit have been delivered to the Agent therefor in
accordance with Section 2.4(j)).
"PBGC" means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to the functions thereof.
24
"Pending Revolving Loans" means, at any time, the aggregate
principal amount of all Revolving Loans requested in any Notice(s) of Borrowing
received by the Agent which have not yet been advanced and for which the Lenders
will advance unless the Agent has notified the Borrower that such Revolving
Loan(s) will not be funded.
"Pension Plan" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which the Borrower or Parent
sponsors, maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a Multi-employer Plan has made contributions at
any time during the immediately preceding five (5) plan years.
"Permitted Commodities Agreement" means any Commodities
Agreement which is entered into in the ordinary course of business by Parent
and/or any of its Subsidiaries consistent with past practices.
"Permitted Liens" means:
(a) Liens for taxes, assessments or governmental charges or
levies not delinquent or statutory Liens for taxes, assessments or governmental
charges or levies in an aggregate amount not to exceed $1,000,000 (with the
Agent having the right in its reasonable commercial discretion to establish
reserves against Availability for any amount in excess of $100,000 in the
aggregate) provided that the payment of such taxes, assessments or governmental
charges or levies which are due and payable is being contested in good faith and
by appropriate proceedings diligently pursued and as to which adequate financial
reserves have been established on the books and records of the Borrower, Parent
or its other Subsidiaries, as the case may be, and no enforcement action has
been taken;
(b) the Agent's Liens;
(c) deposits under workers' compensation, unemployment
insurance, social security and other similar laws, or to secure the performance
of bids, tenders or contracts (other than for the repayment of borrowed money)
or to secure indemnity, performance or other similar bonds for the performance
of bids, tenders or contracts (other than for the repayment of borrowed money)
or to secure statutory obligations (other than liens arising under ERISA or
Environmental Liens) or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds in the ordinary course of business;
(d) Liens securing the claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like Persons, provided
that if any such Lien arises from the nonpayment of such claims or demands when
due, such claims or demands do not exceed $1,000,000 in the aggregate (with the
Agent having the right in its reasonable commercial discretion to establish
reserves against Availability for any amount in excess of $100,000 in the
aggregate);
(e) Reservations, exceptions, encroachments, easements, rights
of way, covenants running with the land, and other similar title exceptions or
encumbrances affecting any Real Estate; provided that they do not in the
aggregate materially detract from the value of the
25
Real Estate or materially interfere with its use in the ordinary conduct of the
Borrower's or Parent's business;
(f) Judgment and other similar Liens arising in connection
with court proceedings to the extent the attachment or enforcement of such Liens
would not result in an Event of Default hereunder;
(g) Liens securing the obligations of the Borrower and Parent
under the Secured Sale/Leaseback Arrangements, subject to the terms and
conditions set forth in the Intercreditor Agreement; provided that such Liens
shall not in any event (i) encumber any Excluded Sale/Leaseback Assets or (ii)
secure greater than $165,000,000 in obligations owing by the Borrower under the
Secured Sale/Leaseback Documents;
(h) Purchase Money Liens;
(i) Liens in existence on the Closing Date which are listed,
and the property subject thereto described, in Schedule 9.19 (Liens referred to
in this clause (i) are herein referred to as "Existing Liens") but only to the
respective date, if any, set forth in such Schedule 9.19 for the termination of
any such Liens and Liens on property securing Debt which constitutes an
extension, renewal or refinancing of Existing Debt, which extension, renewal or
refinancing is permitted pursuant to Section 9.13; provided that (i) the
principal amount of such Debt does not exceed the principal amount of the
Existing Debt being extended, renewed or refinanced at the time of such
extension, renewal or refinancing, and (ii) such Lien secures only such Debt and
applies only to the property subject to the Existing Lien securing the Existing
Debt being extended, renewed or refinanced;
(j) Liens arising as a result of non-recourse, sale-leaseback
transactions with respect to any Real Estate, so long as the respective
transaction, and all documentation with respect thereto, is approved by the
Agent and additionally is either approved by the Majority Lenders or permitted
under Section 9.24;
(k) Liens upon assets subject to Capital Leases to the extent
permitted by Section 9.23, provided that (i) such Liens only serve to secure the
payment arising under such Capital Lease and (ii) the Lien encumbering the asset
giving rise to the Capital Lease does not encumber any other asset of Parent or
any of its Subsidiaries;
(l) deposits securing liabilities to insurance carriers under
insurance or self-insurance arrangements, provided that the aggregate amount of
cash and non-cash collateral so deposited shall at no time exceed $15,000,000;
(m) with respect to any Real Estate subject to a Mortgage
assigned by Bankers Trust Company, as collateral agent, to the Agent as
contemplated by the Bank Assignment Agreement, such exceptions to title as are
set forth in the title insurance policy or title commitment delivered to such
collateral agent when such Mortgage was executed;
(n) Liens on the assets of Lily Cup securing only the Debt of
Lily Cup permitted to be incurred pursuant to Section 9.13(d)(y); and
26
(o) Liens, if any, on fixed assets of the Borrower securing
the obligations of the Borrower under the Senior Replacement Notes (but only
upon (x) the redemption and/or payment in full of the Senior Subordinated Notes
and Term Loans with the proceeds thereof and (y) if requested by the Agent or
the Majority Lenders, the holders of the Senior Replacement Notes (or a trustee
on their behalf), the Agent and the other parties to the Intercreditor Agreement
having entered into an amendment to the Intercreditor Agreement or an amended
and restated Intercreditor Agreement, in form, scope and substance satisfactory
to the Agent), subject to the terms and conditions set forth in the
Intercreditor Agreement and in this Agreement.
"Permitted Rentals" has the meaning specified in Section 9.24.
"Person" means any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, unincorporated
organization, association, corporation, Governmental Authority, or any other
entity.
"Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Borrower or Parent sponsors or maintains or to which
the Borrower or Parent makes, is making, or is obligated to make contributions
and includes any Pension Plan.
"Pledge Agreement" means the Pledge Agreement dated as of June
15, 2000 made by the Borrower in favor of the Collateral Agent.
"PNC" means PNC Bank, National Association.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Premises" means the land identified by addresses on Schedule
8.12, together with all buildings, improvements, and fixtures thereon and all
tenements, hereditaments, and appurtenances belonging or in any way appertaining
thereto, and which constitutes all of the real property in which the Borrower or
Parent has any interests on the Closing Date.
"Pro Rata Share" means, with respect to a Lender at any time,
a fraction (expressed as a percentage), the numerator of which is the amount of
such Lender's Commitment at such time and the denominator of which is the sum of
the amounts of all of the Lenders' Commitments at such time, or if no
Commitments are outstanding, a fraction (expressed as a percentage), the
numerator of which is the amount of Obligations owing to such Lender at such
time and the denominator of which is the aggregate amount of Obligations owing
to all of the Lenders at such time; provided that references to Pro Rata Share
in the context solely of the Term Loans means, with respect to a Lender at any
time, a fraction (expressed as a percentage), the numerator of which is the
aggregate unpaid principal balance of the Term Loans owing to such Lender at
such time and the denominator of which is the aggregate unpaid principal balance
of the Term Loans owing to all of the Lenders at such time.
27
"Proprietary Rights" means all of the Borrower's now owned and
hereafter arising or acquired: licenses, franchises, permits, patents, patent
rights, copyrights, works which are the subject matter of copyrights,
trademarks, service marks, trade names, trade styles, patent, trademark and
service ▇▇▇▇ applications, and all licenses and rights related to any of the
foregoing, including, without limitation, those patents, registered trademarks,
registered service marks and registered copyrights set forth on Schedule 8.13
hereto, and all other rights under any of the foregoing, all extensions,
renewals, reissues, divisions, continuations, and continuations-in-part of any
of the foregoing, and all rights to ▇▇▇ for past, present and future
infringement of any of the foregoing.
"Purchase Money Lien" means a lien granted on a fixed asset
(not including Inventory) to secure a Purchase Money Obligation permitted to be
incurred hereunder, and incurred solely to finance the acquisition of such
asset; provided, however, that such lien encumbers only such asset and is
granted within 180 days of such acquisition.
"Purchase Money Obligations" of any Person means any
obligations of such Person to any seller or any other Person incurred or assumed
to finance the acquisition of real or personal property (other than Inventory)
to be used in the business of such Person or any of its Subsidiaries in an
amount that is not more than 100% of the cost of such property, and incurred
within 180 days after the date of such acquisition (excluding accounts payable
to trade creditors incurred in the ordinary course of business).
"Real Estate" means all of the present and future interests of
the Borrower or Parent (as appropriate), as owner, lessee, or otherwise, in the
Premises, including, without limitation, any interest arising from an option to
purchase or lease the Premises or any portion thereof.
"Release" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Contaminant into the indoor or outdoor environment or into or out of any Real
Estate or other property, including the migration of Contaminants through or in
the air, soil, surface water, groundwater or Real Estate or other property.
"Rentals" has the meaning specified in Section 9.24.
"Replacement Election" has the meaning specified in Section
4.5(b).
"Replacement Notice" means, with respect to a sale or other
disposition of assets referred to in clause (iii) of the first sentence of
Section 4.5(b), a written notice signed by the Borrower stating that the
Borrower, in good faith, intends and expects to use all or a specified portion
of the net after tax proceeds from such sale or other disposition to purchase
replacement Equipment in accordance with such clause (iii).
"Replacement Prepayment Amount" means, with respect to any
Replacement Election, the amount, if any, on the Replacement Prepayment Date
relating thereto by which (i) the Anticipated Replacement Amount in respect of
such Replacement Election exceeds (ii) the
28
aggregate amount thereof expended by the Borrower to purchase replacement
Equipment in accordance with clause (iii) of the first sentence of Section
4.5(b).
"Replacement Prepayment Date" means, with respect to any
Replacement Election, the earliest of (i) the date, if any, upon which the Agent
shall have delivered a written termination notice to the Borrower with respect
to the Replacement Election, provided that such notice may only be given while
an Event of Default exists, (ii) the date occurring 270 days after the date of
the consummation of the sale or other disposition of the assets relating to such
Replacement Election and (iii) the date on which the Borrower shall have
determined not to, or shall have otherwise ceased to, proceed with the purchase
of replacement Equipment in accordance with clause (iii) of the first sentence
of Section 4.5(b) with the related Anticipated Replacement Amount.
"Reportable Event" means any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"Required Lenders" means at any time Lenders whose Pro Rata
Shares aggregate more than 66-2/3%.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of an
arbitrator or of a Governmental Authority, in each case applicable to or binding
upon the Person or any of its property or to which the Person or any of its
property is subject.
"Responsible Officer" means the chief executive officer or the
president of the Borrower, or any other officer having substantially the same
authority and responsibility; or, with respect to compliance with financial
covenants and the preparation of the Borrowing Base Certificate, the chief
financial officer or the treasurer of the Borrower, or any other officer having
substantially the same authority and responsibility.
"Restricted Investment" means any acquisition of property by
Parent or any of its Subsidiaries (other than Lily Cup and the Global Entities)
in exchange for cash or other property, whether in the form of an acquisition of
stock, debt, or other indebtedness or obligation, or the purchase or acquisition
of any other property, or a loan, advance, capital contribution, or
subscription, except acquisitions of the following: (a) Proprietary Rights and
Fixed Assets to be used in the business (to the extent such business is
permitted under Section 9.18) of Parent, the Borrower or its Subsidiaries (other
than Lily Cup and the Global Entities) so long as the acquisition costs thereof
constitute Capital Expenditures permitted hereunder or costs for the purchase of
General Intangibles in the ordinary course of business or ordinary and customary
supplies, in each instance for such General Intangibles and supplies, for the
operation of the business (as limited as provided above) of Parent, the Borrower
or its Subsidiaries (other than Lily Cup and the Global Entities); (b) Inventory
in the ordinary course of business; (c) current assets arising from the sale or
lease of goods or the rendition of services in the ordinary course of business
of the Borrower or its Subsidiaries (other than Lily Cup and the Global
Entities); (d) direct obligations of the United States of America, or any agency
thereof, or obligations
29
guaranteed by the United States of America, provided that such obligations
mature within one year from the date of acquisition thereof; (e) certificates of
deposit maturing within one year from the date of acquisition, bankers'
acceptances, Eurodollar bank deposits, or overnight bank deposits, in each case
issued by, created by, or with a bank or trust company organized under the laws
of the United States or any state thereof having capital and surplus aggregating
at least $100,000,000; (f) commercial paper given a rating of "A2" or better by
Standard & Poor's Corporation or "P2" or better by ▇▇▇▇▇'▇ Investors Service,
Inc. and maturing not more than 180 days from the date of creation thereof; (g)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clause (d) above and entered into with any
bank meeting the qualifications specified in clause (e) above; (h) money market
funds substantially all of the assets of which are comprised of securities of
the types described in clauses (d) - (g) above; and (i) stock, debt,
indebtedness, obligations or any other property received in consideration of any
asset sale permitted under Section 9.9.
"Revolving Loans" has the meaning specified in Section 2.2 and
includes each Agent Advance and BofA Loan.
"Secured Sale/Leaseback Arrangements" means the sale/leaseback
arrangements entered into by the Borrower pursuant to the Secured Sale/Leaseback
Documents.
"Secured Sale/Leaseback Collateral" has the meaning set forth
in the Intercreditor Agreement; provided that in any event such collateral shall
not include any Excluded Sale/Leaseback Assets.
"Secured Sale/Leaseback Documents" has the meaning set forth
in the Intercreditor Agreement.
"Security Documents" means this Agreement, the Borrower
Security Agreement, the Trademark, Patent and Copyright Agreements, the Parent
Security Agreement, the Pledge Agreement, the Parent Pledge Agreement, the
Sherwood Assignment of Contract as Collateral Security, the Dopaco Assignment of
Contract as Collateral Security, the Mortgages and all other security
agreements, mortgages, pledges and assignments at any time delivered by Parent
or any of its Subsidiaries or any other Person to the Agent pursuant to the
terms of this Agreement or any other Loan Document.
"Senior Replacement Notes" means the senior secured or
unsecured notes contemplated to be issued by the Borrower (subject to and to the
extent permitted by the terms of this Agreement) to, among other things, repay
or redeem in full all of the Senior Subordinated Notes and the Term Loans.
"Senior Secured Notes" means the $190,000,000 face amount of 9
5/8% Senior Secured Notes due 2000 issued by the Borrower (as successor to Cup
Acquisition Corporation) pursuant to an indenture dated as of August 30, 1993
(which notes were discharged and satisfied as of June 15, 2000).
30
"Senior Subordinated Notes" means the $110,000,000 face amount
of Senior Subordinated Notes due 2003 issued by the Borrower (as successor to
Cup Acquisition Corporation) pursuant to an indenture dated as of August 30,
1993.
"Settlement" and "Settlement Date" have the meanings specified
in Section 2.2(j)(i).
"SF Holdings" means SF Holdings Group, Inc., a Delaware
corporation.
"SF Holdings Senior Notes" means the 4% and 12 3/4% Senior
Discount Notes due 2008 issued by SF Holdings pursuant to an indenture dated as
of March 12, 1998.
"Shared Collateral" has the meaning set forth in the
Intercreditor Agreement.
"Sherwood" means Sherwood Industries, Inc.
"Sherwood Assignment of Contract As Collateral Security" means
the Assignment of Contract As Collateral Security by the Borrower in favor of
the Agent with respect to the Sherwood Stock Purchase Agreement.
"Sherwood-Related Merger Documents" means the documents
pursuant to which the Sherwood-Related Mergers are consummated, including,
without limitation, the documents filed with the Secretaries of State of
Delaware or Connecticut in order to effectuate such mergers.
"Sherwood-Related Mergers" means (i) the mergers of each of
the Subsidiaries of Sherwood with and into Sherwood with Sherwood as the
surviving entity of such mergers and (ii) the merger immediately thereafter of
Sherwood with and into the Borrower with the Borrower as the surviving entity of
such merger.
"Sherwood-Related Subordinated Notes" means, collectively, the
Subordinated Convertible Notes by the Borrower to the order of the sellers under
the Sherwood Stock Purchase Agreement in the aggregate principal amount of
$5,000,000 representing a portion of the purchase price payable by the Borrower
under the Sherwood Stock Purchase Agreement.
"Sherwood Stock Purchase Agreement" means the Stock Purchase
Agreement, dated as of December 20, 1999, among the Borrower, as purchaser, and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Trust, as sellers, as amended as of April 3, 2000.
"Sherwood Stock Purchase Documents" means, collectively, the
Sherwood Stock Purchase Agreement, the related amended and restated escrow
agreement, the Sherwood-Related Subordinated Notes and all other documents,
agreements and instruments executed and/or delivered in connection therewith.
"Solvent" means, when used with respect to any Person, that at
the time of determination:
31
(i) the assets of such Person, at a fair valuation,
are in excess of the total amount of its debts
(including, without limitation, contingent liabilities); and
(ii) the present fair saleable value of its assets is
greater than its probable liability on its existing debts as
such debts become absolute and matured; and
(iii) it is then able and expects to be able to pay
its debts (including, without limitation, contingent debts and
other commitments) as they mature; and
(iv) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
For purposes of determining whether a Person is Solvent, the amount of any
contingent liability shall be computed as the amount that, in light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Stated Termination Date" means the fifth anniversary of the
Closing Date; provided that (i) in the event the Borrower has not refinanced,
repaid or extended the Senior Subordinated Notes on terms reasonably acceptable
to the Agent and the Majority Lenders prior to March 1, 2003, the Stated
Termination Date means March 1, 2003 and (ii) subject to clause (i) above, in
the event the Borrower has not refinanced, repaid or extended the ▇▇▇▇▇ Senior
Subordinated Notes on terms reasonably acceptable to the Agent and the Majority
Lenders prior to September 1, 2006, the Stated Termination Date means September
1, 2006.
"Subsidiary" of a Person means any corporation, association,
partnership, joint venture or other business entity of which more than fifty
percent (50%) of the voting stock or other equity interests (in the case of
Persons other than corporations), is owned or controlled directly or indirectly
by the Person, or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly requires, references
herein to a "Subsidiary" refer to a Subsidiary of Parent.
"Suppressed Availability" means, at any time, the amount, if
any, by which (x) the amount in clause (a)(ii) of the defined term Availability
exceeds (y) the amount in clause (a) of such defined term.
"Taxes" means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by
each Lender's net income by the jurisdiction (or any political subdivision
thereof) under the laws of which such Lender or the Agent, as the case may be,
is organized or maintains a lending office.
"Term Loan" and "Term Loans" have the meanings specified in
Section 2.3(a).
32
"Term Loan Note" and "Term Loan Notes" have the meanings
specified in Section 2.3(c).
"Term Loan Reserve" means, at any time, the amount by which
the Term Loan Support (as defined below) is less than the outstanding principal
balance of the Term Loans. For purposes of this definition, "Term Loan Support"
means, at any time, the sum of (1) 82.5% of the orderly liquidation value of the
Credit Agreement Term Loan Equipment Collateral in existence on June 15, 2000,
as such orderly liquidation value was determined by the appraisal of such
Equipment dated May 2000 by ▇▇▇▇▇ ▇▇▇▇▇▇, plus (2) the lesser of (x) the sum of
80% of the orderly liquidation value of the ▇▇▇▇▇ Term Loan Equipment Collateral
in existence on the Closing Date plus 70% of the orderly liquidation value of
the land and other real estate of the Borrower (owned by ▇▇▇▇▇ immediately prior
to the consummation of the ▇▇▇▇▇/Cup Merger) located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and (y) the aggregate outstanding principal balance of
the terms loans under the Existing ▇▇▇▇▇ Credit Facility immediately prior to
the termination thereof on the Closing Date, plus (3) the Suppressed
Availability.
"Termination Date" means the earliest to occur of (i) the
Stated Termination Date, (ii) the date the Total Facility is terminated either
by the Borrower pursuant to Section 4.2 or by the Majority Lenders pursuant to
Section 11.2, and (iii) the date this Agreement is otherwise terminated for any
reason whatsoever in accordance with the terms hereof.
"Test Period" means, for any determination, the four
consecutive fiscal quarters of the Borrower then last ended (taken as one
accounting period).
"Total Facility" has the meaning specified in Section 2.1.
"Trademark, Patent and Copyright Agreements" means,
collectively, (i) the Collateral Assignment For Security in U.S. Patents, the
Collateral Assignment For Security in U.S. Trademarks, the Collateral Assignment
For Security in U.S. Copyrights, the Collateral Assignment For Security in
Canadian Patents and the Collateral Assignment For Security in Canadian
Trademarks, each dated as of August 30, 1993 by the Borrower in favor of Bankers
Trust Company, as collateral agent, the Borrower Intellectual Property Agreement
and the Holdings Intellectual Property Agreement, each dated as of August 30,
1993 and between the Borrower or Parent, respectively, and Bankers Trust
Company, as collateral agent, all of the foregoing agreements which have been
assigned to the Agent pursuant to the Bank Assignment Agreement and (ii) all
other intellectual property security agreements executed and delivered by Parent
or any of its Subsidiaries to the Agent to evidence and perfect the Agent's
security interest in such Person's present and future patents, trademarks,
copyrights and related licenses and rights, for the benefit of the Agent and the
Lenders.
"Transaction Documents" means, collectively, the Loan
Documents, the Senior Subordinated Notes, the ▇▇▇▇▇ Senior Subordinated Notes,
the Senior Replacement Notes (but only if issued), the indentures governing the
foregoing notes, the Secured Sale/Leaseback Documents and the ▇▇▇▇▇/Cup Merger
Documents.
33
"UCC" means the Uniform Commercial Code (or any successor
statute) of the State of New York or of any other state the laws of which are
required as a result thereof to be applied in connection with the issue of
perfection of security interests.
"Unused Letter of Credit Subfacility" means an amount equal to
$25,000,000 minus the sum of (a) the aggregate undrawn amount of all outstanding
Letters of Credit plus (b) without duplication, the aggregate unpaid
reimbursement obligations with respect to all Letters of Credit.
"Unused Line Fee" has the meaning specified in Section 3.5.
"Unfunded Pension Liability" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"Wholly-Owned Subsidiary" means, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
1.2 Accounting Terms. Any accounting term used in this Agreement
shall have, unless otherwise specifically provided herein, the meaning
customarily given in accordance with GAAP, and all financial computations
hereunder shall be computed, unless otherwise specifically provided herein, in
accordance with GAAP as consistently applied and using the same method for
inventory valuation as used in the preparation of the Financial Statements. All
calculations to be made for the purposes of determining compliance with the
financial covenants contained in this Agreement (except as otherwise expressly
provided herein) shall be made by application of GAAP applied on a basis
consistent with the most recent annual or quarterly financial statements
delivered pursuant to Section 7.2 (or, prior to the delivery of the first
financial statements pursuant to Section 7.2, consistent with GAAP effective on
the Original Closing Date); provided, however, that if (a) the Borrower shall
object to determining such compliance on such basis at the time of delivery of
such financial statements due to any change in GAAP or other rules promulgated
with respect thereto or (b) the Agent or the Majority Lenders shall so object in
writing within 30 days after delivery of such financial statements, then such
calculations shall be made on a basis consistent with the most recent annual or
quarterly financial statements delivered by the Borrower to the Agent as to
which no objection shall have been made.
1.3 Interpretive Provisions. The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.
(a) The words "hereof," "herein," "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and Subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
34
(b) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(i) The term "including" is not limiting and
means "including without limitation."
(ii) In the computation of periods of time from
a specified date to a later specified date, the word "from" means "from and
including," the words "to" and "until" each mean "to but excluding" and the word
"through" means "to and including."
(c) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement), indentures and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and (ii)
references to any statute or regulation are to be construed as including all
statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting the statute or regulation.
(d) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(e) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(f) This Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to the Agent, the
Borrower and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Lenders or the Agent merely
because of the Agent's or Lenders' involvement in their preparation.
ARTICLE 2
LOANS AND LETTERS OF CREDIT
2.1 Total Facility. Subject to all of the terms and conditions of
this Agreement, the Lenders severally agree to make available a total credit
facility of up to $235,000,000 (the "Total Facility") for the Borrower's use
from time to time during the term of this Agreement. The Total Facility shall be
comprised of (a) a revolving line of credit consisting of revolving loans and
letters of credit up to the Maximum Revolver Amount, as described in Sections
2.2 and 2.4, (b) term loans made on June 15, 2000 in the aggregate original
principal amount of $25,000,000 (the aggregate outstanding principal amount of
which on the date hereof is $10,440,908.84), as described in Section 2.3, and
(c) term loans to be made on the Closing Date in the aggregate original
principal amount of $13,250,000, as described in Section 2.3.
2.2 Revolving Loans.
35
(a) Amounts. Subject to the satisfaction of the conditions
precedent set forth in Article 10, each Lender severally agrees, upon the
Borrower's request from time to time on any Business Day during the period from
the Original Closing Date to the Termination Date, to make revolving loans (the
"Revolving Loans") to the Borrower, in amounts not to exceed (except for BofA
with respect to BofA Loans or Agent Advances) such Lender's Pro Rata Share of
the Borrower's Availability. The Lenders, however, in their discretion, may
elect to make Revolving Loans or participate (as provided for in Section 2.4(f))
in the credit support or enhancement provided through the Agent to the issuers
of Letters of Credit in excess of the Availability on one or more occasions, but
if they do so, neither the Agent nor the Lenders shall be deemed thereby to have
changed the limits of the Maximum Revolver Amount or the Availability or to be
obligated to exceed such limits on any other occasion. If the requested
Revolving Loans exceed the Availability at such time, the Lenders may refuse to
make or otherwise restrict the making of such requested Revolving Loans as the
Lenders determine until such excess has been eliminated, subject to the Agent's
authority, in its sole discretion, to make Agent Advances pursuant to the terms
of Section 2.2(i). The Borrower acknowledges and agrees that the payment (the
"Assignment Payment") made on the Original Closing Date pursuant to Section
3(a)(i) of the Bank Assignment Agreement by BABC to those banks and other
financial institutions party to the Original Credit Agreement with respect to
the purchase of the outstanding loans made to the Borrower under the Original
Credit Agreement shall constitute a Revolving Loan requested by the Borrower in
the amount of such payment.
(b) Procedure for Borrowing. Each Borrowing shall be made upon
the Borrower's irrevocable written notice delivered to the Agent in the form of
a Notice of Borrowing together with a Borrowing Base Certificate reflecting
sufficient Availability, which must be received by the Agent (x) prior to 11:00
a.m. (New York time) three Business Days prior to the requested Funding Date, in
the case of LIBOR Revolving Loans and (y) no later than 12:00 noon (New York
time) on the requested Funding Date, in the case of Base Rate Revolving Loans,
specifying:
(A) the amount of the Borrowing;
(B) the requested Funding Date, which shall be a
Business Day;
(C) whether the Revolving Loans requested are
to be Base Rate Revolving Loans or LIBOR
Revolving Loans; and
(D) the duration of the Interest Period if the
requested Revolving Loans are to be LIBOR
Revolving Loans. If the Notice of Borrowing
fails to specify the duration of the
Interest Period for any Borrowing comprised
of LIBOR Revolving Loans, such Interest
Period shall be three months.
(ii) After giving effect to any Borrowing, there
may not be more than eight (eleven so long as any Term Loan remains outstanding)
different Interest Periods in effect under the Total Facility.
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(iii) With respect to any request for Base
Rate Revolving Loans, in lieu of delivering the above-described Notice of
Borrowing the Borrower may give the Agent telephonic notice of such request by
the required time, with such telephonic notice to be confirmed in writing within
24 hours of the giving of such notice but the Agent shall be entitled to rely on
the telephonic notice in making such Revolving Loans.
(c) Reliance upon Authority. On or prior to the Original
Closing Date and thereafter prior to any change with respect to any of the
information contained in the following clauses (i) and (ii), the Borrower shall
deliver to the Agent in writing (i) the account of the Borrower to which the
Agent is authorized to transfer the proceeds of the Revolving Loans requested
pursuant to this Section 2.2, and (ii) the names of the officers authorized to
request Revolving Loans on behalf of the Borrower, and shall provide the Agent
with a specimen signature of each such officer. The Agent shall be entitled to
rely conclusively on such officer's authority to request Revolving Loans on
behalf of the Borrower, the proceeds of which are to be transferred to any of
the accounts specified by the Borrower pursuant to the immediately preceding
sentence, until the Agent receives written notice to the contrary. The Agent
shall have no duty to verify the identity of any individual representing him or
herself as one of the officers authorized by the Borrower to make such requests
on its behalf.
(d) No Liability. The Agent shall not incur any liability to
the Borrower as a result of acting upon any notice referred to in Sections
2.2(b) and (c), which notice the Agent believes in good faith to have been given
by an officer duly authorized by the Borrower to request Revolving Loans on its
behalf or for otherwise acting in good faith under this Section 2.2, and the
crediting of Revolving Loans to the Borrower's deposit account, or transmittal
to such Person as the Borrower shall direct, shall conclusively establish the
obligation of the Borrower to repay such Revolving Loans as provided herein.
(e) Notice Irrevocable. Any Notice of Borrowing(or telephonic
notice in lieu thereof) made pursuant to Section 2.2(b)shall be irrevocable and
the Borrower shall be bound to borrow the funds requested therein in accordance
therewith.
(f) Agent's Election. Promptly after receipt of a Notice of
Borrowing (or telephonic notice in lieu thereof) pursuant to Section 2.2(b), the
Agent shall elect, in its discretion, (i) to have the terms of Section 2.2(g)
apply to such requested Borrowing, or (ii) to request BofA to make a BofA Loan
pursuant to the terms of Section 2.2(h) in the amount of the requested
Borrowing; provided, however, that if BofA declines in its sole discretion to
make a BofA Loan pursuant to Section 2.2(h), the Agent shall elect to have the
terms of Section 2.2(g) apply to such requested Borrowing. Notwithstanding the
other provisions of this Article 2, (i) Section 2.2(g) shall apply with respect
to the Borrowing of Revolving Loans on the Closing Date and (ii) the portion of
such Borrowing to be funded by each Lender shall be that amount which is the
excess of (x) such Lender's Pro Rata Share of the aggregate outstanding
principal balance of the Revolving Loans on the Closing Date after giving effect
to the making of all Revolving Loans on the Closing Date over (y) the aggregate
outstanding principal balance of the Revolving Loans, if any, held by such
Lender immediately prior to the making of Revolving Loans on the Closing Date
(it being the intention of the parties hereto that after giving effect to the
making of the Revolving Loans on the Closing Date each Lender shall have a Pro
Rata Share
37
of all the Revolving Loans of the Lenders hereunder). The Agent shall determine
on or prior to the Closing Date the portion of the Borrowing of Revolving Loans
to be made on the Closing Date to be funded by each Lender and shall notify each
Lender thereof promptly after such determination.
(g) Making of Revolving Loans. In the event that the Agent
shall elect to have the terms of this Section 2.2(g) apply to a requested
Borrowing as described in Section 2.2(f), then promptly after receipt of a
Notice of Borrowing or telephonic notice pursuant to Section 2.2(b), the Agent
shall notify the Lenders by telecopy, telephone or other similar form of
transmission, of the requested Borrowing. Each Lender shall make the amount of
such Lender's Pro Rata Share of the requested Borrowing available to the Agent
in same day funds, to such account of the Agent as the Agent may designate, not
later than 2:00 p.m. (New York time) on the Funding Date applicable thereto.
After the Agent's receipt of the proceeds of such Revolving Loans, upon
satisfaction of the applicable conditions precedent set forth in Article 10, the
Agent shall make the proceeds of such Revolving Loans available to the Borrower
on the applicable Funding Date by transferring same day funds equal to the
proceeds of such Revolving Loans received by the Agent to the account of the
Borrower, designated in writing by the Borrower and acceptable to the Agent;
provided, however, that the amount of Revolving Loans so made on any date shall
in no event exceed the Availability of the Borrower on such date.
(i) Unless the Agent receives notice from a
Lender on or prior to the Original Closing Date or, with respect to any
Borrowing after the Original Closing Date, at least one Business Day prior to
the date of such Borrowing, that such Lender will not make available as and when
required hereunder to the Agent for the account of the Borrower the amount of
that Lender's Pro Rata Share of the Borrowing, the Agent may assume that each
Lender has made such amount available to the Agent in immediately available
funds on the Funding Date and the Agent may (but shall not be so required), in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent any Lender shall not have made its
full amount available to the Agent in immediately available funds and the Agent
in such circumstances has made available to the Borrower such amount, that
Lender shall on the Business Day following such Funding Date make such amount
available to the Agent, together with interest at the Federal Funds Rate for
each day during such period. A notice of the Agent submitted to any Lender with
respect to amounts owing under this subsection shall be conclusive, absent
manifest error. If such amount is so made available, such payment to the Agent
shall constitute such Lender's Revolving Loan on the date of Borrowing for all
purposes of this Agreement. If such amount is not made available to the Agent on
the Business Day following the Funding Date, the Agent will notify the Borrower
of such failure to fund and, upon demand by the Agent, the Borrower shall pay
such amount to the Agent for the Agent's account, together with interest thereon
for each day elapsed since the date of such Borrowing, at a rate per annum equal
to the interest rate applicable at the time to the Revolving Loans comprising
such Borrowing. The failure of any Lender to make any Revolving Loan on any
Funding Date (any such Lender, prior to the cure of such failure, being
hereinafter referred to as a "Defaulting Lender") shall not relieve any other
Lender of any obligation hereunder to make a Revolving Loan on such Funding
Date, but no Lender shall be responsible for the failure of any other Lender to
make the Revolving Loan to be made by such other Lender on any Funding Date.
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(ii) The Agent shall not be obligated to transfer
to a Defaulting Lender any payments made by the Borrower to the Agent for the
Defaulting Lender's benefit; nor shall a Defaulting Lender be entitled to the
sharing of any payments hereunder. Amounts payable to a Defaulting Lender shall
instead be paid to or retained by the Agent. The Agent may hold and, in its
discretion, re-lend to the Borrower the amount of all such payments received or
retained by it for the account of such Defaulting Lender. Any amounts so re-lent
to the Borrower shall bear interest at the rate applicable to Base Rate
Revolving Loans and for all other purposes of this Agreement shall be treated as
if they were Revolving Loans, provided, however, that for purposes of voting or
consenting to matters with respect to the Loan Documents and determining Pro
Rata Shares, such Defaulting Lender shall be deemed not to be a "Lender" and
such Lender's Commitment and Term Loans shall be deemed to be zero (0). Until a
Defaulting Lender cures its failure to fund its Pro Rata Share of any Borrowing
(1) such Defaulting Lender shall not be entitled to any portion of the Unused
Line Fee and (2) the Unused Line Fee shall accrue in favor of the Lenders which
have funded their respective Pro Rata Shares of such requested Borrowing, shall
be allocated among such performing Lenders ratably based upon their relative
Commitments, and shall be calculated based upon the average amount by which the
aggregate Commitments of such performing Lenders (but only the portion thereof
with respect to the revolving line of credit facility under the Total Facility)
exceeds the sum of outstanding Revolving Loans and the undrawn face amount of
all outstanding Letters of Credit. This section shall remain effective with
respect to such Lender until such time as the Defaulting Lender shall no longer
be in default of any of its obligations under this Agreement. The terms of this
Section shall not be construed to increase or otherwise affect the Commitment of
any Lender, or relieve or excuse the performance by the Borrower of its duties
and obligations hereunder.
(h) Making of BofA Loans. In the event the Agent shall elect,
with the consent of BofA, to have the terms of this Section 2.2(h) apply to a
requested Borrowing as described in Section 2.2(f), BofA shall make a Revolving
Loan in the amount of such Borrowing (any such Revolving Loan made solely by
BofA pursuant to this Section 2.2(h) being referred to as a "BofA Loan" and such
Revolving Loans being referred to collectively as "BofA Loans") available to the
Borrower on the Funding Date applicable thereto by transferring same day funds
to an account of the Borrower, designated in writing by the Borrower and
acceptable to the Agent. Each BofA Loan is a Revolving Loan hereunder and shall
be subject to all the terms and conditions applicable to other Revolving Loans
except that all payments thereon shall be payable to BofA solely for its own
account (and for the account of the holder of any participation interest with
respect to such Revolving Loan). The Agent shall not request BofA to make any
BofA Loan if (i) the Agent shall have received written notice from any Lender,
or otherwise has actual knowledge, that one or more of the applicable conditions
precedent set forth in Article 10 will not be satisfied on the requested Funding
Date for the applicable Borrowing, or (ii) the requested Borrowing would exceed
the Availability of the Borrower on such Funding Date. BofA shall not otherwise
be required to determine whether the applicable conditions precedent set forth
in Article 10 have been satisfied or the requested Borrowing would exceed the
Availability of the Borrower on the Funding Date applicable thereto prior to
making, in its sole discretion, any BofA Loan. Notwithstanding Section 9.25,
BofA may, in its sole discretion, make BofA Loans which, after giving effect
thereto, would result in Availability of less than $10,000,000 (but not less
than $5,000,000), provided that the Borrower shall not permit the portion of any
such BofA Loan
39
which so results in Availability of less than $10,000,000 to be outstanding for
more than five consecutive days in any calendar quarter or more than ten days in
total in any calendar quarter.
(i) The BofA Loans shall be repayable on demand
and secured by the Collateral, shall constitute Revolving Loans and Obligations
hereunder, and shall bear interest at the rate applicable to the Revolving Loans
from time to time.
(i) Agent Advances. Subject to the limitations set forth in
the provisos contained in this Section 2.2(i), the Agent is hereby authorized by
the Lenders, from time to time in the Agent's sole discretion, (1) after the
occurrence of a Default or an Event of Default, or (2) at any time that any of
the other applicable conditions precedent set forth in Article 10 have not been
satisfied, to make Revolving Loans to the Borrower on behalf of the Lenders
which the Agent, in its reasonable business judgment, deems necessary or
desirable (A) to preserve or protect the Collateral, or any portion thereof, (B)
to enhance the likelihood of, or maximize the amount of, repayment of the Loans
and other Obligations, or (C) to pay any other amount chargeable to the Borrower
pursuant to the terms of this Agreement, including, without limitation, costs,
fees and expenses as described in Section 15.7 (any of the advances described in
this Section 2.2(i) being hereinafter referred to as "Agent Advances");
provided, that the Required Lenders may at any time revoke the Agent's
authorization contained in this Section 2.2(i) to make Agent Advances, any such
revocation to be in writing and to become effective prospectively upon the
Agent's receipt thereof; and provided further, that the Agent shall not make
Agent Advances above which would cause the Revolving Loans and Letters of Credit
otherwise permitted to be outstanding under this Agreement to exceed the lesser
of the Maximum Revolver Amount and the Availability (calculated without giving
effect to clauses (b)(i) and (b)(iii) of the definition thereof) then in effect.
(i) The Agent Advances shall be repayable on
demand and secured by the Collateral, shall constitute Revolving Loans and
Obligations hereunder, and shall bear interest at the rate applicable to the
Revolving Loans from time to time. The Agent shall notify each Lender in writing
of each such Agent Advance.
(j) Settlement. It is agreed that each Lender's funded portion
of the Revolving Loan is intended by the Lenders to be equal at all times to
such Lender's Pro Rata Share of the outstanding Revolving Loans. Notwithstanding
such agreement, the Agent, BofA, and the other Lenders agree (which agreement
shall not be for the benefit of or enforceable by the Borrower) that in order to
facilitate the administration of this Agreement and the other Loan Documents,
settlement among them as to the Revolving Loans, the BofA Loans and the Agent
Advances shall take place on a periodic basis in accordance with the following
provisions:
(i) The Agent shall request settlement
("Settlement") with the Lenders on a weekly basis, or on a more frequent basis
if so determined by the Agent, (1) on behalf of BofA, with respect to each
outstanding BofA Loan, (2) for itself, with respect to each Agent Advance, and
(3) with respect to collections received, in each case, by notifying the Lenders
of such requested Settlement by telecopy, telephone or other similar form of
transmission, of such requested Settlement, no later than 1:00 p.m. (New York
time) on the date of such requested Settlement (the "Settlement Date"). Each
Lender (other than BofA, in the case of BofA Loans,
40
and the Agent, in the case of Agent Advances) shall make the amount of such
Lender's Pro Rata Share of the outstanding principal amount of the BofA Loans
and Agent Advances with respect to which Settlement is requested available to
the Agent, for itself or for the account of BofA, in same day funds, to such
account of the Agent as the Agent may designate, not later than 3:00 p.m. (New
York time), on the Settlement Date applicable thereto, regardless of whether the
applicable conditions precedent set forth in Article 10 have then been
satisfied. Such amounts made available to the Agent shall be applied against the
amounts of the applicable BofA Loan or Agent Advance and, together with the
portion of such BofA Loan or Agent Advance representing BofA's Pro Rata Share
thereof, shall constitute Revolving Loans of such Lenders. If any such amount is
not made available to the Agent by any Lender on the Settlement Date applicable
thereto, the Agent shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Federal Funds Rate for the first
three (3) days from and after the Settlement Date and thereafter at the Interest
Rate then applicable to the Revolving Loans.
(ii) Notwithstanding the foregoing, not more
than one (1) Business Day after demand is made by the Agent (whether before or
after the occurrence of a Default or an Event of Default and regardless of
whether the Agent has requested a Settlement with respect to a BofA Loan or
Agent Advance), each other Lender shall irrevocably and unconditionally purchase
and receive from BofA or the Agent, as applicable, without recourse or warranty,
an undivided interest and participation in such BofA Loan or Agent Advance to
the extent of such Lender's Pro Rata Share thereof by paying to the Agent, in
same day funds, an amount equal to such Lender's Pro Rata Share of such BofA
Loan or Agent Advance. If such amount is not in fact made available to the Agent
by any Lender, the Agent shall be entitled to recover such amount on demand from
such Lender together with interest thereon at the Federal Funds Rate for the
first three (3) days from and after such demand and thereafter at the Interest
Rate then applicable to the Revolving Loans.
(iii) From and after the date, if any, on which
any Lender purchases an undivided interest and participation in any BofA Loan or
Agent Advance pursuant to subsection (ii) above, the Agent shall promptly
distribute to such Lender at such address as such Lender may request in writing,
such Lender's Pro Rata Share of all payments of principal and interest and all
proceeds of Collateral received by the Agent in respect of such BofA Loan or
Agent Advance.
(iv) Between Settlement Dates, the Agent, to
the extent no Agent Advances or BofA Loans are outstanding, may pay over to BofA
any payments received by the Agent, which in accordance with the terms of this
Agreement would be applied to the reduction of the Revolving Loans, for
application to BofA's other outstanding Revolving Loans. If, as of any
Settlement Date, collections received since the then immediately preceding
Settlement Date have been applied to BofA's other outstanding Revolving Loans
other than to BofA Loans or Agent Advances, as provided for in the previous
sentence, BofA shall pay to the Agent for the accounts of the Lenders, to be
applied to the outstanding Revolving Loans of such Lenders, an amount such that
each Lender shall, upon receipt of such amount, have, as of such Settlement
Date, its Pro Rata Share of the Revolving Loans. During the period between
Settlement Dates, BofA with respect to BofA Loans, the Agent with respect to
Agent Advances, and each Lender with respect to the Revolving Loans other than
BofA Loans and Agent Advances, shall be
41
entitled to interest at the applicable rate or rates payable under this
Agreement on the actual average daily amount of funds employed by BofA, the
Agent and the other Lenders.
(k) Notation. The Agent shall record on its books the
principal amount of the Revolving Loans owing to each Lender, including the BofA
Loans owing to BofA, and the Agent Advances owing to the Agent, from time to
time. In addition, each Lender is authorized, at such Lender's option, to note
the date and amount of each payment or prepayment of principal of such Lender's
Revolving Loans in its books and records, including computer records, such books
and records constituting rebuttably presumptive evidence, absent manifest error,
of the accuracy of the information contained therein.
(l) Lenders' Failure to Perform. All Revolving Loans (other
than BofA Loans and Agent Advances) shall be made by the Lenders simultaneously
and in accordance with their Pro Rata Shares. It is understood that (a) no
Lender shall be responsible for any failure by any other Lender to perform its
obligation to make any Revolving Loans hereunder, nor shall any Commitment of
any Lender be increased or decreased as a result of any failure by any other
Lender to perform its obligation to make any Revolving Loans hereunder, (b) no
failure by any Lender to perform its obligation to make any Revolving Loans
hereunder shall excuse any other Lender from its obligation to make any
Revolving Loans hereunder, and (c) the obligations of each Lender hereunder
shall be several, not joint and several.
2.3 Term Loans.
(a) Amounts of Term Loans. Under the Existing Loan and
Security Agreement, one or more of the lenders thereunder made term loans to the
Borrower on June 15, 2000 in an aggregate original principal amount of
$25,000,000 (of which $10,440,908.84 is outstanding on the Closing Date and the
amount, if any, thereof held by each Lender on the Closing Date is as set forth
opposite such Lender's name on Schedule 2.3 under the column "Term Loan Balance
Under Existing Loan and Security Agreement"). Each Lender severally agrees to
make a term loan to the Borrower on the Closing Date, upon the satisfaction of
the applicable conditions precedent set forth in Article 10, in an amount equal
to the amount set forth opposite such Lender's name on Schedule 2.3 under the
column "Term Loans to be made on Closing Date" (the aggregate principal amount
of all of such term loans being made on the Closing Date being equal to
$13,250,000). Each of such term loans and each of the term loans made to the
Borrower on June 15, 2000 under the Existing Loan and Security Agreement is
herein referred to as a "Term Loan" and all such term loans are herein
collectively referred to as the "Term Loans". The Term Loans made on the Closing
Date shall initially be Base Rate Term Loans. Immediately after giving effect to
the making of the Term Loans on the Closing Date, the aggregate outstanding
principal balance of the Term Loans held by each Lender shall be the amount set
forth opposite such Lender's name on Schedule 2.3 under the column "Aggregate
Term Loan Balance as of Closing Date".
(b) Making of Term Loans on Closing Date. Each Lender shall
make the amount of such Lender's Term Loan to be made on the Closing Date
available to the Agent in same day funds, to such account of the Agent as the
Agent may designate, not later than 2:00 p.m. (New York time) on the Closing
Date. After the Agent's receipt of the proceeds of
42
such Term Loans, upon satisfaction of the applicable conditions precedent set
forth in Article 10, the Agent shall make the proceeds of such Term Loans
available to the Borrower on such Funding Date by transferring same day funds
equal to the proceeds of such Term Loans received by the Agent to an account of
the Borrower designated in writing by the Borrower or as the Borrower shall
otherwise instruct in writing.
(c) Term Loan Notes. Pursuant to the Existing Loan and
Security Agreement, the Borrower has executed and delivered to the Agent on
behalf of each relevant lender under the Existing Loan and Security Agreement a
promissory note to evidence such lender's Term Loan made under the Existing Loan
and Security Agreement. The Borrower shall execute and deliver to the Agent on
behalf of each Lender, on the Closing Date, a promissory note dated the Closing
Date, substantially in the form of Exhibit A attached hereto and made a part
hereof (such promissory notes, together with any new notes issued pursuant to
Section 13.3 upon the assignment of any portion of any Lender's Term Loans,
being hereinafter referred to collectively as the "Term Loan Notes" and each of
such promissory notes being hereinafter referred to individually as a "Term Loan
Note"), to evidence such Lender's Term Loans, in an original principal amount
equal to the outstanding principal amount of such Lender's Term Loans on the
Closing Date (after giving effect to the Term Loan to be made by such Lender on
the Closing Date) and with other appropriate insertions. Each Term Loan Note
issued to a Lender which had made a Term Loan under the Existing Loan and
Security Agreement shall replace and supersede the term loan note issued to such
Lender under the Existing Loan and Security Agreement. The principal amount of
the Term Loan Note delivered to the Agent on behalf of each Lender shall be
stated to mature in thirty-six (36) monthly installments with a final scheduled
maturity date on March 1, 2005 (or twelve (12) monthly installments with a final
scheduled maturity date on March 1, 2003 if the Stated Termination Date shall be
March 1, 2003). Each of the installments (other than the final installment) of
principal on the Term Loans to be payable to each Lender shall be in an amount
equal to such Lender's Pro Rata Share of $666,666.67 and shall be payable on the
first day of each month, commencing on April 1, 2002, and the final installment
of principal shall be in an amount equal to such Lender's Pro Rata Share of the
then remaining principal balance of the Term Loan Notes and shall be payable on
the applicable final scheduled maturity date set forth above. Each such
installment on any of the Term Loans shall be payable to the Agent for the
account of the applicable Lender.
(d) Notation and Endorsement. The Agent shall record on its
books the principal amount of the Term Loans owing to each Lender from time to
time. In addition, each Lender is authorized, at such Lender's option, to note
the date and amount of each payment or prepayment of principal of such Lender's
Term Loans in its books and records, such books and records constituting
rebuttably presumptive evidence, absent manifest error, of the accuracy of the
information contained therein. Prior to the transfer of a Term Loan Note, the
applicable Lender shall endorse on the reverse side thereof the outstanding
principal balance of the Term Loans evidenced thereby. Failure by such Lender to
make such notation or endorsement shall not affect the obligations of the
Borrower under such Term Loan Note or any of the other Loan Documents.
2.4 Letters of Credit.
43
(a) Agreement to Cause Issuance. Subject to the terms and
conditions of this Agreement, and in reliance upon the representations and
warranties of the Borrower herein set forth, the Agent agrees to take reasonable
steps to cause to be issued for the account of the Borrower and to provide
credit support or other enhancement to banks reasonably acceptable to the Agent,
which issue Letters of Credit for the account of the Borrower (any such credit
support or enhancement being herein referred to a "Credit Support") in
accordance with this Section 2.4 from time to time during the term of this
Agreement.
(b) Amounts; Outside Expiration Date. The Agent shall not have
any obligation to take steps to cause to be issued any Letter of Credit or to
provide Credit Support for any Letter of Credit at any time if: (1) the maximum
undrawn amount of the requested Letter of Credit is greater than the Unused
Letter of Credit Subfacility at such time; (2) the maximum undrawn amount of the
requested Letter of Credit and all commissions, fees, and charges due from the
Borrower in connection with the opening thereof exceed the Availability of the
Borrower at such time; or (3) such Letter of Credit has an expiration date later
than thirty (30) days prior to the Stated Termination Date or more than twelve
(12) months from the date of issuance in the case of standby letters of credit
or six (6) months from the date of issuance in the case of letters of credit
issued to support purchases of Inventory.
(c) Other Conditions. In addition to being subject to the
satisfaction of the applicable conditions precedent contained in Article 10, the
obligation of the Agent to take reasonable steps to cause to be issued any
Letter of Credit or to provide Credit Support for any Letter of Credit is
subject to the following conditions precedent having been satisfied in a manner
satisfactory to the Agent:
(1) The Borrower shall have delivered to the
proposed issuer of such Letter of Credit, at such times and in such manner as
such proposed issuer may prescribe, an application in form and substance
satisfactory to such proposed issuer and the Agent for the issuance of the
Letter of Credit and such other documents as may be required pursuant to the
terms thereof, and the form and terms of the proposed Letter of Credit shall be
satisfactory to the Agent and such proposed issuer; and
(2) As of the date of issuance, no order of any
court, arbitrator or Governmental Authority shall purport by its terms to enjoin
or restrain money center banks generally from issuing letters of credit of the
type and in the amount of the proposed Letter of Credit, and no law, rule or
regulation applicable to money center banks generally and no request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over money center banks generally shall prohibit, or
request that the proposed issuer of such Letter of Credit refrain from, the
issuance of letters of credit generally or the issuance of such Letters of
Credit.
(d) Issuance of Letters of Credit.
(1) Request for Issuance. The Borrower shall
give the Agent two (2) Business Days' prior written notice of the Borrower's
request for the issuance of a Letter of Credit. Such notice shall be irrevocable
and shall specify the original face amount of the Letter
44
of Credit requested, the effective date (which date shall be a Business Day) of
issuance of such requested Letter of Credit, whether such Letter of Credit may
be drawn in a single or in partial draws, the date on which such requested
Letter of Credit is to expire (which date shall be a Business Day), the purpose
for which such Letter of Credit is to be issued, and the beneficiary of the
requested Letter of Credit. The Borrower shall attach to such notice the
proposed form of the Letter of Credit.
(2) Responsibilities of the Agent; Issuance.
The Agent shall determine, as of the Business Day immediately preceding the
requested effective date of issuance of the Letter of Credit set forth in the
notice from the Borrower pursuant to Section 2.4(d)(1), (i) the amount of the
applicable Unused Letter of Credit Subfacility and (ii) the Availability of the
Borrower as of such date. If (i) the undrawn amount of the requested Letter of
Credit is not greater than the applicable Unused Letter of Credit Subfacility
and (ii) the issuance of such requested Letter of Credit and all commissions,
fees, and charges due from the Borrower in connection with the opening thereof
would not exceed the Availability of the Borrower, the Agent shall take
reasonable steps to cause such issuer to issue the requested Letter of Credit on
such requested effective date of issuance.
(3) Notice of Issuance. On each Settlement
Date the Agent shall give notice to each Lender of the issuance of all Letters
of Credit issued since the last Settlement Date.
(4) No Extensions or Amendment. The Agent
shall not be obligated to cause any Letter of Credit to be extended or amended
unless the requirements of this Section 2.4(d) are met as though a new Letter of
Credit were being requested and issued. With respect to any Letter of Credit
which contains any "evergreen" or automatic renewal provision, each Lender shall
be deemed to have consented to any such extension or renewal unless any such
Lender shall have provided to the Agent, not less than 30 days prior to the last
date on which the applicable issuer can in accordance with the terms of the
applicable Letter of Credit decline to extend or renew such Letter of Credit,
written notice that it declines to consent to any such extension or renewal,
provided, that if all of the requirements of this Section 3.4 are met and no
Default or Event of Default exists, no Lender shall decline to consent to any
such extension or renewal.
(e) Payments Pursuant to Letters of Credit.
(1) Payment of Letter of Credit Obligations.
The Borrower agrees to reimburse the issuer for any draw under any Letter of
Credit and the Agent for the account of the Lenders upon any payment pursuant to
any Credit Support immediately upon demand, and to pay the issuer of the Letter
of Credit the amount of all other obligations and other amounts payable to such
issuer under or in connection with any Letter of Credit immediately when due,
irrespective of any claim, setoff, defense or other right which the Borrower may
have at any time against such issuer or any other Person.
(2) Revolving Loans to Satisfy Reimbursement
Obligations. In the event that the issuer of any Letter of Credit honors a draw
under such Letter of Credit or the Agent shall have made any payment pursuant to
any Credit Support and the Borrower shall not
45
have repaid such amount to the issuer of such Letter of Credit or the Agent, as
applicable, pursuant to Section 2.4(e)(1), the Agent shall, upon receiving
notice of such failure, notify each Lender of such failure, and each Lender
shall unconditionally pay to the Agent, for the account of such issuer or the
Agent, as applicable, as and when provided hereinbelow, an amount equal to such
Lender's Pro Rata Share of the amount of such payment in Dollars and in same day
funds. If the Agent so notifies the Lenders prior to 1:00 p.m. (New York time)
on any Business Day, each Lender shall make available to the Agent the amount of
such payment, as provided in the immediately preceding sentence, on such
Business Day. Such amounts paid by the Lenders to the Agent shall constitute
Revolving Loans which shall be deemed to have been requested by the Borrower
pursuant to Section 2.2 as set forth in Section 4.7.
(f) Participations.
(1) Purchase of Participations. Immediately
upon issuance of any Letter of Credit in accordance with Section 2.4(d), each
Lender shall be deemed to have irrevocably and unconditionally purchased and
received without recourse or warranty, an undivided interest and participation
in the Letter of Credit or the Credit Support provided through the Agent to such
issuer in connection with the issuance of such Letter of Credit, equal to such
Lender's Pro Rata Share of the face amount of such Letter of Credit or the
amount of such Credit Support (including, without limitation, all obligations of
the Borrower with respect thereto, and any security therefor or guaranty
pertaining thereto).
(2) Sharing of Reimbursement Obligation
Payments. Whenever the Agent receives a payment from the Borrower on account of
reimbursement obligations in respect of a Letter of Credit or Credit Support as
to which the Agent has previously received for the account of the issuer thereof
payment from a Lender pursuant to Section 2.4(e)(2), the Agent shall promptly
pay to such Lender such Lender's Pro Rata Share of such payment from the
Borrower in Dollars. Each such payment shall be made by the Agent on the
Business Day on which the Agent receives immediately available funds paid to
such Person pursuant to the immediately preceding sentence, if received prior to
1:00 p.m. (New York time) on such Business Day and otherwise on the next
succeeding Business Day.
(3) Documentation. Upon the request of any
Lender, the Agent shall furnish to such Lender copies of any Letter of Credit,
reimbursement agreements executed in connection therewith, application for any
Letter of Credit and credit support or enhancement provided through the Agent in
connection with the issuance of any Letter of Credit, and such other
documentation as may reasonably be requested by such Lender.
(4) Obligations Irrevocable. The obligations
of each Lender to make payments to the Agent with respect to any Letter of
Credit or with respect to any Credit Support provided through the Agent with
respect to a Letter of Credit or with respect to their participation in either
of the foregoing, and the obligations of the Borrower to make payments to the
Agent, for the account of the Lenders, shall be irrevocable, not subject to any
qualification or exception whatsoever, including, without limitation, any of the
following circumstances:
46
(i) any lack of validity or
enforceability of this Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff,
defense or other right which the Borrower may have at any time against a
beneficiary named in a Letter of Credit or any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), any Lender,
the Agent, the issuer of such Letter of Credit, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transactions between the Borrower or any other Person and the beneficiary named
in any Letter of Credit);
(iii) any draft, certificate or any other
document presented under the Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any
security for the performance or observance of any of the terms of any of the
Loan Documents; or
(v) the occurrence of any Default or
Event of Default.
(g) Recovery or Avoidance of Payments. In the event any
payment by or on behalf of the Borrower received by the Agent with respect to
any Letter of Credit or Credit Support provided for any Letter of Credit (or any
guaranty by the Borrower or reimbursement obligation of the Borrower relating
thereto) and distributed by the Agent to the Lenders on account of their
respective participations therein is thereafter set aside, avoided or recovered
from the Agent in connection with any receivership, liquidation or bankruptcy
proceeding, the Lenders shall, upon demand by the Agent, pay to the Agent their
respective Pro Rata Shares of such amount set aside, avoided or recovered,
together with interest at the rate required to be paid by the Agent upon the
amount required to be repaid by it.
(h) Compensation for Letters of Credit.
(1) Letter of Credit Fee. The Borrower agrees
to pay to the Agent with respect to each Letter of Credit, for the account of
the Lenders, the Letter of Credit Fee specified in, and in accordance with the
terms of, Section 3.6.
(2) Issuer Fees and Charges. The Borrower shall
pay to the issuer of any Letter of Credit, or to the Agent, for the account of
the issuer of any such Letter of Credit, solely for such issuer's account, such
fees and other charges as are charged by such issuer for letters of credit
issued by it, including, without limitation, its standard fees for issuing,
administering, amending, renewing, paying and canceling letters of credit and
all other customary fees associated with issuing or servicing letters of credit,
as and when assessed.
(i) Indemnification; Exoneration; Power of Attorney.
(1) Indemnification. In addition to amounts
payable as elsewhere provided in this Section 2.4, the Borrower hereby agrees to
protect, indemnify, pay and save the
47
Lenders and the Agent harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) which any Lender or the Agent may incur or be subject to as a
consequence, direct or indirect, of the issuance of any Letter of Credit or the
provision of any credit support or enhancement in connection therewith. The
agreement in this Section 2.4(i)(1) shall survive payments of all Obligations.
(2) Assumption of Risk by the Borrower. As among
the Borrower, the Lenders and the Agent, the Borrower assumes all risks of the
acts and omissions of, or misuse of any of the Letters of Credit by, the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, the Lenders and the Agent shall not be responsible
for: (A) the form, validity, sufficiency, accuracy, genuineness or legal effect
of any document submitted by any Person in connection with the application for
and issuance of and presentation of drafts with respect to any of the Letters of
Credit, even if it should prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) 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) the failure of the beneficiary of any Letter of Credit to comply
duly with conditions required in order to draw upon such Letter of Credit; (D)
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) errors in interpretation of technical terms; (F) any loss or
delay in the transmission or otherwise of any document required in order make a
drawing under any Letter of Credit or of the proceeds thereof; (G) the
misapplication by the beneficiary of any Letter of Credit of the proceeds of any
drawing under such Letter of Credit; or (H) any consequences arising from causes
beyond the control of the Lenders or the Agent, including, without limitation,
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto Governmental Authority. None of the foregoing shall affect,
impair or prevent the vesting of any rights or powers of the Agent or any Lender
under this Section 2.4(i). Further, none of the foregoing shall prejudice any
rights of the Borrower against any issuer of a Letter of Credit.
(3) Exoneration. In furtherance and extension,
and not in limitation, of the specific provisions set forth above, any action
taken or omitted by the Agent or any Lender under or in connection with any of
the Letters of Credit or any related certificates, if taken or omitted in the
absence of gross negligence or willful misconduct, shall not put the Agent or
any Lender under any resulting liability to the Borrower or relieve the Borrower
of any of its obligations hereunder to any such Person.
(4) Power of Attorney. In connection with all
Inventory financed by Letters of Credit, the Borrower hereby appoints the Agent,
or the Agent's designee, as its attorney, with full power and authority: (a) to
sign and/or endorse the Borrower's name upon any warehouse or other receipts;
(b) to sign the Borrower's name on bills of lading and other negotiable and
non-negotiable documents; (c) to clear Inventory through customs in the Agent's
or the Borrower's name, and to sign and deliver to customs officials powers of
attorney in the Borrower's name for such purpose; (d) to complete in the
Borrower's or the Agent's name, any order, sale, or transaction, obtain the
necessary documents in connection therewith, and collect
48
the proceeds thereof; and (e) to do such other acts and things as are necessary
in order to enable the Agent to obtain possession or control of the Inventory
and to obtain payment of the Obligations. Neither the Agent nor its designee, as
the Borrower's attorney, will be liable for any acts or omissions, nor for any
error of judgement or mistakes of fact or law. This power, being coupled with an
interest, is irrevocable until all Obligations have been paid and satisfied.
(5) Account Party. The Borrower hereby
authorizes and directs any issuer of a Letter of Credit to name the Borrower as
the "Account Party" therein and to deliver to the Agent all instruments,
documents and other writings and property received by the issuer pursuant to the
Letter of Credit, and to accept and rely upon the Agent's instructions and
agreements with respect to all matters arising in connection with the Letter of
Credit or the application therefor.
(6) Control of Inventory. In connection with
all Inventory financed by Letters of Credit, the Borrower will, at the Agent's
request, instruct all suppliers, carriers, forwarders, warehouses or others
receiving or holding cash, checks, Inventory, documents or instruments in which
the Agent holds a security interest to deliver them to the Agent and/or subject
to the Agent's order, and if they shall come into the Borrower's possession, to
deliver them, upon request, to the Agent in their original form. The Borrower
shall also, at the Agent's request, designate the Agent as the consignee on all
bills of lading and other negotiable and non-negotiable documents.
(7) Indemnification by Lenders. The Lenders
agree to indemnify each issuer of a Letter of Credit (to the extent not
reimbursed by the Borrower and without limiting the obligations of the Borrower
hereunder) ratably in accordance with their respective Pro Rata Shares, for any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including attorneys' fees) or disbursements
of any kind and nature whatsoever that may be imposed on, incurred by or
asserted against such issuer in any way relating to or arising out of any Letter
of Credit issued by such issuer or the transactions contemplated thereby or any
action taken or omitted by such issuer under any Letter of Credit issued by such
issuer or any Loan Document in connection therewith; provided that no Lender
shall be liable for any of the foregoing to the extent it arises from the gross
negligence or willful misconduct of the Person to be indemnified. Without
limitation of the foregoing, each Lender agrees to reimburse each issuer of a
Letter of Credit promptly upon demand for its Pro Rata Share of any costs or
expenses payable by the Borrower to such issuer, to the extent that such issuer
is not promptly reimbursed for such costs and expenses by the Borrower. The
agreement contained in this section shall survive payment in full of all
Obligations.
(j) Supporting Letter of Credit. If, notwithstanding the
provisions of Section 2.4(b) and Section 12.1, any Letter of Credit is
outstanding upon the termination of this Agreement, then upon such termination
the Borrower shall deposit with the Agent, for the ratable benefit of the Agent
and the Lenders, with respect to each Letter of Credit then outstanding, a
standby letter of credit (a "Supporting Letter of Credit") in form and substance
reasonably satisfactory to the Agent, issued by an issuer reasonably
satisfactory to the Agent in an amount equal to the greatest amount for which
such Letter of Credit may be drawn plus any fees and expenses associated with
such Letter of Credit, under which Supporting Letter of Credit the
49
Agent is entitled to draw amounts necessary to reimburse the Agent and the
Lenders for payments made by the Agent and the Lenders under such Letter of
Credit or under any credit support or enhancement provided through the Agent
with respect thereto and any fees and expenses associated with such Letter of
Credit. Such Supporting Letter of Credit shall be held by the Agent, for the
ratable benefit of the Agent and the Lenders, as security for, and to provide
for the payment of, the aggregate undrawn amount of such Letters of Credit
remaining outstanding.
2.5 Assignment to IBJ. Effective upon the effectiveness of the
amendment and restatement of the Existing Loan and Security Agreement as
contemplated hereby (but prior to the making of any financial accommodations on
the Closing Date) (the time of such effectiveness under this Section 2.5(a), the
"Assignment Effective Time"), BofA hereby sells, transfers and assigns to IBJ
Whitehall Business Credit Corporation ("IBJ"), and IBJ hereby purchases from
BofA, without recourse and without representation or warranty (except as
provided in this Section 2.5), 10.75042852% ("IBJ's Percentage Share") of each
of the Revolving Loans of BofA under the Existing Loan and Security Agreement as
in effect immediately prior to the effectiveness of the amendment and
restatement of the Existing Loan and Security Agreement as contemplated hereby
(the "Assigned Interest" and the principal amount of the Assigned Interest being
$12,326,400.41); it being the intention of the parties hereto that after giving
effect to the amendment and restatement of the Existing Loan and Security
Agreement as contemplated hereby and the funding of the Revolving Loans on the
Closing Date each Lender shall have a Pro Rata Share of all the Revolving Loans
of the Lenders hereunder and of all other rights, interests and obligations of
the Lenders hereunder).
(a) As consideration for the sale, assignment and transfer
contemplated in this Section 2.5, IBJ shall pay to BofA on the Closing Date in
immediately available funds an amount equal to $12,326,400.41 (representing
IBJ's Percentage Share of the principal amount of all Revolving Loans
outstanding as of the Assignment Effective Time owing to BofA).
(b) Any interest accrued to the Closing Date with respect to
the Assigned Interest shall be for the account of BofA. Any interest accrued on
and after the Closing Date with respect to the Assigned Interest shall be for
the account of IBJ. Each of BofA and IBJ agrees that it will hold in trust for
the other party any interest which it may receive to which the other party is
entitled pursuant to the preceding two sentences and pay to the other party any
such amounts which it may receive promptly upon receipt.
(c) IBJ (i) acknowledges that it has received a copy of the
Existing Loan and Security Agreement, this Agreement and the Schedules and
Exhibits thereto, together with copies of the most recent financial statements
of Parent and its Subsidiaries, and such other documents and information as it
has deemed appropriate to make its own credit and legal analysis and decision to
enter into this Agreement and the sale, assignment and transfer contemplated by
this Section 2.5; and (ii) agrees that it will, independently and without
reliance upon BofA, the 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 and legal decisions in taking or not taking action under this
Agreement.
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(d) BofA represents and warrants to IBJ that (i) it is the
legal and beneficial owner of the Assigned Interest being sold, assigned and
transferred by it to IBJ hereunder and that the Assigned Interest is free and
clear of any Lien or other adverse claim; (ii) it is duly organized and existing
and it has the full power and authority to take, and has taken, all action
necessary to make its sale, assignment and transfer contemplated in this Section
2.5 and (iii) no notices to, or consents, authorizations or approvals of, any
Person are required (other than any already given or obtained) for its making
its sale, assignment and transfer contemplated by this Section 2.5 and no
further action by, or notice to, or filing with, any Person is required of it
for such sale, assignment and transfer.
(e) BofA makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Existing Loan and Security Agreement, this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Existing Loan and
Security Agreement, this Agreement or any other instrument or document furnished
pursuant thereto. BofA makes no representation or warranty in connection with,
and assumes no responsibility with respect to, the solvency, financial condition
or statements of the Borrower or any of its Affiliates, or the performance or
observance by the Borrower or any other Person, of any of its respective
obligations under the Existing Loan and Security Agreement, this Agreement or
any other instrument or document furnished in connection therewith.
(f) IBJ represents and warrants to BofA that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to make the purchase contemplated in this Section
2.5 and (ii) no notices to, or consents, authorizations or approvals of, any
Person are required (other than any already given or obtained) for its making
the purchase contemplated by this Section 2.5 and no further action by, or
notice to, or filing with, any Person is required of it for such purchase.
(g) Each of the parties hereto hereby consents to the sale,
assignment and transfer contemplated by this Section 2.5, notwithstanding any
failure to comply with (and each of the parties hereto hereby waives) the
requirements of Section 13.3 in order to make such assignment and transfer
effective.
(h) The foregoing purchase by IBJ under this Section 2.5 shall
be in addition to any and all rights and obligations of IBJ as a Lender
hereunder (including, without limitation, its obligation to make Revolving Loans
and Term Loans pursuant to its Commitment and to purchase participations in
Letters of Credit, Credit Support, BofA Loans and Agent Advances based upon its
Pro Rata Share, all as provided in Article 2).
ARTICLE 3
INTEREST AND FEES
3.1 Interest.
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(a) Interest Rates. All outstanding Obligations shall bear
interest on the unpaid principal amount thereof (including, to the extent
permitted by law, on interest thereon not paid when due) from the date made
until paid in full in cash at a rate determined by reference to the Base Rate or
the LIBOR Rate and Section 3.1(a)(i), (ii), (iii) or (iv), as applicable, but
not to exceed the Maximum Rate described in Section 3.3. Subject to the
provisions of Section 3.2, any of the Loans may be converted into, or continued
as, Base Rate Loans or LIBOR Rate Loans in the manner provided in Section 3.2.
If at any time Loans are outstanding with respect to which notice has not been
delivered to the Agent in accordance with the terms of this Agreement specifying
the basis for determining the interest rate applicable thereto, then those Loans
shall be Base Rate Loans and shall bear interest at a rate determined by
reference to the Base Rate until notice to the contrary has been given to the
Agent in accordance with this Agreement and such notice has become effective.
Except as otherwise provided herein, the outstanding Obligations shall bear
interest as follows:
(i) For all Base Rate Revolving Loans and other
Obligations (other than LIBOR Revolving Loans, Base Rate Term Loans and LIBOR
Term Loans) at a fluctuating per annum rate equal to the Base Rate plus the
Applicable Margin;
(ii) For all LIBOR Revolving Loans at a per annum
rate equal to the LIBOR Rate plus the Applicable Margin;
(iii) For all Base Rate Term Loans at a
fluctuating per annum rate equal to the Base Rate plus the Applicable Margin;
and
(iv) For all LIBOR Term Loans at a per annum
rate equal to the LIBOR Rate plus the Applicable Margin.
Each change in the Base Rate shall be reflected in the interest rate described
in clause (i) or (iii) above as of the effective date of such change. All
interest charges shall be computed on the basis of a year of 360 days and actual
days elapsed (which results in more interest being paid than if computed on the
basis of a 365-day year). Interest accrued on all Loans will be payable in
arrears on the first day of each month after the Original Closing Date and on
the Termination Date; provided that interest accrued on all LIBOR Rate Loans
having an Interest Period of one, two or three months will be payable in arrears
on the last day of each Interest Period and interest accrued on all LIBOR Rate
Loans having an Interest Period of six months will be payable in arrears on the
date which occurs three months after the initial date of each such Interest
Period, each of the dates which occur one and two months after the end of such
third month and the last day of each such Interest Period and, in each instance,
on the Termination Date.
(b) Default Rate. If any Event of Default occurs and is
continuing and the Majority Lenders in their discretion so elect, then, while
any such Event of Default is outstanding, all of the Obligations shall bear
interest at the Default Rate applicable thereto.
3.2 Conversion and Continuation Elections. The Borrower may, upon
irrevocable written notice to the Agent in accordance with Section 3.2(b):
52
(i) elect, as of any Business Day, in the case
of Base Rate Loans to convert any such Loans (or any part thereof in an amount
not less than $10,000,000 ($1,500,000 in the case of Term Loans), or that is in
an integral multiple of $1,000,000 ($500,000 in the case of Term Loans) in
excess thereof) into LIBOR Rate Loans; or
(ii) elect, as of the last day of the applicable
Interest Period, to continue any LIBOR Rate Loans having Interest Periods
expiring on such day (or any part thereof in an amount not less than $10,000,000
($1,500,000 in the case of Term Loans), or that is in an integral multiple of
$1,000,000 ($500,000 in the case of Term Loans) in excess thereof);
provided, that if at any time the aggregate amount of LIBOR Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $10,000,000 ($1,500,000 in the case of Term Loans),
such LIBOR Rate Loans shall automatically convert into Base Rate Loans, and on
and after such date the right of the Borrower to continue such Loans as, and
convert such Loans into, LIBOR Rate Loans, as the case may be, shall terminate.
(b) The Borrower shall deliver a Notice of
Conversion/Continuation to be received by the Agent not later than 11:00 a.m.
(New York time) at least three Business Days in advance of the
Conversion/Continuation Date, if the Loans are to be converted into or continued
as LIBOR Rate Loans and specifying:
(i) the proposed Conversion/Continuation Date;
(ii) the aggregate amount of Loans to be
converted or renewed;
(iii) the type of Loans resulting from the
proposed conversion or continuation; and
(iv) the duration of the requested Interest
Period.
(c) If upon the expiration of any Interest Period applicable
to LIBOR Rate Loans, the Borrower has failed to select timely a new Interest
Period to be applicable to LIBOR Rate Loans or if any Default or Event of
Default then exists, the Borrower shall be deemed to have elected to convert
such LIBOR Rate Loans into Base Rate Loans effective as of the expiration date
of such Interest Period.
(d) The Agent will promptly notify each Lender of its receipt
of a Notice of Conversion/Continuation. All conversions and continuations shall
be made ratably according to the respective outstanding principal amounts of the
Loans with respect to which the notice was given held by each Lender.
(e) During the existence of a Default or Event of Default, the
Borrower may not elect to have a Loan converted into or continued as a LIBOR
Rate Loan.
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(f) After giving effect to any conversion or continuation of
Loans, there may not be more than eight (eleven so long as any Term Loans remain
outstanding) different Interest Periods in effect hereunder.
3.3 Maximum Interest Rate. In no event shall any interest rate
provided for hereunder exceed the maximum rate legally chargeable by the Lenders
under applicable law for loans of the type provided for hereunder (the "Maximum
Rate"). If, in any month, any interest rate, absent such limitation, would have
exceeded the Maximum Rate, then the interest rate for that month shall be the
Maximum Rate, and, if in future months, that interest rate would otherwise be
less than the Maximum Rate, then that interest rate shall remain at the Maximum
Rate until such time as the amount of interest paid hereunder equals the amount
of interest which would have been paid if the same had not been limited by the
Maximum Rate. In the event that, upon payment in full of the Obligations, the
total amount of interest paid or accrued under the terms of this Agreement is
less than the total amount of interest which would, but for this Section 3.3,
have been paid or accrued if the interest rates otherwise set forth in this
Agreement had at all times been in effect, then the Borrower shall, to the
extent permitted by applicable law, pay the Agent, for the account of the
Lenders, an amount equal to the difference between (a) the lesser of (i) the
amount of interest which would have been charged if the Maximum Rate had, at all
times, been in effect or (ii) the amount of interest which would have accrued
had the interest rates otherwise set forth in this Agreement, at all times, been
in effect and (b) the amount of interest actually paid or accrued under this
Agreement. In the event that a court determines that the Agent and/or any Lender
has received interest and other charges hereunder in excess of the Maximum Rate,
such excess shall be deemed received on account of, and shall automatically be
applied to reduce, the Obligations other than interest, in the inverse order of
maturity, and if there are no Obligations outstanding, the Agent and/or such
Lender shall refund to the Borrower such excess.
3.4 Certain Fees. The Borrower agrees to pay BofA for its own
account the fees (the "BofA Fees") referred to in the Fee Letter as and when
payable as provided in such letter. The Agent, the Lenders and the Borrower
agree that the BofA Fees may be financed by the Lenders as Revolving Loans.
3.5 Unused Line Fee. Until the Obligations have been paid in full
and this Agreement is terminated, the Borrower agrees to pay, on the first day
of each month and on the Termination Date, to the Agent, for the ratable account
of the Lenders, an unused line fee equal to three-eighths of one percent (.375%)
per annum on the average daily amount by which the Maximum Revolver Amount
exceeded the sum of the average daily outstanding amount of Revolving Loans and
the undrawn face amount of all outstanding Letters of Credit, during the
immediately preceding month or shorter period if calculated on the Termination
Date. The unused line fee shall be computed on the basis of a 360-day year for
the actual number of days elapsed. All payments received by the Agent on account
of Accounts or as proceeds of other Collateral shall be deemed to be credited to
the Borrower's Loan Account immediately upon receipt for purposes of calculating
the unused line fee pursuant to this Section 3.5.
3.6 Letter of Credit Fee. The Borrower agrees to pay to the Agent,
for the ratable account of the Lenders, for each Letter of Credit, a fee (the
"Letter of Credit Fee") equal to two percent (2%) per annum of the undrawn face
amount of each Letter of Credit issued for the
54
Borrower's account at the Borrower's request, plus all out-of-pocket costs, fees
and expenses reasonably incurred by the Agent in connection with the application
for, processing of, issuance of, or amendment to any Letter of Credit, which
costs, fees and expenses could include a "fronting fee" required to be paid by
the Agent to such issuer for the assumption of the settlement risk in connection
with the issuance of such Letter of Credit. The Letter of Credit Fee shall be
payable monthly in arrears on the first day of each month following any month in
which a Letter of Credit was issued and/or in which a Letter of Credit remains
outstanding and on the Termination Date. The Letter of Credit Fee shall be
computed on the basis of a 360-day year for the actual number of days elapsed,
and shall increase to the Default Rate if any Event of Default occurs and is
continuing and the Majority Lenders in their discretion so elect.
3.7 Collateral Management Fee. The Borrower agrees to pay to the
Agent, for the account of the Agent, a non-refundable collateral management fee
in the amount of $125,000 per annum, payable in advance on the Closing Date and
each Anniversary Date (other than an Anniversary Date occurring on or after the
Payment and Termination Date).
ARTICLE 4
PAYMENTS AND PREPAYMENTS
4.1 Revolving Loans. The Borrower shall repay the outstanding
principal balance of the Revolving Loans, plus all accrued but unpaid interest
thereon, on the Termination Date. The Borrower may prepay Revolving Loans at any
time, and reborrow subject to the terms of this Agreement; provided, however,
that with respect to any LIBOR Revolving Loans prepaid by the Borrower prior to
the expiration date of the Interest Period applicable thereto, the Borrower
promises to pay to the Agent for account of the Lenders the amounts described in
Section 5.4. In addition, and without limiting the generality of the foregoing,
upon demand the Borrower promises to pay to the Agent, for account of the
Lenders, the amount, without duplication, by which the sum of outstanding
Revolving Loans, the aggregate amount of Pending Revolving Loans, the Term Loan
Reserve, the aggregate undrawn amounts of all outstanding Letters of Credit and
the amount of all unpaid reimbursement obligations with respect to the Letters
of Credit exceeds the Availability (with Availability being determined for
purposes of this sentence as if clause (b) thereof were zero).
4.2 Termination of Facility. The Borrower may terminate this
Agreement upon at least ten (10) Business Days' notice to the Agent and the
Lenders, upon (a) the payment in full of all outstanding Revolving Loans,
together with accrued interest thereon, and the cancellation and return of all
outstanding Letters of Credit, (b) the prepayment in full of the Term Loans,
together with accrued interest thereon, (c) the payment of the early termination
fee set forth in the next sentence, (d) the payment in full in cash of all other
outstanding monetary Obligations together with accrued interest thereon, if any,
and (e) with respect to any LIBOR Rate Loans prepaid in connection with such
termination prior to the expiration date of the Interest Period applicable
thereto, the payment of the amounts described in Section 5.4. If this Agreement
is terminated at any time prior to the Stated Termination Date, whether pursuant
to this Section or pursuant to Section 11.2, the Borrower shall pay to the
Agent, for the account of the Lenders, an early termination fee determined in
accordance with the following table:
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Period during which early Early Termination Fee
termination occurs
------------------------- ---------------------
Prior to the first Anniversary Date $1,175,000
On or after the first Anniversary Date but prior to $587,500
the third Anniversary Date
On or after the third Anniversary Date $0
4.3 Repayment of the Term Loans. The Borrower shall, until
payment in full of the Term Loans and subject to earlier prepayment and payment
as hereinafter provided, make installment payments in respect of the principal
of the Term Loans to the Agent, for the account of the Lenders, in equal monthly
installments of $666,666.67 each (other than the final installment), payable on
the first day of each month, commencing on April 1, 2002, with a final
installment of principal to be paid on March 1, 2005 (or, if earlier, the Stated
Termination Date) in an amount equal to the then remaining principal balance of
the Term Loans. Amounts repaid in respect of the Term Loans pursuant to this
Section 4.3 may not be reborrowed.
4.4 Voluntary Prepayments of the Term Loans. The Borrower may
prepay the principal of the Term Loans in whole or in part (subject to a minimum
amount of $250,000 or an integral multiple of $100,000 in excess thereof), at
any time and from time to time upon (a) at least five (5) Business Days' prior
written notice to the Agent and the Lenders, and (b) payment of, with respect to
any LIBOR Term Loans to be prepaid prior to the expiration date of the Interest
Period applicable thereto, the amounts described in Section 5.4. All voluntary
prepayments of the principal of the Term Loans shall be accompanied by the
payment of all accrued but unpaid interest on the Term Loans to the date of
prepayment. Any voluntary prepayment under this Section 4.4 of less than all of
the outstanding principal of the Term Loans shall be applied to the installments
of principal of the Term Loans in the inverse order of maturity. Amounts prepaid
in respect of the Term Loans pursuant to this Section 4.4 may not be reborrowed.
4.5 Mandatory Prepayments of the Term Loans. The Borrower shall
prepay the entire unpaid principal balance of the Term Loans, and all accrued
but unpaid interest thereon, on the Termination Date. The Borrower shall use
proceeds of the Senior Replacement Notes in excess of those used by the Borrower
to redeem or otherwise acquire in full the Senior Subordinated Notes to prepay
the Term Loans in full. Amounts prepaid in respect of the Term Loans pursuant to
this Section 4.5 may not be reborrowed.
(a) On the tenth day following the date of receipt thereof by
Parent or any of its Subsidiaries of the cash proceeds from any sale or other
disposition of assets consummated on or after June 15, 2000 (other than (i)
sales of inventory in the ordinary course of business, (ii) the sale by the
Borrower on June 15, 2000 of Equipment pursuant to the Secured Sale/Leaseback
Documents, (iii) sales or other dispositions of Credit Agreement Term Loan
Equipment Collateral or Equipment constituting Excluded Sale/Leaseback Assets
(other than any such Equipment which, pursuant to the proviso in Section
6.1(a)(v), no longer constitutes Collateral and secures the payment of the
Senior Replacement Notes), in each instance, permitted by Section 6.11(c) to the
extent the net after tax proceeds thereof are, within 270 days after the
56
consummation of the relevant sale or other disposition, used by the Borrower to
purchase replacement Equipment constituting Credit Agreement Term Loan Equipment
Collateral or Excluded Sale/Leaseback Assets, as the case may be, which shall be
subject to a first priority perfected Lien in favor of the Agent and for which
the other requirements set forth in Section 6.11(c) and the requirements of the
remaining sentences of this Section 4.5(b) have been satisfied, (iv) sales or
other dispositions of Secured Sale/Leaseback Collateral permitted hereunder to
the extent the proceeds thereof are, within 180 days after the consummation of
the relevant sale or other disposition, applied to the payment of the
obligations of the Borrower under the Secured Sale/Leaseback Documents or the
purchase of replacement Secured Sale/Leaseback Collateral and (v) sales or other
dispositions of Equipment of the Borrower permitted hereunder which do not
constitute Secured Sale/Leaseback Collateral and which, pursuant to Section
6.1(a)(v), no longer constitute Collateral and secure the payment of the Senior
Replacement Notes, to the extent the proceeds thereof are, within 180 days after
the consummation of the relevant sale or other disposition, applied to the
payment of the obligations of the Borrower under the Senior Replacement Notes or
the purchase of replacement collateral securing the Senior Replacement Notes),
an amount equal to 100% of the net cash proceeds from such asset sale or other
disposition shall be applied first as a mandatory repayment of principal of the
then outstanding Term Loans (to be applied to the installments of principal
thereof in the inverse order of maturity) and second, after the Term Loans have
been paid in full, as a mandatory repayment of principal of the then outstanding
Revolving Loans; provided that in any event (and notwithstanding the first
parenthetical in this sentence), the Borrower shall apply the net cash proceeds
from any sale or other disposition of assets of Parent or any of its
Subsidiaries consummated on or after the Closing Date to the payment of the Term
Loans and the Revolving Loans in the manner set forth above to the extent
necessary to avoid any requirement under the relevant indenture that the
Borrower offer to purchase any Senior Subordinated Notes, ▇▇▇▇▇ Senior
Subordinated Notes or any notes replacing or refinancing any of such notes
(including, without limitation, any Senior Replacement Notes), with there to be
a permanent reduction of the Commitments and the Maximum Revolver Amount in the
amount of any such application to the Revolving Loans (such permanent reduction
to be made concurrently with such application to the Revolving Loans and such
reduction to result in each Lender's Commitment to be permanently reduced by its
Pro Rata Share of such reduction). With respect to a sale or other disposition
referred to in clause (iii) of the first sentence of this Section 4.5(b) for
which the Borrower elects that all or a portion of the net after tax proceeds
thereof be used to purchase replacement Equipment as provided in and in
accordance with such clause (iii) and not be applied to the repayment of
Obligations as and when hereinabove required (a "Replacement Election") (which
election may be made only if no Default or Event of Default exists), the
Borrower shall deliver a Replacement Notice to the Agent on or below the date of
the consummation of such sale or other disposition, with such Replacement
Election being effective with respect to the portion of the net after tax
proceeds of such sale or other disposition equal to the Anticipated Replacement
Amount specified in such Replacement Notice. If the Borrower exercises its
Replacement Election with respect to such a sale or other disposition, then
until such time as such portion of the net after tax proceeds thereof are used
to purchase replacement Equipment in accordance with the terms of clause (iii)
of the first sentence of this Section 4.5(b) such proceeds shall be applied to
the repayment of the Revolving Loans (and a reserve in Availability shall be
established in the amount of such repayment to fund such purchase and/or the
repayment of Obligations as
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provided in the last sentence of this Section 4.5(b)) or delivered to the Agent
as cash collateral for the payment of the Obligations on terms satisfactory to
the Agent. With respect to the portion, if any, of the net after tax proceeds of
such sale or other disposition for which the Replacement Election is not timely
exercised, such portion thereof shall be applied to the repayment of the
Obligations as and when provided above. On the Replacement Prepayment Date with
respect to a Replacement Election, an amount equal to the Replacement Prepayment
Amount, if any, for such Replacement Election shall be borrowed as a Revolving
Loan and applied first as a mandatory repayment of principal of the then
outstanding Term Loans (to be applied to the installments of principal thereof
in the inverse order of maturity) and second, after the Term Loans have been
paid in full, as a mandatory repayment of principal of the then outstanding
Revolving Loans.
(b) Notwithstanding anything contained herein to the contrary,
unless the Borrower shall have prepaid all its Obligations hereunder and all of
the Commitments are terminated, all sales or other dispositions of assets of
Parent or any of its Subsidiaries (other than sales or other dispositions of
assets permitted by Section 9.9) shall require the prior written consent of the
Majority Lenders.
(c) In connection with any prepayment under this Section 4.5,
if any LIBOR Term Loans are prepaid prior to the expiration date of the Interest
Period applicable thereto, the Borrower shall pay to the Lenders the amounts
described in Section 5.4. Amounts prepaid in respect of the Term Loans pursuant
to this Section 4.5 may not be reborrowed.
4.6 Payments by the Borrower. All payments to be made by the
Borrower shall be made without set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by the Borrower shall be made
to the Agent for the account of the Lenders at the Agent's address set forth in
Section 15.8, and shall be made in Dollars and in immediately available funds,
no later than 1:00 p.m. (New York time) on the date specified herein; provided,
however, that, except as otherwise provided herein (including, in any event,
Section 6.9(d)), any payments by the Borrower which the Borrower has notified
the Agent prior to 12:00 noon (New York time) on a Business Day that such
payments will be received by the Agent via wire transfer prior to 4:00 p.m. (New
York time) on such Business Day shall be deemed to have been received by the
Agent for this purpose prior to 1:00 p.m. (New York time) on such Business Day,
but only if such payment is actually received by the Agent via wire transfer no
later than 4:00 p.m. (New York time) on such Business Day and the Borrower
hereby agrees to indemnify and hold harmless the Agent and each Lender from and
against any and all actual out-of-pocket liabilities, obligations, losses,
damages, penalties, costs or expenses incurred by the Agent or such Lender in
the event such payment is not actually received by the Agent via wire transfer
by such time. Any payment received by the Agent later than 1:00 p.m. (New York
time) shall be deemed to have been received on the following Business Day and
any applicable interest or fee shall continue to accrue.
(a) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
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(b) Unless the Agent receives notice from the Borrower prior
to the date on which any payment is due to the Lenders that the Borrower will
not make such payment in full as and when required, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date in
immediately available funds and the Agent may (but shall not be so required), in
reliance upon such assumption, distribute to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent the
Borrower has not made such payment in full to the Agent, each Lender shall repay
to the Agent on demand such amount distributed to such Lender, together with
interest thereon at the Federal Funds Rate for each day from the date such
amount is distributed to such Lender until the date repaid.
4.7 Payments as Revolving Loans. All payments of principal,
interest, reimbursement obligations in connection with Letters of Credit, fees,
premiums and other sums payable hereunder, including all reimbursement for
expenses pursuant to Section 15.7, may, at the option of the Agent, in its sole
discretion, subject only to the terms of this Section 4.7, be paid from the
proceeds of Revolving Loans made hereunder, whether made following a request by
the Borrower pursuant to Section 2.2 or a deemed request as provided in this
Section 4.7. The Borrower hereby irrevocably authorizes the Agent to charge the
Loan Account for the purpose of paying principal, interest, reimbursement
obligations in connection with Letters of Credit, fees, premiums and other sums
payable hereunder, including reimbursing expenses pursuant to Section 15.7, and
agrees that all such amounts charged shall constitute Revolving Loans (including
BofA Loans and Agent Advances) and that all such Revolving Loans so made shall
be deemed to have been requested by Borrower pursuant to Section 2.2. The Agent
agrees, so long as no Event of Default is continuing, to provide the Borrower
with three days' prior notice of any such charge to the Loan Account for the
purpose of paying expenses owing by the Borrower under Section 15.7. All amounts
charged to the Loan Account pursuant to this Section 4.7 shall be deemed correct
and binding on the Borrower, subject to Section 4.10.
4.8 Apportionment, Application and Reversal of Payments.
Aggregate principal and interest payments shall be apportioned ratably among the
Lenders (according to the unpaid principal balance of the Loans to which such
payments relate held by each Lender) and payments of the fees shall, as
applicable, be apportioned ratably among the Lenders. All payments shall be
remitted to the Agent and all such payments not relating to principal or
interest of specific Loans, or not constituting payment of specific fees, and
all proceeds of Accounts or other Collateral received by the Agent, shall be
applied, ratably, subject to the provisions of this Agreement, first, to pay any
fees, indemnities or expense reimbursements then due to the Agent from the
Borrower; second, to pay any fees or expense reimbursements then due to the
Lenders from the Borrower; third, to pay interest due in respect of all
Revolving Loans, including BofA Loans and Agent Advances, and Term Loans;
fourth, to pay or prepay principal of the BofA Loans and Agent Advances; fifth,
to pay or prepay principal of the Revolving Loans (other than BofA Loans and
Agent Advances) and unpaid reimbursement obligations in respect of Letters of
Credit; sixth, to pay or prepay principal of the Term Loans (to installments
thereof in the inverse order of maturity); and seventh, to the payment of any
other Obligation due to the Agent or any Lender by the Borrower. Notwithstanding
anything to the contrary contained in this Agreement, unless so directed by the
Borrower, or unless an Event of Default is outstanding, neither the Agent nor
any Lender shall apply any payments which it receives to any LIBOR Revolving
Loan or LIBOR Term Loan, except (a) on the expiration date of the Interest
Period applicable to any such LIBOR
59
Rate Loan, or (b) in the event, and only to the extent, that there are no
outstanding Base Rate Revolving Loans or Base Rate Term Loans. The Agent shall
promptly distribute to each Lender, pursuant to the applicable wire transfer
instructions received from each Lender in writing, such funds as it may be
entitled to receive, subject to a Settlement delay as provided for in Section
2.2(j). The Agent and the Lenders shall have the continuing and exclusive right
to apply and reverse and reapply any and all such proceeds and payments to any
portion of the Obligations.
4.9 Indemnity for Returned Payments. If, after receipt of any
payment of, or proceeds applied to the payment of, all or any part of the
Obligations, the Agent or any Lender is for any reason compelled to surrender
such payment or proceeds to any Person, because such payment or application of
proceeds is invalidated, declared fraudulent, set aside, determined to be void
or voidable as a preference, impermissible setoff, or a diversion of trust
funds, or for any other reason, then the Obligations or part thereof intended to
be satisfied shall be revived and continue and this Agreement shall continue in
full force as if such payment or proceeds had not been received by the Agent or
such Lender, and the Borrower shall be liable to pay to the Agent and the
Lenders, and hereby does indemnify the Agent and the Lenders and hold the Agent
and the Lenders harmless for, the amount of such payment or proceeds
surrendered. The provisions of this Section 4.9 shall be and remain effective
notwithstanding any contrary action which may have been taken by the Agent or
any Lender in reliance upon such payment or application of proceeds, and any
such contrary action so taken shall be without prejudice to the Agent's and the
Lenders' rights under this Agreement and shall be deemed to have been
conditioned upon such payment or application of proceeds having become final and
irrevocable. The provisions of this Section 4.9 shall survive the termination of
this Agreement.
4.10 Agent's and Lenders' Books and Records; Monthly Statements.
The Borrower agrees that the Agent's and each Lender's books and records showing
the Obligations and the transactions pursuant to this Agreement and the other
Loan Documents shall be admissible in any action or proceeding arising
therefrom, and shall constitute rebuttably presumptive proof thereof,
irrespective of whether any Obligation is also evidenced by a promissory note or
other instrument. The Agent will provide to the Borrower a monthly statement of
Loans, payments, and other transactions pursuant to this Agreement. Such
statement shall be deemed correct, accurate, and binding on the Borrower and an
account stated (except for reversals and reapplications of payments made as
provided in Section 4.8 and corrections of errors discovered by the Agent),
absent manifest error or unless the Borrower notifies the Agent in writing to
the contrary within thirty (30) days after such statement is rendered. In the
event a timely written notice of objections is given by the Borrower, only the
items to which exception is expressly made will be considered to be disputed by
the Borrower.
ARTICLE 5
TAXES, YIELD PROTECTION AND ILLEGALITY
5.1 Taxes. Any and all payments by the Borrower to each Lender or
the Agent under this Agreement and any other Loan Document shall be made free
and clear of, and without deduction or withholding for any Taxes. In addition,
the Borrower shall pay all Other Taxes.
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(a) The Borrower agrees to indemnify and hold harmless each
Lender and the Agent for the full amount of Taxes or Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section) paid by the Lender or the Agent and any liability (including penalties,
interest, additions to tax and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. Payment under this indemnification shall be made within 30 days after
the date the Lender or the Agent makes written demand therefor.
(b) If the Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Lender or the Agent, then:
(i) the sum payable shall be increased as
necessary so that after making all required deductions and withholdings
(including deductions and withholdings applicable to additional sums payable
under this Section) such Lender or the Agent, as the case may be, receives an
amount equal to the sum it would have received had no such deductions or
withholdings been made;
(ii) the Borrower shall make such deductions and
withholdings;
(iii) the Borrower shall pay the full amount
deducted or withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) the Borrower shall also pay to each Lender
or the Agent for the account of such Lender, at the time interest is paid, all
additional amounts which the respective Lender specifies as necessary to
preserve the after-tax yield the Lender would have received if such Taxes or
Other Taxes had not been imposed.
(c) Within 30 days after the date of any payment by the
Borrower of Taxes or Other Taxes, the Borrower shall furnish the Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to the Agent.
(d) If the Borrower is required to pay additional amounts to
any Lender or the Agent pursuant to subsection (c) of this Section, then such
Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its lending office so as to
eliminate any such additional payment by the Borrower which may thereafter
accrue, if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.
5.2 Illegality. If any Lender determines that the introduction of
any Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Lender or its applicable lending office to make
LIBOR Rate Loans, then, on notice thereof by the Lender to the Borrower through
the Agent, any obligation of that Lender to make LIBOR Rate Loans shall be
suspended until the Lender notifies the Agent and the Borrower that the
circumstances giving rise to such determination no longer exist.
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(a) If a Lender determines that it is unlawful to maintain any
LIBOR Rate Loan, the Borrower shall, upon its receipt of notice of such fact and
demand from such Lender (with a copy to the Agent), prepay in full such LIBOR
Rate Loans of that Lender then outstanding, together with interest accrued
thereon and amounts required under Section 5.4, either on the last day of the
Interest Period thereof, if the Lender may lawfully continue to maintain such
LIBOR Rate Loans to such day, or immediately, if the Lender may not lawfully
continue to maintain such LIBOR Rate Loan. If the Borrower is required to so
prepay any LIBOR Rate Loan, then concurrently with such prepayment, the Borrower
shall borrow from the affected Lender, in the amount of such repayment, a Base
Rate Loan.
5.3 Increased Costs and Reduction of Return. If any Lender
determines that, due to either (i) the introduction of or any change in the
interpretation of any law or regulation or (ii) the compliance by that Lender
with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), there shall be any increase
in the cost to such Lender of agreeing to make or making, funding or maintaining
any LIBOR Rate Loans, then the Borrower shall be liable for, and shall from time
to time, upon demand (with a copy of such demand to be sent to the Agent), pay
to the Agent for the account of such Lender, additional amounts as are
sufficient to compensate such Lender for such increased costs. If the Borrower
is required to pay additional amounts to any Lender pursuant to this Section
5.3(a) that increase the effective lending rate of such Lender with respect to
its share of the Loans to greater than 25 basis points in excess of the
effective lending rate of the other Lenders, then such Lender shall use
reasonable efforts (consistent with legal and regulatory restrictions) to change
the jurisdiction of its lending office with respect to making LIBOR Rate Loans
so as to eliminate any such additional payment by the Borrower which may
thereafter accrue, if such change in the judgment of such Lender is not
otherwise disadvantageous to such Lender. In the event that any one or more
Lenders, pursuant to this Section 5.3(a) , incur any increased costs (other than
increased costs to the extent such increased costs are not a recurring cost) for
which any such Lender demands compensation pursuant to this Section 5.3(a) which
increases the effective lending rate of such Lender with respect to its share of
the Loans to greater than 25 basis points in excess of the effective lending
rate of the other Lenders and such Lender has not mitigated such costs within 60
days after receipt by such Lender from the Borrower of a written notice that
such Lender's effective lending rate has so exceeded the effective lending rate
of the other Lenders, then and in any such event, the Borrower may substitute
another financial institution for such Lender which is reasonably acceptable to
the Agent to assume the Commitment of such Lender and to purchase the Loans of
such Lender hereunder, without recourse to or warranty by, or expense to, such
Lender for a purchase price equal to the outstanding principal amount of the
Loans owing to such Lender plus any accrued but unpaid interest on such Loans
and accrued but unpaid fees and other amounts in respect of that Lender's
Commitment and share of the Loans (other than any prepayment penalty or other
premium; it being agreed that amounts payable under Section 5.4 are not
prepayment penalties or other premiums). Upon such purchase such Lender shall no
longer be a party hereto or have any rights or benefits hereunder (except for
rights or benefits that such Lender would retain hereunder and under the other
Loan Documents upon payment in full of all of the Obligations) and the
replacement Lender shall succeed to the rights and benefits, and shall assume
the obligations, of such Lender hereunder and thereunder. The Agent and the
Lenders shall cooperate with the Borrower to amend the Loan Documents to
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reflect such substitution. In no event may the Borrower replace a Lender which
is also an issuer of a Letter of Credit or Credit Support or whose Affiliate has
issued a Letter of Credit or Credit Support unless (x) all Letters of Credit and
Credit Support issued by such Lender and its Affiliates have expired or have
been terminated or canceled and such Lender and/or Affiliate, as the case may
be, shall have been reimbursed for all payments made by it under the Letters of
Credit and Credit Support issued by it or (y) such Lender and/or Affiliate, as
the case may be, shall have been indemnified in a manner satisfactory to it for
any outstanding Letters of Credit and Credit Support issued by it and other
obligations, absolute or contingent, with respect to Letters of Credit and
Credit Support issued by it.
(a) If any Lender shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by the Lender or any corporation or other entity controlling the
Lender with any Capital Adequacy Regulation, affects or would affect the amount
of capital required or expected to be maintained by the Lender or any
corporation or other entity controlling the Lender and (taking into
consideration such Lender's or such corporation's or other entity's policies
with respect to capital adequacy and such Lender's desired return on capital)
determines that the amount of such capital is increased as a consequence of its
Commitment, loans, credits or obligations under this Agreement, then, upon
demand of such Lender to the Borrower through the Agent, the Borrower shall pay
to the Lender, from time to time as specified by the Lender, additional amounts
sufficient to compensate the Lender for such increase.
5.4 Funding Losses. The Borrower shall reimburse each Lender and
hold each Lender harmless from any loss or reasonable expense which the Lender
may sustain or incur as a consequence of:
(a) the failure of the Borrower to make on a timely basis
any payment of principal of any LIBOR Rate Loan;
(b) the failure of the Borrower to borrow, continue or convert
a Loan after the Borrower has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion/ Continuation; or
(c) the prepayment or other payment (including after
acceleration thereof) of a LIBOR Rate Loan on a day that is not the last day of
the relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Rate Loans or from fees payable to
terminate the deposits from which such funds were obtained.
5.5 Inability to Determine Rates. If the Agent determines that for
any reason adequate and reasonable means do not exist for determining the LIBOR
Rate for any requested Interest Period with respect to a proposed LIBOR Rate
Loan, or that the LIBOR Rate for any requested Interest Period with respect to a
proposed LIBOR Rate Loan does not adequately and fairly
63
reflect the cost to the Lenders of funding such Loan, the Agent will promptly so
notify the Borrower and each Lender. Thereafter, the obligation of the Lenders
to make or maintain LIBOR Rate Loans hereunder shall be suspended until the
Agent revokes such notice in writing. Upon receipt of such notice, the Borrower
may, notwithstanding any other provision herein to the contrary, revoke any
Notice of Borrowing or Notice of Conversion/Continuation then submitted by it.
If the Borrower does not revoke such Notice, the Lenders shall make, convert or
continue the Loans, as proposed by the Borrower, in the amount specified in the
applicable notice submitted by the Borrower, but such Loans shall be made,
converted or continued as Base Rate Loans instead of LIBOR Rate Loans.
5.6 Certificates of Lenders. Any Lender claiming reimbursement
or compensation under this Article 5 shall deliver to the Borrower (with a copy
to the Agent) a certificate setting forth in reasonable detail the amount
payable to the Lender hereunder and such certificate shall be conclusive and
binding on the Borrower in the absence of manifest error.
5.7 Survival. The agreements and obligations of the Borrower in
this Article 5 shall survive the payment of all other Obligations.
ARTICLE 6
COLLATERAL
6.1 Grant of Security Interest. As security for all present and
future Obligations, the Borrower hereby grants to the Agent, for the ratable
benefit of the Agent and the Lenders, a continuing security interest in, lien
on, and right of set-off against, all of the following property of the Borrower
(including, without limitation, any of the following property acquired by the
Borrower by operation of law as a result of the ▇▇▇▇▇/Cup Merger), whether now
owned or existing or hereafter acquired or arising, regardless of where located:
(i) all Accounts;
(ii) all Inventory;
(iii) all contract rights, letters of credit,
Assigned Contracts, chattel paper, instruments, notes, documents, and documents
of title;
(iv) all General Intangibles;
(v) all Equipment; provided that, (1) with
respect to any item of Equipment which is subject to a Purchase Money Lien or
Capital Lease permitted hereunder, such item shall not, so long as the Debt with
respect to such Purchase Money Lien or Capital Lease is outstanding, constitute
Collateral hereunder but only if (i) the documentation with respect thereto
prohibits a Lien on such Equipment in favor of the Agent and (ii) such item of
Equipment is not collateral security for the payment of any obligations of the
Borrower or Parent under the Secured Sale/Leaseback Documents, (2) upon and
after payment or redemption in full of the Senior Subordinated Notes and the
Term Loans with the proceeds of the Senior Replacement Notes, Equipment of the
Borrower to the extent securing the payment of the Senior
64
Replacement Notes shall not constitute Collateral hereunder, but only after, if
requested by the Agent or the Majority Lenders, the holders of the Senior
Replacement Notes (or a trustee on their behalf), the Agent and the other
parties to the Intercreditor Agreement enter into an amendment to the
Intercreditor Agreement or an amended and restated Intercreditor Agreement, in
form, scope and substance satisfactory to the Agent and (3) upon and after the
payment in full of the Term Loans (when clause (2) above is not applicable),
▇▇▇▇▇ Term Loan Equipment Collateral shall not constitute Collateral hereunder,
but only if such Equipment is not collateral security for the payment of any
obligations of the Borrower or Parent under the Secured Sale/Leaseback
Documents;
(vi) all money, investment property, securities
and other property of any kind of the Borrower in the possession or under the
control of the Agent or any Lender, any assignee of or participant in the
Obligations, or a bailee of any such party or such party's affiliates;
(vii) all deposit accounts, credits and balances
with and other claims against the Agent or any Lender or any of its affiliates
or any other financial institution in which the Borrower maintains deposits;
(viii) all books,records and other property related
to or referring to any of the foregoing, including, without limitation, books,
records, account ledgers, data processing records, computer software and other
property and General Intangibles at any time evidencing or relating to any of
the foregoing; and
(ix) all accessions to, substitutions for and
replacements, products and proceeds of any of the foregoing, including, but not
limited to, proceeds of any insurance policies, claims against third parties,
and condemnation or requisition payments with respect to all or any of the
foregoing.
All of the foregoing, together with the Real Estate covered by the Mortgage(s)
(subject to the proviso in the first sentence of Section 6.1(d)), and all other
property of Parent or any of its Subsidiaries in which the Agent or any Lender
may at any time be granted a Lien, is herein collectively referred to as the
"Collateral." The foregoing grant by the Borrower in favor of the Agent of Liens
on the Borrower's property shall be in addition to any grants by the Borrower in
favor of the Agent of Liens on the Borrower's property provided under the
Borrower Security Agreement, any other Security Document or under the Existing
Loan and Security Agreement.
(b) Not later than 60 days after the Original Closing Date,
the Agent shall have received:
(i) fully executed counterparts of Mortgages (or
with respect to Mortgages assigned by Bankers Trust Company, as collateral
agent, to the Agent as contemplated by the Bank Assignment Agreement, amendments
to such Mortgages), in each case in form and substance reasonably satisfactory
to the Agent, covering the Real Estate and Premises owned by the Borrower or
Parent, and arrangements reasonably satisfactory to the Agent shall be in place
to provide that counterparts of such Mortgages (or amendments thereto, if
applicable) shall
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be recorded in all places to the extent necessary, in the reasonable judgment of
the Agent, to create a valid and enforceable first priority Lien, subject only
to Permitted Liens, on such Real Estate and Premises in favor of the Agent (or
such other agent or trustee as may be required or desired under local law) for
the benefit of the Agent and the Lenders or, with respect to any such
amendments, to conform the related Mortgage to the terms hereof and to make such
other modifications to such Mortgages as the Agent may reasonably request in
order to give effect to the transactions contemplated hereby;
(ii) mortgagee title insurance policies (the
"Mortgage Policies") issued by title insurers reasonably satisfactory to the
Agent (it being agreed that Chicago Title Insurance Company is acceptable to the
Agent) in amounts reasonably satisfactory to the Agent, not to exceed the value
of such Real Estate and Premises as reasonably determined by the Agent, and
assuring the Agent that the Mortgages in respect of such owned Real Estate and
Premises are valid and enforceable first priority mortgage Liens (subject only
to Permitted Liens) on such Real Estate and Premises, free and clear of all
defects and encumbrances except Permitted Liens. Such Mortgage Policies shall be
in form and substance reasonably satisfactory to the Agent and shall include an
endorsement for future advances under this Agreement and the Mortgages, for
mechanics liens and for any other matter that the Agent in its reasonable
commercial discretion may request so long as such requested endorsements are
legally available in the applicable jurisdiction; and
(iii) a survey, in form and substance reasonably
satisfactory to the Agent, of each such owned Real Estate and Premises, each
certified by a licensed professional surveyor reasonably satisfactory to the
Agent and revealing no facts (other than Permitted Liens) which would materially
interfere with the use of such properties by the Borrower and Parent, or an
update of an existing survey provided the title company will delete the
exception for existing facts which a current survey would disclose.
(c) Not later than 60 days after the Original Closing Date,
the Agent shall have received:
(i) to the extent requested by the Agent, fully
executed counterparts of leasehold Mortgages (or with respect to leasehold
Mortgages assigned by Bankers Trust Company, as collateral agent, to the Agent
as contemplated by the Bank Assignment Agreement, amendments to such mortgages),
in each case in form and substance reasonably satisfactory to the Agent,
covering the Real Estate and Premises leased by the Borrower or Parent, and
arrangements reasonably satisfactory to the Agent shall be in place to provide
that counterparts of such leasehold Mortgages (or amendments thereto, if
applicable) shall be recorded in all places to the extent necessary, in the
reasonable judgment of the Agent, to create a valid and enforceable first
priority Lien, subject only to Permitted Liens, with respect to such leased Real
Estate and Premises in favor of the Agent (or such other agent or trustee as may
be required or desired under local law) for the benefit of the Agent and the
Lenders or, with respect to any such amendments, to conform the related
leasehold Mortgage to the terms hereof and to make such other modifications to
such leasehold Mortgages as the Agent may reasonably request in order to reflect
the transactions contemplated by this Agreement; and
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(ii) to the extent requested by the Agent, fully
executed counterparts of collateral assignments of leases in form and substance
reasonably satisfactory to the Agent covering the Real Estate and Premises
leased out by the Borrower or Parent.
(d) Each of Parent and the Borrower will, and will cause its
respective Subsidiaries (other than Lily Cup and the Global Entities) to, at the
expense of the Borrower, grant to the Agent security interests and mortgages
(each, an "Additional Mortgage") in such real property of Parent, the Borrower
and their respective Subsidiaries (other than Lily Cup and the Global Entities)
acquired after the Original Closing Date as may be requested in writing from
time to time by the Agent; provided that upon and after the payment in full of
the Term Loans, real property owned by ▇▇▇▇▇ immediately prior to the
consummation of the ▇▇▇▇▇/Cup Merger shall not be subject to the foregoing
requirement (and to the extent prior to the payment in full of the Term Loans
the Agent shall have obtained an Additional Mortgage on any such real property,
such Additional Mortgage on such real property shall at such time be released),
but only if such real property is not collateral security for the payment of any
obligations of the Borrower or Parent under the Secured Sale/Leaseback
Documents. Such Additional Mortgages shall be granted pursuant to documentation
reasonably satisfactory in form and substance to the Agent and shall constitute
valid and enforceable Liens superior to and prior to the rights of all third
Persons (except holders of Permitted Liens with respect to Permitted Liens) and
subject to no other Liens except for Permitted Liens. The Additional Mortgages
or instruments related thereto shall have been duly recorded or filed in such
manner and in such places as are required by law to establish, perfect, preserve
and protect the Liens in favor of the Agent required to be granted pursuant to
the Additional Mortgages and all taxes, fees and other charges payable in
connection therewith shall have been paid in full. Upon and after the payment or
redemption in full of the Senior Subordinated Notes and the Term Loans with the
proceeds of the Senior Replacement Notes, real property of the Borrower to the
extent securing the payment of the Senior Replacement Notes shall not constitute
Collateral hereunder and the Agent shall release its security interest and
mortgage, if any, thereon, but only after, if requested by the Agent or the
Majority Lenders, the holders of the Senior Replacement Notes (or a trustee on
their behalf), the Agent and the other parties to the Intercreditor Agreement
enter into an amendment to the Intercreditor Agreement or an amended and
restated Intercreditor Agreement, in form, scope and substance satisfactory to
the Agent.
(e) If at any time after the Original Closing Date, any Person
shall become a Subsidiary of the Borrower or Parent (the foregoing not
constituting a consent thereto), the Borrower or Parent will promptly notify the
Agent in writing thereof and will, at the expense of the Borrower and at the
written request of the Agent, promptly cause (i) such Subsidiary (other than any
of the Global Entities) to guaranty the Obligations and grant to the Agent for
the benefit of the Agent and the Lenders a security interest in and lien on the
property and assets of such Subsidiary to secure its obligations under such
guaranty, and (ii) the capital stock or other equity interests of such
Subsidiary (other than the Global Entities, so long as no Person (other than SF
Holdings) shall be granted a Lien in any of the equity interests of the Borrower
in such Subsidiaries) to be pledged to the Agent for the benefit of the Agent
and the Lenders. All such security interests, pledges and guaranties shall be
granted or made pursuant to documentation reasonably satisfactory in form and
substance to the Agent and shall constitute valid and enforceable Liens superior
to and prior to the rights of all third Persons (except holders of
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Permitted Liens with respect to Permitted Liens) and subject to no other Liens
except for Permitted Liens. All documents or instruments related thereto shall
have been duly recorded or filed in such manner and in such places as are
required by law to establish, perfect, preserve and protect the Liens in favor
of the Agent required to be granted pursuant to this clause (e) and all taxes,
fees and other charges payable in connection therewith shall have been paid in
full.
(f) Each of the Borrower and Parent will, and will cause its
respective Subsidiaries to, at the expense of the Borrower, make, execute,
endorse, acknowledge, file and/or deliver to the Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfers, endorsements, certificates, real property surveys,
reports and other assurances or instruments and take such further steps relating
to the collateral covered by any of the Loans Documents as the Agent may
reasonably require. Furthermore, the Borrower shall cause to be delivered to the
Agent such opinions of counsel, title insurance and other related documents as
may be reasonably requested by the Agent to assure themselves that this Section
6.1 has been complied with (such opinions to be consistent generally with the
opinions given on the Original Closing Date to the extent the relevant opinion
matter was covered in such opinions and any opinions with respect to Mortgages
to be consistent with the opinions given on such type of collateral under the
Original Credit Agreement).
(g) In the event that the Agent at any time after the Original
Closing Date determines in its good faith discretion that real estate appraisals
satisfying the requirements set forth in 12 CFR., Part 34-Subpart C, or any
successor or similar statute, rule, regulation, guideline or order (any such
appraisal, a "Required Appraisal") are or were required to be obtained, or
should be obtained, in connection with any or all of the properties subject to a
Mortgage, then, such Required Appraisal shall be delivered, at the expense of
the Borrower, to the Agent, which Required Appraisal, and the respective
appraiser, shall be reasonably satisfactory to the Agent.
(h) All of the Obligations shall be secured by all of the
Collateral.
(i) The Agent and the Lenders hereby agree that the Agent's
Liens in Credit Agreement Term Loan Equipment Collateral shall not at any time
secure greater than $25,000,000 in aggregate principal amount of Obligations.
6.2 Perfection and Protection of Security Interest. The Borrower
shall, at its expense, perform all steps requested by the Agent at any time to
perfect, maintain, protect, and enforce the Agent's Liens, including, without
limitation: (i) executing, delivering and/or filing and recording of the
Mortgage(s), the Trademark Patent and Copyright Agreements and/or amendments
thereto and executing and filing financing or continuation statements, and
amendments thereof, in form and substance reasonably satisfactory to the Agent;
(ii) delivering to the Agent the originals of all instruments, documents, and
chattel paper, and all other Collateral having a value in excess of $250,000 in
the aggregate of which the Agent determines it should have physical possession
in order to perfect and protect the Agent's security interest therein (other
than Secured Sale/Leaseback Collateral), duly pledged, endorsed or assigned to
the Agent without restriction; provided that with respect to any Collateral that
constitutes Shared Collateral, the Collateral Agent may continue to remain in
possession thereof, subject to the terms of the Pledge
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Agreement, the Parent Pledge Agreement and the Intercreditor Agreement, and with
respect to any other Collateral constituting capital stock of the Borrower or
any of its Subsidiaries, the Borrower shall cause the stock certificates
evidencing same to be delivered to the Agent, together with duly executed
undated stock powers therefor; (iii) delivering to the Agent negotiable
warehouse receipts covering any portion of the Collateral (other than Secured
Sale/Leaseback Collateral) located in warehouses and for which negotiable
warehouse receipts are issued; (iv) when an Event of Default exists,
transferring Inventory to warehouses designated by the Agent; (v) placing
notations on the Borrower's books of account to disclose the Agent's security
interest; (vi) delivering to the Agent all letters of credit (other than Secured
Sale/Leaseback Collateral) on which the Borrower is named beneficiary; and (vii)
taking such other steps as are deemed necessary or reasonably desirable by the
Agent to maintain and protect the Agent's Liens. To the extent permitted by
applicable law, the Agent may file, without the Borrower's signature, one or
more financing statements disclosing the Agent's Liens. The Borrower agrees that
a carbon, photographic, photostatic, or other reproduction of this Agreement or
of a financing statement is sufficient as a financing statement. Without
limiting the foregoing, the Borrower authorizes the Agent to file financing
statements against the Borrower which have collateral descriptions substantially
similar to any of the financing statements filed by the Agent against the
Borrower prior to the Closing Date.
(a) If any Collateral with an aggregate value in excess of
$100,000 is at any time in the possession or control of any warehouseman, bailee
or any of the Borrower's agents or processors, then the Borrower shall notify
the Agent thereof and shall notify such Person of the Agent's security interest
in such Collateral and, upon the Agent's request, instruct such Person to hold
all such Collateral (other than Secured Sale/Leaseback Collateral and subject to
the terms of the Intercreditor Agreement) for the Agent's account subject to the
Agent's instructions. If at any time any Collateral (other than Secured
Sale/Leaseback Collateral and subject to the terms of the Intercreditor
Agreement) is located on any operating facility of the Borrower which is not
owned by the Borrower, then the Borrower shall, at the request of the Agent,
obtain written waivers, in form and substance reasonably satisfactory to the
Agent, of all present and future Liens to which the owner or lessor of such
premises may be entitled to assert against the Collateral.
(b) From time to time, the Borrower shall, upon the Agent's
request, execute and deliver confirmatory written instruments pledging to the
Agent, for the ratable benefit of the Agent and the Lenders, the Collateral with
respect to the Borrower, but the Borrower's failure to do so shall not affect or
limit the Agent's security interest or the Agent's other rights in and to the
Collateral with respect to the Borrower. So long as this Agreement is in effect
and until the Payment and Termination Date, the Agent's Liens shall continue in
full force and effect in all Collateral (whether or not deemed eligible for the
purpose of calculating the Availability or as the basis for any advance, loan,
extension of credit, or other financial accommodation).
6.3 Location of Collateral. The Borrower represents and warrants
to the Agent and the Lenders that except as modified by notices from the
Borrower pursuant to and in accordance with the immediately succeeding sentence:
(a) Schedule 6.3 is a correct and complete list of the Borrower's chief
executive office, the location of its books and records, the locations where the
Borrower maintains its Collateral (other than Secured Sale/Leaseback
Collateral), and the locations of all of its other places of business; and (b)
Schedule 6.3 correctly identifies any of
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such facilities and locations that are not owned by the Borrower and sets forth
the names of the owners and lessors or sublessors of and, to the best of the
Borrower's knowledge, the holders of any mortgages on, such facilities and
locations. The Borrower covenants and agrees that it will not (i) maintain any
Collateral at any location other than those locations listed for the Borrower on
Schedule 6.3, (ii) otherwise change or add to any of such locations, or (iii)
change the location of its chief executive office from the location identified
in Schedule 6.3, unless it gives the Agent at least thirty (30) days' prior
written notice thereof and executes any and all financing statements and other
documents that the Agent reasonably requests in connection therewith. Without
limiting the foregoing, the Borrower represents that all of its Inventory (other
than Inventory in transit) and all Credit Agreement Term Loan Equipment
Collateral and ▇▇▇▇▇ Term Loan Equipment Collateral is, and covenants that all
of its Inventory and all Credit Agreement Term Loan Equipment Collateral and
▇▇▇▇▇ Term Loan Equipment Collateral will be, maintained either (a) on premises
owned by the Borrower, (b) on premises leased by the Borrower, provided that the
Agent has received an executed landlord waiver from the landlord of such
premises in form and substance reasonably satisfactory to the Agent (except that
(i) with respect to premises leased by the Borrower on the Original Closing
Date, such landlord waivers shall be received by the Agent no later than 90 days
after the Original Closing Date and (ii) with respect to premises leased by
▇▇▇▇▇ immediately prior to the consummation of the ▇▇▇▇▇/Cup Merger, such
landlord waivers shall be received by the Agent no later than 90 days after the
Closing Date), or (c) in the case of Inventory only, in a public warehouse,
provided that the Agent has received an executed bailee letter from the
applicable public warehouseman in form and substance reasonably satisfactory to
the Agent (except that (i) with respect to public warehouses utilized by the
Borrower on the Original Closing Date, such bailee letters shall be received by
the Agent no later than 90 days after the Original Closing Date and (ii) with
respect to public warehouses utilized by ▇▇▇▇▇ immediately prior to the
consummation of the ▇▇▇▇▇/Cup Merger, such bailee letters shall be received by
the Agent no later than 90 days after the Closing Date). In addition to the
representations, warranties, covenants and agreements set forth above, the
Borrower represents, warrants, covenants and agrees that (i) on June 15, 2000
all Credit Agreement Term Loan Equipment Collateral was located at the premises
owned by the Borrower in Conyers, Georgia, (ii) the Borrower shall, not later
than 10 days after any Credit Agreement Term Loan Equipment Collateral is moved
to another location, provide the Agent with written notice of its new location,
(iii) the Borrower shall, not later than 30 days after the end of each Fiscal
Year, provide the Agent with a list in detail satisfactory to the Agent of all
then existing Credit Agreement Term Loan Equipment Collateral and the location
of each item thereof and (iv) on June 15, 2000 all of the Equipment to be sold
by the Borrower on June 15, 2000 pursuant to the Secured Sale/Leaseback
Documents was located at the premises owned by the Borrower in Owings Mills,
Maryland, Dallas, Texas, and Chicago, Illinois. The Borrower represents and
warrants that, as of the Closing Date, it is a corporation incorporated under
the laws of the State of Delaware and its legal name is the name set forth on
the first page of this Agreement and the Borrower covenants that it will not
change its state of incorporation, form of organization or its legal name,
unless it gives the Agent at least thirty (30) days' prior written notice
thereof and executes and/or delivers to the Agent such documents that the Agent
reasonably requests in connection therewith.
6.4 Title to, Liens on, and Sale and Use of Collateral. The
Borrower represents and warrants to the Agent and the Lenders and agrees with
the Agent and the Lenders that: (a) all of
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the Collateral of the Borrower is and will continue to be owned by the Borrower
free and clear of all Liens whatsoever, except for Permitted Liens; (b) the
Agent's Liens in the Collateral, other than Shared Collateral and Secured
Sale/Leaseback Collateral, will not be subject to any prior Lien (other than
Purchase Money Liens on fixed assets, not constituting Credit Agreement Term
Loan Equipment Collateral or ▇▇▇▇▇ Term Loan Equipment Collateral, in respect of
Purchase Money Obligations permitted hereunder and Existing Liens); (c) the
Borrower will use, store, and maintain the Collateral with all reasonable care
and will use such Collateral for lawful purposes only; and (d) the Borrower will
not, without the Majority Lenders' prior written approval, sell or dispose of or
permit the sale or disposition of any of the Collateral except as permitted by
Section 9.9. The inclusion of proceeds in the Collateral shall not be deemed to
constitute the Agent's or any Lender's consent to any sale or other disposition
of the Collateral except as expressly permitted herein.
6.5 Appraisals. Whenever a Default or Event of Default exists,
and at such other times not more frequently than once a year as the Agent
requests, the Borrower shall, at its expense and upon the Agent's request,
provide the Agent with appraisals or updates thereof of any or all of the
Collateral from an appraiser, and prepared on a basis, reasonably satisfactory
to the Agent, such appraisals and updates to include, without limitation,
information required by applicable law and regulation and by the internal
policies of the Lenders.
6.6 Access and Examination;Confidentiality. The Agent, accompanied
by any Lender which so elects, may, upon reasonable prior notice to the Borrower
(and without notice when a Default or Event of Default exists), at all
reasonable times during regular business hours (and at any time when a Default
or Event of Default exists) have access to, examine, audit, make extracts from
or copies of and inspect any or all of the Borrower's records, files, and books
of account and the Collateral, and discuss the Borrower's affairs with the
Borrower's officers and management. The Borrower will deliver to the Agent any
instrument necessary for the Agent to obtain records from any service bureau
maintaining records for the Borrower. The Agent may, and at the direction of the
Majority Lenders shall, at any time when a Default or Event of Default exists,
and at the Borrower's expense, make copies of all of the Borrower's books and
records, or require the Borrower to deliver such copies to the Agent. During the
continuance of an Event of Default, the Agent may, without expense to the Agent,
use such of the Borrower's respective personnel, supplies, and premises as may
be reasonably necessary for maintaining or enforcing the Agent's Liens. The
Agent shall have the right, at any time, in the Agent's name (during the
continuance of an Event of Default) or in the name of a nominee of the Agent
(whether or not an Event of Default is continuing), to verify the validity,
amount or any other matter relating to the Accounts, Inventory, or other
Collateral, by mail, telephone, or otherwise.
(a) The Borrower agrees that, subject to the Borrower's prior
consent for uses other than in a traditional tombstone, which consent shall not
be unreasonably withheld or delayed, the Agent and each Lender may use the
Borrower's name in advertising and promotional material and in conjunction
therewith disclose the general terms of this Agreement. The Agent and each
Lender agree to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as "confidential" or
"secret" by the Borrower and provided to the Agent or such Lender by or on
behalf of the Borrower, under this Agreement or any other Loan Document, and
neither the Agent, nor such Lender nor any of their
71
respective Affiliates shall use any such information other than in connection
with or in enforcement of this Agreement and the other Loan Documents, except to
the extent that such information (i) was or becomes generally available to the
public other than as a result of disclosure by the Agent or such Lender, or (ii)
was or becomes available on a nonconfidential basis from a source other than the
Borrower, provided that such source is not bound by a confidentiality agreement
with the Borrower known to the Agent or such Lender; provided, however, that the
Agent and any Lender may disclose such information (1) at the request or
pursuant to any requirement of any Governmental Authority to which the Agent or
such Lender is subject or in connection with an examination of the Agent or such
Lender by any such Governmental Authority; (2) pursuant to subpoena or other
court process; (3) when required to do so in accordance with the provisions of
any applicable requirement of law; (4) to the extent reasonably required in
connection with any litigation or proceeding (including, but not limited to, any
bankruptcy proceeding) to which the Agent, any Lender or their respective
Affiliates may be party; (5) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Loan Document; (6)
to the Agent's or such Lender's independent auditors, accountants, attorneys and
other professional advisors so long as they are informed of the confidential
nature of such information; (7) to any prospective Participating Lender or
assignee under any Assignment and Acceptance, actual or potential, provided that
such prospective Participating Lender or assignee agrees to keep such
information confidential to the same extent required of the Agent and the
Lenders hereunder; (8) as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which the Borrower is party
or is deemed party with the Agent or such Lender, and (9) to its Affiliates so
long as they are informed of the confidential nature of such information.
6.7 Collateral Reporting.The Borrower shall provide the Agent with
the following documents at the following times in form satisfactory to the
Agent: (a) on a daily basis, a Borrowing Base Certificate (reflecting the
calculation of the Accounts and Inventory components thereof as provided in the
definition of Borrowing Base Certificate) and on a weekly basis, or more
frequently if requested by the Agent, a schedule of the Borrower's sales,
Accounts, collections and credits, in each case created, received or granted
since the last such schedule; (b) on a monthly basis, not later than the
fifteenth day of the following month, an aging of the Borrower's Accounts,
together with, if requested by the Agent, a reconciliation to the previous
month's aging of the Borrower's Accounts and to the Borrower's general ledger;
(c) on a monthly basis, not later than the fifteenth day of the following month,
a report indicating for each Account Debtor to whom the Borrower owes $10,000 or
more as of the last day of the previous month the name of such Account Debtor,
the amount owed by the Borrower to such Account Debtor as of the last day of
such previous month and the amount owed by such Account Debtor to the Borrower
as of the last day of such previous month; (d) on a monthly basis (or more
frequently if requested by the Agent), Inventory reports by category and
location, with additional detail, if requested by the Agent, showing additions
to and deletions from the Inventory; (e) upon request during the continuance of
a Default, copies of invoices in connection with the Borrower's Accounts,
customer statements, credit memos, remittance advices and reports, deposit
slips, shipping and delivery documents in connection with the Borrower's
Accounts and for Inventory and Equipment acquired by the Borrower, purchase
orders and invoices; (f) upon request, a statement of the balance of each of the
Intercompany Accounts; (g) upon request, an open
72
voucher and cash requirements report; (h) such other reports as to the
Collateral of the Borrower as the Agent shall reasonably request from time to
time; and (i) with the delivery of each of the foregoing, a certificate of the
Borrower executed by an officer thereof certifying as to the accuracy and
completeness of the foregoing. If any of the Borrower's records or reports of
the Collateral are prepared by an accounting service or other agent, the
Borrower hereby authorizes such service or agent to deliver such records,
reports, and related documents to the Agent, for distribution to the Lenders.
6.8 Accounts. The Borrower hereby represents and warrants to the
Agent and the Lenders, with respect to the Borrower's Accounts, that: (i) each
existing Account represents, and each future Account will represent, a bona fide
sale or lease and delivery of goods by the Borrower, or rendition of services by
the Borrower, in the ordinary course of the Borrower's business; (ii) each
existing Account is, and each future Account will be, for a liquidated amount
payable by the Account Debtor thereon on the terms set forth in the invoice
therefor or in the schedule thereof delivered to the Agent, without, with
respect to Eligible Accounts, any offset, deduction, defense, or counterclaim
except those known to the Borrower and disclosed to the Agent and the Lenders
pursuant to this Agreement; (iii) no payment will be received with respect to
any Account, and no credit, discount, or extension, or agreement therefor will
be granted on any Account, except as reported to the Agent and the Lenders in
accordance with this Agreement; (iv) each copy of an invoice required to be
delivered to the Agent by the Borrower will be a genuine copy of the original
invoice sent to the Account Debtor named therein; and (v) all goods described in
each invoice will have been delivered to the Account Debtor and all services of
the Borrower described in each invoice will have been performed in all material
respects.
(a) The Borrower shall not re-date any invoice or sale or make
sales on extended dating beyond that customary in the Borrower's business or
extend or modify any Account (other than in the ordinary course of business
consistent with past practices). If the Borrower becomes aware of any matter
adversely affecting the collectibility of any Account or Account Debtor
involving an amount greater than $1,000,000, including information regarding the
Account Debtor's creditworthiness, the Borrower will promptly so advise the
Agent.
(b) Upon notice from the Agent or if there is continuing an
Event of Default, the Borrower shall not accept any note or other instrument
(except a check or other instrument for the immediate payment of money) with
respect to any Eligible Account (which upon such acceptance, whether or not such
notice is given or an Event of Default is continuing, shall no longer constitute
an Eligible Account) or, with respect to any ineligible Account, in an amount in
excess of $250,000, without the Agent's written consent. The acceptance of any
such instrument (whether or not such notice is given by the Agent or an Event of
Default is continuing) shall be considered as evidence of the Account and not
payment thereof and, if requested by the Agent, the Borrower will promptly
deliver such instrument to the Agent, endorsed by the Borrower to the Agent in a
manner satisfactory in form and substance to the Agent. In any event (whether or
not such notice is given by the Agent or an Event of Default is continuing), the
Borrower shall give the Agent not less than two Business Days notice of the
acceptance of any such instrument with respect to an Account. Regardless of the
form of presentment, demand, notice of protest
73
with respect thereto, the Borrower shall remain liable thereon until such
instrument is paid in full.
(c) The Borrower shall notify the Agent promptly of all
disputes and claims in excess of $250,000, individually, or $1,000,000 in the
aggregate with any Account Debtor, and agrees to settle, contest, or adjust such
dispute or claim at no expense to the Agent or any Lender. No discount, credit
or allowance shall be granted to any such Account Debtor without the Agent's
prior written consent, except for discounts, credits and allowances made or
given in the ordinary course of the Borrower's business when no Event of Default
exists hereunder. The Borrower shall send the Agent a copy of each credit
memorandum in excess of $250,000 as soon as issued. The Agent may, and at the
direction of the Majority Lenders shall, at all times when an Event of Default
exists hereunder, settle or adjust disputes and claims directly with Account
Debtors for amounts and upon terms which the Agent or the Majority Lenders, as
applicable, shall consider advisable and, in all cases, the Agent will credit
the Borrower's Loan Account with only the net amounts received by the Agent in
payment of any Accounts.
(d) If an Account Debtor returns any Inventory to the Borrower
when no Event of Default exists, then the Borrower shall in the ordinary course
of its business consistent with past practices promptly determine the reason for
such return and shall issue a credit memorandum to the Account Debtor in the
appropriate amount. The Borrower shall immediately report to the Agent any
return involving an amount in excess of $250,000. Each such report shall
indicate the reasons for the returns and the locations and condition of the
returned Inventory. In the event any Account Debtor returns Inventory to the
Borrower when an Event of Default exists, the Borrower, upon request of the
Agent, shall: (i) hold the returned Inventory in trust for the Agent; (ii)
segregate all returned Inventory from all of its other property; (iii) dispose
of the returned Inventory solely according to the Agent's written instructions;
and (iv) not issue any credits or allowances with respect thereto without the
Agent's prior written consent. All returned Inventory shall be subject to the
Agent's Liens thereon. Whenever any Inventory is returned, the related Account
shall be deemed ineligible to the extent of the amount owing by the Account
Debtor with respect to such returned Inventory.
6.9 Collection of Accounts; Payments. The Borrower shall
maintain lock-box accounts and other lock-box arrangements reasonably
satisfactory to the Agent with such banks as are reasonably acceptable to the
Agent to which all Account Debtors shall be instructed to make payments on
Accounts. If, notwithstanding such instructions, the Borrower receives any
payments with respect to Accounts or, subject to the terms of the Intercreditor
Agreement with respect to Secured Sale/Leaseback Collateral or Shared
Collateral, if the Borrower receives any payments on account of Inventory and
other Collateral or any other payments from whatever source (other than
immaterial amounts not to exceed $50,000 in the aggregate at any one time),
whether in the form of cash, checks, notes, drafts, bills of exchange, money
orders or otherwise (collectively all of the foregoing, including without
limitation, payments with respect to Accounts, referred to herein as
"Payments"), the Borrower will, at its own cost and expense, cause all such
Payments to be deposited not less often than daily in one of the lock-box
accounts referred to above or in a Payment Account. All funds in such lock-box
accounts shall be transferred on each Business Day to one or more concentration
accounts designated by the Agent with a bank reasonably acceptable to the Agent.
Each bank requested by the Agent at which a
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lock-box account is maintained and each bank at which a concentration account
referred to in the immediately preceding sentence is maintained shall execute
and deliver to the Agent such agreements, in form and substance satisfactory to
the Agent, as the Agent shall request with respect to such accounts, including,
without limitation, with respect to prohibitions on the Borrower withdrawing
funds from such accounts or otherwise directing or modifying actions with
respect to such accounts. Each agreement with a bank at which a concentration
account is established shall provide, among other things, that all funds
deposited into such account shall be transferred directly to the Agent on a
daily basis. The Agent or the Agent's designee may, at any time after the
occurrence and during the continuance of a Default or an Event of Default,
notify Account Debtors that the Accounts have been assigned to the Agent and of
the Agent's security interest therein, and may collect them directly and charge
the collection costs and expenses to the Borrower's Loan Account as a Revolving
Loan. So long as an Event of Default has occurred and is continuing, the
Borrower, at the Agent's request, shall execute and deliver to the Agent such
documents as the Agent requires to grant the Agent access to any post office box
in which collections of Accounts are received.
(a) If sales of Inventory are made for cash, the Borrower
shall immediately deliver to the Agent or deposit into a Payment Account the
cash which the Borrower receives.
(b) All payments, including immediately available funds
received by the Agent at a bank designated by it, received by the Agent on
account of Accounts or as proceeds of other Collateral (other than Secured
Sale/Leaseback Collateral and Shared Collateral except as provided in the
Intercreditor Agreement) will be the Agent's sole property for its benefit and
the benefit of the Lenders and will be credited to the Borrower's Loan Account
(conditional upon final collection) on the Business Day following receipt by the
Agent (except for any such payments received by the Agent by 1:00 p.m. (New York
time) on a Business Day, in which case such payments shall be credited to the
Borrower's Loan Account (conditional upon final collection) on the Business Day
received by the Agent; it being agreed that, except as otherwise provided herein
(including, in any event, Section 6.9(d)), any such payments which the Borrower
has notified the Agent prior to 12:00 noon (New York time) on a Business Day
that such payment will be received by the Agent via wire transfer prior to 4:00
p.m. (New York time) on such Business Day shall be deemed to be received by the
Agent for this purpose prior to 1:00 p.m. (New York time) on such Business Day,
but only if such payment is actually received by the Agent via wire transfer no
later than 4:00 p.m. (New York time) on such Business Day and the Borrower
hereby agrees to indemnify and hold harmless the Agent and each Lender from and
against any and all actual out-of-pocket liabilities, obligations, losses,
damages, penalties, costs or expenses incurred by the Agent or such Lender in
the event such payment is not actually received by the Agent via wire transfer
by such time); provided, however, that such payments shall be deemed to be
credited to the Borrower's Loan Account immediately upon receipt for purposes of
(i) determining Availability, (ii) calculating the unused line fee pursuant to
Section 3.5, and (iii) calculating the amount of interest to be distributed by
the Agent to the Lenders (but not the amount of interest payable by the
Borrower).
(c) In the event the Borrower repays all of the Obligations
upon the termination of this Agreement or upon acceleration of the Obligations,
other than through the Agent's receipt of payments on account of the Accounts or
proceeds of the other Collateral, such
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payment will be credited (conditional upon final collection) to the Borrower's
Loan Account one (1) Business Day after the Agent's receipt of such funds
(except for any such payment received by the Agent by 1:00 p.m. (New York time)
on a Business Day, in which case such payment shall be credited to the
Borrower's Loan Account (conditional upon final collection) on the Business Day
received by the Agent).
6.10 Inventory; Perpetual Inventory. The Borrower represents and
warrants to the Agent and the Lenders and agrees with the Agent and the Lenders
that all of the Inventory owned by the Borrower is and will be held for sale or
lease, or to be furnished in connection with the rendition of services, in the
ordinary course of the Borrower's business, and is and will be fit for such
purposes. The Borrower will use commercially reasonable efforts to keep its
Inventory in good and saleable condition, at its own expense. The Borrower will
not, without the prior written consent of the Agent, acquire or accept any
Inventory on consignment or approval. The Borrower agrees that all Inventory
produced in the United States will be produced in accordance in all material
respects with the Federal Fair Labor Standards Act of 1938, as amended, and all
rules, regulations, and orders thereunder. The Borrower will conduct a physical
count of the Inventory at least once per Fiscal Year, and after and during the
continuation of an Event of Default, at such other times as the Agent requests.
The Borrower will maintain a perpetual inventory reporting system at all times.
The Borrower will not, without the Agent's written consent, sell any Inventory
on a ▇▇▇▇-and-hold, guaranteed sale, sale and return, sale on approval,
consignment, or other repurchase or return basis (other than for damage).
6.11 Equipment. The Borrower represents and warrants to the Agent
and the Lenders and agrees with the Agent and the Lenders that all of the
Equipment owned by the Borrower which is necessary for the conduct of the
Borrower's business (including, in any event, all Credit Agreement Term Loan
Equipment Collateral) is and will be used or held for use in the Borrower's
business, and is and will be fit for such purposes. The Borrower shall keep and
maintain such Equipment (including, in any event, all Credit Agreement Term Loan
Equipment Collateral and ▇▇▇▇▇ Term Loan Equipment Collateral) in good operating
condition and repair (ordinary wear and tear excepted) and shall make all
necessary replacements thereof.
(a) The Borrower shall promptly inform the Agent of any
material additions to or deletions from the Equipment. The Borrower shall not
permit any Equipment to become a fixture with respect to real property or to
become an accession with respect to other personal property with respect to
which real or personal property the Agent does not have a Lien. The Borrower
will not, without the Agent's prior written consent, alter or remove any
identifying symbol or number on any of the Borrower's Equipment consisting of
Collateral.
(b) The Borrower shall not, without the Majority Lenders'
prior written consent, sell, lease as a lessor, or otherwise dispose of any of
the Borrower's Equipment; provided, however, that the Borrower may, subject to
the maximum disposition limitations set forth in Sections 9.9(ii) and (v),
dispose of (i) Equipment to the extent permitted pursuant to Section 9.9, (ii)
obsolete or unusable Equipment constituting Secured Sale/Leaseback Collateral
not leased by the Borrower pursuant to the Secured Sale/Leaseback Documents
having an orderly liquidation value, together with the orderly liquidation value
of all other obsolete or unusable Equipment disposed of by the Borrower, of not
greater than $10,000,000 in the aggregate in any
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Fiscal Year, or $30,000,000 in the aggregate during the term of this Agreement
(from the Original Closing Date), (iii) obsolete or unusable Equipment
constituting Credit Agreement Term Loan Equipment Collateral or ▇▇▇▇▇ Term Loan
Equipment Collateral having an orderly liquidation value of not greater than
$1,000,000 in the aggregate in any Fiscal Year, or $2,000,000 in the aggregate
during the term of this Agreement (from the Original Closing Date), and (iv)
obsolete or unusable Equipment (other than Equipment constituting Secured
Sale/Leaseback Collateral, Credit Agreement Term Loan Equipment Collateral or
▇▇▇▇▇ Term Loan Equipment Collateral) having an orderly liquidation value of not
greater than $2,500,000 in the aggregate in any Fiscal Year, or $5,000,000 in
the aggregate during the term of this Agreement (from the Original Closing
Date), in each instance, without the Majority Lenders' consent, subject to the
conditions set forth in the remainder of this clause (c). In the event any of
such Equipment is sold, transferred or otherwise disposed of pursuant to the
proviso contained in the immediately preceding sentence, then, except for the
sale by the Borrower on June 15, 2000 of Equipment pursuant to the Secured
Sale/Leaseback Arrangements and substitutions and additions thereto not
constituting Credit Agreement Term Loan Equipment Collateral or Excluded
Sale/Leaseback Assets and except for the sale by the Borrower of any Equipment
which, pursuant to Section 6.1(a)(v), no longer constitutes Collateral and
secures the payment of the Senior Replacement Notes, the Borrower shall use the
proceeds of such sale, transfer or disposition to purchase replacement Equipment
or to repay Obligations hereunder and shall deliver to the Agent written
evidence of the use of the proceeds for such purchase. All such replacement
Equipment purchased by the Borrower shall be free and clear of all Liens except
the Agent's Lien, the Liens in favor of the holders of the obligations of the
Borrower under the Secured Sale/Leaseback Documents (but only (i) to the extent
such replacement Equipment does not constitute Excluded Sale/Leaseback Assets
and (ii) in the event such replacement Equipment constitutes Credit Agreement
Term Loan Equipment Collateral which is not Excluded Sale/Leaseback Assets, if
the Lien of such holders therein is subordinate to the Agent's Lien therein
pursuant to the terms of the Intercreditor Agreement) and Purchase Money Liens
in respect of Purchase Money Obligations permitted hereunder (but only to the
extent such replacement Equipment does not constitute Credit Agreement Term Loan
Equipment Collateral or ▇▇▇▇▇ Term Loan Equipment Collateral). Any Equipment
replacing Credit Agreement Term Loan Equipment Collateral or ▇▇▇▇▇ Term Loan
Equipment Collateral (other than any Equipment which, pursuant to Section
6.1(a)(v), no longer constitutes Collateral and secures the payment of the
Senior Replacement Notes) shall have an orderly liquidation value equal to or
greater than that of the Equipment being replaced as determined by an appraisal
in form and substance satisfactory to the Agent and by an appraiser satisfactory
to the Agent or by other evidence satisfactory to the Agent.
6.12 Assigned Contracts. The Borrower shall fully perform all of
its obligations under each of the Assigned Contracts, and shall enforce all of
its rights and remedies thereunder, in each case, as it deems appropriate in its
business judgment. Without limiting the generality of the foregoing, the
Borrower shall take all action necessary or appropriate to permit, and shall not
take any action which would have any materially adverse effect upon, the full
enforcement of all indemnification rights under its Assigned Contracts taken as
a whole. The Borrower shall notify the Agent and the Lenders in writing,
promptly after the Borrower becomes aware thereof, of any event or fact which
could reasonably be expected to give rise to a claim by it for indemnification
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in excess of $250,000 under any of its Assigned Contracts, and shall diligently
pursue such right and report to the Agent on all further developments with
respect thereto. Except as provided otherwise in the Intercreditor Agreement,
the Borrower shall remit directly to the Agent for application to the
Obligations in such order as the Majority Lenders shall determine, all amounts
received by the Borrower as indemnification or otherwise pursuant to its
Assigned Contracts. If the Borrower shall fail after the Agent's demand to
pursue diligently any material right under its Assigned Contracts, or if an
Event of Default then exists, the Agent may, and at the direction of the
Majority Lenders shall, directly enforce such right in its own or the Borrower's
name and may enter into such settlements or other agreements with respect
thereto as the Agent or the Majority Lenders, as applicable, shall determine. In
any suit, proceeding or action brought by the Agent for the benefit of the
Lenders under any Assigned Contract for any sum owing thereunder or to enforce
any provision thereof, the Borrower shall indemnify and hold the Agent and
Lenders harmless from and against all expense, loss or damage suffered by reason
of any defense, setoff, counterclaims, recoupment, or reduction of liability
whatsoever of the obligor thereunder arising out of a breach by the Borrower of
any obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing from the Borrower to or in favor of such obligor or
its successors. All such obligations of the Borrower shall be and remain
enforceable only against the Borrower and shall not be enforceable against the
Agent or the Lenders. Notwithstanding any provision hereof to the contrary, the
Borrower shall at all times remain liable to observe and perform all of its
duties and obligations under its Assigned Contracts, and the Agent's or any
Lender's exercise of any of their respective rights with respect to the
Collateral shall not release the Borrower from any of such duties and
obligations. Neither the Agent nor any Lender shall be obligated to perform or
fulfill any of the Borrower's duties or obligations under its Assigned Contracts
or to make any payment thereunder, or to make any inquiry as to the nature or
sufficiency of any payment or property received by it thereunder or the
sufficiency of performance by any party thereunder, or to present or file any
claim, or to take any action to collect or enforce any performance, any payment
of any amounts, or any delivery of any property.
6.13 Documents, Instruments, and Chattel Paper. The Borrower
represents and warrants to the Agent and the Lenders that (a) all documents,
instruments, and chattel paper describing, evidencing, or constituting
Collateral, and all signatures and endorsements thereon (except those of Persons
other than the Borrower or any of its Affiliates which shall be only to the
knowledge of the Borrower), are and will be complete in all material respects,
valid, and genuine, and (b) all goods evidenced by such documents, instruments,
and chattel paper are and will be owned by the Borrower, free and clear of all
Liens other than Permitted Liens.
6.14 Right to Cure. The Agent may, in its discretion, and shall, at
the direction of the Majority Lenders, pay any amount or do any act required of
the Borrower hereunder or under any other Loan Document in order to preserve,
protect, maintain or enforce the Obligations, the Collateral or the Agent's
Liens therein, and which the Borrower fails to pay or do, including, without
limitation, payment of any judgment against the Borrower, any insurance premium,
any warehouse charge, any finishing or processing charge, any landlord's claim,
and any other Lien upon or with respect to the Collateral. All payments that the
Agent makes under this Section 6.14 and all reasonable out-of-pocket costs and
expenses that the Agent pays or incurs in connection with any action taken by it
hereunder shall be charged to the Borrower's Loan
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Account as a Revolving Loan. Any payment made or other action taken by the Agent
under this Section 6.14 shall be without prejudice to any right to assert an
Event of Default hereunder and to proceed thereafter as herein provided.
6.15 Power of Attorney. The Borrower hereby appoints the Agent and
the Agent's designee as the Borrower's attorney, with power: (a) so long as any
Event of Default has occurred and is continuing, to endorse the Borrower's name
on any checks, notes, acceptances, money orders, or other forms of payment or
security that come into the Agent's or any Lender's possession; (b) to sign the
Borrower's name on any invoice, ▇▇▇▇ of lading, warehouse receipt or other
document of title relating to any Collateral, on drafts against customers, on
assignments of Accounts, on notices of assignment, financing statements and
other public records and to file any such financing statements by electronic
means with or without a signature as authorized or required by applicable law or
filing procedure; (c) so long as any Event of Default has occurred and is
continuing, to notify the post office authorities to change the address for
delivery of the Borrower's mail to an address designated by the Agent and to
receive, open and dispose of all mail addressed to the Borrower; (d) to send
requests for verification of Accounts to customers or Account Debtors (in the
name of the Borrower or a nominee of the Agent or, with the consent of the
Borrower, in the name of the Agent so long as no Event of Default has occurred
and is continuing, and in the name of the Borrower, the Agent or a nominee of
the Agent if an Event of Default has occurred and is continuing); (e) so long as
any Event of Default has occurred and is continuing, to clear Inventory, the
purchase of which was financed with Letters of Credit, through customs in the
Borrower's name, the Agent's name or the name of the Agent's designee, and to
sign and deliver to customs officials powers of attorney in the Borrower's name
for such purpose; and (f) so long as any Event of Default has occurred and is
continuing, to do all things necessary to carry out this Agreement. The Borrower
ratifies and approves all acts of such attorney. None of the Lenders or the
Agent nor their attorneys will be liable for any acts or omissions or for any
error of judgment or mistake of fact or law unless determined by a final and
non-appealable decision of a court of competent jurisdiction to constitute the
gross negligence or willful misconduct of the Agent. This power, being coupled
with an interest, is irrevocable until this Agreement has been terminated and
the Obligations have been fully satisfied.
6.16 The Agent's and Lenders' Rights, Duties and Liabilities. The
Borrower assumes all responsibility and liability arising from or relating to
the use, sale or other disposition of the Collateral. The Obligations shall not
be affected by any failure of the Agent or any Lender to take any steps to
perfect the Agent's Liens or to collect or realize upon the Collateral, nor
shall loss of or damage to the Collateral release the Borrower from any of the
Obligations. Following the occurrence and continuation of an Event of Default,
the Agent may (but shall not be required to), and at the direction of the
Majority Lenders shall, without notice to or consent from the Borrower, ▇▇▇ upon
or otherwise collect, extend the time for payment of, modify or amend the terms
of, compromise or settle for cash, credit, or otherwise upon any terms, grant
other indulgences, extensions, renewals, compositions, or releases, and take or
omit to take any other action with respect to the Collateral, any security
therefor, any agreement relating thereto, any insurance applicable thereto, or
any Person liable directly or indirectly in connection with any of the
foregoing, without discharging or otherwise affecting the liability of the
Borrower for the Obligations or under this Agreement or any other agreement now
or hereafter existing between the Agent and/or any Lender and the Borrower.
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6.17 Intercreditor Agreement. Notwithstanding anything to the
contrary contained in this Agreement or in any other Loan Document, the priority
of the Agent's Lien in, and the rights and remedies of the Agent with respect
to, the Secured Sale/Leaseback Collateral and the Shared Collateral are limited
by and subject to the terms of the Intercreditor Agreement.
ARTICLE 7
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
7.1 Books and Records. Each of the Borrower and Parent shall
maintain (and shall cause each of their respective Subsidiaries to maintain), at
all times, correct and complete books, records and accounts in which complete
(in all material respects), correct and timely entries are made of its
transactions in conformity with past practices. Each of the Borrower and Parent
shall (and shall cause each of their respective Subsidiaries to), by means of
appropriate entries, reflect in such accounts and in all Financial Statements
proper liabilities and reserves for all taxes and proper provision for
depreciation and amortization of property and bad debts, all in accordance with
GAAP. Each of the Borrower and Parent shall maintain (and shall cause each of
their respective Subsidiaries to maintain) at all times books and records
pertaining to the Collateral in such detail, form and scope as the Agent or any
Lender shall reasonably require, including, but not limited to, records of (a)
all payments received and all credits and extensions granted with respect to the
Accounts; (b) the return, rejections, repossession, stoppage in transit, loss,
damage, or destruction of any Inventory; and (c) all other dealings affecting
the Collateral.
7.2 Financial Information. Each of the Borrower and Parent shall
promptly furnish to each Lender, all such financial information as the Agent or
any Lender shall reasonably request, and notify its auditors and accountants
that the Agent, on behalf of the Lenders, is authorized to obtain such
information directly from them. Without limiting the foregoing, each of the
Borrower and Parent will furnish to the Agent, in sufficient copies for
distribution by the Agent to each Lender, in such detail as the Agent or the
Lenders shall reasonably request, the following:
(a) As soon as available, but in any event not later than
ninety (90) days after the close of each Fiscal Year, consolidated audited and
consolidating audited balance sheets, and statements of income and expense, cash
flow and of stockholders' equity for the Borrower and its Subsidiaries for such
Fiscal Year, and the accompanying notes thereto, setting forth in each case in
comparative form figures for the previous Fiscal Year, all in reasonable detail,
fairly presenting in all material respects the financial position and the
results of operations of the Borrower and its consolidated Subsidiaries as at
the date thereof and for the Fiscal Year then ended, and prepared in accordance
with GAAP. Such statements shall be examined in accordance with generally
accepted auditing standards by and, in the case of such statements prepared on a
consolidated basis, accompanied by a report thereon unqualified as to scope of
independent certified public accountants selected by the Borrower and reasonably
satisfactory to the Agent. The Agent agrees that Deloitte & Touche LLP is
reasonably satisfactory to the Agent. The Borrower, simultaneously with
retaining such independent public accountants to conduct such annual audit,
shall send a letter to such accountants, with a copy to the Agent and the
Lenders, notifying such accountants that one of the primary purposes for
retaining such accountants' services and having audited financial statements
prepared by them is for use by
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the Agent and the Lenders. The Borrower hereby authorizes the Agent to
communicate directly with its certified public accountants and, by this
provision, authorizes those accountants to disclose to the Agent any and all
financial statements and other supporting financial documents and schedules
relating to the Borrower and to discuss directly with the Agent the finances and
affairs of the Borrower. The Agent agrees to provide the Borrower with
reasonable prior notice of the Agent's intention to communicate with the
Borrower's certified public accountants and an opportunity to be present at any
such communications.
(b) As soon as available, but in any event not later than
thirty (30) days after the end of each fiscal month, consolidated and
consolidating unaudited balance sheets of the Borrower and its consolidated
Subsidiaries as at the end of such fiscal month, and consolidated and
consolidating unaudited statements of income and expense and cash flow for the
Borrower and its consolidated Subsidiaries for such fiscal month and for the
period from the beginning of the Fiscal Year to the end of such fiscal month,
all in reasonable detail, fairly presenting in all material respects the
financial position and results of operations of the Borrower and its
consolidated Subsidiaries as at the date thereof and for such periods, and
prepared in accordance with GAAP applied consistently with the audited Financial
Statements required to be delivered pursuant to Section 7.2(a) (except for the
absence of footnotes and subject to normal year-end adjustments). The Borrower
shall certify by a certificate signed by its chief financial officer or
treasurer that all such statements have been prepared in accordance with GAAP
and present fairly in all material respects (except for the absence of footnotes
and subject to normal year-end adjustments) the Borrower's financial position as
at the dates thereof and its results of operations for the periods then ended.
(c) As soon as available, but in any event not later than
forty-five (45) days after the close of each fiscal quarter other than the
fourth quarter of a Fiscal Year, consolidated and consolidating unaudited
balance sheets of the Borrower and its consolidated Subsidiaries as at the end
of such quarter, and consolidated and consolidating unaudited statements of
income and expense and statement of cash flows for the Borrower and its
Subsidiaries for such quarter and for the period from the beginning of the
Fiscal Year to the end of such quarter, all in reasonable detail, fairly
presenting in all material respects the financial position and results of
operation of the Borrower and its Subsidiaries as at the date thereof and for
such periods, prepared in accordance with GAAP consistent with the audited
Financial Statements required to be delivered pursuant to Section 7.2(a) (except
for the absence of footnotes and subject to normal year-end adjustments). The
Borrower shall certify by a certificate signed by its chief financial officer or
treasurer that all such statements have been prepared in accordance with GAAP
and present fairly in all material respects (except for the absence of footnotes
and subject to normal year-end adjustments) the Borrower's financial position as
at the dates thereof and its results of operations for the periods then ended.
(d) With each of the audited Financial Statements delivered
pursuant to Section 7.2(a), a certificate of the independent certified public
accountants that examined such statement to the effect that they have reviewed
and are familiar with this Agreement and that, in the course of its audit of
such Financial Statements, they did not become aware of any fact or condition
which then constituted a Default or Event of Default, except for those, if any,
described in reasonable detail in such certificate.
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(e) With each of the annual audited Financial Statements
delivered pursuant to Section 7.2(a), and within forty-five (45) days after the
end of each fiscal quarter, a certificate of the chief financial officer or
treasurer of the Borrower (i) setting forth in reasonable detail the
calculations required to establish that the Borrower was in compliance with the
covenants set forth in Sections 9.23 and 9.26 during the period covered in such
Financial Statements and as at the end thereof, and (ii) stating that, except as
explained in reasonable detail in such certificate, (A) all of the
representations and warranties of the Borrower contained in this Agreement and
the other Loan Documents are correct and complete in all material respects as at
the date of such certificate as if made at such time, (B) the Borrower is, at
the date of such certificate, in compliance in all material respects with all of
its respective covenants and agreements in this Agreement and the other Loan
Documents, (C) no Default or Event of Default then exists or existed during the
period covered by such Financial Statements, (D) describing and analyzing in
reasonable detail all material trends, changes, and developments in each and all
Financial Statements; and (E) explaining the variances of the figures in the
corresponding budgets and prior Fiscal Year financial statements. If such
certificate discloses that a representation or warranty is not correct or
complete, or that a covenant has not been complied with, or that a Default or
Event of Default existed or exists, such certificate shall set forth what action
the Borrower has taken or proposes to take with respect thereto.
(f) No later than 60 days after the beginning of each Fiscal
Year, annual forecasts (to include forecasted consolidated and consolidating
balance sheets, statements of income and expenses and statements of cash flow)
for the Borrower and its Subsidiaries as at the end of and for each fiscal month
of such Fiscal Year.
(g) Promptly after filing with the PBGC and the IRS, a copy of
each annual report or other material filing filed with respect to each Plan of
the Borrower or Parent.
(h) Promptly upon the filing thereof, copies of all reports,
if any, to or other documents filed by the Borrower, Parent or any of its
Subsidiaries with the Securities and Exchange Commission under the Exchange Act,
and all reports, notices, or statements sent or received by the Borrower, Parent
or any of its Subsidiaries to or from the holders of any equity interests of
Borrower, Parent (other than routine non-material correspondence sent by
shareholders of Parent to Parent) or any such Subsidiary or of any Debt of
Parent or any of its Subsidiaries registered under the Securities Act of 1933 or
to or from the trustee under any indenture under which the same is issued.
(i) As soon as available, but in any event not later than 15
days after the Borrower's or Parent's receipt thereof, a copy of all management
reports and management letters prepared for the Borrower or Parent by Deloitte &
Touche LLP or any other independent certified public accountants of the Borrower
or Parent.
(j) Promptly after their preparation, copies of any and all
proxy statements, financial statements, and reports which the Borrower or Parent
makes available to its shareholders.
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(k) Upon request of the Agent, a copy of each tax return filed
by Parent or by any of its Subsidiaries.
(l) With the first financial statements delivered pursuant to
Section 7.2(b) after the Closing Date, a pro forma balance sheet of the Borrower
as at the first fiscal month end following the Closing Date reflecting the
Borrower's financial condition as at that date after giving effect to the
transactions contemplated herein to occur on the Closing Date (such pro forma
balance sheet to be prepared in accordance with GAAP (subject to the absence of
footnotes and normal year-end adjustments)), together with a reconciliation in
reasonable detail of the changes in the Borrower's financial condition on that
date as a result of the transactions contemplated herein to occur on the Closing
Date from that immediately prior to such transactions.
(m) Such additional information as the Agent and/or any Lender
may from time to time reasonably request regarding the financial and business
affairs of Parent or any Subsidiary.
7.3 Notices to the Lenders. The Borrower or Parent shall notify
the Agent, in writing of the following matters at the following times:
(a) Immediately after becoming aware of any Default or Event
of Default or of any Lease Default, Material Default or Lease Event of Default
(as defined in the Secured Sale/Leaseback Documents), by notice or otherwise.
(b) Immediately after becoming aware of the assertion by the
holder of any capital stock of Parent, the Borrower or any Subsidiary thereof or
of any Debt of Parent or any of its Subsidiaries in excess of $2,500,000 that a
default exists with respect thereto or that Parent, the Borrower or any
Subsidiary is not in compliance with the terms thereof, or the actual threat or
commencement by such holder of any enforcement action because of such asserted
default or non-compliance.
(c) Immediately after becoming aware of any event which has
resulted in, or which could reasonably be expected to result in, a Material
Adverse Effect.
(d) Immediately after becoming aware of any pending or actual
threatened action, suit, proceeding, or counterclaim by any Person, or any
pending or actual threatened investigation by a Governmental Authority, which
may reasonably be expected to materially and adversely affect the Collateral,
the repayment of the Obligations, the Agent's or any Lender's rights under the
Loan Documents, or the property, business, operations, or condition (financial
or otherwise) of the Borrower and Parent taken as a whole.
(e) Immediately after becoming aware of any pending or actual
threatened strike, work stoppage, unfair labor practice claim, or other labor
dispute affecting Parent or any of its Subsidiaries in a manner which could
reasonably be expected to have a Material Adverse Effect.
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(f) Immediately after becoming aware of any violation of any
law, statute, regulation, or ordinance of a Governmental Authority affecting
Parent or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect.
(g) Immediately after receipt of any notice of any violation
by Parent or any of its Subsidiaries of any Environmental Law where such
violation could reasonably be expected to have a Material Adverse Effect or that
any Governmental Authority has asserted that Parent or any Subsidiary thereof is
not in compliance with any Environmental Law or is investigating Parent's or
such Subsidiary's compliance therewith which, in either case, is reasonably
likely to give rise to liability in excess of $1,000,000.
(h) Immediately after receipt of any written notice that
Parent or any of its Subsidiaries is or may be liable to any Person as a result
of the Release or threatened Release of any Contaminant or that Parent or any
Subsidiary is subject to investigation by any Governmental Authority evaluating
whether any remedial action is needed to respond to the Release or threatened
Release of any Contaminant which, in either case, is reasonably likely to give
rise to liability in excess of $1,000,000.
(i) Immediately after receipt of any written notice of the
imposition of any Environmental Lien against any property owned by Parent or any
of its Subsidiaries.
(j) Any change in the Borrower's name, state of incorporation,
or form of organization, trade names or styles under which the Borrower will
sell Inventory or create Accounts, or to which instruments in payment of
Accounts may be made payable, in each case at least thirty (30) days prior
thereto.
(k) Within ten (10) Business Days after the Borrower, Parent
or any ERISA Affiliate knows or has reason to know, that an ERISA Event or a
non-exempt prohibited transaction (as defined in Sections 406 of ERISA and 4975
of the Code) has occurred, and, when known, any action taken or threatened by
the IRS, the DOL or the PBGC with respect thereto.
(l) Upon request, or, in the event that such filing reflects a
significant change with respect to the matters covered thereby, within ten (10)
Business Days after the filing thereof with the PBGC, the DOL or the IRS, as
applicable, copies of the following: (i) each annual report (form 5500 series),
including Schedule B thereto, filed with the PBGC, the DOL or the IRS with
respect to each Plan, (ii) a copy of each funding waiver request filed with the
PBGC, the DOL or the IRS with respect to any Plan and all communications
received by the Borrower, Parent or any ERISA Affiliate from the PBGC, the DOL
or the IRS with respect to such request, and (iii) a copy of each other filing
or notice filed with the PBGC, the DOL or the IRS, with respect to each Plan of
either the Borrower, Parent or any ERISA Affiliate.
(m) Upon request, copies of each actuarial report for any Plan
or Multi-employer Plan and annual report for any Multi-employer Plan; and within
ten (10) Business Days after receipt thereof by the Borrower, Parent or any
ERISA Affiliate, copies of the following: (i) any notices of the PBGC's
intention to terminate a Plan or to have a trustee appointed to administer such
Plan; (ii) any favorable or unfavorable determination letter from the IRS
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regarding the qualification of a Plan under Section 401(a) of the Code; or (iii)
any notice from a Multi-employer Plan regarding the imposition of withdrawal
liability.
(n) Within ten (10) Business Days after the occurrence
thereof: (i) any changes in the benefits of any existing Plans which increase
the Borrower's or Parent's annual costs with respect thereto by an amount in
excess of $1,000,000 in the aggregate for all such Plans, or the establishment
of any new Plan or the commencement of contributions to any Plan to which the
Borrower, Parent or any ERISA Affiliate was not previously contributing; or (ii)
any failure by the Borrower, Parent or any ERISA Affiliate to make a required
installment or any other required payment under Section 412 of the Code on or
before the due date for such installment or payment.
(o) Within ten (10) Business Days after the Borrower, Parent
or any ERISA Affiliate knows or has reason to know that any of the following
events has or will occur: (i) a Multi-employer Plan has been or will be
terminated; (ii) the administrator or plan sponsor of a Multi-employer Plan
intends to terminate a Multi-employer Plan; or (iii) the PBGC has instituted or
will institute proceedings under Section 4042 of ERISA to terminate a
Multi-employer Plan.
Each notice given under this Section shall describe the
subject matter thereof in reasonable detail, and shall set forth the action that
Parent, the Borrower, its Subsidiary, or any ERISA Affiliate, as applicable, has
taken or proposes to take with respect thereto.
ARTICLE 8
GENERAL WARRANTIES AND REPRESENTATIONS
Each of the Borrower and Parent, jointly and severally,
warrants and represents to the Agent and the Lenders that except as hereafter
disclosed to and accepted by the Agent and the Majority Lenders in writing:
8.1 Authorization, Validity, and Enforceability of this Agreement
and the Other Transaction Documents. Each of the Borrower and Parent has the
corporate power and authority to execute, deliver and perform this Agreement and
the other Transaction Documents to which it is a party, to incur the
Obligations, and to grant to the Agent Liens upon and security interests in the
Collateral. Each of the Borrower and Parent has taken all necessary corporate
action (including without limitation, obtaining approval of its stockholders if
necessary) to authorize its execution, delivery, and performance of this
Agreement and the other Transaction Documents to which it is a party. No
consent, approval, exemption or authorization or other action of, or notice to,
or declaration or filing with, any Governmental Authority, and no consent of any
other Person, is required in connection with the execution, delivery or
performance by, or enforcement against, the Borrower or Parent of this Agreement
and the other Transaction Documents, except for those already duly obtained or
made and except for the filing of (i) Uniform Commercial Code financing
statements, Mortgages and security documents relating to Proprietary Rights in
the appropriate governmental filing offices in order to perfect the Agent's
Liens in certain of the Collateral, (ii) Uniform Commercial Code financing
statements, mortgages and other security documents in the appropriate
governmental filing offices in order to perfect the Liens granted
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under the Secured Sale/Leaseback Documents and (iii) the ▇▇▇▇▇/Cup Merger
Documents with the Secretary of State for the State of Delaware in order to
effectuate the ▇▇▇▇▇/Cup Merger. This Agreement and the other Transaction
Documents to which it is a party have been duly executed and delivered by the
Borrower and Parent, and constitute the legal, valid and binding obligations of
the Borrower and Parent, enforceable against each of the Borrower and Parent in
accordance with their respective terms without defense, setoff or counterclaim.
The Borrower's and Parent's execution, delivery, and performance of this
Agreement and the other Transaction Documents to which it is a party do not and
will not conflict with, or constitute a violation or breach of, or constitute a
default under, or result in the creation or imposition of any Lien upon the
property of Parent or any of its Subsidiaries by reason of the terms of (a) any
contract, mortgage, Lien, lease, agreement, indenture, or instrument to which
Parent or any of its Subsidiaries is a party or which is binding upon it (except
to the extent with respect to the foregoing such conflicts, violations, breaches
or defaults could not individually or in the aggregate reasonably be expected to
have a Material Adverse Effect), (b) any material Requirement of Law applicable
to Parent or any of its Domestic Subsidiaries, or (c) the certificate or
articles of incorporation or bylaws of Parent or any of its Domestic
Subsidiaries. Each borrowing of a Loan and issuance of a Letter of Credit or
Credit Support and each delivery by the Borrower of a Borrowing Base Certificate
constitutes a representation and warranty by the Borrower and Parent that, as of
the date of such borrowing, issuance or delivery, as the case may be, the
financial accommodations provided to the Borrower under this Agreement do not as
of such date violate the borrowing limits set forth in (i) with respect to any
such borrowing, issuance or delivery made on or prior to the payment or
redemption in full of the Senior Subordinated Notes, the indenture relating to
the Senior Subordinated Notes (which as of the Closing Date is, with respect to
the revolving line of credit portion of the Total Facility, 80% of the
Borrower's accounts not more than 60 days past due plus 50% of the Borrower's
inventory, each calculated in accordance with GAAP, (as provided in clause (a)
of the second paragraph of Section 4.09 of such indenture) and, with respect to
the Term Loans, $25,000,000 (as provided in clauses (c) and (e) of the second
paragraph of Section 4.09 of such indenture), (ii) with respect to any such
borrowing, issuance or delivery made on or after the consummation of the
▇▇▇▇▇/Cup Merger and prior to the payment or redemption in full of the ▇▇▇▇▇
Senior Subordinated Notes, the indenture relating to the ▇▇▇▇▇ Senior
Subordinated Notes and (iii) with respect to any such borrowing, issuance or
delivery made on or after the issuance of the Senior Replacement Notes (if
issued), the indenture relating to the Senior Replacement Notes.
8.2 Validity and Priority of Security Interest. The provisions of
this Agreement, the Mortgage(s) (when executed), and the other Loan Documents
create legal and valid Liens on all the Collateral in favor of the Agent, for
the ratable benefit of the Agent and the Lenders, and such Liens constitute
perfected and continuing Liens on all the Collateral, and with respect to Credit
Agreement Collateral, having priority over all other Liens on such Collateral,
securing all the Obligations, and enforceable against the Borrower and all third
parties.
8.3 Organization and Qualification.Each of the Borrower and Parent
(a) is duly incorporated and organized and validly existing in good standing
under the laws of the state of its incorporation, (b) is qualified to do
business as a foreign corporation and is in good standing in the jurisdictions
set forth on Schedule 8.3 as updated from time to time by written notice to the
Agent, which are the only jurisdictions in which qualification is necessary in
order for it to own
86
or lease its property and conduct its business except for those jurisdictions in
which the failure to so qualify or be in good standing could not reasonably be
expected to have a Material Adverse Effect and (c) has all requisite power and
authority to conduct its business and to own its property.
8.4 Corporate Name; Prior Transactions. Except as otherwise
expressly permitted hereunder for any of the following occurring after the
Original Closing Date (and for which written notice thereof has been given to
the Agent), neither the Borrower nor Parent has, during the past five (5) years,
been known by or used any other corporate or fictitious name, or been a party to
any merger or consolidation, or acquired all or substantially all of the assets
of any Person, or acquired any of its property outside of the ordinary course of
business.
8.5 Subsidiaries and Affiliates. Schedule 8.5 is a correct and
complete list as of the Closing Date of the name and relationship to Parent of
each and all of Parent's Subsidiaries (other than the Borrower) and other
Affiliates. Each Subsidiary of Parent is (a) duly incorporated or organized and
validly existing in good standing under the laws of its state of incorporation
or organization set forth on Schedule 8.5, and (b) qualified to do business as a
foreign corporation or other entity and in good standing in each jurisdiction in
which the failure to so qualify or be in good standing could reasonably be
expected to have a Material Adverse Effect and (c) has all requisite power and
authority to conduct its business and own its property.
8.6 Financial Statements and Projections. The Borrower has
delivered to the Agent and the Lenders the audited balance sheet and related
statements of income, retained earnings, cash flows, and changes in stockholders
equity for the Borrower and its consolidated Subsidiaries as of September 30,
2001, and for the Fiscal Year then ended, accompanied by the report thereon of
the Borrower's independent certified public accountants, Deloitte & Touche LLP.
The Borrower has also delivered to the Agent and the Lenders the unaudited
balance sheet and related statements of income and cash flows for the Borrower
and its consolidated Subsidiaries as of February 24, 2002. Such financial
statements are attached hereto as Exhibit C. All such financial statements have
been prepared in accordance with GAAP (other than, with respect to the interim
financial statements, the absence of footnotes and being subject to normal
year-end adjustments) and present fairly in all material respects the financial
position of the Borrower and its consolidated Subsidiaries as at the dates
thereof and their results of operations for the periods then ended.
(a) The Latest Projections when submitted to the Lenders as
required herein represent the Borrower's reasonable best estimate of the future
financial performance of the Borrower and its consolidated Subsidiaries for the
periods set forth therein. The Latest Projections have been prepared on the
basis of the assumptions set forth therein, which the Borrower believes are fair
and reasonable in light of current and reasonably foreseeable business
conditions at the time submitted to the Lender.
(b) The pro forma balance sheet of the Borrower as at the
first fiscal month end following the Closing Date required to be delivered to
the Agent pursuant to Section 7.2(l) presents fairly and accurately in all
material respects the Borrower's financial condition as at that date after
giving effect to the transactions contemplated herein to occur on the Closing
Date, and
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has been prepared in accordance with GAAP (subject to the absence of footnotes
and normal year-end adjustments). The foregoing representation and warranty in
this clause (c) shall not be made by the Borrower and Parent until such balance
sheet is delivered to the Agent.
8.7 Capitalization. The Borrower's authorized capital stock
consists of 1,000 shares of common stock, par value $.05 per share, all of which
shares are validly issued and outstanding, fully paid and non-assessable and are
owned beneficially and of record by Parent.
8.8 Solvency. The Borrower is Solvent prior to and after giving
effect to the making of the Term Loans and the Revolving Loans to be made on the
Closing Date, the issuance of the Letters of Credit to be issued on the Closing
Date and the consummation on the Closing Date of the transactions contemplated
by the Transaction Documents, and shall remain Solvent during the term of this
Agreement (including, without limitation, after the issuance, if any, of the
Senior Replacement Notes).
8.9 Debt. After giving effect to the making of the Term Loans
and the Revolving Loans to be made on the Closing Date and the consummation on
the Closing Date of the transactions contemplated by the Transaction Documents,
the Borrower and its Subsidiaries have no Debt, except as permitted by Section
9.13.
8.10 Distributions. Since September 30, 1996, no Distribution has
been declared, paid, or made upon or in respect of any capital stock or other
securities of the Borrower or any of its Subsidiaries except as otherwise
permitted hereby.
8.11 Title to Property. Each of the Borrower and Parent has good
and marketable title in fee simple to its real property listed in Schedule 8.12
hereto (except for any such real property which has been sold in accordance with
Section 9.9), and each of the Borrower and Parent has good, indefeasible and
valid title to all of its inventory, accounts and other material property owned
by it (including, without limitation, the assets reflected on the February 24,
2002 Financial Statements of the Borrower and Parent delivered to the Agent and
the Lenders except as disposed of in the ordinary course of business since the
date thereof or pursuant to Section 9.9), free of all Liens except Permitted
Liens.
8.12 Real Estate; Leases. Schedule 8.12 sets forth a correct
and complete list as of the Closing Date of all Real Estate owned by the
Borrower, Parent or any of its other Subsidiaries, all leases and subleases of
real or personal property by the Borrower, Parent or its other Subsidiaries as
lessee or sublessee (other than leases of personal property as to which the
Borrower, Parent or any of its other Subsidiaries is lessee or sublessee for
which the value of such personal property is less than $50,000 individually or
$1,000,000 in the aggregate), and all leases and subleases of real or personal
property by the Borrower, Parent or its other Subsidiaries as lessor or
sublessor. Each of such leases and subleases is valid and enforceable in
accordance with its terms and is in full force and effect, and no default by any
party to any such lease or sublease exists (other than such invalidity,
unenforceability or defaults which could not reasonably be expected to have a
Material Adverse Effect).
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8.13 Proprietary Rights. Schedule 8.13 sets forth a correct and
complete list as of the Closing Date of all of the Borrower's and Parent's
patents, registered trademarks, registered service marks and registered
copyrights and applications for any of the foregoing. None of the Proprietary
Rights is subject to any licensing agreement or similar arrangement except as
set forth on Schedule 8.13. To the best of the Borrower's and Parent's
knowledge, none of the Proprietary Rights infringes on or conflicts with any
other Person's property in any material respect, and no other Person's property
infringes on or conflicts with the Proprietary Rights. To the best of the
Borrower's and Parent's knowledge, the Proprietary Rights described on Schedule
8.13 constitute as of the Closing Date all of the property of such type
necessary to the current and anticipated future conduct of the Borrower's and
Parent's business.
8.14 Trade Names. All trade names or styles under which Parent or
any of its Subsidiaries will sell Inventory or create Accounts, or to which
instruments in payment of Accounts may be made payable, are listed on Schedule
8.14 as updated in writing from time to time by the Borrower to the Agent.
8.15 Litigation. Except as set forth on Schedule 8.15, there is
no pending or (to the best of the Borrower's and Parent's knowledge) threatened,
action, suit, proceeding, or counterclaim by any Person, or investigation by any
Governmental Authority, or any basis for any of the foregoing, which could
reasonably be expected to cause a Material Adverse Effect.
8.16 Restrictive Agreements. Neither Parent nor any of its
Subsidiaries is a party to any contract or agreement, or subject to any charter
or other corporate restriction, which affects its ability to execute, deliver,
and perform the Transaction Documents and repay the Obligations or which,
insofar as the Borrower and Parent can reasonably foresee, could reasonably be
expected to have a Material Adverse Effect.
8.17 Labor Disputes. Except as set forth on Schedule 8.17, as of
the Closing Date (a) there is no collective bargaining agreement or other labor
contract covering employees of Parent or any of its Subsidiaries, (b) no such
collective bargaining agreement or other labor contract is scheduled to expire
during the term of this Agreement, (c) to the best knowledge of the Borrower and
Parent, no union or other labor organization is seeking to organize, or to be
recognized as, a collective bargaining unit of employees of Parent or any of its
Subsidiaries or for any similar purpose, and (d) there is no pending or (to the
best of the Borrower's and Parent's knowledge) threatened, strike, work
stoppage, material unfair labor practice claim, or other material labor dispute
against or affecting Parent or its Subsidiaries or their employees.
8.18 Environmental Laws. Except as otherwise disclosed on
Schedule 8.18:
(a) Parent and its Subsidiaries have complied with all
Environmental Laws applicable to its Premises and business except for such
non-compliance which could not reasonably be expected to have a Material Adverse
Effect, and neither Parent nor any Subsidiary nor any of its present Premises or
operations, nor its past property or operations, is subject to any enforcement
order from or liability agreement with any Governmental Authority or private
Person respecting (i) compliance with any Environmental Law or (ii) any
potential liabilities and costs or remedial action arising from the Release or
threatened Release of a Contaminant where
89
such enforcement order or liability agreement could reasonably be expected to
have a Material Adverse Effect.
(b) Parent and its Subsidiaries have obtained all permits
necessary for their current operations under Environmental Laws, and all such
permits are in good standing and Parent and its Subsidiaries are in compliance
with all terms and conditions of such permits, except where the failure to
obtain or comply with such permits could not reasonably be expected to have a
Material Adverse Effect.
(c) Neither Parent nor any of its Subsidiaries, nor, to the
best of the Borrower's and Parent's knowledge, any of its predecessors in
interest, has stored, treated or disposed of any hazardous waste on any
Premises, as defined pursuant to 40 CFR Part 261 or any equivalent Environmental
Law in a manner that could reasonably be expected to have a Material Adverse
Effect.
(d) Neither Parent nor any of its Subsidiaries has received
any summons, complaint, order or similar written notice that it is not currently
in compliance with, or that any Governmental Authority is investigating its
compliance with, any Environmental Laws or that it is or may be liable to any
other Person as a result of a Release or threatened Release of a Contaminant
where such non-compliance or liability could reasonably be expected to have a
Material Adverse Effect.
(e) None of the present or past operations of Parent and its
Subsidiaries is the subject of any investigation by any Governmental Authority
evaluating whether any remedial action is needed to respond to a Release or
threatened Release of a Contaminant where such remedial action, if so needed,
could reasonably be expected to have a Material Adverse Effect.
(f) Neither Parent nor any of its Subsidiaries has filed any
notice under any requirement of Environmental Law reporting a spill or
accidental and unpermitted release or discharge of a Contaminant into the
environment where such spill, release or discharge could reasonably be expected
to have a Material Adverse Effect.
(g) Neither Parent nor any of its Subsidiaries has entered
into any negotiations or settlement agreements with any Person (including,
without limitation, the prior owner of its property) imposing obligations or
liabilities on Parent or any of its Subsidiaries with respect to any remedial
action in response to the Release of a Contaminant or environmentally related
claim where such obligations or liabilities could reasonably be expected to have
a Material Adverse Effect.
(h) None of the products manufactured, distributed or sold
by Parent or any of its Subsidiaries contain asbestos.
(i) No Environmental Lien has attached to any Premises of
Parent or any of its Subsidiaries.
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8.19 No Violation of Law. Neither Parent nor any of its Subsidiaries
is in violation of any law, statute, regulation, ordinance, judgment, order, or
decree applicable to it which violation could reasonably be expected to have a
Material Adverse Effect.
8.20 No Default. Neither Parent nor any of its Subsidiaries is in
default with respect to any note, indenture, loan agreement, mortgage, lease,
deed, or other agreement to which Parent or such Subsidiary is a party or by
which it is bound, which default could reasonably be expected to have a Material
Adverse Effect.
8.21 ERISA Compliance. Except as specifically disclosed in
Schedule 8.21 and subject to the last sentence of this Section 8.21:
(a) Each Plan is in compliance with the applicable provisions
of ERISA, the Code and other federal or state law. Each Plan which is intended
to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS and to the best knowledge of the Borrower and
Parent, nothing has occurred which would cause the loss of such qualification.
The Borrower, Parent and each ERISA Affiliate has made all required
contributions to any Plan subject to Section 412 of the Code, and no application
for a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of Borrower
and Parent, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan.
(c) No ERISA Events have occurred or are reasonably expected
to occur; (ii) no Pension Plans have any Unfunded Pension Liability; (iii) none
of the Borrower, Parent nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007 of
ERISA); (iv) none of the Borrower, Parent nor any ERISA Affiliate has incurred,
or reasonably expects to incur, any liability (and no event has occurred which,
with the giving of notice under Section 4219 of ERISA, would result in such
liability) under Section 4201 or 4243 of ERISA with respect to a Multi-employer
Plan; and (v) none of the Borrower, Parent nor any ERISA Affiliate has engaged
in a transaction that could be subject to Section 4069 or 4212(c) of ERISA.
Breaches of one or more of the representations and warranties made
under this Section 8.21 shall not constitute a Default or Event of Default under
this Section 8.21 unless the aggregate liability incurred or reasonably expected
to be incurred by the Borrower, Parent or any ERISA Affiliate under this Section
8.21 for all such breaches shall exceed $5,000,000 in the aggregate for all such
Persons.
8.22 Taxes. Parent and its Subsidiaries have filed all Federal,
provincial and other material tax returns and reports required to be filed, and
have paid all Federal, provincial and other taxes, assessments, fees and other
governmental charges levied or imposed upon them or
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their properties, income or assets otherwise due and payable (except for
non-payment of any such taxes, assessments, fees and other governmental charges
permitted by Section 9.1).
8.23 Regulated Entities. None of Parent, any Person controlling
Parent, or any Subsidiary, is an "Investment Company" within the meaning of the
Investment Company Act of 1940. Neither the Borrower nor Parent is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or any
other Federal or state statute or regulation limiting its ability to incur
indebtedness.
8.24 Use of Proceeds; Margin Regulations. The proceeds of the
Revolving Loans are to be used solely for working capital purposes and general
corporate purposes of the Borrower not prohibited hereby. The proceeds of the
Term Loans made on June 15, 2000 were used, together with certain proceeds from
the sale by the Borrower on June 15, 2000 of Equipment pursuant to the Secured
Sale/Leaseback Documents, to redeem all of the Senior Secured Notes. The
proceeds of the Term Loans to be made on the Closing Date are to be used,
together with proceeds of Revolving Loans, to repay in full on the Closing Date
the Existing ▇▇▇▇▇ Credit Facility. The proceeds of the Senior Replacement Notes
(when and if issued) are to be used by the Borrower for the following purposes
and in the following order to the extent of such proceeds: to redeem or
otherwise acquire the Senior Subordinated Notes, to repay the Term Loans and to
pay fees and expenses incurred by the Borrower in connection with the issuance
of the Senior Replacement Notes and related transactions with any excess
proceeds after the foregoing applications to be used for the working capital
purposes and general corporate purposes of the Borrower not prohibited hereby
(including, without limitation, to tender for the ▇▇▇▇▇ Senior Subordinated
Notes); provided that in any event the Borrower shall have issued Senior
Replacement Notes in an amount such that the net cash proceeds thereof are
sufficient for the Borrower to redeem or otherwise acquire in full all of the
Senior Subordinated Notes, to repay in full the Term Loans and to pay all fees
and expenses incurred by the Borrower in connection with the issuance of the
Senior Replacement Notes and related transactions. Neither Parent nor any
Subsidiary is engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.
8.25 Copyrights, Patents, Trademarks and Licenses, etc. Each of
Parent and its Subsidiaries owns or is licensed or otherwise has the right to
use all of the patents, trademarks, service marks, trade names, copyrights,
contractual franchises, authorizations and other rights that are reasonably
necessary for the operation of its businesses, without conflict with the rights
of any other Person except such conflicts which could not reasonably be expected
to have a Material Adverse Effect. To the best knowledge of the Borrower and
Parent, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by Parent or any Subsidiary infringes upon any rights held by any
other Person, except such infringement which could not reasonably be expected to
have a Material Adverse Effect. No claim or litigation regarding any of the
foregoing is pending or to the knowledge of the Borrower and Parent threatened,
and no patent, invention, device, application, principle or any statute, law,
rule, regulation, standard or code is pending or, to the knowledge of the
Borrower and Parent, proposed, which, in either case, could reasonably be
expected to have a Material Adverse Effect.
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8.26 No Material Adverse Change. No Material Adverse Effect has
occurred since the date of the Financial Statements referred to in Section 8.6.
8.27 Full Disclosure. None of the representations or warranties
made by Parent or any Subsidiary in any of the Transaction Documents as of the
date such representations and warranties are made or deemed made, and none of
the statements contained in any exhibit, report, statement or certificate
furnished by or on behalf of Parent, any Subsidiary or ▇▇▇▇▇ in connection with
any of the Transaction Documents, contains any untrue statement of a material
fact or omits any material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they
are made, not misleading as of the time when made or delivered.
8.28 Material Agreements. Schedule 8.28 sets forth all material
agreements and contracts to which Parent or any of its Subsidiaries is a party
or is bound as of the Closing Date.
8.29 Bank Accounts. Schedule 8.29 contains a complete and accurate
list of all bank accounts maintained by the Borrower with any bank or other
financial institution; provided that such schedule may by written notice to the
Agent be updated from time to time by the Borrower to add or delete bank
accounts so long as (i) any bank or other financial institution to be added to
such schedule and not theretofore on such schedule shall be reasonably
satisfactory to the Agent and (ii) if any bank account is to be added to such
schedule, the Borrower shall have notified the Agent thereof prior to opening
such bank account and shall have caused the bank or other financial institution
at which such bank account is maintained to execute such agreements, in form and
substance reasonably satisfactory to the Agent, as the Agent may request with
respect to such bank account.
8.30 ▇▇▇▇▇ Term Loan Equipment Collateral. All of the ▇▇▇▇▇ Term
Loan Equipment Collateral is and at all times will be Excluded Sale/Leaseback
Assets.
ARTICLE 9
AFFIRMATIVE AND NEGATIVE COVENANTS
Each of the Borrower and Parent covenants to the Agent and
each Lender that, until the Payment and Termination Date:
9.1 Taxes and Other Obligations. Parent shall, and shall cause
each of its Subsidiaries to, (a) file when due all federal, provincial and other
material tax returns and other reports which it is required to file; (b) pay, or
provide for the payment, when due, of all taxes, fees, assessments and other
governmental charges against it or upon its property, income and franchises,
make all required withholding and other tax deposits, and establish adequate
reserves for the payment of all such items, and provide to the Agent and the
Lenders, upon request, reasonably satisfactory evidence of its timely compliance
with the foregoing; and (c) pay when due all Debt owed by it and all claims of
materialmen, mechanics, carriers, warehousemen, landlords and other like Persons
(except, with respect to such claims, to the extent the aggregate amount of all
such claims not paid when due does not exceed $1,000,000) and all other
indebtedness owed by it
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(except, with respect to such Debt, claims and other indebtedness and subject to
the immediately preceding parenthetical with respect to claims, to the extent
the aggregate amount of all such Debt, claims and other indebtedness not paid
when due does not exceed $5,000,000 (with the Agent having the right in its
reasonable commercial discretion to establish reserves against Availability for
any amount of such Debt, claims and other indebtedness not paid when due in
excess of $100,000 in the aggregate)) and perform and discharge in a timely
manner all other obligations undertaken by it; provided, however, so long as
Borrower or Parent has notified the Agent in writing, neither Parent nor any of
its Subsidiaries need pay any tax, fee, assessment, or governmental charge, that
(i) it is contesting in good faith by appropriate proceedings diligently
pursued, (ii) Parent or its Subsidiary, as the case may be, has established
proper reserves for as provided in GAAP, and (iii) no Lien (other than a
Permitted Lien) results from such non-payment.
9.2 Corporate Existence and Good Standing. Parent shall, and
shall cause each of its Subsidiaries to, maintain its corporate existence and
its qualification and good standing in all jurisdictions in which the failure to
maintain such existence and qualification or good standing could reasonably be
expected to have a Material Adverse Effect.
9.3 Compliance with Law and Agreements; Maintenance of Licenses.
Parent shall comply, and shall cause each Subsidiary to comply, with all
Requirements of Law of any Governmental Authority having jurisdiction over it or
its business (including the Federal Fair Labor Standards Act) except where the
liability for non-compliance could not reasonably be expected to exceed
$2,000,000 in the aggregate for all such non-compliances (except that where
another provision in Article 6 or this Article 9 contains a different level of
materiality or liability with respect to non-compliance with a specific type of
laws (including, without limitation, Sections 9.7(a) and 9.8), the level of
materiality or liability under the other provision shall control with respect to
the type of laws within the scope of such provision). Parent shall, and shall
cause each of its Subsidiaries to, obtain and maintain all licenses, permits,
franchises, and governmental authorizations necessary to own its property and to
conduct its business as conducted on the Closing Date, except for such licenses,
permits, franchises and governmental authorizations the failure to obtain and
maintain which could not reasonably be expected to have a Material Adverse
Effect. The Borrower shall not modify, amend or alter its certificate or article
of incorporation other than in a manner which does not adversely affect the
rights of the Lenders or the Agent.
9.4 Maintenance of Property. Parent shall, and shall cause each
of its Subsidiaries to, maintain all of its property necessary and useful in the
conduct of its business, in good operating condition and repair, ordinary wear
and tear excepted.
9.5 Insurance. Parent shall maintain, and shall cause each of its
Subsidiaries to maintain, with financially sound and reputable insurers having a
rating of at least A-VII or better by Best Rating Guide, insurance against loss
or damage by fire with extended coverage; theft, burglary, pilferage and loss in
transit; public liability and third party property damage; larceny, embezzlement
or other criminal liability; business interruption; public liability and third
party property damage; and such other hazards or of such other types as is
customary for Persons engaged in the same or similar business, as the Agent, in
its discretion, or acting at the direction
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of the Majority Lenders, shall specify, in amounts, and under policies
reasonably acceptable to the Agent and the Majority Lenders. Without limiting
the foregoing, Parent shall also maintain, and shall cause each of its
Subsidiaries to maintain, flood insurance, in the event of a designation of the
area in which any real property covered by the Mortgages and any of the
Equipment and Inventory located on such real property is located as "flood
prone" or a "flood risk area," (hereinafter, "SFHA") as defined by the Flood
Disaster Protection Act of 1973, in an amount to be reasonably determined by the
Agent, and shall comply with the additional requirements of the National Flood
Insurance Program as set forth in said Act. Upon the Majority Lenders' request,
the Borrower shall maintain flood insurance for its Inventory and Equipment
which is, at any time, located in a SFHA. The Agent acknowledges that the
insurance coverage of Parent and its Subsidiaries as in effect on the Original
Closing Date is acceptable to the Agent; provided, however, that if the rating
of any insurer worsens or circumstances with respect to Parent or any of its
Subsidiaries or any of their respective properties, operations, business,
liabilities or financial condition shall change in any material respect, such
insurance may no longer be acceptable to the Agent.
(a) The Borrower and Parent shall cause the Agent, for the
ratable benefit of the Agent and the Lenders, to be named in each such policy as
secured party or mortgagee and loss payee or additional insured, in a manner
reasonably acceptable to the Agent. Each policy of insurance shall contain a
clause or endorsement requiring the insurer to give not less than thirty (30)
days' prior written notice to the Agent in the event of cancellation of the
policy for any reason whatsoever and a clause or endorsement stating that the
interest of the Agent shall not be impaired or invalidated by any act or neglect
of Parent or any of its Subsidiaries or the use of any premises for purposes
more hazardous than are permitted by such policy. All premiums for such
insurance shall be paid by the Borrower or Parent when due, and certificates of
insurance and, if requested by the Agent or any Lender, photocopies of the
policies, shall be delivered to the Agent, in each case in sufficient quantity
for distribution by the Agent to each of the Lenders. If the Borrower or Parent
fails to procure such insurance or to pay the premiums therefor when due, the
Agent may, and at the direction of the Majority Lenders shall, do so from the
proceeds of Revolving Loans.
(b) The Borrower or Parent shall promptly notify the Agent and
the Lenders of any loss, damage, or destruction to Collateral in excess of
$500,000 arising from its or any other Person's use, whether or not covered by
insurance. The Agent is hereby authorized to collect all insurance proceeds
directly, and to apply or remit them as follows:
(i) With respect to insurance proceeds relating
to Credit Agreement Collateral, after deducting from such proceeds the
reasonable expenses, if any, incurred by the Agent in the collection or handling
thereof, the Agent shall apply such proceeds, ratably, to the reduction of the
Obligations in the order provided for in Section 4.8; provided that, with
respect to insurance proceeds relating to Credit Agreement Collateral that
constitutes Equipment or other fixed assets, the Agent shall apply such
proceeds, ratably, first to the payment in full of principal on the Term Loans
(to be applied to installments thereof in the inverse order of maturity) and
then to the reduction of the other Obligations in the order provided for in
Section 4.8.
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(ii) With respect to insurance proceeds relating
to Collateral other than Credit Agreement Collateral, except as provided in the
Intercreditor Agreement, after deducting from such proceeds the reasonable
expenses, if any, incurred by the Agent in the collection or handling thereof,
the Agent shall apply such proceeds, ratably, first to the payment in full of
principal on the Term Loans (to be applied to installments thereof in the
inverse order of maturity) and then to the reduction of the other Obligations in
the order provided for in Section 4.8.
9.6 Condemnation. The Borrower or Parent shall, immediately upon
learning of the institution of any proceeding for the condemnation or other
taking of any of its or any of its Subsidiaries' property having a value in
excess of $500,000, notify the Agent of the pendency of such proceeding, and
agrees that the Agent may participate in any such proceeding, and the Borrower
and Parent will deliver to the Agent all instruments reasonably requested by the
Agent to permit such participation.
(a) Except as provided in the Intercreditor Agreement, the
Agent is hereby authorized to collect the proceeds of any condemnation claim or
award directly, and to apply or remit them as follows:
(i) With respect to condemnation proceeds
relating to property other than Credit Agreement Collateral, after deducting
from such proceeds the reasonable expenses, if any, incurred by the Agent in the
collection or handling thereof, the Agent shall apply such proceeds, ratably,
first to the payment in full of principal on the Term Loans (to be applied to
installments thereof in the inverse order of maturity) and then to the reduction
of the other Obligations in the order provided for in Section 4.8.
(ii) With respect to condemnation proceeds
relating to Credit Agreement Collateral, after deducting from such proceeds the
reasonable expenses, if any, incurred by the Agent in the collection or handling
thereof, the Agent shall apply such proceeds, ratably, to the reduction of the
Obligations in the order provided for in Section 4.8; provided that, with
respect to condemnation proceeds relating to Credit Agreement Collateral that
constitutes Equipment or other fixed assets, the Agent shall apply such
proceeds, ratably, first to the payment in full of principal on the Term Loans
(to be applied to installments thereof in the inverse order of maturity) and
then to the reduction of the other Obligations in the order provided for in
Section 4.8.
9.7 Environmental Laws. Parent shall, and shall cause each of its
Subsidiaries to, conduct its business in compliance with all Environmental Laws
applicable to it, including, without limitation, those relating to the
generation, handling, use, storage, and disposal of any Contaminant, except for
such non-compliance that could not reasonably be expected to have or result in a
Material Adverse Effect. Parent shall, and shall cause each of its Subsidiaries
to, take prompt and appropriate action to respond to any non-compliance with
Environmental Laws.
(a) Without limiting the generality of the foregoing, the
Borrower or Parent shall submit to the Agent and the Lenders annually,
commencing on the first anniversary of the Original Closing Date, and on each
succeeding anniversary date thereof, an update of the status
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of each material environmental compliance or liability issue. The Agent or any
Lender may request copies of technical reports prepared by Parent or any of its
Subsidiaries and its communications with any Governmental Authority to determine
whether Parent or any of its Subsidiaries is proceeding reasonably to correct,
cure or contest in good faith any alleged non-compliance or environmental
liability. The Borrower shall, at the Agent's or the Majority Lenders'
reasonable request and at the Borrower's expense, (i) retain an independent
environmental consultant reasonably acceptable to the Agent to evaluate the
environmental non-compliance or liability issue, including tests if appropriate,
and prepare and deliver to the Agent, in sufficient quantity for distribution by
the Agent to the Lenders, a report setting forth the results of such evaluation,
a proposed plan for responding to any environmental problems described therein,
and an estimate of the costs thereof, and (ii) provide to the Agent and the
Lenders a supplemental report of such consultant whenever the scope of the
environmental problems, or the response thereto or the estimated costs thereof,
shall change in any material respect.
9.8 Compliance with ERISA. Except as specifically disclosed in
Section 8.21 with respect to the litigation therein described and subject to the
last sentence of this Section 9.8, Parent shall, and shall cause each of its
ERISA Affiliates to: (a) maintain each Plan in compliance with the applicable
provisions of ERISA, the Code and other federal or state law; (b) cause each
Plan which is qualified under Section 401(a) of the Code to maintain such
qualification; (c) make all required contributions to any Plan subject to
Section 412 of the Code; (d) not engage in a non-exempt prohibited transaction
or violation of the fiduciary responsibility rules with respect to any Plan; and
(e) not engage in a transaction that could be subject to Section 4069 or 4212(c)
of ERISA. Breaches of one or more of the covenants contained in this Section 9.8
shall not constitute a Default or Event of Default under this Section 9.8 unless
the aggregate liability incurred or reasonably expected to be incurred by Parent
and its ERISA Affiliates for all such breaches shall exceed $5,000,000 in the
aggregate for all such Persons.
9.9 Mergers,Consolidations or Sales. Neither Parent nor any of its
Subsidiaries shall enter into any transaction of merger, reorganization, or
consolidation, or transfer, sell, assign, lease, or otherwise dispose of all or
any part of its property, or wind up, liquidate or dissolve, or agree to do any
of the foregoing, except:
(i) for sales of Inventory in the ordinary
course of its business;
(ii) for sales or other dispositions of Equipment
and Proprietary Rights in the ordinary course of business that are
obsolete or no longer usable by the Borrower or Parent in its
business as permitted by Section 6.11; provided that the aggregate
book value of all assets sold or otherwise disposed of by Parent and
its Subsidiaries pursuant to this clause (ii) and clause (v) below
during the term of this Agreement (from the Closing Date) shall not
exceed $75,000,000;
(iii) for the sale of the Borrower's Manchester,
New Hampshire facility;
(iv) for the sale of the Borrower's ▇▇▇▇▇▇▇▇▇▇▇,
Massachusetts facility;
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(v) that, in addition to any of the other clauses of
this Section 9.9, so long as (a) no Default or Event of Default exists
and (b) the Term Loans have been paid in full, or, if not paid in full,
the Term Loans shall concurrently be paid in full out of the net cash
proceeds thereof, the Borrower and its Subsidiaries may sell other
assets at fair market value (determined in good faith by the Board of
Directors of the Borrower); provided that (1) with respect to any sale
of Credit Agreement Term Loan Equipment Collateral, ▇▇▇▇▇ Term Loan
Equipment Collateral or the real property of the Borrower referred to
in the definition of Term Loan Reserve, the net cash proceeds thereof
received by the Borrower upon the consummation of such sale shall be in
an amount not less than the OLV Percentage (as defined below) of the
orderly liquidation value used in determining the Term Loan Reserve
(without giving effect to clause (2)(y) of the second sentence thereof)
of the Equipment or real property subject to such sale (OLV Percentage
meaning the percentage of orderly liquidation value set forth in the
definition of Term Loan Reserve for the relevant item of Equipment or
real property), (2) the aggregate net cash proceeds received by the
Borrower upon the consummation of such sale with respect to Accounts
and Inventory, if any, included as part of such sale shall be in an
aggregate amount not less than 90% of the then book value of all such
Accounts (other than Accounts which were Eligible Accounts immediately
prior to such sale) and Inventory and 100% of the then book value of
all such Accounts which were Eligible Accounts immediately prior to
such sale (in each instance, as such book value is shown on a balance
sheet of the Borrower prepared in accordance with GAAP), (3) the gross
proceeds of such sale shall consist of at least 75% in cash or Cash
Equivalents, (4) the aggregate book value of all assets sold or
otherwise disposed of by Parent and its Subsidiaries pursuant to this
clause (v) and clause (ii) above during the term of this Agreement
(from the Closing Date) shall not exceed $75,000,000, (5) the Borrower
shall have complied (or caused compliance) with the last sentence of
Section 4.1 (if such sale includes Accounts or Inventory) and with
Section 4.5(b) as to such sale and (6) the Borrower shall have
delivered to the Agent, not less than 10 days prior to such sale,
notice thereof and shall have promptly provided the Agent with such
information as to such sale as the Agent may reasonably request;
(vi) that investments or other transfers or
sales may be made to the extent expressly permitted by Section 9.10;
(vii) the Borrower and its Subsidiaries may sell
or discount, in each case without recourse and only to non-Affiliated
Persons, in the ordinary course of business ineligible accounts
receivable arising in the ordinary course of business, but only in
connection with the compromise or collection thereof consistent with
customary industry practice (and not as part of any bulk sale or
financing receivables); provided, that (A) the account debtor thereon
is no longer a customer of the Borrower or any of its Subsidiaries and
no other accounts receivable which are Eligible Accounts are owing by
such account debtor to the Borrower or any of its Subsidiaries and (B)
the gross proceeds from any sale shall be immediately deposited in a
lockbox account pursuant to Section 6.9;
(viii) for licenses of Proprietary Rights (x)in the
ordinary course of business or (y) to Lily Cup consistent with past
practices;
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(ix) for the Sherwood-Related Mergers pursuant to
the Sherwood-Related Merger Documents; provided that (A)the Agent shall
have received such UCC financing statements, intellectual property
assignments and other collateral documentation duly executed by the
Borrower as the Agent shall have requested with respect to the
perfection of Liens in certain assets of Sherwood and its Subsidiaries;
(B) the Agent shall have received such UCC and other collateral
releases in form and substance satisfactory to the Agent with respect
to all Liens on the assets of Sherwood and its Subsidiaries (other than
Permitted Liens); (C) the Agent shall have received evidence in form
and substance satisfactory to the Agent of all necessary corporate
proceedings of the Borrower, Sherwood and its Subsidiaries to duly
authorize the execution, delivery and performance of the
Sherwood-Related Merger Documents and of all necessary consents to
permit the execution, delivery and performance thereof; (D) the Agent
shall have received landlord waivers in form and substance satisfactory
to the Agent with respect to the premises leased by Sherwood or any of
its Subsidiaries; (E) the Agent shall have received a blocked account
agreement, in form and substance satisfactory to the Agent, duly
executed by PNC; (F) the Agent shall have received a Borrowing Base
Certificate duly executed by the Borrower after giving effect to the
Sherwood-Related Mergers; and (G) the Agent shall have received such
other documents as the Agent or any Lender may reasonably request in
connection with the Sherwood-Related Mergers or the transactions
related thereto;
(x) for the sale by the Borrower on June 15, 2000 of
Equipment (other than Credit Agreement Term Loan Equipment Collateral)
pursuant to the Secured Sale/Leaseback Documents, which documents shall
be in form and substance reasonably satisfactory to the Agent and the
Majority Lenders; provided that (A) the Agent shall have received the
Intercreditor Agreement duly executed by State Street Bank and Trust
Company of Connecticut, National Association, as owner trustee/lessor,
the Borrower and Parent, and (B) the Borrower shall have received on
the date of such sale net cash proceeds from such sale of no less than
$212,300,000 and such net cash proceeds shall have been applied by the
Borrower (w) together with the proceeds of the Term Loans to be made on
June 15, 2000, to the redemption of all Senior Secured Notes (other
than accrued interest thereon, which interest shall be paid with the
proceeds of Revolving Loans), (x) to the payment in full of all loans
and other monetary obligations of Sherwood and/or any of its affiliates
under the financing arrangements between one or more of such entities,
certain lenders and PNC, as agent for such lenders, (y) to the payment
in full of the Demand Loans, and (z) to the payment of the Revolving
Loans (in an amount not less than $25,000,000);
(xi) for the ▇▇▇▇▇/Cup Merger pursuant to the
▇▇▇▇▇/Cup Merger Documents (which documents shall be satisfactory to
the Agent); provided that (A) the Agent shall have received such UCC
financing statements, intellectual property assignments and other
collateral documentation duly executed by the Borrower as the Agent
shall have requested with respect to the perfection of Liens in certain
assets of ▇▇▇▇▇ and its Subsidiaries; (B) the Agent shall have received
such UCC and other collateral releases in form and substance
satisfactory to the Agent with respect to all Liens on the assets of
▇▇▇▇▇ and its Subsidiaries (other than Permitted Liens); (C) the Agent
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shall have received evidence in form and substance satisfactory to the
Agent of all necessary corporate proceedings of the Borrower, ▇▇▇▇▇ and
its Subsidiaries to duly authorize the execution, delivery and
performance of the ▇▇▇▇▇/Cup Merger Documents and of all necessary
consents to permit the execution, delivery and performance thereof; (D)
the Agent shall be satisfied that the consummation of the ▇▇▇▇▇/Cup
Merger shall not result in a breach or violation of any of the
indentures governing the Senior Subordinated Notes, the ▇▇▇▇▇ Senior
Subordinated Notes or the SF Holdings Senior Notes or any other
material agreement to which any of the Borrower, Parent, ▇▇▇▇▇ or any
of their respective Subsidiaries is a party or by which any of the
foregoing is bound; (E) if requested by the Agent prior to the
consummation of the ▇▇▇▇▇/Cup Merger, the Agent shall have received
blocked account agreements, in form and substance satisfactory to the
Agent, with respect to all bank accounts maintained by ▇▇▇▇▇
immediately prior to the consummation of the ▇▇▇▇▇/Cup Merger, duly
executed by the Borrower and the banks at which such accounts are
maintained; (F) the Agent shall have received a Borrowing Base
Certificate duly executed by the Borrower after giving effect to the
▇▇▇▇▇/Cup Merger; and (G) the Agent shall have received such other
documents as the Agent or any Lender may reasonably request in
connection with the ▇▇▇▇▇/Cup Merger or the transactions related
thereto; and
(xii) that, with the prior written consent of the
Majority Lenders, any other assets may be sold or transferred.
Except in the case of the transfer of assets between or among Parent
and any of its Subsidiaries (the foregoing not constituting a consent to any
such transfer except as expressly permitted hereunder and in which case if so
permitted there shall be no release of Collateral, and all steps deemed
necessary or, in the reasonable opinion of the Agent or the Majority Lenders,
desirable to maintain the priority and perfection of the security interests of
the Agent in the Collateral shall be taken in connection therewith), to the
extent any Collateral is sold as expressly permitted by this Section 9.9, such
Collateral shall be sold free and clear of the Liens created by any of the Loan
Documents (so long as such Collateral is also sold free and clear of the Liens
created by the documents granting collateral security for the payment of the
obligations of the Borrower or Parent under the Secured Sale/Leaseback
Documents, and, subject to the terms of the Intercreditor Agreement, the net
cash proceeds from such sale are deposited in the lock-box accounts referred to
in Section 6.9(a) or in a Payment Account or, if applicable, applied to the
Obligations in accordance with Section 4.5(b); nothing contained in this
paragraph constituting a release of any of the Liens created by any of the Loan
Documents in the proceeds of such sale), and in such event all Exhibits and
Schedules hereto or to any of the other Loan Documents evidencing a present or
prospective interest of Parent or its Subsidiaries in such Collateral shall be
deemed amended automatically (without any consent or notice) to reflect such
sale. In case of any release as described in the immediately preceding sentence
(including any release with respect to the sale of Equipment permitted by clause
(x) above), the Agent is hereby authorized and directed to take such action as
may be deemed necessary or desirable by it to effect the release.
9.10 Distributions; Capital Change; Restricted Investments. Neither
Parent nor any of its Subsidiaries shall (i) directly or indirectly declare or
make, or incur any liability to make, any
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Distribution, except Distributions to the Borrower by its Subsidiaries, (ii)
make any change in its capital structure which could have a Material Adverse
Effect or (iii) make any Restricted Investment; provided, however, that
notwithstanding clauses (i) and (iii) above:
(A) the Borrower may (a) pay cash dividends and make loans and
advances to Parent, in each instance, for the purpose of paying, and so
long as all proceeds thereof are promptly used by Parent to pay, its
operating expenses incurred in the ordinary course of business and
other corporate overhead costs and expenses of Parent (including,
without limitation, any payments, fees and expenses owing by Parent
pursuant to this Agreement or the transactions contemplated by this
Agreement and which are paid by Parent to the Agent or a Lender, as
appropriate), (b) pay cash dividends and make loans and advances to
Parent, in each instance, for the purpose of paying, and so long as all
proceeds thereof are promptly used by Parent to pay, franchise taxes
and federal, state and local income taxes, in each instance, with
respect to the operations of the Borrower and interest and penalties
with respect thereto, if any, payable by Parent (provided that any
refund shall be promptly returned by Parent to the Borrower and
provided that dividends may be made pursuant to this clause (b) if all
proceeds thereof are immediately used to repay loans made by the
Borrower to Parent pursuant to this clause (b)), (c) so long as no
Default or Event of Default then exists or would exist after giving
effect thereto, upon the death, disability or termination of employment
of any officer or employee of Parent or any of its Subsidiaries, and
pursuant to the terms and conditions set forth in any subscription
agreements with respect thereto, pay cash dividends and make loans and
advances to Parent, in each instance, for the purpose of purchasing or
making payments in respect of, and so long as all proceeds thereof are
promptly used by Parent to purchase or make payments in respect of,
common stock of Parent held by such Persons, their estates or certain
other related Persons, provided that (x) the total cash consideration
paid after the Original Closing Date in respect of all such purchases
shall not exceed $3,000,000 (with cash permitted to be paid pursuant to
this clause (x) only to the extent such cash payment would be permitted
pursuant to the terms of the indentures relating to each of the Senior
Secured Notes (with respect to payments made while such notes were
outstanding), the Senior Subordinated Notes (with respect to payments
made while such notes were outstanding), the ▇▇▇▇▇ Senior Subordinated
Notes (with respect to payments made on or after the ▇▇▇▇▇/Cup Merger
while such notes were outstanding) and, once issued, the Senior
Replacement Notes) and (y) all other consideration paid to such Persons
or their estates for such purchases shall be subordinated to the
payment of all Obligations (including, without limitation, the
obligations of Parent under the Parent Guaranty) and be evidenced by a
subordinated promissory note in the form of Exhibit H (each, a
"Stockholder Subordinated Note") and (d) so long as no Default or Event
of Default then exists or would exist after giving effect thereto, pay
cash dividends and make loans and advances to Parent, in each instance,
for the purpose of Parent reimbursing SF Holdings, and so long as all
proceeds thereof are promptly used by Parent to reimburse SF Holdings,
for out-of-pocket costs and expenses incurred by SF Holdings with
respect to the stock option program provided by SF Holdings to
employees of Parent and its Subsidiaries with respect to capital stock
of SF Holdings (including, without limitation, any out-of-pocket costs
and expenses with respect to the repurchase by SF Holdings from any
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of such employees or its estate of any capital stock of SF Holdings
issued to such employee pursuant to such stock option program),
provided that the aggregate amount of such dividends, loans and
advances by the Borrower to Parent in any Fiscal Year shall not exceed
$1,000,000;
(B) Parent and its Subsidiaries may make loans, advances and
other payments to officers, employees and agents of Parent and its
Subsidiaries in the ordinary course of business, including with respect
to travel and relocation expenses, so long as the aggregate principal
amount thereof at any time outstanding (determined without regard to
any write-downs or write-offs of such loans and advances) shall not
exceed $4,500,000;
(C) the Borrower may make intercompany loans to each of Lily
Cup and the Global Entities, provided that (i) all such intercompany
loans are evidenced by an intercompany promissory note in the form of
Exhibit I payable by such Subsidiary to the Borrower, which is pledged
by the Borrower as Shared Collateral pursuant to the Pledge Agreement
(or if constituting Excluded Sale/Leaseback Assets, pledged by the
Borrower to the Agent to secure the payment of the Obligations pursuant
to a pledge agreement having terms substantially similar to those in
the Pledge Agreement), (ii) the aggregate principal amount of all loans
outstanding pursuant to this clause (C) shall at no time exceed
$7,500,000, (iii) the aggregate principal amount of all loans
outstanding pursuant to this clause (C) to Lily Cup shall at no time
exceed $5,000,000 and the aggregate principal amount of all loans
outstanding pursuant to this clause (C) to the Global Entities shall at
no time exceed $5,000,000, and (iv) prior to making any such loan, the
Borrower shall provide the Agent with evidence reasonably acceptable to
the Agent that, after giving effect to such loan, Availability shall be
no less than $10,000,000, with Availability being determined after
giving effect to all of the Borrower's obligations being current;
(D) the Borrower may hold non-cash proceeds from assets sales
permitted pursuant to Section 9.9, such proceeds to be held subject to
the Agent's Lien therein;
(E) Parent may own the stock of the Borrower, and the Borrower
may own the stock of its Subsidiaries in existence on the Closing Date
as set forth on Schedule 8.5; provided that no additional investments
shall be permitted in Subsidiaries of the Borrower except as provided
in clause (C) above;
(F) the Borrower and its Subsidiaries may establish
Wholly-Owned Subsidiaries with the prior written consent of the Agent
and the Majority Lenders;
(G) to the extent otherwise prohibited by this Section 9.10,
the Borrower and its Subsidiaries may make investments which constitute
Debt permitted pursuant to Section 9.13;
(H) any Subsidiary of the Borrower may make intercompany loans
to the Borrower, provided that the aggregate principal amount of all
loans outstanding pursuant to this clause shall at no time exceed
$5,000,000;
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(I) Parent may make loans to certain of its employees in
aggregate principal amount not to exceed $5,000,000 so long as (a) such
loans are used by such employees solely to purchase common stock of
Parent; (b) such loans are evidenced by full recourse promissory notes
executed by such employees and pledged to the Collateral Agent pursuant
to the Parent Pledge Agreement (or if constituting Excluded
Sale/Leaseback Assets, pledged by Parent to the Agent to secure the
payment of the Obligations pursuant to a pledge agreement having terms
substantially similar to those in the Parent Pledge Agreement); and (c)
no cash is actually remitted to any such employee as proceeds of any
such loan;
(J) the Borrower and Parent may effect transactions related to
assets other than Credit Agreement Collateral in accordance with the
terms of the Asset Transfer Documents as in effect on the Original
Closing Date;
(K) the Borrower may acquire all of the capital stock of
Sherwood pursuant to the Sherwood Stock Purchase Agreement; provided
that (a) the stock acquisition contemplated thereby shall have been
duly consummated in accordance with the Sherwood Stock Purchase
Documents without waiver and in accordance with applicable law; and (b)
after such acquisition (but in any event no later than June 15, 2000),
the Sherwood-Related Mergers shall have been duly consummated in
accordance with the Sherwood-Related Merger Documents (which documents
shall be satisfactory to the Agent) and applicable law and the
requirements with respect to such mergers set forth in the proviso to
Section 9.9(ix) shall have been satisfied;
(L) the Borrower may make payments to Newcup, LLC (which, as
of the Closing Date, owns not less than $55,000,000 of the $95,799,000
of outstanding SF Holdings Senior Notes) to preserve the option of the
Borrower to subscribe for equity interests of Newcup, LLC constituting,
after the exercise of such option, substantially all of the outstanding
equity interests of Newcup, LLC, all pursuant to an option or warrant
agreement, in form and substance satisfactory to the Agent and the
Majority Lenders, to be entered into between Newcup, LLC and the
Borrower as in effect on the date of execution thereof; provided that
any such payment shall be made by the Borrower only after the foregoing
option or warrant agreement has been executed by the parties thereto
and only so long as (i) no Default or Event of Default then exists or
would exist after giving effect to such payment, (ii) after giving
effect to such payment the Borrower shall have Availability of not less
than $20,000,000 and (iii) the aggregate amount of all such payments
made by the Borrower in any Fiscal Year shall not exceed $6,450,000;
and
(M) the Borrower may make open market purchases of SF Holdings
Senior Notes so long as (i) no Default or Event of Default then exists
or would exist after giving effect thereto, (ii) after giving effect to
each such purchase the Borrower shall have Availability of not less
than $20,000,000, (iii) the aggregate purchase price (whether in cash
or otherwise) for all purchases made by the Borrower in any Fiscal Year
shall not exceed $5,000,000 and (iv) the Borrower would be in
compliance with Section 9.26 as of the fiscal quarter of the Borrower
just ended if the Fixed Charge Component for the Test Period ended at
the end of such fiscal quarter included the amount of the purchase
price
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(whether in cash or otherwise) for such purchase as well as the
aggregate amount of the purchase price (whether in cash or otherwise)
for all other such purchases made within one year of the date of such
purchase.
All loans and advances made by the Borrower to Parent
(pursuant to this Section 9.10 or otherwise) shall be evidenced by an
intercompany note payable from Parent to the Borrower and pledged as Shared
Collateral pursuant to the Pledge Agreement (or if constituting Excluded
Sale/Leaseback Assets, pledged by the Borrower to the Agent to secure the
payment of the Obligations pursuant to a pledge agreement having terms
substantially similar to those in the Pledge Agreement).
9.11 Transactions Affecting Collateral or Obligations. Neither
Parent nor any of its Subsidiaries shall enter into any transaction which would
be reasonably expected to have a Material Adverse Effect.
9.12 Guaranties. Neither Parent nor any of its Subsidiaries shall
make, issue, or become liable on any Guaranty, except Guaranties of the
Obligations in favor of the Agent, guaranties of the obligations of the Borrower
under the Secured Sale/Leaseback Documents and unsecured guaranties by
Subsidiaries of the Borrower (other than Lily Cup and the Global Entities) of
the obligations of the Borrower under the Senior Replacement Notes.
9.13 Debt. Neither Parent nor any of its Subsidiaries shall incur
or maintain any Debt, other than:
(a) the Obligations;
(b) Purchase Money Obligations, Capital Leases and any other
Debt, in an aggregate outstanding principal amount not to exceed $25,000,000 at
any time; provided that such other Debt may not be secured by Liens in Credit
Agreement Collateral and any Lien in any assets of Parent or any of its
Subsidiaries securing such other Debt shall be junior and subordinate to the
Lien of the Agent therein;
(c) other Debt existing on the Closing Date and set forth on
Schedule 9.13 and any and all interest and other amounts owing in respect
thereof ("Existing Debt"), but no increases in the principal amount thereof and
no refinancings or renewals thereof except to the extent that such refinancing
or renewal does not increase the principal amount of such Debt outstanding
immediately prior to such refinancing or renewal, or add guarantors, obligors or
security from that which applied to such Debt being refinanced or renewed, and
all other terms of such refinancing or renewal are no more restrictive or less
favorable to the Borrower or its Subsidiary, as applicable, than previously
existing with respect to such Debt;
(d) Lily Cup may (x) incur Debt as described in Section
9.10(C) and (y) incur or suffer to exist Debt not in excess of Cd. $30,000,000
in an aggregate principal amount at any time outstanding under the Lily Credit
Facility and any refinancing or renewal thereof on terms and conditions which
are no more restrictive or less favorable to Lily Cup than previously existing
with respect to such Debt; provided, however, that the Debt permitted pursuant
to
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clause (y) shall not be secured by any assets of Parent, the Borrower or any
Subsidiary of Parent other than Lily Cup but may be guaranteed (on an unsecured
basis) by Parent and/or the Borrower;
(e) unsecured Debt under any Interest Rate Protection or Other
Hedging Agreement or under any similar type of agreement entered into with a
Person not a Lender, in each case to the extent the respective agreement relates
to Debt outstanding as otherwise permitted under this Section 9.13;
(f) unsecured Debt under any Permitted Commodities Agreements;
(g) unsecured Debt owing to non-Affiliated Persons in an
aggregate principal amount not to exceed $5,000,000 at any time outstanding;
(h) Debt subject to Liens permitted under clauses (c) and (d)
of the definition of Permitted Liens (such Debt to be subject to any limitations
(including, without limitation, as to amount) set forth in such clauses);
(i) upon the purchase by Parent of common stock of Parent as
permitted by Section 9.10(A)(c), Debt of Parent represented by the Stockholder
Subordinated Note issued as the consideration therefor;
(j) unsecured Debt under the Senior Subordinated Notes and the
▇▇▇▇▇ Senior Subordinated Notes (and the unsecured refinancing of the ▇▇▇▇▇
Senior Subordinated Notes on terms and conditions and pursuant to documentation
satisfactory to the Agent and the Majority Lenders, but only after the
redemption or payment in full of all of the Senior Subordinated Notes and Term
Loans), Debt under the Senior Replacement Notes (the terms and conditions of
which and the indenture governing same shall be satisfactory to the Agent and
the Majority Lenders and the proceeds of which Senior Replacement Notes shall be
used by the Borrower to redeem or otherwise acquire all of the Senior
Subordinated Notes, to repay all of the Term Loans and for the other purposes
set forth in Section 8.24, in each instance, in the order set forth in such
Section 8.24) and unsecured Debt under the Sherwood-Related Subordinated Notes,
but, in each instance, no increases in the principal amount thereof and no
refinancings (other than as contemplated in the above parentheticals in this
clause (j)) or renewals thereof; and
(k) unsecured Debt to be issued by the Borrower to the
Maryland Department of Business and Economic Development in an aggregate
original principal amount not to exceed $2,000,000, so long as concurrently with
the issuance of such Debt principal on the Term Loans (if then outstanding)
shall be prepaid in an amount equal to the lesser of (x) the amount of such
issuance and (y) the outstanding principal amount of the Term Loans at the time
of such issuance.
9.14 Prepayment. Neither Parent nor any of its Subsidiaries shall
voluntarily prepay, redeem or repurchase prior to its final stated maturity any
Debt (not including refinancings, refundings or replacements thereof expressly
permitted hereunder) (including, without limitation, the Senior Subordinated
Notes, the ▇▇▇▇▇ Senior Subordinated Notes and the Senior
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Replacement Notes), except (i) the Obligations in accordance with the terms of
this Agreement, (ii) other Debt (other than the Senior Subordinated Notes, the
▇▇▇▇▇ Senior Subordinated Notes and the Senior Replacement Notes) so long as the
aggregate principal amount of such prepayments, redemptions and repurchases of
such other Debt shall not exceed $2,500,000 during the term of this Agreement
(from the Original Closing Date), (iii) all (and not less than all) of the
Senior Subordinated Notes and Term Loans and all or a portion of the ▇▇▇▇▇
Senior Subordinated Notes, in each instance, with proceeds of the Senior
Replacement Notes (which notes and the indenture governing same shall be
satisfactory to the Agent and the Majority Lenders) in the order set forth in
Section 8.24 and (iv) the ▇▇▇▇▇ Senior Subordinated Notes with proceeds of
unsecured Debt having such terms and conditions and issued pursuant to such
documentation satisfactory to the Agent and the Majority Lenders (but only after
the redemption or payment in full of all of the Senior Subordinated Notes and
Term Loans). Neither Parent, the Borrower nor any of its Subsidiaries shall
incur any liability to make any payment or prepayment of the Senior Subordinated
Notes, the ▇▇▇▇▇ Senior Subordinated Notes or the Senior Replacement Notes prior
to their final stated maturity date (except with respect to the Senior
Subordinated Notes and the ▇▇▇▇▇ Senior Subordinated Notes as contemplated by
clauses (iii) and (iv) of the immediately preceding sentence). Neither Parent,
the Borrower nor any of its Subsidiaries shall voluntarily prepay any rental
payments owing by the Borrower under the Secured Sale/Leaseback Documents. The
Borrower shall not make any payment or prepayment (whether of principal,
interest or otherwise) under or with respect to any of the Sherwood-Related
Subordinated Notes, except upon the scheduled maturity thereof and only then if
there is not continuing a Default or Event of Default.
9.15 Transactions with Affiliates. Except as set forth below or as
otherwise permitted by Section 9.10, neither Parent nor any of its Subsidiaries
shall sell, transfer, distribute, or pay any money or property, including, but
not limited to, any fees or expenses of any nature (including, but not limited
to, any fees or expenses for management services), to any Affiliate, or lend or
advance money or property to any Affiliate, or invest in (by capital
contribution or otherwise) or purchase or repurchase any stock or indebtedness,
or any property, of any Affiliate, or become liable on any Guaranty of the
indebtedness, dividends, or other obligations of any Affiliate. Notwithstanding
the foregoing, Parent and its Subsidiaries may engage in transactions with
Affiliates in the ordinary course of business, in amounts and upon terms fully
disclosed to the Agent and the Lenders, and no less favorable to Parent and its
Subsidiaries than would be obtained in a comparable arm's-length transaction
with a third party who is not an Affiliate. Further, notwithstanding the
foregoing, (a) so long as no Event of Default exists at the time of payment or
would exist immediately after giving effect thereto, Parent or the Borrower may
pay the fees as required pursuant to the Management Services Agreement as in
effect on the Closing Date in an aggregate amount not to exceed $2,000,000 in
any Fiscal Year (payable semi-annually 45 days after each interest payment date
with respect to, and as defined in, the Senior Subordinated Notes; it being
understood and agreed that in the event the Senior Subordinated Notes shall be
redeemed in full, such fees shall continue to be payable at such times as if the
Senior Subordinated Notes were not redeemed) and reimbursement for reasonable
out-of-pocket expenses; provided, however, that all obligations of Parent or the
Borrower to pay fees pursuant to said Management Services Agreement shall also
be subordinated to the payment of all Obligations in respect of this Agreement
and the other Loan Documents (including, without
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limitation, pursuant to the Parent Guaranty) to at least the same extent as the
obligations of the Borrower in respect of the Senior Subordinated Notes are
subordinated to the prior payment of "Senior Indebtedness" (as defined in the
Indenture for the Senior Subordinated Notes) (it being understood and agreed
that in the event the Senior Subordinated Notes shall be redeemed in full, such
subordination of such fees shall continue as if the Senior Subordinated Notes
were not redeemed); (b) Parent and its Subsidiaries may enter into transactions
with employees and/or officers of Parent and its Subsidiaries in the ordinary
course of business so long as any such material transactions have been approved
by the Board of Directors of Parent or such Subsidiaries; (c) Parent and its
Subsidiaries may engage in immaterial transactions with each other; and (d)
Parent and its Subsidiaries may, subject to Section 9.10(A)(b), make payments
under tax sharing, disaffiliation, tax allocation and other similar agreements
entered into by Parent or any Subsidiary of Parent after the Original Closing
Date with the prior written approval of the Agent and the Majority Lenders (and
in the form as originally executed) so long as, in each instance, the Borrower
shall not, and shall not be liable or required to, make any payments thereunder
in excess of any tax payments of the type covered by such agreement that the
Borrower would have to make had such agreement not been in effect.
9.16 Investment Banking and Finder's Fees. Neither Parent nor any
of its Subsidiaries shall pay or agree to pay, or reimburse any other party with
respect to, any investment banking or similar or related fee, underwriter's fee,
finder's fee, or broker's fee to any Person in connection with this Agreement.
The Borrower shall defend and indemnify the Agent and the Lenders against and
hold them harmless from all claims of any Person that Parent, the Borrower or
any of its Subsidiaries is obligated to pay for any such fees, and all costs and
expenses (including without limitation, attorneys' fees) incurred by the Agent
and/or any Lender in connection therewith.
9.17 Amendments of Senior Subordinated Notes and Other Documents.
Neither Parent nor any of its Subsidiaries shall, directly or indirectly, amend
or modify, or permit the amendment or modification of, the Senior Subordinated
Notes or any indenture or other agreement or document related thereto, except
for Permitted Amendments and Consents (as defined in the Intercreditor Agreement
(as defined in the First Amended and Restated Loan and Security Agreement) as in
effect on the Original Closing Date) with respect thereto (assuming for this
purpose that Permitted Amendments and Consents applied to the Senior
Subordinated Notes and related agreements and documents). Neither Parent nor any
of its Subsidiaries shall, directly or indirectly, amend or modify, or permit
the amendment or modification of, the Secured Sale/Leaseback Documents, except
for amendments and modifications which do not result in the violation of, and
which are not otherwise contrary to, any provisions of the Intercreditor
Agreement. Neither Parent nor any of its Subsidiaries shall, directly or
indirectly, amend or modify, or permit the amendment or modification of, any
Sherwood Stock Purchase Documents, any Sherwood-Related Merger Documents, any
▇▇▇▇▇/Cup Merger Documents, the ▇▇▇▇▇ Senior Subordinated Notes or the Senior
Replacement Notes or any indenture or other agreement or document related
thereto, except that the Borrower may amend the ▇▇▇▇▇ Senior Subordinated Notes
and the indenture related thereto pursuant to a supplemental indenture in form
and substance satisfactory to the Agent to remove covenants contained in such
notes and indenture.
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9.18 Business Conducted. Neither Parent nor the Borrower shall,
and neither Parent nor the Borrower shall permit any of its Subsidiaries to,
engage directly or indirectly, in any line of business other than the businesses
in which the Borrower is engaged on the Original Closing Date and reasonable
extensions thereof.
9.19 Liens.Neither Parent nor any of its Subsidiaries shall create,
incur, assume, or permit to exist any Lien on any property now owned or
hereafter acquired by any of them, except Permitted Liens.
9.20 Sale and Leaseback Transactions. Neither Parent nor any of
its Subsidiaries shall, directly or indirectly, enter into any arrangement with
any Person providing for Parent or such Subsidiary to lease or rent property
that Parent or such Subsidiary has sold or will sell or otherwise transfer to
such Person, except for such arrangements under the Secured Sale/Leaseback
Documents and for any such other transactions with non-Affiliates relating to
Fixed Assets (other than Credit Agreement Term Loan Equipment Collateral or
▇▇▇▇▇ Term Loan Equipment Collateral) for an aggregate sales price for all such
transactions not to exceed $10,000,000 in any Fiscal Year and $30,000,000 during
the term of this Agreement (from the Original Closing Date).
9.21 New Subsidiaries. Parent shall not, directly or indirectly,
organize, create, acquire or permit to exist any Subsidiary other than those
listed on Schedule 8.5 and the acquisition by the Borrower of Sherwood and its
Subsidiaries pursuant to the Sherwood Stock Purchase Agreement.
9.22 Fiscal Year. Neither the Borrower nor Parent shall change its
Fiscal Year without the prior written consent of the Agent (such consent not to
be unreasonably withheld) and the receipt by the Agent of a duly executed
amendment to the financial covenants herein contained, in form and substance
reasonably satisfactory to the Agent and the Majority Lenders, to equitably
reflect the effect of such change in Fiscal Year.
9.23 Capital Expenditures. Neither Parent nor any of its
Subsidiaries shall make or incur any Capital Expenditures in any Fiscal Year set
forth below if, after giving effect thereto, the aggregate amount of all Capital
Expenditures by Parent and its Subsidiaries on a consolidated basis during such
Fiscal Year shall exceed the amount set forth below opposite such Fiscal Year:
Fiscal Year Amount
----------- ------
2001 $30,000,000
2002 $30,000,000
2003 $30,000,000
2004 $30,000,000
2005 $30,000,000
2006 $30,000,000
The Borrower will use its commercially reasonable best efforts to use the net
proceeds (but in any event shall use not less than 75% of the net proceeds) of
each sale of Secured Sale/Leaseback
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Collateral permitted pursuant to Section 9.9(ii) to incur Capital Expenditures,
to the extent otherwise permitted under this Section. The Borrower agrees to
promptly notify the Agent of any such sale and the amount of net proceeds to be
derived from each such sale.
9.24 [Reserved.]
9.25 Minimum Availability. The Borrower will maintain at all times
Availability of not less than $10,000,000, except as permitted by Section
2.2(h).
9.26 Fixed Charge Coverage Ratio. The Borrower will maintain a
Fixed Charge Coverage Ratio for each Test Period ended at the end of the fiscal
quarter of the Borrower set forth below of not less than the ratio set forth
below opposite such fiscal quarter:
Fiscal Quarter Year Ratio
-------------- ---- -----
Each of First and Second 2002 .90/1
Third 2002 .95/1
Fourth 2002 1.00/1
Each of First, Second and Third 2003 1.00/1
Fourth 2003 1.00/1
Each of First, Second, Third and Fourth 2004 1.05/1
Each of First, Second, Third and Fourth 2005 1.10/1
Each of First, Second, Third and Fourth 2006 1.15/1
Each of First and Second 2007 1.15/1
9.27 Use of Proceeds. The Borrower shall not, and shall not suffer
or permit Parent or any Subsidiary to, use any portion of the Loan proceeds,
directly or indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or
otherwise refinance indebtedness of the Borrower or others incurred to purchase
or carry Margin Stock, (iii) to extend credit for the purpose of purchasing or
carrying any Margin Stock, or (iv) to acquire any security in any transaction
that is subject to Section 13 or 14 of the Exchange Act.
9.28 Senior Indebtedness and Secured Sale/Leaseback Collateral.
Each of Parent and the Borrower covenants and agrees that its obligations in
respect of this Agreement and the other Loan Documents are and will be prior to
the Stated Termination Date the only obligations designated as (i) "Material
Senior Indebtedness" for purposes of, and as such term is defined in, the
indenture governing the Senior Subordinated Notes or (ii) "Designated Senior
Debt" for purposes of, and as such term is defined in, the indenture governing
the ▇▇▇▇▇ Senior Subordinated Notes.
(a) Neither Parent nor the Borrower shall designate any
documents with respect to any Debt (other than this Agreement) as the "Credit
Agreement" or "Bank Credit Agreement" for purposes of the receipt of notices by
the Agent, and delivery of blockage notices pursuant to the subordination
provisions of the documents with respect to the Senior Subordinated Notes.
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(b) Neither Parent nor the Borrower shall designate any Debt
as "Material Senior Indebtedness," as such term is defined in the indenture
governing the Senior Subordinated Notes as in effect on the Original Closing
Date or pursuant to any analogous provision.
(c) Neither Parent, nor the Borrower, nor any of its
Subsidiaries shall assign, transfer or otherwise dispose of any Secured
Sale/Leaseback Collateral except in accordance with Section 3.5(b) of the
Intercreditor Agreement (for this purpose, without giving effect to changes
thereto not agreed to by the Borrower).
(d) Neither Parent nor the Borrower shall deliver or otherwise
remit to or deposit with or into the Trustee or the Collateral Account (as such
terms are defined in the Intercreditor Agreement) any Collateral or any proceeds
thereof, other than Secured Sale/Leaseback Collateral and proceeds thereof.
(e) Neither Parent nor the Borrower shall use (i) Secured
Sale/Leaseback Collateral or proceeds thereof to purchase or otherwise acquire
Credit Agreement Collateral or (ii) Credit Agreement Collateral or proceeds
thereof to purchase or otherwise acquire Secured Sale/Leaseback Collateral.
9.29 Further Assurances. The Borrower and Parent shall execute and
deliver, or cause to be executed and delivered, to the Agent and/or the Lenders
such documents and agreements, and shall take or cause to be taken such actions,
as the Agent or any Lender may, from time to time, reasonably request to carry
out the terms and conditions of this Agreement and the other Loan Documents.
ARTICLE 10
CONDITIONS OF LENDING
10.1 Conditions Precedent to Making of Loans on the Original
Closing Date. The obligation of the Lenders to make the initial Revolving Loans
on the Original Closing Date and the obligation of the Agent to cause to be
issued or provide Credit Support for any Letter of Credit on the Original
Closing Date, are subject to the following conditions precedent having been
satisfied in a manner satisfactory to the Agent and each Lender:
(a) The First Amended and Restated Loan and Security Agreement
and the other Loan Documents (as defined therein) have been executed by each
party thereto (including, without limitation, if requested by the Agent,
amendments, in form and substance reasonably satisfactory to the Agent, to
Credit Documents (as defined in the Original Credit Agreement) assigned to BABC
or the Agent pursuant to the Bank Assignment Agreement) and the Borrower and
Parent shall have performed and complied with all covenants, agreements and
conditions contained therein which are required to be performed or complied with
by the Borrower or Parent before or on the Original Closing Date.
(b) Upon making the Revolving Loans on the Original Closing
Date (including such Revolving Loans made to finance the Closing Fee (as defined
in the First
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Amended and Restated Loan and Security Agreement) or otherwise pursuant to
Section 4.7 as reimbursement for fees, costs and expenses then payable under the
First Amended and Restated Loan and Security Agreement) and with all its
obligations current and after giving effect to the effectiveness of the
assignments and transfers contemplated by the Bank Assignment Agreement, the
Borrower would have Availability (as defined in the Existing Loan and Security
Agreement) in an amount no less than $13,500,000.
(c) All representations and warranties made under the First
Amended and Restated Loan and Security Agreement and in the other Loan Documents
(as defined therein) shall be true and correct as of the Original Closing Date
as if made on such date.
(d) No Default or Event of Default shall exist on the Original
Closing Date, or would exist immediately after giving effect to the Loans to be
made on such date.
(e) The Agent and the Lenders shall have received such
opinions of counsel for Parent and its Subsidiaries as the Agent or any Lender
shall reasonably request, each such opinion to be in a form, scope, and
substance satisfactory to the Agent, the Lenders, and their respective counsel.
(f) [Intentionally Omitted].
(g) The Agent shall have received:
(i) acknowledgment copies of proper financing
statements duly filed on or before the Original Closing Date under the UCC of
all jurisdictions that the Agent may deem necessary or desirable in order to
perfect the Agent's Lien.
(ii) duly executed UCC-3 Termination Statements
and such other instruments, in form and substance satisfactory to the Agent, as
shall be necessary to terminate and satisfy all Liens on the property of Parent
and its Subsidiaries (including, without limitation, UCC-3 Termination
Statements terminating all UCC filings made under the receivables transfer and
receivables securitization facilities referred to in clause (f) above), except
Permitted Liens.
(iii) the Bank Assignment Agreement duly
executed and delivered by all the parties thereto and all conditions to the
effectiveness of the assignments and transfers contemplated thereby (other than
the payment of any monies by BABC under Section 3(a)(i) thereof and the return
to the agent under the Original Credit Agreement of the BT Letter of Credit (as
defined in the Bank Assignment Agreement)) shall have been satisfied.
(iv) a duly executed acknowledgment and
agreement to the Intercreditor Agreement (as defined in the First Amended and
Restated Loan and Security Agreement), in form and substance satisfactory to the
Agent, acknowledging the Agent as the "Credit Agent" under and as defined in the
Intercreditor Agreement (as so defined).
(h) The Borrower shall have paid all fees and expenses of the
Agent and the Attorney Costs reasonably incurred by the Agent in connection with
any of the Loan Documents
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(as defined in the First Amended and Restated Loan and Security Agreement) and
the transactions contemplated thereby.
(i) The Agent shall have received evidence, in form, scope,
and substance, reasonably satisfactory to the Agent, of all insurance coverage
as required by the First Amended and Restated Loan and Security Agreement.
(j) The Agent and the Lenders shall have had an opportunity,
if they so choose, to examine the books of account and other records and files
of Parent and its Subsidiaries and to make copies thereof, and to conduct a
pre-closing audit which shall include, without limitation, verification of
Inventory, Accounts, and Availability (as defined in the First Amended and
Restated Loan and Security Agreement), and the results of such examination and
audit shall have been satisfactory to the Agent and the Lenders in all respects.
(k) All proceedings taken in connection with the execution of
the First Amended and Restated Loan and Security Agreement, all other Loan
Documents (as therein defined) and all documents and papers relating thereto
shall be satisfactory in form, scope, and substance to the Agent and the
Lenders.
(l) The Agent shall have received certified copies of the
Senior Secured Notes, the Senior Subordinated Notes, the Intercreditor Agreement
(as defined in the First Amended and Restated Loan and Security Agreement), the
Asset Transfer Documents and all documents, instruments and agreements entered
into pursuant thereto or in connection therewith.
The acceptance by the Borrower of any Loans made on the
Original Closing Date shall be deemed to be a representation and warranty made
by the Borrower to the effect that all of the conditions precedent to the making
of such Loans have been satisfied, with the same effect as delivery to the Agent
and the Lenders of a certificate signed by a Responsible Officer of the
Borrower, dated the Original Closing Date, to such effect.
Execution and delivery to the Agent by a Lender of a
counterpart of the First Amended and Restated Loan and Security Agreement shall
be deemed confirmation by such Lender that (i) all conditions precedent in this
Section 10.1 have been fulfilled to the satisfaction of such Lender and (ii) the
decision of such Lender to execute and deliver to the Agent an executed
counterpart of the First Amended and Restated Loan and Security Agreement was
made by such Lender independently and without reliance on the Agent or any other
Lender as to the satisfaction of any condition precedent set forth in this
Section 10.1.
10.2 Conditions Precedent to Each Loan. The obligation of the
Lenders to make each Loan, including the initial Revolving Loans on the Original
Closing Date and the Term Loans and any Revolving Loans on the Closing Date, and
the obligation of the Agent to take reasonable steps to cause to be issued or to
provide Credit Support for any Letter of Credit, shall be subject to the further
conditions precedent that on and as of the date of any such extension of credit:
(a) the following statements shall be true, and the acceptance
by the Borrower of any extension of credit shall be deemed to be a statement to
the effect set forth in clauses
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(i) and (ii), with the same effect as the delivery to the Agent and the Lenders
of a certificate signed by a Responsible Officer, dated the date of such
extension of credit, stating that:
(i) The representations and warranties
contained in this Agreement and the other Loan Documents are correct in all
material respects on and as of the date of such extension of credit as though
made on and as of such date, other than any such representation or warranty
which relates to a specified prior date and except to the extent the Agent and
the Lenders have been notified by the Borrower that any representation or
warranty is not correct and the Majority Lenders have explicitly waived in
writing compliance with such representation or warranty; and
(ii) No event has occurred and is continuing, or
would result from such extension of credit, which constitutes a Default or an
Event of Default; and
(b) without limiting Section 10.1(b), the amount of the
Availability shall be sufficient to make such Revolving Loan or permit the
issuance of such Letter of Credit or Credit Support without exceeding the
Availability, provided, however, that the foregoing conditions precedent are not
conditions to each Lender participating in or reimbursing BofA or the Agent for
such Lenders' Pro Rata Share of any BofA Loan or Agent Advance as provided in
Sections 2.2(h), (i) and (j).
10.3 Conditions Precedent to Effectiveness of Amendment and
Restatement and Making of Loans on Closing Date. The effectiveness of the
amendment and restatement of the Existing Loan and Security Agreement as
provided herein and the obligation of the Lenders to make the Term Loans and any
Revolving Loans on the Closing Date and the obligation of the Agent to cause to
be issued or provide Credit Support for any Letter of Credit on the Closing
Date, are subject to the following conditions precedent having been satisfied
prior thereto (or, in the case of clauses (e)(ii) and (g) below, concurrently
therewith) in a manner satisfactory to the Agent and each Lender:
(a) This Agreement, the Term Loan Notes, the Fee Letter, the
Dopaco Assignment of Contract As Collateral Security and the other Loan
Documents (to the extent not heretofore executed by the parties thereto) have
been executed by each party thereto (including, without limitation, if requested
by the Agent, amendments, in form and substance reasonably satisfactory to the
Agent, to Loan Documents previously executed by the parties thereto to reflect
modifications to the Existing Loan and Security Agreement being made hereby) and
the Borrower and Parent shall have performed and complied in all material
respects with all covenants, agreements and conditions contained herein and in
the other Loan Documents which are required to be performed or complied with by
the Borrower or Parent before or on the Closing Date.
(b) All representations and warranties made hereunder and in
the other Loan Documents shall be true and correct as of the Closing Date as if
made on such date.
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(c) No Default or Event of Default shall exist on the Closing
Date, or would exist immediately after giving effect to the Loans, Letters of
Credit and Credit Support to be made or issued on such date.
(d) The Agent and the Lenders shall have received such
opinions of counsel for Parent and its Subsidiaries as the Agent or any Lender
shall reasonably request, each such opinion to be in a form, scope, and
substance reasonably satisfactory to the Agent, the Lenders, and their
respective counsel.
(e) The Agent shall have received:
(i) acknowledgment copies of proper financing
statements duly filed on or before the Closing Date under the UCC of all
jurisdictions that the Agent may deem reasonably necessary or desirable in order
to perfect the Agent's Lien (to the extent not heretofore received by the
Agent);
(ii) duly executed UCC-3 Termination Statements
and such other instruments, in form and substance reasonably satisfactory to the
Agent, as shall be necessary to terminate and satisfy all Liens on the property
of Parent and its Subsidiaries (including, without limitation and in any event,
UCC-3 Termination Statements and other documents to terminate all Liens granted
in connection with the Existing ▇▇▇▇▇ Credit Facility), except Permitted Liens;
and
(iii) a payout and termination letter, in form and
substance satisfactory to the Agent, with respect to the Existing ▇▇▇▇▇ Credit
Facility duly executed by ▇▇▇▇▇ and the agent bank thereunder.
(f) The Borrower shall have paid (i) all fees and expenses of
the Agent and the Attorney Costs reasonably incurred by the Agent in connection
with any of the Loan Documents and the transactions contemplated thereby and
(ii) all interest and fees owing to the Agent and the Lenders under the Existing
Loan and Security Agreement which have accrued through but excluding the Closing
Date (whether or not then otherwise due and payable).
(g) The ▇▇▇▇▇/Cup Merger shall have been duly consummated in
accordance with the ▇▇▇▇▇/Cup Merger Documents and applicable law and the
requirements with respect thereto set forth in the proviso to Section 9.9(xi)
shall have been satisfied.
(h) All proceedings taken in connection with the execution of
this Agreement, all other Transaction Documents to be entered into on or about
the Closing Date and all documents and papers relating thereto shall be
reasonably satisfactory in form, scope, and substance to the Agent and the
Lenders.
(i) The Agent shall have received a copy of the certificate
required to be delivered by the Borrower pursuant to Section 1 of the Consent
and Amendment to Participation Agreement and Security Agreement, dated as of
December 21, 2001, among the Borrower and certain of the other parties to the
Secured Sale/Leaseback Documents.
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(j) No material adverse change shall have occurred, as
determined by the Agent or the Lenders in its or their sole discretion, in the
business, operations, profits or prospects of the Borrower, ▇▇▇▇▇ or Parent
since September 30, 2001 or in the condition of the assets of the Borrower,
▇▇▇▇▇ or Parent since such date.
(k) There shall exist no action, suit, investigation,
litigation, or proceeding pending or, to any of the Borrower's, the Agent's or
any Lender's knowledge, threatened in any court or before any arbitrator or
governmental instrumentality that in the Agent's or the Lenders' reasonable
judgment (i) could reasonably be expected to have a material adverse effect on
the business, condition (financial or otherwise), operations, performance, or
prospects of the Borrower, ▇▇▇▇▇ or Parent or which could impair in any material
respect the Borrower's or Parent's ability to perform satisfactorily under the
Loan Documents or (ii) could reasonably be expected to materially and adversely
affect the transactions contemplated by the Transaction Documents.
(l) All governmental and third party consents and approvals
necessary in connection with the transactions contemplated by the Transaction
Documents to occur on or about the Closing Date have been obtained by the
Borrower.
(m) Satisfaction by the Agent and Lenders that the Borrower is
adequately capitalized, that the fair salable value of the Borrower's assets
will exceed its liabilities on the Closing Date (after giving effect to the
transactions contemplated hereunder to occur on the Closing Date), and that the
Borrower will have sufficient working capital to pay its debts as they become
due.
(n) [Intentionally Omitted].
(o) The Agent shall have received (i) an Officers' Certificate
(as defined in the Intercreditor Agreement) to the effect that the aggregate
maximum principal amount of the Credit Agreement Obligations (as defined in the
Intercreditor Agreement) which may be incurred under this Agreement shall not
exceed an amount which would cause a violation of Section 5.09 of the Secured
Sale/Leaseback Participation Agreement (as defined in the Intercreditor
Agreement) and (ii) an Officers' Certificate (as defined in the indenture
governing the Senior Subordinated Notes) to the effect that any and all
Obligations which may be incurred under this Agreement as well as any guarantee
obligations of Parent with respect thereto are permitted to be incurred under
the indenture governing the Senior Subordinated Notes.
(p) BofA and/or other Lenders shall have acquired all of the
commitments, loans and other interests of the other lenders under the Existing
Loan and Security Agreement which are not Lenders hereunder.
(q) [Intentionally Omitted].
(r) All conditions in the indenture for each of the Senior
Subordinated Notes and the ▇▇▇▇▇ Senior Subordinated Notes required with respect
to the consummation of the
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▇▇▇▇▇/Cup Merger and the other transactions contemplated by the Transaction
Documents to occur on or about the Closing Date shall have been satisfied.
(s) [Intentionally Omitted].
(t) The Agent shall be satisfied that the Borrower's
Obligations under this Agreement have been designated by the Board of Directors
of the Borrower as "Designated Senior Debt" under and as defined in the
indenture for the ▇▇▇▇▇ Senior Subordinated Notes.
(u) The Agent shall be reasonably satisfied with the terms,
conditions and documentation relating to any and all other transactions
contemplated by the Transaction Documents to occur on or about the Closing Date
and such transactions shall have been consummated in accordance with applicable
law.
(v) The Agent shall be reasonably satisfied with the
corporate, debt and legal structure of the Borrower and Parent after giving
effect to the ▇▇▇▇▇/Cup Merger and the other transactions contemplated by the
Transaction Documents to occur on or about the Closing Date (including, without
limitation, with the terms of the ▇▇▇▇▇ Senior Subordinated Notes).
(w) Upon making the Revolving Loans and Term Loans on the
Closing Date, the Borrower shall have Availability in an amount no less than the
sum of $20,000,000 plus the aggregate amount of accounts payable of the Borrower
which are 30 or more days overdue as of the Closing Date.
(x) The Agent shall be satisfied that prior to and during the
syndication of the Total Facility there shall be no competing offering,
placement or arrangement of any debt securities or bank financing by or on
behalf of the Borrower (other than the Senior Replacement Notes).
(y) Since August 31, 2001, no material adverse change in or
material disruption of conditions in the financial, banking or capital markets
which the Agent, in its sole discretion, deems material in connection with the
syndication of the Total Facility shall have occurred and be continuing.
(z) Since August 31, 2001, no change, occurrence or
development that could, in the Agent's opinion, have a material adverse effect
on the business, assets, liabilities (actual or contingent), operations,
condition (financial or otherwise) or prospects of ▇▇▇▇▇ or the Borrower and
their respective Subsidiaries taken as a whole shall have occurred or become
known to the Agent.
(aa) The Agent shall not have become aware after February 14,
2002 of any information or other matter which in the Agent's judgment is
inconsistent in a material and adverse manner with any information or other
matter disclosed to the Agent prior to such date with respect to either of ▇▇▇▇▇
or the Borrower, its business or financial condition, or the transactions
contemplated in connection with the Total Facility.
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(bb) The Borrower shall have satisfied such other
conditions precedent reasonably requested by the Agent or any Lender.
The acceptance by the Borrower of any Loans made or other
financial accommodations hereunder provided on the Closing Date shall be deemed
to be a representation and warranty made by the Borrower to the effect that all
of the conditions precedent to the making of such Loans and the provision of
such other financial accommodations have been satisfied, with the same effect as
delivery to the Agent and the Lenders of a certificate signed by a Responsible
Officer of the Borrower, dated the Closing Date, to such effect.
Execution and delivery to the Agent by a Lender of a
counterpart of this Agreement shall be deemed confirmation by such Lender that
(i) all conditions precedent in this Section 10.3 have been fulfilled to the
satisfaction of such Lender and (ii) the decision of such Lender to execute and
deliver to the Agent an executed counterpart of this Agreement was made by such
Lender independently and without reliance on the Agent or any other Lender as to
the satisfaction of any condition precedent set forth in this Section 10.3.
ARTICLE 11
DEFAULT; REMEDIES
11.1 Events of Default. It shall constitute an event of default
("Event of Default") if any one or more of the following shall occur for any
reason:
(a) any failure to pay the principal in respect of any
Obligations when due, whether upon demand or otherwise, or (ii) any failure to
pay interest or premium on any of the Obligations or any fees owing hereunder
within 3 Business Days of when due, whether upon demand or otherwise;
(b) any representation or warranty made or deemed made by the
Borrower or Parent in this Agreement or by Parent or any of its Subsidiaries in
any of the other Loan Documents, any Financial Statement, or any certificate
furnished by Parent or any of its Subsidiaries at any time to the Agent or any
Lender shall prove to be untrue in any material respect as of the date on which
made, deemed made, or furnished;
(c) any default shall occur in the observance or performance
of any of the covenants and agreements contained in Section 6.2, 6.3, 6.7 or 6.9
or in Article 7 or in Article 9 (other than Section 9.4, 9.6, 9.16, 9.20 or
9.29) of this Agreement (provided, however, to the extent that any covenant in
Article 7 specifies the number of days within which the Borrower or Parent must
comply (including, without limitation, for the giving of notice or delivery of a
financial statement, forecast or report), the Borrower or Parent, as the case
may be, shall have the numbers of days specified in such covenant plus 5 days
within which to comply before such non-compliance becomes an Event of Default
under this clause (i)), or (ii) any default shall occur in the observance or
performance of any of the covenants and agreements contained in any of Section
9.4, 9.6, 9.16, 9.20 or 9.29 of this Agreement and such default shall continue
unremedied for a period of 10 days after the earlier to occur of (x) notice
thereof from the Agent or any
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Lender to Parent or the Borrower or (y) Parent's or the Borrower's actual
knowledge thereof, or (iii) any default shall occur in the observance or
performance of any of the covenants and agreements contained in this Agreement
(other than as specified in clause (a) or (c)(i) or (ii) above), any other Loan
Documents, or any other agreement entered into at any time to which the
Borrower, Parent or any Subsidiary and the Agent or any Lender are party and
such default shall continue unremedied for a period of 30 days after the earlier
to occur of (x) notice thereof from the Agent or any Lender to Parent or the
Borrower or (y) Parent's or the Borrower's actual knowledge thereof, or (iv) if
any agreement or document referred to in clauses (i), (ii) or (iii) above shall
terminate (other than in accordance with its terms or the terms hereof or with
the written consent of the Agent and the Majority Lenders) or become void or
unenforceable, without the written consent of the Agent and the Majority
Lenders;
(d) (i) default shall occur with respect to the Senior
Subordinated Notes, the ▇▇▇▇▇ Senior Subordinated Notes or the Senior
Replacement Notes or with respect to any other Debt (other than the Obligations)
in an aggregate outstanding principal amount for all such other Debt which
exceeds $5,000,000, or under any agreement or instrument under or pursuant to
which the Senior Subordinated Notes, the ▇▇▇▇▇ Senior Subordinated Notes, the
Senior Replacement Notes or any such other Debt may have been issued, created,
assumed, or guaranteed by Parent or any of its Subsidiaries, and such default
shall continue for more than the period of grace, if any, therein specified, if
the effect thereof (with or without the giving of notice or further lapse of
time or both) is to accelerate, or to permit the holders of the Senior
Subordinated Notes, the ▇▇▇▇▇ Senior Subordinated Notes, the Senior Replacement
Notes or any such other Debt to accelerate, the maturity of any such Debt; or
any such Debt shall be declared due and payable or be required to be prepaid
(other than by a regularly scheduled required prepayment) prior to the stated
maturity thereof, or (ii) a Lease Event of Default (as defined in the Secured
Sale/Leaseback Documents) shall occur;
(e) Parent or any of its Subsidiaries shall (i) file a
voluntary petition in bankruptcy or file a voluntary petition or an answer or
otherwise commence any action or proceeding seeking reorganization, arrangement
or readjustment of its debts or for any other relief under the federal
Bankruptcy Code, as amended, or under any other bankruptcy or insolvency act or
law, state or federal, now or hereafter existing, or consent to, approve of, or
acquiesce in, any such petition, action or proceeding; (ii) apply for or
acquiesce in the appointment of a receiver, assignee, liquidator, sequestrator,
custodian, monitor, trustee or similar officer for it or for all or any part of
its property; (iii) make an assignment for the benefit of creditors; or (iv) be
unable generally to pay its debts as they become due;
(f) an involuntary petition or proposal shall be filed or an
action or proceeding otherwise commenced seeking reorganization, arrangement,
consolidation or readjustment of the debts of Parent or any of its Subsidiaries
or for any other relief under the federal Bankruptcy Code, as amended, or under
any other bankruptcy or insolvency act or law, state or federal, now or
hereafter existing and either (i) such petition, proposal, action or proceeding
shall not have been dismissed within a period of sixty (60) days after its
commencement or (ii) an order for relief against Parent or such Subsidiary shall
have been entered in such proceeding;
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(g) a receiver, assignee, liquidator, sequestrator, custodian,
monitor, trustee or similar officer for Parent or any of its Subsidiaries or for
all or any part of its property shall be appointed or a warrant of attachment,
execution or similar process shall be issued against any part of the property of
Parent or any of its Subsidiaries;
(h) Parent or any of its Subsidiaries shall file a certificate
of dissolution under applicable state law or shall be liquidated, dissolved or
wound-up or shall commence or have commenced against it any action or proceeding
for dissolution, winding-up or liquidation, or shall take any corporate action
in furtherance thereof;
(i) all or any material part of the property of Parent or any
of its Subsidiaries or the equipment subject to the Secured Sale/Leaseback
Arrangements shall be nationalized, expropriated or condemned, seized or
otherwise appropriated, or custody or control of such property or of Parent or
such Subsidiary shall be assumed by any Governmental Authority or any court of
competent jurisdiction at the instance of any Governmental Authority, except
where contested in good faith by proper proceedings diligently pursued where a
stay of enforcement is in effect;
(j) any guaranty of the Obligations shall be terminated,
revoked or declared void or invalid;
(k) one or more judgments or orders for the payment of money
aggregating in excess of $2,500,000, which amount shall not be fully covered by
insurance, shall be rendered against Parent or any of its Subsidiaries;
(l) any loss, theft, damage or destruction of any item or
items of Collateral, any other property of Parent or any Subsidiary or any
equipment subject to the Secured Sale/Leaseback Arrangements occurs which
materially and adversely affects the property, business, operation or financial
condition of Parent and the Borrower taken as a whole;
(m) there occurs a Material Adverse Effect;
(n) there is filed against Parent or any of its Subsidiaries
any criminal action, suit or proceeding under any federal or state racketeering
statute (including, without limitation, the Racketeer Influenced and Corrupt
Organization Act of 1970), which action, suit or proceeding (1) is not dismissed
within one hundred twenty (120) days, and (2) could reasonably be expected to
result in the confiscation or forfeiture of any material portion of the
Collateral;
(o) for any reason other than the failure of the Agent to take
any action available to it to maintain perfection of the Agent's Liens pursuant
to the Loan Documents, any Loan Document ceases to be in full force and effect
or any Lien with respect to any material portion of the Collateral intended to
be secured thereby ceases to be, or is not, valid, perfected and prior to all
other Liens (other than Permitted Liens) or is terminated, revoked or declared
void;
(p) one or more ERISA Events shall occur; (ii) any Pension
Plans shall have any Unfunded Pension Liability; or (iii) Parent, the Borrower
or any ERISA Affiliate shall fail to
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pay when due, after the expiration of any applicable grace period, one or more
installment payments with respect to its withdrawal liability under Section 4201
of ERISA under any Multi-employer Plans; provided, however, that (x) the events,
acts or conditions described in clauses (i), (ii) and (iii) above shall not
constitute a Default or Event of Default under this clause (p) unless the
aggregate liability incurred or reasonably expected to be incurred by Parent,
the Borrower or any ERISA Affiliates for all such events, acts or conditions
shall exceed $5,000,000 in the aggregate for all such Persons and (y) the Agent
and the Majority Lenders hereby agree that the occurrence of any event set forth
above, resulting directly from the litigation described in Schedule 8.21 so long
as the aggregate amount of, without duplication, liens, security interests and
liabilities resulting therefrom shall not exceed $17,500,000, shall not be
deemed to be or otherwise constitute a Default or Event of Default under this
clause (p) (however, notwithstanding the foregoing, the Agent shall have the
right, in its sole discretion, to establish reserves against Availability if any
liens or security interests on the assets of Parent or any of its Subsidiaries
securing greater than $100,000 in liabilities in the aggregate for Parent and
its Subsidiaries shall attach or otherwise arise as a result of such
litigation);
(q) there occurs a Change of Control;
(r) there shall occur any of the events, acts or conditions
described in Section 6 of the Waiver dated January 21, 1998 by the Lenders to
the Borrower and Parent or any of the waivers or other agreements of the
Majority Lenders in such Waiver shall be revoked or of no further force or
effect as contemplated by such Section 6; or the Borrower or Parent shall breach
any agreement made by it under such Waiver;
(s) the Secured Sale/Leaseback Arrangements shall terminate
prior to the Stated Termination Date; or
(t) the proceeds of the Senior Replacement Notes (when issued)
are not promptly used to redeem or otherwise acquire all of the Senior
Subordinated Notes and to repay in full the Term Loans.
11.2 Remedies. If a Default or an Event of Default exists, the
Agent may, in its discretion, and shall, at the direction of the Majority
Lenders, do one or more of the following at any time or times and in any order,
without notice to or demand on the Borrower or Parent: (i) reduce the Maximum
Revolver Amount, or the advance rates against Eligible Accounts and/or Eligible
Inventory used in computing the Availability, or reduce one or more of the other
elements used in computing the Availability; (ii) restrict the amount of or
refuse to make Revolving Loans; and (iii) restrict or refuse to arrange for or
provide Letters of Credit or Credit Support. If an Event of Default exists, the
Agent shall, at the direction of the Majority Lenders, do one or more of the
following, in addition to the actions described in the preceding sentence, at
any time or times and in any order, without notice to or demand on the Borrower
or Parent: (a) terminate the Commitments and this Agreement; (b) declare any or
all Obligations to be immediately due and payable; provided, however, that upon
the occurrence of any Event of Default described in Section 11.1(e), 11.1(f),
11.1(g) or 11.1(h), the Commitments shall automatically and immediately expire
and all Obligations shall automatically become
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immediately due and payable without notice or demand of any kind; and (c) pursue
its other rights and remedies under the Loan Documents and applicable law.
(a) If an Event of Default exists, except as provided in the
Intercreditor Agreement with respect to Secured Sale/Leaseback Collateral and
Shared Collateral: (i) the Agent shall have for the benefit of the Agent and the
Lenders, in addition to all other rights of the Agent and the Lenders, the
rights and remedies of a secured party under the UCC; (ii) the Agent may, at any
time, take possession of the Collateral and keep it on the Borrower's and/or
Parent's premises, at no cost to the Agent or any Lender, or remove any part of
it to such other place or places as the Agent may desire, or the Borrower shall,
upon the Agent's demand, at the Borrower's cost, assemble or cause to be
assembled the Collateral and make it available to the Agent at a place
reasonably convenient to the Agent; and (iii) the Agent may sell and deliver any
Collateral at public or private sales, for cash, upon credit or otherwise, at
such prices and upon such terms as the Agent deems advisable, in its sole
discretion, and may, if the Agent deems it reasonable, postpone or adjourn any
sale of the Collateral by an announcement at the time and place of sale or of
such postponed or adjourned sale without giving a new notice of sale. Without in
any way requiring notice to be given in the following manner, each of Parent and
the Borrower agrees that any notice by the Agent of sale, disposition or other
intended action hereunder or in connection herewith, whether required by the UCC
or otherwise, shall constitute reasonable notice to it if such notice is mailed
by registered or certified mail, return receipt requested, postage prepaid, or
is delivered personally against receipt, at least five (5) Business Days prior
to such action to Parent's or the Borrower's address, as appropriate, specified
in or pursuant to Section 15.8. If any Collateral is sold on terms other than
payment in full at the time of sale, no credit shall be given against the
Obligations until the Agent or the Lenders receive payment, and if the buyer
defaults in payment, the Agent may resell the Collateral without further notice
to the Borrower or Parent. In the event the Agent seeks to take possession of
all or any portion of the Collateral by judicial process, each of Parent and the
Borrower irrevocably waives: (a) the posting of any bond, surety or security
with respect thereto which might otherwise be required; (b) any demand for
possession prior to the commencement of any suit or action to recover the
Collateral; and (c) any requirement that the Agent retain possession and not
dispose of any Collateral until after trial or final judgment. Each of Parent
and the Borrower agrees that the Agent has no obligation to preserve rights to
the Collateral or marshal any Collateral for the benefit of any Person. The
Agent is hereby granted a license or other right to use, without charge, the
Borrower's and Parent's labels, patents, copyrights, name, trade secrets, trade
names, trademarks, and advertising matter, or any similar property, in
completing production of, advertising or selling any Collateral, and the
Borrower's and Parent's rights under all licenses and all franchise agreements
shall inure to the Agent's benefit for such purpose. The proceeds of sale shall
be applied first to all expenses of sale, including attorneys' fees, and then to
the Obligations in whatever order the Agent elects. The Agent will, subject to
the terms of the Intercreditor Agreement and any applicable law or court order,
return any excess to the Borrower or Parent, as appropriate, and each of Parent
and the Borrower shall remain liable for any deficiency.
(b) If an Event of Default occurs, each of Parent and the
Borrower hereby waives all rights to notice and hearing prior to the exercise by
the Agent of the Agent's rights
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to repossess the Collateral without judicial process or to replevy, attach or
levy upon the Collateral without notice or hearing.
ARTICLE 12
TERM AND TERMINATION
12.1 Term and Termination. The term of this Agreement shall end on
the Stated Termination Date. The Agent upon direction from the Majority Lenders
may terminate this Agreement without notice upon the occurrence and during the
continuance of an Event of Default. Upon the effective date of termination of
this Agreement for any reason whatsoever, all outstanding monetary Obligations
(including, without limitation, all unpaid principal, accrued interest and any
early termination or prepayment fees or penalties) shall become immediately due
and payable and the Borrower shall immediately arrange for the cancellation of
Letters of Credit then outstanding. Notwithstanding the termination of this
Agreement, until all outstanding monetary Obligations are indefeasibly paid in
full in cash and the Payment and Termination Date shall have occurred, each of
Parent and the Borrower shall remain bound by the terms of this Agreement and
shall not be relieved of any of its Obligations hereunder, and the Agent and the
Lenders shall retain all their rights and remedies hereunder (including, without
limitation, the Agent's Liens in and all rights and remedies with respect to all
then existing and after-arising Collateral). From and after the Payment and
Termination Date, the Agent shall, at the reasonable request of the Borrower and
at the Borrower's sole cost and expense, execute and deliver to the Borrower
such instruments and agreements in form reasonably acceptable to the Agent, to
release the Agent's Liens in the Collateral. Such instruments and agreements
shall be without representation or warranty by, and without recourse to, the
Agent or any Lender.
ARTICLE 13
AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
13.1 No Waivers; Cumulative Remedies. No failure by the Agent or
any Lender to exercise any right, remedy, or option under this Agreement or any
other Loan Document or any present or future supplement thereto, or in any other
agreement between or among the Borrower and/or Parent or any of its other
Subsidiaries and the Agent and/or any Lender, or delay by the Agent or any
Lender in exercising the same, will operate as a waiver thereof. No waiver by
the Agent or any Lender will be effective unless it is in writing, and then only
to the extent specifically stated. No waiver by the Agent or the Lenders on any
occasion shall affect or diminish the Agent's and each Lender's rights
thereafter to require strict performance by the Borrower and Parent of any
provision of this Agreement. The Agent's and each Lender's rights under this
Agreement will be cumulative and not exclusive of any other right or remedy
which the Agent or any Lender may have.
13.2 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by the Borrower, Parent or any of its other
Subsidiaries therefrom, shall be effective unless the same shall be in writing
and signed by the Majority Lenders (or by the Agent at the written request of
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the Majority Lenders), the Borrower and Parent and then any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such waiver, amendment, or
consent shall, unless in writing and signed by all the Lenders, the Borrower and
Parent and acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Lender;
(b) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any other Loan
Document;
(c) reduce the principal of, or the rate of interest specified
herein on any Loan, or any fees or other amounts payable hereunder or under any
other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for the Lenders
or any of them to take any action hereunder;
(e) increase any of the percentages set forth in the
definition of Availability;
(f) amend this Section or any provision of this Agreement
providing for consent or other action by all Lenders;
(g) release Collateral other than as permitted by Section
14.12 or any guaranty of any Obligations;
(h) change the definitions of "Majority Lenders" or
"Required Lenders"; or
(i) decrease the amount set forth in Section 9.25;
and, provided further, that no amendment, waiver or consent shall, unless in
writing and signed by the Agent, affect the rights or duties of the Agent under
this Agreement or any other Loan Document.
13.3 Assignments; Participations. Any Lender may, with the written
consent of the Agent, assign and delegate to one or more assignees (provided
that no written consent of the Agent shall be required in connection with any
assignment and delegation by a Lender to an Affiliate of such Lender) (each an
"Assignee") all, or any ratable part of all, of the Loans, the Commitments and
the other rights and obligations of such Lender hereunder, in a minimum amount
of $10,000,000 or if less the entire amount of such Lender's Commitment and
Loans (provided, that unless an assignor Lender has assigned and delegated all
of its Commitment and Loans, no such assignment and/or delegation shall be
permitted unless, after giving effect to such assignment and/or delegation, such
assignor Lender retains a Commitment in a minimum amount of $10,000,000);
provided, however, that the Borrower, Parent and the Agent may continue to deal
solely and directly with such Lender in connection with the interest so assigned
to an Assignee until (i) written notice of such assignment, together with
payment instructions, addresses and related information with respect to the
Assignee, shall have been given to the
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Borrower (on behalf of the Borrower and Parent) and the Agent by such Lender and
the Assignee; (ii) such Lender and its Assignee shall have delivered to the
Borrower (on behalf of the Borrower and Parent) and the Agent an Assignment and
Acceptance in substantially the form of Exhibit G ("Assignment and Acceptance"),
together with the Term Loan Note subject to such assignment and (iii) the
assignor Lender or Assignee has paid to the Agent a processing fee in the amount
of $3,000.
(a) From and after the date that the Agent notifies the
assignor Lender that it has received an executed Assignment and Acceptance and
payment of the above-referenced processing fee, (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations,
including, but not limited to, the obligation to participate in Letters of
Credit and Credit Support have been assigned to it pursuant to such Assignment
and Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assignor Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).
(b) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (1) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document furnished pursuant hereto; (2) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, Parent or any of its other Subsidiaries or
the performance or observance by the Borrower, Parent or any of its other
Subsidiaries of any of its obligations under this Agreement or any other Loan
Document furnished pursuant hereto; (3) such Assignee confirms that it has
received a copy of this Agreement, together with such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (4) such Assignee will,
independently and without reliance upon the Agent, such assigning Lender 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; (5) such Assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and (6)
such Assignee agrees that it will perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
(c) Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance, this Agreement shall be deemed to
be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting
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adjustment of the Commitments arising therefrom. The Commitment allocated to
each Assignee shall reduce such Commitments of the assigning Lender pro tanto.
(d) Any Lender may at any time sell to one or more commercial
banks, financial institutions, or other Persons not Affiliates of the Borrower
(a "Participant") participating interests in any Loans, the Commitment of that
Lender and the other interests of that Lender (the "originating Lender")
hereunder and under the other Loan Documents; provided, however, that (i) the
originating Lender's obligations under this Agreement shall remain unchanged,
(ii) the originating Lender shall remain solely responsible for the performance
of such obligations, (iii) the Borrower, Parent and the Agent shall continue to
deal solely and directly with the originating Lender in connection with the
originating Lender's rights and obligations under this Agreement and the other
Loan Documents, and (iv) no Lender shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment to, or
any consent or waiver with respect to, this Agreement or any other Loan
Document, and all amounts payable by the Borrower hereunder shall be determined
as if such Lender had not sold such participation; except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the FRB or U.S. Treasury
Regulation 31 CFR ss. 203.14, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.
ARTICLE 14
THE AGENT
14.1 Appointment and Authorization. Each Lender hereby designates
and appoints Bank of America, N.A. as its Agent under this Agreement and the
other Loan Documents and each Lender hereby irrevocably authorizes the Agent to
take such action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. The
Agent agrees to act as such on the express conditions contained in this Article
14. The provisions of this Article 14 are solely for the benefit of the Agent
and the Lenders and the Borrower and Parent shall have no rights as a third
party beneficiary of any of the provisions contained herein. Notwithstanding any
provision to the contrary contained elsewhere in this Agreement or in any other
Loan Document, the Agent shall not have any duties or responsibilities, except
those expressly set forth herein, nor shall the Agent have or be deemed to have
any fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or
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otherwise exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with reference
to the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties. Except as expressly otherwise provided in this Agreement,
the Agent shall have and may use its sole discretion with respect to exercising
or refraining from exercising any discretionary rights or taking or refraining
from taking any actions which the Agent is expressly entitled to take or assert
under this Agreement and the other Loan Documents, including, without
limitation, (a) the determination of the applicability of ineligibility criteria
with respect to the calculation of the Availability, (b) the making of Agent
Advances pursuant to Section 2.2(i), and (c) the exercise of remedies pursuant
to Section 11.2, and any action so taken or not taken shall be deemed consented
to by the Lenders.
14.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
14.3 Liability of Agent. None of the Agent-Related Persons shall
(i) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by the Borrower or any
Subsidiary or Affiliate of the Borrower, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Loan Document, or
the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of the Borrower or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower or any
of the Borrower's Subsidiaries or Affiliates.
14.4 Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Borrower), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking
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or continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Majority
Lenders and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Lenders.
(a) For purposes of determining compliance with the conditions
specified in Section 10.3, each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Agent to such Lender for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to the Lender.
14.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Lenders, unless the Agent shall
have received written notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." The Agent will notify the Lenders of its
receipt of any such notice. The Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Majority Lenders in
accordance with Section 11; provided, however, that unless and until the Agent
has received any such request, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable.
14.6 Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Borrower and its Subsidiaries and Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries and Affiliates, and all
applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to the Borrower. Each Lender also represents that it will, independently
and without reliance upon any Agent-Related Person and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries and Affiliates. Except for
notices, reports and other documents expressly herein required to be furnished
to the Lenders by the Agent, the Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of the Borrower or any of its Subsidiaries or Affiliates which
may come into the possession of any of the Agent-Related Persons.
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14.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrower and without limiting the obligation of the Borrower to do so), pro rata
(in accordance with their respective Pro Rata Shares), from and against any and
all Indemnified Liabilities as such term is defined in Section 15.11; provided,
however, that no Lender shall be liable for the payment to the Agent-Related
Persons of any portion of such Indemnified Liabilities resulting solely from
such Person's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender shall reimburse the Agent upon demand for its ratable
share (in accordance with its Pro Rata Share) of any costs or out-of-pocket
expenses (including Attorney Costs) incurred by the 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,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Borrower. The undertaking in this Section 14.7 shall survive the payment
of all Obligations hereunder and the resignation or replacement of the Agent.
14.8 Agent in Individual Capacity. BofA and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Borrower and its
Subsidiaries and Affiliates as though BofA were not the Agent hereunder and
without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, BofA or its Affiliates may receive information
regarding the Borrower or its Affiliates (including information that may be
subject to confidentiality obligations in favor of the Borrower or such
Affiliate) and acknowledge that the Agent shall be under no obligation to
provide such information to them. With respect to its Loans, BofA shall have the
same rights and powers under this Agreement as any other Lender and may exercise
the same as though it were not the Agent, and the terms "Lender" and "Lenders"
include BofA in its individual capacity.
14.9 Successor Agent. The Agent may resign as Agent upon 30 days'
notice to the Lenders and the Borrower. If the Agent resigns under this
Agreement, the Majority Lenders shall appoint from among the Lenders a successor
agent for the Lenders. If no successor agent is appointed prior to the effective
date of the resignation of the Agent, the Agent may appoint, after consulting
with the Lenders and the Borrower, a successor agent from among the Lenders.
Upon the acceptance of its appointment as successor agent hereunder, such
successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent and the
retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 14 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement. If no successor agent
has accepted appointment as Agent by the date which is 30 days following a
retiring Agent's notice of resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Agent hereunder until such time, if any, as the Majority Lenders
appoint a successor agent as provided for above.
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14.10 Withholding Tax. If any Lender is a "foreign corporation,
partnership or trust" within the meaning of the Code and such Lender claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the Code, such Lender agrees with and in favor of the Agent, to deliver
to the Agent:
(i) if such Lender claims an exemption from, or
a reduction of, withholding tax under a United States tax treaty, a properly
completed IRS Form W-8BEN before the payment of any interest in the first
calendar year and before the payment of any interest in each third succeeding
calendar year during which interest may be paid under this Agreement;
(ii) if such Lender claims that interest paid
under this Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such Lender, two
properly completed and executed copies of IRS Form W-8ECI before the payment of
any interest is due in the first taxable year of such Lender and in each
succeeding taxable year of such Lender during which interest may be paid under
this Agreement; and
(iii) such other form or forms as may be required
under the Code or other laws of the United States as a condition to exemption
from, or reduction of, United States withholding tax.
Such Lender agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form W-8BEN
and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of the Borrower to such Lender, such
Lender agrees to notify the Agent of the percentage amount in which it is no
longer the beneficial owner of Obligations of the Borrower to such Lender. To
the extent of such percentage amount, the Agent will treat such Lender's IRS
Form W-8BEN as no longer valid.
(c) If any Lender claiming exemption from United States
withholding tax by filing IRS Form W-8ECI with the Agent sells, assigns, grants
a participation in, or otherwise transfers all or part of the Obligations of the
Borrower to such Lender, such Lender agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Lender
an amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section 14.10 are not delivered to the Agent, then the Agent may
withhold from any interest payment to such Lender not providing such forms or
other documentation an amount equivalent to the applicable withholding tax.
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(e) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify the Agent of a change in circumstances
which rendered the exemption from, or reduction of, withholding tax ineffective,
or for any other reason) such Lender shall indemnify the Agent and the Borrower
(but in the case of the Borrower only if the appropriate form was either not
delivered or not properly executed either at the time that such Lender first
became a Lender hereunder or at any later time if such form then could have been
legally delivered by such Lender) fully for all amounts paid, directly or
indirectly, by the Agent or the Borrower as tax or otherwise, including
penalties and interest, and including any taxes imposed by any jurisdiction on
the amounts payable to the Agent under this Section 14.10, together with all
costs and expenses (including Attorney Costs), and the Borrower shall not have
any obligation pursuant to Section 5.1 for such withholding taxes if the
appropriate form is not delivered under the circumstances set forth in the
second immediately preceding parenthetical. The obligation of the Lenders under
this subsection shall survive the payment of all Obligations and the resignation
or replacement of the Agent.
14.11 [Reserved.]
14.12 Collateral Matters. The Lenders hereby irrevocably authorize
the Agent, at its option and in its sole discretion, to release any Agent's Lien
upon any Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full by the Borrower of all Loans and reimbursement obligations
in respect of Letters of Credit and Credit Support, and, subject to Section
2.4(j), the termination of all outstanding Letters of Credit (whether or not any
of such obligations are due) and all other outstanding monetary Obligations;
(ii) constituting property being sold or disposed of if the Borrower certifies
to the Agent that the sale or disposition is made in compliance with Section 9.9
(and the Agent may rely conclusively on any such certificate, without further
inquiry); (iii) constituting property in which neither the Borrower nor any
other grantor of Collateral owned any interest at the time the Lien was granted
or at any time thereafter; (iv) constituting property leased to the Borrower or
any other grantor of Collateral under a lease which has expired or been
terminated in a transaction permitted under this Agreement; or (v) as and when
provided or required by the terms of the Intercreditor Agreement or Section 6.1.
Except as provided above, the Agent will not release any of the Agent's Liens
without the prior written authorization of the Lenders; provided that the Agent
may, in its discretion, release the Agent's Liens on Collateral valued in the
aggregate during the term of this Agreement not in excess of $5,000,000 without
the prior written authorization of the Lenders. Upon request by the Agent or the
Borrower at any time, the Lenders will confirm in writing the Agent's authority
to release any Agent's Liens upon particular types or items of Collateral
pursuant to this Section 14.12.
(a) Upon receipt by the Agent of any authorization required
pursuant to Section 14.12(a) from the Lenders of the Agent's authority to
release any Agent's Liens upon particular types or items of Collateral, and upon
at least five (5) Business Days' prior written request by the Borrower, the
Agent shall (and is hereby irrevocably authorized by the Lenders to) execute
such documents as may be necessary to evidence the release of the Agent's Liens
upon such Collateral; provided, however, that (i) the Agent shall not be
required to execute any such
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document on terms which, in the Agent's opinion, would expose the Agent to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Obligations or any Liens
(other than those expressly being released) upon (or obligations of the Borrower
or any other grantor of Collateral in respect of) all interests retained by the
Borrower or any other grantor of Collateral, including (without limitation) the
proceeds of any sale, all of which shall continue to constitute part of the
Collateral.
(b) The Agent shall have no obligation whatsoever to any of
the Lenders to assure that the Collateral exists or is owned by the Borrower or
any other grantor of Collateral or is cared for, protected or insured or has
been encumbered, or that the Agent's Liens have been properly or sufficiently or
lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to the Agent pursuant to any
of the Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, the Agent may act in
any manner it may deem appropriate, in its sole discretion given the Agent's own
interest in the Collateral in its capacity as one of the Lenders and that the
Agent shall have no other duty or liability whatsoever to any Lender as to any
of the foregoing.
14.13 Restrictions on Actions by Lenders; Sharing of Payments. Each
of the Lenders agrees that it shall not, without the express consent of all
Lenders, and that it shall, to the extent it is lawfully entitled to do so, upon
the request of all Lenders, set off against the Obligations or any guarantee
thereof, any amounts owing by such Lender to the Borrower or any other party
liable for any Obligations or any guarantee thereof or any grantor of any
Collateral or any accounts of the Borrower or such other party or grantor now or
hereafter maintained with such Lender. Each of the Lenders further agrees that
it shall not, unless specifically requested to do so by the Agent, take or cause
to be taken any action to enforce its rights under this Agreement or any other
Loan Document or against the Borrower or any other party liable for any
Obligations or any guarantee thereof or any grantor of any Collateral,
including, without limitation, the commencement of any legal or equitable
proceedings, to foreclose any Lien on, or otherwise enforce any security
interest in, any of the Collateral.
(a) If at any time or times any Lender shall receive (i) by
payment, foreclosure, setoff or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations of the Borrower to such Lender arising
under, or relating to, this Agreement or the other Loan Documents, except for
any such proceeds or payments received by such Lender from the Agent pursuant to
the terms of this Agreement, or (ii) payments from the Agent in excess of such
Lender's ratable portion of all such distributions by the Agent, such Lender
shall promptly (1) turn the same over to the Agent, in kind, and with such
endorsements as may be required to negotiate the same to the Agent, or in same
day funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable provisions of
this Agreement, or (2) purchase, without recourse or warranty, an undivided
interest and participation in the Obligations owed to the other Lenders so that
such excess payment received shall be applied ratably as among the Lenders in
accordance with their Pro Rata Shares; provided, however, that if all or part of
such excess payment received by the purchasing party is
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thereafter recovered from it, those purchases of participations shall be
rescinded in whole or in part, as applicable, and the applicable portion of the
purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.
14.14 Agency for Perfection. Each Lender hereby appoints each
other Lender as agent for the purpose of perfecting the Lenders' security
interest in assets which, in accordance with Article 9 of the UCC, can be
perfected only by possession. Should any Lender (other than the Agent) obtain
possession of any such Collateral, such Lender shall notify the Agent thereof,
and, promptly upon the Agent's request therefor shall deliver such Collateral to
the Agent or in accordance with the Agent's instructions.
14.15 Payments by Agent to Lenders. All payments to be made by the
Agent to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds to each Lender pursuant to wire transfer
instructions delivered in writing to the Agent on or prior to the Closing Date
(or if such Lender is an Assignee, on the applicable Assignment and Acceptance),
or pursuant to such other wire transfer instructions as each party may designate
for itself by written notice to the Agent. Concurrently with each such payment,
the Agent shall identify whether such payment (or any portion thereof)
represents principal, premium or interest on the Revolving Loans, Term Loans or
otherwise.
14.16 Concerning the Collateral and the Related Loan Documents. Each
Lender authorizes and directs the Agent to enter into this Agreement and the
other Loan Documents relating to the Collateral, for the ratable benefit of the
Agent and the Lenders. Each Lender agrees that any action taken by the Agent,
Majority Lenders or Required Lenders, as applicable, in accordance with the
terms of this Agreement or the other Loan Documents relating to the Collateral,
and the exercise by the Agent, the Majority Lenders, or the Required Lenders, as
applicable, of their respective powers set forth therein or herein, together
with such other powers that are reasonably incidental thereto, shall be binding
upon all of the Lenders.
14.17 Field Audit and Examination Reports; Disclaimer by Lenders. By
signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report (each, a "Report" and collectively, "Reports") prepared by
the Agent;
(b) expressly agrees and acknowledges that neither BofA nor
the Agent (i) makes any representation or warranty as to the accuracy of any
Report, or (ii) shall be liable for any information contained in any Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agent or other party performing
any audit or examination will inspect only specific information regarding the
Borrower or any of its Affiliates and will rely significantly upon the
Borrower's and/or such Affiliate's books and records, as well as on
representations of the Borrower's and/or such Affiliate's personnel;
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(d) agrees to keep all Reports confidential and strictly for
its internal use, and not to distribute except to its participants, or use any
Report in any other manner; and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold the
Agent and any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to the Borrower, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of the Borrower; and (ii) to pay and protect, and indemnify,
defend and hold the Agent and any such other Lender preparing a Report harmless
from and against, the claims, actions, proceedings, damages, costs, expenses and
other amounts (including, without limitation attorney costs) incurred by the
Agent and any such other Lender preparing a Report as the direct or indirect
result of any third parties who might obtain all or part of any Report through
the indemnifying Lender.
14.18 Relation Among Lenders. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Agent) authorized to act
for, any other Lender.
14.19 Sole Lead Arranger and Sole Book Manager. Bank of America
Securities LLC, as sole lead arranger and sole book manager, shall have no
obligations, liabilities, responsibilities or duties under this Agreement.
Without limiting the foregoing, Bank of America Securities LLC shall have no
fiduciary relationship with any Lender and each Lender acknowledges that it has
not relied, and will not rely, on Bank of America Securities LLC in deciding to
enter into this Agreement or in taking or not taking action hereunder.
ARTICLE 15
MISCELLANEOUS
15.1 Cumulative Remedies; No Prior Recourse to Collateral. The
enumeration herein of the Agent's and each Lender's rights and remedies is not
intended to be exclusive, and such rights and remedies are in addition to and
not by way of limitation of any other rights or remedies that the Agent and the
Lenders may have under the UCC or other applicable law. The Agent and the
Lenders shall have the right, in their sole discretion, to determine which
rights and remedies are to be exercised and in which order. The exercise of one
right or remedy shall not preclude the exercise of any others, all of which
shall be cumulative. The Agent and the Lenders may, without limitation, proceed
directly against the Borrower or any other Person to collect the Obligations
without any prior recourse to the Collateral. No failure to exercise and no
delay in exercising, on the part of the Agent or any Lender, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
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15.2 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
15.3 Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver. THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF
THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED
TO THE CONFLICT OF LAWS PROVISIONS PROVIDED THAT PERFECTION ISSUES WITH RESPECT
TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE CHOICE OR CONFLICT OF LAW
RULES SET FORTH IN ARTICLE 9 OF THE UCC) OF THE STATE OF NEW YORK; PROVIDED THAT
THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER, PARENT, THE
AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE BORROWER, PARENT,
THE AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. NOTWITHSTANDING THE FOREGOING: (1) THE AGENT AND THE LENDERS
SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OF THE
BORROWER, PARENT OR THEIR RESPECTIVE PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION THE AGENT OR THE LENDERS DEEM NECESSARY OR APPROPRIATE IN ORDER TO
REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS AND (2) EACH OF
THE PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN
THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE THOSE JURISDICTIONS.
(b) EACH OF THE BORROWER AND PARENT HEREBY WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO IT
AT ITS ADDRESS SET FORTH IN SECTION 15.8 AND SERVICE SO MADE SHALL BE DEEMED TO
BE COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE
U.S. MAILS. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF AGENT OR THE
LENDERS TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.
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(c) No provision of this Agreement shall limit the right of
the Agent or the Lenders to exercise self-help remedies such as setoff,
foreclosure against or sale of any real or personal property collateral or
security, or obtaining provisional or ancillary remedies from a court of
competent jurisdiction before, after, or during the pendency of any arbitration
or other proceeding. The exercise of a remedy does not waive the right of either
party to resort to arbitration or reference. At the Agent's option, foreclosure
under a deed of trust or mortgage may be accomplished either by exercise of
power of sale under the deed of trust or mortgage or by judicial foreclosure.
15.4 WAIVER OF JURY TRIAL.THE BORROWER, PARENT, THE LENDERS AND THE
AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE
BORROWER, PARENT, THE LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR
CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING
THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL
BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
15.5 Survival of Representations and Warranties. All of the
Borrower's and Parent's representations and warranties contained in this
Agreement shall survive the execution, delivery, and acceptance thereof by the
parties, notwithstanding any investigation by the Agent or the Lenders or their
respective agents.
15.6 Other Security and Guaranties. The Agent may, without notice
or demand and without affecting the Borrower's or Parent's obligations
hereunder, from time to time: (a) take from any Person and hold collateral
(other than the Collateral) for the payment of all or any part of the
Obligations and exchange, enforce or release such collateral or any part
thereof; and (b) accept and hold any endorsement or guaranty of payment of all
or any part of the Obligations and release or substitute any such endorser or
guarantor, or any Person who has given any Lien in any other collateral as
security for the payment of all or any part of the Obligations, or any other
Person in any way obligated to pay all or any part of the Obligations.
15.7 Fees and Expenses. The Borrower agrees to pay to the Agent,
for its benefit, on demand, all reasonable costs and expenses that Agent pays or
incurs in connection with the negotiation, preparation, consummation,
administration, syndication, enforcement, and
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termination of this Agreement, including, without limitation or duplication: (a)
Attorney Costs; (b) reasonable costs and expenses (including reasonable
attorneys' and paralegals' fees and disbursements which shall include the
reasonable allocated costs of Agent's in-house counsel fees and disbursements)
for any amendment, supplement, waiver, consent, or subsequent closing in
connection with the Loan Documents and the transactions contemplated thereby;
(c) costs and expenses of lien and title searches and title insurance; (d)
taxes, fees and other charges for recording the Mortgages, filing financing
statements and continuations, and other actions to perfect, protect, and
continue the Agent's Liens (including costs and expenses paid or incurred by the
Agent in connection with the consummation of this Agreement); (e) sums paid or
incurred to pay any amount or take any action required of the Borrower, Parent
or any of its other Subsidiaries under the Loan Documents that the Borrower,
Parent or such other Subsidiary fails to pay or take; (f) costs of appraisals,
inspections, and verifications of the Collateral, including, without limitation,
travel, lodging, and meals for inspections of the Collateral and the Borrower's
operations by the Agent plus the Agent's then customary charge for field
examinations and audits and the preparation of reports thereof (such charge is
currently $750 per day (or portion thereof) for each agent or employee of the
Agent with respect to each field examination or audit) (such field examinations
and audits to be conducted not more often than three times each calendar year
unless an Event of Default shall have occurred); (g) costs and expenses of
forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining Payment Accounts and lock boxes; (h) costs and
expenses of preserving and protecting the Collateral; and (i) costs and expenses
(including attorneys' and paralegals' fees and disbursements which shall include
the allocated cost of Agent's in-house counsel fees and disbursements) paid or
incurred to obtain payment of the Obligations, enforce the Agent's Liens, sell
or otherwise realize upon the Collateral, and otherwise enforce the provisions
of the Loan Documents, or to defend any claims made or threatened against the
Agent or any Lender arising out of the transactions contemplated hereby
(including without limitation, preparations for and consultations concerning any
such matters). The foregoing shall not be construed to limit any other
provisions of the Loan Documents regarding costs and expenses to be paid by the
Borrower. All of the foregoing costs and expenses shall be charged to the
Borrower's Loan Account as Revolving Loans as described in Section 4.7.
15.8 Notices. Except as otherwise provided herein, all notices,
demands and requests that any party is required or elects to give to any other
shall be in writing, or by a telecommunications device capable of creating a
written record, and any such notice shall become effective (a) upon personal
delivery thereof, including, but not limited to, delivery by overnight mail and
courier service, (b) four (4) days after it shall have been mailed by United
States mail, first class, certified or registered, with postage prepaid, or (c)
in the case of notice by such a telecommunications device, when properly
transmitted, in each case addressed to the party to be notified as follows:
136
If to the Agent or to BofA:
Bank of America, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Division Manager
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Bank of America, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
If to any other Lender: at its address below its signature on the signature
pages hereof
If to the Borrower or Parent:
Sweetheart Cup Company Inc.
or Sweetheart Holdings Inc. (as appropriate)
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Sweetheart Cup Company Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel and Corporate Secretary
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
-and-
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as each party may designate for itself by like notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other
137
communication to the persons designated above to receive copies shall not
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication.
15.9 Waiver of Notices. Unless otherwise expressly provided herein,
each of the Borrower and Parent waives presentment, protest and notice of demand
or dishonor and protest as to any instrument, notice of intent to accelerate the
Obligations and notice of acceleration of the Obligations, as well as any and
all other notices to which it might otherwise be entitled. No notice to or
demand on the Borrower or Parent which the Agent or any Lender may elect to give
shall entitle the Borrower or Parent to any or further notice or demand in the
same, similar or other circumstances.
15.10 Binding Effect. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective representatives,
successors, and assigns of the parties hereto; provided, however, that no
interest herein may be assigned by the Borrower or Parent without prior written
consent of the Agent and each Lender. The rights and benefits of the Agent and
the Lenders hereunder shall, if such Persons so agree, inure to any party
acquiring any interest in the Obligations or any part thereof.
15.11 Indemnity of the Agent and the Lenders by the Borrower. The
Borrower agrees to defend, indemnify and hold the Agent-Related Persons, and
each Lender and each of its respective officers, directors, employees, counsel,
agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements (including
Attorney Costs) of any kind or nature whatsoever which may at any time
(including at any time following repayment of the Loans and the termination,
resignation or replacement of the Agent or replacement of any Lender) be imposed
on, incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement or any document contemplated by or referred to
herein, or the transactions contemplated hereby, or any action taken or omitted
by any such Person under or in connection with any of the foregoing, including
with respect to any investigation, litigation or proceeding (including any
Insolvency Proceeding or appellate proceeding) related to or arising out of this
Agreement, any other Loan Document, or the Loans or the use of the proceeds
thereof, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"); provided, that the
Borrower shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities to the extent resulting from the willful
misconduct of such Indemnified Person. The agreements in this Section shall
survive payment of all other Obligations.
15.12 Limitation of Liability. No claim may be made by the Borrower,
Parent, any Lender or other Person against the Agent, any Lender, or the
affiliates, directors, officers, officers, employees, or agents of any of them
for any special, indirect, consequential or punitive damages in respect of any
claim for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement or any other Loan
Document, or any act, omission or event occurring in connection therewith, and
the Borrower, Parent and each Lender hereby waive, release and agree not to ▇▇▇
upon any claim for such damages, whether or not accrued and whether or not know
or suspected to exist in its favor.
138
15.13 Final Agreement. This Agreement and the other Loan Documents
are intended by the Borrower, Parent, the Agent and the Lenders to be the final,
complete, and exclusive expression of the agreement between them. This Agreement
supersedes any and all prior oral or written agreements relating to the subject
matter hereof (including, without limitation, the terms of the Original Credit
Agreement, which terms were amended and restated in their entirety pursuant to
the First Amended and Restated Loan and Security Agreement). Further, the terms
of the Borrower Security Agreement, the Parent Security Agreement and each of
the Amended and Restated Borrower Intellectual Property Agreement and the
Amended and Restated Holdings Intellectual Property Agreement, each dated as of
the Original Closing Date, between the Borrower or Parent, respectively, and the
Agent supersede in their entirety the terms of the predecessors thereof, which
were amended and restated (such amendments and restatements not affecting the
security interests and liens created under the predecessor agreements (which
shall remain in full force and effect) or the time of creation thereof, except
as modified by such amendments and restatements). No modification, rescission,
waiver, release, or amendment of any provision of this Agreement or any other
Loan Document shall be made, except by a written agreement signed by the
Borrower and Parent and a duly authorized officer of each of the Agent and the
requisite Lenders.
15.14 Counterparts. This Agreement may be executed in any number of
counterparts, and by the Agent, each Lender, the Borrower and Parent in separate
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement.
15.15 Captions. The captions contained in this Agreement are for
convenience of reference only, are without substantive meaning and should not be
construed to modify, enlarge, or restrict any provision.
15.16 Right of Setoff. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Borrower or Parent, any such notice being waived by
the Borrower and Parent to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held by, and other indebtedness at any time owing by, such
Lender to or for the credit or the account of the Borrower or Parent against any
and all Obligations owing to such Lender, now or hereafter existing,
irrespective of whether or not the Agent or such Lender shall have made demand
under this Agreement or any Loan Document and although such Obligations may be
contingent or unmatured. Each Lender agrees promptly to notify the Borrower or
Parent, as appropriate, and the Agent after any such set-off and application
made by such Lender; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application. NOTWITHSTANDING
THE FOREGOING, NO LENDER SHALL EXERCISE ANY RIGHT OF SET-OFF, BANKER'S LIEN, OR
THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF THE BORROWER OR PARENT HELD
OR MAINTAINED BY SUCH LENDER WITHOUT THE PRIOR WRITTEN UNANIMOUS CONSENT OF THE
LENDERS.
15.17 Credit Agreement and Conflicts. This Agreement is and is
hereby deemed to be a "Credit Agreement" for all purposes of the Intercreditor
Agreement. In the event of a conflict
139
between any of the terms and provisions of this Agreement and any of the terms
and provisions of the Borrower Security Agreement, the terms and provisions of
this Agreement shall control.
15.18 Intercreditor Agreement. Error! Bookmark not defined.
EACH LENDER HEREBY GRANTS TO THE AGENT ALL REQUISITE AUTHORITY TO EXECUTE AND
DELIVER THE INTERCREDITOR AGREEMENT (OR OTHERWISE TO BECOME BOUND THEREBY) AND
TO BIND THE LENDERS THERETO BY THE AGENT'S EXECUTION AND DELIVERY THEREOF OR BY
THE AGENT OTHERWISE BECOMING BOUND THEREBY, AND NO FURTHER CONSENT OR APPROVAL
ON THE PART OF THE LENDERS IS OR WILL BE REQUIRED IN CONNECTION WITH THE
EXECUTION, DELIVERY AND PERFORMANCE OF THE INTERCREDITOR AGREEMENT.
(a) EACH LENDER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT
AND THE OTHER SECURITY DOCUMENTS (INCLUDING THE ALLOCATION OF PROCEEDS OF
COLLATERAL) ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT.
15.19 Amendments to Certain Security Documents. The parties
hereto agree that the following Security Documents are amended as provided
below:
(a) Each of the Parent Security Agreement and the Borrower
Security Agreement is amended by (x) replacing the term "Senior Note Priority
Collateral" in each place where it appears in such agreements with the term
"Secured Sale/Leaseback Collateral," (y) replacing the term "Senior Secured Note
Security Documents" in each place where it appears in such agreements with the
term "Secured Sale/Leaseback Security Documents" and (z) replacing the term
"Intercreditor Agreement" in each place where it appears in such agreements with
the term "Intercreditor Agreement" as defined herein.
(b) Each of the Amended and Restated Borrower Intellectual
Property Agreement, dated as of October 24, 1997, between the Borrower and the
Agent and the Amended and Restated Holdings Intellectual Property Agreement,
dated as of October 24, 1997, between Parent and Agent is amended by (x)
replacing the term "Intercreditor Agreement" in each place where it appears in
such agreements with the term "Intercreditor Agreement" as defined herein and
(y) adding the phrase "(or with respect to any Trademarks not constituting
Secured Sale/Leaseback Collateral, ending on the Payment and Termination Date)"
immediately after the phrase "ending on the date which occurs six months
thereafter" in the second sentence of Section 3.1 thereof.
15.20 Ratification and Confirmation. Each of the Borrower and Parent
hereby ratifies and confirms its grant of security interests and liens in the
Collateral (including, without limitation, any and all Collateral granted under
the Existing Loan and Security Agreement and the other Loan Documents (as
therein defined)) in which it has rights and confirms and agrees that such
Collateral secures any and all of the Obligations, including, without
limitation, the Revolving
140
Loans and Term Loans. Parent hereby ratifies and confirms its guarantee pursuant
to the Parent Guaranty of any and all Obligations, including, without
limitation, the Revolving Loans and Term Loans. All Obligations outstanding
under the Existing Loan and Security Agreement immediately prior to the
amendment and restatement thereof as contemplated hereby (such Obligations, the
"Existing Loan and Security Agreement Obligations") shall, unless and until
paid, continue to remain outstanding under this Agreement and shall not
constitute new Obligations incurred by the Borrower on or after the Closing
Date. The Borrower hereby confirms that all Existing Loan and Security Agreement
Obligations are due and owing without offset, defense, counterclaim or
recoupment of any kind or nature. Except as herein otherwise agreed, each of the
Security Documents is ratified and confirmed in accordance with its terms and
shall continue in full force and effect.
141
IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
"BORROWER"
SWEETHEART CUP COMPANY INC.
By:
---------------------
Name:
Title:
"PARENT"
SWEETHEART HOLDINGS INC.
By:
---------------------
Name:
Title:
"AGENT"
BANK OF AMERICA, N.A.,
as the Agent
By:
---------------------
Name:
Title:
142
"LENDERS"
Commitment: $85,000,000 BANK OF AMERICA, N.A.,
($77,765,957.46 after Term Loans as a Lender
repaid in full)
Pro Rata Share as of
Closing Date: 36.1702128% By:
----------------------
Name:
Title:
Commitment: $50,000,000 CONGRESS FINANCIAL CORPORATION,
($45,744,680.85 after Term Loans as a Lender
repaid in full)
Pro Rata Share as of
Closing Date: 21.2765957% By:
----------------------
Name:
Title:
Address: 1133 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Telecopy No.: (212) ___-____
Commitment: $50,000,000 IBJ WHITEHALL BUSINESS CREDIT
($45,744,680.85 after Term Loans CORPORATION, as a Lender
repaid in full)
Pro Rata Share as of
Closing Date: 21.2765957% By:
----------------------
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Telecopy No.: (212) ___-____
143
Commitment: $25,000,000 TRANSAMERICA BUSINESS CAPITAL
($22,872,340.42 after Term Loans CORPORATION, as a Lender
repaid in full)
Pro Rata Share as of
Closing Date: 10.6382979% By:
----------------------
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇-▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Telecopy No.: (___) ___-____
Commitment: $25,000,000 PNC BANK, NATIONAL ASSOCIATION,
($22,872,340.42 after Term Loans as a Lender
repaid in full)
Pro Rata Share as of
Closing Date: 10.6382979% By:
----------------------
Name:
Title:
Address: ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
144
