Exhibit 10.7
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REVOLVING CREDIT, TERM LOAN AND GUARANTY AGREEMENT
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Among
FEDERAL-MOGUL CORPORATION AND CERTAIN OF ITS SUBSIDIARIES,
Debtors and Debtors-in-Possession under Chapter 11 of the Bankruptcy Code,
as Borrowers,
and
THE LENDERS PARTY HERETO,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
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Dated as of October 1, 2001
REVOLVING CREDIT, TERM LOAN AND GUARANTY AGREEMENT
TABLE OF CONTENTS
Page No.
SECTION 1. DEFINITIONS..................................................... 2
SECTION 1.1 Defined Terms............................................. 2
SECTION 1.2 Terms Generally........................................... 26
SECTION 2. AMOUNT AND TERMS OF CREDIT...................................... 26
SECTION 2.1 Commitment of the Lenders................................. 26
SECTION 2.2 Availability of Commitment; Borrowing Base................ 27
SECTION 2.3 Letters of Credit......................................... 27
SECTION 2.4 Issuance.................................................. 29
SECTION 2.5 Nature of Letter of Credit Obligations Absolute........... 30
SECTION 2.6 Making of Loans........................................... 30
SECTION 2.7 Repayment of Loans and Unreimbursed Draws; Evidence of
Debt...................................................... 31
SECTION 2.8 Interest on Loans......................................... 32
SECTION 2.9 Default Interest.......................................... 32
SECTION 2.10 Optional Termination or Reduction of Commitment........... 33
SECTION 2.11 Alternate Rate of Interest................................ 33
SECTION 2.12 Refinancing of Loans...................................... 33
SECTION 2.13 Mandatory Prepayment; Commitment Termination.............. 34
SECTION 2.14 Optional Prepayment of Loans; Reimbursement of Lenders.... 36
SECTION 2.15 Reserve Requirements; Change in Circumstances............. 37
SECTION 2.16 Change in Legality........................................ 38
SECTION 2.17 Pro Rata Treatment, etc................................... 39
SECTION 2.18 Taxes..................................................... 39
SECTION 2.19 Certain Fees.............................................. 42
SECTION 2.20 Commitment Fee............................................ 42
SECTION 2.21 Letter of Credit Fees..................................... 42
SECTION 2.22 Nature of Fees............................................ 42
SECTION 2.23 Priority and Liens........................................ 42
SECTION 2.24 Use of Cash Collateral.................................... 44
SECTION 2.25 Right of Set-Off.......................................... 44
SECTION 2.26 Security Interest in Letter of Credit Account............. 45
SECTION 2.27 Payment of Obligations.................................... 45
SECTION 2.28 No Discharge; Survival of Claims.......................... 45
SECTION 2.29 Replacement of Certain Lenders............................ 45
SECTION 3. REPRESENTATIONS AND WARRANTIES.................................. 46
SECTION 3.1 Organization and Authority................................ 46
i
SECTION 3.2 Due Execution............................................. 47
SECTION 3.3 Statements Made........................................... 47
SECTION 3.4 Financial Statements...................................... 47
SECTION 3.5 Ownership................................................. 48
SECTION 3.6 Liens..................................................... 48
SECTION 3.7 Compliance with Law....................................... 48
SECTION 3.8 Insurance................................................. 49
SECTION 3.9 The Orders................................................ 49
SECTION 3.10 Use of Proceeds........................................... 49
SECTION 3.11 Litigation................................................ 49
SECTION 3.12 Intellectual Property..................................... 49
SECTION 3.13 Intercompany Loans to Foreign Subsidiaries................ 49
SECTION 4. CONDITIONS OF LENDING........................................... 50
SECTION 4.1 Conditions Precedent to Initial Loan and Initial Letter
of Credit................................................. 50
SECTION 4.2 Conditions Precedent to Each Loan and Each Letter of
Credit.................................................... 52
SECTION 5. AFFIRMATIVE COVENANTS........................................... 53
SECTION 5.1 Financial Statements, Reports, etc........................ 54
SECTION 5.2 Existence................................................. 57
SECTION 5.3 Insurance................................................. 57
SECTION 5.4 Obligations and Taxes..................................... 57
SECTION 5.5 Notice of Event of Default, etc........................... 58
SECTION 5.6 Access to Books and Records............................... 58
SECTION 5.7 Maintenance of Concentration Account...................... 59
SECTION 5.8 Borrowing Base Certificate................................ 59
SECTION 5.9 Business Plan............................................. 59
SECTION 5.10 Restructuring Officer..................................... 60
SECTION 5.11 Collateralization of Intercompany Loans................... 60
SECTION 6. NEGATIVE COVENANTS.............................................. 60
SECTION 6.1 Liens..................................................... 61
SECTION 6.2 Merger, etc............................................... 61
SECTION 6.3 Indebtedness.............................................. 61
SECTION 6.4 Capital Expenditures...................................... 61
SECTION 6.5 EBITDA.................................................... 62
SECTION 6.6 Guarantees and Other Liabilities.......................... 63
SECTION 6.7 Chapter 11 Claims......................................... 63
SECTION 6.8 Dividends; Capital Stock.................................. 63
SECTION 6.9 Transactions with Affiliates.............................. 63
SECTION 6.10 Investments, Loans and Advances........................... 63
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SECTION 6.11 Disposition of Assets..................................... 64
SECTION 6.12 Nature of Business........................................ 64
SECTION 6.13 Transactions among Borrowers.............................. 64
SECTION 6.14 Right of Subrogation among Borrowers...................... 65
SECTION 7. EVENTS OF DEFAULT............................................... 65
SECTION 7.1 Events of Default......................................... 65
SECTION 8. THE ADMINISTRATIVE AGENT........................................ 69
SECTION 8.1 Administration by Administrative Agent.................... 69
SECTION 8.2 Advances and Payments..................................... 70
SECTION 8.3 Sharing of Setoffs........................................ 70
SECTION 8.4 Agreement of Required Lenders............................. 70
SECTION 8.5 Liability of Administrative Agent......................... 71
SECTION 8.6 Reimbursement and Indemnification......................... 71
SECTION 8.7 Rights of Administrative Agent............................ 72
SECTION 8.8 Independent Lenders....................................... 72
SECTION 8.9 Notice of Transfer........................................ 72
SECTION 8.10 Successor Administrative Agent............................ 72
SECTION 9. GUARANTY........................................................ 73
SECTION 9.1 Guaranty.................................................. 73
SECTION 9.2 No Impairment of Guaranty................................. 74
SECTION 9.3 Subrogation............................................... 74
SECTION 10. MISCELLANEOUS................................................... 74
SECTION 10.1 Notices................................................... 74
SECTION 10.2 Survival of Agreement, Representations and Warranties,
etc....................................................... 75
SECTION 10.3 Successors and Assigns.................................... 75
SECTION 10.4 Confidentiality........................................... 77
SECTION 10.5 Expenses.................................................. 78
SECTION 10.6 Indemnity................................................. 78
SECTION 10.7 Choice of Law............................................. 78
SECTION 10.8 No Waiver................................................. 78
SECTION 10.9 Extension of Maturity..................................... 79
SECTION 10.10 Amendments, etc........................................... 79
SECTION 10.11 Severability.............................................. 80
SECTION 10.12 Headings.................................................. 80
SECTION 10.13 Execution in Counterparts................................. 80
SECTION 10.14 Prior Agreements.......................................... 80
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SECTION 10.15 Further Assurances........................................ 80
SECTION 10.16 Waiver of Jury Trial...................................... 81
SECTION 10.17 Subordination of Intercompany Indebtedness................ 81
SECTION 10.18 Certain Post Closing Matters.............................. 82
SECTION 10.19 Foreign Subsidiaries...................................... 83
iv
Annex A-1 - Tranche A Commitment Amounts
Annex A-2 - Tranche B Commitment Amounts
Exhibit A-1 - Form of Interim Order
Exhibit A-2 - Form of Final Order
Exhibit B - Form of Security and Pledge Agreement
Exhibit C - Form of Borrowing Base Certificate
Exhibit D - Form of Opinion of Counsel
Exhibit E - Form of Assignment and Acceptance
Schedule 3.5 - Subsidiaries
Schedule 3.6 - Liens
Schedule 3.12 - Intellectual Property
Schedule 6.3 - Existing Indebtedness of Foreign Subsidiaries
Schedule 6.11 - Surplus Real Estate Assets Eligible For Sale
Schedule 6.13 - Borrower Transaction Restrictions
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REVOLVING CREDIT, TERM LOAN AND GUARANTY AGREEMENT
Dated as of October 1, 2001
REVOLVING CREDIT, TERM LOAN AND GUARANTY AGREEMENT, dated as of October
1, 2001, among FEDERAL-MOGUL CORPORATION, a Michigan corporation ("Parent"),
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each of the direct and indirect Domestic Subsidiaries of the Parent party to
this Agreement (each individually a "Borrower" and collectively the
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"Borrowers"), each of which is a debtor and debtor-in-possession in a case
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pending under Chapter 11 of the Bankruptcy Code (the cases of the Borrowers,
each a "Case" and collectively, the "Cases"), THE CHASE MANHATTAN BANK, a New
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York banking corporation ("Chase"), and each of the other commercial banks,
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finance companies, insurance companies or other financial institutions or funds
from time to time party hereto (together with Chase, the "Lenders"), ▇.▇. ▇▇▇▇▇▇
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SECURITIES, INC., as lead arranger and book manager, and THE CHASE MANHATTAN
BANK, as administrative agent (in such capacity, the "Administrative Agent") for
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the Lenders.
INTRODUCTORY STATEMENT
WHEREAS, on October 1, 2001, the Borrowers filed voluntary petitions
with the Bankruptcy Court initiating the Cases and have continued in the
possession of their assets and in the management of their businesses pursuant to
Sections 1107 and 1108 of the Bankruptcy Code; and
WHEREAS, the Borrowers have applied to the Lenders for a revolving
credit, letter of credit and term loan facility in an aggregate principal amount
not to exceed $675,000,000, and initially not to exceed $450,000,000 (subject to
the terms and conditions of this Agreement), composed of two separate tranches
as follows: (i) Tranche A shall be a revolving credit commitment of $525,000,000
with a sublimit of $75,000,000 for standby and documentary Letters of Credit to
be issued for purposes satisfactory to the Administrative Agent, and (ii)
Tranche B shall be a term loan commitment of $150,000,000; and
WHEREAS, the proceeds of the Revolving Loans and the Term Loans will be
used for (i) working capital; (ii) other general corporate purposes of the
Borrowers; (iii) as may be necessary, repurchase of accounts receivable in
connection with the termination of the Prepetition Securitization Facilities;
and (iv) payment of any related transaction costs, fees and expenses, all in
accordance with the Budget and as provided for herein; and
WHEREAS, to provide for the repayment of the Loans, the reimbursement
of any draft drawn under a Letter of Credit and the payment of the other
obligations of the Borrowers hereunder and under the other Loan Documents
(including, without limitation, the Obligations of the Borrowers under Section
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6.3(v)), the Borrowers will provide to the Administrative Agent and the Lenders
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the following (each as more fully described herein):
(a) an allowed Superpriority Claim;
(b) a perfected first priority Lien, pursuant to Section 364(c)(2)
of the Bankruptcy Code, upon all unencumbered property of the Borrowers and on
all cash and cash equivalents in the Letter of Credit Account, provided that
following the Termination Date, amounts in the Letter of Credit Account shall
not be subject to the Carve-Out hereinafter referred to;
(c) a perfected Lien, pursuant to Section 364(c)(3) of the
Bankruptcy Code, upon all property of the Borrowers that is subject to valid and
perfected Permitted Liens in existence on the Filing Date (including the
perfected liens on the stock of certain subsidiaries of the Parent ("Stock
Liens") in favor of (x) the trustee for the holders of Indebtedness of the
Parent under the Indentures, and (y) the holders of obligations of the Borrowers
under the Existing Agreements) or that is subject to valid Permitted Liens in
existence on the Filing Date that are perfected subsequent to the Filing Date as
permitted by Section 546(b) of the Bankruptcy Code;
(d) a perfected first priority priming Lien, pursuant to Section
364(d)(1) of the Bankruptcy Code, upon all property of the Borrowers (including,
without limitation, inventory, accounts receivable, rights under license
agreements, property, plant and equipment, interests in leaseholds), that is
subject to the existing Liens (the "Primed Liens", it being understood that the
Stock Liens shall not be primed or constitute part of the Primed Liens) which
secure (i) on a pari passu basis the obligations of the Borrowers to the lenders
party to the Existing Credit Agreement and the obligations of the Borrowers in
connection with the Surety Bonds, and (ii) other obligations or indebtedness of
the Borrowers pursuant to the Existing Agreements other than the Existing Credit
Agreement and the Surety Bonds, which first priority priming Liens in favor of
the Administrative Agent and the Lenders shall be senior in all respects to all
of the Primed Liens; and
(e) a guaranty from the Borrowers of the due and punctual payment
and performance of the obligations of any Foreign Subsidiaries in respect of any
letters of credit issued hereunder for the account thereof; and
WHEREAS, all of the claims granted hereunder in the Cases to the
Administrative Agent and the Lenders shall be subject to the Carve-Out to the
extent provided in Section 2.23.
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Accordingly, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
SECTION 1.1 Defined Terms.
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As used in this Agreement, the following terms shall have the meanings
specified below:
"ABR Loan" shall mean any Loan bearing interest at a rate determined by
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reference to the Alternate Base Rate in accordance with the provisions of
Section 2.
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"Account" shall mean any right to payment for goods sold in the
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ordinary course of business, regardless of how such right is evidenced and
whether or not it has been earned by performance.
"Account Debtor" means, with respect to any Account, the obligor with
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respect to such Account.
"Additional Credit" shall have the meaning given such term in Section
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4.2(e).
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"Adjusted Eligible Accounts Receivable" shall mean Eligible Accounts
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Receivable, minus the Dilution Reserve.
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"Adjusted LIBOR Rate" shall mean, with respect to any Eurodollar
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Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the quotient of (a) the LIBOR
Rate in effect for such Interest Period divided by (b) a percentage (expressed
as a decimal) equal to 100% minus Statutory Reserves. For purposes hereof, the
term "LIBOR Rate" shall mean the rate (rounded upwards, if necessary, to the
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next 1/16 of 1%) at which dollar deposits approximately equal in principal
amount to such Eurodollar Borrowing and for a maturity comparable to such
Interest Period are offered to the principal London office of the Administrative
Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two (2) Business Days prior to the
commencement of such Interest Period.
"Administrative Agent" shall have the meaning set forth in the
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Introduction.
"Affected Lender" shall have the meaning given such term in Section
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2.29.
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"Affiliate" shall mean, as to any Person, any other Person which,
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directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, a Person (a
"Controlled Person") shall be deemed to be "controlled by" another Person (a
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"Controlling Person") if the Controlling Person possesses, directly or
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indirectly, power to direct or cause the direction of the management and
policies of the Controlled Person whether by contract or otherwise.
"Agreement" shall mean this Revolving Credit, Term Loan and Guaranty
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Agreement, as the same may from time to time be amended, restated, modified or
supplemented.
"Alternate Base Rate" shall mean, for any day, a rate per annum
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(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such
day plus 1% and (c) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. For purposes hereof, "Prime Rate" shall mean the rate of interest per
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annum publicly announced from time to time by the Administrative Agent as its
prime rate in effect at its principal office in New York City; each change in
the Prime Rate shall be effective on the date such change is publicly announced.
"Base CD Rate" shall mean the sum of (a) the quotient of (i) the Three-Month
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Secondary CD Rate divided by (ii) a percentage expressed as a decimal equal to
100% minus Statutory Reserves and (b) the Assessment Rate. "Three-Month
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Secondary CD Rate" shall mean, for any day, the secondary market rate for
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three-month certificates of deposit reported as being in effect on such day (or,
if such day shall not be a Business Day, the next preceding Business Day) by the
Board through the public information telephone line of the Federal Reserve Bank
of New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day), or, if such rate shall not be so reported on such day or
such next preceding Business Day, the average of the secondary market quotations
for three-month certificates of deposit of major money center banks in New York
City received at approximately 10:00 a.m., New York City time, on such day (or,
if such day shall not be a Business Day, on the next
3
preceding Business Day) by the Administrative Agent from three New York City
negotiable certificate of deposit dealers of recognized standing selected by it.
"Federal Funds Effective Rate" shall mean, for any day, the weighted average of
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the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent
from three Federal funds brokers of recognized standing selected by it. If for
any reason the Administrative Agent shall have determined (which determination
shall be conclusive absent manifest error) that it is unable to ascertain the
Base CD Rate or the Federal Funds Effective Rate or both for any reason,
including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms hereof, the Alternate Base
Rate shall be determined without regard to clause (b) or (c), or both, of the
first sentence of this definition, as appropriate, until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate shall be effective on the effective date of such
change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate, respectively.
"Amounts" shall have the meaning given such term in Section 2.18(a).
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"Assessment Rate" shall mean for any date the annual rate (rounded
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upwards, if necessary, to the next 1/100 of 1%) most recently estimated by the
Administrative Agent as the then current net annual assessment rate that will be
employed in determining amounts payable by the Administrative Agent to the
Federal Deposit Insurance Corporation (or any successor) for insurance by such
Corporation (or any successor) of time deposits made in dollars at the
Administrative Agent's domestic offices.
"Asset Sale" shall mean a sale, lease or sub-lease (as lessor or
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sublessor), sale and leaseback, assignment, conveyance, transfer or other
disposition to, or any exchange of property with, any Person (other than a
Borrower), in one transaction or series of transactions, of all or any part of
(i) the Borrowers' or any of their Subsidiaries' businesses, assets or
properties of any kind, whether real, personal, or mixed and whether tangible or
intangible, whether now owned or hereafter acquired, including, without
limitation, the capital stock of any of the Borrowers (other than Parent) or
their Subsidiaries in each case other than (x) Inventory, including scrap or
obsolete Inventory, sold in the ordinary course of business and (y) sales of
assets for aggregate consideration of less than $1,000,000 with respect to any
transaction or series of related transactions.
"Assignment and Acceptance" shall mean an assignment and acceptance
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entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, substantially in the form of Exhibit E.
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"Available Commitment" shall have the meaning given such term in
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Section 2.2.
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"Bankruptcy Code" shall mean The Bankruptcy Reform Act of 1978, as
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heretofore and hereafter amended, and codified as 11 U.S.C. Section 101 et seq.
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4
"Bankruptcy Court" shall mean the United States Bankruptcy Court for
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the District of Delaware or any other court having jurisdiction over the Cases
from time to time.
"Board" shall mean the Board of Governors of the Federal Reserve System
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of the United States.
"Borrower" and "Borrowers" shall have the respective meanings set forth
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in the Introduction.
"Borrowing" shall mean the incurrence of Revolving or Term Loans of a
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single Type made from all the Tranche A or Tranche B Lenders, as applicable, on
a single date and having, in the case of Eurodollar Loans, a single Interest
Period (with any ABR Loan made pursuant to Section 2.16 being considered a part
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of the related Borrowing of Eurodollar Loans).
"Borrowing Base" shall mean, at the time of any determination, an
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amount equal to the sum, without duplication, of (a) 85% of Adjusted Eligible
Accounts Receivable plus (b) 25% of Eligible Raw Materials, plus (c) 65% of
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Eligible OE Finished Goods, plus (d) 50% of Eligible AM Finished Goods plus (e)
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the PP&E Component, minus (f) the Carve-Out. The Borrowing Base at any time
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shall be determined by reference to the most recent Borrowing Base Certificate
delivered to the Administrative Agent pursuant to Section 5.8 of the Agreement.
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Subject to the limitations and requirements set forth in Section 10.10(a) of the
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Agreement, standards of eligibility and reserves and advance rates of the
Borrowing Base may be revised and adjusted from time to time by the
Administrative Agent in its sole discretion, with any changes in such standards
to be effective three (3) Business Days after delivery of notice thereof to the
Borrowers.
"Borrowing Base Certificate" shall mean a certificate substantially in
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the form of Exhibit C hereto (with such changes therein as may be required by
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the Administrative Agent from time to time to reflect the components of and
reserves against the Borrowing Base as provided for hereunder from time to
time), executed and certified as accurate and complete by a Financial Officer of
the Parent, which shall include appropriate exhibits, schedules and supporting
documentation, and additional reports as (i) outlined in Exhibit C, (ii) as
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requested by the Administrative Agent, and (iii) as provided in Section 5.8.
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"Budget" shall have the meaning set forth in Section 4.1(i).
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"Business Day" shall mean any day other than a Saturday, Sunday or
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other day on which banks in the State of New York are required or permitted to
close (and, for a Letter of Credit, other than a day on which the Fronting Bank
issuing such Letter of Credit is closed); provided, however, that when used in
connection with a Eurodollar Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in dollar deposits on the
London interbank market.
"Canadian Dollars" shall mean lawful currency of the Dominion of
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Canada.
5
"Capital Expenditures" shall mean, for any period, the aggregate of all
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expenditures (whether paid in cash and not theretofore accrued subsequent to the
date of this Agreement or accrued as liabilities during such period and
including that portion of Capitalized Leases which is capitalized on the
consolidated balance sheet of the Borrowers and their Subsidiaries) by the
Borrowers and their Subsidiaries during such period that, in conformity with
GAAP, are required to be included in or reflected by the property, plant,
equipment or intangibles or similar fixed asset accounts reflected in the
consolidated balance sheet of the Borrowers and their Subsidiaries (including
equipment which is purchased simultaneously with the trade-in of existing
equipment owned by any of the Borrowers or their Subsidiaries to the extent of
the gross amount of such purchase price less the book value of the equipment
being traded in at such time), but excluding expenditures made in connection
with the replacement or restoration of assets, to the extent reimbursed or
financed from insurance proceeds paid on account of the loss of or the damage to
the assets being replaced or restored, or from awards of compensation arising
from the taking by condemnation or eminent domain of such assets being replaced.
"Capitalized Lease" shall mean, as applied to any Person, any lease of
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property by such Person as lessee which would be capitalized on a balance sheet
of such Person prepared in accordance with GAAP.
"Carve-Out" shall have the meaning set forth in Section 2.23.
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"Cases" shall mean the Chapter 11 Cases of each of the Borrowers
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pending in the Bankruptcy Court.
"Change of Control" shall mean: (i) the acquisition of ownership,
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directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof),
of shares representing more than 25% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of Parent; or (ii) the
occupation of a majority of the seats (other than vacant seats) on the board of
directors of Parent, after the Filing Date, by Persons who were neither (A)
nominated by the board of directors of Parent nor (B) appointed by the directors
so nominated.
"Chase" shall have the meaning set forth in the Introduction.
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"Closing Date" shall mean the date on which this Agreement has been
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executed and the conditions precedent to the making of the initial Loans set
forth in Section 4.1 have been satisfied or waived, which date shall occur as
promptly as is practicable after the date of this Agreement, but in no event
later than ten (10) days following the entry of the Interim Order.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
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"Collateral" shall mean the Collateral described in the Security and
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Pledge Agreement.
"Commitment" shall mean, collectively, the Tranche A Commitments and
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the Tranche B Commitments, and, with respect to each Tranche A or Tranche B
Lender, as applicable, the
6
Commitment of each such Lender hereunder in the amount set forth opposite its
name on Annex A-1 or Annex A-2 hereto or as may subsequently be set forth in the
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Register from time to time, and as the same may be reduced from time to time
pursuant to this Agreement.
"Commitment Fee" shall have the meaning set forth in Section 2.20.
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"Commitment Letter" shall mean that certain Commitment Letter dated
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September 21, 2001 among the Administrative Agent, ▇. ▇. ▇▇▇▇▇▇ Securities, Inc.
and the Borrowers.
"Commitment Percentage" shall mean at any time, with respect to each
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Lender, the percentage obtained by dividing its Tranche A Commitment or its
Tranche B Commitment, as applicable, at such time by the Total Tranche A
Commitment or Total Tranche B Commitment, as applicable, at such time.
"Confidential Information Memorandum" shall mean the Preliminary
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Confidential Information Memorandum dated September 2001 and furnished to
certain Lenders.
"Consolidated EBITDA" shall mean, for any period, all as determined in
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accordance with GAAP, the consolidated net income (or net loss) of the Borrowers
and their Subsidiaries for such period, plus (a) the sum of (i) depreciation
expense, (ii) amortization expense, (iii) other non-cash charges, (iv) provision
for LIFO adjustment for inventory valuation, (v) net total Federal, state and
local income tax expense, (vi) gross interest expense for such period less gross
interest income for such period, (vii) extraordinary losses, (viii) any
non-recurring charge or restructuring charge which in accordance with GAAP is
excluded from operating income, (ix) the cumulative effect of any change in
accounting principles, and "Chapter 11 and U.K. Administration expenses" (or
"administrative costs reflecting Chapter 11 and U.K. Administration expenses")
as shown on the Borrowers' consolidated statement of income for such period and
(x) costs under employee retention programs approved by the Bankruptcy Court
(after notice and a hearing) less (b) extraordinary gains minus (c) the credit,
if any, attributable to Minority Interests plus or minus (d) the amount of cash
received or expended in such period in respect of any amount which, under clause
(viii) above, was taken into account in determining Consolidated EBITDA for such
or any prior period.
"Consummation Date" shall mean the date of the substantial consummation
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(as defined in Section 1101 of the Bankruptcy Code and which for purposes of
this Agreement shall be no later than the effective date) of a Reorganization
Plan of the Borrowers that is confirmed pursuant to an order of the Bankruptcy
Court in the Cases.
"Contra Reserve" shall mean, at any date, a reserve determined in the
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Administrative Agent's sole discretion, based upon the estimated amount of
Accounts wherein the Account Debtor (i) is a creditor of a Borrower, (ii) has,
may assert, has asserted or is reasonably expected to assert a right of set-off
against a Borrower or (iii) has disputed or is reasonably expected to dispute
its liability (whether by chargeback or otherwise) or made, may make or is
reasonably expected to make any claim with respect to the Account or any other
Account of a Borrower which has not been resolved, in each case, without
duplication, to the extent of the amount owed by such Borrower to the Account
7
Debtor, the amount of such actual or asserted right of set-off, or the amount of
such dispute or claim, as the case may be.
"Critical Trade Vendors" shall mean those vendors that provide
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materials or goods that are either actually or practically available only from
such vendor, as described in more detail in the Motion of the Debtors For Entry
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of an Order Authorizing, but not Requiring, Payment of Certain Critical
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Prepetition Trade Vendor Claims, to be filed with the Bankruptcy Court soon
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after the Filing Date.
"Dilution Factors" shall mean, without duplication, with respect to any
----------------
period, the aggregate amount of all deductions, credit memos, returns,
adjustments, allowances, bad debt write-offs and other non-cash credits which
are recorded to reduce accounts receivable in a manner consistent with current
and historical accounting practices of the Borrowers.
"Dilution Ratio" shall mean, at any date, the amount (expressed as a
--------------
percentage) equal to (a) the aggregate amount of the applicable Dilution Factors
for the twelve (12) most recently ended fiscal months divided by (b) total gross
sales for the twelve (12) most recently ended fiscal months.
"Dilution Reserve" shall mean, at any date, the applicable Dilution
----------------
Ratio multiplied by the Eligible Accounts Receivable on such date.
"Dollars" and "$" shall mean lawful money of the United States of
------- -
America.
"Domestic EBITDA" shall mean, for any period, all as determined in
---------------
accordance with GAAP, the consolidated net income (or net loss) of the Parent
and its Domestic Subsidiaries only (expressly excluding the income and expenses
of all Foreign Subsidiaries of the Borrowers) for such period plus (a) the sum
----
of (i) depreciation expense, (ii) amortization expense, (iii) other non-cash
charges, (iv) provisions for LIFO adjustment for inventory valuation, (v) net
total Federal, state and local income tax expense, (vi) gross interest expense
for such period less gross interest income for such period, (vii) extraordinary
losses, (viii) any non-recurring charge or restructuring charge which in
accordance with GAAP is excluded from operating income, (ix) the cumulative
effect of any change in accounting principles, and "Chapter 11 and U.K.
Administration expenses" (or "administrative costs reflecting Chapter 11 and
U.K. Administration expenses") as shown on the Borrowers' consolidated statement
of income for such period and (x) costs under employee retention programs
approved by the Bankruptcy Court (after notice and a hearing) less (b)
----
extraordinary gains minus (c) the credit, if any, attributable to Minority
-----
Interest in Domestic Subsidiaries plus or minus (d) the amount of cash received
---- -----
or expended in such period in respect of any amount which, under clause (viii)
above, was taken into account in determining Domestic EBITDA for such or any
prior period.
"Domestic Subsidiary" shall mean any Subsidiary incorporated, organized
-------------------
or formed under the laws of any jurisdiction of the United States.
8
"Eligible Assignee" shall mean (i) a commercial bank having total
-----------------
assets in excess of $1,000,000,000; (ii) a finance company, insurance company or
other financial institution or fund, in each case acceptable to the
Administrative Agent, which in the ordinary course of business extends credit of
the type contemplated herein and has total assets in excess of $200,000,000 and
whose becoming an assignee would not constitute a prohibited transaction under
Section 4975 of ERISA; and (iii) any other financial institution satisfactory to
the Borrowers and the Administrative Agent.
"Eligible Accounts Receivable" means, at the time of any determination
----------------------------
thereof, each Account that satisfies the following criteria at the time of
creation and continues to meet the same at the time of such determination: such
Account (i) has been invoiced to, and represents the bona fide amounts due to
the Borrowers from, the purchaser of goods or services, in each case originated
in the ordinary course of business of the Borrowers and (ii) in each case is
subject to the Borrowers' corporate accounts receivable credit and collection
policies, procedures and practices and (iii) is not ineligible for inclusion in
the calculation of the Borrowing Base pursuant to any of clauses (a) through (p)
below or otherwise deemed by the Administrative Agent in good faith to be
ineligible for inclusion in the calculation of the Borrowing Base as described
below. Eligible Accounts Receivable shall exclude the Contra Reserve, the Rebate
Reserve and Non-Core Accounts Receivable. Without limiting the foregoing, to
qualify as Eligible Accounts Receivable, an Account shall indicate no person
other than a Borrower as payee or remittance party. In determining the amount to
be so included, the face amount of an Account shall be reduced by, without
duplication, to the extent not reflected in such face amount, (i) the amount of
all accrued and actual discounts, claims, credits or credits pending,
promotional program allowances, price adjustments, finance charges or other
allowances (including any amount that the Borrowers, as applicable, may be
obligated to rebate to a customer pursuant to the terms of any agreement or
understanding (written or oral)), (ii) the aggregate amount of all limits and
deductions provided for in this definition and elsewhere in this Agreement and
(iii) the aggregate amount of all cash received in respect of such Account but
not yet applied by the Borrowers to reduce the amount of such Account. Unless
otherwise approved from time to time in writing by the Administrative Agent
(subject to the limitations and requirements set forth in Section 10.10(a)), no
----------------
Account shall be an Eligible Account Receivable if, without duplication:
(a) the relevant Borrower does not have sole lawful and absolute
title to such Account; or
(b) except for Accounts subject to the Extended Terms Reserve, (i)
it is unpaid more than ninety (90) days from the original date of invoice or
sixty (60) days from the original due date or (ii) it has been written off the
books of the Borrowers or has been otherwise designated on such books as
uncollectible; or
(c) more than 50% in face amount of all Accounts of the same
Account Debtor are ineligible pursuant to clause (b) above; or
(d) the Account Debtor is insolvent or the subject of any
bankruptcy case or insolvency proceeding of any kind or is of uncertain credit
quality, as determined by the Administrative Agent in its sole discretion; or
9
(e) the Account is not payable in Dollars or Canadian Dollars or
the Account Debtor is either not organized under the laws of the United States
of America or Canada, any State or Province thereof, or the District of Columbia
or is located outside or has its principal place of business or substantially
all of its assets outside the United States or Canada, except to the extent the
Account is supported by an irrevocable letter of credit satisfactory to the
Administrative Agent (as to form, substance and issuer) and assigned to and
directly drawable by the Administrative Agent; or
(f) the Account Debtor is the United States of America or any
department, agency or instrumentality thereof, unless the relevant Borrower duly
assigns its rights to payment of such Account to the Administrative Agent
pursuant to the Assignment of Claims Act of 1940, as amended, which assignment
and related documents and filings shall be in form, and substance satisfactory
to the Administrative Agent; or
(g) the Account is supported by a security deposit (to the extent
received from the applicable Account Debtor), progress payment, retainage or
other similar advance made by or for the benefit of the applicable Account
Debtor, in each case to the extent thereof; or
(h) (i) it is not subject to a valid and perfected first priority
Lien in favor of the Administrative Agent for the benefit of the Secured
Parties, subject to no other Liens other than Liens (if any) permitted by the
Loan Documents or (ii) it does not otherwise conform in all material respects to
the representations and warranties contained in the Loan Documents relating to
Accounts; or
(i) such Account was invoiced (i) in advance of goods or services
provided, or (ii) twice, or (iii) the associated income has not been earned; or
(j) such Account is classified as a note receivable by the
Borrowers in accordance with the Borrowers' current and historical practices; or
(k) the sale to the Account Debtor is on a ▇▇▇▇-and-hold,
guaranteed sale, sale-and-return, ship-and-return, sale on approval or
consignment or other similar basis or made pursuant to any other written
agreement providing for repurchase or return of any merchandise which has been
claimed to be defective or otherwise unsatisfactory; or
(l) the Account represents a progress-billing or otherwise does
not represent a completed sale; or
(m) the Account Debtor is an Affiliate of the Borrowers; or
(n) such Account was not paid in full, and the Borrower created a
new receivable for the unpaid portion of the Account, without the agreement of
the customer, and other Accounts constituting chargebacks, debit memos and other
adjustments for unauthorized deductions; or
(o) the Account is due and payable more than one hundred eighty
(180) days from the original date of invoice; or
10
(p) the Account is created on cash on delivery terms.
Notwithstanding the foregoing, all Accounts of any single Account
Debtor and its Affiliates which, in the aggregate exceed (i) 20% in respect of
Account Debtors whose securities are rated Investment Grade by any of ▇▇▇▇▇'▇ or
S&P or (ii) 5% in respect of all other Account Debtors, of the total amount of
all Eligible Accounts Receivable at the time of any determination shall be
deemed not to be Eligible Accounts Receivable to the extent of such excess. In
determining the aggregate amount of Accounts from the same Account Debtor that
are unpaid more than ninety (90) days from the date of invoice or more than
sixty (60) days from the due date pursuant to clause (b) above, there shall be
excluded the amount of any net credit balances relating to Accounts with invoice
dates more than ninety (90) days prior to the date of determination or more than
sixty (60) days from the due date. Furthermore, no Account shall be an Eligible
Account Receivable if it is for goods that have been sold under a purchase order
or pursuant to the terms of a contract or other agreement or understanding
(written or oral) that indicates that any Person other than a Borrower has or
has had or has purported to have or have had an ownership interest in such
goods.
"Eligible AM Finished Goods" shall mean, on any date, Eligible
--------------------------
Inventory composed of Finished Goods, manufactured by Borrowers for sale to an
Account Debtor that is a retailer or distributor, as determined by the
Administrative Agent in its sole discretion, on such date as shown on the
Borrowers' perpetual inventory records in accordance with their current and
historical accounting practices, minus Inventory Reserves.
-----
"Eligible Inventory" shall mean, on any date, the Inventory Value of
------------------
the Borrowers on such date deemed by the Administrative Agent in good faith to
be eligible for inclusion in the calculation of the Borrowing Base. Without
limiting the foregoing, to qualify as "Eligible Inventory", no Person other than
the Borrowers shall have any direct or indirect ownership interest or title to
such Inventory. Eligible Inventory shall exclude remanufactured parts and
Inventory referred to as cores inventory. Unless otherwise from time to time
approved in writing by the Administrative Agent (subject to the limitations and
requirements set forth in Section 10.10(a)), no Inventory shall be deemed
----------------
Eligible Inventory if (and without duplication):
(a) it is not owned solely by the Borrowers or the Borrowers do
not have sole and good, valid and unencumbered title thereto; or
(b) it is not located in the United States; or
(c) it is not located on property owned or leased by the Borrowers
or in a contract warehouse specified on a schedule attached to the Security and
Pledge Agreement and segregated or otherwise separately identifiable from goods
of all others, if any, stored on the premises; or
(d) it is not subject to a valid and perfected first priority Lien
in favor of the Administrative Agent, except, with respect to Inventory stored
at sites described in clause (c) above, for Liens for unpaid rent or normal and
customary warehousing charges, in each case, not yet paid, to the extent of such
unpaid rent or charges; or
11
(e) it is goods returned or rejected due to quality issues by the
Borrowers' customers or goods in transit to third parties (other than to
warehouse sites described in clause (c) above); or
(f) it is seconds or thirds or stale or is obsolete or slow moving
or unmerchantable, or does not otherwise conform to the representations and
warranties contained in the Loan Documents; or
(g) it is located at any operating facility that the Borrowers
plan to close, or at any operating facility that is closed, within thirty (30)
days from the date of determination of the most recent Borrowing Base; or
(h) it is comprised of film, pallets, and/or other shipping
materials or supplies, repair parts, fuel, cartons used in production or other
containers, and any other such material not considered used for sale by the
Administrative Agent from time to time, in the Administrative Agent's sole
discretion; or
(i) the Borrowers classify such item as a sample item on their
perpetual inventory records, or the Borrowers use such item for display; or
(j) it is a discontinued product or component thereof; or
(k) any portion of the Inventory Value thereof is attributable to
intercompany profit among the Borrowers or their Affiliates; or
(l) any Inventory that is damaged or marked for return to vendor;
or
(m) any Inventory that is Work-In-Process.
"Eligible OE Finished Goods" shall mean, on any date, Eligible
--------------------------
Inventory composed of Finished Goods, manufactured by Borrowers pursuant to an
order by an Account Debtor, for use in such Account Debtor's manufacturing
processes, as determined by the Administrative Agent in its sole discretion, on
such date as shown on the Borrowers' perpetual inventory records in accordance
with their current and historical accounting practices, minus Inventory
Reserves.
"Eligible Raw Materials" shall mean, on any date, Eligible Inventory
----------------------
composed of Raw Materials to be used in the production of finished goods
inventory for sale, as determined by the Administrative Agent in its sole
discretion, on such date as shown on the Borrowers' perpetual inventory records
in accordance with current and historical accounting practices, minus Inventory
Reserves.
"Environmental Lien" shall mean a Lien in favor of any Governmental
------------------
Authority for (i) any liability under federal or state environmental laws or
regulations, or (ii) damages arising from or costs incurred by such Governmental
Authority in response to a release or threatened release of a hazardous or toxic
waste, substance or constituent, or other substance into the environment.
12
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
-----
as amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" shall mean any trade or business (whether or not
---------------
incorporated) which is a member of a group of which any of the Borrowers is a
member and which is under common control within the meaning of Section 414(b) or
(c) of the Code and the regulations promulgated and rulings issued thereunder.
"Eurocurrency Liabilities" shall have the meaning assigned thereto in
------------------------
Regulation D issued by the Board, as in effect from time to time.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
--------------------
Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate
---------------
determined by reference to the Adjusted LIBOR Rate in accordance with the
provisions of Section 2.
---------
"Event of Default" shall have the meaning given such term in Section 7.
---------------- ---------
"Existing Agreements" shall mean the Existing Credit Agreement, the
-------------------
Surety Bonds and agreements relating to other obligations or indebtedness of the
Borrowers in an aggregate amount in excess of $20,000,000.
"Existing Credit Agreement" shall mean that certain Fourth Amended and
-------------------------
Restated Credit Agreement dated as of December 29, 2000, as amended, among
Parent, each Foreign Subsidiary Borrower (as defined therein), the banks and
other financial institutions from time to time parties thereto, and The Chase
Manhattan Bank, as lead arranger, book manager and administrative agent.
"Extended Terms Amount" shall mean, on any date, for each Extended
---------------------
Terms Customer, Accounts which are otherwise Eligible Accounts Receivable,
arising as a result of the sale of goods with payment terms in excess of ninety
(90) days and not greater than one hundred eighty (180) days.
"Extended Terms Customer" shall mean, on any date, Account Debtors
-----------------------
which (i) have terms of sales greater than ninety (90) days, but not greater
than one hundred eighty (180) days, and (ii) which are not rated Investment
Grade.
"Extended Terms Reserve" shall mean, on any date, 25% of the Extended
----------------------
Terms Amount.
"Fees" shall collectively mean the Commitment Fees, Letter of Credit
----
Fees and other fees referred to in Sections 2.19, 2.20 and 2.21.
------------------- ----
"Filing Date" shall mean October 1, 2001.
-----------
13
"Final Order" shall have the meaning given such term in Section 4.2(a).
----------- --------------
"Financial Officer" shall mean the Chief Financial Officer, Controller,
-----------------
Treasurer or Assistant Treasurer of a Borrower.
"Finished Goods" shall mean goods to be sold by the Borrowers in the
--------------
ordinary course of business.
"Foreign Subsidiary" shall mean a Subsidiary which is incorporated or
------------------
organized under the laws of a jurisdiction outside of the United States.
"Fronting Bank" shall mean Chase, Chase Manhattan Bank USA, N.A., or
-------------
such other commercial bank as may agree with Chase to act in such capacity for
the Tranche A Lenders.
"GAAP" shall mean accounting principles generally accepted in the
----
United States and applied in accordance with Section 1.2.
-----------
"Governmental Authority" shall mean any Federal, state, municipal or
----------------------
other governmental department, commission, board, bureau, agency or
instrumentality or any court, in each case whether of the United States or
foreign.
"Guaranteed Obligations" shall have the meaning set forth in Section
---------------------- -------
9.1(a).
------
"Indebtedness" shall mean, at any time and with respect to any Person,
------------
(i) all Indebtedness of such Person for borrowed money, (ii) all Indebtedness of
such Person for the deferred purchase price of property or services (other than
property, including inventory, and services purchased, and expense accruals and
deferred compensation items arising, in the ordinary course of business), (iii)
all obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments (other than performance, surety and appeal bonds arising in
the ordinary course of business), (iv) all Indebtedness of such Person created
or arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (v) all obligations of such Person
under leases which have been or should be, in accordance with GAAP, recorded as
capital leases, to the extent required to be so recorded, (vi) all
reimbursement, payment or similar obligations of such Person, contingent or
otherwise, under acceptance, letter of credit or similar facilities and all
obligations of such Person in respect of (x) currency swap agreements, currency
future or option contracts and other similar agreements designed to hedge
against fluctuations in foreign currency exchange rates and (y) interest rate
swap, cap or collar agreements and interest rate future or option contracts and
other similar agreements designed to hedge against fluctuations in interest
rates; (vii) all Indebtedness referred to in clauses (i) through (vi) above
guaranteed directly or indirectly by such Person, or in effect guaranteed
directly or indirectly by such Person through an agreement (A) to pay or
purchase such Indebtedness or to advance or supply funds for the payment or
purchase of such Indebtedness, (B) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make
14
payment of such Indebtedness or to assure the holder of such Indebtedness
against loss in respect of such Indebtedness, (C) to supply funds to or in any
other manner invest in the debtor (including any agreement to pay for property
or services irrespective of whether such property is received or such services
are rendered) or (D) otherwise to assure a creditor against loss in respect of
such Indebtedness, and (viii) all Indebtedness referred to in clauses (i)
through (vii) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon or
in property (including, without limitation, accounts and contract rights) owned
by such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness.
"Indemnified Party" shall have the meaning given such term in Section
----------------- -------
10.6.
-----
"Indentures" shall mean, collectively, (i) the Indenture, dated as of
----------
August 12, 1994, between Parent and U.S. Bank Trust National Association (as
successor to Continental Bank), as trustee, together with the First Supplemental
Indenture thereto, dated as of July [8], 1998, the Second Supplemental Indenture
thereto, dated as of October 9, 1998, and the Third Supplemental Indenture
thereto, dated as of December 29, 2000, (ii) the Indenture, dated as of June 29,
1998, between Parent and The Bank of New York, as trustee, together with the
First Supplemental Indenture thereto, dated as of June 30, 1998, the Second
Supplemental Indenture thereto, dated as of July [21], 1998, the Third
Supplemental Indenture thereto, dated as of October 9, 1998, and the Fourth
Supplemental Indenture thereto, dated as of December 29, 2000, and (iii) the
Indenture, dated as of January 20, 1999, among Parent, the guarantors and The
Bank of New York, as trustee, together with the First Supplemental Indenture
thereto, dated as of December 29, 2000, each as subsequently amended in
accordance with the terms hereof and thereof.
"Initial Period" shall have the meaning given such term in Section 2.2.
--------------
"Insufficiency" shall mean, with respect to any Plan, the amount, if
-------------
any, of its unfunded benefit liabilities within the meaning of Section
4001(a)(18) of ERISA.
"Intercompany Indebtedness" shall mean any claim of an Affiliate of
-------------------------
Parent against any other Affiliate of Parent, any claim of Parent against any of
its Affiliates, and any claim of any Affiliate of Parent against Parent.
"Intercompany Loans" shall mean Intercompany Indebtedness for borrowed
------------------
money.
"Interim Order" shall have the meaning given such term in Section
------------- -------
4.1(b).
------
"Interest Payment Date" shall mean (i) as to any Eurodollar Loan, the
---------------------
last day of the applicable Interest Period, provided that with respect to
Interest Periods exceeding three months, interest shall be payable on the
three-month anniversary of the first day of the Interest Period and on the last
day of the Interest Period, and (ii) as to all ABR Loans, the last calendar day
of each month and the date on which any ABR Loans are refinanced with Eurodollar
Loans pursuant to Section 2.12.
------------
15
"Interest Period" shall mean, as to any Borrowing of Eurodollar Loans,
---------------
the period commencing on the date of such Borrowing (including as a result of a
refinancing of ABR Loans) or on the last day of the preceding Interest Period
applicable to such Borrowing and ending on the numerically corresponding day (or
if there is no corresponding day, the last day) in the calendar month that is
one, three or six months thereafter, as the Borrowers may elect in the related
notice delivered pursuant to Section 2.6(b) or 2.12; provided, however, that (i)
-------------- ---- -------- -------
if any Interest Period would end on a day which shall not be a Business Day,
such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day,
and (ii) no Interest Period shall end later than the Termination Date.
"Inventory" shall mean all Raw Materials, Work-in-Process, and Finished
---------
Goods held by the Borrowers in the normal course of business.
"Inventory Reserves" means the following, each as determined by the
------------------
Administrative Agent from time to time:
(a) a reserve for shrink, or discrepancies that arise pertaining
to inventory quantities on hand between the Borrowers perpetual accounting
system, and physical counts of the Inventory, but not less than 2% of the
Eligible Inventory; or
(b) a reserve for slow move, obsolete or excess Inventory; or
(c) a reserve for favorable standard cost variances; or
(d) a reserve for amounts owing to landlords or warehousemen for
Inventory stored at leased facilities or public warehouses which are not the
subject of an access agreement acceptable to the Administrative Agent, in the
amount of (i) to the extent Borrowers' are able to determine the Borrowers'
average rental expense for such facility, three (3) times the Borrower's average
monthly rental expense for such facility plus (ii) in all other events, the
Inventory Value of the Inventory stored at such leased facilities or public
warehouses; or
(e) a reserve for Inventory located at contractors' or vendors'
facilities in the amount of the Inventory Value of such Inventory; or
(f) any other reserve as deemed appropriate by the Administrative
Agent in its sole discretion, from time to time; or
(g) a reserve for vendor rebates.
"Inventory Value" shall mean a dollar amount equal to the lesser of (i)
---------------
the actual cost of Inventory determined on a basis consistent with GAAP and with
the Borrowers' current and historical accounting practice or (ii) the market
value of such Inventory.
"Investments" shall have the meaning given such term in Section 6.10.
----------- ------------
16
"Investment Grade" shall mean either (i) at least Baa3 by Moody's (or
----------------
the then equivalent) or (ii) at least BBB- by S&P (or the then equivalent).
"Lenders" shall have the meaning set forth in the Introduction.
-------
"Lender Affiliate" shall mean, (a) with respect to any Lender, (i) an
----------------
Affiliate of such Lender or (ii) any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in loans and similar extensions of credit in the ordinary course of
its business and is administered or managed by a Lender or an Affiliate of such
Lender and (b) with respect to any Lender that is a fund which invests in loans
and similar extensions of credit, any other fund that invests in loans and
similar extensions of credit and is managed by the same investment advisor as
such Lender or by an Affiliate of such investment advisor.
"Letter of Credit" shall mean any irrevocable letter of credit issued
----------------
under Tranche A pursuant to Section 2.3, which letter of credit shall be (i) a
-----------
standby or import documentary letter of credit, (ii) issued for purposes that
are consistent with the ordinary course of business of the Borrowers or for such
other purposes as are reasonably acceptable to the Administrative Agent, (iii)
denominated in Dollars and (iv) otherwise in such form as may be reasonably
approved from time to time by the Administrative Agent and the applicable
Fronting Bank.
"Letter of Credit Account" shall mean the account established by the
------------------------
Borrowers under the sole and exclusive control of the Administrative Agent
maintained at the office of the Administrative Agent at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ designated as the "Federal-Mogul Corporation Letter of
Credit Account" that shall be used solely for the purposes set forth in Sections
--------
2.3(a) and 2.13.
------ ----
"Letter of Credit Fees" shall mean the fees payable in respect of
---------------------
Letters of Credit pursuant to Section 2.21.
------------
"Letter of Credit Outstandings" shall mean, at any time, the sum of (i)
-----------------------------
the aggregate undrawn stated amount of all Letters of Credit then outstanding
plus (ii) all amounts theretofore drawn under Letters of Credit and not then
reimbursed.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
----
lien or charge of any kind whatsoever (including any conditional sale or other
title retention agreement or any lease in the nature thereof).
"Loan" and "Loans" shall mean, as applicable, the Revolving Loans and
---- -----
the Term Loans.
"Loan Documents" shall mean this Agreement, the Letters of Credit, the
--------------
Security and Pledge Agreement and any other instrument or agreement executed and
delivered in connection herewith.
17
"Maturity Date" shall initially mean the date 24 months after the
-------------
commencement of the Cases.
"Minority Interests" shall mean any shares of stock of any class of a
------------------
Subsidiary of the Borrowers (other than directors' qualifying shares if required
by law) that are not owned by Borrowers or one of their Subsidiaries; Minority
Interest shall be valued in accordance with GAAP.
"Minority Lenders" shall have the meaning given such term in Section
---------------- -------
10.10(b).
--------
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc. or any successor
-------
to the rating agency business thereof.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
------------------
Section 4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" shall mean a Single Employer Plan, which (i)
----------------------
is maintained for employees of a Borrower or an ERISA Affiliate and at least one
Person other than such Borrower and its ERISA Affiliates or (ii) was so
maintained and in respect of which a Borrower or an ERISA Affiliate could have
liability under Section 4064 or 4069 of ERISA in the event such Plan has been or
were to be terminated.
"Net Proceeds" shall mean, in respect of any sale of assets, the
------------
proceeds of such sale after the payment of or reservation for expenses that are
directly related to the sale, including, but not limited to, related severance
costs, taxes payable, brokerage commissions, professional expenses, other
similar costs that are directly related to the sale and the amount secured by
valid and perfected Liens, if any, that are senior to the Liens on such assets
held by the Administrative Agent on behalf of the Lenders.
"Non-Core Accounts Receivable" shall mean, at the time of any
----------------------------
determination, without duplication, (i) receivables arising from transactions
that are not in the ordinary course of business, including equipment and
equipment parts sales, (ii) Accounts arising from transactions other than sales
to customers who are not Affiliates of any of the Borrowers of automobile,
truck, aviation, farm or construction vehicle parts manufactured by the
Borrowers, on usual and customary terms, in a manner consistent with historical
sales practices, (iii) non-trade receivables and (iv) miscellaneous and sundry
receivables.
"Non-Debtor Foreign Subsidiary" shall mean the Foreign Subsidiaries of
-----------------------------
the Borrowers other than the U.K. Subsidiaries, as set forth on Schedule 3.5.
------------
"Obligations" shall mean (a) the due and punctual payment of principal
-----------
of and interest on the Loans and the reimbursement of all amounts drawn under
Letters of Credit (whether such Letters of Credit are issued for the account of
the Borrowers of the Non-Debtor Foreign Subsidiaries and including, without
limitation, the Guaranteed Obligations), and (b) the due and punctual payment of
the
18
Fees and all other present and future, fixed or contingent, monetary obligations
of the Borrowers to the Lenders and the Administrative Agent under the Loan
Documents.
"Orders" shall mean the Interim Order and the Final Order of the
------
Bankruptcy Court.
"Organizational Documents" shall mean (i) with respect to any
------------------------
corporation, its certificate or articles of incorporation, as amended, and its
by-laws, as amended, (ii) with respect to any limited partnership, its
certificate of limited partnership or formation, as amended, and its partnership
agreement, as amended, (iii) with respect to any general partnership, its
partnership agreement, as amended, (iv) with respect to any limited liability
company, its certificate of formation or articles of organization, as amended,
and its operating agreement, as amended, and (v) with respect to any unlimited
liability company, its certificate of formation, as amended, and its memorandum
and articles of association, as amended. In the event any term or condition of
this Agreement or any other Loan Document requires any Organizational Document
to be certified by a secretary of state of similar governmental official, the
reference to any such "Organizational Document" shall only be to a document of a
type customarily certified by such governmental official.
"Other Taxes" shall have the meaning given such term in Section 2.18.
----------- ------------
"Parent" shall mean have the meaning set forth in the Introduction.
------
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
----
successor agency or entity performing substantially the same functions.
"Pension Plan" shall mean a defined benefit pension or retirement plan
------------
which meets and is subject to the requirements of Section 401(a) of the Code.
"Permitted Investments" shall mean:
---------------------
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within twelve months from the date of acquisition thereof;
(b) without limiting the provisions of paragraph (d) below,
investments in commercial paper maturing within six months from the date of
acquisition thereof and having, at such date of acquisition, a rating of at
least "A-2" or the equivalent thereof from Standard & Poor's Ratings Group or of
at least "P-2" or the equivalent thereof from ▇▇▇▇▇'▇ Investors Service, Inc.;
(c) investments in certificates of deposit, banker's acceptances
and time deposits (including Eurodollar time deposits) maturing within six
months from the date of acquisition thereof issued or guaranteed by or placed
with (i) any domestic office of the Administrative Agent or the bank with whom
the Borrowers maintain their cash management system, provided, that if such bank
is not a Lender hereunder, such bank shall have entered into an agreement with
the Administrative Agent pursuant to which such bank shall have waived all
rights of setoff and confirmed that such bank does not
19
have, nor shall it claim, a security interest therein or (ii) any domestic
office of any other commercial bank of recognized standing organized under the
laws of the United States of America or any State thereof that has a combined
capital and surplus and undivided profits of not less than $250,000,000 and is
the principal banking Subsidiary of a bank holding company having a long-term
unsecured debt rating of at least "A-2" or the equivalent thereof from Standard
& Poor's Ratings Group or at least "P-2" or the equivalent thereof from ▇▇▇▇▇'▇
Investors Service, Inc.;
(d) investments in commercial paper maturing within six months
from the date of acquisition thereof and issued by (i) the holding company of
the Administrative Agent or (ii) the holding company of any other commercial
bank of recognized standing organized under the laws of the United States of
America or any State thereof that has (A) a combined capital and surplus in
excess of $250,000,000 and (B) commercial paper rated at least "A-2" or the
equivalent thereof from Standard & Poor's Ratings Group or of at least "P-2" or
the equivalent thereof from ▇▇▇▇▇'▇ Investors Service, Inc.;
(e) investments in repurchase obligations with a term of not more
than seven (7) days for underlying securities of the types described in clause
(a) above entered into with any office of a bank or trust company meeting the
qualifications specified in clause (c) above;
(f) investments in money market funds substantially all the assets
of which are comprised of securities of the types described in clauses (a)
through (e) above; and
(g) to the extent owned on the Filing Date, investments in the
capital stock of any direct or indirect Subsidiary of the Borrowers as disclosed
in Schedule 3.5.
------------
"Permitted Liens" shall mean (i) Liens in favor of the Administrative
---------------
Agent on behalf of the Lenders; (ii) Liens imposed by law (other than
Environmental Liens and any Lien imposed under ERISA) for taxes, assessments or
charges of any Governmental Authority for claims not yet due or which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being maintained in
accordance with GAAP; (iii) Liens of landlords and Liens of statutory carriers,
warehousemen, mechanics, materialmen and other Liens (other than Environmental
Liens and any Lien imposed under ERISA) in existence on the Filing Date or
thereafter imposed by law and created in the ordinary course of business; (iv)
Liens (other than any Lien imposed under ERISA) incurred or deposits made
(including, without limitation, surety bonds and appeal bonds) in connection
with workers' compensation, unemployment insurance and other types of social
security benefits or to secure the performance of tenders, bids, leases,
contracts (other than for the repayment of Indebtedness), statutory obligations
and other similar obligations incurred in the ordinary course of business; (v)
easements (including, without limitation, reciprocal easement agreements and
utility agreements), rights-of-way, covenants, consents, reservations,
encroachments, variations and zoning and other restrictions, charges or
encumbrances (whether or not recorded) and interest of ground lessors, which do
not interfere with the ordinary conduct of the business of any Borrower, and
which do not detract from the value of the property to which they attach or
materially impair the use thereof to any Borrower; (vi) purchase money Liens
(including Capitalized Leases) upon or in any property acquired or held in the
ordinary course of business to secure the purchase price of
20
such property or to secure Indebtedness permitted by Section 6.3(iii) solely for
----------------
the purpose of financing the acquisition of such property; (vii) Liens set forth
on Schedule 3.6; (viii) Liens on the assets of Non-Debtor Foreign Subsidiaries
------------
(excluding the U.K. Subsidiaries) granted to secure Intercompany Loans from the
Borrowers permitted by Sections 6.10(iv) and (v); (ix) Liens on the assets of
-------------------------
the U.K. Subsidiaries granted to secure Intercompany Loans from the Borrowers
permitted by Section 6.10(vi); (x) Liens consisting of deposits with derivatives
----------------
traders as may be required pursuant to the terms of the International Swap
Dealers Association Master Agreement(s) executed in the ordinary course of
business in connection with the Borrowers' foreign exchange, commodities and
interest hedging programs in an aggregate amount not to exceed at any time
$15,000,000; (xi) Liens junior to the senior priming liens contemplated hereby
that are granted by the Interim Order or the Final Order as adequate protection
to the parties whose Liens are primed by such senior priming Liens, provided
--------
that the Interim Order and the Final Order provide that the holders of such
junior liens shall not be permitted to take any action to enforce their rights
with respect to such junior liens as long as any amounts are outstanding under
the Agreement or the Lenders have any Commitment thereunder, and (xii) Liens
created in connection with extensions, renewals or replacements, including
replacement Liens granted by the Bankruptcy Court, of any Lien referred to in
clauses (i) through (x) above, provided that the principal amount of the
obligation secured thereby is not increased and that any such extension, renewal
or replacement is limited to the property originally encumbered thereby.
"Person" shall mean any natural person, corporation, division of a
------
corporation, partnership, trust, joint venture, association, company, estate,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan" shall mean a Single Employer Plan or a Multiemployer Plan.
----
"PP&E Component" shall mean, at the time of any determination, an
--------------
amount equal to the lesser of (i) 80% of the liquidation value in place of
certain machinery and equipment owned by the Borrowers, all as determined in the
Administrative Agent's sole discretion from time to time, (ii) $125,000,000, or
(iii) 20% of the Borrowing Base inclusive of the PP&E Component.
"Prepayment Date" shall mean forty-five (45) days after the entry of
---------------
the Interim Order by the Bankruptcy Court if the Final Order has not been
entered by the Bankruptcy Court prior to the expiration of such forty-five (45)
day period.
"Prepetition Payment" shall mean a payment (by way of adequate
-------------------
protection or otherwise) of principal or interest or otherwise on account of any
prepetition Indebtedness or trade payables or other prepetition claims against
the Borrowers, including, without limitation, reclamation claims, materialmen's
liens and prepetition claims of Critical Trade Vendors.
"Prepetition Securitization Facilities" shall mean, collectively, (i)
-------------------------------------
the Eighth Amended and Restated Receivable Interest Purchase Agreement, dated as
of June 13, 2001, among Federal-Mogul Funding Corporation, a Michigan
corporation, as the seller, the Parent, as the servicer, Blue Ridge Asset
Funding Corporation and Falcon Asset Securitization Corporation, as purchasers,
the financial institutions from time to time party thereto, as investors, Bank
One, NA, as the administrative
21
agent and as agent for Falcon Asset Securitization Corporation, and Wachovia
Bank, N.A., as agent for Blue Ridge Asset Funding Corporation; (ii) the Seventh
Amended and Restated Receivables Sale and Contribution Agreement dated as of
June 13, 2001, between Federal-Mogul Funding Corporation, a Michigan
corporation, as the purchaser, and the Parent, as the seller; (iii) the Fourth
Amended and Restated Receivables Purchase Agreement dated as of June 13, 2001,
among the Parent, as purchaser, and certain of its affiliates, each as a seller;
and (iv) all other documents entered into in connection with any of the
foregoing, as each of the foregoing are amended, restated, supplemented,
renewed, refinanced or otherwise modified from time to time.
"Primed Liens" shall have the meaning set forth in Section 2.23.
------------ ------------
"Raw Materials" shall mean any raw materials or Supplies used or
-------------
consumed in the manufacture, packing or shipping of goods to be sold by the
Borrowers in the ordinary course of business.
"Rebate Reserve" shall mean, at any time of determination, an amount
--------------
owing or payable to Account Debtors pursuant to incentive marketing programs or
similar programs, as determined by the Administrative Agent in its sole
discretion from time to time.
"Register" shall have the meaning set forth in Section 10.3(d).
-------- ---------------
"Reorganization Plan" shall mean a plan of reorganization in any of the
-------------------
Cases.
"Replacement Lender" shall have the meaning given such term in Section
------------------ -------
2.29.
----
"Required Lenders" shall mean, at any time, Lenders holding in excess
----------------
of 50% of the Total Commitment.
"Revolving Loans" shall have the meaning given such term in Section
--------------- -------
2.1.
---
"S&P" shall mean Standard & Poor's Rating Services, a division of The
---
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor to the rating agency business
thereof.
"Security and Pledge Agreement" shall have the meaning given such term
-----------------------------
in Section 4.1(c).
--------------
"Single Employer Plan" shall mean a single employer plan, as defined in
--------------------
Section 4001(a)(15) of ERISA, that (i) is maintained for employees of a Borrower
or an ERISA Affiliate or (ii) was so maintained and in respect of which a
Borrower could have liability under Section 4069 of ERISA in the event such Plan
has been or were to be terminated.
"Statutory Reserves" shall mean on any date the percentage (expressed
------------------
as a decimal) established by the Board and any other banking authority which is
(i) for purposes of the definition of Base CD Rate, the then stated maximum rate
of all reserves (including, but not limited to, any emergency, supplemental or
other marginal reserve requirement) for a member bank of the Federal
22
Reserve System in New York City, for new three month negotiable nonpersonal time
deposits in dollars of $100,000 or more or (ii) for purposes of the definition
of Adjusted LIBOR Rate, the then stated maximum rate for all reserves (including
but not limited to any emergency, supplemental or other marginal reserve
requirements) applicable to any member bank of the Federal Reserve System in
respect of Eurocurrency Liabilities (or any successor category of liabilities
under Regulation D issued by the Board, as in effect from time to time). Such
reserve percentages shall include, without limitation, those imposed pursuant to
said Regulation. The Statutory Reserves shall be adjusted automatically on and
as of the effective date of any change in such percentage.
"Stock Liens" shall mean the perfected liens on the stock of certain
-----------
Subsidiaries of the Parent in favor of (x) the trustees for the holders of
Indebtedness of the Parent under the Indentures, and (y) the holders of
obligations under the Existing Credit Agreements and the Surety Bonds.
"Subsidiary" shall mean, with respect to any Person (herein referred to
----------
as the "parent"), any corporation, association or other business entity (whether
now existing or hereafter organized) of which at least a majority of the
securities or other ownership interests having ordinary voting power for the
election of directors is, at the time as of which any determination is being
made, owned or controlled by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.
"Super-majority Lenders" shall have the meaning given such term in
----------------------
Section 10.10(b).
----------------
"Superpriority Claim" shall mean a claim against any Borrower in any of
-------------------
the Cases which is a superpriority administrative expense claim having priority
over any or all administrative expenses of the kind specified in Sections 503(b)
or 507(b) of the Bankruptcy Code.
"Supplies" shall mean film, packaging and/or shipping supplies or
--------
materials not otherwise directly used in the production of Finished Goods.
"Surety Bonds" shall mean, collectively, the Contracts of Indemnity,
------------
each dated December 29, 2000, entered into by the Parent and certain of its
Subsidiaries with (i) Travelers Casualty & Surety Company of America with
respect to Performance Bond Number 103529126 and Performance Bond Number
103529229REL, each in the original maximum amount of $50,000,000, (ii) SAFECO
Insurance Company of America with respect to Performance Bond Number 6066092 in
the original maximum amount of $75,000,000, and (iii) National Fire Insurance
Company of Hartford and Continental Casualty Company with respect to Performance
Bond Number 929182983 in the original maximum amount of $75,000,000.
"Taxes" shall have the meaning given such term in Section 2.18.
----- ------------
"Termination Date" shall mean the earliest to occur of (i) the
----------------
Prepayment Date, (ii) the Maturity Date, (iii) the Consummation Date and (iv)
the acceleration of the Loans and the termination of the Total Commitment in
accordance with the terms hereof.
23
"Termination Event" shall mean (i) a "reportable event", as such term
-----------------
is described in Section 4043 of ERISA and the regulations issued thereunder
(other than a "reportable event" not subject to the provision for 30-day notice
to the PBGC under Section 4043 of ERISA or such regulations) or an event
described in Section 4068 of ERISA excluding events described in Section
4043(c)(9) of ERISA or 29 CFR ▇▇.▇▇. 2615.21 or 2615.23, or (ii) the withdrawal
of any Borrower or any ERISA Affiliate from a Multiple Employer Plan during a
plan year in which it was a "substantial employer", as such term is defined in
Section 4001(c) of ERISA, or the incurrence of liability by any Borrower or any
ERISA Affiliate under Section 4064 of ERISA upon the termination of a Multiple
Employer Plan, or (iii) providing notice of intent to terminate a Plan pursuant
to Section 4041(c) of ERISA or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, or (iv) the institution of proceedings
to terminate a Plan by the PBGC under Section 4042 of ERISA, or (v) any other
event or condition (other than the commencement of the Cases and the failure to
have made any contribution accrued as of the Filing Date but not paid) which
would reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan,
or the imposition of any liability under Title IV of ERISA (other than for the
payment of premiums to the PBGC).
"Terms Loans" shall have the meaning given such term in Section 2.1.
----------- -----------
"Total Commitment" shall mean, at any time, the sum of the Commitments
----------------
at such time.
"Total Tranche A Commitment" shall mean, at any time, the sum of the
--------------------------
Tranche A Commitments at such time.
"Total Tranche B Commitment" shall mean, at any time, the sum of the
--------------------------
Tranche B Commitments at such time.
"Total Usage" shall mean, at any time, the sum of the outstanding
-----------
aggregate principal amount of the Revolving Loans and the Term Loans plus the
aggregate Letter of Credit Outstandings.
"Tranche A Commitment" shall mean the Commitment of each Tranche A
--------------------
Lender hereunder to make Revolving Loans and to issue and/or participate in
Letters of Credit in the amount set forth opposite its name on Annex A-1 hereto
or as may subsequently be set forth in the Register from time to time, as the
same may be reduced from time to time pursuant to the terms of this Agreement.
"Tranche A Lender" shall mean each Lender having a Tranche A
----------------
Commitment.
"Tranche B Commitment" shall mean the Commitment of each Tranche B
--------------------
Lender hereunder to make a Term Loan in the amount set forth opposite its name
on Annex A-2 hereto or as may subsequently be set forth in the Register from
time to time, as the same may be reduced from time to time pursuant to this
Agreement.
"Tranche B Lender" shall mean each Lender having a Tranche B
----------------
Commitment.
24
"Transferee" shall have the meaning given such term in Section 2.18.
---------- ------------
"Type" when used in respect of any Loan or Borrowing shall refer to the
----
Rate of interest by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "Rate" shall mean
----
the Adjusted LIBOR Rate and the Alternate Base Rate.
"U.K. Subsidiaries" shall mean those Subsidiaries of the Borrowers
-----------------
which are organized under the laws of any jurisdiction in the United Kingdom and
which are the subject of administration petitions under the U.K. Insolvency Act
of 1986 (collectively, and including upon the grant of such petitions, the "U.K.
----
Administration") and are debtors in cases pending under Chapter 11 of the
--------------
Bankruptcy Code.
"U.K. Subsidiary Proceedings" shall mean the proceedings of the U.K.
---------------------------
Subsidiaries under Chapter 11 of the Bankruptcy Code commenced on the Filing
Date.
"Unused Total Commitment" shall mean, at any time, (i) the Total
-----------------------
Commitment less (ii) the sum of (x) the aggregate outstanding principal amount
of all Loans and (y) the aggregate Letter of Credit Outstandings.
"Unused Total Tranche A Commitment" shall mean, at any time, (i) the
---------------------------------
Total Tranche A Commitment less (ii) the sum of (x) the aggregate outstanding
principal amount of all Revolving Loans made under Tranche A and (y) the
aggregate Letter of Credit Outstandings under Tranche A.
"Withdrawal Liability" shall have the meaning given such term under
--------------------
Part I of Subtitle E of Title IV of ERISA.
"Work-in-Process" shall mean goods to be sold by the Borrowers in the
---------------
ordinary course of business, which are currently in the process of being
manufactured.
SECTION 1.2 Terms Generally. The definitions in Section 1.1 shall apply
--------------- -----------
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. All references herein to Sections, Exhibits and
Schedules shall be deemed references to Sections of, and Exhibits and Schedules
to, this Agreement unless the context shall otherwise require. Except as
otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time; provided, however, that for purposes of determining compliance with any
-------- -------
covenant set forth in Section 6, such terms shall be construed in accordance
---------
with GAAP as in effect on the date of this Agreement applied on a basis
consistent with the application used in the Borrowers' audited financial
statements referred to in Section 3.4.
------------
25
SECTION 2. AMOUNT AND TERMS OF CREDIT.
SECTION 2.1 Commitment of the Lenders.
-------------------------
(a) Each Tranche A Lender severally and not jointly with the other
Tranche A Lenders agrees, upon the terms and subject to the conditions herein
set forth, to make revolving credit loans (each a "Revolving Loan" and
--------------
collectively, the "Revolving Loans") to the Borrowers at any time and from time
---------------
to time during the period commencing on the date hereof and ending on the
Termination Date (or the earlier date of termination of the Total Tranche A
Commitment) in an aggregate principal amount not to exceed, when added to such
Tranche A Lender's Tranche A Commitment Percentage of the then aggregate Letter
of Credit Outstandings, the Tranche A Commitment of such Tranche A Lender, which
Revolving Loans may be repaid and reborrowed in accordance with the provisions
of this Agreement. At no time shall the sum of the then outstanding aggregate
principal amount of the Revolving Loans plus the then aggregate Letter of Credit
----
Outstandings exceed the Total Tranche A Commitment of $525,000,000, as the same
may be reduced from time to time pursuant the terms of this Agreement.
(b) Each Tranche B Lender severally and not jointly with the other
Tranche B Lenders agrees, upon the terms and subject to the conditions herein
set forth, to make term loans (each a "Term Loan" and collectively, the "Term
--------- ----
Loans") to the Borrowers on the Closing Date, in an aggregate principal amount
-----
not to exceed the Tranche B Commitment of such Tranche B Lender. At no time
shall the sum of the then outstanding aggregate principal amount of the Term
Loans exceed the Total Tranche B Commitment of $150,000,000.
(c) Each Borrowing shall be made by the Lenders pro rata in
accordance with their respective Commitments; provided, however, that the
-------- -------
failure of any Lender to make any Loan shall not in itself relieve the other
Lenders of their obligations to lend.
(d) Notwithstanding anything to the contrary herein, the
Administrative Agent shall have the right to determine a reallocation of the
Commitments in Tranche A and Tranche B (and the sublimits therein), provided
that such reallocation by the Administrative Agent shall not increase the amount
of the Total Commitment.
SECTION 2.2 Availability of Commitment; Borrowing Base.
------------------------------------------
(a) Subject to the terms and conditions hereof, from the Filing
Date until the later of: (i) the date which is forty-five (45) days after the
Filing Date, and (ii) the date of the entry of the Final Order (the "Initial
-------
Period"), $450,000,000 of the Total Commitment, consisting of the Tranche B
------
Commitment and $300,000,000 of the Tranche A Commitment (the "Available
---------
Commitment") shall be available to the Borrowers without regard to the Borrowing
----------
Base, (but otherwise subject to the terms, conditions and covenants described in
this Agreement), provided that if the Bankruptcy Court shall have approved the
--------
Borrowers' continued sale of accounts receivable to affiliates of Wachovia Bank,
N.A. and Bank One, NA pursuant to the Prepetition Securitization Facilities
after entry of the
26
Interim Order, the amount available under the Tranche A Commitments shall be
limited to $50,000,000 during the Initial Period.
(b) After the Initial Period, the Borrowing Base shall become
operative with respect to the availability of Loans or Letters of Credit under
the Tranche A and the Tranche B Commitment.
(c) Notwithstanding any other provision of this Agreement to the
contrary, the Total Usage shall not at any time exceed (i) prior to the
expiration of the Initial Period, the Available Commitment, and (ii) from and
after the expiration of the Initial Period, the lesser of (x) the Total
Commitment and (y) the Borrowing Base, and no Loan shall be made or Letter of
Credit issued in violation of the foregoing.
SECTION 2.3 Letters of Credit.
-----------------
(a) Upon the terms and subject to the conditions herein set forth,
the Borrowers may request a Fronting Bank, at any time and from time to time
after the date hereof and prior to the Termination Date, to issue, and, subject
to the terms and conditions contained herein, such Fronting Bank shall issue,
for the account of the Borrowers one or more Letters of Credit in support of
obligations of the Borrowers or one or more Foreign Subsidiaries that are
acceptable to the Administrative Agent, provided that no Letter of Credit shall
--------
be issued if after giving effect to such issuance (i) the aggregate Letter of
Credit Outstandings would exceed $75,000,000, and (ii) the Total Usage would
exceed (x) prior to the expiration of the Initial Period, the Available
Commitment, and (y) from and after the expiration of the Initial Period, the
lesser of (aa) the Total Commitment and (bb) the Borrowing Base, and, provided
further that no Letter of Credit shall be issued if the Fronting Bank shall have
received notice from the Administrative Agent or the Required Lenders that the
conditions to such issuance have not been met.
(b) No Letter of Credit shall expire later than the earlier of (i)
one year from the issuance thereof, and (ii) five (5) days before the Maturity
Date, provided that if the Termination Date shall occur prior to the expiration
--------
of any Letter of Credit, the Borrowers shall, at or prior to the Termination
Date, except as the Administrative Agent may otherwise agree in writing, (i)
cause all Letters of Credit which expire after the Termination Date to be
returned to the Fronting Bank undrawn and marked "canceled" or (ii) if the
Borrowers are unable to do so in whole or in part, either (x) provide a
"back-to-back" letter of credit to one or more Fronting Banks in a form
satisfactory to such Fronting Bank and the Administrative Agent (in their sole
discretion), issued by a bank satisfactory to such Fronting Bank and the
Administrative Agent (in their sole discretion), in an amount equal to the
greater of (A) an amount, as determined by the Fronting Bank and the
Administrative Agent, equal to the face amount of all outstanding Letters of
Credit plus the sum of all projected contractual obligations to the
Administrative Agent, the Fronting Bank and the Lenders of the Borrowers
thereunder through the expiration date(s) of such Letters of Credit, and (B)
105% of the then undrawn stated amount of all outstanding Letters of Credit
issued by such Fronting Banks and/or (y) deposit cash in the Letter of Credit
Account in an amount which, together with any amounts then held in the Letter of
Credit Account, is equal to the greater of (A) an amount, as determined by the
Fronting Bank and the Administrative Agent, equal to the face amount of all
outstanding Letters of Credit plus the sum of all
27
projected contractual obligations to the Administrative Agent, the Fronting Bank
and the Lenders of the Borrowers thereunder and (B) 105% of the then undrawn
stated amount of all Letter of Credit Outstandings as collateral security for
the Borrowers' reimbursement obligations in connection therewith, such cash to
be remitted to the Borrowers upon the expiration, cancellation or other
termination or satisfaction of such reimbursement obligations.
(c) The Borrowers shall pay to each Fronting Bank, in addition to
such other fees and charges as are specifically provided for in Section 2.21
------------
hereof, such fees and charges in connection with the issuance and processing of
the Letters of Credit issued by such Fronting Bank as are customarily imposed by
such Fronting Bank from time to time in connection with letter of credit
transactions.
(d) Drafts drawn under each Letter of Credit shall be reimbursed
by the Borrowers in Dollars not later than the first Business Day following the
date of draw and shall bear interest from the date of draw until the first
Business Day following the date of draw at a rate per annum equal to the
Alternate Base Rate plus 2.5% and thereafter until reimbursed in full at a rate
per annum equal to the Alternate Base Rate plus 4.5% (computed on the basis of
the actual number of days elapsed over a year of 360 days). The Borrowers shall
effect such reimbursement (x) if such draw occurs prior to the Termination Date
(or the earlier date of termination of the Total Tranche A Commitment), in cash
or through a Borrowing of Revolving Loans without the satisfaction of the
conditions precedent set forth in Section 4.2 or (y) if such draw occurs on or
-----------
after the Termination Date (or the earlier date of termination of the Total
Tranche A Commitment), in cash. Each Lender agrees to make the Loans described
in clause (x) of the preceding sentence notwithstanding a failure to satisfy the
applicable lending conditions thereto or the provisions of Sections 2.2 or 2.29.
------------ ----
(e) Immediately upon the issuance of any Letter of Credit by any
Fronting Bank, such Fronting Bank shall be deemed to have sold to each Lender
other than such Fronting Bank and each such other Lender shall be deemed
unconditionally and irrevocably to have purchased from such Fronting Bank,
without recourse or warranty, an undivided interest and participation, to the
extent of such Lender's Commitment Percentage, in such Letter of Credit, each
drawing thereunder and the obligations of the Borrowers under this Agreement
with respect thereto. Upon any change in the Commitments pursuant to Section
-------
10.3, it is hereby agreed that with respect to all Letter of Credit
----
Outstandings, there shall be an automatic adjustment to the participations
hereby created to reflect the new Commitment Percentages of the assigning and
assignee Lenders. Any action taken or omitted by a Fronting Bank under or in
connection with a Letter of Credit, if taken or omitted in the absence of gross
negligence or willful misconduct, shall not create for such Fronting Bank any
resulting liability to any other Lender.
(f) In the event that a Fronting Bank makes any payment under any
Letter of Credit and the Borrowers shall not have reimbursed such amount in full
to such Fronting Bank pursuant to this Section, the Fronting Bank shall promptly
notify the Administrative Agent, which shall promptly notify each Lender of such
failure, and each Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of the Fronting Bank the amount of such
Lender's Commitment Percentage of such unreimbursed payment in Dollars and in
same day funds. If the Fronting Bank so
28
notifies the Administrative Agent, and the Administrative Agent so notifies the
Lenders prior to 11:00 a.m. (New York City time) on any Business Day, such
Lenders shall make available to the Fronting Bank such Lender's Commitment
Percentage of the amount of such payment on such Business Day in same day funds.
If and to the extent such Lender shall not have so made its Commitment
Percentage of the amount of such payment available to the Fronting Bank, such
Lender agrees to pay to such Fronting Bank, forthwith on demand such amount,
together with interest thereon, for each day from such date until the date such
amount is paid to the Administrative Agent for the account of such Fronting Bank
at the Federal Funds Effective Rate. The failure of any Lender to make available
to the Fronting Bank its Commitment Percentage of any payment under any Letter
of Credit shall not relieve any other Lender of its obligation hereunder to make
available to the Fronting Bank its Commitment Percentage of any payment under
any Letter of Credit on the date required, as specified above, but no Lender
shall be responsible for the failure of any other Lender to make available to
such Fronting Bank such other Lender's Commitment Percentage of any such
payment. Whenever a Fronting Bank receives a payment of a reimbursement
obligation as to which it has received any payments from the Lenders pursuant to
this paragraph, such Fronting Bank shall pay to each Lender which has paid its
Commitment Percentage thereof, in Dollars and in same day funds, an amount equal
to such Lender's Commitment Percentage thereof.
(g) Letters of Credit may be issued for the account of Non-Debtor
Foreign Subsidiaries (subject to availability under Tranche A and the
$75,000,000 sub-limit). The face amount of Letters of Credit issued for the
account of Non-Debtor Foreign Subsidiaries shall constitute a use of the amount
of Intercompany Loans permitted to be made by the Borrowers pursuant to Sections
--------
6.10(iv) and (v).
----------------
(h) Letters of Credit may be issued for the account of the U.K.
Subsidiaries (subject to availability under Tranche A and the $75,000,000
sub-limit). The face amount of Letters of Credit issued for the account of U.K.
Subsidiaries shall constitute a use of the amount of Intercompany Loans
permitted to be made by the Borrowers pursuant to Section 6.10(vi).
----------------
SECTION 2.4 Issuance. Whenever the Borrowers desire a Fronting Bank to
--------
issue a Letter of Credit, they shall give to such Fronting Bank and the
Administrative Agent at least two (2) Business Days' prior written (including
telegraphic, telex, facsimile or cable communication) notice (or such shorter
period as may be agreed upon by the Administrative Agent, the Borrowers and the
Fronting Bank) specifying the date on which the proposed Letter of Credit is to
be issued (which shall be a Business Day), the stated amount of the Letter of
Credit so requested, the expiration date of such Letter of Credit and the name
and address of the beneficiary thereof.
SECTION 2.5 Nature of Letter of Credit Obligations Absolute. The
-----------------------------------------------
obligations of the Borrowers to reimburse the Lenders for drawings made under
any Letter of Credit shall be joint and several, unconditional and irrevocable
and shall be paid strictly in accordance with the terms of this Agreement under
all circumstances, including, without limitation: (i) any lack of validity or
enforceability of any Letter of Credit; (ii) the existence of any claim, setoff,
defense or other right which any Borrower may have at any time against a
beneficiary of any Letter of Credit or against any of the Lenders, whether in
connection with this Agreement, the transactions contemplated herein or any
unrelated transaction;
29
(iii) any draft, demand, certificate or other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
(iv) payment by a Fronting Bank of any Letter of Credit against presentation of
a demand, draft or certificate or other document which does not comply with the
terms of such Letter of Credit; (v) any other circumstance or happening
whatsoever, which is similar to any of the foregoing; or (vi) the fact that any
Event of Default shall have occurred and be continuing.
SECTION 2.6 Making of Loans.
---------------
(a) Except as contemplated by Section 2.11, Loans shall be either
ABR Loans or Eurodollar Loans as the Borrowers may request subject to and in
accordance with this Section, provided that all Loans made pursuant to the same
Borrowing shall, unless otherwise specifically provided herein, be Loans of the
same Type. Each Lender may fulfill its Commitment with respect to any Eurodollar
Loan or ABR Loan by causing any lending office of such Lender to make such Loan;
provided that any such use of a lending office shall not affect the obligation
of the Borrowers to repay such Loan in accordance with the terms of this
Agreement. Each Lender shall, subject to its overall policy considerations, use
reasonable efforts (but shall not be obligated) to select a lending office which
will not result in the payment of increased costs by the Borrowers pursuant to
Sections 2.15 or 2.18. Subject to the other provisions of this Section and the
------------- ----
provisions of Section 2.12, Borrowings of Loans of more than one Type may be
------------
incurred at the same time, provided that no more than fifteen (15) Borrowings of
Eurodollar Loans may be outstanding at any time.
(b) The Borrowers shall give the Administrative Agent prior
written, telex, facsimile or telephonic (confirmed promptly in writing) notice
of each Borrowing of Revolving Loans hereunder of at least three (3) Business
Days for Eurodollar Loans and one (1) Business Day for ABR Loans; such notice
shall be irrevocable and shall specify the amount of the proposed Borrowing
(which shall not be less than $5,000,000 or any integral multiple of $1,000,000
in excess thereof) and the date thereof (which shall be a Business Day) and
shall contain disbursement instructions. Such notice, to be effective, must be
received by the Administrative Agent not later than 12:00 noon, New York City
time, on the third Business Day in the case of Eurodollar Loans and the first
Business Day in the case of ABR Loans, preceding the date on which such
Borrowing is to be made. Such notice shall specify whether the Borrowing then
being requested is to be a Borrowing of ABR Loans or Eurodollar Loans. If no
election is made as to the Type of Loan, such notice shall be deemed a request
for Borrowing of ABR Loans. The Administrative Agent shall promptly notify each
Tranche A Lender of its proportionate share of such Borrowing, the date of such
Borrowing, the Type of Borrowing or Loans being requested and the Interest
Period or Interest Periods applicable thereto, as appropriate. On the Borrowing
date specified in such notice, each Tranche A Lender shall make its share of the
Borrowing available at the office of the Administrative Agent at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, no later than 12:00 noon, New York City time,
in immediately available funds. Upon receipt of the funds made available by the
Tranche A Lenders to fund any Borrowing hereunder, the Administrative Agent
shall disburse such funds in the manner specified in the notice of Borrowing
delivered by the Borrowers.
(c) The Borrowers shall give the Administrative Agent prior notice
of the making of the Term Loans of at least three (3) Business Days if the Term
Loans or a portion thereof are to be
30
made as Eurodollar Loans and one (1) Business Day if the Term Loans are to be
made as ABR Loans; such notice shall be irrevocable and shall specify the amount
of the proposed Borrowing that is to be made as a Eurodollar Loan (which shall
not be less than $5,000,000 or any integral multiple of $1,000,000 in excess
thereof) and the date thereof (which shall be a Business Day) and shall contain
disbursement instructions. Such notice, to be effective, must be received by the
Administrative Agent not later than 12:00 noon, New York City time, on the third
Business Day in the case of Eurodollar Loans and the first Business Day in the
case of ABR Loans, preceding the date on which such Borrowing is to be made.
Such notice shall specify whether the Borrowing then being requested is to be a
Borrowing of ABR Loans or Eurodollar Loans. If no election is made as to the
Type of Loan, such notice shall be deemed a request for Borrowing of ABR Loans.
The Administrative Agent shall promptly notify each Tranche B Lender of its
proportionate share of such Borrowing, the date of such Borrowing, the Type of
Borrowing or Loans being requested and the Interest Period or Interest Periods
applicable thereto, as appropriate. Notwithstanding the foregoing, with respect
to the Borrowing of the Term Loans on the Closing Date the Borrowers may give
notice of a Borrowing of Term Loans to be made as ABR Loans hereunder on the
Closing Date. Such notice, to be effective, must be received by the
Administrative Agent not later than 11:00 a.m., New York City time, on such
Business Day. The Term Loans made on the Closing Date shall initially be ABR
Loans and thereafter may be continued as ABR Loans or refinanced as Eurodollar
Loans pursuant to Section 2.12. On the Borrowing date specified in such notice,
------------
each Tranche B Lender shall make its share of the Borrowing available at the
office of the Administrative Agent at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
no later than 12:00 noon, New York City time, in immediately available funds.
Upon receipt of the funds made available by the Tranche B Lenders to fund any
Borrowing hereunder, the Administrative Agent shall disburse such funds in the
manner specified in the notice of Borrowing delivered by the Borrowers.
SECTION 2.7 Repayment of Loans and Unreimbursed Draws; Evidence of Debt.
-----------------------------------------------------------
(a) The Borrowers hereby jointly and severally unconditionally
promise to pay to the Administrative Agent for the account of each Lender the
then unpaid principal amount of each Loan and each unreimbursed draw under all
Letters of Credit as set forth herein.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the Borrowers to
such Lender resulting from each Loan made by such Lender or participation in
each Letter of Credit in which such Lender is participating, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrowers to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
31
any error therein shall not in any manner affect the obligation of the Borrowers
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrowers shall execute and deliver to such
Lender a promissory note payable to the order of such Lender (or, if requested
by such Lender, to such Lender and its registered assigns) in a form furnished
by the Administrative Agent. Thereafter, the Loans evidenced by such promissory
note and interest thereon shall at all times (including after assignment
pursuant to Section 10.3) be represented by one or more promissory notes in such
------------
form payable to the order of the payee named therein (or, if such promissory
note is a registered note, to such payee and its registered assigns).
SECTION 2.8 Interest on Loans.
-----------------
(a) Subject to the provisions of Section 2.9, each ABR Loan shall
-----------
bear interest (computed, for ABR Loans wherein the Alternate Base Rate is
determined by reference to the Base CD Rate or the Federal Funds Effective Rate,
on the basis of the actual number of days elapsed over a year of 360 days, and
otherwise computed on the basis of the actual number of days elapsed over a year
of 365 days) at a rate per annum equal to the Alternate Base Rate plus 2.50%.
(b) Subject to the provisions of Section 2.9, each Eurodollar Loan
-----------
shall bear interest (computed on the basis of the actual number of days elapsed
over a year of 360 days) at a rate per annum equal, during each Interest Period
applicable thereto, to the Adjusted LIBOR Rate for such Interest Period in
effect for such Borrowing plus 3.50%.
(c) Accrued interest on all Loans shall be payable in arrears on
each Interest Payment Date applicable thereto, at maturity (whether by
acceleration or otherwise), after such maturity on demand and (with respect to
Eurodollar Loans) upon any repayment or prepayment thereof (on the amount
prepaid).
SECTION 2.9 Default Interest. If any Borrower shall default in the
----------------
payment of the principal of or interest on any Loan or in the payment of any
other amount becoming due hereunder (including, without limitation, the
reimbursement pursuant to Section 2.3(d) of any draft drawn under a Letter of
--------------
Credit, whether at stated maturity, by acceleration or otherwise, such Borrower
shall on demand from time to time pay interest, to the extent permitted by law,
on such defaulted amount up to (but not including) the date of actual payment
(after as well as before judgment) at a rate per annum (computed on the basis of
the actual number of days elapsed over a year of 360 days equal to 2% above the
then applicable rate.
SECTION 2.10 Optional Termination or Reduction of Commitment. Upon at
-----------------------------------------------
least two (2) Business Days' prior written notice to the Administrative Agent,
the Borrowers may at any time in whole permanently terminate, or from time to
time in part permanently reduce, the Unused Total Tranche A Commitment. Each
such reduction or termination, as applicable, of the Unused Total Tranche A
Commitment shall be in the principal amount of $5,000,000 or any integral
multiple of $1,000,000 in excess thereof. Any reduction or termination, as
applicable, pursuant to this Section shall
32
be deemed to be a reduction or termination, as applicable, in the amount of such
reduction or termination of the Total Tranche A Commitment and shall be applied
pro rata to reduce the applicable Tranche A Commitment of each Tranche A Lender.
Simultaneously with each reduction or termination, as applicable, of the Unused
Total Tranche A Commitment, the Borrowers shall pay to the Administrative Agent
for the account of each Tranche A Lender the Commitment Fee accrued on the
amount of the Tranche A Commitment of such Lender so terminated or reduced
through the date thereof.
SECTION 2.11 Alternate Rate of Interest. In the event, and on each
--------------------------
occasion, that on the day two (2) Business Days prior to the commencement of any
Interest Period for a Eurodollar Loan, the Administrative Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrowers absent manifest error) that reasonable means do not exist for
ascertaining the applicable Adjusted LIBOR Rate, the Administrative Agent shall,
as soon as practicable thereafter, give written or telegraphic notice of such
determination to the Borrowers and the Lenders, and any request by the Borrowers
for a Borrowing of Eurodollar Loans (including pursuant to a refinancing with
Eurodollar Loans) pursuant to Section 2.6 or 2.12 shall be deemed a request for
----------- ----
a Borrowing of ABR Loans. After such notice shall have been given and until the
circumstances giving rise to such notice no longer exist, each request for a
Borrowing of Eurodollar Loans shall be deemed to be a request for a Borrowing of
ABR Loans.
SECTION 2.12 Refinancing of Loans. The Borrowers shall have the right, at
--------------------
any time, on three (3) Business Days' prior irrevocable notice to the
Administrative Agent (which notice, to be effective, must be received by the
Administrative Agent not later than 1:00 p.m., New York City time, on the third
Business Day preceding the date of any refinancing), (x) to refinance (without
the satisfaction of the conditions set forth in Section 4.2 as a condition to
-----------
such refinancing) any outstanding Borrowing or Borrowings of Loans of one Type
(or a portion thereof) with a Borrowing of Loans of the other Type or (y) to
continue an outstanding Borrowing of Eurodollar Loans for an additional Interest
Period, subject to the following:
(a) as a condition to the refinancing of ABR Loans with Eurodollar
Loans and to the continuation of Eurodollar Loans for an additional Interest
Period, no Event of Default shall have occurred and be continuing at the time of
such refinancing;
(b) if less than a full Borrowing of Loans shall be refinanced,
such refinancing shall be made pro rata among the Lenders in accordance with the
respective principal amounts of the Loans comprising such Borrowing held by the
Lenders immediately prior to such refinancing;
(c) the aggregate principal amount of Loans being refinanced shall
be at least $5,000,000 or any integral multiple of $1,000,000 in excess thereof,
provided that no partial refinancing of a Borrowing of Eurodollar Loans shall
--------
result in the Eurodollar Loans remaining outstanding pursuant to such Borrowing
being less than $5,000,000 in aggregate principal amount;
(d) each Lender shall effect each refinancing by applying the
proceeds of its new Eurodollar Loan or ABR Loan, as the case may be, to its Loan
being refinanced;
33
(e) the Interest Period with respect to a Borrowing of Eurodollar
Loans effected by a refinancing or in respect to the Borrowing of Eurodollar
Loans being continued as Eurodollar Loans shall commence on the date of
refinancing or the expiration of the current Interest Period applicable to such
continuing Borrowing, as the case may be;
(f) a Borrowing of Eurodollar Loans may be refinanced only on the
last day of an Interest Period applicable thereto; and
(g) each request for a refinancing with a Borrowing of Eurodollar
Loans which fails to state an applicable Interest Period shall be deemed to be a
request for an Interest Period of one month.
In the event that the Borrowers shall not give notice to refinance any Borrowing
of Eurodollar Loans, or to continue such Borrowing as Eurodollar Loans, or shall
not be entitled to refinance or continue such Borrowing as Eurodollar Loans, in
each case as provided above, such Borrowing shall automatically be refinanced
with a Borrowing of ABR Loans at the expiration of the then-current Interest
Period. The Administrative Agent shall, after it receives notice from the
Borrowers, promptly give each Lender notice of any refinancing, in whole or
part, of any Loan made by such Lender.
SECTION 2.13 Mandatory Prepayment; Commitment Termination.
--------------------------------------------
(a) If at any time the aggregate principal amount of the
outstanding Loans plus the aggregate Letter of Credit Outstandings exceeds (A)
prior to the expiration of the Initial Period, the Available Commitment, and (B)
from and after the expiration of the Initial Period, the lesser of (x) the Total
Commitment or (y) the Borrowing Base, the Borrowers will within one (1) Business
Day (i) prepay the Loans in an amount necessary to cause the aggregate principal
amount of the outstanding Loans plus the aggregate Letter of Credit
Outstandings, including unreimbursed draws, to be equal to or less than (A)
prior to the expiration of the Initial Period, the Available Commitment, and (B)
from and after the expiration of the Initial Period, the lesser of (x) the Total
Commitment and (y) the Borrowing Base, and (ii) if, after giving effect to the
prepayment in full of the Loans, the aggregate Letter of Credit Outstandings in
excess of the amount of cash held in the Letter of Credit Account exceeds (A)
prior to the expiration of the Initial Period, the Available Commitment, and (B)
from and after the expiration of the Initial Period, the lesser of (x) the Total
Commitment or (y) the Borrowing Base, deposit into the Letter of Credit Account
an amount equal to 105% of the amount by which the aggregate Letter of Credit
Outstandings in excess of the amount of cash held in the Letter of Credit
Account so exceeds (A) prior to the expiration of the Initial Period, the
Available Commitment, and (B) from and after the expiration of the Initial
Period, the lesser of (x) the Total Commitment or (y) the Borrowing Base.
(b) The Borrowers shall, upon the receipt of the Net Proceeds by
any of the Borrowers from any Asset Sales by any Borrower, jointly and
severally, apply such Net Proceeds as follows: first, to repay the then
-----
outstanding Loans; second, deposit an amount in the Letter of Credit Account up
------
to 105% of the then Letter of Credit Outstandings; and thereafter, such Net
----------
Proceeds may be retained by the Borrowers and invested in Permitted Investments
or used for expenditures in the ordinary course of business (subject to
compliance with the terms and conditions of this Agreement).
34
Prepayments of the Loans pursuant to the foregoing shall be effected as follows:
the Tranche A Commitments and Tranche B Commitments shall be reduced on a pro
rata basis by an aggregate amount equal to the Net Proceeds of the subject Asset
Sale; the Revolving Loans shall be prepaid in a proportionate amount equal to
the percentage decrease in the Total Tranche A Commitments; and the Tranche B
Loans shall be prepaid in an amount equal to the decrease in the Total Tranche B
Commitments. Net Proceeds from any Asset Sales by a Non-Debtor Foreign
Subsidiary, net of the amount of any repayment obligations of such Non-Debtor
Foreign Subsidiary with respect to third party financing arrangements, shall (i)
reduce, on a dollar for dollar basis, the amount of postpetition Intercompany
Loans which may be made to the Non-Debtor Foreign Subsidiaries, provided,
--------
however, that in no event shall the permitted amount of postpetition
-------
Intercompany Loans be less than $100,000,000 (before deducting the from time to
time principal balance of third party financing arrangements made available to
the Non-Debtor Foreign Subsidiaries as set forth in Section 6.10), and (ii)
------------
reduce the Tranche A and Tranche B Commitments on a pro rata basis and the
Borrowers shall prepay Revolving Loans in a proportionate amount equal to the
percentage decrease in the Total Tranche A Commitments and shall prepay Term
Loans in an amount equal to the decrease in the Total Tranche B Commitments. Net
Proceeds from any Asset Sales by a U.K. Subsidiary, net of the amount of any
repayment obligations of such U.K. Subsidiary with respect to third party
financing arrangements, shall (i) reduce, on a dollar for dollar basis, the
amount of postpetition Intercompany Loans which may be made to the U.K.
Subsidiaries, and (ii) reduce the Tranche A and Tranche B Commitments on a pro
rata basis and the Borrowers shall prepay Revolving Loans in a proportionate
amount equal to the percentage decrease in the Total Tranche A Commitments and
shall prepay Term Loans in an amount equal to the decrease in the Total Tranche
B Commitments.
(c) Upon the Termination Date, the Total Commitment shall be
terminated in full and the Borrowers shall pay the Loans in full and, if any
Letter of Credit remains outstanding, comply with Section 2.3(b).
--------------
SECTION 2.14 Optional Prepayment of Loans; Reimbursement of Lenders.
------------------------------------------------------
(a) The Borrowers shall have the right at any time and from time
to time to prepay any Loans without penalty (except for any breakage costs
associated with Eurodollar Loans), in whole or in part, (x) with respect to
Eurodollar Loans, upon at least three (3) Business Days' prior written, telex,
facsimile or telephonic (confirmed promptly in writing) notice to the
Administrative Agent and (y) with respect to ABR Loans on the same Business Day
if written, telex, facsimile or telephonic (confirmed promptly in writing)
notice is received by the Administrative Agent prior to 1:00 p.m., New York City
time, and thereafter upon at least one Business Day's prior written, telex,
facsimile or telephonic (confirmed promptly in writing) notice to the
Administrative Agent; provided, however, that (i) each such partial prepayment
-------- -------
shall be in integral multiples of $1,000,000, (ii) no prepayment of Eurodollar
Loans shall be permitted pursuant to this Section 2.14(a) other than on the last
---------------
day of an Interest Period applicable thereto unless such prepayment is
accompanied by the payment of the amounts described in clause (i) of the first
sentence of Section 2.14(b), and (iii) no partial prepayment of a Borrowing of
---------------
Eurodollar Loans shall result in the aggregate principal amount of the
Eurodollar Loans remaining outstanding pursuant to such Borrowing being less
than $5,000,000. Each notice of
35
prepayment shall specify the prepayment date, the principal amount of the Loans
to be prepaid and in the case of Eurodollar Loans, the Borrowing or Borrowings
pursuant to which made, shall be irrevocable and shall commit the Borrowers to
prepay such Loan by the amount and on the date stated therein. The
Administrative Agent shall, promptly after receiving notice from the Borrowers
hereunder, notify each Lender of the principal amount of the Loans held by such
Lender which are to be prepaid, the prepayment date and the manner of
application of the prepayment.
(b) The Borrowers shall reimburse each Lender on demand for any
loss incurred or to be incurred by it in the reemployment of the funds released
(i) resulting from any prepayment (for any reason whatsoever, including, without
limitation, refinancing with ABR Loans) of any Eurodollar Loan required or
permitted under this Agreement, if such Loan is prepaid other than on the last
day of the Interest Period for such Loan (including, without limitation, any
such prepayment in connection with the syndication of the credit facility
evidenced by this Agreement) or (ii) in the event that after the Borrowers
deliver a notice of Borrowing under Section 2.6 in respect of Eurodollar Loans,
-----------
such Loans are not made on the first day of the Interest Period specified in
such notice of Borrowing for any reason other than a breach by such Lender of
its obligations hereunder. Such loss shall be the amount as reasonably
determined by such Lender as the excess, if any, of (A) the amount of interest
which would have accrued to such Lender on the amount so paid or not borrowed at
a rate of interest equal to the Adjusted LIBOR Rate for such Loan, for the
period from the date of such payment or failure to borrow to the last day (x) in
the case of a payment or refinancing with ABR Loans other than on the last day
of the Interest Period for such Loan, of the then current Interest Period for
such Loan, or (y) in the case of such failure to borrow, of the Interest Period
for such Loan which would have commenced on the date of such failure to borrow,
over (B) the amount of interest which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the London interbank market. Each Lender shall deliver to the Borrowers
from time to time one or more certificates setting forth the amount of such loss
as determined by such Lender.
(c) In the event the Borrowers fail to prepay any Loan on the date
specified in any prepayment notice delivered pursuant to Section 2.14(a), the
---------------
Borrowers on demand by any Lender shall pay to the Administrative Agent for the
account of such Lender any amounts required to compensate such Lender for any
loss incurred by such Lender as a result of such failure to prepay, including,
without limitation, any loss, cost or expenses incurred by reason of the
acquisition of deposits or other funds by such Lender to fulfill deposit
obligations incurred in anticipation of such prepayment, but without duplication
of any amounts paid under Section 2.14(b). Each Lender shall deliver to the
---------------
Borrowers from time to time one or more certificates setting forth the amount of
such loss as determined by such Lender.
(d) Any partial prepayment of the Loans by the Borrowers pursuant
to Sections 2.13 or 2.14 shall be applied as specified by the Borrowers or, in
------------- ----
the absence of such specification, as determined by the Administrative Agent,
provided that in the latter case no Eurodollar Loans shall be prepaid pursuant
to Section 2.13 to the extent that such Loan has an Interest Period ending after
------------
the required date of prepayment unless and until all outstanding ABR Loans and
Eurodollar Loans with Interest Periods ending on such date have been repaid in
full.
36
(e) Once prepaid, Term Loans may not be reborrowed.
SECTION 2.15 Reserve Requirements; Change in Circumstances.
---------------------------------------------
(a) Notwithstanding any other provision herein, if after the date
of this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law) shall change the basis of taxation of payments to any Lender of
the principal of or interest on any Eurodollar Loan made by such Lender or any
fees or other amounts payable hereunder (other than changes in respect of Taxes,
Other Taxes and taxes imposed on, or measured by, the net income or overall
gross receipts or franchise taxes of such Lender by the jurisdiction in which
such Lender has its principal office or in which the applicable lending office
for such Eurodollar Loan is located or by any political subdivision or taxing
authority therein, or by any other jurisdiction or by any political subdivision
or taxing authority therein other than a jurisdiction in which such Lender would
not be subject to tax but for the execution and performance of this Agreement),
or shall impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of or
credit extended by such Lender (except any such reserve requirement which is
reflected in the Adjusted LIBOR Rate) or shall impose on such Lender or the
London interbank market any other condition affecting this Agreement or the
Eurodollar Loans made by such Lender, and the result of any of the foregoing
shall be to increase the cost to such Lender of making or maintaining any
Eurodollar Loan or to reduce the amount of any sum received or receivable by
such Lender hereunder (whether of principal, interest or otherwise) by an amount
deemed by such Lender to be material, then the Borrowers will pay to such Lender
in accordance with paragraph (c) below such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction suffered.
(b) If any Lender shall have determined that the adoption or
effectiveness after the date hereof of any law, rule, regulation or guideline
regarding capital adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or any lending office of
such Lender) or any Lender's holding company with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Lender's capital or on the capital of such
Lender's holding company, if any, as a consequence of this Agreement, the Loans
made by such Lender pursuant hereto, such Lender's Commitment hereunder or the
issuance of, or participation in, any Letter of Credit by such Lender to a level
below that which such Lender or such Lender's holding company could have
achieved but for such adoption, change or compliance (taking into account
Lender's policies and the policies of such Lender's holding company with respect
to capital adequacy) by an amount deemed by such Lender to be material, then
from time to time the Borrowers shall pay to such Lender such additional amount
or amounts as will compensate such Lender or such Lender's holding company for
any such reduction suffered.
(c) A certificate of each Lender setting forth such amount or
amounts as shall be necessary to compensate such Lender or its holding company
as specified in paragraph (a) or (b)
37
above, as the case may be, shall be delivered to the Borrowers and shall be
conclusive absent manifest error. The Borrowers shall pay each Lender the amount
shown as due on any such certificate delivered to it within ten (10) days after
its receipt of the same. Any Lender receiving any such payment shall promptly
make a refund thereof to the Borrowers if the law, regulation, guideline or
change in circumstances giving rise to such payment is subsequently deemed or
held to be invalid or inapplicable.
(d) Failure on the part of any Lender to demand compensation for
any increased costs or reduction in amounts received or receivable or reduction
in return on capital with respect to any period shall not constitute a waiver of
such Lender's right to demand compensation with respect to such period or any
other period. The protection of this Section shall be available to each Lender
regardless of any possible contention of the invalidity or inapplicability of
the law, rule, regulation, guideline or other change or condition which shall
have occurred or been imposed.
SECTION 2.16 Change in Legality.
------------------
(a) Notwithstanding anything to the contrary contained elsewhere
in this Agreement, if (x) any change after the date of this Agreement in any law
or regulation or in the interpretation thereof by any Governmental Authority
charged with the administration thereof shall make it unlawful for a Lender to
make or maintain a Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to a Eurodollar Loan or (y) at any time any
Lender determines that the making or continuance of any of its Eurodollar Loans
has become impracticable as a result of a contingency occurring after the date
hereof which adversely affects the London interbank market or the position of
such Lender in such market, then, by written notice to the Borrowers, such
Lender may (i) declare that Eurodollar Loans will not thereafter be made by such
Lender hereunder, whereupon any request by the Borrowers for a Eurodollar
Borrowing shall, as to such Lender only, be deemed a request for an ABR Loan
unless such declaration shall be subsequently withdrawn; and (ii) require that
all outstanding Eurodollar Loans made by it be converted to ABR Loans, in which
event all such Eurodollar Loans shall be automatically converted to ABR Loans as
of the effective date of such notice as provided in paragraph (b) below. In the
event any Lender shall exercise its rights under clause (i) or (ii) of this
paragraph (a), all payments and prepayments of principal which would otherwise
have been applied to repay the Eurodollar Loans that would have been made by
such Lender or the converted Eurodollar Loans of such Lender shall instead be
applied to repay the ABR Loans made by such Lender in lieu of, or resulting from
the conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.16, a notice to the Borrowers
------------
by any Lender pursuant to paragraph (a) above shall be effective, if lawful, and
if any Eurodollar Loans shall then be outstanding, on the last day of the
then-current Interest Period, otherwise, such notice shall be effective on the
date of receipt by the Borrowers.
SECTION 2.17 Pro Rata Treatment, etc. All payments and repayments of
-----------------------
principal and interest in respect of the Loans (except as provided in Sections
--------
2.15 and 2.16) shall be made pro rata among the Lenders in accordance with the
---- ----
then outstanding principal amount of the Loans and/or participations in Letter
of Credit Outstandings and all outstanding undrawn Letters of Credit (and the
unreimbursed amount of drawn Letters of Credit) hereunder and all payments of
Commitment Fees and
38
Letter of Credit Fees (other than those payable to a Fronting Bank) shall be
made pro rata among the Lenders in accordance with their Commitments. All
payments by the Borrowers hereunder shall be (i) except as otherwise provided in
Section 2.18, net of any tax applicable to the Borrowers and (ii) made in
------------
Dollars in immediately available funds, without defense, setoff or counterclaim
and free of any restriction or condition, at the office of the Administrative
Agent by 12:00 noon, New York City time, on the date on which such payment shall
be due. Interest in respect of any Loan hereunder shall accrue from and
including the date of such Loan to but excluding the date on which such Loan is
paid in full or converted to a Loan of a different Type.
SECTION 2.18 Taxes.
-----
(a) Except as otherwise provided in this Section 2.18, any and all
------------
payments by the Borrowers hereunder shall be made free and clear of and without
deduction for any and all current or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding (i)
taxes imposed on or measured by the net income, net profit or overall gross
receipts of the Administrative Agent or any Lender (or any transferee or
assignee thereof, including a participation holder (any such entity being called
a "Transferee")) and franchise taxes imposed on the Administrative Agent or any
----------
Lender (or Transferee) by the United States or any jurisdiction under the laws
of which the Administrative Agent or any such Lender (or Transferee) is
organized or in which the applicable lending office of any such Lender (or
Transferee) or applicable office of the Administrative Agent, is located or any
political subdivision thereof or by any other jurisdiction or by any political
subdivision or taxing authority therein other than a jurisdiction in which the
Administrative Agent or such Lender (or Transferee) would not be subject to tax
but for the execution and performance of this Agreement and (ii) taxes, levies,
imposts, deductions, charges or withholdings ("Amounts") with respect to
-------
payments hereunder to a Lender (or Transferee) or the Administrative Agent in
accordance with laws in effect on the later of the date of this Agreement and
the date such Lender (or Transferee) or the Administrative Agent becomes a
Lender (or Transferee or Administrative Agent, as the case may be) but not
excluding, with respect to such Lender (or Transferee) or the Administrative
Agent, any increase in such Amounts solely as a result of any change in such
laws occurring after such later date or any Amounts that would not have been
imposed but for actions (other than actions contemplated by this Agreement)
taken by the Borrowers after such later date (all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrowers shall be required by law
-----
to deduct any Taxes from or in respect of any sum payable hereunder to the
Lenders (or any Transferee) or the Administrative Agent, (i) the sum payable
shall be increased by the amount necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) such Lender (or Transferee) or the Administrative Agent (as the
case may be) shall receive an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrowers shall make such deductions and
(iii) the Borrowers shall pay the full amount deducted to the relevant taxing
authority or other Governmental Authority in accordance with applicable law.
(b) In addition, the Borrowers agree to pay any current or future
stamp or documentary taxes or any other excise or property taxes, charges,
assessments or similar levies that
39
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
Document (hereinafter referred to as "Other Taxes").
-----------
(c) The Borrowers will indemnify each Lender (or Transferee) and
the Administrative Agent for the full amount of Taxes and Other Taxes paid by
such Lender (or Transferee) or the Administrative Agent, as the case may be, and
any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted by the relevant taxing authority or other Governmental
Authority. Such indemnification shall be made within thirty (30) days after the
date any Lender (or Transferee) or the Administrative Agent, as the case may be,
makes written demand therefor. If a Lender (or Transferee) or the Administrative
Agent shall become aware that it is entitled to receive a refund in respect of
Taxes or Other Taxes as to which it has been indemnified by the Borrowers
pursuant to this Section, it shall promptly notify the Borrowers of the
availability of such refund and shall, within thirty (30) days after receipt of
a request by the Borrowers, apply for such refund at the Borrowers' expense. If
any Lender (or Transferee) or the Administrative Agent receives a refund in
respect of any Taxes or Other Taxes as to which it has been indemnified by the
Borrowers pursuant to this Section, it shall promptly notify the Borrowers of
such refund and shall, within thirty (30) days after receipt of a request by the
Borrowers (or promptly upon receipt, if the Borrowers have requested application
for such refund pursuant hereto), repay such refund to the Borrowers (to the
extent of amounts that have been paid by the Borrowers under this Section with
respect to such refund plus interest that is received by the Lender (or
Transferee) or the Administrative Agent as part of the refund), net of all
out-of-pocket expenses of such Lender (or Transferee) or the Administrative
Agent and without additional interest thereon; provided that the Borrowers, upon
the request of such Lender (or Transferee) or the Administrative Agent, agree to
return such refund (plus penalties, interest or other charges) to such Lender
(or Transferee) or the Administrative Agent in the event such Lender (or
Transferee) or the Administrative Agent is required to repay such refund.
Nothing contained in this sub-Section (c) shall require any Lender (or
Transferee) or the Administrative Agent to make available any of its tax returns
(or any other information relating to its taxes that it deems to be
confidential).
(d) Within thirty (30) days after the date of any payment of Taxes
or Other Taxes withheld by the Borrowers in respect of any payment to any Lender
(or Transferee) or the Administrative Agent, the Borrowers will furnish to the
Administrative Agent, at its address referred to on the signature pages hereof,
the original or a certified copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section shall
survive the payment in full of the principal of and interest on all Loans made
hereunder.
(f) Each Lender (and Transferee) and the Administrative Agent
shall, if not a United States Person (as such term is defined in Section
7701(a)(30) of the Code), on or prior to the Closing Date (in the case of each
Lender listed on the signature pages hereof on the Closing Date) or on or prior
to the date of the Assignment and Acceptance pursuant to which it becomes a
Lender (in the case of each other Lender), deliver to the Borrowers and the
Administrative Agent such certificates,
40
documents and other evidence, as required by the Code or Treasury Regulations
issued pursuant thereto, including two original copies of (A) Internal Revenue
Service Form W-9 (unless such Lender (or Transferee) or the Administrative Agent
is an "exempt recipient" as defined in Treasury Regulations Section 1.6049-4(c)
for which no withholding is required) and two original copies of (B) Internal
Revenue Service Forms 1001, 4224, W-8BEN or W-8ECI and any other certificate or
statement of exemption required by Treasury Regulation Section 1.1441-1,
1.1441-4 or 1.1441-6(c) or any subsequent version thereof or successors thereto,
properly completed and duly executed by such Lender (or Transferee) or the
Administrative Agent to establish that such payment is (i) not subject to United
States Federal withholding tax under the Code because such payment is
effectively connected with the conduct by such Lender (or Transferee) or the
Administrative Agent of a trade or business in the United States or (ii) totally
exempt from United States Federal withholding tax or subject to a reduced rate
of such tax under a provision of an applicable tax treaty. Unless the Borrowers
and the Administrative Agent have received forms or other documents satisfactory
to them indicating that such payments hereunder are not subject to United States
Federal withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty, the Borrowers or the Administrative Agent shall withhold
taxes from such payments at the applicable statutory rate.
(g) The Borrowers shall not be required to pay any additional
amounts to any Lender (or Transferee) or the Administrative Agent in respect of
United States Federal withholding tax pursuant to sub- Section(a) above if the
obligation to pay such additional amounts would not have arisen but for a
failure by such Lender (or Transferee) or the Administrative Agent to comply
with the provisions of sub- Section(f) above.
(h) Any Lender (or Transferee) or the Administrative Agent
claiming any additional amounts payable pursuant to this Section 2.18 shall use
------------
reasonable efforts (consistent with legal and regulatory restrictions) to file
any certificate or document requested by the Borrowers or to change the
jurisdiction of its applicable lending office if the making of such a filing or
change would avoid the need for or reduce the amount of any such additional
amounts that may thereafter accrue and would not, in the sole determination of
such Lender (or Transferee) or the Administrative Agent, be otherwise materially
disadvantageous to such Lender (or Transferee) or the Administrative Agent.
SECTION 2.19 Certain Fees. The Borrowers shall pay to the Administrative
------------
Agent, for the respective accounts of the Administrative Agent and the Lenders,
the fees set forth in that certain fee letter dated September 21, 2001 among the
Administrative Agent, ▇.▇. ▇▇▇▇▇▇ Securities Inc. and the Borrowers at the times
set forth therein.
SECTION 2.20 Commitment Fee. The Borrowers shall pay to the Lenders a
--------------
commitment fee (the "Commitment Fee") for the period commencing on September 21,
--------------
2001 to the Termination Date or the earlier date of termination of the
Commitment calculated (on the basis of the actual number of days elapsed over a
year of 360 days) at a rate equal to the Commitment Fee Percentage on the
average daily Unused Total Commitment during the preceding quarter. The issuance
of Letters of Credit shall be treated as usage of the Commitment. Such
Commitment Fee, to the extent then accrued, shall be payable (x) monthly, in
arrears, on the last calendar day of each month, (y) on the Termination Date and
(z) as provided in Section 2.10 hereof, upon any reduction or termination in
------------
whole or in part of the Total Commitment.
41
SECTION 2.21 Letter of Credit Fees. The Borrowers shall pay with respect
---------------------
to each Letter of Credit (i) to the Administrative Agent on behalf of the
Lenders a fee calculated (on the basis of the actual number of days elapsed over
a year of 360 days) at a rate equal to 3.50% per annum on the undrawn stated
amount thereof, and (ii) to the Fronting Bank such Fronting Bank's customary
fees for issuance, amendments and processing referred to in Section 2.3. In
-----------
addition, the Borrowers agree to pay each Fronting Bank for its account a
fronting fee in respect of each Letter of Credit issued by such Fronting Bank,
for the period from and including the date of issuance of such Letter of Credit
to and including the date of termination of such Letter of Credit, computed at
the rate set forth in the Fee Letter, and payable at times to be determined by
such Fronting Bank, the Borrowers and the Administrative Agent. Accrued fees
described in clause (i) of the first sentence of this paragraph in respect of
each Letter of Credit shall be due and payable monthly in arrears on the last
calendar day of each month and on the Termination Date, or such earlier date as
the Total Commitment is terminated. Accrued fees described in clause (ii) of the
first sentence of this paragraph in respect of each Letter of Credit shall be
payable at times to be determined by the Fronting Bank, the Borrowers and the
Administrative Agent.
SECTION 2.22 Nature of Fees. All Fees shall be paid on the dates due, in
--------------
immediately available funds, to the Administrative Agent for the respective
accounts of the Administrative Agent and the Lenders, as provided herein and in
the letter described in Section 2.19. Once paid, none of the Fees shall be
------------
refundable under any circumstances.
SECTION 2.23 Priority and Liens.
------------------
(a) The Borrowers hereby covenant, represent and warrant that,
upon entry of the Interim Order, the Obligations of the Borrowers hereunder and
under the Loan Documents and in respect of Indebtedness permitted by Section
-------
6.3(v): (i) pursuant to Section 364(c)(1) of the Bankruptcy Code, shall at all
------
times constitute an allowed Superpriority Claim; (ii) pursuant to Section
364(c)(2) of the Bankruptcy Code, shall at all times be secured by a perfected
first priority Lien on all unencumbered property of the Borrowers and on all
cash maintained in the Letter of Credit Account and any direct investments of
the funds contained therein, provided that amounts in the Letter of Credit
--------
Account shall not be subject to the Carve-Out; (iii) pursuant to Section
364(c)(3) of the Bankruptcy Code, shall be secured by a perfected Lien upon all
property of the Borrowers that is subject to valid and perfected Liens in
existence on the Filing Date (including the perfected liens on the stock of
certain Subsidiaries of the Parent ("Stock Liens") in favor of (x) the trustee
-----------
for the holders of Indebtedness of the Parent under the Indentures, and (y) the
holders of obligations under the Existing Credit Agreement and the Surety Bonds)
or that is subject to valid Liens in existence on the Filing Date that are
perfected subsequent to the Filing Date as permitted by Section 546(b) of the
Bankruptcy Code (other than certain property that is subject to the existing
Liens that secure obligations under the Existing Agreements, which liens shall
be primed by the liens to be granted to the Administrative Agent described in
the following clause (iv); and in addition, (iv) pursuant to Section 364(d)(1)
of the Bankruptcy Code, be secured by a perfected first priority, senior priming
Lien on all of the property of the Borrowers (including, without limitation,
inventory, receivables, rights under license agreements, property, plant and
equipment and interests in leaseholds) that is subject to the existing liens
(the
42
"Primed Liens", it being understood that the Stock Liens shall not be primed or
------------
constitute part of the Primed Liens) which secure (x) on a pari passu basis, the
obligations of the Borrowers to the lenders party to the Existing Credit
Agreement and the obligations of the Borrowers in connection with the Surety
Bonds, and (y) other obligations or Indebtedness of the Borrowers pursuant to
the other Existing Agreements, all of which Primed Liens shall be primed by and
made subject and subordinate to the perfected first priority senior Liens to be
granted to the Administrative Agent, which senior priming Liens in favor of the
Administrative Agent shall also prime any Liens granted after the commencement
of the Cases to provide adequate protection Liens in respect of any of the
Primed Liens but shall not prime Liens, if any, to the extent such Liens secure
obligations (other than obligations under the Existing Agreements) in an
aggregate amount less than or equal to $20,000,000, subject in each case only to
(x) in the event of the occurrence and during the continuance of an Event of
Default or an event that would constitute an Event of Default with the giving of
notice or lapse of time or both, the payment of allowed and unpaid professional
fees and disbursements incurred by the Borrowers and any statutory committees
appointed in the Cases in an aggregate amount not in excess of $5,000,000 and
(y) the payment of fees pursuant to 28 U.S.C. ss. 1930 and to the Clerk of the
Bankruptcy Court (collectively, the "Carve-Out"), provided that no portion of
--------- --------
the Carve-Out shall be utilized for the payment of professional fees and
disbursements incurred in connection with any challenge to the amount, extent,
priority, validity, perfection or enforcement of the Indebtedness of the
Borrowers owed with respect to the parties primed by the priming Liens or to the
collateral securing such Indebtedness or any other action against such parties.
Amounts in the Letter of Credit Account shall not be subject to the Carve-Out.
By execution hereof, the Borrowers hereby consent to the priming Liens
referenced in clause (iv) above. Amounts in the Letter of Credit Account shall
not be subject to the Carve-Out. Notwithstanding the foregoing, so long as no
Event of Default or event which with the giving of notice or lapse of time or
both would constitute an Event of Default shall have occurred and be continuing,
the Borrowers shall be permitted to pay compensation and reimbursement of
expenses allowed and payable under 11 U.S.C. ss. 330 and 11 U.S.C. ss. 331, as
the same may be due and payable, and any compensation and expenses previously
paid, or accrued but unpaid, prior to the occurrence of such Event of Default
shall not reduce the Carve-Out. Notwithstanding the foregoing or any provision
of the Security and Pledge Agreement to the contrary, Collateral shall not
include any of the Borrowers' avoidance actions under Sections 544 through 549
of the Bankruptcy Code.
(b) To the extent a prepetition creditor has a lien on any
prepetition intercompany unsecured claims between and among the Borrowers and no
liens on any other assets of the Borrowers other than the stock of Restricted
Subsidiaries (as defined in the Indentures), such liens shall not be primed,
provided, however, that no payments may be made on account of such prepetition
-------- -------
claims and the liens of the prepetition creditors shall not extend to the
collateral securing the Indebtedness created by this Agreement.
(c) As to all real property the title to which is held by a
Borrower or the possession of which is held by a Borrower pursuant to leasehold
interest, the Borrowers hereby assign and convey as security, grant a security
interest in, hypothecate, mortgage, pledge and set over unto the Administrative
Agent on behalf of the Lenders all of the right,
43
title and interest of the Borrowers in all of such owned real property and in
all such leasehold interests, together in each case with all of the right, title
and interest of the Borrowers in and to all buildings, improvements, and
fixtures related thereto, any lease or sublease thereof, all general intangibles
relating thereto and all proceeds thereof. The Borrowers acknowledge that,
pursuant to the Interim Order (or the Final Order, as applicable), the Liens in
favor of the Administrative Agent on behalf of the Lenders in all of such real
property and leasehold instruments of the Borrowers shall be perfected without
the recordation of any instruments of mortgage or assignment. The Borrowers
further agree that, upon the request of the Administrative Agent, in the
exercise of its business judgment, the Borrowers shall enter into separate fee
and leasehold mortgages in recordable form with respect to such properties on
terms satisfactory to the Administrative Agent.
(d) To the extent any Borrower makes aggregate payments to the
Lenders in excess of the aggregate amount of all Loans received by such Borrower
from the Lenders after the commencement of the Cases, then such Borrower, after
the payment in full of all obligations of the Borrowers in respect of the
Commitment and the termination of the Commitment, shall be entitled to a claim
under Section 364(c)(1) of the Bankruptcy Code against each other Borrower, in
such amount as may be determined by the Bankruptcy Court taking into account the
relative benefits received by each such person, and such claims shall be deemed
to be subordinate and junior in all respects to the superpriority claims of the
Lenders and the superpriority claims granted as adequate protection to the
Primed Parties.
SECTION 2.24 Use of Cash Collateral. Notwithstanding anything to the
----------------------
contrary contained herein, the Borrowers shall not be permitted (i) to request a
Borrowing under Section 2.6 or request the issuance of a Letter of Credit under
-----------
Section 2.3 unless the Bankruptcy Court shall have entered the Interim Order or
-----------
(ii) to request a Borrowing under Section 2.6 unless the Borrowers shall at that
-----------
time have the use of all cash collateral subject to the Orders for the purposes
described in Section 3.10.
------------
SECTION 2.25 Right of Set-Off. Subject to the provisions of Section 7.1,
---------------- -----------
upon the occurrence and during the continuance of any Event of Default, the
Administrative Agent and each Lender is hereby authorized at any time and from
time to time, to the fullest extent permitted by law and without further order
of or application to the Bankruptcy Court, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other Indebtedness at any time owing by the Administrative Agent and
each such Lender to or for the credit or the account of any Borrower against any
and all of the obligations of such Borrower now or hereafter existing under the
Loan Documents, irrespective of whether or not such Lender shall have made any
demand under any Loan Document and although such obligations may not have been
accelerated. Each Lender and the Administrative Agent agrees promptly to notify
the Borrowers after any such set-off and application made by such Lender or by
the Administrative Agent, as the case may be, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Lender and the Administrative Agent under this Section are in
addition to other rights and remedies which such Lender and the Administrative
Agent may have upon the occurrence and during the continuance of any Event of
Default.
SECTION 2.26 Security Interest in Letter of Credit Account. Pursuant to
---------------------------------------------
Section 364(c)(2) of the Bankruptcy Code, the Borrowers hereby assign and pledge
to the Administrative Agent, for its
44
benefit and for the ratable benefit of the Lenders, and hereby grant to the
Administrative Agent, for its benefit and for the ratable benefit of the
Lenders, a first priority security interest, senior to all other Liens, if any,
in all of the Borrowers' right, title and interest in and to the Letter of
Credit Account and any direct investment of the funds contained therein. Cash
held in the Letter of Credit Account shall not be available for use by the
Borrowers, whether pursuant to Section 363 of the Bankruptcy Code or otherwise.
SECTION 2.27 Payment of Obligations. Subject to the provisions of Section
---------------------- -------
7.1, upon the maturity (whether by acceleration or otherwise) of any of the
---
Obligations under this Agreement or any of the other Loan Documents of the
Borrowers, the Lenders shall be entitled to immediate payment of such
Obligations without further application to or order of the Bankruptcy Court.
SECTION 2.28 No Discharge; Survival of Claims. Each of the Borrowers
--------------------------------
agrees that (i) its obligations hereunder shall not be discharged by the entry
of an order confirming a Reorganization Plan (and each of the Borrowers,
pursuant to Section 1141(d)(4) of the Bankruptcy Code, hereby waives any such
discharge) and (ii) the Superpriority Claim granted to the Administrative Agent
and the Lenders pursuant to the Order and described in Section 2.23 shall not be
------- ----
affected in any manner by the entry of an order confirming a Plan of
Reorganization.
SECTION 2.29 Replacement of Certain Lenders. In the event a Lender
------------------------------
("Affected Lender") shall have: (i) failed to fund its Commitment Percentage of
---------------
any Loan requested by the Borrowers or to fund its Commitment Percentage of any
unreimbursed payment made by the Fronting Bank, which such Lender is obligated
to fund under the terms of this Agreement and which failure has not been cured,
(ii) requested compensation from the Borrowers under Section 2.15 with respect
------- ----
to increased costs or capital or under Section 2.18 to recover Taxes, Other
------------
Taxes or other additional costs incurred by such Lender which, in any case, are
not being incurred generally by the other Lenders, or (iii) delivered a notice
pursuant to Section 2.16 claiming that such Lender is unable to extend
------------
Eurodollar Loans to the Borrowers for reasons not generally applicable to the
other Lenders, then, in any case, the Borrowers or the Administrative Agent may
make written demand on such Affected Lender (with a copy to the Administrative
Agent in the case of a demand by the Borrowers and a copy to the Borrowers in
the case of a demand by the Administrative Agent) for the Affected Lender to
assign, and such Affected Lender shall use commercially reasonable efforts to
assign pursuant to one or more duly executed Assignments and Acceptances five
(5) Business Days after the date of such demand, to one or more financial
institutions that comply with the provisions of Section 10.3 which the Borrowers
------------
or the Administrative Agent, as the case may be, shall have engaged for such
purpose ("Replacement Lender"), all of such Affected Lender's rights and
------------------
obligations under this Agreement and the other Loan Documents (including,
without limitation, its Commitment, all Loans owing to it, all of its
participation interests in existing Letters of Credit, and its obligation to
participate in additional Letters of Credit hereunder) in accordance with
Section 10.3. The Administrative Agent agrees, upon the occurrence of such
------------
events with respect to an Affected Lender and upon the written request of the
Borrowers, to use its reasonable efforts to obtain the Commitments from one or
more financial institutions to act as a Replacement Lender. The Administrative
Agent is authorized to execute one or more of such Assignments and Acceptances
as attorney-in-fact for any Affected Lender failing to
45
execute and deliver the same within five (5) Business Days after the date of
such demand. Further, with respect to such assignment the Affected Lender shall
have concurrently received, in cash, all amounts due and owing to the Affected
Lender hereunder or under any other Loan Document, including, without
limitation, the aggregate outstanding principal amount of the Loans owed to such
Lender, together with accrued interest thereon through the date of such
assignment, amounts payable under Section 2.15 with respect to such Affected
------------
Lender and compensation payable under Section 2.20 in the event of any
------------
replacement of any Affected Lender under clause (ii) or clause (iii) of this
Section 2.29; provided that upon such Affected Lender's replacement, such
------------ --------
Affected Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.15, 10.5 and 10.6, as well as to any fees
------------------- ----
accrued for its account hereunder and not yet paid, and shall continue to be
obligated under Section 8.6 with respect to losses, obligations, liabilities,
-----------
damages, penalties, actions, judgments, costs, expenses or disbursements for
matters which occurred prior to the date the Affected Lender is replaced.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to make Loans and issue and/or
participate in Letters of Credit hereunder, each of the Borrowers, jointly and
severally, represent and warrant as follows:
SECTION 3.1 Organization and Authority. Each of the Borrowers (i) is
--------------------------
duly organized, validly existing and in good standing under the law of its
jurisdiction of organization; (ii) is duly qualified to do business and in good
standing in each jurisdiction in which the failure to so qualify would have a
material adverse effect on the financial condition, operations, business,
properties or assets of the Borrowers taken as a whole; (iii) subject to the
entry by the Bankruptcy Court of the Interim Order (or the Final Order, as
applicable), has the requisite power and authority to effect the transactions
contemplated hereby, and by the other Loan Documents to which it is a party, and
(iv) subject to the entry by the Bankruptcy Court of the Interim Order (or the
Final Order, as applicable), has all requisite power and authority and the legal
right to own and operate its properties, and to conduct its business as now or
currently proposed to be conducted.
SECTION 3.2 Due Execution. Upon the entry by the Bankruptcy Court of the
-------------
Interim Order (or the Final Order, as applicable), the execution, delivery and
performance by each of the Borrowers of each of the Loan Documents to which it
is a party, including, without limitation, the grant and pledge by the Borrowers
of the security interests granted by the Security and Pledge Agreement, (i) are
within the respective powers of each of the Borrowers, have been duly authorized
by all necessary action, including the consent of shareholders, partners or
members, where required, and do not (A) contravene the Organizational Documents
of any of the Borrowers, (B) violate any law (including, without limitation, the
Securities Exchange Act of 1934) or regulation (including, without limitation,
Regulations T, U or X of the Board), or any order or decree of any court or
Governmental Authority, (C) conflict with or result in a breach of, or
constitute a default under, any indenture, mortgage or deed of trust entered
into after the Filing Date or any lease, agreement or other instrument entered
into after the Filing Date binding on the Borrowers or any of their respective
properties, or (D) result in or require the creation or imposition of any Lien
upon any of the property of any of the Borrowers other than Liens granted
pursuant to this Agreement; and (ii) do not require the consent, authorization
by or approval of or notice to or filing or registration with any Governmental
Authority other than the entry of the Interim Order (or
46
the Final Order, as applicable). Except for the entry of the Interim Order (or
the Final Order, as applicable) no authorization, approval or other action by,
and no notice to or filing with, any Governmental Authority or regulatory body
is required for the perfection of the security interests or the exercise by the
Administrative Agent or the Lenders of their respective rights and remedies
under the Loan Documents. Upon the entry by the Bankruptcy Court of the Interim
Order (or the Final Order, as applicable), this Agreement shall have been duly
executed and delivered by each of the Borrowers. Upon the entry by the
Bankruptcy Court of the Interim Order (or the Final Order, as applicable), this
Agreement, and each of the other Loan Documents to which the Borrowers are or
will be a party, when delivered hereunder or thereunder, will be, a legal, valid
and binding obligation of each Borrower, enforceable against the Borrowers in
accordance with its terms and the Orders.
SECTION 3.3 Statements Made. The information that has been delivered in
---------------
writing by any of the Borrowers to the Administrative Agent or to the Bankruptcy
Court in connection with any Loan Document, and any financial statement
delivered pursuant hereto or thereto (other than to the extent that any such
statements constitute projections), taken as a whole and in light of the
circumstances in which made, contains no untrue statement of a material fact and
does not omit to state a material fact necessary to make such statements not
misleading; and, to the extent that any such information constitutes
projections, such projections were prepared in good faith on the basis of
assumptions, methods, data, tests and information believed by the Borrowers to
be reasonable at the time such projections were furnished.
SECTION 3.4 Financial Statements. The Borrowers have furnished the
--------------------
Lenders with copies of (i) the audited consolidated financial statement and
schedules of the Borrowers and their Subsidiaries for the fiscal year ended
December 31, 2000 and (ii) the unaudited consolidated financial statements and
schedules of the Borrowers and their Subsidiaries for the fiscal quarters ended
on March 31, 2001 and June 30, 2001. Such financial statements present fairly
the financial condition and results of operations of the Borrowers and their
Subsidiaries on a consolidated basis as of such dates and for such periods; such
balance sheets and the notes thereto disclose all liabilities, direct or
contingent, of the Borrowers and their Subsidiaries as of the dates thereof
required to be disclosed by GAAP and such financial statements were prepared in
a manner consistent with GAAP, subject (in the case of each fiscal quarter
statement) to normal year end adjustments and the absence of footnotes. No
material adverse change in the operations, businesses, properties, assets,
prospects or condition (financial or otherwise) of the Borrowers and their
Subsidiaries, taken as a whole, has occurred from that set forth in the
Borrowers' consolidated financial statements for the fiscal year ended December
31, 2000 and the fiscal quarter ended June 30, 2001 or otherwise disclosed to
the Lenders in the Confidential Information Memorandum other than those which
customarily occur as a result of events leading up to and following the
commencement of a proceeding under Chapter 11 of the Bankruptcy Code and the
commencement of the Cases.
SECTION 3.5 Ownership. Each of the Persons listed on Schedule 3.5 is a
--------- ------------
direct or indirect Subsidiary of the Borrowers and Schedule 3.5 correctly sets
------------
forth the ownership interest of each of the Borrowers in their respective
Subsidiaries, in each case as of the Closing Date. None of the
47
Borrowers owns any other Subsidiaries, whether directly or indirectly, other
than as set forth on Schedule 3.5.
------------
SECTION 3.6 Liens. There are no Liens of any nature whatsoever on any
-----
assets of any of the Borrowers or their Subsidiaries other than (i) Permitted
Liens, and (ii) Liens in favor of the Administrative Agent and the Lenders.
Neither the Borrowers nor their Subsidiaries are parties to any contract,
agreement, lease or instrument the performance of which, either unconditionally
or upon the happening of an event, will result in or require the creation of a
Lien on any assets of any Borrower or any of their Subsidiaries or otherwise
result in a violation of this Agreement other than the Liens granted to the
Administrative Agent and the Lenders as provided for in this Agreement.
SECTION 3.7 Compliance with Law.
-------------------
(a) (i) The operations of the Borrowers and their Subsidiaries
comply in all material respects with all applicable environmental, health and
safety statutes and regulations, including, without limitation, regulations
promulgated under the Resource Conservation and Recovery Act (42 U.S.C. ▇▇.▇▇.
6901 et seq.); (ii) none of the operations of the Borrowers or their
Subsidiaries is the subject of any Federal or state investigation evaluating
whether any remedial action involving a material expenditure by the Borrowers is
needed to respond to a release of any Hazardous Waste or Hazardous Substance (as
such terms are defined in any applicable state or Federal environmental law or
regulations) into the environment; and (iii) the Borrowers and their
Subsidiaries do not have any material contingent liability in connection with
any release of any Hazardous Waste or Hazardous Substance into the environment.
(b) None of the Borrowers or their Subsidiaries is in violation of
any law, rule or regulation, or in default with respect to any judgment, writ,
injunction or decree of any Governmental Authority the violation of which, or a
default with respect to which, would have a material adverse effect on the
financial condition, operations, businesses, properties or assets of the
Borrowers and their Subsidiaries taken as a whole.
SECTION 3.8 Insurance. All policies of insurance of any kind or nature
---------
owned by or issued to the Borrowers and their Subsidiaries, including, without
limitation, policies of life, fire, theft, product liability, public liability,
property damage, other casualty, employee fidelity, workers' compensation,
employee health and welfare, title, property and liability insurance, are in
full force and effect and are of a nature and provide such coverage as is
customarily carried by companies of the size and character of the Borrowers and
their Subsidiaries, it being understood that the Borrowers and their
Subsidiaries are not making any representation as to insurance coverage for
asbestos claims.
SECTION 3.9 The Orders. On the date of the making of the initial Loans
----------
or the issuance of the initial Letters of Credit hereunder, whichever first
occurs, the Interim Order will have been entered and will not have been stayed,
amended, vacated, reversed or rescinded except as approved by the Administrative
Agent, in its sole discretion. On the date of the making of any Loan or the
issuance of any Letter of Credit, the Interim Order or the Final Order, as the
case may be, shall have been entered and shall not have been amended, stayed,
vacated or rescinded except as approved by the Administrative Agent, in its sole
discretion. Upon the maturity (whether by the acceleration or
48
otherwise) of any of the obligations of the Borrowers hereunder and under the
other Loan Documents, the Lenders shall, subject to the provisions of Section
-------
7.1, be entitled to immediate payment of such obligations, and to enforce the
---
remedies provided for hereunder, without further application to or order by the
Bankruptcy Court.
SECTION 3.10 Use of Proceeds. The proceeds of the Loans shall be used in
---------------
accordance with Section 2.2, for (i) working capital; (ii) other general
-----------
corporate purposes of the Borrowers; (iii) as may be necessary, repurchase of
accounts receivable in connection with the termination of the Prepetition
Securitization Facilities; and (iv) payment of any related transaction costs,
fees and expenses, all in accordance with the Budget as provided for herein. The
Letters of Credit shall be issued under Tranche A in support of obligations of
the Borrowers or the Foreign Subsidiaries that are consistent with past
practices of the Borrowers or the Foreign Subsidiaries, as the case may be, as
disclosed to the Administrative Agent, and that are acceptable to the
Administrative Agent.
SECTION 3.11 Litigation. There are no unstayed actions, suits or
----------
proceedings pending or, to the best knowledge of the Borrowers, threatened
against or affecting the Borrowers or their Subsidiaries or any of their
respective properties, before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that are
reasonably likely to have a material adverse effect on the operations,
businesses, properties, assets, prospects or financial condition of the
Borrowers and their Subsidiaries taken as a whole.
SECTION 3.12 Intellectual Property. Set forth on Schedule 3.12 hereto is
--------------------- -------------
a complete and accurate list of all patents, trademarks, trade names, service
marks and copyrights, and all applications therefor and licenses thereof, of
each Borrower or any of its Subsidiaries, showing as of the date hereof the
jurisdiction in which registered, the registration number, the date of
registration and the expiration date.
SECTION 3.13 Intercompany Loans to Foreign Subsidiaries. To the extent
------------------------------------------
required by Section 5.11, each Intercompany Loan made subsequent to the date
------------
hereof is secured by liens and/or charges on assets of the applicable Foreign
Subsidiary (and/or its undisclosed agents) having a liquidation value sufficient
to repay such Intercompany Loan.
SECTION 4. CONDITIONS OF LENDING
SECTION 4.1 Conditions Precedent to Initial Loan and Initial Letter of
----------------------------------------------------------
Credit. The obligation of the Lenders to make the initial Loan or the Fronting
------
Bank to issue the initial Letter of Credit, whichever may occur first, is
subject to the following conditions precedent:
(a) Supporting Documents. The Administrative Agent shall have
--------------------
received for each of the Borrowers:
(i) a copy of each Organizational Document originally executed and
delivered by each Borrower, and, to the extent applicable, certified as of
a recent date by the applicable Governmental Authority, each dated the
Closing Date or a recent date prior thereto; provided,
--------
49
that the Administrative Agent may, in its discretion, accept Organizational
Documents of the Borrowers certified by a Secretary or Assistant Secretary
of the Borrowers in lieu of certification by Governmental Authorities
(subject to receipt of an undertaking from the Borrowers to effect delivery
of such documents certified by Governmental Authorities on a post-Closing
Date basis);
(ii) signature and incumbency certificates of the officers of such
Person executing the Loan Documents to which it is a party, dated as of the
Closing Date;
(iii) duly adopted resolutions of the board of directors or similar
governing body of each Borrower approving and authorizing the execution,
delivery and performance of this Agreement and the other Loan Documents to
which it is a party or by which it or its assets may be bound as of the
Closing Date, certified as of the Closing Date by its secretary or
assistant secretary as being in full force and effect without modification
or amendment;
(iv) a good standing certificate from the applicable Governmental
Authority of each Borrower's jurisdiction of incorporation, organization or
formation and in each jurisdiction in which it is qualified as a foreign
corporation or other entity to do business, each dated a recent date prior
to the Closing Date; and
(v) such other documents as the Administrative Agent may
reasonably request.
(b) Interim Order. Not later than ten (10) days following the
-------------
Filing Date, the Administrative Agent and the Lenders shall have received a
certified copy of an order of the Bankruptcy Court in substantially the
form of Exhibit A-1 (the "Interim Order") approving the Loan Documents and
----------- -------------
granting the Superpriority Claim status and senior priming and other Liens
described in Section 2.23 which Interim Order (i) shall have been entered
------------
upon an application or motion of the Borrowers reasonably satisfactory in
form and substance to the Administrative Agent and on such prior notice to
such parties as may be satisfactory to the Administrative Agent, (ii) shall
authorize extensions of credit in amounts satisfactory to the
Administrative Agent, (iii) shall approve the payment by the Borrowers of
all of the Fees set forth in Sections 2.19, 2.20 and 2.21, (iv) shall be in
------------------- ----
full force and effect, (v) shall not have been stayed, reversed, modified
or amended in any respect, except as approved by the Administrative Agent,
in its sole discretion, and (vi) shall be entered with the consent or
non-objection of a preponderance (as determined by the Administrative Agent
in its sole discretion) of the secured creditors of any of the Borrowers
under the Existing Agreements; and, if the Interim Order is the subject of
a pending appeal in any respect, neither the making of such Loan nor the
issuance of such Letter of Credit nor the performance by any of the
Borrowers of any of their obligations hereunder or under the Loan Documents
or under any other instrument or agreement referred to herein shall be the
subject of a presently effective stay pending appeal.
(c) Security and Pledge Agreement. The Borrowers shall have duly
-----------------------------
executed and delivered to the Administrative Agent a Security and Pledge
Agreement in substantially the form of Exhibit B (the "Security and Pledge
--------- -------------------
Agreement").
---------
50
(d) First Day Orders. All of the "first day orders" entered by the
----------------
Bankruptcy Court at the time of the commencement of the Cases shall be
reasonably satisfactory in form and substance to the Administrative Agent.
(e) Opinion of Counsel. The Administrative Agent and the Lenders
------------------
shall have received the favorable written opinion of counsel to the Borrowers,
acceptable to the Administrative Agent, substantially in the form of Exhibit D.
(f) Payment of Fees. The Borrowers shall have paid to the
---------------
Administrative Agent the then unpaid balance of all accrued and unpaid Fees due
under and pursuant to this Agreement and the letter referred to in Section 2.19.
(g) Corporate and Judicial Proceedings. All corporate and judicial
----------------------------------
proceedings and all instruments and agreements in connection with the
transactions among the Borrowers, the Administrative Agent and the Lenders
contemplated by this Agreement shall be satisfactory in form and substance to
the Administrative Agent, and the Administrative Agent shall have received all
information and copies of all documents and papers, including records of
corporate and judicial proceedings, which the Administrative Agent may have
requested in connection therewith, such documents and papers where appropriate
to be certified by proper corporate, governmental or judicial authorities.
(h) Information. The Administrative Agent shall have received such
-----------
information (financial or otherwise) as may be reasonably requested by the
Administrative Agent and shall have discussed such information with the
Borrowers' management and shall be satisfied with the nature and substance of
such discussions.
(i) Budget. The Administrative Agent and the Lenders shall have
------
received from the Borrowers a budget detailing, on a monthly basis, the
Borrowers' anticipated cash receipts and disbursements for the period ending on
the Maturity Date, and setting forth the anticipated uses of the Commitment,
which shall be satisfactory in form and substance to the Administrative Agent
(the "Budget").
------
(j) Compliance with Laws. The Borrowers shall have granted the
--------------------
Administrative Agent access to and the right to inspect all reports, audits and
other internal information of the Borrowers relating to environmental matters
and any third party verification of certain matters relating to compliance with
environmental laws and regulations requested by the Administrative Agent, and
the Administrative Agent shall be reasonably satisfied that the Borrowers are in
compliance in all material respects with all applicable environmental laws and
regulations and be satisfied with the costs of maintaining such compliance.
(k) Closing Documents. The Administrative Agent shall have
-----------------
received all documents required by this Agreement satisfactory in form and
substance to the Administrative Agent.
(l) Lien Searches. The Administrative Agent shall have received
-------------
lien searches conducted in the jurisdictions in which the Borrowers conduct
business, satisfactory to the
51
Administrative Agent (dated as of a date reasonably satisfactory to the Agent),
reflecting the absence of Liens and encumbrances on the assets of the Borrowers
other than Permitted Liens.
(m) Field Examinations. The Administrative Agent shall have
------------------
conducted and be satisfied with the results of field examinations of the
Borrowers' accounts receivable, inventory, equipment and real property.
(n) U.K. Administration. The Administrative Agent shall have
-------------------
received and be satisfied, in its sole discretion, with all information relative
to the U.K. Subsidiaries and the U.K. Administration.
SECTION 4.2 Conditions Precedent to Each Loan and Each Letter of Credit.
-----------------------------------------------------------
The obligation of the Lenders to make each Loan and of the Fronting Bank to
issue each Letter of Credit, including the initial Loan and the initial Letter
of Credit, is subject to the following conditions precedent:
(a) Final Order. If as a result of such extension of credit usage
-----------
of the Commitment would exceed the lesser of (i) $450,000,000 (or $200,000,000
in the event of the Borrowers' continued use of the Prepetition Securitization
Facilities) and (ii) the aggregate amount authorized by the Interim Order, and
in any event no later than forty-five (45) days after the entry of the Interim
Order, the Bankruptcy Court shall have entered an order approving continued
lending under Tranches A and B (the "Final Order") in substantially the form set
-----------
forth as Exhibit A-2 to the Agreement, as such Exhibit relates to Tranches A and
-----------
B.
(b) Notice. The Administrative Agent shall have received a notice
------
with respect to each Borrowing or the issuance of each Letter of Credit, as the
case may be, as required by Section 2.
---------
(c) Representations and Warranties. All representations and
------------------------------
warranties contained in this Agreement and the other Loan Documents shall be
true and correct in all material respects on and as of the date of each
Borrowing or the issuance of each Letter of Credit hereunder with the same
effect as if made on and as of such date except to the extent such
representations and warranties expressly relate to an earlier date.
(d) No Default. On the date of each Borrowing or the issuance of
----------
each Letter of Credit hereunder, no Event of Default or event which upon notice
or lapse of time or both would constitute an Event of Default shall have
occurred and be continuing.
(e) Orders. The Interim Order or the Final Order, as the case may
------
be, shall be in full force and effect and shall not have been stayed, reversed,
modified or amended in any respect without the prior written consent of the
Administrative Agent, provided that at the time of the making of any Loan or the
--------
issuance of any Letter of Credit the aggregate amount of either of which, when
added to the sum of the principal amount of all Loans then outstanding and the
Letter of Credit Outstandings, would exceed the amount authorized by the Interim
Order (collectively, the "Additional Credit"), the Administrative Agent and each
-----------------
of the Lenders shall have received a certified copy of the Final Order, which,
in any event, shall have been entered by the Bankruptcy Court no later than
forty-five (45) days
52
after the entry of the Interim Order, and at the time of the extension of any
Additional Credit the Final Order shall be in full force and effect, and shall
not have been stayed, reversed, modified or amended in any respect without the
prior written consent of the Administrative Agent; and, if either the Interim
Order or the Final Order is the subject of a pending appeal in any respect,
neither the making of the Loans nor the issuance of any Letter of Credit nor the
performance by any of the Borrowers of any of their obligations under any of the
Loan Documents or under any other instrument or agreement referred to herein
shall be the subject of a presently effective stay pending appeal.
(f) Payment of Fees. The Borrowers shall have paid to the
---------------
Administrative Agent the then unpaid balance of all accrued and unpaid Fees then
due and payable under and pursuant to this Agreement and the letter referred to
in Section 2.19.
(g) Borrowing Base Certificate. Commencing with the expiration of
--------------------------
the Initial Period, the Administrative Agent shall have received a Borrowing
Base Certificate dated no more than seven (7) days prior to each Borrowing or
the issuance of each Letter of Credit, which Borrowing Base Certificate shall
include supporting schedules as required by the Administrative Agent.
(h) Usage. The uses of such Borrowing or such Letter of Credit
-----
shall be substantially consistent with the Budget, as updated from time to time.
SECTION 5. AFFIRMATIVE COVENANTS
From the date hereof and for so long as any Commitment shall be in
effect or any Letter of Credit shall remain outstanding (in a face amount in
excess of the amount of cash then held in the Letter of Credit Account, or in
excess of the face amount of back-to-back letters of credit delivered, in each
case pursuant to Section 2.3(b)), or any amount shall remain outstanding or
---------------
unpaid under this Agreement, each of the Borrowers and their respective
Subsidiaries agree that, unless the Required Lenders shall otherwise consent in
writing, the Borrowers and the Subsidiaries will:
SECTION 5.1 Financial Statements, Reports, etc. Deliver to the
----------------------------------
Administrative Agent and each of the Lenders:
(a) within ninety (90) days after the end of each fiscal year, the
Borrowers': (i) consolidated and, with respect to the Parent and the Domestic
Subsidiaries only, consolidating, balance sheets and related statements of
income; (ii) consolidated statement of stockholders' equity; and (iii)
consolidated and, with respect to the Parent and the Domestic Subsidiaries only,
combined, statements of cash flows, showing the financial condition of the
Borrowers and their respective Subsidiaries on a consolidated basis (except as
otherwise specified) as of the close of such fiscal year and the results of
their respective operations during such year, the consolidated statements to be
audited for the Borrowers and their respective Subsidiaries by their current
independent auditors or other independent public accountants of recognized
national standing acceptable to the Required Lenders and accompanied by an
opinion of such accountants (which shall not be qualified other than with
respect to the Cases or a going concern qualification) and to be certified by a
Financial Officer of Parent to the effect that such consolidated financial
statements fairly present the financial condition and results of
53
operations of the Borrowers and their respective Subsidiaries on a consolidated
basis in accordance with GAAP;
(b) within forty-five (45) days after the end of each of the first
three fiscal quarters and within ninety (90) days after the end of the fourth
fiscal quarter of each fiscal year, the Borrowers': (i) consolidated and, with
respect to the Parent and the Domestic Subsidiaries only, consolidating, balance
sheets and related statements of income; (ii) consolidated statement of
stockholders' equity; and (iii) consolidated and, with respect to the Parent and
the Domestic Subsidiaries only, combined, statements of cash flows, showing the
financial condition of the Borrowers and their respective Subsidiaries on a
consolidated basis (except as otherwise specified) as of the close of such
fiscal quarter and the results of their operations during such fiscal quarter
and the then elapsed portion of the fiscal year, each certified by a Financial
Officer of Parent as fairly presenting the financial condition and results of
operations of the Borrowers and their respective Subsidiaries on a consolidated
basis in accordance with GAAP, subject to normal year-end audit adjustments;
(c) concurrently with any delivery of financial statements under
(a) or (b) above as applicable, (i) a certificate of a Financial Officer of each
of the Borrowers (A) certifying that no Event of Default or event which upon
notice or lapse of time or both would constitute an Event of Default has
occurred, or, if such an Event of Default or event has occurred, specifying the
nature and extent thereof and any corrective action taken or proposed to be
taken with respect thereto and (B) setting forth computations in reasonable
detail satisfactory to the Administrative Agent demonstrating compliance with
the provisions of Sections 6.3, 6.4, 6.5 and 6.10 and (ii) a certificate of such
---------------------- ----
accountants accompanying the audited consolidated financial statements delivered
under (a) above certifying that, in the course of the regular audit of the
business of the Borrowers and their respective Subsidiaries, such accountants
have obtained no knowledge that an Event of Default has occurred and is
continuing, or if, in the opinion of such accountants, an Event of Default has
occurred and is continuing, specifying the nature thereof and all relevant facts
with respect thereto;
(d) as soon as available, but no more than thirty (30) days after
the end of each month (forty-five (45) days after the end of each month which is
also the end of a fiscal quarter): (i) the unaudited monthly balance sheets and
related statements of income and cash flows, showing the financial condition of
the Borrowers and their respective Subsidiaries on a consolidated basis as of
the close of such fiscal month and the results of their operations during such
fiscal period and the then elapsed portion of the fiscal year, each certified by
a Financial Officer of Parent as fairly presenting the financial condition and
results of operations of the Borrowers and their respective Subsidiaries on a
consolidated basis in accordance with GAAP, subject to normal year-end audit
adjustments, together with a certificate of a Financial Officer of each of the
Borrowers setting forth computations in reasonable detail satisfactory to the
Administrative Agent demonstrating compliance with the provisions of Section
-------
6.5; (ii) statements of operating income and major cash flow drivers
---
(Consolidated and Domestic EBITDA, working capital and Capital Expenditures)
showing the financial condition of the Borrowers and their respective
Subsidiaries on a major product group basis, including calculations of
Consolidated EBITDA and Domestic EBITDA by major product group, Capital
Expenditures by major product group, and depreciation and amortization by major
product group; and (iii) balance sheets and related
54
statements of income and cash flows, showing the financial condition of the
Borrowers and their respective Subsidiaries on the basis of (x) the Parent and
the Domestic Subsidiaries only, (y) the U.K. Subsidiaries only, and (z) the
Non-Debtor Foreign Subsidiaries only, including calculations of Consolidated
EBITDA and Domestic EBITDA, as applicable;
(e) as soon as possible, and in any event within forty-five (45)
days of the Closing Date, a consolidated pro forma balance sheet of the
Borrowers' financial condition as of the Filing Date;
(f) within thirty (30) days from the end of each of the first
three fiscal quarters of each fiscal year of the Borrowers, and within
forty-five (45) days from the end of the last fiscal quarter of each fiscal year
of the Borrowers' (or, if earlier, upon the approval thereof by the Borrowers'
respective Boards of Directors), an update of the Budget satisfactory in form
and substance to the Administrative Agent;
(g) no later than thirty (30) days after the end of each month
(forty-five days after the end of each month which is also the end of a fiscal
quarter), a summary of the results of the Borrowers' business operations for the
preceding month as compared to the corresponding period in the Budget, including
a discussion of significant variances, which summary shall describe results on
the basis of (i) the Borrowers and their respective Subsidiaries on a
consolidated basis, (ii) the Parent and its Domestic Subsidiaries only, (iii)
the U.K. Subsidiaries only, (v) the Non-Debtor Foreign Subsidiaries only, and
(v) product lines;
(h) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials filed by it
with the Securities and Exchange Commission, or any governmental authority
succeeding to any of or all the functions of said commission, or with any
national securities exchange, as the case may be;
(i) as soon as available and in any event (A) within thirty (30)
days after any Borrower, any or any of their ERISA Affiliates knows or has
reason to know that any Termination Event described in clause (i) of the
definition of Termination Event with respect to any Single Employer Plan of any
of the Borrowers or such ERISA Affiliate has occurred and (B) within ten (10)
days after any of the Borrowers or any of their ERISA Affiliates knows or has
reason to know that any other Termination Event with respect to any such Plan
has occurred, a statement of a Financial Officer of such Borrower describing
such Termination Event and the action, if any, which such Borrower or such ERISA
Affiliate proposes to take with respect thereto;
(j) promptly and in any event within ten (10) days after receipt
thereof by any of the Borrowers or any of their ERISA Affiliates from the PBGC
copies of each notice received by such Borrower or any such ERISA Affiliate of
the PBGC's intention to terminate any Single Employer Plan of such Borrower or
such ERISA Affiliate or to have a trustee appointed to administer any such Plan;
(k) if requested by the Administrative Agent, promptly and in any
event within thirty (30) days after the filing thereof with the Internal Revenue
Service, copies of each Schedule B (Actuarial
55
Information) to the annual report (Form 5500 Series) with respect to each Single
Employer Plan of any of the Borrowers or any of their ERISA Affiliates;
(l) within ten (10) days after notice is given or required to be
given to the PBGC under Section 302(f)(4)(A) of ERISA of the failure of any of
the Borrowers or any of their ERISA Affiliates to make timely payments to a
Plan, a copy of any such notice filed and a statement of a Financial Officer of
such Borrower setting forth (A) sufficient information necessary to determine
the amount of the Lien under Section 302(f)(3), (B) the reason for the failure
to make the required payments and (C) the action, if any, which the Borrowers or
any of their ERISA Affiliates proposed to take with respect thereto;
(m) promptly and in any event within ten (10) days after receipt
thereof by any of the Borrowers or any ERISA Affiliate from a Multiemployer Plan
sponsor, a copy of each notice received by such Borrower or any ERISA Affiliate
concerning (A) the imposition of Withdrawal Liability by a Multiemployer Plan,
(B) the determination that a Multiemployer Plan is, or is expected to be, in
reorganization within the meaning of Title IV of ERISA, (C) the termination of a
Multiemployer Plan within the meaning of Title IV of ERISA, or (D) the amount of
liability incurred, or which may be incurred, by the Borrowers or any ERISA
Affiliate in connection with any event described in clause (A), (B) or (C)
above;
(n) promptly, from time to time, such other information
(including, without limitation, projections) regarding the operations, business
affairs and financial condition of any Borrower or any of its Subsidiaries, or
compliance with the terms of any material loan or financing agreements as the
Administrative Agent, at the request of any Lender, may reasonably request;
(o) promptly after the same is available, copies of all pleadings,
motions, applications, judicial information, financial information and other
documents filed by or on behalf of any of the Borrowers with the Bankruptcy
Court in the Cases or filed by or on behalf of the U.K. Subsidiaries with the
Bankruptcy Court, or distributed by or on behalf of any of the Borrowers or the
U.K. Subsidiaries to any official committee appointed in any of the Cases, or
the U.K. Subsidiary Proceedings, providing copies of same to counsel for the
Administrative Agent;
(p) from and after the date which is forty-five (45) days after
the date hereof, during such times as any Intercompany Loans made after the date
hereof by one or more of the Borrowers to one or more of the U.K. Subsidiaries
are outstanding, within eleven (11) Business Days after the end of each fiscal
month of the Borrowers, financial information and other documents from the
Borrowers sufficient to demonstrate that each such outstanding Intercompany Loan
from one or more of the Borrowers to a U.K. Subsidiary is secured by fixed
and/or floating charges on assets of the applicable U.K. Subsidiary (and, as
applicable, its undisclosed agents) having a liquidation value sufficient to
repay such Intercompany Loan to the extent required by Section 5.11; and
------------
(q) from and after the date on which a Non-Debtor Foreign
Subsidiary shall have granted liens or charges on all or a portion of its assets
in connection with an Intercompany Loan made after the date hereof by one or
more of the Borrowers, at such time or times as the Administrative
56
Agent may reasonably request, financial information and other documents from the
Borrowers sufficient to demonstrate that such Intercompany Loan is secured by
liens or charges on assets of the applicable Non-Debtor Foreign Subsidiary
having a liquidation value sufficient to repay such Intercompany Loan to the
extent required by Section 5.11.
------------
SECTION 5.2 Existence. Preserve and maintain in full force and effect
---------
all governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its businesses except
(i) (A) if in the reasonable business judgment of such Borrower it is in its
best economic interest not to preserve and maintain such rights, privileges,
qualifications, permits, licenses and franchises, and (B) such failure to
preserve the same could not, in the aggregate, reasonably be expected to have a
material adverse effect on the operations, business, properties, assets,
prospects or condition (financial or otherwise) of the Borrowers , taken as a
whole, and (ii) as otherwise permitted in connection with sales of assets
permitted by Section 6.11.
------------
SECTION 5.3 Insurance. (a) Keep its insurable properties insured at all
---------
times, against such risks, including fire and other risks insured against by
extended coverage, as is customary with companies of the same or similar size in
the same or similar businesses; and maintain in full force and effect public
liability insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by any Borrower in such amounts and with such
deductibles as are customary with companies of the same or similar size in the
same or similar businesses and in the same geographic area; and (b) maintain
such other insurance or self insurance as may be required by law.
SECTION 5.4 Obligations and Taxes. With respect to each Borrower, pay
---------------------
all its material obligations arising after the Filing Date promptly and in
accordance with their terms and pay and discharge promptly all material taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property arising after the Filing Date,
before the same shall become in default, as well as all material lawful claims
for labor, materials and supplies or otherwise arising after the Filing Date
which, if unpaid, would become a Lien or charge upon such properties or any part
thereof; provided, however, that no Borrower shall be required to pay and
-------- -------
discharge or to cause to be paid and discharged any such tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be
contested in good faith by appropriate proceedings (if the Borrowers shall have
set aside on their books adequate reserves therefor).
SECTION 5.5 Notice of Event of Default, etc. Promptly give to the
-------------------------------
Administrative Agent notice in writing of:
(a) any Event of Default or the occurrence of any event or
circumstance which with the passage of time or giving of notice or both would
constitute an Event of Default; and
(b) any litigation, proceedings or material investigations which
may exist at any time between any Borrower and any Governmental Authority.
57
SECTION 5.6 Access to Books and Records.
---------------------------
(a) Maintain or cause to be maintained at all times true and
complete books and records in accordance with GAAP of the financial operations
of the Borrowers and their respective Subsidiaries; and provide the
Administrative Agent and its representatives access to all such books and
records during regular business hours, in order that the Administrative Agent
may examine and make abstracts from such books, accounts, records and other
papers for the purpose of verifying the accuracy of the various reports
delivered by the Borrowers to the Administrative Agent or the Lenders pursuant
to this Agreement or for otherwise ascertaining compliance with this Agreement.
The Borrowers will permit (and will cause their Subsidiaries to permit) any
representatives designated by the Administrative Agent to discuss its affairs,
finances and condition with its officers and independent accountants, all at
such reasonable times and as often as reasonably requested.
(b) The Borrowers will permit any representatives designated by
the Administrative Agent (including any consultants, accountants, lawyers and
appraisers retained by the Administrative Agent) to conduct evaluations and
appraisals of the Borrowers' computation of the Borrowing Base and the assets
included in the Borrowing Base and such other assets and properties of the
Borrowers or their Subsidiaries as the Administrative Agent or Required Lenders
may require, all at such reasonable times and as often as reasonably requested.
The Borrowers shall pay the reasonable fees (including reasonable and customary
internally allocated fees of employees of the Administrative Agent as to which
invoices have been furnished) and expenses of any such representatives retained
by the Administrative Agent as to which invoices have been furnished to conduct
any such evaluation or appraisal, including the reasonable fees and expenses
associated with collateral monitoring services performed by the Collateral Agent
Services Group of the Administrative Agent. To the extent required by the
Administrative Agent as a result of any such evaluation, appraisal or
monitoring, the Borrowers also agree to modify or adjust the computation of the
Borrowing Base (which may include maintaining additional reserves, modifying the
advance rates or modifying the eligibility criteria for the components of the
Borrowing Base).
(c) In the event that historical accounting practices, systems or
reserves relating to the components of the Borrowing Base are modified in a
manner that is adverse to the Lenders in any material respect, the Borrowers
will agree to maintain such additional reserves (for purposes of computing the
Borrowing Base) in respect to the components of the Borrowing Base and make such
other adjustments to its parameters for including the components of the
Borrowing Base as the Administrative Agent shall reasonably require based upon
such modifications.
(d) The Borrowers will grant the Administrative Agent access to
and the right to inspect all reports, audits and other internal information of
the Borrowers relating to environmental matters upon reasonable notice, and
obtain any third party verification of matters relating to compliance with
environmental laws and regulations requested by the Administrative Agent at any
time and from time to time.
SECTION 5.7 Maintenance of Concentration Account. Within thirty (30)
------------------------------------
days after the Closing Date, and at all times thereafter, maintain with the
Administrative Agent an account or accounts
58
to be used by the Borrowers as their principal domestic concentration or sweep
account(s) into which shall be deposited the available balances from the
Borrowers' operating accounts at the end of each Business Day, net of
disbursements paid in the ordinary course of business during such Business Day.
SECTION 5.8 Borrowing Base Certificate. Commencing upon the end of the
--------------------------
Initial Period, furnish to the Administrative Agent, no later than (i) four (4)
Business Days after each of the weeks ended, a completed Borrowing Base
Certificate as of the last day of the immediately preceding one week period,
(ii) eleven (11) Business Days following the immediately preceding fiscal month
ended, a completed Borrowing Base Certificate showing the Borrowing Base as of
the close of business on the last day of such fiscal month, and (iii) if
requested by the Administrative Agent, at any other time when the Administrative
Agent reasonably believes that the then existing Borrowing Base Certificate is
materially inaccurate, as soon as reasonably available but in no event later
than eleven (11) Business Days after such request, a completed Borrowing Base
Certificate showing the Borrowing Base as of the date so requested, in each case
with supporting documentation and additional reports with respect to the
Borrowing Base as the Administrative Agent may reasonably request. The PP&E
Component of the Borrowing Base shall be updated (i) from time to time upon
receipt of periodic valuation updates received from the Administrative Agent's
asset valuation experts, (ii) concurrent with the sale of any assets
constituting part of the PP&E Component, (iii) in the event such assets are
idled for any reason other than routine maintenance or repairs for a period in
excess of ten (10) consecutive days, or (iv) the value of such assets is
otherwise impaired, in the Administrative Agent's sole discretion. The
components of the Borrowing Base consisting of inventory shall be updated
monthly as of the close of business on the last Business Day of each fiscal
month.
SECTION 5.9 Business Plan. As soon as practicable and in any event, no
-------------
later than 90 days after the commencement of the Cases, the Borrowers' business
plan for the period through the Maturity Date, which business plan shall be
satisfactory in form and substance to the Administrative Agent, and be available
to discuss such business plan with the Administrative Agent upon the
Administrative Agent's reasonable request.
SECTION 5.10 Restructuring Officer. Upon the request of the
---------------------
Administrative Agent or the Required Lenders, retain a senior management level
restructuring officer who shall be hired by the Borrowers and shall be
satisfactory to the Administrative Agent, the Required Lenders and the
Borrowers, in their respective discretion.
SECTION 5.11 Collateralization of Intercompany Loans.
---------------------------------------
(a) The Borrowers shall use their best efforts to cause all
Intercompany Loans made subsequent to the date hereof by any Borrower to any
U.K. Subsidiary to be secured by fixed and floating charges on assets of such
U.K. Subsidiary (or its undisclosed agents) having a liquidation value
sufficient to repay such Intercompany Loan. The documentation effecting the
creation of such charges shall be satisfactory in form and substance to the
Administrative Agent. All actions necessary to grant and perfect intercompany
charges in connection with any such Intercompany Loan shall be effected by a
date not more than forty-five (45) days from the date of such loan, or by such
later date as
59
may be reasonably necessary, as determined by the Administrative Agent, to grant
and perfect such liens or charges in accordance with customary commercial
lending practices in England.
(b) The Borrowers shall use their best efforts to cause all
Intercompany Loans made subsequent to the date hereof by any Borrower to any
Non-Debtor Foreign Subsidiary to be secured by liens or charges on assets of
such Non-Debtor Foreign Subsidiary having a liquidation value sufficient to
repay such Intercompany Loan. The documentation effecting the creation of such
liens or charges shall be satisfactory in form and substance to the
Administrative Agent. All actions necessary to grant and perfect intercompany
liens or charges in connection with any such Intercompany Loan shall be effected
by a date not more than forty-five (45) days from the date of such loan, or by
such later date as may be reasonably necessary, as determined by the
Administrative Agent, to grant and perfect such liens or charges in accordance
with customary commercial lending practices in the jurisdiction in which such
Non-Debtor Foreign Subsidiary is incorporated, organized or formed or where the
subject collateral is otherwise located.
(c) To the extent that the Borrowers shall have determined that
the establishment of the liens or charges described in (a) or (b) above in
respect of an Intercompany Loan cannot be effected despite the Borrowers'
employment of best efforts to do so, the Borrowers shall provide to the
Administrative Agent detailed information satisfactory to the Administrative
Agent, in its discretion, describing the Borrowers' undertakings relating to the
establishment of such liens and charges and the basis for the Borrowers'
conclusions with regard to the inability to establish same.
SECTION 6. NEGATIVE COVENANTS
From the date hereof and for so long as any Commitment shall be in
effect or any Letter of Credit shall remain outstanding (in a face amount in
excess of the amount of cash then held in the Letter of Credit Account, or in
excess of the face amount of back-to-back letters of credit delivered, in each
case pursuant to Section 2.3(b)) or any amount shall remain outstanding or
---------------
unpaid under this Agreement, unless the Required Lenders shall otherwise consent
in writing, each of the Borrowers will not (and will not apply to the Bankruptcy
Court for authority to), and will cause each of their respective Subsidiaries
not to:
SECTION 6.1 Liens. Incur, create, assume or suffer to exist any Lien on
-----
any asset of the Borrowers now owned or hereafter acquired by any Borrower other
than Permitted Liens.
SECTION 6.2 Merger, etc. Consolidate or merge with or into another
-----------
Person, except that Non-Debtor Foreign Subsidiaries of the Borrowers shall be
permitted to merge with or into other Non-Debtor Foreign Subsidiaries of the
Borrowers and U.K. Subsidiaries of the Borrowers shall be permitted to merge
with or into other U.K. Subsidiaries of the Borrowers.
SECTION 6.3 Indebtedness. Contract, create, incur, assume or suffer to
------------
exist any Indebtedness, except for (i) Indebtedness under this Agreement; (ii)
Indebtedness (inclusive of Intercompany Indebtedness) incurred prior to the
Filing Date (including existing Capitalized Leases) of the Borrowers and their
U.K. Subsidiaries and, with respect to the Foreign Subsidiaries of the
60
Borrowers, listed on Schedule 6.3; (iii) Indebtedness incurred subsequent to the
------------
Filing Date secured by purchase money Liens (exclusive of Capitalized Leases) in
an aggregate amount not in excess of $1,000,000 to the extent permitted by
Section 6.4; (iv) Indebtedness allowed under Sections 6.6 and 6.10 (without
----------- ------------ ----
duplication); (v) Indebtedness owed to (x) Chase or (y) during the period
commencing on the date hereof and ending on the earlier of (A) the Prepayment
Date or (B) the date on which the Final Order is entered, and thereafter, as
long as Bank One, NA is a Tranche A Lender or a Tranche B Lender, Bank One, NA,
or any of their respective banking Affiliates in respect of any overdrafts and
related liabilities arising from treasury, depository and cash management
services or in connection with any automated clearing house transfers of funds;
(vi) Indebtedness for borrowed money of Non-Debtor Foreign Subsidiaries in an
aggregate amount (being the sum of Indebtedness in existence on the Filing Date
(exclusive of Intercompany Loans incurred prior to the Filing Date) and any
Indebtedness incurred thereafter), including, without limitation, Intercompany
Loans made after the Filing Date, not in excess of $220,000,000; and (vii)
obligations in respect of (x) currency swap agreements, currency future or
option contracts and other similar agreements designed to hedge against
fluctuations in foreign currency exchange rates, (y) interest rate swap, cap or
collar agreements and interest rate future or option contracts and other similar
agreements designed to hedge against fluctuations in interest rates or (z) swap
agreements, future or option contracts and other similar agreements designed to
hedge against fluctuations in commodities prices, in each case entered into with
a Lender and otherwise in the ordinary course of the Borrowers' business and not
for speculative purposes.
SECTION 6.4 Capital Expenditures. Make Capital Expenditures during each
--------------------
fiscal quarter listed below in an aggregate amount in excess of the amount
specified opposite such fiscal quarter; provided that if the amount of Capital
--------
Expenditures that are made during any fiscal quarter is less than the amount
thereof that is permitted to be made during such fiscal quarter, the unused
portion thereof may be carried forward to and made during the immediately
following two fiscal quarters:
Fiscal Quarter Ending Maximum Capital Expenditures
--------------------- ----------------------------
(Millions)
12/31/2001 $88.50
03/31/2002 $93.75
06/30/2002 $93.75
09/30/2002 $93.75
12/31/2002 $93.75
03/31/2003 $90.25
06/30/2003 $90.25
09/30/2003 $90.25
12/31/2003 $90.25
Notwithstanding the covenant levels set forth above, the Borrowers
shall submit an updated Capital Expenditures budget for fiscal year 2003. Such
budget shall be subject to the review and approval of the Required Lenders, in
their discretion. If the Borrowers fail to submit such updated budget on or
prior to December 31, 2002 or in the event that the Required Lenders do not
approve
61
such updated budget, the quarterly maximum Capital Expenditures for fiscal year
2003 shall automatically be reduced to $72.50 million per quarter without any
further action by the Borrowers, the Lenders or the Administrative Agent.
SECTION 6.5 EBITDA.
------
As of the end of each fiscal month of the Borrowers, commencing with
the fiscal month ending October 31, 2001 permit either Consolidated EBITDA or
Domestic EBITDA for the most recent 12-month period to be less than the
respective amounts specified opposite such fiscal month:
Consolidated Domestic
Fiscal Month EBITDA EBITDA
------------ ------ ------
(Millions) (Millions)
10/2001 $430 $135
11/2001 440 130
12/2001 485 130
1/2002 470 120
2/2002 460 125
3/2002 460 120
4/2002 475 130
5/2002 460 120
6/2002 455 115
7/2002 465 120
8/2002 470 120
9/2002 475 120
10/2002 475 120
11/2002 475 120
12/2002 490 130
1/2003 510 135
2/2003 520 135
3/2003 530 145
4/2003 540 150
5/2003 550 155
6/2003 565 160
7/2003 565 160
8/2003 570 160
9/2003 580 165
10/2003 595 170
SECTION 6.6 Guarantees and Other Liabilities. Purchase or repurchase (or
--------------------------------
agree, contingently or otherwise, so to do) the Indebtedness of, or assume,
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance of any obligation or
62
capability of so doing, or otherwise), endorse or otherwise become liable,
directly or indirectly, for the obligations, stock or dividends of any Person,
except (i) for any guaranty of Indebtedness or other obligations (or otherwise
becoming liable for any of the obligations) of any of the Borrowers in the
ordinary course of business and consistent with the past business practices with
trade vendors if such Indebtedness or the obligations are permitted by this
Agreement, (ii) by endorsement of negotiable instruments for deposit or
collection in the ordinary course of business; and (iii) as otherwise agreed in
writing by the Administrative Agent.
SECTION 6.7 Chapter 11 Claims. Incur, create, assume, suffer to exist or
-----------------
permit any other Superpriority Claim which is pari passu with or senior to the
claims of the Administrative Agent and the Lenders against the Borrowers
hereunder, except for the Carve-Out.
SECTION 6.8 Dividends; Capital Stock. Except for distributions or
------------------------
payments (i) from one Borrower to another Borrower, (ii) from one U.K.
Subsidiary to another U.K. Subsidiary, (iii) from one Non-Debtor Foreign
Subsidiary to another Non-Debtor Foreign Subsidiary, or (iv) from a U.K.
Subsidiary or a Non-Debtor Foreign Subsidiary to a Borrower, declare or pay,
directly or indirectly, any dividends or make any other distribution or payment,
whether in cash, property, securities or a combination thereof, with respect to
(whether by reduction of capital or otherwise) any shares of capital stock (or
any options, warrants, rights or other equity securities or agreements relating
to any capital stock), or set apart any sum for the aforesaid purposes on
anything other than an arm's-length basis.
SECTION 6.9 Transactions with Affiliates. Sell or transfer any property
----------------------------
or assets to, or otherwise engage in or permit to exist any other material
transactions with, any of its non-Borrower Affiliates other than in the ordinary
course of the Borrowers' businesses in good faith and at commercially reasonable
prices and on commercially reasonable terms and conditions not less favorable to
the Borrowers than could be obtained on an arm's-length basis from a
non-Affiliate.
SECTION 6.10 Investments, Loans and Advances. Purchase, hold or acquire any
-------------------------------
capital stock, evidences of Indebtedness or other securities of, make or permit
to exist any loans or advances to, or make or permit to exist any investment in,
any other Person (all of the foregoing, "Investments"), except for (i) Permitted
-----------
Investments; (ii) Intercompany Indebtedness owing from a Borrower to another
Borrower incurred in the ordinary course of business consistent with past
practice; (iii) existing Intercompany Indebtedness listed on Schedule 6.3 (which
------------
describes all Intercompany Loans from the Borrowers to the Foreign Subsidiaries
as of the date hereof); (iv) additional Intercompany Loans from one or more of
the Borrowers to one or more Non-Debtor Foreign Subsidiaries in an aggregate
amount not to exceed the difference between $220,000,000 (subject to reduction
pursuant to Section 2.13) and the from time to time aggregate principal balance
------------
outstanding under third party financing arrangements provided to the Non-Debtor
Foreign Subsidiaries (including, without limitation, receivables securitizations
and other third party credit facilities); (v) additional Intercompany Loans from
one or more of the Borrowers to one or more of the Non-Debtor Foreign
Subsidiaries in an aggregate amount not to exceed at any time the aggregate
amount of cash dividends paid to or loans (which have not been repaid) made to
the Borrowers after the Filing Date; (vi) additional Intercompany Loans from one
or more of the Borrowers to one or more of the U.K. Subsidiaries in an aggregate
amount not to exceed $25,000,000; (vii) Intercompany Loans from one or more of
the Foreign Subsidiaries to one or
63
more of the Borrowers; (viii) loans by the Borrowers to existing or potential
customers from whom the Borrowers reasonably expect to obtain a material
commercial benefit in a manner consistent with historical practices of the
Borrowers and in an aggregate amount not to exceed $25,000,000 at any one time;
(ix) up to C$15,000,000 note payable to Federal-Mogul Tri-Way Ltd. in connection
with the sale of the assets of Federal-Mogul Tri-Way Ltd.; and (x) Intercompany
Indebtedness owing from a Non-Debtor Foreign Subsidiary to another Non-Debtor
Foreign Subsidiary incurred in the ordinary course of business consistent with
past practice. The Borrowers may neither (a) make any additional Investments in
their Foreign Subsidiaries except as permitted hereunder nor (b) transfer any
assets or the proceeds of any Loans to any jurisdiction outside of the United
States of America except as permitted hereunder.
SECTION 6.11 Disposition of Assets. Sell or otherwise dispose of any
---------------------
assets (including, without limitation, the capital stock of any Subsidiary of
the Borrowers) except for (i) sales of Inventory in the ordinary course of
business, (ii) sales of scrap and obsolete Inventory in the ordinary course of
business, (iii) sales of the surplus real estate assets of the Borrowers set
forth on Schedule 6.11, and (iv) sales of other surplus assets no longer used in
-------------
the Borrowers' business operations for which total consideration shall not
exceed $25,000,000 in the aggregate during any period of twelve (12) consecutive
months.
SECTION 6.12 Nature of Business. Modify or alter in any material manner
------------------
the nature and type of its business as conducted at or prior to the Filing Date
or the manner in which such business is conducted (except as required by the
Bankruptcy Code).
SECTION 6.13 Transactions among Borrowers. Except to the extent existing
----------------------------
on the date the Cases were filed and disclosed on Schedule 6.13, permit, place
-------------
or agree to permit or place any restrictions on the payment of dividends or
other distributions among the Borrowers or their Subsidiaries or Affiliates or
the making of advances or any other cash payments among the Borrowers or their
Subsidiaries or Affiliates except such restrictions as may arise directly as a
result of the U.K. Administration.
SECTION 6.14 Right of Subrogation among Borrowers. Assert any right of
------------------------------------
subrogation against any other Borrower until all Borrowings and all Letters of
Credit are paid in full and the Total Commitment is terminated.
SECTION 7. EVENTS OF DEFAULT
SECTION 7.1 Events of Default. In the case of the happening of any of
-----------------
the following events and the continuance thereof beyond the applicable period of
grace (if any) set forth below (each, an "Event of Default"):
----------------
(a) any representation or warranty made by any Borrower in this
Agreement or in any Loan Document or in connection with this Agreement or the
credit extensions hereunder or any statement or representation made in any
report, financial statement, certificate or other document
64
furnished by any Borrower to the Lenders under or in connection with this
Agreement, shall prove to have been false or misleading in any material respect
when made or delivered; or
(b) default shall be made in the payment of any (i) fees or
interest on the Loans, principal of the Loans or other amounts payable by the
Borrowers hereunder (including, without limitation, reimbursement obligations or
cash collateralization in respect of Letters of Credit), when and as the same
shall become due and payable, whether at the due date thereof (including the
Prepayment Date) or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise; or
(c) default shall be made by any Borrower or any of their
respective Subsidiaries in the due observance or performance of any covenants,
conditions or agreements contained in Section 6 hereof; or
---------
(d) default shall be made by any Borrower or any of their
respective Subsidiaries in the due observance or performance of any covenant,
condition or agreement (other than the covenants, conditions or agreements
contained in Section 6 hereof) to be observed or performed pursuant to the terms
---------
of this Agreement or any of the other Loan Documents and such default shall
continue unremedied for more than ten (10) days; or
(e) any of the Cases shall be dismissed or converted to a case
under Chapter 7 of the Bankruptcy Code or any Borrower shall file a motion or
other pleading seeking the dismissal of any of the Cases or the U.K. Subsidiary
Proceedings under Section 1112 of the Bankruptcy Code or otherwise; a trustee
under Chapter 7 or Chapter 11 of the Bankruptcy Code, a responsible officer or
an examiner with enlarged powers relating to the operation of the business
(powers beyond those set forth in Section 1106(a)(3) and (4) of the Bankruptcy
Code) under Section 1106(b) of the Bankruptcy Code shall be appointed in any of
the Cases or the U.K. Subsidiary Proceedings and the order appointing such
trustee, responsible officer or examiner shall not be reversed or vacated within
thirty (30) days after the entry thereof; an application shall be filed by any
Borrower for the approval of any other Superpriority Claim (other than the
Carve-Out) in any of the Cases or the U.K. Subsidiary Proceedings which is pari
----
passu with or senior to the claims of the Administrative Agent and the Lenders
-----
against any Borrower hereunder, or there shall arise or be granted any such pari
----
passu or senior Superpriority Claim; or the Bankruptcy Code shall enter an order
-----
terminating the use of cash collateral for the purposes described in Section
-------
3.10; or
----
(f) the Bankruptcy Court shall enter an order or orders granting
relief from the automatic stay applicable under Section 362 of the Bankruptcy
Code to the holder or holders of any security interest to permit foreclosure (or
the granting of a deed in lieu of foreclosure or the like) on any assets of any
of the Borrowers which have a value in excess of $1,000,000 in the aggregate; or
(g) a Change of Control shall occur; or
(h) the Borrowers shall fail to deliver a certified Borrowing Base
Certificate when due and such default shall continue unremedied for more than
three (3) Business Days; or
65
(i) any provision of any Loan Document shall, for any reason,
cease to be valid and binding on any of the Borrowers, or any of the Borrowers
shall so assert in any pleading filed in any court; or
(j) an order of the Bankruptcy Court shall be entered reversing,
amending, supplementing, staying for a period in excess of ten (10) days,
vacating or otherwise modifying either of the Orders; or
(k) any judgment or order as to a post-petition liability or debt
for the payment of money in excess of $1,000,000 shall be rendered against any
of the Borrowers or any of their Subsidiaries and the enforcement thereof shall
not have been stayed (by court-ordered stay or by consent of the party
litigants), it being understood that Federal Rule of Civil Procedure 62(a)
provides for a ten-day stay of enforcement of money judgments; or
(l) any non-monetary judgment or order with respect to a
post-petition event shall be rendered against any Borrower or any of their
Subsidiaries which does or would reasonably be expected to (i) cause a material
adverse change in the financial condition, business, prospects, operations or
assets of the Borrowers and their Subsidiaries taken as a whole on a
consolidated basis, (ii) have a material adverse effect on the ability of any of
the Borrowers to perform their respective obligations under any Loan Document,
or (iii) have a material adverse effect on the rights and remedies of the
Administrative Agent or any Lender under any Loan Document, and there shall be
any period of ten (10) consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect; or
(m) the Borrowers or any of the Subsidiaries shall make any
Prepetition Payment (whether by way of adequate protection or otherwise) of
principal or interest or otherwise on account of any prepetition Indebtedness or
payables (including, without limitation, reclamation claims) other than
Prepetition Payments authorized by the Bankruptcy Court in respect of: (i)
accrued payroll and related employee benefit expenses as of the Filing Date,
(ii) the assumption of executory contracts and unexpired leases, (iii)
materialmen's liens and prepetition claims of Critical Trade Vendors (or
advances or deposits or other credit support in lieu thereof), all as described
in the Borrowers' Motion of the Debtors for Entry of an Order Authorizing, but
------------------------------------------------------------
not Requiring, Payment of Certain Critical Prepetition Trade Vendor Claims to be
--------------------------------------------------------------------------
filed in the cases and the U.K. Subsidiary Proceedings, in an aggregate amount
not to exceed $50,000,000, subject to the Administrative Agent's satisfaction
with the Borrowers' Critical Trade Vendor program, (iv) payments in respect of
prepetition claims of customers or advances or deposits or other credit support
in lieu thereof (pursuant to a payment program for such items acceptable to the
Administrative Agent, in its discretion), all as described in the Borrowers'
Motion for Order Authorizing the Debtors to Honor Certain Prepetition
---------------------------------------------------------------------
Obligations to Customers and to Continue Customer Accommodation Programs and
----------------------------------------------------------------------------
Practices in the Ordinary Course of Business to be filed in the Cases, in an
--------------------------------------------
aggregate amount not to exceed $40,000,000, (v) payments in respect of
prepetition claims of freight carriers or advances or deposits or other credit
in lieu thereof all as described in the Borrowers' Motion of the Debtors for an
----------------------------
Order (I) Authorizing, But Not Directing, Payment of Certain Prepetition
------------------------------------------------------------------------
Shipping Charges, Import Obligations, and Related Possessory Liens and (II)
---------------------------------------------------------------------------
Confirming Administrative Expense Status of Obligations Arising from
--------------------------------------------------------------------
Post-Petition Delivery of
-------------------------
66
Goods, to be filed in the Cases and the U.K. Subsidiary Proceedings in an
-----
aggregate amount not to exceed $7,000,000, (vi) payments in respect of
prepetition claims of taxing authorities or advances or deposits or other credit
support in lieu thereof, all as described in the Borrowers' Motion for Order
----------------
Authorizing Payment of Prepetition Payroll, Sales, Use, Property and Franchise
------------------------------------------------------------------------------
Taxes to be filed in the Cases and the U.K. Subsidiary Proceedings, in an
-----
aggregate amount not to exceed $7,000,000 (exclusive of payroll taxes), (vii)
payments in respect of prepetition claims of non-affiliated foreign creditors of
the Parent relating to the Kontich, Belgium warehouse, or advances or deposits
or other credit support in lieu thereof, all as described in the Borrowers'
Motion for Order Authorizing Debtors to Pay Prepetition Claims at the Kontich
-----------------------------------------------------------------------------
Facility to be filed in the Cases and in the U.K. Subsidiary Proceedings, in an
--------
aggregate amount not to exceed $800,000, (viii) payments in respect of
prepetition claims of creditors in connection with the Borrowers' procurement
card program or advances or deposits or other credit support in lieu thereof,
all as described in the Borrowers' Motion for Order Authorizing Debtors to Pay
-------------------------------------------
Certain Prepetition Obligations Involving Bank One Credit Card Program to be
----------------------------------------------------------------------
filed in the Cases, in an aggregate amount not to exceed $500,000, (ix)
retention of title payments, required by statute, to trade vendors in the United
Kingdom made by U.K. Subsidiaries estimated to be up to $12,000,000, (x) any
underfunded pension obligation (contingent, liquidated or unliquidated) existing
on the Filing Date under pension plans in existence on the Filing Date, which
payment must be authorized by separate order of the Bankruptcy Court, upon
notice and a hearing, (xi) the monthly payment of current interest and letter of
credit fees (and the payment of all interest and fees that are accrued and
unpaid as of the commencement of the Cases) at the applicable non-default rates
(including LIBOR pricing options) provided for pursuant to the Existing Credit
Agreement, all as described in the Borrowers' Motion of Debtors and Debtors in
--------------------------------
Possession for an Order (I) Authorizing PostPetition Financing on a Secured and
-------------------------------------------------------------------------------
Superpriority Basis Pursuant to 11 U.S.C. ss. 364; (II) Authorizing Use of Cash
-------------------------------------------------------------------------------
Collateral Pursuant to 11 U.S.C. ss. 363; (III) Granting Adequate Protection
----------------------------------------------------------------------------
Pursuant to 11 U.S.C. ▇▇.▇▇. 363 and 364; and (IV) Scheduling A Final Hearing
-----------------------------------------------------------------------------
Pursuant to Federal Rule of Bankruptcy Procedure 4001, or (xii) the regularly
-----------------------------------------------------
scheduled payment of premiums, if any, payable to the Surety Bond providers at
the applicable non-default rates set forth in the agreements with respect
thereto, all as described in the Borrowers' Motion of Debtors and Debtors in
--------------------------------
Possession for an Order (I) Authorizing PostPetition Financing on a Secured and
-------------------------------------------------------------------------------
Superpriority Basis Pursuant to 11 U.S.C. ss. 364; (II) Authorizing Use of Cash
-------------------------------------------------------------------------------
Collateral Pursuant to 11 U.S.C. ss. 363; (III) Granting Adequate Protection
----------------------------------------------------------------------------
Pursuant to 11 U.S.C. ▇▇.▇▇. 363 and 364; and (IV) Scheduling A Final Hearing
-----------------------------------------------------------------------------
Pursuant to Federal Rule of Bankruptcy Procedure 4001; or
-----------------------------------------------------
(n) any Termination Event described in clauses (iii) or (iv) of
the definition of such term shall have occurred and shall continue unremedied
for more than ten (10) days and the sum (determined as of the date of occurrence
of such Termination Event) of the Insufficiency of the Plan in respect of which
such Termination Event shall have occurred and be continuing and the
Insufficiency of any and all other Plans with respect to which such a
Termination Event (described in such clauses (iii) or (iv)) shall have occurred
and then exist is equal to or greater than $1,000,000; or
(o) (i) any Borrower or any ERISA Affiliate thereof shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan, (ii) such Borrower or such
ERISA Affiliate does not have reasonable grounds to contest such
67
Withdrawal Liability and is not in fact contesting such Withdrawal Liability in
a timely and appropriate manner, and (iii) the amount of such Withdrawal
Liability specified in such notice, when aggregated with all other amounts
required to be paid to Multiemployer Plans in connection with Withdrawal
Liabilities (determined as of the date of such notification), exceeds $1,000,000
allocable to post-petition obligations or requires payments exceeding $1,000,000
per annum in excess of the annual payments made with respect to such
Multiemployer Plans by such Borrower or such ERISA Affiliate for the plan year
immediately preceding the plan year in which such notification is received; or
(p) any Borrower or any ERISA Affiliate thereof shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is
in reorganization or is being terminated, within the meaning of Title IV of
ERISA, if as a result of such reorganization or termination the aggregate annual
contributions of such Borrower and its ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the plan
years that include the date hereof by an amount exceeding $1,000,000; or
(q) any Borrower or any ERISA Affiliate thereof shall have
committed a failure described in Section 302(f)(1) of ERISA (other than the
failure to make any contribution accrued and unpaid as of the Filing Date) and
the amount determined under Section 302(f)(3) of ERISA is equal to or greater
than $1,000,000; or
(r) it shall be determined (whether by the Bankruptcy Court or by
any other judicial or administrative forum) that any Borrower is liable for the
payment of claims arising out of any failure to comply (or to have complied)
with applicable environmental laws or regulations the payment of which will have
a material adverse effect on the financial condition, business, properties,
operations or assets of the Borrowers, taken as a whole, and the enforcement
thereof shall not have been stayed; or
(s) the Court in the United Kingdom having jurisdiction over the
U.K. Administration shall make an order granting leave pursuant to sections
10(1)(b) or 10(1)(c) of the U.K. Insolvency Act whereby any encumbrance or claim
of a third party in excess of $1,000,000 may be enforced or there shall be
rendered against the U.K. Subsidiaries a non-monetary judgment with respect to a
post-Filing Date event which causes or would reasonably be expected to cause a
material adverse change or a material adverse effect on the U.K. Subsidiaries;
then, and in every such event and at any time thereafter during the continuance
of such event, and without further order of or application to the Bankruptcy
Court, the Administrative Agent may, and at the request of the Required Lenders,
shall, take one or more of the following actions without further order of or
application to the Court, provided that with respect to item (iv) below and the
--------
enforcement of liens or other remedies with respect to collateral referred to in
item (v) below, the Administrative Agent shall provide the Borrowers (with a
copy to counsel for the Official Creditors' Committee appointed in any of the
Cases and to the United States Trustee for the Bankruptcy Court's District) with
five (5) business days' prior written notice (the "Default Notice"): (i)
--------------
terminate forthwith the Total Commitment; (ii) declare the Loans then
outstanding to be forthwith due and payable, whereupon the principal of the
Loans together with accrued interest thereon and any unpaid accrued Fees and all
other
68
liabilities of the Borrowers accrued hereunder and under any other Loan
Document, shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by the Borrowers , anything contained herein or in any other Loan
Document to the contrary notwithstanding; (iii) require the Borrowers upon
demand to forthwith deposit in the Letter of Credit Account cash in an amount
which, together with any amounts then held in the Letter of Credit Account, is
equal to the sum of 105% of the then Letter of Credit Outstandings (and to the
extent the Borrowers shall fail to furnish such funds as demanded by the
Administrative Agent, the Administrative Agent shall be authorized to debit the
accounts of the Borrowers maintained with the Administrative Agent in such
amount five (5) Business Days after the giving of the notice referred to above
(the "Default Notice Period")); (iv) set-off amounts in the Letter of Credit
---------------------
Account or any other accounts maintained with the Administrative Agent or any
other Lender or their affiliates and apply such amounts to the obligations of
the Borrowers hereunder and in the other Loan Documents; and/or (v) exercise any
and all remedies under the Loan Documents and under applicable law available to
the Administrative Agent and the Lenders.
SECTION 8. THE ADMINISTRATIVE AGENT
SECTION 8.1 Administration by Administrative Agent. The general
--------------------------------------
administration of the Loan Documents shall be performed by the Administrative
Agent. Each Lender hereby irrevocably authorizes the Administrative Agent, at
its discretion, to take or refrain from taking such actions as agent on its
behalf and to exercise or refrain from exercising such powers under the Loan
Documents as are delegated by the terms hereof or thereof, as appropriate,
together with all powers reasonably incidental thereto (including the release of
Collateral in connection with any transaction that is expressly permitted by the
Loan Documents). The Administrative Agent shall have no duties or
responsibilities except as set forth in this Agreement and the remaining Loan
Documents.
SECTION 8.2 Advances and Payments.
---------------------
(a) On the date of each Loan, the Administrative Agent shall be
authorized (but not obligated) to advance, for the account of each of the
Lenders, the amount of the Loan to be made by it in accordance with its
Commitment hereunder. Should the Administrative Agent do so, each of the Lenders
agrees forthwith to reimburse the Administrative Agent in immediately available
funds for the amount so advanced on its behalf by the Administrative Agent,
together with interest at the Federal Funds Effective Rate if not so reimbursed
on the date due from and including such date but not including the date of
reimbursement.
(b) Any amounts received by the Administrative Agent in connection
with this Agreement (other than amounts to which the Administrative Agent is
entitled pursuant to Sections 2.19, 8.6, 10.5 and 10.6), the application of
------------------------ ----
which is not otherwise provided for in this Agreement, shall be applied, first,
in accordance with each Lender's Commitment Percentage to pay accrued but unpaid
Commitment Fees or Letter of Credit Fees, and second, in accordance with each
Lender's Commitment Percentage to pay accrued but unpaid interest and the
principal balance outstanding and all unreimbursed Letter of Credit drawings.
All amounts to be paid to a Lender by the Administrative Agent shall be credited
to that Lender, after collection by the Administrative Agent, in immediately
69
available funds either by wire transfer or deposit in that Lender's
correspondent account with the Administrative Agent, as such Lender and the
Administrative Agent shall from time to time agree.
SECTION 8.3 Sharing of Setoffs. Each Lender agrees that if it shall,
------------------
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrowers, including, but not limited to, a secured claim or other security
or interest arising from, or in lieu of, such secured claim and received by such
Lender under any applicable bankruptcy, insolvency or other similar law, or
otherwise, obtain payment in respect of its Loans as a result of which the
unpaid portion of its Loans is proportionately less than the unpaid portion of
the Loans of any other Lender (a) it shall promptly purchase at par (and shall
be deemed to have thereupon purchased) from such other Lender a participation in
the Loans of such other Lender, so that the aggregate unpaid principal amount of
each Lender's Loans and its participation in Loans of the other Lenders shall be
in the same proportion to the aggregate unpaid principal amount of all Loans
then outstanding as the principal amount of its Loans prior to the obtaining of
such payment was to the principal amount of all Loans outstanding prior to the
obtaining of such payment and (b) such other adjustments shall be made from time
to time as shall be equitable to ensure that the Lenders share such payment
pro-rata, provided that if any such non-pro-rata payment is thereafter recovered
or otherwise set aside such purchase of participations shall be rescinded
(without interest). Each of the Borrowers expressly consents to the foregoing
arrangements and agrees that any Lender holding (or deemed to be holding) a
participation in a Loan may exercise any and all rights of banker's lien, setoff
(in each case, subject to the same notice requirements as pertain to clause (iv)
of the remedial provisions of Section 7.1) or counterclaim with respect to any
-----------
and all moneys owing by the Borrowers to such Lender as fully as if such Lender
held a Note and was the original obligee thereon, in the amount of such
participation.
SECTION 8.4 Agreement of Required Lenders. Upon any occasion requiring
-----------------------------
or permitting an approval, consent, waiver, election or other action on the part
of the Required Lenders, action shall be taken by the Administrative Agent for
and on behalf or for the benefit of all Lenders upon the direction of the
Required Lenders, and any such action shall be binding on all Lenders. No
amendment, modification, consent, or waiver shall be effective except in
accordance with the provisions of Section 10.10.
SECTION 8.5 Liability of Administrative Agent.
---------------------------------
(a) The Administrative Agent, when acting on behalf of the
Lenders, may execute any of its respective duties under this Agreement by or
through any of its respective officers, agents, and employees, and neither the
Administrative Agent nor its directors, officers, agents, employees or
Affiliates shall be liable to the Lenders or any of them for any action taken or
omitted to be taken in good faith, or be responsible to the Lenders or to any of
them for the consequences of any oversight or error of judgment, or for any
loss, unless the same shall happen through its gross negligence or willful
misconduct. The Administrative Agent and its respective directors, officers,
agents, employees and Affiliates shall in no event be liable to the Lenders or
to any of them for any action taken or omitted to be taken by them pursuant to
instructions received by them from the Required Lenders or in reliance upon the
advice of counsel selected by it. Without limiting the foregoing, neither the
Administrative Agent, nor any of its respective directors, officers, employees,
agents or Affiliates shall be responsible to
70
any Lender for the due execution, validity, genuineness, effectiveness,
sufficiency, or enforceability of, or for any statement, warranty, or
representation in, this Agreement, any Loan Document or any related agreement,
document or order, or shall be required to ascertain or to make any inquiry
concerning the performance or observance by the Borrowers of any of the terms,
conditions, covenants, or agreements of this Agreement or any of the Loan
Documents.
(b) Neither the Administrative Agent nor any of its respective
directors, officers, employees, agents or Affiliates shall have any
responsibility to the Borrowers on account of the failure or delay in
performance or breach by any Lender or by the Borrowers of any of their
obligations under this Agreement or any of the Loan Documents or in connection
herewith or therewith.
(c) The Administrative Agent, in its capacity as Administrative
Agent hereunder, shall be entitled to rely on any communication, instrument, or
document reasonably believed by such person to be genuine or correct and to have
been signed or sent by a person or persons believed by such person to be the
proper person or persons, and such person shall be entitled to rely on advice of
legal counsel, independent public accountants, and other professional advisers
and experts selected by such person.
SECTION 8.6 Reimbursement and Indemnification. Each Lender agrees (i)
---------------------------------
to reimburse (x) the Administrative Agent for such Lender's Commitment
Percentage of any expenses and fees incurred for the benefit of the Lenders
under this Agreement and any of the Loan Documents, including, without
limitation, counsel fees and compensation of agents and employees paid for
services rendered on behalf of the Lenders, and any other expense incurred in
connection with the operations or enforcement thereof not reimbursed by the
Borrowers and (y) the Administrative Agent for such Lender's Commitment
Percentage of any expenses of the Administrative Agent incurred for the benefit
of the Lenders that the Borrowers have agreed to reimburse pursuant to
Section 10.5 and has failed to so reimburse and (ii) to indemnify and hold
harmless the Administrative Agent and any of its directors, officers, employees,
agents or Affiliates, on demand, in the amount of its proportionate share, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against it
or any of them in any way relating to or arising out of this Agreement or any of
the Loan Documents or any action taken or omitted by it or any of them under
this Agreement or any of the Loan Documents to the extent not reimbursed by the
Borrowers (except such as shall result from their respective gross negligence or
willful misconduct).
SECTION 8.7 Rights of Administrative Agent. It is understood and agreed
------------------------------
that Chase shall have the same rights and powers hereunder (including the right
to give such instructions) as the other Lenders and may exercise such rights and
powers, as well as its rights and powers under other agreements and instruments
to which it is or may be party, and engage in other transactions with any
Borrower , as though it were not the Administrative Agent of the Lenders under
this Agreement.
SECTION 8.8 Independent Lenders. Each Lender acknowledges that it has
-------------------
decided to enter into this Agreement and to make the Loans hereunder based on
its own analysis of the transactions
71
contemplated hereby and of the creditworthiness of the Borrowers and agrees that
the Administrative Agent shall bear no responsibility therefor.
SECTION 8.9 Notice of Transfer. The Administrative Agent may deem and
------------------
treat a Lender party to this Agreement as the owner of such Lender's portion of
the Loans for all purposes, unless and until a written notice of the assignment
or transfer thereof executed by such Lender shall have been received by the
Administrative Agent.
SECTION 8.10 Successor Administrative Agent. The Administrative Agent may
------------------------------
resign at any time by giving written notice thereof to the Lenders and the
Borrowers. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Administrative Agent, which shall be reasonably
satisfactory to the Borrowers. If no successor Administrative Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment, within thirty (30) days after the retiring Administrative Agent's
giving of notice of resignation, the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which shall be
a commercial bank organized under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of a least
$100,000,000, which shall be reasonably satisfactory to the Borrowers. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring Administrative Agent's resignation hereunder as Administrative
Agent, the provisions of this Section 8 shall inure to its benefit as to any
---------
actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement.
SECTION 9. GUARANTY
SECTION 9.1 Guaranty.
--------
(a) Each of the Borrowers unconditionally and irrevocably
guarantees the due and punctual payment and performance by the Foreign
Subsidiaries under any Letters of Credit issued for the account thereof
(collectively the "Guaranteed Obligations"). The Borrowers further agree that
----------------------
the Guaranteed Obligations may be extended or renewed, in whole or in part,
without notice to or further assent from them, and they will remain bound upon
this guaranty notwithstanding any extension or renewal of any of the Guaranteed
Obligations.
(b) Each of the Borrowers waives presentation to, demand for
payment from and protest to the Foreign Subsidiaries or the Borrowers, and also
waives notice of protest for nonpayment. The Obligations of the Borrowers, as
guarantors of the Guaranteed Obligations hereunder, shall not be affected by (i)
the failure of the Administrative Agent or a Lender to assert any claim or
demand or to enforce any right or remedy against the Foreign Subsidiaries or the
Borrowers under the provisions of this Agreement or any other Loan Document or
otherwise; (ii) any extension or renewal of any provision hereof or thereof;
(iii) any rescission, waiver, compromise, acceleration, amendment or
modification of any of the terms or provisions of any of the Loan Documents;
(iv) the release, exchange, waiver or
72
foreclosure of any security held by the Administrative Agent for the Guaranteed
Obligations or any of them; (v) the failure of the Administrative Agent or a
Lender to exercise any right or remedy against any other guarantor of the
Guaranteed Obligations; or (vi) the release or substitution of any other
guarantor of the Guaranteed Obligations.
(c) The Borrowers further agree that this guaranty constitutes a
guaranty of performance and of payment when due and not just of collection, and
waives any right to require that any resort be had by the Administrative Agent
or a Lender to any security held for payment of the Guaranteed Obligations or to
any balance of any deposit, account or credit on the books of the Administrative
Agent or a Lender in favor of any Foreign Subsidiary or the Borrowers, or to any
other Person.
(d) The Borrowers hereby waive any defense that they might have
based on a failure to remain informed of the financial condition of the Foreign
Subsidiaries and any of the other Borrowers and any circumstances affecting the
ability of the Foreign Subsidiaries or the Borrowers to perform under this
Agreement.
(e) The Borrowers' guaranty shall not be affected by the
genuineness, validity, regularity or enforceability of the Guaranteed
Obligations or any other instrument evidencing any Obligations, or by the
existence, validity, enforceability, perfection, or extent of any collateral
therefor or by any other circumstance relating to the Guaranteed Obligations
which might otherwise constitute a defense to this guaranty. Neither the
Administrative Agent nor any of the Lenders makes any representation or warranty
in respect to any such circumstances or shall have any duty or responsibility
whatsoever to the Borrowers in respect of the management and maintenance of the
Guaranteed Obligations.
(f) Subject to the provisions of Section 7.1, upon any of the
-----------
Guaranteed Obligations becoming due and payable (by acceleration or otherwise),
the Lenders shall be entitled to immediate payment of such Guaranteed
Obligations by the Borrowers upon written demand by the Administrative Agent,
without further application to or order of the Bankruptcy Court.
SECTION 9.2 No Impairment of Guaranty. The obligations of the Borrowers,
-------------------------
as guarantors of the Guaranteed Obligations hereunder, shall not be subject to
any reduction, limitation, impairment or termination for any reason, including,
without limitation, any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations. Without limiting the generality
of the foregoing, the obligations of the Borrowers hereunder shall not be
discharged or impaired or otherwise affected by the failure of the
Administrative Agent or a Lender to assert any claim or demand or to enforce any
remedy under this Agreement or any other agreement, by any waiver or
modification of any provision thereof, by any default, failure or delay, willful
or otherwise, in the performance of the Guaranteed Obligations, or by any other
act or thing or omission or delay to do any other act or thing which may or
might in any manner or to any extent vary the risk of the Borrowers, as
guarantors of the Guaranteed Obligations, or would otherwise operate as
73
a discharge of the Borrowers, as guarantors of the Guaranteed Obligations, as a
matter of law, unless and until the Guaranteed Obligations are paid in full.
SECTION 9.3 Subrogation. Upon payment by the Borrowers, as guarantors
-----------
of the Guaranteed Obligations, of any sums to the Administrative Agent or a
Lender hereunder, all rights of the Borrowers against any of the Non-Debtor
Foreign Subsidiaries or any other Borrower or guarantor arising as a result
thereof by way of right of subrogation or otherwise, shall in all respects be
subordinate and junior in right of payment to the prior final and indefeasible
payment in full of all the Guaranteed Obligations. If any amount shall be paid
to the Borrowers, as guarantors of the Guaranteed Obligations, for the account
of any of Non-Debtor Foreign Subsidiaries or any other Borrower, such amount
shall be held in trust for the benefit of the Administrative Agent and the
Lenders and shall forthwith be paid to the Administrative Agent and the Lenders
to be credited and applied to the Guaranteed Obligations, whether matured or
unmatured.
SECTION 10. MISCELLANEOUS
SECTION 10.1 Notices. Notices and other communications provided for
-------
herein shall be in writing (including telegraphic, telex, facsimile or cable
communication) and shall be mailed, telegraphed, telexed, transmitted, cabled or
delivered to any Borrower at ▇/▇ ▇▇▇▇▇▇▇-▇▇▇▇▇ Corporation, World Headquarters,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇,
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ and Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇, and to a Lender or the
Administrative Agent to it at its address set forth on Annex A-1 or A-2, or such
--------- ---
other address as such party may from time to time designate by giving written
notice to the other parties hereunder. All notices and other communications
given to any party hereto in accordance with the provisions of this Agreement
shall be deemed to have been given on the fifth Business Day after the date when
sent by registered or certified mail, postage prepaid, return receipt
requested, if by mail; or when delivered to the telegraph company, charges
prepaid, if by telegram; or when receipt is acknowledged, if by any telegraphic
communications or facsimile equipment of the sender; in each case addressed to
such party as provided in this Section 10.1 or in accordance with the latest
------------
unrevoked written direction from such party; provided, however, that in the case
-------- -------
of notices to the Administrative Agent notices pursuant to the preceding
sentence with respect to change of address and pursuant to Section 2 shall be
---------
effective only when received by the Administrative Agent.
SECTION 10.2 Survival of Agreement, Representations and Warranties, etc.
----------------------------------------------------------
All warranties, representations and covenants made by any Borrower herein or in
any certificate or other instrument delivered by it or on its behalf in
connection with this Agreement shall be considered to have been relied upon by
the Lenders and shall survive the making of the Loans herein contemplated
regardless of any investigation made by any Lender or on its behalf and shall
continue in full force and effect so long as any amount due or to become due
hereunder is outstanding and unpaid and so long as the Commitments have not been
terminated. All statements in any such certificate or other instrument shall
constitute representations and warranties by the Borrowers hereunder with
respect to the Borrowers.
74
SECTION 10.3 Successors and Assigns.
----------------------
(a) This Agreement shall be binding upon and inure to the benefit
of the Borrowers, the Administrative Agent and the Lenders and their respective
successors and assigns. The Borrowers may neither assign nor transfer any of
their rights or obligations hereunder without the prior written consent of all
of the Lenders. Each Lender may sell participations to any Person in all or part
of any Loan, or all or part of its Commitment, in which event, without limiting
the foregoing, the provisions of Section 2.15 shall inure to the benefit of each
------------
purchaser of a participation (provided that such participant shall look solely
to the seller of such participation for such benefits and the Borrowers'
liability, if any, under Sections 2.15 and 2.18 shall not be increased as a
------------- ----
result of the sale of any such participation) and the pro rata treatment of
payments, as described in Section 2.17, shall be determined as if such Lender
------------
had not sold such participation. In the event any Lender shall sell any
participation, such Lender shall retain the sole right and responsibility to
enforce the obligations of each of the Borrowers relating to the Loans,
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement (provided that such Lender may
grant its participant the right to consent to such Lender's execution of
amendments, modifications or waivers which (i) reduce any Fees payable hereunder
to the Lenders, (ii) reduce the amount of any scheduled principal payment on any
Loan or reduce the principal amount of any Loan or the rate of interest payable
hereunder or (iii) extend the maturity of the Borrowers' obligations hereunder).
The sale of any such participation shall not alter the rights and obligations of
the Lender selling such participation hereunder with respect to the Borrowers.
(b) Each Lender may assign to one or more Lenders or Eligible
Assignees all or a portion of its interests, rights and obligations under this
Agreement (including, without limitation, all or a portion of its separate
Commitments and the same portion of the related Loans at the time owing to it),
provided, however, that (i) other than in the case of an assignment to any
Lender Affiliate or to a Person at least 50% owned by the assignor Lender, or by
a common parent of both, or to another Lender, the Administrative Agent and the
Fronting Bank must give their respective prior written consent to such
assignment, which consent will not be unreasonably withheld, (ii) the aggregate
amount of the Commitment and/or Loans of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall,
unless otherwise agreed to in writing by the Borrowers and the Administrative
Agent, in no event be less than $1,000,000 or the remaining portion of such
Lender's Commitment and/or Loans, if less and (iii) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register (as defined below), an Assignment and
Acceptance with blanks appropriately completed, together with a processing and
recordation fee of $3,500 (for which the Borrowers shall have no liability).
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be within ten (10) Business Days after the execution thereof (unless
otherwise agreed to in writing by the Administrative Agent), (A) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
and (B) the Lender thereunder shall, to the extent provided in such Assignment
and Acceptance, be released from its obligations under this Agreement (and, in
the case of
75
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).
(c) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such Lender
assignor makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or any of the other Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any of the other Loan Documents; (ii) such Lender assignor
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrowers or the performance or observance by
the Borrowers of any of its obligations under this Agreement or any of the other
Loan Documents or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement and
the other Loan Documents, together with copies of the financial statements
referred to in Section 3.4 and such other documents and information as it has
-----------
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Administrative Agent, such Lender assignor or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms thereto, together with such powers as are
reasonably incidental hereof; and (vi) such assignee agrees that it will perform
in accordance with their terms all obligations that by the terms of this
Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at its office a copy
of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders and the Commitments of,
and principal amount of the Loans owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive, in the absence of
--------
manifest error, and the Borrowers, the Administrative Agent and the Lenders
shall treat each Person the name of which is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrowers or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and the assignee thereunder together with the fee payable in
respect thereto, the Administrative Agent shall, if such Assignment and
Acceptance has been completed with blanks appropriately filled and consented to
by the Administrative Agent and the Fronting Bank (to the extent such consent is
required hereunder), (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt written
notice thereof to the Borrowers (together with a copy thereof). No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.
76
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
-------
10.3, disclose to the assignee or participant or proposed assignee or
----
participant, any information relating to the Borrowers furnished to such Lender
by or on behalf of any of the Borrowers; provided that prior to any such
disclosure, each such assignee or participant or proposed assignee or
participant shall agree in writing to be bound by the provisions of Section
-------
10.4.
-----
(g) Each of the Borrowers hereby agrees to actively assist and
cooperate with the Administrative Agent in the Administrative Agent's efforts to
sell participations herein (as described in Section 10.3(a)) and assign to one
---------------
or more Lenders or Eligible Assignees a portion of its interests, rights and
obligations under this Agreement (as set forth in Section 10.3(b)).
---------------
SECTION 10.4 Confidentiality. Each Lender agrees to keep any information
---------------
delivered or made available by any of the Borrowers to it confidential from
anyone other than persons employed or retained by such Lender who are or are
expected to become engaged in evaluating, approving, structuring or
administering the Loans; provided that nothing herein shall prevent any Lender
from disclosing such information (i) to any of its Affiliates or to any other
Lender, provided such Affiliate agrees to keep such information confidential to
the same extent required by the Lenders hereunder, (ii) upon the order of any
court or administrative agency, (iii) upon the request or demand of any
regulatory agency or authority, (iv) which has been publicly disclosed other
than as a result of a disclosure by the Administrative Agent or any Lender which
is not permitted by this Agreement, (v) in connection with any litigation to
which the Administrative Agent, any Lender, or their respective Affiliates may
be a party to the extent reasonably required, (vi) to the extent reasonably
required in connection with the exercise of any remedy hereunder, (vii) to such
Lender's legal counsel and independent auditors, and (viii) to any actual or
proposed participant or assignee of all or part of its rights hereunder subject
to the proviso in Section 10.3(f). Each Lender shall notify the Borrowers of any
---------------
required disclosure under clause (ii) of this Section; provided, however, that
-------- -------
the failure of any such Lender to provide such notification shall not limit,
alter or otherwise affect any of the Borrowers' obligations under this
Agreement.
SECTION 10.5 Expenses. Whether or not the transactions hereby
--------
contemplated shall be consummated, the Borrowers agree to pay all reasonable
expenses incurred by the Administrative Agent and ▇.▇. ▇▇▇▇▇▇ Securities Inc.
(including, without limitation, the reasonable fees and disbursements of ▇▇▇▇▇
▇▇▇▇ LLP, counsel for the Administrative Agent, any other counsel that the
Administrative Agent shall retain and any internal or third-party appraisers,
consultants and auditors advising the Administrative Agent and ▇.▇. ▇▇▇▇▇▇
Securities Inc. and their counsel) in connection with the preparation,
execution, delivery and administration of this Agreement and the other Loan
Documents, the making of the Loans and the issuance of the Letters of Credit,
the perfection of the Liens contemplated hereby, the syndication of the
transactions contemplated hereby, the costs, fees and expenses of the
Administrative Agent and ▇.▇. ▇▇▇▇▇▇ Securities Inc. in connection with monthly
and other periodic field audits, monitoring of assets (including reasonable and
customary internal collateral monitoring fees) and publicity expenses, and,
following the occurrence of an Event of Default, all expenses incurred by the
Lenders and the Administrative Agent in the enforcement or protection of the
rights of any one or more of the Lenders or the Administrative Agent in
connection with this Agreement
77
or the other Loan Documents, including but not limited to the fees and
disbursements of any counsel for the Lenders or the Administrative Agent. Such
payments by the Borrowers shall be made upon delivery of a statement setting
forth such costs and expenses. Whether or not the transactions hereby
contemplated shall be consummated, the Borrowers agree to reimburse the
Administrative Agent and ▇.▇. ▇▇▇▇▇▇ Securities Inc. for the expenses set forth
in the Commitment Letter and the reimbursement provisions thereof are hereby
incorporated herein by reference. The obligations of the Borrowers under this
Section shall survive the termination of this Agreement and/or the payment of
the Loans.
SECTION 10.6 Indemnity. Each of the Borrowers agree to indemnify and hold
---------
harmless the Administrative Agent, ▇.▇. ▇▇▇▇▇▇ Securities Inc. and the Lenders
and their directors, officers, employees, agents and Affiliates (each an
"Indemnified Party") from and against any and all expenses, losses, claims,
-----------------
damages and liabilities incurred by such Indemnified Party arising out of claims
made by any Person in any way relating to the transactions contemplated hereby,
but excluding therefrom all expenses, losses, claims, damages, and liabilities
to the extent that they are determined by the final judgment of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such Indemnified Party. The obligations of the Borrowers under
this Section shall survive the termination of this Agreement and/or the payment
of the Loans.
SECTION 10.7 Choice of Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
-------------
SHALL IN ALL RESPECTS BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY
WITHIN SUCH STATE AND THE BANKRUPTCY CODE.
SECTION 10.8 No Waiver. No failure on the part of the Administrative Agent
---------
or any of the Lenders to exercise, and no delay in exercising, any right, power
or remedy hereunder or any of the other Loan Documents shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law.
SECTION 10.9 Extension of Maturity. Should any payment of principal of or
---------------------
interest or any other amount due hereunder become due and payable on a day other
than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, in the case of principal, interest shall be payable
thereon at the rate herein specified during such extension.
SECTION 10.10 Amendments, etc.
----------------
(a) No modification, amendment or waiver of any provision of this
Agreement or the Security and Pledge Agreement, and no consent to any departure
by the Borrowers therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given; provided, however, that no such modification or amendment shall
without the written consent of the Lender affected thereby (x) increase the
Commitment of a Lender (it being understood that a waiver
78
of an Event of Default shall not constitute an increase in the Commitment of a
Lender), or (y) reduce the principal amount of any Loan (or any unreimbursed
Letter of Credit) or the rate of interest payable thereon, or extend any date
for the payment of interest hereunder or reduce any Fees payable hereunder or
extend the final maturity of the Borrowers' obligations hereunder; and,
provided, further, that no such modification or amendment shall without the
-------- -------
written consent of (A) all of the Lenders (i) amend or modify any provision of
this Agreement which provides for the unanimous consent or approval of the
Lenders, (ii) amend this Section 10.10 or the definition of Required Lenders or
-------------
(iii) amend or modify the Superpriority Claim status of the Lenders contemplated
by Section 2.23 or (B) the Super-Majority Lenders (i) release any material
------------
portion of the Collateral from the Liens created under the Security and Pledge
Agreement, (ii) release any Borrower, in its capacity as a Guarantor under
Section 9, (iii) alter the eligibility standards used in determining the
---------
Borrowing Base in a manner which would increase the amount of the Borrowing
Base, (iv) increase the Total Commitment to an amount in excess of $675,000,000,
or (v) increase the advance ratios in calculation of the Borrowing Base. No such
amendment or modification may adversely affect the rights and obligations of the
Administrative Agent or any Fronting Bank hereunder or any Lender in the
capacity referred to in Section 6.3(v) without its prior written consent. No
--------------
notice to or demand on any Borrower shall entitle any Borrower to any other or
further notice or demand in the same, similar or other circumstances. Each
assignee under Section 10.3(b) shall be bound by any amendment, modification,
---------------
waiver, or consent authorized as provided herein, and any consent by a Lender
shall bind any Person subsequently acquiring an interest on the Loans held by
such Lender. No amendment to this Agreement shall be effective against any
Borrower unless in writing and signed by such Borrower.
(b) Notwithstanding anything to the contrary contained in Section
-------
10.10(a), in the event that any Borrower requests that this Agreement be
--------
modified or amended in a manner which would require the unanimous consent of all
of the Lenders (or the consent described in clause (B) of the first sentence in
Section 10.10(a)) and such modification or amendment is agreed to by the
----------------
Super-majority Lenders (as hereinafter defined), then with the consent of the
Borrowers and the Super-majority Lenders, the Borrowers and the Super-majority
Lenders shall be permitted to amend the Agreement without the consent of the
Lender or Lenders which did not agree to the modification or amendment requested
by such Borrower (such Lender or Lenders, collectively the "Minority Lenders")
----------------
to provide for (w) the termination of the Commitment of each of the Minority
Lenders, (x) the addition to this Agreement of one or more other financial
institutions (each of which shall be an Eligible Assignee), or an increase in
the Commitment of one or more of the Super-majority Lenders, so that the Total
Commitment after giving effect to such amendment shall be in the same amount as
the Total Commitment immediately before giving effect to such amendment, (y) if
any Loans are outstanding at the time of such amendment, the making of such
additional Loans by such new financial institutions or Super-majority Lender or
Lenders, as the case may be, as may be necessary to repay in full the
outstanding Loans of the Minority Lenders immediately before giving effect to
such amendment and (z) such other modifications to this Agreement as may be
appropriate. As used herein, the term "Super-majority Lenders" shall mean, at
----------------------
any time, Lenders including Chase holding Loans representing at least 66-2/3% of
the aggregate principal amount of the Loans outstanding, or if no Loans are
outstanding, Lenders having Tranche A and Tranche B Commitments representing at
least 66-2/3% of the Total Commitment.
79
SECTION 10.11 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.12 Headings. Section headings used herein are for convenience
--------
only and are not to affect the construction of or be taken into consideration in
interpreting this Agreement.
SECTION 10.13 Execution in Counterparts. This Agreement may be executed in
-------------------------
any number of counterparts, each of which shall constitute an original, but all
of which taken together shall constitute one and the same instrument.
SECTION 10.14 Prior Agreements. This Agreement represents the entire
----------------
agreement of the parties with regard to the subject matter hereof and the terms
of any letters and other documentation entered into between any Borrower and any
Lender or the Administrative Agent prior to the execution of this Agreement
which relate to Loans to be made hereunder shall be replaced by the terms of
this Agreement (except as otherwise expressly provided herein with respect to
the Commitment Letter and the fee letter referred to therein, including without
limitation the Borrowers' agreement to actively assist the Administrative Agent
in the syndication of the transactions contemplated hereby referred to in
Section 10.3(g) and including also the provisions of Section 2.19).
--------------- -------------
SECTION 10.15 Further Assurances. Whenever and so often as reasonably
------------------
requested by the Administrative Agent, the Borrowers will promptly execute and
deliver or cause to be executed and delivered all such other and further
instruments, documents or assurances, and promptly do or cause to be done all
such other and further things as may be necessary and reasonably required in
order to further and more fully vest in the Administrative Agent all rights,
interests, powers, benefits, privileges and advantages conferred or intended to
be conferred by this Agreement and the other Loan Documents.
SECTION 10.16 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY
--------------------
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY.
SECTION 10.17 Subordination of Intercompany Indebtedness. Each of the
------------------------------------------
Borrowers agree that any and all Intercompany Indebtedness owed to any Borrower
shall be subordinate and subject in right of payment to the prior payment, in
full and in cash, of all Obligations. Notwithstanding any right of any Borrower
to ask, demand, ▇▇▇ for, take or receive any payment in respect of any
Intercompany Indebtedness owed to any Borrower , any and all rights, liens and
security interests of any Borrower, whether now or hereafter arising and
howsoever existing, in any assets of any other Subsidiary of Parent (whether
constituting part of Collateral given to the Administrative Agent for the
benefit of the Lenders to secure payment of all or any part of the Obligations
or otherwise) shall be and are subordinated to the rights of the Administrative
Agent and the Lenders in those assets. No Borrower shall have any
80
right to possession of any such asset or to foreclose upon any such asset,
whether by judicial action or otherwise, unless and until all of the Obligations
(other than contingent indemnity obligations) shall have been fully paid and
satisfied and all financing arrangements among the Borrowers and the Lenders
have been terminated. So long as any Event of Default shall have occurred and be
continuing, then, any payment or distribution of any kind or character, either
in cash, securities or other property, which shall be payable or deliverable
upon or with respect to any Intercompany Indebtedness owed by any Borrower shall
be paid or delivered directly to the Administrative Agent for application on any
of the Obligations, due or to become due, until such Obligations (other than
contingent indemnity obligations) shall have first been fully paid and
satisfied. Each of the Borrowers irrevocably authorize and empower the
Administrative Agent to demand, ▇▇▇ for, collect and receive every such payment
or distribution and give acquittance therefor and to make and present for and on
behalf of any Borrower such proofs of claim and take such other action, in the
Administrative Agent's own name or in the name of the applicable Borrower or
otherwise, as the Administrative Agent may deem necessary or advisable for the
enforcement of this Section 10.17. The Administrative Agent may vote such proofs
-------------
of claim in any such proceeding, receive and collect any and all dividends or
other payments or disbursements made thereon in whatever form the same may be
paid or issued and apply the same on account of any of the Obligations. Should
any payment, distribution, security or instrument or proceeds thereof be
received by any Borrower upon or with respect to the Intercompany Indebtedness
at any time an Event of Default shall have occurred and be continuing and prior
to the satisfaction of all of the Obligations and the termination of all
financing arrangements among the Borrowers and the Lenders, the applicable
Borrower shall receive and hold the same in trust, as trustee, for the benefit
of the Lenders and shall so long as any Event of Default shall have occurred and
be continuing promptly deliver the same to the Administrative Agent, for the
benefit of the Lenders, in precisely the form received (except for the
endorsement or assignment of the applicable Borrower where necessary), for
application to any of the Obligations, due or not due, and, until so delivered,
the same shall be held in trust by the applicable Borrower as the property of
the Lenders. If any Borrower fails to make any such endorsement or assignment to
the Administrative Agent, the Administrative Agent or any of its officers or
employees are irrevocably authorized to make the same. So long as any Event of
Default shall have occurred and be continuing, the Borrowers agree that until
the Obligations have been paid in full (in cash) and satisfied and all financing
arrangements among the Borrowers and the Lenders have been terminated, the
Borrowers will neither assign nor transfer to any Person (other than the
Administrative Agent) any claim the Borrowers have or may have against any other
Subsidiary of Parent.
SECTION 10.18 Certain Post Closing Matters. Notwithstanding anything to
----------------------------
the contrary contained in this Agreement, within thirty (30) days after the
Closing Date, the Borrowers shall deliver to the Administrative Agent:
(a) to the extent applicable, a copy, certified as of a recent
date by the applicable Governmental Authority, of each Organizational Document
delivered pursuant to Section 4.1(a)(i) of this Agreement which was certified by
-----------------
a Secretary or Assistant Secretary of the Borrowers;
(b) all good standing certificates, if any, which the Borrowers
were required to deliver pursuant to Section 4.1(a)(iv) of this Agreement and
------------------
delivery of which was temporarily waived
81
by the Lenders for the purposes of effecting the closing on the Closing Date;
(c) all Lien searches, if any, which the Borrowers were required
to deliver pursuant to Section 4.1(l) of this Agreement and delivery of which
was temporarily waived by the Lenders for the purposes of effecting the closing
on the Closing Date;
(d) to the extent applicable, updates to the information set forth
in Schedule 3.12 to this Agreement and Schedules 3, 4 and 5 to the Security and
------------- ----------- - -
Pledge Agreement supplementing the information set forth on such Schedules as of
the date hereof; and
(e) opinions of local counsel satisfactory to the Administrative
Agent in each of Nevada, Missouri, Alabama and Puerto Rico as to the Borrowers
organized and existing in such jurisdictions and addressing such matters as the
Administrative Agent may reasonably request.
All conditions precedent and representations contained in this Agreement shall
be deemed modified to the extent necessary to effect the foregoing (and to
permit the taking of the actions described above within the time periods
required above); provided, that to the extent any representation and warranty
--------
would not be true because the foregoing actions were not taken on the Closing
Date, the respective representation and warranty shall be required to be true
and correct at the time the respective action is taken in accordance with the
foregoing provisions of this Section 10.18. The acceptance of the benefits of
-------------
the making of each Loan and the issuance of each Letter of Credit shall
constitute a representation, warranty and covenant by the Borrowers to each of
the Lenders that the actions required pursuant to this Section 10.18 will be
taken within the relevant time periods referred to in this Section 10.18 and
-----
that, at such time, all representations and warranties contained in this
Agreement shall then be true and correct without any modification pursuant to
this Section 10.18.
-----
SECTION 10.19 Foreign Subsidiaries Notwithstanding any provision of any
--------------------
Loan Document or the Orders to the contrary, no more than 66% of the capital
stock (or comparable equity interests) in or of (x) F-M International, LLC or
(y) any Foreign Subsidiary which is a "controlled foreign corporation" within
the meaning of Section 957(a) of the Code, shall be pledged or similarly
hypothecated to guaranty or support any Obligations of any Borrower. The parties
agree that any pledge, guaranty or security or similar interest made or granted
in contravention of this Section 10.19 shall be void ab initio.
------------- ---------
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
82
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be
duly executed as of the day and the year first written.
BORROWERS:
FEDERAL-MOGUL CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
J.W.J. HOLDINGS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
FEDERAL-MOGUL TRI-WAY, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
▇▇▇▇▇▇ AUTOMOTIVE COMPANY, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
FEDERAL-MOGUL VENTURE
CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
F-M GLOBAL PROPERTIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
FEDERAL-MOGUL WORLD WIDE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
FELT PRODUCTS MANUFACTURING, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
F-M INTERNATIONAL, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
FEDERAL-MOGUL UK HOLDINGS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
FEDERAL-MOGUL GLOBAL INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
T&N INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
FERODO AMERICA, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
GASKET HOLDINGS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
FEDERAL-MOGUL MYSTIC, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
FEDERAL-MOGUL POWERTRAIN, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
FEDERAL-MOGUL PISTON RINGS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
▇▇▇▇▇▇ SEALING, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
FEDERAL-MOGUL DUTCH HOLDINGS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
FEDERAL-MOGUL IGNITION COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
FEDERAL-MOGUL PRODUCTS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Treasurer
FEDERAL-MOGUL FX, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
FEDERAL-MOGUL PUERTO RICO, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
LENDERS:
THE CHASE MANHATTAN BANK,
Individually and as Administrative Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
