POST-PETITION CREDIT AGREEMENT
Dated as of June 2, 2003
Among
WESTPOINT XXXXXXX INC.
AND CERTAIN OF ITS SUBSIDIARIES
(the Borrowers)
THE FINANCIAL INSTITUTIONS NAMED HEREIN
(the Lenders)
and
BANK OF AMERICA, N.A.
(the Administrative Agent)
and
WACHOVIA BANK, NATIONAL ASSOCIATION
(the Syndication Agent)
--------------------------------------------
Arranger:
BANC OF AMERICA SECURITIES LLC
Co-Book Managers:
BANC OF AMERICA SECURITIES LLC
WACHOVIA SECURITIES, INC.
TABLE OF CONTENTS
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ARTICLE 1 LOANS AND LETTERS OF CREDIT.........................................................................................- 2 -
1.1 DIP Facility.............................................................................................- 2 -
1.2 Revolving Loans..........................................................................................- 2 -
1.3 Letters of Credit; Agreement to Issue or Cause to Issue..................................................- 6 -
1.4 Bank Products...........................................................................................- 10 -
ARTICLE 2 INTEREST AND FEES..................................................................................................- 10 -
2.1 Interest................................................................................................- 10 -
2.2 Continuation and Conversion Elections...................................................................- 11 -
2.3 Maximum Interest Rate...................................................................................- 12 -
2.4 Closing and Agency Fees.................................................................................- 13 -
2.5 Unused Line Fee.........................................................................................- 13 -
2.6 Letter of Credit Fees...................................................................................- 13 -
ARTICLE 3 PAYMENTS AND PREPAYMENTS...........................................................................................- 13 -
3.1 Repayment of Obligations................................................................................- 13 -
3.2 Termination of DIP Facility; Extension of DIP Facility..................................................- 14 -
3.3 LIBOR Revolving Loan Prepayments........................................................................- 14 -
3.4 Payment Conventions.....................................................................................- 15 -
3.5 Payments as Revolving Loans.............................................................................- 15 -
3.6 Apportionment, Application and Reversal of Payments.....................................................- 15 -
3.7 Indemnity for Returned Payments.........................................................................- 16 -
3.8 Administrative Agent's and Lenders' Books and Records; Monthly Statements...............................- 16 -
3.9 Nature and Extent of Each Borrower's Liability..........................................................- 17 -
ARTICLE 4 TAXES, YIELD PROTECTION AND ILLEGALITY.............................................................................- 18 -
4.1 Taxes...................................................................................................- 18 -
4.2 Illegality..............................................................................................- 19 -
4.3 Increased Costs and Reduction of Return.................................................................- 20 -
4.4 Funding Losses..........................................................................................- 20 -
4.5 Inability to Determine Rates............................................................................- 21 -
4.6 Certificates of Administrative Agent....................................................................- 21 -
4.7 Survival................................................................................................- 21 -
ARTICLE 5 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES..................................................................- 21 -
5.1 Books and Records.......................................................................................- 21 -
5.2 Financial and Other Information.........................................................................- 22 -
5.3 Notices and Reports to the Administrative Agent and the Lenders.........................................- 25 -
ARTICLE 6 GENERAL WARRANTIES AND REPRESENTATIONS.............................................................................- 27 -
6.1 Authorization, Validity, and Enforceability of this Agreement and the DIP Financing Documents...........- 27 -
6.2 Validity and Priority of Security Interest..............................................................- 28 -
6.3 Organization and Qualification..........................................................................- 28 -
6.4 Corporate Name; Prior Transactions......................................................................- 28 -
6.5 Subsidiaries and Affiliates.............................................................................- 28 -
6.6 Financial Statements and Projections....................................................................- 29 -
6.7 [Intentionally Omitted].................................................................................- 29 -
6.8 Liens on Collateral.....................................................................................- 29 -
6.9 Debt....................................................................................................- 29 -
6.10 Distributions...........................................................................................- 29 -
6.11 Real Estate; Leases.....................................................................................- 29 -
6.12 Proprietary Rights......................................................................................- 30 -
6.13 Trade Names.............................................................................................- 30 -
6.14 Litigation..............................................................................................- 30 -
6.15 Labor Disputes..........................................................................................- 30 -
6.16 Environmental Laws......................................................................................- 30 -
6.17 No Violation of Law.....................................................................................- 32 -
6.18 No Default..............................................................................................- 32 -
6.19 ERISA Compliance........................................................................................- 32 -
6.20 Taxes...................................................................................................- 33 -
6.21 Regulated Entities......................................................................................- 33 -
6.22 Use of Proceeds; Margin Regulations; Loans to Directors and Executive Officers..........................- 33 -
6.23 Copyrights, Patents, Trademarks and Licenses, etc.......................................................- 33 -
6.24 No Material Adverse Change..............................................................................- 33 -
6.25 Full Disclosure.........................................................................................- 33 -
6.26 [Intentionally Omitted].................................................................................- 34 -
6.27 Bank Accounts...........................................................................................- 34 -
6.28 Governmental Authorization..............................................................................- 34 -
6.29 Tax Shelter Regulations.................................................................................- 34 -
6.30 Reaffirmation of Representations and Warranties.........................................................- 34 -
ARTICLE 7 AFFIRMATIVE AND NEGATIVE COVENANTS.................................................................................- 34 -
7.1 Taxes and Other Obligations.............................................................................- 34 -
7.2 Legal Existence and Good Standing.......................................................................- 35 -
7.3 Compliance with Law and Agreements; Maintenance of Licenses.............................................- 35 -
7.4 Maintenance of Property; Inspection of Property.........................................................- 35 -
7.5 Insurance...............................................................................................- 35 -
7.6 Disposition of Insurance and Condemnation Proceeds......................................................- 36 -
7.7 Environmental Laws......................................................................................- 37 -
7.8 Compliance with ERISA...................................................................................- 38 -
7.9 Mergers, Consolidations or Sales........................................................................- 38 -
7.10 Distributions; Capital Change; Restricted Investments...................................................- 38 -
7.11 Transactions Affecting Collateral or Obligations........................................................- 39 -
7.12 Guaranties..............................................................................................- 39 -
7.13 Permitted Debt..........................................................................................- 39 -
7.14 Prepayment..............................................................................................- 39 -
7.15 Transactions with Affiliates............................................................................- 39 -
7.16 Investment Banking and Finder's Fees....................................................................- 40 -
7.17 Business Conducted......................................................................................- 40 -
7.18 Liens...................................................................................................- 40 -
7.19 Sale and Leaseback Transactions.........................................................................- 40 -
7.20 New Subsidiaries........................................................................................- 40 -
7.21 Fiscal Year.............................................................................................- 40 -
7.22 Capital Expenditures....................................................................................- 40 -
7.23 EBITDA..................................................................................................- 41 -
7.24 [Intentionally Omitted].................................................................................- 42 -
7.25 Margin Stock............................................................................................- 42 -
7.26 Further Assurances; Post-Closing Obligations............................................................- 42 -
7.27 Compliance with Orders..................................................................................- 43 -
7.28 Turnover of Collateral Proceeds.........................................................................- 43 -
7.29 Payment of Claims.......................................................................................- 43 -
7.30 Filing of Motions and Applications......................................................................- 43 -
7.31 Modifications to Orders.................................................................................- 43 -
7.32 Reclamation Claims......................................................................................- 43 -
7.33 Subsidiary Guarantors...................................................................................- 43 -
7.34 Plant Shutdown Costs....................................................................................- 43 -
7.35 Commingling.............................................................................................- 44 -
7.36 Royalty Payments........................................................................................- 44 -
ARTICLE 8 CONDITIONS OF LENDING..............................................................................................- 44 -
8.1 Conditions Precedent to Making of Loans on the Closing Date.............................................- 44 -
8.2 Conditions Precedent After Interim Period...............................................................- 46 -
8.3 Conditions Precedent to Each Loan.......................................................................- 46 -
ARTICLE 9 DEFAULT; REMEDIES..................................................................................................- 47 -
9.1 Events of Default.......................................................................................- 47 -
9.2 Remedies................................................................................................- 50 -
ARTICLE 10 TERM AND TERMINATION..............................................................................................- 51 -
10.1 Term and Termination....................................................................................- 51 -
ARTICLE 11 AMENDMENTS; WAIVERs; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS......................................................- 52 -
11.1 Amendments and Waivers..................................................................................- 52 -
11.2 Assignments; Participations.............................................................................- 53 -
ARTICLE 12 THE ADMINISTRATIVE AGENT..........................................................................................- 55 -
12.1 Appointment and Authorization...........................................................................- 55 -
12.2 Delegation of Duties....................................................................................- 56 -
12.3 Liability of Administrative Agent.......................................................................- 56 -
12.4 Reliance by Administrative Agent........................................................................- 56 -
12.5 Notice of Default.......................................................................................- 57 -
12.6 Credit Decision.........................................................................................- 57 -
12.7 Indemnification.........................................................................................- 57 -
12.8 Administrative Agent in Individual Capacity.............................................................- 58 -
12.9 Successor Administrative Agent..........................................................................- 58 -
12.10 Withholding Tax.........................................................................................- 59 -
12.11 Collateral Matters......................................................................................- 60 -
12.12 Restrictions on Actions by Lenders; Sharing of Payments.................................................- 61 -
12.13 Agency for Perfection...................................................................................- 62 -
12.14 Payments by Administrative Agent to Lenders.............................................................- 62 -
12.15 Settlement..............................................................................................- 62 -
12.16 Letters of Credit; Intra-Lender Issues..................................................................- 66 -
12.17 Concerning the Collateral and the Related DIP Financing Documents.......................................- 68 -
12.18 Field Audit and Examination Reports; Disclaimer by Lenders..............................................- 68 -
12.19 Relation Among Lenders..................................................................................- 69 -
12.20 Syndication Agent.......................................................................................- 69 -
ARTICLE 13 MISCELLANEOUS.....................................................................................................- 69 -
13.1 No Waivers; Cumulative Remedies.........................................................................- 69 -
13.2 Severability............................................................................................- 69 -
13.3 Governing Law; Choice of Forum; Service of Process......................................................- 70 -
13.4 WAIVER OF JURY TRIAL....................................................................................- 70 -
13.5 Survival of Representations and Warranties..............................................................- 71 -
13.6 Other Security and Guaranties...........................................................................- 71 -
13.7 Fees and Expenses.......................................................................................- 71 -
13.8 Notices.................................................................................................- 72 -
13.9 Waiver of Notices.......................................................................................- 73 -
13.10 Binding Effect..........................................................................................- 73 -
13.11 Indemnity of the Agents and the Lenders by the Borrowers................................................- 73 -
13.12 Limitation of Liability.................................................................................- 74 -
13.13 Final Agreement.........................................................................................- 74 -
13.14 Counterparts............................................................................................- 74 -
13.15 Captions - 75 -
13.16 Right of Setoff.........................................................................................- 75 -
13.17 Confidentiality.........................................................................................- 75 -
13.18 Conflicts with Other DIP Financing Documents............................................................- 76 -
ANNEXES, EXHIBITS AND SCHEDULES
-------------------------------
ANNEX A - DEFINED TERMS
ANNEX B - DESIGNATED ACCOUNT DEBTORS
EXHIBIT A - [INTENTIONALLY OMITTED]
EXHIBIT B - FORM OF BORROWING BASE CERTIFICATE
EXHIBIT C - FINANCIAL STATEMENTS
EXHIBIT D - FORM OF NOTICE OF BORROWING
EXHIBIT E - FORM OF NOTICE OF CONTINUATION/CONVERSION
EXHIBIT F - FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
SCHEDULE 1.1 - LENDERS' COMMITMENTS (ANNEX A - DEFINED TERMS)
SCHEDULE 6.3 - ORGANIZATION AND QUALIFICATIONS
SCHEDULE 6.4 - CORPORATE NAMES; PRIOR TRANSACTIONS
SCHEDULE 6.5 - SUBSIDIARIES AND AFFILIATES
SCHEDULE 6.9 - DEBT
SCHEDULE 6.11 - REAL ESTATE; LEASES
SCHEDULE 6.12 - PROPRIETARY RIGHTS
SCHEDULE 6.13 - TRADE NAMES
SCHEDULE 6.14 - LITIGATION
SCHEDULE 6.15 - LABOR DISPUTES
SCHEDULE 6.16 - ENVIRONMENTAL LAW
SCHEDULE 6.19 - ERISA COMPLIANCE
SCHEDULE 6.27 - BANK ACCOUNTS
POST-PETITION CREDIT AGREEMENT
------------------------------
This POST-PETITION CREDIT AGREEMENT, dated as of June 2, 2003 (this
"Agreement"), is made among WESTPOINT XXXXXXX INC., a Delaware corporation and
Chapter 11 debtor-in-possession ("WPS"), WESTPOINT XXXXXXX INC I, a Delaware
corporation and Chapter 11 debtor-in-possession ("WPSI"), X.X. XXXXXXX & CO.,
INC., a Delaware corporation and Chapter 11 debtor-in-possession ("JPS"), X.X.
XXXXXXX ENTERPRISES, INC., a Delaware corporation and Chapter 11
debtor-in-possession ("JPSE"), and WESTPOINT XXXXXXX STORES INC., a Georgia
corporation and Chapter 11 debtor-in-possession ("WPSS") (WPS, WPSI, JPS, JPSE
and WPSS each is referred to hereinafter as a "Borrower" and collectively as the
"Borrowers"), the financial institutions from time to time parties hereto (such
financial institutions, together with their respective successors and assigns,
are referred to hereinafter each individually as a "Lender" and collectively as
the "Lenders"), BANK OF AMERICA, N.A., in its capacity as administrative and
collateral agent for the Lenders (together with its successors in such capacity,
the "Administrative Agent"), and WACHOVIA BANK, NATIONAL ASSOCIATION, in its
capacity as syndication agent for the Lenders (in such capacity, the
"Syndication Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Borrowers are debtors-in-possession under Chapter 11 of the
Bankruptcy Code in cases (the "Chapter 11 Cases") pending in the United States
Bankruptcy Court for the Southern District of New York (together with any other
court having jurisdiction over the Chapter 11 Cases or any proceedings therein
from time to time, the "Court"), as Case Nos. 03-13532 through 03-13536
WHEREAS, Borrowers have requested the Lenders to make available to
the Borrowers a revolving line of credit for loans and letters of credit in an
amount not to exceed $300,000,000, which extensions of credit the Borrowers will
use only for the purposes permitted hereunder;
WHEREAS, capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings ascribed thereto in Annex A which is
attached hereto and incorporated herein; the rules of construction contained
therein shall govern the interpretation of this Agreement, and all Annexes,
Exhibits and Schedules attached hereto are incorporated herein by reference;
WHEREAS, the Lenders have agreed to make available to the Borrowers a
revolving credit facility upon the terms and conditions set forth in this
Agreement, and subject to the terms and conditions set forth in orders of the
Court approving the proposed financing.
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged, the Lenders, the Administrative
Agent, and the Borrowers hereby agree as follows.
ARTICLE 1
LOANS AND LETTERS OF CREDIT
---------------------------
1.1 DIP Facility. Subject to all of the terms and conditions of this
Agreement and the other DIP Financing Documents, the Lenders agree to make
available a total credit facility of up to $300,000,000 (the "DIP Facility") to
the Borrowers from time to time during the term of this Agreement. The DIP
Facility shall be composed of a revolving line of credit consisting of Revolving
Loans and Letters of Credit described herein.
1.2 Revolving Loans.
(a) Amounts. Subject to the satisfaction of the conditions precedent
set forth in Article 8, each Lender severally, but not jointly, agrees, upon the
Borrowers' request from time to time on any Business Day during the period from
the Closing Date to the day before the last day of the DIP Term, to make
revolving loans (the "Revolving Loans") to the Borrowers in amounts not to
exceed such Lender's Pro Rata Share of Availability, except for Non-Ratable
Loans and Agent Advances. The Lenders, however, in their unanimous discretion,
may elect to make Revolving Loans or issue or arrange to have issued Letters of
Credit in excess of the Borrowing Base, on one or more occasions, but if they do
so, neither the Administrative Agent nor the Lenders shall be deemed thereby to
have changed the limits of the Borrowing Base or to be obligated to exceed such
limits on any other occasion. If any Borrowing would exceed Availability, the
Lenders may refuse to make or may otherwise restrict the making of Revolving
Loans as the Lenders determine until such excess has been eliminated, subject to
the Administrative Agent's authority, in its sole discretion, to make Agent
Advances pursuant to the terms of Section 1.2(i).
(b) Use of Proceeds. During the Interim Period, the proceeds of the
Revolving Loans shall be used by Borrowers exclusively for one or more of the
following purposes: (i) to pay expenses described (and in amounts not to exceed
those shown) in the Budget; (ii) to pay any of the Obligations; (iii) to pay any
amounts authorized or required to be paid pursuant to any of the "first day
orders" of the Court or pursuant to any other order of the Court; (iv) to pay
adequate protection payments pursuant to the Interim Pre-Petition Lender
Protection Order; and (v) to pay Claims authorized to be paid under Section 556
of the Bankruptcy Code. After the Interim Period, the proceeds of the Revolving
Loans shall be used by Borrowers exclusively for one or more of the following
purposes: (i) to pay operating expenses in the Ordinary Course of Business
provided that the incurrence or payment thereof is not otherwise violative of
this Agreement or the Financing Orders; (ii) to pay adequate protection payments
pursuant to the Final Pre-Petition Lender Protection Order; (iii) to pay
Adequate Protection Claims, Reclamation Claims and Critical Vendor Claims, but
only to the extent authorized by the Court; (iv) to pay fees required to be paid
to the Office of the United States Trustee; (v) to pay Professional Expenses of
Professional Persons and Committee Expenses, in each case subject to allowance
by the Court and Borrowers' receipt of an itemized billing and expense statement
from each such Professional Person and Committee member; (vi) to pay any of the
Obligations; (vii) to pay property taxes with respect to any Collateral to the
extent nonpayment thereof is secured by a Lien senior to Administrative Agent's
2
Liens thereon; (viii) to repurchase or otherwise reacquire any Purchased
Receivables pursuant to Section 7.15(c), but only to the extent authorized by
the Court; (ix) to purchase any returned goods pursuant to Section 7.15(b), but
only to the extent authorized by the Court; (x) to pay fees and expenses
associated with a KERP, provided that the KERP is approved by final order of the
Court and is reasonably acceptable to Administrative Agent; and (xi) to pay
other liabilities or obligations of a Borrower so long as the incurrence or
payment of such liabilities and obligations is not violative of this Agreement,
the Financing Orders, any other order of the Court or applicable law.
Notwithstanding anything to the contrary contained herein, in no event shall
proceeds of Revolving Loans be used to pay Professional Expenses incurred in
connection with the assertion of or joinder in any claim, counterclaim, action,
contested matter, objection, defense or other proceeding, the purpose of which
is to seek or the result of which would be to obtain any order, judgment,
declaration, or similar relief (a) seeking damages against any Agent or Lender
on account of any alleged cause of action arising on, before or after the
Petition Date; (b) invalidating, setting aside, avoiding or subordinating, in
whole or in part, any of the Obligations or Liens and security interests in any
of the Collateral granted to Administrative Agent under this Agreement or the
Financing Orders; (c) declaring any of the DIP Financing Documents to be
invalid, not binding or unenforceable in any respect; (d) preventing, enjoining,
hindering or otherwise delaying Administrative Agent's or any Lender's
enforcement of any of the DIP Financing Documents or any realization upon any
Collateral (unless such enforcement or realization is in direct violation of an
explicit provision in any of the Financing Orders); (e) declaring any Liens
granted or purported to be granted under any of the DIP Financing Documents to
have a priority other than the priority set forth therein or in any of the
Financing Orders; or (f) seeking to use the cash proceeds of any of the
Collateral without the prior written consent of Administrative Agent and the
Majority Lenders. Nothing in this Section 1.2(b) shall be construed to waive any
Agent's or Lender's right to object to any requests, motions or applications
made in or filed with the Court, including any applications for interim or final
allowances of Professional Expenses.
(c) Procedure for Borrowing. (1) Each Borrowing shall be made upon
the Borrowers' irrevocable written notice delivered to the Administrative Agent
in the form of a notice of borrowing ("Notice of Borrowing"), which must be
received by the Administrative Agent prior to (i) 12:00 noon (Atlanta, Georgia
time) three Business Days prior to the requested Funding Date, in the case of
LIBOR Revolving Loans, and (ii) 12:00 noon (Atlanta, Georgia time) on the
requested Funding Date, in the case of Base Rate Revolving Loans, specifying:
(A) the amount of the Borrowing, which in the case of a LIBOR
Revolving Loan must equal or exceed $10,000,000 (and increments of
$1,000,000 in excess of such amount);
(B) the requested Funding Date, which must be a Business Day;
(C) whether the Revolving Loans requested are to be Base Rate
Revolving Loans or LIBOR Revolving Loans (and if not specified, it
shall be deemed a request for a Base Rate Revolving Loan); and
3
(D) the duration of the Interest Period for LIBOR Revolving Loans
(and if not specified, it shall be deemed a request for an Interest
Period of one month);
provided, however, that with respect to the Borrowings to be made during the
period commencing on the Closing Date and ending on the seventh day after the
Closing Date, such Borrowings will consist of Base Rate Revolving Loans only.
(2) In lieu of delivering a Notice of Borrowing, the Borrowers may
give the Administrative Agent telephonic notice of such request for
advances to the Designated Account on or before the deadline set forth
above. The Administrative Agent at all times shall be entitled to rely on
such telephonic notice in making such Revolving Loans, regardless of
whether any written confirmation is received.
(3) The Borrowers shall have no right to request a LIBOR Revolving
Loan while a Default or Event of Default has occurred and is continuing.
(d) Reliance upon Authority. Prior to the Closing Date, the Borrowers
shall deliver to the Administrative Agent, a notice setting forth the account of
the Borrowers ("Designated Account") to which the Administrative Agent is
authorized to transfer the proceeds of the Revolving Loans requested hereunder.
The Borrowers may designate a replacement account from time to time by written
notice. The Designated Account must be reasonably satisfactory to the
Administrative Agent. The Administrative Agent is entitled to rely conclusively
on any Person's request for Revolving Loans on behalf of the Borrowers, so long
as the proceeds thereof are to be transferred to the Designated Account. The
Administrative Agent has no duty to verify the identity of any individual
representing himself or herself as a person authorized by the Borrowers to make
such requests on its behalf.
(e) No Liability. The Administrative Agent shall not incur any
liability to the Borrowers as a result of acting upon any notice referred to in
Sections 1.2(c) and (d), which the Administrative Agent believes in good faith
to have been given by an officer or other person duly authorized by the
Borrowers to request Revolving Loans on its behalf. The crediting of Revolving
Loans to the Designated Account conclusively establishes the obligation of the
Borrowers to repay such Revolving Loans as provided herein.
(f) Notice Irrevocable. Any Notice of Borrowing (or telephonic notice
in lieu thereof) made pursuant to Section 1.2(c) shall be irrevocable. The
Borrowers shall be bound to borrow the funds requested therein in accordance
therewith.
(g) Administrative Agent's Election. Promptly after receipt of a
Notice of Borrowing (or telephonic notice in lieu thereof), the Administrative
Agent shall elect to have the terms of Section 1.2(h) or the terms of Section
1.2(i) apply to such requested Borrowing. If Bank of America declines in its
sole discretion to make a Non-Ratable Loan pursuant to Section 1.2(i), the terms
of Section 1.2(h) shall apply to the requested Borrowing.
(h) Making of Revolving Loans. If Administrative Agent elects to have
the terms of this Section 1.2(h) apply to a requested Borrowing, then promptly
after receipt of a Notice of Borrowing or telephonic notice in lieu thereof, the
4
Administrative Agent shall notify the Lenders by telecopy, telephone or e-mail
of the requested Borrowing. Each Lender shall transfer its Pro Rata Share of the
requested Borrowing available to the Administrative Agent in immediately
available funds, to the account from time to time designated by Administrative
Agent, not later than 1:00 p.m. (Atlanta, Georgia time) on the applicable
Funding Date. After the Administrative Agent's receipt of all proceeds of such
Revolving Loans, the Administrative Agent shall make the proceeds of such
Revolving Loans available to the Borrowers on the applicable Funding Date by
transferring same day funds to the account designated by the Borrowers;
provided, however, that the amount of Revolving Loans so made on any date shall
not exceed the Availability on such date.
(i) Making of Non-Ratable Loans.
(A) If Administrative Agent elects, with the consent of Bank of
America, to have the terms of this Section 1.2(i) apply to a requested
Borrowing, Bank of America shall make a Revolving Loan in the amount
of that Borrowing available to the Borrower on the applicable Funding
Date by transferring same day funds to the Designated Account. Each
Revolving Loan made solely by Bank of America pursuant to this Section
is herein referred to as a "Non-Ratable Loan," and such Revolving
Loans are collectively referred to as the "Non-Ratable Loans." Each
Non-Ratable Loan shall be subject to all the terms and conditions
applicable to other Revolving Loans except that all payments thereon
shall be payable to Bank of America solely for its own account. The
aggregate amount of Non-Ratable Loans outstanding at any time shall
not exceed $30,000,000. The Administrative Agent shall not request
Bank of America to make any Non-Ratable Loan if (1) the Administrative
Agent has received written notice from any Lender that one or more of
the applicable conditions precedent set forth in Article 8 will not be
satisfied on the requested Funding Date for the applicable Borrowing,
or (2) the requested Borrowing would exceed Availability on that
Funding Date.
(B) The Non-Ratable Loans shall be secured by the Administrative
Agent's Liens in and to the Collateral and shall constitute Base Rate
Revolving Loans and Obligations hereunder.
(j) Agent Advances.
(A) Notwithstanding anything to the contrary elsewhere in this
Agreement or any other DIP Financing Document (and irrespective of the
existence of any Overadvance Condition), but subject to the dollar
limitations set forth below, the Administrative Agent is authorized by
the Borrowers and the Lenders, from time to time in the Administrative
Agent's sole discretion, (A) after the occurrence of a Default or an
Event of Default (and for so long as such Default or Event of Default
is not waived or cured) or (B) at any time that any of the other
conditions precedent set forth in Article 8 have not been satisfied
(and, as a consequence thereof one or more of the Lenders gives notice
to the Administrative Agent of its intent not to fund Revolving
Loans), to make Base Rate Revolving Loans from time to time to the
Borrowers on behalf of the Lenders which the Administrative Agent, in
its reasonable business judgment, deems necessary or desirable (1) to
preserve, protect, insure, xxxxxxxx, market, sell or otherwise dispose
5
of any of the Collateral or to enhance the likelihood of, or maximize
the amount of, repayment of the Loans and other Obligations, provided
that the Administrative Agent shall not be authorized to make any
Agent Advance (as hereinafter defined) if the principal amount of such
Agent Advance, when added to the aggregate principal amount of all
Agent Advances then outstanding, would exceed $10,000,000 (or, with
the consent of the Syndication Agent, $20,000,000), (2) to pay fees
and expenses covered by the Carve-Out, or (3) to pay any other amount
chargeable to the Borrowers pursuant to the terms of this Agreement,
including costs, fees and expenses as described in Section 13.7 (any
of such advances are herein referred to as "Agent Advances");
provided, that the Lenders (but not the Majority Lenders or the
Supermajority Lenders) may at any time revoke the Administrative
Agent's authorization to make Agent Advances by the written direction
of all of such Lenders. Any such revocation must be in writing and
shall become effective prospectively upon the Administrative Agent's
receipt thereof.
(B) The Agent Advances shall be secured by the Administrative
Agent's Liens in and to the Collateral and shall constitute Base Rate
Revolving Loans and Obligations hereunder.
(k) Borrowers' Agent. Each Borrower hereby irrevocably appoints WPS,
and WPS agrees to act under this Agreement, as the agent and representative of
itself and each other Borrower for all purposes under this Agreement (in such
capacity, "Borrowers' Agent"), including requesting Revolving Loans and
receiving account statements and other notices and communications to Borrowers
(or any of them) from the Administrative Agent and the Lenders. The
Administrative Agent and the Lenders may rely, and shall be fully protected in
relying, upon any Notice of Borrowing, disbursement instructions, reports,
information, Borrowing Base Certificates or any other notice or communication
made or given by Borrowers' Agent, whether in its own name, on behalf of any
Borrower or on behalf of "the Borrowers," and the Administrative Agent and the
Lenders shall have no obligation to make any inquiry or to request any
confirmation from or on behalf of any other Borrower as to the binding effect on
such Borrower of any such Notice of Borrowing, instruction, report, information,
Borrowing Base Certificate or other notice or communication, nor shall the joint
and several character of the Borrowers' liability for the Obligations be
affected, provided that the provisions of this Section 1.2(l) shall not be
construed to preclude any Borrower from directly requesting Revolving Loans or
taking other actions permitted to be taken by "a Borrower" hereunder. The
Administrative Agent and the Lenders may maintain a single Loan Account in the
name of "WPS" hereunder, and each Borrower expressly agrees to such arrangement
and confirms that such arrangement shall have no effect upon the joint and
several character of such Borrower's liability for the Obligations.
1.3 Letters of Credit; (a) Agreement to Issue or Cause to Issue. (a)
Subject to the terms and conditions of this Agreement, the Administrative Agent
agrees (i) to cause the Letter of Credit Issuer to issue for the account of the
Borrowers one or more commercial/documentary and standby letters of credit
("Letter of Credit") and/or (ii) to provide to a Letter of Credit Issuer credit
support or other enhancement acceptable to the Administrative Agent (any such
credit support or enhancement being herein referred to as a "Credit Support")
from time to time during the term of this Agreement.
6
(b) Amounts; Outside Expiration Date. The Administrative Agent shall
not have any obligation to issue or cause to be issued any Letter of Credit or
to provide Credit Support for any Letter of Credit at any time if: (i) the
maximum face amount of the requested Letter of Credit is greater than the Unused
Letter of Credit Subfacility at such time; (ii) the maximum undrawn amount of
the requested Letter of Credit and all commissions, fees, and charges due from
the Borrowers in connection with the opening thereof would exceed Availability
at such time; or (iii) such Letter of Credit has an expiration date more than
twelve (12) months from the date of issuance for standby letters of credit and
one hundred eighty (180) days for documentary letters of credit. With respect to
any Letter of Credit which contains any "evergreen" or automatic renewal
provision, each Lender shall be deemed to have consented to any such extension
or renewal unless any such Lender shall have provided to the Administrative
Agent written notice that it declines to consent to any such extension or
renewal at least thirty (30) days prior to the date on which the Letter of
Credit Issuer is entitled to decline to extend or renew the Letter of Credit. If
all of the requirements of this Section 1.3 are met and no Default or Event of
Default has occurred and is continuing, no Lender shall decline to consent to
any such extension or renewal.
(c) Other Conditions. In addition to conditions precedent contained
in Article 8, the obligation of the Administrative Agent to cause to be issued
any Letter of Credit or to provide Credit Support for any Letter of Credit is
subject to the following conditions precedent having been satisfied in a manner
reasonably satisfactory to the Administrative Agent:
(1) The Borrowers shall have delivered to the Letter of Credit
Issuer, at such times and in such manner as such Letter of Credit
Issuer may prescribe, an application in form and substance
satisfactory to such Letter of Credit Issuer and reasonably
satisfactory to the Administrative Agent for the issuance of the
Letter of Credit and such other documents as may be required pursuant
to the terms thereof, and the form, terms and purpose of the proposed
Letter of Credit shall be reasonably satisfactory to the
Administrative Agent and the Letter of Credit Issuer; and
(2) As of the date of issuance, no order of any court, arbitrator
or Governmental Authority shall purport by its terms to enjoin or
restrain money center banks generally from issuing letters of credit
of the type and in the amount of the proposed Letter of Credit, and no
law, rule or regulation applicable to money center banks generally and
no request or directive (whether or not having the force of law) from
any Governmental Authority with jurisdiction over money center banks
generally shall prohibit, or request that the proposed Letter of
Credit Issuer refrain from, the issuance of letters of credit
generally or the issuance of such Letters of Credit.
(d) Issuance of Letters of Credit.
(1) Request for Issuance. Borrowers must notify the
Administrative Agent of a requested Letter of Credit at least three
(3) Business Days prior to the proposed issuance date. Such notice
shall be irrevocable and must specify the original face amount of the
Letter of Credit requested, the Business Day of issuance of such
7
requested Letter of Credit, whether such Letter of Credit may be drawn
in a single or in partial draws, the Business Day on which the
requested Letter of Credit is to expire, the purpose for which such
Letter of Credit is to be issued, and the beneficiary of the requested
Letter of Credit. The Borrowers shall attach to such notice the
proposed form of the Letter of Credit.
(2) Responsibilities of the Administrative Agent; Issuance. As of
the Business Day immediately preceding the requested issuance date of
the Letter of Credit, the Administrative Agent shall determine the
amount of the applicable Unused Letter of Credit Subfacility and
Availability. If (i) the face amount of the requested Letter of Credit
is less than the Unused Letter of Credit Subfacility and (ii) the
amount of such requested Letter of Credit and all commissions, fees,
and charges due from the Borrowers in connection with the opening
thereof would not exceed Availability, the Administrative Agent shall
cause the Letter of Credit Issuer to issue the requested Letter of
Credit on the requested issuance date so long as the other conditions
hereof are met.
(3) No Extensions or Amendment. The Administrative Agent shall
not be obligated to cause the Letter of Credit Issuer to extend or
amend any Letter of Credit issued pursuant hereto unless the
requirements of this Section 1.3 are met as though a new Letter of
Credit were being requested and issued.
(e) Payments Pursuant to Letters of Credit. The Borrowers agree to
reimburse immediately the Letter of Credit Issuer for any draw under any Letter
of Credit and the Administrative Agent for the account of the Lenders upon any
payment pursuant to any Credit Support, and to pay the Letter of Credit Issuer
the amount of all other charges and fees payable to the Letter of Credit Issuer
in connection with any Letter of Credit immediately when due, irrespective of
any claim, setoff, defense or other right which the Borrowers may have at any
time against the Letter of Credit Issuer or any other Person. Each drawing under
any Letter of Credit shall constitute a request by the Borrowers to the
Administrative Agent for a Borrowing of a Base Rate Revolving Loan in the amount
of such drawing. The Funding Date with respect to such borrowing shall be the
date of such drawing.
(f) Indemnification; Exoneration; Power of Attorney.
(1) Indemnification. In addition to amounts payable as elsewhere
provided in this Section 1.3, the Borrowers agree, jointly and
severally, to protect, indemnify, defend, pay and save the Lenders and
the Administrative Agent harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) which any Lender or the
Administrative Agent (other than a Lender in its capacity as Letter of
Credit Issuer) may incur or be subject to as a consequence, direct or
indirect, of the issuance of any Letter of Credit or the provision of
any Credit Support or enhancement in connection therewith. The
Borrowers' obligations under this Section shall survive payment of all
of the Obligations and termination of the Commitments.
(2) Assumption of Risk by the Borrowers. As among the Borrowers,
the Lenders, and the Administrative Agent, the Borrowers assume all
8
risks of the acts and omissions of, or misuse of any of the Letters of
Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Lenders and
the Administrative Agent shall not be responsible for: (A) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any Person in connection with the application
for and issuance of and presentation of drafts with respect to any of
the Letters of Credit, even if it should prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (B)
the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of Credit or
the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; (C)
the failure of the beneficiary of any Letter of Credit to comply duly
with conditions required in order to draw upon such Letter of Credit;
(D) errors, omissions, interruptions, or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (E) errors in
interpretation of technical terms; (F) any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under any Letter of Credit or of the proceeds thereof; (G) the
misapplication by the beneficiary of any Letter of Credit of the
proceeds of any drawing under such Letter of Credit; (H) any
consequences arising from causes beyond the control of the Lenders or
the Administrative Agent, including any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto
Governmental Authority or (I) the Letter of Credit Issuer's honor of a
draw for which the draw or any certificate fails to comply in any
respect with the terms of the Letter of Credit. None of the foregoing
shall affect, impair or prevent the vesting of any rights or powers of
the Administrative Agent or any Lender under this Section 1.3(f).
(3) Exoneration. Without limiting the foregoing, no action or
omission whatsoever by Administrative Agent or any Lender (excluding
any Lender in its capacity as a Letter of Credit Issuer) shall result
in any liability of Administrative Agent or and Lender to any
Borrower, or relieve the Borrowers of any of their obligations
hereunder to any such Person.
(4) Rights Against Letter of Credit Issuer. Nothing contained in
this Agreement is intended to limit the Borrowers' rights, if any,
with respect to the Letter of Credit Issuer which arise as a result of
the letter of credit application and related documents executed by and
between the Borrowers and the Letter of Credit Issuer.
(5) Account Party. The Borrowers hereby authorize and direct any
Letter of Credit Issuer to name the Borrowers as the "Account Party"
therein and to deliver to the Administrative Agent all instruments,
documents and other writings and property received by the Letter of
Credit Issuer pursuant to the Letter of Credit, and to accept and rely
upon the Administrative Agent's instructions and agreements with
respect to all matters arising in connection with the Letter of Credit
or the application therefor.
(g) Supporting Letter of Credit; Cash Collateral. If, notwithstanding
the provisions of Section 1.3(b) and Section 10.1, any Letter of Credit or
Credit Support is outstanding upon the termination of this Agreement, then upon
such termination the Borrowers shall deposit with the Administrative Agent, for
the ratable benefit of the Administrative Agent and the Lenders, with respect to
9
each Letter of Credit or Credit Support then outstanding, as the Administrative
Agent shall specify, either (i) a standby letter of credit (a "Supporting Letter
of Credit") in form and substance satisfactory to the Administrative Agent,
issued by an issuer satisfactory to the Administrative Agent in an amount equal
to 105% of the greatest amount for which such Letter of Credit or such Credit
Support may be drawn, under which Supporting Letter of Credit the Administrative
Agent is entitled to draw amounts necessary to reimburse the Administrative
Agent and the Lenders for payments to be made by the Administrative Agent and
the Lenders under such Letter of Credit or Credit Support and any fees and
expenses associated with such Letter of Credit or Credit Support or (ii) cash
collateral in an amount equal to 105% of the greatest amount for which such
Letter of Credit or such Credit Support may be drawn, which the Administrative
Agent is entitled to apply as necessary to reimburse the Administrative Agent
and the Lenders for payments to be made by the Administrative Agent and the
Lenders under such Letter of Credit or Credit Support and any fees and expenses
associated with such Letter of Credit or Credit Support. Such Supporting Letter
of Credit shall be held by the Administrative Agent, for the ratable benefit of
the Administrative Agent and the Lenders, as security for, and to provide for
the payment of, the aggregate undrawn amount of such Letters of Credit or such
Credit Support remaining outstanding.
1.4 Bank Products. The Borrowers may request and, to the extent
authorized by order of the Court, the Administrative Agent may, in its sole and
absolute discretion, arrange for the Borrowers to obtain from Bank of America or
Bank of America's Affiliates, Bank Products although the Borrowers are not
required to do so. If Bank Products are provided by an Affiliate of Bank of
America, the Borrowers agree to indemnify and hold the Administrative Agent,
Bank of America and the Lenders harmless from any and all costs and obligations
now or hereafter incurred by the Administrative Agent, Bank of America or any of
the Lenders which arise from any indemnity given by the Administrative Agent to
its Affiliates related to such Bank Products; provided, however, nothing
contained herein is intended to limit the Borrowers' rights, with respect to
Bank of America or its Affiliates, if any, which arise as a result of the
execution of documents by and between the Borrowers and Bank of America which
relate to Bank Products. The agreement contained in this Section shall survive
termination of this Agreement. The Borrowers acknowledge and agree that the
obtaining of Bank Products from Bank of America or Bank of America's Affiliates
(a) is in the sole and absolute discretion of Bank of America or Bank of
America's Affiliates, and (b) is subject to all rules and regulations of Bank of
America or Bank of America's Affiliates.
ARTICLE 2
INTEREST AND FEES
-----------------
2.1 Interest.
(a) Interest Rates. All outstanding Obligations shall bear interest
on the unpaid principal amount thereof (including, to the extent permitted by
applicable law, on interest thereon not paid when due) from the date made until
paid in full in cash at a rate determined by reference to the Base Rate or the
LIBOR Rate plus the Applicable Margins as set forth below, but not to exceed the
Maximum Rate. If at any time Loans are outstanding with respect to which the
Borrowers have not delivered to the Administrative Agent a notice specifying the
basis for determining the interest rate applicable thereto in accordance
10
herewith, those Loans shall bear interest at a rate determined by reference to
the Base Rate until notice to the contrary has been given to the Administrative
Agent in accordance with this Agreement and such notice has become effective.
Except as otherwise provided herein, the outstanding Obligations shall bear
interest as follows:
(i) For all Base Rate Revolving Loans and other Obligations
(other than LIBOR Revolving Loans) at a fluctuating per annum rate
equal to the Base Rate plus the Applicable Margin; and
(ii) For all LIBOR Revolving Loans at a per annum rate equal to
the LIBOR Rate plus the Applicable Margin,
subject in each case to adjustment in accordance with the terms of the Interest
and Fee Letter.
Each change in the Base Rate shall be reflected in the interest rate applicable
to Base Rate Revolving Loans as of the effective date of such change. All
interest charges shall be computed on the basis of a year of 360 days and actual
days elapsed (which results in more interest being paid than if computed on the
basis of a 365-day year). The Borrowers shall pay to the Administrative Agent,
for the ratable benefit of Lenders, interest accrued on all Base Rate Revolving
Loans in arrears on the first day of each month hereafter and on the Commitment
Termination Date. The Borrowers shall pay to the Administrative Agent, for the
ratable benefit of Lenders, interest on all LIBOR Revolving Loans in arrears on
each LIBOR Interest Payment Date.
(b) Default Rate. If any Default or Event of Default occurs and is
continuing and the Administrative Agent or the Majority Lenders in their
discretion so elect, then, while any such Default or Event of Default is
continuing, all of the Obligations shall bear interest at the Default Rate
applicable thereto.
2.2 Continuation and Conversion Elections.
(a) The Borrowers may:
(i) elect, as of any Business Day, in the case of Base Rate
Revolving Loans, to convert any Base Rate Revolving Loans (or any part
thereof in an amount not less than $10,000,000, or that is in an
integral multiple of $1,000,000 in excess thereof) into LIBOR
Revolving Loans; or
(ii) elect, as of the last day of the applicable Interest Period,
to continue any LIBOR Revolving Loans having Interest Periods expiring
on such day (or any part thereof in an amount not less than
$1,000,000, or that is in an integral multiple of $1,000,000 in excess
thereof);
provided, that if at any time the aggregate amount of LIBOR Revolving Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, such LIBOR Revolving Loans shall
automatically convert into Base Rate Revolving Loans; and provided further, that
if the notice shall fail to specify the duration of the Interest Period, such
Interest Period shall be one month.
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(b) The Borrowers shall deliver a notice of continuation/conversion
("Notice of Continuation/Conversion") to the Administrative Agent not later than
12:00 noon (Atlanta, Georgia time) at least three (3) Business Days in advance
of the Continuation/Conversion Date, if the Loans are to be converted into or
continued as LIBOR Revolving Loans and specifying:
(i) the proposed Continuation/Conversion Date;
(ii) the aggregate amount of Loans to be converted or renewed;
(iii) the type of Loans resulting from the proposed conversion or
continuation; and
(iv) the duration of the requested Interest Period, provided that
the Borrowers may not select an Interest Period that ends after the
last day of the DIP Term.
(c) If upon the expiration of any Interest Period applicable to LIBOR
Revolving Loans, the Borrowers have failed to select timely a new Interest
Period to be applicable to LIBOR Revolving Loans or if any Default or Event of
Default then exists, the Borrowers shall be deemed to have elected to convert
such LIBOR Revolving Loans into Base Rate Revolving Loans effective as of the
expiration date of such Interest Period.
(d) The Administrative Agent will promptly notify each Lender of its
receipt of a Notice of Continuation/Conversion. All conversions and
continuations shall be made ratably according to the respective outstanding
principal amounts of the Loans with respect to which the notice was given held
by each Lender.
(e) There may not be more than eight (8) different LIBOR Revolving
Loans in effect hereunder at any time.
2.3 Maximum Interest Rate. In no event shall any interest rate
provided for hereunder or under any of the DIP Financing Documents exceed the
maximum rate legally chargeable by any Lender under applicable law for such
Lender with respect to loans of the type provided for hereunder (the "Maximum
Rate"). If, in any month, any interest rate, absent such limitation, would have
exceeded the Maximum Rate, then the interest rate for that month shall be the
Maximum Rate, and, if in future months, that interest rate would otherwise be
less than the Maximum Rate, then that interest rate shall remain at the Maximum
Rate until such time as the amount of interest paid hereunder equals the amount
of interest which would have been paid if the same had not been limited by the
Maximum Rate. In the event that, upon payment in full of the Obligations, the
total amount of interest paid or accrued under the terms of this Agreement is
less than the total amount of interest which would, but for this Section 2.3,
have been paid or accrued if the interest rate otherwise set forth in this
Agreement had at all times been in effect, then the Borrowers shall, to the
extent permitted by applicable law, pay the Administrative Agent, for the
account of the Lenders, an amount equal to the excess of (a) the lesser of (i)
the amount of interest which would have been charged if the Maximum Rate had, at
all times, been in effect or (ii) the amount of interest which would have
accrued had the interest rate otherwise set forth in this Agreement, at all
times, been in effect over (b) the amount of interest actually paid or accrued
under this Agreement. If a court of competent jurisdiction determines that the
12
Administrative Agent and/or any Lender has received interest and other charges
hereunder or under any of the DIP Financing Documents in excess of the Maximum
Rate, such excess shall be deemed received on account of, and shall
automatically be applied to reduce, the Obligations other than interest, in the
inverse order of maturity, and if there are no Obligations outstanding, the
Administrative Agent and/or such Lender shall refund to the Borrowers such
excess.
2.4 Closing and Agency Fees. The Borrowers jointly and severally
agree to pay all fees set forth in the Interest and Fee Letter, as and when
provided in the Interest and Fee Letter.
2.5 Unused Line Fee. On the first day of each month and on the
Commitment Termination Date the Borrowers agree to pay to the Administrative
Agent, for the account of the Lenders, in accordance with their respective Pro
Rata Shares, an unused line fee (the "Unused Line Fee"), which shall be equal to
the Applicable Margin for the Unused Line Fee times the amount by which the
Maximum Revolver Amount exceeded the sum of the average daily outstanding amount
of Revolving Loans and the average daily undrawn face amount of outstanding
Letters of Credit, during the immediately preceding month or such portion of
such month during which the Commitments were in effect. The Unused Line Fee
shall be computed on the basis of a 360-day year for the actual number of days
elapsed. All principal payments received by the Administrative Agent shall be
deemed to be credited to the Borrowers' Loan Account immediately upon receipt
for purposes of calculating the Unused Line Fee pursuant to this Section 2.5.
2.6 Letter of Credit Fees. The Borrowers agree to pay to the
Administrative Agent, for the account of the Lenders, in accordance with their
respective Pro Rata Shares, for each Letter of Credit, a fee (the "Letter of
Credit Fee") at a rate per annum equal to the Applicable Margin in effect from
time to time for LIBOR Revolving Loans, and to the Administrative Agent, for the
benefit of the Letter of Credit Issuer, a fronting fee (the "Fronting Fee") of
one-half of one percent (0.5%) per annum, in each case based upon the undrawn
face amount of each Letter of Credit, and to the Letter of Credit Issuer, all of
its normal and customary fees associated with the issuance, amending, renewal,
negotiating, processing and administration of Letters of Credit, together with
its out-of-pocket costs and expenses incurred by the Letter of Credit Issuer in
connection therewith (such fees, costs and expenses, collectively, the "Letter
of Credit Issuer Amounts"). The Letter of Credit Fee and the Fronting Fee shall
each be payable monthly in arrears on the first day of each month following any
month in which a Letter of Credit is outstanding and on the Commitment
Termination Date. The Letter of Credit Issuer Amounts shall be payable as and
when assessed by the Letter of Credit Issuer. The Letter of Credit Fee and the
Fronting Fee shall each be computed on the basis of a 360-day year for the
actual number of days elapsed.
ARTICLE 3
PAYMENTS AND PREPAYMENTS
------------------------
3.1 Repayment of Obligations.
(a) The Borrowers shall repay the outstanding principal balance of
the Obligations on the Commitment Termination Date.
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(b) The Borrowers shall be obligated to prepay the Obligations (i)
when an Overadvance Condition exists, to the extent of the Overadvance
Condition; (ii) from the Net Proceeds of any sale, lease or other disposition of
any of the Collateral (other than sales of Inventory in the Ordinary Course of
Business), to the extent of such Net Proceeds (other than any portion thereof
required to be shared with the First Priority Pre-Petition Lenders in accordance
with the Pre-Petition Lender Protection Orders); and (iii) from the proceeds of
any insurance or condemnation awards, as provided in Section 7.6, to the extent
of such proceeds. So long as any Cash Dominion Period is in effect, the
Borrowers shall also be obligated to prepay the Obligations upon any Borrower's
or the Administrative Agent's receipt of proceeds of any Collateral (including
collections of Accounts), to the extent of such proceeds (other than any portion
of the Net Proceeds derived from the sale or other disposition of Fixed Assets
(as defined in the Pre-Petition Lender Protection Orders) and required to be
shared with the First Priority Pre-Petition Lenders in accordance with the
Pre-Petition Lender Protection Orders). Notwithstanding the foregoing, provided
no Event of Default exists at the time of the Borrowers' receipt of Net Proceeds
from sales or other dispositions of Fixed Assets, the Borrowers shall be
authorized to retain and use in the Ordinary Course of Business, each Fiscal
Year, up to $1,000,000 in aggregate Net Proceeds from all sales or other
dispositions of Fixed Assets. Provided each of the conditions precedent set
forth in Section 8.2 hereof is satisfied, the Borrowers shall be authorized to
reborrow amounts prepaid, subject to the limits of Availability on the date of
each requested Borrowing.
3.2 Termination of DIP Facility; Extension of DIP Facility.
(a) The Borrowers may terminate the DIP Facility (and the Commitments
thereunder) upon at least ten (10) Business Days notice to the Administrative
Agent and the Lenders; provided, however, no such termination by the Borrowers
shall be effective until Full Payment of the Obligations. Any notice of
termination given by the Borrowers shall be irrevocable unless the
Administrative Agent otherwise agrees in writing. The Borrowers may elect to
terminate the DIP Facility in its entirety only.
(b) The Borrowers may, at their option, extend the term of the DIP
Facility for up to two successive periods of six months each (each period, a
"Renewal Period"), provided that (i) the Borrowers deliver to the Administrative
Agent not later than thirty (30) days prior to the then scheduled last day of
the DIP Term written notice of the Borrowers' intent to extend the DIP Facility
in accordance with the provisions of this Section 3.2(b) (any such notice, a
"Renewal Notice"); (ii) together with the delivery of any Renewal Notice, the
Borrowers pay any fees then required to be paid pursuant to the Interest and Fee
Letter; and (iii) no Default or Event of Default exists on the date any Renewal
Notice is delivered to the Administrative Agent or on the first day of the
applicable Renewal Period.
3.3 LIBOR Revolving Loan Prepayments. In connection with any
prepayment, if any LIBOR Revolving Loans are prepaid prior to the expiration
date of the Interest Period applicable thereto, the Borrowers shall pay to the
Lenders the amounts described in Section 4.4.
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3.4 Payment Conventions.
(a) All payments to be made by the Borrowers shall be made without
set-off, recoupment or counterclaim. Except as otherwise expressly provided
herein, all payments by the Borrower shall be made to the Administrative Agent
for the account of the Lenders, at the account designated by the Administrative
Agent and shall be made in Dollars and in immediately available funds, no later
than 12:00 noon (Atlanta, Georgia time) on the date specified herein. Any
payment received by the Administrative Agent after such time shall be deemed
(for purposes of calculating interest only) to have been received on the
following Business Day and any applicable interest shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period," whenever any payment is due on a day other than a Business
Day, such payment shall be due on the following Business Day, and such extension
of time shall in such case be included in the computation of interest or fees,
as the case may be.
3.5 Payments as Revolving Loans. At the election of the
Administrative Agent, all payments of principal, interest, reimbursement
obligations in connection with Letters of Credit and Credit Support for Letters
of Credit, fees, premiums, reimbursable expenses and other sums payable
hereunder, may be paid from the proceeds of Revolving Loans made hereunder. The
Borrowers hereby irrevocably authorize the Administrative Agent to charge the
Loan Account for the purpose of paying all amounts from time to time due
hereunder and agrees that all such amounts charged (including Non-Ratable Loans
and Agent Advances) shall constitute Revolving Loans.
3.6 Apportionment, Application and Reversal of Payments. Principal
and interest payments shall be apportioned ratably among the Lenders (according
to the unpaid principal balance of the Loans to which such payments relate held
by each Lender) and payments of the fees shall, except as otherwise provided in
the Interest and Fee Letter, be apportioned ratably among the Lenders, except
for fees payable solely to the Administrative Agent and the Letter of Credit
Issuer and except as provided in Section 11.1(b). All payments shall be remitted
to the Administrative Agent and all such payments not relating to principal or
interest of specific Loans, or not constituting payment of specific fees, and
all proceeds of Accounts or other Collateral received by the Administrative
Agent, shall be applied, ratably, subject to the provisions of this Agreement,
first, to pay any fees, indemnities or expense reimbursements then due to the
Administrative Agent from the Borrowers; second, to pay any fees or expense
reimbursements then due to the Lenders from the Borrowers and to pay any amounts
under ACH Transactions then owing to Bank of America; third, to pay interest due
in respect of all Loans, including Non-Ratable Loans and Agent Advances; fourth,
to pay or prepay principal of the Non-Ratable Loans and Agent Advances; fifth,
to pay or prepay principal of the Revolving Loans (other than Non-Ratable Loans
and Agent Advances) and unpaid reimbursement obligations in respect of Letters
of Credit; sixth, to pay an amount to the Administrative Agent equal to the
aggregate undrawn face amount of all outstanding Letters of Credit to be held as
cash collateral for such Obligations; and seventh, to the payment of any other
Obligation, including any amounts relating to Bank Products (other than ACH
Transactions) due to the Administrative Agent or any Lender by the Borrowers.
Notwithstanding anything to the contrary contained in this Agreement, unless so
15
directed by the Borrowers, or unless an Event of Default has occurred and is
continuing, neither the Administrative Agent nor any Lender shall apply any
payments which it receives to any LIBOR Revolving Loan, except (a) on the
expiration date of the Interest Period applicable to any such LIBOR Revolving
Loan, or (b) in the event, and only to the extent, that there are no outstanding
Base Rate Revolving Loans and, in any event, the Borrowers shall pay LIBOR
breakage losses in accordance with Section 4.4. The Administrative Agent and the
Lenders shall have the continuing and exclusive right to apply and reverse and
reapply any and all such proceeds and payments to any portion of the
Obligations.
3.7 Indemnity for Returned Payments. If after receipt of any payment
which is applied to the payment of all or any part of the Obligations, the
Administrative Agent, any Lender, Bank of America or any Affiliate of Bank of
America is for any reason compelled to surrender such payment or proceeds to any
Person because such payment or application of proceeds is invalidated, declared
fraudulent, set aside, determined to be void or voidable as a preference,
impermissible setoff, or a diversion of trust funds, or for any other reason,
then the Obligations or part thereof intended to be satisfied shall be revived
and continued and this Agreement shall continue in full force as if such payment
or proceeds had not been received by the Administrative Agent or such Lender and
the Borrowers shall be liable to pay to the Administrative Agent and the
Lenders, and hereby do indemnify the Administrative Agent and the Lenders and
hold the Administrative Agent and the Lenders harmless for the amount of such
payment or proceeds surrendered. The provisions of this Section 3.7 shall be and
remain effective notwithstanding any contrary action which may have been taken
by the Administrative Agent or any Lender in reliance upon such payment or
application of proceeds, and any such contrary action so taken shall be without
prejudice to the Administrative Agent's and the Lenders' rights under this
Agreement and shall be deemed to have been conditioned upon such payment or
application of proceeds having become final and irrevocable. The provisions of
this Section 3.7 shall survive the termination of this Agreement.
3.8 Administrative Agent's and Lenders' Books and Records; Monthly
Statements. The Administrative Agent shall record the principal amount of the
Loans owing to each Lender, the undrawn face amount of all outstanding Letters
of Credit and the aggregate amount of unpaid reimbursement obligations
outstanding with respect to the Letters of Credit from time to time on its
books. In addition, each Lender may note the date and amount of each payment or
prepayment of principal of such Lender's Loans in its books and records. Failure
by the Administrative Agent or any Lender to make such notation shall not affect
the obligations of the Borrower with respect to the Loans or the Letters of
Credit. The Borrowers agree that the Administrative Agent's and each Lender's
books and records showing the Obligations and the transactions pursuant to this
Agreement and the other DIP Financing Documents shall be admissible in any
action or proceeding arising therefrom, and shall constitute rebuttably
presumptive proof thereof, irrespective of whether any Obligation is also
evidenced by a promissory note or other instrument. The Administrative Agent
will provide to the Borrowers a monthly statement of Loans, payments, and other
transactions pursuant to this Agreement. Such statement shall be deemed correct,
accurate, and binding on the Borrowers and an account stated (except for
reversals and reapplications of payments made as provided in Section 3.7 and
corrections of errors discovered by the Administrative Agent), unless the
Borrowers notify the Administrative Agent in writing to the contrary within
thirty (30) days after such statement is rendered. In the event a timely written
notice of objections is given by the Borrowers, only the items to which
exception is expressly made will be considered to be disputed by the Borrowers.
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3.9 Nature and Extent of Each Borrower's Liability
(a) Joint and Several Liability. Each Borrower shall be liable for,
on a joint and several basis, and hereby guarantees the timely payment by all
other Borrowers of, all of the Revolving Loans and other Obligations, regardless
of which Borrowers actually may have received the proceeds of any Revolving
Loans or other extensions of credit hereunder or the amount of such Revolving
Loans received or the manner in which the Administrative Agent or any Lender
accounts for such Revolving Loans or other extensions of credit on its books and
records, it being acknowledged and agreed that Revolving Loans to any Borrower
inure to the mutual benefit of all Borrowers and that the Administrative Agent
and the Lenders are relying upon the joint and several liability of Borrowers in
extending the Revolving Loans and other financial accommodations hereunder. Each
Borrower hereby unconditionally and irrevocably agrees that upon default in the
payment when due (whether at stated maturity, by acceleration or otherwise) of
any principal of, or interest owed on, any of the Revolving Loans or other
Obligations, such Borrower shall forthwith pay the same, without notice or
demand.
(b) Unconditional Nature of Liability. Each Borrower's joint and
several liability hereunder with respect to, and guaranty of, the Revolving
Loans and other Obligations shall, to the fullest extent permitted by applicable
law, be unconditional irrespective of (i) the validity, enforceability,
avoidance or subordination of any of the Obligations or of any promissory note
or other document evidencing all or any part of the Obligations, (ii) the
absence of any attempt to collect any of the Obligations from any other Obligor
or any Collateral or other security therefor, or the absence of any other action
to enforce the same, (iii) the waiver, consent, extension, forbearance or
granting of any indulgence by the Lenders with respect to any of the Obligations
or any instrument or agreement evidencing or securing the payment of any of the
Obligations, or any other agreement now or hereafter executed by any other
Borrower and delivered to the Administrative Agent or any Lender, (iv) the
failure by the Administrative Agent or the Lenders to take any steps to perfect
or maintain the perfected status of its security interest in or Lien upon, or to
preserve its rights to, any of the Collateral or other security for the payment
or performance of any of the Obligations, or the Administrative Agent's release
of any Collateral or of its Liens upon any Collateral, (v) the release or
compromise, in whole or in part, of the liability of a Borrower or other Obligor
for the payment of any of the Obligations, (vi) any amendment or modification of
any of the DIP Loan Documents or waiver of any Default or Event of Default
thereunder, (vii) any increase in the amount of the Obligations beyond any
limits imposed herein or in the amount of any interest, fees or other charges
payable in connection therewith, or any decrease in the same or (viii) any other
circumstance that might constitute a legal or equitable discharge or defense of
any Borrower or other Obligor. At any time an Event of Default exists, the
Administrative Agent and the Lenders may proceed directly and at once, without
notice to any Borrower or other Obligor, against any or all Obligors to collect
and recover all or any part of the Obligations, without first proceeding against
any other Obligor or against any Collateral or other security for the payment or
performance of any of the Obligations, and each Borrower waives any provision
that might otherwise require the Administrative Agent or the Lenders under
applicable law to pursue or exhaust its remedies against any Collateral or
Obligor before pursuing such Borrower or another Obligor. Each Borrower consents
and agrees that neither the Administrative Agent nor the Lenders shall be under
any obligation to marshal any assets in favor of any Obligor or against or in
payment of any or all of the Obligations.
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(c) No Reduction in Liability for Obligations. No payment or payments
made by an Obligor or received or collected by the Administrative Agent or any
Lender from any Collateral or any other Person by virtue of any action or
proceeding or any setoff or appropriation or application at any time or from
time to time in reduction of or in payment of the Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Borrower under
this Agreement, each of which shall remain jointly and severally liable for the
payment and performance of all Revolving Loans and other Obligations until Full
Payment of the Obligations.
(d) Contribution. Each Borrower is unconditionally obligated to repay
the Obligations as a joint and several obligor under this Agreement. If, as of
any date, the aggregate amount of payments made by a Borrower on account of the
Obligations and proceeds of such Borrower's Collateral that are applied to the
Obligations exceeds the aggregate amount of Loan proceeds actually used by such
Borrower in its business (such excess amount being referred to as an
"Accommodation Payment"), then the other Borrower shall be obligated to make
contribution to such Borrower (the "Paying Borrower") in an amount equal to (A)
the product derived by multiplying the sum of each Accommodation Payment of each
Borrower by the Allocable Percentage of the Borrower from whom contribution is
sought less (B) the amount, if any, of the then outstanding Accommodation
Payment of such Contributing Borrower (such last mentioned amount which is to be
subtracted from the aforesaid product to be increased by any amounts theretofore
paid by such Contributing Borrower by way of contribution hereunder, and to be
decreased by any amounts theretofore received by such Contributing Borrower by
way of contribution hereunder); provided, however, that a Paying Borrower's
recovery of contribution hereunder from the other Borrower shall be limited to
that amount paid by the Paying Borrower in excess of its Allocable Percentage of
all Accommodation Payments then outstanding of all Borrowers. As used herein,
the term "Allocable Percentage" shall mean, on any date of determinations
thereof, a fraction the denominator of which shall be equal to the number of
Borrowers who are parties to this Agreement on such date and the numerator of
which shall be 1.
(e) Subordination. Each Borrower hereby subordinates any claims,
including any right of payment, subrogation, contribution and indemnity, that it
may have from or against any other Obligor, and any successor or assign of any
other Obligor, howsoever arising, due or owing or whether heretofore, now or
hereafter existing, to the Full Payment of the Obligations.
ARTICLE 4
TAXES, YIELD PROTECTION AND ILLEGALITY
4.1 Taxes.
(a) Any and all payments by the Borrowers to each Lender or the
Administrative Agent under this Agreement and any other DIP Financing Document
shall be made free and clear of, and without deduction or withholding for any
Taxes. In addition, the Borrowers shall pay all Other Taxes.
(b) The Borrowers agree to indemnify and hold harmless each Lender
and the Administrative Agent for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section) paid by any Lender or the Administrative Agent and
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any liability (including penalties, interest, additions to tax and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. Payment under this indemnification
shall be made within thirty (30) days after the date such Lender or the
Administrative Agent makes written demand therefor.
(c) If any Borrower shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Administrative Agent, then:
(i) the sum payable shall be increased as necessary so that after
making all required deductions and withholdings (including deductions
and withholdings applicable to additional sums payable under this
Section) such Lender or the Administrative Agent, as the case may be,
receives an amount equal to the sum it would have received had no such
deductions or withholdings been made;
(ii) each Borrower shall make such deductions and withholdings;
(iii) each Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) Borrowers shall also pay to each Lender or the
Administrative Agent for the account of such Lender, at the time
interest is paid, all additional amounts which the respective Lender
specifies as necessary to preserve the after-tax yield such Lender
would have received if such Taxes or Other Taxes had not been imposed.
(d) At the Administrative Agent's request, within 30 days after the
date of any payment by any Borrower of Taxes or Other Taxes, such Borrower shall
furnish the Administrative Agent the original or a certified copy of a receipt
evidencing payment thereof, or other evidence of payment satisfactory to the
Administrative Agent.
(e) If the Borrowers are required to pay additional amounts to any
Lender or the Administrative Agent pursuant to subsection (c) of this Section,
then such Lender shall use reasonable efforts (consistent with legal and
regulatory restrictions) to change the jurisdiction of its lending office so as
to eliminate any such additional payment by the Borrowers which may thereafter
accrue, if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.
4.2 Illegality.
(a) If any Lender determines that the introduction of any Requirement
of Law, or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable lending office to make LIBOR Revolving Loans,
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then, on notice thereof by that Lender to the Borrowers through the
Administrative Agent, any obligation of that Lender to make LIBOR Revolving
Loans shall be suspended until that Lender notifies the Administrative Agent and
the Borrowers that the circumstances giving rise to such determination no longer
exist.
(b) If a Lender determines that it is unlawful to maintain any LIBOR
Revolving Loan, the Borrowers shall, upon receipt of notice of such fact and
demand from such Lender (with a copy to the Administrative Agent), prepay in
full such LIBOR Revolving Loans of that Lender then outstanding, together with
interest accrued thereon and amounts required under Section 4.4, either on the
last day of the Interest Period thereof, if that Lender may lawfully continue to
maintain such LIBOR Revolving Loans to such day, or immediately, if that Lender
may not lawfully continue to maintain such LIBOR Revolving Loans. If the
Borrowers are required to so prepay any LIBOR Revolving Loans, then concurrently
with such prepayment, the Borrowers shall borrow from the affected Lender, in
the amount of such repayment, a Base Rate Revolving Loan.
4.3 Increased Costs and Reduction of Return.
(a) If any Lender determines that due to either (i) the introduction
of or any change in the interpretation of any law or regulation, in each case
after the date hereof, or (ii) the compliance by that Lender with any guideline
or request from any central bank or other Governmental Authority (whether or not
having the force of law), there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining any LIBOR Revolving Loans,
then the Borrowers shall be liable for, and shall from time to time, upon demand
(with a copy of such demand to be sent to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender, additional amounts as are
sufficient to compensate such Lender for such increased costs.
(b) If any Lender shall have determined that (i) the introduction
after the date hereof of any Capital Adequacy Regulation, (ii) any change in any
Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or (iv) compliance by such Lender or any corporation or other entity
controlling such Lender with any Capital Adequacy Regulation, affects or would
affect the amount of capital required or expected to be maintained by such
Lender or any corporation or other entity controlling such Lender and (taking
into consideration such Lender's or such corporation's or other entity's
policies with respect to capital adequacy and such Lender's desired return on
capital) determines that the amount of such capital is increased as a
consequence of its Commitments, loans, credits or obligations under this
Agreement, then, upon demand of such Lender to the Borrowers through the
Administrative Agent, the Borrowers shall pay to such Lender, from time to time
as specified by such Lender, additional amounts sufficient to compensate such
Lender for such increase.
4.4 Funding Losses. The Borrowers shall reimburse each Lender and
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of:
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(a) the failure of the Borrowers to make on a timely basis any
payment of principal of any LIBOR Revolving Loan;
(b) the failure of the Borrowers to borrow, continue or convert a
Loan after the Borrowers have given (or are deemed to have given) a Notice of
Borrowing or a Notice of Continuation/Conversion; or
(c) the prepayment or other payment (including after acceleration
thereof) of any LIBOR Revolving Loans on a day that is not the last day of the
relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Revolving Loans or from fees
payable to terminate the deposits from which such funds were obtained. Borrowers
shall also pay any customary administrative fees charged by any Lender in
connection with the foregoing.
4.5 Inability to Determine Rates. If the Administrative Agent
determines that for any reason adequate and reasonable means do not exist for
determining the LIBOR Rate for any requested Interest Period with respect to a
proposed LIBOR Revolving Loan, or that the LIBOR Rate for any requested Interest
Period with respect to a proposed LIBOR Revolving Loan does not adequately and
fairly reflect the cost to the Lenders of funding such Loan, the Administrative
Agent will promptly so notify the Borrowers and each Lender. Thereafter, the
obligation of the Lenders to make or maintain LIBOR Revolving Loans hereunder
shall be suspended until the Administrative Agent revokes such notice in
writing. Upon receipt of such notice, the Borrowers may revoke any Notice of
Borrowing or Notice of Continuation/Conversion then submitted by it. If the
Borrowers do not revoke such Notice, the Lenders shall make, convert or continue
the Loans, as proposed by the Borrowers, in the amount specified in the
applicable notice submitted by the Borrowers, but such Loans shall be made,
converted or continued as Base Rate Revolving Loans instead of LIBOR Revolving
Loans.
4.6 Certificates of Administrative Agent. If any Lender claims
reimbursement or compensation under this Article 4, Administrative Agent shall
determine the amount thereof and shall deliver to the Borrowers (with a copy to
the affected Lender) a certificate setting forth in reasonable detail the amount
payable to the affected Lender, and such certificate shall be conclusive and
binding on the Borrowers in the absence of manifest error.
4.7 Survival. The agreements and obligations of the Borrowers in this
Article 4 shall survive the payment of all other Obligations.
ARTICLE 5
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
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5.1 Books and Records. Each Borrower shall maintain, at all times,
correct and complete books, records and accounts in which complete, correct and
timely entries are made of its transactions in accordance with GAAP applied
consistently with the audited Financial Statements required to be delivered
pursuant to Section 5.2(a). Each Borrower shall, by means of appropriate
entries, reflect in such accounts and in all Financial Statements proper
liabilities and reserves for all taxes and proper provision for depreciation and
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amortization of property and bad debts, all in accordance with GAAP. The
Borrowers shall maintain at all times books and records pertaining to the
Collateral in such detail, form and scope as the Administrative Agent or any
Lender shall reasonably require, including records of (a) all payments received
and all credits and extensions granted with respect to the Accounts; (b) the
return, rejection, repossession, stoppage in transit, loss, damage, or
destruction of any Inventory; and (c) all other dealings affecting the
Collateral.
5.2 Financial and Other Information. The Borrowers shall promptly
furnish to each Lender, all such financial information as the Administrative
Agent shall reasonably request. Without limiting the foregoing, the Borrowers
will furnish to the Administrative Agent, in sufficient copies for distribution
by the Administrative Agent to each Lender, in such detail as the Administrative
Agent or the Lenders shall request, the following:
(a) As soon as available, but in any event not later than ninety-five
(95) days after the close of each Fiscal Year, consolidated audited balance
sheets, and income statements, cash flow statements and changes in stockholders'
equity for the Borrowers and their consolidated Subsidiaries for such Fiscal
Year, and the accompanying notes thereto, setting forth in each case in
comparative form figures for the previous Fiscal Year, all in reasonable detail,
fairly presenting the financial position and the results of operations of the
Borrowers and their consolidated Subsidiaries as at the date thereof and for the
Fiscal Year then ended, and prepared in accordance with GAAP. Such statements
shall be examined in accordance with generally accepted auditing standards by
and, in the case of such statements prepared on a consolidated basis,
accompanied by a report thereon unqualified in any respect (except any such
qualification resulting from the commencement of the Chapter 11 Cases) of
independent certified public accountants selected by the Borrowers and
reasonably satisfactory to the Administrative Agent. The Borrowers,
simultaneously with retaining such independent public accountants to conduct
such annual audit, shall send a letter to such accountants, with a copy to the
Administrative Agent and the Lenders, notifying such accountants that one of the
primary purposes for retaining such accountants' services and having audited
financial statements prepared by them is for use by the Administrative Agent and
the Lenders. The Borrowers hereby authorize the Administrative Agent to
communicate directly with its certified public accountants and, by this
provision, authorizes those accountants to disclose to the Administrative Agent
any and all financial statements and other supporting financial documents and
schedules relating to the Borrowers and to discuss directly with the
Administrative Agent the finances and affairs of the Borrowers.
(b) As soon as available, but in any event not later than thirty (30)
days after the end of each Fiscal Month (or fifty (50) days after the end of any
such Fiscal Month that is the last Fiscal Month of a Fiscal Quarter and
ninety-five (95) days after the end of any such Fiscal Month that is the last
Fiscal Month of a Fiscal Year), the consolidated unaudited balance sheet of the
Borrowers and their consolidated Subsidiaries as at the end of such Fiscal
Month, and the consolidated unaudited income statement and cash flow statement
for the Borrowers and their consolidated Subsidiaries for such Fiscal Month and
for the period from the beginning of the Fiscal Year to the end of such Fiscal
Month, all in reasonable detail, fairly presenting the financial position and
results of operations of the Borrowers and their consolidated Subsidiaries as at
22
the date thereof and for such periods, and, in each case, in comparable form,
figures for the corresponding period in the prior Fiscal Year and in the
Borrowers' budget, and prepared in accordance with GAAP applied consistently
with the audited Financial Statements required to be delivered pursuant to
Section 5.2(a). The Borrowers shall certify by a certificate signed by the chief
financial officer, treasurer or controller of WPS that all such statements have
been prepared in accordance with GAAP and present fairly the Borrowers'
financial position as at the dates thereof and its results of operations for the
periods then ended, subject to normal year-end adjustments.
(c) As soon as available, but in any event not later than fifty (50)
days after the end of each Fiscal Quarter, the consolidated unaudited balance
sheets of the Foreign Subsidiaries as at the end of such Fiscal Quarter, and the
consolidated unaudited income statement for the Foreign Subsidiaries for such
Fiscal Quarter and for the period from the beginning of the Fiscal Year to the
end of such Fiscal Quarter, all in reasonable detail, fairly presenting the
financial position and results of operations of the Foreign Subsidiaries as at
the date thereof and for such periods, and, in each case, in comparable form,
figures for the corresponding period in the prior Fiscal Year, and prepared in
accordance with GAAP consistently applied with the audited Financial Statements
required to be delivered pursuant to Section 5.2(a). The Borrowers shall certify
by a certificate signed by the chief financial officer, treasurer or controller
of WPS that all such statements have been prepared in accordance with GAAP and
present fairly the Foreign Subsidiaries' financial position as at the dates
thereof and its results of operations for the periods then ended, subject to
normal year-end adjustments.
(d) With each of the audited Financial Statements delivered pursuant
to Section 5.2(a), a certificate of the independent certified public accountants
that examined such statement to the effect that they have reviewed and are
familiar with this Agreement and that, in examining such Financial Statements,
they did not become aware of any fact or condition which then constituted a
Default or Event of Default with respect to a financial covenant, except for
those, if any, described in reasonable detail in such certificate.
(e) With each of the annual audited Financial Statements delivered
pursuant to Section 5.2(a), and within thirty (30) days after the end of each
Fiscal Month (or fifty (50) days after the end of any such Fiscal Month that is
the last Fiscal Month of a Fiscal Quarter and ninety-five (95) days after the
end of any such Fiscal Month that is the last Fiscal Month of a Fiscal Year), a
certificate of the chief financial officer of WPS setting forth in reasonable
detail the calculations required to establish that the Borrowers were in
compliance with the covenants set forth in Sections 7.22 through 7.23 during the
period covered in such Financial Statements and as at the end thereof. With each
of the annual audited Financial Statements delivered pursuant to Section 5.2(a),
and within fifty (50) days after the end of any Fiscal Month that is the last
Fiscal Month of a Fiscal Quarter, the certification of the Financial Statements
required of the chief financial officer or the chief executive officer of WPS
pursuant to the Xxxxxxxx-Xxxxx Act. Within thirty (30) days after the end of
each Fiscal Month, a certificate of the chief financial officer, treasurer or
controller of each Borrower stating that, except as explained in reasonable
detail in such certificate, (A) all of the representations and warranties of
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such Borrower contained in this Agreement and the other DIP Financing Documents
are correct and complete in all material respects as at the date of such
certificate as if made at such time, except for those that speak as of a
particular date, (B) such Borrower is, at the date of such certificate, in
compliance in all material respects with all of its respective covenants and
agreements in this Agreement and the other DIP Financing Documents, (C) no
Default or Event of Default then exists or existed during the period covered by
the Financial Statements for such Fiscal Month, (D) if such Fiscal Month is the
last Fiscal Month in a Fiscal Quarter or Fiscal Year, describing and analyzing
in reasonable detail all material trends, changes, and developments in each and
all Financial Statements; and (E) explaining the variances of the figures in the
corresponding budgets and prior Fiscal Year financial statements. If such
certificate discloses that a representation or warranty is not correct or
complete, or that a covenant has not been complied with, or that a Default or
Event of Default existed or exists, such certificate shall set forth what action
such Borrower has taken or proposes to take with respect thereto.
(f) No later than thirty (30) days after the first day of each Fiscal
Year, annual forecasts (to include forecasted consolidated balance sheets,
income statements and cash flow statements) for the Borrowers and their
consolidated Subsidiaries as at the end of and for each Fiscal Month of such
Fiscal Year.
(g) Promptly after filing with the PBGC and the IRS, a copy of each
annual report or other filing filed with respect to each Plan of the Borrowers.
(h) Promptly upon the filing thereof, copies of all reports, if any,
to or other documents filed by any Borrower or any of its Subsidiaries with the
Securities and Exchange Commission under the Exchange Act, and all reports,
notices, or statements sent or received by any Borrower or any of its
Subsidiaries to or from the holders of any equity interests of such Borrower
(other than routine non-material correspondence sent by shareholders of the
Borrower to the Borrower) or any such Subsidiary or of any Debt of any Borrower
or any of its Subsidiaries registered under the Securities Act of 1933 or to or
from the trustee under any indenture under which the same is issued.
(i) As soon as available, but in any event not later than fifteen
(15) days after a Borrower's receipt thereof, a copy of all management reports
and management letters prepared for such Borrower by any independent certified
public accountants of such Borrower.
(j) Promptly after their preparation, copies of any and all proxy
statements, financial statements, and reports which any Borrower makes available
to its shareholders.
(k) If requested by the Administrative Agent, promptly after filing
with the IRS, a copy of each tax return filed by any Borrower or by any of its
Subsidiaries.
(l) At the time the same are required to be delivered in accordance
with the provisions of Section 9 of the Security Agreement, the reports and
schedules with respect to the Collateral described therein.
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(m) As soon as available, but in any event not later than (i)
Wednesday of each week, a Borrowing Base Certificate prepared as of Saturday of
the preceding week and (ii) the 15th day of each Fiscal Month, a Borrowing Base
Certificate prepared as of the last Saturday of the preceding Fiscal Month, in
each case supporting information in accordance with Section 9 of the Security
Agreement.
(n) Promptly after the Borrowers have notified the Administrative
Agent of any intention by the Borrowers to treat the Loans and/or Letters of
Credit as being a "reportable transaction" (within the meaning of Treasury
Regulation Section 1.6011-4), a duly completed copy of IRS Form 8886 or any
successor form.
(o) As soon as available, but in any event not later than Wednesday
of each week, the forecasted cash receipts and disbursements of the Borrowers
and their Subsidiaries, on a consolidated basis, for the succeeding thirteen
(13) weeks.
(p) Such additional information as the Administrative Agent and/or
any Lender may from time to time reasonably request regarding the financial and
business affairs of any Borrower or any Subsidiary.
5.3 Notices and Reports to the Administrative Agent and the Lenders.
The Borrowers shall notify the Administrative Agent and the Lenders in writing
of the following matters at the following times and, where applicable, shall
provide the Administrative Agent and the Lenders with the following described
documents:
(a) Immediately after becoming aware of any Default or Event of
Default;
(b) Immediately after becoming aware of the assertion by the holder
of any capital stock of any Borrower or of any Subsidiary or the holder of any
Debt of any Borrower or any Subsidiary incurred after the Petition Date in a
face amount in excess of $100,000 that a default exists with respect thereto or
that such Borrower or such Subsidiary is not in compliance with the terms
thereof, or the threat or commencement by such holder of any enforcement action
because of such asserted default or non-compliance;
(c) Immediately after becoming aware of any event or circumstance
which could have a Material Adverse Effect;
(d) Immediately after becoming aware of any pending or threatened
action, suit, or proceeding, by any Person, or any pending or threatened
investigation by a Governmental Authority, which could reasonably be expected to
have a Material Adverse Effect;
(e) Immediately after becoming aware of any pending or threatened
strike, work stoppage, unfair labor practice claim, or other labor dispute
affecting the Borrower or any of its Subsidiaries in a manner which could
reasonably be expected to have a Material Adverse Effect;
25
(f) Immediately after becoming aware of any violation of any law,
statute, regulation, or ordinance of a Governmental Authority affecting any
Borrower or any Subsidiary which could reasonably be expected to have a Material
Adverse Effect;
(g) Immediately after receipt of any notice of any violation by any
Borrower or any of its Subsidiaries of any Environmental Law which could
reasonably be expected to have a Material Adverse Effect or that any
Governmental Authority has asserted in writing that such Borrower or any
Subsidiary is not in compliance with any Environmental Law or is investigating
such Borrower's or such Subsidiary's compliance therewith;
(h) Immediately after receipt of any written notice that any Borrower
or any of its Subsidiaries is or may be liable to any Person as a result of the
Release or threatened Release of any Contaminant or that such Borrower or such
Subsidiary is subject to investigation by any Governmental Authority evaluating
whether any remedial action is needed to respond to the Release or threatened
Release of any Contaminant which, in either case, is reasonably likely to give
rise to liability in excess of $1,000,000;
(i) Immediately after receipt of any written notice of the imposition
of any Environmental Lien against any property of any Borrower or any of its
Subsidiaries;
(j) Any change in any Borrower's name as it appears in the state of
its incorporation or other organization, state of incorporation or organization,
type of entity, organizational identification number, locations of Collateral,
or form of organization, trade names under which such Borrower will sell
Inventory or create Accounts, or to which instruments in payment of Accounts may
be made payable, in each case at least thirty (30) days prior thereto;
(k) Within ten (10) Business Days after any Borrower or any ERISA
Affiliate knows or has reason to know, that an ERISA Event or a prohibited
transaction (as defined in Sections 406 of ERISA and 4975 of the Code) has
occurred, and, when known, any action taken or threatened by the IRS, the DOL or
the PBGC with respect thereto;
(l) Upon request, or, in the event that such filing reflects a
significant change with respect to the matters covered thereby, within three (3)
Business Days after the filing thereof with the PBGC, the DOL or the IRS, as
applicable, copies of the following: (i) each annual report (form 5500 series),
including Schedule B thereto, filed with the PBGC, the DOL or the IRS with
respect to each Plan, (ii) a copy of each funding waiver request filed with the
PBGC, the DOL or the IRS with respect to any Plan and all communications
received by any Borrower or any ERISA Affiliate from the PBGC, the DOL or the
IRS with respect to such request, and (iii) a copy of each other filing or
notice filed with the PBGC, the DOL or the IRS, with respect to each Plan by
either a Borrower or any ERISA Affiliate;
(m) Upon request, copies of each actuarial report for any Plan or
Multi-employer Plan and annual report for any Multi-employer Plan; and within
three (3) Business Days after receipt thereof by any Borrower or any ERISA
26
Affiliate, copies of the following: (i) any notices of the PBGC's intention to
terminate a Plan or to have a trustee appointed to administer such Plan; (ii)
any favorable or unfavorable determination letter from the IRS regarding the
qualification of a Plan under Section 401(a) of the Code; or (iii) any notice
from a Multi-employer Plan regarding the imposition of withdrawal liability;
(n) Within three (3) Business Days after the occurrence thereof: (i)
any changes in the benefits of any existing Plan which increase any Borrower's
annual costs with respect thereto by an amount in excess of $2,000,000, or the
establishment of any new Plan or the commencement of contributions to any Plan
to which such Borrower or any ERISA Affiliate was not previously contributing;
or (ii) any failure by any Borrower or any ERISA Affiliate to make a required
installment or any other required payment under Section 412 of the Code on or
before the due date for such installment or payment;
(o) Within three (3) Business Days after any Borrower or any ERISA
Affiliate knows or has reason to know that any of the following events has or
will occur: (i) a Multi-employer Plan has been or will be terminated; (ii) the
administrator or plan sponsor of a Multi-employer Plan intends to terminate a
Multi-employer Plan; or (iii) the PBGC has instituted or will institute
proceedings under Section 4042 of ERISA to terminate a Multi-employer Plan;
(p) Immediately after receipt of termination or non-renewal of or
default under the License Agreements to which Xxxxx Lauren and Disney
Enterprises, respectively, are parties as licensors and any other License
Agreement material to the operations of any Borrower; and
(q) Immediately after a Borrower's becoming aware of any
non-compliance with or violation or breach of any provision in the Pre-Petition
Lender Protection Orders or of any asserted violation, non-compliance or breach
thereof (whether or not disputed by Borrowers).
Each notice given under this Section shall describe the subject
matter thereof in reasonable detail, and shall set forth the action that the
Borrowers, any Subsidiary, or any ERISA Affiliate, as applicable, has taken or
proposes to take with respect thereto. The Borrowers shall include counsel for
the Administrative Agent on any "Special Notice List" or other similar list of
parties to be served with papers in the Chapter 11 Cases.
ARTICLE 6
GENERAL WARRANTIES AND REPRESENTATIONS
--------------------------------------
Each Borrower severally warrants and represents to the Administrative
Agent and the Lenders that, except as hereafter disclosed to and accepted by the
Administrative Agent and the Majority Lenders in writing:
6.1 Authorization, Validity, and Enforceability of this Agreement and
the DIP Financing Documents. Subject to entry of the Interim Financing Order,
each Borrower has the power and authority to execute, deliver and perform the
DIP Financing Documents, to incur the Obligations, and, on the date of initial
funding of the Loans hereunder, will be authorized to grant to the
27
Administrative Agent Liens upon and security interests in the Collateral
pursuant to Sections 363 and 364 of the Bankruptcy Code. Each Borrower has taken
all necessary action (including obtaining approval of its stockholders if
necessary) to authorize its execution, delivery, and performance of this
Agreement and the DIP Financing Documents to which it is a party. This Agreement
and the other DIP Financing Documents to which each Borrower is a party have
been duly executed and delivered by such Borrower and, subject to entry of the
Interim Financing Order, constitute the legal, valid and binding obligations of
such Borrower, enforceable against it in accordance with their respective terms
and the terms of the Financing Orders. Each Borrower's execution, delivery, and
performance of this Agreement and the other DIP Financing Documents to which it
is a party (a) does not and will not conflict with, or constitute a violation or
breach of, or result in the imposition of any Lien upon the property of the
Borrower or any of its Subsidiaries, by reason of the terms of any contract,
mortgage, lease, agreement, indenture, or instrument to which such Borrower is a
party or which is binding upon it, (b) following entry of the Interim Financing
Order, will not violate any Requirement of Law applicable to such Borrower or
any of its Subsidiaries, and (c) is not in contravention with any provision of
its certificate or articles of incorporation or by-laws or other constituent
documents of such Borrower or any of its Subsidiaries.
6.2 Validity and Priority of Security Interest. Upon entry of the
Interim Financing Order, the security interests granted pursuant to the DIP
Financing Documents constitute valid, enforceable, perfected and first priority
Liens on the Collateral, except for Permitted Liens on the Petition Date that
(i) relate solely to Equipment and are held by Persons other than the
Pre-Petition Lenders or (ii) constitute statutory Liens for property taxes that
have priority under applicable law.
6.3 Organization and Qualification. Each Borrower (a) is duly
organized or incorporated and validly existing in good standing under the laws
of the state of its organization or incorporation, (b) is qualified to do
business and is in good standing in the jurisdictions set forth on Schedule 6.3
which are the only jurisdictions in which qualification is necessary in order
for it to own or lease its property and conduct its business and (c) has all
requisite power and authority to conduct its business and to own its property.
6.4 Corporate Name; Prior Transactions. Except as otherwise disclosed
on Schedule 6.4, each Borrower has not, during the past five (5) years, been
known by or used any other corporate or fictitious name, or been a party to any
merger or consolidation, or acquired all or substantially all of the assets of
any Person, or acquired any of its property outside of the ordinary course of
business.
6.5 Subsidiaries and Affiliates. Schedule 6.5 is a correct and
complete list of the name and relationship to each Borrower of each and all of
that Borrower's Subsidiaries and other Affiliates. Each Subsidiary is (a) duly
incorporated or organized and validly existing in good standing under the laws
of its state of incorporation or organization set forth on Schedule 6.5, and (b)
qualified to do business and in good standing in each jurisdiction in which the
failure to so qualify or be in good standing could reasonably be expected to
have a material adverse effect on any such Subsidiary's business, operations,
prospects, property, or condition (financial or otherwise) and (c) has all
requisite power and authority to conduct its business and own its property.
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6.6 Financial Statements and Projections.
(a) The Borrowers have delivered to the Administrative Agent and the
Lenders consolidated audited balance sheet and related statements of income,
retained earnings, cash flows, and changes in stockholders equity for the
Borrower and its consolidated Subsidiaries as of December 31, 2001, and for the
Fiscal Year then ended, accompanied by the report thereon of the Borrowers'
independent certified public accountants, Ernst & Young LLP. The Borrowers have
also delivered to the Administrative Agent and the Lenders the consolidated
unaudited balance sheet and related statements of income and cash flows for the
Borrower and its consolidated Subsidiaries as of September 30, 2002. Such
financial statements are attached hereto as Exhibit C. All such financial
statements have been prepared in accordance with GAAP and present accurately and
fairly in all material respects the financial position of the Borrowers and
their consolidated Subsidiaries as at the dates thereof and their results of
operations for the periods then ended.
(b) The Latest Projections when submitted to the Lenders as required
herein represent the Borrowers' best estimate of the future financial
performance of the Borrowers and their consolidated Subsidiaries for the periods
set forth therein. The Latest Projections have been prepared on the basis of the
assumptions set forth therein, which the Borrowers believe are fair and
reasonable in light of current and reasonably foreseeable business conditions at
the time submitted to the Lenders.
6.7 [Intentionally Omitted].
6.8 Liens on Collateral. There are no Liens of any nature whatsoever
on any assets of a Borrower other than Permitted Liens. Without limiting the
generality of the foregoing, no Borrower has granted (i) a UCC security interest
in any of its Inventory or in the proceeds thereof (including Accounts) in favor
of any Person, except the Administrative Agent, the Pre-Petition Agents and,
solely with respect to Accounts sold by WPS prior to the Petition Date, WPSRC,
or (ii) a mortgage Lien with respect to any of its Real Estate other than the
Administrative Agent and the Pre-Petition Agents.
6.9 Debt. After giving effect to the making of the Revolving Loans to
be made on the Closing Date, the Borrowers and their Subsidiaries have no Debt,
except (a) the Obligations, (b) Debt of Foreign Subsidiaries outstanding on the
Closing Date, and (c) Debt described on Schedule 6.9.
6.10 Distributions. Since the Petition Date, no Distribution has been
declared, paid, or made upon or in respect of any capital stock or other
securities of the Borrowers or any of their Subsidiaries, except for
Distributions made by a Subsidiary to a Borrower or by a Borrower to another
Borrower.
6.11 Real Estate; Leases. Schedule 6.11 sets forth, as of the Closing
Date, a correct and complete list of all Real Estate owned by the Borrowers and
all Real Estate owned by any of their Subsidiaries, all leases and subleases of
real or personal property held by the Borrowers as lessee or sublessee (other
than leases of personal property as to which a Borrower is lessee or sublessee
for which the value of such personal property in the aggregate is less than
$1,000,000), and all leases and subleases of real or personal property held by
29
the Borrowers as lessor, or sublessor. Each of such leases and subleases is
valid and enforceable in accordance with its terms and is in full force and
effect, and no default by any party to any such lease or sublease exists except
for defaults by the Borrowers thereunder arising prior to the Petition Date or
as a consequence of the commencement of any of the Chapter 11 Cases. The
Borrowers have good and marketable title in fee simple to the Real Estate
identified on Schedule 6.11 as owned by the Borrower noted thereon, or valid
leasehold interests in all Real Estate designated therein as "leased" by the
Borrowers and the Borrowers have good, indefeasible, and merchantable title to
all of their other property, free of all Liens except Permitted Liens.
6.12 Proprietary Rights. Schedule 6.12 sets forth a correct and
complete list of all of the Borrowers' Proprietary Rights (other than any
foreign patents or trademarks or related Proprietary Rights). None of the
Proprietary Rights is subject to any licensing agreement or similar arrangement
except as set forth on Schedule 6.12. To the best of the Borrowers' knowledge,
none of the Proprietary Rights infringes on or conflicts with any other Person's
property, and no other Person's property infringes on or conflicts with the
Proprietary Rights. The Proprietary Rights described on Schedule 6.12 constitute
all of the property of such type necessary to the current and anticipated future
conduct of the Borrowers' business. No claim or litigation regarding any of the
Borrowers' Proprietary Rights is pending or threatened, and no patent,
invention, device, application, principle or any statute, law, rule, regulation,
standard or code is pending or, to the knowledge of the Borrowers, proposed,
which, in either case, could reasonably be expected to have a Material Adverse
Effect.
6.13 Trade Names. All trade names or styles under which the Borrowers
or any of its Subsidiaries will sell Inventory or create Accounts, or to which
instruments in payment of Accounts may be made payable, are listed on Schedule
6.13.
6.14 Litigation. Except as set forth on Schedule 6.14, there is no
pending, or to the best of any Borrower's knowledge threatened, action, suit,
proceeding, or counterclaim by any Person, or to the best of any Borrower's
knowledge, investigation by any Governmental Authority, or any basis for any of
the foregoing, which could reasonably be expected to have a Material Adverse
Effect.
6.15 Labor Disputes. Except as set forth on Schedule 6.15, as of the
Closing Date (a) there is no collective bargaining agreement or other labor
contract covering employees of any Borrower or any of their Subsidiaries, (b) no
such collective bargaining agreement or other labor contract is scheduled to
expire during the term of this Agreement, (c) no union or other labor
organization is seeking to organize, or to be recognized as, a collective
bargaining unit of employees of any Borrower or any of their Subsidiaries or for
any similar purpose, and (d) there is no pending or (to the best of any
Borrower's knowledge) threatened, strike, work stoppage, material unfair labor
practice claim, or other material labor dispute against or affecting such
Borrower or its Subsidiaries or their employees.
6.16 Environmental Laws. Except as otherwise disclosed on Schedule
6.16:
(a) Each Borrower and its Subsidiaries have complied in all material
respects with all Environmental Laws and neither such Borrower nor any
Subsidiary nor any of its presently owned real property or presently conducted
30
operations, nor its previously owned real property or prior operations, is
subject to any enforcement order from or liability agreement with any
Governmental Authority or private Person respecting (i) compliance with any
Environmental Law or (ii) any potential liabilities and costs or remedial action
arising from the Release or threatened Release of a Contaminant, except for
instances of noncompliance which could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(b) Each Borrower and its Subsidiaries have obtained all permits
necessary for their current operations under Environmental Laws, and all such
permits are in good standing and such Borrower and its Subsidiaries are in
compliance with all material terms and conditions of such permits.
(c) None of the Borrowers or their Subsidiaries, nor, to the best of
the Borrowers' knowledge, any of their predecessors in interest, has in
violation of applicable law stored, treated or disposed of any hazardous waste,
except for instances of noncompliance which could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(d) None of the Borrowers or their Subsidiaries has received any
summons, complaint, order or similar written notice indicating that it is not
currently in compliance with, or that any Governmental Authority is
investigating its compliance with, any Environmental Laws or that it is or may
be liable to any other Person as a result of a Release or threatened Release of
a Contaminant, except with respect to Releases or threatened Releases which
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(e) To the best of each Borrower's knowledge, none of the present or
past operations of such Borrower and its Subsidiaries is the subject of any
investigation by any Governmental Authority evaluating whether any remedial
action is needed to respond to a Release or threatened Release of a Contaminant,
except with respect to Releases or threatened Releases which could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
(f) There is not now, nor to the best of each Borrower's knowledge
has there ever been on or in the Real Estate:
(1) any underground storage tanks or surface impoundments,
(2) any asbestos-containing material, or
(3) any polychlorinated biphenyls (PCBs) used in hydraulic oils,
electrical transformers or other equipment,
except to the extent the presence of any of the foregoing could not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.
31
(g) None of the Borrowers or their Subsidiaries has filed any notice
under any requirement of Environmental Law reporting a spill or accidental and
unpermitted Release or discharge of a Contaminant into the environment, except
with respect to spills, Releases or discharges which could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
(h) None of the Borrowers or their Subsidiaries has entered into any
negotiations or settlement agreements with any Person (including the prior owner
of its property) imposing material obligations or liabilities on such Borrower
or any of its Subsidiaries with respect to any remedial action in response to
the Release of a Contaminant or environmentally related claim.
(i) None of the products manufactured, distributed or sold by the
Borrowers or any of their Subsidiaries contain asbestos containing material.
(j) No Environmental Lien has attached to the Real Estate.
6.17 No Violation of Law. Neither the Borrower nor any of its
Subsidiaries is in violation of any law, statute, regulation, ordinance,
judgment, order, or decree applicable to it which violation could reasonably be
expected to have a Material Adverse Effect.
6.18 No Default. None of the Borrowers nor their Subsidiaries is in
default with respect to any note, indenture, loan agreement, mortgage, lease,
deed, or other agreement entered into on or after the Petition Date to which
such Borrower or such Subsidiary is a party or by which it is bound, which
default could reasonably be expected to have a Material Adverse Effect.
6.19 ERISA Compliance. Except in each case for instances of
non-compliance which individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect or as specifically disclosed in
Schedule 6.19:
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law. Each
Plan which is intended to qualify under Section 401(a) of the Code has received
a favorable determination letter from the IRS and to the best knowledge of each
Borrower, nothing has occurred which would cause the loss of such qualification.
Each Borrower and each ERISA Affiliate have made all required contributions to
any Plan subject to Section 412 of the Code, and no application for a funding
waiver or an extension of any amortization period pursuant to Section 412 of the
Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of each Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
any Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
32
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither any Borrower nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Section 4201 or 4243 of ERISA with respect to a Multi-employer Plan; and (v)
neither any Borrower nor any ERISA Affiliate has engaged in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
6.20 Taxes. The Borrowers and their Subsidiaries have filed all
federal and other tax returns and reports required to be filed, and have paid
all federal and other taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due
and payable (other than certain taxes arising prior to the Petition Date) unless
such unpaid taxes and assessments would constitute a Permitted Lien.
6.21 Regulated Entities. None of the Borrowers, any Person
controlling any Borrower, or any Subsidiary, is an "Investment Company" within
the meaning of the Investment Company Act of 1940. No Borrower is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code or law,
or any other federal or state statute or regulation limiting its ability to
incur indebtedness.
6.22 Use of Proceeds; Margin Regulations; Loans to Directors and
Executive Officers. The proceeds of the Loans are to be used solely for the
purposes set forth in Section 1.2(b). No Borrower or Subsidiary is engaged in
the business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock. None of the proceeds of the
Loans will be used directly or indirectly to fund a personal loan to or for the
benefit of a director or executive officer of a Borrower or other Obligor, or
otherwise used for any purpose that is prohibited by applicable law.
6.23 Copyrights, Patents, Trademarks and Licenses, etc. The Borrowers
own or are licensed or otherwise have the right to use all of the patents,
trademarks, service marks, trade names, copyrights, contractual franchises,
licenses, rights of way, authorizations and other rights that are reasonably
necessary for the operation of its businesses, without conflict with the rights
of any other Person. To the best knowledge of the Borrowers, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by the Borrowers or any
Subsidiary infringes upon any rights held by any other Person. .
6.24 No Material Adverse Change. Since the Petition Date, no event
has occurred that has or could reasonably be expected to have a Material Adverse
Effect.
6.25 Full Disclosure. None of the representations or warranties made
by any Borrower or any Subsidiary in the DIP Financing Documents as of the date
such representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of any Borrower or any Subsidiary in connection with the DIP
Financing Documents (including the offering and disclosure materials delivered
by or on behalf of the Borrowers to the Lenders prior to the Closing Date),
33
contains any untrue statement of a material fact or omits any material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they are made, not misleading as of
the time when made or delivered.
6.26 [Intentionally Omitted].
6.27 Bank Accounts. Schedule 6.27 contains as of the Closing Date a
complete and accurate list of all bank accounts maintained by each Borrower with
any bank or other financial institution.
6.28 Governmental Authorization. Other than entry by the Court of the
Interim Financing Order and, thereafter, the Final Financing Order, no approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Borrower or any Subsidiaries of this Agreement or any other DIP
Financing Document.
6.29 Tax Shelter Regulations. The Borrowers do not intend to treat
the Loans and/or Letters of Credit as being a "reportable transaction" (within
the meaning of Treasury Regulation Section 1.6011-4). In the event the Borrowers
determine to take any action inconsistent with such intention, it will promptly
notify the Administrative Agent thereof. If the Borrowers so notify the
Administrative Agent, the Borrowers acknowledge that one or more of the Lenders
may treat its Loans and/or its interest in Non-Ratable Loans and/or Agent
Advances and/or Letters of Credit as part of a transaction that is subject to
Treasury Regulation Section 301.6112-1, and such Lender or Lenders, as
applicable, will maintain the lists and other records required by such Treasury
Regulation.
6.30 Reaffirmation of Representations and Warranties. All of the
foregoing representations and warranties made by Borrowers in this Agreement or
in any of the other DIP Financing Documents shall survive the execution and
delivery of this Agreement and such other DIP Financing Documents, and shall be
deemed to have been remade and reaffirmed on each day that Borrowers request or
are deemed to have requested the funding of a Loan under the DIP Facility,
except for changes that may occur after the date hereof in the Ordinary Course
of Business as long as Administrative Agent and Lenders have consented to such
changes or such changes are not violative of any provision of this Agreement.
ARTICLE 7
AFFIRMATIVE AND NEGATIVE COVENANTS
----------------------------------
Each Borrower covenants to the Administrative Agent and each Lender
that so long as any of the Obligations remain outstanding or this Agreement is
in effect:
7.1 Taxes and Other Obligations. Each Borrower shall, and shall cause
each of Subsidiaries to, (a) file when due all tax returns and other reports
which it is required to file; (b) pay, or provide for the payment, when due, of
all taxes, fees, assessments and other governmental charges against it or upon
its property, income and franchises, in each case, arising on or after the
Petition Date, make all required withholding and other tax deposits, and
establish adequate reserves for the payment of all such items, and provide to
the Administrative Agent and the Lenders, upon request, satisfactory evidence of
34
its timely compliance with the foregoing; and (c) pay when due all Debt owed by
it and all claims of materialmen, mechanics, carriers, warehousemen, landlords,
processors and other like Persons, and all other indebtedness owed by it and
perform and discharge in a timely manner all other obligations undertaken by it,
in each case arising on or after the Petition Date; provided, however, so long
as the Borrowers have notified the Administrative Agent in writing, neither a
Borrower nor any of its Subsidiaries need pay any tax, fee, assessment, or
governmental charge (i) it is contesting in good faith by appropriate
proceedings diligently pursued, (ii) as to which such Borrower or its
Subsidiary, as the case may be, has established proper reserves as required
under GAAP, and (iii) the nonpayment of which does not result in the imposition
of a Lien (other than a Permitted Lien).
7.2 Legal Existence and Good Standing. Each Borrower shall, and shall
cause each of its Subsidiaries to, maintain its legal existence and its
qualification and good standing in all jurisdictions in which the failure to
maintain such existence and qualification or good standing could reasonably be
expected to have a Material Adverse Effect.
7.3 Compliance with Law and Agreements; Maintenance of Licenses .
Each Borrower shall comply, and shall cause each Subsidiary to comply, in all
material respects with all Requirements of Law of any Governmental Authority
having jurisdiction over it or its business (including the Bankruptcy Code, the
Federal Fair Labor Standards Act, all Environmental Laws and the Xxxxxxxx-Xxxxx
Act). Each Borrower shall, and shall cause each of its Subsidiaries to, obtain
and maintain all licenses, permits, franchises, and governmental authorizations
necessary to own its property and to conduct its business as conducted on the
Closing Date. No Borrower shall modify, amend or alter its certificate or
articles of incorporation, or its limited liability company operating agreement
or limited partnership agreement, as applicable, other than in a manner which
does not adversely affect the rights of the Lenders or the Administrative Agent.
7.4 Maintenance of Property; Inspection of Property.
(a) Each Borrower shall, and shall cause each of its Subsidiaries to,
maintain all of its property necessary and useful in the conduct of its
business, in good operating condition and repair, ordinary wear and tear
excepted.
(b) Each Borrower shall permit representatives and independent
contractors of the Administrative Agent from time to time, as often as may be
reasonably requested (but only during normal business hours), and at the expense
of the Borrower, to visit and inspect any of its properties (including any
Collateral), to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom and to discuss its affairs, finances and
accounts with its directors, officers and independent public accountants, at
such reasonable times during normal business hours and as soon as may be
reasonably desired, upon reasonable advance notice to Borrowers; provided,
however, when an Event of Default exists, the Administrative Agent or any Lender
may do any of the foregoing at the expense of the Borrowers at any time during
normal business hours and without advance notice.
7.5 Insurance.
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(a) Each Borrower shall, and shall cause each of its Subsidiaries to,
maintain in full force and effect insurance (including worker's compensation
insurance, liability insurance, property insurance and business interruption
insurance) in such amounts, with such insurers, covering such risks and
liabilities and with such deductibles or self-insurance retentions as are in
accordance with reasonable business practices and are customary for Persons
engaged in the same or similar business.
(b) Each Borrower shall cause the Administrative Agent, for the
ratable benefit of the Administrative Agent and the Lenders, to be named as
secured party or mortgagee and loss payee or additional insured, in a manner
acceptable to the Administrative Agent. Each policy of insurance shall contain a
clause or endorsement requiring the insurer to give not less than thirty (30)
days prior written notice to the Administrative Agent in the event of
cancellation of the policy for any reason whatsoever and a clause or endorsement
stating that the interest of the Administrative Agent shall not be impaired or
invalidated by any act or neglect of such Borrower or any of its Subsidiaries or
the owner of any Real Estate for purposes more hazardous than are permitted by
such policy. All premiums for such insurance shall be paid by each Borrower when
due, and certificates of insurance and, if requested by the Administrative Agent
or any Lender, photocopies of the policies, shall be delivered to the
Administrative Agent. If a Borrower fails to procure such insurance or to pay
the premiums therefor when due, the Administrative Agent may, and at the
direction of the Supermajority Lenders shall, do so from the proceeds of
Revolving Loans.
7.6 Disposition of Insurance and Condemnation Proceeds. Each Borrower
shall promptly notify the Administrative Agent and the Lenders of any loss,
damage, or destruction to the Collateral, whether or not covered by insurance.
The Administrative Agent is hereby authorized to collect all insurance and
condemnation proceeds in respect of Collateral directly and to apply them as
follows:
(a) With respect to insurance and condemnation proceeds relating to
Collateral other than Fixed Assets, Borrowers shall promptly remit, or cause to
be promptly remitted, to the Administrative Agent all such proceeds and, after
deducting from such proceeds the reasonable expenses, if any, incurred by the
Administrative Agent in the collection or handling thereof, the Administrative
Agent shall apply such proceeds to the reduction of the Obligations in the order
provided for in Section 3.6.
(b) With respect to insurance and condemnation proceeds relating to
Collateral consisting of Fixed Assets ("Fixed Asset Loss Proceeds"), the
Borrowers shall promptly remit, or cause to be remitted, to the Administrative
Agent all such Fixed Asset Loss Proceeds and, after deducting therefrom the
reasonable expenses, if any, incurred by the Administrative Agent in the
collection or handling thereof, the Administrative Agent shall apply such Fixed
Asset Loss Proceeds to the reduction of the Obligations in the manner specified
in Section 3.6. Concurrently with its application of such Fixed Asset Loss
Proceeds to the Obligations, the Administrative Agent shall impose, or add to, a
reserve (the "Fixed Asset Reserve") in an amount equal to the amount of such
Fixed Asset Loss Proceeds applied to the Obligations. If the Borrowers shall,
within a period of ninety (90) days after the Administrative Agent's receipt of
such Fixed Asset Loss Proceeds, elect, by written notice to the Administrative
Agent, to replace, repair, restore or rebuild the relevant Fixed Asset that was
36
the subject of the insured loss or condemnation, or if the Administrative Agent
(acting at the direction of the Supermajority Lenders) shall require the
Borrowers to replace, repair, restore, or rebuild such Fixed Asset, then the
Borrowers shall proceed to do so in a diligent and expeditious manner and (in
the case of a repair, restoration or rebuilding) with material and workmanship
of substantially the same quality as existed before such insured loss or
condemnation; and the Administrative Agent shall reduce the amount of the Fixed
Asset Reserve on each date that the Borrowers request a Revolving Loan for the
purpose of paying any indebtedness incurred by them for the replacement, repair,
restoration or rebuilding of such Fixed Asset (a "Restoration Advance"), but any
such reduction in the Fixed Asset Reserve shall be conditioned upon satisfaction
of each of the following conditions: (1) no Default or Event of Default exists
at the time of the Borrowers' request for a Restoration Advance or would exist
after the funding thereof; (2) the Borrowers first (i) provide the
Administrative Agent and the Lenders with plans and specifications ("Plans and
Specs") for any repair, restoration or rebuilding, and such Plans and Specs are
reasonably satisfactory to the Administrative Agent and the Majority Lenders and
(ii) demonstrate to the reasonable satisfaction of the Administrative Agent and
the Majority Lenders that funds available to the Borrowers will be sufficient to
complete such project in accordance with the Plans and Specs; (3) the Commitment
Termination Date has not occurred; (4) after giving effect to any requested
Restoration Advance, and a concurrent reduction in the Fixed Asset Reserve in a
corresponding amount, no Overadvance Condition would exist; and (5) the
aggregate amount of Restoration Advances in connection with which the Fixed
Asset Reserve is to be reduced does not exceed the lesser of (x) $8,000,000 and
(y) the amount of insurance or condemnation proceeds applied to the Obligations
as a result of loss of or damage to the relevant Fixed Asset. If the aggregate
proceeds attributable to the loss of Fixed Assets in a single casualty or
condemnation exceed $8,000,000, then the excess ("Excess Casualty/Condemnation
Proceeds") shall not form a part of the Fixed Asset Reserve but shall be added
to the Reduction Event Reserve.
7.7 Environmental Laws. (a) (a) Each Borrower shall, and shall cause
each of its Subsidiaries to, conduct its business in compliance in all material
respects with all Environmental Laws applicable to it, including those relating
to the generation, handling, use, storage, and disposal of any Contaminant. Each
Borrower shall, and shall cause each of its Subsidiaries to, take prompt and
appropriate action to respond to any non-compliance with Environmental Laws and
shall regularly report to the Administrative Agent on such response.
(b) The Administrative Agent and its representatives will have the
right at any reasonable time to enter and visit the Real Estate and any other
place where any property of a Borrower is located for the purposes of observing
the Real Estate, taking and removing soil or groundwater samples, and conducting
tests on any part of the Real Estate. The Administrative Agent is under no duty,
however, to visit or observe the Real Estate or to conduct tests, and any such
acts by the Administrative Agent will be solely for the purposes of protecting
the Administrative Agent's Liens and preserving the Administrative Agent and the
Lenders' rights under the DIP Financing Documents. No site visit, observation or
testing by the Administrative Agent and the Lenders will result in a waiver of
any default of the Borrowers or impose any liability on the Administrative Agent
or the Lenders. In no event will any site visit, observation or testing by the
Administrative Agent be a representation that hazardous substances are or are
not present in, on or under the Real Estate, or that there has been or will be
compliance with any Environmental Law. Neither any Borrower nor any other party
37
is entitled to rely on any site visit, observation or testing by the
Administrative Agent. The Administrative Agent and the Lenders owe no duty of
care to protect any Borrower or any other party against, or to inform any
Borrower or any other party of, any hazardous substances or any other adverse
condition affecting the Real Estate. The Administrative Agent may in its
discretion disclose to a Borrower or to any other party if so required by law
any report or findings made as a result of, or in connection with, any site
visit, observation or testing by the Administrative Agent. The Borrowers
understand and agree that the Administrative Agent makes no warranty or
representation to the Borrowers or any other party regarding the truth, accuracy
or completeness of any such report or findings that may be disclosed. The
Borrowers also understand that depending on the results of any site visit,
observation or testing by the Administrative Agent and disclosed to the
Borrowers, the Borrowers may have a legal obligation to notify one or more
environmental agencies of the results, that such reporting requirements are
site-specific, and are to be evaluated by the Borrowers without advice or
assistance from the Administrative Agent. In each instance, the Administrative
Agent will give such Borrower reasonable notice before entering the Real Estate
or any other place the Administrative Agent is permitted to enter under this
Section 7.7(b). The Administrative Agent will make reasonable efforts to avoid
interfering with such Borrower's use of the Real Estate or any other property in
exercising any rights provided hereunder.
7.8 Compliance with ERISA. Each Borrower shall, and shall cause each
of its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; (c) make all required contributions to any
Plan subject to Section 412 of the Code; (d) not engage in a prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan; and (e) not engage in a transaction that could be subject to Section
4069 or 4212(c) of ERISA.
7.9 Mergers, Consolidations or Sales. None of the Borrowers nor any
of their Subsidiaries shall enter into any transaction of merger,
reorganization, or consolidation, or wind up, liquidate or dissolve, or
transfer, sell, assign, lease, or otherwise dispose of all or any part of its
property, or agree to do any of the foregoing, except (i) sales of Inventory in
the Ordinary Course of Business of a Borrower (subject, in the case of a sale to
a Foreign Subsidiary, to the limitations contained in Section 7.15), (ii) sales
or other dispositions by a Borrower of Equipment that is obsolete or no longer
useable by such Borrower in its business with an orderly liquidation value not
to exceed, in the aggregate, $1,000,000 in any Fiscal Year, and (iii)
dispositions of property that is consented to in writing by Administrative Agent
and the Majority Lenders and authorized by the Court after notice and a hearing.
Without limiting the generality of the foregoing, no Borrower shall, after the
Petition Date, sell, assign, transfer or otherwise dispose of, or grant any
security or other interest in, any of its Accounts to or in favor of WPSRC or
any other Person (except Liens granted in favor of the Administrative Agent).
7.10 Distributions; Capital Change; Restricted Investments. None of
the Borrowers nor any of their Subsidiaries shall (i) directly or indirectly
declare or make, or incur any liability to make, any Distribution except for
Distributions made by a Subsidiary to a Borrower (including Distributions made
by WPSRC consisting of Purchased Receivables) or by a Borrower to another
Borrower, (ii) make any change in its capital structure which could have a
38
Material Adverse Effect or (iii) make any Restricted Investment, except that
this clause (iii) shall not apply to transactions otherwise permitted by
Sections 7.13 and 7.15.
7.11 Transactions Affecting Collateral or Obligations. None of the
Borrowers nor any of their Subsidiaries shall enter into any transaction which
would be reasonably expected to have a Material Adverse Effect.
7.12 Guaranties. No Borrower or any Subsidiary shall make, issue, or
become liable on any Guaranty, except Guaranties of the Obligations in favor of
the Administrative Agent for the benefit of itself and the Lenders.
7.13 Permitted Debt. No Borrower or any Subsidiary shall create,
incur, assume or suffer to exist any Debt other than (i) Claims in existence on
the Petition Date, (ii) the Obligations, (iii) Claims under Capitalized Leases
and Purchase Money Debt, which, if secured, are only secured by a Permitted
Lien, to the extent expenditures in connection therewith are not in violation of
Section 7.22, (iv) indebtedness of a Borrower owing to another Borrower (but
each Borrower subordinates its right to payment of any such indebtedness to the
Full Payment of the Obligations), and (v) indebtedness of any Foreign Subsidiary
to any Borrowers and outstanding on the Petition Date and, to the extent
permitted by Section 7.15, indebtedness incurred by Foreign Subsidiaries after
the Petition Date to any Borrowers.
7.14 Prepayment. No Borrower or any Subsidiary shall voluntarily
prepay any Debt, except (i) the Obligations in accordance with the terms of the
DIP Financing Documents, (ii) any Debt owing by a Subsidiary to a Borrower, and
(iii) in the case of WPSRC, Debt outstanding under the Congress Loan Agreement.
7.15 Transactions with Affiliates. No Borrower or any Subsidiary
shall sell, transfer, distribute, or pay any money or property, including any
fees or expenses of any nature (including any fees or expenses for management
services), to any Affiliate, or lend or advance money or property to any
Affiliate, or invest in (by capital contribution or otherwise) or purchase or
repurchase any stock or indebtedness, or any property, of any Affiliate, or
become liable on any Guaranty of the indebtedness, dividends, or other
obligations of any Affiliate, or cause any letter of credit to be issued to
support or secure any Debt of a Foreign Subsidiary or to otherwise benefit a
Foreign Subsidiary; provided that (a) the Borrowers may (i) sell Inventory to
Foreign Subsidiaries in the Ordinary Course of Business of such Borrowers and in
arm's length transactions and (ii) make Foreign Subsidiary Advances, to the
extent that the sum of (A) the aggregate outstanding face amount of Accounts
arising from such sales to Foreign Subsidiaries after the Petition Date, and (B)
the aggregate amount of all Foreign Subsidiary Advances made after the Petition
Date, does not exceed $7,500,000 at any time, (b) WPS may purchase from WPSRC
any goods the sale of which gave rise to a Purchased Receivable, to the extent
that such goods are returned by the account debtor obligated on such Purchased
Receivable, for a purchase price not to exceed the lesser of the unpaid balance
of the subject Purchased Receivable and the then unpaid balance outstanding
under the Congress Loan Agreement, but only if such purchase will result in WPS
owning such goods free and clear of all Liens created by or through WPSRC, and
(c) WPS may repurchase any Purchased Receivables and related assets from WPSRC
in accordance with the Receivables Purchase Agreement, but in no event for a
purchase price exceeding the then unpaid balance outstanding under the Congress
39
Loan Agreement and provided that such purchase will result in WPS owning such
Purchased Receivables and related assets free and clear of all Liens created by
or through WPSRC.
7.16 Investment Banking and Finder's Fees. No Borrower or any
Subsidiary shall pay or agree to pay, or reimburse any other party with respect
to, any investment banking or similar or related fee, underwriter's fee,
finder's fee, or broker's fee to any Person in connection with this Agreement.
The Borrowers shall defend and indemnify the Administrative Agent and the
Lenders against and hold them harmless from all claims of any Person that the
Borrower is obligated to pay for any such fees, and all costs and expenses
(including attorneys' fees) incurred by the Administrative Agent and/or any
Lender in connection therewith.
7.17 Business Conducted. No Borrower shall, and no Borrower shall
permit any of its Subsidiaries to, engage directly or indirectly, in any line of
business other than the businesses in which the Borrower is engaged on the
Petition Date or businesses reasonably related thereto.
7.18 Liens. No Borrower shall, and no Borrower shall permit any of
its Subsidiaries to, create, incur, assume, or permit to exist any Lien on any
property (including any Collateral) now owned or hereafter acquired by any of
them, except Permitted Liens.
7.19 Sale and Leaseback Transactions. No Borrower or any Subsidiary
shall, directly or indirectly, enter into any arrangement with any Person
providing for such Borrower or such Subsidiary to lease or rent property that
such Borrower or such Subsidiary has sold or will sell or otherwise transfer to
such Person.
7.20 New Subsidiaries. The Borrowers shall not, directly or
indirectly, organize, create, acquire or permit to exist any Subsidiary other
than Subsidiaries in existence on the Petition Date and described in Schedule
6.5.
7.21 Fiscal Year. The Borrowers shall not change their Fiscal Year.
7.22 Capital Expenditures. Neither the Borrowers nor any of their
Subsidiaries shall make or incur any Capital Expenditure if, after giving effect
thereto, the aggregate amount of all Capital Expenditures made or incurred by
the Borrowers and their Subsidiaries on a consolidated basis would exceed
$50,000,000 during any Fiscal Year; provided, that any unused portion of such
allowance up to $15,000,000 may be carried over but only to the succeeding
Fiscal Year. All Capital Expenditures shall be applied first to reduce the
annual $50,000,000 allowance.
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7.23 EBITDA.
(a) The Borrowers and their Subsidiaries, on a consolidated basis,
shall be required to have EBITDA for each specified period set forth below of
not less than the amount set forth below opposite each such specified period:
Period EBITDA
------ ------
The period of four consecutive Fiscal Months ending on the last day $58,000,000
of the Fiscal Month of September, 2003
The period of seven consecutive Fiscal Months ending on the last day $102,000,000
of the Fiscal Month of December, 2003
The period of ten consecutive Fiscal Months ending on the last day $133,000,000
of the Fiscal Month of March, 2004
The period of four consecutive Fiscal Quarters ending on the last $148,000,000
day of the Fiscal Month of June, 2004
The period of four consecutive Fiscal Quarters ending on the last $158,000,000
day of the Fiscal Month of September, 2004
Each period of four consecutive Fiscal Quarters ending on or after $160,000,000
the last day of the Fiscal Month of December, 2004
(b) If, at any time during the Fiscal Month immediately following a
period specified below, Availability is less than $75,000,000, then the
Borrowers and their Subsidiaries, on a consolidated basis, shall be required to
have EBITDA for such period of not less than the amount set forth below opposite
such period:
Period EBITDA
------ ------
The period of five consecutive Fiscal Months ending on the last day $77,000,000
of the Fiscal Month of October, 2003
The period of six consecutive Fiscal Months ending on the last day $90,000,000
of the Fiscal Month of November, 2003
41
The period of eight consecutive Fiscal Months ending on the last day $118,000,000
of the Fiscal Month of January, 2004
The period of nine consecutive Fiscal Months ending on the last day $126,000,000
of the Fiscal Month of February, 2004
The period of eleven consecutive Fiscal Months ending on the last $138,000,000
day of the Fiscal Month of April, 2004
The period of twelve consecutive Fiscal Months ending on the last $148,000,000
day of the Fiscal Months of May, 2004
Each period of twelve consecutive Fiscal Months ending on the last $158,000,000
day of the Fiscal Months of July and August, 2004
Each period of twelve consecutive Fiscal Months ending on or after $160,000,000
the last day of the Fiscal Month of October, 2004
7.24 [Intentionally Omitted].
7.25 Margin Stock. The Borrowers shall not, and shall not suffer or
permit any Subsidiary to, use any portion of the Loan proceeds, directly or
indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Borrower or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
7.26 Further Assurances; Post-Closing Obligations.
(a) The Borrowers shall promptly execute and deliver, or promptly
cause to be executed and delivered, to the Administrative Agent and/or the
Lenders such documents and agreements, and shall take or cause to be taken such
actions, as the Administrative Agent or any Lender may, from time to time,
request to carry out the terms and conditions of this Agreement and the DIP
Financing Documents.
(b) Without limiting the generality of the foregoing, the Borrowers
agree to execute and deliver, or cause to be executed or delivered, to the
Administrative Agent and/or the Lenders as soon as possible, but in any event
not later than forty-five (45) days after the Closing Date, any Security
Documents not executed and delivered by the Borrowers on or prior to the Closing
Date.
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7.27 Compliance with Orders. To the extent having applicability to
such Borrower or Subsidiary, each Borrower and its Subsidiaries shall comply
with the Interim Financing Order, the Financing Orders, the Pre-Petition Lender
Protection Orders and all other orders entered by the Court in the Chapter 11
Cases.
7.28 Turnover of Collateral Proceeds. Except as expressly otherwise
provided in the Financing Orders, during any Cash Dominion Period, each Borrower
and Subsidiary shall promptly (but no later than the next Business Day after its
receipt thereof) turn over to Administrative Agent all proceeds received from
any sale, other disposition or collection of any Collateral or representing
insurance or condemnation proceeds with respect to any Collateral, such proceeds
to be applied to the Obligations, subject to the provisions of Section 3.6.
After Full Payment of the Obligations, Administrative Agent shall be authorized
to return and apply any remaining proceeds for other purposes set forth in
Section 3.6.
7.29 Payment of Claims. No Borrower shall make any payment of
principal or interest on account of any Claim that arose before the Petition
Date, other than Claims that may be paid from proceeds of the Loans pursuant to
Section 1.2(b), subject to any required approval of the Court.
7.30 Filing of Motions and Applications. No Borrower shall apply to
the Court for authority to (i) take any action that is prohibited by the terms
of any of the DIP Financing Documents, (ii) refrain from taking any action that
is required to be taken by the terms of any of the DIP Financing Documents or
the Financing Orders or (iii) permit any Debt or Claim to be pari passu with or
senior to any of the Obligations, other than a Claim covered by the Carve-Out to
the extent provided in the Financing Orders.
7.31 Modifications to Orders. No Borrower shall seek or consent to
any amendment, supplement or any other modification of any of the terms of the
Financing Orders or the Pre-Petition Lender Protection Orders without the
consent of the Administrative Agent and the Majority Lenders.
7.32 Reclamation Claims. No Borrower shall (a) make any return of
property on account of Claims asserted by any vendors of such Borrower for
reclamation in accordance with Section 2-702 of the Uniform Commercial Code and
Section 546(c) of the Bankruptcy Code, unless otherwise ordered by the Court, or
(b) enter into any agreements or file any motion seeking an order from the Court
for the return of any property of such Borrower to any vendor pursuant to
Section 546(g) of the Bankruptcy Code if the aggregate value of all property of
Borrowers so returned exceeds $1,000,000.
7.33 Subsidiary Guarantors. If and to the extent requested to do so
by the Administrative Agent and the Majority Lenders, each Borrower shall cause
each Subsidiary that is not a Borrower to become a Subsidiary Guarantor and to
execute and deliver to the Administrative Agent a Subsidiary Guaranty and a
Subsidiary Security Agreement.
7.34 Plant Shutdown Costs. The Borrowers shall not, after the
Petition Date, incur any Plant Shutdown Costs, in cash, in an aggregate amount
in excess of $8,500,000.
43
7.35 Commingling. The Borrowers will endeavor in good faith not to
commingle or permit the commingling of Collateral or proceeds of Collateral with
other property of or under the control of such Borrower or any of its
Subsidiaries that is not Collateral or proceeds of Collateral (including
proceeds of Accounts that were sold by WPS to WPSRC prior to the Petition Date).
7.36 Royalty Payments. The Borrowers shall promptly pay, when due,
all Royalties in connection with License Agreements.
ARTICLE 8
CONDITIONS OF LENDING
---------------------
8.1 Conditions Precedent to Making of Loans on the Closing Date. The
obligation of the Lenders to make the initial Revolving Loans on the Closing
Date, and the obligation of the Administrative Agent to cause the Letter of
Credit Issuer to issue any Letter of Credit on the Closing Date, are subject to
the following conditions precedent having been satisfied in a manner
satisfactory to the Administrative Agent and each Initial Lender:
(a) All of the DIP Financing Documents shall have been executed in
form and substance satisfactory to the Administrative Agent and the Lenders by
each party thereto and accepted by the Administrative Agent and the Initial
Lenders and the Borrowers shall have performed and complied with all covenants,
agreements and conditions contained herein and the other DIP Financing Documents
which are required to be performed or complied with by the Borrowers before or
on such Closing Date.
(b) All representations and warranties made hereunder and in the
other DIP Financing Documents shall be true and correct as if made on such date.
(c) No Default or Event of Default shall have occurred and be
continuing after giving effect to the Loans to be made and the Letters of Credit
to be issued on the Closing Date.
(d) The Interim Financing Order shall have been entered, shall be in
full force and effect and shall not have been vacated, reversed, modified or
stayed in any respect (and, if such order is the subject of a pending appeal, no
performance of any obligation of any party shall have been stayed pending such
appeal).
(e) All of the "first day orders" presented to the Court at or about
the time of the commencement of the Chapter 11 Cases (including orders with
respect to maintenance of Borrowers' cash management system) shall be
satisfactory in form and substance to the Administrative Agent and the Initial
Lenders.
(f) The Administrative Agent and the Initial Lenders shall have
received such opinions of counsel for the Borrowers and their Subsidiaries as
the Administrative Agent or any Lender shall request, each such opinion to be in
a form, scope, and substance satisfactory to the Administrative Agent, the
Lenders, and their respective counsel.
(g) The Administrative Agent shall have received acknowledgment
copies (or confirmation satisfactory to it of the filing) of proper financing
statements, duly filed on or before the Closing Date under the UCC of all
44
jurisdictions that the Administrative Agent may deem necessary or desirable in
order to perfect the Administrative Agent's Liens; and
(h) The Borrowers shall have paid (or made adequate provision for the
payment on the Closing Date of) all fees and expenses of the Administrative
Agent and the Attorney Costs incurred in connection with any of the DIP
Financing Documents and the transactions contemplated thereby to the extent
invoiced.
(i) The Administrative Agent shall have received evidence, in form,
scope, and substance, reasonably satisfactory to the Administrative Agent, of
all insurance coverage as required by this Agreement.
(j) The Administrative Agent and the Initial Lenders shall have had
an opportunity, if they so choose, to examine the books of account and other
records and files of the Borrowers and to make copies thereof, and to conduct a
pre-closing audit which shall include, without limitation, verification of
Inventory, Accounts, and the Borrowing Base, and the results of such examination
and audit shall have been satisfactory to the Administrative Agent and the
Lenders in all respects.
(k) All proceedings taken in connection with the execution of this
Agreement and each other DIP Financing Document and all documents and papers
relating hereto or thereto shall be satisfactory in form, scope, and substance
to the Administrative Agent and the Lenders.
(l) The Administrative Agent and the Initial Lenders shall have
reviewed and found acceptable the Budget.
(m) The Court shall have entered an order for the joint
administration of the Chapter 11 Cases.
(n) The Interim Pre-Petition Lender Protection Order shall have been
entered by the Court in form and substance satisfactory to the Administrative
Agent and the Initial Lenders and shall be in full force and effect.
(o) No order shall have been entered by the Court (i) for the
appointment of a trustee or examiner with enlarged powers substantially similar
to those of a trustee, or (ii) converting any of the Chapter 11 Cases to a
Chapter 7 case or dismissing any of the Chapter 11 Cases or (iii) terminating
prior to any expiration date the Borrowers' exclusive time period to file a plan
of reorganization and, with respect to clauses (i) through (iii) above, no such
order shall have been requested by the Borrowers.
(p) Without limiting the generality of the items described above, the
Borrowers and each Person guarantying or securing payment of the Obligations
shall have delivered or caused to be delivered to the Administrative Agent (in
form and substance reasonably satisfactory to the Administrative Agent), the
financial statements, instruments, resolutions, documents, agreements,
certificates, opinions and other items set forth on the "Closing Checklist"
delivered by the Administrative Agent to the Borrowers prior to the Closing
Date.
45
The acceptance by the Borrowers of any Loans made or Letters of
Credit issued on the Closing Date shall be deemed to be a representation and
warranty made by the Borrowers to the effect that all of the conditions
precedent to the making of such Loans or the issuance of such Letters of Credit
have been satisfied, with the same effect as delivery to the Administrative
Agent and the Lenders of a certificate signed by a Responsible Officer of the
Borrowers, dated the Closing Date, to such effect.
Execution and delivery to the Administrative Agent by a Lender of a
counterpart of this Agreement shall be deemed confirmation by such Lender that
(i) all conditions precedent in this Section 8.1 have been fulfilled to the
satisfaction of such Lender, (ii) the decision of such Lender to execute and
deliver to the Administrative Agent an executed counterpart of this Agreement
was made by such Lender independently and without reliance on the Administrative
Agent or any other Lender as to the satisfaction of any condition precedent set
forth in this Section 8.1, and (iii) all documents sent to such Lender for
approval consent, or satisfaction were acceptable to such Lender.
8.2 Conditions Precedent After Interim Period. The obligation of the
Lenders to make Loans and of the Administrative Agent to cause the Letter of
Credit Issuer to issue any Letter of Credit after the Interim Period shall be
subject to the further condition precedents that:
(a) The Final Financing Order shall have been entered, shall be in
full force and effect and shall not have been vacated, reversed, modified or
stayed in any respect (and, if such order is the subject of a pending appeal, no
performance of any obligation of any party shall have been stayed pending such
appeal).
(b) The Final Pre-Petition Lender Protection Order shall have been
entered, shall be in full force and effect and shall not have been vacated,
reversed, modified or stayed in any respect (and, if such order is the subject
of a pending appeal, no performance of any obligation of any party shall have
been stayed pending such appeal).
8.3 Conditions Precedent to Each Loan. The obligation of the Lenders to make
each Loan, including the initial Revolving Loans on the Closing Date, and the
obligation of the Administrative Agent to cause the Letter of Credit Issuer to
issue any Letter of Credit shall be subject to the further conditions precedent
that on and as of the date of any such extension of credit:
(a) The following statements shall be true, and the acceptance by the
Borrower of any extension of credit shall be deemed to be a statement to the
effect set forth in clauses (i), (ii) and (iii) with the same effect as the
delivery to the Administrative Agent and the Lenders of a certificate signed by
a Responsible Officer, dated the date of such extension of credit, stating that:
(i) The representations and warranties contained in this
Agreement and the other DIP Financing Documents are correct in all
material respects on and as of the date of such extension of credit as
though made on and as of such date, other than any such representation
or warranty which relates to a specified prior date and except to the
extent the Administrative Agent and the Lenders have been notified in
46
writing by the Borrowers that any representation or warranty is not
correct and the Majority Lenders have explicitly waived in writing
compliance with such representation or warranty; and
(ii) No event has occurred and is continuing, or would result
from such extension of credit, which constitutes a Default or an Event
of Default; and
(iii) No event has occurred and is continuing, or would result
from such extension of credit, which has had or would have a Material
Adverse Effect.
(b) No such Borrowing shall exceed Availability, provided, however,
that the foregoing conditions precedent are not conditions to each Lender
participating in or reimbursing Bank of America or the Administrative Agent for
such Lender's Pro Rata Share of any Non-Ratable Loan or Agent Advance made in
accordance with the provisions of Sections 1.2(i) and (j).
ARTICLE 9
DEFAULT; REMEDIES
-----------------
9.1 Events of Default. .It shall constitute an event of default
("Event of Default") if any one or more of the following shall occur for any
reason:
(a) any failure by the Borrowers to pay the principal of or interest
or premium on any of the Obligations or any fee or other amount owing hereunder
when due, whether upon demand or otherwise;
(b) any representation or warranty made or deemed made by any
Borrower this Agreement or by any Borrower or any of its Subsidiaries in any of
the other DIP Financing Documents, any Financial Statement, or any certificate
furnished by a Borrower or any of its Subsidiaries at any time to the
Administrative Agent or any Lender shall prove to be untrue in any material
respect as of the date on which made, deemed made, or furnished;
(c) (i) any default shall occur in the observance or performance of
any of the covenants and agreements contained in Sections 5.2(k), 7.2, 7.5,
7.9-7.34, or Section 11 of the Security Agreement, (ii) any default shall occur
in the observance or performance of any of the covenants and agreements
contained in Sections 5.2 (other than 5.2(k)) or 5.3 and such default shall
continue for three (3) days or more; or (iii) any default shall occur in the
observance or performance of any of the other covenants or agreements contained
in any other Section of this Agreement or any other DIP Financing Document or
any other agreement entered into at any time to which the Borrower or any
Subsidiary and the Administrative Agent or any Lender are party (including in
respect of any Bank Products) and such default shall continue for fifteen (15)
days or more;
(d) any default shall occur with respect to any Debt (other than the
Obligations) of any Borrower or any of its Subsidiaries incurred after the
Petition Date in an outstanding principal amount which exceeds $500,000, or
under any agreement or instrument under or pursuant to which any such Debt may
have been issued, created, assumed, or guaranteed by such Borrower or any of its
47
Subsidiaries, and such default shall continue for more than the period of grace,
if any, therein specified, if the effect thereof (with or without the giving of
notice or further lapse of time or both) is to accelerate, or to permit the
holders of any such Debt to accelerate, the maturity of any such Debt; or any
such Debt shall be declared due and payable or be required to be prepaid (other
than by a regularly scheduled required prepayment) prior to the stated maturity
thereof;
(e) Borrowers shall fail to comply with any of the provisions of the
Financing Orders; a trustee shall be appointed in any of the Chapter 11 Cases;
an examiner shall be appointed in any of the Chapter 11 Cases with enlarged
powers (powers beyond those set forth in Section 1106(a)(3) and (4) of the
Bankruptcy Code) under Section 1106(b) of the Bankruptcy Code; any of the
Chapter 11 Cases shall be dismissed or converted to a case under Chapter 7 or a
motion for any such dismissal or conversion shall be filed by any Borrower; any
Borrower or any Affiliate shall obtain Court approval of a disclosure statement
for a Reorganization Plan other than an Acceptable Plan or a Confirmation Order
shall be entered with respect to a Reorganization Plan (regardless of the
proponent of such Reorganization Plan) if such Reorganization Plan is not an
Acceptable Plan; there shall be filed by a Borrower any motion to sell all or a
substantial part of the Collateral on terms that are not acceptable to Lenders
in their sole discretion; any substantial part of the Borrowers' assets, other
than the Collateral, shall be sold by a Borrower and, as a consequence of such
sale, such Borrower is not able to continue its business operations in
substantially the same manner as was conducted by it prior to such sale; any
Borrower shall file any motion to alter, amend, vacate, supplement, modify, or
reconsider, in any respect, either of the Financing Orders or, without the
Administrative Agent's prior written consent, either of the Financing Orders is
amended, vacated, supplemented, modified or stayed or reversed on appeal; the
Court shall enter an order granting to any Person other than the Administrative
Agent or any Lender relief from the automatic stay to foreclose upon a Lien with
respect to any Accounts or Inventory or with respect to any other Property of a
Borrower having an aggregate book value in excess of $1,000,000; an order shall
be entered for the substantive consolidation of the Estate of a Borrower with
any other Person that is not a Borrower; Borrowers shall not have sufficient
Availability on any date to pay, or shall otherwise fail to pay as and when due
and payable, all costs and expenses of administration that are incurred by it in
the Chapter 11 Cases that are due and payable on such date; any Borrower shall
file a motion or other request with the Court seeking authority to use any cash
proceeds of the Collateral or to obtain any financing under Section 364(d) of
the Bankruptcy Code secured by a priming Lien, or Lien of equal priority with
Administrative Agent's Liens, upon any Collateral, in each case without
Administrative Agent's and Lenders' prior written consent; an application shall
be filed by any Borrower for the approval of any superpriority claim in the
Chapter 11 Case that is pari passu with or senior to the Obligations or any of
the Pre-Petition Debt or there shall arise or be granted any such pari passu or
superpriority claim; without the Administrative Agent's and the Majority
Lenders' consent, any Borrower shall discontinue or suspend all or any material
part of its business operations; the Pre-Petition Lender Protection Orders,
including provisions relating to the amount, timing and conditions to payment of
any Adequate Protection Claim or sharing of Net Proceeds of any Fixed Assets (as
defined therein), are modified, amended or supplemented without Administrative
48
Agent's consent, or Borrower's are in default of their obligations under either
of the Pre-Petition Lender Protection Orders; or the Final Financing Order shall
not have been entered by the Court on or prior to the 45th day after the Court's
entry of the Interim Financing Order.
(f) a Borrower or any material Subsidiary shall file a certificate of
dissolution under applicable state law or shall be liquidated, dissolved or
wound-up or shall commence or have commenced against it any action or proceeding
for dissolution, winding-up or liquidation, or shall take any corporate action
in furtherance thereof;
(g) all or any material part of the property of a Borrower or any of
its Subsidiaries shall be nationalized, expropriated or condemned, seized or
otherwise appropriated, or custody or control of such property or of the
Borrower or such Subsidiary shall be assumed by any Governmental Authority or
any court of competent jurisdiction at the instance of any Governmental
Authority, except where contested in good faith by proper proceedings diligently
pursued where a stay of enforcement is in effect;
(h) any DIP Financing Document shall be terminated, revoked or
declared void or invalid or unenforceable or challenged by any Borrower or any
other Obligor;
(i) one or more judgments, orders, decrees or arbitration awards is
entered against a Borrower involving in the aggregate liability (to the extent
not covered by independent third-party insurance as to which the insurer does
not dispute coverage) as to any single or related or unrelated series of
transactions, incidents or conditions, of $1,000,000 or more, and the same shall
remain unsatisfied, unvacated and unstayed pending appeal for a period of sixty
(60) days after the entry thereof;
(j) any loss, theft, damage or destruction of any item or items of
Collateral or other property of a Borrower or any Subsidiary occurs which could
reasonably be expected to cause a Material Adverse Effect and is not adequately
covered by insurance;
(k) there is filed against a Borrower or any of its Subsidiaries any
action, suit or proceeding under any federal or state racketeering statute
(including the Racketeer Influenced and Corrupt Organization Act of 1970), which
action, suit or proceeding (i) is not dismissed within one hundred twenty (120)
days, and (ii) could reasonably be expected to result in the confiscation or
forfeiture of any material portion of the Collateral;
(l) for any reason, any DIP Financing Document ceases to be in full
force and effect or any Lien with respect to any material portion of the
Collateral intended to be secured thereby ceases to be, or is not, valid,
perfected and prior to all other Liens (other than Permitted Liens) or is
terminated, revoked or declared void;
(m) an ERISA Event shall occur with respect to a Pension Plan or
Multi-employer Plan which could reasonably be expected to have a Material
Adverse Effect or which results in the imposition of a Lien on any Borrower's
assets;
49
(n) there occurs a Change of Control; or
(o) one or more License Agreements are terminated by a Borrower or
any other party to such License Agreement and (i) such termination could
reasonably be expected to have a Material Adverse Effect, or (ii) as a
consequence of such termination, neither the Borrowers nor the Administrative
Agent shall be entitled under the License Agreement or otherwise lawfully to
sell or otherwise dispose of the Inventory subject to such License Agreement.
9.2 Remedies.
(a) If a Default or an Event of Default exists, but subject at all
times to any limitations in the Financing Orders, the Administrative Agent may,
in its discretion, and shall, at the direction of the Supermajority Lenders, do
one or more of the following at any time or times and in any order: (i) reduce
the Maximum Revolver Amount, or the advance rates against Eligible Accounts
and/or Eligible Inventory used in computing the Borrowing Base, or reduce one or
more of the other elements used in computing the Borrowing Base; (ii) restrict
the amount of or refuse to make Revolving Loans; and (iii) restrict or refuse to
provide Letters of Credit or Credit Support. If an Event of Default exists, but
subject at all times to any limitations in the then applicable Financing Order,
the Administrative Agent shall, at the direction of the Supermajority Lenders,
do one or more of the following, in addition to the actions described in the
preceding sentence, at any time or times and in any order: (A) terminate the
Commitments and this Agreement; (B) declare any or all Obligations to be
immediately due and payable; provided, however, that upon the occurrence of any
Event of Default described in Sections 9.1(f), the Commitments shall
automatically and immediately expire and all Obligations shall automatically
become immediately due and payable without notice or demand of any kind; (C)
require the Borrowers to cash collateralize the aggregate undrawn face amount of
all outstanding Letters of Credit; and (D) pursue its other rights and remedies
under the DIP Financing Documents, the Financing Orders and applicable law.
(b) If an Event of Default has occurred and is continuing, but
subject at all times to any limitations in the Financing Orders: (i) the
Administrative Agent shall have for the benefit of the Lenders, in addition to
all other rights of the Administrative Agent and the Lenders, the rights and
remedies of a secured party under the DIP Financing Documents and the UCC; (ii)
the Administrative Agent may, at any time, take possession of the Collateral and
keep it on the Borrowers' premises, at no cost to the Administrative Agent or
any Lender, or remove any part of it to such other place or places as the
Administrative Agent may desire, or the Borrowers shall, upon the Administrative
Agent's demand, at the Borrowers' cost, assemble the Collateral and make it
available to the Administrative Agent at a place reasonably convenient to the
Administrative Agent; and (iii) the Administrative Agent may sell and deliver
any Collateral at public or private sales, for cash, upon credit or otherwise,
at such prices and upon such terms as the Administrative Agent deems advisable,
in its sole discretion, and may, if the Administrative Agent deems it
reasonable, postpone or adjourn any sale of the Collateral by an announcement at
the time and place of sale or of such postponed or adjourned sale without giving
a new notice of sale. Without in any way requiring notice to be given in the
following manner, the Borrowers agree that any notice by the Administrative
Agent of sale, disposition or other intended action hereunder or in connection
herewith, whether required by the UCC or otherwise, shall constitute reasonable
50
notice to the Borrowers if such notice is mailed by registered or certified
mail, return receipt requested, postage prepaid, or is delivered personally
against receipt, at least five (5) Business Days prior to such action to the
Borrowers' address specified in or pursuant to Section 13.8. If any Collateral
is sold on terms other than payment in full at the time of sale, no credit shall
be given against the Obligations until the Administrative Agent or the Lenders
receive payment, and if the buyer defaults in payment, the Administrative Agent
may resell the Collateral without further notice to any Borrower. In the event
the Administrative Agent seeks to take possession of all or any portion of the
Collateral by judicial process, the Borrowers irrevocably waive: (A) the posting
of any bond, surety or security with respect thereto which might otherwise be
required; (B) any demand for possession prior to the commencement of any suit or
action to recover the Collateral; and (C) any requirement that the
Administrative Agent retain possession and not dispose of any Collateral until
after trial or final judgment. The Borrowers agree that the Administrative Agent
has no obligation to preserve rights to the Collateral or marshal any Collateral
for the benefit of any Person. The Administrative Agent is hereby granted a
license or other right to use, without charge, the Borrowers' labels, patents,
copyrights, name, trade secrets, trade names, trademarks, and advertising
matter, or any similar property, in completing production of, advertising or
selling any Collateral, and the Borrowers' rights under all licenses and all
franchise agreements shall inure to the Administrative Agent's benefit for such
purpose. The proceeds of any sale shall be applied first to all expenses of
sale, including attorneys' fees, and then to the Obligations. The Administrative
Agent will return any excess to the Borrowers and the Borrowers shall remain
liable for any deficiency.
(c) If an Event of Default occurs, the Borrowers hereby waive all
rights to notice and hearing prior to the exercise by the Administrative Agent
of the Administrative Agent's rights to repossess the Collateral without
judicial process or to reply, attach or levy upon the Collateral without notice
or hearing, subject at all times to any limitations contained in the Financing
Orders and applicable law.
ARTICLE 10
TERM AND TERMINATION
--------------------
10.1 Term and Termination. The term of this Agreement shall end on
the last day of the DIP Term unless sooner terminated in accordance with the
terms hereof. The Administrative Agent may (and, upon direction from the
Supermajority Lenders, shall) terminate this Agreement (and the DIP Facility and
the Commitments thereunder) without notice upon the occurrence of an Event of
Default. Upon the effective date of termination of this Agreement (and the DIP
Facility and the Commitments thereunder) for any reason whatsoever, all
Obligations (including all unpaid principal, accrued and unpaid interest and any
early termination or prepayment fees or penalties) shall become immediately due
and payable and the Borrowers shall immediately arrange for the cancellation and
return of Letters of Credit then outstanding. Notwithstanding the termination of
this Agreement (and the DIP Facility and the Commitments thereunder), until Full
Payment of the Obligations, the Borrowers shall remain bound by the terms of
this Agreement and shall not be relieved of any of its Obligations hereunder or
under any other DIP Financing Document, and the Administrative Agent and the
Lenders shall retain all their rights and remedies hereunder (including the
Administrative Agent's Liens in and all rights and remedies with respect to all
then existing and after-arising Collateral).
51
ARTICLE 11
AMENDMENTS; WAIVERs; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
------------------------------------------------------------
11.1 Amendments and Waivers.
(a) No amendment or waiver of any provision of this Agreement or any
other DIP Financing Document, and no consent with respect to any departure by a
Borrower therefrom, shall be effective unless the same shall be in writing and
signed by the Majority Lenders (or by the Administrative Agent at the written
request of the Majority Lenders) and the Borrowers, and then any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such waiver, amendment, or
consent shall, unless in writing and signed by all the Lenders and the Borrowers
and acknowledged by the Administrative Agent, do any of the following:
(i) increase or extend the Commitment of any Lender;
(ii) postpone or delay any date fixed by this Agreement or any
other DIP Financing Document for any payment of principal, interest,
fees or other amounts due to the Lenders (or any of them) hereunder or
under any other DIP Financing Document;
(iii) reduce the principal of, or the rate of interest specified
herein on any Loan, or any fees or other amounts payable hereunder or
under any other DIP Financing Document;
(iv) increase any of the percentages set forth in the definitions
of Accounts Formula Amount or Inventory Formula Amount;
(v) amend this Section or any provision of this Agreement
providing for consent or other action by all Lenders;
(vi) release Collateral other than as permitted by Section 12.11
or any of the Security Documents;
(vii) change the definitions of "Majority Lenders" or
"Supermajority Lenders";
(viii) increase the Maximum Revolver Amount or the Letter of
Credit Subfacility; or
(ix) amend Section 1.2(j) (other than to increase the dollar
amounts shown therein, which may be amended by vote of the Majority
Lenders).
provided, however, the Administrative Agent may, in its sole discretion and
notwithstanding the limitations contained in clauses (v) and (viii) above and
any other terms of this Agreement, make Agent Advances in accordance with
Section 1.2(j) and, provided further, that no amendment, waiver or consent
shall, unless in writing and signed by the Administrative Agent, affect the
rights, duties, powers or discretion of the Administrative Agent under this
52
Agreement or any other DIP Financing Document or any indemnities in favor of the
Administrative Agent and provided further, that Schedule 1.2 hereto
(Commitments) may be amended from time to time by Administrative Agent alone to
reflect assignments of Commitments in accordance herewith.
(b) If any fees are paid to the Lenders as consideration for
amendments, waivers or consents with respect to this Agreement, at
Administrative Agent's election, such fees may be paid only to those Lenders
that agree to such amendments, waivers or consents within the time specified for
submission thereof.
(c) If, in connection with any proposed amendment, waiver or consent
(a "Proposed Change"):
(i) requiring the consent of all Lenders, the consent of
Supermajority Lenders is obtained, but the consent of other Lenders is
not obtained (any such Lender whose consent is not obtained as
described in this clause (i) and in clause (ii) below being referred
to as a "Non-Consenting Lender"), or
(ii) requiring the consent of Supermajority Lenders, the consent
of Majority Lenders is obtained,
then, so long as the Administrative Agent is not a Non-Consenting Lender, at the
Borrowers' request, the Administrative Agent or an Eligible Assignee shall have
the right (but not the obligation) with the Administrative Agent's approval, to
purchase from the Non-Consenting Lenders, and the Non-Consenting Lenders agree
that they shall sell, all the Non-Consenting Lenders' Commitments for an amount
equal to the principal balances thereof and all accrued interest and fees with
respect thereto through the date of sale pursuant to Assignment and Acceptance
Agreement(s), without premium or discount.
11.2 Assignments; Participations.
(a) Any Lender may, with the written consent of the Administrative
Agent (which consent shall not be unreasonably withheld), assign and delegate to
one or more Eligible Assignees (provided that no consent of the Administrative
Agent shall be required in connection with any assignment and delegation by a
Lender to an Affiliate of such Lender) (each an "Assignee") all, or any ratable
part of all, of the Loans, the Commitments and the other rights and obligations
of such Lender hereunder, in a minimum amount of $2,500,000 (provided that,
unless an assignor Lender has assigned and delegated all of its Loans and
Commitments, no such assignment and/or delegation shall be permitted unless,
after giving effect thereto, such assignor Lender retains a Commitment in a
minimum amount of $2,500,000; provided, however, that the Borrowers and the
Administrative Agent may continue to deal solely and directly with such Lender
in connection with the interest so assigned to an Assignee until (i) written
notice of such assignment, together with payment instructions, addresses and
related information with respect to the Assignee, shall have been given to the
Borrowers and the Administrative Agent by such Lender and the Assignee; (ii)
such Lender and its Assignee shall have delivered to the Borrowers and the
Administrative Agent an Assignment and Acceptance in the form of Exhibit F
("Assignment and Acceptance"); and (iii) the assignor Lender or Assignee has
paid to the Administrative Agent a processing fee in the amount of $4,000.
53
(b) From and after the date that the Administrative Agent notifies
the assignor Lender that it has received an executed Assignment and Acceptance
and payment of the above-referenced processing fee, (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations,
including, but not limited to, the obligation to participate in Letters of
Credit and Credit Support have been assigned to it pursuant to such Assignment
and Acceptance, shall have the rights and obligations of a Lender under the DIP
Financing Documents, and (ii) the assignor Lender shall, to the extent that
rights and obligations hereunder and under the other DIP Financing Documents
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement (and in the
case of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other DIP Financing Document
furnished pursuant hereto or the attachment, perfection, or priority of any Lien
granted by the Borrowers to the Administrative Agent or any Lender in the
Collateral; (ii) such assigning Lender 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 their
obligations under this Agreement or any other DIP Financing Document furnished
pursuant hereto; (iii) such Assignee confirms that it has received a copy of
this Agreement, together with such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such Assignee will, independently and
without reliance upon the Administrative Agent, such assigning Lender or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (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 hereof, together with such powers, including
the discretionary rights and incidental power, as are reasonably incidental
thereto; and (vi) such Assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) Immediately upon satisfaction of the requirements of Section
11.2(a), this Agreement shall be deemed to be amended to the extent, but only to
the extent, necessary to reflect the addition of the Assignee and the resulting
adjustment of the Commitments arising therefrom. The Commitment allocated to
each Assignee shall reduce such Commitments of the assigning Lender pro tanto.
(e) Any Lender may at any time sell to one or more commercial banks,
financial institutions, or other Persons not Affiliates of the Borrowers (a
"Participant") participating interests in any Loans, the Commitment of that
Lender and the other interests of that Lender (the "originating Lender")
54
hereunder and under the other DIP Financing Documents; provided, however, that
(i) the originating Lender's obligations under this Agreement shall remain
unchanged, (ii) the originating Lender shall remain solely responsible for the
performance of such obligations, (iii) the Borrowers and the Administrative
Agent shall continue to deal solely and directly with the originating Lender in
connection with the originating Lender's rights and obligations under this
Agreement and the other DIP Financing Documents, and (iv) no Lender shall
transfer or grant any participating interest under which the Participant has
rights to approve any amendment to, or any consent or waiver with respect to,
this Agreement or any other DIP Financing Document except the matters set forth
in Sections 11.1(a) (i), (ii) and (iii), and all amounts payable by the
Borrowers hereunder shall be determined as if such Lender had not sold such
participation; except that, if amounts outstanding under this Agreement are due
and unpaid, or shall have become due and payable upon the occurrence of an Event
of Default, each Participant shall be deemed to have the right of set-off in
respect of its participating interest in amounts owing under this Agreement to
the same extent and subject to the same limitation as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement.
(f) Notwithstanding any other provision in this Agreement, any Lender
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement in favor of any Federal Reserve
Bank in accordance with Regulation A of the FRB or U.S. Treasury Regulation 31
CFR ss.203.14, and such Federal Reserve Bank may enforce such pledge or security
interest in any manner permitted under applicable law.
ARTICLE 12
THE ADMINISTRATIVE AGENT
------------------------
12.1 Appointment and Authorization. Each Lender hereby designates and
appoints Bank of America as the Administrative Agent under this Agreement and
the other DIP Financing Documents and each Lender hereby irrevocably authorizes
the Administrative Agent to take such action on its behalf under the provisions
of this Agreement, each other DIP Financing Document and the Financing Orders
and to exercise such powers and perform such duties as are expressly delegated
to it by the terms of this Agreement, any other DIP Financing Document and the
Financing Orders, together with such powers as are reasonably incidental
thereto. The Administrative Agent agrees to act as such on the express
conditions contained in this Article 12. The provisions of this Article 12 are
solely for the benefit of the Administrative Agent and the Lenders and the
Borrowers shall have no rights as a third party beneficiary of any of the
provisions contained herein. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other DIP Financing Document,
the Administrative Agent shall not have any duties or responsibilities, except
those expressly set forth herein, nor shall the Administrative Agent have or be
deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other DIP Financing Document or otherwise
exist against the Administrative Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with reference
to the Administrative Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any applicable
law. Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship between
55
independent contracting parties. Except as expressly otherwise provided in this
Agreement, the Administrative Agent shall have and may use its sole discretion
with respect to exercising or refraining from exercising any discretionary
rights or taking or refraining from taking any actions which the Administrative
Agent is expressly entitled to take or assert under this Agreement and the other
DIP Financing Documents, including (a) the determination of the applicability of
ineligibility criteria with respect to the calculation of the Borrowing Base,
(b) the making of Agent Advances pursuant to Section 1.2(i), and (c) the
exercise of remedies pursuant to Section 9.2, and any action so taken or not
taken shall be deemed consented to by the Lenders.
12.2 Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement or any other DIP Financing Document by or
through agents, employees or attorneys-in-fact and shall be entitled to advice
of counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects as long as such selection was made without
gross negligence or willful misconduct.
12.3 Liability of Administrative Agent. None of the Administrative
Agent-Related Persons shall (i) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other DIP
Financing Document or the transactions contemplated hereby (except for its own
gross negligence or willful misconduct), or (ii) be responsible in any manner to
any of the Lenders for any recital, statement, representation or warranty made
by the Borrowers or any Subsidiary or Affiliate of the Borrowers, or any officer
thereof, contained in this Agreement or in any other DIP Financing Document, or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Administrative Agent under or in connection with,
this Agreement or any other DIP Financing Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other DIP Financing Document, or for any failure of the Borrowers or any
other party to any DIP Financing Document to perform its obligations hereunder
or thereunder. No Administrative Agent-Related Person shall be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other DIP Financing Document, or to inspect the properties,
books or records of the Borrowers or any of the Borrowers' Subsidiaries or
Affiliates.
12.4 Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to the Borrower), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other DIP Financing Document unless it shall first receive such
advice or concurrence of the Supermajority Lenders as it deems appropriate and,
if it so requests, it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other DIP Financing Document in accordance with a
request or consent of the Supermajority Lenders (or all Lenders if so required
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by Section 11.1) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
12.5 Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default, unless the Administrative Agent shall have received written notice from
a Lender or a Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default." The
Administrative Agent will notify the Lenders of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be requested by the Supermajority Lenders in accordance
with Section 9; provided, however, that unless and until the Administrative
Agent has received any such request, the Administrative Agent may (but shall not
be obligated to) continue to make Revolving Loans to the Borrowers on behalf of
the Lenders in reliance on the provisions of Section 12.15 and take such other
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable.
12.6 Credit Decision. Each Lender acknowledges that none of the
Administrative Agent-Related Persons has made any representation or warranty to
it, and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Borrowers and their Affiliates, shall be deemed to
constitute any representation or warranty by any Administrative Agent-Related
Person to any Lender. Each Lender represents to the Administrative Agent that it
has, independently and without reliance upon any Administrative Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Borrowers and their Affiliates, and all applicable bankruptcy and bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to the Borrowers.
Each Lender also represents that it will, independently and without reliance
upon any Administrative Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other DIP Financing Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrowers. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the
Administrative Agent, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Borrower which may come into the possession
of any of the Administrative Agent-Related Persons.
12.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the
Administrative Agent-Related Persons (to the extent not reimbursed by or on
behalf of the Borrower and without limiting the obligation of the Borrowers to
do so), in accordance with their Pro Rata Shares, from and against any and all
Indemnified Liabilities as such term is defined in Section 13.11; provided,
however, that no Lender shall be liable for the payment to the Administrative
Agent-Related Persons of any portion of such Indemnified Liabilities resulting
solely from such Person's gross negligence or willful misconduct. Without
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limitation of the foregoing, each Lender shall reimburse the Administrative
Agent upon demand for its Pro Rata Share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other DIP Financing Document, or any document contemplated
by or referred to herein, to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Borrower. The undertaking in
this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of the Administrative Agent.
12.8 Administrative Agent in Individual Capacity. The Bank of America
and its Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and generally engage in
any kind of banking, trust, financial advisory, underwriting or other business
with the Borrowers and their Subsidiaries and Affiliates as though Bank of
America were not the Administrative Agent hereunder and without notice to or
consent of the Lenders. The Bank of America or its Affiliates may receive
information regarding the Borrowers, their Affiliates and Account Debtors
(including information that may be subject to confidentiality obligations in
favor of the Borrowers or such Subsidiary) and acknowledge that the
Administrative Agent and Bank of America shall be under no obligation to provide
such information to them. With respect to its Loans, Bank of America shall have
the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Administrative Agent, and the terms
"Lender" and "Lenders" include Bank of America in its individual capacity.
12.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon at least thirty (30) days prior notice to
the Lenders and the Borrowers, such resignation to be effective upon the
acceptance of a successor agent to its appointment as Administrative Agent. In
the event Bank of America sells all of its Commitment and Revolving Loans as
part of a sale, transfer or other disposition by Bank of America of
substantially all of its loan portfolio, Bank of America shall resign as
Administrative Agent and such purchaser or transferee shall become the successor
Administrative Agent hereunder. Subject to the foregoing, if the Administrative
Agent resigns under this Agreement, the Majority Lenders shall appoint from
among the Lenders a successor agent for the Lenders. If no successor agent is
appointed prior to the effective date of the resignation of the Administrative
Agent, the Administrative Agent may appoint, after consulting with the Lenders
and the Borrowers, a successor agent from among the Lenders. Upon the acceptance
of its appointment as successor agent hereunder, such successor agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent and the term "Administrative Agent" shall mean such successor agent and
the retiring Administrative Agent's appointment, powers and duties as
Administrative Agent shall be terminated. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Article 12 shall continue to inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement.
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12.10 Withholding Tax.
(a) If any Lender is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Lender claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such
Lender agrees with and in favor of the Administrative Agent, to deliver to the
Administrative Agent:
(i) if such Lender claims an exemption from, or a reduction of,
withholding tax under a United States of America tax treaty, properly
completed IRS Forms W-8BEN and W-8ECI before the payment of any
interest in the first calendar year and before the payment of any
interest in each third succeeding calendar year during which interest
may be paid under this Agreement;
(ii) if such Lender claims that interest paid under this
Agreement is exempt from United States of America withholding tax
because it is effectively connected with a United States of America
trade or business of such Lender, two properly completed and executed
copies of IRS Form W-8ECI before the payment of any interest is due in
the first taxable year of such Lender and in each succeeding taxable
year of such Lender during which interest may be paid under this
Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the Code
or other laws of the United States of America as a condition to
exemption from, or reduction of, United States of America withholding
tax.
Such Lender agrees to promptly notify the Administrative Agent of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Lender claims exemption from, or reduction of, withholding
tax under a United States of America tax treaty by providing IRS Form FW-8BEN
and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations owing to such Lender, such Lender
agrees to notify the Administrative Agent of the percentage amount in which it
is no longer the beneficial owner of Obligations of the Borrower to such Lender.
To the extent of such percentage amount, the Administrative Agent will treat
such Lender's IRS Form W-8BEN as no longer valid.
(c) If any Lender claiming exemption from United States of America
withholding tax by filing IRS Form W-8ECI with the Administrative Agent sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations owing to such Lender, such Lender agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Administrative Agent may withhold from any interest payment
to such Lender an amount equivalent to the applicable withholding tax after
taking into account such reduction. If the forms or other documentation required
by subsection (a) of this Section are not delivered to the Administrative Agent,
then the Administrative Agent may withhold from any interest payment to such
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Lender not providing such forms or other documentation an amount equivalent to
the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United
States of America or other jurisdiction asserts a claim that the Administrative
Agent did not properly withhold tax from amounts paid to or for the account of
any Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify the Administrative Agent of a
change in circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Lender shall
indemnify the Administrative Agent fully for all amounts paid, directly or
indirectly, by the Administrative Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Administrative Agent under this Section, together with all costs
and expenses (including Attorney Costs). The obligation of the Lenders under
this subsection shall survive the payment of all Obligations and the resignation
or replacement of the Administrative Agent.
12.11 Collateral Matters.
(a) The Lenders hereby irrevocably authorize the Administrative
Agent, at its option and in its sole discretion, to release any Administrative
Agent's Liens upon any Collateral (i) upon the termination of the Commitments
and Full Payment of all Loans and reimbursement obligations in respect of
Letters of Credit and Credit Support, and the termination of all outstanding
Letters of Credit (whether or not any of such obligations are due) and all other
Obligations; (ii) constituting property being sold or disposed of if the
Borrowers certify to the Administrative Agent that the sale or disposition is
made in compliance with Section 7.9 (and the Administrative Agent may rely
conclusively on any such certificate, without further inquiry); (iii)
constituting property leased to a Borrower under a lease which has expired or
been terminated in a transaction permitted under this Agreement; or (iv)
constituting Net Proceeds required to be shared with the Pre-Petition Lenders
pursuant to the Pre-Petition Lender Protection Orders. Except as provided above,
the Administrative Agent will not release any of the Administrative Agent's
Liens without the prior written authorization of the Lenders; provided that the
Administrative Agent may, in its discretion, release the Administrative Agent's
Liens on Collateral valued in the aggregate not in excess of $500,000 during
each Fiscal Year without the prior written authorization of the Lenders and the
Administrative Agent may release the Administrative Agent's Liens on Collateral
valued in the aggregate not in excess of $1,000,000 during each Fiscal Year with
the prior written authorization of the Majority Lenders. Upon request by the
Administrative Agent or the Borrowers at any time, the Lenders will confirm in
writing the Administrative Agent's authority to release any Administrative
Agent's Liens upon particular types or items of Collateral pursuant to this
Section 12.11.
(b) Upon receipt by the Administrative Agent of any authorization
required pursuant to Section 12.11(a) from the Lenders of the Administrative
Agent's authority to release Administrative Agent's Liens upon particular types
or items of Collateral, and upon at least five (5) Business Days prior written
request by the Borrowers, the Administrative Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Administrative Agent's Liens upon such
Collateral; provided, however, that (i) the Administrative Agent shall not be
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required to execute any such document on terms which, in the Administrative
Agent's opinion, would expose the Administrative Agent to liability or create
any obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of the Borrowers in respect of)
all interests retained by the Borrowers, including the proceeds of any sale, all
of which shall continue to constitute part of the Collateral.
(c) The Administrative Agent shall have no obligation whatsoever to
any of the Lenders to assure that the Collateral exists or is owned by the
Borrowers or is cared for, protected or insured or has been encumbered, or that
the Administrative Agent's Liens have been properly or sufficiently or lawfully
created, perfected, protected or enforced or are entitled to any particular
priority, or to exercise at all or in any particular manner or under any duty of
care, disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to the Administrative Agent pursuant
to any of the DIP Financing Documents, it being understood and agreed that in
respect of the Collateral, or any act, omission or event related thereto, the
Administrative Agent may act in any manner it may deem appropriate, in its sole
discretion given the Administrative Agent's own interest in the Collateral in
its capacity as one of the Lenders and that the Administrative Agent shall have
no other duty or liability whatsoever to any Lender as to any of the foregoing.
12.12 Restrictions on Actions by Lenders; Sharing of Payments.
(a) Each of the Lenders agrees that it shall not, without the express
consent of all Lenders, and that it shall, to the extent it is lawfully entitled
to do so, upon the request of all Lenders, set off against the Obligations, any
amounts owing by such Lender to the Borrowers or any accounts of the Borrowers
now or hereafter maintained with such Lender. Each of the Lenders further agrees
that it shall not, unless specifically requested to do so by the Administrative
Agent, take or cause to be taken any action to enforce its rights under this
Agreement or against the Borrowers, including the commencement of any legal or
equitable proceedings, to foreclose any Lien on, or otherwise enforce any
security interest in, any of the Collateral.
(b) If at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations of the Borrower to such Lender arising under, or
relating to, this Agreement or the other DIP Financing Documents, except for any
such proceeds or payments received by such Lender from the Administrative Agent
pursuant to the terms of this Agreement, or (ii) payments from the
Administrative Agent in excess of such Lender's ratable portion of all such
distributions by the Administrative Agent, such Lender shall promptly (1) turn
the same over to the Administrative Agent, in kind, and with such endorsements
as may be required to negotiate the same to the Administrative Agent, or in same
day funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable provisions of
this Agreement, or (2) purchase, without recourse or warranty, an undivided
interest and participation in the Obligations owed to the other Lenders so that
such excess payment received shall be applied ratably as among the Lenders in
accordance with their Pro Rata Shares; provided, however, that if all or part of
such excess payment received by the purchasing party is thereafter recovered
from it, those purchases of participations shall be rescinded in whole or in
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part, as applicable, and the applicable portion of the purchase price paid
therefor shall be returned to such purchasing party, but without interest except
to the extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
12.13 Agency for Perfection. Each Lender hereby appoints each other
Lender as agent for the purpose of perfecting the Lenders' security interest in
assets which, in accordance with Article 9 of the UCC can be perfected only by
possession. Should any Lender (other than the Administrative Agent) obtain
possession of any such Collateral, such Lender shall notify the Administrative
Agent thereof, and, promptly upon the Administrative Agent's request therefor
shall deliver such Collateral to the Administrative Agent or in accordance with
the Administrative Agent's instructions.
12.14 Payments by Administrative Agent to Lenders. All payments to be
made by the Administrative Agent to the Lenders shall be made by bank wire
transfer or internal transfer of immediately available funds to each Lender
pursuant to wire transfer instructions delivered in writing to the
Administrative Agent on or prior to the Closing Date (or if such Lender is an
Assignee, on the applicable Assignment and Acceptance), or pursuant to such
other wire transfer instructions as each party may designate for itself by
written notice to the Administrative Agent. Concurrently with each such payment,
the Administrative Agent shall identify whether such payment (or any portion
thereof) represents principal, premium or interest on the Revolving Loans or
otherwise. Unless the Administrative Agent receives notice from the Borrowers
prior to the date on which any payment is due to the Lenders that the Borrowers
will not make such payment in full as and when required, the Administrative
Agent may assume that the Borrowers have made such payment in full to the
Administrative Agent on such date in immediately available funds and the
Administrative Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrowers have not made
such payment in full to the Administrative Agent, each Lender shall repay to the
Administrative Agent on demand such amount distributed to such Lender, together
with interest thereon at the Federal Funds Rate for each day from the date such
amount is distributed to such Lender until the date repaid.
12.15 Settlement.
(a) (i) Each Lender's funded portion of the Revolving Loans is
intended by the Lenders to be equal at all times to such Lender's Pro Rata Share
of the outstanding Revolving Loans. Notwithstanding such agreement, the
Administrative Agent, Bank of America, and the other Lenders agree (which
agreement shall not be for the benefit of or enforceable by the Borrowers) that
in order to facilitate the administration of this Agreement and the other DIP
Financing Documents, settlement among them as to the Revolving Loans, the
Non-Ratable Loans and the Agent Advances shall take place on a periodic basis in
accordance with the following provisions:
(ii) The Administrative Agent shall request settlement
("Settlement") with the Lenders on at least a weekly basis, or on a
more frequent basis at Administrative Agent's election, (A) on behalf
of Bank of America, with respect to each outstanding Non-Ratable Loan,
(B) for itself, with respect to each Agent Advance, and (C) with
respect to collections received, in each case, by notifying the
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Lenders of such requested Settlement by telecopy, telephone or other
similar form of transmission, of such requested Settlement, no later
than 12:00 noon (Atlanta, Georgia time) on the date of such requested
Settlement (the "Settlement Date"). Each Lender (other than Bank of
America, in the case of Non-Ratable Loans and the Administrative Agent
in the case of Agent Advances) shall transfer the amount of such
Lender's Pro Rata Share of the outstanding principal amount of the
Non-Ratable Loans and Agent Advances with respect to each Settlement
to the Administrative Agent, to Administrative Agent's account, not
later than 2:00 p.m. (Atlanta, Georgia time), on the Settlement Date
applicable thereto. Settlements may occur during the continuation of a
Default or an Event of Default and whether or not the applicable
conditions precedent set forth in Article 8 have then been satisfied.
Such amounts made available to the Administrative Agent shall be
applied against the amounts of the applicable Non-Ratable Loan or
Agent Advance and, together with the portion of such Non-Ratable Loan
or Agent Advance representing Bank of America's Pro Rata Share
thereof, shall constitute Revolving Loans of such Lenders. If any such
amount is not transferred to the Administrative Agent by any Lender on
the Settlement Date applicable thereto, the Administrative Agent shall
be entitled to recover such amount on demand from such Lender together
with interest thereon at the Federal Funds Rate for the first three
(3) days from and after the Settlement Date and thereafter at the
Interest Rate then applicable to the Revolving Loans (A) on behalf of
Bank of America, with respect to each outstanding Non-Ratable Loan,
and (B) for itself, with respect to each Agent Advance.
(iii) Notwithstanding the foregoing, not more than one (1)
Business Day after demand is made by the Administrative Agent (whether
before or after the occurrence of a Default or an Event of Default and
regardless of whether the Administrative Agent has requested a
Settlement with respect to a Non-Ratable Loan or Agent Advance), each
other Lender (A) shall irrevocably and unconditionally purchase and
receive from Bank of America or the Administrative Agent, as
applicable, without recourse or warranty, an undivided interest and
participation in such Non-Ratable Loan or Agent Advance equal to such
Lender's Pro Rata Share of such Non-Ratable Loan or Agent Advance and
(B) if Settlement has not previously occurred with respect to such
Non-Ratable Loans or Agent Advances, upon demand by Bank of America or
Administrative Agent, as applicable, shall pay to Bank of America or
Administrative Agent, as applicable, as the purchase price of such
participation an amount equal to one-hundred percent (100%) of such
Lender's Pro Rata Share of such Non-Ratable Loans or Agent Advances.
If such amount is not in fact made available to the Administrative
Agent by any Lender, the Administrative Agent shall be entitled to
recover such amount on demand from such Lender together with interest
thereon at the Federal Funds Rate for the first three (3) days from
and after such demand and thereafter at the Interest Rate then
applicable to Base Rate Revolving Loans.
(iv) From and after the date, if any, on which any Lender
purchases an undivided interest and participation in any Non-Ratable
Loan or Agent Advance pursuant to clause (iii) above, the
Administrative Agent shall promptly distribute to such Lender, such
Lender's Pro Rata Share of all payments of principal and interest and
all proceeds of Collateral received by the Administrative Agent in
respect of such Non-Ratable Loan or Agent Advance.
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(v) Between Settlement Dates, the Administrative Agent, to the
extent no Agent Advances are outstanding, may pay over to Bank of
America any payments received by the Administrative Agent, which in
accordance with the terms of this Agreement would be applied to the
reduction of the Revolving Loans, for application to Bank of America's
Revolving Loans including Non-Ratable Loans. If, as of any Settlement
Date, collections received since the then immediately preceding
Settlement Date have been applied to Bank of America's Revolving Loans
(other than to Non-Ratable Loans or Agent Advances in which such
Lender has not yet funded its purchase of a participation pursuant to
clause (iii) above), as provided for in the previous sentence, Bank of
America shall pay to the Administrative Agent for the accounts of the
Lenders, to be applied to the outstanding Revolving Loans of such
Lenders, an amount such that each Lender shall, upon receipt of such
amount, have, as of such Settlement Date, its Pro Rata Share of the
Revolving Loans. During the period between Settlement Dates, Bank of
America with respect to Non-Ratable Loans, the Administrative Agent
with respect to Agent Advances, and each Lender with respect to the
Revolving Loans other than Non-Ratable Loans and Agent Advances, shall
be entitled to interest at the applicable rate or rates payable under
this Agreement on the actual average daily amount of funds employed by
Bank of America, the Administrative Agent and the other Lenders.
(vi) Unless the Administrative Agent has received written notice
from a Lender to the contrary, the Administrative Agent may assume
that the applicable conditions precedent set forth in Article 8 have
been satisfied and the requested Borrowing will not exceed
Availability on any Funding Date for a Revolving Loan or Non-Ratable
Loan.
(b) Lenders' Failure to Perform. All Revolving Loans (other than
Non-Ratable Loans and Agent Advances) shall be made by the Lenders
simultaneously and in accordance with their Pro Rata Shares. It is understood
that (i) no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Revolving Loans hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligation to make any Revolving Loans
hereunder, (ii) no failure by any Lender to perform its obligation to make any
Revolving Loans hereunder shall excuse any other Lender from its obligation to
make any Revolving Loans hereunder, and (iii) the obligations of each Lender
hereunder shall be several, not joint and several.
(c) Defaulting Lenders. Notwithstanding the occurrence or continuance
of a Default or Event of Default or other failure of any condition to the making
of Revolving Loans hereunder, unless the Administrative Agent receives notice
from a Lender on or prior to the Closing Date or, with respect to any Borrowing
after the Closing Date, at least one Business Day prior to the date of such
Borrowing, that such Lender will not make available as and when required
hereunder to the Administrative Agent that Lender's Pro Rata Share of a
Borrowing, the Administrative Agent may assume that each Lender has made such
amount available to the Administrative Agent in immediately available funds on
the Funding Date. Furthermore, the Administrative Agent may, in reliance upon
such assumption, make available to the Borrowers on such date a corresponding
amount. If any Lender has not transferred its full Pro Rata Share to the
Administrative Agent in immediately available funds and the Administrative Agent
has transferred corresponding amount to the Borrowers on the Business Day
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following such Funding Date that Lender shall make such amount available to the
Administrative Agent, together with interest at the Federal Funds Rate for that
day. A notice by the Administrative Agent submitted to any Lender with respect
to amounts owing shall be conclusive, absent manifest error. If each Lender's
full Pro Rata Share is transferred to the Administrative Agent as required, the
amount transferred to the Administrative Agent shall constitute that Lender's
Revolving Loan for all purposes of this Agreement. If that amount is not
transferred to the Administrative Agent on the Business Day following the
Funding Date, the Administrative Agent will notify the Borrowers of such failure
to fund and, upon demand by the Administrative Agent, the Borrowers shall pay
such amount to the Administrative Agent for the Administrative Agent's account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the Interest Rate applicable at the time
to the Revolving Loans comprising that particular Borrowing. The failure of any
Lender to make any Revolving Loan on any Funding Date (any such Lender, prior to
the cure of such failure, being hereinafter referred to as a "Defaulting
Lender") shall not relieve any other Lender of its obligation hereunder to make
a Revolving Loan on that Funding Date. No Lender shall be responsible for any
other Lender's failure to advance such other Lenders' Pro Rata Share of any
Borrowing.
(d) Retention of Defaulting Lender's Payments. The Administrative
Agent shall not be obligated to transfer to a Defaulting Lender any payments
made by Borrowers to the Administrative Agent for the Defaulting Lender's
benefit; nor shall a Defaulting Lender be entitled to the sharing of any
payments hereunder. Amounts payable to a Defaulting Lender shall instead be paid
to or retained by the Administrative Agent. In its discretion, the
Administrative Agent may loan Borrowers the amount of all such payments received
or retained by it for the account of such Defaulting Lender. Any amounts so
loaned to the Borrowers shall bear interest at the rate applicable to Base Rate
Revolving Loans and for all other purposes of this Agreement shall be treated as
if they were Revolving Loans, provided, however, that for purposes of voting or
consenting to matters with respect to the DIP Financing Documents and
determining Pro Rata Shares, such Defaulting Lender shall be deemed not to be a
"Lender." Until a Defaulting Lender cures its failure to fund its Pro Rata Share
of any Borrowing (A) such Defaulting Lender shall not be entitled to any portion
of the Unused Line Fee and (B) the Unused Line Fee shall accrue in favor of the
Lenders which have funded their respective Pro Rata Shares of such requested
Borrowing and shall be allocated among such performing Lenders ratably based
upon their relative Commitments. This Section shall remain effective with
respect to such Lender until such time as the Defaulting Lender shall no longer
be in default of any of its obligations under this Agreement. The terms of this
Section shall not be construed to increase or otherwise affect the Commitment of
any Lender, or relieve or excuse the performance by the Borrowers of their
duties and obligations hereunder.
(e) Removal of Defaulting Lender. At the Borrowers' request, the
Administrative Agent or an Eligible Assignee reasonably acceptable to the
Administrative Agent and the Borrowers shall have the right (but not the
obligation) to purchase from any Defaulting Lender, and each Defaulting Lender
shall, upon such request, sell and assign to the Administrative Agent or such
Eligible Assignee, all of the Defaulting Lender's outstanding Commitments
hereunder. Such sale shall be consummated promptly after Administrative Agent
has arranged for a purchase by Administrative Agent or an Eligible Assignee
pursuant to an Assignment and Acceptance, and at a price equal to the
outstanding principal balance of the Defaulting Lender's Loans, plus accrued
interest and fees, without premium or discount.
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12.16 Letters of Credit; Intra-Lender Issues.
(a) Notice of Letter of Credit Balance. On each Settlement Date the
Administrative Agent shall notify each Lender of the issuance of all Letters of
Credit since the prior Settlement Date.
(b) Participations in Letters of Credit.
(i) Purchase of Participations. Immediately upon issuance of any
Letter of Credit in accordance with Section 1.3(d), each Lender shall
be deemed to have irrevocably and unconditionally purchased and
received without recourse or warranty, an undivided interest and
participation equal to such Lender's Pro Rata Share of the face amount
of such Letter of Credit or the Credit Support provided through the
Administrative Agent to the Letter of Credit Issuer, if not Bank of
America, in connection with the issuance of such Letter of Credit
(including all obligations of the Borrowers with respect thereto, and
any security therefore or guaranty pertaining thereto).
(ii) Sharing of Reimbursement Obligation Payments. Whenever the
Administrative Agent receives a payment from the Borrowers on account
of reimbursement obligations in respect of a Letter of Credit or
Credit Support as to which the Administrative Agent has previously
received for the account of the Letter of Credit Issuer thereof
payment from a Lender, the Administrative Agent shall promptly pay to
such Lender such Lender's Pro Rata Share of such payment from the
Borrowers. Each such payment shall be made by the Administrative Agent
on the next Settlement Date.
(iii) Documentation. Upon the request of any Lender, the
Administrative Agent shall furnish to such Lender copies of any Letter
of Credit, Credit Support for any Letter of Credit, reimbursement
agreements executed in connection therewith, applications for any
Letter of Credit, and such other documentation as may reasonably be
requested by such Lender.
(iv) Obligations Irrevocable. The obligations of each Lender to
make payments to the Administrative Agent with respect to any Letter
of Credit or with respect to their participation therein or with
respect to any Credit Support for any Letter of Credit or with respect
to the Revolving Loans made as a result of a drawing under a Letter of
Credit and the obligations of the Borrowers for whose account the
Letter of Credit or Credit Support was issued to make payments to the
Administrative Agent, for the account of the Lenders, shall be
irrevocable and shall not be subject to any qualification or exception
whatsoever, including any of the following circumstances:
(1) any lack of validity or enforceability of this Agreement
or any of the other DIP Financing Documents;
(2) the existence of any claim, setoff, defense or other
right which a Borrower may have at any time against a beneficiary
66
named in a Letter of Credit or any transferee of any Letter of
Credit (or any Person for whom any such transferee may be
acting), any Lender, the Administrative Agent, the issuer of such
Letter of Credit, or any other Person, whether in connection with
this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any
underlying transactions between such Borrower or any other Person
and the beneficiary named in any Letter of Credit);
(3) any draft, certificate or any other document presented
under the Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;
(4) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the DIP
Financing Documents;
(5) the occurrence of any Default or Event of Default; or
(6) the failure of the Borrowers to satisfy the applicable
conditions precedent set forth in Article 8.
(c) Recovery or Avoidance of Payments; Refund of Payments In Error.
In the event any payment by or on behalf of any Obligor or by any Account Debtor
is received by the Administrative Agent with respect to any of the Obligations
and distributed by the Administrative Agent to the Lenders on account of their
respective participations therein and is thereafter set aside, avoided or
recovered from the Administrative Agent in connection with any receivership,
liquidation or bankruptcy proceeding, the Lenders shall, upon demand by the
Administrative Agent, pay to the Administrative Agent their respective Pro Rata
Shares of such amount set aside, avoided or recovered, together with interest at
the rate required to be paid by the Administrative Agent upon the amount
required to be repaid by it. Unless the Administrative Agent receives notice
from the Borrowers prior to the date on which any payment is due to the Lenders
that the Borrowers will not make such payment in full as and when required, the
Administrative Agent may assume that the Borrowers have made such payment in
full to the Administrative Agent on such date in immediately available funds and
the Administrative Agent may (but shall not be so required), in reliance upon
such assumption, distribute to each Lender on such due date an amount equal to
the amount then due such Lender. If and to the extent the Borrowers have not
made such payment in full to the Administrative Agent, each Lender shall repay
to the Administrative Agent on demand such amount distributed to such Lender,
together with interest thereon at the Federal Funds Rate for each day from the
date such amount is distributed to such Lender until the date repaid.
(d) Indemnification by Lenders. To the extent not reimbursed by the
Borrowers and without limiting the obligations of the Borrowers hereunder, the
Lenders agree to indemnify the Letter of Credit Issuer ratably in accordance
with their respective Pro Rata Shares, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including attorneys' fees) or disbursements of any kind and nature whatsoever
67
that may be imposed on, incurred by or asserted against the Letter of Credit
Issuer in any way relating to or arising out of any Letter of Credit or the
transactions contemplated thereby or any action taken or omitted by the Letter
of Credit Issuer under any Letter of Credit or any DIP Financing Document in
connection therewith; provided that no Lender shall be liable for any of the
foregoing to the extent it arises from the gross negligence or willful
misconduct of the Person to be indemnified. Without limitation of the foregoing,
each Lender agrees to reimburse the Letter of Credit Issuer promptly upon demand
for its Pro Rata Share of any costs or expenses payable by the Borrowers to the
Letter of Credit Issuer, to the extent that the Letter of Credit Issuer is not
promptly reimbursed for such costs and expenses by the Borrowers. The agreement
contained in this Section shall survive payment in full of all other
Obligations.
12.17 Concerning the Collateral and the Related DIP Financing
Documents. Each Lender authorizes and directs the Administrative Agent to enter
into the other DIP Financing Documents, for the ratable benefit and obligation
of the Administrative Agent and the Lenders. Each Lender agrees that any action
taken by the Administrative Agent, Majority Lenders or Supermajority Lenders, as
applicable, in accordance with the terms of this Agreement or the other DIP
Financing Documents, and the exercise by the Administrative Agent, the Majority
Lenders, or the Supermajority Lenders, as applicable, of their respective powers
set forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders. The Lenders
acknowledge that the Revolving Loans, Agent Advances, Non-Ratable Loans, Hedge
Agreements, Bank Products and all interest, fees and expenses hereunder
constitute one Debt, secured pari passu by all of the Collateral.
12.18 Field Audit and Examination Reports; Disclaimer by Lenders. By
signing this Agreement, each Lender:
(a) is deemed to have requested that the Administrative Agent furnish
such Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, "Reports") prepared by or
on behalf of the Administrative Agent;
(b) expressly agrees and acknowledges that neither Bank of America
nor the Administrative Agent (i) makes any representation or warranty as to the
accuracy of any Report, or (ii) shall be liable for any information contained in
any Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Administrative Agent or Bank of
America or other party performing any audit or examination will inspect only
specific information regarding the Borrowers and will rely significantly upon
the Borrowers' books and records, as well as on representations of the
Borrowers' personnel;
(d) agrees to keep all Reports confidential and strictly for its
internal use, and not to distribute except to its participants, or use any
Report in any other manner; and
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold the Administrative
Agent and any such other Lender preparing a Report harmless from any action the
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indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to the Borrowers, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of the Borrowers; and (ii) to pay and protect, and
indemnify, defend and hold the Administrative Agent and any such other Lender
preparing a Report harmless from and against, the claims, actions, proceedings,
damages, costs, expenses and other amounts (including Attorney Costs) incurred
by the Administrative Agent and any such other Lender preparing a Report as the
direct or indirect result of any third parties who might obtain all or part of
any Report through the indemnifying Lender.
12.19 Relation Among Lenders. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Administrative Agent)
authorized to act for, any other Lender.
12.20 Syndication Agent. The Lender identified on the facing page or
signature pages of this Agreement as the "Syndication Agent" shall not have any
right, power, obligation, liability, responsibility or duty under this Agreement
other than those applicable to all Lenders as such. Without limiting the
foregoing, the Lender so identified as the "Syndication Agent" shall not have or
be deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on the Lender so
identified as the "Syndication Agent" in deciding to enter into this Agreement
or in taking or not taking action hereunder.
ARTICLE 13
MISCELLANEOUS
-------------
13.1 No Waivers; Cumulative Remedies. No failure by the
Administrative Agent or any Lender to exercise any right, remedy, or option
under this Agreement or any present or future supplement thereto, or in any
other agreement between or among the Borrowers and the Administrative Agent
and/or any Lender, or delay by the Administrative Agent or any Lender in
exercising the same, will operate as a waiver thereof. No waiver by the
Administrative Agent or any Lender will be effective unless it is in writing,
and then only to the extent specifically stated. No waiver by the Administrative
Agent or the Lenders on any occasion shall affect or diminish the Administrative
Agent's and each Lender's rights thereafter to require strict performance by the
Borrowers of any provision of this Agreement. The Administrative Agent and the
Lenders may proceed directly to collect the Obligations without any prior
recourse to the Collateral. The Administrative Agent's and each Lender's rights
under this Agreement will be cumulative and not exclusive of any other right or
remedy which the Administrative Agent or any Lender may have.
13.2 Severability. The illegality or unenforceability of any
provision of this Agreement or any DIP Financing Document or any instrument or
agreement required hereunder shall not in any way affect or impair the legality
or enforceability of the remaining provisions of this Agreement or any
instrument or agreement required hereunder.
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13.3 Governing Law; Choice of Forum; Service of Process.
(a) THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES
THEREOF, OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW)
PROVIDED THAT PERFECTION ISSUES WITH RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE
EFFECT TO APPLICABLE CHOICE OR CONFLICT OF LAW RULES SET FORTH IN ARTICLE 9 OF
THE UCC) OF THE STATE OF NEW YORK; PROVIDED THAT THE AGENT AND THE LENDERS SHALL
RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER DIP FINANCING DOCUMENT THAT IS NOT REQUIRED TO BE BROUGHT IN THE U.S.
BANKRUPTCY COURT WHERE THE CHAPTER 11 CASES ARE PENDING MAY BE BROUGHT IN THE
COURTS OF THE STATE OF GEORGIA OR OF THE UNITED STATES OF AMERICA LOCATED IN
XXXXXX COUNTY, GEORGIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
THE BORROWERS, THE AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE
BORROWERS, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. NOTWITHSTANDING THE FOREGOING: (1) THE AGENT AND THE LENDERS
SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWERS OR
THEIR PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THE AGENT OR THE LENDERS
DEEM NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER
SECURITY FOR THE OBLIGATIONS AND (2) EACH OF THE PARTIES HERETO ACKNOWLEDGES
THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS.
(c) THE BORROWERS HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY
REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWER AT ITS
ADDRESS SET FORTH IN SECTION 13.8 AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S.
MAIL POSTAGE PREPAID. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF AGENT
OR THE LENDERS TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.
13.4 WAIVER OF JURY TRIAL. THE BORROWERS, THE LENDERS AND THE AGENT
EACH IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM
70
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT,
THE OTHER DIP FINANCING DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON,
PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS,
OR OTHERWISE. THE BORROWERS, THE LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH
CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO
A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER DIP FINANCING
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
AND THE OTHER DIP FINANCING DOCUMENTS.
13.5 Survival of Representations and Warranties. All of the
Borrowers' representations and warranties contained in this Agreement shall
survive the execution, delivery, and acceptance thereof by the parties,
notwithstanding any investigation by the Administrative Agent or the Lenders or
their respective agents.
13.6 Other Security and Guaranties. The Administrative Agent, may,
without notice or demand and without affecting the Borrowers' obligations
hereunder, from time to time: (a) take from any Person and hold collateral
(other than the Collateral) for the payment of all or any part of the
Obligations and exchange, enforce or release such collateral or any part
thereof; and (b) accept and hold any endorsement or guaranty of payment of all
or any part of the Obligations and release or substitute any such endorser or
guarantor, or any Person who has given any Lien in any other collateral as
security for the payment of all or any part of the Obligations, or any other
Person in any way obligated to pay all or any part of the Obligations.
13.7 Fees and Expenses. The Borrowers agree to pay to or reimburse
(1) the Syndication Agent and the Book Managers, on demand, all costs and
expenses that such Persons pay or incur in connection with the structuring and
syndication of the DIP Facility, whether prior to or on or after the Closing
Date, and including reasonable fees and disbursements of counsel, and (2) the
Administrative Agent, for its benefit, on demand, all costs and expenses that
Administrative Agent pays or incurs in connection with the negotiation,
preparation, syndication, consummation, administration, enforcement, and
termination of this Agreement or any of the other DIP Financing Documents,
including: (a) Attorney Costs; (b) costs and expenses (including attorneys' and
paralegals' fees and disbursements) for any amendment, supplement, waiver,
consent, or subsequent closing in connection with the DIP Financing Documents
and the transactions contemplated thereby; (c) costs and expenses of lien and
title searches and title insurance; (d) taxes, fees and other charges for
recording the Mortgages, filing financing statements and continuations, and
other actions to perfect, protect, and continue the Administrative Agent's Liens
(including costs and expenses paid or incurred by the Administrative Agent in
connection with the consummation of Agreement); (e) sums paid or incurred to pay
71
any amount or take any action required of the Borrowers under the DIP Financing
Documents that the Borrowers fail to pay or take; (f) costs of appraisals,
inspections, and verifications of the Collateral, including travel, lodging, and
meals for inspections of the Collateral and the Borrowers' operations by the
Administrative Agent plus the Administrative Agent's then customary charge for
field examinations and audits and the preparation of reports thereof (such
charge is currently $850 per day (or portion thereof) for each Person retained
or employed by the Administrative Agent with respect to each field examination
or audit); and (g) costs and expenses of forwarding loan proceeds, collecting
checks and other items of payment, and establishing and maintaining Payment
Accounts and lock boxes, and costs and expenses of preserving and protecting the
Collateral. In addition, the Borrowers agree to pay costs and expenses incurred
by the Administrative Agent (including Attorneys' Costs) to the Administrative
Agent, for its benefit, on demand, and to the other Lenders for their benefit,
on demand, and all reasonable fees, expenses and disbursements incurred by such
other Lenders for one law firm retained by such other Lenders, in each case,
paid or incurred to obtain payment of the Obligations, enforce the
Administrative Agent's Liens, sell or otherwise realize upon the Collateral, and
otherwise enforce the provisions of the DIP Financing Documents, or to defend
any claims made or threatened against the Administrative Agent or any Lender
arising out of the transactions contemplated hereby (including preparations for
and consultations concerning any such matters). The foregoing shall not be
construed to limit any other provisions of the DIP Financing Documents regarding
costs and expenses to be paid by the Borrowers. All of the foregoing costs and
expenses shall be charged to the Borrowers' Loan Account as Revolving Loans as
described in Section 3.7.
13.8 Notices. Except as otherwise provided herein, all notices,
demands and requests that any party is required or elects to give to any other
shall be in writing, or by a telecommunications device capable of creating a
written record, and any such notice shall become effective (a) upon personal
delivery thereof, including, but not limited to, delivery by overnight mail and
courier service, (b) four (4) days after it shall have been mailed by United
States mail, first class, certified or registered, with postage prepaid, or (c)
in the case of notice by such a telecommunications device, when properly
transmitted, in each case addressed to the party to be notified as follows:
If to the Administrative Agent
or Bank of America: Bank of America, N.A.
000 Xxxxxxxxx Xxxxxx, X.X.
0xx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Business Credit -
Account Executive
Telecopy No.: (000) 000-0000
with a copy to: Parker, Hudson, Rainer & Xxxxx LLP
1500 Marquis Two Tower
000 Xxxxxxxxx Xxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: C. Xxxxxx Xxxxx, Esq.
Telecopy No.: (000) 000-0000
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If to the Borrowers: WestPoint Xxxxxxx Inc.
000 X. 00xx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telecopy No.: (000) 000-0000
with a copy to: Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx, Esq.
Telecopy No.: (000) 000-0000
or to such other address as each party may designate for itself by like notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the persons designated above to
receive copies shall not adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.
13.9 Waiver of Notices. Unless otherwise expressly provided herein,
the Borrowers waive presentment, and notice of demand or dishonor and protest as
to any instrument, notice of intent to accelerate the Obligations and notice of
acceleration of the Obligations, as well as any and all other notices to which
it might otherwise be entitled. No notice to or demand on the Borrowers which
the Administrative Agent or any Lender may elect to give shall entitle the
Borrowers to any or further notice or demand in the same, similar or other
circumstances.
13.10 Binding Effect. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective representatives,
successors, and assigns of the parties hereto; provided, however, that no
interest herein may be assigned by any Borrower without prior written consent of
the Administrative Agent and each Lender. The rights and benefits of the
Administrative Agent and the Lenders hereunder shall, if such Persons so agree,
inure to any party acquiring any interest in the Obligations or any part
thereof.
13.11 Indemnity of the Agents and the Lenders by the Borrowers.
(a) Each Borrower agrees to defend, indemnify and hold the
Agent-Related Persons, and each Lender and each of its respective officers,
directors, employees, counsel, representatives, agents and attorneys-in-fact
(each, an "Indemnified Person") harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, charges, expenses and disbursements (including Attorney Costs) of any
kind or nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Administrative Agent or replacement of any Lender) be imposed on, incurred by or
asserted against any such Person in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such
Person under or in connection with any of the foregoing, including with respect
to any investigation, litigation or proceeding (including any Insolvency
Proceeding or appellate proceeding) related to or arising out of this Agreement,
73
any other DIP Financing Document, or the Loans or the use of the proceeds
thereof, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"); provided, that the
Borrowers shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities resulting solely from the willful misconduct
of such Indemnified Person. The agreements in this Section shall survive payment
of all other Obligations. (b) Each Borrower agrees to indemnify, defend and hold
harmless the Agents and the Lenders from any loss or liability directly or
indirectly arising out of the use, generation, manufacture, production, storage,
release, threatened release, discharge, disposal or presence of a hazardous
substance relating to such Borrower's operations, business or property. This
indemnity will apply whether the hazardous substance is on, under or about such
Borrower's property or operations or property leased to such Borrower. The
indemnity includes, but is not limited to, Attorneys Costs. The indemnity
extends to the Agents and the Lenders, their parents, affiliates, subsidiaries
and all of their directors, officers, employees, agents, successors, attorneys
and assigns. "Hazardous substances" means any substance, material or waste that
is or becomes designated or regulated as "toxic," "hazardous," "pollutant," or
"contaminant" or a similar designation or regulation under any federal, state or
local law (whether under common law, statute, regulation or otherwise) or
judicial or administrative interpretation of such, including petroleum or
natural gas. This indemnity will survive repayment of all other Obligations.
13.12 Limitation of Liability. NO CLAIM MAY BE MADE BY ANY BORROWER,
ANY LENDER OR OTHER PERSON AGAINST THE AGENT, ANY LENDER, OR THE AFFILIATES,
DIRECTORS, OFFICERS, EMPLOYEES, COUNSEL, REPRESENTATIVES, AGENTS OR
ATTORNEYS-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER
THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT OR ANY OTHER DIP FINANCING DOCUMENT, OR ANY ACT, OMISSION OR
EVENT OCCURRING IN CONNECTION THEREWITH, AND EACH BORROWER AND EACH LENDER
HEREBY WAIVE, RELEASE AND AGREE NOT TO XXX UPON ANY CLAIM FOR SUCH DAMAGES,
WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS
FAVOR.
13.13 Final Agreement. This Agreement and the other DIP Financing
Documents are intended by the Borrowers, the Administrative Agent and the
Lenders to be the final, complete, and exclusive expression of the agreement
between them. This Agreement supersedes any and all prior oral or written
agreements relating to the subject matter hereof except for the Interest and Fee
Letter. No modification, rescission, waiver, release, or amendment of any
provision of this Agreement or any other DIP Financing Document shall be made,
except by a written agreement signed by the Borrowers and a duly authorized
officer of each of the Administrative Agent and the requisite Lenders.
13.14 Counterparts. This Agreement may be executed in any number of
counterparts, and by the Administrative Agent, each Lender and each Borrower in
separate counterparts, each of which shall be an original, but all of which
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shall together constitute one and the same agreement; signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
13.15 Captions. The captions contained in this Agreement are for
convenience of reference only, are without substantive meaning and should not be
construed to modify, enlarge, or restrict any provision.
13.16 Right of Setoff. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Borrowers, any such notice being waived by the
Borrowers to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Lender or any
Affiliate of such Lender to or for the credit or the account of the Borrowers
against any and all Obligations owing to such Lender, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Lender shall
have made demand under this Agreement or any DIP Financing Document and although
such Obligations may be contingent or unmatured. Each Lender agrees promptly to
notify the Borrowers and the Administrative Agent after any such set-off and
application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application.
NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE ANY RIGHT OF SET-OFF,
BANKER'S LIEN, OR THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF THE
BORROWERS HELD OR MAINTAINED BY SUCH LENDER WITHOUT THE PRIOR WRITTEN UNANIMOUS
CONSENT OF THE LENDERS.
13.17 Confidentiality.
(a) Each Borrower hereby consents that the Administrative Agent and
each Lender may issue and disseminate to the public general information
describing the credit accommodation entered into pursuant to this Agreement,
including the name and address of such Borrower and a general description of
such Borrower's business and may use such Borrower's name in advertising and
other promotional material.
(b) Each Lender severally agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information identified as "confidential" or "secret" by the Borrowers and
provided to the Administrative Agent or such Lender by or on behalf of the
Borrowers, under this Agreement or any other DIP Financing Document, except to
the extent that such information (i) was or becomes generally available to the
public other than as a result of disclosure by the Administrative Agent or such
Lender, (ii) was or becomes available on a nonconfidential basis from a source
other than the Borrowers, provided that such source is not bound by a
confidentiality agreement with the Borrowers known to the Administrative Agent
or such Lender; or (iii) is required or permitted to be disclosed by the
Borrowers, the Administrative Agent or the Lenders in the Chapter 11 Cases;
provided, however, that the Administrative Agent and any Lender may disclose
such information (1) at the request or pursuant to any requirement of any
Governmental Authority to which the Administrative Agent or such Lender is
subject or in connection with an examination of the Administrative Agent or such
Lender by any such Governmental Authority; (2) pursuant to subpoena or other
75
court process; (3) when required to do so in accordance with the provisions of
any applicable Requirement of Law; (4) to the extent reasonably required in
connection with any litigation or proceeding (including the Chapter 11 Cases) to
which the Administrative Agent, any Lender or their respective Affiliates may be
party; (5) to the extent reasonably required in connection with the exercise of
any remedy hereunder or under any other DIP Financing Document; (6) to the
Administrative Agent's or such Lender's independent auditors, accountants,
attorneys and other professional advisors; (7) to any prospective Participant or
Assignee under any Assignment and Acceptance, actual or potential, provided that
such prospective Participant or Assignee agrees to keep such information
confidential to the same extent required of the Administrative Agent and the
Lenders hereunder; (8) as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which any Borrower is party
or is deemed party with the Administrative Agent or such Lender; (9) to its
Affiliates; and (10) to any of the Pre-Petition Lenders. Notwithstanding
anything herein to the contrary, the information subject to this Section
13.17(b) shall not include, and the Administrative Agent and each Lender may
disclose without limitation of any kind, any information with respect to the
"tax treatment" and "tax structure" (in each case, within the meaning of
Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby
and all materials of any kind (including opinions or other tax analyses) that
are provided to the Administrative Agent or such Lender relating to such tax
treatment or tax structure; provided that with respect to any document or
similar item that in either case contains information concerning the tax
treatment or tax structure of the transactions as well as other information,
this sentence shall only apply to such portions of the document or similar item
that relate to the tax treatment or tax structure of the Loans, Letters of
Credit and transactions contemplated hereby.
13.18 Conflicts with Other DIP Financing Documents. Unless otherwise
expressly provided in this Agreement (or in another DIP Financing Document by
specific reference to the applicable provision contained in this Agreement), if
any provision contained in this Agreement conflicts with any provision of any
other DIP Financing Document, the provision contained in this Agreement shall
govern and control.
76
IN WITNESS WHEREOF, the parties have entered into this Agreement on
the date first above written.
"BORROWERS":
WESTPOINT XXXXXXX INC., a Delaware
corporation
_______________________________________
By:____________________________________
Title:_________________________________
WESTPOINT XXXXXXX INC I, a Delaware
corporation
_______________________________________
By:____________________________________
Title:_________________________________
X.X. XXXXXXX & CO., INC., a Delaware
corporation
_______________________________________
By:____________________________________
Title:_________________________________
X.X. XXXXXXX ENTERPRISES, INC., a
Delaware corporation
_______________________________________
By:____________________________________
Title:_________________________________
WESTPOINT XXXXXXX STORES INC., a
Georgia corporation
_______________________________________
By:____________________________________
Title:_________________________________
77
ADMINISTRATIVE AGENT"
BANK OF AMERICA, N.A., as the
Administrative Agent
By:____________________________________
___________________, Vice President
"SYNDICATION AGENT"
WACHOVIA BANK, NATIONAL
ASSOCIATION, as the Syndication Agent
By:____________________________________
____________________, Vice President
"LENDERS"
BANK OF AMERICA, N.A., as a Lender
By:____________________________________
____________________, Vice President
WACHOVIA BANK, NATIONAL
ASSOCIATION, as a Lender
By:____________________________________
____________________, Vice President
78
ANNEX A
TO
CREDIT AGREEMENT
----------------
DEFINITIONS
-----------
Capitalized terms used in the DIP Financing Documents shall have the
following respective meanings (unless otherwise defined therein), and all
section references in the following definitions shall refer to sections of this
Agreement:
"2002 Restructuring Plan" means that certain restructuring plan,
dated September 9, 2002, outlining certain changes in the operation of the
Borrowers and their Subsidiaries.
"Acceptable Plan" means a Reorganization Plan which provides for Full
Payment of any then unpaid Obligations on the sooner to occur of (i) the last
day of the DIP Term and (ii) the effective date of such Reorganization Plan, or
which is otherwise acceptable to Administrative Agent and each Lender, in their
sole and absolute discretion.
"Accommodation Payment" has the meaning specified in Section 3.9(d).
"Account Debtor" means each Person obligated in any way on or in
connection with an Account, Chattel Paper or General Intangible (including a
payment intangible).
"Accounts" means all of the Borrowers' now owned or hereafter
acquired or arising accounts, as defined in the UCC, including any rights to
payment for the sale or lease of goods or rendition of services, whether or not
they have been earned by performance.
"Accounts Formula Amount" means, at any time, an amount equal to
eighty-five percent (85%) of the Net Amount of Eligible Accounts.
"Accrued Royalty Reserve" has the meaning specified in the definition
of "Royalty Reserve."
"ACH Transactions" means any cash management, disbursement or related
services, including overdrafts and the automatic clearing house transfer of
funds by Bank of America for the account of the Borrowers.
"Adequate Protection Claim" means the right of the holder of a
secured Claim against the Borrowers (or any of them) to receive periodic
payments as adequate protection under Sections 361 or 363 of the Bankruptcy
Code.
"Adjusted Net Earnings from Operations" means, with respect to any
specified fiscal period, the net income of the Borrowers and their Subsidiaries
on a consolidated basis for such fiscal period after provision for income taxes,
as determined in accordance with GAAP and reported on the Financial Statements
for such period, excluding any and all of the following included in such net
income: (a) gain or loss arising from the sale of any capital assets; (b) gain
arising from any write-up in the book value of any asset; (c) earnings of any
Person, substantially all the assets of which have been acquired by a Borrower
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or Subsidiary in any manner, to the extent realized by such other Person prior
to the date of acquisition; (d) earnings of any Person in which a Borrower or
Subsidiary has an ownership interest unless (and only to the extent) such
earnings shall actually have been received by such Borrower or Subsidiary in the
form of cash distributions; (e) earnings of any Person to which assets of a
Borrower or Subsidiary shall have been sold, transferred or disposed of, or into
which such Borrower or Subsidiary shall have been merged, or which has been a
party with such Borrower or Subsidiary to any consolidation or other form of
reorganization, prior to the date of such transaction; (f) gain arising from the
acquisition of debt or equity securities of a Borrower or Subsidiary or from
cancellation or forgiveness of Debt; (g) gain or loss arising from extraordinary
items, as determined in accordance with GAAP, or from any other non-recurring
transaction; (h) without duplication, those Plant Shutdown Costs that have not
been incurred, accrued or reserved as of the Petition Date; and (i) the Chapter
11 Expenses.
"Administrative Agent" has the meaning specified in the Recitals to
this Agreement
"Administrative Agent's Liens" means the Liens in the Collateral
granted to the Administrative Agent, for the benefit of the Lenders, Bank of
America, and Administrative Agent pursuant to this Agreement, the other DIP
Financing Documents and the Financing Orders.
"Administrative Agent-Related Persons" means the Administrative
Agent, together with its Affiliates, and the officers, directors, employees,
counsel, representatives, agents and attorneys-in-fact of the Administrative
Agent and such Affiliates.
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person or which owns, directly or indirectly, five percent (5%) or
more of the outstanding equity interest of such Person. A Person shall be deemed
to control another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of the other Person, whether through the ownership of voting
securities, by contract, or otherwise.
"Agent Advances" has the meaning specified in Section 1.2(j).
"Agent-Related Persons" means each Agent, together with its
Affiliates, and the officers, directors, employees, counsel, representatives,
agents and attorneys-in-fact of such Agent and its Affiliates.
"Agents" means, collectively, the Administrative Agent, the
Syndication Agent and the Documentation Agent.
"Aggregate Revolver Outstandings" means, at any date of
determination: the sum of (a) the unpaid balance of Revolving Loans, (b) the
aggregate amount of Pending Revolving Loans, (c) one hundred percent (100%) of
the aggregate undrawn face amount of all outstanding Letters of Credit, and (d)
the aggregate amount of any unpaid reimbursement obligations in respect of
Letters of Credit.
"Agreement" means the Post-Petition Credit Agreement to which this
Annex A is attached, as from time to time amended, modified or restated.
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"Anniversary Date" means each anniversary of the Closing Date.
"Applicable Margins" means
(i) with respect to Base Rate Revolving Loans and all other
Obligations (other than LIBOR Revolving Loans and the Unused
Line Fee), 0.625%;
(ii) with respect to LIBOR Revolving Loans, 2.75%.; and
(iii) with respect to the Unused Line Fee, 0.50%.
The Applicable Margins shall be adjusted (up or down) prospectively
on November 1, 2003, and continuing on the first day of each November, February,
May and August thereafter, based upon Average Availability for the immediately
preceding three-month period. Adjustments in Applicable Margins shall be
determined by reference to the following grids:
------------------------------------------------------------------- ---------------------------------------------------------------
LEVEL OF
IF AVERAGE AVAILABILITY IS: APPLICABLE MARGINS:
--------------------------- -------------------
------------------------------------------------------------------- ---------------------------------------------------------------
> $200,000,000 Level I
------------------------------------------------------------------- ---------------------------------------------------------------
> $150,000,000, but < $200,000,000 Level II
-
------------------------------------------------------------------- ---------------------------------------------------------------
> $100,000,000, but < $150,000,000 Level III
-
------------------------------------------------------------------- ---------------------------------------------------------------
< $100,000,000 Level IV
-
------------------------------------------------------------------- ---------------------------------------------------------------
--------------------------------------------- -------------------------------------------------------------------------------------
APPLICABLE MARGINS
------------------
--------------------------------------------- ---------------------- --------------------- -------------------- -------------------
XXXXX X XXXXX XX XXXXX XXX XXXXX XX
------- -------- --------- --------
--------------------------------------------- ---------------------- --------------------- -------------------- -------------------
Base Rate Revolving Loans 0.25% 0.50% 0.75% 1.00%
--------------------------------------------- ---------------------- --------------------- -------------------- -------------------
LIBOR Revolving Loans 2.25% 2.50% 2.75% 3.00%
--------------------------------------------- ---------------------- --------------------- -------------------- -------------------
Unused Line Fee 0.375% 0.50% 0.625% 0.75%
--------------------------------------------- ---------------------- --------------------- -------------------- -------------------
If a Default or Event of Default has occurred and is continuing at
the time any reduction in the Applicable Margins is to be implemented, no
reduction may occur until the first day of the first calendar month following
the date on which such Default or Event of Default is waived or cured.
"Arranger" means Banc of America Securities LLC.
"Assignee" has the meaning specified in Section 11.2(a).
"Assignment and Acceptance" has the meaning specified in Section
11.2(a).
"Attorney Costs" means and includes all reasonable fees, expenses and
disbursements of any law firm or other counsel engaged by the Administrative
Agent and the reasonably allocated costs and expenses of internal legal services
of the Administrative Agent.
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"Availability" means, at any time, (a) the lesser of (i) the Maximum
Revolver Amount at such time and (ii) the Borrowing Base at such time, minus, in
each case, (b) the Aggregate Revolver Outstandings at such time.
"Availability Reserve" means, at any time, an amount equal to the sum
of (i) the Carve-Out Reserve, (ii) the Royalty Reserve, (iii) the Fixed Asset
Reserve, and (iv) the Reduction Event Reserve.
"Average Availability" means, for any month, an amount equal to
Availability on each day during such month, as determined by the Administrative
Agent, divided by the number of days in such month.
"Avoidance Claim" means any claim that could be asserted by or on
behalf of a Borrower or its Estate against a Person under 11 U.S.C. xx.xx.
502(d), 544, 545, 547, 548, 549, 550, 551 or 553.
"Bank of America" means Bank of America, N.A., a national banking
association, or any successor entity thereto.
"Bank Products" means any one or more of the following types of
services or facilities extended to the Borrowers by Bank of America or any
affiliate of Bank of America: (i) credit cards; (ii) ACH Transactions; and (iii)
Hedge Agreements.
"Bankruptcy Code" means Title 11 of the United States Code (11
X.X.X.xx. 101 et seq.).
"Base Rate" means, for any day, the rate of interest in effect for
such day as publicly announced from time to time by Bank of America in
Charlotte, North Carolina as its "prime rate" (the "prime rate" being a rate set
by Bank of America based upon various factors, including Bank of America's costs
and desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans, which may be priced at, above, or
below such announced rate). Any change in the prime rate announced by Bank of
America shall take effect at the opening of business on the day specified in the
public announcement of such change. Each Interest Rate based upon the Base Rate
shall be adjusted simultaneously with any change in the Base Rate.
"Base Rate Revolving Loan" means a Revolving Loan during any period
in which it bears interest based on the Base Rate.
"Book Managers" means, collectively, Banc of America Securities LLC
and Wachovia Securities, Inc. , and "Book Manager" means either of them.
"Borrowers' Agent" has the meaning specified in Section 1.2(k).
"Borrowing" means a borrowing hereunder consisting of Revolving Loans
made on the same day by the Lenders to the Borrowers or by Bank of America in
the case of a Borrowing funded by Non-Ratable Loans or by the Administrative
Agent in the case of a Borrowing consisting of an Agent Advance, or the issuance
of Letters of Credit hereunder.
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"Borrowing Base" means, at any time, an amount equal to (i) the sum
of the Accounts Formula Amount and the Inventory Formula Amount at such time,
minus (ii) the Availability Reserve at such time.
"Borrowing Base Certificate" means a certificate by a Responsible
Officer of the Borrowers, substantially in the form of Exhibit B (or another
form acceptable to the Administrative Agent) setting forth the calculation of
the Borrowing Base, including a calculation of each component thereof, all in
such detail as shall be reasonably satisfactory to the Administrative Agent. All
calculations of the Borrowing Base in connection with the preparation of any
Borrowing Base Certificate shall originally be made by the Borrowers and
certified to the Administrative Agent; provided, that the Administrative Agent
shall have the right to review and adjust, in the exercise of its reasonable
credit judgment, any such calculation (1) to reflect its reasonable estimate of
declines in value of any of the Collateral described therein, and (2) to the
extent that such calculation is not in accordance with this Agreement.
"Budget" means a cash flow forecast in form and substance acceptable
to the Administrative Agent and the Initial Lenders projecting the Borrowers'
cash receipts and disbursements (including Chapter 11 Expenses) for the first
thirteen (13) weeks following the Petition Date and attached to the DIP Motion
or the Interim Financing Order, as such budget may be modified or supplemented
from time to time with the Administrative Agent's and the Majority Lenders'
prior written consent.
"Business Day" means (a) any day that is not a Saturday, Sunday, or a
day on which banks in Atlanta, Georgia or New York, New York are required or
permitted to be closed, and (b) with respect to all notices, determinations,
fundings and payments in connection with the LIBOR Rate or LIBOR Revolving
Loans, any day that is a Business Day pursuant to clause (a) above and that is
also a day on which trading in Dollars is carried on by and between banks in the
London interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a bank.
"Capital Expenditures" means all payments due (whether or not paid
during any fiscal period) in respect of the cost of any fixed asset or
improvement, or replacement, substitution, or addition thereto, which has a
useful life of more than one year, including those costs arising in connection
with the direct or indirect acquisition of such asset by way of increased
product or service charges or in connection with a Capital Lease.
"Capital Lease" means any lease of property by a Borrower which, in
accordance with GAAP, should be reflected as a capital lease on the balance
sheet of such Borrower.
"Cash Dominion Cure Date" means the first date after the occurrence
of a Cash Dominion Date on which Availability is at least $75,000,000 and no
Event of Default exists.
"Cash Dominion Date" means the soonest to occur of the following: (i)
the occurrence of an Event of Default under this Agreement, (ii) Availability on
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any date after the Final Financing Order has been entered by the Court is less
than $50,000,000, and (iii) Availability on any date after the Final Financing
Order has been entered by the Court is less than $75,000,000 and there is no day
during the period of twenty (20) days immediately following such date on which
Availability is at least $75,000,000.
"Cash Dominion Period" means a period commencing on a Cash Dominion
Date and ending on a Cash Dominion Cure Date.
"Carve-Out" means the "Carve-Out" consented to by the Administrative
Agent under, and as defined in, the Financing Orders.
"Carve-Out Reserve" means, at any time, an amount equal to the sum of
$5,000,000.
"Change of Control" means the occurrence of any of the following
events: (a) any "person" or "group" (as such. terms are used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the "beneficial owner" as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than 50% of the Voting
Stock of WPS; (b) WPS consolidates with, or merges with or into, another person
or sells, assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any person or any person consolidates with,
or merges with or into, WPS, in any such event pursuant to a transaction in
which the outstanding Voting Stock of WPS is converted into or exchanged for
cash, securities, or other property, other than any such transaction where (i)
the outstanding Voting Stock of WPS is converted into or exchanged for Voting
Stock (other than Disqualified Stock) of the surviving or transferee corporation
or its parent corporation and (ii) immediately after such transaction no
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act) is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a person shall be deemed to have a
"beneficial ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total Voting Stock of
the surviving or transferee corporation or its parent corporation, as
applicable; (c) individuals who on the Petition Date constituted the board of
directors of WPS (together with any new directors whose election by such board
or whose nomination for election by the stockholders of WPS was approved by a
vote of a majority of the directors then still in office who were either
directors on the Petition Date or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of such
board then in office; or (d) WPS shall fail to own, directly or indirectly, 100%
of the outstanding capital stock of each other Borrower.
"Chapter 11 Cases" has the meaning specified in the Recitals to this
Agreement.
"Chapter 11 Expenses" means fees and expenses incurred as a result of
the Chapter 11 Cases, including fees and expenses relating to the KERP, fees and
expenses relating to this Agreement, Professional Expenses, Committee Expenses,
and termination charges paid under the Congress Loan Agreement.
A-6
"Chattel Paper" means all of the Borrowers' now owned or hereafter
acquired chattel paper, as defined in the UCC, including electronic chattel
paper.
"Claim" has the meaning given to it in Section 101 of the Bankruptcy
Code.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986.
"Collateral" means all of each Borrower's real and personal property,
whether now existing or hereafter created or acquired and whenever located,
except as specifically excluded under the Financing Orders.
"Commitment" means, at any time with respect to a Lender, the
principal amount set forth beside such Lender's name under the heading
"Commitment" on Schedule 1.2 attached to this Agreement or on the signature page
of the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 11.2, as such Commitment
may be adjusted from time to time in accordance with the provisions of Section
11.2, and "Commitments" means, collectively, the aggregate amount of the
commitments of all of the Lenders.
"Commitment Termination Date" means the date that is the soonest to
occur of: (i) the last day of the DIP Term, (ii) the date of entry of a
Confirmation Order with respect to any Reorganization Plan (or the effective
date of any Reorganization Plan if either the Confirmation Order or the
Reorganization Plan provides that title to all of the assets of each Borrower's
Estate remains vested in such Estate until the effective date), (iii) the
effective date of any sale of all or a substantial part of the Collateral, (iv)
the date on which this Agreement and the Commitments are terminated pursuant to
Section 9.2 of this Agreement, (v) the date on which Borrowers elect to
terminate the DIP Facility pursuant to Section 3.2 of this Agreement or (vi) the
date on which either Pre-Petition Agent or Administrative Agent is granted
relief from the automatic stay.
"Committee" means a creditors' or equity security holders' committee
appointed in the Chapter 11 Cases by the United States Trustee.
"Committee Expenses" means the reasonable out-of-pocket expenses of
members of a Committee, to the extent approved by the Court.
"Confirmation Order" means an order entered by the Court confirming a
Reorganization Plan.
"Congress" means Congress Financial Corporation (Southern), a Georgia
corporation.
"Congress Loan Agreement" means the Loan and Security Agreement dated
March 28, 2003, among WPSRC, as Borrower, WPS, as Initial Servicer, the lenders
party thereto from time to time, and Congress, as agent for such lenders, as
amended and in effect on the Petition Date.
"Contaminant" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
A-7
substance or waste, asbestos in any form or condition, polychlorinated biphenyls
("PCBs"), or any constituent of any such substance or waste.
"Continuation/Conversion Date" means the date on which a Loan is
converted into or continued as a LIBOR Revolving Loan.
"Court" has the meaning specified in the Recitals to this Agreement.
"Credit Support" has the meaning specified in Section 1.3(a).
"Critical Vendor" means a Person who holds a Claim against a Borrower
on the Petition Date and whose ongoing provision of goods or services is
essential to one or more Borrowers' successful reorganization in the Chapter 11
Cases.
"Debt" means, without duplication, all liabilities, obligations and
indebtedness of a Borrower or a Subsidiary to any Person, of any kind or nature,
now or hereafter owing, arising, due or payable, howsoever evidenced, created,
incurred, acquired or owing, whether primary, secondary, direct, contingent,
fixed or otherwise, consisting of indebtedness for borrowed money or the
deferred purchase price of property, excluding trade payables, but including (a)
all Obligations; (b) all obligations and liabilities of any Person secured by
any Lien on a Borrower's property, even though such Borrower shall not have
assumed or become liable for the payment thereof; provided, however, that all
such obligations and liabilities which are limited in recourse to such property
shall be included in Debt only to the extent of the book value of such property
as would be shown on a balance sheet of such Borrower prepared in accordance
with GAAP; (c) all obligations or liabilities created or arising under any
Capital Lease or conditional sale or other title retention agreement with
respect to property used or acquired by a Borrower, even if the rights and
remedies of the lessor, seller or lender thereunder are limited to repossession
of such property; provided, however, that all such obligations and liabilities
which are limited in recourse to such property shall be included in Debt only to
the extent of the book value of such property as would be shown on a balance
sheet of such Borrower prepared in accordance with GAAP; (d) all obligations and
liabilities under Guaranties; and (e) the present value (discounted at the Base
Rate) of lease payments due under synthetic leases.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured, waived, or otherwise
remedied during such time) constitute an Event of Default.
"Default Rate" means a fluctuating per annum interest rate at all
times equal to the sum of (a) the otherwise applicable Interest Rate plus (b)
two percent (2%) per annum. Each Default Rate shall be adjusted simultaneously
with any change in the applicable Interest Rate. In addition, the Default Rate
shall result in an increase in the Letter of Credit Fee by two percentage points
per annum.
"Defaulting Lender" has the meaning specified in Section 12.15(c).
"Deposit Accounts" means all "deposit accounts" as such term is
defined in the UCC, now or hereafter held in the name of a Borrower.
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"Designated Account" has the meaning specified in Section 1.2(d).
"Designated Account Debtor" means each Account Debtor listed from
time to time with the consent of the Administrative Agent on Annex B.
"DIP Facility" has the meaning specified in Section 1.1.
"DIP Financing Documents" means this Agreement, the Patent and
Trademark Security Agreements, the Security Agreement, the Mortgages, each
Subsidiary Guaranty, each Subsidiary Security Agreement, the Interest and Fee
Letter and any other agreements, instruments, and documents heretofore, now or
hereafter evidencing, securing, guaranteeing or otherwise relating to the
Obligations, the Collateral, or any other aspect of the transactions
contemplated by this Agreement.
"DIP Motion" means the Motion of the Borrowers for approval of the
financing under the DIP Facility pursuant to this Agreement.
"DIP Term" means a period commencing on the date of entry of the
Interim Financing Order and ending on the first anniversary thereof; provided,
that if the DIP Term has been extended by the Borrowers pursuant to Section
3.2(b), the DIP Term shall end on the last day of the applicable Renewal Period.
"Disqualified Stock" means, with respect to any Person, any capital
stock or other security of such Person which, by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable), or
upon the happening of any event, matures or is mandatorily redeemable (in each
case, other than into common stock of WPS), pursuant to a sinking fund
obligation or otherwise, or is exchangeable for Debt, or is redeemable at the
option of the holder thereof, in whole or in part, on or prior to the final
maturity date of the specified security. Notwithstanding the foregoing, in no
event shall any capital stock or other security that is considered Disqualified
Stock solely by reason of such capital stock or other security being convertible
at the option of the holder of such capital stock or other security into other
capital stock or other security (other than Disqualified Stock) constitute
Disqualified Stock.
"Distribution" means, in respect of any corporation: (a) the payment
or making of any dividend or other distribution of property in respect of
capital stock (or any options or warrants for, or other rights with respect to,
such stock) of such corporation, other than distributions in capital stock (or
any options or warrants for such stock) of the same class; or (b) the redemption
or other acquisition by such corporation of any capital stock (or any options or
warrants for such stock) of such corporation.
"Documents" means all documents as such term is defined in the UCC,
including bills of lading, warehouse receipts or other documents of title, now
owned or hereafter acquired by the Borrowers.
"DOL" means the United States Department of Labor or any successor
department or agency.
"Dollar" and "$" means dollars in the lawful currency of the United
States. Unless otherwise specified, all payments under the DIP Financing
Documents shall be made in Dollars.
A-9
"EBITDA" means, with respect to any fiscal period of the Borrowers,
Adjusted Net Earnings from Operations for such period, plus, to the extent
deducted in the determination of Adjusted Net Earnings from Operations for that
fiscal period, interest expenses, Federal, state, local and foreign income
taxes, depreciation and amortization (including the amortization or write-off of
deferred financing costs and goodwill), all as determined for the Borrowers and
their Subsidiaries on a consolidated basis in accordance with GAAP.
"Eligible Accounts" means those Accounts which are owned by a
Borrower and arose from the sale of Goods in the Ordinary Course of Business of
such Borrower and which the Administrative Agent, in the exercise of its
reasonable commercial discretion, determines to be Eligible Accounts. Without
limiting the discretion of the Administrative Agent to establish other criteria
of ineligibility, Eligible Accounts shall not, unless the Administrative Agent
in its sole discretion elects, include any Account as an Eligible Account:
(a) with respect to which more than 90 days have elapsed since the
date of the original invoice therefor or which is more than 60 days past due;
(b) with respect to which any of the representations, warranties,
covenants, and agreements contained in the Security Agreement are incorrect or
have been breached;
(c) with respect to which Account (or any other Account due from such
Account Debtor), in whole or in part, a check, promissory note, draft, trade
acceptance or other instrument for the payment of money has been received,
presented for payment and returned uncollected for any reason;
(d) which represents a progress billing (as hereinafter defined) or
as to which a Borrower has extended the time for payment without the consent of
the Administrative Agent; for the purposes hereof, "progress billing" means any
invoice for goods sold or leased or services rendered under a contract or
agreement pursuant to which the Account Debtor's obligation to pay such invoice
is conditioned upon such Borrower's completion of any further performance under
the contract or agreement;
(e) with respect to which any one or more of the following events has
occurred to the Account Debtor on such Account: death or judicial declaration of
incompetency of an Account Debtor who is an individual; the filing by or against
the Account Debtor of a request or petition for liquidation, reorganization,
arrangement, adjustment of debts, adjudication as a bankrupt, winding-up, or
other relief under the bankruptcy, insolvency, or similar laws of the United
States, any state or territory thereof, or any foreign jurisdiction, now or
hereafter in effect; the making of any general assignment by the Account Debtor
for the benefit of creditors; the appointment of a receiver or trustee for the
Account Debtor or for any of the assets of the Account Debtor, including the
appointment of or taking possession by a "custodian," as defined in the Federal
Bankruptcy Code; the institution by or against the Account Debtor of any other
type of insolvency proceeding (under the bankruptcy laws of the United States or
otherwise) or of any formal or informal proceeding for the dissolution or
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liquidation of, settlement of claims against, or winding up of affairs of, the
Account Debtor; the sale, assignment, or transfer of all or any material part of
the assets of the Account Debtor; the nonpayment generally by the Account Debtor
of its debts as they become due; or the cessation of the business of the Account
Debtor as a going concern;
(f) if fifty percent (50%) or more of the aggregate Dollar amount of
outstanding Accounts owed at such time by the Account Debtor thereon is
classified as ineligible under clause (a) above;
(g) owed by an Account Debtor which: (i) does not maintain its chief
executive office in the United States of America, Canada (other than the
Province of Newfoundland) or Puerto Rico; or (ii) is not organized under the
laws of Puerto Rico, the United States of America or Canada or any state or
province thereof; or (iii) is the government of any foreign country or sovereign
state, or of any state, province, municipality, or other political subdivision
thereof, or of any department, agency, public corporation, or other
instrumentality thereof; except to the extent that such Account is secured or
payable by a letter of credit satisfactory to the Administrative Agent in its
discretion;
(h) owed by an Account Debtor which is an Affiliate or employee of a
Borrower;
(i) except as provided in clause (k) below, with respect to which
either the perfection, enforceability, or validity of the Administrative Agent's
Liens in such Account, or the Administrative Agent's right or ability to obtain
direct payment to the Administrative Agent of the proceeds of such Account, is
governed by any federal, state, or local statutory requirements other than the
Bankruptcy Code and those of the UCC;
(j) owed by an Account Debtor to which such Borrower or any of its
Subsidiaries, is indebted in any way, or which is subject to any right of setoff
or recoupment by the Account Debtor, unless the Account Debtor has entered into
an agreement acceptable to the Administrative Agent to waive setoff rights; or
if the Account Debtor thereon has disputed liability or made any claim with
respect to any other Account due from such Account Debtor; but in each such case
only to the extent of such indebtedness, setoff, recoupment, dispute, or claim;
(k) owed by the government of the United States of America, or any
department, agency, public corporation, or other instrumentality thereof, unless
the Federal Assignment of Claims Act of 1940, as amended (31 X.X.X.xx. 3727 et
seq.), and any other steps necessary to perfect the Administrative Agent's Liens
therein, have been complied with to the Administrative Agent's satisfaction with
respect to such Account;
(l) owed by any state, municipality, or other political subdivision
of the United States of America, or any department, agency, public corporation,
or other instrumentality thereof and as to which the Administrative Agent
determines that its Lien therein is not or cannot be perfected;
(m) which represents a sale on a xxxx-and-hold, guaranteed sale, sale
and return, sale on approval, consignment, or other repurchase or return basis;
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(n) which is evidenced by a promissory note or other instrument or by
chattel paper;
(o) if the Administrative Agent believes, in the exercise of its
reasonable judgment, that the prospect of collection of such Account is impaired
or that the Account may not be paid by reason of the Account Debtor's financial
inability to pay;
(p) with respect to which the Account Debtor is located in any state
requiring the filing of a Notice of Business Activities Report or similar report
in order to permit the Borrower to seek judicial enforcement in such State of
payment of such Account, unless such Borrower has qualified to do business in
such state or has filed a Notice of Business Activities Report or equivalent
report for the then current year;
(q) which arises out of a sale not made in the Ordinary Course of
Business of such Borrower;
(r) with respect to which the Goods giving rise to such Account have
not been shipped and delivered to and accepted by the Account Debtor or the
services giving rise to such Account have not been performed by the Borrower,
and, if applicable, accepted by the Account Debtor, or the Account Debtor
revokes its acceptance of such Goods or services;
(s) owed by an Account Debtor which is obligated to the Borrowers
respecting Accounts the aggregate unpaid balance of which exceeds fifteen
percent (15%) (or, as to any Designated Account Debtor, the percentage set forth
on Annex B) of the aggregate unpaid balance of all Eligible Accounts owed to the
Borrowers at such time by all of the Borrower's Account Debtors, but only to the
extent of such excess; provided, that without limiting any other rights of the
Administrative Agent, upon notice to the Borrowers, the Administrative Agent may
from time to time in its sole discretion increase or decrease the percentages
set forth on Annex B as to any Designated Account Debtor referred to therein,
and any such change shall be made in good faith by the Administrative Agent
based on either: (A) an event, condition or other circumstance arising after the
date hereof or (B) an event, condition or other circumstance existing on the
Closing Date to the extent the Administrative Agent has no written notice
thereof from the Borrowers prior to the Closing Date; or
(t) which is not subject to a first priority and perfected security
interest in favor of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders and no other Lien except those in favor of
the Pre-Petition Agents.
If any Account at any time ceases to be an Eligible Account, then
such Account shall promptly be excluded from the calculation of Eligible
Accounts.
"Eligible Assignee" means (a) a commercial bank, commercial finance
company, fund or other asset based lender, having total assets in excess of
$100,000,000 that is engaged in making, purchasing or otherwise investing in
commercial loans in the Ordinary Course of Business of such Person and which
shall represent to the satisfaction of the Administrative Agent, in its
reasonable discretion, that such Person has the immediate financial resources
and functional capability of performing all actions required of a Lender
pursuant to the DIP Financing Documents, including funding and indemnification
requirements; (b) any Lender listed on the signature page of this Agreement; (c)
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any Affiliate of a Lender; and (d) if an Event of Default has occurred and is
continuing, any Person reasonably acceptable to the Administrative Agent.
"Eligible Inventory" means Inventory of a Borrower which consists of
raw materials, finished goods and, in the Administrative Agent's sole
discretion, certain work-in-process, and which the Administrative Agent, in its
reasonable discretion, determines to be Eligible Inventory. Without limiting the
discretion of the Administrative Agent to establish other criteria of
ineligibility, Eligible Inventory shall not, unless the Administrative Agent in
its sole discretion elects, include any Inventory:
(a) that is not owned by a Borrower;
(b) that is not subject to the Administrative Agent's Liens, which
are perfected as to such Inventory, or that are subject to any other Lien
whatsoever (other than the Liens described in clause (d) of the definition of
Permitted Liens provided that such Permitted Liens (i) are junior in priority to
the Administrative Agent's Liens and (ii) do not impair directly or indirectly
the ability of the Administrative Agent to realize on or obtain the full benefit
of the Collateral);
(c) that consists of chemicals, samples, prototypes, supplies, or
packing and shipping materials;
(d) that is not in good condition, is unmerchantable, or does not
meet all standards imposed by any Governmental Authority, having regulatory
authority over such goods, their use or sale;
(e) that is not currently either usable or salable, at prices
approximating at least cost, in the normal course of the Borrower's business, or
that is slow moving or stale;
(f) that is obsolete or repossessed by a Borrower or used Goods taken
in trade;
(g) that is located outside the United States of America (or that is
in-transit from vendors or suppliers);
(h) that is located in a public warehouse or in possession of a
bailee or in a facility leased by a Borrower, if the warehouseman, or the
bailee, or the lessor has not delivered to the Administrative Agent, if
requested by the Administrative Agent, a subordination agreement in form and
substance satisfactory to the Administrative Agent;
(i) that contains or bears any Proprietary Rights licensed to a
Borrower pursuant to a License Agreement, if the Administrative Agent is not
satisfied that it may sell or otherwise dispose of such Inventory in accordance
with the terms of the Security Agreement and Section 9.2 without infringing the
rights of the licensor of such Proprietary Rights or violating the License
Agreement with such licensor (and without payment of any royalties other than
any royalties due with respect to the sale or disposition of such Inventory
pursuant to the existing License Agreement), and, as to which the Borrower has
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not delivered to the Administrative Agent a consent or sublicense agreement from
such licensor in form and substance acceptable to the Administrative Agent if
requested;
(j) that is not reflected in the details of a current perpetual
inventory report or the existence of which is not otherwise accounted for to the
satisfaction of the Administrative Agent; or
(k) that is Inventory placed on consignment.
If any Inventory at any time ceases to be Eligible Inventory, such
Inventory shall promptly be excluded from the calculation of Eligible Inventory.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for a Release or
injury to the environment.
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case
relating to environmental, health, safety and land use matters.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (a) any liability under Environmental Laws, or (b) damages arising
from, or costs incurred by such Governmental Authority in response to, a Release
or threatened Release of a Contaminant into the environment.
"Equipment" means all of the Borrowers' now owned and hereafter
acquired machinery, equipment, furniture, furnishings, fixtures, and other
tangible personal property (except Inventory), including embedded software,
motor vehicles with respect to which a certificate of title has been issued,
aircraft, dies, tools, jigs, molds and office equipment, as well as all of such
types of property leased by any Borrower and all of the Borrowers' rights and
interests with respect thereto under such leases (including options to
purchase); together with all present and future additions and accessions
thereto, replacements therefor, component and auxiliary parts and supplies used
or to be used in connection therewith, and all substitutes for any of the
foregoing, and all manuals, drawings, instructions, warranties and rights with
respect thereto; wherever any of the foregoing is located.
"ERISA" means the Employee Retirement Income Security Act of 1974,
and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with a Borrower within the meaning of Section
414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes
of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan, (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
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substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations which is treated as such a withdrawal under Section 4062(e) of
ERISA, (c) a complete or partial withdrawal by any Borrower or any ERISA
Affiliate from a Multi-employer Plan or notification that a Multi-employer Plan
is in reorganization, (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multi-employer Plan, (e) the occurrence of an event or condition which
might reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multi-employer Plan, or (f) the imposition of any liability
under Title IV of ERISA, other than for PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon any Borrower or any ERISA Affiliate.
"Estate" means the estate created in each Chapter 11 Case pursuant to
11 U.S.C.ss.541(a).
"Event of Default" has the meaning specified in Section 9.1.
"Excess Casualty/Condemnation Proceeds" has the meaning specified in
Section 7.6(b).
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to Bank of America on
such day on such transactions as determined by the Administrative Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"Financial Statements" means, according to the context in which it is
used, the financial statements referred to in Sections 5.2 and 6.6 or any other
financial statements required to be given to the Lenders pursuant to this
Agreement.
"Final Financing Order" means an order that is entered by the Court
pursuant to Section 364(c) and (d) of the Bankruptcy Code and Bankruptcy Rule
4001(c), which authorizes the incurrence by Borrowers of post-petition secured
indebtedness under the DIP Facility in accordance with the DIP Financing
Documents, confers status as a Superpriority Claim upon all of the Obligations,
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affords adequate protection of the Liens in favor of the Pre-Petition Agents
under the Pre-Petition Loan Documents and is otherwise in form and substance
satisfactory in all respects to the Administrative Agent and the Lenders.
"Final Pre-Petition Lender Protection Order" means an order of the
Court that provides adequate protection to the Liens securing Claims of the
Pre-Petition Lenders and, among other things, provides for a sharing of certain
proceeds of Collateral consisting of Fixed Assets (as defined therein), and is
in form, scope and substance acceptable in all respects to the Administrative
Agent and the Lenders.
"Financing Orders" means the Interim Financing Order and the Final
Financing Order.
"First Priority Pre-Petition Agent" means Bank of America, N.A., in
its capacity as collateral trustee for the First Priority Pre-Petition Lenders
pursuant to a certain Second Amended and Restated Collateral Trust Agreement
dated as of June 9, 1998, among WPS, certain subsidiaries of WPS, the First
Priority Pre-Petition Lenders and Bank of America, N.A. as such collateral
trustee, together with its successors in such capacity.
"First Priority Pre-Petition Lenders" means those Persons who are
party as lenders to the First Priority Pre-Petition Loan Agreement.
"First Priority Pre-Petition Loan Agreement" means that certain
Second Amended and Restated Credit Agreement, dated as of June 9, 1998, among
WPS and certain of its subsidiaries, as Borrowers, the First Priority
Pre-Petition Lenders and the First Priority Pre-Petition Agent, as amended and
in effect on the Petition Date.
"First Priority Pre-Petition Loan Documents" means the First Priority
Pre-Petition Loan Agreement, and all instruments, agreements, pledges,
assignments and other documents executed in connection therewith and with
reference thereto or to evidence or secure payment in whole or in part of the
First Priority Pre-Petition Debt.
"Fiscal Month" means each of the twelve (12) consecutive four- or
five-week periods beginning on the first day of the Fiscal Year, in the pattern
5,4,4 within a Fiscal Quarter.
"Fiscal Quarter" means each of the four consecutive periods of
thirteen (13) weeks, beginning on the first day of the Fiscal Year.
"Fiscal Year" means the Borrowers' fiscal year for financial
accounting purposes beginning on January 1 of each calendar year and ending on
December 31 of the same calendar year and when followed or preceded by the
designation of a calendar year, means such period ending on December 31 of such
designated calendar year.
"Fixed Assets" means the Equipment and Real Estate of the Borrowers.
"Fixed Asset Loss Proceeds" has the meaning specified in Section
7.6(b).
"Fixed Asset Reserve" has the meaning specified in Section 7.6(b).
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"Foreign Subsidiaries" means, collectively, each Subsidiary of a
Borrower that is organized under the laws of a jurisdiction outside the United
States.
"Foreign Subsidiary Advances" means a loan, advance or other
extension of credit by a Borrower to or for the benefit of any Foreign
Subsidiary, including (i) the procuring of a Letter of Credit for the account of
a Borrower to support or secure indebtedness of such Foreign Subsidiary or to
otherwise benefit such Foreign Subsidiary (the original face amount of any such
Letter of Credit being the amount of the Foreign Subsidiary Advance attributable
thereto) and (ii) all amounts paid under any Guaranty from a Borrower with
respect to indebtedness (including indebtedness owing to trade creditors) of
such Foreign Subsidiary.
"Fronting Fee" has the meaning specified in Section 2.6.
"Full Payment" means with respect to any Obligation, the full, final
and indefeasible payment of such Obligation in cash or immediately available
funds and, in the case of any contingent Obligation (including any contingent
Obligation that exists by virtue of an outstanding undrawn Letter of Credit),
the Administrative Agent's receipt of either cash or a direct pay letter of
credit naming the Administrative Agent as beneficiary and in form and substance,
and from an issuing bank, acceptable to the Administrative Agent, in each case
in an amount not less than 105% of the aggregate amount of all such contingent
Obligations.
"Funding Date" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles and practices
set forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of the
Closing Date.
"General Intangibles" means all of the Borrowers' now owned or
hereafter acquired general intangibles, choses in action and causes of action
and all other intangible personal property of the Borrowers of every kind and
nature (other than Accounts), including all contract rights, payment
intangibles, Proprietary Rights, corporate or other business records,
inventions, designs, blueprints, plans, specifications, patents, patent
applications, trademarks, service marks, trade names, trade secrets, goodwill,
copyrights, computer software, customer lists, registrations, licenses,
franchises, tax refund claims, any funds which may become due to a Borrower in
connection with the termination of any Plan or other employee benefit plan or
any rights thereto and any other amounts payable to a Borrower from any Plan or
other employee benefit plan, rights and claims against carriers and shippers,
rights to indemnification, business interruption insurance and proceeds thereof,
property, casualty or any similar type of insurance and any proceeds thereof,
proceeds of insurance covering the lives of key employees on which a Borrower is
beneficiary, rights to receive dividends, distributions, cash, Instruments and
other property in respect of or in exchange for pledged equity interests or
Investment Property and any letter of credit, guarantee, claim, security
interest or other security held by or granted to a Borrower.
"Goods" means all "goods" as defined in the UCC, now owned or
hereafter acquired by a Borrower, wherever located, including embedded software
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to the extent included in "goods" as defined in the UCC, manufactured homes,
standing timber that is cut and removed for sale and unborn young of animals.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guaranty" means, with respect to any Person, all obligations of such
Person which in any manner directly or indirectly guarantee or assure, or in
effect guarantee or assure, the payment or performance of any indebtedness,
dividend or other obligations of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including any such obligations
incurred through an agreement, contingent or otherwise: (a) to purchase the
guaranteed obligations or any property constituting security therefor; (b) to
advance or supply funds for the purchase or payment of the guaranteed
obligations or to maintain a working capital or other balance sheet condition;
or (c) to lease property or to purchase any debt or equity securities or other
property or services.
"Hedge Agreement" means any and all transactions, agreements or
documents now existing or hereafter entered into, which provides for an interest
rate, credit, commodity or equity swap, cap, floor, collar, forward foreign
exchange transaction, currency swap, cross currency rate swap, currency option,
or any combination of, or option with respect to, these or similar transactions,
for the purpose of hedging the Borrowers' exposure to fluctuations in interest
or exchange rates, loan, credit exchange, security or currency valuations or
commodity prices.
"Initial Lenders" means, collectively, Bank of America and Wachovia
Bank, National Association, and "Initial Lender" means either of them.
"Instruments" means all instruments as such term is defined in the
UCC, now owned or hereafter acquired by a Borrower.
"Interest and Fee Letter" means the letter agreement dated June 2,
2003, among the Borrowers, the Administrative Agent, the Initial Lenders and the
Book Managers with respect to the payment of certain fees by the Borrowers in
connection with the structuring, syndication and administration of the DIP
Facility and adjustments to the amount of such fees and the Applicable Margins
in certain circumstances.
"Interest Period" means, as to any LIBOR Revolving Loan, the period
commencing on the Funding Date of such Loan or on the Continuation/Conversion
Date on which the Loan is converted into or continued as a LIBOR Revolving Loan,
and ending on the date one, two, three or six months thereafter as selected by
the Borrowers in their Notice of Borrowing, in the form attached hereto as
Exhibit D, or Notice of Continuation/Conversion, in the form attached hereto as
Exhibit E, provided that:
(a) if any Interest Period would otherwise end on a day that is not a
Business Day, that Interest Period shall be extended to the following Business
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Day unless the result of such extension would be to carry such Interest Period
into another calendar month, in which event such Interest Period shall end on
the preceding Business Day;
(b) any Interest Period pertaining to a LIBOR Revolving Loan that
begins on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and
(c) no Interest Period shall extend beyond the last day of the DIP
Term.
"Interest Rate" means each or any of the interest rates, including
the Default Rate, set forth in Section 2.1.
"Interim Financing Order" means an order that is entered by the Court
pursuant to Section 364(c) and (d) of the Bankruptcy Code and Bankruptcy Rule
4001(c), which authorizes Borrowers to incur, during the Interim Period,
post-petition secured Debt under the DIP Facility in accordance with the DIP
Financing Documents, confers status as a Superpriority Claim upon all of the
Obligations, and is otherwise in form and substance satisfactory in all respects
to the Administrative Agent and the Lenders.
"Interim Period" means the period commencing upon entry of the
Interim Financing Order and ending on the sooner to occur of (i) forty-five (45)
days after entry of the Interim Financing Order (unless extended by the
Administrative Agent and the Majority Lenders in their sole discretion) and (ii)
the date of entry of the Final Financing Order.
"Interim Pre-Petition Lender Protection Order" means an order of the
Court that provides adequate protection to the Liens securing Claims of the
Pre-Petition Lenders and, among other things, provides for a sharing of certain
proceeds of Collateral consisting of Fixed Assets (as defined therein), and is
in form, scope and substance acceptable in all respects to the Administrative
Agent and the Initial Lenders.
"Inventory" means all of the Borrower's now owned and hereafter
acquired inventory, goods and merchandise, wherever located, to be furnished
under any contract of service or held for sale or lease, all returned goods, raw
materials, work-in-process, finished goods (including embedded software), other
materials and supplies of any kind, nature or description which are used or
consumed in the Borrowers' business or used in connection with the packing,
shipping, advertising, selling or finishing of such goods, merchandise, and all
documents of title or other Documents representing them.
"Inventory Formula Amount" means, on any date of determination, (a)
prior to the Administrative Agent's receipt of an acceptable appraisal of the
net orderly liquidation value of the Borrowers' Inventory, an amount equal to
the lesser of (i) the Maximum Inventory Loan Amount and (ii) the greater of (A)
$120,000,000 and (B) fifty percent (50%) of the Value of Eligible Inventory; and
(b) after the Administrative Agent's receipt of an acceptable appraisal of the
net orderly liquidation value of the Borrowers' Inventory, an amount equal to
the lesser of (i) the Maximum Inventory Loan Amount and (ii) the lesser of (A)
sixty-five percent (65%) of the Value of Eligible Inventory and (B) the
Inventory NOLV Factor in effect on such date multiplied by the Value of Eligible
Inventory.
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"Inventory NOLV Factor" means, at any time, a fraction, the numerator
of which is equal to eighty-five percent (85%) of the orderly liquidation value,
net of liquidation expenses, of the Borrowers' Eligible Inventory and the
denominator of which is the Value of such Eligible Inventory, in each case as
most recently determined and reported on by a qualified independent appraiser
selected by Administrative Agent or, at Administrative Agent's election, by
professional appraisers employed by Administrative Agent.
"Investment Property" means all of the Borrowers' right title and
interest in and to any and all: (a) securities whether certificated or
uncertificated; (b) securities entitlements; (c) securities accounts; (d)
commodity contracts; or (e) commodity accounts.
"IRS" means the Internal Revenue Service and any Governmental
Authority succeeding to any of its principal functions under the Code.
"KERP" means a key employee retention program proposed by a Borrower
with respect to its officers and employees.
"Latest Projections" means: (a) on the Closing Date and thereafter
until the Administrative Agent receives new projections pursuant to Section
5.2(e), the Budget; and (b) thereafter, the projections most recently received
by the Administrative Agent pursuant to Section 5.2(f).
"Lender" and "Lenders" have the meanings specified in the
introductory paragraph hereof and shall include the Administrative Agent to the
extent of any Agent Advance outstanding and Bank of America to the extent of any
Non-Ratable Loan outstanding; provided that no such Agent Advance or Non-Ratable
Loan shall be taken into account in determining any Lender's Pro Rata Share.
"Letter of Credit" has the meaning specified in Section 1.3(a).
"Letter of Credit Fee" has the meaning specified in Section 2.6.
"Letter of Credit Issuer" means Bank of America, any affiliate of
Bank of America or any other financial institution that is designated by the
Administrative Agent as an authorized issuer of a Letter of Credit pursuant to
this Agreement. "Letter of Credit Issuer Amounts" has the meaning specified in
Section 2.6.
"Letter of Credit Subfacility" means $75,000,000.
"LIBOR Interest Payment Date" means, with respect to a LIBOR
Revolving Loan, the Commitment Termination Date, the last day of each Interest
Period applicable to such Loan and, with respect to each Interest Period of
greater than one month, on the first day of each month during such Interest
Period.
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"LIBOR Rate" means, for any Interest Period, with respect to LIBOR
Revolving Loans, the rate of interest per annum determined pursuant to the
following formula:
LIBOR Rate = Offshore Base Rate
--------------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Offshore Base Rate" means the rate per annum appearing on Telerate
Page 3750 (or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period for a term comparable
to such Interest Period. If for any reason such rate is not available, the
Offshore Base Rate shall be, for any Interest Period, the rate per annum
appearing on Reuters Screen LIBO Page as the London interbank offered rate
for deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates. If for any reason none of the
foregoing rates is available, the Offshore Base Rate shall be, for any
Interest Period, the rate per annum determined by Administrative Agent as
the rate of interest at which dollar deposits in the approximate amount of
the LIBOR Revolving Loan comprising part of such Borrowing would be offered
by Bank of America's London Branch to major banks in the offshore dollar
market at their request at or about 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period for a term comparable
to such Interest Period.
"Eurodollar Reserve Percentage" means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, rounded upward to
the next 1/100th of 1%) in effect on such day applicable to member banks
under regulations issued from time to time by the Federal Reserve Board for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as "Eurocurrency liabilities").
The Offshore Rate for each outstanding LIBOR Revolving Loan shall be
adjusted automatically as of the effective date of any change in the
Eurodollar Reserve Percentage.
"LIBOR Revolving Loan" means a Revolving Loan during any period in
which it bears interest based on the LIBOR Rate.
"License Agreement" means an agreement between one or more Borrowers
and another Person pursuant to which such other Person (the "licensor") licenses
to a Borrower the right to use such licensor's Proprietary Rights in connection
with such Borrower's manufacturing, marketing, sale or other distribution of
Goods.
"Lien" means: (a) any interest in property securing an obligation
owed to, or a claim by, a Person other than the owner of the property, whether
such interest is based on the common law, statute, or contract, and including a
security interest, charge, claim, or lien arising from a mortgage, deed of
trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement,
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agreement, security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes; (b) to the extent not included
under clause (a), any reservation, exception, encroachment, easement,
right-of-way, covenant, condition, restriction, lease or other title exception
or encumbrance affecting property; and (c) any contingent or other agreement to
provide any of the foregoing.
"Loan Account" means the loan account of the Borrowers, which account
shall be maintained by the Administrative Agent.
"Loans" means, collectively, all loans and advances provided for in
Article 1.
"Majority Lenders" means, at any date of determination, Lenders whose
Pro Rata Shares aggregate more than 50%.
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change in, or
a material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of any Borrower, any other Obligor or the
Collateral; (b) a material impairment of the ability of any Borrower, any
Affiliate of a Borrower or any other Obligor to perform under any DIP Financing
Document to which it is a party; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against any Obligor of any
DIP Financing Document to which it is a party; provided, however, that the
commencement of the Chapter 11 Cases and the application to the Borrowers of the
provisions of the Bankruptcy Code and the Rules of Bankruptcy Procedure shall
not, in and of themselves, be deemed to have a Material Adverse Effect.
"Maximum Inventory Loan Amount" means, at any time, $200,000,000.
"Maximum Revolver Amount" means (i) at any time during the Interim
Period, $175,000,000, or such greater amount, not to exceed $300,000,000, as the
Administrative Agent and the Majority Lenders may permit, and (ii) at any time
after the Interim Period, $300,000,000.
"Mortgages" means and includes any and all of the mortgages, deeds of
trust, deeds to secure debt, assignments and other instruments to be executed
and delivered by the Borrowers to or for the benefit of the Administrative Agent
and by which the Administrative Agent, on behalf of the Lenders, acquires a Lien
on the Real Estate or a collateral assignment of a Borrower's interest under
leases of Real Estate, and all amendments, modifications and supplements
thereto.
"Multi-employer Plan" means a "multi-employer plan" as defined in
Section 4001(a)(3) of ERISA which is or was at any time during the current year
or the immediately preceding six (6) years contributed to by the Borrower or any
ERISA Affiliate.
"Net Amount of Eligible Accounts" means, at any time, the gross
amount of Eligible Accounts less sales, excise or similar taxes, and less
returns, discounts, claims, credits and allowances, accrued rebates, offsets,
deductions, counterclaims, disputes and other defenses of any nature at any time
issued, owing, granted, outstanding, available or claimed.
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""Net Proceeds" means, with respect to any sale or other disposition
of Fixed Assets (as defined in the Pre-Petition Lender Protection Orders), the
net proceeds received in respect thereof, net of (i) brokerage or sales
commissions payable in connection with such disposition and (ii) any amount
necessary to pay or settle any Lien upon any assets that are being sold or
otherwise disposed of to the extent that such Lien is legal, valid, perfected
and unavoidable or is disputed and proceeds are required to be escrowed by the
Court pending resolution of such dispute.
"Non-Ratable Loan" and "Non-Ratable Loans" have the meanings
specified in Section 1.2(i).
"Notice of Borrowing" has the meaning specified in Section 1.2(b).
"Notice of Continuation/Conversion" has the meaning specified in
Section 2.2(b).
"Obligations" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by the Borrowers to
the Administrative Agent and/or any Lender, arising under or pursuant to this
Agreement or any of the other DIP Financing Documents, whether or not evidenced
by any note, or other instrument or document, whether arising from an extension
of credit, opening of a letter of credit, acceptance, loan, guaranty,
indemnification or otherwise, whether direct or indirect, absolute or
contingent, due or to become due, primary or secondary, as principal or
guarantor, and including all principal, interest, charges, expenses, fees,
attorneys' fees, filing fees and any other sums chargeable to the Borrowers
hereunder or under any of the other DIP Financing Documents. "Obligations"
includes, without limitation, (a) all debts, liabilities, and obligations now or
hereafter arising from or in connection with the Letters of Credit, (b) all
Loans, and (c) all debts, liabilities and obligations now or hereafter arising
from or in connection with Bank Products.
"Obligor" means each Borrower, each Subsidiary Guarantor and each
other Person that is at any time liable for the payment of the whole or any part
of the Obligations or that has granted in favor of the Administrative Agent, for
the benefit of the Lenders, a Lien upon any of any of such Person's assets to
secure payment of any of the Obligations.
"Ordinary Course of Business" means, with respect to any Person, the
ordinary course of such Person's business, as conducted by such Person in
accordance with past practices and undertaken by such Person in good faith and
not for the purpose of evading any covenant or restriction in any DIP Financing
Document or Pre-Petition Loan Document.
"Other Taxes" means any present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies which arise
from any payment made hereunder or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or any other DIP Financing
Documents.
"Overadvance Condition" means and shall be deemed to exist at any
time (a) the sum of (i) the aggregate outstanding principal amount of Revolving
Loans, (ii) one hundred percent (100%) of the aggregate undrawn face amount of
all outstanding Letters of Credit, and (iii) the aggregate amount of all unpaid
reimbursement obligations in respect of Letters of Credit exceeds (b) the lesser
of (i) the Maximum Revolver Amount and (ii) the Borrowing Base.
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"Participant" means any Person who shall have been granted the right
by any Lender to participate in the financing provided by such Lender under this
Agreement, and who shall have entered into a participation agreement in form and
substance satisfactory to such Lender.
"Patent and Trademark Agreements" means, collectively, the Patent
Security Agreements and Trademark Security Agreements to be executed and
delivered by the Borrowers to the Administrative Agent to evidence and perfect
the Administrative Agent's security interest in the Borrowers' present and
future patents, trademarks, and related licenses and rights, for the benefit of
the Administrative Agent and the Lenders.
"Paying Borrower" has the meaning specified in Section 3.9(d).
"Payment Account" means each bank account established pursuant to the
Security Agreement, to which the proceeds of Accounts and other Collateral are
deposited or credited, and which is maintained in the name of the Administrative
Agent or in the name of a Borrower, as the Administrative Agent may determine,
on terms acceptable to the Administrative Agent.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to the functions thereof.
"Pending Revolving Loans" means, at any time, the aggregate principal
amount of all Revolving Loans requested in any Notice of Borrowing received by
the Administrative Agent which have not yet been advanced.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which a Borrower sponsors, maintains, or to
which it makes, is making, or is obligated to make contributions, or in the case
of a Multi-employer Plan has made contributions at any time during the
immediately preceding five (5) plan years.
"Permitted Liens" means:
(a) Liens for taxes (i) in existence on the Petition Date, provided
that the aggregate amount of such taxes (other than sales, license and property
taxes) does not exceed in aggregate $100,000, and Liens for property taxes were
not past due or payable on the Petition Date or (ii) incurred in the Ordinary
Course of Business of a Borrower after the Petition Date not past due or payable
or payment of which is being contested in good faith and by appropriate
proceedings diligently pursued and as to which adequate financial reserves have
been established on Borrowers' books and records and a stay of enforcement of
any such Lien is in effect, but only to the extent, in the case of clause (ii),
such taxes do not create a Lien superior to the Administrative Agent's Liens
with respect to the Collateral;
(b) the Administrative Agent's Liens;
(c) Liens consisting of deposits made in the Ordinary Course of
Business in connection with, or to secure payment of, obligations under worker's
compensation, unemployment insurance, social security and other similar laws, or
to secure the performance of bids, tenders or contracts (other than for the
repayment of Debt) or to secure indemnity, performance or other similar bonds
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for the performance of bids, tenders or contracts (other than for the repayment
of Debt) or to secure statutory obligations (other than liens arising under
ERISA or Environmental Liens) or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds;
(d) Liens securing the pre-Petition Date and post-Petition Date
claims or demands of materialmen, mechanics, carriers, warehousemen, landlords
and other like Persons, provided, in the case of Liens securing such
post-Petition Date claims, that if any such Lien arises from the nonpayment of
such claims or demand when due, such claims or demands do not exceed $100,000 in
the aggregate;
(e) Liens constituting encumbrances in the nature of reservations,
exceptions, encroachments, easements, rights of way, covenants running with the
land, and other similar title exceptions or encumbrances affecting any Real
Estate; provided that they do not in the aggregate materially detract from the
value of the Real Estate or materially interfere with its use in the ordinary
conduct of any Borrower's business;
(f) Liens arising after the Petition Date from judgments and
attachments in connection with court proceedings, provided that the attachment
or enforcement of such Liens would not result in an Event of Default hereunder,
such Liens are at all times junior to the Liens in favor of Administrative
Agent, and such Liens are being contested in good faith by appropriate
proceedings, adequate reserves have been set aside and no material Property is
subject to a material risk of loss or forfeiture and the claims in respect of
such Liens are fully covered by insurance (subject to ordinary and customary
deductibles) and a stay of execution pending appeal or proceeding for review is
in effect;
(g) Liens in existence on the Petition Date in favor of the
Pre-Petition Lenders and Liens granted in favor of the Pre-Petition Lenders as
adequate protection pursuant to the Pre-Petition Lender Protection Orders;
(h) Purchase Money Liens and Liens in existence on the Petition Date
with respect to Equipment securing indebtedness under Capital Leases;
(i) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of Goods and other Liens incurred in the Ordinary Course of Business
of the Borrowers in favor of the United States of America or any State thereof,
or any department, agency or instrumentality or political subdivision of the
United States of America or any State thereof, to secure partial, progress,
advance or other payments pursuant to any contract, to the extent such duties
and payments are paid when due and payable by the Borrowers;
(j) Liens incurred in the Ordinary Course of Business of the
Borrowers to secure performance under cotton futures contracts in connection
with transactions or positions in a contract for future delivery of cotton,
provided that reserves in accordance with GAAP have been provided on the books
of the Person who incurred such Liens; and
(k) Liens in favor of WPSRC with respect to Purchased Receivables and
related assets purchased by WPSRC from WPS prior to the Petition Date.
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In no event shall any Lien in favor of WPSRC or any of its assignees, including
Wachovia Bank, National Association or Congress, with respect to any Accounts
arising after the Petition Date, be deemed to be a Permitted Lien.
"Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, Governmental Authority, or any other entity.
"Petition Date" means June 1, 2003.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which a Borrower sponsors or maintains or to which a Borrower makes, is
making, or is obligated to make contributions and includes any Pension Plan.
"Plant Shutdown Costs" means the following non-recurring charges,
more specifically described in the 2002 Restructuring Plan, in an aggregate
amount not to exceed $36,500,000 ($23,360,000 after tax), that are incurred,
accrued or reserved by the Borrowers or their consolidated Subsidiaries during
Fiscal Years 2002 through 2004 in connection with the closing and consolidation
of certain facilities: (i) direct inventory write-offs and/or related increases
in inventory reserves; (ii) write-offs of fixed assets and non-capitalized
relocation charges; (iii) write-offs of intangibles related to impaired assets;
and (iv) without duplication, relocation, severance, unabsorbed overhead and
other related costs.
"Pledge Agreements" means, collectively, each pledge agreement to be
executed and delivered by a Borrower, pursuant to which such Borrower shall
pledge to the Administrative Agent, as security for the Obligations, all of the
issued and outstanding capital stock and other securities held by it of its
Subsidiaries.
"Pre-Petition Agents" means, collectively, the First Priority
Pre-Petition Agent and the Second Priority Pre-Petition Agent.
"Pre-Petition Debt" means all Debts and other obligations of
Borrowers or any other Obligor to the Pre-Petition Agents or any Pre-Petition
Lender on the Petition Date and that arise under any of the Pre-Petition Loan
Documents, whether direct or indirect, absolute or contingent or due or to
become due, including all interest thereon accruing after the Petition Date and
all legal fees and collection expenses heretofore or hereafter incurred in
collecting any of such indebtedness.
"Pre-Petition Lender Protection Orders" means, collectively, the
Interim Pre-Petition Lender Protection Order and the Final Pre-Petition Lender
Protection Order.
"Pre-Petition Lenders" means, collectively, the First Priority
Pre-Petition Lenders and the Second Priority Pre-Petition Lenders.
"Pre-Petition Loan Documents" means the First Priority Pre-Petition
Loan Agreement, the Second Priority Pre-Petition Loan Agreement and all
instruments, agreements, pledges, assignments and other documents executed in
connection therewith and with reference thereto or to evidence or secure payment
in whole or in part of the Pre-Petition Debt.
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"Professional Expenses" means the fees and reimbursable expenses of a
Professional Person.
"Professional Person" means a Person who is an attorney, accountant,
appraiser, auctioneer or other professional person and who is retained, with
Court approval, by (i) Borrowers pursuant to Section 327 or 328 of the
Bankruptcy Code or (ii) a Committee pursuant to Section 1103(a) of the Code.
"Proprietary Rights" means all of a Person's now owned and hereafter
arising or acquired: licenses, franchises, permits, patents, patent rights,
copyrights, works which are the subject matter of copyrights, trademarks,
service marks, trade names, trade styles, patent, trademark and service xxxx
applications, and all licenses and rights related to any of the foregoing,
including, in the case of Borrowers, those patents, trademarks, service marks,
trade names and copyrights set forth on Schedule 6.12 hereto, and all other
rights under any of the foregoing, all extensions, renewals, reissues,
divisions, continuations, and continuations-in-part of any of the foregoing, and
all rights to xxx for past, present and future infringement of any of the
foregoing.
"Pro Rata Share" means, with respect to a Lender, a fraction
(expressed as a percentage), the numerator of which is the amount of such
Lender's Commitment and the denominator of which is the sum of the amounts of
all of the Lenders' Commitments, or if no Commitments are outstanding, a
fraction (expressed as a percentage), the numerator of which is the amount of
Obligations owed to such Lender and the denominator of which is the aggregate
amount of the Obligations owed to the Lenders, in each case giving effect to a
Lender's participation in Non-Ratable Loans and Agent Advances.
"Purchased Receivables" means Accounts purchased by WPSRC from WPS
pursuant to the Receivables Purchase Agreement.
"Purchase Money Debt" means and includes (i) Debt (other than the
Obligations) for the payment of all or any part of the purchase price of any
Equipment, (ii) any Debt (other than the Obligations) incurred at the time of or
within 10 days prior to or after the acquisition of any Equipment for the
purpose of financing all or any part of the purchase price thereof, and (iii)
any renewals, extensions or refinancings thereof, but not any increases in the
principal amounts thereof outstanding at the time.
"Purchase Money Lien" means a Lien upon Equipment which secures Debt
incurred by a Borrower to acquire such Equipment, but only if such Lien shall at
all times be confined solely to the Equipment acquired through the incurrence of
the Debt secured by such Lien.
"Real Estate" means all of the Borrowers' now or hereafter owned or
leased estates in real property, including all fees, leaseholds and future
interests, together with all of the Borrowers' now or hereafter owned or leased
interests in the improvements thereon, the fixtures attached thereto and the
easements appurtenant thereto.
"Receivables Purchase Agreement" means the Second Amended and
Restated Receivables Purchase Agreement dated as of March 28, 2003, between WPS
and WPSRC.
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"Reclamation Claim" means a Claim against a Borrower under Section
546(c)(2)(A) of the Bankruptcy Code.
"Reduction Event Reserve" means, on any date, an amount equal to the
aggregate of (i) the total of the Net Proceeds received by the Administrative
Agent from the sale or other disposition of Fixed Assets (as defined in the
Pre-Petition Lender Protection Orders) and applied to the Obligations on or
before such date and (ii) the amount of Excess Casualty/Condemnation Proceeds
added to the Reduction Event Reserve pursuant to Section 7.6(b).
"Release" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Contaminant into the indoor or outdoor environment or into or out of any Real
Estate or other property, including the movement of Contaminants through or in
the air, soil, surface water, groundwater or Real Estate or other property.
"Renewal Notice" has the meaning specified in Section 3.2(b).
"Renewal Period" has the meaning specified in Section 3.2(b).
"Reorganization Plan" means a plan of reorganization proposed by
Borrowers or any other Person (including Administrative Agent or any Lender) in
the Chapter 11 Cases.
"Reportable Event" means, any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, other than (i) any such event
for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC and (ii) the commencement of the Chapter 11
Cases.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Responsible Officer" means the chief executive officer or the
president of a Borrower, or any other officer having substantially the same
authority and responsibility; or, with respect to compliance with financial
covenants and the preparation of the Borrowing Base Certificate, the chief
financial officer, controller or the treasurer of a Borrower, or any other
officer having substantially the same authority and responsibility.
"Restricted Investment" means, as to a Borrower, any acquisition of
property by such Borrower in exchange for cash or other property, whether in the
form of an acquisition of stock, debt, or other indebtedness or obligation, or
the purchase or acquisition of any other property, or a loan, advance, capital
contribution, or subscription, except the following: (a) acquisitions of
Equipment to be used in the business of such Borrower so long as the acquisition
costs thereof constitute Capital Expenditures permitted hereunder; (b)
acquisitions of Inventory in the Ordinary Course of Business of such Borrower;
(c) acquisitions of current assets acquired in the Ordinary Course of Business
of such Borrower; (d) direct obligations of the United States of America, or any
agency thereof, or obligations guaranteed by the United States of America,
provided that such obligations mature within one year from the date of
acquisition thereof; (e) acquisitions of certificates of deposit maturing within
A-28
one year from the date of acquisition, bankers' acceptances, Eurodollar bank
deposits, or overnight bank deposits, in each case issued by, created by, or
with a bank or trust company organized under the laws of the United States of
America or any state thereof having capital and surplus aggregating at least
$100,000,000; (f) acquisitions of commercial paper given a rating of "A2" or
better by Standard & Poor's Corporation or "P2" or better by Xxxxx'x Investors
Service, Inc. and maturing not more than 90 days from the date of creation
thereof; and (g) Hedge Agreements.
"Revolving Loans" has the meaning specified in Section 1.2 and
includes each Agent Advance and Non-Ratable Loan.
"Royalties" means royalties that are payable by Borrowers in respect
of Proprietary Rights licensed to them in connection with the manufacture, sale
or distribution by one or more Borrowers of any Inventory or other Goods.
"Royalty Reserve" means, on any date, an amount equal to the sum of
(i) all Royalties that are past due and payable by each Borrower on such date,
and (ii) if Availability on such date is less than $75,000,000, a sum equal to
the amount, if any, by which all accrued Royalties on such date (whether or not
then due and payable, but excluding any accruals for guaranteed or minimum
Royalties that are calculated without regard to actual sales of Inventory)
exceeds $5,000,000 (such excess, if any, referred to as the "Accrued Royalty
Reserve"); provided, that if, after any imposition of the Accrued Royalty
Reserve, Availability on any date, calculated without giving effect to such
Accrued Royalty Reserve, is at least $75,000,000 (each such date, a "Royalty
Reserve Cure Date"), then the Accrued Royalty Reserve shall not thereafter be
included in the calculation of the Royalty Reserve unless and until Availability
is again less than $75,000,000, in which event the Accrued Royalty Reserve shall
be included in the calculation of the Royalty Reserve until the next Royalty
Reserve Cure Date.
Second Priority Pre-Petition Agent" means Wilmington Trust Company,
in its capacity as administrative agent under the Second Priority Pre-Petition
Loan Documents, together with its successors in such capacity.
"Second Priority Pre-Petition Lenders" means those Persons who are
party as lenders to the Second Priority Pre-Petition Loan Agreement.
"Second Priority Pre-Petition Loan Agreement" means that certain
Credit Agreement, dated as of June 29, 2001, among WPS, as Borrower, the Second
Priority Pre-Petition Lenders and the Second Priority Pre-Petition Agent, as
amended and in effect on the Petition Date.
"Second Priority Pre-Petition Loan Documents" means the Second
Priority Pre-Petition Loan Agreement, and all instruments, agreements, pledges,
assignments and other documents executed in connection therewith and with
reference thereto or to evidence or secure payment in whole or in part of the
Second Priority Pre-Petition Debt.
"Security Agreement" means the Security Agreement of even date
herewith among Borrowers and Administrative Agent for the benefit of
Administrative Agent and the Lenders.
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"Security Documents" means any and all other instruments and
agreements now or at any time hereafter securing the whole or any part of the
Obligations, including the Security Agreement, the Mortgages, the Patent and
Trademark Agreements, each Subsidiary Guaranty and each Subsidiary Security
Agreement, the Pledge Agreements and each other assignment, instrument or other
document as may be requested by the Administrative Agent in order to evidence of
record, or to validate under applicable non-bankruptcy law the perfection of,
the Liens granted by the Borrowers in favor of the Administrative Agent pursuant
to the DIP Financing Documents.
"Settlement" and "Settlement Date" have the meanings specified in
Section 12.15(a)(ii).
"Software" means all "software" as such term is defined in the UCC,
now owned or hereafter acquired by the Borrower, other than software embedded in
any category of Goods, including all computer programs and all supporting
information provided in connection with a transaction related to any program.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than fifty percent (50%) of the Voting Stock or other equity
interests (in the case of Persons other than corporations), is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of a Borrower.
"Subsidiary Guarantor" means each Subsidiary that becomes a
Subsidiary Guarantor pursuant to Section 7.35.
"Subsidiary Guaranty" means a guaranty agreement to be executed by a
Subsidiary Guarantor in favor of the Administrative Agent, for the benefit of
the Lenders, by which such Subsidiary Guarantor shall guarantee payment and
performance of the Obligations, which guaranty agreement shall be in form and
substance satisfactory to the Administrative Agent.
"Subsidiary Security Agreement" means a security agreement, pledge
agreement, mortgage, hypothecation, general charge or other document creating or
perfecting a Lien to be executed by a Subsidiary Guarantor in favor of the
Administrative Agent by which such Subsidiary Guarantor shall grant to the
Administrative Agent, for the benefit of the Administrative Agent and the
Lenders, a Lien upon any or all of such Subsidiary Guarantor's assets (as may be
designated by the Administrative Agent), whenever acquired and wherever located,
as security for the payment of the Obligations, which security agreement shall
be in form and substance satisfactory to the Administrative Agent.
"Supermajority Lenders" means at any time Lenders whose Pro Rata
Shares aggregate more than 66-2/3%.
"Superpriority Claim" means a claim against one or more Borrowers in
the Chapter 11 Cases that is an administrative expense claim having priority
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over any and all administrative expenses of the kind specified in Sections
503(b) or l507(b) of the Bankruptcy Code, including a claim pursuant to Section
364(c)(1) of the Bankruptcy Code.
"Syndication Agent" has the meaning specified in the Recitals to this
Agreement.
"Taxes" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Administrative Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by the
Administrative Agent's or each Lender's net income in any the jurisdiction
(whether federal, state or local and including any political subdivision
thereof) under the laws of which such Lender or the Administrative Agent, as the
case may be, is organized or maintains a lending office.
"UCC" means the Uniform Commercial Code, as in effect from time to
time, of the State of New York or of any other state the laws of which are
required as a result thereof to be applied in connection with the issue of
perfection of security interests; provided, that to the extent that the UCC is
used to define any term herein or in any other documents and such term is
defined differently in different Articles or Divisions of the UCC, the
definition of such term contained in Article or Division 9 shall govern.
"Unfunded Pension Liability" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.
"Unused Letter of Credit Subfacility" means, on any date, an amount
equal to $75,000,000 minus the sum of (a) the aggregate undrawn amount of all
Letters of Credit outstanding on such date plus, without duplication, (b) the
aggregate unpaid reimbursement obligations on such date with respect to all
Letters of Credit.
"Unused Line Fee" has the meaning specified in Section 2.5.
"Value", when used with reference to the value of Eligible Inventory,
means value determined on the basis of the lower of cost or market of such
Eligible Inventory, with the cost thereof calculated on a first-in, first-out
basis, determined in accordance with GAAP.
"Voting Stock" means, with respect to any Person, capital stock or
other securities issued by such Person the holders of which are ordinarily, in
the absence of contingencies, entitled to vote for the election of directors (or
individuals performing similar functions) of such Person, even though the right
so to vote has been suspended by the happening of such a contingency.
"WPS" has the meaning specified in the Recitals to this Agreement.
"WPSRC" means WPS Receivables Corporation, a Delaware corporation.
Accounting Terms. Any accounting term used in this Agreement shall
have, unless otherwise specifically provided herein, the meaning customarily
given in accordance with GAAP, and all financial computations in this Agreement
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shall be computed, unless otherwise specifically provided therein, in accordance
with GAAP as consistently applied and using the same method for inventory
valuation as used in the preparation of the Financial Statements.
Interpretive Provisions. (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar words refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and Subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including,"
the words "to" and "until" each mean "to but excluding" and the word
"through" means "to and including."
(iv) The word "or" is not exclusive.
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any DIP Financing Document, and (ii) references to any statute or
regulation are to be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting the
statute or regulation.
(e) The captions and headings of this Agreement and other DIP
Financing Documents are for convenience of reference only and shall not affect
the interpretation of this Agreement.
(f) This Agreement and other DIP Financing Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(g) For purposes of Section 9.1, a breach of a financial covenant
contained in Sections 7.22-7.23 shall be deemed to have occurred as of any date
of determination thereof by the Administrative Agent or as of the last day of
any specified measuring period, regardless of when the Financial Statements
reflecting such breach are delivered to the Administrative Agent.
(h) This Agreement and the other DIP Financing Documents are the
result of negotiations among and have been reviewed by counsel to the
Administrative Agent, the Borrower and the other parties, and are the products
of all parties. Accordingly, they shall not be construed against the Lenders or
the Administrative Agent merely because of the Administrative Agent's or
Lenders' involvement in their preparation.
A-32
ANNEX B
TO
CREDIT AGREEMENT
----------------
DESIGNATED ACCOUNT DEBTORS
--------------------------
Wal-Mart 35%
Target 35%
EXHIBIT A
RESERVED
--------
EXHIBIT B
FORM OF BORROWING BASE CERTIFICATE
PLEASE SEE ATTACHED
EXHIBIT C
FINANCIAL STATEMENTS
PLEASE SEE ATTACHED
EXHIBIT D
NOTICE OF BORROWING
Date: ______________, 200_
To: Bank of America, N.A. as Administrative Agent for the Lenders who are
parties to the Credit Agreement dated as of June 2, 2003 (as extended,
renewed, amended or restated from time to time, the "Credit Agreement")
among the Borrowers which are signatories thereto, the Lenders which are
signatories thereto and Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
The undersigned, ___________________________ refers to the Credit
Agreement, the terms defined therein being used herein as therein defined, and
hereby gives you notice irrevocably of the Borrowing specified below:
1. The Business Day of the proposed Borrowing is_____________, 200_.
2. The aggregate amount of the proposed Borrowing is $______________.
3. The Borrowing is to be comprised of $____ of Base Rate and $____
of LIBOR Revolving Loans.
4. The duration of the Interest Period for the LIBOR Revolving Loans,
if any, included in the Borrowing shall be _____ months.
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the proposed Borrowing,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) The representations and warranties of the Borrowers contained in
the Credit Agreement are true and correct as though made on and as of such date;
(b) No Default or Event of Default has occurred and is continuing, or
would result from such proposed Borrowing; and
(c) The proposed Borrowing will not cause the aggregate principal
amount of all outstanding Revolving Loans plus the aggregate amount available
for drawing under all outstanding Letters of Credit, to exceed the Borrowing
Base or the combined Commitments of the Lenders.
[NAME OF BORROWER]
By: ____________________________
Title: ____________________________
2
EXHIBIT E
NOTICE OF CONTINUATION/CONVERSION
---------------------------------
Date:________________, 200_
To: Bank of America, N.A. as Administrative Agent for the Lenders who are
parties to the Credit Agreement dated as of June 2, 2003 (as extended,
renewed, amended or restated from time to time, the "Credit Agreement")
among the Borrowers which are signatories thereto, the Lenders which are
signatories thereto and Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
The undersigned, ___________________________ refers to the Credit
Agreement, the terms defined therein being used herein as therein defined, and
hereby gives you notice irrevocably of the [conversion] [continuation] of the
Loans specified herein, that:
1. The Continuation/Conversion Date is___________ , 200_.
2. The aggregate amount of the Loans to be [converted]
[continued] is $ .
3. The Loans are to be [converted into] [continued as] [LIBOR
Rate] [Base Rate] Loans.
4. The duration of the Interest Period for the LIBOR Revolving
Loans included in the [conversion] [continuation] shall be
months.
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the proposed
Continuation/Conversion Date, before and after giving effect thereto and to the
application of the proceeds therefrom:
(a) The representations and warranties of the Borrower contained in
the Credit Agreement are true and correct as though made on and as of such date;
(b) Default or Event of Default has occurred and is continuing, or
would result from such proposed [conversion] [continuation]; and
(c) The proposed conversion-continuation will not cause the aggregate
principal amount of all outstanding Revolving Loans [plus the aggregate amount
available for drawing under all outstanding Letters of Credit] to exceed the
Borrowing Base or the combined Commitments of the Lenders.
[NAME OF BORROWER]
By: _______________________________
Title: _______________________________
2
EXHIBIT F
[FORM OF] ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
Acceptance") dated as of ____________________, 200_ is made between
______________________________ (the "Assignor") and __________________________
(the "Assignee").
RECITALS
WHEREAS, the Assignor is party to that certain Credit Agreement dated
as of June 2, 2003 (as amended, amended and restated, modified, supplemented or
renewed, the "Credit Agreement") among _________________________________ (the
"Borrowers"), the several financial institutions from time to time party thereto
(including the Assignor, the "Lenders"), and Bank of America, N. A., as agent
for the Lenders (the "Administrative Agent"). Any terms defined in the Credit
Agreement and not defined in this Assignment and Acceptance are used herein as
defined in the Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the Assignor has
committed to making Loans (the "Committed Loans") to the Borrowers in an
aggregate amount not to exceed $__________ (the "Commitment");
WHEREAS, the Assignor has made Committed Loans in the aggregate
principal amount of $__________ to the Borrowers;
WHEREAS, [the Assignor has acquired a participation in its pro rata
share of the Lenders' liabilities under Letters of Credit in an aggregate
principal amount of $____________ (the "L/C Obligations")] [no Letters of Credit
are outstanding under the Credit Agreement]; and
WHEREAS, the Assignor wishes to assign to the Assignee
[part of the] [all] rights and obligations of the Assignor under the Credit
Agreement in respect of its Commitment, together with a corresponding portion of
each of its outstanding Committed Loans and L/C Obligations, in an amount equal
to $__________ (the "Assigned Amount") on the terms and subject to the
conditions set forth herein and the Assignee wishes to accept assignment of such
rights and to assume such obligations from the Assignor on such terms and
subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers and assigns to the
Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes from
the Assignor, without recourse and without representation or warranty (except as
provided in this Assignment and Acceptance) __% (the "Assignee's Percentage
Share") of (A) the Commitment, the Committed Loans and the L/C Obligations of
the Assignor and (B) all related rights, benefits, obligations, liabilities and
indemnities of the Assignor under and in connection with the Credit Agreement
and the DIP Financing Documents.
(b) With effect on and after the Effective Date (as defined in
Section 5 hereof), the Assignee shall be a party to the Credit Agreement and
succeed to all of the rights and be obligated to perform all of the obligations
of a Lender under the Credit Agreement, including the requirements concerning
confidentiality and the payment of indemnification, with a Commitment in an
amount equal to the Assigned Amount. The Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender. It is the
intent of the parties hereto that the Commitment of the Assignor shall, as of
the Effective Date, be reduced by an amount equal to the Assigned Amount and the
Assignor shall relinquish its rights and be released from its obligations under
the Credit Agreement to the extent such obligations have been assumed by the
Assignee; provided, however, the Assignor shall not relinquish its rights under
Sections __ and __ of the Credit Agreement to the extent such rights relate to
the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignee's Commitment will be $__________.
(d) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignor's Commitment will be $__________.
2. Payments.
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, the Assignee shall pay to the Assignor on the
Effective Date in immediately available funds an amount equal to $__________,
representing the Assignee's Pro Rata Share of the principal amount of all
Committed Loans.
(b) The Assignee further agrees to pay to the Administrative Agent a
processing fee in the amount specified in Section 11.2(a) of the Credit
Agreement.
3. Reallocation of Payments.
Any interest, fees and other payments accrued to the Effective Date
with respect to the Commitment, and Committed Loans and L/C Obligations shall be
for the account of the Assignor. Any interest, fees and other payments accrued
on and after the Effective Date with respect to the Assigned Amount shall be for
the account of the Assignee. Each of the Assignor and the Assignee agrees that
it will hold in trust for the other party any interest, fees and other amounts
which it may receive to which the other party is entitled pursuant to the
preceding sentence and pay to the other party any such amounts which it may
receive promptly upon receipt.
4. Independent Credit Decision.
The Assignee (a) acknowledges that it has received a copy of the
Credit Agreement and the Schedules and Exhibits thereto, together with copies of
2
the most recent financial statements of the Borrowers, and such other documents
and information as it has deemed appropriate to make its own credit and legal
analysis and decision to enter into this Assignment and Acceptance; and (b)
agrees that it will, independently and without reliance upon the Assignor, the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit and legal decisions in taking or not taking action under the Credit
Agreement.
5. Effective Date; Notices.
(a) As between the Assignor and the Assignee, the effective date for
this Assignment and Acceptance shall be __________, 200_ (the "Effective Date");
provided that the following conditions precedent have been satisfied on or
before the Effective Date:
(i) this Assignment and Acceptance shall be executed and
delivered by the Assignor and the Assignee;
(ii) the consent of the Administrative Agent required for an
effective assignment of the Assigned Amount by the Assignor to the
Assignee shall have been duly obtained and shall be in full force and
effect as of the Effective Date;]
(iii) the Assignee shall pay to the Assignor all amounts due to
the Assignor under this Assignment and Acceptance;
(iv) the Assignee shall have complied with Section 11.2 of the
Credit Agreement (if applicable);]
(v) the processing fee referred to in Section 2(b) hereof and in
Section 11.2(a) of the Credit Agreement shall have been paid to the
Administrative Agent; and
(b) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Borrowers and the Administrative
Agent for acknowledgment by the Administrative Agent, a Notice of Assignment in
the form attached hereto as Schedule 1.
6. [Administrative Agent. [INCLUDE ONLY IF ASSIGNOR IS AGENT]
(a) The Assignee hereby appoints and authorizes the Assignor to take
such action as agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Administrative Agent by the Lenders pursuant
to the terms of the Credit Agreement.
(b) The Assignee shall assume no duties or obligations held by the
Assignor in its capacity as Administrative Agent under the Credit Agreement.]
7. Withholding Tax.
The Assignee (a) represents and warrants to the Lender, the
Administrative Agent and the Borrowers that under applicable law and treaties no
tax will be required to be withheld by the Lender with respect to any payments
3
to be made to the Assignee hereunder, (b) agrees to furnish (if it is organized
under the laws of any jurisdiction other than the United States or any State
thereof) to the Administrative Agent and the Borrowers prior to the time that
the Administrative Agent or Borrowers are required to make any payment of
principal, interest or fees hereunder, duplicate executed originals of either
U.S. Internal Revenue Service Form W-8ECI or U.S. Internal Revenue Service Form
W-8BEN (wherein the Assignee claims entitlement to the benefits of a tax treaty
that provides for a complete exemption from U.S. federal income withholding tax
on all payments hereunder) and agrees to provide new Forms W-8ECI or W-8BEN upon
the expiration of any previously delivered form or comparable statements in
accordance with applicable U.S. law and regulations and amendments thereto, duly
executed and completed by the Assignee, and (c) agrees to comply with all
applicable U.S. laws and regulations with regard to such withholding tax
exemption.
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any Lien or other adverse claim; (ii) it is duly
organized and existing and it has the full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Credit Agreement, no further action by, or notice to, or filing with, any
Person is required of it for such execution, delivery or performance; and (iv)
this Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor, enforceable
against the Assignor in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto. The
Assignor makes no representation or warranty in connection with, and assumes no
responsibility with respect to, the solvency, financial condition or statements
of the Borrowers, or the performance or observance by the Borrower, of any of
its respective obligations under the Credit Agreement or any other instrument or
document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance, and to
fulfill its obligations hereunder; (ii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than any already
given or obtained) for its due execution, delivery and performance of this
4
Assignment and Acceptance; and apart from any agreements or undertakings or
filings required by the Credit Agreement, no further action by, or notice to, or
filing with, any Person is required of it for such execution, delivery or
performance; (iii) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of the
Assignee, enforceable against the Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles; [and (iv) it is an
Eligible Assignee.]
9. Further Assurances.
The Assignor and the Assignee each hereby agree to execute and
deliver such other instruments, and take such other action, as either party may
reasonably request in connection with the transactions contemplated by this
Assignment and Acceptance, including the delivery of any notices or other
documents or instruments to the Borrower or the Administrative Agent, which may
be required in connection with the assignment and assumption contemplated
hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No failure or
delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance shall be without prejudice to any
rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any set-off or
counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution and
performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE NEW YORK. The Assignor and the Assignee
each irrevocably submits to the non-exclusive jurisdiction of any State or
Federal court sitting in New York County, New York over any suit, action or
proceeding arising out of or relating to this Assignment and Acceptance and
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such State or Federal court. Each party to this
Assignment and Acceptance hereby irrevocably waives, to the fullest extent it
may effectively do so, the defense of an inconvenient forum to the maintenance
of such action or proceeding.
5
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH
THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY RELATED DOCUMENTS AND
AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR STATEMENTS (WHETHER
ORAL OR WRITTEN).
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By:___________________________
Title:________________________
Address:______________________
[ASSIGNEE]
By:___________________________
Title:________________________
Address:______________________
6
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
NOTICE OF ASSIGNMENT AND ACCEPTANCE
-----------------------------------
_______________, 200_
Bank of America, N.A
Attn:
_____________________________
_____________________________
Re: [Name and Address of Borrowers]
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of _________, 200_ (as
amended, amended and restated, modified, supplemented or renewed from time to
time the "Credit Agreement") among ______________________ (the "Borrowers"), the
Lenders referred to therein and Bank of America, N. A., as agent for the Lenders
(the "Administrative Agent"). Terms defined in the Credit Agreement are used
herein as therein defined.
1. We hereby give you notice of, and request your consent to, the
assignment by __________________ (the "Assignor") to _______________ (the
"Assignee") of _____% of the right, title and interest of the Assignor in and to
the Credit Agreement (including the right, title and interest of the Assignor in
and to the Commitments of the Assignor, all outstanding Loans made by the
Assignor and the Assignor's participation in the Letters of Credit pursuant to
the Assignment and Acceptance Agreement attached hereto (the "Assignment and
Acceptance"). We understand and agree that the Assignor's Commitment, as of ,
200 , is $ ___________, the aggregate amount of its outstanding Loans is
$_____________, and its participation in L/C Obligations is $_____________.
2. The Assignee agrees that, upon receiving the consent of the
Administrative Agent and, if applicable, the Borrower to such assignment, the
Assignee will be bound by the terms of the Credit Agreement as fully and to the
same extent as if the Assignee were the Lender originally holding such interest
in the Credit Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name:____________________________________
Address:__________________________________________
__________________________________________
Attention: _______________________________________
Telephone: (___) ________________________________
Telecopier: (___) _______________________________
Telex (Answerback):_______________________________
(B) Payment Instructions:
Account No.: _____________________________________
At:___________________________________
___________________________________
Reference: _______________________________________
Attention: _______________________________________
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment and
Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:___________________________________
Title:________________________________
[NAME OF ASSIGNEE]
By: _________________________________
Title: ______________________________
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
Bank of America, N. A.,
as Administrative Agent
By: ______________________________
Title: ______________________________
SCHEDULE 1.1
------------
COMMITMENTS
-----------
Lender Commitment Pro Rata Share
------ ---------- --------------
(3 decimals)
Bank of America, N.A. $150,000,000 50.000%
Wachovia Bank, National Association $150,000,000 50.000%
-------
100.000%
[REMAINING SCHEDULES TO BE PROVIDED AT A LATER DATE]
