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EXHIBIT 10.32
POST-PETITION LOAN AND SECURITY AGREEMENT
Dated as of May 8, 1997
among
HARVARD INDUSTRIES, INC.,
THE XXXXXXXX-XXXXXX CORPORATION,
XXXXXX AUTOMOTIVE, INC.,
XXXXX-ALBION CORPORATION,
XXXXXXX-XXXXXX, INC.,
XXXXXXX-XXXXXX GREENEVILLE, INC.,
XXXXXXX-XXXXXX POTTSTOWN, INC.,
XXXXXXX-XXXXXX TECHNOLOGIES, INC.,
and
XXXXXXX-XXXXXX TOLEDO, INC.
as Companies
and
THE CIT GROUP/BUSINESS CREDIT, INC.
as Agent and Lender
and
CONGRESS FINANCIAL CORPORATION
GENERAL ELECTRIC CAPITAL CORPORATION
XXXXXX FINANCIAL, INC.
FINOVA CAPITAL CORPORATION
AND
FOOTHILL CAPITAL CORPORATION
as Lenders
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TABLE OF CONTENTS
SECTION Page
1. DEFINITIONS........................................................... 3
Accounts........................................................... 3
1.2. Accounts Receivable Advance Percentage......................... 3
1.3. Agent Fee...................................................... 3
1.4. Aggregate Net Availability..................................... 3
1.5. Agreement...................................................... 3
1.6. Applicable Base Rate Margin.................................... 4
1.7. Applicable Eurodollar Rate Margin.............................. 4
1.8. Applicable Term Loan Margin.................................... 4
1.9. Arrangement Fee................................................ 4
1.10. Asset Sale Proceeds........................................... 4
1.11. Assignment and Transfer Agreement............................. 4
1.12. Availability.................................................. 4
1.13. Availability Reserve.......................................... 5
1.14. Bank Accounts................................................. 5
1.15. Bankruptcy Code............................................... 5
1.16. Bankruptcy Court.............................................. 5
1.17. Board......................................................... 5
1.18. Business Day.................................................. 5
1.19. Canadian Subsidiary........................................... 5
1.20. Capital Expenditures.......................................... 5
1.21. Capital Lease................................................. 6
1.22. Capital Lease Obligations..................................... 6
1.23. Cash Budget................................................... 6
1.24. Cash Equivalents.............................................. 6
1.25. Chapter 11 Cases.............................................. 6
1.26. Charges....................................................... 6
1.27. The Chase Manhattan Bank Rate................................. 6
1.28. Chattel Paper................................................. 6
1.29. Claim......................................................... 7
1.30. Closing Date.................................................. 7
1.31. Closing Fee................................................... 7
1.32. Code.......................................................... 7
1.33. Collateral.................................................... 7
1.34. Commitment.................................................... 7
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SECTION Page
1.35. Company and the Companies..................................... 7
1.36. Companies' Professionals...................................... 7
1.37. Concentration Account......................................... 7
1.38. Consolidated Balance Sheet.................................... 7
1.39. Consolidated Financial Statements............................. 7
1.40. Consolidating Balance Sheet................................... 8
1.41. Contaminant................................................... 8
1.42. Contracts..................................................... 8
1.43. Customarily Permitted Liens................................... 8
1.44. Default....................................................... 9
1.45. Default Rate of Interest...................................... 9
1.46. Designated Borrowing Officer.................................. 9
1.47. Documentary Letters of Credit................................. 9
1.48. Documents..................................................... 9
1.49. Early Termination Fee......................................... 9
1.50. EBITDA........................................................ 9
1.51. Eligible Accounts Receivable.................................. 10
1.52. Eligible Inventory............................................ 11
1.53. Eligible Tooling Receivable................................... 11
1.54. Environmental Actions......................................... 11
1.55. Environmental Laws............................................ 12
1.56. Environmental Liabilities and Costs........................... 12
1.57. Environmental Lien............................................ 13
1.58. Equipment..................................................... 13
1.59. ERISA......................................................... 13
1.60. ERISA Affiliate............................................... 13
1.61. ERISA Event................................................... 13
1.62. ESNA.......................................................... 13
1.63. Event of Default.............................................. 14
1.64. Excluded Equipment............................................ 14
1.65. Executive Officers............................................ 14
1.66. Existing Liens................................................ 14
1.67. Fee Awards.................................................... 14
1.68. Final Order................................................... 14
1.69. Fiscal Quarter................................................ 14
1.70. Fiscal Year................................................... 14
1.71. Fixed Charges................................................. 14
1.72. GAAP.......................................................... 15
1.73. General Intangibles........................................... 15
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SECTION Page
1.74. Governmental Authority........................................ 15
1.75. Hazardous Materials........................................... 15
1.76. Indebtedness.................................................. 15
1.77. Instruments................................................... 16
1.78. Interest Rate Protection Agreement............................ 16
1.79. Interim Order................................................. 16
1.80. Inventory..................................................... 16
1.81. Inventory Advance Percentage.................................. 16
1.82. IRS........................................................... 16
1.83. Issuing Bank.................................................. 16
1.84. Leases........................................................ 16
1.85. Letter of Credit Guaranty..................................... 17
1.86. Letter of Credit Guaranty Fee................................. 17
1.87. Letter of Credit Sub-Line..................................... 17
1.88. Letters of Credit............................................. 17
1.89. LIBOR......................................................... 17
1.90. LIBOR Loan.................................................... 17
1.91. LIBOR Period.................................................. 17
1.93. Line of Credit................................................ 18
1.94. Local Account................................................. 18
1.95. Material Adverse Change....................................... 18
1.96. Material Adverse Effect....................................... 18
1.97. Multiemployer Plan............................................ 18
1.98. Net Interest Expense.......................................... 19
1.99. Obligations................................................... 19
1.100. Operating Account............................................ 20
1.101. Out-of-Pocket Expenses....................................... 20
1.102. Patents...................................................... 20
1.103. PBGC......................................................... 20
1.104. Pension Plan................................................. 20
1.105. Permit....................................................... 21
1.106. Permitted Encumbrances....................................... 21
1.107. Permitted Expenses........................................... 21
1.108. Permitted Indebtedness....................................... 21
1.109. Permitted Overadvance........................................ 21
1.110. Permitted Overadvance Amount................................. 21
1.111. Permitted Pre-Petition Claim Payment......................... 21
1.112. Permitted Purchase Money Liens............................... 22
1.113. Person....................................................... 22
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SECTION Page
1.114. Petition Date................................................ 22
1.115. Plan......................................................... 22
1.116. Pledged Collateral........................................... 22
1.117. Pledged Shares............................................... 22
1.118. Post-Petition Loan Documents................................. 22
1.119. Pre-Petition Collateral...................................... 23
1.120. Pre-Petition Inventory....................................... 23
1.121. Pre-Petition Letter of Credit................................ 23
1.122. Pre-Petition Loan Agreement.................................. 23
1.123. Pre-Petition Loan Documents.................................. 23
1.124. Pre-Petition Obligations..................................... 23
1.125. Pre-Petition Revolving Credit Loans.......................... 23
1.126. Pre-Petition Term Loans...................................... 23
1.127. Proceeds..................................................... 24
1.128. Promissory Notes............................................. 24
1.129. Qualified Plan............................................... 24
1.130. Ratable Portion or ratably................................... 24
1.131. Real Estate.................................................. 24
1.132. Release...................................................... 24
1.133. Remedial Action.............................................. 24
1.134. Reportable Event............................................. 25
1.135. Required Lenders............................................. 25
1.136. Requirement of Law........................................... 25
1.137. Revolving Credit Loans....................................... 25
1.138. Revolving Credit Notes....................................... 25
1.139. Revolving Line of Credit..................................... 25
1.140. Revolving Line of Credit Fee................................. 26
1.141. Revolving Loan Account....................................... 26
1.142. Service Marks................................................ 26
1.143. Settlement Date.............................................. 26
1.144. Subsidiary................................................... 26
1.146. Termination Date............................................. 27
1.147. Term Loans................................................... 27
1.148. Term Note.................................................... 27
1.149. Title IV Plan................................................ 27
1.150. Trade Accounts Receivable.................................... 27
1.151. Trademarks................................................... 27
1.152. U.C.C........................................................ 27
1.153. Unfunded Pension Liability................................... 27
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SECTION Page
1.154. United States Trustee........................................ 28
1.155. Welfare Benefit Plan......................................... 28
1.156. Withdrawal Liability......................................... 28
2. AMOUNT AND TERMS OF LOANS AND LETTERS OF CREDIT....................... 29
2.1. Revolving Credit Loans......................................... 29
2.2. Term Loans..................................................... 32
2.3. Letters of Credit.............................................. 33
2.4. Repayment; Mandatory Payments and Prepayment................... 36
2.5. Use of Proceeds................................................ 37
2.6. [Intentionally Omitted]........................................ 38
2.7. [Intentionally Omitted]........................................ 38
2.8. Access......................................................... 38
2.9. Taxes.......................................................... 38
2.10. Nature of Obligations......................................... 39
3. INTEREST, FEES AND EXPENSES........................................... 40
3.1. Revolving Credit Loans......................................... 40
3.2. Term Loans..................................................... 41
3.3. LIBOR Election................................................. 41
3.4. Pre-Petition Obligations....................................... 43
3.5. Letter of Credit Fees.......................................... 43
3.6. Issuing Bank Charges........................................... 43
3.7. Out-of-Pocket Expenses......................................... 43
3.8. Revolving Line of Credit Fee................................... 43
3.9. Arrangement Fee................................................ 43
3.10. Closing Fee................................................... 43
3.11. Agent Fee..................................................... 44
3.12. Other Expenses................................................ 44
3.13. Payment of Fees............................................... 44
3.14. No Usury................................................... 44
4. CONDITIONS PRECEDENT.................................................. 44
4.1. Conditions to the Initial Loans................................ 44
4.2. Conditions to Each Revolving Credit Loan, etc.................. 47
4.3. Representation and Confirmation................................ 48
5. COLLATERAL............................................................ 48
5.1. Security....................................................... 48
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SECTION Page
5.2. Perfection of Security Interests............................... 50
5.3. Rights of Lender; Limitations on Lenders' Obligations.......... 51
5.4. Performance by the Lenders of Companies' Obligations........... 53
5.5. Limitation on Lenders' Duty in Respect of Collateral........... 53
5.6. Remedies, Rights Upon Default.................................. 54
5.7. Automatic Stay................................................. 55
5.8. Agent's Appointment as Attorney-in-Fact........................ 55
5.9. Super-Priority Claims.......................................... 58
6. REPRESENTATIONS AND WARRANTIES........................................ 58
6.1. Corporate Existence; Compliance with Law....................... 58
6.2. Executive Offices.............................................. 59
6.3. Corporate Power; Authorization; Enforceable Obligations........ 59
6.4. Ownership of Property; Liens................................... 59
6.5. Labor Relations; Collective Bargaining Agreements.............. 60
6.6. Other Ventures................................................. 60
6.7. Investment Company Act......................................... 61
6.8. Margin Regulations............................................. 61
6.9. Taxes.......................................................... 61
6.10. ERISA......................................................... 62
6.11. Brokers....................................................... 64
6.12. Intellectual Property......................................... 64
6.13. Full Disclosure............................................... 65
6.14. Environmental Matters......................................... 65
6.15. Capital Stock................................................. 66
6.16. Holding Company and Investment Company Acts................... 66
6.17. Permits, Etc.................................................. 66
6.18. Schedules..................................................... 66
6.19. Insurance..................................................... 67
6.20. Financial Accounting Practices, Etc........................... 67
6.21. Location of Bank Accounts..................................... 67
7. REPORTING REQUIREMENTS................................................ 67
7.1. Reports and Notices............................................ 67
8. AFFIRMATIVE COVENANTS................................................. 70
8.1. Books and Records.............................................. 70
8.2. Collateral..................................................... 70
8.3. Insurance...................................................... 70
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SECTION Page
8.4. Charges........................................................ 71
8.5. Compliance with Law............................................ 72
8.6. Indemnification................................................ 72
8.7. Cash Management................................................ 73
8.8. Fixed Charge Coverage Ratio.................................... 74
8.9. EBITDA......................................................... 74
8.10. Capital Expenditures.......................................... 74
8.11. Insurance..................................................... 74
8.12. Environmental Expenditures.................................... 74
8.13. Affiliate Transactions........................................ 75
9. NEGATIVE COVENANTS.................................................... 75
9.1. Liens.......................................................... 75
9.2. Indebtedness................................................... 75
9.3. Intentionally Omitted.......................................... 75
9.4. Sale of Assets................................................. 75
9.5. Merger, Consolidation.......................................... 75
9.6. Guarantees..................................................... 76
9.7. Dividends, Distributions....................................... 76
9.8. Investments.................................................... 76
10. TERMINATION.......................................................... 77
10.1. Termination................................................... 77
10.2. Survival of Obligations upon Termination
of Financing Arrangement................................... 78
11. EVENTS OF DEFAULT; RIGHTS AND REMEDIES............................... 78
11.1. Events of Default............................................. 78
11.2. Remedies...................................................... 82
11.3. Waivers by the Companies...................................... 82
12. MISCELLANEOUS........................................................ 83
12.1. Complete Agreement............................................ 83
12.2. Fees and Expenses............................................. 83
12.3. No Waiver by Lenders.......................................... 84
12.4. Additional Remedies........................................... 85
12.5. Severability.................................................. 85
12.6. Parties....................................................... 85
12.7. Conflict of Terms............................................. 85
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SECTION Page
12.8. Authorized Signature.......................................... 85
12.9. Governing Law; Litigation..................................... 86
12.10. Notices...................................................... 87
12.11. Section 506(c) Waiver........................................ 88
12.12. Waiver of Chapter 5 Claims................................... 88
12.13. Reversal of Payments......................................... 89
12.14. No Action.................................................... 89
12.15. Waiver of Marshalling........................................ 89
12.16. Pre-Petition Obligations..................................... 90
12.17. Acknowledgement of Security Interests........................ 90
12.18. Binding Effect of Documents.................................. 90
12.19. Right of Set-Off............................................. 90
12.20. Survival..................................................... 91
12.21. Section Titles............................................... 91
12.22. Counterparts................................................. 91
12.23. Joint and Several............................................ 91
12.24. GM Access Agreement.......................................... 91
12.25. Indemnity.................................................... 91
13. AGREEMENT BETWEEN THE LENDERS; PARTICIPATIONS;
ASSIGNMENTS.......................................................... 92
13.1. Fund Disbursement............................................. 92
13.2. Payment by Lenders............................................ 93
13.3. Monthly Accounting............................................ 93
13.4. Payments to Lenders........................................... 93
13.5. Participations................................................ 93
13.6. Obligations Several........................................... 94
13.7. Legal Action; Expenses........................................ 94
13.8. Application of Proceeds Following Event of Default............ 95
13.9. Assignments by the Lenders.................................... 95
14. AGENCY; AMENDMENTS AND WAIVERS....................................... 96
14.1. Appointment................................................... 96
14.2. Performance of Duties......................................... 96
14.3. Agent Not Liable.............................................. 96
14.4. Reliance by Agent............................................. 97
14.5. Notice of Event of Default.................................... 97
14.6. No Representations; Independent Approval...................... 97
14.7. Indemnity..................................................... 98
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SECTION Page
14.8. Agent as Lender............................................... 98
14.9. Resignation................................................... 99
14.10. Amendments; Waiver........................................... 99
14.11. Deemed Consent...............................................100
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INDEX OF EXHIBITS AND SCHEDULES
Exhibit A - Revolving Credit Note
Exhibit B - Term Note
Exhibit C - Assignment and Transfer
Exhibit D - Interim Order
Schedule I - List of Lenders
Schedule 1.142 - Service Marks
Schedule 6.2 - Executive Offices
Schedule 6.4(a)(i) - Ownership of Property; Liens
Schedule 6.4(a)(ii) - Ownership of Property; Liens
Schedule 6.4(b) - Ownership of Property; Liens
Schedule 6.5 - Labor Relations; Collective Bargaining Agreements
Schedule 6.6 - Other Ventures
Schedule 6.9 - Taxes
Schedule 6.10(a) - ERISA
Schedule 6.10(c) - ERISA
Schedule 6.10(g) - ERISA
Schedule 6.10(h) - ERISA
Schedule 6.10(k) - ERISA
Schedule 6.14 - Environmental Matters
Schedule 6.15 - Capital Stock
Schedule 6.18 - Schedules
Schedule 6.19 - Insurance
Schedule 6.21 - Location of Bank Accounts
Schedule 8.7(b) - Cash Management - Net Proceeds of other Collateral
Schedule 9.8(i) - Investments
Schedule 12.8 - Authorized Signature
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POST-PETITION LOAN AND SECURITY AGREEMENT, dated as of May 8,
1997, among HARVARD INDUSTRIES, INC., a Florida corporation and a debtor and
debtor in possession under chapter 11 of the Bankruptcy Code (herein
"Harvard"), XXXXXXX-XXXXXX, INC., a Delaware corporation and a debtor and
debtor in possession under chapter 11 of the Bankruptcy Code ("DJ Inc."), THE
XXXXXXXX-XXXXXX CORPORATION, a New Hampshire corporation and a debtor and
debtor in possession under chapter 11 of the Bankruptcy Code ("Xxxxxxxx
Xxxxxx"), XXXXXX AUTOMOTIVE, INC., a Michigan corporation and a debtor and
debtor in possession under chapter 11 of the Bankruptcy Code ("Xxxxxx
Automotive"), XXXXX-ALBION CORPORATION, a Michigan corporation and a debtor and
debtor in possession under chapter 11 of the Bankruptcy Code ("Xxxxx- Albion"),
XXXXXXX-XXXXXX GREENEVILLE, INC., a Delaware corporation and a debtor and
debtor in possession under chapter 11 of the Bankruptcy Code, XXXXXXX-XXXXXX
POTTSTOWN, INC., a Delaware corporation and a debtor and debtor in possession
under chapter 11 of the Bankruptcy Code ("DJ Pottstown"), XXXXXXX-XXXXXX
TECHNOLOGIES. INC., a Delaware corporation and a debtor and debtor in
possession under chapter 11 of the Bankruptcy Code ("DJ Technologies"), and
XXXXXXX-XXXXXX TOLEDO, INC., a Delaware corporation and a debtor and debtor in
possession under chapter 11 of the Bankruptcy Code ("XX Xxxxxx"), THE CIT
GROUP/BUSINESS CREDIT, INC. ("CITBC") as agent for the Lenders whose names are
set forth on Schedule I hereto (each a "Lender" and collectively the "Lenders"
and CITBC as such agent being the "Agent") and the Lenders. Harvard and each of
the entities subsequently identified above (other than the Agent and the
Lenders) are referred to herein individually as a "Company" and collectively as
the "Companies").
W I T N E S S E T H :
WHEREAS, the Companies, the Agent and the Lenders are party to a
Financing Agreement dated October 4, 1996 as amended by Amendment No. 1 thereto
dated December 20, 1996 and Amendment No. 2 thereto dated April 21, 1997 (as so
amended, the "Pre-Petition Loan Agreement"); and
WHEREAS, on May 8, 1997 (the "Petition Date"), each of the
Companies filed a voluntary petition for relief under chapter 11 of the
Bankruptcy Code (as hereinafter defined) with the United States Bankruptcy
Court for the District of Delaware (the "Bankruptcy Court"); and
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WHEREAS, the Companies are continuing to operate their
businesses and manage their properties as debtors-in-possession pursuant to
sections 1107 and 1108 of the Bankruptcy Code; and
WHEREAS, certain capitalized terms used herein but not defined
above are defined in Section 1; and
WHEREAS, as of the Petition Date, the principal amount of Pre-
Petition Obligations owing to the Lenders by the Companies was not less than
$115,000,000, of which approximately $70,000,000 was outstanding as
Pre-Petition Revolving Credit Loans, approximately $14,000,000 was the face
amount of the Pre- Petition Letters of Credit and $30,000,000 was outstanding
as Pre-Petition Term Loans; and
WHEREAS, the Pre-Petition Obligations owing to the Lenders are
secured (i) in the case of the Revolving Credit Loans and Letters of Credit, by
all of the Companies' Inventory, Accounts, Documents, General Intangibles and
Bank Accounts, together with Proceeds of each of the foregoing (collectively,
the "Revolving Credit Collateral"), and (ii) in the case of the Term Loans, by
the Revolving Credit Collateral and all of the Companies' Equipment, Pledged
Collateral and General Intangibles (to the extent therein described), together
with Proceeds of each of the foregoing, all as set forth in the Pre-Petition
Loan Documents; and
WHEREAS, an immediate and on-going need exists for the Companies
to obtain additional funds in order to continue the operation of their
businesses as debtors-in-possession under chapter 11 of the Bankruptcy Code
and, accordingly, the Companies have requested that the Lenders extend
post-petition financing and make revolving credit and term loan advances and
assist the Companies in establishing, opening or maintaining letters of credit
and the Lenders are willing to provide such post-petition financing and incur
such additional obligations pursuant to sections 364(c)(1), (c)(2) and (c)(3)
of the Bankruptcy Code but only for the purposes and upon the terms and
conditions set forth in this Post-Petition Loan and Security Agreement; and
WHEREAS, it is contemplated by the parties hereto that on or
after the Petition Date, the Bankruptcy Court will enter the Interim Order and
the Final Order, which will approve this Post-Petition Loan and Security
Agreement and will authorize the Companies, pursuant to section 364 of the
Bankruptcy Code, to incur secured and
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super-priority indebtedness under the terms and conditions of this
Post-Petition Loan and Security Agreement; and
WHEREAS, in accordance with the Interim Order, the Final Order
(when entered by the Bankruptcy Court) and this Post-Petition Loan and Security
Agreement, the Lenders will make post-petition loans and other financial
accommodations to the Companies;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto agree as follows:
1. DEFINITIONS
In addition to the defined terms appearing above, capitalized
terms used in this Post-Petition Loan and Security Agreement have (unless
otherwise provided elsewhere in this Post-Petition Loan and Security Agreement)
the following respective meanings when used herein:
1.1. ACCOUNTS means all of each Company's now existing and
future accounts (as defined in the U.C.C.) and any and all other receivables
(whether or not specifically listed on schedules furnished to the Agent and the
Lenders), including, without limitation, all accounts created by or arising
from all of its sales of goods or rendition of services to its customers, and
all accounts arising from sales or rendition of services made under any of its
trade names or styles, or through any of its divisions.
1.2. ACCOUNTS RECEIVABLE ADVANCE PERCENTAGE means eighty-five
percent (85%).
1.3. AGENT FEE means the agency and collateral administration
fee payable by the Companies to the Agent in an amount equal to $150,000 per
annum, payable in advance on the Closing Date and on the first anniversary
thereafter for services provided by the Agent under this Agreement.
1.4. AGGREGATE NET AVAILABILITY means the Availability less the
Availability Reserve then in effect.
1.5. AGREEMENT means this Post-Petition Loan and Security
Agreement, including all amendments, modifications and supplements hereto and
any
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appendices, exhibits or schedules to any of the foregoing, and refers to this
Agreement as the same may be in effect at the time such reference becomes
operative.
1.6. APPLICABLE BASE RATE MARGIN means 1.50% per annum.
1.7. APPLICABLE EURODOLLAR RATE MARGIN means 3.50% per annum.
1.8. APPLICABLE TERM LOAN MARGIN means 1.75% per annum.
1.9. ARRANGEMENT FEE means the fee payable by the Companies to
the Agent in the amount of $300,000.
1.10. ASSET SALE PROCEEDS means cash payments in respect of
asset sales other than those specifically permitted under Section 9.4 received
by any of the Companies (including, without limitation, any cash payments
received by way of deferred payment of principal (but not interest) pursuant to
a note or receivable or otherwise), and any amount eliminated from any reserve
referred to in clause (e) below upon receipt of final cash proceeds, in each
case net of the amount of (a) brokers' and advisors' fees and commissions
payable in connection with such sale, (b) the fees and expenses attributable to
such sale, to the extent not included in clause (a) above, (c) the amount of
any Indebtedness (other than the Obligations and the Pre- Petition Obligations)
secured by a Lien on the property sold to the extent paid to the holder of the
Lien, (d) any amount required to be paid to any Person (other than the
Companies) owning a beneficial interest in the property or assets subject to
such sale, (e) deduction for the amount of any reserve established in the
Consolidated Financial Statements in respect of liabilities retained or
representations or warranties made in connection with such sale, including,
without limitation, any indemnification associated therewith and (f) all sales
taxes and other stamp or documentary taxes paid by the relevant Company in
connection with such sale.
1.11. ASSIGNMENT AND TRANSFER AGREEMENT means each Assignment
and Transfer Agreement in the form of Exhibit C hereto.
1.12. AVAILABILITY means at any time (i) the sum of (a) Eligible
Accounts Receivable of the Companies multiplied by the Accounts Receivable
Advance Percentage and (b) the Eligible Inventory of the Companies multiplied
by the Inventory Advance Percentage less (ii) the sum of (x) the outstanding
aggregate principal amount of all Revolving Credit Loans and Pre-Petition
Revolving Credit
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Loans and (y) the outstanding stated amount of all Letters of Credit and,
without duplication, Pre-Petition Letters of Credit and all matured unpaid
reimbursement or repayment obligations of the Companies to any Issuing Bank for
payment of any draft drawn thereunder.
1.13. AVAILABILITY RESERVE means (i) $12,000,000 from and after
the Closing Date through November 30, 1997, (ii) $17,000,000 from and after
December 1, 1997 through December 31, 1997 and (iii) $22,000,000 after December
31, 1997, plus, in each case, such additional amounts as the Agent, in the
exercise of its sole discretion, may from time to time establish against the
Availability.
1.14. BANK ACCOUNTS means all now owned and hereafter acquired
accounts maintained with any bank or financial institution by any of the
Companies.
1.15. BANKRUPTCY CODE means title 11 of the United States Code
or any successor statute thereto.
1.16. BANKRUPTCY COURT has the meaning set forth in the second
paragraph of the recitals of this Agreement or shall mean any other court
having competent jurisdiction over the Chapter 11 Cases.
1.17. BOARD means the Board of Governors of the Federal Reserve
System of the United States.
1.18. BUSINESS DAY means any day that the Agent is open for
business in New York, New York, which is not (i) a Saturday, Sunday or legal
holiday in the state of New York or (ii) a day on which banking institution
chartered by the state of New York or the United States are legally required to
close.
1.19. CANADIAN SUBSIDIARY means Trim Trends Canada Limited, a
corporation organized under the federal laws of Canada, but only so long as
such entity is a Subsidiary of a Company.
1.20. CAPITAL EXPENDITURES for any period means the aggregate of
all amounts (whether representing expenditures of or Indebtedness incurred by
the Companies) that are required to be included in or reflected in the
Consolidated Financial Statements as additions to the property, plant or
equipment or similar fixed asset of the Companies.
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1.21. CAPITAL LEASE means any lease of property (whether real,
personal or mixed) which, in conformity with GAAP, is accounted for as a
capital lease or a Capital Expenditure on the balance sheet of the Companies.
1.22. CAPITAL LEASE OBLIGATIONS means, as to any person, the
capitalized amount of all obligations of such person or any of its subsidiaries
under Capital Leases, as determined on a consolidated basis in conformity with
GAAP.
1.23. CASH BUDGET has the meaning set forth in Section 7.1.
1.24. CASH EQUIVALENTS means (i) securities with maturities of
one year or less from the date of acquisition issued or fully guaranteed or
insured by the United States government or any agency thereof, (ii)
certificates of deposit, eurodollar time deposits, overnight bank deposits and
bankers' acceptances of The Chase Manhattan Bank or any other commercial bank
approved by the Agent having maturities of one year or less from the date of
acquisition, and (iii) commercial paper of an issuer rated at least "A-1" by
Standard & Poor's Corporation or "P-1" by Xxxxx'x Investors Service, Inc., or
carrying an equivalent rating by a nationally recognized rating agency if both
of the two named rating agencies cease publishing ratings of investments.
1.25. CHAPTER 11 CASES means the cases of the Companies pursuant
to chapter 11 of the Bankruptcy Code pending in the Bankruptcy Court.
1.26. CHARGES means all federal, state, county, city, municipal,
local, foreign or other governmental (including, without limitation, PBGC)
taxes at the time due and payable, levies, assessments, charges, liens, claims
or encumbrances upon or relating to (i) the Collateral, (ii) the Obligations,
(iii) the Companies' employees, payroll, income or gross receipts, (iv) the
Companies' ownership or use of any of its assets, or (v) any other aspect of
the Companies' businesses.
1.27. THE CHASE MANHATTAN BANK RATE means the rate of interest
per annum announced by The Chase Manhattan Bank from time to time as its prime
rate in effect at its principal office in the City of New York. (The prime rate
is not intended to be the lowest rate of interest charged by The Chase
Manhattan Bank to its borrowers.)
1.28. CHATTEL PAPER means any "chattel paper," as such term is
defined in the U.C.C., now owned or hereafter acquired by the Companies.
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1.29. CLAIM has the meaning set forth in section 101(5) of the
Bankruptcy Code.
1.30. CLOSING DATE means the date on or after the date hereof
upon which the Lenders make the initial extension of credit hereunder whether
in the form of Revolving Credit Loans, a Letter of Credit Guaranty or the Term
Loans.
1.31. CLOSING FEE means the fee payable by the Companies to the
Agent for the benefit of the Lenders pursuant to Section 3.10.
1.32. CODE means the Internal Revenue Code of 1986 (or any
successor legislation thereto), as amended from time to time.
1.33. COLLATERAL has the meaning set forth in Section 5.1.
1.34. COMMITMENT means, as to any Lender, the sum of (i) the
commitment of such Lender to make Revolving Credit Loans to the Companies under
the Revolving Line of Credit and to participate in the Letter of Credit
Guaranty within the Revolving Line of Credit and (ii) the principal amount of
Term Loans owed to such Lender, as set forth on Schedule I.
1.35. COMPANY and the COMPANIES has the meaning specified in
the preamble of this Agreement.
1.36. COMPANIES' PROFESSIONALS has the meaning set forth in
Section 2.5.
1.37. CONCENTRATION ACCOUNT has the meaning set forth in
Section 8.7.
1.38. CONSOLIDATED BALANCE SHEET means a consolidated balance
sheet for the Companies and the Subsidiaries of each Company eliminating all
inter-company transactions and prepared in accordance with GAAP.
1.39. CONSOLIDATED FINANCIAL STATEMENTS means the Consolidated
Balance Sheet and the related consolidated statements of profit and loss, cash
flow and surplus of the Companies and the Subsidiaries of each Company
eliminating all inter-company transactions and prepared in accordance with
GAAP.
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1.40. CONSOLIDATING BALANCE SHEET means a Consolidated Balance
Sheet for the Companies and the Subsidiaries of each Company showing all
eliminations of inter-company transactions and prepared in accordance with GAAP
except that investments in Subsidiaries are accounted for under the cost
method, "push down" accounting resulting from the 1992 reorganization and the
1995 acquisition of DJ Inc. is utilized in the elimination column and corporate
allocations are effected on an annual basis.
1.41. CONTAMINANT means any substance regulated or forming the
basis of liability under any Environmental Law, including, without limitation,
any waste, pollutant, hazardous substance, toxic substance, hazardous waste,
special waste, petroleum or petroleum-derived substance or waste, or any
constituent of any such substance or waste.
1.42. CONTRACTS means all contracts, undertakings, or other
agreements (other than rights evidenced by Chattel Paper, Documents or
Instruments) in or under which a Company may now or hereafter have any right,
title or interest, including, without limitation, with respect to an Account,
or any agreement relating to the terms of payment or the terms of performance
thereof.
1.43. CUSTOMARILY PERMITTED LIENS means: (i) Liens of local or
state authorities for franchise or other like taxes, provided the aggregate
amounts of such Liens shall not exceed $500,000 in the aggregate for all the
Companies at any one time; (ii) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other like Liens imposed by
law, created in the ordinary course of business and for amounts not yet due (or
which are being contested in good faith by appropriate proceedings or other
appropriate actions which are sufficient to prevent imminent foreclosure of
such Liens) and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP; (iii) deposits made
(and the Liens thereon) in the ordinary course of business (including, without
limitation, security deposits for leases, surety bonds and appeal bonds) in
connection with workers' compensation, unemployment insurance and other types
of social security benefits or to secure the performance of tenders, bids and
contracts (other than for the payment or guarantee of money or purchase money
obligations) entered into in the ordinary course of business, statutory
obligations and other similar obligations arising as a result of progress
payments under government contracts; (iv) Liens imposed for taxes or
assessments with respect to the Real Estate for amounts not yet due (or which
are being contested in good faith by appropriate proceedings or other
appropriate actions which are sufficient to prevent imminent
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foreclosure of such Liens); and (v) title restrictions, easements, restrictions
and other title imperfections applicable to the Real Estate that, in the
aggregate, do not impair its use in the business of the Companies and are of
types customarily acceptable to commercial mortgage lenders in the jurisdiction
in which such Real Estate is located.
1.44. DEFAULT means any event or condition which upon notice or
lapse of time or both would constitute an Event of Default.
1.45. DEFAULT RATE OF INTEREST means a rate of interest per
annum equal to the sum of: (i) two percent (2%) plus (ii) the applicable
contract rate of interest on the Revolving Credit Loans and Term Loans based
upon the applicable increment over The Chase Manhattan Bank Rate as determined
under Section 3, which the Agent on behalf of the Lenders shall be entitled to
charge the Companies on the Obligations to the extent provided in Section 11.2.
1.46. DESIGNATED BORROWING OFFICER means Xxxxxx Xxxxxxxxx or
Xxxxxxx Xxxxxx or such other individual or individuals as may be designated in
writing by Harvard to the Agent.
1.47. DOCUMENTARY LETTERS OF CREDIT means Letters of Credit in
support of trade obligations of the Companies incurred in the ordinary course
of business.
1.48. DOCUMENTS means all present and future documents (as
defined in the U.C.C.) including, without limitation, all warehouse receipts,
bills of lading, shipping documents, chattel paper, instruments and similar
documents, all whether negotiable or not and all goods and Inventory relating
thereto.
1.49. EARLY TERMINATION FEE means the fee in the amount of 1% of
the Line of Credit which the Agent on behalf of the Lenders is entitled to
charge the Companies in the event the Companies, other than upon consummation
of a plan of reorganization (i) terminate the Line of Credit or this Agreement,
or (ii) refinance the Line of Credit with other lenders, in either case on a
date prior to the first anniversary of the Closing Date.
1.50. EBITDA means, for any period, the consolidated net income
of the Companies for such period determined in accordance with GAAP plus (a)
the sum of the following amounts for such period determined on a consolidated
basis in conformity with GAAP to the extent included in the determination of
such
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consolidated net income and without duplication: (i) depreciation expense, (ii)
amortization expense, (iii) interest expense, (iv) income tax expense, (v)
losses on the sale of fixed assets outside of the ordinary course of business,
(vi) the non-cash portion of post-retirement benefits and (vii) professional
fees and expenses payable in the Chapter 11 Cases and less (b) gains on the
sale of fixed assets outside of the ordinary course of business determined in
accordance with GAAP to the extent included in the determination of such
consolidated net income.
1.51. ELIGIBLE ACCOUNTS RECEIVABLE means, as to any Company, the
gross amount of such Company's Trade Accounts Receivable that are subject to a
valid, first priority (except that in the case of such Receivables which
constitute Pre- Petition Collateral, a second priority lien and security
interest subject only to the lien and security interest in favor of the Agent
under the Pre-Petition Loan Agreement) and fully perfected lien and security
interest in favor of the Agent on behalf of the Lenders and which conform to
all applicable warranties contained herein less, without duplication, the sum
of (a) any returns, discounts, claims, credits and allowances of any nature
(whether issued, owing, granted or outstanding) and (b) reserves for: (i) sales
to the United States of America or to any agency, department or division
thereof unless the Agent shall have received an executed assignment of claims
form in respect thereof satisfactory to the Agent; (ii) foreign sales other
than sales (A) secured by stand-by letters of credit (in form and substance
satisfactory to the Agent) issued or confirmed by, and payable at, banks having
a place of business in the United States of America and payable in United
States currency or (B) to customers residing in Canada provided such sales
otherwise comply with all of the other criteria for eligibility hereunder, are
payable in United States currency and such sales do not exceed $5,000,000 in
the aggregate at any one time; (iii) Accounts that remain unpaid more than
ninety (90) days from invoice date; (iv) contras; (v) sales to any Subsidiary
or to any Person affiliated with the Companies in any way; (vi) xxxx and hold
(deferred shipment) or consignment sales; (vii) sales to any customer which is
(A) insolvent, (B) the debtor in any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceeding under any federal or state
law, (C) negotiating, or has called a meeting of its creditors for purposes of
negotiating, a compromise of its debts or (D) financially unacceptable to the
Agent or has a credit rating unacceptable to the Agent; (viii) all sales to any
customer if fifty percent (50%) or more of either (A) all outstanding invoices
or (B) the aggregate dollar amount of all outstanding invoices, are unpaid more
than ninety (90) days from invoice date; (x) any other reason deemed
appropriate by the Agent in its reasonable business judgment and which is
customary either in the commercial finance industry or in the lending practices
of the Agent and/or the Lenders and relating to the Agent's belief, in its sole
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discretion, that the collection of any of such Trade Accounts Receivable is
insecure or that any of such Trade Accounts Receivable may not be paid in
accordance with its terms; (xi) an amount representing, historically, returns,
discounts, claims, credits and allowances; and (xii) Eligible Tooling
Receivables in excess of $6,000,000.
1.52. ELIGIBLE INVENTORY means, as to any Company, the gross
amount of such Company's Inventory, at the lower of cost or market, that is
subject to a valid, first priority (except that in the case of such Inventory
which constitutes Pre- Petition Collateral, a second priority lien and security
interest subject only to the lien and security interest in favor of the Agent
under the Pre-Petition Loan Agreement) and fully perfected lien and security
interest in favor of the Agent on behalf of the Lenders and which conforms to
all applicable warranties contained herein and which at all times continues to
be acceptable to the Agent in the exercise of its reasonable business judgment
less any supplies (other than raw materials), goods not present in the United
States of America, goods returned or rejected by its customers other than goods
that are undamaged and resalable in the normal course of business, goods to be
returned to its suppliers, goods in transit to third parties (other than its
agents or warehouses), Inventory in possession of a warehouseman, bailee or
other third party unless such warehouseman, bailee or third party has executed
a notice of security agreement (in form and substance satisfactory to the
Agent) and the Agent has taken all other action required in its judgment to
perfect its security interest in such Inventory, and less any reserves required
by the Agent in its sole reasonable discretion for special order goods, market
value declines and xxxx and hold (deferred shipment) or consignment sales or
otherwise which are customary either in the commercial finance industry or in
the lending practices of the Agent, based upon such credit and collateral
considerations as the Agent may deem appropriate; provided, however, that for
the purposes of determining Availability, the outstanding principal amount of
Revolving Credit Loans and Pre-Petition Revolving Credit Loans, supported by
Eligible Inventory cannot exceed $20,000,000 at any time.
1.53. ELIGIBLE TOOLING RECEIVABLE means all Trade Accounts
Receivable in respect of tooling and dies for a customer of a Company;
provided, however, that no Trade Accounts Receivable shall be an Eligible
Tooling Receivable until (i) the last and final balance in respect of the
completed item has been invoiced by such Company and (ii) such item has been
accepted in writing by the customer.
1.54. ENVIRONMENTAL ACTIONS means any complaint, summons,
citation, notice, directive, order, claim, litigation, investigation,
proceeding, judgment, letter or other communication from any Governmental
Authority or any
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third party involving a Release (i) from or onto any of the properties
presently or formerly owned or leased by any of the Companies or (ii) from or
onto any facilities which received Hazardous Materials from any of the
Companies or involving any violation of any Environmental Law.
1.55. ENVIRONMENTAL LAWS means all applicable federal, state and
local laws, statutes, ordinances and regulations, now or hereafter in effect,
and in each case as amended or supplemented from time to time, and any judicial
or administrative interpretation thereof, including, without limitation, any
judicial or administrative order, consent decree or judgment, relating to the
regulation and protection of human health, safety, the environment or natural
resources (including, without limitation, ambient air, surface water,
groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic
species and vegetation). Environmental Laws include but are not limited to the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended (42 U.S.C. ss. 9601 et seq.) ("CERCLA"); the Hazardous Material
Transportation Act, as amended (49 U.S.C. ss. 180 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. ss. 136 et
seq.); the Resource Conservation and Recovery Act, as amended (42 U.S.C. ss.
6901 et seq.) ("RCRA"); the Toxic Substance Control Act, as amended (15 U.S.C.
ss. 2601 et seq.); the Clean Air Act, as amended (42 U.S.C. ss. 7401 et seq.);
the Federal Water Pollution Control Act, as amended (33 U.S.C. ss. 1251 et
seq.); the Occupational Safety and Health Act, as amended (29 U.S.C. ss. 651 et
seq.); and the Safe Drinking Water Act, as amended (42 U.S.C. ss. 300f et
seq.), and their state and local counterparts or equivalents and any transfer
of ownership notification or approval statute, including, without limitation,
the New Jersey Industrial Site Recovery Act (N.J. Stat. Xxx. ss. 13:1K-6 et
seq.) ("ISRA").
1.56. ENVIRONMENTAL LIABILITIES AND COSTS means, as to any
Person, all liabilities, obligations, responsibilities, Remedial Actions,
losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including, without limitation, all fees, disbursements and
expenses of counsel, experts and consultants and costs of investigation and
feasibility studies), fines, penalties, sanctions and interest incurred as a
result of any claim or demand by any other person, whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute,
including, without limitation, any thereof arising under any Environmental Law,
Permit, order or agreement with any Governmental Authority or other person, and
which relate to any environmental, health or safety condition, or a Release or
threatened Release, and result from the past, present or
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future operations of, or ownership of property by, such person or any of its
Subsidiaries.
1.57. ENVIRONMENTAL LIEN means any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
1.58. EQUIPMENT means all of a Company's present and hereafter
acquired equipment (as defined in the U.C.C.) including, without limitation,
all machinery, equipment, furnishings and fixtures, and all additions,
substitutions and replacements thereof, wherever located, together with all
attachments, components, parts, equipment and accessories installed thereon or
affixed thereto; provided, however, that Equipment shall not include Excluded
Equipment.
1.59. ERISA means the Employee Retirement Income Security Act or
1974, as amended from time to time and the rules and regulations promulgated
thereunder from time to time.
1.60. ERISA AFFILIATE means any trade or business (whether or
not incorporated) under common control or treated as a single employer with any
of the Companies within the meaning of Section 414 (b), (c), (m) or (o) of the
Code.
1.61. ERISA EVENT means (i) a Reportable Event with respect to a
Title IV Plan or a Multiemployer Plan; (ii) the withdrawal of any of the
Companies or any ERISA Affiliate from a Title IV Plan subject to Section 4063
of ERISA during a plan year in which it was a substantial employer, as defined
in Section 4001(a)(2) of ERISA; (iii) the complete or partial withdrawal of any
of the Companies or any ERISA Affiliate from any Multiemployer Plan; (iv) the
filing of a notice of intent to terminate a Title IV Plan or the treatment of a
plan amendment as a termination under Section 4041 of ERISA of a Title IV Plan;
(v) the institution of proceedings to terminate a Title IV Plan or
Multiemployer Plan by the PBGC; (vi) the failure to make any required
contribution to a Qualified Plan; or (vii) any other event or condition which
might reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Title IV Plan or Multiemployer Plan or the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA.
1.62. ESNA means Harvard's Elastic Stop Nut Division.
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1.63. EVENT OF DEFAULT has the meaning set forth in Section 11.
1.64. EXCLUDED EQUIPMENT means Equipment and any Documents and
General Intangibles relating specifically to such Equipment in existence on the
Closing Date which is the subject to a Capital Lease among USL Capital
Corporation as lessor and any Company as lessee, which Capital Lease by its
terms prohibits the Agent and the Lenders from taking a security interest in
the Equipment financed by such Capital Lease and any Equipment acquired after
the Petition Date that is subject to a Permitted Purchase Money Lien which by
its terms prohibits the Agent and the Lenders from taking a security interest
in the Equipment financed thereby.
1.65. EXECUTIVE OFFICERS means any of the Chairman, President,
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
Chief Accounting Officer, Vice Presidents, Treasurer, Controller and Secretary
of Harvard.
1.66. EXISTING LIENS means all Liens existing on the Petition
Date.
1.67. FEE AWARDS has the meaning set forth in Section 2.5.
1.68. FINAL ORDER means an order entered by the Bankruptcy Court
pursuant to section 364 of the Bankruptcy Code, approving this Agreement, the
other Post-Petition Loan Documents and authorizing the incurrence by the
Companies of permanent post-petition secured and super-priority indebtedness in
accordance with this Agreement, and as to which no stay has been entered and
which has not been reversed, modified, vacated or overturned, in form and
substance satisfactory to the Agent and the Lenders.
1.69. FISCAL QUARTER means each three (3) month period ending on
December 31, March 31, June 30, and September 30 of each year.
1.70. FISCAL YEAR means each twelve (12) month period commencing
on October 1 of each year and ending on the following September 30.
1.71. FIXED CHARGES means, for any Person for any period, the
sum of (i) the Net Interest Expense of such Person for such period, (ii)
interest capitalized during construction for such period to the extent deducted
in the determination of such Net Interest Expense, (iii) the principal amount
of Indebtedness, including Capital Lease Obligations, of such Person and each
of its Subsidiaries determined on a consolidated basis in conformity with GAAP
having a scheduled due date during such
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period, (iv) Capital Expenditures of such Person made during such period, paid
in cash, but other than in respect of Capital Lease Obligations to the extent
included in clause (iii) above and (v) scheduled payments pursuant to
settlement agreements in respect of Environmental Actions.
1.72. GAAP means generally accepted accounting principles in the
United States of America as in effect from time to time and for the period as
to which such accounting principles are to apply except that, for the purposes
of Sections 8.9, 8.10 and 8.14, GAAP shall be determined on the basis of such
principles in effect on the date hereof and consistent with those used in the
preparation of the Consolidated Financial Statements for the Fiscal Year ended
September 30, 1996.
1.73. GENERAL INTANGIBLES means all of a Company's "general
intangibles" as such term is defined in the U.C.C. and shall include, without
limitation, all present and future right, title and interest in and to all
trade names, Trademarks (together with the goodwill associated therewith),
Patents, licenses, customer lists, distribution agreements, supply agreements
and tax refunds, together with all monies and claims for monies now or
hereafter due and payable in connection with any of the foregoing or otherwise.
1.74. GOVERNMENTAL AUTHORITY means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
1.75. HAZARDOUS MATERIALS shall mean (i) any element, compound
or chemical that is defined, listed or otherwise classified as a solid waste,
contaminant, pollutant, toxic pollutant, hazardous substance, extremely
hazardous substance, toxic substance, hazardous waste, or special waste under
any Environmental Law; (ii) petroleum and its refined fractions; (iii) any
polychlorinated biphenyls; (iv) any flammable, explosive or radioactive
materials; and (v) any asbestos-containing materials.
1.76. INDEBTEDNESS means, without duplication, all liabilities,
contingent or otherwise, which are any of the following: (a) obligations in
respect of money (borrowed or otherwise and including, without limitation,
reimbursement and all similar obligations with respect to surety bonds, letters
of credit and bankers' acceptances, whether or not matured) or for the deferred
purchase price of property, services or assets, other than Inventory, but
excluding trade payables not more than
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30 days overdue incurred in the ordinary course of business or (b) lease
obligations which, in accordance with GAAP, have been or which should be
capitalized.
1.77. INSTRUMENTS means any "instrument," as such term is
defined in the U.C.C., now owned or hereafter acquired by a Company, other than
instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.
1.78. INTEREST RATE PROTECTION AGREEMENT means any interest rate
cap agreement, interest rate swap agreement or other agreement or arrangement
that is entered into by any Company in order to protect such Company against
fluctuations in interest rates.
1.79. INTERIM ORDER shall mean the order substantially in the
form annexed hereto as Exhibit D entered by the Bankruptcy Court pursuant to
section 364(c) of the Bankruptcy Code and Bankruptcy Rule 4001(c), approving
this Agreement, the other Post-Petition Loan Documents and authorizing the
Companies to incur interim post-petition secured and super-priority
indebtedness in accordance with this Agreement.
1.80. INVENTORY means all of a Company's present and hereafter
acquired inventory (as defined in the U.C.C.), including, without limitation,
all merchandise, inventory and goods, and all additions, substitutions and
replacements thereof, wherever located, together with all goods and materials
used or usable in manufacturing, processing, packaging or shipping same; in all
stages of production from raw materials through work-in-process to finished
goods.
1.81. INVENTORY ADVANCE PERCENTAGE means (a) in the case of raw
material and finished goods Inventory, sixty percent (60%) and (b) in the case
of work-in-process Inventory, twenty-five percent (25%).
1.82. IRS means the Internal Revenue Service, or any successor
thereto.
1.83. ISSUING BANK means any bank issuing a Letter of Credit for
the Companies.
1.84. LEASES means, with respect to the Companies, all of those
leasehold interests in real property owned by any of the Companies, as lessee,
as such
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may be amended, supplemented or otherwise modified from time to time to the
extent permitted by this Agreement.
1.85. LETTER OF CREDIT GUARANTY means each guaranty, delivered
by the Agent on behalf of the Lenders to an Issuing Bank, of any Company's
reimbursement obligation under such Issuing Bank's reimbursement agreement,
application for a Letter of Credit or other like document.
1.86. LETTER OF CREDIT GUARANTY FEE means the fees the Agent on
behalf of the Lenders may charge the Companies under Section 3.5 for: (a)
issuing the Letter of Credit Guaranty or (b) otherwise aiding the Companies in
obtaining Letters of Credit.
1.87. LETTER OF CREDIT SUB-LINE means $25,000,000 in the
aggregate for the Companies less the face amount of outstanding Pre-Petition
Letters of Credit; provided, however, that no more than $3,000,000 of this
Letter of Credit Sub-Line shall be available for the issuance or guarantee of
Documentary Letters of Credit, inclusive of Pre-Petition Documentary Letters of
Credit.
1.88. LETTERS OF CREDIT means all letters of credit issued with
the assistance of the Agent on behalf of the Lenders by any Issuing Bank for or
on behalf of the Companies.
1.89. LIBOR means at any time of determination, and subject to
availability, for each interest period the rate determined by the Agent to be
the applicable London interbank offered rate paid in London on dollar deposits
from other banks as (a) quoted by The Chase Manhattan Bank or, if such
quotation is not available, the rate published under "Money Rates" in the New
York City edition of The Wall Street Journal or if there is no such publication
or statement therein as to LIBOR then in any publication used in the New York
City financial community or (b) if no rate is available to the Agent using the
sources in clause (a) above, the rate determined by the Agent based upon
information presented on Telerate Systems at Page 3750 as of 11:00 a.m. (London
Time).
1.90. LIBOR LOAN means each portion of the Revolving Credit
Loans for which the Companies have elected to use LIBOR for interest rate
computations.
1.91. LIBOR PERIOD means the LIBOR for one month, two month,
three month or six month U.S. dollar deposits, as selected by the Companies.
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1.92. LIEN means any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), security interest or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Indebtedness or other obligation, and includes, without
limitation, any conditional sale or other title retention agreement, the
interest of a lessor under a Capital Lease, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing,
under the U.C.C. or comparable law of any jurisdiction, of any financing
statement naming the owner of the asset to which such Lien relates as debtor;
provided, however, that Liens shall not include the Access and Occupancy
Agreement and related Accommodation Agreement between any Company and General
Motors Corporation and any similar agreements consented to by the Agent.
1.93. LINE OF CREDIT means the commitment of the Lenders to make
Revolving Credit Loans pursuant to Section 2.1, to make Term Loans pursuant to
Section 2.2 and to assist the Companies in opening Letters of Credit pursuant
to Section 2.3.
1.94. LOCAL ACCOUNT has the meaning set forth in Section 8.7(b).
1.95. MATERIAL ADVERSE CHANGE means a material adverse change in
any of (i) the condition (financial or otherwise), business, performance,
operations or properties of the Companies taken as one enterprise, (ii) the
legality, validity or enforceability of any Post-Petition Loan Document, (iii)
the perfection or priority of the Liens granted pursuant to this Agreement,
(iv) the ability of the Companies to repay the Obligations or to perform their
obligations under any of the Post-Petition Loan Documents, or (v) the rights
and remedies of the Lenders or the Agent under the Post-Petition Loan
Documents.
1.96. MATERIAL ADVERSE EFFECT means an effect that results in or
causes, or has a reasonable likelihood of resulting in or causing, a Material
Adverse Change.
1.97. MULTIEMPLOYER PLAN means a multiemployer plan, as defined
in Section 4001(a)(3) of ERISA, and to which any of the Companies or any ERISA
Affiliate is making, is obligated to make, has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of
them.
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1.98. NET INTEREST EXPENSE means, for any Person for any period,
gross interest expense of such Person and its Subsidiaries for such period
determined on a consolidated basis in conformity with GAAP, less (a) the
following for such Person and its Subsidiaries determined on a consolidated
basis in conformity with GAAP: the sum of (i) interest capitalized during
construction for such period, (ii) interest income for such period, and (iii)
gains for such period on Interest Rate Protection Agreements (to the extent not
included in interest income above and to the extent not deducted in the
calculation of such gross interest expense), plus (b) the following for such
Person and its Subsidiaries determined on a consolidated basis in conformity
with GAAP: the sum of (i) losses for such period on Interest Rate Protection
Agreements (to the extent not included in such gross interest expense), and
(ii) the amortization of upfront costs or fees for such period associated with
Interest Rate Protection Agreements (to the extent not included in gross
interest expense).
1.99. OBLIGATIONS means all loans and advances made by the Agent
and/or the Lenders to the Companies or to others for the Companies' account
(including, without limitation, all Revolving Credit Loans, Term Loans and
Letters of Credit) arising under or in connection with this Agreement or any
other Post-Petition Loan Document; any and all other indebtedness and
obligations which may at any time be owing by the Companies to the Agent and/or
the Lenders arising under or in connection with this Agreement or any of the
other Post-Petition Loan Documents or under any other agreement or arrangement
now or hereafter entered into between the Companies and the Agent and/or the
Lenders under or in connection with this Agreement or any of the other
Post-Petition Loan Documents and, whether now in existence or incurred by the
Companies from time to time hereafter; whether secured by pledge, Lien upon or
security interest in any of the Companies' assets or property or the assets or
property of any other Person; whether such indebtedness is absolute or
contingent, joint or several, matured or unmatured, direct or indirect and
whether the Companies are liable to the Agent and/or the Lenders for such
indebtedness as principal, surety, endorser, guarantor or otherwise.
Obligations include indebtedness or obligations incurred by, or imposed on, the
Agent and/or the Lenders as a result of environmental claims (other than solely
as a result of actions of the Agent and/or the Lenders) arising out of any one
or more of the Companies' operations, premises or waste disposal practices or
sites; any Company's liability to the Agent and/or the Lenders as maker or
endorser on any promissory note or other instrument for the payment of money;
the Companies' liability to the Agent and/or the Lenders under any instrument
of guaranty or indemnity, or arising under any guaranty, endorsement or
undertaking which the Agent and/or the Lenders may make or issue to others for
any Company's account, including any accommodation extended with respect to
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applications for Letters of Credit, the Agent's (on behalf of the Lenders)
acceptance of drafts or the Agent's (on behalf of the Lenders) endorsement of
notes or other instruments for any Company's account and benefit, in each case
under or in connection with this Agreement or any of the other Post-Petition
Loan Documents.
1.100. OPERATING ACCOUNT has the meaning specified in Section
8.7(d).
1.101. OUT-OF-POCKET EXPENSES means all of the Agent's and/or
the Lenders' present and future expenses incurred relative to this Agreement or
any other Post-Petition Loan Document, whether incurred heretofore or
hereafter, which expenses shall include, without being limited to, the cost of
record searches, all costs and expenses incurred by the Agent and/or the
Lenders in opening bank accounts, depositing checks, receiving and transferring
funds, and any charges imposed on the Agent and/or the Lenders due to
"insufficient funds" of deposited checks and the Agent's and/or the Lenders'
standard fee relating thereto, any amounts paid by the Agent and/or the
Lenders, incurred by or charged to the Agent and/or Lenders by the Issuing Bank
under any Letter of Credit Guaranty or any Company's reimbursement agreement,
application for Letter of Credit or other like document which pertain either
directly or indirectly to such Letters of Credit, and the Agent's and/or the
Lenders' standard fees relating to the Letters of Credit and any drafts
thereunder, reasonable local counsel fees, and fees and taxes relative to the
filing of financing statements.
1.102. PATENTS means all present and hereafter acquired patents
and/or patent rights of the Companies.
1.103. PBGC means the Pension Benefit Guaranty Corporation, or
any successor thereto.
1.104. PENSION PLAN means an employee pension benefit plan, as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan), which is
not an individual account plan, as defined in Section 3(34) of ERISA, and which
any of the Companies or if a Title IV Plan, any ERISA Affiliate maintains,
contributes to or has an obligation to contribute to on behalf of participants
who are or were employed by any of them.
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1.105. PERMIT means any permit, approval, authorization,
license, variance or permission required from a Governmental Authority under an
applicable Requirement of Law.
1.106. PERMITTED ENCUMBRANCES means: (i) the Existing Liens;
(ii) any Lien created under the Post-Petition Loan Documents; (iii) Permitted
Purchase Money Liens; and (iv) Customarily Permitted Liens.
1.107. PERMITTED EXPENSES has the meaning set forth in Section
2.5(a).
1.108. PERMITTED INDEBTEDNESS means: (i) Indebtedness in
existence on the Petition Date; (ii) Indebtedness secured by Permitted Purchase
Money Liens; (iii) Obligations; (iv) Indebtedness between or among the
Companies; and (v) the obligations of the Companies pursuant to Interest Rate
Protection Agreements and hedging arrangements covering aluminum and other raw
materials, in either case entered into with the Agent's consent.
1.109. PERMITTED OVERADVANCE has the meaning specified in
Section 2.1(a).
1.110. PERMITTED OVERADVANCE AMOUNT shall mean up to $7,500,000
which may be outstanding under the Revolving Line of Credit as "overadvances"
pursuant to Section 2.1(a) because they represent amounts in excess of the
Aggregate Net Availability.
1.111. PERMITTED PRE-PETITION CLAIM PAYMENT means any payment
(as adequate protection or otherwise) on account of any Claim arising or deemed
to have arisen prior to the Petition Date in respect of (i) pre-petition
employee wages, salaries, sick pay, vacation pay (including "personal days"),
holiday pay, and other accrued compensation; (ii) obligations to make payments
for which employee payroll deductions were made; (iii) obligations to make
pre-petition contributions and pay benefits under employee benefit plans; (iv)
all costs and expenses incident to the payments and contributions described in
(i) through (iii) (including payroll-related taxes and processing costs); (v)
"first day orders" approved by the Agent; (vi) adequate protection payments not
to exceed $2,000,000 per annum authorized by the Bankruptcy Court in respect of
secured pre-petition Indebtedness or (vii) other payments approved by the
Agent.
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1.112. PERMITTED PURCHASE MONEY LIENS means Liens on any item of
equipment acquired after the Petition Date, provided that (i) each such Lien
shall attach only to the equipment to be acquired, (ii) a description of the
equipment so acquired is furnished to the Agent, (iii) the Indebtedness secured
by such Lien shall not exceed at the time of issuance of such Indebtedness the
lesser of the cost or fair market value of the equipment acquired thereby and
(iv) the Indebtedness incurred in connection with all such acquisitions shall
not exceed in the aggregate $30,000,000 at any time outstanding.
1.113. PERSON means an individual, partnership, corporation
(including, without limitation, a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a Governmental
Authority.
1.114. PETITION DATE has the meaning set forth in the recitals
of this Agreement.
1.115. PLAN means an employee benefit plan, as defined in
Section 3(3) of ERISA, which any of the Companies maintains, contributes to or
has an obligation to contribute to on behalf of participants who are or were
employed by any of them.
1.116. PLEDGED COLLATERAL means (i) all of the Pledged Shares;
(ii) all additional shares of stock or other securities of any issuer of the
Pledged Shares from time to time acquired by any of the Companies in any
manner; (iii) the certificates representing the shares referred to in clauses
(i) and (ii) above; and (iv) all dividends, cash, instruments and other
property or proceeds, from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the foregoing to the
extent provided herein.
1.117. PLEDGED SHARES means all of the shares of capital stock
of a Subsidiary (other than the Canadian Subsidiary and 000000 Xxxxxx Inc.)
owned at the date hereof by any of the Companies.
1.118. POST-PETITION LOAN DOCUMENTS means this Agreement, the
Revolving Credit Notes, the Term Loan Notes, and all other agreements,
instruments, certificates and documents executed by or on behalf of any Company
and/or delivered to the Agent and the Lenders in connection with this
Agreement.
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1.119. PRE-PETITION COLLATERAL means all property and interests
in property and proceeds thereof now owned or hereafter acquired by any Company
in or upon which a Lien has been granted to the Agent under any of the
Pre-Petition Loan Documents.
1.120. PRE-PETITION INVENTORY means the Inventory of any
Company as of the Petition Date.
1.121. PRE-PETITION LETTER OF CREDIT has the meaning set forth
in Section 2.3
1.122. PRE-PETITION LOAN AGREEMENT has the meaning set forth in
the recitals of this Agreement.
1.123. PRE-PETITION LOAN DOCUMENTS means the Pre-Petition Loan
Agreement, each "Loan Document" under and defined in the Pre-Petition Loan
Agreement and any other instrument, agreement, or other writing or filing
executed by or on behalf of any Company in connection with or contemplated by
the Pre- Petition Loan Agreement including, without limitation, mortgages,
deeds of trust, chattel mortgages, pledges, powers of attorney, financing
statements and all other written matter executed by or on behalf of Companies
and/or delivered to the Agent (as therein defined) in connection with the
Pre-Petition Loan Agreement.
1.124. PRE-PETITION OBLIGATIONS means all loans, advances,
debts, liabilities and obligations for monetary amounts (whether or not such
amounts are liquidated or determinable) owing by any Company prior to the
Petition Date, and all covenants and duties regarding such amounts, of any kind
or nature, present or future, whether or not evidenced by a note, agreement or
other instrument, arising under any of the Pre-Petition Loan Documents. This
term includes, without limitation, all interest, charges, expenses, attorney's
fees and any other sum chargeable or payable under any of the Pre-Petition Loan
Documents.
1.125. PRE-PETITION REVOLVING CREDIT LOANS means all outstanding
revolving credit loan obligations under the Pre-Petition Loan Agreement.
1.126. PRE-PETITION TERM LOANS means all outstanding term loan
obligations under the Pre-Petition Loan Agreement.
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1.127. PROCEEDS means "proceeds," as such term is defined in
Section 9-306(1) of the U.C.C., and, in any event, shall include, without
limitation, (a) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to any Company from time to time with respect to any of the
Collateral, (b) any and all payments (in any form whatsoever) made or due and
payable to any Company from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any Governmental Authority (or any Person acting under color of
Governmental Authority), and (c) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
1.128. PROMISSORY NOTES means the notes, in the form of Exhibits
A and B attached hereto, delivered by the Companies to the Lenders to evidence
the Revolving Credit Loans and the Term Loans pursuant to, and repayable in
accordance with, the provisions of Section 2.
1.129. QUALIFIED PLAN means an employee pension benefit plan, as
defined in Section 3(2) of ERISA, which is intended to be tax-qualified under
Section 401(a) of the Code, and which any of the Companies or any ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them.
1.130. RATABLE PORTION or RATABLY means, with respect to any
Lender, the quotient obtained by dividing the Commitment of such Lender by the
Commitments of all Lenders.
1.131. REAL ESTATE means the Companies' fee and/or leasehold
interests in real property.
1.132. RELEASE means, as to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration, in each case of any Hazardous Material, into the indoor
or outdoor environment or into or out of any property owned by such Person,
including, without limitation, the movement of Contaminants through or in the
air, soil, surface water, ground water or property.
1.133. REMEDIAL ACTION means all actions required to (i) clean
up, remove, treat or in any other way address Contaminants in the indoor or
outdoor environment, (ii) prevent the Release or threat of Release or minimize
the further
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Release of Contaminants so they do not migrate or endanger or threaten to
endanger public health or welfare or the indoor or outdoor environment, or
(iii) perform pre-remedial studies and investigations and post-remedial
monitoring and care.
1.134. REPORTABLE EVENT means any of the events described in
Section 4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA.
1.135. REQUIRED LENDERS means, at any time, Lenders holding at
least sixty-six and two-thirds percent (66 2/3%) of the sum of (a) the then
aggregate unpaid principal amount of the Term Loans and (b) the Revolving Line
of Credit or, if no Term Loans or Revolving Credit Loans are outstanding,
Lenders holding at least sixty-six and two-thirds percent (66 2/3%) of the
Revolving Line of Credit; provided, however, that if the Revolving Line of
Credit has been terminated, it means Lenders holding at least sixty-six and
two-thirds percent (66 2/3%) of the aggregate amount of outstanding Term Loans
and Revolving Credit Loans.
1.136. REQUIREMENT OF LAW means, as to any Person, the
certificate of incorporation and by-laws or other organizational or governing
documents of such person, and all federal, state and local laws, rules and
regulations, and all orders, judgments, decrees or other determinations of any
Governmental Authority or arbitrator, applicable to or binding upon such person
or any of its property or to which such Person or any of its property is
subject.
1.137. REVOLVING CREDIT LOANS means the loans and advances made,
from time to time, to or for the account of the Companies by the Agent on
behalf of the Lenders pursuant to Section 2.1 and any advances deemed made from
time to time pursuant to Section 2.3(c).
1.138. REVOLVING CREDIT NOTES means the promissory notes in the
form of Exhibit A hereto executed by the Companies to evidence Revolving Credit
Loans made by the Agent on behalf of the Lenders to the Companies pursuant to
Section 2.
1.139. REVOLVING LINE OF CREDIT means the commitment of the
Lenders to make Revolving Credit Loans pursuant to Section 2 in an aggregate
amount of up to $110,000,000, less the unpaid amount of the Pre-Petition
Revolving Credit Loans and the outstanding face amount of the Pre-Petition
Letters of Credit and all matured unpaid reimbursement or repayment obligations
thereunder.
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1.140. REVOLVING LINE OF CREDIT FEE means the fee due the Agent
for the benefit of the Lenders at the end of each month for the Revolving Line
of Credit, in an amount equal to the product of the difference between the
average daily amount of the Revolving Line of Credit and the sum of the average
daily balance of outstanding Revolving Credit Loans and Letters of Credit
during said month multiplied by 0.50% per annum for the number of days in said
month divided by 360.
1.141. REVOLVING LOAN ACCOUNT has the meaning specified in
Section 2.1(f).
1.142. SERVICE MARKS means all service marks and certificates of
registration of the Companies, together with the goodwill of the business
associated with or symbolized by such marks and registrations, together with
(i) all other tradenames, trademarks, service marks, corporate names, company
names, business names, fictitious business names, trade styles, logos, other
designs or sources or business identifiers or similar devices, all
registrations with respect thereto, and all applications with respect to the
foregoing, and all reissues, divisions, continuations, extensions, renewals,
and continuations-in-part with respect to any of the foregoing, (ii) all of the
goodwill of the business connected with and symbolized by such tradenames,
Trademarks, service marks, corporate names, company styles, logos, other
designs, or sources of business identifiers or similar devices, throughout the
world, in each case whether now owned or hereafter created or acquired, and
(iii) all rights associated with the foregoing, including license royalties,
claims or rights against third parties for any past, present or future
infringement of any xxxx, Trademark or similar device, and all corresponding
rights, throughout the world.
1.143. SETTLEMENT DATE means the date, weekly and more
frequently, at the discretion of the Agent, that the Agent and the Lenders
shall settle amongst themselves so that (x) the Agent shall not have, as the
Agent, any money at risk and (y) on such Settlement Date the Lenders shall have
a Ratable Portion of all outstanding Revolving Credit Loans and Letters of
Credit, provided that each Settlement Date for a Lender shall be a Business Day
on which such Lender and its bank are open for business.
1.144. SUBSIDIARY means any corporation, association,
partnership or other business entity of which more than 50% of the equity or
more than 50% of the ordinary voting power or more than 50% of other interests
(including general partnership interests) are at the time owned or controlled,
directly or directly, by any Company or any Subsidiary of any Company.
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1.145. Superior Existing Liens means all valid, perfected,
enforceable, and nonavoidable liens and security interests of record existing
immediately prior to the Petition Date and includes all liens and security
interests under the Pre-Petition Loan Documents.
1.146. TERMINATION DATE means the date occurring two (2) years
from the Closing Date or, if earlier, the date the Line of Credit is
terminated.
1.147. TERM LOANS means the term loans in the principal amount
of $65,000,000 made by the Agent on behalf of the Lenders pursuant to, and
repayable in accordance with, the provisions of Section 2.2.
1.148. TERM NOTE means the promissory notes in the form of
Exhibit B hereto executed by the Companies to evidence the Term Loans made by
the Agent on behalf of the Lenders under Section 2.2.
1.149. TITLE IV PLAN means any retirement plan subject to Title
IV of ERISA or Section 412 of the Code (other than a Multiemployer Plan) to
which any of the Companies or any ERISA Affiliate has any liability (contingent
or otherwise) with respect to its former or active employees (or their
beneficiaries).
1.150. TRADE ACCOUNTS RECEIVABLE means that portion of Accounts
which arises from the sale of Inventory or the rendition of services in the
ordinary course of business.
1.151. TRADEMARKS means all present and hereafter acquired
trademarks and/or trademark rights (together with the goodwill associated
therewith) and all cash and non-cash proceeds thereof.
1.152. U.C.C. means the Uniform Commercial Code as in effect
from time to time in the State of New York.
1.153. UNFUNDED PENSION LIABILITY means, as to any of the
Companies at any time, the aggregate amount, if any, of the sum of (i) the
amount by which the present value of all accrued benefits under each Title IV
Plan of such Company, or any ERISA Affiliate exceeds the fair market value of
all assets of such Title IV Plan allocable to such benefits in accordance with
Title IV of ERISA, all determined as of the most recent valuation date for each
such Title IV Plan using the actuarial assumptions in effect under such Title
IV Plan, and (ii) for a period of five
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years following a transaction reasonably likely to be covered by Section 4069
of ERISA, the liabilities (whether or not accrued) that could be avoided by any
of the Companies or any ERISA Affiliate as a result of such transaction.
1.154. UNITED STATES TRUSTEE means the United States Trustee
appointed to serve in the District of Delaware pursuant to 28 U.S.C. ss. 581 et
seq.
1.155. WELFARE BENEFIT PLAN means an employee welfare benefit
plan, as defined in Section 3(1) of ERISA, to which any of the Companies
maintains, contributes to, contributed to within the six year period prior to
the Closing Date, or has an obligation to contribute to, on behalf of its
former or active employees (or their beneficiaries).
1.156. WITHDRAWAL LIABILITY means, as to any of the Companies,
at any time, the aggregate amount of the liabilities of any of the Companies or
any ERISA Affiliate pursuant to Section 4201 of ERISA, and any increase in
contributions required to be made pursuant to Section 4243 of ERISA, with
respect to all Multiemployer Plans.
Any accounting term used in this Agreement shall have, unless
otherwise specifically provided herein, the meaning customarily given such term
in accordance with GAAP, and all financial computations hereunder shall be
computed, unless otherwise specifically provided herein, in accordance with
GAAP consistently applied. That certain terms or computations are explicitly
modified by the phrase "in accordance with GAAP" shall in no way be construed
to limit the foregoing. All other undefined terms contained in this Agreement
shall, unless the context indicates otherwise, have the meanings provided for
by the U.C.C. to the extent the same are used or defined therein. The words
"herein," "hereof" and "hereunder" and other words of similar import refer to
this Agreement as a whole, including the Exhibits and Schedules hereto, as the
same may from time to time be amended, modified or supplemented and not to any
particular section, subsection or clause contained in this Agreement.
Each reference to a Section, Schedule or Exhibit is to a
Section, Schedule or Exhibit, respectively, of or to this Agreement, unless
otherwise specified or the context otherwise requires.
Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and the
plural, and pronouns
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stated in the masculine, feminine or neuter gender shall include the masculine,
the feminine and the neuter.
2. AMOUNT AND TERMS OF LOANS AND LETTERS OF CREDIT
2.1. Revolving Credit Loans. (a) Upon the Agent's receipt from
the Companies of executed Revolving Credit Notes in the form of Exhibit A
hereto payable to the Lenders, each Lender severally agrees, subject to the
terms and conditions of this Agreement from time to time from the Closing Date
through the Termination Date, and within (i) the Aggregate Net Availability and
(ii) the Revolving Line of Credit, to make loans and advances to the Companies
on a revolving basis (i.e., subject to the limitations set forth herein, the
Companies may borrow, repay and re-borrow Revolving Credit Loans). Each Lender
further agrees to make available to the Companies during the period beginning
on the 20th of each month and expiring at the end of each such month,
overadvances (each a "Permitted Overadvance") in an amount not exceeding (for
all Lenders) the Permitted Overadvance Amount. Each request for a Revolving
Credit Loan or a Permitted Overadvance shall be delivered by a Designated
Borrowing Officer on behalf of the Companies and shall constitute, unless
otherwise disclosed in writing to the Agent and the Lenders, a representation
and warranty by the Companies that (a) the representations and warranties
contained in this Agreement are true and correct in all material respects on
and as of such date as though made on and as of such date, (b) after giving
effect to the requested advance, no Default or Event of Default has occurred
and (c) such requested Revolving Credit Loan, when added to the aggregate
Revolving Credit Loans, Letters of Credit and unpaid reimbursement obligations
related to drawings under such Letters of Credit which are then outstanding and
Revolving Credit Loans and Letters of Credit for which requests have been
delivered to the Agent by the Companies, is within the Revolving Line of Credit
and, except in the case of Permitted Overadvances, the Aggregate Net
Availability. All requests for loans and advances, other than LIBOR Loans, must
be received by an officer of the Agent no later than 1:00 p.m., New York time,
of the day on which such loans and advances are required. No Lender shall be
required to advance any amount in excess of such Lender's Ratable Portion of
the amount requested (including any request for a Permitted Overadvance).
(b) Each of the Companies will, upon the creation of Accounts,
execute and deliver to the Agent in such form and manner as the Agent may
reasonably require, solely for the Agent's convenience in maintaining records
of collateral, such confirmatory schedules of Accounts as the Agent may
reasonably
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request, and such other appropriate reports designating, identifying and
describing the Accounts as the Agent may reasonably require. In addition, upon
the Agent's request each of the Companies shall provide the Agent with copies
of agreements with, or purchase orders from, the Companies' customers, and
copies of invoices to customers, proof of shipment or delivery and such other
documentation and information relating to said Accounts and other Collateral as
the Agent may reasonably require. Failure to provide the Agent with any of the
foregoing shall in no way affect, diminish, modify or otherwise limit the Liens
granted herein. The Companies hereby authorize the Agent to regard a Company's
printed name or rubber stamp signature on assignment schedules or invoices as
the equivalent of a manual signature by such Company's authorized officers or
agents.
(c) Each of the Companies hereby represents and warrants with
respect to itself and, in the case of Harvard, with respect to itself and the
other Companies that: each of its Trade Accounts Receivable included in
Eligible Accounts Receivable is based on an actual and bona fide sale and
delivery of goods or rendition of services to customers, made by it in the
ordinary course of its business; the goods and Inventory being sold and the
Trade Accounts Receivable thereby created are its exclusive property and are
not and shall not be subject to any Lien, consignment arrangement, encumbrance,
security interest or financing statement whatsoever, other than the Permitted
Encumbrances; the invoices evidencing such Trade Accounts Receivable are in its
name; and its customers have accepted the goods or services, owe and are
obligated to pay the full amounts stated in the invoices according to their
terms, without dispute, offset, defense, counterclaim or contra, except for
disputes and other matters arising in the ordinary course of business with
respect to which it has complied with the notification requirements of Section
2.1(e) or to the extent not included in Eligible Accounts Receivable. Each of
the Companies confirms to the Agent that any and all taxes or fees relating to
its business, its sales, the Accounts or goods relating thereto, are its sole
responsibility and that same will be paid by it when due and that none of said
taxes or fees represent a Lien on or claim against the Accounts. Each of the
Companies also warrants and represents that it is a duly and validly existing
corporation and is qualified in all states where the failure to so qualify
would have an adverse effect on its business or its ability to enforce
collection of Accounts due from customers residing in that state. Each of the
Companies agrees to maintain such books and records regarding Accounts as the
Agent may reasonably require, shall provide the Agent with reports thereon as
required by Section 7.1 and agrees that such books and records will reflect the
Agent's interest in the Accounts. All of the books and records of the Companies
will be available to the Agent at
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normal business hours, including any records handled or maintained for the
Companies by any other company or entity.
(d) Until the Agent has advised the Companies to the contrary
after the occurrence of an Event of Default (unless and until such Event of
Default is waived in writing by the Agent acting on the instructions of the
Required Lenders), the Companies may and will enforce, collect and receive all
amounts owing on the Accounts for the Agent's and Lenders' benefit and on their
behalf, but at the Companies' expense; such privilege shall terminate, at the
election of the Agent, upon the occurrence of any Event of Default and until
such Event of Default is waived in writing by the Agent (acting on the
instructions of the Required Lenders).
(e) Each of the Companies agrees to notify the Agent promptly of
any matters materially affecting the value, enforceability or collectibility of
any Account and of all material customer disputes, offsets, defenses,
counterclaims, returns, rejections and all reclaimed or repossessed merchandise
or goods. Each of the Companies agrees to issue credit memoranda promptly (with
duplicates to the Agent upon request after the occurrence of an Event of
Default) upon accepting returns or granting allowances, and may continue to do
so until the Agent has notified the Companies that an Event of Default has
occurred (unless and until such Event of Default is waived writing by the Agent
acting on the instructions of the Required Lenders) and that all future credits
or allowances are to be made only after the Agent's prior written approval.
(f) The Agent shall maintain an account on its books in the name
of the Companies (the "Revolving Loan Account") in which the Companies will be
charged with loans and advances made by the Agent and the Lenders to them or
for their account. The Companies will be credited with all amounts received by
the Agent and/or the Lenders from them or from others for their account,
including all amounts received by the Agent in payment of Accounts and such
amounts will be applied as required by Section 2.4. In addition, the Agent may
charge the Revolving Loan Account with any other Obligations, including any and
all reasonable costs, expenses and attorneys' fees which the Agent may incur in
connection with the exercise by or for the Agent of any of the rights or powers
herein conferred upon the Agent, or in the prosecution or defense of any action
or proceeding to enforce or protect any rights of the Agent in connection with
this Agreement, the Collateral or the Obligations. All amounts charged to the
Revolving Loan Account shall be deemed Revolving Credit Loans for all purposes
hereunder.
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(g) After the end of each month, the Agent shall promptly send
the Companies a statement showing the accounting for the charges, loans,
advances and other transactions occurring between the Agent and the Lenders and
the Companies during that month. The monthly statements shall be deemed correct
and binding upon the Companies and shall constitute an account stated between
the Companies and the Agent and the Lenders unless the Agent receives a written
statement of the exceptions within thirty (30) days of the date of the monthly
statement.
(h) In the event that the sum of (i) the outstanding balance of
Revolving Credit Loans (including any accrued but unpaid interest thereon and
any fees and expenses relating thereto) and (ii) the outstanding balance of
Letters of Credit (including all matured reimbursement or repayment obligations
with respect thereto) exceeds the maximum amount thereof available under
Sections 2.1 and 2.3, such excess shall be due and payable to the Agent for the
benefit of the Lenders immediately upon the Agent's demand therefor.
2.2. Term Loans. (a) Each of the Companies hereby agrees to
execute and deliver to the Agent Term Notes payable to the Lenders, in the form
of Exhibit B attached hereto, to evidence the Term Loans to be extended by the
Lenders to the Companies.
(b) Upon receipt of the Term Notes from the Companies, the
Lenders hereby agree to extend to the Companies the Term Loans in the aggregate
principal amount of $65,000,000. No Lender shall be required to advance any
amount in excess of its Ratable Portion of the Term Loans requested.
(c) The Term Loans shall be repayable in installments as
provided in Section 2.4(b).
(d) In the event this Agreement or the Line of Credit is
terminated by either the Lenders acting through the Agent or the Companies for
any reason whatsoever, the Term Loans shall become due and payable on the
effective date of such termination notwithstanding any provision to the
contrary in the Term Notes or this Agreement.
(e) The Companies shall have no right to prepay the Term Loans,
in whole or in part, except as provided in Section 2.4.
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2.3. Letters of Credit. (a) In order to assist the Companies in
establishing or opening Letters of Credit with an Issuing Bank the Companies
have requested the Agent on behalf of the Lenders to join in the applications
for such Letters of Credit and/or guarantee payment or performance of such
Letters of Credit, or outstanding letters of credit issued under the
Pre-Petition Loan Agreement (the "Pre-Petition Letters of Credit") to the
extent amended, renewed or extended after the Petition Date, and any drafts or
acceptances thereunder, through the issuance of a Letter of Credit Guaranty,
thereby lending the Lenders' credit to the Companies, and the Agent and the
Lenders have agreed to do so. These arrangements shall be handled by the Agent
subject to the terms and conditions set forth below.
(b) Within the Revolving Line of Credit and the Aggregate Net
Availability, the Agent and the Lenders shall assist the Companies in obtaining
Letter(s) of Credit or replacing or guaranteeing the Pre-Petition Letters of
Credit, to the extent amended, renewed or extended after the Petition Date, in
an amount not to exceed the Letter of Credit Sub-Line in the aggregate
outstanding at any one time. The Agent's and Lenders' assistance for amounts in
excess of the limitation set forth herein shall at all times and in all
respects be in the Agent's sole discretion. It is understood that the form and
purpose of each Letter of Credit must be acceptable to the Agent in its
reasonable business judgment. Any and all outstanding Letters of Credit shall
be treated as a Revolving Credit Loan for Availability purposes.
Notwithstanding anything herein to the contrary, upon the occurrence of a
Default and/or Event of Default, the Agent's assistance in connection with the
issuance of a Letter of Credit Guaranty shall be in the Agent's sole discretion
unless such Default and/or Event of Default is cured or waived by the Agent,
acting on the instructions of the Required Lenders.
(c) The Agent shall have the right, without notice to any of the
Companies, to charge the Revolving Loan Account on the Agent's books (without
double-counting) with the amount of any and all indebtedness, liability or
obligation of any kind incurred by the Agent under any Letter of Credit
Guaranty at the earlier of (a) payment by the Agent under the Letters of Credit
Guaranty or (b) the occurrence of an Event of Default. Any amount charged to
the Revolving Loan Account shall be deemed a Revolving Credit Loan hereunder
and shall incur interest at the rate provided in Section 3.1.
(d) In order to request the issuance of a Letter of Credit (or
to amend, renew or extend a Pre-Petition Letter of Credit), the Designated
Borrowing Officer as agent for the Companies shall deliver a notice to the
Agent in form and substance
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satisfactory to the Agent requesting the issuance of a Letter of Credit (or
identifying Pre-Petition Letters of Credit to be amended, renewed or extended).
All of the Pre- Petition Letters of Credit, to the extent amended, renewed or
extended after the Petition Date, which are covered by a Letter of Credit
Guaranty shall be deemed issued pursuant to this Agreement. Each request shall
be delivered by the Designated Borrowing Officer as agent for the Companies and
shall constitute, unless otherwise disclosed in writing to the Agent and the
Lenders, a representation and warranty by the Companies that (a) the
representations and warranties contained in this Agreement are true and correct
in all material respects on and as of such date as though made on and as of
such date, (b) as the result of the issuance of the requested Letter of Credit
or the requested, amendment, renewal or extension of the Pre-Petition Letter of
Credit, no Default or Event of Default will occur and (c) such requested Letter
of Credit, when added to the stated amount of outstanding Letters of Credit,
the stated amount of Pre-Petition Letters of Credit not deemed issued pursuant
to this Agreement, any matured reimbursement obligations with respect to the
foregoing and the requested amount of any other Letter of Credit, requests for
which have been delivered to the Agent by the Companies, is within the Letter
of Credit Sub-Line and Aggregate Net Availability and Revolving Line of Credit.
The accuracy of all the matters referred to in the preceding sentence shall be
a condition precedent to the Agent's and the Lenders' obligations to issue any
Letter of Credit Guaranty.
(e) Each of the Companies unconditionally indemnifies the Agent
and the Lenders and holds the Agent and the Lenders harmless from any and all
loss, claim or liability incurred by the Agent and/or the Lenders arising from
any transactions or occurrences relating to any Letter of Credit, any
collateral relating thereto, any drafts or acceptances thereunder, and all
obligations thereunder, including any such loss or claim due to any action
taken by any Issuing Bank, other than for any such loss, claim or liability
arising out of the gross negligence or willful misconduct by the Agent and/or
the Lenders under any Letter of Credit Guaranty. Each of the Companies further
agrees to hold the Agent and the Lenders harmless from any error or omission,
negligence or misconduct by the Issuing Bank with respect thereto. The
Companies' unconditional obligation to the Agent and the Lenders hereunder
shall not be modified or diminished for any reason or in any manner whatsoever,
other than as a result of the Agent's gross negligence or willful misconduct.
Each of the Companies agrees that any charges incurred by the Agent and/or the
Lenders for its account to the Issuing Bank shall be conclusive on the
Companies and may be charged to the Revolving Loan Account.
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(f) The Agent and/or the Lenders shall not be responsible for:
the existence, character, quality, quantity, condition, packing, value or
delivery of the goods purporting to be represented by any documents; any
difference or variation in the character, quality, quantity, condition,
packing, value or delivery of the goods from that expressed in the documents;
the validity, sufficiency or genuineness of any documents or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, insufficient, fraudulent or forged; the time, place,
manner or order in which shipment is made; partial or incomplete shipment, or
failure or omission to ship any or all of the goods referred to in any Letter
of Credit or documents; any deviation from instructions; delay, default, or
fraud by the shipper and/or anyone else in connection with the Collateral or
the shipping thereof; or any breach of contract between the shipper or vendor
and any of the Companies.
(g) If any Event of Default shall have occurred and be
continuing, the Companies will, upon demand by the Agent, pay to the Agent cash
or Cash Equivalents in an amount equal to 105% of the maximum amount then
available to be drawn under each outstanding Letter of Credit. Such funds or
Cash Equivalents shall be held by the Agent in a cash collateral account (the
"Cash Collateral Account"). The Cash Collateral Account shall be in the name of
the Agent (as a cash collateral account), and shall be under the sole dominion
and control of the Agent and subject to the terms of this Section 2.3(g). The
Companies hereby pledge, and grant to the Agent a security interest in, all
such funds or Cash Equivalents held in the Cash Collateral Account from time to
time and all proceeds thereof, as security for the payment of all amounts due
in respect of the Letters of Credit, whether or not then due. From time to time
after funds or Cash Equivalents are deposited in the Cash Collateral Account,
the Agent may apply such funds or Cash Equivalents then held in the Cash
Collateral Account to the payment of any amounts, in such order as the Agent
may elect, as shall be or shall become due and payable by the Companies with
respect to the Letters of Credit. None of the Companies nor any person or
entity claiming on behalf of or through any Company shall have any right to
withdraw any of the funds or Cash Equivalents held in the Cash Collateral
Account, except that upon the termination of any Letter of Credit in accordance
with its terms and the payment of all amounts payable by the Company to the
Agent in respect thereof, any funds remaining in the Cash Collateral Account in
excess of 105% of the aggregate amount of the then remaining Letters of Credit
shall be returned to the Companies so long as there are no outstanding
Obligations or, if there are outstanding Obligations, applied against such
Obligations. The Agent shall invest the funds in the Cash Collateral Account in
Cash Equivalents or deposit such funds in an interest bearing
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account, and interest and earnings thereon, if any, shall be the property of
the Companies if no other Obligations or Pre-Petition Obligations are
outstanding.
(h) Any Pre-Petition Letters of Credit outstanding on the date
of the Final Order shall be from and after such date deemed to be and become
for all purposes Letters of Credit outstanding under this Agreement and no
longer outstanding under the Pre-Petition Loan Agreement.
2.4. Repayment; Mandatory Payments and Prepayment. (a) The
Companies shall repay the entire unpaid aggregate principal amount of the
Revolving Credit Loans on the Termination Date.
(b) The Companies shall repay the Term Loans in quarterly
installments (each a "Repayment Installment") on the last Business Day of the
calendar quarters set forth below and in the respective amounts set forth
below:
Calendar
Quarter Ending Amount
November 30, 1997 $3,250,000
February 28, 1998 $3,250,000
May 31, 1998 $3,250,000
August 31, 1998 $3,250,000
November 30, 1998 $3,250,000
February 28, 1999 $3,250,000
May 31, 1999 $45,500,000
provided, however, that the Companies shall repay the entire unpaid principal
amount of the Term Loans on the Termination Date.
(c) The Companies shall use Asset Sale Proceeds to prepay
principal in respect of Pre-Petition Revolving Credit Loans and then Revolving
Credit Loans to the extent necessary so that after giving effect thereto the
Aggregate Net Availability is the same as existed immediately prior to the
transaction giving rise to such Asset Sale Proceeds; and then to prepay
scheduled Repayment Installments, to be applied fifty percent (50%) in inverse
order of their maturities and fifty percent (50%) in direct order of their
maturities.
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(d) No prepayment fee shall be payable in respect of any
mandatory payment or prepayment under this Section 2.4.
(e) All amounts in the Concentration Account, other than Asset
Sale Proceeds, whether relating to assets in existence on the Petition Date or
thereafter, shall be applied first, to the Pre-Petition Revolving Credit Loans,
including interest thereon. Any such amounts, other than Asset Sale Proceeds,
remaining after the Pre- Petition Revolving Credit Loans have been paid in
full, shall be credited to the Revolving Credit Loans and then to the other
Obligations. Application will be made upon the Agent's receipt of "collected
funds" at the Agent's bank account in New York, New York on the Business Day of
receipt if received no later than 1:00 pm and on the next succeeding Business
Day if received after 1:00 pm. No checks, drafts or other instrument received
by the Agent shall constitute final payment to the Agent unless and until such
instruments have actually been collected.
2.5. Use of Proceeds. (a) The Companies agree that the proceeds
from the Revolving Credit Loans may only be used to pay and that Letters of
Credit may only be issued to pay or support (i) post-petition operating
expenses of the Companies incurred in the ordinary course of business that are
reflected in the Companies' Cash Budget, (ii) fees required to be paid to the
Office of the United States Trustee pursuant to 28 U.S.C. Section 1930(a),
(iii) compensation for services rendered or reimbursement of expenses incurred
that are permitted to be paid by the Bankruptcy Court under sections 330 or 331
of the Bankruptcy Code (collectively, the "Fee Awards") prior to the date of
the occurrence of an Event of Default to professionals retained pursuant to an
order of the Bankruptcy Court by the Companies or any official committee
appointed pursuant to Section 1102 of the Bankruptcy Code; (iv) allowances of
the type referred to in the immediately preceding clause (iii) that are
permitted to be paid by the Bankruptcy Court under Sections 330 or 331 of the
Bankruptcy Code in an amount not to exceed $4,000,000 in the aggregate for all
professionals after the occurrence of any Event of Default, and (v) prior to
the occurrence of an Event of Default, Permitted Pre-Petition Claim Payments.
Notwithstanding the foregoing, no amounts shall be paid or used pursuant to
this Section 2.5 for, and Permitted Expenses (as hereinafter defined) shall not
include, fees and disbursements incurred by professionals including, without
limitation, any professionals retained by the Company, to the extent incurred
to contest in any proceeding or any other action (a) the validity, extent,
attachment, perfection or priority of the Liens created by the Pre-Petition
Loan Documents or the Post-Petition Loan Documents, (b) the validity, binding
effect or enforceability of the Pre-Petition Loan Documents or the
Post-Petition Loan Documents and the notes issued pursuant
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to such documents or the amount of loans or Obligations or Pre-Petition
Obligations outstanding thereunder or (c) any other rights or interests of the
Agent or any Lender under the Pre-Petition Loan Documents or the Post-Petition
Loan Documents. The expenses set forth in clauses (ii), (iii) and (iv) above
are hereinafter collectively referred to as the "Permitted Expenses". Nothing
herein shall in any way prejudice or prevent the Agent or any Lender from
objecting, for any reason, to any requests or applications made by any party
for compensation or reimbursement of expenses pursuant to section 330 or 331 of
the Bankruptcy Code the payment of which the Companies may use proceeds from
the Revolving Credit Loans as a Permitted Expense in accordance with clause
(ii), (iii) or (iv) of this Section 2.5 or otherwise.
(b) The Companies agree that the proceeds of the Term Loans will
be used, on the Closing Date, first to repay the outstanding Pre-Petition Term
Loans including unpaid interest thereon at the non-default rate and the balance
will be used, on the Closing Date, to repay the outstanding Pre-Petition
Revolving Credit Loans including unpaid interest on the amount prepaid.
2.6. [Intentionally Omitted].
2.7. [Intentionally Omitted].
2.8. Access. Each Lender and the Agent and any of its officers,
employees and/or agents shall have the right, exercisable as frequently as such
Lender and the Agent determines to be appropriate, during normal business hours
(or at such other times as may reasonably be requested by such Lender and the
Agent), to inspect the properties and facilities of the Companies and to
inspect, audit and make extracts from each of the Companies' records, files and
books of account. The Companies shall deliver any document or instrument
reasonably necessary to obtain records from any service bureau maintaining
records for any of the Companies and shall maintain duplicate records or
supporting documentation on media, including, without limitation, computer
tapes and discs owned by the Companies. The Companies shall instruct their
banking and other financial institutions to make available to any Lender such
information and records as such Lender may reasonably request.
2.9. Taxes. (a) Any and all payments by the Companies hereunder
or under the Promissory Notes shall be made free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, attributable thereto and all liabilities with respect
thereto, excluding taxes imposed on or measured by the gross or net income or
revenues of the Lenders
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by the jurisdiction under the laws of which any Lender is organized or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Indemnified Taxes"). If the Companies shall be required by law to deduct
any Indemnified Taxes from or in respect of any sum payable hereunder or under
the Promissory Notes to the Lenders, (i) the sum payable shall be increased as
may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.9) any
Lender receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Companies shall make such deductions and (iii)
the Companies shall pay the full amount deducted to the relevant taxing or
other authority in accordance with applicable law.
(b) In addition, the Companies agree to pay any present or
future stamp or documentary taxes or any other sales, excise or property taxes,
charges or similar levies that arise from any payment made hereunder or under
the Promissory Notes or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or the Promissory Notes (hereinafter
referred to as "Other Taxes").
(c) The Companies shall indemnify the Lenders for the full
amount of Indemnified Taxes or Other Taxes (including, without limitation, any
Indemnified Taxes or Other Taxes imposed by any jurisdiction on amounts payable
under this Section 2.9) paid by the Lenders and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
asserted. This indemnification shall be made within 30 days from the date
Lender makes written demand therefor.
(d) Within 30 days after the date of any payment of Indemnified
Taxes, the Companies shall furnish to the Agent, at its address referred to in
Section 12.10, the original or a certified copy of a receipt evidencing payment
thereof.
(e) Without prejudice to the survival of any other agreement of
the Companies hereunder, the agreements and obligations of the Companies
contained in this Section 2.9 shall survive the payment in full of principal
and interest hereunder and under the Promissory Notes.
2.10. Nature of Obligations. The Companies shall be jointly and
severally liable for the payment and performance of all Obligations to be
performed by any of them, and each Company shall be bound by any notices,
consents or other actions furnished or taken by any of the Companies. At the
request of the Agent,
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each Company shall confirm in writing any action taken or proposed to be taken
by any of the other Companies; provided, however, that the failure by any
Company to furnish such confirmation shall not affect such Company's
obligations under the preceding sentence or any other provision of this
Agreement. Each Company hereby agrees that it shall be jointly and severally
liable for all Obligations and that such liability shall be absolute and
unconditional irrespective of:
(i) any lack of validity or enforceability of any provision of
this Agreement, any other Post-Petition Loan Document or any other agreement or
instrument relating to this Agreement or any other Post-Petition Loan Document,
or avoidance or subordination of any of the Obligations, in any case relating
to any other Company;
(ii) any change in the time, manner or place of payment of, or in
any other term of, or any increase in the amount of, all or any of the
Obligations, or any other amendment or waiver of any term of, or any consent to
departure from any requirement of, this Agreement, any Promissory Note or any
of the other Post- Petition Loan Documents;
(iii) any exchange, release or non-perfection of any Lien on any
collateral for, or any release or amendment or waiver of any term of any
guaranty of, or any consent to departure from any requirement of any guaranty
of, all or any of the Obligations;
(iv) the absence of any attempt to collect any of the Obligations
from any other Company or from any other guarantor or any other action to
enforce the same or the election of any remedy by the Agent and the Lenders;
(v) any waiver, consent, extension, forbearance or granting of
any indulgence to any other Company by the Agent or the Lenders with respect to
any provision of this Agreement or any other Post-Petition Loan Document; or
(vi) any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a borrower or a guarantor.
SECTION 3. INTEREST, FEES AND EXPENSES
3.1. Revolving Credit Loans. Interest on the Revolving Credit
Loans shall be payable monthly as of the end of each month and on the
Termination Date
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and shall be an amount equal to (a) the Applicable Base Rate Margin plus The
Chase Manhattan Bank Rate per annum on the average of the net balances in the
Revolving Loan Account at the close of each day during such month on balances
other than LIBOR Loans and (b) the Applicable Eurodollar Rate Margin plus the
applicable LIBOR on any LIBOR Loan, on a per annum basis, on the LIBOR Loans in
the Revolving Loan Account at the end of each LIBOR Period. In the event of any
decrease in The Chase Manhattan Bank Rate, the rate under clause (a) above, as
of the first of the month following any change, shall be equal to the
Applicable Base Rate Margin plus The Chase Manhattan Bank Rate then in effect.
The rates hereunder shall be calculated based on a 360-day year and the actual
number of days elapsed. The Agent, on behalf of the Lenders, shall be entitled
to charge the Revolving Loan Account for the interest provided for herein when
due.
3.2. Term Loans. Interest on the Term Loans shall be payable
monthly as of the end of each month and on the Termination Date on the unpaid
balance or on payment in full in an amount equal to the Applicable Term Loan
Margin plus The Chase Manhattan Bank Rate per annum, on the average of the net
balance of the Term Loans owing to the Lenders at the close of each day during
such month. In the event of any change in The Chase Manhattan Bank Rate, the
rate as of the first of the month following any change, shall be equal to the
Applicable Term Loan Margin plus The Chase Manhattan Bank Rate then in effect.
The rate hereunder shall be calculated based on a 360 day year and the actual
number of days elapsed. The Agent and the Lenders shall be entitled to charge
the Revolving Loan Account for the interest provided for herein when due.
3.3. LIBOR Election. Commencing August 15, 1997, the Companies
may elect to use LIBOR as to any Revolving Credit Loan provided (a) there is
then no Default or Event of Default, (b) the Companies have or a Designated
Borrower has advised the Agent of (i) their election to use LIBOR and (ii) the
LIBOR Period is selected no later than three (3) Business Days preceding the
first day of the selected LIBOR Period, in which event (c) the election and
LIBOR shall be effective, provided there is then no Default or Event of
Default, on the fourth Business Day following said notice and (d) no more than
$25,000,000 principal amount of LIBOR Loans may be outstanding at any time. The
LIBOR elections must be for $1,000,000 or whole multiples thereof and there
shall be no more than three (3) LIBOR Loans outstanding at one time. If no such
election is timely made or can be made, or if the LIBOR rate cannot be
determined, then the Agent shall compute interest by reference to The Chase
Manhattan Bank Rate. In addition, the Companies shall pay to the Agent for the
benefit of the Lenders, upon the request of the Agent, such amount or amounts
as
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shall compensate the Agent and/or the Lenders for any loss, costs or expenses
incurred by the Agent and/or the Lenders (as reasonably determined by the Agent
and the Lenders) as a result of: (i) any payment or prepayment on a date other
than the last day of a LIBOR Period for such LIBOR Loan or (ii) any failure of
the Companies to borrow a LIBOR Loan on the date for such borrowing specified
in the relevant notice; such compensation to include, without limitation, an
amount equal to any loss or expense suffered by the Agent and/or the Lenders
during the period from the date of receipt of such payment or prepayment or the
date of such failure to borrow to the last day of such LIBOR Period if the rate
of interest obtained by the Agent and/or the Lenders upon the reemployment of
an amount of funds equal to the amount of such payment, prepayment or failure
to borrow is less than the rate of interest applicable to such LIBOR Loan for
such LIBOR Period. The determination by the Agent and/or the Lenders of the
amount of any such loss or expense, when set forth in a written notice to the
Companies, containing the Agent's and/or the Lenders' calculations thereof in
reasonable detail, shall be conclusive on the Companies, in the absence of
manifest error. Calculation of all amounts payable to the Agent and/or the
Lenders under this Section 3.3 with regard to LIBOR Loans shall be made as
though the Agent and/or the Lenders had actually funded the LIBOR Loans through
the purchase of deposits in the relevant market and currency, as the case may
be, bearing interest at the rate applicable to such LIBOR Loans in an amount
equal to the amount of the LIBOR Loans and having a maturity comparable to the
relevant interest period; provided, however, that the Agent and the Lenders may
fund each of the LIBOR Loans in any manner the Agent and the Lenders see fit
and the foregoing assumption shall be used only for calculation of amounts
payable under this Section 3.3. In addition, notwithstanding anything to the
contrary contained herein, to the extent that the Agent and the Lenders apply
proceeds of Collateral, including the Accounts, or other amounts received from
or on behalf of the Companies to the Revolving Credit Loans such application
shall be (i) initially to the Revolving Credit Loans bearing interest based on
The Chase Manhattan Bank Rate and (ii) subsequently to LIBOR Loans; provided,
however, that (x) upon the occurrence and during the continuance of an Event of
Default or (y) in the event the aggregate amount of outstanding LIBOR Loans
exceeds the Aggregate Net Availability or the applicable maximum levels set
forth therefor herein, the Agent and the Lenders may apply all such amounts
received to the payment of Obligations in such manner and in such order as the
Agent and the Lenders may elect in their reasonable business judgment. In the
event that any such amounts are applied to LIBOR Loans, such application shall
be treated as a prepayment of such loans and the Agent and the Lenders shall be
entitled to the compensation described in this Section 3.3.
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3.4. Pre-Petition Obligations. The Companies shall pay interest
with respect to the Pre-Petition Obligations and, subject to Section 2.3(h),
the Letter of Credit Guaranty Fees (as defined in the Pre-Petition Loan
Agreement) in the amounts and in accordance with the terms of the Pre-Petition
Loan Documents. The Agent and the Lenders shall be entitled to charge the
Revolving Loan Account for the interest and fees provided for herein when due
as if the Petition Date had not occurred. The Pre-Petition Obligations will
only accrue interest at the Default Rate of Interest if the Obligations are
accruing interest at the Default Rate of Interest.
3.5. Letter of Credit Fees. In consideration of each Letter of
Credit Guaranty of the Agent, the Companies shall pay the Agent for the benefit
of the Lenders the Letter of Credit Guaranty Fee which shall be an amount equal
to two percent (2%) per annum, payable monthly, on the face amount of each
outstanding Letter of Credit less the amount of any and all amounts previously
drawn under the Letter of Credit. The Lenders shall share in such Letter of
Credit Guaranty Fee in accordance with their respective agreements with the
Agent.
3.6. Issuing Bank Charges. Any charges, fees, commissions, costs
and expenses charged to the Agent and/or the Lenders for the Companies' account
by any Issuing Bank in connection with or arising out of Letters of Credit
issued pursuant to this Agreement or the Pre-Petition Loan Documents or out of
transactions relating thereto will be charged to the Revolving Loan Account in
full when charged to and paid by the Agent and when made by any such Issuing
Bank shall be conclusive on the Agent.
3.7. Out-of-Pocket Expenses. The Companies shall jointly and
severally reimburse or pay the Agent, as the case may be, for all reasonable
Out-of-Pocket Expenses.
3.8. Revolving Line of Credit Fee. Upon the last Business Day of
each month, commencing with the last day of the month in which this Agreement
is executed, the Companies shall jointly and severally pay the Agent for the
benefit of the Lenders the Revolving Line of Credit Fee.
3.9. Arrangement Fee. The Companies shall pay the Arrangement
Fee to the Agent on the Closing Date.
3.10. Closing Fee. To induce the Agent and the Lenders to enter
into this Agreement and to extend to the Companies the Revolving Credit Loans
and the
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Term Loans, and to extend each Letter of Credit Guaranty, the Companies shall
pay to the Agent for the benefit of the Lenders a Closing Fee in the amount of
$1,375,000 upon the Closing Date, which gives effect to all applicable credits.
3.11. Agent Fee. The Companies shall pay to the Agent on the
Closing Date and on the first anniversary thereafter the Agent Fee, which shall
be fully earned and not refundable or rebateable when due.
3.12. Other Expenses. The Companies shall pay the Agent's
standard charges for, and the fees and expenses of, the personnel used by the
Agent for reviewing the books and records of the Companies and for verifying,
testing, protecting, safeguarding, preserving or disposing of all or any part
of the Collateral; provided, however, that the foregoing shall not be payable
except during the continuance of an Event of Default.
3.13. Payment of Fees. Each of the Companies hereby authorizes
the Agent to charge the Revolving Loan Account with the Agent with the amount
of all payments due hereunder as such payments become due. Each of the
Companies confirms that any charges which the Agent may so make will be made as
an accommodation to the Companies and solely at the Agent's discretion.
3.14. No Usury. Notwithstanding any other provision of this
Agreement, the maximum rate of interest payable on the Obligations and the Pre-
Petition Obligations shall not exceed the maximum rate permitted by applicable
law.
4. CONDITIONS PRECEDENT
4.1. Conditions to the Initial Loans. Notwithstanding any other
provision of this Agreement, the Lenders shall not be obligated to make the
initial Revolving Credit Loans and Term Loans or to incur any obligations with
respect to Letters of Credit unless and until the events set forth in Section
4.1(a) shall have occurred and the Companies shall have delivered to the Agent
in form and substance satisfactory to the Lenders, the documents set forth in
Section 4.1(b), each dated as of the Closing Date unless otherwise indicated.
(a) Events.
(i) The Bankruptcy Court shall have entered the Interim Order in
the form annexed hereto as Exhibit D or with such modifications as are
acceptable
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to the Agent and Lenders, in their sole and absolute discretion. Such
Interim Order shall be in full force and effect and shall not have been
vacated, reversed, modified, amended or stayed in any respect and, in
the event that such order is the subject of any pending appeal, the
performance of any obligation of any party hereto shall not be the
subject of a stay pending appeal.
(ii) All corporate and judicial proceedings taken in connection
with the execution of this Agreement, the making of the Revolving
Credit Loans, the making of the Term Loans and the incurrence of any
obligations with respect to Letters of Credit and the execution and
delivery of all other Post-Petition Loan Documents and all documents
and papers relating thereto shall be satisfactory to the Agent and its
counsel. The Agent and its counsel shall have received copies of such
documents and papers as the Agent or its counsel may reasonably request
in connection therewith, all in form and substance satisfactory to the
Agent and its counsel.
(iii) There shall exist no claim, action, suit, investigation,
litigation or proceeding pending in any court or before any arbitrator
or Governmental Authority that relates to the Post-Petition Obligations
or that the Agent or any Lender shall determine in its absolute
discretion has a reasonable likelihood of having a Material Adverse
Effect or causing a Material Adverse Change.
(b) Closing Documents.
(i) This Agreement and each of the other Post-Petition Loan
Documents, duly executed and delivered by each Company.
(ii) Revolving Credit Notes to the order of each Lender duly
executed by each Company.
(iii) Term Notes to the order of each Lender duly executed by
each Company.
(iv) Resolutions of the board of directors of each Company,
certified by the Secretary or Assistant Secretary of such Company, as
of the Closing Date, to be duly adopted and in full force and effect on
such date, authorizing (i) the consummation of each of the transactions
contemplated by the Post- Petition Loan Documents and (ii) specific
officers to execute and deliver this Agreement and the other
Post-Petition Loan Documents.
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(v) Resolutions of the board of directors of each Company,
certified by the Secretary or Assistant Secretary of Company, as of the
Closing Date, to be duly adopted and in full force and effect on such
date, authorizing the Petition and all other transactions contemplated
by the Petition.
(vi) A certificate of the chief financial officer of each
Company, satisfactory in form and substance to the Agent and the
Lenders, stating that all of the representations and warranties of such
Company contained herein or in any of the Post-Petition Loan Documents
are correct in all material respects on and as of the Closing Date as
though made on and as of such date, and no event has occurred and is
continuing, or would result from the making of the Revolving Credit
Loans or the Term Loans or the incurrence of any obligation with
respect to Letters of Credit, if made or incurred on the Closing Date,
which constitutes or would constitute a Default or an Event of Default.
(vii) Certificates of the Secretary or an Assistant Secretary of
each Company, dated the Closing Date, as to the incumbency and
signatures of the officers of Companies executing this Agreement, the
Promissory Notes and each of the other Post-Petition Loan Documents and
any other certificate or other document to be delivered pursuant hereto
or thereto, together with evidence of the incumbency of such Secretary
or Assistant Secretary.
(viii) Evidence that the casualty insurance policies provided
for in Section 8.3(a) are in full force and effect, together with
appropriate evidence showing a loss payable clause in favor of the
Agent.
(ix) Favorable opinions of counsels to the Companies, in form
and substance satisfactory to the Agent.
(x) The Companies shall have delivered to the Agent all
information necessary for the Agent to issue wire transfer instructions
on behalf of the Companies for the initial and subsequent loans and/or
advances to be made under this Agreement including, but not limited to,
disbursement authorizations in form acceptable to the Agent.
(xi) After giving effect to all loans, advances and extensions
of credit to be made on the Closing Date, the Companies shall have an
opening aggregate Availability of $30,000,000.
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(xii) The Companies shall have established a system of bank
accounts with respect to the collection of Accounts and the deposit of
proceeds of Inventory as shall be acceptable to the Agent in all
respects.
(xiii) Companies shall have provided any additional information
and materials as the Lenders may reasonably request.
4.2. Conditions to Each Revolving Credit Loan, etc.. It shall be a
further condition to the funding of the initial Revolving Credit Loans, the
Term Loans, each subsequent Revolving Credit Loan and the incurrence of any
Obligation with respect to Letters of Credit that the following statements
shall be true on the date of each such funding or incurrence:
(a) All of the representations and warranties of Companies
contained herein or in any of the other Post-Petition Loan Documents shall be
correct on and as of the Closing Date in all material respects and the date of
funding of each such Revolving Credit Loan or incurrence of any obligation with
respect to Letters of Credit as though made on and as of such date, except to
the extent that any such representation or warranty expressly relates to an
earlier date and for changes therein permitted or contemplated by this
Agreement.
(b) No event shall have occurred and be continuing, or would
result from the funding of any Revolving Credit Loan or the incurrence of any
obligation with respect to Letters of Credit, which constitutes or would
constitute a Default or an Event of Default.
(c) The Companies shall have delivered to the Agent the Cash
Budget required by Section 7.1 for the week in which any Revolving Credit Loan
is to be made or the obligations with respect to any Letter of Credit is to be
incurred.
(d) No lien pursuant to Section 412 of the Code or Section 4068
of ERISA shall have arisen and no notice of any such lien shall have been
filed.
(e) The Interim Order shall be in full force and effect and
shall not have been vacated, reversed, modified, amended or stayed in any
respect or, if entered by the Bankruptcy Court, the Final Order shall be in
full force and effect and shall be in form and substance satisfactory to the
Agent and the Lenders and shall not have been vacated, reversed, modified,
amended or stayed in any respect, and in the
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event that either such order is the subject of any pending appeal, the
performance of any obligation of any party hereto shall not be the subject of
any stay pending appeal.
(f) There shall exist no claim, action, suit, investigation,
litigation or proceeding, pending in any court or before any arbitrator or
Governmental Authority that relates to the Post-Petition Obligations or that
the Agent or the Required Lenders shall determine in its or their absolute
discretion has a reasonable likelihood of having a Material Adverse Effect or
causing a Material Adverse Change.
4.3. Representation and Confirmation. The acceptance by any
Company of the proceeds of any Revolving Credit Loan or Term Loan shall be
deemed to constitute, as of the date of such acceptance, (a) a representation
and warranty by such Company that the applicable conditions in this Section 4
have been satisfied and (b) a confirmation by such Company of the granting and
continuance of the Lien granted to the Agent for the benefit of the Lenders
pursuant to this Agreement.
5. COLLATERAL
5.1. Security. (a) To induce the Lenders to make the Revolving
Credit Loans, the Term Loans and to incur obligations with respect to Letters
of Credit, the Companies hereby (i) reaffirm the validity, perfection and first
priority of the Liens previously granted to the Agent and the Lenders in the
Pre-Petition Collateral under the Pre-Petition Loan Documents, and (ii) further
grant to the Agent for the benefit of the Lenders as security for the
Obligations a continuing first priority lien and security interest (subject
only to Permitted Expenses, Superior Existing Liens and Permitted Purchase
Money Liens) in accordance with sections 364(c)(2) and (3) of the Bankruptcy
Code in and to all of the property and assets of the Companies and their
estates, real and personal, tangible and intangible, whether now owned or
existing or hereafter acquired or arising and regardless of where located
(hereinafter referred to as the "Collateral") including, but not limited to:
(i) all Accounts of each of the Companies
(ii) all Chattel Paper of each of the Companies;
(iii) all Contracts of each of the Companies;
(iv) all Documents of each of the Companies;
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(v) all Equipment of each of the Companies;
(vi) all General Intangibles of each of the Companies;
(vii) all Instruments of each of the Companies;
(viii) all Inventory of each of the Companies;
(ix) all Leases to which any of the Companies are a party;
(x) all Real Estate owned by any of the Companies;
(xi) all Trademarks of each of the Companies;
(xii) all Service Marks of each of the Companies;
(xiii) all Licenses of each of the Companies;
(xiv) all Pledged Collateral;
(xv) all causes of action of each of the Companies;
(xvi) each Local Account, the Concentration Account, the
Operating Account and the Cash Collateral Account;
(xvii) all other goods, real and personal property of each of
the Companies, whether tangible or intangible and whether now owned or
hereafter acquired and wherever located;
(xviii) to the extent not otherwise included, all Proceeds of
each of the foregoing and all accessions to, substitutions and
replacements for, and rents, profits and products of each of the
foregoing;
(xix) to the extent not otherwise included, all monies and other
property of any kind which, after the Petition Date, is received by any
of the Companies in connection with refunds with respect to taxes,
assessments and governmental charges imposed on the Companies or any of
their property or income; and
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(xx) to the extent not otherwise included, all monies and other
property of any kind and nature recovered by any of the Companies in
accordance with the provisions of the Bankruptcy Code, including,
without limitation, sections 542, 553, 544, 547 and 548 thereof, or
other applicable law.
(b) In addition, as collateral security for the prompt and
complete payment when due of the Obligations and in order to induce the Lenders
as aforesaid, each Company hereby further grants to the Agent for the benefit
of the Lenders a Lien on all property of such Company held by the Agent or any
of the Lenders, including, without limitation, all property of every
description, now or hereafter in the possession or custody of or in transit to
the Agent or any of the Lenders for any purpose, including safekeeping,
collection or pledge, for the account of such Company or as to which such
Company may have any right or power.
(c) As further adequate protection for the use by the Companies
of Pre-Petition Collateral and for any diminution in the value of the interest
of the Lenders in the Pre-Petition Collateral, the Agent for the benefit of the
Lenders under the Pre-Petition Loan Agreement is hereby granted, under sections
361 and 364 of the Bankruptcy Code, a valid, binding, enforceable and perfected
security interest in and lien on the Collateral subject and subordinate only to
(i) the lien and security interest granted to the Agent for the benefit of the
Lenders under this Agreement and the other Post-Petition Loan Documents
securing the Obligations, and (ii) Permitted Expenses, Superior Existing Liens
and Permitted Purchase Money Liens. The lien and security interest granted
hereunder to the Agent for the benefit of the Lenders under the Pre-Petition
Loan Agreement shall not be subject and subordinate to any security interest or
lien that is avoided and preserved for the benefit of the estates of the
Companies under section 551 of the Bankruptcy Code or, except as set forth in
clauses (i) and (ii) above, be made on a parity with, or subordinated to, any
other Lien under section 364(d) of the Bankruptcy Code or otherwise.
5.2. Perfection of Security Interests. (a) The liens and
security interests granted herein shall be deemed valid, enforceable and
perfected by entry of the Interim Order and the Final Order, as the case may
be. No financing statement, notice of lien or similar instrument in any
jurisdiction or filing office need be filed or any other action taken in order
to validate or perfect the liens and security interests granted by or pursuant
to this Agreement, the Interim Order or the Final Order.
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(b) The liens and security interests, lien priority,
administrative priorities and other rights and remedies granted to the Agent
for the benefit of the Lenders pursuant to this Agreement, the Interim Order
and/or the Final Order (specifically including but not limited to the
existence, perfection and priority of the Liens and security interests provided
herein and the administrative priority provided herein) shall not be modified,
altered or impaired in any manner by any other financing or extension of credit
or incurrence of debt by the Companies (pursuant to section 364 of the
Bankruptcy Code or otherwise), or by any dismissal or conversion of the Chapter
11 Cases, or by any other act or omission whatever. Without limitation,
notwithstanding any such order, financing, extension, incurrence, dismissal,
conversion, act or omission:
(i) except for the Permitted Expenses having priority over the
Obligations, no costs or expenses of administration which have been or
may be incurred in the Chapter 11 Cases or any conversion of the same
or in any other proceedings related thereto, and no priority claims,
are or will be prior to or on a parity with any claim of the Agent or
the Lenders against the Companies in respect of any Obligation;
(ii) the liens and security interests set forth in Section 5.1
shall constitute valid and perfected first priority liens and security
interests, subject only to the Permitted Expenses, Superior Existing
Liens and Permitted Purchase Money Liens, and shall be prior to all
other liens and security interests, now existing or hereafter arising,
in favor of any other creditor or any other Person whatever; and
(iii) the liens and security interests granted hereunder shall
continue valid and perfected without the necessity that financing
statements be filed or that any other action be taken under applicable
nonbankruptcy law.
(c) Notwithstanding subsections (a) and (b) of this Section 5.2,
or any failure on the part of the Companies or the Agent or the Lenders to
perfect, maintain, protect or enforce the liens and security interests in the
Collateral granted hereunder, the Interim Order and the Final Order (when
entered) shall automatically, and without further action by any Person, perfect
such liens and security interests against the Collateral.
5.3. Rights of Lender; Limitations on Lenders' Obligations. (a)
Sub- ject to Companies' rights and duties under the Bankruptcy Code, it is
expressly
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agreed by the Companies that, anything herein to the contrary notwithstanding,
the Companies shall remain liable under each of their Contracts to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder. Neither the Agent nor any of the Lenders shall have any obligation
or liability under any Contract by reason of or arising out of this Agreement,
the other Post-Petition Loan Documents, the Pre-Petition Loan Documents or the
granting to the Agent for the benefit of the Lenders of a Lien therein or the
receipt by the Agent or the Lenders of any payment relating to any Contract
pursuant hereto, nor shall the Agent or any of the Lenders be required or
obligated in any manner to perform or fulfill any of the obligations of the
Companies under or pursuant to any Contract, or to make any payment, or to make
any inquiry as to the nature or the sufficiency of any payment received by it
or the sufficiency of any performance by any party under any Contract, or to
present or file any claim, or to take any action to collect or enforce any
performance or the payment of any amounts which may have been assigned to it or
to which it may be entitled at any time or times.
(b) The Agent may at any time, upon the occurrence and during
the continuation of any Event of Default, after first notifying the Companies
of its intention to do so, notify Account Debtors, parties to the Contracts of
the Companies, obligors of Instruments of the Companies and obligors in respect
of Chattel Paper of the Companies that the right, title and interest of the
Companies in and under such Accounts, such Contracts, such Instruments and such
Chattel Paper have been assigned to the Agent for the benefit of the Lenders
and that payments shall be made directly to the Agent. Upon the request of the
Agent, the Companies will so notify such Account Debtors, such parties to
Contracts, obligors of such Instruments and obligors in respect of such Chattel
Paper. During the continuation of an Event of Default, the Agent may in its own
name or in the name of others communicate with such parties to such Accounts,
such Contracts, such Instruments and such Chattel Paper to verify with such
Persons to Agent's satisfaction the existence, amount and terms of any such
Accounts, Contracts, Instruments or Chattel Paper. The automatic stay under
section 362 of the Bankruptcy Code shall be deemed vacated so as to permit the
Agent to take the actions permitted under this Section 5.3(b), and the
Companies hereby acknowledge and agree that any actions taken by the Agent
hereunder shall not constitute a violation of the automatic stay provided by
section 362 of the Bankruptcy Code and the Companies hereby waive the automatic
stay to the extent applicable.
(c) The Agent shall have the right to make test verifications of
the Accounts and physical verifications of the Inventory in any manner and
through any
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medium that it considers advisable, and the Companies agree to furnish all such
assistance and information as the Agent may require in connection therewith.
The Companies, at their expense, will cause certified independent public
accountants satisfactory to the Agent to prepare and deliver to the Agent at
any time and from time to time, promptly upon the Agent's request, the
following reports: (i) a reconciliation of all Accounts of the Companies, (ii)
an aging of all Accounts of the Companies, (iii) trial balances, and (iv) a
test verification of such Accounts as the Agent may request. The Companies, at
their expense, will cause certified independent public accountants satisfactory
to the Agent to prepare and deliver to the Agent the results of the annual
physical verification of their Inventory made or observed by such accountants.
(d) The Companies will keep and maintain the Equipment in good
operating condition sufficient for the continuation of the business conducted
by the Companies on a basis consistent with past practices, and the Companies
will provide all maintenance and service and all repairs necessary for such
purpose.
5.4. Performance by the Lenders of Companies' Obligations. If
the Companies fail to perform or comply with any of their agreements contained
herein and the Agent, as provided for by the terms of this Agreement, shall
perform or comply, or otherwise cause performance or compliance, with such
agreement, the reasonable expenses of the Agent incurred in connection with
such performance or compliance, together with interest thereon at the rate then
in effect in respect of the Revolving Credit Loans, shall be payable by the
Companies to the Agent on demand and shall constitute Obligations secured by
the Collateral. Performance of the Companies' obligations as permitted under
this Section 5.4 shall in no way constitute a violation of the automatic stay
provided by section 362 of the Bankruptcy Code and the Companies hereby waive
applicability thereof. Moreover, neither the Agent nor any of the Lenders shall
in any way be responsible for the payment of any costs incurred in connection
with preserving or disposing of Collateral pursuant to section 506(c) of the
Bankruptcy Code and the Collateral may not be charged for the incurrence of any
such cost.
5.5. Limitation on Lenders' Duty in Respect of Collateral.
Neither the Agent nor any of the Lenders shall have any duty as to any
Collateral in its possession or control or in the possession or control of any
of its agents or nominees of or any income thereon or as to the preservation of
rights against prior parties or any other rights pertaining thereto, except
that the Agent and the Lenders shall use reasonable care with respect to the
Collateral in their possession or under their
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control. Upon request of the Companies, the Lenders shall account for any
moneys received by them in respect of any foreclosure on or disposition of the
Collateral.
5.6. Remedies, Rights Upon Default. (a) If any Event of Default
shall occur and be continuing, the Agent may, and on the direction of the
Required Lenders will, exercise in addition to all other rights and remedies
granted to it in this Agreement and in any other Post-Petition Loan Document,
all rights and remedies of a secured party under the U.C.C. Without limiting
the generality of the foregoing, each Company expressly agrees that in any such
event the Agent, without demand of performance or other demand, advertisement
or notice of any kind (except the notice specified below of time and place of
public or private sale) to or upon such Company or any other Person (all and
each of which demands, advertisements and/or notices are hereby expressly
waived to the maximum extent permitted by the U.C.C. and other applicable law),
may forthwith collect, receive, appropriate and realize upon the Collateral, or
any part thereof, and/or may forthwith sell, lease, assign, give an option or
options to purchase, or sell or otherwise dispose of and deliver the Collateral
(or contract to do so), or any part thereof, in one or more parcels at public
or private sale or sales, at any exchange or broker's board or at any of the
Agent's offices or elsewhere at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk. The Agent
shall have the right upon any such public sale or sales, and, to the extent
permitted by law, upon any such private sale or sales, to purchase the whole or
any part of said Collateral so sold, free of any right or equity of redemption,
which equity of redemption the Companies hereby release. The Companies further
agree, at the Agent's request, to assemble the Collateral and make it available
at places which the Agent shall reasonably select, whether at the Companies'
premises or elsewhere. The Agent shall apply the proceeds of any such
collection, recovery, receipt, appropriation, realization or sale (net of all
expenses incurred by the Agent and the Lenders in connection therewith,
including, without limitation, attorney's fees), first to the Obligations in
any order deemed appropriate by the Agent and then to the Pre-Petition
Obligations, the Companies remaining liable for any deficiency remaining unpaid
after such application, and only after so paying over such net proceeds and
after the payment by the Agent of any other amount required by any provision of
law, including section 9-504(1)(c) of the U.C.C., need the Agent account for
the surplus, if any, to the Companies. To the maximum extent permitted by
applicable law, each Company waives all claims, damages, and demands against
the Agent and the Lenders arising out of the repossession, retention or sale of
the Collateral except such as arise out of the gross negligence or wilful
misconduct of the Agent or the Lenders. Each Company agrees that the Agent and
the Lenders need not give more than ten (10)
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days' notice (which notification shall be deemed given when mailed or delivered
on an overnight basis, postage prepaid, addressed to such Company at its
address referred to in Section 12.10) of the time and place of any public sale
or of the time after which a private sale may take place and that such notice
is reasonable notification of such matters. The Companies shall remain liable
for any deficiency if the proceeds of any sale or disposition of the Collateral
are insufficient to pay all Obligations and Pre-Petition Obligations. The
Companies are also liable for the fees of any attorneys employed by the Agent
and the Lenders to collect such deficiency.
(b) In addition to the rights granted to the Agent and the
Lenders under Section 5.6(a) above, if any Event of Default shall occur and be
continuing, the Agent may transfer and register in its name or in the name of
its nominee the whole or any part of the Pledged Collateral, exercise the
voting rights with respect thereto, collect and receive all cash dividends and
other distributions made thereon and otherwise act with respect to the Pledged
Collateral as though the Lenders were the outright owner thereof; provided,
however, the Agent shall not have any duty to exercise any such right or to
preserve the same and shall not be liable for any failure to do so or for any
delay in doing so.
(c) Each Company agrees to pay all reasonable costs of the Agent
and the Lenders, including, without limitation, attorneys' fees, incurred in
connection with the enforcement of any of their rights and remedies hereunder.
(d) Each Company hereby waives presentment, demand, protest or
any notice (to the maximum extent permitted by applicable law) of any kind in
connection with this Agreement or any Collateral. In no event shall prior
recourse to any Collateral be a prerequisite to the Agent's right to demand
payment of any of the Obligations or the Pre-Petition Obligations.
5.7. Automatic Stay. During the continuance of an Event of
Default, upon three Business Days notice to the Companies, any Creditors'
Committee and the United States Trustee, the automatic stay provided under
section 362 of the Bankruptcy Code shall be deemed automatically vacated to
permit the Agent and the Lenders to take immediately any action permitted under
this Agreement, the other Post-Petition Loan Documents, the Bankruptcy Code,
the U.C.C. or other applicable law with respect to the Collateral or otherwise.
5.8. Agent's Appointment as Attorney-in-Fact. (a) The Companies
hereby irrevocably constitute and appoint the Agent and any officer or agent
thereof,
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with full power of substitution, as their true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of each of the
Companies and in the name of each of the Companies or in its own name, from
time to time in the Agent's discretion, for the purpose of carrying out the
terms of this Agreement, to take any and all appropriate action and to execute
and deliver any and all documents and instruments which may be necessary and
desirable to accomplish the purposes of this Agreement and the transactions
contemplated hereby, and, without limiting the generality of the foregoing,
hereby give the Agent the power and right, on behalf of the Companies, without
notice to or assent by the Companies to do the following:
(i) to ask, demand, collect, receive and give acquittances and
receipts for any and all moneys due and to become due under any
Collateral and, in the name of any of the Companies or its own name or
otherwise, to take possession of and endorse and collect any checks,
drafts, notes, acceptances or other Instruments for the payment of
moneys due under any Collateral and to file any claim or to take any
other action or proceeding in any court of law or equity or otherwise
deemed appropriate by the Agent for the purpose of collecting any and
all such moneys due under any Collateral whenever payable and to file
any claim or to take any other action or proceeding in any court of law
or equity or otherwise deemed appropriate by the Agent for the purpose
of collecting any and all such moneys due under any Collateral whenever
payable;
(ii) to pay or discharge taxes, liens, security interests or
other encumbrances levied or placed on or threatened against the
Collateral, to effect any repairs or any insurance called for by the
terms of this Agreement and to pay all or any part of the premiums
therefor and the costs thereof; and
(iii) (A) to direct any party liable for any payment under any
of the Collateral to make payment of any and all moneys due, and to
become due thereunder, directly to the Agent or as the Agent shall
direct; (B) to receive payment of and receipt for any and all moneys,
claims and other amounts due, and to become due at any time, in respect
of or arising out of any Collateral; (C) to sign and indorse any
invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications
and notices in connection with accounts and other documents
constituting or relating to any of the Collateral; (D) to commence and
prosecute any suits, actions or proceedings at law or equity in any
court of competent jurisdiction to collect the Collateral or any part
thereof and to
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enforce any other right in respect of any Collateral; (E) to defend any
suit, action or proceeding brought against the Companies with respect
to any Collateral; (F) to settle, compromise or adjust any suit, action
or proceeding described above and, in connection therewith, to give
such discharges or releases as the Agent may deem appropriate; (G) to
license or, to the extent permitted by an applicable license,
sublicense, whether general, special or otherwise, and whether on an
exclusive or non-exclusive basis, any Trademark, throughout the world
for such term or terms, on such conditions, and in such manner, as the
Agent shall in its sole discretion determine; and (H) generally to
sell, transfer, pledge, make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the
Agent were the absolute owner thereof for all purposes, and to do, at
the Agent's option and the Companies' expense, at any time, or from
time to time, all acts and things which the Agent reasonably deems
necessary to protect, preserve or realize upon the Collateral and the
Agent's liens and security interests therein in order to effect the
intent of this Agreement, all as fully and effectively as the Companies
might do.
(b) The Agent agrees that, except as otherwise provided in this
Agreement, it will forbear from exercising the power of attorney or any rights
granted to the Agent pursuant to this Section 5.8, except upon the occurrence
and during the continuation of an Event of Default. The Companies hereby
ratify, to the extent permitted by law, all that said attorneys shall lawfully
do or cause to be done by virtue hereof. Exercise by the Agent or any Lender of
the powers granted hereunder is not a violation of the automatic stay provided
in section 362 of the Bankruptcy Code and the Companies waive applicability
thereof. The power of attorney granted pursuant to this Section 5.8 is a power
coupled with an interest and shall be irrevocable until the Obligations are
indefeasibly paid in full.
(c) The powers conferred on the Agent hereunder are solely to
protect the Agent's and the Lenders' interests in the Collateral and shall not
impose any duty upon it or them to exercise any such powers. The Agent shall be
accountable only for amounts that it actually receives as a result of the
exercise of such powers and neither it nor the Lenders nor any of their
respective officers, directors, employees or agents shall be responsible to the
Companies for any act or failure to act, except for their own gross negligence
or willful misconduct.
(d) The Companies also authorize the Agent, at any time and from
time to time upon the occurrence and during the continuation of any Event of
Default
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or as otherwise expressly permitted by this Agreement, (i) to communicate in
its own name with any party to any Contract with regard to the assignment of
the right, title and interest of the Companies in and under the Contracts
hereunder and other matters relating thereto and (ii) to execute any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral.
5.9. Super-Priority Claims. The Revolving Credit Loans, the Term
Loans, the Obligations with respect to Letters of Credit and all other
Obligations shall constitute, in accordance with section 364(c)(1) of the
Bankruptcy Code, claims against each of the Companies in its Chapter 11 Case
which are administrative expense claims having priority over any and all
administrative expenses of the kind specified in sections 503(b) or 507(b) of
the Bankruptcy Code, except for Permitted Expenses.
6. REPRESENTATIONS AND WARRANTIES
To induce the Lenders to make the Revolving Credit Loans and the
Term Loans, and to incur obligations with respect to Letters of Credit as
herein provided for, each Company (and Harvard on behalf of itself and each
Company) makes the following representations and warranties to the Lenders,
each and all of which shall be true and correct as of the date of execution and
delivery of this Agreement, and shall survive the execution and delivery of
this Agreement:
6.1. Corporate Existence; Compliance with Law. Such Company (i)
is a corporation duly organized, validly existing and in good standing under
the laws of the state of its incorporation; (ii) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership or lease of property or the conduct of its business requires such
qualification (except for jurisdictions in which such failure so to qualify or
to be in good standing would not have a Material Adverse Effect); (iii) has the
requisite corporate power and authority and the legal right to own, pledge,
mortgage or otherwise encumber and operate its properties, to lease the
property it operates under lease, and to conduct its business as now,
heretofore and proposed to be conducted; (iv) has all material licenses,
permits, consents or approvals from or by, and has made all material filings
with, and has given all material notices to, all governmental authorities
having jurisdiction, to the extent required for such ownership, operation and
conduct; (v) is in compliance with its certificate or articles of incorporation
and by-laws; and (vi) is in compliance with all applicable provisions of law
where the failure to comply would have a Material Adverse Effect.
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6.2. Executive Offices. The current location of the Companies'
executive offices and principal places of business are set forth on Schedule
6.2.
6.3. Corporate Power; Authorization; Enforceable Obligations.
The execution, delivery and performance by such Company of the Post-Petition
Loan Documents and all instruments and documents to be delivered by such
Company, to the extent it is party thereto, hereunder and the creation of all
Liens provided for herein and therein: (i) are within such Company' corporate
power; (ii) have been duly authorized by all necessary or proper corporate
action and by the Closing Date will be authorized by the Interim Order or the
Final Order, as applicable; (iii) are not in contravention of any provision of
such Company's certificates or articles of incorporation or by-laws; (iv) will
not, upon the entry of the Interim Order or the Final Order, as applicable, by
the Bankruptcy Court, violate any law or regulation, or any order or decree of
any court or governmental instrumentality; (v) will not conflict with or result
in the breach or termination of, constitute a default under or accelerate any
performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which such Company is a party or by which such
Company or any of its property is bound and the effect of which will not be
subject to the automatic stay pursuant to section 362 of the Bankruptcy Code
upon the entry of the Interim Order or the Final Order, as applicable, by the
Bankruptcy Court; (vi) will not result in the creation or imposition of any
Lien upon any of the property of such Company other than those in favor of the
Lenders, all pursuant to the Post- Petition Loan Documents; and (vii) do not
require the consent or approval of any governmental body, agency, authority or
any other Person other than the entry by the Bankruptcy Court of the Interim
Order or the Final Order, as applicable. Each of the Post-Petition Loan
Documents has been duly executed and delivered for the benefit of or on behalf
of the Companies and each constitutes a legal, valid and binding obligation of
the Companies, enforceable against them in accordance with its terms.
6.4. Ownership of Property; Liens. (a) Each Company owns good
and marketable fee simple title to all of the Real Estate described on Schedule
6.4(a)(i) hereto under the name of such Company and each Company has good,
valid and marketable leasehold interests in the Leases described in Schedule
6.4(a)(ii) hereto under the name of such Company, and good and marketable title
to, or valid leasehold interests in, all of its other properties and assets and
none of the properties and assets of such Company, including, without
limitation, the Real Estate and Leases, is subject to any Liens, except
Permitted Encumbrances; and each Company has received all deeds, assignments,
waivers, consents, non-disturbance and recognition or similar agreements, bills
of sale and other documents, and duly
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effected all recordings, filings and other actions necessary to establish,
protect and perfect such Company's right, title and interest in and to all such
property except where the failure to have received such documents or effected
such actions will not, in the aggregate, have a Material Adverse Effect.
(b) All real property owned or leased by the Companies is set
forth on Schedule 6.4(b). No Company owns any other Real Estate or is lessee or
lessor under any leases other than as set forth therein. Schedule 6.4(b) is
true and correct in all material respects. Part one of Schedule 6.4(b) hereto
sets forth all leases of real property held by the Companies as lessee and part
two of Schedule 6.4(b) sets forth all leases of real property held by the
Companies as lessor together with information regarding the commencement date,
termination date, renewal options (if any) and annual base rents for the fiscal
years 1995 and 1996. Each of such leases is valid and enforceable in accordance
with its terms and is in full force and effect except as the same may be
affected by the commencement of the Chapter 11 Cases and the transactions
contemplated thereby.
(c) The Existing Liens do not secure obligations in a principal
amount in excess of $20,000,000 in the aggregate in addition to the
Pre-Petition Obligations.
6.5. Labor Relations; Collective Bargaining Agreements. None of
the Companies is engaged in any unfair labor practice that is reasonably likely
to have a Material Adverse Effect. There is (i) no significant unfair labor
practice complaint pending against any of the Companies or, to the best
knowledge of any of the Companies, threatened against any of them, before the
National Labor Relations Board, and no significant grievance or significant
arbitration proceeding arising out of or under any Collective Bargaining
Agreement is now pending against any of the Companies or, to the best knowledge
of any of the Companies, threatened against any of them, (ii) no significant
strike, labor dispute, slowdown or stoppage is pending against any of Companies
or, to the best knowledge of any of the Companies, threatened against any of
Companies, and (iii) to the best knowledge of any of the Companies, no union
representation question existing with respect to the employees of any of
Companies, except (with respect to any matter specified in clause (i), (ii) or
(iii) above, either individually or in the aggregate) such as would have no
Material Adverse Effect.
6.6. Other Ventures. Except as set forth in Schedule 6.6, no
Company is engaged in any joint venture or partnership with any other Person.
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6.7. Investment Company Act. None of the Companies is an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended. The making of the Revolving Credit
Loans, the application of the proceeds and repayment thereof by the Companies
and the consummation of the transactions contemplated by this Agreement and the
other Post-Petition Loan Documents will not violate any provision of such Act
or any rule, regulation or order issued by the Securities and Exchange
Commission thereunder.
6.8. Margin Regulations. None of the Companies owns any "margin
security," as that term is defined in Regulations G and U of the Board, and the
proceeds of the Revolving Credit Loans will be used only for the purposes
contemplated hereunder. None of the Revolving Credit Loans will be used,
directly or indirectly, for the purpose of purchasing or carrying any margin
security, for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry any margin security or for any other
purpose which might cause any of the loans under this Agreement to be
considered a "purpose credit" within the meaning of Regulations G, T, U or X of
the Board. None of the Companies will take or permit any agent acting on its
behalf to take any action which might cause this Agreement or any document or
instrument delivered pursuant hereto to violate any regulation of the Board.
6.9. Taxes. All federal, state, local and foreign tax returns,
reports and statements required to be filed by the Companies after the Petition
Date have been filed with the appropriate governmental agencies and all Charges
and other impositions shown thereon to be due and payable have been paid prior
to the date on which any fine, penalty, interest or late charge may be added
thereto for nonpayment thereof, or any such fine, penalty, interest, late
charge or loss has been paid. Each Company has paid when due and payable all
Charges required to be paid by it. Proper and accurate amounts have been
withheld by the Companies from their respective employees for all periods in
full and complete compliance with the tax, social security and unemployment
withholding provisions of applicable federal, state, local and foreign law and
such withholdings have been timely paid to the respective governmental
agencies. Schedule 6.9 sets forth for each Company those taxable years for
which its tax returns are currently being audited by the IRS or any other
applicable Governmental Authority. No Company has executed or filed with the
IRS or any other Governmental Authority any agreement or other document
extending, or having the effect of extending, the period for assessment or
collection of any Charges. No Company has filed a consent pursuant to Code
Section 341(f) or agreed to have
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Code Section 341(f)(2) apply to any dispositions of subsection (f) assets (as
such term is defined in Code Section 341(f)(4)). None of the property owned by
the Companies is property which such company is required to treat as being
owned by any other Person pursuant to the provisions of Code Section 168(f)(8)
of the Internal Revenue Code of 1954, as amended, and in effect immediately
prior to the enactment of the Tax Reform Act of 1986 or is "tax-exempt use
property" within the meaning of Code Section 168(h). No Company has agreed or
has been requested to make any adjustment under Code Section 481(a) by reason
of a change in accounting method or otherwise. No Company is a party to any
written tax sharing agreement with a Person other than a Company or a
Subsidiary.
6.10. ERISA. (a) Schedule 6.10(a) separately identifies all
Qualified Plans, all Title IV Plans, all Multiemployer Plans, all unfunded
Pension Plans and all Welfare Benefit Plans that provide retiree benefits
(other than continuation coverage provided pursuant to Section 4980B of the
Code).
(b) Each Qualified Plan has been determined by the IRS to
qualify under Section 401 of the Code, and the trusts created thereunder have
been determined to be exempt from tax under the provisions of Section 501 of
the Code, and to the best knowledge of the Companies nothing has occurred which
would cause the loss of such qualification or tax-exempt status.
(c) Except as set forth on Schedule 6.10(c), each Plan is in
compliance in all material respects with applicable provisions of ERISA and the
Code, including, without limitation, the filing of reports required under ERISA
or the Code which are true and correct in all material respects as of the date
filed, and with respect to each Plan, other than a Qualified Plan, all required
contributions and benefits have been paid in accordance with the provisions of
each such Plan.
(d) None of the Companies or any ERISA Affiliate, with respect
to any Qualified Plan, has failed to make any contribution or pay any amount
due as required by Section 412 of the Code or Section 302 of ERISA or the terms
of any such Qualified Plan.
(e) With respect to all Welfare Benefit Plans, the present value
of future anticipated expenses for retiree benefits pursuant to the latest
actuarial projections of liabilities does not exceed $110,000,000, and copies
of such latest projections have been made available to the Lenders.
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(f) With respect to Pension Plans, other than Qualified Plans,
the present value of the liabilities for current participants thereunder using
PBGC interest assumptions does not exceed $2,500,000. The Unfunded Pension
Liability, in the aggregate, for all Title IV Plans does not exceed the amount
reflected in the Companies' financial statements delivered to the Agent and the
Lenders.
(g) Except as set forth on Schedule 6.10(g), there has been no,
nor is there reasonably expected to occur, any ERISA Event or event described
in Section 4068 of ERISA with respect to any Title IV Plan.
(h) Except as set forth on Schedule 6.10(h), there are no
pending or, to the knowledge of the Companies, threatened claims, actions or
lawsuits (other than claims for benefits in the normal course), asserted or
instituted against (i) any Plan or any Qualified Plan or the assets of any such
Plan, (ii) any fiduciary with respect to any Plan or Qualified Plan or (iii)
the Companies with respect to any Plan or Qualified Plan.
(i) None of the Companies or any ERISA Affiliate has incurred or
has any reasonable likelihood of incurring any Withdrawal Liability under
Section 4201 of ERISA as a result of a complete or partial withdrawal from a
Multiemployer Plan (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in any such liability).
(j) Within the last five years none of the Companies or any
ERISA Affiliate has engaged in a transaction which resulted in a Title IV Plan
with Unfunded Pension Liabilities being transferred outside of the "controlled
group" (within the meaning of Section 4001(a)(14) of ERISA) of any such entity.
(k) Except as set forth on Schedule 6.10(k), no Welfare Benefit
Plan provides for continuing benefits or coverage for any participant or any
beneficiary of a participant after such participant's termination of employment
(except as may be required by Section 4980B of the Code and at the sole expense
of the participant or the beneficiary of the participant) which would result in
a liability in an amount which would have a Material Adverse Effect. Each
Company and each ERISA Affiliate has complied with the notice and continuation
coverage requirements of Section 4980B of the Code and the regulations
thereunder, except for non-compliances which in the aggregate would have no
Material Adverse Effect.
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(l) None of the Companies has engaged in a prohibited
transaction, as defined in Section 4975 of the Code or Section 406 of ERISA, in
connection with any Plan, which would subject or has any reasonable likelihood
of subjecting the Companies (after giving effect to any exemption) to a
material tax on prohibited transactions imposed by Section 4975 of the Code or
any other material liability.
(m) No liability under any Plan or Qualified Plan (whether
terminated or on-going) has been funded or satisfied through the purchase of a
contract from an insurance company that is not rated AA or better by Standard &
Poor's Corporation or any equivalent or higher rating by another nationally
recognized rating agency.
(n) None of the Companies and no ERISA Affiliate has any
liability under any terminated "employee benefit plan", as defined in Section
3(3) of ERISA, of any related or unrelated entity.
(o) The present value of the liability, if any, with respect to
all unfunded Pension Plans of the Companies is reflected on the most recent
audited financial statements delivered to the Lenders pursuant to this
Agreement.
6.11. Brokers. No broker or finder acting on behalf of the
Companies brought about the obtaining, making or closing of the loans
contemplated by this Agreement and the Companies have no obligation to any
Person in respect of any finder's or brokerage fees in connection with the
loans or other transactions contemplated by this Agreement.
6.12. Intellectual Property. The Companies own or license or
otherwise have the right to use all material licenses, permits, Patents, Patent
applications, Trademarks, Trademark applications, Service Marks, trade names,
copyrights, copyright applications, franchises, authorizations and other
intellectual property rights that are necessary for the operations of their
respective businesses, without infringement upon or conflict with the rights of
any other Person with respect thereto, including, without limitation, all trade
names associated with products of any of the Companies. To the best knowledge
of the Companies, no slogan or other advertising device, product, process,
method, substance, part or component, or other material now employed, or now
contemplated to be employed, by the Companies or any of their respective
subsidiaries infringes upon or conflicts with any rights owned by any other
Person, and no claim or litigation regarding any of the foregoing is pending or
threatened.
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6.13. Full Disclosure. No representation or warranty made by the
Companies in this Agreement or any other Post-Petition Loan Document is
inaccurate or misleading in any material respect and none contains any material
misstatement of fact or omits to state a material fact or any fact necessary to
make the statements contained herein or therein not misleading. To the extent
the Companies furnish any projections of the financial position and results of
operations of the Companies for, or as at the end of, certain future periods,
such projections were believed at the time furnished to be reasonable, have
been or will have been prepared on a reasonable basis and in good faith by the
Companies, and have been or will be based on assumptions believed by the
Companies to be reasonable at the time made and upon the best information then
reasonably available to the Companies. There is no fact materially adversely
affecting the condition or operations, financial or otherwise, of the business
or prospects of any of the Companies which has not been set forth in a footnote
included in the financial statements previously delivered to the Agent and the
Lenders, in a Schedule hereto or in any other written information delivered to
the Agent prior to the Closing Date.
6.14. Environmental Matters. Except as disclosed in Schedule
6.14, none of the operations of the Companies are the subject of any federal,
state or local investigation to determine whether any Remedial Action is needed
to address the presence or disposal of a Hazardous Material or a Release or
threatened Release, (ii) to the best of the Companies' knowledge, information
and belief, the Companies do not have any contingent liability in connection
with any Release, which could reasonably be expected to result in material
Environmental Costs and Liabilities, (iii) the operations of the Companies are
in compliance in all material respects with all Environmental Laws; (iv) there
has been no Release at any of the properties owned or operated by the Companies
or, to the best of the Companies' knowledge, information and belief, any
predecessor in interest or title, or to the best of the Companies' knowledge,
information and belief and except as disclosed in writing to the Agent, at any
disposal or treatment facility which received Hazardous Materials generated by
the Companies or, to the best of the Companies' knowledge, information and
belief, any predecessor in interest or title, which is reasonably likely to
result in the Companies' incurring material Environmental Liabilities and
Costs; (v) no Environmental Actions are pending or, to the best of the
Companies' knowledge, information and belief, threatened against the Companies
or, to the best of the Companies' knowledge, information and belief, any
predecessor in interest or title which, if adversely determined, could
reasonably be expected to result in the Companies incurring material
Environmental Liabilities and Costs; (vi) the Companies have obtained all
permits, approvals, authorizations and licenses required by
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Environmental Laws necessary for their operations, and all such permits,
approvals, authorizations and licenses are in effect and the Companies are in
compliance with all terms and conditions of such permits, approvals,
authorizations and licenses except where failure to obtain or comply could not
result in material Environmental Liabilities and Costs; and (vii) to the best
of the Companies' knowledge, information and belief, and except as disclosed in
writing to the Agent, no Environmental Actions have been asserted against any
facilities that may have received Hazardous Materials generated by the
Companies or any predecessor in interest or title which, if adversely
determined, are reasonably likely to result in material Environmental
Liabilities and Costs to the Companies.
6.15. Capital Stock. Set forth on Schedule 6.15 is a complete
and accurate list showing, as of the date hereof, all Subsidiaries of the
Companies and, as to each such Subsidiary, the jurisdiction of its
incorporation, the number of shares of each class of stock authorized, the
number outstanding on the date hereof and the percentage of the outstanding
shares of each such class owned (directly or indirectly) by the Companies. No
stock of any Subsidiary of the Companies is subject to any outstanding option,
warrant, right of conversion or purchase or any similar right. All of the
outstanding capital stock of each such Subsidiary has been validly issued, is
fully paid and non-assessable and is owned by the Companies, free and clear of
all Liens.
6.16. Holding Company and Investment Company Acts. None of the
Companies is a (i) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company", as such terms are defined in
the Public Utility Holding Company Act of 1935, as amended, or (ii) an
"investment company" or an "affiliated person" or "promoter" of, or "principal
underwriter" of or for, an "investment company", as such terms are defined in
the Investment Company Act of 1940, as amended.
6.17. Permits, Etc. The Companies have all material permits,
material licenses, authorizations and material approvals required for them
lawfully to own and operate their business.
6.18. Schedules. All of the information which is required to be
scheduled to this Agreement is set forth on the Schedules attached hereto, is
correct and accurate and does not omit to state any information material
thereto.
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6.19. Insurance. The Companies keep their properties adequately
insured and maintain (i) insurance to such extent and against such risks,
including fire, as is customary with companies in the same or similar
businesses, (ii) workmen's compensation insurance in the amount required by
applicable law, (iii) public liability insurance in the amount customary with
companies in the same or similar business against claims for personal injury or
death on properties owned, occupied or controlled by it, and (iv) such other
insurance as may be required by law or by the Post-Petition Loan Documents.
Schedule 6.19 hereto sets forth a list of all insurance maintained by the
Companies on the Closing Date.
6.20. Financial Accounting Practices, Etc.
(i) The Companies make and keep books, records and accounts
which, in reasonable detail, accurately and fairly reflect their
respective transactions and dispositions of their respective assets and
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance
with management's general or specific authorization, and (ii)
transactions are recorded as necessary (A) to permit preparation of
financial statements in conformity with GAAP except as previously
disclosed to the Agent and (B) to maintain accountability for assets.
(ii) The Companies maintain a system of internal procedures and
controls sufficient to provide reasonable assurance that the
information required to be set forth in each request made by a Company
pursuant to Section 2 hereof (including, without limitation,
information relating to the identification of assets which are
Inventory and the valuation thereof) is accurate.
6.21. Location of Bank Accounts. Schedule 6.21 sets forth a
complete and accurate list as of the Closing Date of all deposit and other
accounts, maintained by the Companies together with a description thereof (i.e.
the bank at which such deposit or other account is maintained and the account
number and the purpose thereof).
7. REPORTING REQUIREMENTS
7.1. Reports and Notices. The Companies covenant and agree that
from and after the Closing Date and until the payment in full of all the
Obligations:
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(a) unless the Agent shall have otherwise consented in writing,
the Companies will furnish to the Agent and each Lender, within ninety (90)
days after the end of each Fiscal Year of the Companies, Consolidated Financial
Statements as at the close of such year, audited by independent public
accountants selected by the Companies and satisfactory to the Agent and an
unaudited Consolidating Balance Sheet and consolidating statements of profit
and loss, cash flow and surplus of the Companies and all Subsidiaries of each
as at the close of such year; within forty five (45) days after the end of each
Fiscal Quarter Consolidated Financial Statements and Consolidating Balance
Sheet as at the end of such period and consolidating statements of profit and
loss, cash flow and surplus of the Companies and all Subsidiaries of each; and
within thirty-five (35) days after the end of each of the first eleven (11)
months of each Fiscal Year Consolidated Financial Statements and Consolidating
Balance Sheet and consolidating statements of profit and loss, cash flow and
surplus of the Companies and all Subsidiaries of each as at the end of such
month; and from time to time, such further information regarding the business
affairs and financial condition of the Companies and any subsidiaries thereof
as the Agent may reasonably request, including, without limitation, (i) the
accountant's management practice letter and (ii) annual cash flow projections
in form satisfactory to the Agent. Each financial statement which the Companies
are required to submit hereunder must be accompanied by an officer's
certificate, signed by the President, Chief Financial Officer, Vice President,
Controller or Treasurer of Harvard, pursuant to which any one such officer must
certify that: (i) the financial statement(s) fairly and accurately represent(s)
the Companies' financial condition at the end of the particular accounting
period, as well as the Companies' operating results during such accounting
period, subject to year-end audit adjustments; (ii) during the particular
accounting period: (x) there has been no Default or Event of Default under this
Agreement; provided, however, that if any such officer has knowledge that any
Default or Event of Default has occurred during such period, the existence of
and a detailed description of same shall be set forth in such officer's
certificate; and (y) the Companies have not received any notice of cancellation
with respect to property insurance policies; and (iii) the exhibits attached to
such financial statement(s) include detailed calculations showing compliance
with all financial covenants contained in this Agreement;
(b) to provide the Agent from time to time, with reports (each,
a "Cash Budget") showing the current status of Accounts of each of the
Companies as reflected in the books and records of the Companies and an
estimate of disbursements for the ensuing period. Such reports shall be
furnished to the Agent (i) weekly, where the Aggregate Net Availability is
$5,000,000 or more; and (ii) daily, where Aggregate Net Availability is less
than $5,000,000. Each such report shall be
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accompanied by an officer's certificate, signed by an Executive Officer,
certifying such report as being complete and correct in all respects;
(c) to provide the Agent within fifteen (15) days of the end of
each month with (i) a report showing Eligible Inventory and ineligible
Inventory as of the close of business on the last day of the immediately
preceding month; and (ii) a report showing aging Trade Accounts Receivable as
of the last day of the immediately preceding month. Each such report shall be
accompanied by an officer's certificate, signed by an Executive Officer,
certifying such report as being complete and correct in all respects;
(d) to furnish the Agent (i) promptly and in any event within
ten (10) days after any of the Companies, any of their respective Subsidiaries
or any ERISA Affiliate knows or has reason to know that any ERISA Event has
occurred, and (ii) promptly and in any event within 10 days after any Company,
any of its Subsidiaries or any ERISA Affiliate knows or has reason to know that
a request for a minimum funding waiver under Section 412 of the Code has been
filed with respect to any Qualified Plan, a written statement of the chief
financial officer or other appropriate officer of Harvard describing such ERISA
Event or waiver request and the action, if any, which the Company, its
Subsidiaries and ERISA Affiliates propose to take with respect thereto and a
copy of any notice filed with the PBGC or the IRS pertaining thereto;
(e) to furnish the Agent promptly and in any event within three
(3) days after receipt thereof, a copy of any correspondence any Company, any
of its Subsidiaries or any ERISA Affiliate receives from the plan sponsor (as
defined by Section 4001 (a)(10) of ERISA) of any Multiemployer Plan concerning
potential withdrawal liability of such Company, its Subsidiaries and ERISA
Affiliates in excess of $1,000,000 in the aggregate, or notice of any
reorganization with respect to any Multiemployer Plan, together with a written
statement of the chief financial officer or other appropriate officer of
Harvard of the action which such Company, its Subsidiaries and ERISA Affiliates
propose to take with respect thereto;
(f) to furnish the Agent weekly with a schedule reflecting
payments for Capital Expenditures during the preceding week, separately
indicating the amounts payable on Capital Leases; and
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(g) to provide any other financial reports, financial statements
or any other related information provided to any other creditor or interested
party or which may be reasonably requested by the Agent.
8. AFFIRMATIVE COVENANTS
Each Company covenants and agrees that, unless the Required
Lenders shall otherwise consent in writing, from and after the Closing Date and
until the payment in full of all the Obligations:
8.1. Books and Records. The Companies agree to maintain books
and records pertaining to the Collateral and their respective business in such
detail, form and scope as the Agent shall reasonably require. The Companies
agree that the Agent or its agents may enter upon any of the Companies'
premises at any time during normal business hours, and from time to time, for
the purpose of inspecting the Collateral, and any and all records pertaining
thereto. The Companies agree to afford the Agent prior written notice of any
change in the location of any Collateral, other than shipments of Inventory in
the ordinary course of business to locations of which the Agent has previously
been advised in writing. Each of the Companies agrees to advise the Agent
promptly, in sufficient detail, of any material adverse change relating to the
type, quantity or quality of the Collateral or on the security interests
granted to the Agent therein.
8.2. Collateral. (a) Each of the Companies agrees to: execute
and deliver to the Agent, from time to time, solely for the Agent's convenience
in maintaining a record of the Collateral, such written statements and
schedules as the Agent may reasonably require, designating, identifying or
describing the Collateral pledged to the Agent hereunder. The Companies'
failure, however, to promptly give the Agent such statements or schedules shall
not affect, diminish, modify or otherwise limit the Agent's security interests
in the Collateral.
(b) Each of the Companies agrees to comply with the requirements
of all federal law in order to grant to the Agent valid and perfected first
security interests in the Collateral. Each of the Companies agrees to do
whatever the Agent may reasonably request in order to effect the purposes of
this Agreement.
8.3. Insurance. (a) Each of the Companies agrees to maintain
insurance on the Real Estate, Equipment and Inventory under such policies of
insurance, with such insurance companies, in such reasonable amounts and
covering
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such insurable risks as are at all times reasonably satisfactory to the Agent.
All policies covering the Equipment and Inventory are, subject to the rights of
any holders of Permitted Encumbrances holding claims senior to the Agent, to be
made payable to the Agent for the benefit of the Lenders, in case of loss,
under a standard non-contributory "lender" or "secured party" clause and are to
contain such other provisions as the Agent may require to fully protect the
Agent's interest in the Inventory and Equipment and to any payments to be made
under such policies. All original policies or true copies thereof are to be
delivered to the Agent, premium prepaid, with the loss payable endorsement in
the Agent's favor, and shall provide for not less than thirty (30) days' prior
written notice to the Agent of the exercise of any right of cancellation. At
the Companies' request, or if the Companies fail to maintain such insurance,
the Agent may arrange for such insurance, but at the Companies' expense and
without any responsibility on the Agent's part for: obtaining the insurance,
the solvency of the insurance companies, the adequacy of the coverage, or the
collection of claims. During the continuance of an Event of Default the Agent
shall, subject to the rights of any holders of Permitted Encumbrances holding
claims senior to the Agent, have the sole right, in the name of the Agent or
the Companies or any of them, to file claims under any insurance policies, to
receive, receipt and give acquittance for any payments that may be payable
thereunder, and to execute any and all endorsements, receipts, releases,
assignments, reassignments or other documents that may be necessary to effect
the collection, compromise or settlement of any claims under any such insurance
policies.
(b)(i) In the event of any loss or damage by fire or other
casualty, the Companies shall prepay the Pre-Petition Revolving Credit Loans in
an amount equal to all insurance proceeds relating to Inventory received and,
if the Pre-Petition Revolving Credit Loans have been fully paid, the Revolving
Credit Loans.
(ii) In the event any part of a Company's fixed assets is
damaged by fire or other casualty, the Companies shall apply all insurance
proceeds received on account of such damage or other casualty as Asset Sale
Proceeds unless the Agent otherwise determines; provided, however, that if such
insurance proceeds are in an amount less than $1,000,000, then the Companies
may elect not to treat such proceeds as Asset Sale Proceeds but use them to
restore or repair the damaged fixed assets.
8.4. Charges. Each of the Companies agrees to pay, when due, all
Charges lawfully levied or assessed upon the Companies or the Collateral for
any period commencing on or after the Petition Date and if such Charges remain
unpaid after the date fixed for the payment thereof, unless such Charges are
being diligently
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contested in good-faith by the Companies by appropriate proceedings, or if any
Lien shall be claimed thereunder (a) for Charges due the United States of
America or (b) which in the Agent's opinion might create a valid obligation
having priority over the rights granted to the Agent herein, the Agent may, on
the Companies' behalf, pay such Charges, and the amount thereof shall be an
Obligation secured hereby and due to the Agent on demand.
8.5. Compliance with Law. Each of the Companies: (a) agrees to
comply with all acts, rules, regulations and orders of any legislative,
administrative or judicial body or official, with which the failure to comply
would have a material and adverse impact on the Collateral, or any material
part thereof, or on the operation of the Companies' business; provided,
however, that the Companies may contest any acts, rules, regulations, orders
and directions of such bodies or officials in any reasonable manner which will
not, in the Agent's reasonable opinion, materially and adversely affect the
Agent's rights or priority in the Collateral; and (b) agrees to comply with all
Environmental Laws, applicable to the ownership and/or use of its real property
and operation of its business, which the failure to comply with would have a
material and adverse impact on the Collateral, or any material part thereof, or
on the operation of the business of the Companies. Notwithstanding the
foregoing, no Company shall be deemed to have breached any provision of this
Section 8.5 if (i) the failure to comply with the requirements of this Section
8.5 resulted from good-faith error or innocent omission, (ii) such Company
promptly commences and diligently pursues a cure of such breach and (iii) such
failure is cured within fifteen (15) Business Days following such Company's
receipt of notice of such failure.
8.6. Indemnification. Each of the Companies hereby jointly and
severally indemnifies the Agent and the Lenders and agrees to defend and hold
the Agent and the Lenders harmless from and against any and all loss, damage,
claim, liability, injury or expense which the Agent and/or the Lenders may
sustain or incur (other than as a result of actions of the Agent and/or the
Lenders) in connection with: any claim or expense asserted against the Agent
and/or the Lenders as a result of any environmental pollution, hazardous
material or environmental clean-up of the Companies' real property; or any
claim or expense which results from the Companies' operations (including, but
not limited to, the Companies' off-site disposal practices); or any
Environmental Law and the Companies further agree that this indemnification
shall survive termination of this Agreement as well as the payment of all
Obligations or amounts payable hereunder.
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8.7. Cash Management. (a) Asset Sale Proceeds. The Companies
shall cause all cash, checks, notes, drafts or other similar items of payment
relating to or constituting Asset Sale Proceeds to be deposited and, when
collected, to be transferred, via wire transfer in immediately available funds,
to a bank account in the name of the Agent and maintained at the offices of an
Affiliate of the Agent (the "Concentration Account"). The Concentration Account
shall be a cash collateral account, with all cash, checks and other similar
items of payment in such account securing payment of the Obligations and the
Companies hereby grant to the Agent for the benefit of the Lenders a Lien
therein.
(b) Net Proceeds of Other Collateral. The Companies shall
deposit on the date of receipt thereof or cause to be deposited directly all
cash, checks, notes, drafts or other similar items of payment relating to or
constituting proceeds derived from the sale of any Collateral, payments made by
the Companies' Account Debtors in respect of Accounts, and any other similar
payments in one of the local bank accounts listed on Schedule 8.7(b) of this
Agreement (the "Local Accounts"); provided, however, that all funds in the
Local Accounts shall at all times be pledged to the Agent for the benefit of
the Lenders pursuant to appropriate blocked account arrangements with the banks
in which the Local Accounts are maintained. All amounts deposited in the Local
Accounts shall, when collected, be deposited via wire transfer, in immediately
available funds, into the Concentration Account. The Local Accounts shall be
cash collateral accounts, with all cash, checks and other similar items of
payment in such accounts being Collateral and securing payment of the
Obligations.
(c) Concentration Account. All amounts deposited in the
Concentration Account shall, within one Business Day after such amounts are so
deposited and credited, in immediately available funds, to such account, be
applied by the Lenders against the outstanding balance of the Obligations or
the Pre-Petition Obligations, as the case may be, in accordance with Section
2.4.
(d) Operating Account. The Companies may maintain in their
names, jointly and severally, an account at the offices of the Agent or an
Affiliate of the Agent, Account No. ________ (the "Operating Account") into
which the Agent shall, from time to time, deposit proceeds of Revolving Credit
Loans. The Operating Account shall be a cash collateral account, with all cash,
checks and other similar items of payment in such account being Collateral and
securing payment of the Obligations and the Companies hereby grant the Agent on
behalf of the Lenders a Lien therein.
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8.8. Fixed Charge Coverage Ratio. From and after October 1,
1997, the Companies shall maintain a ratio of (a) EBITDA to (b) Fixed Charges
of at least 1:1 for the period from the beginning of the Fiscal Year to the end
of the most recently completed calendar month in such Fiscal Year for which
financial statements are available.
8.9. EBITDA. The Companies shall maintain EBITDA of not less
than:
(a) $2,000,000 for the month ended May 31, 1997;
(b) $5,200,000 for the two months ended June 30, 1997;
(c) $1,600,000 for the three months ended July 31, 1997;
(d) $5,300,000 for the four months ended August 31, 1997; and
(e) $11,000,000 for the five (5) months ending September 30,
1997.
8.10. Capital Expenditures. The Companies shall not make
payments in respect of Capital Expenditures excluding payments on Capital Lease
Obligations in existence on the Petition Date in excess of $10,000,000 in the
aggregate for all Companies during the period from the Petition Date through
September 30, 1997, without the prior written consent of the Agent (acting on
the instructions of the Required Lenders).
8.11. Insurance. The Companies shall maintain a primary
product liability insurance policy in the amount of $1,000,000 and an umbrella
insurance policy in the amount of $50,000,000 or in such other amounts as the
Agent may reasonably require.
8.12. Environmental Expenditures. The Companies agree to advise
the Agent in writing of: (a) all expenditures (actual or anticipated) in excess
of $500,000 per site for (i) environmental clean-up, (ii) environmental
compliance or (iii) environmental testing; (b) the impact of said expenses on
the Companies' working capital; and (c) any notices a Company receives from any
local, state or federal authority advising such Company of any environmental
liability (real or potential) stemming from the Companies' operations, premises
or waste disposal practices or the waste disposal sites used by such Company
and will provide the Agent with copies of all such notices if requested by the
Agent. Harvard agrees to provide the Agent with a copy of its Quarterly EPA
Reserve Report as soon as it is prepared.
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8.13. Affiliate Transactions. Except for transactions permitted
hereby, transactions between or among the Companies and transactions disclosed
in the related party transactions section of Harvard's annual report on Form
10-K for the Fiscal Year ended September 30, 1996, without the prior written
consent of the Agent, the Companies agree that they will not enter into any
transaction, including, without limitation, any purchase, sale, lease, loan or
exchange of property with any affiliate of any of the Companies, except that
any Company may engage in any of the foregoing transactions in the ordinary
course of business at prices and on terms no less favorable to such Company
than could be obtained on an arms-length basis from unrelated third parties or
other transactions entered into with the consent of the Agent (such consent not
be unreasonably withheld).
9. NEGATIVE COVENANTS
The Companies agree that, without the prior written consent of the
Required Lenders, until payment in full of all the Obligations:
9.1. Liens. None of the Companies will mortgage, assign, pledge,
transfer or otherwise permit any Lien to exist on any of its assets or goods,
whether real, personal or mixed, whether now owned or hereafter acquired,
except for Permitted Encumbrances.
9.2. Indebtedness. None of the Companies will incur or create
any Indebtedness other than the Permitted Indebtedness.
9.3. Intentionally Omitted.
9.4. Sale of Assets. None of the Companies will sell, convey,
transfer, lease or otherwise dispose of any of their assets or any interest
therein to any Person, except (i) any Company may sell, convey, transfer, lease
or otherwise dispose of its assets to any Company; (ii) any Company may sell,
convey, transfer, lease or otherwise dispose of Inventory and obsolete
Equipment in the ordinary course of business; and (iii) Harvard may sell any
assets that are or were at any time owned by ESNA.
9.5. Merger, Consolidation. None of the Companies will merge or
consolidate with any Person other than a Company or otherwise alter or modify
its corporate name, principal place of business, structure, status or
existence, or enter
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into or engage in any operation or activity materially different from that
presently being conducted by it.
9.6. Guarantees. None of the Companies will assume, guarantee,
endorse or otherwise become liable upon the obligations of any Person other
than another Company, except by the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business.
9.7. Dividends, Distributions. None of the Companies will
declare or pay any dividend of any kind on, or make any other distribution of
assets, properties, cash, rights, obligations or securities on account or in
respect of, or purchase, acquire, redeem or retire, or make any other payment
in respect of, any of the capital stock or equity interest, of any class
whatsoever, whether now or hereafter outstanding.
9.8. Investments. None of the Companies will purchase, hold or
acquire any capital stock, evidences of indebtedness or other securities of,
make or permit to exist any loans or advances to, or make or permit to exist
any investment or any other interest in, any other Person (any of the foregoing
being an "Investment"), except:
(i) Investments by Harvard or the Companies existing on
the date hereof and set forth in Schedule 9.8;
(ii) (x) loans or advances made by any Company to any
other Company and (y) loans or advances made by any Subsidiary (other than a
Company) to any Company and, in the case of clause (y), evidenced by a written
instrument that provides that any payment of principal of, interest on and
other amounts in respect of such loans or advances shall be subordinated to the
prior payment in full of the Obligations on terms satisfactory in all respects
to the Agent;
(iii) loans or advances by any Company or any of their
Subsidiaries (x) to any of their employees made in the ordinary course of
business, so long as such loans and advances do not exceed $250,000 in the
aggregate at any time outstanding and (y) to any of their employees who has
moved more than 50 miles to take or continue employment with such Company or
such Subsidiary, as the case may be, and who has not sold his or her residence
prior to such move, where the proceeds of such loan or advance are used by such
employee for the purpose of purchasing a residence and such loan or advance
becomes due and payable upon the sale by such
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employee of his or her residence prior to such move, so long as such loans and
advances do not exceed $250,000 in the aggregate at any time outstanding;
(iv) investments arising from transactions by any Company
or any of its Subsidiaries with customers or suppliers in the ordinary course
of business, including endorsements of negotiable instruments, debt obligations
and other investments received in connection with the bankruptcy or
reorganization of customers and suppliers and in settlement of delinquent
obligations of, and other disputes with, customers or suppliers, arising in the
ordinary course of business and in the exercise of the reasonable business
judgment of such Company or such Subsidiary;
(v) loans or advances made by any Company or any
Subsidiary to the Canadian Subsidiary in an aggregate principal amount not to
exceed the Canadian dollar equivalent of $1,500,000 at any time outstanding;
(vi) all Guarantees permitted by Section 9.6;
(vii) any Investments consisting of non-cash
consideration received in connection with a sale of assets permitted by Section
9.4;
(viii) Investments in any Subsidiary, joint venture or
partnership which conducts operations related to Harvard's automotive lines of
business; provided, however, that the aggregate amount of such Investments
shall not exceed $2,500,000 from the Closing Date; and
(ix) commodity xxxxxx and Interest Rate Protection
Agreements, in each case entered into in the ordinary course and approved by
the Agent; and
(x) other Investments not exceeding $500,000 in the
aggregate at any time outstanding.
10. TERMINATION
10.1. Termination. Subject to the provisions of Section 2, the
financing arrangement contemplated hereby shall be in effect from the Closing
Date until the Termination Date. Notwithstanding anything contained in this
agreement to the contrary, the Lenders' obligations hereunder shall terminate
if the Closing Date shall not have occurred by May 15, 1997, or if the Final
Order is not entered by the Bankruptcy Court by June 15, 1997. The Companies
may terminate the Line of
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Credit at any time except that, if terminated prior to the first anniversary of
the Closing Date, the Companies shall pay to the Agent for the benefit of the
Lenders the Early Termination Fee to the extent due in accordance with its
terms. All Obligations shall be due and payable on the Termination Date.
10.2. Survival of Obligations upon Termination of Financing
Arrangement. Except as otherwise expressly provided for in the Post-Petition
Loan Documents, no termination or cancellation (regardless of cause or
procedure) of any financing arrangement under this Agreement shall in any way
affect or impair the powers, obligations, duties, rights and liabilities of the
Companies or the Lenders, as the case may be, relating to any transaction or
event occurring prior to such termination and all Liens, claims and
super-priority interests granted or confirmed herein shall continue in full
force and effect until all Obligations and Pre-Petition Obligations are paid in
full. Except as otherwise expressly provided herein or in any other
Post-Petition Loan Document, all undertakings, agreements, covenants,
warranties and representations contained in the Post-Petition Loan Documents
shall survive such termination or cancellation and shall continue in full force
and effect until such time as all of the Obligations have been paid in full in
accordance with the terms of the agreements creating such Obligations, at which
time the same shall terminate.
11. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
11.1. Events of Default. The occurrence of any one or more of
the following events (regardless of the reason therefor) shall constitute an
"Event of Default" hereunder:
(a) The Companies shall (i) fail to make any payment of
principal or interest required herein to be made with respect to the
Obligations or the Pre-Petition Obligations, when due and payable or declared
due and payable or (ii) fail to make any payment of any other amount owing in
respect of the Revolving Credit Loans, the Term Loans or any of the other
Obligations owing under this Agreement or any of the other Post-Petition Loan
Documents within five (5) days after such amount is due and payable; or
(b) The Companies or any one of them shall fail or neglect to
perform, keep or observe any of the provisions of Sections 8.7, 8.8, 8.9, 8.10,
8.11, 9, 12.11, 12.12, 12.14 and 12.15; or
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(c) The Companies or any one of them shall fail or neglect to
perform, keep or observe any provision of this Agreement or of any of the other
Post-Petition Loan Documents that is not specifically addressed in this Section
11.1, and the same shall remain unremedied for a period ending on the first to
occur of ten (10) days after the Companies shall receive written notice of any
such failure from the Agent or any Lender or thirty (30) days after the
Companies shall become aware thereof; or
(d) Any representation or warranty herein or in any
Post-Petition Loan Document or in any written statement pursuant thereto or
hereto, report, financial statement or certificate made or delivered to the
Agent or the Lenders by any Company or on behalf of any Company shall be untrue
or incorrect in any material respect, as of the date when made or deemed made;
or
(e) Any material provision of any Post-Petition Loan Document
shall, for any reason, cease to be valid and binding on any Company, or any
Company shall so state in writing; or
(f) Any Post-Petition Loan Document, the Interim Order or the
Final Order shall, for any reason, cease to create a valid Lien in any of the
Collateral purported to be covered thereby or such Lien shall cease to be a
perfected Lien having the priority provided for herein pursuant to section
364(c) of the Bankruptcy Code against each Company or any Company shall so
allege in any pleading filed in any court; or
(g) There shall occur a Material Adverse Change; or
(h)(i) With respect to any Plan, a prohibited transaction within
the meaning of Section 4975 of the Code or Section 406 of ERISA occurs which in
the reasonable determination of the Agent could result in direct or indirect
liability to any Company, (ii) with respect to any Title IV Plan, the filing of
a notice to voluntarily terminate any such plan in a distress termination,
(iii) with respect to any Multiemployer Plan, any Company or any ERISA
Affiliate shall incur any Withdrawal Liability, (iv) with respect to any
Qualified Plan, any Company or any ERISA Affiliate shall incur an accumulated
funding deficiency or request a funding waiver from the IRS, or (v) with
respect to any Title IV Plan or Multiemployer Plan which has an ERISA Event not
described in clauses (ii)-(iv) hereof, in the reasonable determination of the
Agent there is a reasonable likelihood for termination of any such plan by the
PBGC; provided, however, that the events listed in clauses (i)-(v) hereof shall
constitute Events of Default only if the liability, deficiency or waiver
request of
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the Companies or any ERISA Affiliate, whether or not assessed, exceeds $50,000
in any case set forth in (i)-(v) above, or exceeds $100,000 in the aggregate
for all such cases; or
(i) The Bankruptcy Court shall enter an order appointing a
trustee under section 1104(a) of the Bankruptcy Code in any of the Chapter 11
Cases; or
(j)(i) The Interim Order shall cease to be in full force and
effect and the Final Order shall not have been entered prior to such cessation,
or (ii) the Final Order shall not have been entered by the Bankruptcy Court on
or before June 15, 1997 or (iii) from and after the date of entry thereof, the
Final Order shall cease to be in full force and effect, or (iv) any Company
shall fail to comply with the terms of the Interim Order or the Final Order in
any material respect, or (v) the Interim or the Final Order shall be amended,
supplemented, stayed, reversed, vacated or otherwise modified (or any of the
Companies shall apply for authority to do so) without the consent of the
Required Lenders; or
(k) The Bankruptcy Court shall enter an order appointing a
responsible officer or an examiner with enlarged powers relating to the
operation of the business (beyond those set forth in section 1106(a)(3) and (4)
of the Bankruptcy Code) under section 1106(b) of the Bankruptcy Code, in any of
the Chapter 11 Cases; or
(l) Any of the Chapter 11 Cases shall be dismissed or converted
to a case under chapter 7 of the Bankruptcy Code; or an application shall be
filed by any of the Companies for the approval of, or there shall arise, (i)
any other Claim having priority senior to or pari passu with the claims of the
Lenders under the Post-Petition Loan Documents or any other claim having
priority over any or all administrative expenses of the kind specified in
sections 503(b) or 507(b) of the Bankruptcy Code (other than Permitted
Expenses); or (ii) any Lien on the Collateral having a priority senior to or
pari passu with the liens and security interests granted or confirmed herein,
except as expressly provided herein; or
(m) Any Company shall file a motion seeking or the Bankruptcy
Court shall enter an order (other than an order of the Bankruptcy Court
approving a Permitted Pre-Petition Claim Payment) (i) granting relief from the
automatic stay applicable under section 362 of the Bankruptcy Code to any
holder of any security interest in any assets having a book value individually
or in the aggregate in excess of $25,000 of any Company (other than with
respect to Permitted Purchase Money Liens incurred after the Petition Date) or
(ii) approving any settlement or other stipulation
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with any creditor of any Company or otherwise providing for payments as
adequate protection or otherwise to such creditor individually or in the
aggregate in excess of $25,000 for any and all such creditors; or
(n) Any Company shall support (whether by way of any motion or
other pleading filed with the Bankruptcy Court or any other writing to another
party-in-interest executed by or on behalf of a Company or by oral argument)
any other Person's opposition to any motion made in the Bankruptcy Court by the
Agent or the Lenders seeking confirmation of the principal amount of the
Pre-Petition Obligations or the validity and enforceability of the liens or
security interests granted or confirmed herein (including, without limitation,
the Liens securing the Pre-Petition Obligations); or
(o) Any Company shall seek to, or shall support (whether by way
of any motion or other pleading filed with the Bankruptcy Court or any other
writing to another party-in-interest executed by or on behalf of a Company or
by oral argument) any other Person's motion to, disallow in whole or in part
any of the Pre-Petition Obligations or the Obligations or to challenge the
validity and enforceability of the liens or security interests granted or
confirmed herein (including, without limitation, the Liens securing the
Pre-Petition Obligations or the Obligations); or
(p) Any Company shall make any payment (as adequate protection
or otherwise) on account of any Claim arising or deemed to have arisen prior to
the Petition Date other than a payment or payments which would not constitute a
default under Section 11.1(m) (ii) or a Permitted Pre-Petition Claim Payment;
or
(q) Any judgment or order for the payment of money in excess of
$500,000 shall be rendered against any of the Companies after the Petition
Date, and there shall be any period of ten (10) consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(r) The Companies shall have failed to deliver to the Agent a
Cash Budget, the report required by Section 7.1(c) or the report required by
Section 7.1(g), in each case when due and such default shall remain unremedied
for a period of more than one Business Day; or
(s) Commencement by any of the Companies or their estates or any
of their respective affiliates of any litigation, arbitration or other
proceeding relating to
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any claim or action against the Agent or any of the Lenders arising or alleged
to arise out of any conduct of any of such entities prior to the Closing Date
under or in connection with the Pre-Petition Loan Documents.
11.2. Remedies. (a) If any Event of Default shall have occurred
and be continuing, the Agent may, at its option, and shall at the direction of
the Required Lenders, without notice, (i) terminate the Commitment with respect
to further Revolving Credit Loans and Term Loans, whereupon no Revolving Credit
Loans or Term Loans may be made or Letter of Credit obligations incurred,
and/or (ii) declare all Obligations to be forthwith due and payable, whereupon
all Obligations shall become and be due and payable, without presentment,
demand, protest or further notice of any kind, all of which are expressly
waived by the Companies, and/or (iii) charge the Default Rate of Interest on
all then outstanding or thereafter incurred Obligations and Pre-Petition
Obligations in lieu of the interest provided for in Section 3, and/or (iv)
require the Companies on demand to cash collateralize Letters of Credit then
outstanding as required by Section 2.3(k).
(b) Upon the occurrence and during the continuance of an Event
of Default, and upon three Business Days' prior notice to the Companies, any
Creditors' Committee and the United States Trustee, the automatic stay provided
in section 362 of the Bankruptcy Code shall be deemed automatically vacated
without further order of the Bankruptcy Court and the Agent and the Lenders
shall be immediately permitted to, inter alia, pursue any and all of their
remedies against the Companies and/or the Collateral and seek payment in
respect of all Obligations.
(c) In addition to the remedies set forth above, the Agent on
behalf of the Lenders may exercise any of the remedies with respect to the
Collateral provided for in Section 5.6 or elsewhere herein or any other
remedies provided by applicable law.
11.3. Waivers by the Companies. Except as otherwise provided for
in this Agreement and applicable law, the Companies waive (i) presentment,
demand and protest and notice of presentment, dishonor, notice of intent to
accelerate, notice of acceleration, protest, default, nonpayment, maturity,
release, compromise, settlement, extension or renewal of any or all commercial
paper, accounts, contract rights, documents, instruments, chattel paper and
guaranties at any time held by the Lenders on which the Companies may in any
way be liable and hereby ratify and confirm whatever the Agent or the Lenders
may do in this regard, (ii) all rights to notice and a hearing prior to the
Lenders' taking possession or control of, or to the Agent's or
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any Lender's replevy, attachment or levy upon, the Collateral or any bond or
security which might be required by any court prior to allowing the Agent or
any Lender to exercise any of its remedies, and (iii) the benefit of all
valuation, appraisal and exemption laws. The Companies acknowledge that they
have been advised by attorneys of their choice with respect to this Agreement,
the other Post-Petition Loan Documents and the transactions evidenced by this
Agreement and the other Post- Petition Loan Documents.
12. MISCELLANEOUS
12.1. Complete Agreement. The Post-Petition Loan Documents
constitute the complete agreement between the parties with respect to the
subject matter hereof and may not be modified, altered or amended except by an
agreement in writing signed by the Companies, the Agent and the Lenders.
12.2. Fees and Expenses. Whether or not the transactions
contemplated hereunder are completed, the Companies shall be liable for all
reasonable out-of-pocket expenses of the Agent in connection with the
preparation of the Post-Petition Loan Documents and the administration of the
loans made pursuant thereto including, without limitation, the reasonable fees
and expenses of counsel and advisors, including, without limitation, the
allocated legal fees of in-house counsel, and fees and expenses associated with
periodic field audits and miscellaneous disbursements in connection with the
Post-Petition Loan Documents and the transactions contemplated thereby and
advice in connection therewith. If, at any time or times, regardless of the
existence of an Event of Default (except with respect to paragraphs (iii) and
(iv) below, which shall be subject to an Event of Default having occurred and
continuing), the Agent on behalf of the Lenders shall employ counsel or other
advisors for advice or other representation or shall incur reasonable legal or
other costs and expenses in connection with:
(i) any amendment, modification or waiver, or consent with
respect to, any of the Post-Petition Loan Documents or advice in
connection with the administration of the loans made pursuant hereto or
its rights hereunder or thereunder;
(ii) any litigation, contest, dispute, suit, proceeding or
action (whether instituted by the Agent, any Lender, any of the
Companies or any other Person) in any way relating to the Collateral,
any of the Post-Petition Loan
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Documents or any other agreements to be executed or delivered in
connection herewith;
(iii) any attempt to enforce any rights or remedies of the Agent
or the Lenders against the Companies or any other Person, that may be
obligated to a Lender by virtue of any of the Post-Petition Loan
Documents; or
(iv) any attempt to verify, protect, collect, sell, liquidate
or otherwise dispose of the Collateral;
then, and in any such event, all such costs and expenses of the Agent,
including the attorneys' and other parties' fees arising from such services,
including those of any appellate proceedings, and all expenses, costs, charges
and other fees incurred by such counsel and others in any way or respect
arising in connection with or relating to any of the events or actions
described in this Section shall be payable, on demand, whether or not the
transactions contemplated hereunder are consummated, by the Companies to the
Agent and shall be additional Obligations secured under this Agreement. Without
limiting the generality of the foregoing, such expenses, costs, charges and
fees may include: paralegal fees, costs and expenses; accountants' and
investment bankers' fees, costs and expenses; court costs and expenses;
photocopying and duplicating expenses; court reporter fees, costs and expenses;
long distance telephone charges; air express charges; telefax charges;
secretarial overtime charges; and expenses for travel, lodging and food paid or
incurred in connection with the performance of such legal services.
12.3. No Waiver by Lenders. The Agent or any Lender's failure at
any time or times, to require strict performance by the Companies of any
provision of this Agreement and any of the other Post-Petition Loan Documents
shall not waive, affect or diminish any right of the Agent or such Lender
thereafter to demand strict compliance and performance therewith. Any
suspension or waiver by the Agent or any Lender of an Event of Default by the
Companies under the this Agreement or any other Post-Petition Loan Document
shall not suspend, waive or affect any other Event of Default by the Companies
under this Agreement or any of the other Post-Petition Loan Documents whether
the same is prior or subsequent thereto and whether of the same or of a
different type. None of the undertakings, agreements, warranties, covenants and
representations of any Company contained in this Agreement or any of the other
Post-Petition Loan Documents and no defaults by any Company under any of the
Post-Petition Loan Documents shall be deemed to have been suspended or waived
by the Agent or the Lenders, unless such suspension or waiver is by an
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instrument in writing and directed to the Companies specifying such suspension
or waiver.
12.4. Additional Remedies. The Agent's and the Lenders' rights
and remedies under this Agreement shall be cumulative and nonexclusive of any
other rights and remedies which the Agent and the Lenders may have under any
other agreement, including without limitation, the Post-Petition Loan
Documents, the Pre- Petition Loan Documents, the U.C.C., by operation of law or
otherwise. Recourse to the Collateral shall not be required. This Agreement is
without prejudice to any rights of the Lenders under the Bankruptcy Code or
under non-bankruptcy law. Nothing in this Agreement shall be deemed a waiver of
the Lenders' right of banker's lien or setoff.
12.5. Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
12.6. Parties. This Agreement and the other Post-Petition Loan
Documents shall be binding upon, and inure to the benefit of, the successors of
the Companies, the Agent, the Lenders and the assigns, transferees and
endorsees of the Lenders.
12.7. Conflict of Terms. Except as otherwise provided in this
Agreement or any of the other Post-Petition Loan Documents by specific
reference to the applicable provisions of this Agreement, if any provision
contained in this Agreement is in conflict with, or inconsistent with, any
provision in any of the other Post-Petition Loan Documents, the provision
contained in this Agreement shall govern and control.
12.8. Authorized Signature. Until the Agent shall be notified by
any Company to the contrary, the signature upon any document or instrument
delivered pursuant hereto of an officer of each Company listed in Schedule 12.8
shall bind the Companies and be deemed to be the act of the Companies affixed
pursuant to and in accordance with resolutions duly adopted by Companies' Board
of Directors.
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12.9. Governing Law; Litigation. (a) Except as otherwise
expressly provided in any of the Post-Petition Loan Documents, in all respects,
including all matters of construction, validity and performance, this Agreement
and the Obligations arising hereunder shall be governed by, and be construed
and enforced in accordance with, the laws of the State of New York applicable
to contracts made and performed in such state, without regard to the principles
thereof regarding conflict of laws, and any applicable laws of the United
States of America. Service of process on the Companies, the Agent or the
Lenders in any action arising out of or relating to any of the Post-Petition
Loan Documents shall be effective if mailed to such party at the address listed
in Section 12.10.
(b) THE COMPANIES, THE AGENT AND THE LENDERS HEREBY WAIVE TRIAL
BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT IN WHICH
AN ACTION MAY BE COMMENCED ARISING OUT OF THIS AGREEMENT, THE COLLATERAL OR ANY
ASSIGNMENT THEREOF OR BY REASON OF ANY OTHER CAUSE OR DISPUTE WHATSOEVER
BETWEEN THEM OF ANY KIND OR NATURE. THE COMPANIES, THE AGENT AND THE LENDERS
HEREBY AGREE THAT THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF
DELAWARE OR, AT THE OPTION OF THE AGENT OR THE LENDERS, ANY COURT IN WHICH THE
AGENT OR ANY LENDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS
SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY, SHALL HAVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE
COMPANIES, THE AGENT AND THE LENDERS, PERTAINING DIRECTLY OR INDIRECTLY TO THIS
AGREEMENT OR TO ANY MATTER ARISING THEREFROM. THE COMPANIES EXPRESSLY SUBMIT
AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMMENCED IN SUCH COURTS, HEREBY WAIVING PERSONAL SERVICE OF THE SUMMONS AND
COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND AGREEING THAT SERVICE
OF SUCH SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE COMPANIES AT THE ADDRESSES OF THE
COMPANIES SET FORTH BELOW. SHOULD THE COMPANIES FAIL TO APPEAR OR ANSWER ANY
SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THIRTY (30) DAYS AFTER
THE MAILING THEREOF, THEY SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR
JUDGMENT MAY BE ENTERED AGAINST THEM AS DEMANDED OR PRAYED FOR IN SUCH
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SUMMONS, COMPLAINT, PROCESS OR PAPERS. THE CHOICE OF FORUM SET FORTH IN THIS
SECTION SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT
OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO
ENFORCE SAME IN ANY APPROPRIATE JURISDICTION. THE COMPANIES WAIVE ANY OBJECTION
BASED UPON FORUM NON CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION
INSTITUTED HEREUNDER.
12.10. Notices. Except as otherwise provided herein, whenever it
is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by another, or whenever any of the parties desires to give or
serve upon another any communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and either shall be delivered in person with receipt
acknowledged or by registered or certified mail, return receipt requested,
postage prepaid, or telecopied and confirmed by telecopy answerback addressed
as follows:
(a) If to Agent, at
The CIT Group/Business Credit, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Vice President Telecopy
Number: (000) 000-0000
With copies to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
Telecopy Number: (000) 000-0000
(b) If to any Company, addressed to it, at
Harvard Industries, Inc.
0000 Xxxxx Xxxxx Xxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
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Attention: Xxxxxx X. Xxxxxxxxx
and Xxxxxxx Xxxxxx, Esq.
Telecopy Number: (000) 000-0000
With copies to:
Willkie, Xxxx & Xxxxxxxxx
Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
and Xxxxx X. Xxxxx
Telecopy Number: (000) 000-0000
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly given or served on the date on which personally delivered,
with receipt acknowledged, telecopied and confirmed by telecopy answerback or
three (3) Business Days after the same shall have been deposited in the United
States mail. 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 in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration
or other communication. The Agent shall provide the Lenders with copies of all
notices received from the Companies hereunder, such notices to be sent to the
address of each Lender specified in writing by such Lender to the Agent for
this purpose from time to time.
12.11. Section 506(c) Waiver. In consideration of the Revolving
Line of Credit being made available to the Companies by the Lenders, each
Company hereby agrees not to assert and affirmatively waives any claim it
otherwise might have under section 506(c) of the Bankruptcy Code and agrees
that the Collateral securing the Obligations to the Lenders may be charged with
costs or expenses only as provided for under Section 2.5. with respect to
Permitted Expenses.
12.12. Waiver of Chapter 5 Claims. In consideration of the
Revolving Line of Credit being made available to the Companies by the Lenders,
each Company hereby agrees not to assert and hereby affirmatively waives any
claim it may have under Chapter 5 of the Bankruptcy Code against the Agent and
the Lenders in any
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form or manner whatsoever and affirmatively waives any right it may have to
challenge the extent and validity of the Liens granted to the Agent and the
Lenders pursuant to the Pre-Petition Loan Documents as security for the
Pre-Petition Obligations and further releases each Lender and the Agent from
and affirmatively waives any and all other claims it may have against the Agent
and any Lender from the beginning of time to the date hereof.
12.13. Reversal of Payments. To the extent the Companies make a
payment or payments to the Agent or the Lenders or the Agent or the Lenders
receive any payment or Proceeds of the Collateral for the Companies' benefit,
which payment(s) or proceeds or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then, to the extent of
such payment or proceeds received, the Obligations and the Pre-Petition
Obligations or part thereof intended to be satisfied shall be revived and
continue in full force and effect, as if such payment or proceeds had not been
received.
12.14. No Action. Each Company covenants that it will refrain
from commencing any action or suit, or prosecuting any pending action or suit,
in law or in equity, against the Agent or the Lenders, or their respective
agents, attorneys, employees, heirs, executors, administrators, officers,
directors, successors and assigns, on account of any action or cause of action
relating to the Pre-Petition Loan Documents and/or the Pre-Petition Obligations
which now exists or which may hereafter accrue in its favor upon the basis of
facts existing at the date hereof.
12.15. Waiver of Marshalling. The Agent and the Lenders shall
have no obligation to xxxxxxxx all or any portion of the Pre-Petition
Collateral or the Collateral upon any realization or foreclosure under this
Agreement or any Pre- Petition Loan Document, and any court having jurisdiction
over this Agreement may order the sale of all or any portion of the
Pre-Petition Collateral or the Collateral as an entirety. Any sale of, or the
grant of options to purchase (for the option period thereof or after exercise
thereof), or any other realization upon, all or any portion of the Pre-Petition
Collateral or the Collateral under this Agreement or any Pre-Petition Loan
Document by the Agent or the Lenders after foreclosure shall operate to divest
all right, title, interest, claim and demand, either at law or in equity, of
the Companies in and to any Pre-Petition Collateral or any Collateral so sold,
optioned or realized upon, and shall bar both at law and in equity the
Companies and any and all Persons claiming or attempting to claim the
Pre-Petition Collateral or the Collateral so
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sold, optioned or realized upon or any part thereof from, through and under the
Companies. No delay on the part of the Agent or any of the Lenders in
exercising any power of sale, lien, option or other right hereunder or under
any Pre-Petition Loan Document and no notice or demand which may be given to or
made upon any Company with respect to any power of sale, lien, option or any
other right hereunder or thereunder shall constitute a waiver thereof, or limit
or impair the right of the Agent or any of the Lenders to take any action or to
exercise any power of sale, lien, option or any other right under this
Agreement without notice or demand (except as otherwise provided by the terms
of this Agreement), nor shall any single or partial exercise thereof, or the
exercise of any power, Lien, option or other right under this Agreement or
otherwise, prejudice any of their rights against the Companies in any respect.
12.16. Pre-Petition Obligations. The Companies hereby
acknowledge, confirm and agree that the Companies are indebted to the Lenders
for the Pre-Petition Obligations, as of May 8, 1997, in the amounts set forth
in the recitals to this Agreement.
12.17. Acknowledgement of Security Interests. Each Company
hereby acknowledges, confirms and agrees that the Agent and the Lenders under
the Pre- Petition Loan Agreement have valid, enforceable and perfected first
priority Liens on and security interests in all Pre-Petition Collateral
pursuant to the Pre-Petition Loan Documents as in effect on the Petition Date
to secure all of the Pre-Petition Obligations.
12.18. Binding Effect of Documents. Each Company hereby
acknowledges, confirms and agrees that: (a) the agreements and obligations of
such Company contained in the Pre-Petition Loan Documents constitute the legal,
valid and binding obligations of such Company enforceable against it in
accordance with their respective terms and such Company has no valid defense,
offset or counterclaim to the enforcement of such obligations (other than those
arising as a consequence of the Chapter 11 Cases), and (b) the Agent and the
Lenders under the Pre-Petition Loan Agreement are and shall be entitled to all
of the rights, remedies and benefits provided for in the Pre-Petition Loan
Documents (except to the extent that the exercise thereof is stayed pursuant to
section 362 of the Bankruptcy Code as a consequence of the Chapter 11 Cases).
12.19. Right of Set-Off. Upon the occurrence and during the
continuance of any Event of Default, the Agent and the Lenders are hereby
authorized
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at any time and from time to time, 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 and other indebtedness at any time owing
by the Agent or any of the Lenders to or for the credit or the account of any
Company against any and all of the Obligations irrespective of whether or not
the Agent or any of the Lenders shall have made any demand under this Agreement
or otherwise and although such Obligations may be unmatured. The rights of the
Agent and Lenders under this Section are in addition to all other rights and
remedies (including, without limitation, other rights of set-off) which the
Agent and Lenders may have.
12.20. Survival. The representations and warranties of the
Companies in this Agreement shall survive the execution, delivery and
acceptance hereof by the parties hereto and the closing of the transactions
described herein or related hereto.
12.21. Section Titles. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the Agreement between the
parties hereto.
12.22. Counterparts. This Agreement may be executed in any
number of separate counterparts, each of which shall, collectively and
separately, constitute one agreement.
12.23. Joint and Several. Each of the Companies shall be jointly
and severally liable for all claims, liabilities, agreements, and obligations
hereunder and under the other Post-Petition Loan Documents, including, without
limitation, all Obligations.
12.24. GM Access Agreement. The Lenders agree to exercise their
reasonable commercial efforts in good faith to include in the Interim Order and
the Final Order a provision expressly confirming the rights of General Motors
Corporation under the Accommodation Agreement and the Access and Occupancy
Agreement with certain of the Companies.
12.25. Indemnity. The Companies agree to indemnify and hold
harmless the Agent and each Lender, and the directors, officers, employees,
agents, consultants and advisors of or to any of the foregoing (each of the
foregoing being an "Indemnitee") from and against any and all claims, damages,
liabilities, obligations, losses, penalties, actions, judgments, suits, costs,
disbursements and expenses of any
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kind or nature (including, without limitation, fees and disbursements of
counsel to any such Indemnitee) which may be imposed on, incurred by or
asserted against any such Indemnitee in any manner relating to or arising out
of this Agreement, any other Post- Petition Loan Document, any Obligation, any
Pre-Petition Obligation, or any act, event or transaction related or attendant
to any thereof, including any enforcement or collection of the Obligations or
the Pre-Petition Obligations, whether or not any such Indemnitee is a party
thereto, whether direct, indirect, or consequential and whether based on any
federal, state or local law; provided, however, that the Companies shall not
have any obligation under this Section to an Indemnitee with respect to any of
the foregoing caused by or resulting from the gross negligence or willful
misconduct of such Indemnitee or of the Agent or Lender of which such
Indemnitee is a director, officer, employee, agent, consultant or advisor, as
determined by a court of competent jurisdiction in a final non-appealable
judgment or order or results from disputes among Indemnitees not involving the
Companies.
13. AGREEMENT BETWEEN THE LENDERS; PARTICIPATIONS;
ASSIGNMENTS
13.1. Fund Disbursement. (a) The Agent, for the account of the
Lenders, shall disburse all loans and advances to the Companies and shall
handle all collections of Collateral and repayment of Obligations. It is
understood that for purposes of advances to the Companies and for purposes of
this Section 13.1 the Agent is using the funds of the Agent.
(b) Unless the Agent shall have been notified in writing by any
Lender prior to any advance to the Companies that such Lender will not make
such Lender's Ratable Portion of such borrowing on such date available to the
Agent, the Agent may assume that such Lender shall make such Ratable Portion
available to the Agent on a Settlement Date, and the Agent may, in reliance
upon such assumption, make available to the Companies a corresponding amount. A
certificate of the Agent submitted to any Lender with respect to any amount
owing under this clause shall be conclusive, absent manifest error. If such
Lender's Ratable Portion is not in fact made available to the Agent by such
Lender on the Settlement Date, the Agent shall be entitled to recover such
amount with interest thereon at the rate per annum applicable to Revolving
Credit Loans hereunder, on demand, from the Companies without prejudice to any
rights which the Agent or the Companies may have against such Lender hereunder.
Nothing contained in this subsection shall relieve any Lender which has failed
to make available its Ratable Portion of any borrowing hereunder from its
obligation to do so in accordance with the terms hereof. Nothing contained
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herein shall be deemed to obligate the Agent to make available to the Companies
the full amount of a requested advance when the Agent has any notice (written
or otherwise) that any Lender will not advance its Ratable Portion thereof.
13.2. Payment by Lenders. On the Settlement Date, the Agent and
the Lenders shall each remit to the other, in immediately available funds, all
amounts necessary so as to ensure that, as of the Settlement Date, the Lenders
shall have their Ratable Portion of all outstanding Obligations.
13.3. Monthly Accounting. The Agent shall forward to each
Lender, at the end of each month, a copy of the account statement rendered by
the Agent to the Companies.
13.4. Payments to Lenders. The Agent shall, after receipt of any
interest and fees earned under this Agreement, promptly remit to each Lender:
(a) its Ratable Portion of all fees, provided, however, that (i) no Lender
(other than CITBC) shall share in the Agent Fee or the Arrangement Fee; and
(ii) each Lender shall receive its share of the Letter of Credit Guaranty Fee,
the Revolving Line of Credit Fee, and the Closing Fee in accordance with its
agreements with the Agent; (b) interest on the Revolving Credit Loans on all
outstanding amounts advanced by such Lender on each Settlement Date, prior to
adjustment, that are subsequent to the last remittance by the Agent to such
Lender of the Companies's interest, computed at the rate provided for in
Section 3.1 less .25% per annum; (c) its Ratable Portion of all principal
repaid on the Term Loans; and (d) interest on the Term Loans on all amounts
advanced by such Lender on each Settlement Date computed at the rate provided
for in Section 3.2 less .25% per annum.
13.5. Participations. (a) The Companies acknowledge that the
Lenders may sell participations in the loans and extensions of credit made and
to be made to the Companies hereunder. The Companies further acknowledge that
in doing so, the Lenders may grant to such participants certain rights which
would require the participant's consent to certain waivers, amendments and
other actions with respect to the provisions of this Agreement and the other
Post-Petition Loan Documents, provided that the consent of any such participant
shall not be required except for matters requiring the consent of all Lenders
hereunder as set forth in Section 14.10.
(b) The Companies authorize each Lender to disclose to any
participant or purchasing lender (each, a "Transferee") and any prospective
Transferee any and all financial information in such Lender's possession
concerning
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the Companies and their affiliates which has been delivered to such Lender by
or on behalf of the Companies pursuant to this Agreement or which has been
delivered to such Lender by or on behalf of the Companies in connection with
such Lender's credit evaluation of the Companies and their affiliates prior to
entering into this Agreement.
(c) Each Lender and the Agent agree to keep information obtained
by it pursuant hereto confidential in accordance with such Lender's or the
Agent's, as the case may be, customary practices and agrees that it will only
use such information in connection with the transactions contemplated by this
Agreement and not disclose any of such information other than (i) to such
Lender's or the Agent's, as the case may be, employees, representatives, agents
and affiliates who are or are expected to be involved in the evaluation of such
information in connection with the transactions contemplated by this Agreement
and who are advised of the confidential nature of such information, (ii) to the
extent such information presently is or hereafter becomes available to such
Lender or the Agent, as the case may be, on a non-confidential basis from a
source other than the Companies, (iii) to the extent disclosure is required by
law, regulation or judicial order or requested or required by bank regulators
or auditors, or (iv) to assignees or participants or potential assignees or
participants who agree in writing for the benefit of the Companies to be bound
by the provisions of this sentence.
13.6. Obligations Several. The Companies, the Agent and the
Lenders hereby agree that each Lender is solely responsible for its Ratable
Portion of the Line of Credit and that neither the Agent nor any Lender shall
be responsible for, nor assume any obligations for the failure of any Lender to
make available, its Ratable Portion of the Line of Credit. Further, should any
Lender refuse to make available its Ratable Portion of the Line of Credit, then
any other Lender may, but without obligation to do so, increase, unilaterally,
its Ratable Portion of the Line of Credit in which event the Companies are so
obligated to that other Lender.
13.7. Legal Action; Expenses. In the event that the Agent, the
Lenders or any one of them is sued or threatened with suit by the Companies or
any one of them, or by any receiver, trustee, creditor or any committee of
creditors with respect to any matter relating to or arising from this Agreement
or the other Post- Petition Loan Documents, then in such event any money paid
in satisfaction or compromise of such suit, action, claim or demand and any
expenses, costs and attorneys' fees paid or incurred in connection therewith,
whether by the Agent, the Lenders or any one of them, shall be shared by the
Lenders ratably, except that, in
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the event that such expenses, costs or result from any suit, action, claim or
demand resulting from the gross negligence or willful misconduct of any Lender,
as determined by a final and non-applicable judgment of a court of competent
jurisdiction, all such expenses, costs or fees shall be borne by that Lender
alone. In addition, any costs, expenses, fees or disbursements incurred by
outside agencies or attorneys retained by the Agent to effect collection or
enforcement of any rights in the Collateral, including enforcing, preserving or
maintaining rights under this Agreement or any Post-Petition Loan Documents
shall be shared ratably between and among the Lenders to the extent not
reimbursed by the Companies or from the proceeds of Collateral.
13.8. Application of Proceeds Following Event of Default. Each
of the Lenders agrees with each other Lender that any money or assets of the
Companies held or received by such Lender, no matter how or when received,
shall be applied to the reduction of the Obligations and the Pre-Petition
Obligations after (a) the occurrence and during the continuance of an Event of
Default and (b) the election by the Agent or the Required Lenders to accelerate
the Obligations; provided, however, that no Lender shall be required to apply
any such money or assets toward reduction of the Obligations to the extent that
such money or assets is collateral or proceeds of Collateral for Indebtedness
(other than an Obligation or Pre-Petition Obligation) owed to such Lender. In
addition, the Companies authorize, and the Agent and the Lenders shall have the
right, without notice, upon any amount becoming due and payable hereunder, to
set-off and apply any and all property held by, or in the possession of such
Lender or the Agent against the Obligations.
13.9. Assignments by the Lenders. Each Lender shall have the
right at any time to assign to one or more commercial banks, commercial finance
lenders or other financial institutions all or a portion of its rights and
obligations under this Agreement (including, without limitation, its
obligations under the Line of Credit, the Term Loans, the Revolving Credit
Loans and its rights and obligations with respect to Letters of Credit) with
the consent of Harvard (such consent not to be unreasonably withheld);
provided, however, that no such consent will be required during the continuance
of an Event of Default. Upon execution of an Assignment and Transfer
Agreement, (i) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such assignment, have the rights and obligations of a Lender hereunder, and
(ii) the assigning Lender shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such assignment, relinquish its
rights and be released from its obligations under this Agreement. The Companies
shall, if necessary, execute any documents
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reasonably required to effectuate the assignments. No Lender may assign its
interest in the loans and advances and extensions of credit hereunder without
the prior written consent of the Agent (such consent not to be unreasonably
withheld).
14. AGENCY; AMENDMENTS AND WAIVERS
14.1. Appointment. Each Lender hereby irrevocably designates and
appoints CITBC as the Agent for the Lenders under this Agreement and any
ancillary loan documents and irrevocably authorizes CITBC as the Agent for such
Lender, to take such action on its behalf under the provisions of this
Agreement and all ancillary documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and all ancillary documents together with such other powers as are
reasonably incidental thereto, including, without limitation, to receive,
indorse and collect all instruments made payable to the Companies representing
any dividend or other distribution or payment in respect of the Pledged
Collateral or any part thereof, to give full discharge for the same, and to
vote or grant any consent in respect of the Pledged Shares as authorized in
this Agreement. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Agent shall not have any duties or responsibilities, except
those expressly set forth herein, or any fiduciary relationship with or
obligation to any Lender and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement and the
ancillary documents or otherwise exist against the Agent.
14.2. Performance of Duties. The Agent may execute any of its
duties under this Agreement and all ancillary documents by or through agents or
attorneys-in-fact and shall be entitled to the advice of counsel concerning all
matters pertaining to such duties.
14.3. Agent Not Liable. Neither the Agent nor any of its
officers, directors, employees, agents, or attorneys-in-fact shall be (i)
liable to any Lender for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any ancillary
document (except for its or such Person's own gross negligence or willful
misconduct), or (ii) responsible in any manner to any Lender for any recitals,
statements, representations or warranties made by the Companies or any of them,
or any officer of any thereof contained in this Agreement or any ancillary
document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Agent under or in connection with, this
Agreement or any of the ancillary documents or for the value,
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validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any of the ancillary documents or for any failure of the Companies
to perform their obligations hereunder or thereunder. The Agent shall not 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 of the ancillary documents or to inspect the
properties, books or records of the Companies, or any of them.
14.4. Reliance by Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order 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, without limitation, counsel to the Companies), independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement and
all ancillary documents unless it shall first receive such advice or
concurrence of the Lenders, or the Required Lenders, as the case may be, as it
deems appropriate or 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 Agent shall in
all cases be fully protected in acting, or in refraining from acting, under
this Agreement and all ancillary documents in accordance with a request of the
Required Lenders except where this Agreement requires concurrence of all the
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders.
14.5. Notice of Event of Default. The Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Agent has received notice from a Lender or the
Companies describing such Default or Event of Default. In the event that the
Agent receives such a notice, the Agent shall promptly give notice thereof to
the Lenders. The Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders
provided that unless and until the Agent shall have received such direction,
the Agent may in the interim (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable and in the best interests of the Lenders.
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14.6. No Representations; Independent Approval. Each Lender
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents or attorneys-in-fact has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Companies, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each Lender represents
to the Agent that it has, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Companies and made its own decision to enter into this Agreement. Each Lender
also represents that it will, independently and without reliance upon the Agent
or any other Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under the Agreement and
to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition or
creditworthiness of the Companies. The Agent, however, shall provide the
Lenders with copies of all financial statements, projections and business plans
which come into the possession of the Agent or any of its officers, employees,
agents or attorneys-in-fact.
14.7. Indemnity. The Lenders agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Companies and without
limiting the obligation of the Companies to do so), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever (including
negligence on the part of the Agent) which may at any time be imposed on,
incurred by or asserted against the Agent in anyway relating to or arising out
of this Agreement or any of the ancillary documents or any of the documents
contemplated by or referred to herein or the transactions contemplated hereby
or any action taken or omitted by the Agent under or in connection with any of
the foregoing, provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Agent's gross negligence or willful misconduct. The agreements in this Section
14.7 shall survive the payment of the Obligations.
14.8. Agent as Lender. CITBC may make loans to, and generally
engage in any kind of business with, the Companies as though CITBC were not the
Agent hereunder. With respect to its loans made or renewed by it or loan
obligations hereunder as Lender, CITBC shall have the same rights and powers,
duties and
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liabilities under this Agreement as any Lender and may exercise the same as
though it was not the Agent and the terms "Lender" and "Lenders" shall include
the Agent in its individual capacities.
14.9. Resignation. The Agent may resign as the Agent upon thirty
(30) days' notice to the Lenders and such resignation shall be effective upon
the appointment of a successor Agent. If the Agent shall resign as Agent, then
the Lenders shall appoint a successor Agent for the Lenders whereupon such
successor Agent shall succeed to the rights, powers and duties of the Agent and
the term "the Agent" shall mean such successor Agent effective upon its
appointment, and the former Agent's rights, powers and duties as the Agent
shall be terminated, without any other or further act or deed on the part of
such former Agent or any of the parties to this Agreement. After any retiring
Agent's resignation hereunder as the Agent, the provisions of this Section 14
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Agent.
14.10. Amendments; Waiver. No amendment or waiver of any
provision of this Agreement or any of the other Post-Petition Loan Documents,
nor consent to any departure by any Company therefrom, shall in any event be
effective unless the same shall be by the Agent and consented to in writing by
the Required Lenders, and then any such waiver or consent shall be effective
only in the specific instance for which given; provided, however, that no
amendment, waiver or consent shall, unless consented to by all the Lenders in
writing, do any of the following: (a) amend the Agreement to (i) increase the
Line of Credit; (ii) reduce the interest rates; (iii) reduce or waive (A) any
fees in which the Lenders share hereunder or (B) the repayment of any
Obligations due the Lenders; or (iv) extend the maturity of the Obligations;
(b) alter or amend this Section 14.10 or the definitions of Commitment,
Eligible Accounts Receivable, Eligible Inventory, Accounts Receivable Advance
Percentage, Inventory Advance Percentage, Collateral, ratably or Ratable
Portion, or Required Lenders or the Agent's criteria for determining compliance
with such definitions of eligibility; (c) release Collateral in bulk, other
than in connection with a sale of assets permitted hereunder, without a
corresponding reduction in the Obligations to the Lenders; or (d) intentionally
make any Revolving Credit Loan or assist in opening any Letter of Credit
hereunder if after giving effect thereto the total of Revolving Credit Loans
and Letters of Credit hereunder for the Companies would exceed, at any time,
the lesser of the Revolving Line of Credit and, after giving effect to
Permitted Overadvances, one hundred and ten percent (110%) of the Aggregate Net
Availability. In all other respects the Agent is authorized to take such
actions or fail to take such actions if the Agent, in its reasonable
discretion, deems such to be
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advisable and in the best interest of the Lenders, including, but not limited
to, the making of an overadvance or the termination of the Agreement upon the
occurrence of an Event of Default unless it is specifically instructed to the
contrary by the Required Lenders. No amendment, modification, termination or
waiver of any provision of Sections 14.1 through 14.9 or any other provisions
referring to the Agent shall be effective without the written consent of the
Agent. Any waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it was given.
14.11. Deemed Consent. In the event any Lender's consent is
required pursuant to the provisions of this Agreement and such Lender does not
respond to any request by the Agent for such consent within ten (10) days after
such request is made to such Lender, such failure to respond shall be deemed a
consent. In addition, in the event that any Lender declines to give its consent
to any such request, it is hereby mutually agreed that the Agent and/or any
other Lender shall have the right (but not the obligation) to purchase such
Lender's rights and obligations under this Agreement (including, without
limitation, its share of the Line of Credit, the Term Loans, the Revolving
Credit Loans and its rights and obligations with respect to the Letters of
Credit) for the full amount thereof together with accrued interest thereon to
the date of such purchase.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their proper and duly authorized officers as of the
date set forth above. This Agreement shall take effect as of the date set forth
above after being accepted below by an officer of the Agent and the Lenders
after which, the Agent shall forward to the Companies a fully executed original
for their files.
Very truly yours,
THE CIT GROUP/BUSINESS CREDIT, INC. as
Agent and Lender
By: /s/ Xxxxx x. Xxxxxxxx
------------------------------------
Vice President
CONGRESS FINANCIAL CORPORATION
as Lender
By: /s/Xxxxxxx X. Xxxxxxx
------------------------------------
Title: Vice Presdent
GENERAL ELECTRIC CAPITAL CORPORATION as
Lender
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------
Title: Duly Authorized Signator
XXXXXX FINANCIAL, INC.
as Lender
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Title: Vice President
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FINOVA CAPITAL CORPORATION as Lender
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Title: Vice President
FOOTHILL CAPITAL CORPORATION as Lender
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------------
Title: Vice President
Read and Agreed to:
HARVARD INDUSTRIES, INC.
THE XXXXXXXX-XXXXXX CORPORATION
XXXXXX AUTOMOTIVE, INC.
XXXXX-ALBION CORPORATION
XXXXXXX-XXXXXX, INC.
XXXXXXX-XXXXXX GREENEVILLE, INC.
XXXXXXX-XXXXXX POTTSTOWN, INC.
XXXXXXX-XXXXXX TECHNOLOGIES, INC.
XXXXXXX-XXXXXX TOLEDO, INC.
as Debtors and Debtors in Possession
By: /s/ Xxxxxx Xxxxxxxxx
_______________________________________
Title:
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EXHIBIT A
HARVARD INDUSTRIES, INC.
THE XXXXXXXX-XXXXXX CORPORATION
XXXXXX AUTOMOTIVE, INC.
XXXXX-ALBION CORPORATION
XXXXXXX-XXXXXX, INC.
XXXXXXX-XXXXXX GREENEVILLE, INC.
XXXXXXX-XXXXXX POTTSTOWN, INC.
XXXXXXX-XXXXXX TECHNOLOGIES, INC.
XXXXXXX-XXXXXX TOLEDO, INC.
REVOLVING CREDIT LOAN NOTE
May __, 1997 No. R-__ $----------
FOR VALUE RECEIVED, the undersigned, HARVARD INDUSTRIES, INC., a
Florida corporation and a debtor and debtor in possession under Chapter 11 of
the Bankruptcy Code, THE XXXXXXXX-XXXXXX CORPORATION, a New Hampshire
corporation and a debtor and debtor in possession under Chapter 11 of the
Bankruptcy Code, XXXXXX AUTOMOTIVE, INC., a Michigan corporation and a debtor
and debtor in possession under Chapter 11 of the Bankruptcy Code, XXXXX-ALBION
CORPORATION, a Michigan corporation and a debtor and debtor in possession under
Chapter 11 of the Bankruptcy Code, XXXXXXX-XXXXXX, INC., a Delaware corporation
and a debtor and debtor in possession under Chapter 11 of the Bankruptcy Code,
XXXXXXX-XXXXXX GREENEVILLE, INC., a Delaware corporation and a debtor and
debtor in possession under Chapter 11 of the Bankruptcy Code, XXXXXXX-XXXXXX
POTTSTOWN, INC., a Delaware corporation and a debtor and debtor in possession
under Chapter 11 of the Bankruptcy Code, XXXXXXX-XXXXXX TECHNOLOGIES, INC., a
Delaware corporation and a debtor and debtor in possession under Chapter 11 of
the Bankruptcy Code, and XXXXXXX-XXXXXX TOLEDO, INC., a Delaware corporation
and a debtor and debtor in possession under Chapter 11 of the Bankruptcy Code
(collectively, the "Companies"), jointly and severally promise to pay to the
order of ______________________, as Lender (the "Lender"), under a certain
Post- Petition Loan and Security Agreement (the "Agreement") of even date
herewith among the Companies, The CIT Group/Business Credit, Inc., as agent and
lender (the
115
"Agent"), and the other lenders party thereto at the Agent's office located at
1211 Avenue of the Americas, New York, New York, in lawful money of the United
States of America and in immediately available funds, the amount of
__________________________ dollars ($__________), or, if less, the outstanding
aggregate balance of the principal and unpaid interest in respect of the
Revolving Credit Loans, as shown on the books and records of the Agent. The
balance of such Revolving Credit Loan to the Companies will fluctuate as a
result of the daily application of the proceeds of collections of the Accounts
and the making of additional Revolving Credit Loans to the Companies as
described in Section 2 of the Agreement. The Revolving Credit Loans may be
borrowed, repaid and reborrowed by the Companies in accordance with the terms
and provisions of the Agreement. A final payment in an amount equal to the
outstanding aggregate balance of principal and interest remaining unpaid in
respect of the Revolving Credit Loans made to the Companies, if any, under this
Revolving Credit Loan Note as shown on the books and records of the Agent shall
be due and payable upon the Termination Date.
All capitalized terms used herein shall have the meaning
provided therefor in the Agreement, unless otherwise defined herein.
The Companies further promise to pay interest at such office, in
like money, on the unpaid principal amount owing hereunder in respect of
Revolving Credit Loans from time to time from the date hereof on the dates and
at the rates specified in Section 3.1 of the Agreement.
If any payment on this Revolving Credit Loan Note becomes due
and payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day, and with respect to payments of
principal, interest thereon shall be payable at the then applicable rate during
such extension.
The Companies are jointly and severally liable for the payment
and performance of all obligations hereunder.
This Revolving Credit Loan Note is one of the Revolving Credit
Loan Notes referred to in the Agreement, and is subject to, and entitled to,
all provisions and benefits thereof and is subject to optional and mandatory
prepayment, in whole or in part, as provided therein.
The date and amount of the advance(s) made hereunder will be
recorded on the separate ledgers maintained by the Agent, provided that any
failure to record any such information on such ledgers shall not in any manner
affect the obligation of the Companies to make payments of principal and
interest in accordance
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with the terms of this Revolving Credit Loan Note. The aggregate unpaid
principal amount of all advances made pursuant hereto may be set forth in the
balance column on said schedule or such ledgers maintained by the Agent. All
such advances, whether or not so recorded, shall be due as part of this
Revolving Credit Loan Note.
Upon the occurrence of any one or more of the Events of Default
specified in the Agreement or upon termination of the Agreement, all amounts
then remaining unpaid on this Revolving Credit Loan Note may become, or be
declared to be, immediately due and payable as provided in the Agreement.
Each Company and any and all guarantors, sureties and endorsers
jointly and severally waive grace, demand, presentment for payment, notice of
dishonor or default, notice of intent to accelerate, notice of acceleration,
protest and diligence in collecting.
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This Revolving Credit Loan Note shall be governed by, and
construed in accordance with, the laws of the state of New York and the
applicable federal laws of the United States.
HARVARD INDUSTRIES, INC.
THE XXXXXXXX-XXXXXX CORPORATION XXXXXX AUTOMOTIVE,
INC. XXXXX-ALBION CORPORATION XXXXXXX-XXXXXX,
INC. XXXXXXX-XXXXXX GREENEVILLE, INC.
XXXXXXX-XXXXXX POTTSTOWN, INC. XXXXXXX-XXXXXX
TECHNOLOGIES, INC. XXXXXXX-XXXXXX TOLEDO, INC.
By: ____________________________________
Title:
Attest:
Title:
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EXHIBIT B
HARVARD INDUSTRIES, INC.
THE XXXXXXXX-XXXXXX CORPORATION
XXXXXX AUTOMOTIVE, INC.
XXXXX-ALBION CORPORATION
XXXXXXX-XXXXXX, INC.
XXXXXXX-XXXXXX GREENEVILLE, INC.
XXXXXXX-XXXXXX POTTSTOWN, INC.
XXXXXXX-XXXXXX TECHNOLOGIES, INC.
XXXXXXX-XXXXXX TOLEDO, INC.
TERM LOAN PROMISSORY NOTE
May __, 1997
T-__
$---------
FOR VALUE RECEIVED, the undersigned, HARVARD INDUSTRIES, INC., a
Florida corporation and a debtor and debtor in possession under Chapter 11 of
the Bankruptcy Code, THE XXXXXXXX-XXXXXX CORPORATION, a New Hampshire
corporation and a debtor and debtor in possession under Chapter 11 of the
Bankruptcy Code, XXXXXX AUTOMOTIVE, INC., a Michigan corporation and a debtor
and debtor in possession under Chapter 11 of the Bankruptcy Code, XXXXX-ALBION
CORPORATION, a Michigan corporation and a debtor and debtor in possession under
Chapter 11 of the Bankruptcy Code, XXXXXXX-XXXXXX, INC., a Delaware corporation
and a debtor and debtor in possession under Chapter 11 of the Bankruptcy Code,
XXXXXXX-XXXXXX GREENEVILLE, INC., a Delaware corporation and a debtor and
debtor in possession under Chapter 11 of the Bankruptcy Code, XXXXXXX-XXXXXX
POTTSTOWN, INC., a Delaware corporation and a debtor and debtor in possession
under Chapter 11 of the Bankruptcy Code, XXXXXXX-XXXXXX TECHNOLOGIES, INC., a
Delaware corporation and a debtor and debtor in possession under Chapter 11 of
the Bankruptcy Code, and XXXXXXX-XXXXXX TOLEDO, INC., a Delaware corporation
and a debtor and debtor in possession under Chapter 11 of the Bankruptcy Code
(collectively, the "Companies"), jointly and severally promise to pay to the
order of ___________________, as Lender (the "Lender"), under a certain Post-
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Petition Loan and Security Agreement (the "Agreement") of even date herewith
among the Companies, The CIT Group/Business Credit, Inc., as agent and lender
(the "Agent"), and the other lenders party thereto at the Agent's office
located at 1211 Avenue of the Americas, New York, New York, in lawful money of
the United States of America and in immediately available funds, the principal
amount of ________________________ ($__________) or, if less, the outstanding
aggregate balance of principal and interest remaining unpaid in respect of the
Term Loans as shown on the books and records of the Agent, which shall be due
and payable upon the terms and conditions set forth in the Agreement.
Capitalized terms used herein and defined in the Agreement shall
have the same meanings as set forth therein unless otherwise specifically
defined herein.
The Companies further agree to pay interest at said office, in
like money, on the unpaid principal amount owing by the Companies hereunder
from time to time from the date hereof on the dates and at the rate specified
in Section 3.2 of the Agreement.
If any payment on this Note becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day, and with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
The Companies are jointly and severally liable for the payment
and performance of all obligations hereunder.
This Note is a Term Loan Note referred to in the Agreement, is
subject to, and entitled to, all provisions and benefits thereof and is subject
to optional and mandatory prepayment, in whole or in part, as provided therein.
Upon the occurrence of any one or more of the Events of Default
specified in the Agreement or upon termination of the Agreement, all amounts
then remaining unpaid on this Note by the Companies may become, or be declared
to be, at the sole election of the Agent, immediately due and payable as
provided in the Agreement.
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HARVARD INDUSTRIES, INC.
THE XXXXXXXX-XXXXXX CORPORATION XXXXXX AUTOMOTIVE,
INC. XXXXX-ALBION CORPORATION XXXXXXX-XXXXXX,
INC. XXXXXXX-XXXXXX GREENEVILLE, INC.
XXXXXXX-XXXXXX POTTSTOWN, INC. XXXXXXX-XXXXXX
TECHNOLOGIES, INC. XXXXXXX-XXXXXX TOLEDO, INC.
By:__________________________________ Title:
Attest:
---------------------------------
Title:
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EXHIBIT C
ASSIGNMENT AND TRANSFER AGREEMENT
Dated: May __, 1997
Reference is made to the Post-Petition Loan and Security
Agreement dated as of May __, 1997 (as amended, modified, supplemented and in
effect from time to time, the "Agreement"), among HARVARD INDUSTRIES, INC., a
Florida corporation and a debtor and debtor in possession under Chapter 11 of
the Bankruptcy Code, THE XXXXXXXX-XXXXXX CORPORATION, a New Hampshire
corporation and a debtor and debtor in possession under Chapter 11 of the
Bankruptcy Code, XXXXXX AUTOMOTIVE, INC., a Michigan corporation and a debtor
and debtor in possession under Chapter 11 of the Bankruptcy Code, XXXXX-ALBION
CORPORATION, a Michigan corporation and a debtor and debtor in possession under
Chapter 11 of the Bankruptcy Code, XXXXXXX-XXXXXX, INC., a Delaware corporation
and a debtor and debtor in possession under Chapter 11 of the Bankruptcy Code,
XXXXXXX-XXXXXX GREENEVILLE, INC., a Delaware corporation and a debtor and
debtor in possession under Chapter 11 of the Bankruptcy Code, XXXXXXX-XXXXXX
POTTSTOWN, INC., a Delaware corporation and a debtor and debtor in possession
under Chapter 11 of the Bankruptcy Code, XXXXXXX-XXXXXX TECHNOLOGIES, INC., a
Delaware corporation and a debtor and debtor in possession under Chapter 11 of
the Bankruptcy Code, and XXXXXXX-XXXXXX TOLEDO, INC., a Delaware corporation
and a debtor and debtor in possession under Chapter 11 of the Bankruptcy Code
(collectively, the "Companies"), The CIT Group/Business Credit, Inc., as agent
and lender (the "Agent"), and the other lenders party thereto (together with
the Agent, the "Lenders"). Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the Agreement. This
Assignment and Transfer Agreement, between the Assignor (as defined and set
forth on Schedule 1 hereto and made a part hereof) and the Assignee (as defined
and set forth on Schedule 1 hereto and made a part hereof) is dated as of
Effective Date (as set forth on Schedule 1 hereto and made a part hereof).
1. The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as of
the Effective Date, an undivided interest (the "Assigned Interest") in and to
all the Assignor's rights and obligations under the Agreement as of the date
hereof which represents the applicable percentage interests as are set forth on
Schedule 1 (collectively, the "Assigned Facilities" and individually, an
"Assigned Facility"), in a principal amount for each Assigned Facility as set
forth on Schedule 1.
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2. The Assignor (i) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Agreement or any other
instrument, document or agreement executed in conjunction therewith
(collectively the "Ancillary Documents") or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Agreement, any
Collateral thereunder or any of the Ancillary Documents furnished pursuant
thereto, other than that 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
adverse claim and (ii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Companies or any
guarantor or the performance or observance by the Companies or any guarantor of
any of its respective obligations under the Agreement or any of the Ancillary
Documents furnished pursuant thereto.
3. The Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Transfer Agreement; (ii) confirms
that it has received a copy of the Agreement, together with the copies of the
most recent financial statements of the Companies, and such other documents and
information as it has deemed appropriate to make its own credit analysis; (iii)
agrees that it will, independently and without reliance upon the Agent, the
Assignor or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Agreement; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under the Agreement as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; (v)
agrees that it will be bound by the provisions of the Agreement and will
perform in accordance with its terms all the obligations which by the terms of
the Agreement are required to be performed by it as Lender; and (vi) if the
Assignee is organized under the laws of a jurisdiction outside the United
States, attaches the forms prescribed by the Internal Revenue Service of the
United States certifying as to the Assignee's exemption from United States
withholding taxes with respect to all payments to be made to the Assignee under
the Agreement or such other documents as are necessary to indicate that all
such payments are subject to no tax under an applicable tax treaty.
4. Following the execution of this Assignment and Transfer
Agreement, such agreement will be delivered to the Agent for acceptance by it
and the Company, effective as of the Effective Date.
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5. Upon such acceptance, from and after the Effective Date, the
Agent shall make all payments in respect of the assigned interest (including
payments of principal, interest, fees and other amounts) to the Assignee,
whether such amounts have accrued prior to the Effective Date or accrue
subsequent to the Effective Date. The Assignor and Assignee shall make all
appropriate adjustments in payments for periods prior to the Effective Date
made by the Agent or with respect to the making of this assignment directly
between themselves.
6. From and after the Effective Date, (i) the Assignee shall be
a party to the Agreement and, to the extent provided in this Assignment and
Transfer Agreement, have the rights and obligations of a Lender thereunder, and
(ii) the Assignor shall, to the extent provided in this Assignment and Transfer
Agreement, relinquish its rights and be released from its obligations under the
Agreement.
7. THIS ASSIGNMENT AND TRANSFER AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed by their respective duly authorized
officers on Schedule 1 hereto.
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SCHEDULE 1 TO ASSIGNMENT AND TRANSFER AGREEMENT
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
Assigned Facilities
Percentage Interest of Revolving Line of Credit %
Percentage Interest of Term Loans %
Assignee's Revolving Loan Commitment $
Aggregate outstanding Revolving Credit Loans owing to $
Assignee
Aggregate outstanding Term Loans owing to Assignee $
Aggregate participations in Letters of Credit $
Interest and Fees
Revolving Credit Loans:
Applicable Base Rate Margin: %
Applicable Eurodollar Rate Margin: %
Letter of Credit Guaranty Fee: %
Revolving Line of Credit Fee: %
Term Loan
Applicable Term Loan Margin: %
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[NAME OF ASSIGNOR],
as Lender
(Assignor)
By: _______________________________
Title:
[NAME OF ASSIGNEE]
(Assignee)
By: _______________________________
Title:
Accepted:
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Agent
By: _______________________________
Title:
Approved:
HARVARD INDUSTRIES, INC.
THE XXXXXXXX-XXXXXX CORPORATION
XXXXXX AUTOMOTIVE, INC.
XXXXX-ALBION CORPORATION
XXXXXXX-XXXXXX, INC.
XXXXXXX-XXXXXX GREENEVILLE, INC.
XXXXXXX-XXXXXX POTTSTOWN, INC.
XXXXXXX-XXXXXX TECHNOLOGIES, INC.
XXXXXXX-XXXXXX TOLEDO, INC.
By: _______________________________
Title:
5
