EXHIBIT 10.13
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CREDIT AGREEMENT
dated as of
January 31, 2003,
Among
WKI HOLDING COMPANY, INC.,
The Lenders Party Hereto
and
JPMORGAN CHASE BANK,
as Administrative Agent
and Collateral Agent
___________________________
X.X. XXXXXX SECURITIES INC.,
as Arranger
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
SECTION 1.01. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Classification of Loans and Borrowings. . . . . . . . . . . . .19
SECTION 1.03. Terms Generally . . . . . . . . . . . . . . . . . . . . . . . .19
SECTION 1.04. Accounting Terms; GAAP . . . . . . . . . . . . . . . . . . . . 20
ARTICLE II
The Credits
SECTION 2.01. Loans and Borrowings . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.02. Interest Elections . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.03. Repayment of Loans; Evidence of Debt . . . . . . . . . . . . . 22
SECTION 2.04. Amortization of Loans . . . . . . . . . . . . . . . . . . . . .23
SECTION 2.05. Prepayment of Loans . . . . . . . . . . . . . . . . . . . . . .24
SECTION 2.06. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.07. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.08. Alternate Rate of Interest . . . . . . . . . . . . . . . . . . 26
SECTION 2.09. Increased Costs . . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 2.10. Break Funding Payments . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.11. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 2.12. Payments Generally; Pro Rata Treatment; Sharing of Set-offs . .28
SECTION 2.13. Mitigation Obligations; Replacement of Lenders . . . . . . . . 30
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.02. Authorization; Enforceability . . . . . . . . . . . . . . . . .31
SECTION 3.03. Governmental Approvals; No Conflicts . . . . . . . . . . . . . 31
SECTION 3.04. Financial Condition; No Material Adverse Change . . . . . . . .32
SECTION 3.05. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.06. Litigation and Environmental Matters . . . . . . . . . . . . . 33
SECTION 3.07. Compliance with Laws and Agreements . . . . . . . . . . . . . .33
SECTION 3.08. Investment and Holding Company Status . . . . . . . . . . . . .33
SECTION 3.09. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
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SECTION 3.10. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
SECTION 3.11. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.12. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.13. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . .34
SECTION 3.14. Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . .35
SECTION 3.15. Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 3.16. Security Documents . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 3.17. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . .36
ARTICLE IV
Conditions
SECTION 4.01. Effective Date . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4.02. Each Credit Event. . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other Information . . . . . . . . . . 40
SECTION 5.02. Notices of Material Events. . . . . . . . . . . . . . . . . . .42
SECTION 5.03. Information Regarding Collateral. . . . . . . . . . . . . . . .42
SECTION 5.04. Existence; Conduct of Business. . . . . . . . . . . . . . . . .43
SECTION 5.05. Payment of Obligations. . . . . . . . . . . . . . . . . . . . .43
SECTION 5.06. Maintenance of Properties. . . . . . . . . . . . . . . . . . . 43
SECTION 5.07. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.08. Casualty and Condemnation. . . . . . . . . . . . . . . . . . . 44
SECTION 5.09. Books and Records; Inspection and Audit Rights . . . . . . . . 44
SECTION 5.10. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.11. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.12. Additional Subsidiaries . . . . . . . . . . . . . . . . . . . .44
SECTION 5.13. Further Assurances . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.14. Interest Rate Protection . . . . . . . . . . . . . . . . . . . 45
SECTION 5.15. Environmental Laws . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 5.16. Earnings of Foreign Subsidiaries . . . . . . . . . . . . . . . 46
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness; Certain Equity Securities. . . . . . . . . . . . 46
SECTION 6.02. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 6.03. Fundamental Changes. . . . . . . . . . . . . . . . . . . . . . 48
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. . . 49
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SECTION 6.05. Asset Sales . . . . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 6.06. Sale and Leaseback Transactions . . . . . . . . . . . . . . . .51
SECTION 6.07. Swap Agreements . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness . . . . .51
SECTION 6.09. Transactions with Affiliates. . . . . . . . . . . . . . . . . .52
SECTION 6.10. Restrictive Agreements. . . . . . . . . . . . . . . . . . . . .52
SECTION 6.11. Amendment of Material Documents . . . . . . . . . . . . . . . .53
SECTION 6.12. Retail Stores . . . . . . . . . . . . . . . . . . . . . . . . .53
SECTION 6.13. Capital Expenditures. . . . . . . . . . . . . . . . . . . . . .53
SECTION 6.14. Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.15. Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . .54
SECTION 6.16. Minimum Consolidated EBITDA . . . . . . . . . . . . . . . . . .55
SECTION 6.17. Maximum Inventory . . . . . . . . . . . . . . . . . . . . . . .55
ARTICLE VII
Events of Default
ARTICLE VIII
The Administrative Agent and The Collateral Agent
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
SECTION 9.02. Waivers; Amendments . . . . . . . . . . . . . . . . . . . . . .62
SECTION 9.03. Expenses; Indemnity; Damage Waiver . . . . . . . . . . . . . . 63
SECTION 9.04. Successors and Assigns . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.05. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 9.06. Counterparts; Integration; Effectiveness. . . . . . . . . . . .67
SECTION 9.07. Severability . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 9.08. Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . .67
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process . . 67
SECTION 9.10. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . 68
SECTION 9.11. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 9.12. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . .68
SECTION 9.13. Interest Rate Limitation . . . . . . . . . . . . . . . . . . . 69
SECTION 9.14. Intercreditor Agreement . . . . . . . . . . . . . . . . . . . .69
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SCHEDULES:
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Schedule 2.01 -- Initial Exposures
Schedule 3.05 -- Real Property
Schedule 3.06 -- Disclosed Matters
Schedule 3.10 -- ERISA Matters
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Schedule 4.01(n) -- Material Adverse Changes
Schedule 5.15 -- Compliance with Environmental Laws
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.03 -- Subsidiaries to be Dissolved
Schedule 6.04(c) -- Existing Investments
Schedule 6.05(d) -- Asset Sales
Schedule 6.09 -- Transactions with Affiliates
Schedule 6.10 -- Existing Restrictions
EXHIBITS:
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Exhibit A -- Form of Assignment and Acceptance
Exhibit B-1 -- Form of Opinion of Xxxxx Day
Exhibit B-2 -- Form of Opinion of Local Counsel to the Borrower
Exhibit D -- Form of Collateral Agreement
Exhibit E -- Form of Intercreditor Agreement
CREDIT AGREEMENT dated as of January 31, 2003, among WKI
HOLDING COMPANY, INC., the LENDERS party hereto, and JPMORGAN
CHASE BANK, as Administrative Agent and Collateral Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
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following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
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whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
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for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means JPMorgan Chase Bank, in its capacity as
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administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
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in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person
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that directly, or indirectly through one or more intermediaries, Controls, is
Controlled by or is under common Control with the Person specified, provided
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that no Person shall be deemed an "Affiliate" solely as a result of
participation in the Stockholders' Agreement.
"Alternate Base Rate" means, for any day, a rate per annum equal to
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the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Lender, the
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percentage of the total Loans outstanding at such time represented by such
Lender's Exposure.
"Applicable Rate" means, for any day (a) 2.50% per annum, in the case
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of an ABR Loan or (b) 3.50% per annum, in the case of a Eurodollar Loan.
"Approved Fund" means (a) a CLO and (b) with respect to any Lender
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that is a fund that invests in bank loans and similar commercial extensions of
credit in the ordinary course of business, any other fund that invests in bank
loans and similar commercial extensions of credit in the ordinary course of
business and is managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Assignment and Acceptance" means an assignment and acceptance entered
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into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
"Bankruptcy Code" means Chapter 11 of the United States Bankruptcy
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Code.
"Board" means the Board of Governors of the Federal Reserve System of
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the United States of America.
"Xxxxxx Credit Agreement" means the Amended and Restated Credit
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Agreement dated as of April 12, 2001, as amended from time to time, between WKI
Holding Company, Inc. and Xxxxxx, Inc. and all documents relating thereto.
"Borrower" means WKI Holding Company, Inc., a Delaware corporation.
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"Borrowing" means Loans of the same Type made, converted or continued
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on the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.
"Borrowing Request" means a request by the Borrower for a Borrowing in
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accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
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day on which commercial banks in New York City are authorized or required by law
to remain closed, provided that, when used in connection with a Eurodollar Loan,
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the term "Business Day" shall also exclude any day on which banks are not open
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for dealings in dollar deposits in the London interbank market.
"Capital Expenditures" means, for any period, (a) the additions to
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property, plant and equipment and other capital expenditures of the Borrower and
the consolidated Subsidiaries that are (or would be) set forth in a consolidated
statement of cash flows of the Borrower for such period prepared in accordance
with GAAP (excluding up to $10,000,000 of Capital Expenditures during any fiscal
year to the extent such Capital Expenditures (i) are made to restore, repair or
replace property, plant or equipment that has been damaged (ii) are made with
insurance proceeds related to such damaged property, plant or equipment and
(iii) are made within 120 days after receipt of such insurance proceeds) and (b)
Capital Lease Obligations incurred by the Borrower and the consolidated
Subsidiaries during such period.
"Capital Lease Obligations" of any Person means the obligations of
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such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Change in Control" means (a) the acquisition of ownership, directly
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or indirectly, beneficially or of record, by any Person or "group" within the
meaning of the Exchange Act and the rules of the SEC thereunder as in effect on
the date hereof (other than (x) any employee benefit plan of the Borrower or the
Subsidiaries or (y) one or more Permitted Holders) of Equity Interests
representing more than 35% of either the aggregate ordinary voting power or the
aggregate equity value represented by the issued and outstanding Equity
Interests in the Borrower; (b) occupation of a majority of the seats (other than
vacant seats) on the board of directors of the Borrower by Persons who were
neither (i) nominated by the board of directors of the Borrower nor (ii)
appointed by directors so nominated; or (c) the occurrence of a change of
control (or similar event) under the New Senior Subordinated Notes Documents or
the New Revolving Credit Agreement.
"Change in Law" means (a) the adoption of any applicable law
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(statutory or common), treaty, rule, ordinance, judgment, decree, order,
regulation or determination of an arbitrator after the date hereof, (b) any
change in any applicable law (statutory or common), treaty, rule, ordinance,
judgment, decree, order, regulation or determination of an arbitrator or in the
interpretation or application thereof by any arbitrator or Governmental
Authority after the date hereof or (c) compliance by any Lender (or, for
purposes of Section 2.13(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any arbitrator or Governmental
Authority made or issued after the date hereof.
"CLO" means any entity (whether a corporation, partnership, trust or
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otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an Affiliate of such
Lender.
"Code" means the Internal Revenue Code of 1986, as amended from time
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to time.
"Collateral" means any and all "Collateral", as defined in any
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applicable Security Document.
"Collateral Agent" means JPMorgan Chase Bank, in its capacity as
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collateral agent for the Lenders hereunder.
"Collateral Agreement" means the Guarantee and Collateral Agreement
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among the Borrower, the Subsidiary Loan Parties and the Collateral Agent,
substantially in the form of Exhibit D.
"Collateral and Guarantee Requirement" means the requirement that:
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(a) the Collateral Agent shall have received from each Loan Party
either (i) a counterpart of the Collateral Agreement duly executed and
delivered on behalf of such Loan Party or (ii) in the case of any Person
that becomes a Loan Party after the Effective Date, a supplement to the
Collateral Agreement, in the form specified therein, duly executed and
delivered on behalf of such Loan Party;
(b) all outstanding Equity Interests of each Subsidiary owned by or on
behalf of any Loan Party shall have been pledged pursuant to the Collateral
Agreement (except that the Loan Parties shall not be required to pledge (i)
more than 65% of the outstanding voting Equity Interests of any Foreign
Subsidiary and (ii) Equity Interests to the extent that a pledge of such
Equity Interests or the delivery of Stock Certificates for such Equity
Interests (x) is prohibited by law or (y) in the case of Equity Interests
of any Subsidiary in existence on the Effective Date that is not
wholly-owned (directly or indirectly), is prohibited by the organizational
documents of such Subsidiary or stockholder or similar agreement applicable
to such Subsidiary, in each case as in effect on the Effective Date (in
each case, as confirmed by a certificate of a Financial Officer or the
Chief Legal Officer of the Borrower in form and substance reasonably
satisfactory to the Collateral Agent)), and the Collateral Agent shall have
received certificates or other instruments representing all such Equity
Interests (subject to clause (ii) above), together with stock powers or
other instruments of transfer with respect thereto endorsed in blank;
(c) all Indebtedness of the Borrower and each Subsidiary that is owing
to any Loan Party shall be evidenced by a promissory note and shall have
been pledged pursuant to the Collateral Agreement and the Collateral Agent
shall have received all such promissory notes, together with instruments of
transfer with respect thereto endorsed in blank;
(d) all documents and instruments, including Uniform Commercial Code
financing statements, required by law or reasonably requested by the
Collateral Agent to be filed, registered or recorded to create the Liens
intended to be created by the Collateral Agreement and perfect such Liens
to the extent required by, and with the priority required by, the
Collateral Agreement, shall have been filed, registered or recorded or
delivered to the Collateral Agent for filing, registration or recording;
(e) the Collateral Agent shall have received (i) counterparts of a
Mortgage with respect to each Mortgaged Property duly executed and
delivered by the record owner of such Mortgaged Property, (ii) a policy or
policies of title insurance issued by a nationally recognized title
insurance company insuring the Lien of each such Mortgage as a valid first
Lien on the Mortgaged Property described therein, free of any other Liens
except as expressly permitted by Section 6.02, together with such
endorsements, coinsurance and reinsurance as the Collateral Agent or the
Required Lenders may reasonably request, and (iii) legal opinions and other
documents as the Administrative Agent or the Required Lenders may
reasonably request with respect to any such Mortgage or Mortgaged Property;
and
(f) each Loan Party shall have obtained all consents and approvals
required to be obtained by it in connection with the execution and delivery
of all Security Documents to which it is a party, the performance of its
obligations thereunder and the granting by it of the Liens thereunder.
"Consolidated Cash Interest Expense" means, for any period, (a) the
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sum of (i) the interest expense (including imputed interest expense in respect
of Capital Lease Obligations but excluding non-cash amounts attributable to
amortization of financing costs paid in a previous period and, to the extent
included in consolidated interest expense for such period, non-cash amounts
attributable to amortization of debt discounts or accrued interest payable in
kind for such period) of the Borrower and the Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP, (ii) any interest
accrued during such period in respect of Indebtedness of the Borrower or any
Subsidiary that is required to be capitalized rather than included in
consolidated interest expense for such period in accordance with GAAP (excluding
non-cash amounts attributable to amortization of financing costs paid in a
previous period and, to the extent included in consolidated interest expense for
such period, non-cash amounts attributable to amortization of debt discounts or
accrued interest payable in kind for such period) and (iii) any cash payments
made during such period in respect of amortization of debt discounts or accrued
interest payable in kind that were amortized or accrued in a previous period,
minus (b) interest income of the Borrower and the Subsidiaries for such period,
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determined on a consolidated basis in accordance with GAAP, provided that for
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purposes of Section 6.15, Consolidated Cash Interest Expense for the
four-quarter period ending on (x) March 31, 2003, shall be deemed to be
Consolidated Cash Interest Expense for the fiscal quarter ending March 31, 2003,
multiplied by four, (y) June 30, 2003, shall be deemed to be Consolidated Cash
Interest Expense for the two-fiscal-quarter period ending on June 30, 2003,
multiplied by two and (z) September 30, 2003, shall be deemed to be Consolidated
Cash Interest Expense for the three-fiscal-quarter period ending on September
30, 2003, multiplied by 4/3.
"Consolidated EBITDA" means, for any period, Consolidated Net Income
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for such period plus (a) without duplication and to the extent deducted in
determining such Consolidated Net Income, the sum of (i) consolidated interest
expense for such period, (ii) consolidated income tax expense for such period,
(iii) all amounts attributable to depreciation and amortization for such period
and (iv) any non-cash, non-recurring charges for such period and any other
non-cash charges properly classified as "extraordinary" under GAAP, and minus
(b) without duplication and to the extent included in determining such
Consolidated Net Income, any extraordinary gains for such period, all determined
on a consolidated basis in accordance with GAAP.
"Consolidated Fixed Charges" means, for any period, the sum of (a)
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Consolidated Cash Interest Expense for such period, (b) the aggregate amount of
scheduled principal payments made during such period in respect of Long-Term
Indebtedness of the Borrower and the Subsidiaries (other than (i) payments made
by the Borrower or any Subsidiary to the Borrower or a Subsidiary and (ii)
payments made pursuant to the New Revolving Credit Agreement), (c) the aggregate
amount of Taxes paid in cash by the Borrower and the Subsidiaries during such
period and (d) the aggregate amount of cash payments made during such period in
respect of financing fees or similar costs, provided that for purposes of
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Section 6.15, Consolidated Fixed Charges for the four-quarter period ending on
(x) March 31, 2003, shall be deemed to be Consolidated Fixed Charges for the
fiscal quarter ending on March 31, 2003, multiplied by four, (y) June 30, 2003,
shall be deemed to be Consolidated Fixed Charges for the two-fiscal-quarter
period ending on June 30, 2003, multiplied by two and (z) September 30, 2003,
shall be deemed to be Consolidated Fixed Charges for the three-fiscal-quarter
period ending on September 30, 2003, multiplied by 4/3.
"Consolidated Net Income" means, for any period, the net income or
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loss of the Borrower and the Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, provided that there shall be
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excluded (a) the income of any Person (other than the Borrower) in which any
other Person (other than the Borrower or any Subsidiary or any director holding
qualifying shares in compliance with applicable law) owns an Equity Interest,
except to the extent of the amount of dividends or other distributions actually
paid to the Borrower or any of the Subsidiaries during such period, and (b) the
income or loss of any Person accrued prior to the date it becomes a Subsidiary
or is merged into or consolidated with the Borrower or any Subsidiary or the
date that such Person's assets are acquired by the Borrower or any Subsidiary.
"Control" means the possession, directly or indirectly, of the power
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to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
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"Court" means the United States Bankruptcy Court for the Northern
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District of Illinois, Eastern Division.
"Default" means any event or condition which constitutes an Event of
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Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DIP Credit Agreement" means the Revolving Credit and Guarantee
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Agreement dated as of May 31, 2002, as amended from time to time, among WKI
Holdings Company, Inc., the subsidiaries party thereto, JPMorgan Chase Bank, as
administrative agent and the lenders party thereto and all documents related
thereto.
"Disclosed Matters" means the actions, suits and proceedings and the
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environmental matters disclosed in Schedule 3.06.
"Disclosure Statement" means the Disclosure Statement pursuant to
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Section 1125 of the Bankruptcy Code for the Emergence Plan.
"dollars" or "$" refers to lawful money of the United States of
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America.
"Effective Date" means the date on which the conditions specified in
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Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Emergence Plan" means the Second Amended Joint Plan of Reorganization
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of World Kitchen, Inc., WKI Holding Company, Inc. and its Subsidiary Debtors
dated November 15, 2002, as modified on December 23, 2002, and confirmed on
December 23, 2002.
"Environmental Laws" means all laws, rules, regulations, codes,
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ordinances, statutes, permits, licenses, authorizations, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by or with any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the presence,
management or Release of any Hazardous Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
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(including any liability for damages, costs of investigation or environmental
remediation, costs of enforcement proceedings, fines, penalties or indemnities),
of the Borrower or any Subsidiary directly or indirectly resulting from or based
upon (a) compliance with or violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the actual or
alleged presence or Release of any Hazardous Materials into the environment or
(e) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.
"Equity Interests" means shares of capital stock, partnership
----------------
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
---------------
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
-----------
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
----------
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
----------------
VII.
"Excess Cash Flow" means, for any fiscal year, the sum (without
----------------
duplication) of:
(a) the consolidated net income (or loss) of the Borrower and the
consolidated Subsidiaries for such fiscal year, adjusted to exclude any
gains or losses attributable to Prepayment Events; plus
(b) depreciation, amortization and other non-cash charges or losses
deducted in determining such consolidated net income (or loss) for such
fiscal year; plus
(c) the sum of (i) the net amount, if any, by which the consolidated
deferred revenues and other consolidated accrued long-term liability
accounts of the Borrower and the consolidated Subsidiaries increased during
such fiscal year plus (ii) the net amount, if any, by which the
consolidated accrued long-term asset accounts of the Borrower and the
consolidated Subsidiaries decreased during such fiscal year; minus
(d) the sum of (i) the net amount, if any, by which the consolidated
deferred revenues and other consolidated accrued long-term liability
accounts of the Borrower and the consolidated Subsidiaries decreased during
such fiscal year plus (ii) the net amount, if any, by which the
consolidated accrued long-term asset accounts of the Borrower and the
consolidated Subsidiaries increased during such fiscal year; minus
(e) Capital Expenditures for such fiscal year (except to the extent
attributable to the incurrence of Capital Lease Obligations or otherwise
financed by incurring Long-Term Indebtedness); minus
(f) the aggregate principal amount of Long-Term Indebtedness repaid or
prepaid by the Borrower and the consolidated Subsidiaries during such
fiscal year, excluding (i) Indebtedness incurred under the New Revolving
Credit Agreement, (ii) Term Loans prepaid pursuant to Section 2.05(c), and
(iii) repayments or prepayments of Long-Term Indebtedness financed by
incurring other Long-Term Indebtedness.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
------------
from time to time.
"Excluded Inventory" has the meaning assigned to such term in the
------------------
Collateral Agreement.
"Excluded Taxes" means, with respect to the Administrative Agent, any
--------------
Lender, or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction described in clause (a) above and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.13(b)), any withholding tax that (i) is in effect and would apply to
amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party to this Agreement (or designates a new lending office), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to any withholding tax
pursuant to Section 2.11(a), or (ii) is attributable to such Foreign Lender's
failure to comply with Section 2.11(e).
"Exposure" means, with respect to any Lender at any time, the sum of
--------
the outstanding principal amount of such Lender's Loans at such time, as
initially set forth on Schedule 2.01 and as reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to Section 9.04.
"Federal Funds Effective Rate" means, for any day, the weighted
----------------------------
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer, principal
-----------------
accounting officer, treasurer or controller of the Borrower.
"Financing Transactions" means (a) the execution, delivery and
----------------------
performance by each Loan Party of the Loan Documents to which it is to be a
party, the borrowing of Loans and the use of the proceeds thereof, (b) the
execution, delivery and performance by each Loan Party of the New Senior
Subordinated Notes Documents to which it is to be a party, the issuance of the
New Senior Subordinated Notes and the use of the proceeds thereof and (c) the
execution, delivery and performance by each Loan party of the New Revolving
Credit Agreement and all documents related thereto to which it is a party, the
borrowing of the loans thereunder and the use of proceeds thereof.
"Foreign Lender" means any Lender that is organized under the laws of
--------------
a jurisdiction other than that in which the Borrower is located. For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized under the
------------------
laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the United
----
States of America.
"Governmental Authority" means the government of the United States of
----------------------
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any
--------- ---------
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
---------------
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation, provided that the term Guarantee shall not include
--------
endorsements for collection or deposit in the ordinary course of business.
"Hazardous Materials" means all (a) explosive, radioactive, hazardous
-------------------
or toxic materials, substances, wastes or other pollutants, including petroleum
or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and (b) other
substances, materials, chemicals or wastes
that in relevant form or concentration are limited, prohibited or regulated
pursuant to any Environmental Law.
"Indebtedness" of any Person means, without duplication, (a) all
------------
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind paid or deemed paid to such Person, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, (c)
all obligations of such Person upon which interest charges are customarily paid,
(d) all obligations of such Person under conditional sale or other title
retention agreements relating to property acquired by such Person, (e) all
obligations of such Person in respect of the deferred purchase price of property
or services (excluding current accounts payable incurred in the ordinary course
of business), (f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on property owned or acquired by such Person, whether or
not the Indebtedness secured thereby has been assumed, (g) all Guarantees by
such Person of Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty and (j)
all obligations, contingent or otherwise, of such Person in respect of bankers'
acceptances. The Indebtedness of any Person shall include the Indebtedness of
any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
-----------------
"Intercreditor Agreement" means the Intercreditor Agreement dated the
-----------------------
Effective Date among the Borrower, the Secured Parties (as defined in the
Collateral Agreement) and JPMorgan Chase Bank, as Collateral Agent,
substantially in the form of Exhibit E.
"Interest Election Request" means a request by the Borrower to convert
-------------------------
or continue a Borrowing in accordance with Section 2.02.
"Interest Payment Date" means (a) with respect to any ABR Loan, the
---------------------
last Business Day of each March, June, September and December and (b) with
respect to any Eurodollar Loan, the last Business Day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period.
"Interest Period" means, with respect to any Eurodollar Borrowing, the
---------------
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect, provided that (a) if any Interest Period
--------
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (b) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be the effective date of the most recent conversion or continuation of such
Borrowing.
"Lenders" means the Persons listed on Schedule 2.01 and any other
-------
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"Leverage Ratio" means, on any date, the ratio of (a) Total
--------------
Indebtedness as of such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters of the Borrower ended on such date (or, if such date
is not the last day of a fiscal quarter, ended on the last day of the fiscal
quarter of the Borrower most recently ended prior to such date).
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
---------
Interest Period, the rate appearing on Page 3750 of the Dow Xxxxx Market Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
---------
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
----
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" means this Agreement, the Collateral Agreement, the
--------------
Intercreditor Agreement and the other Security Documents.
"Loan Parties" means the Borrower and the Subsidiary Loan Parties.
------------
"Loans" means the loans made by the Lenders to the Borrower pursuant
-----
to this Agreement.
"Lockbox Agreement" has the meaning assigned to such term in the
-----------------
Collateral Agreement.
"Long-Term Indebtedness" means any Indebtedness that, in accordance
----------------------
with GAAP, constitutes (or, when incurred, constituted) a long-term liability.
"Margin Stock" means "margin stock" as such term is defined in
------------
Regulation U of the Board.
"Material Adverse Effect" means a material adverse effect on (a) the
-----------------------
business, operations, properties, assets, condition (financial or otherwise),
liabilities (including contingent liabilities) or prospects of the Borrower and
the Subsidiaries, taken as a whole, (b) the ability of the Loan Parties, taken
as a whole, to perform any of their obligations under any Loan Document or (c)
the rights of or benefits available to the Lenders under any Loan Document.
"Material Indebtedness" means Indebtedness (other than the Loans), or
---------------------
obligations in respect of one or more Swap Agreements, of any one or more of the
Borrower and the Subsidiaries in an aggregate principal amount exceeding
$5,000,000. For purposes of determining Material Indebtedness, the "principal
---------
amount" of the obligations of the Borrower or any Subsidiary in respect of any
------
Swap Agreement at any time shall be the maximum aggregate amount (giving effect
to any netting agreements) that the Borrower or such Subsidiary would be
required to pay if such Swap Agreement were terminated at such time.
"Maximum Rate" has the meaning assigned to such term in Section 9.13.
------------
"Moody's" means Xxxxx'x Investors Service, Inc.
-------
"Mortgage" means a mortgage, deed of trust, assignment of leases and
--------
rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the Obligations. Each Mortgage shall be
reasonably satisfactory in form and substance to the Collateral Agent.
"Mortgaged Property" means, initially, each parcel of real property
------------------
and the improvements thereto owned by a Loan Party and identified as a
"Mortgaged Property" on Schedule 3.05, and includes each other parcel of real
property and improvements thereto with respect to which a Mortgage is granted
pursuant to Section 5.12 or 5.13.
"Multiemployer Plan" means a multiemployer plan as defined in Section
------------------
4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any event (a) the cash proceeds
------------
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses paid by the Borrower and the
Subsidiaries to third parties (other than Affiliates) in connection with such
event, (ii) in the case of a sale, transfer or other disposition of an asset
(including pursuant to a sale and leaseback transaction or a casualty or a
condemnation or similar proceeding), the amount of all payments required to be
made by the Borrower and the Subsidiaries as a result of such event to repay
Indebtedness (other than Loans) secured by such asset or otherwise subject to
mandatory prepayment as a result of such event, and (iii) the amount of all
taxes paid (or reasonably estimated to be payable) by the Borrower and the
Subsidiaries, and the amount of any reserves established by the Borrower and the
Subsidiaries to fund contingent liabilities reasonably estimated to be payable,
in each case during the year that such event occurred or the next succeeding
year and that are directly attributable to such event (as determined reasonably
and in good faith by a Financial Officer of the Borrower).
"New Revolving Credit Agreement" means the Credit Agreement dated the
------------------------------
date hereof, as amended from time to time, among WKI Holding Company, Inc.,
JPMorgan Chase Bank, as Administrative Agent and the lenders party thereto and
all documents related thereto.
"New Senior Subordinated Notes" means the Senior Subordinated Notes
-----------------------------
Due 2010 to be issued by the Borrower on the Effective Date in the aggregate
principal amount of $123,150,000 and the Indebtedness represented thereby.
"New Senior Subordinated Notes Documents" means the indenture under
---------------------------------------
which the New Senior Subordinated Notes are issued and all other agreements,
instruments and other documents evidencing or governing the New Senior
Subordinated Notes or providing for any Guarantee or other right or support in
respect thereof.
"Obligations" has the meaning assigned to such term in the Collateral
-----------
Agreement.
"Old Credit Agreement" means the Amended and Restated Credit Agreement
--------------------
dated as of April 12, 2001, as amended from time to time, among WKI Holding
Company, Inc., JPMorgan Chase Bank, Citibank, N.A., Bankers Trust Company and
the lenders party thereto and all documents related thereto.
"Old Subsidiaries" means the subsidiaries of Old WKI that, prior to
----------------
the Reorganization, are debtors-in-possession under the Bankruptcy Code.
"Old WKI" means WKI Holding Company, Inc., a Delaware corporation
-------
that, prior to the Reorganization, was a debtor-in-possession under the
Bankruptcy Code.
"Order" means the order or orders of the Court confirming the
-----
Emergence Plan and approving the Reorganization, the Financing Transactions and
all related documentation contemplated thereby.
"Other Taxes" means any and all present or future recording, stamp,
-----------
documentary, excise, transfer, sales, property or similar taxes, charges or
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
----
defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in substantially the form
----------------------
of Exhibit II to the Collateral Agreement or any other form approved by the
Collateral Agent.
"Permitted Encumbrances" means:
----------------------
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.05;
(b) carriers', warehousemen's, landlords', mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more
than 30 days or are being contested in compliance with Section 5.05;
(c) pledges and deposits made in the ordinary course of business (x)
in compliance with workers' compensation, unemployment insurance and other
social security laws or regulations and (y) to utility companies;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary course
of business;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere
with the ordinary conduct of business of the Borrower or any Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any
-------- ----------------------
Lien securing Indebtedness.
"Permitted Holders" means the Class 6 Creditors (as defined in the
-----------------
Disclosure Statement) that are parties to the Stockholders' Agreement.
"Permitted Investments" means:
---------------------
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed
by the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, any domestic office of any commercial bank organized
under the laws of the United States of America or any State thereof having
a combined capital, surplus and undivided profits of not less than
$250,000,000; and
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into
with a financial institution satisfying the criteria described in clause
(c) above.
"Person" means any natural person, corporation, limited liability
------
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
----
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prepayment Event" means:
----------------
(a) any sale, transfer or other disposition (including pursuant to a
sale and leaseback transaction) of any property or asset of the Borrower or
any Subsidiary, other than dispositions described in clauses (a), (b), (d)
and (e) of Section 6.05; or
(b) any casualty or other insured damage to, or any taking under power
of eminent domain or by condemnation or similar proceeding of, any property
or asset of the Borrower or any Subsidiary, but only to the extent that the
Net Proceeds therefrom have not been applied to repair, restore or replace
such property or asset within 120 days after such event; or
(c) the issuance by the Borrower or any Subsidiary of any Equity
Interests, or the receipt by the Borrower or any Subsidiary of any capital
contribution, other than any such issuance of Equity Interests to, or
receipt of any such capital contribution from, the Borrower or a
Subsidiary; or
(d) the incurrence by the Borrower or any Subsidiary of any
Indebtedness, other than Indebtedness permitted under Section 6.01.
"Prime Rate" means the rate of interest per annum publicly announced
----------
from time to time by JPMorgan Chase Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Register" has the meaning assigned to such term in Section 9.04.
--------
"Related Parties" means, with respect to any specified Person, such
---------------
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Release" means any actual or threatened release, spill, emission,
-------
leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal,
leaching or migration into the environment (including ambient air, surface
water, groundwater, land surface or subsurface strata) or within any building,
structure, facility or fixture.
"Reorganization" has the meaning assigned to such term in the
--------------
Emergence Plan.
"Required Lenders" means, at any time, Lenders having Exposures
----------------
representing more than 50% of the sum of the total Exposures at such time.
"Restricted Payment" means any dividend or other distribution (whether
------------------
in cash, securities or other property) with respect to any Equity Interests in
the Borrower or any Subsidiary, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancelation or termination of
any Equity Interests in the Borrower or any Subsidiary or any performance unit,
stock appreciation right, phantom stock right or other right the price or value
of which is linked to the price or value of any Equity Interests in the Borrower
or any Subsidiary or any option, warrant or other right to acquire any such
Equity Interests in the Borrower or any Subsidiary.
"SEC" means the Securities and Exchange Commission, or any
---
Governmental Authority succeeding to any of its principal functions.
"S&P" means Standard & Poor's.
---
"Security Documents" means the Collateral Agreement, the Mortgages,
------------------
the Lockbox Agreement and each other security agreement or other instrument or
document executed and delivered pursuant to Section 5.12 or 5.13 to secure any
of the Obligations.
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
----------------------
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve
Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.
"Stockholders' Agreement" means the Stockholders' and Registration
-----------------------
Rights Agreement filed as an exhibit to the Emergence Plan and deemed to become
effective as of the effective date of the Emergence Plan among the Borrower and
each Person receiving new common stock pursuant to the Emergence Plan.
"subsidiary" means, with respect to any Person (the "parent") at any
---------- ------
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower after giving effect
----------
to the Reorganization.
"Subsidiary Loan Party" means any Subsidiary that is not a Foreign
---------------------
Subsidiary.
"Swap Agreement" means any agreement with respect to any swap,
--------------
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions, provided that
--------
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.
"Taxes" means any and all present or future taxes, levies, imposts,
-----
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term Loan Maturity Date" means March 31, 2008.
-----------------------
"Total Indebtedness" means, as of any date, the sum of (a) the
------------------
aggregate principal amount of Indebtedness of the Borrower and the Subsidiaries
outstanding as of such date, in the amount that would be reflected on a balance
sheet prepared as of such date on a consolidated basis in accordance with GAAP,
plus (b) the aggregate principal amount of Indebtedness of the Borrower and the
Subsidiaries outstanding as of such date that is not required to be reflected on
a balance sheet in accordance with GAAP, determined on a consolidated basis,
provided that, for purposes of clause (b) above, the term "Indebtedness" shall
----- ------------
not include contingent obligations of the Borrower or any Subsidiary as an
account party in respect of any letter of credit or letter of guaranty unless
such letter of credit or letter of guaranty supports an obligation that
constitutes Indebtedness.
"Transactions" means the Reorganization and the Financing
------------
Transactions.
"Type", when used in reference to any Loan or Borrowing, refers to
----
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
--------------------
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For
---------------------------------------
purposes of this Agreement, Loans may be classified and referred to by Type
(e.g., a "Eurodollar Loan"). Borrowings also may be classified and referred to
----
by Type (e.g., a "Eurodollar Borrowing").
----
SECTION 1.03. Terms Generally. The definitions of terms herein
----------------
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise
-----------------------
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time, provided
--------
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Loans and Borrowings. (a) Subject to the terms and
---------------------
conditions set forth herein, each Lender shall be deemed to have made a Loan to
the Borrower on the Effective Date in the principal amount set forth on Schedule
2.01, as partial consideration for the termination and discharge of all
obligations owed to such Lender under the Old Credit Agreement, as provided in
the Emergence Plan.
(b) Each Loan shall be made as part of a Borrowing consisting of
Loans of the same Type made by the Lenders ratably in accordance with each
Lender's Exposure. Amounts repaid in respect of Loans may not be reborrowed.
(c) Subject to Section 2.08, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith, provided that all Borrowings made on the Effective Date
--------
shall be ABR Borrowings. Each Lender at its option may make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan, provided that any exercise of such option shall not affect the
--------
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement.
(d) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $2,500,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $500,000 and not less than $1,000,000, provided that the
--------
ABR Borrowings made on the Effective Date shall be equal to the sum of the total
Exposures. Borrowings of more than one Type may be outstanding at the same
time, provided that there shall not at any time be more than a total of 15
--------
Eurodollar Borrowings outstanding.
(e) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to elect to convert or continue any Borrowing if
the Interest Period requested with respect thereto would end after the Term Loan
Maturity Date.
SECTION 2.02. Interest Elections. (a) Following the Effective
-------------------
Date, the Borrower may elect to convert any Borrowing to a different Type or to
continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The Borrower may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders, and the Loans comprising each such portion shall be considered a
separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone (i) in the
case of a Eurodollar Borrowing, not later than 12:00 noon, New York City time,
three Business Days before the date of the proposed conversion or continuation
and (ii) in the case of an ABR Borrowing, not later than 12:00 noon, New York
City time, on the date of the proposed conversion or continuation. Each such
telephonic Interest Election Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Interest Election Request in a form approved by the Administrative Agent and
signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.01:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing
or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of
the term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request,
the Administrative Agent shall advise each Lender of the details thereof and of
such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
SECTION 2.03. Repayment of Loans; Evidence of Debt. (a) The
-------------------------------------
Borrower hereby unconditionally promises to pay to the Administrative Agent for
the account of each Lender the then unpaid principal amount of each Loan of such
Lender as provided in Section 2.04.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
----- -----
existence and amounts of the obligations recorded therein, provided that the
--------
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.04. Amortization of Loans. (a) Subject to adjustment
----------------------
pursuant to paragraph (c) of this Section, the Borrower shall repay Borrowings
on each date set forth below in the aggregate principal amount set forth
opposite such date:
Date Amount
------------------ -------
March 31, 2003 0.25%
------------------ -------
June 30, 2003 0.25%
------------------ -------
September 30, 2003 0.25%
------------------ -------
December 31, 2003 0.25%
------------------ -------
March 31, 2004 0.25%
------------------ -------
June 30, 2004 0.25%
------------------ -------
September 30, 2004 0.25%
------------------ -------
December 31, 2004 0.25%
------------------ -------
March 31, 2005 0.25%
------------------ -------
June 30, 2005 0.25%
------------------ -------
September 30, 2005 0.25%
------------------ -------
December 31, 2005 0.25%
------------------ -------
March 31, 2006 0.25%
------------------ -------
June 30, 2006 0.25%
------------------ -------
September 30, 2006 0.25%
------------------ -------
December 31, 2006 0.25%
------------------ -------
March 31, 2007 0.25%
------------------ -------
June 30, 2007 0.25%
------------------ -------
September 30, 2007 0.25%
------------------ -------
December 31, 2007 0.25%
------------------ -------
March 31, 2008 95.00%
------------------ -------
(b) To the extent not previously paid, all Loans shall be due and
payable on the Term Loan Maturity Date.
(c) Any prepayment of a Borrowing shall be applied to reduce the
subsequent scheduled repayments of the Borrowings to be made pursuant to this
Section ratably.
(d) Prior to any repayment of any Borrowings hereunder, the
Borrower shall select the Borrowing or Borrowings to be repaid and shall notify
the Administrative Agent by telephone (confirmed by telecopy) of such selection
not later than 11:00 a.m., New York City time, three Business Days before the
scheduled date of such repayment. Each repayment of a Borrowing shall be
applied ratably to the Loans included in the repaid Borrowing. Repayments of
Borrowings shall be accompanied by accrued interest on the amount repaid.
SECTION 2.05. Prepayment of Loans. (a) The Borrower shall have
--------------------
the right at any time and from time to time to prepay any Borrowing in whole or
in part, subject to the requirements of this Section.
(b) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary in respect of any
Prepayment Event, the Borrower shall, immediately after such Net Proceeds are
received, prepay Borrowings in an aggregate amount equal to (i) in the case of
any event described in clause (a), (b) or (c) of the definition of the term
"Prepayment Event", 75% of such Net Proceeds and (ii) in the case of any event
described in clause (d) of the definition of the term "Prepayment Event", 100%
of such Net Proceeds, provided that, in the case of any event described in
--------
clause (a) or (b) of the definition of the term "Prepayment Event", if the
Borrower shall deliver to the Administrative Agent a certificate of a Financial
Officer to the effect that the Borrower and the Subsidiaries intend to apply the
Net Proceeds from such event (or a portion thereof specified in such
certificate), within 120 days after receipt of such Net Proceeds, to acquire
real property, equipment, other tangible assets, patents or trademarks to be
used in the business of the Borrower and the Subsidiaries, and certifying that
no Default has occurred and is continuing, then no prepayment shall be required
pursuant to this paragraph in respect of the Net Proceeds in respect of such
event (or the portion of such Net Proceeds specified in such certificate, if
applicable) except to the extent of any such Net Proceeds therefrom that have
not been so applied by the end of such 120-day period, at which time a
prepayment shall be required in an amount equal to such Net Proceeds that have
not been so applied; provided, further, that the Borrower shall not be permitted
-------- -------
to make elections pursuant to the immediately preceding proviso with respect to
Net Proceeds in any fiscal year aggregating in excess of $3,000,000.
(c) Following the end of each fiscal year of the Borrower,
commencing with the fiscal year ending 2003, the Borrower shall prepay
Borrowings in an aggregate amount equal to 50% of Excess Cash Flow for such
fiscal year. Each prepayment pursuant to this paragraph shall be made not later
than 10 days following the date on which financial statements are delivered
pursuant to Section 5.01 with respect to the fiscal year for which Excess Cash
Flow is being calculated (and in any event within 100 days after the end of such
fiscal year).
(d) Prior to any optional or mandatory prepayment of Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid
and shall specify such selection in the notice of such prepayment pursuant to
paragraph (e) of this Section.
(e) The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 12:00 noon, New York City
time, three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing, not later than 12:00 noon, New York City time,
one Business Day before the date of prepayment. Each such notice shall specify
the prepayment date, the principal amount of each Borrowing or portion thereof
to be prepaid and, in the case of a mandatory prepayment, a reasonably detailed
calculation of the amount of such prepayment. Each such notice shall be
irrevocable, provided that a notice of prepayment may state that such notice is
--------
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied. Promptly following receipt of any such notice, the Administrative
Agent shall advise the Lenders of the contents thereof. Each partial prepayment
of any Borrowing shall be in an amount that would be permitted in the case of a
continuation or conversion of a Borrowing of the same Type as provided in
Section 2.02, except as necessary to apply fully the required amount of a
mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably
to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.07.
SECTION 2.06. Fees. The Borrower agrees to pay to the
-----
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between the Borrower and the Administrative
Agent.
SECTION 2.07. Interest. (a) The Loans comprising each ABR
---------
Borrowing shall bear interest at the Alternate Base Rate plus the Applicable
Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or interest
on any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan, provided that (i) interest accrued
--------
pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Eurodollar Loan, accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate
or Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.08. Alternate Rate of Interest. If prior to the
---------------------------
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall
be conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the Adjusted LIBO Rate for such Interest Period;
or
(b) the Administrative Agent is advised by the Required Lenders
that the Adjusted LIBO Rate for such Interest Period will not adequately
and fairly reflect the cost to such Lenders of making or maintaining their
Loans included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
SECTION 2.09. Increased Costs. (a) If any Change in Law shall:
----------------
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender, as the case may be, such
additional amount or amounts as will compensate such Lender, as the case may be,
for such additional costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on such Lender's capital or on the capital of such Lender's holding company, if
any, as a consequence of this Agreement or the Loans made by such Lender to a
level below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 Business
Days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation, provided that the Borrower shall not
--------
be required to compensate a Lender pursuant to this Section for any increased
costs or reductions incurred more than 270 days prior to the date that such
Lender notifies the Borrower of the Change in Law giving rise to such increased
costs or reductions and of such Lender's intention to claim compensation
therefor; provided, further, that, if the Change in Law giving rise to such
-------- -------
increased costs or reductions is retroactive, then the 270-day period referred
to above shall be extended to include the period of retroactive effect thereof.
SECTION 2.10. Break Funding Payments. In the event of (a) the
-----------------------
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to convert, continue
or prepay any Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked under Section 2.05(e) and is
revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto as a result
of a request by the Borrower pursuant to Section 2.13, then, in any such event,
the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost
or expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest that would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to convert or continue, for the period
that would have been the Interest Period for such Loan), over (ii) the amount of
interest that would accrue on such principal amount for such period at the
interest rate that such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
SECTION 2.11. Taxes. (a) Any and all payments by or on account of
------
any obligation of the Borrower hereunder or under any other Loan Document shall
be made free and clear of and without deduction for any Indemnified Taxes or
Other Taxes, provided that if the Borrower shall be required to deduct any
--------
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent or Lender (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and each
Lender within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrower hereunder or under any other Loan Document
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender, or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower as will permit such payments to be
made without withholding or at a reduced rate, provided that such Foreign Lender
--------
has received written notice from the Borrower advising it of the availability of
such exemption or reduction and supplying all applicable documentation.
SECTION 2.12. Payments Generally; Pro Rata Treatment; Sharing of
--------------------------------------------------
Set-offs. (a) The Borrower shall make each payment required to be made by it
---------
hereunder or under any other Loan Document (whether of principal, interest,
fees, or of amounts payable under Section 2.09, 2.10 or 2.11, or otherwise) not
later than the time expressly required hereunder or under such other Loan
Document for such payment (or, if no such time is expressly required, not later
than 12:00 noon, New York City time), on the date when due, in immediately
available funds, without set-off or counterclaim. Any amounts received after
such time on any date may, in the discretion of the Administrative Agent, be
deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
except that payments pursuant to Sections 2.09, 2.10, 2.11 and 9.03 shall be
made directly to the Persons entitled thereto and payments pursuant to other
Loan Documents shall be made to the Persons specified therein. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate Person promptly following receipt
thereof. If any payment under any Loan Document shall be due on a day that is
not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All
payments under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
interest and fees then due hereunder, such funds shall be applied (i) first,
towards payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, towards payment of principal then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans, provided that (i) if any such participations are
--------
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders hereunder that the Borrower
will not make such payment, the Administrative Agent may assume that the
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders the amount due. In
such event, if the Borrower has not in fact made such payment, then each of the
Lenders severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be
made by it pursuant to Section 2.09 or 9.03(c), then the Administrative Agent
may, in its discretion (notwithstanding any contrary provision hereof), apply
any amounts thereafter received by the Administrative Agent for the account of
such Lender to satisfy such Lender's obligations under such Sections until all
such unsatisfied obligations are fully paid.
SECTION 2.13. Mitigation Obligations; Replacement of Lenders. (a)
-----------------------------------------------
If any Lender requests compensation under Section 2.09, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.11, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the
reasonable judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.09 or 2.11, as the
case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.09, or if
the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.11,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that (i) the Borrower
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shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 2.09 or payments required to be made pursuant to Section 2.09, such
assignment will result in a material reduction in such compensation or payments.
A Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Borrower and the
---------------------
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. Authorization; Enforceability. The Transactions
------------------------------
entered into and to be entered into by each Loan Party are within such Loan
Party's corporate powers and have been duly authorized by all necessary action.
This Agreement has been duly executed and delivered by the Borrower and
constitutes, and each other Loan Document to which any Loan Party is to be a
party, when executed and delivered by such Loan Party, will constitute, a legal,
valid and binding obligation of the Borrower or such Loan Party (as the case may
be), enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The
-------------------------------------
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by or before, any Governmental Authority,
except such as have been obtained or made and are in full force and effect and
except filings necessary to perfect Liens created under the Loan Documents, (b)
will not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of the Borrower or any of Subsidiaries or any
order of any Governmental Authority, (c) will not violate or result in a default
under, or result in the termination, cancelation or acceleration of any
obligation or a loss of a material benefit under, any indenture, agreement or
other instrument binding upon the Borrower or any of the Subsidiaries or any of
their assets, or give rise to a right thereunder to require any payment to be
made by the Borrower or any of the Subsidiaries, and (d) will not result in the
creation or imposition of any Lien on any asset of the Borrower or any of the
Subsidiaries, except (x) Liens created under the Loan Documents and (y) Liens
permitted by Section 6.02. The Orders (i) are in full force and effect and (ii)
are not subject to any stay, reversal, modification or vacatur, in whole or in
part.
SECTION 3.04. Financial Condition; No Material Adverse Change.
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(a) The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income, stockholders' equity and cash flows (i)
as of and for the fiscal years ended December 31, 1999, December 31, 2000, and
December 31, 2001, reported on by Deloitte & Touche LLP, independent public
accountants, (ii) as of and for the fiscal quarters ended March 31, 2002, June
30, 2002, and September 30, 2002, and (iii) as of and for each fiscal month
after the most recent fiscal period described in clause (ii) above and ending at
least 45 days prior to the Effective Date, in each case certified by its chief
financial officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Borrower and the consolidated Subsidiaries as of such dates and for such periods
in accordance with GAAP, subject to year-end audit adjustments and the absence
of footnotes in the case of the statements referred to in clauses (ii) and (iii)
above.
(b) The Borrower has heretofore furnished to the Lenders its pro
forma consolidated balance sheet as of the Effective Date, prepared giving
effect to the Transactions. Such pro forma consolidated balance sheet (i) has
been prepared in good faith based on reasonable assumptions, (ii) is based on
the best information available to the Borrower after due inquiry, (iii)
accurately reflects all adjustments necessary to give effect to the Transactions
and (iv) presents fairly, in all material respects, the pro forma financial
position of the Borrower and the consolidated Subsidiaries as of the Effective
Date.
(c) Except as disclosed in the financial statements referred to
above or the notes thereto or in the Disclosure Statement and except for the
Disclosed Matters, after giving effect to the Transactions, none of the Borrower
or the Subsidiaries has, as of the Effective Date, any material contingent
liabilities, unusual long-term commitments or unrealized losses.
(d) Since December 31, 2001, there has been no material adverse
change in the business, operations, properties, assets, condition (financial or
otherwise) liabilities (including contingent liabilities) or prospects of the
Borrower and the Subsidiaries, taken as a whole, other than any material adverse
change disclosed (i) in the Emergence Plan or the Disclosure Statement or (ii)
on Schedule 4.01(bb).
SECTION 3.05. Properties. (a) Each of the Borrower and the
-----------
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business (including its Mortgaged
Properties), except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.
(b) Each of the Borrower and the Subsidiaries owns, or is licensed
to use, all trademarks, trade names, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Borrower and the
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
(c) Schedule 3.05 sets forth the address of each real property
that is owned or leased by the Borrower or any of the Subsidiaries as of the
Effective Date after giving effect to the Transactions.
(d) As of the Effective Date, none of the Borrower or the
Subsidiaries has received notice of, or has knowledge of, any pending or
contemplated condemnation proceeding affecting any Mortgaged Property or any
sale or disposition thereof in lieu of condemnation. Neither any Mortgaged
Property nor any interest therein is subject to any right of first refusal,
option or other contractual right to purchase any such Mortgaged Property or
interest therein.
SECTION 3.06. Litigation and Environmental Matters. (a) There are
-------------------------------------
no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of the Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve any of the Loan Documents or the Transactions.
(b) Except for the Disclosed Matters and except with respect to
any other matters that, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect, none of the Borrower or the
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability, (iii)
has received any request for information pursuant to any Environmental Law or
notice of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability.
(c) Since the Effective Date, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of the
------------------------------------
Borrower and the Subsidiaries is in compliance with all material laws,
regulations and orders of any arbitrator or Governmental Authority applicable to
it or its property and all indentures, agreements and other instruments binding
upon it or its property. No Default has occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. None of the
--------------------------------------
Borrower or the Subsidiary Loan Parties is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Borrower and the Subsidiaries
------
has timely filed or caused to be filed all Tax returns and reports required to
have been filed and has paid or caused to be paid all Taxes required to have
been paid by it, except (a) any Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.10. ERISA. Except as set forth on Schedule 3.10, no
------
ERISA Event has occurred or is reasonably expected to occur that, when taken
together with all other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Borrower and the Subsidiaries in an
aggregate amount exceeding (i) $3,000,000 in any year or (ii) $5,000,000 in all
periods. The present value of all accumulated benefit obligations under each
Plan (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed by more than $35,000,000
the fair market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed by more than $35,000,000 the fair market value of the
assets of all such underfunded Plans.
SECTION 3.11. Disclosure. The Borrower has disclosed to the
-----------
Lenders (or disclosed in a filing with the Court prior to the date hereof) all
agreements, instruments and corporate or other restrictions to which the
Borrower or any of the Subsidiaries is subject, and all matters known to any of
them, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. Neither the Disclosure Statement nor the
reports, financial statements, certificates or other information furnished,
taken as a whole, by or on behalf of any Loan Party to the Administrative Agent
or any Lender in connection with the negotiation of this Agreement or any other
Loan Document or delivered hereunder or thereunder (as modified or supplemented
by other information so furnished) contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
provided that, with respect to projected financial information the Borrower
--------
represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time.
SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth the name of,
-------------
and the ownership interest of the Borrower in, each Subsidiary and identifies
each Subsidiary that is a Subsidiary Loan Party, in each case as of the
Effective Date.
SECTION 3.13. Insurance. Schedule 3.13 sets forth a description
----------
of all insurance maintained by or on behalf of the Borrower and the Subsidiaries
as of the Effective Date. As of the Effective Date, all premiums in respect of
such insurance have been paid. The Borrower believes that the insurance
maintained by or on behalf of the Borrower and the Subsidiaries is adequate.
SECTION 3.14. Labor Matters. As of the Effective Date, there are
--------------
no strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending
or, to the knowledge of the Borrower, threatened. The hours worked by and
payments made to employees of the Borrower and the Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Federal,
state, local or foreign law dealing with such matters. All payments due from
the Borrower or any Subsidiary, or for which any claim may be made against the
Borrower or any Subsidiary, on account of wages and employee health and welfare
insurance and other benefits, have been paid or accrued as a liability on the
books of the Borrower or such Subsidiary. The consummation of the Transactions
will not give rise to any right of termination or right of renegotiation on the
part of any union under any collective bargaining agreement to which the
Borrower or any Subsidiary is bound.
SECTION 3.15. Solvency. On the Effective Date and at all times
---------
thereafter, (a) the fair value of the assets of (i) the Borrower, (ii) World
Kitchen, Inc. and (iii) the Loan Parties, on a consolidated basis, at a fair
valuation, will exceed its or their debts and liabilities, subordinated,
contingent or otherwise; (b) the present fair saleable value of the property of
(i) the Borrower, (ii) World Kitchen, Inc. and (iii) the Loan Parties, on a
consolidated basis, will be greater than the amount that it or they will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) (i) the Borrower, (ii) World Kitchen, Inc. and
(iii) the Loan Parties, on a consolidated basis, will be able to pay its or
their debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) (i) the Borrower,
(ii) World Kitchen, Inc. and (iii) the Loan Parties, on a consolidated basis,
will not have unreasonably small capital with which to conduct the business in
which it or they are engaged as such business is now conducted and is proposed
to be conducted following the Effective Date.
SECTION 3.16. Security Documents. (a) The Collateral Agreement is
-------------------
effective to create, for the ratable benefit of the holders of the Obligations,
a legal, valid and enforceable security interest in the Collateral (as defined
in the Collateral Agreement) and, when such Collateral is delivered to the
Collateral Agent and for so long as the Collateral Agent remains in possession
of such Collateral or when financing statements in appropriate form are filed in
the offices specified in the Perfection Certificate, as applicable, the security
interest created by the Collateral Agreement shall constitute a perfected first
priority security interest in all right, title and interest of the pledgor
thereunder in such Collateral, in each case prior and superior in right to any
other Person, other than with respect to the rights of Persons pursuant to Liens
permitted by Section 6.02.
(b) The Mortgages are effective to create, subject to the
exceptions listed in each title insurance policy covering such Mortgage, for the
ratable benefit of the holders of the Obligations, a legal, valid and
enforceable Lien on all the applicable mortgagor's right, title and interest in
and to the Mortgaged Properties thereunder, and when the Mortgages are filed in
the offices specified in the Perfection Certificate, the Lien created by each
Mortgage shall constitute a perfected Lien on all right, title and interest of
the applicable mortgagor in such Mortgaged Properties, in each case prior and
superior in right to any other Person, other than with respect to the rights of
Persons pursuant to Liens permitted by Section 6.02.
SECTION 3.17. Use of Proceeds. The proceeds of the Loans are to
----------------
be used solely for the purposes set forth in and permitted by Section 5.11.
None of the Borrower or the Subsidiaries is generally engaged in the business of
purchasing or selling Margin Stock or extending credit for the purpose of
purchasing or carrying Margin Stock.
ARTICLE IV
Conditions
----------
SECTION 4.01. Effective Date. The obligations of the Lenders to
---------------
make Loans hereunder shall not become effective until the date on which each of
the following conditions is satisfied (or waived in accordance with Section
9.02):
(a) The Administrative Agent (or its counsel) shall have received
from each party hereto either (i) a counterpart of this Agreement signed on
behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart
of this Agreement.
(b) The Administrative Agent shall have received a favorable
written opinion (addressed to the Administrative Agent, the Collateral
Agent and the Lenders and dated the Effective Date) of (i) Xxxxx Day,
counsel for the Borrower, substantially in the form of Exhibit B-1, and
(ii) local counsel in each jurisdiction where a Mortgaged Property is
located (if requested by the Administrative Agent), substantially in the
form of Exhibit B-2, and, in the case of each such opinion required by this
paragraph, covering such other matters relating to the Loan Parties, the
Loan Documents or the Transactions as the Administrative Agent or the
Required Lenders shall reasonably request. The Borrower hereby requests
such counsel to deliver such opinions.
(c) The Administrative Agent shall have received such documents
and certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of each
Loan Party, the authorization of the Transactions and any other legal
matters relating to the Loan Parties, the Loan Documents or the
Transactions, all in form and substance satisfactory to the Administrative
Agent and its counsel.
(d) The Administrative Agent shall have received a certificate,
dated the Effective Date and signed by the Chief Executive Officer or the
Chief Financial Officer of the Borrower (or an executive officer of the
Borrower performing a similar function), confirming compliance with the
conditions set forth in paragraphs (a) and (b) of Section 4.02.
(e) The Administrative Agent and the Lenders shall have received
all fees and other amounts due and payable on or prior to the Effective
Date, including, to the extent invoiced, reimbursement or payment of all
reasonable out-of-pocket expenses (including fees, charges and
disbursements of counsel) required to be reimbursed or paid by any Loan
Party hereunder or under any other Loan Document.
(f) The Collateral and Guarantee Requirement shall have been
satisfied and the Collateral Agent shall have received (i) a completed
Perfection Certificate dated the Effective Date and signed by a Financial
Officer or chief legal officer of the Borrower, together with all
attachments contemplated thereby, including the results of a search of the
Uniform Commercial Code (or equivalent) filings made with respect to the
Loan Parties in the jurisdictions contemplated by the Perfection
Certificate and copies of the financing statements (or similar documents)
disclosed by such search and evidence reasonably satisfactory to the
Collateral Agent that the Liens indicated by such financing statements (or
similar documents) are permitted by Section 6.02 or have been released,
(ii) evidence that the lockbox and concentration account arrangements
contemplated by the Collateral Agreement remain in effect, (iii) a copy of
the Intercreditor Agreement duly executed and delivered by each party
thereto and (iv) if requested by the Collateral Agent, satisfactory legal
opinions, title insurance policies and other documents reasonably requested
by the Administrative Agent with respect to the Mortgaged Property,
provided that clause (b) of the definition of Collateral and Guarantee
--------
Requirement need not be satisfied on the Effective Date with respect to the
Subsidiaries named in Sections 5.13(d) and (e).
(g) The Collateral Agent shall have received evidence that the
insurance required by Section 5.07 and the Security Documents is in effect.
(h) The Administrative Agent shall have received from the Borrower
(a) audited consolidated balance sheets and related statements of
operations, stockholders' equity and cash flows for the Borrower as of and
for the fiscal years ended December 31, 1999, December 31, 2000, and
December 31, 2001, and (b) unaudited consolidated balance sheets and
related statements of operations, stockholders' equity and cash flows for
the Borrower for (i) the fiscal quarters ended March 31, 2002, June 30,
2002, and September 30, 2002, and (ii) each fiscal month after the most
recent fiscal period for which financial statements were received by the
Lenders as described above and ended at least 45 days prior to the
Effective Date, in each case prepared in accordance with GAAP and, in the
case of the financial statements delivered pursuant to clause (b), which
financial statements shall not be materially inconsistent with the
financial statements or forecasts previously delivered to the Lenders. In
addition, the Lenders shall have received a pro forma consolidated balance
sheet for the Borrower as of the Effective Date after giving effect to the
Transactions, which shall not be materially inconsistent with the forecasts
previously provided to the Lenders.
(i) The Court shall have entered the Order, which shall be
satisfactory in form and substance to the Lenders and (i) each of the
Orders shall be in full force and effect, (ii) none of the Orders shall be
subject to any stay and there shall not have been entered by the Court any
reversal, modification or vacatur, in whole or in part, of the Orders,
(iii) all the conditions set forth in the Emergence Plan to confirmation of
the Emergence Plan, to the effective date of the Emergence Plan shall have
been satisfied or waived in accordance with the Emergence Plan, (iv) all
other requisite Governmental Authorities and third parties shall have
approved or consented to the Transactions and the other transactions
contemplated hereby or thereby to the extent required or deemed advisable
by the Administrative Agent and its counsel (and such approvals shall be in
full force and effect and all appeal periods with respect thereto shall
have expired) and (v) the Transactions shall be consummated in accordance
with the terms thereof as described in the Disclosure Statement.
(j) Simultaneously with or prior to the Effective Date, Old WKI
and the Old Subsidiaries shall have emerged from the Chapter 11 proceedings
and "substantial consummation" of the Emergence Plan (within the meaning of
Section 11.01(2) of the Bankruptcy Code) shall have occurred (without
giving effect to any waivers, amendments or other modifications to the
Emergence Plan not approved by the Lenders).
(k) The Lenders shall have received (i) a detailed business plan
of the Borrower and the Subsidiaries for the 2003 fiscal year and (ii)
financial projections for the Borrower and the Subsidiaries for each fiscal
year from 2003 through 2007 prepared in accordance with GAAP and in good
faith by the Borrower upon assumptions believed to be reasonable at the
time made and on the Effective Date, in each case in form and substance
reasonably satisfactory to the Administrative Agent.
(l) There shall be no litigation, arbitration or administrative
proceeding or consent decree that could reasonably be expected, after
giving effect to the Transactions and the other transactions contemplated
thereby, to have a Material Adverse Effect or have a material adverse
effect on the ability of the parties to consummate the Transactions and the
other transactions contemplated thereby.
(m) The consummation of the Transactions and the other
transactions contemplated thereby shall not (i) violate any applicable law,
statute, consent decree, rule or regulation, (ii) conflict with, or result
in a default or event of default under, any material agreement of the
Borrower or any Subsidiary or (iii) give rise to a right to require any
payment to be made by the Borrower or any Subsidiary or result in the
creation of any Lien (other than Permitted Liens) under any agreement
evidencing any indebtedness of the Borrower or any Subsidiary.
(n) There shall not have occurred a material adverse change in the
business, operations, properties, assets, condition (financial or
otherwise), liabilities (including contingent liabilities) or prospects of
the Borrower and the Subsidiaries, taken as a whole, since December 31,
2001, other than any material adverse change disclosed (i) in the Emergence
Plan or the Disclosure Schedule or (ii) on Schedule 4.01(n).
(o) The Lenders shall have received (i) at least ten Business Days
prior to the Effective Date, a draft certificate (the "Executory Contract
Certificate") prepared by the Chief Executive Officer or Chief Financial
Officer of the Borrower certifying (x) all material executory contracts to
be assumed by the Loan Parties pursuant to the Emergence Plan (or any other
motion filed with the Court) and (y) all material executory contracts to be
rejected by the Loan Parties pursuant to the Emergence Plan (or any other
motion filed with the Court) and (ii) at least three Business Days prior to
the Effective Date, the final version of the Executory Contract
Certificate, signed by the Chief Executive Officer or the Chief Financial
Officer of the Borrower, and the Required Lenders shall not have provided
written notice to the Borrower and the Administrative Agent at least one
Business Day prior to the Effective Date, of their objection to the
assumption of any of such contracts.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) not later than 5:00 p.m., New York City time, on
January 31, 2003.
SECTION 4.02. Each Credit Event. The obligation of each Lender to
------------------
make a Loan on the occasion of any Borrowing is subject to receipt of the
request therefor in accordance herewith and to the satisfaction of the following
conditions:
(a) The representations and warranties of each Loan Party set
forth in the Loan Documents shall be true and correct on and as of the date
of such Borrowing except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations and
warranties shall be true and correct as to such earlier date).
(b) At the time of and immediately after giving effect to such
Borrowing, no Default shall have occurred and be continuing. For purposes
of the foregoing, the term "Borrowing" shall not include the continuation
or conversion of Loans in which the aggregate amount of such Loans is not
being increased.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in paragraphs (a)
and (b) of this Section.
ARTICLE V
Affirmative Covenants
---------------------
Until the principal of and interest on each Loan and all fees payable
hereunder shall have been paid in full, the Borrower covenants and agrees with
the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The
-------------------------------------------
Borrower will furnish to the Administrative Agent and each Lender:
(a) within 90 days (or such shorter period as the SEC shall
specify for the filing of Annual Reports on Form 10-K) after the end of
each fiscal year of the Borrower, (i) its audited consolidated balance
sheet and related statements of operations, stockholders' equity and cash
flows as of the end of and for such year in comparative form the figures
for the previous fiscal year, all reported on by an independent public
accountant of recognized national standing (without a "going concern" or
like qualification or exception and without any qualification or exception
as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Borrower and the consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, provided that if the Borrower's annual report filed on Form 10-K
--------
with the SEC contains the information and report required in this
paragraph, delivery of such Form 10-K to the Administrative Agent and each
Lender shall be sufficient for purposes of satisfying the requirements of
this clause and (ii) unaudited consolidating balance sheets and related
statements of operations, stockholders' equity and cashflows for each
Subsidiary as of the end of and for such year;
(b) within 45 days (or such shorter period as the SEC shall
specify for the filing of Quarterly Reports on Form 10-Q) after the end of
each of the first three fiscal quarters of each fiscal year of the
Borrower, (i) its consolidated balance sheet and related statements of
operation, stockholders' equity and cash flows as of the end of such fiscal
quarter and the results of operations during such fiscal quarter and the
then elapsed portion of the fiscal year, (ii) a balance sheet and related
statements of operations, stockholders' equity and cash flows for (x) its
Foreign Subsidiaries, taken as a whole and (y) all other Subsidiaries,
taken as a whole as of the end of such fiscal quarter and the results of
operations during such fiscal quarter and the then elapsed portion of the
fiscal year and (iii) a certificate of a Financial Officer describing all
material intercompany loans, advances and other amounts eliminated in the
preparation of the financial statements described in clause (i), setting
forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end
of) the previous fiscal year, and, in the case of the financial statements
described above, certified by one of its Financial Officers as presenting
fairly in all material respects the financial condition and results of
operations of the Borrower and the consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes, provided
--------
that if the Borrower's quarterly report filed on Form 10-Q with the SEC
contains the information required in this paragraph, delivery of such Form
10-Q to the Administrative Agent and each Lender shall be sufficient for
purposes of satisfying the requirements of this clause;
(c) within 30 days after the end of each of the first two fiscal
months of each fiscal quarter of the Borrower, its consolidated balance
sheet and related statements of operations, stockholders' equity and cash
flows as of the end of and for such fiscal month and the then elapsed
portion of the fiscal year, all certified by one of its Financial Officers
as presenting in all material respects the financial condition and results
of operations of the Borrower and the consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;
(d) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of the
Borrower (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto, (ii) setting forth reasonably
detailed calculations demonstrating compliance with Sections 6.13, 6.14,
6.15, 6.16 and 6.17 and (iii) stating whether any change in GAAP or in the
application thereof has occurred since the date of the Borrower's audited
financial statements referred to in Section 3.04 and, if any such change
has occurred, specifying the effect of such change on the financial
statements accompanying such certificate;
(e) concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during
the course of their examination of such financial statements of any Default
(which certificate may be limited to the extent required by accounting
rules or guidelines);
(f) not later than 45 days following the commencement of each
fiscal year of the Borrower, a detailed consolidated budget for such fiscal
year (including a projected consolidated balance sheet and related
statements of projected operations and cash flow as of the end of and for
such fiscal year and setting forth the assumptions used for purposes of
preparing such budget) and, promptly when available, any significant
revisions of such budget, in each case prepared in good faith based upon
assumptions believed to be reasonable at the time made and at the time such
information is delivered to the Administrative Agent;
(g) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials filed
by the Borrower or any Subsidiary with the SEC or with any national
securities exchange, or distributed by the Borrower to its shareholders
generally, as the case may be;
(h) concurrently with any delivery to the lenders under the New
Revolving Credit Agreement pursuant to Section 5.01(f) thereof, copies of
all borrowing base certificates delivered in accordance with such
agreement; and
(i) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Borrower or any Subsidiary, or compliance with the terms
of any Loan Document, as the Administrative Agent or any Lender may
reasonably request.
SECTION 5.02. Notices of Material Events. The Borrower will
---------------------------
furnish to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Governmental Authority against or affecting
the Borrower or any Affiliate thereof that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower and the Subsidiaries in an aggregate
amount exceeding $1,000,000; and
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be in writing and shall be
accompanied by a statement of a Financial Officer or other executive officer of
the Borrower setting forth the details of the event or development requiring
such notice and any action taken or proposed to be taken by or on behalf of the
Borrower with respect thereto.
SECTION 5.03. Information Regarding Collateral. (a) The Borrower
---------------------------------
will furnish to the Collateral Agent prompt written notice of any change (i) in
any Loan Party's corporate name, (ii) in the jurisdiction of incorporation or
organization of any Loan Party, (iii) in any office in which any Loan Party
maintains books or records relating to Collateral owned by it, (iv) in any Loan
Party's identity or corporate structure or (v) in any Loan Party's taxpayer
identification number or organizational identification number. The Borrower
agrees not to effect or permit any change referred to in the preceding sentence
unless all filings have been made under the Uniform Commercial Code or otherwise
that are required in order for the Collateral Agent to continue at all times
following such change to have a valid, legal and perfected first priority
security interest in all the Collateral. The Borrower also agrees promptly to
notify the Collateral Agent if any material portion of the Collateral is damaged
or destroyed.
(b) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to clause (a) of
Section 5.01, the Borrower shall deliver to the Collateral Agent a certificate
of a Financial Officer and the chief legal officer of the Borrower (i) setting
forth the information required pursuant to Section 2 of the Perfection
Certificate or confirming that there has been no change in such information
since the date of the Perfection Certificate delivered on the Effective Date or
the date of the most recent certificate delivered pursuant to this Section and
(ii) certifying that all Uniform Commercial Code financing statements (including
fixture filings, as applicable) or other appropriate filings, recordings or
registrations, including all refilings, rerecordings and reregistrations,
containing a description of the Collateral have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
identified pursuant to clause (i) above to the extent necessary to protect and
perfect the security interests under the Collateral Agreement for a period of
not less than 18 months after the date of such certificate (except as noted
therein with respect to any continuation statements to be filed within such
period).
SECTION 5.04. Existence; Conduct of Business. The Borrower will,
-------------------------------
and will cause each of the Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence, good standing under the laws of the jurisdiction of its organization
and the rights, licenses, permits, privileges, franchises, patents, copyrights,
trademarks and trade names material to the conduct of its business, provided
--------
that the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03.
SECTION 5.05. Payment of Obligations. The Borrower will, and will
-----------------------
cause each of the Subsidiaries to, pay its Indebtedness and other obligations,
including Tax liabilities, before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP, (c) such contest effectively suspends collection of the contested
obligation and the enforcement of any Lien securing such obligation and (d) the
failure to make payment pending such contest could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
SECTION 5.06. Maintenance of Properties. The Borrower will, and
--------------------------
will cause each of the Subsidiaries to, keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear excepted.
SECTION 5.07. Insurance. The Borrower will, and will cause each
----------
of the Subsidiaries to, maintain, with financially sound and reputable insurance
companies (a) insurance in such amounts (with no greater risk retention) and
against such risks as are customarily maintained by companies of established
repute engaged in the same or similar businesses operating in the same or
similar locations and (b) all insurance required to be maintained pursuant to
the Security Documents. The Borrower will furnish to the Lenders, upon request
of the Collateral Agent, information in reasonable detail as to the insurance so
maintained.
SECTION 5.08. Casualty and Condemnation. The Borrower (a) will
--------------------------
furnish to the Collateral Agent and the Lenders prompt written notice of any
casualty or other insured damage to any material portion of any Collateral or
the commencement of any action or proceeding for the taking of any material
portion of any Collateral or any part thereof or interest therein under power of
eminent domain or by condemnation or similar proceeding and (b) will ensure that
the Net Proceeds of any such event (whether in the form of insurance proceeds,
condemnation awards or otherwise) are collected and applied in accordance with
the applicable provisions of the Security Documents.
SECTION 5.09. Books and Records; Inspection and Audit Rights. The
-----------------------------------------------
Borrower will, and will cause each of the Subsidiaries to, keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities. The
Borrower will, and will cause each of the Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.
SECTION 5.10. Compliance with Laws. The Borrower will, and will
---------------------
cause each of the Subsidiaries to, comply with all material laws, rules,
regulations and orders of any arbitrator or Governmental Authority applicable to
it or its property.
SECTION 5.11. Use of Proceeds. The proceeds of the Loans will be
----------------
used only for working capital and other general corporate purposes. No part of
the proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations T, U and X.
SECTION 5.12. Additional Subsidiaries. If any additional
------------------------
Subsidiary is formed or acquired after the Effective Date, the Borrower will,
within ten Business Days after such Subsidiary is formed or acquired, notify the
Collateral Agent and the Lenders thereof and cause the Collateral and Guarantee
Requirement to be satisfied with respect to such Subsidiary (if it is a
Subsidiary Loan Party) and with respect to any Equity Interest in or
Indebtedness of such Subsidiary owned by or on behalf of any Loan Party (subject
to the limitations set forth in clause (b) of the definition of the term
"Collateral and Guarantee Requirement").
SECTION 5.13. Further Assurances. (a) The Borrower will, and will
-------------------
cause each Subsidiary Loan Party to, execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements, fixture
filings, mortgages, deeds of trust and other documents), that may be required
under any applicable law, or that the Collateral Agent or the Required Lenders
may reasonably request, to cause the Collateral and Guarantee Requirement to be
and remain satisfied, all at the expense of the Loan Parties. The Borrower also
agrees to provide to the Collateral Agent, from time to time upon request,
evidence reasonably satisfactory to the Collateral Agent as to the perfection
and priority of the Liens created or intended to be created by the Security
Documents.
(b) If any material assets (including any real property or
improvements thereto or any interest therein) are acquired by the Borrower or
any Subsidiary Loan Party after the Effective Date (other than assets
constituting Collateral under the Collateral Agreement that become subject to
the Lien of the Collateral Agreement upon acquisition thereof), the Borrower
will notify the Collateral Agent and the Lenders thereof, and, if requested by
the Collateral Agent or the Required Lenders, the Borrower will cause such
assets to be subjected to a Lien securing the Obligations and will take, and
cause the Subsidiary Loan Parties to take, such actions as shall be necessary or
reasonably requested by the Collateral Agent to grant and perfect such Liens,
including actions described in paragraph (a) of this Section, all at the expense
of the Loan Parties.
(c) The Borrower will, and will cause each Subsidiary to, maintain
its current cash management system including, without limitation, its system of
deposit accounts, concentration accounts and similar accounts, unless any change
to such system has been previously approved in writing by the Administrative
Agent. In furtherance of and without limiting the foregoing, the Borrower will
continue to consolidate its cash in a concentration account with the
Administrative Agent.
(d) Not later than 30 days following the Effective Date, the
Borrower shall cause clause (b) of the definition of Collateral and Guarantee
Requirement to be satisfied with respect to the Equity Interests in (i) World
Kitchen Mexico, X.xx X.X. de CV, (ii) WKM, X.xx. X.X. de C.V. and (iii) World
Kitchen Canada (EHI).
(e) In the event that WKI do Brasil Ltda. has not been liquidated
or dissolved by December 31, 2003, the Borrower shall cause clause (b) of the
definition of Collateral and Guarantee Requirement to be satisfied with respect
to such Subsidiary by such date.
SECTION 5.14. Interest Rate Protection. As promptly as
-------------------------
practicable, and in any event within 180 days after the Effective Date, the
Borrower will enter into, and thereafter for a period of not less than five
years will maintain in effect, one or more interest rate protection agreements
on such terms and with such parties as shall be reasonably satisfactory to the
Administrative Agent, the effect of which shall be to fix or limit the interest
cost to the Borrower with respect to a percentage of the outstanding Long-Term
Indebtedness of the Borrower to be reasonably satisfactory to the Administrative
Agent.
SECTION 5.15. Environmental Laws. Except as disclosed on Schedule
-------------------
5.15, the Borrower will, and will cause each Subsidiary to, conduct its
operations and keep and maintain its property in compliance with all
Environmental Laws, except to the extent that the aggregate of all such
instances of noncompliance could not result in any costs, expenses or liability
in excess of $1,000,000 (excluding the amounts set forth on Schedule 5.15 with
respect to the items disclosed on such Schedule).
SECTION 5.16. Earnings of Foreign Subsidiaries. The Borrower will
---------------------------------
use its commercially reasonable efforts to cause each Subsidiary that is a
Foreign Subsidiary to repatriate to the Borrower the excess cash, if any,
generated by such Foreign Subsidiary on a regular basis.
ARTICLE VI
Negative Covenants
------------------
Until the principal of and interest on each Loan and all fees payable
hereunder have been paid in full, the Borrower covenants and agrees with the
Lenders that:
SECTION 6.01. Indebtedness; Certain Equity Securities. (a) The
----------------------------------------
Borrower will not, and will not permit any Subsidiary to, create, incur, assume
or permit to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) Indebtedness created under the New Revolving Credit
Agreement;
(iii) the New Senior Subordinated Notes;
(iv) Indebtedness existing on the date hereof and set forth in
Schedule 6.01, but not any extensions, renewals or replacements of any such
Indebtedness;
(v) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary, provided that
--------
Indebtedness of the Borrower or any Subsidiary Loan Party to any Subsidiary
that is not a Loan Party shall be subject to the limitation set forth in
Section 6.04(d);
(vi) Guarantees by the Borrower of Indebtedness of any Subsidiary
and by any Subsidiary of Indebtedness of the Borrower or any other
Subsidiary, provided that Guarantees by the Borrower or any Subsidiary Loan
--------
Party of Indebtedness of any Subsidiary that is not a Loan Party shall be
subject to Section 6.04(d);
(vii) Indebtedness of the Borrower or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or
capital assets, including Capital Lease Obligations and any Indebtedness
assumed in connection with the acquisition of any such assets or secured by
a Lien on any such assets prior to the acquisition thereof, and extensions,
renewals and replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof or result in an earlier maturity date
or decreased weighted average life thereof, provided that (A) such
--------
Indebtedness is incurred prior to or within 90 days after such acquisition
or the completion of such construction or improvement, (B) the aggregate
principal amount of Indebtedness permitted by this clause (vii) shall not
exceed $25,000,000 at any time outstanding and (C) the aggregate principal
amount of Indebtedness permitted by this clause (vii) incurred during any
fiscal year of the Borrower shall not exceed $10,000,000;
(viii) Indebtedness incurred in connection with interest rate
protection agreements required by Section 5.14;
(ix) Indebtedness in an aggregate principal amount not exceeding
$3,000,000 at any time outstanding incurred in connection with insurance
premium financings;
(x) Indebtedness of the Borrower or any Subsidiary represented by
surety or performance bonds or banker's acceptances in an aggregate amount
not to exceed $5,000,000 at any time outstanding; and
(xi) other unsecured Indebtedness in an aggregate principal amount
not exceeding $10,000,000 at any time outstanding, provided that the
--------
aggregate principal amount of such Indebtedness of Subsidiaries permitted
pursuant to this clause (xi) that are not Loan Parties shall not exceed
$2,500,000 at any time outstanding.
(b) The Borrower will not, and will not permit any Subsidiary to,
issue any preferred stock or other preferred Equity Interests.
SECTION 6.02. Liens. The Borrower will not, and will not permit
------
any Subsidiary to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except:
(a) Liens created under the Loan Documents;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of the Borrower or any
Subsidiary existing on the date hereof and set forth in Schedule 6.02,
provided that (i) such Lien shall not apply to any other property or asset
--------
of the Borrower or any Subsidiary and (ii) such Lien shall secure only
those obligations that it secures on the date hereof;
(d) any Lien existing on any property, asset or shares of capital
stock prior to the acquisition thereof by the Borrower or any Subsidiary or
existing on any property or asset of any Person that becomes a Subsidiary
after the date hereof prior to the time such Person becomes a Subsidiary,
provided that (i) such Lien is not created in contemplation of or in
--------
connection with such acquisition or such Person becoming a Subsidiary, as
the case may be, (ii) such Lien shall not apply to any other property or
assets of the Borrower or any Subsidiary and (iii) such Lien shall secure
only those obligations that it secures on the date of such acquisition or
the date such Person becomes a Subsidiary, as the case may be;
(e) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary, provided that (i) such security
--------
interests secure Indebtedness permitted by clause (vii) of Section 6.01(a),
(ii) such security interests and the Indebtedness secured thereby are
incurred prior to or within 90 days after such acquisition or the
completion of such construction or improvement, (iii) the Indebtedness
secured thereby does not exceed 90% of the cost of acquiring, constructing
or improving such fixed or capital assets and (iv) such security interests
shall not apply to any other property or assets of the Borrower or any
Subsidiary;
(f) Liens created under the New Revolving Credit Agreement and the
New Senior Subordinated Notes Documents, provided that the Intercreditor
--------
Agreement has been executed by the parties thereto and delivered to the
Administrative Agent;
(g) Liens securing Indebtedness incurred in connection with
insurance premium financings permitted by clause (ix) of Section 6.01,
provided that the aggregate value of the assets secured in connection with
--------
any insurance premium financing does not exceed the amount of the premiums
for such insurance premium financing; and
(h) Liens on the Excluded Inventory.
SECTION 6.03. Fundamental Changes. (a) The Borrower will not, and
--------------------
will not permit any Subsidiary to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
liquidate or dissolve, except that, if at the time thereof and immediately after
giving effect thereto no Default shall have occurred and be continuing (i) any
Subsidiary may merge into the Borrower in a transaction in which the Borrower is
the surviving corporation, (ii) any Subsidiary may merge into any other
Subsidiary in a transaction in which the surviving entity is a Subsidiary (and,
if any party to such merger is a Subsidiary Loan Party, the surviving entity is
a Subsidiary Loan Party), (iii) any Subsidiary (other than a Subsidiary Loan
Party) may liquidate or dissolve if the Borrower determines in good faith that
such liquidation or dissolution is in the best interests of the Borrower and is
not materially adverse to the Lenders and (iv) the Subsidiaries listed on
Schedule 6.03 may be liquidated or dissolved prior to December 31, 2003,
provided that any such merger involving a Person that is not a wholly-owned
--------
Subsidiary immediately prior to such merger shall not be permitted unless also
permitted by Section 6.04.
(b) The Borrower will not, and will not permit any Subsidiary to,
engage to any material extent in any business other than businesses engaged in
by the Borrower and the Subsidiaries on the Effective Date or any related,
ancillary or complementary businesses.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
--------------------------------------------
Acquisitions. The Borrower will not, and will not permit any Subsidiary to,
-------------
purchase, hold or acquire (including pursuant to any merger or consolidation
with any Person that was not a wholly-owned Subsidiary prior to such merger or
consolidation) any Equity Interests in or evidences of indebtedness or other
securities (including any option, warrant or other right to acquire any of the
foregoing) of, make or permit to exist any loans or advances to, Guarantee any
obligations of, or make or permit to exist any investment or any other interest
in, any other Person, or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person constituting a business
unit, except:
(a) pursuant to the Reorganization;
(b) Permitted Investments;
(c) investments existing on the date hereof and set forth on
Schedule 6.04(c);
(d) investments after the Effective Date by the Borrower and the
Subsidiaries in Equity Interests in their respective Subsidiaries, provided
--------
that (i) any such Equity Interests held by a Loan Party shall be pledged
pursuant to the Collateral Agreement (subject to the limitations set forth
in clause (b) of the definition of the term "Collateral and Guarantee
Requirement") and (ii) the aggregate amount of such investments by Loan
Parties in, and loans and advances by Loan Parties to, and Guarantees by
Loan Parties of Indebtedness of, Subsidiaries that are not Loan Parties,
pursuant to clauses (e) and (f) below, shall not exceed (x) $2,000,000
during fiscal year 2003 and (y) $4,000,000 during any fiscal year
thereafter;
(e) loans or advances made by the Borrower to any Subsidiary and
made by any Subsidiary to the Borrower or any other Subsidiary (other than
trade credits that constitute current accounts payable incurred in the
ordinary course of business), provided that (i) any such loans and advances
--------
made after the Effective Date by a Loan Party shall be evidenced by a
promissory note pledged pursuant to the Collateral Agreement and (ii) the
aggregate amount of such loans and advances made by Loan Parties to
Subsidiaries that are not Loan Parties shall be subject to the limitation
set forth in clause (d) above;
(f) Guarantees constituting Indebtedness permitted by Section
6.01, provided that the aggregate principal amount of Indebtedness of
--------
Subsidiaries that are not Loan Parties that is Guaranteed after the
Effective Date by any Loan Party shall be subject to the limitation set
forth in clause (d) above;
(g) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
and
(h) payroll, travel and similar advances to employees of the
Borrower or any Subsidiary not to exceed $250,000 at any time outstanding.
SECTION 6.05. Asset Sales. The Borrower will not, and will not
------------
permit any Subsidiary to, sell, transfer, lease or otherwise dispose of any
asset, including any Equity Interest owned by it, nor will the Borrower permit
any Subsidiary to issue any additional Equity Interest in such Subsidiary,
except:
(a) sales of inventory, used or surplus equipment and Permitted
Investments in the ordinary course of business;
(b) sales, transfers and other dispositions to the Borrower or a
Subsidiary, provided that any such sales, transfers or dispositions
--------
involving a Subsidiary that is not a Loan Party shall be made in compliance
with Section 6.09;
(c) sales, transfers and other dispositions that constitute
Restricted Payments permitted by Section 6.08;
(d) sales, transfers and other dispositions set forth on Schedule
6.05(d), provided that such sales, transfers or dispositions are
--------
consummated no later than December 31, 2003;
(e) sales, transfers and other dispositions of assets (other than
Equity Interests in a Subsidiary) that are not permitted by clause (a)
through (d) of this Section, provided that the fair market value of all
--------
assets sold, transferred or otherwise disposed of in reliance on this
clause (e) does not exceed (i) $2,000,000 in any fiscal year and (ii)
$8,000,000 in the aggregate; and
(f) sales, transfers and other dispositions of assets (other than
Equity Interests in a Subsidiary) that are not permitted by any other
clause of this Section, provided that (i) the aggregate fair market value
--------
of all assets sold, transferred or otherwise disposed of in reliance upon
this clause (f) shall not exceed $25,000,000 in the aggregate and (ii) the
Borrower shall prepay the Loans in accordance with Section 2.05.
provided, further, that all sales, transfers, leases and other dispositions
-------- -------
permitted by this Section 6.05 (other than those permitted by clause (b) above)
shall be made for fair value and solely for cash consideration.
SECTION 6.06. Sale and Leaseback Transactions. The Borrower will
--------------------------------
not, and will not permit any Subsidiary to, enter into any arrangement, directly
or indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred.
SECTION 6.07. Swap Agreements. The Borrower will not, and will
----------------
not permit any Subsidiary to, enter into any Swap Agreement, other than (a) Swap
Agreements required by Section 5.14 and (b) Swap Agreements entered into in the
ordinary course of business to hedge or mitigate risks to which the Borrower or
any Subsidiary is exposed in the conduct of its business or the management of
its liabilities.
SECTION 6.08. Restricted Payments; Certain Payments of
----------------------------------------
Indebtedness. (a) The Borrower will not, and will not permit any Subsidiary to,
------------
declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, or incur any obligation (contingent or otherwise) to do so, except (i)
the Borrower may declare and pay dividends with respect to its capital stock
payable solely in additional shares of its common stock, (ii) Subsidiaries may
declare and pay dividends ratably with respect to their capital stock and (iii)
the Borrower may make Restricted Payments, not exceeding $2,500,000 during any
fiscal year, pursuant to and in accordance with stock option plans or other
benefit plans for management or employees of the Borrower and the Subsidiaries
as in effect on the date of this Agreement without giving effect to any
amendments thereto.
(b) The Borrower will not, and will not permit any Subsidiary to,
make or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash, securities or other property) of or in respect of
principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancelation or termination of any Indebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal
payments as and when due in respect of any Indebtedness permitted by
Section 6.01, other than payments in respect of the New Senior Subordinated
Notes prohibited by the subordination provisions thereof;
(iii) refinancings of Indebtedness to the extent permitted by
Section 6.01;
(iv) payment of secured Indebtedness that becomes due as a result
of the voluntary sale or transfer of the property or assets securing such
Indebtedness; and
(v) prepayment of Indebtedness under the New Revolving Loan Credit
Agreement.
SECTION 6.09. Transactions with Affiliates. The Borrower will
-----------------------------
not, and will not permit any Subsidiary to, sell, lease or otherwise transfer
any property or assets to, or purchase, lease or otherwise acquire any property
or assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) transactions in the ordinary course of business that are
at prices and on terms and conditions not materially less favorable to the
Borrower or such Subsidiary than could be obtained on an arm's-length basis from
unrelated third parties, (b) sales of Inventory by (i) the Borrower or a
Subsidiary Loan Party to (ii) a Subsidiary that is not a Loan Party in the
ordinary course of business that are at prices and on terms and conditions not
materially less favorable to the Borrower or such Subsidiary Loan Party than
could be obtained on an arm's length basis from unrelated third parties, (c)
transactions between or among the Borrower and the Subsidiaries not involving
any other Affiliate, provided that any transaction between or among (x) a Loan
--------
Party and (y) a Subsidiary that is not a Loan Party shall be on terms and
conditions not materially less favorable to the Loan Party than could be
obtained in an arms' length basis from unrelated third parties, (d) any
Restricted Payment permitted by Section 6.08, (e) advances to employees of the
Borrower or any Subsidiary permitted by Section 6.04(h) and (f) any transaction
listed on Schedule 6.09.
SECTION 6.10. Restrictive Agreements. The Borrower will not, and
-----------------------
will not permit any Subsidiary to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of the Borrower or any Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets, or
(b) the ability of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances
to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the
Borrower or any other Subsidiary, provided that (i) the foregoing shall not
--------
apply to restrictions and conditions imposed (w) by law, (x) by any Loan
Document, (y) by the New Revolving Credit Agreement or (z) by the New Senior
Subordinated Notes Documents, (ii) the foregoing shall not apply to restrictions
and conditions existing on the date hereof identified on Schedule 6.10 (but
shall apply to any extension or renewal of, or any amendment or modification
expanding the scope of, any such restriction or condition), (iii) the foregoing
shall not apply to customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is to be sold and
such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by Section 6.01 if such restrictions or conditions apply
only to the property or assets securing such Indebtedness and (v) clause (a) of
the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.
SECTION 6.11. Amendment of Material Documents. The Borrower will
--------------------------------
not, and will not permit any Subsidiary to, amend, modify or waive any of its
rights under (a) the New Senior Subordinated Notes Documents, (b) the New
Revolving Credit Agreement, (c) its certificate of incorporation, by-laws or
other organizational documents, (d) documents evidencing any Material
Indebtedness or (e) any material agreement, contract, instrument or document
(including any joint venture agreement) to the extent such amendment,
modification or waiver would reasonably be expected to be adverse to the
Lenders.
SECTION 6.12. Retail Stores. The Borrower will not, and will not
--------------
permit any Subsidiary to, open any new retail store.
SECTION 6.13. Capital Expenditures. The Borrower will not permit
---------------------
the aggregate amount of Capital Expenditures in respect of any annual period set
forth below to exceed the amount set forth in the table below opposite such
annual period (the "Permitted Amount"):
Annual Period Amount
------------------------------------ -----------
January 1, 2003 to December 31, 2003 $28,000,000
January 1, 2004 to December 31, 2004 $28,000,000
January 1, 2005 to December 31, 2005 $28,000,000
January 1, 2006 to December 31, 2006 $28,000,000
January 1, 2007 to December 31, 2007 $28,000,000
SECTION 6.14. Leverage Ratio. The Borrower will not permit the
---------------
Leverage Ratio as of any date during any period set forth below to exceed the
ratio set forth opposite such period:
Period Ratio
------------------------------------ -------
January 31, 2003 to March 31, 2003 6.8:1.0
April 1, 2003 to June 30, 2003 6.8:1.0
July 1, 2003 to September 30, 2003 6.8:1.0
October 1, 2003 to December 31, 2003 6.8:1.0
January 1, 2004 to March 31, 2004 6.8:1.0
April 1, 2004 to June 30, 2004 6.8:1.0
July 1, 2004 to September 30, 2004 6.8:1.0
October 1, 2004 to December 31, 2004 6.8:1.0
January 1, 2005 to March 31, 2005 6.8:1.0
April 1, 2005 to June 30, 2005 6.4:1.0
Period Ratio
------------------------------------ -------
July 1, 2005 to September 30, 2005 6.4:1.0
October 1, 2005 to December 31, 2005 6.4:1.0
January 1, 2006 to March 31, 2006 6.4:1.0
April 1, 2006 to June 30, 2006 6.0:1.0
July 1, 2006 to September 30, 2006 6.0:1.0
October 1, 2006 to December 31, 2006 6.0:1.0
January 1, 2007 to March 31, 2007 6.0:1.0
April 1, 2007 to June 30, 2007 5.6:1.0
July 1, 2007 to September 30, 2007 5.6:1.0
October 1, 2007 to December 31, 2007 5.6:1.0
January 1, 2008 to March 31, 2008 5.6:1.0
SECTION 6.15. Fixed Charge Coverage Ratio. The Borrower will not
----------------------------
permit the ratio of (a) Consolidated EBITDA to (b) Consolidated Fixed Charges,
in each case for any date during any period of four consecutive fiscal quarters
ending on any date set forth below, to be less than the ratio set forth below
opposite such period:
Period Ratio
------------------ -------
March 31, 2003 1.2:1.0
June 30, 2003 1.2:1.0
September 30, 2003 1.2:1.0
December 31, 2003 1.2:1.0
March 31, 2004 1.2:1.0
June 30, 2004 1.4:1.0
September 30, 2004 1.4:1.0
December 31, 2004 1.4:1.0
March 31, 2005 1.4:1.0
June 30, 2005 1.4:1.0
September 30, 2005 1.4:1.0
December 31, 2005 1.4:1.0
March 31, 2006 1.4:1.0
June 30, 2006 1.4:1.0
September 30, 2006 1.4:1.0
December 31, 2006 1.4:1.0
Period Ratio
------------------ -------
March 31, 2007 1.4:1.0
June 30, 2007 1.4:1.0
September 30, 2007 1.4:1.0
December 31, 2007 1.4:1.0
March 31, 2008 1.4:1.0
SECTION 6.16. Minimum Consolidated EBITDA. The Borrower will not
----------------------------
permit Consolidated EBITDA for any period of four consecutive fiscal quarters
ending on any date set forth below to be less than the amount set forth below
opposite such date:
Date Amount
------------------ -----------
March 31, 2003 $66,800,000
June 30, 2003 $67,500,000
September 30, 2003 $71,200,000
December 31, 2003 $66,800,000
March 31, 2004 $67,300,000
June 30, 2004 $67,900,000
September 30, 2004 $69,700,000
December 31, 2004 $72,200,000
March 31, 2005 $72,700,000
June 30, 2005 $73,100,000
September 30, 2005 $74,700,000
December 31, 2005 $76,900,000
March 31, 2006 $77,300,000
June 30, 2006 $77,800,000
September 30, 2006 $79,100,000
December 31, 2006 $81,100,000
March 31, 2007 $81,500,000
June 30, 2007 $82,000,000
September 30, 2007 $83,300,000
December 31, 2007 $85,300,000
SECTION 6.17. Maximum Inventory. The Borrower will not permit the
------------------
aggregate value of all Inventory owned by the Borrower and the Subsidiaries and
located at the retail stores operated by the Borrower and the Subsidiaries on
any date set forth below to exceed the amount set forth opposite such date:
Date Amount
------------------ -----------
June 30, 2003 $17,000,000
September 30, 2003 $16,000,000
December 31, 2003 $15,000,000
March 31, 2004 $14,000,000
June 30, 2004 $14,000,000
September 30, 2004 $16,000,000
December 31, 2004 $14,000,000
March 31, 2005 $14,000,000
June 30, 2005 $14,000,000
September 30, 2005 $16,000,000
December 31, 2005 $14,000,000
March 31, 2006 $14,000,000
June 30, 2006 $14,000,000
September 30, 2006 $16,000,000
December 31, 2006 $14,000,000
March 31, 2007 $14,000,000
June 30, 2007 $14,000,000
September 30, 2007 $16,000,000
December 31, 2007 $14,000,000
ARTICLE VII
Events of Default
-----------------
If any of the following events ("Events of Default") shall occur:
-----------------
(a) the Borrower shall fail to pay any principal of any Loan when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this Agreement or any other Loan Document, when
and as the same shall become due and payable, and such failure shall
continue unremedied for a period of five days;
(c) any representation or warranty made or deemed made by or on
behalf of the Borrower or any Subsidiary in or in connection with any Loan
Document or any amendment or modification thereof or waiver thereunder, or
in any report, certificate, financial statement or other document furnished
pursuant to or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, shall prove to have been
incorrect when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement (i) contained in (A) Sections 2.05(b) or (c), 5.02,
5.04 (with respect to the existence of the Borrower), 5.11 or 5.13(c), (d)
or (e), (B) in Article VI, (C) in Sections 4.05(i) or 4.06 of the
Collateral Agreement or (D) in the Lockbox Agreement or (ii) contained in
Section 5.01(f) and, in the case of this clause (ii), such default shall
continue unremedied for a period of five days;
(e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b) or (d) of this Article), and such failure
shall continue unremedied for a period of 20 days after notice thereof from
the Administrative Agent to the Borrower (which notice will be given at the
request of any Lender);
(f) the Borrower or any Subsidiary shall fail to make any
scheduled payment (whether of principal or interest and regardless of
amount) in respect of any Material Indebtedness, when and as the same shall
become due and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables
or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become
due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity, provided that this clause (g)
--------
shall not apply to secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such
Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Borrower or any Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Subsidiary or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(i) the Borrower or any Subsidiary shall (i) voluntarily commence
any proceeding or file any petition seeking liquidation, reorganization or
other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Article, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Subsidiary or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors
or (vi) take any action for the purpose of effecting any of the foregoing;
(j) the Borrower or any Subsidiary shall become unable, admit in
writing its inability or fail generally to pay its debts as they become
due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $5,000,000 shall be rendered against the Borrower, any
Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of the Borrower or any
Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of the
Borrower and the Subsidiaries in an aggregate amount exceeding (i)
$3,000,000 in any year or (ii) $5,000,000 for all periods;
(m) (i) any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted by any Loan Party not to
be, a valid and perfected Lien on any Collateral, with the priority
required by the applicable Security Document, except (A) as a result of the
sale or other disposition of the applicable Collateral in a transaction
permitted under the Loan Documents or (B) as a result of the Collateral
Agent's failure to maintain possession of any stock certificates,
promissory notes or other instruments delivered to it under the Collateral
Agreement or (ii) any Guarantee purported to be created under any Security
Document shall cease to be, or shall be asserted by any Loan Party not to
be, a valid and enforceable obligation of the applicable Loan Party;
(n) a Change in Control shall occur; or
(o) any Order shall be stayed, reversed, modified or vacated in
whole or in part;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, declare the
Loans then outstanding to be due and payable in whole (or in part, in which case
any principal not so declared to be due and payable may thereafter be declared
to be due and payable), and thereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder, shall become due and
payable immediately, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower; and in case of any event
with respect to the Borrower described in clause (h) or (i) of this Article, the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
ARTICLE VIII
The Administrative Agent and The Collateral Agent
-------------------------------------------------
Each of the Lenders hereby irrevocably appoints the Administrative
Agent as its agent and authorizes the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing by the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.02), and (c) except as
expressly set forth in the Loan Documents, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to the Borrower or any Subsidiary that is communicated
to or obtained by the bank serving as Administrative Agent or any of its
Affiliates in any capacity. The Administrative Agent shall not be liable for
any action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02) or in the absence
of its own gross negligence or wilful misconduct. The Administrative Agent
shall not be deemed to have knowledge of any Default unless and until written
notice thereof is given to the Administrative Agent by the Borrower or a Lender,
and the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with any Loan Document, (ii) the contents of any certificate,
report or other document delivered thereunder or in connection therewith, (iii)
the performance or observance of any of the covenants, agreements or other terms
or conditions set forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article IV or elsewhere in any Loan Document, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of each Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor the
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a bank with an office in New York,
New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
The provisions of this Article applicable to the Administrative Agent
shall also be applicable to the Collateral Agent, mutatis mutandis.
------- --------
ARTICLE IX
Miscellaneous
-------------
SECTION 9.01. Notices. Except in the case of notices and other
--------
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at WKI Holding Company, Inc., 00000
Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxx, XX 00000, Attention of General Counsel
(Telecopy No. (000) 000-0000);
(b) if to the Administrative Agent, to JPMorgan Chase Bank, Loan
and Agency Services Group, One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention of Xxxxxxxx Xxxxxxxx (Telecopy No. (212)
552-7500), with a copy to JPMorgan Chase Bank, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention of Xxxxxxx Xxxxxxxx (Telecopy No. (212)
270-0453);
(c) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
--------------------
Administrative Agent, the Collateral Agent or any Lender in exercising any right
or power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the
Collateral Agent and the Lenders hereunder and under the other Loan Documents
are cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of any Loan Document or consent to
any departure by any Loan Party therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) of this Section, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the
making of a Loan shall not be construed as a waiver of any Default, regardless
of whether the Administrative Agent, the Collateral Agent or any Lender may have
had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent and the Loan Party or Loan Parties that are
parties thereto, in each case with the consent of the Required Lenders, provided
--------
that no such agreement shall (i) reduce the principal amount of any Loan or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (ii) postpone the
final maturity of any Loan, or any date for the payment of any interest or fees
payable hereunder, or reduce the amount of, waive or excuse any such scheduled
payment, without the written consent of each Lender affected thereby, (iii)
change Section 2.12(b) or (c) in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each Lender, (iv)
change any of the provisions of this Section or the percentage set forth in the
definition of the term "Required Lenders" or any other provision of any Loan
Document specifying the number or percentage of Lenders required to waive, amend
or modify any rights thereunder or make any determination or grant any consent
thereunder, without the written consent of each Lender, (v) release any
Subsidiary Loan Party from its Guarantee under the Collateral Agreement (except
as expressly provided in the Collateral Agreement), or limit its liability in
respect of such Guarantee, without the written consent of each Lender or (vi)
release all or substantially all of the Collateral from the Liens of the
Security Documents, without the written consent of each Lender; provided,
---------
further that (A) no such agreement shall amend, modify or otherwise affect the
-------
rights or duties of the Administrative Agent or the Collateral Agent without the
prior written consent of the Administrative Agent or the Collateral Agent, as
the case may be. Notwithstanding the foregoing, any provision of this Agreement
may be amended by an agreement in writing entered into by the Borrower, the
Required Lenders and the Administrative Agent if at the time such amendment
becomes effective, each Lender not consenting thereto receives payment in full
of the principal of and interest accrued on each Loan made by it and all other
amounts owing to it or accrued for its account under this Agreement.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The
-----------------------------------
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, the Collateral Agent and their respective Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent and the Collateral Agent, in connection with the
syndication of the credit facilities provided for herein, the preparation and
administration of the Loan Documents or any amendments, modifications or waivers
of the provisions thereof (whether or not the transactions contemplated hereby
or thereby shall be consummated), (ii) all out-of-pocket expenses incurred by
the Administrative Agent, the Collateral Agent or any Lender, including the
fees, charges and disbursements of any counsel for the Administrative Agent or
any Lender, in connection with the enforcement or protection of its rights in
connection with the Loan Documents, including its rights under this Section, or
in connection with the Loans made hereunder, including all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such Loans and (iii) all fees, charges and expenses relating to the
engagement of Xxxxxxx, Xxxxxxxx & Xxxxxx, LLC, pursuant to the Letter Agreement
dated as of December 17, 2002.
(b) The Borrower shall indemnify the Administrative Agent, the
Collateral Agent and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "Indemnitee") against, and hold each
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Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of any
Loan Document or any other agreement or instrument contemplated hereby, the
performance by the parties to the Loan Documents of their respective obligations
thereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or the use of the proceeds therefrom, (iii)
any actual or alleged presence or Release of Hazardous Materials on or from any
Mortgaged Property or any other property currently or formerly owned or operated
by the Borrower or any of the Subsidiaries, or any Environmental Liability
related in any way to the Borrower or any of the Subsidiaries, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto, provided that such
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indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent or the Collateral Agent
under paragraph (a) or (b) of this Section, each Lender severally agrees to pay
to the Administrative Agent or the Collateral Agent as the case may be, such
Lender's pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that the unreimbursed expense or indemnified loss, claim, damage,
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liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent or the Collateral Agent in its capacity as
such. For purposes hereof, a Lender's "pro rata share" shall be determined
based upon its share of the sum of the total Exposures at the time.
(d) To the extent permitted by applicable law, the Borrower shall
not assert, and hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any agreement or instrument contemplated hereby,
the Transactions, any Loan or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of this
-----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that the
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Collateral Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of the Loans at the time owing to it), provided that (i) except in the
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case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund,
each of the Borrower and the Administrative Agent must give their prior written
consent to such assignment (which consent shall not be unreasonably withheld),
(ii) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender's Loans,
the amount of the Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$1,000,000 unless each of the Borrower and the Administrative Agent otherwise
consent, (iii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement, (iv) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,500, (v) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire and (vi) in the case of an assignment to a CLO, the assigning
Lender shall retain the sole right to approve any amendment, modification or
waiver of any provision of this Agreement, provided, in the case of this clause
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(vi), that the Assignment and Acceptance between such Lender and such CLO may
provide that such Lender shall not, without the consent of such CLO, agree to
any amendment, modification or waiver described in the first proviso to Section
9.02(b) that affects such CLO; provided, further, that any consent of the
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Borrower otherwise required under this paragraph shall not be required if a
Default has occurred and is continuing. Subject to acceptance and recording
thereof pursuant to paragraph (d) of this Section, from and after the effective
date specified in each Assignment and Acceptance the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such Assignment
and Acceptance, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.09, 2.10, 2.11 and 9.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent
of the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and principal amount of
the Loans and owing to each Lender pursuant to the terms hereof from time to
time (the "Register"). The entries in the Register shall be conclusive, and the
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Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
-----------
under this Agreement (including all or a portion of the Loans owing to it),
provided that (i) such Lender's obligations under this Agreement shall remain
--------
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce the Loan Documents and to approve any amendment,
modification or waiver of any provision of the Loan Documents, provided that
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such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
Subject to paragraph (f) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.09, 2.10 and 2.11 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 9.08
as though it were a Lender, provided such Participant agrees to be subject to
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Section 2.12(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.09 or 2.11 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.11 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
2.11(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest, provided that no such pledge
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or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
SECTION 9.05. Survival. All covenants, agreements,
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representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Administrative
Agent or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid. The provisions of Sections 2.09, 2.10,
2.11 and 9.03 and Article VIII shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans or the termination of this Agreement or any provision
hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This
-----------------------------------------
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and any separate letter agreements with respect to fees
payable to the Administrative Agent constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and the
Collateral Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held
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to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have
----------------
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized 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 obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Borrower against any of and all the obligations of the Borrower now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
--------------------------------------------------
Process. (a) This Agreement shall be construed in accordance with and governed
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by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to any Loan Document, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such New York State court or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right that
the Administrative Agent, the Collateral Agent or any Lender may otherwise have
to bring any action or proceeding relating to this Agreement or any other Loan
Document against the Borrower or its properties in the courts of any
jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
---------------------
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the
---------
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative Agent,
----------------
the Collateral Agent, and the Lenders agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed (a)
to its and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (g) with the consent of
the Borrower or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent, the Collateral Agent or any Lender on a
nonconfidential basis from a source other than the Borrower. For the purposes
of this Section, "Information" means all information received from the Borrower
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relating to the Borrower or its business, other than any such information that
is available to the Administrative Agent or any Lender on a nonconfidential
basis prior to disclosure by the Borrower, provided that, in the case of
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information received from the Borrower after the date hereof, such information
is clearly identified at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding anything
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herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts that are treated as interest
on such Loan under applicable law (collectively the "Charges"), shall exceed the
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maximum lawful rate (the "Maximum Rate") that may be contracted for, charged,
------------
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 9.14. Intercreditor Agreement. Each Lender hereby
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appoints JPMorgan Chase Bank to act as Collateral Agent under this Agreement,
the Intercreditor Agreement and the Security Documents, and authorizes the
Collateral Agent to execute the Intercreditor Agreement in the name of and for
the benefit of the Lenders. By making the Loans and accepting the obligations
of the Borrower hereunder, each Lender hereby expressly accepts and agrees to
the terms and provisions of the Intercreditor Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
WKI HOLDING COMPANY, INC.,
by /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: President & CEO
JPMORGAN CHASE BANK, individually and
as Administrative Agent and Collateral
Agent,
by /s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
