EXHIBIT 10.9
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of the 30th day of June, 2002 (this
"Agreement"), is made among LASON, INC., a Delaware corporation with its
principal offices in Troy, Michigan (the "Borrower"), the banks and financial
institutions listed on the signature pages hereto or that become parties hereto
after the date hereof (collectively, the "Lenders"), and BANK ONE, NA, with its
main office in Chicago, Illinois ("Bank One"), as successor by merger to Bank
One, Michigan, as agent for the Lenders (in such capacity, the "Agent").
RECITALS
WHEREAS, the Borrower, certain subsidiaries of the Borrower, the
Lenders and the Agent are parties to that certain Third Amended and Restated
Credit Agreement dated as of August 16, 1999, pursuant to which the Lenders
advanced certain credit to the Borrower;
WHEREAS, on December 5, 2001 (the "Petition Date"), the Borrower,
together with its Subsidiaries Electronic Graphic Image Systems, Inc., Fort Xxxx
Escrow Services, Inc., Fort Xxxx Secured Data, Inc., Lason International, Inc.,
Lason Services, Inc., Lason Systems, Inc., Lason Systems PMC, Inc., MR Data
Management, Inc. and MR Technologies, Inc. (collectively with the Borrower, the
"Debtors"), filed, with the United States Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court"), voluntary petitions for relief under chapter
11 of the Bankruptcy Code;
WHEREAS, on April 30, 2002, the Bankruptcy Court entered an order
converting the chapter 11 cases of Fort Xxxx Escrow Services, Inc. and Fort Xxxx
Secured Data, Inc. (the "Chapter 7 Subsidiaries") to cases under Chapter 7 of
the Bankruptcy Code;
WHEREAS, the Debtors filed a First Amended Joint Plan of Reorganization
of Lason, Inc. and its Subsidiary Debtors with the Bankruptcy Court (the "Plan
of Reorganization") and the Plan of Reorganization has been approved by the
Bankruptcy Court; and
WHEREAS, $90,000,000 of the claims of the Lenders (as reduced for
certain asset sale proceeds received during the pendency of the Cases) under the
Pre-Petition Credit Agreement are to be evidenced by loans hereunder and the
existing secured claims of the Lenders owing by the Borrower and its
Subsidiaries are to be restructured upon the terms and conditions set forth
herein and in the Plan of Reorganization;
AGREEMENT
NOW, THEREFORE, in consideration of the mutual provisions, covenants
and agreements herein contained, the parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Defined Terms. For purposes of this Agreement, in addition to the
terms defined elsewhere herein, the following terms shall have the meanings set
forth below (such meanings to be equally applicable to the singular and plural
forms thereof):
"Acquisition" shall mean any acquisition, whether in a single
transaction or series of related transactions, by the Borrower or any one or
more Subsidiaries, or any combination thereof, of (a) all or a substantial part
of the assets, or a going business or division, of any Person, whether through
purchase of assets, merger or otherwise, or (b) control of at least a majority
in voting power of the Capital Stock of any Person.
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"Affiliate" shall mean, as to any Person, each other Person that
directly, or indirectly through one or more intermediaries, owns or controls, is
controlled by or under common control with, such Person or is a director or
officer of such Person. For purposes of this definition, with respect to any
Person, "control" shall mean (i) the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise, or (ii) the beneficial ownership of securities or other ownership
interests of such Person having 10% or more of the combined voting power of the
then outstanding securities or other ownership interests of such Person
ordinarily (and apart from rights accruing under special circumstances) having
the right to vote in the election of directors or other governing body of such
Person.
"Agent" shall mean Bank One, in its capacity as Agent appointed under
Article X, and its successors and permitted assigns in such capacity.
"Agreement" shall mean this Credit Agreement, as amended, modified or
supplemented from time to time.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day or (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Asset Sale" means, with respect to any Person, the sale, assignment,
lease, conveyance, transfer or other disposition by such Person of any of its
assets (including by way of a sale-leaseback transaction and including the sale
or other transfer of any of the equity interests of any Subsidiary of such
Person) (exclusive of sales or dispositions permitted by Section 8.4(i), (ii),
(iii), (iv), (v) or (vi)).
"Assignee" shall have the meaning given to such term in Section
11.6(a).
"Assignment and Acceptance" shall mean an Assignment and Acceptance
entered into between a Lender and an Assignee and accepted by the Agent, in
substantially the form of Exhibit A.
"Authorized Officer" shall mean, with respect to any action specified
herein, any officer of the Borrower or a Subsidiary duly authorized by
resolution of the board of directors of the Borrower or such Subsidiary to take
such action on its behalf, and whose signature and incumbency shall have been
certified to the Agent by the secretary or an assistant secretary of the
Borrower or such Subsidiary.
"Bankruptcy Code" shall mean 11 U.S.C.ss.ss.101 et seq., as amended
from time to time, and any successor statute.
"Bankruptcy Court" - see the recitals.
"Business Day" means a day (other than a Saturday or Sunday) on which
banks generally are open in Detroit, Chicago and New York for the conduct of
substantially all of their commercial lending activities.
"Capital Expenditures" shall mean, for any period, the aggregate amount
(whether paid in cash or accrued as a liability) that would, in accordance with
GAAP, be included on the consolidated statement of cash flows of the Borrower
and its Subsidiaries for such period as capital expenditures; provided, however,
that Capital Expenditures shall not include any such expenditures for
replacements and substitutions for capital assets, to the extent made with the
proceeds of insurance.
"Capital Stock" shall mean (i) with respect to any Person that is a
corporation, any and all shares, interests or equivalents in capital stock
(whether voting or nonvoting, and whether common or preferred) of such
corporation, and (ii) with respect to any Person that is not a corporation, any
and all partnership, membership, limited liability company or other equity
interests of such Person; and in each case, any and all warrants, rights or
options to purchase any of the foregoing.
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"Cases" means the chapter 7 and chapter 11 cases of the Debtors under
case nos. 01-11488, 01-11489, 01-11491, 01-11492, 01-11494, 01-11496, 01-11497,
01-11499, 01-11501 and 01-11503 (MFW) in the Bankruptcy Court.
"Cash Equivalents" shall mean (i) securities issued or unconditionally
guaranteed by the United States of America or any agency or instrumentality
thereof, backed by the full faith and credit of the United States of America and
maturing within 90 days from the date of acquisition, (ii) commercial paper
issued by any Person organized under the laws of the United States of America,
maturing within 90 days from the date of acquisition and, at the time of
acquisition, having a rating of at least A-1 or the equivalent thereof by
Standard & Poor's Ratings Services or at least P-1 or the equivalent thereof by
Xxxxx'x Investors Service, Inc., (iii) time deposits and certificates of deposit
maturing within 90 days from the date of issuance and issued by a bank or trust
company organized under the laws of the United States of America or any state
thereof that has combined capital and surplus of at least $500,000,000 and that
has (or is a subsidiary of a bank holding company that has) a long-term
unsecured debt rating of at least A or the equivalent thereof by Standard &
Poor's Ratings Services or at least A2 or the equivalent thereof by Xxxxx'x
Investors Service, Inc., (iv) repurchase obligations with a term not exceeding
seven (7) days with respect to underlying securities of the types described in
clause (i) above entered into with any bank or trust company meeting the
qualifications specified in clause (iii) above and (v) money market funds at
least 95% of the assets of which are continuously invested in securities of the
type described in clause (i) above.
"Chapter 7 Subsidiaries" - see the recitals.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute, and all rules and regulations from time
to time promulgated thereunder.
"Collateral" - see Section 2.11.
"Compliance Certificate" shall mean a fully completed and duly executed
certificate in the form of Exhibit B, together with a Covenant Compliance
Worksheet.
"Confirmation Order" means the order of the Bankruptcy Court confirming
the Plan of Reorganization pursuant to Section 1129 of the Bankruptcy Code,
dated May 17, 2002.
"Consolidated EBITDA" shall mean, for any period, the aggregate of (i)
Consolidated Net Income for such period, plus (ii) the sum of Consolidated
Interest Expense, federal, state, local and other income taxes, depreciation and
amortization of intangible assets, and extraordinary and nonrecurring
restructuring charges properly recorded, including but not limited to costs and
professional fees associated with the Borrower's Chapter 11 restructuring and
the implementation and administering of the Plan of Reorganization both before
and after Plan Effectiveness, all to the extent taken into account in the
calculation of Consolidated Net Income for such period, minus (iii) the sum of
extraordinary or nonrecurring gains (including in connection with the sale or
write-up of assets) and other noncash credits increasing income for such period,
all to the extent taken into account in the calculation of Consolidated Net
Income for such period.
"Consolidated Interest Expense" shall mean, for any period, the sum
(without duplication) of (i) total interest expense of the Borrower and its
Subsidiaries for such period in respect of Indebtedness of the Borrower and its
Subsidiaries (including, without limitation, all such interest expense accrued
or capitalized during such period, whether or not actually paid during such
period), determined on a consolidated basis in accordance with GAAP, (ii) all
net amounts payable under or in respect of Hedge Agreements, to the extent paid
or accrued by the Borrower and its Subsidiaries during such period and (iii) all
commitment fees, issuance fees for letters of credit and other ongoing fees in
respect of Indebtedness paid, accrued or capitalized by the Borrower and its
Subsidiaries during such period.
"Consolidated Net Income" shall mean, for any period, net income (or
loss) for the Borrower and its Subsidiaries (excluding Subsidiaries that are
Designated Assets on Plan Effectiveness) for such period, determined on a
consolidated basis in accordance with GAAP.
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"Consolidated Net Worth" shall mean, as of any date of determination,
the net worth of the Borrower and its Subsidiaries as of such date, determined
on a consolidated basis in accordance with GAAP but (i) excluding any
Disqualified Capital Stock and (ii) without regard to the requirements of
Statement of Financial Accounting Standards No. 115 issued by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants.
"Contingent Obligation" shall mean, with respect to any Person, any
direct or indirect liability of such Person with respect to any Indebtedness,
liability or other obligation (the "primary obligation") of another Person (the
"primary obligor"), whether or not contingent, (a) to purchase, repurchase or
otherwise acquire such primary obligation or any property constituting direct or
indirect security therefore, (b) to advance or provide funds (i) for the payment
or discharge of any such primary obligation or (ii) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net worth
or solvency or any balance sheet item, level of income or financial condition of
the primary obligor, (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor in respect thereof to make payment of such
primary obligation or (d) otherwise to assure or hold harmless the owner of any
such primary obligation against loss or failure or inability to perform in
respect thereof; provided, however, that, with respect to the Borrower and its
Subsidiaries, the term Contingent Obligation shall not include endorsements for
collection or deposit in the ordinary course of business.
"Covenant Compliance Worksheet" shall mean a fully completed worksheet
in the form of Attachment A to Exhibit B.
"Credit Documents" shall mean this Agreement, the Notes, the Pledge
Agreement, the Guaranties, any other Security Documents, any Hedge Agreement to
which the Borrower and any Lender are parties and that is permitted or required
to be entered into by the Borrower hereunder, and all other agreements,
instruments, documents and certificates now or hereafter executed and delivered
to the Agent or any Lender by or on behalf of the Borrower or any of its
Subsidiaries with respect to this Agreement and the transactions contemplated
hereby, in each case as amended, modified, supplemented or restated from time to
time.
"Debtors" - see the recitals.
"Default" means any Event of Default or any event or condition which
would become an Event of Default with notice or passage of time or both.
"Designated Assets" means assets listed on Schedule 1, as such schedule
may be modified from time to time by the Borrower with the written consent of
the Required Lenders (which consent shall not be unreasonably withheld).
"Disclosure Statement" means the Disclosure Statement with respect to
First Amended Joint Plan of Reorganization of Lason, Inc. and its Subsidiary
Debtors dated March 18, 2002 submitted by the Debtors in connection with the
solicitation of acceptances of the Plan of Reorganization.
"Disqualified Capital Stock" means, with respect to any Person, any
Capital Stock of such Person that, by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable), or upon the
happening of any event or otherwise, (i) matures or is mandatorily redeemable or
subject to any mandatory repurchase requirement, pursuant to a sinking fund
obligation or otherwise, (ii) is redeemable or subject to any mandatory
repurchase requirement at the sole option of the holder thereof or (iii) is
convertible into or exchangeable for (whether at the option of the issuer or the
holder thereof) (a) debt securities or (b) any Capital Stock referred to in
clause (i) or (ii) above, in each case under clause (i), (ii) or (iii) above at
any time on or prior to the Facility Termination Date; provided, however, that
only the portion of Capital Stock that so matures or is mandatorily redeemable,
is so redeemable at the option of the holder thereof, or is so convertible or
exchangeable on or prior to such date shall be deemed to be Disqualified Capital
Stock.
"Dollars" or "$" shall mean dollars of the United States of America.
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"Domestic Subsidiary" means any Subsidiary of the Borrower which is
organized under the laws of any State of the United States of America or the
District of Columbia.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.
"ERISA Affiliate" shall mean any Person (including any trade or
business, whether or not incorporated) that would be deemed to be under "common
control" with, or a member of the same "controlled group" as, the Borrower or
any of its Subsidiaries, within the meaning of Section 414(b), (c), (m) or (o)
of the Code or Section 4001 of ERISA.
"ERISA Event" shall mean any of the following with respect to a Plan or
Multiemployer Plan, as applicable: (i) a Reportable Event with respect to a Plan
or a Multiemployer Plan, (ii) a complete or partial withdrawal by the Borrower
or any ERISA Affiliate from a Multiemployer Plan that results in liability under
Section 4201 or 4204 of ERISA, or the receipt by the Borrower or any ERISA
Affiliate of notice from a Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of ERISA, (iii) the distribution
by the Borrower or any ERISA Affiliate under Section 4041 or 4041A of ERISA of a
notice of intent to terminate any Plan or the taking of any action to terminate
any Plan, (iv) the commencement of proceedings by the PBGC under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan, or the receipt by the Borrower or any ERISA Affiliate of a notice from any
Multiemployer Plan that such action has been taken by the PBGC with respect to
such Multiemployer Plan, (v) the institution of a proceeding by any fiduciary of
any Multiemployer Plan against the Borrower or any ERISA Affiliate to enforce
Section 515 of ERISA, which is not dismissed within thirty (30) days, (vi) the
imposition upon the Borrower or any ERISA Affiliate of any liability under Title
IV of ERISA, other than for PBGC premiums due but not delinquent under Section
4007 of ERISA, or the imposition or threatened imposition of any Lien upon any
assets of the Borrower or any ERISA Affiliate as a result of any alleged failure
to comply with the Code or ERISA in respect of any Plan, (vii) the engaging in
or otherwise becoming liable for a nonexempt Prohibited Transaction by the
Borrower or any ERISA Affiliate, (viii) a violation of the applicable
requirements of Section 404 or 405 of ERISA or the exclusive benefit rule under
Section 401(a) of the Code by any fiduciary of any Plan for which the Borrower
or any of its ERISA Affiliates may be directly or indirectly liable or (ix) the
adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) of the
Code or Section 307 of ERISA, would result in the loss of tax-exempt status of
the trust of which such Plan is a part if the Borrower or an ERISA Affiliate
fails to timely provide security to such Plan in accordance with the provisions
of such sections.
"Eligible Assignee" shall mean (i) a commercial bank organized under
the laws of the United States or any state thereof and having total assets in
excess of $1,000,000,000, (ii) a commercial bank organized under the laws of any
other country that is a member of the Organization for Economic Cooperation and
Development or any successor thereto (the "OECD") or a political subdivision of
any such country and having total assets in excess of $1,000,000,000, provided
that such bank or other financial institution is acting through a branch or
agency located in the United States, in the country under the laws of which it
is organized or in another country that is also a member of the OECD, (iii) the
central bank of any country that is a member of the OECD, (iv) a finance
company, insurance company or other financial institution or fund (including any
group of funds managed by a fund manager) that is engaged in making, purchasing
or otherwise investing in loans in the ordinary course of its business and
having total assets in excess of $500,000,000, (v) any Affiliate of an existing
Lender or (vi) any other Person who would qualify as an accredited investor
under applicable securities laws and who is approved by the Required Lenders,
which approval shall not be unreasonably withheld.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
accusations, allegations, notices of noncompliance or violation, investigations
(other than internal reports prepared by any Person in the ordinary course of
its business and not in response to any third party action or request of any
kind) or proceedings relating in any way to any actual or alleged violation of
or liability under any Environmental Law or relating to any permit issued, or
any approval given, under any such Environmental Law (collectively, "Claims"),
including, without limitation, (i) any and all Claims by Governmental
Authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law and (ii) any and
all Claims by any third party seeking damages,
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contribution, indemnification, cost recovery, compensation or injunctive relief
resulting from Hazardous Substances or arising from alleged injury or threat of
injury to human health or the environment.
"Environmental Laws" shall mean any and all federal, state and local
laws, statutes, ordinances, rules, regulations, permits, licenses, approvals,
rules of common law and orders of courts or Governmental Authorities, relating
to the protection of human health or occupational safety or the environment, now
or hereafter in effect and in each case as amended from time to time, including,
without limitation, requirements pertaining to the manufacture, processing,
distribution, use, treatment, storage, disposal, transportation, handling,
reporting, licensing, permitting, investigation or remediation of Hazardous
Substances.
"Event of Default" shall have the meaning given to such term in Section
9.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.
"Facility Termination Date" means June 30, 2007.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 11:00 a.m. (New
York time) on such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System or any successor thereto.
"Financial Officer" shall mean, with respect to the Borrower, the chief
financial officer, vice president - finance, principal accounting officer or
treasurer of the Borrower.
"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) 2.50%, in each case changing when and
as the Alternate Base Rate changes.
"Foreign Subsidiary" means each Subsidiary of the Borrower other than a
Domestic Subsidiary.
"Funded Indebtedness" means Indebtedness which has actually been funded
and is outstanding.
"GAAP" shall mean generally accepted accounting principles, as set
forth in the statements, opinions and pronouncements of the Accounting
Principles Board, the American Institute of Certified Public Accountants and the
Financial Accounting Standards Board, consistently applied and maintained, as in
effect from time to time (subject to the provisions of Section 1.2).
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof and any central bank thereof, any
municipal, local, city or county government, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Guarantor" means each present and future Domestic Subsidiary and
Foreign Subsidiary of the Borrower and any other Person executing a Guaranty at
any time, other than, in each case, any Inactive Subsidiary.
"Guaranty" means each guaranty agreement in substantially the form of
Exhibit D duly executed by a Guarantor to the Agent, including any amendment,
modification, renewal or replacement of such guaranty agreement.
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"Hazardous Substances" shall mean any substances or materials (i) that
are or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants or toxic substances under any Environmental Law, (ii) that are
defined by any Environmental Law as toxic, explosive, corrosive, ignitable,
infectious, radioactive, mutagenic or otherwise hazardous, (iii) the presence of
which require investigation or response under any Environmental Law, (iv) that
constitute a nuisance, trespass or health or safety hazard to Persons or
neighboring properties, (v) that consist of underground or aboveground storage
tanks, whether empty, filled or partially filled with any substance or (vi) that
contain, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or wastes, crude oil, nuclear fuel, natural gas or synthetic gas.
"Hedge Agreement" shall mean any interest or foreign currency rate
swap, cap, collar, option, hedge, forward rate or other similar agreement or
arrangement designed to protect against fluctuations in interest rates or
currency exchange rates.
"Hedging Obligations" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Hedge
Agreements and (ii) any and all cancellations, buy backs, reversals,
terminations or assignments of any Hedge Agreement.
"Inactive Subsidiaries" shall mean those Subsidiaries of the Borrower
which had gross revenues of less than $1,000,000 in the prior fiscal year, as
set forth in Schedule 5.7, and such other Subsidiaries identified on Schedule
5.7 as "Inactive Subsidiaries".
"Indebtedness" shall mean, with respect to any Person (without
duplication), (i) all indebtedness and obligations of such Person for borrowed
money or in respect of loans or advances of any kind, (ii) all obligations of
such Person evidenced by notes, bonds, debentures or similar instruments, (iii)
all reimbursement obligations of such Person with respect to surety bonds,
letters of credit and bankers' acceptances (in each case, whether or not drawn
or matured and in the stated amount thereof), (iv) all obligations of such
Person to pay the deferred purchase price of property or services, (v) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person, (vi) all
obligations of such Person as lessee under leases that are or are required to
be, in accordance with GAAP, recorded as capital leases, to the extent such
obligations are required to be so recorded, (vii) all Disqualified Capital Stock
issued by such Person, with the amount of Indebtedness represented by such
Disqualified Capital Stock being equal to the greater of its voluntary or
involuntary liquidation preference and its maximum fixed repurchase price, but
excluding accrued dividends, if any (for purposes hereof, the "maximum fixed
repurchase price" of any Disqualified Capital Stock that does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant to
this Agreement, and if such price is based upon, or measured by, the fair market
value of such Disqualified Capital Stock, such fair market value shall be
determined reasonably and in good faith by the board of directors or other
governing body of the issuer of such Disqualified Capital Stock), (viii) the net
termination obligations of such Person under any Hedge Agreements, calculated as
of any date as if such agreement or arrangement were terminated as of such date,
(ix) all Contingent Obligations of such Person and (x) all indebtedness referred
to in clauses (i) through (ix) above secured by any Lien on any property or
asset owned or held by such Person regardless of whether the indebtedness
secured thereby shall have been assumed by such Person or is nonrecourse to the
credit of such Person.
"Junior Note Indenture" means the indenture pursuant to which the
Junior Notes are issued.
"Junior Notes" means the $3,117,790 aggregate principal amount
non-interest bearing junior unsecured notes issued on Plan Effectiveness to the
holders of Key Manager Claims (as defined in the Plan of Reorganization).
"Lender" shall mean each financial institution signatory hereto and
each other financial institution that becomes a "Lender" hereunder pursuant to
Section 11.6, and their respective successors and assigns.
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"Lending Installation" means, with respect to a Lender or the Agent,
the office, branch, subsidiary or affiliate of such Lender or the Agent listed
on the signature pages hereof or on a schedule or otherwise selected by such
Lender or the Agent pursuant to Section 2.9.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
security interest, lien (statutory or otherwise), preference, priority, charge
or other encumbrance of any nature, whether voluntary or involuntary, including,
without limitation, the interest of any vendor or lessor under any conditional
sale agreement, title retention agreement, capital lease or any other lease or
arrangement having substantially the same effect as any of the foregoing.
"Loan" means, with respect to a Lender, such Lender's loan made
pursuant to Article II.
"Margin Stock" shall have the meaning given to such term in Regulation
U.
"Material Adverse Change" shall mean a material adverse change in the
condition (financial or otherwise), operations, prospects, business, properties
or assets of the Borrower and its Subsidiaries, taken as a whole.
"Material Adverse Effect" shall mean a material adverse effect upon (i)
the condition (financial or otherwise), operations, prospects, business,
properties or assets of the Borrower and its Subsidiaries, taken as a whole,
(ii) the ability of the Borrower or any Subsidiary to perform its obligations
under this Agreement or any of the other Credit Documents to which it is a party
or (iii) the legality, validity or enforceability of this Agreement or any of
the other Credit Documents or the rights and remedies of the Agent and the
Lenders hereunder and thereunder.
"Multiemployer Plan" shall mean any "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate makes, is making or is obligated to make contributions or has made or
been obligated to make contributions.
"Net Cash Flow" means, for any period, the excess (if any) of the
consolidated aggregate cash receipts of the Borrower and its Subsidiaries during
such period (including the Borrower's share of any Net Cash Proceeds generated
by permitted Asset Sales) compared to the consolidated aggregate cash
disbursements of the Borrower and its Subsidiaries during such period for
operating expenses, taxes and debt service. The calculation of Net Cash Flow for
any period shall exclude disbursements during such period for (i) professional
fees, administrative fees, cure costs and other expenses related to the Cases
but paid after Plan Effectiveness, (ii) restructuring fees and costs related to
implementation of the Plan of Reorganization and (iii) the amount of any
optional principal prepayments to the Lenders pursuant to Section 2.2(a).
"Net Cash Proceeds" means, (i) in the case of any Asset Sale, without
duplication, the cash proceeds (including any cash payments received by way of
deferred payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale, net of reasonable and documented attorneys' fees,
accountants' fees, investment banking fees, amounts required to be applied to
the repayment of Indebtedness secured by a Lien expressly permitted hereunder on
any asset which is the subject of such Asset Sale (other than any Lien in favor
of the Agent to secure the Secured Obligations) and other customary fees and
expenses actually incurred in connection therewith, taxes paid or reasonably
estimated to be payable as a result thereof, and any cash reserves required to
be maintained for liabilities associated with such Asset Sale (provided that
such cash reserves shall become Net Cash Proceeds when no longer required to be
held as reserves), and (ii) in the case of any issuance, sale or other
disposition by the Borrower or any of its Subsidiaries of their respective
Capital Stock, or the incurrence by the Borrower or any of its Subsidiaries of
any funded indebtedness, the cash proceeds received by the Borrower or its
Subsidiaries in connection with such transaction or transactions, net of
reasonable and documented attorneys' fees, accountants' fees, investment banking
fees and other customary fees and expenses actually incurred in connection
therewith.
"Non-Excluded Taxes" - see Section 3.2.
"Note" is defined in Section 2.8.
9
"Obligations" shall mean all principal of and interest (including, to
the greatest extent permitted by law, post-petition interest) on the Loans and
all fees, expenses, indemnities and other obligations owing, due or payable at
any time by the Borrower to the Agent, any Lender or any other Person entitled
thereto, under this Agreement or any of the other Credit Documents.
"Overdue Rate" means a per annum rate that is equal to the sum of three
percent (3%) per annum plus the Floating Rate.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
successor thereto.
"Participant" shall have the meaning given to such term in Section
11.6(d).
"Payment Date" shall mean the last Business Day of each month.
"Permitted Acquisition" shall mean any Acquisition consented to by the
Required Lenders as evidenced by the written consent of the Agent.
"Permitted Liens" shall have the meaning given to such term in Section
8.3.
"Person" shall mean any corporation, association, joint venture,
partnership, limited liability company, organization, business, individual,
trust, government or agency or political subdivision thereof or any other legal
entity.
"Petition Date" - see the recitals.
"Plan" shall mean any "employee pension benefit plan" within the
meaning of Section 3(2) of ERISA that is subject to the provisions of Title IV
of ERISA (other than a Multiemployer Plan) and to which the Borrower or any
ERISA Affiliate may have any liability.
"Plan Effectiveness" means the time the Plan of Reorganization becomes
effective in accordance with Article IX thereof.
"Plan of Reorganization" - see the recitals.
"Pledge Agreement" shall mean a pledge agreement made by the Borrower
or any Subsidiary in favor of the Agent, in substantially the form of Exhibit E,
as amended, modified or supplemented from time to time.
"Pre-Petition Credit" - see Section 2.1(a).
"Pre-Petition Credit Agreement" means the Third Amended and Restated
Credit Agreement dated as of August 16, 1999 among the Borrower, various
subsidiaries, various lenders and the Agent, as amended prior to the Petition
Date, including without limitation by the Plan of Reorganization Term Sheet
dated November 30, 2001.
"Prime Rate" means the per annum rate announced by the Agent from time
to time as its "prime rate" (it being acknowledged that such announced rate may
not necessarily be the lowest rate charged by the Agent to any of its
customers), which Prime Rate shall change simultaneously with any change in such
announced rate.
"Prohibited Transaction" shall mean any transaction described in (i)
Section 406 of ERISA that is not exempt by reason of Section 408 of ERISA or by
reason of a Department of Labor prohibited transaction individual or class
exemption or (ii) Section 4975(c) of the Code that is not exempt by reason of
Section 4975(c)(2) or 4975(d) of the Code.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
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"Register" shall have the meaning given to such term in Section
11.6(b).
"Regulations T, U and X" shall mean Regulations T, U and X,
respectively, of the Federal Reserve Board, and any successor regulations.
"Reportable Event" shall mean (i) any "reportable event" within the
meaning of Section 4043(c) of ERISA for which the 30-day notice under Section
4043(a) of ERISA has not been waived by the PBGC (including any failure to meet
the minimum funding standard of, or timely make any required installment under,
Section 412 of the Code or Section 302 of ERISA, regardless of the issuance of
any waivers in accordance with Section 412(d) of the Code), (ii) any such
"reportable event" subject to advance notice to the PBGC under Section
4043(b)(3) of ERISA, (iii) any application for a funding waiver or an extension
of any amortization period pursuant to Section 412 of the Code and (iv) a
cessation of operations described in Section 4062(e) of ERISA.
"Required Lenders" shall mean Lenders in the aggregate having at least
a majority of the aggregate unpaid principal amount of the outstanding Loans.
"Requirement of Law" shall mean, with respect to any Person, the
charter, articles or certificate of organization or incorporation and bylaws or
other organizational or governing documents of such Person, and any statute,
law, treaty, rule, regulation, order, decree, writ, injunction or determination
of any arbitrator or court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject or otherwise pertaining to any or
all of the transactions contemplated by this Agreement and the other Credit
Documents.
"Responsible Officer" shall mean, with respect to the Borrower, the
president, the chief executive officer, the chief financial officer, any
executive officer or any other Financial Officer of the Borrower, and any other
officer or similar official thereof responsible for the administration of the
obligations of the Borrower in respect of this Agreement.
"Secured Obligations" means, collectively, (i) the Obligations and (ii)
all Hedging Obligations of the Borrower or any of its Subsidiaries owing to one
or more Lenders or their Affiliates.
"Security Agreement" means each security agreement entered into by the
Borrower or any Domestic Subsidiary for the benefit of the Agent to secure the
Secured Obligations pursuant to this Agreement, in substantially the form of
Exhibit G, as amended or modified from time to time.
"Security Documents" shall mean the Pledge Agreement, the Security
Agreements and all other similar agreements or instruments executed and
delivered by the Borrower or any of its Subsidiaries pursuant to Section 6.9 or
Section 6.10 or otherwise in connection with the transactions contemplated
hereby, in each case as amended, modified or supplemented from time to time.
"Seller Notes" shall mean any evidence of Indebtedness issued as
partial consideration for a Permitted Acquisition that matures less than one
year from the date of creation thereof.
"Subordinated Indebtedness" - see Section 8.2(iv).
"Subsidiary" shall mean, with respect to any Person, any corporation or
other Person of which more than fifty percent (50%) of the outstanding Capital
Stock having ordinary voting power to elect a majority of the board of
directors, board of managers or other governing body of such Person, is at the
time, directly or indirectly, owned or controlled by such Person and one or more
of its other Subsidiaries or a combination thereof (irrespective of whether, at
the time, securities of any other class or classes of any such corporation or
other Person shall or might have voting power by reason of the happening of any
contingency). When used without reference to a parent entity, the term
"Subsidiary" shall be deemed to refer to a Subsidiary of the Borrower. The term
"Subsidiary" shall not include any of the Inactive Subsidiaries or either of the
Chapter 7 Subsidiaries.
"Term Credit" means the Loans.
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"Unfunded Pension Liability" shall mean, with respect to any Plan or
Multiemployer Plan, the excess of its benefit liabilities under Section
4001(a)(16) of ERISA over the current value of its assets, determined in
accordance with the applicable assumptions used for funding under Section 412 of
the Code for the applicable plan year.
"Wholly Owned" shall mean, with respect to any Subsidiary of any
Person, that 100% of the outstanding Capital Stock of such Subsidiary (except
for directors' qualifying shares or nominal amounts of shares held by third
Persons to satisfy any applicable native ownership requirement imposed by
applicable law) is owned, directly or indirectly, by such Person.
1.2 Accounting Terms. Except as specifically provided otherwise in this
Agreement, all accounting terms used herein that are not specifically defined
shall have the meanings customarily given them in accordance with GAAP.
Notwithstanding anything to the contrary in this Agreement, for purposes of
calculation of the financial covenants set forth in Article VII, all accounting
determinations and computations hereunder shall be made in accordance with GAAP
as in effect as of the date of this Agreement applied on a basis consistent with
the application used in preparing the most recent financial statements of the
Borrower referred to in Section 5.10. In the event that any changes in GAAP
after such date are required to be applied to the Borrower and would affect the
computation of the financial covenants contained in Article VII, such changes
shall be followed only from and after the date this Agreement shall have been
amended to take into account any such changes.
1.3 Other Terms; Construction. Unless otherwise specified or unless the
context otherwise requires, all references herein to sections, annexes,
schedules and exhibits are references to sections, annexes, schedules and
exhibits in and to this Agreement, and all terms defined in this Agreement shall
have the defined meanings when used in any other Credit Document or any
certificate or other document made or delivered pursuant hereto.
ARTICLE II.
THE TERM CREDIT
2.1 Conversion to Term Credit.
(a) Pre-Petition Loans and Conversion. Prior to Plan Effectiveness,
certain "Loans" (the "Pre-Petition Loans") were previously made to the Borrower
and its Subsidiaries under the Pre-Petition Credit Agreement, the aggregate
outstanding principal balance of which as of the Petition Date equalled
$260,815,312.31 (the "Pre-Petition Credit"). Subject to terms and conditions set
forth in this Agreement, each of the parties hereto agrees that on Plan
Effectiveness (a) $90,000,000 of the Pre-Petition Credit (as reduced for certain
asset sale proceeds received during the pendency of the Cases as set forth on
Schedule 2.1) shall be reevidenced by this Agreement as the Term Credit
hereunder and the terms and conditions of such Pre-Petition Credit shall be
amended and restated in its entirety as set forth in this Agreement and (b) the
remaining $170,815,312.31 outstanding principal balance of the Pre-Petition
Credit shall be treated as set forth in the Plan of Reorganization.
(b) Amount of Term Credit. Subject to the terms and conditions set
forth in this Agreement, Ninety Million Dollars ($90,000,000) of the
Pre-Petition Credit (as reduced for certain asset sale proceeds received during
the pendency of the Cases as set forth on Schedule 2.1) is reevidenced hereby as
the Term Credit held by each Lender, on Plan Effectiveness, in the respective
amount set forth across from its signature hereto (which amount is based upon
the ratable share of the amount of the Pre-Petition Credit held by each such
Lender immediately prior to Plan Effectiveness).
(c) Repayment of Term Credit. Unless earlier payment is required under
this Agreement, the Borrower hereby unconditionally promises to pay to the Agent
for the pro rata account of each Lender the unpaid principal amount of the Term
Credit in periodic principal payments as follows:
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Payment Date Principal Installment
------------ ---------------------
June 30, 2002 $3,249,210
June 30, 2003 $1,000,000
September 30, 2003 $1,000,000
December 31, 2003 $1,000,000
March 31, 2004 $1,000,000
June 30, 2004 $1,000,000
September 30, 2004 $1,000,000
December 31, 2004 $1,000,000
March 31, 2005 $1,000,000
June 30, 2005 $1,000,000
September 30, 2005 $1,000,000
December 31, 2005 $1,000,000
March 31, 2006 $1,000,000
June 30, 2006 $1,000,000
September 30, 2006 $1,000,000
December 31, 2006 $1,000,000
March 31, 2007 $1,000,000
On the Facility Termination Date, the outstanding principal balance of
the Term Credit, if any, shall be paid in full.
(d) No Commitment to Advance New Loans. No installment of the Term
Credit shall be reborrowed once repaid, and no Lender shall be under any
obligation or commitment to advance any additional loans or other credit to the
Borrower or any of its Subsidiaries.
(e) No Effect on Certain Other Rights. Notwithstanding the conversion
of a portion of the Pre-Petition Loans as the Term Credit as described in
subparagraph (a) above, nothing contained herein shall be deemed to have
modified or retracted, for any period prior to Plan Effectiveness, the terms and
conditions that were applicable to repayment of the Pre-Petition Loans under the
Pre-Petition Credit Agreement prior to Plan Effectiveness. All actions performed
by or on behalf of the Borrower or its Subsidiaries prior to Plan Effectiveness
under the Pre-Petition Credit Agreement, including without limitation the
partial repayment of the Pre-Petition Loans and the remittance of certain
proceeds of collateral securing the Pre-Petition Loans in furtherance of their
obligations under the Pre-Petition Credit Agreement, are hereby confirmed and
ratified, and the Agent and the Lenders shall be entitled to retain the full
benefit of such performance. There shall be no disgorgement, refund or
rescission with respect to any payment made by or on behalf of the Borrower and
received by the Agent or the Lenders prior to Plan Effectiveness pursuant to the
terms of the Pre-Petition Credit Agreement or otherwise. Further, the conversion
of a portion of the Pre-Petition Loans as the Term Credit as described in
subparagraph (a) above shall not impair any other rights that the Agent or any
Lender may have under the terms of the Plan of Reorganization, including without
limitation such rights as the holders of equity interests in the Borrower.
2.2 Prepayments.
(a) Optional Prepayments. The Borrower may from time to time prepay,
without penalty or premium, all outstanding Loans, or, in a minimum aggregate
amount of $500,000 or any integral multiple of $100,000 in excess thereof, any
portion of the outstanding Loans upon two Business Days' prior notice to the
Agent. All such optional principal prepayments shall be applied to the principal
installments payable under Section 2.1(c) in the inverse order of maturity. Each
prepayment pursuant to this Section 2.2(a) shall be accompanied by accrued and
unpaid interest on the amount prepaid to the date of prepayment.
(b) Mandatory Prepayments. In addition to all other payments of the
Term Credit required hereunder, upon receipt by the Borrower or any Subsidiary
of any Net Cash Proceeds from (i) any Asset Sale, (ii) any capital contribution
or the issuance of any Capital Stock of the Borrower or any of its Subsidiaries
(other than the issuance of Capital Stock pursuant to an intercompany
transaction between the Borrower and any Guarantor or between any Guarantors and
other than the issuance of Capital Stock pursuant to any employee incentive
program) or (iii) the incurrence of any
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Funded Indebtedness by the Borrower or any of its Subsidiaries (other than
Funded Indebtedness permitted under clauses (i), (ii), (iii), (vi), (viii) and
(xiii) of Section 8.2), the Borrower shall prepay the Term Credit by an amount
equal to 100% of such Net Cash Proceeds. Notwithstanding the preceding sentence,
in connection with any Asset Sale of a Designated Asset, so long as no Default
or Event of Default exists, 75% of the Net Cash Proceeds from such Asset Sale
shall be remitted to the Lenders as a mandatory prepayment of the Term Credit so
long as the aggregate Net Cash Proceeds derived from all sales of Designated
Assets (during the period from and after November 14, 2001) are equal to or less
than $55,000,000 (and the remaining 25% of such Net Cash Proceeds may be
retained by the Borrower or the applicable Subsidiary), and 80% of the Net Cash
Proceeds from such Asset Sale shall be remitted to the Lenders as a mandatory
prepayment of the Term Credit if the aggregate Net Cash Proceeds derived from
all sales of Designated Assets (during the period from and after November 14,
2001) are greater than $55,000,000 (and the remaining 20% of such Net Cash
Proceeds may be retained by the Borrower or the applicable Subsidiary). All
prepayments under this Section 2.2(b) shall be applied to the principal
installments payable under Section 2.1(c) in the inverse order of maturity.
2.3 Interest Rate. Each Loan shall bear interest on the outstanding
principal amount thereof, for each day from and including the date of Plan
Effectiveness to but excluding the date it is paid, at a rate per annum equal to
the Floating Rate for such day. Changes in the rate of interest will take effect
simultaneously with each change in the Alternate Base Rate.
2.4 Rates Applicable After Event of Default. Notwithstanding anything
to the contrary contained in Section 2.3, during the continuance of an Event of
Default the Required Lenders may, at their option, by notice to the Company
(which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 11.5 requiring unanimous consent of the
Lenders to changes in interest rates), declare that each Loan shall bear
interest at the Overdue Rate, provided that each Loan shall automatically bear
interest at the Overdue Rate in connection with any Event of Default pursuant to
Section 9.1(g) or 9.1(h).
2.5 Method of Payment. All payments of the Obligations hereunder shall
be made, without setoff, deduction, or counterclaim, in immediately available
funds to the Agent at the Agent's address specified pursuant to Section 11.4, or
at any other Lending Installation of the Agent specified in writing by the Agent
to the Borrower, by noon (local time) on the date when due and shall be applied
ratably by the Agent among the Lenders. Each payment delivered to the Agent for
the account of any Lender shall be delivered promptly by the Agent to such
Lender in the same type of funds that the Agent received at its address
specified pursuant to Section 11.4 or at any Lending Installation specified in a
notice received by the Agent from such Lender. The Agent is hereby authorized to
charge the account of the Borrower maintained with the Agent for each payment of
principal, interest and fees as it becomes due hereunder.
2.6 Interest Payment Dates; Interest and Fee Basis. Interest accrued
on each Loan shall be payable on each Payment Date, commencing with the first
such date to occur after Plan Effectiveness, on any date on which such Loan is
prepaid (on the portion so prepaid), whether due to acceleration or otherwise,
and at maturity. Interest shall be calculated for actual days elapsed on the
basis of a 360-day year. Interest shall not be payable for the day of any
payment on the amount paid if payment is received prior to noon (local time) at
the place of payment. If any payment of principal of or interest on a Loan shall
become due on a day which is not a Business Day, such payment shall be made on
the next succeeding Business Day and, in the case of a principal payment, such
extension of time shall be included in computing interest in connection with
such payment.
2.7 Notification of Interest Rate Changes and Repayments. Promptly
after receipt thereof, the Agent will notify each Lender of the contents of each
repayment notice received by it hereunder. The Agent will give each Lender
prompt notice of each change in the Alternate Base Rate.
2.8 Noteless Agreement; Recordation.
(i) 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
from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
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(ii) The Agent shall also maintain accounts in which it will
record (a) the amount of each Loan hereunder, (b) the amount of any
principal or interest due and payable or to become due and payable from
the Borrower to each Lender hereunder and (c) the amount of any sum
received by the Agent hereunder from the Borrower and each Lender's
share thereof.
(iii) The entries maintained in the accounts maintained pursuant
to paragraphs (i) and (ii) above shall be prima facie evidence of the
existence and amounts of the Obligations therein recorded; provided,
however, that the failure of the Agent or any Lender to maintain such
accounts or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Obligations in accordance with
their terms.
(iv) Any Lender may request that its Loans be evidenced by a
promissory note in substantially the form of Exhibit F (a "Note"). In
such event, the Borrower shall prepare, execute and deliver to such
Lender Note(s) payable to the order of such Lender in a form supplied
by the Agent. Thereafter, the Loans evidenced by such Note(s) and
interest thereon shall at all times (including after any assignment
pursuant to Section 11.6) be represented by one or more Notes payable
to the order of the payee named therein or any assignee pursuant to
Section 11.6, except to the extent that any such Lender or assignee
subsequently returns any such Note(s) for cancellation and requests
that such Loans once again be evidenced as described in paragraphs (i)
and (ii) above. Each Lender is hereby authorized to record the
principal amount of each of its Loans and each repayment on the
schedule attached to its Note(s), provided, however, that neither the
failure to so record nor any error in such recordation shall affect the
Borrower's obligations under such Note(s).
2.9 Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Loans and any Notes issued hereunder shall be
deemed held by each Lender for the benefit of any such Lending Installation.
Each Lender may, by written notice to the Agent and the Borrower in accordance
with Article 11.4, designate replacement or additional Lending Installations
through which Loans will be made by it and for whose account Loan payments are
to be made.
2.10 Financial Condition of Borrower. Neither the Agent nor any Lender
shall have any obligation to the Borrower or any Guarantor to disclose or
discuss with the Borrower or any Guarantor the Agent's or any Lender's
assessment of the financial condition of the Borrower or any Guarantor, and the
Borrower hereby waives any obligation of any Lender to disclose any matter, fact
or thing relating to the business, operations or conditions of the Borrower or
any Guarantor now or hereafter known by the Agent or any Lender. The Borrower
assumes the responsibility for being and keeping informed of the financial
condition of the Borrower and each Guarantor and of all circumstances bearing
upon the risk of nonpayment of the Obligations by the Borrower. No Lender shall
have any obligation to the Borrower arising from any Lender's assessment of, or
failure to assess, the Borrower's or any Guarantor's financial condition in
connection with the granting of any Loans of credit hereunder.
2.11 Collateral Security; Further Assistance. As security for the
payment of the Secured Obligations, the Borrower shall grant or cause to be
granted to the Agent, for the ratable benefit of the Lenders, a lien on and
security interest in all of the following, whether now or hereafter existing or
acquired, and all proceeds thereof, all as more specifically described in the
Security Documents: substantially all Property of the Borrower and of its
Subsidiaries, whether now owned or hereafter acquired, provided that the Agent
may in its discretion exclude Property from this definition of Collateral which
is not material in the aggregate; provided, further that the Borrower and its
Subsidiaries shall not be required to grant or cause to be granted the pledge of
any Capital Stock of any Inactive Subsidiary or any Chapter 7 Subsidiary or the
pledge of any Capital Stock of any Foreign Subsidiary which is prohibited by the
laws of the jurisdiction of such Foreign Subsidiary (all of the foregoing
Property defined herein as the "Collateral"). The Borrower will, and will cause
each Subsidiary to, promptly (i) execute and deliver additional Security
Documents, within five days after request therefor by the Agent, sufficient (as
reasonably determined by the Agent) to grant to the Agent liens and security
interests, securing all of the Secured Obligations, in any present or after
acquired Collateral, and (ii) cause each Person that becomes a Subsidiary from
time to time which is required to be a Guarantor as described in the definition
of Guarantor to execute and deliver to the Lenders and the Agent, on the date
such Person becomes a Subsidiary, a Guaranty and other Security Documents,
together with other related documents described in Article IV sufficient to
grant to the Agent for the benefit of the Lenders and the Agent liens and
security interests in all Collateral securing the Secured Obligations. The
Borrower shall
15
notify the Agent, within five Business Days after the occurrence thereof, of the
acquisition of any Collateral that is not subject to the existing Security
Documents, and any other event or condition, other than the passage of time,
that may require additional action of any nature in order to preserve the
effectiveness and perfected status of the liens and security interests of the
Agent with respect to all Collateral pursuant to the Security Documents,
including, without limitation, delivering the originals of all promissory notes
and other instruments to the Agent and delivering the originals of all stock
certificates or other certificates evidencing any Capital Stock which is
Collateral at any time. Additionally, without limiting the foregoing, the
Borrower agrees to deliver such environmental reports as reasonably required by
the Agent in connection with any real property and provide such other
documentation to the Agent, including, without limitation, articles of
incorporation, by-laws, resolutions and opinions of counsel, which in the
opinion of the Agent is necessary or advisable in connection with Security
Documents and Guaranties. At all times on and after the date requested by the
Agent in its discretion, the Borrowers and the Guarantors shall direct all
customers and other account debtors to make all payments in connection with any
obligations to any Borrower or Guarantor directly to a lock-box account, which
account shall be a non-interest bearing account over which the Agent or another
Lender shall have control (within the meaning of the Uniform Commercial Code),
and the Borrower and the Guarantors shall promptly execute such lock-box
agreements, control agreements and related agreements in connection therewith,
each in form and substance reasonably satisfactory to the Agent, it being
understood that the Borrower and the Subsidiaries shall have the sole right to
direct disposition of funds in all lock box accounts and other deposit accounts
unless the Agent asserts exclusive control thereto during the existence of an
Event of Default.
2.12 Replacement of Lender. If the Borrower is required pursuant to
Section 3.1 or 3.2 to make any additional payment to any Lender (any Lender so
affected, an "Affected Lender"), the Borrower may elect to replace such Affected
Lender as a Lender party to this Agreement, provided that no Event of Default or
Default shall have occurred and be continuing at the time of such replacement,
and provided further that, concurrently with such replacement, (i) another bank
or other entity which is reasonably satisfactory to the Borrower and the Agent
shall agree, as of such date, to purchase for cash the Loans and other
Obligations due to the Affected Lender pursuant to an Assignment and Acceptance
and to become a Lender for all purposes under this Agreement and to assume all
obligations of the Affected Lender and to comply with the requirements of
Section 11.6 applicable to assignments and (ii) the Borrower shall pay to such
Affected Lender in same day funds on the day of such replacement all interest,
fees and other amounts then accrued but unpaid to such Affected Lender by the
Borrower hereunder to and including the date of termination, including, without
limitation, payments due to such Affected Lender under Sections 3.1 and 3.2.
ARTICLE III.
CHANGE IN CIRCUMSTANCES
3.1 Changes in Capital Adequacy Regulations. If a Lender determines
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within 15 days of demand by such
Lender, the Borrower shall pay such Lender the amount necessary, without
duplication of any other amount claimed pursuant to this Section 3.1 or any
other provision of this Agreement, to compensate for any shortfall in the rate
of return on the portion of such increased capital which such Lender determines
is attributable to this Agreement or its Loans (after taking into account such
Lender's policies as to capital adequacy). "Change" means (i) any change after
the date of this Agreement in the Risk-Based Capital Guidelines or (ii) any
adoption of or change in any other generally applicable law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the date of this
Agreement which affects the amount of capital required or expected to be
maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the risk-based
capital guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
16
3.2 Taxes.(a) All payments of principal and interest made by the
Borrower under this Agreement and any Note, if any, shall be made free and clear
of, and without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding income taxes and
franchise taxes and State of Michigan single business tax imposed on the Agent
or any Lender as a result of a present or former connection between the Agent or
such Lender and the jurisdiction of the Governmental Authority imposing such tax
or any political subdivision or taxing authority thereof or therein (other than
any such connection arising solely from the Agent or such Lender having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Credit Document). If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") are required to be withheld from any amounts payable to
the Agent or any Lender hereunder or under any Note, the amounts so payable to
the Agent or such Lender shall be increased to the extent necessary to yield to
the Agent or such Lender (after payment of all Non-Excluded Taxes) interest or
any such other amounts payable hereunder at the rates and in the amounts
specified in this Agreement provided, however, that the Borrower shall not be
required to increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or a state thereof if
such Lender fails to comply with the requirements of Section 3.2(c). Whenever
any Non-Excluded Taxes are payable by the Borrower, as promptly as possible
thereafter the Borrower shall send to the Agent for its own account or for the
account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agent and the Lenders for
any incremental taxes, interest or penalties that may become payable by the
Agent or any Lender as a result of any such failure. The agreements in this
Section shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
(b) If any Lender or the Agent shall become aware that it is entitled
to receive a refund or credit (such credit to include any increase in any
foreign tax credit as a result of Non-Excluded Taxes) as to which it has been
indemnified by the Borrower pursuant to this Section 3.2, it shall promptly
notify the Borrower of the availability of such refund or credit and shall,
within 45 days after receipt of a request by the Borrower, apply for such refund
or credit at the Borrower's expense, and in the case of any application for such
refund or credit by the Borrower, shall, if legally able to do so, deliver to
the Borrower such certificates, forms or other documentation as may be
reasonably necessary, and reasonably acceptable to the Lender or the Agent, to
assist the Borrower in such application. If any Lender or the Agent receives a
refund or credit (such credit to include any increase in any foreign tax credit)
in respect to any Non-Excluded Taxes as to which it has been indemnified by the
Borrower pursuant to this Section 3.2, it shall promptly notify the Borrower of
such refund or credit and shall, within 45 days after receipt of such refund or
the benefit of such credit, repay the amount of such refund or benefit of such
credit (with respect to the credit, as determined by the Lender or the Agent in
its sole judgment) to the Borrower (to the extent of amounts that have been paid
by the Borrower under this Section 3.2 with respect to Non-Excluded Taxes giving
rise to such refund or credit), net of all reasonable out-of-pocket expenses of
such Lender or the Agent and without interest (other than interest actually
received from the relevant taxing authority or other Governmental Authority with
respect to such refund or credit); provided however, that the Borrower, upon the
request of such Lender or the Agent, agrees to return the amount of such refund
or benefit of such credit to such Lender or the Agent in the event such Lender
or the Agent is required to repay the amount of such refund or benefit of such
credit to the relevant taxing authority or other Governmental Authority.
(c) Each Lender that is not organized under the laws of the United
States of America or a state thereof shall, at least five Business Days before
the date of the initial payment to be made by the Borrower under this Agreement
to such Lender, deliver to the Borrower and the Agent (A) if such Lender is a
"bank" within the meaning of Section 881(c)(3)(A) of the Code, two duly
completed copies of United States Internal Revenue Service Form W-8ECI or W-8BEN
(or other appropriate form), certifying in either case that such Lender is
entitled to receive payments under the Credit Documents without deduction or
withholding of any United States federal income taxes or (B) if such Lender is
not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and intends
to claim exemption from U.S. Federal withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of "portfolio interest", a Form
W-8BEN, or any subsequent versions thereof or successors thereto (and, if such
non-U.S. Lender delivers a Form W-8BEN, a certificate representing that such
non-U.S. Lender is not a bank for purposes of Section 881(c) of the Code, is not
a 10-percent shareholder (within the meaning of Section 871(h)(3)(B)
17
of the Code) of the Borrower and is not a controlled foreign corporation
related to the Borrower (within the meaning of Section 864(d)(4) of the Code)),
properly completed and duly executed by such non-U.S. Lender claiming complete
exemption from U.S. Federal withholding tax on payments of interest by the
Borrower under the Credit Documents. Each Lender that so delivers a Form W-8ECI
or W-8BEN further undertakes to deliver to the Borrower and the Agent two
additional copies of such form (or a successor form) on or before the date that
such form (or a replacement of an expired form) expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent forms so
delivered by it, and such amendments thereto or extensions or renewals thereof
as may be reasonably requested by the Borrower or the Agent, in each case
certifying that such Lender is entitled to receive payments under the Credit
Documents without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form with
respect to it and such Lender promptly advises the Borrower and the Agent that
it is not capable of receiving payments without any deduction or withholding of
United States federal income tax.
3.3 Mitigation of Additional Costs or Adverse Circumstances. If, in
respect of any Lender, circumstances arise which would or would upon the giving
of notice result in an increase in the liability of the Borrower to such Lender
under Section 3.1, then, without in any way limiting, reducing or otherwise
qualifying the Borrower's obligations under Section 3.1, such Lender shall
promptly upon becoming aware of the same notify the Agent thereof and shall, in
consultation with the Agent and the Borrower and to the extent that it can do so
without prejudice to its own position, take such reasonable steps as may be
reasonably open to it to mitigate the effects of such circumstances (including,
without limitation, the transfer of its Loans to a Lending Installation in
another jurisdiction).
3.4 Lender Statements; Survival of Indemnity. Each Lender shall
deliver a written statement of such Lender to the Borrower (with a copy to the
Agent) as to the amount due, if any, under Section 3.1 or 3.2. Such written
statement shall set forth in reasonable detail the calculations upon which such
Lender determined such amount and shall be prima facie evidence of the amount
claimed. Unless otherwise provided herein, the amount specified in the written
statement of any Lender shall be payable within ten Business Days of demand
after receipt by the Borrower of such written statement. Notwithstanding any
contrary provision of this Article III, the Borrower shall not be required to
make any payment to any Lender pursuant to Section 3.1 with respect to any
period of time more than 60 days prior to the date upon which such Lender's
written statement in accordance with the terms of this Section 3.4 is delivered
to the Borrower. The obligations of the Borrower under Section 3.1 and 3.2 shall
survive for a period of one year after payment of the Obligations and
termination of this Agreement.
ARTICLE IV.
CONDITIONS TO EFFECTIVENESS
4.1 Conditions to Effectiveness. This Agreement shall not be effective
unless the Confirmation Order shall be in full force and effect and shall not
have been vacated, stayed, reversed, modified or amended in any material
respect, (c) all conditions precedent to the Effective Date (under and as
defined in the Plan of Reorganization) set forth in Sections 9.2(c) (other than
effectiveness of this Agreement), (d) and (f) of the Plan of Reorganization,
other than conditions expressly waived by the Required Lenders in writing, shall
have been satisfied and the Agent shall have received a certificate from the
chief financial officer of the Borrower certifying as to the satisfaction of
such conditions and (d) the Borrower has furnished to the Agent with sufficient
copies for the Lenders:
(i) Counterparts of this Agreement duly executed by the Borrower
and the Agent.
(ii) Copies of the articles or certificate of incorporation of
the Borrower and each Subsidiary, together with all amendments, and a
certificate of good standing, each certified by the appropriate
governmental officer in its jurisdiction of incorporation.
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(iii) Copies, certified by the Secretary or Assistant Secretary
of the Borrower and each Subsidiary, of its by-laws and of its Board of
Directors' resolutions and of resolutions or actions of any other body
authorizing the execution of the Credit Documents to which the Borrower
or such Subsidiary is a party.
(iv) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower and each Subsidiary, which shall
identify by name and title and bear the signatures of the Authorized
Officers and any other officers of the Borrower or such Subsidiary
authorized to sign the Credit Documents to which the Borrower or such
Subsidiary is a party, upon which certificate the Agent and the Lenders
shall be entitled to rely until informed of any change in writing by
the Borrower or such Subsidiary.
(v) A written opinion of counsel to the Borrower and the
Guarantors, addressed to the Lenders in substantially the form of
Exhibit C.
(vi) Any Notes requested by a Lender pursuant to Section 2.8
payable to the order of each such requesting Lender.
(vii) Pledge Agreements with respect to the Borrower and each
Subsidiary that owns Capital Stock of another Subsidiary, duly
completed and executed by the parties thereto, together with any
certificates evidencing the Capital Stock being pledged thereunder and
undated assignments separate from certificate for any such certificate,
duly executed in blank (or a reaffirmation of the Pledge Agreements
executed in accordance with the Pre-Petition Credit Agreement).
(viii) Guaranties, duly executed by each applicable Subsidiary
(or a reaffirmation of the Guaranties executed in accordance with the
Pre-Petition Credit Agreement).
(ix) Security Agreements, duly executed by the Borrower and each
applicable Subsidiary (or a reaffirmation of the Security Agreements
executed in accordance with the Pre-Petition Credit Agreement).
(x) A true and correct copy of the Junior Note Indenture.
(xi) Such other documents as any Lender or its counsel, or the
Agent or its counsel, may have reasonably requested.
4.2 Additional Conditions to Effectiveness. In addition to the
conditions set forth in Section 4.1, this Agreement shall not become effective
unless:
(i) There exists no Event of Default or Default.
(ii) The representations and warranties contained in Article V
are true and correct in all material respects.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this Agreement and to
induce the Lenders to convert a portion of their claims into the Term Credit as
contemplated hereby, the Borrower represents and warrants to the Agent and the
Lenders as follows:
5.1 Corporate Organization and Power. Each of the Borrower and its
Subsidiaries (i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
full corporate power and authority to execute, deliver and perform the Credit
Documents to which it is or will be a party, to own and hold its property and to
engage in its business as presently conducted and (iii) is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where the nature of its business or the ownership of its properties requires it
to be so qualified, except where the failure to be so qualified would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect.
5.2 Authorization; Enforceability. Each of the Borrower and its
Subsidiaries has taken all necessary corporate action to execute, deliver and
perform each of the Credit Documents to which it is or will be a party, and
19
has, or on any later date of execution and delivery will have, validly executed
and delivered each of the Credit Documents to which it is or will be a party.
This Agreement constitutes, and each of the other Credit Documents upon
execution and delivery will constitute, the legal, valid and binding obligation
of each of the Borrower and its Subsidiaries that is a party hereto or thereto,
enforceable against it in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally, by general equitable
principles or by principles of good faith and fair dealing.
5.3 No Violation. The execution, delivery and performance by each of
the Borrower and its Subsidiaries of this Agreement and each of the other Credit
Documents to which it is or will be a party, and compliance by it with the terms
hereof and thereof, do not and will not (i) violate any provision of its
articles or certificate of incorporation or bylaws or contravene any other
Requirement of Law applicable to it, (ii) conflict with, result in a breach of
or constitute (with notice, lapse of time or both) a default under any
indenture, agreement or other instrument to which it is a party, by which it or
any of its properties is bound or to which it is subject or (iii) except for the
Liens granted in favor of the Agent pursuant to the Security Documents, result
in or require the creation or imposition of any Lien upon any of its properties
or assets. No Subsidiary is a party to any agreement or instrument or otherwise
subject to any restriction or encumbrance that restricts or limits its ability
to make dividend payments or other distributions in respect of its Capital
Stock, to repay Indebtedness owed to the Borrower or any Subsidiary, to make
loans or advances to the Borrower or any other Subsidiary, or to transfer any of
its assets or properties to the Borrower or any Subsidiary, in each case other
than such restrictions or encumbrances existing under or by reason of the Credit
Documents, applicable Requirements of Law, customary net worth provisions in
leases and customary non-assignment provisions with respect to Property subject
to a Permitted Lien of the type described in Section 8.3(vi).
5.4 Governmental and Third-Party Authorization; Permits. (a) No
consent, approval, authorization or other action by, notice to, or registration
or filing with, any Governmental Authority or other Person is or will be
required as a condition to or otherwise in connection with the due execution,
delivery and performance by each of the Borrower and its Subsidiaries of this
Agreement or any of the other Credit Documents to which it is or will be a party
or the legality, validity or enforceability hereof or thereof, other than
consents and filings the failure to obtain or make which would not, individually
or in the aggregate, have a Material Adverse Effect.
(b) Each of the Borrower and its Subsidiaries has, and is in good
standing with respect to, all governmental approvals, licenses, permits and
authorizations necessary to conduct its business as currently conducted and to
own or lease and operate its properties, except for those the failure to obtain
which would not be reasonably likely, individually or in the aggregate, to have
a Material Adverse Effect.
5.5 Litigation. Except for the Cases, the Lason Class Action (as
defined in the Confirmation Order) and current litigation pending against Lason
Canada, Inc., there are no actions, investigations, suits or proceedings pending
or, to the knowledge of the Borrower, threatened, at law, in equity or in
arbitration, before any court, other Governmental Authority or other Person, (i)
against or affecting the Borrower, any of its Subsidiaries or any of their
respective properties that would be reasonably likely to have a Material Adverse
Effect or (ii) asserting the invalidity of this Agreement or any of the other
Credit Documents.
5.6 Taxes. Each of the Borrower and its Subsidiaries has timely filed
all federal, state and local tax returns and reports required to be filed by it
and has paid (or will pay in accordance with the Plan of Reorganization) all
taxes, assessments, fees and other charges levied upon it or upon its properties
that are shown thereon as due and payable, other than those that are being
contested in good faith and by proper proceedings and for which adequate
reserves have been established in accordance with GAAP. Such returns accurately
reflect in all material respects all liability for taxes of the Borrower and its
Subsidiaries for the periods covered thereby. There is no ongoing audit or
examination outside the normal course of business or, to the knowledge of the
Borrower, other investigation by any Governmental Authority of the tax liability
of the Borrower or any of its Subsidiaries, and there is no unresolved claim by
any Governmental Authority concerning the tax liability of the Borrower or any
of its Subsidiaries for any period for which tax returns have been or were
required to have been filed, other than claims for which adequate reserves have
been established in accordance with GAAP.
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5.7 Subsidiaries. Schedule 5.7 sets forth a list, as of the date
hereof, of all of the Subsidiaries and Inactive Subsidiaries of the Borrower
and, as to each such Subsidiary, the percentage ownership (direct and indirect)
of the Borrower or any other Subsidiary in each class of its Capital Stock and
each direct owner thereof. Except for the shares of Capital Stock expressly
indicated on Schedule 5.7, there are no shares of Capital Stock of any
Subsidiary of the Borrower outstanding or reserved for any purpose. All
outstanding shares of Capital Stock of each Subsidiary of the Borrower are duly
and validly issued, fully paid and nonassessable. The Borrower or a Subsidiary
of the Borrower is the sole legal, record and beneficial owner of, and has good
and valid title to, all such Capital Stock, free and clear of all Liens other
than the Liens created pursuant to the Pledge Agreements.
5.8 Full Disclosure. All factual information heretofore or
contemporaneously furnished to the Agent or any Lender in writing (other than
financial projections and forecasts) by or on behalf of the Borrower or any of
its Subsidiaries for purposes of or in connection with this Agreement and the
transactions contemplated hereby is, and all other such factual information
hereafter furnished to the Agent or any Lender in writing (other than financial
projections and forecasts) by or on behalf of the Borrower or any of its
Subsidiaries will be, when taken as a whole, true and accurate in all material
respects on the date as of which such information is dated or certified (or, if
such information has been amended or supplemented, on the date as of which any
such amendment or supplement is dated or certified) and not made incomplete by
omitting to state a material fact necessary to make the statements contained
therein, in light of the circumstances under which such information was
provided, not misleading. All financial projections and forecasts furnished to
the Agent or any Lender by or on behalf of the Borrower or any of its
Subsidiaries in connection with this Agreement were prepared in good faith and
based on assumptions that, at the time of preparation, were reasonable; it being
acknowledged that projections and forecasts are subject to significant
uncertainties and contingencies, many of which are beyond the Borrower's
control, and that no assurance can be given that any projection or estimate will
be realized.
5.9 Margin Regulations. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
Margin Stock. No proceeds of the Loans will be used, directly or indirectly, to
purchase or carry any Margin Stock, to extend credit for such purpose or for any
other purpose that would violate or be inconsistent with Regulation T, U or X or
any provision of the Exchange Act.
5.10 Financial Matters. The Borrower has heretofore furnished to the
Agent, as part of the Plan of Reorganization and the Disclosure Statement,
copies of (i) the unaudited consolidated balance sheet of the Borrower and its
subsidiaries as of December 31, 2001, and the related statements of income and
cash flows for the fiscal year ended December 31, 2001 and (ii) the unaudited
consolidated balance sheet of the Borrower and its Subsidiaries as of May 31,
2002, and the related statement of income for the five-month period then ended.
Such financial statements have been prepared in accordance with GAAP (subject to
the absence of notes required by GAAP and to normal year-end adjustments) and
present fairly the financial condition of the Borrower and its Subsidiaries on a
consolidated basis as of the respective dates thereof and the consolidated
results of operations of the Borrower and its Subsidiaries for the respective
periods then ended. Except as fully reflected in the most recent financial
statements referred to above and the notes thereto, there are no material
liabilities or obligations with respect to the Borrower or any of its
Subsidiaries of any nature whatsoever (whether absolute, contingent or otherwise
and whether or not due).
5.11 Ownership of Properties. Each of the Borrower and its
Subsidiaries (i) holds interests as lessee under valid leases in full force and
effect with respect to all material leased real and personal property used in
connection with its business, (ii) possesses or has rights to use licenses,
patents, copyrights, trademarks, service marks, trade names and other assets
sufficient to enable it to continue to conduct its business substantially as
heretofore conducted and without any material conflict with the rights of others
and (iii) has good title to all of its other properties and assets reflected in
the most recent financial statements referred to in Section 5.10 (except as sold
or otherwise disposed of since the date thereof in the ordinary course of
business), in each case under clauses (i), (ii) and (iii) above free and clear
of all Liens other than Permitted Liens and in each such case other than to the
extent failure to have, hold or possess the same would not reasonably be
expected to have a Material Adverse Effect.
5.12 ERISA. (a) Except as set forth on Schedule 5.12, each of the
Borrower and its ERISA Affiliates is in compliance in all material respects with
the applicable provisions of ERISA, and each Plan is and has been
21
administered in compliance in all material respects with all applicable
Requirements of Law, including, without limitation, the applicable provisions of
ERISA and the Code. No ERISA Event (i) has occurred within the five-year period
prior to the date hereof, (ii) has occurred and is continuing or (iii) to the
knowledge of the Borrower, is reasonably expected to occur with respect to any
Plan. No Plan has any Unfunded Pension Liability as of the most recent annual
valuation date applicable thereto, and neither the Borrower nor any ERISA
Affiliate has engaged in a transaction that could be subject to Section 4069 or
4212(c) of ERISA.
(b) Neither the Borrower nor any ERISA Affiliate has had a complete or
partial withdrawal from any Multiemployer Plan, and neither the Borrower nor any
ERISA Affiliate would become subject to any liability under ERISA if the
Borrower or any ERISA Affiliate were to withdraw completely from all
Multiemployer Plans as of the most recent valuation date. No Multiemployer Plan
is in "reorganization" or is "insolvent" within the meaning of such terms under
ERISA.
5.13 Environmental Matters. (a) No Hazardous Substances are or have
been generated, used, located, released, treated, disposed of or stored by the
Borrower or any of its Subsidiaries or, to the knowledge of the Borrower, by any
other Person (including any predecessor in interest) or otherwise, in, on or
under any portion of any real property, leased or owned, of the Borrower or any
of its Subsidiaries, except in material compliance with all applicable
Environmental Laws, and no portion of any such real property or, to the
knowledge of the Borrower, any other real property at any time leased, owned or
operated by the Borrower or any of its Subsidiaries, has been contaminated by
any Hazardous Substance; and no portion of any real property, leased or owned,
of the Borrower or any of its Subsidiaries has been or is presently the subject
of an environmental audit, assessment or remedial action.
(b) No portion of any real property, leased or owned, of the Borrower
or any of its Subsidiaries has been used by the Borrower or any of its
Subsidiaries or, to the knowledge of the Borrower, by any other Person, as or
for a mine, a landfill, a dump or other disposal facility, a gasoline service
station or (other than for petroleum substances stored in the ordinary course of
business) a petroleum products storage facility; no portion of such real
property or any other real property at any time leased, owned or operated by the
Borrower or any of its Subsidiaries has, pursuant to any Environmental Law, been
placed on the "National Priorities List" or "CERCLIS List" (or any similar
federal, state or local list) of sites subject to possible environmental
problems; and there are not and have never been any underground storage tanks
situated on any real property, leased or owned, of the Borrower or any of its
Subsidiaries.
(c) All activities and operations of the Borrower and its Subsidiaries
are in compliance with the requirements of all applicable Environmental Laws,
except to the extent the failure so to comply, individually or in the aggregate,
would not be reasonably likely to have a Material Adverse Effect. Each of the
Borrower and its Subsidiaries has obtained all licenses and permits under
Environmental Laws necessary to its respective operations; all such licenses and
permits are being maintained in good standing; and each of the Borrower and its
Subsidiaries is in compliance with all terms and conditions of such licenses and
permits; except, in each case, for such licenses and permits the failure to
obtain, maintain or comply with which would not be reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect. Neither the
Borrower nor any of its Subsidiaries is involved in any suit, action or
proceeding, or has received any notice, complaint or other request for
information from any Governmental Authority or other Person, with respect to any
actual or alleged Environmental Claims that would be reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect; and, to the
knowledge of the Borrower, there are no threatened actions, suits, proceedings
or investigations with respect to any such Environmental Claims, nor any basis
therefor.
5.14 Compliance With Laws. Each of the Borrower and its Subsidiaries
has timely filed all material reports, documents and other materials required to
be filed by it under all applicable Requirements of Law with any Governmental
Authority, has retained all material records and documents required to be
retained by it under all applicable Requirements of Law, and is otherwise in
compliance with all applicable Requirements of Law in respect of the conduct of
its business and the ownership and operation of its properties, except for such
Requirements of Law the failure to comply with which, individually or in the
aggregate, would not be reasonably likely to have a Material Adverse Effect.
5.15 Regulated Industries. Neither the Borrower nor any of its
Subsidiaries is (i) an "investment company," a company "controlled" by an
"investment company," or an "investment advisor," within the meaning of
22
the Investment Company Act of 1940, as amended, or (ii) a "holding company," a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
5.16 Insurance. The assets, properties and business of the Borrower
and its Subsidiaries are insured against such hazards and liabilities, under
such coverages and in such amounts, as are customarily maintained by prudent
companies similarly situated and under policies issued by insurers of recognized
responsibility.
5.17 Security Documents. The provisions of each of the Security
Documents (whether executed and delivered prior to or on the date hereof or
thereafter) are and will be effective to create in favor of the Agent, for its
benefit and the benefit of the Lenders, a valid and enforceable security
interest in and Lien upon all right, title and interest of each of the Borrower
and its Subsidiaries that is a party thereto in and to the Collateral purported
to be pledged by it thereunder and described therein, and upon (i) Plan
Effectiveness and (ii) the possession by the Agent of any certificates
evidencing the securities pledged thereby, such security interest and Lien shall
constitute a fully perfected and first priority security interest in and Lien
upon such right, title and interest of the Borrower or such Subsidiary, as
applicable, in and to such Collateral, to the extent that such security interest
and Lien can be perfected by such filings, actions and possession, subject only
to Permitted Liens.
5.18 Labor Relations. Neither the Borrower nor any of its Subsidiaries
is engaged in any unfair labor practice within the meaning of the National Labor
Relations Act of 1947, as amended. There is (i) no unfair labor practice
complaint before the National Labor Relations Board, or grievance or arbitration
proceeding arising out of or under any collective bargaining agreement, pending
or, to the knowledge of the Borrower, threatened, against the Borrower or any of
its Subsidiaries, (ii) no strike, lock-out, slowdown, stoppage, walkout or other
labor dispute pending or, to the knowledge of the Borrower, threatened, against
the Borrower or any of its Subsidiaries and (iii) to the knowledge of the
Borrower, no petition for certification or union election or union organizing
activities taking place with respect to the Borrower or any of its Subsidiaries.
ARTICLE VI.
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, until the payment in full of
all principal and interest with respect to the Loans together with all other
amounts then due and owing hereunder:
6.1 Financial Statements. The Borrower will deliver to the Agent at
the address provided in Section 11.4 for notices to the Agent, and to each
Lender at the address for such Lender, for notices appearing on the signature
pages hereto:
(a) As soon as available and in any event within fifty (50) days after
the end of each of the first three fiscal quarters of each fiscal year,
beginning with the fiscal quarter ending September 30, 2002, unaudited
consolidated balance sheets of the Borrower and its Subsidiaries as of the end
of such fiscal quarter and unaudited consolidated statements of income and cash
flows for the Borrower and its Subsidiaries for the fiscal quarter then ended
and for that portion of the fiscal year then ended, all in reasonable detail and
prepared in accordance with GAAP (subject to the absence of notes required by
GAAP and subject to normal year-end adjustments) applied on a consistent basis
with historical principles or containing disclosure of the effect on the
financial condition or results of operations of any change in the application of
accounting principles and practices during such quarter;
(b) As soon as available and in any event within one hundred (100)
days after the end of each fiscal year, beginning with the fiscal year ending
December 31, 2002, an audited consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such fiscal year and audited consolidated
statements of income, retained earnings and cash flows for the Borrower and its
Subsidiaries for the fiscal year then ended, including the notes thereto, all in
reasonable detail and certified by Xxxxx Xxxxxxxx LLP or another independent
certified public accounting firm of recognized national standing reasonably
acceptable to the Required Lenders, together with (y) a report thereon by such
accountants that is not qualified as to going concern and to the effect that
such financial statements present fairly the consolidated financial condition
and results of operations of the Borrower and its Subsidiaries as of the
23
dates and for the periods indicated in accordance with GAAP applied on a
consistent basis with historical principles or containing disclosure of the
effect on the financial condition or results of operations of any change in the
application of accounting principles and practices during such year, and (z) a
report by such accountants to the effect that, based on and in connection with
their examination of the financial statements of the Borrower and its
Subsidiaries, they obtained no knowledge of the occurrence or existence of any
Default or Event of Default relating to accounting or financial reporting
matters, or a statement specifying the nature and period of existence of any
such Default or Event of Default disclosed by their audit; provided, however,
that such accountants shall not be liable by reason of the failure to obtain
knowledge of any Default or Event of Default that would not be disclosed or
revealed in the course of their audit examination; and
(c) As soon as available, a consolidated balance sheet of the Borrower
and its Subsidiaries prepared on the basis of applicable "fresh start"
regulations and guidelines.
6.2 Other Business and Financial Information. The Borrower will
deliver to each Lender:
(a) Concurrently with each delivery of the financial statements
described in Section 6.1, (i) a Compliance Certificate with respect to the
period covered by the financial statements then being delivered, executed by a
Financial Officer of the Borrower, together with a Covenant Compliance Worksheet
reflecting the computation of the financial covenants set forth in Sections 7.1,
7.2 and 7.3 as of the last day of the period covered by such financial
statements and (ii) management's discussion and analysis of such financial
statements;
(b) As soon as available and in any event within sixty (60) days after
the end of each fiscal year, beginning with the fiscal year ending December 31,
2002, a consolidated operating budget for the Borrower and its Subsidiaries for
the succeeding fiscal year, consisting of a consolidated balance sheet and
consolidated statements of income and cash flows, together with management's
discussion and analysis of such budget and a certificate of a Financial Officer
of the Borrower to the effect that such budgets have been prepared in good faith
and are reasonable estimates of the financial position and results of operations
of the Borrower and its Subsidiaries for the period covered thereby; and as soon
as available from time to time thereafter, any modifications or revisions to or
restatements of such budget;
(c) Promptly upon receipt thereof, copies of any "management letter"
submitted to the Borrower or any of its Subsidiaries by its certified public
accountants in connection with each annual, interim or special audit, and
promptly upon completion thereof, any response reports from the Borrower or any
such Subsidiary in respect thereof;
(d) Promptly upon the sending, filing or receipt thereof, copies of
(i) all financial statements, reports, notices and proxy statements that the
Borrower or any of its Subsidiaries shall send or make available generally to
its shareholders, (ii) all regular, periodic and special reports, registration
statements and prospectuses (other than on Form S-8) that the Borrower or any of
its Subsidiaries shall render to or file with the Securities and Exchange
Commission, the National Association of Securities Dealers, Inc. or any national
securities exchange and (iii) all press releases and other statements made
available generally by the Borrower or any of its Subsidiaries to the public
concerning material developments in the business of the Borrower or any of its
Subsidiaries;
(e) Promptly upon (and in any event within five (5) Business Days
after) any Responsible Officer of the Borrower obtaining knowledge thereof,
written notice of any of the following:
(i) the occurrence of any Default or Event of Default, together
with a written statement of a Responsible Officer of the Borrower
specifying the nature of such Default or Event of Default, the period
of existence thereof and the action that the Borrower has taken and
proposes to take with respect thereto;
(ii) the institution or threatened institution of any action,
suit, investigation or proceeding against or affecting the Borrower or
any of its Subsidiaries, including any such investigation or proceeding
by any Governmental Authority (other than routine periodic inquiries,
investigations or reviews), that would, if adversely determined, be
reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect, and any material development in any litigation or other
proceeding previously reported pursuant to Section 5.5 or this
subsection;
24
(iii) the receipt by the Borrower or any of its Subsidiaries from
any Governmental Authority of (y) any notice asserting any failure by
the Borrower or any of its Subsidiaries to be in compliance with
applicable Requirements of Law or that threatens the taking of any
action against the Borrower or such Subsidiary or sets forth
circumstances that, if taken or adversely determined, would be
reasonably likely to have a Material Adverse Effect, or (z) any notice
of any actual or threatened suspension, limitation or revocation of,
failure to renew, or imposition of any restraining order, escrow or
impoundment of funds in connection with, any license, permit,
accreditation or authorization of the Borrower or any of its
Subsidiaries, where such action would be reasonably likely to have a
Material Adverse Effect;
(iv) the occurrence of any ERISA Event, together with (x) a
written statement of a Responsible Officer of the Borrower specifying
the details of such ERISA Event and the action that the Borrower has
taken and proposes to take with respect thereto, (y) a copy of any
notice with respect to such ERISA Event that may be required to be
filed with the PBGC and (z) a copy of any notice delivered by the PBGC
to the Borrower or such ERISA Affiliate with respect to such ERISA
Event;
(v) the occurrence after Plan Effectiveness of any material
default under, or any proposed or threatened termination or
cancellation of, any material contract or agreement to which the
Borrower or any of its Subsidiaries is a party, the termination or
cancellation of which would be reasonably likely to have a Material
Adverse Effect;
(vi) the occurrence of any of the following: (x) the assertion
of any Environmental Claim against or affecting the Borrower, any of
its Subsidiaries or any of their respective real property, leased or
owned; (y) the receipt by the Borrower or any of its Subsidiaries of
notice of any alleged violation of or noncompliance with any
Environmental Laws; or (z) the taking of any remedial action by the
Borrower, any of its Subsidiaries or any other Person in response to
the actual or alleged generation, storage, release, disposal or
discharge of any Hazardous Substances on, to, upon or from any real
property leased or owned by the Borrower or any of its Subsidiaries;
but in each case under clauses (x), (y) and (z) above, only to the
extent the same would be reasonably likely to have a Material Adverse
Effect; and
(vii) any other matter or event that has, or would be reasonably
likely to have, a Material Adverse Effect, together with a written
statement of a Responsible Officer of the Borrower setting forth the
nature and period of existence thereof and the action that the Borrower
has taken and proposes to take with respect thereto; and
(viii) As promptly as reasonably possible, such other information
about the business, condition (financial or otherwise), operations or
properties of the Borrower or any of its Subsidiaries (including any
Plan and any information required to be filed under ERISA) as the Agent
or any Lender may from time to time reasonably request;
(f) (i) Not later than the tenth Business Day of each month
(commencing with the end of the first full calendar month elapsed after Plan
Effectiveness), in form and detail satisfactory to the Agent, a 13-week rolling
cash flow forecast for the Borrower and its Subsidiaries, updated (commencing
with the second such forecast) to show actual results for the prior month, and
(ii) not later than the fifteenth Business Day of each month, in form and detail
satisfactory to the Agent, (x) summary agings of accounts payable and accounts
receivable for the Borrower and its Subsidiaries as of the end of the prior
month and (y) a summary of Capital Expenditures for the prior month and on a
cumulative basis since Plan Effectiveness;
(g) Promptly upon receipt thereof, copies of any correspondence,
letters of intent, agreements or similar documents pertaining in any manner to
any proposed Asset Sale of the Borrower or its Subsidiaries; and
(h) As soon as available and in any event within thirty (30) days
after the end of each month (other than the last month of a fiscal quarter), the
unaudited consolidated balance sheet of the Borrower and its Subsidiaries (by
business unit or division) as of the end of such month, and the related
consolidated statements of income of the Borrower and its Subsidiaries (by
business unit or division) for such month and for the period commencing at the
end of the previous fiscal year and ending with the end of such month, in form
and detail reasonably acceptable to the Agent, setting forth in each case in
comparative form the variances, if any, from the budget and forecast delivered
as part of the Plan of Reorganization and Disclosure Statement (or, with respect
to periods ending after the delivery of a budget delivered pursuant to Section
6.2(b), from the last such budget).
25
6.3 Corporate Existence; Franchises; Maintenance of Properties. The
Borrower will, and will cause each of its Subsidiaries to, (i) maintain and
preserve in full force and effect its corporate existence, except as expressly
permitted otherwise by Section 8.1, (ii) obtain, maintain and preserve in full
force and effect all other rights, franchises, licenses, permits,
certifications, approvals and authorizations required by Governmental
Authorities and necessary to the ownership, occupation or use of its properties
or the conduct of its business, except to the extent the failure to do so would
not be reasonably likely to have a Material Adverse Effect and (iii) keep all
material properties in good working order and condition (normal wear and tear
excepted) and from time to time make all necessary repairs to and renewals and
replacements of such properties, except to the extent that any of such
properties are obsolete or are being replaced.
6.4 Compliance with Laws. The Borrower will, and will cause each of
its Subsidiaries to, comply in all respects with all Requirements of Law
applicable in respect of the conduct of its business and the ownership and
operation of its properties, except to the extent the failure so to comply would
not be reasonably likely to have a Material Adverse Effect.
6.5 Payment of Obligations. The Borrower will, and will cause each of
its Subsidiaries to, (i) pay all liabilities and obligations as and when due
(subject to any applicable subordination provisions), except to the extent
failure to do so would not be reasonably likely to have a Material Adverse
Effect and (ii) pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it, upon its income or profits or upon any of its
properties, prior to the date on which penalties would attach thereto, and all
lawful claims that, if unpaid, might become a Lien upon any of the properties of
the Borrower or any of its Subsidiaries; provided, however, that neither the
Borrower nor any of its Subsidiaries shall be required to pay any such tax,
assessment, charge, levy or claim that is being contested in good faith and by
proper proceedings and as to which the Borrower or such Subsidiary is
maintaining adequate reserves with respect thereto in accordance with GAAP.
6.6 Insurance. The Borrower will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurance
companies insurance with respect to its assets, properties and business, against
such hazards and liabilities, of such types and in such amounts, as is
customarily maintained by companies in the same or similar businesses similarly
situated, and will deliver to the Agent certificates naming the Agent as lender
loss payee with respect to such assets (provided that if no Default or Event of
Default is continuing, the proceeds of casualty insurance will be released to
the Borrower for the sole purpose of obtaining replacements for assets subject
to an insured casualty).
6.7 Maintenance of Books and Records; Inspection. The Borrower will,
and will cause each of its Subsidiaries to, (i) maintain adequate books,
accounts and records, in which full, true and correct entries shall be made of
all financial transactions in relation to its business and properties, and
prepare all financial statements required under this Agreement, in each case in
accordance with GAAP and in compliance with the requirements of any Governmental
Authority having jurisdiction over it, and (ii) permit employees or agents of
the Agent or any Lender to inspect its properties and examine or audit its
books, records, working papers and accounts and make copies and memoranda of
them, and to discuss its affairs, finances and accounts with its officers and
employees and, upon notice to the Borrower, the independent public accountants
of the Borrower and its Subsidiaries (and by this provision the Borrower
authorizes such accountants to discuss the finances and affairs of the Borrower
and its Subsidiaries), all at such times and from time to time, upon reasonable
notice and during business hours, as may be reasonably requested. The Agent, on
behalf of the Lenders, or the Agent's representatives or consultants, shall be
permitted to conduct audits of any collateral securing the obligations of the
Borrower to any Lender, and the Borrower shall compensate the Agent for its
reasonable and documented out-of-pocket expenses in connection with any such
audit; provided that, so long as no Default or Event of Default exists, the
Borrower shall not be required to reimburse the Agent for such expenses for more
than two (2) collateral audits in any calendar year.
6.8 Acquisitions. Notwithstanding anything herein to the contrary,
neither the Borrower nor any of its Subsidiaries may make any Acquisition at any
time without the prior written consent of the Required Lenders.
6.9 Creation or Acquisition of Subsidiaries. Subject to the provisions
of Section 8.5, the Borrower may from time to time create or acquire new Wholly
Owned Subsidiaries in connection with Permitted Acquisitions
26
or otherwise, and the Wholly Owned Subsidiaries of the Borrower may create or
acquire new Wholly Owned Subsidiaries, provided that:
(a) Concurrently with the creation or direct or indirect acquisition
by the Borrower or any Subsidiary thereof, each such new Subsidiary which
qualifies as a Guarantor hereunder will execute and deliver to the Agent a
joinder to the Guaranty, pursuant to which such new Subsidiary shall become a
party thereto and shall guarantee the payment in full of the Obligations of the
Borrower under this Agreement and the other Credit Documents, and provided
further that if any acquired entity is merged into the Borrower or any
Subsidiary Guarantor in connection with such Acquisition, the acquired and
merged entity shall not be required to become a Guarantor.
(b) Concurrently with the creation or acquisition of any new
Subsidiary all or a portion of the Capital Stock of which is directly owned by
the Borrower or any Guarantor, the Borrower or such Guarantor will execute and
deliver to the Agent an amendment or supplement to the Pledge Agreement pursuant
to which the Capital Stock of such new Subsidiary owned by the Borrower or such
Guarantor shall be pledged to the Agent in accordance with and as described in
Section 2.11, together with the certificates evidencing such Capital Stock and
undated stock powers duly executed in blank; and concurrently with (and in any
event within ten (10) Business Days thereafter) the creation or acquisition of
any new Subsidiary all or a portion of the Capital Stock of which is directly
owned by a Subsidiary (the "Parent Subsidiary"), the Parent Subsidiary will
execute and deliver to the Agent an appropriate joinder, amendment or supplement
to the Pledge Agreement, pursuant to which the Capital Stock of such new
Subsidiary owned by such Parent Subsidiary shall be pledged to the Agent in
accordance with and as described in Section 2.11, together with the certificates
evidencing such Capital Stock and undated stock powers duly executed in blank;
and
(c) As promptly as reasonably possible, the Borrower and its
Subsidiaries will deliver any such other documents, certificates and opinions
(including opinions of local counsel in the jurisdiction of organization of each
such new Subsidiary), in form and substance reasonably satisfactory to the
Agent, as the Agent may reasonably request in connection therewith and will take
such other action as the Agent may reasonably request to create in favor of the
Agent a perfected security interest in the Collateral being pledged pursuant to
the documents described above.
6.10 Further Assurances. The Borrower will, and will cause each of its
Subsidiaries to, make, execute, endorse, acknowledge and deliver any amendments,
modifications or supplements hereto and restatements hereof and any other
agreements, instruments or documents, and take any and all such other actions,
as may from time to time be reasonably requested by the Agent or the Required
Lenders to perfect and maintain the validity and priority of the Liens granted
pursuant to the Security Documents and to effect, confirm or further assure or
protect and preserve the interests, rights and remedies of the Agent and the
Lenders under this Agreement and the other Credit Documents.
6.11 Fee. The Borrower shall, upon Plan Effectiveness, remit to the
Agent, for the account of certain Lenders, a fee in the sum of $200,000, in
consideration of financing commitments extended by such Lenders during the
Cases.
ARTICLE VII.
FINANCIAL COVENANTS
The Borrower covenants and agrees that, until the payment in full of
all principal and interest with respect to the Loans together with all other
amounts then due and owing hereunder:
7.1 Consolidated EBITDA. The Borrower will not permit Consolidated
EBITDA, for any period ending on the day set forth below, to be less than the
amount set forth below opposite such period:
Fiscal Quarter Ending Consolidated EBITDA Amount
--------------------- --------------------------
September 30, 2002 $ 750,000
27
Two Fiscal Quarters Ending Consolidated EBITDA Amount
-------------------------- --------------------------
December 31, 2002 $ 2,101,000
Three Fiscal Quarters Ending Consolidated EBITDA Amount
---------------------------- --------------------------
March 31, 2003 $ 3,545,000
Four Fiscal Quarters Ending Consolidated EBITDA Amount
--------------------------- --------------------------
June 30, 2003 $ 6,224,000
September 30, 2003 $ 7,634,000
December 31, 2003 $ 9,176,000
March 31, 2004 $ 9,777,000
June 30, 2004 $10,434,000
September 30, 2004 $11,145,000
December 31, 2004 $11,911,000
March 31, 2005 $12,690,000
June 30, 2005 $13,540,000
September 30, 2005 $14,461,000
December 31, 2005 $15,453,000
March 31, 2006 $16,456,000
June 30, 2006 $17,550,000
September 30, 2006 $18,736,000
December 31, 2006 $20,012,000
March 31, 2007 $20,012,000
June 30, 2007 $20,012,000
7.2 Capital Expenditures. The Borrower will not, and will not permit
any Subsidiary to, expend for Capital Expenditures during any period ending on
the day set forth below, in excess of the aggregate amount set forth below
opposite such period:
Fiscal Quarter Ending Amount
--------------------- ------
September 30, 2002 $ 1,500,000
Two Fiscal Quarters Ending Amount
-------------------------- ------
December 31, 2002 $ 2,500,000
Three Fiscal Quarters Ending Amount
---------------------------- ------
March 31, 2003 $ 3,000,000
Four Fiscal Quarters Ending Amount
--------------------------- ------
June 30, 2003 $ 3,500,000
September 30, 2003 $ 3,500,000
December 31, 2003 $ 3,400,000
March 31, 2004 $ 3,675,000
June 30, 2004 $ 3,950,000
September 30, 2004 $ 4,025,000
December 31, 2004 $ 4,025,000
March 31, 2005 $ 4,169,000
June 30, 2005 $ 4,313,000
September 30, 2005 $ 4,456,000
December 31, 2005 $ 4,600,000
March 31, 2006 $ 4,888,000
June 30, 2006 $ 5,175,000
September 30, 2006 $ 5,463,000
December 31, 2006 $ 5,750,000
28
March 31, 2007 $ 5,750,000
June 30, 2007 $ 5,750,000;
provided, however, that there shall be excluded from the foregoing limitation
Capital Expenditures made by Subsidiaries that are Designated Assets on Plan
Effectiveness.
7.3 Net Cash Flow. For each period set forth below, the actual Net
Cash Flow of the Borrower and its Subsidiaries for such period shall equal or
exceed the amounts set forth below:
Fiscal Quarter Ending Amount
--------------------- ------
September 30, 2002 $ (2,900,000)
Two Fiscal Quarters Ending Amount
-------------------------- ------
December 31, 2002 $ (3,362,000)
Three Fiscal Quarters Ending Amount
---------------------------- ------
March 31, 2003 $ (4,061,000)
Four Fiscal Quarters Ending Amount
--------------------------- ------
June 30, 2003 $ (3,729,000)
September 30, 2003 $ (2,970,000)
December 31, 2003 $ (1,946,000)
March 31, 2004 $ (2,514,000)
June 30, 2004 $ (2,836,000)
September 30, 2004 $ (1,215,000)
December 31, 2004 $ (685,000)
March 31, 2005 $ (685,000)
June 30, 2005 $ (752,000)
September 30, 2005 $ (873,000)
December 31, 2005 $ (1,631,000)
March 31, 2006 $ (2,030,000)
June 30, 2006 $ (2,289,000)
September 30, 2006 $ (2,109,000)
December 31, 2006 $ (1,104,000)
March 31, 2007 $ (1,104,000)
June 30, 2007 $ (1,104,000)
ARTICLE VIII.
NEGATIVE COVENANTS
The Borrower covenants and agrees that, until the payment in full of
all principal and interest with respect to the Loans together with all other
amounts then due and owing hereunder:
8.1 Merger; Consolidation. The Borrower will not, and will not permit
or cause any of its Subsidiaries to, liquidate, wind up or dissolve, or enter
into any consolidation, merger or other combination, or agree to do any of the
foregoing; provided, however, that:
(i) any Subsidiary may merge or consolidate so long as the
surviving entity is the Borrower or a Wholly Owned Subsidiary; and
(ii) any Inactive Subsidiary or Chapter 7 Subsidiary may be
liquidated, wound up or dissolved.
8.2 Indebtedness. The Borrower will not, and will not permit or cause
any of its Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness other than:
29
(i) Indebtedness incurred under this Agreement, the Notes and the
Guaranties;
(ii) Indebtedness existing on the date hereof and described in
Schedule 8.2 and any Indebtedness refunding or refinancing such
Indebtedness, provided the principal amount thereof is not increased;
(iii) the Junior Notes and obligations owing to holders of Other
Secured Claims and Convenience Claims (each as defined in the Plan of
Reorganization) as set forth in the Plan of Reorganization;
(iv) unsecured Indebtedness of the Borrower in an aggregate
principal amount not exceeding the greater of $15,000,000 or 25% of
Consolidated Net Worth at the time such Indebtedness is incurred that
is expressly subordinated and made junior in right and time of payment
to the Obligations and that is evidenced by one or more written
agreements or instruments having terms, conditions and provisions
(including, without limitation, provisions relating to principal
amount, maturity, covenants, defaults, interest, and subordination)
satisfactory in form and substance to the Required Lenders in their
sole discretion and which shall provide, at a minimum and without
limitation, that such Indebtedness (a) shall mature by its terms no
earlier than the second anniversary of the Facility Termination Date,
(b) shall not require any scheduled payment of principal prior to the
first anniversary of the Facility Termination Date and (c) shall have
covenants and undertakings that, taken as a whole, are materially less
restrictive than those contained herein (the Indebtedness described
hereinabove, "Subordinated Indebtedness"); provided that, as further
conditions to the issuance of any Subordinated Indebtedness, (1)
immediately after giving effect to the issuance of such Subordinated
Indebtedness, no Default or Event of Default shall exist, (2) all
agreements and instruments evidencing or governing such Subordinated
Indebtedness shall have been approved in writing by the Required
Lenders (or the Agent on their behalf) and (3) prior to or concurrently
with the issuance of such Subordinated Indebtedness, the Borrower shall
have delivered to each Lender a certificate, signed by a Financial
Officer of the Borrower, satisfactory in form and substance to the
Required Lenders and to the effect that, after giving effect to the
incurrence of such Subordinated Indebtedness, the Borrower is in
compliance with the financial covenant set forth in Section 7.1, such
compliance being determined with regard to any calculation made on a
pro forma basis in accordance with GAAP as of the last day of the
fiscal quarter then most recently ended and as if such Subordinated
Indebtedness had been incurred on the first day of the period
applicable to such covenant (such calculation to be attached to such
certificate);
(v) accrued expenses (including salaries, accrued vacation and
other compensation), current trade or other accounts payable and other
current liabilities arising in the ordinary course of business and not
incurred through the borrowing of money, provided that the same shall
be paid when due except to the extent being contested in good faith and
by appropriate proceedings;
(vi) loans and advances by the Borrower or any Guarantor to any
other Guarantor or by any Guarantor to the Borrower;
(vii) Indebtedness of the Borrower and its Subsidiaries under
bona fide Hedge Agreements entered into in the ordinary course of
business and not for speculative purposes;
(viii) purchase money Indebtedness of the Borrower and its
Subsidiaries incurred solely to finance the payment of all or part of
the purchase price of any equipment, real property or other fixed
assets acquired in the ordinary course of business, including
Indebtedness in respect of capital lease obligations, and any renewals,
refinancings or replacements thereof (subject to the limitations on the
principal amount thereof set forth in this clause (viii)), which
Indebtedness shall not exceed $2,500,000 in aggregate principal amount
for each fiscal year of the Borrower;
(ix) unsecured Indebtedness of the Borrower or any Subsidiary
evidenced by Seller Notes in connection with any Permitted Acquisition;
(x) Contingent Obligations of the Borrower or any Subsidiary in
connection with the guaranty of any Indebtedness of the Borrower or any
Subsidiary permitted under this Section or other obligations of the
Borrower or any Subsidiary not prohibited by this Agreement;
30
(xi) Contingent Obligations in respect of obligations,
warranties and indemnities, not relating to Indebtedness of any Person,
which have been or are undertaken or made in the ordinary course of
business and not for the benefit of or in favor of an Affiliate of the
Borrower;
(xii) Contingent Obligations with respect to surety, appeal and
performance bonds obtained by the Borrower or any Subsidiary in the
ordinary course of business;
(xiii) Reimbursement obligations in respect of any letters of
credit issued by Bank One (or, with the written consent of the Required
Lenders, issued by any other bank), provided that the aggregate face
amount of any such letters of credit outstanding at any time shall not
exceed $2,000,000; and
(xiv) other Indebtedness consented to by the Required Lenders,
and having such terms as may be acceptable to the Required Lenders, as
evidenced by the written consent of the Agent.
8.3 Liens. The Borrower will not, and will not permit or cause any of
its Subsidiaries to, directly or indirectly, make, create, incur, assume or
suffer to exist, any Lien upon or with respect to any part of its property or
assets, whether now owned or hereafter acquired, or file or permit the filing
of, or permit to remain in effect, any financing statement or other similar
notice of any Lien with respect to any such property, asset, income or profits
under the Uniform Commercial Code of any state or under any similar recording or
notice statute, or agree to do any of the foregoing, other than the following
(collectively, "Permitted Liens"):
(i) Liens created under the Security Documents;
(ii) Liens existing on the date hereof and described in Schedule
8.3 and extensions and renewals thereof that are limited to the
property covered thereby and do not secure any Indebtedness in addition
to that secured thereby prior to such extension or renewal;
(iii) Liens imposed by law, such as Liens of carriers,
warehousemen, mechanics, materialmen and landlords, and other similar
Liens incurred in the ordinary course of business for sums not
constituting borrowed money that are not overdue for a period of more
than thirty (30) days or that are being contested in good faith by
appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP (if so required);
(iv) Liens (other than any Lien imposed by ERISA, the creation or
incurrence of which would result in an Event of Default under Section
9.1(k)) incurred in the ordinary course of business in connection with
worker's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure the performance of
letters of credit, bids, tenders, statutory obligations, surety and
appeal bonds, leases, government contracts and other similar
obligations (other than obligations for borrowed money) entered into in
the ordinary course of business;
(v) Liens for taxes, assessments or other governmental charges or
statutory obligations that are not delinquent or remain payable without
any penalty or that are being contested in good faith by appropriate
proceedings and for which adequate reserves have been established in
accordance with GAAP (if so required);
(vi) Liens securing the purchase money Indebtedness and capital
leases permitted under clause (viii) of Section 8.2, provided that any
such Lien (a) in the case of purchase money Indebtedness other than
capital leases, shall attach to such property concurrently with or
within 120 days after the acquisition thereof by the Borrower or such
Subsidiary, (b) shall not exceed the lesser of (y) the fair market
value of such property or (z) the cost thereof to the Borrower or such
Subsidiary and (c) shall not encumber any other property of the
Borrower or any of its Subsidiaries;
(vii) any attachment or judgment Lien not constituting an Event
of Default under Section 9.1(i) that is being contested in good faith
by appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP (if so required);
(viii) Liens arising from the filing, for notice purposes only,
of financing statements in respect of true leases;
31
(ix) with respect to any real property occupied by the Borrower
or any of its Subsidiaries, all easements, rights of way, licenses and
similar encumbrances on title that do not materially impair the use of
such property for its intended purposes;
(x) Liens and rights of setoff of banks and securities
intermediaries existing with respect to accounts maintained in the
ordinary course of business;
(xi) deposits or pledges of cash or Cash Equivalents to secure
reimbursement obligations permitted under clause (xiii) of Section 8.2;
and
(xii) Liens securing Other Secured Claims (as defined in the Plan
of Reorganization).
8.4 Disposition of Assets. The Borrower will not, and will not permit
or cause any of its Subsidiaries to, sell, assign, lease, convey, transfer or
otherwise dispose of (whether in one or a series of transactions) all or any
portion of its assets, business or properties (including, without limitation,
any Capital Stock of any Subsidiary), or enter into any arrangement with any
Person providing for the lease by the Borrower or any Subsidiary as lessee of
any asset that has been sold or transferred by the Borrower or such Subsidiary
to such Person, or agree to do any of the foregoing, except for:
(i) sales of inventory in the ordinary course of business;
(ii) the sale or exchange of used, surplus, worn-out or obsolete
equipment to the extent (y) the proceeds of such sale are applied
towards, or such equipment is exchanged for, replacement equipment or
(z) such equipment is no longer necessary for the operations of the
Borrower or its applicable Subsidiary in the ordinary course of
business;
(iii) the transfer to Lason Services, Inc. or to Lason Systems,
Inc. of Capital Stock or assets acquired in a Permitted Acquisition
subject to the terms and conditions of this Agreement;
(iv) the sale, lease or other disposition of assets by a
Subsidiary to the Borrower or to a Guarantor if, immediately after
giving effect thereto, no Default or Event of Default would exist;
(v) any license of intellectual property in the ordinary course
of business;
(vi) the disposition of Cash Equivalents, provided that the
proceeds of such disposition are used in a manner otherwise permitted
under this Agreement; and
(vii) Asset Sales, the Net Cash Proceeds of which are applied as
set forth in Section 2.2(b), and which (other than with respect to
Asset Sales of Designated Assets) are consented to by the Required
Lenders as evidenced by the written consent of the Agent.
8.5 Investments. The Borrower will not, and will not permit or cause
any of its Subsidiaries to, directly or indirectly, purchase, own, invest in or
otherwise acquire any Capital Stock, evidence of indebtedness or other
obligation or security or any interest whatsoever in any other Person, or make
or permit to exist any loans, advances or extensions of credit to, or any
investment in cash or by delivery of property in, any other Person, or purchase
or otherwise acquire (whether in one or a series of related transactions) any
portion of the assets, business or properties of another Person (including
pursuant to an Acquisition), or create or acquire any Subsidiary, or become a
partner or joint venturer in any partnership or joint venture (collectively,
"Investments"), or make a commitment or otherwise agree to do any of the
foregoing, other than:
(i) Cash Equivalents;
(ii) Investments consisting of purchases and acquisitions of
inventory, supplies, materials and equipment in the ordinary course of
business;
32
(iii) Investments consisting of loans and advances to employees
for reasonable travel, relocation and business expenses in the ordinary
course of business, extensions of trade credit in the ordinary course
of business, and prepaid expenses incurred in the ordinary course of
business;
(iv) without duplication, Investments consisting of intercompany
Indebtedness permitted under clause (vi) of Section 8.2;
(v) Investments existing on the date hereof and described in
Schedule 8.5;
(vi) Investments consisting of the making of capital
contributions or the purchase of Capital Stock (a) by the Borrower or
any Subsidiary in any other Wholly Owned Subsidiary that is (or
immediately after giving effect to such Investment will be) a
Guarantor, provided that the Borrower complies with the provisions of
Section 6.10 and (b) by any Subsidiary in the Borrower;
(vii) Permitted Acquisitions;
(viii) Investments by any Foreign Subsidiary in the Borrower or
any other Subsidiary;
(ix) Investments in securities of account debtors received
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such account debtors and Investments
received in settlement of obligations of, and other disputes with,
customers and suppliers in the ordinary course of business;
(x) Investments received in connection with the sale or other
disposition of assets, to the extent such sale or other disposition is
permitted hereunder; and
(xi) Investments consisting of deposit accounts maintained by the
Borrower and its Subsidiaries in the ordinary course of business (which
account shall, except with the written consent of the Agent, be
maintained at the Agent or one of the Lenders).
8.6 Restricted Payments. (a) The Borrower will not, and will not
permit or cause any of its Subsidiaries to, directly or indirectly, declare or
make any dividend payment, or make any other distribution of cash, property or
assets, in respect of any of its Capital Stock or any warrants, rights or
options to acquire its Capital Stock, or purchase, redeem, retire or otherwise
acquire for value any shares of its Capital Stock or any warrants, rights or
options to acquire its Capital Stock, or set aside funds for any of the
foregoing in any fiscal year, except that:
(i) the Borrower may declare and make dividend payments or other
distributions payable solely in its common stock; and
(ii) each Wholly Owned Subsidiary of the Borrower may declare and
make dividend payments or other distributions to the Borrower or
another Wholly Owned Subsidiary, to the extent not prohibited under
applicable Requirements of Law.
(b) The Borrower will not, and will not permit or cause any of its
Subsidiaries to, make (or give any notice in respect of) any voluntary or
optional payment or prepayment of principal on any Subordinated Indebtedness, or
directly or indirectly make any redemption (including pursuant to any change of
control provision), retirement, defeasance or other acquisition for value of any
Subordinated Indebtedness, or make any deposit or otherwise set aside funds for
any of the foregoing purposes.
8.7 Transactions with Affiliates. The Borrower will not, and will not
permit or cause any of its Subsidiaries to, enter into any transaction
(including, without limitation, any purchase, sale, lease or exchange of
property or the rendering of any service) with any officer, director,
stockholder or other Affiliate of the Borrower or any Subsidiary, except in the
ordinary course of its business and upon fair and reasonable terms that are no
less favorable to it than would obtain in a comparable arm's length transaction
with a Person other than an Affiliate of the Borrower or such Subsidiary; nor
shall the Borrower (or any of its Subsidiaries) advance any loans or credit to
any officer, director, stockholder or other Affiliate of the Borrower or such
Subsidiary, nor forgive or defer any
33
payment of principal or interest with respect to any existing loan or advance to
any such officer, director, stockholder or other Affiliate; provided, however,
that nothing contained in this Section shall prohibit:
(i) transactions described on Schedule 8.7 or otherwise expressly
permitted under this Agreement;
(ii) the payment by the Borrower of reasonable and customary fees
to members of its board of directors;
(iii) transactions among the Borrower and the Guarantors; and
(iv) loans to officers and directors in an aggregate amount not
to exceed $250,000 outstanding at any time.
8.8 Lines of Business. The Borrower will not, and will not permit or
cause any of its Subsidiaries to, engage in any business other than the
businesses engaged in by it on the date hereof and businesses and activities
reasonably related thereto.
8.9 Certain Amendments. The Borrower will not, and will not permit or
cause any of its Subsidiaries to, (i) amend, modify or waive, or permit the
amendment, modification or waiver of, any provision of any agreement or
instrument evidencing or governing any Subordinated Indebtedness, the effect of
which would be to (a) increase the principal amount due thereunder, (b) shorten
or accelerate the time of payment of any amount due thereunder or change the
maturity thereof, (c) increase the applicable interest rate or amount of any
fees or costs due thereunder, (d) amend any of the subordination provisions
thereunder (including any of the definitions relating thereto), (e) make any
covenant therein more restrictive or add any new covenant or (f) otherwise
materially and adversely affect the Lenders, or breach or otherwise violate any
of the subordination provisions applicable thereto, including, without
limitation, restrictions against payment of principal and interest thereon, or
(ii) amend, modify or change any provision of its articles or certificate of
incorporation or bylaws, or the terms of any class or series of its Capital
Stock, other than in a manner that could not reasonably be expected to adversely
affect the Lenders, or (iii) without the prior written consent of all of the
Lenders, (x) amend, modify or waive any provision in Article 9 of the Junior
Note Indenture or (y) amend, modify or waive any other provision of the Junior
Note Indenture in a manner that would adversely affect the rights of the Lenders
under Article 9 thereof.
8.10 Limitation on Certain Restrictions. The Borrower will not, and
will not permit or cause any of its Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any restriction
or encumbrance on (i) the ability of the Borrower and its Subsidiaries to
perform and comply with their respective obligations under the Credit Documents
or (ii) the ability of any Subsidiary of the Borrower to make any dividend
payments or other distributions in respect of its Capital Stock, to repay
Indebtedness owed to the Borrower or any other Subsidiary, to make loans or
advances to the Borrower or any other Subsidiary, or to transfer any of its
assets or properties to the Borrower or any other Subsidiary, in each case other
than such restrictions or encumbrances existing under or by reason of the Credit
Documents or applicable Requirements of Law.
8.11 No Other Negative Pledges. The Borrower will not, and will not
permit or cause any of its Subsidiaries to, directly or indirectly, enter into
or suffer to exist any agreement or restriction that prohibits or conditions the
creation, incurrence or assumption of any Lien upon or with respect to any part
of its property or assets, whether now owned or hereafter acquired, or agree to
do any of the foregoing, other than as set forth in (i) this Agreement and the
Security Documents, (ii) any agreement or instrument governing property subject
to a Permitted Lien (but only to the extent such agreement or restriction
applies to the assets subject to such Permitted Lien) and (iii) operating leases
of real or personal property entered into by the Borrower or any of its
Subsidiaries as lessee in the ordinary course of business.
8.12 Fiscal Year. The Borrower will not, and will not permit or cause
any of its Subsidiaries to, change the ending date of its fiscal year to a date
other than December 31.
8.13 Accounting Changes. The Borrower will not, and will not permit or
cause any of its Subsidiaries to, make or permit any material change in its
accounting policies or reporting practices, except as may be permitted or
required by GAAP.
34
8.14 Inactive Subsidiaries. The Borrower will not permit the Inactive
Subsidiaries to engage in any kind of business or operations or incur any
Indebtedness without the prior written consent of the Required Lenders.
8.15 Bonus Payments. The Borrower will not, and will not permit or
cause any of its Subsidiaries to, make or permit any discretionary bonus or
similar compensation award to any of their respective officers or employees,
except (i) pursuant to the incentive plans approved by the Bankruptcy Court or
such other comprehensive plan approved in writing by the Required Lenders (which
approval shall not be unreasonably withheld) and (ii) customary signing or
retention bonus payments for purposes of recruiting and/or retaining employees
according to a comprehensive plan approved in writing by the Required Lenders
(which approval shall not be unreasonably withheld).
ARTICLE IX.
EVENTS OF DEFAULT
9.1 Events of Default. The occurrence of any one or more of the
following events shall constitute an "Event of Default":
(a) The Borrower shall fail to pay any principal of any Loan or any
other Obligation when due;
(b) The Borrower shall fail to pay any interest on any Loan or any
other Obligation when due, and such failure continues for five (5) or more
Business Days;
(c) The Borrower shall fail to observe, perform or comply with any
condition, covenant or agreement contained in any of Sections 6.2(e), 6.3(i),
6.8 or in Article VII or Article VIII;
(d) The Borrower or any of its Subsidiaries shall fail to observe,
perform or comply with any condition, covenant or agreement contained in this
Agreement or any of the other Credit Documents other than those enumerated in
subsections (a) and (b) above, and such failure shall continue unremedied for
any grace period specifically applicable thereto or, if no such grace period is
applicable, for a period of thirty (30) days after the earlier of (y) the date
on which a Responsible Officer of the Borrower acquires knowledge thereof and
(z) the date on which written notice thereof is delivered by the Agent or any
Lender to the Borrower;
(e) Any representation or warranty made or deemed made by or on behalf
of the Borrower or any of its Subsidiaries in this Agreement, any of the other
Credit Documents or in any certificate, instrument, report or other document
furnished in connection herewith or therewith or in connection with the
transactions contemplated hereby or thereby shall prove to have been false in
any material respect as of the time made, deemed made or furnished;
(f) The Borrower or any of its Subsidiaries shall (i) fail to pay when
due (whether by scheduled maturity, acceleration or otherwise and after giving
effect to any applicable grace period) any principal of or interest on any
Indebtedness (other than the Indebtedness incurred pursuant to this Agreement)
having an aggregate principal amount of at least $750,000 or (ii) fail to
observe, perform or comply with any condition, covenant or agreement contained
in any agreement or instrument evidencing or relating to any such Indebtedness,
or any other event shall occur or condition exist in respect thereof, and the
effect of such failure, event or condition is to cause, or permit the holder or
holders of such Indebtedness (or a trustee or agent on its or their behalf) to
cause (with the giving of notice, lapse of time, or both), such Indebtedness to
become due, or to be prepaid, redeemed, purchased or defeased, prior to its
stated maturity;
(g) The Borrower or any of its Subsidiaries shall after Plan
Effectiveness (i) file a voluntary petition or commence a voluntary case seeking
liquidation, winding-up, reorganization, dissolution, arrangement, readjustment
of debts or any other relief under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to controvert in a timely and
appropriate manner, any petition or case of the type described in subsection (h)
below, (iii) apply for or consent to the appointment of or taking possession by
a custodian, trustee, receiver or similar official for or of itself or all or a
substantial part of its properties or assets, (iv) fail generally, or admit in
writing its inability, to pay its debts generally as they become
35
due, (v) make a general assignment for the benefit of creditors or (vi) take
any corporate action to authorize or approve any of the foregoing;
(h) Any involuntary petition or case shall be filed or commenced
against the Borrower or any of its Subsidiaries seeking liquidation, winding-up,
reorganization, dissolution, arrangement, readjustment of debts, the appointment
of a custodian, trustee, receiver or similar official for it or all or a
substantial part of its properties or any other relief under the Bankruptcy Code
or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, and such petition or case shall continue undismissed and
unstayed for a period of sixty (60) days; or an order, judgment or decree
approving or ordering any of the foregoing shall be entered in any such
proceeding;
(i) Any one or more money judgments, writs or warrants of attachment,
executions or similar processes involving an aggregate amount (exclusive of
amounts fully bonded or covered by insurance as to which the surety or insurer,
as the case may be, has acknowledged its liability in writing) in excess of
$750,000 shall be entered or filed against the Borrower or any of its
Subsidiaries or any of their respective properties and the same shall not be
dismissed, stayed or discharged for a period of sixty (60) days or in any event
later than five days prior to the date of any proposed sale thereunder;
(j) Any Security Document to which the Borrower or any of its
Subsidiaries is now or hereafter a party shall for any reason cease to be in
full force and effect or cease to be effective to give the Agent a valid and
perfected security interest in and Lien upon the Collateral purported to be
covered thereby, subject to no Liens other than Permitted Liens, in each case
unless any such cessation occurs in accordance with the terms thereof or is due
to any act or failure to act on the part of the Agent or any Lender; or the
Borrower or any such Subsidiary shall assert any of the foregoing; or any
Subsidiary or any Person acting on behalf of any such Subsidiary shall deny or
disaffirm such Subsidiary's obligations under the Guaranty;
(k) Any ERISA Event or any other event or condition shall occur or
exist with respect to any Plan or Multiemployer Plan and, as a result thereof,
together with all other ERISA Events and other events or conditions then
existing, the Borrower and its ERISA Affiliates have incurred or would be
reasonably likely to incur liability to any one or more Plans or Multiemployer
Plans or to the PBGC (or to any combination thereof) in excess of $500,000;
(l) Any one or more licenses, permits, accreditations or
authorizations of the Borrower or any Subsidiary shall be suspended, limited or
terminated or shall not be renewed, or any other action shall be taken, by any
Governmental Authority in response to any alleged failure by the Borrower or any
Subsidiary to be in compliance with applicable Requirements of Law, and such
action, individually or in the aggregate, has or would be reasonably likely to
have a Material Adverse Effect;
(m) Any one or more Environmental Claims shall have been asserted
against the Borrower or any of its Subsidiaries (or a reasonable basis shall
exist therefor); the Borrower and its Subsidiaries have incurred or would be
reasonably likely to incur liability as a result thereof; and such liability,
individually or in the aggregate, has or would be reasonably likely to have a
Material Adverse Effect; or
(n) The Borrower or any Subsidiary shall be in breach of or default
under the terms of any one or more agreements for the lease of real property
upon which Collateral having an aggregate fair market value in excess of
$500,000 is maintained (other than defaults or breaches under agreements that
have been or are to be rejected under the Cases and any defaults or breaches
with respect to agreements to be assumed under the Cases that will be cured upon
payment of the respective amounts to be paid in connection with such assumption
pursuant to Section 7.3 of the Plan of Reorganization), and such breach or
default has had, or is reasonably likely to have, a Material Adverse Effect; or
any agreement or contract (other than under agreements that have been or are to
be rejected under the Cases) to which the Borrower or any of its Subsidiaries is
a party shall be terminated or shall, for any other reason, fail to be in full
force and effect and enforceable in accordance with its terms, and such event or
condition, together with all other such events or conditions, if any, has or
would be reasonably likely to have a Material Adverse Effect.
9.2 Remedies: Acceleration, etc. Upon and at any time after the
occurrence and during the continuance of any Event of Default, the Agent shall
at the direction, or may with the consent, of the Required Lenders, take any or
all of the following actions at the same or different times:
36
(a) Declare all or any part of the outstanding principal amount of the
Loans to be immediately due and payable, whereupon the principal amount so
declared to be immediately due and payable, together with all interest accrued
thereon and all other amounts payable under this Agreement, the Notes and the
other Credit Documents, shall become immediately due and payable without
presentment, demand, protest, notice of intent to accelerate or other notice or
legal process of any kind, all of which are hereby knowingly and expressly
waived by the Borrower (provided that, upon the occurrence of an Event of
Default pursuant to Section 9.1(g) or Section 9.1(h), all of the outstanding
principal amount of the Loans and all other amounts described in this subsection
(a) shall automatically become immediately due and payable without presentment,
demand, protest, notice of intent to accelerate or other notice or legal process
of any kind, all of which are hereby knowingly and expressly waived by the
Borrower); and
(b) Exercise all rights and remedies available to it under this
Agreement, the other Credit Documents and applicable law.
9.3 Remedies: Set-Off. In addition to all other rights and remedies
available under the Credit Documents or applicable law or otherwise, upon and at
any time after the occurrence and during the continuance of any Event of
Default, each Lender may, and each is hereby authorized by the Borrower, at any
such time and from time to time, to the fullest extent permitted by applicable
law, without presentment, demand, protest or other notice of any kind, all of
which are hereby knowingly and expressly waived by the Borrower, to set off and
to apply any and all deposits (general or special, time or demand, provisional
or final) and any other property at any time held (including at any branches or
agencies, wherever located), and any other indebtedness at any time owing, by
such Lender to or for the credit or the account of the Borrower against any or
all of the Obligations to such Lender now or hereafter existing, whether or not
such obligations may be contingent or unmatured, the Borrower hereby granting to
each Lender a continuing security interest in and Lien upon all such deposits
and other property as security for such Obligations. Each Lender agrees promptly
to notify the Borrower and the Agent after any such set-off and application;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application.
9.4 Ratable Payments. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Loans (other than payments received pursuant to
Section 3.1 or 3.2 or payments to a particular Lender authorized or directed by
order of the Bankruptcy Court) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made.
ARTICLE X.
THE AGENT
10.1 Appointment. Each Lender hereby irrevocably appoints and
authorizes Bank One to act as Agent hereunder and under the other Credit
Documents and to take such actions as agent on its behalf hereunder and under
the other Credit Documents, and to exercise such powers and to perform such
duties, as are specifically delegated to the Agent by the terms hereof or
thereof, together with such other powers and duties as are reasonably incidental
thereto.
10.2 Nature of Duties. The Agent shall have no duties or
responsibilities other than those expressly set forth in this Agreement and the
other Credit Documents. The Agent shall not have, by reason of this Agreement or
any other Credit Document, a fiduciary relationship in respect of any Lender;
and nothing in this Agreement or any other Credit Document, express or implied,
is intended to or shall be so construed as to impose upon the Agent any
obligations or liabilities in respect of this Agreement or any other Credit
Document except as expressly set forth herein or therein. The Agent may execute
any of its duties under this Agreement or any other Credit Document by or
through agents or attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any agents or
37
attorneys-in-fact that it selects with reasonable care. The Agent shall be
entitled to consult with legal counsel, independent public accountants and other
experts selected by it with respect to all matters pertaining to this Agreement
and the other Credit Documents and its duties hereunder and thereunder and shall
not be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts. The Lenders
hereby acknowledge that the Agent shall not be under any duty to take any
discretionary action permitted to be taken by it pursuant to the provisions of
this Agreement or any other Credit Document unless it shall be requested in
writing to do so by the Required Lenders (or, where a higher percentage of the
Lenders is expressly required hereunder, such Lenders).
10.3 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(i) liable for any action taken or omitted to be taken by it or such Person
under or in connection with the Credit Documents, except for its or such
Person's own gross negligence or willful misconduct or breach of contract with
respect to the Credit Documents, (ii) responsible in any manner to any Lender
for any recitals, statements, information, representations or warranties herein
or in any other Credit Document or in any document, instrument, certificate,
report or other writing delivered in connection herewith or therewith, for the
execution, effectiveness, genuineness, validity, enforceability or sufficiency
of this Agreement or any other Credit Document, or for the financial condition
of the Borrower, its Subsidiaries or any other Person or (iii) required to
ascertain or make any inquiry concerning the performance or observance of any of
the terms, provisions or conditions of this Agreement or any other Credit
Document or the existence or possible existence of any Default or Event of
Default, or to inspect the properties, books or records of the Borrower or any
of its Subsidiaries.
10.4 Reliance by Agent. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any notice, statement, consent or other
communication (including, without limitation, any thereof by telephone,
telecopy, telex, telegram or cable) believed by it in good faith to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons. The Agent may deem and treat each Lender as the owner of its interest
hereunder for all purposes hereof unless and until a written notice of the
assignment, negotiation or transfer thereof shall have been given to the Agent
in accordance with the provisions of this Agreement. The Agent shall be entitled
to refrain from taking or omitting to take any action in connection with this
Agreement or any other Credit Document (i) if such action or omission would, in
the reasonable opinion of the Agent, violate any applicable law or any provision
of this Agreement or any other Credit Document or (ii) unless and until it shall
have received such advice or concurrence of the Required Lenders (or, where a
higher percentage of the Lenders is expressly required hereunder, such Lenders)
as it deems appropriate or it shall first have been indemnified to its
satisfaction by the Lenders against any and all liability and expense (other
than liability and expense arising from its own gross negligence or willful
misconduct) that may be incurred by it by reason of taking, continuing to take
or omitting to take any such action. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Agent as a result of the
Agent's acting or refraining from acting hereunder or under any other Credit
Document in accordance with the instructions of the Required Lenders (or, where
a higher percentage of the Lenders is expressly required hereunder, such
Lenders), and such instructions and any action taken or failure to act pursuant
thereto shall be binding upon all of the Lenders (including all subsequent
Lenders).
10.5 Non-Reliance on Agent and Other Lenders. Each Lender expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representation
or warranty to it and that no act by the Agent or any such Person hereinafter
taken, including any review of the affairs of the Borrower and its Subsidiaries,
shall be deemed to constitute any representation or warranty by the Agent to any
Lender. Each Lender represents to the Agent that (i) it has, independently and
without reliance upon the Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, properties, financial
and other condition and creditworthiness of the Borrower and its Subsidiaries
and made its own decision to enter into this Agreement and extend credit to the
Borrower hereunder, and (ii) it will, independently and without reliance upon
the Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action hereunder and under the
other Credit Documents and to make such investigation as it deems necessary to
inform itself as to the business, prospects, operations, properties, financial
and other condition and creditworthiness of the Borrower and its Subsidiaries.
Except as expressly provided in this Agreement and the other Credit Documents,
the Agent shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or
38
other information concerning the business, prospects, operations, properties,
financial or other condition or creditworthiness of the Borrower, its
Subsidiaries or any other Person that may at any time come into the possession
of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
10.6 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Agent shall have received written notice from the Borrower or a Lender
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." In the event that the Agent
receives such a notice, the Agent will give notice thereof to the Lenders as
soon as reasonably practicable; provided, however, that if any such notice has
also been furnished to the Lenders, the Agent shall have no obligation to notify
the Lenders with respect thereto. The Agent shall (subject to Sections 10.4 and
11.5) take such action with respect to such Default or Event of Default as shall
reasonably be directed by the Required Lenders; provided that, unless and until
the Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders except to the extent that this Agreement expressly
requires that such action be taken, or not be taken, only with the consent or
upon the authorization of the Required Lenders or all of the Lenders.
10.7 Indemnification. To the extent the Agent is not reimbursed by or
on behalf of the Borrower, and without limiting the obligation of the Borrower
to do so, the Lenders agree (i) to indemnify the Agent and its officers,
directors, employees, agents, attorneys-in-fact and Affiliates, ratably in
proportion to their respective percentages as used in determining the Required
Lenders as of the date of determination, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, attorneys' fees and expenses) or
disbursements of any kind or nature whatsoever that may at any time (including,
without limitation, at any time following the repayment in full of the Loans) be
imposed on, incurred by or asserted against the Agent in any way relating to or
arising out of this Agreement or any other Credit Document or any documents
contemplated by or referred to herein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Agent under or in connection with
any of the foregoing, and (ii) to reimburse the Agent upon demand, ratably in
proportion to their respective percentages as used in determining the Required
Lenders as of the date of determination, for any expenses incurred by the Agent
in connection with the preparation, negotiation, execution, delivery,
administration, amendment, modification, waiver or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement or any of the other Credit
Documents (including, without limitation, reasonable attorneys' fees and
expenses and compensation of agents and employees paid for services rendered on
behalf of the Lenders); provided, however, that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent
resulting from the gross negligence or willful misconduct of the party to be
indemnified.
10.8 The Agent in its Individual Capacity. With respect to the Loans
made by it and the Note or Notes issued to it, the Agent in its individual
capacity and not as Agent shall have the same rights and powers under the Credit
Documents as any other Lender and may exercise the same as though it were not
performing the agency duties specified herein; and the terms "Lenders,"
"Required Lenders," "holders of Notes" and any similar terms shall, unless the
context clearly otherwise indicates, include the Agent in its individual
capacity. The Agent and its Affiliates may accept deposits from, lend money to,
make investments in, and generally engage in any kind of banking, trust,
financial advisory or other business with the Borrower, any of its Subsidiaries
or any of their respective Affiliates as if the Agent were not performing the
agency duties specified herein, and may accept fees and other consideration from
any of them for services in connection with this Agreement and otherwise without
having to account for the same to the Lenders.
10.9 Successor Agent. The Agent may resign at any time by giving ten
(10) days' prior written notice to the Borrower and the Lenders. Upon any such
notice of resignation, the Required Lenders will, with the prior written consent
of the Borrower (which consent shall not be unreasonably withheld), appoint from
among the Lenders a successor to the Agent (provided that the Borrower's consent
shall not be required in the event a Default or Event of Default shall have
occurred and be continuing). If no successor to the Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within such ten-day period, then the retiring Agent may, on behalf of the
Lenders and after consulting with the Lenders and the Borrower, appoint a
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successor Agent from among the Lenders. Upon the acceptance of any appointment
as Agent by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder and under the other Credit Documents. After any retiring
Agent's resignation as Agent, the provisions of this Article shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent.
If no successor to the Agent has accepted appointment as Agent by the thirtieth
(30th) day following a retiring Agent's notice of resignation, the retiring
Agent's resignation shall nevertheless thereupon become effective, and the
Lenders shall thereafter perform all of the duties of the Agent hereunder and
under the other Credit Documents until such time, if any, as the Required
Lenders appoint a successor Agent as provided for herein above.
10.10 Collateral Matters. (a) The Agent is hereby authorized on
behalf of the Lenders, without the necessity of any notice to or further consent
from the Lenders, from time to time (but without any obligation) to take any
action with respect to the Collateral and the Security Documents that may be
necessary to perfect and maintain perfected the Liens upon the Collateral
granted pursuant to the Security Documents.
(b) The Lenders hereby authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon payment in full of all of the Obligations, (ii) constituting
property sold or to be sold or disposed of as part of or in connection with any
disposition expressly permitted hereunder or under any other Credit Document or
to which the Required Lenders have consented, (iii) constituting property in
which the Borrower or the applicable Subsidiary owned no interest at the time
the Lien was granted or at any time thereafter, (iv) constituting property
leased to the Borrower or a Subsidiary under a lease which has expired or been
terminated in a transaction permitted hereunder or is about to expire and which
has not been, and is not intended by the Borrower or such Subsidiary to be,
renewed or extended or (v) otherwise pursuant to and in accordance with the
provisions of any applicable Credit Document. Upon request by the Agent at any
time, the Lenders will confirm in writing the Agent's authority to release
Collateral pursuant to this subsection (b).
ARTICLE XI.
MISCELLANEOUS
11.1 Fees and Expenses. The Borrower agrees (i) to pay upon demand
all reasonable and documented out-of-pocket costs and expenses of the Agent
(including, without limitation, the reasonable and documented fees and expenses
of Xxxxxxxxx Xxxxxx PLLC, counsel to the Agent, and AlixPartners, LLC, financial
consultant to the Agent) incurred in connection with (w) the preparation,
negotiation, execution and delivery of this Agreement and the other Credit
Documents, and any amendment, modification or waiver of this Agreement or any
other Credit Document or consent with respect hereto or thereto, (x) the
administration, monitoring and review of the Loans and the Collateral
(including, without limitation, reasonable and documented out-of-pocket expenses
for travel, meals, long-distance telephone calls, wire transfers, facsimile
transmissions and copying and with respect to the engagement of appraisers,
consultants, auditors or similar Persons by the Agent at any time after Plan
Effectiveness to render opinions concerning the Borrower's financial condition
and the value of the Collateral), (y) any attempt to inspect, verify, protect,
collect, sell, liquidate or otherwise dispose of any Collateral and (z) the
creation, perfection and maintenance of the perfection of the Agent's Liens upon
the Collateral, including, without limitation, Lien search, filing and recording
fees, (ii) to pay upon demand all reasonable and documented out-of-pocket costs
and expenses of the Agent and each Lender (including, without limitation,
reasonable and documented attorneys' fees and expenses) in connection with (y)
any restructuring of the credit arrangement provided under this Agreement,
whether in the nature of a "work-out," in any insolvency or bankruptcy
proceeding or otherwise and (z) the enforcement, attempted enforcement or
preservation of any rights or remedies under this Agreement or any of the other
Credit Documents, whether in any action, suit or proceeding (including any
bankruptcy or insolvency proceeding) or otherwise and (iii) to pay and hold the
Agent and each Lender harmless from and against all liability for any
intangibles, documentary, stamp or other similar taxes, fees and excises, if any
(to the extent the same constitute Non-Excluded Taxes), including any interest
and penalties, and any finder's or brokerage fees, commissions and expenses
(other than any fees, commissions or expenses of finders or brokers engaged by
the Agent or any Lender), that may be payable in connection with the
transactions contemplated by this Agreement and the other Credit Documents.
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11.2 Indemnification. The Borrower agrees to indemnify and hold the
Agent and each Lender and each of their respective directors, officers,
employees, agents and Affiliates (each, an "Indemnified Person") harmless from
and against any and all claims, losses, damages, obligations, liabilities,
penalties, costs and expenses (including, without limitation, reasonable and
documented attorneys' fees and expenses) of any kind or nature whatsoever,
whether direct, indirect or consequential (collectively, "Indemnified Costs"),
that may at any time be imposed on, incurred by or asserted against any such
Indemnified Person as a result of, arising from or in any way relating to the
preparation, execution, performance or enforcement of this Agreement or any of
the other Credit Documents, any of the transactions contemplated herein or
therein or any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loans (including, without
limitation, in connection with the actual or alleged generation, presence,
discharge or release of any Hazardous Substances on, into or from, or the
transportation of Hazardous Substances to or from, any real property at any time
owned or leased by the Borrower or any of its Subsidiaries, any other
Environmental Claims or any violation of or liability under any Environmental
Law), or any action, suit or proceeding (including any inquiry or investigation)
by any Person, whether threatened or initiated, related to any of the foregoing,
and in any case whether or not such Indemnified Person is a party to any such
action, proceeding or suit or a subject of any such inquiry or investigation;
provided, however, that no Indemnified Person shall have the right to be
indemnified hereunder for any Indemnified Costs to the extent resulting from the
gross negligence or willful misconduct of such Indemnified Person. All of the
foregoing Indemnified Costs of any Indemnified Person shall be paid or
reimbursed by the Borrower, as and when incurred and upon demand.
11.3 Governing Law; Consent to Jurisdiction. THIS AGREEMENT AND THE
OTHER CREDIT DOCUMENTS HAVE BEEN EXECUTED, DELIVERED AND ACCEPTED IN, AND SHALL
BE DEEMED TO HAVE BEEN MADE IN, MICHIGAN AND SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN (WITHOUT
REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF); THE BORROWER HEREBY CONSENTS
TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE COURT WITHIN XXXXX COUNTY,
MICHIGAN OR ANY FEDERAL COURT LOCATED WITHIN THE EASTERN DISTRICT OF THE STATE
OF MICHIGAN FOR ANY PROCEEDING INSTITUTED HEREUNDER OR UNDER ANY OF THE OTHER
CREDIT DOCUMENTS, OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OF THE OTHER CREDIT DOCUMENTS, OR ANY PROCEEDING TO WHICH THE AGENT OR ANY
LENDER OR THE BORROWER IS A PARTY, INCLUDING ANY ACTIONS BASED UPON, ARISING OUT
OF, OR IN CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT OR ANY LENDER OR THE BORROWER.
THE BORROWER IRREVOCABLY AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF
APPEAL) BY ANY JUDGMENT RENDERED OR RELIEF GRANTED THEREBY AND FURTHER WAIVES
ANY OBJECTION THAT IT MAY HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE
OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY SUCH PROCEEDING. THE BORROWER
CONSENTS THAT ALL SERVICE OF PROCESS BE MADE BY REGISTERED OR CERTIFIED MAIL
DIRECTED TO IT AT ITS ADDRESS SET FORTH HEREINBELOW, AND SERVICE SO MADE SHALL
BE DEEMED TO BE COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE
(3) DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID AND
PROPERLY ADDRESSED. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE
AGENT OR ANY LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER IN
THE COURTS OF ANY OTHER JURISDICTION.
11.4 Notices. All notices and other communications provided for
hereunder shall be in writing (including facsimile transmission) and mailed,
telecopied or delivered to the party to be notified at the following addresses:
(a) if to the Borrower, to Lason, Inc., 0000 Xxxxxxxxxx Xxxxxxx, Xxxx,
Xxxxxxxx 00000, Attention: Xx. Xxxxxx X. Xxxxxx, Telecopy No. (000) 000-0000,
with a copy to Mayer, Brown, Xxxx & Maw, Attention: Xx. Xxxxxxxx X. Xxxxxx,
Esq., Telecopy No. (000) 000-0000;
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(b) if to the Agent, to Bank One, NA, 000 Xxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000, Attention: Xxxxxxxxx X. Xxxxxx, Telecopy No. (000) 000-0000,
with a copy to Xxxxxxxxx Xxxxxx, PLLC, Attention: Xx. Xxxxxxx X. Xxxxxxx,
Telecopy No. (000) 000-0000; and
(c) if to any Lender, to it at the address set forth on its signature
page hereto (or if to any Lender not a party hereto as of the date hereof, at
the address set forth in its Assignment and Acceptance);
or in each case, to such other address as any party may designate for itself by
like notice to all other parties hereto. All such notices and communications
shall be deemed to have been given (i) if mailed as provided above by any method
other than overnight delivery service, on the third Business Day after deposit
in the mails, (ii) if sent by overnight delivery service or telecopied when
delivered or transmitted by telecopier, respectively, or (iii) if delivered by
hand, upon delivery; provided that notices and communications to the Agent shall
not be effective until received by the Agent.
11.5 Amendments, Waivers, etc. No amendment, modification, waiver or
discharge or termination of, or consent to any departure by the Borrower from,
any provision of this Agreement shall be effective unless in a writing signed by
the Required Lenders (or by the Agent at the direction or with the consent of
the Required Lenders), and then the same shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no such amendment, modification, waiver, discharge, termination or consent shall
(i) unless agreed to by each Lender directly affected thereby,
(a) reduce or forgive the principal amount of any Loan, reduce the rate
of or forgive any interest thereon, or reduce or forgive any fees or
other Obligations (other than fees payable to the Agent for its own
account) or (b) extend the Facility Termination Date or any other date
fixed for the payment of any principal of or interest on any Loan or
any fees (other than fees payable to the Agent for its own account);
(ii) unless agreed to by all of the Lenders, (a) change the
percentage of the aggregate unpaid principal amount of the Loans that
shall be required for the Lenders or any of them to take or approve, or
direct the Agent to take, any action hereunder (including as set forth
in the definition of "Required Lenders"), (b) except pursuant to a
transaction permitted by the terms of this Agreement or any other
Credit Document, release all or substantially all of the Collateral or
release any Guarantor from its obligations under the Guaranty or (c)
change any provision of this Section; and
(iii) unless agreed to by the Agent in addition to the Lenders
required as provided hereinabove to take such action, affect the
respective rights or obligations of the Agent hereunder or under any of
the other Credit Documents;
and provided further that any Hedge Agreement to which any Lender is a party may
be amended or modified, and any rights thereunder waived, in a writing signed by
the parties thereto.
11.6 Assignments, Participations. (a) Each Lender may assign to one
or more Eligible Assignees (each, an "Assignee") all or a portion of its rights
and obligations under this Agreement (including, without limitation, all or a
portion of the outstanding Loans made by it and the Note or Notes held by it);
provided, however, that (i) any such assignment (other than an assignment to a
Lender or an Affiliate of a Lender) shall not be made without the prior written
consent of the Agent (to be evidenced by its counterexecution of the relevant
Assignment and Acceptance), which consent shall not be unreasonably withheld,
(ii) each such assignment shall be of a uniform, and not varying, percentage of
all of the assigning Lender's rights and obligations under this Agreement, (iii)
except in the case of an assignment to a Lender or an Affiliate of a Lender, no
such assignment shall be in an aggregate principal amount (determined as of the
date of the Assignment and Acceptance with respect to such assignment) less than
$1,000,000 and (iv) the parties to each such assignment will execute and deliver
to the Agent, for its acceptance and recording in the Register, an Assignment
and Acceptance, together with any Note or Notes subject to such assignment, and
will pay a nonrefundable processing fee of $3,500 to the Agent for its own
account. Upon such execution, delivery, acceptance and recording of the
Assignment and Acceptance, from and after the effective date specified therein,
which effective date shall be at least five Business Days after the execution
thereof (unless the Agent shall otherwise agree), (A) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and Acceptance, shall have
the rights
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and obligations of the assigning Lender hereunder with respect thereto and (B)
the assigning Lender shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (other than rights under the provisions of this Agreement and the
other Credit Documents relating to indemnification or payment of fees, costs and
expenses, to the extent such rights relate to the time prior to the effective
date of such Assignment and Acceptance) and be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of such assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto). The terms
and provisions of each Assignment and Acceptance shall, upon the effectiveness
thereof, be incorporated into and made a part of this Agreement, and the
covenants, agreements and obligations of each Lender set forth therein shall be
deemed made to and for the benefit of the Agent and the other parties hereto as
if set forth at length herein.
(b) The Agent will maintain at its address for notices referred to
herein a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lenders and
the principal amount of the Loans owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower and each Lender at any reasonable time and from time
to time upon reasonable prior notice.
(c) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an Assignee and, if required,
counterexecuted by the Borrower, together with the Note or Notes subject to such
assignment and the processing fee referred to in subsection (a) above, the Agent
will (i) accept such Assignment and Acceptance, (ii) on the effective date
thereof, record the information contained therein in the Register and (iii) give
notice thereof to the Borrower and the Lenders. Within five (5) Business Days
after its receipt of such notice, the Borrower, at its own expense, will execute
and deliver to the Agent, in exchange for the surrendered Note or Notes, a new
Note or Notes to the order of the Assignee (and, if the assigning Lender has
retained any portion of its rights and obligations hereunder, to the order of
the assigning Lender), prepared in accordance with the provisions of Section 2.8
as necessary to reflect, after giving effect to the assignment, the Loans of the
Assignee and (to the extent of any retained interests) the assigning Lender,
dated the date of the replaced Note or Notes. The Agent will return canceled
Notes to the Borrower.
(d) Each Lender may, without the consent of the Borrower, the Agent or
any other Lender, sell to one or more other Persons (each, a "Participant")
participations in any portion comprising less than all of its rights and
obligations under this Agreement (including, without limitation, a portion of
the outstanding Loans made by it and the Note or Notes held by it); provided,
however, that (i) such Lender's obligations under this Agreement shall remain
unchanged and such Lender shall remain solely responsible for the performance of
such obligations, (ii) no Lender shall sell any participation that, when taken
together with all other participations, if any, sold by such Lender, covers all
of such Lender's rights and obligations under this Agreement (other than to an
Affiliate of such Lender), (iii) the Borrower, the 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, and no Lender shall
permit any Participant to have any voting rights or any right to control the
vote of such Lender with respect to any amendment, modification, waiver, consent
or other action hereunder or under any other Credit Document (except as to
actions that would (x) reduce or forgive the principal amount of any Loan,
reduce the rate of or forgive any interest thereon or reduce or forgive any fees
or (y) extend the Facility Termination Date or any other date fixed for the
payment of any principal of or interest on any Loan or any fees) and (iv) no
Participant shall have any rights under this Agreement or any of the other
Credit Documents, each Participant's rights against the granting Lender in
respect of any participation to be those set forth in the participation
agreement, and all amounts payable by the Borrower hereunder shall be determined
as if such Lender had not granted such participation. Notwithstanding the
foregoing, each Participant shall have the rights of a Lender for purposes of
Sections 3.2 and 9.4, and shall be entitled to the benefits thereto, to the
extent that the Lender granting such participation would be entitled to such
benefits if the participation had not been made, provided that (i) no
Participant shall be entitled to receive any greater amount pursuant to any of
such Sections than the Lender granting such participation would have been
entitled to receive in respect of the amount of the participation made by such
Lender to such Participant had such participation not been made and (ii) any
Participant not incorporated under the laws of the United States of America or
any State thereof agrees to comply with the provisions of Section 3.2(c) to the
same extent as if it were a Lender.
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(e) Nothing in this Agreement shall be construed to prohibit any
Lender from pledging or assigning all or any portion of its rights and interest
hereunder or under any Note to any Federal Reserve Bank as security for
borrowings therefrom; provided, however, that no such pledge or assignment shall
release a Lender from any of its obligations hereunder.
(f) Any Lender or participant may, in connection with any assignment
or participation or proposed assignment or participation pursuant to this
Section, disclose to the Assignee or Participant or proposed Assignee or
Participant any information relating to the Borrower and its Subsidiaries
furnished to it by or on behalf of any other party hereto, provided that such
Assignee or Participant or proposed Assignee or Participant agrees in writing to
keep such information confidential to the same extent required of the Lenders
under Section 11.12.
11.7 No Waiver. The rights and remedies of the Agent and the Lenders
expressly set forth in this Agreement and the other Credit Documents are
cumulative and in addition to, and not exclusive of, all other rights and
remedies available at law, in equity or otherwise. No failure or delay on the
part of the Agent or any Lender in exercising any right, power or privilege
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude other or further exercise thereof or
the exercise of any other right, power or privilege or be construed to be a
waiver of any Default or Event of Default. No course of dealing between any of
the Borrower and the Agent or the Lenders or their agents or employees shall be
effective to amend, modify or discharge any provision of this Agreement or any
other Credit Document or to constitute a waiver of any Default or Event of
Default. No notice to or demand upon the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of the Agent or any Lender to
exercise any right or remedy or take any other or further action in any
circumstances without notice or demand.
11.8 Successors and Assigns. This Agreement shall be binding upon,
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, and all references herein to any party shall be
deemed to include its successors and assigns; provided, however, that (i) the
Borrower shall not sell, assign or transfer any of its rights, interests, duties
or obligations under this Agreement without the prior written consent of all of
the Lenders and (ii) any Assignees and Participants shall have such rights and
obligations with respect to this Agreement and the other Credit Documents as are
provided for under and pursuant to the provisions of Section 11.6.
11.9 Survival. All representations, warranties and agreements made by
or on behalf of the Borrower or any of its Subsidiaries in this Agreement and in
the other Credit Documents shall survive the execution and delivery hereof or
thereof and the making and repayment of the Loans. In addition, notwithstanding
anything herein or under applicable law to the contrary, the provisions of this
Agreement and the other Credit Documents relating to indemnification or payment
of fees, costs and expenses, including, without limitation, the provisions of
Article III and Sections 10.7, 11.1 and 11.2, shall survive the payment in full
of all Loans and any termination of this Agreement or any of the other Credit
Documents.
11.10 Severability. To the extent any provision of this Agreement is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
11.11 Construction. The headings of the various articles, sections and
subsections of this Agreement have been inserted for convenience only and shall
not in any way affect the meaning or construction of any of the provisions
hereof. Except as otherwise expressly provided herein and in the other Credit
Documents, in the event of any inconsistency or conflict between any provision
of this Agreement and any provision of any of the other Credit Documents, the
provision of this Agreement shall control.
11.12 Confidentiality. Each Lender agrees to keep confidential,
pursuant to its customary procedures for handling confidential information of a
similar nature and in accordance with safe and sound banking practices, all
nonpublic information provided to it by or on behalf of the Borrower or any of
its Subsidiaries in connection with this Agreement or any other Credit Document;
provided, however, that any Lender may disclose such information (i) to its
directors, employees and agents and to its auditors, counsel and other
professional advisors, (ii) at the
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demand or request of any bank regulatory authority, court or other Governmental
Authority having or asserting jurisdiction over such Lender, as may be required
pursuant to subpoena or other legal process, or otherwise in order to comply
with any applicable Requirement of Law, (iii) in connection with any proceeding
to enforce its rights hereunder or under any other Credit Document or any other
litigation or proceeding related hereto or to which it is a party, (iv) to the
Agent or any other Lender, (v) to the extent the same has become publicly
available other than as a result of a breach of this Agreement and (vi) pursuant
to and in accordance with the provisions of Section 11.6(f).
11.13 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
11.14 Entire Agreement. THIS AGREEMENT AND THE OTHER DOCUMENTS AND
INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION HEREWITH (A) EMBODY THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND THERETO RELATING TO
THE SUBJECT MATTER HEREOF AND THEREOF, (B) SUPERSEDE ANY AND ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS OF SUCH PERSONS, ORAL OR WRITTEN, RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF AND (C) MAY NOT BE AMENDED, SUPPLEMENTED,
CONTRADICTED OR OTHERWISE MODIFIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
11.15 Release. The Borrower represents and warrants that, as of the
date hereof, it is not aware of any claims or causes of action against the Agent
or any Lender, any participant lender or any of their successors or assigns, and
that it has no defenses, offsets or counterclaims with respect to the
indebtedness owed by the Borrower to the Lenders. Notwithstanding this
representation and as further consideration for the agreements and
understandings herein, the Borrower, on behalf of itself and its employees,
agents, executors, heirs, successors and assigns, hereby releases the Agent and
the Lenders, their respective predecessors, officers, directors, employees,
agents, attorneys, affiliates, subsidiaries, successors and assigns, from any
liability, claim, right or cause of action which now exists or hereafter arises
as a result of acts, omissions or events occurring on or prior to the date
hereof, whether known or unknown, including but not limited to claims arising
from or in any way related to the Pre-Petition Credit Agreement or the business
relationship among the Borrower, the Guarantors, the Agent and the Lenders.
11.16 Waiver of Jury Trial. THE BORROWER, EACH LENDER AND THE AGENT
HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ITS RESPECTIVE RIGHTS
TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, OR ANY PROCEEDING TO
WHICH THE BORROWER, ANY LENDER OR THE AGENT IS A PARTY, INCLUDING ANY ACTIONS
BASED UPON, ARISING OUT OF, OR IN CONNECTION WITH ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY BORROWER, ANY
LENDER OR THE AGENT. The scope of this waiver is intended to be all-encompassing
of any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including, without limitation, contract
claims, tort claims, breach of duty claims and all other common law and
statutory claims. The Borrower, each Lender and the Agent, (i) acknowledges that
this waiver is a material inducement to enter into a business relationship, that
it has relied on this waiver in entering into this Agreement and that it will
continue to rely on this waiver in its related future dealings with the other
parties hereto, and (ii) further warrants and represents that it has reviewed
this waiver with its legal counsel and that, based upon such review, it
knowingly and voluntarily waives its jury trial rights to the extent permitted
by applicable law. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, MODIFICATIONS OR SUPPLEMENTS TO OR RESTATEMENTS OF THIS
AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS. IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
45
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
LASON, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Title: Chief Financial Officer
-----------------------------
Amount of Term Credit BANK ONE, NA, as Agent and as a
--------------------- Lender
$ 11,533,211 (23.020%)
By: /s/ Xxxxxxxxx X. Xxxxxx
--------------------------------------------
Title: First Vice President
-----------------------------------
Amount of Term Credit COMERICA BANK
---------------------
$ 4,680,405 (9.342%)
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------------
Title: Vice President
-----------------------------------
Amount of Term Credit ABN AMRO BANK N.V.
$ 3,744,324 (7.474%)
- ------------------
By: /s/ Xxxxxx X. Xxxxxxxx / Xxxxxx X. Xxxxxxx
--------------------------------------------
Title: Group Senior VP / Group President
-----------------------------------
Amount of Term Credit UNION BANK OF CALIFORNIA, N.A.
---------------------
$ 2,995,459 (5.979%)
By: /s/ Xxxxxx X. Xxxx
--------------------------------------------
Title: Vice President
---------------------------------
46
Amount of Term Credit NATIONAL CITY BANK
---------------------
$ 3,744,324 (7.474%)
By: /s/ Xxxx X. DeFrancesco_______________
-------------------------
Title: Senior Vice President______
-----------------------
Amount of Term Credit STANDARD FEDERAL BANK
---------------------
$ 2,995,459 (5.979%)
By: /s/ Xxxx X. Xxxxxxx
----------------------------------------
Title: First Vice President
-----------------------------
Amount of Term Credit XX XXXXXX XXXXX BANK
---------------------
$ 2,246,595 (4.484%)
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Title: Vice President
-----------------------------
Amount of Term Credit CREDIT LYONNAIS
---------------------
$ 4,680,405 (9.342%)
By: /s/ Xxxx-Xxxxxxx van Essche
----------------------------------------
Title: Vice President
-----------------------------
Amount of Term Credit BARCLAYS BANK PLC
---------------------
$ 2,246,595 (4.484%)
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Title: Director
-----------------------------
47
Amount of Term Credit MIZUHO CORPORATE BANK, LTD.
---------------------
$ 2,995,459 (5.979%)
By: /s/ Xxxx X. Xxxxx
------------------------------------
Title: Senior Vice President
-------------------------
Amount of Term Credit ARK-CLO (2000), LIMITED
---------------------
$ 5,990,919 (11.958%)
By:
------------------------------------
Title:
-------------------------
Amount of Term Credit GE CAPITAL CREDIT CORPORATION
---------------------
$ 2,246,595 (4.484%)
By:
------------------------------------
Title:
-------------------------
48
