Exhibit 99.1
POST-PETITION CREDIT AGREEMENT
Dated as of December 11, 2003
Among
CONE XXXXX CORPORATION,
CIPCO S.C., INC.,
CONE FOREIGN TRADING, LLC,
CORNWALLIS DEVELOPMENT CO.
(the Borrowers)
THE FINANCIAL INSTITUTIONS NAMED HEREIN
(the Lenders)
and
BANK OF AMERICA, N.A.
(Administrative Agent)
and
GENERAL ELECTRIC CAPITAL CORPORATION
(Syndication Agent)
TABLE OF CONTENTS
ARTICLE 1 LOANS AND LETTERS OF CREDIT........................................3
1.1 DIP Facility......................................................3
1.2 Revolving Loans...................................................3
1.3 Letters of Credit; Agreement to Issue or Cause to Issue...........8
1.4 Bank Products....................................................12
ARTICLE 2 INTEREST AND FEES.................................................12
2.1 Interest.........................................................12
2.2 Continuation and Conversion Elections............................13
2.3 Maximum Interest Rate............................................14
2.4 Closing and Agency Fees..........................................15
2.5 Unused Line Fee..................................................15
2.6 Letter of Credit Fees............................................15
ARTICLE 3 PAYMENTS AND PREPAYMENTS..........................................16
3.1 Repayment of Obligations.........................................16
3.2 Termination of DIP Facility and Commitments......................16
3.3 LIBOR Revolving Loan Prepayments.................................16
3.4 Payment Conventions..............................................16
3.5 Payments as Revolving Loans......................................17
3.6 Apportionment, Application and Reversal of Payments..............17
3.7 Indemnity for Returned Payments..................................17
3.8 Administrative Agent's and Lenders' Books and Records; Monthly
Statements.......................................................18
3.9 Nature and Extent of Each Borrower's Liability...................18
ARTICLE 4 TAXES, YIELD PROTECTION AND ILLEGALITY............................20
4.1 Taxes............................................................20
4.2 Illegality.......................................................21
4.3 Increased Costs and Reduction of Return..........................22
4.4 Funding Losses...................................................22
4.5 Inability to Determine Rates.....................................23
4.6 Certificates of Administrative Agent.............................23
4.7 Survival.........................................................23
ARTICLE 5 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES.................23
5.1 Books and Records................................................23
5.2 Financial and Other Information..................................23
5.3 Notices and Reports to Administrative Agent and the Lenders......27
ARTICLE 6 GENERAL WARRANTIES AND REPRESENTATIONS............................29
6.1 Authorization, Validity, and Enforceability of this Agreement
and the DIP Financing Documents..................................29
6.2 Validity and Priority of Administrative Agent's Liens............30
6.3 Organization and Qualification...................................30
6.4 Corporate Name; Prior Transactions...............................30
6.5 Subsidiaries and Affiliates......................................30
6.6 Financial Statements and Projections.............................31
6.7 [Reserved].......................................................31
6.8 Liens on Collateral..............................................31
6.9 Debt.............................................................31
6.10 Distributions....................................................31
6.11 Real Estate......................................................31
6.12 Proprietary Rights...............................................32
6.13 Trade Names......................................................32
6.14 Litigation.......................................................32
6.15 Labor Disputes...................................................32
6.16 Environmental Laws...............................................33
6.17 No Violation of Law..............................................34
6.18 [Reserved.]......................................................34
6.19 ERISA Compliance.................................................34
6.20 Taxes............................................................35
6.21 Regulated Entities...............................................35
6.22 Use of Proceeds; Margin Regulations; Loans to Directors and
Executive Officers...............................................35
6.23 Copyrights, Patents, Trademarks and Licenses, etc................35
6.24 [Reserved].......................................................35
6.25 Full Disclosure..................................................35
6.26 [Reserved].......................................................36
6.27 Bank Accounts....................................................36
6.28 Governmental Authorization.......................................36
6.29 Tax Shelter Regulations..........................................36
6.30 Anti-Terrorism Laws..............................................36
6.31 Reaffirmation of Representations and Warranties..................37
ARTICLE 7 AFFIRMATIVE AND NEGATIVE COVENANTS................................37
7.1 Taxes and Other Obligations......................................37
7.2 Legal Existence and Good Standing................................38
7.3 Compliance with Law and Agreements; Maintenance of Licenses......38
7.4 Maintenance of Property; Inspection of Property..................38
7.5 Insurance........................................................39
7.6 Disposition of Insurance and Condemnation Proceeds...............39
7.7 Environmental Laws...............................................40
7.8 ERISA............................................................41
7.9 Mergers, Consolidations or Sales.................................41
7.10 Distributions; Capital Change; Restricted Investments............41
7.11 Section 363 Sale.................................................42
7.12 Guaranties.......................................................42
7.13 Permitted Debt...................................................42
7.14 Prepayment.......................................................42
7.15 Transactions with Affiliates.....................................42
7.16 Investment Banking and Finder's Fees.............................43
7.17 Business Conducted...............................................43
7.18 Liens............................................................43
7.19 Sale and Leaseback Transactions..................................43
7.20 New Subsidiaries.................................................43
7.21 Fiscal Year......................................................43
7.22 Budget...........................................................43
7.23 Purchased Receivables and Related Assets.........................44
7.24 Food Security Act................................................44
7.25 Margin Stock.....................................................45
7.26 Further Assurances; Post-Closing Obligations.....................45
7.27 Compliance with Orders...........................................46
7.28 Turnover of Collateral Proceeds..................................46
7.29 Payment of Claims................................................46
7.30 Filing of Motions and Applications...............................46
7.31 Modifications to Orders..........................................46
7.32 Reclamation Claims...............................................46
7.33 Subsidiary Guarantors............................................46
7.34 Reserved.........................................................47
7.35 Commingling; Accounts Reporting..................................47
7.36 Royalty Payments.................................................47
7.37 Anti-Terrorism Laws..............................................47
7.38 Minimum Availability.............................................47
7.39 Net Fixed Asset Disposition Proceeds.............................48
ARTICLE 8 CONDITIONS OF LENDING.............................................48
8.1 Conditions Precedent to Making of Loans on the Closing Date......48
8.2 Reserved.........................................................50
8.3 Conditions Precedent to Each Loan................................50
8.4 Limited Waiver of Conditions Precedent...........................52
ARTICLE 9 DEFAULT; REMEDIES.................................................52
9.1 Events of Default................................................52
9.2 Remedies.........................................................55
ARTICLE 10 TERM AND TERMINATION.............................................57
10.1 Term and Termination.............................................57
ARTICLE 11 AMENDMENTS; WAIVERs; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS.....57
11.1 Amendments and Waivers...........................................57
11.2 Assignments; Participations......................................59
ARTICLE 12 THE AGENT........................................................61
12.1 Appointment and Authorization....................................61
12.2 Delegation of Duties.............................................61
12.3 Liability of Administrative Agent................................61
12.4 Reliance by Administrative Agent.................................62
12.5 Notice of Default; Action Upon Default...........................62
12.6 Credit Decision..................................................63
12.7 Indemnification..................................................63
12.8 Administrative Agent in Individual Capacity......................64
12.9 Successor Administrative Agent...................................64
12.10 Withholding Tax..................................................64
12.11 Collateral Matters...............................................66
12.12 Restrictions on Actions by Lenders; Sharing of Payments..........67
12.13 Agency for Perfection............................................67
12.14 Payments by Administrative Agent to Lenders......................67
12.15 Settlement.......................................................68
12.16 Letters of Credit; Inter-Lender Issues...........................72
12.17 Concerning the Collateral and the Related DIP Financing
Documents........................................................74
12.18 Field Audit and Examination Reports; Disclaimer by Lenders.......74
12.19 Relation Among Lenders...........................................75
12.20 No Reliance on Administrative Agent's Customer Identification
Program..........................................................75
12.21 USA Patriot Act..................................................75
12.22 Syndication Agent................................................75
ARTICLE 13 MISCELLANEOUS....................................................76
13.1 No Waivers; Cumulative Remedies..................................76
13.2 Severability.....................................................76
13.3 Governing Law; Choice of Forum; Service of Process...............76
13.4 WAIVER OF JURY TRIAL.............................................77
13.5 Survival of Representations and Warranties.......................77
13.6 Other Security and Guaranties....................................78
13.7 Fees and Expenses................................................78
13.8 Notices..........................................................79
13.9 Waiver of Notices................................................80
13.10 Binding Effect...................................................80
13.11 Indemnity of Agents and the Lenders by the Borrowers.............80
13.12 Limitation of Liability..........................................81
13.13 Final Agreement..................................................81
13.14 Counterparts.....................................................81
13.15 Captions.........................................................81
13.16 Right of Setoff..................................................82
13.17 Confidentiality..................................................82
13.18 Conflicts with Other DIP Financing Documents.....................83
ANNEXES, EXHIBITS AND SCHEDULES
ANNEX A - DEFINED TERMS
ANNEX B - BUDGET
EXHIBIT A - FORM OF BORROWING BASE CERTIFICATE
EXHIBIT B - FORM OF NOTICE OF BORROWING
EXHIBIT C - FORM OF NOTICE OF CONTINUATION/CONVERSION
EXHIBIT D - FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
EXHIBIT E - RECEIVABLES PURCHASE TERMINATION AGREEMENT
EXHIBIT F - SECURITY AGREEMENT
SCHEDULE 1.1 - LENDERS' COMMITMENTS
SCHEDULE 6.4 - CORPORATE NAMES; PRIOR TRANSACTIONS
SCHEDULE 6.5 - SUBSIDIARIES AND AFFILIATES
SCHEDULE 6.9 - DEBT
SCHEDULE 6.11 - REAL ESTATE; LEASES
SCHEDULE 6.12 - PROPRIETARY RIGHTS
SCHEDULE 6.13 - TRADE NAMES
SCHEDULE 6.14 - LITIGATION
SCHEDULE 6.15 - LABOR DISPUTES
SCHEDULE 6.16 - ENVIRONMENTAL LAW
SCHEDULE 6.19 - ERISA COMPLIANCE
SCHEDULE 6.27 - BANK ACCOUNTS
SCHEDULE 7.9 - ASSET DISPOSITIONS
SCHEDULE 7.18 - PERMITTED LIENS
POST-PETITION CREDIT AGREEMENT
This POST-PETITION CREDIT AGREEMENT, dated as of December 11, 2003
(this "Agreement"), is made among CONE XXXXX CORPORATION, a North Carolina
corporation and Chapter 11 debtor-in-possession ("Cone Xxxxx"), CIPCO S.C.,
INC., a Delaware corporation and Chapter 11 debtor-in-possession ("CIPCO"), CONE
FOREIGN TRADING, LLC, a North Carolina limited liability company and Chapter 11
debtor-in-possession ("Cone Foreign") and CORNWALLIS DEVELOPMENT CO., a North
Carolina corporation and Chapter 00 xxxxxx-xx-xxxxxxxxxx ("Xxxxxxxxxx") (Xxxx
Xxxxx, CIPCO, Cone Foreign and Cornwallis, each is referred to hereinafter as a
"Borrower" and collectively as the "Borrowers"), the financial institutions from
time to time parties hereto (such financial institutions, together with their
respective successors and assigns, are referred to hereinafter each individually
as a "Lender" and collectively as the "Lenders"), BANK OF AMERICA, N.A., in its
capacity as administrative and collateral agent for the Lenders (together with
its successors in such capacity, the "Administrative Agent") and GENERAL
ELECTRIC CAPITAL CORPORATION, in its capacity as syndication agent for the
Lenders (together with its successors in such capacity, the "Syndication
Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrowers are debtors-in-possession under Chapter 11 of
the Bankruptcy Code in cases jointly administered under Case No. 03-12944-MFW
(the "Chapter 11 Cases") pending in the United States Bankruptcy Court for the
District of Delaware (together with any other court having jurisdiction over the
Chapter 11 Cases or any proceedings therein from time to time, the "Court");
WHEREAS, the Borrowers have entered into an agreement to sell, pursuant
to Section 363 of the Bankruptcy Code and subject to Court approval, all or
substantially all of their assets to the Proposed Purchaser (as hereinafter
defined) or to a higher and better bidder, as determined pursuant to bidding
procedures approved by the Court (the "Proposed Section 363 Sale");
WHEREAS, the Borrowers have requested the Lenders to make available to
the Borrowers a revolving line of credit for loans and letters of credit in an
amount not to exceed $45,000,000, which extensions of credit the Borrowers will
use only for the purposes permitted hereunder during the Chapter 11 Cases and in
furtherance of, among other things, the Proposed Section 363 Sale;
WHEREAS, capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings ascribed thereto in Annex A which is
attached hereto and incorporated herein; the rules of construction contained
therein shall govern the interpretation of this Agreement, and all Annexes,
Exhibits and Schedules attached hereto are incorporated herein by reference; and
WHEREAS, the Lenders have agreed to make available to the Borrowers a
revolving credit facility upon the terms and conditions set forth in this
Agreement, and subject to the terms and conditions set forth in an order of the
Court approving the proposed financing.
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NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged, the Lenders, Agents and the
Borrowers hereby agree as follows.
ARTICLE 1
LOANS AND LETTERS OF CREDIT
1.1 DIP Facility. Subject to all of the terms and conditions of this
Agreement and the other DIP Financing Documents, the Lenders agree to make
available a total credit facility of up to $45,000,000 (the "DIP Facility") to
the Borrowers from time to time during the term of this Agreement. The DIP
Facility shall be composed of a revolving line of credit consisting of Revolving
Loans and Letters of Credit described herein.
1.2 Revolving Loans.
(a) Amounts. Subject to the satisfaction of the conditions precedent
set forth in Article 8 (but subject in all events to the provisions of Section
12.15(c)), each Lender severally, but not jointly, agrees, upon the Borrowers'
request from time to time on any Business Day during the period from the Closing
Date to the day before the last day of the DIP Term, to make revolving loans
(the "Revolving Loans") to the Borrowers in amounts not to exceed such Lender's
Pro Rata Share of Availability, except for Non-Ratable Loans and Agent Advances.
The Lenders, however, in their unanimous discretion, may elect to make Revolving
Loans or issue or arrange to have issued Letters of Credit in excess of the
Borrowing Base, on one or more occasions, but if they do so, neither
Administrative Agent nor the Lenders shall be deemed thereby to have changed the
limits of the Borrowing Base or to be obligated to exceed such limits on any
other occasion. If any Borrowing would exceed Availability, the Lenders may
refuse to make or may otherwise restrict the making of Revolving Loans as the
Lenders determine until such excess has been eliminated, subject to
Administrative Agent's authority, in its sole discretion, to make Agent Advances
pursuant to the terms of Section 1.2(i).
(b) Use of Proceeds. The Revolving Loans shall be used by Borrowers
exclusively for one or more of the following purposes (without duplication): (i)
to pay expenses described and in amounts not to exceed, by the Permitted
Variance, those shown on the Budget; (ii) to pay the Obligations; (iii) to pay
Claims authorized to be paid under Section 556 of the Bankruptcy Code; (iv) to
repurchase or otherwise reacquire any Purchased Receivables and Related Assets
pursuant to Section 7.15(b) and Section 7.23 of this Agreement; (v) to pay fees,
expenses and other amounts associated with a KERP, provided that the KERP is
approved by Final Order of the Court and is reasonably acceptable to Majority
Lenders; (vi) to pay Adequate Protection Claims, Reclamation Claims and Critical
Vendor Claims authorized by the Court, but, in the case of Adequate Protection
Claims of the Pre-Petition Secured Parties, only in the amounts and to the
extent authorized by paragraph 6 of the Pre-Petition Secured Party Protection
Order as in effect on the date hereof; (vii) to make deposits to the Fee Escrow
under (and as defined in) the Pre-Petition Secured Party Protection Order as in
effect on the date hereof and to pay Professional Expenses to Professional
Persons to the extent authorized to do so by the Court; (viii) to pay fees
required to be paid to the office of the United States Trustee; and (ix) to pay
property taxes with respect to any Collateral (to the extent that the
non-payment thereof is or would be secured by a Lien senior to Administrative
3
Agent's Liens thereon). Notwithstanding anything to the contrary contained
herein, in no event shall proceeds of Revolving Loans be used to pay
Professional Expenses incurred in connection with the assertion of or joinder in
any claim, counterclaim, action, contested matter, objection, defense or other
proceeding, the purpose of which is to seek or the result of which would be to
obtain any order, judgment, declaration, or similar relief (a) seeking damages
against Administrative Agent or any Lender on account of any alleged cause of
action arising on, before or after the Petition Date; (b) invalidating, setting
aside, avoiding or subordinating, in whole or in part, any of the Obligations or
any of Administrative Agent's Liens under any of the DIP Financing Documents or
the Financing Order; (c) declaring any of the DIP Financing Documents to be
invalid, not binding or unenforceable in any respect; (d) preventing, enjoining,
hindering or otherwise delaying Administrative Agent's or any Lender's
enforcement of any of the DIP Financing Documents or any realization upon any
Collateral (unless such enforcement or realization is in direct violation of an
explicit provision of the Financing Order); (e) declaring any Liens granted or
purported to be granted under any of the DIP Financing Documents to have a
priority other than the priority set forth therein or in the Financing Order; or
(f) seeking to use the cash proceeds of any of the Collateral, other than as
authorized by the Financing Order, without the prior written consent of
Administrative Agent and the Majority Lenders. Nothing in this Section 1.2(b)
shall be construed to waive Administrative Agent's or any Lender's right to
object to any requests, motions or applications made in or filed with the Court,
including any applications for interim or final allowances of Professional
Expenses.
(c) Procedure for Borrowing. Each Borrowing shall be made upon the
Borrowers' irrevocable written notice delivered to Administrative Agent in the
form of a notice of borrowing ("Notice of Borrowing"), which must be received by
Administrative Agent prior to (i) 1:00 o'clock p.m. (Atlanta, Georgia time)
three Business Days prior to the requested Funding Date, in the case of LIBOR
Revolving Loans, and (ii) 12:00 o'clock noon (Atlanta, Georgia time) on the
requested Funding Date, in the case of Base Rate Revolving Loans, specifying:
(A) the amount of the Borrowing, which in the case of
a LIBOR Revolving Loan must equal or exceed $1,000,000 (and
increments of $500,000 in excess of such amount);
(B) the requested Funding Date, which must be a
Business Day;
(C) whether the Revolving Loans requested are to be
Base Rate Revolving Loans or LIBOR Revolving Loans (and if not
specified, it shall be deemed a request for a Base Rate
Revolving Loan); and
(D) the duration of the Interest Period for LIBOR
Revolving Loans (and if not specified, it shall be deemed a
request for an Interest Period of one month);
provided, however, that, with respect to the Borrowings to be made during the
period commencing on the Closing Date and ending on the seventh day after the
Closing Date, such Borrowings will consist of Base Rate Revolving Loans only.
4
(1) In lieu of delivering a Notice of Borrowing, the Borrowers may
give Administrative Agent telephonic notice of such request for advances to the
Designated Account on or before the deadline set forth above. Administrative
Agent at all times shall be entitled to rely on such telephonic notice in making
such Revolving Loans, regardless of whether any written confirmation is
received.
(2) The Borrowers shall have no right to request a LIBOR Revolving
Loan while a Default or Event of Default has occurred and is continuing.
(d) Reliance upon Authority. Prior to the Closing Date, the Borrowers
shall deliver to Administrative Agent, a notice setting forth the account of the
Borrowers ("Designated Account") to which Administrative Agent is authorized to
transfer the proceeds of the Revolving Loans requested hereunder. The Borrowers
may designate a replacement account from time to time by written notice. The
Designated Account must be reasonably satisfactory to Administrative Agent.
Administrative Agent is entitled to rely conclusively upon any Person's request
for Revolving Loans on behalf of the Borrowers, so long as the proceeds thereof
are to be transferred to the Designated Account. Administrative Agent has no
duty to verify the identity of any individual representing himself or herself as
a person authorized by the Borrowers to make such requests on its behalf.
(e) No Liability. Administrative Agent shall not incur any liability
to the Borrowers as a result of acting upon any notice referred to in Sections
1.2(c) and (d), which Administrative Agent believes in good faith to have been
given by an officer or other person duly authorized by the Borrowers to request
Revolving Loans on its behalf. The crediting of Revolving Loans to the
Designated Account conclusively establishes the obligation of the Borrowers to
repay such Revolving Loans as provided herein.
(f) Notice Irrevocable. Any Notice of Borrowing (or telephonic notice
in lieu thereof) made pursuant to Section 1.2(c) shall be irrevocable. The
Borrowers shall be bound to borrow the funds requested therein in accordance
therewith.
(g) Administrative Agent's Election. Promptly after receipt of a
Notice of Borrowing (or telephonic notice in lieu thereof), Administrative Agent
shall elect to have the terms of Section 1.2(h) or the terms of Section 1.2(i)
apply to such requested Borrowing. If Bank of America declines in its sole
discretion to make a Non-Ratable Loan pursuant to Section 1.2(i), the terms of
Section 1.2(h) shall apply to the requested Borrowing.
(h) Making of Revolving Loans. If Administrative Agent elects to have
the terms of this Section 1.2(h) apply to a requested Borrowing, then promptly
after receipt of a Notice of Borrowing or telephonic notice in lieu thereof,
Administrative Agent shall notify the Lenders by telecopy, telephone or e-mail
of the requested Borrowing. Subject to the satisfaction of each of the
conditions precedent contained in Article 8 hereof and to the provisions of
Section 12.15(c) hereof, each Lender shall transfer its Pro Rata Share of the
requested Borrowing available to Administrative Agent in immediately available
funds, to the account from time to time designated by Administrative Agent, not
later than 2:00 o'clock p.m. (Atlanta, Georgia time) on the applicable Funding
Date. After Administrative Agent's receipt of all proceeds of such Revolving
Loans (or Administrative Agent's assumption that each Lender has made or will
5
make available to Administrative Agent such Lender's Pro Rata Share of such
Borrowing in accordance with Section 12.15), Administrative Agent shall make the
proceeds of such Revolving Loans available to the Borrowers on the applicable
Funding Date by transferring same day funds to the account designated by the
Borrowers, up to the amounts provided in Section 1.2(a).
(i) Making of Non-Ratable Loans.
(A) If Administrative Agent elects, with the consent of Bank
of America, to have the terms of this Section 1.2(i) apply to a
requested Borrowing, Bank of America shall make a Revolving Loan in
the amount of that Borrowing available to the Borrowers on the
applicable Funding Date by transferring same day funds to the
Designated Account. Each Revolving Loan made solely by Bank of America
pursuant to this Section is herein referred to as a "Non-Ratable
Loan," and all such Revolving Loans are collectively referred to as
the "Non-Ratable Loans." Each Non-Ratable Loan shall be subject to all
the terms and conditions applicable to other Revolving Loans except
that all payments thereon shall be payable to Bank of America solely
for its own account. The aggregate amount of Non-Ratable Loans
outstanding at any time shall not exceed $10,000,000. Administrative
Agent shall not request Bank of America to make any Non-Ratable Loan,
and Bank of America shall not make any Non-Ratable Loan, if (1)
Administrative Agent has received written notice from any Lender that
one or more of the applicable conditions precedent set forth in
Article 8 will not be satisfied on the requested Funding Date for the
applicable Borrowing, or (2) based upon the information then known to
Administrative Agent, the requested Borrowing would exceed
Availability on that Funding Date.
(B) The Non-Ratable Loans shall be secured by Administrative
Agent's Liens in and to the Collateral and shall constitute Base Rate
Revolving Loans and Obligations hereunder.
(j) Agent Advances.
(A) Notwithstanding anything to the contrary elsewhere in
this Agreement or any other DIP Financing Document (and irrespective
of the existence of any Overadvance Condition), but subject to the
dollar limitations set forth below, Administrative Agent is authorized
by the Borrowers and the Lenders, from time to time in Administrative
Agent's sole discretion, (A) after the occurrence of a Default or an
Event of Default (and for so long as such Default or Event of Default
is not waived or cured) or (B) at any time that any of the other
conditions precedent set forth in Article 8 have not been satisfied
(and, as a consequence thereof one or more of the Lenders gives notice
to Administrative Agent of its intent not to fund Revolving Loans), to
make Base Rate Revolving Loans from time to time to the Borrowers on
behalf of the Lenders that Administrative Agent, in its reasonable
business judgment, deems necessary or desirable (1) to preserve,
protect, insure, marshal, market, sell or otherwise dispose of any of
the Collateral or to enhance the likelihood of, or maximize the amount
of, repayment of the Loans and other Obligations, provided that
Administrative Agent shall not be authorized to make an Agent Advance
(as hereinafter defined) if the principal amount of such Agent
6
Advance, when added to the aggregate principal amount of all Agent
Advances then outstanding, would exceed $2,000,000, (2) to pay fees
and expenses covered by the Carve-Out, or (3) to pay any other amount
chargeable to the Borrowers pursuant to the terms of this Agreement,
including costs, fees and expenses as described in Section 13.7 (any
of such advances are herein referred to as "Agent Advances"); provided
that all of the Lenders may at any time revoke Administrative Agent's
authorization to make Agent Advances by the written direction of all
of such Lenders. Any such revocation must be in writing and shall
become effective prospectively upon Administrative Agent's receipt
thereof.
(B) Agent Advances shall be secured by Administrative
Agent's Liens in and to the Collateral and shall constitute Base Rate
Revolving Loans and Obligations hereunder.
(C) Administrative Agent may request settlement with the
Lenders on a periodic basis, but not less frequently than once every
five (5) Business Days, and such settlement payments shall be made by
or to each Lender so that, as of each settlement date, each Lender
shall hold its Pro Rata Share of all Revolving Loans and
participations in Letters of Credit.
(k) Borrowers' Agent. Each Borrower hereby irrevocably appoints Cone
Xxxxx, and Cone Xxxxx agrees to act under this Agreement, as agent and
representative of itself and each other Borrower for all purposes under this
Agreement (in such capacity, "Borrowers' Agent"), including requesting Revolving
Loans and receiving account statements and other notices and communications to
Borrowers (or any of them) from Administrative Agent and the Lenders.
Administrative Agent and the Lenders may rely, and shall be fully protected in
relying, upon any Notice of Borrowing, disbursement instructions, reports,
information, Borrowing Base Certificates or any other notice or communication
made or given by the Borrowers' Agent, whether in its own name, on behalf of any
Borrower or on behalf of "the Borrowers," and Administrative Agent and the
Lenders shall have no obligation to make any inquiry or to request any
confirmation from or on behalf of any other Borrower as to the binding effect on
such Borrower of any such Notice of Borrowing, instruction, report, information,
Borrowing Base Certificate or other notice or communication, nor shall the joint
and several character of the Borrowers' liability for the Obligations be
affected, provided that the provisions of this Section 1.2(k) shall not be
construed to preclude any Borrower from directly requesting Revolving Loans or
taking other actions permitted to be taken by "a Borrower" hereunder.
Administrative Agent and the Lenders may maintain a single Loan Account in the
name of "Cone Xxxxx" hereunder, and each Borrower expressly agrees to such
arrangement and confirms that such arrangement shall have no effect upon the
joint and several character of such Borrower's liability for the Obligations.
(l) Borrowing Base Certificates. The Borrowers shall deliver to
Administrative Agent and each Lender a Borrowing Base Certificate (a) on the
Closing Date and on or before Wednesday of each week after the Closing Date,
prepared as of the preceding Sunday, (b) on the 15th day of each Fiscal Month,
prepared as of the last Sunday of the preceding Fiscal Month, and (c) at such
other times as Administrative Agent may request, in each case with supporting
information in accordance with and as required by Section 9 of the Security
7
Agreement. All calculations of Availability in connection with any Borrowing
Base Certificate shall originally be made by the Borrowers and certified by a
Responsible Officer to Administrative Agent, provided that Administrative Agent
shall have the right to review and adjust, in the exercise of its sole
discretion, any such calculation (i) to reflect its reasonable estimate of
declines in value of any of the Collateral described therein and (ii) to the
extent that such calculation is not in accordance with this Agreement or does
not accurately reflect the amount of the Availability Reserve. During the period
between Administrative Agent's receipt of a Borrowing Base Certificate and the
delivery of the next scheduled Borrowing Base Certificate, Administrative Agent
may (i) reduce the amount of the Borrowing Base set forth on the Borrowing Base
Certificate last received by Administrative Agent by an amount equal to
eighty-five percent (85%) of the Net Amount of Eligible Accounts in respect of
which collections are received during such period and (ii) increase the amount
of the Borrowing Base set forth on the Borrowing Base Certificate last received
by Administrative Agent by an amount equal to eighty-five percent (85%) of the
Net Amount of Eligible Accounts that arise from sales by the Borrowers during
such period.
1.3 Letters of Credit; Agreement to Issue or Cause to Issue.
(a) Subject to the terms and conditions of this Agreement,
Administrative Agent agrees (i) to cause the Letter of Credit Issuer to issue
for the account of the Borrowers one or more commercial/documentary and standby
letters of credit ("Letter of Credit") and/or (ii) to provide to a Letter of
Credit Issuer credit support or other enhancement acceptable to Administrative
Agent (any such credit support or enhancement being herein referred to as a
"Credit Support") from time to time during the term of this Agreement.
(b) Amounts; Outside Expiration Date. Administrative Agent shall not
have any obligation or, with respect only to subclauses (i) and (ii) hereof, any
authority, to issue or cause to be issued any Letter of Credit or to provide
Credit Support for any Letter of Credit at any time if: (i) the maximum face
amount of the requested Letter of Credit is greater than the Unused Letter of
Credit Subfacility at such time; (ii) the maximum undrawn amount of the
requested Letter of Credit and all commissions, fees, and charges due from the
Borrowers in connection with the opening thereof would exceed Availability at
such time; or (iii) such Letter of Credit has an expiration date more than
twelve (12) months from the date of issuance for standby letters of credit and
one hundred eighty (180) days for documentary letters of credit. With respect to
any Letter of Credit which contains any "evergreen" or automatic renewal
provision, each Lender shall be deemed to have consented to any such extension
or renewal unless any such Lender shall have provided to Administrative Agent
written notice that it declines to consent to any such extension or renewal at
least thirty (30) days prior to the date on which the Letter of Credit Issuer is
entitled to decline to extend or renew the Letter of Credit. If all of the
requirements of this Section 1.3 are met and no Default or Event of Default has
occurred and is continuing, no Lender shall have the right to decline to consent
to any such extension or renewal.
(c) Other Conditions. In addition to conditions precedent contained in
Article 8, the obligation of Administrative Agent to cause to be issued any
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Letter of Credit or to provide Credit Support for any Letter of Credit is
subject to the following conditions precedent having been satisfied in a manner
reasonably satisfactory to Administrative Agent:
(1) Borrowers shall have delivered to the Letter of Credit
Issuer, at such times and in such manner as such Letter of Credit
Issuer may prescribe, an application in form and substance
satisfactory to such Letter of Credit Issuer and reasonably
satisfactory to Administrative Agent for the issuance of the Letter of
Credit and such other documents as may be required pursuant to the
terms thereof, and the form, terms and purpose of the proposed Letter
of Credit shall be reasonably satisfactory to Administrative Agent and
the Letter of Credit Issuer; and
(2) As of the date of issuance, no order of any court,
arbitrator or Governmental Authority shall purport by its terms to
enjoin or restrain money center banks generally from issuing letters
of credit of the type and in the amount of the proposed Letter of
Credit, and no law, rule or regulation applicable to money center
banks generally and no request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction over
money center banks generally shall prohibit, or request that the
proposed Letter of Credit Issuer refrain from, the issuance of letters
of credit generally or the issuance of such Letters of Credit.
(d) Issuance of Letters of Credit.
(1) Request for Issuance. Borrowers must notify
Administrative Agent of a requested Letter of Credit at least three
(3) Business Days prior to the proposed issuance date. Such notice
shall be irrevocable and must specify the original face amount of the
Letter of Credit requested, the Business Day of issuance of such
requested Letter of Credit, whether such Letter of Credit may be drawn
in a single or in partial draws, the Business Day on which the
requested Letter of Credit is to expire, the purpose for which such
Letter of Credit is to be issued, and the beneficiary of the requested
Letter of Credit. The Borrowers shall attach to such notice the
proposed form of the Letter of Credit.
(2) Responsibilities of Administrative Agent; Issuance. As
of the Business Day immediately preceding the requested issuance date
of the Letter of Credit, Administrative Agent shall determine the
amount of the applicable Unused Letter of Credit Subfacility and
Availability. If (i) the face amount of the requested Letter of Credit
is less than the Unused Letter of Credit Subfacility and (ii) the
amount of such requested Letter of Credit and all commissions, fees,
and charges due from the Borrowers in connection with the opening
thereof would not exceed Availability, Administrative Agent shall
cause the Letter of Credit Issuer to issue the requested Letter of
Credit on the requested issuance date so long as the other conditions
hereof are met.
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(3) No Extensions or Amendment. Administrative Agent shall
not be obligated to cause the Letter of Credit Issuer to extend or
amend any Letter of Credit issued pursuant hereto unless the
requirements of this Section 1.3 are met as though a new Letter of
Credit were being requested and issued.
(e) Payments Pursuant to Letters of Credit. The Borrowers agree to
reimburse immediately the Letter of Credit Issuer for any draw under any Letter
of Credit and Administrative Agent for the account of the Lenders upon any
payment pursuant to any Credit Support, and to pay the Letter of Credit Issuer
the amount of all other charges and fees payable to the Letter of Credit Issuer
in connection with any Letter of Credit immediately when due, irrespective of
any claim, setoff, defense or other right which the Borrowers may have at any
time against the Letter of Credit Issuer or any other Person. In furtherance of
the foregoing, each drawing under any Letter of Credit shall constitute a
request by the Borrowers to Administrative Agent for a Borrowing of a Base Rate
Revolving Loan in the amount of such drawing. The Funding Date with respect to
such borrowing shall be the date of such drawing.
(f) Indemnification; Exoneration; Power of Attorney.
(1) Indemnification. In addition to amounts payable as
elsewhere provided in this Section 1.3, the Borrowers agree, jointly
and severally, to protect, indemnify, defend, pay and save each
Indemnified Party harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) which such Indemnified Party
(other than a Lender in its capacity as Letter of Credit Issuer) may
incur or be subject to as a consequence, direct or indirect, of the
issuance of any Letter of Credit or the provision of any Credit
Support or enhancement in connection therewith, except to the extent
resulting from such Indemnified Party's gross negligence or willful
misconduct. Borrowers' obligations under this Section shall survive
payment of all of the Obligations and the Commitment Termination Date.
(2) Assumption of Risk by the Borrowers. As among the
Borrowers, the Lenders, and Administrative Agent, the Borrowers assume
all risks of the acts and omissions of, or misuse of any of the
Letters of Credit by, the respective beneficiaries of such Letters of
Credit. In furtherance and not in limitation of the foregoing, the
Lenders and Administrative Agent shall not be responsible for: (A) the
form, validity, sufficiency, accuracy, genuineness or legal effect of
any document submitted by any Person in connection with the
application for and issuance of and presentation of drafts with
respect to any of the Letters of Credit, even if it should prove to be
in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged; (B) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any
Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (C) the failure of the beneficiary of any
Letter of Credit to comply duly with conditions required in order to
draw upon such Letter of Credit; (D) errors, omissions, interruptions,
or delays in transmission or delivery of any
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messages, by mail, cable, telegraph, telex or otherwise, whether or
not they be in cipher; (E) errors in interpretation of technical
terms; (F) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of
Credit or of the proceeds thereof; (G) the misapplication by the
beneficiary of any Letter of Credit of the proceeds of any drawing
under such Letter of Credit; (H) any consequences arising from causes
beyond the control of the Lenders or Administrative Agent, including
any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto Governmental Authority or (I) the Letter of
Credit Issuer's honor of a draw for which the draw or any certificate
fails to comply in any respect with the terms of the Letter of Credit.
None of the foregoing shall affect, impair or prevent the vesting of
any rights or powers of Administrative Agent or any Lender under this
Section 1.3(f). Nothing contained in this Section 1.3(f)(2) shall be
deemed to impair or restrict any rights that the Borrowers may have
against or with respect to the Letter of Credit Issuer for any act or
omission of the Letter of Credit Issuer described above in this
Section 1.3(f)(2).
(3) Exoneration. Without limiting the foregoing, no action
or omission whatsoever by Administrative Agent or any Lender
(excluding any Lender in its capacity as a Letter of Credit Issuer)
shall result in any liability of Administrative Agent or any Lender to
any Borrower, or relieve the Borrowers of any of their obligations
hereunder to any such Person.
(4) Rights Against Letter of Credit Issuer. Nothing
contained in this Agreement is intended to limit the Borrowers'
rights, if any, with respect to the Letter of Credit Issuer which
arise as a result of the letter of credit application and related
documents executed by and between the Borrowers and the Letter of
Credit Issuer.
(5) Account Party. The Borrowers hereby authorize and direct
any Letter of Credit Issuer to name the Borrowers as the "Account
Party" therein and to deliver to Administrative Agent all instruments,
documents and other writings and property received by the Letter of
Credit Issuer pursuant to the Letter of Credit, and to accept and rely
upon Administrative Agent's instructions and agreements with respect
to all matters arising in connection with the Letter of Credit or the
application therefor.
(g) Supporting Letter of Credit; Cash Collateral. If, notwithstanding
the provisions of Section 1.3(b) and Section 10.1, any Letter of Credit or
Credit Support is outstanding upon the termination of this Agreement, then upon
such termination the Borrowers shall deposit with Administrative Agent, for the
ratable benefit of Administrative Agent and the Lenders, with respect to each
Letter of Credit or Credit Support then outstanding, as Administrative Agent
shall specify, either (i) a standby letter of credit (a "Supporting Letter of
Credit") in form and substance satisfactory to Administrative Agent, issued by
an issuer satisfactory to Administrative Agent in an amount equal to 105% of the
greatest amount for which such Letter of Credit or such Credit Support may be
drawn, under which Supporting Letter of Credit Administrative Agent is entitled
to draw amounts necessary to reimburse Administrative Agent and the Lenders for
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payments to be made by Administrative Agent and the Lenders under such Letter of
Credit or Credit Support and any fees and expenses associated with such Letter
of Credit or Credit Support or (ii) cash collateral in an amount equal to 105%
of the greatest amount for which such Letter of Credit or such Credit Support
may be drawn, which Administrative Agent is entitled to apply as necessary to
reimburse Administrative Agent and the Lenders for payments to be made by
Administrative Agent and the Lenders under such Letter of Credit or Credit
Support and any fees and expenses associated with such Letter of Credit or
Credit Support. Such Supporting Letter of Credit shall be held by Administrative
Agent, for the ratable benefit of Administrative Agent and the Lenders, as
security for, and to provide for the payment of, the aggregate undrawn amount of
such Letters of Credit or such Credit Support remaining outstanding.
1.4 Bank Products. The Borrowers may request and, to the extent authorized
by order of the Court, Administrative Agent may, in its sole and absolute
discretion, arrange for the Borrowers to obtain from Bank of America or Bank of
America's Affiliates, Bank Products although the Borrowers are not required to
do so. If Bank Products are provided by an Affiliate of Bank of America during
the DIP Term and prior to Full Payment of the Obligations, the Borrowers agree
to indemnify and hold Administrative Agent, Bank of America and the Lenders
harmless from any and all costs and obligations now or hereafter incurred by
Administrative Agent, Bank of America or any of the Lenders which arise from any
indemnity given by Administrative Agent to its Affiliates related to such Bank
Products (with a copy of any such indemnity provided to the Borrowers upon
request); provided, however, nothing contained herein is intended to limit the
Borrowers' rights, with respect to Bank of America or its Affiliates, if any,
which arise as a result of the execution of documents by and between the
Borrowers and Bank of America which relate to Bank Products. The agreement
contained in this Section shall survive the Commitment Termination Date.
Borrowers acknowledge and agree that the obtaining of Bank Products from Bank of
America or Bank of America's Affiliates (a) is in the sole and absolute
discretion of Bank of America or Bank of America's Affiliates, and (b) is
subject to all rules and regulations of Bank of America or Bank of America's
Affiliates.
ARTICLE 2
INTEREST AND FEES
2.1 Interest.
(a) Interest Rates. All outstanding Obligations shall bear interest on
the unpaid principal amount thereof (including, to the extent permitted by
applicable law, on interest thereon not paid when due) from the date incurred
until paid in full in cash at a rate determined by reference to the Base Rate or
the LIBOR Rate plus the Applicable Margin as set forth below, but not to exceed
the Maximum Rate. If at any time Loans are outstanding with respect to which the
Borrowers have not delivered to Administrative Agent a notice specifying the
basis for determining the interest rate applicable thereto in accordance
herewith, those Loans shall bear interest at a rate determined by reference to
the Base Rate until notice to the contrary has been given to Administrative
Agent in accordance with this Agreement and such notice has become effective.
Except as otherwise provided herein, the outstanding Obligations shall bear
interest as follows:
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(i) For all Base Rate Revolving Loans and other Obligations
(other than LIBOR Revolving Loans), at a fluctuating per annum rate
equal to the Base Rate plus the Applicable Margin; and
(ii) For all LIBOR Revolving Loans, at a per annum rate
equal to the LIBOR Rate plus the Applicable Margin.
Each change in the Base Rate shall be reflected in the interest rate applicable
to Base Rate Revolving Loans as of the effective date of such change. All
interest charges shall be computed on the basis of a year of 360 days and actual
days elapsed (which results in more interest being paid than if computed on the
basis of a 365-day year). The Borrowers shall pay to Administrative Agent, for
the ratable benefit of Lenders, interest accrued on all Base Rate Revolving
Loans, in arrears, on the first day of each month hereafter and on the
Commitment Termination Date. The Borrowers shall pay to Administrative Agent,
for the ratable benefit of the Lenders, interest on all LIBOR Revolving Loans,
in arrears, on each LIBOR Interest Payment Date. The Base Rate on the date
hereof is 4.00% per annum and, therefore, the rate of interest in effect
hereunder on the date hereof, expressed in simple interest terms, is 4.75% per
annum with respect to Base Rate Revolving Loans.
(b) Default Rate. If any Event of Default occurs and is continuing and
Administrative Agent or the Majority Lenders in their discretion so elect, then,
while any such Event of Default is continuing, all of the Obligations shall bear
interest at the Default Rate applicable thereto.
2.2 Continuation and Conversion Elections.
(a) The Borrowers may:
(i) elect, as of any Business Day, in the case of Base Rate
Revolving Loans, to convert any Base Rate Revolving Loans (or any part
thereof in an amount not less than $1,000,000, or that is in an
integral multiple of $500,000 in excess thereof) into LIBOR Revolving
Loans; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any LIBOR Revolving Loans having Interest Periods
expiring on such day (or any part thereof in an amount not less than
$1,000,000, or that is in an integral multiple of $500,000 in excess
thereof);
provided that if at any time the aggregate amount of LIBOR Revolving Loans in
respect of any Borrowing is reduced by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, then such LIBOR Revolving Loans shall
automatically convert into Base Rate Revolving Loans; and provided further that
if the notice shall fail to specify the duration of the Interest Period, then
such Interest Period shall be one month.
(b) The Borrowers shall deliver a notice of continuation/conversion
("Notice of Continuation/Conversion") to Administrative Agent not later than
1:00 o'clock p.m. (Atlanta, Georgia time) at least three (3) Business Days in
advance of the Continuation/Conversion Date, if the Loans are to be converted
into or continued as LIBOR Revolving Loans and specifying:
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(i) the proposed Continuation/Conversion Date;
(ii) the aggregate amount of Loans to be converted or
renewed;
(iii) the type of Loans resulting from the proposed
conversion or continuation; and
(iv) the duration of the requested Interest Period, provided
that the Borrowers may not select an Interest Period that ends after
the last day of the DIP Term.
(c) If upon the expiration of any Interest Period applicable to LIBOR
Revolving Loans, the Borrowers have failed to select timely a new Interest
Period to be applicable to such LIBOR Revolving Loans or if any Default or Event
of Default then exists, the Borrowers shall be deemed to have elected to convert
such LIBOR Revolving Loans into Base Rate Revolving Loans effective as of the
expiration date of such Interest Period.
(d) Administrative Agent will promptly notify each Lender of its
receipt of a Notice of Continuation/Conversion. All conversions and
continuations shall be made ratably according to the respective outstanding
principal amounts of the Loans with respect to which the notice was given held
by each Lender.
(e) There may not be more than eight (8) different LIBOR Revolving
Loans in effect hereunder at any time.
2.3 Maximum Interest Rate. In no event shall any interest rate
provided for hereunder or under any of the DIP Financing Documents exceed the
maximum rate legally chargeable by any Lender under applicable law for such
Lender with respect to loans of the type provided for hereunder (the "Maximum
Rate"). If, in any month, any interest rate, absent such limitation, would have
exceeded the Maximum Rate, then the interest rate for that month shall be the
Maximum Rate, and, if in future months, that interest rate would otherwise be
less than the Maximum Rate, then that interest rate shall remain at the Maximum
Rate until such time as the amount of interest paid hereunder equals the amount
of interest which would have been paid if the same had not been limited by the
Maximum Rate. In the event that, upon payment in full of the Obligations, the
total amount of interest paid or accrued under the terms of this Agreement is
less than the total amount of interest which would, but for this Section 2.3,
have been paid or accrued if the interest rate otherwise set forth in this
Agreement had at all times been in effect, then the Borrowers shall, to the
extent permitted by applicable law, pay Administrative Agent, for the account of
the Lenders, an amount equal to the excess of (a) the lesser of (i) the amount
of interest which would have been charged if the Maximum Rate had, at all times,
been in effect or (ii) the amount of interest which would have accrued had the
interest rate otherwise set forth in this Agreement, at all times, been in
effect over (b) the amount of interest actually paid or accrued under this
Agreement. If a court of competent jurisdiction determines that Administrative
Agent and/or any Lender has received interest and other charges hereunder or
under any of the DIP Financing Documents in excess of the Maximum Rate, such
excess shall be deemed received on account of, and shall automatically be
applied to reduce, the Obligations other than interest, in the inverse order of
14
maturity, and if there are no Obligations outstanding, Administrative Agent
and/or such Lender shall refund to the Borrowers such excess.
2.4 Closing and Agency Fees.
(a) The Borrowers jointly and severally agree to pay to Administrative
Agent, for the ratable benefit of the Initial Lenders, on the Closing Date a
closing fee (the "Closing Fee") in the amount of $618,000; provided, however;
that Borrowers shall be entitled to offset from GE Capital's Pro Rata Share of
the Closing Fee (which is $309,000) the amount of $250,000 in respect of fees
paid by the Borrowers to GE Capital on or about the Petition Date for the
Post-Petition Securitization Facility.
(b) The Borrowers jointly and severally agree to pay to Administrative
Agent on the Closing Date an agency fee (the "Agency Fee") in the amount of
$50,000.
2.5 Unused Line Fee. On the first day of each month and on the
Commitment Termination Date, the Borrowers agree to pay to Administrative Agent,
for the account of the Lenders, in accordance with their respective Pro Rata
Shares, an unused line fee (the "Unused Line Fee"), which shall be equal to the
Applicable Margin for the Unused Line Fee times the amount by which the Maximum
Revolver Amount exceeded the sum of the average daily outstanding amount of
Revolving Loans and the average daily undrawn face amount of outstanding Letters
of Credit, during the immediately preceding month or such portion of such month
during which the Commitments were in effect. The Unused Line Fee shall be
computed on the basis of a 360-day year for the actual number of days elapsed.
All principal payments received by Administrative Agent shall be deemed to be
credited to the Borrowers' Loan Account immediately upon receipt for purposes of
calculating the Unused Line Fee pursuant to this Section 2.5.
2.6 Letter of Credit Fees. The Borrowers agree to pay (i) to
Administrative Agent, for the account of the Lenders, in accordance with their
respective Pro Rata Shares, for each Letter of Credit, a fee (the "Letter of
Credit Fee") at a rate per annum equal to the Applicable Margin in effect from
time to time for LIBOR Revolving Loans, and to Administrative Agent, for the
benefit of the Letter of Credit Issuer, a fronting fee (the "Fronting Fee") of
one-half of one percent (0.5%), in each case based upon the undrawn face amount
of each Letter of Credit, and (ii) to the Letter of Credit Issuer, all of its
normal and customary fees associated with the issuance, amending, renewal,
negotiating, processing and administration of Letters of Credit, together with
its out-of-pocket costs and expenses incurred by the Letter of Credit Issuer in
connection therewith (such fees, costs and expenses, collectively, the "Letter
of Credit Issuer Amounts"). The Letter of Credit Fee and the Fronting Fee shall
each be payable monthly in arrears on the first day of each month following any
month in which a Letter of Credit is outstanding and on the Commitment
Termination Date. The Letter of Credit Issuer Amounts shall be payable as and
when assessed by the Letter of Credit Issuer. The Letter of Credit Fee and the
Fronting Fee shall each be computed on the basis of a 360-day year for the
actual number of days elapsed.
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ARTICLE 3
PAYMENTS AND PREPAYMENTS
3.1 Repayment of Obligations.
(a) The Borrowers shall repay the outstanding principal balance of the
Obligations on the Commitment Termination Date.
(b) The Borrowers shall be obligated to prepay the Obligations (i)
when an Overadvance Condition exists, to the extent of the Overadvance
Condition; (ii) from the proceeds of any Accounts, to the extent of such
proceeds; (iii) from the proceeds of any Collateral other than Accounts or Fixed
Assets, to the extent of such proceeds; (iv) from Fixed Asset Loss Proceeds, as
provided in Section 7.6; and (v) from Net Fixed Asset Disposition Proceeds, as
provided in Section 7.39. Provided each of the conditions precedent set forth in
Article 8 hereof is satisfied, the Borrowers shall be authorized to reborrow
such amounts prepaid with respect to the Revolving Loans, subject to the limits
of Availability on the date of each requested Borrowing (and, as among
Administrative Agent and the Lenders, subject to Section 12.15(a) and (c)).
3.2 Termination of DIP Facility and Commitments. Borrowers may
terminate the DIP Facility (and the Commitments thereunder) upon at least five
(5) Business Days notice to Administrative Agent and the Lenders; provided,
however, no such termination by the Borrowers shall be effective until Full
Payment of the Obligations. Any notice of termination given by the Borrowers
shall be irrevocable unless Administrative Agent otherwise agrees in writing.
The Borrowers may elect to terminate the DIP Facility in its entirety only.
Administrative Agent may (and shall at the direction of the Majority Lenders)
terminate the DIP Facility and the Commitments as provided in Section 9.2(a).
3.3 LIBOR Revolving Loan Prepayments. In connection with any
prepayment, if any LIBOR Revolving Loans are prepaid prior to the expiration
date of the Interest Period applicable thereto, the Borrowers shall pay to the
Lenders the amounts described in Section 4.4.
3.4 Payment Conventions.
(a) All payments to be made by the Borrowers shall be made without
set-off, recoupment or counterclaim. Except as otherwise expressly provided
herein, all payments by the Borrowers shall be made to Administrative Agent for
the account of the Lenders, at the account designated by Administrative Agent
and shall be made in Dollars and in immediately available funds, no later than
2:00 o'clock p.m. (Atlanta, Georgia time) on the date specified herein. Any
payment received by Administrative Agent after such time shall be deemed (for
purposes of calculating interest only) to have been received on the following
Business Day and any applicable interest shall continue to accrue.
(b) Subject to the provisions set forth in the definition of "Interest
Period," whenever any payment is due on a day other than a Business Day, such
payment shall be due on the following Business Day, and such extension of time
shall in such case be included in the computation of interest or fees, as the
case may be.
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3.5 Payments as Revolving Loans. At the election of Administrative Agent,
all payments of principal, interest, reimbursement obligations in connection
with Letters of Credit and Credit Support for Letters of Credit, fees, premiums,
reimbursable expenses and other sums payable hereunder, may be paid from the
proceeds of Revolving Loans made hereunder. The Borrowers hereby irrevocably
authorize Administrative Agent to charge the Loan Account for the purpose of
paying all amounts from time to time due hereunder and agree that all such
amounts charged (including Non-Ratable Loans and Agent Advances) shall
constitute Revolving Loans.
3.6 Apportionment, Application and Reversal of Payments. Principal and
interest payments shall be apportioned ratably among the Lenders (according to
the unpaid principal balance of the Loans to which such payments relate held by
each Lender) and payments of the fees shall, except as otherwise provided in
this Agreement, be apportioned ratably among the Lenders, except for fees
payable solely to Administrative Agent and the Letter of Credit Issuer and
except as provided in Section 11.1(b). All payments shall be remitted to
Administrative Agent and all such payments not relating to principal or interest
of specific Loans, or not constituting payment of specific fees, and all
proceeds of Accounts or other Collateral received by Administrative Agent, shall
be applied, ratably, subject to the provisions of this Agreement, first, to pay
any fees, indemnities or expense reimbursements then due to Administrative Agent
from the Borrowers; second, to pay any fees or expense reimbursements then due
to the Lenders from the Borrowers; third, to pay interest due in respect of all
Loans, including Non-Ratable Loans and Agent Advances; fourth, to pay or prepay
principal of the Non-Ratable Loans and Agent Advances; fifth, to pay or prepay
principal of the Revolving Loans (other than Non-Ratable Loans and Agent
Advances) and unpaid reimbursement obligations in respect of Letters of Credit;
sixth, to pay an amount to Administrative Agent equal to the aggregate undrawn
face amount of all outstanding Letters of Credit to be held as cash collateral
for such Obligations; and seventh, to the payment of any other Obligation,
including any amounts relating to Bank Products due to Administrative Agent or
any Lender by the Borrowers. Notwithstanding anything to the contrary contained
in this Agreement, unless so directed by the Borrowers, or unless an Event of
Default has occurred and is continuing, neither Administrative Agent nor any
Lender shall apply any payments which it receives to any LIBOR Revolving Loan,
except (a) on the expiration date of the Interest Period applicable to any such
LIBOR Revolving Loan, or (b) in the event, and only to the extent, that there
are no outstanding Base Rate Revolving Loans and, in any event, the Borrowers
shall pay LIBOR breakage losses in accordance with Section 4.4. Administrative
Agent and the Lenders shall have the continuing and exclusive right to apply and
reverse and reapply any and all such proceeds and payments to any portion of the
Obligations.
3.7 Indemnity for Returned Payments. If after receipt of any payment
which is applied to the payment of all or any part of the Obligations,
Administrative Agent, any Lender, Bank of America or any Affiliate of Bank of
America is for any reason compelled to surrender such payment or proceeds to any
Person because such payment or application of proceeds is invalidated, declared
fraudulent, set aside, determined to be void or voidable as a preference,
impermissible setoff, or a diversion of trust funds, or for any other reason,
then the Obligations or part thereof intended to be satisfied shall be revived
and continued and this Agreement shall continue in full force as if such payment
or proceeds had not been received by Administrative Agent or such Lender and the
Borrowers shall be liable to pay to Administrative Agent and the Lenders, and
17
hereby do indemnify Administrative Agent and the Lenders and hold Administrative
Agent and the Lenders harmless for the amount of such payment or proceeds
surrendered. The provisions of this Section 3.7 shall be and remain effective
notwithstanding any contrary action which may have been taken by Administrative
Agent or any Lender in reliance upon such payment or application of proceeds,
and any such contrary action so taken shall be without prejudice to
Administrative Agent's and the Lenders' rights under this Agreement and shall be
deemed to have been conditioned upon such payment or application of proceeds
having become final and irrevocable. The provisions of this Section 3.7 shall
survive Full Payment of the Obligations and the Commitment Termination Date.
3.8 Administrative Agent's and Lenders' Books and Records; Monthly
Statements. Administrative Agent shall record the principal amount of the Loans
owing to each Lender, the undrawn face amount of all outstanding Letters of
Credit and the aggregate amount of unpaid reimbursement obligations outstanding
with respect to the Letters of Credit from time to time on its books. In
addition, each Lender may note the date and amount of each payment or prepayment
of principal of such Lender's Loans in its books and records. Failure by
Administrative Agent or any Lender to make such notation shall not affect the
obligations of the Borrowers with respect to the Loans or the Letters of Credit.
The Borrowers agree that Administrative Agent's and each Lender's books and
records showing the Obligations and the transactions pursuant to this Agreement
and the other DIP Financing Documents shall be admissible in any action or
proceeding arising therefrom, and shall constitute rebuttably presumptive proof
thereof, irrespective of whether any Obligation is also evidenced by a
promissory note or other instrument. In the event of any discrepancy between the
books and records of Administrative Agent and any Lender with respect to the
amount of the Obligations on any date, Administrative Agent and the Lenders
shall endeavor to resolve such discrepancy in consultation with Borrowers, but,
in the event of a failure to reconcile such discrepancy, the books and records
of Administrative Agent, as in effect from time to time, shall govern and
control as between Administrative Agent and such Lender absent manifest error.
Administrative Agent will provide to the Borrowers a monthly statement of Loans,
payments, and other transactions pursuant to this Agreement. Such statement
shall be deemed correct, accurate, and binding on the Borrowers and an account
stated (except for reversals and reapplications of payments made as provided in
Section 3.7 and corrections of errors discovered by Administrative Agent),
unless the Borrowers notify Administrative Agent in writing to the contrary
within thirty (30) days after such statement is received. In the event a timely
written notice of objections is given by the Borrowers, only the items to which
exception is expressly made will be considered to be disputed by the Borrowers.
3.9 Nature and Extent of Each Borrower's Liability
(a) Joint and Several Liability. Each Borrower shall be liable for, on
a joint and several basis, and hereby guarantees the timely payment by all other
Borrowers of, all of the Revolving Loans and other Obligations, regardless of
which Borrowers actually may have received the proceeds of any Revolving Loans
or other extensions of credit hereunder or the amount of such Revolving Loans
received or the manner in which Administrative Agent or any Lender accounts for
such Revolving Loans or other extensions of credit on its books and records, it
being acknowledged and agreed that Revolving Loans to any Borrower inure to the
mutual benefit of all Borrowers and that Administrative Agent and the Lenders
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are relying upon the joint and several liability of Borrowers in extending the
Revolving Loans and other financial accommodations hereunder. Each Borrower
hereby unconditionally and irrevocably agrees that upon default in the payment
when due (whether at stated maturity, by acceleration or otherwise) of any
principal of, or interest owed on, any of the Revolving Loans or other
Obligations, such Borrower shall forthwith pay the same, without notice or
demand.
(b) Unconditional Nature of Liability. Each Borrower's joint and
several liability hereunder with respect to, and guaranty of, the Revolving
Loans and other Obligations shall, to the fullest extent permitted by applicable
law, be unconditional irrespective of (i) the avoidance or subordination of any
of the Obligations or of any promissory note or other document evidencing all or
any part of the Obligations, (ii) the absence of any attempt to collect any of
the Obligations from any other Obligor or any Collateral or other security
therefor, or the absence of any other action to enforce the same, (iii) the
waiver, consent, extension, forbearance or granting of any indulgence by the
Lenders with respect to any of the Obligations or any instrument or agreement
evidencing or securing the payment of any of the Obligations, or any other
agreement now or hereafter executed by any other Borrower and delivered to
Administrative Agent or any Lender, (iv) the failure by Administrative Agent or
the Lenders to take any steps to perfect or maintain the perfected status of its
security interest in or Lien upon, or to preserve its rights to, any of the
Collateral or other security for the payment or performance of any of the
Obligations, or Administrative Agent's release of any Collateral or of its Liens
upon any Collateral, (v) the release or compromise, in whole or in part, of the
liability of a Borrower or other Obligor for the payment of any of the
Obligations, (vi) any amendment or modification of any of the DIP Loan Documents
or waiver of any Default or Event of Default thereunder, (vii) any increase in
the amount of the Obligations beyond any limits imposed herein or in the amount
of any interest, fees or other charges payable in connection therewith, or any
decrease in the same or (viii) any other circumstance that might constitute a
legal or equitable discharge or defense of any Borrower or other Obligor. At any
time an Event of Default exists, Administrative Agent and the Lenders may
proceed directly and at once, without notice to any Borrower or other Obligor,
against any or all Obligors to collect and recover all or any part of the
Obligations, without first proceeding against any other Obligor or against any
Collateral or other security for the payment or performance of any of the
Obligations, and each Borrower waives any provision that might otherwise require
Administrative Agent or the Lenders under applicable law to pursue or exhaust
its remedies against any Collateral or Obligor before pursuing such Borrower or
another Obligor. Each Borrower consents and agrees that neither Administrative
Agent nor the Lenders shall be under any obligation to marshal any assets in
favor of any Obligor or against or in payment of any or all of the Obligations.
(c) No Reduction in Liability for Obligations. No payment or payments
made by an Obligor or received or collected by Administrative Agent or any
Lender from any Collateral or any other Person by virtue of any action or
proceeding or any setoff or appropriation or application at any time or from
time to time in reduction of or in payment of the Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Borrower under
this Agreement for any of the remaining outstanding Obligations, each of which
shall remain jointly and severally liable for the payment and performance of all
Revolving Loans and other Obligations until Full Payment of the Obligations.
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(d) Contribution. Each Borrower is unconditionally obligated to repay
the Obligations as a joint and several obligor under this Agreement. If, as of
any date, the aggregate amount of payments made by a Borrower on account of the
Obligations and proceeds of such Borrower's Collateral that are applied to the
Obligations exceeds the aggregate amount of Loan proceeds actually used by such
Borrower in its business (such excess amount being referred to as an
"Accommodation Payment"), then the other Borrowers shall be obligated to make
contribution to such Borrower (the "Paying Borrower") in an amount equal to (A)
the product derived by multiplying the sum of each Accommodation Payment of each
Borrower by the Allocable Percentage of the Borrower from whom contribution is
sought less (B) the amount, if any, of the then outstanding Accommodation
Payment of such Contributing Borrower (such last mentioned amount which is to be
subtracted from the aforesaid product to be increased by any amounts theretofore
paid by such Contributing Borrower by way of contribution hereunder, and to be
decreased by any amounts theretofore received by such Contributing Borrower by
way of contribution hereunder); provided, however, that a Paying Borrower's
recovery of contribution hereunder from the other Borrowers shall be limited to
that amount paid by the Paying Borrower in excess of its Allocable Percentage of
all Accommodation Payments then outstanding of all Borrowers. As used herein,
the term "Allocable Percentage" shall mean, on any date of determinations
thereof, a fraction the denominator of which shall be equal to the number of
Borrowers who are parties to this Agreement on such date and the numerator of
which shall be 1.
(e) Subordination. Each Borrower hereby subordinates any claims,
including any right of payment, subrogation, contribution and indemnity, that it
may have from or against any other Obligor, and any successor or assign of any
other Obligor, howsoever arising, due or owing or whether heretofore, now or
hereafter existing, to the Full Payment of the Obligations.
ARTICLE 4
TAXES, YIELD PROTECTION AND ILLEGALITY
4.1 Taxes.
(a) Any and all payments by the Borrowers to each Lender or
Administrative Agent under this Agreement and any other DIP Financing Document
shall be made free and clear of, and without deduction or withholding for any
Taxes. In addition, the Borrowers shall pay all Other Taxes.
(b) The Borrowers agree to indemnify and hold harmless each Lender and
Administrative Agent for the full amount of Taxes or Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section) paid by any Lender or Administrative Agent and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Payment under this indemnification shall be made within thirty
(30) days after the date such Lender or Administrative Agent makes written
demand therefor.
(c) If any Borrower shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or Administrative Agent, then:
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(i) the sum payable shall be increased as necessary so that
after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable
under this Section) such Lender or Administrative Agent, as the case
may be, receives an amount equal to the sum it would have received had
no such deductions or withholdings been made;
(ii) each Borrower shall make such deductions and
withholdings;
(iii) each Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) The Borrowers shall also pay to each Lender or
Administrative Agent for the account of such Lender, at the time
interest is paid, all additional amounts which the respective Lender
specifies as necessary to preserve the after-tax yield such Lender
would have received if such Taxes or Other Taxes had not been imposed.
(d) At Administrative Agent's request, within thirty (30) days after
the date of any payment by any Borrower of Taxes or Other Taxes, such Borrower
shall furnish Administrative Agent the original or a certified copy of a receipt
evidencing payment thereof, or other evidence of payment satisfactory to
Administrative Agent.
(e) If the Borrowers are required to pay additional amounts to any
Lender or Administrative Agent pursuant to subsection (c) of this Section, then
such Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its lending office so as to
eliminate any such additional payment by the Borrowers which may thereafter
accrue, if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.
4.2 Illegality.
(a) If any Lender determines that the introduction of any Requirement
of Law, or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable lending office to make LIBOR Revolving Loans,
then, on notice thereof by that Lender to the Borrowers through Administrative
Agent, any obligation of that Lender to make LIBOR Revolving Loans shall be
suspended until that Lender notifies Administrative Agent and the Borrowers that
the circumstances giving rise to such determination no longer exist.
(b) If a Lender determines that it is unlawful to maintain any LIBOR
Revolving Loan, the Borrowers shall, upon receipt of notice of such fact and
demand from such Lender (with a copy to Administrative Agent), prepay in full
such LIBOR Revolving Loans of that Lender then outstanding, together with
interest accrued thereon and amounts required under Section 4.4, either on the
last day of the Interest Period thereof, if that Lender may lawfully continue to
maintain such LIBOR Revolving Loans to such day, or immediately, if that Lender
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may not lawfully continue to maintain such LIBOR Revolving Loans. If the
Borrowers are required to so prepay any LIBOR Revolving Loans, then,
concurrently with such prepayment, the Borrowers shall borrow from the affected
Lender, in the amount of such repayment, a Base Rate Revolving Loan.
4.3 Increased Costs and Reduction of Return.
(a) If any Lender determines that due to either (i) the introduction
of or any change in the interpretation of any law or regulation, in each case
after the date hereof, or (ii) the compliance by that Lender with any guideline
or request from any central bank or other Governmental Authority (whether or not
having the force of law), there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining any LIBOR Revolving Loans,
then the Borrowers shall be liable for, and shall from time to time, upon demand
(with a copy of such demand to be sent to Administrative Agent), pay to
Administrative Agent for the account of such Lender, additional amounts as are
sufficient to compensate such Lender for such increased costs.
(b) If any Lender shall have determined that (i) the introduction
after the date hereof of any Capital Adequacy Regulation, (ii) any change in any
Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or (iv) compliance by such Lender or any corporation or other entity
controlling such Lender with any Capital Adequacy Regulation, affects or would
affect the amount of capital required or expected to be maintained by such
Lender or any corporation or other entity controlling such Lender and (taking
into consideration such Lender's or such corporation's or other entity's
policies with respect to capital adequacy and such Lender's desired return on
capital) determines that the amount of such capital is increased as a
consequence of its Commitments, loans, credits or obligations under this
Agreement, then, upon demand of such Lender to the Borrowers through
Administrative Agent, the Borrowers shall pay to such Lender, from time to time
as specified by such Lender, additional amounts sufficient to compensate such
Lender for such increase.
4.4 Funding Losses. The Borrowers shall reimburse each Lender and hold
each Lender harmless from any loss or expense which such Lender may sustain or
incur as a consequence of:
(a) the failure of the Borrowers to make on a timely basis any payment
of principal of any LIBOR Revolving Loan;
(b) the failure of the Borrowers to borrow, continue or convert a Loan
after the Borrowers have given (or are deemed to have given) a Notice of
Borrowing or a Notice of Continuation/Conversion; or
(c) the prepayment or other payment (including after acceleration
thereof) of any LIBOR Revolving Loans on a day that is not the last day of the
relevant Interest Period;
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including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Revolving Loans or from fees
payable to terminate the deposits from which such funds were obtained. Borrowers
shall also pay any customary administrative fees charged by any Lender in
connection with the foregoing.
4.5 Inability to Determine Rates. If Administrative Agent determines
that for any reason adequate and reasonable means do not exist for determining
the LIBOR Rate for any requested Interest Period with respect to a proposed
LIBOR Revolving Loan, or that the LIBOR Rate for any requested Interest Period
with respect to a proposed LIBOR Revolving Loan does not adequately and fairly
reflect the cost to the Lenders of funding such Loan, Administrative Agent will
promptly so notify the Borrowers and each Lender. Thereafter, the obligation of
the Lenders to make or maintain LIBOR Revolving Loans hereunder shall be
suspended until Administrative Agent revokes such notice in writing. Upon
receipt of such notice, the Borrowers may revoke any Notice of Borrowing or
Notice of Continuation/Conversion then submitted by it. If the Borrowers do not
revoke such Notice, the Lenders shall make, convert or continue the Loans, as
proposed by the Borrowers, in the amount specified in the applicable notice
submitted by the Borrowers, but such Loans shall be made, converted or continued
as Base Rate Revolving Loans instead of LIBOR Revolving Loans.
4.6 Certificates of Administrative Agent. If any Lender claims
reimbursement or compensation under this Article 4, such Lender shall do so
within ninety (90) days after having determined the existence of such claim, and
Administrative Agent shall determine the amount thereof and shall deliver to the
Borrowers (with a copy to the affected Lender) a certificate setting forth in
reasonable detail the amount payable to the affected Lender, and such
certificate shall be conclusive and binding upon the Borrowers in the absence of
manifest error.
4.7 Survival. The agreements and obligations of the Borrowers in this
Article 4 shall survive the payment of all other Obligations and the Commitment
Termination Date.
ARTICLE 5
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
5.1 Books and Records. Each Borrower shall maintain, at all times,
correct and complete books, records and accounts in which complete, correct and
timely entries are made of its transactions in accordance with GAAP applied
consistently with the audited Financial Statements required to be delivered
pursuant to Section 5.2(a). Each Borrower shall, by means of appropriate
entries, reflect in such accounts and in all Financial Statements proper
liabilities and reserves for all taxes and proper provision for depreciation and
amortization of property and bad debts, all in accordance with GAAP. The
Borrowers shall maintain at all times books and records pertaining to the
Collateral in such detail, form and scope as Administrative Agent shall
reasonably require, including records of (a) all payments received and all
credits and extensions granted with respect to the Accounts; (b) the return,
rejection, repossession, stoppage in transit, loss, damage, or destruction of
any Inventory; and (c) all other dealings affecting the Collateral.
5.2 Financial and Other Information. The Borrowers shall promptly
furnish to each Lender, all such financial information as Administrative Agent
shall reasonably request. Without limiting the foregoing, the Borrowers will
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furnish to Administrative Agent, in sufficient copies for distribution by
Administrative Agent to each Lender, in such detail as Administrative Agent or
the Lenders shall request, the following:
(a) As soon as available, but in any event not later than ninety-five
(95) days after the close of each Fiscal Year, consolidated audited balance
sheets, and income statements, cash flow statements and changes in stockholders'
equity for the Borrowers and their consolidated Subsidiaries for such Fiscal
Year, and the accompanying notes thereto, setting forth in each case in
comparative form figures for the previous Fiscal Year, all in reasonable detail,
fairly presenting the financial position and the results of operations of the
Borrowers and their consolidated Subsidiaries as at the date thereof and for the
Fiscal Year then ended, and prepared in accordance with GAAP. Such statements
shall be examined in accordance with generally accepted auditing standards by
and, in the case of such statements prepared on a consolidated basis,
accompanied by a report thereon unqualified in any respect (except any such
qualification resulting from the commencement of the Chapter 11 Cases) of
independent certified public accountants selected by the Borrowers and
reasonably satisfactory to Administrative Agent. The Borrowers, simultaneously
with retaining any new independent public accountants to conduct any such annual
audit, shall send a letter to such accountants, with a copy to Administrative
Agent and the Lenders, notifying such accountants that one of the primary
purposes for retaining such accountants' services and having audited financial
statements prepared by them is for use by Administrative Agent and the Lenders.
The Borrowers hereby authorize Administrative Agent, upon reasonable prior
notice (which shall not be required if an Event of Default exists), to
communicate directly with their certified public accountants and, by this
provision, authorize those accountants to disclose to Administrative Agent any
and all financial statements and other supporting financial documents and
schedules relating to the Borrowers and to discuss directly with Administrative
Agent the finances and affairs of the Borrowers (and, if necessary to obtain the
cooperation of such accountants, the Borrowers agree to provide such written
instructions to their accountants).
(b) As soon as available, but in any event not later than thirty (30)
days after the end of each Fiscal Month, the consolidated unaudited balance
sheet of the Borrowers and their consolidated Subsidiaries as at the end of such
Fiscal Month, and the consolidated unaudited income statement and cash flow
statement for the Borrowers and their consolidated Subsidiaries for such Fiscal
Month and for the period from the beginning of the Fiscal Year to the end of
such Fiscal Month, all in reasonable detail, fairly presenting the financial
position and results of operations of the Borrowers and their consolidated
Subsidiaries as at the date thereof and for such periods, and, in each case, in
comparable form, figures for the corresponding period in the prior Fiscal Year,
and prepared in accordance with GAAP applied consistently with the audited
Financial Statements required to be delivered pursuant to Section 5.2(a),
subject to normal year-end adjustments and reconciliations. The Borrowers shall
certify by a certificate signed by the chief financial officer, treasurer or
controller of Cone Xxxxx that all such statements have been prepared in
accordance with GAAP and present fairly the Borrowers' financial position as at
the dates thereof and its results of operations for the periods then ended,
subject to normal year-end adjustments and reconciliations.
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(c) As soon as available, but in any event not later than fifty (50)
days after the end of each Fiscal Quarter, a true and correct copy of the
Borrowers' 10-Q for such Fiscal Quarter. The Borrowers shall certify by a
certificate signed by the chief financial officer, treasurer or controller of
Cone Xxxxx that such 10-Q has been prepared in accordance with GAAP and presents
fairly the Borrowers' financial position as at the date thereof and its results
of operations for the period then ended, subject to normal year-end adjustments.
(d) With each of the audited Financial Statements delivered pursuant
to Section 5.2(a), a certificate of the independent certified public accountants
that examined such statement to the effect that they have reviewed and are
familiar with this Agreement and that, in examining such Financial Statements,
they did not become aware of any fact or condition which then constituted a
Default or Event of Default with respect to a financial covenant, except for
those, if any, described in reasonable detail in such certificate.
(e) With each of the annual audited Financial Statements delivered
pursuant to Section 5.2(a), and within thirty (30) days after the end of each
Fiscal Month (or fifty (50) days after the end of any such Fiscal Month that is
the last Fiscal Month of a Fiscal Quarter and ninety-five (95) days after the
end of any such Fiscal Month that is the last Fiscal Month of a Fiscal Year), a
certificate of the chief financial officer of Cone Xxxxx certifying that, to the
best of his knowledge, no Default or Event of Default has occurred during the
period covered in such Financial Statements or exists as of the last day
thereof. With each of the annual audited Financial Statements delivered pursuant
to Section 5.2(a), and within fifty (50) days after the end of any Fiscal Month
that is the last Fiscal Month of a Fiscal Quarter, the certification of the
Financial Statements required of the chief financial officer or the chief
executive officer of Cone Xxxxx pursuant to the Xxxxxxxx-Xxxxx Act. Within
thirty (30) days after the end of each Fiscal Month, a certificate of the chief
financial officer, treasurer or controller of each Borrower stating that, except
as explained in reasonable detail in such certificate, (A) all of the
representations and warranties of such Borrower contained in this Agreement and
the other DIP Financing Documents are correct and complete in all material
respects as at the date of such certificate as if made at such time, except for
those that speak as of a particular date, (B) such Borrower is, at the date of
such certificate, in compliance in all material respects with all of its
respective covenants and agreements in this Agreement and the other DIP
Financing Documents, (C) no Default or Event of Default then exists or existed
during the period covered by the Financial Statements for such Fiscal Month, (D)
if such Fiscal Month is the last Fiscal Month in a Fiscal Quarter or Fiscal
Year, describing and analyzing in reasonable detail all material trends,
changes, and developments in each and all such Financial Statements; and (E)
explaining the variances of the figures in the corresponding budgets and prior
Fiscal Year financial statements. If such certificate discloses that a
representation or warranty is not correct or complete, or that a covenant has
not been complied with, or that a Default or Event of Default existed or exists,
such certificate shall set forth what action such Borrower has taken or proposes
to take with respect thereto.
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(f) No later than thirty (30) days after the first day of each Fiscal
Year, the Borrowers' annual business plan, with annual forecasts (to include
forecasted consolidated balance sheets, income statements and cash flow
statements), for the Borrowers and their consolidated Subsidiaries as at the end
of and for each Fiscal Quarter of such Fiscal Year (for each Fiscal Year, an
"Annual Business Plan").
(g) Promptly, but no later than thirty (30) days, after filing with
the PBGC and the IRS, a copy of each annual report or other filing filed with
respect to each Plan of the Borrowers.
(h) Promptly (but in any event within fifteen (15) days) upon the
filing thereof, copies of all reports, if any, to or other documents filed by
any Borrower or any of its Subsidiaries with the Securities and Exchange
Commission under the Exchange Act, and all reports, notices, or statements sent
or received by any Borrower or any of its Subsidiaries to or from the holders of
any equity interests of such Borrower (other than routine non-material
correspondence sent by shareholders of a Borrower to such Borrower) or any such
Subsidiary or from the Bond Trustee.
(i) As soon as available, but in any event not later than fifteen (15)
days after a Borrower's receipt thereof, a copy of all management reports and
management letters prepared for such Borrower by any independent certified
public accountants of such Borrower.
(j) Promptly (but in any event within fifteen (15) days) after their
preparation, copies of any and all proxy statements, financial statements, and
reports that any Borrower makes available to its shareholders.
(k) If requested by Administrative Agent, promptly after filing with
the IRS, a copy of each tax return filed by any Borrower or by any of its
Subsidiaries.
(l) At the time the same are required to be delivered in accordance
with the provisions of Section 9 of the Security Agreement, the reports and
schedules with respect to the Collateral described therein, including a
Borrowing Base Certificate to be delivered weekly (or more frequently if so
requested by Administrative Agent when an Event of Default exists or otherwise
when reasonably requested by Administrative Agent).
(m) Promptly (but in any event within fifteen (15) days) after the
Borrowers have notified Administrative Agent of any intention by the Borrowers
to treat the Loans and/or Letters of Credit as being a "reportable transaction"
(within the meaning of Treasury Regulation Section 1.6011-4), a duly completed
copy of IRS Form 8886 or any successor form.
(n) As soon as available, a copy of any amendment or extension of or
supplement to the Budget that is proposed by the Borrowers to any of the
Pre-Petition Secured Parties.
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(o) Before the end of business on the third Wednesday after the
Closing Date and every second Wednesday thereafter, an updated report showing
the Borrowers' actual financial results compared to those shown on the Budget,
for the two-week period ending on the Friday preceding such Wednesday.
(p) Such additional information as Administrative Agent and/or any
Lender may from time to time reasonably request regarding the financial and
business affairs of any Borrower or any Subsidiary, including copies of any
amendments to the Asset Purchase Commitment entered into with the Proposed
Purchaser.
5.3 Notices and Reports to Administrative Agent and the Lenders. The
Borrowers shall notify Administrative Agent and the Lenders in writing of the
following matters at the following times and, where applicable, shall provide
Administrative Agent and the Lenders with the following described documents:
(a) Immediately after becoming aware of any Default or Event of
Default;
(b) Immediately after becoming aware of the assertion by the holder of
any Debt of any Borrower or any Subsidiary incurred after the Petition Date in a
face amount in excess of $100,000 that a default exists with respect thereto or
that such Borrower or such Subsidiary is not in compliance with the terms
thereof, or the threat or commencement by such holder of any enforcement action
because of such asserted default or non-compliance;
(c) Immediately after becoming aware of any event or circumstance that
could reasonably be expected to have a Material Adverse Effect;
(d) Immediately after becoming aware of any pending or threatened
action, suit, or proceeding, by any Person, or any pending or threatened
investigation by a Governmental Authority, which could reasonably be expected to
have a Material Adverse Effect;
(e) Immediately after becoming aware of any pending or threatened
strike, work stoppage, unfair labor practice claim, or other labor dispute
affecting any Borrower or any of its Subsidiaries in a manner which could
reasonably be expected to have a Material Adverse Effect;
(f) Immediately after becoming aware of any violation of any law,
statute, regulation, or ordinance of a Governmental Authority affecting any
Borrower or any Subsidiary which could reasonably be expected to have a Material
Adverse Effect;
(g) Immediately after receipt of any notice of any violation by any
Borrower or any of its Subsidiaries of any Environmental Law which could
reasonably be expected to have a Material Adverse Effect or that any
Governmental Authority has asserted in writing that such Borrower or any
Subsidiary is not in compliance in any material respect with any Environmental
Law or is investigating such Borrower's or such Subsidiary's material compliance
therewith;
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(h) Immediately after receipt of any written notice that any Borrower
or any of its Subsidiaries is or may be liable to any Person as a result of the
Release or threatened Release of any Contaminant or that such Borrower or such
Subsidiary is subject to investigation by any Governmental Authority evaluating
whether any remedial action is needed to respond to the Release or threatened
Release of any Contaminant which, in either case, is reasonably likely to give
rise to liability in excess of $500,000;
(i) Immediately after receipt of any written notice of the imposition
of any Environmental Lien against any property of any Borrower or any of its
Subsidiaries;
(j) Any change in any Borrower's name as it appears in the state of
its incorporation or other organization, type of entity, organizational
identification number, locations of Collateral, or form of organization, trade
names under which such Borrower will sell Inventory or create Accounts, or to
which instruments in payment of Accounts may be made payable, in each case at
least thirty (30) days prior thereto;
(k) Within ten (10) Business Days after any Borrower or any ERISA
Affiliate knows or has reason to know, that an ERISA Event or a prohibited
transaction (as defined in Sections 406 of ERISA and 4975 of the Code) has
occurred, and, when known, any action taken or threatened by the IRS, the DOL or
the PBGC with respect thereto;
(l) Upon request, or, in the event that such filing reflects a
significant change with respect to the matters covered thereby, within ten (10)
Business Days after the filing thereof with the PBGC, the DOL or the IRS, as
applicable, copies of the following: (i) each annual report (form 5500 series),
including Schedule B thereto, filed by a Borrower with the PBGC, the DOL or the
IRS with respect to each Plan, (ii) a copy of each funding waiver request filed
by a Borrower with the PBGC, the DOL or the IRS with respect to any Plan and all
communications received by any Borrower or, to the extent received by any
Borrower, any ERISA Affiliate from the PBGC, the DOL or the IRS with respect to
such request, and (iii) a copy of each other filing or notice filed with the
PBGC, the DOL or the IRS, with respect to each Plan by either a Borrower, to the
extent received by any Borrower, or any ERISA Affiliate;
(m) Upon request, copies of each actuarial report for any Plan or (to
the extent available to a Borrower on its request) Multi-Employer Plan; and
within ten (10) Business Days after receipt thereof by any Borrower or any ERISA
Affiliate, copies of the following: (i) any notices received by any Borrower of
the PBGC's intention to terminate a Plan or to have a trustee appointed to
administer such Plan; (ii) any favorable or unfavorable determination letter
from the IRS received by any Borrower regarding the qualification of a Plan
under Section 401(a) of the Code; or (iii) any notice received by a Borrower
from a Multi-Employer Plan regarding the imposition of withdrawal liability;
(n) Within ten (10) Business Days after any Borrower becomes aware of
the occurrence thereof: (i) any changes in the benefits of any existing Plan
which increase any Borrower's annual costs with respect thereto by an amount in
excess of $1,000,000, or the establishment of any new Plan or the commencement
of contributions to any Plan to which such Borrower or any ERISA Affiliate was
28
not previously contributing; or (ii) any failure by any Borrower or any ERISA
Affiliate to make a required installment or any other required payment under
Section 412 of the Code on or before the due date for such installment or
payment;
(o) Promptly after the delivery thereof to the U.S. Trustee or any
examiner appointed in any of the Chapter 11 Cases, a copy of each report
delivered to the U.S. Trustee or such examiner, except to the extent otherwise
publicly available;
(p) Promptly (and in any event within two (2) Business Days) after a
Borrower's receipt thereof, a copy of any notice of a Consenting Party under
(and as defined in) the Pre-Petition Secured Party Protection Order withdrawing
such Consenting Party's consent to the Borrowers' continued use of cash
collateral pursuant to the terms of the Pre-Petition Secured Party Protection
Order as in effect on the date hereof;
(q) Within ten (10) Business Days after any Borrower or (to the
knowledge of a Borrower) any ERISA Affiliate knows or has reason to know that
any of the following events has or will occur: (i) a Multi-Employer Plan has
been or will be terminated; (ii) the administrator or plan sponsor of a
Multi-Employer Plan intends to terminate a Multi-Employer Plan; or (iii) the
PBGC has instituted or will institute proceedings under Section 4042 of ERISA to
terminate a Multi-Employer Plan;
(r) Promptly after a Borrower's becoming aware of any non-compliance
with or violation or breach of any provision in the Pre-Petition Secured Party
Protection Order or of any asserted violation, non-compliance or breach thereof
(whether or not disputed by the Borrowers); and
(q) Promptly after receipt of any termination by the Proposed
Purchaser of an Asset Purchase Commitment.
Each notice given under this Section shall describe the subject matter thereof
in reasonable detail, and shall set forth the action that the Borrowers, any
Subsidiary, or any ERISA Affiliate, as applicable, has taken or proposes to take
with respect thereto. The Borrowers shall include counsel for Administrative
Agent on any "Special Notice List" or other similar list of parties to be served
with papers in the Chapter 11 Cases.
ARTICLE 6
GENERAL WARRANTIES AND REPRESENTATIONS
Each Borrower severally warrants and represents to Administrative Agent
and the Lenders that, except as hereafter disclosed to and accepted by
Administrative Agent and the Majority Lenders in writing:
6.1 Authorization, Validity, and Enforceability of this Agreement and
the DIP Financing Documents. Subject to entry of the Financing Order and the
terms thereof, each Borrower has the power and authority to execute, deliver and
perform the DIP Financing Documents, to incur the Obligations, and, on the date
of initial funding of the Loans hereunder, will be authorized to grant to
29
Administrative Agent Liens upon and security interests in the Collateral
pursuant to Section 364 of the Bankruptcy Code. Each Borrower has taken all
necessary action (including obtaining approval of its stockholders if necessary)
to authorize its execution, delivery, and performance of this Agreement and the
DIP Financing Documents to which it is a party. This Agreement and the other DIP
Financing Documents to which each Borrower is a party have been duly executed
and delivered by such Borrower and, subject to entry of the Financing Order and
the respective terms thereof, constitute the legal, valid and binding
obligations of such Borrower, enforceable against it in accordance with their
respective terms and the terms of the Financing Order. Each Borrower's
execution, delivery, and performance of this Agreement and the other DIP
Financing Documents to which it is a party (a) does not and will not conflict
with, or constitute a violation or breach of, or result in the imposition of any
Lien upon the property of such Borrower or any of its Subsidiaries, by reason of
the terms of any post-petition contract, mortgage, lease, agreement, indenture
or instrument to which such Borrower is a party or which is binding upon it, (b)
following entry of the Financing Order and pursuant to the terms thereof, will
not violate any Requirement of Law applicable to such Borrower or any of its
Subsidiaries, and (c) is not in contravention with any provision of its
certificate or articles of incorporation or by-laws or other constituent
documents of such Borrower or any of its Subsidiaries.
6.2 Validity and Priority of Administrative Agent's Liens. Upon entry
of the Financing Order, Administrative Agent's Liens will constitute valid,
enforceable, perfected and first priority Liens on the Collateral except for
Senior Permitted Liens.
6.3 Organization and Qualification. Each Borrower (a) is duly
organized or incorporated and validly existing in good standing under the laws
of the state of its organization or incorporation, (b) is qualified to do
business and is in good standing in those jurisdictions in which qualification
is necessary in order for it to own or lease its property and conduct its
business except where the failure to so qualify could not reasonably be expected
to have a Material Adverse Effect, and (c) has all requisite power and authority
to conduct its business and to own its property.
6.4 Corporate Name; Prior Transactions. Except as otherwise disclosed
on Schedule 6.4, each Borrower has not, during the past five (5) years, been
known by or used any other corporate or fictitious name, or been a party to any
merger or consolidation, or acquired all or substantially all of the assets of
any Person, or acquired any of its property outside of the ordinary course of
business.
6.5 Subsidiaries and Affiliates. Schedule 6.5 is a correct and complete
list of the name and relationship to each Borrower of each and all of that
Borrower's Subsidiaries and other Affiliates. Each Subsidiary is (a) duly
incorporated or organized and validly existing under the laws of its state of
incorporation or organization set forth on Schedule 6.5, and (b) qualified to do
business and in good standing in each jurisdiction in which the failure to so
qualify or be in good standing could reasonably be expected to have a Material
Adverse Effect and (c) has all requisite power and authority to conduct its
business and own its property.
30
6.6 Financial Statements and Projections.
(a) The Borrowers have delivered to Administrative Agent and the
Lenders consolidated audited balance sheet and related statements of income,
retained earnings, cash flows, and changes in stockholders equity for the
Borrowers and their consolidated Subsidiaries as of December 29, 2002, and for
the Fiscal Year then ended, accompanied by the report thereon of the Borrowers'
independent certified public accountants, McGladrey & Xxxxxx, LLP. Borrowers
have also delivered to Administrative Agent and the Lenders the consolidated
unaudited balance sheet and related statements of income and cash flows for the
Borrowers and their consolidated Subsidiaries as of September 28, 2003. All such
financial statements have been prepared in accordance with GAAP and present
accurately and fairly in all material respects the financial position of the
Borrowers and their consolidated Subsidiaries as at the dates thereof and their
results of operations for the periods then ended.
(b) The Latest Projections when submitted to the Lenders as required
herein represent the Borrowers' reasonable best estimate of the future financial
performance of the Borrowers and their consolidated Subsidiaries for the periods
set forth therein. The Latest Projections have been prepared on the basis of the
assumptions set forth therein, which the Borrowers believe are fair and
reasonable in light of current and reasonably foreseeable business conditions at
the time submitted to the Lenders.
6.7 [Reserved].
6.8 Liens on Collateral. There are no Liens of any nature whatsoever
on any assets of a Borrower other than Permitted Liens. Without limiting the
generality of the foregoing, no Borrower has granted (i) a UCC security interest
in any of its Inventory or in the proceeds thereof (including Accounts) in favor
of any Person, except Administrative Agent, the Pre-Petition Collateral Agents
and, solely with respect to Accounts sold or transferred by Cone Xxxxx to Cone
Receivables prior to the Closing Date, Cone Receivables; or (ii) a mortgage Lien
with respect to any of its Real Estate in favor of any Person other than
Administrative Agent and the Pre-Petition Collateral Agents.
6.9 Debt. After giving effect to the making of the Revolving Loans to
be made on the Closing Date, the Borrowers and their Subsidiaries have no Debt,
except (a) the Obligations, (b) Debt of Foreign Subsidiaries outstanding on the
Closing Date, and (c) Debt described on Schedule 6.9.
6.10 Distributions. Since the Petition Date, no Distribution has been
declared, paid, or made upon or in respect of any capital stock or other
securities of the Borrowers or any of their Subsidiaries, except for
Distributions made by a Subsidiary to a Borrower or by a Borrower to another
Borrower.
6.11 Real Estate. Schedule 6.11 sets forth, as of the Closing Date, a
correct and complete list of all Real Estate owned by the Borrowers and all Real
Estate owned by any of their Subsidiaries, all leases and subleases of real or
personal property held by the Borrowers as lessee or sublessee (other than
leases of personal property as to which a Borrower is lessee or sublessee for
which the value of such personal property in the aggregate is less than
31
$750,000) and all leases and subleases of real or personal property held by the
Borrowers as lessor or sublessor. As of the Closing Date, each of such leases
and subleases is valid and enforceable in accordance with its terms and is in
full force and effect, and no default by any party to any such lease or sublease
exists except for defaults by the Borrowers thereunder arising prior to the
Petition Date or as a consequence of the commencement of any of the Chapter 11
Cases. The Borrowers have good and marketable title in fee simple to the Real
Estate identified on Schedule 6.11 as owned by any Borrower or Subsidiary noted
thereon, and the Borrowers have good, indefeasible, and merchantable title to
all of their other property, free and clear of all Liens except Permitted Liens.
6.12 Proprietary Rights. As of the Closing Date, Schedule 6.12 sets
forth a correct and complete list of all of the Borrowers' U.S. patents,
registered trademarks, registered copyrights and applications therefor (the
"Registered Proprietary Rights"). None of the Registered Proprietary Rights is
subject to any licensing agreement, except as set forth on Schedule 6.12. To the
knowledge of the Borrowers, none of the Registered Proprietary Rights infringes
on or conflicts with any other Person's intellectual property in any material
respect. No claim or litigation to which any Borrower is a party regarding any
Borrower's Proprietary Rights is pending or, to the knowledge of the Borrowers,
threatened, and no patent, invention, device, application, principle or any
statute, law, rule, regulation, standard or code is pending or, to the knowledge
of each Borrower, proposed, which, in either case, could reasonably be expected
to have a Material Adverse Effect. Other than Registered Proprietary Rights
shown on Schedule 6.12 as owned by House 'N Home Fabrics & Draperies, Inc., one
or more of the Borrowers owns each of the Registered Proprietary Rights set
forth on Schedule 6.12, and none of the Borrowers' non-debtor domestic
Subsidiaries owns any material Registered Proprietary Right.
6.13 Trade Names. As of the Closing Date, all trade names or styles
under which any Borrower or any of its Subsidiaries will sell Inventory or
create Accounts, or to which instruments in payment of Accounts may be made
payable, are listed on Schedule 6.13.
6.14 Litigation. Except as set forth on Schedule 6.14, as of the
Closing Date, there is no pending or, to the best of each Borrower's knowledge,
threatened, action, suit, proceeding, or counterclaim by any Person, or to the
best of any Borrower's knowledge, investigation by any Governmental Authority,
or any basis for any of the foregoing, which, if determined adversely to
Borrowers, could reasonably be expected to have a Material Adverse Effect.
6.15 Labor Disputes. Except as set forth on Schedule 6.15 and except
to the extent that none of the following could reasonably be expected to have a
Material Adverse Effect, as of the Closing Date (a) there is no collective
bargaining agreement or other labor contract covering employees of any Borrower
or any of their Subsidiaries, (b) no such collective bargaining agreement or
other labor contract is scheduled to expire during the term of this Agreement,
(c) to the knowledge of Borrowers, no union or other labor organization is
seeking to organize, or to be recognized as, a collective bargaining unit of
employees of any Borrower or any of their Subsidiaries or for any similar
purpose, and (d) there is no pending or (to the best of any Borrower's
knowledge) threatened, strike, work stoppage, material unfair labor practice
claim, or other material labor dispute against or affecting such Borrower or its
Subsidiaries or their employees.
32
6.16 Environmental Laws. Except as otherwise disclosed on Schedule 6.16,
as of the Closing Date:
(a) Each Borrower and its Subsidiaries have complied in all material
respects with all Environmental Laws and neither such Borrower nor any
Subsidiary nor any of its presently owned Real Estate or presently conducted
operations, nor its previously owned Real Estate or prior operations, is subject
to any enforcement order from or liability agreement with any Governmental
Authority or private Person respecting (i) compliance with any Environmental Law
or (ii) any potential liabilities and costs or remedial action arising from the
Release or threatened Release of a Contaminant, except for instances of
noncompliance, liabilities or costs that could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(b) Each Borrower and its Subsidiaries have obtained all material
permits necessary for their current operations under Environmental Laws, and all
such permits are in good standing in all material respects and such Borrower and
its Subsidiaries are in compliance with all material terms and conditions of
such permits.
(c) None of the Borrowers or their Subsidiaries, nor, to the best of
the Borrowers' knowledge, any of their predecessors in interest, has in
violation of applicable law stored, treated or disposed of any hazardous waste,
except for instances of non-compliance which could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(d) None of the Borrowers or their Subsidiaries has received any
summons, complaint, order or similar written notice indicating that it is not
currently in compliance with, or that any Governmental Authority is
investigating its compliance with, any Environmental Laws or that it is or may
be liable to any other Person as a result of a Release or threatened Release of
a Contaminant, except with respect to instances of non-compliance or Releases or
threatened Releases which could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
(e) To the best of each Borrower's knowledge, none of the present or
past operations of such Borrower and its Subsidiaries is the subject of any
investigation by any Governmental Authority evaluating whether any remedial
action is needed to respond to a Release or threatened Release of a Contaminant,
except with respect to Releases or threatened Releases which could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
(f) There is not now, nor to the best of each Borrower's knowledge has
there ever been, on or in the Real Estate:
(1) any underground storage tanks or surface impoundments,
(2) any asbestos-containing material, or
(3) any polychlorinated biphenyls (PCBs) used in hydraulic
oils, electrical transformers or other equipment,
33
except to the extent the presence of any of the foregoing could not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(g) None of the Borrowers or their Subsidiaries has filed any notice
under any requirement of Environmental Law reporting a spill or accidental and
unpermitted Release or discharge of a Contaminant into the environment, except
with respect to spills, Releases or discharges which could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
(h) None of the Borrowers or their Subsidiaries has entered into any
negotiations or settlement agreements with any Person (including the prior owner
of its property) imposing material obligations or liabilities on such Borrower
or any of its Subsidiaries with respect to any remedial action in response to
the Release of a Contaminant or environmentally related claim.
(i) To the best knowledge of the Borrowers, none of the products
manufactured, distributed or sold by the Borrowers or any of their Subsidiaries
contain asbestos-containing material.
(j) No Environmental Lien has attached to the Real Estate.
6.17 No Violation of Law. Except as otherwise described in Section
6.16 or Section 6.19 hereof, no Borrower nor any of its Subsidiaries is in
violation of any law, statute, regulation, ordinance, judgment, order, or decree
applicable to it which violation could reasonably be expected to have a Material
Adverse Effect.
6.18 [Reserved.]
6.19 ERISA Compliance. As of the Closing Date, except in each case for
instances of non-compliance that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect or as specifically
disclosed in Schedule 6.19:
(a) Each Plan is in compliance with the applicable provisions of
ERISA, the Code and other federal or state law. Each Plan which is intended to
qualify under Section 401(a) of the Code has received a favorable determination
letter from the IRS and to the best knowledge of each Borrower, nothing has
occurred which would cause the loss of such qualification. Each Borrower and
each ERISA Affiliate have made all required contributions to any Plan subject to
Section 412 of the Code, and no application for a funding waiver or an extension
of any amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan.
(b) There are no pending or, to the best knowledge of each Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan. To the knowledge of the Borrowers, there has been no
prohibited transaction or violation of the fiduciary responsibility rules of
Title I of ERISA with respect to any Plan subject to Title I of ERISA.
34
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
any Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); and
(iv) no Borrower nor (to the knowledge of any Borrower) any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Section 4201 or 4243 of ERISA with respect to a
Multi-Employer Plan.
(d) No Borrower, nor any ERISA Affiliate, is (or, for the preceding
five (5) years, was) required to make contributions to a Multi-Employer Plan.
6.20 Taxes. As of the Closing Date, the Borrowers and their
Subsidiaries have filed all federal and other tax returns and reports required
to be filed, and have paid all federal and other taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
income or assets otherwise due and payable except for taxes that are not due and
payable as of the Petition Date or are being Properly Contested and taxes that
are not secured by a Lien that is not a Permitted Lien. As of the Closing Date,
there are no Liens on any of the Collateral that arise under ERISA or that have
been filed by the PBGC.
6.21 Regulated Entities. None of the Borrowers, any Person controlling
any Borrower, or any Subsidiary, is an "Investment Company" within the meaning
of the Investment Company Act of 1940. No Borrower is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code or law, or any other
federal or state statute or regulation limiting its ability to incur
indebtedness.
6.22 Use of Proceeds; Margin Regulations; Loans to Directors and
Executive Officers. The proceeds of the Loans are to be used solely for the
purposes set forth in Section 1.2(b). No Borrower or Subsidiary is engaged in
the business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock. None of the proceeds of the
Loans will be used directly or indirectly to fund a personal loan to or for the
benefit of a director or executive officer of a Borrower or other Obligor, or
otherwise used for any purpose that is prohibited by applicable law.
6.23 Copyrights, Patents, Trademarks and Licenses, etc. To the best
knowledge of the Borrowers, the Borrowers own or are licensed or otherwise have
the right to use all of the patents, trademarks, service marks, trade names,
copyrights, contractual franchises, licenses, rights of way, authorizations and
other rights that are reasonably necessary for the operation of its businesses,
without conflict with the rights of any other Person in any material respect.
6.24 [Reserved].
6.25 Full Disclosure. None of the representations or warranties made
by any Borrower or any Subsidiary in the DIP Financing Documents as of the date
such representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of any Borrower or any Subsidiary in connection with the DIP
35
Financing Documents (including the offering and disclosure materials delivered
by or on behalf of the Borrowers to Administrative Agent or any Lenders prior to
the Closing Date), contains any untrue statement of a material fact or omits any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they are made, not
misleading as of the time when made or delivered.
6.26 [Reserved].
6.27 Bank Accounts. Schedule 6.27 contains as of the Closing Date a
complete and accurate list of all bank accounts maintained by each Borrower with
any bank or other financial institution.
6.28 Governmental Authorization. Other than entry by the Court of the
Financing Order, no approval, consent, exemption, authorization, or other action
by, or notice to, or filing with, any Governmental Authority or other Person is
necessary or required in connection with the execution, delivery or performance
by, or enforcement against, any Borrower or any Subsidiaries of this Agreement
or any other DIP Financing Document other than such consents or approvals the
failure to obtain which could not reasonably be expected to have a Material
Adverse Effect.
6.29 Tax Shelter Regulations. The Borrowers do not intend to treat the
Loans and/or Letters of Credit as being a "reportable transaction" (within the
meaning of Treasury Regulation Section 1.6011-4). In the event the Borrowers
determine to take any action inconsistent with such intention, it will promptly
notify Administrative Agent thereof. If the Borrowers so notify Administrative
Agent, the Borrowers acknowledge that one or more of the Lenders may treat its
Loans and/or its interest in Non-Ratable Loans and/or Agent Advances and/or
Letters of Credit as part of a transaction that is subject to Treasury
Regulation Section 301.6112-1, and such Lender or Lenders, as applicable, will
maintain the lists and other records required by such Treasury Regulation.
6.30 Anti-Terrorism Laws.
(a) General.
Neither any Borrower nor any Affiliate of any Borrower is in violation
of any Anti-Terrorism Law or engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
Law.
(b) Executive Order No. 13224.
(i) Neither any Borrower nor any Affiliate of any Borrower
is any of the following (each a "Blocked Person"):
(1) a Person that is listed in the annex to, or is otherwise
subject to the provisions of, Executive Order No. 13224;
36
(2) a Person owned or controlled by, or acting for or on
behalf of, any Person that is listed in the annex to, or is otherwise
subject to the provisions of, Executive Order No. 13224;
(3) a Person or entity with which any bank or other
financial institution is prohibited from dealing or otherwise engaging
in any transaction by any Anti-Terrorism Law;
(4) a Person or entity that commits, threatens or conspires
to commit or supports "terrorism" as defined in Executive Order No.
13224;
(5) a Person or entity that is named as a "specially
designated national" on the most current list published by the U.S.
Treasury Department Office of Foreign Asset Control at its official
website or any replacement website or other replacement official
publication of such list; or
(6) a Person or entity who is affiliated with a Person or
entity listed above.
Neither any Borrower nor any Affiliate of any Borrower (i) conducts any business
or engages in making or receiving any contribution of funds, goods or services
to or for the benefit of any Blocked Person or (ii) deals in, or otherwise
engages in any transaction relating to, any property or interests in property
blocked pursuant to Executive Order No. 13224.
6.31 Reaffirmation of Representations and Warranties. All of the
foregoing representations and warranties made by Borrowers in this Agreement or
in any of the other DIP Financing Documents shall survive the execution and
delivery of this Agreement and such other DIP Financing Documents, and shall be
deemed to have been remade and reaffirmed on each day that Borrowers request or
are deemed to have requested the funding of a Loan under the DIP Facility,
except for (i) changes that may occur after the date hereof as long as
Administrative Agent and the Majority Lenders have consented to such changes or
(ii) changes that are not violative of any provision of this Agreement.
ARTICLE 7
AFFIRMATIVE AND NEGATIVE COVENANTS
Each Borrower covenants to Administrative Agent and each Lender that so
long as any of the Obligations remain outstanding or the DIP Facility is in
effect:
7.1 Taxes and Other Obligations. Each Borrower shall, and shall cause
each of Subsidiaries to, (a) file when due all tax returns and other reports
which it is required to file; (b) pay, or provide for the payment, when due, of
all taxes, fees, assessments and other governmental charges against it or upon
its property, income and franchises, in each case, arising on or after the
Petition Date, make all required withholding and other tax deposits, and
establish adequate reserves for the payment of all such items, and provide to
Administrative Agent and the Lenders, upon request, satisfactory evidence of its
timely compliance with the foregoing; and (c) pay when due all Debt owed by it
and all claims of materialmen, mechanics, carriers, warehousemen, landlords,
processors and other like Persons, and all other indebtedness owed by it and
37
perform and discharge in a timely manner all other obligations undertaken by it,
in each case arising on or after the Petition Date, and in each case except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect and no Lien results therefrom that is not a Permitted Lien;
provided, however, so long as the Borrowers have notified Administrative Agent
in writing, neither a Borrower nor any of its Subsidiaries need pay any tax,
fee, assessment, or governmental charge or other obligation that is being
Properly Contested.
7.2 Legal Existence and Good Standing. Each Borrower shall, and shall
cause each of its Subsidiaries to, maintain its legal existence and its
qualification and good standing in all jurisdictions in which the failure to
maintain such existence and qualification or good standing could reasonably be
expected to have a Material Adverse Effect.
7.3 Compliance with Law and Agreements; Maintenance of Licenses. Each
Borrower shall comply, and shall cause each Subsidiary to comply with all
Requirements of Law of any Governmental Authority having jurisdiction over it or
its business (including the Bankruptcy Code, the Federal Fair Labor Standards
Act, all Environmental Laws and the Xxxxxxxx-Xxxxx Act), except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect. Each Borrower shall, and shall cause each of its Subsidiaries to, obtain
and maintain all licenses, permits, franchises and governmental authorizations
necessary to own its property and to conduct its business as conducted on the
Closing Date, except where the failure to do so could not reasonably be expected
to have a Material Adverse Effect. No Borrower shall modify, amend or alter its
certificate or articles of incorporation, or its limited liability company
operating agreement or limited partnership agreement, as applicable, other than
in a manner which does not adversely affect the rights of the Lenders or
Administrative Agent.
7.4 Maintenance of Property; Inspection of Property.
(a) Each Borrower shall, and shall cause each of its Subsidiaries to,
maintain all of its property necessary and useful in the conduct of its
business, in good operating condition and repair, ordinary wear and tear
excepted.
(b) Each Borrower shall permit representatives and independent
contractors of Administrative Agent from time to time, as often as may be
reasonably requested (but only during normal business hours), and at the expense
of the Borrower, to visit and inspect any of its properties (including any
Collateral), to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom and to discuss its affairs, finances and
accounts with its directors, officers and independent public accountants, at
such reasonable times during normal business hours and as soon as may be
reasonably desired, upon reasonable advance notice to Borrowers; provided,
however, when an Event of Default exists, Administrative Agent or any Lender may
do any of the foregoing at the expense of the Borrowers at any time during
normal business hours and without advance notice.
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7.5 Insurance.
(a) Each Borrower shall, and shall cause each of its Subsidiaries to,
maintain in full force and effect insurance (including worker's compensation
insurance, liability insurance, property insurance and business interruption
insurance) in such amounts, with such insurers, covering such risks and
liabilities and with such deductibles or self-insurance retentions as are in
accordance with reasonable business practices and are customary for Persons
engaged in the same or similar business.
(b) Each Borrower shall cause Administrative Agent, for the ratable
benefit of Administrative Agent and the Lenders, to be named as secured party or
mortgagee and loss payee or additional insured, in a manner acceptable to
Administrative Agent. Each policy of insurance (other than flood insurance
policies) shall contain a clause or endorsement requiring the insurer to give
not less than thirty (30) days prior written notice to Administrative Agent in
the event of cancellation of the policy for any reason whatsoever (except that
in the event of cancellation for non-payment of premiums, the insurer may
provide Administrative Agent with up to thirty (30) days prior written notice
but shall provide Administrative Agent with not less than ten (10) days prior
written notice) and a clause or endorsement stating that the interest of
Administrative Agent shall not be impaired or invalidated by any act or neglect
of such Borrower or any of its Subsidiaries or the owner of any Real Estate for
purposes more hazardous than are permitted by such policy (with such exceptions
and stipulations relating thereto that the insurer reasonably requires and are
reasonably acceptable to Administrative Agent). All premiums for such insurance
shall be paid by each Borrower when due, and certificates of insurance and, if
requested by Administrative Agent or any Lender, photocopies of the policies,
shall be delivered to Administrative Agent. If a Borrower fails to procure such
insurance or to pay the premiums therefor when due, Administrative Agent may,
and at the direction of the Majority Lenders shall, do so from the proceeds of
Revolving Loans.
7.6 Disposition of Insurance and Condemnation Proceeds. Each Borrower
shall promptly notify Administrative Agent and the Lenders of any loss, damage,
or destruction to any Collateral, whether or not covered by insurance, if the
fair market value or book value (whichever is greater) of the subject Collateral
is $100,000 or more. Administrative Agent is hereby authorized to collect,
subject to the rights of any holder of a Senior Permitted Lien, all insurance
and condemnation proceeds in respect of Collateral directly and to apply them as
follows:
(a) With respect to insurance and condemnation proceeds relating to
Collateral other than Fixed Assets, Borrowers shall promptly remit, or cause to
be promptly remitted, to Administrative Agent all such proceeds and, after
deducting from such proceeds the reasonable expenses, if any, incurred by
Administrative Agent in the collection or handling thereof, Administrative Agent
shall apply such proceeds to the reduction of the Obligations in the order
provided for in Section 3.6.
(b) With respect to insurance and condemnation proceeds relating to
Collateral consisting of Fixed Assets ("Fixed Asset Loss Proceeds") not
otherwise payable to the holder of a Senior Permitted Lien thereon, the
Borrowers shall promptly remit, or cause to be remitted, to Administrative Agent
all such Fixed Asset Loss Proceeds and, after deducting therefrom the reasonable
39
expenses, if any, incurred by Administrative Agent in the collection or handling
thereof, Administrative Agent shall deposit such Fixed Asset Loss Proceeds into
the Cash Collateral Account, which shall be subject to Administrative Agent's
Liens as security for the payment of the Obligations. If the Borrowers shall,
within a period of sixty (60) days after Administrative Agent's receipt of such
Fixed Asset Loss Proceeds, elect, by written notice to Administrative Agent, to
replace, repair, restore or rebuild the relevant Fixed Asset that was the
subject of the insured loss or condemnation, or if Administrative Agent (acting
at the direction of the Majority Lenders) shall require the Borrowers to
replace, repair, restore, or rebuild such Fixed Asset, then the Borrowers shall
proceed to do so in a diligent and expeditious manner and (in the case of a
repair, restoration or rebuilding) with material and workmanship of
substantially the same quality as existed before such insured loss or
condemnation; and Administrative Agent shall be authorized to remit funds from
the Cash Collateral Account to the Borrowers for the purpose of replacement,
repair, restoration or rebuilding of such Fixed Asset (a "Restoration
Remittance") but Administrative Agent's and Lenders' obligation to make any such
Restoration Remittance shall be conditioned upon satisfaction of each of the
following conditions: (1) no Default or Event of Default exists at the time of
the Borrowers' request for a Restoration Remittance or would exist after the
funding thereof; (2) the Borrowers first (i) provide Administrative Agent and
the Lenders with plans and specifications ("Plans and Specs") for any repair,
restoration or rebuilding to the extent that the project costs could reasonably
be expected to exceed $1,000,000, and such Plans and Specs are reasonably
satisfactory to Administrative Agent and the Majority Lenders and (ii)
demonstrate to the reasonable satisfaction of Administrative Agent and the
Majority Lenders that funds available to the Borrowers will be sufficient to
complete such project in accordance with the Plans and Specs; (3) the Commitment
Termination Date has not occurred; (4) the aggregate amount of all Restoration
Remittances during the DIP Term does not exceed $3,500,000 and (5) the aggregate
amount of Restoration Remittances made to replace, restore, repair or rebuild
any Fixed Asset does not exceed the Fixed Asset Loss Proceeds attributable to
the such Fixed Asset. Notwithstanding anything to the contrary contained in this
Agreement, at any time an Event of Default exists, Administrative Agent may (and
at the direction of the Majority Lenders shall) apply all or any portion of the
proceeds of the Cash Collateral Account attributable to Fixed Asset Loss
Proceeds to the payment of all or any portion of the Obligations.
7.7 Environmental Laws.
(a) Each Borrower shall, and shall cause each of its Subsidiaries to,
conduct its business in compliance in all material respects with all
Environmental Laws applicable to it, including those relating to the generation,
handling, use, storage, and disposal of any Contaminant. Each Borrower shall,
and shall cause each of its Subsidiaries to, take prompt and appropriate action
to respond to any non-compliance with Environmental Laws that could reasonably
be expected to have a Material Adverse Effect and shall regularly report to
Administrative Agent on such response.
(b) Administrative Agent and its representatives shall have the right
at any reasonable time and at reasonable intervals to enter and visit the Real
Estate and any other place where any property of a Borrower is located for the
purposes of observing the Real Estate, taking and removing soil or groundwater
samples, and conducting tests on any part of the Real Estate, provided that, for
so long as no Event of Default exists, Administrative Agent will limit its
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environmental due diligence to a phase I study unless otherwise agreed by the
Borrowers. Administrative Agent is under no duty, however, to visit or observe
the Real Estate or to conduct tests, and any such acts by Administrative Agent
will be solely for the purposes of protecting Administrative Agent's Liens and
preserving Administrative Agent and the Lenders' rights under the DIP Financing
Documents. No site visit, observation or testing by Administrative Agent and the
Lenders will result in a waiver of any default of the Borrowers or impose any
liability on Administrative Agent or the Lenders. In no event will any site
visit, observation or testing by Administrative Agent be a representation that
hazardous substances are or are not present in, on or under the Real Estate, or
that there has been or will be compliance with any Environmental Law. Neither
any Borrower nor any other party is entitled to rely on any site visit,
observation or testing by Administrative Agent. Except as required by applicable
law, Administrative Agent and the Lenders owe no duty of care to protect any
Borrower or any other Person against or to inform any Borrower or any other
party of, any hazardous substances or any other adverse condition affecting the
Real Estate. Administrative Agent may in its discretion disclose to a Borrower
or to any other party if so required by law any report or findings made as a
result of, or in connection with, any site visit, observation or testing by
Administrative Agent. The Borrowers understand and agree that Administrative
Agent makes no warranty or representation to the Borrowers or any other party
regarding the truth, accuracy or completeness of any such report or findings
that may be disclosed. The Borrowers also understand that depending on the
results of any site visit, observation or testing by Administrative Agent and
disclosed to the Borrowers, the Borrowers may have a legal obligation to notify
one or more environmental agencies of the results. In each instance,
Administrative Agent will give such Borrower reasonable notice before entering
the Real Estate or any other place Administrative Agent is permitted to enter
under this Section 7.7(b). Administrative Agent will make reasonable efforts to
avoid interfering with such Borrower's use of the Real Estate or any other
property in exercising any rights provided hereunder.
7.8 ERISA. Each Borrower shall, and shall cause each of its ERISA
Affiliates to, refrain from engaging in a prohibited transaction or violation of
the fiduciary responsibility rules under Title 1 of ERISA with respect to any
Pension Plan.
7.9 Mergers, Consolidations or Sales. None of the Borrowers nor any of
their Subsidiaries shall enter into any transaction of merger or consolidation,
or wind up, liquidate or dissolve, or transfer, sell, assign, lease, or
otherwise dispose of all or any part of its property, except Permitted Asset
Dispositions. Without limiting the generality of the foregoing, no Borrower
shall, after the Closing Date, sell, assign, transfer or otherwise dispose of,
or grant any security or other interest in, any of its Accounts to or in favor
of Cone Receivables or any other Person (except Liens granted in favor of
Administrative Agent).
7.10 Distributions; Capital Change; Restricted Investments. None of the
Borrowers nor any of their Subsidiaries shall (i) directly or indirectly
declare or make, or incur any liability to make, any Distribution (except for
Distributions made by a Subsidiary to a Borrower, including Distributions made
by Cone Receivables consisting of Purchased Receivables and Related Assets upon
repurchase thereof or by a Borrower to another Borrower), (ii) make any change
in its capital structure which could have a Material Adverse Effect or (iii)
make any Restricted Investment, except that this clause (iii) shall not apply to
transactions otherwise permitted by Sections 7.13 and 7.15.
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7.11 Section 363 Sale. Unless otherwise agreed to by Administrative
Agent and the Majority Lenders in their sole discretion, the Borrowers shall
diligently and in good faith endeavor to conclude the Proposed Section 363 Sale
to the Proposed Purchaser or to any higher and better bidder as determined
pursuant to bidding procedures approved by the Court; provided, however, that in
no event shall any such sale be pursued unless Administrative Agent in its sole
and absolute discretion is satisfied that the cash proceeds to be remitted to
Administrative Agent in connection with the closing of any such sale will be
sufficient in amount to result in Full Payment of the Obligations and any order
approving such sale requires Full Payment of the Obligations as a condition to
closing. In the event of any such sale, the DIP Facility and the Commitments
shall terminate, unless otherwise agreed by Administrative Agent and the
Majority Lenders in their sole and absolute discretion.
7.12 Guaranties. No Borrower or any Subsidiary shall make, issue, or
become liable on any Guaranty, except Guaranties of the Obligations in favor of
Administrative Agent for the benefit of itself and the Lenders and any unsecured
guaranty or other assurance of payment of operating or other expenses of a
Foreign Subsidiary to the extent permitted by Section 7.15(B)(ii).
7.13 Permitted Debt. No Borrower or any Subsidiary shall create,
incur, assume or suffer to exist any Debt other than (i) Claims in existence on
the Petition Date (and Adequate Protection Claims associated with any such
Claims), (ii) the Obligations, (iii) Debt under Capitalized Leases and Purchase
Money Debt, which, if secured, are only secured by a Permitted Lien, (iv)
indebtedness of a Borrower owing to another Borrower (but each Borrower hereby
subordinates its right to payment of any such indebtedness to the Full Payment
of the Obligations), and (v) indebtedness of any Foreign Subsidiary to any
Borrowers and outstanding on the Petition Date and, to the extent permitted by
Section 7.15, indebtedness incurred by Foreign Subsidiaries after the Petition
Date to any Borrowers.
7.14 Prepayment. No Borrower or any Subsidiary shall voluntarily
prepay any Debt, except (i) the Obligations in accordance with the terms of the
DIP Financing Documents, (ii) payments authorized by the Court with respect to
Adequate Protection Claims, and (iii) any Debt owing by a Subsidiary to a
Borrower.
7.15 Transactions with Affiliates. No Borrower or any Subsidiary shall
sell, transfer, distribute, or pay any money or property, including any fees or
expenses of any nature (including any fees or expenses for management services),
to any Affiliate, or lend or advance money or property to any Affiliate, or
invest in (by capital contribution or otherwise) or purchase or repurchase any
stock or indebtedness, or any property, of any Affiliate, or become liable on
any Guaranty of the indebtedness, dividends, or other obligations of any
Affiliate, or cause any letter of credit to be issued to support or secure any
Debt of a Foreign Subsidiary or to otherwise benefit a Foreign Subsidiary;
provided that (a) the Borrowers may (i) sell Inventory to Foreign Subsidiaries
in the Ordinary Course of Business of such Borrowers and in arm's length
transactions and (ii) make Foreign Subsidiary Advances, to the extent that the
sum of (A) the aggregate outstanding face amount of Accounts arising from such
sales to Foreign Subsidiaries after the Petition Date and (B) the aggregate
amount of all Foreign Subsidiary Advances made after the Petition Date does not
exceed in aggregate as to (A) and (B) the sum of $1,500,000 at any time; (b)
Cone Xxxxx may repurchase the Purchased Receivables and Related Assets pursuant
42
to the terms of the Financing Order and Section 7.23 hereof; (c) the Borrowers
may conclude transactions permitted by Section 7.13(iv) hereof; (d) the
Borrowers may make advances to employees in the Ordinary Course of Business in
respect of travel and expense reimbursements; (e) the Borrowers may pay
customary fees and expenses to members of the board of directors of Cone Xxxxx
in the Ordinary Course of Business; (f) the Borrowers may conclude the Proposed
Section 363 Sale to the Proposed Purchaser to the extent authorized by Section
7.11 hereof; (g) the Borrowers may pay payroll and payroll tax expenses due to
employees of Cone Xxxxx International Corporation, Cone Administration and
Sales, LLC, Cone Finishing, LLC, Cone White Oak, LLC, Cone Xxxxxxxxxx County,
LLC, and Cone Jacquards, LLC to the extent such Subsidiaries make such employees
available to the Borrowers in the Ordinary Course of Business and in amounts not
to exceed those shown on the Budget (after giving effect to the Permitted
Variance); and (h) subject to the terms of Section 7.33, the Borrowers may pay
expenses of domestic Subsidiaries (other than a Borrower) of a Borrower to the
extent and in amounts not to exceed those provided in the Budget (after giving
effect to the Permitted Variance).
7.16 Investment Banking and Finder's Fees. No Borrower or any
Subsidiary shall pay or agree to pay, or reimburse any other party with respect
to, any investment banking or similar or related fee, underwriter's fee,
finder's fee, or broker's fee to any Person in connection with this Agreement.
The Borrowers shall defend and indemnify Administrative Agent and the Lenders
against and hold them harmless from all claims of any Person that the Borrowers
are obligated to pay for any such fees, and all costs and expenses (including
attorneys' fees) incurred by Administrative Agent and/or any Lender in
connection therewith.
7.17 Business Conducted. No Borrower shall, and no Borrower shall
permit any of its Subsidiaries to, engage directly or indirectly, in any line of
business other than the businesses in which such Borrower is engaged on the
Petition Date or businesses reasonably related thereto.
7.18 Liens. No Borrower shall, and no Borrower shall permit any of its
Subsidiaries to, create, incur, assume, or permit to exist any Lien on any
property (including any Collateral) now owned or hereafter acquired by any of
them, except Permitted Liens.
7.19 Sale and Leaseback Transactions. No Borrower or any Subsidiary
shall, directly or indirectly, enter into any arrangement with any Person
providing for such Borrower or such Subsidiary to lease or rent property that
such Borrower or such Subsidiary has sold or will sell or otherwise transfer to
such Person.
7.20 New Subsidiaries. The Borrowers shall not, directly or
indirectly, organize, create, acquire or permit to exist any Subsidiary other
than Subsidiaries in existence on the Petition Date and described in Schedule
6.5.
7.21 Fiscal Year. The Borrowers shall not change their Fiscal Year.
7.22 Budget. In addition to their obligations under Section 5.2(n)
hereof, the Borrowers shall promptly prepare and submit to Administrative Agent
and Lenders, at least fifteen (15) days prior to the last date covered by the
Budget as in effect on the date of this Agreement, a proposed extension of the
Budget for a period covering at least thirteen (13) weeks, and, at least thirty
43
(30) days prior to the last date covered by any subsequent Budget, Borrowers
shall prepare and deliver to Administrative Agent and Lenders a proposed
extension of such Budget for a period covering at least thirteen (13) weeks.
7.23 Purchased Receivables and Related Assets. On or before the
Closing Date, Cone Xxxxx shall enter into, and cause Cone Receivables and Cone
Foreign to enter into, the Receivables Purchase Termination Agreement, pursuant
to which (i) the initial advance under this Agreement shall be used to fund a
capital contribution by Cone Xxxxx and Cone Foreign to Cone Receivables in an
amount sufficient for Cone Receivables to repurchase the Purchased Receivables
and Related Assets; (ii) Cone Receivables shall use such funds to repurchase the
Purchased Receivables and Related Assets and, subject to the limitations set
forth in such agreement, shall terminate the debtor-in-possession securitization
facility as contemplated by the Financing Order, (iii) Cone Receivables shall
distribute such Purchased Receivables and Related Assets to Cone Xxxxx and Cone
Foreign as a return of capital; and (iv) the parties to such Receivables
Purchase Termination Agreement shall enter into mutual releases of claims as set
forth in such agreement.
7.24 Food Security Act.
(a) No Borrower shall purchase any cotton or other goods that would
constitute farm products if the seller were a Person engaged in farming
operations, unless such Borrower acquires good title to such goods free and
clear of all Liens (except Permitted Liens) and, in particular, free from any
statutory or other grower's or producer's Liens in favor of any secured party or
lienholder who has taken steps under the Food Security Act or any other federal
or state statute to preserve its Lien rights upon such goods notwithstanding the
passage of title directly or indirectly to such Borrower. No Borrower shall
enter into any agreement for the purchase of cotton or other goods that would
constitute farm products if the seller were a Person engaged in farming
operations, unless (i) such agreement is in writing and contains an express or
is deemed to contain an implied warranty by the seller that such Borrower will
acquire such goods, the transfer is rightful and the goods will be delivered
free and clear of all Liens and (ii) the seller has adequate financial resources
to pay a claim for breach by seller of such agreement.
(b) Unless otherwise disclosed to Administrative Agent in writing by a
Borrower, the Borrowers warrant that no Borrower has, within the twenty-day
period prior to the date hereof, received written notice pursuant to the
applicable provisions of the Food Security Act or pursuant to the Uniform
Commercial Code or any other applicable local laws from (i) any of its suppliers
or sellers (collectively, "Sellers") of cotton or other farmed products, (ii)
any secured party of any such Seller of cotton or other farmed products or (iii)
the Secretary of State (or the equivalent official) of any state in which cotton
or farm products purchased by such Borrower are produced, advising or notifying
such Borrower of a Lien in and to cotton or any other farm products that may be
purchased by such Borrower or intended for resale to such Borrower (all of the
foregoing, the "Food Security Act Notice").
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(c) Each Borrower shall in all respects comply with all applicable
Food Security Act Notices during their periods of effectiveness under the Food
Security Act, including directions to make payments to the Sellers by issuing
payment instruments directly to the Sellers' Secured Party or jointly payable to
the Seller and the Sellers' Secured Party, as specified in the Food Security Act
Notice, so as to terminate or release the security interest in cotton or other
farmed products maintained under the Food Security Act. Each Borrower shall
notify Administrative Agent in writing within five (5) Business Days after
receipt by such Borrower of any applicable or purportedly applicable Food
Security Act Notice or amendment to a previous Food Security Act Notice or
notice of any such other security interest Lien or other claim and provide
Administrative Agent with a copy of such Food Security Act Notice or amendment
or notice.
(d) If at any time, with Administrative Agent's written consent, a
Borrower shall purchase cotton or other farmed products from a Person engaged in
farming operations or an agent for such Person, and without limiting any other
provisions of this Section 7.24, then, if the jurisdiction where the cotton or
other farmed products so purchased by such Borrower has implemented the
provisions of the Food Security Act with respect to the creation of a "central
filing system," such Borrower shall promptly register with the Secretary of
State (or equivalent official) of each such jurisdiction, pursuant to the
registration requirements of the Food Security Act and shall promptly notify
Administrative Agent in writing of such registration with the central filing
system and provide Administrative Agent with copies of any Food Security Act
Notices, master list, supplements thereto or other materials then or thereafter
received from the Secretary of State (or other official) of the central filing
system by such Borrower.
7.25 Margin Stock. The Borrowers shall not, and shall not suffer or
permit any Subsidiary to, use any portion of the Loan proceeds, directly or
indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Borrowers or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
7.26 Further Assurances; Post-Closing Obligations.
(a) The Borrowers shall promptly execute and deliver, or promptly
cause to be executed and delivered, to Administrative Agent and/or the Lenders
such documents and agreements, and shall take or cause to be taken such actions,
as Administrative Agent or any Lender may, from time to time, request to carry
out the terms and conditions of this Agreement and the DIP Financing Documents.
(b) Without limiting the generality of the foregoing, the Borrowers
agree to (i) execute and deliver, or cause to be executed or delivered, to
Administrative Agent and/or the Lenders as soon as possible, but in any event
not later than forty-five (45) days after the Closing Date (or such later date
as may be agreed to by Majority Lenders in their sole discretion), any Security
Documents, including the Mortgages, that Majority Lenders request to be executed
and delivered but that were not executed and delivered by the Borrowers on or
prior to the Closing Date, and (ii) cause their insurance carriers to execute
and deliver to Administrative Agent, on or before the end of business on
December 23, 2003, loss payable endorsements with respect to all property
45
insurance policies covering the Borrowers' property, which endorsements shall be
in substantially the form delivered to and accepted by Administrative Agent from
Industrial Risk Insurers on the Closing Date, or in such other form as may be
reasonably satisfactory to Administrative Agent.
7.27 Compliance with Orders. To the extent having applicability to
such Borrower or Subsidiary, each Borrower and its Subsidiaries shall (i) comply
with the Financing Order and the Pre-Petition Secured Party Protection Order and
(ii) comply in all material respects with all other orders entered by the Court
in the Chapter 11 Cases.
7.28 Turnover of Collateral Proceeds. Subject to the rights of any
holder of a Senior Permitted Lien, each Borrower and Subsidiary shall promptly
(but no later than the next Business Day after its receipt thereof) turn over
(or cause to be turned over) to Administrative Agent all then available proceeds
received from any sale, other disposition or collection of any Collateral or
representing insurance or condemnation proceeds with respect to any Collateral,
such proceeds to be applied to the Obligations, subject to the provisions of
Section 3.6. After Full Payment of the Obligations, Administrative Agent shall
be authorized to return and apply any remaining proceeds for other purposes set
forth in Sections 3.6, 7.6(b) and 7.39.
7.29 Payment of Claims. No Borrower shall make any payment of
principal or interest on account of any Claim that arose before the Petition
Date, other than Claims that may be paid from proceeds of the Loans pursuant to
Section 1.2(b), subject to any required approval of the Court.
7.30 Filing of Motions and Applications. No Borrower shall apply to
the Court for authority to (i) take any action that is prohibited by the terms
of any of the DIP Financing Documents or the Financing Order, (ii) refrain from
taking any action that is required to be taken by the terms of any of the DIP
Financing Documents or the Financing Order or (iii) permit any Debt or Claim to
be pari passu with or senior to any of the Obligations, other than a Claim
covered by the Carve-Out to the extent provided in the Financing Order and a
Claim secured by a Senior Permitted Lien.
7.31 Modifications to Orders. No Borrower shall seek or consent to any
amendment, supplement or any other modification of any of the terms of the
Financing Order or the Pre-Petition Secured Party Protection Order without the
consent of Administrative Agent and the Majority Lenders.
7.32 Reclamation Claims. No Borrower shall (a) make any return of
property on account of Claims asserted by any vendors of such Borrower for
reclamation in accordance with Section 2-702 of the Uniform Commercial Code and
Section 546(c) of the Bankruptcy Code, unless otherwise ordered by the Court, or
(b) enter into any agreements or file any motion seeking an order from the Court
for the return of any property of such Borrower to any vendor pursuant to
Section 546(g) of the Bankruptcy Code if the aggregate value of all property of
Borrowers so returned exceeds $1,000,000.
7.33 Subsidiary Documents.
(a) Notwithstanding any other provision of this Agreement, if and to
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the extent that Administrative Agent and the Majority Lenders consent to
transfers by any Borrower of property (whether proceeds of Loans, of Collateral
or otherwise) to any domestic Subsidiary (other than a Borrower) of a Borrower
that would not otherwise be permitted pursuant to subclause (g) of Section 7.15,
or that is made pursuant to subclause (h) of Section 7.15, then, in each case,
as a condition thereto, Borrowers shall, upon the request of Administrative
Agent or any Lender, cause such Subsidiary to become a Subsidiary Guarantor and
to execute and deliver to Administrative Agent a Subsidiary Guaranty and
Subsidiary Security Agreement, in each event, not to exceed the aggregate amount
of such proceeds or other value (other than proceeds of transfers made by a
Borrower to a Subsidiary in accordance with the terms of subclause (g) of
Section 7.15 and remitted to employees in respect of payroll expenses and
payroll taxes) received by such Subsidiary.
(b) Promptly after Administrative Agent's request therefor, any
Borrower shall, and shall cause any of such Borrower's Subsidiaries to, grant to
or confer upon Administrative Agent such perpetual, non-exclusive, royalty-free
and irrevocable licenses or other authorizations with respect to such Borrower's
or such Subsidiary's trademarks, trade names, patents, copyrights, Registered
Proprietary Rights or other intellectual property to the extent necessary in
Administrative Agent's absolute discretion for Administrative Agent to advertise
for sale, sell, collect on, or otherwise dispose of any Collateral after the
occurrence of an Event of Default.
7.34 Reserved.
7.35 Commingling; Accounts Reporting. The Borrowers shall endeavor in
good faith not to commingle or permit the commingling of Collateral or proceeds
of Collateral with other property of or under the control of such Borrower or
any of its Subsidiaries that is not Collateral or proceeds of Collateral
(including proceeds of Accounts that were sold by Cone Xxxxx or Cone Receivables
prior to the Petition Date).
7.36 Royalty Payments. The Borrowers shall promptly pay, when due, all
Royalties in connection with License Agreements, except to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
7.37 Anti-Terrorism Laws. Neither any Borrower nor any Affiliate of
any Borrower or agent of any Borrower shall: (i) conduct any business or engage
in any transaction or dealing with any Blocked Person, including the making or
receiving any contribution of funds, goods or services to or for the benefit of
any Blocked Person; (ii) deal in, or otherwise engage in any transaction
relating to, any property or interests in property blocked pursuant to Executive
Order No. 13224; or (iii) engage in on conspire to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in Executive Order No. 13224 or the
USA Patriot Act. The Borrowers shall deliver to Administrative Agent and Lenders
any certification or other evidence requested from time to time by
Administrative Agent or any Lender, in Administrative Agent's sole discretion,
confirming Borrowers' compliance with this Section 7.37.
7.38 Minimum Availability. The Borrowing Base shall at all times
exceed by at least $5,000,000 the aggregate of (i) all Revolving Loans and
Letters of Credit outstanding at such time and (ii) all accrued and unpaid
47
interest, fees and expenses outstanding at such time and payable pursuant to any
of the DIP Financing Documents.
7.39 Net Fixed Asset Disposition Proceeds. The Borrowers promptly
shall remit or cause to be remitted to Administrative Agent all Net Fixed Asset
Disposition Proceeds, and Administrative Agent shall deposit such Net Fixed
Asset Disposition Proceeds in the Cash Collateral Account, subject to
Administrative Agent's Liens as security for the payment of the Obligations.
Notwithstanding anything to the contrary in this Agreement, at any time an Event
of Default exists, Administrative Agent may (and at the direction of the
Majority Lenders shall) apply all or any portion of the proceeds of the Cash
Collateral Account attributable to the Net Fixed Asset Disposition Proceeds to
all or any part of the Obligations.
ARTICLE 8
CONDITIONS OF LENDING
8.1 Conditions Precedent to Making of Loans on the Closing Date. The
obligation of the Lenders to make the initial Revolving Loans on the Closing
Date, and the obligation of Administrative Agent to cause the Letter of Credit
Issuer to issue any Letter of Credit on the Closing Date, are subject to the
following conditions precedent having been satisfied in a manner satisfactory to
Administrative Agent and each Initial Lender:
(a) All of the DIP Financing Documents (other than Mortgages and loss
payable endorsements to be delivered on a post-closing basis pursuant to Section
7.26(b) hereof and control agreements to be delivered on a post-closing basis
pursuant to Section 3(b) of the Security Agreement) shall have been executed in
form and substance satisfactory to Administrative Agent and the Lenders by each
party thereto and accepted by Administrative Agent and the Initial Lenders and
the Borrowers shall have performed and complied with all covenants, agreements
and conditions contained herein and the other DIP Financing Documents that are
required to be performed or complied with by the Borrowers before or on such
Closing Date.
(b) All representations and warranties made hereunder and in the other
DIP Financing Documents shall be true and correct as if made on such date.
(c) No Default or Event of Default shall have occurred and be
continuing after giving effect to the Loans to be made and the Letters of Credit
to be issued on the Closing Date.
(d) The Financing Order shall have been entered after proper notice
and a hearing based upon testimony and other evidence presented at the hearing
that is acceptable to Administrative Agent and the Initial Lenders in all
respects, shall have been consented to on the record at the hearing thereon by
the Pre-Petition Revolving Lenders, the Pre-Petition Revolving Credit Agent and
the Bond Trustee, shall have become a Final Order and shall be in full force and
effect.
(e) The Borrowers shall have received, and there shall be in full
force and effect on the Closing Date, an Asset Purchase Commitment from the
Proposed Purchaser for the purchase of all or substantially all of the assets of
the Borrowers for a purchase price payable in cash and in an amount acceptable
to Administrative Agent and the Initial Lenders in their sole discretion and
48
containing other terms and conditions satisfactory to Administrative Agent and
the Initial Lenders in their sole discretion.
(f) All of the "first day orders" presented to the Court at or about
the time of the commencement of the Chapter 11 Cases (including orders with
respect to maintenance of Borrowers' cash management system) shall be
satisfactory in form and substance to Administrative Agent and the Initial
Lenders.
(g) Administrative Agent and the Initial Lenders shall have received
such opinions of counsel for the Borrowers and Subsidiary Guarantors as
Administrative Agent or any Lender shall request, each such opinion to be in a
form, scope, and substance satisfactory to Administrative Agent, the Lenders,
and their respective counsel.
(h) Administrative Agent shall have confirmed that Administrative
Agent's Liens are valid, duly perfected, first priority Liens, and that the
Collateral is not subject to any Liens other than Permitted Liens.
(i) The Borrowers shall have paid (or made adequate provision for the
payment on the Closing Date of) all fees and expenses of Agents and the Attorney
Costs incurred in connection with any of the DIP Financing Documents and the
transactions contemplated thereby to the extent such fees, expenses and Attorney
Costs have been invoiced as of the Closing Date.
(j) Administrative Agent shall have received evidence, in form, scope,
and substance, reasonably satisfactory to Administrative Agent, of all insurance
coverage as required by this Agreement.
(k) Administrative Agent and the Initial Lenders shall have had an
opportunity, if they so choose, to examine the books of account and other
records and files of the Borrowers and to make copies thereof, and to conduct a
pre-closing audit which shall include, without limitation, verification of
Inventory, Accounts, and the Borrowing Base, and the results of such examination
and audit shall have been satisfactory to Administrative Agent and the Lenders
in all respects.
(l) All proceedings taken in connection with the execution of this
Agreement and each other DIP Financing Document and all documents and papers
relating hereto or thereto shall be satisfactory in form, scope, and substance
to Administrative Agent and the Lenders.
(m) Administrative Agent and the Initial Lenders shall have reviewed
and found acceptable the Budget.
(n) The Court shall have entered an order for the joint administration
of the Chapter 11 Cases.
(o) No order shall have been entered by the Court (i) for the
appointment of a trustee or examiner with enlarged powers substantially similar
to those of a trustee, or (ii) converting any of the Chapter 11 Cases to a
Chapter 7 case or dismissing any of the Chapter 11 Cases or (iii) terminating
prior to any expiration date the Borrowers' exclusive time period to file a plan
49
of reorganization or liquidation and, with respect to clauses (i) through (iii)
above, no such order shall have been requested by the Borrowers.
(p) Cone Xxxxx shall have entered into the Receivables Purchase
Termination Agreement, and Administrative Agent shall have received from GE
Capital and Cone Receivables such assurances as Administrative Agent deems
satisfactory that, contemporaneously with the funding of the initial Revolving
Loans (after giving effect to any portion of the initial Revolving Loans to be
remitted to GE Capital or Cone Receivables), all of the conditions precedent
contained in Section 6 of the Receivables Purchase Termination Agreement will be
satisfied.
(q) Without limiting the generality of the items described above, the
Borrowers and each Person guarantying or securing payment of the Obligations
shall have delivered or caused to be delivered to Administrative Agent (in form
and substance reasonably satisfactory to Administrative Agent), the financial
statements, instruments, resolutions, documents, agreements, certificates,
opinions and other items set forth on the "Closing Checklist" delivered by
Administrative Agent to the Borrowers prior to the Closing Date.
The acceptance by the Borrowers of any Loans made or Letters of Credit
issued on the Closing Date shall be deemed to be a representation and warranty
made by the Borrowers to the effect that all of the conditions precedent to the
making of such Loans or the issuance of such Letters of Credit have been
satisfied (unless and to the extent waived by Administrative Agent in writing
with the consent or at the direction of the Majority Lenders), with the same
effect as delivery to Administrative Agent and the Lenders of a certificate
signed by a Responsible Officer of the Borrowers, dated the Closing Date, to
such effect.
Execution and delivery to Administrative Agent by a Lender of a
counterpart of this Agreement shall be deemed confirmation by such Lender that
(i) all conditions precedent in this Section 8.1 have been fulfilled to the
satisfaction of such Lender, (ii) the decision of such Lender to execute and
deliver to Administrative Agent an executed counterpart of this Agreement was
made by such Lender independently and without reliance on Administrative Agent
or any other Lender as to the satisfaction of any condition precedent set forth
in this Section 8.1, and (iii) all documents sent to such Lender for approval
consent, or satisfaction were acceptable to such Lender.
8.2 Reserved.
8.3 Conditions Precedent to Each Loan. The obligation of the Lenders
to make each Loan, including the initial Revolving Loans on the Closing Date,
and the obligation of Administrative Agent to cause the Letter of Credit Issuer
to issue any Letter of Credit, shall be subject to the further conditions
precedent that on and as of the date of any such extension of credit:
(a) The Asset Purchase Commitment shall not have been rescinded,
revoked or terminated, but shall be in full force and effect, unless the
Borrowers shall have received another binding offer to purchase all or
substantially all of their assets on terms that are no less favorable than those
50
contained in the Asset Purchase Commitment and that are otherwise satisfactory
to Administrative Agent and Lenders in their sole discretion.
(b) The following statements shall be true, and the acceptance by the
Borrowers of any extension of credit shall be deemed to be a statement to the
effect set forth in clauses (i), (ii) and (iii) with the same effect as the
delivery to Administrative Agent and the Lenders of a certificate signed by a
Responsible Officer, dated the date of such extension of credit, stating that:
(i) The representations and warranties contained in this
Agreement and the other DIP Financing Documents are correct in all
material respects on and as of the date of such extension of credit as
though made on and as of such date, other than any such representation
or warranty which relates to a specified prior date and except to the
extent Administrative Agent and the Lenders have been notified in
writing by the Borrowers that any representation or warranty is not
correct and the Majority Lenders have explicitly waived in writing
compliance with such representation or warranty; and
(ii) No event has occurred and is continuing, or would
result from such extension of credit, which constitutes a Default or
an Event of Default; and
(iii) No event has occurred and is continuing, or would
result from such extension of credit, which has had a Material Adverse
Effect.
(c) No such Borrowing shall exceed Availability, provided, however,
that the foregoing conditions precedent are not conditions to each Lender
participating in or reimbursing Bank of America or Administrative Agent for such
Lender's Pro Rata Share of any Non-Ratable Loan or Agent Advance made in
accordance with the provisions of Section 1.2(i) and (j) and Section 12.15(a)
and (c).
(d) The terms of the Pre-Petition Secured Party Protection Order shall
not have been altered, modified or amended in any manner that is not
satisfactory to Administrative Agent in its sole and absolute discretion, nor
shall the Borrowers have filed any such motions or taken any other such action
to alter, modify or amend the terms of the Pre-Petition Secured Party Protection
Order in a manner that is not satisfactory to Administrative Agent in its sole
and absolute discretion.
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8.4 Limited Waiver of Conditions Precedent. If Lenders shall make any
Loans, procure any Letter of Credit or otherwise extend any credit to the
Borrowers under this Agreement at a time when any of the foregoing conditions
precedent is not satisfied (regardless of whether the failure of satisfaction of
any such conditions precedent was known or unknown to Administrative Agent or
any Lender), the funding of such Loan or procurement of such Letter of Credit
shall not operate as a waiver of the right of Administrative Agent and Lenders
to insist upon the satisfaction of all conditions precedent with respect to each
subsequent Borrowing requested by the Borrowers or a waiver of any Default or
Event of Default as a consequence of the failure of any such conditions to be
satisfied, unless Majority Lenders in writing waive the satisfaction of any
condition precedent, in which event such waiver shall only be applicable for the
specific instance given and only to the extent and for the period of time
expressly stated in such written waiver.
ARTICLE 9
DEFAULT; REMEDIES
9.1 Events of Default. It shall constitute an event of default ("Event of
Default") if any one or more of the following shall occur for any reason:
(a) any failure by the Borrowers to pay the principal of or interest
or premium on any of the Obligations or any fee or other amount owing hereunder
when due, whether upon demand or otherwise;
(b) any representation or warranty made or deemed made by any Borrower
in this Agreement or by any Borrower or any of its Subsidiaries in any of the
other DIP Financing Documents, any Financial Statement, or any certificate
furnished by a Borrower or any of its Subsidiaries at any time to Administrative
Agent or any Lender shall prove to be untrue in any material respect as of the
date on which made, deemed made, or furnished;
(c) (i) any default shall occur in the observance or performance of
any of the covenants and agreements contained in Sections 5.2(n), 7.2, 7.5, 7.6,
7.9 through 7.35 or Sections 7.38 and 7.39 of this Agreement or Section 11 of
the Security Agreement; (ii) any default shall occur in the observance or
performance of any of the covenants and agreements contained in Sections 5.2
(other than 5.2(n)) or 5.3 and such default shall continue for five (5) Business
Days or more; or (iii) any default shall occur in the observance or performance
of any of the other covenants or agreements contained in any other Section of
this Agreement or any other DIP Financing Document or any other agreement
entered into at any time to which a Borrower or any Subsidiary and
Administrative Agent or any Lender are party (including in respect of any Bank
Products) and such default shall continue for fifteen (15) days or more;
(d) any default shall occur with respect to any Debt (other than the
Obligations) of any Borrower or any of its Subsidiaries incurred after the
Petition Date in an outstanding principal amount which exceeds $500,000, or
under any agreement or instrument under or pursuant to which any such Debt may
have been issued, created, assumed, or guaranteed by such Borrower or any of its
Subsidiaries, and such default shall continue for more than the period of grace,
52
if any, therein specified, if the effect thereof (with or without the giving of
notice or further lapse of time or both) is to accelerate, or to permit the
holders of any such Debt to accelerate, the maturity of any such Debt; or any
such Debt shall be declared due and payable or be required to be prepaid (other
than by a regularly scheduled required prepayment) prior to the stated maturity
thereof;
(e) The Borrowers shall fail to comply with any of the provisions of
the Financing Order; a trustee shall be appointed in any of the Chapter 11
Cases; an examiner shall be appointed in any of the Chapter 11 Cases with
enlarged powers (powers beyond those set forth in Section 1106(a)(3) and (4) of
the Bankruptcy Code) under Section 1106(b) of the Bankruptcy Code; any of the
Chapter 11 Cases shall be dismissed or converted to a case under Chapter 7 or a
motion for any such dismissal or conversion shall be filed by any Borrower; any
Borrower or any Affiliate shall obtain Court approval of a disclosure statement
for a Chapter 11 Plan other than an Acceptable Plan or a Confirmation Order
shall be entered with respect to a Chapter 11 Plan (regardless of the proponent
of such Chapter 11 Plan) if such Chapter 11 Plan is not an Acceptable Plan;
there shall be filed by a Borrower any motion to sell all or a substantial part
of the Collateral on terms that are not acceptable to Administrative Agent and
Majority Lenders in their sole discretion; any Borrower shall, without Majority
Lenders' consent, file any motion to alter, amend, vacate, supplement, modify or
reconsider the Financing Order in any respect or, without Majority Lenders'
prior written consent, the Financing Order is amended, vacated, supplemented,
modified or stayed or reversed on appeal; the Court shall enter an order
granting to any Person other than Administrative Agent or any Lender relief from
the automatic stay to foreclose upon a Lien with respect to any Accounts or
Inventory or with respect to any other Collateral of a Borrower having an
aggregate book value in excess of $1,000,000; an order shall be entered for the
substantive consolidation of the Estate of a Borrower with any other Person that
is not a Borrower; Borrowers shall not have sufficient Availability on any date
to pay, or shall otherwise fail to pay as and when due and payable (unless
Properly Contested), all costs and expenses of administration that are incurred
by it in the Chapter 11 Cases that are due and payable on such date; any
Borrower shall file a motion or other request with the Court seeking authority
to use any cash proceeds of the Collateral or to obtain any financing under
Section 364(d) of the Bankruptcy Code secured by a priming Lien, or Lien of
equal priority with Administrative Agent's Liens, upon any Collateral, in each
case without Administrative Agent's and the Majority Lenders' prior written
consent or except as otherwise provided in the Financing Order; an application
shall be filed by any Borrower for the approval of any superpriority claim in
the Chapter 11 Case that is pari passu with or senior to the Obligations or
there shall arise or be granted any such pari passu or superpriority claim
(excluding Professional Expenses to the extent covered by the Carve-Out);
without Administrative Agent's and the Majority Lenders' consent, any Borrower
shall discontinue or suspend all or any material part of its business
operations; the Asset Purchase Commitment shall have been rescinded, revoked or
terminated by the Proposed Purchaser, unless the Borrowers have received another
binding offer to purchase all or substantially all of their assets on terms that
are no less favorable to the Borrowers than those contained in the Asset
Purchase Commitment and that are otherwise satisfactory to Administrative Agent
and Lenders in their sole discretion; a Termination Event under (and as defined
53
in) the Pre-Petition Secured Party Protection Order as in effect on the date
hereof shall have occurred or exist, as a result of which (i) any Pre-Petition
Secured Party shall have delivered notice of the withdrawal of its consent to
any Borrower's continued use of cash collateral on the terms set forth in the
Pre-Petition Secured Party Protection Order as in effect on the date hereof and
(ii) the Court fails or refuses to enter an order authorizing the Borrowers to
continue using cash collateral on terms satisfactory to Administrative Agent and
Lenders in their sole discretion prior to the occurrence of the Termination Date
under (and as defined in) the Pre-Petition Secured Party Protection Order as in
effect on the date hereof; or the Pre-Petition Secured Party Protection Order,
including provisions relating to the amount, timing and conditions to payment of
any Adequate Protection Claim or the sharing of proceeds from dispositions of
Fixed Assets, is modified, amended or supplemented in any material respect
without Majority Lenders' consent, or the Borrowers are in default of their
obligations under the Pre-Petition Secured Party Protection Order and, as a
consequence thereof, the ability of any Borrower to perform its obligations
under this Agreement is materially and adversely affected, or any of the
Pre-Petition Secured Parties deliver any notices, petition the Court for any
relief or take any other action that is deemed by the Majority Lenders, in their
sole discretion, to materially and adversely impair any Borrower's ability to
perform its obligations under this Agreement.
(f) a Borrower or any material Subsidiary shall file a certificate of
dissolution under applicable state law or shall be liquidated, dissolved or
wound-up or shall commence or have commenced against it any action or proceeding
for dissolution, winding-up or liquidation, or shall take any corporate action
in furtherance thereof;
(g) all or any material part of the property of a Borrower or any of
its Subsidiaries shall be nationalized, expropriated or condemned, seized or
otherwise appropriated, or custody or control of such property or of such
Borrower or such Subsidiary shall be assumed by any Governmental Authority or
any court of competent jurisdiction at the instance of any Governmental
Authority, except where contested in good faith by proper proceedings diligently
pursued where a stay of enforcement is in effect;
(h) any DIP Financing Document shall be terminated (other than in
accordance with its terms), revoked or declared void or invalid or unenforceable
or challenged by any Borrower or any other Obligor;
(i) one or more judgments, orders, decrees or arbitration awards is
entered against a Borrower involving in the aggregate liability (to the extent
not covered by independent third-party insurance as to which the insurer does
not dispute coverage) as to any single or related or unrelated series of
transactions, incidents or conditions, of $1,000,000 or more, and the same shall
remain unsatisfied, unvacated and unstayed pending appeal for a period of sixty
(60) days after the entry thereof;
(j) any loss, theft, damage or destruction of any item or items of
Collateral or other property of a Borrower or any Subsidiary occurs which could
reasonably be expected to cause a Material Adverse Effect and is not adequately
covered by insurance;
54
(k) there is filed against a Borrower or any of its Subsidiaries any
action, suit or proceeding under any federal or state racketeering statute
(including the Racketeer Influenced and Corrupt Organization Act of 1970), which
action, suit or proceeding (i) is not dismissed within one hundred twenty (120)
days, and (ii) could reasonably be expected to result in the confiscation or
forfeiture of any material portion of the Collateral;
(l) for any reason, any DIP Financing Document ceases to be in full
force and effect (other than in accordance with its terms) or any Lien with
respect to any material portion of the Collateral intended to be secured thereby
ceases to be, or is not, valid, perfected and prior to all other Liens (other
than Senior Permitted Liens) or is terminated, revoked or declared void;
(m) an ERISA Event shall occur with respect to a Pension Plan or
Multi-Employer Plan that results in the imposition of a Lien on any Collateral
or materially impairs the ability of Borrowers to discharge any of their
covenants or duties under any of the DIP Financing Documents or to repay any of
the Obligations.
(n) there occurs a Change of Control; or
(o) one or more License Agreements are terminated by a Borrower or any
other party to such License Agreement before the anticipated expiration of such
License Agreement and other than in the Ordinary Course of Business and (i) such
termination could reasonably be expected to have a Material Adverse Effect, or
(ii) as a consequence of such termination, neither the Borrowers nor
Administrative Agent shall be entitled under the License Agreement or otherwise
lawfully to sell or otherwise dispose of the Inventory subject to such License
Agreement, and such loss could reasonably be expected to have a Material Adverse
Effect.
9.2 Remedies.
(a) If a Default or an Event of Default exists, but subject at all
times to any limitations in the Financing Order, Administrative Agent may, in
its discretion, and shall, at the direction of the Majority Lenders, do one or
more of the following at any time or times and in any order: (i) reduce the
Maximum Revolver Amount, or the advance rates against Eligible Accounts and/or
Eligible Inventory used in computing the Borrowing Base, or reduce one or more
of the other elements used in computing the Borrowing Base; (ii) restrict the
amount of or refuse to make Revolving Loans; and (iii) restrict or refuse to
provide Letters of Credit or Credit Support. If an Event of Default exists, but
subject at all times to any limitations in the Financing Order, Administrative
Agent may (and shall at the direction of the Majority Lenders) do one or more of
the following, in addition to the actions described in the preceding sentence,
at any time or times and in any order: (A) terminate the DIP Facility and the
Commitments and this Agreement; (B) declare any or all Obligations to be
immediately due and payable; (C) require the Borrowers to cash collateralize the
aggregate undrawn face amount of all outstanding Letters of Credit; and (D)
pursue its other rights and remedies under the DIP Financing Documents, the
Financing Order and applicable law.
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(b) If an Event of Default has occurred and is continuing, but subject
at all times to any limitations in the Financing Order: (i) Administrative Agent
shall have for the benefit of the Lenders, in addition to all other rights of
Administrative Agent and the Lenders, the rights and remedies of a secured party
under the DIP Financing Documents and the UCC; (ii) Administrative Agent may, at
any time, take possession of the Collateral and keep it on the Borrowers'
premises, at no cost to Administrative Agent or any Lender, or remove any part
of it to such other place or places as Administrative Agent may desire, or the
Borrowers shall, upon Administrative Agent's demand, at the Borrowers' cost,
assemble the Collateral and make it available to Administrative Agent at a place
reasonably convenient to Administrative Agent; and (iii) Administrative Agent
may sell and deliver any Collateral at public or private sales, for cash, upon
credit or otherwise, at such prices and upon such terms as Administrative Agent
deems advisable, in its sole discretion, and may, if Administrative Agent deems
it reasonable, postpone or adjourn any sale of the Collateral by an announcement
at the time and place of sale or of such postponed or adjourned sale without
giving a new notice of sale. Without in any way requiring notice to be given in
the following manner, the Borrowers agree that any notice by Administrative
Agent of sale, disposition or other intended action hereunder or in connection
herewith, whether required by the UCC or otherwise, shall constitute reasonable
notice to the Borrowers if such notice is mailed by registered or certified
mail, return receipt requested, postage prepaid, or is delivered personally
against receipt, at least five (5) Business Days prior to such action to the
Borrowers' address specified in or pursuant to Section 13.8. If any Collateral
is sold on terms other than payment in full at the time of sale, no credit shall
be given against the Obligations until Administrative Agent or the Lenders
receive payment, and if the buyer defaults in payment, Administrative Agent may
resell the Collateral without further notice to any Borrower. In the event
Administrative Agent seeks to take possession of all or any portion of the
Collateral by judicial process, the Borrowers irrevocably waive: (A) the posting
of any bond, surety or security with respect thereto which might otherwise be
required; (B) any demand for possession prior to the commencement of any suit or
action to recover the Collateral; and (C) any requirement that Administrative
Agent retain possession and not dispose of any Collateral until after trial or
final judgment. The Borrowers agree that Administrative Agent has no obligation
to preserve rights to the Collateral or marshal any Collateral for the benefit
of any Person. Administrative Agent is hereby granted a license or other right
to use, without charge, the Borrowers' labels, patents, copyrights, name, trade
secrets, trade names, trademarks, and advertising matter, or any similar
property, in completing production of, advertising or selling any Collateral,
and the Borrowers' rights under all licenses and all franchise agreements shall
inure to Administrative Agent's benefit for such purpose. The proceeds of any
sale shall be applied first to all expenses of sale, including attorneys' fees,
and then to the Obligations. Administrative Agent will return any excess to the
Borrowers and the Borrowers shall remain liable for any deficiency.
(c) If an Event of Default occurs, the Borrowers hereby waive all
rights to notice and hearing prior to the exercise by Administrative Agent of
Administrative Agent's rights to repossess the Collateral without judicial
process or to reply, attach or levy upon the Collateral without notice or
hearing, subject at all times to any limitations or notice provisions contained
in the Financing Order and applicable law.
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ARTICLE 10
TERM AND TERMINATION
10.1 Term and Termination. The term of this Agreement shall end on the
last day of the DIP Term unless sooner terminated in accordance with the terms
hereof. Administrative Agent may (and, upon direction from the Majority Lenders,
shall) terminate this Agreement (and the DIP Facility and the Commitments
thereunder) without notice upon the occurrence of an Event of Default, subject
to any limitations or notice requirements in the Financing Order. Upon the
effective date of termination of this Agreement (and the DIP Facility and the
Commitments thereunder) for any reason whatsoever, all Obligations (including
all unpaid principal, accrued and unpaid interest and any early termination or
prepayment fees or penalties) shall become immediately due and payable and the
Borrowers shall immediately arrange for the cancellation and return of Letters
of Credit then outstanding (or the cash collateralization thereof in accordance
with the terms hereof). Notwithstanding the termination of this Agreement (and
the DIP Facility and the Commitments thereunder), until Full Payment of the
Obligations, (i) the Borrowers shall remain bound by the terms of this Agreement
and shall not be relieved of any their Obligations hereunder or under any other
DIP Financing Documents, (ii) Administrative Agent and the Lenders shall retain
all of their rights and remedies hereunder (including Administrative Agent's
Liens in and all rights and remedies with respect to all then existing and
after-arising Collateral), (iii) all indemnities provided for herein or in any
of the other DIP Financing Documents shall survive payment of all other
Obligations and the Commitment Termination Date, and (iv) Lenders shall, if
requested to do so by Administrative Agent, make Revolving Loans to the extent
deemed necessary or appropriate to satisfy the Carve-Out.
ARTICLE 11
AMENDMENTS; WAIVERs; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
11.1 Amendments and Waivers.
(a) No amendment or waiver of any provision of this Agreement or any
other DIP Financing Document, and no consent with respect to any departure by a
Borrower therefrom, shall be effective unless the same shall be in writing and
signed by the Majority Lenders (or by Administrative Agent at the written
request of the Majority Lenders) and the Borrowers, and then any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such waiver, amendment, or
consent shall, unless in writing and signed by all the Lenders and the Borrowers
and acknowledged by Administrative Agent, do any of the following:
(i) increase or extend the Commitment of any Lender;
(ii) postpone or delay any date fixed by this Agreement or
any other DIP Financing Document for any payment of principal,
interest, fees or other amounts due to the Lenders (or any of them)
hereunder or under any other DIP Financing Document;
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(iii) reduce the principal of, or the rate of interest
specified herein on any Loan, or any fees or other amounts payable
hereunder or under any other DIP Financing Document;
(iv) increase any of the percentages set forth in the
definitions of Accounts Formula Amount or Inventory Formula Amount;
(v) amend this Section or any provision of this Agreement
providing for consent or other action by all Lenders;
(vi) release all or a substantial part of the Collateral
other than as permitted by Section 12.11 or any of the Security
Documents;
(vii) change the definition of "Majority Lenders";
(viii) increase the Maximum Revolver Amount or the Letter of
Credit Subfacility; or
(ix) amend Section 1.2(j) (other than to increase the dollar
amounts shown therein, which may be amended by vote of the Majority
Lenders).
provided, however, that Administrative Agent may, in its sole discretion and
notwithstanding the limitations contained in clauses (v) and (viii) above and
any other terms of this Agreement, make Agent Advances in accordance with
Section 1.2(j) and, provided further, that no amendment, waiver or consent
shall, unless in writing and signed by Administrative Agent, affect the rights,
duties, powers or discretion of Administrative Agent under this Agreement or any
other DIP Financing Document or any indemnities in favor of Administrative Agent
and provided further, that Schedule 1.1 hereto (Commitments) may be amended from
time to time by Administrative Agent alone to reflect assignments of Commitments
in accordance herewith. Notwithstanding anything herein which may be construed
to the contrary, no Availability Reserve shall be released or reduced without
the prior written consent of the Majority Lenders, except for components of the
Availability Reserve that are imposed at the discretion of Administrative Agent.
(b) If any fees are paid to the Lenders as consideration for
amendments, waivers or consents with respect to this Agreement, at
Administrative Agent's election, such fees may be paid only to those Lenders
that agree to such amendments, waivers or consents within the time specified for
submission thereof.
(c) If, in connection with any proposed amendment, waiver or consent
(a "Proposed Change") requiring the consent of all Lenders, the consent of
Majority Lenders is obtained, but the consent of other Lenders is not obtained
(any such Lender whose consent is not obtained as described in this clause being
referred to as a "Non-Consenting Lender"), then, so long as Administrative Agent
is not a Non-Consenting Lender, at the Borrowers' request, Administrative Agent
or an Eligible Assignee shall have the right (but not the obligation) with
Administrative Agent's approval, to purchase from the Non-Consenting Lenders,
and the Non-Consenting Lenders agree that they shall sell, all the
Non-Consenting Lenders' Commitments for an amount equal to the principal
balances thereof and all accrued interest and fees with respect thereto through
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the date of sale pursuant to Assignment and Acceptance Agreement(s), without
premium or discount.
11.2 Assignments; Participations.
(a) Any Lender may, with the written consent of Administrative Agent
(which consent shall not be unreasonably withheld), assign and delegate to one
or more Eligible Assignees (provided that no consent of Administrative Agent
shall be required in connection with any assignment and delegation by a Lender
to an Affiliate of such Lender) (each an "Assignee") all, or any ratable part of
all, of the Loans, the Commitments and the other rights and obligations of such
Lender hereunder, in a minimum amount of $2,500,000 (provided that, unless an
assignor Lender has assigned and delegated all of its Loans and Commitments, no
such assignment and/or delegation shall be permitted unless, after giving effect
thereto, such assignor Lender retains a Commitment in a minimum amount of
$2,500,000; provided, however, that the Borrowers and Administrative Agent may
continue to deal solely and directly with such Lender in connection with the
interest so assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses and related information with
respect to the Assignee, shall have been given to the Borrowers and
Administrative Agent by such Lender and the Assignee; (ii) such Lender and its
Assignee shall have delivered to the Borrowers and Administrative Agent an
Assignment and Acceptance in the form of Exhibit D ("Assignment and
Acceptance"); and (iii) the assignor Lender or Assignee has paid to
Administrative Agent a processing fee in the amount of $2,000.
(b) From and after the date that Administrative Agent notifies the
assignor Lender that it has received an executed Assignment and Acceptance and
payment of the above-referenced processing fee, (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations,
including, but not limited to, the obligation to participate in Letters of
Credit and Credit Support have been assigned to it pursuant to such Assignment
and Acceptance, shall have the rights and obligations of a Lender under the DIP
Financing Documents, and (ii) the assignor Lender shall, to the extent that
rights and obligations hereunder and under the other DIP Financing Documents
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement (and in the
case of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other DIP Financing Document
furnished pursuant hereto or the attachment, perfection, or priority of any Lien
granted by the Borrowers to Administrative Agent or any Lender in the
Collateral; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrowers or the performance or observance by the Borrowers of any of their
obligations under this Agreement or any other DIP Financing Document furnished
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pursuant hereto; (iii) such Assignee confirms that it has received a copy of
this Agreement, together with such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such Assignee will, independently and
without reliance upon Administrative Agent, such assigning Lender or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such Assignee appoints and authorizes
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to Administrative Agent by the
terms hereof, together with such powers, including the discretionary rights and
incidental power, as are reasonably incidental thereto; and (vi) such Assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(d) Immediately upon satisfaction of the requirements of Section
11.2(a), this Agreement shall be deemed to be amended to the extent, but only to
the extent, necessary to reflect the addition of the Assignee and the resulting
adjustment of the Commitments arising therefrom. The Commitment allocated to
each Assignee shall reduce such Commitments of the assigning Lender pro tanto.
(e) Any Lender may at any time sell to one or more commercial banks,
financial institutions, or other Persons not Affiliates of the Borrowers (a
"Participant") participating interests in any Loans, the Commitment of that
Lender and the other interests of that Lender (the "originating Lender")
hereunder and under the other DIP Financing Documents; provided, however, that
(i) the originating Lender's obligations under this Agreement shall remain
unchanged, (ii) the originating Lender shall remain solely responsible for the
performance of such obligations, (iii) the Borrowers and Administrative Agent
shall continue to deal solely and directly with the originating Lender in
connection with the originating Lender's rights and obligations under this
Agreement and the other DIP Financing Documents, and (iv) no Lender shall
transfer or grant any participating interest under which the Participant has
rights to approve any amendment to, or any consent or waiver with respect to,
this Agreement or any other DIP Financing Document except the matters set forth
in Sections 11.1(a) (i), (ii) and (iii), and all amounts payable by the
Borrowers hereunder shall be determined as if such Lender had not sold such
participation; except that, if amounts outstanding under this Agreement are due
and unpaid, or shall have become due and payable upon the occurrence of an Event
of Default, each Participant shall be deemed to have the right of set-off in
respect of its participating interest in amounts owing under this Agreement to
the same extent and subject to the same limitation as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement.
(f) Notwithstanding any other provision in this Agreement, (i) any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the FRB or U.S. Treasury
Regulation 31 CFR ss.203.14, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law; and
(ii) Bank of America shall, at all times, hold a Commitment that is at least 50%
of the aggregate of all Commitments, except when an Event of Default exists (in
which event, Bank of America may, during the existence of any such Event of
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Default, effect assignments as provided in this Section 11.2 that would have the
effect of reducing its Commitment to less than 50% of the aggregate
Commitments).
ARTICLE 12
THE AGENT
12.1 Appointment and Authorization. Each Lender hereby designates and
appoints Bank of America as Administrative Agent under this Agreement and the
other DIP Financing Documents and each Lender hereby irrevocably authorizes
Administrative Agent to take such action on its behalf under the provisions of
this Agreement, each other DIP Financing Document and the Financing Order and to
exercise such powers and perform such duties as are expressly delegated to it by
the terms of this Agreement, any other DIP Financing Document and the Financing
Order, together with such powers as are reasonably incidental thereto.
Administrative Agent agrees to act as such on the express conditions contained
in this Article 12. The provisions of this Article 12 are solely for the benefit
of Administrative Agent and the Lenders and the Borrowers shall have no rights
as a third party beneficiary of any of the provisions contained herein.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other DIP Financing Document, Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
nor shall Administrative Agent have or be deemed to have any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other DIP Financing Document or otherwise exist against
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" in this Agreement with reference to Administrative
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead, such
term is used merely as a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent contracting
parties. Except as expressly otherwise provided in this Agreement,
Administrative Agent shall have and may use its sole discretion with respect to
exercising or refraining from exercising any discretionary rights or taking or
refraining from taking any actions which Administrative Agent is expressly
entitled to take or assert under this Agreement and the other DIP Financing
Documents, including (a) the determination of the applicability of ineligibility
criteria with respect to the calculation of the Borrowing Base, (b) the making
of Agent Advances pursuant to Section 1.2(i), and (c) the exercise of remedies
pursuant to Section 9.2, and any action so taken or not taken shall be deemed
consented to by the Lenders.
12.2 Delegation of Duties. Administrative Agent may execute any of its
duties under this Agreement or any other DIP Financing Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. Administrative Agent
shall not be responsible for the negligence or misconduct of Administrative
Agent or attorney-in-fact that it selects as long as such selection was made
without gross negligence or willful misconduct.
12.3 Liability of Administrative Agent. None of Administrative Agent-
Related Persons shall (i) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other DIP
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Financing Document or the transactions contemplated hereby (except for its own
gross negligence or willful misconduct), or (ii) be responsible in any manner to
any of the Lenders for any recital, statement, representation or warranty made
by the Borrowers or any Subsidiary or Affiliate of the Borrowers, or any officer
thereof, contained in this Agreement or in any other DIP Financing Document, or
in any certificate, report, statement or other document referred to or provided
for in, or received by Administrative Agent under or in connection with, this
Agreement or any other DIP Financing Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other DIP
Financing Document, or for any failure of the Borrowers or any other party to
any DIP Financing Document to perform its obligations hereunder or thereunder.
No Administrative Agent-Related Person shall be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other DIP
Financing Document, or to inspect the properties, books or records of the
Borrowers or any of the Borrowers' Subsidiaries or Affiliates.
12.4 Reliance by Administrative Agent. Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to the Borrower), independent accountants and
other experts selected by Administrative Agent. Administrative Agent shall be
fully justified in failing or refusing to take any action under this Agreement
or any other DIP Financing Document unless it shall first receive such advice or
concurrence of the Majority Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other DIP Financing Document in accordance with a request or
consent of the Majority Lenders (or all Lenders if so required by Section 11.1)
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all of the Lenders.
12.5 Notice of Default; Action Upon Default. Administrative Agent shall
not be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default, unless Administrative Agent shall have received written notice
from a Lender or a Borrower referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a "notice of default."
Administrative Agent promptly will notify the Lenders of its receipt of any such
notice. Administrative Agent shall take such action with respect to such Default
or Event of Default as may be requested by the Majority Lenders in accordance
with Section 9; provided, however, that unless and until Administrative Agent
has received any such request, Administrative Agent may take such action or
refrain from taking such action with respect to such Default or Event of Default
as Administrative Agent shall deem advisable. Notwithstanding anything to the
contrary contained in this Section 12.5, Administrative Agent shall, promptly
after its receipt of any such "notice of default" and prior to the exercise of
any default remedies (including termination of the Commitments and foreclosure
of Liens upon the Collateral), confer with the Lenders for the purpose of
obtaining the direction of the Majority Lenders in respect of action to be taken
on account of any Event of Default; provided, however, that, (i) nothing herein
shall prohibit Administrative Agent from taking such actions as it deems
appropriate (other than enforcement of Administrative Agent's Liens with respect
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to the Collateral) prior to conferring with the Lenders if necessary or
appropriate to protect, preserve or safeguard the Collateral or the value
thereof; and (ii) if after conferring with the Lenders the Administrative Agent
does not receive the direction of the Majority Lenders, then Administrative
Agent may exercise (or decline to exercise) such rights and remedies under the
DIP Financing Documents and applicable law as Administrative Agent deems
appropriate, in its sole discretion, to collect the Obligations and/or to
realize upon the Collateral.
12.6 Credit Decision. Each Lender acknowledges that none of
Administrative Agent-Related Persons has made any representation or warranty to
it, and that no act by Administrative Agent hereinafter taken, including any
review of the affairs of the Borrowers and their Affiliates, shall be deemed to
constitute any representation or warranty by Administrative Agent-Related Person
to any Lender. Each Lender represents to Administrative Agent that it has,
independently and without reliance upon Administrative Agent-Related Person and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrowers
and their Affiliates, and all applicable bankruptcy and bank regulatory laws
relating to the transactions contemplated hereby, and made its own decision to
enter into this Agreement and to extend credit to the Borrowers. Each Lender
also represents that it will, independently and without reliance upon
Administrative Agent-Related Person and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other DIP Financing Documents, and to make such investigations
as it deems necessary to inform itself as to the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Borrowers. Except for notices, reports and other documents expressly herein
required to be furnished to the Lenders by Administrative Agent, Administrative
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of any Borrower
which may come into the possession of any of Administrative Agent-Related
Persons.
12.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand Administrative
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrowers and without limiting the obligation of the Borrowers to do so), in
accordance with their Pro Rata Shares, from and against any and all Indemnified
Liabilities as such term is defined in Section 13.11; provided, however, that no
Lender shall be liable for the payment to Administrative Agent-Related Persons
of any portion of such Indemnified Liabilities resulting solely from such
Person's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender shall reimburse Administrative Agent upon demand for its
Pro Rata Share of any costs or out-of-pocket expenses (including Attorney Costs)
incurred by Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other DIP
Financing Document, or any document contemplated by or referred to herein, to
the extent that Administrative Agent is not reimbursed for such expenses by or
on behalf of the Borrower. The undertaking in this Section shall survive the
Commitment Termination Date, the payment of all Obligations hereunder and the
resignation or replacement of Administrative Agent.
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12.8 Administrative Agent in Individual Capacity. Bank of America and
its Affiliates may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in and generally engage in any
kind of banking, trust, financial advisory, underwriting or other business with
the Borrowers and their Subsidiaries and Affiliates as though Bank of America
were not Administrative Agent hereunder and without notice to or consent of the
Lenders. Bank of America or its Affiliates may receive information regarding the
Borrowers, their Affiliates and Account Debtors (including information that may
be subject to confidentiality obligations in favor of the Borrowers or such
Subsidiary) and acknowledge that Administrative Agent and Bank of America shall
be under no obligation to provide such information to them. With respect to its
Loans, Bank of America shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
Administrative Agent, and the terms "Lender" and "Lenders" include Bank of
America in its individual capacity.
12.9 Successor Administrative Agent. Administrative Agent may resign
as Administrative Agent upon at least thirty (30) days prior notice to the
Lenders and the Borrowers, such resignation to be effective upon the acceptance
of a successor agent to its appointment as Administrative Agent. In the event
Bank of America sells all of its Commitment and Revolving Loans as part of a
sale, transfer or other disposition by Bank of America of substantially all of
its loan portfolio, Bank of America shall resign as Administrative Agent. If
Administrative Agent resigns under this Agreement, the Majority Lenders shall
appoint from among the Lenders a successor agent for the Lenders. If no
successor agent is appointed prior to the effective date of the resignation of
Administrative Agent, Administrative Agent may appoint, after consulting with
the Lenders and the Borrowers, a successor agent from among the Lenders. Upon
the acceptance of its appointment as successor agent hereunder, such successor
agent shall succeed to all the rights, powers and duties of the retiring
Administrative Agent and the term "Administrative Agent" shall mean such
successor agent and the retiring Administrative Agent's appointment, powers and
duties as Administrative Agent shall be terminated. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Article 12 shall continue to inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement.
12.10 Withholding Tax.
(a) If any Lender is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Lender claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such
Lender agrees with and in favor of Administrative Agent, to deliver to
Administrative Agent:
(i) if such Lender claims an exemption from, or a reduction
of, withholding tax under a United States of America tax treaty,
properly completed IRS Forms W-8BEN and W-8ECI before the payment of
any interest in the first calendar year and before the payment of any
interest in each third succeeding calendar year during which interest
may be paid under this Agreement;
(ii) if such Lender claims that interest paid under this
Agreement is exempt from United States of America withholding tax
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because it is effectively connected with a United States of America
trade or business of such Lender, two properly completed and executed
copies of IRS Form W-8ECI before the payment of any interest is due in
the first taxable year of such Lender and in each succeeding taxable
year of such Lender during which interest may be paid under this
Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the
Code or other laws of the United States of America as a condition to
exemption from, or reduction of, United States of America withholding
tax.
Such Lender agrees to promptly notify Administrative Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(b) If any Lender claims exemption from, or reduction of, withholding
tax under a United States of America tax treaty by providing IRS Form FW-8BEN
and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations owing to such Lender, such Lender
agrees to notify Administrative Agent of the percentage amount in which it is no
longer the beneficial owner of Obligations of the Borrowers to such Lender. To
the extent of such percentage amount, Administrative Agent will treat such
Lender's IRS Form W-8BEN as no longer valid.
(c) If any Lender claiming exemption from United States of America
withholding tax by filing IRS Form W-8ECI with Administrative Agent sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations owing to such Lender, such Lender agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, Administrative Agent may withhold from any interest payment to
such Lender an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required by
subsection (a) of this Section are not delivered to Administrative Agent, then
Administrative Agent may withhold from any interest payment to such Lender not
providing such forms or other documentation an amount equivalent to the
applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United
States of America or other jurisdiction asserts a claim that Administrative
Agent did not properly withhold tax from amounts paid to or for the account of
any Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify Administrative Agent of a
change in circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Lender shall
indemnify Administrative Agent fully for all amounts paid, directly or
indirectly, by Administrative Agent as tax or otherwise, including penalties and
interest, and including any taxes imposed by any jurisdiction on the amounts
payable to Administrative Agent under this Section, together with all costs and
expenses (including Attorney Costs). The obligation of the Lenders under this
subsection shall survive the payment of all Obligations and the resignation or
replacement of Administrative Agent.
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12.11 Collateral Matters.
(a) The Lenders hereby irrevocably authorize Administrative Agent, at
its option and in its sole discretion, to (i) release Administrative Agent's
Liens upon any Collateral (1) upon the termination of the Commitments and Full
Payment of all Loans and reimbursement obligations in respect of Letters of
Credit and Credit Support, and the termination of all outstanding Letters of
Credit (whether or not any of such obligations are due) and all other
Obligations (2) constituting property being sold or disposed of if the Borrowers
certify to Administrative Agent that the sale or disposition is made in
compliance with Section 7.9 (and Administrative Agent may rely conclusively on
any such certificate, without further inquiry), or (3) constituting property
leased to a Borrower under a lease which has expired or been terminated in a
transaction permitted under this Agreement; and (ii) release and terminate any
Subsidiary Guaranty in connection with any permitted sale or disposition of all
of the equity interests or all or substantially all of the assets of the
Subsidiary Guarantor party to such Subsidiary Guaranty pursuant to Section 7.9
hereof. Except as provided above, Administrative Agent will not release any of
Administrative Agent's Liens without the prior written authorization of the
Lenders; provided that Administrative Agent may, in its discretion, release
Administrative Agent's Liens on Collateral consisting of Fixed Assets valued in
the aggregate not in excess of $500,000 during each Fiscal Year without the
prior written authorization of the Lenders and Administrative Agent may release
Administrative Agent's Liens on Collateral valued in the aggregate not in excess
of $1,000,000 during each Fiscal Year with the prior written authorization of
the Majority Lenders. Upon request by Administrative Agent or the Borrowers at
any time, the Lenders will confirm in writing Administrative Agent's authority
to release Administrative Agent's Liens upon particular types or items of
Collateral pursuant to this Section 12.11.
(b) Upon receipt by Administrative Agent of any authorization required
pursuant to Section 12.11(a) from the Lenders of Administrative Agent's
authority to release Administrative Agent's Liens upon particular types or items
of Collateral, and upon at least five (5) Business Days prior written request by
the Borrowers, Administrative Agent shall (and is hereby irrevocably authorized
by the Lenders to) execute such documents as may be necessary to evidence the
release of Administrative Agent's Liens upon such Collateral; provided, however,
that (i) Administrative Agent shall not be required to execute any such document
on terms which, in Administrative Agent's opinion, would expose Administrative
Agent to liability or create any obligation or entail any consequence other than
the release of such Liens without recourse or warranty, and (ii) such release
shall not in any manner discharge, affect or impair the Obligations or any Liens
(other than those expressly being released) upon (or obligations of the
Borrowers in respect of) all interests retained by the Borrowers, including the
proceeds of any sale, all of which shall continue to constitute part of the
Collateral.
(c) Administrative Agent shall have no obligation whatsoever to any of
the Lenders to assure that the Collateral exists or is owned by the Borrowers or
is cared for, protected or insured or has been encumbered, or that
Administrative Agent's Liens have been properly or sufficiently or lawfully
created, perfected, protected or enforced or are entitled to any particular
priority, or to exercise at all or in any particular manner or under any duty of
care, disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Administrative Agent pursuant to
any of the DIP Financing Documents, it being understood and agreed that in
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respect of the Collateral, or any act, omission or event related thereto,
Administrative Agent may act in any manner it may deem appropriate, in its sole
discretion given Administrative Agent's own interest in the Collateral in its
capacity as one of the Lenders and that Administrative Agent shall have no other
duty or liability whatsoever to any Lender as to any of the foregoing.
12.12 Restrictions on Actions by Lenders; Sharing of Payments.
(a) Each of the Lenders agrees that it shall not, without the express
consent of all Lenders, and that it shall, to the extent it is lawfully entitled
to do so, upon the request of all Lenders, set off against the Obligations, any
amounts owing by such Lender to the Borrowers or any accounts of the Borrowers
now or hereafter maintained with such Lender. Each of the Lenders further agrees
that it shall not, unless specifically requested to do so by Administrative
Agent, take or cause to be taken any action to enforce its rights under this
Agreement or against the Borrowers, including the commencement of any legal or
equitable proceedings, to foreclose any Lien on, or otherwise enforce any
security interest in, any of the Collateral.
(b) If at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations of the Borrowers to such Lender arising under,
or relating to, this Agreement or the other DIP Financing Documents, except for
any such proceeds or payments received by such Lender from Administrative Agent
pursuant to the terms of this Agreement, or (ii) payments from Administrative
Agent in excess of such Lender's ratable portion of all such distributions by
Administrative Agent, such Lender shall promptly (1) turn the same over to
Administrative Agent, in kind, and with such endorsements as may be required to
negotiate the same to Administrative Agent, or in same day funds, as applicable,
for the account of all of the Lenders and for application to the Obligations in
accordance with the applicable provisions of this Agreement, or (2) purchase,
without recourse or warranty, an undivided interest and participation in the
Obligations owed to the other Lenders so that such excess payment received shall
be applied ratably as among the Lenders in accordance with their Pro Rata
Shares; provided, however, that if all or part of such excess payment received
by the purchasing party is thereafter recovered from it, those purchases of
participations shall be rescinded in whole or in part, as applicable, and the
applicable portion of the purchase price paid therefor shall be returned to such
purchasing party, but without interest except to the extent that such purchasing
party is required to pay interest in connection with the recovery of the excess
payment.
12.13 Agency for Perfection. Each Lender hereby appoints each other
Lender as agent for the purpose of perfecting the Lenders' security interest in
assets which, in accordance with Article 9 of the UCC can be perfected only by
possession. Should any Lender (other than Administrative Agent) obtain
possession of any such Collateral, such Lender shall notify Administrative Agent
thereof, and, promptly upon Administrative Agent's request therefor shall
deliver such Collateral to Administrative Agent or in accordance with
Administrative Agent's instructions.
12.14 Payments by Administrative Agent to Lenders. All payments to be
made by Administrative Agent to the Lenders shall be made by bank wire transfer
or internal transfer of immediately available funds to each Lender pursuant to
wire transfer instructions delivered in writing to Administrative Agent on or
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prior to the Closing Date (or if such Lender is an Assignee, on the applicable
Assignment and Acceptance), or pursuant to such other wire transfer instructions
as each party may designate for itself by written notice to Administrative
Agent. Concurrently with each such payment, Administrative Agent shall identify
whether such payment (or any portion thereof) represents principal, premium or
interest on the Revolving Loans or otherwise. Unless Administrative Agent
receives notice from the Borrowers prior to the date on which any payment is due
to the Lenders that the Borrowers will not make such payment in full as and when
required, Administrative Agent may assume that the Borrowers have made such
payment in full to Administrative Agent on such date in immediately available
funds and Administrative Agent may (but shall not be so required), in reliance
upon such assumption, distribute to each Lender on such due date an amount equal
to the amount then due such Lender. If and to the extent the Borrowers have not
made such payment in full to Administrative Agent, each Lender shall repay to
Administrative Agent upon demand such amount distributed to such Lender,
together with interest thereon at the Federal Funds Rate for each day from the
date such amount is distributed to such Lender until the date repaid.
12.15 Settlement.
(a) (i) Each Lender's funded portion of the Revolving Loans is
intended by the Lenders to be equal at all times to such Lender's Pro Rata Share
of the outstanding Revolving Loans. Notwithstanding such agreement,
Administrative Agent, Bank of America, and the other Lenders agree (which
agreement shall not be for the benefit of or enforceable by the Borrowers) that
in order to facilitate the administration of this Agreement and the other DIP
Financing Documents, settlement among them as to the Revolving Loans, the
Non-Ratable Loans and Agent Advances shall take place on a periodic basis in
accordance with the following provisions:
(ii) Administrative Agent shall request settlement
("Settlement") with the Lenders on at least a weekly basis, or on a
more frequent basis at Administrative Agent's election, (A) on behalf
of Bank of America, with respect to each outstanding Non-Ratable Loan,
(B) for itself, with respect to each Agent Advance, and (C) with
respect to collections received, in each case, by notifying the
Lenders of such requested Settlement by telecopy, telephone or other
similar form of transmission, of such requested Settlement, no later
than 12:00 o'clock noon (Atlanta, Georgia time) on the date of such
requested Settlement (the "Settlement Date"). Each Lender (other than
Bank of America, in the case of Non-Ratable Loans and Administrative
Agent in the case of Agent Advances) shall transfer the amount of such
Lender's Pro Rata Share of the outstanding principal amount of the
Non-Ratable Loans and Agent Advances with respect to each Settlement
to Administrative Agent, to Administrative Agent's account, not later
than 2:00 o'clock p.m. (Atlanta, Georgia time), on the Settlement Date
applicable thereto. Settlements may occur during the continuation of a
Default or an Event of Default and whether or not the applicable
conditions precedent set forth in Article 8 have then been satisfied.
Such amounts made available to Administrative Agent shall be applied
against the amounts of the applicable Non-Ratable Loan or Agent
Advance and, together with the portion of such Non-Ratable Loan or
Agent Advance representing Bank of America's Pro Rata Share thereof,
shall constitute Revolving Loans of such Lenders. If any such amount
is not transferred to Administrative Agent by any Lender on the
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Settlement Date applicable thereto, Administrative Agent shall be
entitled to recover such amount on demand from such Lender together
with interest thereon at the Federal Funds Rate for the first three
(3) days from and after the Settlement Date and thereafter at the
Interest Rate then applicable to the Revolving Loans (A) on behalf of
Bank of America, with respect to each outstanding Non-Ratable Loan,
and (B) for itself, with respect to each Agent Advance.
(iii) Notwithstanding the foregoing, not more than one (1)
Business Day after demand is made by Administrative Agent (whether
before or after the occurrence of a Default or an Event of Default and
regardless of whether Administrative Agent has requested a Settlement
with respect to a Non-Ratable Loan or Agent Advance), each other
Lender (A) shall irrevocably and unconditionally purchase and receive
from Bank of America or Administrative Agent, as applicable, without
recourse or warranty, an undivided interest and participation in such
Non-Ratable Loan or Agent Advance equal to such Lender's Pro Rata
Share of such Non-Ratable Loan or Agent Advance and (B) if Settlement
has not previously occurred with respect to such Non-Ratable Loans or
Agent Advances, upon demand by Bank of America or Administrative
Agent, as applicable, shall pay to Bank of America or Administrative
Agent, as applicable, as the purchase price of such participation an
amount equal to one hundred percent (100%) of such Lender's Pro Rata
Share of such Non-Ratable Loans or Agent Advances. If such amount is
not in fact made available to Administrative Agent by any Lender,
Administrative Agent shall be entitled to recover such amount on
demand from such Lender together with interest thereon at the Federal
Funds Rate for the first three (3) days from and after such demand and
thereafter at the Interest Rate then applicable to Base Rate Revolving
Loans.
(iv) From and after the date, if any, on which any Lender
purchases an undivided interest and participation in any Non-Ratable
Loan or Agent Advance pursuant to clause (iii) above, Administrative
Agent shall promptly distribute to such Lender, such Lender's Pro Rata
Share of all payments of principal and interest and all proceeds of
Collateral received by Administrative Agent in respect of such
Non-Ratable Loan or Agent Advance.
(v) Between Settlement Dates, Administrative Agent, to the
extent no Agent Advances are outstanding, may pay over to Bank of
America any payments received by Administrative Agent, which in
accordance with the terms of this Agreement would be applied to the
reduction of the Revolving Loans, for application to Bank of America's
Revolving Loans including Non-Ratable Loans. If, as of any Settlement
Date, collections received since the then immediately preceding
Settlement Date have been applied to Bank of America's Revolving Loans
(other than to Non-Ratable Loans or Agent Advances in which such
Lender has not yet funded its purchase of a participation pursuant to
clause (iii) above), as provided for in the previous sentence, Bank of
America shall pay to Administrative Agent for the accounts of the
Lenders, to be applied to the outstanding Revolving Loans of such
Lenders, an amount such that each Lender shall, upon receipt of such
amount, have, as of such Settlement Date, its Pro Rata Share of the
Revolving Loans. During the period between Settlement Dates, Bank of
America with respect to Non-Ratable Loans, Administrative Agent with
respect to Agent Advances, and each Lender with respect to the
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Revolving Loans other than Non-Ratable Loans and Agent Advances, shall
be entitled to interest at the applicable rate or rates payable under
this Agreement on the actual average daily amount of funds employed by
Bank of America, Administrative Agent and the other Lenders.
(vi) Unless Administrative Agent has received written notice
from a Lender to the contrary as provided in Section 12.15(c),
Administrative Agent may assume that the applicable conditions
precedent set forth in Article 8 have been satisfied and the requested
Borrowing will not exceed Availability on any Funding Date for a
Revolving Loan or Non-Ratable Loan.
(b) Lenders' Failure to Perform. All Revolving Loans (other than
Non-Ratable Loans and Agent Advances) shall be made by the Lenders
simultaneously and in accordance with their Pro Rata Shares. It is understood
that (i) no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Revolving Loans hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligation to make any Revolving Loans
hereunder, (ii) no failure by any Lender to perform its obligation to make any
Revolving Loans hereunder shall excuse any other Lender from its obligation to
make any Revolving Loans hereunder, and (iii) the obligations of each Lender
hereunder shall be several, not joint and several.
(c) Defaulting Lenders. Notwithstanding the occurrence or continuance
of a Default or Event of Default or other failure of any condition in Article 8
to the making of Revolving Loans hereunder, unless Administrative Agent receives
written notice from a Lender on or prior to the Closing Date or, with respect to
any Borrowing after the Closing Date, at least one Business Day prior to the
date of such Borrowing, that such Lender will not make available as and when
required hereunder to Administrative Agent that Lender's Pro Rata Share of a
Borrowing, Administrative Agent may assume that each Lender has made such amount
available to Administrative Agent in immediately available funds on the Funding
Date. Furthermore, Administrative Agent may, in reliance upon such assumption,
make available to the Borrowers on such date a corresponding amount. If any
Lender has not transferred its full Pro Rata Share to Administrative Agent in
immediately available funds and Administrative Agent has transferred a
corresponding amount to the Borrowers, then on the Business Day following such
Funding Date that Lender shall make such amount available to Administrative
Agent, together with interest at the Federal Funds Rate for that day. A notice
by Administrative Agent submitted to any Lender with respect to amounts owing
shall be conclusive, absent manifest error. If a Lender's full Pro Rata Share is
transferred to Administrative Agent as required, the amount transferred to
Administrative Agent shall constitute such Lender's Revolving Loan for all
purposes of this Agreement. If that amount is not transferred to Administrative
Agent on the Business Day following the Funding Date, Administrative Agent will
notify the Borrowers of such failure to fund and, upon demand by Administrative
Agent, the Borrowers shall pay such amount to Administrative Agent for
Administrative Agent's account, together with interest thereon for each day
elapsed since the date of such Borrowing, at a rate per annum equal to the
Interest Rate applicable at the time to the Revolving Loans comprising that
particular Borrowing. The failure of any Lender to make any Revolving Loan on
any Funding Date (any such Lender, prior to the cure of such failure, being
hereinafter referred to as a "Defaulting Lender") shall not relieve any other
Lender of its obligation hereunder to make a Revolving Loan on that Funding
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Date. No Lender shall be responsible for any other Lender's failure to advance
such other Lenders' Pro Rata Share of any Borrowing. Notwithstanding anything to
the contrary in this Section 12.15(c), no Lender shall be a Defaulting Lender
for its failure to fund its Pro Rata Share of a Borrowing if and to the extent
that (i) the amount of such Borrowing on the Funding Date exceeds Availability
on the Funding Date, as such Availability is calculated pursuant to the
Borrowing Base Certificate most recently received by Administrative Agent on or
before such Funding Date and (ii) such Lender has promptly advised
Administrative Agent, prior to Administrative Agent's funding of Revolving Loans
to Borrowers on such Funding Date, that such Lender does not intend to make
available its Pro Rata Share thereof. Nothing herein shall be deemed to provide
that Administrative Agent shall be bound by the calculation by the Borrowers of
the Borrowing Base in any Borrowing Base Certificate if such calculation is in
error in any respect or treats as eligible any Inventory or Accounts that are
not Eligible Inventory or Eligible Accounts.
(d) Retention of Defaulting Lender's Payments. Administrative Agent
shall not be obligated to transfer to a Defaulting Lender any payments made by
Borrowers to Administrative Agent for the Defaulting Lender's benefit; nor shall
a Defaulting Lender be entitled to the sharing of any payments hereunder.
Amounts payable to a Defaulting Lender shall instead be paid to or retained by
Administrative Agent for application to Obligations other than those owed to the
Defaulting Lender. In its discretion, Administrative Agent may lend to the
Borrowers the amount of all such payments received or retained by it for the
account of such Defaulting Lender. Any amounts so advanced to the Borrowers
shall bear interest at the rate applicable to Base Rate Revolving Loans and for
all other purposes of this Agreement shall be treated as if they were Revolving
Loans, provided, however, that, for purposes of voting or consenting to matters
with respect to the DIP Financing Documents and determining Pro Rata Shares,
such Defaulting Lender shall be deemed not to be a "Lender." Until a Defaulting
Lender cures its failure to fund its Pro Rata Share of any Borrowing (A) such
Defaulting Lender shall not be entitled to any portion of the Unused Line Fee
and (B) the Unused Line Fee shall accrue in favor of the Lenders which have
funded their respective Pro Rata Shares of such requested Borrowing and shall be
allocated among such performing Lenders ratably based upon their relative
Commitments. This Section shall remain effective with respect to such Lender
until such time as the Defaulting Lender shall no longer be in default of any of
its obligations under this Agreement. The terms of this Section shall not be
construed to increase or otherwise affect the Commitment of any Lender, or
relieve or excuse the performance by the Borrowers of their duties and
obligations hereunder.
(e) Removal of Defaulting Lender. At the Borrowers' request,
Administrative Agent or an Eligible Assignee reasonably acceptable to
Administrative Agent and the Borrowers shall have the right (but not the
obligation) to purchase from any Defaulting Lender, and each Defaulting Lender
shall, upon such request, sell and assign to Administrative Agent or such
Eligible Assignee, all of the Defaulting Lender's outstanding Commitments
hereunder. Such sale shall be consummated promptly after Administrative Agent
has arranged for a purchase by Administrative Agent or an Eligible Assignee
pursuant to an Assignment and Acceptance, and at a price equal to the
outstanding principal balance of the Defaulting Lender's Loans, plus accrued
interest and fees, without premium or discount.
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12.16 Letters of Credit; Inter-Lender Issues.
(a) Notice of Letter of Credit Balance. On each Settlement Date
Administrative Agent shall notify each Lender of the issuance of all Letters of
Credit since the prior Settlement Date.
(b) Participations in Letters of Credit.
(i) Purchase of Participations. Immediately upon issuance of
any Letter of Credit in accordance with Section 1.3(d), each Lender
shall be deemed to have irrevocably and unconditionally purchased and
received without recourse or warranty, an undivided interest and
participation equal to such Lender's Pro Rata Share of the face amount
of such Letter of Credit or the Credit Support provided through
Administrative Agent to the Letter of Credit Issuer, if not Bank of
America, in connection with the issuance of such Letter of Credit
(including all obligations of the Borrowers with respect thereto, and
any security therefore or guaranty pertaining thereto).
(ii) Sharing of Reimbursement Obligation Payments. Whenever
Administrative Agent receives a payment from the Borrowers on account
of reimbursement obligations in respect of a Letter of Credit or
Credit Support as to which Administrative Agent has previously
received for the account of the Letter of Credit Issuer thereof
payment from a Lender, Administrative Agent shall promptly pay to such
Lender such Lender's Pro Rata Share of such payment from the
Borrowers. Each such payment shall be made by Administrative Agent on
the next Settlement Date.
(iii) Documentation. Upon the request of any Lender,
Administrative Agent shall furnish to such Lender copies of any Letter
of Credit, Credit Support for any Letter of Credit, reimbursement
agreements executed in connection therewith, applications for any
Letter of Credit, and such other documentation as may reasonably be
requested by such Lender.
(iv) Obligations Irrevocable. The obligations of each Lender
to make payments to Administrative Agent with respect to any Letter of
Credit or with respect to their participation therein or with respect
to any Credit Support for any Letter of Credit or with respect to the
Revolving Loans made as a result of a drawing under a Letter of Credit
and the obligations of the Borrowers for whose account the Letter of
Credit or Credit Support was issued to make payments to Administrative
Agent, for the account of the Lenders, shall be irrevocable and shall
not be subject to any qualification or exception whatsoever, including
any of the following circumstances:
(1) any lack of validity or enforceability of this Agreement
or any of the other DIP Financing Documents;
(2) the existence of any claim, setoff, defense or other
right which a Borrower may have at any time against a beneficiary
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named in a Letter of Credit or any transferee of any Letter of Credit
(or any Person for whom any such transferee may be acting), any
Lender, Administrative Agent, the issuer of such Letter of Credit, or
any other Person, whether in connection with this Agreement, any
Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transactions between
such Borrower or any other Person and the beneficiary named in any
Letter of Credit);
(3) any draft, certificate or any other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(4) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the DIP
Financing Documents;
(5) the occurrence of any Default or Event of Default; or
(6) the failure of the Borrowers to satisfy the applicable
conditions precedent set forth in Article 8.
(c) Recovery or Avoidance of Payments; Refund of Payments In Error. In
the event any payment by or on behalf of any Obligor or by any Account Debtor is
received by Administrative Agent with respect to any of the Obligations and
distributed by Administrative Agent to the Lenders on account of their
respective participations therein and is thereafter set aside, avoided or
recovered from Administrative Agent in connection with any receivership,
liquidation or bankruptcy proceeding, the Lenders shall, upon demand by
Administrative Agent, pay to Administrative Agent their respective Pro Rata
Shares of such amount set aside, avoided or recovered, together with interest at
the rate required to be paid by Administrative Agent upon the amount required to
be repaid by it. Unless Administrative Agent receives notice from the Borrowers
prior to the date on which any payment is due to the Lenders that the Borrowers
will not make such payment in full as and when required, Administrative Agent
may assume that the Borrowers have made such payment in full to Administrative
Agent on such date in immediately available funds and Administrative Agent may
(but shall not be so required), in reliance upon such assumption, distribute to
each Lender on such due date an amount equal to the amount then due such Lender.
If and to the extent the Borrowers have not made such payment in full to
Administrative Agent, each Lender shall repay to Administrative Agent on demand
such amount distributed to such Lender, together with interest thereon at the
Federal Funds Rate for each day from the date such amount is distributed to such
Lender until the date repaid.
(d) Indemnification by Lenders. To the extent not reimbursed by the
Borrowers and without limiting the obligations of the Borrowers hereunder, the
Lenders agree to indemnify the Letter of Credit Issuer ratably in accordance
with their respective Pro Rata Shares, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including attorneys' fees) or disbursements of any kind and nature whatsoever
that may be imposed on, incurred by or asserted against the Letter of Credit
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Issuer in any way relating to or arising out of any Letter of Credit or the
transactions contemplated thereby or any action taken or omitted by the Letter
of Credit Issuer under any Letter of Credit or any DIP Financing Document in
connection therewith; provided that no Lender shall be liable for any of the
foregoing to the extent it arises from the gross negligence or willful
misconduct of the Person to be indemnified. Without limitation of the foregoing,
each Lender agrees to reimburse the Letter of Credit Issuer promptly upon demand
for its Pro Rata Share of any costs or expenses payable by the Borrowers to the
Letter of Credit Issuer, to the extent that the Letter of Credit Issuer is not
promptly reimbursed for such costs and expenses by the Borrowers. The agreement
contained in this Section shall survive payment in full of all other Obligations
and the Commitment Termination Date.
12.17 Concerning the Collateral and the Related DIP Financing
Documents. Each Lender authorizes and directs Administrative Agent to enter into
the other DIP Financing Documents, for the ratable benefit and obligation of
Administrative Agent and the Lenders. Each Lender agrees that any action taken
by Administrative Agent or Majority Lenders, as applicable, in accordance with
the terms of this Agreement or the other DIP Financing Documents, and the
exercise by Administrative Agent or the Majority Lenders, as applicable, of
their respective powers set forth therein or herein, together with such other
powers that are reasonably incidental thereto, shall be binding upon all of the
Lenders. The Lenders acknowledge that the Revolving Loans, Agent Advances,
Non-Ratable Loans, Bank Products and all interest, fees and expenses hereunder
constitute one Debt, secured by all of the Collateral.
12.18 Field Audit and Examination Reports; Disclaimer by Lenders. By
signing this Agreement, each Lender:
(a) is deemed to have requested that Administrative Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, "Reports") prepared by or
on behalf of Administrative Agent;
(b) expressly agrees and acknowledges that neither Bank of America nor
Administrative Agent (i) makes any representation or warranty as to the accuracy
of any Report, or (ii) shall be liable for any information contained in any
Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Administrative Agent or Bank of
America or other party performing any audit or examination will inspect only
specific information regarding the Borrowers and will rely significantly upon
the Borrowers' books and records, as well as on representations of the
Borrowers' personnel;
(d) agrees to keep all Reports confidential and strictly for its
internal use, and not to distribute except to its participants, or use any
Report in any other manner; and
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold Administrative Agent
and any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
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that the indemnifying Lender has made or may make to the Borrowers, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of the Borrowers; and (ii) to pay and protect, and
indemnify, defend and hold Administrative Agent and any such other Lender
preparing a Report harmless from and against, the claims, actions, proceedings,
damages, costs, expenses and other amounts (including Attorney Costs) incurred
by Administrative Agent and any such other Lender preparing a Report as the
direct or indirect result of any third parties who might obtain all or part of
any Report through the indemnifying Lender.
12.19 Relation Among Lenders. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of Administrative Agent)
authorized to act for, any other Lender.
12.20 No Reliance on Administrative Agent's Customer Identification
Program. Each Lender acknowledges and agrees that neither such Lender, nor any
of its Affiliates, Participants or Assignees, may rely on Administrative Agent
to carry out such Lender's, Affiliate's, Participant's or Assignee's customer
identification program, or other obligations required or imposed under or
pursuant to the USA Patriot Act or the regulations thereunder, including the
regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the
"CIP Regulations"), or any other Anti-Terrorism Law, including any programs
involving any of the following items relating to or in connection with
Borrowers, their Affiliates or its agents, the DIP Financing Documents or the
transactions hereunder: (1) any identity verification procedures, (2) any record
keeping, (3) any comparisons with government lists, (4) any customer notices or
(5) any other procedures required under the CIP Regulations or such other laws.
12.21 USA Patriot Act. Each Lender or Assignee or Participant of a
Lender that is not incorporated under the laws of the United States of America
or a state thereof (and is not excepted from the certification requirement
contained in Section 313 of the USA Patriot Act and the applicable regulations
because it is both (i) an affiliate of a depository institution or foreign bank
that maintains a physical presence in the United States or foreign country, and
(ii) subject to supervision by a banking authority regulating such affiliated
depository institution or foreign bank) shall deliver to Administrative Agent
the certification, or, if applicable, recertification, certifying that such
Lender is not a "shell" and certifying to other matters as required by Section
313 of the USA Patriot Act and the applicable regulations: (1) within ten (10)
days after the Closing Date and (2) at such other times as are required under
the USA Patriot Act.
12.22 Syndication Agent. The Lender identified on the facing page or
signature pages of this Agreement as the "Syndication Agent" shall not have any
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, the
Lender so identified as the "Syndication Agent" shall not have or be deemed to
have any fiduciary relationship with any Lender. Each Lender acknowledges that
it has not relied, and will not rely, on the Lender so identified as the
"Syndication Agent" in deciding to enter into this Agreement or in taking or not
taking action hereunder.
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ARTICLE 13
MISCELLANEOUS
13.1 No Waivers; Cumulative Remedies. No failure by Administrative
Agent or any Lender to exercise any right, remedy, or option under this
Agreement or any present or future supplement thereto, or in any other agreement
between or among the Borrowers and Administrative Agent and/or any Lender, or
delay by Administrative Agent or any Lender in exercising the same, will operate
as a waiver thereof. No waiver by Administrative Agent or any Lender will be
effective unless it is in writing, and then only to the extent specifically
stated. No waiver by Administrative Agent or the Lenders on any occasion shall
affect or diminish Administrative Agent's and each Lender's rights thereafter to
require strict performance by the Borrowers of any provision of this Agreement.
Administrative Agent and the Lenders may proceed directly to collect the
Obligations without any prior recourse to the Collateral. Administrative Agent's
and each Lender's rights under this Agreement will be cumulative and not
exclusive of any other right or remedy which Administrative Agent or any Lender
may have.
13.2 Severability. The illegality or unenforceability of any provision
of this Agreement or any DIP Financing Document or any instrument or agreement
required hereunder shall not in any way affect or impair the legality or
enforceability of the remaining provisions of this Agreement or any instrument
or agreement required hereunder.
13.3 Governing Law; Choice of Forum; Service of Process.
(a) EXCEPT AS GOVERNED BY THE FINANCING ORDER, THIS AGREEMENT SHALL BE
INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA (WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF), PROVIDED THAT PERFECTION ISSUES WITH
RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE CHOICE OR CONFLICT
OF LAW RULES SET FORTH IN ARTICLE 9 OF THE UCC) OF THE STATE OF GEORGIA;
PROVIDED THAT AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER DIP FINANCING DOCUMENT THAT IS NOT REQUIRED TO BE BROUGHT IN THE U.S.
BANKRUPTCY COURT WHERE THE CHAPTER 11 CASES ARE PENDING MAY BE BROUGHT IN THE
COURTS OF THE STATE OF GEORGIA OR OF THE UNITED STATES OF AMERICA LOCATED IN
XXXXXX COUNTY, GEORGIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
THE BORROWERS, AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE
BORROWERS, AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. NOTWITHSTANDING THE FOREGOING: (1) AGENT AND THE LENDERS SHALL
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HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWERS OR THEIR
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION AGENT OR THE LENDERS DEEM
NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY
FOR THE OBLIGATIONS; (2) AGENT AND THE LENDERS SHALL BRING ANY ACTION ARISING
OUT OF OR RELATED TO THIS AGREEMENT IN THE COURT, TO THE EXTENT THAT AGENT AND
THE LENDERS ARE REQUIRED TO DO SO BY THE FINANCING ORDER OR THE BANKRUPTCY CODE;
AND (3) EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS
DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE THOSE JURISDICTIONS.
(c) THE BORROWERS HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED
MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWERS AT THEIR ADDRESS SET
FORTH IN SECTION 13.8 AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE
(5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S. MAIL POSTAGE
PREPAID. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF AGENT OR THE LENDERS
TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.
13.4 WAIVER OF JURY TRIAL. THE BORROWERS, THE LENDERS AND AGENT EACH
IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OTHER DIP FINANCING DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR AGENT-RELATED PERSON, PARTICIPANT
OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE BORROWERS, THE LENDERS AND AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER DIP FINANCING DOCUMENTS OR ANY
PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER DIP FINANCING DOCUMENTS.
13.5 Survival of Representations and Warranties. All of the Borrowers'
representations and warranties contained in this Agreement shall survive the
execution, delivery, and acceptance thereof by the parties, notwithstanding any
investigation by Administrative Agent or the Lenders or their respective agents.
77
13.6 Other Security and Guaranties. Subject to any limitations or
notice requirements in the Financing Order, Administrative Agent, may, without
notice or demand and without affecting the Borrowers' obligations hereunder,
from time to time: (a) take from any Person and hold collateral (other than the
Collateral) for the payment of all or any part of the Obligations and exchange,
enforce or release such collateral or any part thereof; and (b) accept and hold
any endorsement or guaranty of payment of all or any part of the Obligations and
release or substitute any such endorser or guarantor, or any Person who has
given any Lien in any other collateral as security for the payment of all or any
part of the Obligations, or any other Person in any way obligated to pay all or
any part of the Obligations.
13.7 Fees and Expenses. The Borrowers agree to pay to or reimburse (1)
the Bank of America, upon demand, all reasonable costs and expenses that Bank of
America pays or incurs in connection with the structuring and syndication of the
DIP Facility, whether prior to or on or after the Closing Date, and including
reasonable fees and disbursements of counsel; (2) GE Capital, for its benefit,
upon demand, reasonable costs and expenses that GE Capital pays or incurs in
connection with the negotiation, preparation, syndication, or consummation of
this Agreement or any of the other DIP Financing Documents, whether in its
capacity as Syndication Agent or otherwise, but such fees and expenses shall not
exceed $10,000; and (3) Administrative Agent, for its benefit, upon demand, all
reasonable costs and expenses that Administrative Agent pays or incurs in
connection with the negotiation, preparation, syndication, consummation,
administration, enforcement and termination of this Agreement or any of the
other DIP Financing Documents, including: (a) Attorney Costs; (b) costs and
expenses (including attorneys' and paralegals' fees and disbursements) for any
amendment, supplement, waiver, consent, or subsequent closing in connection with
the DIP Financing Documents and the transactions contemplated thereby; (c) costs
and expenses (including attorneys' and paralegals' fees and disbursements)
incurred by Administrative Agent in connection with defending against or
otherwise resolving any challenge to the validity, amount or enforceability of
any Obligation or the validity or enforceability of any of the DIP Financing
Documents, or in connection with any appeal or other challenge to any of the
terms of the Financing Order or the Pre-Petition Secured Party Protection Order;
(d) costs and expenses of lien and title searches and title insurance; (e)
taxes, fees and other charges for recording the Mortgages, filing financing
statements and continuations, and other actions to perfect, protect, and
continue Administrative Agent's Liens (including costs and expenses paid or
incurred by Administrative Agent in connection with the consummation of
Agreement); (f) sums paid or incurred to pay any amount or take any action
required of the Borrowers under the DIP Financing Documents that the Borrowers
fail to pay or take; (g) reasonable costs of appraisals, inspections, and
verifications of the Collateral, including travel, lodging and meals for
inspections of the Collateral and the Borrowers' operations by Administrative
Agent plus Administrative Agent's then customary charge for field examinations
and audits and the preparation of reports thereof (such charge is currently $775
per day (or portion thereof) for each Person retained or employed by
Administrative Agent with respect to each field examination or audit); and (h)
reasonable costs and expenses of forwarding loan proceeds, collecting checks and
other items of payment, and establishing and maintaining Payment Accounts and
lock boxes, and costs and expenses of preserving and protecting the Collateral.
In addition, the Borrowers agree to pay reasonable costs and expenses incurred
by Administrative Agent (including Attorneys' Costs) to Administrative Agent,
for its benefit, on demand, and to the other Lenders for their benefit, on
demand, and all reasonable fees, expenses and disbursements incurred by such
78
other Lenders for one law firm retained by such other Lenders, in each case,
paid or incurred to obtain payment of the Obligations, enforce Administrative
Agent's Liens, sell or otherwise realize upon the Collateral, and otherwise
enforce the provisions of the DIP Financing Documents, or to defend any claims
made or threatened against any Agent or any Lender arising out of the
transactions contemplated hereby (including preparations for and consultations
concerning any such matters). The foregoing shall not be construed to limit any
other provisions of the DIP Financing Documents regarding costs and expenses to
be paid by the Borrowers. All of the foregoing costs and expenses shall be
charged to the Borrowers' Loan Account as Revolving Loans as described in
Section 3.7.
13.8 Notices. Except as otherwise provided herein, all notices,
demands and requests that any party is required or elects to give to any other
shall be in writing, or by a telecommunications device capable of creating a
written record, and any such notice shall become effective (a) upon personal
delivery thereof, including, but not limited to, delivery by overnight mail and
courier service, (b) four (4) days after it shall have been mailed by United
States mail, first class, certified or registered, with postage prepaid, or (c)
in the case of notice by such a telecommunications device, when properly
transmitted, in each case addressed to the party to be notified as follows:
If to Administrative Agent or Bank of
America: Bank of America, N.A.
000 Xxxxxxxxx Xxxxxx, X.X.
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xx. Xxxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
with a copy to: Parker, Hudson, Rainer & Xxxxx LLP
1500 Marquis Two Tower
000 Xxxxxxxxx Xxxxxx Xxxxxx, XX
Xxxxxxx, Xxxxxxx 00000
Attention: C. Xxxxxx Xxxxx, Esq.
Telecopy No.: (000) 000-0000
If to the Borrowers: Cone Xxxxx Corporation
Suite 300
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopy No.: (000) 000-0000
with a copy to: Xxxx, Weiss, Rifkind, Xxxxxxx
& Xxxxxxxx, LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
79
or to such other address as each party may designate for itself by like notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the persons designated above to
receive copies shall not adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.
13.9 Waiver of Notices. Unless otherwise expressly provided herein or
in any Financing Order, the Borrowers waive presentment, and notice of demand or
dishonor and protest as to any instrument, notice of intent to accelerate the
Obligations and notice of acceleration of the Obligations, as well as any and
all other notices to which it might otherwise be entitled. No notice to or
demand upon the Borrowers that Administrative Agent or any Lender may elect to
give shall entitle the Borrowers to any or further notice or demand in the same,
similar or other circumstances.
13.10 Binding Effect. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective representatives,
successors, and assigns of the parties hereto; provided, however, that no
interest herein may be assigned by any Borrower without prior written consent of
Administrative Agent and each Lender. The rights and benefits of Administrative
Agent and the Lenders hereunder shall, if such Persons so agree, inure to any
party acquiring any interest in the Obligations or any part thereof.
13.11 Indemnity of Agents and the Lenders by the Borrowers.
(a) Each Borrower agrees to defend, indemnify and hold each
Indemnified Party harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of
Administrative Agent or replacement of any Lender) be imposed on, incurred by or
asserted against any such Person in any way relating to or arising out of any of
the DIP Financing Documents, or the transactions contemplated hereby, or any
challenge to the validity, amount or enforceability of any Obligation or the
validity or enforceability of any of the DIP Financing Documents or in
connection with any appeal or other challenge to any of the provisions of the
Financing Order or the Pre-Petition Secured Party Protection Order, or any
action taken or omitted by any such Person under or in connection with any of
the foregoing, including with respect to any investigation, litigation or
proceeding (including any Insolvency Proceeding or appellate proceeding) related
to or arising out of this Agreement, any other DIP Financing Document, or the
Loans or the use of the proceeds thereof, whether or not any Indemnified Party
is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided, that the Borrowers shall have no obligation hereunder
to any Indemnified Party with respect to Indemnified Liabilities to the extent
resulting solely from the gross negligence or willful misconduct of such
Indemnified Party. The foregoing provisions of this Section 13.11(a) shall not
be deemed to expand the right to reimbursement of GE Capital pursuant to Section
13.7(2) hereof. The agreements in this Section shall survive payment of all
other Obligations and the Commitment Termination Date.
(b) Each Borrower agrees to indemnify, defend and hold harmless each
Indemnified Party from any loss or liability directly or indirectly arising out
80
of the use, generation, manufacture, production, storage, release, threatened
release, discharge, disposal or presence of a hazardous substance in connection
with such Borrower's operations, business or property, except to the extent such
loss or liability arises solely from the gross negligence or willful misconduct
of such Indemnified Party. This indemnity will apply whether the hazardous
substance is on, under or about such Borrower's property or operations or
property leased to such Borrower. The indemnity includes, but is not limited to,
Attorneys Costs. The indemnity extends to Agents and the Lenders, their parents,
affiliates, subsidiaries and all of their directors, officers, employees,
agents, successors, attorneys and assigns. "Hazardous substances" means any
substance, material or waste that is or becomes designated or regulated as
"toxic," "hazardous," "pollutant," or "contaminant" or a similar designation or
regulation under any federal, state or local law (whether under common law,
statute, regulation or otherwise) or judicial or administrative interpretation
of such, including petroleum or natural gas. This indemnity will survive
repayment of all other Obligations and termination of this Agreement, the DIP
Facility and the Commitments.
13.12 Limitation of Liability. NO CLAIM MAY BE MADE BY ANY BORROWER,
ANY LENDER OR OTHER PERSON AGAINST ANY AGENT, ANY LENDER, OR THE AFFILIATES,
DIRECTORS, OFFICERS, EMPLOYEES, COUNSEL, REPRESENTATIVES, AGENTS OR
ATTORNEYS-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER
THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT OR ANY OTHER DIP FINANCING DOCUMENT, OR ANY ACT, OMISSION OR
EVENT OCCURRING IN CONNECTION THEREWITH, AND EACH AGENT, EACH BORROWER AND EACH
LENDER HEREBY WAIVE, RELEASE AND AGREE NOT TO XXX UPON ANY CLAIM FOR SUCH
DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST
IN ITS FAVOR.
13.13 Final Agreement. This Agreement and the other DIP Financing
Documents are intended by the Borrowers, Administrative Agent and the Lenders to
be the final, complete, and exclusive expression of the agreement between them.
This Agreement supersedes any and all prior oral or written agreements relating
to the subject matter hereof. No modification, rescission, waiver, release, or
amendment of any provision of this Agreement or any other DIP Financing Document
shall be made, except by a written agreement signed by the Borrowers and a duly
authorized officer of each of Administrative Agent and the requisite Lenders.
13.14 Counterparts. This Agreement may be executed in any number of
counterparts, and by Administrative Agent, each Lender and each Borrower in
separate counterparts, each of which shall be an original, but all of which
shall together constitute one and the same agreement; signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
13.15 Captions. The captions contained in this Agreement are for
convenience of reference only, are without substantive meaning and should not be
construed to modify, enlarge, or restrict any provision.
81
13.16 Right of Setoff. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Borrowers, any such notice being waived by the
Borrowers to the fullest extent permitted by law (except as may be otherwise
required by the Financing Order), to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Lender or any Affiliate of
such Lender to or for the credit or the account of the Borrowers against any and
all Obligations owing to such Lender, now or hereafter existing, irrespective of
whether or not Administrative Agent or such Lender shall have made demand under
this Agreement or any DIP Financing Document and although such Obligations may
be contingent or unmatured. Each Lender agrees promptly to notify the Borrowers
and Administrative Agent after any such set-off and application made by such
Lender; provided, however, that the failure to give such notice shall not affect
the validity of such set-off and application. NOTWITHSTANDING THE FOREGOING, NO
LENDER SHALL EXERCISE ANY RIGHT OF SET-OFF, BANKER'S LIEN, OR THE LIKE AGAINST
ANY DEPOSIT ACCOUNT OR PROPERTY OF THE BORROWERS HELD OR MAINTAINED BY SUCH
LENDER WITHOUT THE PRIOR WRITTEN UNANIMOUS CONSENT OF THE LENDERS.
13.17 Confidentiality.
(a) Each Borrower hereby consents that Administrative Agent and each
Lender may issue and disseminate to the public general information describing
the credit accommodation entered into pursuant to this Agreement, including the
name and address of such Borrower and a general description of such Borrower's
business and may use such Borrower's name in advertising and other promotional
material.
(b) Each Lender severally agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information identified as "confidential" or "secret" by the Borrowers and
provided to Administrative Agent or such Lender by or on behalf of the
Borrowers, under this Agreement or any other DIP Financing Document, except to
the extent that such information (i) was or becomes generally available to the
public other than as a result of disclosure by Administrative Agent or such
Lender, (ii) was or becomes available on a nonconfidential basis from a source
other than the Borrowers, provided that such source is not bound by a
confidentiality agreement with the Borrowers known to Administrative Agent or
such Lender; or (iii) is required or permitted to be disclosed by the Borrowers,
Administrative Agent or the Lenders in the Chapter 11 Cases; provided, however,
that Administrative Agent and any Lender may disclose such information (1) at
the request or pursuant to any requirement of any Governmental Authority to
which Administrative Agent or such Lender is subject or in connection with an
examination of Administrative Agent or such Lender by any such Governmental
Authority; (2) pursuant to subpoena or other court process; (3) when required to
do so in accordance with the provisions of any applicable Requirement of Law;
(4) to the extent reasonably required in connection with any litigation or
proceeding (including the Chapter 11 Cases) to which Administrative Agent, any
Lender or their respective Affiliates may be party; (5) to the extent reasonably
required in connection with the exercise of any remedy hereunder or under any
other DIP Financing Document; (6) to Administrative Agent's or such Lender's
independent auditors, accountants, attorneys and other professional advisors;
(7) to any prospective Participant or Assignee under any Assignment and
82
Acceptance, actual or potential, provided that such prospective Participant or
Assignee agrees to keep such information confidential to the same extent
required of Administrative Agent and the Lenders hereunder; (8) as expressly
permitted under the terms of any other document or agreement regarding
confidentiality to which any Borrower is party or is deemed party with
Administrative Agent or such Lender; (9) to its Affiliates; and (10) to any of
the Pre-Petition Secured Parties. Notwithstanding anything herein to the
contrary, the information subject to this Section 13.17(b) shall not include,
and Administrative Agent and each Lender may disclose without limitation of any
kind, any information with respect to the "tax treatment" and "tax structure"
(in each case, within the meaning of Treasury Regulation Section 1.6011-4) of
the transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to Administrative Agent or
such Lender relating to such tax treatment or tax structure; provided that with
respect to any document or similar item that in either case contains information
concerning the tax treatment or tax structure of the transactions as well as
other information, this sentence shall only apply to such portions of the
document or similar item that relate to the tax treatment or tax structure of
the Loans, Letters of Credit and transactions contemplated hereby.
13.18 Conflicts with Other DIP Financing Documents. Unless otherwise
expressly provided in this Agreement (or in another DIP Financing Document by
specific reference to the applicable provision contained in this Agreement), if
any provision contained in this Agreement conflicts with any provision of any
other DIP Financing Document, the provision contained in this Agreement shall
govern and control.
[Remainder of page intentionally blank.]
83
IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
"BORROWERS"
CONE XXXXX CORPORATION,
a North Carolina corporation
By:/s/ W. Xxxxx Xxxxxxx
Name: W. Xxxxx Xxxxxxx
Title: Treasurer
CIPCO S.C., INC.,
a Delaware corporation
By: /s/Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Ass't Secretary
CONE FOREIGN TRADING, LLC,
a North Carolina limited liability company
By: /s/ W. Xxxxx Xxxxxxx
Name: W. Xxxxx Xxxxxxx
Title: Treasurer
CORNWALLIS DEVELOPMENT CO.,
a North Carolina corporation
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: VP & Secretary
[Signatures continue on following page]
84
"AGENTS"
BANK OF AMERICA, N.A.,
as Administrative Agent
By:/s/Xxxxxx X. Xxxxxx
Name:Xxxxxx Xxxxxx
Title:Senior Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Syndication Agent
By:/s/ Xxxxxx Xxxxx
Name:Xxxxxx Xxxxx
Title: Duly Authorized Signatory
"LENDERS"
BANK OF AMERICA, N.A.
By:/s/Xxxxxx X. Xxxxxx
Name:Xxxxxx Xxxxxx
Title:Senior Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION
By:/s/ Xxxxxx Xxxxx
Name:Xxxxxx Xxxxx
Title: Duly Authorized Signatory
85
ANNEX A
to
Credit Agreement
Definitions
Capitalized terms used in the DIP Financing Documents shall have the
following respective meanings (unless otherwise defined therein), and all
section references in the following definitions shall refer to sections of this
Agreement:
"Acceptable Plan" means a Chapter 11 Plan which provides for Full
Payment of any then unpaid Obligations on the sooner to occur of (i) the last
day of the DIP Term and (ii) the effective date of such Chapter 11 Plan, or
which is otherwise acceptable to Administrative Agent and each Lender, in their
sole and absolute discretion.
"Accommodation Payment" has the meaning specified in Section 3.9(d).
"Account Debtor" means each Person obligated in any way on or in
connection with an Account, Chattel Paper or General Intangible (including a
payment intangible).
"Accounts" means all of each Borrower's now owned or hereafter acquired
or arising accounts, as defined in the UCC, including any rights to payment for
the sale or lease of goods or rendition of services, whether or not they have
been earned by performance.
"Accounts Formula Amount" means, at any time, an amount equal to
eighty-five percent (85%) of the Net Amount of Eligible Accounts.
"ACH Transactions" means any cash management, disbursement or related
services, including overdrafts and the automatic clearing house transfer of
funds by Bank of America for the account of the Borrowers.
"Adequate Protection Claim" means the right of the holder of a secured
Claim against the Borrowers (or any of them) to receive periodic payments as
adequate protection under Sections 361 or 363 of the Bankruptcy Code.
"Administrative Agent" has the meaning specified in the Recitals to
this Agreement.
"Administrative Agent's Liens" means the Liens in the Collateral
granted to Administrative Agent, for the benefit of the Lenders, Bank of
America, and Administrative Agent pursuant to this Agreement, the other DIP
Financing Documents and the Financing Order.
"Administrative Agent-Related Persons" means Administrative Agent,
together with its Affiliates, and the officers, directors, employees, counsel,
representatives, agents and attorneys-in-fact of such Administrative Agent and
its Affiliates.
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person or which owns, directly or indirectly, five percent (5%) or
more of the outstanding equity interest of such Person. A Person shall be deemed
A-1
to control another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of the other Person, whether through the ownership of voting
securities, by contract, or otherwise.
"Agent Advances" has the meaning specified in Section 1.2(j).
"Agents" means, collectively, Administrative Agent and Syndication
Agent.
"Aggregate Revolver Outstandings" means, at any date of determination:
the sum of (a) the unpaid balance of Revolving Loans, (b) the aggregate amount
of Pending Revolving Loans, (c) one hundred percent (100%) of the aggregate
undrawn face amount of all outstanding Letters of Credit, and (d) the aggregate
amount of any unpaid reimbursement obligations in respect of Letters of Credit.
"Agreement" means the Post-Petition Credit Agreement to which this
Annex A is attached, as from time to time amended, modified or restated.
"Anniversary Date" means each anniversary of the Closing Date.
"Annual Business Plan" has the meaning specified in Section 5.2(f).
"Anti-Terrorism Laws" shall mean any laws relating to terrorism or
money laundering, including Executive Order No. 13224 and the USA Patriot Act.
"Applicable Margin" means
(i) with respect to Base Rate Revolving Loans and all
other Obligations (other than LIBOR Revolving Loans and the
Unused Line Fee), 0.75%;
(ii) with respect to LIBOR Revolving Loans, 2.75%.;
and
(iii) with respect to the Unused Line Fee, 0.50%.
"Asset Disposition" means any disposition, whether by sale, lease,
assignment, or other transfer of (i) any of the assets of an Obligor and (ii)
any of the capital stock, securities or investments exchangeable, exercisable,
or convertible for or into, or otherwise entitling the holder to receive, any of
the capital stock of any Subsidiary (other than a disposition to an Obligor).
"Asset Purchase Commitment" means the Asset Purchase Agreement as in
effect on the date hereof (or as the same may be amended in a manner acceptable
to Lenders) pursuant to which the Proposed Purchaser has agreed to purchase all
or substantially all of the assets of the Borrowers in a sale conducted under
Section 363 of the Bankruptcy Code.
"Assignee" has the meaning specified in Section 11.2(a).
"Assignment and Acceptance" has the meaning specified in Section
11.2(a).
A-2
"Attorney Costs" means and includes all reasonable fees, expenses and
disbursements of any law firm or other counsel engaged by Administrative Agent
and the reasonably allocated costs and expenses of internal legal services of
Administrative Agent.
"Availability" means, at any time, (a) the lesser of (i) the Maximum
Revolver Amount at such time and (ii) the Borrowing Base at such time, minus, in
each case, (b) the Aggregate Revolver Outstandings at such time.
"Availability Reserve" means, at any time, an amount equal to the sum
of (i) the Carve-Out Reserve; (ii) the Cash Collateral Reserve; (iii) the
Environmental Compliance Reserve; (iv) reserves established by Administrative
Agent for accrued, unpaid interest on the Obligations, for rent at leased
locations subject to statutory or contractual landlord Liens, for unpaid custom
charges and, for warehouseman's or bailee's charges; (v) reserves for Inventory
shrinkage; and (vi) such other reserves as Administrative Agent may establish
from time to time in the exercise of its reasonable credit judgment.
"Avoidance Claim" means any claim that could be asserted by or on
behalf of a Borrower or its Estate against a Person under 11 U.S.C. xx.xx.
502(d), 544, 545, 547, 548, 549, 550, 551 or 553.
"Bank of America" means Bank of America, N.A., a national banking
association, or any successor entity thereto.
"Bank Products" means any one or more of the following types of
services or facilities extended after the Petition Date to the Borrowers by Bank
of America or any affiliate of Bank of America: (i) credit cards; (ii) ACH
Transactions; and (iii) Hedge Agreements.
"Bankruptcy Code" means Title 11 of the United States Code (11 X.X.X.xx
101 et seq.).
"Base Rate" means, for any day, the rate of interest in effect for such
day as publicly announced from time to time by Bank of America in Charlotte,
North Carolina as its "prime rate" (the "prime rate" being a rate set by Bank of
America based upon various factors, including Bank of America's costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate). Any change in the prime rate announced by Bank of America
shall take effect at the opening of business on the day specified in the public
announcement of such change. Each Interest Rate based upon the Base Rate shall
be adjusted simultaneously with any change in the Base Rate.
"Base Rate Revolving Loan" means a Revolving Loan during any period in
which it bears interest based on the Base Rate.
"Blocked Person" shall have the meaning ascribed to it in Section
6.30(b).
"Bond Trustee" The Bank of New York, as trustee under the Senior
Debentures for the holders of the Senior Debentures.
"Borrowers' Agent" has the meaning specified in Section 1.2(k).
A-3
"Borrowing" means a borrowing hereunder consisting of Revolving Loans
made on the same day by the Lenders to the Borrowers or by Bank of America in
the case of a Borrowing funded by Non-Ratable Loans or by Administrative Agent
in the case of a Borrowing consisting of an Agent Advance, or the issuance of
Letters of Credit hereunder.
"Borrowing Base" means, at any time, an amount equal to (i) the sum of
the Accounts Formula Amount and the Inventory Formula Amount at such time, minus
(ii) the Availability Reserve at such time.
"Borrowing Base Certificate" means a certificate by a Responsible
Officer of the Borrowers, substantially in the form of Exhibit A (or another
form acceptable to Administrative Agent) setting forth the calculation of the
Borrowing Base, including a calculation of each component thereof, all in such
detail as shall be reasonably satisfactory to Administrative Agent. All
calculations of the Borrowing Base in connection with the preparation of any
Borrowing Base Certificate shall originally be made by the Borrowers and
certified to Administrative Agent, provided that Administrative Agent shall have
the right to review and adjust, in the exercise of its reasonable credit
judgment, any such calculation (1) to reflect its reasonable estimate of
declines in value of any of the Collateral described therein, and (2) to the
extent that such calculation is not in accordance with this Agreement.
"Budget" means the "Budget" as defined in the Pre-Petition Secured
Party Protection Order as such Budget is in effect on the date of this
Agreement, with such amendments or modifications thereto or extensions or
supplements thereof as may be approved by the Pre-Petition Secured Parties or
otherwise approved by the Court, and which shall set forth in a separate line
item transfers to be made or expenses to be paid by any Borrower to any domestic
Subsidiary of a Borrower that is not itself a Borrower (other than
payroll-related expenses that are paid by a Borrower through such a Subsidiary
pursuant to Section 7.15(g) hereof).
"Business Day" means (a) any day that is not a Saturday, Sunday, or a
day on which banks in Atlanta, Georgia or Greensboro, North Carolina are
required or permitted to be closed, and (b) with respect to all notices,
determinations, fundings and payments in connection with the LIBOR Rate or LIBOR
Revolving Loans, any day that is a Business Day pursuant to clause (a) above and
that is also a day on which trading in Dollars is carried on by and between
banks in the London interbank market.
"Capital Adequacy Regulation" means any guideline, request or directive
of any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.
"Capital Expenditures" means all payments due (whether or not paid
during any fiscal period) in respect of the cost of any fixed asset or
improvement, or replacement, substitution, or addition thereto, which has a
useful life of more than one year, including those costs arising in connection
with the direct or indirect acquisition of such asset by way of increased
product or service charges or in connection with a Capital Lease.
A-4
"Capital Lease" means any lease of property by a Borrower which, in
accordance with GAAP, should be reflected as a capital lease on the balance
sheet of such Borrower.
"Carve-Out" means the "Carve-Out" consented to by Lenders under, and as
defined in, the Financing Order.
"Carve-Out Reserve" means an amount equal to $500,000.
"Cash Collateral" shall means all funds on deposit at any time in the
Cash Collateral Account.
"Cash Collateral Account" means a demand deposit account at Bank of
America, in the name of Administrative Agent and held for the benefit of
Administrative Agent and Lenders and subject to Administrative Agent's Liens,
for the purpose of holding Net Disposition Proceeds.
"Cash Collateral Reserve" means an amount equal, at any time, to the
aggregate amount of Net Disposition Proceeds that have been applied to the
Obligations from and after the Closing Date.
"Change of Control" means the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act) who is not a "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act) on the Petition Date becomes a
beneficial owner after the Petition Date, except that a person shall be deemed
to have "beneficial ownership" of all securities that such person has the right
to acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than 50% of the Voting Stock
of Cone Xxxxx; (b) Cone Xxxxx consolidates with, or merges with or into, another
person or sells, assigns, conveys, transfers, leases or otherwise disposes of
all or substantially all of its assets to any person or any person consolidates
with, or merges with or into, Cone Xxxxx, in any such event pursuant to a
transaction in which the outstanding Voting Stock of Cone Xxxxx is converted
into or exchanged for cash, securities, or other property, other than any such
transaction where (i) the outstanding Voting Stock of Cone Xxxxx is converted
into or exchanged for Voting Stock (other than Disqualified Stock) of the
surviving or transferee corporation or its parent corporation and (ii)
immediately after such transaction no "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act) is the "beneficial owner"
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
person shall be deemed to have a "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 50% of the total Voting Stock of the surviving or transferee corporation or
its parent corporation, as applicable; (c) individuals who on the Petition Date
constituted the board of directors of Cone Xxxxx (together with any new
directors whose election by such board or whose nomination for election by the
stockholders of Cone Xxxxx was approved by a vote of a majority of the directors
then still in office who were either directors on the Petition Date or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of such board then in office; or (d) Cone Xxxxx
shall fail to own, directly or indirectly, 100% of the outstanding capital stock
of each other Borrower.
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"Chapter 11 Cases" has the meaning specified in the Recitals to this
Agreement.
"Chapter 11 Plan" means a plan of liquidation or reorganization
proposed by Borrowers or any other Person (including Administrative Agent or any
Lender) in the Chapter 11 Cases.
"Chattel Paper" means all of the Borrowers' now owned or hereafter
acquired chattel paper, as defined in the UCC, including electronic chattel
paper.
"Claim" has the meaning given to it in Section 101 of the Bankruptcy
Code.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986.
"Collateral" means all of each Borrower's real and personal property,
whether now existing or hereafter created or acquired and whenever located,
except as specifically excluded under the Financing Order. The term "Collateral"
includes all of the property of each Borrower that is subject to Liens granted
and conferred under any of the Security Documents, including the Cash
Collateral. It is understood by the parties that real and personal property of
each Borrower is not all of the Collateral Security for the payment or
performance of the Obligations and that the payment and performance of the
Obligations is or may be from time to time secured by Liens upon real and
personal property of one or more of the Guarantors.
"Commitment" means, at any time with respect to a Lender, the principal
amount set forth beside such Lender's name under the heading "Commitment" on
Schedule 1.1 attached to this Agreement or on the signature page of the
Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 11.2, as such Commitment
may be adjusted from time to time in accordance with the provisions of Section
11.2, and "Commitments" means, collectively, the aggregate amount of the
commitments of all of the Lenders.
"Commitment Termination Date" means the date that is the soonest to
occur of the following (unless otherwise agreed in writing by Administrative
Agent and the Majority Lenders): (i) the last day of the DIP Term, (ii) the date
of entry of a Confirmation Order with respect to any Chapter 11 Plan (or the
effective date of any Chapter 11 Plan if either the Confirmation Order or the
Chapter 11 Plan provides that title to all of the assets of each Borrower's
Estate remains vested in such Estate until the effective date), (iii) the
effective date of any sale of all or a substantial part of the Collateral,
including the consummation of the Proposed Section 363 Sale, (iv) the date on
which this Agreement and the Commitments are terminated pursuant to Sections
7.11 or 9.2 of this Agreement or (v) the date on which the Borrowers elect to
terminate the DIP Facility pursuant to Section 3.2 of this Agreement.
"Committee" means a creditors' or equity security holders' committee
appointed in the Chapter 11 Cases by the United States Trustee.
"Cone Xxxxx" has the meaning specified in the Recitals to this
Agreement.
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"Cone Receivables" means Cone Receivables II, LLC, a North Carolina
limited liability company.
"Confirmation Order" means an order entered by the Court confirming a
Chapter 11 Plan.
"Contaminant" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in any form or condition, polychlorinated biphenyls
("PCBs"), or any constituent of any such substance or waste.
"Continuation/Conversion Date" means the date on which a Loan is
converted into or continued as a LIBOR Revolving Loan.
"Court" has the meaning specified in the Recitals to this Agreement.
"Credit Support" has the meaning specified in Section 1.3(a).
"Critical Vendor" means a Person who holds a Claim against a Borrower
on the Petition Date and whose ongoing provision of goods or services is
essential to one or more Borrowers' successful reorganization in the Chapter 11
Cases.
"Debt" means, without duplication, all liabilities, obligations and
indebtedness of a Borrower or a Subsidiary to any other Person, of any kind or
nature, now or hereafter owing, arising, due or payable, howsoever evidenced,
created, incurred, acquired or owing, whether primary, secondary, direct,
contingent, fixed or otherwise, consisting of indebtedness for borrowed money or
the deferred purchase price of property, excluding trade payables, but including
(a) all Obligations; (b) all obligations and liabilities of any Person secured
by any Lien on a Borrower's property, even though such Borrower shall not have
assumed or become liable for the payment thereof; provided, however, that all
such obligations and liabilities which are limited in recourse to such property
shall be included in Debt only to the extent of the book value of such property
as would be shown on a balance sheet of such Borrower prepared in accordance
with GAAP; (c) all obligations or liabilities created or arising under any
Capital Lease or conditional sale or other title retention agreement with
respect to property used or acquired by a Borrower, even if the rights and
remedies of the lessor, seller or lender thereunder are limited to repossession
of such property; provided, however, that all such obligations and liabilities
which are limited in recourse to such property shall be included in Debt only to
the extent of the book value of such property as would be shown on a balance
sheet of such Borrower prepared in accordance with GAAP; (d) all obligations and
liabilities under Guaranties; and (e) the present value (discounted at the Base
Rate) of lease payments due under synthetic leases.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured, waived, or otherwise
remedied during such time) constitute an Event of Default.
"Default Rate" means a fluctuating per annum interest rate at all times
equal to the sum of (a) the otherwise applicable Interest Rate under Section 2.1
plus (b) two percent (2%) per annum. Each Default Rate shall be adjusted
simultaneously with any change in the applicable Interest Rate. In addition, the
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Default Rate shall result in an increase in the Letter of Credit Fee by two (2)
percentage points per annum.
"Defaulting Lender" has the meaning specified in Section 12.15(c).
"Deposit Account" means "deposit account" as such term is defined in
the UCC, now or hereafter held in the name of a Borrower.
"Designated Account" has the meaning specified in Section 1.2(d).
"DIP Facility" has the meaning specified in Section 1.1.
"DIP Financing Documents" means this Agreement, the Financing Order,
the Patent, Trademark and Copyright Agreements, the Security Agreement, the
Mortgages, each Subsidiary Guaranty, each Subsidiary Security Agreement and any
other agreements, instruments, and documents heretofore, now or hereafter
evidencing, securing, guaranteeing or otherwise relating to the Obligations, the
Collateral, or any other aspect of the transactions contemplated by this
Agreement.
"DIP Motion" means the Motion of the Borrowers for approval of the
financing under the DIP Facility pursuant to this Agreement.
"DIP Term" means a period commencing on the date of entry of the
Financing Order and ending on the first anniversary thereof.
"Disqualified Stock" means, with respect to any Person, any capital
stock or other security of such Person which, by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable), or
upon the happening of any event, matures or is mandatorily redeemable (in each
case, other than into common stock of Cone Xxxxx), pursuant to a sinking fund
obligation or otherwise, or is exchangeable for Debt, or is redeemable at the
option of the holder thereof, in whole or in part, on or prior to the final
maturity date of the specified security. Notwithstanding the foregoing, in no
event shall any capital stock or other security that is considered Disqualified
Stock solely by reason of such capital stock or other security being convertible
at the option of the holder of such capital stock or other security into other
capital stock or other security (other than Disqualified Stock) constitute
Disqualified Stock.
"Distribution" means, in respect of any corporation: (a) the payment or
making of any dividend or other distribution of property in respect of capital
stock (or any options or warrants for, or other rights with respect to, such
stock) of such corporation, other than distributions in capital stock (or any
options or warrants for such stock) of the same class; or (b) the redemption or
other acquisition by such corporation of any capital stock (or any options or
warrants for such stock) of such corporation.
"Document" shall have the meaning given to "document" in the UCC, and,
in the case of each Borrower, includes all bills of lading, warehouse receipts
or other documents of title, now owned or hereafter acquired by the Borrowers.
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"DOL" means the United States Department of Labor or any successor
department or agency.
"Dollar" and "$" means dollars in the lawful currency of the United
States. Unless otherwise specified, all payments under the DIP Financing
Documents shall be made in Dollars.
"Eligible Accounts" means those Accounts which are owned by a Borrower
and arise from the sale of Goods in the Ordinary Course of Business of such
Borrower and which Administrative Agent, in the exercise of its reasonable
commercial discretion, determines to be Eligible Accounts. Without limiting the
reasonable commercial discretion of Administrative Agent to establish other
criteria of ineligibility, Eligible Accounts shall not, unless Administrative
Agent and the Majority Lenders in their sole discretion elect, include any
Account as an Eligible Account:
(a) with respect to which more than one hundred twenty (120)
days have elapsed since the date of the original invoice therefor or
which is more than sixty (60) days past due;
(b) with respect to which any of the representations,
warranties, covenants, and agreements contained in the Security
Agreement are incorrect or have been breached;
(c) with respect to which Account (or any other Account due
from such Account Debtor), in whole or in part, a check, promissory
note, draft, trade acceptance or other instrument for the payment of
money has been received, presented for payment and returned uncollected
for any reason;
(d) which represents a progress billing (as hereinafter
defined) or as to which a Borrower has extended the time for payment
without the consent of Administrative Agent; for the purposes hereof,
"progress billing" means any invoice for goods sold or leased or
services rendered under a contract or agreement pursuant to which the
Account Debtor's obligation to pay such invoice is conditioned upon
such Borrower's completion of any further performance under the
contract or agreement;
(e) with respect to which any one or more of the following
events has occurred and is continuing to the Account Debtor on such
Account: death or judicial declaration of incompetency of an Account
Debtor who is an individual; the filing by or against the Account
Debtor of a request or petition for liquidation, reorganization,
arrangement, adjustment of debts, adjudication as a bankrupt,
winding-up, or other relief under the bankruptcy, insolvency, or
similar laws of the United States, any state or territory thereof, or
any foreign jurisdiction, now or hereafter in effect; the making of any
general assignment by the Account Debtor for the benefit of creditors;
the appointment of a receiver or trustee for the Account Debtor or for
any of the assets of the Account Debtor, including the appointment of
or taking possession by a "custodian," as defined in the Bankruptcy
Code; the institution by or against the Account Debtor of any other
type of insolvency proceeding (under the bankruptcy laws of the United
States or otherwise) or of any formal or informal proceeding for the
dissolution or liquidation of, settlement of claims against, or winding
up of affairs of, the Account Debtor; the sale, assignment, or transfer
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of all or any material part of the assets of the Account Debtor; the
nonpayment generally by the Account Debtor of its debts as they become
due; or the cessation of the business of the Account Debtor as a going
concern;
(f) if fifty percent (50%) (or, in the case of Levi Xxxxxxx &
Co., 25%) or more of the aggregate Dollar amount of outstanding
Accounts owed at such time by the Account Debtor thereon is classified
as ineligible under clause (a) above;
(g) owed by an Account Debtor which: (i) does not maintain its
chief executive office in the United States of America, Canada, Puerto
Rico or, in the case only of Levi Xxxxxxx Europe S.A., countries in
Europe (provided that Accounts owing by Levi Xxxxxxx Europe S.A. shall
be Eligible Accounts only to the extent of $2,000,000 in aggregate
outstanding at any time and only if they are otherwise Eligible
Accounts hereunder); or (ii) is not organized under the laws of Puerto
Rico, the United States of America or Canada or any state or province
thereof (except in the case of Levi Xxxxxxx Europe S.A.); or (iii) is
the government of any foreign country or sovereign state, or of any
state, province, municipality, or other political subdivision thereof,
or of any department, agency, public corporation, or other
instrumentality thereof; except to the extent that such Account is
secured or payable by a letter of credit satisfactory to Administrative
Agent in its discretion;
(h) owed by an Account Debtor that is an Affiliate or employee
of a Borrower (and for avoidance of doubt, Parras Cone shall be deemed
an affiliate of Cone Xxxxx);
(i) except as provided in clause (k) below, with respect to
which either the perfection, enforceability, or validity of
Administrative Agent's Liens in such Account, or Administrative Agent's
right or ability to obtain direct payment to Administrative Agent of
the proceeds of such Account, is governed by any federal, state, or
local statutory requirements other than the Bankruptcy Code and those
of the UCC;
(j) owed by an Account Debtor to which such Borrower or any of
its Subsidiaries, is indebted in any way, or which is subject to any
right of setoff or recoupment by the Account Debtor, unless the Account
Debtor has entered into an agreement acceptable to Administrative Agent
to waive setoff rights; or if the Account Debtor thereon has disputed
liability or made any claim with respect to any other Account due from
such Account Debtor; but in each such case only to the extent of such
indebtedness, setoff, recoupment, dispute, or claim;
(k) owed by the government of the United States of America, or
any department, agency, public corporation, or other instrumentality
thereof, unless the Federal Assignment of Claims Act of 1940, as
amended (31 U.S.C. ss. 3727 et seq.), and any other steps necessary to
perfect Administrative Agent's Liens therein, have been complied with
to Administrative Agent's satisfaction with respect to such Account;
(l) owed by any state, municipality, or other political
subdivision of the United States of America, or any department, agency,
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public corporation, or other instrumentality thereof and as to which
Administrative Agent determines that its Lien therein is not or cannot
be perfected;
(m) which represents a sale on a xxxx-and-hold, guaranteed
sale, sale and return, sale on approval, consignment, or other
repurchase or return basis (unless, in the case of a xxxx-and-hold
sale, the purchaser has signed in favor of Administrative Agent an
agreement, acceptable to Administrative Agent, in its sole discretion,
regarding such purchaser's unconditional payment undertaking);
(n) which is evidenced by a promissory note or other
instrument or by Chattel Paper;
(o) if Administrative Agent believes, in the exercise of its
reasonable judgment, that the prospect of collection of such Account is
impaired or that the Account may not be paid by reason of the Account
Debtor's financial inability to pay;
(p) with respect to which the Account Debtor is located in any
state requiring the filing of a Notice of Business Activities Report or
similar report in order to permit such Borrower to seek judicial
enforcement in such State of payment of such Account, unless such
Borrower has qualified to do business in such state or has filed a
Notice of Business Activities Report or equivalent report for the then
current year;
(q) which arises out of a sale not made in the Ordinary Course
of Business of such Borrower;
(r) with respect to which the Goods giving rise to such
Account have not been shipped and delivered to and accepted by the
Account Debtor or the services giving rise to such Account have not
been performed by the Borrower, and, if applicable, accepted by the
Account Debtor, or the Account Debtor revokes its acceptance of such
Goods or services;
(s) owed by an Account Debtor which is obligated to the
Borrowers respecting Accounts the aggregate unpaid balance of which
exceeds fifteen percent (15%) (or, in the case of Levi Xxxxxxx & Co.,
40%) of the aggregate unpaid balance of all Eligible Accounts owed to
the Borrowers at such time by all of the Borrowers' Account Debtors,
but only to the extent of such excess; or
(t) which is not subject to a first priority and perfected
security interest in favor of Administrative Agent for the benefit of
Administrative Agent and the Lenders or is subject to any other Lien,
except Liens described in clauses (a) and (g) in the definition of
"Permitted Liens," provided that such Permitted Liens do not impair
directly or indirectly the ability of Administrative Agent to realize
on or obtain the full benefit of the Collateral.
If any Account at any time ceases to be an Eligible Account, then such Account
shall promptly be excluded from the calculation of Eligible Accounts.
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"Eligible Assignee" means (a) a commercial bank, commercial finance
company, fund or other asset based lender, having total assets in excess of
$100,000,000 that is engaged in making, purchasing or otherwise investing in
commercial loans in the Ordinary Course of Business of such Person and which
shall represent to the satisfaction of Administrative Agent, in its reasonable
discretion, that such Person has the immediate financial resources and
functional capability of performing all actions required of a Lender pursuant to
the DIP Financing Documents, including funding and indemnification requirements;
(b) any Lender listed on the signature page of this Agreement; (c) any Affiliate
of a Lender; and (d) if an Event of Default has occurred and is continuing, any
Person reasonably acceptable to Administrative Agent.
"Eligible Inventory" means Inventory of a Borrower which consists of
raw materials or finished goods and which Administrative Agent, in its
reasonable discretion, determines to be Eligible Inventory. Without limiting the
discretion of Administrative Agent to establish other criteria of ineligibility,
Eligible Inventory shall not, unless Administrative Agent and the Majority
Lenders in their sole discretion elect, include any Inventory:
(a) that is not owned by a Borrower;
(b) that is not subject to Administrative Agent's Liens, which
are perfected as to such Inventory, or that are subject to any other
Lien whatsoever (other than the Liens described in clauses (a), (d),
(g) or (i) of the definition of "Permitted Liens," provided that such
Permitted Liens (i) are junior in priority to Administrative Agent's
Liens (except for Permitted Liens securing pre-Petition Date property
taxes) and (ii) do not impair directly or indirectly the ability of
Administrative Agent to realize on or obtain the full benefit of the
Collateral);
(c) that consists of work-in-process or chemicals, samples,
prototypes, supplies, or packing and shipping materials;
(d) that is not in good condition, is unmerchantable, or does
not meet all standards imposed by any Governmental Authority, having
regulatory authority over such goods, their use or sale;
(e) that is not currently either usable or salable, at prices
approximating at least cost, in the normal course of the Borrowers'
business, or that is slow moving or stale;
(f) that is obsolete or repossessed by a Borrower or used
Goods taken in trade;
(g) that is located outside the United States of America (or
that is in-transit from vendors or suppliers);
(h) that is located in a public warehouse or in possession of
a bailee or processor (including a so-called "cut-and-sew" operator) or
in a facility leased by a Borrower, if the warehouseman, or the bailee
or processor, or the lessor has not delivered to Administrative Agent,
if requested by Administrative Agent, a subordination agreement in form
and substance satisfactory to Administrative Agent;
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(i) that contains or bears any Proprietary Rights licensed to
a Borrower pursuant to a License Agreement, if Administrative Agent is
not satisfied that it may sell or otherwise dispose of such Inventory
in accordance with the terms of the Security Agreement and Section 9.2
without infringing the rights of the licensor of such Proprietary
Rights or violating the License Agreement with such licensor (and
without payment of any royalties other than any royalties due with
respect to the sale or disposition of such Inventory pursuant to the
existing License Agreement), and, as to which such Borrower has not
delivered to Administrative Agent a consent or sublicense agreement
from such licensor in form and substance acceptable to Administrative
Agent if requested;
(j) that is not reflected in the details of a current
perpetual inventory report or the existence of which is not otherwise
accounted for to the satisfaction of Administrative Agent; or
(k) that is Inventory placed on consignment.
If any Inventory at any time ceases to be Eligible Inventory, such Inventory
shall promptly be excluded from the calculation of Eligible Inventory.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for a Release or
injury to the environment.
"Environmental Compliance Reserve" means any reserve that
Administrative Agent establishes in its reasonable discretion after prior
written notice to the Borrowers from time to time for amounts that are
reasonably likely to be expended by any Obligor in order for such Obligor to
comply with any notice from a Governmental Authority asserting material
non-compliance with Environmental Laws or to correct any such material
non-compliance.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, licenses, authorizations and permits of,
and agreements with, any Governmental Authority, in each case relating to
environmental, health, safety and land use matters.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (a) any liability under Environmental Laws, or (b) damages arising
from, or costs incurred by such Governmental Authority in response to, a Release
or threatened Release of a Contaminant into the environment.
"Equipment" means all of the Borrowers' now owned and hereafter
acquired machinery, equipment, furniture, furnishings, fixtures, and other
tangible personal property (except Inventory), including embedded software,
motor vehicles with respect to which a certificate of title has been issued,
aircraft, dies, tools, jigs, molds and office equipment, as well as all of such
types of property leased by any Borrower and all of the Borrowers' rights and
interests with respect thereto under such leases (including options to
purchase); together with all present and future additions and accessions
thereto, replacements therefor, component and auxiliary parts and supplies used
or to be used in connection therewith, and all substitutes for any of the
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foregoing, and all manuals, drawings, instructions, warranties and rights with
respect thereto; wherever any of the foregoing is located.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with a Borrower within the meaning of Section
414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes
of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan, (b) a withdrawal by a Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations which is treated as such a withdrawal under Section 4062(e) of
ERISA, (c) a complete or partial withdrawal by any Borrower or any ERISA
Affiliate from a Multi-Employer Plan, (d) the filing of a notice of intent to
terminate, the treatment of a Plan amendment as a termination under Section
4041(a)(2) of ERISA, or the commencement of proceedings by the PBGC to terminate
a Pension Plan or Multi-Employer Plan], (e) the occurrence of an event or
condition which might reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan.
"Estate" means the estate created in each Chapter 11 Case pursuant to
11 X.X.X.xx. 541(a).
"Event of Default" has the meaning specified in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"Executive Order No. 13224" shall mean Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, as the same has been, or
shall hereafter be, renewed, extended, amended or replaced.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers on such day, as published by
the Federal Reserve Bank of Georgia on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to Bank of America on
such day on such transactions as determined by Administrative Agent.
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"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"Final Order" shall mean an order or judgment of a court of competent
jurisdiction as entered on its docket that has not been reversed, stayed
pursuant to Bankruptcy Rule 8005 or any other applicable rule of civil or
appellate procedure, modified or amended, and as to which the time to appeal,
petition for certiorari, or seek reargument or rehearing has expired, and as to
which no notice of appeal, petition for certiorari or motion for reargument or
rehearing was timely filed, or as to which any right to appeal, petition for
certiorari or seek reargument or rehearing has been waived in writing in a
manner satisfactory to Agent or, if a notice of appeal, petition for certiorari
or motion for reargument or rehearing was timely filed, the order or judgment
has been affirmed by the highest court to which the order or judgment was
appealed or from which the reargument or rehearing was sought, or certiorari has
been denied, and the time to file any further appeal or to petition for
certiorari or to seek further reargument or rehearing has expired.
"Financial Statements" means, according to the context in which it is
used, the financial statements referred to in Sections 5.2 and 6.6 or any other
financial statements required to be given to the Lenders pursuant to this
Agreement.
"Financing Order" means an order that is entered by the Court pursuant
to Section 364(c) and (d) of the Bankruptcy Code and Bankruptcy Rule 4001(c),
which authorizes the incurrence by Borrowers of post-petition secured
indebtedness under the DIP Facility in accordance with the DIP Financing
Documents, confers status as a Superpriority Claim upon all of the Obligations,
and is otherwise in form and substance satisfactory in all respects to
Administrative Agent and the Lenders.
"Fiscal Month" means each of the twelve (12) consecutive four- or
five-week periods beginning on the first day of the Fiscal Year, in the pattern
4, 4, 5 within a Fiscal Quarter.
"Fiscal Quarter" means each of the four consecutive periods of thirteen
(13) weeks, beginning on the first day of the Fiscal Year.
"Fiscal Year" means, with respect to the Borrowers' fiscal year 2003,
the fiscal period of the Borrowers and their Subsidiaries ending on December 28,
2003, and, with respect to fiscal year 2004, the fiscal year ending on January
2, 2005, and, with respect to fiscal year 2005, the fiscal year ending on
January 1, 2006.
"Fixed Assets" means the Equipment and Real Estate of the Borrowers.
"Fixed Asset Loss Proceeds" has the meaning specified in Section
7.6(b).
"Food Security Act" means, the Food Security Act, 7 U.S.C.ss.1631.
"Foreign Subsidiaries" means, collectively, each Subsidiary of a
Borrower that is organized under the laws of a jurisdiction outside the United
States.
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"Foreign Subsidiary Advances" means a loan, advance or other extension
of credit by a Borrower to or for the benefit of any Foreign Subsidiary,
including (i) the procuring of a Letter of Credit for the account of a Borrower
to support or secure indebtedness of such Foreign Subsidiary or to otherwise
benefit such Foreign Subsidiary (the original face amount of any such Letter of
Credit being the amount of the Foreign Subsidiary Advance attributable thereto)
and (ii) all amounts paid under any Guaranty from a Borrower with respect to
indebtedness (including indebtedness owing to trade creditors) of such Foreign
Subsidiary.
"Fronting Fee" has the meaning specified in Section 2.6.
"Full Payment" means with respect to any Obligation, the full and final
payment of such Obligation in cash or immediately available funds; in the case
of any contingent Obligation that exists by virtue of an outstanding undrawn
Letter of Credit, Administrative Agent's receipt of either cash or a direct pay
letter of credit naming Administrative Agent as beneficiary and in form and
substance, and from an issuing bank, acceptable to Administrative Agent, in each
case in an amount not less than 105% of the aggregate amount of all such
contingent Obligations; and, in the case of any other contingent Obligation
(including any indemnity Obligation) in respect of which a demand for payment
has been made, the provision to Administrative Agent and the Lenders of adequate
assurances by the Borrowers of their covenant to indemnify Administrative Agent
and the Lenders.
"Funding Date" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles and practices set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of the
Closing Date.
"GE Capital" means General Electric Capital Corporation, a Delaware
corporation.
"General Intangibles" means all of the Borrowers' now owned or
hereafter acquired general intangibles, choses in action and causes of action
and all other intangible personal property of the Borrowers of every kind and
nature (other than Accounts), including all contract rights, payment
intangibles, Proprietary Rights, corporate or other business records,
inventions, designs, blueprints, plans, specifications, patents, patent
applications, trademarks, service marks, trade names, trade secrets, goodwill,
copyrights, computer software, customer lists, registrations, licenses,
franchises, tax refund claims, any funds which may become due to a Borrower in
connection with the termination of any Plan or other employee benefit plan or
any rights thereto and any other amounts payable to a Borrower from any Plan or
other employee benefit plan, rights and claims against carriers and shippers,
rights to indemnification, business interruption insurance and proceeds thereof,
property, casualty or any similar type of insurance and any proceeds thereof,
proceeds of insurance covering the lives of key employees on which a Borrower is
beneficiary, rights to receive dividends, distributions, cash, Instruments and
other property in respect of or in exchange for pledged equity interests or
A-16
Investment Property and any letter of credit, guarantee, claim, security
interest or other security held by or granted to a Borrower.
"Goods" means all "goods" as defined in the UCC, now owned or hereafter
acquired by a Borrower, wherever located, including embedded software to the
extent included in "goods" as defined in the UCC, manufactured homes, standing
timber that is cut and removed for sale and unborn young of animals.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guaranty" means, with respect to any Person, all obligations of such
Person which in any manner directly or indirectly guarantee or assure, or in
effect guarantee or assure, the payment or performance of any indebtedness,
dividend or other obligations of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including any such obligations
incurred through an agreement, contingent or otherwise: (a) to purchase the
guaranteed obligations or any property constituting security therefor; (b) to
advance or supply funds for the purchase or payment of the guaranteed
obligations or to maintain a working capital or other balance sheet condition;
or (c) to lease property or to purchase any debt or equity securities or other
property or services.
"Hedge Agreement" means any and all transactions, agreements or
documents now existing or hereafter entered into, which provides for an interest
rate, credit, commodity or equity swap, cap, floor, collar, forward foreign
exchange transaction, currency swap, cross currency rate swap, currency option,
or any combination of, or option with respect to, these or similar transactions,
for the purpose of hedging the Borrowers' exposure to fluctuations in interest
or exchange rates, loan, credit exchange, security or currency valuations or
commodity prices.
"Indemnified Liabilities" has the meaning specified in Section
13.11(a).
"Indemnified Party" means a Person that is: (i) an Administrative
Agent-Related Person, (ii) Syndication Agent or an officer, agent, director,
successor, assign or Affiliate of Syndication Agent; or (iii) a Lender or an
officer, agent, director, successor, assign or Affiliate of a Lender.
"Initial Lender" means, collectively, Bank of America and each other
Person, if any, that is a "Lender" hereunder on the Closing Date.
"Instruments" means all instruments as such term is defined in the UCC,
now owned or hereafter acquired by a Borrower.
"Interest Period" means, as to any LIBOR Revolving Loan, the period
commencing on the Funding Date of such Loan or on the Continuation/Conversion
Date on which the Loan is converted into or continued as a LIBOR Revolving Loan,
and ending on the date one, two, three or six months thereafter as selected by
the Borrowers in their Notice of Borrowing, in the form attached hereto as
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Exhibit B or Notice of Continuation/Conversion, in the form attached hereto as
Exhibit C provided that:
(a) if any Interest Period would otherwise end on a day that
is not a Business Day, that Interest Period shall be extended to the
following Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the preceding Business Day;
(b) any Interest Period pertaining to a LIBOR Revolving Loan
that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period;
and
(c) no Interest Period shall extend beyond the last day of the
DIP Term.
"Interest Rate" means each or any of the interest rates, including the
Default Rate, set forth in Section 2.1.
"Inventory" shall have the meaning given to "inventory" in the UCC.
"Inventory Formula Amount" means, on any date of determination, (a)
prior to Administrative Agent's receipt of an acceptable appraisal of the net
orderly liquidation value of the Borrowers' Inventory, an amount equal to the
lesser of (i) the Maximum Inventory Loan Amount and (ii) forty percent (40%) of
the Value of Eligible Inventory; and (b) after Administrative Agent's receipt of
an acceptable appraisal of the net orderly liquidation value of the Borrowers'
Inventory and the entry of the Final Financing Order, an amount equal to the
lesser of (i) the Accounts Formula Amount on such date and (ii) the lesser of
(A) sixty-five percent (65%) of the Value of Eligible Inventory and (B) the
Inventory NOLV Factor in effect on such date multiplied by the Value of Eligible
Inventory.
"Inventory NOLV Factor" means, at any time, a fraction, the numerator
of which is equal to eighty-five percent (85%) of the orderly liquidation value,
net of liquidation expenses, of the Borrowers' Eligible Inventory and the
denominator of which is the Value of such Eligible Inventory, in each case as
most recently determined and reported on by a qualified independent appraiser
selected by Administrative Agent or, at Administrative Agent's election, by
professional appraisers employed by Administrative Agent.
"Investment Property" means all of the Borrowers' right title and
interest in and to any and all: (a) securities whether certificated or
uncertificated; (b) securities entitlements; (c) securities accounts; (d)
commodity contracts; or (e) commodity accounts.
"IRS" means the Internal Revenue Service and any Governmental Authority
succeeding to any of its principal functions under the Code.
"KERP" means a key employee retention program proposed by a Borrower
with respect to its officers and employees.
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"Latest Projections" means: (a) on the Closing Date and thereafter
until Administrative Agent receives a new Annual Business Plan pursuant to
Section 5.2(f), the latest quarterly forecast of the Borrowers that is delivered
to Administrative Agent; and (b) thereafter, the Annual Business Plan most
recently received by Administrative Agent pursuant to Section 5.2(f).
"Lender" and "Lenders" have the meanings specified in the introductory
paragraph hereof and shall include Administrative Agent to the extent of Agent
Advance outstanding and Bank of America to the extent of any Non-Ratable Loan
outstanding; provided that no such Agent Advance or Non-Ratable Loan shall be
taken into account in determining any Lender's Pro Rata Share. If and for so
long as Bank of America is the sole Lender under this Agreement, all references
to "Lender" or "Lenders" shall mean Bank of America.
"Letter of Credit" has the meaning specified in Section 1.3(a).
"Letter of Credit Fee" has the meaning specified in Section 2.6.
"Letter of Credit Issuer" means Bank of America, any affiliate of Bank
of America or any other financial institution that is designated by
Administrative Agent as an authorized issuer of a Letter of Credit pursuant to
this Agreement.
"Letter of Credit Issuer Amounts" has the meaning specified in Section
2.6.
"Letter of Credit Subfacility" means $10,000,000.
"LIBOR Interest Payment Date" means, with respect to a LIBOR Revolving
Loan, the Commitment Termination Date, the last day of each Interest Period
applicable to such Loan and, with respect to each Interest Period of greater
than one month, on the first day of each month during such Interest Period.
"LIBOR Rate" means, for any Interest Period, with respect to LIBOR
Revolving Loans, the rate of interest per annum determined pursuant to the
following formula:
LIBOR Rate = Offshore Base Rate
----------------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Offshore Base Rate" means the rate per annum appearing on
Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 o'clock
a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the Offshore Base Rate shall be,
for any Interest Period, the rate per annum appearing on Reuters Screen
LIBO Page as the London interbank offered rate for deposits in Dollars
at approximately 11:00 o'clock a.m. (London time) two (2) Business Days
prior to the first day of such Interest Period for a term comparable to
such Interest Period; provided, however, if more than one rate is
specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates. If for any reason none of the
foregoing rates is available, the Offshore Base Rate shall be, for any
Interest Period, the rate per annum determined by Administrative Agent
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as the rate of interest at which dollar deposits in the approximate
amount of the LIBOR Revolving Loan comprising part of such Borrowing
would be offered by Bank of America's London Branch to major banks in
the offshore dollar market at their request at or about 11:00 o'clock
a.m. (London time) two (2) Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period.
"Eurodollar Reserve Percentage" means, for any day during any
Interest Period, the reserve percentage (expressed as a decimal,
rounded upward to the next 1/100th of 1%) in effect on such day
applicable to member banks under regulations issued from time to time
by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities"). The Offshore Rate for each
outstanding LIBOR Revolving Loan shall be adjusted automatically as of
the effective date of any change in the Eurodollar Reserve Percentage.
"LIBOR Revolving Loan" means a Revolving Loan during any period in
which it bears interest based on the LIBOR Rate.
"License Agreement" means an agreement between one or more Borrowers
and another Person pursuant to which such other Person (the "licensor") licenses
to a Borrower the right to use such licensor's Proprietary Rights in connection
with such Borrower's manufacturing, marketing, sale or other distribution of
Goods.
"Lien" means: (a) any interest in property securing an obligation owed
to, or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute, or contract, and including a
security interest, charge, claim, or lien arising from a mortgage, deed of
trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement,
agreement, security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes; (b) to the extent not included
under clause (a), any reservation, exception, encroachment, easement,
right-of-way, covenant, condition, restriction, lease or other title exception
or encumbrance affecting property; and (c) any contingent or other agreement to
provide any of the foregoing.
"Loan Account" means the loan account of the Borrowers, which account
shall be maintained by Administrative Agent.
"Loans" means, collectively, all loans and advances provided for in
Article 1.
"Majority Lenders" means, at any date of determination, Lenders whose
Pro Rata Shares aggregate more than 50%.
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the Collateral or the operations, business,
properties, condition (financial or otherwise) or prospects of the Borrowers
taken as a whole; (b) a material impairment of the ability of any Borrower to
A-20
perform under any DIP Financing Document to which it is a party; or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against any Borrower of any DIP Financing Document to which it is
a party; provided, however, that the commencement of the Chapter 11 Cases or the
application to the Borrowers of the provisions of the Bankruptcy Code and the
Rules of Bankruptcy Procedure shall not, in and of themselves, be deemed to have
a Material Adverse Effect.
"Maximum Inventory Loan Amount" means $15,000,000.
"Maximum Revolver Amount" means $45,000,000.
"Mortgages" means and includes any and all of the mortgages, deeds of
trust, deeds to secure debt, assignments and other instruments to be executed
and delivered by the Borrowers to or for the benefit of Administrative Agent and
by which Administrative Agent, on behalf of the Lenders, acquires a Lien on the
Real Estate, and all amendments, modifications and supplements thereto.
"Multi-Employer Plan" means a "multi-employer plan" as defined in
Section 4001(a)(3) of ERISA which is or was at any time during the current year
or the immediately preceding six (6) years contributed to by a Borrower or any
ERISA Affiliate.
"Net Amount of Eligible Accounts" means, at any time, the gross amount
of Eligible Accounts less (to the extent not already deducted in determining the
amount of Eligible Accounts) all sales, excise or similar taxes, and less
returns, discounts, claims, credits and allowances, accrued rebates, offsets,
deductions, counterclaims, disputes and other defenses of any nature at any time
issued, owing, granted, outstanding, available or claimed.
"Net Disposition Proceeds" shall mean, collectively, Net Fixed Asset
Disposition Proceeds and Fixed Asset Loss Proceeds.
"Net Fixed Asset Disposition Proceeds" means, with respect to any sale
or other disposition of Fixed Assets, the net proceeds received in respect
thereof, net of (i) brokerage or sales commissions payable in connection with
such disposition and (ii) any amount necessary to pay or settle any Lien upon
any assets that are being sold or otherwise disposed of to the extent that such
Lien is legal, valid, perfected and unavoidable or is disputed and proceeds are
required to be escrowed by the Court pending resolution of such dispute.
"Non-Ratable Loan" and "Non-Ratable Loans" have the meanings specified
in Section 1.2(i).
"Notice of Borrowing" has the meaning specified in Section 1.2(b).
"Notice of Continuation/Conversion" has the meaning specified in
Section 2.2(b).
"Obligations" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by the Borrowers to
Administrative Agent and/or any Lender, arising under or pursuant to this
Agreement or any of the other DIP Financing Documents, whether or not evidenced
by any note, or other instrument or document, whether arising from an extension
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of credit, opening of a letter of credit, acceptance, loan, guaranty,
indemnification or otherwise, whether direct or indirect, absolute or
contingent, due or to become due, primary or secondary, as principal or
guarantor, and including all principal, interest, charges, expenses, fees,
attorneys' fees, filing fees and any other sums chargeable to the Borrowers
hereunder or under any of the other DIP Financing Documents. "Obligations"
includes, without limitation, (a) all debts, liabilities, and obligations now or
hereafter arising from or in connection with the Letters of Credit, (b) all
Loans, (c) all Agent Advances, and (d) all debts, liabilities and obligations
now or hereafter arising from or in connection with Bank Products.
"Obligor" means each Borrower, each Subsidiary Guarantor and each other
Person that is at any time liable for the payment of the whole or any part of
the Obligations or that has granted in favor of Administrative Agent, for the
benefit of the Lenders, a Lien upon any of any of such Person's assets to secure
payment of any of the Obligations.
"Ordinary Course of Business" means, with respect to any Person, the
ordinary course of such Person's business, as conducted by such Person in
accordance with past practices and undertaken by such Person in good faith and
not for the purpose of evading any covenant or restriction in any DIP Financing
Document or Pre-Petition Loan Document.
"Other Taxes" means any present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies which arise from
any payment made hereunder or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or any other DIP Financing
Documents.
"Overadvance Condition" means and shall be deemed to exist at any time
(a) the sum of (i) the aggregate outstanding principal amount of Revolving
Loans, (ii) one hundred percent (100%) of the aggregate undrawn face amount of
all outstanding Letters of Credit, and (iii) the aggregate amount of all unpaid
reimbursement obligations in respect of Letters of Credit exceeds (b) the lesser
of (i) the Maximum Revolver Amount and (ii) the Borrowing Base.
"Parras Cone" means Parras Cone de Mexico, S.A., a joint venture of
Cone Xxxxx Mexico S.A. de C.V., a corporation organized and existing under the
laws of Mexico substantially all of the capital stock of which is owned by Cone
Xxxxx, and Compania Industrial xx Xxxxxx, X.X. de C.V., a corporation organized
and existing under the laws of Mexico.
"Participant" means any Person who shall have been granted the right by
any Lender to participate in the financing provided by such Lender under this
Agreement, and who shall have entered into a participation agreement in form and
substance satisfactory to such Lender.
"Patent, Trademark and Copyright Agreements" means, collectively, the
Patent Security Agreements, Trademark Security Agreements and Copyright Security
Agreements to be executed and delivered by the Borrowers or a Subsidiary of a
Borrower to Administrative Agent to evidence and perfect Administrative Agent's
security interest in the Borrowers' present and future patents, trademarks,
copyrights and related licenses and rights, for the benefit of Administrative
Agent and the Lenders.
"Paying Borrower" has the meaning specified in Section 3.9(d).
A-22
"Payment Account" means each bank account established pursuant to the
Security Agreement, to which the proceeds of Accounts and other Collateral are
deposited or credited, and which is maintained in the name of Administrative
Agent or in the name of a Borrower, as Administrative Agent may determine, on
terms acceptable to Administrative Agent.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to the functions thereof.
"Pending Revolving Loans" means, at any time, the aggregate principal
amount of all Revolving Loans requested in any Notice of Borrowing received by
Administrative Agent which have not yet been advanced.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which a Borrower sponsors, maintains, or to
which it makes, is making, or is obligated to make contributions, but shall not
include a Multi-Employer Plan.
"Permitted Asset Dispositions" means any of the following Asset
Dispositions (provided that the proceeds therefrom are cash, unless otherwise
agreed to by Administrative Agent in its discretion, and such cash is remitted
to Administrative Agent in accordance with this Agreement): (i) sales of
Inventory by a Borrower in the Ordinary Course of Business (subject, in the case
of a sale of Inventory to a Foreign Subsidiary, to the limitations contained in
Section 7.15); (ii) sales or other dispositions by a Borrower of Equipment that
is obsolete or no longer useable by such Borrower in its business with an
orderly liquidation value not to exceed, in aggregate, $2,000,000 in any Fiscal
Year; (iii) Asset Dispositions described in Schedule 7.9; (iv) an Asset
Disposition pursuant to the Proposed Section 363 Sale to the Proposed Purchaser
or to a Person submitting any higher or better bid, provided that such sale is
in conformity with the requirements of Section 7.11 hereof, and provided that,
in connection with any such sale Administrative Agent in its sole and absolute
discretion is satisfied that the cash proceeds to be remitted to Administrative
Agent in connection with the closing of such sale will be sufficient in amount
to result in Full Payment of the Obligations and any order approving such sale
requires Full Payment of the Obligations as a condition to closing; and (v)
other dispositions of property that are consented to in writing by
Administrative Agent and the Majority Lenders and approved by the Court.
"Permitted Liens" means:
(a) Liens for (i) taxes in existence on the Petition Date,
provided that the aggregate amount of such taxes (excluding sales,
license, withholding and property taxes) does not exceed in aggregate
$100,000, (ii) sales, license, withholding and property taxes in
existence on the Petition Date, and (iii) taxes incurred in the
Ordinary Course of Business of a Borrower after the Petition Date, but
in each case only if the payment of such taxes is not past due (or such
taxes are being Properly Contested) and such taxes do not create a Lien
superior to Administrative Agent's Liens with respect to the Collateral
(other than pre-Petition Date Liens);
(b) Administrative Agent's Liens;
A-23
(c) Liens consisting of deposits made in the Ordinary Course
of Business in connection with, or to secure payment of, obligations
under worker's compensation, unemployment insurance, social security
and other similar laws, or to secure the performance of bids, tenders
or contracts (other than for the repayment of Debt) or to secure
indemnity, performance or other similar bonds procured in the Ordinary
Course of Business for the performance of bids, tenders or contracts
(other than for the repayment of Debt) or to secure statutory
obligations (other than tax Liens or Liens arising under ERISA or
Environmental Liens) incurred in the Ordinary Course of Business or
surety or appeal bonds, or to secure indemnity, performance or other
similar bonds procured in the Ordinary Course of Business;
(d) Liens on Collateral of a Borrower securing the
pre-Petition Date and post-Petition Date claims or demands of
materialmen, mechanics, carriers, warehousemen, landlords and other
like Persons, provided that, in the case of any such Liens securing
post-Petition Date claims or demands of any such Person, such claims or
demands are either not past due or do not exceed $100,000 in aggregate;
(e) Liens constituting encumbrances in the nature of
reservations, exceptions, encroachments, easements, rights of way,
covenants running with the land, and other similar title exceptions or
encumbrances affecting any Real Estate; provided that they do not in
the aggregate materially detract from the value of the Real Estate or
materially interfere with its use in the ordinary conduct of any
Borrower's business;
(f) Liens arising after the Petition Date from judgments and
attachments in connection with court proceedings, provided that the
attachment or enforcement of such Liens would not result in an Event of
Default hereunder, such Liens are at all times junior to the Liens in
favor of Administrative Agent, and the Claims secured by such Liens are
being Properly Contested, the claims in respect of such Liens are fully
covered by insurance (subject to ordinary and customary deductibles)
and a stay of execution pending appeal or proceeding for review is in
effect;
(g) Liens in existence on the Petition Date in favor of either
of the Pre-Petition Collateral Agents, for the benefit of any of the
Pre-Petition Secured Parties, and Liens granted in favor of the
Pre-Petition Collateral Agents as adequate protection pursuant to the
Pre-Petition Secured Party Protection Order;
(h) Purchase Money Liens and Liens under Capital Leases
securing Debt that is permitted under Section 7.13 hereof;
(i) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of Goods and other Liens incurred in the Ordinary
Course of Business of the Borrowers in favor of the United States of
America or any State thereof, or any department, agency or
instrumentality or political subdivision of the United States of
America or any State thereof, to secure partial, progress, advance or
other payments pursuant to any contract, to the extent such duties and
payments are paid when due and payable by the Borrowers;
A-24
(j) Liens incurred in the Ordinary Course of Business of the
Borrowers to secure performance under cotton futures contracts in
connection with transactions or positions in a contract for future
delivery of cotton, provided that reserves in accordance with GAAP have
been provided on the books of the Borrower who incurred such Liens and
such Liens are at all times junior in priority to Administrative
Agent's Liens;
(k) Liens in favor of Cone Receivables with respect to
Purchased Receivables and Related Assets purchased by Cone Receivables
from Cone Xxxxx prior to the Closing Date and prior to any repurchase
of the Receivables and Related Assets by Cone Xxxxx; and
(l) Liens in existence on the Petition Date (other than Liens
described in clause (g) above) and shown on Schedule 7.18.
In no event shall any Lien be deemed to be a Permitted Lien if (a) it is in
favor of Cone Receivables or any of its assignees, including GE Capital, with
respect to any Accounts arising after the Closing Date or (b) it is a Lien filed
by the PBGC or arising under ERISA, regardless of the date on which such Lien
arises or is filed.
"Permitted Variance" means, with reference to the expenditures on the
Budget, Borrowers' actual aggregate expenditures since the Petition Date as of
the end of each week which, in the aggregate, exceed by no more than ten percent
(10%) the aggregate amount of expenses shown on the Budget as of such week on a
cumulative basis since the Petition Date.
"Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, Governmental Authority, or any other entity.
"Petition Date" means September 24, 2003.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) that a Borrower sponsors or maintains or to which a Borrower makes, is
making, or is obligated to make contributions and includes any Pension Plan
(other than any Plan that is a Multi-Employer Plan).
"Plans and Specs" has the meaning specified in Section 7.6(b).
"Pledge Agreements" means, collectively, each pledge agreement to be
executed and delivered by a Borrower, pursuant to which such Borrower shall
pledge to Administrative Agent, as security for the Obligations, all of the
issued and outstanding capital stock and other securities held by it of its
Subsidiaries.
"Post-Petition Securitization Facility" shall have the meaning ascribed
to such term in the Financing Order.
"Pre-Petition Collateral Agents" means, collectively, the Pre-Petition
Priority Collateral Agent and the Pre-Petition General Collateral Agent.
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"Pre-Petition General Collateral Agent" means Wilmington Trust Company,
as collateral agent for the Pre-Petition General Secured Parties.
"Pre-Petition General Secured Parties" means the Pre-Petition General
Collateral Agent, the Pre-Petition Revolving Lenders, Pre-Petition Revolving
Credit Agent, Prudential and the Bond Trustee.
"Pre-Petition Priority Collateral Agent" means Bank of America, N.A.,
in its capacity (and together with its successors in such capacity) as
collateral agent for the Pre-Petition Priority Secured Parties under a certain
Priority Collateral Agency Agreement, dated as of January 28, 2000, among Bank
of America, N.A., as collateral agent, Prudential and the Pre-Petition Revolving
Credit Agent.
"Pre-Petition Priority Secured Parties" means the Pre-Petition Priority
Collateral Agent, the Pre-Petition Revolving Lenders, the Pre-Petition Revolving
Credit Agent and Prudential.
"Pre-Petition Revolving Credit Agent" means Bank of America, N.A. as
agent for the Pre-Petition Revolving Lenders under the Pre-Petition Revolving
Credit Agreement.
"Pre-Petition Revolving Credit Agreement" means that the Credit
Agreement dated as of January 28, 2000, among Cone Xxxxx, the Pre-Petition
Revolving Lenders and the Pre-Petition Revolving Credit Agent.
"Pre-Petition Secured Parties" means, collectively, the Pre-Petition
Priority Secured Parties and the Pre-Petition General Secured Parties.
"Pre-Petition Secured Party Protection Order" means the Final Order (A)
Authorizing the Use of Cash Collateral and (B) Granting Adequate Protection to
the Pre-Petition Collateral Agents Pursuant to Sections 105, 361, 363 of the
Bankruptcy Code Including Replacement Liens and Superpriority Claims, which was
entered by the Court on October 30, 2003.
"Professional Expenses" means the fees and reimbursable expenses of a
Professional Person.
"Professional Person" means a Person who is an attorney, accountant,
appraiser, auctioneer or other professional person and who is retained, with
Court approval, by (i) Borrowers pursuant to Section 327 or 328 of the
Bankruptcy Code or (ii) a Committee pursuant to Section 1103(a) of the Code.
"Properly Contested" means, in the case of any indebtedness or
obligation of an Obligor (including any taxes owing by such Obligor) that is not
paid as and when due or payable by reason of such Obligor's bona fide dispute
concerning its liability to pay same or concerning the amount thereof, (i) such
indebtedness is being properly contested in good faith by appropriate
proceedings promptly instituted and diligently conducted; (ii) such Obligor has
established appropriate reserves as shall be required in conformity with GAAP;
(iii) the non-payment of such indebtedness will not have a Material Adverse
Effect and will not result in a forfeiture or sale of any assets of such
Obligor; (iv) no Lien is imposed upon any of such Obligor's assets with respect
to any such indebtedness, unless such Lien is at all times junior and
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subordinate in priority to the Liens in favor of Administrative Agent (except
only with respect to pre-Petition Date property taxes and other pre-Petition
Date statutory obligations that have priority as a matter of applicable state
law) and enforcement of such Lien is stayed during the period prior to the final
resolution or disposition of such dispute; and (v) if such contest is abandoned,
settled or determined adversely (in whole or in part) to such Obligor, such
Obligor forthwith pays such indebtedness and all penalties, interest and other
amounts due in connection therewith (except to the extent such Obligor is
otherwise prohibited or excused from making such payment pursuant to the
Bankruptcy Code or order of the Court).
"Proposed Purchaser" means, collectively, WLR Recovery Fund II, L.P., a
Delaware limited partnership, and WLR Cone Xxxxx Acquisition LLC, a Delaware
limited liability company.
"Proposed Section 363 Sale" shall have the meaning ascribed to it in
the Recitals to this Agreement.
"Proprietary Rights" means all of a Person's now owned and hereafter
arising or acquired: patents, patent rights, copyrights, trademarks, service
marks, trade names, trade styles, patent, trademark and service xxxx
applications, and all licenses and rights related to any of the foregoing,
including, in the case of Borrowers, those Registered Proprietary Rights that
are set forth on Schedule 6.12 hereto, and all other rights under any of the
foregoing, all extensions, renewals, reissues, divisions, continuations, and
continuations-in-part of any of the foregoing, and all rights to xxx for past,
present and future infringement of any of the foregoing.
"Pro Rata Share" means, with respect to a Lender, a fraction (expressed
as a percentage), the numerator of which is the amount of such Lender's
Commitment and the denominator of which is the sum of the amounts of all of the
Lenders' Commitments, or if no Commitments are outstanding, a fraction
(expressed as a percentage), the numerator of which is the amount of Obligations
owed to such Lender and the denominator of which is the aggregate amount of the
Obligations owed to the Lenders, in each case giving effect to a Lender's
participation in Non-Ratable Loans and Agent Advances.
"Prudential" means Prudential Insurance Company of America.
"Purchase Money Debt" means and includes (i) Debt (other than the
Obligations) for the payment of all or any part of the purchase price of any
Fixed Assets, (ii) any Debt (other than the Obligations) incurred at the time of
or within ten (10) days prior to or after the acquisition of any Fixed Assets
for the purpose of financing all or any part of the purchase price thereof, and
(iii) any renewals, extensions or refinancings thereof, but not any increases in
the principal amounts thereof outstanding at the time.
"Purchase Money Lien" means a Lien upon Fixed Assets that secure Debt
incurred by a Borrower to acquire such Fixed Assets, but only if such Lien shall
at all times be confined solely to the Equipment acquired through the incurrence
of the Debt secured by such Lien.
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"Purchased Receivables and Related Assets" means Accounts (and related
assets, such as returned, or repossessed Goods the sale of which gave rise to
any such Accounts) originally purchased by Cone Receivables from Cone Xxxxx
pursuant to the Receivables Transfer Agreement, resold by Cone Receivables to GE
Capital pursuant to the Receivables Purchase Agreement prior to the Closing
Date.
"Real Estate" means all of the real property owned by a Borrower and/or
any Subsidiary, together with all improvements thereon, all fixtures attached
thereto and the easements appurtenant thereto.
"Receivables Purchase Agreement" means the Receivables Purchase and
Servicing Agreement dated as of September 1, 1999, among Cone Receivables,
Redwood Receivables, Cone Xxxxx and GE Capital.
"Receivables Purchase Termination Agreement" shall mean the agreement
attached hereto as Exhibit E, with such amendments or modifications as may be
satisfactory to each of the Borrowers party thereto, Administrative Agent and GE
Capital.
"Receivables Transfer Agreement" means the Receivables Transfer
Agreement dated as of September 1, 1999, between Cone Xxxxx, certain Affiliates
of Cone Xxxxx and Cone Receivables.
"Reclamation Claim" means a Claim against a Borrower under Section
546(c)(2)(A) of the Bankruptcy Code.
"Redwood Receivables" means Redwood Receivables Corporation, a Delaware
corporation.
"Registered Proprietary Rights" has the meaning specified in Section
6.12.
"Release" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Contaminant into the indoor or outdoor environment or into or out of any Real
Estate or other property, including the movement of Contaminants through or in
the air, soil, surface water, groundwater or Real Estate or other property.
"Reportable Event" means, any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, other than (i) any such event
for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC and (ii) the commencement of the Chapter 11
Cases.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
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"Responsible Officer" means the chief executive officer or the
president of a Borrower, or any other officer having substantially the same
authority and responsibility; or, with respect to compliance with financial
covenants and the preparation of the Borrowing Base Certificate, the chief
financial officer, controller or the treasurer of a Borrower, or any other
officer having substantially the same authority and responsibility.
"Restoration Remittance" has the meaning specified in Section 7.6(b).
"Restricted Investment" means, as to a Borrower, any acquisition of
property by such Borrower in exchange for cash or other property, whether in the
form of an acquisition of stock, debt, or other indebtedness or obligation, or
the purchase or acquisition of any other property, or a loan, advance, capital
contribution, or subscription, except the following: (a) acquisitions of Fixed
Assets to be used in the business of such Borrower so long as the acquisition
costs thereof constitute Capital Expenditures permitted hereunder; (b)
acquisitions of Inventory in the Ordinary Course of Business of such Borrower;
(c) acquisitions of current assets acquired in the Ordinary Course of Business
of such Borrower; (d) direct obligations of the United States of America, or any
agency thereof, or obligations guaranteed by the United States of America,
provided that such obligations mature within one year from the date of
acquisition thereof; (e) acquisitions of certificates of deposit maturing within
one year from the date of acquisition, bankers' acceptances, Eurodollar bank
deposits, or overnight bank deposits, in each case issued by, created by, or
with a bank or trust company organized under the laws of the United States of
America or any state thereof having capital and surplus aggregating at least
$100,000,000; (f) acquisitions of commercial paper given a rating of "A2" or
better by Standard & Poor's Corporation or "P2" or better by Xxxxx'x Investors
Service, Inc. and maturing not more than ninety (90) days from the date of
creation thereof; and (g) Hedge Agreements.
"Revolving Loans" has the meaning specified in Section 1.2 and includes
each Agent Advance and Non-Ratable Loan.
"Royalties" means royalties that are payable by the Borrowers in
respect of Proprietary Rights licensed to them in connection with the
manufacture, sale or distribution by one or more Borrowers of any Inventory or
other Goods.
"Security Agreement" means the Security Agreement of even date herewith
between Borrowers and Administrative Agent pursuant to which, among other
things, each Borrower as granted a security interest in and Lien upon all of the
Collateral as security for the payment of Obligations, in substantially the form
attached hereto as Exhibit F.
"Security Documents" means any and all other instruments and agreements
now or at any time hereafter securing the whole or any part of the Obligations,
including the Security Agreement, the Mortgages, the Patent, Trademark and
Copyright Agreements, each Subsidiary Guaranty and each Subsidiary Security
Agreement, the Pledge Agreements and each other assignment, instrument or other
document as may be requested by Administrative Agent in order to evidence of
record, or to validate under applicable non-bankruptcy law the perfection of,
the Liens granted by the Borrowers in favor of Administrative Agent pursuant to
the DIP Financing Documents.
A-29
"Senior Debentures" means the 8-1/8% debentures due March 15, 2005,
issued by Cone Xxxxx pursuant to the Senior Indenture in aggregate original
principal amount of $100,000,000.
"Senior Indenture" means that certain Indenture dated as of February
14, 1999, between Cone Xxxxx and the Bond Trustee.
"Senior Permitted Lien" means a Permitted Lien that is authorized by
clauses (a), (c), (d), (h), (i), or (l) of the definition thereof to have
priority over Administrative Agent's Liens, in each case, to the extent that the
claim secured by such Permitted Lien is allowed by the Court or pursuant to any
Chapter 11 Plan that is an Acceptable Plan; provided that, in no event shall any
Lien in favor of a Pre-Petition Secured Party be deemed to be a Senior Permitted
Lien.
"Settlement" and "Settlement Date" have the meanings specified in
Section 12.15(a)(ii).
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than fifty percent (50%) of the Voting Stock or other equity
interests (in the case of Persons other than corporations), is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of a Borrower.
"Subsidiary Guarantor" means each Subsidiary that becomes a Subsidiary
Guarantor pursuant to Section 7.35.
"Subsidiary Guaranty" means a guaranty agreement to be executed by a
Subsidiary Guarantor in favor of Administrative Agent, for the benefit of the
Lenders, by which such Subsidiary Guarantor shall guarantee payment and
performance of the Obligations, which guaranty agreement shall be in form and
substance satisfactory to Administrative Agent.
"Subsidiary Security Agreement" means a security agreement, pledge
agreement, mortgage, hypothecation, general charge or other document creating or
perfecting a Lien to be executed by a Subsidiary Guarantor in favor of
Administrative Agent by which such Subsidiary Guarantor shall grant to
Administrative Agent, for the benefit of Administrative Agent and the Lenders, a
Lien upon any or all of such Subsidiary Guarantor's assets (as may be designated
by Administrative Agent), whenever acquired and wherever located, as security
for the payment of the Obligations, which security agreement shall be in form
and substance satisfactory to Administrative Agent.
"Superpriority Claim" means a claim against one or more Borrowers in
the Chapter 11 Cases that is an administrative expense claim having priority
over any and all administrative expenses of the kind specified in Sections
503(b) or l507(b) of the Bankruptcy Code, including a claim pursuant to Section
364(c)(1) of the Bankruptcy Code.
"Syndication Agent" has the meaning specified in the Recitals to this
Agreement.
"Taxes" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and Administrative Agent, such taxes
A-30
(including income taxes or franchise taxes) as are imposed on or measured by
Administrative Agent's or each Lender's net income in any the jurisdiction
(whether federal, state or local and including any political subdivision
thereof) under the laws of which such Lender or Administrative Agent, as the
case may be, is organized or maintains a lending office.
"UCC" means the Uniform Commercial Code, as in effect from time to
time, of the State of Georgia or of any other state the laws of which are
required as a result thereof to be applied in connection with the issue of
perfection of security interests; provided, that to the extent that the UCC is
used to define any term herein or in any other documents and such term is
defined differently in different Articles or Divisions of the UCC, the
definition of such term contained in Article or Division 9 shall govern.
"Unfunded Pension Liability" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.
"Unused Letter of Credit Subfacility" means, on any date, an amount
equal to $10,000,000 minus the sum of (a) the aggregate undrawn amount of all
Letters of Credit outstanding on such date plus, without duplication, (b) the
aggregate unpaid reimbursement obligations on such date with respect to all
Letters of Credit.
"Unused Line Fee" has the meaning specified in Section 2.5.
"USA Patriot Act" shall mean the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Pub. L. No. 107-56, 115 Stat. 272 (2001), as the same has been, or shall
hereafter be, renewed, extended, amended or replaced.
"Value", when used with reference to the value of Eligible Inventory,
means value determined on the basis of the lower of cost or market of such
Eligible Inventory, with the cost thereof calculated on a first-in, first-out
basis, determined in accordance with GAAP.
"Voting Stock" means, with respect to any Person, capital stock or
other securities issued by such Person the holders of which are ordinarily, in
the absence of contingencies, entitled to vote for the election of directors (or
individuals performing similar functions) of such Person, even though the right
so to vote has been suspended by the happening of such a contingency.
Accounting Terms. Any accounting term used in this Agreement shall
have, unless otherwise specifically provided herein, the meaning customarily
given in accordance with GAAP, and all financial computations in this Agreement
shall be computed, unless otherwise specifically provided therein, in accordance
with GAAP as consistently applied and using the same method for inventory
valuation as used in the preparation of the Financial Statements.
Interpretive Provisions. (a) The meanings of defined terms are equally
applicable to the singular and plural forms of the defined terms.
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(b) The words "hereof," "herein," "hereunder" and similar words refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and Subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including," the words "to" and "until" each mean "to but excluding" and
the word "through" means "to and including."
(iv) The word "or" is not exclusive.
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any DIP Financing Document, and (ii) references to any statute or
regulation are to be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting the
statute or regulation.
(e) The captions and headings of this Agreement and other DIP Financing
Documents are for convenience of reference only and shall not affect the
interpretation of this Agreement.
(f) This Agreement and other DIP Financing Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(g) For purposes of Section 9.1, a breach of a financial covenant
contained in Sections 7.22-7.23 shall be deemed to have occurred as of any date
of determination thereof by Administrative Agent or as of the last day of any
specified measuring period, regardless of when the Financial Statements
reflecting such breach are delivered to Administrative Agent.
(h) This Agreement and the other DIP Financing Documents are the result
of negotiations among and have been reviewed by counsel to Administrative Agent,
the Borrowers and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Lenders or Administrative
Agent merely because of Administrative Agent's or Lenders' involvement in their
preparation.
(i) Whenever the phrase "to the best of each Borrower's knowledge" or
words of similar import relating to the knowledge or the awareness of a Borrower
are used herein, such phrase shall mean and refer to (i) the actual knowledge of
a Responsible Officer of such Borrower or (ii) the knowledge that a Responsible
Officer would have obtained if such Responsible Officer had engaged in good
A-32
faith and reasonably diligent performance of such Responsible Officer's duties,
including the making of reasonable inquiries.
A-33
ANNEX B
to
Credit Agreement
Budget
EXHIBIT A
FORM OF BORROWING BASE CERTIFICATE
PLEASE SEE ATTACHED
EXHIBIT B
NOTICE OF BORROWING
Date: ______________, 200_
To: Bank of America, N.A. as Administrative Agent for the Lenders who are
parties to the Post-Petition Credit Agreement dated as of December 11,
2003 (as extended, renewed, amended or restated from time to time, the
"Post-Petition Credit Agreement") among Cone Xxxxx Corporation and the
other Borrowers which are signatories thereto, the Lenders which are
signatories thereto and Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
The undersigned, ___________________________ refers to the
Post-Petition Credit Agreement, the terms defined therein being used herein as
therein defined, and hereby gives you notice irrevocably of the Borrowing
specified below:
1. The Business Day of the proposed Borrowing is _____, 200_.
2. The aggregate amount of the proposed Borrowing is $_____.
3. The Borrowing is to be comprised of $_____ of Base Rate Revolving
Loans and $_____ of LIBOR Revolving Loans.
4. The duration of the Interest Period for the LIBOR Revolving Loans,
if any, included in the Borrowing shall be _____ months.
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the proposed Borrowing,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) The representations and warranties of the Borrowers contained in
the Post-Petition Credit Agreement are true and correct as though made on and as
of such date (except that any representation or warranty that relates to a
specified prior date shall be true and correct as of such prior date);
(b) No Default or Event of Default has occurred and is continuing, or
would result from such proposed Borrowing; and
(c) The proposed Borrowing will not cause the aggregate principal
amount of all outstanding Revolving Loans plus the aggregate amount available
for drawing under all outstanding Letters of Credit, to exceed the lesser of the
Borrowing Base or the combined Commitments of the Lenders.
CONE XXXXX CORPORATION
By:
-------------------------------------
Title:
-------------------------------------
2
EXHIBIT C
NOTICE OF CONTINUATION/CONVERSION
Date: __________, 200_
To: Bank of America, N.A. as Administrative Agent for the Lenders who are
parties to the Post-Petition Credit Agreement dated as of December 11,
2003 (as extended, renewed, amended or restated from time to time, the
"Post-Petition Credit Agreement") among Cone Xxxxx Corporation and the
other Borrowers which are signatories thereto, the Lenders which are
signatories thereto and Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
The undersigned, ___________________________ refers to the
Post-Petition Credit Agreement, the terms defined therein being used herein as
therein defined, and hereby gives you notice irrevocably of the [conversion]
[continuation] of the Loans specified herein, that:
1. The Continuation/Conversion Date is __________, 200_.
2. The aggregate amount of the Loans to be [converted] [continued] is
$_____ .
3. The Loans are to be [converted into] [continued as] [LIBOR Rate]
[Base Rate] Loans.
4. The duration of the Interest Period for the LIBOR Revolving Loans
included in the [conversion] [continuation] shall be _____ months.
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the proposed
Continuation/Conversion Date, before and after giving effect thereto and to the
application of the proceeds therefrom:
(a) The representations and warranties of the Borrowers contained in
the Post-Petition Credit Agreement are true and correct as though made on and as
of such date (except that any representations and warranties that relate to a
specified prior date shall be true and correct as of such specified prior date);
(b) No Default or Event of Default has occurred and is continuing, or
would result from such proposed [conversion] [continuation]; and
(c) The proposed conversion-continuation will not cause the aggregate
principal amount of all outstanding Revolving Loans [plus the aggregate amount
available for drawing under all outstanding Letters of Credit] to exceed the
lesser of the Borrowing Base or the combined Commitments of the Lenders.
CONE XXXXX CORPORATION
By:
----------------------------------
Title:
----------------------------------
2
EXHIBIT D
[FORM OF] ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and Acceptance")
dated as of ____________________, 200_ is made between
______________________________ (the "Assignor") and __________________________
(the "Assignee").
RECITALS
WHEREAS, the Assignor is party to that certain Post-Petition Credit
Agreement dated as of December 11, 2003 (as amended, amended and restated,
modified, supplemented or renewed, the "Post-Petition Credit Agreement") among
Cone Xxxxx Corporation and the other Borrowers party thereto (the "Borrowers"),
the several financial institutions from time to time party thereto (including
the Assignor, the "Lenders"), and Bank of America, N. A., as agent for the
Lenders (the "Administrative Agent"). Any terms defined in the Post-Petition
Credit Agreement and not defined in this Assignment and Acceptance are used
herein as defined in the Post-Petition Credit Agreement;
WHEREAS, as provided under the Post-Petition Credit Agreement, the Assignor
has committed to making Loans (the "Committed Loans") to the Borrowers in an
aggregate amount not to exceed $__________ (the "Commitment");
WHEREAS, the Assignor has made Committed Loans in the aggregate principal
amount of $__________ to the Borrowers;
WHEREAS, [the Assignor has acquired a participation in its pro rata share
of the Lenders' liabilities under Letters of Credit in an aggregate principal
amount of $____________ (the "L/C Obligations")] [no Letters of Credit are
outstanding under the Post-Petition Credit Agreement]; and
WHEREAS, the Assignor wishes to assign to the Assignee [part of the] [all]
rights and obligations of the Assignor under the Post-Petition Credit Agreement
in respect of its Commitment, together with a corresponding portion of each of
its outstanding Committed Loans and L/C Obligations, in an amount equal to
$__________ (the "Assigned Amount") on the terms and subject to the conditions
set forth herein and the Assignee wishes to accept assignment of such rights and
to assume such obligations from the Assignor on such terms and subject to such
conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and Acceptance,
(i) the Assignor hereby sells, transfers and assigns to the Assignee, and (ii)
the Assignee hereby purchases, assumes and undertakes from the Assignor, as of
the Effective Date (as defined below) without recourse and without
representation or warranty (except as provided in this Assignment and
Acceptance) __% (the "Assignee's Percentage Share") of (A) the Commitment, the
Committed Loans and the L/C Obligations of the Assignor and (B) all related
rights, benefits, obligations, liabilities and indemnities of the Assignor under
and in connection with the Post-Petition Credit Agreement and the DIP Financing
Documents.
(b) With effect on and after the Effective Date, the Assignee shall be a
party to the Post-Petition Credit Agreement and succeed to all of the rights and
be obligated to perform all of the obligations of a Lender under the
Post-Petition Credit Agreement, including the requirements concerning
confidentiality and the payment of indemnification, with a Commitment in an
amount equal to the Assigned Amount. The Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Post-Petition Credit Agreement are required to be performed by it as a Lender.
It is the intent of the parties hereto that the Commitment of the Assignor
shall, as of the Effective Date, be reduced by an amount equal to the Assigned
Amount and the Assignor shall relinquish its rights and be released from its
obligations under the Post-Petition Credit Agreement to the extent such
obligations have been assumed by the Assignee; provided, however, the Assignor
shall not relinquish its rights under Sections __ and __ of the Post-Petition
Credit Agreement to the extent such rights relate to the time prior to the
Effective Date.
(c) After giving effect to the assignment and assumption set forth herein,
on the Effective Date the Assignee's Commitment will be $__________.
(d) After giving effect to the assignment and assumption set forth herein,
on the Effective Date the Assignor's Commitment will be $__________.
2. Payments.
(a) As consideration for the sale, assignment and transfer contemplated in
Section 1 hereof, the Assignee shall pay to the Assignor on the Effective Date
in immediately available funds an amount equal to $__________, representing the
Assignee's Pro Rata Share of the principal amount of all Committed Loans.
(b) The Assignee further agrees to pay to Administrative Agent a processing
fee in the amount specified in Section 11.2(a) of the Post-Petition Credit
Agreement.
3. Reallocation of Payments.
Any interest, fees and other payments accrued to the Effective Date with
respect to the Commitment, and Committed Loans and L/C Obligations shall be for
the account of the Assignor. Any interest, fees and other payments accrued on
and after the Effective Date with respect to the Assigned Amount shall be for
the account of the Assignee. Each of the Assignor and the Assignee agrees that
it will hold in trust for the other party any interest, fees and other amounts
which it may receive to which the other party is entitled pursuant to the
preceding sentence and pay to the other party any such amounts which it may
receive promptly upon receipt.
2
4. Independent Credit Decision.
The Assignee (a) acknowledges that it has received a copy of the
Post-Petition Credit Agreement and the Schedules and Exhibits thereto, together
with copies of the most recent financial statements of the Borrowers, and such
other documents and information as it has deemed appropriate to make its own
credit and legal analysis and decision to enter into this Assignment and
Acceptance; and (b) agrees that it will, independently and without reliance upon
the Assignor, Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit and legal decisions in taking or not taking action under the
Post-Petition Credit Agreement.
5. Effective Date; Notices.
(a) As between the Assignor and the Assignee, the effective date for this
Assignment and Acceptance shall be __________, 200_ (the "Effective Date");
provided that the following conditions precedent have been satisfied on or
before the Effective Date:
(i) this Assignment and Acceptance shall be executed and delivered by
the Assignor and the Assignee;
[(ii) the consent of Administrative Agent required for an effective
assignment of the Assigned Amount by the Assignor to the Assignee
shall have been duly obtained and shall be in full force and effect as
of the Effective Date];
(iii) the Assignee shall pay to the Assignor all amounts due to the
Assignor under this Assignment and Acceptance;
[(iv) the Assignee shall have complied with Section 11.2 of the
Post-Petition Credit Agreement (if applicable);]
(v) the processing fee referred to in Section 2(b) hereof and in
Section 11.2(a) of the Post-Petition Credit Agreement shall have been paid
to Administrative Agent; and
(b) Promptly following the execution of this Assignment and Acceptance, the
Assignor shall deliver to the Borrowers and Administrative Agent for
acknowledgment by Administrative Agent, a Notice of Assignment in the form
attached hereto as Schedule 1.
6. Reserved.
7. Withholding Tax.
The Assignee (a) represents and warrants to the Lender, Administrative
Agent and the Borrowers that under applicable law and treaties no tax will be
required to be withheld by the Lender with respect to any payments to be made to
the Assignee hereunder, (b) agrees to furnish (if it is organized under the laws
of any jurisdiction other than the United States or any State thereof) to
Administrative Agent and the Borrowers prior to the time that Administrative
Agent or Borrowers are required to make any payment of principal, interest or
fees hereunder, duplicate executed originals of either U.S. Internal Revenue
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Service Form W-8ECI or U.S. Internal Revenue Service Form W-8BEN (wherein the
Assignee claims entitlement to the benefits of a tax treaty that provides for a
complete exemption from U.S. federal income withholding tax on all payments
hereunder) and agrees to provide new Forms W-8ECI or W-8BEN upon the expiration
of any previously delivered form or comparable statements in accordance with
applicable U.S. law and regulations and amendments thereto, duly executed and
completed by the Assignee, and (c) agrees to comply with all applicable U.S.
laws and regulations with regard to such withholding tax exemption.
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any Lien or other adverse claim; (ii) it is duly
organized and existing and it has the full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Post-Petition Credit Agreement, no further action by, or notice to, or
filing with, any Person is required of it for such execution, delivery or
performance; and (iv) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of the
Assignor, enforceable against the Assignor in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Post-Petition Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Post-Petition Credit Agreement or any other instrument or document
furnished pursuant thereto. The Assignor makes no representation or warranty in
connection with, and assumes no responsibility with respect to, the solvency,
financial condition or statements of the Borrowers, or the performance or
observance by the Borrower, of any of its respective obligations under the
Post-Petition Credit Agreement or any other instrument or document furnished in
connection therewith.
(c) The Assignee represents and warrants that (i) it is duly organized and
existing and it has full power and authority to take, and has taken, all action
necessary to execute and deliver this Assignment and Acceptance and any other
documents required or permitted to be executed or delivered by it in connection
with this Assignment and Acceptance, and to fulfill its obligations hereunder;
(ii) no notices to, or consents, authorizations or approvals of, any Person are
required (other than any already given or obtained) for its due execution,
delivery and performance of this Assignment and Acceptance; and apart from any
agreements or undertakings or filings required by the Post-Petition Credit
Agreement, no further action by, or notice to, or filing with, any Person is
required of it for such execution, delivery or performance; (iii) this
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Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignee, enforceable
against the Assignee in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles; [and (iv) it is an Eligible Assignee.]
9. Further Assurances.
The Assignor and the Assignee each hereby agree to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Assignment and
Acceptance, including the delivery of any notices or other documents or
instruments to the Borrowers or Administrative Agent, which may be required in
connection with the assignment and assumption contemplated hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No failure or
delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance shall be without prejudice to any
rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any set-off or
counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs and expenses
incurred in connection with the negotiation, preparation, execution and
performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE GEORGIA. The Assignor and the Assignee each
irrevocably submits to the non-exclusive jurisdiction of any State or Federal
court sitting in Georgia County, Georgia over any suit, action or proceeding
arising out of or relating to this Assignment and Acceptance and irrevocably
agrees that all claims in respect of such action or proceeding may be heard and
determined in such State or Federal court. Each party to this Assignment and
Acceptance hereby irrevocably waives, to the fullest extent it may effectively
do so, the defense of an inconvenient forum to the maintenance of such action or
proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH
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THIS ASSIGNMENT AND ACCEPTANCE, THE POST-PETITION CREDIT AGREEMENT, ANY RELATED
DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR
STATEMENTS (WHETHER ORAL OR WRITTEN).
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By:
Title:
Address:
[ASSIGNEE]
By:
Title:
Address:
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EXHIBIT E
Receivables Purchase Termination Agreement
RECEIVABLES PURCHASE TERMINATION
AND REASSIGNMENT AGREEMENT
THIS AGREEMENT is made and entered into as of December 11,
2003, by and among CONE RECEIVABLES II LLC, a North Carolina limited liability
company (the "Seller"), CONE XXXXX CORPORATION, a North Carolina corporation
("Cone Xxxxx"); CONE FOREIGN TRADING LLC, a North Carolina limited liability
company ("CFT"; each of Cone Xxxxx and CFT being herein referred to as an
"Originator" and collectively as the "Originators"), and each of the Seller and
the Originators being herein referred to as a "Company" and collectively as the
"Companies"), and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation
("GECC"), acting in its capacities as the Purchaser, the Operating Agent and the
Collateral Agent (as such terms are defined in the Purchase Agreement referenced
below).
Statement of Facts
WHEREAS, Cone Xxxxx and the Seller entered into that certain
Receivables Transfer Agreement, dated as of September 1, 1999 (as amended to the
date hereof, the "Transfer Agreement"; capitalized terms used herein and not
otherwise defined herein shall have the meanings given such terms in Annex X to
the Transfer Agreement) whereby Cone Xxxxx agreed to sell, contribute or
otherwise transfer to the Seller, and the Seller agreed to purchase or otherwise
acquire from such Originator, all of the right, title and interest of such
Originator in the Transferred Receivables of such Originator; and
WHEREAS, the Seller, Redwood Receivables Corporation ("Redwood"), as
Purchaser, Cone Xxxxx, as Servicer, and GECC, as Operating Agent and as
Collateral Agent, entered into that certain Receivables Purchasing and Servicing
Agreement, dated as of September 1, 1999 (as amended to the date hereof, the
"Purchase Agreement"; the Transfer Agreement, the Purchase Agreement and all
other Related Documents are herein collectively referred to as the
"Securitization Agreements"), whereby Purchaser agreed, among other things, to
purchase from the Seller from time to time the Transferred Receivables sold or
contributed to the Seller pursuant to the Transfer Agreement; and
WHEREAS, pursuant to the Fourth Amendment to Securitization Agreements
and Additional Originator Joinder Agreement, dated as of April 20, 2000, among
the Companies, Redwood and GECC, as Operating Agent, Collateral Agent, Letter of
Credit Provider and Letter of Credit Agent, CFT became an Originator under the
Transfer Agreement, and as a result CFT agreed to sell, contribute or otherwise
transfer to the Seller, and the Seller agreed to purchase or otherwise acquire
from such Originator, all of the right, title and interest of such Originator in
the Transferred Receivables of such Originator; and
WHEREAS, Redwood and GECC entered into that certain Assignment
Agreement, dated as of April 23, 2001 (the "Redwood Assignment"), under which
Redwood assigned and delegated to GECC, pursuant to Section 2.05 of the
Liquidity Loan Agreement, all of Redwood's
rights, titles and interests in and to, and all of Redwood's obligations under,
the Purchase Agreement and the other Related Documents; and
WHEREAS, the parties desire to terminate the Securitization Agreements
and to provide for the reassignment by GECC to the Seller of the Transferred
Receivables and the reassignment by the Seller of the Transferred Receivables to
the Originators, all in accordance with and subject to the terms and conditions
of this Agreement.
Statement of Terms
NOW, THEREFORE, in consideration of the mutual covenants
herein set forth, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Definitions. Unless otherwise expressly defined herein, all
capitalized terms used herein shall have the respective meanings given such
terms in the Securitization Agreements.
2. Reconveyance by GECC, Etc. (a) Subject to the terms and conditions
of this Agreement, and effective as of the Effective Date specified below, GECC,
in its capacity as the Purchaser, shall assign, transfer and convey to the
Seller, without recourse, except as specifically set forth herein, and the
Seller shall purchase and accept assignment and transfer from GECC of, all of
GECC's rights, titles and interests in and to all of the presently outstanding
Transferred Receivables. In consideration for such transfer and assignment, the
Seller shall pay to GECC at or before 2:00 p.m. (New York city time) on the
Effective Date, in immediately available funds, an amount (the "Reconveyance
Amount") equal to the sum of the following (the following items shall be
computed after giving effect to the applications on the Effective Date of all
monies on deposit in the Collection Account on such date):
(i) outstanding Capital Investment $ 9,255,073.39
(ii) unpaid Accrued Daily Yield $ 960.80
(iii) unpaid Accrued Daily Fees and Expenses $ 448.77
(iv) Other (specify: Legal Invoices - PH) $ 10,000.00
--------------
(v) Total Reconveyance Amount (sum of (i)
through (iv) above) $ 9,266,482.96
(b) Payment of the Reconveyance Amount shall be made by the Seller to
GECC by way of a wire transfer of immediately available funds to the Collection
Account.
(c) Subject to the terms and conditions of this Agreement, upon
payment by the Seller of the Reconveyance Amount in accordance with the
provisions of Section 2(b), all rights, titles and interests (including Liens)
of GECC, in its capacities as the Purchaser, the Operating Agent and/or the
Collateral Agent, in or to any or all of the Transferred Receivables shall
terminate and be released without further action, all as of the Effective Date.
If GECC, in its capacity as the Purchaser, the Operating Agent or the Collateral
Agent, receives any
2
Proceeds of the Transferred Receivables after such termination and release, GECC
shall promptly transfer such Proceeds to the Seller (or to such other person as
the Seller may direct GECC in writing)
3. Reconveyance by Seller. Subject to the terms and conditions of this
Agreement, and effective as of the Effective Date, the Seller shall assign,
transfer, and convey to each of the Originators, without recourse, except as
specifically set forth herein, and each of the Originators shall purchase and
accept, all of the Seller's rights, titles and interests in and to all of the
Transferred Receivables previously acquired by the Seller from such Originator
under the Transfer Agreement. In consideration of the Seller's transfer and
conveyance hereunder to each Originator of such Transferred Receivables, such
Originator shall pay an amount (the "Originator Purchase Price") to the Seller
equal to the portion of the Reconveyance Amount attributable to the Transferred
Receivables of such Originator, which Originator Purchase Price shall be payable
by such Originator on the Effective Date to such account or person as may be
directed by the Seller, and in immediately available funds. Subject to the terms
and conditions of this Agreement, upon payment by each Originator of the
Originator Purchase Price for its Transferred Receivables in accordance with the
provisions of this Section 3, all rights, titles and interests (including Liens)
of the Seller in or to such Transferred Receivables shall terminate and be
released without further action, all as of the Effective Date.
4. Termination of Securitization Agreements. Upon the effectiveness of
this Agreement, the Securitization Agreements shall terminate and all
obligations of the parties thereunder (including without limitation any and all
obligations thereunder to purchase, sell, contribute or service the Transferred
Receivables and the Collections) shall terminate, except that (i) the
representations and warranties made by the Seller and the Servicer pursuant to
Article IV of the Purchase Agreement and the provisions set forth in Article XII
and Sections 14.04, 14.05 and 14.06 of the Purchase Agreement shall be
continuing and shall survive the execution and delivery of this Agreement and
the termination of the Purchase Agreement and (ii) the provisions of Sections
4.02(o), 4.03(j), 4.04, 5.01, 8.03, 8.12 and 8.14 of the Transfer Agreement and
the indemnification and payment provisions of Article V of the Transfer
Agreement shall be continuing and shall survive the execution and delivery of
this Agreement and the termination of the Transfer Agreement (the provisions
described in the foregoing clauses (i) and (ii) are herein called the "Surviving
Provisions").
5. Mutual Releases. Upon the effectiveness of this Agreement, each of
the Companies, on the one hand, and GECC, on the other hand (the latter in each
of its capacities as the Purchaser, the Operating Agent and the Collateral
Agent) (each of the Companies and GECC being herein referred to as a "Releasing
Party"), shall be deemed to have (a) released and forever discharged the other
and its respective subsidiaries, agents, employees, officers, directors,
attorneys, affiliates, successors and assigns (collectively, the "Released
Parties") of and from any and all liabilities, claims, suits, obligations,
indebtedness, liens, losses, causes of action , demands, rights, damages, costs
and expenses of any kind, character or nature whatsoever, whether known or
unknown, whether fixed or contingent, and whether liquidated or unliquidated,
that such Releasing Party may have or claim to have against any such Released
Party and which arises out of or is connected in any way with any action of
commission or omission of any Released Party existing or occurring on or prior
to the date of this Agreement
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relating to or arising out of or in connection with any of the Securitization
Agreements or any of the transactions contemplated by any of the Securitization
Agreements, from the beginning of time until the execution and delivery of this
Agreement (collectively, the "Released Claims") and (b) agrees forever to
refrain from commencing, instituting or prosecuting any law suit, action or
other proceeding against any of the Released Parties with respect to any of such
Released Claims; provided, however, that the Released Claims do not include, and
the releases and covenants-not-to-xxx set forth in this Section 6 shall not
apply to, the Released Parties' respective covenants and other obligations under
this Agreement or to the Released Parties' respective covenants and other
obligations under the Surviving Provisions.
6. Effectiveness of this Agreement. This Agreement shall be effective
as of December 11, 2003 (the "Effective Date") upon the satisfaction of all of
the following conditions precedent:
(a) One or more counterparts of this Agreement shall have been
executed and delivered by the Companies and GECC; and
(b) The Bankruptcy Court shall have entered, after notice and hearing,
a final order in the Chapter 11 Cases authorizing Cone Xxxxx and CFT to enter
into and perform under this Agreement (the "Bankruptcy Court Order") and from
which no appeal has been timely filed, or if timely filed, no stay pending
appeal shall have been granted; and
(c) GECC shall have received payment from the Seller of the
Reconveyance Amount in accordance with Section 2(b) above; and
(d) The Seller shall have received payment from each Originator of
such Originator's Originator Purchase Price in accordance with Section 3 above.
7. Further Assurances. Each of the Companies and GECC hereby agrees to
execute and deliver such Uniform Commercial Code termination statements, Lockbox
Account transfers or instructions, and such other documents as any Company, as
applicable, may reasonably request from time to time in order to more fully
effectuate the transactions contemplated by this Agreement; provided, however,
that any and all such termination statements, Lockbox Account transfers or
instructions, and other documents shall be prepared and/or recorded at the
Seller's or an Originator's expense, as applicable. Without limiting the
generality of the foregoing, the Seller hereby authorizes each Originator to
file a UCC financing statement naming Seller as debtor and such Originator as
secured party in order to perfect under the UCC the conveyance hereunder by the
Seller to such Originator of the Transferred Receivables conveyed hereunder to
such Originator.
8. Representations and Warranties.
(a) Subject to the entry of the Bankruptcy Court Order in the case of
each of Cone Xxxxx and CFT, each of the parties hereto represents and warrants
that it has the full corporate or other power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and that this
Agreement has been duly and validly executed and delivered
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by it (and assuming the due and valid execution and delivery hereof by all other
parties hereto) constitutes a legal, valid and binding obligation of such party
enforceable against it in accordance with its terms, except as the
enforceability hereof may be limited by bankruptcy, insolvency, reorganization
or other similar laws of general application relating to or affecting the
enforcement of creditors' rights or by general principles of equity.
(b) GECC hereby represents and warrants that the Transferred
Receivables are owned by GECC free and clear of any Adverse Claim and GECC has
not sold, pledged, assigned, transferred or subjected to a Lien any of the
Transferred Receivables. GECC further represents and warrants that, upon the
effectiveness of this Agreement and the payment of the Reconveyance Amount in
accordance with Section 2(b) above, the Companies will not be indebted to GECC
(in any of its capacities) for any reason under the Securitization Agreements or
any of the other Related Documents (except with respect to (i) the Companies'
respective representations, warranties, covenants and other obligations under
this Agreement and (ii) the Surviving Provisions; provided, however, that all or
a portion of such indebtedness shall be reinstated in the event and to the
extent that any payment thereof is rescinded or must otherwise be disgorged or
returned by GECC in any capacity upon the insolvency, dissolution, liquidation,
bankruptcy or reorganization of any or all of the Companies or upon or as a
result of the appointment of a trustee, receiver or conservator or similar
officer for any of the Companies or any substantial part of its property).
(c) The Seller hereby represents and warrants that, after giving
effect to the transfer by GECC provided in Section 2(a) above, the Transferred
Receivables will be owned by the Seller free and clear of all Adverse Claims and
the Seller has not sold, pledged, assigned, transferred or subjected to an
Adverse Claim any of the Reconveyed Property, other than the conveyance of the
Transferred Receivables to GECC under the Purchase Agreement.
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9. Parties' Intent. It is the express intent and understanding of the
parties hereto that this Agreement shall vest in the Seller all the right, title
and interest of GECC in and to the Transferred Receivables and constitutes a
valid sale of the Transferred Receivables by GECC to the Seller enforceable
against all creditors of and all purchasers from GECC and free and clear of all
Liens of GECC (in its capacity as the Purchaser, the Operating Agent or the
Collateral Agent) and that this Agreement vests in each of the Originators all
the right, title and interest of the Seller in and to the Transferred
Receivables of such Originator and constitutes a valid sale of such Transferred
Receivables by the Seller to such Originator enforceable against all creditors
of and purchasers from the Seller.
10. Miscellaneous. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE IN SUCH STATE. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns. This
Agreement may be executed in any number of several counterparts, and each such
counterpart shall constitute an original and all such counterparts together
shall constitute one and the same instrument.
11. Additional Capacities. It is acknowledged and agreed that Cone
Xxxxx is entering into, and will be bound by, this Agreement both in its
capacity as a seller under the Transfer Agreement and as a servicer under the
Purchase Agreement, and all references herein to Cone Xxxxx shall be deemed to
include it in both such capacities. It is further acknowledged and agreed that
GECC is entering into, and will be bound by, this Agreement in each of its
capacities as the Purchaser, the Operating Agent and the Collateral Agent, and
all references herein to GECC shall be deemed to include it in all such
capacities.
(remainder of page intentionally left blank)
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IN WITNESS, each of the parties hereto, by their respective
duly authorized signatories, has executed and delivered this Agreement as of the
date first above written.
CONE RECEIVABLES II LLC, as Seller
By /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Secretary
CONE XXXXX CORPORATION, as an Originator
and as Servicer
By /s/ W. Xxxxx Xxxxxxx
Name: W. Xxxxx Xxxxxxx
Title: Treasurer
CONE FOREIGN TRADING LLC, as an Originator
By: /s/ W. Xxxxx Xxxxxxx
Name: W. Xxxxx Xxxxxxx
Title: Treasurer
GENERAL ELECTRIC CAPITAL CORPORATION,
as Purchaser, Operating Agent and Collateral Agent
By /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Duly Authorized Signatory
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EXHIBIT F
Security Agreement
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of December 11, 2003, by CONE XXXXX
CORPORATION, a North Carolina corporation and Chapter 11 debtor-in-possession
("Cone Xxxxx"), CIPCO S.C., INC., a Delaware corporation and Chapter 11
debtor-in-possession ("CIPCO"), CORNWALLIS DEVELOPMENT CO., a North Carolina
corporation ("Cornwallis"), and CONE FOREIGN TRADING LLC, a North Carolina
limited liability company and Chapter 11 debtor-in-possession ("CFT") (Cone
Xxxxx, CIPCO, Cornwallis and CFT each is referred to hereinafter as a "Grantor"
and collectively as the "Grantors"), in favor of BANK OF AMERICA, N.A., in its
capacity as administrative and collateral agent for the Lenders ("Agent").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Post-Petition Credit Agreement dated
as of the date hereof by and among Grantors, Agent, General Electric Capital
Corporation, as Syndication Agent for the Lenders ("Syndication Agent" and,
collectively with Agent "Agents") and the Lenders (including all annexes,
exhibits and schedules thereto, as from time to time amended, restated,
supplemented or otherwise modified, the "Credit Agreement"), the Lenders have
agreed to make the Loans and issue Letters of Credit to or for the benefit of
Grantors; and
WHEREAS, in order to induce the Lenders to make the Loans and issue
Letters of Credit as provided for in the Credit Agreement, Grantors have agreed
to grant a continuing Lien on the Collateral (as hereinafter defined) to secure
the Obligations;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINED TERMS; RULES OF INTERPRETATION.
(a) The following terms shall have the following respective
meanings:
"Accounts" means, with respect to each Grantor, all of such
Grantor's now owned or hereafter acquired or arising "accounts," as such term is
defined in the UCC, including any rights to payment for the sale or lease of
goods or rendition of services, whether or not they have been earned by
performance.
"Assigned Contracts" means, with respect to each Grantor, all
of such Grantor's rights and remedies under, and all moneys and claims for money
due or to become due to such Grantor under any contracts, and any and all
amendments, supplements, extensions, and renewals thereof, including all rights
and claims of such Grantor now or hereafter existing: (i) under any insurance,
indemnities, warranties, and guarantees provided for or arising out of or in
connection with any of the foregoing agreements; (ii) for any damages arising
out of or for breach or default under or in connection with any of the foregoing
contracts; (iii) to all other amounts from time to time paid or payable under or
in connection with any of the foregoing agreements; or (iv) to exercise or
enforce any and all covenants, remedies, powers and privileges thereunder.
"Blocked Account Agreement" means an agreement among one or
more Grantors, Agent and a Clearing Bank, in form and substance reasonably
satisfactory to Agent, concerning the collection of payments which represent the
proceeds of Accounts or of any other Collateral.
"Chattel Paper" means, with respect to each Grantor, all of
such Grantor's "chattel paper," as such term is defined in the UCC, whether now
owned or hereafter acquired, including electronic chattel paper.
"Clearing Bank" means Bank of America or any other banking
institution with whom a Payment Account has been established pursuant to a
Blocked Account Agreement.
"Commercial Tort Claims" means, with respect to each Grantor,
all of such Grantor's "commercial tort claims," as such term is defined in the
UCC, whether now existing or hereafter arising.
"Deposit Accounts" means, with respect to each Grantor, all of
such Grantor's "deposit accounts," as such term is defined in the UCC, whether
now or hereafter held in the name of such Grantor.
"Documents" means, with respect to each Grantor, all of such
Grantor's "documents," as such term is defined in the UCC, including bills of
lading, warehouse receipts or other documents of title, whether now owned or
hereafter acquired by a Grantor.
"Equipment" means, with respect to each Grantor, all of such
Grantor's now owned and hereafter acquired machinery, equipment, furniture,
furnishings, fixtures, and other tangible personal property (except Inventory),
including embedded software, motor vehicles with respect to which a certificate
of title has been issued, aircraft, dies, tools, jigs, molds and office
equipment, as well as all of such types of property leased by such Grantor and
all of such Grantor's rights and interests with respect thereto under such
leases (including, without limitation, options to purchase); together with all
present and future additions and accessions thereto, replacements therefor,
component and auxiliary parts and supplies used or to be used in connection
therewith, and all substitutes for any of the foregoing, and all manuals,
drawings, instructions, warranties and rights with respect thereto; wherever any
of the foregoing is located.
"Excluded Subsidiary Interests" means all stock, limited
liability company or other like equity security interests owned by a Grantor in
any other Grantor.
"General Intangibles" shall have the meaning given to "general
intangibles" in the UCC and shall include, with respect to each Grantor, all of
such Grantor's now owned or hereafter acquired general intangibles, choses in
action and causes of action and all other intangible personal property of such
Grantor of every kind and nature (other than Accounts), including, without
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limitation, all contract rights, payment intangibles, Proprietary Rights,
corporate or other business records, inventions, designs, blueprints, plans,
specifications, patents, patent applications, trademarks, service marks, trade
names, trade secrets, goodwill, copyrights, computer software, customer lists,
registrations, licenses, franchises, tax refund claims, any funds which may
become due to such Grantor in connection with the termination of any employee
benefit plan or any rights thereto and any other amounts payable to such Grantor
from any employee benefit plan, rights and claims against carriers and shippers,
rights to indemnification, business interruption insurance and proceeds thereof,
property, casualty or any similar type of insurance and any proceeds thereof,
proceeds of insurance covering the lives of key employees on which such Grantor
is beneficiary, rights to receive dividends, distributions, cash, Instruments
and other property in respect of or in exchange for pledged equity interests or
Investment Property and any letter of credit, guarantee, claim, security
interest or other security held by or granted to such Grantor.
"Goods" means, with respect to each Grantor, all of such
Grantor's "goods," as such term is defined in the UCC, wherever located, and
whether now owned or hereafter acquired by such Grantor, including embedded
software to the extent included in "goods," as defined in the UCC, manufactured
homes, standing timber that is cut and removed for sale and unborn young of
animals.
"Instruments" means, with all respect to each Grantor, all of
such Grantor's "instruments," as such term is defined in the UCC, whether now
owned or hereafter acquired by such Grantor.
"Inventory" means, with respect to each Grantor, all of such
Grantor's now owned and hereafter acquired inventory, goods and merchandise,
wherever located, to be furnished under any contract of service or held for sale
or lease, all returned goods, raw materials, work-in-process, finished goods
(including embedded software), other materials and supplies of any kind, nature
or description which are used or consumed in such Grantor's business or used in
connection with the packing, shipping, advertising, selling or finishing of such
goods, merchandise, and all documents of title or other Documents representing
them.
"Investment Property" shall have the meaning given to
"Investment Property" in the UCC, and shall include, with respect to each
Grantor, all of such Grantor's right, title and interest in and to any and all:
(a) securities, whether certificated or uncertificated; (b) securities
entitlements; (c) securities accounts; (d) commodity contracts; or (e) commodity
accounts.
"Letter-of-Credit Rights" means, with respect to each Grantor,
"letter-of-credit rights" as such term is defined in the UCC, now owned or
hereafter acquired by such Grantor, including rights to payment or performance
under a letter of credit, whether or not such Grantor, as beneficiary, has
demanded or is entitled to demand payment or performance.
"Payment Account" means each bank account established pursuant
to this Security Agreement, to which the proceeds of Accounts and other
Collateral are deposited or credited, and which is maintained in the name of
Agent or one or more Grantors, as Agent may determine, on terms acceptable to
Agent.
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"Payment Intangible" shall have the meaning ascribed to it in
the UCC.
"Proprietary Rights" means, with respect to each Grantor, all
of such Grantor's now owned and hereafter arising or acquired: licenses,
franchises, permits, patents, patent rights, copyrights, trademarks, service
marks, trade names, trade styles, patent, trademark and service xxxx
applications, and all licenses and rights related to any of the foregoing, and
all other rights under any of the foregoing, all extensions, renewals, reissues,
divisions, continuations, and continuations-in-part of any of the foregoing, and
all rights to xxx for past, present and future infringement of any of the
foregoing.
"Software" means, with respect to each Grantor, all of such
Grantor's "software," as such term is defined in the UCC, whether now owned or
hereafter acquired by such Grantor, other than software embedded in any category
of Goods, including all computer programs and all supporting information
provided in connection with a transaction related to any program.
"Supporting Obligations" means, with respect to each Grantor,
all of such Grantor's "supporting obligations," as such term is defined in the
UCC.
"UCC" means the Uniform Commercial Code, as in effect from
time to time, of the State of Georgia or of any other state the laws of which
are required as a result thereof to be applied in connection with the issue of
perfection of security interests.
All other capitalized terms used but not otherwise defined
herein have the meanings given to them in the Credit Agreement or in Annex A
thereto. All other undefined terms contained in this Security Agreement, unless
the context indicates otherwise, have the meanings provided for by the UCC to
the extent the same are used or defined therein.
(b) The rules of interpretation contained in Annex A to the
Credit Agreement shall be applicable to this Security Agreement and are hereby
incorporated by reference.
2. GRANT OF LIEN.
(a) As security for the prompt payment and performance of all
Obligations, each Grantor hereby grants to Agent, for the benefit of Agents and
the Lenders, a continuing security interest in, lien on, assignment of and right
of set-off against, all of the following property and assets of such Grantor,
whether now owned or existing or hereafter acquired or arising (irrespective of
whether the same existed on or was created or acquired after the Petition Date),
and regardless of where located:
(i) all Accounts;
(ii) all Goods, including Inventory and Equipment;
(iii) all contract rights;
(iv) all Chattel Paper;
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(v) all Documents;
(vi) all Instruments;
(vii) all Supporting Obligations and Letter-of-Credit Rights;
(viii) all General Intangibles (including Payment Intangibles
and Software);
(ix) all Investment Property other than Excluded Subsidiary
Interests;
(x) all Commercial Tort Claims;
(xi) all money, cash, cash equivalents, securities and other
property of any kind of each Grantor held directly or indirectly by Agent or any
Lender;
(xii) all Deposit Accounts, all credits and balances with and
other claims of each Grantor against Agent or any Lender or any of their
Affiliates or any other financial institution with which a Grantor maintains
deposits, including any Payment Accounts;
(xiii) all books, records and other property related to or
referring to any of the foregoing, including books, records, account ledgers,
data processing records, computer software and other property and General
Intangibles at any time evidencing or relating to any of the foregoing; and
(xiv) all accessions to, substitutions for and replacements,
products and proceeds of any of the foregoing, including, but not limited to,
proceeds of any insurance policies, claims against third parties, and
condemnation or requisition payments with respect to all or any of the
foregoing.
All of the foregoing, together with all equity interests in Subsidiaries pledged
to Agent and all other property of each Grantor in which Agent or any Lender may
at any time be granted a Lien as collateral for the Obligations, is herein
collectively referred to as the "Collateral."
(b) All of the Obligations shall be secured by all of the
Collateral.
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3. PERFECTION, PRIORITY AND PROTECTION OF SECURITY
INTEREST.
(a) Grantors shall, at their expense, perform all steps
requested by Agent at any time to perfect, maintain, protect, and enforce
Agent's Liens, including, at the reasonable request of Agent: (i) executing,
delivering and/or filing and recording of the Mortgages, Patent, Trademark and
Copyright Agreements and executing and filing financing or continuation
statements, and amendments thereof, in form and substance reasonably
satisfactory to Agent; (ii) delivering to Agent warehouse receipts covering any
portion of the Collateral located in warehouses and for which warehouse receipts
are issued and certificates of title covering any portion of the collateral for
which certificates of title have been issued; (iii) when an Event of Default has
occurred and is continuing, transferring Inventory to warehouses or other
locations designated by Agent; (iv) placing notations on each Grantor's books of
account to disclose Agent's security interest; and (v) taking such other steps
as are deemed necessary or desirable by Agent to maintain and protect Agent's
Liens.
(b) Upon Agent's request therefor, Grantors shall use
reasonable efforts to cause such Persons holding possession of Collateral
consisting of certificated securities to execute and deliver control agreements
reasonably satisfactory to Agent relating to such securities, and, upon Agent's
request therefor at any time that any Event of Default exists or at any other
time reasonably requested by Agent, Grantors shall deliver to Agent all
Collateral consisting of negotiable Documents, certificated securities
(accompanied by stock powers executed in blank), Chattel Paper and Instruments
promptly after any Grantor receives the same.
(c) Upon Agent's request therefor at any time that any Event
of Default exists or at any other time reasonably requested by Agent, Grantors
shall obtain authenticated control agreements from each issuer of uncertificated
securities, securities intermediary, or commodities intermediary issuing or
holding any financial assets or commodities to or for any Grantor.
(d) Upon Agent's request therefor at any time that any Event
of Default exists or at any other time reasonably requested by Agent, if any
Grantor is or becomes the beneficiary of a letter of credit having a value
greater than $100,000, such Grantor shall promptly notify Agent thereof and
enter into a tri-party agreement with Agent and the issuer and/or confirmation
bank with respect to Letter-of-Credit Rights assigning such Letter-of-Credit
Rights to Agent and directing all payments thereunder to the Payment Account,
all in form and substance reasonably satisfactory to Agent.
(e) Upon Agent's request therefor at any time that any Event
of Default exists or at any other time reasonably requested by Agent, Grantors
shall take all steps necessary to grant Agent control of all electronic chattel
paper in accordance with the UCC and all "transferable records" as defined in
the Uniform Electronic Transactions Act.
(f) Each Grantor hereby irrevocably authorizes Agent at any
time and from time to time to file in any filing office in any Uniform
Commercial Code jurisdiction any initial financing statements and amendments
thereto that (a) indicate the Collateral (i) as all assets of such Grantor or
words of similar effect, regardless of whether any particular asset comprised in
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the Collateral falls within the scope of Article 9 of the UCC of the State of
Georgia or such jurisdiction, or (ii) as being of an equal or lesser scope or
with greater detail, and (b) contain any other information required by part 5 of
Article 9 of the UCC of the State of Georgia for the sufficiency or filing
office acceptance of any financing statement or amendment, including (i) whether
such Grantor is an organization, the type of organization and any organization
identification number issued to such Grantor, and (ii) in the case of a
financing statement filed as a fixture filing or indicating Collateral as
as-extracted collateral or timber to be cut, a sufficient description of real
property to which the Collateral relates. Each Grantor agrees to furnish any
such information to Agent promptly upon request. Each Grantor also ratifies its
authorization for Agent to have filed in any Uniform Commercial Code
jurisdiction any like initial financing statements or amendments thereto if
filed prior to the date hereof.
(g) Each Grantor shall promptly notify Agent of any Commercial
Tort Claim having a value greater than $100,000 acquired by it and unless
otherwise consented by Agent, such Grantor shall enter into a supplement to this
Security Agreement, granting to Agent a Lien in such commercial tort claim.
(h) From time to time, Grantors shall, upon Agent's request,
execute and deliver confirmatory written instruments pledging to Agent, for the
ratable benefit of Agent and the Lenders, the Collateral, but a Grantor's
failure to do so shall not affect or limit any security interest or any other
rights of Agent or any Lender in and to the Collateral with respect to such
Grantor. So long as the Credit Agreement is in effect and until all Obligations
have been fully satisfied and the Commitments have been terminated, Agent's
Liens shall continue in full force and effect in all Collateral (whether or not
deemed eligible for the purpose of calculating the Availability or as the basis
for any advance, loan, extension of credit, or other financial accommodation).
(i) Good Standing Certificates. Upon Agent's request therefor
at any time that any Event of Default exists or at any other time (but not more
frequently than once during each calendar quarter) reasonably requested by
Agent, each Grantor shall provide to Agent a certificate of good standing from
its state of incorporation or organization.
(j) No Reincorporation. Without limiting the prohibitions on
mergers involving a Grantor contained in the Credit Agreement, no Grantor shall
reincorporate or reorganize itself under the laws of any jurisdiction other than
the jurisdiction in which it is incorporated or organized as of the date hereof
or change its type of entity as identified on Schedule II without the prior
written consent of Agent.
(k) UCC Filings Not Authorized. Until Full Payment of all of
the Obligations, each Grantor acknowledges that (i) it is not authorized to file
or to authorize or consent to the filing of any financing statement or amendment
that relates to a Lien that is not a Permitted Lien, and (ii) it is not
authorized to file any amendment or termination statement or release with
respect to any financing statement in favor of Agent without the prior written
consent of Agent, and agrees that it will not do so without the prior written
consent of Agent, subject to Grantor's rights under Section 9-509(d)(2) of the
UCC.
7
(l) No Restriction on Payments to Agent. No Grantor shall
enter into any contract that restricts or prohibits the grant of a security
interest in Accounts, Chattel Paper, Instruments or payment intangibles or the
proceeds of any of the foregoing.
(m) Liens Under Financing Order. Agent's Liens pursuant to the
provisions of this Security Agreement and pursuant to any of the other DIP
Financing Documents shall be in addition to all Liens conferred upon Agent, for
itself and for the benefit of Lenders, pursuant to the terms of the Financing
Order.
(n) Lien Priority. Agent's Liens pursuant to the provisions of
this Security Agreement and pursuant to any of the DIP Financing Documents shall
be first priority Liens and security interests in the Collateral, except as
otherwise expressly provided in the Financing Order and except for the
Carve-Out.
4. LOCATION OF COLLATERAL. (a) Each Grantor represents and warrants to
Agent and the Lenders that, as of the Closing Date: (A) Schedule I is a correct
and complete list of the location of Grantor's chief executive office and the
locations of the Collateral; and (b) Schedule I correctly identifies any of such
facilities and locations that are not owned by a Grantor and sets forth the
names of the owners and lessors or sublessors of such facilities and locations.
Each Grantor covenants and agrees that it will not (i) maintain any Collateral
at any location other than those locations listed for such Grantor on Schedule
I, (ii) otherwise change or add to any of such locations, or (iii) change the
location of its chief executive office from the location identified in Schedule
I, unless it gives Agent at least thirty (30) days prior written notice thereof.
5. JURISDICTION OF ORGANIZATION. Schedule II hereto identifies each
Grantor's name as of the Closing Date as it appears in official filings in the
state of its incorporation or other organization, the type of entity of such
Grantor (including corporation, partnership, limited partnership or limited
liability company), organizational identification number issued by such
Grantor's state of incorporation or organization or a statement that no such
number has been issued and the jurisdiction in which such Grantor is
incorporated or organized. Each Grantor has only one state of incorporation or
organization.
6. TITLE TO, LIENS ON, AND SALE AND USE OF COLLATERAL. Each Grantor
represents and warrants to Agent and the Lenders and agrees with Agent and the
Lenders that: (a) such Grantor has rights in and the power to transfer all of
the Collateral free and clear of all Liens whatsoever, except for Permitted
Liens; (b) Agent's Liens in the Collateral will not be subject to any prior Lien
except for Senior Permitted Liens; and (c) such Grantor will use, store, and
maintain the Collateral with all reasonable care (ordinary wear and tear
excepted) and will use such Collateral for lawful purposes only.
7. APPRAISALS. Whenever an Event of Default exists, and at such other
times (not more frequently than twice a calendar year) that Agent elects, Agent
may order, at Grantors' expense, appraisals or updates thereof of any or all of
the Collateral from an appraiser, and prepared on a basis, satisfactory to
Agent, such appraisals and updates to include, without limitation, information
required by applicable law and regulation and by the internal policies of the
Lenders.
8
8. ACCESS AND EXAMINATION. Agent, accompanied by any Lender which so
elects, may at all reasonable times during regular business hours (and at any
time when a Default or Event of Default has occurred and is continuing) have
access to, examine, audit, make extracts from or copies of and inspect any or
all of each Grantor's records, files, and books of account and the Collateral,
and discuss such Grantor's affairs with such Grantor's officers and management.
Each Grantor will deliver to Agent any instrument necessary for Agent to obtain
records from any service bureau maintaining records for such Grantor. Agent may,
at any time when a Default or Event of Default exists, and at Grantors' expense,
make copies of all of the books and records of each Grantor, or require Grantors
to deliver such copies to Agent. Agent may, without expense to Agent, use such
Grantor's respective personnel, supplies, and Real Estate as may be reasonably
necessary for maintaining or enforcing Agent's Liens. Agent shall have the
right, at any time, in Agent's name or in the name of a nominee of Agent, to
verify the validity, amount or any other matter relating to the Accounts,
Inventory, or other Collateral, by mail, telephone, or otherwise.
9. COLLATERAL REPORTING. Each Grantor shall provide Agent and each
Lender with the following documents at the following times in form satisfactory
to Agent: (a) at the times specified in Section 1.2(l) of the Credit Agreement,
or more frequently if requested by Agent when an Event of Default exists or
otherwise when reasonably requested by Agent, a schedule of such Grantor's
Accounts created, credits given, cash collected and other adjustments to
Accounts since the last such schedule and a Borrowing Base Certificate; (b) on a
monthly basis, by the 15th day of the following Fiscal Month, or more frequently
if requested by Agent when an Event of Default exists or otherwise when
reasonably requested by Agent, an aging of such Grantor's Accounts, together
with a reconciliation to the corresponding Borrowing Base and to such Grantor's
general ledger; (c) on a monthly basis, by the 15th day of the following Fiscal
Month, or more frequently if requested by Agent when an Event of Default exists
or otherwise when reasonably requested by Agent, an aging of such Grantor's
post-petition accounts payable; (d) on a monthly basis, by the 15th day of the
following Fiscal Month, a detailed calculation of Eligible Accounts and Eligible
Inventory; (e) on a monthly basis, by the 15th day of the following Fiscal
Month, Inventory reports by category and location, together with a
reconciliation to the corresponding Borrowing Base for the period ending closest
to the end of such month and to such Grantor's general ledger; (f) upon Agent's
request, copies of invoices in connection with such Grantor's Accounts, customer
statements, credit memos, remittance advices and reports, deposit slips,
shipping and delivery documents in connection with such Grantor's Accounts and
for Inventory and Equipment acquired by such Grantor, purchase orders and
invoices; (g) upon request, a statement of the balance of each of the
intercompany Accounts; (h) such other reports as to the Collateral of such
Grantor as Agent shall reasonably request from time to time; and (i) with the
delivery of the items set forth in clauses (a) through (e) above, a certificate
of such Grantor executed by an officer thereof certifying in all material
respects as to the accuracy and completeness of the foregoing. If any Grantor's
records or reports of the Collateral are prepared by an accounting service or
other agent, such Grantor hereby authorizes such service or agent to deliver
such records, reports, and related documents to Agent, for distribution to the
Lenders.
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10. ACCOUNTS.
(a) Each Grantor hereby represents and warrants to Agents and
the Lenders, with respect to such Grantor's Accounts, that: (i) each existing
Account represents, and each future Account will represent, a bona fide sale or
lease and delivery of goods by such Grantor, or rendition of services by such
Grantor, in the ordinary course of such Grantor's business; (ii) each existing
Account is, and each future Account will be, for a liquidated amount payable by
the Account Debtor thereon on the terms set forth in the invoice therefor or in
the schedule thereof delivered to Agent, without any offset, deduction, defense,
or counterclaim except those known to such Grantor and disclosed to Agent and
the Lenders in writing (including disclosure of same on any Borrowing Base
Certificate); (iii) no payment will be received with respect to any Account, and
no credit, discount, or extension, or agreement therefor will be granted on any
Account, except as reported to Agent and the Lenders in Borrowing Base
Certificates delivered in accordance with this Security Agreement; (iv) each
copy of an invoice delivered to Agent by such Grantor will be a genuine copy of
the original invoice sent to the Account Debtor named therein; and (v) all Goods
described in any invoice representing a sale of Goods will have been delivered
to the Account Debtor and all services of such Grantor described in each invoice
will have been performed.
(b) No Grantor shall re-date any invoice or sale or make sales
on extended dating beyond that customary in such Grantor's business or extend or
modify any Account. If a Grantor becomes aware of any matter adversely affecting
the collectibility of any Account or the Account Debtor therefor involving an
amount greater than $1,000,000, including information regarding the Account
Debtor's creditworthiness, such Grantor will promptly so advise Agent and
exclude such Account from Eligible Accounts to the extent required under the
definition thereof in the Credit Agreement.
(c) No Grantor shall accept any note or other instrument
(except a check or other instrument for the immediate payment of money) with
respect to any Account constituting an Eligible Account without Agent's written
consent. If Agent consents to the acceptance of any such instrument, it shall be
considered as evidence of the Account and not payment thereof and such Grantor,
at Agent's request, will promptly deliver such instrument to Agent, endorsed by
such Grantor to Agent in a manner satisfactory in form and substance to Agent.
Regardless of the form of presentment, demand, notice of protest with respect
thereto, such Grantor shall remain liable thereon until such instrument is paid
in full.
(d) Each Grantor shall notify Agent promptly of all disputes
and claims in excess of $1,000,000 with any Account Debtor, and agrees to
settle, contest, or adjust such dispute or claim at no expense to Agent or any
Lender. No discount, credit or allowance shall be granted to any such Account
Debtor without Agent's prior written consent, except for discounts, credits and
allowances made or given in the ordinary course of a Grantor's business when no
Event of Default exists hereunder. Each Grantor shall send Agent a copy of each
credit memorandum in excess of $1,000,000 as soon as issued, and such Grantor
shall promptly report that credit on Borrowing Base Certificates submitted by
it. Agent may at all times when an Event of Default exists hereunder, settle or
adjust disputes and claims directly with Account Debtors for amounts and upon
terms which Agent (or the Majority Lenders, as applicable) shall consider
10
advisable and, in all cases, Agent will credit such Grantor's Loan Account with
the net amounts received by Agent in payment of any Accounts.
11. COLLECTION OF ACCOUNTS; PAYMENTS.
(a) On or prior to the date hereof or as soon as practicable
thereafter, Grantors shall establish a lock-box service for collections of
Accounts at a financial institution acceptable to Agent. Grantors shall instruct
all Account Debtors to make all payments directly to the address established for
such service. If, notwithstanding such instructions, a Grantor receives any
proceeds of Accounts, it shall receive such payments as Agent's trustee, and
shall immediately deliver such payments to Agent in their original form duly
endorsed in blank or deposit them into a Payment Account, as Agent may direct.
(b) Grantors shall make collection of all Accounts and other
Collateral for Agent, shall receive all payments as Agent's trustee, and, as
soon as practicable following the Closing Date, immediately shall deliver all
payments, which payments shall be in their original form duly endorsed in blank
into a Payment Account established for the account of Grantors at a Clearing
Bank acceptable to Agent, subject to a Blocked Account Agreement; provided,
however, that Grantors shall cause any and all Payment Accounts to be
transferred to and thereafter maintained exclusively at Bank of America no later
than thirty (30) days after the Closing Date.
(c) Grantors and Agent shall cause all collected balances in
each Payment Account, subject to any minimum balance and like requirements of
the relevant bank, to be transmitted on each Business Day by wire, ACH transfer
or other means in accordance with the procedures set forth in the corresponding
Blocked Account Agreement to Agent for application to the Obligations in
accordance with the terms of the Credit Agreement.
(d) Grantors agree promptly to execute and deliver such other
documentation relative to cash management as Agent may reasonably request,
including any documentation necessary or appropriate, in Agent's sole
discretion, to permit Agent to exercise dominion over any and all Payment
Accounts.
(e) Anything to the contrary in this Section 11
notwithstanding, Agent or Agent's designee may, at any time after the occurrence
of an Event of Default, notify Account Debtors that the Accounts have been
assigned to Agent and of Agent's security interest therein, and may collect them
directly and charge the collection costs and expenses to the Loan Account as a
Revolving Loan. So long as an Event of Default has occurred and is continuing,
each Grantor, at Agent's request, shall execute and deliver to Agent such
documents as Agent shall require to grant Agent access to any post office box in
which collections of Accounts are received.
(f) All payments, including immediately available funds,
received by Agent at a bank account designated by it will be Agent's sole
property for its benefit and the benefit of the Lenders and will be credited to
the Loan Account (conditional upon final collection) after allowing two (2)
Business Days for collection; provided, however, that such payments shall be
11
deemed to be credited to the Loan Account immediately upon receipt for purposes
of (i) determining Availability, (ii) calculating the Unused Line Fee pursuant
to the Credit Agreement, and (iii) calculating the amount of interest accrued
thereon solely for purposes of determining the amount of interest to be
distributed by Agent to the Lenders (but not the amount of interest payable by
Grantors). In the event Grantors repay all of the Obligations upon the
termination of the DIP Facility (and the Commitments thereunder) or upon
acceleration of the Obligations, other than through Agent's receipt of payments
on account of the Accounts or proceeds of the other Collateral, such payment
will be credited (conditioned upon final collection) to Grantors' Loan Account
upon Agent's receipt of immediately available funds.
12. INVENTORY; PERPETUAL INVENTORY.
(a) Each Grantor represents and warrants to Agents and the
Lenders and agrees with Agents and the Lenders that all of the Inventory owned
by such Grantor is and will be held for sale or lease, or to be furnished in
connection with the rendition of services, in the ordinary course of such
Grantor's business, and is and will be fit for such purposes. Each Grantor will
keep its Inventory in good and marketable condition, except for damaged or
defective goods arising in the ordinary course of such Grantor's business.
Grantor will not, without the prior written consent of Agent, acquire or accept
any Inventory on consignment or approval except as disclosed to Agent. Each
Grantor agrees that all Inventory produced by such Grantor in the United States
of America will be produced in accordance with the Federal Fair Labor Standards
Act of 1938, as amended, and all rules, regulations, and orders thereunder.
Grantors will conduct a physical count of the Inventory at least once per Fiscal
Year, and after and during the continuation of an Event of Default, at such
other times as Agent requests. Grantors will maintain a perpetual inventory
reporting system at all times (or will otherwise account for the existence of
all Inventory to the satisfaction of Agent); or
(b) Grantors will not, without Agent's written consent, sell
any Inventory on a xxxx-and-hold, guaranteed sale, sale and return, sale on
approval, consignment, or other repurchase or return basis.
(c) In connection with all Inventory financed by Letters of
Credit, Grantors will, at Agent's request, instruct all suppliers, carriers,
forwarders, customs brokers, warehouses or others receiving or holding cash,
checks, Inventory, Documents or Instruments in which Agent holds a security
interest to deliver them to Agent and/or subject to Agent's order, and if they
shall come into a Grantor's possession, to deliver them, upon request, to Agent
in their original form. Grantors shall also, at Agent's request, designate Agent
as the consignee on all bills of lading and other negotiable and non-negotiable
documents.
13. EQUIPMENT.
(a) Each Grantor represents and warrants to Agents and the
Lenders and agrees with Agents and the Lenders that all of the Equipment owned
by such Grantor is and will be used or held for use in such Grantor's business,
and is and will be fit for such purposes, other than obsolete Equipment or
Equipment no longer used or useful in the Grantor's business having an aggregate
book value of not greater than $5,000,000. Each Grantor shall keep and maintain
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all Equipment used in its business in good operating condition and repair
(ordinary wear and tear excepted) and shall make all necessary replacements
thereof.
(b) Subject to the restrictions on each Grantor's right to use
or dispose of Equipment pursuant to the DIP Financing Documents and the
Bankruptcy Code, such Grantor shall promptly inform Agent of any material
additions to or deletions from the Equipment. Grantors shall not permit any
Equipment to become a fixture with respect to real property or to become an
accession with respect to other personal property with respect to which real or
personal property Agent does not have a Lien. Grantors will not, without Agent's
prior written consent, alter or remove any identifying symbol or number on any
Grantor's Equipment constituting Collateral.
(c) Except as set forth in the Credit Agreement, the Financing
Order or other orders of the Court (after notice and hearing and with the prior
written consent of the Majority Lenders as set forth in subclause (v) of the
definition of "Permitted Asset Dispositions" in the Credit Agreement), Grantors
shall not, without Agent's prior written consent, sell, license, lease as a
lessor, or otherwise dispose of any Equipment.
14. ASSIGNED CONTRACTS. Without limiting any Borrower's right
to reject or not perform any Assigned Contract in the exercise of its business
judgment, each Grantor shall fully perform in all material respects all of its
obligations under each of the Assigned Contracts to which it is a party, and
shall enforce all of its rights and remedies thereunder, in each case, as it
deems appropriate in its business judgment; provided, however, that no Grantor
shall take any action or fail to take any action which would cause the
termination of any Assigned Contract material to its business. Without limiting
the generality of the foregoing, each Grantor shall take all action necessary or
appropriate to permit, and shall not take any action which would have any
materially adverse effect upon, the full enforcement of all indemnification
rights under any Assigned Contract material to its business. Each Grantor shall
notify Agent and the Lenders in writing, promptly after such Grantor becomes
aware thereof, of any event or fact which could give rise to a material claim by
it for indemnification under any of its Assigned Contracts, and shall diligently
pursue such right in the exercise of its business judgment and report to Agent
and Lenders on all further developments with respect thereto. Each Grantor shall
deposit into the Payment Account or remit directly to Agent for application to
the Obligations in accordance with Section 3.6 of the Credit Agreement, all
amounts received by such Grantor as indemnification or otherwise pursuant to its
Assigned Contracts. If any Grantor shall fail after Agent's demand to pursue
diligently any material right under its Assigned Contracts, or if an Event of
Default then exists, Agent may, and at the direction of the Majority Lenders
shall, directly enforce such right in its own or such Grantor's name and may
enter into such settlements or other agreements with respect thereto as Agent
(or Majority Lenders, as applicable) shall determine. In any suit, proceeding or
action brought by Agent for the benefit of the Lenders under any Assigned
Contract for any sum owing thereunder or to enforce any provision thereof,
Grantors jointly and severally shall indemnify and hold Agents and the Lenders
harmless from and against all expense, loss or damage suffered by reason of any
defense, setoff, counterclaims, recoupment, or reduction of liability whatsoever
of the obligor thereunder arising out of a breach by a Grantor of any obligation
thereunder or arising out of any other agreement, indebtedness or liability at
any time owing from a Grantor to or in favor of such obligor or its successors.
Each Grantor's obligations under the Assigned Contracts to which it is a party
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shall be and remain enforceable only against such Grantor and shall not be
enforceable against Agents or the Lenders. Notwithstanding any provision hereof
to the contrary, each Grantor shall at all times remain liable to observe and
perform all of its duties and obligations under its Assigned Contracts, and
Agent's or any Lender's exercise of any of their respective rights with respect
to the Collateral shall not release such Grantor from any of such duties and
obligations. Neither Agent nor any Lender shall be obligated to perform or
fulfill any Grantor's duties or obligations under its Assigned Contracts or to
make any payment thereunder, or to make any inquiry as to the nature or
sufficiency of any payment or property received by it thereunder or the
sufficiency of performance by any party thereunder, or to present or file any
claim, or to take any action to collect or enforce any performance, any payment
of any amounts, or any delivery of any property.
15. DOCUMENTS, INSTRUMENTS, AND CHATTEL PAPER. Each Grantor represents
and warrants to Agents and the Lenders that (a) all Documents, Instruments, and
Chattel Paper describing, evidencing, or constituting Collateral, and all
signatures and endorsements thereon, are and will be complete, valid, and
genuine, and (b) all Goods of such Grantor evidenced by such Documents,
Instruments, Letter-of-Credit Rights and Chattel Paper are and will be owned by
a Grantor, free and clear of all Liens other than Permitted Liens. If a Grantor
retains possession of any Chattel Paper or Instruments with Agent's consent,
such Chattel Paper and Instruments shall be marked with the following legend:
"This writing and the obligations evidenced or served hereby are subject to the
security interest of Bank of America, N.A., as Agent, for the benefit of Agent
and certain Lenders."
16. RIGHT TO CURE. Agent may in its discretion, and shall, at the
direction of the Majority Lenders, pay any amount or do any act required of a
Grantor hereunder or under any other DIP Financing Document in order to
preserve, protect, maintain or enforce the Obligations, the Collateral or
Agent's Liens thereon, and which such Grantor fails to pay or do, including
payment of any judgment against such Grantor, any insurance premium, any
warehouse charge, any finishing or processing charge, any landlord's or bailee's
claim, and any other Lien upon or with respect to the Collateral. All payments
that Agent makes under this Section 16 and all out-of-pocket costs and expenses
that Agent pays or incurs in connection with any action taken by it hereunder
shall be charged to the Loan Account as a Revolving Loan. Any payment made or
other action taken by Agent under this Section 16 shall be without prejudice to
any right to assert an Event of Default hereunder and to proceed thereafter as
herein provided.
17. POWER OF ATTORNEY. Each Grantor hereby appoints Agent and Agent's
designee as such Grantor's attorney, with power: (a) to endorse such Grantor's
name on any checks, notes, acceptances, money orders, or other forms of payment
or security that come into Agent's or any Lender's possession; (b) to sign such
Grantor's name on any invoice, xxxx of lading, warehouse receipt or other
negotiable or non-negotiable Document constituting Collateral, on drafts against
customers, on assignments of Accounts, on notices of assignment, financing
statements and other public records and to file any such financing statements by
electronic means with or without a signature as authorized or required by
applicable law or filing procedure; (c) so long as any Event of Default has
occurred and is continuing, to notify the post office authorities to change the
address for delivery of such Grantor's mail to an address designated by Agent
and to receive, open and dispose of all mail addressed to such Grantor; (d) to
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send requests for verification of Accounts to customers or Account Debtors; (e)
to complete in such Grantor's name or Agent's name, any order, sale or
transaction, obtain the necessary Documents in connection therewith, and collect
the proceeds thereof; (f) to clear Inventory through customs in such Grantor's
name, Agent's name or the name of Agent's designee, and to sign and deliver to
customs officials powers of attorney in such Grantor's name for such purpose;
(g) to the extent that a Grantor's authorization given in Section 3(f) of this
Security Agreement is not sufficient, to file such financing statements,
amendments thereto and continuation statements, in each case with respect to
this Security Agreement, as Agent may deem appropriate; and (h) to do all things
necessary to carry out the purposes and intent of the Credit Agreement and this
Security Agreement. Each Grantor ratifies and approves all acts of such
attorney. Neither Agents nor any Lender, nor any of their attorneys, will be
liable for any acts or omissions or for any error of judgment or mistake of fact
or law except for their gross negligence or willful misconduct. This power,
being coupled with an interest, is irrevocable until the DIP Facility (and each
of the Commitments thereunder) has been terminated and the Obligations have been
fully satisfied.
18. AGENT'S AND LENDER'S RIGHTS, DUTIES AND LIABILITIES.
(a) Grantors assume all responsibility and liability arising
from or relating to the use, sale, license or other disposition of the
Collateral. The Obligations shall not be affected by any failure of Agent or any
Lender to take any steps to perfect Agent's Liens or to collect or realize upon
the Collateral, nor shall loss of or damage to the Collateral release Grantors
from their joint and several liability for any of the Obligations. Following the
occurrence and during the continuation of an Event of Default, but subject to
any limitations or notice requirements in the Financing Order, Agent may (but
shall not be required to), and at the direction of the Majority Lenders shall,
without notice to or consent from Grantors, xxx upon or otherwise collect,
extend the time for payment of, modify or amend the terms of, compromise or
settle for cash, credit, or otherwise upon any terms, grant other indulgences,
extensions, renewals, compositions, or releases, and take or omit to take any
other action with respect to the Collateral, any security therefor, any
agreement relating thereto, any insurance applicable thereto, or any Person
liable directly or indirectly in connection with any of the foregoing, without
discharging or otherwise affecting the joint and several liability of Grantors
for the balance of the Obligations or under the Credit Agreement or any other
agreement now or hereafter existing between Agent and/or any Lender and such
Grantors.
(b) It is expressly agreed by Grantors that, anything herein
to the contrary notwithstanding, each Grantor shall remain liable under each of
its contracts and each of its licenses to observe and perform all the conditions
and obligations to be observed and performed by it thereunder. Neither Agent nor
any Lender shall have any obligation or liability under any contract or license
by reason of or arising out of this Security Agreement or the granting herein of
a Lien thereon or the receipt by Agent or any Lender of any payment relating to
any contract or license pursuant hereto. Neither Agent nor any Lender shall be
required or obligated in any manner to perform or fulfill any of the obligations
of Grantor under or pursuant to any contract or license, or to make any payment,
or to make any inquiry as to the nature or the sufficiency of any payment
received by it or the sufficiency of any performance by any party under any
contract or license, or to present or file any claims, or to take any action to
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collect or enforce any performance or the payment of any amounts which may have
been assigned to it or to which it may be entitled at any time or times.
(c) Subject to any limitations or notice requirements in the
Financing Order, Agent may at any time after a Default or an Event of Default
has occurred and is continuing (or if any rights of set-off (other than set-offs
against an Account arising under the contract giving rise to the same Account)
or contra accounts may be asserted with respect to the following), without prior
notice to Grantor, notify Account Debtors, and other Persons obligated on the
Collateral that Agent has a security interest therein, and that payments shall
be made directly to Agent, for itself and the benefit of Lenders. Upon the
request of Agent, Grantors shall so notify Account Debtors and other Persons
obligated on Collateral. Once any such notice has been given to any Account
Debtor or other Person obligated on the Collateral, Grantors shall not give any
contrary instructions to such Account Debtor or other Person without Agent's
prior written consent.
(d) Agent may at any time in Agent's own name or in the name
of any Grantor communicate with Account Debtors, parties to contracts and
obligors in respect of Instruments to verify with such Persons, to Agent's
satisfaction, the existence, amount and terms of Accounts, payment intangibles,
Instruments or Chattel Paper. If a Default or Event of Default shall have
occurred and be continuing, Grantors, at their own expense, shall cause the
independent certified public accountants then engaged by Grantors to prepare and
deliver to Agent and each Lender at any time and from time to time promptly upon
Agent's request the following reports with respect to Grantors: (i) a
reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial
balances; and (iv) a test verification of such Accounts as Agent may request.
Grantors, at their own expense, shall deliver to Agent the results of each
physical verification, if any, which Grantors may in their discretion have made,
or caused any other Person to have made on their behalf, of all or any portion
of its Inventory.
19. INDEMNIFICATION. In any suit, proceeding or action brought by Agent
or any Lender relating to any Collateral for any sum owing with respect thereto
or to enforce any rights or claims with respect thereto, Grantors shall jointly
and severally save, indemnify and keep Agents and Lenders harmless from and
against all expense (including reasonable attorneys' fees and expenses), loss or
damage suffered by reason of any defense, setoff, counterclaim, recoupment or
reduction of liability whatsoever of the Account Debtor or other Person
obligated on the Collateral, arising out of a breach by any Grantor of any
obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to, or in favor of, such obligor or its successors
from a Grantor, except in the case of Agents or any Lender, to the extent such
expense, loss, or damage is attributable solely to the gross negligence or
willful misconduct of Agent or such Lender as finally determined by a court of
competent jurisdiction. All such obligations of Grantors shall be and remain
enforceable against and only against Grantors and shall not be enforceable
against Agents or any Lender.
20. LIMITATION ON LIENS ON COLLATERAL. Grantors will not create, permit
or suffer to exist, and will defend the Collateral against, and take such other
action as is necessary to remove, any Lien on the Collateral except Permitted
Liens, and, at Agent's request, will defend the right, title and interest of
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Agent and Lenders in and to each Grantor's rights under the Collateral against
the claims and demands of all Persons whomsoever.
21. NOTICE REGARDING COLLATERAL. Grantors will advise Agent promptly,
in reasonable detail, (i) of any Lien (other than Permitted Liens) or claim made
or asserted against any of the Collateral, and (ii) of the occurrence of any
other event which has had or could reasonably be expected to have a Material
Adverse Effect.
22. REMEDIES; RIGHTS UPON DEFAULT.
(a) In addition to all other rights and remedies granted to it
under this Security Agreement, the Credit Agreement, the other DIP Financing
Documents and under any other instrument or agreement securing, evidencing or
relating to any of the Obligations, if any Event of Default shall have occurred
and be continuing, Agent may and, at the direction of the Majority Lenders
shall, exercise all rights and remedies of a secured party under the UCC and
other applicable law. Without limiting the generality of the foregoing, Grantor
expressly agrees that in any such event Agent, without demand of performance or
other demand, advertisement or notice of any kind (except the notice specified
below of time and place of public or private sale) to or upon Grantors or any
other Person (all and each of which demands, advertisements and notices are
hereby expressly waived to the maximum extent permitted by the UCC and other
applicable law), may forthwith enter upon the premises of Grantor where any
Collateral is located through self-help, without judicial process, without first
obtaining a final judgment or giving any Grantor or any other Person notice and
opportunity for a hearing on Agent's claim or action and may collect, receive,
assemble, process, appropriate and realize upon the Collateral, or any part
thereof, and may forthwith sell, lease, license, assign, give an option or
options to purchase, or sell or otherwise dispose of and deliver said Collateral
(or contract to do so), or any part thereof, in one or more parcels at a public
or private sale or sales, at any exchange at such prices as it may deem
acceptable, for cash or on credit or for future delivery without assumption of
any credit risk. Agent or any Lender shall have the right upon any such public
sale or sales and, to the extent permitted by law, upon any such private sale or
sales, to purchase for the benefit of Agents and Lenders, the whole or any part
of said Collateral so sold, free of any right or equity of redemption, which
equity of redemption Grantors hereby release. Such sales may be adjourned and
continued from time to time with or without notice. Agent shall have the right
to conduct such sales on any Grantor's premises or elsewhere and shall have the
right to use such Grantor's premises, without charge, for such time or times as
Agent deems necessary or advisable.
(b) Grantors further agree, at Agent's request, to assemble
the Collateral and make it available to Agent at a place or places designated by
Agent which are reasonably convenient to Agent and Grantors, whether at a
Grantor's premises or elsewhere. Until Agent is able to effect a sale, lease, or
other disposition of Collateral, Agent shall have the right to hold or use
Collateral, or any part thereof, to the extent that it deems appropriate for the
purpose of preserving Collateral or its value or for any other purpose deemed
appropriate by Agent. Agent shall have no obligation to Grantors to maintain or
preserve the rights of any Grantor as against third parties with respect to
Collateral while Collateral is in the possession of Agent. Agent may, if it so
elects, seek the appointment of a receiver or keeper (and Grantor hereby waives
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any bond requirement in relation thereto) to take possession of Collateral and
to enforce any of Agent's remedies (for the benefit of Agent and Lenders), with
respect to such appointment without prior notice or hearing as to such
appointment. Agent shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale to the Obligations as
provided in the Credit Agreement, and only after so paying over such net
proceeds, and after the payment by Agent of any other amount required by any
provision of law, need Agent account for the surplus, if any, to Grantors. To
the maximum extent permitted by applicable law, each Grantor waives all claims,
damages, and demands against Agents or any Lender arising out of the
repossession, retention or sale of the Collateral except such as arise solely
out of the gross negligence or willful misconduct of either of the Agents or
such Lender as finally determined by a court of competent jurisdiction. Grantors
agree that ten (10) days prior notice by Agent of the time and place of any
public sale or of the time after which a private sale may take place is
reasonable notification of such matters. Grantors shall remain jointly and
severally liable for any deficiency if the proceeds of any sale or disposition
of the Collateral are insufficient to pay all Obligations, including any
attorneys' fees or other expenses incurred by Agent or any Lender to collect
such deficiency.
(c) Except as otherwise specifically provided herein, each
Grantor hereby waives presentment, demand, protest or any notice (to the maximum
extent permitted by applicable law) of any kind in connection with this Security
Agreement or any Collateral.
(d) To the extent that applicable law imposes duties on Agent
to exercise remedies in a commercially reasonable manner, each Grantor
acknowledges and agrees that it is not commercially unreasonable for Agent (a)
to fail to incur expenses reasonably deemed significant by Agent to prepare
Collateral for disposition or otherwise to complete raw material or
work-in-process into finished goods or other finished products for disposition,
(b) to fail to obtain third party consents for access to Collateral to be
disposed of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (c) to fail to exercise collection
remedies against Account Debtors or other Persons obligated on Collateral or to
remove Liens on or any adverse claims against Collateral, (d) to exercise
collection remedies against Account Debtors and other Persons obligated on
Collateral directly or through the use of collection agencies and other
collection specialists, (e) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (f) to contact other Persons, whether or not in the
same business as Grantors, for expressions of interest in acquiring all or any
portion of such Collateral, (g) to hire one or more professional auctioneers to
assist in the disposition of Collateral, whether or not the Collateral is of a
specialized nature, (h) to dispose of Collateral by utilizing internet sites
that provide for the auction of assets of the types included in the Collateral
or that have the reasonable capacity of doing so, or that match buyers and
sellers of assets, (i) to dispose of assets in wholesale rather than retail
markets, (j) to disclaim disposition warranties, such as title, possession or
quiet enjoyment, (k) to purchase insurance or credit enhancements to insure
Agent against risks of loss, collection or disposition of Collateral or to
provide to Agent a guaranteed return from the collection or disposition of
Collateral, or (l) to the extent deemed appropriate by Agent, to obtain the
services of other brokers, investment bankers, consultants and other
professionals to assist Agent in the collection or disposition of any of the
Collateral. Each Grantor acknowledges that the purpose of this Section 22(d) is
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to provide non-exhaustive indications of what actions or omissions by Agent
would not be commercially unreasonable in Agent's exercise of remedies against
the Collateral and that other actions or omissions by Agent shall not be deemed
commercially unreasonable solely on account of not being indicated in this
Section 22(d). Without limitation upon the foregoing, nothing contained in this
Section 22(d) shall be construed to grant any rights to Grantors or to impose
any duties on Agent that would not have been granted or imposed by this Security
Agreement or by applicable law in the absence of this Section 22(d).
(e) Notwithstanding anything to the contrary contained in this
Section 22, Agent's authority to exercise its remedies shall be subject to the
notice provisions and any other limitations in respect of the exercise of
Agent's remedies contained in the Financing Order. In addition, as among Agents
and Lenders, Agent's authority to exercise remedies shall be subject to the
obligation of Agent to confer with Lenders, as provided in Section 12.5 of the
Credit Agreement, but such obligation shall not inure to the benefit of any
Grantor, and Grantors shall not have authority to enforce or rely upon such
provisions.
23. GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY. For the purpose of
enabling Agent to exercise rights and remedies under Section 22 hereof
(including, without limiting the terms of Section 22 hereof, in order to take
possession of, hold, preserve, process, assemble, prepare for sale, market for
sale, sell or otherwise dispose of Collateral) at such time as Agent shall be
lawfully entitled to exercise such rights and remedies, each Grantor hereby
grants to Agent, for the benefit of Agents and Lenders, an irrevocable,
nonexclusive license (exercisable without payment of royalty or other
compensation to Grantor) to use, license or sublicense any Proprietary Rights
now owned or hereafter acquired by such Grantor, and wherever the same may be
located, and including in such license access to all media in which any of the
licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof.
24. LIMITATION ON AGENT'S AND LENDERS' DUTY IN RESPECT OF COLLATERAL.
Agents and each Lender shall use reasonable care with respect to the Collateral
in its possession or under its control. Neither Agents nor any Lender shall have
any other duty as to any Collateral in its possession or control or in the
possession or control of any Agent or nominee of Agent or such Lender, or any
income thereon or as to the preservation of rights against prior parties or any
other rights pertaining thereto.
25. MISCELLANEOUS.
(a) Reinstatement. This Security Agreement shall remain in
full force and effect and continue to be effective should any Grantor make an
assignment for the benefit of any creditor or creditors or should a receiver or
trustee be appointed for all or any significant part of Grantor's assets, and
shall continue to be effective or be reinstated, as the case may be, if at any
time payment and performance of the Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Obligations, whether as a "voidable
preference," "fraudulent conveyance," or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
19
thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
(b) Notices. Except as otherwise provided herein, whenever it
is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other party, or whenever any of the parties desires to
give and serve upon any other party any communication with respect to this
Security Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall be given in the
manner, and deemed received, as provided for in the Credit Agreement.
(c) Severability. Whenever possible, each provision of this
Security Agreement shall be interpreted in a manner as to be effective and valid
under applicable law, but if any provision of this Security Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without invalidating
the remainder of such provision or the remaining provisions of this Security
Agreement. This Security Agreement is to be read, construed and applied together
with the Credit Agreement, the Financing Order and the other DIP Financing
Documents which, taken together, set forth the complete understanding and
agreement of Agents, Lenders and Grantors with respect to the matters referred
to herein and therein.
(d) No Waiver; Cumulative Remedies. Neither Agents nor any
Lender shall by any act, delay, omission or otherwise be deemed to have waived
any of its rights or remedies hereunder, and no waiver shall be valid unless
given in writing in accordance with Section 11.1 of the Credit Agreement and
then only to the extent therein set forth. A waiver by Agents and the Lenders of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which Agents and the Lenders would otherwise have had
on any future occasion. No failure to exercise nor any delay in exercising on
the part of Agents or any Lender, any right, power or privilege hereunder, shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or future exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies hereunder provided are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights and remedies provided by law.
None of the terms or provisions of this Security Agreement may be waived,
altered, modified or amended except by an instrument in writing, duly executed
in accordance with the provisions of Section 11.1 of the Credit Agreement. In
the event of any inconsistency between the Credit Agreement and this Agreement,
the terms of the Credit Agreement shall control.
(e) Limitation by Law. All rights, remedies and powers
provided in this Security Agreement may be exercised only to the extent that the
exercise thereof does not violate any applicable provision of law or the
Financing Order, and all the provisions of this Security Agreement are intended
to be subject to all applicable mandatory provisions of law that may be
controlling and to be limited to the extent necessary so that they shall not
render this Security Agreement invalid, unenforceable, in whole or in part, or
not entitled to be recorded, registered or filed under the provisions of any
applicable law.
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(f) Termination of this Security Agreement. Subject to Section
25(a) hereof, this Security Agreement shall terminate upon (i) the termination
of the DIP Facility (and the Lenders' Commitments thereunder) and (ii) the
satisfactory collateralization of all Letters of Credit and the Full Payment of
all other Obligations (other than indemnification Obligations as to which no
claim has been asserted).
(g) Successors and Assigns. This Security Agreement and all
obligations of Grantor hereunder shall be binding upon the successors and
assigns of each Grantor (including any trustee appointed or elected in a
Grantor's Chapter 11 Case or a superseding case under Chapter 7 of the
Bankruptcy Code) and shall, together with the rights and remedies of Agent, for
the benefit of Agents and Lenders, hereunder, inure to the benefit of Agents and
Lenders, all future holders of any instrument evidencing any of the Obligations
and their respective successors and assigns. No sales of participations, other
sales, assignments, transfers or other dispositions of any agreement governing
or instrument evidencing the Obligations or any portion thereof or interest
therein shall in any manner affect the Lien granted to Agent, for the benefit of
Agents and Lenders, hereunder. No Grantor may assign, sell, hypothecate or
otherwise transfer any interest in or obligation under this Security Agreement.
(h) Counterparts. This Security Agreement may be authenticated
in any number of separate counterparts, each of which shall collectively and
separately constitute one and the same agreement. This Security Agreement may be
authenticated by manual signature, facsimile or, if approved in writing by
Agent, electronic means, all of which shall be equally valid.
(i) Governing Law; Choice of Venue. THIS SECURITY AGREEMENT
SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO
DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA (WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF, PROVIDED THAT PERFECTION
ISSUES WITH RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE CHOICE
OR CONFLICT OF LAW RULES SET FORTH IN ARTICLE 9 OF THE UCC); PROVIDED THAT AGENT
AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS SECURITY
AGREEMENT OR ANY OTHER DIP FINANCING DOCUMENT THAT IS NOT REQUIRED TO BE BROUGHT
IN THE U.S. BANKRUPTCY COURT WHERE THE CHAPTER 11 CASES ARE PENDING MAY BE
BROUGHT IN THE COURTS OF THE STATE OF GEORGIA OR OF THE UNITED STATES OF AMERICA
LOCATED IN XXXXXX COUNTY, GEORGIA, AND BY EXECUTION AND DELIVERY OF THIS
SECURITY AGREEMENT, EACH OF THE GRANTORS, AGENTS AND THE LENDERS CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. EACH OF THE GRANTORS, AGENTS AND THE LENDERS IRREVOCABLY WAIVES
ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
SECURITY AGREEMENT OR ANY DOCUMENT RELATED HERETO. NOTWITHSTANDING THE
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FOREGOING: (1) AGENTS AND THE LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION
OR PROCEEDING AGAINST GRANTORS OR THEIR PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION AGENTS OR THE LENDERS DEEM NECESSARY OR APPROPRIATE IN ORDER TO
REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS; (2) AGENTS AND
THE LENDERS SHALL BRING ANY ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT
IN THE COURT, TO THE EXTENT THAT AGENTS AND THE LENDERS ARE REQUIRED TO DO SO BY
THE FINANCING ORDER OR THE BANKRUPTCY CODE; AND (3) EACH OF THE PARTIES HERETO
ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE IMMEDIATELY
PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE
JURISDICTIONS.
(j) Waiver of Jury Trial. THE GRANTORS, THE LENDERS AND AGENTS
EACH IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS SECURITY
AGREEMENT, THE OTHER DIP FINANCING DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY ADMINISTRATIVE
AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE. THE GRANTORS, THE LENDERS AND AGENTS EACH
AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL
WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT
THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION
AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN
PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS SECURITY AGREEMENT OR
THE OTHER DIP FINANCING DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS SECURITY AGREEMENT AND THE OTHER DIP FINANCING DOCUMENTS.
(k) Section Titles. The Section titles contained in this
Security Agreement are and shall be without substantive meaning or content of
any kind whatsoever and are not a part of the agreement between the parties
hereto.
(l) No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Security Agreement.
In the event an ambiguity or question of intent or interpretation arises, this
Security Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any provisions of this Security
Agreement.
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(m) Advice of Counsel. Each of the parties represents to each
other party hereto that it has discussed this Security Agreement and,
specifically, the provisions of Section 25(i) and Section 25(j), with its
counsel.
(n) Benefit of Lenders. All Liens granted or contemplated
hereby shall be for the benefit of Agents and Lenders, and all proceeds or
payments realized from Collateral in accordance herewith shall be applied to the
Obligations in accordance with the terms of the Credit Agreement and the
Financing Order.
[Signatures on following page]
23
IN WITNESS WHEREOF, each of the parties hereto has caused this
Security Agreement to be executed and delivered by its duly authorized officer
as of the date first set forth above.
CONE XXXXX CORPORATION, a North
Carolina corporation
/s/ W. Xxxxx Xxxxxxx
By: W. Xxxxx Xxxxxxx
Title: Treasurer
CIPCO S.C., INC., a Delaware corporation
/s/ Xxxxxx X. Xxxxxx
By: Xxxxxx X. Xxxxxx
Title: Ass't Secretary
CORNWALLIS DEVELOPMENT CO., a
North Carolina corporation
/s/ Xxxx X. Xxxxxx
By: Xxxx X. Xxxxxx
Title: VP & Secretary
CONE FOREIGN TRADING LLC, a North
Carolina limited liability company
/s/ W. Xxxxx Xxxxxxx
By: W. Xxxxx Xxxxxxx
Title: Treasurer
BANK OF AMERICA, N.A., as Agent and as a
Lender
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Senior Vice President
GENERAL ELECTRIC CAPITAL CORPORATION,
as Syndication Agent and as a Lender
By: /s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: Duly Authorized Signatory
24
SCHEDULE I
to
SECURITY AGREEMENT
LOCATION OF COLLATERAL
A. Chief Executive Offices
Cone Xxxxx Corporation
000 Xxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
CIPCO S.C., Inc.
0000 Xxxxxxxx/Xxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Cone Foreign Trading
000 Xxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Cornwallis Development Co.
000 Xxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
B. Books and Records
Same as above except for:
CIPCO S.C., Inc.
000 Xxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
X. Xxxx Xxxxx Corporation Collateral:
Name and Address of Relationship to
Collateral Locations Owner of Collateral Location Grantor
---------------------------------------------- ---------------------------------------------- ---------------------
Chief Executive Office (Corporate Office) Friendly Associates Ltd. Partnership XXII Lessor
000 Xxxxx Xxxxxx Xx., Xxxxx 000 000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
---------------------------------------------- ---------------------------------------------- ---------------------
Collateral Locations Name and Address of Relationship to
Owner of Collateral Location Grantor
---------------------------------------------- ---------------------------------------------- ---------------------
Technical Center City of Greensboro Lessor
0000-0000 Xxxxx Xxxxxx XXX 0000
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000-0000
---------------------------------------------- ---------------------------------------------- ---------------------
Central Sample C. Xxxxx XxXxxxxx Contractor, Inc. Lessor
0000 Xxxxxxxxxxx Xx. 000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Dallas Sales Office The Parkway Office Building Corporation Lessor
00000 Xxxxxx Xxxxxxx, Xxxxx 000 00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000 Xxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
New York Sales Office 1411 TrizecHahn-Swig, L.L.C. Lessor
0000 Xxxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000 000 X. Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
San Francisco Sales Office SKS/FBOP Associates, L.L.C. Lessor
00 Xxxxxxxxx Xx., Xxxxx 000 POB 39000
Xxx Xxxxxxxxx, XX 00000 Dept. 05869
Xxx Xxxxxxxxx, XX 00000-0000
---------------------------------------------- ---------------------------------------------- ---------------------
High Point Furniture Market Showroom Market Square L.L.C. Lessor
000 Xxxx Xxxx Xxxxxx, Xxxx 0000 Merchandise Mart Properties, Inc.
Xxxx Xxxxx, XX 00000 (NC) (Agent)
000 Xxxx Xxxx Xxxxxx
Xxxx Xxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
New York Apartment River Tower Associates, L.L.C. Lessor
000 Xxxx 00xx Xxxxxx 6-J Macklowe Management Co., (Agent)
Xxx Xxxx, XX 00000 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Greensboro Apartment Waterford Place Apartments Lessor
000X Xxxxx Xxxx Xxxxx 000 Xxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Spartanburg Apartments (Jacquard) Riverwind Apartments Lessor
000 Xxxxxxx Xxx. (306 & 1904) Xxxxxx Properties
Xxxxxxxxxxx, XX 00000 000 Xxxxxxx Xxx.
Xxxxxxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Brussels Sales Office NV Porcelynegoed with registered office Lessor
Hoeilaart Office Center at 9880 Alter, Schoonberg 15 and place of
Vandommestraat 5 business at 1140 Xxxxxxxx,
0000 Hoeilaart Xxxxxxxxxxxxxxxx 000/0
Xxxxxxx
---------------------------------------------- ---------------------------------------------- ---------------------
Preferred Finishing, Inc. Preferred Finishing, Inc. Finisher
000 Xxxxxxxxxx Xxx. 000 Xxxxxxxxxx Xxx.
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
---------------------------------------------- ---------------------------------------------- ---------------------
Collateral Locations Name and Address of Relationship to
Owner of Collateral Location Grantor
---------------------------------------------- ---------------------------------------------- ---------------------
Premiere Finishing Company Premiere Finishing Company Finisher
0000 Xxx. 00 X.X. 0000 Xxx. 00 X.X.
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Synthetics Finishing Synthetics Finishing Finisher
000 00xx Xx. X.X. 000 00xx Xx. X.X.
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Unifour Finishers, Inc. Unifour Finishers, Inc. Finisher
000 00xx Xxxxxx, X.X. 000 00xx Xxxxxx, X.X.
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Ultimate Textile, Inc. Ultimate Textile, Inc. Finisher
0000 Xxxxxxx 000 Xxxxx 0000 Xxxxxxx 000 Xxxxx
Xxxxxxxxxxxxx, XX 00000 Xxxxxxxxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Weavetec, Inc. Weavetec, Inc. Finisher
000 Xxxxx Xxxxxxxxx 000 Xxxxx Xxxxxxxxx
Xxxxx, XX 00000 Xxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Aurora Textile Finishing Aurora Textile Finishing Finisher
19 Page Court 00 Xxxx Xxxxx
Xxxxxxxxx Xxxx, XX 00000 Xxxxxxxxx Xxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Xxxxxx Togs Xxxxxx Togs Finisher
000 Xxxxxxxxxx Xxxx. 000 Xxxxxxxxxx Xxxx.
Xxxxxxxxxxxx, XX 00000 Xxxxxxxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
SynFin SynFin Finisher
0000 Xxxxx Xxxx 0000 Xxxxx Xxxx
Xxxxx Xxxxx, XX 00000 Xxxxx Xxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Frontier Spinning Xxxxx, Inc. Frontier Spinning Xxxxx, Inc. Yarn
0000 Xxxxx Xxxxx Xxxx 0000 Xxxxx Xxxxx Xxxx Xxxxxxxx
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Valley Forge Textiles Valley Forge Textiles Yarn
000 Xxxx Xxxxx 000 Xxxx Xxxxx Xxxxxxxx
Xxxx xx Xxxxxxx, XX 00000 King of Xxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
CYP CYP Yarn
000 Xxxxxxx Xxxx 000 Xxxxxxx Xxxx Xxxxxxxx
Xxxxx, XX 00000 Xxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Spectrum Dyed Yarns Spectrum Dyed Yarns Yarn
000 Xxxxxxxxx Xxxx 136 Xxxxxxxxx Road Supplier
Xxxxx Xxxxxxxx, XX 00000 Xxxxx Xxxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Xxxxxx Industries, Inc Xxxxxx Industries, Inc Yarn
Xxx. 000-X Xxx. 000-X Xxxxxxxx
Xxxx, XX 00000 Xxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Xxxxxx Industries, Inc. Xxxxxx Industries, Inc. Yarn
000 Xxxxxx Xxxxxx 000 Xxxxxx Xxxxxx Xxxxxxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
---------------------------------------------- ---------------------------------------------- ---------------------
Collateral Locations Name and Address of Relationship to
Owner of Collateral Location Grantor
---------------------------------------------- ---------------------------------------------- ---------------------
La France Industries La France Industries Yarn
000 Xxx Xxxxxxxx Xxxx 000 Xxx Xxxxxxxx Xxxx Xxxxxxxx
Xx Xxxxxx, XX 00000 Xx Xxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Abercrombie Textiles, Inc. Abercrombie Textiles, Inc. Yarn
0000 Xx. Xxxxx Xxxxxx Xxxx 0000 Xx. Xxxxx Xxxxxx Xxxx Xxxxxxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Elite Textiles Elite Textiles Yarn
000 Xxxxxxx Xxxx 000 Xxxxxxx Xxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Baron Yarns, Inc. Baron Yarns, Inc. Yarn
000 Xxxx Xxxxxxxx Xxxxxx 000 Xxxx Xxxxxxxx Xxxxxx Xxxxxxxx
Xxxxxxxx Xxxx, XX 00000 Xxxxxxxx Xxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Metropolis Fabrics Metropolis Fabrics Yarn Supplier
Hillside Industrial Park Hillside Industrial Park
Building 170, Suite 000 Xxxxxxxx 000, Xxxxx 000
Xxxxxx, XX 00000 Xxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Astro Dye Works Astro Dye Works Yarn Supplier
000 Xxxxxxxxxx Xxxxxx 000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Xxxxxx Industries Xxxxxx Industries Yarn Supplier
Xxx. 00 xx Xxxxx Xxxx Xxx. 00 at Xxxxx Road
Xxxxxx, SC 29627 Xxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Hi-Tex Hi-Tex Yarn Supplier
000 Xxxxxxx Xxxxx 000 Xxxxxxx Xxxxx
Xxxxx Xxxxxxxx, XX 00000 Xxxxx Xxxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
CIPCO S.C., Inc. Cone Xxxxx Corporation
00 Xxxxxxxx/Xxxxxxx Xxxxxxx 000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000 Xxxxx 000
Xxxxxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Cone Foreign Trading Cone Foreign Trading
000 Xxxxx Xxxxxx Xxxx 000 Xxxxx Xxxxxx Xxxx
Xxxxx 000 Xxxxx 000
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Cornwallis Development Co. Cornwallis Development Co.
000 Xxxxx Xxxxxx Xxxx 000 Xxxxx Xxxxxx Xxxx
Xxxxx 000 Xxxxx 000
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
---------------------------------------------- ---------------------------------------------- ---------------------
Location Real Property Map Block Lot
--------------------------------- ----------------------------------------------------------------------- --------------------
Granite Buildings
--------------------------------- ----------------------------------------------------------------------- --------------------
Granite Plant/Whse Bldg (495,114 SF) and Land Improvements-
Alamance County E Main St Hwy 70 13-12-25A
--------------------------------- ----------------------------------------------------------------------- --------------------
Haw River, NC Xxxxxxx Xxxxxx Xxxx (0,000 XX) Xxx 00X 00-0-00X
--------------------------------- ----------------------------------------------------------------------- --------------------
Location Real Property Map Block Lot
--------------------------------- ----------------------------------------------------------------------- --------------------
Warehouse Area Land
15 Acres at Granite Plant Site E Main St Hwy 70 13-12-25A
13 Acres Land E Main St Hwy 70 (used for parking trailers and storage) 13-12-25A
.05 Acres Commercial Land VL Xxx Xxx 00X 00-0-00
1.5 Acres Commerdial Land - VL HWY 70A 13-3-18A
.16 Acres Commercial Land - VL HWY 70A 13-3-18B
.23 Acres BL HWY 70A - Land Only 13-3-18C
.74 Acres 00X Xxxxxxxxxx Xxx XXX 00/00 00-0-00
.44 Acre- Commercial Lot Gravel St 13-3-20
--------------------------------- ----------------------------------------------------------------------- --------------------
Other Nearby Land
2 acres Residential Xxx Xxxxx Xxxxxxxx Xxxx Xxx Xxxxxxxx Xxxxxx 13-7-35
1 Acre Residential Land Off Boundary Street 13-7-35
1.01 Acre Residential Lot River St (road does not exist where this
land is) 13-9-35
1.04 Acre Residential Lot VL River Street (road does not exist where
this land is) 13-8-28
2.60 Acres Residential Land near Xxxxxx St (road does not exist where
this land is) 13-9-28
1.06 Acres 0000 Xxxxx Xxxxxx 13-9-34
--------------------------------- ----------------------------------------------------------------------- --------------------
Tabardrey 8.58 Acres Partially Fronting on Stone St Outside City Limits 13-12-25O
--------------------------------- ----------------------------------------------------------------------- --------------------
Alamance County 6.37 Acres 4PRD Fronting on Stone St Inside City Limits 13-12-25I
--------------------------------- ----------------------------------------------------------------------- --------------------
Haw River, NC 21.38 Acres Not Fronting on Stone St Poor Access Inside City Limits 13-12-25I
--------------------------------- ----------------------------------------------------------------------- --------------------
White Oak Plant Buildings
--------------------------------- ----------------------------------------------------------------------- --------------------
Guilford County White Oak Plant Buildings (1,567,457 SF) 000-000-0
--------------------------------- ----------------------------------------------------------------------- --------------------
Water Filtration Plant/Undergrround Water Tanks at NW corner of Cone
Greensboro, NC Blvd/Church St 9-621-634-7
--------------------------------- ----------------------------------------------------------------------- --------------------
Land around and associated with the White Oak Plant
2.6 Acres SW Corner 2501-2505 Fairview/16th St (land partly used as
overflow parking) 000-000-0
2.96 Acres between 1701-1707 Fairview and Yanceyville St (old steam
line to Printworks) 254-59-1
.21 Acres of Print Works Land Tract Allocated to WO Waste Water
Treatment Plant on Books 254-60-1
53.41 Xxxxx-0000 Xxxxxxxx - this is the actual land where the White
Oak Plant is located 000-000-0
2.55 Acres 0000 Xxxxxxxx Xxxxxx at White Oak Power Plant 000-000-0
.26 Acres 0000 Xxxxxxxx Xxxxxx at White Oak Power Electric Shop 000-000-0
8.94 Acres-2420 R1 Fairview St (between Plant and West Side of
Buffalo Creek WO Waste Water Treatment 255-99-1
Location Real Property Map Block Lot
--------------------------------- ----------------------------------------------------------------------- --------------------
4.59 Acres East Side of 0000 Xxxxxxxx Xxxxxx just south of WO plant
(used for parking) 255-95-1
3.85 Acres-East Side of 0000 Xxxxxxxx Xxxxxx just south of tract
255-95-1 (used for parking) 255-96-1
3.20 Acres-East Side of 0000 Xxxxxxxx Xxxxxx just south of tract
255-96-1 vacant land 255-97-1
3.5 Acres- SW Corner of 0000 00xx Xxxxxx/Xxxxxx Xxxxxx - vacant land 000-000-0
3.64 Xxxxx-0000-0000 Xxxxxx Xxxxxx (south of tract 255-116-1) -
vacant land 000-000-0
5 Acres- 0000 Xxxxxx Xxxxxx (south of tract 255-117-1) - vacant land 000-000-0
10.37 Acres 0000 Xxxxxx Xxx (mostly flood plain land along Buffalo Cr
south of tract 255-118-1) 000-000-0
10.89 Acres 1301 on Xxxxx Xxxx xx 00xx Xxxxxx and Part of Old WO Lake
Allocated to WO Plant 000-000-0
10.89 Acres 1301 on Xxxxx Xxxx xx 00xx Xxxxxx
and Part of Old WO Lake Allocated to WO WaterPl. 000-000-0
12.03 (less 2.5 below) Acres 1301 on N. Side of 16th St Part of Old
WO Lake Allocated to WO Power Pl. 000-000-0
2.5 Acres 1301 on Xxxxx Xxxx xx 00xx Xxxxxx paved parking lot for
White Oak plant 000-000-0
26.16 Acres - Summit Ave behind White Oak going south from Buffalo
Creek 1700 256-98-1
8.58 Acres 0000-0000 Xxxxxx Xxxxx at White Oak Power Plant 256-98-1
8.58 Acres 0000-0000 Xxxxxx Xxxxx at White Oak Waste Water Treatment
Plant 256-98-1
1.28 Acres XX Xxxxxx Xx 00/Xxxxxx Xxxx Xxxxxxxxxx Xxxx Auto Center
Mall (very bad topograhy) 000-000-0
6.78 Acres East of and bordering on16th Street, East of Summit Ave
near Rt 29 - bad topography 000-000-0
.75 Acres on NW corner of 000 Xxxx Xxxxxxxxx/Xxxxxxx Xx 265-1-22
3.05 Acres on NW corner of 000 Xxxx Xxxxxxxxx/Xxxxxxx Xx where
Philadelphia Lake is located 265-1-23
16.8 Acres - 00000 X Xxxx Xxxx between Xxxxxxx and Elm St where a
lake is located 395-1-15
3.43 Acres on NW corner of 0000 X Xxxxxx Xxxxxx and Cone Blvd (WO
water filtration plant) 719-4-1
19.95 Acres Cone Blvd/2701 N Church St part of E Buffalo Lake - WO
Power Plant 9-621-634-7
48.05 Acres at Xxxx Xxxx/0000 X. Xxxxxx Xx part of E Buffalo Lake -
Real Estate 9-621-634-7
4.1 Acres around Buffalo Lake 9-621-634-7
.75 Acres 0000 Xxxxx Xxx Xxxxxx where Painter Bld Right Of Way exists 9-619-659-9
10.46 Acres 0000-0000 X Xxx Xxxxxx where West Buffalo Lake is located 9-621-634-5
5.2 Acres 0000-0000 X Xxx Xxxxxx where West Buffalo Lake is located 9-621-634-6
1.53 Acres X0 Xxxxx Xxx Xx - this a useless marshy area where a creek
feeds West Buffalo Lake 9-621-634-11
--------------------------------- ----------------------------------------------------------------------- --------------------
Location Real Property Map Block Lot
--------------------------------- ----------------------------------------------------------------------- --------------------
375.3 Acres 0000 Xxxx Xxxxxxxx Xx - this is where Xxxx Xxxxxxxx
itself is located 6-352-704S-1
.73 Acres Rear of 0000 Xxxxxxx Xxxx Xx - this is part of the buffer
strip around Xxxx Xxxxxxxx 6-352-704S-7
.01 Acres Rear of 4 Seabrook Court - this is part of the buffer strip
around Xxxx Xxxxxxxx 6-352-704S-8
.17 Acres Rear of 14 Hatteras Court - this is part of the buffer
strip around Xxxx Xxxxxxxx 6-352-704S-9
--------------------------------- ----------------------------------------------------------------------- --------------------
Transportation/Proximity Buildings
--------------------------------- ----------------------------------------------------------------------- --------------------
Guilford County Transportation Building (57,120 SF) /Service Garage (18,510 SF) on
Corner of Maple St/Wendover Ave 250-50-1
--------------------------------- ----------------------------------------------------------------------- --------------------
Greensboro, NC
--------------------------------- ----------------------------------------------------------------------- --------------------
Land
--------------------------------- ----------------------------------------------------------------------- --------------------
16.41 Acres Land on NW Corner of Maple St/Wendover Ave 250-50-1
8.56 Acres Land NE Corner of Yancetville St/Wendover Ave small creek
maybe 1 acre is good 250-50-1
4.56 Acres 0000 Xxxxxxxxxxx Xx (west side of Yanceyville St) - mostly
bad topography 250-50-2
1.69 Acres -0000 Xxxxx Xxxxxx (Xxxx where Transportation Building is
located ) 250-50-1
.39 Acres Corner Yanceyville St/1416 Cypress St - bad typogaphy Xxxxx
Xxxxxxx'x dad lives next door 000-00-00
--------------------------------- ----------------------------------------------------------------------- --------------------
Print Works Warehouse Old Print Works Bldg (453,448 SF) - has been unused for about 4 years
and is in very bad shape 254-60-1
--------------------------------- ----------------------------------------------------------------------- --------------------
Guilford County 16.68 Acres of land On Fairview Street at Print Works Site 254-60-1
--------------------------------- ----------------------------------------------------------------------- --------------------
Land Near Old Rebond Plant
--------------------------------- ----------------------------------------------------------------------- --------------------
Guilford County 1.94 acres 1589 near Yanceyville Street where water tower is located 251-61-5
--------------------------------- ----------------------------------------------------------------------- --------------------
Cornwallis Development .3? Acres 0000- XX Xxxxxx 0000 Xxxxxx Xxxxxx Xxxx/Xxxxxxxxxx Boulevard 6-350A-701-32
--------------------------------- ----------------------------------------------------------------------- --------------------
Guilford County 3112 near Xxxxx Sreet 575-10-6
--------------------------------- ----------------------------------------------------------------------- --------------------
Greensboro, NC 0000 Xxxx Xxxxxx Xxx Xxxxx 527-7-15
0000 Xxxxxxx Xxxx Xxxx (contains 'Southern Shores' sign and is very
shallow because of a creek) 692-1-18
--------------------------------- ----------------------------------------------------------------------- --------------------
Location Real Property Map Block Lot
--------------------------------- ----------------------------------------------------------------------- --------------------
Salisbury Plant Buildings
--------------------------------- ----------------------------------------------------------------------- --------------------
Rowan County Salisbury Plant 417,091 SF Closed in Spring 1999 14-414-1
--------------------------------- ----------------------------------------------------------------------- --------------------
Land
--------------------------------- ----------------------------------------------------------------------- --------------------
14.69 Acres Xxxxx Xxxxxxxx Xxxxxx - This is the Salisbury Plant Land 14-414-1
6.478 Acres near Xxxxx Street - This land is beside Town Creek and
has no road access 17-147-1
.2 Acres Off Xxxx Street - Site of old unused pump house on West side
Town Creek with no road access 18-100-1
Approx .2 Acres 000 Xxxxxxxx Xxxxxx - Part of paved parking lot for
plant 18-105-1
Approx .3 Acres 000 Xxxxxxxx Xxxxxx - Part of paved parking lot for
plant 18-107-1
Approx .3 Acres 000 Xxxxxxxx Xxxxxx - this is a grassy lot between
two old mill houses 18-109-1
Approx .2 Acres 00 Xxxx Xxxxxx - Part of paved parking lot for plant 18-118-1
Approx 1.2 Acres 48, 50, 52, 54, 56 Hill Street - Part of paved
parking lot for plant 18-131-1
Approx .25 Acres 000 Xxxxxxxx Xxxxxx - Part of paved parking lot for
plant 18-136-1
Approx .25 Acres 000 Xxxxxxxx Xxxxxx - Part of the paved parking lot
for plant 18-148-1
--------------------------------- ----------------------------------------------------------------------- --------------------
Cliffside Plants Buildings
--------------------------------- ----------------------------------------------------------------------- --------------------
Xxxxxxxxxx County Cliffside Weave Plant (339,970 SF) Xxx 000X Xxxxxxxxxx, XX 000-0-000
Xxx Xxxxxxxxx Xxxx Plant (662,494 SF) 000 Xxx Xxxx Xxxxxx,
Xxxxxxxxx XX 400-1-23
Office Bldg (3,375 SF) at Old Cliffside Yarn Plant N. Main Street 400-1-25A
--------------------------------- ----------------------------------------------------------------------- --------------------
Land at Cliffside Weave Plant
--------------------------------- ----------------------------------------------------------------------- --------------------
35 Acres Improved Land at Cliffside Weave Plant Xxxxxxx St, Hwy 221A 000-0-000
174.55 Acres Land Surrounding Cliffside Weave Plant Xxxxxxx St,
Hwy 221A 000-0-000
20 Acres Xxxxxxx Xx. 2nd St 402-1-3C
8.87 Acres Green & Laurel St. 402-1-18
1.49 Acres 00 Xxx Xx 000-0-0
Appraisal says this tract is 11.6 acres old railroad R of W and runs
from Xxxxxx to Cliffside Yarn 411-3-4
12.33 Acres Xxx 000 & Xxxxxxx Xxxxxx (incl. park improvements with a
$13,520 prop tax value) 403-1-4
.53 Acres Near Cliffside Weave Plant Hwy 221 A 434-1-14E
.63 Acres Near Cliffside Weave Plant Hwy 221A 434-1-14D
30.28 Acres Fairview St. 401-1-4
16.04 Acres Xxxxxxxxx Xx 000-0-00
0.00 Xxxxx Xxx 221A 402-1-16
--------------------------------- ----------------------------------------------------------------------- --------------------
Location Real Property Map Block Lot
--------------------------------- ----------------------------------------------------------------------- --------------------
35 Acres Near Cliffside Weave Plant Near 221A 434-1-14
--------------------------------- ----------------------------------------------------------------------- --------------------
Cliffside Plants Land at Old Cliffside Yarn Plant
--------------------------------- ----------------------------------------------------------------------- --------------------
34.56 Acres at Old Cliffside Yarn Plant, 000 Xxx Xxxx Xxxxxx,
Xxxxxxxxxx Xxxxxx Xxxxxxxxx XX 000-0-00
.00 Xxxxx X. Xxxx Xxxxxx (this is the land around the office
building at the Cliffside Yarn Plant) 400-1-25A
1.6 Acres 00 Xxxxxxxxx Xxxxxx 400-1-10
.91 Acres 00xx Xxxxxx Xxxx 000-0-00
.00 Xxxxx 00 Xxxxxxxxx Xxxxxx 400-1-12
1.05 Acres 00 X Xxxx Xxxxxx 400-1-15
1.53 Acres Rain Road (includes Cone memorial clock with a $500 prop
tax value ) 400-1-16
1.24 Acres 00 X Xxxx Xxxxxx 000-0-00
.00 Xxxxx 00 Xxxxxxxx Xxxxxx 400-1-21
1.66 Acres Feed Mill, XX Xxxxxx 000-0-00
4.79 Acres 00 X Xxxx Xxxxxx 400-1-24
.82 Acres N Main Street 400-1-26
1.3 Acres Main Street 400-1-27
1.19 Acres Xxxxxxx Xxxxxx 000-0-00
.00 Xxxxx 0 Xxxxxxxxx Xxxxx 000-0-00
.00 Xxxxx 00 X Xxxx Xxxxxx 400-1-33
4.44 Acres12 Xxxxxxx Xxxxxx 000-0-00
20 Acres 0 Xxxx Xxxxxxxxx Xxxxxx 402-1-15
.94 Acres (includes the rescue squad house with a $5,000 prop tax
value) 400-2-1
.19 Acres 00 Xxxxxx Xxxxxx (xxxxxxxxxxx lot) 400-5-1
2.22 00 Xxx Xxxxxx 402-1-12
2.63 Acres 00 X. Xxxx Xxxxxx (low land in flood plain within bend of
Second Broad River 400-1-14
2.25 Acres 00 X Xxxx Xxxxxx 000-0-00X
.00 Xxxxx 00 X Xxxx xxxxxx 400-1-16B
--------------------------------- -----------------------------------------------------------------------
Xxxxxx Plant Xxxxxx Bldg (465,049 SF) Hwy 221A (2401 Ellenboro Xxxxxxxxx Rd)
Ellenboro NC 412-1-9
--------------------------------- ----------------------------------------------------------------------- --------------------
Xxxxxxxxxx County Land Near Xxxxxx Plant Xxx 000X Xxxxxxxxx-Xxxxxxxxx Xxxx
--------------------------------- ----------------------------------------------------------------------- --------------------
Ellenboro, NC 31.79 Acres Hwy 221A this is the land at the Xxxxxx Plant site 412-1-9
9.51 Acres- Hwy 221A (11 acres adjacent land sold on 8/22/01,
remaining land is mostly in a flood plain) 412-1-6
--------------------------------- ----------------------------------------------------------------------- --------------------
Xxxxxxxx Plant Florence Plant Building (205,499 SF) 000 Xxxx Xxxxxx Xxxxxx Xxxx, XX 202-1-12
--------------------------------- ----------------------------------------------------------------------- --------------------
Xxxxxxxxxx County
--------------------------------- ----------------------------------------------------------------------- --------------------
Location Real Property Map Block Lot
--------------------------------- ----------------------------------------------------------------------- --------------------
Forest City, NC Land at Florence Plant
--------------------------------- ----------------------------------------------------------------------- --------------------
5 acres Xxxxxxxx Plant Land Between Depot and Mill Streets 202-1-12
.2 Acres SW and SE Corners of Xxxxxxxx Street and Xxxxxxx Street 210-6-3
1.1 Acres SW Corner Depot Street and Green street (contains spur
track) 203-3-4
0 Xxxx XX Xxxxxx Xxxxx Xxxxxx and Green street 203-2-14
0 Xxxx XX Xxxxxx 000 Xxxx Xxxxxx and Xxxxxxxx Street 202-2-19
--------------------------------- ----------------------------------------------------------------------- --------------------
Jacquard Plant Jacquard Plant Building (137,310 SF) Xxx 000X Xxxxxx Xxxx, XX 435-1-125A
--------------------------------- ----------------------------------------------------------------------- --------------------
Xxxxxxxxxx County 96.40 Acres land surronding the plant - Xxx 000X, Xxxxxx Xxxx, XX 435-1-125A
--------------------------------- ----------------------------------------------------------------------- --------------------
Forest City, NC
--------------------------------- ----------------------------------------------------------------------- --------------------
Carlisle Plant Carlisle Finishing Building (779,906 SF) 131-0-0-2
--------------------------------- ----------------------------------------------------------------------- --------------------
Union County
--------------------------------- ----------------------------------------------------------------------- --------------------
Carlisle SC Carlisle Land
--------------------------------- ----------------------------------------------------------------------- --------------------
186 Acres surrounding the Carlisle Plant 131-0-0-2
718 Acres (about 350 Acres Developable) 131-0-0-1
5.5 Acres and the Guest House 131-0-0-1
--------------------------------- ----------------------------------------------------------------------- --------------------
Raytex Plant Raytex Plant Building (297,748 SF) Closed March 2001
--------------------------------- ----------------------------------------------------------------------- --------------------
Xxxxxx County 33.942 Acres of Land
--------------------------------- ----------------------------------------------------------------------- --------------------
Marion,SC Land Improvements
--------------------------------- ----------------------------------------------------------------------- --------------------
Union Bleachery Land at Union Bleachery Cleanup Site
--------------------------------- ----------------------------------------------------------------------- --------------------
Greenville, SC Land Improvements at Union Bleachery
--------------------------------- ----------------------------------------------------------------------- --------------------
19.6 Acres - S. C. Highway 253 160-01-001.02
.0 Xxxxx - Xxxxxx Xxxxxx (ground water pumping station is here) 160-01-002.02
D. See chart "C" above
E. See chart "C" above
SCHEDULE II
to
SECURITY AGREEMENT
JURISDICTION OF ORGANIZATION
Jurisdiction Address of Chief Type of Organizational
Name of Formation Executive Office Entity ID Number
Cone Xxxxx Corporation North Carolina 000 Xxxxx Xxxxxx Xx. Corporation 0032698
Xxxxxxxxxx, XX 00000
CIPCO S.C., Inc. Delaware 0000 Xxxxxxxx/Xxxxxxx Xxx. Corporation 2575115
Xxxxxxxx, XX 00000
Cone Foreign Trading LLC North Carolina 804 Green Valley Rd. Corporation 0032698
Xxxxxxxxxx, XX 00000
Cornwallis Development Co. North Carolina 000 Xxxxx Xxxxxx Xx. Corporation 0032698
Xxxxxxxxxx, XX 00000
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_______________, 200_
Bank of America, N.A
____________________
____________________
Attn:_______________
Re: [Name and Address of Borrowers]
Ladies and Gentlemen:
We refer to the Post-Petition Credit Agreement dated as of
December 11, 2003, (as amended, amended and restated, modified, supplemented or
renewed from time to time the "Post-Petition Credit Agreement") among Cone Xxxxx
Corporation and the other Borrowers (the "Borrowers"), the Lenders referred to
therein and Bank of America, N. A., as agent for the Lenders (the
"Administrative Agent"). Terms defined in the Post-Petition Credit Agreement are
used herein as therein defined.
1. We hereby give you notice of, and request your consent to,
the assignment by __________________ (the "Assignor") to _______________ (the
"Assignee") of _____% of the right, title and interest of the Assignor in and to
the Post-Petition Credit Agreement (including the right, title and interest of
the Assignor in and to the Commitments of the Assignor, all outstanding Loans
made by the Assignor and the Assignor's participation in the Letters of Credit
pursuant to the Assignment and Acceptance Agreement attached hereto (the
"Assignment and Acceptance"). We understand and agree that the Assignor's
Commitment, as of , 200 , is $ ___________, the aggregate amount of its
outstanding Loans is $_____________, and its participation in L/C Obligations is
$_____________.
2. The Assignee agrees that, upon receiving the consent of
Administrative Agent and, if applicable, the Borrowers to such assignment, the
Assignee will be bound by the terms of the Post-Petition Credit Agreement as
fully and to the same extent as if the Assignee were the Lender originally
holding such interest in the Post-Petition Credit Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name:
--------------------------
Address:
--------------------------------
Attention:
--------------------------------
Telephone: (___)
------------------------
Telecopier: (___)
-----------------------
Telex (Answerback):
---------------------
(B) Payment Instructions:
Account No.:
--------------------------
At:
--------------------------
Reference:
--------------------------
Attention:
-------------------------
4. You are entitled to rely upon the representations,
warranties and covenants of each of the Assignor and Assignee contained in the
Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
this Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:
----------------------------------
Title:
----------------------------------
[NAME OF ASSIGNEE]
By:
----------------------------------
Title:
-----------------------------------
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
Bank of America, N. A.,
as Administrative Agent
By:
-----------------------------------------
Title:
-----------------------------------------
SCHEDULE 1.1
Commitments
Lender Commitment Pro Rata Share (3 decimals)
Bank of America, N.A. $22,500,000 50.000%
General Electric Capital Corporation $22,500,000 50.000%
Total $45,000,000 100.000%
PATENT SECURITY AGREEMENT
This PATENT SECURITY AGREEMENT (this "Agreement") is made as of
December 11, 2003, between BANK OF AMERICA, N.A., a national banking association
having an office at 000 Xxxxxxxxx Xxxxxx, X.X., 00xx Xxxxx, Xxxxxxx, Xxxxxxx
00000-0000, as administrative and collateral agent for itself and Lenders (as
hereinafter defined) (together with its successors in such capacity, "Agent"),
and CONE XXXXX CORPORATION, a North Carolina corporation and a
debtor-in-possession in a Chapter 11 bankruptcy case filed with the United
States Bankruptcy Court for the District of Delaware having its principal place
of business at 000 Xxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxx Xxxxxxxx
00000 (the "Company").
Recitals:
The Company desires to obtain loans and other financial accommodations
from certain financial institutions ("Lenders") as are parties from time to time
to that certain Post-Petition Credit Agreement dated as of December 11, 2003, by
and among the Company, the other borrowers named therein, the Lenders, Agent and
the other agent named therein (as at any time amended, the "Credit Agreement").
Lenders are willing to make loans and other financial accommodations to
the Company from time to time, pursuant to the terms of the Credit Agreement,
provided the Company executes this Agreement.
NOW, THEREFORE, for Ten Dollars ($10.00) in hand paid and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company hereby agrees with Agent as follows:
1. Capitalized terms used herein (including those used in the Recitals
hereto), unless otherwise defined, shall have the meanings ascribed to them in
the Credit Agreement. As used herein, the phrase "material Patent" means a
Patent (as hereinafter defined) that is used by the Company in the Ordinary
Course of Business and the absence of which could reasonably be expected to have
a Material Adverse Effect upon the business, financial condition or operating
results of such Company.
2. To secure the prompt payment and performance of the Obligations, the
Company hereby grants, assigns and pledges to Agent, for the benefit of itself
and the benefit of the Lenders, a continuing security interest in and Lien upon
all of the following property of the Company, whether now existing or hereafter
created or acquired (the "Patent Collateral"):
(a) the entire right, title and interest of the Company in and
to the patent applications and patents listed in Exhibit A attached
hereto (as the same may be amended from time to time), and all
re-issues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, including, without limitation, the right
to xxx for past, present and future infringements and rights
corresponding thereto throughout the world (all of the foregoing being
herein collectively referred to as the "Patents"); and
(b) All proceeds of the foregoing (such as, by way of example,
license royalties and proceeds of infringement suits).
3. The Company covenants with and warrants to Agent and the Lenders
that:
(a) Each material Patent is subsisting and has not been
adjudged invalid or unenforceable, in whole or in part;
(b) The Company is the sole and exclusive owner of the entire
and unencumbered right, title and interest in and to each of the
Patents, free and clear of any Liens other than Permitted Liens;
(c) The Company has the unqualified right to enter into this
Agreement and perform its terms; and
(d) The Company has used, and will continue to use for the
duration of this Agreement, proper statutory notice in connection with
its use of each material Patent and has made, and will continue to
make, all appropriate filings with the United States Patent and
Trademark Office to maintain each material Patent in existence,
including, without limitation, filing all necessary documents with the
United States Patent and Trademark Office for each material Patent to
maintain it without loss of protection therefor.
4. Except with respect to licenses granted to Agent pursuant to Section
7.33(b) of the Credit Agreement, until all of the Obligations have been
satisfied in full and the Credit Agreement has been terminated, the Company
shall not enter into any license agreement relating to any of the Patents with
any Person except non-exclusive licenses in the Ordinary Course of Business of
the Company and for reasonable and customary compensation, and shall not become
a party to any agreement with any Person that is inconsistent with the Company's
obligations under this Agreement.
5. If, before the Obligations shall have been satisfied in full, the
Company shall obtain rights to any new patent application or patent for any
reissue, division, continuation, renewal, extension or continuation-in-part of
any Patent or any improvement on any Patent, the provisions of paragraph 2 shall
automatically apply thereto and the Company shall give to Agent prompt written
notice thereof (except with respect to non-registered patentable inventions with
only nominal value).
6. The Company irrevocably authorizes and empowers Agent to modify this
Agreement by amending Exhibit A to include any future patents and patent
applications within the definition of Patents under paragraph 2 or paragraph 5
hereof.
7. The Company hereby grants to Agent the right to visit the Company's
plants and facilities at which any patented inventions are located or which
manufacture, inspect or store products made under any of the Patents and to
inspect the products and quality control records relating thereto in accordance
with the provisions of the Credit Agreement.
8. Upon and at any time after the occurrence of an Event of Default,
Agent shall have, in addition to all other rights and remedies given it by this
Agreement, all rights and remedies under applicable law and all rights and
2
remedies of a secured party under the UCC. Without limiting the generality of
the foregoing, Agent may immediately, for its benefit and the benefit of the
Lenders, without demand of performance and without other notice (except as
described in the next sentence, if required by applicable law) or demand
whatsoever to the Company, each of which the Company hereby expressly waives,
and without advertisement (except as otherwise provided by applicable law),
collect directly any payments due the Company in respect of the Patent
Collateral, or sell at public or private sale or otherwise realize upon the
whole or from time to time any of the Patent Collateral, or any interest which
the Company may have therein. The Company hereby agrees that ten (10) days
notice to the Company of any public or private sale or other disposition of any
of the Patent Collateral shall be reasonable notice; provided, however, that no
notice shall be required hereunder if not otherwise required by applicable law.
At any such sale or disposition, Agent may, to the extent permitted by
applicable law, purchase the whole or any part of the Patent Collateral sold,
free from any right of redemption on the part of the Company, which right the
Company hereby waives and releases. After deducting from the proceeds of such
sale or other disposition of the Patent Collateral all costs and expenses
incurred by Agent in enforcing its rights hereunder (including, without
limitation, all attorneys' fees), Agent shall apply the remainder of such
proceeds to the payment of the Obligations, in such order or manner as may be
authorized or required by the Credit Agreement. Any remainder of the proceeds
after payment in full of the Obligations shall be paid over to the Company. If
any deficiency shall arise, the Company and each guarantor of the Obligations
shall remain jointly and severally liable to Agent and Lenders therefor.
9. The Company hereby makes, constitutes and appoints Agent, and any
officer or agent of Agent as Agent may select, as the Company's true and lawful
attorney-in-fact, with full power to do any or all of the following if an Event
of Default shall occur and be continuing: to endorse the Company's name on all
applications, documents, papers and instruments necessary for Agent to continue
the maintenance of or to use the Patents, or to grant or issue any exclusive or
nonexclusive license under the Patents to any other Person, or to assign,
pledge, convey or otherwise transfer title in or dispose of any Patent
Collateral to any other Person. The Company hereby ratifies all that such
attorney shall lawfully do or cause to be done by virtue hereof. This power of
attorney, being coupled with an interest, shall be irrevocable until all of the
Obligations shall have been satisfied in full and the Credit Agreement shall
have been terminated.
10. At such time as all of the Obligations shall have been satisfied
finally and in full and the Credit Agreement shall have been terminated, Agent
shall execute and deliver to the Company, without representation, warranty or
recourse and at the Company's expense, all releases and other instruments
necessary to terminate Agent's security interest in the Patent Collateral,
subject to any disposition thereof which may have been made by Agent pursuant to
the terms of this Agreement, or any of the other DIP Financing Documents.
11. Any and all fees, costs and expenses, of whatever kind or nature,
(including, without limitation, reasonable attorneys' fees and legal expenses)
incurred by Agent, or incurred by any Lender (subject to any limitations
contained in Section 13.7 of the Credit Agreement), in connection with the
preparation of this Agreement and any other documents relating hereto and the
consummation of this transaction, the filing or recording of any documents
(including, without limitation, all taxes in connection therewith) with the
United States Patent and Trademark Office or in other public offices, the
payment or discharge of any taxes, counsel fees, maintenance fees or Liens, or
3
otherwise, in protecting, maintaining and preserving any Patent Collateral or in
defending or prosecuting any actions or proceedings arising out of or related to
any Patent Collateral, shall be borne and paid by the Company (it being the
intent of the Company and Agent that the Company shall be responsible for the
payment of all sums, fees, costs and expenses, including, without limitation,
all maintenance fees payable with respect to the Patents) or, if paid by Agent
in its sole discretion, shall be reimbursed by the Company to Agent on demand by
Agent and until so paid shall be added to the principal amount of the
Obligations and shall bear interest at the highest per annum rate in effect from
time to time under the Credit Agreement.
12. The Company shall use commercially reasonable efforts to detect any
infringers of each material Patent and shall notify the Agent in writing of
infringements detected. The Company shall have the duty to prosecute diligently
any patent application for each material Patent pending as of the date of this
Agreement or thereafter until the Obligations shall have been paid in full and
the Credit Agreement terminated, to make application on unpatented but
patentable inventions (subject to Company's reasonable discretion in Ordinary
Course of Business), to file and prosecute opposition and cancellation
proceedings (subject to Company's reasonable discretion), to file and prosecute
lawsuits to protect each material Patent (subject to Company's reasonable
discretion) and to do any and all acts which are deemed necessary or desirable
by Agent, in its reasonable discretion (except that when an Event of Default is
in existence, Agent's discretion shall be absolute), to preserve and maintain
all rights in patent applications for each material Patent. Any expenses
incurred in connection with such an application or proceedings shall be borne by
the Company. The Company shall not abandon any material pending patent
application or patent, without the prior written consent of Agent.
13. Notwithstanding anything to the contrary contained in paragraph 12
hereof, if the Company fails to do so, Agent shall have the right, but shall in
no way be obligated, to bring suit in its own name to enforce each material
Patent and any license hereunder, or to defend any suit or counterclaim in its
own name to protect each material Patent or license hereunder, in either of
which events the Company shall at the request of Agent do any and all lawful
acts (including bringing suit) and execute any and all proper documents required
by Agent in aid of such enforcement or defense and the Company shall promptly,
upon demand, reimburse and indemnify Agent for all costs and expenses incurred
by Agent in the exercise of its rights under this paragraph 13.
14. If the Company fails to comply with any of its obligations
hereunder, then to the extent permitted by applicable law, Agent may do so in
the Company's name or in Agent's name, in Agent's sole discretion, but at the
Company's expense, and the Company agrees to reimburse Agent in full for all
expenses, including, without limitation, reasonable attorneys' fees, incurred by
Agent in prosecuting, defending or maintaining the Patents or Agent's interest
therein pursuant to this Agreement.
15. No course of dealing between the Company and Agent or any Lender,
nor any failure to exercise, nor any delay in exercising, on the part of Agent
or any Lender, any right, power or privilege hereunder or under any of the other
DIP Financing Documents shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder or thereunder
4
preclude any other or future exercise thereof or the exercise of any other
right, power or privilege.
16. All of Agent's rights and remedies with respect to the Patent
Collateral, whether established by this Agreement or any of the other DIP
Financing Documents, or by any other agreements or by applicable law, shall be
cumulative and may be exercised singularly or concurrently.
17. The provisions of this Agreement are severable, and if any clause
or provision shall be held invalid and unenforceable, in whole or in part, in
any jurisdiction, the same shall be deemed severed herefrom and shall not in any
manner affect such clause or provisions in any other jurisdiction, or any other
clause or provision of this Agreement in any jurisdiction.
18. This Agreement, together with the other DIP Financing Documents,
constitutes and expresses the entire understanding of the parties hereto with
respect to the subject matter hereof, and supercedes all prior agreements and
understandings, inducements or conditions, whether express or implied, oral or
written. This Agreement is subject to modification only by writing signed by the
parties, except as provided in paragraph 6 hereof.
19. The benefits and burdens of this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of Agent and of each
Lender and upon the successors and permitted assigns of the Company. The Company
shall not assign its rights or delegate its rights or assign its duties
hereunder without the prior written consent of Agent.
20. The Company hereby waives notice of Agent's acceptance hereof.
21. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Georgia.
22. To the fullest extent permitted by applicable law, the Company and
Agent each waives the right to trial by jury in any action, suit, proceeding or
counterclaim of any kind arising out of or related to this Agreement or the
Patent Collateral.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal on the day and year first written above.
CONE XXXXX CORPORATION
By: /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx, Chief Financial Officer
[Signature continued on the following page]
5
Accepted in Atlanta, Georgia:
BANK OF AMERICA, N.A., as Agent
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, Senior Vice
President
6
STATE OF NORTHCAROLINA ss.
ss.
COUNTY OF GUILFORD ss.
BEFORE ME, the undersigned authority, on this day personally appeared
Xxxx X. Xxxxx, Chief Financial Officer of Cone Xxxxx Corporation, to me known to
be the person whose name is subscribed to the foregoing instrument, and
acknowledged to me that he executed the same for the purposes and consideration
therein expressed, in the capacity therein stated, and as the act and deed of
said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE on this 11th day of December,
2003.
/s/ Xxxxxx X. Xxxxxx
Notary Public
My Commission Expires: November 17, 2008
[NOTARIAL SEAL]
STATE OF GEORGIA ss.
ss.
COUNTY OF XXXXXX xx.
BEFORE ME, the undersigned authority, on this day personally appeared
Xxxxxx X. Xxxxxx, Senior Vice President of Bank of America, N.A., as Agent,
known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for the purposes
and consideration therein expressed, in the capacity therein stated, and as the
act and deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE on this 11th day of December,
2003.
/s/Xxxxx Xxxxx
Notary Public
My Commission Expires: May 5, 2004
[NOTARIAL SEAL]
EXHIBIT A
U.S. Patents
===================== ================================ ====================
Patent No. Description Issue Date
--------------------- -------------------------------- --------------------
--------------------- -------------------------------- --------------------
--------------------- -------------------------------- --------------------
--------------------- -------------------------------- --------------------
--------------------- -------------------------------- --------------------
--------------------- -------------------------------- --------------------
--------------------- -------------------------------- --------------------
--------------------- -------------------------------- --------------------
===================== =============================== =====================
Patent Applications
Application Number Description Date
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT is made as of December 11, 2003,
between BANK OF AMERICA, N.A., a national banking association having an office
at 000 Xxxxxxxxx Xxxxxx, X.X., 00xx Xxxxx, Xxxxxxx, Xxxxxxx 00000-0000, as
administrative and collateral agent for itself and Lenders (as hereinafter
defined) (together with its successors in such capacity, "Agent"), and CONE
XXXXX CORPORATION, a North Carolina corporation and a debtor-in-possession in a
Chapter 11 bankruptcy case filed with the United States Bankruptcy Court for the
District of Delaware having its principal place of business at 000 Xxxxx Xxxxxx
Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 (the "Company").
Recitals:
The Company desires to obtain loans and other financial accommodations
from certain financial institutions ("Lenders") as are parties from time to time
to that certain Post-Petition Credit Agreement dated as of December 11, 2003, by
and among the Company, the other borrowers named therein, the Lenders, Agent and
the other agent named therein (as at any time amended, the "Credit Agreement").
Lenders are willing to make loans and other financial accommodations to
the Company from time to time, pursuant to the terms of the Credit Agreement,
provided the Company executes this Agreement.
NOW, THEREFORE, for Ten Dollars ($10.00) and other valuable
consideration, and in consideration of the premises, the Company hereby agrees
with Agent as follows:
1. Capitalized terms used herein (including those used in the Recitals
hereto), unless otherwise defined, shall have the meanings ascribed to them in
the Credit Agreement. As used herein, the phrase "material Trademark" means a
Trademark (as hereinafter defined) that is used by the Company in the Ordinary
Course of Business and the absence of which could reasonably be expected to have
a Material Adverse Effect upon the business, financial condition or operating
results of such Company.
2. To secure the prompt payment and performance of the Obligations, the
Company hereby pledges, assigns and grants to Agent, for its benefit and the
benefit of the Lenders, a continuing security interest in and lien upon all of
the following property of the Company, whether now owned or existing or
hereafter created or acquired (the "Trademark Collateral"):
(a) all trademarks, trademark registrations, tradenames and
trademark applications, including, without limitation, the U.S.
registered trademarks and trademark applications listed on Exhibit A
attached hereto and made a part hereof (as the same may be amended from
time to time), and (i) all renewals thereof, (ii) all income,
royalties, damages and payments now or hereafter due or payable with
respect thereto, including, without limitation, damages and payments
for past or future infringements thereof, (iii) the right to xxx for
past, present and future infringements thereof, and (iv) all rights
corresponding thereto throughout the world (all of the foregoing
trademarks, trademark registrations, tradenames and applications,
together with the items described in clauses (i)-(iv), are hereinafter
collectively referred to as the "Trademarks");
(b) the goodwill of the Company's business connected with and
symbolized by the Trademarks; and
(c) all proceeds of the foregoing.
3. The Company represents and warrants to Agent and the Lenders that:
(a) Each material Trademark is subsisting and has not been
adjudged invalid or unenforceable;
(b) No claim has been made against the Company nor, to the
best knowledge of the Company, against any other Person, that the use
of any material Trademark does or may violate the rights of any third
Person;
(c) The Company has the unqualified right to enter into this
Agreement and perform its terms; and
(d) The Company is the sole and exclusive owner of the entire
right, title and interest in and to all of the Trademark Collateral
(except for Trademark Collateral owned by third parties and used by the
Company in the Ordinary Court of Business under a license, whether oral
or in writing, with such Person), free and clear of any liens, charges
and encumbrances, including, without limitation, pledges, assignments,
licenses, registered user agreements and covenants by the Company not
to xxx third Persons, other than Permitted Liens.
4. The Company covenants and agrees with Agent and the Lenders that:
(a) The Company will maintain the quality of the products
associated with each material Trademark, at a level at least as high as
the quality at the time of this Agreement; and
(b) The Company has used, and will continue to use for the
duration of this Agreement, proper statutory notice in connection with
its use of each material Trademark, including, without limitation,
filing an affidavit of use with the United States Patent and Trademark
Office for each material Trademark as required by applicable law to
maintain the registration thereof without loss of protection therefor.
5. The Company hereby grants to Agent the right to visit the Company's
plants and facilities which manufacture, inspect or store products sold under
any of the Trademarks and to inspect the products and quality control records
relating thereto in accordance with the provisions of the Credit Agreement.
6. Except with respect to licenses granted to Agent pursuant to Section
7.33(b) of the Credit Agreement, until all of the Obligations have been
satisfied in full and the Credit Agreement has been terminated, the Company
2
shall not enter into any license agreement relating to any of the Trademarks
with any Person except non-exclusive licenses in the regular and Ordinary Course
of the Business of the Company as presently conducted and for reasonable and
customary compensation, and shall not become a party to any agreement with any
Person that is inconsistent with the Company's duties under this Agreement.
7. If, before the Obligations have been satisfied in full, the Company
shall obtain rights to any new trademark application or trademark or any renewal
of any Trademark, the provisions of paragraph 2 hereof shall automatically apply
thereto, and the Company shall give to Agent prompt written notice thereof
(except with respect to unregistered trademarks with only nominal value).
8. The Company irrevocably authorizes and empowers Agent to modify this
Agreement by amending Exhibit A to include any future trademarks and trademark
applications within the definition of Trademarks under paragraph 2 or paragraph
7 hereof.
9. Upon and at any time after the occurrence of an Event of Default,
Agent shall have, in addition to all other rights and remedies given it by this
Agreement, all rights and remedies under applicable law and all rights and
remedies of a secured party under the UCC. Without limiting the generality of
the foregoing, Agent may immediately, for its benefit and the benefit of the
Lenders, without demand of performance and without notice (except as described
in the next sentence, if required by applicable law), or demand whatsoever to
the Company, each of which the Company hereby expressly waives, collect directly
any payments due the Company in respect of the Trademark Collateral, or sell at
public or private sale or otherwise realize upon all or from time to time, any
of the Trademark Collateral. The Company hereby agrees that ten (10) days
written notice to the Company of any public or private sale or other disposition
of any of the Trademark Collateral shall be reasonable notice; provided,
however, that no notice shall be required hereunder if not otherwise required by
applicable law. At any such sale or disposition, Agent may, to the extent
permitted by law, purchase the whole or any part of the Trademark Collateral
sold, free from any right of redemption on the part of the Company, which right
the Company hereby waives and releases. After deducting from the proceeds of
such sale or other disposition of the Trademark Collateral all costs and
expenses incurred by Agent in enforcing its rights hereunder (including, without
limitation, all attorneys' fees), Agent shall apply the remainder of such
proceeds to the payment of the Obligations in such order and manner as may be
authorized or required by the Credit Agreement. Any remainder of the proceeds
after payment in full of the Obligations shall be paid over to the Company. If
any deficiency shall arise, the Company and each guarantor of the Obligations
shall remain jointly and severally liable to Agent and Lenders therefor.
10. The Company hereby makes, constitutes and appoints Agent and any
officer or agent of Agent as Agent may select, as the Company's true and lawful
attorney-in-fact, with full power to do any or all of the following if an Event
of Default shall occur and be continuing: to endorse the Company's name on all
applications, documents, papers and instruments necessary for Agent to continue
the registration of or to use the Trademarks, or to grant or issue any exclusive
or nonexclusive license under the Trademarks to any other Person, or to assign,
pledge, convey or otherwise transfer title in or dispose of any Trademark
Collateral to any other Person. The Company hereby ratifies all that such
attorney shall lawfully do or cause to be done by virtue hereof. This power of
attorney, being coupled with an interest, shall be irrevocable until all of the
3
Obligations shall have been satisfied in full and the Credit Agreement shall
have been terminated.
11. At such time as all of the Obligations shall have been satisfied
finally and in full and the Credit Agreement shall have been terminated, Agent
shall execute and deliver to the Company, without representation, warranty or
recourse and at the Company's expense, all releases or other instruments
necessary to terminate Agent's security interest in the Trademark Collateral
subject to any disposition thereof which may have been made by Agent pursuant to
the terms of this Agreement or any of the DIP Financing Documents.
12. Any and all fees, costs and expenses, of whatever kind or nature
(including, without limitation, reasonable attorneys' fees and legal expenses)
incurred by Agent, or incurred by any Lender (subject to any limitation
contained in Section 13.7 of the Credit Agreement), in connection with the
preparation of this Agreement and any other documents relating hereto and the
consummation of this transaction, the filing or recording of any documents
(including, without limitation, all taxes in connection therewith) with the
United States Patent and Trademark Office or in any other public offices, the
payment or discharge of any taxes, counsel fees, maintenance fees, Liens or
otherwise protecting, maintaining, or preserving the Trademark Collateral, or in
defending or prosecuting any actions or proceedings arising out of or related to
the Trademark Collateral, shall be borne and paid by the Company (it being the
intent of the Company and Agent that the Company shall be responsible for the
payment of all sums, fees, costs and expenses, including, without limitation,
all renewal fees with respect to the Trademarks) or, if paid by Agent in its
sole discretion, shall be reimbursed by the Company on demand by Agent and until
so paid shall be added to the principal amount of the Obligations and shall bear
interest at the highest per annum rate in effect from time to time under the
Credit Agreement.
13. The Company shall use commercially reasonable efforts to detect any
infringers of each material Trademark and shall notify Agent in writing of
infringements detected. The Company shall have the duty to prosecute diligently
any trademark application for each material Trademark pending as of the date of
this Agreement or thereafter until the Obligations shall have been paid in full
and the Credit Agreement terminated, to make federal application on registrable
but unregistered Trademarks (subject to Company's reasonable discretion in the
Ordinary Course of Business), to file and prosecute opposition and cancellation
proceedings (subject to Company's reasonable discretion), to file and prosecute
lawsuits to enforce each material Trademark (subject to Company's reasonable
discretion) and to do any and all acts which are deemed necessary or desirable
by Agent, in its reasonable discretion (except that when an Event of Default is
in existence, Agent's discretion shall be absolute), to preserve and maintain
all rights in each material Trademark. Any expenses incurred in connection with
such applications or proceedings shall be borne by the Company. The Company
shall not abandon any material trademark application without the consent of
Agent.
14. Notwithstanding anything to the contrary contained in paragraph 13
hereof, if the Company fails to do so, Agent shall have the right, but shall in
no way be obligated, to bring suit instead in its own name to enforce each
material Trademark and any license hereunder, or to defend any suit or
counterclaim in its own name to protect each material Trademark or any license
hereunder, in either of which events the Company shall at the request of Agent
4
do any and all lawful acts (including bringing suit) and execute any and all
proper documents required by Agent to aid such enforcement, or defense, and the
Company shall promptly, upon demand, reimburse and indemnify Agent for all costs
and expenses incurred in the exercise of Agent's rights under this paragraph 14.
15. If the Company fails to comply with any of its obligations
hereunder, to the extent permitted by applicable law, Agent may do so in the
Company's name or in Agent's name, in Agent's sole discretion, but at the
Company's expense, and the Company agrees to reimburse Agent in full for all
expenses, including, without limitation, reasonable attorneys' fees, incurred by
Agent in prosecuting, defending or maintaining the Trademarks or Agent's
interest therein pursuant to this Agreement.
16. No course of dealing between the Company and Agent or any Lender,
nor any failure to exercise, nor any delay in exercising, on the part of Agent
or any Lender, any right, power or privilege hereunder or under any of the other
DIP Financing Documents shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder or thereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
17. All of Agent's rights and remedies with respect to the Trademark
Collateral, whether established hereby or by any of the other DIP Financing
Documents, or by any other agreements or by applicable law shall be cumulative
and may be exercised singularly or concurrently.
18. The provisions of this Agreement are severable, and if any clause
or provision shall be held invalid and unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, in such jurisdiction, and shall not in any
manner affect such clause or provision in any other jurisdiction, or any other
clause or provision of this Agreement in any jurisdiction.
19. This Agreement, together with the other DIP Financing Documents,
constitutes and expresses the entire understanding of the parties hereto with
respect to the subject matter hereof, and supercedes all prior agreements and
understandings, inducements or conditions, whether expressed or implied, oral or
written. This Agreement is subject to modification only by a writing signed by
the parties, except as provided in paragraph 8 hereof.
20. The benefits and burdens of this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the Agent and of
each Lender and upon the successors of the Company. The Company shall not assign
its rights or delegate its duties hereunder without the prior written consent of
Agent.
21. The Company hereby waives notice of Agent's acceptance hereof.
22. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Georgia.
5
23. To the fullest extent permitted by applicable law, the Company and
Agent each waives the right to trial by jury in any action, suit, proceeding or
counterclaim of any kind arising out of or related to this Agreement or the
Trademark Collateral.
WITNESS the execution hereof under seal as of the day and year first
above written.
CONE XXXXX CORPORATION
By: /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx, Chief Financial Officer
Accepted in Atlanta, Georgia:
BANK OF AMERICA, N.A.,
as Agent
By: /s/Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, Senior Vice
President
6
STATE OF NORTH CAROLINA ss.
ss.
COUNTY OF GUILFORD ss.
BEFORE ME, the undersigned authority, on this day personally appeared
Xxxx X. Xxxxx, Chief Financial Officer of Cone Xxxxx Corporation, to me known to
be the person whose name is subscribed to the foregoing instrument, and
acknowledged to me that he executed the same for the purposes and consideration
therein expressed, in the capacity therein stated, and as the act and deed of
said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE on this 11th day of December,
2003.
/s/ Xxxxxx X. Xxxxxx
Notary Public
My Commission Expires: November 17, 2008
[NOTARIAL SEAL]
STATE OF GEORGIA )
)
COUNTY OF XXXXXX )
BEFORE ME, the undersigned authority, on this day personally appeared
Xxxxxx X. Xxxxxx, Senior Vice President of Bank of America, N.A., as Agent,
known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for the purposes
and consideration therein expressed, in the capacity therein stated, and as the
act and deed of said national banking association.
GIVEN UNDER MY HAND AND SEAL OF OFFICE on this 11th day of December,
2003.
/s/Xxxxx Xxxxx
Notary Public
My Commission Expires: May 5, 2004
[NOTARIAL SEAL]
7
EXHIBIT A
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Trademark Trademark Registration or Renewal
Application Number Date
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COPYRIGHT SECURITY AGREEMENT
This COPYRIGHT SECURITY AGREEMENT is made as of December 11, 2003,
between BANK OF AMERICA, N.A., a national banking association having an office
at 000 Xxxxxxxxx Xxxxxx, X.X., 00xx Xxxxx, Xxxxxxx, Xxxxxxx 00000-0000, as
administrative and collateral agent for itself and Lenders (as hereinafter
defined) (together with its successors in such capacity, "Agent"), and CONE
XXXXX CORPORATION, a North Carolina corporation and a debtor-in-possession in a
Chapter 11 bankruptcy case filed with the United States Bankruptcy Court for the
District of Delaware having its principal place of business at 000 Xxxxx Xxxxxx
Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 (the "Company").
Recitals:
The Company desires to obtain loans and other financial accommodations
from certain financial institutions ("Lenders") as are parties from time to time
to that certain Post-Petition Credit Agreement dated as of December 11, 2003, by
and among the Company, the other borrowers named therein, the Lenders, Agent and
the other agent named therein (as at any time amended, the "Credit Agreement").
Lenders are willing to make loans and other financial accommodations to
the Company from time to time, pursuant to the terms of the Credit Agreement,
provided the Company executes this Agreement.
NOW, THEREFORE, for Ten Dollars ($10.00) and other valuable
consideration, and in consideration of the premises, the Company hereby agrees
with Agent as follows:
1. Capitalized terms used herein (including those used in the Recitals
hereto), unless otherwise defined, shall have the meanings ascribed to them in
the Credit Agreement. As used herein, the phrase "material Copyright" means a
Copyright (as hereinafter defined) that is used by the Company in the Ordinary
Course of Business and the absence of which could reasonably be expected to have
a Material Adverse Effect upon the business, financial condition or operating
results of such Company.
2. To secure the prompt payment and performance of the Obligations, the
Company hereby pledges, assigns and grants to Agent, for its benefit and the
benefit of the Lenders, a continuing security interest in and lien upon all of
the following property of the Company, whether now owned or existing or
hereafter created or acquired (the "Copyright Collateral"):
(a) all copyrights listed on Exhibit A attached hereto and
made a part hereof (as the same may be amended from time to time), and
(i) all renewals thereof, (ii) all income, royalties, damages and
payments now or hereafter due or payable with respect thereto,
including, without limitation, damages and payments for past or future
infringements thereof, (iii) the right to xxx for past, present and
future infringements thereof, and (iv) all rights corresponding thereto
throughout the world (all of the foregoing copyrights, together with
the items described in clauses (i)-(iv), are hereinafter collectively
referred to as the "Copyrights"); and
(b) all proceeds of the foregoing (such as, by way of example,
license royalties and proceeds of infringement suits);
3. The Company represents and warrants to Agent and the Lenders that:
(a) Each material Copyright is subsisting and has not been
adjudged invalid or unenforceable, in whole or in part;
(b) No claim has been made against the Company, nor, to the
best knowledge of the Company, against any other Person, that the use
of any of any material Copyright does or may violate the rights of any
third Person;
(c) The Company has the unqualified right to enter into this
Agreement and perform its terms; and
(e) The Company is the sole and exclusive owner of the entire
right, title and interest in and to all of the Copyrights and of all
other Copyright Collateral (except for Copyright Collateral other than
Copyrights owned by third parties and used by the Company in the
Ordinary Course of Business under a license, whether oral or in
writing), free and clear of any liens, charges and encumbrances,
including, without limitation, pledges, assignments, licenses,
registered user agreements and covenants by the Company not to xxx
third Persons, other than Permitted Liens.
4. The Company agrees that, until all of the Obligations have been
satisfied in full, it will not enter into any agreement which is inconsistent
with the Company's obligations under this Agreement, without Agent's prior
written consent.
5. The Company hereby grants to Agent the right to visit the Company's
plants and facilities which manufacture, inspect or store products sold under
any of the Copyrights and to inspect the products and quality control records
relating thereto in accordance with the provisions of the Credit Agreement.
6. Except with respect to licenses granted to Agent pursuant to Section
7.33(b) of the Credit Agreement, until all of the Obligations have been
satisfied in full and the Credit Agreement has been terminated, the Company
shall not enter into any license agreement relating to any of the Copyrights
with any Person except non-exclusive licenses to customers of the Company in the
Ordinary Course of Business of the Company as presently conducted and for
reasonable and customary compensation, and shall not become a party to any
agreement with any Person that is inconsistent with the Company's duties under
this Agreement.
7. If, before the Obligations have been satisfied in full, the Company
shall obtain rights to any new Copyright registrations or any modification of
any Copyright registration, the provisions of paragraph 2 hereof shall
automatically apply thereto, and the Company shall give to Agent prompt written
notice thereof (except for copyrights with only nominal value).
8. The Company irrevocably authorizes and empowers Agent to modify this
Agreement by amending Exhibit A to include any future copyrights within the
definition of Copyrights under paragraph 2 or paragraph 7 hereof.
2
9. Upon and at any time after the occurrence of an Event of Default,
Agent shall have, in addition to all other rights and remedies given it by this
Agreement, all rights and remedies under applicable law and all rights and
remedies of a secured party under the UCC. Without limiting the generality of
the foregoing, Agent may immediately, for its benefit and the benefit of the
Lenders, without demand of performance and without notice (except as described
in the next sentence, if required by applicable law), or demand whatsoever to
the Company, each of which the Company hereby expressly waives, collect directly
any payments due the Company in respect of the Copyright Collateral, or sell at
public or private sale or otherwise realize upon all or from time to time, any
of the Copyright Collateral. The Company hereby agrees that ten (10) days
written notice to the Company of any public or private sale or other disposition
of any of the Copyright Collateral shall be reasonable notice; provided,
however, that no notice shall be required hereunder if not otherwise required by
applicable law. At any such sale or disposition, Agent may, to the extent
permitted by law, purchase the whole or any part of the Copyright Collateral
sold, free from any right of redemption on the part of the Company, which right
the Company hereby waives and releases. After deducting from the proceeds of
such sale or other disposition of the Copyright Collateral all costs and
expenses incurred by Agent in enforcing its rights hereunder (including, without
limitation, all attorneys' fees), Agent shall apply the remainder of such
proceeds to the payment of the Obligations in such order and manner as may be
authorized or required by the Credit Agreement. Any remainder of the proceeds
after payment in full of the Obligations shall be paid over to the Company. If
any deficiency shall arise, the Company and each guarantor of the Obligations
shall remain jointly and severally liable to Agent and Lenders therefor.
10. The Company hereby makes, constitutes and appoints Agent and any
officer or agent of Agent as Agent may select, as the Company's true and lawful
attorney-in-fact, with full power to do any or all of the following if an Event
of Default shall occur and be continuing: to endorse the Company's name on all
applications, documents, papers and instruments necessary for Agent to maintain
the registration of or to use the Copyrights, or to grant or issue any exclusive
or nonexclusive license under the Copyrights to any other Person, or to assign,
pledge, convey or otherwise transfer title in or dispose of any Copyright
Collateral to any other Person. The Company hereby ratifies all that such
attorney shall lawfully do or cause to be done by virtue hereof. This power of
attorney, being coupled with an interest, shall be irrevocable until all of the
Obligations shall have been satisfied in full and the Credit Agreement shall
have been terminated.
11. At such time as all of the Obligations shall have been satisfied
finally and in full and the Credit Agreement shall have been terminated, Agent
shall execute and deliver to the Company, without representation, warranty or
recourse and at the Company's expense, all releases or other instruments
necessary to terminate Agent's security interest in the Copyright Collateral
subject to any disposition thereof which may have been made by Agent pursuant to
the terms of this Agreement or any of the DIP Financing Documents.
12. Any and all fees, costs and expenses, of whatever kind or nature
(including, without limitation, reasonable attorneys' fees and legal expenses)
incurred by Agent, or incurred by any Lender (subject to any limitations
contained in Section 13.7 of the Credit Agreement), in connection with the
preparation of this Agreement and any other documents relating hereto and the
consummation of this transaction, the filing or recording of any documents
3
(including, without limitation, all taxes in connection therewith) with the
United States Copyright Office or in any other public offices, the payment or
discharge of any taxes, counsel fees, maintenance fees, Liens or otherwise
protecting, maintaining, or preserving the Copyright Collateral, or in defending
or prosecuting any actions or proceedings arising out of or related to the
Copyright Collateral, shall be borne and paid by the Company (it being the
intent of the Company and Agent that the Company shall be responsible for the
payment of all sums, fees, costs and expenses, including, without limitation,
all registration fees with respect to the Copyrights) or, if paid by Agent in
its sole discretion, shall be reimbursed by the Company on demand by Agent and
until so paid shall be added to the principal amount of the Obligations and
shall bear interest at the highest per annum rate in effect from time to time
under the Credit Agreement.
13. The Company shall use commercially reasonable efforts to detect any
infringers of each Copyright and shall notify Agent in writing of infringements
detected. The Company shall have the duty, as of the date of this Agreement or
thereafter until the Obligations shall have been paid in full and the Credit
Agreement terminated, to do any and all acts which are deemed necessary or
desirable by Agent, in its reasonable discretion (except that when an Event of
Default is in existence, Agent's discretion shall be absolute), to preserve and
maintain all rights in each Copyright. Any expenses incurred in connection with
such applications or proceedings shall be borne by the Company.
14. Notwithstanding anything to the contrary contained in paragraph 13
hereof, if the Company fails to do so, Agent shall have the right, but shall in
no way be obligated, to bring suit instead in its own name to enforce each
material Copyright and any license hereunder, or to defend any suit or
counterclaim in its own name to protect each material Copyright or any license
hereunder, in either of which events the Company shall at the request of Agent
do any and all lawful acts (including bringing suit) and execute any and all
proper documents required by Agent to aid such enforcement, or defense, and the
Company shall promptly, upon demand, reimburse and indemnify Agent for all costs
and expenses incurred in the exercise of Agent's rights under this paragraph 14.
15. If the Company fails to comply with any of its obligations
hereunder, to the extent permitted by applicable law, Agent may do so in the
Company's name or in Agent's name, in Agent's sole discretion, but at the
Company's expense, and the Company agrees to reimburse Agent in full for all
expenses, including, without limitation, reasonable attorneys' fees, incurred by
Agent in defending or maintaining the Copyrights or Agent's interest therein
pursuant to this Agreement.
16. No course of dealing between the Company and Agent or any Lender,
nor any failure to exercise, nor any delay in exercising, on the part of Agent
or any Lender, any right, power or privilege hereunder or under any of the other
DIP Financing Documents shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder or thereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
17. All of Agent's rights and remedies with respect to the Copyright
Collateral, whether established hereby or by any of the other DIP Financing
4
Documents, or by any other agreements or by applicable law shall be cumulative
and may be exercised singularly or concurrently.
18. The provisions of this Agreement are severable, and if any clause
or provision shall be held invalid and unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, in such jurisdiction, and shall not in any
manner affect such clause or provision in any other jurisdiction, or any other
clause or provision of this Agreement in any jurisdiction.
19. This Agreement, together with the other DIP Financing Documents,
constitutes and expresses the entire understanding of the parties hereto with
respect to the subject matter hereof, and supercedes all prior agreements and
understandings, inducements or conditions, whether expressed or implied, oral or
written. This Agreement is subject to modification only by a writing signed by
the parties, except as provided in paragraph 8 hereof.
20. The benefits and burdens of this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the Agent and of
each Lender and upon the successors of the Company. The Company shall not assign
its rights or delegate its duties hereunder without the prior written consent of
Agent.
21. The Company hereby waives notice of Agent's acceptance hereof.
22. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Georgia.
23. To the fullest extent permitted by applicable law, the Company and
Agent each waives the right to trial by jury in any action, suit, proceeding or
counterclaim of any kind arising out of or related to this Agreement or the
Copyright Collateral.
WITNESS the execution hereof under seal as of the day and year first
above written.
CONE XXXXX CORPORATION
By: /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx, Chief Financial Officer
Accepted in Atlanta, Georgia:
BANK OF AMERICA, N.A.,
as Agent
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, Senior Vice
President
5
STATE OF NORTH CAROLINA ss.
ss.
COUNTY OF GUILFORD ss.
BEFORE ME, the undersigned authority, on this day personally appeared
Xxxx X. Xxxxx, Chief Financial Officer of Cone Xxxxx Corporation, to me known to
be the person whose name is subscribed to the foregoing instrument, and
acknowledged to me that he executed the same for the purposes and consideration
therein expressed, in the capacity therein stated, and as the act and deed of
said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE on this 11th day of December,
2003.
/s/ Xxxxxx X. Xxxxxx
Notary Public
My Commission Expires: November 17, 2008
[NOTARIAL SEAL]
STATE OF GEORGIA )
)
COUNTY OF XXXXXX )
BEFORE ME, the undersigned authority, on this day personally appeared
Xxxxxx X. Xxxxxx, Senior Vice President of Bank of America, N.A., as Agent,
known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for the purposes
and consideration therein expressed, in the capacity therein stated, and as the
act and deed of said national banking association.
GIVEN UNDER MY HAND AND SEAL OF OFFICE on this 11th day of December,
2003.
/s/ Xxxxx Xxxxx
Notary Public
My Commission Expires: May 5, 2004
[NOTARIAL SEAL]
6
EXHIBIT A
TO
COPYRIGHT SECURITY AGREEMENT
Registration No. Date Registered
