EXHIBIT 99.1
LOAN AND SECURITY AGREEMENT
by and among
ANCHOR GLASS CONTAINER CORPORATION
as Borrower
and
XXXXXXXXX L.L.C.,
as Administrative and Collateral Agent,
and
THE FINANCIAL INSTITUTIONS NAMED HEREIN,
as Lenders
Dated: As of February 14, 2005
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS 6
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SECTION 2. CREDIT FACILITIES 27
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2.1 LOANS 27
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2.3 COMMITMENTS 27
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SECTION 3. INTEREST AND FEES 27
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3.1 INTEREST. 27
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3.2 FEES 29
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3.3 CHANGES IN LAWS AND INCREASED COSTS OF LOANS. 29
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SECTION 4. CONDITIONS PRECEDENT AND SUBSEQUENT 31
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4.1 CONDITIONS PRECEDENT TO INITIAL LOANS 31
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4.2 CONDITIONS PRECEDENT TO ALL LOANS 33
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SECTION 5. GRANT AND PERFECTION OF SECURITY INTEREST 34
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5.1 GRANT OF SECURITY INTEREST 34
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5.3 PERFECTION OF SECURITY INTERESTS 36
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SECTION 6. COLLECTION AND ADMINISTRATION 40
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6.1 BORROWER LOAN ACCOUNT 40
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6.2 STATEMENTS 40
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6.3 COLLECTION OF ACCOUNTS 40
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6.4 PAYMENTS 41
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6.5 AUTHORIZATION TO MAKE LOANS 42
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6.6 USE OF PROCEEDS 42
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6.7 PRO RATA TREATMENT 43
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6.8 SHARING OF PAYMENTS, ETC. 43
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6.9 SETTLEMENT PROCEDURES 44
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6.10 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS 46
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SECTION 7. COLLATERAL REPORTING AND COVENANTS 48
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7.1 COLLATERAL REPORTING 48
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7.4 EQUIPMENT COVENANTS 49
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7.5 POWER OF ATTORNEY 50
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7.6 RIGHT TO CURE 50
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7.7 ACCESS TO PREMISES 51
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SECTION 8. REPRESENTATIONS AND WARRANTIES 51
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8.1 CORPORATE EXISTENCE, POWER AND AUTHORITY 52
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8.2 NAME; STATE OF ORGANIZATION; CHIEF EXECUTIVE OFFICE;
COLLATERAL LOCATIONS. 52
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8.3 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE. 53
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8.4 PRIORITY OF LIENS; TITLE TO PROPERTIES 53
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8.5 TAX RETURNS 53
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8.6 LITIGATION 53
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8.7 COMPLIANCE WITH OTHER AGREEMENTS AND APPLICABLE LAWS 54
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8.8 ENVIRONMENTAL COMPLIANCE 54
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8.9 EMPLOYEE BENEFITS. 55
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8.10 BANK ACCOUNTS 56
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8.11 INTELLECTUAL PROPERTY 56
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8.12 SUBSIDIARIES; AFFILIATES; CAPITALIZATION; SOLVENCY 56
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8.13 LABOR DISPUTES 57
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8.14 RESTRICTIONS ON SUBSIDIARIES 57
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8.15 MATERIAL CONTRACTS 57
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8.16 PAYABLE PRACTICES 58
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8.18 ACCURACY AND COMPLETENESS OF INFORMATION. 58
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8.19 SURVIVAL OF WARRANTIES; CUMULATIVE 58
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SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS 58
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9.1 MAINTENANCE OF EXISTENCE. 58
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9.2 NEW COLLATERAL LOCATIONS 59
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9.3 COMPLIANCE WITH LAWS, REGULATIONS, ETC. 59
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9.4 PAYMENT OF TAXES AND CLAIMS 60
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9.5 INSURANCE 61
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9.6 FINANCIAL STATEMENTS AND OTHER INFORMATION 61
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9.7 SALE OF ASSETS, CONSOLIDATION, MERGER, DISSOLUTION, ETC. 63
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9.8 ENCUMBRANCES 67
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9.9 INDEBTEDNESS 69
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9.10 LOANS, INVESTMENTS, ETC. 77
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9.11 DIVIDENDS AND REDEMPTIONS 79
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9.12 TRANSACTIONS WITH AFFILIATES 80
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9.13 COMPLIANCE WITH ERISA. 81
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9.14 END OF FISCAL YEARS; FISCAL QUARTERS 81
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9.15 CHANGE IN BUSINESS 82
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9.16 LIMITATION OF RESTRICTIONS AFFECTING SUBSIDIARIES 82
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9.17 FIXED CHARGE COVERAGE RATIO 82
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9.18 LICENSE AGREEMENTS. 83
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9.20 COSTS AND EXPENSES 84
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9.21 FURTHER ASSURANCES 85
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SECTION 10. EVENTS OF DEFAULT AND REMEDIES 85
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10.1 EVENTS OF DEFAULT 85
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10.2 REMEDIES 87
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SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS;
GOVERNING LAW
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11.1 GOVERNING LAW; CHOICE OF FORUM; SERVICE OF PROCESS;
JURY TRIAL WAIVER 91
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11.2 WAIVER OF NOTICES 92
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11.3 AMENDMENTS AND WAIVERS. 92
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11.4 WAIVER OF COUNTERCLAIMS 94
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11.5 INDEMNIFICATION 94
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SECTION 12. THE AGENT 95
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12.1 APPOINTMENT, POWERS AND IMMUNITIES 95
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12.2 RELIANCE BY AGENT 95
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12.3 EVENTS OF DEFAULT 96
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12.4 XXXXXXXXX IN ITS INDIVIDUAL CAPACITY 96
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12.5 INDEMNIFICATION 96
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12.6 NON-RELIANCE ON AGENT AND OTHER LENDERS 97
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12.7 FAILURE TO ACT 97
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12.8 ADDITIONAL LOANS 97
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12.9 CONCERNING THE COLLATERAL AND THE RELATED
FINANCING AGREEMENTS 97
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12.11 COLLATERAL MATTERS 98
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12.12 AGENCY FOR PERFECTION 99
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12.13 SUCCESSOR AGENT 100
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SECTION 13. TERM OF AGREEMENT; MISCELLANEOUS 100
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13.1 TERM 100
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13.2 INTERPRETATIVE PROVISIONS 101
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13.3 NOTICES 103
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13.4 PARTIAL INVALIDITY 103
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13.5 CONFIDENTIALITY. 104
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13.6 SUCCESSORS 105
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13.7 ASSIGNMENTS; PARTICIPATIONS. 105
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13.8 ENTIRE AGREEMENT 108
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INDEX TO
EXHIBITS AND SCHEDULES
Exhibit A Form of Assignment and Acceptance
Exhibit B Information Certificate
Exhibit C Form of Compliance Certificate
Exhibit D Form of Copyright Security Agreement
Exhibit E Form of Patent Security Agreement
Exhibit F Form of Trademark Security Agreement
Schedule 1.57 First Supplemental Noteholder Agreements
Schedule 1.86 Material Contracts
Schedule 1.90 Note Collateral
Schedule 1.94 Noteholder Agreements
Schedule 1.106 Permitted Holders
Schedule 8.9 ERISA
Schedule 8.12 Capitalization
Schedule 9.6(d) List of Officers to Notify regarding Inquiries to
Accountants
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LOAN AND SECURITY AGREEMENT
This Loan and Security Agreement dated as of February 14, 2005 is
entered into by and among Anchor Glass Container Corporation, a Delaware
corporation ("Borrower"), the financial institutions from time to time parties
hereto as lenders, whether by execution of this Agreement or an Assignment and
Acceptance (each individually, a "Lender" and collectively, "Lenders") and
Xxxxxxxxx L.L.C., a New York limited liability company ("Xxxxxxxxx"), in its
capacity as administrative and collateral agent for Lenders (in such capacity,
"Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Borrower has requested that Agent and Lenders provide a
secured revolving credit facility to Borrower on and after the Effective Date
pursuant to which Lenders may make loans and provide other financial
accommodations to Borrower; and
WHEREAS, each Lender is willing to agree (severally and not jointly) to
make such loans and provide such financial accommodations to Borrower on a PRO
RATA basis according to its Commitment (as hereinafter defined) on the terms and
conditions set forth herein and Agent is willing to act as agent for Lenders on
the terms and conditions set forth herein and the other Financing Agreements (as
hereinafter defined);
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS
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For purposes of this Agreement, the following terms shall have the
respective meanings given to them below:
1.1 "Accounts" shall mean, all present and future rights of Borrower to
payment of a monetary obligation, whether or not earned by performance, which is
not evidenced by chattel paper or an instrument, (a) for property that has been
or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for
services rendered or to be rendered, (c) for a secondary obligation incurred or
to be incurred, or (d) arising out of the use of a credit or charge card or
information contained on or for use with the card.
1.2 "Adjusted Eurodollar Rate" shall mean, with respect to each Interest
Period for any Eurodollar Rate Loan, the rate per annum (rounded upwards, if
necessary, to the next one-sixteenth (1/16) of one (1%) percent) determined by
dividing (a) the Eurodollar Rate for such Interest Period by (b) a percentage
equal to: (i) one (1) minus (ii) the Reserve Percentage. For purposes hereof,
"Reserve Percentage" shall mean the reserve percentage, expressed as a decimal,
prescribed by any United States or foreign banking authority for determining the
reserve requirement which is or would be applicable to deposits of United States
dollars in a non-United States or an international banking office of Reference
Bank used to fund a Eurodollar Rate Loan or any Eurodollar Rate Loan made with
the proceeds of such deposit, whether or not the Reference Bank actually holds
or has made any such deposits or loans. The Adjusted Eurodollar Rate shall be
adjusted on and as of the effective day of any change in the Reserve Percentage.
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1.3 "Affiliate" shall mean, with respect to a specified Person, any other
Person which directly or indirectly, through one or more intermediaries,
controls or is controlled by or is under common control with such Person, and
without limiting the generality of the foregoing, includes (a) any Person which
beneficially owns or holds ten (10%) percent or more of any class of Voting
Stock of such Person or other equity interests in such Person and (b) any
director or executive officer of such Person. For the purposes of this
definition, the term "control" (including with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of Voting Stock, by agreement or otherwise.
1.4 "Agent" shall mean Xxxxxxxxx L.L.C., a New York limited liability, in
its capacity as administrative agent and collateral agent on behalf of Lenders
pursuant to the terms hereof and any replacement or successor agent appointed
pursuant to the terms and conditions hereof.
1.5 "Agent Payment Account" shall mean account no. 00000000 of Agent at
Citibank, N.A. or such other account of Agent as Agent may from time to time
designate to Borrower as the Agent Payment Account for purposes of this
Agreement and the other Financing Agreements.
1.6 "Assignment and Acceptance" shall mean an Assignment and Acceptance
substantially in the form of Exhibit A attached hereto (with blanks
appropriately completed) delivered to Agent in connection with an assignment of
a Lender's interest hereunder in accordance with the provisions of Section 13.7
hereof.
1.7 "Additional $50,000,000 Notes" shall mean, collectively, the 11% Senior
Secured Notes due 2013 issued by Borrower pursuant to the Note Indenture as
modified by the First Amendment to Indenture in the original principal amount of
$50,000,000 in the aggregate, as the same may exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
1.8 "Bankruptcy Code" shall mean the United States Bankruptcy Code, being
Title 11 of the United States Code as enacted in 1978, as the same has
heretofore been or may hereafter be amended, recodified, modified or
supplemented, together with all rules, regulations and interpretations
thereunder or related thereto.
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1.9 "Bankruptcy Court" shall mean the United States Bankruptcy Court for
the Middle District of Florida or the United States District Court for the
Middle District of Florida or any other court having jurisdiction over the
Chapter 11 Case from time to time.
1.10 "Benefit Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA) which Borrower or any Guarantor sponsors, maintains, or to which
it makes, is making, or is obligated to make contributions, or in the case of a
Multiemployer Plan has made contributions at any time during the immediately
preceding six (6) plan years.
1.11 "Blocked Accounts" shall have the meaning set forth in Section 6.3
hereof.
1.12 "Business Day" shall mean any day other than a Saturday, Sunday, or
other day on which commercial banks are authorized or required to close under
the laws of the State of New York and a day on which Agent is open for the
transaction of business, except that if a determination of a Business Day shall
relate to any Eurodollar Rate Loans, the term Business Day shall also exclude
any day on which banks are closed for dealings in dollar deposits in the London
interbank market or other applicable Eurodollar Rate market.
1.13 "Capital Expenditures" shall mean, with respect to any Person, all
expenditures made and liabilities incurred for the acquisition of assets which
are not, in accordance with GAAP, treated as expense items for such Person in
the year made or incurred or as a prepaid expense applicable to a future year or
years.
1.14 "Capital Leases" shall mean, as applied to any Person, any lease of
(or any agreement conveying the right to use) any property (whether real,
personal or mixed) by such Person as lessee which in accordance with GAAP, is or
is required to be reflected as a capital lease on the balance sheet of such
Person.
1.15 "Capital Stock" shall mean, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
such Person's capital stock or partnership, limited liability company or other
equity interests at any time outstanding, and any and all rights, warrants or
options exchangeable for or convertible into such capital stock or other
interests (but excluding any debt security that is exchangeable for or
convertible into such capital stock).
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1.16 "Cash Equivalents" shall mean, at any time, (a) any evidence of
Indebtedness with a maturity date of one hundred eighty (180) days or less
issued or directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof; PROVIDED, THAT, the full faith
and credit of the United States of America is pledged in support thereof; (b)
certificates of deposit or bankers' acceptances with a maturity of one hundred
eighty (180) days or less of any financial institution that is a member of the
Federal Reserve System having combined capital and surplus and undivided profits
of not less than $250,000,000; (c) commercial paper (including variable rate
demand notes) with a maturity of one hundred eighty (180) days or less issued by
a corporation (except an Affiliate of Borrower) organized under the
laws of any State of the United States of America or the District of Columbia
and rated at least A-1 by Standard & Poor's Ratings Service, a division of The
XxXxxx-Xxxx Companies, Inc. or at least P-1 by Xxxxx'x Investors Service, Inc.;
(d) repurchase obligations with a term of not more than thirty (30) days for
underlying securities of the types described in clause (a) above entered into
with any financial institution having combined capital and surplus and undivided
profits of not less than $250,000,000; (e) repurchase agreements and reverse
repurchase agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the United States of America or issued by any
governmental agency thereof and backed by the full faith and credit of the
United States of America, in each case maturing within one hundred eighty (180)
days or less from the date of acquisition; PROVIDED, THAT, the terms of such
agreements comply with the guidelines set forth in the Federal Financial
Agreements of Depository Institutions with Securities Dealers and Others, as
adopted by the Comptroller of the Currency on October 31, 1985; and (f)
investments in money market funds and mutual funds which invest substantially
all of their assets in securities of the types described in clauses (a) through
(e) above.
1.17 "Change of Control" shall mean (a) the transfer (in one transaction or
a series of transactions) of all or substantially all of the assets of Borrower
to any Person or group (as such term is used in Section 13(d)(3) of the Exchange
Act); (b) the liquidation or dissolution of Borrower or the adoption of a plan
by the stockholders of Borrower relating to the dissolution or liquidation of
Borrower; (c) to the extent clause (e) below is triggered, the acquisition by
any Person or group (as such term is used in Section 13(d)(3) of the Exchange
Act), except for one or more Permitted Holders, of beneficial ownership (as
determined in accordance with Rules 13d-3 and 13d-5 under the Exchange Act,
except that a person will be deemed to have beneficial ownership of all shares
that such person has the right to acquire, whether such right is exercisable
immediately or only after a passage of time), directly or indirectly, of more
than forty (40%) percent (or after a Qualified Public Offering, twenty-five
(25%) percent) of the voting power of the total outstanding Voting Stock (on a
fully diluted basis) of Borrower or the Board of Directors of Borrower; (d)
during any period of two (2) consecutive years, individuals who at the beginning
of such period constituted the Board of Directors of Borrower (together with any
new directors who have been appointed by any Permitted Holder, or whose
nomination for election by the stockholders of Borrower, as the case may be, was
approved by a vote of at least sixty-six and two-thirds (66 2/3%) percent of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of Borrower then still in office; or (e) the failure of the Permitted
Holders to own directly or indirectly at least thirty percent (30%) of the
voting power of the total outstanding Voting Stock of Borrower.
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1.18 "Chapter 11 Case" shall mean the chapter 11 case of Borrower referred
to as IN RE ANCHOR GLASS CONTAINER CORPORATION, Case No. 02-07233-8C1 filed in
the Bankruptcy Court.
1.19 "Code" shall mean the Internal Revenue Code of 1986, as the same now
exists or may from time to time hereafter be amended, modified, recodified or
supplemented, together with all rules, regulations and interpretations
thereunder or related thereto.
1.20 "Collateral" shall have the meaning set forth in Section 5 hereof.
1.27 "Collateral Access Agreement" shall mean an agreement in writing, in
form and substance satisfactory to Agent, from any lessor of premises to
Borrower, or any other person to whom any Collateral is consigned or who has
custody, control or possession of any such Collateral or is otherwise the owner
or operator of any premises on which any of such Collateral is located, pursuant
to which such lessor, consignee or other person, among other things,
acknowledges the first priority security interest of Agent in such Collateral
(subject to liens and security interests permitted herein), agrees to waive any
and all claims such lessor, consignee or other person may, at any time, have
against such Collateral, whether for processing, storage or otherwise, and
agrees to permit Agent access to, and the right to remain on, the premises of
such lessor, consignee or other person so as to exercise Agent's rights and
remedies and otherwise deal with such Collateral and in the case of any
consignee or other person who at any time has custody, control or possession of
any Collateral, acknowledges that it holds and will hold possession of the
Collateral for the benefit of Agent and Lenders and agrees to follow all
instructions of Agent with respect thereto.
1.22 "Commitment" shall mean, at any time, as to each Lender, the principal
amount set forth below such Lender's signature on the signatures pages hereto
designated as the Commitment or on Schedule 1 to the Assignment and Acceptance
pursuant to which such Lender became a Lender hereunder in accordance with the
provisions of Section 13.7 hereof, as the same may be adjusted from time to time
in accordance with the terms hereof; sometimes being collectively referred to
herein as "Commitments".
1.23 "Confirmation Order" shall mean the Order Confirming the Amended
Chapter 11 Plan of Reorganization issued by the Bankruptcy Court and entered on
August 8, 2002 in the Chapter 11 Case.
1.24 "Congress" shall mean Congress Financial Corporation (Central), an
Illinois corporation, in its capacity as agent acting for and on behalf of the
lenders pursuant to the Congress Loan Agreement, together with its successors
and assigns and any replacement or successor agent thereunder.
1.25 "Congress Excess Availability" shall mean "Excess Availability" as
defined in the Congress Loan Agreement as in effect on the date hereof.
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1.26 [Intentionally Omitted]
1.27 "Congress Lenders" shall mean "Lenders" as defined in the Congress
Loan Agreement.
1.28 "Congress Loan Agreement" means that certain Loan and Security
Agreement, dated as of August 30, 2002, by and among Borrower, the Guarantors,
Congress, and the other Congress Lenders, as amended by that certain Amendment
No. 1 to Loan and Security Agreement, dated as of December 31, 2002, by and
among Borrower, Congress, and the other Congress Lenders, that certain Amendment
No. 2 to Loan and Security Agreement, dated as of February 7, 2003, by and
between Borrower and Congress, as consented to by the other Congress Lenders,
that certain Amendment No. 3 to Loan and Security Agreement, dated as of July
25, 2003, by and between Borrower and Congress, as consented to by the other
Congress Lenders, that certain Amendment No. 4 to Loan and Security Agreement,
dated as of November 4, 2004, by and between Borrower and Congress, as consented
to by the other Congress Lenders and the Congress Loan Agreement Amendment, as
the same may be amended, modified, supplemented, extended, renewed, restated or
replaced from time to time to the extent permitted hereunder.
1.29 "Congress Loan Agreement Amendment" means that certain Amendment No.
5 to Loan and Security Agreement, dated as of the date hereof, by and between
Borrower and Congress, as consented to by the other Congress Lenders.
1.30 "Congress Loan Documents" means the "Financing Agreements", as such
term is defined in the Congress Loan Agreement.
1.31 "Connellsville, Pennsylvania Plant" shall mean the Real Property and
Equipment of Borrower located at 0000 Xxxxxxxx Xxxxxx, Xxxxxxxxxxxxx,
Xxxxxxxxxxxx.
1.32 "Credit Facility" shall mean the Loans provided to or for the benefit
of Borrower pursuant to Sections 2.1 and 2.2 hereof.
1.33 "Dayville, Connecticut Closed Plant" shall mean the closed plant of
Borrower consisting of the Real Property located at 000 Xxxxxxxx Xxxxxxxx,
Xxxxxxxx, Xxxxxxxxxxx.
1.34 "Default" shall mean an act, condition or event which with notice or
passage of time or both would constitute an Event of Default.
1.35 "Defaulting Lender" shall have the meaning set forth in Section 6.9
hereof.
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1.36 "Deposit Account Control Agreement" shall mean an agreement in
writing, in form and substance satisfactory to Agent, by and among Agent,
Borrower or an Obligor with a deposit account at any bank and the bank at which
such deposit account is at any time maintained which provides that such bank
will comply with instructions originated by Agent directing disposition of the
funds in the deposit account without further consent by Borrower or such Obligor
and such other terms and conditions as Agent may require, including as to any
such agreement with respect to any Blocked Account, providing that all items
received or deposited in the Blocked Accounts are the property of Agent, that
the bank has no lien upon, or right to setoff against, the Blocked Accounts, the
items received for deposit therein, or the funds from time to time on deposit
therein and that the bank will wire, or otherwise transfer, in immediately
available funds, on a daily basis to the Agent Payment Account all funds
received or deposited into the Blocked Accounts.
1.37 "EBITDA" shall mean, as to any Person, with respect to any period, an
amount equal to the Net Income of such Person and its Subsidiaries for such
period on a consolidated basis determined in accordance with GAAP, PLUS
depreciation, amortization and other non-cash charges (including, but not
limited to, imputed interest and deferred compensation) of such Person and its
Subsidiaries for such period (to the extent deducted in the computation of Net
Income of such Person and its Subsidiaries in such period), all in accordance
with GAAP, PLUS the Interest Expense of such Person and its Subsidiaries for
such period (to the extent deducted in the computation of Net Income in such
period), PLUS charges for Federal, Provincial, State, local and foreign income
taxes (to the extent included in the computation of Net Income in such period.).
1.38 "Eligible Transferee" shall mean (a) any Lender that is an original
signatory party hereto; (b) the parent company of any Lender and/or any
Affiliate or Related Fund of such Lender; (c) any person (whether a corporation,
partnership, trust or otherwise) that is engaged in the business of making,
purchasing, holding or otherwise investing in bank loans and similar extensions
of credit in the ordinary course of its business and is administered or managed
by a Lender or with respect to any such Lender that is a fund which invests in
bank loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor, and in
each case is approved by Agent; and (d) any other commercial bank, financial
institution or "accredited investor" (as defined in Regulation D under the
Securities Act of 1933) approved by Agent, PROVIDED, THAT, (i) neither Borrower
nor any Obligor shall qualify as an Eligible Transferee and (ii) no Person to
whom any Indebtedness which is in any way subordinated in right of payment to
any other Indebtedness of Borrower or Obligor shall qualify as an Eligible
Transferee, except as Agent may otherwise specifically agree.
1.39 "Environmental Laws" shall mean all foreign, Federal, State and local
laws (including common law), legislation, rules, codes, licenses, permits
(including any conditions imposed therein), authorizations, judicial or
administrative decisions, injunctions or agreements between Borrower and any
Governmental Authority, (a) relating to pollution and the protection,
preservation or restoration of the environment (including air, water vapor,
surface water, ground water, drinking water, drinking water supply, surface
land, subsurface land, plant and animal life or any other natural resource), or
to human health or safety, (b) relating to the exposure to, or the use, storage,
recycling, treatment, generation, manufacture, processing, distribution,
transportation, handling, labeling, production, release or disposal, or
threatened release, of Hazardous Materials, or (c) relating to all laws with
regard to recordkeeping, notification, disclosure and reporting requirements
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respecting Hazardous Materials. The term "Environmental Laws" includes (i) the
Federal Comprehensive Environmental Response, Compensation and Liability Act of
1980, the Federal Superfund Amendments and Reauthorization Act, the Federal
Water Pollution Control Act of 1972, the Federal Clean Water Act, the Federal
Clean Air Act, the Federal Resource Conservation and Recovery Act of 1976
(including the Hazardous and Solid Waste Amendments thereto), the Federal Solid
Waste Disposal and the Federal Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act, and the Federal Safe Drinking Water
Act of 1974, (ii) applicable state counterparts to such laws and (iii) any
common law or equitable doctrine that may impose liability or obligations for
injuries or damages due to, or threatened as a result of, the presence of or
exposure to any Hazardous Materials.
1.40 "Equipment" shall mean all of Borrower's now owned and hereafter
acquired equipment, wherever located, including machinery, data processing and
computer equipment (whether owned or licensed and including embedded software),
vehicles, tools, furniture, fixtures, all attachments, accessions and property
now or hereafter affixed thereto or used in connection therewith, and
substitutions and replacements thereof, wherever located.
1.41 "Equipment Financing" shall mean the equipment financing of Borrower
under the Equipment Lease Financing Agreements.
1.42 "Equipment Lease Financing Agreements" shall mean, individually and
collectively, the Master Lease Agreement, dated as of December 26, 2002, between
Borrower, as lessee, and Equipment Lessor, as lessor, as supplemented by
Equipment Schedule No. 1 thereto, dated December 26, 2002 (amended and restated
under Amended and Restated Schedule No. 1 thereto, dated March 26, 2003), and
the other agreements, documents and instruments executed or delivered in
connection therewith (as the same now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced).
1.43 "Equipment Lessor" shall mean General Electric Capital Corporation,
for itself and as agent.
1.44 "ERISA" shall mean the United States Employee Retirement Income
Security Act of 1974, together with all rules, regulations and interpretations
thereunder or related thereto.
1.45 "ERISA Affiliate" shall mean any person required to be aggregated with
Borrower or any of its Subsidiaries under Sections 414(b), 414(c), 414(m) or
414(o) of the Code.
1.46 "ERISA Event" shall mean (a) any "reportable event", as defined in
Section 4043(c) of ERISA or the regulations issued thereunder, with respect to a
Benefit Plan; (b) the adoption of any amendment to a Benefit Plan that would
require the provision of security pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA; (c) the existence with respect to any Benefit Plan of an
"accumulated funding deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (d) the filing pursuant to Section
412 of the Code or Section 303(d) of ERISA of an application for a waiver of the
minimum funding standard with respect to any Benefit Plan; (e) the occurrence of
a "prohibited transaction" with respect to which Borrower or any Obligor, or any
of its or their respective Subsidiaries is a "disqualified person" (within the
meaning of Section 4975 of the Code) or with respect to which Borrower, any
Obligor or any of its or their respective Subsidiaries could otherwise be
15
liable; (f) a complete or partial withdrawal by Borrower, any Obligor or any
ERISA Affiliate from a Multiemployer Plan or a cessation of operations which is
treated as such a withdrawal or notification that a Multiemployer Plan is in
reorganization; (g) the filing of a notice of intent to terminate, the treatment
of a Benefit Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Benefit
Plan; (h) 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 Benefit Plan; (i) the imposition of any
liability under Title IV of ERISA, other than the Pension Benefit Guaranty
Corporation premiums due but not delinquent under Section 4007 of ERISA, upon
Borrower, any Obligor or any ERISA Affiliate in excess of $1,000,000 and (j) any
other event or condition with respect to a Benefit Plan including any Benefit
Plan subject to Title IV of ERISA maintained, or contributed to, by any ERISA
Affiliate that could reasonably be expected to result in liability of Borrower
in excess of $1,000,000.
1.47 "Eurodollar Rate" shall mean with respect to the Interest Period for a
Eurodollar Rate Loan, the interest rate per annum equal to the arithmetic
average of the rates of interest per annum (rounded upwards, if necessary, to
the next one-sixteenth (1/16) of one (1%) percent) at which Reference Bank is
offered deposits of United States dollars in the London interbank market (or
other Eurodollar Rate market selected by Borrower or and approved by Agent) on
or about 11:00 a.m. (New York time) two (2) Business Days prior to the
commencement of such Interest Period in amounts substantially equal to the
principal amount of the Eurodollar Rate Loans requested by and available to
Borrower in accordance with this Agreement, with a maturity of comparable
duration to the Interest Period selected by or on behalf of Borrower.
1.48 "Eurodollar Rate Loans" shall mean any Loans or portion thereof on
which interest is payable based on the Adjusted Eurodollar Rate in accordance
with the terms hereof.
1.49 "Event of Default" shall have the meaning given in Section 10.1
hereof.
1.50 [Intentionally Omitted]
1.51 [Intentionally Omitted]
1.52 "Exchange Act" shall mean the Securities Exchange Act of 1934,
together with all rules, regulations and interpretations thereunder or related
thereto.
1.53 "Excluded Taxes" shall mean: (a) income taxes imposed on the net
income of Agent or any Lender (or Transferee) in the jurisdiction of Agent's or
such Lender's applicable lending office or jurisdiction of organization or any
political subdivision thereof and (b) franchise or similar taxes imposed on or
determined by reference to the net income or net profits of Agent or any Lender
(or Transferee), in each case by the United States of America or by the
jurisdiction under the laws of which such Agent, Lender (or Transferee) (i) is
organized or resident (or any political subdivision thereof), (ii) has its
applicable lending office located or (iii) is otherwise doing business.
16
1.54 "Financing Agreements" shall mean, collectively, this Agreement, the
Intercreditor Agreement, the IP Security Agreements, and all notes, guarantees,
security agreements, deposit account control agreements, investment property
control agreements, intercreditor agreements and all other agreements, documents
and instruments now or at any time hereafter executed and/or delivered by
Borrower or any Obligor in connection with this Agreement, the Collateral or the
Obligations.
1.55 "Financial Projections" shall mean the projections of the financial
condition of Borrower (together with the assumptions thereto) consisting of the
balance sheet, statement of income and loss, and statement of cash flow, for the
fiscal year of Borrower required to be delivered to Agent in accordance with
Section 9.6 hereof.
1.56 "First Supplement to Indenture" shall mean the First Supplement to
Indenture, dated as of August 4, 2003, between Borrower, as issuer, and Note
Trustee, in connection with the issuance of the Additional $50,000,000 Notes, as
the same exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
1.57 "First Supplemental Noteholder Agreements" shall mean, collectively,
the following as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced: (a) the First Supplement
to Indenture, (ii) the Additional $50,000,000 Notes, (iii) the agreements listed
on Schedule 1.57 hereto and (iv) all agreements, documents and instruments at
any time executed or delivered by Borrower or any other person with, to or in
favor of Note Trustee or any Noteholder in connection therewith or related
thereto.
1.58 "Fixed Charge Coverage Ratio" shall mean, as to any applicable period,
with respect to Borrower and its Subsidiaries, the ratio of (a) EBITDA of the
Borrower and its Subsidiaries for such period to (b) Fixed Charges of Borrower
and its Subsidiaries for such period."
1.59 "Fixed Charges" shall mean, as to any Person and its Subsidiaries with
respect to any period, the sum of, without duplication, (a) all Interest Expense
(which for purposes of this definition shall not include amortizing payments of
deferred financing charges that do not constitute interest), (b) all Capital
Expenditures (other than Capital Expenditures that are financed with proceeds of
Indebtedness for borrowed money except for Loans) of such Person and its
Subsidiaries, (c) cash dividends, repurchases or redemptions paid by such Person
and its Subsidiaries (other than to such Person or such Person's Subsidiaries)
during such period in respect of Capital Stock, (d) payments to the PBGC under
the PBGC Settlement Agreements as in effect on the date hereof, (e) all
regularly scheduled (as determined at the beginning of the respective period)
principal payments of Indebtedness for borrowed money and
17
Indebtedness with respect to Capital Leases (and without duplicating in items
(a) and (b) of this definition, the interest component with respect to
Indebtedness under Capital Leases), (f) federal, state, local and foreign income
taxes paid in cash, (g) management fees paid in cash, and (h) restructuring
charges paid in cash related to the closing of the Connellsville, Pennsylvania
Plant and other restructuring charges paid in cash (in each case as to such
Person and its Subsidiaries for such period and to the extent not included in
the calculation of EBITDA of such Person and its Subsidiaries for such period).
1.60 "Funding Date" shall have the meaning set forth in Section 3.3 hereof.
1.61 "GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time as set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board which are applicable to the
circumstances as of the date of determination consistently applied, except that,
for purposes of Section 9.17 hereof, GAAP shall be determined on the basis of
such principles in effect on the date hereof and consistent with those used in
the preparation of the most recent audited financial statements delivered to
Agent prior to the date hereof.
1.62 [Intentionally Omitted]
1.63 [Intentionally Omitted]
1.64 "Ghaznavi Settlement Documents" shall mean, individually and
collectively (as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced) the following: (a) the
Stipulation and Agreement of Compromise and Release, dated as of June 19, 2002,
by and between plaintiffs, Borrower and the other defendants party to COMAC
PARTNERS, L.P., ET AL. V. XXXX X. XXXXXXXX, ET AL. AND ANCHOR GLASS CONTAINER
CORPORATION, civil action no. 18417-NC, filed in the Court of Chancery of
Delaware, New Castle County; (b) Motion of Anchor Glass Container Corporation
For Entry of An Order Approving Compromise of Controversies in Derivative
Lawsuit, dated July 24, 2002, as filed with the Bankruptcy Court; (c) Policy
Release, dated June 19, 2002, by and between Liberty International Canada, a
division of Liberty Mutual Insurance Company, Consumers Packaging Inc.,
Borrower, G&G Investments Inc., KPMG Inc. as trustee in the bankruptcy for
Consumers Packaging Inc. and Xxxx X. Xxxxxxxx; (d) Order of the Bankruptcy Court
approving the Stipulation and Agreement of Compromise and Release; and (e) all
agreements, documents, and instruments executed or delivered in connection
therewith.
1.65 [Intentionally Omitted]
1.66 "Governmental Authority" shall mean any nation or government, any
state, province, or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
1.67 "Guarantors" shall mean, jointly and severally, individually and
collectively, each direct or indirect Subsidiary of Borrower formed or acquired
after the date hereof, and each of their respective successors and assigns.
18
1.68 "Hazardous Materials" shall mean any hazardous, toxic or dangerous
substances, materials and wastes that are or become regulated under any
Environmental Law (including any that are or become classified as hazardous or
toxic under any Environmental Law), including hydrocarbons (including naturally
occurring or man-made petroleum and hydrocarbons), flammable explosives,
asbestos, urea formaldehyde insulation, radioactive materials, biological
substances, polychlorinated biphenyls, pesticides, herbicides and any other kind
and/or type of pollutants or contaminants (including materials which include
hazardous constituents), sewage, sludge, industrial slag, solvents and/or any
other similar substances, materials, or wastes and including any other
substances, materials or wastes.
1.69 "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 Borrower's exposure to fluctuations in interest or
exchange rates, loan, credit exchange, security or currency valuations or
commodity prices.
1.70 "Indebtedness" shall mean, with respect to any Person, any liability,
whether or not contingent, (a) in respect of borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof) or evidenced by bonds, notes, debentures or similar
instruments; (b) representing the balance deferred and unpaid of the purchase
price of any property or services (except any such balance that constitutes an
account payable to a trade creditor (whether or not an Affiliate) created,
incurred, assumed or guaranteed by such Person in the ordinary course of
business of such Person in connection with obtaining goods, materials or
services that is not overdue by more than ninety (90) days, unless the trade
payable is being contested in good faith); (c) all obligations as lessee under
leases which have been, or should be, in accordance with GAAP recorded as
Capital Leases; (d) any contractual obligation, contingent or otherwise, of such
Person to pay or be liable for the payment of any indebtedness described in this
definition of another Person, including, without limitation, any such
indebtedness, directly or indirectly guaranteed, or any agreement to purchase,
repurchase, or otherwise acquire such indebtedness, obligation or liability or
19
any security therefor, or to provide funds for the payment or discharge thereof,
or to maintain solvency, assets, level of income, or other financial condition;
(e) all obligations to purchase, redeem, retire or otherwise acquire for value
any Capital Stock or other equity securities issued by such Person valued, in
the case of redeemaable stock at the greater of voluntary liquidation preference
and the involuntary liquidation preference plus accrued and unpaid dividends;
(f) all reimbursement obligations and other liabilities of such Person with
respect to surety bonds (whether bid, performance or otherwise), letters of
credit, banker's acceptances, drafts or similar documents or instruments issued
for such Person's account; (g) all indebtedness of such Person in respect of
indebtedness of another Person for borrowed money or indebtedness of another
Person otherwise described in this definition which is secured by any consensual
lien, security interest, collateral assignment, conditional sale, mortgage, deed
of trust, or other encumbrance on any asset of such Person, whether or not such
obligations, liabilities or indebtedness are assumed by or are a personal
liability of such Person, all as of such time; (h) all obligations, liabilities
and indebtedness of such Person (marked to market) arising under Hedge
Agreements and (i) all obligations owed by such Person under License Agreements
with respect to non-refundable, advance or minimum guarantee royalty payments.
1.71 "Information Certificate" shall mean the Information Certificates of
Borrower constituting Exhibit B hereto containing material information with
respect to Borrower, its businesses and assets provided by or on behalf of
Borrower to Agent and Lenders in connection with the preparation of this
Agreement and the other Financing Agreements and the financing arrangements
provided for herein.
1.72 "Intellectual Property" shall mean Borrower's now owned and hereafter
arising or acquired: patents, patent rights, patent applications, copyrights,
works which are the subject matter of copyrights, copyright registrations,
trademarks, trade names, trade styles, trademark and service xxxx applications,
and licenses and rights to use any of the foregoing; all extensions, renewals,
reissues, divisions, continuations, and continuations-in-part of any of the
foregoing; all rights to xxx for past, present and future infringement of any of
the foregoing; inventions, trade secrets, formulae, processes, compounds,
drawings, designs, blueprints, surveys, reports, manuals, and operating
20
standards; goodwill (including any goodwill associated with any trademark or the
license of any trademark); customer and other lists in whatever form maintained;
trade secret rights, copyright rights, rights in works of authorship, domain
names and domain name registration; software and contract rights relating to
computer software programs, in whatever form created or maintained.
1.73 "Intercreditor Agreement" shall mean the Intercreditor Agreement,
dated as of the date hereof, between Agent, for itself and on behalf of the
Lenders, and Congress, for itself and on behalf of the Congress Lenders, and as
acknowledged by Borrower, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
1.74 "Interest Expense" shall mean, for any period, as to any Person, all
of the following as determined in accordance with GAAP: (a) total interest
expense of such Person and its Subsidiaries on a consolidated basis for such
period, whether paid or accrued (including the interest component of Capital
Leases for such period), including, without limitation, all bank fees,
commissions, discounts and other fees and charges owed with respect to letters
of credit (but excluding amortization of discount and amortization of deferred
financing fees paid in cash in connection with the transactions contemplated
hereby, interest (payable by addition to principal or in the form of property
other than cash and any other interest expense not payable in cash), MINUS (b)
any net payments received by such Person and its Subsidiaries on a consolidated
basis during such period as interest income received in respect of its
investments in cash.
1.75 "Interest Period" shall mean for any Eurodollar Rate Loan, a period of
approximately one (1), two (2), or three (3) months duration as Borrower may
elect, the exact duration to be determined in accordance with the customary
practice in the applicable Eurodollar Rate market; PROVIDED, THAT, Borrower may
not elect an Interest Period which will end after the last day of the
then-current term of this Agreement.
21
1.76 "Interest Rate" shall mean,
(a) Subject to clause (b) of this definition below:
(iv) as to Prime Rate Loans, a rate equal to six percent (6%) per
annum in excess of the Prime Rate,
(v) as to Eurodollar Rate Loans, a rate equal to eight percent
(8%) per annum in excess of the Adjusted Eurodollar Rate (based on the
Eurodollar Rate applicable for the Interest Period selected by Borrower, as in
effect two (2) Business Days prior to the commencement of such Interest Period,
whether such rate is higher or lower than any rate previously quoted to
Borrower).
(b) Notwithstanding anything to the contrary contained in clause
(a) of this definition, at Agent's or Required Lenders' option, for the period
(A) from and after the effective date of termination or non-renewal hereof until
Agent and Lenders have received full and final payment of all outstanding and
unpaid Obligations which are not contingent and cash collateral or letter of
credit, as Agent may specify, in the amounts and on the terms required under
Section 13.1 hereof for contingent Obligations (notwithstanding entry of a
judgment against Borrower) and (B) from and after the date of the occurrence of
an Event of Default and for so long as such Event of Default is continuing, the
Interest Rate shall be two percent (2%) per annum above the per annum rate
otherwise applicable hereunder.
1.77 "Inventory" shall mean all of Borrower's now owned and hereafter
existing or acquired goods, wherever located, which (a) are leased by Borrower
as lessor; (b) are held by Borrower for sale or lease or to be furnished under a
contract of service; (c) are furnished by Borrower under a contract of service;
or (d) consist of raw materials, work in process, finished goods or materials
used or consumed in its business.
1.78 [Intentionally Omitted]
1.79 "Investment Property Control Agreement" shall mean an agreement in
writing, in form and substance satisfactory to Agent, by and among Agent,
Borrower or any Obligor (as the case may be) and any securities intermediary,
commodity intermediary or other person who has custody, control or possession of
any investment property of Borrower or such obligor acknowledging that such
securities intermediary, commodity intermediary or other person has custody,
control or possession of such investment property on behalf of Agent, that it
will comply with entitlement orders originated by Agent with respect to such
investment property, or other instructions of Agent, or (as the case may be)
apply any value distributed on account of any commodity contract as directed by
Agent, in each case, without the further consent of Borrower or such Obligor and
including such other terms and conditions as Agent may require.
1.80 "IP Security Agreements" shall mean a Copyright Security Agreement
substantially in the form of Exhibit D attached hereto, a Patent Security
Agreement substantially in the form of Exhibit E attached hereto, and a
Trademark Security Agreement substantially in the form of Exhibit F attached
hereto.
22
1.81 "Lenders" shall mean the financial institutions who are signatories
hereto as Lenders and other persons made a party to this Agreement as a Lender
in accordance with Section 13.7 hereof, and their respective successors and
permitted assigns; each sometimes being referred to herein individually as a
"Lender".
1.82 "Loans" shall mean the loans now or hereafter made by or on behalf of
any Lender or by Agent for the account of any Lender on a revolving basis
pursuant to the Credit Facility (involving advances, repayments and readvances)
as set forth in Section 2.1 hereof.
1.83 "License Agreements" shall have the meaning set forth in Section 8.11
hereof.
1.84 "Xxxxxxxxx" shall have the meaning set forth in the preamble hereto.
1.85 "Material Adverse Effect" shall mean a material adverse effect on (a)
the financial condition, business, performance or operations of Borrower, or (b)
the legality, validity or enforceability of this Agreement or any of the other
Financing Agreements; (c) the legality, validity, enforceability, perfection or
priority of the security interests and liens of Agent upon the Collateral; (d)
any Collateral having an aggregate value in excess of $100,000; (e) the ability
of Borrower to repay the Obligations or of Borrower to perform its obligations
under this Agreement or any of the other Financing Agreements as and when to be
performed; or (f) the ability of Agent or any Lender to enforce the Obligations
or realize upon the Collateral or otherwise with respect to the rights and
remedies of Agent and Lenders under this Agreement or any of the other Financing
Agreements.
1.86 "Material Contract" shall mean (a) the Congress Loan Documents, (b)
the Noteholder Agreements, (c) the Equipment Lease Financing Agreements and (d)
any other contract or other agreement (other than the Financing Agreements),
whether written or oral, to which Borrower is a party as to which the breach,
nonperformance, cancellation or failure to renew by any party thereto would have
a Material Adverse Effect, including, without limitation, the contracts and
agreements set forth on Schedule 1.86 hereto.
1.87 "Maximum Credit" shall mean the amount of $20,000,000.
1.88 "Multiemployer Plan" shall mean 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 Borrower or any
ERISA Affiliate.
1.89 "Net Income" shall mean, with respect to any Person, for any period,
the aggregate of the net income (loss) of such Person and its Subsidiaries, on a
consolidated basis, for such period (excluding to the extent included therein
any extraordinary, one-time or non-recurring gains or non-cash losses) after
deducting all charges which should be deducted before arriving at the net income
(loss) for such period and after deducting the Provision for Taxes for such
period, all as determined in accordance with GAAP; PROVIDED, THAT, (a) the net
income of any Person that is not a majority-owned Subsidiary or that is
accounted for by the equity method of accounting shall be included only to the
extent of the amount of dividends or distributions paid or payable to such
Person or a majority-owned Subsidiary of such Person; (b) the effect of any
23
change in accounting principles adopted by (or applicable to) such Person or its
Subsidiaries after the date hereof shall be excluded; and (c) the net income (if
positive) of any majority-owned Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by such majority-owned Subsidiary
to such Person or to any other majority-owned Subsidiary of such Person is not
at the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to such majority-owned Subsidiary shall be excluded. For the purpose
of this definition, net income excludes any gain (or non-cash loss) together
with any related Provision for Taxes for such gain (or non-cash loss) realized
upon the sale or other disposition of any assets that are not sold in the
ordinary course of business (including, without limitation, dispositions
pursuant to sale and leaseback transactions) or of any Capital Stock of such
Person or a Subsidiary of such Person.
1.90 "Note Collateral" shall mean the real property, equipment, fixed
assets or other property of Borrower described on Schedule 1.90 hereto in or
upon which Note Trustee, for the benefit of Noteholders at any time has a
security interest or lien.
1.91 "Note Indenture" shall mean the Indenture, dated as of February 7,
2003, between Borrower, as issuer, and Note Trustee, in connection with the
Senior Secured Notes, as supplemented and modified by First Supplement to
Indenture, and as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
1.92 "Note Trustee" shall mean The Bank of New York, a New York banking
corporation, in its capacity as trustee and collateral agent pursuant to the
Note Indenture and the other Noteholder Agreements, and its successors and
assigns, including any replacement or successor trustee or agent acting for or
on behalf of the Noteholders or pursuant to the Note Indenture or any additional
trustee or agent.
1.93 "Note Trustee Collateral Account" shall mean the depository account
entitled "Anchor Glass Collateral Account" with account no. 202334 established
at The Bank of New York constituting the "Collateral Account", as defined in the
Note Indenture (as in effect on the date of the execution and delivery of First
Supplement to Indenture).
1.94 "Noteholder Agreements" shall mean, collectively, the following (as
the same now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced): (i) the Note Indenture; (ii) the
Senior Secured Notes; (iii) the agreements listed on Schedule 1.94 hereto, (iv)
the First Supplement Noteholder Agreements, and (v) all agreements, documents
and instruments at any time executed or delivered by Borrower or any other
person with, to or in favor of Note Trustee or any Noteholder in connection
therewith or related thereto.
1.95 "Noteholder Debt" shall mean all obligations, liabilities and
indebtedness of every kind, nature and description owing by Borrower to Note
Trustee or any Noteholder, including principal, interest, charges, fees,
premiums, indemnities and expenses, however evidenced, whether as principal,
surety, endorser, guarantor or otherwise, evidenced by or arising under or in
connection with the Noteholder Agreements, whether now existing or hereafter
arising, whether arising before, during or after the initial or any renewal term
24
of the Noteholder Agreements or after the commencement of any case with respect
to Borrower under the Bankruptcy Code or any similar statute (including, without
limitation, any principal, interest, fees, costs, expenses and other amounts,
whether or not such amounts are allowable in whole or in part, in any such case
or similar proceeding), whether direct or indirect, absolute or contingent,joint
or several, due or not due, primary or secondary, liquidated or unliquidated,
secured or unsecured, and whether arising directly or howsoever acquired by Note
Trustee or such Noteholder.
1.96 "Noteholders" shall mean those Persons that at any time are the
owner or holder, directly or indirectly, of record or beneficially, of any of
the Senior Secured Notes, and their respective successors and assigns; sometimes
being referred to herein individually as a "Noteholder".
1.97 "Obligations" shall mean any and all Loans and all other obligations,
liabilities and indebtedness of every kind, nature and description owing by
Borrower to Agent or any Lender or any of their Affiliates, including principal,
interest, charges, fees, costs and expenses, however evidenced, whether as
principal, surety, endorser, guarantor or otherwise, arising under this
Agreement or any of the other Financing Agreements, whether now existing or
hereafter arising, whether arising before, during or after the initial or any
renewal term of this Agreement or after the commencement of any case with
respect to Borrower under the United States Bankruptcy Code or any similar
statute (including the payment of interest and other amounts which would accrue
and become due but for the commencement of such case, whether or not such
amounts are allowed or allowable in whole or in part in such case), whether
direct or indirect, absolute or contingent, joint or several, due or not due,
primary or secondary, liquidated or unliquidated, or secured or unsecured.
1.98 "Obligor" shall mean any guarantor, endorser, acceptor, surety or
other person liable on or with respect to the Obligations or who is the owner of
any property which is security for the Obligations, including, without
limitation, any Subsidiary that becomes a Guarantor after the date hereof, other
than Borrower.
1.99 [Intentionally Omitted]
1.100 [Intentionally Omitted]
1.101 "Participant" shall mean any financial institution that acquires and
holds a participation in the interest of any Lender in any of the Loans in
conformity with the provisions of Section 13.7 of this Agreement governing
participations.
1.102 "PBGC" shall mean the Pension Benefit Guaranty Corporation, and any
successor or replacement administration, governmental agency or other entity
having the same or similar authority and responsibilities.
25
1.103 "PBGC Settlement Agreement" shall mean the agreement, dated as of
July 31, 2002 between PBGC and Borrower regarding the treatment of the Glass
Companies' Multiemployer Pension Plan, as the same now exists or may hereafter
be amended, modified, supplemented, extended, renewed, restated or replaced.
1.104 "PBGC Settlement Agreements" shall mean collectively, as the same now
exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced, the following: (a) the PBGC Settlement Agreement, and (b)
all agreements, documents, instruments and notices issued in connection with any
of the foregoing.
1.105 [Intentionally Omitted]
1.106 "Permitted Holders" shall mean the Persons identified on Schedule
1.106 hereto.
1.107 "Person" or "person" shall mean any individual, sole
proprietorship, partnership, corporation (including any corporation which elects
subchapter S status under the Code), limited liability company, limited
liability partnership, business trust, unincorporated association, joint stock
corporation, trust, joint venture or other entity or any government or any
agency or instrumentality or political subdivision thereof.
1.108 "PIK Amount" shall mean, as of any date of determination, the amount
of all interest accrued with respect to the Obligations that has been paid in
kind by being added to the balance thereof in accordance with Section 3.1(d)
hereof.
1.109 "Plan of Reorganization" shall mean the Amended Plan of
Reorganization of Anchor Glass Container Corporation, dated June 13, 2002,
together with any amendments, supplements or modifications thereto, as confirmed
pursuant to the Confirmation Order in the Chapter 11 Case.
1.110 "Prime Rate" shall mean the rate from time to time publicly announced
by JPMorgan Chase Bank, N.A., or its successors, as its prime rate, whether or
not such announced rate is the best rate available at such bank.
1.111 "Prime Rate Loans" shall mean any Loans or portion thereof on which
interest is payable based on the Prime Rate in accordance with the terms
thereof.
1.112 "Pro Rata Share" shall mean as to any Lender, the fraction (expressed
as a percentage) the numerator of which is such Lender's Commitment and the
denominator of which is the aggregate amount of all of the Commitments of
Lenders, as adjusted from time to time in accordance with the provisions of
Section 13.7 hereof; PROVIDED, THAT, if the Commitments have been terminated,
the numerator shall be the unpaid amount of such Lender's Loans and the
denominator shall be the aggregate amount of all unpaid Loans.
1.113 "Provision for Taxes" shall mean an amount equal to all taxes imposed
on or measured by net income, whether Federal, State, Provincial, county or
local, and whether foreign or domestic, that are paid or payable by any Person
in respect of any period in accordance with GAAP.
26
1.114 "Qualified Public Offering" shall mean any BONA FIDE, firm
commitment, underwritten offering to the public by Borrower of its Capital Stock
pursuant to an effective registration statement under the Securities Act of
1933, as then in effect, or any comparable statement under any similar federal
statute then in force.
1.115 "Quarterly Interest Payment Date" shall have the meaning set forth in
Section 3.1(d) hereof.
1.116 "Rating Agencies" shall have the meaning set forth in Section 13.7(g)
hereof.
1.117 "Real Property" shall mean all now owned and hereafter acquired real
property of Borrower, including leasehold interests, together with all
buildings, structures, and other improvements located thereon and all licenses,
easements and appurtenances relating thereto, wherever located.
1.118 "Receivables" shall mean all of the following now owned or hereafter
arising or acquired property of Borrower: (a) all Accounts; (b) all interest,
fees, late charges, penalties, collection fees and other amounts due or to
become due or otherwise payable in connection with any Account; (c) all payment
intangibles of Borrower; (d) letters of credit, indemnities, guarantees,
security or other deposits and proceeds thereof issued payable to Borrower or
otherwise in favor of or delivered to Borrower in connection with any Account;
or (e) all other accounts, contract rights, chattel paper, instruments, notes,
general intangibles and other forms of obligations owing to Borrower, whether
from the sale and lease of goods or other property, licensing of any property
(including Intellectual Property or other general intangibles), rendition of
services or from loans or advances by Borrower or to or for the benefit of any
third person (including loans or advances to any Affiliates or Subsidiaries of
Borrower) or otherwise associated with any Accounts, Inventory or general
intangibles of Borrower (including, without limitation, choses in action, causes
of action, tax refunds, tax refund claims, any funds which may become payable to
Borrower in connection with the termination of any Benefit Plan or other
employee benefit plan and any other amounts payable to Borrower from any Benefit
Plan or other employee benefit plan, rights and claims against carriers and
shippers, rights to indemnification, business interruption insurance and
proceeds thereof, casualty or any similar types of insurance and any proceeds
thereof and proceeds of insurance covering the lives of employees on which
Borrower is a beneficiary).
1.119 "Records" shall mean all of Borrower's present and future books of
account of every kind or nature, purchase and sale agreements, invoices, ledger
cards, bills of lading and other shipping evidence, statements, correspondence,
memoranda, credit files and other data relating to the Collateral or any account
debtor, together with the tapes, disks, diskettes and other data and software
storage media and devices, file cabinets or containers in or on which the
foregoing are stored (including any rights of Borrower with respect to the
foregoing maintained with or by any other person).
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1.120 "Reference Bank" shall mean JPMorgan Chase Bank, N.A., or such other
bank as Agent may from time to time designate.
1.121 "Register" shall have the meaning set forth in Section 13.7 hereof.
1.122 "Related Fund" means a fund, money market account, investment account
or other account managed by a Lender or an Affiliate of such Lender or its
investment manager.
1.123 "Renewal Date" shall have the meaning set forth in Section 13.1
hereof.
1.124 "Required Lenders" shall mean, at any time, those Lenders whose Pro
Rata Shares aggregate fifty point one (50.1%) percent or more of the aggregate
of the Commitments of all Lenders, or if the Commitments shall have been
terminated, Lenders to whom at least fifty point one (50.1%) percent of the then
outstanding Obligations are owing.
1.125 [Intentionally Omitted]
1.126 [Intentionally Omitted]
1.127 "Securitization" shall have the meaning set forth in Section 13.7(g)
hereof.
1.128 "Securitization Parties" shall have the meaning set forth in Section
13.7(g) hereof.
1.129 "Senior Secured Notes" shall mean, collectively (as the same now
exist (or may exist upon the issuance thereof) or may hereafter(or thereafter
upon the issuance thereof) be amended, modified, supplemented, extended,
renewed, restated or replaced): (i) the 11% Senior Secured Notes due 2013 issued
by Borrower pursuant to the Note Indenture in the original principal amount of
$300,000,000 in the aggregate, (ii) the 11% Senior Secured Notes due 2013 issued
on the effective date of First Supplement to Indenture by Borrower pursuant to
the Note Indenture as modified by the First Supplement to Indenture in the
original principal amount of $50,000,000 in the aggregate, and (iii) such other
additional notes due on or after 2013 that may be issued after the date hereof
by Borrower pursuant to the Indenture.
1.130 [Intentionally Omitted]
1.131 "Solvent" shall mean, at any time with respect to any Person, that at
such time such Person (a) is able to pay its debts as they mature and has (and
has a reasonable basis to believe it will continue to have) sufficient capital
(and not unreasonably small capital) to carry on its business as conducted and
proposed to be conducted as previously disclosed to Agent and Lenders in writing
prior to the date hereof and (b) the assets and properties of such Person at a
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fair valuation (and including as assets for this purpose at a fair valuation all
rights of subrogation, contribution or indemnification arising pursuant to any
guarantees given by such Person) are greater than the Indebtedness of such
Person, and including subordinated and contingent liabilities computed at the
amount which, such Person has a reasonable basis to believe, represents an
amount which can reasonably be expected to become an actual or matured liability
(and including as to contingent liabilities arising pursuant to any guarantee
the face amount of such liability as reduced to reflect the probability of it
becoming a matured liability).
1.132 "Special Agent Advances" shall have the meaning set forth in Section
12.11 hereof.
1.133 "Subsidiary" or "subsidiary" shall mean, with respect to any Person,
any corporation, limited liability company, limited liability partnership or
other limited or general partnership, trust, association or other business
entity of which an aggregate of at least a majority of the outstanding Capital
Stock or other interests entitled to vote in the election of the board of
directors of such corporation (irrespective of whether, at the time, Capital
Stock of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency), managers, trustees
or other controlling persons of such Person is, at the time, directly or
indirectly, owned by such Person and/or one or more subsidiaries of such Person.
1.134 "UCC" shall mean the Uniform Commercial Code as in effect in the
State of New York, and any successor statute, as in effect from time to time.
1.135 "Value" shall mean, as determined by Agent in good faith, with
respect to Inventory, the lower of (a) cost computed on a first-in first-out
basis in accordance with GAAP or (b) market value.
1.136 "Voting Stock" shall mean with respect to any Person, (a) one (1) or
more classes of Capital Stock of such Person having general voting powers to
elect at least a majority of the board of directors, managers or trustees of
such Person, irrespective of whether at the time Capital Stock of any other
class or classes have or might have voting power by reason of the happening of
any contingency, and (b) any Capital Stock of such Person convertible or
exchangeable without restriction at the option of the holder thereof into
Capital Stock of such Person described in clause (a) of this definition.
SECTION 2. CREDIT FACILITIES
-----------------
2.1 LOANS.
(a) Subject to and upon the terms and conditions contained
herein, each Lender severally (and not jointly) agrees to fund its Pro Rata
Share of Loans to Borrower from time to time in amounts requested by Borrower up
to the amount outstanding at any time equal to the Maximum Credit at such time.
(b) [Intentionally Omitted]
(c) Except in Agent's discretion, with the consent of all
Lenders, or as otherwise provided herein, the aggregate principal amount of the
Loans outstanding at any time shall not exceed the Maximum Credit.
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(d) In the event that the aggregate principal amount of the Loans
outstanding to Borrower exceed the Maximum Credit, such event shall not limit,
waive or otherwise affect any rights of Agent or Lenders in such circumstances
or on any future occasions and Borrower shall, upon demand by Agent, which may
be made at any time or from time to time, immediately repay to Agent the entire
amount of any such excess(es) for which payment is demanded.
2.2 [Intentionally Omitted]
2.3 COMMITMENTS. The aggregate amount of each Lender's Pro Rata Share
of the Loans shall not exceed the amount of such Lender's Commitment, as the
same may from time to time be amended in accordance with the provisions hereof.
2.4 [Intentionally Omitted]
SECTION 3. INTEREST AND FEES
-----------------
3.1 INTEREST.
(a) Borrower shall pay to Agent, for the benefit of Lenders,
interest on the outstanding principal amount of the Loans at the Interest Rate.
All interest accruing hereunder on and after the date of any Event of Default or
termination hereof shall be payable on demand.
(b) Borrower may from time to time request Eurodollar Rate Loans
or may request that Prime Rate Loans be converted to Eurodollar Rate Loans or
that any existing Eurodollar Rate Loans continue for an additional Interest
Period. Such request from Borrower shall specify the amount of the Eurodollar
Rate Loans or the amount of the Prime Rate Loans to be converted to Eurodollar
Rate Loans or the amount of the Eurodollar Rate Loans to be continued (subject
to the limits set forth below) and the Interest Period to be applicable to such
Eurodollar Rate Loans. Subject to the terms and conditions contained herein,
three (3) Business Days after receipt by Agent of such a request from Borrower,
such Eurodollar Rate Loans shall be made or Prime Rate Loans shall be converted
to Eurodollar Rate Loans or such Eurodollar Rate Loans shall continue, as the
case may be, PROVIDED, THAT, (i) no Default or Event of Default shall exist or
have occurred and be continuing, (ii) no party hereto shall have sent any notice
of termination of this Agreement, (iii) Borrower shall have complied with such
customary procedures as are established by Agent and specified by Agent to
Borrower for Eurodollar Rate Loans, (iv) no more than six (6) Interest Periods
30
may be in effect at any one time, (v) the aggregate amount of the Eurodollar
Rate Loans must be in an amount not less than $5,000,000 or an integral multiple
of $1,000,000 in excess thereof, and (vi) Agent and each Lender shall have
determined that the Interest Period or Adjusted Eurodollar Rate is available to
Agent and such Lender and can be readily determined as of the date of the
request for such Eurodollar Rate Loan by Borrower. Any request by or on behalf
of Borrower for Eurodollar Rate Loans or to convert Prime Rate Loans to
Eurodollar Rate Loans or to continue any existing Eurodollar Rate Loans shall be
irrevocable. Notwithstanding anything to the contrary contained herein, Agent
and Lenders shall not be required to purchase United States Dollar deposits in
the London interbank market or other applicable Eurodollar Rate market to fund
any Eurodollar Rate Loans, but the provisions hereof shall be deemed to apply as
if Agent and Lenders had purchased such deposits to fund the Eurodollar Rate
Loans.
(c) So long as clauses (i) - (vi) of Section 3.1(b) hereof are
satisfied, any Eurodollar Rate Loan shall, upon the last day of the applicable
Interest Period, continue as a Eurodollar Rate Loan with a 1 month Interest
Period, unless Agent has received and approved a request to convert such
Eurodollar Rate Loan to a Prime Rate Loan or to change the Interest Period of
such Eurodollar Rate Loan at least three (3) Business Days prior to such last
day in accordance with the terms hereof. If clauses (i) - (vi) of Section 3.1(b)
hereof are not satisfied, any Eurodollar Rate Loan shall automatically convert
to a Prime Rate Loan. Any Eurodollar Rate Loans shall, at Agent's option, upon
notice by Agent to Borrower, be subsequently converted to Prime Rate Loans in
the event that this Agreement shall terminate or not be renewed. Borrower shall
pay to Agent, for the benefit of Lenders, upon demand by Agent (or Agent may, at
its option, charge any loan account of Borrower) any amounts required to
compensate any Lender or Participant for any loss (including loss of anticipated
profits), cost or expense incurred by such person, as a result of the conversion
of Eurodollar Rate Loans to Prime Rate Loans pursuant to any of the foregoing.
(d) Interest shall be payable in cash by Borrower to Agent, for
the account of Lenders, quarterly in arrears not later than each April 1, July
1, October 1, and January 1 of each year (each such date, the "Quarterly
Interest Payment Date") and shall be calculated on the basis of a three hundred
sixty (360) day year and actual days elapsed; PROVIDED that, for the period from
and after the date hereof and through and including June 30, 2005, interest
shall, in lieu of being paid in cash, be paid-in-kind by being added to the
outstanding principal balance of the Obligations (inclusive of any PIK Amount
theretofore so added) on each Quarterly Interest Payment Date during such
period; PROVIDED further that, for the period from and after June 30, 2005 and
through and including the Renewal Date, (a) if the Congress Excess Availability
is less than $12,500,000 for any of the immediately preceding thirty (30)
consecutive days before a Quarterly Interest Payment Date and after giving
effect thereto, (b) if the Congress Excess Availability would be less than
$12,500,000 after giving effect to any cash interest payment to be made on a
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Quarterly Interest Payment Date, (c) if the Congress Excess Availability would
be less than $12,500,000 for any of the immediately succeeding thirty (30)
consecutive days after giving effect to any cash interest payment to be made on
a Quarterly Interest Payment Date based upon the good faith projections of
Borrower deliver to Congress and the Congress Lenders, and (d) if there is a
default under the Congress Loan Agreement that relates to an event or
circumstance that would have a Material Adverse Effect (as defined in the
Congress Loan Agreement) or an event of default under the Congress Loan
Agreement, interest shall, in lieu of being paid in cash, be paid-in-kind by
being added to the outstanding principal balance of the Obligations (inclusive
of any PIK Amount theretofore so added) on such Quarterly Interest Payment Date.
The interest rate on non-contingent Obligations (other than Eurodollar Rate
Loans) shall increase or decrease by an amount equal to each increase or
decrease in the Prime Rate effective on the first day of the month after any
change in such Prime Rate is announced based on the Prime Rate in effect on the
last day of the month in which any such change occurs. In no event shall charges
constituting interest payable by Borrower to Agent and Lenders exceed the
maximum amount or the rate permitted under any applicable law or regulation, and
if any such part or provision of this Agreement is in contravention of any such
law or regulation, such part or provision shall be deemed amended to conform
thereto.
3.2 FEES.
(a) Borrower shall pay to Agent for the account of the Lenders,
in accordance with any written agreements among such Lenders, a closing fee in
an amount equal to $200,000, which fee is fully earned as of the date hereof.
3.3 CHANGES IN LAWS AND INCREASED COSTS OF LOANS.
(a) If after the date hereof, either (i) any change in, or in the
interpretation of, any law or regulation is introduced, including, without
limitation, with respect to reserve requirements, applicable to any Lender or
any banking or financial institution from whom any Lender borrows funds or
obtains credit (a "Funding Bank") but excluding any changes in Excluded Taxes,
or (ii) a Funding Bank or any Lender complies with any future guideline or
request from any central bank or other Governmental Authority or (iii) a Funding
Bank or any Lender determines that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof has or would have the effect described below, or a
Funding Bank or any Lender complies with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, and in the case of any event set forth in
this clause (iii), such adoption, change or compliance has or would have the
direct or indirect effect of reducing the rate of return on any Lender's capital
as a consequence of its obligations hereunder to a level below that which such
Lender could have achieved but for such adoption, change or compliance (taking
into consideration the Funding Bank's or Lender's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, and the
result of any of the foregoing events described in clauses (i), (ii) or (iii) is
or results in an increase in the cost to any Lender of funding or maintaining
the Loans or its Commitment, then Borrower shall from time to time upon demand
by Agent pay to Agent additional amounts sufficient to indemnify Lenders against
such increased cost on an after-tax basis (after taking into account applicable
deductions and credits in respect of the amount indemnified). A certificate as
to the amount of such increased cost shall be submitted to Borrower by Agent and
shall be conclusive, absent manifest error.
32
(b) If prior to the first day of any Interest Period, (i) Agent
shall have determined in good faith (which determination shall be conclusive and
binding upon Borrower) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, (ii) Agent has received notice from
the Required Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to such
Lenders of making or maintaining their Eurodollar Rate Loans during such
Interest Period, or (iii) Dollar deposits in the principal amounts of the
Eurodollar Rate Loans to which such Interest Period is to be applicable are not
generally available in the London interbank market, Agent shall give telecopy or
telephonic notice thereof to Borrower and Lenders as soon as practicable
thereafter, and will also give prompt written notice to Borrower when such
conditions no longer exist. If such notice is given (A) any Eurodollar Rate
Loans requested to be made on the first day of such Interest Period shall be
made as Prime Rate Loans, (B) any Loans that were to have been converted on the
first day of such Interest Period to or continued as Eurodollar Rate Loans shall
be converted to or continued as Prime Rate Loans and (C) each outstanding
Eurodollar Rate Loan shall be converted, on the last day of the then-current
Interest Period thereof, to Prime Rate Loans. Until such notice has been
withdrawn by Agent, no further Eurodollar Rate Loans shall be made or continued
as such, nor shall Borrower have the right to convert Prime Rate Loans to
Eurodollar Rate Loans.
(c) Notwithstanding any other provision herein, if the adoption
of or any change in any law, treaty, rule or regulation or final, non-appealable
determination of an arbitrator or a court or other Governmental Authority or in
the interpretation or application thereof occurring after the date hereof shall
make it unlawful for Agent or any Lender to make or maintain Eurodollar Rate
Loans as contemplated by this Agreement, (i) Agent or such Lender shall promptly
give written notice of such circumstances to Borrower and Agent (which notice
shall be withdrawn whenever such circumstances no longer exist), (ii) the
commitment of such Lender hereunder to make Eurodollar Rate Loans, continue
Eurodollar Rate Loans as such and convert Prime Rate Loans to Eurodollar Rate
Loans shall forthwith be canceled and, until such time as it shall no longer be
unlawful for such Lender to make or maintain Eurodollar Rate Loans, such Lender
shall then have a commitment only to make a Prime Rate Loan when a Eurodollar
Rate Loan is requested and (iii) such Lender's Loans then outstanding as
Eurodollar Rate Loans, if any, shall be converted automatically to Prime Rate
Loans on the respective last days of the then current Interest Periods with
respect to such Loans or within such earlier period as required by law. If any
such conversion of a Eurodollar Rate Loan occurs on a day which is not the last
day of the then current Interest Period with respect thereto, Borrower shall pay
to such Lender such amounts, if any, as may be required pursuant to Section
3.3(d) below.
(d) Borrower shall indemnify Agent and each Lender and hold Agent
and each Lender harmless from any loss or expense which Agent or such Lender may
sustain or incur as a consequence of (i) default by Borrower in making a
borrowing of, conversion into or extension of Eurodollar Rate Loans after
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (ii) default by Borrower in making any prepayment
of a Eurodollar Rate Loan after Borrower has given a notice thereof in
accordance with the provisions of this Loan Agreement, and (iii) the making of a
33
prepayment of Eurodollar Rate Loans on a day which is not the last day of an
Interest Period with respect thereto. With respect to Eurodollar Rate Loans,
such indemnification may include an amount equal to the excess, if any, of (A)
the amount of interest which would have accrued on the amount so prepaid, or not
so borrowed, converted or extended, for the period from the date of such
prepayment or of such failure to borrow, convert or extend to the last day of
the applicable Interest Period (or, in the case of a failure to borrow, convert
or extend, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Eurodollar
Rate Loans provided for herein OVER (B) the amount of interest (as determined by
Agent or such Lender) which would have accrued to Agent or such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank Eurodollar market. This covenant shall survive the
termination or non-renewal of this Agreement and the payment of the Obligations.
SECTION 4. CONDITIONS PRECEDENT AND SUBSEQUENT
-----------------------------------
4.1 CONDITIONS PRECEDENT TO INITIAL LOANS. Each of the following is a
condition precedent to Agent and Lenders making the initial Loans hereunder
(unless waived by Agent in writing):
(a) all requisite corporate action and proceedings in connection
with this Agreement and the other Financing Agreements shall be satisfactory in
form and substance to Agent, and Agent shall have received all information and
copies of all documents, including records of requisite corporate action and
proceedings which Agent may have requested in connection therewith, such
documents where requested by Agent or its counsel to be certified by appropriate
corporate officers or Governmental Authority (and including a copy of the
certificate of incorporation of Borrower certified by the Secretary of State (or
equivalent Governmental Authority) which shall set forth the same complete
corporate name of Borrower as is set forth herein and such document as shall set
forth the organizational identification number of Borrower, if one is issued in
its jurisdiction of incorporation);
(b) [Intentionally Omitted]
(c) [Intentionally Omitted]
34
(d) Agent shall have received, in form and substance satisfactory
to Agent, all consents, waivers, acknowledgments and other agreements from third
persons which Agent may deem necessary or desirable in order to permit, protect
and perfect its security interests in and liens upon the Collateral or to
effectuate the provisions or purposes of this Agreement and the other Financing
Agreements;
(e) [Intentionally Omitted]
(f) [Intentionally Omitted]
(g) [Intentionally Omitted]
(h) [Intentionally Omitted]
(i) [Intentionally Omitted]
(j) Agent shall have received Borrower's balance sheet, income
statement, cash flow, and availability projections (including the assumptions
underlying such projections), all in a level of detail acceptable to Agent,
prepared on a monthly basis for the period ending December 31, 2005;
(k) [Intentionally Omitted]
(l) Agent shall have received and reviewed lien and judgment
search results for the jurisdiction of incorporation of Borrower, which search
results shall be in form and substance satisfactory to Agent;
(m) [Intentionally Omitted]
(n) Agent shall have received, in form and substance satisfactory
to Agent, such opinion letters of counsel to Borrower with respect to the
Financing Agreements and such other matters as Agent may request;
(o) [Intentionally Omitted];
(p) Agent shall have received, in form and substance satisfactory
to Agent, copies of the Congress Loan Agreement Amendment, together with a
certificate of an authorized corporate officer of Borrower stating that such
agreement is in full force and effect and that Borrower has not breached or
defaulted in any of its obligations under such agreement; and
(q) Agent shall have received, in form and substance satisfactory
to Agent, evidence that Equipment Lessor has agreed in writing to forebear from
exercising its rights and remedies under the Equipment Lease Financing
Agreements as a result of the defaults or events of default under the Equipment
Lease Financing Agreements that have occurred and are continuing as of the date
hereof; and
35
(r) the other Financing Agreements and all instruments and
documents hereunder and thereunder shall have been duly executed and delivered
to Agent, in form and substance satisfactory to Agent.
4.2 CONDITIONS PRECEDENT TO ALL LOANS. Each of the following is an
additional condition precedent to the Loans to Borrower, including the initial
Loans and any future Loans:
(a) all representations and warranties contained herein and in
the other Financing Agreements shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been made on and as of the date of the making of each such Loan and after giving
effect thereto, except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and accurate on and as of such earlier
date);
(b) no law, regulation, order, judgment or decree of any
Governmental Authority shall exist, and no action, suit, investigation,
litigation or proceeding shall be pending or threatened in any court or before
any arbitrator or Governmental Authority, which (i) purports to enjoin,
prohibit, restrain or otherwise affect (A) the making of the Loans, or (B) the
consummation of the transactions contemplated pursuant to the terms hereof or
the other Financing Agreements or (ii) has or has a reasonable likelihood of
having a Material Adverse Effect;
(c) no Default or Event of Default shall exist or have occurred
and be continuing on and as of the date of the making of such Loan and after
giving effect thereto; and
(d) the Congress Excess Availability as determined by Agent,
shall not be greater than $3,000,000 as of the date of the making of each such
Loan.
4.3 CONDITIONS SUBSEQUENT TO ALL LOANS. The obligation of any Agent or
any Lender to make any Loan is subject to the fulfillment, on or before the date
applicable thereto, of each of the following conditions subsequent (the failure
by Borrower to so perform or cause to be performed constituting an Event of
Default):
(a) within 10 days of the date hereof, Agent shall have received
evidence of insurance and loss payee endorsements required hereunder and under
the other Financing Agreements, in form and substance satisfactory to Agent, and
certificates of insurance policies or endorsements naming Agent as loss payee;
and
36
(b) on or before February 28, 2005, Agent shall have received, in
form and substance satisfactory to Agent, a waiver by Equipment Lessor of any
defaults or events of default under the Equipment Lease Financing Agreements and
any amendments to the Equipment Lease Financing Agreements required to cure such
defaults.
SECTION 5. GRANT AND PERFECTION OF SECURITY INTEREST
-----------------------------------------
5.1 GRANT OF SECURITY INTEREST. To secure payment and performance of
all Obligations, Borrower hereby grants to Agent, for itself and the ratable
benefit of Lenders, a continuing security interest in, a lien upon, and a right
of set off against, and hereby assigns to Agent, for itself and the ratable
benefit of Lenders, as security, all personal property of Borrower, whether now
owned or hereafter acquired or existing, and wherever located (together with all
other collateral security for the Obligations at any time granted to or held or
acquired by Agent or any Lender, collectively, the "Collateral"):
(a) all Accounts;
(b) all general intangibles, including, without limitation,
all Intellectual Property;
(c) all Inventory;
(d) all chattel paper, including, without limitation, all
tangible and electronic chattel paper;
(e) all instruments, including, without limitation, all
promissory notes;
(f) all documents;
(g) all deposit accounts (other than the Note Trustee
Collateral Account);
(h) all letters of credit, banker's acceptances and similar
instruments and including all letter-of-credit rights;
(i) all supporting obligations and all present and future
liens, security interests, rights, remedies, title and interest in, to and in
respect of Receivables and other Collateral, including (i) rights and remedies
under or relating to guaranties, contracts of suretyship, letters of credit and
credit and other insurance related to the Collateral, (ii) rights of stoppage in
37
transit, replevin, repossession, reclamation and other rights and remedies of an
unpaid vendor, lienor or secured party, (iii) goods described in invoices,
documents, contracts or instruments with respect to, or otherwise representing
or evidencing, Receivables or other Collateral, including returned, repossessed
and reclaimed goods, and (iv) deposits by and property of account debtors or
other persons securing the obligations of account debtors;
(j) all (i) investment property (including securities, whether
certificated or uncertificated, securities accounts, security entitlements,
commodity contracts or commodity accounts) and (ii) monies, credit balances,
deposits and other property of Borrower now or hereafter held or received by or
in transit to Agent, any Lender or its Affiliates or at any other depository or
other institution from or for the account of Borrower, whether for safekeeping,
pledge, custody, transmission, collection or otherwise;
(k) all commercial tort claims, including, without limitation,
those identified in the Information Certificate;
(l) to the extent not otherwise described above, all Receivables;
(m) all Records; and
(n) all products and proceeds of the foregoing, in any form,
including insurance proceeds and all claims against third parties for loss or
damage to or destruction of or other involuntary conversion of any kind or
nature of any or all of the other Collateral.
5.2 Notwithstanding anything to the contrary set forth in Section 5.1
hereof, the types or items of Collateral shall not include:
(a) any interests in real property or improvements thereon or
fixtures;
(b) any equipment or other fixed assets;
(c) the Note Trustee Collateral Account and any moneys,
securities and instruments deposited or required to be deposited in the Note
Trustee Collateral Account pursuant to the Note Indenture;
(d) all products and proceeds of any and all of the foregoing
types or items of Collateral in clauses (a) through (c) of this Section 5.2, in
each case, whether now or hereafter owned or acquired by any of Borrower and its
Subsidiaries; and
38
(e) any rights or interest in any contract, license or license
agreement covering personal property of Borrower, so long as under the terms of
such contract, license or license agreement, or applicable law with respect
thereto, the grant of a security interest or lien therein to Agent is prohibited
and such prohibition has not been waived or the consent of the other party to
such contract, license or license agreement has not been obtained or a lawful
waiver of such prohibition under applicable law has not been obtained; provided,
that, the foregoing exclusion shall in no way be construed to apply if any such
prohibition is unenforceable under Sections 9-406, 9-407 or 9-408 of the UCC or
other applicable law.
5.3 PERFECTION OF SECURITY INTERESTS.
(a) Borrower irrevocably and unconditionally authorizes Agent (or
its agent) to file at any time and from time to time such financing statements
with respect to the Collateral naming Agent or its designee as the secured party
and Borrower as debtor, as Agent may require, and including any other
information with respect to Borrower or otherwise required by part 5 of Article
9 of the Uniform Commercial Code of such jurisdiction as Agent may determine,
together with any amendment and continuations with respect thereto, which
authorization shall apply to all financing statements filed on, prior to or
after the date hereof. Borrower hereby ratifies and approves all financing
statements naming Agent or its designee as secured party and Borrower, as debtor
with respect to the Collateral (and any amendments with respect to such
financing statements) filed by or on behalf of Agent prior to the date hereof
and ratifies and confirms the authorization of Agent to file such financing
statements (and amendments, if any). Borrower hereby authorizes Agent to adopt
on behalf of Borrower any symbol required for authenticating any electronic
filing. In the event that the description of the collateral in any financing
statement naming Agent or its designee as the secured party and Borrower as
debtor includes assets and properties of Borrower that do not at any time
constitute Collateral, whether hereunder, under any of the other Financing
Agreements or otherwise, the filing of such financing statement shall
nonetheless be deemed authorized by Borrower to the extent of the Collateral
included in such description and it shall not render the financing statement
ineffective as to any of the Collateral or otherwise affect the financing
statement as it applies to any of the Collateral. In no event shall Borrower at
any time file, or permit or cause to be filed, any correction statement or
termination statement with respect to any financing statement (or amendment or
continuation with respect thereto) naming Agent or its designee as secured party
and Borrower as debtor. Agent agrees, at the expense of Borrower, to use
reasonable efforts to deliver to Borrower copies of any such financing
statements (or amendments or continuation statements with respect thereto) but
failure to deliver such financing statements shall not result in any liability
to Agent.
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(b) Borrower does not have any chattel paper (whether tangible or
electronic) or instruments as of the date hereof, except as set forth in the
Information Certificate. In the event that Borrower shall be entitled to or
shall receive any chattel paper or instrument after the date hereof, Borrower
shall promptly notify Agent thereof in writing. Promptly upon the receipt
thereof by or on behalf of Borrower (including by any agent or representative),
Borrower shall deliver, or cause to be delivered to Agent, all tangible chattel
paper and instruments that Borrower has or may at any time acquire, accompanied
by such instruments of transfer or assignment duly executed in blank as Agent
may from time to time specify, in each case subject to the Intercreditor
Agreement and except as Agent may otherwise agree. At Agent's option, Borrower
shall, or Agent may at any time on behalf of Borrower, cause the original of any
such instrument or chattel paper to be conspicuously marked in a form and manner
acceptable to Agent with the following legend referring to chattel paper or
instruments as applicable: "This [chattel paper][instrument] is subject to the
security interest of Xxxxxxxxx L.L.C., as Agent, and any sale, transfer,
assignment or encumbrance of this [chattel paper][instrument] violates the
rights of such secured party."
(c) In the event that Borrower shall at any time hold or acquire
an interest in any electronic chattel paper or any "transferable record" (as
such term is defined in Section 201 of the Federal Electronic Signatures in
Global and National Commerce Act or in Section 16 of the Uniform Electronic
Transactions Act as in effect in any relevant jurisdiction), Borrower shall
promptly notify Agent thereof in writing. Promptly upon Agent's request,
Borrower shall, subject to the Intercreditor Agreement, take, or cause to be
taken, such actions as Agent may request to give Agent control of such
electronic chattel paper under Section 9-105 of the UCC and control of such
transferable record under Section 201 of the Federal Electronic Signatures in
Global and National Commerce Act or, as the case may be, Section 16 of the
Uniform Electronic Transactions Act, as in effect in such jurisdiction.
(d) Borrower does not have any deposit accounts as of the date
hereof, except as set forth in the Information Certificate. Borrower shall not,
directly or indirectly, after the date hereof open, establish or maintain any
deposit account unless each of the following conditions is satisfied: (i) Agent
shall have received not less than five (5) Business Days prior written notice of
the intention of Borrower to open or establish such account which notice shall
specify in reasonable detail and specificity acceptable to Agent the name of the
account, the owner of the account, the name and address of the bank at which
such account is to be opened or established, the individual at such bank with
whom Borrower is dealing and the purpose of the account, (ii) the bank where
such account is opened or maintained shall be acceptable to Agent, and (iii) on
or before the opening of such deposit account, Borrower shall, subject to the
Intercreditor Agreement, as Agent may request either (A) deliver to Agent a
Deposit Account Control Agreement with respect to such deposit account duly
authorized, executed and delivered by Borrower and the bank at which such
deposit account is opened and maintained or (B) arrange for Agent to become the
customer of the bank with respect to the deposit account on terms and conditions
acceptable to Agent. The terms of this subsection (d) shall not apply to deposit
accounts specifically and exclusively used for payroll, payroll taxes and other
employee wage and benefit payments to or for the benefit of Borrower's
employees.
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(e) Borrower does not own or hold, directly or indirectly,
beneficially or as record owner or both, any investment property, as of the date
hereof, or have any investment account, securities account, commodity account or
other similar account with any bank or other financial institution or other
securities intermediary or commodity intermediary as of the date hereof, in each
case except as set forth in the Information Certificate.
(i) In the event that Borrower shall be entitled to or shall at
any time after the date hereof hold or acquire any certificated securities,
Borrower shall, subject to the Intercreditor Agreement, promptly endorse, assign
and deliver the same to Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as Agent may from time to time specify. If any
securities, now or hereafter acquired by Borrower are uncertificated and are
issued to Borrower or its nominee directly by the issuer thereof, Borrower shall
immediately notify Agent thereof and shall, subject to the Intercreditor
Agreement, as Agent may specify, either (A) cause the issuer to agree to comply
with instructions from Agent as to such securities, without further consent of
Borrower or such nominee, or (B) arrange for Agent to become the registered
owner of the securities.
(ii) Borrower shall not, directly or indirectly, after the date
hereof open, establish or maintain any investment account, securities account,
commodity account or any other similar account (other than a deposit account)
with any securities intermediary or commodity intermediary unless each of the
following conditions is satisfied: (A) Agent shall have received not less than
five (5) Business Days prior written notice of the intention of Borrower to open
or establish such account which notice shall specify in reasonable detail and
specificity acceptable to Agent the name of the account, the owner of the
account, the name and address of the securities intermediary or commodity
intermediary at which such account is to be opened or established, the
individual at such intermediary with whom Borrower is dealing and the purpose of
the account, (B) the securities intermediary or commodity intermediary (as the
case may be) where such account is opened or maintained shall be reasonably
acceptable to Agent, and (C) on or before the opening of such investment
account, securities account or other similar account with a securities
intermediary or commodity intermediary, Borrower shall, subject to the
Intercreditor Agreement, as Agent may request either (1) execute and deliver,
and cause to be executed and delivered to Agent, an Investment Property Control
Agreement with respect thereto duly authorized, executed and delivered by
Borrower and such securities intermediary or commodity intermediary or (2)
arrange for Agent to become the entitlement holder with respect to such
investment property on terms and conditions acceptable to Agent.
41
(f) Borrower is not the beneficiary or otherwise entitled to any
right to payment under any letter of credit, banker's acceptance or similar
instrument as of the date hereof, except as set forth in the Information
Certificate. In the event that Borrower shall be entitled to or shall receive
any right to payment under any letter of credit, banker's acceptance or any
similar instrument, whether as beneficiary thereof or otherwise after the date
hereof, Borrower shall promptly notify Agent thereof in writing. Borrower shall,
subject to the Intercreditor Agreement, immediately, as Agent may specify,
either (i) deliver, or cause to be delivered to Agent, with respect to any such
letter of credit, banker's acceptance or similar instrument, the written
agreement of the issuer and any other nominated person obligated to make any
payment in respect thereof (including any confirming or negotiating bank), in
form and substance satisfactory to Agent, consenting to the assignment of the
proceeds of the letter of credit to Agent by Borrower and agreeing to make all
payments thereon directly to Agent or as Agent may otherwise direct or (ii)
cause Agent to become, at Borrower's expense, the transferee beneficiary of the
letter of credit, banker's acceptance or similar instrument (as the case may
be).
(g) Borrower does not have any commercial tort claims as of the
date hereof, except as set forth in the Information Certificate. In the event
that Borrower shall at any time after the date hereof have any commercial tort
claims, Borrower shall promptly notify Agent thereof in writing, which notice
shall (i) set forth in reasonable detail the basis for and nature of such
commercial tort claim and (ii) include the express grant by Borrower to Agent of
a security interest in such commercial tort claim (and the proceeds thereof). In
the event that such notice does not include such grant of a security interest,
the sending thereof by Borrower to Agent shall be deemed to constitute such
grant to Agent. Upon the sending of such notice, any commercial tort claim
described therein shall constitute part of the Collateral and shall be deemed
included therein. Without limiting the authorization of Agent provided in
Section 5.3(a) hereof or otherwise arising by the execution by Borrower of this
Agreement or any of the other Financing Agreements, Agent is hereby irrevocably
authorized from time to time and at any time to file such financing statements
naming Agent or its designee as secured party and Borrower as debtor, or any
amendments to any financing statements, covering any such commercial tort claim
as Collateral. In addition, Borrower shall promptly upon Agent's request,
execute and deliver, or cause to be executed and delivered, to Agent such other
agreements, documents and instruments as Agent may require in connection with
such commercial tort claim.
(h) Borrower does not have any goods, documents of title or other
Collateral in the custody, control or possession of a third party as of the date
hereof, except as set forth in the Information Certificate and except for goods
located in the United States or Canada in transit to a location of Borrower
permitted herein in the ordinary course of business of Borrower in the
possession of the carrier transporting such goods. In the event that any goods,
documents of title or other Collateral are at any time after the date hereof in
the custody, control or possession of any other person not referred to in the
Information Certificate or such carriers, Borrower shall promptly notify Agent
thereof in writing. Promptly upon Agent's request, Borrower shall deliver to
Agent a Collateral Access Agreement duly authorized, executed and delivered by
such person and Borrower.
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(i) Borrower shall take any other actions reasonably requested by
Agent from time to time to cause the attachment, perfection and (subject to
liens permitted hereunder) first priority of, and the ability of Agent to
enforce, the security interest of Agent in any and all of the Collateral,
including, without limitation, (i) executing, delivering and, where appropriate,
filing financing statements and amendments relating thereto under the UCC or
other applicable law, to the extent, if any, that Borrower's signature thereon
is required therefor, (ii) upon Agent's request, causing Agent's name to be
noted as secured party on any certificate of title for a titled good if such
notation is a condition to attachment, perfection or priority of, or ability of
Agent to enforce, the security interest of Agent in such Collateral, (iii)
complying with any provision of any statute, regulation or treaty of the United
States as to any Collateral if compliance with such provision is a condition to
attachment, perfection or priority of, or ability of Agent to enforce, the
security interest of Agent in such Collateral, and (iv) obtaining the consents
and approvals of any Governmental Authority or third party, including, without
limitation, any consent of any licensor, lessor or other person obligated on
Collateral, and taking all actions required by any earlier versions of the UCC
or by other law, as applicable in any relevant jurisdiction.
(j) So long as the Intercreditor Agreement remains in full force
and effect, notwithstanding anything to the contrary set forth in this Section
5.3, any obligations in clauses (b), (c), (f), and (h) of this Section 5.3
regarding the delivery by Borrower of any items shall be deemed satisfied by
Borrower if Borrower delivers such items to the Agent under, and as defined in,
the Congress Loan Agreement in accordance with the terms thereof.
SECTION 6. COLLECTION AND ADMINISTRATION
-----------------------------
6.1 BORROWER LOAN ACCOUNT. Agent shall maintain one or more loan
account(s) on its books in which shall be recorded (a) all Loans and other
Obligations and the Collateral, (b) all payments made by or on behalf of
Borrower and (c) all other appropriate debits and credits as provided in this
Agreement, including fees, charges, costs, expenses and interest. All entries in
the loan account(s) shall be made in accordance with Agent's customary practices
as in effect from time to time.
6.2 STATEMENTS. Agent shall render to Borrower each month a statement
setting forth the balance in the Borrower's loan account(s) maintained by Agent
for Borrower pursuant to the provisions of this Agreement, including principal,
interest, fees, costs and expenses. Each such statement shall be subject to
subsequent adjustment by Agent but shall, absent manifest errors or omissions,
be considered correct and deemed accepted by Borrower and conclusively binding
upon Borrower as an account stated except to the extent that Agent receives a
written notice from Borrower of any specific exceptions of Borrower thereto
within thirty (30) days after the date such statement has been received by
Borrower. Until such time as Agent shall have rendered to Borrower a written
statement as provided above, the balance in Borrower's loan account(s) shall be
presumptive evidence of the amounts due and owing to Agent and Lenders by
Borrower.
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6.3 COLLECTION OF ACCOUNTS.
(a) Borrower shall establish and maintain, at its expense,
blocked accounts or lockboxes and related blocked accounts (in either case,
"Blocked Accounts"), as Agent may specify, with such banks as are reasonably
acceptable to Agent into which Borrower shall promptly deposit and direct its
account debtors to directly remit all payments on Receivables and all payments
constituting proceeds of Inventory or other Collateral in the identical form in
which such payments are made, whether by cash, check or other manner. Promptly
upon Agent's request, Borrower shall, subject to the Intercreditor Agreement,
deliver, or cause to be delivered to Agent, a Deposit Account Control Agreement
duly authorized, executed and delivered by each bank where a Blocked Account is
maintained as provided in Section 5.3 hereof or at any time and from time to
time Agent may become bank's customer with respect to the Blocked Accounts and
shall execute and deliver such agreements or documents as Agent may require in
connection therewith. Borrower agrees that all payments made to such Blocked
Accounts or other funds received and collected by Agent or any Lender, whether
in respect of the Receivables, as proceeds of Inventory or other Collateral or
otherwise shall be treated as payments to Agent and Lenders in respect of the
Obligations and therefore shall constitute the property of Agent and Lenders to
the extent of the then outstanding Obligations, and shall be subject to the
terms and conditions of the Intercreditor Agreement.
(b) For purposes of calculating the amount of the Loans available
to Borrower, such payments will be applied (conditional upon final collection)
to the Obligations on the Business Day of receipt by Agent of immediately
available funds in the Agent Payment Account provided such payments and notice
thereof are received in accordance with Agent's usual and customary practices as
in effect from time to time and within sufficient time to credit Borrower's loan
account on such day, and if not, then on the next Business Day.
(c) Borrower and its Subsidiaries shall, subject to the terms and
conditions contained herein and in the Intercreditor Agreement, acting as
trustee for Agent, receive, as the property of Agent, any monies, checks, notes,
drafts or any other payment relating to and/or proceeds of Accounts or other
Collateral which come into their possession or under their control and
immediately upon receipt thereof, shall deposit or cause the same to be
deposited in the Blocked Accounts, or remit the same or cause the same to be
remitted, in kind, to Agent. In no event shall the same be commingled with
Borrower's own funds. Borrower agrees to reimburse Agent within five (5) days
after demand by Agent for any amounts owed or paid to any bank at which a
Blocked Account or any other deposit account is established or any other bank or
person involved in the transfer of funds to or from the Blocked Accounts arising
out of Agent's payments to or indemnification of such bank or person. The
obligations of Borrower to reimburse Agent for such amounts pursuant to this
Section 6.3 shall survive the termination of this Agreement.
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6.4 PAYMENTS.
(a) All Obligations shall be payable to the Agent Payment Account
as provided in Section 6.3 hereof or such other place as Agent may designate
from time to time. Agent shall apply payments received or collected from
Borrower or any Obligor or for the account of Borrower (including the monetary
proceeds of collections or of realization upon any Collateral) as follows:
FIRST, to pay any fees, indemnities or expense reimbursements then due to Agent
and Lenders from Borrower; SECOND, to pay interest due in respect of any Loans
(and including any Special Agent Advances); THIRD, to pay or prepay principal in
respect of Special Agent Advances; FOURTH, principal due in respect of the
Loans; FIFTH, to pay or prepay any other Obligations whether or not then due, in
such order and manner as Agent determines. Notwithstanding anything to the
contrary contained in this Agreement, (i) unless so directed by Borrower, or
unless a Default or an Event of Default shall exist or have occurred and be
continuing, Agent shall not apply any payments which it receives to any
Eurodollar Rate Loans, except (A) on the expiration date of the Interest Period
applicable to any such Eurodollar Rate Loans or (B) in the event that there are
no outstanding Prime Rate Loans and (ii) to the extent Borrower uses any
proceeds of the Loans to acquire rights in or the use of any Collateral or to
repay any Indebtedness used to acquire rights in or the use of any Collateral,
payments in respect of the Obligations shall be deemed applied first to the
Obligations arising from Loans that were not used for such purposes and second
to the Obligations arising from Loans the proceeds of which were used to acquire
rights in or the use of any Collateral in the chronological order in which
Borrower acquired such rights in or the use of such Collateral.
(b) At Agent's option, all principal, interest, fees, costs,
expenses and other charges provided for in this Agreement or the other Financing
Agreements may be charged directly to the loan account(s) of Borrower maintained
by Agent. Borrower shall make all payments to Agent and Lenders on the
Obligations free and clear of, and without deduction or withholding for or on
account of, any setoff, counterclaim or defense. If after receipt of any payment
of, or proceeds of Collateral applied to the payment of, any of the Obligations,
Agent or any Lender is required to surrender or return such payment or proceeds
to any Person for any reason, then the Obligations intended to be satisfied by
such payment or proceeds shall be reinstated and continue and this Agreement
shall continue in full force and effect as if such payment or proceeds had not
been received by Agent or such Lender. Borrower shall be liable to pay to Agent,
and does hereby indemnify and hold Agent and Lenders harmless for the amount of
any payments or proceeds surrendered or returned. This Section 6.4(b) shall
remain effective notwithstanding any contrary action which may be taken by Agent
or any Lender in reliance upon such payment or proceeds. This Section 6.4 shall
survive the payment of the Obligations and the termination of this Agreement.
(c) [Intentionally Omitted]
(d) [Intentionally Omitted]
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6.5 AUTHORIZATION TO MAKE LOANS. Agent and Lenders are authorized to
make the Loans based upon telephonic or other instructions received from anyone
purporting to be an officer of Borrower or other authorized person or, at the
discretion of Agent, if such Loans are necessary to satisfy any Obligations.
Borrower shall give Agent notice of a proposed borrowing, not later than 11:00
a.m. (New York City time) on the date which is 1 Business Day prior to the date
of the proposed Loan (or such shorter period as Agent is willing to accommodate
from time to time, but in no event later than 11:00 a.m. (New York City time) on
the borrowing date of the proposed Loan). All requests for Loans hereunder shall
specify the date on which the requested advance is to be made (which day shall
be a Business Day) and the amount of the requested Loan. Requests received after
11:00 a.m. New York City time on any day shall be deemed to have been made as of
the opening of business on the immediately following Business Day. Each Loan
shall be made in a minimum amount of $5,000,000 and shall be in integral
multiples of $1,000,000 in excess thereof. All Loans under this Agreement shall
be conclusively presumed to have been made to, and at the request of and for the
benefit of, Borrower or when deposited to the credit of Borrower or otherwise
disbursed or established in accordance with the instructions of Borrower or in
accordance with the terms and conditions of this Agreement.
6.6 USE OF PROCEEDS. Borrower shall use the initial proceeds of the
Loans provided by Agent to Borrower hereunder only for: (a) payments to each of
the persons listed in the disbursement direction letter furnished by Borrower to
Agent on or about the date hereof and (b) costs, expenses and fees in connection
with the preparation, negotiation, execution and delivery of this Agreement and
the other Financing Agreements. All other Loans made to or for the benefit of
Borrower pursuant to the provisions hereof shall be used by Borrower only for
general operating, working capital and other proper corporate purposes of
Borrower not otherwise prohibited by the terms hereof. None of the proceeds will
be used, directly or indirectly, for the purpose of purchasing or carrying any
margin security or for the purposes of reducing or retiring any indebtedness
which was originally incurred to purchase or carry any margin security or for
any other purpose which might cause any of the Loans to be considered a "purpose
credit" within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System, as amended.
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6.7 PRO RATA TREATMENT. Except to the extent otherwise provided in this
Agreement: (a) the making and conversion of Loans shall be made among the
Lenders based on their respective Pro Rata Shares as to the Loans and (b) each
payment on account of any Obligations to or for the account of one or more of
Lenders in respect of any Obligations due on a particular day shall be allocated
among the Lenders entitled to such payments based on their respective Pro Rata
Shares and shall be distributed accordingly.
6.8 SHARING OF PAYMENTS, ETC.
(a) Borrower agrees that, in addition to (and without limitation
of) any right of setoff, banker's lien or counterclaim Agent or any Lender may
otherwise have, each Lender shall be entitled, at its option (but subject, as
among Agent and Lenders, to the provisions of Section 12.3(b) hereof), to offset
balances held by it for the account of Borrower at any of its offices, in
dollars or in any other currency, against any principal of or interest on any
Loans owed to such Lender or any other amount payable to such Lender hereunder,
that is not paid when due (regardless of whether such balances are then due to
Borrower), in which case it shall promptly notify Borrower and Agent thereof;
PROVIDED, THAT, such Lender's failure to give such notice shall not affect the
validity thereof.
(b) If any Lender (including Agent) shall obtain from Borrower
payment of any principal of or interest on any Loan owing to it or payment of
any other amount under this Agreement or any of the other Financing Agreements
through the exercise of any right of setoff, banker's lien or counterclaim or
similar right or otherwise (other than from Agent as provided herein), and, as a
result of such payment, such Lender shall have received more than its Pro Rata
Share of the principal of the Loans or more than its share of such other amounts
then due hereunder or thereunder by Borrower to such Lender than the percentage
thereof received by any other Lender, it shall promptly pay to Agent, for the
benefit of Lenders, the amount of such excess and simultaneously purchase from
such other Lenders a participation in the Loans or such other amounts,
respectively, owing to such other Lenders (or such interest due thereon, as the
case may be) in such amounts, and make such other adjustments from time to time
as shall be equitable, to the end that all Lenders shall share the benefit of
such excess payment (net of any expenses that may be incurred by such Lender in
obtaining or preserving such excess payment) in accordance with their respective
Pro Rata Shares or as otherwise agreed by Lenders. To such end all Lenders shall
make appropriate adjustments among themselves (by the resale of participation
sold or otherwise) if such payment is rescinded or must otherwise be restored.
47
(c) Borrower agrees that any Lender purchasing a participation
(or direct interest) as provided in this Section may exercise, in a manner
consistent with this Section, all rights of setoff, banker's lien, counterclaim
or similar rights with respect to such participation as fully as if such Lender
were a direct holder of Loans or other amounts (as the case may be) owing to
such Lender in the amount of such participation.
(d) Nothing contained herein shall require any Lender to exercise
any right of setoff, banker's lien, counterclaims or similar rights or shall
affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other Indebtedness or obligation
of Borrower. If, under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section applies, such Lender shall, to the extent practicable, assign such
rights to Agent for the benefit of Lenders and, in any event, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of Lenders entitled under this Section to share in the benefits of any recovery
on such secured claim.
6.9 SETTLEMENT PROCEDURES.
(a) In order to administer the Credit Facility in an efficient
manner and to minimize the transfer of funds between Agent and Lenders, Agent
may, at its option, subject to the terms of this Section, make available, on
behalf of Lenders, the full amount of the Loans requested or charged to
Borrower's loan account(s) or otherwise to be advanced by Lenders pursuant to
the terms hereof, without requirement of prior notice to Lenders of the proposed
Loans.
(b) With respect to all Loans made by Agent on behalf of Lenders
as provided in this Section, the amount of each Lender's Pro Rata Share of the
outstanding Loans shall be computed weekly, and shall be adjusted upward or
downward on the basis of the amount of the outstanding Loans as of 5:00 p.m. New
York City time on the Business Day immediately preceding the date of each
settlement computation; PROVIDED, THAT, Agent retains the absolute right at any
time or from time to time to make the above described adjustments at intervals
more frequent than weekly, but in no event more than twice in any week. Agent
shall deliver to each of the Lenders after the end of each week, or at such
lesser period or periods as Agent shall determine, a summary statement of the
amount of outstanding Loans for such period (such week or lesser period or
periods being hereinafter referred to as a "Settlement Period"). If the summary
48
statement is sent by Agent and received by a Lender prior to 12:00 p.m. New York
City time, then such Lender shall make the settlement transfer described in this
Section by no later than 3:00 p.m. New York City time on the same Business Day
and if received by a Lender after 12:00 p.m. New York City time, then such
Lender shall make the settlement transfer by not later than 3:00 p.m. New York
City time on the next Business Day following the date of receipt. If, as of the
end of any Settlement Period, the amount of a Lender's Pro Rata Share of the
outstanding Loans is more than such Lender's Pro Rata Share of the outstanding
Loans as of the end of the previous Settlement Period, then such Lender shall
forthwith (but in no event later than the time set forth in the preceding
sentence) transfer to Agent by wire transfer in immediately available funds the
amount of the increase. Alternatively, if the amount of a Lender's Pro Rata
Share of the outstanding Loans in any Settlement Period is less than the amount
of such Lender's Pro Rata Share of the outstanding Loans for the previous
Settlement Period, Agent shall forthwith transfer to such Lender by wire
transfer in immediately available funds the amount of the decrease. The
obligation of each of the Lenders to transfer such funds and effect such
settlement shall be irrevocable and unconditional and without recourse to or
warranty by Agent. Agent and each Lender agrees to xxxx its books and records at
the end of each Settlement Period to show at all times the dollar amount of its
Pro Rata Share of the outstanding Loans. Each Lender shall only be entitled to
receive interest on its Pro Rata Share of the Loans to the extent such Loans
have been funded by such Lender and interest shall accrue to the date Lender
actually receives payment of such Loans. Because the Agent on behalf of Lenders
may be advancing and/or may be repaid Loans prior to the time when Lenders will
actually advance and/or be repaid such Loans, interest with respect to Loans
shall be allocated by Agent in accordance with the amount of Loans actually
advanced by and repaid to each Lender and the Agent and shall accrue from and
including the date such Loans are so advanced to but excluding the date such
Loans are either repaid by Borrower or actually settled with the applicable
Lender as described in this Section.
(c) To the extent that Agent has made any such amounts available
and the settlement described above shall not yet have occurred, upon repayment
of any Loans by Borrower, Agent may apply such amounts repaid directly to any
amounts made available by Agent pursuant to this Section. In lieu of weekly or
more frequent settlements, Agent may, at its option, at any time require each
Lender to provide Agent with immediately available funds representing its Pro
Rata Share of each Loan, prior to Agent's disbursement of such Loan to Borrower.
In such event, all Loans under this Agreement shall be made by the Lenders
simultaneously and proportionately to their Pro Rata Shares. No Lender shall be
responsible for any default by any other Lender in the other Lender's obligation
to make a Loan requested hereunder nor shall the Commitment of any Lender be
increased or decreased as a result of the default by any other Lender in the
other Lender's obligation to make a Loan hereunder.
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(d) If Agent is not funding a particular Loan to Borrower
pursuant to this Section on any day, Agent may assume that each Lender will make
available to Agent such Lender's Pro Rata Share of the Loan requested or
otherwise made on such day and Agent may, in its discretion, but shall not be
obligated to, cause a corresponding amount to be made available to or for the
benefit of Borrower on such day. If Agent makes such corresponding amount
available to Borrower and such corresponding amount is not in fact made
available to Agent by such Lender, Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon
for each day from the date such payment was due until the date such amount is
paid to Agent at the Federal Funds Rate for each day during such period (as
published by the Federal Reserve Bank of New York or at Agent's option based on
the arithmetic mean determined by Agent of the rates for the last transaction in
overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on that
day by each of the three leading brokers of Federal funds transactions in New
York City selected by Agent) and if such amounts are not paid within three (3)
days of Agent's demand, at the highest Interest Rate provided for in Section 3.1
hereof applicable to Prime Rate Loans. During the period in which such Lender
has not paid such corresponding amount to Agent, notwithstanding anything to the
contrary contained in this Agreement or any of the other Financing Agreements,
the amount so advanced by Agent to or for the benefit of Borrower shall, for all
purposes hereof, be a Loan made by Agent for its own account. Upon any such
failure by a Lender to pay Agent, Agent shall promptly thereafter notify
Borrower of such failure and Borrower shall pay such corresponding amount to
Agent for its own account within five (5) Business Days of Borrower's receipt of
such notice. A Lender who fails to pay Agent its Pro Rata Share of any Loans
made available by the Agent on such Lender's behalf, or any Lender who fails to
pay any other amount owing by it to Agent, is a "Defaulting Lender". Agent shall
not be obligated to transfer to a Defaulting Lender any payments received by
Agent for the Defaulting Lender's benefit, nor shall a Defaulting Lender be
entitled to the sharing of any payments hereunder (including any principal,
interest or fees). Amounts payable to a Defaulting Lender shall instead be paid
to or retained by Agent. Agent may hold and, in its discretion, relend to
Borrower the amount of all such payments received or retained by it for the
account of such Defaulting Lender. For purposes of voting or consenting to
matters with respect to this Agreement and the other Financing Agreements and
determining Pro Rata Shares, such Defaulting Lender shall be deemed not to be a
"Lender" and such Lender's Commitment shall be deemed to be zero (0). This
Section shall remain effective with respect to a Defaulting Lender until such
default is cured. The operation of this Section shall not be construed to
increase or otherwise affect the Commitment of any Lender, or relieve or excuse
the performance by Borrower or any Obligor of their duties and obligations
hereunder.
(e) Nothing in this Section or elsewhere in this Agreement or the
other Financing Agreements shall be deemed to require Agent to advance funds on
behalf of any Lender or to relieve any Lender from its obligation to fulfill its
Commitment hereunder or to prejudice any rights that Borrower may have against
any Lender as a result of any default by any Lender hereunder in fulfilling its
Commitment.
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6.10 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS. The
obligation of each Lender hereunder is several, and no Lender shall be
responsible for the obligation or commitment of any other Lender hereunder.
Nothing contained in this Agreement or any of the other Financing Agreements and
no action taken by the Lenders pursuant hereto or thereto shall be deemed to
constitute the Lenders to be a partnership, an association, a joint venture or
any other kind of entity. The amounts payable at any time hereunder to each
Lender shall be a separate and independent debt, and subject to Section 12.3
hereof, each Lender shall be entitled to protect and enforce its rights arising
out of this Agreement and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.
6.11 TAXES.
(a) Any and all payments by Borrower hereunder shall be made free
and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, fees, charges, restrictions or withholdings, and
all liabilities with respect thereto (other than Excluded Taxes) (all such
nonexcluded taxes, levies, imposts, deductions, fees, charges, restrictions,
withholdings and liabilities, collectively or individually, "Taxes"). If
Borrower shall be required to deduct any Taxes from or in respect of any sum
payable hereunder to Agent or any Lender, (i) the sum payable shall be increased
by the amount (an "additional amount") necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 6.11) Agent or such Lender shall receive an amount equal to
the sum it would have received had no such deductions been made, (ii) Borrower
shall make such deductions and (iii) Borrower shall pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law.
(b) In addition, Borrower agrees to pay to the relevant
Governmental Authority in accordance with applicable law any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement
("Other Taxes"). Borrower shall deliver to Agent and each Lender official
receipts, if any, in respect of any Taxes or Other Taxes payable hereunder
promptly after payment of such Taxes or Other Taxes or other evidence of payment
reasonably acceptable to Agent and such Lender.
(c) Borrower and each Obligor hereby jointly and severally
indemnify and agree to hold Agent and each Lender harmless from and against
Taxes and Other Taxes (including, without limitation, Taxes and Other Taxes
imposed on any amounts payable under this Section 6.11) paid by such Person,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Such indemnification shall be paid within ten (10) days from the date on which
any such Person makes written demand therefor specifying in reasonable detail
the nature and amount of such Taxes or Other Taxes.
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(d) If Agent or any Lender receives a refund in respect of any
taxes for which Agent or any Lender has received payment from Borrower
hereunder, so long as no Event of Default shall exist or have occurred and be
continuing, Agent or such Lender (as the case may be) shall credit to the loan
account of the Borrower the amount of such refund plus any interest received
(but only to the extent of payments made, or additional amounts paid, by or on
behalf of Borrower under this Section 6.11 with respect to the taxes giving rise
to such refund).
(e) Each Lender that is organized under the laws of a jurisdiction
outside the United States (a "Non-U.S. Lender") agrees that it shall, on or
prior to the date hereof (or, in the case of a Lender which becomes a party
hereto pursuant to Section 13.7 hereof after the date hereof, promptly after the
date upon which such Lender becomes a party hereto) deliver to Agent (or, in the
case of a Related Party Assignment, to the assigning Lender only) two properly
completed and duly executed copies of either U.S. Internal Revenue Service Form
X-0XXX, X-0XXX or W-8IMY or any subsequent versions thereof or successors
thereto, in each case claiming complete exemption from, or reduced rate of, U.S.
Federal withholding tax and payments of interest hereunder. In addition, in the
case of a Non-U.S. Lender claiming exemption from U.S. Federal withholding tax
under Section 871(h) or 881(c) of the Code, such Non-U.S. Lender hereby
represents to Agent and the Borrower that such Non-U.S. Lender is not a bank for
purposes of Section 881(c) of the Internal Revenue Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Internal Revenue
Code) of Borrower and is not a controlled foreign corporation related to
Borrower (within the meaning of Section 864(d)(4) of the Code), and such
Non-U.S. Lender agrees that it shall promptly notify Agent in the event any such
representation is no longer accurate. Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this Agreement and
on or before the date, if any, such Non-U.S. Lender changes its applicable
lending office by designating a different lending office (a "New Lending
Office"). In addition, each Non-U.S. Lender shall deliver such forms within 20
days after receipt of a written request therefor from Agent or the assigning
Lender, as applicable. Notwithstanding any other provision of this Section 6.11,
a Non-U.S. Lender shall not be required to deliver any form pursuant to this
Section 6.11 that such Non-U.S. Lender is not legally able to deliver.
(f) Borrower shall not be required to indemnify any Non-U.S.
Lender, or pay any additional amounts to any Non-U.S. Lender, in respect of
United States Federal withholding tax pursuant to this Agreement to the extent
that (i) the obligation to withhold amounts with respect to United States
Federal withholding tax existed on the date such Non-U.S. Lender became a party
to this Agreement or, with respect to payments to a New Lending Office, the date
such Non-U.S. Lender designated such New Lending Office with respect to a Loan;
PROVIDED, HOWEVER, that this clause (i) shall not apply to the extent the
indemnity payment or additional amounts any transferee or assignee of any
Lender, or any Lender through a New Lending Office, would be entitled to receive
(without regard to this clause (i)) do not exceed the indemnity payment or
additional amounts that the person making the assignment or transfer to such
transferee or assignee, or Lender making the designation of such New Lending
Office, would have been entitled to receive in the absence of such assignment,
transfer or designation, or (ii) the obligation to pay such additional amounts
would not have arisen but for a failure by such Non-U.S. Lender to comply with
the provisions of clause (e) above.
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(g) Any Lender claiming any indemnity payment or additional payment
amounts payable pursuant to this Section 6.11 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate or
document reasonably requested in writing by Borrower or to change the
jurisdiction of its applicable lending office if the making of such a filing or
change would avoid the need for or reduce the amount of any such indemnity
payment or additional amount which may thereafter accrue, would not require such
Lender to disclose any information such Lender deems confidential and would not,
in the sole determination of such Lender be otherwise disadvantageous to such
Lender.
The obligations of Borrower under this Section 6.11 shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
SECTION 7. COLLATERAL REPORTING AND COVENANTS
----------------------------------
7.1 COLLATERAL REPORTING.
(a) Upon Agent's request, Borrower shall promptly provide Agent
with the following documents in a form satisfactory to Agent:
(i) on a daily basis with a schedule of Accounts, collections
received and credits issued;
(ii) on a weekly roll forward basis, inventory reports with
respect to finished bottles;
(iii) as soon as possible after the end of each month (but
in any event within fifteen (15) Business Days after the end thereof), on a
monthly basis or more frequently as Agent may request, (A) perpetual inventory
reports, (B) inventory reports by location and category (and including the
amounts of Inventory and the value thereof at any leased locations and at
premises of warehouses, processors or other third parties), (C) agings of
accounts receivable (together with a reconciliation to the previous month's
aging and general ledger) and (D) agings of accounts payable (and including
information indicating the amounts owing to owners and lessors of leased
premises, warehouses, processors and other third parties from time to time in
possession of any Collateral);
(iv) (A) copies of customer statements and credit memos,
remittance advices and reports, and copies of deposit slips and bank statements,
(B) copies of shipping and delivery documents, and (C) copies of purchase
orders, invoices and delivery documents for Inventory and Equipment acquired by
Borrower;
(v) such other reports as to the Collateral as Agent shall
reasonably request from time to time.
53
(b) If any of Borrower's records or reports of the Collateral are
prepared or maintained by an accounting service, contractor, shipper or other
agent, Borrower hereby irrevocably authorizes such service, contractor, shipper
or agent to deliver such records, reports and related documents to Agent and to
follow Agent's instructions with respect to further services at any time that an
Event of Default exists or has occurred and is continuing.
7.2 Borrower shall provide Agent a copy of the Borrowing Base Certificate
delivered pursuant to, and as defined in, the Congress Loan Agreement at the
same time that such Borrowing Base Certificate is delivered to Congress.
7.3 [Intentionally Omitted]
7.4 EQUIPMENT COVENANTS. With respect to the Equipment, except where
the failure to do so would not result or could not reasonably be expected to
result in a Material Adverse Effect: (a) Borrower shall keep the Equipment in
good order, repair, running and marketable condition (ordinary wear and tear
excepted); (b) Borrower shall use the Equipment with all reasonable care and
caution and in accordance with applicable standards of any insurance and in
conformity with all applicable laws; and (c) Borrower assumes all responsibility
and liability arising from the use of the Equipment.
7.5 POWER OF ATTORNEY. Borrower hereby irrevocably designates and
appoints Agent (and all persons designated by Agent) as Borrower's true and
lawful attorney-in-fact, and authorizes Agent, in Borrower's, or Agent's name,
to (subject to the Intercreditor Agreement to the extent applicable): (a) at any
time an Event of Default exists or has occurred and is continuing (i) demand
payment on Receivables or other Collateral, (ii) enforce payment of Receivables
by legal proceedings or otherwise, (iii) exercise all of Borrower's rights and
remedies to collect any Receivable or other Collateral, (iv) sell or assign any
Receivable upon such terms, for such amount and at such time or times as the
Agent deems advisable, (v) settle, adjust, compromise, extend or renew an
Account, (vi) discharge and release any Receivable, (vii) prepare, file and sign
Borrower's name on any proof of claim in bankruptcy or other similar document
against an account debtor or other obligor in respect of any Receivables or
other Collateral, (viii) notify the post office authorities to change the
address for delivery of remittances from account debtors or other obligors in
respect of Receivables or other proceeds of Collateral to an address designated
by Agent, and open and dispose of all mail addressed to Borrower and handle and
store all mail relating to the Collateral; and (ix) do all acts and things which
are necessary, in Agent's determination, to fulfill Borrower's obligations under
this Agreement and the other Financing Agreements, (b) upon the occurrence and
during the continuance of a Default or Event of Default (i) take control in any
manner of any item of payment in respect of Receivables or constituting
Collateral or otherwise received in or for deposit in the Blocked Accounts or
otherwise received by Agent or any Lender, (ii) have access to any lockbox or
postal box into which remittances from account debtors or other obligors in
respect of Receivables or other proceeds of Collateral are sent or received,
54
(iii) endorse Borrower's name upon any items of payment in respect of
Receivables or constituting Collateral or otherwise received by Agent and any
Lender and deposit the same in Agent's account for application to the
Obligations, (iv) endorse Borrower's name upon any chattel paper, document,
instrument, invoice, or similar document or agreement relating to any Receivable
or any goods pertaining thereto or any other Collateral, including any warehouse
or other receipts, or bills of lading and other negotiable or non-negotiable
documents, and (c) at any time sign Borrower's name on any verification of
Receivables and notices thereof to account debtors or any secondary obligors or
other obligors in respect thereof. Borrower hereby releases Agent and Lenders
and their respective officers, employees and designees from any liabilities
arising from any act or acts under this power of attorney and in furtherance
thereof, whether of omission or commission, except as a result of Agent's or any
Lender's own gross negligence or wilful misconduct as determined pursuant to a
final non-appealable order of a court of competent jurisdiction.
7.6 RIGHT TO CURE. Agent may, at its option, upon prior notice to
Borrower, (a) cure any default by Borrower under any material agreement with a
third party that affects the Collateral, its value or the ability of Agent to
collect, sell or otherwise dispose of the Collateral or the rights and remedies
of Agent or any Lender therein or the ability of Borrower or any Obligor to
perform its obligations hereunder or under any of the other Financing
Agreements, at any time a Default or Event of Default exists or has occurred and
is continuing, or if after giving effect to any reserve imposed under the
Congress Loan Agreement, the aggregate amount of the Congress Excess
Availability is less than $5,000,000, (b) pay or bond on appeal any judgment
entered against Borrower, at any time a Default or Event of Default exists or
has occurred and is continuing, or if after giving effect to any reserve imposed
under the Congress Loan Agreement, the aggregate amount of the Congress Excess
Availability is less than $5,000,000, (c) discharge taxes, liens, security
interests or other encumbrances at any time levied on or existing with respect
to the Collateral; PROVIDED, THAT, Agent shall not exercise its right pursuant
to this Section 7.6(c) to discharge such taxes, liens, security interest or
other encumbrances that are permitted under Section 9.8 hereof, unless either
(i) a Default or Event of Default shall exist or have occurred and be
continuing, or (ii) with respect to liens, security interests or other
encumbrances, the beneficiary or holder of such lien, security interest or other
encumbrance has the right to take action against or with respect to the
Collateral which right is not subject to an effective stay pursuant to
applicable law, and (d) pay any amount, incur any expense or perform any act
which, in Agent's good faith judgment, is necessary or appropriate to preserve,
protect, insure or maintain the Collateral and the rights of Agent and Lenders
with respect thereto. Agent may add any amounts so expended to the Obligations
and charge Borrower's account therefor, such amounts to be repayable by Borrower
on demand. Agent and Lenders shall be under no obligation to effect such cure,
payment or bonding and shall not, by doing so, be deemed to have assumed any
obligation or liability of Borrower or any Obligor. Any payment made or other
action taken by Agent or any Lender under this Section shall be without
prejudice to any right to assert an Event of Default hereunder and to proceed
accordingly.
7.7 ACCESS TO PREMISES. From time to time as requested by Agent, at the
cost and expense of Borrower, (a) Agent or its designee shall have complete
access to all of Borrower premises during normal business hours after not less
than two (2) Business Days prior notice to Borrower, or at any time and without
notice to Borrower if an Event of Default exists or has occurred and is
continuing, for the purposes of inspecting, verifying and auditing the
Collateral and all of Borrower's books and records, including the Records that
55
relate to the Collateral, and (b) Borrower shall promptly furnish to Agent and
each Lender such copies of such books and records or extracts therefrom as Agent
may request, and (c) Agent or any Lender or Agent's designee may use during
normal business hours such of Borrower's personnel, equipment, supplies and
premises as may be reasonably necessary for the foregoing and if an Event of
Default exists or has occurred and is continuing for the collection of
Receivables and realization of other Collateral that relate to the Collateral.
SECTION 8. REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower hereby represents and warrants to Agent and Lenders the
following (which shall survive the execution and delivery of this Agreement),
the truth and accuracy of which are a continuing condition of the making of
Loans to Borrower:
8.1 CORPORATE EXISTENCE, POWER AND AUTHORITY. Borrower and any
Subsidiary of Borrower is a corporation duly organized and in good standing
under the laws of its state of incorporation and is duly qualified as a foreign
corporation and in good standing in all states or other jurisdictions where the
nature and extent of the business transacted by it or the ownership of assets
makes such qualification necessary, except for those jurisdictions in which the
failure to so qualify would not have a material adverse effect on Borrower's or
such Subsidiary's financial condition, results of operation or business or the
rights of Agent in or to any of the Collateral. The execution, delivery and
performance of this Agreement, the other Financing Agreements and the
transactions contemplated hereunder and thereunder (a) are all within Borrower's
corporate powers, (b) have been duly authorized, (c) are not in contravention of
law or the terms of Borrower's certificate of incorporation, by-laws, or other
organizational documentation, or any indenture, agreement or undertaking to
which Borrower is a party or by which Borrower or its property are bound and (d)
will not result in the creation or imposition of, or require or give rise to any
obligation to grant, any lien, security interest, charge or other encumbrance
upon any property of Borrower except pursuant to the Financing Agreements. This
Agreement and the other Financing Agreements to which Borrower is a party
constitute legal, valid and binding obligations of Borrower enforceable in
accordance with their respective terms.
8.2 NAME; STATE OF ORGANIZATION; CHIEF EXECUTIVE OFFICE; COLLATERAL
LOCATIONS.
(a) The exact legal name of Borrower is as set forth on the
signature page of this Agreement and in the Information Certificate. 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 or assets out of the ordinary course of business, except as set
forth in the Information Certificate.
56
(b) Borrower is an organization of the type and organized in the
jurisdiction set forth in the Information Certificate. The Information
Certificate accurately sets forth the organizational identification number of
Borrower or accurately states that Borrower has none and accurately sets forth
the federal employer identification number of Borrower.
(c) The chief executive office and mailing address of Borrower and
Borrower's Records concerning Accounts are located only at the address
identified as such in Schedule 8.2 to the Information Certificate and its only
other places of business and the only other locations of Collateral, if any, are
the addresses set forth in Schedule 8.2 to the Information Certificate, subject
to the rights of Borrower to establish new locations in accordance with Section
9.2 below. The Information Certificate correctly identifies any of such
locations which are not owned by Borrower and sets forth the owners and/or
operators thereof.
8.3 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE. All financial
statements relating to Borrower and each Subsidiary of Borrower which have been
or may hereafter be delivered by Borrower or such Subsidiary to Agent and
Lenders have been prepared in accordance with GAAP (except as to any interim
financial statements, to the extent such statements are subject to normal
year-end adjustments and do not include any notes) and fairly present in all
material respects the financial condition and the results of operation of
Borrower or such Subsidiary as at the dates and for the periods set forth
therein. Except as disclosed by Borrower to Agent prior to the date of this
Agreement, there has been no act, condition or event which has had or is
reasonably likely to have a Material Adverse Effect since the date of the most
recent audited financial statements of Borrower furnished by Borrower to Agent
prior to the date of this Agreement, except any such act, condition or event
which has been disclosed by Borrower hereunder and as to which any Default or
Event of Default resulting therefrom has been waived by the requisite Lenders or
Agent.
8.4 PRIORITY OF LIENS; TITLE TO PROPERTIES. The security interests and
liens granted to Agent under this Agreement and the other Financing Agreements
constitute valid and perfected first priority liens and security interests in
and upon the Collateral subject only to the liens indicated on Schedule 8.4 to
the Information Certificate and the other liens permitted under Section 9.8
hereof. Borrower and each Subsidiary of Borrower has good, valid and
57
merchantable title to all of its other properties and assets subject to no
liens, mortgages, pledges, security interests, encumbrances or charges of any
kind, except those granted to Agent and such others as are specifically listed
on Schedule 8.4 to the Information Certificate or permitted under Section 9.8
hereof.
8.5 TAX RETURNS. Borrower and each Subsidiary of Borrower has filed, or
caused to be filed all tax returns (including extensions), reports and
declarations which are required to be filed by it in accordance with applicable
law. All information in such tax returns, reports and declarations is complete
and accurate in all material respects. Borrower and each Subsidiary of Borrower
has paid or caused to be paid all taxes due and payable or claimed due and
payable in any assessment received by it, except taxes the validity of which are
being contested in good faith by appropriate proceedings diligently pursued and
available to Borrower or such Subsidiary and with respect to which adequate
reserves have been set aside on its books. Adequate provision has been made for
the payment of all material accrued and unpaid federal, state, county, local,
foreign and other taxes whether or not yet due and payable and whether or not
disputed.
8.6 LITIGATION. Except as set forth on Schedule 8.6 to the Information
Certificate, (a) there is no investigation by any Governmental Authority
pending, or to the best of Borrower's knowledge threatened, against or affecting
Borrower, its Subsidiaries or their assets or business and (b) there is no
action, suit, proceeding or claim by any Person pending, or to the best of
Borrower's knowledge threatened, against Borrower, its Subsidiaries or their
assets or business, or against or affecting any transactions contemplated by
this Agreement, in each case under clause (a) or (b) of this Section 8.6, which
if adversely determined against Borrower or its Subsidiaries has or could
reasonably be expected to have a Material Adverse Effect.
8.7 COMPLIANCE WITH OTHER AGREEMENTS AND APPLICABLE LAWS.
(a) Borrower or any of its Subsidiaries is not in default in any
respect under, or in violation in any respect of the terms of, any material
agreement, contract, instrument, lease or other commitment to which it is a
party or by which it or any of its assets are bound where such default or
violation has or could reasonably be expected to have a Material Adverse Effect.
Borrower or any of its Subsidiaries is in compliance with the requirements of
all applicable laws, rules, regulations and orders of any Governmental Authority
relating to its business, including, without limitation, those set forth in or
promulgated pursuant to the Occupational Safety and Health Act of 1970, as
amended, the Fair Labor Standards Act of 1938, as amended, ERISA, the Code, as
amended, and the rules and regulations thereunder, and all Environmental Laws
where the failure to so comply has or could reasonably be expected to have a
Material Adverse Effect.
(b) Borrower or any of its Subsidiaries has obtained all material
permits, licenses, approvals, consents, certificates, orders or authorizations
of any Governmental Authority required for the lawful conduct of its business
(the "Permits"). All of the Permits are valid and subsisting and in full force
and effect. There are no actions, claims or proceedings pending or to the best
of Borrower's knowledge, threatened that seek the revocation, cancellation,
suspension or modification of any of the Permits which has or could reasonably
be expected to have a Material Adverse Effect.
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8.8 ENVIRONMENTAL COMPLIANCE.
(a) Except as set forth on Schedule 8.8 to the Information
Certificate, to the best of Borrower's knowledge, Borrower and any Subsidiary of
Borrower have not generated, used, stored, treated, transported, handled or
disposed of any Hazardous Materials, on or off its premises (whether or not
owned by it) in any manner which at any time violates in any material respect
any applicable Environmental Law or Permit, and the operations of Borrower and
any Subsidiary of Borrower complies in all material respects with all
Environmental Laws and all Permits.
(b) Except as set forth on Schedule 8.8 to the Information
Certificate, there has been no investigation by any Governmental Authority or
any proceeding, complaint, order, directive, claim, citation or notice by any
Governmental Authority or any other person nor is any pending or to the best of
Borrower's knowledge threatened, with respect to any material violation of the
requirements of any Environmental Law by Borrower and any Subsidiary of Borrower
or the release, spill or discharge, threatened or actual, of any Hazardous
Material in material violation of Environmental Law or the generation, use,
storage, treatment, transportation, handling or disposal of any Hazardous
Materials or any other environmental, health or safety matter, which adversely
affects or could reasonably be expected to adversely affect in any material
respect Borrower or its or their business, operations or assets or any
properties at which Borrower has transported, stored or disposed of any
Hazardous Materials.
(c) Except as set forth on Schedule 8.8 to the Information
Certificate, to the best of Borrower's knowledge, Borrower and its Subsidiaries
have no material liability (contingent or otherwise) in connection with a
release, spill or discharge, threatened or actual, of any Hazardous Materials in
violation of Environmental Law or the generation, use, storage, treatment,
transportation, handling or disposal of any Hazardous Materials in violation of
Environmental Law.
(d) Borrower and its Subsidiaries have all Permits required to be
obtained or filed in connection with the operations of Borrower under any
Environmental Law and all of such Permits are valid and in full force and effect
where the failure to obtain or maintain any Permits has or could reasonably be
expected to have a Material Adverse Effect.
8.9 EMPLOYEE BENEFITS.
(a) Except as set forth on Schedule 8.9 hereto, each Benefit Plan
is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other Federal or State law. Each Benefit Plan which is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service and to the best of
Borrower's knowledge, nothing has occurred which would cause the loss of such
qualification. Borrower and its ERISA Affiliates have made all required
contributions to any Benefit 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 Benefit
Plan.
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(b) Except as set forth on Schedule 8.9 hereto, there are no
pending, or to the best of Borrower's knowledge, threatened claims, actions or
lawsuits, or action by any Governmental Authority, with respect to any Benefit
Plan. There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Benefit Plan.
(c) (i) Except as set forth on Schedule 8.9 hereto, no ERISA Event
has occurred or is reasonably expected to occur; (ii) the current value of each
Benefit Plan's assets (determined in accordance with the assumptions used for
funding such Benefit Plan pursuant to Section 412 of the Code) are not less than
such Benefit Plan's liabilities under Section 4001(a)(16) of ERISA; (iii)
Borrower and its ERISA Affiliates, have not incurred and do not reasonably
expect to incur, any liability under Title IV of ERISA with respect to any
Benefit Plan (other than premiums due and not delinquent under Section 4007 of
ERISA); (iv) Borrower and its ERISA Affiliates, have not incurred and do not
reasonably expect 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 Multiemployer
Plan; and (v) Borrower and its ERISA Affiliates, have not engaged in a
transaction that would be subject to Section 4069 or 4212(c) of ERISA.
8.10 BANK ACCOUNTS. All of the deposit accounts, investment accounts or
other accounts in the name of or used by Borrower or any Subsidiary of Borrower
maintained at any bank or other financial institution are set forth on Schedule
8.10 to the Information Certificate, subject to the right of Borrower and such
Subsidiaries to establish new accounts in accordance with Section 5.2 hereof.
8.11 INTELLECTUAL PROPERTY. Borrower and its Subsidiaries owns or
licenses or otherwise have the right to use all Intellectual Property necessary
for the operation of its business as presently conducted or proposed to be
conducted. As of the date hereof, Borrower and its Subsidiaries do not have any
Intellectual Property registered, or subject to pending applications, in the
United States Patent and Trademark Office or any similar office or agency in the
United States, any State thereof, any political subdivision thereof or in any
other country, other than those described in Schedule 8.11 to the Information
Certificate and has not granted any licenses with respect thereto other than as
set forth in Schedule 8.11 to the Information Certificate. No event has occurred
which permits or would permit after notice or passage of time or both, the
revocation, suspension or termination of such rights. To the best of Borrower's
knowledge, no slogan or other advertising device, product, process, method,
substance or other Intellectual Property or goods bearing or using any
Intellectual Property presently contemplated to be sold by or employed by
Borrower or any of its Subsidiaries infringes any patent, trademark,
servicemark, tradename, copyright, license or other Intellectual Property owned
by any other Person presently and no claim or litigation is pending or
threatened against or affecting Borrower or any of its Subsidiaries contesting
its right to sell or use any such Intellectual Property which if adversely
determined would have or could reasonably be expected to have a Material Adverse
Effect. Schedule 8.11 to the Information Certificate sets forth all of the
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material agreements of Borrower and its Subsidiaries pursuant to which Borrower
or any of its Subsidiaries has a license or other right to use any trademarks,
logos, designs, representations or other Intellectual Property owned by another
person as in effect on the date hereof and the dates of the expiration of such
agreements of Borrower and its Subsidiaries as in effect on the date hereof
(collectively, together with such agreements or other arrangements as may be
entered into by Borrower after the date hereof, collectively, the "License
Agreements" and individually, a "License Agreement").
8.12 SUBSIDIARIES; AFFILIATES; CAPITALIZATION; SOLVENCY.
(a) As of the date hereof, Borrower does not have any direct or
indirect Subsidiaries and is not engaged in any joint venture or partnership.
(b) On the date hereof, the issued and outstanding shares of
Capital Stock of Borrower are directly and beneficially owned and held by the
persons indicated in the Information Certificate, and in each case all of such
shares have been duly authorized and are fully paid and non-assessable, free and
clear of all claims, liens, pledges and encumbrances of any kind, except set
forth in Schedule 8.12 hereto.
(c) After giving effect to the transactions contemplated hereby,
Borrower is Solvent and will continue to be Solvent after the creation of the
Obligations, the security interests of Agent and the other transaction
contemplated hereunder.
8.13 LABOR DISPUTES.
(a) Set forth on Schedule 8.13 to the Information Certificate is a
list (including dates of termination) of all collective bargaining or similar
agreements between or applicable to Borrower or any Subsidiary of Borrower and
any union, labor organization or other bargaining agent in respect of the
employees of Borrower or any Subsidiary of Borrower on the date hereof.
(b) There is (i) no significant unfair labor practice complaint
pending against Borrower or, to the best of Borrower's knowledge, threatened
against it, before the National Labor Relations Board, and no significant
grievance or significant arbitration proceeding arising out of or under any
collective bargaining agreement is pending on the date hereof against Borrower
or any Subsidiary of Borrower or, to best of Borrower's knowledge, threatened
against it, and (ii) no significant strike, labor dispute, slowdown or stoppage
is pending against Borrower or any Subsidiary of Borrower or, to the best of
Borrower's knowledge, threatened against Borrower or any Subsidiary of Borrower.
8.14 RESTRICTIONS ON SUBSIDIARIES. Except for restrictions contained in
this Agreement or any other agreement with respect to Indebtedness of Borrower
or any of its Subsidiaries permitted hereunder as in effect on the date hereof,
there are no contractual or consensual restrictions on Borrower or any of its
Subsidiaries which prohibit or otherwise restrict (a) the transfer of cash or
other assets (i) between Borrower and any of its Subsidiaries or (ii) between
any Subsidiaries of Borrower or (b) the ability of Borrower or any of its
Subsidiaries to incur Indebtedness or grant security interests to Agent or any
Lender in the Collateral.
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8.15 MATERIAL CONTRACTS. Schedule 8.15 to the Information Certificate
sets forth all Material Contracts to which Borrower or any Subsidiary of
Borrower is a party or is bound as of the date hereof. Borrower has delivered
true, correct and complete copies of such Material Contracts to Agent on or
before the date hereof. Borrower and any Subsidiary of Borrower is not in breach
or in default in any material respect of or under any Material Contract and have
not received any notice of the intention of any other party thereto to terminate
any Material Contract.
8.16 PAYABLE PRACTICES. Borrower or any Subsidiary of Borrower has not
made any material change in the historical accounts payable practices from those
in effect immediately prior to the date hereof.
8.17 [Intentionally Omitted]
8.18 ACCURACY AND COMPLETENESS OF INFORMATION. All information
furnished by or on behalf of Borrower or any Subsidiary of Borrower in writing
to Agent or any Lender in connection with this Agreement or any of the other
Financing Agreements or any transaction contemplated hereby or thereby,
including all information on the Information Certificate is true and correct in
all material respects on the date as of which such information is dated or
certified and does not omit any material fact necessary in order to make such
information not misleading. Since September 30, 2004, no event or circumstance
has occurred which has had or could reasonably be expected to have a Material
Adverse Affect, which has not been fully and accurately disclosed to Agent in
writing prior to the date hereof.
8.19 SURVIVAL OF WARRANTIES; CUMULATIVE. All representations and
warranties contained in this Agreement or any of the other Financing Agreements
shall survive the execution and delivery of this Agreement and shall be deemed
to have been made again to Agent and Lenders on the date of each additional
borrowing or other credit accommodation hereunder and shall be conclusively
presumed to have been relied on by Agent and Lenders regardless of any
investigation made or information possessed by Agent or any Lender. The
representations and warranties set forth herein shall be cumulative and in
addition to any other representations or warranties which Borrower shall now or
hereafter give, or cause to be given, to Agent or any Lender.
SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS
----------------------------------
9.1 MAINTENANCE OF EXISTENCE.
(a) Borrower shall, and shall cause each Subsidiary of Borrower, at
all times preserve, renew and keep in full force and effect its corporate
existence and rights and franchises with respect thereto and maintain in full
force and effect all licenses, trademarks, tradenames, approvals,
authorizations, leases, contracts and Permits necessary to carry on the business
as presently or proposed to be conducted except to the extent permitted by
Section 9.7 hereof.
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(b) Borrower shall not, and shall not permit any Subsidiary of
Borrower to, change its name unless each of the following conditions is
satisfied: (i) Agent shall have received not less than thirty (30) days prior
written notice from Borrower or such Subsidiary of such proposed change in its
corporate name, which notice shall accurately set forth the new name; and (ii)
Agent shall have received a copy of the amendment to the Certificate of
Incorporation of Borrower or such Subsidiary providing for the name change
certified by the Secretary of State of the jurisdiction of incorporation or
organization of Borrower or such Subsidiary as soon as it is available.
(c) Borrower shall not, and shall not permit any Subsidiary of
Borrower to, change its chief executive office or its mailing address or
organizational identification number (or if it does not have one, shall not
acquire one) unless Agent shall have received not less than thirty (30) days'
prior written notice from Borrower or such Subsidiary of such proposed change,
which notice shall set forth such information with respect thereto as Agent may
require and Agent shall have received such agreements as Agent may reasonably
require in connection therewith. Except as otherwise permitted by Section 9.7
hereof, Borrower or such Subsidiary shall not change its type of organization,
jurisdiction of organization or other legal structure.
9.2 NEW COLLATERAL LOCATIONS. Borrower and each Subsidiary of
Borrower may only open any new location within the continental United States and
Canada provided Borrower or such Subsidiary (a) gives (and causes any such
Subsidiary to give) Agent thirty (30) days prior written notice of the intended
opening of any such new location and (b) executes and delivers, or causes to be
executed and delivered (including any such Subsidiary), to Agent such
agreements, documents, and instruments as Agent may deem reasonably necessary or
desirable to protect its interests in the Collateral at such location; PROVIDED,
THAT, Borrower and any such Subsidiary may open new inventory locations from
time to time for the purpose of meeting requests of customers so long as the
following conditions have been satisfied: (a) Agent shall have received not less
than three (3) days' prior written notice of the intention of Borrower or such
Subsidiary to open a new location, which notice shall set forth the address of
the premises where the Inventory will be located and the Value of the Inventory
at such new location, (b) the Value of Inventory at all such third party
locations shall not exceed $250,000 in the aggregate at any one time, and (c)
promptly upon Agent's request, Borrower shall deliver to Agent a Collateral
Access Agreement for such new location duly authorized, executed and delivered
by such person and Borrower.
9.3 COMPLIANCE WITH LAWS, REGULATIONS, ETC.
(a) Borrower shall, and shall cause each Subsidiary of Borrower to,
at all times, comply in all material respects with all laws, rules, regulations,
licenses, approvals, orders and other Permits applicable to it and duly observe
all requirements of any foreign, Federal, State or local Governmental Authority,
including ERISA, the Code, the Occupational Safety and Health Act of 1970, as
amended, the Fair Labor Standards Act of 1938, as amended, and all statutes,
rules, regulations, orders, permits and stipulations relating to environmental
pollution and employee health and safety, including all of the Environmental
Laws when the failure to so comply or observe has or could reasonably be
expected to have a Material Adverse Effect.
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(b) Borrower shall, and shall cause each Subsidiary of Borrower to,
give written notice to Agent promptly upon Borrower's or such Subsidiary's
receipt of any notice of, or Borrower's or such Subsidiary's otherwise obtaining
knowledge of, (i) the occurrence of any event involving the release, spill or
discharge, threatened or actual, of any Hazardous Material which is required by
law to be reported to the Governmental Authority having jurisdiction over such
event or which is required to be reported to the Note Trustee pursuant to the
terms of the Noteholder Agreements; or (ii) any investigation, proceeding,
complaint, order, directive, claims, citation or notice with respect to: (A) any
material violation of any Environmental Law by Borrower or any Subsidiary of
Borrower or (B) the release, spill or discharge, threatened or actual, of any
Hazardous Material other than in the ordinary course of business and other than
as permitted under any applicable Environmental Law. Copies of all environmental
surveys, audits, assessments, feasibility studies and results of remedial
investigations conducted by or on behalf of Borrower or any Subsidiary of
Borrower shall be promptly furnished, or caused to be furnished, by Borrower or
such Subsidiary to Agent unless such documents are expressly subject to an
attorney-client privilege. Borrower shall, and shall cause each Subsidiary of
Borrower to, take prompt action to respond to any material non-compliance with
any of the Environmental Laws and shall regularly report to Agent on such
response.
(c) Without limiting the generality of the foregoing, whenever
Agent reasonably determines that there is a violation, or any condition which
requires any action by or on behalf of Borrower or any Subsidiary of Borrower in
order to avoid any violation with any Environmental Law, Borrower shall, at
Agent's request and Borrower's expense: (i) cause an independent environmental
engineer reasonably acceptable to Agent to conduct such tests of the site where
violation or alleged violation with such Environmental Laws has occurred as to
such non-violation and prepare and deliver to Agent a report as to such
non-violation setting forth the results of such tests, a proposed plan for
responding to any environmental problems described therein, and an estimate of
the costs thereof and (ii) provide to Agent a supplemental report of such
engineer whenever the scope of such non-violation, or Borrower's or such
Subsidiary's response thereto or the estimated costs thereof, shall change in
any material respect.
(d) Borrower shall, and shall cause each Subsidiary of Borrower to,
indemnify and hold harmless Agent and Lenders and their respective directors,
officers, employees, agents, invitees, representatives, successors and assigns,
from and against any and all losses, claims, damages, liabilities, costs, and
expenses (including reasonable attorneys' fees and expenses) directly or
indirectly arising out of or attributable to the use, generation, manufacture,
reproduction, storage, release, threatened release, spill, discharge, disposal
or presence of a Hazardous Material, in material violation of Environmental Law,
including the costs of any required or necessary repair, cleanup or other
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remedal work with respect to any property of Borrower or such Subsidiary and the
preparation and implementation of any closure, remedial or other required plans.
All representations, warranties, covenants and indemnifications in this Section
9.3 shall survive the payment of the Obligations and the termination of this
Agreement.
9.4 PAYMENT OF TAXES AND CLAIMS. Borrower shall, and shall cause each
Subsidiary of Borrower to, duly pay and discharge all taxes, assessments,
contributions and governmental charges (other than taxes, assessments,
contributions and governmental charges) upon or against it or its properties or
assets, except for taxes the validity of which are being contested in good faith
by appropriate proceedings diligently pursued and available to Borrower or such
Subsidiary, as the case may be, and with respect to which adequate reserves have
been set aside on its books.
9.5 INSURANCE. Borrower shall, and shall cause each Subsidiary of
Borrower to, at all times, maintain with financially sound and reputable
insurers insurance with respect to the Collateral against loss or damage and all
other insurance of the kinds and in the amounts customarily insured against or
carried by corporations of established reputation engaged in the same or similar
businesses and similarly situated. Said policies of insurance shall be
reasonably satisfactory to Agent as to form, amount and insurer. Borrower shall,
and shall cause each Subsidiary of Borrower to, furnish certificates, policies
or endorsements to Agent as Agent shall reasonably require as proof of such
insurance, and, if Borrower or such Subsidiary fails to do so, Agent is
authorized, but not required, to obtain such insurance at the expense of
Borrower or such Subsidiary. All policies shall provide for at least thirty (30)
days prior written notice to Agent of any cancellation or reduction of coverage
and that Agent may act as attorney for Borrower and each Subsidiary of Borrower
in obtaining, and at any time an Event of Default exists or has occurred and is
continuing, adjusting, settling, amending and canceling such insurance. Borrower
shall cause, and shall cause each Subsidiary of Borrower to cause, Agent to be
named as a loss payee and an additional insured (but without any liability for
any premiums) under such insurance policies and Borrower or such Subsidiary
shall obtain non-contributory lender's loss payable endorsements to all
insurance policies in form and substance satisfactory to Agent. Such lender's
loss payable endorsements shall specify that the proceeds of such insurance
shall be payable to Agent as its interests may appear and further specify that
Agent and Lenders shall be paid regardless of any act or omission by Borrower or
any of its Affiliates. Without limiting any other rights of Agent or Lenders,
any insurance proceeds received by Agent at any time may be applied to payment
of the Obligations, whether or not then due, in any order and in such manner as
Agent may determine. Upon application of such proceeds to the Loans, Loans may
be available subject and pursuant to the terms hereof to be used for the costs
of repair or replacement of the Collateral lost or damages resulting in the
payment of such insurance proceeds.
9.6 FINANCIAL STATEMENTS AND OTHER INFORMATION.
(a) Borrower shall, and shall cause each Subsidiary of Borrower to,
keep proper books and records in which true and complete entries shall be made
of all dealings or transactions of or in relation to the Collateral and the
business of Borrower and its Subsidiaries in accordance with GAAP. Borrower
shall, and shall cause each Subsidiary of Borrower to, promptly furnish to Agent
and Lenders all such financial and other information as Agent shall reasonably
65
request relating to the Collateral and the assets, business and operations of
Borrower and its Subsidiaries, and Borrower shall notify the auditors and
accountants of Borrower and its Subsidiaries that Agent is authorized to obtain
such information directly from them. Without limiting the foregoing, Borrower
shall furnish or cause to be furnished to Agent, the following: (i) within
thirty (30) days after the end of each fiscal month, monthly unaudited
consolidated financial statements, and unaudited consolidating financial
statements (including in each case balance sheets, statements of income and
loss, statements of cash flow, and statements of shareholders' equity), all in
reasonable detail, fairly presenting in all material respects the financial
position and the results of the operations of Borrower and its Subsidiaries as
of the end of and through such fiscal month, certified to be correct by the
chief financial officer of Borrower, subject to normal year-end adjustments and
no footnotes and, if such covenants are being measured monthly in accordance
with Section 9.17 hereof, accompanied by a compliance certificate substantially
in the form of Exhibit C hereto, along with a schedule in a form satisfactory to
Agent of the calculations used in determining, as of the end of such month,
whether Borrower is in compliance with the covenants set forth in Section 9.17
of this Agreement for such month, (ii) within forty-five (45) days after the end
of each fiscal quarter, quarterly unaudited consolidated financial statements,
and unaudited consolidating financial statements (including in each case balance
sheets, statements of income and loss, statements of cash flow, and statements
of shareholders' equity), all in reasonable detail, fairly presenting in all
material respects the financial position and the results of the operations of
Borrower and its Subsidiaries as of the end of and through such fiscal quarter,
certified to be correct by the chief financial officer or other financial
officer satisfactory to Agent of Borrower, subject to normal year-end
adjustments and no footnotes and, if such covenants are being measured quarterly
in accordance with Section 9.17 hereof, accompanied by a compliance certificate
substantially in the form of Exhibit C hereto, along with a schedule in a form
satisfactory to Agent of the calculations used in determining, as of the end of
such quarter, whether Borrower is in compliance with the covenants set forth in
Section 9.17 of this Agreement for such quarter, and (iii) within ninety (90)
days after the end of each fiscal year, audited consolidated financial
statements and unaudited consolidating financial statements of Borrower and its
Subsidiaries (including in each case balance sheets, statements of income and
loss, statements of cash flow, and statements of shareholders' equity), and the
accompanying notes thereto, all in reasonable detail, fairly presenting the
financial position and the results of the operations of Borrower and its
Subsidiaries as of the end of and for such fiscal year, together with the
unqualified opinion of independent certified public accountants with respect to
the audited consolidated financial statements, which accountants shall be an
independent accounting firm selected by Borrower and acceptable to Agent, that
such audited consolidated financial statements have been prepared in accordance
with GAAP, and present fairly in all material respects the results of operations
and financial condition of Borrower and its Subsidiaries as of the end of and
for the fiscal year then ended.
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(b) Borrower shall promptly notify Agent in writing of the details
of (i) any loss, damage, investigation, action, suit, proceeding or claim
relating to Collateral having a value of more than $1,000,000 or which if
adversely determined would result in any material adverse change in Borrower's
or any of its Subsidiaries' business, properties, assets, goodwill or condition,
financial or otherwise result in a Material Adverse Effect, (ii) any Material
Contract being terminated or amended or any new Material Contract entered into
(in which event Borrower shall provide, or shall cause such Subsidiary to
provide to, Agent with a copy of such Material Contract), (iii) any order,
judgment or decree in excess of $1,000,000 shall have been entered against
Borrower or such Subsidiary, any of its properties or assets, (iv) any
notification of a material violation of laws or regulations received by Borrower
or such Subsidiary, (v) any ERISA Event, and (vi) the occurrence of any Default
or Event of Default.
(c) Borrower shall, and shall cause each Subsidiary of Borrower to,
promptly after the sending or filing thereof furnish or cause to be furnished to
Agent copies of all reports which Borrower or any of its Subsidiaries sends to
its stockholders generally and copies of all reports and registration statements
which Borrower or such Subsidiary files with the Securities and Exchange
Commission, any national securities exchange or the National Association of
Securities Dealers, Inc.
(d) Borrower shall furnish or cause to be furnished to Agent as
soon as available but by no later than February 28 of each year, in form and
detail acceptable to Agent, Financial Projections for the fiscal year of
Borrower and its Subsidiaries ending fiscal year, commencing with the fiscal
year ending 2006. Without limiting the foregoing, Borrower shall furnish or
cause to be furnished to Agent such budgets, forecasts, projections and other
information respecting the Collateral and the business of Borrower and its
Subsidiaries, as Agent may, from time to time, reasonably request. Subject to
the terms of Section 13.5 hereof, Agent is hereby authorized to deliver a copy
of any financial statement or any other information relating to the business of
Borrower and its Subsidiaries to any court or other Governmental Authority, or
to any Lender or Participant or prospective Lender or Participant, or any
Affiliate of any Lender or Participant. Borrower hereby irrevocably authorizes
and directs its accountants or auditors to deliver to Agent, at Borrower's
expense, copies of the financial statements of Borrower and its Subsidiaries and
any reports or management letters prepared by such accountants or auditors on
behalf of Borrower and its Subsidiaries and to disclose to Agent and Lenders
such information as they may have regarding the business of Borrower and its
Subsidiaries. In any such connection and discussion, Agent shall give Borrower
prior telephonic or written notice to Borrower's Chief Financial Officer, Vice
President of Finance or other officer of Borrower set forth on Schedule 9.6(d)
hereto. Any documents, schedules, invoices or other papers delivered to Agent or
any Lender may be destroyed or otherwise disposed of by Agent or such Lender one
(1) year after the same are delivered to Agent or such Lender, except as
otherwise designated by party to Agent or such Lender in writing.
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9.7 SALE OF ASSETS, CONSOLIDATION, MERGER, DISSOLUTION, ETC.
Borrower shall not, and shall not permit any Subsidiary of Borrower to, directly
or indirectly,
(a) merge into or with or consolidate with any other Person or
permit any other Person to merge into or with or consolidate with it, EXCEPT
THAT a majority-owned Subsidiary of Borrower may merge into or with or
consolidate with Borrower or a wholly-owned domestic Subsidiary of Borrower;
PROVIDED, THAT, each of the following conditions is satisfied as determined by
Agent: (i) Agent shall have received not less than ten (10) Business Days' prior
written notice of the intention of Borrower to so merge or consolidate, and such
information with respect thereto as Agent may reasonably request, (ii) as of the
effective date of such merger or consolidation and after giving effect thereto,
no Event of Default shall exist or have occurred, (iii) Agent shall have
received true, correct and complete copies of all agreements, documents and
instruments relating to such merger, including, but not limited to, the
certificate or certificates of merger as filed with each appropriate Secretary
of State, (iv) Borrower or such wholly-owned domestic Subsidiary shall be the
surviving entity and shall immediately upon the effectiveness of the merger
expressly confirm in writing pursuant to an agreement, in form and substance
satisfactory to Agent, its continuing liability in respect of the Obligations
and the Financing Agreements to which it is a party and execute and deliver such
other agreements, documents and instruments as Agent may reasonably request in
connection therewith, (v) any Guarantor shall ratify and confirm that its
guarantees of the Obligations shall apply to the Obligations as assumed by such
surviving entity and ratify and confirm any other agreements by such Obligors in
favor of Agent, and (vi) the surviving entity shall not become obligated with
respect to any Indebtedness, nor any of its property become subject to any lien,
unless Borrower could incur such Indebtedness or create such lien hereunder;
(b) sell, issue, assign, lease, license, transfer, abandon or
otherwise dispose of any Capital Stock or Indebtedness to any other Person or
any of its assets to any other Person, EXCEPT FOR
(i) sales of Inventory in the ordinary course of business,
(ii) the sale or other disposition of Equipment (including
worn-out or obsolete Equipment or Equipment no longer used or useful in the
business of Borrower) or other assets (other than any Collateral) no longer used
in the conduct of its business so long as such sales or other dispositions do
not involve Equipment or such other assets (other than any Collateral) having an
aggregate fair market value in excess of $17,500,000 for all such Equipment or
such other assets (other than Collateral) disposed of in any fiscal year of
Borrower or as Agent may otherwise agree, or
(iii)[intentionally omitted]
(iv) the issuance or sale of Capital Stock by Borrower or
any Subsidiary of Borrower after the date hereof or as sales or issuances of
Capital Stock issued by Subsidiaries formed or acquired to the extent permitted
hereby; PROVIDED, THAT, (A) in the case of any such sale or issuance of Capital
Stock of a Subsidiary or, if an Event of Default has occurred and is continuing,
any issuance of Capital Stock of Borrower, Agent shall have received not less
than ten (10) Business Days' prior written notice of such issuance and sale by
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Borrower, which notice shall specify the parties to whom such shares are to be
sold, the terms of such sale, the total amount which it is anticipated will be
realized from the issuance and sale of such stock and the net cash proceeds
which it is anticipated will be received by Borrower from such sale,
(B) Borrower shall not be required to pay any cash dividends or repurchase or
redeem such Capital Stock or make any other payments in respect thereof prior to
the end of the term of this Agreement, except as otherwise permitted in Section
9.11 hereof, (C) the terms of such Capital Stock, and the terms and conditions
of the purchase and sale thereof, shall not include any terms that include any
limitation on the right of Borrower to request or receive Loans or which are
more restrictive or burdensome to Borrower than the terms of any Capital Stock
of Borrower in effect on the date hereof, and (D) in the case of any such sale
or issuance of Capital Stock of a Subsidiary or, if an Event of Default has
occurred and is continuing, any issuance of Capital Stock of Borrower, after
giving effect to such issuance or sale, no Event of Default shall exist or have
occurred and be continuing;
(v) (A) the issuance of Capital Stock of Borrower
consisting of common stock (and options therefor) in accordance with the terms
and conditions of the Plan of Reorganization as in effect on the date hereof and
the Confirmation Order as in effect on the date hereof, (B) [intentionally
omitted], (C) the issuance of Capital Stock of Borrower consisting of common
stock pursuant to the exercise of options therefor that have been issued
pursuant to the Plan of Reorganization as in effect on the date hereof, and (D)
the issuance of Capital Stock to qualify directors to the extent required by
applicable law in the ordinary course;
(vi) the issuance of Capital Stock of Borrower consisting of
common stock pursuant to an employee stock option or grant or similar equity
plan or 401(k) plans of Borrower for the benefit of its employees, directors and
consultants,
(vii) [intentionally omitted]
(viii) the licensing by Borrower or a Subsidiary of Borrower of
Intellectual Property owned by it to another Person; PROVIDED, THAT, as to any
such license: (A) the transaction with respect to such license is an arm's
length transaction in the ordinary course of business of Borrower or such
Subsidiary, (B) Borrower or such Subsidiary receives at least fair market value
with respect to the value of such license as determined by Borrower in good
faith, and (C) any rights of such Borrower or such Subsidiary shall be subject
to the rights of Agent in such Intellectual Property, including, without
limitation, the rights of Agent to use such Intellectual Property in connection
with the exercise of Agent's rights and remedies with respect to the Collateral;
69
(ix) investments permitted by Section 9.10 hereof;
(x) sale and leaseback transactions with respect to Equipment,
Real Property or other assets not constituting Collateral so long as the
following conditions shall have been satisfied, (A) Agent shall have received
not less than ten (10) Business Days' prior written notice of such sale or
leaseback and such other information with respect thereto as Agent may
reasonably request, (B) after giving effect to such transaction no Default or
Event of Default exists or has occurred and is continuing, (C) such transaction
is an arm's length transaction and Borrower or such Subsidiary, as the case may
be, receives at least fair market value, as determined in good faith by
Borrower, in connection with such transaction and (D) if requested by Agent,
Agent shall have received, in form and substance satisfactory to Agent, a
Collateral Access Agreement with respect to such Equipment, Real Property or
other assets;
(xi) [intentionally omitted];
(xii) sales or other dispositions by Borrower of assets or
properties consisting of the Note Collateral; provided, that, as to each and all
such sales or dispositions, (A) except with respect to the sale of the Dayville,
Connecticut Closed Plant, Agent shall have received not less than ten (10)
Business Days' prior written notice of such sale or disposition, and such other
information with respect thereto as Agent may reasonably request, and (B) such
sale or disposition is consummated in accordance with the terms and conditions
of the Noteholder Agreements;
(c) form or acquire any Subsidiaries, EXCEPT, THAT, Borrower may
form or acquire Subsidiaries (to the extent permitted by Sections 9.7(a) and
9.10 hereof) after the date hereof; PROVIDED, THAT, (i) as of the date of such
formation or acquisition, and after giving effect thereto or otherwise, no
Default or Event of Default shall exist or have occurred and be continuing, (ii)
such Subsidiary shall be incorporated in a State of the United States, (iii)
upon such formation or acquisition, Borrower shall notify Agent of such
formation or acquisition and Borrower shall cause any such Subsidiary to execute
and deliver to Agent, in form and substance satisfactory to Agent: (A) an
absolute and unconditional guarantee of payment of all of the Obligations, (B) a
security agreement granting to Agent, for itself and the benefit of Lenders a
first priority security interest in and lien upon all of the accounts receivable
and inventory (and related property comparable to that included as Collateral)
of such Subsidiary, (C) related UCC financing statements, and (D) such other
agreements, documents and instruments Agent may reasonably require in connection
therewith as to the validity and enforceability thereof, (iv) upon such
formation or acquisition, to the extent not prohibited by the Note Indenture,
Borrower shall, and shall cause each Subsidiary of Borrower that owns any
Capital Stock in such Subsidiary being formed or acquired to, (A) execute and
deliver to Agent, a pledge and security agreement, in form and substance
satisfactory to Agent, granting to Agent a pledge of and lien on all of the
issued and outstanding shares of Capital Stock of such Subsidiary so formed or
acquired that are owned by Borrower or the Subsidiary forming or acquiring such
Subsidiary, (B) deliver the original stock certificates evidencing such shares
70
of Capital Stock (or such other evidence as may be issued in the case of a
limited liability company), together with stock powers with respect thereto duly
executed in blank (or the equivalent thereof in the case of a limited liability
company in which such interests are certificated, or otherwise take such actions
as Agent shall reasonably require with respect to Agent's security interests
therein), and (C) deliver related UCC financing statements, and (v) the amount
of the investment by Borrower in the Capital Stock of such Subsidiary and any
other amounts paid by Borrower to or in connection with the formation or
acquisition of such Subsidiary shall not exceed the amount permitted under
Section 9.10 hereof;
(d) wind up, liquidate or dissolve, EXCEPT, THAT any Subsidiary of
Borrower (other than a Guarantor) may wind up, liquidate and dissolve so long
as, each of the following conditions is satisfied, (i) such winding up,
liquidation or dissolution shall be done in accordance with the requirements of
all applicable laws and regulations, (ii) effective upon such winding up,
liquidation or dissolution, all of the assets and properties of such Subsidiary
shall be duly and validly transferred and assigned to its shareholders or its
creditors, (iii) upon the request of Agent, Borrower shall deliver to Agent all
documents and agreements that Borrower or any Subsidiary has filed with any
Governmental Authority or as are otherwise required to effectuate such winding
up, liquidation or dissolution, (iv) Borrower or such Subsidiary, as the case
may be, shall not acquire any material liabilities not otherwise permitted
hereby as a result of such winding up, liquidation or dissolution, (v) Agent
shall have received not less than ten (10) Business Days prior written notice of
the intention of such Subsidiary to wind up, liquidate or dissolve, and (vi) as
of the date of such winding up, liquidation or dissolution and after giving
effect thereto, no Default or Event of Default shall exist or have occurred; or
(e) agree to do any of the foregoing provided that Borrower and its
Subsidiaries may enter into agreements to effectuate any transaction otherwise
prohibited by this Section 9.7 so long as (i) concurrently with the execution
and delivery of any such agreement, Borrower shall provide Agent notice thereof
and (ii) the consummation of any such agreement is conditioned upon obtaining
either (A) the consent of Agent or the Required Lenders or (B) the termination
of this Agreement and the other Financing Agreements and the repayment in full
of all outstanding Obligations in accordance with the terms and conditions
contained herein.
9.8 ENCUMBRANCES. Borrower shall not, and shall not permit any
Subsidiary of Borrower to, create, incur, assume or suffer to exist any security
interest, mortgage, pledge, lien, charge or other encumbrance of any nature
whatsoever on any of its assets or properties, including the Collateral, EXCEPT:
(a) the security interests and liens of Agent for itself and the
benefit of Lenders;
71
(b) liens securing the payment of taxes, assessments or other
governmental charges or levies either not yet overdue or the validity of which
are being contested in good faith by appropriate proceedings diligently pursued
and available to Borrower or Subsidiary, as the case may be, and with respect to
which adequate reserves have been set aside on its books;
(c) non-consensual statutory liens (other than liens securing the
payment of taxes) arising in the ordinary course of Borrower 's or such
Subsidiary's business to the extent: (i) such liens secure Indebtedness which is
not overdue or does not exceed $250,000 at any one time outstanding, or (ii)
such liens secure Indebtedness relating to claims or liabilities which are fully
insured and being defended at the sole cost and expense and at the sole risk of
the insurer or being contested in good faith by appropriate proceedings
diligently pursued and available to Borrower or such Subsidiary, in each case
prior to the commencement of foreclosure or other similar proceedings and with
respect to which adequate reserves have been set aside on its books;
(d) zoning restrictions, easements, licenses, covenants and other
restrictions affecting the use of Real Property which do not interfere in any
material respect with the use of such Real Property or ordinary conduct of the
business of Borrower or such Subsidiary as presently conducted thereon or
materially impair the value of the Real Property which may be subject thereto;
(e) purchase money security interests in Equipment (including
Capital Leases) and purchase money mortgages on Real Property to secure
Indebtedness permitted under Section 9.9(b) hereof;
(f) liens and security interests of the Equipment Lessor to secure
the Indebtedness arising in connection with the Equipment Financing to the
extent permitted by Section 9.9(f) hereof (including precautionary UCC financing
statements in connection therewith);
(g) pledges and deposits of cash after the date hereof in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security benefits consistent
with the current practices of Borrower as of the date hereof;
(h) pledges and deposits of cash after the date hereof to secure
the performance of tenders, bids, leases, trade contracts (other than for the
repayment of Indebtedness), statutory obligations and other similar obligations
in each case in the ordinary course of business consistent with the current
practices of Borrower as of the date hereof;
(i) liens arising from (i) operating leases and the precautionary
UCC financing statement filings in respect thereof, and (ii) equipment or other
materials which are not owned by Borrower or a Subsidiary of Borrower but are
located on the premises of Borrower or such Subsidiary of Borrower (but not in
connection with, or as part of, the financing thereof) from time to time in the
ordinary course of business and consistent with current practices of Borrower
and the precautionary UCC financing statement filings in respect thereof;
72
(j) [intentionally omitted]
(k) subject to the terms and conditions of the Intercreditor
Agreement, liens securing the Indebtedness owed to Congress and the Congress
Lenders under the Congress Loan Agreement, to the extent that such Indebtedness
is permitted hereunder;
(l) judgments and other similar liens arising in connection with
court proceedings that do not constitute an Event of Default; PROVIDED, THAT,
(i) such liens are being contested in good faith and by appropriate proceedings
diligently pursued, (ii) adequate reserves or other appropriate provision, if
any, as are required by GAAP have been made therefor, and (iii) a stay of
enforcement of any such liens is in effect;
(m) leases or subleases of Equipment, Real Property and other
property (not including Collateral) granted to other Persons in the ordinary
course of business by Borrower or a Subsidiary of Borrower so long as (i) Agent
shall have received not less than ten (10) Business Days' prior written notice
of such lease or sublease, and such other information with respect thereto as
Agent may reasonably request, and (ii) if requested by Agent, Agent shall have
received, in form and substance satisfactory to Agent, a Collateral Access
Agreement;
(n) security interests, liens and mortgages existing on property or
assets (other than Collateral) acquired pursuant to an acquisition permitted by
Section 9.10 hereof, or on property or assets (other than any Collateral) of a
Person in existence at the time such Person becomes a Subsidiary pursuant to an
acquisition permitted by Section 9.10 hereof, PROVIDED, THAT, (i) any
Indebtedness that is secured by any such security interests or liens is
otherwise permitted by Section 9.9 hereof, (ii) such security interests and
liens are not incurred in connection with, or in contemplation of, any such
acquisition, and do not attach to any Collateral or any asset of Borrower or any
of its Subsidiaries, other than the property or assets (or the property or
assets of such Person) being so acquired (but in any event not any Collateral
after giving effect to such acquisition), and (iii) upon Agent's request,
Borrower shall have used its reasonable best efforts to deliver or cause to be
delivered to Agent, in form and substance satisfactory to Agent, a Collateral
Access Agreement, duly authorized, executed and delivered by the holder of any
such security interest or lien;
(o) the security interests and liens set forth on Schedule 8.4 to
the Information Certificate;
(p) security interests, liens, and mortgages on assets or
properties (other than Collateral) securing Indebtedness permitted under
Sections 9.9(d), 9.9(e), 9.9(h) and 9.9(i) hereof to the extent that such
Indebtedness is refinanced pursuant to a Refinancing Indebtedness permitted
under Section 9.9(h) hereof; provided, THAT, if requested by Agent, Borrower
shall have delivered or cause to be delivered to Agent a Collateral Access
Agreement, duly authorized, executed and delivered by the holder of any such
security interest or lien, that permits Agent access to the Collateral on at
least the same terms and conditions of the collateral access provisions in favor
of Congress set forth in the Collateral Access and Intercreditor Agreement (as
defined in the Congress Loan Agreement and as in effect on the date hereof); and
73
(q) the security interests in and mortgages and liens upon the Note
Collateral in favor of Note Trustee to secure the Noteholder Debt to the extent
permitted hereunder; provided, that, such security interests in and mortgages
and liens in favor of Note Trustee shall at all times extend to and include the
Note Collateral (and not any of the Collateral).
9.9 INDEBTEDNESS. Borrower shall not, and shall not permit any
Subsidiary of Borrower to, incur, create, assume, become or be liable in any
manner with respect to, or permit to exist, any Indebtedness, or guarantee,
assume, endorse, or otherwise become responsible for (directly or indirectly),
the Indebtedness, performance, obligations or dividends of any other Person,
EXCEPT:
(a) the Obligations;
(b) purchase money Indebtedness (including Capital Leases) arising
after the date hereof to the extent secured by purchase money security interests
in Equipment (including Capital Leases) and purchase money mortgages on Real
Property not to exceed $50,000,000 in the aggregate at any time outstanding so
long as such security interests and mortgages do not apply to any property of
Borrower or any Subsidiary of Borrower other than the Equipment or Real Property
so acquired, and the Indebtedness secured thereby does not exceed the cost of
the Equipment or Real Property so acquired, as the case may be;
(c) unsecured Indebtedness of Borrower or any Subsidiary of
Borrower arising after the date hereof to any third person, PROVIDED, THAT, as
to any such Indebtedness, each of the following conditions is satisfied: (i)
Agent shall have received not less than ten (10) Business Days' prior written
notice of the intention to incur such Indebtedness, which notice shall set forth
in reasonable detail satisfactory to Agent, the amount of such Indebtedness, the
schedule of repayments and maturity date with respect thereto and such other
information with respect thereto as Agent may reasonably request, (ii) promptly
upon Agent's request, Agent shall have received true, correct and complete
copies of all agreements, documents and instruments evidencing or otherwise
related to such Indebtedness, as duly authorized, executed and delivered by the
parties thereto, (iii) as of the date of the incurrence of any such Indebtedness
and after giving effect thereto, the aggregate amount of the Congress Excess
Availability of Borrower shall have been not less than $10,000,000 for each of
the immediately preceding thirty (30) consecutive days and the aggregate amount
of the Congress Excess Availability of Borrower shall be not less than
$10,000,000, (iv) after giving effect to the incurring of such Indebtedness and
the use of proceeds thereof, no Default or Event of Default shall exist or have
occurred and be continuing, (v) Borrower shall not, directly or indirectly, (A)
amend, modify, alter or change the terms of such Indebtedness or any agreement,
document or instrument related thereto, EXCEPT, THAT, Borrower may, after prior
written notice to Agent, amend, modify, alter or change the terms thereof so
74
long as any such amendment, modification, alteration or change does not result
in terms that are more burdensome or restrictive than the terms of such
Indebtedness as in effect on the date of the incurrences thereof as determined
by Agent in good faith, or (B) except as permitted pursuant a Refinancing
Indebtedness to the extent permitted by Section 9.9(h) hereof, redeem, retire,
defease, purchase or otherwise acquire such Indebtedness (except pursuant to
regularly scheduled payments permitted herein), or set aside or otherwise
deposit or invest any sums for such purpose; PROVIDED, THAT, Borrower may make
voluntary prepayments in respect of such Indebtedness so long as the following
conditions have been satisfied: (1) as of the date of any such prepayment and
after giving effect thereto, no Default or Event of Default (other than a
Default or Event of Default that will be cured after giving effect to such
prepayment) shall exist or have occurred and be continuing, (2) as of the date
of any such prepayment and after giving effect thereto, the aggregate amount of
the Congress Excess Availability of Borrower shall have been not less than
$10,000,000 for each of the immediately preceding thirty (30) consecutive days
and the aggregate amount of the Congress Excess Availability of Borrower shall
be not less than $10,000,000, and (3) Agent shall have received not less than
ten (10) Business Days' prior written notice thereof setting forth in reasonable
detail the amount of the prepayment and such other information with respect
thereto as Agent may request; and (vi) Borrower shall furnish to Agent all
material notices or demands in connection with such Indebtedness either received
by Borrower or on its behalf promptly after the receipt thereof, or sent by
Borrower or on its behalf concurrently with the sending thereof, as the case may
be;
(d) subject to the Intercreditor Agreement, Indebtedness owing to
Congress and the Congress Lenders under the Congress Loan Agreement; PROVIDED,
THAT:
(i) the principal amount of such Indebtedness shall not exceed
$115,000,000, or, if less, the amount of any applicable restriction in the Note
Indenture, less the aggregate amount of all repayments, repurchases or
redemptions thereof, whether optional or mandatory (but only to the extent
resulting in a reduction of the commitments thereunder), plus interest thereon
at the rate provided in the Congress Loan Agreement as in effect on the date
hereof,
(ii) as of the date hereof, no event of default, or event which
with notice or passage of time or both would constitute an event of default
exists, or has occurred and is continuing under the Congress Loan Agreement,
(iii) Borrower shall not, directly or indirectly, amend,modify,
alter or change any of the material terms of such Indebtedness or any of the
Congress Loan Documents as in effect on the date hereof, except, THAT, (A)
Borrower may, after prior written notice to Agent, amend, modify, alter or
change the terms thereof so long as any such amendment, modification, alteration
or change does not result in terms that are more burdensome or restrictive than
the terms of such Indebtedness as in effect on the date hereof as determined by
Agent in good faith, and (B) Borrower may amend, modify, alter or change the
terms thereof so long as Borrower, Agent, and the Lenders or Required Lenders,
as applicable, execute and deliver a comparable amendment to the applicable
Financing Agreement, and
75
(iv) Borrower shall furnish to Agent all material notices or
demands in connection with such Indebtedness either received by Borrower or on
its behalf promptly after the receipt thereof, or sent by Borrower or on its
behalf concurrently with the sending thereof, as the case may be.
(e) [intentionally omitted]
(f) Indebtedness of Borrower arising in connection with the
Equipment Financing; PROVIDED, THAT,
(i) [intentionally omitted],
(ii) [intentionally omitted],
(iii) to the extent Agent and Lenders deem necessary in their
good faith determination, Agent shall have received, in form and substance
satisfactory to Agent, a Collateral Access Agreement, duly authorized, executed
and delivered by Equipment Lessor,
(iv) the principal amount of such Indebtedness shall not at any
time exceed $75,000,000,
(v) as of the date of incurring such Indebtedness and after
giving effect thereto, no Default of Event of Default shall exist or have
occurred and be continuing,
(vi) Borrower shall not, directly or indirectly, make, or be
required to make, any payments in respect of such Indebtedness, EXCEPT, lease
payments in accordance with the terms of the Equipment Financing Agreements as
in effect on the date hereof and Borrower may make voluntary prepayments in
respect of such Indebtedness so long as the following conditions have been
satisfied:
(A) as of the date of any prepayment and after giving effect
thereto, no Default or Event of Default (other than a Default or Event of
Default that will be cured after giving effect to such prepayment) shall exist
or have occurred and be continuing,
(B) as of the date of any such prepayment and after giving
effect thereto, the aggregate amount of the Congress Excess Availability of
Borrower shall have been not less than $10,000,000 for each of the immediately
preceding thirty (30) consecutive days and the aggregate amount of the Congress
Excess Availability of Borrower shall be not less than $10,000,000,
76
(C) Agent shall have received not less than ten (10) Business
Days' prior written notice thereof setting forth in reasonable detail the amount
of the prepayment and such other information with respect thereto as Agent may
request;
(vii) Borrower shall not, directly or indirectly, (A) amend,
modify, alter or change any of the material terms of such Indebtedness or any of
the Equipment Lease Financing Agreements as in effect on the date hereof,
EXCEPT, THAT, Borrower may, after prior written notice to Agent, amend, modify,
alter or change the terms thereof so long as any such amendment, modification,
alteration or change does not result in terms that are more burdensome or less
favorable than the terms of such Indebtedness as in effect on the date such
Indebtedness is incurred pursuant hereto or (B) redeem, retire, defease,
purchase or otherwise acquire such Indebtedness, or set aside or otherwise
deposit or invest any sums for such purpose, except as permitted in the
immediately preceding clause (vi) or pursuant to Refinancing Indebtedness to the
extent permitted by Section 9.9(h) hereof, and
(viii) Borrower shall furnish to Agent all material notices or
demands in connection with such Indebtedness either received by Borrower or on
its behalf promptly after the receipt thereof, or sent by Borrower or on its
behalf concurrently with the sending thereof, as the case may be;
(g) unsecured Indebtedness of Borrower to the PBGC evidenced by or
arising under the PBGC Settlement Agreements (as in effect on the date hereof);
provided, that:
(i) the principal amount of such Indebtedness shall not exceed
$120,750,000, less the aggregate amount of all payments to be made to the PBGC
in accordance with the terms and conditions of the PBGC Settlement Agreements as
in effect on the date hereof,
(ii) as of the date hereof, no event of default, or event which
with notice or passage of time or both would constitute an event of default
exists, or has occurred under the PBGC Settlement Agreements,
(iii) [intentionally omitted],
(iv) Borrower shall not, directly or indirectly, make, or be
required to make, any payments in respect of such Indebtedness, except, that,
Borrower may make regularly scheduled monthly payments to the PBGC in the amount
of $833,333.33 in accordance with the terms of the PBGC Settlement Agreements as
in effect on the date hereof,
(v) Borrower shall not, directly or indirectly, (A) amend,
modify, alter or change any of the material terms of such Indebtedness or any of
the PBGC Settlement Agreements as in effect on the date hereof, or (B) redeem,
retire, defease, purchase or otherwise acquire such Indebtedness, or set aside
or otherwise deposit or invest any sums for such purpose, except as permitted in
the immediately preceding clause (iv), and
(vi) Borrower shall furnish to Agent all material notices or
demands in connection with such Indebtedness either received by Borrower or on
its behalf promptly after the receipt thereof, or sent by Borrower or on its
behalf concurrently with the sending thereof, as the case may be;
77
(h) Indebtedness of Borrower or any Subsidiary of Borrower arising
after the date hereof issued in exchange for, or the proceeds of which are used
to refinance, replace or substitute for Indebtedness permitted under any of
Sections 9.9(c), (d), and (i) hereof (the "Refinancing Indebtedness"); PROVIDED,
THAT, as to any such Refinancing Indebtedness, each of the following conditions
is satisfied: (i) Agent shall have received not less than ten (10) Business
Days' prior written notice of the intention to incur such Indebtedness, which
notice shall set forth in reasonable detail satisfactory to Agent, the amount of
such Indebtedness, the schedule of repayments and maturity date with respect
thereto and such other information with respect thereto as Lender may reasonably
request, (ii) promptly upon Agent's request, Agent shall have received true,
correct and complete copies of all agreements, documents and instruments
evidencing or otherwise related to such Indebtedness, as duly authorized,
executed and delivered by the parties thereto, (iii) as of the date of any such
Refinancing and after giving effect thereto, the aggregate amount of the
Congress Excess Availability of Borrower shall have been not less than
$10,000,000 for each of the immediately preceding thirty (30) consecutive days
and the aggregate amount of the Congress Excess Availability of Borrower shall
be not less than $10,000,000, (iv) the Refinancing Indebtedness shall rank in
right of payment no more senior than the Obligations as the Indebtedness being
refinanced, replaced or substituted for, (v) the Refinancing Indebtedness shall
not include terms and conditions with respect to Borrower or any of its
Subsidiaries which are more burdensome or restrictive in any respect than those
included in the Indebtedness so refinanced, replaced or substituted for, (vi)
such Indebtedness shall be incurred by Borrower in a bona fide arm's length
transaction and on terms and conditions that are commercially reasonable, (vii)
after giving effect to the incurring of such Indebtedness and the use of
proceeds thereof, no Default or an Event of Default shall exist or have occurred
and be continuing, (viii) the principal amount of such Refinancing Indebtedness
shall not exceed the principal amount of and accrued but unpaid interest on the
debt being refinanced (plus the amount of reasonable refinancing fees and
expenses incurred in connection with such Refinancing Indebtedness or the
Indebtedness being refinanced, in each case, which is due and payable on the
date of such event), (ix) in the case of Refinancing Indebtedness, Borrower may
only make regularly scheduled payments of principal and interest in respect of
such Indebtedness; PROVIDED, THAT, Borrower may make voluntary prepayments in
respect of such Indebtedness so long as the following conditions have been
satisfied: (A) as of the date of any such prepayment and after giving effect
thereto, no Default or Event of Default (other than a Default or Event of
Default that will be cured after giving effect to such prepayment) shall exist
or have occurred and be continuing, (B) as of the date of any such prepayment
and after giving effect thereto, the aggregate amount of the Congress Excess
Availability of Borrower shall have been not less than $10,000,000 for each of
the immediately preceding thirty (30) consecutive days and the aggregate amount
of the Congress Excess Availability of Borrower shall be not less than
$10,000,000, and (C) Agent shall have received not less than ten (10) Business
Days' prior written notice thereof setting forth in reasonable detail the amount
of the prepayment and such other information with respect thereto as Agent may
request; (x) Borrower shall not, directly or indirectly, (A) amend, modify,
alter or change any of the material terms of such Indebtedness as in effect on
the date such Indebtedness is refinanced in accordance with the terms and
78
conditions hereof, EXCEPT, THAT, Borrower may, after prior written notice to
Agent, amend, modify, alter or change the terms thereof so long as any such
amendment, modification, alteration or change does not result in terms that are
more burdensome or less favorable than the terms of such Indebtedness as in
effect on the date such Indebtedness is incurred pursuant hereto, or (B) redeem,
retire, defease, purchase or otherwise acquire such Indebtedness, or set aside
or otherwise deposit or invest any sums for such purpose (other than as
permitted by clauses (v) and (ix) of this Section 9.9(h)) and (xi) Borrower
shall furnish to Agent copies of all material notices or demands in connection
with Indebtedness received by Borrower or any such Subsidiary or on its behalf
promptly after the receipt thereof or sent by Borrower or any such Subsidiary on
its behalf concurrently with the sending thereof, as the case may be;
(i) the Indebtedness set forth on Schedule 9.9 to the Information
Certificate; PROVIDED, THAT, (i) Borrower may only make regularly scheduled
payments of principal and interest in respect of such Indebtedness in accordance
with the terms of the agreement or instrument evidencing or giving rise to such
Indebtedness as in effect on the date hereof; PROVIDED, THAT, Borrower may make
voluntary prepayments in respect of such Indebtedness so long as the following
conditions have been satisfied: (A) as of the date of any such prepayment and
after giving effect thereto, no Default or Event of Default (other than a
Default or Event of Default that will be cured after giving effect to such
prepayment) shall exist or have occurred and be continuing, (B) as of the date
of any such prepayment and after giving effect thereto, the aggregate amount of
the Congress Excess Availability of Borrower shall have been not less than
$10,000,000 for each of the immediately preceding thirty (30) consecutive days
and the aggregate amount of the Congress Excess Availability of Borrower shall
be not less than $10,000,000, and (C) Agent shall have received not less than
ten (10) Business Days' prior written notice thereof setting forth in reasonable
detail the amount of the prepayment and such other information with respect
thereto as Agent may request, (ii) Borrower shall not, directly or indirectly,
(A) amend, modify, alter or change any of the material terms of such
Indebtedness or any of such Indebtedness as in effect on the date hereof,
except, THAT, Borrower may, after prior written notice to Agent, amend, modify,
alter or change the terms thereof so long as any such amendment, modification,
alteration or change does not result in terms that are more burdensome or less
favorable than the terms of such Indebtedness as in effect on the date such
Indebtedness is incurred pursuant hereto or (B) redeem, retire, defease,
purchase or otherwise acquire such Indebtedness, or set aside or otherwise
deposit or invest any sums for such purpose, except as permitted in the
immediately preceding clause (i) of this Section 9.9(i) or pursuant to a
Refinancing Indebtedness to the extent permitted by Section 9.9(h) hereof, and
(iii) Borrower shall furnish to Agent all notices or demands in connection with
such Indebtedness either received by Borrower or on its behalf, promptly after
the receipt thereof, or sent by Borrower or on its behalf, concurrently with the
sending thereof, as the case may be;
(j) Indebtedness with respect to surety bonds, appeal bonds or like
instruments acquired in the ordinary course of business or in connection with
the enforcement of rights or claims of Borrower or any of its Subsidiaries or in
connection with judgments that do not result in a Default or an Event of
Default; PROVIDED, THAT, the aggregate outstanding amount of all such surety
bonds, appeal bonds and like instruments permitted by this Section 9.9(j) shall
not at any time exceed $500,000;
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(k) Indebtedness under Hedge Agreements on terms acceptable to
Agent;
(l) intercompany Indebtedness among Borrower and its Subsidiaries
to the extent permitted by Section 9.10 hereof;
(m) unsecured guarantees by Borrower of Indebtedness or other
obligations of its Subsidiaries that are permitted to be incurred hereunder; and
(n) Indebtedness of Borrower to Note Trustee and Noteholders
evidenced by or arising under the Senior Secured Notes and the other Noteholder
Agreements (as in effect on the date of execution and delivery of the First
Supplement to Indenture therefor); PROVIDED, that:
(i) the principal amount of such Indebtedness shall not exceed
$350,000,000, less the aggregate amount of all repayments, repurchases or
redemptions thereof, whether optional or mandatory, plus interest thereon at the
rate provided in the Senior Secured Notes as in effect on the date of execution
and delivery of the First Supplement to Indenture therefor,
(ii) Borrower shall not, directly or indirectly, make any
payments in respect of such Indebtedness, except, the Borrower may make
regularly scheduled payments of interest in respect of the Senior Secured Notes
in accordance with the terms of the Noteholder Agreements as in effect on the
date of execution and delivery of the First Supplement to Indenture therefor and
Borrower may make voluntary prepayments in respect of such Indebtedness so long
as each of the following conditions have been satisfied:
(A) as of the date of any such prepayment and after
giving effect thereto, no Default or Event of Default (other than a Default or
Event of Default that will be cured after giving effect to such prepayment)
shall exist or have occurred and be continuing,
(B) as of the date of any such prepayment and after
giving effect thereto, the aggregate amount of the Congress Excess Availability
of Borrower shall have been not less than $10,000,000 for each of the
immediately preceding thirty (30) consecutive days and the aggregate amount of
the Congress Excess Availability of Borrower shall be not less than $10,000,000,
(C) Agent shall have received not less than ten (10)
Business Days' prior written notice thereof setting forth in reasonable detail
the amount of such prepayment and such other information with respect thereto as
Agent may request;
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(iii) Borrower shall not, directly or indirectly, (A) amend,
modify, alter or change any of the material terms of such Indebtedness or any of
the Noteholder Agreements as in effect on the date of execution and delivery of
the First Supplement to Indenture therefor, except, the Borrower may, after
prior written notice to Agent, amend, modify, alter or change the terms thereof
so long as any such amendment, modification, alteration or change does not
result in terms that are more burdensome or less favorable than the terms of
such Indebtedness as in effect on the date hereof as determined by Agent in good
faith, or (B) redeem, retire, defease, purchase or otherwise acquire such
Indebtedness, or set aside or otherwise deposit or invest any sums for such
purpose, except as permitted in the immediately preceding clause (ii) or
pursuant to Refinancing Indebtedness to the extent permitted by Section 9.9(h)
hereof, and
(iv) Borrower shall furnish to Agent all material notices or
demands in connection with such Indebtedness either received by Borrower or on
its behalf promptly after the receipt thereof, or sent by Borrower or on its
behalf concurrently with the sending thereof, as the case may be.
9.10 LOANS, INVESTMENTS, ETC. Borrower shall not, and shall not permit
any Subsidiary of Borrower to, directly or indirectly, make any loans or advance
money or property to any person, or invest in (by capital contribution, dividend
or otherwise) or purchase or repurchase the Capital Stock or Indebtedness or all
or a substantial part of the assets or property of any person, or form or
acquire any Subsidiaries, or agree to do any of the foregoing, EXCEPT:
(a) the endorsement of instruments for collection or deposit in the
ordinary course of business;
(b) investments in cash or Cash Equivalents; PROVIDED, THAT, (i) no
Loans are then outstanding and (ii) the terms and conditions of Section 5.2
hereof shall have been satisfied with respect to the deposit account, investment
account or other account in which such cash or Cash Equivalents are held;
(c) the existing equity investments of Borrower as of the date
hereof in its Subsidiaries, PROVIDED, THAT, Borrower shall not have any further
obligations or liabilities to make any capital contributions or other additional
investments or other payments to or in or for the benefit of any of such
Subsidiaries;
(d) loans and advances by Borrower or any Subsidiary of Borrower to
officers, directors and other employees of Borrower or such Subsidiary not to
exceed the principal amount of $100,000 in the aggregate at any time outstanding
for: (i) reasonably and necessary work-related travel or other ordinary business
expenses to be incurred by such employee in connection with their work for
Borrower or such Subsidiary, as the case may be, and (ii) reasonable and
necessary relocation expenses of such employees (including home mortgage
financing for relocated employees);
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(e) stock or obligations issued to Borrower or any Subsidiary of
Borrower by any Person (or the representative of such Person) in respect of
Indebtedness of such Person owing to Borrower or such Subsidiary in connection
with the insolvency, bankruptcy, receivership or reorganization of such Person
or a composition or readjustment of the debts of such Person; PROVIDED, THAT,
the original of any such stock or instrument evidencing such obligations shall
be promptly delivered to Agent, upon Agent's request, together with such stock
power, assignment or endorsement by Borrower as Agent may request;
(f) obligations of account debtors arising from Accounts which are
past due evidenced by a promissory note made by such account debtor payable to
Borrower or any Subsidiary of Borrower; PROVIDED, THAT, promptly upon the
receipt of the original of any such promissory note by Borrower or such
Subsidiary, such promissory note shall be endorsed to the order of Agent by
Borrower or such Subsidiary and promptly delivered to Agent as so endorsed;
(g) loans of money or property (other than Collateral), after the
date hereof by Borrower or any Subsidiary of Borrower to any Person other than
an existing Affiliate of Borrower as of the date hereof, including non-cash
consideration received by Borrower or such Subsidiary in connection with the
sale of any of its assets to the extent otherwise permitted under Section 9.7
hereof, or investments after the date hereof by Borrower or any Subsidiary of
Borrower by capital contribution in any Person other than an existing Affiliate
of Borrower or such Subsidiary as of the date hereof, or the formation or
acquisition after the date hereof by Borrower or any Subsidiary of Borrower of a
Subsidiary organized under the laws of a State of the United States after the
date hereof; PROVIDED, THAT, as to any such loans or investments, or the
formation or acquisition of any such Subsidiary, each of the following
conditions shall be satisfied:
(i) as of the date of any such loan or investment, or the
formation or acquisition of such Subsidiary or any payments in connection with
the formation or acquisition of such Subsidiary, and in each case after giving
effect thereto, no Default or Event of Default shall exist or have occurred and
be continuing,
(ii) as of the date of any such loan or investment, or the
formation or acquisition of such Subsidiary or any payments in connection with
the formation or acquisition of such Subsidiary, and in each case after giving
effect thereto, the aggregate amount of the Congress Excess Availability shall
have been not less than $10,000,000 for each of the immediately preceding thirty
(30) consecutive days and as of the date of any such loan or investment or
formation or acquisition or any payment in connection therewith and after giving
effect thereto, the aggregate amount of the Congress Excess Availability shall
be not less than $10,000,000,
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(iii) the Person receiving such loan or investment or the
Subsidiary formed or acquired, as the case may be, shall be engaged in a
business related, ancillary or complimentary to the business of Borrower
permitted in this Agreement,
(iv) in the case of loans, the Indebtedness of such Person
to Borrower or a Subsidiary arising pursuant to such loan, if evidenced by a
note shall be evidenced by a single original promissory note issued by such
Person payable to Borrower or such Subsidiary, which shall evidence a valid and
legally enforceable Indebtedness of Person to Borrower or such Subsidiary but,
unless such note is made by a Subsidiary, unconditionally owing to Borrower or
such Subsidiary, without offset, defense or counterclaim of any kind, nature or
description whatsoever, and the original of such promissory note issued by such
Person to Borrower or such Subsidiary shall be delivered to, and held by, Agent
as part of the Collateral, accompanied by such instruments of transfer or
assignment duly executed in blank as Agent may specify, and
(v) Agent shall have received (A) not less than ten (10)
Business Days' prior written notice thereof setting forth in reasonable detail
the nature and terms thereof, (B) true, correct and complete copies of all
agreements, documents and instruments relating thereto and (C) such other
information with respect thereto as Agent may reasonably request;
(h) the loans and advances set forth on Schedule 9.10 to the
Information Certificate; PROVIDED, THAT, as to such loans and advances, (i)
Borrower shall not, directly or indirectly, amend, modify, alter or change the
terms of such loans and advances or any agreement, document or instrument
related thereto and (ii) Borrower shall furnish to Agent all material notices or
demands in connection with such loans and advances either received by Borrower
or on its behalf, promptly after the receipt thereof, or sent by Borrower or on
its behalf, concurrently with the sending thereof, as the case may be;
(i) investments consisting of non-cash consideration received by
Borrower or any of its Subsidiaries in connection with any asset sale to the
extent permitted by Section 9.7 hereof;
(j) Hedge Agreements to the extent permitted by Section 9.9 hereof;
and
(k) intercompany loans and advances between or among Borrower and
its Subsidiaries that are permitted to be formed or acquired pursuant to Section
9.7(c) hereof.
9.11 DIVIDENDS AND REDEMPTIONS. Borrower shall not, and shall not permit
any Subsidiary of Borrower to, directly or indirectly, declare or pay any
dividends on account of any shares of class of any Capital Stock of Borrower or
of such Subsidiary now or hereafter outstanding, or set aside or otherwise
deposit or invest any sums for such purpose, or redeem, retire, defease,
purchase or otherwise acquire any shares of any class of Capital Stock (or set
aside or otherwise deposit or invest any sums for such purpose) for any
consideration or apply or set apart any sum, or make any other distribution (by
reduction of capital or otherwise) in respect of any such shares or agree to do
any of the foregoing, EXCEPT THAT:
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(a) Borrower may from time to time pay dividends in respect of its
outstanding shares of Capital Stock consisting of common stock or redeem,
retire, defease, purchase or otherwise acquire any outstanding shares of Capital
Stock consisting of its common stock; PROVIDED, THAT,
(i) Agent shall have received not less than ten (10) Business
Days' prior written notice thereof setting forth in reasonable detail the amount
of the dividend or the shares to be repurchased and the amount that Borrower
anticipates that it will be required to pay for such repurchase and such other
information with respect thereto as Agent may request,
(ii) as of the date of the payment for any such dividend,
redemption or repurchase and after giving effect thereto, no Default or Event of
Default shall exist or have occurred and be continuing,
(iii) as of the date of the payment for any such dividend,
redemption or repurchase and after giving effect thereto, the aggregate amount
of the Congress Excess Availability of Borrower shall have been not less than
$10,000,000 for each of the immediately preceding thirty (30) consecutive days
and the aggregate amount of the Congress Excess Availability of Borrower shall
be not less than $10,000,000,
(iv) such dividend, redemption or repurchase shall not violate
any law or regulation or the terms of any indenture, agreement or undertaking to
which Borrower or its property is bound, and
(v) such dividend, redemption or repurchase shall be paid out
of legally available funds therefor;
(b) Borrower and each Subsidiary of Borrower may declare and pay
such dividends or redeem, retire, defease, purchase or otherwise acquire any
shares of any class of Capital Stock for consideration in the form of shares of
common stock so long as after giving effect thereto no Change of Control or
other Default or Event of Default shall exist or occur and such dividend,
redemption, or repurchase shall not violate any law or regulation or the terms
of any indenture, agreement or undertaking to which Borrower or such Subsidiary
or its or their property are bound;
(c) any Subsidiary of Borrower may declare and pay dividends with
respect to any class of Capital Stock, in cash or other property (other than
property in or on which Agent has a security interest or lien), to Borrower or
any Subsidiary of Borrower or to any other Person that holds such class of
Capital Stock, so long as (i) any such dividends are paid using funds other than
proceeds of Loans or proceeds of Collateral, (ii) any such dividends are paid
ratably to the holders of such Capital Stock, (iii) as of the date of and after
giving effect to the declaration and payment of such dividend, no Default or
Event of Default shall exist or have occurred and be continuing, (iv) any such
dividends will not violate any law or regulation or the terms of any indenture,
agreement or undertaking to which such Subsidiary or its property is bound, (v)
any such dividends shall be paid out of legally available funds therefor, and
(vi) as to any such dividends by any such Subsidiaries that are not wholly-owned
Subsidiaries of Borrower, the aggregate amount of all such dividends that may be
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paid to the holders of any such Capital Stock of such Subsidiary other than
Borrower or a Subsidiary of Borrower may not exceed $250,000 in the aggregate;
and
(d) Borrower and each Subsidiary of Borrower may pay dividends to
the extent permitted in Section 9.12(b) hereof.
9.12 TRANSACTIONS WITH AFFILIATES. Borrower shall not, and shall not
permit any Subsidiary of Borrower to, directly or indirectly:
(a) purchase, acquire or lease any property from, or sell, transfer
or lease any property to or enter into any other transaction with any officer,
director or other Affiliate of Borrower or of such Subsidiary, except in the
ordinary course of and pursuant to the reasonable requirements of Borrower's or
such Subsidiary's business (as the case may be) and upon fair and reasonable
terms no less favorable to Borrower than Borrower (or to such Subsidiary than
such Subsidiary) would obtain in a comparable arm's length transaction with an
unaffiliated person; or
(b) make any payments (whether by dividend, loan or otherwise) of
management, consulting or other fees for management or any other services, or of
any Indebtedness owing to any officer, employee, shareholder, director or any
other Affiliate of Borrower or of such Subsidiary, EXCEPT (i) reasonable
compensation to officers, employees and directors for services rendered to
Borrower or such Subsidiary in the ordinary course of business and loans or
advances to the extent permitted by Section 9.10(d) hereof, (ii) [intentionally
omitted], (iii) the declaration and payment of dividends to the extent permitted
by Section 9.11 hereof, (iv) transactions by or among Borrower or any Subsidiary
of Borrower to the extent permitted by this Agreement, (v) issuance of stock
options to the extent permitted by Section 9.7(b) hereof and (vi) payments to
former shareholders of Borrower in connection with the Ghaznavi Settlement
Documents as in effect on the date hereof, so long as (A) no such payments will
be made using proceeds of Loans or proceeds of Collateral and (B) all such
payments shall be made in accordance with the terms and conditions of the
Ghaznavi Settlement Documents as in effect on the date hereof.
9.13 COMPLIANCE WITH ERISA. Borrower shall, and shall cause each
Subsidiary of Borrower and each ERISA Affiliate of Borrower and such Subsidiary,
to: (a) maintain each Benefit Plan in compliance in all material respects with
the applicable provisions of ERISA, the Code and other Federal and State law;
(b) cause each Benefit Plan which is qualified under Section 401(a) of the Code
to maintain such qualification; (c) not terminate any of such Benefit Plans so
as to incur any material liability to the PBGC; (d) not allow or suffer to exist
any prohibited transaction involving any of such Benefit Plans or any trust
created thereunder which would subject Borrower, such Subsidiary or such ERISA
Affiliate to a material tax or penalty or other liability on prohibited
transactions imposed under Section 4975 of the Code or ERISA; (e) make all
required contributions to any Benefit Plan which it is obligated to pay under
Section 302 of ERISA, Section 412 of the Code or the terms of such Benefit Plan;
(f) not allow or suffer to exist any accumulated funding deficiency, whether or
not waived, with respect to any such Benefit Plan; or (g) allow or suffer to
exist any occurrence of a reportable event or any other event or condition which
presents a material risk of termination by the PBGC of any such Benefit Plan
that is a single employer plan, which termination could result in any material
liability to the PBGC.
85
9.14 END OF FISCAL YEARS; FISCAL QUARTERS. Borrower shall, for financial
reporting purposes, cause its, and each of its Subsidiaries' (a) fiscal years to
end on December 31st of each year and (b) fiscal quarters to end on March 31,
June 30, September 30, and December 31 of each year.
9.15 CHANGE IN BUSINESS. Borrower shall not engage in any business other
than the business of Borrower on the date hereof and any business reasonably
related, ancillary or complimentary to the business in which Borrower is engaged
on the date hereof. Borrower shall not permit any Subsidiary of Borrower formed
or acquired after the date hereof to engage in any business other than the
business of such Subsidiary on the date of formation or acquisition and any
business reasonably related, ancillary or complimentary to the business in which
such Subsidiary is engaged on the date of formation or acquisition of such
Subsidiary.
9.16 LIMITATION OF RESTRICTIONS AFFECTING SUBSIDIARIES. Borrower shall
not, and shall not permit any Subsidiary of Borrower to, directly or indirectly,
create or otherwise cause or suffer to exist any encumbrance or restriction
which prohibits or limits the ability of any Subsidiary of Borrower or any
Subsidiary of such Subsidiary to (a) pay dividends or make other distributions
or pay any Indebtedness owed to Borrower or any Subsidiary of Borrower; (b) make
loans or advances to Borrower or any Subsidiary of Borrower, (c) transfer any of
its properties or assets to Borrower or any Subsidiary of Borrower; or (d)
create, incur, assume or suffer to exist any lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, other than
encumbrances and restrictions arising under (i) applicable law, (ii) this
Agreement, (iii) customary provisions restricting subletting or assignment of
any lease governing a leasehold interest of Borrower or any Subsidiary of
Borrower, (iv) customary restrictions on dispositions of real property interests
found in reciprocal easement agreements of Borrower or any Subsidiary of
Borrower, (v) any agreement relating to permitted Indebtedness incurred by a
Subsidiary of Borrower prior to the date on which such Subsidiary was acquired
by Borrower and outstanding on such acquisition date, and (vi) the extension or
continuation of contractual obligations in existence on the date hereof;
PROVIDED, THAT, any such encumbrances or restrictions contained in such
extension or continuation are no less favorable to Agent and Lenders than those
encumbrances and restrictions under or pursuant to the contractual obligations
so extended or continued.
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9.17 FIXED CHARGE COVERAGE RATIO. Borrower shall not, as to any fiscal
month commencing on January 1, 2005, permit the Fixed Charge Coverage Ratio of
Borrower commencing on the first day of each fiscal month of Borrower and ending
on the last day of the applicable fiscal month set forth below on a cumulative
twelve month year-to-date ("YTD") basis beginning January 1, 2005 through and
including December 31, 2005, to be less than the respective ratio set forth
below opposite such fiscal month end YTD period:
FISCAL MONTH END YTD FIXED CHARGE COVERAGE RATIO
------------------- ---------------------------
January 31, 2005 .14:1.0
February 28, 2005 .19:1.0
March 31, 2005 .29:1.0
April 30, 2005 .40:1.0
May 31, 2005 .50:1.0
June 30, 2005 .58:1.0
July 31, 2005 .66:1.0
August 31, 2005 .71:1.0
September 30, 2005 .76:1.0
October 31, 2005 .79:1.0
November 30, 2005 .80:1.0
December 31, 2005 .75:1.0
(b) Borrower shall not, as to any fiscal month commencing on
January 1, 2006 and each fiscal month thereafter, permit the Fixed Charge
Coverage Ratio of Borrower commencing on the first day of each fiscal month of
Borrowers and ending on the last day of the applicable fiscal month on a
cumulative twelve (12) month basis beginning January 1, 2006 and for each month
thereafter calculated based on the immediately preceding twelve (12) months, to
be less than 1.0:1.0 for such month fiscal end period.
9.18 LICENSE AGREEMENTS.
(a) Borrower shall, and shall cause each Subsidiary of Borrower to,
(i) promptly and faithfully observe and perform all of the material terms,
covenants, conditions and provisions of the material License Agreements to which
it is a party to be observed and performed by it, at the times set forth
therein, if any, (ii) not do, permit, suffer or refrain from doing anything that
could reasonably be expected to result in a default under or breach of any of
the terms of any material License Agreement, (iii) not cancel, surrender,
modify, amend, waive or release any material License Agreement in any material
respect or any term, provision or right of the licensee thereunder in any
87
material respect, or consent to or permit to occur any of the foregoing; EXCEPT,
THAT, subject to Section 9.18(b) below, Borrower or such Subsidiary may cancel,
surrender or release any material License Agreement in the ordinary course of
the business of Borrower or such Subsidiary; PROVIDED, THAT, Borrower or such
Subsidiary (as the case may be) shall give Agent not less than thirty (30) days
prior written notice of its intention to so cancel, surrender and release any
such material License Agreement and such cancellation, surrender or release does
not create a Material Adverse Effect, (iv) give Agent prompt written notice of
any material License Agreement entered into by Borrower or such Subsidiary after
the date hereof, together with a true, correct and complete copy thereof and
such other information with respect thereto as Agent may request, (v) give Agent
prompt written notice of any material breach of any obligation, or any default,
by any party under any material License Agreement, and deliver to Agent
(promptly upon the receipt thereof by Borrower or such Subsidiary in the case of
a notice to Borrower or such Subsidiary and concurrently with the sending
thereof in the case of a notice from Borrower or such Subsidiary) a copy of each
notice of default and every other notice and other communication received or
delivered by Borrower or such Subsidiary in connection with any material License
Agreement which relates to the right of Borrower or such Subsidiary to continue
to use the property subject to such License Agreement, and (vi) furnish to
Agent, promptly upon the request of Agent, such information and evidence as
Agent may reasonably require from time to time concerning the observance,
performance and compliance by Borrower or such Subsidiary or the other party or
parties thereto with the material terms, covenants or provisions of any material
License Agreement.
(b) Borrower will, and shall cause each Subsidiary of Borrower to,
either exercise any option to renew or extend the term of each material License
Agreement to which it or such Subsidiary is a party in such manner as will cause
the term of such material License Agreement to be effectively renewed or
extended for the period provided by such option and give prompt written notice
thereof to Agent or give Agent prior written notice that Borrower or such
Subsidiary does not intend to renew or extend the term of any such material
License Agreement or that the term thereof shall otherwise be expiring, not less
than sixty (60) days prior to the date of any such non-renewal or expiration. In
the event of the failure of Borrower or such Subsidiary to extend or renew any
material License Agreement to which it is a party, Agent shall have, and is
hereby granted, the irrevocable right and authority, at its option, to renew or
extend the term of such material License Agreement, whether in its own name and
behalf, or in the name and behalf of a designee or nominee of Agent or in the
name and behalf of Borrower or such Subsidiary, as Agent shall determine at any
time that an Event of Default shall exist or have occurred and be continuing.
Agent may, but shall not be required to, perform any or all of such obligations
of Borrower or such Subsidiary under any of the License Agreements, including,
but not limited to, the payment of any or all sums due from Borrower or such
Subsidiary thereunder. Any sums so paid by Agent shall constitute part of the
Obligations.
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9.19 [Intentionally Omitted]
9.20 COSTS AND EXPENSES. Borrower shall pay to Agent on demand all
costs, expenses, filing fees and taxes paid or payable or incurred by Agent in
connection with the preparation, negotiation, execution, delivery, recording,
administration, collection, liquidation, enforcement and defense of the
Obligations, Agent's rights in the Collateral, this Agreement, the other
Financing Agreements and all other documents related hereto or thereto,
including any amendments, supplements or consents which may hereafter be
contemplated (whether or not executed) or entered into in respect hereof and
thereof, including: (a) all costs and expenses of filing or recording (including
Uniform Commercial Code financing statement filing taxes and fees, documentary
taxes, intangibles taxes and fees, if applicable); (b) costs and expenses and
fees for insurance premiums, appraisal fees and search fees, costs and expenses
of remitting loan proceeds, collecting checks and other items of payment, and
establishing and maintaining the Blocked Accounts, together with Agent's
customary charges and fees with respect thereto; (c) costs and expenses of
preserving and protecting the Collateral; (d) costs and expenses paid or
incurred in connection with obtaining payment of the Obligations, enforcing the
security interests and liens of Agent or any Lender, selling or otherwise
realizing upon the Collateral, and otherwise enforcing the provisions of this
Agreement and the other Financing Agreements or defending any claims made or
threatened against Agent or any Lender arising out of the transactions
contemplated hereby and thereby (including preparations for and consultations
concerning any such matters all in accordance with the Financing Agreements);
(e) all out-of-pocket expenses and costs heretofore and from time to time
hereafter incurred by Agent during the course of periodic field examinations of
the Collateral and Borrower 's operations, plus a per diem charge at the then
standard rate for Agent's field examiners in the field and office (which rate as
of the date hereof is of $850 per person per day); and (f) the reasonable fees
and disbursements of counsel (including legal assistants) to Agent in connection
with any of the foregoing.
9.21 FURTHER ASSURANCES. At the request of Agent at any time and from
time to time, Borrower shall, and shall cause each Subsidiary of Borrower to, at
its expense, duly execute and deliver, or cause to be duly executed and
delivered, such further agreements, documents and instruments, and do or cause
to be done such further acts as may be necessary or proper to evidence, perfect,
maintain and enforce the security interests and the priority thereof in the
Collateral and to otherwise effectuate the provisions or purposes of this
Agreement or any of the other Financing Agreements. Agent may at any time and
from time to time request a certificate from an officer of Borrower representing
that all conditions precedent to the making of Loans contained herein are
satisfied. In the event of such request by Agent, Agent and Lenders may, at
Agent's option, cease to make any further Loans until Agent has received such
certificate and, in addition, Agent has determined that such conditions are
satisfied.
SECTION 10. EVENTS OF DEFAULT AND REMEDIES
------------------------------
10.1 EVENTS OF DEFAULT. The occurrence or existence of any one or more
of the following events are referred to herein individually as an "Event of
Default", and collectively as "Events of Default":
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(a) (i) Borrower fails to pay any of the Obligations within three
(3) days or (ii) Borrower fails to perform any of the covenants contained in
Sections 9.3, 9.4, 9.5, 9.6, 9.13, 9.16 9.18, 9.20 and 9.21 of this Agreement
and such failure shall continue for fifteen (15) days; PROVIDED, THAT, such
fifteen (15) day period shall not apply in the case of: (A) any failure to
observe any such covenant which is not capable of being cured at all or within
such fifteen (15) day period or which has been the subject of a prior failure
within a six (6) month period or (B) an intentional breach by Borrower of any
such covenant or (iii) Borrower fails to perform any of the terms, covenants,
conditions or provisions contained in this Agreement or any of the other
Financing Agreements other than those described in Sections 10.1(a)(i) and
10.1(a)(ii) hereof;
(b) any representation or warranty made by Borrower to Agent in
this Agreement, the other Financing Agreements or any other written agreement,
schedule, confirmatory assignment or certificate (including, without limitation,
any statement of fact made in any other written agreement, schedule,
confirmation, assignment or certificate) issued in connection with any Financing
Agreement or the transactions contemplated thereby shall when made or deemed
made be false or misleading in any material respect;
(c) any Guarantor revokes or terminates, or purports to revoke or
terminate, or fails to perform any of the terms, covenants, conditions or
provisions of any guarantee, endorsement or other agreement of such party in
favor of Agent or any Lender;
(d) any judgment for the payment of money is rendered against
Borrower or any Obligor in excess of $1,000,000 in any one case or in excess of
$2,500,000 in the aggregate (to the extent not covered by insurance where the
insurer has assumed responsibility in writing for such judgment) and shall
remain undischarged or unvacated for a period in excess of sixty (60) days or
execution shall at any time not be effectively stayed, or any judgment other
than for the payment of money, or injunction, attachment, garnishment or
execution is rendered against Borrower or any Guarantor or any of the Collateral
having a value in excess of $1,000,000;
(e) Borrower or any Guarantor makes an assignment for the benefit
of creditors, makes or sends notice of a bulk transfer or calls a meeting of its
creditors or principal creditors in connection with a moratorium or adjustment
of the Indebtedness due to them;
(f) a case or proceeding under the bankruptcy laws of the United
States of America now or hereafter in effect or under any insolvency,
reorganization, receivership, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction now or hereafter in effect (whether at law or
in equity) is filed against Borrower or any Guarantor or all or any part of its
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properties and such petition or application is not dismissed within sixty (60)
days after the date of its filing or Borrower or any Guarantor shall file any
answer admitting or not contesting such petition or application or indicates its
consent to, acquiescence in or approval of, any such action or proceeding or the
relief requested is granted sooner;
(g) a case or proceeding under the bankruptcy laws of the United
States of America now or hereafter in effect or under any insolvency,
reorganization, receivership, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction now or hereafter in effect (whether at a law
or equity) is filed by Borrower or any Guarantor or for all or any part of its
property;
(h) (A) any default in respect of any Indebtedness of Borrower or
any Guarantor (other than Indebtedness owing to Agent and Lenders hereunder), in
any case in an amount in excess of $5,000,000, or (B) any default by Borrower
under the Plan of Reorganization, the Confirmation Order, the Note Agreements,
the Equipment Financing Agreements or the PBGC Settlement Agreements, or (C) any
default by Borrower or any Guarantor under any Material Contract, which default,
in any case under the immediately preceding clause (A), (B) or (C) continues for
more than the applicable cure period, if any, with respect thereto or is not
waived in writing by the other parties thereto;
(i) any material provision hereof or of any of the other Financing
Agreements shall for any reason cease to be valid, binding and enforceable with
respect to any party hereto or thereto (other than Agent or Lender) in
accordance with its terms, or any such party shall challenge the enforceability
hereof or thereof, or shall assert in writing, or take any action or fail to
take any action based on the assertion that any provision hereof or of any of
the other Financing Agreements has ceased to be or is otherwise not valid,
binding or enforceable in accordance with its terms, or any security interest
provided for herein or in any of the other Financing Agreements shall cease to
be a valid and perfected first priority security interest in any of the
Collateral purported to be subject thereto (except as otherwise permitted herein
or therein);
(j) an ERISA Event shall occur which results in or could reasonably
be expected to result in liability of Borrower in an aggregate amount in excess
of $5,000,000;
(k) any Change of Control;
(l) the indictment by any Governmental Authority, or as Agent may
reasonably and in good faith determine, the threatened indictment by any
Governmental Authority of Borrower or any Guarantor of which Borrower, such
Guarantor or Agent receives notice, in either case, as to which there is a
reasonable possibility of an adverse determination, in the good faith
determination of Agent, under any criminal statute, or commencement or
threatened commencement of criminal or civil proceedings against Borrower or any
Guarantor , pursuant to which statute or proceedings the penalties or remedies
sought or available include forfeiture of (i) any of the Collateral having a
value in excess of $500,000 or (ii) any other property of Borrower which is
necessary or material to the conduct of its business;
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(m) there shall be an act, condition or event that has a Material
Adverse Effect after the date hereof; or
(n) there shall be an event of default under any of the other
Financing Agreements.
10.2 REMEDIES.
(a) At any time an Event of Default exists or has occurred and is
continuing, Agent and Lenders shall have all rights and remedies provided in
this Agreement, the other Financing Agreements, the UCC and other applicable
law, all of which rights and remedies may be exercised without notice to or
consent by Borrower or any Guarantor, except as such notice or consent is
expressly provided for hereunder or required by applicable law. All rights,
remedies and powers granted to Agent and Lenders hereunder, under any of the
other Financing Agreements, the UCC or other applicable law, are cumulative, not
exclusive and enforceable, in Agent's discretion, alternatively, successively,
or concurrently on any one or more occasions, and shall include, without
limitation, the right to apply to a court of equity for an injunction to
restrain a breach or threatened breach by Borrower or any Guarantor of this
Agreement or any of the other Financing Agreements. Subject to Section 12
hereof, Agent may, and at the direction of the Required Lenders shall, at any
time or times, proceed directly against Borrower or any Guarantor to collect the
Obligations without prior recourse to the Collateral.
(b) Without limiting the foregoing, at any time an Event of Default
exists or has occurred and is continuing, Agent may, in its discretion, and upon
the direction of the Required Lenders, shall (i) accelerate the payment of all
Obligations and demand immediate payment thereof to Agent upon notice to
Borrower, for itself and the ratable benefit of Lenders (PROVIDED, THAT, upon
the occurrence of any Event of Default described in Sections 10.1(f) and
10.1(g), all Obligations shall automatically become immediately due and
payable), (ii) with or without judicial process or the aid or assistance of
others, enter upon any premises on or in which any of the Collateral may be
located and take possession of the Collateral or complete processing,
manufacturing and repair of all or any portion of the Collateral, (iii) require
Borrower or any Obligor, at Borrower's expense, to assemble and make available
to Agent any part or all of the Collateral at any place and time designated by
Agent, (iv) collect, foreclose, receive, appropriate, setoff and realize upon
any and all Collateral, (v) remove any or all of the Collateral from any
premises on or in which the same may be located for the purpose of effecting the
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sale, foreclosure or other disposition thereof or for any other purpose, (vi)
sell, lease, transfer, assign, deliver or otherwise dispose of any and all
Collateral (including entering into contracts with respect thereto, public or
private sales at any exchange, broker's board, at any office of Agent or
elsewhere) at such prices or terms as Agent may deem reasonable, for cash, upon
credit or for future delivery, with the Agent having the right to purchase the
whole or any part of the Collateral at any such public sale, all of the
foregoing being free from any right or equity of redemption of Borrower or any
Obligor, which right or equity of redemption is hereby expressly waived and
released by Borrower and Obligors and/or (vii) terminate this Agreement. If any
of the Collateral is sold or leased by Agent upon credit terms or for future
delivery, the Obligations shall not be reduced as a result thereof until payment
therefor is finally collected by Agent. If notice of disposition of Collateral
is required by law, ten (10) days prior notice by Agent to Borrower designating
the time and place of any public sale or the time after which any private sale
or other intended disposition of Collateral is to be made, shall be deemed to be
reasonable notice thereof and Borrower waives any other notice to the extent
permitted by applicable law. In the event Agent institutes an action to recover
any Collateral or seeks recovery of any Collateral by way of prejudgment remedy,
Borrower waives the posting of any bond which might otherwise be required.
(c) At any time or times that an Event of Default exists or has
occurred and is continuing, Agent may, in its discretion, and upon the direction
of the Required Lenders, Agent shall, enforce the rights of Borrower or any
Obligor against any account debtor, secondary obligor or other obligor in
respect of any of the Accounts or other Receivables. Without limiting the
generality of the foregoing, Agent may, in its discretion, and upon the
direction of the Required Lenders, Agent shall (subject to the Intercreditor
Agreement to the extent applicable), at such time or times (i) notify any or all
account debtors, secondary obligors or other obligors in respect thereof that
the Receivables have been assigned to Agent and that Agent has a security
interest therein and Agent may direct any or all account debtors, secondary
obligors and other obligors to make payment of Receivables directly to Agent,
(ii) extend the time of payment of, compromise, settle or adjust for cash,
credit, return of merchandise or otherwise, and upon any terms or conditions,
any and all Receivables or other obligations included in the Collateral and
thereby discharge or release the account debtor or any secondary obligors or
other obligors in respect thereof without affecting any of the Obligations,
(iii) demand, collect or enforce payment of any Receivables or such other
obligations, but without any duty to do so, and Agent and Lenders shall not be
liable for any failure to collect or enforce the payment thereof nor for the
negligence of its agents or attorneys with respect thereto and (iv) take
whatever other action Agent may deem necessary or desirable for the protection
of its interests and the interests of Lenders. At any time that an Event of
Default exists or has occurred and is continuing, at Agent's request, all
invoices and statements sent to any account debtor shall state that the Accounts
and such other obligations have been assigned to Agent and are payable directly
and only to Agent and Borrower shall deliver to Agent such originals of
documents evidencing the sale and delivery of goods or the performance of
services giving rise to any Accounts as Agent may require. In the event any
account debtor returns Inventory when an Event of Default exists or has occurred
and is continuing, Borrower shall, upon Agent's request, hold the returned
Inventory in trust for Agent, segregate all returned Inventory from all of its
other property, dispose of the returned Inventory solely according to Agent's
instructions, and not issue any credits, discounts or allowances with respect
thereto without Agent's prior written consent.
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(d) To the extent that applicable law imposes duties on Agent or
any Lender to exercise remedies in a commercially reasonable manner (which
duties cannot be waived under such law), Borrower acknowledges and agrees that
it is not commercially unreasonable for Agent or any Lender (i) to fail to incur
expenses reasonably deemed significant by Agent or any Lender to prepare
Collateral for disposition or otherwise to complete raw material or work in
process into finished goods or other finished products for disposition, (ii) 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 consents of any
Governmental Authority or other third party for the collection or disposition of
Collateral to be collected or disposed of, (iii) to fail to exercise collection
remedies against account debtors, secondary obligors or other persons obligated
on Collateral or to remove liens or encumbrances on or any adverse claims
against Collateral, (iv) 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, (v) to advertise
dispositions of Collateral through publications or media of general circulation,
whether or not the Collateral is of a specialized nature, (vi) to contact other
persons, whether or not in the same business as Borrower, for expressions of
interest in acquiring all or any portion of the Collateral, (vii) to hire one or
more professional auctioneers to assist in the disposition of Collateral,
whether or not the collateral is of a specialized nature, (viii) 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 capability of
doing so, or that match buyers and sellers of assets, (ix) to dispose of assets
in wholesale rather than retail markets, (x) to disclaim disposition warranties,
(xi) to purchase insurance or credit enhancements to insure Agent or Lenders
against risks of loss, collection or disposition of Collateral or to provide to
Agent or Lenders a guaranteed return from the collection or disposition of
Collateral, or (xii) 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. Borrower acknowledges that the purpose of this Section is to provide
non-exhaustive indications of what actions or omissions by Agent or any Lender
would not be commercially unreasonable in the exercise by Agent or any Lender of
remedies against the Collateral and that other actions or omissions by Agent or
any Lender shall not be deemed commercially unreasonable solely on account of
not being indicated in this Section. Without limitation of the foregoing,
nothing contained in this Section shall be construed to grant any rights to
Borrower or to impose any duties on Agent or Lenders that would not have been
granted or imposed by this Agreement or by applicable law in the absence of this
Section.
(e) For the purpose of enabling Agent to exercise the rights and
remedies hereunder, Borrower hereby grants to Agent, to the extent assignable,
an irrevocable, non-exclusive license (exercisable at any time an Event of
Default shall exist or have occurred and for so long as the same is continuing)
without payment of royalty or other compensation to Borrower, to use, assign,
license or sublicense any of the trademarks, service-marks, trade names,
business names, trade styles, designs, logos and other source of business
identifiers and other Intellectual Property and general intangibles now owned or
hereafter acquired by Borrower, wherever the same maybe located, including in
such license reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer programs used for the compilation
or printout thereof.
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(f) Agent may apply the cash proceeds of Collateral actually
received by Agent from any sale, lease, foreclosure or other disposition of the
Collateral to payment of the Obligations, in whole or in part and in such order
as Agent may elect, whether or not then due. Borrower and Obligors shall remain
liable to Agent and Lenders for the payment of any deficiency with interest at
the highest rate provided for herein and all costs and expenses of collection or
enforcement, including reasonable attorneys' fees and expenses.
(g) Without limiting the foregoing, upon the occurrence and during
the continuance of a Default or an Event of Default, (i) Agent and Lenders may,
at Agent's option, and upon the occurrence and during the continuance of an
Event of Default, at the direction of the Required Lenders, Agent and Lenders
shall, without notice, (A) cease making Loans or reduce the lending formulas or
amounts of Loans available to Borrower and/or (B) terminate any provision of
this Agreement providing for any future Loans to be made by Agent and Lenders to
Borrower, and (ii) Agent may, at its option, establish such reserves against the
amount of the Maximum Credit as Agent determines without limitation or
restriction, notwithstanding anything to the contrary provided herein.
SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW
------------------------------------------------------------
11.1 GOVERNING LAW; CHOICE OF FORUM; SERVICE OF PROCESS; JURY TRIAL
WAIVER.
(a) The validity, interpretation and enforcement of this Agreement
and the other Financing Agreements and any dispute arising out of the
relationship between the parties hereto, whether in contract, tort, equity or
otherwise, shall be governed by the internal laws of the State of New York but
excluding any principles of conflicts of law or other rule of law that would
cause the application of the law of any jurisdiction other than the laws of the
State of New York.
(b) Borrower, Agent and Lenders irrevocably consent and submit to
the non-exclusive jurisdiction of the courts of the State of New York in the
County of New York or of the United States District Court for the Southern
District of New York, whichever Agent may elect, and waive any objection based
on venue or FORUM NON CONVENIENS with respect to any action instituted therein
arising under this Agreement or any of the other Financing Agreements or in any
way connected with or related or incidental to the dealings of the parties
hereto in respect of this Agreement or any of the other Financing Agreements or
the transactions related hereto or thereto, in each case whether now existing or
hereafter arising, and whether in contract, tort, equity or otherwise, and agree
that any dispute with respect to any such matters shall be heard only in the
courts described above (except that Agent and Lenders shall have the right to
bring any action or proceeding against Borrower or any Obligor or its or their
property in the courts of any other jurisdiction which Agent deems necessary or
appropriate in order to realize on the Collateral or to otherwise enforce its
rights against Borrower or any Obligor or its or their property).
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(c) Borrower hereby waives personal service of any and all process
upon it and consents that all such service of process may be made by certified
mail (return receipt requested) directed to its address set forth herein 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. mails, or, at Agent's option, by
service upon Borrower in any other manner provided under the rules of any such
courts. Within thirty (30) days after such service, Borrower shall appear in
answer, respond or move in respect of such process, failing which Borrower shall
be deemed in default and judgment may be entered by Agent against Borrower for
the amount of the claim and other relief requested.
(d) BORROWER, AGENT AND LENDERS EACH HEREBY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER
THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN
RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE
TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. BORROWER,
AGENT AND LENDERS EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND
THAT BORROWER, AGENT OR ANY LENDER MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF
THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(e) Agent and Lenders shall not have any liability to Borrower or
any Obligor (whether in tort, contract, equity or otherwise) for losses suffered
by Borrower in connection with, arising out of, or in any way related to the
transactions or relationships contemplated by this Agreement, or any act,
omission or event occurring in connection herewith, unless it is determined by a
final and non-appealable judgment or court order binding on Agent and such
Lender, that the losses were the result of acts or omissions constituting gross
negligence or willful misconduct. In any such litigation, Agent and Lenders
shall be entitled to the benefit of the rebuttable presumption that it acted in
good faith and with the exercise of ordinary care in the performance by it of
the terms of this Agreement. Borrower: (i) certifies that neither Agent, any
Lender nor any representative, agent or attorney acting for or on behalf of
Agent or any Lender has represented, expressly or otherwise, that Agent and
Lenders would not, in the event of litigation, seek to enforce any of the
waivers provided for in this Agreement or any of the other Financing Agreements
and (ii) acknowledges that in entering into this Agreement and the other
Financing Agreements, Agent and Lenders are relying upon, among other things,
the waivers and certifications set forth in this Section 11.1 and elsewhere
herein and therein.
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11.2 WAIVER OF NOTICES. Borrower hereby expressly waives demand,
presentment, protest and notice of protest and notice of dishonor with respect
to any and all instruments and chattel paper, included in or evidencing any of
the Obligations or the Collateral, and any and all other demands and notices of
any kind or nature whatsoever with respect to the Obligations, the Collateral
and this Agreement, except such as are expressly provided for herein. No notice
to or demand on Borrower which Agent or any Lender may elect to give shall
entitle Borrower to any other or further notice or demand in the same, similar
or other circumstances.
11.3 AMENDMENTS AND WAIVERS.
(a) Neither this Agreement nor any other Financing Agreement nor
any terms hereof or thereof may be amended, waived, discharged or terminated
unless such amendment, waiver, discharge or termination is in writing signed by
Agent and the Required Lenders or at Agent's option, by Agent with the
authorization of the Required Lenders, and as to amendments to any of the
Financing Agreements (other than with respect to any provision of Section 12
hereof), by Borrower; EXCEPT, THAT, no such amendment, waiver, discharge or
termination shall:
(i) reduce the interest rate or any fees or extend the time
of payment of principal, interest or any fees or reduce the principal amount of
any Loan, in each case without the consent of each Lender directly affected
thereby,
(ii) increase the Commitment of any Lender over the amount
thereof then in effect or provided hereunder, in each case without the consent
of the Lender directly affected thereby,
(iii) release any Collateral (except as expressly required
hereunder or under any of the other Financing Agreements or applicable law and
except as permitted under Section 12.11(b) hereof), without the consent of Agent
and all of Lenders,
(iv) amend the definition of Required Lenders, without the
consent of Agent and all of Lenders,
(v) consent to the assignment or transfer by Borrower or any
Guarantor of any of their rights and obligations under this Agreement, without
the consent of Agent and all of Lenders,
(vi) amend, modify or waive any terms of this Section 11.3,
12.8 or Section 12.11 hereof, without the consent of Agent and all of Lenders,
or
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(vii) increase the amount of the Maximum Credit, without the
consent of Agent and all of Lenders.
(b) Agent and Lenders shall not, by any act, delay, omission or
otherwise be deemed to have expressly or impliedly waived any of its or their
rights, powers and/or remedies unless such waiver shall be in writing and signed
as provided herein. Any such waiver shall be enforceable only to the extent
specifically set forth therein. A waiver by Agent or any Lender of any right,
power and/or remedy on any one occasion shall not be construed as a bar to or
waiver of any such right, power and/or remedy which Agent or any Lender would
otherwise have on any future occasion, whether similar in kind or otherwise.
(c) Notwithstanding anything to the contrary contained in Section
11.3(a) hereof, in connection with any amendment, waiver, discharge or
termination, in the event that any Lender whose consent thereto is required
shall fail to consent or fail to consent in a timely manner (such Lender being
referred to herein as a "Non-Consenting Lender"), but the consent of any other
Lenders to such amendment, waiver, discharge or termination that is required are
obtained, if any, then Xxxxxxxxx shall have the right, but not the obligation,
at any time thereafter, and upon the exercise by Xxxxxxxxx of such right, such
Non-Consenting Lender shall have the obligation, to sell, assign and transfer to
Xxxxxxxxx or such Eligible Transferee as Xxxxxxxxx may specify, the Commitment
of such Non-Consenting Lender and all rights and interests of such
Non-Consenting Lender pursuant thereto. Xxxxxxxxx shall provide the
Non-Consenting Lender with prior written notice of its intent to exercise its
right under this Section, which notice shall specify on date on which such
purchase and sale shall occur. Such purchase and sale shall be pursuant to the
terms of an Assignment and Acceptance (whether or not executed by the
Non-Consenting Lender), except that on the date of such purchase and sale,
Xxxxxxxxx, or such Eligible Transferee specified by Xxxxxxxxx, shall pay to the
Non-Consenting Lender the amount equal to: (i) the principal balance of the
Loans held by the Non-Consenting Lender outstanding as of the close of business
on the business day immediately preceding the effective date of such purchase
and sale, plus (ii) amounts accrued and unpaid in respect of interest and fees
payable to the Non-Consenting Lender to the effective date of the purchase (but
in no event shall the Non-Consenting Lender be deemed entitled to any early
termination fee). Such purchase and sale shall be effective on the date of the
payment of such amount to the Non-Consenting Lender and the Commitment of the
Non-Consenting Lender shall terminate on such date.
(d) The consent of Agent shall be required for any amendment,
waiver or consent affecting the rights or duties of Agent hereunder or under any
of the other Financing Agreements, in addition to the consent of the Lenders
otherwise required by this Section .
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11.4 WAIVER OF COUNTERCLAIMS. Borrower waives all rights to interpose
any claims, deductions, setoffs or counterclaims of any nature (other than
compulsory counterclaims or other claims that will be irrevocably barred if not
asserted in the same action or proceeding) in any action or proceeding with
respect to this Agreement, the Obligations, the Collateral or any matter arising
therefrom or relating hereto or thereto.
11.5 INDEMNIFICATION. Borrower shall indemnify and hold Agent and each
Lender, and its officers, directors, agents, employees, advisors and counsel and
their respective Affiliates (each such person being an "Indemnitee"), harmless
from and against any and all losses, claims, damages, liabilities, costs or
expenses (including attorneys' fees and expenses) imposed on, incurred by or
asserted against any of them in connection with any litigation, investigation,
claim or proceeding commenced or threatened related to the negotiation,
preparation, execution, delivery, enforcement, performance or administration of
this Agreement, any other Financing Agreements, or any undertaking or proceeding
related to any of the transactions contemplated hereby or any act, omission,
event or transaction related or attendant thereto, including amounts paid in
settlement, court costs, and the reasonable fees and expenses of counsel except
that Borrower shall not have any obligation under this Section 11.5 to indemnify
an Indemnitee with respect to a matter covered hereby resulting from the gross
negligence or wilful misconduct of such Indemnitee as determined pursuant to a
final, non-appealable order of a court of competent jurisdiction (but without
limiting the obligations of Borrower as to any other Indemnitee). To the extent
that the undertaking to indemnify, pay and hold harmless set forth in this
Section may be unenforceable because it violates any law or public policy,
Borrower shall pay the maximum portion which it is permitted to pay under
applicable law to Agent and Lenders in satisfaction of indemnified matters under
this Section. To the extent permitted by applicable law, Borrower shall not
assert, and Borrower hereby waives any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement, any of the other Financing Agreements or any
undertaking or transaction contemplated hereby. All amounts due under this
Section shall be payable upon demand. The foregoing indemnity shall survive the
payment of the Obligations and the termination or non-renewal of this Agreement.
SECTION 12. THE AGENT
---------
12.1 APPOINTMENT, POWERS AND IMMUNITIES. Each Lender irrevocably
designates, appoints and authorizes Xxxxxxxxx to act as Agent hereunder and
under the other Financing Agreements with such powers as are specifically
delegated to Agent by the terms of this Agreement and of the other Financing
Agreements, together with such other powers as are reasonably incidental
thereto. Agent (a) shall have no duties or responsibilities except those
expressly set forth in this Agreement and in the other Financing Agreements, and
shall not by reason of this Agreement or any other Financing Agreement be a
trustee or fiduciary for any Lender; (b) shall not be responsible to Lenders for
any recitals, statements, representations or warranties contained in this
Agreement or in any of the other Financing Agreements, or in any certificate or
other document referred to or provided for in, or received by any of them under,
this Agreement or any other Financing Agreement, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Financing Agreement or any other document referred to or provided for
herein or therein or for any failure by Borrower or any Obligor or any other
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Person to perform any of its obligations hereunder or thereunder; and (c) shall
not be responsible to Lenders for any action taken or omitted to be taken by it
hereunder or under any other Financing Agreement or under any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith, except for its own gross negligence or willful misconduct
as determined by a final non-appealable judgment of a court of competent
jurisdiction. Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith. Agent may deem and treat the
payee of any note as the holder thereof for all purposes hereof unless and until
the assignment thereof pursuant to an agreement (if and to the extent permitted
herein) in form and substance satisfactory to Agent shall have been delivered to
and acknowledged by Agent.
12.2 RELIANCE BY AGENT. Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telecopy, telex, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by Agent. As to any matters not expressly
provided for by this Agreement or any other Financing Agreement, Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
or thereunder in accordance with instructions given by the Required Lenders or
all of Lenders as is required in such circumstance, and such instructions of
such Agents and any action taken or failure to act pursuant thereto shall be
binding on all Lenders.
12.3 EVENTS OF DEFAULT.
(a) Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or an Event of Default or other failure of a condition
precedent to the Loans hereunder, unless and until Agent has received written
notice from a Lender, or Borrower specifying such Event of Default or any
unfulfilled condition precedent, and stating that such notice is a "Notice of
Default or Failure of Condition". In the event that Agent receives such a Notice
of Default or Failure of Condition, Agent shall give prompt notice thereof to
the Lenders. Agent shall (subject to Section 12.7 hereof) take such action with
respect to any such Event of Default or failure of condition precedent as shall
be directed by the Required Lenders; PROVIDED, THAT, unless and until Agent
shall have received such directions, Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to or by
reason of such Event of Default or failure of condition precedent, as it shall
deem advisable in the best interest of Lenders. Without limiting the foregoing,
and notwithstanding the existence or occurrence and continuance of an Event of
Default or any other failure to satisfy any of the conditions precedent set
forth in Section 4 of this Agreement to the contrary, Agent may (subject to
Section 12.8 hereof), but shall have no obligation to, continue to make Loans
for the ratable account and risk of Lenders from time to time if Agent believes
making such Loans is in the best interests of Lenders.
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(b) Except with the prior written consent of Agent, no Lender may
assert or exercise any enforcement right or remedy in respect of the Loans or
other Obligations, as against Borrower or any Obligor or any of the Collateral
or other property of Borrower or any Obligor.
12.4 XXXXXXXXX IN ITS INDIVIDUAL CAPACITY. With respect to its
Commitment and the Loans made by it (and any successor acting as Agent), so long
as Xxxxxxxxx shall be a Lender hereunder, it shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not acting as Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include Xxxxxxxxx in its individual capacity as
Lender hereunder. Xxxxxxxxx (and any successor acting as Agent) and its
Affiliates may (without having to account therefor to any Lender) lend money to,
make investments in and generally engage in any kind of business with Borrower
(and any of its Subsidiaries or Affiliates) as if it were not acting as Agent,
and Xxxxxxxxx and its Affiliates may accept fees and other consideration from
Borrower or any Obligor and any of its Subsidiaries and Affiliates for services
in connection with this Agreement or otherwise without having to account for the
same to Lenders.
12.5 INDEMNIFICATION. Lenders agree to indemnify Agent (to the extent
not reimbursed by Borrower hereunder and without limiting any obligations of
Borrower hereunder) ratably, in accordance with their Pro Rata Shares, for any
and all claims of any kind and nature whatsoever that may be imposed on,
incurred by or asserted against Agent (including by any Lender) arising out of
or by reason of any investigation in or in any way relating to or arising out of
this Agreement or any other Financing Agreement or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including the costs and expenses that Agent is
obligated to pay hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, 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 party to be indemnified as determined by
a final non-appealable judgment of a court of competent jurisdiction. The
foregoing indemnity shall survive the payment of the Obligations and the
termination or non-renewal of this Agreement.
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12.6 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender agrees that
it has, independently and without reliance on Agent or other Lender, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis of Borrower and Obligors and has made its own decision to enter
into this Agreement and that it will, independently and without reliance upon
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 analysis and
decisions in taking or not taking action under this Agreement or any of the
other Financing Agreements. Agent shall not be required to keep itself informed
as to the performance or observance by Borrower or Obligor of any term or
provision of this Agreement or any of the other Financing Agreements or any
other document referred to or provided for herein or therein or to inspect the
properties or books of Borrower or any Obligor. Agent will use reasonable
efforts to provide Lenders with any information received by Agent from Borrower
or any Obligor which is required to be provided to Lenders hereunder and with a
copy of any Notice of Default or Failure of Condition received by Agent from
Borrower or any Lender; PROVIDED, THAT, Agent shall not be liable to any Lender
for any failure to do so, except to the extent that such failure is attributable
to Agent's own gross negligence or willful misconduct as determined by a final
non-appealable judgment of a court of competent jurisdiction. Except for
notices, reports and other documents expressly required to be furnished to
Lenders by Agent hereunder, Agent shall not have any duty or responsibility to
provide any Lender with any other credit or other information concerning the
affairs, financial condition or business of Borrower or any Obligor that may
come into the possession of Agent.
12.7 FAILURE TO ACT. Except for action expressly required of Agent
hereunder and under the other Financing Agreements, Agent shall in all cases be
fully justified in failing or refusing to act hereunder and thereunder unless it
shall receive further assurances to its satisfaction from Lenders of their
indemnification obligations under Section 12.5 hereof against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.
12.8 ADDITIONAL LOANS. Agent shall not make any Loans to Borrower on
behalf of Lenders intentionally and with actual knowledge that such Loans would
cause the total principal amount of the Loans to exceed the Maximum Credit.
12.9 CONCERNING THE COLLATERAL AND THE RELATED FINANCING AGREEMENTS.
Each Lender authorizes and directs Agent to enter into this Agreement and the
other Financing Agreements. Each Lender agrees that any action taken by Agent or
Required Lenders in accordance with the terms of this Agreement or the other
Financing Agreements and the exercise by Agent or Required Lenders 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.
12.10 [Intentionally Omitted]
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12.11 COLLATERAL MATTERS.
(a) Agent may, at its option, from time to time, at any time on or
after an Event of Default and for so long as the same is continuing or upon any
other failure of a condition precedent to the Loans hereunder, make such
disbursements and advances ("Special Agent Advances") which Agent, in its good
faith discretion, deems necessary or desirable either (i) to preserve or protect
the Collateral or any portion thereof or (ii) to enhance the likelihood or
maximize the amount of repayment by Borrower of the Loans and other Obligations,
provided that, the aggregate principal amount of the Special Agent Advances
pursuant to this clause (ii), plus the then outstanding principal amount of the
additional Loans which Agent may make as set forth in Section 12.8 hereof, shall
not exceed $10,000,000, or (iii) to pay any other amount chargeable to Borrower
or Obligor pursuant to the terms of this Agreement or any of the other Financing
Agreements consisting of costs, fees and expenses. Special Agent Advances shall
be repayable on demand and be secured by the Collateral. Special Agent Advances
shall not constitute Loans but shall otherwise constitute Obligations hereunder.
Agent shall notify each Lender and Borrower in writing of each such Special
Agent Advance, which notice shall include a description of the purpose of such
Special Agent Advance. Without limitation of its obligations pursuant to Section
6.10, each Lender agrees that it shall make available to Agent, upon Agent's
demand, in immediately available funds, the amount equal to such Lender's Pro
Rata Share of each such Special Agent Advance. If such funds are not made
available to Agent by such Lender, then such Lender shall be deemed a Defaulting
Lender and Agent shall be entitled to recover such funds, on demand from such
Lender together with interest thereon for each day from the date such payment
was due until the date such amount is paid to Agent at the Federal Funds Rate
for each day during such period (as published by the Federal Reserve Bank of New
York or at Agent's option based on the arithmetic mean determined by Agent of
the rates for the last transaction in overnight Federal funds arranged prior to
9:00 a.m. (New York City time) on that day by each of the three leading brokers
of Federal funds transactions in New York City selected by Agent) and if such
amounts are not paid within three (3) days of Agent's demand, at the highest
Interest Rate provided for in Section 3.1 hereof applicable to Prime Rate Loans.
(b) Lenders hereby irrevocably authorize Agent, at its option and
in its discretion to release any security interest in, mortgage or lien upon,
any of the Collateral (i) upon termination of the Commitments and payment and
satisfaction of all of the Obligations and delivery of cash collateral to the
extent required under Section 13.1 hereof, or (ii) constituting property being
sold or disposed of if Borrower certifies to Agent that the sale or disposition
is made in compliance with Section 9.7 hereof (and Agent may rely conclusively
on any such certificate, without further inquiry), or (iii) constituting
property in which Borrower or any Obligor did not own an interest at the time
the security interest, mortgage or lien was granted or at any time thereafter,
or (iv) having a value in the aggregate in any twelve (12) month period of less
than $5,000,000 or (v) if required under the terms of any of the other Financing
Agreements, including any intercreditor agreement, or (vi) if approved,
authorized or ratified in writing by all of Lenders. Except as provided above,
Agent will not release any security interest in, mortgage or lien upon, any of
the Collateral without the prior written authorization of all of Lenders. Upon
request by Agent at any time, Lenders will promptly confirm in writing Agent's
authority to release particular types or items of Collateral pursuant to this
Section.
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(c) Without any manner limiting Agent's authority to act without
any specific or further authorization or consent by the Required Lenders, each
Lender agrees to confirm in writing, upon request by Agent, the authority to
release Collateral conferred upon Agent under this Section. Agent shall (and is
hereby irrevocably authorized by Lenders to) execute such documents as may be
necessary to evidence the release of the security interest, mortgage or liens
granted to Agent upon any Collateral to the extent set forth above; provided,
THAT, (i) Agent shall not be required to execute any such document on terms
which, in Agent's opinion, would expose Agent to liability or create any
obligations or entail any consequence other than the release of such security
interest, mortgage or liens without recourse or warranty and (ii) such release
shall not in any manner discharge, affect or impair the Obligations or any
security interest, mortgage or lien upon (or obligations of Borrower or any
Obligor in respect of) the Collateral retained by Borrower or such Obligor.
(d) Agent shall have no obligation whatsoever to any Lender or any
other Person to investigate, confirm or assure that the Collateral exists or is
owned by Borrower or any Obligor or is cared for, protected or insured or has
been encumbered, or that any particular items of Collateral meet the eligibility
criteria applicable in respect of the Loans hereunder, or whether any particular
reserves are appropriate, or that the liens and security interests granted to
Agent pursuant hereto or any of the Financing Agreements or otherwise 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 Agent in this Agreement or in any of the other Financing
Agreements, it being understood and agreed that in respect of the Collateral, or
any act, omission or event related thereto, Agent may act in any manner it may
deem appropriate, in its discretion, given Agent's own interest in the
Collateral as a Lender and that Agent shall have no duty or liability whatsoever
to any other Lender.
12.12 AGENCY FOR PERFECTION. Each Lender hereby appoints Agent and each
other Lender as agent and bailee for the purpose of perfecting the security
interests in and liens upon the Collateral of Agent in assets which, in
accordance with Article 9 of the UCC can be perfected only by possession (or
where the security interest of a secured party with possession has priority over
the security interest of another secured party) and Agent and each Lender hereby
acknowledges that it holds possession of any such Collateral for the benefit of
Agent as secured party. Should any Lender obtain possession of any such
Collateral, such Lender shall notify Agent thereof, and, promptly upon Agent's
request therefor shall deliver such Collateral to Agent or in accordance with
Agent's instructions.
12.13 SUCCESSOR AGENT. Agent may resign as Agent upon thirty (30) days'
notice to Lenders and Borrower. If Agent resigns under this Agreement, the
Required Lenders shall appoint from among the Lenders a successor agent for
Lenders with the consent of Borrower which consent shall not be unreasonably
withheld, delayed or conditioned. If no successor agent is appointed prior to
the effective date of the resignation of Agent, Agent may appoint, after
consulting with Lenders and Borrower, a successor agent from among Lenders. Upon
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the acceptance by the Lender so selected of its appointment as successor agent
hereunder, such successor agent shall succeed to all of the rights, powers and
duties of the retiring Agent and the term "Agent" as used herein and in the
other Financing Agreements shall mean such successor agent and the retiring
Agent's appointment, powers and duties as Agent shall be terminated. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Section
12 shall inure to its benefit as to any actions taken or omitted by it while it
was Agent under this Agreement. If no successor agent has accepted appointment
as Agent by the date which is thirty (30) days after the date of a retiring
Agent's notice of resignation, the retiring Agent's resignation shall
nonetheless thereupon become effective and Lenders shall perform all of the
duties of Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above.
SECTION 13. TERM OF AGREEMENT; MISCELLANEOUS
--------------------------------
13.1 TERM.
(a) This Agreement and the other Financing Agreements shall become
effective as of the date set forth on the first page hereof and shall continue
in full force and effect for a term ending on the earlier of (i) the date five
(5) years from the date hereof, and (ii) the maturity date or termination date
of the Congress Loan Agreement (such date referred to herein as the "Renewal
Date"), and from year to year thereafter, unless sooner terminated pursuant to
the terms hereof. Agent may, at its option (or shall at the direction of any
Lender in writing received by Agent at least sixty (60) days prior to the
Renewal Date or the anniversary of any Renewal Date, as the case may be),
terminate this Agreement and the other Financing Agreements, or Borrower may
terminate this Agreement and the other Financing Agreements, each case,
effective on the Renewal Date or on the anniversary of the Renewal Date in any
year by giving to the other party at least sixty (60) days prior written notice;
PROVIDED, THAT, this Agreement and all other Financing Agreements must be
terminated simultaneously. In addition, Borrower may terminate this Agreement at
any time upon ten (10) days prior written notice to Agent (which notice shall be
irrevocable) and Agent may, at its option, and shall at the direction of
Required Lenders, terminate this Agreement at any time on or after the
occurrence of an Event of Default in accordance with Section 10.2(b) hereof.
Upon the Renewal Date or any other effective date of termination of the
Financing Agreements, Borrower shall pay to Agent all outstanding and unpaid
Obligations and shall furnish cash collateral to Agent (or at Agent's option, a
letter of credit issued for the account of Borrower and at Borrower's expense,
in form and substance satisfactory to Agent, by an issuer acceptable to Agent
and payable to Agent as beneficiary) in such amounts as Agent determines are
reasonably necessary to secure Agent and Lenders from loss, cost, damage or
expense, including attorneys' fees and expenses, in connection with any
contingent Obligations that then exist, including checks or other payments
provisionally credited to the Obligations and/or as to which Agent or any Lender
has not yet received final and indefeasible payment. Such payments in respect of
the Obligations and cash collateral shall be remitted by wire transfer in
Federal funds to the Agent Payment Account or such other bank account of Agent,
as Agent may, in its discretion, designate in writing to Borrower for such
purpose. Interest shall be due until and including the next Business Day, if the
amounts so paid by Borrower to the Agent Payment Account or other bank account
designated by Agent are received in such bank account later than 12:00 noon, New
York City time.
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(b) No termination of this Agreement or the other Financing
Agreements shall relieve or discharge Borrower or any Obligor of its respective
duties, obligations and covenants under this Agreement or the other Financing
Agreements until all Obligations have been fully and finally discharged and
paid, and Agent's continuing security interest in the Collateral and the rights
and remedies of Agent and Lenders hereunder, under the other Financing
Agreements and applicable law, shall remain in effect until all such Obligations
have been fully and finally discharged and paid. Accordingly, Borrower waives
any rights it may have under the UCC to demand the filing of termination
statements with respect to the Collateral and Agent shall not be required to
send such termination statements to Borrower, or to file them with any filing
office, unless and until this Agreement shall have been terminated in accordance
with its terms and all Obligations paid and satisfied in full in immediately
available funds.
(c) [Intentionally Omitted]
(d) [Intentionally Omitted]
13.2 INTERPRETATIVE PROVISIONS.
(a) All terms used herein which are defined in Article 1, Article 8
or Article 9 of the UCC shall have the meanings given therein unless otherwise
defined in this Agreement.
(b) All references to the plural herein shall also mean the
singular and to the singular shall also mean the plural unless the context
otherwise requires.
(c) All references to Borrower, any Obligor, Agent and Lenders
pursuant to the definitions set forth in the recitals hereto, or to any other
person herein, shall include their respective successors and assigns.
(d) The words "hereof", "herein", "hereunder", "this Agreement" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not any particular provision of this Agreement and as
this Agreement now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
(e) The word "including" when used in this Agreement shall mean
"including, without limitation".
(f) An Event of Default shall exist or continue or be continuing
until such Event of Default is waived in accordance with Section 11.3 or is
cured in a manner satisfactory to Agent, if such Event of Default is capable of
being cured as determined by Agent.
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(g) All references to the term "good faith" used herein when
applicable to Agent or any Lender shall mean, notwithstanding anything to the
contrary contained herein or in the UCC, honesty in fact in the conduct or
transaction concerned. Borrower shall have the burden of proving any lack of
good faith on the part of Agent or any Lender alleged by Borrower at any time.
(h) 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 hereunder shall be computed
unless otherwise specifically provided herein, in accordance with GAAP as
consistently applied and using the same method for inventory valuation as used
in the preparation of the financial statements of Borrower most recently
received by Agent prior to the date hereof.
(i) 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".
(j) Unless otherwise expressly provided herein, (i) references
herein to any agreement, document or instrument shall be deemed to include all
subsequent amendments, modifications, supplements, extensions, renewals,
restatements or replacements with respect thereto, but only to the extent the
same are not prohibited by the terms hereof or of any other Financing Agreement,
and (ii) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, recodifying, supplementing or interpreting the statute or regulation.
(k) The captions and headings of this Agreement are for convenience
of reference only and shall not affect the interpretation of this
Agreement.
(l) This Agreement and other Financing Agreements 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.
(m) This Agreement and the other Financing Agreements are the
result of negotiations among and have been reviewed by counsel to Agent and the
other parties, and are the products of all parties. Accordingly, this Agreement
and the other Financing Agreements shall not be construed against Agent or
Lenders merely because of Agent's or any Lender's involvement in their
preparation.
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13.3 NOTICES. All notices, requests and demands hereunder shall be in
writing and deemed to have been given or made: if delivered in person,
immediately upon delivery; if by telex, telegram or facsimile transmission,
immediately upon sending and upon confirmation of receipt; if by nationally
recognized overnight courier service with instructions to deliver the next
Business Day, one (1) Business Day after sending; and if by certified mail,
return receipt requested, five (5) days after mailing. All notices, requests and
demands upon the parties are to be given to the following addresses (or to such
other address as any party may designate by notice in accordance with this
Section):
If to Borrower: Anchor Glass Container Corporation
One Anchor Plaza
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telephone No.: 000-000-0000
Telecopy No.: 000-000-0000
If to Agent: Xxxxxxxxx L.L.C.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx
Telephone No.: 000-000-0000
Telecopy No.: 000-000-0000
with a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx Hilson, Esq.
Telephone No.: 000-000-0000
Telecopy No.: 000-000-0000
13.4 PARTIAL INVALIDITY. If any provision of this Agreement is held to
be invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Agreement as a whole, but this Agreement shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.
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13.5 CONFIDENTIALITY.
(a) Agent and each Lender shall use all reasonable efforts to keep
confidential, in accordance with its customary procedures for handling
confidential information and safe and sound lending practices, any non-public
information supplied to it by Borrower pursuant to this Agreement, PROVIDED,
THAT, nothing contained herein shall limit the disclosure of any such
information: (i) to the extent required by statute, rule, regulation, subpoena
or court order, (ii) to bank examiners and other regulators, auditors and/or
accountants, in connection with any litigation to which Agent or such Lender is
a party, (iii) to any Lender or Participant (or prospective Lender or
Participant) or to any Affiliate of any Lender so long as such Lender or
Participant (or prospective Lender or Participant) or Affiliate shall have been
instructed to treat such information as confidential in accordance with this
Section 13.5, or (iv) to counsel for Agent or any Lender or Participant (or
prospective Lender or Participant) so long as such prospective Lender or
Participant agrees to abide by the terms of this Section 13.5.
(b) In the event that Agent or any Lender receives a request or
demand to disclose any confidential information pursuant to any subpoena or
court order, Agent or such Lender, as the case may be, agrees (i) to the extent
permitted by applicable law or if permitted by applicable law, to the extent
Agent or such Lender determines in good faith that it will not create any risk
of liability to Agent or such Lender, Agent or such Lender will promptly notify
Borrower of such request so that Borrower may seek a protective order or other
appropriate relief or remedy and (ii) if disclosure of such information is
required, disclose such information and, subject to reimbursement by Borrower of
Agent's or such Lender's expenses, cooperate with Borrower in the reasonable
efforts to obtain an order or other reliable assurance that confidential
treatment will be accorded to such portion of the disclosed information which
Borrower so designates, to the extent permitted by applicable law or if
permitted by applicable law, to the extent Agent or such Lender determines in
good faith that it will not create any risk of liability to Agent or such
Lender.
(c) In no event shall this Section 13.5 or any other provision of
this Agreement, any of the other Financing Agreements or applicable law be
deemed: (i) to apply to or restrict disclosure of information that has been or
is made public by Borrower, any Guarantor or any third party or otherwise
becomes generally available to the public other than as a result of a disclosure
in violation hereof, (ii) to apply to or restrict disclosure of information that
was or becomes available to Agent or any Lender (or any Affiliate of any Lender)
on a non-confidential basis from a person other than Borrower, (iii) to require
Agent or any Lender to return any materials furnished by Borrower to Agent or a
Lender or prevent Agent or a Lender from responding to routine informational
requests in accordance with the CODE OF ETHICS FOR THE EXCHANGE OF CREDIT
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INFORMATION promulgated by The Xxxxxx Xxxxxx Associates or other applicable
industry standards relating to the exchange of credit information. The
obligations of Agent and Lenders under this Section 13.5 shall supersede and
replace the obligations of Agent and Lenders under any confidentiality letter
signed prior to the date hereof.
13.6 SUCCESSORS. This Agreement, the other Financing Agreements and any
other document referred to herein or therein shall be binding upon and inure to
the benefit of and be enforceable by Agent, Lenders, Borrower, and their
respective successors and assigns, except that Borrower may not assign its
rights under this Agreement, the other Financing Agreements and any other
document referred to herein or therein without the prior written consent of
Agent and Lenders. Any such purported assignment without such express prior
written consent shall be void. No Lender may assign its rights and obligations
under this Agreement without the prior written consent of Agent, except as
provided in Section 13.7 below. The terms and provisions of this Agreement and
the other Financing Agreements are for the purpose of defining the relative
rights and obligations of Borrower, Agent and Lenders with respect to the
transactions contemplated hereby and there shall be no third party beneficiaries
of any of the terms and provisions of this Agreement or any of the other
Financing Agreements.
13.7 ASSIGNMENTS; PARTICIPATIONS.
(a) Each Lender (except as the rights of Agent in its capacity as a
Lender in Section 13.7(b) hereof) may, with the prior written consent of Agent
(except that the consent of the Agent shall not be required in connection with
(i) an assignment by a Lender to an Affiliate of such Lender or a Related Fund,
or (ii) if such assignment is in connection with any merger, consolidation,
sale, transfer or other disposition of all or any substantial portion of the
business or loan portfolio of such Lender), which consent shall not be
unreasonably withheld, delayed or conditioned, assign all or, if less than all,
a portion equal to at least $5,000,000 in the aggregate for the assigning Lender
(except such minimum amount shall not apply to an assignment by a Lender to (A)
an Affiliate of such Lender or a Related Fund of such Lender, or (B) a group of
new Lenders each of whom is an Affiliate or Related Fund of each other to the
extent the aggregate amount to be assigned to all such new Lenders is at least
$5,000,000), of such rights and obligations under this Agreement to one or more
Eligible Transferees (but not including for this purpose any assignments in the
form of a participation), each of which assignees shall become a party to this
Agreement as a Lender by (except as provided in the last sentence of this
Section 13.7(a)) execution and delivery of an Assignment and Acceptance to
Agent; PROVIDED, THAT, such transfer or assignment will not be effective until:
(i) it is recorded by Agent on the Register and (ii) Agent shall have received
for its sole account payment of a processing fee from the assigning Lender or
the assignee in the amount of $5,000 (except the payment of such fee shall not
be required in connection with an assignment by a Lender to an Affiliate of such
Lender or a Related Fund). Notwithstanding anything contained to the contrary in
this Section 13.7(a) , a Lender may assign any or all of its rights under the
Financing Agreements to an Affiliate of such Lender or a Related Fund of such
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Lender without delivering an Assignment and Acceptance to the Agent (a "Related
Party Assignment"); PROVIDED, however, that (A) no such Related Party Assignment
shall be made to a Non-U.S. Lender unless such Lender is, as of the effective
date of such assignment exempt from U.S. Federal withholding tax, (B) Borrower
and Agent may continue to deal solely and directly with such assigning Lender
until an Assignment and Acceptance has been delivered to Agent for recordation
on the Register, (C) the failure of such assigning Lender to deliver an
Assignment and Acceptance to Agent shall not affect the legality, validity, or
binding effect of such assignment, and (E) an Assignment and Acceptance between
the assigning Lender and an Affiliate of such Lender or a Related Fund of such
Lender shall be effective as of the date specified in such Assignment and
Acceptance.
(b) [Intentionally Omitted]
(c) Agent shall, acting solely for this purpose as a non-fiduciary
agent of the Borrower, maintain, or cause to be maintained, a copy of each
Assignment and Acceptance delivered to and accepted by it and a register (the
"Register") for the recordation of the names and addresses of the Lenders and
the Commitments of, and principal amount of the Loans (the "Registered Loans")
owing to each Lender from time to time. The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error. Borrower,
Obligors, Agent and Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by Borrower and any Lender at any reasonable
time and from time to time upon reasonable prior notice. In the case of any
Related Party Assignment, the Lender making such Related Party Assignment shall,
acting solely for this purpose as the non-fiduciary agent of the Borrower,
maintain a comparable register (the "Related Party Register") on behalf of the
Borrower.
(d) Upon receipt by Agent of an Assignment and Acceptance and
subject to any consent required from Agent pursuant to Section 13.7(a), Agent
shall accept such assignment and record the information contained therein in the
Register.
(e) A Registered Loan (and the registered note, if any, evidencing
the same) may be assigned or sold in whole or in part only by registration of
such assignment or sale on the Register or the Related Party Register (and each
registered note shall expressly so provide). Any assignment or sale of all or
part of such Registered Loan (and the registered note, if any, evidencing the
same) may be effected only by registration of such assignment or sale on the
Register or the Related Party Register, together with the surrender of the
registered note, if any, evidencing the same duly endorsed by (or accompanied by
a written instrument of assignment or sale duly executed by) the holder of such
registered note, whereupon, at the request of the designated assignee(s) or
transferee(s), one or more new registered notes in the same aggregate principal
amount shall be issued to the designated assignee(s) or transferee(s). Prior to
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the registration of the assignment or sale of any Registered Loan (and the
registered note, if any, evidencing the same), Agent shall treat the Person in
whose name such Registered Loan (and the registered note, if any, evidencing the
same) is registered as the owner thereof for the purpose of receiving all
payments thereon and for all other purposes, notwithstanding notice to the
contrary.
(f) Any Non-U.S. Lender who is assigned an interest in any portion
of such Registered Loan pursuant to an Assignment and Acceptance shall comply
with Section 6.11(e).
(g) By execution and delivery of an Assignment and Acceptance, the
assignor and 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, the 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 any of the other
Financing Agreements or the execution, legality, enforceability, genuineness,
sufficiency or value of this Agreement or any of the other Financing Agreements
furnished pursuant hereto, (ii) the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of Borrower, any Obligor or any of their Subsidiaries or the performance or
observance by Borrower or any Obligor of any of the Obligations; (iii) such
assignee confirms that it has received a copy of this Agreement and the other
Financing Agreements, together with such other documents and information it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance, (iv) such assignee will, independently and
without reliance upon the assigning Lender, Agent 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 and the
other Financing Agreements, (v) such assignee appoints and authorizes Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement and the other Financing Agreements as are delegated to Agent by the
terms hereof and thereof, together with such powers 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 and the
other Financing Agreements are required to be performed by it as a Lender. Agent
and Lenders may furnish any information concerning Borrower or any Obligor in
the possession of Agent or any Lender from time to time to assignees and
Participants.
(h) Each Lender may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations under
this Agreement and the other Financing Agreements (including, without
limitation, all or a portion of its Commitments and the Loans owing to it,
without the consent of Agent or the other Lenders); PROVIDED, THAT, (i) such
Lender's obligations under this Agreement (including, without limitation, its
Commitment hereunder) and the other Financing Agreements shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, and Borrower, the other Lenders and Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other
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Financing Agreements, (iii) the Participant shall not have any rights under this
Agreement or any of the other Financing Agreements (the Participant's rights
against such Lender in respect of such participation to be those set forth in
the agreement executed by such Lender in favor of the Participant relating
thereto) and all amounts payable by Borrower or any Obligor hereunder shall be
determined as if such Lender had not sold such participation. Borrower agrees
that each participant shall be entitled to the benefits of Section 6.11(b),
Section 6.11(c) to the extent it relates to Other Taxes, and Section 3.3 of this
Agreement with respect to its participation in any portion of the Commitments
and the Loans as if it was a Lender, and that all payments under Section 6.11(a)
and Section 6.11(c) to the extent it relates to Taxes in respect of a Registered
Loan in which a Lender has sold a participation shall be determined as if such
Lender had not sold such participation.
(i) In the event that any Lender sells participations in a
Registered Loan, such Lender shall maintain a register, acting solely for this
purpose as a non-fiduciary agent of the Borrower, on which it enters the name of
all participants in the Registered Loans held by it (the "Participant
Register"). A Registered Loan (and the registered note, if any, evidencing the
same) may be participated in whole or in part only by registration of such
participation on the Participant Register (and each registered note shall
expressly so provide). Any participation of such Registered Loan (and the
registered note, if any, evidencing the same) may be effected only by the
registration of such participation on the Participant Register.
(j) The Borrower hereby acknowledges that the Lenders and their
Affiliates may sell or securitize the Loans (a "Securitization") through the
pledge of the Loans as collateral security for loans to the Lenders or their
Affiliates or through the sale of the Loans or the issuance of direct or
indirect interests in the Loans, which loans to the Lenders or their Affiliates
or direct or indirect interests will be rated by Xxxxx'x Investors Service,
Inc., Standard & Poor's or one or more other rating agencies (the "Rating
Agencies"). Borrower shall cooperate with the Lenders and their Affiliates to
effect the Securitization including by (a) amending this Agreement and the other
Financing Agreements, and executing such additional documents, as reasonably
requested by the Lenders in connection with the Securitization, PROVIDED THAT
(i) any such amendment or additional documentation does not impose any
additional costs on the Borrower and (ii) any such amendment or additional
documentation does not materially adversely affect the rights, or materially
increase the obligations, of the Borrower under the Financing Agreements or
change or affect in a manner adverse to the Borrower the financial terms of the
Loans, (b) providing such information as may be reasonably requested by the
Lenders in connection with the rating of the Loans or the Securitization, and
(c) providing in connection with any rating of the Loans a certificate (i)
agreeing to indemnify the Lenders and their Affiliates, any of the Rating
Agencies, or any party providing credit support or otherwise participating in
the Securitization (collectively, the "Securitization Parties") for any losses,
claims, damages or liabilities (the "Liabilities") to which the Lenders, their
Affiliates or such Securitization Parties may become subject insofar as the
Liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Financing Agreement or in
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any writing delivered by or on behalf of the Borrower to the Lenders in
connection with any Financing Agreement or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, and such
indemnity shall survive any transfer by the Lenders or their successors or
assigns of the Loans and (ii) agreeing to reimburse the Lenders and their
Affiliates for any legal or other expenses reasonably incurred by such Persons
in connection with defending the Liabilities.
13.8 ENTIRE AGREEMENT. This Agreement, the other Financing Agreements,
any supplements hereto or thereto, and any instruments or documents delivered or
to be delivered in connection herewith or therewith represents the entire
agreement and understanding concerning the subject matter hereof and thereof
between the parties hereto, and supersede all other prior agreements,
understandings, negotiations and discussions, representations, warranties,
commitments, proposals, offers and contracts concerning the subject matter
hereof, whether oral or written. In the event of any inconsistency between the
terms of this Agreement and any schedule or exhibit hereto, the terms of this
Agreement shall govern.
13.9 COUNTERPARTS, ETC. This Agreement or any of the other Financing
Agreements may be executed in any number of counterparts, each of which shall be
an original, but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Agreement or any of the
other Financing Agreements by telefacsimile shall have the same force and effect
as the delivery of an original executed counterpart of this Agreement or any of
such other Financing Agreements. Any party delivering an executed counterpart of
any such agreement by telefacsimile shall also deliver an original executed
counterpart, but the failure to do so shall not affect the validity,
enforceability or binding effect of such agreement.
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IN WITNESS WHEREOF, Agent, Lenders and Borrower has caused these
presents to be duly executed as of the day and year first above written.
AGENT BORROWER
----- --------
XXXXXXXXX L.L.C., a New York limited ANCHOR GLASS CONTAINER
liability company, as Agent CORPORATION, a Delaware corporation
By: /s/ Xxxxx X. Genda By: /s/ Xxxxx X. Xxxx
--------------------------------- ---------------------------------
Title:----------------------------- Title: Vice President and
Interim Chief Financial Officer
LENDERS
-------
XXXXXXXXX L.L.C., a New York
limited liability company
By: /s/ Xxxxx X. Genda
-----------------------------
Title:
-----------------------------
Commitment: $20,000,000
S-1
