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REVOLVING CREDIT AND GUARANTY AGREEMENT
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AMONG
FAMILY GOLF CENTERS, INC.
A DEBTOR AND A DEBTOR-IN-POSSESSION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
AS BORROWER
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AND
THE SUBSIDIARIES OF THE BORROWER NAMED HEREIN,
EACH A DEBTOR AND A DEBTOR-IN-POSSESSION UNDER CHAPTER 11 OF
THE BANKRUPTCY CODE
AS GUARANTORS
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AND
THE BANKS PARTY HERETO,
AND
THE CHASE MANHATTAN BANK,
AS AGENT
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DATED AS OF JUNE 2, 2000
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS.....................................................................................2
SECTION 1.01 DEFINED TERMS.................................................................2
SECTION 1.02 TERMS GENERALLY..............................................................12
SECTION 2. AMOUNT AND TERMS OF CREDIT.....................................................................12
SECTION 2.01 COMMITMENT OF THE BANKS......................................................12
SECTION 2.02 LETTERS OF CREDIT............................................................13
SECTION 2.03 ISSUANCE.....................................................................15
SECTION 2.04 NATURE OF LETTER OF CREDIT OBLIGATIONS ABSOLUTE..............................15
SECTION 2.05 MAKING OF LOANS..............................................................15
SECTION 2.06 REPAYMENT OF LOANS; EVIDENCE OF DEBT. ......................................16
SECTION 2.07 INTEREST ON LOANS............................................................17
SECTION 2.08 DEFAULT INTEREST.............................................................17
SECTION 2.09 OPTIONAL TERMINATION OR REDUCTION OF COMMITMENT. ...........................17
SECTION 2.10 MANDATORY PREPAYMENT; COMMITMENT TERMINATION;
CASH COLLATERAL.............................................................17
SECTION 2.11 OPTIONAL PREPAYMENT OF LOANS.................................................18
SECTION 2.12 RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES................................19
SECTION 2.13 PRO RATA TREATMENT, ETC......................................................19
SECTION 2.14 TAXES........................................................................20
SECTION 2.15 CERTAIN FEES.................................................................22
SECTION 2.16 COMMITMENT FEE...............................................................22
SECTION 2.17 LETTER OF CREDIT FEES. ......................................................22
SECTION 2.18 NATURE OF FEES...............................................................23
SECTION 2.19 RIGHT OF SET-OFF.............................................................23
SECTION 2.20 SECURITY INTEREST IN LETTER OF CREDIT ACCOUNT................................23
SECTION 2.21 PAYMENT OF OBLIGATIONS.......................................................23
SECTION 2.22 NO DISCHARGE; SURVIVAL OF CLAIMS.............................................23
SECTION 2.23 USE OF CASH COLLATERAL.......................................................24
SECTION 3. REPRESENTATIONS AND WARRANTIES.................................................................24
SECTION 3.01 ORGANIZATION AND AUTHORITY...................................................24
SECTION 3.02 DUE EXECUTION................................................................24
SECTION 3.03 STATEMENTS MADE..............................................................25
SECTION 3.04 FINANCIAL STATEMENTS.........................................................25
SECTION 3.05 OWNERSHIP....................................................................25
SECTION 3.06 LIENS........................................................................25
SECTION 3.07 COMPLIANCE WITH LAW..........................................................25
SECTION 3.08 INSURANCE....................................................................26
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SECTION 3.09 THE ORDERS...................................................................26
SECTION 3.10 USE OF PROCEEDS..............................................................26
SECTION 3.11 LITIGATION...................................................................27
SECTION 4. CONDITIONS OF LENDING..........................................................................27
SECTION 4.01 CONDITIONS PRECEDENT TO EACH LOAN AND EACH
LETTER OF CREDIT............................................................27
SECTION 5. AFFIRMATIVE COVENANTS..........................................................................28
SECTION 5.01 FINANCIAL STATEMENTS, REPORTS, ETC...........................................28
SECTION 5.02 CORPORATE EXISTENCE..........................................................30
SECTION 5.03 INSURANCE....................................................................30
SECTION 5.04 OBLIGATIONS AND TAXES........................................................30
SECTION 5.05 NOTICE OF EVENT OF DEFAULT...................................................30
SECTION 5.06 MAINTENANCE OF CONCENTRATION ACCOUNTS........................................30
SECTION 5.07 BOOKS AND RECORDS, INSPECTION AND COLLATERAL REVIEW
RIGHTS......................................................................30
SECTION 5.08 MAINTENANCE OF EXISTENCE, ETC. ..............................................31
SECTION 5.09 CANADIAN ASSETS..............................................................31
SECTION 5.10 FINANCIAL ADVISOR............................................................31
SECTION 5.11 INVESTMENTS..................................................................31
SECTION 5.12 INSURANCE POLICIES...........................................................31
SECTION 6. NEGATIVE COVENANTS.............................................................................31
SECTION 6.01 LIENS........................................................................31
SECTION 6.02 MERGER, ETC..................................................................32
SECTION 6.03 INDEBTEDNESS.................................................................32
SECTION 6.04 EBITDAR......................................................................32
SECTION 6.05 GUARANTEES AND OTHER LIABILITIES.............................................32
SECTION 6.06 CHAPTER 11 CLAIMS............................................................33
SECTION 6.07 TRANSACTIONS WITH AFFILIATES.................................................33
SECTION 6.08 DISPOSITION OF ASSETS........................................................33
SECTION 7. EVENTS OF DEFAULT..............................................................................33
SECTION 7.01 EVENTS OF DEFAULT............................................................33
SECTION 8. THE AGENT......................................................................................36
SECTION 8.01 ADMINISTRATION BY AGENT......................................................36
SECTION 8.02 ADVANCES AND PAYMENTS........................................................36
SECTION 8.03 SHARING OF SETOFFS...........................................................37
SECTION 8.04 AGREEMENT OF REQUIRED BANKS..................................................37
SECTION 8.05 LIABILITY OF AGENT...........................................................38
SECTION 8.06 REIMBURSEMENT AND INDEMNIFICATION............................................39
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SECTION 8.07 RIGHTS OF AGENT..............................................................39
SECTION 8.08 INDEPENDENT BANKS............................................................39
SECTION 8.09 NOTICE OF TRANSFER...........................................................39
SECTION 8.10 SUCCESSOR AGENT..............................................................39
SECTION 9. GUARANTY.......................................................................................39
SECTION 9.01 GUARANTY.....................................................................39
SECTION 9.02 NO IMPAIRMENT OF GUARANTY....................................................40
SECTION 9.03 SUBROGATION..................................................................41
SECTION 10. MISCELLANEOUS..................................................................................41
SECTION 10.01 NOTICES......................................................................41
SECTION 10.02 SURVIVAL OF AGREEMENT, REPRESENTATIONS AND
WARRANTIES, ETC.............................................................41
SECTION 10.03 SUCCESSORS AND ASSIGNS.......................................................42
SECTION 10.04 CONFIDENTIALITY..............................................................44
SECTION 10.05 EXPENSES.....................................................................44
SECTION 10.06 INDEMNITY....................................................................45
SECTION 10.07 CHOICE OF LAW. ..............................................................45
SECTION 10.08 NO WAIVER....................................................................45
SECTION 10.09 EXTENSION OF MATURITY........................................................45
SECTION 10.10 AMENDMENTS, ETC. ............................................................46
SECTION 10.11 SEVERABILITY.................................................................47
SECTION 10.12 HEADINGS.....................................................................47
SECTION 10.13 EXECUTION IN COUNTERPARTS....................................................47
SECTION 10.14 PRIOR AGREEMENTS.............................................................47
SECTION 10.15 FURTHER ASSURANCES...........................................................47
SECTION 10.16 WAIVER OF JURY TRIAL.........................................................47
ANNEX A - Commitment Amounts
EXHIBIT A-1 - Interim Order
EXHIBIT A-2 - Form of Final Order
EXHIBIT B - Form of Security and Pledge Agreement
EXHIBIT C - Form of Assignment and Acceptance
SCHEDULE 3.05 - Subsidiaries
SCHEDULE 3.06 - Liens
SCHEDULE 3.11 - Litigation
SCHEDULE 6.04 - Budget
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REVOLVING CREDIT AND GUARANTY AGREEMENT
Dated as of June 2, 2000
REVOLVING CREDIT AND GUARANTY AGREEMENT, dated as of June 2,
2000, among FAMILY GOLF CENTERS, INC., a Delaware corporation (the "Borrower"),
a debtor and debtor-in-possession in a case pending under Chapter 11 of the
Bankruptcy Code, and each of the direct or indirect subsidiaries of the Borrower
signatory hereto (each a "Guarantor" and collectively, the "Guarantors"), each
of which Guarantors referred to in this paragraph is a debtor and
debtor-in-possession in a case pending under Chapter 11 of the Bankruptcy Code
(the cases of the Borrower and the Guarantors, each a "Case" and collectively,
the "Cases"), THE CHASE MANHATTAN BANK, a New York banking corporation
("Chase"), each of the other financial institutions from time to time party
hereto (together with Chase, the "Banks") and THE CHASE MANHATTAN BANK, as agent
(in such capacity, the "Agent") for the Banks.
INTRODUCTORY STATEMENT
On May 4, 2000, the Borrower and the Guarantors filed
voluntary petitions with the Bankruptcy Court initiating the Cases and have
continued in the possession of their assets and in the management of their
business pursuant to Sections 1107 and 1108 of the Bankruptcy Code.
The Borrower has applied to the Banks for a revolving credit
and letter of credit facility in an aggregate principal amount not to exceed
$15,000,000, all of the Borrower's obligations under which are to be guaranteed
by the Guarantors. On May 9, 2000 the Bankruptcy Court entered the Interim
Order, a copy of which is attached hereto as Exhibit A-1 (the "Interim Order")
pursuant to which, among other things, the Bankruptcy Court approved and Chase
agreed to provide such a facility on the terms and conditions set forth in the
Term Sheet attached to the Interim Order (the "Term Sheet"). The Borrower and
Chase agreed to enter into long form agreements incorporating the terms and
provisions of the Term Sheet.
The proceeds of the Loans will be used as provided for herein.
To provide guarantees and security for the repayment of the
Loans, the reimbursement of any draft drawn under a Letter of Credit and the
payment of the other obligations of the Borrower and the Guarantors hereunder
and under the other Loan Documents (including, without limitation, the
Obligations of the Borrower under Section 6.03(iii)), the Borrower and the
Guarantors will provide to the Agent and the Banks the following (each as more
fully described herein):
(a) a guaranty from each of the Guarantors of the due and
punctual payment and performance of the obligations of the Borrower hereunder;
(b) an allowed administrative expense claim in each of the
Cases pursuant to Section 364(c)(1) of the Bankruptcy Code having priority over
all administrative expenses of the
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kind specified in Sections 503(b) and 507(b) of the Bankruptcy Code as provided
in the Final Order; and
(c) perfected Liens, pursuant to Sections 364(c)(2), 364(c)(3)
and 364(d)(1) of the Bankruptcy Code on the assets and properties of the
Borrower and the Guarantors as more fully set forth in the Final Order.
All of the claims and the Liens granted hereunder in the Cases
to the Agent and the Banks shall be subject to the Carve-Out and the Statutory
Fees to the extent provided in the Final Order.
Accordingly, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
SECTION 1.01 DEFINED TERMS.
As used in this Agreement, the following terms shall have the
meanings specified below:
"Affiliate" shall mean, as to any Person, any other Person
which, directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. For purposes of this definition, a Person (a
"Controlled Person") shall be deemed to be "controlled by" another Person (a
"Controlling Person") if the Controlling Person possesses, directly or
indirectly, power to direct or cause the direction of the management and
policies of the Controlled Person whether by contract or otherwise.
"Agent" shall have the meaning set forth in the Introduction.
"Agreement" shall mean this Revolving Credit and Guaranty
Agreement, as the same may from time to time be further amended, modified or
supplemented.
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof, "Prime Rate" shall mean the rate
of interest per annum publicly announced from time to time by the Agent as its
prime rate in effect at its principal office in New York City; each change in
the Prime Rate shall be effective on the date such change is publicly announced.
"Base CD Rate" shall mean the sum of (a) the quotient of (i) the Three-Month
Secondary CD Rate divided by (ii) a percentage expressed as a decimal equal to
100% minus Statutory Reserves and (b) the Assessment Rate. "Three-Month
Secondary CD Rate" shall mean, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect on such day (or,
if such day shall not be a Business Day, the next preceding Business Day) by
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the Board through the public information telephone line of the Federal Reserve
Bank of New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day), or, if such rate shall not be so reported on such day or
such next preceding Business Day, the average of the secondary market quotations
for three-month certificates of deposit of major money center banks in New York
City received at approximately 10:00 a.m., New York City time, on such day (or,
if such day shall not be a Business Day, on the next preceding Business Day) by
the Agent from three New York City negotiable certificate of deposit dealers of
recognized standing selected by it. "Federal Funds Effective Rate" shall mean,
for any day, the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for the day of such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it. If for any reason the Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Base CD Rate or the Federal Funds Effective Rate
or both for any reason, including the inability or failure of the Agent to
obtain sufficient quotations in accordance with the terms hereof, the Alternate
Base Rate shall be determined without regard to clause (b) or (c), or both, of
the first sentence of this definition, as appropriate, until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate shall be effective on the effective date of such
change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate, respectively. "Assessment Rate" shall mean for any date the
annual rate (rounded upwards, if necessary, to the next 1/100 of 1%) most
recently estimated by the Agent as the then current net annual assessment rate
that will be employed in determining amounts payable by the Agent to the Federal
Deposit Insurance Corporation (or any successor) for insurance by such
Corporation (or any successor) of time deposits made in dollars at the Agent's
domestic offices.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Bank and an Eligible Assignee, and accepted by the
Agent, substantially in the form of Exhibit C.
"Bankruptcy Code" shall mean The Bankruptcy Reform Act of
1978, as heretofore and hereafter amended, and codified as 11 U.S.C. Section 101
et seq.
"Bankruptcy Court" shall mean the United States Bankruptcy
Court for the Southern District of New York or any other court having
jurisdiction over the Cases from time to time.
"Banks" shall have the meaning set forth in the Introduction.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
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"Borrower" shall have the meaning set forth in the
Introduction.
"Borrowing" shall mean the incurrence of Loans made from all
the Banks on a single date.
"Budget" shall have the meaning set forth in Section 6.04.
"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which banks in the State of New York are required or
permitted to close (and, for a Letter of Credit, other than a day on which the
Fronting Bank issuing such Letter of Credit is closed); provided, however, that
when used in connection with a Eurodollar Loan, the term "Business Day" shall
also exclude any day on which banks are not open for dealings in dollar deposits
on the London interbank market.
"Capital Stock" shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation) and any and all warrants, rights or options to purchase any of
the foregoing.
"Carve-Out" shall have the meaning given such term in the
Final Order.
"Cases" shall mean the Chapter 11 Cases of the Borrower and
each of the Guarantors pending in the Bankruptcy Court.
"Chase" shall have the meaning set forth in the Introduction.
"Closing Date" shall mean the date on which this Agreement has
been executed and the conditions precedent to the making of the Loans set forth
in Section 4.01 have been satisfied or waived, which date shall occur promptly
upon entry of the Final Order, but not later than 45 days following the Filing
Date.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Collateral" shall mean the Collateral under the Security and
Pledge Agreement or any other Loan Document.
"Commitment" shall mean, with respect to each Bank, the
commitment of each Bank hereunder in the amount set forth opposite its name on
Annex A hereto or as may subsequently be set forth in the Register from time to
time, as the same may be reduced from time to time pursuant to this Agreement.
"Commitment Fee" shall have the meaning set forth in Section
2.16.
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"Commitment Percentage" shall mean at any time, with respect
to each Bank, the percentage obtained by dividing its Commitment at such time by
the Total Commitment at such time.
"Committee" shall mean the official committee of unsecured
creditors appointed in the Cases.
"Consummation Date" shall mean the date of the substantial
consummation (as defined in Section 1101 of the Bankruptcy Code and which for
purposes of this Agreement shall be no later than the effective date) of a
Reorganization Plan of the Borrower or any of the Guarantors that is confirmed
pursuant to an order of the Bankruptcy Court.
"Contractual Obligation" shall mean, as to any Person, any
provision of any security issued by such Person or of any agreement, instrument
or other undertaking to which such Person is a party or by which it or any of
its Property is bound.
"Dollars" and "$" shall mean lawful money of the United States
of America.
"EBITDAR" shall mean net income on a consolidated basis for an
accounting period before provision for payment of interest expense and Federal
income taxes plus depreciation, amortization, plus or minus, as the case may be,
any extraordinary or unusual gains or losses (including gains or losses on the
revaluation of assets), and restructuring costs to the extent deducted from such
net income during such accounting period, all as determined in accordance with
GAAP, except that professional fees associated with the Cases shall be
considered restructuring costs.
"Eligible Assignee" shall mean (i) a commercial bank having
total assets in excess of $1,000,000,000; (ii) a finance company, insurance
company or other financial institution or fund, in each case acceptable to the
Agent, which in the ordinary course of business extends credit of the type
contemplated herein and has total assets in excess of $200,000,000 and whose
becoming an assignee would not constitute a prohibited transaction under Section
4975 of ERISA; and (iii) any other financial institution satisfactory to the
Borrower and the Agent.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) which is a member of a group of which the Borrower is a member
and which is under common control within the meaning of Section 414(b) or (c) of
the Code and the regulations promulgated and rulings issued thereunder.
"Event of Default" shall have the meaning given such term in
Section 7.
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"Existing Agreements" shall mean and include all of the
agreements granting security interests and Liens in property and assets of the
Borrower and the Guarantors to the Existing Lenders in connection with the
Existing Credit Agreement.
"Existing Credit Agreement" shall mean that certain Amended
and Restated Credit, Security, Guaranty and Pledge Agreement, dated as of
December 2, 1998, as Amended and Restated as of October 15, 1999 among the
Borrower, the several lenders from time to time party thereto and Chase, as
administrative agent (as heretofore amended).
"Existing Lenders" shall mean, collectively, those certain
lenders to the Borrower and the Guarantors (to the extent party thereto) under
any of the Existing Agreements, together with any successors or assigns thereof.
"Fees" shall collectively mean the Commitment Fees, Letter of
Credit Fees and other fees referred to in Sections 2.15, 2.16 and 2.17.
"Filing Date" shall mean May 4, 2000.
"Final Order" shall have the meaning given such term in
Section 4.01(d).
"Financial Officer" shall mean the Chief Financial Officer of
the Borrower.
"Fronting Bank" shall mean Chase or such other Bank (which
other Bank shall be reasonably satisfactory to the Borrower) as may agree with
Chase to act in such capacity.
"GAAP" shall mean generally accepted accounting principles
applied in accordance with Section 1.02.
"Governmental Authority" shall mean any Federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality or any court, in each case whether of the United States or
foreign.
"Guarantor" shall have the meaning set forth in the
Introduction.
"Indebtedness" shall mean, at any time and with respect to any
Person, (i) all indebtedness of such Person for borrowed money, (ii) all
indebtedness of such Person for the deferred purchase price of property or
services (other than property, including inventory, and services purchased, and
expense accruals and deferred compensation items arising, in the ordinary course
of business), (iii) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments (other than performance, surety and
appeal bonds arising in the ordinary course of business), (iv) all indebtedness
of such Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to
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repossession or sale of such property), (v) all obligations of such Person under
leases which have been or should be, in accordance with GAAP, recorded as
capital leases, to the extent required to be so recorded, (vi) all
reimbursement, payment or similar obligations of such Person, contingent or
otherwise, under acceptance, letter of credit or similar facilities and all
obligations of such Person in respect of (x) currency swap agreements, currency
future or option contracts and other similar agreements designed to hedge
against fluctuations in foreign interest rates and (y) interest rate swap, cap
or collar agreements and interest rate future or option contracts; (vii) all
Indebtedness referred to in clauses (i) through (vi) above guaranteed directly
or indirectly by such Person, or in effect guaranteed directly or indirectly by
such Person through an agreement (A) to pay or purchase such Indebtedness or to
advance or supply funds for the payment or purchase of such Indebtedness, (B) to
purchase, sell or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment of
such Indebtedness or to assure the holder of such Indebtedness against loss in
respect of such Indebtedness, (C) to supply funds to or in any other manner
invest in the debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services are rendered)
or (D) otherwise to assure a creditor against loss in respect of such
Indebtedness, and (viii) all Indebtedness referred to in clauses (i) through
(vii) above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or in
property (including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness.
"Insufficiency" shall mean, with respect to any Plan, the
amount, if any, of its unfunded benefit liabilities within the meaning of
Section 4001(a)(18) of ERISA.
"Interim Order" shall have the meaning given such term in the
Introductory Statement.
"Letter of Credit" shall mean any irrevocable letter of credit
issued pursuant to Section 2.02, which letter of credit shall be (i) a standby
letter of credit, (ii) issued for purposes that are consistent with the ordinary
course of business of the Borrower or any Guarantor, or for such other purposes
as are reasonably acceptable to the Agent, (iii) denominated in Dollars and (iv)
otherwise in such form as may be reasonably approved from time to time by the
Agent and the applicable Fronting Bank.
"Letter of Credit Account" shall mean the account established
by the Borrower under the sole and exclusive control of the Agent maintained at
the office of the Agent at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 designated
as the "Family Golf Centers, Inc. Letter of Credit Account" that shall be used
solely for the purposes set forth in Sections 2.02(b) and 2.10(a) and (c).
"Letter of Credit Fees" shall mean the fees payable in respect
of Letters of Credit pursuant to Section 2.17.
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"Letter of Credit Outstandings" shall mean, at any time, the
sum of (i) the aggregate undrawn stated amount of all Letters of Credit then
outstanding plus (ii) all amounts theretofore drawn under Letters of Credit and
not then reimbursed.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind whatsoever (including any conditional
sale or other title retention agreement or any lease in the nature thereof).
"Loan" shall have the meaning given such term in Section 2.01.
"Loan Documents" shall mean this Agreement, the Letters of
Credit, the Security and Pledge Agreement and any other instrument or agreement
executed and delivered in connection herewith (including, without limitation,
any instrument or agreement executed and delivered in connection with the Liens
granted in favor of the Agent on the assets of the Borrower and its Subsidiaries
located in Canada).
"Material Adverse Change" means a material adverse change in
any of (i) the legality, validity or enforceability of any of the Loan
Documents, (ii) the perfection or priority of the liens granted pursuant to this
Agreement or any of the other Loan Documents or the Orders; (iii) the ability of
the Borrower and the Guarantors to repay the obligations or to perform their
obligations under any of the Loan Documents, or (iv) the rights and remedies of
the Lenders or the Agent under any of the Loan Documents.
"Material Adverse Effect" means an effect that results in or
causes, or has a reasonable likelihood of resulting in or causing, a Material
Adverse Change.
"Maturity Date" shall mean May 5, 2001, provided, that if the
Borrower and the Guarantors shall have received Net Cash Proceeds in an amount
of not less than $50,000,000 from asset sales on or prior to such date, such
date shall be automatically extended to November 7, 2001 without premium and
without further order of the Bankruptcy Court.
"Multiemployer Plan" shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate is making or accruing an obligation to make contributions, or has
within any of the preceding five plan years made or accrued an obligation to
make contributions.
"Multiple Employer Plan" shall mean a Single Employer Plan,
which (i) is maintained for employees of the Borrower or an ERISA Affiliate and
at least one Person other than the Borrower and its ERISA Affiliates or (ii) was
so maintained and in respect of which the Borrower or an ERISA Affiliate could
have liability under Section 4064 or 4069 of ERISA in the event such Plan has
been or were to be terminated.
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"Net Cash Proceeds" shall mean, in respect of any sale of
assets, the proceeds of such sale (including the face amount of any Indebtedness
of any Debtor assumed by a non-Debtor in connection with such sale) after the
payment of or reservation for expenses that are directly related to (or the need
for which arises as a result of) the transaction of sale, including, but not
limited to, related severance costs, taxes payable, brokerage commissions,
professional expenses, other similar costs that are directly related to the sale
(and before payment on account of, or to satisfy, any Indebtedness relating to
such assets).
"Obligations" shall mean (a) the due and punctual payment of
principal of and interest on the Loans and the reimbursement of all amounts
drawn under Letters of Credit, and (b) the due and punctual payment of the Fees
and all other present and future, fixed or contingent, monetary obligations of
the Borrower and the Guarantors to the Banks and the Agent under the Loan
Documents.
"Orders" shall mean the Interim Order and the Final Order.
"Other Taxes" shall have the meaning given such term in
Section 2.14.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
any successor agency or entity performing substantially the same functions.
"Pension Plan" shall mean a defined benefit pension or
retirement plan which meets and is subject to the requirements of Section 401(a)
of the Code.
"Permitted Liens" shall mean (i) Liens imposed by law for
taxes, assessments or charges of any Governmental Authority for claims not yet
due or which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP; (ii) Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other Liens in existence on
the Filing Date or thereafter imposed by law and created in the ordinary course
of business; (iii) Liens incurred or deposits made in the ordinary course of
business (including, without limitation, surety bonds and appeal bonds) in
connection with workers' compensation, unemployment insurance and other types of
social security benefits or to secure the performance of tenders, bids, leases,
contracts (other than for the repayment of Indebtedness), statutory obligations
and other similar obligations or arising as a result of progress payments under
government contracts; (iv) easements (including, without limitation, reciprocal
easement agreements and utility agreements), rights-of-way, covenants, consents,
reservations, encroachments, variations and zoning and other restrictions,
charges or encumbrances (whether or not recorded) and interest of ground
lessors, which do not interfere materially with the ordinary conduct of the
business of the Borrower or any Guarantor, as the case may be, and which do not
materially detract from the value of the property to which they attach or
materially impair the use thereof to the Borrower or any Guarantor, as the case
may be; and (v) extensions, renewals or replacements of any Lien referred to in
paragraphs (i) through (iv) above,
xii
provided that the principal amount of the obligation secured thereby is not
increased and that any such extension, renewal or replacement is limited to the
property originally encumbered thereby.
"Person" shall mean any natural person, corporation, division
of a corporation, partnership, trust, joint venture, association, company,
estate, unincorporated organization or government or any agency or political
subdivision thereof.
"Plan" shall mean a Single Employer Plan or a Multiemployer
Plan.
"Prepayment Date" shall mean forty-five (45) days after the
entry of the Interim Order by the Bankruptcy Court if the Final Order has not
been entered by the Bankruptcy Court prior to the expiration of such forty-five
(45) day period.
"Pre-Petition Agent" shall mean The Chase Manhattan Bank, as
administrative agent under the Existing Credit Agreement.
"Pre-Petition Payment" shall mean a payment (by way of
adequate protection or otherwise) of principal or interest or otherwise on
account of any pre-petition Indebtedness or trade payables or other pre-petition
claims against the Borrower or any Guarantor.
"Property" shall mean any right or interest in or to property
of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"Register" shall have the meaning set forth in Section
10.03(d).
"Reorganization Plan" shall mean a plan of reorganization in
any of the Cases.
"Required Banks" shall mean, at any time, Banks holding Loans
representing in excess of 50% of the aggregate principal amount of such Loans
outstanding or, if no such Loans are outstanding, Banks having Commitments
representing in excess of 50% of the Total Commitment.
"Requirement of Law" shall mean, as to any Person, the
Certificate or Articles of Incorporation and By-Laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Security and Pledge Agreement" shall have the meaning set
forth in Section 4.01(f).
"Single Employer Plan" shall mean a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (i) is maintained for employees of
the Borrower or an ERISA Affiliate
xiii
or (ii) was so maintained and in respect of which the Borrower could have
liability under Section 4069 of ERISA in the event such Plan has been or were to
be terminated.
"Statutory Fees" shall have the meaning given such term in the
Final Order.
"Statutory Reserves" shall mean on any date the percentage
(expressed as a decimal) established by the Board and any other banking
authority which is for purposes of the definition of Base CD Rate, the then
stated maximum rate of all reserves (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement) for a member bank
of the Federal Reserve System in New York City, for new three month negotiable
nonpersonal time deposits in dollars of $100,000 or more. Such reserve
percentages shall include, without limitation, those imposed pursuant to said
Regulation. The Statutory Reserves shall be adjusted automatically on and as of
the effective date of any change in such percentage.
"Subsidiary" shall mean, with respect to any Person (herein
referred to as the "parent"), any corporation, association or other business
entity (whether now existing or hereafter organized) of which at least a
majority of the securities or other ownership interests having ordinary voting
power for the election of directors is, at the time as of which any
determination is being made, owned or controlled by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
"Super-majority Banks" shall have the meaning given such term
in Section 10.10(b).
"Superpriority Claim" shall mean a claim against the Borrower
and any Guarantor in any of the Cases which is an administrative expense claim
having priority over any or all administrative expenses of the kind specified in
Sections 503(b) or 507(b) of the Bankruptcy Code.
"Taxes" shall have the meaning given such term in
Section 2.14.
"Term Sheet" shall have the meaning given such term in the
Introductory Statement.
"Termination Date" shall mean the earliest to occur of (i) the
Prepayment Date, (ii) the Maturity Date, (iii) the Consummation Date and (iv)
the acceleration of the Loans and the termination of the Total Commitment in
accordance with the terms hereof.
"Termination Event" shall mean (i) a "reportable event", as
such term is described in Section 4043 of ERISA and the regulations issued
thereunder (other than a "reportable event" not subject to the provision for
30-day notice to the PBGC under Section 4043 of ERISA or such regulations) or an
event described in Section 4068 of ERISA excluding events described in Section
4043(c)(9) of ERISA or 29 CFR ss.ss.2615.21 or 2615.23 and excluding events
which would not be reasonably likely (as reasonably determined by the Agent) to
have a material adverse effect on the financial condition, operations, business,
properties or assets of the Borrower and the Guarantors taken as a whole, or
(ii) the withdrawal of the Borrower or any ERISA Affiliate from a Multiple
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Employer Plan during a plan year in which it was a "substantial employer", as
such term is defined in Section 4001(c) of ERISA, or the incurrence of liability
by the Borrower or any ERISA Affiliate under Section 4064 of ERISA upon the
termination of a Multiple Employer Plan, or (iii) providing notice of intent to
terminate a Plan pursuant to Section 4041(c) of ERISA or the treatment of a Plan
amendment as a termination under Section 4041 of ERISA, or (iv) the institution
of proceedings to terminate a Plan by the PBGC under Section 4042 of ERISA, or
(v) any other event or condition (other than the commencement of the Cases and
the failure to have made any contribution accrued as of the Filing Date but not
paid) which would reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the imposition of any liability under Title IV of ERISA
(other than for the payment of premiums to the PBGC).
"Total Commitment" shall mean, at any time, the sum of the
Commitments at such time.
"Transferee" shall have the meaning given such term in Section
2.14.
"Unused Total Commitment" shall mean, at any time, (i) the
Total Commitment less (ii) the sum of (x) the aggregate outstanding principal
amount of all Loans and (y) the aggregate Letter of Credit Outstandings.
"Withdrawal Liability" shall have the meaning given such term
under Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02 TERMS GENERALLY. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. All references herein to Sections,
Exhibits and Schedules shall be deemed references to Sections of, and Exhibits
and Schedules to, this Agreement unless the context shall otherwise require.
Except as otherwise expressly provided herein, all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; provided, however, that for purposes of determining compliance
with any covenant set forth in Section 6, such terms shall be construed in
accordance with GAAP as in effect on the date of this Agreement applied on a
basis consistent with the application used in the Borrower's audited financial
statements heretofore delivered to the Agent.
SECTION 2. AMOUNT AND TERMS OF CREDIT.
SECTION 2.01 COMMITMENT OF THE BANKS.
(a) Each Bank severally and not jointly with the other Banks
agrees, upon the terms and subject to the conditions herein set forth
(including, without limitation, the provisions of Section 2.23), to make
revolving credit loans (each a "Loan" and collectively, the "Loans") to the
Borrower at any time and from time to time during the period commencing on the
date hereof and
xv
ending on the Termination Date in an aggregate principal amount not to exceed,
when added to such Bank's Commitment Percentage of the then aggregate Letter of
Credit Outstandings, the Commitment of such Bank, which Loans may be repaid and
reborrowed in accordance with the provisions of this Agreement. At no time shall
the sum of the then outstanding aggregate principal amount of the Loans plus the
then aggregate Letter of Credit Outstandings exceed the Total Commitment of
$15,000,000, as the same may be reduced from time to time pursuant to Section
2.09.
(b) Each Borrowing shall be made by the Banks pro rata in
accordance with their respective Commitments; provided, however, that the
failure of any Bank to make any Loan shall not in itself relieve the other Banks
of their obligations to lend.
SECTION 2.02 LETTERS OF CREDIT.
(a) Upon the terms and subject to the conditions herein set
forth, the Borrower may request a Fronting Bank, at any time and from time to
time after the date hereof and prior to the Termination Date, to issue, and,
subject to the terms and conditions contained herein, such Fronting Bank shall
issue, for the account of the Borrower or a Guarantor one or more Letters of
Credit, provided that no Letter of Credit shall be issued if after giving effect
to such issuance (i) the aggregate Letter of Credit Outstandings shall exceed
$2,000,000 or (ii) the aggregate Letter of Credit Outstandings, when added to
the aggregate outstanding principal amount of the Loans, would exceed the Total
Commitment and, provided further that no Letter of Credit shall be issued if the
Fronting Bank shall have received notice from the Agent or the Required Banks
that the conditions to such issuance have not been met.
(b) No Letter of Credit shall expire later than 60 days after
the Maturity Date, provided that if any Letter of Credit shall be outstanding on
the Termination Date, the Borrower shall, at or prior to the Termination Date,
except as the Agent may otherwise agree in writing, (i) cause all Letters of
Credit which expire after the Termination Date to be returned to the Fronting
Bank undrawn and marked "cancelled" or (ii) if the Borrower is unable to do so
in whole or in part, either (x) provide a "back-to-back" letter of credit to one
or more Fronting Banks in a form satisfactory to such Fronting Bank and the
Agent (in their sole discretion), issued by a bank satisfactory to such Fronting
Bank and the Agent (in their sole discretion), is in an amount equal to 105% of
the then undrawn stated amount of all outstanding Letters of Credit issued by
such Fronting Banks and/or (y) deposit cash in the Letter of Credit Account in
an amount equal to 105% of the then undrawn stated amount of all outstanding
Letters of Credit as collateral security for the Borrower's reimbursement
obligations in connection therewith, such cash to be remitted to the Borrower
upon the expiration, cancellation or other termination or satisfaction of such
reimbursement obligations.
(c) The Borrower shall pay to each Fronting Bank, in addition
to such other fees and charges as are specifically provided for in Section 2.17
hereof, such fees and charges in connection with the issuance and processing of
the Letters of Credit issued by such Fronting Bank
xvi
as are customarily imposed by such Fronting Bank from time to time in connection
with letter of credit transactions.
(d) Drafts drawn under each Letter of Credit shall be
reimbursed by the Borrower in Dollars not later than the first Business Day
following the date of draw and shall bear interest from the date of draw until
reimbursed in full at a rate per annum equal to the Alternate Base Rate plus
1-1/2% (computed on the basis of the actual number of days elapsed over a year
of 360 days). The Borrower shall effect such reimbursement (x) if such draw
occurs prior to the Termination Date, in cash or through a Borrowing without the
satisfaction of the conditions precedent set forth in Section 4.01 or (y) if
such draw occurs on or after the Termination Date (or the earlier date of
termination of the Total Commitment), in cash. Each Bank agrees to make the
Loans described in clause (x) of the preceding sentence notwithstanding a
failure to satisfy the applicable lending conditions thereto or the provisions
of Section 2.23.
(e) Immediately upon the issuance of any Letter of Credit by
any Fronting Bank, such Fronting Bank shall be deemed to have sold to each Bank
other than such Fronting Bank and each such other Bank shall be deemed
unconditionally and irrevocably to have purchased from such Fronting Bank,
without recourse or warranty, an undivided interest and participation, to the
extent of such Bank's Commitment Percentage, in such Letter of Credit, each
drawing thereunder and the obligations of the Borrower and the Guarantors under
this Agreement with respect thereto. Upon any change in the Commitments pursuant
to Section 10.03, it is hereby agreed that with respect to all Letter of Credit
Outstandings, there shall be an automatic adjustment to the participations
hereby created to reflect the new Commitment Percentages of the assigning and
assignee Banks. Any action taken or omitted by a Fronting Bank under or in
connection with a Letter of Credit, if taken or omitted in the absence of gross
negligence or willful misconduct, shall not create for such Fronting Bank any
resulting liability to any other Bank.
(f) In the event that a Fronting Bank makes any payment under
any Letter of Credit and the Borrower shall not have reimbursed such amount in
full to such Fronting Bank pursuant to this Section, the Fronting Bank shall
promptly notify the Agent, which shall promptly notify each Bank of such
failure, and each Bank shall promptly and unconditionally pay to the Agent for
the account of the Fronting Bank the amount of such Bank's Commitment Percentage
of such unreimbursed payment in Dollars and in same day funds. If the Fronting
Bank so notifies the Agent, and the Agent so notifies the Banks prior to 11:00
a.m. (New York City time) on any Business Day, such Banks shall make available
to the Fronting Bank such Bank's Commitment Percentage of the amount of such
payment on such Business Day in same day funds. If and to the extent such Bank
shall not have so made its Commitment Percentage of the amount of such payment
available to the Fronting Bank, such Bank agrees to pay to such Fronting Bank,
forthwith on demand such amount, together with interest thereon, for each day
from such date until the date such amount is paid to the Agent for the account
of such Fronting Bank at the Federal Funds Effective Rate. The failure of any
Bank to make available to the Fronting Bank its Commitment Percentage of any
payment under any Letter of Credit shall not relieve any other Bank of its
obligation hereunder to make available to the Fronting Bank its Commitment
Percentage of any payment under any Letter of Credit on the date
xvii
required, as specified above, but no Bank shall be responsible for the failure
of any other Bank to make available to such Fronting Bank such other Bank's
Commitment Percentage of any such payment. Whenever a Fronting Bank receives a
payment of a reimbursement obligation as to which it has received any payments
from the Banks pursuant to this paragraph, such Fronting Bank shall pay to each
Bank which has paid its Commitment Percentage thereof, in Dollars and in same
day funds, an amount equal to such Bank's Commitment Percentage thereof.
SECTION 2.03 ISSUANCE. Whenever the Borrower desires a Fronting Bank to
issue a Letter of Credit, it shall give to such Fronting Bank and the Agent at
least two Business Days' prior written (including telegraphic, telex, facsimile
or cable communication) notice (or such shorter period as may be agreed upon by
the Agent, the Borrower and the Fronting Bank) specifying the date on which the
proposed Letter of Credit is to be issued (which shall be a Business Day), the
stated amount of the Letter of Credit so requested, the expiration date of such
Letter of Credit and the name and address of the beneficiary thereof.
SECTION 2.04 NATURE OF LETTER OF CREDIT OBLIGATIONS ABSOLUTE. The
obligations of the Borrower to reimburse the Banks for drawings made under any
Letter of Credit shall be unconditional and irrevocable and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including, without limitation (it being understood that any such payment by the
Borrower or any Guarantor shall be without prejudice to, and shall not
constitute a waiver of, any rights the Borrower might have or might acquire as a
result of the payment by the Fronting Bank of any draft or the reimbursement by
the Borrower or any Guarantor thereof): (i) any lack of validity or
enforceability of any Letter of Credit; (ii) the existence of any claim, setoff,
defense or other right which the Borrower or any Guarantor may have at any time
against a beneficiary of any Letter of Credit or against any of the Banks,
whether in connection with this Agreement, the transactions contemplated herein
or any unrelated transaction; (iii) any draft, demand, certificate or other
document presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; (iv) payment by a Fronting Bank of any Letter of
Credit against presentation of a demand, draft or certificate or other document
which does not comply with the terms of such Letter of Credit; (v) any other
circumstance or happening whatsoever, which is similar to any of the foregoing;
or (vi) the fact that any Event of Default shall have occurred and be
continuing.
SECTION 2.05 MAKING OF LOANS.
(a) Each Bank may fulfill its Commitment with respect to any
Loan by causing any lending office of such Bank to make such Loan; provided that
any such use of a lending office shall not affect the obligation of the Borrower
to repay such Loan in accordance with the terms of this Agreement. Each Bank
shall, subject to its overall policy considerations, use reasonable best efforts
to select a lending office which will not result in the payment of increased
costs by the Borrower pursuant to Section 2.12.
xviii
(b) The Borrower shall give the Agent prior notice of each
Borrowing hereunder of at least one Business Day; such notice shall be
irrevocable and shall specify the amount of the proposed Borrowing (which shall
not be less than $750,000) and the date thereof (which shall be a Business Day)
and shall contain disbursement instructions. Such notice, to be effective, must
be received by the Agent not later than 12:00 noon, New York City time, on the
first Business Day preceding the date on which such Borrowing is to be made
except as provided in the last sentence of this Section 2.05(b). The Agent shall
promptly notify each Bank of its proportionate share of such Borrowing and the
date of such Borrowing. On the borrowing date specified in such notice, each
Bank shall make its share of the Borrowing available at the office of the Agent
at Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, no later than 12:00
noon, New York City time, in immediately available funds. Upon receipt of the
funds made available by the Banks to fund any Borrowing hereunder, the Agent
shall disburse such funds in the manner specified in the notice of borrowing
delivered by the Borrower and shall use reasonable efforts to make the funds so
received from the Banks available to the Borrower no later than 2:00 p.m. New
York City time.
SECTION 2.06 REPAYMENT OF LOANS; EVIDENCE OF DEBT.
(a) The Borrower hereby unconditionally promises to pay to the
Agent for the account of each Bank the then unpaid principal amount of each Loan
on the Termination Date.
(b) Each Bank shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Bank resulting from each Loan made by such Bank, including the amounts of
principal and interest payable and paid to such Bank from time to time
hereunder.
(c) The Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Bank hereunder and (iii) the amount of any sum received by the Agent hereunder
for the account of the Banks and each Bank's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein (absent manifest
error); provided that the failure of any Bank or the Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Loans in accordance with the terms of this Agreement.
(e) Any Bank may request that Loans made by it be evidenced by
a promissory note. In such event, the Borrower shall execute and deliver to such
Bank a promissory note payable to the order of such Bank (or, if requested by
such Bank, to such Bank and its registered assigns) in a form furnished by the
Agent and reasonably acceptable to the Borrower. Thereafter, the Loans evidenced
by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.03) be represented by one or more promissory
notes in such form payable to
xix
the order of the payee named therein (or, if such promissory note is a
registered note, to such payee and its registered assigns).
SECTION 2.07 INTEREST ON LOANS.
(a) Subject to the provisions of Section 2.08, each Loan shall
bear interest (computed on the basis of the actual number of days elapsed over a
year of 360 days) at a rate per annum equal to the Alternate Base Rate plus
1-1/2%.
(b) Accrued interest on all Loans shall be payable in arrears
on the last calendar day of each month, at maturity (whether by acceleration or
otherwise), after such maturity, on demand, and upon any repayment or prepayment
thereof (but only on the amount so prepaid).
SECTION 2.08 DEFAULT INTEREST. If the Borrower or any Guarantor, as the
case may be, shall default in the payment of the principal of or interest on any
Loan or in the payment of any other amount becoming due hereunder (including,
without limitation, the reimbursement pursuant to Section 2.02(d) of any draft
drawn under a Letter of Credit), whether at stated maturity, by acceleration or
otherwise, the Borrower or such Guarantor, as the case may be, shall on demand
from time to time pay interest, to the extent permitted by law, on such
defaulted amount up to (but not including) the date of actual payment (after as
well as before judgment) at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days) equal to the Alternate
Base Rate plus 3-1/2%.
SECTION 2.09 OPTIONAL TERMINATION OR REDUCTION OF COMMITMENT. Upon at
least two Business Days' prior written notice to the Agent, the Borrower may at
any time in whole permanently terminate, or from time to time in part
permanently reduce, the Unused Total Commitment. Each such reduction of the
Commitments shall be in the principal amount of $1,000,000 or any integral
multiple thereof. Simultaneously with each reduction or termination of the
Commitment, the Borrower shall pay to the Agent for the account of each Bank the
Commitment Fee accrued, but unpaid, on the amount of the Commitment of such Bank
so terminated or reduced through the date thereof. Any reduction of the Total
Commitment pursuant to this Section shall be applied pro rata to reduce the
Commitment of each Bank.
SECTION 2.10 MANDATORY PREPAYMENT; COMMITMENT TERMINATION; CASH
COLLATERAL.
(a) If at any time the aggregate principal amount of the
outstanding Loans plus the aggregate Letter of Credit Outstandings exceeds the
Total Commitment, the Borrower will within three Business Days (i) prepay the
Loans in an amount necessary to cause the aggregate principal amount of the
outstanding Loans plus the aggregate Letter of Credit Outstandings to be equal
to or less than the Total Commitment, and (ii) if, after giving effect to the
prepayment in full of the Loans, the aggregate Letter of Credit Outstandings in
excess of the amount of cash held in the Letter of Credit Account exceeds the
Total Commitment, deposit into the Letter of Credit Account an amount
xx
equal to 105% of the amount by which the aggregate Letter of Credit Outstandings
in excess of the amount of cash held in the Letter of Credit Account so exceeds
the Total Commitment.
(b) Upon the sale of any of the assets or properties of the
Borrower or any of the Guarantors (other than pursuant to Sections 6.08(i) or
(ii) hereof), the Net Cash Proceeds thereof shall be paid to the Agent for
application as follows:
(i) If the Agent shall have a first Lien on such
assets or properties, the Net Cash Proceeds thereof shall be
applied first to the principal amount of the Loans then
outstanding and second be deposited into a segregated interest
bearing account with the Agent until an order of the
Bankruptcy Court is entered to the effect that any junior Lien
on such assets or properties asserted by any lienholder
(including, without limitation, the purported liens granted to
the lenders under the Existing Agreements by the Borrower and
the Guarantors) is valid, perfected, binding and enforceable
against the Borrower or the Guarantors but for the filing of
the Cases at which time the Net Cash Proceeds shall be applied
as the Bankruptcy Court may direct in its order; and
(ii) If the Agent shall have a junior Lien on such
assets or properties, the Net Cash Proceeds thereof shall be
deposited into a segregated interest bearing account and shall
not be paid over to any prior lienholder unless and until an
order of the Bankruptcy Court is entered to the effect that
the Lien asserted by any such lienholder on such assets or
properties (including, without limitation, the purported liens
granted to the lenders under the Existing Agreement by the
Borrower and the Guarantors) is valid, perfected, binding and
enforceable against the Borrower or the Guarantors but for the
filing of the Cases at which time the Net Cash Proceeds
thereof shall be applied as the Bankruptcy Court may direct in
its order.
(c) Upon the Termination Date, the Total Commitment shall be
terminated in full and the Borrower shall pay the Loans in full and, except as
the Agent may otherwise agree in writing, if any Letter of Credit remains
outstanding, deposit into the Letter of Credit Account an amount equal to 105%
of the amount by which the sum of the aggregate Letter of Credit Outstandings
exceeds the amount of cash held in the Letter of Credit Account, such cash to be
remitted to the Borrower upon the expiration, cancellation, satisfaction or
other termination of such reimbursement obligations, or otherwise comply with
Section 2.02(b).
SECTION 2.11 OPTIONAL PREPAYMENT OF LOANS. The Borrower shall have the
right at any time and from time to time to prepay any Loans, in whole or in
part, on the same Business Day if written, telex or facsimile notice is received
by the Agent prior to 1:00 p.m., New York City time, and thereafter upon at
least one Business Day's prior written, telex or facsimile notice to the Agent;
provided, however, that each such partial prepayment shall be in multiples of
$100,000. Each notice of prepayment shall specify the prepayment date, the
principal amount of the Loans to be prepaid, shall be irrevocable and shall
commit the Borrower to prepay such Loan by the amount and on the
xxi
date stated therein. The Agent shall, promptly after receiving notice from the
Borrower hereunder, notify each Bank of the principal amount of the Loans held
by such Bank which are to be prepaid, the prepayment date and the manner of
application of the prepayment.
SECTION 2.12 RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES.
(a) If any Bank shall have determined that the adoption or
effectiveness after the date hereof of any law, rule, regulation or guideline
regarding capital adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or any lending office of such
Bank) or any Bank's holding company 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, has or would have the effect of reducing the
rate of return on such Bank's capital or on the capital of such Bank's holding
company, if any, as a consequence of this Agreement, the Loans made by such Bank
pursuant hereto, such Bank's Commitment hereunder or the issuance of, or
participation in, any Letter of Credit by such Bank to a level below that which
such Bank or such Bank's holding company could have achieved but for such
adoption, change or compliance (taking into account Bank's policies and the
policies of such Bank's holding company with respect to capital adequacy) by an
amount reasonably deemed by such Bank to be material, then from time to time the
Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank or such Bank's holding company for any such reduction
suffered.
(b) A certificate of each Bank setting forth such amount or
amounts as shall be necessary to compensate such Bank or its holding company as
specified in paragraph (a) above, shall be delivered to the Borrower and shall
be conclusive absent manifest error. The Borrower shall pay each Bank the amount
shown as due on any such certificate delivered to it within 10 days after its
receipt of the same. Any Bank receiving any such payment shall promptly make a
refund thereof to the Borrower if the law, regulation, guideline or change in
circumstances giving rise to such payment is subsequently deemed or held to be
invalid or inapplicable.
SECTION 2.13 PRO RATA TREATMENT, ETC. All payments and repayments of
principal and interest in respect of the Loans (except as provided in Section
2.12) shall be made pro rata among the Banks in accordance with the then
outstanding principal amount of the Loans and/or participations in Letter of
Credit Outstandings and all outstanding undrawn Letters of Credit (and the
unreimbursed amount of drawn Letters of Credit) hereunder and all payments of
Commitment Fees and Letter of Credit Fees (other than those payable to a
Fronting Bank) shall be made pro rata among the Banks in accordance with their
Commitments. All payments by the Borrower hereunder shall be (i) net of any tax
applicable to the Borrower or Guarantor and (ii) made in Dollars in immediately
available funds at the office of the Agent by 12:00 noon, New York City time, on
the date on which such payment shall be due. Interest in respect of any Loan
hereunder shall accrue from and including the date of such Loan to but excluding
the date on which such Loan is paid in full.
xxii
SECTION 2.14 TAXES.
(a) Any and all payments by the Borrower or any Guarantor
hereunder shall be made free and clear of and without deduction for any and all
current or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding (i) taxes imposed on or
measured by the net income or overall gross receipts of the Agent or any Bank
(or any transferee or assignee thereof, including a participation holder (any
such entity being called a "Transferee")) and franchise taxes imposed on the
Agent or any Bank (or Transferee) by the United States or any jurisdiction under
the laws of which the Agent or any such Bank (or Transferee) is organized or in
which the applicable lending office of any such Bank (or Transferee) is located
or any political subdivision thereof or by any other jurisdiction or by any
political subdivision or taxing authority therein other than a jurisdiction in
which the Agent or such Bank (or Transferee) would not be subject to tax but for
the execution and performance of this Agreement and (ii) taxes, levies, imposts,
deductions, charges or withholdings ("Amounts") with respect to payments
hereunder to a Bank (or Transferee) in accordance with laws in effect on the
later of the date of this Agreement and the date such Bank (or Transferee)
becomes a Bank (or Transferee, as the case may be), but not excluding, with
respect to such Bank (or Transferee), any increase in such Amounts solely as a
result of any change in such laws occurring after such later date or any Amounts
that would not have been imposed but for actions (other than actions
contemplated by this Agreement) taken by the Borrower after such later date (all
such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower or any
Guarantor shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder to the Banks (or any Transferee) or the Agent, (i) the sum
payable shall be increased by the amount necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) such Bank (or Transferee) or the Agent (as the case may be)
shall receive an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxing authority or
other Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any current or
future stamp or documentary taxes or any other excise or property taxes,
charges, assessments 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 or any other Loan Document (hereinafter referred to
as "Other Taxes").
(c) The Borrower will indemnify each Bank (or Transferee) and
the Agent for the full amount of Taxes and Other Taxes paid by such Bank (or
Transferee) or the Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant taxing authority or other Governmental Authority. Such
indemnification shall be made within 30 days after the date any Bank (or
Transferee) or the Agent, as the case may be, makes written demand therefor. If
a Bank (or Transferee) or the Agent shall become aware that it is entitled to
receive a refund in respect of Taxes or Other Taxes as to which it has been
indemnified by the
xxiii
Borrower pursuant to this Section, it shall promptly notify the Borrower of the
availability of such refund and shall, within 15 days after receipt of a request
by the Borrower, apply for such refund at the Bank's expense. If any Bank (or
Transferee) or the Agent receives a refund in respect of any Taxes or Other
Taxes as to which it has been indemnified by the Borrower pursuant to this
Section, it shall promptly notify the Borrower of such refund and shall, within
5 Business Days after receipt of a request by the Borrower, repay such refund to
the Borrower (to the extent of amounts that have been paid by the Borrower under
this Section with respect to such refund plus interest that is received by the
Bank (or Transferee) or the Agent as part of the refund); provided that the
Borrower, upon the request of such Bank (or Transferee) or the Agent, agrees to
return such refund (plus penalties, interest or other charges) to such Bank (or
Transferee) or the Agent in the event such Bank (or Transferee) or the Agent is
required to repay such refund. Nothing contained in this subsection (c) shall
require any Bank (or Transferee) or the Agent to make available any of its tax
returns (or any other information relating to its taxes that it reasonably deems
upon advice of outside counsel to be confidential).
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes withheld by the Borrower in respect of any payment to any Bank (or
Transferee) or the Agent, the Borrower will furnish to the Agent, at its address
referred to on the signature pages hereof, the original or a certified copy of a
receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section shall
survive the payment in full of the principal of and interest on all Loans made
hereunder.
(f) Each Bank (or Transferee) that is organized under the laws
of a jurisdiction outside the United States shall, if legally able to do so,
prior to the immediately following due date of any payment by the Borrower
hereunder, deliver to the Borrower such certificates, documents or other
evidence, as required by the Code or Treasury Regulations issued pursuant
thereto, including (A) Internal Revenue Service Form W-8 or W-9 and (B) Internal
Revenue Service Form 1001 or Form 4224 and any other certificate or statement of
exemption required by Treasury Regulation Section 1.1441-1, 1.1441-4 or
1.1441-6(c) or any subsequent version thereof or successors thereto, properly
completed and duly executed by such Bank (or Transferee) establishing that such
payment is (i) not subject to United States Federal withholding tax under the
Code because such payment is effectively connected with the conduct by such Bank
(or Transferee) of a trade or business in the United States or (ii) totally
exempt from United States Federal withholding tax or subject to a reduced rate
of such tax under a provision of an applicable tax treaty. Unless the Borrower
and the Agent have received forms or other documents satisfactory to them
indicating that such payments hereunder or are not subject to United States
Federal withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty, the Borrower or the Agent shall withhold taxes from such
payments at the applicable statutory rate.
(g) The Borrower shall not be required to pay any additional
amounts to any Bank (or Transferee) in respect of United States Federal
withholding tax pursuant to subsection (a) above
xxiv
if the obligation to pay such additional amounts would not have arisen but for a
failure by such Bank (or Transferee) to comply with the provisions of subsection
(f) above.
(h) Any Bank (or Transferee) claiming any additional amounts
payable pursuant to this Section 2.14 shall use reasonable efforts (consistent
with legal and regulatory restrictions) to file any certificate or document
requested by the 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 additional amounts that may thereafter accrue
and would not, in the sole reasonable determination of such Bank (or
Transferee), be otherwise materially disadvantageous to such Bank (or
Transferee).
SECTION 2.15 CERTAIN FEES. The Borrower has paid to the Agent, for its
own account, an advisory and restructuring fee of $75,000. The Borrower shall
pay (i) to the Agent, for the respective accounts of the Banks, a facility fee
in an aggregate amount equal to $275,000, one-half of which has heretofore been
paid by the Borrower to the Agent and the balance of which shall be payable upon
the entry of the Final Order and (ii) to the Agent, for its own account, an
annual administrative agent's fee of $125,000, (x) $25,000 of which shall be
payable upon the entry of the Final Order, (y) $25,000 of which shall be payable
on October 15, 2000, and (z) $25,000, payable in advance each quarter
thereafter, commencing on January 15, 2001.
SECTION 2.16 COMMITMENT FEE. The Borrower shall pay to the Banks a
commitment fee (the "Commitment Fee") for the period commencing on May 9, 2000
to the Termination Date or the earlier date of termination of the Commitment,
computed (on the basis of the actual number of days elapsed over a year of 360
days) at the rate of one percent (1%) per annum on the average daily Unused
Total Commitment. Such Commitment Fee, to the extent then accrued and unpaid,
shall be payable (x) monthly, in arrears, on the last calendar day of each
month, (y) on the Termination Date and (z) as provided in Section 2.09 hereof,
upon any reduction or termination in whole or in part of the Total Commitment.
SECTION 2.17 LETTER OF CREDIT FEES. The Borrower shall pay with respect
to each Letter of Credit (i) to the Agent on behalf of the Banks a fee
calculated (on the basis of the actual number of days elapsed over a year of 360
days) at the rate of (x) two percent (2%) per annum on the daily average Letter
of Credit Outstandings and (ii) to the Fronting Bank such Fronting Bank's
customary fees for issuance, amendments and processing referred to in Section
2.02. In addition, the Borrower agrees to pay each Fronting Bank for its account
a fronting fee in respect of each Letter of Credit issued by such Fronting Bank,
for the period from and including the date of issuance of such Letter of Credit
to and including the date of termination of such Letter of Credit, computed at a
rate, and payable at times, to be determined by such Fronting Bank, the Borrower
and the Agent. Accrued fees described in clause (i) of the first sentence of
this paragraph in respect of each Letter of Credit shall be due and payable
monthly in arrears on the last calendar day of each month and on the Termination
Date, or such earlier date as the Total Commitment is terminated. Accrued fees
described in clause (ii) of the first sentence of this paragraph in respect of
each Letter of Credit shall be payable at times to be determined by the Fronting
Bank, the Borrower and the Agent.
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SECTION 2.18 NATURE OF FEES. All Fees shall be paid on the dates due,
in immediately available funds, to the Agent for the respective accounts of the
Agent and the Banks, as provided herein. Once paid, none of the Fees shall be
refundable under any circumstances.
SECTION 2.19 RIGHT OF SET-OFF. Subject to the provisions of Section
7.01 (including the requirement to give five (5) Business Days notice as
required in the last paragraph of Section 7.01), upon the occurrence and during
the continuance of any Event of Default, the Agent and each Bank (and each
Affiliate thereof) is hereby authorized at any time and from time to time, to
the fullest extent permitted by law and without further order of or application
to the Bankruptcy Court, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Agent and each such Bank to or for the
credit or the account of the Borrower or any Guarantor against any and all of
the obligations of such Borrower or Guarantor now or hereafter existing under
the Loan Documents, irrespective of whether or not such Bank shall have made any
demand under any Loan Document and although such obligations may not have been
accelerated. Each Bank and the Agent agrees promptly to notify the Borrower and
Guarantors after any such set-off and application made by such Bank or by the
Agent, as the case may be, provided that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of each Bank
and the Agent under this Section are in addition to other rights and remedies
which such Bank and the Agent may have upon the occurrence and during the
continuance of any Event of Default.
SECTION 2.20 SECURITY INTEREST IN LETTER OF CREDIT ACCOUNT. Pursuant to
Section 364(c)(2) of the Bankruptcy Code, the Borrower and the Guarantors hereby
assign and pledge to the Agent, for its benefit and for the ratable benefit of
the Banks, and hereby grant to the Agent, for its benefit and for the ratable
benefit of the Banks, a first priority security interest, senior to all other
Liens, if any, in all of the Borrower's and the Guarantors' right, title and
interest in and to the Letter of Credit Account and any direct investment of the
funds contained therein. Cash held in the Letter of Credit Account shall not be
available for use by the Borrower, whether pursuant to Section 363 of the
Bankruptcy Code or otherwise.
SECTION 2.21 PAYMENT OF OBLIGATIONS. Subject to the provisions of
Section 7.01, upon the maturity (whether by acceleration or otherwise) of any of
the Obligations under this Agreement or any of the other Loan Documents of the
Borrower and the Guarantors, the Banks shall be entitled to immediate payment of
such Obligations without further application to or order of the Bankruptcy
Court.
SECTION 2.22 NO DISCHARGE; SURVIVAL OF CLAIMS. Each of the Borrower and
the Guarantors agrees that (i) its obligations hereunder shall not be discharged
by the entry of an order confirming a Plan of Reorganization (and each of the
Borrower and the Guarantors, pursuant to Section 1141(d)(4) of the Bankruptcy
Code, hereby waives any such discharge) and (ii) the Superpriority Claim granted
to the Agent and the Banks pursuant to the Order and the Liens granted to the
Agent pursuant to the Order shall not be affected in any manner by the entry of
an order confirming a Plan of Reorganization.
xxvi
SECTION 2.23 USE OF CASH COLLATERAL. Notwithstanding anything to the
contrary contained herein, the Borrower shall not be permitted (i) to request a
Borrowing under Section 2.05 or request the issuance of a Letter of Credit under
Section 2.03 unless the Bankruptcy Court shall have entered the Interim Order or
(ii) to request a Borrowing under Section 2.05 unless the Borrower and the
Guarantors shall at that time have used all of the cash collateral available for
disbursements subject to the Orders.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to make Loans and issue and/or
participate in Letters of Credit hereunder, the Borrower and each of the
Guarantors jointly and severally represent and warrant as follows:
SECTION 3.01 ORGANIZATION AND AUTHORITY. Each of the Borrower and the
Guarantors (i) is a corporation duly organized and validly existing under the
laws of the State of its incorporation and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which the failure to
so qualify or be in good standing would have a Material Adverse Effect; (ii)
subject to the entry by the Bankruptcy Court of the Interim Order (or the Final
Order, when applicable) has the requisite corporate power and authority to
effect the transactions contemplated hereby, and by the other Loan Documents to
which it is a party, and (iii) subject to the entry by the Bankruptcy Court of
the Interim Order (or the Final Order, when applicable) has all requisite
corporate power and authority and the legal right to own, pledge, mortgage and
operate its properties, and to conduct its business as now or currently proposed
to be conducted.
SECTION 3.02 DUE EXECUTION. Upon the entry by the Bankruptcy Court of
the Interim Order (or the Final Order, when applicable), the execution, delivery
and performance by each of the Borrower and the Guarantors of each of the Loan
Documents to which it is a party (i) are within the respective corporate powers
of each of the Borrower and the Guarantors, have been duly authorized by all
necessary corporate action including the consent of shareholders where required,
and do not (A) contravene the charter or by-laws of any of the Borrower or the
Guarantors, (B) violate any law (including, without limitation, the Securities
Exchange Act of 1934) or regulation (including, without limitation, Regulations
T, U or X of the Board of Governors of the Federal Reserve System), or any order
or decree of any court or governmental instrumentality, (C) conflict with or
result in a breach of, or constitute a default under, any material indenture,
mortgage or deed of trust entered into after the Filing Date or any lease,
agreement or other instrument entered into after the Filing Date binding on the
Borrower or the Guarantors or any of their properties (other than where such
breach or default would not have a Material Adverse Effect), or (D) result in or
require the creation or imposition of any Lien upon any of the property of any
of the Borrower or the Guarantors other than the Liens granted pursuant to this
Agreement, the other Loan Documents or the Orders; and do not require the
consent, authorization by or approval of or notice to or filing or registration
with any Governmental Authority other than the entry of the Orders. Upon the
entry by the Bankruptcy Court of the Interim Order (or the Final Order, when
applicable), (x) this Agreement has been duly executed and delivered by each of
the Borrower and the Guarantors; and (y) this
xxvii
Agreement is, and each of the other Loan Documents to which the Borrower and
each of the Guarantors is or will be a party, when delivered hereunder or
thereunder, will be, a legal, valid and binding obligation of the Borrower and
each Guarantor, as the case may be, enforceable against the Borrower and the
Guarantors, as the case may be, in accordance with its terms and the Orders.
SECTION 3.03 STATEMENTS MADE. The information that has been delivered
in writing by the Borrower or any of the Guarantors to the Agent or to the
Bankruptcy Court in connection with any Loan Document, and any financial
statement delivered pursuant hereto or thereto (other than to the extent that
any such statements constitute projections), taken as a whole and in light of
the circumstances in which made, contains no untrue statement of a material fact
and does not omit to state a material fact necessary to make such statements not
misleading.
SECTION 3.04 FINANCIAL STATEMENTS. To the extent the Borrower has
furnished any projections of the financial position and results of operations of
the Borrower and its consolidated Subsidiaries for, or as at the end of, certain
future periods, such projections were believed at the time furnished to be
reasonable, have been or will have been prepared on a reasonable basis and in
good faith by the Borrower and its consolidated Subsidiaries, and have been or
will be based on assumptions believed by the Borrower and its consolidated
Subsidiaries to be reasonable at the time made and upon the best information
then reasonably available to the Borrower and its consolidated Subsidiaries.
There is no fact adversely affecting the condition or operations, financial or
otherwise, of the business or prospects of the Borrower or any of its
consolidated Subsidiaries which has not been set forth in a footnote included in
the financial statements previously delivered to the Agent and the Lenders, in a
schedule to this Agreement or in any other written information delivered to the
Agent prior to the Closing Date.
SECTION 3.05 OWNERSHIP. Each of the Persons listed on Schedule 3.05 is
a wholly-owned, direct or indirect Subsidiary of the Borrower and, except as set
forth on Schedule 3.05, the Borrower owns no other Subsidiaries, whether
directly or indirectly.
SECTION 3.06 LIENS. Except for Liens existing on the Filing Date as
reflected on Schedule 3.06, there are no Liens of any nature whatsoever on any
assets of the Borrower or any of its Subsidiaries other than Liens permitted
pursuant to Section 6.01.
SECTION 3.07 COMPLIANCE WITH LAW.
(a) (i) To the knowledge of the Borrower and each of its
Subsidiaries, the operations of the Borrower and its Subsidiaries comply in all
material respects with all applicable environmental, health and safety statutes
and regulations, including, without limitation, regulations promulgated under
the Resource Conservation and Recovery Act (42 U.S.C. xx.xx. 6901 et seq.); (ii)
to the Borrower's and each of its Subsidiaries' knowledge, none of the
operations of the Borrower or its Subsidiaries is the subject of any Federal or
state investigation evaluating whether any remedial action involving a material
expenditure by the Borrower or any Subsidiary is needed to respond to a release
of any Hazardous Waste or Hazardous Substance (as such terms are defined in any
xxviii
applicable state or Federal environmental law or regulations) into the
environment; and (iii) to the Borrower's and each of its Subsidiaries'
knowledge, the Borrower and its Subsidiaries do not have any material contingent
liability in connection with any release of any Hazardous Waste or Hazardous
Substance into the environment.
(b) Neither the Borrower nor its Subsidiaries is, to the best
of its knowledge, in violation of any law, rule or regulation, or in default
with respect to any judgment, writ, injunction or decree of any Governmental
Authority the violation of which, or a default with respect to which, would have
a Material Adverse Effect.
SECTION 3.08 INSURANCE. A schedule of all existing policies of
insurance of any kind or nature owned by or issued to the Borrower and its
Subsidiaries, including, without limitation, existing policies of life, fire,
theft, product liability, public liability, property damage, other casualty,
employee fidelity, workers' compensation, employee health and welfare, title,
property and liability insurance, has been delivered to the Agent.
SECTION 3.09 THE ORDERS. On the date of the making of the initial Loans
or the issuance of the initial Letters of Credit hereunder, whichever first
occurs, the Interim Order will have been entered and will not have been stayed,
amended, vacated, reversed or rescinded (without the prior written consent of
the Agent). On the date of the making of any Loan or the issuance of any Letter
of Credit, the Interim Order or the Final Order, as the case may be, shall have
been entered and shall not have been amended, stayed, vacated or rescinded
(without the prior written consent of the Agent). Upon the maturity (whether by
the acceleration or otherwise) of any of the obligations of the Borrower and the
Guarantors hereunder and under the other Loan Documents, the Banks shall,
subject to the provisions of Section 7.01 (including the requirement to give
five (5) Business Days notice as required in the last paragraph of Section
7.01), be entitled to immediate payment of such obligations, and to enforce the
remedies provided for hereunder, without further application to or order by the
Bankruptcy Court.
SECTION 3.10 USE OF PROCEEDS. The proceeds of the Loans shall be used
(i) for working capital purposes of the Borrower and the Guarantors; (ii) to pay
post-petition operating expenses of the Borrower and Guarantors including the
payment in the Cases of professional fees and expenses of the Borrower and
Guarantors and of the Committee, as well as the Statutory Fees; (iii) for up to
(w) $3,500,000 in capital expenditures for fiscal year ending December 31, 2000,
(x) $3,600,000 in capital expenditures for fiscal year ending December 31, 2001,
(y) $3,200,000 in the aggregate for construction costs in connection with the
following sites: Encino/Balboa, California, Fremont, California and Wichita,
Kansas in accordance with the Budget and (z) an amount up to $1,000,000 for
construction costs in connection with the site in San Bruno, California, but
only to the extent, if any, that such construction is required pursuant to the
terms of a lease involving the Borrower or any of its Subsidiaries relating to
such site and only if the Borrower provides the Agent with written evidence that
such construction is required by such lease subject to review of the
construction budget and agreement between the Agent and the Borrower with
respect
xxix
thereto; and (iv) for such other purposes as may be agreed to in writing between
the Borrower and the Required Banks.
SECTION 3.11 LITIGATION. Other than as set forth on Schedule 3.11,
there are no unstayed actions, suits or proceedings pending or, to the knowledge
of the Borrower or any of the Guarantors, threatened against or affecting the
Borrower or the Guarantors or any of their respective properties, before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which is reasonably likely to be
determined adversely to the Borrower or the Guarantors and, if so determined
adversely to the Borrower or the Guarantors would have a material adverse effect
on the operations, business, properties, assets, prospects or condition
(financial or otherwise) of the Borrower and the Guarantors, taken as a whole.
SECTION 4. CONDITIONS OF LENDING
SECTION 4.01 CONDITIONS PRECEDENT TO EACH LOAN AND EACH LETTER OF
CREDIT. The obligation of the Banks to make each Loan and of the Fronting Bank
to issue each Letter of Credit from and after the entry by the Bankruptcy Court
of the Final Order is subject to the following conditions precedent:
(a) Notice. The Agent shall have received a notice with
respect to such borrowing or issuance, as the case may be, as required by
Section 2.
(b) Representations and Warranties. All representations and
warranties contained in this Agreement and the other Loan Documents shall be
true and correct in all material respects on and as of the date of each
Borrowing or the issuance of each Letter of Credit hereunder with the same
effect as if made on and as of such date except to the extent such
representations and warranties expressly relate to an earlier date.
(c) No Default. On the date of each Borrowing hereunder or the
issuance of each Letter of Credit, no Event of Default or event which upon
notice or lapse of time or both would constitute an Event of Default shall have
occurred and be continuing.
(d) Orders. The Final Order in the form of Exhibit A-2 shall
be in full force and effect and shall not have been stayed, reversed, modified
or amended in any respect without the prior written consent of the Agent.
(e) Security and Pledge Agreement. The Borrower and each of
the Guarantors shall have duly executed and delivered to the Agent a Security
and Pledge Agreement in substantially the form of Exhibit B (the "Security and
Pledge Agreement").
(f) Corporate and Judicial Proceedings. All corporate and
judicial proceedings and all instruments and agreements in connection with the
transactions among the Borrower, the Guarantors, the Agent and the Banks
contemplated by this Agreement shall be reasonably
xxx
satisfactory in form and substance to the Agent, and the Agent shall have
received all information and copies of all documents and papers, including
records of corporate and judicial proceedings, which the Agent may have
reasonably requested in connection therewith.
(g) Information. The Agent shall have received such
information (financial or otherwise) as may be reasonably requested by the
Agent.
(h) Compliance with Laws. The Borrower and the Guarantors
shall have granted the Agent access to and the right to inspect all reports,
audits and other internal information of the Borrower and the Guarantors
relating to environmental matters, and any third party verification of certain
matters relating to compliance with environmental laws and regulations requested
by the Agent, and the Agent shall be reasonably satisfied that the Borrower and
the Guarantors are in compliance in all material respects with all applicable
environmental laws and regulations and be satisfied with the costs of
maintaining such compliance.
(i) Closing Documents. The Agent shall have received all
documents required by this Agreement reasonably satisfactory in form and
substance to the Agent.
(j) Payment of Fees. The Borrower shall have paid to the Agent
the then unpaid balance of all accrued and unpaid Fees then due and payable
under and pursuant to this Agreement.
The request by the Borrower for, and the acceptance by the Borrower of, each
extension of credit hereunder shall be deemed to be a representation and
warranty by the Borrower that the conditions specified in this Section have been
satisfied or waived at that time.
SECTION 5. AFFIRMATIVE COVENANTS
From the date hereof and for so long as any Commitment shall
be in effect or any Letter of Credit shall remain outstanding (in a face amount
in excess of the amount of cash then held in the Letter of Credit Account, or in
excess of the face amount of back-to-back letters of credit delivered, in each
case pursuant to Section 2.02(b)), or any amount shall remain outstanding or
unpaid under this Agreement, the Borrower and each of the Guarantors agree that,
unless the Required Banks shall otherwise consent in writing, the Borrower and
each of the Guarantors will:
SECTION 5.01 FINANCIAL STATEMENTS, REPORTS, ETC. In the case of the
Borrower and the Guarantors, deliver to the Agent and each of the Banks:
(a) within 105 days after the end of each fiscal year, the
Borrower's comparative consolidated balance sheet and related comparative
consolidated statement of income, retained earnings and cash flows, showing the
financial condition of the Borrower and its Subsidiaries on a consolidated basis
as of the close of such fiscal year and the results of their respective
operations during such year, the consolidated statement of the Borrower to be
audited for the Borrower and its Subsidiaries by Xxxxxxx X. Xxxxxx & Company,
LLC or other independent public accountants of
xxxi
recognized national standing acceptable to the Required Banks and accompanied by
an opinion of such accountants (which shall not be qualified in any material
respect other than with respect to the Cases or a going concern qualification)
and to be certified by a Financial Officer of the Borrower to the effect that
such consolidated and consolidating financial statements fairly present the
financial condition and results of operations of the Borrower and its
Subsidiaries on a consolidated and consolidating basis in accordance with GAAP
in all material respects;
(b) within 50 days after the end of each of the first three
fiscal quarters and within 105 days after the end of the fourth fiscal quarter
of each fiscal year, the Borrower's comparative consolidated balance sheets and
related comparative consolidated statements of income and cash flows, showing
the financial condition of the Borrower and its Subsidiaries on a consolidated
basis as of the close of such fiscal quarter and the results of their operations
during such fiscal quarter and the then elapsed portion of the fiscal year, each
certified by a Financial Officer as fairly presenting the financial condition
and results of operations of the Borrower and its Subsidiaries on a consolidated
basis in accordance with GAAP in all material respects, subject to normal
year-end audit adjustments;
(c) concurrently with any delivery of financial statements
under (a) or (b) above as applicable, a certificate of a Financial Officer
certifying such statements (A) certifying that no Event of Default or event
which upon notice or lapse of time or both would constitute an Event of Default
has occurred, or, if such an Event of Default or event has occurred, specifying
the nature and extent thereof and any corrective action taken or proposed to be
taken with respect thereto and (B) setting forth computations in reasonable
detail satisfactory to the Agent demonstrating compliance with the provisions of
Section 6.04;
(d) as soon as available, but no more than 45 days after the
end of each month, the unaudited monthly cash flow reports of the Borrower and
its Subsidiaries on a consolidated basis and as of the close of such fiscal
month and the results of their operations during such fiscal period and the then
elapsed portion of the fiscal year;
(e) as soon as possible, and in any event within 60 days of
the Closing Date, a consolidated pro forma balance sheet of the Borrower's and
its Subsidiaries' financial condition as of the Filing Date;
(f) following the end of each fiscal year of the Borrower (or
more frequent if prepared by the Borrower), an update (prepared in form and
available for distribution in accordance with the Borrower's customary
practices) of the Budget satisfactory in form and substance to the Agent;
(g) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials filed by
it with the Securities and Exchange Commission, or any governmental authority
succeeding to any of or all the functions of said commission, or with any
national securities exchange, as the case may be;
xxxii
(h) any reports on such other information (including updates
with respect to construction payables and progress reports), as the Agent, at
the request of any Bank, may from time to time reasonably request; and
(i) furnish to the Agent and its counsel promptly after the
same is available, copies of all pleadings, motions, applications, judicial
information, financial information and other documents filed by or on behalf of
the Borrower or any of the Guarantors with the Bankruptcy Court in the Cases.
SECTION 5.02 CORPORATE EXISTENCE. Preserve and maintain in full force
and effect all governmental rights, privileges, qualifications, permits,
licenses and franchises necessary in the normal conduct of its business except
(i)(A) if in the reasonable business judgment of the Borrower or such Guarantor,
as the case may be, it is in its best economic interest not to preserve and
maintain such rights, privileges, qualifications, permits, licenses and
franchises, and (B) such failure to preserve the same could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 5.03 INSURANCE. Maintain insurance on all its properties in a
manner reasonably acceptable to the Agent.
SECTION 5.04 OBLIGATIONS AND TAXES. With respect to the Borrower and
each Guarantor, pay all its material obligations arising after the Filing Date
promptly and in accordance with their terms and pay and discharge promptly all
material taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits or in respect of its property arising after the
Filing Date, before the same shall become in default, as well as all material
lawful claims for labor, materials and supplies or otherwise arising after the
Filing Date which, if unpaid, would become a Lien or charge upon such properties
or any part thereof; provided, however, that the Borrower and each Guarantor
shall not be required to pay and discharge or to cause to be paid and discharged
any such tax, assessment, charge, levy or claim so long as the validity or
amount thereof shall be contested in good faith by appropriate proceedings (if
the Borrower and the Guarantors shall have set aside on their books adequate
reserves therefor).
SECTION 5.05 NOTICE OF EVENT OF DEFAULT. As soon as practicable give to
the Agent notice in writing of any Event of Default or the occurrence of any
event or circumstance which with the passage of time or giving of notice or both
would constitute an Event of Default.
SECTION 5.06 MAINTENANCE OF CONCENTRATION ACCOUNTS. Continue to
maintain with the Agent the collection account system and an account or accounts
to be used by the Borrower and the Guarantors as their principal concentration
accounts for day-to-day operations conducted by the Borrower and the Guarantors.
SECTION 5.07 BOOKS AND RECORDS, INSPECTION AND COLLATERAL REVIEW
RIGHTS.
xxxiii
The Borrower will, and will cause each of its Subsidiaries to,
keep proper books of record and account in which full, true and correct entries
in conformity with GAAP in all material respects on a consolidated basis. The
Borrower will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Agent, upon reasonable prior notice, to visit
and inspect its financial records and properties, to examine and make extracts
from its books and records, and to discuss its affairs, finances and condition
with its officers and independent accountants, all at such reasonable times and
as often as reasonably requested.
SECTION 5.08 MAINTENANCE OF EXISTENCE, ETC. (a) (i) Preserve, renew and
keep in full force and effect is corporate existence (except as otherwise
permitted by Section 6.08 and (ii) take all reasonable action to maintain all
rights, privileges and franchises necessary or desirable in the normal conduct
of its business, except, in each case, as otherwise permitted by Section 6.08
and except, in the case of clause (ii) above, to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect; and (b)
comply with all Contractual Obligations and Requirements of Law except to the
extent that failure to comply therewith could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.
SECTION 5.09 CANADIAN ASSETS. To the extent permitted by law and not in
violation of existing contracts and subject to existing Liens, execute and
deliver to the Agent, as soon as reasonably practicable, such agreements,
documents and instruments necessary in order to create and perfect its Liens and
security interests in the assets of the Borrower and its Subsidiaries located in
Canada.
SECTION 5.10 FINANCIAL ADVISOR. Retain Zolfo Xxxxxx LLP as its
financial advisor pursuant to an order of the Bankruptcy Court which order shall
have been entered no later than July 10, 2000.
SECTION 5.11 INVESTMENTS. Make investments in accordance with Section
345 of the Bankruptcy Code.
SECTION 5.12 INSURANCE POLICIES. Provide the Agent with a copy of any
insurance policy described in Section 3.08, by no later than two weeks after the
Agent's request therefor.
SECTION 6. NEGATIVE COVENANTS
From the date hereof and for so long as any Commitment shall
be in effect or any Letter of Credit shall remain outstanding (in a face amount
in excess of the amount of cash then held in the Letter of Credit Account, or in
excess of the face amount of back-to-back letters of credit delivered, in each
case pursuant to Section 2.02(b)) or any amount shall remain outstanding or
unpaid under this Agreement, unless the Required Banks shall otherwise consent
in writing, the
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Borrower and each of the Guarantors will not (and will not apply to the
Bankruptcy Court for authority to):
SECTION 6.01 LIENS. Incur, create, assume or suffer to exist any Lien
on any asset of the Borrower or the Guarantors, now owned or hereafter acquired
by the Borrower or any of such Guarantors, other than (i) Liens which were
existing on the Filing Date as reflected on Schedule 3.06 hereto and such other
Liens for unpaid real estate taxes and mechanics liens not set forth on Schedule
3.06 hereto that were existing on the Filing Date in an amount not in excess of
$400,000 in the aggregate; (ii) Liens granted pursuant to the Existing
Agreements; (iii) Liens in favor of the Existing Lenders as adequate protection
granted pursuant to the Orders, which Liens are junior to the Liens contemplated
hereby in favor of the Agent and the Banks; (iv) Permitted Liens; (v) Liens
granted in connection with the financing of insurance premiums solely in
connection with the Borrower's and Guarantors' insurable properties and assets
provided such Liens attach solely to the insurance policy in respect of such
insurance premiums (and any proceeds thereof), (vi) Liens in favor of the Agent
and the Banks and (vii) Liens in respect of Indebtedness permitted under Section
6.03(v) below.
SECTION 6.02 MERGER, ETC. Consolidate or merge with or into another
Person.
SECTION 6.03 INDEBTEDNESS. Contract, create, incur, assume or suffer to
exist any Indebtedness, except for (i) Indebtedness under this Agreement; (ii)
Indebtedness incurred prior to the Filing Date; (iii) Indebtedness owed to Chase
or any of its banking Affiliates in respect of any overdrafts and related
liabilities arising from treasury, depository and cash management services or in
connection with any automated clearing house transfers of funds, (iv)
Indebtedness related to the Liens described in clause (v) of Section 6.01 and
(v) Indebtedness in respect of secured purchase money financing of equipment, to
the extent permitted under Sections 3.10(iii)(w) and (x), and so long as all
such Indebtedness does not exceed for any fiscal year, in the aggregate,
$100,000.
SECTION 6.04 EBITDAR. Permit (i) on each of September 30, 2000,
December 31, 2000, and March 31, 2001, the EBITDAR of the Borrower and its
Subsidiaries to be less than sixty percent (60%) of the cumulative EBITDAR as
measured from May 1, 2000 per the Budget attached as Schedule 6.04 hereto (as
updated from time to time (the "Budget")), or (ii) on June 30, 2001, September
30, 2001, and November 30, 2001, the cumulative EBITDAR of the Borrower and its
Subsidiaries for the prior twelve month period to be less than sixty percent
(60%) of the cumulative EBITDAR per the Budget for the same period. The combined
budgeted EBITDAR shall be reduced by the budgeted EBITDAR pertaining to any
asset sold for the period following the date of sale through the Termination
Date. To the extent the Budget does not show a breakdown by location with
respect to EBITDAR calculations, the Borrower and its Subsidiaries shall provide
to the Agent a budget showing such breakdown within five (5) days of the Closing
Date.
SECTION 6.05 GUARANTEES AND OTHER LIABILITIES. Purchase or repurchase
(or agree, contingently or otherwise, so to do) the Indebtedness of, or assume,
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance of any obligation or capability of so
doing, or otherwise), endorse or otherwise become liable, directly or
indirectly,
xxxv
in connection with the obligations, stock or dividends of any Person, except (i)
for any guaranty of Indebtedness or other obligations of any Borrower or
Guarantor if the Guarantor could have incurred such Indebtedness or obligations
under this Agreement and (ii) by endorsement of negotiable instruments for
deposit or collection in the ordinary course of business.
SECTION 6.06 CHAPTER 11 CLAIMS. Incur, create, assume, suffer to exist
or permit any other Super-Priority Claim which is pari passu with or senior to
the claims of the Agent and the Banks against the Borrower and the Guarantors
hereunder, except for the Carve-Out and the Statutory Fees.
SECTION 6.07 TRANSACTIONS WITH AFFILIATES. Sell or transfer any
property or assets to, or otherwise engage in any other material transactions
with, any of its Affiliates (other than the Borrower and the Guarantors), other
than in the ordinary course of business at prices and on terms and conditions
not less favorable to the Borrower or such Guarantor than could be obtained on
an arm's-length basis from unrelated third parties.
SECTION 6.08 DISPOSITION OF ASSETS. Sell or otherwise dispose of any
assets (including, without limitation, the capital stock of any Subsidiary)
except for (i) sales of inventory, fixtures and equipment in the ordinary course
of business, (ii) sales of surplus equipment no longer used in production, (iii)
sales of assets, the Net Cash Proceeds of which are applied consistent with
Section 2.10(b), and (iv) sales of other assets approved by the Agent and
Required Banks.
SECTION 7. EVENTS OF DEFAULT
SECTION 7.01 EVENTS OF DEFAULT. In the case of the happening of any of
the following events and the continuance thereof beyond the applicable period of
grace if any (each, an "Event of Default"):
(a) any material representation or warranty made by the
Borrower or any Guarantor in this Agreement or in any Loan Document or in
connection with this Agreement or the credit extensions hereunder or any
material statement or representation made in any report, financial statement,
certificate or other document furnished by the Borrower or any Guarantors to the
Banks under or in connection with this Agreement, shall prove to have been false
or misleading in any material respect when made or delivered; or
(b) default shall be made in the payment of any principal of
the Loans, interest thereon, Fees or any other amounts payable by the Borrower
hereunder (including, without limitation, reimbursement obligations or cash
collateralization in respect of Letters of Credit), when and as the same shall
become due and payable, whether at the due date thereof (including the
Prepayment Date) or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise; or
xxxvi
(c) default shall be made by the Borrower or any Guarantor in
the due observance or performance of any covenant, condition or agreement to be
observed or performed pursuant to the terms of this Agreement or any of the
other Loan Documents and such default shall continue unremedied for more than
ten (10) days other than a breach of a covenant, condition or agreement which is
incapable of remedy for which there is no cure period; or
(d) any of the Cases shall be dismissed or converted to a case
under Chapter 7 of the Bankruptcy Code; a trustee under Chapter 7 or Chapter 11
of the Bankruptcy Code, a responsible officer or an examiner with enlarged
powers relating to the operation of the business (powers beyond those set forth
in Section 1106(a)(3) and (4) of the Bankruptcy Code) under Section 1106(b) of
the Bankruptcy Code shall be appointed in any of the Cases and the order
appointing such trustee, responsible officer or examiner shall not be reversed
or vacated within 30 days after the entry thereof; or an application shall be
filed by the Borrower or any Guarantor for the approval of any other
Super-Priority Claim (other than the Carve-Out and the Statutory Fee) in any of
the Cases which is pari passu with or senior to the claims of the Agent and the
Banks against the Borrower or any Guarantor hereunder, or there shall arise or
be granted any such pari passu or senior Super-Priority Claim (other than the
Carve Out and the Statutory Fees); or
(e) the Bankruptcy Court shall enter an order or orders
granting relief from the automatic stay applicable under Section 362 of the
Bankruptcy Code to the holder or holders of any security interest to permit
foreclosure (or the granting of a deed in lieu of foreclosure or the like) on
any assets of the Borrower or any of the Guarantors which have a value in excess
of $100,000 in the aggregate; or
(f) any material provision of any Loan Document shall, for any
reason, cease to be valid and binding on the Borrower or any of the Guarantors,
or the Borrower or any of the Guarantors shall so assert in any pleading filed
in any court or there shall occur a Material Adverse Change; or
(g) an order of the Bankruptcy Court shall be entered
reversing, amending, supplementing, staying for a period in excess of 10 days,
vacating or otherwise modifying either of the Orders or terminating the use of
cash collateral by the Borrower or the Guarantors pursuant to the Orders; or
(h) any judgment or order as to a post-petition liability or
debt for the payment of money in excess of $100,000 not covered by insurance
shall be rendered against the Borrower or any of the Guarantors and the
enforcement thereof shall not have been stayed; or
(i) any non-monetary judgment or order with respect to a
post-petition event shall be rendered against the Borrower or any of the
Guarantors which does or would reasonably be expected to cause a Material
Adverse Effect, and there shall be any period of 10 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
xxxvii
(j) the Borrower or the Guarantors shall make any Pre-Petition
Payment other than as permitted by the Orders and Pre-Petition Payments
authorized by the Bankruptcy Court (x) not in excess of $300,000 in respect of
certain critical vendors, (y) not in excess of $250,000 in respect of valid
reclamation claims and (z) not in excess of an amount equal to the perfected
mechanics liens and real estate tax liens listed on Schedule 3.06 plus
additional mechanics and real estate tax liens in an amount not to exceed
$400,000 in the aggregate; or
(k) any Termination Event described in clauses (iii) or (iv)
of the definition of such term shall have occurred and shall continue unremedied
for more than 10 days and the sum (determined as of the date of occurrence of
such Termination Event) of the Insufficiency of the Plan in respect of which
such Termination Event shall have occurred and be continuing and the
Insufficiency of any and all other Plans with respect to which such a
Termination Event (described in such clauses (iii) or (iv)) shall have occurred
and then exist is equal to or greater than $5,000,000 and does or is reasonably
expected to cause a Material Adverse Effect; or
(l) (i) the Borrower or any ERISA Affiliate thereof shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan, (ii) the Borrower or such ERISA
Affiliate does not have reasonable grounds to contest such Withdrawal Liability
and is not in fact contesting such Withdrawal Liability in a timely and
appropriate manner, and (iii) the amount of such Withdrawal Liability specified
in such notice, when aggregated with all other amounts required to be paid to
Multiemployer Plans in connection with Withdrawal Liabilities (determined as of
the date of such notification), exceeds $5,000,000 allocable to post-petition
obligations or requires payments exceeding $500,000 per annum in excess of the
annual payments made with respect to such Multiemployer Plans by the Borrower or
such ERISA Affiliate for the plan year immediately preceding the plan year in
which such notification is received and such Withdrawal Liability does or is
reasonably expected to cause a Material Adverse Effect; or
(m) the Borrower or any ERISA Affiliate thereof shall have
been notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of Title IV
of ERISA, if as a result of such reorganization or termination the aggregate
annual contributions of the Borrower and its ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated have
been or will be increased over the amounts contributed to such Multiemployer
Plans for the plan years that include the date hereof by an amount exceeding
$5,000,000 and such increase does or is reasonably expected to cause a Material
Adverse Effect; or
(n) the Borrower or any ERISA Affiliate shall have committed a
failure described in Section 302(f)(1) of ERISA (other than the failure to make
any contribution accrued and unpaid as of the Filing Date) and the amount
determined under Section 302(f)(3) of ERISA is equal to or greater than
$5,000,000 and such failure does or is reasonably likely to have a Material
Adverse Effect;
xxxviii
then, and in every such event and at any time thereafter during the continuance
of such event, and without further order of or application to the Bankruptcy
Court, the Agent may, and at the request of the Required Banks, shall, by
written notice to the Borrower (with a written copy to counsel for the
Committee, to counsel for the Pre-Petition Agent and to the United States
Trustee for the Southern District of New York), take one or more of the
following actions, at the same or different times (provided, that with respect
to clause (iv) below and the enforcement of Liens or other remedies with respect
to the Collateral under clause (v) below, the Agent shall provide the Borrower
(with a copy to counsel for the Committee, to counsel for the Pre-Petition Agent
and to the United States Trustee for the Southern District of New York) with
five (5) Business Days' written notice prior to taking the action contemplated
thereby and provided, further, that upon receipt of notice referred to in the
immediately preceding clause with respect to the accounts referred to in clause
(iv) below, the Borrower may continue to make ordinary course disbursements from
such accounts (other than the Letter of Credit Account) but may not withdraw or
disburse any other amounts from such accounts): (i) terminate forthwith the
Total Commitment; (ii) declare the Loans then outstanding to be forthwith due
and payable, whereupon the principal of the Loans together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of the Borrower
accrued hereunder and under any other Loan Document, shall become forthwith due
and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by the Borrower and the
Guarantors, anything contained herein or in any other Loan Document to the
contrary notwithstanding; (iii) require the Borrower and the Guarantors upon
demand to forthwith deposit in the Letter of Credit Account cash in an amount
which, together with any amounts then held in the Letter of Credit Account, is
equal to the sum of 105% of the then outstanding Letters of Credit (and to the
extent the Borrower and the Guarantors shall fail to furnish such funds as
demanded by the Agent, the Agent shall be authorized to debit the accounts of
the Borrower and the Guarantors maintained with the Agent in such amount five
(5) Business Days after the giving of the notice referred to above); (iv)
set-off amounts in the Letter of Credit Account or any other accounts maintained
with the Agent and apply such amounts to the obligations of the Borrower and the
Guarantors hereunder and in the other Loan Documents; and (v) exercise any and
all remedies under the Loan Documents and under applicable law available to the
Agent and the Banks.
SECTION 8. THE AGENT
SECTION 8.01 ADMINISTRATION BY AGENT. The general administration of the
Loan Documents shall be by the Agent. Each Bank hereby irrevocably authorizes
the Agent, at its discretion, to take or refrain from taking such actions as
agent on its behalf and to exercise or refrain from exercising such powers under
the Loan Documents as are delegated by the terms hereof or thereof, as
appropriate, together with all powers reasonably incidental thereto (including
the release of Collateral in connection with any transaction that is expressly
permitted by the Loan Documents). The Agent shall have no duties or
responsibilities except as set forth in this Agreement and the remaining Loan
Documents.
xxxix
SECTION 8.02 ADVANCES AND PAYMENTS
(a) On the date of each Loan, the Agent shall be authorized
(but not obligated) to advance, for the account of each of the Banks, the amount
of the Loan to be made by it in accordance with its Commitment hereunder. Should
the Agent do so, each of the Banks agrees forthwith to reimburse the Agent in
immediately available funds for the amount so advanced on its behalf by the
Agent, together with interest at the Federal Funds Effective Rate if not so
reimbursed on the date due from and including such date but not including the
date of reimbursement.
(b) Any amounts received by the Agent in connection with this
Agreement (other than amounts to which the Agent is entitled pursuant to
Sections 2.15, 8.06, 10.05 and 10.06), the application of which is not otherwise
provided for in this Agreement shall be applied, first, in accordance with each
Bank's Commitment Percentage to pay accrued but unpaid Commitment Fees or Letter
of Credit Fees, and second, in accordance with each Bank's Commitment Percentage
to pay accrued but unpaid interest and the principal balance outstanding and all
unreimbursed Letter of Credit drawings. All amounts to be paid to a Bank by the
Agent shall be credited to that Bank, after collection by the Agent, in
immediately available funds either by wire transfer or deposit in that Bank's
correspondent account with the Agent, as such Bank and the Agent shall from time
to time agree.
SECTION 8.03 SHARING OF SETOFFS. Each Bank agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower, including, but not limited to, a secured claim under Section 506
of the Bankruptcy Code or other security or interest arising from, or in lieu
of, such secured claim and received by such Bank under any applicable
bankruptcy, insolvency or other similar law, or otherwise, obtain payment in
respect of its Loans as a result of which the unpaid portion of its Loans is
proportionately less than the unpaid portion of the Loans of any other Bank (a)
it shall promptly purchase at par (and shall be deemed to have thereupon
purchased) from such other Bank a participation in the Loans of such other Bank,
so that the aggregate unpaid principal amount of each Bank's Loans and its
participation in Loans of the other Banks shall be in the same proportion to the
aggregate unpaid principal amount of all Loans then outstanding as the principal
amount of its Loans prior to the obtaining of such payment was to the principal
amount of all Loans outstanding prior to the obtaining of such payment and (b)
such other adjustments shall be made from time to time as shall be equitable to
ensure that the Banks share such payment pro-rata, provided that if any such
non-pro-rata payment is thereafter recovered or otherwise set aside such
purchase of participations shall be rescinded (without interest). The Borrower
expressly consents to the foregoing arrangements and agrees that any Bank
holding (or deemed to be holding) a participation in a Loan may exercise any and
all rights of banker's lien, setoff (in each case, subject to the same notice
requirements as pertain to clause (iv) of the remedial provisions of Section
7.01) or counterclaim with respect to any and all moneys owing by the Borrower
to such Bank as fully as if such Bank held a Note and was the original obligee
thereon, in the amount of such participation.
xl
SECTION 8.04 AGREEMENT OF REQUIRED BANKS. Upon any occasion requiring
or permitting an approval, consent, waiver, election or other action on the part
of the Required Banks, action shall be taken by the Agent for and on behalf or
for the benefit of all Banks upon the direction of the Required Banks, and any
such action shall be binding on all Banks. No amendment, modification, consent,
or waiver shall be effective except in accordance with the provisions of Section
10.10.
SECTION 8.05 LIABILITY OF AGENT.
(a) The Agent when acting on behalf of the Banks, may execute
any of its respective duties under this Agreement by or through any of its
respective officers, agents, and employees, and neither the Agent nor its
directors, officers, agents, employees or Affiliates shall be liable to the
Banks or any of them for any action taken or omitted to be taken in good faith,
or be responsible to the Banks or to any of them for the consequences of any
oversight or error of judgment, or for any loss, unless the same shall happen
through its gross negligence or willful misconduct. The Agent and its respective
directors, officers, agents, employees and Affiliates shall in no event be
liable to the Banks or to any of them for any action taken or omitted to be
taken by them pursuant to instructions received by them from the Required Banks
or in reliance upon the advice of counsel selected by it. Without limiting the
foregoing, neither the Agent, nor any of its respective directors, officers,
employees, agents or Affiliates shall be responsible to any Bank for the due
execution, validity, genuineness, effectiveness, sufficiency, or enforceability
of, or for any statement, warranty, or representation in, this Agreement, any
Loan Document or any related agreement, document or order, or shall be required
to ascertain or to make any inquiry concerning the performance or observance by
the Borrower of any of the terms, conditions, covenants, or agreements of this
Agreement or any of the Loan Documents.
(b) Neither the Agent nor any of its respective directors,
officers, employees, agents or Affiliates shall have any responsibility to the
Borrower or the Guarantors on account of the failure or delay in performance or
breach by any Bank or by the Borrower or the Guarantors of any of their
respective obligations under this Agreement or any of the Loan Documents or in
connection herewith or therewith.
(c) The Agent, in its capacity as Agent hereunder, shall be
entitled to rely on any communication, instrument, or document reasonably
believed by such person to be genuine or correct and to have been signed or sent
by a person or persons believed by such person to be the proper person or
persons, and such person shall be entitled to rely on advice of legal counsel,
independent public accountants, and other professional advisers and experts
selected by such person.
SECTION 8.06 REIMBURSEMENT AND INDEMNIFICATION. Each Bank agrees (i) to
reimburse (x) the Agent for such Bank's Commitment Percentage of any expenses
and fees incurred for the benefit of the Banks under this Agreement and any of
the Loan Documents, including, without limitation, counsel fees and compensation
of agents and employees paid for services rendered on behalf of the Banks, and
any other expense incurred in connection with the operations
xli
or enforcement thereof not reimbursed by the Borrower or the Guarantors and (y)
the Agent for such Bank's Commitment Percentage of any expenses of the Agent
incurred for the benefit of the Banks that the Borrower has agreed to reimburse
pursuant to Section 10.05 and has failed to so reimburse and (ii) to indemnify
and hold harmless the Agent and any of its directors, officers, employees,
agents or Affiliates, on demand, in the amount of its proportionate share, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against it
or any of them in any way relating to or arising out of this Agreement or any of
the Loan Documents or any action taken or omitted by it or any of them under
this Agreement or any of the Loan Documents to the extent not reimbursed by the
Borrower or the Guarantors (except such as shall result from their respective
gross negligence or willful misconduct).
SECTION 8.07 RIGHTS OF AGENT. It is understood and agreed that Chase
shall have the same rights and powers hereunder (including the right to give
such instructions) as the other Banks and may exercise such rights and powers,
as well as its rights and powers under other agreements and instruments to which
it is or may be party, and engage in other transactions with the Borrower or any
Guarantor, as though it were not the Agent of the Banks under this Agreement.
SECTION 8.08 INDEPENDENT BANKS. Each Bank acknowledges that it has
decided to enter into this Agreement and to make the Loans hereunder based on
its own analysis of the transactions contemplated hereby and of the
creditworthiness of the Borrower and the Guarantors and agrees that the Agent
shall bear no responsibility therefor.
SECTION 8.09 NOTICE OF TRANSFER. The Agent may deem and treat a Bank
party to this Agreement as the owner of such Bank's portion of the Loans for all
purposes, unless and until a written notice of the assignment or transfer
thereof executed by such Bank shall have been received by the Agent.
SECTION 8.10 SUCCESSOR AGENT. The Agent may resign at any time by
giving written notice thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent, which shall be reasonably satisfactory to the Borrower. If no successor
Agent shall have been so appointed by the Required Banks and shall have accepted
such appointment, within 30 days after the retiring Agent's giving of notice of
resignation, the retiring Agent may, on behalf of the Banks, appoint a successor
Agent, which shall be a commercial bank organized under the laws of the United
States of America or of any State thereof and having a combined capital and
surplus of a least $100,000,000, which shall be reasonably satisfactory to the
Borrower. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 8 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
xlii
SECTION 9. GUARANTY
SECTION 9.01 GUARANTY.
(a) Each of the Guarantors unconditionally and irrevocably
guarantees the due and punctual payment and performance by the Borrower of the
Obligations. Each of the Guarantors further agrees that the Obligations may be
extended or renewed, in whole or in part, without notice to or further assent
from it, and it will remain bound upon this guaranty notwithstanding any
extension or renewal of any of the Obligations. The Obligations of the
Guarantors shall be joint and several.
(b) Each of the Guarantors waives presentation to, demand for
payment from and protest to the Borrower or any other Guarantor, and also waives
notice of protest for nonpayment. The Obligations of the Guarantors hereunder
shall not be affected by (i) the failure of the Agent or a Bank to assert any
claim or demand or to enforce any right or remedy against the Borrower or any
other Guarantor under the provisions of this Agreement or any other Loan
Document or otherwise; (ii) any extension or renewal of any provision hereof or
thereof; (iii) any rescission, waiver, compromise, acceleration, amendment or
modification of any of the terms or provisions of any of the Loan Documents;
(iv) the release, exchange, waiver or foreclosure of any security held by the
Agent for the Obligations or any of them; (v) the failure of the Agent or a Bank
to exercise any right or remedy against any other Guarantor; or (vi) the release
or substitution of any Guarantor or any other Guarantor.
(c) Each of the Guarantors further agrees that this guaranty
constitutes a guaranty of performance and of payment when due and not just of
collection, and waives any right to require that any resort be had by the Agent
or a Bank to any security held for payment of the Obligations or to any balance
of any deposit, account or credit on the books of the Agent or a Bank in favor
of the Borrower or any other Guarantor, or to any other Person.
(d) Each of the Guarantors hereby waives any defense that it
might have based on a failure to remain informed of the financial condition of
the Borrower and of any other Guarantor and any circumstances affecting the
ability of the Borrower to perform under this Agreement.
(e) Each Guarantor's guaranty shall not be affected by the
genuineness, validity, regularity or enforceability of the Obligations or any
other instrument evidencing any Obligations, or by the existence, validity,
enforceability, perfection, or extent of any collateral therefor or by any other
circumstance relating to the Obligations which might otherwise constitute a
defense to this Guaranty. Neither of the Agent, nor any of the Banks makes any
representation or warranty in respect to any such circumstances or shall have
any duty or responsibility whatsoever to any Guarantor in respect of the
management and maintenance of the Obligations.
(f) Subject to the provisions of Section 7.01, upon the
Obligations becoming due and payable (by acceleration or otherwise), the Banks
shall be entitled to immediate payment of such
xliii
Obligations by the Guarantors upon written demand by the Agent, without further
application to or order of the Bankruptcy Court.
SECTION 9.02 NO IMPAIRMENT OF GUARANTY. The obligations of the
Guarantors hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including, without limitation, any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense or set-off, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations. Without limiting the generality of the foregoing, the obligations
of the Guarantors hereunder shall not be discharged or impaired or otherwise
affected by the failure of the Agent or a Bank to assert any claim or demand or
to enforce any remedy under this Agreement or any other agreement, by any waiver
or modification of any provision thereof, by any default, failure or delay,
willful or otherwise, in the performance of the Obligations, or by any other act
or thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of the Guarantors or would otherwise
operate as a discharge of the Guarantors as a matter of law, unless and until
the Obligations are paid in full.
SECTION 9.03 SUBROGATION. Upon payment by any Guarantor of any sums to
the Agent or a Bank hereunder, all rights of such Guarantor against the Borrower
arising as a result thereof by way of right of subrogation or otherwise, shall
in all respects be subordinate and junior in right of payment to the prior final
and indefeasible payment in full of all the Obligations. If any amount shall be
paid to such Guarantor for the account of the Borrower, such amount shall be
held in trust for the benefit of the Agent and the Banks and shall forthwith be
paid to the Agent and the Banks to be credited and applied to the Obligations,
whether matured or unmatured.
SECTION 10. MISCELLANEOUS
SECTION 10.01 NOTICES. Notices and other communications provided for
herein shall be in writing (including telegraphic, telex, facsimile or cable
communication) and shall be mailed, telegraphed, telexed, transmitted, cabled or
delivered to the Borrower or any Guarantor at Family Golf Centers, Inc., 000
Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000, Telecopy: (000) 000-0000,
Attention: President, with copies to Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx,
Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Telecopy: (000) 000-0000,
Attention: Xxxxxxxx First, Esq. and to a Bank or the Agent to it at its address
set forth on Annex A, or such other address as such party may from time to time
designate by giving written notice to the other parties hereunder. All notices
and other communications given to any party hereto in accordance with the
provisions of this Agreement shall be deemed to have been given on the fifth
Business Day after the date when sent by registered or certified mail, postage
prepaid, return receipt requested, if by mail; or when delivered to the
telegraph company, charges prepaid, if by telegram; or when receipt is
acknowledged, if by any telegraphic communications or facsimile equipment of the
sender; in each case addressed to such party as provided in this Section 10.01
or in accordance with the latest unrevoked written direction from such party;
provided, however, that in the case of notices to the Agent notices pursuant to
the
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preceding sentence with respect to change of address and pursuant to Section 2
shall be effective only when received by the Agent.
SECTION 10.02 SURVIVAL OF AGREEMENT, REPRESENTATIONS AND WARRANTIES,
ETC. All warranties, representations and covenants made by the Borrower or any
Guarantor herein or in any certificate or other instrument delivered by it or on
its behalf in connection with this Agreement shall be considered to have been
relied upon by the Banks and shall survive the making of the Loans herein
contemplated regardless of any investigation made by any Bank or on its behalf
and shall continue in full force and effect so long as any amount due or to
become due hereunder is outstanding and unpaid and so long as the Commitments
have not been terminated. All statements in any such certificate or other
instrument shall constitute representations and warranties by the Borrower and
the Guarantors hereunder with respect to the Borrower and the Guarantors.
SECTION 10.03 SUCCESSORS AND ASSIGNS.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Agent and the Banks and their respective successors
and assigns. Neither the Borrower nor any of the Guarantors may assign or
transfer any of their rights or obligations hereunder without the prior written
consent of all of the Banks. Each Bank may sell participations to any Person in
all or part of any Loan, or all or part of its Commitment, in which event,
without limiting the foregoing, the provisions of Section 2.12 shall inure to
the benefit of each purchaser of a participation (provided that such participant
shall look solely to the seller of such participation for such benefits and the
Borrower's and the Guarantors' liability, if any, under Sections 2.12 and 2.14
shall not be increased as a result of the sale of any such participation) and
the PRO RATA treatment of payments, as described in Section 2.13, shall be
determined as if such Bank had not sold such participation. In the event any
Bank shall sell any participation, such Bank shall retain the sole right and
responsibility to enforce the obligations of the Borrower and each of the
Guarantors relating to the Loans, including, without limitation, the right to
approve any amendment, modification or waiver of any provision of this Agreement
(provided that such Bank may grant its participant the right to consent to such
Bank's execution of amendments, modifications or waivers which (i) reduce any
Fees payable hereunder to the Banks, (ii) reduce the amount of any scheduled
principal payment on any Loan or reduce the principal amount of any Loan or the
rate of interest payable hereunder or (iii) extend the maturity of the
Borrower's obligations hereunder). The sale of any such participation shall not
alter the rights and obligations of the Bank selling such participation
hereunder with respect to the Borrower.
(b) Each Bank may assign to one or more Banks or Eligible
Assignees all or a portion of its interests, rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment and
the same portion of the related Loans at the time owing to it), PROVIDED,
HOWEVER, that (i) other than in the case of an assignment to a Person at least
50% owned by the assignor Bank, or by a common parent of both, or to another
Bank, the Agent and the Fronting Bank must give their respective prior written
consent to such assignment, which consent will not be unreasonably withheld,
(ii) the aggregate amount of the Commitment and/or Loans of the assigning
xlv
Bank subject to each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the Agent) shall,
unless otherwise agreed to in writing by the Borrower and the Agent, in no event
be less than $1,000,000 and (iii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register (as defined below), an Assignment and Acceptance with blanks
appropriately completed, together with a processing and recordation fee of
$3,500 (for which the Borrower shall have no liability). Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be within ten
Business Days after the execution thereof (unless otherwise agreed to in writing
by the Agent), (A) the assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder and (B) the Bank thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Bank's rights and obligations under
this Agreement, such Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance,
the Bank assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such Bank
assignor 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 Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any of the other Loan Documents; (ii) such Bank assignor
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrower or any Guarantor or the performance
or observance by the Borrower or any Guarantor of any of its obligations under
this Agreement or any of the other Loan Documents or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement and the other Loan Documents, together with
copies of the financial statements referred to in Section 3.04 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Agent, such Bank
assignor or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
thereto, together with such powers as are reasonably incidental hereof; and (vi)
such assignee agrees that it will perform in accordance with their terms all
obligations that by the terms of this Agreement are required to be performed by
it as a Bank.
(d) The Agent shall maintain at its office a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Banks and the Commitments of, and principal
amount of the Loans owing to, each Bank from time to time
xlvi
(the "Register"). The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Guarantors, the Agent and the
Banks shall treat each Person the name of which is recorded in the Register as a
Bank hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Bank at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Bank and the assignee thereunder together with the fee payable
in respect thereto, the Agent shall, if such Assignment and Acceptance has been
completed with blanks appropriately filled and consented to by the Agent and the
Fronting Bank (to the extent such consent is required hereunder), (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt written notice thereof to the Borrower
(together with a copy thereof). No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in this
paragraph.
(f) Any Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
10.03, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower or any of the Guarantors
furnished to such Bank by or on behalf of the Borrower or any of the Guarantors;
provided that prior to any such disclosure, each such assignee or participant or
proposed assignee or participant shall agree in writing to be bound by the
provisions of Section 10.04.
(g) The Borrower hereby agrees, to the extent set forth in the
Commitment Letter, to actively assist and cooperate with the Agent in the
Agent's efforts to sell participations herein (as described in Section 10.03(a))
and assign to one or more Banks or Eligible Assignees a portion of its
interests, rights and obligations under this Agreement (as set forth in Section
10.03(b)).
SECTION 10.04 CONFIDENTIALITY. Each Bank agrees to keep any information
delivered or made available by the Borrower or any of the Guarantors to it
confidential from anyone other than persons employed or retained by such Bank
who are or are expected to become engaged in evaluating, approving, structuring
or administering the Loans; PROVIDED that nothing herein shall prevent any Bank
from disclosing such information (i) to any other Bank, (ii) upon the order of
any court or administrative agency, (iii) upon the request or demand of any
regulatory agency or authority, (iv) which has been publicly disclosed other
than as a result of a disclosure by the Agent or any Bank which is not permitted
by this Agreement, (v) in connection with any litigation to which the Agent, any
Bank, or their respective Affiliates may be a party to the extent reasonably
required, (vi) to the extent reasonably required in connection with the exercise
of any remedy hereunder, (vii) to such Bank's legal counsel and independent
auditors, and (viii) to any actual or proposed participant or assignee of all or
part of its rights hereunder subject to the proviso in Section 10.03(f). Each
Bank shall use reasonable efforts to notify the Borrower of any required
disclosure under clause (ii) of this Section.
xlvii
SECTION 10.05 EXPENSES. Whether or not the transactions hereby
contemplated shall be consummated, the Borrower and the Guarantors agree to pay
all reasonable and documented out-of-pocket expenses incurred by the Agent
(including but not limited to the reasonable fees and disbursements of Xxxxxx,
Xxxxx & Xxxxxxx LLP, special counsel for the Agent, any local Canadian counsel
that the Agent shall retain and any internal or third-party appraisers,
consultants and auditors advising the Agent (but excluding costs and expenses in
connection with a syndication of this Agreement to institutions other than the
Existing Lenders)) in connection with the preparation, execution, delivery and
administration of this Agreement and the other Loan Documents, the making of the
Loans and the issuance of the Letters of Credit, the perfection of the Liens
contemplated hereby, the reasonable and customary costs, fees and expenses of
the Agent in connection with its monthly and other periodic field audits,
monitoring of assets, the costs of electronic communications services and
publicity expenses, and, following the occurrence of an Event of Default, all
reasonable out-of-pocket expenses incurred by the Banks and the Agent in the
enforcement or protection of the rights of any one or more of the Banks or the
Agent in connection with this Agreement or the other Loan Documents, including
but not limited to the reasonable fees and disbursements of any counsel for the
Banks or the Agent. Such payments shall be made on the date of the Final Order
and thereafter on demand, promptly upon delivery of a statement setting forth
such costs and expenses. Whether or not the transactions hereby contemplated
shall be consummated, the Borrower and the Guarantors agree to reimburse the
Agent for its expenses. The obligations of the Borrower and the Guarantors under
this Section shall survive the termination of this Agreement and/or the payment
of the Loans.
SECTION 10.06 INDEMNITY. The Borrower and each of the Guarantors agree
to indemnify and hold harmless the Agent and the Banks and their directors,
officers, employees, agents and Affiliates (each an "Indemnified Party") from
and against any and all claims, damages, liabilities, obligations, losses,
penalties, actions, judgments, suits, costs, disbursements and expenses of any
kind and nature (including, without limitation, fees and disbursements of
counsel to any Indemnified Party) incurred by such Indemnified Party arising out
of claims made by any Person in any way relating to the transactions
contemplated hereby and under the other Loan Documents, but excluding therefrom
(x) any of the foregoing to the extent that they are determined by the final
judgment of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnified Party and (y) all expenses
and costs in connection with a syndication of this Agreement to institutions
other than the Existing Lenders. The obligations of the Borrower and the
Guarantors under this Section shall survive the termination of this Agreement
and/or the payment of the Loans.
SECTION 10.07 CHOICE OF LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL IN ALL RESPECTS BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED WHOLLY WITHIN SUCH STATE AND THE BANKRUPTCY CODE.
xlviii
SECTION 10.08 NO WAIVER. No failure on the part of the Agent or any of
the Banks to exercise, and no delay in exercising, any right, power or remedy
hereunder or any of the other Loan Documents shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right, power or remedy
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law.
SECTION 10.09 EXTENSION OF MATURITY. Should any payment of principal of
or interest or any other amount due hereunder become due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, in the case of principal, interest shall be payable
thereon at the rate herein specified during such extension.
SECTION 10.10 AMENDMENTS, ETC.
(a) No modification, amendment or waiver of any provision of
this Agreement or the other Loan Documents, and no consent to any departure by
the Borrower or any Guarantor therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Required Banks, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given; provided, however, that no such modification or
amendment shall without the written consent of the Bank affected thereby (x)
increase the Commitment of a Bank (it being understood that a waiver of an Event
of Default shall not constitute an increase in the Commitment of a Bank), or (y)
reduce the principal amount of any Loan or the rate of interest payable thereon,
or extend any date for the payment of interest hereunder or reduce any Fees
payable hereunder or extend the final maturity of the Borrower's obligations
hereunder; and, provided, further, that no such modification or amendment shall
without the written consent of (A) all of the Banks (i) amend or modify any
provision of this Agreement which provides for the unanimous consent or approval
of the Banks or (ii) amend this Section 10.10 or the definition of Required
Banks or (B) Banks holding Loans representing at least 66-2/3% of the aggregate
principal amount of the Loans outstanding, or if no Loans are outstanding, Banks
having Commitments representing at least 66-2/3% of the Total Commitment,
release all or any substantial portion of the Liens granted to the Agent
hereunder (other than in connection with dispositions permitted hereunder),
under the Orders or under any other Loan Document, or release any Guarantor. No
such amendment or modification may adversely affect the rights and obligations
of the Agent or any Fronting Bank hereunder or any Bank in the capacity referred
to in Section 6.03(iii) without its prior written consent. No notice to or
demand on the Borrower or any Guarantor shall entitle the Borrower or any
Guarantor to any other or further notice or demand in the same, similar or other
circumstances. Each assignee under Section 10.03(b) shall be bound by any
amendment, modification, waiver, or consent authorized as provided herein, and
any consent by a Bank shall bind any Person subsequently acquiring an interest
on the Loans held by such Bank. No amendment to this Agreement shall be
effective against the Borrower or any Guarantor unless signed by the Borrower or
such Guarantor, as the case may be.
(b) Notwithstanding anything to the contrary contained in
Section 10.10(a), in the event that the Borrower requests that this Agreement be
modified or amended in a manner which
xlix
would require the unanimous consent of all of the Banks (or the consent
described in clause (B) of the first sentence of Section 10.10(a)) and such
modification or amendment is agreed to by the Super-majority Banks (as
hereinafter defined), then with the consent of the Borrower and the
Supermajority Banks, the Borrower and the Super-majority Banks shall be
permitted to amend the Agreement without the consent of the Bank or Banks which
did not agree to the modification or amendment requested by the Borrower (such
Bank or Banks, collectively the "Minority Banks") to provide for (w) the
termination of the Commitment of each of the Minority Banks, (x) the addition to
this Agreement of one or more other financial institutions (each of which shall
be an Eligible Assignee), or an increase in the Commitment of one or more of the
Super-majority Banks, so that the Total Commitment after giving effect to such
amendment shall be in the same amount as the Total Commitment immediately before
giving effect to such amendment, (y) if any Loans are outstanding at the time of
such amendment, the making of such additional Loans by such new financial
institutions or Super-majority Bank or Banks, as the case may be, as may be
necessary to repay in full the outstanding Loans of the Minority Banks
immediately before giving effect to such amendment and (z) such other
modifications to this Agreement as may be appropriate. As used herein, the term
"Super-majority Banks" shall mean, at any time, Banks holding Loans representing
at least 66-2/3% of the aggregate principal amount of the Loans outstanding, or
if no Loans are outstanding, Banks having Commitments representing at least
66-2/3% of the Total Commitment.
SECTION 10.11 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.12 HEADINGS. Section headings used herein are for
convenience only and are not to affect the construction of or be taken into
consideration in interpreting this Agreement.
SECTION 10.13 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which shall constitute an original, but
all of which taken together shall constitute one and the same instrument.
SECTION 10.14 PRIOR AGREEMENTS. This Agreement represents the entire
agreement of the parties with regard to the subject matter hereof and the terms
of any term sheet, letters and other documentation entered into between the
Borrower or a Guarantor and any Bank or the Agent prior to the execution of this
Agreement which relate to Loans to be made hereunder or Loans made or Letters of
Credit issued pursuant to the Term Sheet shall be replaced by the terms of this
Agreement, except that with respect to any Loans made or Letters of Credit
issued pursuant to the Term Sheet, such Loans and Letters of Credit shall be
governed by this Agreement from and after the date that the Final Order is
entered and prior to that date, such Loans and Letters of Credit shall be
governed by the Term Sheet.
l
SECTION 10.15 FURTHER ASSURANCES. Whenever and so often as reasonably
requested by the Agent, the Borrower and the Guarantors will promptly execute
and deliver or cause to be executed and delivered all such other and further
instruments, documents or assurances, and promptly do or cause to be done all
such other and further things as may be necessary and reasonably required in
order to further and more fully vest in the Agent all rights, interests, powers,
benefits, privileges and advantages conferred or intended to be conferred by
this Agreement and the other Loan Documents.
SECTION 10.16 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
GUARANTORS, THE AGENT AND EACH BANK HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.
li
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and the year first written.
BORROWER:
FAMILY GOLF CENTERS, INC.
By: /s/ Xxxxxxx Xxxxx
--------------------------------
Name: Xxxxxxx Xxxxx
Title: Chief Executive Officer
GUARANTORS:
TPT EL SEGUNDO, INC.
GLOBAL GOLF/GAVILAN
INDIAN RIVER FAMILY GOLF CENTERS, INC.
TUCSON FAMILY GOLF CENTERS, INC.
CINCINNATI FAMILY GOLF CENTERS, INC.
ST. LOUIS FAMILY GOLF CENTERS, INC.
WEST PALM BEACH FAMILY GOLF CENTERS, INC.
SAN XXXX FAMILY GOLF CENTERS, INC.
EASTON FAMILY GOLF CENTERS, INC.
XXXXXXX'X ISLAND FAMILY GOLF CENTERS, INC.
PRIVATIZATION PLUS, INC.
WESTMINSTER FAMILY GOLF CENTERS, INC.
CAROLINA SPRINGS FAMILY GOLF CENTERS, INC.
ORIENT ASSOCIATES INTERNATIONAL, INC.
SKYDRIVE ALLEY POND COMPANY, INC.
SKYDRIVE GREENBURGH CO., INC.
SKYCON CONSTRUCTION CO., INC.
SKYDRIVE WILLOWBROOK, NJ, INC.
SKYDRIVE CO., INC.
PELHAM FAMILY GOLF CENTERS, INC.
RICHMOND FAMILY GOLF CENTERS, INC.
PEACHTREE FAMILY GOLF CENTERS, INC.
ALPHARETTA FAMILY GOLF CENTERS, INC.
VALLEY VIEW FAMILY GOLF CENTERS, INC.
MESA FAMILY GOLF CENTERS, INC.
VIRGINIA BEACH FAMILY GOLF CENTERS, INC.
DENVER FAMILY GOLF CENTERS, INC.
FLANDERS FAMILY GOLF CENTERS, INC.
MARGATE FAMILY GOLF CENTERS, INC.
lii
BROOKLYN FAMILY GOLF CENTERS, INC.
LAKE GROVE FAMILY GOLF CENTERS, INC.
GOLDEN SPIKES, INC.
WHITEHALL FAMILY GOLF CENTERS, INC.
SPORTS PLUS PROPERTIES, INC.
SPORTS PLUS PROPERTIES, LLC
GENPROP, LLC
ICEWORKS OF AMERICA, INC.
COMMACK FAMILY GOLF CENTERS, INC.
GREENVILLE FAMILY GOLF CENTERS, INC.
CHICAGO FAMILY GOLF CENTERS, INC.
FLEMINGTON FAMILY GOLF CENTERS, INC.
YORKTOWN FAMILY GOLF CENTERS, INC.
THE PRACTICE TEE, INC.
THE SEVEN IRON, INC.
C.B. FAMILY GOLF CENTERS, INC.
DARLINGTON FAMILY GOLF CENTERS, INC.
MAINEVILLE FAMILY GOLF CENTERS, INC.
MILWAUKEE FAMILY GOLF CENTERS, INC.
OLNEY FAMILY GOLF CENTERS, INC.
PALM DESERT FAMILY GOLF CENTERS, INC.
BROWARD FAMILY GOLF CENTERS, INC.
ENGLEWOOD FAMILY GOLF CENTERS, INC.
RALEIGH FAMILY GOLF CENTERS, INC.
TEMPE FAMILY GOLF CENTERS, INC.
FEDERAL WAY FAMILY GOLF CENTERS, INC.
COUNTY LINE FAMILY GOLF CENTERS, INC.
FAIRFIELD FAMILY GOLF CENTERS, INC.
CONFIDENCE GOLF, INC.
KANSAS FAMILY GOLF CENTERS, INC.
ELK GROVE FAMILY GOLF CENTERS, INC.
SPORTS PLUS CINCINNATI, INC.
WICHITA FAMILY GOLF CENTERS, INC.
BLUE EAGLE OF FLORIDA, INC.
SPORTS PLUS RALEIGH, INC.
SPORTS PLUS WOODBRIDGE, INC.
METROGOLF INCORPORATED
METROGOLF VIRGINIA, INC.
METROGOLF NEW YORK, INC.
FAMILY GOLF ACQUISITION, INC.
BRONX FAMILY GOLF CENTERS, INC.
MILPITAS FAMILY GOLF CENTERS, INC.
SAN BRUNO FAMILY GOLF CENTERS, INC.
liii
INTERBAY FAMILY GOLF CENTERS, INC.
XXXXXX FAMILY GOLF CENTERS, INC.
PALM FAMILY GOLF CENTERS, INC.
CERRITOS FAMILY GOLF CENTERS, INC.
PHILADELPHIA FAMILY GOLF CENTERS, INC.,
AS SUCCESSOR BY MERGER TO PINLEY ENTERPRISES LTD.
ENCINO/BALBOA FAMILY GOLF CENTERS, INC.
XXXXXXXX FAMILY GOLF CENTERS, INC.
XXXXXXX FAMILY GOLF CENTERS, INC.
SPORTS PLUS NEW XXXXXXXX, INC.
METROGOLF SAN DIEGO INC.
METROGOLF ILLINOIS CENTER, INC.
METROGOLF MANAGEMENT, INC.
FAMILY GOLF VENDING, INC.
OVERLAND FAMILY GOLF CENTERS, INC.
PARDOC VENDING CORP.
EAGLE QUEST GOLF CENTERS (TEXAS II) INC.
EAGLE QUEST GOLF CENTERS (CALIFORNIA) INC.
EAGLE QUEST GOLF CENTERS (H.P.) INC.
EAGLE QUEST GOLF CENTERS (WASHINGTON) INC.
GOLF PARK, INC.
GOOSE CREEK GOLF PARTNERS
LIMITED PARTNERSHIP
VINTAGE NEW YORK GOLF, LLC
SACRAMENTO FAMILY GOLF CENTERS, INC.
PORTLAND FAMILY GOLF CENTERS, INC.
CARLSBAD FAMILY GOLF CENTERS, INC.
EVERGREEN FAMILY GOLF CENTERS, INC.
OVERLAND PARK, LLC
EAGLE QUEST GOLF CENTERS (TEXAS) INC.
PRECISION COURSES, INC.
IMG PROPERTIES, INC.
EAGLE QUEST GOLF CENTERS ENTERTAINMENT, INC.
EAGLE QUEST GOLF CENTERS (U.S.) INC.
XXXXXX GOLF CENTER, LP
ILLINOIS CENTER GOLF PARTNERS, L.P.
GBGC FAMILY GOLF CENTERS, INC.
XXXXXXXX FAMILY GOLF CENTERS, INC.
EL CAJON FAMILY GOLF CENTERS, INC.
BLUE EAGLE OF KANSAS, INC.
BLUE EAGLE (OP) INC.
SKATENATION, INC.
RECREATIONAL MANAGEMENT CORPORATION
liv
SKATENATION OF RICHMOND WEST, LLC
SKATENATION OF PRINCE XXXXXXX, LLC
SKATENATION OF PINEY ORCHARD, LLC
82ND AVENUE GOLF RANGE, INC.
EVERGREEN GOLF COURSE, LLC
EAGLE QUEST GOLF CENTERS (WASHINGTON II), INC.
KANSAS CITY FAMILY GOLF CENTERS, INC.
BLUE EAGLE OF FLORIDA, INC.
PINNACLE ENTERTAINMENT, INC.
RECREATIONAL MANAGEMENT SERVICES CORPORATION
RECREATIONAL MANAGEMENT SERVICES CORPORATION
OF NEW JERSEY, INC.
SKATENATION OF RICHMOND SOUTH, LLC
SKATENATION OF RESTON, LLC
INTERNATIONAL SKATING CENTER OF
CONNECTICUT, LLC
RMSC OF CALIFORNIA, INC.
LODI FAMILY GOLF CENTERS, INC.
By: /s/ Krishnan X. Xxxxxx
---------------------------
Name: Krishnan X. Xxxxxx
Title: President
AGENT:
THE CHASE MANHATTAN BANK,
INDIVIDUALLY AND AS AGENT
By: /s/ Xxxxxx Xxxx
---------------------------
Name: Xxxxxx Xxxx
Title:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
