Exhibit 10(a)
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REVOLVING CREDIT AND GUARANTY AGREEMENT
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Among
XXXXXXXX XXXXX, 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 LENDERS PARTY HERETO,
and
FIRST UNION NATIONAL BANK,
as Administrative Agent, Documentation Agent,
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Collateral Agent, Book Manager
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and
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Lead Arranger
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Dated as of March 13, 2002
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Table of Contents
Page
SECTION 1. DEFINITIONS................................................................................3
SECTION 1.01 Defined Terms................................................................3
SECTION 1.02 Terms Generally.............................................................16
SECTION 2. AMOUNT AND TERMS OF CREDIT................................................................16
SECTION 2.01 Commitment of the Lenders...................................................16
SECTION 2.02 Borrowing Base..............................................................16
SECTION 2.03 Letters of Credit...........................................................16
SECTION 2.04 Issuance....................................................................18
SECTION 2.05 Nature of Letter of Credit Obligations Absolute.............................19
SECTION 2.06 Making of Loans.............................................................19
SECTION 2.07 Repayment of Loans; Evidence of Debt........................................20
SECTION 2.08 Interest on Loans...........................................................21
SECTION 2.09 Default Interest............................................................21
SECTION 2.10 Optional Termination or Reduction of Commitment.............................21
SECTION 2.11 Alternate Rate of Interest..................................................21
SECTION 2.12 Refinancing of Loans........................................................22
SECTION 2.13 Mandatory Prepayment; Commitment Termination; Cash Collateral...............23
SECTION 2.14 Optional Prepayment of Loans; Reimbursement of Lenders......................24
SECTION 2.15 Reserve Requirements; Change in Circumstances...............................25
SECTION 2.16 Change in Legality..........................................................26
SECTION 2.17 Pro Rata Treatment, etc.....................................................27
SECTION 2.18 Taxes.......................................................................27
SECTION 2.19 Certain Fees................................................................28
SECTION 2.20 Commitment Fee..............................................................28
SECTION 2.21 Letter of Credit Fees.......................................................28
SECTION 2.22 Nature of Fees..............................................................29
SECTION 2.23 Priority and Liens..........................................................29
SECTION 2.24 Right of Set-Off...........................................................30
SECTION 2.25 Security Interest in Letter of Credit Account...............................31
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Table of Contents
(continued)
Page
SECTION 2.26 Payment of Obligations......................................................31
SECTION 2.27 No Discharge; Survival of Claims............................................31
SECTION 2.28 Use of Cash Collateral......................................................31
SECTION 3. REPRESENTATIONS AND WARRANTIES............................................................32
SECTION 3.01 Organization and Authority..................................................32
SECTION 3.02 Due Execution...............................................................32
SECTION 3.03 Statements Made.............................................................32
SECTION 3.04 Financial Statements........................................................33
SECTION 3.05 Ownership...................................................................33
SECTION 3.06 Liens.......................................................................33
SECTION 3.07 Compliance with Law.........................................................33
SECTION 3.08 Insurance...................................................................34
SECTION 3.09 Use of Proceeds.............................................................34
SECTION 3.10 Litigation..................................................................34
SECTION 4. CONDITIONS OF LENDING.....................................................................34
SECTION 4.01 Conditions Precedent to Initial Loans and Initial Letters of Credit.........34
SECTION 4.02 Conditions Precedent to Each Loan and Each Letter of Credit.................37
SECTION 5. AFFIRMATIVE COVENANTS.....................................................................38
SECTION 5.01 Financial Statements, Reports, etc..........................................38
SECTION 5.02 Corporate Existence.........................................................41
SECTION 5.03 Insurance...................................................................41
SECTION 5.04 Obligations and Taxes.......................................................42
SECTION 5.05 Notice of Event of Default, etc.............................................42
SECTION 5.06 Access to Books and Records.................................................42
SECTION 5.07 Maintenance of Concentration Account........................................42
SECTION 5.08 Borrowing Base Certificate..................................................42
SECTION 5.09 Collateral Monitoring and Review............................................42
SECTION 5.10 Business Plan...............................................................43
SECTION 5.11 Detailed Budget.............................................................43
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Table of Contents
(continued)
Page
SECTION 6. NEGATIVE COVENANTS........................................................................43
SECTION 6.01 Liens.......................................................................43
SECTION 6.02 Merger, etc.................................................................43
SECTION 6.03 Indebtedness................................................................43
SECTION 6.04 Capital Expenditures........................................................44
SECTION 6.05 EBITDA......................................................................44
SECTION 6.06 Guarantees and Other Liabilities............................................44
SECTION 6.07 Chapter 11 Claims...........................................................44
SECTION 6.08 Dividends; Capital Stock....................................................44
SECTION 6.09 Transactions with Affiliates................................................44
SECTION 6.10 Investments, Loans and Advances.............................................44
SECTION 6.11 Disposition of Assets.......................................................45
SECTION 6.12 Nature of Business..........................................................45
SECTION 6.13 Budget......................................................................45
SECTION 7. EVENTS OF DEFAULT.........................................................................45
SECTION 7.01 Events of Default...........................................................45
SECTION 8. THE AGENT.................................................................................48
SECTION 8.01 Administration by Agent.....................................................48
SECTION 8.02 Advances and Payments.......................................................49
SECTION 8.03 Sharing of Setoffs..........................................................49
SECTION 8.04 Agreement of Required Lenders...............................................49
SECTION 8.05 Liability of Agent..........................................................50
SECTION 8.06 Reimbursement and Indemnification...........................................50
SECTION 8.07 Rights of Agent.............................................................51
SECTION 8.08 Independent Lenders.........................................................51
SECTION 8.09 Notice of Transfer..........................................................51
SECTION 8.10 Successor Agent.............................................................51
SECTION 9. GUARANTY..................................................................................51
SECTION 9.01 Guaranty....................................................................51
SECTION 9.02 No Impairment of Guaranty...................................................52
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Table of Contents
(continued)
Page
SECTION 9.03 Subrogation.................................................................53
SECTION 10. MISCELLANEOUS.............................................................................53
SECTION 10.01 Notices.....................................................................53
SECTION 10.02 Survival of Agreement, Representations and Warranties, etc..................53
SECTION 10.03 Successors and Assigns......................................................54
SECTION 10.04 Confidentiality.............................................................56
SECTION 10.05 Expenses....................................................................56
SECTION 10.06 Indemnity...................................................................57
SECTION 10.07 CHOICE OF LAW...............................................................57
SECTION 10.08 No Waiver...................................................................57
SECTION 10.09 Extension of Maturity.......................................................57
SECTION 10.10 Amendments, etc.............................................................57
SECTION 10.11 Severability................................................................58
SECTION 10.12 Headings....................................................................58
SECTION 10.13 Execution in Counterparts...................................................59
SECTION 10.14 Prior Agreements............................................................59
SECTION 10.15 Further Assurances..........................................................59
SECTION 10.16 WAIVER OF JURY TRIAL........................................................59
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Table of Contents
(continued)
Page
Annex A ..........................................................................................62
Exhibit A-1 ..........................................................................................63
Exhibit A-2 ..........................................................................................64
Exhibit B ..........................................................................................65
Exhibit C ..........................................................................................66
Exhibit D ..........................................................................................67
Schedule 1.01 ..........................................................................................68
Schedule 3.05 ..........................................................................................69
Schedule 3.06 ..........................................................................................70
Schedule 3.07 ..........................................................................................71
Schedule 6.08 ..........................................................................................72
Schedule 6.10 ..........................................................................................73
v
REVOLVING CREDIT AND GUARANTY AGREEMENT
Dated as of March 13, 2002
REVOLVING CREDIT AND GUARANTY AGREEMENT, dated as of March 13,
2002, among XXXXXXXX XXXXX, INC., a Delaware corporation (the "Borrower"), a
debtor and debtor-in-possession in a case pending under Chapter 11 of the
Bankruptcy Code, the direct and indirect domestic subsidiaries of the Borrower
signatory hereto (each a "Guarantor" and collectively, the "Guarantors"), each
of which Guarantors 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"), FIRST UNION NATIONAL BANK, a
national banking corporation and its successors (collectively, "First Union"),
each of the other financial institutions from time to time party hereto
(together with First Union, the "Lenders") and FIRST UNION, as administrative
agent (in such capacity, the "Agent") for the Lenders.
INTRODUCTORY STATEMENT
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On March 13, 2002, 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 Lenders for a revolving credit
and letter of credit facility in an aggregate principal amount not to exceed
$30,000,000, all of the Borrower's obligations under which are to be guaranteed
by the Guarantors.
The proceeds of the Loans will be used, subject to the Budget,
for working capital and other general corporate purposes of the Borrower and the
Guarantors.
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(v), the Borrower and the
Guarantors will provide to the Agent and the Lenders 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 joint and
several superpriority over all administrative expenses of the kind specified in
Sections 503(b) and 507(b) of the Bankruptcy Code;
(c) a perfected first priority Lien, pursuant to Section
364(c)(2) of the Bankruptcy Code, upon all property of the Borrower and the
Guarantors and the proceeds thereof (excluding the Factored Receivables (as
hereinafter defined) but including any equity of the Borrower or the Guarantors
in any proceeds of the Factored Receivables and, after satisfaction of the
obligations owed to CIT, any property relating to the Factored Receivables and
any other amounts due or to become due to the Borrower or the Guarantors in
respect of the Factored Receivables) that is not subject to valid, perfected and
non-avoidable liens on the Filing Date, including, without limitation, all
accounts receivable and inventory of the Borrower and Guarantors (excluding the
Borrower's and the Guarantors' rights in respect of avoidance actions under the
Bankruptcy Code) and on all cash and cash equivalents in the Letter of Credit
Account;
(d) a perfected Lien, pursuant to Section 364(c)(3) of the
Bankruptcy Code, upon (i) all property of the Borrower and the Guarantors (other
than the property referred to in paragraph (e) below that is subject to the
valid and perfected Liens that presently secure the Borrower's and Guarantors'
pre-petition Indebtedness under the Existing Agreements) that is subject to
valid, perfected and non-avoidable Liens in existence on the Filing Date or that
is subject to valid Liens in existence on the Filing Date that are perfected
subsequent to the Filing Date as permitted by Section 546(b) of the Bankruptcy
Code or that is subject to Permitted Liens, junior to such valid, perfected and
non-avoidable Liens and (ii) to the extent the Borrower or the Guarantors retain
any interest therein (reversionary or otherwise), the Factored Receivables and
any proceeds of the Factored Receivables, any property relating to the Factored
Receivables and any other amounts due or to become due to the Borrower or the
Guarantors in respect of the Factored Receivables; and
(e) perfected first priority senior priming Liens, pursuant to
Section 364(d)(1) of the Bankruptcy Code, upon all property of the Borrower and
the Guarantors that is subject to (x) the existing Liens in favor of Wachovia
Bank, N.A. ("Wachovia"), as collateral agent (in such capacity, the
"Pre-Petition Agent") under that certain Amended and Restated Intercreditor
Agreement, dated as of October 13, 2000, that presently secure the Borrower's
and Guarantors' pre-petition Indebtedness under or in connection with (A) that
certain Credit Agreement, dated as of May 26, 2000, among the Borrower, the
banks party thereto, Wachovia, as administrative agent, First Union National
Bank, as syndication agent and Bank One, N.A., as documentation agent, as
amended (the "Existing Credit Agreement"), and (B) each of the Note Purchase
Agreements and the Senior Notes, each dated as of December 18, 1998, issued
pursuant to such Note Purchase Agreements, as amended and restated, to the
following note holders, in the following original amounts: (i) the $3,000,000
7.06% Senior Note and $97,000,000 7.06% Senior Note executed by the Borrower in
favor of The Prudential Insurance Company of America; (ii) the $10,000,000 7.06%
Senior Note executed by the Borrower in favor of The Variable Annuity Life
Insurance Company; (iii) the $15,000,000 7.06% Senior Note executed by the
Borrower in favor of American General Annuity Insurance Company; (iv) the
$8,500,000 7.06% Senior Note, the $5,600,000 7.06% Senior Note and the
$4,900,000 7.06% Senior Note executed by the Borrower in favor of Massachusetts
Mutual Life Insurance Company; and (v) the $1,000,000 7.06% Senior Note executed
by the Borrower in favor of C. M. Life Insurance Company as amended (such Senior
Notes, related Note Purchase Agreements, guarantees and other documents executed
in connection therewith, the "Senior Note Agreements" and together with the
Existing Credit Agreement, the "Existing Agreements") (but subject to any Liens
to which the Liens being primed hereby are subject on the Filing Date or become
subject subsequent to the Filing Date as permitted by Section 546(b) of the
Bankruptcy Code) and (y) any Liens granted after the Filing Date to provide
adequate protection in respect of the Existing Agreements, which first priority
priming Liens in favor of the Agent and the Lenders shall be senior in all
2
respects to all of such existing Liens under or in connection with the Existing
Agreements, and to any Liens granted after the Filing Date to provide adequate
protection in respect thereof;
provided, however, the Borrower shall not be required to
pledge to the Agent in excess of 65% of the capital stock of its foreign
Subsidiaries.
All of the claims and the Liens granted hereunder in the Cases to the
Agent and the Lenders shall be subject to the Carve-Out to the extent provided
in Section 2.23 provided that following the Termination Date, amounts in the
Letter of Credit Account shall not be subject to the Carve-Out hereinafter
referred to
Accordingly, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
SECTION 1.01 Defined Terms.
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Section 2.
"Additional Credit" shall have the meaning given such term in
Section 4.02(d) hereof.
"Adjusted LIBOR Rate" shall mean, with respect to any
Eurodollar Borrowing for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/100 of 1%) equal to the quotient
of (a) the LIBOR Rate in effect for such Interest Period divided by (b) a
percentage (expressed as a decimal) equal to 100% minus the Eurodollar Reserve
Percentage. For purposes hereof, the term "LIBOR Rate" shall mean for the
Interest Period of such Eurodollar Loan, the rate per annum determined on the
basis of the offered rate for deposits in Dollars of amounts equal or comparable
to the principal amount of such Eurodollar Loan offered for a term comparable to
such Interest Period, which rate appear as the British Bankers Association
Settlement Rate for U.S. Dollars on the Telerate Screen Page 3750 effective as
of 11:00 A.M., London time, 2 Euro-Dollar Business Days prior to the first day
of such Interest Period, provided that if no such offered rate appears on such
page, the "LIBOR Rate" for such Interest Period will be the arithmetic average
(rounded upward, if necessary, to the next higher 1/100th of 1%) of rates quoted
by not less than 2 major banks in New York City, selected by the Administrative
Agent, at approximately 10:00 A.M., New York City time, 2 Eurodollar Business
Days prior to the first day of such Interest Period, for deposits in Dollars
offered to leading European banks for a period comparable to such Interest
Period in an amount comparable to the principal amount of such Eurodollar Loan.
The Adjusted LIBOR Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurodollar Reserve Percentage.
"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
3
"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 preamble
paragraph hereto.
"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 equal to the greatest of (a) the Prime Rate in effect on such day and (b)
the Federal Funds 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 Charlotte, North Carolina; each change in the Prime Rate
shall be effective on the date such change is publicly announced. If for any
reason the Agent shall have determined (which determination shall be conclusive
absent manifest error) that it is unable to ascertain the Federal Funds Rate 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) 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 or the Federal Funds Rate shall be effective on the effective
date of such change in the Prime Rate or the Federal Funds Rate, respectively.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an Eligible Assignee, and accepted by
the Agent, substantially in the form of Exhibit D.
"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 Southern District of New York or any other court having jurisdiction
over the Cases from time to time.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Borrower" shall have the meaning set forth in the
Introduction.
"Borrowing" shall mean the incurrence of Loans of a single
Type made from all the Lenders on a single date and having, in the case of
Eurodollar Loans, a single Interest Period (with any ABR Loan made pursuant to
Section 2.16 being considered a part of the related Borrowing of Eurodollar
Loans).
"Borrowing Base" shall be defined in a manner mutually
satisfactory to the Agent and the Borrower and reflected in the Borrowing Base
Amendment; such Borrowing Base shall include accounts receivable, to the extent
not transferred to CIT under the terms of certain factoring agreements, and
inventory of the Borrower and the Guarantors meeting certain eligibility
standards determined by the Agent in consultation with the Borrower and shall
reflect a reserve for the Carve-Out. Borrowing Base eligibility standards may be
4
determined from time to time by the Agent in its sole discretion. The Borrowing
Base shall be subject to reserves from time to time established by the Agent
with any changes in such standards and reserves to be effective five (5) days
after delivery of notice thereof to the Borrower.
"Borrowing Base Amendment" shall mean an amendment to this
Agreement satisfactory to the Agent and the Borrower to be executed and
delivered prior to the entry of the Final Order.
"Borrowing Base Certificate" shall mean a certificate
substantially in the form of an exhibit to the Borrowing Base Amendment (with
such changes therein as may be required by the Agent to reflect the components
of and reserves against the Borrowing Base as provided for hereunder from time
to time), executed and certified by a Financial Officer of the Borrower, which
shall include appropriate exhibits and schedules as referred to therein and as
provided for in Section 5.08.
"Budget" shall have the meaning given such term in Section
4.01(l) hereof until such time as a revised, detailed Budget is delivered
pursuant to Section 5.11, at which time "Budget" shall mean such revised,
detailed Budget.
"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which banks in the States of New York or North Carolina
are required or permitted to close (and, in the case of a Letter of Credit,
other than a day on which the Fronting Lender 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 which is not a Eurodollar
Business Day.
"Capital Expenditures" shall mean, for any period, the
aggregate of all expenditures (whether (i) paid in cash and not theretofore
accrued or (ii) accrued as liabilities during such period, and including that
portion of any post-petition Capitalized Lease which is capitalized on the
consolidated balance sheet of the Borrower and the Guarantors) net of cash
amounts received by the Borrower and the Guarantors from other Persons during
such period in reimbursement of Capital Expenditures made by the Borrower and
the Guarantors, excluding interest capitalized during construction, made by the
Borrower and the Guarantors during such period that, in conformity with GAAP,
are required to be included in or reflected by the property, plant, equipment or
similar fixed asset accounts reflected in the consolidated balance sheet of the
Borrower and the Guarantors (including equipment which is purchased
simultaneously with the trade-in of existing equipment owned by the Borrower or
any of the Guarantors to the extent of the gross amount of such purchase price
less the book value of the equipment being traded in at such time), but
excluding expenditures made in connection with the replacement or restoration of
assets to the extent reimbursed or financed from (x) insurance proceeds paid on
account of the loss of or the damage to the assets being replaced or restored or
(y) awards of compensation arising from the taking by condemnation or eminent
domain of such assets being replaced.
"Capitalized Lease" shall mean, as applied to any Person, any
lease of property by such Person as lessee which would be capitalized on a
balance sheet of such Person prepared in accordance with GAAP.
5
"Carve-Out" shall have the meaning set forth in Section 2.23.
"Cases" shall have the meaning set forth in the preamble
paragraph hereto.
"CIT" shall mean The CIT Group/Commercial Services, Inc.
"Closing Date" shall mean the date on which this Agreement has
been executed and the conditions precedent to the making of the initial Loans
set forth in Section 4.01 have been satisfied or waived, which date shall occur
promptly upon entry of the Interim Order, but not later than 10 days following
the entry of the Interim Order.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Collateral" shall mean the "Collateral" as defined in the
Security and Pledge Agreement.
"Commitment" shall mean, with respect to each Lender, the
commitment of each Lender 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
2.20.
"Commitment Letter" shall mean that certain Commitment Letter
dated March 7, 2002, between the Agent and the Borrower.
"Commitment Percentage" shall mean at any time, with respect
to each Lender, the percentage obtained by dividing its Commitment at such time
by the Total Commitment at such time.
"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 that is confirmed pursuant to an order of the Bankruptcy
Court.
"Dollars" and "$" shall mean lawful money of the United States
of America.
"EBITDA" shall mean, for any period, all as determined in
accordance with GAAP, modified to exclude therefrom foreign subsidiaries, the
consolidated net income (or net loss) of the Borrower and its Subsidiaries for
such period, plus (a) the sum of (i) depreciation expense, (ii) amortization
expense, (iii) other non-cash expenses, (iv) consolidated federal, state and
local income tax expense, (v) gross interest expense for such period less gross
interest income for such period, (vi) extraordinary losses, (vii) any
non-recurring charge or restructuring charge which in accordance with GAAP has
been deducted in the calculation of operating income, (viii) the cumulative
effect of any change in accounting principles and (ix) "Chapter 11 expenses" (or
"administrative costs reflecting Chapter 11 expenses") as shown on the
Borrower's consolidated statement of income for such period less (b)
extraordinary gains plus or minus (c) the amount of cash received or expended in
6
such period in respect of any amount which, under clause (vii) above, was taken
into account in determining EBITDA for such or any prior period.
"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 reasonably
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; (iii) a Lender Affiliate of the assignor Lender;
and (iv) any other financial institution satisfactory to the Borrower (but only
for so long as an Event of Default shall not have occurred and be continuing)
and the Agent.
"Environmental Lien" shall mean a Lien in favor of any
Governmental Authority for (i) any liability under federal or state
environmental laws or regulations, or (ii) damages arising from or costs
incurred by such Governmental Authority in response to a release or threatened
release of a hazardous or toxic waste, substance or constituent, or other
substance into the environment.
"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 each person (as defined in
Section 3(9) of ERISA) which together with the Borrower or a Subsidiary of the
Borrower would be deemed to be a single employer within the meaning of Section
414(b), (c), (m), or (o) of the Code.
"Eurocurrency Liabilities" shall have the meaning assigned
thereto in Regulation D issued by the Board, as in effect from time to time.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Business Day" means any Business Day on which
dealings in Dollar deposits are carried out in the London interbank market.
"Eurodollar Loan" shall mean any Loan bearing interest at a
rate determined by reference to the Adjusted LIBOR Rate in accordance with the
provisions of Section 2.
"Eurodollar Reserve Percentage" shall mean on any date the
percentage (expressed as a decimal) established by the Board and any other
banking authority for determining the maximum reserve requirement for a member
bank of the Federal Reserve System in respect of "Eurocurrency Liabilities" (or
in respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Eurodollar Loans is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any Lender to United States residents). All
Eurodollar Loans made hereunder shall be deemed to constitute Eurocurrency
Liabilities.
"Event of Default" shall have the meaning given such term in
Section 7.
7
"Excluded Taxes" shall mean, with respect to the Agent, any
Lender, the Fronting Lender or any other recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender, any withholding tax that is imposed on amounts payable to
such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender's failure to comply with Section 2.18(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 2.18(a).
"Existing Agreements" shall have the meaning set forth in
Paragraph (e) of the Introductory Statement and shall include all of the
agreements granting security interests and Liens in property and assets of the
Borrower and the Guarantors to the Existing Lenders, including without
limitation, the security agreements, mortgages and leasehold mortgages listed on
Schedule 1.01 hereto, each of which documents was executed and delivered (to the
extent party thereto) by the Borrower and the Guarantors prior to the Filing
Date, and that certain Intercreditor Agreement dated as of October 13, 2000
among the Existing Lenders, as each may have been amended or modified from time
to time.
"Existing Credit Agreement" shall have the meaning set forth
in paragraph (e) of the Introductory Statement.
"Existing Lenders" shall mean, collectively, the lenders under
the Existing Agreements, together with any successors or assigns thereof.
"Factored Receivables" shall mean accounts receivable
heretofore or as and when hereafter irrevocably sold or otherwise transferred to
CIT pursuant to a factoring agreement.
"Federal Funds Rate" means the rate per annum (rounded
upwards, if necessary, to the next higher 1/100th of 1%) representing the daily
effective federal funds rate as quoted by the Agent and confirmed in Federal
Reserve Board Statistical Release H.15 (519) or any successor or substitute
publication selected by the Agent. If, for any reason, such rate is not
available, then "Federal Funds Rate" shall mean a daily rate which is
determined, in the opinion of the Agent, to be the rate at which federal funds
are being offered for sale in the national federal funds market at 9:00 a.m.
(Charlotte, North Carolina time). Rates for weekends or holidays shall be the
same as the rate for the most immediate preceding Business Day.
"Fees" shall collectively mean the Commitment Fees, Letter of
Credit Fees and other fees referred to in Sections 2.19, 2.20 and 2.21.
"Filing Date" shall mean March 13, 2002.
"Final Order" shall have the meaning given such term in
Section 4.02(d).
8
"Financial Officer" shall mean the Chief Financial Officer,
Principal Accounting Officer, or the Treasurer of the Borrower.
"First Union" shall have the meaning set forth in the preamble
paragraph hereto.
"Foreign Lender" shall mean any Lender that is organized under
the laws of a jurisdiction other than that in which the Borrower is located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"Fronting Lender" shall mean First Union (or any of its
banking affiliates) or such other Lender (which other Lender shall be reasonably
satisfactory to the Borrower) as may agree with First Union 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 preamble
paragraph hereto.
"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 repossession or sale of such property), (v)
all obligations of such Person under Capitalized Leases, (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
9
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.
"Indemnified Taxes" shall mean Taxes other than Excluded
Taxes.
"Insufficiency" shall mean, with respect to any Plan, its
"amount of unfunded benefit liabilities" within the meaning of Section
4001(a)(18) of ERISA, if any.
"Interim Order" shall have the meaning given such term in
Section 4.01(b).
"Interest Payment Date" shall mean (i) as to any Eurodollar
Loan, the last day of each consecutive 30 day period running from the
commencement of the applicable Interest Period, and (ii) as to all ABR Loans,
the last calendar day of each month and the date on which any ABR Loans are
refinanced with Eurodollar Loans pursuant to Section 2.12.
"Interest Period" shall mean, as to any Borrowing of
Eurodollar Loans, the period commencing on the date of such Borrowing (including
as a result of a refinancing of ABR Loans) or on the last day of the preceding
Interest Period applicable to such Borrowing and ending on the numerically
corresponding day (or if there is no corresponding day, the last day) in the
calendar month that is one or three months thereafter, as the Borrower may elect
in the related notice delivered pursuant to Sections 2.06(b) or 2.12; provided,
however, that (i) if any Interest Period would end on a day which shall not be a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day, and (ii) no Interest Period shall end later than the
Termination Date.
"Inventory" shall mean all Raw Materials and Finished Goods
held by the Borrower in the normal course of business.
"Investments" shall have the meaning given such term in
Section 6.10.
"Lender Affiliate" shall mean, (a) with respect to any Lender,
(i) an Affiliate of such Lender or (ii) any entity (whether a corporation,
partnership, trust or otherwise) that is engaged in making, purchasing, holding
or otherwise investing in bank loans and similar extensions of credit in the
ordinary course of its business and is administered or managed by a Lender or an
Affiliate of such Lender and (b) with respect to any Lender that is a fund which
invests in bank loans and similar extensions of credit, any other fund that
invests in bank loans and similar extensions of credit and is managed by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.
"Lenders" shall have the meaning set forth in the preamble
paragraph hereto.
"Letter of Credit" shall mean any irrevocable letter of credit
issued pursuant to Section 2.03, which letter of credit shall be (i) an import
documentary or a standby letter of credit, (ii) issued for purposes that are
consistent with the ordinary course of business of the Borrower or any
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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 Fronting Lender.
"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 One First Union Center, 000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, designated as the "Guilford Letter of Credit
Account" that shall be used solely for the purposes set forth in Sections
2.03(b) and 2.13.
"Letter of Credit Fees" shall mean the fees payable in respect
of Letters of Credit pursuant to Section 2.21.
"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 to the Agent or any Lender in connection herewith as all
of the same may from time to time be amended, modified or supplemented.
"Maturity Date" shall mean March 13, 2003.
"Multiemployer Plan" shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA, which is maintained or contributed to by
(or to which there is an obligation to contribute of) the Borrower or a
Subsidiary of the Borrower or an ERISA Affiliate, and each such plan for the
five-year period immediately following the latest date on which the Borrower, or
a Subsidiary of the Borrower or an ERISA Affiliate maintained, contributed to or
had an obligation to contribute to such plan.
"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 (as defined in Section 3(9) of ERISA) 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.
"Net Proceeds" shall mean, in respect of any sale of assets,
the cash proceeds of such sale after the payment of or reservation for (x)
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 (all of which expenses shall
be satisfactory to the Agent in its reasonable judgment), (y) the amount secured
11
by valid and perfected Liens, if any, that are senior to the Liens on such
assets held by the Agent on behalf of the Lenders and (z) the reasonable costs
and expenses of any repairs, alterations or improvements made by the Borrower or
any Guarantor to the assets sold to the extent such repairs, alterations or
improvements were required pursuant to the terms of such sale.
"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 Lenders and the Agent under the Loan
Documents.
"Orders" shall mean collectively the Interim Order and the
Final Order.
"Other Taxes" shall mean any and all present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
"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 plan (as defined
in Section 414(j) of the Code and Section 3(35) of ERISA) which meets and is
subject to the requirements of Section 401(a) of the Code.
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within twelve months from the date of acquisition thereof;
(b) without limiting the provisions of paragraph (d) below,
investments in commercial paper maturing within six months from the date of
acquisition thereof and having, at such date of acquisition, a rating of at
least "A-2" or the equivalent thereof from Standard & Poor's Corporation or of
at least "P-2" or the equivalent thereof from Xxxxx'x Investors Service, Inc.;
(c) investments in certificates of deposit, banker's
acceptances and time deposits (including Eurodollar time deposits) maturing
within six months from the date of acquisition thereof issued or guaranteed by
or placed with (i) any domestic office of the Agent or the bank with whom the
Borrower and the Guarantors maintain their cash management system, provided,
that if such bank is not a Lender hereunder, such bank shall have entered into
an agreement with the Agent pursuant to which such bank shall have waived all
rights of setoff and confirmed that such bank does not have, nor shall it claim,
a security interest therein or (ii) any domestic office of any other commercial
bank of recognized standing organized under the laws of the United States of
America or any State thereof that has a combined capital and surplus and
undivided profits of not less than $250,000,000 and is the principal banking
12
Subsidiary of a bank holding company having a long-term unsecured debt rating of
at least "A-2" or the equivalent thereof from Standard & Poor's Ratings Services
or at least "P-2" or the equivalent thereof from Xxxxx'x Investors Service,
Inc.;
(d) investments in commercial paper maturing within six months
from the date of acquisition thereof and issued by (i) the holding company of
the Agent or (ii) the holding company of any other commercial bank of recognized
standing organized under the laws of the United States of America or any State
thereof that has (A) a combined capital and surplus in excess of $250,000,000
and (B) commercial paper rated at least "A-2" or the equivalent thereof from
Standard & Poor's Corporation or of at least "P-2" or the equivalent thereof
from Xxxxx'x Investors Service, Inc.;
(e) investments in repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clause
(a) above entered into with any office of a bank or trust company meeting the
qualifications specified in clause (c) above;
(f) investments in money market funds substantially all the
assets of which are comprised of securities of the types described in clauses
(a) through (e) above; and
(g) to the extent owned on the Filing Date, investments by the
Borrower or any Guarantor in the capital stock or membership interest of any
direct or indirect Subsidiary.
"Permitted Liens" shall mean (i) Liens imposed by law (other
than Environmental Liens and any Lien imposed under ERISA) 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 (other than
Environmental Liens and any Lien imposed under ERISA) in existence on the Filing
Date or thereafter imposed by law and created in the ordinary course of
business; (iii) Liens (other than any Lien imposed under ERISA) incurred or
deposits made in the ordinary course of business (including, without limitation,
surety bonds and appeal bonds) or 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; (v)
letters of credit or deposits in the ordinary course to secure leases; and (vi)
extensions, renewals or replacements of any Lien referred to in paragraphs (i)
through (v) above, 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.
13
"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 the date that is 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 have the meaning set forth in
paragraph (e) of the Introductory Statements.
"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.
"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 Lenders" shall mean, at any time, Lenders holding
Loans representing in excess of 50% of the aggregate principal amount of such
Loans outstanding or, if no Loans are outstanding, Lenders having Commitments
representing in excess of 50% of the Total Commitment and in any event including
First Union.
"Security and Pledge Agreement" shall have the meaning set
forth in Section 4.01(c).
"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 or (ii) was so maintained and in respect of
which the Borrower could have liability under Title IV of ERISA in the event
such Plan has been or were to be terminated.
"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 Lenders" 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.
14
"Taxes" shall mean any and all present or future taxes,
levies, imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority.
"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(c) of ERISA (other than a "reportable
event" as to which the 30-day notice is waived under subsection .22, .23, .25,
..27 or .28 of PBGC Regulation Section 4043) or an event described in Section
4068 of ERISA 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 Employer Plan during a plan year in which it
was a "substantial employer," as such term is defined in Section 4001(a)(2) of
ERISA, the incurrence of liability by the Borrower or any ERISA Affiliate under
Section 4064 of ERISA upon the termination of a Multiple Employer Plan, the
imposition of Withdrawal Liability, 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, if such amendment
requires the provision of security, 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 in the ordinary course).
"Total Commitment" shall mean, at any time, the sum of the
Commitments at such time.
"Type" when used in respect of any Loan or Borrowing shall
refer to the Rate of interest by reference to which interest on such Loan or on
the Loans comprising such Borrowing is determined. For purposes hereof, "Rate"
shall mean the Adjusted LIBOR Rate and the Alternate Base Rate.
"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
15
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 referred to in Section 3.04.
SECTION 2. AMOUNT AND TERMS OF CREDIT
SECTION 2.01 Commitment of the Lenders.
(a) Each Lender severally and not jointly with the other
Lenders agrees, upon the terms and subject to the conditions herein set forth
(including, without limitation, the provisions of Section 2.28), 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 ending on the Termination Date in an aggregate principal amount
not to exceed, when added to such Lender's Commitment Percentage of the then
aggregate Letter of Credit Outstandings (in excess of the amount of cash then
held in the Letter of Credit Account pursuant to Section 2.03(b)), the
Commitment of such Lender, 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 lesser of (i) the Total
Commitment of $30,000,000, as the same may be reduced from time to time pursuant
to Sections 2.10 and 2.13 and (ii) (x) prior to the execution and delivery of
the Borrowing Base Amendment, $10,000,000 and (y) from and after the execution
and delivery of the Borrowing Base Amendment, the Borrowing Base.
(b) Each Borrowing shall be made by the Lenders pro rata in
accordance with their respective Commitments; provided, however, that the
failure of any Lender to make any Loan shall not in itself relieve the other
Lenders of their obligations to lend.
SECTION 2.02 Borrowing Base. Notwithstanding any other provision of
this Agreement to the contrary, the aggregate principal amount of all
outstanding Loans plus the then aggregate Letter of Credit Outstandings (in
excess of the amount of cash then held in the Letter of Credit Account pursuant
to Section 2.03(b)) shall not at any time exceed (x) prior to the execution and
delivery of the Borrowing Base Amendment, $10,000,000 and (y) from and following
the date upon which the Borrowing Base Amendment shall have been executed, the
Borrowing Base and no Loan shall be made or Letter of Credit issued in violation
of the foregoing.
SECTION 2.03 Letters of Credit.
(a) Upon the terms and subject to the conditions herein set
forth, the Borrower may request a Fronting Lender, 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 Lender 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
16
$10,000,000 or (ii) the aggregate Letter of Credit Outstandings, when added to
the aggregate outstanding principal amount of the Loans, would exceed the lesser
of (x) the Total Commitment of $30,000,000, as the same may be reduced from time
to time pursuant to Sections 2.10 and 2.13 and (y) (1) prior to the execution
and delivery of the Borrowing Base Amendment, $10,000,000, and (2) from and
after the execution and delivery of the Borrowing Base Amendment, the Borrowing
Base and, provided further that no Letter of Credit shall be issued if the
Fronting Lender shall have received notice from the Agent or the Required
Lenders that the conditions to such issuance have not been met. Each Letter of
Credit shall be subject to the Uniform Customs and Practice for Documentary
Credits, International Chamber of Commerce Publication No. 500, or any successor
publication, as adopted or amended from time to time.
(b) No Letter of Credit shall expire later than 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
Lender 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 Lenders in a form satisfactory to such Fronting Lender and the
Agent (in their sole discretion), issued by a bank satisfactory to such Fronting
Lender and the Agent (in their sole discretion), and in an amount equal to 105%
of the then undrawn stated amount of all outstanding Letters of Credit issued by
such Fronting Lenders (less the amount, if any, then on deposit in the Letter of
Credit Account) 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 Letter of Credit
Outstandings (less the amount, if any, then on deposit in the Letter of Credit
Account) as collateral security for the Borrower's reimbursement obligations in
connection therewith, such cash to be promptly 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 Lender, in
addition to such other fees and charges as are specifically provided for in
Section 2.21 hereof, such fees and charges in connection with the issuance and
processing of the Letters of Credit issued by such Fronting Lender as are
customarily imposed by such Fronting Lender from time to time in connection with
letter of credit transactions.
(d) Drafts drawn under each Letter of Credit (i) shall be
reimbursed by the Borrower in Dollars not later than the first Business Day
following the date of draw and (ii) shall bear interest from the date of draw
until the first Business Day following the date of draw at a rate per annum
equal to the Alternate Base Rate plus 2.50% and thereafter on the unreimbursed
portion until reimbursed in full at a rate per annum equal to the Alternate Base
Rate plus 4.50% (computed on the basis of the actual number of days elapsed over
a year of 365 days or 366 days in a leap year). 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 4.02 or (y) if such draw occurs on or after the Termination
Date, in cash. Each Lender 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 Sections 2.02 or 2.28.
17
(e) Immediately upon the issuance of any Letter of Credit by
any Fronting Lender, such Fronting Lender shall be deemed to have sold to each
Lender other than such Fronting Lender and each such other Lender shall be
deemed unconditionally and irrevocably to have purchased from such Fronting
Lender, without recourse or warranty, an undivided interest and participation,
to the extent of such Lender'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 Lenders. Any action taken or omitted by a Fronting Lender
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 Lender any resulting liability to any other Lender.
(f) In the event that a Fronting Lender makes any payment
under any Letter of Credit and the Borrower shall not have reimbursed such
amount in full to such Fronting Lender pursuant to this Section, the Fronting
Lender shall promptly notify the Agent, which shall promptly notify each Lender
of such failure, and each Lender shall promptly and unconditionally pay to the
Agent for the account of the Fronting Lender the amount of such Lender's
Commitment Percentage of such unreimbursed payment in Dollars and in same day
funds. If the Fronting Lender so notifies the Agent, and the Agent so notifies
the Lenders prior to 11:00 a.m. (Charlotte, North Carolina time) on any Business
Day, such Lenders shall make available to the Fronting Lender such Lender's
Commitment Percentage of the amount of such payment on such Business Day in same
day funds. If and to the extent such Lender shall not have so made its
Commitment Percentage of the amount of such payment available to the Fronting
Lender, such Lender agrees to pay to such Fronting Lender, 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
Lender at the Federal Funds Rate. The failure of any Lender to make available to
the Fronting Lender its Commitment Percentage of any payment under any Letter of
Credit shall not relieve any other Lender of its obligation hereunder to make
available to the Fronting Lender its Commitment Percentage of any payment under
any Letter of Credit on the date required, as specified above, but no Lender
shall be responsible for the failure of any other Lender to make available to
such Fronting Lender such other Lender's Commitment Percentage of any such
payment. Whenever a Fronting Lender receives a payment of a reimbursement
obligation as to which it has received any payments from the Lenders pursuant to
this paragraph, such Fronting Lender shall pay to each Lender which has paid its
Commitment Percentage thereof, in Dollars and in same day funds, an amount equal
to such Lender's Commitment Percentage thereof.
SECTION 2.04 Issuance. Whenever the Borrower desires a Fronting Lender
to issue a Letter of Credit, it shall give to such Fronting Lender and the Agent
prior written (including telegraphic, telex, facsimile or cable communication)
notice reasonably in advance of the requested date of issuance 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.
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SECTION 2.05 Nature of Letter of Credit Obligations Absolute. The
obligations of the Borrower to reimburse the Lenders 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 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 Lender of any draft or the reimbursement by the Borrower
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 Lenders, 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 Lender 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 2.06 Making of Loans.
(a) Except as contemplated by Section 2.11, Loans shall be
either ABR Loans or Eurodollar Loans as the Borrower may request subject to and
in accordance with this Section, provided that all Loans made pursuant to the
same Borrowing shall, unless otherwise specifically provided herein, be Loans of
the same Type. Each Lender may fulfill its Commitment with respect to any
Eurodollar Loan or ABR Loan by causing any lending office of such Lender 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 Lender shall, subject to its overall policy considerations,
use reasonable efforts (but shall not be obligated) to select a lending office
which will not result in the payment of increased costs by the Borrower pursuant
to Section 2.15. Subject to the other provisions of this Section and the
provisions of Section 2.12, Borrowings of Loans of more than one Type may be
incurred at the same time, provided that no more than five (5) Borrowings of
Eurodollar Loans may be outstanding at any time.
(b) The Borrower shall give the Agent prior notice of each
Borrowing hereunder of at least three Business Days for Eurodollar Loans and one
Business Day for ABR Loans (subject, in the case of ABR Loans, to the last
sentence of this Section); such notice shall be irrevocable and shall specify
the amount of the proposed Borrowing (which shall not be less than $5,000,000
(and integral multiples of $1,000,000) in the case of Eurodollar Loans and
$1,000,000 (and integral multiples of $100,000) in the case of ABR Loans) 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 1:00 p.m., Charlotte, North Carolina time, on the third Business Day
in the case of Eurodollar Loans and 11:00 a.m., Charlotte, North Carolina time
on the first Business Day in the case of ABR Loans, preceding the date on which
such Borrowing is to be made except as provided in the last sentence of this
Section 2.06(b). Such notice shall specify whether the Borrowing then being
requested is to be a Borrowing of ABR Loans or Eurodollar Loans. If no election
is made as to the Type of Loan, such notice shall be deemed a request for
Borrowing of ABR Loans. The Agent shall promptly notify each Lender of its
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proportionate share of such Borrowing, the date of such Borrowing, the Type of
Borrowing or Loans being requested and the Interest Period or Interest Periods
applicable thereto, as appropriate. On the borrowing date specified in such
notice, each Lender shall make its share of the Borrowing available at the
office of the Agent at One First Union Center, 000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, no later than 12:00 noon, Charlotte, North
Carolina time, in immediately available funds. Upon receipt of the funds made
available by the Lenders 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 Lenders available to the Borrower no later than 2:00 p.m. Charlotte,
North Carolina time (other than as provided in the following sentence). With
respect to ABR Loans of $5,000,000 or less, the Lenders shall make such
Borrowings available to the Agent and 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 such funds available to the Borrower by 3:00
p.m., Charlotte, North Carolina time, on the same Business Day that the Borrower
gives telephonic notice (promptly confirmed in writing) to the Agent of such
Borrowing by 12:00 noon, Charlotte, North Carolina time.
SECTION 2.07 Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to the
Agent for the account of each Lender the then unpaid principal amount of each
Loan on the Termination Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Type thereof and the Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any sum received by the Agent hereunder for the account
of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced
by a promissory note. In such event, the Borrower shall execute and deliver to
such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) 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 the order of the payee
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named therein (or, if such promissory note is a registered note, to such payee
and its registered assigns).
SECTION 2.08 Interest on Loans.
(a) Subject to the provisions of Section 2.09, each ABR Loan
shall bear interest (computed on the basis of the actual number of days elapsed
over a year of 360 days or, when the Alternate Base Rate is based on the Prime
Rate, a year with 365 days or 366 days in a leap year) at a rate per annum equal
to the Alternate Base Rate plus 2.50%.
(b) Subject to the provisions of Section 2.09, each Eurodollar
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, during each Interest
Period applicable thereto, to the Adjusted LIBOR Rate for such Interest Period
in effect for such Borrowing plus 3.50%.
(c) Accrued interest on all Loans shall be payable monthly in
arrears on each Interest Payment Date applicable thereto, on the Termination
Date, after the Termination Date on demand and (with respect to Eurodollar
Loans) upon any repayment or prepayment thereof (on the amount prepaid).
SECTION 2.09 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 2.03(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 or when the Alternate Base
Rate is applicable and is based on the Prime Rate, a year with 365 days or 366
days in a leap year) equal to (x) in the case of Borrowings consisting of
Eurodollar Loans, the Adjusted LIBOR Rate in effect for such Borrowing plus
5.50% and (y) in the case of all other amounts, the Alternate Base Rate plus
4.50%.
SECTION 2.10 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 Lender
the Commitment Fee accrued and unpaid on the amount of the Commitment of such
Lender 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 Lender.
SECTION 2.11 Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Loan, the Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower absent manifest
error) that reasonable means do not exist for ascertaining the applicable
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Adjusted LIBOR Rate, the Agent shall, as soon as practicable thereafter, give
written, facsimile or telegraphic notice of such determination to the Borrower
and the Lenders, and any request by the Borrower for a Borrowing of Eurodollar
Loans (including pursuant to a refinancing with Eurodollar Loans) pursuant to
Section 2.06 or 2.12 shall be deemed a request for a Borrowing of ABR Loans.
After such notice shall have been given and until the circumstances giving rise
to such notice no longer exist, each request for a Borrowing of Eurodollar Loans
shall be deemed to be a request for a Borrowing of ABR Loans.
SECTION 2.12 Refinancing of Loans. The Borrower shall have the right,
at any time, on three Business Days' prior irrevocable notice to the Agent
(which notice, to be effective, must be received by the Agent not later than
1:00 p.m., Charlotte, North Carolina time, on the third Business Day preceding
the date of any refinancing), (x) to refinance (without the satisfaction of the
conditions set forth in Section 4 as a condition to such refinancing, except as
set forth in subsection (a) below) any outstanding Borrowing or Borrowings of
Loans of one Type (or a portion thereof) with a Borrowing of Loans of the other
Type or (y) to continue an outstanding Borrowing of Eurodollar Loans for an
additional Interest Period, subject to the following:
(a) as a condition to the refinancing of ABR Loans with
Eurodollar Loans and to the continuation of Eurodollar Loans for an additional
Interest Period, no Event of Default shall have occurred and be continuing at
the time of such refinancing;
(b) if less than a full Borrowing of Loans shall be
refinanced, such refinancing shall be made pro rata among the Lenders in
accordance with the respective principal amounts of the Loans comprising such
Borrowing held by the Lenders immediately prior to such refinancing;
(c) the aggregate principal amount of Loans being refinanced
shall be at least $5,000,000, provided that no partial refinancing of a
Borrowing of Eurodollar Loans shall result in the Eurodollar Loans remaining
outstanding pursuant to such Borrowing being less than $5,000,000 in aggregate
principal amount;
(d) each Lender shall effect each refinancing by applying the
proceeds of its new Eurodollar Loan or ABR Loan, as the case may be, to its Loan
being refinanced;
(e) the Interest Period with respect to a Borrowing of
Eurodollar Loans effected by a refinancing or in respect to the Borrowing of
Eurodollar Loans being continued as Eurodollar Loans shall commence on the date
of refinancing or the expiration of the current Interest Period applicable to
such continuing Borrowing, as the case may be;
(f) a Borrowing of Eurodollar Loans may be refinanced only on
the last day of an Interest Period applicable thereto; and
(g) each request for a refinancing with a Borrowing of
Eurodollar Loans which fails to state an applicable Interest Period shall be
deemed to be a request for an Interest Period of one month.
In the event that the Borrower shall not give notice to refinance any Borrowing
of Eurodollar Loans, or to continue such Borrowing as Eurodollar Loans, or shall
not be entitled to refinance or continue such Borrowing as Eurodollar Loans, in
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each case as provided above, such Borrowing shall automatically be refinanced
with a Borrowing of ABR Loans at the expiration of the then-current Interest
Period. The Agent shall, after it receives notice from the Borrower, promptly
give each Lender notice of any refinancing, in whole or part, of any Loan made
by such Lender.
SECTION 2.13 Mandatory Prepayment; Commitment Termination; Cash
Collateral.
(a) If at any time the aggregate principal amount of the
outstanding Loans plus the Letter of Credit Outstandings exceeds the lesser of
(x) the Total Commitment and (y) on or after the date as of which a Borrowing
Base Certificate is required to be delivered to the Agent, the Borrowing Base,
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/or the Borrowing Base, as the case may be, and (ii) if,
after giving effect to the prepayment in full of the Loans, the undrawn amount
of outstanding Letter of Credit Outstandings in excess of the amount of cash
held in the Letter of Credit Account exceeds the Total Commitment and/or the
Borrowing Base, as the case may be, deposit into the Letter of Credit Account an
amount 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 or Borrowing Base, as the case may be.
(b) Upon the sale or other disposition (including as a result
of casualty loss or condemnation) of any of the assets or properties of the
Borrower or the Guarantors (except for sales of Inventory, fixtures and
equipment in the ordinary course of business), the Borrower shall apply (i) so
long as no Event of Default or event which upon notice or lapse of time or both
would constitute an Event of Default has occurred and is continuing, 100% of the
Net Proceeds from such sale or disposition to the prepayment of the Loans,
provided that prepayments made pursuant to this clause (i) shall not reduce the
Total Commitment and (ii) if an Event of Default or event which upon notice or
lapse of time or both would constitute an Event of Default has occurred or is
continuing, 100% of the Net Proceeds from such sale or disposition to the
prepayment of the Loans and in each case, after the Loans have been prepaid in
full, to the deposit with the Agent of cash collateral for the Letter of Credit
Outstandings in an aggregate amount equal to 105% thereof ("Cash
Collaterization"). Upon any prepayment pursuant to clause (ii) above, the Total
Commitment shall be automatically and permanently reduced in an amount equal to
the amount so prepaid.
(c) If on any Business Day, unencumbered cash (including cash
equivalents) on hand of the Borrower and Guarantors exceeds the sum of
$2,500,000, the Borrower shall, on the first Business Day thereafter, if cash
(and cash equivalents) continues to exceed such amount, prepay the Loans to the
extent of any such excess amount (provided, however, that any prepayment
pursuant to the foregoing shall not reduce the Total Commitment). As used
herein, "unencumbered cash" shall mean, at any time, all cash (and cash
equivalents) excluding cash that secures hedging transactions.
(d) Upon the Termination Date, the Total Commitment shall be
terminated in full and the Borrower shall repay the Loans in full (plus any
accrued but unpaid interest and Fees thereon) and, except as the Agent may
23
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 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 2.03(b).
SECTION 2.14 Optional Prepayment of Loans; Reimbursement of Lenders.
(a) The Borrower shall have the right at any time and from
time to time to prepay any Loans, in whole or in part, (x) with respect to
Eurodollar Loans, upon at least three Business Days' prior written or facsimile
notice to the Agent and (y) with respect to ABR Loans on the same Business Day
if written or facsimile notice is received by the Agent prior to 11:00 a.m.,
Charlotte, North Carolina time, and thereafter upon at least one Business Day's
prior written or facsimile notice to the Agent; provided, that (i) each such
partial prepayment shall be in multiples of $1,000,000, (ii) no prepayment of
Eurodollar Loans shall be permitted pursuant to this Section 2.14(a) other than
on the last day of an Interest Period applicable thereto unless such prepayment
is accompanied by the payment of the amounts described in clause (i) of the
first sentence of Section 2.14(b), and (iii) no partial prepayment of a
Borrowing of Eurodollar Loans shall result in the aggregate principal amount of
the Eurodollar Loans remaining outstanding pursuant to such Borrowing being less
than $5,000,000. Each notice of prepayment shall specify the prepayment date,
the principal amount of the Loans to be prepaid and in the case of Eurodollar
Loans, the Borrowing or Borrowings pursuant to which made, shall be irrevocable
and shall commit the Borrower to prepay such Loan by the amount and on the date
stated therein. The Agent shall, promptly after receiving notice from the
Borrower hereunder, notify each Lender of the principal amount of the Loans held
by such Lender which are to be prepaid, the prepayment date and the manner of
application of the prepayment.
(b) The Borrower shall reimburse each Lender on demand for any
loss incurred or to be incurred by it in the reemployment of the funds released
(i) resulting from any prepayment (for any reason whatsoever, including, without
limitation, refinancing with ABR Loans) of any Eurodollar Loan required or
permitted under this Agreement, if such Loan is prepaid other than on the last
day of the Interest Period for such Loan (including, without limitation, any
such prepayment in connection with the syndication of the credit facility
evidenced by this Agreement) or (ii) in the event that after the Borrower
delivers a notice of borrowing under Section 2.06 in respect of Eurodollar
Loans, such Loans are not made on the first day of the Interest Period specified
in such notice of borrowing for any reason other than a breach by such Lender of
its obligations hereunder. Such loss shall be the amount as reasonably
determined by such Lender as the excess, if any, of (A) the amount of interest
which would have accrued to such Lender on the amount so paid or not borrowed at
a rate of interest equal to the Adjusted LIBOR Rate for such Loan, for the
period from the date of such payment or failure to borrow to the last day (x) in
the case of a payment or refinancing with ABR Loans other than on the last day
of the Interest Period for such Loan, of the then current Interest Period for
such Loan, or (y) in the case of such failure to borrow, of the Interest Period
for such Loan which would have commenced on the date of such failure to borrow,
over (B) the amount of interest which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the London interbank market. Each Lender shall deliver to the Borrower
24
from time to time one or more certificates setting forth the amount of such loss
as determined by such Lender.
(c) In the event the Borrower fails to prepay any Loan on the
date specified in any prepayment notice delivered pursuant to Section 2.14(a),
the Borrower on demand by any Lender shall pay to the Agent for the account of
such Lender any amounts required to compensate such Lender for any loss incurred
by such Lender as a result of such failure to prepay, including, without
limitation, any loss, cost or expenses incurred by reason of the acquisition of
deposits or other funds by such Lender to fulfill deposit obligations incurred
in anticipation of such prepayment, but without duplication of any amounts paid
under Section 2.14(b). Each Lender shall deliver to the Borrower from time to
time one or more certificates setting forth the amount of such loss as
determined by such Lender.
(d) Any partial prepayment of the Loans by the Borrower
pursuant to Sections 2.13 or 2.14 shall be applied as specified by the Borrower
or, in the absence of such specification, as determined by the Agent, provided
that in the latter case no Eurodollar Loans shall be prepaid pursuant to Section
2.13 to the extent that such Loan has an Interest Period ending after the
required date of prepayment unless and until all outstanding ABR Loans and
Eurodollar Loans with Interest Periods ending on such date have been repaid in
full.
SECTION 2.15 Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision herein, if after the
date of this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law) shall change the basis of taxation of payments to any Lender of
the principal of or interest on any Eurodollar Loan made by such Lender or any
fees or other amounts payable hereunder (other than changes in respect of Taxes,
Other Taxes and taxes imposed on, or measured by, the net income or overall
gross receipts or franchise taxes of such Lender by the national jurisdiction in
which such Lender has its principal office or in which the applicable lending
office for such Eurodollar Loan is located or by any political subdivision or
taxing authority therein, or by any other jurisdiction or by any political
subdivision or taxing authority therein other than a jurisdiction in which such
Lender would not be subject to tax but for the execution and performance of this
Agreement), or shall impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of or credit extended by such Lender (except any such reserve
requirement which is reflected in the Adjusted LIBOR Rate) or shall impose on
such Lender or the London interbank market any other condition affecting this
Agreement or the Eurodollar Loans made by such Lender, and the result of any of
the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise) by an amount deemed by such Lender to be material, then the Borrower
will pay to such Lender in accordance with paragraph (c) below such additional
amount or amounts as will compensate such Lender for such additional costs
incurred or reduction suffered.
(b) If any Lender 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
25
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 Lender (or any lending office of
such Lender) or any Lender'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 Lender's capital or on the capital of such
Lender's holding company, if any, as a consequence of this Agreement, the Loans
made by such Lender pursuant hereto, such Lender's Commitment hereunder or the
issuance of, or participation in, any Letter of Credit by such Lender to a level
below that which such Lender or such Lender's holding company could have
achieved but for such adoption, change or compliance (taking into account
Lender's policies and the policies of such Lender's holding company with respect
to capital adequacy) by an amount deemed by such Lender to be material (except
to the extent that such amount is reflected in the Adjusted LIBOR Rate), then
from time to time the Borrower shall pay to such Lender such additional amount
or amounts as will compensate such Lender or such Lender's holding company for
any such reduction suffered.
(c) A certificate of each Lender setting forth such amount or
amounts as shall be necessary to compensate such Lender or its holding company
as specified in paragraph (a) or (b) above, as the case may be, shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay each Lender the amount shown as due on any such certificate
delivered to it within 10 days after its receipt of the same. Any Lender
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.
(d) Failure on the part of any Lender to demand compensation
for any increased costs or reduction in amounts received or receivable or
reduction in return on capital with respect to any period shall not constitute a
waiver of such Lender's right to demand compensation with respect to such period
or any other period, provided that the Borrower shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than 270 days prior to the date that such Lender
notifies the Borrower of the circumstance giving rise to such increased costs or
reductions and of such Lender's intention to claim compensation therefor. The
protection of this Section shall be available to each Lender regardless of any
possible contention of the invalidity or inapplicability of the law, rule,
regulation, guideline or other change or condition which shall have occurred or
been imposed.
SECTION 2.16 Change in Legality.
(a) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, if (x) any change after the date of this Agreement
in any law or regulation or in the interpretation thereof by any Governmental
Authority charged with the administration thereof shall make it unlawful for a
Lender to make or maintain a Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to a Eurodollar Loan or (y) at
any time any Lender determines that the making or continuance of any of its
Eurodollar Loans has become impracticable as a result of a contingency occurring
after the date hereof which adversely affects the London interbank market or the
position of such Lender in such market, then, by written notice to the Borrower,
26
such Lender may (i) declare that Eurodollar Loans will not thereafter be made by
such Lender hereunder, whereupon any request by the Borrower for a Eurodollar
Borrowing shall, as to such Lender only, be deemed a request for an ABR Loan
unless such declaration shall be subsequently withdrawn; and (ii) require that
all outstanding Eurodollar Loans made by it be converted to ABR Loans, in which
event all such Eurodollar Loans shall be automatically converted to ABR Loans as
of the effective date of such notice as provided in paragraph (b) below. In the
event any Lender shall exercise its rights under clause (i) or (ii) of this
paragraph (a), all payments and prepayments of principal which would otherwise
have been applied to repay the Eurodollar Loans that would have been made by
such Lender or the converted Eurodollar Loans of such Lender shall instead be
applied to repay the ABR Loans made by such Lender in lieu of, or resulting from
the conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.16, a notice to the
Borrower by any Lender pursuant to paragraph (a) above shall be effective, if
lawful, and if any Eurodollar Loans shall then be outstanding, on the last day
of the then-current Interest Period, otherwise, such notice shall be effective
on the date of receipt by the Borrower.
SECTION 2.17 Pro Rata Treatment, etc. All payments and repayments of
principal and interest in respect of the Loans (except as provided in Sections
2.15 and 2.16) shall be made pro rata among the Lenders in accordance with the
then outstanding principal amount of the Loans and/or participations in Letter
of Credit Outstandings hereunder and all payments of Commitment Fees and Letter
of Credit Fees (other than those payable to a Fronting Lender) shall be made pro
rata among the Lenders 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, Charlotte, North Carolina 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 or converted to a Loan of a different Type.
SECTION 2.18 Taxes. (a) Any and all payments by or on account of any
obligation of the Borrower hereunder shall be made free and clear of, and
without deduction for, any Indemnified Taxes or Other Taxes; provided that if
the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes
from such payments, then (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Agent, Lender or Fronting Lender
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions
and (iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower will indemnify the Agent, each Lender and the
Fronting Lender, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Agent, such Lender or
the Fronting Lender, as the case may be, on or with respect to any payment by or
on account of any obligation of the Borrower hereunder (including Indemnified
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Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender or the Fronting Lender, or by
the Agent on its own behalf or on behalf of a Lender or the Fronting Lender,
shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Agent the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Agent.
(e) Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement or any other Loan Document shall
deliver to the Borrower (with a copy to the Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Borrower as will
permit such payments to be made without withholding or at a reduced rate.
SECTION 2.19 Certain Fees. The Borrower shall pay to the Agent, for the
respective accounts of the Agent and the Lenders, the fees set forth in that
certain fee letter dated March 7, 2002 between the Agent and the Borrower at the
times set forth therein.
SECTION 2.20 Commitment Fee. The Borrower shall pay to the Lenders a
commitment fee (the "Commitment Fee") for the period commencing on the Closing
Date 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-half of one percent (1/2%) per annum on the
average daily Unused Total Commitment. Such Commitment Fee, to the extent then
accrued, 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 2.10
hereof, upon any reduction or termination in whole or in part of the Total
Commitment.
SECTION 2.21 Letter of Credit Fees. The Borrower shall pay with respect
to each Letter of Credit (i) to the Agent on behalf of the Lenders a fee
calculated (on the basis of the actual number of days elapsed over a year of 360
days) at the rate of (x) three and one-half percent (3.50%) per annum on the
daily average Letter of Credit Outstandings and (ii) to the Fronting Lender such
Fronting Lender's customary fees for issuance, amendments and processing
referred to in Section 2.03. In addition, the Borrower agrees to pay each
Fronting Lender for its account a fronting fee of one quarter of one percent
(1/4%) per annum in respect of each Letter of Credit issued by such Fronting
Lender, 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
Lender, 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
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the Termination Date. 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 Lender, the Borrower and the Agent.
SECTION 2.22 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 Lenders, as provided herein and in the fee letter described in
Section 2.19. Once paid, none of the Fees shall be refundable under any
circumstances.
SECTION 2.23 Priority and Liens.
(a) The Borrower and each of the Guarantors hereby covenants,
represents and warrants that, upon entry of the Interim Order (and the Final
Order, as applicable), the Obligations of the Borrower and the Guarantors
hereunder and under the Loan Documents and in respect of Indebtedness permitted
by Section 6.03(v): (i) pursuant to Section 364(c)(1) of the Bankruptcy Code,
shall at all times constitute allowed administrative expense claims in the Cases
having priority over all administrative expenses of the kind specified in
Sections 503(b) or 507(b) of the Bankruptcy Code; (ii) pursuant to Section
364(c)(2) of the Bankruptcy Code, shall at all times be secured by a perfected
first priority Lien on all property of the Borrower and the Guarantors and the
proceeds thereof (excluding the Factored Receivables but including any equity of
the Borrower or the Guarantors in any proceeds of the Factored Receivables and,
after satisfaction of the obligations owed to CIT, any property relating to the
Factored Receivables and any other amounts due or to become due to the Borrower
or the Guarantors in respect of the Factored Receivables) that is not subject to
valid, perfected and non-avoidable Liens on the Filing Date, including, without
limitation, all accounts receivable and inventory of the Borrower and Guarantors
(excluding the Borrower's and the Guarantors' rights in respect of avoidance
actions under the Bankruptcy Code) and on all cash maintained in the Letter of
Credit Account and any direct investments of the funds contained therein; (iii)
pursuant to Section 364(c)(3) of the Bankruptcy Code, shall be secured by a
perfected Lien upon (A) all property of the Borrower and the Guarantors (other
than the property that is subject to existing Liens that presently secure the
obligations of the Borrower and the Guarantors under the Existing Agreements, as
to which the Lien in favor of the Agent and the Lenders will be as described in
clause (iv) of this sentence) that is subject to valid, perfected and
non-avoidable Liens in existence on the Filing Date or to valid Liens in
existence on the Filing Date that are perfected subsequent to the Filing Date as
permitted by Section 546(b) of the Bankruptcy Code or to Permitted Liens, junior
to such valid, perfected and non-avoidable Liens and (B) to the extent the
Borrower or the Guarantors retain any interest therein (reversionary or
otherwise), the Factored Receivables and any proceeds of the Factored
Receivables, any property relating to the Factored Receivables and any other
amounts due or to become due to the Borrower or the Guarantors in respect of the
Factored Receivables; and (iv) pursuant to Section 364(d)(1) of the Bankruptcy
Code, shall be secured by a perfected first priority, senior priming Lien on all
of the tangible and intangible property of the Borrower and the Guarantors
(including without limitation, goods, accounts, electronic chattel paper,
chattel papers, contract rights, documents, deposit accounts, equipment,
fixtures, general intangibles, inventory, instruments, investment property,
insurance proceeds, letters of credit rights, supporting obligations, patents,
copyrights, trademarks, tradenames and all other intellectual property, and the
capital stock of all direct subsidiaries of the Borrower and each Guarantor and
the proceeds thereof) that is subject to existing Liens that presently secure
29
the Borrower's and the Guarantors' pre-petition Indebtedness under the Existing
Agreements (but subject to any Liens in existence on the Filing Date to which
the Liens being primed hereby are subject or become subject subsequent to the
Filing Date as permitted by Section 546(b) of the Bankruptcy Code) and any Liens
granted after the Filing Date to provide adequate protection in respect of the
Existing Agreements, senior to all of such Liens; provided, however, the
Borrower shall not be required to pledge to the Agent in excess of 65% of the
capital stock of its foreign Subsidiaries; subject only to (x) in the event of
the occurrence and during the continuance of an Event of Default or an event
that would constitute an Event of Default with the giving of notice or lapse of
time or both, the payment of allowed and unpaid professional fees and
disbursements incurred by the Borrower, the Guarantors and any statutory
committees appointed in the Cases in an aggregate amount not in excess of
$1,000,000 (plus all unpaid professional fees and disbursements incurred prior
to the occurrence of an Event of Default or an event that would constitute an
Event of Default with the giving of notice or lapse of time or both to the
extent allowed by the Bankruptcy Court at any time) and (y) the payment of
unpaid fees pursuant to 28 U.S.C. ss. 1930 and to the Clerk of the Bankruptcy
Court (collectively, the "Carve-Out"), provided that following the Termination
Date amounts in the Letter of Credit Account shall not be subject to the
Carve-Out, and provided further that, except as otherwise provided in the
Orders, no portion of the Carve-Out shall be utilized for the payment of
professional fees and disbursements incurred in connection with any challenge to
the amount, extent, priority, validity, perfection or enforcement of the
indebtedness of the Borrower and the Guarantors owing to the Existing Lenders or
to the collateral securing such indebtedness. The Lenders agree that so long as
no Event of Default or event which with the giving of notice or lapse of time or
both would constitute an Event of Default shall have occurred, the Borrower and
the Guarantors shall be permitted to pay compensation and reimbursement of
expenses allowed and payable under 11 U.S.C. xx.xx. 328, 330 and 331, as the
same may be due and payable, and the same shall not reduce the Carve-Out.
(b) Subject to the priorities set forth in subsection (a)
above and to the Carve-Out, as to all real property the title to which is held
by the Borrower or any of the Guarantors, or the possession of which is held by
the Borrower or any of the Guarantors pursuant to leasehold interest and which
secures the obligations under the Existing Agreements, the Borrower and each
Guarantor hereby assigns and conveys as security, grants a security interest in,
hypothecates, mortgages, pledges and sets over unto the Agent on behalf of the
Lenders all of the right, title and interest of the Borrower and such Guarantor
in all of such owned real property and in all such leasehold interests, together
in each case with all of the right, title and interest of the Borrower and such
Guarantor in and to all buildings, improvements, and fixtures related thereto,
any lease or sublease thereof, all general intangibles relating thereto and all
proceeds thereof. The Borrower and each Guarantor acknowledges that, pursuant to
the Orders, the Liens in favor of the Agent on behalf of the Lenders in all of
such real property and leasehold instruments shall be perfected without the
recordation of any instruments of mortgage or assignment. The Borrower and each
Guarantor further agree that, upon the request of the Agent, the Borrower and
such Guarantor shall enter into separate fee and leasehold mortgages in
recordable form with respect to such properties on terms reasonably satisfactory
to the Agent.
SECTION 2.24 Right of Set-Off. Subject to the provisions of Section
7.01, upon the occurrence and during the continuance of any Event of Default,
the Agent and each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law and without further order of or
30
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 Lender 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 Lender shall have made
any demand under any Loan Document and although such obligations may not have
been accelerated. Each Lender and the Agent agrees promptly to notify the
Borrower and Guarantors after any such set-off and application made by such
Lender 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 Lender and the Agent under this Section are in addition to other
rights and remedies which such Lender and the Agent may have upon the occurrence
and during the continuance of any Event of Default.
SECTION 2.25 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 Lenders, and hereby grant to the Agent, for its benefit and for the ratable
benefit of the Lenders, 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 and shall be released to the Borrower as described
in clause (ii)(y) of Section 2.03(b).
SECTION 2.26 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 Lenders shall be entitled to immediate payment
of such Obligations without further application to or order of the Bankruptcy
Court.
SECTION 2.27 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 Reorganization Plan (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 Lenders pursuant to the Orders and described in Section
2.23 and the Liens granted to the Agent pursuant to the Orders and described in
Sections 2.23 and 2.25 shall not be affected in any manner by the entry of an
order confirming a Reorganization Plan.
SECTION 2.28 Use of Cash Collateral. Notwithstanding anything to the
contrary contained herein, the Borrower shall not be permitted (i) to request a
Borrowing under Section 2.06 or request the issuance of a Letter of Credit under
Section 2.04 unless the Bankruptcy Court shall have entered the Interim Order or
(ii) to request a Borrowing under Section 2.06 unless the Borrower and the
Guarantors shall at that time have the use of all cash collateral subject to the
Orders for the purposes described in Section 3.09.
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SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders 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 duly organized and validly existing under the laws of the
State of its organization and is duly qualified to do business and is in good
standing in each jurisdiction in which the failure to so qualify would have a
material adverse effect on the financial condition, operations, business,
properties, assets or prospects of the Borrower and the Guarantors taken as a
whole; (ii) subject to the entry by the Bankruptcy Court of the Interim Order
(or the Final Order, when applicable) has the requisite corporate, partnership
or company, as the case may be, 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, partnership or
company, as the case may be, 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,
partnership or company, as the case may be, powers of each of the Borrower and
the Guarantors, have been duly authorized by all necessary corporate,
partnership or company, as the case may be, action including the consent of
shareholders, partners or members where required, and do not (A) contravene the
constituent documents 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 Authority, (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 material lease, agreement or other
instrument entered into after the Filing Date binding on the Borrower or the
Guarantors or any of their properties, 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 (ii) 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), this Agreement
has been duly executed and delivered by each of the Borrower and the Guarantors.
Upon entry by the Bankruptcy Court of the Interim Order (or the Final Order,
when applicable), this 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
32
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; and, to the extent that any such information constitutes
projections, such projections were prepared in good faith on the basis of
assumptions, methods, data, tests and information believed by the Borrower or
such Guarantor to be reasonable at the time such projections were furnished.
SECTION 3.04 Financial Statements. The Borrower has furnished the
Lenders with copies of the audited consolidated financial statements and
schedules of the Borrower and the Guarantors for the fiscal year ended September
30, 2001. Such financial statements present fairly the financial condition and
results of operations of the Borrower and the Guarantors on a consolidated basis
as of such date and for such period; such balance sheets and the notes thereto
disclose all liabilities, direct or contingent, of the Borrower and the
Guarantors as of the date thereof required to be disclosed by GAAP and such
financial statements were prepared in a manner consistent with GAAP. No material
adverse change in the operations, business, properties, assets, prospects or
condition (financial or otherwise) of the Borrower and the Guarantors, taken as
a whole, has occurred from that set forth in the Borrower's consolidated
financial statements for the fiscal year ended September 30, 2001 other than
those which customarily occur as a result of events leading up to and following
the commencement of a proceeding under Chapter 11 of the Bankruptcy Code and the
commencement of the Cases (including, without limitation, those reflected in the
financial projections heretofore made available to the Agent).
SECTION 3.05 Ownership. Other than as set forth on Schedule 3.05, (i)
each of the Persons listed on Schedule 3.05 is a wholly-owned, direct or
indirect Subsidiary of the Borrower, and (ii) 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 the Guarantors other than: (i) Liens granted
pursuant to the Existing Agreements; (ii) Permitted Liens; (iii) other Liens
permitted pursuant to Section 6.01; and (iv) Liens in favor of the Agent and the
Lenders. Neither the Borrower nor the Guarantors are parties to any contract,
agreement, lease or instrument the performance of which, either unconditionally
or upon the happening of an event, will result in or require the creation of a
Lien on any assets of the Borrower or any Guarantor or otherwise result in a
violation of this Agreement other than the Liens granted to the Agent and the
Lenders as provided for in this Agreement or Liens permitted by this Agreement.
SECTION 3.07 Compliance with Law.
(a) (i) The operations of the Borrower and the Guarantors
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) except as set forth on Schedule 3.07, to the Borrower's and
each of the Guarantor's knowledge, none of the operations of the Borrower or the
Guarantors is the subject of any Federal or state investigation evaluating
whether any remedial action involving a material expenditure by the Borrower or
33
any Guarantor is needed to respond to a release of any Hazardous Waste or
Hazardous Substance (as such terms are defined in any applicable state or
Federal environmental law or regulations) into the environment; and (iii) to the
Borrower's and each of the Guarantor's knowledge, the Borrower and the
Guarantors 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 any Guarantor 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 on the financial condition, operations, business,
properties, assets or prospects of the Borrower and the Guarantors taken as a
whole.
SECTION 3.08 Insurance. All policies of insurance of any kind or nature
owned by or issued to the Borrower and the Guarantors, including, without
limitation, 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, are in
full force and effect and are of a nature and provide such coverage as is
customarily carried by companies of the size and character of the Borrower and
the Guarantors.
SECTION 3.09 Use of Proceeds. The proceeds of the Loans shall be used,
subject to the Budget, for working capital and for other general corporate
purposes of the Borrower and the Guarantors.
SECTION 3.10 Litigation. There are no unstayed actions, suits or
proceedings pending or, to the knowledge of the Borrower or 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 financial condition, business, properties,
prospects, operations or assets of the Borrower and the Guarantors, taken as a
whole.
SECTION 4. CONDITIONS OF LENDING
SECTION 4.01 Conditions Precedent to Initial Loans and Initial Letters
of Credit. The obligation of the Lenders to make the initial Loans or the
Fronting Lender to issue the initial Letter of Credit, whichever may occur
first, is subject to the following conditions precedent:
(a) Supporting Documents. The Agent shall have received for
each of the Borrower and the Guarantors:
(i) a copy of such entity's organizational documents,
as amended, certified as of a recent date by the Secretary of
State of the state of its organization;
(ii) a certificate of such Secretary of State, dated
as of a recent date, as to the good standing of and payment of
taxes by that entity and as to the organizational documents on
file in the office of such Secretary of State; and
34
(iii) a certificate of the Secretary or an Assistant
Secretary of that entity dated the date of the initial Loans
or the initial Letter of Credit hereunder, whichever first
occurs, and certifying (A) that attached thereto is a true and
complete copy of the by-laws, partnership agreement or
operating agreement, as applicable, of that entity as in
effect on the date of such certification, (B) that attached
thereto is a true and complete copy of resolutions or other
authorizing documents adopted by the appropriate person or
persons of that entity authorizing the Borrowings and Letter
of Credit extensions hereunder, the execution, delivery and
performance in accordance with their respective terms of this
Agreement, the Loan Documents and any other documents required
or contemplated hereunder or thereunder and the granting of
the security interest in the Letter of Credit Account and
other Liens contemplated hereby, (C) that the organizational
documents of that entity has not been amended since the date
of the last amendment thereto indicated on the certificate of
the Secretary of State furnished pursuant to clause (i) above
and (D) as to the incumbency and specimen signature of each
officer of that entity executing this Agreement and the Loan
Documents or any other document delivered by it in connection
herewith or therewith (such certificate to contain a
certification by another officer of that entity as to the
incumbency and signature of the officer signing the
certificate referred to in this clause (iii)).
(b) Interim Order. At the time of the making of the initial
Loans or at the time of the issuance of the initial Letters of Credit, whichever
first occurs, the Agent and the Lenders shall have received a certified copy of
an order of the Bankruptcy Court in substantially the form of Exhibit A-1 (the
"Interim Order") approving the Loan Documents and granting the Superpriority
Claim status and senior priming and other Liens described in Section 2.23 which
Interim Order (i) shall have been entered, with the consent or non-objection of
a preponderance (as determined by the Agent) of the Existing Lenders upon an
application or motion of the Borrower reasonably satisfactory in form and
substance to the Agent, on such prior notice to such parties (including the
Existing Lenders) as may in each case be reasonably satisfactory to the Agent,
(ii) shall authorize extensions of credit in amounts satisfactory to the Agent,
(iii) shall approve the payment by the Borrower of all of the Fees set forth in
Section 2.19, (iv) shall be in full force and effect, (v) shall have authorized
the use by the Borrower and the Guarantors of any cash collateral in which any
Existing Lender under the Existing Agreements may have an interest and shall
have provided, as adequate protection for the use of such cash collateral and
the priming contemplated hereby, for (A) a superpriority claim as contemplated
by Section 507(b) of the Bankruptcy Code immediately junior to the claims under
Section 364(c)(1) of the Bankruptcy Code held by the Agent and the Lenders
(without the requirement to file any motion or pleading or to make any demand),
(B) a Lien on substantially all of the assets of the Borrower and the Guarantors
having a priority immediately junior to the priming and other Liens granted in
favor of the Agent and the Lenders hereunder and under the other Loan Documents,
(C) the payment on a current basis of the reasonable fees and disbursements of
respective professionals (including, but not limited to, the reasonable fees and
disbursements of counsel and internal and third-party consultants, including
financial consultants, and auditors) for the Pre-Petition Agent and of King &
Spalding, counsel to the note holders under the Senior Note Agreements
(including the payment on the Closing Date or as soon thereafter as is
practicable of any unpaid pre-petition fees and expenses) and the continuation
of the payment to the Pre-Petition Agent on a current basis of the
administration fees that are provided for under the Existing Agreements, (D) the
receipt of all financial statements and other reports, pleadings, motions,
35
applications, judicial information and other documents filed with the Bankruptcy
Court that are furnished to the Lenders, (E) following the payment in full of
all Loans, the cash collateralization of all Letters of Credit and the
termination of the Total Commitment, 100% of the Net Proceeds from the sale or
other disposition of any of the assets or properties of the Borrower or the
Guarantors will be paid to the Existing Lenders and (F) such other protection as
agreed between the Borrower, the Guarantors and the Existing Lenders, and (vi)
shall not have been vacated, stayed, reversed, modified or amended in any
respect; and, if the Interim Order is the subject of a pending appeal in any
respect, neither the making of such Loans nor the issuance of such Letter of
Credit nor the performance by the Borrower or any of the Guarantors of any of
their respective obligations hereunder or under the Loan Documents or under any
other instrument or agreement referred to herein shall be the subject of a
presently effective stay pending appeal.
(c) 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").
(d) First Day Orders. All of the "first day orders" entered by
the Bankruptcy Court at the time of the commencement of the Cases shall be
reasonably satisfactory in form and substance to the Agent.
(e) Opinion of Counsel. The Agent and the Lenders shall have
received the favorable written opinion[s] of counsel to the Borrower and the
Guarantors reasonably acceptable to the Agent, dated the date of the initial
Loans or the issuance of the initial Letter of Credit, whichever first occurs,
substantially in the form[s] of Exhibit C.
(f) Payment of Fees. The Borrower shall have paid to the Agent
the then unpaid balance of all accrued and unpaid Fees due under and pursuant to
this Agreement and the letter referred to in Section 2.19.
(g) 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 Lenders
contemplated by this Agreement shall be reasonably 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, such documents and papers where appropriate to be certified by proper
corporate, governmental or judicial authorities.
(h) Information. The Agent shall have received such
information (financial or otherwise) as may be reasonably requested by the Agent
and shall have discussed the Borrower's business plan heretofore delivered to
the Agent with the Borrower's management and shall be satisfied with the nature
and substance of such discussions.
(i) 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
36
by the Agent, and the Agent shall be reasonably satisfied that (x) the Borrower
and the Guarantors are in compliance in all material respects with all
applicable environmental laws and regulations and (y) the Borrower has made
adequate provision for the costs of maintaining such compliance.
(j) UCC Searches. The Agent shall be satisfied with UCC search
results (including tax liens and judgments) received by the Borrower and the
Guarantors and conducted in the jurisdictions in which the Borrower and the
Guarantors conduct business (dated as of a date reasonably satisfactory to the
Agent), reflecting the absence of Liens and encumbrances on the assets of the
Borrower and the Guarantors other than liens granted under the Borrower's and
Guarantors' existing receivables factoring agreements with The CIT
Group/Commercial Services, Inc., the Existing Agreements and such Liens as may
be satisfactory to the Agent.
(k) Closing Documents. The Agent shall have received all
documents required by Section 4.01 reasonably satisfactory in form and substance
to the Agent.
(l) Budget. The Agent shall have received a budget
satisfactory in form and substance to the Agent (with such changes therein as
may be approved by the Agent, the "Budget").
SECTION 4.02 Conditions Precedent to Each Loan and Each Letter of
Credit. The obligation of the Lenders to make each Loan and of the Fronting
Lender to issue each Letter of Credit, including the initial Loan and the
initial Letter of Credit, 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 Interim Order 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 and the Required Lenders,
provided, that at the time of the making of any Loan or the issuance of any
Letter of Credit the aggregate amount of either of which, when added to the sum
of the principal amount of all Loans then outstanding and the Letter of Credit
Outstandings, would exceed the amount authorized by the Interim Order
(collectively, the "Additional Credit"), the Agent and each of the Lenders shall
have received a certified copy of an order of the Bankruptcy Court in
substantially the form of Exhibit A-2 (the "Final Order") which, in any event,
shall have been entered by the Bankruptcy Court no later than forty-five (45)
days after the entry of the Interim Order and at the time of the extension of
37
any Additional Credit the Final Order shall be in full force and effect, and
shall not have been vacated, stayed, reversed, modified or amended in any
respect without the prior written consent of the Agent, and the Required
Lenders; and if either the Interim Order or the Final Order is the subject of a
pending appeal in any respect, neither the making of the Loans nor the issuance
of any Letter of Credit nor the performance by the Borrower or any Guarantor of
any of their respective obligations under any of the Loan Documents shall be the
subject of a presently effective stay pending appeal.
(e) Payment of Fees. The Borrower shall have paid to the Agent
and the Pre-Petition Agent the then unpaid balance of all accrued and unpaid
Fees then payable under and pursuant to this Agreement, the Orders and the
letter referred to in Section 2.19.
(f) Borrowing Base Certificate. From and after the execution
and delivery of the Borrowing Base Amendment, the Agent shall have received the
timely delivery of the most recent Borrowing Base Certificate (dated no more
than seven (7) days prior to the making of a Loan or the issuance of a Letter of
Credit, substantially in the form of Exhibit E, except that the initial
Borrowing Base Certificate shall be delivered by the Closing Date) required to
be delivered hereunder.
(g) Budget. Such extension of credit shall be consistent with
the Budget furnished to the Agent prior to the initial extension of Credit.
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 2.03(b)), or any Obligation shall remain outstanding or
unpaid under this Agreement or the other Loan Documents, the Borrower and each
of the Guarantors agree that, unless the Required Lenders 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 Lenders:
(a) within 90 days after the end of each fiscal year, the
Borrower's consolidated balance sheet and related statement of income and cash
flows, showing the financial condition of the Borrower and the Guarantors 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 the Guarantors by Xxxxxx Xxxxxxxx
LLP or other independent public accountants of recognized national standing 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 financial statements fairly present the financial
38
condition and results of operations of the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP;
(b) within 45 days after the end of each of the first three
fiscal quarters, the Borrower's consolidated balance sheets and related
statements of income and cash flows, showing the financial condition of the
Borrower and the Guarantors 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 the Guarantors on a consolidated basis in accordance with
GAAP, subject to normal year-end audit adjustments;
(c) (i) concurrently with any delivery of financial statements
under (a) and (b) above, 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 Sections 6.03, 6.04,
6.05 and 6.10 and (ii) concurrently with any delivery of financial statements
under (a) above, a certificate (which certificate may be limited to accounting
matters and disclaim responsibility for legal interpretations) of the
accountants auditing the consolidated financial statements delivered under (a)
above certifying that, in the course of the regular audit of the business of the
Borrower and the Guarantors, such accountants have obtained no knowledge that an
Event of Default has occurred and is continuing, or if, in the opinion of such
accountants, an Event of Default has occurred and is continuing, specifying the
nature thereof and all relevant facts with respect thereto;
(d) as soon as available, but no more than 30 days after the
end of each month, the unaudited monthly cash flow reports of the Borrower and
the Guarantors on a consolidated basis and as of the close of such fiscal month
and the results of their operations during such month and the then elapsed
portion of the fiscal quarter;
(e) concurrently with any delivery of financial statements
under (b) above, monthly financial projections for the following six fiscal
month period;
(f) as soon as possible, and in any event within 45 days of
the Closing Date, a consolidated pro forma balance sheet of the Borrower's and
the Guarantors' financial condition as of the Filing Date;
(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;
(h) as soon as available and in any event (A) within 30 days
after the Borrower or any of its ERISA Affiliates knows or has reason to know
that any Termination Event described in clause (i) of the definition of
Termination Event with respect to any Single Employer Plan of the Borrower or
such ERISA Affiliate has occurred and (B) within 10 days after the Borrower or
39
any of its ERISA Affiliates knows or has reason to know that any other
Termination Event with respect to any such Plan has occurred, a statement of a
Financial Officer of the Borrower describing the full details of such
Termination Event and the action, if any, which the Borrower or such ERISA
Affiliate is required or proposes to take with respect thereto, together with
any notices required or proposed to be given to or filed with or by the
Borrower, the ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto;
(i) promptly and in any event within 10 days after receipt
thereof by the Borrower or any of its ERISA Affiliates from the PBGC copies of
each notice received by the Borrower or any such ERISA Affiliate of the PBGC's
intention to terminate any Single Employer Plan of the Borrower or such ERISA
Affiliate or to have a trustee appointed to administer any such Plan;
(j) if requested by the Agent, promptly and in any event
within 30 days after the filing thereof with the Internal Revenue Service,
copies of each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) with respect to each Single Employer Plan of the Borrower or any of
its ERISA Affiliates;
(k) within 10 days after notice is given or required to be
given to the PBGC under Section 302(f)(4)(A) of ERISA of the failure of the
Borrower or any of its ERISA Affiliates to make timely payments to a Plan, a
copy of any such notice filed and a statement of a Financial Officer of the
Borrower setting forth (A) sufficient information necessary to determine the
amount of the lien under Section 302(f)(3), (B) the reason for the failure to
make the required payments and (C) the action, if any, which the Borrower or any
of its ERISA Affiliates proposed to take with respect thereto;
(l) promptly and in any event within 10 days after receipt
thereof by the Borrower or any ERISA Affiliate from a Multiemployer Plan
sponsor, a copy of each notice received by the Borrower or any ERISA Affiliate
concerning (A) the imposition of Withdrawal Liability by a Multiemployer Plan,
(B) the determination that a Multiemployer Plan is, or is expected to be, in
reorganization within the meaning of Title IV of ERISA, (C) the termination of a
Multiemployer Plan within the meaning of Title IV of ERISA, or (D) the amount of
liability incurred, or which may be incurred, by the Borrower or any ERISA
Affiliate in connection with any event described in clause (A), (B) or (C)
above;
(m) promptly, from time to time, such other information
regarding the operations, business affairs and financial performance or
condition of the Borrower or any Guarantor, or compliance with the terms of any
material loan or financing agreements as the Agent, at the request of any
Lender, may reasonably request;
(n) 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, or
distributed by or on behalf of the Borrower or any of the Guarantors to any
official committee appointed in the Cases;
40
(o) by no later than 30 days after the opening of any
additional accounts with banks other than First Union or Wachovia Bank, N.A.,
enter into blocked account arrangements with such third party banks each in form
and substance satisfactory to the Agent;
(p) upon the request of the Agent (i) enter into a lockbox
agreement in form and substance satisfactory to the Agent, pursuant to which a
lockbox account is set up and all proceeds of the Borrower and the Guarantors
from accounts receivable shall be deposited in to such account and the Borrower
and the Guarantors shall not be permitted to withdraw any funds held therein,
(ii) arrange for each of the Borrower's and the Guarantors' account debtors to
be notified that all payments made in respect of such account debtor's account
shall be directed to the lockbox account and (iii) enter into such amendments to
the Agreement as the Agent may reasonably request with respect to such lockbox
agreements and incorporating a cash sweep; and
(q) By the earlier of (i) 20 days after the Filing Date and
(ii) two days prior to the entry of the Final Order, deliver to the Agent and
the Lenders the Borrower's business plan for its Fiscal Years ending on or about
September 30, 2002 and September 30, 2003, and such business plan shall be
satisfactory in form and substance to the Agent and the Lenders.
SECTION 5.02 Corporate Existence. Preserve and maintain in full force
and effect all governmental rights, privileges, qualifications, permits,
licenses and franchises necessary or desirable 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 on the
operations, business, properties, assets, prospects or condition (financial or
otherwise) of the Borrower and the Guarantors, taken as a whole, and (ii) as
otherwise permitted in connection with sales of assets permitted by Section
6.11.
SECTION 5.03 Insurance. (a) Keep its insurable properties insured at
all times, against such risks, including fire and other risks insured against by
extended coverage, as is customary with companies of the same or similar size in
the same or similar businesses; and maintain in full force and effect public
liability insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by the Borrower or any Guarantor, as the case may
be, in such amounts (giving effect to self-insurance) and with such deductibles
as are customary with companies of the same or similar size in the same or
similar businesses and in the same geographic area; and (b) maintain such other
insurance or self insurance as may be required by law.
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
41
paid and discharged any such obligation, 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, etc. Promptly 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 Access to Books and Records. Maintain or cause to be
maintained at all times true and complete books and records in accordance with
GAAP of the financial operations of the Borrower and the Guarantors; and provide
the Agent and its representatives access to all such books and records during
regular business hours, in order that the Agent may upon reasonable prior notice
examine and make abstracts from such books, accounts, records and other papers
for the purpose of verifying the accuracy of the various reports delivered by
the Borrower or the Guarantors to the Agent or the Lenders pursuant to this
Agreement or for otherwise ascertaining compliance with this Agreement; and at
any reasonable time and from time to time during regular business hours, upon
reasonable notice, permit the Agent and any agents or representatives
(including, without limitation, appraisers) thereof to visit the properties of
the Borrower and the Guarantors and to conduct examinations of and to monitor
the Collateral held by the Agent.
SECTION 5.07 Maintenance of Concentration Account. Continue to maintain
with the Agent an account or accounts to be used by the Borrower and the
Guarantors as their principal concentration account for day-to-day operations
conducted by the Borrower and the Guarantors.
SECTION 5.08 Borrowing Base Certificate. Following the execution and
delivery of the Borrowing Base Amendment, furnish to the Agent as soon as
available and in any event (i) within a number of days after the end of each
week that is agreed upon by the Borrower and the Agent and set forth in the
Borrowing Base Amendment, a weekly Borrowing Base Certificate as of the last day
of the immediately preceding week, (ii) if requested by the Agent at any other
time when the Agent reasonably believes that the then existing Borrowing Base
Certificate is materially inaccurate, as soon as reasonably available but in no
event later than five (5) Business Days after such request, a Borrowing Base
Certificate showing the Borrowing Base as of the date so requested, in each case
with supporting documentation, and (iii) such other supporting documentation and
additional reports with respect to the Borrowing Base as the Agent shall
reasonably request.
SECTION 5.09 Collateral Monitoring and Review. At any time upon the
request of the Agent or the Required Lenders through the Agent, permit the Agent
or professionals (including, without limitation, internal and third party
consultants, accountants and appraisers) retained by the Agent or its
professionals to conduct evaluations and appraisals of (i) the Borrower's
practices in the computation of the Borrowing Base and (ii) the assets included
in the Borrowing Base, and pay the reasonable fees and expenses in connection
therewith (including, without limitation, the reasonable and customary fees and
expenses associated with the Agent's Collateral Agent Services Group). In
connection with any collateral monitoring or review and appraisal relating to
42
the computation of the Borrowing Base, the Borrower shall make such adjustments
to the Borrowing Base as the Agent shall reasonably require based upon the terms
of this Agreement and results of such collateral monitoring, review or
appraisal.
SECTION 5.10 Business Plan. Make its senior officers available to
discuss the Borrower's business plan (a copy of which will be delivered to the
Agent and the Lenders in accordance with Section 5.01(q) hereof), with the Agent
and/or the Lenders upon the Agent's request.
SECTION 5.11 Detailed Budget. By no later than 5 Business Days after
the entry of the Interim Order, deliver to the Agent a revised, detailed Budget
in form and substance satisfactory to the Agent, which Budget shall include a
detailed balance sheet, and related statement of income and cash flows.
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 2.03(b)) or any Obligation shall remain outstanding or
unpaid under this Agreement or the other Loan Documents, unless the Required
Lenders shall otherwise consent in writing, the 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 Liens
granted pursuant to the Existing Agreements; (ii) 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 Lenders,
provided that the Interim Order and the Final Order provide that the holder of
such junior Liens shall not be permitted to take any action to foreclose with
respect to such junior Liens so long as any amounts shall remain outstanding
hereunder or any Commitment shall be in effect; (iii) Permitted Liens; (iv)
Liens in favor of CIT on, and in connection with, the Factored Receivables; and
(v) Liens in favor of the Agent and the Lenders.
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 the Loan Documents;
(ii) Indebtedness incurred prior to the Filing Date (including existing
Capitalized Leases); (iii) intercompany Indebtedness between the Borrower and
the Guarantors, (iv) Indebtedness arising from Investments among the Borrower
and the Guarantors that are permitted by Section 6.10; (v) Indebtedness owed to
First Union or any other Lender or any of its Lending 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, and (vi) Indebtedness owed to CIT in connection with the
factoring of the Factored Receivables.
43
SECTION 6.04 Capital Expenditures. Make cumulative Capital Expenditures
in an aggregate amount of $850,000 for the period commencing on the Filing Date
through June 30, 2002 and during the period from the Filing Date through the
Maturity Date in an aggregate amount in excess of $2,000,000 provided that
Capital Expenditures shall be no more than $1,000,000 in any calendar quarter.
SECTION 6.05 EBITDA. Permit EBITDA to be less than the specified
amounts for the specific periods to be set forth in an amendment to this
Agreement satisfactory to the Agent, which amendment shall be executed and
delivered prior to, or simultaneously with, the delivery of the business plan
pursuant to Section 5.01(q).
SECTION 6.06 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, in connection with the obligations, stock or dividends of any
Person, except (i) for any guaranty of Indebtedness or other obligations of the
Borrower or Guarantor if such Person 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 6.07 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 Lenders against the Borrower and the Guarantors
hereunder, except for the Carve-Out.
SECTION 6.08 Dividends; Capital Stock. Declare or pay, directly or
indirectly, any dividends or make any other distribution or payment, whether in
cash, property, securities or a combination thereof, with respect to (whether by
reduction of capital or otherwise) any shares of capital stock (or, except as
provided on Schedule 6.08, any options, warrants, rights or other equity
securities or agreements relating to any capital stock), or set apart any sum
for the aforesaid purposes, provided that any Guarantor may pay dividends to the
Borrower and to any other Guarantor that is its direct parent.
SECTION 6.09 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), except
as otherwise consented to by the Agent and the Lenders.
SECTION 6.10 Investments, Loans and Advances. Purchase, hold or acquire
any capital stock, evidences of indebtedness or other securities of, make or
permit to exist any loans or advances to, or make or permit to exist any
Investment in, any other Person (all of the foregoing, "Investments"), except
for (i) ownership by the Borrower of the capital stock of each of the
Subsidiaries listed on Schedule 3.05, (ii) Permitted Investments, (iii) advances
and loans among the Borrower and the Guarantors in the ordinary course of
business, (iv) existing Investments described on Schedule 6.10 hereto and (v)
advances to Guilford de Tamaulipas, S.A. de C.V., Giulford de Altamira, S.A. de
C.V. or Altamira Servicios de Infraestructura S.A. de C.V. only to the extent
44
specified in the Budget for the winddown of operations at the plant located in
Altamira, Mexico.
SECTION 6.11 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) dispositions of surplus, obsolete or damaged equipment no
longer used in production, (iii) sales of plants and other assets in connection
with discontinued operations, as may be agreed to by the Agent, and (iv)
transfers of the Factored Receivables.
SECTION 6.12 Nature of Business. Modify or alter in any material manner
the nature and type of its business as conducted at or prior to the Filing Date
or the manner in which such business is conducted (except as required by the
Bankruptcy Code), it being understood that asset sales permitted by Section 6.11
shall not constitute such a material modification or alteration.
SECTION 6.13 Budget. Make expenditures other than in accordance with
the Budget.
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
Lenders 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 (i) Fees or
interest on the Loans when due, and such default shall continue unremedied for
more than two (2) Business Days or (ii) principal of the Loans or 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
(c) default shall be made by the Borrower or any Guarantor in
the due observance or performance of any covenant, condition or agreement
contained in Section 6 hereof; or
(d) default shall be made by the Borrower or any Guarantor in
the due observance or performance of any other covenant, condition or agreement
to be observed or performed pursuant to the terms of this Agreement, any of the
Orders or any of the other Loan Documents and such default shall continue
unremedied for more than ten (10) days; or
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(e) any of the Cases shall be dismissed or converted to a case
under Chapter 7 of the Bankruptcy Code or the Borrower or any Guarantor shall
file a motion or other pleading seeking the dismissal of any of the Cases under
Section 1112 of the Bankruptcy Code or otherwise; 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) in any of the Cases which is
pari passu with or senior to the claims of the Agent and the Lenders against the
Borrower or any Guarantor hereunder, or there shall arise or be granted any such
pari passu or senior Super-Priority Claim; or
(f) 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 $500,000 in the aggregate; or
(g) the Borrower shall fail to deliver a certified Borrowing
Base Certificate when due and such default shall continue unremedied for more
than three (3) Business Days; or
(h) 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
(i) an order of the Bankruptcy Court shall be entered
reversing, staying for a period in excess of 10 days, vacating or (without the
written consent of the Agent) otherwise amending, supplementing or modifying any
of the Orders or terminating the use of cash collateral by the Borrower or the
Guarantors pursuant to the Orders; or
(j) any judgment or order as to a post-petition liability or
debt for the payment of money in excess of $500,000 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
(k) 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 (i) cause a material
adverse change in the financial condition, business, prospects, operations or
assets of the Borrower and the Guarantors taken as a whole on a consolidated
basis, (ii) have a material adverse effect on the ability of the Borrower or any
of the Guarantors to perform their respective obligations under any Loan
Document, or (iii) have a material adverse effect on the rights and remedies of
the Agent or any Lender under any Loan Document, 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
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(l) except as permitted by the Orders, the Borrower or the
Guarantors shall make any Pre-Petition Payment other than Pre-Petition Payments
authorized by the Bankruptcy Court (x) in accordance with other "first day"
orders reasonably satisfactory to the Agent, (y) in respect of accrued payroll
and related expenses and employee benefits as of the Filing Date and (z) as are
reasonably satisfactory to the Agent;
(m) 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 (if the claim in respect
thereof is either an administrative or secured claim); or
(n) (i) the Borrower or any ERISA Affiliate thereof shall have
been notified by the sponsor or trustee 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, in the opinion of the
Agent, 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; or
(o) 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 (if the claim in respect thereof is either an administrative or
secured claim); or
(p) 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; or
(q) it shall be determined (whether by the Bankruptcy Court or
by any other judicial or administrative forum) that the Borrower or any
Guarantor is liable for the payment of claims arising out of any failure to
comply (or to have complied) with applicable environmental laws or regulations
the payment of which will have a material adverse effect on the financial
condition, business, properties, operations, assets or prospects of the Borrower
and the Guarantors, taken as a whole, and the enforcement thereof shall not have
been stayed;
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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 Lenders, shall, by
notice to the Borrower (with a copy to counsel for the Official Creditors'
Committee appointed in the Cases, 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 Official Creditors' Committee in
the Cases, to counsel for the Pre-Petition Agent, counsel to the note holders
under the Senior Note Agreements 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 Letter of
Credit Outstandings (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 Lenders.
SECTION 8. THE AGENT
SECTION 8.01 Administration by Agent. The general administration of the Loan
Documents shall be by the Agent. Each Lender 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.
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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 Lenders, the
amount of the Loan to be made by it in accordance with its Commitment hereunder.
Should the Agent do so, each of the Lenders 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 2.19, 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
Lender's Commitment Percentage to pay accrued but unpaid Commitment Fees or
Letter of Credit Fees, and second, in accordance with each Lender'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 Lender by the Agent shall be credited to that Lender, after collection
by the Agent, in immediately available funds either by wire transfer or deposit
in that Lender's correspondent account with the Agent, as such Lender and the
Agent shall from time to time agree.
SECTION 8.03 Sharing of Setoffs. Each Lender 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 Lender 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 Lender
(a) it shall promptly purchase at par (and shall be deemed to have thereupon
purchased) from such other Lender a participation in the Loans of such other
Lender, so that the aggregate unpaid principal amount of each Lender's Loans and
its participation in Loans of the other Lenders 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 Lenders 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
Lender 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 Lender as fully as if such Lender held a Note and was the
original obligee thereon, in the amount of such participation.
SECTION 8.04 Agreement of Required Lenders. Upon any occasion requiring
or permitting an approval, consent, waiver, election or other action on the part
of the Required Lenders, action shall be taken by the Agent for and on behalf or
for the benefit of all Lenders upon the direction of the Required Lenders, and
49
any such action shall be binding on all Lenders. 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 Lenders, may
execute any of its respective duties under this Agreement and the other Loan
Documents 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 Lenders or any of them for any action taken or
omitted to be taken in good faith, or be responsible to the Lenders 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 Lenders 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 Lenders 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 Lender 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 Lender 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 Lender agrees (i)
to reimburse (x) the Agent for such Lender's Commitment Percentage of any
expenses and fees incurred for the benefit of the Lenders 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
Lenders, and any other expense incurred in connection with the operations 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
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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 First
Union shall have the same rights and powers hereunder (including the right to
give such instructions) as the other Lenders 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 Lenders under
this Agreement.
SECTION 8.08 Independent Lenders. Each Lender 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 Lender
party to this Agreement as the owner of such Lender's portion of the Loans for
all purposes, unless and until a written notice of the assignment or transfer
thereof executed by such Lender 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 Lenders and the Borrower. Upon any such
resignation, the Required Lenders 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 Lenders 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 Lenders, appoint
a successor Agent, which shall be a commercial Lender 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.
SECTION 9. GUARANTY
SECTION 9.01 Guaranty.
(a) Each of the Guarantors unconditionally and irrevocably
guarantees the due and punctual payment by the Borrower of the Obligations. Each
of the Guarantors further agrees that the Obligations may be extended or
51
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 Lender 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
Lender 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 payment when due and not just of collection, and
waives any right to require that any resort be had by the Agent or a Lender 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 Lender 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 Lenders 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 Lenders
shall be entitled to immediate payment of such 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
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of the Guarantors hereunder shall not be discharged or impaired or otherwise
affected by the failure of the Agent or a Lender 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 Lender 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 Lenders and
shall forthwith be paid to the Agent and the Lenders 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 facsimile communication) and shall be
mailed, transmitted by facsimile or delivered to the Borrower or any Guarantor
at 0000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Chief
Financial Officer and to a Lender 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 receipt is acknowledged, if by any
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 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 Lenders and shall survive the making of the Loans herein
contemplated regardless of any investigation made by any Lender 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.
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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 Lenders 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 Lenders. Each Lender 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 2.15
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 2.15 and 2.18 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 2.17, shall be determined as if such Lender had not sold such
participation. In the event any Lender shall sell any participation, such Lender
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 Lender may grant its participant
the right to consent to such Lender's execution of amendments, modifications or
waivers which (i) reduce any Fees payable hereunder to the Lenders, (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 Lender
selling such participation hereunder with respect to the Borrower.
(b) Each Lender may assign to one or more Lenders 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 Lender Affiliate
of such assignor Lender, or to another Lender, the Agent and the Fronting Lender
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 Lender 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 Agent, in no event be less than $1,000,000 or the remaining
portion of such Lender's Commitment and/or Loans, if less 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 Lender hereunder and (B) the Lender 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 Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
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(c) By executing and delivering an Assignment and Acceptance,
the Lender 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 Lender
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 Lender 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 Lender
assignor or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee appoints and
authorizes 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 Lender.
(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 Lenders and the Commitments of, and principal
amount of the Loans owing to, each Lender from time to time (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 Lenders shall treat
each Person the name of which is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender 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 Lender 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 Lender (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 Lender 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 Lender by or on behalf of the Borrower or any of the
55
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 herein
and 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 Lenders 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 Lender 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
Lender who are or are expected to become engaged in evaluating, approving,
structuring or administering the Loans; provided that nothing herein shall
prevent any Lender from disclosing such information (i) to any of its Affiliates
or to any other Lender, provided such Affiliate agrees to keep such information
confidential to the same extent required by the Lenders hereunder, (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 Lender which is not
permitted by this Agreement, (v) in connection with any litigation to which the
Agent, any Lender, 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 Lender'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 Lender shall use reasonable efforts to notify the
Borrower of any required disclosure under clause (ii) of this Section.
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 other counsel that the
Agent shall retain and any internal or third-party appraisers, consultants and
accountants advising the Agent) 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 syndication of the transactions contemplated
hereby, the reasonable and customary costs, fees and expenses (including,
without limitation, internally allocated charges and expenses relating to the
Agent's initial and ongoing Borrowing Base examinations of the Agent in
connection with its monthly and other periodic field examinations, monitoring of
assets (including reasonable and customary internal collateral monitoring fees)
and publicity expenses, and, following the occurrence of an Event of Default,
all reasonable out-of-pocket expenses incurred by the Lenders and the Agent in
the enforcement or protection of the rights of any one or more of the Lenders 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 Lenders or the Agent. Such payments shall be made on the date of
the Interim Order and thereafter on demand 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
56
reimburse the Agent for the expenses set forth in the Commitment Letter and the
reimbursement provisions thereof are hereby incorporated herein by reference.
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 Lenders and their directors,
officers, employees, agents and Affiliates (each an "Indemnified Party") from
and against any and all expenses, losses, claims, damages and liabilities
incurred by such Indemnified Party arising out of claims made by any Person in
any way relating to the transactions contemplated hereby, but excluding
therefrom all expenses, losses, claims, damages, and liabilities 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. 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 AND (TO THE EXTENT APPLICABLE) THE BANKRUPTCY
CODE.
SECTION 10.08 No Waiver. No failure on the part of the Agent or any of
the Lenders 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 Security and Pledge Agreement, 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
Lenders, 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 (1) the
Super-majority Lenders (as defined in Subsection (b) below) release a
substantial portion of any of the Liens granted to the Agent hereunder, under
the Orders or under any other Loan Document, or release any of the Guarantors,
(2) the Lender affected thereby (x) increase the Commitment of a Lender (it
being understood that a waiver of an Event of Default shall not constitute an
increase in the Commitment of a Lender), or (y) reduce the principal amount of
any Loan or the rate of interest payable thereon, or extend any date for the
57
payment of interest hereunder or reduce any Fees payable hereunder or extend the
final maturity of the Borrower's obligations hereunder or (3) all of the Lenders
(i) amend or modify any provision of this Agreement which provides for the
unanimous consent or approval of the Lenders, (ii) amend this Section 10.10 or
the definition of Required Lenders, or (iii) amend or modify the Superpriority
Claim status of the Lenders contemplated by Section 2.23. No such amendment or
modification may adversely affect the rights and obligations of the Agent or any
Fronting Lender hereunder or any Lender in the capacity referred to in Section
6.03 (v) 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 Lender shall bind any Person subsequently acquiring an interest on the
Loans held by such Lender. 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 would require the unanimous consent of all
of the Lenders and such modification or amendment is agreed to by the
Super-majority Lenders (as hereinafter defined), then with the consent of the
Borrower and the Super-majority Lenders, the Borrower and the Super-majority
Lenders shall be permitted to amend the Agreement without the consent of the
Lender or Lenders which did not agree to the modification or amendment requested
by the Borrower (such Lender or Lenders, collectively the "Minority Lenders") to
provide for (w) the termination of the Commitment of each of the Minority
Lenders, (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 Lenders, 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 Lender or
Lenders, as the case may be, as may be necessary to repay in full the
outstanding Loans of the Minority Lenders 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 Lenders" shall mean, at
any time, Lenders holding Loans representing at least 66-2/3% of the aggregate
principal amount of the Loans outstanding, or if no Loans are outstanding,
Lenders having Commitments representing at least 66-2/3% of the Total Commitment
and in any event including First Union.
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.
58
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 letters and other documentation entered into between the Borrower or a
Guarantor and any Lender or the Agent prior to the execution of this Agreement
which relate to Loans to be made hereunder shall be replaced by the terms of
this Agreement (except as otherwise expressly provided herein with respect to
the Commitment Letter and the fee letter referred to therein, including without
limitation the Borrower's agreements to actively assist the Agent in the
syndication of the transactions contemplated hereby referred to in Section
10.03(g) and including also the provisions of Section 2.19).
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 LENDER 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.
[SIGNATURE PAGES TO FOLLOW]
59
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and the year first written.
BORROWER:
XXXXXXXX XXXXX, INC.
By:______________________________________
Title:______________________________
GUARANTORS:
CURTAINS AND FABRICS, INC.
GOLD XXXXX, INC.
RASCHEL FASHION INTERKNITTING, LTD.
GFD FABRICS, INC.
GFD SERVICES, INC.
MEXICAN INDUSTRIES OF NORTH
CAROLINA, INC.
XXXXXXX LACES, LTD.
ADVISORY RESEARCH SERVICES, INC.
XXXXXXXX XXXXX (MICHIGAN), INC.
GUILFORD AIRMONT, INC.
GOLD MILL FARMS, INC.
GMI COMPUTER SALES, INC.
TWIN RIVERS TEXTILE PRINTING AND FINISHING
By: Advisory Research Services, Inc.
a General Partner
By:______________________________________
Title:______________________________
60
AGENT AND LENDERS:
FIRST UNION NATIONAL BANK,
Individually and as Agent
By:______________________________________
Title:______________________________
61
ANNEX A
to
REVOLVING CREDIT AND GUARANTY AGREEMENT
Dated as of March 13, 2002
Commitment Commitment
Lender Amount Percentage
------ ------ ----------
First Union National Bank $30,000,000.00 100.0000%
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxxx XxXxxxxx
Total $30,000,000.00 100.0000%
==============
62
Exhibit A-1 to the
Revolving Credit and
Guaranty Agreement
FORM OF INTERIM ORDER
63
Exhibit A-2 to the
Revolving Credit and
Guaranty Agreement
FORM OF FINAL ORDER
[TO BE IN SUBSTANTIALLY
THE FORM OF THE INTERIM ORDER]
64
Exhibit B to the
Revolving Credit and
Guaranty Agreement
FORM OF SECURITY AND
PLEDGE AGREEMENT
65
Exhibit C to the
Revolving Credit and
Guaranty Agreement
FORM OF OPINIONS OF COUNSEL
66
Exhibit D to the
Revolving Credit and
Guaranty Agreement
FORM OF ASSIGNMENT AND ACCEPTANCE
67
SCHEDULE 1.01
EXISTING AGREEMENTS
[TO BE SATISFACTORY TO THE AGENT]
68
SCHEDULE 3.05
SUBSIDIARIES
[TO BE SATISFACTORY TO THE AGENT]
69
SCHEDULE 3.06
LIENS
[TO BE SATISFACTORY TO THE AGENT]
70
SCHEDULE 3.07
ENVIRONMENTAL INVESTIGATIONS
[TO BE SATISFACTORY TO THE AGENT]
71
SCHEDULE 6.08
STOCK OPTIONS
72
SCHEDULE 6.10
Existing Investments
[TO BE SATISFACTORY TO THE AGENT]
73
