EXHIBIT 10.2
EXECUTION COPY
LOAN AND SECURITY AGREEMENT
by and among
OMEGA WIRE, INC.
OWI CORPORATION
CAMDEN WIRE CO., INC.
IWG RESOURCES, LLC
INTERNATIONAL WIRE ROME OPERATIONS, INC.
WIRE TECHNOLOGIES, INC.
as Borrowers
and
INTERNATIONAL WIRE GROUP, INC.
as Guarantor
SILVER POINT FINANCE, LLC
as Agent
and
THE LENDERS FROM TIME TO TIME PARTY HERETO
as Lenders
Dated: October 20, 2004
TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS.....................................................................................1
SECTION 2. CREDIT FACILITY................................................................................25
2.1. Loan...........................................................................................25
2.2. Borrowing Procedure............................................................................25
2.3. Securitization.................................................................................25
SECTION 3. INTEREST AND FEES..............................................................................26
3.1. Interest.......................................................................................26
3.2. Fees...........................................................................................27
3.3. Changes in Laws and Increased Costs of Loans...................................................27
SECTION 4. CONDITIONS PRECEDENT...........................................................................29
4.1. Conditions Precedent to the Loan...............................................................29
SECTION 5. GRANT AND PERFECTION OF SECURITY INTEREST......................................................34
5.1. Grant of Security Interest.....................................................................34
5.2. Perfection of Security Interests...............................................................36
SECTION 6. COLLECTION AND ADMINISTRATION..................................................................40
6.1. Borrowers' Loan Accounts; Registered Notes.....................................................40
6.2. Statements.....................................................................................40
6.3. Collection of Accounts.........................................................................41
6.4. Payments; Prepayments..........................................................................41
6.5. Authorization to Make the Loan.................................................................43
6.6. Use of Proceeds................................................................................43
6.7. Appointment of Administrative Borrower Representative as Agent for Requesting
the Loan and Receipts of the Loan and Statements...............................................44
6.8. Pro Rata Treatment.............................................................................44
6.9. Sharing of Payments, Etc.......................................................................45
6.10. [Intentionally Omitted]........................................................................46
6.11. Taxes..........................................................................................46
6.12. Obligations Several; Independent Nature of Lenders' Rights.....................................48
SECTION 7. COLLATERAL REPORTING AND COVENANTS.............................................................49
7.1. Collateral Reporting...........................................................................49
7.2. Accounts Covenants.............................................................................50
7.3. Inventory Covenants............................................................................50
7.4. Equipment and Real Property Covenants..........................................................51
7.5. Power of Attorney..............................................................................52
7.6. Right to Cure..................................................................................53
7.7. Access to Premises.............................................................................53
(i)
SECTION 8. REPRESENTATIONS AND WARRANTIES.................................................................54
8.1. Corporate Existence, Power and Authority.......................................................54
8.2. Name; State of Organization; Chief Executive Office; Collateral Locations......................54
8.3. Financial Statements; No Material Adverse Effect...............................................55
8.4. Priority of Liens; Title to Properties.........................................................55
8.5. Tax Returns....................................................................................55
8.6. Litigation.....................................................................................56
8.7. Compliance with Other Agreements and Applicable Laws...........................................56
8.8. Environmental Compliance.......................................................................56
8.9. Employee Benefits..............................................................................57
8.10. Bank Accounts..................................................................................58
8.11. Intellectual Property..........................................................................58
8.12. Subsidiaries; Affiliates; Capitalization; Solvency.............................................58
8.13. Labor Disputes.................................................................................59
8.14. Restrictions on Subsidiaries...................................................................60
8.15. Material Contracts.............................................................................60
8.16. Intentionally Omitted..........................................................................60
8.17. Accuracy and Completeness of Information.......................................................60
8.18. Working Capital Loan Documents.................................................................60
8.19. Survival of Warranties; Cumulative.............................................................60
SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS.............................................................60
9.1. Maintenance of Existence.......................................................................60
9.2. New Collateral Locations.......................................................................61
9.3. Compliance with Laws, Regulations, Etc.........................................................61
9.4. Payment of Taxes and Claims....................................................................62
9.5. Insurance......................................................................................63
9.6. Financial Statements and Other Information.....................................................63
9.7. Sale of Assets, Consolidation, Merger, Dissolution, Etc........................................66
9.8. Encumbrances...................................................................................69
9.9. Indebtedness...................................................................................71
9.10. Loans, Investments, Etc........................................................................75
9.11. Dividends and Redemptions......................................................................79
9.12. Transactions with Affiliates...................................................................79
9.13. Compliance with ERISA..........................................................................80
9.14. End of Fiscal Years; Fiscal Quarters...........................................................80
9.15. Change in Business.............................................................................81
9.16. Limitation of Restrictions Affecting Subsidiaries..............................................81
9.17. Financial Covenants............................................................................81
9.18. Lender Meetings................................................................................82
9.19. License Agreements.............................................................................82
9.20. After Acquired Real Property...................................................................82
9.21. Costs and Expenses.............................................................................83
9.22. Further Assurances.............................................................................84
(ii)
SECTION 10. EVENTS OF DEFAULT AND REMEDIES.................................................................84
10.1. Events of Default..............................................................................84
10.2. Remedies.......................................................................................86
SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW...................................89
11.1. Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver..........................89
11.2. Waiver of Notices..............................................................................91
11.3. Amendments and Waivers.........................................................................91
11.4. Waiver of Counterclaims........................................................................92
11.5. Indemnification................................................................................92
SECTION 12. THE AGENT......................................................................................93
12.1. Appointment, Powers and Immunities.............................................................93
12.2. Reliance by Agent..............................................................................94
12.3. Events of Default..............................................................................94
12.4. Silver Point in its Individual Capacity........................................................94
12.5. Indemnification................................................................................95
12.6. Non-Reliance on Agent and Other Lenders........................................................95
12.7. Failure to Act.................................................................................95
12.8. Concerning the Collateral and the Related Financing Agreements.................................96
12.9. Field Audit, Examination Reports and other Information; Disclaimer by Lenders..................96
12.10. Collateral Matters.............................................................................96
12.11. Agency for Perfection..........................................................................98
12.12. Successor Agent................................................................................98
SECTION 13. TERM OF AGREEMENT; MISCELLANEOUS...............................................................99
13.1. Term...........................................................................................99
13.2. Interpretative Provisions......................................................................99
13.3. Notices.......................................................................................101
13.4. Partial Invalidity............................................................................102
13.5. Confidentiality...............................................................................102
13.6. Successors....................................................................................103
13.7. Assignments; Participations...................................................................103
13.8. Entire Agreement..............................................................................106
13.9. USA Patriot Act...............................................................................106
13.10. Counterparts, Etc.............................................................................106
1. Assignment and Acceptance.............................................................................A-2
2. Payments..............................................................................................A-2
3. Reallocation of Payments..............................................................................A-2
4. Independent Credit Decision...........................................................................A-3
(iii)
5. Effective Date; Notices...............................................................................A-3
6. Agent.................................................................................................A-3
7. Withholding Tax.......................................................................................A-4
8. Representations and Warranties........................................................................A-4
9. Term Loan Intercreditor Agreement; New Notes Intercreditor Agreement..................................A-5
10. Further Assurances....................................................................................A-5
11. Miscellaneous.........................................................................................A-5
(iv)
INDEX TO
EXHIBITS AND SCHEDULES
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Compliance Certificate
Exhibit C Form of Note
Exhibit 6.11(d) Form of Certificate of Withholding Tax Exemption
Schedule 1.38 Facilities to be Closed
Schedule 1.40 Related Funds
Schedule 1.53 Existing Lenders
Schedule 1.54 Existing Letters of Credit
Schedule 1.74 Subsidiaries Operating Insulated Wire Division
Schedule 1.88 Mortgages and Mortgaged Real Property
Schedule 1.109 Permitted Holders
Schedule 1.121 Subsidiaries Operating Reel Sale Division
Schedule 9.17 Financial Covenants
(v)
LOAN AND SECURITY AGREEMENT
This
Loan and Security Agreement dated October 20, 2004 is entered into
by and among OMEGA WIRE, INC., a Delaware corporation ("Omega"), CAMDEN WIRE
CO., INC., a
New York corporation ("Camden"), IWG RESOURCES, LLC, a Nevada
limited liability company ("Resources"), INTERNATIONAL WIRE ROME OPERATIONS,
INC., a Delaware corporation ("Rome") OWI CORPORATION, a
New York corporation
("OWI"), and WIRE TECHNOLOGIES, INC., an Indiana corporation ("Wire
Technologies", and together with Omega, Camden, Resources, Rome and OWI, each
individually a "Borrower" and collectively, "Borrowers"), INTERNATIONAL WIRE
GROUP, INC., a Delaware corporation ("Parent", as hereinafter further defined,
and sometimes hereinafter referred to as "Guarantor"), the parties hereto from
time to time as lenders, whether by execution of this Agreement or an Assignment
and Acceptance (each individually, a "Lender" and collectively, "Lenders") and
Silver Point Finance, LLC, a Delaware limited liability company, in its capacity
as agent for Lenders (in such capacity, "Agent").
W I T N E S S E T H:
WHEREAS, Borrowers and Parent have requested that Agent and Lenders
enter into financing arrangements with Borrowers pursuant to which Lenders may
make loans and provide other financial accommodations to Borrowers; and
WHEREAS, each Lender is willing to agree (severally and not jointly) to
make such loans and provide such financial accommodations to Borrowers on a pro
rata basis according to its Commitment (as defined below) on the terms and
conditions set forth herein and Agent is willing to act as agent for Lenders on
the terms and conditions set forth herein and the other Financing Agreements;
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS
For purposes of this Agreement, the following terms shall have the
respective meanings given to them below:
1.1 "Accounts" shall mean, as to each Borrower and Guarantor, all
present and future rights of such Borrower and Guarantor to payment of a
monetary obligation, whether or not earned by performance, which is not
evidenced by chattel paper or an instrument, (a) for property that has been or
is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for
services rendered or to be rendered, (c) for a secondary obligation incurred or
to be incurred, or (d) arising out of the use of a credit or charge card or
information contained on or for use with the card.
1.2 "Adjusted Eurodollar Rate" shall mean, with respect to each
Interest Period for any Eurodollar Rate Loan, the rate per annum (rounded
upwards, if necessary, to the
next one-thousandth (1/1000) of one (1%) percent) determined by dividing (a) the
Eurodollar Rate for such Interest Period by (b) a percentage equal to: (i) one
(1) minus (ii) the Reserve Percentage. For purposes hereof, "Reserve Percentage"
shall mean the reserve percentage, expressed as a decimal, prescribed by any
United States or foreign banking authority for determining the reserve
requirement which is or would be applicable to deposits of United States dollars
in a non-United States or an international banking office of Reference Bank used
to fund a Eurodollar Rate Loan or any Eurodollar Rate Loan made with the
proceeds of such deposit, whether or not the Reference Bank actually holds or
has made any such deposits or loans. The Adjusted Eurodollar Rate shall be
adjusted on and as of the effective day of any change in the Reserve Percentage.
1.3 "Administrative Borrower Representative" shall mean Parent, in its
capacity as Administrative Borrower Representative on behalf of the Borrowers
pursuant to Section 6.7 hereof and it successors and assigns in such capacity.
1.4 "Affiliate" shall mean, with respect to a specified Person, any
other Person which directly or indirectly, through one or more intermediaries,
controls or is controlled by or is under common control with such Person, and
without limiting the generality of the foregoing, includes (a) any Person which
beneficially owns or holds ten (10%) percent or more of any class of Voting
Stock of such Person or other equity interests in such Person, (b) any Person of
which such Person beneficially owns or holds ten (10%) percent or more of any
class of Voting Stock and (c) any director or executive officer of such Person.
For the purposes of this definition, the term "control" (including with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of Voting Stock, by
agreement or otherwise.
1.5 "Agent" shall mean Silver Point, in its capacity as agent on behalf
of Lenders pursuant to the terms hereof and any replacement or successor agent
hereunder.
1.6 "Agent Payment Account" shall mean account no. 00000000, reference
IWG, of Agent at Citibank, NA, or such other account of Agent as Agent may from
time to time designate to Administrative Borrower Representative as the Agent
Payment Account for purposes of this Agreement and the other Financing
Agreements.
1.7 "Agents" shall mean Agent and Working Capital Agent.
1.8 "Applicable Percentage of Pro Forma Cost Savings" means, with
respect to a specified Permitted Acquisition, (a) for the calculation of
projected EBITDA for the purposes of Section 9.10(n)(v) or the calculation of
EBITDA for the period ended prior to the end of the first full quarter after the
consummation of such Permitted Acquisition, 100% of the Pro Forma Cost Savings
therefor, (b) for the calculation of EBITDA for the period ended on the end of
the first full quarter after the consummation of such Permitted Acquisition,
such Pro Forma Cost Savings set forth in the Cost Savings Budget for the second,
third and fourth quarters after the consummation of such Permitted Acquisition,
(c) for the calculation of EBITDA for the period ended on the end of the second
full quarter after the consummation of such Permitted Acquisition, such Pro
Forma Cost Savings set forth in the Cost Savings Budget for the third and
2
fourth quarters after the consummation of such Permitted Acquisition, (d) for
the calculation of EBITDA for the period ended on the end of the third full
quarter after consummation of the Permitted Acquisition, such Pro Forma Cost
Savings set forth in the Cost Savings Budget for the fourth quarter after the
consummation of such Permitted Acquisition, and (e) for the calculation of
EBITDA for any period ended on or after the end of the fourth full quarter after
the consummation of the Permitted Acquisition, 0% of such Pro Forma Cost
Savings.
1.9 "Asset Sale" shall mean any transaction, or series of related
transactions, pursuant to which any Borrower, Guarantor or any of its
Subsidiaries sells, assigns, transfers, conveys, leases or subleases, licenses
or otherwise disposes of any property or assets (whether now owned or hereafter
acquired) to any other Person.
1.10 "Assignment and Acceptance" shall mean an Assignment and
Acceptance substantially in the form of Exhibit A attached hereto (with blanks
appropriately completed) delivered to Agent in connection with an assignment of
a Lender's interest hereunder in accordance with the provisions of Section 13.7
hereof.
1.11 "Average Thirty Day Excess Availability" shall have the meaning
given to such term in the Working Capital Loan Agreement as in effect on the
date hereof.
1.12 "Bankruptcy Code" shall mean the United States Bankruptcy Code,
being Title 11 of the United States Code, as the same now exists or may from
time to time hereafter be amended, modified, recodified or supplemented,
together with all official rules and regulations thereunder or related thereto.
1.13 "Bankruptcy Court" shall mean the United States Bankruptcy Court
for the Southern District of
New York.
1.14 "Blocked Accounts" shall have the meaning set forth in Section 6.3
of the Working Capital Loan Agreement.
1.15 "Borrowing Base" shall have the meaning given to such term in the
Working Capital Loan Agreement as in effect on the date hereof (with each
defined term used in such definition of Borrowing Base having the meaning given
to such term in the Working Capital Loan Agreement as in effect on the date
hereof.
1.16 "Business Day" shall mean any day other than a Saturday, Sunday,
or other day on which commercial banks are authorized or required to close under
the laws of the State of
New York, the State of Illinois or the State of North
Carolina, and a day on which Agent is open for the transaction of business,
except that if a determination of a Business Day shall relate to any Eurodollar
Rate Loans, the term Business Day shall also exclude any day on which banks are
closed for dealings in dollar deposits in the London interbank market or other
applicable Eurodollar Rate market.
1.17 "Camden" shall mean Camden Wire Co., Inc., a
New York corporation,
and its successors and assigns permitted hereunder.
3
1.18 "Capital Leases" shall mean, as applied to any Person, any lease
of (or any agreement conveying the right to use) any property (whether real,
personal or mixed) by such Person as lessee which in accordance with GAAP, is
required to be reflected as a capital lease on the balance sheet of such Person.
1.19 "Capital Stock" shall mean, with respect to any Person, any and
all shares, interests, participations or other equivalents (however designated)
of such Person's capital stock or partnership, limited liability company or
other equity interests at any time outstanding, and any and all rights, warrants
or options exchangeable for or convertible into such capital stock or other
interests (but excluding any debt security that is exchangeable for or
convertible into such capital stock).
1.20 "Cash Equivalents" shall mean, at any time, (a) any evidence of
Indebtedness with a maturity date of ninety (90) days or less issued or directly
and fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof; provided, that, the full faith and credit of the United
States of America is pledged in support thereof; (b) certificates of deposit,
time deposits, eurodollar deposits or overnight deposits or bankers' acceptances
with a maturity of ninety (90) days or less of any financial institution that is
a member of the Federal Reserve System having combined capital and surplus and
undivided profits of not less than $500,000,000; (c) commercial paper (including
variable rate demand notes) with a maturity of ninety (90) days or less of an
issuer (except an Affiliate of any Borrower or Guarantor) organized under the
laws of any State of the United States of America or the District of Columbia
and rated at least A by Standard & Poor's Ratings Service, a division of The
XxXxxx-Xxxx Companies, Inc. ("S&P") or at least P by Xxxxx'x Investors Service,
Inc. ("Moody's"); (d) repurchase obligations with a term of not more than thirty
(30) days for underlying securities of the types described in clause (a) above
entered into with any financial institution having combined capital and surplus
and undivided profits of not less than $500,000,000; (e) repurchase agreements
and reverse repurchase agreements relating to marketable direct obligations
issued or unconditionally guaranteed by the United States of America or issued
by any governmental agency thereof and backed by the full faith and credit of
the United States of America, in each case maturing within ninety (90) days or
less from the date of acquisition; provided, that, the terms of such agreements
comply with the guidelines set forth in the Federal Financial Agreements of
Depository Institutions with Securities Dealers and Others, as adopted by the
Comptroller of the Currency on October 31, 1985; and (f) investments in money
market funds and mutual funds which invest substantially all of their assets in
securities of the types described in clauses (a) through (e) above.
1.21 "Change of Control" shall mean (a) the transfer (in one
transaction or a series of transactions) of all or substantially all of the
assets of Parent to any Person or group (as such term is used in Section
13(d)(3) of the Exchange Act), other than as permitted in Section 9.7 hereof;
(b) the acquisition by any Person or group (as such term is used in Section
13(d)(3) of the Exchange Act), (other than any Permitted Holder(s)), in excess
of fifty (50%) percent of beneficial ownership, directly or indirectly, of the
voting power of the total outstanding Voting Stock of Parent; (c) during any
period of two (2) consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of Parent (together with any new
directors who have been appointed by any Permitted Holder, or whose nomination
for election
4
by the stockholders of such Borrower or Guarantor, as the case may be, was
approved by a vote of at least a majority of the directors then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of any Borrower or Guarantor
then still in office; or (d) the failure of Parent to own directly or indirectly
one hundred (100%) percent of the voting power of the total outstanding Voting
Stock of any other Borrower or Guarantor, other than as permitted in this
Agreement.
1.22 "Chapter 11 Case" shall mean, collectively, the Chapter 11 Cases
of the Borrowers and Guarantors, each as debtor and debtor-in-possession, under
the Bankruptcy Code, referred to as In re International Wire Group, Inc., et
al., Chapter 11 Case No. 04-11991 (BRL) (Jointly Administered), which are
pending in the Bankruptcy Court.
1.23 "Chapter 11 Plan" shall mean the Debtors' Second Amended and
Restated Joint Plan under Chapter 11 of the Bankruptcy Code, dated June 24,
2004, as modified by that certain Modification to Debtors' Second Amended and
Restated Joint Plan Under Chapter 11 of the Bankruptcy Code, dated August 13,
2004, as confirmed by order of the Bankruptcy Court dated August 25, 2004.
1.24 "Closing Date" shall mean the date on which the conditions
precedent in Section 4 shall have been satisfied or waived and the Lenders shall
have made the Loan.
1.25 "Code" shall mean the Internal Revenue Code of 1986, as the same
now exists or may from time to time hereafter be amended, modified, recodified
or supplemented, together with all regulations thereunder or related thereto.
1.26 "Collateral" shall have the meaning set forth in Section 5.1
hereof.
1.27 "Collateral Access Agreement" shall mean an agreement in writing,
in form and substance reasonably satisfactory to Agent, from any lessor of
premises to any Borrower or Guarantor, or any other person to whom any
Collateral is consigned or who has custody, control or possession of any such
Collateral or is otherwise the owner or operator of any premises on which any of
such Collateral is located, in favor of Agent with respect to the Collateral at
such premises or otherwise in the custody, control or possession of such lessor,
consignee or other person.
1.28 "Commitment" shall mean, at any time, as to each Lender, the
principal amount set forth below such Lender's signature on the signatures pages
hereto designated as the Commitment or on Schedule 1 to the Assignment and
Acceptance Agreement pursuant to which such Lender became a Lender hereunder in
accordance with the provisions of Section 13.7 hereof, as the same may be
adjusted from time to time in accordance with the terms hereof; sometimes being
collectively referred to herein as "Commitments."
1.29 "Congress" shall mean Congress Financial Corporation (Central), an
Illinois corporation, and its successors and assigns.
5
1.30 "Consolidated Leverage Ratio" shall mean, as to Parent and its
Subsidiaries, with respect to any period, the ratio of (a) the Consolidated
Senior Debt of Parent and its Subsidiaries on the last day of such period to (b)
the amount equal to EBITDA of Parent its Subsidiaries for such period. For the
period from October 2003 through and including August 2004, EBITDA for any month
shall be as set forth on Schedule 9.17. For the period from September 2004
through and including October 2004, EBITDA shall be calculated on a pro forma
basis consistent with the methodology used in preparing Schedule 9.17. For each
month thereafter, EBITDA shall be calculated based upon the financial statements
required to be delivered hereunder. In the event that, after the Closing Date,
Parent restates its results of operations for any month set forth on Schedule
9.17, EBITDA for such months shall be recalculated to reflect such restatement
on a basis reasonably acceptable to Agent.
1.31 "Consolidated Net Income" shall mean, with respect to any Person
for any period, the aggregate of the net income (loss) of such Person and its
Subsidiaries, on a consolidated basis, for such period, all as determined in
accordance with GAAP; provided, that (a) the net income of any Person that is
not a wholly-owned Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid or payable to such Person or a wholly-owned Subsidiary of
such Person; (b) except to the extent included pursuant to the foregoing clause,
the net income of any Person accrued prior to the date it becomes a wholly-owned
Subsidiary of such Person or is merged into or consolidated with such Person or
any of its wholly-owned Subsidiaries or that Person's assets are acquired by
such Person or by any of its wholly-owned Subsidiaries shall be included on a
pro forma basis for such period; (c) the net income of any wholly-owned
Subsidiary or division that has been disposed of in an Asset Sale made during
such period shall be excluded by assuming that the Asset Sale had occurred on
the first day of the period; and (d) the effect of any change in accounting
principles adopted by such Person or its Subsidiaries after the date hereof
shall be excluded.
1.32 "Consolidated Senior Debt" shall mean, as to Parent and its
Subsidiaries on a consolidated basis with respect to any measurement date, an
amount equal to (a) the sum of (i) the principal amount of the Loan outstanding
at such date, (ii) the aggregate principal amount of all Revolving Loans
outstanding at such date and (iii) the aggregate principal amount of all issued
and outstanding Letter of Credit Obligations at such date (as defined in the
Working Capital Loan Agreement), minus (b) unrestricted cash and Cash
Equivalents of Borrowers at such date.
1.33 "Control Notice" shall mean a written notice delivered pursuant to
a Deposit Account Control Agreement instructing the depository bank to comply
with instructions originated by Agent with respect to the deposit account that
is covered thereby without further consent of any Borrower or Guarantor.
1.34 "Cost Savings Budget" shall have the meaning set forth in the
definition of Pro Forma Cost Savings.
1.35 "Debt Issuance" shall mean any issuance or sale by any Person of
any debt securities or other Indebtedness of the type specified in clause (a) of
the definition of such term;
6
provided, that, in the case of a Borrower or Guarantor, Debt Issuance shall not
include any Indebtedness permitted under Section 9.9 hereof, other than
Indebtedness incurred pursuant to Section 9.9(e).
1.36 "Default" shall mean an act, condition or event which with notice
or passage of time or both would constitute an Event of Default.
1.37 "Deposit Account Control Agreement" shall mean an agreement in
writing, substantially in form of Exhibit D to the Working Capital Loan
Agreement as in effect on the date hereof or such other agreement in form and
substance reasonably satisfactory to Agent, by and among Agent, Working Capital
Agent, the Borrower or Guarantor with a deposit account at any bank and the bank
at which such deposit account is at any time maintained, which provides, among
other things, that such bank will comply with instructions originated by Working
Capital Agent or, Working Capital Agent, after delivery of a Control Notice.
1.38 "EBITDA" means, with respect to Parent and its Subsidiaries for
any period, Consolidated Net Income of Parent and its Subsidiaries for such
period plus (a) without duplication and to the extent reflected as a charge in
the statement of such Consolidated Net Income for such period, the sum of (i)
total income and franchise tax expense, (ii) interest expense (including losses
with respect to interest rate Hedging Agreements), amortization or write-off of
debt discount and debt issuance costs and commissions and discounts and other
fees and charges associated with Indebtedness, (iii) depreciation and
amortization expense, (iv) amortization or impairment of intangibles (including,
but not limited to, goodwill), (v) other noncash charges (including, but not
limited to, currency losses), (vi) any extraordinary losses in accordance with
GAAP, losses from any discontinued operations relating to the Hose Claims in
aggregate amount not to exceed on a cumulative basis $1,000,000 for Parent's and
its Subsidiaries' 2004 fiscal year and all subsequent fiscal years, noncash
losses from discontinued operations related to the sales of assets, and unusual
noncash losses (including any such losses on sales or impairment of assets other
than inventory sold in the ordinary course of business), (vii) costs and charges
accrued during such period related to the closing of operations at locations
described on Schedule 1.38 not to exceed on a cumulative aggregate basis
$4,500,000 for Parent's and its Subsidiaries' 2004 fiscal year and all
subsequent fiscal years, or related to the relocation of equipment among plants,
not to exceed on a cumulative aggregate basis $400,000 for Parent's and its
Subsidiaries' 2004 fiscal year and all subsequent fiscal years, and (viii) any
non-operational costs and charges accrued during such period related to the
restructuring contemplated by the Chapter 11 Cases (such costs and charges to
consist primarily of, but not be limited to, KERP payments, severance payments
for Xxxxxx Partners employees, professional fees, printing fees and financing
fees) in an aggregate amount not to exceed $17,800,000 for Parent's and its
Subsidiaries' 2004 fiscal year, plus (b) the Applicable Percentage of Pro Forma
Cost Savings, minus (c) without duplication, (i) any extraordinary and unusual
gains (including gains on the sales of assets, other than inventory sold in the
ordinary course of business), (ii) noncash gains (including currency gains) and
(iii) interest income (including gains with respect to interest rate Hedging
Agreements) included in Consolidated Net Income.
7
1.39 "Effective Date" shall mean the date on which (a) the Confirmation
Order shall have become a Final Order and (b) all of the conditions precedent to
the effectiveness of the Plan shall have been satisfied.
1.40 "Eligible Transferee" shall mean (a) any Lender or any Affiliate
of any Lender, (b) the parent company of any Lender and/or any Affiliate of such
Lender which is more than fifty (50%) percent owned by such Lender or its parent
company; (c) any fund set forth on Schedule 1.40, or any person (whether a
corporation, partnership, trust or otherwise) that is engaged in the business of
making, purchasing, holding or otherwise investing in bank loans and similar
extensions of credit in the ordinary course of its business and is administered
or managed by a Lender, or with respect to any 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 (collectively, "Related Funds") and in each case is reasonably approved
by Agent; and (d) any other commercial bank, financial institution or
"accredited investor" (as defined in Regulation D under the Securities Act of
1933) reasonably approved by Agent and so long as no Default or Event of Default
has occurred and is continuing, Borrowers, which approval by Borrowers shall not
be unreasonably withheld, provided, that, (i) neither any Borrower nor any
Guarantor or any Affiliate of any Borrower or Guarantor shall qualify as an
Eligible Transferee and (ii) no Person to whom any Indebtedness which is in any
way subordinated in right of payment to any other Indebtedness of any Borrower
or Guarantor shall qualify as an Eligible Transferee, except as Agent may
otherwise specifically agree.
1.41 "Environmental Laws" shall mean all applicable foreign, Federal,
State and local laws (including common law), legislation, rules, codes,
licenses, permits (including any conditions imposed therein), authorizations,
judicial or administrative decisions, injunctions or agreements between any
Borrower or Guarantor and any Governmental Authority, (a) relating to pollution
and the protection, preservation or restoration of the environment (including
air, water vapor, surface water, ground water, drinking water, drinking water
supply, surface land, subsurface land, plant and animal life or any other
natural resource), or to human health or to safety as it relates to
environmental protection, (b) relating to human exposure to, or the use,
storage, recycling, treatment, generation, manufacture, processing,
distribution, transportation, handling, labeling, production, release or
disposal, or threatened release, of Hazardous Materials, or (c) relating to
recordkeeping, notification, disclosure and reporting requirements respecting
Hazardous Materials. The term "Environmental Laws" includes (i) the Federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Federal Superfund Amendments and Reauthorization Act, the Federal Water
Pollution Control Act of 1972, the Federal Clean Water Act, the Federal Clean
Air Act, the Federal Resource Conservation and Recovery Act of 1976 (including
the Hazardous and Solid Waste Amendments thereto), the Federal Solid Waste
Disposal and the Federal Toxic Substances Control Act, the Federal Insecticide,
Fungicide and Rodenticide Act, and the Federal Safe Drinking Water Act of 1974,
(ii) applicable state counterparts to such laws and (iii) any common law or
equitable doctrine that may impose liability or obligations for injuries or
damages due to, or threatened as a result of, the contamination of the
environment by or human exposure to any Hazardous Materials.
8
1.42 "Environmental Permits" shall mean all permits, licenses,
approvals, authorizations, consents or registrations required by any applicable
Environmental Law in connection with any Borrower's or Guarantor's ownership,
use and /or operation of the premises, including without limitation, those
required for the disposal, distribution, generation, handling, manufacture,
possession, processing, production, sale, storage, containment, transport,
treatment, release, discharge, emission, remediation, or use of Hazardous
Materials.
1.43 "Equipment" shall mean, as to each Borrower and Guarantor, all of
such Borrower's and Guarantor's now owned and hereafter acquired equipment,
wherever located, including machinery, data processing and computer equipment
and computer hardware or software (whether owned or licensed and including
embedded software), vehicles, tools, furniture, fixtures, all attachments,
accessions and property now or hereafter affixed thereto or used in connection
therewith, and substitutions and replacements thereof, wherever located.
1.44 "Equity Issuance" shall mean (a) any issuance or sale by any
Person of (i) any of its Capital Stock, (ii) any warrants or options exercisable
in respect of its Capital Stock (other than any warrants or options issued to
directors, officers or employees of such Person pursuant to employee benefit
plans established in the ordinary course of business and any Capital Stock
issued upon the exercise of such warrants or options) or (iii) any other
security or instrument representing a membership or other equity interest (or
the right to obtain a membership or other equity interest) in any such Person or
(b) the receipt by such Person of any capital contribution (whether or not
evidenced by a membership interest or other equity security issued by such
Person upon such contribution).
1.45 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, together with all rules, regulations and interpretations thereunder or
related thereto.
1.46 "ERISA Affiliate" shall mean any person required to be aggregated
with any Borrower, any Guarantor or any of its or their respective Subsidiaries
under Sections 414(b), 414(c), 414(m) or 414(o) of the Code.
1.47 "ERISA Event" shall mean (a) any "reportable event", as defined in
Section 4043(c) of ERISA or the regulations issued thereunder, with respect to a
Plan for which the thirty (30) day notice requirement has not been waived; (b)
the adoption of any amendment to a Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (b)
the existence with respect to any Plan of an "accumulated funding deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412 of the Code or Section 303(d) of
ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the occurrence of a "prohibited transaction" with
respect to which any Borrower, Guarantor or any of its or their respective
Subsidiaries is a "disqualified person" (within the meaning of Section 4975 of
the Code) or with respect to which any Borrower, Guarantor or any of its or
their respective Subsidiaries could otherwise be liable; (e) a complete or
partial withdrawal by any Borrower, Guarantor or any ERISA Affiliate from a
Multiemployer Plan or a cessation of operations which is treated as such a
withdrawal or notification that a Multiemployer Plan is in reorganization; (f)
the filing of a notice of intent to terminate, the treatment of a Plan amendment
as a
9
termination under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the Pension Benefit Guaranty Corporation to terminate a Plan; (g)
an event or condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan; (h) the imposition of any liability under Title
IV of ERISA, other than the Pension Benefit Guaranty Corporation premiums due
but not delinquent under Section 4007 of ERISA, upon any Borrower, Guarantor or
any ERISA Affiliate in excess of $1,000,000 and (i) any other event or condition
with respect to a Plan including any Plan maintained, or contributed to, by any
ERISA Affiliate that could reasonably be expected to result in liability of any
Borrower in excess of $1,000,000.
1.48 "Eurodollar Rate" shall mean with respect to the Interest Period
for a Eurodollar Rate Loan, the interest rate per annum (rounded upwards, if
necessary, to the next one-thousandth (1/1000th) of one (1%) percent), for U.S.
Dollar deposits with a maturity equivalent to such Interest Period which appears
on the Telerate Page 3750 as of 11:00 a.m., London time, on the second Business
Day prior to the first day of such Interest Period, as reported by Bloomberg
Financial Markets Commodities News. If, on any such date, such rate does not
appear on the Telerate Page 3750, the Agent shall determine the arithmetic means
of the offered quotations of the Reference Banks (as defined below) to prime
banks in the London interbank market for U.S. Dollar deposits for the relevant
term and in a Representative Amount (as defined below) by reference to requests
for quotations as of approximately 11:00 a.m., London time, on such date made by
the Agent to the Reference Banks. If, on such date, at least two of the
Reference Banks provide such quotations, Eurodollar Rate shall equal such
arithmetic mean. If, on any such date, only one or none of the Reference Banks
provide such quotations, Eurodollar Rate shall be deemed to be the arithmetic
mean of the offered quotations that the major banks in
New York City selected by
the Agent are quoting on the second Business Day prior to the first day of such
Interest Period, at approximately 11:00 a.m.,
New York City time, for loans in
U.S. Dollar to lending European banks for the relevant term and in a
Representative Amount. As used in this definition: "Reference Banks" means four
major banks in the London interbank market selected by the Agent; and
"Representative Amount" means an amount that is representative for a single
transaction in the relevant market at the relevant time.
1.49 "Eurodollar Rate Loans" shall mean the Loan or portion thereof on
which interest is payable based on the Adjusted Eurodollar Rate in accordance
with the terms hereof.
1.50 "Event of Default" shall mean the occurrence or existence of any
event or condition described in Section 10.1 hereof.
1.51 "Excess Availability" shall have the meaning given to such term
Working Capital Loan Agreement as in effect on the date hereof.
1.52 "Exchange Act" shall mean the Securities Exchange Act of 1934,
together with all rules, regulations and interpretations thereunder or related
thereto.
1.53 "Existing Lenders" shall mean the lenders to Borrowers listed on
Schedule 1.53 hereto (and including X.X. Xxxxx Special Opportunities Fund, L.P.
in its capacity as agent acting for such lenders) and their respective
predecessors, successors and assigns.
10
1.54 "Existing Letters of Credit" shall mean, collectively, the letters
of credit issued for the account of a Borrower or Guarantor or for which such
Borrower or Guarantor is otherwise liable listed on Schedule 1.54 hereto, as the
same now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
1.55 "Extraordinary Receipts" shall mean amounts in excess of $100,000
on an aggregate and cumulative basis that are received after the date hereof by
any Borrower or Guarantor not in the ordinary course of business, including (a)
pension plan reversions, (b) United States, state, local or foreign tax refunds
(to the extent not automatically applied by such Borrower or Guarantor to future
tax payments and except to the extent representing an overpayment of estimated
taxes for the current or the immediately preceding tax year) and (c) judgments,
proceeds of settlements or other consideration of any kind in connection with
any cause of action, net of compensatory damages and the costs and expenses
incurred to obtain such judgments or settlements, but expressly excluding from
Extraordinary Receipts (i) proceeds of an Equity Issuance, Debt Issuance or
Asset Sale and (ii) insurance or condemnation proceeds.
1.56 "Final Maturity Date" shall mean October 20, 2009.
1.57 "Final Order" shall mean a judgment, order, ruling or other decree
issued and entered by the Bankruptcy Court or by any state or other federal
court or other tribunal which judgment, order, ruling or other decree has not
been reversed, stayed, modified or amended and as to which (a) the time to
appeal or petition for review, rehearing or certiorari has expired and as to
which no appeal or petition for review, rehearing or certiorari is pending or
(b) any appeal or petition for review, rehearing or certiorari has been finally
decided and no further appeal or petition for review, review, rehearing or
certiorari can be taken or granted; provided, however, that the possibility that
a motion under Rule 59 or Rule 60 of the Federal Rules of Civil Procedure, or
any analogous rule under the Bankruptcy Rules or applicable state court rules of
civil procedure, may be filed with respect to such order shall not cause such
order not to be a Final Order.
1.58 "Financing Agreements" shall mean, collectively, this Agreement
and all notes, guarantees, security agreements, deposit account control
agreements, investment property control agreements, intercreditor agreements and
all other agreements, documents and instruments now or at any time hereafter
executed and/or delivered by any Borrower or Obligor in connection with this
Agreement.
1.59 "Fixed Asset Availability" shall have the meaning given to such
term in the Working Capital Loan Agreement as in effect on the date hereof.
1.60 "Fixed Charge Coverage Ratio" shall mean, as to Parent and its
Subsidiaries, with respect to each trailing twelve (12) month period, the ratio
of (a) the amount equal to EBITDA of Parent its Subsidiaries for such period to
(b) the Fixed Charges of Parent and its Subsidiaries for such period. For the
period from October 2003 through and including August 2004, EBITDA and Fixed
Charges for any given month shall be as set forth on Schedule 9.17. For the
period from September 2004 through and including October 2004, EBITDA and Fixed
Charges shall be calculated on a pro forma basis consistent with the methodology
used in preparing Schedule 9.17. For each month thereafter, EBITDA and Fixed
Charges shall be
11
calculated based upon the financial statements required to be delivered
hereunder. In the event that, after the Closing Date, Parent restates its
results of operations for any month set forth on Schedule 9.17, EBITDA for such
months shall be recalculated to reflect such restatement on a basis reasonably
acceptable to Agent.
1.61 "Fixed Charges" shall mean, as to Parent and its Subsidiaries on a
consolidated basis with respect to any period, the sum of, without duplication,
(a) all Interest Expense (which for purposes of this definition shall not
include amortizing payments of deferred financing charges that do not constitute
interest), (b) all Capital Expenditures of Parent and its Subsidiaries (other
than (i) Capital Expenditures that are financed with proceeds of Indebtedness
for borrowed money except for the Revolving Loans, (ii) Capital Expenditures
that result in an increase in the Fixed Asset Availability and (iii) Capital
Expenditures that are made using the cash proceeds of Asset Sales, Equity
Issuance or Extraordinary Receipts, in each case as to Parent and its
Subsidiaries for such period and to the extent not included in the calculation
of EBITDA of Parent and its Subsidiaries for such period) to the extent
permitted hereunder, (c) cash dividends, repurchases or redemptions paid by
Parent and its Subsidiaries (to the extent permitted under this Agreement and
other than to Parent or Parent's Subsidiaries) during such period in respect of
Capital Stock, (d) all regularly scheduled (as determined at the beginning of
the respective period) payments or prepayments of the principal amount of any
Indebtedness for borrowed money (including, without limitation, the Loan and
excluding any Indebtedness arising under the Working Capital Loan Agreement) and
Indebtedness with respect to Capital Leases (and without duplicating in items
(a) and (b) of this definition, the interest component with respect to
Indebtedness under Capital Leases), (e) Federal, State, local and foreign income
taxes paid in cash, (f) all scheduled reductions in the Fixed Asset Availability
(or the components thereof), and (g) the royalty payments and management fees
paid in cash (in each case as to Parent and its Subsidiaries for such period and
to the extent not included in the calculation of EBITDA of Parent and its
Subsidiaries for such period).
1.62 "Funding Bank" shall have the meaning set forth in Section 3.3
hereof.
1.63 "GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time as set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board which are applicable to the
circumstances as of the date of determination consistently applied, except that,
for purposes of Section 9.17, GAAP shall be determined on the basis of such
principles in effect on the date hereof and consistent with those used in the
preparation of the most recent audited financial statements delivered to Agent
prior to the date hereof.
1.64 "Governmental Authority" shall mean any nation or government, any
state, province, or other political subdivision or department thereof, any
central bank (or similar monetary or regulatory authority) thereof, and any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
12
1.65 "Guarantors" shall mean, collectively, the Parent and any other
Person that hereafter guarantees the payment and performance of the Obligations
(together with their respective successors and assigns); each sometimes being
referred to herein individually as a "Guarantor".
1.66 "Hazardous Materials" shall mean any hazardous, toxic or dangerous
substances, materials and wastes, including hydrocarbons (including naturally
occurring or man-made petroleum and hydrocarbons), flammable explosives,
asbestos, urea formaldehyde insulation, radioactive materials, bio-hazardous
substances, polychlorinated biphenyls, pesticides, herbicides and any other kind
and/or type of pollutants or contaminants (including materials which include
hazardous constituents), sewage, sludge, industrial slag, solvents and/or any
other similar substances, materials, or wastes that are classified,
characterized or regulated as hazardous or toxic under Environmental Laws.
1.67 "Hedging Agreements" shall mean an agreement between any Borrower
or Guarantor and any Affiliate of Agent or any other financial institution
reasonably acceptable to Agent (such acceptance not to be unreasonably withheld)
that is a rate swap agreement, basis swap, forward rate agreement, commodity
swap, interest rate option, forward foreign exchange agreement, spot foreign
exchange agreement, rate cap agreement rate, floor agreement, rate collar
agreement, currency swap agreement, cross-currency rate swap agreement, currency
option, any other similar agreement (including any option to enter into any of
the foregoing or a master agreement for any of the foregoing together with all
supplements thereto) for the purpose of protecting against fluctuations in or
managing exposure with respect to interest or exchange rates, currency
valuations or commodity prices; sometimes being collectively referred to herein
as "Hedging Agreements".
1.68 "Hilco" shall have the meaning set forth in Section 4.1 hereof.
1.69 "Hose Claim Litigation" means the litigation relating to certain
water inlet hoses previously supplied by and through Borrowers and/or Guarantors
to certain customers, as more fully set forth in Schedule 8.6 to the Information
Certificate.
1.70 "Hose Claim Litigation Proceeds" means the proceeds of any
judgment, settlement or other consideration paid to any Borrower or Guarantor in
connection with the Hose Claim Litigation.
1.71 "Indebtedness" shall mean, with respect to any Person, any
liability, whether or not contingent, and without duplication, (a) in respect of
borrowed money (whether or not the recourse of the lender is to the whole of the
assets of such Person or only to a portion thereof) or evidenced by bonds,
notes, debentures or similar instruments; (b) representing the balance deferred
and unpaid of the purchase price of any property or services (except any such
balance that constitutes an account payable to a trade creditor (whether or not
an Affiliate) created, incurred, assumed or guaranteed by such Person in the
ordinary course of business of such Person in connection with obtaining goods,
materials or services that is not overdue by more than one hundred twenty (120)
days, unless the trade payable is being contested in good faith); (c) all
obligations as lessee under leases which have been, or should be, in accordance
with GAAP recorded as Capital Leases to the extent capitalized on the balance
sheet (i.e., not
13
including any interest expense component); (d) any contractual obligation,
contingent or otherwise, of such Person to pay or be liable for the payment of
any Indebtedness described in this definition of another Person, including,
without limitation, any such indebtedness, directly or indirectly guaranteed, or
any agreement to purchase, repurchase, or otherwise acquire such indebtedness,
obligation or liability or any security therefor, or to provide funds for the
payment or discharge thereof, or to maintain solvency, assets, level of income,
or other financial condition; (e) all obligations (other than obligations to
issue common Capital Stock) with respect to redeemable stock and redemption or
repurchase obligations under any Capital Stock or other equity securities issued
by such Person; (f) all non-contingent reimbursement obligations and other
non-contingent liabilities of such Person with respect to surety bonds (whether
bid, performance or otherwise); (g) all reimbursement obligations and other
liabilities of such Person with respect to letters of credit, banker's
acceptances, drafts or similar documents or instruments issued for such Person's
account; (h) all indebtedness of such Person in respect of indebtedness of
another Person for borrowed money or indebtedness of another Person otherwise
described in this definition which is secured by any consensual lien, security
interest, collateral assignment, conditional sale, mortgage, deed of trust, or
other encumbrance on any asset of such Person, whether or not such obligations,
liabilities or indebtedness are assumed by or are a personal liability of such
Person, all as of such time; (i) all net obligations, liabilities and
indebtedness of such Person (marked to market) arising under Hedging Agreements;
(j) all obligations owed by such Person under License Agreements with respect to
non-refundable, advance or minimum guarantee royalty payments; and (k) the
principal portion of all rental obligations of such Person under any synthetic
lease or similar off-balance sheet financing where such transaction is
considered to be borrowed money for tax purposes but is classified as an
operating lease in accordance with GAAP.
1.72 "Indemnitee" shall have the meaning set forth in Section 11.5
hereof.
1.73 "Information Certificate" shall mean the Information Certificate
of Borrowers and Guarantors constituting Exhibit B to the Working Capital Loan
Agreement on the date hereof.
1.74 "Insulated Wire Division" means the business and operations of the
Borrowers and Guarantors related to the manufacture and sale of insulated wire
products as conducted on the date hereof by the Subsidiaries of Parent named in
Schedule 1.74 and as permitted to be conducted pursuant to the terms of Section
9.15.
1.75 "Intellectual Property" shall mean, as to each Borrower and
Guarantor, such Borrower's and Guarantor's now owned and hereafter arising or
acquired: patents, patent rights, patent applications, copyrights, works which
are the subject matter of copyrights, copyright applications, copyright
registrations, trademarks, servicemarks, trade names, trade styles, trademark
and service xxxx applications, and licenses and rights to use any of the
foregoing and all applications, registrations and recordings relating to any of
the foregoing as may be filed in the United States Copyright Office, the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof, any political subdivision thereof or in any
other country or jurisdiction, together with all rights and privileges arising
under applicable law with respect to any Borrower's or Guarantor's use of any of
the
14
foregoing; all extensions, renewals, reissues, divisions, continuations, and
continuations-in-part of any of the foregoing; all rights to xxx for past,
present and future infringement of any of the foregoing; inventions, trade
secrets, formulae, processes, compounds, drawings, designs, blueprints, surveys,
reports, manuals, and operating standards; goodwill (including any goodwill
associated with any trademark or servicemark, or the license of any trademark or
servicemark); customer and other lists in whatever form maintained; trade secret
rights, copyright rights, rights in works of authorship, domain names and domain
name registration; software and contract rights relating to computer software
programs, in whatever form created or maintained.
1.76 "Interest Expense" shall mean, for any period, as to Parent and
its Subsidiaries, as determined in accordance with GAAP, the total interest
expense of Parent and its Subsidiaries, whether paid or accrued during such
period (including the interest component of Capital Leases for such period),
including, without limitation, discounts in connection with the sale of any
Accounts permitted hereunder, bank fees, commissions, discounts and other fees
and charges owed with respect to letters of credit, banker's acceptances or
similar instruments and payments made pursuant to Hedging Agreements covering
interest rate risk, but excluding any such payment paid in property other than
cash and any other interest expense not payable in cash.
1.77 "Interest Period" shall mean for any Eurodollar Rate Loan, a
period of approximately one (1), two (2), three (3), six (6), nine (9) or twelve
(12) months duration as any Borrower (or Administrative Borrower Representative
on behalf of such Borrower) may elect, the exact duration to be determined in
accordance with the customary practice in the applicable Eurodollar Rate market;
provided, however, that (a) if any Interest Period would end on a day that is
not a Business Day, such Interest Period shall be extended (subject to clauses
(c), (d) and (e) below) to the next succeeding Business Day, (b) interest shall
accrue at the applicable rate based upon the Eurodollar Rate from and including
the first day of each Interest Period to, but excluding, the day on which any
Interest Period expires, (c) any Interest Period that would end on a day that is
not a Business Day shall be extended to the next succeeding Business Day unless
such Business Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Business Day, (d) with respect to an
Interest Period that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period), the Interest Period shall end on the last
Business Day of the calendar month that is one (1), two (2), three (3), six (6),
nine (9) or twelve (12) months after the date on which the Interest Period
began, as applicable; and (e) such Borrower (or Administrative Borrower
Representative on behalf of such Borrower) may not elect an Interest Period
which will end after the Final Maturity Date.
1.78 "Interest Rate" shall mean,
(a) Subject to clause (b) of this definition below:
(i) as to Prime Rate Loans, a rate equal to the Prime Rate
plus 3.50%; and
(ii) as to Eurodollar Rate Loans, a rate equal to the Adjusted
Eurodollar Rate (in each case, based on the Eurodollar Rate applicable for the
Interest Period
15
selected by a Borrower, or by Administrative Borrower Representative on behalf
of such Borrower, as in effect three (3) Business Days after the date of receipt
by Agent of the request of or on behalf of such Borrower for such Eurodollar
Rate Loans in accordance with the terms hereof, whether such rate is higher or
lower than any rate previously quoted to any Borrower or Guarantor) plus 6.00%.
(b) Notwithstanding anything to the contrary contained in
clause (a) of this definition, the Interest Rate shall mean the rate of two (2%)
percent per annum in excess of the sum of the Prime Rate plus 3.50% as to Prime
Rate Loans and the rate of two (2%) percent per annum in excess of the sum of
the Adjusted Eurodollar Rate plus 6.00% as to Eurodollar Rate Loans, at Agent's
option, without notice, either (i) for the period on and after the Final
Maturity Date until such time as all Obligations are indefeasibly paid and
satisfied in full in immediately available funds, or (ii) for the period from
and after the date of the occurrence of any Event of Default, and for so long as
such Event of Default is continuing.
1.79 "Inventory" shall mean, as to each Borrower and Guarantor, all of
such Borrower's and Guarantor's now owned and hereafter existing or acquired
goods, wherever located, which (a) are leased by such Borrower or Guarantor as
lessor; (b) are held by such Borrower or Guarantor for sale or lease or to be
furnished under a contract of service; (c) are furnished by such Borrower or
Guarantor under a contract of service; or (d) consist of raw materials, work in
process, finished goods or materials used or consumed in its business.
1.80 "Investment Property Control Agreement" shall mean an agreement in
writing, in the form attached as Exhibit E to the Working Capital Loan Agreement
as in effect on the date hereof or such other agreement in form and substance
reasonably satisfactory to Agent, by and among Agent, Working Capital Agent, any
Borrower or Guarantor (as the case may be) and any securities intermediary,
commodity intermediary or other person who has custody, control or possession of
any investment property of such Borrower or Guarantor acknowledging that such
securities intermediary, commodity intermediary or other person has custody,
control or possession of such investment property on behalf of Working Capital
Agent or Agent, that it will comply with entitlement orders originated by
Working Capital Agent or Agent with respect to such investment property, or
other instructions of Working Capital Agent or Agent, and has such other terms
and conditions as Agent may reasonably require.
1.81 "Lender Register" shall have the meaning set forth in Section
13.7(b).
1.82 "Lenders" shall mean the financial institutions who are
signatories hereto as Lenders and other persons made a party to this Agreement
as a Lender in accordance with Section 13.7 hereof, and their respective
successors and assigns; each sometimes being referred to herein individually as
a "Lender".
1.83 "License Agreements" shall have the meaning set forth in Section
8.11 hereof.
1.84 "Loan" shall mean the term loan made by the Lenders to the
Borrowers on the date hereof pursuant to Section 2.1 hereof.
16
1.85 "Material Adverse Effect" shall mean a material adverse effect on
(a) the financial condition, business, performance, operations or prospects of
Borrowers, Guarantors and their Subsidiaries taken as a whole; (b) the legality,
validity or enforceability of this Agreement or any of the other Financing
Agreements; (c) the legality, validity, enforceability, perfection or priority
of the security interests and liens of Agent upon the Collateral; (d) the
Collateral or its value; (e) the ability of any Borrower to repay the
Obligations or of any Borrower to perform its obligations under this Agreement
or any of the other Financing Agreements as and when to be performed; or (f) the
ability of Agent or any Lender to enforce the Obligations or realize upon the
Collateral or otherwise with respect to the rights and remedies of Agent and
Lenders under this Agreement or any of the other Financing Agreements.
1.86 "Material Contract" shall mean any contract or other agreement
(other than the Financing Agreements), whether written or oral, to which any
Borrower or Guarantor is a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto would have a Material
Adverse Effect.
1.87 "Monthly Average Excess Availability" shall have the meaning given
to such term in the Working Capital Loan Agreement as in effect on the date
hereof.
1.88 "Mortgages" shall mean, individually and collectively, each of the
mortgages, deeds of trust and similar instruments, each dated of event date
herewith (as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced): granted in favor of
Agent by the applicable Borrower with respect to the Real Property and related
assets of such Borrower as described on Schedule 1.88.
1.89 "Multiemployer Plan" shall mean a "multi-employer plan" as defined
in Section 4001(a)(3) of ERISA which is or was at any time during the current
year or the immediately preceding six (6) years contributed to by any Borrower,
Guarantor or any ERISA Affiliate.
1.90 "Net Cash Proceeds" means with respect to any Asset Sale (other
than Asset Sales permitted by Sections 9.7(b)(i), 9.7(b)(iii) through (b)(viii),
inclusive, 9.7(b)(x) through (b)(xiii), inclusive, and 9.7(b)(xv)), Equity
Issuance, Debt Issuance or Extraordinary Receipts by any Person, the cash
proceeds received (directly or indirectly) from time to time (whether as initial
consideration or through the payment or disposition of deferred consideration)
by or on behalf of any Borrower or Guarantor in respect of such Asset Sale,
Equity Issuance (other than Equity Issuances permitted by Sections 9.7(b)(xi)
and 9.7(b)(xiii) and by Section 9.10(c)), Debt Issuance or Extraordinary
Receipts, after deducting therefrom only (but in each case only to the extent
any such amounts are not payable to an Affiliate of such Person (except as
permitted by this Agreement) and to the extent properly attributable to such
transaction or to the asset that is the subject thereof):
(a) in the case of any Asset Sale, (a) the reasonable expenses
incurred by such Person directly related to such Asset Sale, (b) brokerage
costs, fees, or commissions incurred by such Person directly related to such
Asset Sale, (c) the amounts paid from such proceeds at the time of the sale
thereof in respect of any Indebtedness (other than the Obligations) secured by
any security interest or lien permitted by Section 9.8 hereof or otherwise
17
hereunder on the asset that is the subject of such Asset Sale, (d) transfer
taxes paid or payable within twelve (12) months to any taxing authorities by
such Person in connection therewith and (e) net income taxes to be paid in
connection with such Asset Sale (after taking into account any tax credits or
deductions and any tax sharing arrangements).
(b) in the case of any Equity Issuance or Debt Issuance, (a)
reasonable expenses directly related to such Equity Issuance or Debt Issuance,
(b) reasonable underwriting or brokerage costs, fees and commissions directly
related to such Equity Issuance or Debt Issuance, (c) transfer taxes paid or
payable within twelve (12) months to any taxing authorities by such Person in
connection therewith and (d) net income taxes to be paid in connection with such
Equity Issuance or Debt Issuance (after taking into account any tax credits or
deductions and any tax sharing arrangements), and
(c) in the case of any Extraordinary Receipts, (a) reasonable
expenses directly related to such Extraordinary Receipts and collection or proof
thereof, (b) the amounts paid from such proceeds at the time of the receipt
thereof in respect of any Indebtedness (other than the Obligations) secured by
any security interest or lien permitted by Section 9.8 hereof or otherwise
permitted hereunder on the asset with respect to which such Extraordinary
Receipts were delivered, (c) transfer taxes paid or payable within twelve (12)
months to any taxing authorities by such Person in connection therewith and (d)
net income taxes to be paid in connection with such Extraordinary Receipts
(after taking into account any tax credits or deductions and any tax sharing
arrangements),
1.91 "New Lending Office" shall have the meaning set forth in Section
6.11(d) hereof.
1.92 "New Notes" shall mean, collectively, the 10% Secured Senior
Subordinated Notes in the original principal amount of $75,000,000, issued by
Parent pursuant to the New Notes Indenture as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced (to the extent not prohibited by this Agreement and the New Notes
Intercreditor Agreement).
1.93 "New Notes Indenture" shall mean the Indenture dated on or about
the date hereof among Parent, the New Notes Trustee and certain Subsidiaries of
Parent, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced (to the extent not
prohibited by this Agreement and the New Notes Intercreditor agreement).
1.94 "New Notes Intercreditor Agreement" shall mean the Intercreditor
and Subordination Agreement, dated of even date herewith, executed by and among
Agent, Working Capital Agent and the New Notes Trustee, as the same now exists
or may hereafter be amended, modified, supplemented, extended, renewed, restated
or replaced.
1.95 "New Notes Trustee" shall mean BNY Midwest Trust Company, in its
capacity as trustee under the New Notes Indenture for the holders of the New
Notes and any successor, replacement or additional trustee under the New Notes
Indenture, and their respective successors and assigns.
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1.96 "Non-Consenting Lender" shall have the meaning set forth in
Section 11.3 hereof.
1.97 "Non-Restricted Asset" shall have the meaning set forth in Section
5.1 hereof.
1.98 "Non-U.S. Lender" shall have the meaning set forth in Section
6.11(d) hereof.
1.99 "Obligations" shall mean the Loan and all other obligations,
liabilities and indebtedness of every kind, nature and description owing by any
or all of Borrowers to Agent or any Lender and/or any of their Affiliates,
including principal, interest, charges, fees, costs and expenses, however
evidenced, whether as principal, surety, endorser, guarantor or otherwise,
arising under this Agreement or any of the other Financing Agreements, whether
now existing or hereafter arising, whether arising before, during or after the
initial or any renewal term of this Agreement or after the commencement of any
case with respect to such Borrower under the United States Bankruptcy Code or
any similar statute (including the payment of interest and other amounts which
would accrue and become due but for the commencement of such case, whether or
not such amounts are allowed or allowable in whole or in part in such case),
whether direct or indirect, absolute or contingent, joint or several, due or not
due, primary or secondary, liquidated or unliquidated, or secured or unsecured.
1.100 "Obligor" shall mean any guarantor, endorser, acceptor, surety or
other person liable on or with respect to the Obligations or who is the owner of
any property which is security for the Obligations (including, without
limitation, Guarantors), other than Borrowers.
1.101 "Omega" shall mean Omega Wire, Inc., a Delaware corporation, and
its successors and assigns permitted hereunder.
1.102 "Other Taxes" shall have the meaning set forth in Section 6.11(b)
hereof.
1.103 "OWI" shall mean OWI Corporation, a
New York corporation, and its
successors and assigns permitted hereunder.
1.104 "Parent" shall mean International Wire Group, Inc., a Delaware
corporation, and its successors and assigns permitted hereunder.
1.105 "Participant" shall mean any financial institution that acquires
and holds a participation in the interest of any Lender in the Loan in
conformity with the provisions of Section 13.7 of this Agreement governing
participations.
1.106 "Permits" shall have the meaning set forth in Section 8.7(b)
hereof.
1.107 "Permitted Acquisition" shall have the meaning set forth in
Section 9.10(n).
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1.108 "Permitted Foreign Subsidiary Credit Facility" shall have the
meaning set forth in Section 9.9 hereof.
1.109 "Permitted Holders" shall mean the persons listed on Schedule
1.109 hereto and their respective successors and assigns.
1.110 "Person" or "person" shall mean any individual, sole
proprietorship, partnership, corporation (including any corporation which elects
subchapter S status under the Code), limited liability company, limited
liability partnership, business trust, unincorporated association, joint stock
corporation, trust, joint venture or other entity or any government or any
agency or instrumentality or political subdivision thereof.
1.111 "Plan" means an employee benefit plan (as defined in Section 3(3)
of ERISA and as covered by Title IV or ERISA) which any Borrower, Guarantor or
ERISA Affiliate sponsors, maintains, or to which it makes, is making, or is
obligated, or has at any time within the preceding six (6) plan years been
obligated, to make contributions, including Multiemployer Plans.
1.112 "Prime Rate" shall mean the rate of interest publicly announced
from time to time by JPMorgan Chase Bank in
New York City (or any other
commercial bank selected by the Term Agent and reasonably acceptable to the
Borrower) as its reference rate, base rate or prime rate, provided that at no
time shall the Prime Rate be less than 4.00%.
1.113 "Prime Rate Loans" shall mean the Loan or portion thereof on
which interest is payable based on the Prime Rate in accordance with the terms
thereof.
1.114 "Pro Forma Cost Savings" means, with respect to any period for
which EBITDA is being calculated hereunder, the reduction in net costs and
related adjustments that (a) were directly attributable to a Permitted
Acquisition that occurred during such period, as calculated on a basis that is
consistent with Regulation S-X of the Securities and Exchange Commission as in
effect on the date hereof, or (b) were actually implemented during such period
with respect to the Person or business that was the subject of a Permitted
Acquisition, or are reasonably probable of being implemented with twelve months
after the consummation of the Permitted Acquisition, are supportable and
quantifiable based upon the underlying accounting records of such Person or
business, or binding agreements or other commitments of third parties, or such
other support and verification acceptable to the Agent, and relate to headcount
reductions, cost reductions for material, supplies and services, or plant
consolidations. The aggregate amount of the Pro Forma Cost Savings included in
the calculation of EBITDA with respect to all Permitted Acquisitions after the
date of this Agreement shall not exceed $5,000,000. All Pro Forma Cost Savings
shall be set forth in calculations (the "Cost Savings Budget") provided in
writing to the Agent prior to the consummation of the Permitted Acquisition,
which describe the specific actions taken or to be taken, the net cost savings
achieved or to be achieved, the time period within which such cost savings are
projected to be realized, and the reasons that savings are considered to be
probable.
1.115 "Projections" shall having the meaning set forth in Section 9.6
hereof.
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1.116 "Pro Rata Share" shall mean as to any Lender, the fraction
(expressed as a percentage) the numerator of which is such Lender's Commitment
and the denominator of which is the Total Commitments of Lenders, as adjusted
from time to time in accordance with the provisions of Section 13.7 hereof;
provided, that, if the Commitments have been terminated, the numerator shall be
the unpaid amount of such Lender's portion of the Loan and the denominator shall
be the aggregate amount of the unpaid Loan.
1.117 "Provision for Taxes" shall mean an amount equal to all taxes
imposed on or measured by net income, whether Federal, State, Provincial, county
or local, and whether foreign or domestic, that are paid or payable by any
Person in respect of any period in accordance with GAAP.
1.118 "Real Property" shall mean all now owned and hereafter acquired
real property of each Borrower and Guarantor, including leasehold interests,
together with all buildings, structures, and other improvements located thereon
and all licenses, easements and appurtenances relating thereto, wherever
located, including the real property and related assets more particularly
described in the Mortgages.
1.119 "Receivables" shall mean all of the following now owned or
hereafter arising or acquired property of each Borrower and Guarantor: (a) all
Accounts; (b) all interest, fees, late charges, penalties, collection fees and
other amounts due or to become due or otherwise payable in connection with any
Account; (c) all payment intangibles of such Borrower or Guarantor; (d) letters
of credit, indemnities, guarantees, security or other deposits and proceeds
thereof issued payable to any Borrower or Guarantor or otherwise in favor of or
delivered to any Borrower or Guarantor in connection with any Account; or (e)
all other accounts, contract rights, chattel paper, instruments, notes, general
intangibles and other forms of obligations owing to any Borrower or Guarantor,
whether from the sale and lease of goods or other property, licensing of any
property (including Intellectual Property or other general intangibles),
rendition of services or from loans or advances by any Borrower or Guarantor or
to or for the benefit of any third person (including loans or advances to any
Affiliates or Subsidiaries of any Borrower or Guarantor) or otherwise associated
with any Accounts, Inventory or general intangibles of any Borrower or Guarantor
(including, without limitation, choses in action, causes of action, tax refunds,
tax refund claims, any funds which may become payable to any Borrower or
Guarantor in connection with the termination of any Plan or other employee
benefit plan and any other amounts payable to any Borrower or Guarantor from any
Plan or other employee benefit plan, rights and claims against carriers and
shippers, rights to indemnification, business interruption insurance and
proceeds thereof, casualty or any similar types of insurance and any proceeds
thereof and proceeds of insurance covering the lives of employees on which any
Borrower or Guarantor is a beneficiary).
1.120 "Records" shall mean, as to each Borrower and Guarantor, all of
such Borrower's and Guarantor's present and future books of account of every
kind or nature, purchase and sale agreements, invoices, ledger cards, bills of
lading and other shipping evidence, statements, correspondence, memoranda,
credit files and other data relating to the Collateral or any account debtor,
together with the tapes, disks, diskettes and other data and software storage
media and devices, file cabinets or containers in or on which the foregoing are
stored (including
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any rights of any Borrower or Guarantor with respect to the foregoing maintained
with or by any other person).
1.121 "Reel Sale Division" means the business and operations of the
Borrowers and Guarantors and their Subsidiaries related to the manufacture and
sale of bare and tin-plated copper wire products as conducted on the date hereof
by the Subsidiaries of Parent named in Schedule 1.121 and as permitted to be
conducted pursuant to Section 9.15.
1.122 "Register" shall have the meaning set forth in Section 13.7
hereof.
1.123 "Report" shall have the meaning set forth in Section 12.9 hereof.
1.124 "Required Lenders" shall mean, at any time, those Lenders whose
Pro Rata Shares aggregate more than fifty percent (50%) percent of the aggregate
of the Commitments of all Lenders, or if the Commitments shall have been
terminated, Lenders to whom more than fifty percent (50%) of the then
outstanding Obligations are owing.
1.125 "Resources" shall mean IWG Resources, LLC, a Nevada limited
liability company, and its successors and assigns permitted hereunder.
1.126 "Restricted Assets" shall have the meaning set forth in Section
5.1 hereof.
1.127 "Rome" shall mean International Wire Rome Operations, Inc., a
Delaware corporation, and its successors and assigns permitted hereunder.
1.128 "Silver Point" shall mean Silver Point Finance, LLC, a Delaware
limited liability company, in its individual capacity, and its successors and
assigns.
1.129 "Solvent" shall mean, at any time with respect to any Person,
that at such time such Person (a) is able to pay its debts as they mature and
has (and has a reasonable basis to believe it will continue to have) sufficient
capital (and not unreasonably small capital) to carry on its business consistent
with its practices as of the date hereof, and (b) the assets and properties of
such Person at a fair valuation (and including as assets for this purpose at a
fair valuation all rights of subrogation, contribution or indemnification
arising pursuant to any guarantees given by such Person) are greater than the
Indebtedness of such Person, and including subordinated and contingent
liabilities computed at the amount which, such person has a reasonable basis to
believe, represents an amount which can reasonably be expected to become an
actual or matured liability (and including as to contingent liabilities arising
pursuant to any guarantee the face amount of such liability as reduced to
reflect the probability of it becoming a matured liability).
1.130 "Special Agent Advances" shall have the meaning set forth in
Section 12.10 hereof.
1.131 "Specified Sale" shall have the meaning set forth in that certain
letter agreement re: Specified Sale executed concurrently herewith by and among
Borrowers, Guarantors, Agent and Lenders.
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1.132 "Subsidiary" or "subsidiary" shall mean, with respect to any
Person, any corporation, limited liability company, limited liability
partnership or other limited or general partnership, trust, association or other
business entity of which an aggregate of at least a majority of the outstanding
Capital Stock or other interests entitled to vote in the election of the board
of directors of such corporation (irrespective of whether, at the time, Capital
Stock of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency), managers, trustees
or other controlling persons, or an equivalent controlling interest therein, of
such Person is, at the time, directly or indirectly, owned by such Person and/or
one or more subsidiaries of such Person.
1.133 "Target" shall have the meaning set forth in Section 9.10(n)
hereof.
1.134 "Taxes" shall have the meaning set forth in Section 6.11(a)
hereof.
1.135 "Term Loan Intercreditor Agreement" shall mean the Intercreditor
Agreement, dated of even date herewith, executed by and between Agent and
Working Capital Agent, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
1.136 "Total Commitments" shall mean the amount of $30,000,000.
1.137 "Transferee" shall have the meaning set forth in Section 6.11(a)
hereof.
1.138 "Trigger Event" shall mean, as of any date of determination, (a)
the occurrence and continuance of a Default or Event of Default, (b) the Average
Thirty Day Excess Availability being less than $20,000,000, (c) the Excess
Availability on such date being less than $20,000,000 or (d) a Consolidated
Leverage Ratio of more than 3.5:1.
1.139 "UCC" shall mean the Uniform Commercial Code as in effect in the
State of
New York, and any successor statute, as in effect from time to time
(except that terms used herein which are defined in the Uniform Commercial Code
as in effect in the State of New York on the date hereof shall continue to have
the same meaning notwithstanding any replacement or amendment of such statute
except as Agent may otherwise determine).
1.140 "U.S. Person" shall have the meaning set forth in Section 6.11(g)
hereof.
1.141 "Voting Stock" shall mean with respect to any Person, one (1) or
more classes of Capital Stock of such Person having general voting powers to
elect at least a majority of the board of directors, managers or trustees of
such Person, irrespective of whether at the time Capital Stock of any other
class or classes have or might have voting power by reason of the happening of
any contingency.
1.142 "Working Capital Agent" shall mean Congress, in its capacity as
agent acting for and on behalf of Working Capital Lenders pursuant to the
Working Capital Documents and any replacement or successor agent thereunder.
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1.143 "Working Capital Debt" shall mean all obligations, liabilities
and indebtedness of every kind, nature and description now or at any time
hereafter owing by Borrowers and Guarantors to Working Capital Agent and Working
Capital Lenders, including principal, interest, charges, fees, premiums,
indemnities, costs and expenses, however evidenced, whether as principal,
surety, endorser, guarantor or otherwise, arising under or in connection with
the Working Capital Loan Documents.
1.144 "Working Capital Lenders" shall mean each Person that is now or
hereafter party to the Working Capital Loan Documents as a Lender thereunder.
1.145 "Working Capital Loan Agreement" shall mean the
Loan and Security
Agreement, dated on or about the date hereof, by and among Working Capital
Agent, Working Capital Lenders, Borrowers and Guarantors, as the same now exists
or may hereafter be amended, modified, supplemented, extended, renewed, restated
or replaced.
1.146 "Working Capital Loan Documents" shall mean, collectively, the
following (as the same now exist or, except as otherwise expressly provided
herein, may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced): (a) the Working Capital Loan Agreement; (b) all notes,
guarantees, security agreements, deposit account control agreements, investment
property control agreements and intercreditor agreements, in each case executed
in connection with the Working Capital Loan Agreement; and (c) all other
agreements, documents and instruments at any time executed and/or delivered by
any Borrower or Guarantor with, to or in favor of Working Capital Agent or
Working Capital Loan Lenders in connection therewith or related thereto;
sometimes being referred to herein individually as a "Working Capital Loan
Document".
1.147 "Working Capital Loan Termination Date" shall have the meaning
given to such term in the Term Loan Intercreditor Agreement.
1.148 "Working Capital Loans" shall mean the loans now or hereafter
made by or on behalf of any Lender or by the Working Capital Agent for the
account of any Lender on a revolving basis pursuant to the Working Capital
Loan
and Security Agreement (involving advances, repayments and readvances).
1.149 "wholly-owned Subsidiary" shall mean, as to any Person, any
Subsidiary of which such Person owns, directly or indirectly, all of the Capital
Stock of such Subsidiary other than directors' qualifying shares or any shares
held by nominees to the extent required to be held under applicable law.
1.150 "Wire Technologies" shall mean Wire Technologies, Inc., an
Indiana corporation, and its successors and assigns permitted hereunder.
24
SECTION 2. CREDIT FACILITY
2.1. Loan.
(a) Subject to and upon the terms and conditions and relying
on the representations and warranties contained herein, each Lender severally
(and not jointly) agrees to make its Pro Rata Share of the Loan to Borrowers on
the Closing Date, in the original principal amount equal to each such Lender's
Commitment.
(b) Commitments. Each Lender's Commitment shall terminate at
5:00 p.m. (New York City time) on October 20, 2004.
2.2. Borrowing Procedure. The Loan shall be made by an irrevocable
written request by Administrative Borrower Representative delivered to Agent no
later than 10:00 a.m. (New York time) on the Closing Date. Each Lender shall
make the amount of such Lender's Pro Rata Share of the Loan available to Agent
in immediately available funds, to Agent's Account, not later than 1:00 p.m.
(New York time) on the Closing Date. After Agent's receipt of the proceeds of
the Loan, Agent shall make the proceeds thereof available to Borrower on the
Closing Date by transferring immediately available funds equal to such proceeds
received by Agent to the account designated in writing by Administrative
Borrower Representative; provided, however, that Agent shall not request any
Lender to make, and no Lender shall have the obligation to make, the Loan if
Agent shall have actual knowledge that one or more of the applicable conditions
precedent set forth in Section 4 will not be satisfied on the Closing Date
unless such condition has been waived.
2.3. Securitization. Borrowers hereby acknowledge that each Lender and
each of its Affiliates and Related Funds may sell or securitize the Loan (a
"Securitization") through the pledge of the Loan as collateral security for
loans to such Lender or its Affiliates or Related Funds or through the sale of
the Loan or the issuance of direct or indirect interests in the Loan, which
loans to such Lender or its Affiliates or Related Funds or direct or indirect
interests will be rated by Xxxxx'x, S&P's or one or more other rating agencies
(the "Rating Agencies"). Borrowers agree to cooperate with such Lenders and
their Affiliates and Related Funds to effect the Securitization by (a) executing
such additional documents, as reasonably requested by such Lenders in connection
with the Securitization, provided that (i) any such additional documentation
does not, in the aggregate, impose more than immaterial additional costs or
liabilities on Borrowers (it being understood that Borrowers shall not be
responsible for any additional costs incurred in connection with obtaining a
rating from any of the Ratings Agencies), and (ii) any such additional
documentation does not, in the aggregate, adversely affect the rights, or
increase the obligations, of Borrowers under the Loan Documents or change or
affect in a manner adverse to Borrowers the financial terms of the Loan, (b)
providing such written information as may be reasonably requested by such
Lenders in connection with the rating of the Loan or the Securitization,
provided that (i) any material, non-public information regarding Parent,
Borrowers and their Subsidiaries shall be provided on a confidential basis
subject to the terms of Section 13.5, and (ii) no member of management (or any
representative thereof) of Parent, Borrowers or any Subsidiary thereof shall be
required to appear before, or make a presentation to, any Rating Agency in
connection with any such securitization, and (c) providing in connection with
any rating of the Loan a certificate (i) agreeing to indemnify such Lenders and
any of their Affiliates and Related Funds for any losses, claims, damages or
liabilities (the "Securitization Liabilities") to which such Lenders or any of
their Affiliates or Related Funds may become subject insofar as the
Securitization Liabilities arise out of or are
25
based upon a breach of the representation and warranty contained in Section
8.17, and (ii) agreeing to reimburse such Lenders and their Affiliates and
Related Funds for any reasonable legal (limited to fees and expenses of one (1)
counsel to Agent and the Lenders and their Affiliates and Related Funds) or
other expenses reasonably incurred by such Persons in connection with defending
the Securitization Liabilities. Notwithstanding the foregoing, this Section 2.3
is subject to Agent's and the Required Lenders' rights and obligations under
Sections 11.3 and 13.7 hereof in all respects and, in the event of a direct
conflict between this Section 2.3 and any provision of Section 11.3 and 13.7
with respect to Agent's and the Required Lenders' rights and obligations, it is
the intent of the parties that the applicable provision of Sections 11.3 and
13.7 shall control and govern.
SECTION 3. INTEREST AND FEES
3.1. Interest.
(a) Borrowers shall pay to Agent, for the benefit of Lenders,
interest on the outstanding principal amount of the Loans at the Interest Rate.
All interest accruing hereunder on and after the date of any Event of Default or
termination hereof shall be payable on demand.
(b) Administrative Borrower Representative, on behalf of
Borrowers, may from time to time request Eurodollar Rate Loans or may request
that Prime Rate Loans be converted to Eurodollar Rate Loans or that any existing
Eurodollar Rate Loans continue for an additional Interest Period. Such request
from Administrative Borrower Representative shall specify the amount of the
Eurodollar Rate Loans or the amount of the Prime Rate Loans to be converted to
Eurodollar Rate Loans or the amount of the Eurodollar Rate Loans to be continued
(subject to the limits set forth below) and the Interest Period to be applicable
to such Eurodollar Rate Loans. Subject to the terms and conditions contained
herein, three (3) Business Days after receipt by Agent of such a request from
Administrative Borrower Representative, such Eurodollar Rate Loans shall be made
or Prime Rate Loans shall be converted to Eurodollar Rate Loans or such
Eurodollar Rate Loans shall continue, as the case may be, provided, that (i) no
Default or Event of Default shall exist or have occurred and be continuing, (ii)
Administrative Borrower Representative shall have complied with such customary
procedures as are established by Agent and specified by Agent to Administrative
Borrower Representative from time to time for requests by Borrowers for
Eurodollar Rate Loans, (iii) no more than four (4) Interest Periods may be in
effect at any one time, (iv) the aggregate amount of the Eurodollar Rate Loans
must be in an amount not less than $1,000,000 or an integral multiple of
$100,000 in excess thereof, and (v) Agent and each Lender shall have determined
that the Interest Period or Adjusted Eurodollar Rate is available to Agent and
such Lender and can be readily determined as of the date of the request for such
Eurodollar Rate Loan by such Borrower. Any request by Administrative Borrower
Representative for Eurodollar Rate Loans or to convert Prime Rate Loans to
Eurodollar Rate Loans or to continue any existing Eurodollar Rate Loans shall be
irrevocable. Notwithstanding anything to the contrary contained herein, Agent
and Lenders shall not be required to purchase United States Dollar deposits in
the London interbank market or other applicable Eurodollar Rate market to fund
any Eurodollar Rate Loans, but the provisions hereof
26
shall be deemed to apply as if Agent and Lenders had purchased such deposits to
fund the Eurodollar Rate Loans.
(c) Any Eurodollar Rate Loans shall automatically convert to
Prime Rate Loans upon the last day of the applicable Interest Period, unless
Agent has received and approved a request to continue such Eurodollar Rate Loan
at least three (3) Business Days prior to such last day in accordance with the
terms hereof. Any Eurodollar Rate Loans shall, at Agent's option, upon notice by
Agent to Administrative Borrower Representative, be subsequently converted to
Prime Rate Loans in the event that this Agreement shall terminate or not be
renewed. Borrowers shall pay to Agent, for the benefit of Lenders, upon demand
by Agent (or Agent may, at its option, charge any loan account of any Borrower)
any amounts required to compensate any Lender or Participant for any loss
(including loss of anticipated profits), cost or expense (other than any loss,
cost or expense in respect of Taxes, the indemnification for which shall be
governed by Sections 6.4(b) and 6.11 hereof) incurred by such person, as a
result of the conversion of Eurodollar Rate Loans to Prime Rate Loans pursuant
to any of the foregoing.
(d) Interest shall be payable by Borrowers to Agent, for the
account of Lenders, monthly in arrears not later than the first day of each
calendar month and shall be calculated on the basis of a three hundred sixty
(360) day year and actual days elapsed. The interest rate on non-contingent
Obligations (other than Eurodollar Rate Loans) shall increase or decrease by an
amount equal to each increase or decrease in the Prime Rate effective on the
first day of the month after any change in such Prime Rate is announced based on
the Prime Rate in effect on the last day of the month in which any such change
occurs. In no event shall charges constituting interest payable by Borrowers to
Agent and Lenders exceed the maximum amount or the rate permitted under any
applicable law or regulation, and if any such part or provision of this
Agreement is in contravention of any such law or regulation, such part or
provision shall be deemed amended to conform thereto.
3.2. Fees. Borrowers agree to pay to Agent on the Closing Date, for the
account of the Lenders, a closing fee in the amount of $300,000, which fee is
fully earned on the Closing Date and non-refundable.
3.3. Changes in Laws and Increased Costs of Loans.
(a) If after the date hereof, either (i) any change in, or in
the interpretation of, any law or regulation is introduced, including, without
limitation, with respect to reserve requirements, applicable to Lender or any
banking or financial institution from whom any Lender borrows funds or obtains
credit (a "Funding Bank"), or (ii) a Funding Bank or any Lender complies with
any future guideline or request from any central bank or other Governmental
Authority or (iii) a Funding Bank or any Lender determines in good faith that
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof has or would
have the effect described below, or a Funding Bank or any Lender complies with
any request or directive regarding capital adequacy (whether or not having the
force of law)
27
of any such authority, central bank or comparable agency, and in the case of any
event set forth in this clause (iii), such adoption, change or compliance has or
would have the direct or indirect effect of reducing the rate of return on any
Lender's capital as a consequence of its obligations hereunder to a level below
that which Lender could have achieved but for such adoption, change or
compliance (taking into consideration the Funding Bank's or Lender's policies
with respect to capital adequacy) by an amount deemed in good faith by such
Lender to be material, and the result of any of the foregoing events described
in clauses (i), (ii) or (iii) is or results in an increase in the cost to any
Lender of funding or maintaining the Loans, then Borrowers and Guarantors shall
from time to time upon demand by Agent (accompanied by a certificate of such
Lender as to the amount of such increased costs) pay to Agent additional amounts
sufficient to indemnify Lenders against such increased cost (other than with
respect to any such increased costs relating to Taxes, the indemnification for
which shall be governed by Sections 6.4(b) and 6.11 hereof). A certificate as to
the amount of such increased cost shall be submitted to Administrative Borrower
Representative by Agent and shall be conclusive, absent manifest error.
(b) If prior to the first day of any Interest Period, (i)
Agent shall have determined in good faith (which determination shall be
conclusive and binding upon Borrowers and Guarantors absent manifest error)
that, by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, (ii) Agent has received notice from the Required Lenders that
the Eurodollar Rate determined or to be determined for such Interest Period will
not adequately and fairly reflect the cost to Lenders of making or maintaining
Eurodollar Rate Loans during such Interest Period, or (iii) Dollar deposits in
the principal amounts of the Eurodollar Rate Loans to which such Interest Period
is to be applicable are not generally available in the London interbank market,
Agent shall give telecopy or telephonic notice thereof to Administrative
Borrower Representative as soon as practicable thereafter, and will also give
prompt written notice to Administrative Borrower Representative when such
conditions no longer exist. If such notice is given (A) any Eurodollar Rate
Loans requested to be made on the first day of such Interest Period shall be
made as Prime Rate Loans, (B) any Loan to be converted on the first day of such
Interest Period to or continued as Eurodollar Rate Loans shall be converted to
or continued as Prime Rate Loans and (C) each outstanding Eurodollar Rate Loan
shall be converted, on the last day of the then-current Interest Period thereof,
to Prime Rate Loans. Until such notice has been withdrawn by Agent, no further
Eurodollar Rate Loans shall be made or continued as such, nor shall any Borrower
(or Administrative Borrower Representative on behalf of any Borrower) have the
right to convert Prime Rate Loans to Eurodollar Rate Loans.
(c) Notwithstanding any other provision herein, if the
adoption of or any change in any law, treaty, rule or regulation or final,
non-appealable determination of an arbitrator or a court or other Governmental
Authority or in the interpretation or application thereof occurring after the
date hereof shall make it unlawful for Agent or any Lender to make or maintain
Eurodollar Rate Loans as contemplated by this Agreement, (i) Agent or such
Lender shall promptly give written notice of such circumstances to
Administrative Borrower Representative (which notice shall be withdrawn whenever
such circumstances no longer exist), (ii) the commitment of such Lender
hereunder to make Eurodollar Rate Loans, continue Eurodollar Rate Loans as such
and convert Prime Rate Loans to Eurodollar Rate Loans shall forthwith be
canceled and, until such time as it shall no longer be unlawful for such Lender
to
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make or maintain Eurodollar Rate Loans, such Lender shall then have a commitment
only to make a Prime Rate Loan when a Eurodollar Rate Loan is requested and
(iii) such Lender's portion of the Loan then outstanding as Eurodollar Rate
Loans, if any, shall be converted automatically to Prime Rate Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law. If any such conversion
of a Eurodollar Rate Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, Borrowers and Guarantors shall pay
to such Lender such amounts, if any, as may be required pursuant to Section
3.3(d) below.
(d) Borrowers and Guarantors shall indemnify Agent and each
Lender and hold Agent and each Lender harmless from any loss or expense (other
than with respect to Taxes, the indemnification for which shall be governed by
Sections 6.4(b) and 6.11 hereof) which Agent or such Lender may sustain or incur
as a consequence of (i) default by Borrower in making a borrowing of, conversion
into or extension of Eurodollar Rate Loans after such Borrower (or
Administrative Borrower Representative on behalf of such Borrower) has given a
notice requesting the same in accordance with the provisions of this Agreement,
(ii) default by any Borrower in making any prepayment of a Eurodollar Rate Loan
after such Borrower has given a notice thereof in accordance with the provisions
of this Agreement, and(iii) the making of a prepayment of Eurodollar Rate Loans
on a day which is not the last day of an Interest Period with respect thereto.
With respect to Eurodollar Rate Loans, such indemnification may include an
amount equal to the excess, if any, of (A) the amount of interest which would
have accrued on the amount so prepaid, or not so borrowed, converted or
extended, for the period from the date of such prepayment or of such failure to
borrow, convert or extend to the last day of the applicable Interest Period (or,
in the case of a failure to borrow, convert or extend, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Eurodollar Rate Loans provided for herein over (B) the
amount of interest (as determined by such Agent or such Lender) which would have
accrued to Agent or such Lender on such amount by placing such amount on deposit
for a comparable period with leading banks in the interbank Eurodollar market.
This covenant shall survive the termination or non-renewal of this Agreement and
the payment of the Obligations.
SECTION 4. CONDITIONS PRECEDENT
4.1. Conditions Precedent to the Loan. Each of the following is a
condition precedent to Agent and Lenders making the Loan:
(a) Agent shall have received a copy of the Confirmation Order
as duly entered by the Bankruptcy Court and entered on the docket of the Clerk
of the Bankruptcy Court in the Chapter 11 Case certified by the Clerk of the
Bankruptcy Court, following due notice to such creditors and other
parties-in-interest as required by the Bankruptcy Court, which order shall
include such provisions with respect to the Credit Facility as are reasonably
satisfactory to Agent and, providing, among other things, that Borrowers shall
be authorized to (i) enter into this Agreement, the other Financing Agreements
and the Working Capital Loan Documents, (ii) grant the liens and security
interests and incur or guaranty the Indebtedness under this Agreement, the other
Financing Agreements and the Working Capital Loan Documents, and (iii) issue,
execute and deliver all documents, agreements and instruments
29
necessary or appropriate to implement and effectuate all obligations under this
Agreement, the other Financing Agreements and the Working Capital Loan Documents
and to take all other actions necessary to implement and effectuate borrowings
under this Agreement, the other Financing Agreements and the Working Capital
Loan Documents. Without limiting the generality of the foregoing, Agents shall
be satisfied (i) with the terms and conditions (including, without limitation,
lien and debt subordination provisions, payment terms, interest rates,
covenants, remedies, defaults and other material terms) of the New Notes to be
issued by Parent; provided, that the New Notes shall (A) have a maturity date
not earlier than 7 years following the effective date of the Chapter 11 Plan,
(B) bear non-default interest at a cash-pay rate of interest of not exceeding
10% per annum, (C) have no amortization due thereunder until the maturity date
thereof, and (D) be secured by third priority liens on substantially all of the
assets of the Borrowers, which liens securing the New Notes, and the
Indebtedness thereunder, shall be subordinated to the Obligations and the
Working Capital Loan Debt pursuant to the New Note Intercreditor Agreement,
which shall be in form and substance satisfactory to Agent and Working Capital
Loan Agent in Agent's and Working Capital Loan Agent's sole but reasonable
discretion, and (ii) that the issuance to the holders of the New Notes of equity
interests in the reorganized Borrowers is limited to common stock, but shall
consist of substantially all of such common stock, subject to stock options with
respect to such common stock to be issued to Borrowers' management pursuant to
Borrowers' 2004 Stock Option Plan;
(b) Agent shall have received evidence, satisfactory to Agent,
that prior to the date hereof or concurrently herewith, (i) the Effective Date
shall have occurred, the Confirmation Order shall be valid, subsisting and
continuing as a Final Order and all conditions precedent to the effectiveness of
the Chapter 11 Plan shall have been fulfilled, or validly waived, including,
without limitation, the execution, delivery and performance of all of the
conditions thereof other than conditions that have been validly waived (but not
including conditions consisting of the effectiveness of this Agreement), and
(ii) no motion, action or proceeding shall be pending or filed by any creditor
or other party-in-interest to the Chapter 11 Case which could adversely affect
the Chapter 11 Plan, the consummation of the Chapter 11 Plan, the business or
operations of Borrowers or the transactions contemplated by the Financing
Agreements and the Working Capital Loan Documents, as determined by Agent in
good faith;
(c) Agent and Working Capital Agent shall each be reasonably
satisfied with the application of "fresh start" accounting rules to Borrowers
after the Effective Date of the Chapter 11 Plan.
(d) Agent shall have received, in form and substance
satisfactory to Agent, all releases, terminations and such other documents as
Agent may request to evidence and effectuate the termination by the Existing
Lenders of their respective financing arrangements with Borrowers and Guarantors
and the termination and release by Existing Lenders, and by any other Person
holding a security interest or lien that is not permitted by Section 9.8, of any
interest in and to any assets and properties of each Borrower and Guarantor,
duly authorized, executed and delivered by each of them (or by their agent),
including, but not limited to, (i) UCC termination statements for all UCC
financing statements previously filed by it or any of them or their
predecessors, as secured party and any Borrower or Guarantor, as debtor; and
(ii) satisfactions and discharges of any mortgages, deeds of trust or deeds to
secure debt by any
30
Borrower or Guarantor in favor of it or any of them, in form acceptable for
recording with the appropriate Governmental Authority;
(e) all requisite corporate action and proceedings in
connection with this Agreement and the other Financing Agreements shall be
reasonably satisfactory in form and substance to Agent, and Agent shall have
received all information and copies of all documents, including certificates of
incorporation or formation, by-laws, operating agreement or other applicable
governing documents and records of requisite corporate action and proceedings
which Agent may have reasonably requested in connection therewith, such
documents where requested by Agent or its counsel to be certified by appropriate
corporate officers or Governmental Authority (and including a copy of the
certificate of incorporation of each Borrower and Guarantor certified by the
Secretary of State (or equivalent Governmental Authority) which shall set forth
the same complete corporate name of such Borrower or Guarantor as is set forth
herein and such document as shall set forth the organizational identification
number of each Borrower or Guarantor, if one is issued in its jurisdiction of
incorporation);
(f) no Material Adverse Effect shall have occurred since
August 25, 2004;
(g) Agent shall have received from Working Capital Agent the
results of its field review of the Borrowers' Records and such other information
with respect to the Collateral as Working Capital Loan Agent may require, the
results of which, (i) shall have been obtained not more than seven (7) days
prior to the date hereof or within such other longer time period as Agent shall
elect in good faith, (ii) shall not reflect any material adverse changes from
the results of Working Capital Agent's latest field examinations and (iii) shall
be satisfactory to Agent;
(h) Agent shall have received, in form and substance
satisfactory to Agent, all consents, waivers, acknowledgments and other
agreements from third persons which Agent may deem necessary in order to permit,
protect and perfect its security interests in and liens upon the Collateral and
to effectuate the provisions or purposes of this Agreement and the other
Financing Agreements, including, without limitation, Collateral Access
Agreements executed by owners and lessors of leased premises of Borrowers and by
processors, warehouse owners and other bailees at which any Collateral is
located;
(i) the Excess Availability as determined by Working Capital
Agent, as of the Closing Date, shall be not less than $20,000,000 after giving
effect to (i) the Loan to be made in connection with the transactions hereunder,
(ii) the initial Working Capital Loans made or to be made and Letter of Credit
Accommodations (as defined in the Working Capital Loan Agreement) issued or to
be issued, and all fees and expenses to be paid in connection with the
consummation of the Chapter 11 Plan and the initial transactions hereunder and
under the Working Capital Loan Agreement;
(j) Agent shall have received, in form and substance
reasonably satisfactory to Agent, Deposit Account Control Agreements by and
among Agent, Working Capital Loan Agent, each Borrower and Guarantor, as the
case may be and each bank where such Borrower (or Guarantor) has a deposit
account (other than as provided in Section 5.2(d) hereof),
31
in each case, duly authorized, executed and delivered by such bank and Borrower
or Guarantor, as the case may be;
(k) Agent shall have received evidence, in form and substance
reasonably satisfactory to Agent, that Agent has a valid perfected security
interest in all of the Collateral (excluding motor vehicles currently owned by
Borrowers), subject only to the prior liens of Working Capital Agent;
(l) Agent shall have received and reviewed lien and judgment
search results for the jurisdiction of organization of each Borrower and
Guarantor, the jurisdiction of the chief executive office of each Borrower and
Guarantor and all jurisdictions in which assets of Borrowers and Guarantors are
located, which search results shall be in form and substance satisfactory to
Agent;
(m) Agent shall have received, in form and substance
satisfactory to Agent, a valid and effective title insurance policy issued by a
company and agent acceptable to Agent: (i) insuring the priority and amount of
the Mortgages, (ii) insuring against matters that would be disclosed by surveys
and (iii) containing any legally available endorsements, assurances or
affirmative coverage reasonably requested by Agent in accordance with its
customary practices for protection of its interests;
(n) Agent shall have received copies of the shares of the
stock certificates representing all of the issued and outstanding shares of the
Capital Stock of each Borrower and Guarantor (other than Parent) and owned by
any Borrower or Guarantor (limited, however, to 65% of issued and outstanding
shares of the Capital Stock of each first-tier subsidiary of Borrowers and
Guarantors that is incorporated outside of the United States of America), in
each case together with copies of stock powers duly executed in blank with
respect thereto, and Agent shall have received evidence satisfactory to Agent
that the originals of such stock certificates and stock powers have been
delivered to the Working Capital Agent;
(o) Agent shall have received evidence of insurance and loss
payee endorsements required hereunder and under the other Financing Agreements,
in form and substance satisfactory to Agent, and certificates of insurance
policies and/or endorsements naming Agent as loss payee as its interests may
appear, as applicable;
(p) Agent shall have received, in form and substance
satisfactory to Agent, such opinion letters of counsel to Borrowers and
Guarantors with respect to the Financing Agreements and such other matters as
Agent may reasonably request;
(q) the other Financing Agreements and all instruments and
documents hereunder and thereunder shall have been duly executed and delivered
to Agent, in form and substance reasonably satisfactory to Agent;
(r) Agent and Working Capital Agent shall have entered into
and executed the Term Loan Intercreditor Agreement, in form and substance
satisfactory to Agent;
32
(s) Agent, Working Capital Agent and the New Notes Trustee
shall have entered into and executed the New Notes Intercreditor Agreement, in
form and substance satisfactory to Agent;
(t) Agent shall have received evidence that Borrowers,
Guarantors, Working Capital Agent and Working Capital Lenders have entered into
and executed the Working Capital Loan Documents, which shall be in form and
substance satisfactory to Agent, all conditions precedent to the effectiveness
of the Working Capital Loan Documents and Working Capital Loan Lenders'
obligation to make the Working Capital Loans shall have been satisfied in full
(as determined by Term Loan Agent) or waived, as applicable, and Working Capital
Agent and Working Capital Lenders shall have funded the initial Working Capital
Loans to Borrowers;
(u) Except as consented to by Agent, the Bankruptcy Court's
retention of jurisdiction under the Confirmation Order shall not govern the
enforcement of the Financing Agreements or the Working Capital Loan Documents or
any rights or remedies related thereto;
(v) Agent shall have received a reliance letter from ENSR
International, for the benefit of itself and Lenders, in form and substance
reasonably satisfactory to Agent, with respect to the environmental reports
prepared by ENSR International;
(w) Agent shall have received a reliance letter from each of
Hilco Appraisal Services, LLC and Hilco Real Estate, LLC (collectively,
"Hilco"), for the benefit of itself and Lenders, in form and substance
reasonably satisfactory to Agent, with respect to the Inventory and Real
Property appraisals prepared by Hilco;
(x) all representations and warranties contained herein and in
the other Financing Agreements shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been made on and as of the date of the making of the Loan and after giving
effect thereto, except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and correct in all material respects
accurate on and as of such earlier date);
(y) no law, regulation, order, judgment or decree of any
Governmental Authority shall exist, and no action, suit, investigation,
litigation or proceeding shall be pending or threatened in any court or before
any arbitrator or Governmental Authority, which (i) purports to enjoin,
prohibit, restrain or otherwise affect (A) the making of the Loan, or (B) the
consummation of the transactions contemplated pursuant to the terms hereof or
the other Financing Agreements or (ii) could reasonably be expected to have or
has a reasonable likelihood of having a Material Adverse Effect;
(z) no Default or Event of Default shall exist or have
occurred and be continuing on and as of the date of the making of the Loan
hereunder and after giving effect thereto; and
33
(aa) The Borrowers shall have paid on or before the date
hereof all fees, costs and expenses then payable pursuant hereto for which a
reasonably detailed invoice has been delivered to Borrowers, it being agreed
that all such fees, costs and expenses may be paid from the proceeds of the Loan
made on the Closing Date.
SECTION 5. GRANT AND PERFECTION OF SECURITY INTEREST
5.1. Grant of Security Interest. To secure payment and performance of
all Obligations, each Borrower and Guarantor hereby grants to Agent, for itself
and the benefit of Lenders, a continuing security interest in, a lien upon, and
a right of set off against, and hereby assigns to Agent, for itself and the
benefit of Lenders, as security, all (except as otherwise provided below)
personal and real property and fixtures, and interests in property and fixtures,
of each Borrower and Guarantor, whether now owned or hereafter acquired or
existing, and wherever located (together with all other collateral security for
the Obligations at any time granted to or held or acquired by Agent or any
Lender, collectively, the "Collateral"), including:
(a) all Accounts;
(b) all general intangibles, including, without limitation,
all Intellectual Property and all intercompany loans and Receivables owing by
any of Borrowers' foreign subsidiaries to any Borrower;
(c) all goods, including, without limitation, Inventory and
Equipment;
(d) all Real Property and fixtures;
(e) all chattel paper, including, without limitation, all
tangible and electronic chattel paper;
(f) all instruments, including, without limitation, all
promissory notes (including, without limitations, any notes evidencing
intercompany loans and Receivables owing by any of Borrowers' foreign
Subsidiaries to Borrowers);
(g) all documents;
(h) all deposit accounts;
(i) all letters of credit, banker's acceptances and similar
instruments and including all letter-of-credit rights;
(j) all supporting obligations and all present and future
liens, security interests, rights, remedies, title and interest in, to and in
respect of Receivables and other Collateral, including (i) rights and remedies
under or relating to guaranties, contracts of suretyship, letters of credit and
credit and other insurance related to the Collateral, (ii) rights of stoppage in
transit, replevin, repossession, reclamation and other rights and remedies of an
unpaid vendor, lienor or secured party, (iii) goods described in invoices,
documents, contracts or instruments with respect to, or otherwise representing
or evidencing, Receivables or other
34
Collateral, including returned, repossessed and reclaimed goods, and (iv)
deposits by and property of account debtors or other persons securing the
obligations of account debtors;
(k) all (i) investment property (including securities, whether
certificated or uncertificated, securities accounts, security entitlements,
commodity contracts or commodity accounts; limited, however, to (A) all
non-voting, and only 65% of the voting, issued and outstanding shares of the
Capital Stock of each first-tier Subsidiary of Borrowers and Guarantors that is
incorporated or formed outside of the United States of America and (B) 65% of
the issued and outstanding interest in each first tier Subsidiary that is
treated as a disregarded entity for U.S. federal income tax purposes that owns
directly or indirectly any Capital Stock of a "controlled foreign corporation"
(as described in Section 957 of the Code)) and (ii) monies, credit balances,
deposits and other property of any Borrower or Guarantor now or hereafter held
or received by or in transit to Agent, any Lender or its Affiliates or at any
other depository or other institution from or for the account of any Borrower or
Guarantor, whether for safekeeping, pledge, custody, transmission, collection or
otherwise;
(l) all commercial tort claims, including, without limitation,
those identified in the Information Certificate;
(m) to the extent not otherwise described above, all
Receivables;
(n) all Records; and
(o) all products and proceeds of the foregoing, in any form,
including insurance proceeds and all claims against third parties for loss or
damage to or destruction of or other involuntary conversion of any kind or
nature of any or all of the other Collateral.
Notwithstanding anything to the contrary contained in this Section 5.1, the
foregoing grant of security interest shall not attach to or encompass, and the
Collateral shall not include, any lease, license, contract, property rights,
Intellectual Property or agreement to which any Borrower or Guarantor is a party
or any of its rights or interest thereunder if and for so long as the grant of
such security interest shall constitute or result in (i) the abandonment,
invalidation or unenforceability of any right, title or interest of any Borrower
or Guarantor therein or (ii) in a breach or termination pursuant to the terms
of, or a default under, any such lease, license, contract, property rights, or
agreement (other than to the extent that any such term would be rendered
ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the UCC (or any
successor provision or provisions) of any relevant jurisdiction or any other
applicable law (including the Bankruptcy Code) or principles of equity),
provided however that such security interest shall attached immediately at such
time as the condition causing such abandonment, invalidation or unenforceability
shall be remedied and to the extent severable, shall attach immediately to any
portion of such lease, license, contract, property rights, intellectual property
or agreement that does not result in any of the consequences specified in (i) or
(ii) above (such assets and properties being collectively referred to herein as
"Restricted Assets"); provided, that, (a) Agent, for the benefit of itself and
Lenders, shall have a security interest in all proceeds at any time arising from
Restricted Assets and (b) at such time as any Restricted Asset is no long
subject to the contractual or other legal impediment to Borrowers' or
Guarantors' grant of a security interest therein to Agent (a "Non-Restricted
Asset"), then the applicable Borrowers or
35
Guarantors shall be deemed to have thereupon, without further act by Borrowers,
Guarantors, Agent or Lenders, automatically granted a security interest to Agent
in such Non-Restricted Asset and such Non-Restricted Asset shall thereupon
constitute Collateral.
5.2. Perfection of Security Interests.
(a) Each Borrower and Guarantor irrevocably and
unconditionally authorizes Agent (or its agent) to file at any time and from
time to time such financing statements with respect to the Collateral naming
Agent or its designee as the secured party and such Borrower or Guarantor as
debtor, as Agent may require, and including any other information with respect
to such Borrower or Guarantor or otherwise required by part 5 of Article 9 of
the Uniform Commercial Code of such jurisdiction as Agent may reasonably
determine, together with any amendment and continuations with respect thereto,
which authorization shall apply to all financing statements filed on, prior to
or after the date hereof. Each Borrower and Guarantor hereby ratifies and
approves all financing statements naming Agent or its designee as secured party
and such Borrower or Guarantor, as the case may be, as debtor with respect to
the Collateral (and any amendments with respect to such financing statements)
filed by or on behalf of Agent prior to the date hereof and ratifies and
confirms the authorization of Agent to file such financing statements (and
amendments, if any). Each Borrower and Guarantor hereby authorizes Agent to
adopt on behalf of such Borrower and Guarantor any symbol required for
authenticating any electronic filing. In the event that the description of the
collateral in any financing statement naming Agent or its designee as the
secured party and any Borrower or Guarantor as debtor includes assets and
properties of such Borrower or Guarantor that do not at any time constitute
Collateral, whether hereunder, under any of the other Financing Agreements or
otherwise, the filing of such financing statement shall nonetheless be deemed
authorized by such Borrower or Guarantor to the extent of the Collateral
included in such description and it shall not render the financing statement
ineffective as to any of the Collateral or otherwise affect the financing
statement as it applies to any of the Collateral. In no event shall any Borrower
or Guarantor at any time file, or permit or cause to be filed, any correction
statement or termination statement with respect to any financing statement (or
amendment or continuation with respect thereto) naming Agent or its designee as
secured party and such Borrower or Guarantor as debtor without Agent's written
consent or authorization.
(b) No Borrower and Guarantor has any chattel paper (whether
tangible or electronic) or instruments as of the date hereof, except as set
forth in the Information Certificate. In the event that any Borrower or
Guarantor shall be entitled to or shall receive any chattel paper or instrument
after the date hereof, Borrowers and Guarantors shall promptly notify Agent
thereof in writing. Promptly upon the receipt thereof by or on behalf of any
Borrower or Guarantor (including by any agent or representative), such Borrower
or Guarantor shall deliver, or cause to be delivered to Agent (or, if the
Working Capital Loan Termination Date has not occurred, to Working Capital
Agent, with copies to Agent), all tangible chattel paper and instruments that
such Borrower or Guarantor has or may at any time acquire with a value in excess
of $500,000, accompanied by such instruments of transfer or assignment duly
executed in blank as Agent may from time to time specify, in each case except as
Agent may otherwise agree. Subject to the terms of the Term Loan Intercreditor
Agreement, at Agent's option, each Borrower and Guarantor shall, or Agent may at
any time on behalf of any Borrower or
36
Guarantor, cause the original of any such instrument or chattel paper to be
conspicuously marked in a form and manner acceptable to Agent with the following
legend referring to chattel paper or instruments as applicable: "This [chattel
paper][instrument] is subject to the security interest of Silver Point Finance,
LLC, as Agent, and any sale, transfer, assignment or encumbrance of this
[chattel paper][instrument] violates the rights of such secured party."
(c) In the event that any Borrower or Guarantor shall at any
time hold or acquire an interest in any electronic chattel paper or any
"transferable record" (as such term is defined in Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction), such Borrower or Guarantor shall promptly notify Agent thereof in
writing. Subject to the terms of the Term Loan Intercreditor Agreement, promptly
upon Agent's request, such Borrower or Guarantor shall take, or cause to be
taken, such actions as Agent may request to give Agent (or, if the Working
Capital Loan Termination Date has not occurred, to the Working Capital Agent,
with copies to Agent) control of such electronic chattel paper under Section
9-105 of the UCC and control of such transferable record under Section 201 of
the Federal Electronic Signatures in Global and National Commerce Act or, as the
case may be, Section 16 of the Uniform Electronic Transactions Act, as in effect
in such jurisdiction.
(d) No Borrower and Guarantor has any deposit accounts as of
the date hereof, except as set forth in the Information Certificate. Borrowers
and Guarantors shall not, directly or indirectly, after the date hereof open,
establish or maintain any deposit account unless each of the following
conditions is satisfied: (i) the bank where such account is opened or maintained
shall be reasonably acceptable to Agent, (ii) on or before the opening of such
deposit account, such Borrower or Guarantor shall as Agent may specify (subject
to the terms of the Term Loan Intercreditor Agreement) deliver to Agent a
Deposit Account Control Agreement with respect to such deposit account duly
authorized, executed and delivered by such Borrower or Guarantor and the bank at
which such deposit account is opened and maintained and (iii) after the
occurrence of an Event of Default that is continuing, upon Agent's request, but
subject to the terms of the Term Loan Intercreditor Agreement) arrange for Agent
to become the customer of the bank with respect to the deposit account on terms
and conditions acceptable to Agent. The terms of this subsection (d) shall not
apply to deposit accounts or funds specifically and exclusively used for
payroll, payroll taxes and other employee wage and benefit payments to or for
the benefit of any Borrower's or Guarantor's salaried employees.
(e) No Borrower or Guarantor owns or holds, directly or
indirectly, beneficially or as record owner or both, any investment property, as
of the date hereof, or have any investment account, securities account,
commodity account or other similar account with any bank or other financial
institution or other securities intermediary or commodity intermediary as of the
date hereof, in each case except as set forth in the Information Certificate.
(i) In the event that any Borrower or Guarantor shall be
entitled to or shall at any time after the date hereof hold or acquire any
certificated securities (other than as set forth in Section 5.1), such Borrower
or Guarantor shall promptly endorse, assign and deliver the same to Agent (or if
the Working Capital Termination Date has not occurred, to Working Capital Agent,
with copies to Agent), accompanied by such instruments of transfer or assignment
duly
37
executed in blank as Agent may from time to time specify; provided that in no
event shall any Borrower be required to deliver certificates presenting more
than 65% of the issued and outstanding shares of the Capital Stock of any
first-tier Subsidiary that is incorporated or formed outside the United States
of America. If any securities, now or hereafter acquired by any Borrower or
Guarantor are uncertificated and are issued to such Borrower or Guarantor or its
nominee directly by the issuer thereof, such Borrower or Guarantor shall
immediately notify Agent thereof and shall as Agent may specify and subject to
the terms of the Term Loan Intercreditor Agreement, either (A) cause the issuer
to agree to comply with reasonable instructions from Agent as to such
securities, without further consent of any Borrower or Guarantor or such
nominee, or (B) after the occurrence of an Event of Default that is continuing,
upon Agent's request, arrange for Agent to become the registered owner of the
securities.
(ii) Borrowers and Guarantors shall not, directly or
indirectly, after the date hereof open, establish or maintain any investment
account, securities account, commodity account or any other similar account
(other than a deposit account) with any securities intermediary or commodity
intermediary unless each of the following conditions is satisfied: (A) Agent
shall have received not less than five (5) Business Days' prior written notice
of the intention of such Borrower or Guarantor to open or establish such account
which notice shall specify in reasonable detail and specificity reasonably
acceptable to Agent the name of the account, the owner of the account, the name
and address of the securities intermediary or commodity intermediary at which
such account is to be opened or established, the individual at such intermediary
with whom such Borrower or Guarantor is dealing and the purpose of the account,
(B) the securities intermediary or commodity intermediary (as the case may be)
where such account is opened or maintained shall be reasonably acceptable to
Agent, and (C) on or before the opening of such investment account, securities
account or other similar account with a securities intermediary or commodity
intermediary, such Borrower or Guarantor shall as Agent may specify and subject
to the terms of the Term Loan Intercreditor Agreement, either execute and
deliver, and cause to be executed and delivered to Agent, an Investment Property
Control Agreement with respect thereto duly authorized, executed and delivered
by such Borrower or Guarantor and such securities intermediary or commodity
intermediary or arrange for Agent to become the entitlement holder with respect
to such investment property on terms and conditions reasonably acceptable to
Agent.
(f) Borrowers and Guarantors are not the beneficiary or
otherwise entitled to any right to payment under any letter of credit, banker's
acceptance or similar instrument as of the date hereof, except as set forth in
the Information Certificate. In the event that any Borrower or Guarantor shall
be entitled to or shall receive any right to payment under any letter of credit,
banker's acceptance or any similar instrument with a face amount in excess of
$500,000, whether as beneficiary thereof or otherwise after the date hereof,
such Borrower or Guarantor shall promptly notify Agent thereof in writing. Such
Borrower or Guarantor shall immediately, as Agent may specify, and subject to
the terms of the Term Loan Intercreditor Agreement, either (i) deliver, or cause
to be delivered to Agent, with respect to any such letter of credit, banker's
acceptance or similar instrument, the written agreement of the issuer and any
other nominated person obligated to make any payment in respect thereof
(including any confirming or negotiating bank), in form and substance reasonably
satisfactory to Agent, consenting to the assignment of the proceeds of the
letter of credit to Agent by such Borrower or
38
Guarantor and agreeing to make all payments thereon directly to Agent or as
Agent may otherwise reasonably direct or (ii) cause Agent to become, at
Borrowers' expense, the transferee beneficiary of the letter of credit, banker's
acceptance or similar instrument (as the case may be).
(g) Borrowers and Guarantors do not have any commercial tort
claims with a claim amount in excess of $500,000 as of the date hereof, except
as set forth in the Information Certificate. In the event that any Borrower or
Guarantor shall at any time after the date hereof have any commercial tort
claims with a claim amount in excess of $500,000, such Borrower or Guarantor
shall promptly notify Agent thereof in writing, which notice shall (i) set forth
in reasonable detail the basis for and nature of such commercial tort claim and
(ii) include the express grant by such Borrower or Guarantor to Agent of a
security interest in such commercial tort claim (and the proceeds thereof). In
the event that such notice does not include such grant of a security interest,
the sending thereof by such Borrower or Guarantor to Agent shall be deemed to
constitute such grant to Agent. Upon the sending of such notice, any commercial
tort claim described therein shall constitute part of the Collateral and shall
be deemed included therein. Without limiting the authorization of Agent provided
in Section 5.2(a) hereof or otherwise arising by the execution by such Borrower
or Guarantor of this Agreement or any of the other Financing Agreements, Agent
is hereby irrevocably authorized from time to time and at any time to file such
financing statements naming Agent or its designee as secured party and such
Borrower or Guarantor as debtor, or any amendments to any financing statements,
covering any such commercial tort claim as Collateral. In addition, each
Borrower and Guarantor shall promptly upon Agent's reasonable request, execute
and deliver, or cause to be executed and delivered, to Agent such other
agreements, documents and instruments as Agent may reasonably require in
connection with such commercial tort claim.
(h) Borrowers and Guarantors do not have any goods, documents
of title or other Collateral with a value in excess of $500,000, individually
for any such item of Collateral, or $1,000,000 in the aggregate for all such
items of Collateral, collectively, in the custody, control or possession of a
third party as of the date hereof, except as set forth in the Information
Certificate and except for goods located in the United States in transit to a
location of a Borrower or Guarantor permitted herein in the ordinary course of
business of such Borrower or Guarantor in the possession of the carrier
transporting such goods or equipment out for repair. In the event that any
goods, documents of title or other Collateral are at any time after the date
hereof in the custody, control or possession of any other person not referred to
in the Information Certificate or such carriers, Borrowers and Guarantors shall
promptly notify Agent thereof in writing. Promptly upon Agent's reasonable
request, Borrowers and Guarantors shall deliver to Agent a Collateral Access
Agreement duly authorized, executed and delivered by such person and the
Borrower or Guarantor that is the owner of such Collateral.
(i) Borrowers and Guarantors shall take any other actions
reasonably requested by Agent from time to time to cause the attachment,
perfection and first priority (subject only to the prior liens of the Working
Capital Agent) of, and the ability of Agent to enforce, the security interest of
Agent in any and all of the Collateral (subject to the terms of the Term Loan
Intercreditor Agreement), including, without limitation, (i) executing,
delivering and, where appropriate, filing financing statements and amendments
relating thereto under the UCC or other applicable law, to the extent, if any,
that any Borrower's or Guarantor's signature thereon
39
is required therefor, (ii) causing Agent's name to be noted as secured party on
any certificate of title for a titled good if such notation is a condition to
attachment, perfection or priority of, or ability of Agent to enforce, the
security interest of Agent in such Collateral, (iii) complying with any
provision of any statute, regulation or treaty of the United States as to any
Collateral if compliance with such provision is a condition to attachment,
perfection or priority of, or ability of Agent to enforce, the security interest
of Agent in such Collateral, (iv) obtaining the consents and approvals of any
material Governmental Authority or third party, including, without limitation,
any consent of any licensor, lessor or other person obligated on Collateral, and
taking all reasonable actions required by any earlier versions of the UCC or by
other law, as applicable in any relevant jurisdiction; provided, however, that
Agent shall not require Borrowers and Guarantors to comply with this Section
5.2(i) with respect to any Collateral if the cost associated with either
obtaining a security interest therein or Agent's perfection thereof is excessive
in relation to the value of such Collateral, as determined by Agent in good
faith.
SECTION 6. COLLECTION AND ADMINISTRATION
6.1. Borrowers' Loan Accounts; Registered Notes. (a) Agent shall
maintain one or more loan accounts on its books in which shall be recorded (i)
the Loan and other Obligations and the Collateral, (ii) all payments made by or
on behalf of any Borrower or Guarantor and (iii) all other appropriate debits
and credits as provided in this Agreement, including fees, charges, costs,
expenses and interest. All entries in the loan accounts shall be made in
accordance with Agent's customary practices as in effect from time to time.
(b) Agent (or in the case of an assignment not recorded in the
Register in accordance with Section 13.7, the assigning Lender), on behalf of
Borrowers, agrees to record the Loan on the Register (or in the case of an
assignment not recorded in the Register in accordance with Section 13.7, a
register comparable to the Register) referred to in Section 13.7. The Loan
recorded on the Register (or comparable register) may not be evidenced by
promissory notes other than Registered Notes (as defined below). Upon the
registration of the Loan, Borrowers agree, at the request of any Lender, to
execute and deliver to such Lender a promissory note, in conformity with the
terms of this Agreement and substantially in the form of Exhibit C hereto, in
registered form to evidence such Registered Loan to such Lender, and registered
as provided in Section 13.7 (a "Registered Note"), payable to the order of such
Lender and otherwise duly completed. Once recorded on the Register (or
comparable register), the Loan may not be removed from the Register (or
comparable register) so long as it remains outstanding, and a Registered Note
may not be exchanged for a promissory note that is not a Registered Note.
6.2. Statements. Agent shall render to Administrative Borrower
Representative each month a statement setting forth the balance in the
Borrowers' loan account(s) maintained by Agent for Borrowers pursuant to the
provisions of this Agreement, including principal, interest, fees, costs and
expenses. Each such statement shall be subject to subsequent adjustment by Agent
but shall, absent manifest errors or omissions, be considered correct and deemed
accepted by Borrowers and Guarantors and conclusively binding upon Borrowers and
Guarantors as an account stated except to the extent that Agent receives a
written notice from Administrative Borrower Representative of any specific
exceptions of Administrative Borrower Representative thereto within thirty (30)
days after the date such
40
statement has been received by Administrative Borrower Representative. Until
such time as Agent shall have rendered to Administrative Borrower Representative
a written statement as provided above, the balance in any Borrower's loan
account(s) shall be presumptive evidence of the amounts due and owing to Agent
and Lenders by Borrowers and Guarantors.
6.3. Collection of Accounts. Borrowers shall comply with all terms and
provisions of the Working Capital Loan Agreement (or any successor or
replacement agreement acceptable to Agent) with respect to the cash management
of Borrowers; provided that, if the Working Capital Loan Agreement shall have
been terminated and Borrowers shall not have entered into a successor or
replacement agreement acceptable to Agent, then Borrowers shall enter into
control agreements, lockbox agreements and other similar agreements for the
benefit of the Agent, substantially in the form of Exhibit D to the Working
Capital Loan Agreement or in form and substance otherwise reasonably
satisfactory to Agent.
6.4. Payments; Prepayments.
(a) All Obligations shall be payable to the Agent Payment
Account or such other place as Agent may designate in writing to Administrative
Borrower Representative from time to time. Subject to the terms and conditions
contained herein and except as may otherwise be provided for in the Term Loan
Intercreditor Agreement, Agent shall apply payments received or collected from
any Borrower or Guarantor or for the account of any Borrower or Guarantor
(including the monetary proceeds of collections or of realization upon any
Collateral) as follows: first, to pay any fees, indemnities or expense
reimbursements then due to Agent and Lenders from any Borrower or Guarantor;
second, to pay interest due in respect of the Loan (and including any Special
Agent Advances); third, to pay or prepay principal in respect of Special Agent
Advances; fourth, to pay or prepay principal in respect of the Loan; and fifth,
to pay or prepay any other Obligations whether or not then due, in such order
and manner as Agent determines. Notwithstanding anything to the contrary
contained in this Agreement, unless so directed by Administrative Borrower
Representative, or unless a Default or an Event of Default shall exist or have
occurred and be continuing, Agent shall not apply any payments which it receives
to any Eurodollar Rate Loans, except (A) on the expiration date of the Interest
Period applicable to any such Eurodollar Rate Loans or (B) in the event that
there are no outstanding Prime Rate Loans.
(b) At Agent's option, all principal, interest, fees, costs,
expenses and other charges provided for in this Agreement or the other Financing
Agreements may be charged directly to the loan account(s) of any Borrower
maintained by Agent, except as provided in Section 6.11 hereof. Borrowers and
Guarantors shall make all payments to Agent and Lenders on the Obligations free
and clear of, and without deduction or withholding for or on account of, any
setoff, counterclaim, defense, duties, taxes, levies, imposts, fees, deductions,
withholding, restrictions or conditions of any kind, except as provided in
Section 6.11 hereof. If after receipt of any payment of, or proceeds of
Collateral applied to the payment of, any of the Obligations, Agent or any
Lender is required to surrender or return such payment or proceeds to any Person
for any reason, then the Obligations intended to be satisfied by such payment or
proceeds shall be reinstated and continue and this Agreement shall continue in
full force and effect as if such payment or proceeds had not been received by
Agent or such Lender. Except as provided in
41
Section 6.11 hereof, Borrowers and Guarantors shall be liable to pay to Agent,
and do hereby indemnify and hold Agent and Lenders harmless for the amount of
any payments or proceeds surrendered or returned. This Section 6.4(b) shall
remain effective notwithstanding any contrary action which may be taken by Agent
or any Lender in reliance upon such payment or proceeds. This Section 6.4 shall
survive the payment of the Obligations and the termination of this Agreement.
(c) (i) With respect to the Net Cash Proceeds of Asset Sales:
(A) To the extent such Net Cash Proceeds of an Asset
Sale are not required to be used in accordance with the first sentence of
Section 6.4(c)(i)(A) of the Working Capital Loan Agreement, then such Net Cash
Proceeds may, at Administrative Borrower Representative's option, be used to pay
the Loan, or provided no Event of Default has occurred and is continuing and the
Consolidated Leverage Ratio determined on such date on a pro forma basis is not
greater than 3.5:1, redeem, retire, defease, purchase, discharge or otherwise
reduce Indebtedness outstanding under the New Notes, or provided no Event of
Default has occurred and is continuing, acquire assets used or useful to the
business of the Borrowers and their Subsidiaries or enter into a binding
commitment to do so within one year of receipt of such Net Cash Proceeds in an
aggregate amount not to exceed $2,500,000 for all such asset acquisitions in any
twelve (12) month period following the date of this Agreement.
(B) To the extent such Net Cash Proceeds of any Asset
Sale are not used in accordance with subsection (c)(i)(A), such Net Cash
Proceeds may be paid to Working Capital Agent for application to the Working
Capital Obligations in accordance with Section 6.4(c)(i)(B) of the Working
Capital Loan Agreement.
(C) Notwithstanding anything to the contrary
contained in this subsection (c)(i), Net Cash Proceeds from the sale of the Reel
Sale Division shall be applied first in accordance with Section 6.4(c)(i)(C) of
the Working Capital Loan Agreement to reduce the outstanding Supplemental
Availability (as defined in the Working Capital Loan Agreement) and thereafter,
any remaining proceeds shall in all events be applied (subject to the terms and
conditions of subsections (c)(i)(A) and (c)(i)(B) immediately above) solely to
payment of the Working Capital Obligations, the Loan or the New Notes; and
(D) Notwithstanding anything to the contrary
contained in this subsection (c)(i), Net Cash Proceeds from the Specified Sale,
shall in all events be applied (subject to the terms and conditions of
subsections (c)(i)(A) and (c)(i)(B) immediately above) at Administrative
Borrower Representative's option, solely to payment of the Working Capital
Obligations, the Loan or the New Notes.
Nothing contained in this subsection (c)(i) shall permit or be deemed to
constitute the consent of Agent or any Lender to any Asset Sale otherwise
prohibited by the terms and conditions of this Agreement.
(ii) Unless an event of default under and as defined in the
Working Capital Loan Agreement shall then exist, the Net Cash Proceeds of any
Extraordinary Receipts shall be applied solely and immediately upon receipt to
the prepayment of the Loan. If an event
42
of default under and as defined in the Working Capital Loan Agreement shall
exist when Extraordinary Receipts are received, the Net Cash Proceeds of such
Extraordinary Receipts shall be paid to the Working Capital Agent for
application to the Working Capital Obligations in accordance with Section
6.4(c)(ii) of the Working Capital Loan Agreement.
(d) The Net Cash Proceeds of any Debt Issuance permitted
hereunder (i) may, at Administrative Borrower Representative's option, be used
to (A) repay the Loan, (B) so long as no Event of Default exists and is
continuing, repay redeem, retire, defease, purchase, defease, discharge or
otherwise reduce Indebtedness outstanding under the New Notes or (C) fund
Permitted Acquisitions and investments permitted under and in accordance with
Section 9.10(n) and (ii) to the extent not so used, shall be paid to the Working
Capital Agent for application to the Working Capital Obligations in accordance
with Section 6.4(d) of the Working Capital Loan Agreement.
(e) The Net Cash Proceeds of any Equity Issuance permitted
hereunder may, at Administrative Borrower Representative's option, be used (i)
to repay the Loan, (ii) so long as no Event of Default exists and is continuing,
to repay redeem, retire, defease, purchase, defease, discharge or otherwise
reduce Indebtedness outstanding under the New Notes, and (iii) for any other
general corporate purpose not prohibited by this Agreement.
(f) In addition to any prepayment permitted or required by
this Section 6.4, Borrowers may at any time, on at least 5 days' prior written
notice from Borrower Representative to Agent, prepay any portion or all of the
principal amount of the Loan then outstanding; provided that (i) any partial
prepayment shall be in a minimum amount of $1,000,000 and integral multiples of
$100,000 in excess of such amount and (ii) no such voluntary prepayment shall be
made pursuant to this Section 6.4(f) prior to the date that is twelve (12)
months after the Closing Date. Any voluntary prepayment of the Loan must be
accompanied by the payment of any Eurodollar Rate Loan funding breakage cost.
The principal amount of any portion of the Loan which is repaid or prepaid may
not be reborrowed.
6.5. Authorization to Make the Loan. Agent and Lenders are authorized
to make the Loan based upon telephonic or written instructions received from
anyone purporting to be an officer of Administrative Borrower Representative or
other authorized person. The Loan request hereunder shall specify the date on
which the Loan is to be made (which day shall the date hereof) and the amount of
the Loan. The Loan under this Agreement shall be conclusively presumed to have
been made to, and at the request of and for the benefit of, all Borrowers and
Guarantors when deposited to the credit of any Borrower or Guarantor or
otherwise disbursed or established in accordance with the instructions of any
Borrower or Guarantor or in accordance with the terms and conditions of this
Agreement.
6.6. Use of Proceeds. Borrowers shall use the proceeds of the Loan
provided on the Closing Date by Agent to Borrowers hereunder only as follows:
(a) to fund payments required in order to substantially consummate the Chapter
11 Plan, (b) pay fees and expenses associated with the Chapter 11 Plan, (c) for
payments to each of the persons listed in the disbursement direction letter
furnished by Borrowers to Agent on or about the date hereof, (d) for costs,
expenses and fees in connection with the preparation, negotiation, execution and
delivery
43
of this Agreement and the other Financing Agreements and (e) to provide for the
general operating, working capital and other proper corporate purposes of the
Borrowers not otherwise prohibited by the terms hereof. None of the proceeds
will be used, directly or indirectly, for the purpose of purchasing or carrying
any margin security or for the purposes of reducing or retiring any indebtedness
which was originally incurred to purchase or carry any margin security or for
any other purpose which would cause the Loan to be considered a "purpose credit"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System, as amended.
6.7. Appointment of Administrative Borrower Representative as Agent for
Requesting the Loan and Receipts of the Loan and Statements.
(a) Each Borrower hereby irrevocably appoints and constitutes
Administrative Borrower Representative as its agent to request and receive the
Loan pursuant to this Agreement and the other Financing Agreements from Agent or
any Lender in the name or on behalf of such Borrower. Agent and Lenders may
disburse the Loan to such bank account of Administrative Borrower Representative
or a Borrower or otherwise make the Loan to a Borrower as Administrative
Borrower Representative may designate or direct, without notice to any other
Borrower or Obligor.
(b) Administrative Borrower Representative hereby accepts the
appointment by Borrowers to act as the agent of Borrowers pursuant to this
Section 6.7. Administrative Borrower Representative shall ensure that the
disbursement of the Loan to each Borrower shall be paid or issued to or for the
account of such Borrower.
(c) Each Borrower and other Guarantor hereby irrevocably
appoints and constitutes Administrative Borrower Representative as its agent to
receive statements on account and all other notices from Agent and Lenders with
respect to the Obligations or otherwise under or in connection with this
Agreement and the other Financing Agreements.
(d) Any notice, election, representation, warranty, agreement
or undertaking by or on behalf of any other Borrower or any Guarantor by
Administrative Borrower Representative shall be deemed for all purposes to have
been made by such Borrower or Guarantor, as the case may be, and shall be
binding upon and enforceable against such Borrower or Guarantor to the same
extent as if made directly by such Borrower of Guarantor.
(e) No purported termination of the appointment of
Administrative Borrower Representative as agent as aforesaid shall be effective,
except after ten (10) days' prior written notice to Agent.
6.8. Pro Rata Treatment. Except to the extent otherwise provided in
this Agreement: (a) the making and conversion of any portion of the Loan shall
be made among the Lenders based on their respective Pro Rata Shares as to the
Loan and (b) each payment on account of any Obligations to or for the account of
one or more of Lenders in respect of any Obligations due on a particular day
shall be allocated among the Lenders entitled to such payments based on their
respective Pro Rata Shares and shall be distributed accordingly.
44
6.9. Sharing of Payments, Etc.
(a) Each Borrower and Guarantor agrees that, in addition to
(and without limitation of) any right of setoff, banker's lien or counterclaim
Agent or any Lender may otherwise have, each Lender shall be entitled, upon the
occurrence and during the continuance of an Event of Default, at its option (but
subject, as among Agent and Lenders, to the provisions of Section 12.3(b)
hereof), to offset balances held by it for the account of such Borrower or
Guarantor at any of its offices, in dollars or in any other currency, against
any principal of or interest on the Loan owed to such Lender or any other amount
payable to such Lender hereunder, that is not paid when due (regardless of
whether such balances are then due to such Borrower or Guarantor), in which case
it shall promptly notify Administrative Borrower Representative and Agent
thereof; provided, that, such Lender's failure to give such notice shall not
affect the validity thereof.
(b) If any Lender (including Agent) shall obtain from any
Borrower or Guarantor payment of any principal of or interest on the Loan owing
to it or payment of any other amount under this Agreement or any of the other
Financing Agreements through the exercise of any right of setoff, banker's lien
or counterclaim or similar right or otherwise (other than from Agent as provided
herein), and, as a result of such payment, such Lender shall have received more
than its Pro Rata Share of the principal of the Loan or more than its share of
such other amounts then due hereunder or thereunder by any Borrower or Guarantor
to such Lender than the percentage thereof received by any other Lender, it
shall promptly pay to Agent, for the benefit of Lenders, the amount of such
excess and simultaneously purchase from such other Lenders a participation in
the portion of the Loan or such other amounts, respectively, owing to such other
Lenders (or such interest due thereon, as the case may be) in such amounts, and
make such other adjustments from time to time as shall be equitable, to the end
that all Lenders shall share the benefit of such excess payment (net of any
reasonable expenses that may be incurred by such Lender in obtaining or
preserving such excess payment) in accordance with their respective Pro Rata
Shares or as otherwise agreed by Lenders. To such end all Lenders shall make
appropriate adjustments among themselves (by the resale of participation sold or
otherwise) if such payment is rescinded or must otherwise be restored.
(c) Each Borrower and Guarantor agrees that any Lender
purchasing a participation (or direct interest) as provided in this Section may
exercise, in a manner consistent with this Section, all rights of setoff,
banker's lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender were a direct holder of Loan or other amounts (as the
case may be) owing to such Lender in the amount of such participation.
(d) Nothing contained herein shall require any Lender to
exercise any right of setoff, banker's lien, counterclaims or similar rights or
shall affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other Indebtedness or obligation
of any Borrower or Guarantor. If, under any applicable bankruptcy, insolvency or
other similar law, any Lender receives a secured claim in lieu of a setoff to
which this Section applies, such Lender shall, to the extent practicable, assign
such rights to Agent for the benefit of Lenders and, in any event, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of Lenders entitled under this Section to share in the benefits of any recovery
on such secured claim.
45
6.10. [Intentionally Omitted]
6.11. Taxes.
(a) Except as provided in Section 6.11(e), any and all
payments by or on behalf of a Borrower hereunder or under any other Financing
Agreement shall be made, in accordance with Section 6.4, free and clear of and
without deduction or withholding for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding taxes (including branch profits taxes) imposed on the
net income of the Agent or any Lender (or any transferee or assignee thereof,
including a participation holder (any such entity, a "Transferee")) by the
jurisdiction in which such Person is organized, has its principal lending office
or is otherwise doing business without considering any activities associates
with this Agreement or any other Financing Agreement (all such nonexcluded
taxes, levies, imposts, deductions, charges withholdings and liabilities,
collectively or individually, "Taxes"). If any Borrower or Guarantor shall be
required to deduct or withhold any Taxes from or in respect of any sum payable
hereunder to the Agent or any Lender (or any Transferee), (i) the sum payable
shall be increased by the amount (an "additional amount") necessary so that
after making all required deductions or withholdings (including deductions or
withholdings applicable to additional sums payable under this Section 6.11) the
Agent or such Lender (or such Transferee) shall receive an amount equal to the
sum it would have received had no such deductions been made, (ii) such Borrower
or Guarantor shall make such deductions and (iii) such Borrower or Guarantor
shall pay the full amount deducted or withheld to the relevant Governmental
Authority in accordance with applicable law.
(b) In addition, each Borrower and Guarantor agrees to pay to
the relevant Governmental Authority in accordance with applicable law any
present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement ("Other Taxes"). Each Borrower and Guarantor, as applicable,
shall deliver to the Agent and each Lender official receipts in respect of any
Taxes or Other Taxes payable hereunder promptly after payment of such Taxes or
Other Taxes.
(c) Except as provided in Section 6.11(e) below, the Borrowers
and Guarantors hereby jointly and severally indemnify and agree to hold each
Agent and each Lender harmless from and against Taxes and Other Taxes
(including, without limitation, Taxes and Other Taxes imposed on any amounts
payable under this Section 6.11) paid by such Person, whether or not such Taxes
or Other Taxes were correctly or legally asserted. Such indemnification shall be
paid within 10 days from the date on which any such Person makes written demand
therefore specifying in reasonable detail the nature and amount of such Taxes or
Other Taxes. If an Agent or Lender (or Transferee) receives a refund in respect
of any Taxes or Other Taxes for which Agent or such Lender has received payment
from a Borrower or Guarantor hereunder, Agent or such Lender, as the case may
be, shall credit to the loan account of the applicable Borrower a portion of
such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by such Borrower or Guarantor, as applicable, under this Section
6.11 with respect to Taxes or Other Taxes giving rise to such refund) that it
determines in good faith will leave it, after such reimbursement, in no better
or worse position
46
than it would have been in if the payment by such Borrower or Guarantor,
whichever is applicable, had not been required (taking into account all
out-of-pocket expenses of the Agent or Lender (or Transferee) and any taxes on
such refund); provided that the applicable Borrower or Guarantor, upon the
request of such Agent or Lender (or Transferee), agrees to repay the amount paid
over to the Borrower or Guarantor (plus penalties or interest) to such Agent or
Lender (or Transferee) in the event such Agent or Lender (or Transferee) is
required to repay such refund to the applicable taxation authority.
(d) Each Lender (or Transferee) that is organized under the
laws of a jurisdiction other than the United States, any State thereof or the
District of Columbia (a "Non-U.S. Lender") shall deliver to the Agent and the
Administrative Borrower two properly completed and duly executed copies of any
of U.S. Internal Revenue Service Form W-8BEN, Form W-8IMY or Form W-8ECI, or any
subsequent versions thereof or successors thereto, in each case claiming
complete exemption from U.S. Federal withholding tax on payments by the
Borrowers or the Guarantors, as applicable, under this Agreement or the other
Financing Agreements. In addition, if such Non-U.S. Lender is claiming exemption
from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code,
such Lender shall provide a certificate substantially in the Form of Exhibit
6.11(d) hereto. Such forms shall be delivered by each Non-U.S. Lender on or
before the date it becomes a party to this Agreement (or, in the case of a
Transferee that is a participation holder, on or before the date such
participation holder becomes a Transferee hereunder) and on or before the date,
if any, such Non-U.S. Lender changes its applicable lending office by
designating a different lending office (a "New Lending Office"). In addition,
each Non-U.S. Lender shall deliver such forms within 20 days after receipt of a
written request therefor from the Administrative Borrower or the Agent.
Notwithstanding any other provision of this Section 6.11, a Non-U.S. Lender
shall not be required to deliver after the date hereof any form pursuant to this
Section 6.11 that such Non-U.S. Lender is not legally able to deliver.
(e) The Borrowers and Guarantors shall not be required to
indemnify any Non-U.S. Lender, or pay any additional amounts to any Non-U.S.
Lender, in respect of United States Federal withholding tax pursuant to this
Agreement to the extent that (i) the obligation to withhold amounts with respect
to United States Federal withholding tax existed on the date such Non-U.S.
Lender became a party to this Agreement (or, in the case of a Transferee that is
a participation holder, on the date such participation holder became a
Transferee hereunder) or, with respect to payments to a New Lending Office, the
date such Non-U.S. Lender designated such New Lending Office with respect to a
Loan; provided, however, that this clause (i) shall not apply to the extent the
indemnity payment or additional amounts any Lender (or Transferee) through a New
Lending Office, would be entitled to receive (without regard to this clause (i))
do not exceed the indemnity payment or additional amounts that the person making
the assignment, participation or transfer to such Transferee, or Lender (or
Transferee) making the designation of such New Lending Office, would have been
entitled to receive in the absence of such assignment, participation, transfer
or designation, or (ii) the obligation to pay such additional amounts would not
have arisen but for a failure by such Non-U.S. Lender to comply with the
provisions of clause (d) above.
47
(f) Any Lender (or Transferee) claiming any indemnity payment
or additional payment amounts payable pursuant to this Section 6.11 shall use
reasonable efforts (consistent with legal and regulatory restrictions) to file
any certificate or document reasonably requested in writing by the
Administrative Borrower or to change the jurisdiction of its applicable lending
office if the making of such a filing or change would avoid the need for or
reduce the amount of any such indemnity payment or additional amount which may
thereafter accrue, would not require such Lender (or Transferee) to disclose any
information such Lender (or Transferee) deems confidential and would not, in the
sole determination of such Lender (or Transferee), be otherwise disadvantageous
to such Lender (or Transferee).
(g) Each Lender, Transferee and Agent that is a United States
Person within the meaning of Section 7701(a)(30) of the Code (each, a "U.S.
Person"), other than a Lender, Transferee or Agent that is exempt from United
States backup withholding tax based on the indicators described in Treasury
Regulation 1.6049-4(c)(1)(ii), shall deliver at the time(s) and in the manner(s)
if and to the extent such delivery is required under applicable law, to
Administrative Borrower and Agent (as applicable), two (2) copies of property
completed and duly executed originals of United States Internal Revenue Form W-9
or any successor form, certifying that such Person is exempt from United States
backup withholding tax on payments made by or on behalf of Borrowers and
Guarantors hereunder and the other Financing Agreements. Such forms shall be
delivered by each U.S. Person receiving payments made by or on behalf of
Borrowers and Guarantors on or before the date it becomes a party to this
Agreement. Such U.S. Person shall promptly deliver to Agent and Administrative
Borrower such new forms as may be reasonably requested by Agent or
Administrative Borrower. Notwithstanding any other provision of this Section
6.11(g), no U.S. Person shall be required to deliver any form pursuant to this
Section 6.11(g) that such U.S. Person is not legally able to deliver.
(h) The obligations of the Loan Parties under this Section
6.11 shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
6.12. Obligations Several; Independent Nature of Lenders' Rights.
The obligation of each Lender hereunder is several, and no Lender shall be
responsible for the obligation or commitment of any other Lender hereunder.
Nothing contained in this Agreement or any of the other Financing Agreements and
no action taken by the Lenders pursuant hereto or thereto shall be deemed to
constitute the Lenders to be a partnership, an association, a joint venture or
any other kind of entity. The amounts payable at any time hereunder to each
Lender shall be a separate and independent debt, and subject to Section 12.3
hereof, each Lender shall be entitled to protect and enforce its rights arising
out of this Agreement and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.
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SECTION 7. COLLATERAL REPORTING AND COVENANTS
7.1. Collateral Reporting.
(a) Borrowers shall provide Agent with the following documents
in a form reasonably satisfactory to Agent; provided, that, in the case of items
(i) and (ii) below, if such documents are provided to Working Capital Agent as
well, such documents shall be provided to Agent in the same form as provided to
Working Capital Agent:
(i) on a regular basis as reasonably required by Agent (but in
any event no more frequently than weekly if no Default or Event of Default has
occurred and is continuing), schedules of sales made, credits issued and cash
received;
(ii) as soon as reasonably practicable possible after the end
of each month (but in any event within fifteen (15) Business Days after the end
thereof), on a monthly basis or more frequently as Agent may request:
(A) perpetual inventory reports;
(B) inventory reports by location and category (and
including the amounts of Inventory and the value thereof at any leased locations
and at premises of warehouses, processors or other third parties);
(C) agings of accounts receivable (together with a
reconciliation to the previous month's aging and general ledger);
(D) agings of accounts payable (and including
information indicating the amounts owing to owners and lessors of leased
premises, warehouses, processors and other third parties from time to time in
possession of any Collateral); and
(E) a Borrowing Base Certificate, (in the same form
as and at such times as delivered to Working Capital Agent);
(iii) upon Agent's good faith request: (A) copies of customer
statements, purchase orders, sales invoices, credit memos, remittance advices
and reports, and copies of deposit slips and bank statements; (B) copies of
shipping and delivery documents; and (C) copies of purchase orders, invoices and
delivery documents for Inventory and Equipment acquired by any Borrower or
Guarantor;
(iv) such other reports as to the Collateral as Agent shall
reasonably request from time to time.
(b) If any Borrower's or Guarantor's records or reports of the
Collateral are prepared or maintained by an accounting service, contractor,
shipper or other agent, subject to the terms of the Term Loan Intercreditor
Agreement, such Borrower and Guarantor hereby irrevocably authorizes such
service, contractor, shipper or agent to deliver such records, reports, and
related documents to Agent and to follow Agent's instructions with respect to
further services at any time that an Event of Default exists or has occurred and
is continuing.
49
7.2. Accounts Covenants.
(a) Borrowers shall notify Agent promptly of: (i) any material
delay in any Borrower's performance of any of its material obligations to any
account debtor or the assertion of any material claims, offsets, defenses or
counterclaims by any account debtor, or any material disputes with account
debtors, or any settlement, adjustment or compromise thereof and (ii) all
material adverse information known to any Borrower or Guarantor relating to the
financial condition of any account debtor. No credit, discount, allowance or
extension or agreement for any of the foregoing shall be granted to any account
debtor without Agent's consent, except in the ordinary course of a Borrower's or
Guarantor's business in accordance with normal practices and policies previously
disclosed in writing to Agent and except as set forth below and in the schedules
delivered to Agent pursuant to Section 7.1(a) above. So long as no Event of
Default exists or has occurred and is continuing, Borrowers and Guarantors shall
settle, adjust or compromise any claim, offset, counterclaim or dispute with any
account debtor. Subject to the terms of the Term Loan Intercreditor Agreement,
at any time that an Event of Default exists or has occurred and is continuing,
Agent shall, at its option, have the exclusive right to settle, adjust or
compromise any claim, offset, counterclaim or dispute with account debtors or
grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any
invoice delivered by Borrowers to Agent or schedule thereof delivered to Agent
shall be true and complete in all material respects, (ii) all payments made
thereon shall immediately be delivered to Agent pursuant to the terms of this
Agreement, (iii) no credit, discount, allowance or extension or agreement for
any of the foregoing shall be granted to any account debtor except as reported
to Agent in accordance with this Agreement and except for credits, discounts,
allowances or extensions made or given in the ordinary course of each Borrower's
business in accordance with normal practices and policies previously disclosed
to Agent, (iv) there shall be no setoffs, deductions, contras, defenses,
counterclaims or disputes existing or asserted with respect thereto except as
reported to Agent in accordance with the terms of this Agreement, (v) none of
the transactions giving rise thereto will violate any applicable foreign,
Federal, State or local laws or regulations in any material respect, all
documentation relating thereto will be legally sufficient under such laws and
regulations in all material respects and all such documentation will be legally
enforceable in accordance with its terms in all material respects.
(c) Agent shall have the right at any time or times after the
Working Capital Loan Termination Date, in Agent's name or in the name of a
nominee of Agent, to verify the validity, amount or any other matter relating to
any Receivables or other Collateral, by mail, telephone, facsimile transmission
or otherwise.
7.3. Inventory Covenants. With respect to the Inventory: (a) each
Borrower and Guarantor shall at all times maintain inventory records reasonably
satisfactory to Agent, keeping records that are correct and accurate in all
material respects including records itemizing and describing the kind, type,
quality and quantity of Inventory, such Borrower's or Guarantor's cost therefor
and daily withdrawals therefrom and additions thereto; (b) Borrowers and
Guarantors shall conduct a physical count of the Inventory at least once each
year but at any time or times as Agent may request on or after the occurrence
and during the continuance of an Event of Default, and as soon as reasonably
practicable following such physical inventory shall supply Agent with a report
in the form and with such specificity as may be reasonably satisfactory to
50
Agent concerning such physical count; (c) Borrowers and Guarantors shall not
remove any Inventory with a Value in excess of $250,000, in the case of
Inventory at any one (1) location, or in excess of $500,000 in the aggregate for
all Inventory from the locations set forth or permitted herein, without the
prior written consent of Agent, such consent not to be unreasonably withheld or
delayed so long as no Default or Event of Default has occurred and is
continuing, except for sales of Inventory in the ordinary course of its business
(including amounts shipped to outside processors identified on Schedule 8.2 to
the Information Certificate (subject to the rights of Borrowers and Guarantors
to deliver Inventory into the possession of additional processors in accordance
with Section 9.2)) and except to move Inventory directly from one location set
forth or permitted herein to another such location and except for Inventory
shipped from the manufacturer thereof to such Borrower or Guarantor which is in
transit to the locations set forth or permitted herein; (d) upon Agent's
request, Borrowers shall, at their expense, no more than one (1) time in any
twelve (12) month period, but at any time or times as Agent may request on or
after the occurrence and during the continuance of an Event of Default, deliver
or cause to be delivered to Agent written appraisals as to the Inventory in
form, scope and methodology substantially the same as reflected in the
appraisals delivered to Agent prior to the Date hereof or otherwise reasonably
acceptable to Agent and by an appraiser reasonably acceptable to Agent,
addressed to Agent and Lenders and upon which Agent and Lenders are expressly
permitted to rely; provided, however, that so long as no Default or Event of
Default shall have occurred and be continuing, Agent shall not retain any
appraiser without the prior written consent of Administrative Borrower
Representative, which consent shall not be unreasonably withheld or delayed; (e)
Borrowers and Guarantors shall produce, use, store and maintain the Inventory
with all reasonable care and caution and in accordance with applicable standards
of any insurance and in material conformity with applicable laws (including the
requirements of the Federal Fair Labor Standards Act of 1938, as amended and all
rules, regulations and orders related thereto); (f) none of the Inventory or
other Collateral constitutes farm products or the proceeds thereof; (g) as
between Borrowers, Agent and Lenders, each Borrower and Guarantor assumes all
responsibility and liability arising from or relating to the production, use,
sale or other disposition of the Inventory; (h) Borrowers and Guarantors shall
not sell Inventory to any customer on approval, or any other basis which
entitles the customer to return or may obligate any Borrower or Guarantor to
repurchase such Inventory; (i) Borrowers and Guarantors shall keep the Inventory
in good and marketable condition, ordinary wear and tear excepted; and (j)
Borrowers and Guarantors shall not, without prior written notice to Agent or the
specific identification of such Inventory in a report with respect thereto
provided by Administrative Borrower Representative to Agent pursuant to Section
7.1(a) hereof, acquire or accept any Inventory on consignment or approval,
except in accordance with past practices and policies.
7.4. Equipment and Real Property Covenants. With respect to the
Equipment and Real Property: (a) upon Agent's reasonable request, Borrowers and
Guarantors shall, at their expense, no more than once in any twelve (12) month
period, but at any time or times as Agent may request on or after the occurrence
and during the continuance of an Event of Default, deliver or cause to be
delivered to Agent written appraisals as to the Equipment and/or the Real
Property in form, scope and methodology substantially the same as in the
appraisals delivered to Agent prior to the date hereof or otherwise reasonably
acceptable to Agent and by an appraiser reasonably acceptable to Agent,
addressed to Agent and upon which Agent is expressly permitted to rely;
provided, however, that so long as no Default or Event of Default shall have
51
occurred and be continuing, Agent shall not retain any appraiser without the
prior written consent of Administrative Borrower Representative, which consent
shall not be unreasonably withheld or delayed; (b) Borrowers and Guarantors
shall keep the Equipment in good order and repair (ordinary wear and tear
excepted); (c) Borrowers and Guarantors shall use the Equipment and Real
Property with all reasonable care and caution and in accordance with applicable
standards of any insurance and in conformity with all applicable laws in all
material respects; (d) the Equipment is and shall be used in the business of
Borrowers and Guarantors and not for personal, family, household or farming use;
(e) Borrowers and Guarantors shall not remove any Equipment with a value in
excess of $250,000 in the aggregate for all Equipment from the locations set
forth or permitted herein, except to the extent necessary to have any Equipment
repaired or maintained in the ordinary course of its business or to move
Equipment directly from one location set forth or permitted herein to another
such location and except for the movement of motor vehicles used by or for the
benefit of such Borrower or Guarantor in the ordinary course of business; (f)
the Equipment is now and shall remain personal property and Borrowers and
Guarantors shall not permit any of the Equipment to be or become a part of or
affixed to real property; and (g) as among Borrowers, Agent and Lender, each
Borrower and Guarantor assumes all responsibility and liability arising from the
use of the Equipment and Real Property.
7.5. Power of Attorney. Each Borrower and Guarantor hereby irrevocably
designates and appoints Agent (and all persons designated by Agent) as such
Borrower's and Guarantor's true and lawful attorney-in-fact, and authorizes
Agent, in such Borrower's, Guarantor's or Agent's name, subject to the terms of
the Term Loan Intercreditor Agreement, to: (a) at any time an Event of Default
exists or has occurred and is continuing (i) demand payment on Receivables or
other Collateral, (ii) enforce payment of Receivables by legal proceedings or
otherwise, (iii) exercise all of such Borrower's or Guarantor's rights and
remedies to collect any Receivable or other Collateral, (iv) sell or assign any
Receivable upon such terms, for such amount and at such time or times as the
Agent deems advisable, (v) settle, adjust, compromise, extend or renew an
Account, (vi) discharge and release any Receivable, (vii) prepare, file and sign
such Borrower's or Guarantor's name on any proof of claim in bankruptcy or other
similar document against an account debtor or other obligor in respect of any
Receivables or other Collateral, (viii) notify the post office authorities to
change the address for delivery of remittances from account debtors or other
obligors in respect of Receivables or other proceeds of Collateral to an address
designated by Agent, and open and dispose of all mail addressed to such Borrower
or Guarantor and handle and store all mail relating to the Collateral, (ix) sign
such Borrower's or Guarantor's name on any verification of Receivables and
notices thereof to account debtors or any secondary obligors or other obligors
in respect thereof, and (x) do all acts and things which are necessary, in
Agent's good faith determination, to fulfill such Borrower's or Guarantor's
obligations under this Agreement and the other Financing Agreements; and (b) at
any time to (i) take control in any reasonable manner of any item of payment in
respect of Receivables or constituting Collateral or otherwise received in or
for deposit in the Blocked Accounts or otherwise received by Agent or any
Lender, (ii) have access to any lockbox or postal box into which remittances
from account debtors or other obligors in respect of Receivables or other
proceeds of Collateral are sent or received, (iii) endorse such Borrower's or
Guarantor's name upon any items of payment in respect of Receivables or
constituting Collateral or otherwise received by Agent and any Lender and
deposit the same in Agent's account for application to the Obligations and (iv)
endorse such Borrower's or Guarantor's name upon any
52
chattel paper, document, instrument, invoice, or similar document or agreement
relating to any Receivable or any goods pertaining thereto or any other
Collateral, including any warehouse or other receipts, or bills of lading and
other negotiable or non-negotiable documents. Each Borrower and Guarantor hereby
releases Agent and Lenders and their respective officers, employees and
designees from any liabilities arising from any act or acts under this power of
attorney and in furtherance thereof, whether of omission or commission, except
as a result of Agent's or any Lender's own gross negligence or wilful misconduct
as determined pursuant to a final non-appealable order of a court of competent
jurisdiction.
7.6. Right to Cure. Agent may at any time after an Event of Default has
occurred and is continuing, at its option, upon reasonable prior notice to
Administrative Borrower Representative, (a) cure any default by any Borrower or
Guarantor under any material agreement with a third party if (i) such Borrower
or Guarantor is not disputing such default or are not proceeding to cure the
same and (ii) the failure to cure could reasonably be expected to materially and
adversely affect the Collateral, its value or the ability of Agent to collect,
sell or otherwise dispose of the Collateral or the rights and remedies of Agent
or any Lender therein or the ability of any Borrower or Guarantor to perform its
obligations hereunder or under any of the other Financing Agreements, (b) pay or
bond on appeal any final judgment entered against any Borrower or Guarantor if
(i) such Borrower is not appealing the same and (ii) the failure to pay or bond
such judgment could reasonably be expected to materially and adversely affect
the Collateral, (c) discharge taxes, liens, security interests or other
encumbrances at any time levied on or existing with respect to the Collateral
and pay any amount, incur any expense or perform any act which, in Agent's
reasonable judgment, is necessary or appropriate to preserve, protect, insure or
maintain the Collateral and the rights of Agent and Lenders with respect
thereto; provided that Agent shall not exercise its rights pursuant to this
Section 7.6 to discharge such taxes, liens, security interests or other
encumbrances that are permitted under Section 9.8 hereof, unless either (i) an
Event of Default has occurred and is continuing, or (ii) with respect to liens,
security interests or other encumbrances, the beneficiary or holder of such
lien, security interest or other encumbrance has the right to take action
against or with respect to the Collateral, the exercise of which right is not
then subject to an effective stay pursuant to applicable law. Agent may add any
amounts so expended to the Obligations and charge any Borrower's account
therefor, such amounts to be repayable by Borrowers on demand. Agent and Lenders
shall be under no obligation to effect such cure, payment or bonding and shall
not, by doing so, be deemed to have assumed any obligation or liability of any
Borrower or Guarantor. Any payment made or other action taken by Agent or any
Lender under this Section shall be without prejudice to any right to assert an
Event of Default hereunder and to proceed accordingly.
7.7. Access to Premises. From time to time as reasonably requested by
Agent, at the cost and expense of Borrowers, (a) Agent or its designee shall,
subject to applicable safety regulations and without disruption to ordinary
operations, have reasonable access to all of each Borrower's and Guarantor's
premises during normal business hours and after reasonable notice to Parent, or
at any time and without notice to Administrative Borrower Representative if an
Event of Default has occurred and is continuing, for the purposes of inspecting,
verifying and auditing the Collateral and all of each Borrower's and Guarantor's
books and records, including the Records, and (b) each Borrower and Guarantor
shall promptly furnish to Agent such copies of such books and records or
extracts therefrom as Agent may reasonably request, and Agent or any
53
Lender or Agent's designee may use during normal business hours such of any
Borrower's and Guarantor's personnel, equipment, supplies and premises as may be
reasonably necessary for the foregoing and if an Event of Default exists or has
occurred and is continuing (subject to the terms of the Term Loan Intercreditor
Agreement) for the collection of Receivables and realization of other
Collateral.
SECTION 8. REPRESENTATIONS AND WARRANTIES
Each Borrower and Guarantor hereby represents and warrants to Agent and
Lenders the following (which shall survive the execution and delivery of this
Agreement):
8.1. Corporate Existence, Power and Authority. Each Borrower and
Guarantor is a corporation or limited liability company, as applicable, duly
organized and in good standing under the laws of its state of organization and
is duly qualified as a foreign corporation or limited liability company, as
applicable, and in good standing in all states or other jurisdictions where the
nature and extent of the business transacted by it or the ownership of assets
makes such qualification necessary, except for those jurisdictions in which the
failure to so qualify could not reasonably be expected to have a Material
Adverse Effect. The execution, delivery and performance of this Agreement, the
other Financing Agreements and the transactions contemplated hereunder and
thereunder (a) are all within each Borrower's and Guarantor's organizational
powers, (b) have been duly authorized, (c) are not in contravention of law or
the terms of any Borrower's or Guarantor's certificate of incorporation,
by-laws, or other organizational documentation, or any indenture, agreement or
undertaking to which any Borrower or Guarantor is a party or by which any
Borrower or Guarantor or its property are bound and (d) will not result in the
creation or imposition of, or require or give rise to any obligation to grant,
any lien, security interest, charge or other encumbrance upon any property of
any Borrower or Guarantor (other than those in favor of Agent and Lenders, the
Working Capital Agent and the New Notes Trustee). This Agreement and the other
Financing Agreements to which any Borrower or Guarantor is a party constitute
legal, valid and binding obligations of such Borrower and Guarantor enforceable
in accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, receivership, moratorium or
other laws affecting creditor's rights generally and by general principles of
equity.
8.2. Name; State of Organization; Chief Executive Office; Collateral
Locations.
(a) The exact legal name of each Borrower and Guarantor is as
set forth on the signature page of this Agreement and in the Information
Certificate, subject to the right of Borrowers and Guarantors to change such
legal name in accordance with Section 9.1(b) below. No Borrower or Guarantor
has, during the five years prior to the date of this Agreement, been known by or
used any other corporate or fictitious name or been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any Person,
or acquired any of its property or assets out of the ordinary course of
business, except as set forth in the Information Certificate. No Borrower or
Guarantor has filed any federal, state or local tax return in a name other than
its legal name as set forth on the signature page of the Information
Certificate.
54
(b) Each Borrower and Guarantor is an organization of the type
and organized in the jurisdiction set forth in the Information Certificate,
subject to the right of Guarantors (other than Parent) to merge or consolidate
in accordance with Section 9.7(a). The Information Certificate accurately sets
forth the organizational identification number of each Borrower and Guarantor or
accurately states that such Borrower or Guarantor has none and accurately sets
forth the federal employer identification number of each Borrower and Guarantor.
(c) The chief executive office and mailing address of each
Borrower and Guarantor and each Borrower's and Guarantor's Records concerning
Accounts are located only at the address identified as such in Schedule 8.2 to
the Information Certificate and its only other places of business and the only
other locations of Collateral with a value in excess of $250,000 in the
aggregate, if any, are the addresses set forth in Schedule 8.2 to the
Information Certificate, subject to the rights of any Borrower or Guarantor to
establish new locations in accordance with Section 9.2 below. The Information
Certificate correctly identifies any of such locations which are not owned by a
Borrower or Guarantor and sets forth the owners and/or operators thereof.
8.3. Financial Statements; No Material Adverse Effect. All financial
statements relating to any Borrower or Guarantor which have been or may
hereafter be delivered by any Borrower or Guarantor to Agent and Lenders have
been prepared in accordance with GAAP (except to the extent such statements are
subject to bankruptcy restructuring and "fresh start" accounting adjustments and
normal year-end adjustments and do not include any notes) and fairly present in
all material respects the financial condition and the results of operation of
such Borrower and Guarantor as at the dates and for the periods set forth
therein. Except as disclosed in any interim financial statements furnished by
Borrowers and Guarantors to Agent prior to the date of this Agreement and the
filing of the Chapter 11 Cases, there has been no act, condition or event which
has had or could reasonably be expected to have a Material Adverse Effect since
the date of the most recent audited financial statements of any Borrower or
Guarantor furnished by any Borrower or Guarantor to Agent prior to the date of
this Agreement.
8.4. Priority of Liens; Title to Properties. The security interests and
liens granted to Agent under this Agreement and the other Financing Agreements
constitute valid and perfected first priority liens and security interests in
and upon the Collateral subject only to the liens indicated on Schedule 8.4 to
the Information Certificate and the other liens permitted under Section 9.8
hereof. Each Borrower and Guarantor has good and indefeasible fee simple title
to or valid leasehold interests in all of its Real Property (subject to such
exceptions set forth in the mortgage title insurance policy, as accepted by
Agent, that insures each Mortgage) and good and valid title to all of its other
properties and assets subject to no liens, mortgages, pledges, security
interests, encumbrances or charges of any kind, except, in each case, those
granted to Agent and such others as are specifically listed on Schedule 8.4 to
the Information Certificate or permitted under Section 9.8 hereof.
8.5. Tax Returns. Each Borrower and Guarantor has filed, or caused to
be filed, in a timely manner all federal, and material State and other tax
returns, reports and declarations which are required to be filed by it. All
information in such tax returns, reports and declarations is complete and
accurate in all material respects. Each Borrower and Guarantor has
55
paid or caused to be paid all taxes shown to be due and payable on any such tax
returns or claimed due and payable in any assessment received by it, except
taxes the validity of which are being contested in good faith by appropriate
proceedings diligently pursued and available to such Borrower or Guarantor and
with respect to which adequate reserves have been set aside on its books.
Adequate provision has been made for the payment of all accrued and unpaid
Federal, and material State, county, local, foreign and other taxes whether or
not yet due and payable and whether or not disputed.
8.6. Litigation. Except as set forth on Schedule 8.6 to the Information
Certificate and as Borrowers may hereafter notify Agent in accordance with
Section 9.6(c), (a) there is no investigation by any Governmental Authority
pending, or to Borrower's or Guarantor's knowledge threatened, against or
affecting any Borrower or Guarantor, its or their assets or business and (b)
there is no action, suit, proceeding or claim by any Person pending, or to the
best of any Borrower's or Guarantor's knowledge threatened, against any Borrower
or Guarantor or its or their assets or goodwill, or against or affecting any
transactions contemplated by this Agreement, in each case, which could
reasonably be expected to have a Material Adverse Effect.
8.7. Compliance with Other Agreements and Applicable Laws.
(a) Borrowers and Guarantors are not in default in any respect
under, or in violation in any respect of the terms of, any material agreement,
contract, instrument, lease or other commitment to which it is a party or by
which it or any of its assets are bound which could reasonably be expected to
have a Material Adverse Effect. Borrowers and Guarantors are in compliance with
the requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority relating to their respective businesses, including,
without limitation, those set forth in or promulgated pursuant to the
Occupational Safety and Health Act of 1970, as amended, the Fair Labor Standards
Act of 1938, as amended, ERISA, the Code, as amended, and the rules and
regulations thereunder, except, in each case, to the extent the failure to do so
could not reasonably be expected to have a Material Adverse Effect.
(b) Borrowers and Guarantors have obtained all material
permits, licenses, approvals, consents, certificates, orders or authorizations
of any Governmental Authority required for the lawful conduct of its business
(the "Permits") except, in each case, to the extent the failure to do so could
not reasonably be expected to have a Material Adverse Effect. All of the Permits
are valid and subsisting and in full force and effect except, in each case, to
the extent the failure to do so could not reasonably be expected to have a
Material Adverse Effect. There are no actions, claims or proceedings pending or
to the best of any Borrower's or Guarantor's knowledge, threatened that seek the
revocation, cancellation, suspension or modification of any of the Permits that
could not reasonably be expected to have a Material Adverse Effect.
8.8. Environmental Compliance. Except as could not reasonably be
expected to result in a Material Adverse Effect for any Borrower or Guarantor,
(a) Borrowers, Guarantors and any Subsidiary of any Borrower or Guarantor have
not generated, used, stored, treated, transported, manufactured, handled,
produced or disposed of any Hazardous Materials, on or off
56
its premises (whether or not owned by it) in any manner which at any time
violates any applicable Environmental Law or Environmental Permit, and the
operations of Borrowers, Guarantors and any Subsidiary of any Borrower or
Guarantor comply with all Environmental Laws or Environmental Permits; (b) there
is no investigation by any Governmental Authority or any proceeding, complaint,
order, directive, claim, citation or notice by any Governmental Authority or any
other person nor is any pending, or to any Borrower's or Guarantor's knowledge,
threatened, with respect to any non-compliance with or violation of the
requirements of any Environmental Law by any Borrower or Guarantor and any
Subsidiary of any Borrower or Guarantor or the release, spill or discharge,
threatened or actual, of any Hazardous Material or the generation, use, storage,
treatment, transportation, manufacture, handling, production or disposal of any
Hazardous Materials or any other environmental, health or safety matter, which
adversely affects or could reasonably be expected to adversely affect any
Borrower or Guarantor or its or their business, operations or assets, including
an adverse effect from a Borrower or Guarantor incurring liability arising from
contamination of any properties to or at which such Borrower or Guarantor has
transported, stored or disposed of any Hazardous Materials; (c) Borrowers,
Guarantors and their Subsidiaries have no material liability (contingent or
otherwise) in connection with a release, spill or discharge, threatened or
actual, of any Hazardous Materials or the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any Hazardous
Materials; and (d) Borrowers, Guarantors and their Subsidiaries have, or have
timely applied for receipt or renewal of, all Environmental Permits, and all of
such Environmental Permits are valid and in full force and effect or, if not,
Borrowers and Guarantors have timely applied for the renewal of any such
Environmental Permit.
8.9. Employee Benefits.
(a) Each Plan is in compliance in all material respects with
the applicable provisions of ERISA, the Code and other Federal or State law.
Each Plan which is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the Internal Revenue Service or
an application has been made for such letter and to the best of any Borrower's
or Guarantor's knowledge, nothing has occurred which would reasonably be
expected to cause the loss of such qualification. Each Borrower and its ERISA
Affiliates have made all required contributions, in all material respects, to
any Plan subject to Section 412 of the Code, and in the preceding six (6) years,
no application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending, or to the best of any Borrower's or
Guarantor's knowledge, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan except those that could not,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(c) (i) In the preceding six (6) years, no ERISA Event has
occurred or is reasonably expected to occur; (ii) the current value of each
Plan's assets (determined in accordance with the assumptions used for funding
such Plan pursuant to Section 412 of the Code) are not less than such Plan's
liabilities under Section 4001(a)(16) of ERISA; and (iii) each Borrower and
Guarantor, and their ERISA Affiliates, have not engaged in a transaction that
57
would be subject to Section 4069 or 4212(c) of ERISA; provided however, that
none of (i), (ii) or (iii) individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.
8.10. Bank Accounts. All of the deposit accounts, investment accounts
or other accounts in the name of or used by any Borrower or Guarantor maintained
at any bank or other financial institution are set forth on Schedule 8.10 to the
Information Certificate, subject to the right of each Borrower and Guarantor to
establish new accounts in accordance with Section 5.2 hereof.
8.11. Intellectual Property. Each Borrower and Guarantor owns or
licenses or otherwise has the right to use all Intellectual Property necessary
for the operation of its business as presently conducted or proposed to be
conducted, except to the extent that the failure to do so could not reasonably
be expected to have a Material Adverse Effect. As of the date hereof, Borrowers
and Guarantors do not have any Intellectual Property registered, or subject to
pending applications, in the United States Patent and Trademark Office or any
similar office or agency in the United States, any State thereof, any political
subdivision thereof or in any other country, other than those described in
Schedule 8.11 to the Information Certificate and has not granted any licenses
with respect thereto other than as set forth in Schedule 8.11 to the Information
Certificate. No event has occurred which permits or would permit after notice or
passage of time or both, the revocation, suspension or termination of such
rights, except to the extent the same could not reasonably be expected to have a
Material Adverse Effect. To any Borrower's and Guarantor's knowledge, no slogan
or other advertising device, product, process, method, substance or other
Intellectual Property or goods bearing or using any Intellectual Property
presently contemplated to be sold by or employed by any Borrower or Guarantor
infringes any patent, trademark, servicemark, tradename, copyright, license or
other Intellectual Property owned by any other Person presently and no claim or
litigation is pending or, to any Borrower's knowledge, threatened against or
affecting any Borrower or Guarantor contesting its right to sell or use any such
Intellectual Property, except to the extent that the same could not reasonably
be expected to have a Material Adverse Effect. Schedule 8.11 to the Information
Certificate sets forth all of the agreements or other arrangements of each
Borrower and Guarantor pursuant to which such Borrower or Guarantor has a
license or other right to use any material trademarks, logos, designs,
representations or other Intellectual Property owned by another person as in
effect on the date hereof and the dates of the expiration of such agreements or
other arrangements of such Borrower or Guarantor as in effect on the date hereof
(collectively, together with such agreements or other arrangements as may be
entered into by any Borrower or Guarantor after the date hereof, collectively,
the "License Agreements" and individually, a "License Agreement").
8.12. Subsidiaries; Affiliates; Capitalization; Solvency.
(a) No Borrower or Guarantor has any direct or indirect
Subsidiaries or is engaged in any joint venture or partnership except as set
forth in Schedule 8.12 to the Information Certificate, subject to the rights of
Borrowers to make investments to the extent permitted by Section 9.10.
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(b) Each Borrower and Guarantor is the record and beneficial
owner of all of the issued and outstanding shares of Capital Stock of each of
the Subsidiaries listed on Schedule 8.12 to the Information Certificate as being
owned by such Borrower or Guarantor and there are no proxies, irrevocable or
otherwise, with respect to such shares and no equity securities of any of the
Subsidiaries are or may become required to be issued by reason of any options,
warrants, rights to subscribe to, calls or commitments of any kind or nature and
there are no contracts, commitments, understandings or arrangements by which any
Subsidiary is or may become bound to issue additional shares of it Capital Stock
or securities convertible into or exchangeable for such shares (subject in each
of the foregoing cases to the rights of Borrowers and Guarantors to issue
additional shares of Capital Stock in accordance with Section 9.7(b)).
(c) The issued and outstanding shares of Capital Stock of each
Borrower and Guarantor are directly and beneficially owned and held by the
persons indicated in the Information Certificate (subject in each of the
foregoing cases to the rights of Borrowers and Guarantors to issue additional
shares of Capital Stock in accordance with Section 9.7(b)), and in each case all
of such shares have been duly authorized and are fully paid and non-assessable,
free and clear of all claims, liens, pledges and encumbrances of any kind,
except as disclosed in writing to Agent prior to the date hereof or permitted by
Section 9.8.
(d) The Borrowers and Guarantors taken as a whole, are Solvent
and will continue to be Solvent after the creation of the Obligations, the
security interests of Agent and the other transaction contemplated hereunder.
8.13. Labor Disputes.
(a) Set forth on Schedule 8.13 to the Information Certificate
is a list (including dates of termination) of all collective bargaining or
similar agreements currently in effect on the date of this Agreement between or
applicable to each Borrower and Guarantor and any union, labor organization or
other bargaining agent in respect of the employees of any Borrower or Guarantor
on the date hereof, except to the extent that any of the above would not, either
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.
(b) Except as set forth on Schedule 8.13 to the Information
Certificate or as Borrowers may hereafter notify Agent in accordance with
Section 9.6(c), there is (i) no significant unfair labor practice complaint
pending against any Borrower or Guarantor or, to the best of any Borrower's or
Guarantor's knowledge, threatened against it, before the National Labor
Relations Board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is
pending on the date hereof against any Borrower or Guarantor or, to best of any
Borrower's or Guarantor's knowledge, threatened against it, and (ii) no
significant strike, labor dispute, slowdown or stoppage is pending against any
Borrower or Guarantor or, to the best of any Borrower's or Guarantor's
knowledge, threatened against any Borrower or Guarantor, except to the extent
that any of the foregoing would not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
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8.14. Restrictions on Subsidiaries. Except for restrictions contained
in this Agreement or any other agreement with respect to Indebtedness of any
Borrower or Guarantor permitted hereunder as in effect on the date hereof, there
are no contractual or consensual restrictions on any Borrower or Guarantor or
any of its Subsidiaries which prohibit or otherwise restrict (a) the transfer of
cash or other assets (i) between any Borrower or Guarantor and any of its or
their Subsidiaries or (ii) between any Subsidiaries of any Borrower or Guarantor
or (b) the ability of any Borrower or Guarantor or any of its or their
Subsidiaries to incur Indebtedness or grant security interests to Agent or any
Lender in the Collateral.
8.15. Material Contracts. Schedule 8.15 to the Information Certificate
sets forth all Material Contracts to which any Borrower or Guarantor is a party
or is bound as of the date hereof. Borrowers and Guarantors have delivered true,
correct and complete copies of such Material Contracts to Agent on or before the
date hereof. Borrowers and Guarantors are not in breach or in default in any
material respect of or under any Material Contract and have not received any
notice of the intention of any other party thereto to terminate any Material
Contract as a result of a breach by Borrowers.
8.16. Intentionally Omitted.
8.17. Accuracy and Completeness of Information. All information
furnished (other than projections or forward-looking statements) by or on behalf
of any Borrower or Guarantor in writing to Agent or any Lender in connection
with this Agreement or any of the other Financing Agreements or any transaction
contemplated hereby or thereby, including all information on the Information
Certificate is true and correct in all material respects on the date as of which
such information is dated or certified and does not omit any material fact
necessary in order to make such information not materially misleading. No event
or circumstance has occurred which has had or could reasonably be expected to
have a Material Adverse Effect, which has not been fully and accurately
disclosed to Agent in writing prior to the date hereof.
8.18. Working Capital Loan Documents. No event of default exists, or
has occurred and is continuing under and as defined in the Working Capital Loan
Documents. Agent has received true, correct and complete copies of all of the
Working Capital Loan Documents.
8.19. Survival of Warranties; Cumulative. All representations and
warranties contained in this Agreement or any of the other Financing Agreements
shall survive the execution and delivery of this Agreement. The representations
and warranties set forth herein shall be cumulative and in addition to any other
representations or warranties which any Borrower or Guarantor shall now or
hereafter give, or cause to be given, to Agent or any Lender under the Financing
Agreements.
SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS
9.1. Maintenance of Existence.
(a) Each Borrower and Guarantor shall at all times preserve,
renew and keep in full force and effect its corporate or limited liability
company, as the case may be, existence and rights and franchises with respect
thereto and maintain in full force and effect all
60
licenses, trademarks, tradenames, approvals, authorizations, leases, contracts,
Permits and Environmental Permits necessary to carry on the business as
presently or proposed to be conducted, except as to any Guarantor other than
Parent as permitted under the Financing Agreements and except to the extent that
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.
(b) No Borrower or Guarantor shall change its name unless each
of the following conditions is satisfied: (i) Agent shall have received not less
than twenty-one (21) days prior written notice from Administrative Borrower
Representative of such proposed change in its name, which notice shall
accurately set forth the new name; and (ii) Agent shall have received from
Administrative Borrower Representative a copy of the amendment to the
Certificate of Incorporation or comparable governing document of such Borrower
or Guarantor providing for the name change certified by the Secretary of State
of the jurisdiction of incorporation or organization of such Borrower or
Guarantor promptly after it is available.
(c) No Borrower or Guarantor shall change its chief executive
office or organizational identification number (or if it does not have one,
shall not acquire one) unless Agent shall have received not less than twenty-one
(21) days' prior written notice from Administrative Borrower Representative of
such proposed change, which notice shall set forth such information with respect
thereto as Agent may reasonably require and Agent shall have received such
agreements as Agent may reasonably require in connection therewith. No Borrower
or Guarantor shall change its type of organization, jurisdiction of organization
or other legal structure, except as otherwise permitted in Section 9.7(b) or
otherwise under the Financing Agreements.
9.2. New Collateral Locations. Each Borrower and Guarantor may open any
new location within the continental United States or deliver Collateral, in the
ordinary course of business, to new third party processor locations provided
Administrative Borrower Representative (a) gives Agent fifteen (15) days prior
written notice of the intended opening of any such new location and (b) executes
and delivers, or causes to be executed and delivered, to Agent such agreements,
documents, and instruments as Agent may deem reasonably necessary or desirable
to protect its interests in the Collateral at such location.
9.3. Compliance with Laws, Regulations, Etc.
(a) Each Borrower and Guarantor shall, and shall cause any
Subsidiary to, at all times, use commercially reasonable efforts to comply in
all material respects with all laws, rules, regulations, licenses, approvals,
orders, Environmental Permits and other Permits applicable to it and duly
observe all requirements of any foreign, Federal, State or local Governmental
Authority, except to the extent that the failure to do so could not reasonably
be expected to have a Material Adverse Effect.
(b) Administrative Borrower Representative shall give written
notice to Agent no later than thirty (30) days after any executive officer of
any Borrower or Guarantor receives any written notice of, or any executive
officer of any Borrower or Guarantor otherwise obtains actual knowledge of, (i)
the occurrence of any event involving the release, spill or discharge,
threatened or actual, of any Hazardous Material, other than in the ordinary
course of
61
business and other than as permitted under any applicable Environmental Law, or
(ii) any investigation, proceeding, complaint, order, directive, claims,
citation or notice with respect to: (A) any non-compliance with or violation of
any Environmental Law by any Borrower or Guarantor or (B) the release, spill or
discharge, threatened or actual, of any Hazardous Material other than in the
ordinary course of business and other than as permitted under any applicable
Environmental Law; provided, however, that Borrowers or Guarantors shall provide
such notice only in the event that the matter in clause (i) or (ii) is
reasonably anticipated to result in Borrower or Guarantor incurring liability or
costs pursuant to Environmental Laws in any fiscal year in excess of $250,000
individually or $5,000,000 in the aggregate. Borrower shall provide copies to
Agent of all environmental surveys, audits, assessments, feasibility studies and
results of remedial investigations related to items for which notice is required
pursuant to this Section 9.3(b), as the Agent reasonably requests. Each Borrower
and Guarantor shall take prompt action to respond to any material non-compliance
with any of the Environmental Laws and shall regularly report to Agent on such
response.
(c) Without limiting the generality of the foregoing, whenever
Agent reasonably determines that there is non-compliance, or any condition which
requires any action by or on behalf of any Borrower or Guarantor in order to
avoid any non-compliance, with any Environmental Law, Borrowers shall prevent or
mitigate a material loss in value to any Eligible Real Property arising under
Environmental Law, and at Agent's reasonable request and Borrowers' expense: (i)
cause an independent environmental engineer reasonably acceptable to Agent to
conduct such tests of the site where non-compliance or alleged non-compliance
with such Environmental Laws has occurred as to such non-compliance or alleged
non-compliance and prepare and deliver to Agent a report as to such
non-compliance or alleged non-compliance setting forth the results of such
tests, a proposed plan for responding to any environmental problems described
therein, and an estimate of the costs thereof and (ii) provide to Agent a
supplemental report of such engineer whenever the scope of such non-compliance
or alleged non-compliance, or such Borrower's or Guarantor's response thereto or
the estimated costs thereof, shall change in any material respect.
(d) Each Borrower and Guarantor shall indemnify and hold
harmless Agent and Lenders and their respective directors, officers, employees,
agents, invitees, representatives, successors and assigns, from and against any
and all losses, claims, damages, liabilities, costs, and expenses (including
reasonable attorneys' fees and expenses) directly or indirectly arising out of
or attributable to the use, generation, manufacture, reproduction, storage,
release, threatened release, spill, discharge, disposal or presence of a
Hazardous Material, including the costs of any required or necessary repair,
cleanup or other remedial work with respect to any property of any Borrower or
Guarantor and the preparation and implementation of any closure, remedial or
other required plans. All indemnifications in this Section 9.3 shall survive the
payment of the Obligations and the termination of this Agreement.
9.4. Payment of Taxes and Claims. Each Borrower and Guarantor shall,
and shall cause each of their Subsidiaries to, duly pay and discharge (before
the same become delinquent) all taxes, assessments, contributions and
governmental charges upon or against it or its properties or assets, except for
taxes, assessments, contributions and governmental charges (a) the validity of
which are being contested in good faith by appropriate proceedings diligently
62
pursued and available to such Borrower, Guarantor or Subsidiary, as the case may
be, and with respect to which adequate reserves have been set aside on its books
or (b) which are of immaterial amounts and the nonpayment of which would not
give rise to a lien. Subject to Section 6.11 hereof, each Borrower and Guarantor
shall be liable for any Taxes or Other Taxes imposed on Agent or any Lender as a
result of the financing arrangements provided for herein and each Borrower and
Guarantor agrees to indemnify and hold Agent harmless with respect to the
foregoing, and to repay to Agent, for the benefit of Lenders, on demand the
amount thereof, and until paid by such Borrower or Guarantor such amount shall
be added and deemed part of the Loan. The foregoing indemnity shall survive the
payment of the Obligations and the termination of this Agreement.
9.5. Insurance. Each Borrower and Guarantor shall, and shall cause any
Subsidiary to, at all times, maintain with financially sound and reputable
insurers insurance with respect to the Collateral and in the amounts and
covering such risks as is customarily insured against or carried by companies
engaged in the same or similar businesses, owning similar properties in the same
general geographic areas as, and similarly situated with Borrowers and their
Subsidiaries. Said policies of insurance shall be reasonably satisfactory to
Agent as to form, amount and insurer. Borrowers and Guarantors shall furnish
certificates, policies or endorsements to Agent as Agent shall reasonably
require as proof of such insurance, and, if any Borrower or Guarantor fails to
do so, Agent is authorized, but not required, to obtain such insurance at the
expense of Borrowers. All such policies maintained by Borrowers and Guarantors
shall provide for at least thirty (30) days' prior written notice to Agent of
any cancellation or reduction of coverage and that at any time an Event of
Default exists or has occurred and is continuing, Agent may act as attorney for
each Borrower and Guarantor in adjusting, settling, amending and canceling such
insurance. Borrowers and Guarantors shall cause Agent to be named as a loss
payee and an additional insured (but without any liability for any premiums)
under such insurance policies and Borrowers and Guarantors shall use
commercially reasonable efforts to obtain non-contributory lender's loss payable
endorsements to all such insurance policies in form and substance reasonably
satisfactory to Agent. Such lender's loss payable endorsements shall specify
that the proceeds of such insurance shall be payable to Agent as its interests
may appear and further specify that Agent and Lenders shall be paid regardless
of any act or omission by any Borrower, Guarantor or any of its or their
Affiliates. Without limiting any other rights of Agent or Lenders, any insurance
proceeds received by Agent at any time may, subject to Section 6.4 and to the
terms and conditions of the Term Loan Intercreditor Agreement, be applied to
payment of the Obligations, whether or not then due, in such order and in such
manner as is set forth in Section 6.4.
9.6. Financial Statements and Other Information.
(a) Each Borrower and Guarantor shall, and shall cause any
Subsidiary to, keep proper books and records in which true and complete entries
shall be made of all dealings or transactions of or in relation to the
Collateral and the business of such Borrower, Guarantor and its Subsidiaries in
such manner as is required for the preparation of financial statements in
accordance with GAAP. Borrowers and Guarantors shall promptly furnish to Agent
and Lenders all such financial and other information as Agent shall reasonably
request relating to the Collateral and the assets, business and operations of
Borrowers and Guarantors,
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and Borrower shall notify the auditors and accountants of Borrowers and
Guarantors that Agent is authorized to obtain such information directly from
them. Without limiting the foregoing, Borrowers and Guarantors shall furnish or
cause to be furnished to Agent, the following: (i) within thirty (30) days after
the end of each fiscal month, internally prepared monthly unaudited consolidated
financial statements, financial statements (including in each case balance
sheets, statements of operations by division and, statements of cash flow), all
in reasonable detail, fairly presenting in all material respects the financial
position and the results of the operations of Parent and its consolidated
Subsidiaries as of the end of and through such fiscal month, certified to be
correct by the chief financial officer or treasurer of Parent, subject to normal
year-end adjustments and no footnotes and accompanied by a compliance
certificate substantially in the form of Exhibit B hereto, along with a schedule
in a form satisfactory to Agent of the calculations used in determining, as of
the end of such month, whether Borrowers and Guarantors are then in compliance
with the covenant set forth in Section 9.17 of this Agreement, (ii) within
forty-five (45) days after the end of each fiscal quarter, quarterly unaudited
consolidated financial statements (including in each case balance sheets,
statements of operations by division and statements of cash flow), all in
reasonable detail, fairly presenting in all material respects the financial
position and the results of the operations of Parent and its consolidated
Subsidiaries as of the end of and through such fiscal quarter, certified to be
correct by the chief financial officer or treasurer of Parent, subject to normal
year-end adjustments and including footnotes to such financial statements and
(iii) within one hundred twenty (120) days after the end of each fiscal year,
audited consolidated financial statements of Parent and its Subsidiaries
(including in each case balance sheets, statements of operations by division and
statements of cash flow) of Parent and its consolidated Subsidiaries, and the
accompanying notes thereto, all in reasonable detail, fairly presenting in all
material respects the financial position and the results of the operations of
Parent and its Subsidiaries as of the end of and for such fiscal year, together
with the opinion of independent certified public accountants without a going
concern qualification or qualification as to scope of audit with respect to the
audited consolidated financial statements, which accountants shall be an
independent accounting firm selected by Borrowers of nationally recognized
standing and reasonably acceptable to Agent, that such audited consolidated
financial statements have been prepared in accordance with GAAP, and present
fairly in all material respects the results of operations and financial
condition of Parent and its Subsidiaries as of the end of and for the fiscal
year then ended. With respect to each quarterly financial statement for any
period, to the extent that any Pro Forma Cost Savings is added back into EBITDA
for such period, Borrowers shall provide Agent and Lenders with a report on the
achievement of such Pro Forma Cost Savings.
(b) Without limiting the foregoing, Borrowers and Guarantors
shall furnish or cause to be furnished to Agent, as soon as available, but in no
event later than seventy-five (75) days after the end of each fiscal year,
projected consolidated financial statements (including in each case, balance
sheets and statements of operations by division and statements of cash flow) of
Parent and its consolidated Subsidiaries for the next fiscal year, including
forecasted income statements, cash flow statements and balance sheets and
statements of operations income and loss (collectively, all of the foregoing
being referred to herein as the "Projections"), all in reasonable detail, and in
a format consistent with the Projections delivered by Borrowers to Agent prior
to the date hereof, together with such supporting information as Agent may
reasonably request. All of the Projections shall be prepared on a monthly basis
for
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the next succeeding year. The Projections shall represent Borrowers' reasonable
estimate of the future financial performance of Borrowers for the periods set
forth therein and shall have been prepared on the basis of the assumptions set
forth therein which Borrowers believe are fair and reasonable as of the date of
preparation, in light of then current and reasonably foreseeable business
conditions (it being understood that actual results may differ substantially
from those set forth in the Projections). Borrowers shall provide to Agent
revised Projections promptly after any material revision that has been approved
by Borrowers' boards of directors to Borrowers' then existing business plan
previously furnished to Agent.
(c) Borrowers and Guarantors shall promptly notify Agent in
writing of the details of (i) any loss, damage, investigation, action, suit,
proceeding or claim relating to Collateral having a value of more than
$1,000,000 or which if adversely determined could reasonably be expected to
result in any Material Adverse Effect with respect to any Borrower or Guarantor,
(ii) any Material Contract being terminated or being amended in a material
adverse manner or any new Material Contract entered into (in which event
Borrowers and Guarantors shall provide Agent with a copy of such Material
Contract), (iii) any order, judgment or decree (A) in excess of $1,000,000 shall
have been entered against any Borrower or Guarantor any of its or their
properties or assets or (B) that could reasonably be expected to have a Material
Adverse Effect, (iv) any notification of a material violation of laws or
regulations received by any Borrower or Guarantor that could reasonably be
expected to have a Material Adverse Effect, (v) any ERISA Event that could
reasonably be expected to result in liability in excess of $1,000,000, and (vi)
the occurrence of any Default or Event of Default.
(d) Borrowers and Guarantors shall promptly after the sending
or filing thereof furnish or cause to be furnished to Agent copies of all
reports which any Borrower or Guarantor sends to its stockholders generally and
copies of all reports and registration statements which any Borrower or
Guarantor files with the Securities and Exchange Commission, any national
securities exchange or the National Association of Securities Dealers, Inc.
(e) Subject to Section 13.5 hereof, Agent is hereby authorized
to deliver a copy of any financial statement or any other information relating
to the business of Borrowers and Guarantors as required by any court or other
Governmental Authority or to any Lender or Participant or prospective Lender or
Participant or any Affiliate of any Lender or Participant, subject to Section
13.5 hereof, Each Borrower and Guarantor hereby irrevocably authorizes and
directs all accountants or auditors to deliver to Agent, at Borrowers' expense,
copies of the audited financial statements of any Borrower and Guarantor and any
final reports or management letters prepared by such accountants or auditors on
behalf of any Borrower or Guarantor and to disclose to Agent and Lenders such
information as they may have regarding the business of any Borrower and
Guarantor; provided that Borrowers and Guarantors shall be given reasonable
notice of and opportunity to participate in any discussions among Agent and
Lenders and such accountants or auditors. Any documents, schedules, invoices or
other papers delivered to Agent or any Lender may be destroyed or otherwise
disposed of by Agent or such Lender one (1) year after the same are delivered to
Agent or such Lender, except as otherwise designated by Administrative Borrower
Representative to Agent or such Lender in writing; provided, that,
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Agent shall provide prior notice (if practicable) to Administrative Borrower
Representative and, if prior notice is not practicable, then as soon as possible
thereafter.
9.7. Sale of Assets, Consolidation, Merger, Dissolution, Etc. Each
Borrower and Guarantor shall not, and shall not permit any Subsidiary to,
directly or indirectly:
(a) merge into or with or consolidate with any other Person or
permit any other Person to merge into or with or consolidate with it, except
that (i) any wholly-owned Subsidiary of Parent (other than any Borrower or
Guarantor) may merge with and into or consolidate with any other wholly-owned
Subsidiary of Parent (other than any Borrower or Guarantor), (ii) any Borrower
may merge with and into or consolidate with any other Borrower, (iii) any
Guarantor may merge with and into or consolidate with any other Guarantor, (iv)
with the prior consent of Agent, any wholly-owned Subsidiary of Parent (other
than any Borrower or Guarantor) may merge with and into or consolidate with
Parent, any Borrower or Guarantor, and (v) Parent and any of its Subsidiaries
may merge with and into or consolidate with any other Person in order to
effectuate any Permitted Acquisition, provided that Parent or the applicable
Subsidiary shall be the surviving corporation and (vi) any Subsidiary of Parent
other than a Borrower or Guarantor may merge with and into or consolidate with
any other Person in order to effectuate any Asset Sale permitted hereunder and,
provided, that, each of the following conditions is satisfied as determined by
Agent in good faith: (A) Agent shall have received not less than ten (10)
Business Days' prior written notice of the intention of such Subsidiaries to so
merge or consolidate, which notice shall set forth in reasonable detail
reasonably satisfactory to Agent, the Persons that are merging or consolidating,
which Person will be the surviving entity, the locations of the material assets
of the Persons that are merging or consolidating, and the material agreements
and documents relating to such merger or consolidation, (B) Agent shall have
received such other information with respect to such merger or consolidation as
Agent may reasonably request, (C) as of the effective date of the merger or
consolidation and after giving effect thereto, no Default or Event of Default
shall have occurred, (D) Agent shall have received true, correct and complete
copies of all material agreements, documents and instruments relating to such
merger or consolidation, including, but not limited to, the certificate or
certificates of merger to be filed with each appropriate Secretary of State
(with a copy as filed promptly after such filing), (E) except in the case of
mergers permitted pursuant to Section 9.7(a)(vi) in order to effectuate Asset
Sales permitted hereunder, the surviving corporation (except for Subsidiaries
that are not organized in the United States) shall expressly confirm, ratify and
assume the Obligations and the Financing Agreements to which it is a party in
writing, in form and substance reasonably satisfactory to Agent, and Borrowers
and Guarantors shall execute and deliver such other agreements, documents and
instruments as Agent may reasonably request in connection therewith;
(b) sell, issue, assign, lease, license, transfer, abandon or
otherwise dispose of any of its assets (including Indebtedness held by such
Person and Capital Stock of such Person) to any Person, except for:
(i) sales of Inventory in the ordinary course of business;
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(ii) the sale or other disposition of worn-out or obsolete
Equipment or Equipment and Real Property no longer used or useful in the
business of any Borrower or Guarantor so long as such sales or other
dispositions do not involve Equipment having an aggregate fair market value in
excess of $5,000,000 for all such Equipment and Real Property disposed of during
the term of this Agreement, provided, that, (A) no Default or Event of Default
shall have occurred and be continuing at the time of any such sale or other
disposition and after giving effect thereto and (B) the net cash proceeds of
such sale or disposition shall be subject to the terms of Section 6.4;
(iii) transfers resulting from any casualty or condemnation of
property or assets;
(iv) intercompany sales or transfers of assets among Borrowers
and Guarantors in the ordinary course of Borrowers' and Guarantors' business;
(v) the licensing or sublicensing of Intellectual Property and
General Intangibles and any license, lease or sublease of other property in the
ordinary course of Borrowers' and Guarantors' business;
(vi) leases or subleases of Real Property no longer used or
useful in the Borrowers' business provided no Default or Event of Default shall
have occurred and be continuing on the date thereof and after giving effect
thereto;
(vii) consignment arrangements or similar arrangements for the
sale of assets in the ordinary course of business, provided that Borrowers shall
have satisfied all conditions with respect to such consignment arrangements that
are set forth in clause (d) of the definition of Eligible Accounts;
(viii) subject to Agent's prior written consent, sales or
discounts of overdue accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection thereof;
(ix) sales or other dispositions of other property or assets
not otherwise permitted hereunder for at least 80% in cash in an aggregate
amount not less than the fair market value of such property or assets; provided
that (A) in the case of this clause (ix), the Net Cash Proceeds of such sales or
other dispositions do not exceed $5,000,000 in the aggregate for the term of
this Agreement, (B) no Default or Event of Default shall have occurred and be
continuing on the date thereof and after giving effect thereto, and (C) the Net
Cash Proceeds of such sales or dispositions shall be subject to the terms of
Section 6.4;
(x) sales by Borrowers' and Guarantors' foreign Subsidiaries
of accounts receivable in connection with any Permitted Foreign Subsidiary
Credit Facility;
(xi) the issuance, on or about the date hereof, to holders of
the New Notes of substantially all of Parent's common Stock, as contemplated by
the Chapter 11 Plan;
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(xii) in addition to the issuance of Stock permitted pursuant
to clause (xi) immediately above, the issuance and sale by any Borrower or
Guarantor of Capital Stock of such Borrower or Guarantor after the date hereof;
provided, that, (A) Agent shall have received not less than ten (10) Business
Days' prior written notice of such issuance and sale by such Borrower or
Guarantor, which notice shall specify the parties to whom such shares are to be
sold (if known) and the total amount and the Net Cash Proceeds anticipated to be
realized from such sale, (B) such Borrower or Guarantor shall not be required to
pay any cash dividends or repurchase or redeem such Capital Stock or make any
other payments in respect thereof, except as otherwise permitted hereunder, and
(C) the terms of such Capital Stock, and the terms and conditions of the
purchase and sale thereof, shall not include any terms that include any
limitation on the right of any Borrower to request or receive the Loan or the
right of any Borrower and Guarantor to amend or modify any of the terms and
conditions of this Agreement or any of the other Financing Agreements or
otherwise in any way relate to or affect the arrangements of Borrowers and
Guarantors with Agent and Lenders or are more restrictive or burdensome to any
Borrower or Guarantor than the terms of any Capital Stock in effect on the date
hereof, and (D) Borrowers' and Guarantors' use of such Net Cash Proceeds shall
be subject to the terms of Section 6.4(e);
(xiii) the issuance of Capital Stock of any Borrower or
Guarantor consisting of common stock pursuant to an employee stock option or
grant or similar equity plan or 401(k) plans of such Borrower or Guarantor for
the benefit of its employees, directors and consultants, including, without
limitation, Parent's issuance of stock options, and the issuance of shares of
its common Capital Stock in connection with the exercise of such stock options,
to Parent's and Borrowers' management pursuant to Parent's 2004 Stock Plan,
provided, that, in no event shall such Borrower or Guarantor be required to
issue, or shall such Borrower or Guarantor issue, Capital Stock pursuant to such
stock plans or 401(k) plans which would result in a Change of Control or other
Event of Default;
(xiv) the Specified Sale, provided that, at the time of such
sale and after giving effect thereto, (A) no Default or Event of Default shall
have occurred and be continuing, (B) the Net Cash Proceeds related thereto shall
be subject to Section 6.4 and (C) the Consolidated Leverage Ratio on a pro forma
basis shall not exceed 3.5:1; and
(xv) sale and transfer of Equipment by Borrowers to Borrowers'
or Guarantor's foreign Subsidiaries having an aggregate fair market value not
exceeding $10,000,000 in the aggregate for all such transfers during the term of
this Agreement and evidenced by promissory notes executed by the transferee of
such Equipment, in form and substance reasonably satisfactory to Agent, provided
the then outstanding aggregate amounts of investments and loans by Borrowers to
or in Subsidiaries permitted by Section 9.10(h), plus those loans permitted by
and made pursuant to this Section 9.7(b)(xv) shall not exceed $15,000,000 and,
provided further that, at the time of any such sale or transfer and after giving
effect thereto, if the aggregate cumulative fair market value of the Equipment
sold or transferred in reliance on this subsection after the date of this
Agreement exceeds $2,000,000, (A) no Default or Event of Default shall have
occurred and be continuing, (B) Borrowers shall have Excess Availability of at
least $20,000,000 and (C ) such promissory notes shall be pledged and delivered
to Agent as part of the Collateral.
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(c) wind up, liquidate or dissolve except that any Subsidiary
of Parent (other than a Borrower) may wind up, liquidate and dissolve, provided,
that, each of the following conditions is satisfied: (i) the winding up,
liquidation and dissolution of such Subsidiary shall not violate any law or any
order or decree of any court or other Governmental Authority in any material
respect and shall not conflict with or result in the breach of, or constitute a
default under, any indenture, mortgage, deed of trust, or any other agreement or
instrument to which any Borrower or Guarantor is a party or may be bound, (ii)
such winding up, liquidation or dissolution shall be done in accordance with the
requirements of all applicable laws and regulations, (iii) effective upon such
winding up, liquidation or dissolution, all of the assets and properties of such
Subsidiary shall be duly and validly transferred and assigned to a Borrower or a
Guarantor, free and clear of any liens, restrictions or encumbrances other than
the security interest and liens of Agent and encumbrances permitted pursuant to
Section 9.8 (and Agent shall have received such evidence thereof as Agent may
reasonably require) and Agent shall have received such deeds, assignments or
other agreements as Agent may request to evidence and confirm the transfer of
such assets to of such Guarantor to a Borrower or a Guarantor, (iv) Agent shall
have received all documents and agreements that any Borrower or Guarantor has
filed with any Governmental Authority or as are otherwise required to effectuate
such winding up, liquidation or dissolution, (v) no Borrower or Guarantor shall
assume any Indebtedness, obligations or liabilities as a result of such winding
up, liquidation or dissolution, or otherwise become liable in respect of any
obligations or liabilities of the entity that is winding up, liquidating or
dissolving, unless such Indebtedness is otherwise expressly permitted hereunder,
(vi) Agent shall have received not less than five (5) Business Days' prior
written notice of the intention of such Guarantor to wind up, liquidate or
dissolve, and (vii) as of the date of such winding up, liquidation or
dissolution and after giving effect thereto, no Default or Event of Default
shall have occurred.
In connection with any sale or disposition of Collateral permitted by this
Section 9.7 (which, for the avoidance of doubt, shall not include a disposition
of all or substantially all of the Collateral) the Agent will, at the Borrowers'
expense, execute and deliver such releases of Collateral as may be reasonably
necessary to evidence the release of all Liens on such Collateral under the
Financing Documents.
9.8. Encumbrances. Each Borrower and Guarantor shall not, and shall not
permit any Subsidiary to, create, incur, assume, authorize the filing of or
suffer to exist any security interest, mortgage, pledge, lien, charge or other
encumbrance of a similar nature on any of its assets or properties, including
the Collateral, or file or permit the filing of, or permit to remain in effect,
any financing statement or other similar notice of any security interest or lien
with respect to any such assets or properties, except:
(a) the security interests and liens of Agent for itself and
the benefit of Lenders;
(b) liens securing the payment of taxes, assessments or other
governmental charges or levies either not yet overdue or the validity of which
are being contested in good faith by appropriate proceedings diligently pursued
and available to such
69
Borrower, or Guarantor or Subsidiary, as the case may be and with respect to
which adequate reserves have been set aside on its books;
(c) non-consensual statutory liens (other than liens described
in clause (b) above) arising in the ordinary course of such Borrower's,
Guarantor's or Subsidiary's business to the extent: (i) such liens secure
obligations which are not overdue or (ii) such liens secure obligations relating
to claims or liabilities which are fully insured (subject to deductibles) and
being, or can reasonably be expected to be, defended at the sole cost and
expense and at the sole risk of the insurer in accordance with the applicable
policy or being contested in good faith by appropriate proceedings diligently
pursued and available to or for the benefit of such Borrower, Guarantor or such
Subsidiary, in each case prior to the commencement of foreclosure or other
similar proceedings and with respect to which adequate reserves have been set
aside on its books;
(d) zoning restrictions, easements, licenses, covenants and
other restrictions affecting the use and occupancy of Real Property which do not
interfere in any material respect with the use of such Real Property or ordinary
conduct of the business of such Borrower, Guarantor or such Subsidiary as
presently conducted thereon or materially impair the value of the Real Property
which may be subject thereto;
(e) purchase money security interests in Equipment and in
imbedded software in such Equipment and all attachments, accessions and other
property affixed to such Equipment (including Capital Leases) and purchase money
mortgages on Real Property to secure Indebtedness permitted under Section 9.9(b)
or otherwise permitted under this Agreement;
(f) pledges and deposits of cash by any Borrower or Guarantor
after the date hereof in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social security
benefits consistent with the current practices of such Borrower or Guarantor as
of the date hereof;
(g) liens, pledges and deposits of cash in escrow accounts or
otherwise by any Borrower or Guarantor after the date hereof to secure the
performance of tenders, bids, leases, trade contracts (other than for the
repayment of Indebtedness), statutory obligations and other similar obligations
in each case in the ordinary course of business consistent with the current
practices of such Borrower or Guarantor as of the date hereof; provided, that,
in connection with any performance bonds issued by a surety or other person, if
such obligations exceed $250,000, the issuer of such bond shall have waived or
subordinated in writing any rights in or to, or other interest in, any of the
Collateral in an agreement, in form and substance satisfactory to Agent;
(h) liens arising from (i) operating leases and the
precautionary UCC financing statement filings in respect thereof and (ii)
equipment or other materials which are not owned by any Borrower or Guarantor
located on the premises of such Borrower or Guarantor (but not in connection
with, or as part of, the financing thereof) from time to time in the ordinary
course of business and the precautionary UCC financing statement filings in
respect thereof;
70
(i) judgments and other similar liens arising in connection
with court proceedings that do not constitute an Event of Default, provided,
that, (i) such liens are being contested in good faith and by appropriate
proceedings diligently pursued, (ii) adequate reserves or other appropriate
provision, if any, as are required by GAAP have been made therefor, (iii) a stay
of enforcement of any such liens is in effect and (iv) Agent may establish a
Reserve with respect thereto;
(j) the security interests and liens set forth on Schedule 8.4
to the Information Certificate and any modifications, replacements, renewals or
extensions thereof to the extent permitted by this Agreement;
(k) the security interests and liens of Working Capital Agent
for itself and the benefit of Working Capital Lenders, subject to the terms and
conditions of the Term Loan Intercreditor Agreement;
(l) the security interests and liens of the New Notes Trustee,
subject to the terms and conditions of the New Notes Intercreditor Agreement;
(m) the security interests and liens granted by Borrowers' and
Guarantors' foreign Subsidiaries to secure the Indebtedness incurred by such
foreign Subsidiaries permitted pursuant to Section 9.9(g);
(n) licenses and operating leases and subleases granted to
others in the ordinary course of business of Borrowers and permitted pursuant to
Section 9.7 hereof; and
(o) Liens in favor of a banking institution arising by
operation of law encumbering deposits (including a right of set-off) held by
such banking institutions incurred in the ordinary course and within the general
parameters customary for the banking industry;
(p) Liens existing on property at the time of its acquisition
or existing on the property of any Person that becomes a Subsidiary after the
date hereof (other than Liens on the Capital Stock of any Person that becomes a
Subsidiary); provided, that (i) such liens were not created in contemplation of
such acquisition or such Person becoming a Subsidiary, (ii) such liens do not
extend to or cover any other assets or property (other than the proceeds or
products thereof), and (iii) the Indebtedness secured thereby is otherwise
permitted hereunder;
(q) Liens (not otherwise permitted hereunder) secure
obligations not exceeding (as to Borrowers and all of their Subsidiaries)
$5,000,000 in aggregate amount at any time outstanding and that are subordinate
to the liens and security interests granted to Agent and Lenders pursuant to
this Agreement and the other Financing Agreements pursuant to a subordination
agreement executed by each holder of such liens, in form and substance
reasonably satisfactory to Agent.
9.9. Indebtedness. Each Borrower and Guarantor shall not, and shall not
permit any Subsidiary to, incur, create, assume, become or be liable in any
manner with respect to, or permit to exist, any Indebtedness, or guarantee,
assume, endorse, or otherwise become responsible for (directly or indirectly),
the Indebtedness of any other Person, except:
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(a) the Obligations;
(b) purchase money Indebtedness (including Capital Leases)
arising after the date hereof to the extent secured by purchase money security
interests in Equipment and related assets (including Capital Leases) and
purchase money mortgages on Real Property not to exceed $15,000,000 in the
aggregate at any time outstanding so long as such security interests and
mortgages do not apply to any property of such Borrower, Guarantor or Subsidiary
other than the Equipment, related assets or Real Property so acquired, and the
Indebtedness secured thereby does not exceed the cost of the Equipment, or Real
Property so acquired, as the case may be;
(c) guarantees by any Borrower or Guarantor of the Obligations
of the other Borrowers or Guarantors in favor of Agent for the benefit of
Lenders or other Indebtedness otherwise permitted hereby and guarantees by
Subsidiaries of Parent (other than Borrowers) of Indebtedness permitted
hereunder of any other Subsidiary of Parent;
(d) the Indebtedness of Parent or any of its Subsidiaries to
Parent or any of its Subsidiaries arising after the date hereof pursuant to
loans by any Borrower or Guarantor permitted under Section 9.10 hereof;
(e) unsecured Indebtedness of Parent or any of its domestic
Subsidiaries arising after the date hereof to any third person, provided, that,
each of the following conditions is satisfied as determined by Agent in good
faith: (i) such Indebtedness shall be subject and subordinate in right of
payment to the right of Agent and Lenders to receive the prior indefeasible
payment and satisfaction in full of all of the Obligations on terms and
conditions substantially similar to those contained in the New Notes or pursuant
to the terms of a subordination agreement between Agent and such third party, in
form and substance reasonably satisfactory to Agent, (ii) the terms of such
Indebtedness shall provide that no payments of principal or cash interest shall
be made or accepted on account of such subordinated Indebtedness prior to the
indefeasible payment and satisfaction in full of all Obligations, (iii) Agent
shall have received not less than ten (10) days prior written notice of the
intention of such Borrower or Guarantor to incur such Indebtedness, which notice
shall set forth in reasonable detail satisfactory to Agent the amount of such
Indebtedness, the anticipated range of interest rate, the schedule of repayments
(subject in all events, however, to subsection (e)(i) immediately above) and
maturity date with respect thereto, which shall be at least six (6) months after
the scheduled maturity of the New Notes, and such other information as Agent may
reasonably request with respect thereto, (iv) Agent shall have received true,
correct and complete copies of all agreements, documents and instruments
evidencing or otherwise related to such Indebtedness, and (v) as of the date of
incurring such Indebtedness and after giving effect thereto, no Default or Event
of Default shall have occurred; and provided further that (x) all of the
proceeds of the loans or other accommodations giving rise to such Indebtedness
shall be, as set forth in Section 6.4, either used by Borrowers or remitted to
Agent for application to the Obligations, (y) such Borrower and Guarantor shall
not, directly or indirectly, (A) amend, modify, alter or change the terms of
such Indebtedness or any agreement, document or instrument related thereto,
except, that, such Borrower or Guarantor may, after prior written notice to
Agent, amend, modify, alter or change the terms thereof so as to extend the
maturity
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thereof, or to forgive or cancel any portion of such Indebtedness (other than
pursuant to payments thereof), or to reduce the interest rate or any fees in
connection therewith, or in any other manner not adverse to Lenders as
determined by Agent in good faith, (B) redeem, retire, defease, purchase or
otherwise acquire such Indebtedness (except pursuant to regularly scheduled
payments permitted herein), or set aside or otherwise deposit or invest any sums
for such purpose, and (z) Borrowers and Guarantors shall furnish to Agent all
notices or demands in connection with such Indebtedness either received by any
Borrower or Guarantor or on its behalf relating to any event of default or
acceleration of obligations outstanding thereunder, promptly after the receipt
thereof, or sent by any Borrower or Guarantor or on its behalf concurrently with
the sending thereof, as the case may be;
(f) the Indebtedness owing with respect to the Working Capital
Debt and the New Notes and any refinancings, refundings, extensions, renewals or
replacements thereof to the extent permitted by this Agreement (provided that no
such refinancing, refunding, extension, renewal or replacements increase the
principal amount thereof); provided, that, (i) except as otherwise provided
herein, Borrowers and Guarantors may only make regularly scheduled payments of
interest in respect of the New Notes in accordance with the terms of the New
Notes Indenture and the New Notes Intercreditor Agreement as in effect on the
date hereof, or as otherwise amended as permitted hereunder, (ii) Borrowers and
Guarantors shall not, directly or indirectly, (A) except as expressly otherwise
provided in the Term Loan Intercreditor Agreement or the New Notes Intercreditor
Agreement, amend, modify, alter or change the terms of such Indebtedness, the
Working Capital Loan Documents, the New Notes Indenture, the New Notes or any
other agreement, document or instrument related thereto as in effect on the date
hereof, except, that, Borrowers and Guarantors may, after prior written notice
to Agent, amend, modify, alter or change the terms thereof so as to extend the
maturity thereof, or defer the timing of any payments in respect thereof, or to
forgive or cancel any portion of such Indebtedness (other than pursuant to
payments thereof), or to reduce the interest rate or any fees in connection
therewith, or in any other manner that is not adverse to Agent and Lenders, as
determined by Agent in good faith, or (B) except as provided herein, redeem,
retire, defease, purchase or otherwise acquire such Indebtedness, or set aside
or otherwise deposit or invest any sums for such purpose, and (iii) Borrowers
and Guarantors shall furnish to Agent all notices or demands relating to an
event of default under or acceleration of the maturity of such Indebtedness
either received by any Borrower or Guarantor or on its behalf, promptly after
the receipt thereof, or sent by any Borrower or Guarantor or on its behalf,
concurrently with the sending thereof, as the case may be. Except as permitted
pursuant to Sections 6.4(c), (d) and (e) or otherwise hereunder, Borrowers shall
not make prepayments of principal with respect to the New Notes and any
refinancings, refundings, extensions, renewals or replacements thereof.
Borrowers shall provide Agent with written notice of any such prepayment made by
Borrowers, concurrently with the making of such prepayment;
(g) Indebtedness for borrowed money incurred by Borrowers' and
Guarantors' foreign Subsidiaries in connection with a stand-alone credit
facility and/or any overdraft facility that may be established by Borrowers' and
Guarantors' foreign Subsidiaries after the date hereof, in an aggregate
principal amount outstanding not to exceed $10,000,000 (a "Permitted Foreign
Subsidiary Credit Facility"), and unsecured guarantees by Borrowers and
Guarantors with respect to such Permitted Foreign Subsidiary Credit Facility;
provided, that, any
73
such guarantee of a Permitted Foreign Subsidiary Credit Facility shall be
subject and subordinated in right of payment to the right of Agent and Lenders
to receive the prior indefeasible payment and satisfaction in full of all of the
Obligations pursuant to the terms of a subordination agreement between Agent and
the lenders providing such Permitted Foreign Credit Facility, in form and
substance reasonably satisfactory to Agent;
(h) other Indebtedness set forth in the Information
Certificate and any refinancings, refundings, extensions, renewals or
replacements thereof (provided that no such refinancing, refunding, extension,
renewal or replacements shall increase the principal amount thereof, except as
otherwise permitted by this Agreement);
(i) unsecured Indebtedness under any Hedging Agreement of any
Borrower entered into in the ordinary course of business;
(j) Indebtedness of any foreign Subsidiary of Borrowers
arising from agreements with Governmental Authorities of any foreign country, or
political subdivision or agency thereof, relating to the construction of plants
and the purchase and installation (including related training costs) of
equipment to be used in a business which is the same as or reasonably related to
any of the businesses of any Borrower and its Subsidiaries on the date hereof,
as reasonably determined by the board of directors of the Parent or the
determining Subsidiary of the Parent; provided that such Indebtedness in the
aggregate does not exceed $7,500,000 outstanding at any one time;
(k) Indebtedness of Parent or any of its Subsidiaries not
otherwise permitted hereby in an aggregate principal amount not to exceed
$5,000,000 outstanding in the aggregate at any one time, provided that, if such
Indebtedness is secured, such Indebtedness may only be incurred in accordance
with the provisions of Section 9.8(q);
(l) contingent obligations of, or guarantees by, Parent or any
of its Subsidiaries (other than Borrowers) with respect to any Indebtedness
which would constitute Indebtedness permitted hereunder for Parent or such
Subsidiary if incurred directly by Parent or such Subsidiary; and
(m) Indebtedness assumed by Parent or any Subsidiary of Parent
in connection with any Permitted Acquisition to the extent that the direct
incurrence of such Indebtedness is otherwise permitted hereunder.
9.10. Loans, Investments, Etc. Each Borrower and Guarantor shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly, make
any loans or advance money or property to any person, or invest in (by capital
contribution, dividend or otherwise) or purchase or repurchase the Capital Stock
of any other Person or Indebtedness of any other Person or all or a substantial
part of the assets or property of any Person or business unit or division, or
form or acquire any Subsidiaries, except:
(a) the endorsement of instruments for collection or deposit
in the ordinary course of business;
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(b) investments in cash or Cash Equivalents, provided, that,
the terms and conditions of Section 5.2 hereof shall have been satisfied with
respect to the deposit account, investment account or other account in which
such cash or Cash Equivalents are held;
(c) the existing equity investments of Parent and each of its
Subsidiaries as of the date hereof in their respective Subsidiaries, provided,
that, no Borrower or Guarantor shall have any further obligations or liabilities
to make any capital contributions or other additional investments or other
payments to or in or for the benefit of any of such Subsidiaries;
(d) loans and advances by Parent or any of its Subsidiaries to
officers, directors and employees of such Person not to exceed the principal
amount of $500,000 in the aggregate at any time outstanding for: (i) reasonably
and necessary work-related travel or other ordinary business expenses to be
incurred by such employee in connection with their work for such Borrower or
Guarantor and (ii) reasonable and necessary relocation expenses of such
employees (including home mortgage financing for relocated employees);
(e) stock or debt obligations issued to Parent or any of its
Subsidiaries by any Person (or the representative of such Person) or any other
property distributed to Parent or any of its Subsidiaries in respect of
Indebtedness of such Person owing to Parent or any of its Subsidiaries in
connection with the insolvency, bankruptcy, receivership or reorganization of
such Person or a composition or readjustment of the debts of such Person;
provided, that, the original of any such stock or instrument that is held by
Borrowers or Guarantors evidencing such obligations with a value in excess of
$250,000 shall be promptly delivered to Agent, upon Agent's reasonable request
(or if the Working Capital Loan Termination Date has not occurred, to the
Working Capital Agent, with a copy to Agent), together with such stock power,
assignment or endorsement by such Borrower or Guarantor as Agent may reasonably
request or such other property is made part of the Collateral;
(f) obligations of account debtors to Parent or any of its
Subsidiaries arising from Accounts which are past due evidenced by a promissory
note made by such account debtor payable to Parent or any of its Subsidiaries;
provided, that, promptly upon any Borrower's or Guarantor's receipt of the
original of any such promissory note with a face principal amount in excess of
$250,000, such promissory note shall be endorsed to the order of Agent (or if
the Working Capital Loan Termination Date has not occurred, to the Working
Capital Agent)by such Borrower or Guarantor and promptly delivered to Agent as
so endorsed(or if the Working Capital Loan Termination Date has not occurred, to
the Working Capital Agent, with a copy to Agent);
(g) loans by a Borrower or Guarantor to another Borrower or
Guarantor after the date hereof, provided, that:
(i) as to all of such loans, (A) within thirty (30) days after
the end of each fiscal month, Borrowers shall provide to Agent a report in form
and substance reasonably satisfactory to Agent of the outstanding amount of such
loans as of the last day of the immediately preceding month and indicating any
loans made and payments received during the immediately preceding month, (B) the
Indebtedness arising pursuant to any such loan shall not
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be evidenced by a promissory note or other instrument, unless the single
original of such note or other instrument is promptly delivered to Agent (or if
the Working Capital Loan Termination Date has not occurred, to the Working
Capital Agent, with a copy to Agent) upon its request to hold as part of the
Collateral, with such endorsement and/or assignment by the payee of such note or
other instrument as Agent (or the Working Capital Agent, as the case may be) may
require, and (C) as of the date of any such loan and after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing,
(ii) as to loans by a Guarantor to a Borrower, (A) the
Indebtedness arising pursuant to such loan shall be subject to, and subordinate
in right of payment to, the right of Agent and Lenders to receive the prior
final payment and satisfaction in full of all of the Obligations on terms and
conditions acceptable to Agent, and (B) such Borrower shall not, directly or
indirectly make, or be required to make, any payments in respect of such
Indebtedness prior to the end of the term of this Agreement;
(iii) as to loans by Borrowers and Guarantors other than
Parent to Parent, the Indebtedness arising pursuant to such loan shall be (A)
for the purpose of payment of interest and prepayment of principal with respect
to the New Notes to the extent permitted hereunder and/or (B) for the purpose of
payment by Parent of consolidated tax obligations and, to the extent permitted
by Section 9.12(b), for general corporate overhead, provided that as of the date
of any such loan that is made for such purpose of prepayment of principal with
respect to the New Notes, and after giving effect thereto, no Trigger Event
shall have occurred and be continuing;
(iv) as to loans by Borrowers to a Person that becomes a
Guarantor after the date hereof (which Person shall be organized within the
United States of America), as of the date of any such loan and after giving
effect thereto, (A) the Borrowers' Excess Availability shall be not less than
$20,000,000 (or such lesser amount as Agent shall agree to in writing, in
Agent's good faith determination) and (B) no Default or Event of Default shall
exist on the date of any such loan and after giving effect thereto;
(h) investments (including loans) after the date hereof by
Borrowers to or in Subsidiaries of Borrowers that are not Borrowers in an
aggregate amount not to exceed an amount equal to (i) $15,000,000, minus (ii)
the then outstanding principal amount of loans permitted under Section
9.7(b)(xv) plus (iii) the amount of cash received by Borrowers or Guarantors
from such Subsidiaries as repayments, dividends or as proceeds of the sale or
liquidation of, or any other return of capital with respect to, any such
investment (or any existing investment of Guarantors or Borrowers in any such
Subsidiary); provided, however, that, with respect to such investments
(including loans) in excess of an aggregate amount of $2,000,000, no Trigger
Event has occurred or is continuing;
(i) loans or other investments by Subsidiaries of Borrowers
that are not Borrowers to or in other Subsidiaries of Borrowers that are not
Borrowers;
(j) loans or advances to or investments in Borrowers by
Subsidiaries of Borrowers that are not Borrowers; provided that the repayment of
such loans, advances and/or
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investments are subordinated to the prior payment in full of the Obligations
pursuant to a subordination agreement in form and substance reasonably
satisfactory to Agent;
(k) extensions of trade credit in the ordinary course of
Borrowers' business;
(l) loans, advances and investments not otherwise expressly
permitted hereunder in an aggregate amount not to exceed $2,000,000 outstanding
at any one time or funded with Net Cash Proceeds of Equity Issuances without any
limitation as to amount thereof in the case of loans to and investments in
domestic Subsidiaries and in an aggregate amount not to exceed $50,000,000
during the term of this Agreement for such loans to and investments in foreign
Subsidiaries, provided that, as of the date of any such loan or investment and
after giving effect thereto, to the extent that such loan or investment will be
funded with Net Cash Proceeds arising from sources other than an Equity
Issuance, (i) Borrowers' Excess Availability shall not be less than $20,000,000
and (ii) no Default or Event of Default shall have occurred and be continuing;
(m) the loans and advances and other investments set forth on
Schedule 9.10 to the Information Certificate; provided, that, as to such loans
and advances, Borrowers and Guarantors shall not, directly or indirectly, amend,
modify, alter or change the terms of such loans and advances or any agreement,
document or instrument related thereto in any manner adverse to Lenders, in
Agent's good faith determination, and Borrowers and Guarantors shall furnish to
Agent all notices or demands in connection with any event of default under or
acceleration of the maturity of such loans and advances either received by any
Borrower or Guarantor or on its behalf, promptly after the receipt thereof, or
sent by any Borrower or Guarantor or on its behalf, concurrently with the
sending thereof, as the case may be;
(n) so long as (i) no Default or Event of Default has occurred
and is continuing and shall not have occurred after giving effect to any of the
transactions otherwise permitted pursuant to this Section 9.10(n), and (ii) the
Consolidated Leverage Ratio on a pro forma basis would not be greater than
3.5:1, Parent and any of its Subsidiaries may acquire all or a substantial part
of the assets or property or Capital Stock of any Person or any business unit or
division (the "Target"), subject to the satisfaction of each of the following
conditions (in each case, a "Permitted Acquisition"):
(i) Agent shall receive at least 15 Business Days' prior
written notice of such proposed Permitted Acquisition, which notice shall
include a reasonably detailed description of such proposed Permitted
Acquisition;
(ii) the Target's assets shall only comprise a business of the
type engaged in by Borrowers as of the date hereof or ancillary businesses
reasonably related to the business engaged in by Borrowers as of the date
hereof;
(iii) the total cash and noncash consideration (including,
without limitation, assumption of Indebtedness) for all Permitted Acquisitions
under this clause (n) shall not exceed $75,000,000 in the aggregate during the
term of this Agreement;
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(iv) subject to the limitation in clause (ii) immediately
above, Parent and any of its Subsidiaries may utilize up to $35,000,000 of the
Net Cash Proceeds of any Debt Issuance, any and all proceeds of any Equity
Issuance and, so long as Average Thirty Day Excess Availability is greater than
$20,000,000, up to $35,000,000 of other cash and/or the Loan, to consummate such
proposed Permitted Acquisition;
(v) the Target shall have pro forma projected EBITDA of at
least $-0- for the four (4) fiscal quarters following the date of the Permitted
Acquisition, as determined by the board of directors of Administrative Borrower
Representative, calculation of which shall be reasonably acceptable to Agent;
(vi) at or prior to the closing of any Permitted Acquisition,
Agent will be granted a first priority perfected security interest and lien
(subject to security interests and liens permitted pursuant to Section 9.8) in
all assets (to the extent the same are acquired by a Borrower or Guarantor as of
the date of such Permitted Acquisition) or Capital Stock of the Target on the
same terms and conditions set forth in Article 5 and the Target shall have
executed such documents and taken such actions as may be reasonably required by
Agent in connection therewith;
(vii) Concurrently with delivery of the notice referred to in
clause (i) above, Borrowers shall have delivered to Agent, in form and substance
reasonably satisfactory to Agent, a pro forma consolidated balance sheet, income
statement and cash flow statement of Parent and its Subsidiaries, based on
recent financial statements and assumptions believed by the Borrowers to be
reasonable at the time made;
(viii) on or prior to the date of such Permitted Acquisition,
Agent shall have received, in form and substance reasonably satisfactory to
Agent, copies of the acquisition agreement and related agreements and
instruments, and all opinions, certificates, lien search results and other
documents reasonably requested by Agent; and
(ix) concurrently with consummation of the Permitted
Acquisition under this Section 9.10(n), Administrative Borrower Representative
shall have delivered to Agent a certificate stating that the foregoing
conditions have been satisfied.
Notwithstanding the foregoing, the Accounts, Inventory, Equipment and Real
Property of the Target shall not be included in the Borrowing Base without the
prior written consent of Agent and Required Lenders.
(o) loans by Subsidiaries that are organized outside of the
United States of America to Borrowers and Guarantors, provided that: (i) the
Indebtedness arising pursuant to such loan shall be subject to, and subordinate
in right of payment to, the right of Agent and Lenders to receive the prior
final payment and satisfaction in full of all of the Obligations on terms and
conditions acceptable to Agent, and (ii) Borrowers and Guarantors shall not,
directly or indirectly make, or be required to make, any payments in respect of
such Indebtedness prior to the end of the term of this Agreement; and
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(p) no first-tier Subsidiary of a Borrower or Guarantor that
is treated as a disregarded entity for U.S. federal income tax purposes and that
owns directly or indirectly any Capital Stock of a "controlled foreign
corporation" (as described in Section 957 of the Code) shall own any assets
except, or engage in any business other than the ownership of, the Capital Stock
of such controlled foreign corporations or of another Person the only assets and
business of which are the ownership of the Capital Stock of controlled foreign
corporations.
9.11. Dividends and Redemptions. Each Borrower and Guarantor shall not,
directly or indirectly, declare or pay any dividends on account of any shares of
class of any Capital Stock of such Borrower or Guarantor now or hereafter
outstanding, or set aside or otherwise deposit or invest any sums for such
purpose, or redeem, retire, defease, purchase or otherwise acquire any shares of
any class of Capital Stock (or set aside or otherwise deposit or invest any sums
for such purpose) for any consideration or apply or set apart any sum, or make
any other distribution (by reduction of capital or otherwise) (each a
"Restricted Payment") in respect of any such shares or agree to do any of the
foregoing, except that:
(a) any Borrower or Guarantor may make Restricted Payments for
consideration in the form of shares of common stock (so long as after giving
effect thereto no Change of Control or other Default or Event of Default shall
exist or occur);
(b) Borrowers and Guarantors may make Restricted Payments to
the extent permitted in Section 9.12 below;
(c) any Subsidiary of a Borrower or Guarantor may make
Restricted Payments to a Borrower; and
(d) Borrowers and Guarantors may make Restricted Payments in
respect of Capital Stock consisting of common stock held by employees pursuant
to any employee stock ownership plan thereof upon the termination, retirement or
death of any such employee in accordance with the provisions of such plan,
provided, that, as to any such repurchase, each of the following conditions is
satisfied: (i) as of the date of the payment for such repurchase and after
giving effect thereto, no Default or Event of Default shall have occurred and be
continuing, (ii) such Restricted Payments shall be paid with funds legally
available therefor, (iii) such Restricted Payments shall not violate any
material law or regulation or the terms of any indenture, agreement or
undertaking to which such Borrower or Guarantor is a party or by which such
Borrower or Guarantor or its or their property are bound, and (iv) the aggregate
amount of all such Restricted Payments in any calendar year shall not exceed
$1,000,000.
9.12. Transactions with Affiliates. Except as otherwise expressly
permitted in this Agreement, each Borrower and Guarantor shall not, directly or
indirectly:
(a) purchase, acquire or lease any property from, or sell,
transfer or lease any property to, any officer, director or other Affiliate of
such Borrower or Guarantor, except in the ordinary course of and pursuant to the
reasonable requirements of such Borrower's or Guarantor's business (as the case
may be) and upon fair and reasonable terms no less favorable
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to such Borrower or Guarantor than such Borrower or Guarantor would obtain in a
comparable arm's length transaction with an unaffiliated person; or
(b) make any payments (whether by dividend, loan or otherwise)
of management, consulting or other fees for management or similar services, or
of any Indebtedness owing to any officer, employee, shareholder, director or any
other Affiliate of such Borrower or Guarantor, except: (i) reasonable
compensation to officers, employees and directors for services rendered to such
Borrower or Guarantor in the ordinary course of business, (ii) payments by any
such Borrower or Guarantor to Parent for actual and necessary reasonable
out-of-pocket legal and accounting, insurance, marketing, payroll and similar
types of services paid for by Parent on behalf of such Borrower or Guarantor, in
the ordinary course of their respective businesses or as the same may be
directly attributable to such Borrower or Guarantor, and for the payment of
taxes by or on behalf of Parent, and (iii) payments by Borrowers to Parent to
pay fees, interest and principal with respect to the New Notes to the extent
permitted by Section 9.10(g)(iii). Notwithstanding anything to the contrary
contained in any Financing Agreement, Parent and its Subsidiaries may make
payments in respect of any Indebtedness and obligations (other than the
Obligations) held by any of Borrowers' Affiliates if and to the extent that (A)
Parent and its Subsidiaries are not prohibited hereunder from incurring such
Indebtedness and (B) Parent and its Subsidiaries would be permitted to pay
Persons that are not Affiliates holding similar Indebtedness and obligations,
free of any restriction, limitation or condition; and such Affiliates shall for
all purposes under the Financing Agreement be treated as if they were not
Affiliates of Borrowers, insofar as their receipt of payment of such
Indebtedness and obligations is concerned.
9.13. Compliance with ERISA. Each Borrower and Guarantor shall, and
shall cause each of its ERISA Affiliates, to: (a) maintain each Plan in
compliance in all respects with the applicable provisions of ERISA, the Code and
other Federal and State law; (b) cause each Plan which is qualified under
Section 401(a) of the Code to maintain such qualification; (c) not terminate any
of such Plans so as to incur any liability to the Pension Benefit Guaranty
Corporation; (d) not allow or suffer to exist any prohibited transaction
involving any of such Plans or any trust created thereunder which would subject
such Borrower, Guarantor or such ERISA Affiliate to a tax or penalty or other
liability on prohibited transactions imposed under Section 4975 of the Code or
ERISA; (e) make all required contributions to any Plan which it is obligated to
pay under Section 302 of ERISA, Section 412 of the Code or the terms of such
Plan; (f) not allow or suffer to exist any accumulated funding deficiency,
whether or not waived, with respect to any such Plan; or (g) allow or suffer to
exist any occurrence of a reportable event or any other event or condition which
presents a risk of termination by the Pension Benefit Guaranty Corporation of
any such Plan that is a single employer plan, which termination could result in
any liability to the Pension Benefit Guaranty Corporation, except to the extent
that any of the above would not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
9.14. End of Fiscal Years; Fiscal Quarters. Except as approved by Agent
(such approval not to be unreasonably delayed or withheld), each Borrower and
Guarantor shall, for financial reporting purposes, cause its, and each of its
Subsidiaries' (a) fiscal years to end on December 31 of each year and (b) fiscal
quarters to end on March 31, June 30, September 30 and December 31 of each year.
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9.15. Change in Business. Each Borrower and Guarantor shall not engage
in any business other than the business of such Borrower or Guarantor on the
date hereof and any business reasonably related, ancillary or complementary to
the business in which such Borrower or Guarantor is engaged on the date hereof.
9.16. Limitation of Restrictions Affecting Subsidiaries. Each Borrower
and Guarantor shall not, directly, or indirectly, create or otherwise cause or
suffer to exist any consensual encumbrance or restriction which prohibits or
limits the ability of any Subsidiary of such Borrower or Guarantor to (a) pay
dividends or make other distributions or pay any Indebtedness owed to such
Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor; (b) make
loans or advances to such Borrower or Guarantor or any Subsidiary of such
Borrower or Guarantor, (c) transfer any of its properties or assets to such
Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor; or (d)
create, incur, assume or suffer to exist any lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, other than
encumbrances and restrictions arising under (i) applicable law, (ii) this
Agreement, (iii) the Working Capital Loan Documents, (iv) the New Notes
Indenture, (v) customary provisions restricting subletting or assignment of any
lease governing a leasehold interest of such Borrower or Guarantor or any
Subsidiary of such Borrower or Guarantor, (vi) customary restrictions on
dispositions of real property interests found in reciprocal easement agreements
of such Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor,
(vii) any agreement relating to permitted Indebtedness incurred by a Subsidiary
of such Borrower or Guarantor prior to the date on which such Subsidiary was
acquired by such Borrower or such Guarantor and outstanding on such acquisition
date and refinancings, refundings, extensions, renewals or replacements thereof
permitted hereunder (provided that no such refinancing, refunding, extension,
renewal or replacement shall increase the principal amount thereof), and (viii)
the extension or continuation of contractual obligations in existence on the
date hereof; provided, that, any such encumbrances or restrictions contained in
such extension or continuation are no less favorable to Agent and Lenders than
those encumbrances and restrictions under or pursuant to the contractual
obligations so extended or continued.
9.17. Financial Covenants. (a) If at any time (a) Borrowers' average
Excess Availability for the immediately preceding fiscal month was less than
$20,000,000 or (b) any Default or Event of Default shall have occurred and be
continuing (the occurrence of either of the foregoing being herein referred to
as a "Covenant Compliance Trigger"), then, commencing with the first fiscal
month immediately preceding the Covenant Compliance Trigger in which Agent has
received the monthly financial statements required to be delivered under Section
9.6(a)(i) hereof, and for each fiscal month thereafter until average Excess
Availability for the immediately preceding fiscal month is more than $20,000,000
and no Default or Event of Default exists, Parent and its Subsidiaries shall
maintain a Fixed Charge Coverage Ratio of not less than 1.0:1.0. The Fixed
Charge Coverage Ratio shall be calculated monthly.
(b) Parent and its Subsidiaries shall not permit the
Consolidated Leverage Ratio for the twelve-month period ending on the last day
of each fiscal quarter, commencing with the fiscal quarter ending December 31,
2004, to be more than 3.5:1.
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9.18. Lender Meetings. Borrowers shall, upon no less than thirty (30)
days' advance notice by Agent or the Required Lenders, participate in a meeting
of Agent and Lenders once during each fiscal year (or at any time upon advance
notice by Agent or Required Lenders upon the occurrence and continuation of an
Event of Default), to be held at locations and at times reasonably requested by
Agent (or if applicable, Required Lenders).
9.19. License Agreements. Each Borrower and Guarantor shall (a)
promptly and faithfully observe and perform all of the material terms,
covenants, conditions and provisions of the License Agreements constituting
Material Contracts to which it is a party to be observed and performed by it, at
the times set forth therein, if any, (b) not do, permit, suffer or refrain from
doing anything that could reasonably be expected to result in a default under or
breach of any of the terms of any material License Agreement, (c) not cancel,
surrender, modify, amend, waive or release any material License Agreement in any
material respect or any term, provision or right of the licensee thereunder in
any material respect, or consent to or permit to occur any of the foregoing;
except, that, such Borrower or Guarantor may cancel, surrender or release any
material License Agreement in the ordinary course of the business of such
Borrower or Guarantor; provided, that, such Borrower or Guarantor (as the case
may be) shall give Agent not less than thirty (30) days prior written notice of
its intention to so cancel, surrender and release any such material License
Agreement, (d) give Agent prompt written notice of any material License
Agreement entered into by such Borrower or Guarantor after the date hereof,
together with a true, correct and complete copy thereof and such other
information with respect thereto as Agent may request, (e) give Agent prompt
written notice of any material breach of any obligation, or any default, by any
party under any material License Agreement, and deliver to Agent (promptly upon
the receipt thereof by such Borrower or Guarantor in the case of a notice to
such Borrower or Guarantor and concurrently with the sending thereof in the case
of a notice from such Borrower or Guarantor) a copy of each notice of default
and every other notice and other communication received or delivered by such
Borrower or Guarantor in connection with any material License Agreement which
relates to the right of such Borrower or Guarantor to continue to use the
property subject to such License Agreement, and (f) furnish to Agent, promptly
upon the request of Agent, such information and evidence as Agent may reasonably
require from time to time concerning the observance, performance and compliance
by such Borrower or Guarantor or the other party or parties thereto with the
material terms, covenants or provisions of any material License Agreement.
9.20. After Acquired Real Property. If any Borrower or Guarantor
hereafter acquires any fee interest in Real Property, fixtures or any other
property that is of the kind or nature described in the Mortgages and such Real
Property, fixtures or other property is adjacent to, contiguous with or
necessary or related to or used in connection with any Real Property then
subject to a Mortgage, or if such Real Property is not adjacent to, contiguous
with or related to or used in connection with such Real Property, then if such
Real Property, fixtures or other property at any location (or series of
adjacent, contiguous or related locations, and regardless of the number of
parcels) has a fair market value in an amount equal to or greater than $250,000,
individually, or greater than $500,000 in the aggregate for all such Real
Property (or if a Default or Event of Default exists, then regardless of the
fair market value of such assets), without limiting any other rights of Agent or
any Lender, or duties or obligations of any Borrower or Guarantor, promptly upon
Agent's request, such Borrower or Guarantor shall execute and deliver
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to Agent a mortgage, deed of trust or deed to secure debt, as Agent may
determine, in form and substance substantially similar to the Mortgages and as
to any provisions relating to specific state laws reasonably satisfactory to
Agent and in form appropriate for recording in the Real Property records of the
jurisdiction in which such Real Property or other property is located granting
to Agent a first priority lien and mortgage on and security interest in such
Real Property, fixtures or other property (subject only to then existing liens
and liens that are permitted to exist or be incurred hereunder or under the
Mortgages or as otherwise consented to in writing by Agent) and such other
agreements, documents and instruments as Agent may reasonably require in
connection therewith. Notwithstanding the foregoing, Agent shall not require
Borrowers and Guarantors to comply with this Section 9.20 with respect to any
particular fee interest Real Property acquired after the date hereof if the cost
associated with obtaining a Mortgage on or Agent's perfection of its Mortgage on
such Real Property is excessive in relation to the value of such Real Property,
as determined by Agent in good faith.
9.21. Costs and Expenses. Subject to Section 11.5 hereof, Borrowers and
Guarantors shall pay to Agent on demand all documented out-of-pocket costs,
expenses, filing fees and taxes paid or payable in connection with the
preparation, negotiation, execution, delivery, recording, syndication,
administration, collection, liquidation, enforcement and defense of the
Obligations, Agent's rights in the Collateral, this Agreement, the other
Financing Agreements and all other documents related hereto or thereto,
including any amendments, supplements or consents which may hereafter be
contemplated (whether or not executed) or entered into in respect hereof and
thereof, including: (a) all costs and expenses of filing or recording (including
Uniform Commercial Code financing statement filing taxes and fees, documentary
taxes, intangibles taxes and mortgage recording taxes and fees, if applicable);
(b) costs and expenses and fees for insurance premiums, environmental audits,
title insurance premiums, surveys, assessments, engineering reports and
inspections, appraisal fees and search fees, costs and expenses of remitting
loan proceeds, collecting checks and other items of payment, and establishing
and maintaining the Blocked Accounts, together with Agent's customary charges
and fees with respect thereto; (c) reasonable out-of-pocket costs and expenses
of preserving and protecting the Collateral; (d) reasonable out-of-pocket costs
and expenses paid or incurred in connection with obtaining payment of the
Obligations, enforcing the security interests and liens of Agent, selling or
otherwise realizing upon the Collateral, and otherwise enforcing the provisions
of this Agreement and the other Financing Agreements or defending any claims
made or threatened against Agent or any Lender arising out of the transactions
contemplated hereby (limited to one (1) outside counsel to Agent and Lenders
prior to the occurrence of a Default or Event of Default that is continuing) and
thereby (including preparations for and consultations concerning any such
matters), subject, however to Section 10.2(h); (e) all reasonable out-of-pocket
expenses and costs heretofore and from time to time hereafter incurred by Agent
during the course of periodic field examinations of the Collateral and such
Borrower's or Guarantor's operations, plus a per diem charge at Agent's then
standard rate for Agent's examiners in the field and office (which rate as of
the date hereof is $1,000 per person per day); and (f) the reasonable fees and
disbursements of outside counsel (including legal assistants) to Agent in
connection with any of the foregoing (limited to one (1) outside counsel to
Agent and Lenders so long as no Default or Event of Default has occurred and is
continuing).
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9.22. Further Assurances. At the reasonable request of Agent at any
time and from time to time, Borrowers and Guarantors shall, at their expense,
duly execute and deliver, or cause to be duly executed and delivered, such
further agreements, documents and instruments, and do or cause to be done such
further acts as may be reasonably necessary or proper to evidence, perfect,
maintain and enforce the security interests and the priority thereof in the
Collateral and to otherwise effectuate the provisions or purposes of this
Agreement or any of the other Financing Agreements.
SECTION 10. EVENTS OF DEFAULT AND REMEDIES
10.1. Events of Default. The occurrence or existence of any one or more
of the following events are referred to herein individually as an "Event of
Default", and collectively as "Events of Default":
(a) (i) any Borrower fails to pay interest on the Loan within
one (1) Business Day after the due date thereof or fails to pay any principal of
the Loan or any of the other Obligations when due or (ii) any Borrower or
Guarantor fails to perform any of the covenants contained in Sections 7.1(a)
(excluding Section 7.1(a)(ii)(E)), 8.2(c), 9.2, 9.3(b), 9.4, 9.6, 9.7(a)(i)(A),
9.14 and 9.22 of this Agreement and such failure shall continue for ten (10)
days; or (iii) any Borrower or Guarantor fails to perform any of the covenants
contained in Sections 7.2, 7.3, 7.4, 9.3(a), 9.3(c), 9.13, 9.19 and 9.20 of this
Agreement and such failure shall continue for twenty (20) days; or (iv) any
Borrower or Obligor fails to perform any of the terms, covenants, conditions or
provisions contained in this Agreement or any pledge agreement, security
agreement or guaranty now or hereafter executed and delivered by any Borrower or
Guarantor in favor of Agent and/or Lenders, other than those described in
Sections 10.1(a)(i), 10.1(a)(ii) and 10.1(a)(iii);
(b) any representation, warranty or statement of fact made by
any Borrower or Guarantor to Agent in this Agreement or in the other Financing
Agreements shall when made or deemed made be false or misleading in any material
respect;
(c) any Guarantor revokes or terminates or purports to revoke
or terminate or fails to perform (after expiration of any applicable grace
period) any of the terms, covenants, conditions or provisions of any guarantee,
endorsement or other Financing Agreement of such party in favor of Agent or any
Lender;
(d) any judgment for the payment of money is rendered against
any Borrower or Guarantor in excess of $2,500,000 in any one case (a "Single
Judgment") or in excess of $5,000,000 in the aggregate (Aggregate Judgment") (to
the extent not covered by insurance where the insurer has assumed responsibility
in writing for such judgment) and shall remain undischarged or unvacated or
unstayed for a period in excess of sixty (60) days or execution shall at any
time not be effectively stayed; except that, no Event of Default shall have
occurred pursuant to this Section 10.1(d) if (i) a Single Judgment is rendered
against any Borrower or Obligor in excess of $2,500,000, but less than
$5,000,000, and after giving effect to a reserve established by Working Capital
Agent with respect to such Single Judgment, in an amount equal to 100% thereof,
Borrowers have Excess Availability in excess of $20,000,000 or (ii) Aggregate
Judgments are rendered against any Borrower or Guarantor in excess of
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$5,000,000, but less than $7,500,000, and after giving effect to a reserve
established by Working Capital Agent with respect to such Aggregate Judgments,
in an amount equal to 100% thereof, Borrowers have Excess Availability in excess
of $20,000,000;
(e) any Borrower or any Guarantor, which is a partnership,
limited liability company, limited liability partnership or a corporation,
dissolves or suspends or discontinues doing business, except as otherwise
expressly permitted by this Agreement;
(f) any Borrower or Guarantor makes a general assignment for
the benefit of creditors, makes or sends notice of a bulk transfer as part of a
general assignment for the benefit of creditors or calls a meeting of its
creditors or principal creditors in connection with a moratorium or adjustment
of the Indebtedness due to them;
(g) a case or proceeding under the bankruptcy laws of the
United States of America now or hereafter in effect, other than the Chapter 11
Case, or under any insolvency, reorganization, receivership, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction now or
hereafter in effect (whether at law or in equity) is filed against any Borrower
or Obligor or all or any material part of its properties and such petition or
application is not dismissed within sixty (60) days after the date of its filing
or any Borrower or Obligor shall file any answer admitting or not contesting
such petition or application or indicates in writing its consent to,
acquiescence in or approval of, any such action or proceeding or the relief
requested is granted sooner;
(h) a case or proceeding under the bankruptcy laws of the
United States of America now or hereafter in effect or under any insolvency,
reorganization, receivership, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction now or hereafter in effect (whether at a law
or equity) is filed by any Borrower or Guarantor or for all or any part of its
property;
(i) any material default in respect of the Working Capital
Loan Documents, the New Notes or the New Notes Indenture or any other
Indebtedness of any Borrower or Guarantor (other than Indebtedness owing to
Agent and Lenders hereunder), in any case in an amount in excess of $5,000,000,
which default continues for more than the applicable cure period, if any, with
respect thereto and permits the Working Capital Lenders, holders of the New
Notes and/or New Notes Trustee or holders of any such other Indebtedness to
accelerate the maturity thereof and/or is not waived in writing by the other
parties thereto;
(j) any material provision hereof or of any of the other
Financing Agreements shall for any reason cease to be valid, binding and
enforceable with respect to any party hereto or thereto (other than Agent) in
accordance with its terms, or any such party shall challenge the enforceability
hereof or thereof, or shall assert in writing, or take any action or fail to
take any action based on the assertion that any provision hereof or of any of
the other Financing Agreements has ceased to be or is otherwise not valid,
binding or enforceable in accordance with its terms, or any security interest
provided for herein or in any of the other Financing Agreements shall cease to
be a valid and perfected first priority security interest in any of the
Collateral purported to be subject thereto (except as otherwise permitted herein
or therein);
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(k) an ERISA Event shall occur which results in or could
reasonably be expected to result in liability of any Borrower in an aggregate
amount in excess of $5,000,000; or
(l) any Change of Control;
(m) the indictment by any Governmental Authority of any
Borrower or Guarantor of which any Borrower, Guarantor or Agent receives notice,
as to which there is a reasonable possibility of an adverse determination, in
the good faith determination of Agent, under any criminal statute, or
commencement of criminal or civil proceedings against such Borrower or Obligor,
pursuant to which statute or proceedings the penalties or remedies sought or
available include forfeiture of (i) any of the Collateral having a value in
excess of $2,500,000 or (ii) any other property of any Borrower or Guarantor
which is necessary or material to the conduct of its business;
(n) there shall be a Material Adverse Effect with respect to
the Borrowers and Guarantors taken as a whole; or
(o) any default by Borrowers or Guarantors under the Plan or
the Confirmation Order that continues for more than the applicable cure period,
if any, with respect thereto that has resulted in a Material Adverse Effect.
10.2. Remedies.
(a) At any time an Event of Default exists or has occurred and
is continuing, Agent and Lenders shall have all rights and remedies provided in
this Agreement, the other Financing Agreements, the UCC and other applicable
law, all of which rights and remedies may be exercised without notice to or
consent by any Borrower or Obligor, except as such notice or consent is
expressly provided for hereunder or required by applicable law. All rights,
remedies and powers granted to Agent and Lenders hereunder, under any of the
other Financing Agreements, the UCC or other applicable law, are cumulative, not
exclusive and enforceable, in Agent's discretion, alternatively, successively,
or concurrently on any one or more occasions, and shall include, without
limitation, the right to apply to a court of equity for an injunction to
restrain a breach or threatened breach by any Borrower or Obligor of this
Agreement or any of the other Financing Agreements. Subject to Section 12
hereof, Agent may, and at the direction of the Required Lenders shall, at any
time or times, proceed directly against any Borrower or Obligor to collect the
Obligations without prior recourse to the Collateral.
(b) Without limiting the generality of the foregoing, at any
time an Event of Default exists or has occurred and is continuing, Agent may, at
its option and shall upon the direction of the Required Lenders, upon notice to
Administrative Borrower Representative, accelerate the payment of all
Obligations and demand immediate payment thereof to Agent for itself and the
benefit of Lenders (provided, that, upon the occurrence of any Event of Default
described in Sections 10.1(g) and 10.1(h), all Obligations shall automatically
become immediately due and payable).
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(c) Without limiting the foregoing and subject to the Term
Loan Intercreditor Agreement, at any time an Event of Default exists or has
occurred and is continuing, Agent may, in its discretion (i) with or without
judicial process or the aid or assistance of others, enter upon any premises on
or in which any of the Collateral may be located and take possession of the
Collateral or complete processing, manufacturing and repair of all or any
portion of the Collateral, (ii) require any Borrower or Obligor, at Borrowers'
expense, to assemble and make available to Agent any part or all of the
Collateral at any place and time designated by Agent, (iii) collect, foreclose,
receive, appropriate, setoff and realize upon any and all Collateral, (iv)
remove any or all of the Collateral from any premises on or in which the same
may be located for the purpose of effecting the sale, foreclosure or other
disposition thereof or for any other purpose, (v) sell, lease, transfer, assign,
deliver or otherwise dispose of any and all Collateral (including entering into
contracts with respect thereto, public or private sales at any exchange,
broker's board, at any office of Agent or elsewhere) at such prices or terms as
Agent may deem reasonable, for cash, upon credit or for future delivery, with
the Agent having the right to purchase the whole or any part of the Collateral
at any such public sale, all of the foregoing being free from any right or
equity of redemption of any Borrower or Obligor, which right or equity of
redemption is hereby expressly waived and released by Borrowers and Obligors
and/or (vi) terminate this Agreement. If any of the Collateral is sold or leased
by Agent upon credit terms or for future delivery, the Obligations shall not be
reduced as a result thereof until payment therefor is finally collected by
Agent. If notice of disposition of Collateral is required by law, ten (10) days'
prior notice (or such longer time period as may be required by applicable law)
by Agent to Administrative Borrower Representative designating the time and
place of any public sale or the time after which any private sale or other
intended disposition of Collateral is to be made, shall be deemed to be
reasonable notice thereof and Borrowers and Obligors waive any other notice. In
the event Agent institutes an action to recover any Collateral or seeks recovery
of any Collateral by way of prejudgment remedy, each Borrower and Obligor waives
the posting of any bond which might otherwise be required.
(d) Subject to the terms of the Term Loan Intercreditor
Agreement, at any time or times that an Event of Default exists or has occurred
and is continuing, Agent may, in its discretion, enforce the rights of any
Borrower or Obligor against any account debtor, secondary obligor or other
obligor in respect of any of the Accounts or other Receivables. Without limiting
the generality of the foregoing and subject to the terms of the Term Loan
Intercreditor Agreement, Agent may, in its discretion, at such time or times (i)
notify any or all account debtors, secondary obligors or other obligors in
respect thereof that the Receivables have been assigned to Agent and that Agent
has a security interest therein and Agent may direct any or all accounts
debtors, secondary obligors and other obligors to make payment of Receivables
directly to Agent, (ii) extend the time of payment of, compromise, settle or
adjust for cash, credit, return of merchandise or otherwise, and upon any terms
or conditions, any and all Receivables or other obligations included in the
Collateral and thereby discharge or release the account debtor or any secondary
obligors or other obligors in respect thereof without affecting any of the
Obligations, (iii) demand, collect or enforce payment of any Receivables or such
other obligations, but without any duty to do so, and Agent and Lenders shall
not be liable for any failure to collect or enforce the payment thereof nor for
the negligence of its agents or attorneys with respect thereto and (iv) take
whatever other action Agent may deem necessary or desirable for the protection
of its interests and the interests of Lenders. At any time that an Event of
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Default exists or has occurred and is continuing, at Agent's request and subject
to the terms of the Term Loan Intercreditor Agreement, all invoices and
statements sent to any account debtor shall state that the Accounts and such
other obligations have been assigned to Agent and are payable directly and only
to Agent and Borrowers and Obligors shall deliver to Agent such originals of
documents evidencing the sale and delivery of goods or the performance of
services giving rise to any Accounts as Agent may require. In the event any
account debtor returns Inventory when an Event of Default exists or has occurred
and is continuing, Borrowers shall, upon Agent's request and subject to the
terms of the Term Loan Intercreditor Agreement, hold the returned Inventory in
trust for Agent, segregate all returned Inventory from all of its other
property, dispose of the returned Inventory solely according to Agent's
instructions, and not issue any credits, discounts or allowances with respect
thereto without Agent's prior written consent.
(e) To the extent that applicable law imposes duties on Agent
or any Lender to exercise remedies in a commercially reasonable manner (which
duties cannot be waived under such law), each Borrower and Guarantor
acknowledges and agrees that it is not commercially unreasonable for Agent or
any Lender (i) to fail to incur expenses reasonably deemed significant by Agent
or any Lender to prepare Collateral for disposition or otherwise to complete raw
material or work in process into finished goods or other finished products for
disposition, (ii) to fail to obtain third party consents for access to
Collateral to be disposed of, or to obtain or, if not required by other law, to
fail to obtain consents of any Governmental Authority or other third party for
the collection or disposition of Collateral to be collected or disposed of,
(iii) to fail to exercise collection remedies against account debtors, secondary
obligors or other persons obligated on Collateral or to remove liens or
encumbrances on or any adverse claims against Collateral, (iv) to exercise
collection remedies against account debtors and other persons obligated on
Collateral directly or through the use of collection agencies and other
collection specialists, (v) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (vi) to contact other persons, whether or not in the
same business as any Borrower or Guarantor, for expressions of interest in
acquiring all or any portion of the Collateral, (vii) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the collateral is of a specialized nature, (viii) to dispose of Collateral
by utilizing Internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capability of doing so,
or that match buyers and sellers of assets, (ix) to dispose of assets in
wholesale rather than retail markets, (x) to disclaim disposition warranties,
(xi) to purchase insurance or credit enhancements to insure Agent or Lenders
against risks of loss, collection or disposition of Collateral or to provide to
Agent or Lenders a guaranteed return from the collection or disposition of
Collateral, or (xii) to the extent deemed appropriate by Agent, to obtain the
services of other brokers, investment bankers, consultants and other
professionals to assist Agent in the collection or disposition of any of the
Collateral. Each Borrower and Guarantor acknowledges that the purpose of this
Section is to provide non-exhaustive indications of what actions or omissions by
Agent or any Lender would not be commercially unreasonable in the exercise by
Agent or any Lender of remedies against the Collateral and that other actions or
omissions by Agent or any Lender shall not be deemed commercially unreasonable
solely on account of not being indicated in this Section. Without limitation of
the foregoing, nothing contained in this Section shall be construed to grant any
rights to any Borrower or Guarantor or
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to impose any duties on Agent or Lenders that would not have been granted or
imposed by this Agreement or by applicable law in the absence of this Section.
(f) For the purpose of enabling Agent to exercise the rights
and remedies hereunder, each Borrower and Obligor hereby grants to Agent, to the
extent assignable, an irrevocable, non-exclusive license (exercisable at any
time an Event of Default has occurred and is continuing) without payment of
royalty or other compensation to any Borrower or Obligor, to use, assign,
license or sublicense any of the trademarks, service-marks, trade names,
business names, trade styles, designs, logos and other source of business
identifiers and other Intellectual Property and general intangibles now owned or
hereafter acquired by any Borrower or Obligor, wherever the same maybe located,
including in such license reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer programs used for
the compilation or printout thereof.
(g) Subject to the terms of the Term Loan Intercreditor
Agreement, at any time an Event of Default exists or has occurred and is
continuing, Agent may apply the cash proceeds of Collateral actually received by
Agent from any sale, lease, foreclosure or other disposition of the Collateral
to payment of the Obligations, in whole or in part and in accordance with the
terms hereof, whether or not then due or may hold such proceeds as cash
collateral for the Obligations. Borrowers and Guarantors shall remain liable to
Agent and Lenders for the payment of any deficiency with interest at the highest
rate provided for herein and all costs and expenses of collection or
enforcement, including reasonable attorneys' fees and expenses.
(h) Notwithstanding anything to the contrary contained herein,
Borrowers and Guarantors shall not be obligated to pay or reimburse Agent and
Lenders for any costs and expenses (including attorneys' fees and expenses) paid
or incurred in connection with any claims asserted by Agent or any Lender
against Agent or any other Lender, as applicable, arising in connection with,
this Agreement or any other Financing Agreement.
SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW
11.1. Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver.
(a) The validity, interpretation and enforcement of this
Agreement and the other Financing Agreements (except as otherwise provided
therein) and any dispute arising out of the relationship between the parties
hereto, whether in contract, tort, equity or otherwise, shall be governed by the
internal laws of the State of New York but excluding any principles of conflicts
of law or other rule of law that would cause the application of the law of any
jurisdiction other than the laws of the State of New York.
(b) Borrowers, Guarantors, Agent and Lenders irrevocably
consent and submit to the non-exclusive jurisdiction of the Supreme Court of the
State of New York for the County of New York and the United States District
Court for the Southern District of New York, whichever Agent may elect, and
waive any objection based on venue or forum non conveniens with respect to any
action instituted therein arising under this Agreement or any of the other
Financing Agreements or in any way connected with or related or incidental to
the
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dealings of the parties hereto in respect of this Agreement or any of the other
Financing Agreements or the transactions related hereto or thereto, in each case
whether now existing or hereafter arising, and whether in contract, tort, equity
or otherwise, and agree that any dispute with respect to any such matters shall
be heard only in the courts described above (except that Agent and Lenders shall
have the right to bring any action or proceeding against any Borrower or
Guarantor or its or their property in the courts of any other jurisdiction which
Agent deems necessary or appropriate in order to realize on the Collateral or to
otherwise enforce its rights against any Borrower or Guarantor or its or their
property).
(c) Each Borrower and Guarantor hereby waives personal service
of any and all process upon it and consents that all such service of process may
be made by certified mail (return receipt requested) directed to its address set
forth herein and service so made shall be deemed to be completed five (5) days
after the same shall have been so deposited in the U.S. mails, or, at Agent's
option, by service upon any Borrower or Guarantor (or Administrative Borrower
Representative on behalf of such Borrower or Guarantor) in any other manner
provided under the rules of any such courts.
(d) BORROWERS, GUARANTORS, AGENT AND LENDERS EACH HEREBY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR
IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING
AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR
OTHERWISE. BORROWERS, GUARANTORS, AGENT AND LENDERS EACH HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY AND THAT ANY BORROWER, ANY GUARANTOR, AGENT OR ANY
LENDER MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
(e) Agent and Lenders shall not have any liability to any
Borrower or Guarantor (whether in tort, contract, equity or otherwise) for
losses suffered by such Borrower or Guarantor in connection with, arising out
of, or in any way related to the transactions or relationships contemplated by
this Agreement, or any act, omission or event occurring in connection herewith,
unless it is determined by a final and non-appealable judgment or court order
binding on Agent and such Lender, that the losses were the result of acts or
omissions constituting gross negligence or willful misconduct of Agent or such
Lender. Each Borrower and Guarantor: (i) certifies that neither Agent, any
Lender nor any representative, agent or attorney acting for or on behalf of
Agent or any Lender has represented, expressly or otherwise, that Agent and
Lenders would not, in the event of litigation, seek to enforce any of the
waivers provided for in this Agreement or any of the other Financing Agreements
and (ii) acknowledges that in entering into this Agreement and the other
Financing Agreements, Agent and Lenders are
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relying upon, among other things, the waivers and certifications set forth in
this Section 11.1 and elsewhere herein and therein.
11.2. Waiver of Notices. Each Borrower and Guarantor hereby expressly
waives demand, presentment, protest and notice of protest and notice of dishonor
with respect to any and all instruments and chattel paper, included in or
evidencing any of the Obligations or the Collateral, and any and all other
demands and notices of any kind or nature whatsoever with respect to the
Obligations, the Collateral and this Agreement, except such as are expressly
provided for herein. No notice to or demand on any Borrower or Guarantor which
Agent or any Lender may elect to give shall entitle such Borrower or Guarantor
to any other or further notice or demand in the same, similar or other
circumstances, except such as are expressly provided for herein or such notices
which Borrowers may not waive in accordance with applicable law.
11.3. Amendments and Waivers.
(a) Neither this Agreement nor any other Financing Agreement
nor any terms hereof or thereof may be amended, waived, discharged or terminated
unless such amendment, waiver, discharge or termination is in writing signed by
Agent and the Required Lenders or at Agent's option, by Agent with the
authorization of the Required Lenders, and as to amendments to any of the
Financing Agreements (other than with respect to any provision of Section 12
hereof), by any Borrower; except, that, no such amendment, waiver, discharge or
termination shall:
(i) reduce the interest rate or any fees or extend the
scheduled time of payment of principal, interest or any fees (it being
understood that the waiver of any mandatory prepayment pursuant to Section 6.4
shall not constitute an extension of the scheduled time of payment of principal,
interest or any fees), in each case without the consent of each Lender directly
affected thereby,
(ii) release any Collateral (except as expressly required or
permitted hereunder or under any of the other Financing Agreements or applicable
law and except as permitted under Section 12.11 hereof), without the consent of
Agent and all of Lenders,
(iii) reduce any percentage specified in the definition of
Required Lenders, without the consent of Agent and all of Lenders,
(iv) consent to the assignment or transfer by any Borrower or
Guarantor of any of their rights and obligations under this Agreement, without
the consent of Agent and all of Lenders, except as otherwise expressly permitted
hereunder, or
(v) amend, modify or waive any terms of this Section 11.3
hereof, to the extent the substance of this Section is affected, without the
consent of Agent and all of Lenders.
(b) Agent and Lenders shall not, by any act, delay, omission
or otherwise be deemed to have expressly or impliedly waived any of its or their
rights, powers and/or remedies unless such waiver shall be in writing and signed
as provided herein. Any such
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waiver shall be enforceable only to the extent specifically set forth therein. A
waiver by Agent or any Lender of any right, power and/or remedy on any one
occasion shall not be construed as a bar to or waiver of any such right, power
and/or remedy which Agent or any Lender would otherwise have on any future
occasion, whether similar in kind or otherwise.
(c) Notwithstanding anything to the contrary contained in
Section 11.3(a) above, in connection with any amendment, waiver, discharge or
termination, in the event that any Lender whose consent thereto is required
shall fail to consent or fail to consent in a timely manner (such Lender being
referred to herein as a "Non-Consenting Lender"), but the consent of any other
Lenders to such amendment, waiver, discharge or termination that is required are
obtained, if any, then Silver Point shall have the right, but not the
obligation, at any time thereafter, and upon the exercise by Silver Point of
such right, such Non-Consenting Lender shall have the obligation, to sell,
assign and transfer to Silver Point or such Eligible Transferee as Silver Point
may specify, such Non-Consenting Lender's portion of the Loan and all rights and
interests of such Non-Consenting Lender pursuant thereto. Silver Point shall
provide the Non-Consenting Lender with prior written notice of its intent to
exercise its right under this Section, which notice shall specify on date on
which such purchase and sale shall occur. Such purchase and sale shall be
pursuant to the terms of an Assignment and Acceptance (whether or not executed
by the Non-Consenting Lender), except that on the date of such purchase and
sale, Silver Point, or such Eligible Transferee specified by Silver Point, shall
pay to the Non-Consenting Lender (except as Silver Point and such Non-Consenting
Lender may otherwise agree) the amount equal to: (i) the principal balance of
the Loan held by the Non-Consenting Lender outstanding as of the close of
business on the business day immediately preceding the effective date of such
purchase and sale, plus (ii) amounts accrued and unpaid in respect of interest
and fees payable to the Non-Consenting Lender to the effective date of the
purchase (but in no event shall the Non-Consenting Lender be deemed entitled to
any early termination fee), minus (iii) the amount of the closing fee received
by the Non-Consenting Lender pursuant to the terms hereof or of any of the other
Financing Agreements multiplied by the fraction, the numerator of which is the
number of months remaining in the then current term of the Credit Facility and
the denominator of which is the number of months in the then current term
thereof. Such purchase and sale shall be effective on the date of the payment of
such amount to the Non-Consenting Lender.
(d) The consent of Agent shall be required for any amendment,
waiver or consent affecting the rights or duties of Agent hereunder or under any
of the other Financing Agreements, in addition to the consent of the Lenders
otherwise required by this Section.
11.4. Waiver of Counterclaims. Each Borrower and Guarantor waives all
rights to interpose any claims, deductions, setoffs or counterclaims of any
nature (other then compulsory counterclaims) in any action or proceeding with
respect to this Agreement, the Obligations, the Collateral or any matter arising
therefrom or relating hereto or thereto.
11.5. Indemnification. Each Borrower and Guarantor shall, jointly and
severally, indemnify and hold Agent and each Lender, and its officers,
directors, agents, employees, advisors and counsel and their respective
Affiliates (each such person being an "Indemnitee"), harmless from and against
any and all losses, claims, damages, liabilities, costs or
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expenses (including reasonable attorneys' fees and expenses (to be limited to
one (1) outside counsel to Agent and Lenders so long as no Default or Event of
Default has occurred and is continuing) imposed on, incurred by or asserted
against any of them in connection with any litigation, investigation, claim or
proceeding commenced or threatened in writing related to the negotiation,
preparation, execution, delivery, enforcement, performance or administration of
this Agreement, any other Financing Agreements, or any undertaking or proceeding
related to any of the transactions contemplated hereby or any act, omission,
event or transaction related or attendant thereto, including amounts paid in
settlement, court costs, and the reasonable fees and expenses of counsel (to be
limited to one (1) outside counsel to Agent and Lenders so long as no Default or
Event of Default has occurred and is continuing) except that Borrowers and
Guarantors shall not have any obligation under this Section 11.5 to indemnify an
Indemnitee with respect to (a) a matter covered hereby resulting from the gross
negligence or wilful misconduct of such Indemnitee as determined pursuant to a
final, non-appealable order of a court of competent jurisdiction (but without
limiting the obligations of Borrowers or Guarantors as to any other Indemnitee)
or (b) Taxes, the indemnification for which shall be governed by Section 6.11
hereof. To the extent that the undertaking to indemnify, pay and hold harmless
set forth in this Section may be unenforceable because it violates any law or
public policy, Borrowers and Guarantors shall pay the maximum portion which it
is permitted to pay under applicable law to Agent and Lenders in satisfaction of
indemnified matters under this Section. To the extent permitted by applicable
law, no Borrower or Guarantor shall assert, and each Borrower and Guarantor
hereby waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, any of the other Financing Agreements or any undertaking or
transaction contemplated hereby. All amounts due under this Section shall be
payable upon demand. The foregoing indemnity shall survive the payment of the
Obligations and the termination or non-renewal of this Agreement.
SECTION 12. THE AGENT
12.1. Appointment, Powers and Immunities. Each Lender irrevocably
designates, appoints and authorizes Silver Point to act as Agent hereunder and
under the other Financing Agreements with such powers as are specifically
delegated to Agent by the terms of this Agreement and of the other Financing
Agreements, together with such other powers as are reasonably incidental
thereto. Agent (a) shall have no duties or responsibilities except those
expressly set forth in this Agreement and in the other Financing Agreements, and
shall not by reason of this Agreement or any other Financing Agreement be a
trustee or fiduciary for any Lender; (b) shall not be responsible to Lenders for
any recitals, statements, representations or warranties contained in this
Agreement or in any of the other Financing Agreements, or in any certificate or
other document referred to or provided for in, or received by any of them under,
this Agreement or any other Financing Agreement, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Financing Agreement or any other document referred to or provided for
herein or therein or for any failure by any Borrower or any Obligor or any other
Person to perform any of its obligations hereunder or thereunder; and (c) shall
not be responsible to Lenders for any action taken or omitted to be taken by it
hereunder or under any other Financing Agreement or under any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith,
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except for its own gross negligence or willful misconduct as determined by a
final non-appealable judgment of a court of competent jurisdiction. Agent may
employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
in good faith. Agent may deem and treat the payee of any note as the holder
thereof for all purposes hereof unless and until the assignment thereof pursuant
to an agreement (if and to the extent permitted herein) in form and substance
satisfactory to Agent shall have been delivered to and acknowledged by Agent.
12.2. Reliance by Agent. Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telecopy, telex, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by Agent. As to any matters not expressly
provided for by this Agreement or any other Financing Agreement, Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
or thereunder in accordance with instructions given by the Required Lenders or
all of Lenders as is required in such circumstance, and such instructions of
such Agents and any action taken or failure to act pursuant thereto shall be
binding on all Lenders.
12.3. Events of Default.
(a) Agent shall not be deemed to have knowledge or notice of
the occurrence of a Default or an Event of Default or other failure of a
condition precedent to the Loan hereunder, unless and until Agent has received
written notice from a Lender, or a Borrower specifying such Event of Default or
any unfulfilled condition precedent, and stating that such notice is a "Notice
of Default or Failure of Condition". In the event that Agent receives such a
Notice of Default or Failure of Condition, Agent shall give prompt notice
thereof to the Lenders. Agent shall (subject to Section 12.7) take such action
with respect to any such Event of Default or failure of condition precedent as
shall be directed by the Required Lenders to the extent provided for herein;
provided, that, unless and until Agent shall have received such directions,
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to or by reason of such Event of Default or
failure of condition precedent, as it shall deem advisable in the best interest
of Lenders.
(b) Except with the prior written consent of Agent, no Lender
may assert or exercise any enforcement right or remedy in respect of the Loans
or other Obligations, as against any Borrower or Obligor or any of the
Collateral or other property of any Borrower or Obligor.
12.4. Silver Point in its Individual Capacity. With respect to its
Commitment and the Loan made by it (and any successor acting as Agent), if and
so long as Silver Point shall be a Lender hereunder, it shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not acting as Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include Silver Point in its individual
capacity as Lender hereunder. Silver Point (and any successor acting as Agent)
and its Affiliates may (without having to account therefor to any Lender) lend
money to, make investments in and
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generally engage in any kind of business with Borrowers (and any of their
Subsidiaries or Affiliates) as if it were not acting as Agent, and Silver Point
and its Affiliates may accept fees and other consideration from any Borrower or
Guarantor and any of its Subsidiaries and Affiliates for services in connection
with this Agreement or otherwise without having to account for the same to
Lenders.
12.5. Indemnification. Lenders agree to indemnify Agent (to the extent
not reimbursed by Borrowers hereunder and without limiting any obligations of
Borrowers hereunder) ratably, in accordance with their Pro Rata Shares, for any
and all claims of any kind and nature whatsoever that may be imposed on,
incurred by or asserted against Agent (including by any Lender) arising out of
or by reason of any investigation in or in any way relating to or arising out of
this Agreement or any other Financing Agreement or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including the costs and expenses that Agent is
obligated to pay hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, provided, that, no Lender shall be
liable for any of the foregoing to the extent it arises from the gross
negligence or willful misconduct of the party to be indemnified as determined by
a final non-appealable judgment of a court of competent jurisdiction. The
foregoing indemnity shall survive the payment of the Obligations and the
termination or non-renewal of this Agreement.
12.6. Non-Reliance on Agent and Other Lenders. Each Lender agrees that
it has, independently and without reliance on Agent or other Lender, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis of Borrowers and Obligors and has made its own decision to enter
into this Agreement and that it will, independently and without reliance upon
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any of the
other Financing Agreements. Agent shall not be required to keep itself informed
as to the performance or observance by any Borrower or Obligor of any term or
provision of this Agreement or any of the other Financing Agreements or any
other document referred to or provided for herein or therein or to inspect the
properties or books of any Borrower or Obligor. Agent will use reasonable
efforts to provide Lenders with any information received by Agent from any
Borrower or Obligor which is required to be provided to Lenders or deemed to be
requested by Lenders hereunder and with a copy of any Notice of Default or
Failure of Condition received by Agent from any Borrower or any Lender;
provided, that, Agent shall not be liable to any Lender for any failure to do
so, except to the extent that such failure is attributable to Agent's own gross
negligence or willful misconduct as determined by a final non-appealable
judgment of a court of competent jurisdiction. Except for notices, reports and
other documents expressly required to be furnished to Lenders by Agent or deemed
requested by Lenders hereunder, Agent shall not have any duty or responsibility
to provide any Lender with any other credit or other information concerning the
affairs, financial condition or business of any Borrower or Obligor that may
come into the possession of Agent.
12.7. Failure to Act. Except for action expressly required of Agent
hereunder and under the other Financing Agreements, Agent shall in all cases be
fully justified in failing or refusing to act hereunder and thereunder unless it
shall receive further assurances to its
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satisfaction from Lenders of their indemnification obligations under Section
12.5 hereof against any and all liability and expense that may be incurred by it
by reason of taking or continuing to take any such action.
12.8. Concerning the Collateral and the Related Financing Agreements.
Each Lender authorizes and directs Agent to enter into this Agreement and the
other Financing Agreements. Each Lender agrees that any action taken by Agent or
Required Lenders in accordance with the terms of this Agreement or the other
Financing Agreements and the exercise by Agent or Required Lenders of their
respective powers set forth therein or herein, together with such other powers
that are reasonably incidental thereto, shall be binding upon all of the
Lenders.
12.9. Field Audit, Examination Reports and other Information;
Disclaimer by Lenders. By signing this Agreement, each Lender:
(a) is deemed to have requested that Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report and report with respect to the Borrowing Base prepared or
received by Agent (each field audit or examination report and report with
respect to the Borrowing Base being referred to herein as a "Report" and
collectively, "Reports"), appraisals with respect to the Collateral and
financial statements with respect Parent and its Subsidiaries received by Agent;
(b) expressly agrees and acknowledges that Agent (i) does not
make any representation or warranty as to the accuracy of any Report, appraisal
or financial statement or (ii) shall not be liable for any information contained
in any Report, appraisal or financial statement;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or any other party performing
any audit or examination will inspect only specific information regarding
Borrowers and Guarantors and will rely significantly upon Borrowers' and
Guarantors' books and records, as well as on representations of Borrowers' and
Guarantors' personnel; and
(d) agrees to keep all Reports confidential and strictly for
its internal use in accordance with the terms of Section 13.5 hereof, and not to
distribute or use any Report in any other manner.
12.10. Collateral Matters.
(a) Agent may, at its option, from time to time, at any time
on or after an Event of Default and for so long as the same is continuing or
upon any other failure of a condition precedent to the Loan hereunder, make such
disbursements and advances ("Special Agent Advances") which Agent, in its sole
discretion, (i) deems necessary or desirable either to preserve or protect the
Collateral or any portion thereof or (ii) to enhance the likelihood or maximize
the amount of repayment by Borrowers and Guarantors of the Loan and other
Obligations, or (iii) to pay any other amount chargeable to any Borrower or
Guarantor pursuant to the terms of this Agreement or any of the other Financing
Agreements consisting of costs, fees and expenses payable in accordance with
this Agreement. Special Agent Advances shall be
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repayable on demand and together with all interest thereon shall constitute
Obligations secured by the Collateral. Special Agent Advances shall not
constitute a portion of the Loan but shall otherwise constitute Obligations
hereunder. Interest on Special Agent Advances shall be payable at the Interest
Rate then applicable to Prime Rate Loans and shall be payable on demand. Each
Lender agrees that it shall make available to Agent, upon Agent's demand, in
immediately available funds, the amount equal to such Lender's Pro Rata Share of
each such Special Agent Advance. If such funds are not made available to Agent
by such Lender, such Lender shall be deemed a Defaulting Lender and Agent shall
be entitled to recover such funds, on demand from such Lender together with
interest thereon for each day from the date such payment was due until the date
such amount is paid to Agent at the Federal Funds Rate for each day during such
period (as published by the Federal Reserve Bank of New York or at Agent's
option based on the arithmetic mean determined by Agent of the rates for the
last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that day by each of the three leading brokers of Federal
funds transactions in New York City selected by Agent) and if such amounts are
not paid within three (3) days of Agent's demand, at the highest Interest Rate
provided for in Section 3.1 hereof applicable to Prime Rate Loans.
(b) Lenders hereby irrevocably authorize Agent, at its option
and in its discretion to release any security interest in, mortgage or lien
upon, any of the Collateral (i) upon payment and satisfaction of all of the
Obligations and delivery of cash collateral to the extent required under Section
13.1 below, or (ii) constituting property being sold or disposed of if
Administrative Borrower Representative or any Borrower or Guarantor certifies to
Agent that the sale or disposition is made in compliance with Section 9.7 hereof
(and Agent may rely conclusively on any such certificate, without further
inquiry), or (iii) constituting property in which any Borrower or Guarantor did
not own an interest at the time the security interest, mortgage or lien was
granted or at any time thereafter, or (iv) having a value in the aggregate in
any twelve (12) month period of less than $1,500,000, and to the extent Agent
may release its security interest in and lien upon any such Collateral pursuant
to the sale or other disposition thereof, such sale or other disposition shall
be deemed consented to by Lenders, or (v) if required or permitted under the
terms of any of the other Financing Agreements, including any intercreditor
agreement, or (vi) approved, authorized or ratified in writing by all of
Lenders. Except as provided above, Agent will not release any security interest
in, mortgage or lien upon, any of the Collateral without the prior written
authorization of all of Lenders. Upon request by Agent at any time, Lenders will
promptly confirm in writing Agent's authority to release particular types or
items of Collateral pursuant to this Section.
(c) Without any manner limiting Agent's authority to act
without any specific or further authorization or consent by the Required
Lenders, each Lender agrees to confirm in writing, upon request by Agent, the
authority to release Collateral conferred upon Agent under this Section. Agent
shall (and is hereby irrevocably authorized by Lenders to) execute such
documents as may be necessary to evidence the release of the security interest,
mortgage or liens granted to Agent upon any Collateral to the extent set forth
above; provided, that, (i) Agent shall not be required to execute any such
document on terms which, in Agent's opinion, would expose Agent to liability or
create any obligations or entail any consequence other than the release of such
security interest, mortgage or liens without recourse or warranty and (ii) such
release shall not in any manner discharge, affect or impair the Obligations or
any
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security interest, mortgage or lien upon (or obligations of any Borrower or
Guarantor in respect of) the Collateral retained by such Borrower or Guarantor.
(d) Agent shall have no obligation whatsoever to any Lender or
any other Person to investigate, confirm or assure that the Collateral exists or
is owned by any Borrower or Guarantor or is cared for, protected or insured or
has been encumbered, or that the liens and security interests granted to Agent
pursuant hereto or any of the Financing Agreements or otherwise have been
properly or sufficiently or lawfully created, perfected, protected or enforced
or are entitled to any particular priority, or to exercise at all or in any
particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to Agent in this Agreement or in any of the other Financing
Agreements, it being understood and agreed that in respect of the Collateral, or
any act, omission or event related thereto, subject to the other terms and
conditions contained herein, Agent may act in any manner it may deem
appropriate, in its discretion, given Agent's own interest in the Collateral as
a Lender and that Agent shall have no duty or liability whatsoever to any other
Lender.
12.11. Agency for Perfection. Each Lender hereby appoints Agent and
each other Lender as agent and bailee for the purpose of perfecting the security
interests in and liens upon the Collateral of Agent in assets which, in
accordance with Article 9 of the UCC can be perfected only by possession (or
where the security interest of a secured party with possession has priority over
the security interest of another secured party) and Agent and each Lender hereby
acknowledges that it holds possession of any such Collateral for the benefit of
Agent as secured party. Should any Lender obtain possession of any such
Collateral, such Lender shall notify Agent thereof, and, promptly upon Agent's
request therefor shall deliver such Collateral to Agent or in accordance with
Agent's instructions.
12.12. Successor Agent. Agent may resign as Agent upon thirty (30)
days' notice to Lenders and Administrative Borrower Representative. If Agent
resigns under this Agreement, the Required Lenders shall appoint from among the
Lenders a successor agent for Lenders. If no successor agent is appointed prior
to the effective date of the resignation of Agent, Agent may appoint, after
consulting with Lenders and Administrative Borrower Representative, a successor
agent from among Lenders. Upon the acceptance by the Lender so selected of its
appointment as successor agent hereunder, such successor agent shall succeed to
all of the rights, powers and duties of the retiring Agent and the term "Agent"
as used herein and in the other Financing Agreements shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 12 shall inure to its benefit as to any actions taken
or omitted by it while it was Agent under this Agreement. If no successor agent
has accepted appointment as Agent by the date which is thirty (30) days after
the date of a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nonetheless thereupon become effective and Lenders shall
perform all of the duties of Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above.
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SECTION 13. TERM OF AGREEMENT; MISCELLANEOUS
13.1. Term.
(a) This Agreement and the other Financing Agreements shall
become effective as of the date set forth on the first page hereof. Upon the
Final Maturity Date, Borrowers shall pay to Agent all outstanding and unpaid
Obligations and shall furnish cash collateral to Agent (or at Agent's option, a
letter of credit issued for the account of Borrowers and at Borrowers' expense,
in form and substance satisfactory to Agent, by an issuer acceptable to Agent
and payable to Agent as beneficiary) in such amounts as Agent determines are
reasonably necessary to secure Agent and Lenders from loss, cost, damage or
expense, including reasonable attorneys' fees and expenses (limited to one (1)
outside counsel to Agent and Lenders so long as no Default or Event of Default
has occurred and is continuing), in connection with any contingent Obligations,
including issued and outstanding checks or other payments provisionally credited
to the Obligations and/or as to which Agent or any Lender has not yet received
final and indefeasible payment and any continuing obligations of Agent or any
Lender pursuant to any Deposit Account Control Agreement. Such payments in
respect of the Obligations shall be remitted by wire transfer in Federal funds
to the Agent Payment Account or such other bank account of Agent, as Agent may,
in its discretion, designate in writing to Administrative Borrower
Representative for such purpose. Interest shall be due until and including the
next Business Day, if the amounts so paid by Borrowers to the Agent Payment
Account or other bank account designated by Agent are received in such bank
account later than 1:00 p.m., Chicago time.
(b) No termination of this Agreement or the other Financing
Agreements shall relieve or discharge any Borrower or Guarantor of its
respective duties, obligations and covenants under this Agreement or the other
Financing Agreements until all Obligations have been fully and finally
discharged and paid, and Agent's continuing security interest in the Collateral
and the rights and remedies of Agent and Lenders hereunder, under the other
Financing Agreements and applicable law, shall remain in effect until all such
Obligations have been fully and finally discharged and paid. Accordingly, each
Borrower and Guarantor waives any rights it may have under the UCC to demand the
filing of termination statements with respect to the Collateral and Agent shall
not be required to send such termination statements to Borrowers or Guarantors,
or to file them with any filing office, unless and until all Obligations paid
and satisfied in full in immediately available funds.
13.2. Interpretative Provisions.
(a) All terms used herein which are defined in Article 1,
Article 8 or Article 9 of the UCC shall have the meanings given therein unless
otherwise defined in this Agreement.
(b) All references to the plural herein shall also mean the
singular and to the singular shall also mean the plural unless the context
otherwise requires.
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(c) All references to any Borrower, Guarantor, Agent and
Lenders pursuant to the definitions set forth in the recitals hereto, or to any
other person herein, shall include their respective successors and assigns.
(d) The words "hereof", "herein", "hereunder", "this
Agreement" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not any particular provision of this Agreement
and as this Agreement now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
(e) The word "including" when used in this Agreement shall
mean "including, without limitation" and the word "will" when used in this
Agreement shall be construed to have the same meaning and effect as the word
"shall".
(f) An Event of Default shall exist or continue or be
continuing until such Event of Default is waived in accordance with Section 11.3
or is cured in a manner satisfactory to Agent, if such Event of Default is
capable of being cured as determined in good faith by Agent.
(g) All references to the term "good faith" used herein when
applicable to Agent or any Lender shall mean, notwithstanding anything to the
contrary contained herein or in the UCC, honesty in fact in the conduct or
transaction concerned and the observance of reasonable commercial standards of
fair dealing based on how a second-lien term lender with similar rights
providing a credit agreement of the type set forth herein would act in similar
circumstances at the time with the information then available to it.
(h) Any accounting term used in this Agreement shall have,
unless otherwise specifically provided herein, the meaning customarily given in
accordance with GAAP, and all financial computations hereunder shall be computed
unless otherwise specifically provided herein, in accordance with GAAP as
consistently applied and using the same method for inventory valuation as used
in the preparation of the financial statements of Parent most recently received
by Agent prior to the date hereof. Notwithstanding anything to the contrary
contained in GAAP or any interpretations or other pronouncements by the
Financial Accounting Standards Board or otherwise, the term "unqualified
opinion" as used herein to refer to opinions or reports provided by accountants
shall mean an opinion or report that is unqualified and also does not include
any explanation, supplemental comment or other comment concerning the ability of
the applicable person to continue as a going concern or the scope of the audit.
(i) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including", the
words "to" and "until" each mean "to but excluding" and the word "through" means
"to and including".
(j) Unless otherwise expressly provided herein, (i) references
herein to any agreement, document or instrument shall be deemed to include all
subsequent amendments, modifications, supplements, extensions, renewals,
restatements or replacements with respect thereto, but only to the extent the
same are not prohibited by the terms hereof or of any other Financing Agreement,
and (ii) references to any statute or regulation are to be
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construed as including all statutory and regulatory provisions consolidating,
amending, replacing, recodifying, supplementing or interpreting the statute or
regulation.
(k) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(l) This Agreement and other Financing Agreements may use
several different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are cumulative and
shall each be performed in accordance with their terms.
(m) This Agreement and the other Financing Agreements are the
result of negotiations among and have been reviewed by counsel to Agent and the
other parties, and are the products of all parties. Accordingly, this Agreement
and the other Financing Agreements shall not be construed against Agent or
Lenders merely because of Agent's or any Lender's involvement in their
preparation.
(n) When the payment of any obligation or the performance of
any covenant, duty or obligation is stated to be due or performance required on
a day which is not a Business Day, the date of such payment or performance shall
extend to the immediately succeeding Business Day.
13.3. Notices. All notices, requests and demands hereunder shall be in
writing and deemed to have been given or made: if delivered in person,
immediately upon delivery; if by telex, telegram or facsimile transmission,
immediately upon sending and upon confirmation of receipt; if by nationally
recognized overnight courier service with instructions to deliver the next
Business Day, one (1) Business Day after sending; and if by certified mail,
return receipt requested, five (5) days after mailing. All notices, requests and
demands upon the parties are to be given to the following addresses (or to such
other address as any party may designate by notice in accordance with this
Section):
If to Administrative Borrower International Wire Group, Inc.
Representative or any Borrower 000 Xxxxx Xxxxxx Xxxx
or Guarantor: Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telephone No.: 000-000-0000
Telecopy No.: 000-000-0000
with a courtesy (and not obligatory) Xxxx Xxxxxxx & Xxxxxx LLP
copy to: 000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx
Telephone No.: 000-000-0000
Telecopy No.: 000-000-0000
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If to Agent: Silver Point Finance, LLC
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telephone No.: 000-000-0000
Telecopy No.: 000-000-0000
with a courtesy (and not Xxxxxxx Xxxx & Xxxxx LLP
obligatory) copy to: 000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone No.: 000-000-0000
Telecopy No.: 000-000-0000
13.4. Partial Invalidity. If any provision of this Agreement is held to
be invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Agreement as a whole, but this Agreement shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.
13.5. Confidentiality.
(a) Agent and each Lender shall use all reasonable efforts to
keep confidential, in accordance with its customary procedures for handling
confidential information and safe and sound lending practices, any non-public
information supplied to it by any Borrower pursuant to this Agreement which is
clearly and conspicuously marked as confidential at the time such information is
furnished by such Borrower to Agent or such Lender, provided, that, nothing
contained herein shall limit the disclosure of any such information: (i) to the
extent required by statute, rule, regulation, subpoena or court order, (ii) to
bank examiners and other regulators, auditors and/or accountants, (iii) in
connection with any litigation to which Agent or such Lender is a party, (iv) to
any Lender or Participant (or prospective Lender or Participant) or to any
Affiliate of any Lender so long as such Lender or Participant (or prospective
Lender or Participant) or Affiliate shall have been instructed in writing to
treat such information as confidential in accordance with this Section 13.5, or
(v) to counsel for Agent or any Lender or Participant (or prospective Lender or
Participant).
(b) In the event that Agent or any Lender receives a request
or demand to disclose any confidential information pursuant to any subpoena or
court order, Agent or such Lender, as the case may be, agrees (i) to the extent
permitted by applicable law or if permitted by applicable law, to the extent
Agent or such Lender determines in good faith that it will not create any risk
of liability to Agent or such Lender, Agent or such Lender will promptly notify
Administrative Borrower Representative of such request so that Administrative
Borrower Representative may seek a protective order or other appropriate relief
or remedy and (ii) if disclosure of such information is required, disclose such
information and, subject to reimbursement by Borrowers of Agent's or such
Lender's expenses, cooperate with Administrative Borrower Representative in the
reasonable efforts to obtain an order or other
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reliable assurance that confidential treatment will be accorded to such portion
of the disclosed information which Administrative Borrower Representative so
designates, to the extent permitted by applicable law or if permitted by
applicable law, to the extent Agent or such Lender determines in good faith that
it will not create any risk of liability to Agent or such Lender.
(c) In no event shall this Section 13.5 or any other provision
of this Agreement, any of the other Financing Agreements or applicable law be
deemed: (i) to apply to or restrict disclosure of information that has been or
is made public by any Borrower, Guarantor or any third party or otherwise
becomes generally available to the public other than as a result of a disclosure
in violation hereof or, to the knowledge of Agent or any Lender, in violation of
any other confidentiality obligation of such third party, (ii) to apply to or
restrict disclosure of information that was or becomes available to Agent or any
Lender (or any Affiliate of any Lender) on a non-confidential basis from a
person other than a Borrower or Guarantor, other than from a Person known to
Agent and/or Lenders to be subject to a confidentiality obligation, (iii) to
require Agent or any Lender to return any materials furnished by a Borrower or
Guarantor to Agent or a Lender or prevent Agent or a Lender from responding to
routine informational requests in accordance with the Code of Ethics for the
Exchange of Credit Information promulgated by The Xxxxxx Xxxxxx Associates or
other applicable industry standards relating to the exchange of credit
information. The obligations of Agent and Lenders under this Section 13.5 shall
supersede and replace the obligations of Agent and Lenders under any
confidentiality letter signed prior to the date hereof or any other written
arrangements concerning the confidentiality of information provided by any
Borrower or Guarantor to Agent or any Lender.
13.6. Successors. This Agreement, the other Financing Agreements and
any other document referred to herein or therein shall be binding upon and inure
to the benefit of and be enforceable by Agent, Lenders, Borrowers, Guarantors
and their respective successors and assigns, except that Borrowers may not
assign their rights under this Agreement, the other Financing Agreements and any
other document referred to herein or therein without the prior written consent
of Agent and Lenders, except as otherwise provided herein. Any such purported
assignment without such express prior written consent shall be void. No Lender
may assign its rights and obligations under this Agreement without the prior
written consent of Agent, except as provided in Section 13.7 below. The terms
and provisions of this Agreement and the other Financing Agreements are for the
purpose of defining the relative rights and obligations of Borrowers,
Guarantors, Agent and Lenders with respect to the transactions contemplated
hereby and there shall be no third party beneficiaries of any of the terms and
provisions of this Agreement or any of the other Financing Agreements.
13.7. Assignments; Participations.
(a) Each Lender may, with the prior written consent of Agent,
assign all or, if less than all, a portion equal to at least $5,000,000 in the
aggregate for the assigning Lender (except that such minimum amount shall not
apply to an assignment by a Lender to an Affiliate of such Lender or a Related
Fund, of such Lender's rights and obligations under this Agreement to one or
more Eligible Transferees (but not including for this purpose any assignments in
the form of a participation), each of which assignees shall become a party to
this Agreement as a Lender by execution of an Assignment and Acceptance;
provided, that, (i) such
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transfer or assignment will not be effective until recorded by Agent on the
Register and (ii) Agent shall have received for its sole account payment of a
processing fee from the assigning Lender or the assignee in the amount of $5,000
(except that the payment of such fee shall not be required in connection with an
assignment to an Affiliate of such Lender [or an Approved Fund]).
(b) Agent (acting for this purpose as agent for the Borrowers
but without any liability to Borrowers or Guarantors) shall maintain a register
of the names and addresses of Lenders, their Commitments and the principal
amount of their Loans and the other Obligations (the "Register"); provided, that
in the case of an assignment or delegation covered by Section 13.7(a) hereof,
which is not reflected in the Register, each such assigning Lender (acting for
this purpose as an agent of Borrowers but without any liability to Borrowers or
Guarantors) shall maintain a comparable register (the "Lender Register") and
each such assigning Lender shall collect from each such assignee certificates
and statements described in Section 6.11 (and updated as required by Section
6.11) hereof as if such assignee were a Lender under Section 6.11 hereof. Agent
shall also maintain a copy of each Assignment and Acceptance delivered to and
accepted by it and shall modify the Register to give effect to each Assignment
and Acceptance. The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and any Borrowers, Obligors, Agent and
Lenders may treat each Person whose name is recorded in the Register and the
Lender Register as a Lender hereunder for all purposes of this Agreement. The
Register and the Lender Register shall be available for inspection by
Administrative Borrower Representative and any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(c) Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each Assignment and Acceptance,
the assignee thereunder shall be a party hereto and to the other Financing
Agreements and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and thereunder and the assigning Lender shall,
to the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement.
(d) By execution and delivery of an Assignment and Acceptance,
the assignor and assignee thereunder confirm to and agree with each other and
the other parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
any of the other Financing Agreements or the execution, legality,
enforceability, genuineness, sufficiency or value of this Agreement or any of
the other Financing Agreements furnished pursuant hereto, (ii) the assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any Borrower, Obligor or any of their
Subsidiaries or the performance or observance by any Borrower or Obligor of any
of the Obligations; (iii) such assignee confirms that it has received a copy of
this Agreement and the other Financing Agreements, together with such other
documents and information it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and
104
Acceptance, (iv) such assignee will, independently and without reliance upon the
assigning Lender, Agent and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Financing
Agreements, (v) such assignee appoints and authorizes Agent to take such action
as agent on its behalf and to exercise such powers under this Agreement and the
other Financing Agreements as are delegated to Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto, and
(vi) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement and the other
Financing Agreements are required to be performed by it as a Lender. Agent and
Lenders may furnish any information concerning any Borrower or Obligor in the
possession of Agent or any Lender from time to time to assignees and
Participants.
(e) Each Lender may sell participations to one or more banks
or other entities in or to all or a portion of its rights and obligations under
this Agreement and the other Financing Agreements (including, without
limitation, all or a portion of the Loan owing to it, without the consent of
Agent or the other Lenders); provided, that, (i) such Lender's obligations under
this Agreement and the other Financing Agreements shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, and Borrowers, Guarantors, the other Lenders
and Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
the other Financing Agreements, and (iii) the Participant shall not have any
rights under this Agreement or any of the other Financing Agreements (the
Participant's rights against such Lender in respect of such participation to be
those set forth in the agreement executed by such Lender in favor of the
Participant relating thereto) and all amounts payable by any Borrower or Obligor
hereunder shall be determined as if such Lender had not sold such participation.
Borrowers and Guarantors agree that each Participant shall be entitled to the
benefits of Sections 6.4 and 6.11 to the same extent as if it were a Lender and
had acquired an interest by assignment pursuant to paragraph (a) of this Section
13.7. A Participant shall not be entitled to receive any greater payment under
Sections 6.4 and 6.11 than the applicable Lender (or Transferee) would have been
entitled to receive with respect to the participation sold to such Participant.
In order to be eligible for the benefits under Sections 6.4 and 6.11, such
Participant must comply with Section 6.11(d) or (g), whichever is applicable, as
though it were a Lender.
(f) In the event that a Lender sells participations in a
Registered Loan, such Lender, on behalf of Borrower, shall maintain a register
on which it enters the name of all participants in the Registered Loan held by
it (the "Participant Register"). A Registered Loan (and the Registered Note, if
any, evidencing the same) may be participated in whole or in part only by
registration of such participation on the Participant Register (and each
Registered Note shall expressly so provide). Any participation of such
Registered Loan (and the Registered Note, if any, evidencing the same) may be
effected only by the registration of such participation on the Participant
Register.
(g) Nothing in this Agreement shall prevent or prohibit any
Lender from pledging its Loan hereunder to a Federal Reserve Bank in support of
borrowings made by such Lenders from such Federal Reserve Bank; provided, that,
no such pledge shall release such
105
Lender from any of its obligations hereunder or substitute any such pledgee for
such Lender as a party hereto.
(h) Borrowers and Guarantors shall assist Agent or any Lender
permitted to sell assignments or participations under this Section 13.7 in
whatever manner reasonably necessary in order to enable or effect any such
assignment or participation, including (but not limited to) the execution and
delivery of any and all agreements, notes and other documents and instruments as
shall be requested and the delivery of informational materials, appraisals or
other documents for, and the participation of relevant management in meetings
and conference calls with, potential Lenders or Participants. Borrowers shall
certify the correctness, completeness and accuracy, in all material respects, of
all descriptions of Borrowers and Guarantors and their affairs provided,
prepared or reviewed by any Borrower or Guarantor that are contained in any
selling materials and all other information provided by it and included in such
materials.
13.8. Entire Agreement. This Agreement, the other Financing Agreements,
any supplements hereto or thereto, and any instruments or documents delivered or
to be delivered in connection herewith or therewith represents the entire
agreement and understanding concerning the subject matter hereof and thereof
between the parties hereto, and supersede all other prior agreements,
understandings, negotiations and discussions, representations, warranties,
commitments, proposals, offers and contracts concerning the subject matter
hereof, whether oral or written. In the event of any inconsistency between the
terms of this Agreement and any schedule or exhibit hereto, the terms of this
Agreement shall govern.
13.9. USA Patriot Act. Each Lender hereby notifies Borrowers that
pursuant to the requirements of the USA Patriot Act, it is required (or if not
so required, it may elect in its discretion) to obtain, verify and record
information that identifies Borrower, which information includes the name and
address of Borrowers and other information that will allow such Lender to
identify Borrower in accordance with the requirements of such Act and any other
applicable law.
13.10. Counterparts, Etc. This Agreement or any of the other Financing
Agreements may be executed in any number of counterparts, each of which shall be
an original, but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Agreement or any of the
other Financing Agreements by telefacsimile shall have the same force and effect
as the delivery of an original executed counterpart of this Agreement or any of
such other Financing Agreements. Any party delivering an executed counterpart of
any such agreement by telefacsimile shall also deliver an original executed
counterpart, but the failure to do so shall not affect the validity,
enforceability or binding effect of such agreement.
[SIGNATURE PAGES FOLLOW]
106
IN WITNESS WHEREOF, Agent, Lenders, Borrowers and Guarantors have
caused these presents to be duly executed as of the day and year first above
written.
BORROWERS
INTERNATIONAL WIRE ROME
OPERATIONS, INC.
By: /s/ XXXXXX X. XXXXXXXX
--------------------------------------
Title: Chief Executive Officer
-----------------------------------
OMEGA WIRE, INC.
By: /s/ XXXXXX X. XXXXXXXX
--------------------------------------
Title: Chief Executive Officer
-----------------------------------
OWI CORPORATION
By: /s/ XXXXXX X. XXXXXXXX
--------------------------------------
Title: Chief Executive Officer
-----------------------------------
CAMDEN WIRE CO., INC.
By: /s/ XXXXXX X. XXXXXXXX
--------------------------------------
Title: Chief Executive Officer
-----------------------------------
IWG RESOURCES, LLC
By: /s/ XXXXXX X. XXXXXXXX
--------------------------------------
Title: Chief Executive Officer
-----------------------------------
WIRE TECHNOLOGIES, INC.
By: /s/ XXXXXX X. XXXXXXXX
--------------------------------------
Title: Chief Executive Officer
-----------------------------------
[SIGNATURE PAGE TO
LOAN AND SECURITY AGREEMENT]
GUARANTOR
INTERNATIONAL WIRE GROUP, INC.
By: /s/ XXXXXX X. XXXXXXXX
--------------------------------------
Title: Chief Executive Officer
-----------------------------------
AGENT:
SILVER POINT FINANCE, LLC, as Agent
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------------
Title: Chief Financial Officer
-----------------------------------
LENDER
SILVER POINT FINANCE, LLC,
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------------
Title: Chief Financial Officer
-----------------------------------
Commitment: $6,000,000
LENDER
SEA PINES FUNDING L.L.C
By: /s/ XXX X. XXXXXX
--------------------------------------
Title: Asst. Vice President
-----------------------------------
Commitment: $14,640,000
LENDER
TRS THEBE LLC
By: /s/ XXXXX X. XXXXXX
--------------------------------------
Title: Vice President
-----------------------------------
Commitment: $9,360,000
EXHIBIT A
TO
LOAN AND SECURITY AGREEMENT
ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
Acceptance") dated as of _____________, 200_ is made between
________________________ (the "Assignor") and ____________________ (the
"Assignee").
W I T N E S S E T H:
WHEREAS, Silver Point Finance, LLC, in its capacity as agent pursuant
to the Loan Agreement (as hereinafter defined) acting for and on behalf of the
financial institutions which are parties thereto as lenders (in such capacity,
"Agent"), and the financial institutions which are parties to the Loan Agreement
as lenders (individually, each a "Lender" and collectively, "Lenders") have
entered or are about to enter into financing arrangements pursuant to which
Agent and Lenders may make loans and advances and provide other financial
accommodations to Omega Wire, Inc., International Wire Rome Operations, Inc.,
OWI Corporation, Camden Wire Co., Inc., IWG Resources, LLC and Wire
Technologies, Inc. (collectively, "Borrowers") as set forth in the
Loan and
Security Agreement, dated October 20, 2004, by and among Borrowers, certain of
their affiliates, Agent and Lenders (as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced, the
"Loan Agreement"; capitalized terms used but not otherwise defined herein shall
have the meanings assigned to them in the Loan Agreement), and the other
agreements, documents and instruments referred to therein or at any time
executed and/or delivered in connection therewith or related thereto (all of the
foregoing, together with the Loan Agreement, as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, being collectively referred to herein as the "Financing Agreements");
WHEREAS, as provided under the Loan Agreement, Assignor has made a Loan
(the "Committed Loan") to Borrowers in an aggregate amount not to exceed
$___________ (the "Loan Amount");
WHEREAS, Assignor wishes to assign to Assignee [part of the] [all]
rights and obligations of Assignor under the Loan Agreement in respect of its
Committed Loan in an amount equal to $______________ (the "Committed Loan
Amount") on the terms and subject to the conditions set forth herein and
Assignee wishes to accept assignment of such rights and to assume such
obligations from Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
A-1
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, Assignor hereby sells, transfers and assigns to Assignee, and
Assignee hereby purchases, assumes and undertakes from Assignor, without
recourse and without representation or warranty (except as provided in this
Assignment and Acceptance) an interest in (i) the Committed Loan of Assignor and
(ii) all related rights, benefits, obligations, liabilities and indemnities of
the Assignor (in its capacity as Lender) under and in connection with the Loan
Agreement and the other Financing Agreements, so that after giving effect
thereto, the Committed Loan of Assignee shall be as set forth below and the Pro
Rata Share of Assignee shall be _______ (__%) percent.
(b) With effect on and after the Effective Date (as defined in
Section 5 hereof), Assignee shall be a party to the Loan Agreement and succeed
to all of the rights and be obligated to perform all of the obligations of a
Lender under the Loan Agreement, including the requirements concerning
confidentiality and the payment of indemnification. Assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of the Loan Agreement are required to be performed by it as a Lender. It is the
intent of the parties hereto that the Committed Loan of Assignor shall, as of
the Effective Date, be reduced by an amount equal to the Assigned Committed Loan
and Assignor shall relinquish its rights and be released from its obligations
under the Loan Agreement to the extent such obligations have been assumed by
Assignee; provided, that, Assignor shall not relinquish its rights under
Sections 6.4, 6.8, 11.5 and 12.5 of the Loan Agreement to the extent such rights
relate to the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set
forth herein, on the Effective Date Assignee's Committed Loan will be
$_____________.
(d) After giving effect to the assignment and assumption set
forth herein, on the Effective Date Assignor's Committed Loan will be
$______________ (as such amount may be further reduced by any other assignments
by Assignor on or after the date hereof).
2. Payments.
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, Assignee shall pay to Assignor on the
Effective Date in immediately available funds an amount equal to $____________,
representing Assignee's Pro Rata Share of the principal amount of the Committed
Loan.
(b) Assignee shall pay to Agent the processing fee in the
amount specified in Section 13.7(a) of the Loan Agreement.
3. Reallocation of Payments. Any interest, fees and other payments
accrued to the Effective Date with respect to the Committed Loan shall be for
the account of Assignor. Any interest, fees and other payments accrued on and
after the Effective Date with respect to the Assigned Committed Loan shall be
for the account of Assignee. Each of Assignor and Assignee agrees that it will
hold in trust for the other party any interest, fees and other amounts which it
A-2
may receive to which the other party is entitled pursuant to the preceding
sentence and pay to the other party any such amounts which it may receive
promptly upon receipt.
4. Independent Credit Decision. Assignee acknowledges that it has
received a copy of the Loan Agreement and the Schedules and Exhibits thereto,
together with copies of the most recent financial statements of International
Wire Group, Inc. and its Subsidiaries, and such other documents and information
as it has deemed appropriate to make its own credit and legal analysis and
decision to enter into this Assignment and Acceptance and agrees that it will,
independently and without reliance upon Assignor, Agent or any Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit and legal decisions in taking or not taking
action under the Loan Agreement.
5. Effective Date; Notices.
(a) As between Assignor and Assignee, the effective date for
this Assignment and Acceptance shall be _______________, 200_ (the "Effective
Date"); provided, that, the following conditions precedent have been satisfied
on or before the Effective Date:
(i) this Assignment and Acceptance shall be executed
and delivered by Assignor and Assignee;
(ii) the consent of Agent [and Borrowers] [IF
REQUIRED BY DEFINITION OF ELIGIBLE TRANSFEREE] as required for an effective
assignment of the Assigned Committed Loan by Assignor to Assignee shall have
been duly obtained and shall be in full force and effect as of the Effective
Date;
(iii) written notice of such assignment, together
with payment instructions, addresses and related information with respect to
Assignee, shall have been given to Administrative Borrower Representative and
Agent;
(iv) nee shall pay to Assignor all amounts due to
Assignor under this Assignment and Acceptance; and
(v) processing fee referred to in Section 2(b) hereof
shall have been paid to Agent.
(b) promptly following the execution of this Assignment and
Acceptance, Assignor shall deliver to Administrative Borrower Representative and
Agent for acknowledgment by Agent, a Notice of Assignment in the form attached
hereto as Schedule 1.
6. Agent. [INCLUDE ONLY IF ASSIGNOR IS AN AGENT]
(a) Assignee hereby appoints and authorizes Assignor in its
capacity as Agent to take such action as agent on its behalf to exercise such
powers under the Loan Agreement as are delegated to Agent by Lenders pursuant to
the terms of the Loan Agreement.
A-3
(b) Assignee shall assume no duties or obligations held by
Assignor in its capacity as Agent under the Loan Agreement.]
7. Withholding Tax. Assignee (a) represents and warrants to Assignor,
Agent and Borrowers that under applicable law and treaties no amount of tax will
be required to be withheld by Assignor, Agent or Borrowers with respect to any
payments to be made to Assignee hereunder or under any of the Financing
Agreements which is greater than the amount of tax which would be required to be
withheld by such persons if payment were made to Assignor, (b) agrees to furnish
(if it is organized under the laws of any jurisdiction other than the United
States or any State thereof) to Agent and Administrative Borrower prior to the
time that Agent or Borrowers are required to make any payment of principal,
interest or fees hereunder, duplicate properly completed and duly executed
originals of either U.S. Internal Revenue Service Form X-0XXX, X-0XXX or W-8IMY,
as applicable (wherein Assignee claims entitlement to a complete exemption from
U.S. federal income withholding tax on all payments hereunder) and agrees to
provide such new forms upon the expiration, obsolescence or invalidity of any
previously delivered form or comparable statements in accordance with applicable
U.S. law and regulations and amendments thereto, duly executed and completed by
Assignee in accordance with the requirements of the Loan Agreement, and (c)
agrees to comply with all applicable U.S. laws and regulations with regard to
such withholding tax exemption.
8. Representations and Warranties.
(a) Assignor represents and warrants that (i) it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any security interest, lien, encumbrance or
other adverse claim, (ii) it is duly organized and existing and it has the full
power and authority to take, and has taken, all action necessary to execute and
deliver this Assignment and Acceptance and any other documents required or
permitted to be executed or delivered by it in connection with this Assignment
and Acceptance and to fulfill its obligations hereunder, (iii) no notices to, or
consents, authorizations or approvals of, any Person are required (other than
any already given or obtained) for its due execution, delivery and performance
of this Assignment and Acceptance, and apart from any agreements or undertakings
or filings required by the Loan Agreement, no further action by, or notice to,
or filing with, any Person is required of it for such execution, delivery or
performance, and (iv) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of
Assignor, enforceable against Assignor in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles.
(b) Assignor makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or any of the other Financing
Agreements or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Agreement or any other instrument or document
furnished pursuant thereto. Assignor makes no representation or warranty in
connection with, and assumes no responsibility with respect to, the solvency,
financial condition or statements of Borrowers, Guarantors or any of their
respective Affiliates,
A-4
or the performance or observance by Borrowers, Guarantors or any other Person,
of any of its respective obligations under the Loan Agreement or any other
instrument or document furnished in connection therewith.
(c) Assignee represents and warrants that(i)it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance, and to
fulfill its obligations hereunder; (ii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than any already
given or obtained) for its due execution, delivery and performance of this
Assignment and Acceptance, and apart from any agreements or undertakings or
filings required by the Loan Agreement, no further action by, or notice to, or
filing with, any Person is required of it for such execution, delivery or
performance; and (iii) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of
Assignee, enforceable against Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights to general equitable principles.
9. Term Loan Intercreditor Agreement; New Notes Intercreditor
Agreement. Assignee acknowledges and agrees that it has received a copy of each
of the Term Loan Intercreditor Agreement and the New Notes Intercreditor
Agreement (collectively, the "Intercreditor Agreement") and that it shall be
bound by the terms hereof as a Term Loan Lender as such term is defined in each
Intercreditor Agreement (including without limitation, the obligations of Term
Loan Lenders under Section 3 of the Term Loan Intercreditor Agreement with
respect to the purchase option in favor of Term Loan Agent on behalf of Term
Loan Lenders) and Assignee shall be deemed to make all representations and
warranties made by a Term Loan Lender in each Intercreditor Agreement. Without
limiting any other rights or authorization of Agent, Assignee hereby
specifically authorizes Term Loan Agent to take such actions as are provided for
to be taken by it under the terms of each Intercreditor Agreement on behalf of
Assignee as a Term Loan Lender.
10. Further Assurances. Assignor and Assignee each hereby agree to
execute and deliver such other instruments, and take such other action, as
either party may reasonably request in connection with the transactions
contemplated by this Assignment and Acceptance, including the delivery of any
notices or other documents or instruments to Borrowers or Agent, which may be
required in connection with the assignment and assumption contemplated hereby.
11. Miscellaneous
(a) Any amendment or waiver of any provision of this
Assignment and Acceptance shall be in writing and signed by the parties hereto.
No failure or delay by either party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof and any waiver of any
breach of the provisions of this Assignment and Acceptance shall be without
prejudice to any rights with respect to any other for further breach thereof.
A-5
(b) All payments made hereunder shall be made without any
set-off or counterclaim.
(c) Assignor and Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution and
performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any
number of counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument. Delivery of an executed
counterpart of this Assignment and Acceptance by facsimile shall be equally
effective as delivery of a manually executed counterpart of this Assignment and
Acceptance.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Assignor and
Assignee each irrevocably submits to the non-exclusive jurisdiction of any State
or Federal court sitting in New York County, New York over any suit, action or
proceeding arising out of or relating to this Assignment and Acceptance and
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such New York State or Federal court. Each party to
this Assignment and Acceptance hereby irrevocably waives, to the fullest extent
it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding.
(f) ASSIGNOR AND ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH
THIS ASSIGNMENT AND ACCEPTANCE, THE LOAN AGREEMENT, ANY OF THE OTHER FINANCING
AGREEMENTS OR ANY RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, OR STATEMENTS (WHETHER ORAL OR WRITTEN).
A-6
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment
and Acceptance to be executed and delivered by their duly authorized officers as
of the date first above written.
[ASSIGNOR]
By:
-----------------------------------------
Title:
--------------------------------------
[ASSIGNEE]
By:
-----------------------------------------
Title:
--------------------------------------
[BORROWERS] [IF REQUIRED BY DEFINITION OF
ELIGIBLE TRANSFEREE]
By:
-----------------------------------------
Title:
--------------------------------------
A-7
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
___, 2004
Attn.:
------------------------------
Re: International Wire Group, Inc. and Subsidiaries
Ladies and Gentlemen:
Silver Point Finance, LLC, in its capacity as agent pursuant to the
Loan Agreement (as hereinafter defined) acting for and on behalf of the
financial institutions which are parties thereto as lenders (in such capacity,
"Agent"), and the financial institutions which are parties to the Loan Agreement
as lenders (individually, each a "Lender" and collectively, "Lenders") have
entered or are about to enter into financing arrangements pursuant to which
Agent and Lenders may make loans and advances and provide other financial
accommodations to Omega Wire, Inc., International Wire Rome Operations, Inc.,
OWI Corporation, Camden Wire Co., Inc., IWG Resources, LLC and Wire
Technologies, Inc. (collectively, "Borrowers") as set forth in the
Loan and
Security Agreement, dated October 20, 2004, by and among Borrowers, certain of
their affiliates, Agent and Lenders (as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced, the
"Loan Agreement"), and the other agreements, documents and instruments referred
to therein or at any time executed and/or delivered in connection therewith or
related thereto (all of the foregoing, together with the Loan Agreement, as the
same now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced, being collectively referred to herein as the
"Financing Agreements"). Capitalized terms not otherwise defined herein shall
have the respective meanings ascribed thereto in the Loan Agreement.
1. We hereby give you notice of, and request your consent to, the
assignment by __________________________ (the "Assignor") to
___________________________ (the "Assignee") such that after giving effect to
the assignment Assignee shall have an interest equal to ________ (__%) percent
of the total Loan pursuant to the Assignment and Acceptance Agreement attached
hereto (the "Assignment and Acceptance"). We understand that the Assignor's
portion of the Loan shall be reduced by $_____________, as the same may be
further reduced by other assignments on or after the date hereof.
2. Assignee agrees that, upon receiving the consent of Agent to such
assignment, Assignee will be bound by the terms of the Loan Agreement as fully
and to the same extent as if the Assignee were the Lender originally holding
such interest under the Loan Agreement.
A-1
3. The following administrative details apply to Assignee:
(A) Notice address:
Assignee name:__________________________________________
Address:________________________________________________
Attention:______________________________________________
Telephone:______________________________________________
Telecopier:_____________________________________________
(B) Payment instructions: Account
No.:____________________________________________________
At:_____________________________________________________
Reference:______________________________________________
Attention:______________________________________________
4. You are entitled to rely upon the representations, warranties and
covenants of each of Assignor and Assignee contained in the Assignment and
Acceptance.
A-2
IN WITNESS WHEREOF, Assignor and Assignee have caused this Notice of
Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:
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Title:
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[NAME OF ASSIGNEE]
By:
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Title:
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ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
SILVER POINT FINANCE, LLC
as Agent
By:
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Title:
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EXHIBIT B
TO
LOAN AND SECURITY AGREEMENT
Compliance Certificate
To: Silver Point Finance, LLC
as Agent
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
The undersigned hereby certifies to you in [his/her] capacity as an
officer of International Wire Group, Inc., and not individually, pursuant to
Section 9.6 of the Loan Agreement (as defined below) as follows:
1. I am the duly elected Chief Financial Officer of International Wire
Group, Inc., a Delaware corporation ("Parent"). Capitalized terms used herein
without definition shall have the meanings given to such terms in the Loan and
Security Agreement, dated October 20, 2004, by and among Silver Point Finance,
LLC as agent for the financial institutions party thereto as lenders (in such
capacity, "Agent") and the financial institutions party thereto as lenders
(collectively, "Lenders"), Borrowers, Parent and certain of their affiliates (as
such Loan and Security Agreement is amended, modified or supplemented, from time
to time, the "Loan Agreement").
2. I have reviewed the terms of the Loan Agreement, and have made, or
have caused to be made under my supervision, a review in reasonable detail of
the transactions and the financial condition of Borrowers and Guarantors, during
the immediately preceding fiscal month.
3. The review described in Section 2 above did not disclose the
existence during or at the end of such fiscal month, and I have no actual
knowledge of the existence and continuance on the date hereof, of any condition
or event which constitutes a Default or an Event of Default, except as set forth
on Schedule I attached hereto. Described on Schedule I attached hereto are the
exceptions, if any, to this Section 3 listing, in detail, the nature of the
condition or event, the period during which it has existed and the action which
any Borrower or Guarantor has taken, is taking, or proposes to take with respect
to such condition or event.
4. I further certify that, based on the review described in Section 2
above, no Borrower or Guarantor has at any time during or at the end of such
fiscal month, except as specifically described on Schedule II attached hereto or
as permitted by the Loan Agreement, done any of the following:
(a) Changed its respective corporate name, or transacted
business under any trade name, style, or fictitious
name, other than those previously described to you
and set forth in the Financing Agreements.
B-1
(b) Changed the location of its chief executive office,
changed its jurisdiction of incorporation, changed
its type of organization or changed the location of
or disposed of any of its properties or assets (other
than pursuant to the sale of Inventory in the
ordinary course of its business or as otherwise
permitted by Section 9.7 of the Loan Agreement), or
established any new asset locations.
(c) Permitted or suffered to exist any security interest
in or liens on any of its properties, whether real or
personal, other than as specifically permitted in the
Financing Agreements.
(d) Received any notice or obtained knowledge of any of
the following not previously disclosed to Agent which
could be expected to result in any Borrower or
Guarantor incurring material liability (as described
in Section 9.3(b)) arising from: (i) the occurrence
of any event involving the release, spill or
discharge of any Hazardous Material in violation of
applicable Environmental Law, or (ii) any
investigation, proceeding, complaint, order,
directive, claims, citation or notice with respect
to: (A) any non-compliance with or violation of any
applicable Environmental Law by any Borrower or
Guarantor, or (B) the release, spill or discharge of
any Hazardous Material in violation of applicable
Environmental Law, or (C) the generation, use,
storage, treatment, transportation, manufacture,
handling, production or disposal of any Hazardous
Materials in violation of applicable Environmental
Laws, or (D) any other environmental, health or
safety matter, which has a material adverse effect on
any Borrower or Guarantor or its business, operations
or assets or any properties at which such Borrower or
Guarantor transported, stored or disposed of any
Hazardous Materials.
(e) Become aware of, obtained knowledge of, or received
notification of, any breach or violation of any
material covenant contained in any instrument or
agreement in respect of Indebtedness for money
borrowed by any Borrower or Guarantor.
5. Attached hereto as Schedule III are the calculations used in
determining, as of the end of such fiscal month whether (a) a Covenant
Compliance Trigger has occurred and (b) if a Covenant Compliance Trigger has
occurred, Borrowers and Guarantors are in compliance with the covenants set
forth in Section 9.17 of the Loan Agreement for such fiscal month.
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The foregoing certifications are made and delivered this day of
___________, 200_.
Very truly yours,
INTERNATIONAL WIRE GROUP, INC.
By:
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Title:
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SCHEDULE 9.17
TO
LOAN AND SECURITY AGREEMENT
