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EXHIBIT 2.1
EXECUTION COPY
FINANCING AGREEMENT
Dated as of August 30, 2000
by and among
CORAM HEALTHCARE CORPORATION,
as debtor and debtor-in-possession,
CORAM, INC.,
as debtor and debtor-in-possession,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO
and
MADELEINE L.L.C.,
as Agent
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS; CERTAIN TERMS........................................................1
SECTION 1.01. Definitions...................................................................1
SECTION 1.02. Terms Generally..............................................................18
SECTION 1.03. Accounting and Other Terms...................................................19
SECTION 1.04. Time References..............................................................19
ARTICLE II THE REVOLVING LOANS..............................................................19
SECTION 2.01. Revolving Credit Commitments.................................................19
SECTION 2.02. Making the Loans.............................................................20
SECTION 2.03. Revolving Credit Notes; Repayment of Revolving Loans.........................22
SECTION 2.04. Interest.....................................................................23
(a) Interest Rate...........................................................23
(b) Default Interest........................................................23
(c) Interest Payment........................................................23
(d) General.................................................................23
SECTION 2.05. Reduction of Revolving Credit Commitments; Prepayment of Revolving Loans.....23
(a) Reduction of Revolving Credit Commitments...............................23
(b) Optional Prepayment.....................................................24
(c) Mandatory Prepayment....................................................24
(d) Cumulative Prepayments..................................................24
SECTION 2.06. Fees.........................................................................24
(a) Closing Fee.............................................................24
(b) Unused Line Fee.........................................................24
(c) Audit and Collateral Monitoring Fees....................................25
SECTION 2.07. Taxes........................................................................25
ARTICLE III SECURITY AND ADMINISTRATIVE PRIORITY.............................................27
SECTION 3.01. Collateral; Grant of Lien....................................................27
SECTION 3.02. Administrative Priority......................................................27
SECTION 3.03. Grants, Rights and Remedies..................................................27
SECTION 3.04. No Filings Required..........................................................28
SECTION 3.05. Survival.....................................................................28
ARTICLE IV PAYMENTS AND OTHER COMPENSATION..................................................28
SECTION 4.01. Payments; Computations and Statements........................................28
SECTION 4.02. Sharing of Payments, Etc.....................................................29
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SECTION 4.03. Apportionment of Payments....................................................30
SECTION 4.04. Increased Costs and Reduced Return...........................................30
ARTICLE V CONDITIONS TO EFFECTIVENESS AND EXTENSIONS OF CREDIT.............................32
SECTION 5.01. Conditions Precedent to Effectiveness........................................32
(a) Interim Bankruptcy Order................................................32
(b) Payment of Fees, Etc....................................................32
(c) Representations and Warranties; No Event of Default.....................32
(d) Material Adverse Change.................................................32
(e) Pleadings...............................................................32
(f) Business Plan...........................................................32
SECTION 5.02. Conditions Precedent to all Revolving Loans..................................32
(a) Payment of Fees, Etc....................................................32
(b) Representations and Warranties; No Event of Default.....................33
(c) Bankruptcy Court Order..................................................33
(d) Final Bankruptcy Court Order............................................33
(e) Legality................................................................33
(f) Notices.................................................................33
(g) Delivery of Documents...................................................33
(h) Proceedings; Receipt of Documents.......................................35
ARTICLE VI REPRESENTATIONS AND WARRANTIES...................................................36
SECTION 6.01. Representations and Warranties...............................................36
(a) Organization, Good Standing, Etc........................................36
(b) Authorization, Etc......................................................36
(c) Governmental Approvals..................................................36
(d) Execution and Binding Effect............................................36
(e) Subsidiaries............................................................37
(f) Litigation..............................................................37
(g) Financial Condition.....................................................37
(h) Compliance with Law, Etc................................................37
(i) ERISA...................................................................37
(j) Taxes, Etc..............................................................38
(k) Federal Reserve Regulations.............................................38
(l) Joint Ventures..........................................................38
(m) Adverse Agreements, Etc.................................................38
(n) Permits, Etc............................................................38
(o) Properties..............................................................39
(p) Full Disclosure.........................................................39
(q) Environmental Matters...................................................39
(r) Insurance...............................................................39
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(s) Use of Proceeds.........................................................40
(t) Location of Bank Accounts...............................................40
(u) Intellectual Property...................................................40
(v) Holding Company and Investment Company Acts.............................40
(w) Employee and Labor Matters..............................................40
(x) Place of Business; Chief Executive Office; Etc..........................41
(y) Administrative Priority; Lien Priority..................................41
ARTICLE VII COVENANTS........................................................................41
SECTION 7.01. Affirmative Covenants........................................................41
(a) Reporting Requirements..................................................41
(b) Additional Guaranties and Collateral Security...........................45
(c) Compliance with Laws, Etc...............................................45
(d) Preservation of Existence, Etc..........................................45
(e) Keeping of Records and Books of Account.................................45
(f) Inspection Rights.......................................................46
(g) Maintenance of Properties, Etc..........................................46
(h) Maintenance of Insurance................................................46
(i) Obtaining of Permits, Etc...............................................47
(j) Environmental...........................................................47
(k) Further Assurances......................................................47
(l) Collateral Records......................................................48
(m) Borrowing Base..........................................................48
SECTION 7.02. Negative Covenants...........................................................48
(a) Interim Bankruptcy Court Order; Final Bankruptcy Court
Order; Administrative Priority; Lien Priority; Payment of
Claims................................................................48
(b) Liens, Etc..............................................................49
(c) Indebtedness............................................................49
(d) Fundamental Changes.....................................................49
(e) Change in Nature of Business............................................49
(f) Loans, Advances, Investments, Etc.......................................49
(g) Lease Obligations.......................................................50
(h) Capital Expenditures....................................................50
(i) Restricted Payments.....................................................50
(j) Payments................................................................50
(k) Transactions with Affiliates............................................51
(l) Environmental...........................................................51
(m) Minimum EBITDA..........................................................51
(n) Minimum Eligible Accounts Receivable....................................52
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ARTICLE VIII CASH MANAGEMENT..................................................................52
ARTICLE IX EVENTS OF DEFAULT................................................................53
SECTION 9.01. Events of Default............................................................53
ARTICLE X AGENT............................................................................55
SECTION 10.01. Appointment.................................................................55
SECTION 10.02. Nature of Duties............................................................56
SECTION 10.03. Rights, Exculpation, Etc....................................................56
SECTION 10.04. Reliance....................................................................57
SECTION 10.05. Indemnification.............................................................57
SECTION 10.06. Agent Individually..........................................................58
SECTION 10.07. Successor Agent.............................................................58
SECTION 10.08. Collateral Matters..........................................................58
ARTICLE XI MISCELLANEOUS....................................................................60
SECTION 11.01. Notices, Etc................................................................60
SECTION 11.02. Amendments, Etc.............................................................61
SECTION 11.03. No Waiver; Remedies, Etc....................................................61
SECTION 11.04. Expenses; Taxes; Attorneys' Fees............................................62
SECTION 11.05. Right of Set-off............................................................63
SECTION 11.06. Severability................................................................63
SECTION 11.07. Assignments and Participations..............................................63
SECTION 11.08. Counterparts................................................................66
SECTION 11.09. GOVERNING LAW...............................................................66
SECTION 11.10. WAIVER OF JURY TRIAL, ETC...................................................66
SECTION 11.11. Consent by the Agent and Lenders............................................66
SECTION 11.12. No Party Deemed Drafter.....................................................66
SECTION 11.13. Indemnification.............................................................67
SECTION 11.14. Records.....................................................................67
SECTION 11.15. Binding Effect..............................................................67
SECTION 11.16. Confidentiality.............................................................67
ARTICLE XII GUARANTY.........................................................................68
SECTION 12.01. Guaranty....................................................................68
SECTION 12.02. Parent's Obligations Unconditional..........................................68
SECTION 12.03. Waivers.....................................................................69
SECTION 12.04. No Subrogation..............................................................69
SECTION 12.05. Reinstatement...............................................................69
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SCHEDULES AND EXHIBITS
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Schedule 1.01.......................Lenders and Lenders' Commitments
Schedule 6.01(b)....................Conflicts
Schedule 6.01(e)....................Subsidiaries
Schedule 6.01(f)....................Litigation
Schedule 6.01(g)....................Material Adverse Change
Schedule 6.01(i)....................ERISA
Schedule 6.01(l)....................Joint Ventures
Schedule 6.01(o)....................Real Property
Schedule 6.01(q)....................Environmental Matters
Schedule 6.01(r)....................Insurance
Schedule 6.01(t)....................Bank Accounts
Schedule 6.01(u)....................Intellectual Property
Schedule 6.01(x)....................Place of Business; Chief Executive Office; Location of Property
Schedule 7.02(b)....................Existing Liens
Schedule 7.02(f)....................Existing Investments
Schedule 8.01.......................Depository Banks
Exhibit A...........................Form of Revolving Credit Note
Exhibit B...........................Form of Guaranty
Exhibit C...........................Form of Pledge Agreement
Exhibit D-1.........................Form of Security Agreement
Exhibit D-2.........................Form of Security Agreement - Patents and Trademarks
Exhibit E...........................Form of Notice of Borrowing
Exhibit F...........................Borrowing Base Certificate
Exhibit G...........................Form of Assignment and Acceptance
Exhibit H...........................Form of Supplemental Agreement
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FINANCING AGREEMENT
Financing Agreement, dated as of August 30, 2000, by and among
Coram Healthcare Corporation, as debtor and debtor-in-possession, a Delaware
corporation (the "Parent"), Coram, Inc., as debtor and debtor-in-possession, a
Delaware corporation (the "Borrower", and together with the Parent, individually
a "Company" and collectively, the "Companies"), the financial institutions from
time to time party hereto (individually a "Lender" and collectively, the
"Lenders") and Madeleine L.L.C., a Delaware limited liability company, as agent
for the Lenders (in such capacity, the "Agent").
RECITALS
A. The Companies have commenced cases (the "Chapter 11 Cases")
under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code")
in the United States Bankruptcy Court for the District of Delaware (the
"Bankruptcy Court"), and the Companies have retained possession of their assets
and are authorized under the Bankruptcy Code to continue the operation of their
businesses as debtors-in-possession.
B. The Companies have requested that the Lenders make
post-petition loans and advances to the Borrower in an aggregate principal
amount not to exceed $40,000,000 (which facility shall be limited to $10,000,000
until the Final Bankruptcy Court Order (as hereinafter defined) shall have been
entered by the Bankruptcy Court) at any time outstanding, and, subject to the
terms and conditions set forth herein, the Lenders have agreed to provide such
facility.
C. In consideration of the premises and the covenants and
agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CERTAIN TERMS
SECTION 1.01. Definitions. As used in this Agreement, the
following terms shall have the respective meanings indicated below, such
meanings to be applicable equally to both the singular and plural forms of such
terms:
"Account Debtor" means each debtor, customer or obligor in any
way obligated on or in connection with any Account Receivable.
"Accounts Receivable" means any and all rights of the
Receivables Grantors to payment for goods sold and services rendered, including
accounts, general intangibles and any and all such rights evidenced by chattel
paper, instruments or documents, whether due or to become due and whether or not
earned by performance, and whether now or hereafter acquired or arising in the
future and any proceeds arising therefrom or relating thereto.
"Action" has the meaning specified therefor in Section 11.11.
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"Affiliate" means, as to any Person, any other Person that
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. For purposes of
this definition, "control" of a Person means the power, directly or indirectly,
either to (i) vote 10% or more of the Capital Stock having ordinary voting power
for the election of directors of such Person or (ii) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise. Notwithstanding anything herein to the contrary, in no event shall
the Agent or any Lender be considered an "Affiliate" of any Loan Party.
"Agent" has the meaning specified therefor in the preamble
hereto.
"Agent's Account" means an account at a bank designated by the
Agent from time to time as the account into which the Borrower shall make all
payments to the Agent for the benefit of the Agent and the Lenders under this
Agreement and the other Loan Documents.
"Agent Advances" has the meaning specified therefor in Section
10.08(a).
"Agreed Administrative Expense Priorities" means that
administrative expenses with respect to the Companies and, with respect to
sub-clause (ii) of clause "first", any official committee appointed by the
Bankruptcy Court shall have the following order of priority:
first, (i) amounts payable pursuant to 28 U.S.C.
Section 1930(a)(6) and (ii) allowed fees and expenses of attorneys,
accountants and other professionals retained in the Chapter 11 Cases
pursuant to Sections 327 and 1103 of the Bankruptcy Code ("Priority
Professional Expenses"), but the amount entitled to priority under
sub-clause (ii) of this clause first shall not exceed $1,500,000
outstanding in the aggregate at any time (inclusive of any holdbacks
required by the Bankruptcy Court but exclusive of fees and expenses
paid to such professionals prior to such time) (the "Professional
Expense Cap"); provided, however, that after the occurrence and during
the continuance of an Event of Default or a default by the Borrower in
any of its obligations under the Interim Bankruptcy Court Order or the
Final Bankruptcy Court Order, any payments actually made to such
professionals (other than payments made out of pre-Filing Date
retainers) after such occurrence or during such continuance, under
Sections 330 and 331 of the Bankruptcy Code or otherwise, shall reduce
the Professional Expense Cap on a dollar-for-dollar basis,
second, all Obligations, and
third, all other allowed administrative expenses.
"Agreement" means this Financing Agreement, including all
amendments, modifications and supplements and any exhibits or schedules to any
of the foregoing, and shall refer to the Agreement as the same may be in effect
at the time such reference becomes operative.
"Assignment and Acceptance" means an assignment and acceptance
entered into by an assigning Lender and an assignee, and accepted by the Agent,
in accordance with Section 11.07 and substantially in the form of Exhibit G
hereto.
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"Authorized Officer" means the chief executive officer, the
executive vice president, the senior vice president-finance or treasurer of the
Parent.
"Availability" means, at any time, the difference between (i)
the lesser at such time of (A) the Borrowing Base and (B) the Total Revolving
Credit Commitment and (ii) the aggregate outstanding principal amount of all
Revolving Loans.
"Bank" means The Chase Manhattan Bank, its successors or any
other bank designated by the Agent to the Borrower from time to time.
"Bankruptcy Code" has the meaning specified therefor in the
recitals hereto.
"Bankruptcy Court" has the meaning specified therefor in the
recitals hereto.
"Board" means the Board of Governors of the Federal Reserve
System of the United States.
"Borrower" has the meaning specified therefor in the preamble
hereto.
"Borrowing Base" means, at any time, the sum of (i) 65% of the
product of (A) the Net Amount of Eligible Accounts Receivable at such time and
(B) 95% plus (ii) 100% of cash balances maintained with the Agent which secure
the Obligations but no other obligations minus such reserves as the Agent may
deem appropriate in the exercise of its reasonable business judgment based upon
the lending practices of the Agent.
"Borrowing Base Certificate" means a certificate,
substantially in the form of Exhibit F hereto, signed by an Authorized Officer
and setting forth the calculation of the Borrowing Base in compliance with
Section 7.01(a)(v).
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
to close.
"Business Plan" has the meaning specified therefor in Section
6.01(g).
"Capital Expenditures" means, with respect to any Person for
any period, the sum of (i) the aggregate of all expenditures by such Person and
its Subsidiaries during such period that in accordance with GAAP are or should
be included in "property, plant and equipment" or similar fixed asset account on
its balance sheet, whether such expenditures are paid in cash or financed and
including all Capitalized Lease Obligations paid or payable during such period,
and (ii) to the extent not covered by clause (i) above, the aggregate of all
expenditures by such Person and its Subsidiaries to acquire by purchase or
otherwise the business or fixed assets of, or the Capital Stock of, any other
Person.
"Capital Guideline" means any law, rule, regulation, policy,
guideline or directive (whether or not having the force of law and whether or
not the failure to comply therewith would be unlawful) (i) regarding capital
adequacy, capital ratios, capital requirements, the calculation of a bank's
capital or similar matters, or (ii) affecting the amount of capital required to
be obtained
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or maintained by the Lenders any Person controlling any Lender or the manner in
which the Lenders, any Person controlling any Lender allocate capital to any of
their contingent liabilities (including letters of credit), advances,
acceptances, commitments, assets or liabilities.
"Capitalized Lease" means, with respect to any Person, any
lease of real or personal property by such Person as lessee which is required
under GAAP to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means, with respect to any
Person, obligations of such Person and its Subsidiaries under Capitalized
Leases, and, for purposes hereof, the amount of any such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.
"Carve-Out Expenses" means those amounts, fees, expenses and
claims set forth in clause "first" of the definition of the term "Agreed
Administrative Expense Priorities."
"Cash Concentration Account" means the Blocked Account (as
defined in the Security Agreement) maintained by the Borrower at the Cash
Concentration Account Bank, which deposit account shall be under the sole
dominion and control of the Agent.
"Cash Concentration Account Agreement" means an agreement, in
form and substance reasonably satisfactory to the Agent, among the Cash
Concentration Account Bank, the Borrower and the Agent delivered to the Agent
pursuant to hereto, as such agreement may be modified and supplemented and in
effect from time to time.
"Cash Concentration Account Bank" means Harris Trust & Savings
Bank or such other bank as the Borrower may select with the written approval of
the Agent.
"Change of Control" means each occurrence of any of the
following:
(a) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors of the
Parent (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the Parent was
approved by a vote of at least a majority the directors of the Parent then still
in office who were either directors at the beginning of such period, or whose
election or nomination for election was previously approved) cease for any
reason to constitute a majority of the Board of Directors of the Parent;
(b) the Parent shall cease to have beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act) of 100% of the aggregate voting
power of the Capital Stock of the Borrower and each Guarantor, free and clear of
all Liens; or
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(c) Daniel Crowley or another person reasonably acceptable to
the Agent shall cease to be involved as the chief executive officer of the
Parent in the day to day operations and management of the business of the Loan
Parties.
"Chapter 11 Cases" has the meaning specified therefor in the
recitals hereto.
"Closing Fee" has the meaning specified therefor in Section
2.06(a).
"Collateral" has the meaning specified therefor in Section
3.01(a).
"Consolidated" means, in respect of any Person, as applied to
any financial or accounting term, such term determined on a consolidated basis
in accordance with GAAP (except as otherwise required herein) for such Person
and all consolidated Subsidiaries thereof.
"Contingent Obligation" means, with respect to any Person, any
obligation of such Person guaranteeing any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, (i) the direct or indirect guaranty, endorsement (other than for
collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the obligation
of a primary obligor, (ii) the obligation to make take-or-pay or similar
payments, if required, regardless of nonperformance by any other party or
parties to an agreement, (iii) any obligation of such Person, whether or not
contingent, (A) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (B) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (C) to purchase
property, assets, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (D) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof.
The amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation with respect to
which such Contingent Obligation is made (or, if less, the maximum amount of
such primary obligation for which such Person may be liable pursuant to the
terms of the instrument evidencing such Contingent Obligation) or, if not stated
or determinable, the maximum reasonably anticipated liability with respect
thereto (assuming such Person is required to perform thereunder), as determined
by such Person in good faith.
"Default" means an event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Depository Accounts" means (i) the Lockbox Accounts (as
defined in the Security Agreement) and (ii) each other lock-box or blocked
depository accounts maintained by the Borrower for the collection of the cash of
the Borrower and its Subsidiaries and the proceeds of Accounts Receivable.
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"Depository Account Agreements" means (i) each Lockbox
Agreement (as defined in the Security Agreement) and (ii) each other agreement,
in form and substance satisfactory to the Agent, among a Depository Bank, the
Borrower and the Agent, as such agreement may be modified and supplemented and
in effect from time to time.
"Depository Bank" means each financial institution at which a
Depository Account is maintained, including the Blocked Account Bank (as defined
in the Security Agreement).
"Designated Subsidiary" means, at any time, any Subsidiary of
the Borrower that has assets with a total market value not in excess of $10,000
at such time and either (i) has not conducted any business or other operations
during the 12-month period prior to such time or (ii) has, as a result of a
group restructuring or asset disposition involving one or more Subsidiaries of
the Borrower, in each case permitted by this Agreement, become inactive at such
time and, in the good faith estimation of the Parent, will after such time no
longer conduct any business or other operations. The names of the Designated
Subsidiaries in existence on the date hereof are marked with an asterisk on
Schedule 6.01(e) hereto.
"Disposition" means any transaction, or series of related
transactions, pursuant to which any Loan Party or any of its Subsidiaries sells,
assigns, transfers or otherwise disposes of any property or assets (whether now
owned or hereafter acquired) to any other Person, in each case whether or not
the consideration therefor consists of cash, securities or other assets owned by
the acquiring Person other than (i) sale of inventory in the ordinary course of
business and (ii) sales or other dispositions of obsolete or worn-out equipment
in the ordinary course of business.
"Dollar," "Dollars" and the symbol "$" each means lawful money
of the United States of America.
"EBITDA" means for any period for the Parent and its
Consolidated Subsidiaries on a Consolidated basis (i) the sum of (A) Net Income,
(B) Interest Expense, (C) depreciation and amortization expense, (D) federal,
state and local income tax expense, (E) any extraordinary losses, (F) any
restructuring charges (whether cash or non-cash) in such period in each case of
such person for such period, (G) any expenses associated with the liquidation of
Coram Resource Network, Inc. or Coram Independent Practice Association, Inc.,
(H) any expenses recognized that are directly associated with the reorganization
of the Companies including such items as retention pay, professional fees,
success bonuses, administrative fees, financing fees minus (ii) to the extent
added in computing Net Income, any extraordinary gains, all computed and
calculated in accordance with GAAP.
"Effective Date" has the meaning specified therefor in Section
5.01.
"Eligible Accounts Receivable" means Accounts Receivable
created by the Receivables Grantors in the ordinary course of business arising
out of the sale, lease or rental of goods or rendition of services by the
Receivables Grantors which are and at all times shall
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continue to be acceptable to the Agent in all respects. Standards of eligibility
may be fixed and revised from time to time solely by the Agent in the Agent's
exclusive reasonable judgment; provided, however, that any such revisions shall
be notified to the Borrower in writing at least three Business Days prior to
taking effect. In general, without limiting the foregoing, an Account Receivable
shall in no event be deemed to be an Eligible Account Receivable unless: (a) all
payments due on such Account Receivable have been invoiced and the underlying
goods (if any) shipped or services (if any) performed, as the case may be; (b)
the payment due on such Account Receivable is not more than 120 days past the
invoice date; (c) such Account Receivable arose from a completed and bona fide
transaction (and with respect to a sale of goods, a transaction in which title
has passed to the Account Debtor) which requires no further act under any
circumstances on the part of any Receivables Grantor in order to cause such
Account Receivable to be payable in full by such Account Debtor; (d) such
Account Receivable is in full conformity with the representations and warranties
made by any and all of the Loan Parties to the Agent or the Lenders with respect
thereto and is free and clear of all security interests and Liens of any nature
whatsoever other than any security interest deemed to be held by such
Receivables Grantor or any security interest created pursuant hereto or to the
Security Agreement or permitted by Section 7.02(b); (e) such Account Receivable
constitutes an "account" or "chattel paper" within the meaning of the Uniform
Commercial Code of the state in which such Account Receivable is located; (f)
the Account Debtor has not asserted that such Account Receivable, and the
Borrower is not aware that such Account Receivable, (i) arises out of a bill and
hold (other than primary voucherables), consignment or progress billing
arrangement or (ii) is subject to any setoff, contras, net-out contract, offset,
deduction, dispute, credit, counterclaim or other defense arising out of the
transactions represented by such Account Receivable or independently thereof
(provided that such Account Receivable shall only be ineligible to the extent
thereof); (g) the Account Debtor has finally accepted the goods from the sale
out of which such Account Receivable arose and has not objected to its liability
thereon or returned rejected or repossessed any of such goods, except for goods
returned in the ordinary course of business provided that such Account
Receivable shall only be ineligible with respect to that portion thereof which
has been objected to or which relates to goods returned, rejected or
repossessed; (h) such Account Receivable arose in the ordinary course of
business of such Receivables Grantor; (i) the Account Debtor is not the United
States government or the government of any state or political subdivision
thereof or therein, or any agency or department of any thereof (other than
Accounts Receivable from Medicare, Medicaid, CHAMPUS, prison systems,
universities and the Veterans Administration or unless there has been full
compliance to the satisfaction of the Agent in form and substance satisfactory
to the Agent; (j) such Account Receivable complies with all material
requirements of all applicable laws and regulations, whether federal, state or
local (including, without limitation, usury laws and laws, rules and regulations
relating to truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices a privacy); (k) to the
knowledge of the Borrower, such Account Receivable is in full force and effect
and constitutes valid and binding obligation of the Account Debtor enforceable
in accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium and other similar law affecting
the enforcement of creditors' rights generally; (l) such Account Receivable is
denominated in and provides for payment by the Account Debtor in United States
dollars; (m) such Account Receivable has not been, and is not required to be
charged off or written off as uncollectible in accordance with GAAP or the
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customary business practices of such Receivables Grantor, (n) the Agent on
behalf of the Lender possess a valid, perfected first priority security interest
in such Account Receivable as security for payment of the Obligations; (o) the
Account Receivable is not with respect to a customer located in New Jersey,
Minnesota, or any other state denying creditors accesses to its courts in the
absence of a Notice of Business Activities report or other similar filing,
unless the Borrower has either qualified as a foreign corporation authorized to
transact business in such state or have filed a Notice of Business Activities
report or similar filing with the applicable state agency for the then current
year; and (p) the Agent is satisfied with the credit standing of the Account
Debtor in relation to the amount of credit extended.
"Employee Plan" means an employee benefit plan (other than a
Multiemployer Plan) covered by Title IV of ERISA and maintained (or was
maintained at any time during the six (6) calendar years preceding the date of
any borrowing hereunder) for employees of any Borrower or any of its ERISA
Affiliates.
"Environmental Actions" means any complaint, summons,
citation, notice, directive, order, claim, litigation, investigation, judicial
or administrative proceeding, judgment, letter or other communication from any
Governmental Authority involving violations of Environmental Laws or Releases of
Hazardous Materials (i) from any assets, properties or businesses of any Loan
Party or any of its Subsidiaries or any predecessor in interest; (ii) from
adjoining properties or businesses; or (iii) onto any facilities which received
Hazardous Materials generated by any Loan Party or any of its Subsidiaries or
any predecessor in interest.
"Environmental Laws" means the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Section 9601, et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901, et seq.), the
Federal Clean Water Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42
U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C.
Section 2601 et seq.) and the Occupational Safety and Health Act (29 U.S.C.
Section 651 et seq.), as such laws may be amended or otherwise modified from
time to time, and any other present or future federal, state, local or foreign
statute, ordinance, rule, regulation, order, judgment, decree, permit, license
or other binding determination of any Governmental Authority imposing liability
or establishing standards of conduct for protection of the environment.
"Environmental Liabilities and Costs" means all liabilities,
monetary obligations, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel, experts and consultants
and costs of investigations and feasibility studies), fines, penalties,
sanctions and interest incurred as a result of any claim or demand by any
Governmental Authority or any third party, and which relate to any environmental
condition or a Release of Hazardous Materials from or onto (i) any property
presently or formerly owned by any Loan Party or any of its Subsidiaries or (ii)
any facility which received Hazardous Materials generated by any Loan Party or
any of its Subsidiaries.
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<PAGE> 15
"Environmental Lien" means any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, and regulations
thereunder, in each case as in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.
"ERISA Affiliate" means, with respect to any Person, any trade
or business (whether or not incorporated) which is a member of a group of which
such Person is a member and which would be deemed to be a "controlled group"
within the meaning of Sections 414(b), (c), (m) and (o) of the Code.
"Event of Default" means any of the events set forth in
Section 9.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Lender" means, collectively, the lenders party to
the Credit Agreement, dated as of August 20, 1998, as amended, among the Parent
and certain if its Subsidiaries, such lenders and Foothill Capital Corporation,
as agent.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period of the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for such day on such transactions received by the Agent from
three Federal funds brokers of recognized standing selected by it.
"Filing Date" means the date on which the Chapter 11 Cases
were commenced.
"Final Bankruptcy Court Order" means the order of the
Bankruptcy Court approving the Revolving Loans made and to be made to the
Borrower in accordance with this Agreement, substantially in the form of the
Interim Bankruptcy Court Order, as the same may be amended, modified or
supplemented from time to time with the express written joinder or consent of
the Agent, the Required Lenders and the Borrower.
"Final Maturity Date" means the date which is the earliest of
(i) September 8, 2000, if the Final Bankruptcy Court Order shall not have been
entered by such date, (ii) the date of the substantial consummation (as defined
in Section 1101(2) of the Bankruptcy Code) of a plan of reorganization in the
Chapter 11 Cases that have been confirmed by an order of the Bankruptcy Court,
(iii) August 31, 2001, and (iv) such earlier date on which the Revolving Loans
shall become due and payable in accordance with the terms of this Agreement.
"Fiscal Year" means the fiscal year of the Parent and its
Subsidiaries ending on December 31 of each year.
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"GAAP" means generally accepted accounting principles in
effect from time to time in the United States, applied on a consistent basis.
"Governmental Authority" means any nation or government, any
Federal, state, city, town, municipality, county, local or other political
subdivision thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guaranty" means the guaranty substantially in the form of
Exhibit B hereto, made by the Guarantors in favor of the Agent for the benefit
of the Lenders.
"Guarantors" means (i) each Subsidiary of the Parent listed on
Schedule 6.01(e) hereto except those marked with an asterisk on such schedule,
(ii) each other Person that becomes a Subsidiary of the Parent after the date
hereof and (iii) each other Person that guarantees all or any part of the
Obligations.
"Hazardous Materials" means (i) any element, compound or
chemical that is defined, listed or otherwise classified as a contaminant,
pollutant, toxic pollutant, toxic or hazardous substances, extremely hazardous
substance or chemical, hazardous waste, special waste, or solid waste under
Environmental Laws; (ii) petroleum and its refined products; (iii)
polychlorinated biphenyls; (iv) any substance exhibiting a hazardous waste
characteristic, including but not limited to, corrosivity, ignitability,
toxicity or reactivity as well as any radioactive or explosive materials; and
(v) any raw materials, building components, including but not limited to
asbestos-containing materials and manufactured products containing hazardous
substances.
"Hedging Agreement" means any interest rate, foreign currency,
commodity or equity swap, collar, cap, floor or forward rate agreement, or other
agreement or arrangement designed to protect against fluctuations in interest
rates or currency, commodity or equity values (including, without limitation,
any option with respect to any of the foregoing and any combination of the
foregoing agreements or arrangements), and any confirmation executed in
connection with any such agreement or arrangement.
"Indebtedness" means, without duplication, with respect to any
Person, (i) all indebtedness of such Person for borrowed money; (ii) all
obligations of such Person for the deferred purchase price of property or
services (other than trade payables, payables to vendors or other accounts
payable incurred in the ordinary course of such Person's business and in
accordance with customary trade terms); (iii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments or upon which
interest payments are customarily made; (iv) all obligations and liabilities of
such Person created or arising under any conditional sales or other title
retention agreement with respect to property used and/or acquired by such
Person, even though the rights and remedies of the lessor, seller and/or lender
thereunder are limited to repossession or sale of such property; (v) all
Capitalized Lease Obligations of such Person; (vi) all obligations and
liabilities, contingent or otherwise, of such Person, in respect of letters of
credit, acceptances and similar facilities; (vii) all obligations and
liabilities, calculated on a basis satisfactory to the Agent and in accordance
with accepted practice, of such Person under Hedging Agreements; (viii) all
Contingent
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<PAGE> 17
Obligations of such Person; and (ix) all obligations referred to in clauses (i)
through (viii) of this definition of another Person secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) a Lien upon property owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness.
The Indebtedness of any Person shall include the Indebtedness of any partnership
of or joint venture in which such Person is a general partner or a joint
venturer.
"Indemnified Matters" has the meaning specified therefor in
Section 11.13.
"Indemnitees" has the meaning specified therefor in Section
11.13.
"Initial Revolving Loan" means the first Revolving Loan made
under this Agreement.
"Initial Revolving Loan Date" means the date on which the
Initial Revolving Loan is made.
"Interim Bankruptcy Court Order" means the order of the
Bankruptcy Court dated August 9, 2000, pursuant to which the Bankruptcy Court
authorized the Companies to incur emergency post-petition secured indebtedness
on an interim basis, as the same may be amended, modified or supplemented from
time to time with the express written joinder or consent of the Agent.
"Interest Expense" means, for any period, the interest expense
for the Parent and its Consolidated Subsidiaries on a Consolidated basis during
such period determined in accordance with GAAP, and shall in any event include,
without limitation, (i) the amortization of debt discounts, (ii) the
amortization of all fees payable in connection with the incurrence of
Indebtedness to the extent included in interest expense, (iii) the portion of
any Capitalized Lease Obligation allocable to interest expense, (iv) all fixed
and all calculable dividend payments on preferred stock and (v) payments of
interest expense in kind.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended (or any successor statute thereto) and the regulations
thereunder.
"Joint Venture" means each Person that is not a Subsidiary of
the Parent and in which the Parent, the Borrower or any of their respective
Subsidiaries directly or indirectly holds an equity ownership interest pursuant
to a partnership agreement, LLC operating agreement, joint venture documents or
otherwise.
"Lease" means any lease of real property to which any Loan
Party is a party as lessor or lessee.
"Lender" has the meaning specified therefor in the preamble
hereto.
"Lien" means any mortgage, deed of trust, pledge, lien
(statutory or otherwise), security interest, charge or other encumbrance or
security or preferential arrangement of any nature, including, without
limitation, any conditional sale or title retention arrangement, any Capitalized
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<PAGE> 18
Lease and any assignment, deposit arrangement or financing lease intended as, or
having the effect of, security.
"Loan Account" means an account maintained hereunder by the
Agent on its books of account, at the Payment Office and with respect to the
Borrower, in which the Borrower will be charged with all Revolving Loans made
to, and all other Obligations incurred by, the Borrower.
"Loan Documents" means this Agreement, the Revolving Credit
Notes, the Interim Bankruptcy Court Order, the Final Bankruptcy Court Order, the
Guaranty, the Pledge Agreement, the Security Agreements, each Supplemental
Agreement and all other agreements, instruments, and other documents executed
and delivered pursuant hereto or thereto or otherwise evidencing or securing any
Revolving Loan or other Obligation.
"Loan Parties" means, the Parent, the Borrower and the
Guarantors.
"Material Adverse Effect" means a material adverse effect on
any of (i) the operations, business, any material assets or properties,
condition (financial or otherwise) or prospects of any Loan Party (other than as
a result of the filing of the Chapter 11 Cases), (ii) the ability of any Loan
Party to perform any of its obligations under any Loan Document to which it is a
party, (iii) the legality, validity or enforceability of this Agreement or any
other Loan Document, (iv) the rights and remedies of the Agent and the Lenders
under any Loan Document, or (v) the validity, perfection or priority of a Lien
in favor of the Agent for the benefit of the Lenders on any of the Collateral.
"Moody's" means Moody's Investors Service, Inc. and any
successor thereto.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA for which any Borrower or any ERISA Affiliate has
contributed to, or has been obligated to contribute to, at any time during the
preceding six (6) years.
"Net Amount of Eligible Accounts Receivable" means at any
time, without duplication, the gross amount of Eligible Accounts Receivable at
such time plus (i) 75% of unapplied cash and credits greater than 90 days less
(ii) returns, chargebacks, discounts, claims, credits and allowances of any
nature at any time issued, owing, granted, outstanding, available or claimed.
"Net Cash Proceeds" means, (i) with respect to any Disposition
by any Person, the amount of cash received (directly or indirectly) from time to
time (whether as initial consideration or through the payment of deferred
consideration) by or on behalf of such Person or any of its Subsidiaries or
Affiliates, in connection therewith after deducting therefrom only (A) any
Indebtedness secured by any Lien permitted by Section 7.02(b) on any asset
(other than Indebtedness assumed by the purchaser of such asset) which is
required to be, and is, repaid in connection with such Disposition (other than
Indebtedness under this Agreement), (B) reasonable expenses related thereto
reasonably incurred by such Person or such Affiliate in connection therewith,
(C) transfer taxes paid by such Person or such Affiliate in connection
therewith, and (D) net income taxes to be paid in connection with such
Disposition (after taking into account
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<PAGE> 19
any tax credits or deductions and any tax sharing arrangements) and (ii) with
respect to the sale or issuance by any Person of any shares of its Capital
Stock, the aggregate amount of cash received (directly or indirectly) from time
to time (whether as initial consideration or through the payment of deferred
consideration) by or on behalf of such Person or any of its Subsidiaries or
Affiliates in connection therewith after deducting therefrom only reasonable
brokerage commissions, underwriting fees and discounts, legal fees and similar
fees and commissions.
"Net Income" means for any period the aggregate income (or net
loss) of the Parent and its Consolidated Subsidiaries on a Consolidated basis
for such period determined in accordance with GAAP.
"Notice of Borrowing" has the meaning specified therefor in
Section 2.02(a).
"Obligations" means (i) the obligations of the Borrower to
pay, as and when due and payable (by scheduled maturity, required prepayment,
acceleration, demand or otherwise), all amounts from time to time owing by it in
respect of the Loan Documents, whether for principal, interest, fees,
indemnification payments, expense reimbursements or otherwise, and (ii) the
obligations of the Borrower and each other Loan Party to perform or observe all
of its obligations from time to time existing under the Loan Documents.
"Operating Lease Obligations" means all obligations for the
payment of rent for any real or personal property under leases or agreements to
lease, other than Capitalized Lease Obligations.
"Parent" has the meaning specified therefor in the preamble
hereto.
"Participant Register" has the meaning specified therefor in
Section 11.07(b)(v).
"Pay-Off Letter" means a letter, in form and substance
reasonably satisfactory to the Agent, from the Existing Lender with respect to
the amount necessary to repay in full all of the obligations of the Loan Parties
owing to the Existing Lender and to obtain a termination or release of all of
the Liens existing in favor of the Existing Lender in and to the properties or
assets of the Loan Parties.
"Payment Office" means the Agent's office located at 450 Park
Avenue, 28th Floor, New York, New York 10022, or at such other office or offices
of the Agent as may be designated in writing from time to time by the Agent to
the Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permitted Indebtedness" means:
(a) any Indebtedness owing to the Agent and the Lenders under
this Agreement and the other Loan Documents;
(b) any Indebtedness existing on the Filing Date;
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(c) any Indebtedness permitted under Section 7.02(f);
(d) Contingent Obligations of the Parent with respect to
Operating Lease Obligations of its Subsidiaries permitted hereunder;
(e) Indebtedness secured by Liens permitted by clause (g) of
the definition of the term "Permitted Liens"; and
(f) reimbursement obligations in connection with letters of
credit issued by financial institutions for the account of the Borrower, which
letters of credit are cash collateralized at not less than 100% of the stated
amount thereof.
"Permitted Investments" means (i) marketable direct
obligations issued or unconditionally guaranteed by the United States Government
or issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within six months from the date of
acquisition thereof; (ii) commercial paper, maturing not more than 270 days
after the date of issue rated P-1 by Moody's or A-1 by Standard & Poor's; (iii)
certificates of deposit maturing not more than 270 days after the date of issue,
issued by commercial banking institutions and money market or demand deposit
accounts maintained at commercial banking institutions, each of which is a
member of the Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than $500,000,000; (iv) repurchase agreements
having maturities of not more than 90 days from the date of acquisition which
are entered into with major money center banks included in the commercial
banking institutions described in clause (iii) above and which are secured by
readily marketable direct obligations of the Government of the United States of
America or any agency thereof; (v) money market accounts maintained with mutual
funds having assets in excess of $2,000,000,000; (vi) tax exempt securities
rated A or better by Moody's or A+ or better by Standard & Poor's; and (vii)
cash posted as collateral for letters of credit issued through Foothill Capital
Corporation.
"Permitted Liens" means:
(a) Liens securing the Obligations;
(b) Liens for taxes, assessments and governmental charges the
payment of which is not required under Section 7.01(c);
(c) Liens imposed by law, such as carriers', warehousemen's,
mechanics', materialmen's and other similar Liens arising (provided they are
subordinate to the Agent's Liens on Inventory and the trademarks of the
Borrower) in the ordinary course of business and securing obligations (other
than Indebtedness for borrowed money);
(d) Liens existing on the Filing Date, as set forth on
Schedule 7.02(b), but not the extension of coverage thereof to other property or
the extension of maturity, refinancing or other modification of the terms
thereof or the increase of the Indebtedness secured thereby;
(e) deposits and pledges securing (i) obligations incurred in
respect of workers' compensation, unemployment insurance or other forms of
governmental insurance or benefits,
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(ii) the performance of bids, tenders, leases, contracts, including those for
utilities (other than for the payment of money) and statutory obligations or
(iii) obligations on surety or appeal bonds, but only to the extent such
deposits or pledges are incurred or otherwise arise in the ordinary course of
business and secure obligations not past due;
(f) easements, zoning restrictions and similar encumbrances on
real property and minor irregularities in the title thereto that do not (i)
secure obligations for the payment of money or (ii) materially impair the value
of such property or its use by any Loan Party or any of its Subsidiaries in the
normal conduct of such Person's business;
(g) (i) Liens upon real or personal property acquired or held
in the ordinary course of business at the time of acquisition or improvement of
such property to secure the purchase price thereof or incurred solely to finance
the acquisition or improvement of such property, provided that (A) such Liens do
not cover property other than the property acquired or improved and (B) the
Indebtedness secured by such Liens does not in any case exceed the lessor of the
cost or fair market value of such property at the time of such acquisition, and
(ii) liens incurred in connection with the Capitalized Lease Obligations, so
long as the aggregate principal amount of Indebtedness secured by the Liens
permitted pursuant to this clause (g) does not exceed $4,000,000 at any one time
outstanding; and
(h) Liens on cash collateral pledged to support reimbursement
obligations with respect to the letters of credit described in clause (f) of the
definition of Permitted Indebtedness.
"Person" means an individual, corporation, limited liability
company, partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or Governmental Authority.
"Pledge Agreement" means the Pledge and Security Agreement
made by each Loan Party in favor of the Agent for the benefit of the Lenders,
substantially in the form of Exhibit C hereto, securing the Obligations and
delivered to the Agent.
"Post-Default Rate" means a rate of interest per annum equal
to the rate of interest otherwise in effect from time to time pursuant to the
terms of this Agreement plus 2%, or, if a rate of interest is not otherwise in
effect, the Reference Rate plus 6%.
"Priority Professional Expenses" means those expenses entitled
to a priority as set forth in sub-clause (ii) of the clause "first" of the
definition of the term "Agreed Administrative Expense Priorities".
"property" means any right or interest in or to property of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Pro Rata Share" means, with respect to any Lender, the
percentage obtained by dividing (i) such Lender's Revolving Credit Commitment by
(ii) the Total Revolving Commitment, provided, that, if the Revolving Credit
Commitments have been reduced to zero, the numerator shall be the aggregate
unpaid principal amount of such Lender's Revolving Loans
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(including Agent Advances) and the denominator shall be the aggregate unpaid
principal amount of all of the Revolving Loans (including Agent Advances).
"Receivables Grantor" means each Guarantor referred to in
clause (i) or (ii) of the definition of the term Guarantors, other than
Designated Subsidiaries.
"Reference Bank" means The Chase Manhattan Bank, N.A., its
successors or any other commercial bank designated by the Agent to the Borrower
from time to time.
"Reference Rate" means the rate of interest publicly announced
by the Reference Bank in New York, New York from time to time as its prime rate
or base rate. The prime rate or base rate is determined from time to time by the
Reference Bank as a means of pricing some loans to its borrowers and neither is
tied to any external rate of interest or index nor necessarily reflects the
lowest rate of interest actually charged by the Reference Bank to any particular
class or category of customers. Each change in the Reference Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Register" has the meaning specified therefor in Section
11.07(b)(ii).
"Registered Loan" has the meaning specified therefor in
Section 2.03(c).
"Registered Note" has the meaning specified therefor in
Section 2.03(c).
"Regulation T", "Regulation U" and "Regulation X" mean,
respectively, Regulations T, U and X of the Board or any successor, as the same
may be amended or supplemented from time to time.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, seeping,
migrating, dumping or disposing of any Hazardous Material (including the
abandonment or discarding of barrels, containers and other closed receptacles
containing any Hazardous Material) into the indoor or outdoor environment,
including ambient air, soil, surface or ground water.
"Remedial Action" means all actions taken to (i) clean up,
remove, remediate, contain, treat, monitor, assess, evaluate or in any other way
address Hazardous Materials in the indoor or outdoor environment; (ii) prevent
or minimize a Release or threatened Release of Hazardous Materials so they do
not migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; (iii) perform pre-remedial studies and
investigations and post-remedial operation and maintenance activities; or (iv)
any other actions authorized by 42 U.S.C. 9601.
"Reportable Event" means an event described in Section 4043 of
ERISA (other than an event not subject to the provision for 30-day notice to the
PBGC under the regulations promulgated under such Section).
"Required Lenders" means Lenders whose Pro Rata Shares
aggregate more than 50%.
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<PAGE> 23
"Revolving Credit Commitment" means, with respect to each
Lender, (i) on or prior to the effective date of the Final Bankruptcy Court
Order, the commitment of such Lender to make Revolving Loans to the Borrower in
an aggregate principal amount outstanding at any time not to exceed the amount
set forth opposite such Lender's name in Part A of Schedule 1.01 hereto and (ii)
after the effective date of the Final Bankruptcy Court Order, the commitment of
such Lender to make Revolving Loans to the Borrower in an aggregate principal
amount outstanding at any time not to exceed the amount set forth opposite such
Lender's name in Part B of Schedule 1.01 hereto, in each case, as such amount
may be terminated or reduced from time to time in accordance with the terms of
this Agreement.
"Revolving Credit Note" means a promissory note of the
Borrower, substantially in the form of Exhibit A, made jointly and severally
payable to the order of a Lender, evidencing the Indebtedness resulting from the
making by such Lender to the Borrower of Revolving Loans, as such promissory
note may be amended, supplemented, restated, modified or extended from time to
time, and any promissory note or notes issued in exchange or replacement
therefor.
"Revolving Loan" means a loan made by a Lender to the Borrower
pursuant to Section 2.01(a).
"SEC" means the Securities and Exchange Commission or any
other similar or successor agency of the Federal government administering the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar Federal statute, and the rules and regulations of the SEC
thereunder, all as the same shall be in effect at the time.
"Security Agreement" means the Security Agreement made by each
Loan Party in favor of the Agent for the benefit of the Lenders, substantially
in the form of Exhibit D-1 hereto, securing the Obligations and delivered to the
Agent.
"Security Agreement - Patents and Trademarks" means, the
Security Agreement - Patents and Trademarks made by each Loan Party in favor of
the Agent for the benefit of the Lenders, substantially in the form of Exhibit
D-2 hereto, securing the Obligations and delivered to the Agent.
"Security Agreements" means the Security Agreement and the
Security Agreement - Patents and Trademarks.
"Settlement Period" has the meaning specified therefor in
Section 2.02(d)(i).
"Standard & Poor's" means Standard & Poor's Ratings Services,
a division of The McGraw-Hill Companies, Inc. and any successor thereto.
"Subsidiary" means, with respect to any Person at any date,
any corporation, limited or general partnership, limited liability company,
trust, association or other entity (i) the accounts of which would be
consolidated with those of such Person in such Person's consolidated financial
statements if such financial statements were prepared in accordance with GAAP or
(ii) of which
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more than 50% of (A) the outstanding Capital Stock having (in the absence of
contingencies) ordinary voting power to elect a majority of the board of
directors of such corporation, (B) the interest in the capital or profits of
such partnership or limited liability company or (C) the beneficial interest in
such trust or estate is, at the time of determination, owned or controlled
directly or indirectly through one or more intermediaries, by such Person.
"Supplemental Agreement" means a Supplemental Guaranty,
Security and Pledge Agreement entered into by a Subsidiary of the Parent,
substantially in the form of Exhibit H hereto.
"Termination Event" means (i) a Reportable Event with respect
to any Employee Plan other than the commencement of the Chapter 11 Cases, (ii)
any event that causes any Borrower or any of its ERISA Affiliates to incur
liability under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201,
4204 or 4212 of ERISA or Section 4971 or 4975 of the Code, (iii) the filing of a
notice of intent to terminate an Employee Plan or the treatment of an Employee
Plan amendment as a termination under Section 4041 of ERISA, (iv) the
institution of proceedings by the PBGC to terminate an Employee Plan, or (v) any
other event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Employee Plan.
"Total Revolving Credit Commitment" means (i) prior to the
effective date of the Final Bankruptcy Court Order, the sum of the amounts of
the Lenders' Revolving Credit Commitments set forth in Part A of Schedule
1.01(C) hereto and (ii) after the effective date of the Final Bankruptcy Court
Order, the sum of the amounts of the Lenders' Revolving Credit Commitments set
forth in Part B of Schedule 1.01(C) hereto.
"Unused Line Fee" has the meaning specified therefor in
Section 2.06(b).
"WARN" has the meaning specified therefor in Section 6.01(i).
"Wholly Owned Subsidiary" means any Subsidiary of the Parent
(other than a Designated Subsidiary) in which any combination of the Borrower
and the other Wholly Owned Subsidiaries shall own 100% of the outstanding
capital stock or other equity interests.
SECTION 1.02. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise, (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and
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Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights. References in this Agreement to "determination" by
the Agent include good faith estimates by the Agent (in the case of quantitative
determinations) and good faith beliefs by the Agent (in the case of qualitative
determinations).
SECTION 1.03. Accounting and Other Terms. Unless otherwise
expressly provided herein, each accounting term used herein shall have the
meaning given it under GAAP. All terms used in this Agreement which are defined
in Article 8 or Article 9 of the Uniform Commercial Code in effect in the State
of New York on the date hereof and which are not otherwise defined herein shall
have the same meanings herein as set forth therein.
SECTION 1.04. Time References. Unless otherwise indicated
herein, all references to time of day refer to Eastern standard time or Eastern
daylight saving time, as in effect in New York City on such day. For purposes of
the computation of a period of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each means "to but excluding"; provided, however, that with respect to a
computation of fees or interest payable to the Agent or any Lender, such period
shall in any event consist of at least one full day.
ARTICLE II
THE REVOLVING LOANS
SECTION 2.01. Revolving Credit Commitments.
(a) Subject to the terms and conditions and relying
upon the representations and warranties herein set forth and subject to the
Interim Bankruptcy Court Order and the Final Bankruptcy Court Order, each Lender
severally agrees to make Revolving Loans to the Borrower at any time and from
time to time from the Interim Facility Effective Date to the Final Maturity
Date, or until the earlier reduction of its Revolving Credit Commitment to zero
in accordance with the terms hereof, in an aggregate principal amount of
Revolving Loans at any time outstanding not to exceed the amount of such
Lender's Revolving Credit Commitment.
(b) Notwithstanding the foregoing, the aggregate
principal amount of Revolving Loans outstanding at any time to the Borrower
shall not exceed the lower of (i) the Total Revolving Credit Commitment and (ii)
the then current Borrowing Base. The Revolving Credit Commitment of each Lender
and the Total Revolving Credit Commitment shall automatically and permanently be
reduced to zero on the Final Maturity Date. Within the foregoing limits, the
Borrower may borrow, repay and reborrow, on or after the Interim Facility
Effective Date and prior to the Final Maturity Date, subject to the terms,
provisions and limitations set forth herein.
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SECTION 2.02. Making the Revolving Loans. (a) The Borrower
shall give the Agent prior telephone notice (immediately confirmed in writing,
in substantially the form of Exhibit C hereto (a "Notice of Borrowing"), not
later than 2:00 p.m. (New York City time) on the date which is two (2) Business
Days prior to the date of the proposed borrowing of Revolving Loans. Such Notice
of Borrowing shall be irrevocable and shall specify (i) the aggregate principal
amount of the proposed Revolving Loans, (ii) the proposed borrowing date, which
must be a Business Day and (iii) the use of proceeds thereof. The Agent and the
Lenders may act without liability upon the basis of written, telecopied or
telephonic notice believed by the Agent in good faith to be from the Borrower
(or from any Authorized Officer). The Borrower hereby waives the right to
dispute the Agent's record of the terms of any such telephonic Notice of
Borrowing. The Agent and each Lender shall be entitled to rely conclusively on
any such Authorized Officer's authority to request Revolving Loans on behalf of
the Borrower until the Agent receives written notice to the contrary. The Agent
and the Lenders shall have no duty to verify the authenticity of the signature
appearing on any written Notice of Borrowing. Except as otherwise provided in
this Section 2.02, Loans shall be made ratably by the Lenders in accordance with
their respective Revolving Credit Commitments.
(b) Each Notice of Borrowing pursuant to this Section
2.02 shall be irrevocable and the Borrower shall be bound to make a borrowing in
accordance therewith. Each Revolving Loan shall be made in a minimum amount of
$100,000 and shall be in an integral multiple of $25,000.
(c) (i) Except as otherwise provided in this
subsection 2.02(c), all Revolving Loans under this Agreement shall be made by
the Lenders simultaneously and proportionately to their Pro Rata Shares of the
Total Revolving Credit Commitment, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligations to make a Revolving Loan requested hereunder, nor shall the
Revolving Credit Commitment of any Lender be increased or decreased as a result
of the default by any other Lender in that other Lender's obligation to make a
Revolving Loan requested hereunder, and each Lender shall be obligated to make
the Revolving Loans required to be made by it by the terms of this Agreement
regardless of the failure by any other Lender.
(ii) Notwithstanding any other provision of
this Agreement, and in order to reduce the number of fund transfers among the
Borrower, the Agent and the Lenders, the Borrower, the Agent and the Lenders
agree that the Agent may (but shall not be obligated to), and the Borrower and
the Lenders hereby irrevocably authorize the Agent to, fund, on behalf of the
Lenders, Revolving Loans pursuant to Section 2.01, subject to the procedures for
settlement set forth in subsection 2.02(d); provided, however, that (a) the
Agent shall in no event fund such Revolving Loans if the Agent shall have
received written notice from the Required Lenders on the Business Day prior to
the day of the proposed Revolving Loan that one or more of the conditions
precedent contained in Section 5.02 will not be satisfied on the day of the
proposed Revolving Loan, and (b) the Agent shall not otherwise be required to
determine that, or take notice whether, the conditions precedent in Section 5.02
have been satisfied. If the Borrower gives a Notice of Borrowing requesting a
Revolving Loan and the Agent elects not to fund such Revolving Loan on behalf of
the Lenders, then promptly after receipt of the Notice of Borrowing requesting
such Loan, the Agent shall notify each Lender of the specifics of the requested
Revolving Loan and
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that it will not fund the requested Revolving Loan on behalf of the Lenders. If
the Agent notifies the Lenders that it will not fund a requested Revolving Loan
on behalf of the Lenders, each Lender shall make its Pro Rata Share of the
Revolving Loan available to the Agent, in immediately available funds, at the
Payment Office no later than 3:00 p.m. (New York City time) (provided that the
Agent requests payment from such Lender not later than 1:00 p.m.) on the date of
the proposed Revolving Loan. The Agent will make the proceeds of such Revolving
Loans available to the Borrower on the day of the proposed Revolving Loan by
causing an amount, in immediately available funds, equal to the proceeds of all
such Revolving Loans received by the Agent at the Payment Office or the amount
funded by the Agent on behalf of the Lenders to be deposited in an account
designated by the Borrower.
(iii) If the Agent has notified the Lenders
that the Agent, on behalf of the Lenders, will fund a particular Revolving Loan
pursuant to subsection 2.02(c)(ii), the Agent may assume that such Lender has
made such amount available to the Agent on such day and the Agent, in its sole
discretion, may, but shall not be obligated to, cause a corresponding amount to
be made available to the Borrower on such day. If the Agent makes such
corresponding amount available to the Borrower and such corresponding amount is
not in fact made available to the Agent by such Lender, the Agent shall be
entitled to recover such corresponding amount on demand from such Lender
together with interest thereon, for each day from the date such payment was due
until the date such amount is paid to the Agent, at the Federal Funds Rate for
three Business Days and thereafter at the Reference Rate. During the period in
which such Lender has not paid such corresponding amount to the Agent,
notwithstanding anything to the contrary contained in this Agreement or any
other Loan Document, the amount so advanced by the Agent to the Borrower shall,
for all purposes hereof, be a Revolving Loan made by the Agent for its own
account. Upon any such failure by a Lender to pay the Agent, the Agent shall
promptly thereafter notify the Borrower of such failure and the Borrower shall
immediately pay such corresponding amount to the Agent for its own account.
(iv) Nothing in this subsection 2.02(c)
shall be deemed to relieve any Lender from its obligations to fulfill its
Revolving Credit Commitment hereunder or to prejudice any rights that the Agent
or the Borrower may have against any Lender as a result of any default by such
Lender hereunder.
(d) (i) With respect to all periods for which the
Agent has funded Revolving Loans pursuant to subsection 2.02(c), on Friday of
each week, or if the applicable Friday is not a Business Day, then on the
following Business Day, or such shorter period as the Agent may from time to
time select (any such week or shorter period being herein called a "Settlement
Period"), the Agent shall notify each Lender of the unpaid principal amount of
the Revolving Loans outstanding as of the last day of each such Settlement
Period. In the event that such amount is greater than the unpaid principal
amount of the Revolving Loans outstanding on the last day of the Settlement
Period immediately preceding such Settlement Period (or, if there has been no
preceding Settlement Period, the amount of the Revolving Loans made on the date
of such Lender's initial funding), each Lender shall promptly (and in any event
not later than 2:00 p.m. if the Agent requests payment from such Lender not
later than 12:00 noon on such day) make available to the Agent its Pro Rata
Share of the difference in immediately available funds. In the event that such
amount is less than such unpaid principal amount, the Agent shall promptly pay
over to each
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Lender its Pro Rata Share of the difference in immediately available funds. In
addition, if the Agent shall so request at any time when a Default or an Event
of Default shall have occurred and be continuing, or any other event shall have
occurred as a result of which the Agent shall determine that it is desirable to
present claims against the Borrower for repayment, each Lender shall promptly
remit to the Agent or, as the case may be, the Agent shall promptly remit to
each Lender, sufficient funds to adjust the interests of the Lenders in the then
outstanding Revolving Loans to such an extent that, after giving effect to such
adjustment, each Lender's interest in the then outstanding Revolving Loans will
be equal to its Pro Rata Share thereof. The obligations of the Agent and each
Lender under this subsection 2.02(d) shall be absolute and unconditional. Each
Lender shall only be entitled to receive interest on its Pro Rata Share of the
Revolving Loans which have been funded by such Lender.
(ii) In the event that any Lender fails to
make any payment required to be made by it pursuant to subsection 2.02(d)(i),
the Agent shall be entitled to recover such corresponding amount on demand from
such Lender together with interest thereon, for each day from the date such
payment was due until the date such amount is paid to the Agent, at the Federal
Funds Rate for three Business Days and thereafter at the Reference Rate. During
the period in which such Lender has not paid such corresponding amount to the
Agent, notwithstanding anything to the contrary contained in this Agreement or
any other Loan Document, the amount so advanced by the Agent to the Borrower
shall, for all purposes hereof, be a Revolving Loan made by the Agent for its
own account. Upon any such failure by a Lender to pay the Agent, the Agent shall
promptly thereafter notify the Borrower of such failure and the Borrower shall
immediately pay such corresponding amount to the Agent for its own account.
Nothing in this subsection 2.02(d)(ii) shall be deemed to relieve any Lender
from its obligation to fulfill its Revolving Credit Commitment hereunder or to
prejudice any rights that the Agent or the Borrower may have against any Lender
as a result of any default by such Lender hereunder.
SECTION 2.03. Revolving Credit Notes; Repayment of Revolving
Loans. (a) All Revolving Loans made by a Lender to the Borrower shall be
evidenced by a single Revolving Credit Note, duly executed on behalf of the
Borrower, dated the Interim Facility Effective Date, and delivered to and made
payable to the order of such Lender in a principal amount equal to the maximum
amount of such Lender's Revolving Credit Commitment.
(b) The outstanding principal of all Revolving Loans
shall be due and payable on the Final Maturity Date.
(c) Each Revolving Loan recorded on the Register (the
"Registered Loan") may not be evidenced by promissory notes other than a
Revolving Credit Note, each of which is a Registered Note (as defined below).
Upon the registration of any Revolving Loan, any promissory note (other than a
Registered Note) evidencing the same shall be null and void and shall be
returned to the Borrower. The Borrower agrees, at the request of any Lender, to
execute and deliver to such Lender a promissory note in registered form to
evidence such Registered Loan (i.e. containing the registered note language set
forth in Exhibit A) and registered as provided in Section 11.07(b)(ii) (a
"Registered Note"), payable to such Lender and otherwise duly completed. Once
recorded on the Register, the Revolving Loan or Revolving Loans evidenced by
such Revolving Credit Note may not be removed from the Register so long as it
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remains outstanding, and a Registered Note may not be exchanged for a promissory
note that is not a Registered Note.
SECTION 2.04. Interest.
(a) Interest Rate. Each Revolving Loan shall bear
interest on the principal amount thereof from time to time outstanding, from the
date of such Loan until such principal amount becomes due, at a rate per annum
equal to the sum of (i) the Reference Rate and (ii) 2%.
(b) Default Interest. To the extent permitted by law,
upon the occurrence and during the continuance of an Event of Default, the
principal of, and all accrued and unpaid interest on, all Revolving Loans and
all fees, indemnities or any other Obligations of the Borrower under this
Agreement, the Revolving Notes and other Loan Documents shall bear interest,
from the date such Event of Default occurred until such Event of Default is
cured or waived in writing in accordance herewith, at a rate per annum equal at
all times to the Post-Default Rate.
(c) Interest Payment. Interest on each Revolving Loan
shall be payable monthly, in arrears, on the first day of each month, commencing
on the first day of the month following the month in which such Revolving Loan
is made and at maturity (whether upon demand, by acceleration or otherwise).
Interest at the Post-Default Rate shall be payable on demand. The Borrower
hereby authorizes the Agent to, and the Agent may, from time to time, charge the
Loan Account pursuant to Section 4.01 with the amount of any interest payment
due hereunder.
(d) General. All interest shall be computed on the
basis of a year of 360 days for the actual number of days, including the first
day but excluding the last day, elapsed.
SECTION 2.05. Reduction of Revolving Credit Commitments;
Prepayment of Revolving Loans.
(a) Reduction of Revolving Credit Commitments. The
Total Revolving Credit Commitment shall terminate on the Final Maturity Date.
The Borrower may, without premium or penalty, reduce the Total Revolving Credit
Commitment to an amount (which may be zero) not less than the sum of (A) the
aggregate unpaid principal amount of all Revolving Loans then outstanding and
(B) the aggregate principal amount of all Revolving Loans not yet made as to
which a Notice of Borrowing has been given by the Borrower under Section 2.02.
Each such reduction shall be in an amount which is an integral multiple of
$1,000,000, (unless the Total Revolving Credit Commitment in effect immediately
prior to such reduction is less than $1,000,000) shall be made by providing not
less than three Business Days' prior written notice to the Agent and shall be
irrevocable. Once reduced the Total Revolving Credit Commitment may not be
increased. Each such reduction of the Total Revolving Credit Commitment shall
reduce the Revolving Credit Commitment of each Lender proportionately in
accordance with its Pro Rata Share thereof.
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(b) Optional Prepayment. The Borrower may, upon not
less than one Business Day's notice, prepay without penalty or premium the
principal of any Revolving Loan, in whole or in part.
(c) Mandatory Prepayment.
(i) The Borrower will immediately prepay the
Revolving Loans at any time when the aggregate principal amount of all Revolving
Loans exceeds the Borrowing Base, to the full extent of any such excess. On each
day that any Revolving Loans are outstanding, after giving effect to any payment
made pursuant to the immediately preceding sentence, the Borrower shall hereby
be deemed to represent and warrant to the Agent and the Lenders that the
Borrowing Base calculated as of such day equals or exceeds the aggregate
principal amount of all Revolving Loans outstanding on such day.
(ii) The Agent shall on each Business Day
apply all funds transferred to or deposited in the Payment Office, to the
payment, in whole or in part, of the outstanding Revolving Loans.
(iii) Immediately upon any Disposition by
any Loan Party the Borrower shall prepay the Revolving Loans in an amount equal
to 100% of the Net Cash Proceeds received by the Parent or any of its
Subsidiaries in connection with such Disposition. Upon the loss, destruction or
taking by condemnation of any Collateral, the Borrower shall prepay the
outstanding principal of the Revolving Loans in an amount equal to 100% of the
proceeds received by the Parent or any of its Subsidiaries in connection
therewith, net of any reasonable expenses incurred in collecting such net
proceeds.
(iv) Without limiting any other provision of
this Agreement or any other Loan Document permitting or requiring prepayment of
the Revolving Loans in whole or part, the Borrower shall prepay the Revolving
Loans in whole without premium or penalty on September 9, 2000 in the event the
Final Bankruptcy Court Order shall not have been entered before such date.
(d) Cumulative Prepayments. Except as otherwise
expressly provided in this Section 2.05, payments with respect to any subsection
of this Section 2.05 shall be in addition to payments made or required to be
made under any other subsection of this Section 2.05.
SECTION 2.06. Fees.
(a) Closing Fee. (i) On or prior to the Interim
Facility Effective Date, the Borrower shall pay to the Agent for the account of
the Lenders in accordance their Pro Rata Shares a non-refundable closing fee
(the "Closing Fee") equal to $400,000, which shall be deemed fully earned when
paid.
(b) Unused Line Fee. From and after the Interim
Facility Effective Date and until the Final Maturity Date, the Borrower shall
pay to the Agent for the account of the Lenders in accordance with their Pro
Rata Shares an unused line fee (the "Unused Line Fee"), which shall accrue at
the rate per annum of 0.5% on the excess, if any, of the Total Revolving
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Credit Commitment over the average principal amount of Revolving Loans
outstanding from time to time and shall be payable monthly in arrears on the
first day of each month, commencing September 1, 2000.
(c) Audit and Collateral Monitoring Fees. The
Companies acknowledge that the Agent may visit the Loan Parties and/or conduct
audits, inspections and/or field examinations of the Loan Parties at any time
and from time to time. The Borrower agrees to pay $750 per day per examiner plus
the examiner's out-of-pocket costs and reasonable expenses incurred in
connection with all such visits, inspections, audits and examinations
SECTION 2.07. Taxes.
(a) All payments made by the Borrower hereunder,
under the Revolving Notes or under any other Loan Document shall be made without
set-off, counterclaim, deduction or other defense. All such payments shall be
made free and clear of and without deduction for any present or future income,
franchise, sales, use, excise, stamp or other taxes, levies, imposts,
deductions, charges, fees, withholdings, restrictions or conditions of any
nature now or hereafter imposed, levied, collected, withheld or assessed by any
jurisdiction (whether pursuant to United States Federal, state, local or foreign
law) or by any political subdivision or taxing authority thereof or therein, and
all interest, penalties or similar liabilities, excluding taxes on the net
income of, and branch profit taxes of the Agent or any Lender imposed by the
jurisdiction in which the Agent or such Lender is organized or any political
subdivision thereof or taxing authority thereof or any jurisdiction in which
such Person's principal office or relevant lending office is located or any
political subdivision thereof or taxing authority thereof (such nonexcluded
taxes being hereinafter collectively referred to as "Taxes"). If the Borrower
shall be required by law to deduct or to withhold any Taxes from or in respect
of any amount payable hereunder,
(i) the amount so payable shall be increased
to the extent necessary so that after making all required deductions and
withholdings (including Taxes on amounts payable to the Lenders pursuant to this
sentence) the Lenders receive an amount equal to the sum they would have
received had no such deductions or withholdings been made,
(ii) the Borrower shall make such deductions
or withholdings, and
(iii) the Borrower shall pay the full amount
deducted or withheld to the relevant taxation authority in accordance with
applicable law. Whenever any Taxes are payable by the Borrower, as promptly as
possible thereafter, the Borrower shall send the Lenders and the Agent an
official receipt (or, if an official receipt is not available, such other
documentation as shall be satisfactory to the Lenders or the Agent, as the case
may be) showing payment. In addition, the Borrower agrees to pay any present or
future taxes, charges or similar levies which arise from any payment made
hereunder or from the execution, delivery, performance, recordation or filing
of, or otherwise with respect to, this Agreement, the Revolving Credit Notes or
any other Loan Document other than the foregoing excluded taxes (hereinafter
referred to as "Other Taxes").
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(b) The Borrower will indemnify the Lenders for the
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section
2.07) paid by any Lender and any liability (including penalties, interest and
expenses for nonpayment, late payment or otherwise) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be paid within 30 days from the
date on which such Lender makes written demand which demand shall identify the
nature and amount of Taxes or Other Taxes for which indemnification is being
sought and the basis of the claim.
(c) Each Lender that is organized in a jurisdiction
other than the United States, a State thereof or the District of Columbia hereby
agrees that:
(i) it shall, no later than the Interim
Facility Effective Date (or, in the case of a Lender which becomes a party
hereto pursuant to Section 11.07 after the Interim Facility Effective Date, the
date upon which such Lender becomes a party hereto) deliver to the Borrower and
the Agent: (A) two accurate, complete and signed originals of U.S. Internal
Revenue Service Form 4224 or successor form, or (B) two accurate, complete and
signed originals of U.S. Internal Revenue Service Form 1001 or successor form,
in each case indicating that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest and fees for the account of
its lending office under this Agreement free from withholding of United States
Federal income tax;
(ii) if at any time such Lender changes its
lending office or offices or selects an additional lending office it shall, at
the same time or reasonably promptly thereafter, deliver to the Borrower through
the Agent in replacement for, or in addition to, the forms previously delivered
by it hereunder: (A) if such changed or additional lending office is located in
the United States, two accurate, complete and signed originals of such Form 4224
or successor form, or (B) two accurate, complete and signed originals of such
Form 1001 or successor form, in each case indicating that such Lender is on the
date of delivery thereof entitled to receive payments of principal, interest and
fees for the account of such changed or additional lending office under this
Agreement free from withholding of United States Federal income tax; and
(iii) it shall, promptly upon the Borrower's
reasonable request to that effect, deliver to the Borrower such other forms or
similar documentation as may be required from time to time by any applicable
law, treaty, rule or regulation in order to establish such Lender's tax status
for withholding purposes.
(d) If the Borrower fails to perform its obligations
under this Section 2.08, the Borrower shall indemnify the Lenders for any taxes,
interest or penalties that may become payable as a result of any such failure.
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ARTICLE III
SECURITY AND ADMINISTRATIVE PRIORITY
SECTION 3.01. Collateral; Grant of Lien.
(a) As security for the full and timely payment and
performance of all of the Obligations, each Company hereby assigns, pledges,
transfers and grants to the Agent, for the benefit of the Lenders, a first
priority security interest in and to and Lien on all of the property, assets or
interests in property or assets of such Company, of any kind or nature
whatsoever, real or personal, now existing or hereafter acquired or created
(including, without limitation, all property of the estate (within the meaning
of the Bankruptcy Code) all accounts, inventory, contract rights, instruments,
documents, chattel paper, general intangibles, machinery and equipment, real
property, leases, stock or other equity interests in Subsidiary and investment
property, and all causes of action arising under the Bankruptcy Code or
otherwise), and all proceeds, rents, products and profits of any of the
foregoing, provided that (i) such security interest and Lien shall not extend to
(A) any causes of action arising under Sections 544, 545, 547, 548, 549, 550,
551 or 553 of the Bankruptcy Code, (B) any lease that by its terms does not
permit any Lien on such Company's interest in such lease and that would
terminate such lease or prevent such Company from assuming such lease if the
Agent were granted a Lien on such lease, and (C) cash pledged to other financial
institutions to collateralize letters of credit issued by such financial
institutions for the benefit of the Borrower and (ii) such Liens in favor of the
Agent shall be subject to the payment of the Carve-Out Expenses having priority
over the Obligations to the extent set forth in the definition of Agreed
Administrative Expense Priorities (all property of the Companies subject to the
security interest referred to in this Section 3.01(a) being hereafter referred
to as the "Collateral"). Such Liens and their priority shall remain in effect
until the Revolving Credit Commitments have been terminated and all Obligations
have been repaid in cash in full.
(b) Notwithstanding anything herein to the contrary,
no Person entitled to Carve-Out Expenses shall be entitled to sell or otherwise
dispose, or seek or object to the sale or other disposition by the Lender, of
any Collateral.
SECTION 3.02. Administrative Priority. The Borrower agrees
that the Obligations shall constitute allowed administrative expenses in the
Chapter 11 Cases having priority over all administrative expenses of and
unsecured claims against the Borrower now existing or hereafter arising, of any
kind or nature whatsoever, including without limitation all administrative
expenses of the kind specified in Sections 503(b) and 507(b) of the Bankruptcy
Code, subject, as to priority, only to Carve-Out Expenses having priority over
the Obligations to the extent set forth in the definition of Agreed
Administrative Expense Priorities, provided that such administrative priority
shall not apply to causes of action arising under Section 544, 545, 547, 548,
549, 550, 551 or 553 of the Bankruptcy Code.
SECTION 3.03. Grants, Rights and Remedies. The Liens granted
pursuant to Section 3.01(a) and administrative priority granted pursuant to
Section 3.02 may be independently granted by the Loan Documents and by other
Loan Documents hereafter entered into. This Agreement, the Interim Bankruptcy
Court Order, the Final Bankruptcy Court Order and such other
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Loan Documents supplement each other, and the grants, priorities, rights and
remedies of the Agent and the Lenders hereunder and thereunder are cumulative.
SECTION 3.04. No Filings Required. The Liens created in favor
of the Agent pursuant to this Article III shall be deemed valid and perfected by
entry of the Interim Bankruptcy Court Order and, thereafter, the Final
Bankruptcy Court Order. The Agent shall not be required to file any financing
statements, notices of Lien or similar instruments in any jurisdiction or filing
office or to take any other action in order to validate or perfect the Lien and
security interest granted by either Company pursuant to this Agreement, the
Interim Bankruptcy Court Order, the Final Bankruptcy Order or any other Loan
Document.
SECTION 3.05 Survival. The Liens, lien priority,
administrative priorities and other rights and remedies granted by either
Company to the Agent and the Lenders pursuant to this Agreement, the Interim
Bankruptcy Court Order, the Final Bankruptcy Court Order and the other Loan
Documents (including, but not limited to, the existence, perfection and priority
of the Liens provided herein and therein, and the administrative priority
provided herein and therein) shall not be modified, altered or impaired in any
manner by any other financing or extension of credit or incurrence of debt by
any Loan Party (pursuant to Section 364 of the Bankruptcy Code or otherwise), or
by any dismissal or conversion of any of the Chapter 11 Cases, or by any other
act or omission whatever. Without limitation, notwithstanding any such order,
financing, extension, incurrence, dismissal, conversion, act or omission:
(a) except for the Carve-Out Expenses having priority
over the Obligations to the extent set forth in the definition of Agreed
Administrative Expense Priorities, no costs or expenses of administration which
have been or may be incurred in the Chapter 11 Cases or any conversion of the
same or in any other proceedings related thereto, and no priority claims, are or
will be prior to or on a parity with any claim of any Lender against the
Borrower in respect of any Obligation, provided that such administrative
priority shall not apply to causes of action arising under Section 544, 545,
547, 548, 549, 550, 551 or 553 of the Bankruptcy Code,
(b) the Liens created in favor of the Agent pursuant
to this Article III shall constitute valid and perfected Liens and shall be
prior to all other Liens, now existing or hereafter arising, in favor of any
other Person, provided that such Liens shall be subject to the payment of the
Carve-Out Expenses having priority over the Obligations to the extent set forth
in the definition of Agreed Administrative Expense Priorities, and
(c) the Liens created in favor of the Agent pursuant
to this Article III and shall continue valid and perfected without the necessity
that the Agent file financing statements or otherwise perfect its Lien under
applicable nonbankruptcy law.
ARTICLE IV
PAYMENTS AND OTHER COMPENSATION
SECTION 4.01. Payments; Computations and Statements. (a) The
Borrower will make each payment under the Revolving Notes not later than 2:00
p.m. (New York City
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time) on the day when due, in lawful money of the United States of America and
in immediately available funds, to the Agent at the Payment Office. All payments
received by the Agent after 2:00 p.m. (New York City time) on any Business Day
will be credited to the Loan Account on the next succeeding Business Day. All
payments shall be made by the Borrower without defense, set-off or counterclaim
to the Agent and the Lenders. Except as provided in Section 2.02, after receipt,
the Agent will promptly thereafter cause to be distributed like funds relating
to the payment of principal ratably to the Lenders in accordance with their Pro
Rata Shares and like funds relating to the payment of any other amount payable
to any Lender to such Lender, in each case to be applied in accordance with the
terms of this Agreement, provided that the Agent will cause to be distributed
all interest and fees received from or for the account of the Borrower not less
than once each month and in any event promptly after receipt thereof. The
Lenders and the Borrower hereby authorizes the Agent to, and the Agent may, from
time to time, charge the Loan Account with any amount due and payable by the
Borrower under any Loan Document. Each of the Lenders and the Borrower agrees
that the Agent shall have the right to make such charges whether or not any
Event of Default or Default shall have occurred and be continuing or whether any
of the conditions precedent in Section 4.02 have been satisfied. Any amount
charged to the Loan Account of the Borrower shall be deemed a Revolving Loan
hereunder made by the Lenders to the Borrower, funded by the Agent on behalf of
the Lenders and subject to Section 2.02. The Lenders and the Borrower confirm
that any charges which the Agent may so make to the Loan Account as herein
provided will be made as an accommodation to the Borrower and solely at the
Agent's discretion, provided that the Agent shall from time to time upon the
request of the Agent, charge the Loan Account with any amount due and payable
under any Loan Document. Whenever any payment to be made under any such Loan
Document shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be. All computations of fees shall be made by the Agent on the
basis of a year of 360 days for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such fees are
payable. Each determination by the Agent of an interest rate or fees hereunder
shall be presumptive evidence of such rates and fees for all purposes in the
absence of manifest error.
(b) The Agent shall provide the Borrower, promptly
after the end of each calendar month, a summary statement (in the form from time
to time used by the Agent) of the opening and closing daily balances in the Loan
Account during such month, the amounts and dates on all Revolving Loans made to
the Borrower during such month, the amounts and dates of all payments on account
of the Revolving Loans to the Borrower during such month and the Revolving Loans
to which such payments were applied, the amount of interest accrued on the
Revolving Loans to the Borrower during such month, and the amount and nature of
any charges to such Loan Account made during such month on account of fees,
commissions, expenses and other Obligations. All entries on any such statement
shall, 30 days after the same is sent, be presumed to be correct absent manifest
error.
SECTION 4.02. Sharing of Payments, Etc. Except as provided in
Section 2.02, if any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on
account of any Obligation in excess of its ratable share of payments on account
of similar obligations obtained by all the Lenders, such Lender shall
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forthwith purchase from the other Lenders such participations in such similar
obligations held by them as shall be necessary to cause such purchasing Lender
to share the excess payment ratably with each of them; provided, however, that
if all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender of
any interest or other amount paid by the purchasing Lender in respect of the
total amount so recovered). The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 4.02 may, to the
fullest extent permitted by law, exercise all its rights (including the Lender's
right of set-off) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
SECTION 4.03. Apportionment of Payments.
(a) Subject to Section 2.02 and to any written
agreement among the Agent and the Lenders, all payments of principal and
interest in respect of outstanding Revolving Loans, all payments of fees (other
than the fees set forth in Section 2.06 to the extent set forth in a written
agreement among the Agent and the Lenders and the audit and collateral
monitoring fee provided for in Section 2.06(c)) and all other payments in
respect of any other Obligations, shall be allocated by the Agent among such of
the Lenders as are entitled thereto, in proportion to their respective Pro Rata
Shares or otherwise as provided herein or, in respect of payments not made on
account of Revolving Loans, as designated by the Person making payment when the
payment is made.
(b) After the occurrence and during the continuance
of an Event of Default, the Agent may, and upon the direction of the Required
Lenders shall, apply all payments in respect of any Obligations and all proceeds
of the Collateral, subject to the provisions of this Agreement (i) first, to pay
the Obligations in respect of any fees, expense reimbursements, indemnities and
other amounts then due to the Agent until paid in full; (ii) second, to pay the
Obligations in respect of any fees and indemnities then due to the Lenders until
paid in full; (iii) third, ratably to pay interest due in respect of the
Revolving Loans and Agent Advances until paid in full; (iv) fourth, ratably to
pay principal of the Revolving Loans until paid in full and Agent Advances until
paid in full; and (v) fifth, to the ratable payment of all other Obligations
then due and payable.
SECTION 4.04. Increased Costs and Reduced Return.
(a) If any Lender shall have determined that the
adoption or implementation of, or any change in, any law, rule, treaty or
regulation, or any policy, guideline or directive of, or any change in the
interpretation or administration thereof by, any court, central bank or other
administrative or Governmental Authority, or compliance by any Lender or any
Person controlling any such Lender with any directive of or guideline from any
central bank or other Governmental Authority or the introduction of or change in
any accounting principles applicable to any Lender, or any Person controlling
any such Lender (in each case, whether or not
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having the force of law), shall (i) change the basis of taxation of payments to
any Lender or any Person controlling any such Lender of any amounts payable
hereunder (except for taxes on the overall net income of any Lender or any
Person controlling any such Lender), (ii) impose, modify or deem applicable any
reserve, special deposit or similar requirement against any Loan or against
assets of or held by, or deposits with or for the account of, or credit extended
by any Lender, or any Person controlling any such Lender or (iii) impose on any
Lender or any Person controlling any such Lender or any other condition
regarding this Agreement or any Loan and the result of any event referred to in
clauses (i), (ii) or (iii) above shall be to increase the cost to any Lender of
making any Loan, or agreeing to make any Loan or to reduce any amount received
or receivable by any Lender hereunder, then, upon demand by such Lender, the
Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such increased costs or reductions in amount.
(b) If any Lender shall have determined that any
Capital Guideline or adoption or implementation of, or any change in, any
Capital Guideline by the Governmental Authority charged with the interpretation
or administration thereof, or compliance by any Lender or any Person controlling
such Lender with any Capital Guideline or with any request or directive of any
such Governmental Authority with respect to any Capital Guideline, or the
implementation of, or any change in, any applicable accounting principles (in
each case, whether or not having the force of law), either (i) affects or would
affect the amount of capital required or expected to be maintained by any Lender
or any Person controlling such Lender, and any Lender determines that the amount
of such capital is increased as a direct or indirect consequence of any
Revolving Loans made or maintained or any Lender's or any such other controlling
Person's other obligations hereunder, or (ii) has or would have the effect of
reducing the rate of return on any Lender's or any such other controlling
Person's capital to a level below that which such Lender or such controlling
Person could have achieved but for such circumstances as a consequence of any
Revolving Loans made or maintained or any agreement to make Revolving Loans or
such Lender's or such other controlling Person's other obligations hereunder (in
each case, taking into consideration such Lender's or such other controlling
Person's policies with respect to capital adequacy), then, upon demand by any
Lender, the Borrower shall pay to such Lender from time to time such additional
amounts as will compensate such Lender for such cost of maintaining such
increased capital or such reduction in the rate of return on such Lender's or
such other controlling Person's capital.
(c) All amounts payable under this Section 4.04 shall
bear interest from the date that is ten days after the date of demand by a
Lender until payment in full to such Lender at the Reference Rate. A certificate
of any Lender claiming compensation under this Section 4.04 specifying the event
herein above described and the nature of such event shall be submitted by such
Lender to the Borrower, setting forth the additional amount due and an
explanation of the calculation thereof and such Lender's reasons for invoking
the provisions of this Section 4.04, and shall be presumptive evidence of such
additional amounts absent manifest error.
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ARTICLE V
CONDITIONS TO EFFECTIVENESS AND EXTENSIONS OF CREDIT
SECTION 5.01. Conditions Precedent to Effectiveness. This
Agreement shall become effective as of the Business Day (the "Effective Date")
when each of the following conditions precedent shall have been satisfied in a
manner satisfactory to the Agent:
(a) Interim Bankruptcy Orders. The Agent shall have
received a certified copy of the Interim Bankruptcy Court Order, and such order
shall be in full force and effect and shall not have been reversed, stayed,
modified or amended absent prior written consent of the Agent and the Companies.
(b) Payment of Fees, Etc. The Borrower shall have
paid all fees, costs, expenses and taxes then payable pursuant to Sections
2.06(a) and 11.04.
(c) Representations and Warranties; No Event of
Default. The following statements shall be true and correct: (i) the
representations and warranties contained in Article VI and in each other
certificate or other writing delivered to the Agent or the Lenders pursuant
hereto or thereto on or prior to the Effective Date are true and correct on and
as of the Effective Date as though made on and as of such date and (ii) no
Default or Event of Default has occurred and be continuing on the Effective Date
or will result from this Agreement or the other Loan Documents becoming
effective in accordance with its or their respective terms.
(d) Material Adverse Change. Except as set forth on
Schedule 6.01(g) hereto, the Agent shall have determined, in its sole judgment
exercised reasonably, that no material adverse change shall have occurred in the
business, operations, condition (financial or otherwise), properties or
prospects of any Loan Party since December 31, 1999, other than the filing of
the Chapter 11 Cases.
(e) Pleadings. The Agent shall have received all
"first day" pleadings filed or to be filed with the Bankruptcy Court in
connection with the Chapter 11 Cases, and been satisfied with all such
pleadings, including, without limitation, any pleadings concerning the payment
of claims which arose or accrued prior to the Filing Date.
(f) Business Plan. The Agent shall have received a
copy of the Business Plan, the contents of which shall be satisfactory to the
Agent.
SECTION 5.02. Conditions Precedent to all Revolving Loans. The
obligation of any Lender to make any Revolving Loan is subject to the
fulfillment, in a manner reasonably satisfactory to the Agent, of each of the
following conditions precedent:
(a) Payment of Fees, Etc. The Borrower shall have
paid all fees, costs, expenses and taxes then payable by the Borrower pursuant
to this Agreement and the other Loan Documents, including, without limitation,
Sections 2.06 and 11.04.
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(b) Representations and Warranties; No Event of
Default. The following statements shall be true and correct, and the submission
by the Borrower to the Agent of a Notice of Borrowing with respect to each such
Revolving Loan, and the Borrower's acceptance of the proceeds of such Revolving
Loan shall each be deemed to be a representation and warranty by the Borrower on
the date of such Revolving Loan that: (i) the representations and warranties
contained in Article VI and in each other Loan Document, certificate or other
writing delivered to the Agent pursuant hereto or thereto on or prior to the
date of such Revolving Loan are true and correct on and as of such date as
though made on and as of such date, (ii) at the time of and after giving effect
to the making of such Revolving Loan and the application of proceeds thereof, no
Default or Event of Default has occurred and is continuing or would result from
the making of the Revolving Loan to be made on such date and (iii) the
conditions set forth in this Section 5.02 have been satisfied as of the date of
such request.
(c) Bankruptcy Court Order. On the date of such
Revolving Loan, the Interim Bankruptcy Court Order or the Final Bankruptcy Court
Order, as the case may be, shall have been signed by the Bankruptcy Court, and
the Agent shall have received a certified copy of the same and such order shall
be in full force and effect and shall not have been appealed, reversed, stayed,
modified or amended absent the consent of the Agent and the Borrower.
(d) Final Bankruptcy Court Order. With respect to any
Revolving Loan to be made on or after September 9, 2000, the Final Bankruptcy
Court Order shall be in full force and effect and shall not have been appealed,
reversed, stayed, modified or amended absent the consent of the Agent and the
Companies.
(e) Legality. The making of such Revolving Loan shall
not contravene any law, rule or regulation applicable to the Agent or any
Lender.
(f) Notices. The Agent shall have received a Notice
of Borrowing pursuant to Section 2.02.
(g) Delivery of Documents. The Agent shall have
received on or before the date of such Revolving Loan the following, each in
form and substance satisfactory to the Agent and, unless indicated otherwise,
dated the Initial Revolving Loan Date:
(i) a Revolving Credit Note payable to the
order of each Lender with a Revolving Credit Commitment, duly executed by the
Borrower;
(ii) the Guaranty, duly executed by each
Guarantor in existence on the Effective Date;
(iii) the Pledge Agreement, duly executed by
each Loan Party in existence on the Effective Date, together with (i)
certificates representing the Capital Stock pledged thereunder and undated stock
powers executed in blank, (ii) proper financing statements (Form UCC-1 or a
comparable form) or the equivalent thereof under the Uniform Commercial Code (or
similar law or statute) of all jurisdictions that may be necessary or that the
Agent may deem desirable in order to perfect and protect the security interests
created under the Pledge Agreement,
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covering the Collateral described therein, in each case completed in a manner
satisfactory to the Agent and duly executed by the applicable Loan Party; and
(iii) evidence that all other actions that may be necessary or that the Agent
may deem desirable in order to perfect and protect the security interests
created under the Pledge Agreement have been taken or will be taken in
accordance with the terms of the Loan Documents;
(iv) the Security Agreements duly executed
by each Loan Party in existence on the Effective Date, together with (i) proper
financing statements (Form UCC-1 or a comparable form) or the equivalent thereof
under the Uniform Commercial Code (or similar law or statute) of all
jurisdictions that may be necessary or that the Agent may deem desirable in
order to perfect and protect the Liens created under the Security Agreements,
covering the Collateral described therein, in each case completed in a manner
satisfactory to the Agent and duly executed by the applicable Loan Party; (ii)
each of the Depository Account Agreements and the Cash Concentration Account
Agreement, executed by each party thereto, and (iii) evidence that all other
actions that may be necessary or that the Agent may deem desirable in order to
perfect and protect the Liens created under the Security Agreements have been
taken or will be taken in accordance with the terms of the Loan Documents;
(v) a copy of the resolutions of each Loan
Party, certified as of the Effective Date by an Authorized Officer, authorizing
(A) the borrowings hereunder and the transactions contemplated by the Loan
Documents to which such Loan Party is or will be a party and (B) the execution,
delivery and performance by such Loan Party of each Loan Document and the
execution and delivery of the other documents to be delivered by such Person in
connection herewith and therewith;
(vi) a certificate of an Authorized Officer,
certifying the names and true signatures of the representatives of such Loan
Party authorized to sign each Loan Document to which such Loan Party is or will
be a party and the other documents to be executed and delivered by such Loan
Party in connection herewith and therewith, together with evidence of the
incumbency of such authorized officers;
(vii) a certificate of the appropriate
official(s) of the state of organization of each Loan Party certifying as to the
subsistence in good standing of, and the payment of taxes by, such Loan Party in
such states, together with confirmation by telephone or telegram (where
available) on the Interim Facility Effective Date from such official(s) as to
such matters;
(viii) a true and complete copy of the
charter, certificate of formation, certificate of limited partnership or other
publicly filed organizational document of each Loan Party certified as of a date
not more than 30 days prior to the Interim Facility Effective Date by an
appropriate official of the state of organization of such Loan Party;
(ix) a copy of the by-laws, limited
liability company agreement, operating agreement, agreement of limited
partnership or other organizational document of each Loan Party, together with
all amendments thereto, certified as of August 30, 2000 by an Authorized
Officer;
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(x) one or more opinions of counsel to the
Loan Parties, as to such matters as the Agent may reasonably request;
(xi) a certificate of an Authorized Officer,
certifying as to the matters set forth in subsection (c) of this Section 5.01;
(xii) evidence of the insurance coverage
required by Section 7.01(h) and such other insurance coverage with respect to
the business and operations of the Loan Parties as the Agent may reasonably
request, in each case, where requested by the Agent, with such endorsements as
to the named insureds or loss payees thereunder as the Agent may request and
providing that such policy may be terminated or canceled (by the insurer or the
insured thereunder) only upon 30 days' prior written notice to the Agent and
each such named insured or loss payee, together with evidence of the payment of
all premiums due in respect thereof for such period as the Agent may request;
(xiii) a certificate of an Authorized
Officer, certifying the names and true signatures of the persons that are
authorized to provide Notices of Borrowings and all other notices under this
Agreement and the other Loan Documents;
(xiv) the results of a search of the Uniform
Commercial Code filings (or equivalent filings) made with respect to the Loan
Parties in the states (or other jurisdictions) in which the chief executive
office of each such Person is located, any offices of such Persons in which
records have been kept relating to Accounts Receivable and the other
jurisdictions in which Uniform Commercial Code filings (or equivalent filings)
are to be made, together with copies of the financing statements (or similar
documents) disclosed by such search, and accompanied by evidence satisfactory to
the Agent that the Liens indicated in any such financing statement (or similar
document) are Permitted Liens or have been released or termination statements
with respect thereto in form satisfactory to the Agent have been furnished by
the Borrower to the Agent;
(xv) the Borrowing Base Certificate required
to have been delivered pursuant to Section 7.01(a)(v) as of the date of such
Revolving Loan;
(xvi) the Pay-Off Letter, together with UCC
termination statements and other documentation evidencing the termination by the
Existing Lender of its Liens in and to the properties and assets of the Loan
Parties; and
(xvii) such other agreements, instruments,
approvals, opinions and other documents, each reasonably satisfactory to the
Agent in form and substance, as the Agent may reasonably request.
(h) Proceedings; Receipt of Documents. All
proceedings in connection with the making of such Revolving Loan and the other
transactions contemplated by this Agreement and the other Loan Documents, and
all documents incidental hereto and thereto, shall be reasonably satisfactory to
the Agent and its counsel, and the Agent and such counsel shall have received
all such information and such counterpart originals or certified or other copies
of such
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documents, in form and substance reasonably satisfactory to the Agent, as the
Agent or such counsel may reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties. Each Company
hereby represents and warrants to the Agent and the Lenders as follows:
(a) Organization, Good Standing, Etc. Each Loan Party
(i) is a corporation, limited liability company or limited partnership duly
organized, validly existing and in good standing under the laws of the state of
its organization, (ii) subject to the existence of the Chapter 11 Cases and the
entry of the Interim Bankruptcy Court Order or the Final Bankruptcy Court Order,
as the case may be, has all requisite power and authority to conduct its
business as now conducted and as presently contemplated and, in the case of the
Borrower, to make the borrowings hereunder, and to execute and deliver each Loan
Document to which it is a party, and to consummate the transactions contemplated
thereby, and (iii) is duly qualified to do business and is in good standing in
each jurisdiction in which the character of the properties owned or leased by it
or in which the transaction of its business makes such qualification necessary
except where the failure to be qualified or in good standing could not have a
Material Adverse Effect.
(b) Authorization, Etc. The execution, delivery and
performance by each Loan Party of each Loan Document to which it is or will be a
party, (i) have been duly authorized by all necessary action, (ii) do not and
will not contravene its charter or by-laws, its limited liability company or
operating agreement or its certificate of partnership or partnership agreement,
as applicable, or any applicable law or any contractual restriction binding on
or otherwise affecting it or any of its properties (other than conflicts,
breaches and defaults the enforcement of which will be stayed by virtue of the
filing of the Chapter 11 cases), (iii) do not and will not result in or require
the creation of any Lien (other than pursuant to any Loan Document) upon or with
respect to any of its properties, and (iv) do not and will not result in any
suspension, revocation, impairment, forfeiture or nonrenewal of any permit,
license, authorization or approval applicable to its operations or any of its
properties; provided, however, the incurrence of indebtedness and the granting
of liens under the Loan Documents may on the Effective Date violate either of
the agreements referred to on Schedule 6.01(b) hereto, each of which shall be
terminated, or appropriate consents thereunder obtained, prior to the Initial
Revolving Loan Date.
(c) Governmental Approvals. Except for the entry of
the Interim Bankruptcy Court Order and the Final Bankruptcy Court Order, no
authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority is required in connection with the due execution,
delivery and performance by any Loan Party of any Loan Document to which it is
or will be a party.
(d) Execution and Binding Effect. This Agreement has
been duly executed and delivered and is, and each other Loan Document, when
executed and delivered
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hereunder, will have been duly executed and delivered and will be, the legal,
valid and binding obligation of each Loan Party that is a party thereto,
enforceable against such Loan Party in accordance with its terms.
(e) Subsidiaries. Schedule 6.01(e) is a complete and
correct description of the name, jurisdiction of incorporation and ownership of
the outstanding Capital Stock of all Subsidiaries of the Parent in existence on
the date hereof. All of the issued and outstanding shares of Capital Stock of
such Subsidiaries have been validly issued and are fully paid and nonassessable,
and the holders thereof are not entitled to any preemptive, first refusal or
other similar rights. Except as indicated on such Schedule, all such Capital
Stock is owned by the Parent directly or indirectly through one or more of its
wholly-owned Subsidiaries, free and clear of all Liens.
(f) Litigation. Except as set forth in Schedule
6.01(f), there is no pending or, to the knowledge of any Loan Party, threatened
action, suit or proceeding affecting any Loan Party before any court or other
Governmental Authority or any arbitrator that (i) could have a Material Adverse
Effect or (ii) relates to this Agreement, the Revolving Notes or any other Loan
Document or any transaction contemplated hereby or thereby.
(g) Financial Condition.
(i) Except as set forth on Schedule 6.01(g)
hereto, since December 31, 1999 no event or development has occurred that has
had or could have a Material Adverse Effect.
(ii) The Parent has heretofore furnished to
the Agent a schedule of projected cash receipts, cash disbursements and monthly
cash flows of the Parent and its Subsidiaries prepared on a monthly basis
through December 31, 2001 (the "Business Plan"). Such projections are believed
by the Parent at the time furnished to be reasonable, have been prepared on a
reasonable basis and in good faith by the Parent, and have been based on
assumptions believed by the Parent to be reasonable at the time made and upon
the best information then reasonably available to the Parent, and the Parent is
not aware of any facts or information that would lead it to believe that such
projections, as so updated, are incorrect or misleading in any material respect.
(h) Compliance with Law, Etc. None of the Loan
Parties is in violation of its organizational documents, any material law, rule,
regulation, judgment or order of any Governmental Authority applicable to it or
any of its material property or assets, and no Default or Event of Default has
occurred and is continuing.
(i) ERISA. Except as set forth on Schedule 6.01(i),
(i) each Employee Plan is in substantial compliance with ERISA and the Code,
(ii) no Termination Event has occurred nor is reasonably expected to occur with
respect to any Employee Plan, (iii) the most recent annual report (Form 5500
Series) with respect to each Employee Plan, including any required Schedule B
(Actuarial Information) thereto, copies of which have been filed with the
Internal Revenue Service and delivered to the Agent, is complete and correct and
fairly presents the funding status of such
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Employee Plan, and since the date of such report there has been no material
adverse change in such funding status, (iv) no Employee Plan had an accumulated
or waived funding deficiency or permitted decreases which would create a
deficiency in its funding standard account or has applied for an extension of
any amortization period within the meaning of Section 412 of the Code at any
time during the previous 60 months, and (v) no Lien imposed under the Code or
ERISA exists or is likely to arise on account of any Employee Plan within the
meaning of Section 412 of the Code at any time during the previous 60 months.
Except as set forth on Schedule 6.01(i), none of the Loan Parties or any of
their ERISA Affiliates have incurred any withdrawal liability under ERISA with
respect to any Multiemployer Plan, or are aware of any facts indicating that the
Loan Parties or any of their ERISA Affiliates may in the future incur any such
withdrawal liability. Except as required by Section 4980B of the Code, none of
the Loan Parties or any of their ERISA Affiliates maintains an employee welfare
benefit plan (as defined in Section 3(1) of ERISA) which provides health or
welfare benefits (through the purchase of insurance or otherwise) for any
retired or former employee of any Loan Party or any of its ERISA Affiliates or
coverage after a participant's termination of employment. None of the Loan
Parties or any of their ERISA Affiliates has incurred any liability or
obligation under the Worker Adjustment and Retraining Notification Act ("WARN")
or similar state law, which remains unpaid or unsatisfied.
(j) Taxes, Etc. All Federal, state and local tax
returns and other reports required by applicable law to be filed by any Loan
Party have been filed, or extensions have been obtained, and all taxes,
assessments and other governmental charges imposed upon any Loan Party or any
property of any Loan Party and which have become due and payable on or prior to
the date hereof have been paid, except to the extent contested in good faith by
proper proceedings which stay the imposition of any penalty, fine or Lien
resulting from the non-payment thereof and with respect to which adequate
reserves have been set aside for the payment thereof.
(k) Federal Reserve Regulations. None of the Loan
Parties is nor will be engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of
Regulations T, U or X), and no proceeds of any Revolving Loan will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying any margin stock.
(l) Joint Ventures. The Parent does not and shall not
own directly or indirectly any equity interest in any Person other than the
Subsidiaries listed on Schedule 6.01(e) hereto and the Joint Ventures listed on
Schedule 6.01(l) hereto, which Schedule 6.01(l) sets forth as of the date hereof
a list of all Joint Ventures in which any of the Parent and its Subsidiaries has
an equity interest and the direct or indirect percentage ownership interest of
such Person therein.
(m) Adverse Agreements, Etc. None of the Loan Parties
is subject to any charter, limited liability company agreement, partnership
agreement or other corporate, partnership or limited liability company
restriction or any judgment, order, regulation, ruling or other requirement of a
court or other Governmental Authority, which has, or in the future could have, a
Material Adverse Effect.
(n) Permits, Etc. Each Loan Party has, and is in
compliance with, all material permits, licenses, authorizations, approvals,
entitlements and accreditations required for
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such Person lawfully to own, lease, manage or operate, or to acquire, each
business currently owned, leased, managed or operated, or to be acquired, by
such Person. No condition exists or event has occurred which, in itself or with
the giving of notice or lapse of time or both, would result in the suspension,
revocation, impairment, forfeiture or non-renewal of any such permit, license,
authorization, approval, entitlement or accreditation, and there is no claim
that any thereof is not in full force and effect.
(o) Properties. Each Loan Party has good and
marketable title to, or valid leasehold interests in, all property and assets
material to its business, free and clear of all Liens except Permitted Liens.
The properties are in good working order and condition, ordinary wear and tear
excepted. Schedule 6.01(o) hereto sets forth a complete and accurate list as of
the Interim Facility Effective Date of all real property owned or leased by each
Loan Party.
(p) Full Disclosure. Each Loan Party has disclosed to
the Agent all agreements, instruments and corporate or other restrictions to
which it is subject, and all other matters known to it, that, individually or in
the aggregate, could result in a Material Adverse Effect. None of the other
reports, financial statements, certificates or other information furnished by or
on behalf of any Loan Party to the Agent in connection with the negotiation of
this Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which it was made, not misleading; provided that,
with respect to projected financial information, each Company represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time. There is no contingent liability or fact that may
have a Material Adverse Effect which has not been set forth in a footnote
included in the Financial Statements or a schedule hereto.
(q) Environmental Matters. Except as set forth on
Schedule 6.01(q) hereto, (i) the operations of each Loan Party are in compliance
in all material respects with Environmental Laws; (ii) there has been no Release
at any of the properties owned or operated by any Loan Party or a predecessor in
interest, or at any disposal or treatment facility which received Hazardous
Materials generated by any Loan Party or any predecessor in interest which could
have a Material Adverse Effect; (iii) no Environmental Action has been asserted
against any Loan Party or any predecessor in interest nor does any Loan Party
have knowledge or notice of any threatened or pending Environmental Action
against any Loan Party or any predecessor in interest which could have a
Material Adverse Effect; and (iv) no Environmental Actions have been asserted
against any facilities that may have received Hazardous Materials generated by
any Loan Party or any predecessor in interest which could have a Material
Adverse Effect.
(r) Insurance. Each Loan Party keeps its property
adequately insured and maintains (i) insurance to such extent and against such
risks, including fire, as is customary with companies in the same or similar
businesses, (ii) workmen's compensation insurance in the amount required by
applicable law, (iii) public liability insurance, which shall include product
liability insurance, in the amount customary with companies in the same or
similar business against claims for personal injury or death on properties
owned, occupied or controlled by it, and (iv) such other insurance as may be
required by law or as may be reasonably required by the Agent
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(including, without limitation, against larceny, embezzlement or other criminal
misappropriation). Schedule 6.01(r) sets forth a list of all insurance
maintained by each Loan Party on the Interim Facility Effective Date.
(s) Use of Proceeds. The proceeds of the Revolving
Loans shall be used for general corporate purposes (including, without
limitation, payments of fees and expenses to professionals under Sections 330
and 331 of the Bankruptcy Code and administrative expenses of the kind specified
in Section 503(b) of the Bankruptcy Code incurred in the ordinary course of
business of the Companies and the other Receivable Grantors, subject to the
priorities set forth in the definition of "Agreed Administrative Expense
Priorities" herein).
(t) Location of Bank Accounts. Schedule 6.01(t)
hereto sets forth a complete and accurate list as of the Interim Facility
Effective Date of all deposit, checking and other bank accounts, all securities
and other accounts maintained with any broker dealer and all other similar
accounts maintained by each Loan Party, together with a description thereof
(i.e., the bank or broker dealer at which such deposit or other account is
maintained and the account number and the purpose thereof).
(u) Intellectual Property. Each Loan Party owns or
licenses or otherwise has the right to use all licenses, permits, trademarks,
trademark applications, patents, patent applications, service marks, tradenames,
copyrights, copyright applications, franchises, authorizations and other
intellectual property rights that are necessary for the operations of its
businesses, without infringement upon or conflict with the rights of any other
Person with respect thereto, except for such infringements and conflicts which,
individually or in the aggregate, could not have a Material Adverse Effect. Set
forth on Schedule 6.01(u) hereto is a complete and accurate list as of the date
hereof of all trademarks, trademark applications and tradenames, material
licenses, permits, patents, patent applications, service marks, copyrights,
copyright applications, franchises, authorizations and other intellectual
property rights of each Loan Party. No slogan or other advertising device,
product, process, method, substance, part or other material now employed, or now
contemplated to be employed, by any Loan Party infringes upon or conflicts with
any rights owned by any other Person, and no claim or litigation regarding any
of the foregoing is pending or threatened, except for such infringements and
conflicts which could not have, individually or in the aggregate, a Material
Adverse Effect. To the best knowledge of each Loan Party, no patent, invention,
device, application, principle or any statute, law, rule, regulation, standard
or code is pending or proposed, which, individually or in the aggregate, could
have a Material Adverse Effect.
(v) Holding Company and Investment Company Acts. None
of the Loan Parties is (i) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended, or (ii)
an "investment company" or an "affiliated person" or "promoter" of, or
"principal underwriter" of or for, an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended.
(w) Employee and Labor Matters. There is (i) no
unfair labor practice complaint pending or, to the best knowledge of any Loan
Party, threatened against any Loan Party before any Governmental Authority and
no grievance or arbitration proceeding pending or
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threatened against any Loan Party which arises out of or under any collective
bargaining agreement, (ii) no strike, labor dispute, slowdown, stoppage or
similar action or grievance pending or threatened against any Loan Party and
(iii) to the best knowledge of any Loan Party, no union representation question
existing with respect to the employees of any Loan Party and no union organizing
activity taking place with respect to any of the employees of any of them.
(x) Place of Business; Chief Executive Office;
Location of Property. Schedule 6.01(x) hereto sets forth a complete and accurate
list as of the date hereof of (i) each place of business of each Loan Party,
(ii) the chief executive office of each Loan Party and (iii) the location of all
real property and personal property owned or leased by any Loan Party.
(y) Administrative Priority; Lien Priority.
(i) The Obligations of the Companies
constitute allowed administrative expenses in the Chapter 11 Case having
priority in payment over all other administrative expenses and unsecured claims
against the Companies now existing or hereafter arising, of any kind or nature
whatsoever, including without limitation all administrative expenses of the kind
specified in Sections 503(b) and 507(b) of the Bankruptcy Code, subject, as to
priority, only to Carve-Out Expenses having priority over the Obligations to the
extent set forth in the Agreed Administrative Expense Priorities, provided that
such administrative priority shall not apply to causes of action arising under
Section 544, 545, 547, 548, 549, 550, 551 or 553 of the Bankruptcy Code.
(ii) On and after the Initial Revolving Loan
Date, the Lien of the Agent on the Collateral owned by the Companies shall be a
valid and perfected first priority Lien, provided that the Liens and security
interests of the Agent shall be subject to the payment of the Carve-Out Expenses
having priority over the Obligations to the extent set forth in the definition
of Agreed Administrative Expense Priorities.
(iii) The Interim Bankruptcy Court Order or
the Final Bankruptcy Court Order, as the case may be, is in full force and
effect, and has not been reversed, stayed, modified or amended absent the
consent of the Agent and the Companies.
ARTICLE VII
COVENANTS
SECTION 7.01. Affirmative Covenants. So long as any principal
of or interest on any Revolving Loan or any other Obligation (whether or not
due) shall remain unpaid or any Lender shall have any Revolving Credit
Commitment hereunder, the Parent will, unless the Required Lenders shall
otherwise consent in writing:
(a) Reporting Requirements. Furnish to the Agent and
each Lender:
(i) as soon as available and in any event
within 45 days after the end of each fiscal quarter of the Parent, consolidated
balance sheets, consolidated and consolidating
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(by division) statements of operations and retained earnings and consolidated
statements of cash flows of the Parent and its Subsidiaries as at the end of
such quarter, and for the period commencing at the end of the immediately
preceding Fiscal Year and ending with the end of such quarter, setting forth in
each case in comparative form the figures for the corresponding date or period
of the immediately preceding Fiscal Year, all in reasonable detail and certified
by an Authorized Officer as fairly presenting, in all material respects, the
financial position of the Parent and its Subsidiaries as of the end of such
quarter and the results of operations and cash flows of the Parent and its
Subsidiaries for such quarter, in accordance with GAAP applied in a manner
consistent with that of the most recent audited financial statements of the
Parent and its Subsidiaries furnished to the Lenders, subject to normal year-end
adjustments;
(ii) as soon as available, and in any event
within 90 days after the end of each Fiscal Year consolidated balance sheets,
consolidated and consolidating (by division) statements of operations and
retained earnings and consolidated statements of cash flows of the Parent and
its Subsidiaries as at the end of such Fiscal Year, setting forth in comparative
form the corresponding figures for the immediately preceding Fiscal Year, all in
reasonable detail and prepared in accordance with GAAP, and, in the case of
audited statements, accompanied by a report and an opinion, prepared in
accordance with generally accepted auditing standards, of independent certified
public accountants of recognized standing selected by the Parent and
satisfactory to the Agent (which opinion shall be without (A) any qualification
or exception as to the scope of such audit or (B) any qualification which
relates to the treatment or classification of any item and which, as a condition
to the removal of such qualification, would require an adjustment to such item,
the effect of which would be to cause any noncompliance with the provisions of
Section 7.02(m) or 7.02(n)), together with a written statement of such
accountants (1) to the effect that, in making the examination necessary for
their certification of such financial statements, they have not obtained any
knowledge of the existence of an Event of Default or a Default and (2) if such
accountants shall have obtained any knowledge of the existence of an Event of
Default or such Default, describing the nature thereof;
(iii) as soon as available, and in any event
within 30 days of the end of each fiscal month of the Parent and its
Subsidiaries internally prepared consolidated balance sheets, consolidated and
consolidating (by division) statements of operations and consolidated statements
of cash flows for such fiscal month of the Parent and its Subsidiaries for such
fiscal month and for the period from the beginning of such Fiscal Year to the
end of such fiscal month, all in reasonable detail and certified by an
Authorized Officer as fairly presenting, in all material respects, the financial
position of the Parent and its Subsidiaries as of the end of such fiscal month
and the results of operations and cash flows of the Parent and its Subsidiaries
for such fiscal month, in accordance with GAAP applied in a manner consistent
with that of the most recent audited financial statements furnished to the
Lenders, subject to normal year-end adjustments;
(iv) simultaneously with the delivery of the
financial statements of the Parent required by clauses (i), (ii) and (iii) of
this Section 7.01(a), a certificate of an Authorized Officer (A) stating that
such Authorized Officer has reviewed the provisions of this Agreement and the
other Loan Documents and has made or caused to be made under his or her
supervision a review of the condition and operations of the Parent and its
Subsidiaries during the period covered by such financial statements with a view
to determining whether the Parent and its
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Subsidiaries were in compliance with all of the provisions of such Loan
Documents at the times such compliance is required by the Loan Documents, and
that such review has not disclosed, and such Authorized Officer has no knowledge
of, the existence during such period of an Event of Default or Default or, if an
Event of Default or Default existed, describing the nature and period of
existence thereof and the action which the Parent and its Subsidiaries propose
to take or have taken with respect thereto, (B) attaching a schedule showing the
calculations specified in Sections 7.02(m) or 7.02(n) and (C) stating that
attached thereto is a description in reasonable detail of all inventory of the
Borrower and its Subsidiaries in the form of the inventory report by location as
of July 31, 2000 previously furnished to the Agent;
(v) as soon as available and in any event
within 15 days after the end of each month, (A) a Borrowing Base Certificate,
supported by schedules showing the derivation thereof and containing such detail
and other information as the Agent may request from time to time provided, that
(x) the Borrowing Base set forth in the Borrowing Base Certificate shall be
effective from and including the date such Borrowing Base Certificate is duly
received by the Agent but not including the date on which a subsequent Borrowing
Base Certificate is received by the Agent, unless the Agent disputes the
eligibility of any property for inclusion in the calculation of the Borrowing
Base or the valuation thereof by notice of such dispute to the Borrower and (y)
in the event of any dispute about the eligibility of any property for inclusion
in the calculation of the Borrowing Base or the valuation thereof, the Agent's
good faith judgment shall control and (B) an aging schedule of the Accounts
Receivable of the Borrower and its Subsidiaries in the form of the aging
schedule of Accounts Receivable dated July 31, 2000 previously furnished to the
Agent;
(vi) on or before the 30th day of each
fiscal quarter, financial projections supplementing and superseding the
financial projections for such period referred to in Section 6.01(g)(ii),
prepared on a monthly basis and otherwise in form and substance satisfactory to
the Agent, for each remaining quarterly period prior to the Final Maturity Date,
all such financial projections to be reasonable, to be prepared on a reasonable
basis and in good faith, and to be based on assumptions believed by the Parent
to be reasonable at the time made and from the best information then available
to the Parent;
(vii) promptly after filing thereof, copies
of all pleadings, motions, applications, financial information and other papers
and documents filed by the Loan Party in the Chapter 11 Cases, which such papers
and documents shall also be given or served on the Agent's counsel;
(viii) promptly after the sending thereof,
copies of all written reports given by the Loan Party to any official or
unofficial creditors' committee in the Chapter 11 Cases, provided that the Loan
Party may redact confidential information contained in any such report if it
provides a summary of the nature of the information redacted to the Agent;
(ix) promptly after submission to any
Government Authority unless prohibited by applicable law, all documents and
information furnished to such Government Authority in connection with any
investigation of any Loan Party other than routine inquiries by such
Governmental Authority;
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(x) as soon as possible, and in any event
within three days after the occurrence of an Event of Default or Default or the
occurrence of any event or development that could have a Material Adverse
Effect, the written statement of an Authorized Officer setting forth the details
of such Event of Default, Default, other event or Material Adverse Effect and
the action which the Parent and its Subsidiaries propose to take with respect
thereto;
(xi) (A) as soon as possible and in any
event (1) within 10 days after any Loan Party or any ERISA Affiliate thereof
knows or has reason to know that any Termination Event described in clause (i)
of the definition of Termination Event with respect to any Employee Plan has
occurred, (2) within 10 days after any Borrower or any ERISA Affiliate thereof
knows or has reason to know that any other Termination Event with respect to any
Employee Plan has occurred, or (3) within 10 days after any Loan Party or any
ERISA Affiliate thereof knows or has reason to know that an accumulated funding
deficiency has been incurred or an application has been made to the Secretary of
the Treasury for a waiver or modification of the minimum funding standard
(including installment payments) or an extension of any amortization period
under Section 412 of the Code with respect to an Employee Plan, a statement of
an Authorized Officer setting forth the details of such occurrence and the
action, if any, which such Loan Party or such ERISA Affiliate proposes to take
with respect thereto, (B) promptly and in any event within three days after
receipt thereof by any Loan Party or any ERISA Affiliate thereof from the PBGC,
copies of each notice received by any Loan Party or any ERISA Affiliate thereof
of the PBGC's intention to terminate any Plan or to have a trustee appointed to
administer any Plan, (C) promptly and in any event within 10 days after the
filing thereof with the Internal Revenue Service if requested by the Agent,
copies of each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) with respect to each Employee Plan and Multiemployer Plan, (D)
promptly and in any event within 10 days after any Loan Party or any ERISA
Affiliate thereof knows or has reason to know that a required installment within
the meaning of Section 412 of the Code has not been made when due with respect
to an Employee Plan, (E) promptly and in any event within three days after
receipt thereof by any Loan Party or any ERISA Affiliate thereof from a sponsor
of a Multiemployer Plan or from the PBGC, a copy of each notice received by any
Loan Party or any ERISA Affiliate thereof concerning the imposition or amount of
withdrawal liability under Section 4202 of ERISA or indicating that such
Multiemployer Plan may enter reorganization status under Section 4241 of ERISA,
and (F) promptly and in any event within 10 days after any Loan Party or any
ERISA Affiliate thereof send notice of a plant closing or mass layoff (as
defined in WARN) to employees, copies of each such notice sent by such Loan
Party or such ERISA Affiliate thereof;
(xii) promptly after the commencement
thereof but in any event not later than five days after service of process with
respect thereto on, or the obtaining of knowledge thereof by, any Loan Party,
notice of each action, suit or proceeding before any court or other Governmental
Authority or any arbitrator which, if adversely determined, could have a
Material Adverse Effect;
(xiii) promptly after the sending or filing
thereof, copies of all statements, reports and other information any Loan Party
sends to any holders of its Indebtedness or its securities or files with the SEC
or any national (domestic or foreign) securities exchange, provided that the
Loan Party may redact confidential information contained in any such statement,
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report or other information if it provides a summary of the nature of the
information redacted to the Agent;
(xiv) promptly upon receipt thereof, copies
of all financial reports including, without limitation, management letters), if
any, submitted to any Loan Party by its auditors in connection with any annual
or interim audit of the books thereof; and
(xv) promptly upon request, such other
information concerning the condition or operations, financial or otherwise, of
any Loan Party as the Agent may from time to time may reasonably request.
(b) Additional Guaranties and Collateral Security.
Cause each of its Subsidiaries not in existence on the Effective Date to execute
and deliver to the Agent promptly and in any event within three days after the
formation, acquisition or change in status thereof (A) a Supplemental Agreement,
together with (1) certificates evidencing all of the Capital Stock of such
Subsidiary and any Person owned by such Subsidiary, (2) undated stock powers
executed in blank with signature guaranteed, (3) such financing statements as
the Agent may require and (4) such opinion of counsel and such approving
certificate of such Subsidiary as the Agent may require, and (B) such other
agreements, instruments, approvals, legal opinions or other documents reasonably
requested by the Agent in order to create, perfect, establish the first priority
of or otherwise protect any Lien purported to be covered by the Pledge Agreement
or the Security Agreement or otherwise to effect the intent that such Subsidiary
shall become bound by all of the terms, covenants and agreements contained in
the Loan Documents and that all property and assets of such Subsidiary shall
become Collateral for the Obligations.
(c) Compliance with Laws, Etc. Comply, and cause each
of its Subsidiaries to comply, in all material respects with all applicable
laws, rules, regulations and orders (including, without limitation, all
Environmental Laws), such compliance to include, without limitation, (i) paying
before the same become delinquent all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or upon any of
its properties, and (ii) paying all lawful claims which if unpaid might become a
Lien or charge upon any of its properties, except to the extent contested in
good faith by proper proceedings which stay the imposition of any penalty, fine
or Lien resulting from the non-payment thereof and with respect to which
adequate reserves have been set aside for the payment thereof.
(d) Preservation of Existence, Etc. Except to the
extent permitted by Section 7.02(d) and except as disclosed in writing to the
Agent prior to the Interim Facility Effective Date, maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, their existence, rights
and privileges, and become or remain duly qualified and in good standing in each
jurisdiction in which the character of the properties owned or leased by them or
in which the transaction of their business makes such qualification necessary.
(e) Keeping of Records and Books of Account. Keep,
and cause each of its Subsidiaries to keep, adequate records and books of
account, with complete entries made in accordance with GAAP.
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(f) Inspection Rights. Permit, and cause each of its
Subsidiaries to permit, the Agent or representatives thereof at any time and
from time to time during normal business hours and, in the absence of a
continuing Event of Default, upon reasonable prior notice, at the expense of the
Borrower, to examine and make copies of and abstracts from their records and
books of account, to visit and inspect their properties, to verify materials,
leases, notes, accounts receivable, deposit accounts and other assets of the
Loan Parties and their Subsidiaries, to conduct audits, physical counts,
valuations, appraisals, environmental assessments or examinations and to discuss
their affairs, finances and accounts with any of the directors, officers,
managerial employees, independent accountants or other representatives thereof.
(g) Maintenance of Properties, Etc. Maintain and
preserve, and cause each of their Subsidiaries to maintain and preserve, all of
its properties which are necessary or useful in the proper conduct of their
business in good working order and condition, ordinary wear and tear excepted,
and comply, and cause each of their Subsidiaries to comply, at all times with
the provisions of all leases to which each of them is a party as lessee or under
which each of them occupies property, so as to prevent any loss or forfeiture
thereof or thereunder, in each case, other than sales of property or rejection
of leases approved by the Bankruptcy Court and otherwise permitted by the terms
of this Agreement.
(h) Maintenance of Insurance. Maintain, and cause
each of its Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations (including, without limitation,
comprehensive general liability, hazard, rent and business interruption
insurance) with respect to their properties (including all real properties
leased or owned by them) and business, in such amounts and covering such risks
as is required by any Governmental Authority having jurisdiction with respect
thereto or as is carried generally in accordance with sound business practice by
companies in similar businesses similarly situated and in any event in amount,
adequacy and scope reasonably satisfactory to the Agent. All policies covering
the Collateral are to be made payable to the Agent for the benefit of the
Lenders, as its interests may appear, in case of loss, under a standard
non-contributory "lender" or "secured party" clause and are to contain such
other provisions as the Agent may require to fully protect the Lenders' interest
in the Collateral and to any payments to be made under such policies. All
certificates of insurance are to be delivered to the Agent and the policies are
to be premium prepaid, with the loss payable and additional insured endorsement
in favor of Agent and such other Persons as the Agent may designate from time to
time, and shall provide for not less than 30 days' prior written notice to the
Agent of the exercise of any right of cancellation. If the Loan Parties or any
of their Subsidiaries fail to maintain such insurance, the Agent may arrange for
such insurance, but at the Borrower's expense and without any responsibility on
the Agent's part for obtaining the insurance, the solvency of the insurance
companies, the adequacy of the coverage, or the collection of claims. Upon the
occurrence of an Event of Default, the Agent shall have the sole right, in the
name of the Lenders, the Loan Parties and their Subsidiaries, to file claims
under any insurance policies, to receive, receipt and give acquittance for any
payments that may be payable thereunder, and to execute any and all
endorsements, receipts, releases, assignments, reassignments or other documents
that may be necessary to effect the collection, compromise or settlement of any
claims under any such insurance policies.
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(i) Obtaining of Permits, Etc. Obtain, maintain and
preserve, and cause each of its Subsidiaries to obtain, maintain and preserve,
all permits, licenses, authorizations, approvals, entitlements and
accreditations which are necessary or useful in the proper conduct of its
business and become or remain, and cause each of its Subsidiaries to become or
remain, duly qualified and in good standing in each jurisdiction in which the
character of the properties owned or leased by it or in which the transaction of
its business makes such qualification necessary, except where all such failure
to comply with this Section 7.01(i) could not have a Material Adverse Effect.
(j) Environmental. (i) Keep any property either owned
or operated by them or any of its Subsidiaries free of any Environmental Liens;
(ii) comply, and cause its Subsidiaries to comply, in all material respects with
Environmental Laws and provide to the Agent documentation of such compliance
which the Agent reasonably requests; (iii) immediately notify the Agent of any
Release of a Hazardous Material in excess of any reportable quantity from or
onto property owned or operated by the Loan Parties or any of their Subsidiaries
and take any Remedial Actions required to abate said Release; (iv) promptly
provide the Agent with written notice within 10 days of the receipt of any of
the following: (A) notice that an Environmental Lien has been filed against any
property of any Loan Party or any of its Subsidiaries; (B) commencement of any
Environmental Action or notice that an Environmental Action will be filed
against any Loan Party or any of its Subsidiaries; and (C) notice of a
violation, citation or other administrative order which could have a Material
Adverse Effect and (v) defend, indemnify and hold harmless the Agent and the
Lenders and their transferees, and their respective employees, agents, officers
and directors, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs or expenses (including, without
limitation, attorney and consultant fees, investigation and laboratory fees,
court costs and litigation expenses) arising out of (A) the presence, disposal,
release or threatened release of any Hazardous Materials on any property at any
time owned or occupied by any Loan Party or any of its Subsidiaries (or its
respective predecessors in interest or title), (B) any personal injury
(including wrongful death) or property damage (real or personal) arising out of
or related to such Hazardous Materials, (C) any investigation, lawsuit brought
or threatened, settlement reached or government order relating to such Hazardous
Materials and/or (D) any violation of any Environmental Law.
(k) Further Assurances. Take such action and execute,
acknowledge and deliver, and cause each of its Subsidiaries to take such action
and execute, acknowledge and deliver, at their sole cost and expense, such
agreements, instruments or other documents as the Agent may reasonably require
from time to time in order (i) to carry out more effectively the purposes of
this Agreement and the other Loan Documents, (ii) to subject to valid and
perfected first priority Liens any of the Collateral or any other property of
the Guarantors and their Subsidiaries, (iii) to establish and maintain the
validity and effectiveness of any of the Loan Documents and the validity,
perfection and priority of the Liens intended to be created thereby, and (iv) to
better assure, convey, grant, assign, transfer and confirm unto the Agent the
rights now or hereafter intended to be granted to the Agent and the Lenders
under this Agreement or any other Loan Document. The assurances contemplated by
this Section 7.01(k) shall be given under applicable nonbankruptcy law (to the
extent not inconsistent with the Bankruptcy Code and orders of the Bankruptcy
Court) as well as the Bankruptcy Code, it being the intention of the parties
that the Agent may request assurances under applicable nonbankruptcy law, and
such request shall be complied with (if otherwise made in good faith by the
Agent) whether or not the Interim
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Bankruptcy Court Order or the Final Bankruptcy Court Order, as the case may be,
is in force and whether or not dismissal of the Chapter 11 Cases or any other
action by the Bankruptcy Court is imminent, likely or threatened.
(l) Collateral Records. Execute and deliver and cause
each of its Subsidiaries to execute and deliver, to the Agent for the benefit of
the Lenders from time to time, solely for the Agent's convenience in maintaining
a record of Collateral, such written statements and schedules as the Agent may
reasonably require, designating, identifying or describing the Collateral.
(m) Borrowing Base. Maintain all Revolving Loans in
compliance with the then current Borrowing Base.
SECTION 7.02. Negative Covenants. So long as any principal of
or interest on any Revolving Loan or any other Obligation (whether or not due)
shall remain unpaid or any Lender shall have any Revolving Credit Commitment
hereunder, the Parent shall not, unless the Required Lenders shall otherwise
consent in writing:
(a) Interim Bankruptcy Court Order; Final Bankruptcy
Court Order; Administrative Priority; Lien Priority; Payment of Claims.
(i) Any time seek, consent to or suffer to
exist any modification, stay, vacation or amendment of the Interim Bankruptcy
Court Order or the Final Bankruptcy Court Order except for modifications and
amendments agreed to by the Agent;
(ii) Any time suffer to exist a priority for
any administrative expense or unsecured claim against the Borrower (now existing
or hereafter arising of any kind or nature whatsoever, including without
limitation any administrative expenses of the kind specified in Sections 503(b)
and 507(b) of the Bankruptcy Code) equal or superior to the priority of the
Lenders in respect of the Obligations, except for the Carve-Out Expenses having
priority over the Obligations to the extent set forth in the definition of
Agreed Administrative Expense Priorities, provided that such administrative
priority shall not apply to causes of action arising under Section 544, 545,
547, 548, 549, 550, 551 or 553 of the Bankruptcy Code;
(iii) Any time suffer to exist any Lien on
the Collateral having a priority equal or superior to the Lien in favor of the
Agent in respect of the Collateral, provided that (A) the Liens of the Agent
shall be subject to the payment of the Carve-Out Expenses having priority over
the Obligations to the extent set forth in the definition of Agreed
Administrative Expense Priorities and (B) Permitted Liens described in clause
(d) or (h) of the definition of such term in Section 1.01 may have priority over
the Lien in favor of the Agent on the cash described in such clause; and
(iv) Pay any administrative expense claims
except (A) Priority Professional Expenses and other payments pursuant to
sub-clause (i) of clause "first" of the definition of the term "Agreed
Administrative Expense Priorities", (B) any Obligations due and payable
hereunder, and (C) other administrative expense claims incurred in the ordinary
course of
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the business of the Borrower or its respective Chapter 11 Cases, in each case to
the extent and having the order of priority set forth in the Agreed
Administrative Expense Priorities.
(b) Liens, Etc. Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Lien upon or with respect to any of its properties, whether now owned
or hereafter acquired, to file or suffer to exist under the Uniform Commercial
Code or any similar law or statute of any jurisdiction, a financing statement
(or the equivalent thereof) that names any Loan Party or any of its Subsidiaries
as debtor, to sign or suffer to exist any security agreement authorizing any
secured party thereunder to file such financing statement (or the equivalent
thereof), to sell any of its property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable) with recourse to any Loan Party or any
of its Subsidiaries or assign or otherwise transfer, or permit any of its
Subsidiaries to assign or otherwise transfer, any account or other right to
receive income, other than Permitted Liens.
(c) Indebtedness. Create, incur, assume, guarantee or
suffer to exist, or otherwise become or remain liable with respect to, or permit
any of its Subsidiaries to create, incur, assume, guarantee or suffer to exist
or otherwise become or remain liable with respect to, any Indebtedness other
than Permitted Indebtedness.
(d) Fundamental Changes. Wind-up, liquidate or
dissolve (or permit or suffer any thereof) or merge, consolidate or amalgamate
with any Person, convey, sell, lease or sublease, transfer or otherwise dispose
of, whether in one transaction or a series of related transactions, all or any
part of its business, property or assets, whether now owned or hereafter
acquired (or agree to do any of the foregoing), or purchase or otherwise
acquire, whether in one transaction or a series of related transactions, all or
substantially all of the assets of any Person (or any division thereof) (or
agree to do any of the foregoing), or permit any of its Subsidiaries to do any
of the foregoing; provided, however, that any of the Loan Parties and their
Subsidiaries may (A) sell or lease inventory in the ordinary course of business,
(B) dispose of obsolete or worn-out equipment in the ordinary course of
business, and (C) sell or otherwise dispose of other property or assets for cash
in an aggregate amount not less than the fair market value of such property or
assets, provided that the consent of the Agent shall be required for any sale or
disposition referred to in clause (B) or (C) in which the Net Cash Proceeds
exceed $500,000 in the aggregate provided that, in the case of all sales or
other dispositions permitted by this Section 7.02(d) the Parent complies with
the terms of Section 2.05(c)(iii).
(e) Change in Nature of Business. Make, or permit any
of its Subsidiaries to make, any change in the nature of its business as carried
on at the date hereof.
(f) Loans, Advances, Investments, Etc. Make or commit
or agree to make any loan, advance guarantee of obligations, other extension of
credit or capital contributions to, or hold or invest in or commit or agree to
hold or invest in, or purchase or otherwise acquire or commit or agree to
purchase or otherwise acquire any shares of the Capital Stock, bonds, notes,
debentures or other securities of, or make or commit or agree to make any other
investment in, any other Person, or purchase or own any futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a
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futures contract, or permit any of its Subsidiaries to do any of the foregoing,
except for: (i) Permitted Investments, (ii) Investments existing on the date
hereof, as set forth on Schedule 7.02(f) hereto, but not any increase in the
amount thereof as set forth in such Schedule or any other modification of the
terms thereof and (iii) temporary loans and advances by any Loan Party to
another Loan Party, made in the ordinary course of business.
(g) Lease Obligations. Create, incur or suffer to
exist, or permit any of its Subsidiaries to create, incur or suffer to exist,
any obligations as lessee (i) for the payment of rent for any real or personal
property in connection with any sale and leaseback transaction, or (ii) for the
payment of rent for any real or personal property under leases or agreements to
lease other than Capitalized Lease Obligations which would not cause the
aggregate amount of all obligations under Capitalized Leases entered into after
the Effective Date owing by the Loan Parties and their Subsidiaries in any
Fiscal Year to exceed the amounts set forth in subsection (h) of this Section
7.02.
(h) Capital Expenditures. Make or commit or agree to
make, or permit any of their Subsidiaries to make or commit or agree to make,
any Capital Expenditure (by purchase made or Capitalized Lease entered into
after the Filing Date) that would cause the aggregate amount of all such Capital
Expenditures arising from purchases made or Capitalized Leases entered into
after the Filing Date by the Loan Parties and their Subsidiaries to exceed (i)
$9,300,000 during the period from the Filing Date through August 15, 2001 or
(ii) $775,000 in any calendar month ending during the period from the Effective
Date through August 15, 2001, provided, with respect to this clause (ii), that
so long as the aggregate amount of all such Capital Expenditures does not exceed
$2,500,000 in any such month, (A) any unused amount from any such month may be
carried forward to any succeeding month and (B) the available amount from one or
more future month may be added to the amount available under this Section
7.02(h) for the then current month.
(i) Restricted Payments. (i) Declare or pay any
dividend or other distribution, direct or indirect, on account of its Capital
Stock, (ii) make any repurchase, redemption, retirement, defeasance, sinking
fund or similar payment, purchase or other acquisition for value, direct or
indirect, of its Capital Stock, (iii) make any payment to retire, or to obtain
the surrender of, any outstanding warrants, options or other rights for the
purchase or acquisition of shares of any class of its Capital Stock, (iv) return
any of capital to any of its holders of its Capital Stock, or make any other
distribution of property, assets, shares of Capital Stock, warrants, rights,
options, obligations or securities thereto as such or (v) pay any management
fees or any other fees or expenses (including the reimbursement thereof by any
Loan Party or any of its Subsidiaries) pursuant to any management, consulting or
other services agreement to any of the holders of its Capital Stock or other
Affiliates, or to any Party, or permit any of its Subsidiaries to do any of the
foregoing except to the Parent or a wholly-owned Subsidiary of the Parent.
(j) Payments. Except as permitted by an order of the
Bankruptcy Court and permitted by the Agent, make any payment of principal or
interest or otherwise on account of any Indebtedness or trade payable incurred
prior to the Filing Date, provided that such payments may be made: (i) to the
holders of, or in respect of, wage, salary, commission and employee benefit
obligations (including vacation and sick pay and expense reimbursements) which
arose prior to the
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Filing Date; (ii) to lessors and non-debtor parties to executory contracts in
connection with the assumption of such leases and contracts under Section 365 of
the Bankruptcy Code; (iii) in respect of workers' compensation benefits and
liability and property insurance policies of the Borrower in an aggregate amount
not to exceed an amount consistent with historical practices; (iv) with respect
to payroll taxes, garnishment payments, sales taxes or other trust fund
disbursements in accordance with past practice of the Borrower; and (v) with
respect to gift certificates, layaways, credit refunds and other similar
customer obligations, in each case subject to approval of the Bankruptcy Court.
(k) Transactions with Affiliates. Except as otherwise
disclosed to and approved by the Agent in writing prior to the Effective Date,
enter into, renew, extend or be a party to, or permit any of its Subsidiaries to
enter into, renew, extend or be a party to any transaction or series of related
transactions (including, without limitation, the purchase, sale, lease, transfer
or exchange of property or assets of any kind or the rendering of services of
any kind) with any Affiliate, except (i) in the ordinary course of business in a
manner and to an extent consistent with past practice and necessary or desirable
for the prudent operation of its business, for fair consideration and on terms
no less favorable to the Loan Parties or such Subsidiaries than would be
obtainable in a comparable arm's length transaction with a Person that is not an
Affiliate thereof and (ii) transactions among the Loan Parties.
(l) Environmental. Permit the use, handling,
generation, storage, treatment, release or disposal of Hazardous Materials at
any property owned or leased by the Loan Parties or any of its Subsidiaries
except in compliance with Environmental Laws and so long as such use, handling,
generation, storage, treatment, release or disposal of Hazardous Materials does
not result in a Material Adverse Effect.
(m) Minimum EBITDA. Permit EBITDA of the Borrower for
any calendar month ending after the Effective Date to be less than the
corresponding amount set forth below:
<TABLE>
<CAPTION>
Month Minimum EBITDA
--------------- --------------
<S> <C>
September, 2000 $1,000,000
October, 2000 $1,000,000
November, 2000 $1,000,000
December, 2000 $1,000,000
January, 2001 $1,800,000
February, 2001 $1,300,000
March, 2001 $1,800,000
April, 2001 $1,700,000
May, 2001 $1,700,000
June, 2001 $1,500,000
July, 2001 $1,800,000
</TABLE>
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(n) Minimum Eligible Accounts Receivable. Permit the
Net Amount of Eligible Accounts Receivable at any time during any calendar month
ending after the Effective Date to be less than the corresponding amount set
forth below:
<TABLE>
<CAPTION>
Minimum Net Amount of
Month Eligible Accounts Receivable
--------------- ----------------------------
<S> <C>
September, 2000 $45,000,000
October, 2000 $45,000,000
November, 2000 $45,000,000
December, 2000 $45,000,000
January, 2001 $45,000,000
February, 2001 $45,000,000
March, 2001 $45,000,000
April, 2001 $45,000,000
May, 2001 $45,000,000
June, 2001 $45,000,000
July, 2001 $45,000,000
</TABLE>
ARTICLE VIII
CASH MANAGEMENT
The Companies shall (i) cause all cash and all proceeds from
Accounts Receivable to be deposited into the Depository Accounts in the ordinary
course of business of the Borrower and its Subsidiaries consistent with past
practice, (ii) cause all funds in the Depository Accounts to be transferred into
the Cash Concentration Account on a daily basis and (iii) upon demand by the
Agent during the continuance of an Event of Default and upon five (5) Business
Days notice by the Agent to the Borrower in the absence of a continuing Event of
Default (A) cause all cash deposited in the Cash Concentration Account to be
sent by wire transfer to the Agent Account on a daily basis, (B) instruct the
Agent to cause all funds transferred to the Agent Account to be credited to the
Loan Account and applied to reduce the Obligations outstanding from time to
time, and (C) take all such actions as the Agent deems necessary or advisable to
send all cash, all remittances or other proceeds of Collateral to the Agent
Account to be applied to the Obligations. The Companies shall promptly, and in
any event not later than five (5) days after the opening of any such new
account, notify the Agent in writing of the creation of any new Depository
Account and shall within five (5) days of a request by the Agent execute and
deliver to the Agent a notice letter, in form and substance reasonably
satisfactory to the Agent. Upon payment in full of all of the Obligations and
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the termination of all of the Revolving Credit Commitments the Agent will, upon
the request and at the expense of the Borrower, return all cash in the Agent
Account that has not been applied in accordance with this Article VIII and
Section 9.01 to the Borrower or to such other Person as may be entitled thereto.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.01. Events of Default. If any of the following
Events of Default shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of
or interest on any Loan, any Agent Advance or any fee, indemnity or other amount
payable under this Agreement or any other Loan Document when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise); or
(b) any representation or warranty made or deemed
made by or on behalf of any Loan Party or by any officer of the foregoing under
or in connection with any Loan Document or under or in connection with any
report, certificate, or other document delivered to the Agent or the Lenders
pursuant to any Loan Document shall have been incorrect in any material respect
when made or deemed made;
(c) any Loan Party shall fail to perform or comply
with any covenant or agreement contained in (i) subsection (a), (b), (d) or (m)
of Section 7.01, Section 7.02 or Article VIII, or any Loan Party shall fail to
perform or comply with any covenant or agreement contained in Section 3.01(c) or
(d) of the Pledge Agreement or Section 4.08 of the Security Agreement or Section
4.04 of the Security Agreement - Patents and Trademarks, or (ii) subsection (c),
(e), (f), (g), (h), (i), (j), (k) or (l) of Section 7.01, and such failure, if
capable of being remedied, shall remain unremedied for five days after the
earlier of the date a senior officer of any Loan Party becomes aware of such
failure and the date written notice of such default shall have been given by the
Agent to such Loan Party; or
(d) any Loan Party shall fail to perform or comply
with any other term, covenant or agreement contained in any Loan Document to be
performed or observed by it and, except as set forth in subsections (a) and (c)
of this Section 9.01, such failure, if capable of being remedied, shall remain
unremedied for 15 days after the earlier of the date a senior officer of any
Loan Party becomes aware of such failure and the date written notice of such
default shall have been given by the Agent to such Loan Party; or
(e) an order with respect to either of the Chapter 11
Cases shall be entered by the Bankruptcy Court appointing, or either Company
shall file an application for an order with respect to any Chapter 11 Case
seeking the appointment of, (i) a trustee under Section 1104, or (ii) an
examiner with enlarged powers relating to the operation of the business
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(powers beyond those set forth in Section 1106(a)(3) and (4) of the Bankruptcy
Code) under Section 1106(b) of the Bankruptcy Code; or
(f) an order with respect to either of the Chapter 11
Cases shall be entered by the Bankruptcy Court converting such Chapter 11 Case
to a chapter 7 case; or
(g) an order shall be entered by the Bankruptcy Court
confirming a plan of reorganization in either of the Chapter 11 Cases which does
not contain a provision for termination of the Revolving Credit Commitment and
payment in full in cash of all Obligations on or before the effective date of
such plan or plans upon entry thereof; or
(h) an order shall be entered by the Bankruptcy Court
dismissing either of the Chapter 11 Cases which does not contain a provision for
termination of the Revolving Credit Commitments, and payment in full in cash of
all Obligations upon entry thereof; or
(i) an order with respect to any of the Chapter 11
Cases shall be entered by the Bankruptcy Court without the express prior written
consent of the Agent, (i) to revoke, reverse, stay, modify, supplement or amend
the Interim Bankruptcy Court Order or the Final Bankruptcy Court Order or (ii)
to permit any administrative expense or any claim (now existing or hereafter
arising, of any kind or nature whatsoever) to have administrative priority as to
the Borrower equal or superior to the priority of the Lender in respect of the
Obligations, except for allowed administrative expenses having priority over the
Obligations to the extent set forth in the Agreed Administrative Expense
Priorities, or (iii) to grant or permit the grant of a Lien on the Collateral
other than a Permitted Lien; or
(j) an application for any of the orders described in
clauses (e), (f), (g), (h) or (i) above shall be made by a Person other than a
Company and such application is not contested by the Companies in good faith and
the relief requested is granted in an order that is not stayed pending appeal;
or
(k) an order shall be entered by the Bankruptcy Court
that is not stayed pending appeal granting relief from the automatic stay to any
creditor of a Company with respect to any claim in an amount equal to or
exceeding $500,000 in the aggregate; or
(l) any provision of any Loan Document shall at any
time for any reason (other than pursuant to the express terms thereof) cease to
be valid and binding on or enforceable against any Loan Party intended to be a
party thereto, or the validity or enforceability thereof shall be contested by
any party thereto, or a proceeding shall be commenced by any Loan Party or any
Governmental Authority having jurisdiction over it, seeking to establish the
invalidity or unenforceability thereof, any Loan Party shall deny in writing
that it has any liability or obligation purported to be created under any Loan
Document; or
(m) the Pledge Agreement, the Security Agreement or
any other security document, after delivery thereof pursuant hereto, shall for
any reason fail or cease to create a valid and perfected and, except to the
extent permitted by the terms hereof or thereof, first priority Lien in
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favor of the Agent for the benefit of the Lenders on any Collateral purported to
be covered thereby; or
(n) any Loan Party or any of its ERISA Affiliates
shall have made a complete or partial withdrawal from a Multiemployer Plan, and,
as a result of such complete or partial withdrawal any Loan Party or such ERISA
Affiliate incurs a withdrawal liability in an annual amount exceeding $100,000;
or a Multiemployer Plan enters reorganization status under Section 4241 of
ERISA, and, as a result thereof such Loan Party's, or such ERISA Affiliate's
annual contribution requirement with respect to such Multiemployer Plan
increases in an annual amount exceeding $100,000; or
(o) any Termination Event with respect to any
Employee Plan shall have occurred, and, 30 days after notice thereof shall have
been given to any Loan Party by the Agent, (i) such Termination Event (if
correctable) shall not have been corrected, and (ii) the then current value of
such Employee Plan's vested benefits exceeds the then current value of assets
allocable to such benefits in such Employee Plan by more than $100,000 (or, in
the case of a Termination Event involving liability under Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971
or 4975 of the Code, the liability is in excess of such amount); or
(p) a Change of Control shall have occurred; or
(q) an event or development occurs which has a
Material Adverse Effect;
then, and in any such event, the Agent may, and shall at the request of the
Required Lenders, by notice to the Borrower, (i) terminate the Revolving Credit
Commitments, whereupon the Revolving Credit Commitments shall terminate
immediately, (ii) declare all Revolving Loans then outstanding to be due and
payable, whereupon the aggregate principal of such Revolving Loans, all accrued
and unpaid interest thereon, all fees and all other amounts payable under this
Agreement shall become due and payable immediately, without further order of, or
application to, the Bankruptcy Court, presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by each Loan Party
and (iii) exercise any and all of its other rights and remedies under applicable
law (including, but not limited to, the Bankruptcy Code and the Uniform
Commercial Code), hereunder and under the other Loan Documents.
ARTICLE X
AGENT
SECTION 10.01. Appointment. Each Lender (and each subsequent
holder of any Revolving Credit Note by its acceptance thereof) hereby
irrevocably appoints and authorizes the Agent to perform the duties of the Agent
as set forth in this Agreement including: (i) to receive on behalf of each
Lender any payment of principal of or interest on the Revolving Credit Notes
outstanding hereunder and all other amounts accrued hereunder for the account of
the Lenders and paid to the Agent, and, subject to Section 2.02 of this
Agreement, to distribute promptly to each Lender its Pro Rata Share of all
payments so received (ii) to distribute to each Lender copies of all
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material notices and agreements received by the Agent and not required to be
delivered to each Lender pursuant to the terms of this Agreement, provided that
the Agent shall not have any liability to the Lenders for the Agent's
inadvertent failure to distribute any such notices or agreements to the Lenders
and (iii) subject to Section 10.03, to take such action as the Agent deems
appropriate on its behalf to administer the Loans and the Loan Documents and to
exercise such other powers delegated to the Agent by the terms hereof or the
Loan Documents (including, without limitation, the power to give or to refuse to
give notices, waivers, consents, approvals and instructions and the power to
make or to refuse to make determinations and calculations) together with such
powers as are reasonably incidental thereto to carry out the purposes hereof and
thereof. As to any matters not expressly provided for by this Agreement and the
other Loan Documents (including, without limitation, enforcement or collection
of the Revolving Credit Notes), the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions of the
Required Lenders shall be binding upon all Lenders and all holders of Revolving
Credit Notes.
SECTION 10.02. Nature of Duties. The Agent shall have no
duties or responsibilities except those expressly set forth in this Agreement or
in the Loan Documents. The duties of the Agent shall be mechanical and
administrative in nature. The Agent shall not have by reason of this Agreement
or any Loan Document a fiduciary relationship in respect of any Lender. Nothing
in this Agreement or any of the Loan Documents, express or implied, is intended
to or shall be construed to impose upon the Agent any obligations in respect of
this Agreement or any of the Loan Documents except as expressly set forth herein
or therein. Each Lender shall make its own independent investigation of the
financial condition and affairs of the Loan Parties in connection with the
making and the continuance of the Loans hereunder and shall make its own
appraisal of the creditworthiness of the Loan Parties and the value of the
Collateral, and the Agent shall have no duty or responsibility, either initially
or on a continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
initial Revolving Loan hereunder or at any time or times thereafter, provided
that, upon the reasonable request of a Lender, the Agent shall provide to such
Lender any documents or reports delivered to the Agent by the Loan Parties
pursuant to the terms of this Agreement or any Loan Document. If the Agent seeks
the consent or approval of the Required Lenders to the taking or refraining from
taking any action hereunder, the Agent shall send notice thereof to each Lender.
The Agent shall promptly notify each Lender any time that the Required Lenders
have instructed the Agent to act or refrain from acting pursuant hereto.
SECTION 10.03. Rights, Exculpation, Etc. The Agent and its
directors, officers, agents or employees shall not be liable for any action
taken or omitted to be taken by it under or in connection with this Agreement or
the other Loan Documents. Without limiting the generality of the foregoing, the
Agent (i) may treat the payee of any Revolving Credit Note as the holder thereof
until the Agent receives written notice of the assignment or transfer thereof,
pursuant to Section 11.07 hereof, signed by such payee and in form satisfactory
to the Agent; (ii) may consult with legal counsel (including, without
limitation, counsel to the Agent or counsel to the Loan Parties), independent
public accountants, and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel or experts; (iii) make no warranty or representation
to any Lender and shall not be
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responsible to any Lender for any statements, certificates, warranties or
representations made in or in connection with this Agreement or the other Loan
Documents; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of any Person, the existence
or possible existence of any Default or Event of Default, or to inspect the
Collateral or other property (including, without limitation, the books and
records) of any Person; (v) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; and (vi) shall not be deemed to
have made any representation or warranty regarding the existence, value or
collectibility of the Collateral, the existence, priority or perfection of the
Agent's Lien thereon, or any certificate prepared by any Loan Party in
connection therewith, nor shall the Agent be responsible or liable to the
Lenders for any failure to monitor or maintain any portion of the Collateral.
The Agent shall not be liable for any apportionment or distribution of payments
made in good faith pursuant to Section 2.02(c), and if any such apportionment or
distribution is subsequently determined to have been made in error the sole
recourse of any Lender to whom payment was due but not made, shall be to recover
from other Lenders any payment in excess of the amount which they are determined
to be entitled. The Agent may at any time request instructions from the Lenders
with respect to any actions or approvals which by the terms of this Agreement or
of any of the Loan Documents the Agent is permitted or required to take or to
grant, and if such instructions are promptly requested, the Agent shall be
absolutely entitled to refrain from taking any action or to withhold any
approval under any of the Loan Documents until it shall have received such
instructions from the Required Lenders. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against the Agent as a result
of the Agent acting or refraining from acting under this Agreement, the
Revolving Credit Notes or any of the other Loan Documents in accordance with the
instructions of the Required Lenders.
SECTION 10.04. Reliance. The Agent shall be entitled to rely
upon any written notices, statements, certificates, orders or other documents or
any telephone message believed by it in good faith to be genuine and correct and
to have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the Loan Documents and its duties
hereunder or thereunder, upon advice of counsel selected by it.
SECTION 10.05. Indemnification. To the extent that the Agent
is not reimbursed and indemnified by any Loan Party, the Lenders will reimburse
and indemnify the Agent from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, advances
or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Agent in any way relating to or arising out
of this Agreement or any of the Loan Documents or any action taken or omitted by
the Agent under this Agreement or any of the Loan Documents, in proportion to
each Lender's Pro Rata Share, including, without limitation, advances and
disbursements made pursuant to Section 10.08; provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, advances or
disbursements for which there has been a final judicial determination that such
resulted from the Agent's gross negligence or willful misconduct. The
obligations of the Lenders under this Section 10.05 shall survive the payment in
full of the Revolving Loans and the termination of this Agreement.
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SECTION 10.06. Agent Individually. With respect to its Pro
Rata Share of the Total Revolving Commitment hereunder, the Revolving Loans made
by it and the Revolving Credit Notes issued to or held by it, the Agent shall
have and may exercise the same rights and powers hereunder and is subject to the
same obligations and liabilities as and to the extent set forth herein for any
other Lender or holder of a Revolving Credit Note. The terms "Lenders" or
"Required Lenders" or any similar terms shall, unless the context clearly
otherwise indicates, include the Agent in its individual capacity as a Lender or
one of the Required Lenders. The Agent and its Affiliates may accept deposits
from, lend money to, and generally engage in any kind of banking, trust or other
business with any of the Parent and its Subsidiaries as if it were not acting as
an Agent pursuant hereto without any duty to account to the Lenders.
SECTION 10.07. Successor Agent.
(a) The Agent may resign from the performance of all
its functions and duties hereunder and under the other Loan Documents at any
time by giving at least thirty (30) Business Days' prior written notice to the
Borrower and each Lender. Such resignation shall take effect upon the acceptance
by a successor Agent of appointment pursuant to clauses (b) and (c) below or as
otherwise provided below.
(b) Upon any such notice of resignation, the Required
Lenders shall appoint a successor Agent who, in the absence of a continuing
Event of Default, shall be reasonably satisfactory to the Borrower. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents. After the Agent's resignation hereunder as the
Agent, the provisions of this Article X shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement and the other Loan Documents.
(c) If a successor Agent shall not have been so
appointed within said thirty (30) Business Day period, the retiring Agent shall
then appoint a successor Agent who, if an Event of Default is not continuing,
shall be reasonably satisfactory to the Borrower, who shall serve as Agent until
such time, if any, as the Required Lenders appoint a successor Agent as provided
above.
SECTION 10.08. Collateral Matters.
(a) The Agent may from time to time, during the
occurrence and continuance of an Event of Default, make such disbursements and
advances ("Agent Advances") which the Agent, in its sole discretion, deems
necessary or desirable to preserve or protect the Collateral or any portion
thereof, to enhance the likelihood or maximize the amount of repayment by the
Borrower of the Revolving Loans and other Obligations or to pay any other amount
chargeable to the Borrower pursuant to the terms of this Agreement, including,
without limitation, costs, fees and expenses as described in Section 11.04. The
Agent Advances shall be repayable on demand and be secured by the Collateral.
The Agent Advances shall not constitute Revolving Loans but shall otherwise
constitute Obligations hereunder. The Agent shall notify each Lender
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and the Borrower in writing of each Agent Advance, which notice shall include a
description of the purpose of such Agent Advance. Without limitation to its
obligations pursuant to Section 10.05, each Lender agrees that it shall make
available to the Agent, upon the Agent's demand, in Dollars in immediately
available funds, the amount equal to such Lender's Pro Rata Share of such Agent
Advance. If such funds are not made available to the Agent by such Lender, the
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 the Agent, at the Federal Funds Rate for
three Business Days and thereafter at the Reference Rate.
(b) The Lenders hereby irrevocably authorize the
Agent, at its option and in its discretion, to release any Lien granted to or
held by the Agent upon any Collateral upon termination of the Total Revolving
Credit Commitment and payment and satisfaction of all Revolving Loans and all
other Obligations which have matured and which the Agent has been notified in
writing are then due and payable; or constituting property being sold or
disposed of in the ordinary course of any Loan Party's business and in
compliance with the terms of this Agreement and the other Loan Documents; or
constituting property in which the Loan Parties owned no interest at the time
the Lien was granted or at any time thereafter; or if approved, authorized or
ratified in writing by the Lenders. Upon request by the Agent at any time, the
Lenders will confirm in writing the Agent's authority to release particular
types or items of Collateral pursuant to this Section 10.08(b).
(c) Without in any manner limiting the Agent's
authority to act without any specific or further authorization or consent by the
Lenders (as set forth in Section 10.08(b)), each Lender agrees to confirm in
writing, upon request by the Agent, the authority to release Collateral
conferred upon the Agent under Section 10.08(b). Upon receipt by the Agent of
confirmation from the Lenders of its authority to release any particular item or
types of Collateral, and upon prior written request by any Loan Party, the Agent
shall (and is hereby irrevocably authorized by the Lenders to) execute such
documents as may be necessary to evidence the release of the Liens granted to
the Agent for the benefit of the Lenders upon such Collateral; provided,
however, that (i) the Agent shall not be required to execute any such document
on terms which, in the Agent's opinion, would expose the Agent to liability or
create any obligations or entail any consequence other than the release of such
Liens without recourse or warranty, and (ii) such release shall not in any
manner discharge, affect or impair the Obligations or any Lien upon (or
obligations of any Loan Party in respect of) all interests in the Collateral
retained by any Loan Party.
(d) The Agent shall have no obligation whatsoever to
any Lenders to assure that the Collateral exists or is owned by the Loan Parties
or is cared for, protected or insured or has been encumbered or that the Lien
granted to the Agent pursuant to this Agreement has been properly or
sufficiently or lawfully created, perfected, protected or enforced or is
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
the Agent in this Section 10.08 or in any of the Loan Documents, it being
understood and agreed that in respect of the Collateral, or any act, omission or
event related thereto, the Agent may act in any manner it may deem appropriate,
in its sole discretion, given the Agent's own interest in the Collateral as one
of the Lenders and that the Agent shall have no duty or liability whatsoever to
any other Lender.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing and shall be mailed,
telecopied or delivered,
if to either Company, to it at the following address:
1125 Seventeenth Street,
Suite 2100
Denver, Colorado 80202
Attention: Senior Vice President - Finance
Telephone: 303-292-4973
Telecopier: 303-672-8799
with a copy to:
Kasowitz, Benson, Torres & Friedman LLP
1633 Broadway
New York, New York 10019-6799
Attention: David Friedman, Esq.
Telephone: 212-506-1700
Telecopier: 212-506-1800
if to the Agent, to it at the following address:
Madeleine L.L.C.
450 Park Avenue, 28th Floor
New York, New York 10022
Attention: Mark A. Neporent
Telephone: 212-891-2183
Telecopier: 212-891-1541
with a copy to:
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
Attention: Paul E. Weber, Esq.
Telephone: 212-756-2000
Telecopier: 212-593-5955
if to any Lender, to it at such address as such Lender may
designate in the applicable Assignment and Acceptance.
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or, as to each party, at such other address as shall be
designated by such party in a written notice to the other party complying as to
delivery with the terms of this Section 11.01. All such notices and other
communications shall be effective, (i) if mailed, when received or three days
after deposited in the mails, whichever occurs first, (ii) if telecopied, when
transmitted and confirmation received, or (iii) if delivered, upon delivery,
except that notices to the Agent pursuant to Article II shall not be effective
until received by the Agent.
(b) Nothing in this Agreement or in any other Loan
Document shall be construed to limit or affect the obligation of either Company
or any other Person to serve upon the Lender in the manner prescribed by the
Bankruptcy Code any pleading or notice required to be given to the Lender
pursuant to the Bankruptcy Code.
SECTION 11.02. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or any Revolving Credit Note, and no consent to any
departure by either Company therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Required Lenders and the
Companies, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given provided,
however, that no amendment, waiver or consent shall (i) increase the Revolving
Credit Commitment of any Lender, reduce the principal of, or interest on, the
Revolving Loans payable to any Lender, reduce the amount of any fee payable for
the account of any Lender, or postpone or extend any date fixed for any payment
of principal of, or interest or fees on, the Revolving Loans payable to any
Lender, in each case without the written consent of any Lender affected thereby,
(ii) increase the Total Revolving Credit Commitment without the written consent
of each Lender, (iii) change the percentage of the Revolving Credit Commitments
or of the aggregate unpaid principal amount of the Revolving Credit Notes that
is required for the Lenders or any of them to take any action hereunder, (iv)
amend the definition of "Required Lenders" or "Pro Rata Share", (v) release all
or a substantial portion of the Collateral (except as otherwise provided in this
Agreement and the other Loan Documents) subordinate any Lien granted in favor of
the Agent for the benefit of the Lenders, or release any Loan Party, (vi)
modify, waive, release or subordinate the super priority claim status of the
Obligations (except as permitted in this Agreement and the Loan Documents), or
(vii) amend, modify or waive this Section 11.02, in each case without the
written consent of each Lender. Notwithstanding the foregoing, no amendment,
waiver or consent shall, unless in writing and signed by the Agent, affect the
rights or duties of the Agent under this Agreement or the other Loan Documents.
SECTION 11.03. No Waiver; Remedies, Etc. No failure on the
part of the Agent or any Lender to exercise, and no delay in exercising, any
right hereunder or under any other Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any right under any Loan
Document preclude any other or further exercise thereof or the exercise of any
other right. The rights and remedies of the Agent and the Lenders provided
herein and in the other Loan Documents are cumulative and are in addition to,
and not exclusive of, any rights or remedies provided by law. The rights of the
Agent and the Lenders under any Loan Document against any party thereto are not
conditional or contingent on any attempt by the Agent and the Lenders to
exercise any of their rights under any other Loan Document against such party or
against any other Person.
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SECTION 11.04. Expenses; Taxes; Attorneys' Fees. The Borrower
will pay within five Business Days of receipt or, if such payment requires the
approval of the Bankruptcy Court promptly upon obtaining such approval (the
Borrower hereby agreeing to use respectable best efforts to obtain such
approval), of all reasonable costs and expenses incurred by or on behalf of the
Agent (and, in the case of clauses (c) through (m) below, the Lenders),
regardless of whether the transactions contemplated hereby are consummated,
including, without limitation, reasonable fees, costs, client charges and
expenses of counsel for the Agent (and, in the case of clauses (c) through (m)
below, the Lenders), accounting, due diligence, periodic field audits, physical
counts, valuations, investigations, searches and filings, monitoring of assets,
appraisals of Collateral, environmental assessments, miscellaneous
disbursements, examination, travel, lodging and meals, arising from or relating
to: (a) the negotiation, preparation, execution, delivery, performance and
administration of this Agreement and the other Loan Documents, (including,
without limitation, the preparation of any additional Loan Documents, pursuant
to Section 7.01(b), (b) any requested amendments, waivers or consents to this
Agreement or the other Loan Documents whether or not such documents become
effective or are given, (c) the preservation and protection of any of the
Lenders' rights under this Agreement or the other Loan Documents, (d) the
defense of any claim or action asserted or brought against the Agent or the
Lenders by any Person that arises from or relates to this Agreement, any other
Loan Document, the Agent's or the Lenders' claims against the Borrower and each
other Loan Party, or any and all matters in connection therewith, (e) the
commencement or defense of, or intervention in, any court proceeding arising
from or related to this Agreement or any other Loan Document, (f) the filing of
any petition, complaint, answer, motion or other pleading by the Agent or the
Lenders, or the taking of any action in respect of the Collateral or other
security, in connection with this Agreement or any other Loan Document, (g) the
protection, collection, lease, sale, taking possession of or liquidation of, any
Collateral or other security in connection with this Agreement or any other Loan
Document, (h) any attempt to enforce any Lien or security interest in any
Collateral or other security in connection with this Agreement or any other Loan
Document, (i) any attempt to collect from the Borrower or any other Loan Party,
(j) the receipt by the Agent or the Lenders of any advice from professionals
with respect to any of the foregoing, (k) all liabilities and costs arising from
or in connection with the past, present or future operations of the Borrower and
each other Loan Party involving any damage to real or personal property or
natural resources or harm or injury alleged to have resulted from any Release of
Hazardous Materials on, upon or into such property, (l) any Environmental
Liabilities and Costs incurred in connection with the investigation, removal,
cleanup and/or remediation of any Hazardous Materials present or arising out of
the operations of any facility of any Borrower or any other Loan Party, or (m)
any Environmental Liabilities and Costs incurred in connection with any
Environmental Lien. Without limitation of the foregoing or any other provision
of any Loan Document: (x) the Borrower agrees to pay all stamp, document,
transfer, recording or filing taxes or fees and similar impositions now or
hereafter reasonably determined by the Agent or any Lender to be payable in
connection with this Agreement or any other Loan Document, and the Borrower
agrees to save the Agent and the Lenders harmless from and against any and all
present or future claims, liabilities or losses with respect to or resulting
from any omission to pay or delay in paying any such taxes, fees or impositions,
(y) the Borrower agrees to pay all broker fees that may become due in connection
with the transactions contemplated by this Agreement, and (z) if the Borrower
fails to perform any covenant or agreement contained herein or in any other Loan
Document, the
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Agent may itself perform or cause performance of such covenant or agreement, and
the expenses of the Agent incurred in connection therewith shall be reimbursed
on demand by the Borrower.
SECTION 11.05. Right of Set-off. Upon the occurrence and
during the continuance of any Event of Default, any Lender may, and is hereby
authorized to, at any time and from time to time, without notice to either
Company (any such notice being expressly waived by such Company) and to the
fullest extent permitted by law, set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of either Company against any and all obligations of either now or
hereafter existing under any Loan Document, irrespective of whether or not such
Lender shall have made any demand hereunder or thereunder and although such
obligations may be contingent or unmatured. Each Lender agrees to notify each
Company promptly after any such set-off and application made by such Lender
provided that the failure to give such notice shall not affect the validity of
such set-off and application.
SECTION 11.06. Severability. Any provision of this Agreement,
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or affecting
the validity or enforceability of such provision in any other jurisdiction.
SECTION 11.07. Assignments and Participations.
(a) This Agreement and the Revolving Credit Notes
shall be binding upon and inure to the benefit of the Companies and the Agent
and each Lender and their respective successors and assigns (including, except
for the right to request Revolving Loans, any trustee succeeding to the rights
of either Company pursuant to Chapter 11 of the Bankruptcy Code or pursuant to
any conversion to a case under Chapter 7 of the Bankruptcy Code); provided,
however, that neither Company of the Borrower may assign or transfer any of its
rights hereunder, or under the Revolving Credit Notes, without the prior written
consent of each Lender and any such assignment without the Lenders' prior
written consent shall be null and void.
(b) Each Lender may, with the written consent of the
Agent, assign to one or more other lenders or other entities all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its Revolving Credit Commitment, the Revolving Loans made by
it and the Revolving Credit Notes held by it); provided, however, that (i)
except in the case of assignments to Affiliates of a Lender in which case there
are no minimums, such assignment is in an amount which is at least $1,000,000 or
a multiple of $100,000 in excess thereof (or the remainder of such Lender's
Revolving Credit Commitment) and (ii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance, an Assignment and
Acceptance, together with any Revolving Credit Note subject to such assignment
and, except in the case of assignments to Affiliates of a Lender, such parties
shall deliver to the Agent a processing and recordation fee of $5,000. Upon such
execution, delivery and acceptance, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least three
Business Days after the delivery thereof to the Agent (or such shorter period as
shall be agreed to by the Agent and the parties to such assignment), (A) the
assignee thereunder shall become a "Lender" hereunder and, in addition to
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the rights and obligations hereunder held by it immediately prior to such
effective date, have the rights and obligations hereunder that have been
assigned to it pursuant to such Assignment and Acceptance and (B) the assigning
Lender thereunder 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 (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto).
(i) By executing and delivering an
Assignment and Acceptance, the assigning Lender and the assignee thereunder
confirm to and agree with each other and the other parties hereto as follows:
(A) 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 other Loan Document or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other Loan Document furnished pursuant hereto; (B) the
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Loan Parties or
any of their Subsidiaries or the performance or observance by the Loan Parties
of any of their obligations under this Agreement or any other Loan Document
furnished pursuant hereto; (C) such assignee confirms that it has received a
copy of this Agreement and the other Loan Documents, together with such other
documents and information it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (D) such
assignee will, independently and without reliance upon the Assigning Lender, the
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 decisions in taking or
not taking action under this Agreement and the other Loan Documents; (E) such
assignee appoints and authorizes the Agent to take such action as Agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; and (F) 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 Loan Documents are required to be
performed by it as a Lender.
(ii) The Agent shall maintain, or cause to
be maintained at the Payment Office, a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lenders and the Revolving Credit Commitments of, and
principal amount of the Revolving Loans owing to each Lender from time to time
(the "Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrower, the Agent and the
Lenders may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower and any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(iii) Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an assignee, together with the
Revolving Credit Notes subject to such assignment, the Agent shall, if the Agent
consents to such assignment and if such Assignment and Acceptance has been
completed (i) accept such Assignment and Acceptance, (ii) give prompt notice
thereof to the Borrower, (iii) record the information contained therein in the
Register, and
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(iv) prepare and distribute to each Lender and the Borrower a revised Schedule
1.01(C) hereto after giving effect to such assignment, which revised Schedule
1.01(C) shall replace the prior Schedule 1.01(C) and become part of this
Agreement.
(iv) A Registered Loan (and the Registered
Note, if any, evidencing the same) may be assigned or sold in whole or in part
only by registration of such assignment or sale on the Register (and each
Registered Note shall expressly so provide). Any assignment or sale of all or
part of such Registered Loan (and the Registered Note, if any, evidencing the
same) may be effected only by registration of such assignment or sale on the
Register, together with the surrender of the Registered Note, if any, evidencing
the same duly endorsed by (or accompanied by a written instrument of assignment
or sale duly executed by) the holder of such Registered Note, whereupon, at the
request of the designated assignee(s) or transferee(s), one or more new
Registered Notes in the same aggregate principal amount shall be issued to the
designated assignee(s) or transferee(s). Prior to the registration of assignment
or sale of any Registered Loan (and the Registered Note, if any evidencing the
same), the Agent shall treat the Person in whose name such Registered Loan (and
the Registered Note, if any, evidencing the same) is registered as the owner
thereof for the purpose of receiving all payments thereon and for all other
purposes, notwithstanding notice to the contrary.
(v) In the event that any Lender sells
participations in a Registered Loan, such Lender shall maintain a register on
which it enters the name of all participants in the Registered Loans held by it
(the "Participant Register"). A Registered Loan (and the Registered Note, if
any, evidencing the same) may be participated in whole or in part only by
registration of such participation on the Participant Register (and each
Registered Note shall expressly so provide). Any participation of such
Registered Loan (and the Registered Note, if any, evidencing the same) may be
effected only by the registration of such participation on the Participant
Register.
(vi) Any foreign Person who purchases or is
assigned or participates in any portion of such Registered Loan shall provide
the Agent (in the case of a purchase or assignment) or the Lender (in the case
of a participation) with a completed Internal Revenue Service Form W-8
(Certificate of Foreign Status) or a substantially similar form for such
purchaser, participant or any other affiliate who is a holder of beneficial
interests in the Registered Loan.
(c) 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 Loan Documents (including,
without limitation, all or a portion of its Revolving Credit Commitment and the
Revolving Loans made by it); provided, that (i) such Lender's obligations under
this Agreement (including without limitation, its Revolving Credit Commitment
hereunder) and the other Loan Documents shall remain unchanged; (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, and the Borrower, the Agent and the other Lenders 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 Loan
Documents, and (iii) a participant shall not be entitled to require such Lender
to take or omit to take any action hereunder except (A) action directly
effecting an extension of the
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maturity dates or decrease in the principal amount of the Revolving Loans, or
(B) action directly effecting an extension of the due dates or a decrease in the
rate of interest payable on the Revolving Loans or the fees payable under this
Agreement, or (C) actions directly effecting a release of all or a substantial
portion of the Collateral or any Borrower or any Guarantor (in Section 10.08 or
any Loan Document).
SECTION 11.08. Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement.
SECTION 11.09. GOVERNING LAW. THIS AGREEMENT, THE REVOLVING
CREDIT NOTES AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK EXCEPT AS GOVERNED BY THE
BANKRUPTCY CODE.
SECTION 11.10. WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY, THE
AGENT AND THE LENDERS HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT, THE
REVOLVING CREDIT NOTES OR OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER,
CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE
FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREE THAT ANY SUCH
ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY. EACH LOAN PARTY CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR
ATTORNEY OF THE AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT THE AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING
OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS. EACH LOAN PARTY HEREBY
ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS
ENTERING INTO THIS AGREEMENT.
SECTION 11.11. Consent by the Agent and Lenders. Except as
otherwise expressly set forth herein to the contrary, if the consent, approval,
satisfaction, determination, judgment, acceptance or similar action (an
"Action") of the Agent or any Lender shall be permitted or required pursuant to
any provision hereof or any provision of any other agreement to which the
Borrower and any other Loan Party are parties and to which the Agent or any
Lender has succeeded thereto, such Action shall be required to be in writing and
may be withheld or denied by the Agent or such Lender, in its sole discretion,
with or without any reason, and without being subject to question or challenge
on the grounds that such Action was not taken in good faith.
SECTION 11.12. No Party Deemed Drafter. Each of the parties
hereto agrees that no party hereto shall be deemed to be the drafter of this
Agreement.
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SECTION 11.13. Indemnification. In addition to each Loan
Party's other Obligations under this Agreement, each Loan Party agrees to,
jointly and severally, defend, protect, indemnify and hold harmless the Agent,
each Lender and all of their respective officers, directors, employees,
attorneys, consultants and agents (collectively called the "Indemnitees") from
and against any and all losses, damages, liabilities, obligations, penalties,
fees, reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees, costs and expenses) incurred by such Indemnitees, whether prior
to or from and after the Interim Facility Effective Date, whether direct,
indirect or consequential, as a result of or arising from or relating to or in
connection with any of the following: (i) the negotiation, preparation,
execution or performance or enforcement of this Agreement, any other Loan
Document or of any other document executed in connection with the transactions
contemplated by this Agreement, (ii) the Agent's or any Lender's furnishing of
funds to the Borrower for the account of the Borrower under this Agreement,
including, without limitation, the management of any such Revolving Loans, (iii)
any matter relating to the financing transactions contemplated by this Agreement
or the other Loan Documents or by any document executed in connection with the
transactions contemplated by this Agreement or the other Loan Documents, or (iv)
any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto (collectively, the
"Indemnified Matters"); provided, however, that the Loan Parties shall not have
any obligation to any Indemnitee under this Section 11.13 for any Indemnified
Matter caused by the gross negligence or willful misconduct of such Indemnitee,
as determined by a final judgment of a court of competent jurisdiction. Such
indemnification for all of the foregoing losses, damages, fees, costs and
expenses of the Indemnitees are chargeable against the Loan Account. To the
extent that the undertaking to indemnify, pay and hold harmless set forth in
this Section 11.13 may be unenforceable because it is violative of any law or
public policy, each Loan Party shall, jointly and severally, contribute the
maximum portion which it is permitted to pay and satisfy under applicable law,
to the payment and satisfaction of all Indemnified Matters incurred by the
Indemnitees. This Indemnity shall survive the repayment of the Obligations and
the discharge of the Liens granted under the Loan Documents.
SECTION 11.14. Records. The unpaid principal of and interest
on the Notes, the interest rate or rates applicable to such unpaid principal and
interest, the duration of such applicability, the Revolving Credit Commitments,
and the accrued and unpaid fees payable pursuant to Section 2.06 hereof, shall
at all times be ascertained from the records of the Agent, which shall be
conclusive and binding absent manifest error.
SECTION 11.15. Binding Effect. This Agreement shall become
effective when it shall have been executed by each Company, the Agent and each
Lender and when the conditions precedent set forth in Section 5.01 have been
satisfied or waived in writing by the Agent, and thereafter shall be binding
upon and inure to the benefit of each Company, the Agent and each Lender, and
their respective successors and assigns, except that neither Company shall have
the right to assign any of its rights hereunder or any interest herein without
the prior written consent of each Lender, and any assignment by any Lender shall
be governed by Section 11.07.
SECTION 11.16. Confidentiality. The Agent and each Lender
agrees (on behalf of itself and each of its affiliates, directors, officers,
employees and representatives) to use reasonable precautions to keep
confidential, in accordance with its customary procedures for handling
confidential information of this nature and in accordance with safe and sound
practices
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of comparable commercial finance companies, any non-public information supplied
to it by the Loan Parties pursuant to this Agreement or the other Loan Documents
which is identified by the Loan Parties as being confidential at the time the
same is delivered to such Person (and which at the time is not, and does not
thereafter become, publicly available or available to such Person from another
source not known to be subject to a confidentiality obligation to such Person
not to disclose such information), provided that nothing herein shall limit the
disclosure of any such information (i) to the extent required by statute, rule,
regulation or judicial process, (ii) to counsel for the Agent or any Lender,
(iii) to examiners, auditors or accountants, (iv) in connection with any
litigation to which the Agent or any Lender is a party or (v) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first agrees, in writing,
to be bound by confidentiality provisions similar in substance to this Section
11.16. The Agent and each Lender agrees that, upon receipt of a request or
identification of the requirement for disclosure pursuant to clause (iv) hereof,
it will make reasonable efforts to keep the Loan Parties informed of such
request or identification; provided that the each Loan Party acknowledges that
the Agent and each Lender may make disclosure as required or requested by any
Governmental Authority or representative thereof and that the Agent and each
Lender may be subject to review by regulatory agencies and may be required to
provide to, or otherwise make available for review by, the representatives of
such agencies any such non-public information.
ARTICLE XII
GUARANTY
SECTION 12.01. Guaranty. The Parent hereby (i) irrevocably,
absolutely and unconditionally guarantees the prompt payment by the Borrower and
the Guarantors, as and when due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), of all of the
Obligations and (ii) agrees to pay any and all expenses (including counsel fees
and expenses) incurred by the Lenders in enforcing their rights under this
Article XII.
SECTION 12.02. Parent's Obligations Unconditional. The Parent
hereby guarantees that the Obligations will be paid strictly in accordance with
the terms of the Credit Documents, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Lenders with respect thereto. The liability of the Parent
under this Article XII shall be absolute and unconditional irrespective of: (a)
any lack of validity or enforceability of any Credit Document or any agreement
or instrument relating thereto; (b) any change in the time, manner or place of
payment of, or in any other term in respect of, all or any of the Obligations,
or any other amendment or waiver of or consent to any departure from any Credit
Document; (c) any taking, exchange or release of, or non-perfection of any lien
on or security interest in, any Collateral, or any release or amendment or
waiver of or consent to any departure from any other guaranty, for all or any of
the Obligations; or (d) any other circumstance (including, without limitation,
any statute of limitations or any insolvency, bankruptcy, reorganization,
receivership or similar proceeding affecting any Loan Party or its property or
assets) which might otherwise constitute a defense available to, or a
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discharge of, the Borrower or any other Guarantor in respect of the Obligations
or the Parent in respect of its obligations under this Article XII.
SECTION 12.03. Waivers. The Parent hereby waives (a)
promptness and diligence; (b) notice of acceptance and notice of the incurrence
of any Obligation by the Borrower; (c) notice of any actions taken by any Lender
or the Borrower or any other Loan Party under any Credit Document or any other
agreement or instrument relating thereto; (d) all other notices, demands and
protests, and all other formalities of every kind in connection with the
enforcement of the Obligations or of the obligations of the Parent under this
Article XII, the omission of or delay in which, but for the provisions of this
Section 12.03, might constitute grounds for relieving the Parent of its
obligations hereunder; and (e) any requirement that the Agent or the Lenders
protect, secure, perfect or insure any security interest or lien or any property
subject thereto or exhaust any right or take any action against the Borrower or
any other Person or any Collateral.
SECTION 12.04. No Subrogation. The Parent will not exercise
any rights which it may acquire by way of subrogation under this Article XII, by
any payment made by it hereunder or otherwise, until such date after the
Termination Date on which all of the Obligations shall have been satisfied in
full. If any amount shall be paid to the Parent on account of such subrogation
rights at any time when all of the Obligations and all such other expenses shall
not have been paid in full, such amount shall be held in trust for the benefit
of the Lenders, shall be segregated from the other funds of the Parent and shall
forthwith be paid over to the Lenders to be applied in whole or in part by the
Lenders against the Obligations, whether matured or unmatured. If (i) the Parent
shall make payment to the Lenders of all or any portion of the Obligations and
(ii) all of the Obligations and all such other expenses shall have been paid in
full and the Revolving Credit Commitments shall have terminated, the Lenders
will, at the Parent's request, execute and deliver to the Parent (without
recourse, representation or warranty) appropriate documents necessary to
evidence the transfer by subrogation to the Parent of an interest in the
Obligations resulting from such payment by the Parent, such subrogation to be
fully subject and subordinate, however, to the collection by the Lenders of all
other amounts due to the Lenders by the Parent and each other Loan Party under
this Agreement and the other Credit Documents.
SECTION 12.05. Reinstatement. The guaranty set forth in this
Article XII (a) is a continuing guaranty and shall remain in full force and
effect until the satisfaction in full of the Obligations and the payment of the
other expenses to be paid by the Parent pursuant to this Article XII and (b)
shall continue to be effective or shall be reinstated, as the case may be, if at
any time any payment of any of the Obligations is rescinded or must otherwise be
returned by the Lenders upon the insolvency, bankruptcy or reorganization of the
Borrower or otherwise, all as though such payment had not been made.
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IN WITNESS WHEREOF, the Borrower, the Parent, the Agent and
the Lenders have caused this Agreement to be duly executed by their respective
duly authorized officers as of the day and year first above written.
BORROWER:
CORAM, INC.
By:
----------------------------------------
Name:
Title:
PARENT:
CORAM HEALTHCARE CORPORATION
By:
----------------------------------------
Name:
Title:
AGENT:
MADELEINE L.L.C.
By:
----------------------------------------
Name:
Title:
LENDERS:
MADELEINE L.L.C.
By:
----------------------------------------
Name:
Title:
