LOAN AND SECURITY AGREEMENT
by and among
KEYSTONE CONSOLIDATED INDUSTRIES, INC.,
KEYSTONE WIRE PRODUCTS INC.,
ENGINEERED WIRE PRODUCTS, INC., and
F V STEEL AND WIRE COMPANY,
as Borrowers,
THE LENDERS FROM TIME TO TIME PARTY HERETO
as Lenders,
WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL)
as Administrative Agent,
and
WACHOVIA CAPITAL MARKETS, LLC
as Sole Lead Arranger, Manager and Bookrunner
Dated: August 31, 2005
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS.....................................................................................1
SECTION 2. CREDIT FACILITIES..............................................................................26
2.1 Loans..........................................................................................26
2.2 Letters of Credit..............................................................................27
2.3 Term Loans.....................................................................................31
2.4 Commitments....................................................................................33
SECTION 3. INTEREST AND FEES..............................................................................33
3.1 Interest.......................................................................................33
3.2 Fees...........................................................................................34
3.3 Changes in Laws and Increased Costs of Loans...................................................35
SECTION 4. CONDITIONS PRECEDENT...........................................................................37
4.1 Conditions Precedent to Initial Loans and Letters of Credit....................................37
4.2 Conditions Precedent to All Loans and Letters of Credit........................................39
SECTION 5. GRANT AND PERFECTION OF SECURITY INTEREST......................................................40
5.1 Grant of Security Interest.....................................................................40
5.2 Perfection of Security Interests...............................................................42
SECTION 6. COLLECTION AND ADMINISTRATION..................................................................46
6.1 Borrowers' Loan Accounts.......................................................................46
6.2 Statements.....................................................................................46
6.3 Collection of Accounts.........................................................................46
6.4 Payments.......................................................................................47
6.5 Taxes..........................................................................................48
6.6 Authorization to Make Loans....................................................................50
6.7 Use of Proceeds................................................................................51
6.8 Appointment of Administrative Borrower as Agent for Requesting Loans and Receipts of
Loans and Statements...........................................................................51
6.9 Pro Rata Treatment.............................................................................52
6.10 Sharing of Payments, Etc.......................................................................52
6.11 Settlement Procedures..........................................................................53
6.12 Obligations Several; Independent Nature of Lenders' Rights.....................................55
SECTION 7. COLLATERAL REPORTING AND COVENANTS.............................................................55
7.1 Collateral Reporting...........................................................................55
7.2 Accounts Covenants.............................................................................56
7.3 Inventory Covenants............................................................................57
7.4 Equipment and Real Property Covenants..........................................................58
7.5 Power of Attorney..............................................................................58
7.6 Right to Cure..................................................................................59
7.7 Access to Premises.............................................................................59
SECTION 8. REPRESENTATIONS AND WARRANTIES.................................................................60
8.1 Corporate Existence, Power and Authority.......................................................60
8.2 Name; State of Organization; Chief Executive Office; Collateral Locations......................60
8.3 Financial Statements; No Material Adverse Change...............................................61
8.4 Priority of Liens; Title to Properties.........................................................61
8.5 Tax Returns....................................................................................61
8.6 Litigation.....................................................................................62
8.7 Compliance with Other Agreements and Applicable Laws...........................................62
8.8 Environmental Compliance.......................................................................62
8.9 Employee Benefits..............................................................................63
8.10 Bank Accounts..................................................................................64
8.11 Intellectual Property..........................................................................64
8.12 Subsidiaries; Affiliates; Capitalization; Solvency.............................................65
8.13 Labor Disputes.................................................................................65
8.14 Restrictions on Subsidiaries...................................................................66
8.15 Material Contracts.............................................................................66
8.16 Payable Practices..............................................................................66
8.17 Plan of Reorganization.........................................................................66
8.18 Senior Indebtedness............................................................................66
8.19 Accuracy and Completeness of Information.......................................................66
8.20 Survival of Warranties; Cumulative.............................................................67
SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS.............................................................67
9.1 Maintenance of Existence.......................................................................67
9.2 New Collateral Locations.......................................................................67
9.3 Compliance with Laws, Regulations, Etc.........................................................68
9.4 Payment of Taxes and Claims....................................................................69
9.5 Insurance......................................................................................69
9.6 Financial Statements and Other Information.....................................................69
9.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc........................................71
9.8 Encumbrances...................................................................................74
9.9 Indebtedness...................................................................................76
9.10 Loans, Investments, Etc........................................................................78
9.11 Dividends and Redemptions......................................................................80
9.12 Transactions with Affiliates...................................................................81
9.13 Compliance with ERISA..........................................................................81
9.14 End of Fiscal Years; Fiscal Quarters...........................................................82
9.15 Change in Business.............................................................................82
9.16 Limitation of Restrictions Affecting Subsidiaries..............................................82
9.17 Minimum EBITDAR................................................................................82
9.18 Minimum Fixed Charge Coverage Ratio............................................................83
9.19 Minimum Excess Availability....................................................................83
9.20 License Agreements.............................................................................83
9.21 Foreign Assets Control Regulations, Etc........................................................84
9.22 After Acquired Real Property...................................................................84
9.23 Costs and Expenses.............................................................................85
9.24 Plan of Reorganization.........................................................................85
9.25 Further Assurances.............................................................................85
SECTION 10. EVENTS OF DEFAULT AND REMEDIES.................................................................86
10.1 Events of Default..............................................................................86
10.2 Remedies.......................................................................................88
SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW..................................91
11.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver..........................91
11.2 Waiver of Notices..............................................................................93
11.3 Amendments and Waivers.........................................................................93
11.4 Waiver of Counterclaims........................................................................95
11.5 Indemnification................................................................................95
SECTION 12. THE AGENT......................................................................................96
12.1 Appointment, Powers and Immunities.............................................................96
12.2 Reliance by Agent..............................................................................96
12.3 Events of Default..............................................................................96
12.4 Wachovia in its Individual Capacity............................................................97
12.5 Indemnification................................................................................97
12.6 Non-Reliance on Agent and Other Lenders........................................................97
12.7 Failure to Act.................................................................................98
12.8 Additional Loans...............................................................................98
12.9 Concerning the Collateral and the Related Financing Agreements.................................99
12.10 Field Audit, Examination Reports and other Information; Disclaimer by Lenders..................99
12.11 Collateral Matters.............................................................................99
12.12 Agency for Perfection.........................................................................101
12.13 Successor Agent...............................................................................101
12.14 Other Agent Designations......................................................................102
SECTION 13. TERM OF AGREEMENT; MISCELLANEOUS..............................................................102
13.1 Term..........................................................................................102
13.2 Interpretative Provisions.....................................................................104
13.3 Notices.......................................................................................105
13.4 Partial Invalidity............................................................................106
13.5 Confidentiality...............................................................................107
13.6 Successors....................................................................................108
13.7 Assignments; Participations...................................................................108
13.8 Entire Agreement..............................................................................110
13.9 USA Patriot Act...............................................................................110
13.10 Counterparts, Etc.............................................................................110
SECTION 14. CROSS-GUARANTY................................................................................110
14.1 Cross-Guaranty................................................................................110
14.2 Waivers by Borrowers..........................................................................111
14.3 Benefit of Guaranty...........................................................................111
14.4 Waiver of Subrogation, Etc....................................................................111
14.5 Election of Remedies..........................................................................112
14.6 Limitation....................................................................................112
14.7 Contribution with Respect to Guaranty Obligations.............................................113
14.8 Liability Cumulative..........................................................................113
14.9 Subrogation...................................................................................114
INDEX
TO
EXHIBITS AND SCHEDULES
Exhibit A Form of Assignment and Acceptance
Exhibit B Information Certificate
Exhibit C Form of Compliance Certificate
Exhibit D Closing Checklist
Schedule 1.37 Existing Lenders
Schedule 1.38 Existing Letters of Credit
LOAN AND SECURITY AGREEMENT
This Loan and Security Agreement dated August 31, 2005 is entered into by
and among Keystone Consolidated Industries, Inc., a Delaware corporation
("Keystone"), Keystone Wire Products Inc., a Delaware corporation ("KWP"),
Engineered Wire Products, Inc., an Ohio corporation ("EWP"), F V Steel and Wire
Company, a Wisconsin corporation ("F V Steel" and, together with Keystone, KWP
and EWP, each individually a "Borrower" and collectively, "Borrowers"), the
parties hereto from time to time as lenders, whether by execution of this
Agreement or an Assignment and Acceptance (each individually, a "Lender" and
collectively, "Lenders" as hereinafter further defined) and Wachovia Capital
Finance Corporation (Central), an Illinois corporation, in its capacity as agent
for Lenders (in such capacity, "Agent" as hereinafter further defined).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Borrowers have requested that Agent and Lenders enter into
financing arrangements with Borrowers pursuant to which Lenders may make loans
and provide other financial accommodations to Borrowers; and
WHEREAS, each Lender is willing to agree (severally and not jointly) to
make such loans and provide such financial accommodations to Borrowers on a pro
rata basis according to its Commitment (as defined below) on the terms and
conditions set forth herein and Agent is willing to act as agent for Lenders on
the terms and conditions set forth herein and the other Financing Agreements;
NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1.........DEFINITIONS
For purposes of this Agreement, the following terms shall have the
respective meanings given to them below:
1.1 "Accounts" shall mean, as to each Borrower and Guarantor, all present
and future rights of such Borrower and Guarantor to payment of a monetary
obligation, whether or not earned by performance, which is not evidenced by
chattel paper or an instrument, (a) for property that has been or is to be sold,
leased, licensed, assigned, or otherwise disposed of, (b) for services rendered
or to be rendered, (c) for a secondary obligation incurred or to be incurred, or
(d) arising out of the use of a credit or charge card or information contained
on or for use with the card.
1.2 "Adjusted Eurodollar Rate" shall mean, with respect to each Interest
Period for any Eurodollar Rate Loan comprising part of the same borrowing
(including conversions, extensions and renewals), the rate per annum determined
by dividing (a) the London Interbank Offered Rate for such Interest Period by
(b) a percentage equal to: (i) one (1) minus (ii) the Reserve Percentage. For
purposes hereof, "Reserve Percentage" shall mean for any day, that percentage,
(expressed as a decimal) which is in effect from time to time under Regulation D
of the Board of Governors of the Federal Reserve System (or any successor), as
such regulation may be amended from time to time or any successor regulation, as
the maximum reserve requirement (including, without limitation, any basic,
supplemental, emergency, special, or marginal reserves) applicable with respect
to Eurocurrency liabilities as that term is defined in Regulation D (or against
any other category of liabilities that includes deposits by reference to which
the interest rate of Eurodollar Loans is determined), whether or not any Lender
has any Eurocurrency liabilities subject to such reserve requirement at that
time. Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities
and as such shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from time to
time to a Lender. The Adjusted Eurodollar Rate shall be adjusted automatically
on and as of the effective date of any change in the Reserve Percentage.
1.3 "Adjusted Tangible Net Worth" shall mean as to any Person, at any time,
in accordance with GAAP (except as otherwise specifically set forth below), on a
consolidated basis for such Person and its Subsidiaries (if any), the amount
equal to the difference between: (a) the aggregate net book value of all assets
of such Person and its Subsidiaries (excluding the value of patents, trademarks,
tradenames, copyrights, licenses, goodwill, leasehold improvements, prepaid
assets and other intangible assets), calculating the book value of inventory for
this purpose on a first-in-first-out basis, after deducting from such book
values all appropriate reserves in accordance with GAAP (including all reserves
for doubtful receivables, obsolescence, depreciation and amortization) and (b)
the aggregate amount of the Indebtedness and other liabilities of such Person
and its Subsidiaries (including tax and other proper accruals).
1.4 "Administrative Borrower" shall mean Keystone Consolidated Industries,
Inc., a Delaware corporation in its capacity as Administrative Borrower on
behalf of itself and the other Borrowers pursuant to Section 6.8 hereof and it
successors and assigns in such capacity.
1.5 "Affiliate" shall mean, with respect to a specified Person, any other
Person which directly or indirectly, through one or more intermediaries,
controls or is controlled by or is under common control with such Person, and
without limiting the generality of the foregoing, includes (a) any Person which
beneficially owns or holds ten (10%) percent or more of any class of Voting
Stock of such Person or other equity interests in such Person, (b) any Person of
which such Person beneficially owns or holds ten (10%) percent or more of any
class of Voting Stock or in which such Person beneficially owns or holds ten
(10%) percent or more of the equity interests and (c) any director or executive
officer of such Person. For the purposes of this definition, the term "control"
(including with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of Voting
Stock, by agreement or otherwise.
1.6 "Agent" shall mean Wachovia Capital Finance Corporation (Central), in
its capacity as agent on behalf of Lenders pursuant to the terms hereof and any
replacement or successor agent hereunder.
1.7 "Agent Payment Account" shall mean account no. 5000000030266 of Agent
at Wachovia Bank, National Association, or such other account of Agent as Agent
may from time to time designate to Administrative Borrower as the Agent Payment
Account for purposes of this Agreement and the other Financing Agreements.
1.8 "Aggregate Suppressed Availability" shall mean, as to Borrowers, the
aggregate amount calculated at any date equal to: (a) the sum of each Borrowing
Base of the Borrowers (after giving effect to any Reserves other than any
Reserves in respect of Letter of Credit Obligations), minus (b) the sum of: (i)
the outstanding principal amount of the Revolving Loans, plus (ii) the amount of
all Reserves then established in respect of Letter of Credit Obligations, plus
(iii) the aggregate amount of all then outstanding and unpaid trade payables and
other obligations of Borrowers which are outstanding more than sixty (60) days
past due as of the end of the immediately preceding month or at Agent's option,
as of a more recent date based on such reports as Agent may from time to time
specify (other than trade payables or other obligations being contested or
disputed by Borrowers in good faith), plus (iv) without duplication, the amount
of checks issued by Borrowers to pay trade payables and other obligations which
are more than sixty (60) days past due as of the end of the immediately
preceding month or at Agent's option, as of a more recent date based on such
reports as Agent may from time to time specify (other than trade payables or
other obligations being contested or disputed by Borrowers in good faith), but
not yet sent.
1.9 "Agreement" shall mean this Loan and Security Agreement, as amended,
restated or otherwise modified from time to time.
1.10 "Applicable Margins" shall mean, at any time, as to the Interest Rate
for Prime Rate Loans, Eurodollar Rate Loans and the letter of credit fee on the
outstanding undrawn amount of Letter of Credit Obligations, the applicable row
of per annum rates set forth below if the average daily Excess Availability for
all Borrowers in the aggregate during the immediately preceding calendar quarter
is at or within the amounts indicated for such row:
Applicable Margin for Applicable Margin for
Prime Rate Loans that Eurodollar Rate Loans Applicable Margin for Applicable Margin for
are Revolving Loans that are Revolving Eurodollar Rate Loans Letter of Credit
----------
Excess Availability and Term Loans Loans that are Term Loans Obligations
------------------- -------------- ----- ---------- -----------
(a) $25,000,000 or 0.00% 2.00% 2.25% 2.25%
more
(b) Greater than or 0.25% 2.25% 2.50% 2.50%
equal to
$15,000,000 and
less than
$25,000,000
(c) Less than 0.50% 2.50% 2.75% 2.75%
$15,000,000
provided however, that, beginning on the date hereof and continuing through
January 31, 2006, the Applicable Margins shall be those per annum rates
designated in row (b) above. Commencing on the first Business Day of February,
2006 and thereafter on the first Business Day immediately following each
calendar quarter, the Applicable Margins shall be adjusted based on the average
daily Excess Availability for all Borrowers in the aggregate for the calendar
quarter most recently ended.
1.11 "Assignment and Acceptance" shall mean an Assignment and Acceptance
substantially in the form of Exhibit A attached hereto (with blanks
appropriately completed) delivered to Agent in connection with an assignment of
a Lender's interest hereunder in accordance with the provisions of Section 13.7
hereof.
1.12 "Bankruptcy Court" shall mean the United States Bankruptcy Court for
the Eastern District of Wisconsin.
1.13 "Blocked Accounts" shall have the meaning set forth in Section 6.3
hereof.
1.14 "Borrowers" shall mean, collectively, the following (together with
their respective successors and assigns): (a) Keystone Consolidated Industries,
Inc., a Delaware corporation; (b) Keystone Wire Products Inc., a Delaware
corporation; (c) Engineered Wire Products, Inc., an Ohio corporation; (d) F V
Steel and Wire Company, a Wisconsin corporation; and (e) any other Person that
at any time after the date hereof becomes a Borrower with the prior written
consent of Agent; each sometimes being referred to herein individually as a
"Borrower".
1.15 "Borrowing Base" shall mean, at any time, as to each Borrower, the
amount equal to:
(a) the amount equal to: (i) eighty-five (85%) percent of the Eligible
Accounts of such Borrower, plus (ii) the lesser of (A) the Inventory Loan Limit
for such Borrower or (B) the sum of: (1) the lesser of sixty-five (65%) percent
multiplied by the Value of the Eligible Inventory of such Borrower consisting of
finished goods or eighty-five (85%) percent of the Net Recovery Percentage
multiplied by the Value of such Eligible Inventory, plus (2) the lesser of sixty
(60%) percent multiplied by the Value of the Eligible Inventory of such Borrower
consisting of raw materials or eighty-five (85%) percent of the Net Recovery
Percentage multiplied by the Value of such Inventory, minus
(b) Reserves attributable to such Borrower.
For purposes only of applying the Inventory Loan Limit, Agent may treat the then
undrawn amounts of outstanding Letters of Credit for the purpose of purchasing
Eligible Inventory as Revolving Loans to the extent Agent is in effect basing
the issuance of the Letter of Credit on the Value of the Eligible Inventory
being purchased with such Letter of Credit. In determining the actual amounts of
such Letter of Credit to be so treated for purposes of the sublimit, the
outstanding Revolving Loans and Reserves shall be attributed first to any
components of the lending formulas set forth above that are not subject to such
sublimit, before being attributed to the components of the lending formulas
subject to such sublimit. The amounts of Eligible Inventory of any Borrower
shall, at Agent's option, be determined based on the lesser of the amount of
Inventory set forth in the general ledger of such Borrower or the perpetual
inventory record maintained by such Borrower.
1.16 "Business Day" shall mean any day other than a Saturday, Sunday, or
other day on which commercial banks are authorized or required to close under
the laws of the State of Illinois or the State of North Carolina, and a day on
which Agent is open for the transaction of business, except that if a
determination of a Business Day shall relate to any Eurodollar Rate Loans, the
term Business Day shall also exclude any day on which banks are closed for
dealings in dollar deposits in the London interbank market or other applicable
Eurodollar Rate market.
1.17 "Capital Expenditures" means all expenditures during any measuring
period for any fixed asset or improvements or replacements, substitutions, or
additions thereto that have a useful life of more than one year and are required
to be capitalized under GAAP.
1.18 "Capital Leases" shall mean, as applied to any Person, any lease of
(or any agreement conveying the right to use) any property (whether real,
personal or mixed) by such Person as lessee which in accordance with GAAP, is
required to be accounted for as a capital lease on the balance sheet of such
Person.
1.19 "Capital Stock" shall mean, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
such Person's capital stock or partnership, limited liability company or other
equity interests at any time outstanding, and any and all rights, warrants or
options exchangeable for or convertible into such capital stock or other
interests (but excluding any debt security that is exchangeable for or
convertible into such capital stock).
1.20 "Cash Equivalents" shall mean, at any time, (a) any evidence of
Indebtedness with a maturity date of one hundred eighty (180) days or less
issued or directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof; provided, that, the full faith
and credit of the United States of America is pledged in support thereof; (b)
certificates of deposit or bankers' acceptances with a maturity of one hundred
eighty (180) days or less of any financial institution that is a member of the
Federal Reserve System having combined capital and surplus and undivided profits
of not less than $500,000,000; (c) commercial paper (including variable rate
demand notes) with a maturity of ninety (90) days or less issued by a
corporation (except an Affiliate of any Borrower or Guarantor) organized under
the laws of any State of the United States of America or the District of
Columbia and rated at least A-1 by Standard & Poor's Ratings Service, a division
of The McGraw-Hill Companies, Inc. or at least P-1 by Moody's Investors Service,
Inc.; (d) repurchase obligations with a term of not more than thirty (30) days
for underlying securities of the types described in clause (a) above entered
into with any financial institution having combined capital and surplus and
undivided profits of not less than $500,000,000; (e) repurchase agreements and
reverse repurchase agreements relating to marketable direct obligations issued
or unconditionally guaranteed by the United States of America or issued by any
governmental agency thereof and backed by the full faith and credit of the
United States of America, in each case maturing within ninety (90) days or less
from the date of acquisition; provided, that, the terms of such agreements
comply with the guidelines set forth in the Federal Financial Agreements of
Depository Institutions with Securities Dealers and Others, as adopted by the
Comptroller of the Currency on October 31, 1985; and (f) investments in money
market funds and mutual funds which invest substantially all of their assets in
securities of the types described in clauses (a) through (e) above.
1.21 "Change of Control" shall mean (a) the transfer (in one transaction or
a series of transactions) of all or substantially all of the assets of any
Borrower or Guarantor to any Person or group (as such term is used in Section
13(d)(3) of the Exchange Act), other than as permitted in Section 9.7 hereof;
(b) the liquidation or dissolution of any Borrower or Guarantor or the adoption
of a plan by the stockholders of any Borrower or Guarantor relating to the
dissolution or liquidation of such Borrower or Guarantor, other than as
permitted in Section 9.7 hereof; (c) the acquisition by any Person or group (as
such term is used in Section 13(d)(3) of the Exchange Act), except for one or
more Permitted Holders, of beneficial ownership, directly or indirectly, of a
majority of the voting power of the total outstanding Voting Stock of the
Parent; (d) the failure of the Permitted Holders to own greater than fifty (50%)
percent of the voting power of the total outstanding Voting Stock of Parent; or
(e) the failure of Parent to own directly or indirectly one hundred (100%)
percent of the voting power of the total outstanding Voting Stock of any other
Borrower or Guarantor.
1.22 "Code" shall mean the Internal Revenue Code of 1986, as the same now
exists or may from time to time hereafter be amended, modified, recodified or
supplemented, together with all rules, regulations and interpretations
thereunder or related thereto.
1.23 "Collateral" shall have the meaning set forth in Section 5 hereof.
1.24 "Collateral Access Agreement" shall mean an agreement in writing, in
form and substance reasonably satisfactory to Agent, from any lessor of premises
to any Borrower or Guarantor, or any other person to whom any Collateral is
consigned or who has custody, control or possession of any such Collateral or is
otherwise the owner or operator of any premises on which any of such Collateral
is located, in favor of Agent with respect to the Collateral at such premises or
otherwise in the custody, control or possession of such lessor, consignee or
other person.
1.25 "Commitment" shall mean, at any time, as to each Lender, the principal
amount set forth below such Lender's signature on the signatures pages hereto
designated as the Commitment or on Schedule 1 to the Assignment and Acceptance
Agreement pursuant to which such Lender became a Lender hereunder in accordance
with the provisions of Section 13.7 hereof, as the same may be adjusted from
time to time in accordance with the terms hereof; sometimes being collectively
referred to herein as "Commitments".
1.26 "Confirmation Order" shall mean the order of the Bankruptcy Court
confirming the Plan of Reorganization pursuant to Section 1129 of the United
States Bankruptcy Code.
1.27 "Credit Facility" shall mean the Loans and Letters of Credit provided
to or for the benefit of any Borrower pursuant to Sections 2.1, 2.2 and 2.3
hereof.
1.28 "Default" shall mean an act, condition or event which with notice or
passage of time or both would constitute an Event of Default.
1.29 "Defaulting Lender" shall have the meaning set forth in Section 6.11
hereof.
1.30 "Deposit Account Control Agreement" shall mean an agreement in
writing, in form and substance reasonably satisfactory to Agent, by and among
Agent, the Borrower or Guarantor with a deposit account at any bank and the bank
at which such deposit account is at any time maintained which provides that such
bank will comply with instructions originated by Agent directing disposition of
the funds in the deposit account without further consent by such Borrower or
Guarantor and has such other terms and conditions as Agent may reasonably
require.
1.31 "EBITDAR" shall mean, with respect to any Person for any fiscal
period, without duplication, an amount equal to (a) consolidated net income of
such Person for such period determined in accordance with GAAP, minus (b) the
sum of (i) income tax credits, (ii) interest income, (iii) gain from
extraordinary items for such period, (iv) any aggregate net gain (but not any
aggregate net loss) during such period arising from the sale, exchange or other
disposition of capital assets by such Person (including any fixed assets,
whether tangible or intangible, all inventory sold in conjunction with the
disposition of fixed assets and all securities), and (v) any other non-cash
gains that have been added in determining consolidated net income, in each case
to the extent included in the calculation of consolidated net income of such
Person for such period in accordance with GAAP, but without duplication, plus
(c) the sum of (i) any provision for income taxes, (ii) Interest Expense, (iii)
loss from extraordinary items for such period, (iv) depreciation and
amortization for such period, (v) amortized debt discount for such period, and
(vi) Restructuring Expenses for such period, in each case to the extent included
in the calculation of consolidated net income of such Person for such period in
accordance with GAAP, but without duplication. For purposes of this definition,
the following items shall be excluded in determining consolidated net income of
a Person: (1) the income (or deficit) of any other Person accrued prior to the
date it became a Subsidiary of, or was merged or consolidated into, such Person
or any of such Person's Subsidiaries; (2) the income (or deficit) of any other
Person (other than a Subsidiary) in which such Person has an ownership interest,
except to the extent any such income has actually been received by such Person
in the form of cash dividends or distributions; (3) the undistributed earnings
of any Subsidiary of such Person to the extent that the declaration or payment
of dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary; (4) any write-up or write-down of any asset; (5)
any net gain from the collection of the proceeds of life insurance policies; (6)
any net gain arising from the extinguishment, under GAAP, of any Indebtedness,
of such Person; (7) in the case of a successor to such Person by consolidation
or merger or as a transferee of its assets, any earnings or losses of such
successor prior to such consolidation, merger or transfer of assets; (8) any
deferred credit representing the excess of equity in any Subsidiary of such
Person at the date of acquisition of such Subsidiary over the cost to such
Person of the investment in such Subsidiary and (9) non-cash pension related
gains and losses and other non-cash post employment benefits.
1.32 "Eligible Accounts" shall mean Accounts created by a Borrower that in
each case satisfy the criteria set forth below as determined by Agent in good
faith. In general, Accounts shall be Eligible Accounts if:
(a) such Accounts arise from the actual and bona fide sale and delivery of
goods by such Borrower or rendition of services by such Borrower in the ordinary
course of its business which transactions are completed in accordance in all
material respects with the terms and provisions contained in any documents
related thereto;
(b) such Accounts are not unpaid more than ninety (90) days after the date
of the original invoice for them;
(c) such Accounts comply with the terms and conditions contained in Section
7.2(b) of this Agreement;
(d) such Accounts do not arise from sales on consignment, guaranteed sale,
sale and return, sale on approval, or other terms under which payment by the
account debtor are conditional or contingent;
(e) the chief executive office of the account debtor with respect to such
Accounts is located in the United States of America or Canada or, at Agent's
option, if the chief executive office and principal place of business of the
account debtor with respect to such Accounts is located other than in the United
States of America or Canada, then if either: (i) the account debtor has
delivered to such Borrower an irrevocable letter of credit issued or confirmed
by a bank reasonably satisfactory to Agent and payable only in the United States
of America and in U.S. dollars, sufficient to cover such Account, in form and
substance reasonably satisfactory to Agent and if required by Agent, the
original of such letter of credit has been delivered to Agent or Agent's agent
and the issuer thereof, and such Borrower has complied with the terms of Section
5.2(f) hereof with respect to the assignment of the proceeds of such letter of
credit to Agent or naming Agent as transferee beneficiary thereunder, as Agent
may specify, or (ii) such Account is subject to credit insurance payable to
Agent issued by an insurer and on terms and in an amount reasonably acceptable
to Agent, or (iii) such Account is otherwise reasonably acceptable in all
material respects to Agent (subject to such lending formula with respect thereto
as Agent may determine);
(f) such Accounts do not consist of progress billings (such that the
obligation of the account debtors with respect to such Accounts is conditioned
upon such Borrower's satisfactory completion of any further performance under
the agreement giving rise thereto), bill and hold invoices or retainage
invoices, except as to bill and hold invoices, if Agent shall have received an
agreement in writing from the account debtor, in form and substance reasonably
satisfactory to Agent, confirming the unconditional obligation of the account
debtor to take the goods related thereto and pay such invoice;
(g) to the extent that the account debtor with respect to such Accounts has
not asserted a counterclaim, defense or dispute and is not owed or does not
claim to be owed any amounts that may give rise to any right of setoff or
recoupment against such Accounts (but the portion of the Accounts of such
account debtor in excess of the amount at any time and from time to time owed by
such Borrower to such account debtor or claimed owed by such account debtor
shall be deemed Eligible Accounts); (h) there are no facts, events or
occurrences which would impair the validity, enforceability or collectability of
such Accounts or reduce the amount payable or delay payment thereunder;
(i) such Accounts are subject to the first priority, valid and perfected
security interest of Agent and any goods giving rise thereto are not, and were
not at the time of the sale thereof, subject to any liens except those
non-consensual statutory liens permitted in this Agreement;
(j) neither the account debtor nor any officer or director of the account
debtor with respect to such Accounts is an officer, director, agent or other
Affiliate of any Borrower or Guarantor;
(k) the account debtors with respect to such Accounts are not any foreign
government, the United States of America, any State, political subdivision,
department, agency or instrumentality thereof, unless, if the account debtor is
the United States of America, any State, political subdivision, department,
agency or instrumentality thereof, upon Agent's request, the Federal Assignment
of Claims Act of 1940, as amended or any similar State or local law, if
applicable, has been complied with in a manner satisfactory to Agent;
(l) there are no proceedings or actions which are threatened or pending
against the account debtors with respect to such Accounts which could reasonably
be expected to result in any material adverse change in any such account
debtor's financial condition (including, without limitation, any bankruptcy,
dissolution, liquidation, reorganization or similar proceeding);
(m) the aggregate amount of such Accounts owing by a single account debtor
or its Affiliates do not constitute more than twenty (20%) percent (or, in the
case of Tractor Supply, thirty (30%) percent) of the aggregate amount of all
otherwise Eligible Accounts (but the portion of the Accounts not in excess of
the applicable percentages may be deemed Eligible Accounts);
(n) such Accounts are not owed by an account debtor who has Accounts unpaid
more than sixty (60) days after the original invoice date for them which
constitute more than twenty (20%) percent (or, in the case of Tractor Supply,
thirty (30%) percent) of the total Accounts of such account debtor;
(o) the account debtor is not located in a state requiring the filing of a
Notice of Business Activities Report or similar report in order to permit such
Borrower to seek judicial enforcement in such State of payment of such Account,
unless such Borrower has qualified to do business in such state or has filed a
Notice of Business Activities Report or equivalent report for the then current
year or such failure to file and inability to seek judicial enforcement is
capable of being remedied without any material delay or material cost;
(p) such Accounts are owed by account debtors whose total indebtedness to
such Borrower does not exceed the credit limit with respect to such account
debtors as determined by such Borrower from time to time, to the extent such
credit limit as to any account debtor is established consistent with the current
practices of such Borrower as of the date hereof and such credit limit is
acceptable to Agent (but the portion of the Accounts not in excess of such
credit limit may be deemed Eligible Accounts); and
(q) such Accounts are not owed by account debtors which Agent has advised
Administrative Borrower in writing are not deemed to be creditworthy by Agent.
The criteria for Eligible Accounts set forth above may only be changed and any
new criteria for Eligible Accounts may only be established by Agent in good
faith based on either: (i) an event, condition or other circumstance arising
after the date hereof, or (ii) an event, condition or other circumstance
existing on the date hereof to the extent Agent has no actual knowledge thereof
prior to the date hereof, in either case under clause (i) or (ii) which
materially and adversely affects or could reasonably be expected to materially
and adversely affect the Accounts in the good faith determination of Agent. Any
Accounts that are not Eligible Accounts shall nevertheless be part of the
Collateral.
1.33 "Eligible Inventory" shall mean, as to each Borrower (other than F V
Steel), Inventory of such Borrower consisting of finished goods held for resale
in the ordinary course of the business of such Borrower and raw materials for
such finished goods, that in each case satisfy the criteria set forth below as
determined by Agent in good faith. In general, Eligible Inventory shall not
include: (a) work-in-process; (b) components which are not part of finished
goods; (c) spare parts for equipment; (d) packaging and shipping materials; (e)
supplies used or consumed in such Borrower's business; (f) Inventory at premises
other than those owned or leased and controlled by any Borrower unless Agent has
received a Collateral Access Agreement in respect of such premises or, in
Agent's sole discretion, Agent has elected to implement a Reserve in respect of
the obligations of such Borrower at such premises in such amounts as Agent shall
determine in its good faith; (g) Inventory subject to a security interest or
lien in favor of any Person other than Agent except those statutory liens
permitted in this Agreement; (h) bill and hold goods; (i) unserviceable,
obsolete or slow moving Inventory; (j) Inventory that is not subject to the
first priority, valid and perfected security interest of Agent; (k) returned
(unless otherwise constituting Eligible Inventory), damaged and/or defective
Inventory; (l) Inventory purchased or sold on consignment and (m) Inventory
located outside the United States of America. The criteria for Eligible
Inventory set forth above may only be changed and any new criteria for Eligible
Inventory may only be established by Agent in good faith based on either: (i) an
event, condition or other circumstance arising after the date hereof, or (ii) an
event, condition or other circumstance existing on the date hereof to the extent
Agent has no actual knowledge thereof prior to the date hereof, in either case
under clause (i) or (ii) which materially and adversely affects or could
reasonably be expected to materially and adversely affect the Inventory in the
good faith determination of Agent. Any Inventory that is not Eligible Inventory
shall nevertheless be part of the Collateral.
1.34 "Eligible Transferee" shall mean (a) any Lender; (b) the parent
company of any Lender and/or any Affiliate of such Lender which is at least
fifty (50%) percent owned by such Lender or its parent company; (c) any person
(whether a corporation, partnership, trust or otherwise) that is engaged in the
business of making, purchasing, holding or otherwise investing in bank loans and
similar extensions of credit in the ordinary course of its business and is
administered or managed by a Lender or with respect to any Lender that is a fund
which invests in bank loans and similar extensions of credit, any other fund
that invests in bank loans and similar extensions of credit and is managed by
the same investment advisor as such Lender or by an Affiliate of such investment
advisor, and in each case is approved by Agent; and (d) any other commercial
bank, financial institution or "accredited investor" (as defined in Regulation D
under the Securities Act of 1933) approved by Agent, provided, that, (i) neither
any Borrower nor any Guarantor or any Affiliate of any Borrower or Guarantor
shall qualify as an Eligible Transferee and (ii) no Person to whom any
Indebtedness which is in any way subordinated in right of payment to any other
Indebtedness of any Borrower or Guarantor shall qualify as an Eligible
Transferee, except as Agent may otherwise specifically agree.
1.35 "Environmental Laws" shall mean all foreign, Federal, State and local
laws (including common law), legislation, rules, codes, licenses, permits
(including any conditions imposed therein), authorizations, judicial or
administrative decisions, injunctions or agreements between any Borrower or
Guarantor and any Governmental Authority, (a) relating to pollution and the
protection, preservation or restoration of the environment (including air, water
vapor, surface water, ground water, drinking water, drinking water supply,
surface land, subsurface land, plant and animal life or any other natural
resource), or to human health or safety, (b) relating to the exposure to, or the
use, storage, recycling, treatment, generation, manufacture, processing,
distribution, transportation, handling, labeling, production, release or
disposal, or threatened release, of Hazardous Materials, or (c) relating to all
laws with regard to recordkeeping, notification, disclosure and reporting
requirements respecting Hazardous Materials. The term "Environmental Laws"
includes (i) the Federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Federal Superfund Amendments and Reauthorization Act,
the Federal Water Pollution Control Act of 1972, the Federal Clean Water Act,
the Federal Clean Air Act, the Federal Resource Conservation and Recovery Act of
1976 (including the Hazardous and Solid Waste Amendments thereto), the Federal
Solid Waste Disposal and the Federal Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act, and the Federal Safe Drinking Water
Act of 1974, (ii) applicable state counterparts to such laws and (iii) any
common law or equitable doctrine that may impose liability or obligations for
injuries or damages due to, or threatened as a result of, the presence of or
exposure to any Hazardous Materials.
1.36 "Equipment" shall mean, as to each Borrower and Guarantor, all of such
Borrower's and Guarantor's now owned and hereafter acquired equipment, wherever
located, including machinery, data processing and computer equipment (whether
owned or licensed and including embedded software), vehicles, tools, furniture,
fixtures, all attachments, accessions and property now or hereafter affixed
thereto or used in connection therewith, and substitutions and replacements
thereof, wherever located.
1.37 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, together with all rules, regulations and interpretations thereunder or
related thereto.
1.38 "ERISA Affiliate" shall mean any person required to be aggregated with
any Borrower, any Guarantor or any of its or their respective Subsidiaries under
Sections 414(b), 414(c), 414(m) or 414(o) of the Code.
1.39 "ERISA Event" shall mean (a) any "reportable event", as defined in
Section 4043(c) of ERISA or the regulations issued thereunder, with respect to a
Pension Plan, other than events as to which the requirement of notice has been
waived in regulations by the Pension Benefit Guaranty Corporation; (b) the
adoption of any amendment to a Pension Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c)
a complete or partial withdrawal by any Borrower, Guarantor or any ERISA
Affiliate from a Multiemployer Plan or a cessation of operations which is
treated as such a withdrawal or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Pension Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the Pension Benefit Guaranty
Corporation to terminate a Pension Plan; (e) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan; (f) the
imposition of any liability under Title IV of ERISA, other than the Pension
Benefit Guaranty Corporation premiums due but not delinquent under Section 4007
of ERISA, upon any Borrower, Guarantor or any ERISA Affiliate in excess of
$750,000 and (g) any other event or condition with respect to a Plan including
any Pension Plan subject to Title IV of ERISA maintained, or contributed to, by
any ERISA Affiliate that could reasonably be expected to result in liability of
any Borrower in excess of $750,000.
1.40 "Eurodollar Rate Loans" shall mean any Loans or portion thereof on
which interest is payable based on the Adjusted Eurodollar Rate in accordance
with the terms hereof.
1.41 "Event of Default" shall mean the occurrence or existence of any event
or condition described in Section 10.1 hereof.
1.42 "EWP" shall have the meaning set forth in the preamble to this
Agreement.
1.43 "Excess Availability" shall mean, as to each Borrower, the amount
calculated at any date equal to: (a) the lesser of: (i) the Borrowing Base of
such Borrower and (ii) the Revolving Loan Limit of such Borrower (in each case
under (i) or (ii) after giving effect to any Reserves other than any Reserves in
respect of Letter of Credit Obligations), minus (b) the sum of: (i) the
outstanding principal amount of the Revolving Loans as to such Borrower, plus
(ii) the amount of all Reserves then established in respect of Letter of Credit
Obligations as to such Borrower, plus (iii) the aggregate amount of all then
outstanding and unpaid trade payables and other obligations of such Borrower
which are outstanding more than sixty (60) days past due as of the end of the
immediately preceding month or at Agent's option, as of a more recent date based
on such reports as Agent may from time to time specify (other than trade
payables or other obligations being contested or disputed by such Borrower in
good faith), plus (iv) without duplication, the amount of checks issued by such
Borrower to pay trade payables and other obligations which are more than sixty
(60) days past due as of the end of the immediately preceding month or at
Agent's option, as of a more recent date based on such reports as Agent may from
time to time specify (other than trade payables or other obligations being
contested or disputed by such Borrower in good faith), but not yet sent.
1.44 "Excess Cash Flow" means, without duplication, with respect to any
fiscal year of Borrowers and their Subsidiaries, consolidated net income plus
(a) depreciation, amortization and Interest Expense to the extent deducted in
determining consolidated net income, plus decreases or minus increases (as the
case may be) in (b) Working Capital, minus (c) Interest Expense paid or accrued
(excluding any original issue discount, interest paid in kind or amortized debt
discount, to the extent included in determining Interest Expense) and scheduled
principal payments paid or payable in respect of Indebtedness for borrowed
money, plus or minus (as the case may be), (d) extraordinary gains or losses
which are cash items not included in the calculation of net income, plus (e)
taxes deducted in determining consolidated net income to the extent not paid for
in cash minus (f) Capital Expenditures (excluding the financed portion thereof).
1.45 "Exchange Act" shall mean the Securities Exchange Act of 1934,
together with all rules, regulations and interpretations thereunder or related
thereto.
1.46 "Existing Lenders" shall mean the lenders to Borrowers listed on
Schedule 1.37 hereto and their respective predecessors, successors and assigns.
1.47 "Existing Letters of Credit" shall mean, collectively, the letters of
credit issued for the account of a Borrower or Guarantor or for which such
Borrower or Guarantor is otherwise liable listed on Schedule 1.38 hereto, as the
same now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
1.48 "Fee Letter" shall mean the letter agreement, dated as of the date
hereof, by and among Borrowers and Agent, setting forth certain fees payable by
Borrowers to Agent, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
1.49 "Financing Agreements" shall mean, collectively, this Agreement and
all notes, guarantees, security agreements, deposit account control agreements,
investment property control agreements, intercreditor agreements and all other
agreements, documents and instruments now or at any time hereafter executed
and/or delivered by any Borrower or Guarantor in connection with this Agreement;
provided, that, (a) the term Financing Agreements shall include the Peoria
Intercreditor Agreement and all Mortgages, deposit account control agreements
and similar agreements executed prior to the date hereof to which Agent and any
Borrower are a party that have been amended to reflect the transactions under
this Agreement and (b) in no event shall the term Financing Agreements be deemed
to include any Hedge Agreement.
1.50 "Fixed Charge Coverage Ratio" shall mean with respect to any Person
for any fiscal period, the ratio of EBITDAR to Fixed Charges.
1.51 "Fixed Charges" means, with respect to any Person for any fiscal
period, (a) the aggregate of all Interest Expense paid or payable during such
period, plus (b) scheduled payments of principal with respect to Indebtedness
during such period including scheduled payments with respect to Capital Leases,
plus (c) income taxes paid or payable in cash during such fiscal period. This
definition of Fixed Charges shall exclude any scheduled lump sum payments
required to be made by Borrowers in 2007, 2008 and 2009 on the Remaining Notes.
1.52 "Foreign Lender" shall mean any Lender that is organized under the
laws of a jurisdiction other than that in which a Borrower is resident for tax
purposes. For purposes of this definition, the United States of America, each
State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.
1.53 "Funding Bank" shall have the meaning given to such term in Section
3.3 hereof.
1.54 "F V Steel" shall have the meaning set forth in the preamble to this
Agreement.
1.55 "GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time as set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board which are applicable to the
circumstances as of the date of determination consistently applied, except that,
for purposes of Sections 9.17 and 9.18 hereof, GAAP shall be determined on the
basis of such principles in effect on the date hereof and consistent with those
used in the preparation of the most recent audited financial statements
delivered to Agent prior to the date hereof.
1.56 "Governmental Authority" shall mean any nation or government, any
state, province, or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
1.57 "Guarantors" shall mean any Person that at any time after the date
hereof becomes party to a guarantee in favor of Agent or any Lender or otherwise
liable on or with respect to the Obligations or who is the owner of any property
which is security for the Obligations (other than Borrowers); each sometimes
being referred to herein individually as a "Guarantor".
1.58 "Hazardous Materials" shall mean any hazardous, toxic or dangerous
substances, materials and wastes, including hydrocarbons (including naturally
occurring or man-made petroleum and hydrocarbons), flammable explosives,
asbestos, urea formaldehyde insulation, radioactive materials, biological
substances, polychlorinated biphenyls, pesticides, herbicides and any other kind
and/or type of pollutants or contaminants (including materials which include
hazardous constituents), sewage, sludge, industrial slag, solvents and/or any
other similar substances, materials, or wastes and including any other
substances, materials or wastes that are or become regulated under any
Environmental Law (including any that are or become classified as hazardous or
toxic under any Environmental Law).
1.59 "Hedge Agreement" shall mean an agreement between any Borrower and
Agent, any Lender, any Affiliate of any Lender or any other financial
institution acceptable to Agent (and in each case as to any such Lender,
Affiliate or other financial institution only to the extent approved by Agent)
that is a rate swap agreement, basis swap, forward rate agreement, commodity
swap, interest rate option, forward foreign exchange agreement, spot foreign
exchange agreement, rate cap agreement rate, floor agreement, rate collar
agreement, currency swap agreement, cross-currency rate swap agreement, currency
option, any other similar agreement (including any option to enter into any of
the foregoing or a master agreement for any the foregoing together with all
supplements thereto) for the purpose of protecting against or managing exposure
to fluctuations in interest or exchange rates, currency valuations or commodity
prices; sometimes being collectively referred to herein as "Hedge Agreements".
1.60 "Indebtedness" shall mean, with respect to any Person, any liability,
whether or not contingent, (a) in respect of borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof) or evidenced by bonds, notes, debentures or similar
instruments; (b) representing the balance deferred and unpaid of the purchase
price of any property or services (other than an account payable to a trade
creditor (whether or not an Affiliate) incurred in the ordinary course of
business of such Person and payable in accordance with customary trade
practices); (c) all obligations as lessee under leases which have been, or
should be, in accordance with GAAP recorded as Capital Leases; (d) any
contractual obligation, contingent or otherwise, of such Person to pay or be
liable for the payment of any indebtedness described in this definition of
another Person, including, without limitation, any such indebtedness, directly
or indirectly guaranteed, or any agreement to purchase, repurchase, or otherwise
acquire such indebtedness, obligation or liability or any security therefor, or
to provide funds for the payment or discharge thereof, or to maintain solvency,
assets, level of income, or other financial condition; (e) all obligations with
respect to redeemable stock and redemption or repurchase obligations under any
Capital Stock or other equity securities issued by such Person; (f) all
reimbursement obligations and other liabilities of such Person with respect to
surety bonds (whether bid, performance or otherwise), letters of credit,
banker's acceptances, drafts or similar documents or instruments issued for such
Person's account; (g) all indebtedness of such Person in respect of indebtedness
of another Person for borrowed money or indebtedness of another Person otherwise
described in this definition which is secured by any consensual lien, security
interest, collateral assignment, conditional sale, mortgage, deed of trust, or
other encumbrance on any asset of such Person, whether or not such obligations,
liabilities or indebtedness are assumed by or are a personal liability of such
Person, all as of such time; (h) all obligations, liabilities and indebtedness
of such Person (marked to market) arising under swap agreements, cap agreements
and collar agreements and other agreements or arrangements designed to protect
such person against fluctuations in interest rates or currency or commodity
values; (i) all obligations owed by such Person under License Agreements with
respect to non-refundable, advance or minimum guarantee royalty payments; (j)
indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer to the extent such Person is liable therefor
as a result of such Person's ownership interest in such entity, except to the
extent that the terms of such indebtedness expressly provide that such Person is
not liable therefor or such Person has no liability therefor as a matter of law
and (k) the principal and interest portions of all rental obligations of such
Person under any synthetic lease or similar off-balance sheet financing where
such transaction is considered to be borrowed money for tax purposes but is
classified as an operating lease in accordance with GAAP.
1.61 "Indenture" shall mean that certain Indenture dated as of March 15,
2002 between Keystone and U.S. Bank National Association in respect of the 8%
Subordinated Secured Notes due March 15, 2009 issued by Keystone.
1.62 "Indenture Intercreditor Agreement" means that certain Letter
Agreement dated as of March 15, 2002 among U.S. Bank National Association, the
County of Peoria, Illinois and Agent.
1.63 "Information Certificate" shall mean, collectively, the Information
Certificates of Borrowers and Guarantors constituting Exhibit B hereto
containing material information with respect to Borrowers and Guarantors, their
respective businesses and assets provided by or on behalf of Borrowers and
Guarantors to Agent in connection with the preparation of this Agreement and the
other Financing Agreements and the financing arrangements provided for herein.
1.64 "Intellectual Property" shall mean, as to each Borrower and Guarantor,
such Borrower's and Guarantor's now owned and hereafter arising or acquired:
patents, patent rights, patent applications, copyrights, works which are the
subject matter of copyrights, copyright applications, copyright registrations,
trademarks, servicemarks, trade names, trade styles, trademark and service mark
applications, and licenses and rights to use any of the foregoing and all
applications, registrations and recordings relating to any of the foregoing as
may be filed in the United States Copyright Office, the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof, any political subdivision thereof or in any other country or
jurisdiction, together with all rights and privileges arising under applicable
law with respect to any Borrower's or Guarantor's use of any of the foregoing;
all extensions, renewals, reissues, divisions, continuations, and
continuations-in-part of any of the foregoing; all rights to sue for past,
present and future infringement of any of the foregoing; inventions, trade
secrets, formulae, processes, compounds, drawings, designs, blueprints, surveys,
reports, manuals, and operating standards; goodwill (including any goodwill
associated with any trademark or servicemark, or the license of any trademark or
servicemark); customer and other lists in whatever form maintained; trade secret
rights, copyright rights, rights in works of authorship, domain names and domain
name registration; software and contract rights relating to computer software
programs, in whatever form created or maintained.
1.65 "Intercompany Services Agreement" means that certain Intercorporate
Services Agreement effective as of September 1, 2005 between Contran Corporation
and Keystone.
1.66 "Interest Expense" means, with respect to any Person for any fiscal
period, interest expense (whether cash or non-cash) of such Person determined in
accordance with GAAP for the relevant period ended on such date, including,
interest expense with respect to any Indebtedness for borrowed money of such
Person and interest expense for the relevant period that has been capitalized on
the balance sheet of such Person.
1.67 "Interest Period" shall mean for any Eurodollar Rate Loan, a period of
approximately one (1), two (2), or three (3) months duration as any Borrower (or
Administrative Borrower on behalf of such Borrower) may elect, the exact
duration to be determined in accordance with the customary practice in the
applicable Eurodollar Rate market; provided, that, such Borrower (or
Administrative Borrower on behalf of such Borrower) may not elect an Interest
Period which will end after the last day of the then-current term of this
Agreement.
1.68 "Interest Rate" shall mean,
(a) Subject to clauses (b) and (c) of this definition below:
(i) as to Prime Rate Loans that are Revolving Loans, a rate equal to
the Applicable Margin for Prime Rate Loans that are Revolving Loans then in
effect plus the Prime Rate,
(ii) as to Prime Rate Loans that are Term Loans, a rate equal to the
Applicable Margin for Prime Rate Loans that are Term Loans then in effect plus
the Prime Rate,
(iii) as to Eurodollar Rate Loans that are Revolving Loans, a rate
equal to the Applicable Margin for Eurodollar Loans that are Revolving Loans
then in effect plus the Adjusted Eurodollar Rate (in each case, based on the
London Interbank Offered Rate applicable for the Interest Period selected by a
Borrower, or by Administrative Borrower on behalf of such Borrower, as in effect
two (2) Business Days prior to the commencement of the Interest Period, whether
such rate is higher or lower than any rate previously quoted to any Borrower or
Guarantor),
(iv) as to Eurodollar Rate Loans that are Term Loans, a rate equal to
the Applicable Margin for Eurodollar Rate Loans that are Term Loans then in
effect plus the Adjusted Eurodollar Rate (in each case, based on the Eurodollar
Rate applicable for the Interest Period selected by a Borrower, or by
Administrative Borrower on behalf of such Borrower, as in effect two (2)
Business Days prior to the commencement of the Interest Period, whether such
rate is higher or lower than any rate previously quoted to any Borrower or
Guarantor), and
(v) as to fees for Letter of Credit Obligations, a rate equal to the
Applicable Margin for Letter of Credit Obligations then in effect;
(b) If Borrowers fail to deliver the collateral reports required under
Section 7.1(a), the Agent may elect to increase the Applicable Margins to their
highest levels set forth in the definition of the term "Applicable Margins"
(without regard to the amount of Excess Availability) effective as of the first
Business Day of such month in which such failure occurred until such time as
Administrative Borrower satisfies such delivery requirement; and
(c) Notwithstanding anything to the contrary contained in clauses (a) and
(b) of this definition, the Applicable Margins otherwise used to calculate the
Interest Rate for Prime Rate Loans, Eurodollar Rate Loans and fees for Letter of
Credit Obligations shall be the highest respective per annum rates set forth in
the definition of "Applicable Margins" for each such category (without regard to
the amount of Excess Availability) plus in each case two percent (2%) per annum,
at Agent's option, (i) either (A) without notice, for the period on and after
the date of termination or non-renewal hereof until such time as all Obligations
(other than contingent indemnification obligations not asserted or due) are paid
and satisfied in full in immediately available funds, or (B) upon notice to the
Administrative Borrower (which notice shall not be required if an Event of
Default has occurred and is continuing under Sections 10.1(g) and (h) of this
Agreement), for the period from and after the date of the occurrence of any
Event of Default, and for so long as such Event of Default is continuing and
(ii) on the Revolving Loans to any Borrower at any time outstanding in excess of
the Borrowing Base of such Borrower or the Revolving Loan Limit of such Borrower
(whether or not such excess(es) arise or are made with or without Agent's or any
Lender's knowledge or consent and whether made before or after an Event of
Default).
1.69 "Inventory" shall mean, as to each Borrower and Guarantor, all of such
Borrower's and Guarantor's now owned and hereafter existing or acquired goods,
wherever located, which (a) are leased by such Borrower or Guarantor as lessor;
(b) are held by such Borrower or Guarantor for sale or lease or to be furnished
under a contract of service; (c) are furnished by such Borrower or Guarantor
under a contract of service; or (d) consist of raw materials, work in process,
finished goods or materials used or consumed in its business.
1.70 "Inventory Loan Limit" shall mean, as to each Borrower, at any time,
the amount equal to $35,000,000 minus the then outstanding principal amount of
Revolving Loans to the other Borrowers based on Eligible Inventory (and
including Letters of Credit to the extent provided in the definition of the term
Borrowing Base).
1.71 "Investment Property Control Agreement" shall mean an agreement in
writing, in form and substance reasonably satisfactory to Agent, by and among
Agent, any Borrower or Guarantor (as the case may be) and any securities
intermediary, commodity intermediary or other person who has custody, control or
possession of any investment property of such Borrower or Guarantor
acknowledging that such securities intermediary, commodity intermediary or other
person has custody, control or possession of such investment property on behalf
of Agent, that it will comply with entitlement orders originated by Agent with
respect to such investment property, or other instructions of Agent, and has
such other terms and conditions as Agent may reasonably require.
1.72 "Keystone" shall have the meaning set forth in the preamble to this
Agreement.
1.73 "KWP" shall have the meaning set forth in the preamble to this
Agreement.
1.74 "Lenders" shall mean the financial institutions who are signatories
hereto as Lenders and other persons made a party to this Agreement as a Lender
in accordance with Section 13.7 hereof, and their respective successors and
assigns; each sometimes being referred to herein individually as a "Lender".
1.75 "Letter of Credit Documents" shall mean, with respect to any Letter of
Credit, such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing for the rights
and obligations of the parties concerned or at risk or any collateral security
for such obligations. 1.76 "Letter of Credit Limit" shall mean $6,000,000.
1.77 "Letter of Credit Obligations" shall mean, at any time, the sum of (a)
the aggregate undrawn amount of all Letters of Credit outstanding at such time,
plus (b) the aggregate amount of all drawings under Letters of Credit for which
the issuer thereof has not at such time been reimbursed, plus (c) without
duplication, the aggregate amount of all payments made by each Lender to the
issuer with respect to such Lender's participation in Letters of Credit as
provided in Section 2.2 for which Borrowers have not at such time reimbursed the
Lenders, whether by way of a Revolving Loan or otherwise.
1.78 "Letters of Credit" shall mean all letters of credit (whether
documentary or stand-by and whether for the purchase of inventory, equipment or
otherwise) issued by an issuer for the account of any Borrower pursuant to this
Agreement, and all amendments, renewals, extensions or replacements thereof and
including, but not limited to, the Existing Letters of Credit. The issuer of the
Letters of Credit shall be, and all references to such issuer herein shall mean,
Wachovia Bank, National Association and its successors and assigns or such other
bank as Agent may from time to time designate.
1.79 "License Agreements" shall have the meaning set forth in Section 8.11
hereof.
1.80 "Loan Limit" shall mean, as to each Borrower, at any time, the amount
equal to the Maximum Credit minus the then outstanding principal amount of the
Loans and the Letters of Credit provided to the other Borrowers.
1.81 "Loans" shall mean, collectively, the Revolving Loans and the Term
Loans.
1.82 "London Interbank Offered Rate" shall mean, with respect to any
Eurodollar Loan for the Interest Period applicable thereto, the rate of interest
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing
on Telerate Page 3750 (or any successor page) as the London interbank offered
rate for deposits in U.S. Dollars at approximately 11:00 A.M. (London time) two
(2) Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, that, if more than one rate is
specified on Telerate Page 3750, the applicable rate shall be the arithmetic
mean of all such rates. If, for any reason, such rate is not available, the term
"London Interbank Offered Rate" shall mean, with respect to any Eurodollar Loan
for the Interest Period applicable thereto, the rate of interest per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two (2) Business Days prior to the first
day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such rates.
1.83 "Material Adverse Effect" shall mean a material adverse effect on (a)
the financial condition, business, performance or operations of Borrowers taken
as a whole; (b) the legality, validity or enforceability of any of the Financing
Agreements; (c) the legality, validity, enforceability, perfection or priority
of the security interests and liens of Agent upon the Collateral; (d) the
Collateral or its value; (e) the ability of any Borrower to repay the
Obligations or of any Borrower to perform its obligations under this Agreement
or any of the other Financing Agreements as and when to be performed; or (f) the
ability of Agent and the Lenders to enforce the Obligations or realize upon the
Collateral or otherwise with respect to the rights and remedies of Agent and
Lenders under any of the Financing Agreements.
1.84 "Material Contract" shall mean (a) any contract or other agreement
(other than the Financing Agreements), written or oral, of any Borrower or
Guarantor involving monetary liability of or to any Person in an amount in
excess of $750,000 in any fiscal year and (b) any other contract or other
agreement (other than the Financing Agreements), whether written or oral, to
which any Borrower or Guarantor is a party as to which the breach,
nonperformance, cancellation or failure to renew by any party thereto would have
a Material Adverse Effect.
1.85 "Maximum Credit" shall mean the amount of $80,000,000.
1.86 "Mortgaged Properties" shall mean Upper Sandusky, Ohio, Hortonville,
Wisconsin and Peoria, Illinois.
1.87 "Mortgages" shall mean, individually and collectively, each of the
following (as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced): (a) the Mortgage,
Security Agreement, Assignment of Leases and Rents, Financing Statement and
Fixture Filing, dated of even date herewith, by EWP in favor of Agent with
respect to the Real Property and related assets of such Borrower located in
Upper Sandusky, Ohio, (b) the Mortgage, Security Agreement, Assignment of Leases
and Rents, Financing Statement and Fixture Filing, dated of even date herewith,
by F V Steel in favor of Agent with respect to the Real Property and related
assets of such Borrower located in Hortonville, Wisconsin, and (c) the Mortgage,
Security Agreement, Assignment of Leases and Rents, Financing Statement and
Fixture Filing, dated of even date herewith, by Keystone in favor of Agent with
respect to the Real Property and related assets of such Borrower located in
Peoria, Illinois.
1.88 "Multiemployer Plan" shall mean a "multi-employer plan" as defined in
Section 4001(a)(3) of ERISA which is or was at any time during the current year
or the immediately preceding six (6) years contributed to by any Borrower,
Guarantor or any ERISA Affiliate or with respect to which any Borrower,
Guarantor or any ERISA Affiliate may incur any liability.
1.89 "Net Recovery Percentage" shall mean the fraction, expressed as a
percentage, (a) the numerator of which is the amount equal to the amount of the
recovery in respect of the Inventory or Equipment, as applicable, at such time
on a "net orderly liquidation value" basis as set forth in the most recent
appraisal of Inventory or Equipment, as applicable, received by Agent in
accordance with Sections 7.3 or 7.4, as applicable, net of operating expenses,
liquidation expenses and commissions, and (b) the denominator of which is the
applicable value of the aggregate amount of the Inventory or Equipment, as
applicable, subject to such appraisal.
1.90 "Obligations" shall mean (a) any and all Loans, Letter of Credit
Obligations and all other obligations, liabilities and indebtedness of every
kind, nature and description owing by any or all of Borrowers and Guarantors to
Agent or any Lender and/or any of their Affiliates, including principal,
interest, charges, fees, costs and expenses, however evidenced, whether as
principal, surety, endorser, guarantor or otherwise, arising under this
Agreement or any of the other Financing Agreements or on account of any Letter
of Credit and all other Letter of Credit Obligations, whether now existing or
hereafter arising, whether arising before, during or after the initial or any
renewal term of this Agreement or after the commencement of any case with
respect to such Borrower or Guarantor under the United States Bankruptcy Code or
any similar statute (including the payment of interest and other amounts which
would accrue and become due but for the commencement of such case, whether or
not such amounts are allowed or allowable in whole or in part in such case),
whether direct or indirect, absolute or contingent, joint or several, due or not
due, primary or secondary, liquidated or unliquidated, or secured or unsecured
and (b) for purposes only of Section 5.1 hereof and subject to the priority in
right of payment set forth in Section 6.4 hereof, all obligations, liabilities
and indebtedness of every kind, nature and description owing by any or all of
Borrowers to Agent, any Lender, any Affiliate of any Lender or any other
financial institution acceptable to Agent (and in each case as to any such
Lender, Affiliate of any Lender or other financial institution only to the
extent approved by Agent) arising under or pursuant to a Hedge Agreement,
whether now existing or hereafter arising, provided, that, (i) such obligations,
liabilities and indebtedness shall only be included within the Obligations if
upon Agent's request, Agent shall have entered into an agreement, in form and
substance satisfactory to Agent, with any Lender, any Affiliate of any Lender or
any other financial institution acceptable to Agent that is a counterparty to
such Hedge Agreement, as acknowledged and agreed to by Borrowers, providing for
the delivery to Agent by such counterparty of information with respect to the
amount of such obligations and providing for the other rights of Agent and such
Lender, Affiliate of any Lender or any other financial institution acceptable to
Agent, as the case may be, in connection with such arrangements and (ii) in no
event shall the party to such Hedge Agreement to whom such obligations,
liabilities or indebtedness are owing be deemed a Lender for purposes hereof to
the extent of and as to such obligations, liabilities or indebtedness other than
for purposes of Section 5.1 hereof and other than for purposes of Sections 12.1,
12.2, 12.3(b), 12.6, 12.7, 12.9, 12.12 and 13.6 hereof and in no event shall the
approval of any such person be required in connection with the release or
termination of any security interest or lien of Agent.
1.91 "Other Taxes" shall have the meaning given to such term in Section 6.5
hereof.
1.92 "Parent" shall mean Keystone and its successors and assigns.
1.93 "Participant" shall mean any financial institution that acquires and
holds a participation in the interest of any Lender in any of the Loans and
Letters of Credit in conformity with the provisions of Section 13.7 of this
Agreement governing participations.
1.94 "Peoria Debt" shall mean the obligations and liabilities of
Administrative Borrower to the County of Peoria, Illinois under that certain
Loan Agreement dated as of March 13, 2002 (as amended or otherwise modified from
time to time) between Administrative Borrower and the County of Peoria,
Illinois.
1.95 "Peoria Intercreditor Agreement" shall mean that certain Subordination
and Intercreditor Agreement dated as of March 15, 2002 (as amended or otherwise
modified from time to time) among Administrative Borrower, Agent and the County
of Peoria, Illinois.
1.96 "Permitted Holders" shall mean Contran Corporation, a Delaware
corporation and its Affiliates.
1.97 "Person" or "person" shall mean any individual, sole proprietorship,
partnership, corporation (including any corporation which elects subchapter S
status under the Code), limited liability company, limited liability
partnership, business trust, unincorporated association, joint stock
corporation, trust, joint venture or other entity or any government or any
agency or instrumentality or political subdivision thereof.
1.98 "Pension Plan" shall mean a pension plan (as defined in Section 3(2)
of ERISA) subject to Title IV of ERISA which any Borrower or Guarantor sponsors,
maintains, or to which any Borrower, Guarantor or ERISA Affiliate makes, is
making, or is obligated to make contributions, other than a Multiemployer Plan.
1.99 "Plan" shall mean an employee benefit plan (as defined in Section 3(3)
of ERISA) which any Borrower or Guarantor sponsors, maintains, or to which it
makes, is making, or is obligated to make contributions, or in the case of a
Multiemployer Plan has made contributions at any time during the immediately
preceding six (6) plan years or with respect to which any Borrower or Guarantor
may incur liability.
1.100 "Plan of Reorganization" shall mean the Borrowers' (other than EWP)
Third Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the United
States Bankruptcy Code dated June 24, 2005 (as amended on August 10, 2005), as
it may be amended from time to time to the extent permitted under Section 9.24
of this Agreement.
1.101 "Prime Rate" shall mean the rate from time to time publicly announced
by Wachovia Bank, National Association, or its successors, as its prime rate,
whether or not such announced rate is the best rate available at such bank.
1.102 "Prime Rate Loans" shall mean any Loans or portion thereof on which
interest is payable based on the Prime Rate in accordance with the terms
thereof.
1.103 "Pro Rata Share" shall mean as to any Lender, the fraction (expressed
as a percentage) the numerator of which is such Lender's Commitment and the
denominator of which is the aggregate amount of all of the Commitments of
Lenders, as adjusted from time to time in accordance with the provisions of
Section 13.7 hereof; provided, that, if the Commitments have been terminated,
the numerator shall be the unpaid amount of such Lender's Loans and its interest
in the Letters of Credit and the denominator shall be the aggregate amount of
all unpaid Loans and Letters of Credit.
1.104 "Real Property" shall mean all now owned and hereafter acquired real
property of each Borrower and Guarantor, including leasehold interests, together
with all buildings, structures, and other improvements located thereon and all
licenses, easements and appurtenances relating thereto, wherever located,
including the real property and related assets more particularly described in
the Mortgages.
1.105 "Real Property Closing Conditions" shall mean with respect to the
Mortgages for the real property located in Hortonville, Wisconsin and Upper
Sandusky Ohio, receipt by Agent of ALTA surveys, ALTA title commitments
(consistent with the requirements of Section 4.1(k) hereof) and such other
documents and instruments as Agent may reasonably require with respect to both
Mortgages all in form and substance reasonably satisfactory to Agent.
1.106 "Receivables" shall mean all of the following now owned or hereafter
arising or acquired property of each Borrower and Guarantor: (a) all Accounts;
(b) all interest, fees, late charges, penalties, collection fees and other
amounts due or to become due or otherwise payable in connection with any
Account; (c) all payment intangibles of such Borrower or Guarantor; (d) letters
of credit, indemnities, guarantees, security or other deposits and proceeds
thereof issued payable to any Borrower or Guarantor or otherwise in favor of or
delivered to any Borrower or Guarantor in connection with any Account; or (e)
all other accounts, contract rights, chattel paper, instruments, notes, general
intangibles and other forms of obligations owing to any Borrower or Guarantor,
whether from the sale and lease of goods or other property, licensing of any
property (including Intellectual Property or other general intangibles),
rendition of services or from loans or advances by any Borrower or Guarantor or
to or for the benefit of any third person (including loans or advances to any
Affiliates or Subsidiaries of any Borrower or Guarantor) or otherwise associated
with any Accounts, Inventory or general intangibles of any Borrower or Guarantor
(including, without limitation, choses in action, causes of action, tax refunds,
tax refund claims, any funds which may become payable to any Borrower or
Guarantor in connection with the termination of any Plan or other employee
benefit plan and any other amounts payable to any Borrower or Guarantor from any
Plan or other employee benefit plan, rights and claims against carriers and
shippers, rights to indemnification, business interruption insurance and
proceeds thereof, casualty or any similar types of insurance and any proceeds
thereof and proceeds of insurance covering the lives of employees on which any
Borrower or Guarantor is a beneficiary).
1.107 "Records" shall mean, as to each Borrower and Guarantor, all of such
Borrower's and Guarantor's present and future books of account of every kind or
nature, purchase and sale agreements, invoices, ledger cards, bills of lading
and other shipping evidence, statements, correspondence, memoranda, credit files
and other data relating to the Collateral or any account debtor, together with
the tapes, disks, diskettes and other data and software storage media and
devices, file cabinets or containers in or on which the foregoing are stored
(including any rights of any Borrower or Guarantor with respect to the foregoing
maintained with or by any other person).
1.108 "Reference Bank" shall mean Wachovia Bank, National Association, or
such other bank as Agent may from time to time designate.
1.109 "Renewal Date" shall have the meaning set forth in Section 13.1
hereof.
1.110 "Register" shall have the meaning set forth in Section 13.7 hereof.
1.111 "Remaining Notes" shall mean collectively, the Peoria Debt and the 8%
notes issued pursuant to the Indenture.
1.112 "Required Lenders" shall mean, at any time, those Lenders whose Pro
Rata Shares aggregate sixty-six and two-thirds (66 2/3%) percent or more of the
aggregate of the Commitments of all Lenders, or if the Commitments shall have
been terminated, Lenders to whom at least sixty-six and two-thirds (66 2/3%)
percent of the then outstanding Obligations are owing.
1.113 "Reserves" shall mean as of any date of determination, such amounts
as Agent may from time to time establish and revise reasonably and in good faith
reducing the amount of Revolving Loans and Letters of Credit which would
otherwise be available to any Borrower under the lending formula(s) provided for
herein: (a) to reflect events, conditions, contingencies or risks which, as
reasonably determined by Agent in good faith, materially and adversely affect,
or would have a reasonable likelihood of materially and adversely affecting,
either (i) the Collateral comprising the Borrowing Base or Collateral on which
the Term Loans are based, its value or the amount that will likely be received
by Agent from the sale or other disposition or realization upon such Collateral,
or (ii) the assets, business or prospects of any Borrower or (iii) the security
interests and other rights of Agent and the Lenders in the Collateral (including
the enforceability, perfection and priority thereof) or (b) to reflect Agent's
good faith belief that any collateral report or financial information furnished
by or on behalf of any Borrower or Guarantor to Agent is incomplete, inaccurate
or misleading in any material respect or (c) to reflect outstanding Letters of
Credit as provided in Section 2.2 hereof or (d) in respect of any state of facts
which Agent determines in good faith constitutes a Default or an Event of
Default. Without limiting the generality of the foregoing, Reserves may, at
Agent's option, be established to reflect: (i) dilution with respect to the
Accounts (based on the ratio of the aggregate amount of non-cash reductions in
Accounts for any period to the aggregate dollar amount of the sales of such
Borrower for such period) as calculated by Agent for any period is or is
reasonably anticipated to be greater than three (3%) percent; (ii) that the
orderly liquidation value of the Equipment or fair market value or quick sale
value of any of the Real Property as set forth in the most recent acceptable
appraisals received by Agent with respect thereto has declined so that the then
outstanding principal amount of the Term Loans is greater than such percentage
with respect to such appraised values as Agent used in establishing the original
principal amount of the Term Loans multiplied by such appraised values; (iii)
returns, discounts, claims, credits and allowances of any nature that are not
paid pursuant to the reduction of Accounts; (iv) sales, excise or similar taxes
included in the amount of any Accounts reported to Agent; (v) a change in the
turnover, age or mix of the categories of Inventory that adversely affects the
aggregate value of all Inventory; (vi) amounts due or to become due to owners
and lessors of premises where any Collateral is located, other than for those
locations where Agent has received a Collateral Access Agreement that Agent has
accepted in writing and (vii) obligations, liabilities or indebtedness
(contingent or otherwise) of Borrowers to Agent, any Lender, any Affiliate of
any Lender or any other financial institution acceptable to Agent (and in each
case as to any such , Lender, Affiliate of any Lender or other financial
institution only to the extent approved by Agent) arising under or in connection
with any Hedge Agreement of any Borrower with Agent, any Lender, any Affiliate
of any Lender or any other financial institution acceptable to Agent or as such
Person may otherwise require in connection therewith to the extent that such
obligations, liabilities or indebtedness constitute Obligations as such term is
defined herein or otherwise receive the benefit of the security interest of
Agent in any Collateral. The amount of any Reserve established by Agent shall
have a reasonable relationship to the event, condition or other matter which is
the basis for such reserve as determined by Agent in good faith and to the
extent that such Reserve is in respect of amounts that may be payable to third
parties Agent may, at its option, deduct such Reserve from the Revolving Loan
Limit, at any time that such limit is less than the amount of the Borrowing
Base.
1.114 "Restructuring Expenses" shall mean fees and expenses relating to the
Chapter 11 cases and the consummation of the Plan of Reorganization for any
period ending on or before December 31, 2006 and other business restructuring
fees and expenses of the type described in Financial Accounting Standards Board
146 for any period ending on or before December 31, 2006..
1.115 "Revolving Loan Limit" shall mean, as to each Borrower, at any time,
the amount equal to the $80,000,000 minus the sum of (a) the then outstanding
principal amount of the Revolving Loans and Letters of Credit provided to the
other Borrowers plus (b) the then outstanding principal amount of the Term
Loans.
1.116 "Revolving Loans" shall mean the loans now or hereafter made by or on
behalf of any Lender or by Agent for the account of any Lender on a revolving
basis pursuant to the Credit Facility (involving advances, repayments and
readvances) as set forth in Section 2.1 hereof.
1.117 "Solvent" shall mean, at any time with respect to any Person, that at
such time such Person (a) is able to pay its debts as they mature and has (and
has a reasonable basis to believe it will continue to have) sufficient capital
(and not unreasonably small capital) to carry on its business consistent with
its practices as of the date hereof, and (b) the assets and properties of such
Person at a fair valuation (and including as assets for this purpose at a fair
valuation all rights of subrogation, contribution or indemnification arising
pursuant to any guarantees given by such Person) are greater than the
Indebtedness of such Person, and including subordinated and contingent
liabilities computed at the amount which, such person has a reasonable basis to
believe, represents an amount which can reasonably be expected to become an
actual or matured liability (and including as to contingent liabilities arising
pursuant to any guarantee the face amount of such liability as reduced to
reflect the probability of it becoming a matured liability).
1.118 "Special Agent Advances" shall have the meaning set forth in Section
12.11 hereof.
1.119 "Subsidiary" or "subsidiary" shall mean, with respect to any Person,
any corporation, limited liability company, limited liability partnership or
other limited or general partnership, trust, association or other business
entity of which an aggregate of at least a majority of the outstanding Capital
Stock or other interests entitled to vote in the election of the board of
directors of such corporation (irrespective of whether, at the time, Capital
Stock of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency), managers, trustees
or other controlling persons, or an equivalent controlling interest therein, of
such Person is, at the time, directly or indirectly, owned by such Person and/or
one or more subsidiaries of such Person. Notwithstanding the foregoing, the term
"Subsidiary" shall exclude Sherman Wire Company, Sherman Wire of Caldwell, Inc.,
J.L. Prescott Company and De Soto Environmental Management, Inc., each of which
is to be managed for the benefit of its creditors or liquidated pursuant to the
Plan of Reorganization.
1.120 "Term A Loans" shall mean, collectively, the term loans made by or on
behalf of Lenders as provided for in Section 2.3(a) hereof and based on 40% of
the appraised net orderly liquidation value of such Borrowers' Equipment as
determined by Agent based on appraisals received prior to the date hereof.
1.121 "Term B Loans" shall mean, collectively, the term loans made by or on
behalf of Lenders as provided for in Section 2.3(b) hereof and based on the
lesser of (a) 60% of the appraised fair market value of EWP's and FV Steel's
Real Property as determined by Agent based on appraisals received prior to the
date hereof or (b) 80% of the quick sale value of such Borrowers' Real Property
as determined by Agent based on appraisals received prior to the date hereof.
1.122 "Term C Loans" shall mean, collectively, the term loans made by or on
behalf of Lenders to any Borrower after the date hereof as provided for in
Section 2.3(c) hereof.
1.123 "Term Loans" shall mean, collectively, the Term A Loans, Term B Loans
and Term C Loans.
1.124 "Trustee Debt" shall mean the obligations and liabilities of Keystone
and FV Steel to the trustee for the Holders of the Class A6 Claims (as such
terms are defined in the Plan of Reorganization) under that certain Promissory
Note dated as of the date hereof issued by Keystone and FV Steel in favor of
such trustee.
1.125 "Trustee Intercreditor Agreement" shall mean that certain
Subordination and Intercreditor Agreement dated as of the date hereof (as
amended or otherwise modified from time to time) among Keystone, FV Steel, Agent
and the trustee for the Holders of the Class A6 Claims (as such terms are
defined in the Plan of Reorganization).
1.126 "UCC" shall mean the Uniform Commercial Code as in effect in the
State of Illinois, and any successor statute, as in effect from time to time
(except that terms used herein which are defined in the Uniform Commercial Code
as in effect in the State of Illinois on the date hereof shall continue to have
the same meaning notwithstanding any replacement or amendment of such statute
except as Agent may otherwise determine).
1.127 "Value" shall mean, as determined by Agent in good faith, with
respect to Inventory, the lower of (a) cost computed on a first-in first-out
basis in accordance with GAAP or (b) market value, provided, that, for purposes
of the calculation of the Borrowing Base, the Value of the Inventory shall not
include: (A) the portion of the value of Inventory equal to the profit earned by
any Affiliate on the sale thereof to any Borrower or (B) write-ups or
write-downs in value with respect to currency exchange rates.
1.128 "Voting Stock" shall mean with respect to any Person, (a) one (1) or
more classes of Capital Stock of such Person having general voting powers to
elect at least a majority of the board of directors, managers or trustees of
such Person, irrespective of whether at the time Capital Stock of any other
class or classes have or might have voting power by reason of the happening of
any contingency, and (b) any Capital Stock of such Person convertible or
exchangeable without restriction at the option of the holder thereof into
Capital Stock of such Person described in clause (a) of this definition.
1.129 "Wachovia" shall mean Wachovia Capital Finance Corporation (Central),
an Illinois corporation, in its individual capacity, and its successors and
assigns.
1.130 "Working Capital" shall mean as to any Person, at any time, in
accordance with GAAP, on a consolidated basis for such Person and its
subsidiaries (if any), the amount equal to the difference between: (a) the
aggregate net book value of all current assets of such Person and its
subsidiaries (as determined in accordance with GAAP), calculating the book value
of inventory for this purpose on a first-in-first-out basis, and (b) all current
liabilities of such Person and its subsidiaries (as determined in accordance
with GAAP), provided, that, as to Parent, for purposes of Section 9.18, the
liabilities of Parent and its Subsidiaries to Agent and Lenders under this
Agreement shall not be considered current liabilities (whether or not classified
as current liabilities in accordance with GAAP).
SECTION 2. CREDIT FACILITIES
2.1 Loans.
(a) Subject to and upon the terms and conditions contained herein, each
Lender severally (and not jointly) agrees to make its Pro Rata Share of
Revolving Loans to each Borrower (other than F V Steel) from time to time in
amounts requested by such Borrower (or Administrative Borrower on behalf of such
Borrower) up to the aggregate amount outstanding for all Lenders at any time
equal to the lesser of: (i) the Borrowing Base of such Borrower at such time or
(ii) the Revolving Loan Limit of such Borrower at such time.
(b) Except in Agent's discretion, with the consent of all Lenders, or as
otherwise provided herein, (i) the aggregate amount of the Loans and the Letter
of Credit Obligations outstanding at any time shall not exceed the Maximum
Credit, (ii) the aggregate principal amount of the Revolving Loans and Letter of
Credit Obligations outstanding at any time to a Borrower shall not exceed the
Borrowing Base of such Borrower, (iii) the aggregate principal amount of the
Loans and Letter of Credit Obligations outstanding at any time to a Borrower
shall not exceed the Loan Limit of such Borrower, (iv) the aggregate principal
amount of the Revolving Loans outstanding to a Borrower based on the Eligible
Inventory of such Borrower shall not exceed the Inventory Loan Limit of such
Borrower and (v) the aggregate principal amount of the Revolving Loans
outstanding at any time to Borrowers based on the Eligible Inventory shall not
exceed $35,000,000.
(c) In the event that (i) the aggregate amount of the Loans and the Letter
of Credit Obligations outstanding at any time exceed the Maximum Credit, or (ii)
except as otherwise provided herein, the aggregate principal amount of the
Revolving Loans and Letter of Credit Obligations outstanding to a Borrower
exceed the Borrowing Base of such Borrower or the Revolving Loan Limit of such
Borrower, or (iii) the aggregate principal amount of Revolving Loans and Letter
of Credit Obligations based on the Eligible Inventory of a Borrower exceed the
Inventory Loan Limit of such Borrower, or (iv) the aggregate principal amount of
Revolving Loans and Letters of Credit based on the Eligible Inventory of all
Borrowers exceeds the sublimit set forth above, such event shall not limit,
waive or otherwise affect any rights of Agent or Lenders in such circumstances
or on any future occasions and Borrowers shall, upon demand by Agent, which may
be made at any time or from time to time, immediately repay to Agent the entire
amount of any such excess(es) for which payment is demanded.
2.2 Letters of Credit.
(a) Subject to and upon the terms and conditions contained herein and in
the Letter of Credit Documents, at the request of a Borrower (other than F V
Steel) (or Administrative Borrower on behalf of such Borrower), Agent agrees to
provide or arrange for the account of such Borrower one or more Letters of
Credit, for the ratable risk of each Lender according to its Pro Rata Share,
containing terms and conditions acceptable to Agent and the issuer thereof. The
issuer of the Letters of Credit will be Wachovia Bank, National Association or
such other bank as Agent may from time to time designate.
(b) The Borrower requesting such Letter of Credit (or Administrative
Borrower on behalf of such Borrower) shall give Agent three (3) Business Days'
prior written notice of such Borrower's request for the issuance of a Letter of
Credit. Such notice shall be irrevocable and shall specify the original face
amount of the Letter of Credit requested, the effective date of issuance of such
requested Letter of Credit, whether such Letter of Credit may be drawn in a
single or in partial draws, the date on which such requested Letter of Credit is
to expire (which date shall be a Business Day and in no event shall such date be
less than ten (10) days prior to the end of the then current term of this
Agreement), the purpose for which such Letter of Credit is to be issued, and the
beneficiary of the requested Letter of Credit. The Borrower requesting the
Letter of Credit (or Administrative Borrower on behalf of such Borrower) shall
attach to such notice the proposed terms of the Letter of Credit. The renewal or
extension of any Letter of Credit shall, for purposes hereof, be treated in all
respects the same as the issuance of a new Letter of Credit hereunder.
(c) In addition to being subject to the satisfaction of the applicable
conditions precedent contained in Section 4 hereof and the other terms and
conditions contained herein, no Letter of Credit shall be available unless each
of the following conditions precedent have been satisfied in a manner reasonably
satisfactory to Agent: (i) the Borrower requesting such Letter of Credit (or
Administrative Borrower on behalf of such Borrower) shall have delivered to the
proposed issuer of such Letter of Credit at such times and in such manner as
such proposed issuer may require, an application, in form and substance
satisfactory to such proposed issuer and Agent, for the issuance of the Letter
of Credit and such other Letter of Credit Documents as may be required pursuant
to the terms thereof, and the form and terms of the proposed Letter of Credit
shall be satisfactory to Agent and such proposed issuer; (ii) as of the date of
issuance, no order of any court, arbitrator or other Governmental Authority
shall purport by its terms to enjoin or restrain money center banks generally
from issuing letters of credit of the type and in the amount of the proposed
Letter of Credit, and no law, rule or regulation applicable to money center
banks generally and no request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over money center banks
generally shall prohibit, or request that the proposed issuer of such Letter of
Credit refrain from, the issuance of letters of credit generally or the issuance
of such Letters of Credit; (iii) after giving effect to the issuance of such
Letter of Credit, the Letter of Credit Obligations shall not exceed the Letter
of Credit Limit; and (iv) the Excess Availability of the Borrower requesting
such Letter of Credit, prior to giving effect to any Reserves with respect to
such Letter of Credit, on the date of the proposed issuance of any Letter of
Credit, shall be equal to or greater than: (A) if the proposed Letter of Credit
is for the purpose of purchasing Eligible Inventory and the documents of title
with respect thereto are consigned to the issuer, the sum of (1) the percentage
equal to one hundred (100%) percent minus the then applicable percentage with
respect to Eligible Inventory set forth in the definition of the term Borrowing
Base multiplied by the Value of such Eligible Inventory, plus (2) freight,
taxes, duty and other amounts which Agent estimates must be paid in connection
with such Inventory upon arrival and for delivery to one of such Borrower's
locations for Eligible Inventory within the United States of America and (B) if
the proposed Letter of Credit is for any other purpose or the documents of title
are not consigned to the issuer in connection with a Letter of Credit for the
purpose of purchasing Inventory, an amount equal to one hundred (100%) percent
of the Letter of Credit Obligations with respect thereto. Effective on the
issuance of each Letter of Credit, a Reserve shall be established in the
applicable amount set forth in Section 2.2(c)(iv)(A) or Section 2.2(c)(iv)(B).
(d) Except in Agent's discretion, with the consent of all Lenders, the
amount of all outstanding Letter of Credit Obligations shall not at any time
exceed the Letter of Credit Limit.
(e) Each Borrower shall reimburse immediately the issuer of a Letter of
Credit for any draw under any Letter of Credit issued for the account of such
Borrower by such issuer and pay such issuer the amount of all other charges and
fees payable to issuer in connection with any Letter of Credit issued for the
account of such Borrower immediately when due, irrespective of any claim,
setoff, defense or other right which such Borrower may have at any time against
the issuer or any other Person. Each drawing under any Letter of Credit or other
amount payable in connection therewith when due shall constitute a request by
the Borrower for whose account such Letter of Credit was issued to Agent for a
Prime Rate Loan in the amount of such drawing or other amount then due and shall
be made by Agent on behalf of Lenders as a Revolving Loan (or Special Agent
Advance, as the case may be). The date of such Loan shall be the date of the
drawing or as to other amounts, the due date therefor. Any payments made by or
on behalf of Agent or any Lender to an issuer and/or related parties in
connection with any Letter of Credit shall constitute additional Revolving Loans
to such Borrower pursuant to this Section 2 (or Special Agent Advances as the
case may be).
(f) Borrowers and Guarantors shall indemnify and hold Agent and Lenders
harmless from and against any and all losses, claims, damages, liabilities,
costs and expenses which Agent or any Lender may suffer or incur in connection
with any Letter of Credit and any documents, drafts or acceptances relating
thereto, including any losses, claims, damages, liabilities, costs and expenses
due to any action taken by any issuer or correspondent with respect to any
Letter of Credit, except to the extent such losses, claims, damages,
liabilities, costs or expenses are a direct result of the gross negligence or
wilful misconduct of Agent or any Lender as determined pursuant to a final
non-appealable order of a court of competent jurisdiction. Each Borrower and
Guarantor assumes all risks with respect to the acts or omissions of the drawer
under or beneficiary of any Letter of Credit and for such purposes the drawer or
beneficiary shall be deemed such Borrower's agent. Each Borrower and Guarantor
assumes all risks for, and agrees to pay, all foreign, Federal, State and local
taxes, duties and levies relating to any goods subject to any Letter of Credit
or any documents, drafts or acceptances thereunder. Each Borrower and Guarantor
hereby releases and holds Agent and Lenders harmless from and against any acts,
waivers, errors, delays or omissions with respect to or relating to any Letter
of Credit, except for the gross negligence or wilful misconduct of Agent or any
Lender as determined pursuant to a final, non-appealable order of a court of
competent jurisdiction. The provisions of this Section 2.2(f) shall survive the
payment of Obligations and the termination of this Agreement.
(g) In connection with Inventory purchased pursuant to any Letter of
Credit, Borrowers and Guarantors shall, at Agent's request, instruct all
suppliers, carriers, forwarders, customs brokers, warehouses or others receiving
or holding cash, checks, Inventory, documents or instruments in which Agent
holds a security interest that upon Agent's request, such items are to be
delivered to Agent and/or subject to Agent's order, and if they shall come into
such Borrower's or Guarantor's possession, to deliver them, upon Agent's
request, to Agent in their original form. Except as otherwise provided herein,
Agent shall not exercise such right to request such items so long as no Event of
Default shall have occurred and be continuing. Except as Agent may otherwise
specify, Borrowers shall designate Agent or the issuer of the Letter of Credit
related thereto, as the consignee on all bills of lading and other negotiable
and non-negotiable documents.
(h) Each Borrower and Guarantor hereby irrevocably authorizes and directs
any issuer of a Letter of Credit to name such Borrower or Guarantor as the
account party therein and to deliver to Agent all instruments, documents and
other writings and property received by issuer pursuant to the Letter of Credit
and to accept and rely upon Agent's instructions and agreements with respect to
all matters arising in connection with the Letter of Credit or the Letter of
Credit Documents with respect thereto. Nothing contained herein shall be deemed
or construed to grant any Borrower or Guarantor any right or authority to pledge
the credit of Agent or any Lender in any manner. Agent and Lenders shall have no
liability of any kind with respect to any Letter of Credit provided by an issuer
unless Agent has duly executed and delivered to such issuer the application or a
guarantee or indemnification in writing with respect to such Letter of Credit.
Borrowers and Guarantors shall be bound by any reasonable interpretation made in
good faith by Agent, or any other issuer or correspondent under or in connection
with any Letter of Credit or any documents, drafts or acceptances thereunder,
notwithstanding that such interpretation may be inconsistent with any
instructions of any Borrower or Guarantor.
(i) Immediately upon the issuance or amendment of any Letter of Credit,
each Lender shall be deemed to have irrevocably and unconditionally purchased
and received, without recourse or warranty, an undivided interest and
participation to the extent of such Lender's Pro Rata Share of the liability
with respect to such Letter of Credit and the obligations of Borrowers with
respect thereto (including all Letter of Credit Obligations with respect
thereto). Each Lender shall absolutely, unconditionally and irrevocably assume,
as primary obligor and not as surety, and be obligated to pay to the issuer of
any such Letter of Credit therefor and discharge when due, its Pro Rata Share of
all of such obligations arising under such Letter of Credit. Without limiting
the scope and nature of each Lender's participation in any Letter of Credit, to
the extent that the issuer has not been reimbursed or otherwise paid as required
hereunder or under any such Letter of Credit, each such Lender shall pay to the
issuer its Pro Rata Share of such unreimbursed drawing or other amounts then due
to issuer in connection therewith.
(j) The obligations of Borrowers to pay each Letter of Credit Obligations
and the obligations of Lenders to make payments to Agent for the account of any
issuer with respect to Letters of Credit shall be absolute, unconditional and
irrevocable and shall be performed strictly in accordance with the terms of this
Agreement under any and all circumstances, whatsoever, notwithstanding the
occurrence or continuance of any Default, Event of Default, the failure to
satisfy any other condition set forth in Section 4 or any other event or
circumstance. If such amount is not made available by a Lender when due, Agent
shall be entitled to recover such amount on demand from such Lender with
interest thereon, for each day from the date such amount was due until the date
such amount is paid to Agent at the interest rate then payable by Borrower in
respect of Loans that are Prime Rate Loans. Any such reimbursement shall not
relieve or otherwise impair the obligation of Borrower to reimburse Issuing Bank
under any Letter of Credit or make any other payment in connection therewith.
(k) Any rights, remedies, duties or obligations granted or undertaken by
any Borrower to any issuer or correspondent in any application for any Letter of
Credit, or any other agreement in favor of any issuer or correspondent relating
to any Letter of Credit, shall be deemed to have been granted or undertaken by
such Borrower to Agent. Any duties or obligations undertaken by Agent to any
issuer or correspondent in any application for any Letter of Credit, or any
other agreement by Agent in favor of any issuer or correspondent relating to any
Letter of Credit, shall be deemed to have been undertaken by Borrowers to Agent
and to apply in all respects to Borrowers.
2.3 Term Loans.
(a) Subject to and upon the terms and conditions contained herein, on the
date hereof and upon the satisfaction of all the conditions set forth in Section
4, each Lender severally (and not jointly) agrees to make Term A Loans
(collectively, the "Term A Loans") in an amount equal to its Pro Rata Share of
the aggregate original principal amount of the Term A Loans of $22,508,000. The
aggregate original principal amount of the Term A Loans to Keystone shall be in
the amount of $21,311,150 and to EWP shall be in the amount of $1,196,850.
(b) Subject to and upon the terms and conditions contained herein, on the
date on which the Real Property Closing Conditions are satisfied and upon the
satisfaction of all the conditions set forth in Section 4, each Lender severally
(and not jointly) agrees to make Term B Loans (collectively, the "Term B Loans")
in an amount equal to its Pro Rata Share of the aggregate original principal
amount of the Term B Loans of $620,000. The aggregate original principal amount
of the Term B Loans to EWP shall be in the amount of $488,000 and to F V Steel
in the amount of $132,000.
(c) Subject to and upon the terms and conditions contained herein, from
time to time after the date hereof upon the written request of Administrative
Borrower to Agent which may be made no more frequently than once in any 180 day
period (but no earlier than January 31, 2006), each Lender severally (and not
jointly) agrees to make Term C Loans (collectively, the "Term C Loans") to the
Borrowers designated in such written request within five (5) Business Days after
Agent's receipt of such written request; provided, that all the following
conditions are satisfied with respect to each Term C Loan (i) each written
request designates the Borrower to receive the Term C Loan, describes the
Equipment on which such Term C Loan is to be based, and specifies the amount of
such Term C Loan requested to be advanced, (ii) each Term C Loan shall be based
on new Equipment purchased and not otherwise supporting an outstanding Term
Loan, (iii) all the conditions set forth in Section 4 have been satisfied, (iv)
each Term C Loan shall be made in increments of $250,000, (v) each Term C Loan
shall not exceed the lesser of (A) $10,000,000 less the principal amount of all
Term C Loans then outstanding, (B) $23,128,000 less the principal amount of all
Term Loans then outstanding and (C) an amount equal to eighty (80%) percent of
the Net Recovery Percentage with respect to such new Equipment multiplied by the
cost of such new Equipment, (vi) Agent shall have received a net orderly
liquidation value appraisal with respect to such new Equipment from an
appraiser, and in scope and methodology, reasonably satisfactory to Agent and
(vii) no Term C Loans may be made after August 31, 2009.
(d) Each of the Term Loans shall be evidenced by this Agreement, shall be
repaid, together with interest and other amounts, in accordance with this
Agreement and the other Financing Agreements and shall be secured by all of the
Collateral. If requested by Agent or any Lender, the Borrowers shall further
evidence the Term Loans by executing promissory notes in the form provided by
Agent.
(e) The principal amount of each Term A Loan shall be repaid in sixty (60)
consecutive equal monthly installments (or earlier as provided herein) payable
on the first day of each month commencing on October 1, 2005, each in an amount
sufficient (assuming a like repayment each month) to reduce each Term A Loan to
zero ($0) by the first day of September, 2010. The principal amount of each Term
B Loan shall be repaid in eighty-four (84) consecutive equal monthly
installments (or earlier as provided herein) payable on the first day of each
month commencing on the first day of the month immediately following the date on
which each Term B Loan is made, each in an amount sufficient (assuming a like
repayment each month) to reduce each Term B Loan to zero ($0) on the
eighty-fourth (84th) installment. The principal amount of each Term C Loan shall
be repaid in sixty (60) consecutive equal monthly installments (or earlier as
provided herein) payable on the first day of each month commencing on the first
day of the month immediately following the date of which such Term C Loan was
made, each in an amount sufficient (assuming a like repayment each month) to
reduce each Term A Loan to zero ($0) on the sixtieth (60th) installment.
Notwithstanding the foregoing or anything in this Agreement to the contrary, all
Term Loans shall be due and payable on the earlier of (i) the Renewal Date, (ii)
if declared due and payable pursuant to Section 10.2 hereof or (iii) the date
the Commitment to make Revolving Loans is terminated.
(f) Within five (5) Business Days of the date on which financial statements
are required to be delivered pursuant to Section 9.6(a)(ii) for each fiscal year
of Administrative Borrower, commencing with the fiscal year ended December 31,
2006, Borrowers shall prepay the Term Loans in an amount equal to twenty-five
(25%) percent of Excess Cash Flow for such fiscal year less the amount of any
voluntary prepayments of the Term Loans made pursuant to Section 2.3(g) of this
Agreement in such fiscal year (excluding prepayments from asset sales). Any
prepayments from Excess Cash Flow shall be allocated to each Borrower's Term
Loans based upon such Borrower's relative contribution to Excess Cash Flow and
shall be applied as follows: first, to interest then due and payable on that
Borrower's Term Loans, pro rata; second, to prepay the scheduled principal
installments of that Borrower's Term Loans, pro rata, in inverse order of
maturity, until such Term Loans have been prepaid in full; third, to interest
then due and payable on Revolving Loans made to that Borrower; fourth, to the
principal balance of Revolving Loans outstanding to that Borrower until the same
have been paid in full (without a permanent reduction in the Commitment to make
Revolving Loans); fifth, to any Letter of Credit Obligations of such Borrower to
provide cash collateral therefore until all such Letter of Credit Obligations
have been fully cash collateralized; sixth, to interest then due and payable on
the Term Loans of each other Borrower, pro rata; seventh, to the Term Loans of
each other Borrower, pro rata, to prepay the scheduled principal installments of
the Term Loans of such other Borrowers in inverse order of maturity, until
prepaid in full; eighth, to interest then due and payable on the Revolving Loans
outstanding to each other Borrower (without a permanent reduction in the
Commitment to make Revolving Loans), pro rata; ninth, to the principal balance
of the Revolving Loans made to each other Borrower, pro rata, until the same
have been paid in full, and last to any Letter of Credit Obligations of each
other Borrower, pro rata, to provide cash collateral therefore until all such
Letter of Credit Obligations have been fully cash collateralized. Each such
prepayment from Excess Cash Flow shall be accompanied by a certificate signed by
Administrative Borrower's chief financial officer certifying the manner in which
Excess Cash Flow, the resulting prepayment, and the method of allocation to each
Borrower's Obligations were calculated, which certificate shall be in form and
substance reasonably satisfactory to Agent. Notwithstanding anything herein to
the contrary, prepayments from Excess Cash Flow shall not exceed $2,000,000 in
any fiscal year of Administrative Borrower and shall not exceed $5,000,000 in
the aggregate during the term of this Agreement.
(g) At any time, Borrowers may prepay the Loans, in whole or in part,
subject to the payment of any fees or expenses that may be due under Sections
3.3(d) and 13.1(c) of this Agreement. Prepayments (unless a prepayment in whole)
shall be in increments of $100,000. Any prepayment of a Term Loan shall be
applied to the scheduled installments of such Term Loan in inverse order of
maturity.
2.4 Commitments. The aggregate amount of each Lender's Pro Rata Share of
the Loans and Letter of Credit Obligations shall not exceed the amount of such
Lender's Commitment, as the same may from time to time be amended in accordance
with the provisions hereof.
SECTION 3. INTEREST AND FEES
3.1 Interest.
(a) Borrowers shall pay to Agent, for the benefit of Lenders, interest on
the outstanding principal amount of the Loans at the Interest Rate. All interest
accruing hereunder on and after the date of and during the continuance of any
Event of Default or termination hereof shall be payable on demand.
(b) Each Borrower (or Administrative Borrower on behalf of such Borrower)
may from time to time request Eurodollar Rate Loans or may request that Prime
Rate Loans be converted to Eurodollar Rate Loans or that any existing Eurodollar
Rate Loans continue for an additional Interest Period. Such request from a
Borrower (or Administrative Borrower on behalf of such Borrower) shall specify
the amount of the Eurodollar Rate Loans or the amount of the Prime Rate Loans to
be converted to Eurodollar Rate Loans or the amount of the Eurodollar Rate Loans
to be continued (subject to the limits set forth below) and the Interest Period
to be applicable to such Eurodollar Rate Loans. Subject to the terms and
conditions contained herein, three (3) Business Days after receipt by Agent of
such a request from a Borrower (or Administrative Borrower on behalf of such
Borrower), such Eurodollar Rate Loans shall be made or Prime Rate Loans shall be
converted to Eurodollar Rate Loans or such Eurodollar Rate Loans shall continue,
as the case may be, provided, that, (i) no Default or Event of Default shall
exist or have occurred and be continuing, (ii) no party hereto shall have sent
any notice of termination of this Agreement, (iii) such Borrower (or
Administrative Borrower on behalf of such Borrower) shall have complied with
such customary procedures as are established by Agent and specified by Agent to
Administrative Borrower from time to time for requests by Borrowers for
Eurodollar Rate Loans, (iv) no more than five (5) Interest Periods may be in
effect at any one time, (v) the aggregate amount of the Eurodollar Rate Loans
must be in an amount not less than $1,000,000 or an integral multiple of
$500,000 in excess thereof, (vi) the maximum amount of the Eurodollar Rate Loans
in the aggregate at any time requested by Borrowers shall not exceed the amount
equal to (A) the lowest aggregate principal amount of the Term Loans which it is
anticipated will be outstanding as of the last day of the applicable Interest
Period plus (B) eighty (80%) percent of the lowest principal amount of the
Revolving Loans which it is anticipated will be outstanding during the
applicable Interest Period, in each case as determined by Agent in good faith
(but with no obligation of Agent or Lenders to make such Loans), and (vii) Agent
and each Lender shall have determined that the Interest Period or Adjusted
Eurodollar Rate is available to Agent and such Lender and can be determined as
of the date of the request for such Eurodollar Rate Loan by such Borrower. Any
request by or on behalf of a Borrower for Eurodollar Rate Loans or to convert
Prime Rate Loans to Eurodollar Rate Loans or to continue any existing Eurodollar
Rate Loans shall be irrevocable. Notwithstanding anything to the contrary
contained herein, Agent and Lenders shall not be required to purchase United
States Dollar deposits in the London interbank market or other applicable
Eurodollar Rate market to fund any Eurodollar Rate Loans, but the provisions
hereof shall be deemed to apply as if Agent and Lenders had purchased such
deposits to fund the Eurodollar Rate Loans.
(c) Any Eurodollar Rate Loans shall automatically convert to Prime Rate
Loans upon the last day of the applicable Interest Period, unless Agent has
received a request to continue such Eurodollar Rate Loan at least three (3)
Business Days prior to such last day in accordance with the terms hereof. Any
Eurodollar Rate Loans shall, at Agent's option, upon notice by Agent to
Administrative Borrower, be subsequently converted to Prime Rate Loans in the
event that this Agreement shall terminate or not be renewed. Borrowers shall pay
to Agent, for the benefit of Lenders, upon demand by Agent (or Agent may, at its
option, charge any loan account of any Borrower) any amounts required to
compensate any Lender or Participant for any loss (including loss of anticipated
profits), cost or expense incurred by such person, as a result of the conversion
of Eurodollar Rate Loans to Prime Rate Loans prior to the end of the applicable
Interest Period.
(d) Interest shall be payable by Borrowers to Agent, for the account of
Lenders, monthly in arrears not later than the first day of each calendar month
and shall be calculated on the basis of a three hundred sixty (360) day year and
actual days elapsed. The interest rate on non-contingent Obligations (other than
Eurodollar Rate Loans) shall increase or decrease by an amount equal to each
increase or decrease in the Prime Rate effective on the day of any change in
such Prime Rate. In no event shall charges constituting interest payable by
Borrowers to Agent and Lenders exceed the maximum amount or the rate permitted
under any applicable law or regulation, and if any such part or provision of
this Agreement is in contravention of any such law or regulation, such part or
provision shall be deemed amended to conform thereto.
3.2 Fees.
(a) Borrowers shall pay to Agent, for the account of Lenders, monthly an
unused line fee at a rate equal to one quarter of one (.25%) percent per annum
calculated upon the amount by which $80,000,000 exceeds the average daily
principal balance of the outstanding Loans and Letters of Credit during the
immediately preceding month (or part thereof) while this Agreement is in effect
and for so long thereafter as any of the Obligations (other than contingent
indemnification obligations not asserted or due) are outstanding, which fee
shall be payable on the first day of each month in arrears.
(b) In the case of Letters of Credit, Borrowers shall pay to Agent, for the
account of Lenders, a fee at a rate equal to the then applicable Interest Rate
for Letter of Credit Obligations on the average daily maximum amount available
to be drawn under all of such Letters of Credit for the immediately preceding
month (or part thereof), payable in arrears as of the first day of each
succeeding month, computed for each day from the date of issuance to the date of
expiration. Such letter of credit fees shall be calculated on the basis of a
three hundred sixty (360) day year and actual days elapsed and the obligation of
Borrowers to pay such fee shall survive the termination or non-renewal of this
Agreement. In addition to the letter of credit fees provided above, Borrowers
shall pay to the issuer of any Letter of Credit for its own account (without
sharing with Lenders) the letter of credit fronting and negotiation fees agreed
to by Borrowers and such issuer from time to time and the customary charges from
time to time of such issuer with respect to the issuance, amendment, transfer,
administration, cancellation and conversion of, and drawings under, such Letters
of Credit.
(c) Borrowers shall pay to Agent the other fees and amounts set forth in
the Fee Letter in the amounts and at the times specified therein.
3.3 Changes in Laws and Increased Costs of Loans.
(a) If after the date hereof, either (i) any change in, or in the
interpretation of, any law or regulation is introduced, including, without
limitation, with respect to reserve requirements (other than reserves taken into
account in the calculation of the "Reserve Percentage" in the definition of
"Adjusted Eurodollar Rate"), applicable to any Lender or any banking or
financial institution from whom any Lender borrows funds or obtains credit (a
"Funding Bank"), or (ii) a Funding Bank or any Lender complies with any future
guideline or request from any central bank or other Governmental Authority or
(iii) a Funding Bank or any Lender reasonably determines that the adoption of
any applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof has or would have the effect described
below, or a Funding Bank or any Lender complies with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, and in the case of any event set
forth in this clause (iii), such adoption, change or compliance has or would
have the direct or indirect effect of reducing the rate of return on any
Lender's capital as a consequence of its obligations hereunder to a level below
that which such Lender could have achieved but for such adoption, change or
compliance (taking into consideration the Funding Bank's or Lender's policies
with respect to capital adequacy) by an amount deemed by such Lender to be
material, and the result of any of the foregoing events described in clauses
(i), (ii) or (iii) is or results in an increase in the cost to any Lender of
funding or maintaining the Loans, the Letters of Credit or its Commitment, then
Borrowers and Guarantors shall from time to time within five (5) days of demand
by Agent pay to Agent additional amounts sufficient to indemnify such Lender
against such increased cost on an after-tax basis (after taking into account
applicable deductions and credits in respect of the amount indemnified). A
certificate (with reasonably detailed calculations) as to the amount of such
increased cost shall be submitted to Administrative Borrower by Agent or the
applicable Lender and shall be conclusive, absent manifest error.
(b) If prior to the first day of any Interest Period, (i) Agent shall have
determined in good faith (which determination shall be conclusive and binding
upon Borrowers and Guarantors absent manifest error) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Adjusted Eurodollar Rate for such Interest
Period, (ii) Agent has received notice from the Required Lenders that the
Adjusted Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to Lenders of making or
maintaining Eurodollar Rate Loans during such Interest Period, or (iii) Dollar
deposits in the principal amounts of the Eurodollar Rate Loans to which such
Interest Period is to be applicable are not generally available in the London
interbank market, Agent shall give telecopy or telephonic notice thereof to
Administrative Borrower as soon as practicable thereafter, and will also give
prompt written notice to Administrative Borrower when such conditions no longer
exist. If such notice is given (A) any Eurodollar Rate Loans requested to be
made on the first day of such Interest Period shall be made as Prime Rate Loans,
(B) any Loans that were to have been converted on the first day of such Interest
Period to or continued as Eurodollar Rate Loans shall be converted to or
continued as Prime Rate Loans and (C) each outstanding Eurodollar Rate Loan
shall be converted, on the last day of the then-current Interest Period thereof,
to Prime Rate Loans. Until such notice has been withdrawn by Agent, no further
Eurodollar Rate Loans shall be made or continued as such, nor shall any Borrower
(or Administrative Borrower on behalf of any Borrower) have the right to convert
Prime Rate Loans to Eurodollar Rate Loans.
(c) Notwithstanding any other provision herein, if the adoption of or any
change in any law, treaty, rule or regulation or final, non-appealable
determination of an arbitrator or a court or other Governmental Authority or in
the interpretation or application thereof occurring after the date hereof shall
make it unlawful for Agent or any Lender to make or maintain Eurodollar Rate
Loans as contemplated by this Agreement, (i) Agent or such Lender shall promptly
give written notice of such circumstances to Administrative Borrower (which
notice shall be withdrawn whenever such circumstances no longer exist), (ii) the
commitment of such Lender hereunder to make Eurodollar Rate Loans, continue
Eurodollar Rate Loans as such and convert Prime Rate Loans to Eurodollar Rate
Loans shall forthwith be canceled and, until such time as it shall no longer be
unlawful for such Lender to make or maintain Eurodollar Rate Loans, such Lender
shall then have a commitment only to make a Prime Rate Loan when a Eurodollar
Rate Loan is requested and (iii) such Lender's Loans then outstanding as
Eurodollar Rate Loans, if any, shall be converted automatically to Prime Rate
Loans on the respective last days of the then current Interest Periods with
respect to such Loans or within such earlier period as required by law. If any
such conversion of a Eurodollar Rate Loan occurs on a day which is not the last
day of the then current Interest Period with respect thereto, Borrowers and
Guarantors shall pay to such Lender such amounts, if any, as may be required
pursuant to Section 3.3(d) below.
(d) Borrowers and Guarantors shall indemnify Agent and each Lender and to
hold Agent and each Lender harmless from any loss or expense which Agent or such
Lender may sustain or incur as a consequence of (i) default by Borrower in
making a borrowing of, conversion into or extension of Eurodollar Rate Loans
after such Borrower (or Administrative Borrower on behalf of such Borrower) has
given a notice requesting the same in accordance with the provisions of this
Loan Agreement, (ii) default by any Borrower in making any prepayment of a
Eurodollar Rate Loan after such Borrower has given a notice thereof in
accordance with the provisions of this Agreement, and (iii) the making of a
prepayment of Eurodollar Rate Loans on a day which is not the last day of an
Interest Period with respect thereto. With respect to Eurodollar Rate Loans,
such indemnification may include an amount equal to the excess, if any, of (A)
the amount of interest which would have accrued on the amount so prepaid, or not
so borrowed, converted or extended, for the period from the date of such
prepayment or of such failure to borrow, convert or extend to the last day of
the applicable Interest Period (or, in the case of a failure to borrow, convert
or extend, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Eurodollar
Rate Loans provided for herein over (B) the amount of interest (as determined by
such Agent or such Lender) which would have accrued to Agent or such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank Eurodollar market. This covenant shall survive
the termination or non-renewal of this Agreement and the payment of the
Obligations.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions Precedent to Initial Loans and Letters of Credit. The
obligation of Lenders to make the initial Loans or of Agent and Lenders to
provide for the initial Letters of Credit hereunder is subject to the
satisfaction of, or waiver of, immediately prior to or concurrently with the
making of such Loan or the issuance of such Letter of Credit of each of the
following conditions precedent:
(a) Agent shall have received, in form and substance reasonably
satisfactory to Agent, all releases, terminations and such other documents as
Agent may reasonably request to evidence and effectuate the termination by the
Existing Lenders of their respective financing arrangements with Borrowers and
Guarantors and the termination and release by it or them, as the case may be, of
any interest in and to any assets and properties of each Borrower and Guarantor,
duly authorized, executed and delivered by it or each of them, including, but
not limited to, (i) UCC termination statements for all UCC financing statements
previously filed by it or any of them or their predecessors, as secured party
and any Borrower or Guarantor, as debtor; and (ii) satisfactions and discharges
of any mortgages, deeds of trust or deeds to secure debt by any Borrower or
Guarantor in favor of it or any of them, in form acceptable for recording with
the appropriate Governmental Authority;
(b) all requisite corporate action and proceedings in connection with this
Agreement and the other Financing Agreements shall be reasonably satisfactory in
form and substance to Agent, and Agent shall have received all information and
copies of all documents, including records of requisite corporate action and
proceedings which Agent may have reasonably requested in connection therewith,
such documents where requested by Agent or its counsel to be certified by
appropriate corporate officers or Governmental Authority (and including a copy
of the certificate of incorporation of each Borrower and Guarantor certified by
the Secretary of State (or equivalent Governmental Authority) which shall set
forth the same complete corporate name of such Borrower or Guarantor as is set
forth herein and such document as shall set forth the organizational
identification number of each Borrower or Guarantor, if one is issued in its
jurisdiction of incorporation);
(c) no material adverse change shall have occurred in the business or
operations of Borrowers since July 29, 2005;
(d) Agent shall have completed a field review and audit of the Records and
such other information with respect to the Collateral as Agent may reasonably
require to determine the amount of Loans available to Borrowers (including,
without limitation, current perpetual inventory records and/or roll-forwards of
Accounts and Inventory through the date of closing and test counts of the
Inventory in a manner reasonably satisfactory to Agent, together with such
supporting documentation as may be reasonably necessary or appropriate, and
other documents and information that will enable Agent to accurately identify
and verify the Collateral), the results of which in each case shall be
reasonably satisfactory to Agent, not more than three (3) Business Days prior to
the date hereof or such earlier date as Agent may agree;
(e) Agent shall have received, in form and substance reasonably
satisfactory to Agent, all consents, waivers, acknowledgments and other
agreements from third persons which Agent may deem reasonably necessary or
desirable in order to permit, protect and perfect its security interests in and
liens upon the Collateral or to effectuate the provisions or purposes of this
Agreement and the other Financing Agreements, including, without limitation,
Collateral Access Agreements; (f) the Excess Availability in the aggregate for
all Borrowers as of the date hereof shall be not less than $15,000,000 after
giving effect to (i) the initial Loans made or to be made and Letters of Credit
issued or to be issued in connection with the initial transactions hereunder,
(ii) all payments required to be made under the Plan of Reorganization on or
about the Effective Date (as defined therein), and (iii) all transaction fees
and expenses associated with the Plan of Reorganization and the Financing
Agreements on or about the Effective Date;
(g) Agent shall have received, in form and substance satisfactory to Agent,
Deposit Account Control Agreements by and among Agent, each Borrower and
Guarantor, as the case may be and each bank where such Borrower (or Guarantor)
has a deposit account, in each case, duly authorized, executed and delivered by
such bank and Borrower or Guarantor, as the case may be (or Agent shall be the
bank's customer with respect to such deposit account as Agent may specify);
(h) Agent shall have received evidence, in form and substance satisfactory
to Agent, that Agent has a valid perfected first priority security interest in
all or substantially all of the Collateral subject to security interests
permitted under Section 9.8;
(i) Agent shall have received and reviewed lien and judgment search results
for the jurisdiction of organization of each Borrower and Guarantor, the
jurisdiction of the chief executive office of each Borrower and Guarantor and
all jurisdictions in which assets of Borrowers and Guarantors are located, which
search results shall be in form and substance satisfactory to Agent;
(j) Except for the real property located in Peoria, Illinois, Agent shall
have received environmental audits of the Real Property to be subject to the
Mortgages conducted by an independent environmental engineering firm reasonably
acceptable to Agent, and in form, scope and methodology reasonably satisfactory
to Agent, the results of which shall be reasonably satisfactory to Agent;
(k) With respect to the Mortgaged Properties (except for the real property
located in Peoria, Illinois), Agent shall have received, in form and substance
reasonably satisfactory to Agent, a valid and effective title insurance policy
issued by a company and agent reasonably acceptable to Agent: (i) insuring the
priority, amount and sufficiency of the Mortgages, (ii) insuring against matters
materially affecting the Mortgaged Properties that would be disclosed by surveys
and (iii) containing any legally available endorsements, assurances or
affirmative coverage reasonably requested by Agent for protection of its
interests;
(l) Agent shall have received originals of the shares of the stock
certificates representing all of the issued and outstanding shares of the
Capital Stock of each Borrower and Guarantor (other than Parent) and owned by
any Borrower or Guarantor, in each case together with stock powers duly executed
in blank with respect thereto;
(m) Agent shall have received evidence of insurance and loss payee
endorsements required hereunder and under the other Financing Agreements, in
form and substance reasonably satisfactory to Agent, and certificates of
insurance policies and/or endorsements naming Agent as loss payee;
(n) Except for the real property located in Peoria, Illinois, Agent shall
have received appraisals with respect to the Borrower's Inventory, Equipment and
Mortgaged Properties conducted by appraisers reasonably acceptable to Agent, all
in form, scope and methodology reasonably satisfactory to Agent, the results of
which shall be reasonably satisfactory to Agent and Agent shall have received
reliance letters from such appraisers;
(o) Agent shall have received, in form and substance reasonably
satisfactory to Agent, such opinion letters of counsel to Borrowers and
Guarantors with respect to the Financing Agreements and such other matters as
Agent may reasonably request;
(p) (i) The Plan of Reorganization shall be in form and substance
satisfactory to Agent and shall have been confirmed pursuant to the Confirmation
Order; (ii) Borrowers shall have delivered to Agent a true and correct copy of
the Confirmation Order, in form and substance satisfactory to Agent; (iii)
Borrowers shall have complied in full with the notice and other requirements for
confirmation of the Plan of Reorganization and entry of the Confirmation Order;
(iv) the Bankruptcy Court shall have entered the Confirmation Order, in form and
substance satisfactory to Agent (A) authorizing the secured financing under the
Financing Agreements and (B) revesting in Borrowers all property of Borrowers'
estate, free and clear of all interests, liens, claims and encumbrances (except
liens securing the Obligations and as otherwise permitted in writing by Agent);
(v) the Confirmation Order shall be a "Final Order" (as defined in the Plan of
Reorganization); and (vi) the conditions precedent to the confirmation of the
Plan of Reorganization shall have been satisfied or validly waived in accordance
with the terms of the Plan of Reorganization and Confirmation Order and the
"Effective Date" (as defined in the Plan of Reorganization) shall have
contemporaneously occurred under the Plan of Reorganization; and
(q) the other Financing Agreements and all instruments and documents set
forth on Exhibit D hereto shall have been duly executed and delivered to Agent,
in form and substance reasonably satisfactory to Agent.
4.2 Conditions Precedent to All Loans and Letters of Credit. The obligation
of Lenders to make the Loans, including the initial Loans, or of the Agent and
Lenders to provide for any Letter of Credit, including the initial Letters of
Credit, is subject to the further satisfaction of, or waiver of, immediately
prior to or concurrently with the making of each such Loan or the issuance of
such Letter of Credit of each of the following conditions precedent:
(a) all representations and warranties contained herein and in the other
Financing Agreements shall be true and correct in all material respects (without
duplication in respect of any materiality qualifier set forth in any such
representation and warranty) with the same effect as though such representations
and warranties had been made on and as of the date of the making of each such
Loan or providing each such Letter of Credit and after giving effect thereto,
except to the extent that such representations and warranties expressly relate
solely to an earlier date (in which case such representations and warranties
shall have been true and accurate in all material respects (without duplication
in respect of any materiality qualifier set forth in any such representation and
warranty) on and as of such earlier date);
(b) no law, regulation, order, judgment or decree of any Governmental
Authority shall exist, and no action, suit, investigation, litigation or
proceeding shall be pending or threatened in any court or before any arbitrator
or Governmental Authority, which (i) purports to enjoin, prohibit, restrain or
otherwise affect (A) the making of the Loans or providing the Letters of Credit,
or (B) the consummation of the transactions contemplated pursuant to the terms
hereof or the other Financing Agreements or (ii) has or has a reasonable
likelihood of having a Material Adverse Effect; and
(c) no Default or Event of Default shall exist or have occurred and be
continuing on and as of the date of the making of such Loan or providing each
such Letter of Credit and after giving effect thereto.
SECTION 5. GRANT AND PERFECTION OF SECURITY INTEREST
5.1 Grant of Security Interest. To secure payment and performance of all
Obligations, each Borrower and Guarantor hereby grants to Agent, for itself and
the benefit of Lenders, a continuing security interest in, a lien upon, and a
right of set off against, and hereby collaterally assigns to Agent, for itself
and the benefit of Lenders, as security, all personal and real property and
fixtures, and interests in property and fixtures, of each Borrower and
Guarantor, whether now owned or hereafter acquired or existing, and wherever
located (together with all other collateral security for the Obligations at any
time granted to or held or acquired by Agent or any Lender, collectively, the
"Collateral"), including:
(a) all Accounts;
(b) all general intangibles, including, without limitation, all
Intellectual Property;
(c) all goods, including, without limitation, Inventory and Equipment;
(d) all Real Property and fixtures;
(e) all chattel paper, including, without limitation, all tangible and
electronic chattel paper;
(f) all instruments, including, without limitation, all promissory notes;
(g) all documents;
(h) all deposit accounts;
(i) all letters of credit, banker's acceptances and similar instruments and
including all letter-of-credit rights;
(j) all supporting obligations and all present and future liens, security
interests, rights, remedies, title and interest in, to and in respect of
Receivables and other Collateral, including (i) rights and remedies under or
relating to guaranties, contracts of suretyship, letters of credit and credit
and other insurance related to the Collateral, (ii) rights of stoppage in
transit, replevin, repossession, reclamation and other rights and remedies of an
unpaid vendor, lienor or secured party, (iii) goods described in invoices,
documents, contracts or instruments with respect to, or otherwise representing
or evidencing, Receivables or other Collateral, including returned, repossessed
and reclaimed goods, and (iv) deposits by and property of account debtors or
other persons securing the obligations of account debtors;
(k) all (i) investment property (including securities, whether certificated
or uncertificated, securities accounts, security entitlements, commodity
contracts or commodity accounts) and (ii) monies, credit balances, deposits and
other property of any Borrower or Guarantor now or hereafter held or received by
or in transit to Agent, any Lender or its Affiliates or at any other depository
or other institution from or for the account of any Borrower or Guarantor,
whether for safekeeping, pledge, custody, transmission, collection or otherwise;
(l) all commercial tort claims, including, without limitation, those
identified in the Information Certificate;
(m) to the extent not otherwise described above, all Receivables;
(n) all Records; and
(o) all products and proceeds of the foregoing, in any form, including
insurance proceeds and all claims against third parties for loss or damage to or
destruction of or other involuntary conversion of any kind or nature of any or
all of the other Collateral.
Anything contained in this Agreement to the contrary notwithstanding, the
term "Collateral" shall not include (A) any rights or interest in any contract,
lease, permit, charter or license agreement covering real, intangible or
personal property of a Borrower or Guarantor if under the terms of such
contract, lease, permit, charter or license agreement, or applicable law with
respect thereto, the valid grant of a security interest or lien therein to the
Agent is prohibited as a matter of law or under the terms of such agreement,
contract, lease, permit, charter or license agreement and such prohibition has
not been or is not waived or the consent of the other party to such contract,
lease, permit, charter or license agreement has not been or is not otherwise
obtained; provided, that any such contract, lease, permit, charter or license
agreement shall only be excluded hereunder to the extent and for so long as the
consequences specified in this clause (A) shall result and shall become
Collateral immediately and automatically at such time as such consequences are
no longer in effect; or (B) any Equipment or other assets of a Borrower or
Guarantor in which a negative pledge agreed to, under a capital lease or
purchase money indebtedness; provided, that, the foregoing exclusions under (A)
and (B) shall in no way be construed (1) to apply if any described prohibition
is unenforceable under Sections 9-406, 9-407, or 9-408 of the UCC or other
applicable law or principles of equity, or (2) so as to limit, impair, or
otherwise affect the Agent's continuing security interests in and liens upon any
rights or interests of a Borrower or Guarantor in or to monies due or to become
due under any described contract, lease, permit, charter or license agreement or
(3) to limit, impair, or otherwise affect the Agent's continuing security
interests in and liens upon any rights or interests of a Borrower or Guarantor
in and to any proceeds from the sale, license, lease, or other dispositions of
any such contract, lease, permit, charter or license agreement.
5.2 Perfection of Security Interests.
(a) Each Borrower and Guarantor irrevocably and unconditionally authorizes
Agent (or its agent) to file at any time and from time to time such financing
statements with respect to the Collateral naming Agent or its designee as the
secured party and such Borrower or Guarantor as debtor, as Agent may require,
and including the Collateral as all assets of such Borrower or Guarantor, as the
case may be, or words of similar effect and including any other information with
respect to such Borrower or Guarantor or otherwise required by part 5 of Article
9 of the Uniform Commercial Code of such jurisdiction as Agent may determine,
together with any amendment and continuations with respect thereto, which
authorization shall apply to all financing statements filed on, prior to or
after the date hereof. Each Borrower and Guarantor hereby ratifies and approves
all financing statements naming Agent or its designee as secured party and such
Borrower or Guarantor, as the case may be, as debtor with respect to the
Collateral (and any amendments with respect to such financing statements) filed
by or on behalf of Agent prior to the date hereof and ratifies and confirms the
authorization of Agent to file such financing statements (and amendments, if
any). Each Borrower and Guarantor hereby authorizes Agent to adopt on behalf of
such Borrower and Guarantor any symbol required for authenticating any
electronic filing. In the event that the description of the collateral in any
financing statement naming Agent or its designee as the secured party and any
Borrower or Guarantor as debtor includes assets and properties of such Borrower
or Guarantor that do not at any time constitute Collateral, whether hereunder,
under any of the other Financing Agreements or otherwise, the filing of such
financing statement shall nonetheless be deemed authorized by such Borrower or
Guarantor to the extent of the Collateral included in such description and it
shall not render the financing statement ineffective as to any of the Collateral
or otherwise affect the financing statement as it applies to any of the
Collateral. In no event shall any Borrower or Guarantor at any time file, or
permit or cause to be filed, any correction statement or termination statement
with respect to any financing statement (or amendment or continuation with
respect thereto) naming Agent or its designee as secured party and such Borrower
or Guarantor as debtor.
(b) Each Borrower and Guarantor does not have any chattel paper (whether
tangible or electronic) or instruments as of the date hereof, except as set
forth in the Information Certificate. In the event that any Borrower or
Guarantor shall be entitled to or shall receive any chattel paper or instrument
with a face value in excess of $250,000, individually or in the aggregate, after
the date hereof, Borrowers and Guarantors shall promptly notify Agent thereof in
writing. Promptly upon the request of Agent, such Borrower or Guarantor shall
deliver, or cause to be delivered to Agent, all such tangible chattel paper and
instruments that such Borrower or Guarantor has or may at any time acquire,
accompanied by such instruments of transfer or assignment duly executed in blank
as Agent may from time to time specify, in each case except as Agent may
otherwise agree. At Agent's option, each Borrower and Guarantor shall, or Agent
may at any time on behalf of any Borrower or Guarantor, cause the original of
any such instrument or chattel paper to be conspicuously marked in a form and
manner acceptable to Agent with the following legend referring to chattel paper
or instruments as applicable: "This [chattel paper] [instrument] is subject to
the security interest of Wachovia Capital Finance Corporation (Central) and any
sale, transfer, assignment or encumbrance of this [chattel paper] [instrument]
violates the rights of such secured party."
(c) In the event that any Borrower or Guarantor shall at any time hold or
acquire an interest in any electronic chattel paper or any "transferable record"
(as such term is defined in Section 201 of the Federal Electronic Signatures in
Global and National Commerce Act or in Section 16 of the Uniform Electronic
Transactions Act as in effect in any relevant jurisdiction), such Borrower or
Guarantor shall promptly notify Agent thereof in writing. Promptly upon Agent's
request, such Borrower or Guarantor shall take, or cause to be taken, such
actions as Agent may reasonably request to give Agent control of such electronic
chattel paper under Section 9-105 of the UCC and control of such transferable
record under Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as in effect in such jurisdiction.
(d) Each Borrower and Guarantor does not have any deposit accounts as of
the date hereof, except as set forth in the Information Certificate. Borrowers
and Guarantors shall not, directly or indirectly, after the date hereof open,
establish or maintain any deposit account unless each of the following
conditions is satisfied: (i) Agent shall have received not less than five (5)
Business Days prior written notice of the intention of any Borrower or Guarantor
to open or establish such account which notice shall specify in reasonable
detail and specificity reasonably acceptable to Agent the name of the account,
the owner of the account, the name and address of the bank at which such account
is to be opened or established, the individual at such bank with whom such
Borrower or Guarantor is dealing and the purpose of the account, (ii) the bank
where such account is opened or maintained shall be reasonably acceptable to
Agent, and (iii) on or before the opening of such deposit account, such Borrower
or Guarantor shall as Agent may specify either (A) deliver to Agent a Deposit
Account Control Agreement with respect to such deposit account duly authorized,
executed and delivered by such Borrower or Guarantor and the bank at which such
deposit account is opened and maintained or (B) arrange for Agent to become the
customer of the bank with respect to the deposit account on terms and conditions
acceptable to Agent. The terms of this subsection (d) shall not apply to deposit
accounts (i) specifically and exclusively used for payroll, payroll taxes and
other employee wage and benefit payments to or for the benefit of any Borrower's
or Guarantor's salaried employees and (ii) with a balance of less than $25,000
for any one account so long as the aggregate balance in all such accounts does
not exceed $100,000.
(e) No Borrower or Guarantor owns or holds, directly or indirectly,
beneficially or as record owner or both, any investment property, as of the date
hereof, or has any investment account, securities account, commodity account or
other similar account with any bank or other financial institution or other
securities intermediary or commodity intermediary as of the date hereof, in each
case except as set forth in the Information Certificate.
(i) In the event that any Borrower or Guarantor shall be entitled to or
shall at any time after the date hereof hold or acquire any certificated
securities, such Borrower or Guarantor shall promptly endorse, assign and
deliver the same to Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as Agent may from time to time specify. If any
securities, now or hereafter acquired by any Borrower or Guarantor are
uncertificated and are issued to such Borrower or Guarantor or its nominee
directly by the issuer thereof, such Borrower or Guarantor shall immediately
notify Agent thereof and shall as Agent may specify, either (A) cause the issuer
to agree to comply with instructions from Agent as to such securities, without
further consent of any Borrower or Guarantor or such nominee, or (B) arrange for
Agent to become the registered owner of the securities.
(ii) Borrowers and Guarantors shall not, directly or indirectly, after the
date hereof open, establish or maintain any investment account, securities
account, commodity account or any other similar account (other than a deposit
account) with any securities intermediary or commodity intermediary unless each
of the following conditions is satisfied: (A) Agent shall have received not less
than five (5) Business Days prior written notice of the intention of such
Borrower or Guarantor to open or establish such account which notice shall
specify in reasonable detail and specificity reasonably acceptable to Agent the
name of the account, the owner of the account, the name and address of the
securities intermediary or commodity intermediary at which such account is to be
opened or established, the individual at such intermediary with whom such
Borrower or Guarantor is dealing and the purpose of the account, (B) the
securities intermediary or commodity intermediary (as the case may be) where
such account is opened or maintained shall be reasonably acceptable to Agent,
and (C) on or before the opening of such investment account, securities account
or other similar account with a securities intermediary or commodity
intermediary, such Borrower or Guarantor shall as Agent may specify either (i)
execute and deliver, and cause to be executed and delivered to Agent, an
Investment Property Control Agreement with respect thereto duly authorized,
executed and delivered by such Borrower or Guarantor and such securities
intermediary or commodity intermediary or (ii) arrange for Agent to become the
entitlement holder with respect to such investment property on terms and
conditions acceptable to Agent. The terms of this subsection (e)(ii) shall not
apply to investment accounts, securities accounts, commodity accounts or any
other similar accounts with a balance of less than $25,000 for any one account
so long as the aggregate balance in all such accounts does not exceed $100,000.
(f) Borrowers and Guarantors are not the beneficiary or otherwise entitled
to any right to payment under any letter of credit, banker's acceptance or
similar instrument as of the date hereof, except as set forth in the Information
Certificate. In the event that any Borrower or Guarantor shall be entitled to or
shall receive any right to payment under any letter of credit, banker's
acceptance or any similar instrument with a face value in excess of $250,000,
whether as beneficiary thereof or otherwise after the date hereof, such Borrower
or Guarantor shall promptly notify Agent thereof in writing. Such Borrower or
Guarantor shall immediately, as Agent may specify, either (i) deliver, or cause
to be delivered to Agent, with respect to any such letter of credit, banker's
acceptance or similar instrument, the written agreement of the issuer and any
other nominated person obligated to make any payment in respect thereof
(including any confirming or negotiating bank), in form and substance reasonably
satisfactory to Agent, consenting to the assignment of the proceeds of the
letter of credit to Agent by such Borrower or Guarantor and agreeing to make all
payments thereon directly to Agent or as Agent may otherwise direct or (ii)
cause Agent to become, at Borrowers' expense, the transferee beneficiary of the
letter of credit, banker's acceptance or similar instrument (as the case may
be).
(g) Borrowers and Guarantors do not have any commercial tort claims as of
the date hereof, except as set forth in the Information Certificate. In the
event that any Borrower or Guarantor shall at any time after the date hereof
have any commercial tort claims with a value, individually or in the aggregate
with all other commercial tort claims in excess of $250,000 in respect of which
such claim has been filed in a court of law, such Borrower or Guarantor shall
promptly notify Agent thereof in writing, which notice shall (i) set forth in
reasonable detail the basis for and nature of such commercial tort claim and
(ii) include the express grant by such Borrower or Guarantor to Agent of a
security interest in such commercial tort claim (and the proceeds thereof). In
the event that such notice does not include such grant of a security interest,
the sending thereof by such Borrower or Guarantor to Agent shall be deemed to
constitute such grant to Agent. Upon the sending of such notice, any commercial
tort claim described therein shall constitute part of the Collateral and shall
be deemed included therein. Without limiting the authorization of Agent provided
in Section 5.2(a) hereof or otherwise arising by the execution by such Borrower
or Guarantor of this Agreement or any of the other Financing Agreements, Agent
is hereby irrevocably authorized from time to time and at any time to file such
financing statements naming Agent or its designee as secured party and such
Borrower or Guarantor as debtor, or any amendments to any financing statements,
covering any such commercial tort claim as Collateral. In addition, each
Borrower and Guarantor shall promptly upon Agent's reasonable request, execute
and deliver, or cause to be executed and delivered, to Agent such other
agreements, documents and instruments as Agent may require in connection with
such commercial tort claim.
(h) Borrowers and Guarantors do not have any goods, documents of title or
other Collateral in the custody, control or possession of a third party as of
the date hereof, except as set forth in the Information Certificate and except
for goods located in the United States in transit to a location of a Borrower or
Guarantor permitted herein in the ordinary course of business of such Borrower
or Guarantor in the possession of the carrier transporting such goods and except
for goods sent for repair in the ordinary course of business. In the event that
any goods, documents of title or other Collateral with a value in excess of
$250,000 (individually or in the aggregate) are at any time after the date
hereof in the custody, control or possession of any other person not referred to
in the Information Certificate or such carriers (or absent for repairs in the
ordinary course of business), Borrowers and Guarantors shall promptly notify
Agent thereof in writing. Promptly upon Agent's request, Borrowers and
Guarantors shall deliver to Agent a Collateral Access Agreement duly authorized,
executed and delivered by such person and the Borrower or Guarantor that is the
owner of such Collateral.
(i) Borrowers and Guarantors shall take any other actions reasonably
requested by Agent from time to time to cause the attachment, perfection and
first priority of, and the ability of Agent to enforce, the security interest of
Agent in any and all of the Collateral, including, without limitation, (i)
executing, delivering and, where appropriate, filing financing statements and
amendments relating thereto under the UCC or other applicable law, to the
extent, if any, that any Borrower's or Guarantor's signature thereon is required
therefor, (ii) causing Agent's name to be noted as secured party on any
certificate of title for a titled good if such notation is a condition to
attachment, perfection or priority of, or ability of Agent to enforce, the
security interest of Agent in such Collateral, (iii) complying with any
provision of any statute, regulation or treaty of the United States as to any
Collateral if compliance with such provision is a condition to attachment,
perfection or priority of, or ability of Agent to enforce, the security interest
of Agent in such Collateral, (iv) using commercially reasonable efforts to
obtain the consents and approvals of any Governmental Authority or third party,
including, without limitation, any consent of any licensor, lessor or other
person obligated on Collateral, and taking all actions required by any earlier
versions of the UCC or by other law, as applicable in any relevant jurisdiction.
SECTION 6. COLLECTION AND ADMINISTRATION
6.1 Borrowers' Loan Accounts. Agent shall maintain one or more loan
account(s) on its books in which shall be recorded (a) all Loans, Letters of
Credit and other Obligations and the Collateral, (b) all payments made by or on
behalf of any Borrower or Guarantor and (c) all other appropriate debits and
credits as provided in this Agreement, including fees, charges, costs, expenses
and interest. All entries in the loan account(s) shall be made in accordance
with Agent's customary practices as in effect from time to time.
6.2 Statements. Agent shall render to Administrative Borrower each month a
statement setting forth the balance in the Borrowers' loan account(s) maintained
by Agent for Borrowers pursuant to the provisions of this Agreement, including
principal, interest, fees, costs and expenses. Each such statement shall be
subject to subsequent adjustment by Agent but shall, absent manifest errors or
omissions, be considered correct and deemed accepted by Borrowers and Guarantors
and conclusively binding upon Borrowers and Guarantors as an account stated
except to the extent that Agent receives a written notice from Administrative
Borrower of any specific exceptions of Administrative Borrower thereto within
thirty (30) days after the date such statement has been received by Parent.
Until such time as Agent shall have rendered to Administrative Borrower a
written statement as provided above, the balance in any Borrower's loan
account(s) shall be presumptive evidence of the amounts due and owing to Agent
and Lenders by Borrowers and Guarantors.
6.3 Collection of Accounts.
(a) Borrowers shall establish and maintain, at their expense, blocked
accounts or lockboxes and related blocked accounts (in either case, "Blocked
Accounts"), as Agent may specify, with such banks as are acceptable to Agent
into which Borrowers shall promptly deposit and direct their respective account
debtors to directly remit all payments on Receivables and all payments
constituting proceeds of Inventory or other Collateral in the identical form in
which such payments are made, whether by cash, check or other manner. Borrowers
shall deliver, or cause to be delivered to Agent a Deposit Account Control
Agreement duly authorized, executed and delivered by each bank where a Blocked
Account is maintained as provided in Section 5.2 hereof or at any time and from
time to time Agent may become the bank's customer with respect to any of the
Blocked Accounts and promptly upon Agent's request, Borrowers shall execute and
deliver such agreements and documents as Agent may require in connection
therewith. Each Borrower and Guarantor agrees that all payments made to such
Blocked Accounts or other funds received and collected by Agent or any Lender,
whether in respect of the Receivables, as proceeds of Inventory or other
Collateral or otherwise shall be treated as payments to Agent and Lenders in
respect of the Obligations and therefore shall constitute the property of Agent
and Lenders to the extent of the then outstanding Obligations.
(b) For purposes of calculating the amount of the Loans available to each
Borrower, such payments will be applied (conditional upon final collection) to
the Obligations on the Business Day of receipt by Agent of immediately available
funds in the Agent Payment Account provided such payments and notice thereof are
received in accordance with Agent's usual and customary practices as in effect
from time to time and within sufficient time to credit such Borrower's loan
account on such day, and if not, then on the next Business Day. For the purposes
of calculating interest on the Obligations, such payments or other funds
received will be applied (conditional upon final collection) to the Obligations
one (1) Business Day following the date of receipt of immediately available
funds by Agent in the Agent Payment Account provided such payments or other
funds and notice thereof are received in accordance with Agent's usual and
customary practices as in effect from time to time and within sufficient time to
credit such Borrower's loan account on such day, and if not, then on the next
Business Day. In the event that at any time or from time to time there are no
Revolving Loans outstanding, Agent shall be entitled to an administrative fee in
an amount calculated based on the Interest Rate for Prime Rate Loans (on a per
annum basis) multiplied by the amount of the funds received in the Blocked
Account for such day as calculated by Agent in accordance with its customary
practice. The economic benefit of the timing in the application of payments (and
the administrative charge with respect thereto, if applicable) shall be for the
sole benefit of Agent.
(c) Each Borrower and Guarantor and their respective employees, agents and
Subsidiaries shall, acting as trustee for Agent, receive, as the property of
Agent, any monies, checks, notes, drafts or any other payment relating to and/or
proceeds of Accounts or other Collateral which come into their possession or
under their control and immediately upon receipt thereof, shall deposit or cause
the same to be deposited in the Blocked Accounts, or remit the same or cause the
same to be remitted, in kind, to Agent. In no event shall the same be commingled
with any Borrower's or Guarantor's own funds. Borrowers agree to reimburse Agent
on demand for any amounts owed or paid to any bank or other financial
institution at which a Blocked Account or any other deposit account or
investment account is established or any other bank, financial institution or
other person involved in the transfer of funds to or from the Blocked Accounts
arising out of Agent's payments to or indemnification of such bank, financial
institution or other person. The obligations of Borrowers to reimburse Agent for
such amounts pursuant to this Section 6.3 shall survive the termination of this
Agreement.
6.4 Payments.
(a) All Obligations shall be payable to the Agent Payment Account as
provided in Section 6.3 or such other place as Agent may designate from time to
time. Subject to the other terms and conditions contained herein, Agent shall
apply payments received or collected from any Borrower or Guarantor or for the
account of any Borrower or Guarantor (including the monetary proceeds of
collections or of realization upon any Collateral) as follows: first, to pay any
fees, indemnities or expense reimbursements then due to Agent and Lenders from
any Borrower or Guarantor; second, to pay interest due in respect of any Loans
(and including any Special Agent Advances) or Letter of Credit Obligations;
third, to pay or prepay principal in respect of Special Agent Advances; fourth,
to pay principal due in respect of the Loans in such order as Agent shall
determine unless otherwise expressly provided in this Agreement and to pay or
prepay Obligations arising under or pursuant to any Hedge Agreement of a
Borrower with Agent, any Lender, any Affiliate of any Lender or any other
financial institution or acceptable to Agent (up to the amount of any then
effective Reserve established in respect of such Obligations), on a pro rata
basis (as between the Loans and Obligations under any Hedge Agreement); fifth,
to pay or prepay any other Obligations whether or not then due, in such order
and manner as Agent determines and at any time an Event of Default exists or has
occurred and is continuing, to provide cash collateral for any Letter of Credit
Obligations; and sixth, to pay or prepay any Obligations arising under or
pursuant to Hedge Agreements (other than to the extent provided for above) on a
pro rata basis. Notwithstanding anything to the contrary contained in this
Agreement, (i) unless so directed by Administrative Borrower, or unless a
Default or an Event of Default shall exist or have occurred and be continuing,
Agent shall not apply any payments which it receives to any Eurodollar Rate
Loans, except (A) on the expiration date of the Interest Period applicable to
any such Eurodollar Rate Loans or (B) in the event that there are no outstanding
Prime Rate Loans and (ii) to the extent any Borrower uses any proceeds of the
Loans or Letters of Credit to acquire rights in or the use of any Collateral or
to repay any Indebtedness used to acquire rights in or the use of any
Collateral, payments in respect of the Obligations shall be deemed applied first
to the Obligations arising from Loans and Letters of Credit that were not used
for such purposes and second to the Obligations arising from Loans and Letters
of Credit the proceeds of which were used to acquire rights in or the use of any
Collateral in the chronological order in which such Borrower acquired such
rights in or the use of such Collateral.
(b) At Agent's option, all principal, interest, fees, costs, expenses and
other charges provided for in this Agreement or the other Financing Agreements
may be charged directly to the loan account(s) of any Borrower maintained by
Agent. If after receipt of any payment of, or proceeds of Collateral applied to
the payment of, any of the Obligations, Agent or any Lender is required to
surrender or return such payment or proceeds to any Person for any reason, then
the Obligations intended to be satisfied by such payment or proceeds shall be
reinstated and continue and this Agreement shall continue in full force and
effect as if such payment or proceeds had not been received by Agent or such
Lender. Borrowers and Guarantors shall be liable to pay to Agent, and do hereby
indemnify and hold Agent and Lenders harmless for the amount of any payments or
proceeds surrendered or returned. This Section 6.4(b) shall remain effective
notwithstanding any contrary action which may be taken by Agent or any Lender in
reliance upon such payment or proceeds. This Section 6.4 shall survive the
payment of the Obligations and the termination of this Agreement.
6.5 Taxes.
(a) Any and all payments by or on account of any of the Obligations shall
be made free and clear of and without deduction or withholding for or on account
of, any setoff, counterclaim, defense, duties, taxes, levies, imposts, fees,
deductions, charges, withholdings, liabilities, restrictions or conditions of
any kind, excluding (i) in the case of each Lender and Agent (A) taxes measured
by its net income, and franchise taxes imposed on it, by the United States or
jurisdiction (or any political subdivision thereof) under the laws of which such
Lender or Agent (as the case may be) is organized and (B) any United States
withholding taxes payable with respect to payments under the Financing
Agreements under laws (including any statute, treaty or regulation) in effect on
the date hereof (or, in the case of an Eligible Transferee, the date of the
Assignment and Acceptance) applicable to such Lender or Agent, as the case may
be, but not excluding any United States withholding taxes payable as a result of
any change in such laws occurring after the date hereof (or the date of such
Assignment and Acceptance) and (ii) in the case of each Lender, taxes measured
by its net income, and franchise taxes imposed on it as a result of a present or
former connection between such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any taxing authority thereof or therein (all such
non-excluded taxes, levies, imposts, fees, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes").
(b) If any Taxes shall be required by law to be deducted from or in respect
of any sum payable in respect of the Obligations to any Lender or Agent (i) the
sum payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 6.5), such Lender or Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the relevant Borrower or Guarantor shall make such deductions, (iii) the
relevant Borrower or Guarantor shall pay the full amount deducted to the
relevant taxing authority or other authority in accordance with applicable law
and (iv) the relevant Borrower or Guarantor shall deliver to Agent evidence of
such payment.
(c) In addition, each Borrower and Guarantor agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies of the United States or any political subdivision thereof or
any applicable foreign jurisdiction, and all liabilities with respect thereto,
in each case arising from any payment made hereunder or under any of the other
Financing Agreements or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any of the other Financing
Agreements (collectively, "Other Taxes").
(d) Each Borrower and Guarantor shall indemnify each Lender and Agent for
the full amount of Taxes and Other Taxes (including any Taxes and Other Taxes
imposed by any jurisdiction on amounts payable under this Section 6.5) paid by
such Lender or Agent (as the case may be) and any liability (including for
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
This indemnification shall be made within thirty (30) days from the date such
Lender or Agent (as the case may be) makes written demand (including reasonably
detailed calculations) therefor. A certificate as to the amount of such payment
or liability delivered to Administrative Borrower by a Lender (with a copy to
Agent) or by Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.
(e) As soon as practicable after any payment of Taxes or Other Taxes by any
Borrower or Guarantor, such Borrower or Guarantor shall furnish to Agent, at its
address referred to herein, the original or a certified copy of a receipt
evidencing payment thereof or other evidence of such payment.
(f) Without prejudice to the survival of any other agreements of any
Borrower or Guarantor hereunder or under any of the other Financing Agreements,
the agreements and obligations of such Borrower or Guarantor contained in this
Section 6.5 shall survive the termination of this Agreement and the payment in
full of the Obligations.
(g) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which the applicable
Borrower is resident for tax purposes, or any treaty to which such jurisdiction
is a party, with respect to payments hereunder or under any of the other
Financing Agreements shall deliver to Administrative Borrower (with a copy to
Agent), at the time or times prescribed by applicable law or reasonably
requested by Administrative Borrower or Agent (in such number of copies as is
reasonably requested by the recipient), whichever of the following is applicable
(but only if such Foreign Lender is legally entitled to do so): (i) duly
completed copies of Internal Revenue Service Form W-8BEN claiming exemption
from, or a reduction to, withholding tax under an income tax treaty, or any
successor form, (ii) duly completed copies of Internal Revenue Service Form
8-8ECI claiming exemption from withholding because the income is effectively
connection with a U.S. trade or business or any successor form, (iii) in the
case of a Foreign Lender claiming the benefits of the exemption for portfolio
interest under Sections 871(h) or 881(c) of the Code, (A) a certificate of the
Lender to the effect that such Lender is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code, a "10 percent shareholder" of a Borrower
within the meaning of Section 881(c)(3)(B) of the Code or a "controlled foreign
corporation" described and Section 881(c)(3)(C) of the Code and (B) duly
completed copies of Internal Revenue Service Form W-8BEN claiming exemption from
withholding under the portfolio interest exemption or any successor form or (iv)
any other applicable form, certificate or document prescribed by applicable law
as a basis for claiming exemption from or a reduction in United States
withholding tax duly completed together with such supplementary documentation as
may be prescribed by applicable law to permit a Borrower to determine the
withholding or deduction required to be made. Unless Administrative Borrower and
Agent have received forms or other documents satisfactory to them indicating
that payments hereunder or under any of the other Financing Agreements to or for
a Foreign Lender are not subject to United States withholding tax or are subject
to such tax at a rate reduced by an applicable tax treaty, Borrowers or Agent
shall withhold amounts required to be withheld by applicable requirements of law
from such payments at the applicable statutory rate.
(h) Any Lender claiming any additional amounts payable pursuant to this
Section 6.5 shall use its reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
applicable lending office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that would be payable
or may thereafter accrue and would not, in the sole determination of such
Lender, be otherwise disadvantageous to such Lender.
6.6 Authorization to Make Loans. Agent and Lenders are authorized to make
the Loans based upon telephonic or other instructions received from anyone
purporting to be an officer of Administrative Borrower or any Borrower or other
authorized person or, at the discretion of Agent, if such Loans are necessary to
satisfy any Obligations. All requests for Loans or Letters of Credit hereunder
shall specify the date on which the requested advance is to be made (which day
shall be a Business Day) and the amount of the requested Loan. Requests received
after 11:00 a.m. Chicago time on any day shall be deemed to have been made as of
the opening of business on the immediately following Business Day. All Loans and
Letters of Credit under this Agreement shall be conclusively presumed to have
been made to, and at the request of and for the benefit of, any Borrower or
Guarantor when deposited to the credit of any Borrower or Guarantor or otherwise
disbursed or established in accordance with the instructions of any Borrower or
Guarantor or in accordance with the terms and conditions of this Agreement.
6.7 Use of Proceeds. Borrowers shall use the initial proceeds of the Loans
and Letters of Credit hereunder only for: (a) payments to each of the persons
listed in the disbursement direction letter furnished by Borrowers to Agent on
or about the date hereof to consummate the Plan of Reorganization, (b) costs,
expenses and fees in connection with the preparation, negotiation, execution and
delivery of this Agreement, the other Financing Agreements and the Plan of
Reorganization, (c) other payments in accordance with the terms of the Plan of
Reorganization and (d) general operating, working capital and other proper
corporate purposes not otherwise prohibited by the terms of this Agreement. All
other Loans made or Letters of Credit provided to or for the benefit of any
Borrower pursuant to the provisions hereof shall be used by such Borrower only
for general operating, working capital and other proper corporate purposes of
such Borrower not otherwise prohibited by the terms hereof. None of the proceeds
will be used, directly or indirectly, for the purpose of purchasing or carrying
any margin security or for the purposes of reducing or retiring any indebtedness
which was originally incurred to purchase or carry any margin security or for
any other purpose which could reasonably be likely to cause any of the Loans to
be considered a "purpose credit" within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System, as amended.
6.8 Appointment of Administrative Borrower as Agent for Requesting Loans
and Receipts of Loans and Statements.
(a) Each Borrower hereby irrevocably appoints and constitutes
Administrative Borrower as its agent and attorney-in-fact to request and receive
Loans and Letters of Credit pursuant to this Agreement and the other Financing
Agreements from Agent or any Lender in the name or on behalf of such Borrower.
Agent and Lenders may disburse the Loans to such bank account of Administrative
Borrower or a Borrower or otherwise make such Loans to a Borrower and provide
such Letters of Credit to a Borrower as Administrative Borrower may designate or
direct, without notice to any other Borrower or Guarantor. Notwithstanding
anything to the contrary contained herein, Agent may at any time and from time
to time require that Loans to or for the account of any Borrower be disbursed
directly to an operating account of such Borrower.
(b) Administrative Borrower hereby accepts the appointment by Borrowers to
act as the agent and attorney-in-fact of Borrowers pursuant to this Section 6.8.
Administrative Borrower shall ensure that the disbursement of any Loans to each
Borrower requested by or paid to or for the account of Parent, or the issuance
of any Letter of Credit for a Borrower hereunder, shall be paid to or for the
account of such Borrower.
(c) Each Borrower and other Guarantor hereby irrevocably appoints and
constitutes Administrative Borrower as its agent to receive statements on
account and all other notices from Agent and Lenders with respect to the
Obligations or otherwise under or in connection with this Agreement and the
other Financing Agreements.
(d) Any notice, election, representation, warranty, agreement or
undertaking by or on behalf of any other Borrower or any Guarantor by
Administrative Borrower shall be deemed for all purposes to have been made by
such Borrower or Guarantor, as the case may be, and shall be binding upon and
enforceable against such Borrower or Guarantor to the same extent as if made
directly by such Borrower or Guarantor.
(e) No purported termination of the appointment of Administrative Borrower
as agent as aforesaid shall be effective, except after ten (10) days' prior
written notice to Agent.
6.9 Pro Rata Treatment. Except to the extent otherwise provided in this
Agreement or as otherwise agreed by Lenders: (a) the making and conversion of
Loans shall be made among the Lenders based on their respective Pro Rata Shares
as to the Loans and (b) each payment on account of any Obligations to or for the
account of one or more of Lenders in respect of any Obligations due on a
particular day shall be allocated among the Lenders entitled to such payments
based on their respective Pro Rata Shares and shall be distributed accordingly.
6.10 Sharing of Payments, Etc.
(a) Each Borrower and Guarantor agrees that, in addition to (and without
limitation of) any right of setoff, banker's lien or counterclaim Agent or any
Lender may otherwise have, each Lender shall be entitled, at its option (but
subject, as among Agent and Lenders, to the provisions of Section 12.3(b)
hereof), to offset balances held by it for the account of such Borrower or
Guarantor at any of its offices, in dollars or in any other currency, against
any principal of or interest on any Loans owed to such Lender or any other
amount payable to such Lender hereunder, that is not paid when due (regardless
of whether such balances are then due to such Borrower or Guarantor), in which
case it shall promptly notify Administrative Borrower and Agent thereof;
provided, that, such Lender's failure to give such notice shall not affect the
validity thereof.
(b) If any Lender (including Agent) shall obtain from any Borrower or
Guarantor payment of any principal of or interest on any Loan owing to it or
payment of any other amount under this Agreement or any of the other Financing
Agreements through the exercise of any right of setoff, banker's lien or
counterclaim or similar right or otherwise (other than from Agent as provided
herein), and, as a result of such payment, such Lender shall have received more
than its Pro Rata Share of the principal of the Loans or more than its share of
such other amounts then due hereunder or thereunder by any Borrower or Guarantor
to such Lender than the percentage thereof received by any other Lender, it
shall promptly pay to Agent, for the benefit of Lenders, the amount of such
excess and simultaneously purchase from such other Lenders a participation in
the Loans or such other amounts, respectively, owing to such other Lenders (or
such interest due thereon, as the case may be) in such amounts, and make such
other adjustments from time to time as shall be equitable, to the end that all
Lenders shall share the benefit of such excess payment (net of any expenses that
may be incurred by such Lender in obtaining or preserving such excess payment)
in accordance with their respective Pro Rata Shares or as otherwise agreed by
Lenders. To such end all Lenders shall make appropriate adjustments among
themselves (by the resale of participation sold or otherwise) if such payment is
rescinded or must otherwise be restored.
(c) Each Borrower and Guarantor agrees that any Lender purchasing a
participation (or direct interest) as provided in this Section may exercise, in
a manner consistent with this Section, all rights of setoff, banker's lien,
counterclaim or similar rights with respect to such participation as fully as if
such Lender were a direct holder of Loans or other amounts (as the case may be)
owing to such Lender in the amount of such participation.
(d) Nothing contained herein shall require any Lender to exercise any right
of setoff, banker's lien, counterclaims or similar rights or shall affect the
right of any Lender to exercise, and retain the benefits of exercising, any such
right with respect to any other Indebtedness or obligation of any Borrower or
Guarantor. If, under any applicable bankruptcy, insolvency or other similar law,
any Lender receives a secured claim in lieu of a setoff to which this Section
applies, such Lender shall, to the extent practicable, assign such rights to
Agent for the benefit of Lenders and, in any event, exercise its rights in
respect of such secured claim in a manner consistent with the rights of Lenders
entitled under this Section to share in the benefits of any recovery on such
secured claim.
6.11 Settlement Procedures.
(a) In order to administer the Credit Facility in an efficient manner and
to minimize the transfer of funds between Agent and Lenders, Agent may, at its
option, subject to the terms of this Section, make available, on behalf of
Lenders, the full amount of the Loans requested or charged to any Borrower's
loan account(s) or otherwise to be advanced by Lenders pursuant to the terms
hereof, without requirement of prior notice to Lenders of the proposed Loans.
(b) With respect to all Loans made by Agent on behalf of Lenders as
provided in this Section, the amount of each Lender's Pro Rata Share of the
outstanding Loans shall be computed weekly, and shall be adjusted upward or
downward on the basis of the amount of the outstanding Loans as of 5:00 p.m.
Chicago time on the Business Day immediately preceding the date of each
settlement computation; provided, that, Agent retains the absolute right at any
time or from time to time to make the above described adjustments at intervals
more frequent than weekly, but in no event more than twice in any week. Agent
shall deliver to each of the Lenders after the end of each week, or at such
lesser period or periods as Agent shall determine, a summary statement of the
amount of outstanding Loans for such period (such week or lesser period or
periods being hereinafter referred to as a "Settlement Period"). If the summary
statement is sent by Agent and received by a Lender prior to 12:00 p.m. Chicago
time, then such Lender shall make the settlement transfer described in this
Section by no later than 3:00 p.m. Chicago time on the same Business Day and if
received by a Lender after 12:00 p.m. Chicago time, then such Lender shall make
the settlement transfer by not later than 3:00 p.m. Chicago time on the next
Business Day following the date of receipt. If, as of the end of any Settlement
Period, the amount of a Lender's Pro Rata Share of the outstanding Loans is more
than such Lender's Pro Rata Share of the outstanding Loans as of the end of the
previous Settlement Period, then such Lender shall forthwith (but in no event
later than the time set forth in the preceding sentence) transfer to Agent by
wire transfer in immediately available funds the amount of the increase.
Alternatively, if the amount of a Lender's Pro Rata Share of the outstanding
Loans in any Settlement Period is less than the amount of such Lender's Pro Rata
Share of the outstanding Loans for the previous Settlement Period, Agent shall
forthwith transfer to such Lender by wire transfer in immediately available
funds the amount of the decrease. The obligation of each of the Lenders to
transfer such funds and effect such settlement shall be irrevocable and
unconditional and without recourse to or warranty by Agent. Agent and each
Lender agrees to mark its books and records at the end of each Settlement Period
to show at all times the dollar amount of its Pro Rata Share of the outstanding
Loans and Letters of Credit. Each Lender shall only be entitled to receive
interest on its Pro Rata Share of the Loans to the extent such Loans have been
funded by such Lender. Because the Agent on behalf of Lenders may be advancing
and/or may be repaid Loans prior to the time when Lenders will actually advance
and/or be repaid such Loans, interest with respect to Loans shall be allocated
by Agent in accordance with the amount of Loans actually advanced by and repaid
to each Lender and the Agent and shall accrue from and including the date such
Loans are so advanced to but excluding the date such Loans are either repaid by
Borrowers or actually settled with the applicable Lender as described in this
Section.
(c) To the extent that Agent has made any such amounts available and the
settlement described above shall not yet have occurred, upon repayment of any
Loans by a Borrower, Agent may apply such amounts repaid directly to any amounts
made available by Agent pursuant to this Section. In lieu of weekly or more
frequent settlements, Agent may, at its option, at any time require each Lender
to provide Agent with immediately available funds representing its Pro Rata
Share of each Loan, prior to Agent's disbursement of such Loan to Borrower. In
such event, all Loans under this Agreement shall be made by the Lenders
simultaneously and proportionately to their Pro Rata Shares. No Lender shall be
responsible for any default by any other Lender in the other Lender's obligation
to make a Loan requested hereunder nor shall the Commitment of any Lender be
increased or decreased as a result of the default by any other Lender in the
other Lender's obligation to make a Loan hereunder.
(d) If Agent is not funding a particular Loan to a Borrower (or
Administrative Borrower for the benefit of such Borrower) pursuant to Sections
6.11(a) and 6.11(b) above on any day, but is requiring each Lender to provide
Agent with immediately available funds on the date of such Loan as provided in
Section 6.11(c) above, Agent may assume that each Lender will make available to
Agent such Lender's Pro Rata Share of the Loan requested or otherwise made on
such day and Agent may, in its discretion, but shall not be obligated to, cause
a corresponding amount to be made available to or for the benefit of such
Borrower on such day. If Agent makes such corresponding amount available to a
Borrower and such corresponding amount is not in fact made available to Agent by
such Lender, Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest thereon for each day from the
date such payment was due until the date such amount is paid to Agent at the
Federal Funds Rate for each day during such period (as published by the Federal
Reserve Bank of New York or at Agent's option based on the arithmetic mean
determined by Agent of the rates for the last transaction in overnight Federal
funds arranged prior to 9:00 a.m. (New York City time) on that day by each of
the three leading brokers of Federal funds transactions in New York City
selected by Agent) and if such amounts are not paid within three (3) days of
Agent's demand, at the highest Interest Rate provided for in Section 3.1 hereof
applicable to Prime Rate Loans. During the period in which such Lender has not
paid such corresponding amount to Agent, notwithstanding anything to the
contrary contained in this Agreement or any of the other Financing Agreements,
the amount so advanced by Agent to or for the benefit of any Borrower shall, for
all purposes hereof, be a Loan made by Agent for its own account. Upon any such
failure by a Lender to pay Agent, Agent shall promptly thereafter notify
Administrative Borrower of such failure and Borrowers shall pay such
corresponding amount to Agent for its own account within five (5) Business Days
of Administrative Borrower's receipt of such notice. A Lender who fails to pay
Agent its Pro Rata Share of any Loans made available by the Agent on such
Lender's behalf, or any Lender who fails to pay any other amount owing by it to
Agent, is a "Defaulting Lender". Agent shall not be obligated to transfer to a
Defaulting Lender any payments received by Agent for the Defaulting Lender's
benefit, nor shall a Defaulting Lender be entitled to the sharing of any
payments hereunder (including any principal, interest or fees). Amounts payable
to a Defaulting Lender shall instead be paid to or retained by Agent. Agent may
hold and, in its discretion, relend to a Borrower the amount of all such
payments received or retained by it for the account of such Defaulting Lender.
For purposes of voting or consenting to matters with respect to this Agreement
and the other Financing Agreements and determining Pro Rata Shares, such
Defaulting Lender shall be deemed not to be a "Lender" and such Lender's
Commitment shall be deemed to be zero (0). This Section shall remain effective
with respect to a Defaulting Lender until such default is cured. The operation
of this Section shall not be construed to increase or otherwise affect the
Commitment of any Lender, or relieve or excuse the performance by any Borrower
or Guarantor of their duties and obligations hereunder.
(e) Nothing in this Section or elsewhere in this Agreement or the other
Financing Agreements shall be deemed to require Agent to advance funds on behalf
of any Lender or to relieve any Lender from its obligation to fulfill its
Commitment hereunder or to prejudice any rights that any Borrower may have
against any Lender as a result of any default by any Lender hereunder in
fulfilling its Commitment.
6.12 Obligations Several; Independent Nature of Lenders' Rights. The
obligation of each Lender hereunder is several, and no Lender shall be
responsible for the obligation or commitment of any other Lender hereunder.
Nothing contained in this Agreement or any of the other Financing Agreements and
no action taken by the Lenders pursuant hereto or thereto shall be deemed to
constitute the Lenders to be a partnership, an association, a joint venture or
any other kind of entity. The amounts payable at any time hereunder to each
Lender shall be a separate and independent debt, and subject to Section 12.3
hereof, each Lender shall be entitled to protect and enforce its rights arising
out of this Agreement and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.
SECTION 7. COLLATERAL REPORTING AND COVENANTS
7.1 Collateral Reporting.
(a) Borrowers shall provide Agent with the following documents in a form
reasonably satisfactory to Agent:
(i) on a regular basis as required by Agent, schedules of sales made,
credits issued and cash received;
(ii) as soon as possible after the end of each month (but in any event
within fifteen (15) Business Days after the end thereof), on a monthly basis or
more frequently as Agent may reasonably request, (A) perpetual inventory
reports, (B) inventory reports by location and category (and including the
amounts of Inventory and the value thereof at any leased locations and at
premises of warehouses, processors or other third parties), (C) agings of
accounts receivable (together with a reconciliation to the previous month's
aging and general ledger) and (D) agings of accounts payable (and including
information indicating the amounts owing to owners and lessors of leased
premises, warehouses, processors and other third parties from time to time in
possession of any Collateral);
(iii) upon Agent's reasonable request, (A) copies of customer statements,
purchase orders, sales invoices, credit memos, remittance advices and reports,
and copies of deposit slips and bank statements, (B) copies of shipping and
delivery documents, and (C) copies of purchase orders, invoices and delivery
documents for Inventory and Equipment acquired by any Borrower or Guarantor; and
(iv) such other reports as to the Collateral as Agent shall reasonably
request from time to time.
(b) If any Borrower's or Guarantor's records or reports of the Collateral
are prepared or maintained by an accounting service, contractor, shipper or
other agent, such Borrower and Guarantor hereby irrevocably authorizes such
service, contractor, shipper or agent to deliver such records, reports, and
related documents to Agent and to follow Agent's instructions with respect to
further services at any time that an Event of Default exists or has occurred and
is continuing.
7.2 Accounts Covenants.
(a) Borrowers shall notify Agent promptly of: (i) any material delay in any
Borrower's performance of any of its material obligations to any account debtor
or the assertion of any material claims, offsets, defenses or counterclaims by
any account debtor, or any material disputes with account debtors, or any
settlement, adjustment or compromise thereof, (ii) all material adverse
information known to any Borrower or Guarantor relating to the financial
condition of any account debtor and (iii) any event or circumstance which, to
the best of any Borrower's or Guarantor's knowledge, would cause Agent to
consider any then existing Accounts as no longer constituting Eligible Accounts.
No credit, discount, allowance or extension or agreement for any of the
foregoing shall be granted to any account debtor without Agent's consent, except
in the ordinary course of a Borrower's or Guarantor's business in accordance
with practices and policies previously disclosed in writing to Agent and except
as set forth in the schedules delivered to Agent pursuant to Section 7.1(a)
above. So long as no Event of Default exists or has occurred and is continuing,
Borrowers and Guarantors shall settle, adjust or compromise any claim, offset,
counterclaim or dispute with any account debtor. At any time that an Event of
Default exists or has occurred and is continuing, Agent shall, at its option,
have the exclusive right to settle, adjust or compromise any claim, offset,
counterclaim or dispute with account debtors or grant any credits, discounts or
allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice
delivered to Agent or schedule thereof delivered to Agent shall be true and
complete, (ii) no payments shall be made thereon except payments immediately
delivered to Agent pursuant to the terms of this Agreement, (iii) no material
credit, discount, allowance or extension or agreement for any of the foregoing
shall be granted to any account debtor except as reported to Agent in accordance
with this Agreement and except for credits, discounts, allowances or extensions
made or given in the ordinary course of each Borrower's business in accordance
with practices and policies previously disclosed to Agent, (iv) there shall be
no material setoffs, deductions, contras, defenses, counterclaims or disputes
existing or asserted with respect thereto except as reported to Agent in
accordance with the terms of this Agreement, (v) none of the transactions giving
rise thereto will violate any applicable foreign, Federal, State or local laws
or regulations, all documentation relating thereto will be legally sufficient
under such laws and regulations and all such documentation will be legally
enforceable in accordance with its terms.
(c) Agent shall have the right at any time or times, in Agent's name or in
the name of a nominee of Agent, to verify the validity, amount or any other
matter relating to any Receivables or other Collateral, by mail, telephone,
facsimile transmission or otherwise.
7.3 Inventory Covenants. With respect to the Inventory: (a) each Borrower
and Guarantor shall at all times maintain inventory records reasonably
satisfactory to Agent, keeping correct and accurate records itemizing and
describing the kind, type, quality and quantity of Inventory, such Borrower's or
Guarantor's cost therefor and daily withdrawals therefrom and additions thereto;
(b) Borrowers and Guarantors shall conduct a physical count of the Inventory at
least once each year but at any time or times as Agent may request on or after
an Event of Default, and promptly following such physical inventory shall supply
Agent with a report in the form and with such specificity as may be satisfactory
to Agent concerning such physical count; (c) Borrowers and Guarantors shall not
remove any Inventory from the locations set forth or permitted herein, without
the prior written consent of Agent, except for sales of Inventory in the
ordinary course of its business and except to move Inventory directly from one
location set forth or permitted herein to another such location and except for
Inventory shipped from the manufacturer thereof to such Borrower or Guarantor
which is in transit to the locations set forth or permitted herein; (d) upon
Agent's request, Borrowers shall, at their expense, no more than one (1) time in
any twelve (12) month period, but at any time or times as Agent may request on
or after an Event of Default, deliver or cause to be delivered to Agent written
appraisals as to the Inventory in form, scope and methodology acceptable to
Agent and by an appraiser acceptable to Agent, addressed to Agent and Lenders
and upon which Agent and Lenders are expressly permitted to rely; (e) Borrowers
and Guarantors shall produce, use, store and maintain the Inventory with all
reasonable care and caution, ordinary wear and tear and casualty and
condemnation excepted and in accordance with applicable standards of any
insurance and in conformity with applicable laws (including the requirements of
the Federal Fair Labor Standards Act of 1938, as amended and all rules,
regulations and orders related thereto); (f) none of the Inventory or other
Collateral constitutes farm products or the proceeds thereof; (g) each Borrower
and Guarantor assumes all responsibility and liability arising from or relating
to the production, use, sale or other disposition of the Inventory; (h)
Borrowers and Guarantors shall not sell Inventory to any customer on approval,
or any other basis which entitles the customer to return or may obligate any
Borrower or Guarantor to repurchase such Inventory; (i) Borrowers and Guarantors
shall keep the Inventory in good and marketable condition; and (j) Borrowers and
Guarantors shall not, without prior written notice to Agent or the specific
identification of such Inventory in a report with respect thereto provided by
Administrative Borrower to Agent pursuant to Section 7.1(a) hereof, acquire or
accept any Inventory on consignment or approval.
7.4 Equipment and Real Property Covenants. With respect to the Equipment
and Real Property: (a) upon Agent's request, Borrowers and Guarantors shall, at
their expense, no more than one (1) time in any twelve (12) month period, but at
any time or times as Agent may request on or after an Event of Default, deliver
or cause to be delivered to Agent written appraisals as to the Equipment and/or
the Real Property in form, scope and methodology reasonably acceptable to Agent
and by an appraiser acceptable to Agent, addressed to Agent and upon which Agent
is expressly permitted to rely; (b) Borrowers and Guarantors shall keep the
Equipment in good order, repair, running and marketable condition (ordinary wear
and tear excepted); (c) Borrowers and Guarantors shall use the Equipment and
Real Property with all reasonable care and caution and in accordance with
applicable standards of any insurance and in conformity with all applicable
laws; (d) the Equipment is and shall be used in the business of Borrowers and
Guarantors and not for personal, family, household or farming use; (e) the
Borrowers and Guarantors represent and warrant that the Equipment of Borrowers
and Guarantors are located on Real Property owned by a Borrower or Guarantor
which is subject to a Mortgage in favor of Agent and Borrowers and Guarantors
shall not remove any Equipment from such locations, except to the extent
necessary to have any Equipment repaired or maintained in the ordinary course of
its business or to move Equipment directly from one owned location subject to a
Mortgage to another owned location subject to a Mortgage and except for the
movement of motor vehicles used by or for the benefit of such Borrower or
Guarantor in the ordinary course of business; (f) the Equipment is now and shall
remain personal property and Borrowers and Guarantors shall not permit any of
the Equipment to be or become a part of or affixed to real property; and (g)
each Borrower and Guarantor assumes all responsibility and liability arising
from the use of the Equipment and Real Property.
7.5 Power of Attorney. Each Borrower and Guarantor hereby irrevocably
designates and appoints Agent (and all persons designated by Agent) as such
Borrower's and Guarantor's true and lawful attorney-in-fact, and authorizes
Agent, in such Borrower's, Guarantor's or Agent's name, to: (a) at any time an
Event of Default has occurred and is continuing (i) demand payment on
Receivables or other Collateral, (ii) enforce payment of Receivables by legal
proceedings or otherwise, (iii) exercise all of such Borrower's or Guarantor's
rights and remedies to collect any Receivable or other Collateral, (iv) sell or
assign any Receivable upon such terms, for such amount and at such time or times
as the Agent deems advisable, (v) settle, adjust, compromise, extend or renew an
Account, (vi) discharge and release any Receivable, (vii) prepare, file and sign
such Borrower's or Guarantor's name on any proof of claim in bankruptcy or other
similar document against an account debtor or other obligor in respect of any
Receivables or other Collateral, (viii) notify the post office authorities to
change the address for delivery of remittances from account debtors or other
obligors in respect of Receivables or other proceeds of Collateral to an address
designated by Agent, and open and dispose of all mail addressed to such Borrower
or Guarantor and handle and store all mail relating to the Collateral; and (ix)
do all acts and things which are necessary, in Agent's determination, to fulfill
such Borrower's or Guarantor's obligations under this Agreement and the other
Financing Agreements and (b) at any time to (i) take control in any manner of
any item of payment in respect of Receivables or constituting Collateral or
otherwise received in or for deposit in the Blocked Accounts or otherwise
received by Agent or any Lender, (ii) have access to any lockbox or postal box
into which remittances from account debtors or other obligors in respect of
Receivables or other proceeds of Collateral are sent or received, (iii) endorse
such Borrower's or Guarantor's name upon any items of payment in respect of
Receivables or constituting Collateral or otherwise received by Agent and any
Lender and deposit the same in Agent's account for application to the
Obligations, (iv) endorse such Borrower's or Guarantor's name upon any chattel
paper, document, instrument, invoice, or similar document or agreement relating
to any Receivable or any goods pertaining thereto or any other Collateral,
including any warehouse or other receipts, or bills of lading and other
negotiable or non-negotiable documents, (v) clear Inventory the purchase of
which was financed with a Letter of Credit through U.S. Customs or foreign
export control authorities in such Borrower's or Guarantor's name, Agent's name
or the name of Agent's designee, and to sign and deliver to customs officials
powers of attorney in such Borrower's or Guarantor's name for such purpose, and
to complete in such Borrower's or Guarantor's or Agent's name, any order, sale
or transaction, obtain the necessary documents in connection therewith and
collect the proceeds thereof, and (vi) sign such Borrower's or Guarantor's name
on any verification of Receivables and notices thereof to account debtors or any
secondary obligors or other obligors in respect thereof. Each Borrower and
Guarantor hereby releases Agent and Lenders and their respective officers,
employees and designees from any liabilities arising from any act or acts under
this power of attorney and in furtherance thereof, whether of omission or
commission, except as a result of Agent's or any Lender's own gross negligence
or wilful misconduct as determined pursuant to a final non-appealable order of a
court of competent jurisdiction.
7.6 Right to Cure. Agent may, at its option, upon notice to Administrative
Borrower, (a) cure any default by any Borrower or Guarantor under any material
agreement with a third party that affects the Collateral, its value or the
ability of Agent to collect, sell or otherwise dispose of the Collateral or the
rights and remedies of Agent or any Lender therein or the ability of any
Borrower or Guarantor to perform its obligations hereunder or under any of the
other Financing Agreements, (b) pay or bond on appeal any judgment entered
against any Borrower or Guarantor, (c) discharge taxes, liens, security
interests or other encumbrances at any time levied on or existing with respect
to the Collateral (except those permitted by the terms of this Agreement) and
(d) pay any amount, incur any expense or perform any act which, in Agent's
reasonable judgment, is necessary or appropriate to preserve, protect, insure or
maintain the Collateral and the rights of Agent and Lenders with respect
thereto. Agent may add any amounts so expended to the Obligations and charge any
Borrower's account therefor, such amounts to be repayable by Borrowers on
demand. Agent and Lenders shall be under no obligation to effect such cure,
payment or bonding and shall not, by doing so, be deemed to have assumed any
obligation or liability of any Borrower or Guarantor. Any payment made or other
action taken by Agent or any Lender under this Section shall be without
prejudice to any right to assert an Event of Default hereunder and to proceed
accordingly.
7.7 Access to Premises. From time to time as requested by Agent, at the
cost and expense of Borrowers, (a) Agent or its designee shall have complete
access to all of each Borrower's and Guarantor's premises during normal business
hours and after notice to Administrative Borrower, or at any time and without
notice to Administrative Borrower if an Event of Default has occurred and is
continuing, for the purposes of inspecting, verifying and auditing the
Collateral and all of each Borrower's and Guarantor's books and records,
including the Records, and (b) each Borrower and Guarantor shall promptly
furnish to Agent such copies of such books and records or extracts therefrom as
Agent may request, and Agent or any Lender or Agent's designee may use during
normal business hours such of any Borrower's and Guarantor's personnel,
equipment, supplies and premises as may be reasonably necessary for the
foregoing and if an Event of Default exists or has occurred and is continuing
for the collection of Receivables and realization of other Collateral.
SECTION 8. REPRESENTATIONS AND WARRANTIES
Each Borrower and Guarantor hereby represents and warrants to Agent and
Lenders the following (which shall survive the execution and delivery of this
Agreement):
8.1 Corporate Existence, Power and Authority. Each Borrower and Guarantor
is a corporation duly organized and in good standing under the laws of its
jurisdiction of organization and is duly qualified as a foreign corporation and
in good standing in all states or other jurisdictions where the nature and
extent of the business transacted by it or the ownership of assets makes such
qualification necessary, except for those jurisdictions in which the failure to
so qualify would not have a Material Adverse Effect. The execution, delivery and
performance of this Agreement, the other Financing Agreements and the
transactions contemplated hereunder and thereunder (a) are all within each
Borrower's and Guarantor's corporate powers, (b) have been duly authorized, (c)
are not in contravention of law or the terms of any Borrower's or Guarantor's
certificate of incorporation, by laws, or other organizational documentation, or
any material indenture, agreement or undertaking to which any Borrower or
Guarantor is a party or by which any Borrower or Guarantor or its property are
bound and (d) will not result in the creation or imposition of, or require or
give rise to any obligation to grant, any lien, security interest, charge or
other encumbrance upon any property of any Borrower or Guarantor except for
liens in favor of the Agent. This Agreement and the other Financing Agreements
to which any Borrower or Guarantor is a party constitute legal, valid and
binding obligations of such Borrower and Guarantor enforceable in accordance
with their respective terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, by general equitable principles or by
principles of good faith and fair dealing (regardless of whether enforcement is
sought in equity or at law).
8.2 Name; State of Organization; Chief Executive Office; Collateral
Locations.
(a) As of the date hereof, the exact legal name of each Borrower and
Guarantor is as set forth on the signature page of this Agreement and in the
Information Certificate. As of the date hereof, no Borrower or Guarantor has,
during the five years prior to the date of this Agreement, been known by or used
any other corporate or fictitious name or been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any Person,
or acquired any of its property or assets out of the ordinary course of
business, except as set forth in the Information Certificate.
(b) As of the date hereof, each Borrower and Guarantor is an organization
of the type and organized in the jurisdiction set forth in the Information
Certificate. As of the date hereof, the Information Certificate accurately sets
forth the organizational identification number of each Borrower and Guarantor or
accurately states that such Borrower or Guarantor has none and accurately sets
forth the federal employer identification number of each Borrower and Guarantor.
(c) As of the date hereof, the chief executive office and mailing address
of each Borrower and Guarantor and each Borrower's and Guarantor's Records
concerning Accounts are located only at the address identified as such in
Schedule 8.2 to the Information Certificate and its only other places of
business and the only other locations of Collateral with a value in excess of
$50,000, if any, are the addresses set forth in Schedule 8.2 to the Information
Certificate, subject to the rights of any Borrower or Guarantor to establish new
locations in accordance with Section 9.2 below. The Information Certificate
correctly identifies any of such locations which are not owned by a Borrower or
Guarantor and sets forth the owners and/or operators thereof.
8.3 Financial Statements; No Material Adverse Change. All financial
statements relating to any Borrower or Guarantor which have been or may
hereafter be delivered by any Borrower or Guarantor to Agent and Lenders have
been prepared in accordance with GAAP (except as to any interim financial
statements, to the extent such statements are subject to normal year-end
adjustments and do not include any notes) and fairly present in all material
respects the financial condition and the results of operation of the
Administrative Borrower and its Subsidiaries, taken as a whole as at the dates
and for the periods set forth therein. Except as disclosed in any interim
financial statements furnished by Borrowers and Guarantors to Agent prior to the
date of this Agreement, there has been no act, condition or event which has had
or is reasonably likely to have a Material Adverse Effect since the date of the
most recent audited financial statements of the Administrative Borrower and its
Subsidiaries, taken as a whole furnished by any Borrower or Guarantor to Agent
prior to the date of this Agreement. The projections dated May 24, 2005 for the
fiscal years ending 2005 through 2007 that have been delivered to Agent or any
projections of the Administrative Borrower and its Subsidiaries, taken as a
whole hereafter delivered to Agent have been prepared in light of the past
operations of the businesses and are based upon estimates and assumptions made
in good faith and believed by the Administrative Borrower to be reasonable when
made in light of the then current conditions and current facts.
8.4 Priority of Liens; Title to Properties. The security interests and
liens granted to Agent under this Agreement and the other Financing Agreements
constitute valid and perfected first priority liens and security interests in
and upon the Collateral subject only to the liens indicated on Schedule 8.4 to
the Information Certificate and the other liens permitted under Section 9.8
hereof. Each Borrower and Guarantor has good and marketable fee simple title to
or valid leasehold interests in all of its Real Property and good, valid and
marketable title to, valid leasehold interests in or other rights to use all of
its other properties and assets subject to no liens, mortgages, pledges,
security interests, encumbrances or charges of any kind, except those granted to
Agent and such others as are specifically listed on Schedule 8.4 to the
Information Certificate or permitted under Section 9.8 hereof.
8.5 Tax Returns. Each Borrower and Guarantor has filed, or caused to be
filed, in a timely manner all federal and all other material State, foreign and
local tax returns, reports and declarations which are required to be filed by
it. All information in such tax returns, reports and declarations is complete
and accurate in all material respects. EWP has paid or caused to be paid all
material, and each other Borrower and Guarantor has paid or caused to be paid
all material post-petition, taxes due and payable or claimed due and payable in
any assessment received by it, except taxes the validity of which are being
contested in good faith by appropriate proceedings diligently pursued and
available to such Borrower or Guarantor and with respect to which adequate
reserves have been set aside on its books. Each Borrower (other than EWP) has
paid or caused to be paid all pre-petition taxes due and payable prior to
February 26, 2004 in accordance with the terms of the Plan of Reorganization.
Adequate provision has been made for the payment of all accrued and unpaid
Federal, State, county, local, foreign and other taxes whether or not yet due
and payable and whether or not disputed.
8.6 Litigation. Except as set forth on Schedule 8.6 to the Information
Certificate, (a) there is no investigation by any Governmental Authority
pending, or to any Borrower's or Guarantor's actual knowledge threatened,
against or affecting any Borrower or Guarantor, its or their assets or business
and (b) there is no action, suit, proceeding or claim by any Person pending, or
to any Borrower's or Guarantor's actual knowledge threatened, against any
Borrower or Guarantor or its or their assets, or against or affecting any
transactions contemplated by this Agreement, in each case, which has or could
reasonably be expected to have a Material Adverse Effect.
8.7 Compliance with Other Agreements and Applicable Laws.
(a) Borrowers and Guarantors are not in default in any respect under, or in
violation in any respect of the terms of, any material agreement, contract,
instrument, lease or other commitment to which it is a party or by which it or
any of its assets are bound which default or violation could, individually or in
the aggregate for all such defaults or violations, reasonably be expected to
have a Material Adverse Effect. Borrowers and Guarantors are in compliance with
the requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority relating to their respective businesses, including,
without limitation, those set forth in or promulgated pursuant to the
Occupational Safety and Health Act of 1970, as amended, the Fair Labor Standards
Act of 1938, as amended, ERISA, the Code, as amended, and the rules and
regulations thereunder, and all Environmental Laws, except in each case where
any non-compliance or violation could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(b) Borrowers and Guarantors have obtained all permits, licenses,
approvals, consents, certificates, orders or authorizations of any Governmental
Authority required by Environmental Law and for the lawful conduct of its
business except where the failure to obtain could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect (the
"Permits"). All of the Permits are valid and subsisting and in full force and
effect. There are no actions, claims or proceedings pending or to the best of
any Borrower's or Guarantor's actual knowledge, threatened that seek the
revocation, cancellation, suspension or modification of any of the Permits. 8.8
Environmental Compliance.
(a) Except as set forth on Schedule 8.8 to the Information Certificate,
Borrowers, Guarantors and any Subsidiary of any Borrower or Guarantor have not
generated, used, stored, treated, transported, manufactured, handled, produced
or disposed of any Hazardous Materials, on or off its premises (whether or not
owned by it) in any manner which at any time violates in any respect any
applicable Environmental Law or Permit, and the operations of Borrowers,
Guarantors and any Subsidiary of any Borrower or Guarantor complies in all
respects with all Environmental Laws and all Permits, except in each case where
any non-compliance or violation could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(b) Except as set forth on Schedule 8.8 to the Information Certificate,
there has been no investigation by any Governmental Authority or any proceeding,
complaint, order, directive, claim, citation or notice by any Governmental
Authority or any other person nor is any pending or to any Borrower's or
Guarantor's actual knowledge threatened, with respect to any non compliance with
or violation of the requirements of any Environmental Law by any Borrower or
Guarantor and any Subsidiary of any Borrower or Guarantor or the release, spill
or discharge, threatened or actual, of any Hazardous Material or the generation,
use, storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Materials or any other environmental, health or safety
matter, which in each case could, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(c) Except as set forth on Schedule 8.8 to the Information Certificate,
Borrowers, Guarantors and their Subsidiaries have no liability in connection
with a release, spill or discharge, threatened or actual, of any Hazardous
Materials or the generation, use, storage, treatment, transportation,
manufacture, handling, production or disposal of any Hazardous Materials (i)
with respect to the Real Property owned by EWP and FV Steel to the extent such
liability exceeds $750,000 or (ii) with respect to all other Real Property to
the extent such liability could reasonably be expected to have a Material
Adverse Effect.
8.9 Employee Benefits.
(a) Each Plan is in compliance in all respects with the applicable
provisions of ERISA, the Code and other Federal or State law except for any
non-compliance which could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each Plan which is intended to
qualify under Section 401(a) of the Code has received a favorable determination
letter from the Internal Revenue Service and to any Borrower's or Guarantor's
actual knowledge, nothing has occurred which would cause the loss of such
qualification. Each Borrower and its ERISA Affiliates have made all required
contributions to any Plan subject to Section 412 of the Code, and no application
for a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending, or to any Borrower's or Guarantor's actual
knowledge, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. There has
been no prohibited transaction or violation of the fiduciary responsibility
rules with respect to any Plan which could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) based on the latest valuation of each Pension Plan and on the actuarial
methods and assumptions employed for such valuation (determined in accordance
with the assumptions used for funding such Pension Plan pursuant to Section 412
of the Code) the aggregate current value of accumulated benefit liabilities of
such Pension Plan under Section 4001(a)(16) of ERISA does not exceed the
aggregate current value of the assets of such Pension Plan; (iii) each Borrower
and Guarantor, and their ERISA Affiliates, have not incurred and do not
reasonably expect to incur, any material liability under Title IV of ERISA with
respect to any Plan (other than premiums due and not delinquent under Section
4007 of ERISA); (iv) each Borrower and Guarantor, and their ERISA Affiliates,
have not incurred and do not reasonably expect to incur, any material liability
(and no event has occurred which, with the giving of notice under Section 4219
of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA
with respect to a Multiemployer Plan; and (v) each Borrower and Guarantor, and
their ERISA Affiliates, have not engaged in a transaction that would be subject
to Section 4069 or 4212(c) of ERISA.
8.10 Bank Accounts. As of the date hereof all of the deposit accounts,
investment accounts or other accounts in the name of or used by any Borrower or
Guarantor maintained at any bank or other financial institution are set forth on
Schedule 8.10 to the Information Certificate, subject to the right of each
Borrower and Guarantor to establish new accounts in accordance with Section 5.2
hereof.
8.11 Intellectual Property. Each Borrower and Guarantor owns or licenses or
otherwise has the right to use all Intellectual Property necessary for the
operation of its business as presently conducted or proposed to be conducted. As
of the date hereof, Borrowers and Guarantors do not have any Intellectual
Property registered, or subject to pending applications, in the United States
Patent and Trademark Office or any similar office or agency in the United
States, any State thereof, any political subdivision thereof or in any other
country, other than those described in Schedule 8.11 to the Information
Certificate and has not granted any licenses with respect thereto other than as
set forth in Schedule 8.11 to the Information Certificate. No event has occurred
which permits or would permit after notice or passage of time or both, the
revocation, suspension or termination of such rights, except in each case, where
any such event could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. To any Borrower's and Guarantor's
actual knowledge, no slogan or other advertising device, product, process,
method, substance or other Intellectual Property or goods bearing or using any
Intellectual Property presently contemplated to be sold by or employed by any
Borrower or Guarantor infringes any patent, trademark, servicemark, tradename,
copyright, license or other Intellectual Property owned by any other Person
presently and no claim or litigation is pending or threatened against or
affecting any Borrower or Guarantor contesting its right to sell or use any such
Intellectual Property, in each case which could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. As of the
date hereof, Schedule 8.11 to the Information Certificate sets forth all of the
agreements or other arrangements of each Borrower and Guarantor pursuant to
which such Borrower or Guarantor has a license (except for commercially
available off-the-shelf software licenses) or other right to use any trademarks,
logos, designs, representations or other Intellectual Property owned by another
person as in effect on the date hereof and the dates of the expiration of such
agreements or other arrangements of such Borrower or Guarantor as in effect on
the date hereof (collectively, together with such agreements or other
arrangements as may be entered into by any Borrower or Guarantor after the date
hereof, collectively, the "License Agreements" and individually, a "License
Agreement"). No trademark, servicemark, copyright or other Intellectual Property
at any time used by any Borrower or Guarantor which is owned by another person,
or owned by such Borrower or Guarantor subject to any security interest, lien,
collateral assignment, pledge or other encumbrance in favor of any person other
than Agent, is affixed to any Eligible Inventory, except (a) to the extent
permitted under the term of the license agreements listed on Schedule 8.11 to
the Information Certificate and (b) to the extent the sale of Inventory to which
such Intellectual Property is affixed is permitted to be sold by such Borrower
or Guarantor under applicable law (including the United States Copyright Act of
1976).
8.12 Subsidiaries; Affiliates; Capitalization; Solvency.
(a) As of the date hereof, each Borrower and Guarantor does not have any
direct or indirect Subsidiaries or Affiliates and is not engaged in any joint
venture or partnership except as set forth in Schedule 8.12 to the Information
Certificate.
(b) As of the date hereof, each Borrower and Guarantor is the record and
beneficial owner of all of the issued and outstanding shares of Capital Stock of
each of the Subsidiaries listed on Schedule 8.12 to the Information Certificate
as being owned by such Borrower or Guarantor and there are no proxies,
irrevocable or otherwise, with respect to such shares and no equity securities
of any of the Subsidiaries are or may become required to be issued by reason of
any options, warrants, rights to subscribe to, calls or commitments of any kind
or nature and there are no contracts, commitments, understandings or
arrangements by which any Subsidiary is or may become bound to issue additional
shares of it Capital Stock or securities convertible into or exchangeable for
such shares, other than those provided by statute.
(c) As of the date hereof, the issued and outstanding shares of Capital
Stock of each Borrower and Guarantor are directly and beneficially owned and
held by the persons indicated in the Information Certificate, and in each case
all of such shares have been duly authorized and are fully paid and
non-assessable and are, except with respect to Administrative Borrower, free and
clear of all claims, liens, pledges and encumbrances of any kind, except those
in favor of Agent and nonconsensual statutory liens permitted under Section 9.8.
(d) Each Borrower is Solvent and will continue to be Solvent after the
creation of the Obligations, the security interests of Agent and the other
transaction contemplated hereunder.
8.13 Labor Disputes.
(a) As of the date hereof, set forth on Schedule 8.13 to the Information
Certificate is a list (including dates of termination) of all collective
bargaining or similar agreements between or applicable to each Borrower and
Guarantor and any union, labor organization or other bargaining agent in respect
of the employees of any Borrower or Guarantor on the date hereof.
(b) There is (i) no unfair labor practice complaint pending against any
Borrower or Guarantor or, to any Borrower's or Guarantor's actual knowledge,
threatened against it, before the National Labor Relations Board, and no
grievance or arbitration proceeding arising out of or under any collective
bargaining agreement is pending on the date hereof against any Borrower or
Guarantor or, to any Borrower's or Guarantor's actual knowledge, threatened
against it, and (ii) no strike, labor dispute, slowdown or stoppage is pending
against any Borrower or Guarantor or, to any Borrower's or Guarantor's actual
knowledge, threatened against any Borrower or Guarantor, in each case which
could, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
8.14 Restrictions on Subsidiaries. Except for restrictions contained in
this Agreement or any other agreement with respect to Indebtedness of any
Borrower or Guarantor permitted hereunder, there are no contractual or
consensual restrictions on any Borrower or Guarantor or any of its Subsidiaries
which prohibit or otherwise restrict (a) the transfer of cash or other assets
(i) between any Borrower or Guarantor and any of its or their Subsidiaries or
(ii) between any Subsidiaries of any Borrower or Guarantor or (b) the ability of
any Borrower or Guarantor or any of its or their Subsidiaries to incur
Indebtedness or grant security interests to Agent or any Lender in the
Collateral.
8.15 Material Contracts. Schedule 8.15 to the Information Certificate sets
forth all Material Contracts to which any Borrower or Guarantor is a party or is
bound as of the date hereof. Borrowers and Guarantors have delivered true,
correct and complete copies of such Material Contracts to Agent on or before the
date hereof. Borrowers and Guarantors are not in breach or in default in any
respect of or under any Material Contract and have not received any notice of
the intention of any other party thereto to terminate any Material Contract, in
each case which could, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
8.16 Payable Practices. Each Borrower and Guarantor have not made any material
change in the historical accounts payable practices from those in effect
immediately prior to the date hereof.
8.17 Plan of Reorganization. Borrowers have delivered to Agent a true and
correct copy of the Plan of Reorganization and the Plan of Reorganization
delivered has not otherwise been amended or modified in any manner adverse to
Agent and the Lenders. The Plan of Reorganization has been confirmed pursuant to
the Confirmation Order, Borrowers have delivered to Agent a true and correct
certified copy of the Confirmation Order, the Confirmation Order has not been
amended or modified in any manner adverse to Agent and the Lenders, the
Confirmation Order shall be a Final Order (as defined in the Plan of
Reorganization) and the "Effective Date" (as defined in the Plan of
Reorganization) shall contemporaneously occur on the date hereof.
8.18 Senior Indebtedness. The Obligations constitute "Senior Indebtedness"
(as defined in the Indenture) and "Senior Debt" (as defined in the Peoria
Intercreditor Agreement).
8.19 Accuracy and Completeness of Information. All information furnished by
or on behalf of any Borrower or Guarantor in writing to Agent or any Lender in
connection with this Agreement or any of the other Financing Agreements or any
transaction contemplated hereby or thereby, including all information on the
Information Certificate (but excluding any projections) is true and correct in
all material respects on the date as of which such information is dated or
certified and does not omit any material fact necessary in order to make such
information not materially misleading. No event or circumstance has occurred
which has had or could reasonably be expected to have a Material Adverse Affect,
which has not been fully and accurately disclosed to Agent in writing prior to
the date hereof.
8.20 Survival of Warranties; Cumulative. All representations and warranties
contained in this Agreement or any of the other Financing Agreements shall
survive the execution and delivery of this Agreement and shall be deemed to have
been made again to Agent and Lenders on the date of each additional borrowing or
other credit accommodation hereunder and shall be conclusively presumed to have
been relied on by Agent and Lenders regardless of any investigation made or
information possessed by Agent or any Lender. The representations and warranties
set forth herein shall be cumulative and in addition to any other
representations or warranties which any Borrower or Guarantor shall now or
hereafter give, or cause to be given, to Agent or any Lender.
SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS
9.1 Maintenance of Existence.
(a) Each Borrower and Guarantor shall at all times preserve, renew and keep
in full force and effect its corporate existence and rights and franchises
material to its business and maintain in full force and effect all material
licenses, trademarks, tradenames, approvals, authorizations, leases, contracts
and Permits necessary to carry on the business as presently or proposed to be
conducted, except as permitted in Section 9.7 hereto.
(b) No Borrower or Guarantor shall change its name unless each of the
following conditions is satisfied: (i) Agent shall have received not less than
fifteen (15) days prior written notice from Administrative Borrower of such
proposed change in its corporate name, which notice shall accurately set forth
the new name; and (ii) Agent shall have received a copy of the amendment to the
Certificate of Incorporation of such Borrower or Guarantor providing for the
name change certified by the Secretary of State of the jurisdiction of
incorporation or organization of such Borrower or Guarantor as soon as it is
available.
(c) No Borrower or Guarantor shall change its chief executive office or its
mailing address or organizational identification number (or if it does not have
one, shall not acquire one) unless Agent shall have received not less than
fifteen (15) days' prior written notice from Administrative Borrower of such
proposed change, which notice shall set forth such information with respect
thereto as Agent may reasonably require and Agent shall have received such
agreements as Agent may reasonably require in connection therewith. No Borrower
or Guarantor shall change its type of organization or jurisdiction of
organization. 9.2 New Collateral Locations. Each Borrower and Guarantor may only
open any new location within the continental United States provided such
Borrower or Guarantor (a) gives Agent thirty (30) days prior written notice of
the intended opening of any such new location and (b) executes and delivers, or
causes to be executed and delivered, to Agent such agreements, documents, and
instruments as Agent may deem reasonably necessary or desirable to protect its
interests in the Collateral at such location to the extent the value of
Collateral at such location is in excess of $250,000 individually or in the
aggregate for all such locations.
9.3 Compliance with Laws, Regulations, Etc.
(a) Each Borrower and Guarantor shall, and shall cause any Subsidiary to,
at all times, comply with all laws, rules, regulations, licenses, approvals,
orders and other Permits applicable to it and duly observe all requirements of
any foreign, Federal, State or local Governmental Authority, except in each case
where non-compliance could not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect.
(b) Borrowers and Guarantors shall give written notice to Agent immediately
upon any Borrower's or Guarantor's receipt of any notice of, or any Borrower's
or Guarantor's otherwise obtaining knowledge of, (i) the occurrence of any event
involving the release, spill or discharge, threatened or actual, of any
Hazardous Material or (ii) any investigation, proceeding, complaint, order,
directive, claims, citation or notice with respect to: (A) any non-compliance
with or violation of any Environmental Law by any Borrower or Guarantor or (B)
the release, spill or discharge, threatened or actual, of any Hazardous Material
other than in the ordinary course of business and other than as permitted under
any applicable Environmental Law, in each under clauses (i) and (ii) that could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Copies of all material environmental surveys, audits,
assessments, feasibility studies and results of remedial investigations shall be
promptly furnished, or caused to be furnished, by such Borrower or Guarantor to
Agent. Each Borrower and Guarantor shall take prompt action to respond to any
material non-compliance with any of the Environmental Laws and shall regularly
report to Agent on such response.
(c) Without limiting the generality of the foregoing, whenever Agent
reasonably determines that there is non-compliance, or any condition which
requires any action by or on behalf of any Borrower or Guarantor in order to
avoid any non compliance, with any Environmental Law in each case that would
reasonably be expected to result, individually or in the aggregate, in a
Material Adverse Effect, Borrowers shall, at Agent's request and Borrowers'
expense: (i) cause an independent environmental engineer reasonably acceptable
to Agent to conduct such tests of the site where non-compliance with such
Environmental Laws has occurred as to such non-compliance and prepare and
deliver to Agent a report as to such non-compliance setting forth the results of
such tests, a proposed plan for responding to any environmental problems
described therein, and an estimate of the costs thereof and (ii) provide to
Agent a supplemental report of such engineer whenever the scope of such
non-compliance, or such Borrower's or Guarantor's response thereto or the
estimated costs thereof, shall change in any material respect.
(d) Each Borrower and Guarantor shall indemnify and hold harmless Agent and
Lenders and their respective directors, officers, employees, agents, invitees,
representatives, successors and assigns, from and against any and all actual
losses, claims, damages, liabilities, costs, and expenses (including reasonable
attorneys' fees and expenses) directly or indirectly arising out of or
attributable to the use, generation, manufacture, reproduction, storage,
release, threatened release, spill, discharge, disposal or presence of a
Hazardous Material, including the costs of any required or necessary repair,
cleanup or other remedial work with respect to any property of any Borrower or
Guarantor and the preparation and implementation of any closure, remedial or
other required plans. All representations, warranties, covenants and
indemnifications in this Section 9.3 shall survive the payment of the
Obligations and the termination of this Agreement.
9.4 Payment of Taxes and Claims. Each Borrower and Guarantor shall, and
shall cause any Subsidiary to, duly pay and discharge all material taxes,
assessments, contributions and governmental charges upon or against it or its
properties or assets, except for taxes the validity of which are being contested
in good faith by appropriate proceedings diligently pursued and available to
such Borrower, Guarantor or Subsidiary, as the case may be, and with respect to
which adequate reserves have been set aside on its books to the extent required
by GAAP.
9.5 Insurance. Each Borrower and Guarantor shall, and shall cause any
Subsidiary to, at all times, maintain with financially sound and reputable
insurers insurance with respect to the Collateral against loss or damage and all
other insurance of the kinds and in the amounts customarily insured against or
carried by corporations of established reputation engaged in the same or similar
businesses and similarly situated. Said policies of insurance shall be
reasonably satisfactory to Agent as to form, amount and insurer. Borrowers and
Guarantors shall furnish certificates, policies or endorsements to Agent as
Agent shall reasonably require as proof of such insurance, and, if any Borrower
or Guarantor fails to do so, Agent is authorized, but not required, to obtain
such insurance at the expense of Borrowers. Such Borrower or Guarantor may
subsequently cancel any insurance purchased by Agent after providing Agent with
satisfactory evidence that such Borrower or Guarantor has obtained insurance as
required by this Section 9.5. All policies shall provide for at least thirty
(30) days prior written notice to Agent of any cancellation or reduction of
coverage. Borrowers and Guarantors shall cause Agent to be named as a loss payee
and an additional insured (but without any liability for any premiums) under
such insurance policies and Borrowers and Guarantors shall obtain
non-contributory lender's loss payable endorsements to all insurance policies in
form and substance reasonably satisfactory to Agent. Such lender's loss payable
endorsements shall specify that the proceeds of such insurance shall be payable
to Agent as its interests may appear and further specify that Agent and Lenders
shall be paid regardless of any act or omission by any Borrower, Guarantor or
any of its or their Affiliates. Without limiting any other rights of Agent or
Lenders, any insurance proceeds received by Agent at any time may be applied to
payment of the Obligations, whether or not then due, in any order and in such
manner as Agent may determine. Upon application of such proceeds to the
Revolving Loans, Revolving Loans may be available subject and pursuant to the
terms hereof to be used for the costs of repair or replacement of the Collateral
lost or damages resulting in the payment of such insurance proceeds.
9.6 Financial Statements and Other Information.
(a) Each Borrower and Guarantor shall, and shall cause any Subsidiary to,
keep proper books and records in which true and complete entries in all material
respects shall be made of all dealings or transactions of or in relation to the
Collateral and the business of such Borrower, Guarantor and its Subsidiaries in
accordance with GAAP. Borrowers and Guarantors shall promptly furnish to Agent
and Lenders all such financial and other information as Agent shall reasonably
request relating to the Collateral and the assets, business and operations of
Borrowers and Guarantors, and Borrower shall notify the auditors and accountants
of Borrowers and Guarantors that Agent is authorized to obtain such information
directly from them. Without limiting the foregoing, Borrowers shall furnish or
cause to be furnished to Agent, the following:
(i) within thirty (30) days after the end of each fiscal month, monthly
unaudited consolidated financial statements (including in each case balance
sheets, statements of income and loss, statements of cash flow, and statements
of shareholders' equity), all in reasonable detail, fairly presenting in all
material respects the financial position and the results of the operations of
Administrative Borrower and its Subsidiaries as of the end of and through such
fiscal month, certified to be correct by the chief financial officer of
Administrative Borrower, subject to normal year-end adjustments and accompanied
by a compliance certificate substantially in the form of Exhibit C hereto, along
with a schedule in a form reasonably satisfactory to Agent of the calculations
used in determining, as of the end of such month, whether Borrowers and
Guarantors were in compliance with the covenants set forth in Sections 9.17
(which, for purposes of Section 9.17 shall be determined on a quarterly basis)
and 9.18 of this Agreement for such month, and
(ii) within one hundred ten (110) days after the end of each fiscal year,
audited consolidated financial statements of Administrative Borrower and its
Subsidiaries (including in each case balance sheets, statements of income and
loss, statements of cash flow, and statements of shareholders' equity), and the
accompanying notes thereto, all in reasonable detail, fairly presenting in all
material respects the financial position and the results of the operations of
Administrative Borrower and its Subsidiaries as of the end of and for such
fiscal year, together with the unqualified opinion (as to scope or going
concern) of independent certified public accountants with respect to the audited
consolidated financial statements, which accountants shall be an independent
accounting firm selected by Administrative Borrower and reasonably acceptable to
Agent, that such audited consolidated financial statements have been prepared in
accordance with GAAP, and present fairly in all material respects the results of
operations and financial condition of Administrative Borrower and its
Subsidiaries as of the end of and for the fiscal year then ended, and
(iii) at such time as available, but in no event later than thirty (30)
days after the end of each fiscal year (commencing with the fiscal year of
Borrowers ending December 31, 2005), projected consolidated financial statements
(including in each case, forecasted balance sheets and statements of income and
loss, statements of cash flow, and statements of shareholders' equity) of
Administrative Borrower and its Subsidiaries for such fiscal year, all in
reasonable detail, and in a format consistent with the projections delivered by
Borrowers to Agent prior to the date hereof, together with such supporting
information as Agent may reasonably request. Such projected financial statements
shall be prepared on a monthly basis for such year. Such projections shall be
based upon estimates and assumptions made in good faith and believed by the
Administrative Borrower to be reasonable when made in light of the then current
conditions and facts (it being understood that actual results may differ from
those set forth in such projected financial statements). Each year Borrowers
shall provide to Agent a semi-annual update with respect to such projections or
at any time an Event of Default has occurred and is continuing, more frequently
as Agent may require.
(b) Borrowers and Guarantors shall promptly notify Agent in writing of the
details of (i) any loss, damage, investigation, action, suit, proceeding or
claim relating to Collateral having a value of more than $500,000 or which could
reasonably be expected to have a Material Adverse Effect, (ii) any Material
Contract being terminated which could reasonably be expected to have a Material
Adverse Effect, (iii) any order, judgment or decree in excess of $500,000 shall
have been entered against any Borrower or Guarantor any of its or their
properties or assets, (iv) any notification of a material violation of laws or
regulations received by any Borrower or Guarantor, (v) any ERISA Event, and (vi)
the occurrence of any Default or Event of Default.
(c) Promptly after the sending or filing thereof, Borrowers shall send to
Agent copies of (i) all reports which Administrative Borrower or any of its
Subsidiaries sends to its security holders generally, (ii) all reports and
registration statements which Administrative Borrower or any of its Subsidiaries
files with the Securities Exchange Commission, any national or foreign
securities exchange or the National Association of Securities Dealers, Inc., and
such other reports as Agent may hereafter specifically identify to
Administrative Borrower that Agent will reasonably require be provided to Agent,
(iii) all press releases and (iv) all other statements concerning material
changes or developments in the business of a Borrower or Guarantor made
available by any Borrower or Guarantor to the public.
(d) Borrowers and Guarantors shall furnish or cause to be furnished to
Agent such budgets, forecasts, projections and other information respecting the
Collateral and the business of Borrowers and Guarantors, as Agent may, from time
to time, reasonably request. Agent is hereby authorized to deliver a copy of any
financial statement or any other information relating to the business of
Borrowers and Guarantors to any court or other Governmental Authority or,
subject to the confidentiality provisions herein, to any Lender or Participant
or prospective Lender or Participant or any Affiliate of any Lender or
Participant. Each Borrower and Guarantor hereby irrevocably authorizes and
directs all accountants or auditors to deliver to Agent, at Borrowers' expense,
copies of the financial statements of any Borrower and Guarantor and any reports
or management letters prepared by such accountants or auditors on behalf of any
Borrower or Guarantor and to disclose to Agent and Lenders such information as
they may have regarding the business of any Borrower and Guarantor. Any
documents, schedules, invoices or other papers delivered to Agent or any Lender
may be destroyed or otherwise disposed of by Agent or such Lender one (1) year
after the same are delivered to Agent or such Lender, except as otherwise
designated by Administrative Borrower to Agent or such Lender in writing.
9.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc. Each Borrower
and Guarantor shall not, and shall not permit any Subsidiary to, directly or
indirectly,
(a) merge into or with or consolidate with any other Person or permit any
other Person to merge into or with or consolidate with it except that any
wholly-owned Subsidiary of Administrative Borrower may merge with and into or
consolidate with Administrative Borrower or any other wholly-owned Subsidiary of
Administrative Borrower, provided, that, each of the following conditions is
satisfied as determined by Agent in good faith: (i) Agent shall have received
not less than twenty (20) Business Days' prior written notice of the intention
of such Subsidiaries to so merge or consolidate, which notice shall set forth in
reasonable detail satisfactory to Agent, the persons that are merging or
consolidating, which person will be the surviving entity, the locations of the
assets of the persons that are merging or consolidating, and the material
agreements and documents relating to such merger or consolidation, (ii) Agent
shall have received such other information with respect to such merger or
consolidation as Agent may reasonably request, (iii) as of the effective date of
the merger or consolidation and after giving effect thereto, no Default or Event
of Default shall exist or have occurred, (iv) Agent shall have received, true,
correct and complete copies of all agreements, documents and instruments
relating to such merger or consolidation, including, but not limited to, the
certificate or certificates of merger to be filed with each appropriate
Secretary of State (with a copy as filed promptly after such filing), (v) as of
the effective date of the merger or consolidation, (A) the surviving corporation
shall expressly confirm, ratify and assume the Obligations and the Financing
Agreements to which it is a party in writing, in form and substance satisfactory
to Agent, and (B) Borrowers and Guarantors shall have executed and delivered
such other agreements, documents and instruments as Agent may request in
connection therewith;
(b) sell, issue, assign, lease, license, transfer, abandon or otherwise
dispose of any Capital Stock or Indebtedness to any other Person or any of its
assets to any other Person, except for
(i) sales or other dispositions of Inventory in the ordinary course of
business,
(ii) the sale or other disposition of Equipment (including surplus,
worn-out or obsolete Equipment or Equipment no longer used or useful in the
business of any Borrower or Guarantor) so long as (A) such sales or other
dispositions do not involve Equipment having an aggregate fair market value in
excess of $250,000 for all such Equipment disposed of in any fiscal year of
Administrative Borrower or as Agent may otherwise agree, (B) no Event of Default
has occurred and is continuing at the time of, or would result after giving
effect to, any such sale or disposition, (C) Borrowers receive net cash
consideration for such sale or disposition at least equal to the amount of Term
Loans advanced against such Equipment (to the extent Term Loans were advanced
against such Equipment) and (D) all net proceeds are promptly transferred to
Agent to be applied against the remaining Term Loans of such Borrower in inverse
order of maturity, or, if such Term Loans have been repaid in full, to the
remaining Obligations as Agent shall determine, and
(iii) the issuance and sale by Administrative Borrower of Capital Stock of
such Borrower after the date hereof; provided, that, (A) Agent shall have
received not less than five (5) Business Days' prior written notice of such
issuance and sale by such Borrower, which notice shall specify the parties to
whom such shares are to be sold, the terms of such sale, the total amount which
it is anticipated will be realized from the issuance and sale of such stock and
the net cash proceeds which it is anticipated will be received by such Borrower
from such sale, (B) such Borrower shall not be required to pay any cash
dividends or repurchase or redeem such Capital Stock or make any other payments
in respect thereof, except as otherwise permitted in Section 9.11 hereof, (C)
the terms of such Capital Stock, and the terms and conditions of the purchase
and sale thereof, shall not include any terms that include any limitation on the
right of such Borrower to request or receive Loans or Letters of Credit or the
right of such Borrower to amend or modify any of the terms and conditions of
this Agreement or any of the other Financing Agreements or otherwise in any way
relate to or affect the arrangements of Borrowers and Guarantors with Agent and
Lenders or are more restrictive or burdensome to any such Borrower or Guarantor
than the terms of any Capital Stock in effect on the date hereof, (D) except as
Agent may otherwise agree in writing, all of the proceeds of the sale and
issuance of such Capital Stock shall be paid to Agent for application to the
Obligations in such order and manner as Agent may determine or at Agent's option
(once all Loans are paid in full and only Letter of Credit Obligations remain
outstanding), to be held as cash collateral for the Obligations and (E) as of
the date of such issuance and sale and after giving effect thereto, no Default
or Event of Default shall exist or have occurred,
(iv) the issuance of Capital Stock of Administrative Borrower consisting of
common stock pursuant to an employee stock option or grant or similar equity
plan or 401(k) plans of such Borrower for the benefit of its employees,
directors and consultants, provided, that, in no event shall such Borrower be
required to issue, or shall such Borrower issue, Capital Stock pursuant to such
stock plans or 401(k) plans which would result in a Change of Control or other
Event of Default,
(v) the issuance of Capital Stock of Administrative Borrower for (a)
transfers and replacements of then outstanding shares of Capital Stock and (b)
stock splits and stock dividends,
(vi) the licensing or sublicensing by the Administrative Borrower and its
Subsidiaries, on a non-exclusive basis, of patents, trademarks, copyrights, and
other intellectual property rights in the ordinary course of business,
(vii) the sale or discount by any Borrower, Guarantor or Subsidiary of
overdue Accounts receivable arising in the ordinary course of business provided,
that (A) such Accounts are not included in the calculation of the most recent
Borrowing Base, (B) all net proceeds shall be paid to Agent for application to
the Obligations in such order and manner as Agent may determine, (C) no Event of
Default has occurred and is continuing at the time of any such sale or discount
and (D) the face amount of such Account to be sold or discounted does not exceed
$250,000 individually or in the aggregate for all such Accounts,
(viii) the use or transfer of money or Cash Equivalents by the
Administrative Borrower and its Subsidiaries in a manner that is not prohibited
by the terms of this Agreement or the other Financing Agreements,
(ix) the issuance by Borrowers of Capital Stock in accordance with the Plan
of Reorganization so long as all such Capital Stock (except with respect to
Administrative Borrower) is pledged to Agent to secure the Obligations,
(x) investments permitted pursuant to Section 9.10,
(xi) the lease by F V Steel of its real property pursuant to the terms of
that certain Real Estate Lease dated January 1, 2001 between F V Steel and Fox
Valley Steel and Wire Company,
(c) wind up, liquidate or dissolve except that any Guarantor may wind up,
liquidate and dissolve, provided, that, each of the following conditions is
satisfied, (i) the winding up, liquidation and dissolution of such Guarantor
shall not violate any law or any order or decree of any court or other
Governmental Authority in any material respect and shall not conflict with or
result in the breach of, or constitute a default under, any indenture, mortgage,
deed of trust, or any other agreement or instrument to which any Borrower or
Guarantor is a party or may be bound, (ii) such winding up, liquidation or
dissolution shall be done in accordance with the requirements of all applicable
laws and regulations, (iii) effective upon such winding up, liquidation or
dissolution, all of the assets and properties of such Guarantor shall be duly
and validly transferred and assigned to a Borrower, free and clear of any liens,
restrictions or encumbrances other than the security interest and liens of Agent
(and Agent shall have received such evidence thereof as Agent may reasonably
require) and other liens permitted under this Agreement and Agent shall have
received such deeds, assignments or other agreements as Agent may reasonably
request to evidence and confirm the transfer of such assets to of such Guarantor
to a Borrower, (iv) Agent shall have received all documents and agreements that
any Borrower or Guarantor has filed with any Governmental Authority or as are
otherwise required to effectuate such winding up, liquidation or dissolution,
(v) no Borrower or Guarantor shall assume any Indebtedness, obligations or
liabilities as a result of such winding up, liquidation or dissolution, or
otherwise become liable in respect of any obligations or liabilities of the
entity that is winding up, liquidating or dissolving, unless such Indebtedness
is otherwise expressly permitted hereunder, (vi) Agent shall have received not
less than ten (10) Business Days prior written notice of the intention of such
Guarantor to wind up, liquidate or dissolve, and (vii) as of the date of such
winding up, liquidation or dissolution and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing.
9.8 Encumbrances. Each Borrower and Guarantor shall not, and shall not
permit any Subsidiary to, create, incur, assume or suffer to exist any security
interest, mortgage, pledge, lien, charge or other encumbrance of any nature
whatsoever on any of its assets or properties, including the Collateral, or file
or permit the filing of, or permit to remain in effect, any financing statement
or other similar notice of any security interest or lien with respect to any
such assets or properties, except:
(a) the security interests and liens of Agent for itself and the benefit of
Lenders and the security interests and liens of Agent for the benefit of itself,
any Lender, any Affiliate of any Lender or any other financial institution
acceptable to Agent (and in each case as to any such Lender, Affiliate or other
financial institution only to the extent approved by Agent) that is party to a
Hedge Agreement to the extent provided for herein and subject to the terms
hereof;
(b) liens securing the payment of taxes, assessments or other governmental
charges or levies either not yet overdue or the validity of which are being
contested in good faith by appropriate proceedings diligently pursued and
available to such Borrower, or Guarantor or Subsidiary, as the case may be and
with respect to which adequate reserves have been set aside on its books;
(c) non-consensual statutory liens (other than liens securing the payment
of taxes) arising in the ordinary course of such Borrower's, Guarantor's or
Subsidiary's business to the extent: (i) such liens secure Indebtedness which is
not overdue or (ii) such liens secure Indebtedness relating to claims or
liabilities which are fully insured and being defended at the sole cost and
expense and at the sole risk of the insurer or being contested in good faith by
appropriate proceedings diligently pursued and available to such Borrower,
Guarantor or such Subsidiary, in each case prior to the commencement of
foreclosure or other similar proceedings and with respect to which adequate
reserves have been set aside on its books;
(d) zoning, building and land use restrictions, easements, rights-of-way
licenses, covenants, reservations, conditions, title exceptions and other
restrictions affecting the use of Real Property which, individually or in the
aggregate, do not interfere in any material respect with the use of such Real
Property or ordinary conduct of the business of such Borrower, Guarantor or such
Subsidiary as presently conducted thereon or materially impair the value of the
Real Property which may be subject thereto;
(e) purchase money security interests in Equipment (including Capital
Leases) and purchase money mortgages on Real Property to secure Indebtedness
permitted under Section 9.9(b) hereof;
(f) pledges and deposits of cash by any Borrower or Guarantor after the
date hereof in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security benefits
consistent with the current practices of such Borrower or Guarantor as of the
date hereof;
(g) pledges and deposits of cash by any Borrower or Guarantor after the
date hereof to secure the performance of tenders, bids, leases, trade contracts
(other than for the repayment of Indebtedness), statutory obligations and other
similar obligations in each case in the ordinary course of business consistent
with the current practices of such Borrower or Guarantor as of the date hereof;
provided, that, in connection with any performance bonds issued by a surety or
other person, the issuer of such bond shall have waived in writing any rights in
or to, or other interest in, any of the Collateral in an agreement, in form and
substance satisfactory to Agent;
(h) liens arising from (i) operating leases and the precautionary UCC
financing statement filings in respect thereof and (ii) equipment or other
materials which are not owned by any Borrower or Guarantor located on the
premises of such Borrower or Guarantor from time to time in the ordinary course
of business and consistent with current practices of such Borrower or Guarantor
and the precautionary UCC financing statement filings in respect thereof;
(i) judgments and other similar liens arising in connection with court
proceedings that do not constitute an Event of Default, provided, that, (i) such
liens are being contested in good faith and by appropriate proceedings
diligently pursued, (ii) adequate reserves or other appropriate provision, if
any, as are required by GAAP have been made therefor, (iii) a stay of
enforcement of any such liens is in effect and (iv) Agent may establish a
Reserve with respect thereto;
(j) the security interests and liens set forth on Schedule 8.4 to the
Information Certificate and renewals and extensions thereof so long as such
renewals and extensions relate solely to the same asset originally encumbered;
(k) liens encumbering customary initial deposits and margin deposits, and
similar liens and margin deposits, and similar liens attaching to commodity
trading accounts or other brokerage accounts incurred in the ordinary course of
business;
(l) non-exclusive licenses or sublicenses, granted to third parties in the
ordinary course of business not interfering with the business of the
Administrative Borrower or any of its Subsidiaries;
(m) rights of setoff or bankers' liens upon deposits of cash in favor of
banks or other depository institutions and liens associated with overdraft
protection and netting services;
(n) liens in favor of customs and revenues authorities which secure payment
of customs duties in connection with the importation of goods;
(o) liens deemed to exist in connection with permitted repurchase
obligations or set-off rights;
(p) liens in favor of collecting banks arising under Section 4-210 of the
UCC;
(q) carriers', warehousemen's, suppliers' or other similar possessory liens
arising in the ordinary course of business and which have not arisen to secure
Indebtedness for borrowed money; provided that (i) such liens do not in the
aggregate materially detract from the value of such property or assets or
materially impair the use thereof in the operation of businesses of Borrowers
and Guarantors and (ii) such liens do not encumber assets comprising the
Borrowing Base or any real property or Equipment on which the Term Loans were
advanced unless either (A) Agent has received a satisfactory Collateral Access
Agreement under which such liens are waived or subordinated or (B) Agent has
elected to implement a Reserve;
(r) deposits securing, or in lieu of, surety, appeal or customs bonds in
proceedings to which any Borrower, Guarantor or Subsidiary is a party; and
(s) other non-consensual liens not specifically listed above securing
Indebtedness not to exceed $100,000 outstanding at any one time in the
aggregate.
9.9 Indebtedness. Each Borrower and Guarantor shall not, and shall not
permit any Subsidiary to, incur, create, assume, become or be liable in any
manner with respect to, or permit to exist, any Indebtedness, or guarantee,
assume, endorse, or otherwise become responsible for (directly or indirectly),
the Indebtedness, performance, obligations or dividends of any other Person,
except:
(a) the Obligations;
(b) purchase money Indebtedness (including Capital Leases) arising after
the date hereof to the extent secured by purchase money security interests in
Equipment (including Capital Leases) and purchase money mortgages on Real
Property not to exceed $750,000 in the aggregate at any time outstanding so long
as such security interests and mortgages do not apply to any property of such
Borrower, Guarantor or Subsidiary other than the Equipment or Real Property so
acquired, and the Indebtedness secured thereby does not exceed the cost of the
Equipment or Real Property so acquired, as the case may be;
(c) guarantees by any Borrower or Guarantor of the Obligations of the other
Borrowers or Guarantors in favor of Agent for the benefit of Lenders;
(d) the Indebtedness permitted under Section 9.10(g) hereof;
(e) unsecured Indebtedness of any Borrower or Guarantor arising after the
date hereof to any third person (but not to any other Borrower or Guarantor),
provided, that, each of the following conditions is satisfied as determined by
Agent: (i) such Indebtedness shall be on terms and conditions acceptable to
Agent and shall be subject and subordinate in right of payment to the right of
Agent and Lenders to receive the prior payment and satisfaction in full payment
of all of the Obligations pursuant to the terms of an intercreditor agreement
between Agent and such third party, in form and substance satisfactory to Agent,
(ii) Agent shall have received not less than ten (10) days prior written notice
of the intention of such Borrower or Guarantor to incur such Indebtedness, which
notice shall set forth in reasonable detail satisfactory to Agent the amount of
such Indebtedness, the person or persons to whom such Indebtedness will be owed,
the interest rate, the schedule of repayments and maturity date with respect
thereto and such other information as Agent may request with respect thereto,
(iii) Agent shall have received true, correct and complete copies of all
agreements, documents and instruments evidencing or otherwise related to such
Indebtedness, (iv) except as Agent may otherwise agree in writing, all of the
proceeds of the loans or other accommodations giving rise to such Indebtedness
shall be paid to Agent for application to the Obligations in such order and
manner as Agent may determine or at Agent's option, to be held as cash
collateral for the Obligations, (v) in no event shall the aggregate principal
amount of such Indebtedness incurred during the term of this Agreement exceed
$1,000,000, (vi) as of the date of incurring such Indebtedness and after giving
effect thereto, no Default or Event of Default shall exist or have occurred,
(vii) such Borrower and Guarantor shall not, directly or indirectly, (A) amend,
modify, alter or change the terms of such Indebtedness or any agreement,
document or instrument related thereto, except, that, such Borrower or Guarantor
may, after prior written notice to Agent, amend, modify, alter or change the
terms thereof so as to extend the maturity thereof, or defer the timing of any
payments in respect thereof, or to forgive or cancel any portion of such
Indebtedness (other than pursuant to payments thereof), or to reduce the
interest rate or any fees in connection therewith, or (B) redeem, retire,
defease, purchase or otherwise acquire such Indebtedness (except pursuant to
regularly scheduled payments permitted herein), or set aside or otherwise
deposit or invest any sums for such purpose, and (viii) Borrowers and Guarantors
shall furnish to Agent all notices or demands in connection with such
Indebtedness either received by any Borrower or Guarantor or on its behalf
promptly after the receipt thereof, or sent by any Borrower or Guarantor or on
its behalf concurrently with the sending thereof, as the case may be;
(f) the Indebtedness set forth on Schedule 9.9 to the Information
Certificate; provided, that, (i) Borrowers and Guarantors may only make
regularly scheduled payments of principal and interest in respect of such
Indebtedness in accordance with the terms of the agreement or instrument
evidencing or giving rise to such Indebtedness as in effect on the date hereof;
provided, that no payments may be made in respect of the Peoria Debt, the
Indebtedness under the Indenture or the Trustee Debt unless expressly permitted
by the Peoria Intercreditor Agreement, the Indenture and the Trustee
Intercreditor Agreement, respectively (ii) Borrowers and Guarantors shall not,
directly or indirectly, (A) amend, modify, alter or change the terms of such
Indebtedness or any agreement, document or instrument related thereto as in
effect on the date hereof except, that, Borrowers and Guarantors may, after
prior written notice to Agent, amend, modify, alter or change the terms thereof
so as to extend the maturity thereof, or defer the timing of any payments in
respect thereof, or to forgive or cancel any portion of such Indebtedness (other
than pursuant to payments thereof), or to reduce the interest rate or any fees
in connection therewith, or (B) redeem, retire, defease, purchase or otherwise
acquire such Indebtedness, or set aside or otherwise deposit or invest any sums
for such purpose, and (iii) Borrowers and Guarantors shall furnish to Agent all
notices or demands in connection with such Indebtedness either received by any
Borrower or Guarantor or on its behalf, promptly after the receipt thereof, or
sent by any Borrower or Guarantor or on its behalf, concurrently with the
sending thereof, as the case may be;
(g) Indebtedness of any Borrower entered into in the ordinary course of
business pursuant to a Hedge Agreement; provided, that, (i) such arrangements
are either with Agent, any Lender, or any Affiliate of any Lender or other
financial institutions acceptable to Agent (and in each case as to any such
Lender, Affiliate or other financial institution only to the extent approved by
Agent), (ii) such arrangements are not for speculative purposes, and (iii) such
Indebtedness shall be unsecured, except to the extent such Indebtedness
constitutes part of the Obligations arising under or pursuant to Hedge
Agreements with Agent, any Lender, any Affiliate of any Lender or another
financial institution that are secured under the terms hereof;
(h) other unsecured Indebtedness incurred after the date hereof and not
otherwise permitted hereunder in an aggregate principal amount not exceeding
$1,000,000 at any one time outstanding; provided, that, at the time of and after
giving effect to such incurrence of Indebtedness no Event of Default shall
exist; and
(i) extensions, renewals or refinancings of any Indebtedness permitted
under Schedule 9.9 so long as (i) such Indebtedness ("Refinancing Indebtedness")
is in an original aggregate principal amount not greater than the aggregate
principal amount of the Indebtedness being extended, renewed or refinanced, (ii)
if the Indebtedness being extended, renewed or refinanced is subordinated to any
of the Obligations, such Refinancing Indebtedness is subordinated to the
Obligations on terms not less favorable to the Lenders than the terms of the
subordination provisions governing such Indebtedness being extended, renewed or
refinanced, (iii) at the time of and after giving effect to such renewal or
refinancing, no Event of Default shall have occurred and be continuing and (iv)
the other terms and conditions of such Refinancing Indebtedness (including
amortization, interest rates and fees) are no less favorable to the applicable
Borrower or Guarantor than the Indebtedness being extended, renewed or
refinanced.
9.10 Loans, Investments, Etc. Each Borrower and Guarantor shall not, and
shall not permit any Subsidiary to, directly or indirectly, make any loans or
advance money or property to any person, or invest in (by capital contribution,
dividend or otherwise) or purchase or repurchase the Capital Stock or
Indebtedness or all or a substantial part of the assets or property of any
person, or form or acquire any Subsidiaries, or agree to do any of the
foregoing, except:
(a) the endorsement of instruments for collection or deposit in the
ordinary course of business;
(b) investments in cash or Cash Equivalents, provided, that, (i) no Loans
are then outstanding and (ii) the terms and conditions of Section 5.2 hereof
shall have been satisfied with respect to the deposit account, investment
account or other account in which such cash or Cash Equivalents are held;
(c) the existing equity investments of each Borrower and Guarantor as of
the date hereof in its Subsidiaries and other equity investments made pursuant
to the Plan of Reorganization, provided, that, no Borrower or Guarantor shall
have any further obligations or liabilities to make any capital contributions or
other additional investments or other payments to or in or for the benefit of
any of such Subsidiaries;
(d) loans and advances by any Borrower or Guarantor to employees of such
Borrower or Guarantor for: (i) reasonably and necessary work-related travel or
other ordinary business expenses to be incurred by such employee in connection
with their work for such Borrower or Guarantor and (ii) reasonable and necessary
relocation expenses of such employees (including home mortgage financing for
relocated employees);
(e) stock or obligations issued to any Borrower or Guarantor by any Person
(or the representative of such Person) in respect of Indebtedness of such Person
owing to such Borrower or Guarantor in connection with the insolvency,
bankruptcy, receivership or reorganization of such Person or a composition or
readjustment of the debts of such Person (or in connection with the settlement
of Accounts of such Person); provided, that, the original of any such stock or
instrument evidencing such obligations shall be promptly delivered to Agent,
upon Agent's request, together with such stock power, assignment or endorsement
by such Borrower or Guarantor as Agent may reasonably request;
(f) obligations of account debtors to any Borrower or Guarantor arising
from Accounts which are past due evidenced by a promissory note made by such
account debtor payable to such Borrower or Guarantor; provided, that, promptly
upon the receipt of the original of any such promissory note by such Borrower or
Guarantor, such promissory note shall be endorsed and delivered to Agent in
accordance with Section 5.2 hereof;
(g) loans by a Borrower (other than FV Steel) or Guarantor to another
Borrower or Guarantor after the date hereof, provided, that,
(i) as to all of such loans, (A) within thirty (30) days after the end of
each fiscal month, Borrowers shall provide to Agent a report in form and
substance satisfactory to Agent of the outstanding amount of such loans as of
the last day of the immediately preceding month and indicating any loans made
and payments received during the immediately preceding month, (B) the
Indebtedness arising pursuant to any such loan shall not be evidenced by a
promissory note or other instrument, unless the single original of such note or
other instrument is promptly delivered to Agent upon its request to hold as part
of the Collateral, with such endorsement and/or assignment by the payee of such
note or other instrument as Agent may require, (C) as of the date of any such
loan and after giving effect thereto, the Borrower or Guarantor making such loan
shall be Solvent, and (D) as of the date of any such loan and after giving
effect thereto, no Default or Event of Default shall exist or have occurred and
be continuing,
(ii) as to loans by a Guarantor to a Borrower, (A) the Indebtedness arising
pursuant to such loan shall be subject to, and subordinate in right of payment
to, the right of Agent and Lenders to receive the prior final payment and
satisfaction in full of all of the Obligations on terms and conditions
acceptable to Agent, (B) promptly upon Agent's request, Agent shall have
received a subordination agreement, in form and substance satisfactory to Agent,
providing for the terms of the subordination in right of payment of such
Indebtedness of such Borrower to the prior final payment and satisfaction in
full of all of the Obligations, duly authorized, executed and delivered by such
Guarantor and such Borrower, and (C) such Borrower shall not, directly or
indirectly make, or be required to make, any payments in respect of such
Indebtedness prior to the end of the then current term of this Agreement;
(iii) as to loans by a Borrower to a Guarantor or another Borrower, as of
the date of any such loan and after giving effect thereto (A) Borrowers shall
have aggregate Excess Availability equal to at least $5,200,000 and (B) with
respect to any such loans by a Borrower to any other Borrower or Guarantor, (1)
the Excess Availability of such lending Borrower shall be not less than $200,000
and (2) such lending Borrower shall have an Adjusted Tangible Net Worth of not
less than $100,000;
(h) the loans and advances set forth on Schedule 9.10 to the Information
Certificate; provided, that, as to such loans and advances, Borrowers and
Guarantors shall not, directly or indirectly, amend, modify, alter or change the
terms of such loans and advances or any agreement, document or instrument
related thereto and Borrowers and Guarantors shall furnish to Agent all notices
or demands in connection with such loans and advances either received by any
Borrower or Guarantor or on its behalf, promptly after the receipt thereof, or
sent by any Borrower or Guarantor or on its behalf, concurrently with the
sending thereof, as the case may be,
(i) to the extent permitted by applicable law, Administrative Borrower may
accept notes from officers and employees in exchange for Capital Stock of such
Borrower, purchased by such officers or employees pursuant to a stock ownership
or purchase plan or compensation plan;
(j) pledges and deposits made by any Borrower, Guarantor or Subsidiary
permitted under this Agreement, including deposits made in the ordinary course
of business securing obligations or performance under contracts, such as in
connection with real estate or personal property leases;
(k) other loans or investments not permitted above to the extent the
aggregate amount of such loans and investments does not exceed $200,000; and
(l) extensions, renewals or refinancings of the loans and advances under
Schedule 9.10 to the Information Certificate so long as the principal amount is
not increased.
9.11 Dividends and Redemptions. Each Borrower and Guarantor shall not,
directly or indirectly, declare or pay any dividends on account of any shares of
class of any Capital Stock of such Borrower or Guarantor now or hereafter
outstanding, or set aside or otherwise deposit or invest any sums for such
purpose, or redeem, retire, defease, purchase or otherwise acquire any shares of
any class of Capital Stock (or set aside or otherwise deposit or invest any sums
for such purpose) for any consideration or apply or set apart any sum, or make
any other distribution (by reduction of capital or otherwise) in respect of any
such shares, except that:
(a) any Borrower or Guarantor may declare and pay such dividends or redeem,
retire, defease, purchase or otherwise acquire any shares of any class of
Capital Stock for consideration in the form of shares of common stock (so long
as after giving effect thereto no Change of Control or other Default or Event of
Default shall exist or occur);
(b) Borrowers and Guarantors may pay dividends to the extent permitted in
Section 9.12 below;
(c) any Subsidiary of Administrative Borrower may pay dividends to its
direct stockholder;
(d) Administrative Borrower may repurchase Capital Stock consisting of
common stock held by employees pursuant to any employee stock ownership plan
thereof upon the termination, retirement or death of any such employee in
accordance with the provisions of such plan, provided, that, as to any such
repurchase, each of the following conditions is satisfied: (i) as of the date of
the payment for such repurchase and after giving effect thereto, no Default or
Event of Default shall exist or have occurred and be continuing, (ii) such
repurchase shall be paid with funds legally available therefor or a note, (iii)
such repurchase shall not violate any law or regulation or the terms of any
indenture, agreement or undertaking to which such Borrower is a party or by
which such Borrower or its property are bound, and (iv) the aggregate amount of
all cash payments for such repurchases in any calendar year shall not exceed
$500,000.
9.12 Transactions with Affiliates. Each Borrower and Guarantor shall not,
directly or indirectly:
(a) purchase, acquire or lease any property from, or sell, transfer or
lease any property to, any officer, director or other Affiliate of such Borrower
or Guarantor, except (i) upon fair and reasonable terms no less favorable to
such Borrower or Guarantor than such Borrower or Guarantor would obtain in a
comparable arm's length transaction with an unaffiliated person or (ii) pursuant
to the Intercompany Services Agreement; or
(b) make any payments (whether by dividend, loan or otherwise) of
management, consulting or other fees for management or similar services, or of
any Indebtedness owing to any Affiliate of such Borrower or Guarantor, except
(i) reasonable compensation to officers, employees and directors for services
rendered to such Borrower or Guarantor in the ordinary course of business, and
(ii) scheduled payments pursuant to the Intercompany Services Agreement as in
effect on the date hereof.
9.13 Compliance with ERISA. Each Borrower and Guarantor shall, and shall
cause each of its ERISA Affiliates to: (a) maintain each Plan in compliance in
all material respects with the applicable provisions of ERISA, the Code and
other Federal and State law; (b) cause each Plan which is qualified under
Section 401(a) of the Code to maintain such qualification; (c) not terminate any
Pension Plan so as to incur any material liability to the Pension Benefit
Guaranty Corporation; (d) not allow or suffer to exist any prohibited
transaction involving any Plan or any trust created thereunder which would
subject such Borrower, Guarantor or such ERISA Affiliate to a material tax or
other liability on prohibited transactions imposed under Section 4975 of the
Code or ERISA; (e) make all required contributions to any Plan which it is
obligated to pay under Section 302 of ERISA, Section 412 of the Code or the
terms of such Plan; (f) not allow or suffer to exist any accumulated funding
deficiency, whether or not waived, with respect to any such Pension Plan; (g)
not engage in a transaction that could be subject to Section 4069 or 4212(c) of
ERISA; or (h) not allow or suffer to exist any occurrence of a reportable event
or any other event or condition which presents a material risk of termination by
the Pension Benefit Guaranty Corporation of any Plan that is a single employer
plan, which termination could result in any material liability to the Pension
Benefit Guaranty Corporation.
9.14 End of Fiscal Years; Fiscal Quarters. Each Borrower and Guarantor
shall, for financial reporting purposes, cause its, and each of its
Subsidiaries' (a) fiscal years to end on December 31 of each year and (b) fiscal
quarters to end on March 31, June 30, September 30 and December 31 of each year.
9.15 Change in Business. The Borrowers and Guarantors shall not engage in
any business other than the business of the Borrowers and Guarantors on the date
hereof and any business reasonably related, ancillary or complimentary to such
businesses.
9.16 Limitation of Restrictions Affecting Subsidiaries. Each Borrower and
Guarantor shall not, directly, or indirectly, create or otherwise cause or
suffer to exist any encumbrance or restriction which prohibits or limits the
ability of any Subsidiary of such Borrower or Guarantor to (a) pay dividends or
make other distributions or pay any Indebtedness owed to such Borrower or
Guarantor or any Subsidiary of such Borrower or Guarantor; (b) make loans or
advances to such Borrower or Guarantor or any Subsidiary of such Borrower or
Guarantor, (c) transfer any of its properties or assets to such Borrower or
Guarantor or any Subsidiary of such Borrower or Guarantor; or (d) create, incur,
assume or suffer to exist any lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired, other than encumbrances and
restrictions arising under (i) applicable law, (ii) this Agreement, (iii)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of such Borrower or Guarantor or any Subsidiary of such
Borrower or Guarantor, (iv) customary restrictions on dispositions of real
property interests found in reciprocal easement agreements of such Borrower or
Guarantor or any Subsidiary of such Borrower or Guarantor, (v) any agreement
relating to permitted Indebtedness incurred by a Subsidiary of such Borrower or
Guarantor, and (vi) the extension or continuation of contractual obligations in
existence on the date hereof; provided, that, any such encumbrances or
restrictions contained in such extension or continuation are no less favorable
to Agent and Lenders than those encumbrances and restrictions under or pursuant
to the contractual obligations so extended or continued.
9.17 Minimum EBITDAR. Borrowers and their Subsidiaries on a consolidated
basis shall have, at the end of each fiscal quarter set forth below, EBITDAR for
the 12 month period then ending of not less than the following:
Period Ending EBITDAR
September 30, 2005 $12,712,000
December 31, 2005 $ 6,170,000
March 31, 2006 $ 3,242,000
June 30, 2006 $14,122,000
September 30, 2006 $16,653,000
December 31, 2006 $16,170,000
March 31, 2007 $16,300,000
June 30, 2007 $16,600,000
September 30, 2007 $16,900,000
December 31, 2007 and each fiscal quarter ending thereafter $17,000,000
9.18 Minimum Fixed Charge Coverage Ratio. Borrowers and their Subsidiaries
on a consolidated basis shall have, at the end of each calendar month, a Fixed
Charge Coverage Ratio for the 12 month period then ending of not less than
1.0:1.0.
9.19 Minimum Excess Availability. Borrowers shall maintain at all times
Aggregate Suppressed Availability of at least $5,000,000.
9.20 License Agreements.
(a) Each Borrower and Guarantor shall (i) observe and perform all of the
material terms, covenants, conditions and provisions of the material License
Agreements to which it is a party to be observed and performed by it, at the
times set forth therein, if any, (ii) not do, permit, suffer or refrain from
doing anything that could reasonably be expected to result in a default under or
breach of any of the terms of any material License Agreement, (iii) not cancel,
surrender, modify, amend, waive or release any material License Agreement in any
material respect or any term, provision or right of the licensee thereunder in
any material respect, or consent to or permit to occur any of the foregoing;
except, that, subject to Section 9.19(b) below, such Borrower or Guarantor may
cancel, surrender or release any material License Agreement in the ordinary
course of the business of such Borrower or Guarantor; provided, that, such
Borrower or Guarantor (as the case may be) shall give Agent not less than thirty
(30) days prior written notice of its intention to so cancel, surrender and
release any such material License Agreement, (iv) give Agent prompt written
notice of any material License Agreement entered into by such Borrower or
Guarantor after the date hereof, together with a true, correct and complete copy
thereof and such other information with respect thereto as Agent may request,
(v) give Agent prompt written notice of any material breach of any obligation,
or any default, by any party under any material License Agreement, and deliver
to Agent (promptly upon the receipt thereof by such Borrower or Guarantor in the
case of a notice to such Borrower or Guarantor and concurrently with the sending
thereof in the case of a notice from such Borrower or Guarantor) a copy of each
notice of default, and (vi) furnish to Agent, promptly upon the reasonable
request of Agent, such information and evidence as Agent may reasonably require
from time to time concerning the observance, performance and compliance by such
Borrower or Guarantor or the other party or parties thereto with the material
terms, covenants or provisions of any material License Agreement.
(b) Each Borrower and Guarantor will either exercise any option to renew or
extend the term of each material License Agreement to which it is a party in
such manner as will cause the term of such material License Agreement to be
effectively renewed or extended for the period provided by such option and give
prompt written notice thereof to Agent or give Agent prior written notice that
such Borrower or Guarantor does not intend to renew or extend the term of any
such material License Agreement or that the term thereof shall otherwise be
expiring, not less than sixty (60) days prior to the date of any such
non-renewal or expiration. In the event of the failure of such Borrower or
Guarantor to extend or renew any material License Agreement to which it is a
party, Agent shall have, and is hereby granted, the irrevocable right and
authority, at its option, to renew or extend the term of such material License
Agreement, whether in its own name and behalf, or in the name and behalf of a
designee or nominee of Agent or in the name and behalf of such Borrower or
Guarantor, as Agent shall determine at any time that an Event of Default shall
have occurred and be continuing. Upon the occurrence and during the continuation
of an Event of Default, Agent may, but shall not be required to, perform any or
all of such obligations of such Borrower or Guarantor under any of the License
Agreements, including, but not limited to, the payment of any or all sums due
from such Borrower or Guarantor thereunder. Any sums so paid by Agent shall
constitute part of the Obligations.
9.21 Foreign Assets Control Regulations, Etc. None of the requesting or
borrowing of the Loans or the requesting or issuance, extension or renewal of
any Letter of Credit or the use of the proceeds of any thereof will violate the
Trading With the Enemy Act (50 USC ss.1 et seq., as amended) (the "Trading With
the Enemy Act") or any of the foreign assets control regulations of the United
States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) (the
"Foreign Assets Control Regulations") or any enabling legislation or executive
order relating thereto (including, but not limited to (a) Executive order 13224
of September 21, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)) (the "Executive Order") and (b) the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (Public Law 107-56). None of Borrowers or any of their Subsidiaries or
other Affiliates is or will become a "blocked person" as described in the
Executive Order, the Trading with the Enemy Act or the Foreign Assets Control
Regulations or engages or will engage in any dealings or transactions, or be
otherwise associated, with any such "blocked person".
9.22 After Acquired Real Property. If any Borrower or Guarantor hereafter
acquires fee simple title to any Real Property, fixtures or any other property
that is of the kind or nature described in the Mortgages and such Real Property,
fixtures or other property is adjacent to, contiguous with or necessary or
related to or used in connection with any Real Property then subject to a
Mortgage, or if such Real Property is not adjacent to, contiguous with or
related to or used in connection with such Real Property, then if such Real
Property, fixtures or other property at any location (or series of adjacent,
contiguous or related locations, and regardless of the number of parcels) has a
fair market value in an amount equal to or greater than $100,000 (or if an Event
of Default has occurred and is continuing, then regardless of the fair market
value of such assets), without limiting any other rights of Agent or any Lender,
or duties or obligations of any Borrower or Guarantor, promptly upon Agent's
request, such Borrower or Guarantor shall execute and deliver to Agent a
mortgage, deed of trust or deed to secure debt, as Agent may reasonably
determine, in form and substance substantially similar to the Mortgages and as
to any provisions relating to specific state laws reasonably satisfactory to
Agent and in form appropriate for recording in the real estate records of the
jurisdiction in which such Real Property or other property is located granting
to Agent a first and only lien and mortgage on and security interest in such
Real Property, fixtures or other property (except as such Borrower or Guarantor
would otherwise be permitted to incur hereunder or under the Mortgages or as
otherwise consented to in writing by Agent) and such other agreements, documents
and instruments as Agent may reasonably require in connection therewith.
9.23 Costs and Expenses. Borrowers and Guarantors shall pay to Agent on
demand all costs, expenses, filing fees and taxes paid or payable in connection
with the preparation, negotiation, execution, delivery, recording, syndication,
administration, collection, liquidation, enforcement and defense of the
Obligations, Agent's rights in the Collateral, this Agreement, the other
Financing Agreements and all other documents related hereto or thereto,
including any amendments, supplements or consents which may hereafter be
contemplated (whether or not executed) or entered into in respect hereof and
thereof, including: (a) all costs and expenses of filing or recording (including
Uniform Commercial Code financing statement filing taxes and fees, documentary
taxes, intangibles taxes and mortgage recording taxes and fees, if applicable);
(b) costs and expenses and fees for insurance premiums, environmental audits,
title insurance premiums, surveys, assessments, engineering reports and
inspections, appraisal fees and search fees, background checks, costs and
expenses of remitting loan proceeds, collecting checks and other items of
payment, and establishing and maintaining the Blocked Accounts, together with
Agent's customary charges and fees with respect thereto; (c) charges, fees or
expenses charged by any bank or issuer in connection with any Letter of Credit;
(d) costs and expenses of preserving and protecting the Collateral; (e) costs
and expenses paid or incurred in connection with obtaining payment of the
Obligations, enforcing the security interests and liens of Agent, selling or
otherwise realizing upon the Collateral, and otherwise enforcing the provisions
of this Agreement and the other Financing Agreements or defending any claims
made or threatened against Agent or any Lender arising out of the transactions
contemplated hereby and thereby (including preparations for and consultations
concerning any such matters); (f) all out-of-pocket expenses and costs
heretofore and from time to time hereafter incurred by Agent during the course
of periodic field examinations of the Collateral and such Borrower's or
Guarantor's operations, plus a per diem charge at Agent's then standard rate for
Agent's examiners in the field and office (which rate as of the date hereof is
$800 per person per day); and (g) the fees and disbursements of counsel
(including legal assistants) to Agent in connection with any of the foregoing.
9.24 Plan of Reorganization. Borrowers shall consummate the Plan of
Reorganization in accordance with its terms and the terms of the Confirmation
Order. Unless otherwise agreed to by Agent in writing, Borrowers shall not agree
to, or suffer to occur, any amendment, supplement or addition to, or any other
modification of, the Plan of Reorganization or the Conformation Order, except to
the extent such amendment, supplement, addition or modification would not
reasonably be expected to adversely affect the Agent and Lenders.
9.25 Further Assurances. At the reasonable request of Agent at any time and
from time to time, Borrowers and Guarantors shall, at their expense, duly
execute and deliver, or cause to be duly executed and delivered, such further
agreements, documents and instruments, and do or cause to be done such further
acts as may be necessary or proper to evidence, perfect, maintain and enforce
the security interests and the priority thereof in the Collateral and to
otherwise effectuate the provisions or purposes of this Agreement or any of the
other Financing Agreements. Agent may at any time and from time to time
reasonably request a certificate from an officer of any Borrower or Guarantor
representing that all conditions precedent to the making of Loans and providing
Letters of Credit contained herein are satisfied. In the event of such request
by Agent, Agent and Lenders may, at Agent's option, cease to make any further
Loans or provide any further Letters of Credit until Agent has received such
certificate and, in addition, Agent has reasonably determined that such
conditions are satisfied.
SECTION 10. EVENTS OF DEFAULT AND REMEDIES
10.1 Events of Default. The occurrence or existence of any one or more of
the following events are referred to herein individually as an "Event of
Default", and collectively as "Events of Default":
(a) (i) any Borrower fails to pay any of the Obligations when due or (ii)
any Borrower or Guarantor fails to perform any of the covenants contained in
Sections 9.1, 9.2, 9.5 through 9.12 and 9.17 through 9.25 or (iii) any Borrower
or Guarantor fails to perform any of the terms, covenants, conditions or
provisions contained in this Agreement or any of the other Financing Agreements
other than those described in Sections 10.1(a)(i) and 10.1(a)(ii) above and such
failure shall continue for ten (10) days;
(b) any representation, warranty or statement of fact made by any Borrower
or Guarantor to Agent in this Agreement, the other Financing Agreements or any
other written agreement, schedule, confirmatory assignment or otherwise shall
when made or deemed made be false or misleading in any material respect;
(c) any Guarantor revokes or terminates or purports to revoke or terminate
any of the terms, covenants, conditions or provisions of any guarantee, or other
agreement of such party in favor of Agent or any Lender;
(d) any judgment for the payment of money is rendered against any Borrower
or Guarantor in excess of $750,000 in any one case or in excess of $750,000 in
the aggregate (to the extent not covered by insurance where the insurer has
assumed responsibility in writing for such judgment) and shall remain
undischarged or unvacated for a period in excess of thirty (30) days or
execution shall at any time not be effectively stayed, or any judgment other
than for the payment of money, or injunction, attachment, garnishment or
execution is rendered against any Borrower or Guarantor or any of the Collateral
having a value in excess of $750,000;
(e) any Guarantor (being a natural person or a general partner of an
Guarantor which is a partnership) dies or any Borrower or Guarantor, which is a
partnership, limited liability company, limited liability partnership or a
corporation, dissolves or suspends or discontinues doing business;
(f) any Borrower or Guarantor makes an assignment for the benefit of
creditors, makes or sends notice of a bulk transfer or calls a meeting of its
creditors or principal creditors in connection with a moratorium or adjustment
of the Indebtedness due to them;
(g) a case or proceeding under the bankruptcy laws of the United States of
America now or hereafter in effect or under any insolvency, reorganization,
receivership, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction now or hereafter in effect (whether at law or in equity) is
filed against any Borrower or Guarantor or all or any substantial part of its
properties and such petition or application is not dismissed within thirty (30)
days after the date of its filing or any Borrower or Guarantor shall file any
answer admitting or not contesting such petition or application or indicates its
consent to, acquiescence in or approval of, any such action or proceeding or the
relief requested is granted sooner;
(h) a case or proceeding under the bankruptcy laws of the United States of
America now or hereafter in effect or under any insolvency, reorganization,
receivership, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction now or hereafter in effect (whether at a law or equity) is
filed by any Borrower or Guarantor or for all or any substantial part of its
property;
(i) any default in respect of any Indebtedness of any Borrower or Guarantor
(other than Indebtedness owing to Agent and Lenders hereunder), in any case in
an amount in excess of $750,000, which default continues for more than the
applicable cure period, if any, with respect thereto;
(j) any material provision hereof or of any of the other Financing
Agreements shall for any reason cease to be valid, binding and enforceable with
respect to any Borrower or Guarantor in accordance with its terms, or any
Borrower or Guarantor shall challenge the enforceability hereof or thereof, or
shall assert in writing, that any provision hereof or of any of the other
Financing Agreements has ceased to be or is otherwise not valid, binding or
enforceable in accordance with its terms, or any security interest provided for
herein or in any of the other Financing Agreements shall cease to be a valid and
perfected first priority security interest in any of the Collateral purported to
be subject thereto (except as otherwise permitted herein or therein);
(k) an ERISA Event shall occur which results in or could reasonably be
expected to result in liability of any Borrower in an aggregate amount in excess
of $750,000;
(l) any Change of Control;
(m) the indictment by any Governmental Authority, or as Agent may
reasonably and in good faith determine, the threatened indictment by any
Governmental Authority of any Borrower or Guarantor of which any Borrower,
Guarantor or Agent receives notice, in either case, as to which there is a
reasonable possibility of an adverse determination, in the good faith
determination of Agent, under any criminal statute, or commencement or
threatened commencement of criminal or civil proceedings against such Borrower
or Guarantor, pursuant to which statute or proceedings the penalties or remedies
sought or available include forfeiture of (i) any of the Collateral having a
value in excess of $750,000 or (ii) any other property of any Borrower or
Guarantor which is necessary or material to the conduct of its business;
(n) there shall be a material adverse change in the business, assets or
prospects of any Borrower or Guarantor after the date hereof;
(o) there shall be an Event of Default under any of the other Financing
Agreements; or
(p) the Peoria Intercreditor Agreement, the Trustee Intercreditor
Agreement, the Indenture Intercreditor Agreement or any subordination provisions
therein or under the Indenture shall become unenforceable; or
(q) there shall be a material violation of the Confirmation Order or Plan
of Reorganization. 10.2 Remedies.
(a) At any time an Event of Default has occurred and is continuing, Agent
and Lenders shall have all rights and remedies provided in this Agreement, the
other Financing Agreements, the UCC and other applicable law, all of which
rights and remedies may be exercised without notice to or consent by any
Borrower or Guarantor, except as such notice or consent is expressly provided
for hereunder or required by applicable law. All rights, remedies and powers
granted to Agent and Lenders hereunder, under any of the other Financing
Agreements, the UCC or other applicable law, are cumulative, not exclusive and
enforceable, in Agent's discretion, alternatively, successively, or concurrently
on any one or more occasions, and shall include, without limitation, the right
to apply to a court of equity for an injunction to restrain a breach or
threatened breach by any Borrower or Guarantor of this Agreement or any of the
other Financing Agreements. Subject to Section 12 hereof, Agent may, and at the
direction of the Required Lenders shall, at any time or times, proceed directly
against any Borrower or Guarantor to collect the Obligations without prior
recourse to the Collateral.
(b) Without limiting the generality of the foregoing, at any time an Event
of Default has occurred and is continuing, Agent may, at its option and shall
upon the direction of the Required Lenders, (i) upon notice to Administrative
Borrower, accelerate the payment of all Obligations and demand immediate payment
thereof to Agent for itself and the benefit of Lenders (provided, that, upon the
occurrence of any Event of Default described in Sections 10.1(g) and 10.1(h),
all Obligations shall automatically become immediately due and payable), and
(ii) terminate the Commitments whereupon the obligation of each Lender to make
any Loan and an issuer to issue any Letter of Credit shall immediately terminate
(provided, that, upon the occurrence of any Event of Default described in
Sections 10.1(g) and 10.1(h), the Commitments and any other obligation of the
Agent or a Lender hereunder shall automatically terminate).
(c) Without limiting the foregoing, at any time an Event of Default has
occurred and is continuing, Agent may, in its discretion (i) with or without
judicial process or the aid or assistance of others, enter upon any premises on
or in which any of the Collateral may be located and take possession of the
Collateral or complete processing, manufacturing and repair of all or any
portion of the Collateral, (ii) require any Borrower or Guarantor, at Borrowers'
expense, to assemble and make available to Agent any part or all of the
Collateral at any place and time designated by Agent, (iii) collect, foreclose,
receive, appropriate, setoff and realize upon any and all Collateral, (iv)
remove any or all of the Collateral from any premises on or in which the same
may be located for the purpose of effecting the sale, foreclosure or other
disposition thereof or for any other purpose, (v) sell, lease, transfer, assign,
deliver or otherwise dispose of any and all Collateral (including entering into
contracts with respect thereto, public or private sales at any exchange,
broker's board, at any office of Agent or elsewhere) at such prices or terms as
Agent may deem reasonable, for cash, upon credit or for future delivery, with
the Agent having the right to purchase the whole or any part of the Collateral
at any such public sale, all of the foregoing being free from any right or
equity of redemption of any Borrower or Guarantor, which right or equity of
redemption is hereby expressly waived and released by Borrowers and Guarantors
and/or (vi) terminate this Agreement. If any of the Collateral is sold or leased
by Agent upon credit terms or for future delivery, the Obligations shall not be
reduced as a result thereof until payment therefor is finally collected by
Agent. If notice of disposition of Collateral is required by law, ten (10) days
prior notice by Agent to Administrative Borrower designating the time and place
of any public sale or the time after which any private sale or other intended
disposition of Collateral is to be made, shall be deemed to be reasonable notice
thereof and Borrowers and Guarantors waive any other notice. In the event Agent
institutes an action to recover any Collateral or seeks recovery of any
Collateral by way of prejudgment remedy, each Borrower and Guarantor waives the
posting of any bond which might otherwise be required. At any time an Event of
Default exists or has occurred and is continuing, upon Agent's request,
Borrowers will either, as Agent shall specify, furnish cash collateral to the
issuer to be used to secure and fund the reimbursement obligations to the issuer
in connection with any Letter of Credit Obligations or furnish cash collateral
to Agent for the Letter of Credit Obligations. Such cash collateral shall be in
the amount equal to one hundred five (105%) percent of the amount of the Letter
of Credit Obligations plus the amount of any fees and expenses payable in
connection therewith through the end of the latest expiration date of the
Letters of Credit giving rise to such Letter of Credit Obligations.
(d) At any time or times that an Event of Default has occurred and is
continuing, Agent may, in its discretion, enforce the rights of any Borrower or
Guarantor against any account debtor, secondary obligor or other obligor in
respect of any of the Accounts or other Receivables. Without limiting the
generality of the foregoing, Agent may, in its discretion, at such time or times
(i) notify any or all account debtors, secondary obligors or other obligors in
respect thereof that the Receivables have been assigned to Agent and that Agent
has a security interest therein and Agent may direct any or all account debtors,
secondary obligors and other obligors to make payment of Receivables directly to
Agent, (ii) extend the time of payment of, compromise, settle or adjust for
cash, credit, return of merchandise or otherwise, and upon any terms or
conditions, any and all Receivables or other obligations included in the
Collateral and thereby discharge or release the account debtor or any secondary
obligors or other obligors in respect thereof without affecting any of the
Obligations, (iii) demand, collect or enforce payment of any Receivables or such
other obligations, but without any duty to do so, and Agent and Lenders shall
not be liable for any failure to collect or enforce the payment thereof nor for
the negligence of its agents or attorneys with respect thereto and (iv) take
whatever other action Agent may deem necessary or desirable for the protection
of its interests and the interests of Lenders. At any time that an Event of
Default has occurred and is continuing, at Agent's request, all invoices and
statements sent to any account debtor shall state that the Accounts and such
other obligations have been assigned to Agent and are payable directly and only
to Agent and Borrowers and Guarantors shall deliver to Agent such originals of
documents evidencing the sale and delivery of goods or the performance of
services giving rise to any Accounts as Agent may require. In the event any
account debtor returns Inventory when an Event of Default has occurred and is
continuing, Borrowers shall, upon Agent's request, hold the returned Inventory
in trust for Agent, segregate all returned Inventory from all of its other
property, dispose of the returned Inventory solely according to Agent's
instructions, and not issue any credits, discounts or allowances with respect
thereto without Agent's prior written consent.
(e) To the extent that applicable law imposes duties on Agent or any Lender
to exercise remedies in a commercially reasonable manner (which duties cannot be
waived under such law), each Borrower and Guarantor acknowledges and agrees that
it is not commercially unreasonable for Agent or any Lender (i) to fail to incur
expenses reasonably deemed significant by Agent or any Lender to prepare
Collateral for disposition or otherwise to complete raw material or work in
process into finished goods or other finished products for disposition, (ii) to
fail to obtain third party consents for access to Collateral to be disposed of,
or to obtain or, if not required by other law, to fail to obtain consents of any
Governmental Authority or other third party for the collection or disposition of
Collateral to be collected or disposed of, (iii) to fail to exercise collection
remedies against account debtors, secondary obligors or other persons obligated
on Collateral or to remove liens or encumbrances on or any adverse claims
against Collateral, (iv) to exercise collection remedies against account debtors
and other persons obligated on Collateral directly or through the use of
collection agencies and other collection specialists, (v) to advertise
dispositions of Collateral through publications or media of general circulation,
whether or not the Collateral is of a specialized nature, (vi) to contact other
persons, whether or not in the same business as any Borrower or Guarantor, for
expressions of interest in acquiring all or any portion of the Collateral, (vii)
to hire one or more professional auctioneers to assist in the disposition of
Collateral, whether or not the collateral is of a specialized nature, (viii) to
dispose of Collateral by utilizing Internet sites that provide for the auction
of assets of the types included in the Collateral or that have the reasonable
capability of doing so, or that match buyers and sellers of assets, (ix) to
dispose of assets in wholesale rather than retail markets, (x) to disclaim
disposition warranties, (xi) to purchase insurance or credit enhancements to
insure Agent or Lenders against risks of loss, collection or disposition of
Collateral or to provide to Agent or Lenders a guaranteed return from the
collection or disposition of Collateral, or (xii) to the extent deemed
appropriate by Agent, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist Agent in the collection
or disposition of any of the Collateral. Each Borrower and Guarantor
acknowledges that the purpose of this Section is to provide non-exhaustive
indications of what actions or omissions by Agent or any Lender would not be
commercially unreasonable in the exercise by Agent or any Lender of remedies
against the Collateral and that other actions or omissions by Agent or any
Lender shall not be deemed commercially unreasonable solely on account of not
being indicated in this Section. Without limitation of the foregoing, nothing
contained in this Section shall be construed to grant any rights to any Borrower
or Guarantor or to impose any duties on Agent or Lenders that would not have
been granted or imposed by this Agreement or by applicable law in the absence of
this Section.
(f) For the purpose of enabling Agent to exercise the rights and remedies
hereunder, each Borrower and Guarantor hereby grants to Agent, to the extent
assignable, an irrevocable, non-exclusive license (exercisable at any time an
Event of Default shall have occurred and for so long as the same is continuing)
without payment of royalty or other compensation to any Borrower or Guarantor,
to use, assign, license or sublicense any of the trademarks, service-marks,
trade names, business names, trade styles, designs, logos and other source of
business identifiers and other Intellectual Property and general intangibles now
owned or hereafter acquired by any Borrower or Guarantor, wherever the same may
be located, including in such license reasonable access to all media in which
any of the licensed items may be recorded or stored and to all computer programs
used for the compilation or printout thereof.
(g) At any time an Event of Default has occurred and is continuing, Agent
may apply the cash proceeds of Collateral actually received by Agent from any
sale, lease, foreclosure or other disposition of the Collateral to payment of
the Obligations, in whole or in part and in accordance with the terms hereof,
whether or not then due or may hold such proceeds as cash collateral for the
Obligations. Borrowers and Guarantors shall remain liable to Agent and Lenders
for the payment of any deficiency with interest at the highest rate provided for
herein and all costs and expenses of collection or enforcement, including
attorneys' fees and expenses.
(h) Without limiting the foregoing, upon the occurrence and during the
continuance of an Event of Default, (i) Agent and Lenders may, at Agent's
option, and upon the occurrence of an Event of Default at the direction of the
Required Lenders, Agent and Lenders shall, without notice, (A) cease making
Loans or arranging for Letters of Credit or reduce the lending formulas or
amounts of Loans and Letters of Credit available to Borrowers and/or (B)
terminate any provision of this Agreement providing for any future Loans or
Letters of Credit to be made by Agent and Lenders to Borrowers and (ii) Agent
may, at its option, establish such Reserves as Agent determines, without
limitation or restriction, notwithstanding anything to the contrary contained
herein.
SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW
11.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.
(a) The validity, interpretation and enforcement of this Agreement and the
other Financing Agreements (except as otherwise provided therein) and any
dispute arising out of the relationship between the parties hereto, whether in
contract, tort, equity or otherwise, shall be governed by the internal laws of
the State of Illinois but excluding any principles of conflicts of law or other
rule of law that would cause the application of the law of any jurisdiction
other than the laws of the State of Illinois.
(b) Borrowers, Guarantors, Agent and Lenders irrevocably consent and submit
to the non-exclusive jurisdiction of the Circuit Courts of Cook County, Illinois
and the United States District Court for the Northern District of Illinois,
whichever Agent may elect, and waive any objection based on venue or forum non
conveniens with respect to any action instituted therein arising under this
Agreement or any of the other Financing Agreements or in any way connected with
or related or incidental to the dealings of the parties hereto in respect of
this Agreement or any of the other Financing Agreements or the transactions
related hereto or thereto, in each case whether now existing or hereafter
arising, and whether in contract, tort, equity or otherwise, and agree that any
dispute with respect to any such matters shall be heard only in the courts
described above (except that Agent and Lenders shall have the right to bring any
action or proceeding against any Borrower or Guarantor or its or their property
in the courts of any other jurisdiction which Agent deems necessary or
appropriate in order to realize on the Collateral or to otherwise enforce its
rights against any Borrower or Guarantor or its or their property).
(c) Each Borrower and Guarantor hereby waives personal service of any and
all process upon it and consents that all such service of process may be made by
certified mail (return receipt requested) directed to its address set forth
herein and service so made shall be deemed to be completed five (5) days after
the same shall have been so deposited in the U.S. mails, or, at Agent's option,
by service upon any Borrower or Guarantor (or Administrative Borrower on behalf
of such Borrower or Guarantor) in any other manner provided under the rules of
any such courts.
(d) BORROWERS, GUARANTORS, AGENT AND LENDERS EACH HEREBY WAIVES ANY RIGHT
TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER
THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT
OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS
RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. BORROWERS,
GUARANTORS, AGENT AND LENDERS EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY AND THAT ANY BORROWER, ANY GUARANTOR, AGENT OR ANY LENDER MAY FILE AN
ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
(e) Agent and Lenders shall not have any liability to any Borrower or
Guarantor (whether in tort, contract, equity or otherwise) for losses suffered
by such Borrower or Guarantor in connection with, arising out of, or in any way
related to the transactions or relationships contemplated by this Agreement, or
any act, omission or event occurring in connection herewith, unless and to the
extent that it is determined by a final and non-appealable judgment or court
order binding on Agent and such Lender, that the losses were the result of acts
or omissions constituting gross negligence or willful misconduct. In any such
litigation, Agent and Lenders shall be entitled to the benefit of the rebuttable
presumption that it acted in good faith and with the exercise of ordinary care
in the performance by it of the terms of this Agreement. Each Borrower and
Guarantor: (i) certifies that neither Agent, any Lender nor any representative,
agent or attorney acting for or on behalf of Agent or any Lender has
represented, expressly or otherwise, that Agent and Lenders would not, in the
event of litigation, seek to enforce any of the waivers provided for in this
Agreement or any of the other Financing Agreements and (ii) acknowledges that in
entering into this Agreement and the other Financing Agreements, Agent and
Lenders are relying upon, among other things, the waivers and certifications set
forth in this Section 11.1 and elsewhere herein and therein.
11.2 Waiver of Notices. Each Borrower and Guarantor hereby expressly waives
demand, presentment, protest and notice of protest and notice of dishonor with
respect to any and all instruments and chattel paper, included in or evidencing
any of the Obligations or the Collateral, and any and all other demands and
notices of any kind or nature whatsoever with respect to the Obligations, the
Collateral and this Agreement, except such as are expressly provided for herein.
No notice to or demand on any Borrower or Guarantor which Agent or any Lender
may elect to give shall entitle such Borrower or Guarantor to any other or
further notice or demand in the same, similar or other circumstances.
11.3 Amendments and Waivers.
(a) Neither this Agreement nor any other Financing Agreement nor any terms
hereof or thereof may be amended, waived, discharged or terminated unless such
amendment, waiver, discharge or termination is in writing signed by Agent and
the Required Lenders or at Agent's option, by Agent with the authorization or
consent of the Required Lenders, and as to amendments to any of the Financing
Agreements (other than with respect to any provision of Section 12 hereof), by
any Borrower and such amendment, waiver, discharger or termination shall be
effective and binding as to all Lenders only in the specific instance and for
the specific purpose for which given; except, that, no such amendment, waiver,
discharge or termination shall:
(i) reduce the interest rate or any fees or extend the time of payment of
principal, interest or any fees or reduce the principal amount of any Loan or
Letters of Credit, in each case without the consent of each Lender directly
affected thereby,
(ii) increase the Commitment of any Lender over the amount thereof then in
effect or provided hereunder, in each case without the consent of the Lender
directly affected thereby,
(iii) release any Collateral (except as expressly required hereunder or
under any of the other Financing Agreements or applicable law and except as
permitted under Section 12.11(b) hereof), without the consent of Agent and all
of Lenders,
(iv) reduce any percentage specified in the definition of Required Lenders,
without the consent of Agent and all of Lenders,
(v) consent to the assignment or transfer by any Borrower or Guarantor of
any of their rights and obligations under this Agreement, without the consent of
Agent and all of Lenders,
(vi) amend, modify or waive any terms of this Section 11.3 hereof, without
the consent of Agent and all of Lenders, or
(vii) increase the advance rates constituting part of the Borrowing Base or
increase the Inventory Loan Limit or the Letter of Credit Limit from those set
forth in this Agreement as of the date hereof, without the consent of Agent and
all of Lenders.
(b) Agent and Lenders shall not, by any act, delay, omission or otherwise
be deemed to have expressly or impliedly waived any of its or their rights,
powers and/or remedies unless such waiver shall be in writing and signed as
provided herein. Any such waiver shall be enforceable only to the extent
specifically set forth therein. A waiver by Agent or any Lender of any right,
power and/or remedy on any one occasion shall not be construed as a bar to or
waiver of any such right, power and/or remedy which Agent or any Lender would
otherwise have on any future occasion, whether similar in kind or otherwise.
(c) Notwithstanding anything to the contrary contained in Section 11.3(a)
above, in connection with any amendment, waiver, discharge or termination, in
the event that any Lender whose consent thereto is required shall fail to
consent or fail to consent in a timely manner (such Lender being referred to
herein as a "Non-Consenting Lender"), but the consent of any other Lenders to
such amendment, waiver, discharge or termination that is required are obtained,
if any, then Wachovia shall have the right, but not the obligation, at any time
thereafter, and upon the exercise by Wachovia of such right, such Non-Consenting
Lender shall have the obligation, to sell, assign and transfer to Wachovia or
such Eligible Transferee as Wachovia may specify, the Commitment of such
Non-Consenting Lender and all rights and interests of such Non-Consenting Lender
pursuant thereto. Wachovia shall provide the Non-Consenting Lender and
Administrative Borrower with prior written notice of its intent to exercise its
right under this Section, which notice shall specify on date on which such
purchase and sale shall occur. Such purchase and sale shall be pursuant to the
terms of an Assignment and Acceptance (whether or not executed by the
Non-Consenting Lender), except that on the date of such purchase and sale,
Congress, or such Eligible Transferee specified by Congress, shall pay to the
Non-Consenting Lender (except as Wachovia and such Non-Consenting Lender may
otherwise agree) the amount equal to: (i) the principal balance of the Loans
held by the Non-Consenting Lender outstanding as of the close of business on the
business day immediately preceding the effective date of such purchase and sale,
plus (ii) amounts accrued and unpaid in respect of interest and fees payable to
the Non-Consenting Lender to the effective date of the purchase (but in no event
shall the Non-Consenting Lender be deemed entitled to any early termination
fee), minus (iii) the amount of the closing fee received by the Non-Consenting
Lender pursuant to the terms hereof or of any of the other Financing Agreements
multiplied by the fraction, the numerator of which is the number of months
remaining in the then current term of the Credit Facility and the denominator of
which is the number of months in the then current term thereof. Such purchase
and sale shall be effective on the date of the payment of such amount to the
Non-Consenting Lender and the Commitment of the Non-Consenting Lender shall
terminate on such date.
(d) The consent of Agent shall be required for any amendment, waiver or
consent affecting the rights or duties of Agent hereunder or under any of the
other Financing Agreements, in addition to the consent of the Lenders otherwise
required by this Section and the exercise by Agent of any of its rights
hereunder with respect to Reserves or Eligible Accounts or Eligible Inventory
shall not be deemed an amendment to the advance rates provided for in this
Section 11.3. Notwithstanding anything to the contrary contained in Section
11.3(a) above, (i) in the event that Agent shall agree that any items otherwise
required to be delivered to Agent as a condition of the initial Loans and
Letters of Credit hereunder may be delivered after the date hereof, Agent may,
in its discretion, agree to extend the date for delivery of such items or take
such other action as Agent may deem appropriate as a result of the failure to
receive such items as Agent may determine or may waive any Event of Default as a
result of the failure to receive such items, in each case without the consent of
any Lender and (ii) Agent may consent to any change in the type of organization,
jurisdiction of organization or other legal structure of any Borrower, Guarantor
or any of their Subsidiaries and amend the terms hereof or of any of the other
Financing Agreements as may be necessary or desirable to reflect any such
change, in each case without the approval of any Lender.
(e) The consent of Agent and any Lender, any Affiliate of any Lender or any
other financial institution acceptable to Agent, as the case may be, that is
party to a Hedge Agreement at such time shall be required for any amendment to
the priority of payment of Obligations arising under or pursuant to any Hedge
Agreements of a Borrower or Guarantor as set forth in Section 6.4(a) hereof.
11.4 Waiver of Counterclaims. Each Borrower and Guarantor waives all rights
to interpose any claims, deductions, setoffs or counterclaims of any nature
(other then compulsory counterclaims) in any action or proceeding with respect
to this Agreement, the Obligations, the Collateral or any matter arising
therefrom or relating hereto or thereto.
11.5 Indemnification. Each Borrower and Guarantor shall, jointly and
severally, indemnify and hold Agent and each Lender, and their respective
officers, directors, agents, employees, advisors and counsel and their
respective Affiliates (each such person being an "Indemnitee"), harmless from
and against any and all losses, claims, damages, liabilities, costs or expenses
(including attorneys' fees and expenses) imposed on, incurred by or asserted
against any of them in connection with any litigation, investigation, claim or
proceeding commenced or threatened related to the negotiation, preparation,
execution, delivery, enforcement, performance or administration of this
Agreement, any other Financing Agreements, or any undertaking or proceeding
related to any of the transactions contemplated hereby or any act, omission,
event or transaction related or attendant thereto, including amounts paid in
settlement, court costs, and the fees and expenses of counsel except that
Borrowers and Guarantors shall not have any obligation under this Section 11.5
to indemnify an Indemnitee with respect to a matter covered hereby to the extent
resulting from the gross negligence or wilful misconduct of such Indemnitee as
determined pursuant to a final, non-appealable order of a court of competent
jurisdiction (but without limiting the obligations of Borrowers or Guarantors as
to any other Indemnitee). To the extent that the undertaking to indemnify, pay
and hold harmless set forth in this Section may be unenforceable because it
violates any law or public policy, Borrowers and Guarantors shall pay the
maximum portion which it is permitted to pay under applicable law to Agent and
Lenders in satisfaction of indemnified matters under this Section. To the extent
permitted by applicable law, no Borrower or Guarantor shall assert, and each
Borrower and Guarantor hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement, any of the other Financing Agreements or any
undertaking or transaction contemplated hereby. All amounts due under this
Section shall be payable within five (5) days after demand. The foregoing
indemnity shall survive the payment of the Obligations and the termination or
non-renewal of this Agreement.
SECTION 12. THE AGENT
12.1 Appointment, Powers and Immunities. Each Lender irrevocably
designates, appoints and authorizes Wachovia to act as Agent hereunder and under
the other Financing Agreements with such powers as are specifically delegated to
Agent by the terms of this Agreement and of the other Financing Agreements,
together with such other powers as are reasonably incidental thereto. Agent (a)
shall have no duties or responsibilities except those expressly set forth in
this Agreement and in the other Financing Agreements, and shall not by reason of
this Agreement or any other Financing Agreement be a trustee or fiduciary for
any Lender; (b) shall not be responsible to Lenders for any recitals,
statements, representations or warranties contained in this Agreement or in any
of the other Financing Agreements, or in any certificate or other document
referred to or provided for in, or received by any of them under, this Agreement
or any other Financing Agreement, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
Financing Agreement or any other document referred to or provided for herein or
therein or for any failure by any Borrower or any Guarantor or any other Person
to perform any of its obligations hereunder or thereunder; and (c) shall not be
responsible to Lenders for any action taken or omitted to be taken by it
hereunder or under any other Financing Agreement or under any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith, except for its own gross negligence or willful misconduct
as determined by a final non-appealable judgment of a court of competent
jurisdiction. Agent may employ agents and attorneys in fact and shall not be
responsible for the negligence or misconduct of any such agents or attorneys in
fact selected by it in good faith. Agent may deem and treat the payee of any
note as the holder thereof for all purposes hereof unless and until the
assignment thereof pursuant to an agreement (if and to the extent permitted
herein) in form and substance satisfactory to Agent shall have been delivered to
and acknowledged by Agent.
12.2 Reliance by Agent. Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telecopy, telex, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by Agent. As to any matters not expressly
provided for by this Agreement or any other Financing Agreement, Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
or thereunder in accordance with instructions given by the Required Lenders or
all of Lenders as is required in such circumstance, and such instructions of
such Agents and any action taken or failure to act pursuant thereto shall be
binding on all Lenders.
12.3 Events of Default.
(a) Agent shall not be deemed to have knowledge or notice of the occurrence
of a Default or an Event of Default or other failure of a condition precedent to
the Loans and Letters of Credit hereunder, unless and until Agent has received
written notice from a Lender, or a Borrower specifying such Event of Default or
any unfulfilled condition precedent, and stating that such notice is a "Notice
of Default or Failure of Condition". In the event that Agent receives such a
Notice of Default or Failure of Condition, Agent shall give prompt notice
thereof to the Lenders. Agent shall (subject to Section 12.7) take such action
with respect to any such Event of Default or failure of condition precedent as
shall be directed by the Required Lenders to the extent provided for herein;
provided, that, unless and until Agent shall have received such directions,
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to or by reason of such Event of Default or
failure of condition precedent, as it shall deem advisable in the best interest
of Lenders. Without limiting the foregoing, and notwithstanding the occurrence
and continuance of an Event of Default or any other failure to satisfy any of
the conditions precedent set forth in Section 4 of this Agreement to the
contrary, unless and until otherwise directed by the Required Lenders, Agent
may, but shall have no obligation to, continue to make Loans and issue or cause
to be issued any Letter of Credit for the ratable account and risk of Lenders
from time to time if Agent believes making such Loans or issuing or causing to
be issued such Letter of Credit is in the best interests of Lenders.
(b) Except with the prior written consent of Agent, no Lender may assert or
exercise any enforcement right or remedy in respect of the Loans, Letter of
Credit Obligations or other Obligations, as against any Borrower or Guarantor or
any of the Collateral or other property of any Borrower or Guarantor.
12.4 Wachovia in its Individual Capacity. With respect to its Commitment
and the Loans made and Letters of Credit issued or caused to be issued by it
(and any successor acting as Agent), so long as Wachovia shall be a Lender
hereunder, it shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include Wachovia in its individual capacity as Lender hereunder. Wachovia (and
any successor acting as Agent) and its Affiliates may (without having to account
therefor to any Lender) lend money to, make investments in and generally engage
in any kind of business with Borrowers (and any of its Subsidiaries or
Affiliates) as if it were not acting as Agent, and Wachovia and its Affiliates
may accept fees and other consideration from any Borrower or Guarantor and any
of its Subsidiaries and Affiliates for services in connection with this
Agreement or otherwise without having to account for the same to Lenders.
12.5 Indemnification. Lenders agree to indemnify Agent (to the extent not
reimbursed by Borrowers hereunder and without limiting any obligations of
Borrowers hereunder) ratably, in accordance with their Pro Rata Shares, for any
and all claims of any kind and nature whatsoever that may be imposed on,
incurred by or asserted against Agent (including by any Lender) arising out of
or by reason of any investigation in or in any way relating to or arising out of
this Agreement or any other Financing Agreement or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including the costs and expenses that Agent is
obligated to pay hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, provided, that, no Lender shall be
liable for any of the foregoing to the extent it arises from the gross
negligence or willful misconduct of the party to be indemnified as determined by
a final non-appealable judgment of a court of competent jurisdiction. The
foregoing indemnity shall survive the payment of the Obligations and the
termination or non-renewal of this Agreement.
12.6 Non-Reliance on Agent and Other Lenders. Each Lender agrees that it
has, independently and without reliance on Agent or other Lender, and based on
such documents and information as it has deemed appropriate, made its own credit
analysis of Borrowers and Guarantors and has made its own decision to enter into
this Agreement and that it will, independently and without reliance upon Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Financing
Agreements. Agent shall not be required to keep itself informed as to the
performance or observance by any Borrower or Guarantor of any term or provision
of this Agreement or any of the other Financing Agreements or any other document
referred to or provided for herein or therein or to inspect the properties or
books of any Borrower or Guarantor. Agent will use reasonable efforts to provide
Lenders with any information received by Agent from any Borrower or Guarantor
which is required to be provided to Lenders or deemed to be requested by Lenders
hereunder and with a copy of any Notice of Default or Failure of Condition
received by Agent from any Borrower or any Lender; provided, that, Agent shall
not be liable to any Lender for any failure to do so, except to the extent that
such failure is attributable to Agent's own gross negligence or willful
misconduct as determined by a final non-appealable judgment of a court of
competent jurisdiction. Except for notices, reports and other documents
expressly required to be furnished to Lenders by Agent or deemed requested by
Lenders hereunder, Agent shall not have any duty or responsibility to provide
any Lender with any other credit or other information concerning the affairs,
financial condition or business of any Borrower or Guarantor that may come into
the possession of Agent.
12.7 Failure to Act. Except for action expressly required of Agent
hereunder and under the other Financing Agreements, Agent shall in all cases be
fully justified in failing or refusing to act hereunder and thereunder unless it
shall receive further assurances to its satisfaction from Lenders of their
indemnification obligations under Section 12.5 hereof against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.
12.8 Additional Loans. Agent shall not make any Revolving Loans or provide
any Letter of Credit to any Borrower on behalf of Lenders intentionally and with
actual knowledge that such Revolving Loans or Letter of Credit would cause the
aggregate amount of the total outstanding Revolving Loans and Letters of Credit
to such Borrower to exceed the Borrowing Base of such Borrower, without the
prior consent of all Lenders, except, that, Agent may make such additional
Revolving Loans or provide such additional Letter of Credit on behalf of
Lenders, intentionally and with actual knowledge that such Revolving Loans or
Letter of Credit will cause the total outstanding Revolving Loans and Letters of
Credit to such Borrower to exceed the Borrowing Base of such Borrower, as Agent
may deem necessary or advisable in its discretion, provided, that: (a) the total
principal amount of the additional Revolving Loans or additional Letters of
Credit to any Borrower which Agent may make or provide after obtaining such
actual knowledge that the aggregate principal amount of the Revolving Loans
equal or exceed the Borrowing Bases of Borrowers, plus the amount of Special
Agent Advances made pursuant to Section 12.11(a)(ii) hereof then outstanding,
shall not exceed the aggregate amount equal to ten percent (10%) of the Maximum
Credit and shall not cause the total principal amount of the Loans and Letters
of Credit to exceed the Maximum Credit and (b) no such additional Revolving Loan
or Letter of Credit shall be outstanding more than ninety (90) days after the
date such additional Revolving Loan or Letter of Credit is made or issued (as
the case may be), except as the Required Lenders may otherwise agree. Each
Lender shall be obligated to pay Agent the amount of its Pro Rata Share of any
such additional Revolving Loans or Letters of Credit.
12.9 Concerning the Collateral and the Related Financing Agreements. Each
Lender authorizes and directs Agent to enter into this Agreement and the other
Financing Agreements on behalf of such Lender (including, without limitation,
post closing, intercreditor and subordination agreements) and each such Lender
agrees to be bound by the terms thereof. Each Lender agrees that any action
taken by Agent or Required Lenders in accordance with the terms of this
Agreement or the other Financing Agreements and the exercise by Agent or
Required Lenders of their respective powers set forth therein or herein,
together with such other powers that are reasonably incidental thereto, shall be
binding upon all of the Lenders.
12.10 Field Audit, Examination Reports and other Information; Disclaimer by
Lenders. By signing this Agreement, each Lender:
(a) is deemed to have requested that Agent furnish such Lender, promptly
after it becomes available, a copy of each field audit or examination report and
report with respect to the Borrowing Base prepared or received by Agent (each
field audit or examination report and report with respect to the Borrowing Base
being referred to herein as a "Report" and collectively, "Reports"), appraisals
with respect to the Collateral and financial statements with respect Parent and
its Subsidiaries received by Agent;
(b) expressly agrees and acknowledges that Agent (i) does not make any
representation or warranty as to the accuracy of any Report, appraisal or
financial statement or (ii) shall not be liable for any information contained in
any Report, appraisal or financial statement;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or any other party performing
any audit or examination will inspect only specific information regarding
Borrowers and Guarantors and will rely significantly upon Borrowers' and
Guarantors' books and records, as well as on representations of Borrowers' and
Guarantors' personnel; and
(d) agrees to keep all Reports confidential and strictly for its internal
use in accordance with the terms of Section 13.5 hereof, and not to distribute
or use any Report in any other manner.
12.11 Collateral Matters.
(a) Agent may, at its option, from time to time, at any time on or after an
Event of Default and for so long as the same is continuing or upon any other
failure of a condition precedent to the Loans and Letters of Credit hereunder,
make such disbursements and advances ("Special Agent Advances") which Agent, in
its sole discretion, (i) deems necessary or desirable either to preserve or
protect the Collateral or any portion thereof or (ii) to enhance the likelihood
or maximize the amount of repayment by Borrowers and Guarantors of the Loans and
other Obligations, provided, that, (A) the aggregate principal amount of the
Special Agent Advances pursuant to this clause (ii) outstanding at any time,
plus the then outstanding principal amount of the additional Loans and Letters
of Credit which Agent may make or provide as set forth in Section 12.8 hereof,
shall not exceed the amount equal to ten (10%) percent of the Maximum Credit and
(B) the aggregate principal amount of the Special Agent Advances pursuant to
this clause (ii) outstanding at any time, plus the then outstanding principal
amount of the Loans, shall not exceed the Maximum Credit, except at Agent's
option, provided, that, to the extent that the aggregate principal amount of
Special Agent Advances plus the then outstanding principal amount of the Loans
exceed the Maximum Credit the Special Agent Advances that are in excess of the
Maximum Credit shall be for the sole account and risk of Agent and
notwithstanding anything to the contrary set forth below, no Lender shall have
any obligation to provide its share of such Special Agent Advances in excess of
the Maximum Credit, or (iii) to pay any other amount chargeable to any Borrower
or Guarantor pursuant to the terms of this Agreement or any of the other
Financing Agreements consisting of (A) costs, fees and expenses and (B) payments
to Issuing Bank in respect of any Letter of Credit Obligations. The Special
Agent Advances shall be repayable on demand and together with all interest
thereon shall constitute Obligations secured by the Collateral. Special Agent
Advances shall not constitute Loans but shall otherwise constitute Obligations
hereunder. Interest on Special Agent Advances shall be payable at the Interest
Rate then applicable to Prime Rate Loans and shall be payable on demand. Without
limitation of its obligations pursuant to Section 6.11, each Lender agrees that
it shall make available to Agent, upon Agent's demand, in immediately available
funds, the amount equal to such Lender's Pro Rata Share of each such Special
Agent Advance. If such funds are not made available to Agent by such Lender,
such Lender shall be deemed a Defaulting Lender and Agent shall be entitled to
recover such funds, on demand from such Lender together with interest thereon
for each day from the date such payment was due until the date such amount is
paid to Agent at the Federal Funds Rate for each day during such period (as
published by the Federal Reserve Bank of New York or at Agent's option based on
the arithmetic mean determined by Agent of the rates for the last transaction in
overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on that
day by each of the three leading brokers of Federal funds transactions in New
York City selected by Agent) and if such amounts are not paid within three (3)
days of Agent's demand, at the highest Interest Rate provided for in Section 3.1
hereof applicable to Prime Rate Loans.
(b) Lenders hereby irrevocably authorize Agent, at its option and in its
discretion to release any security interest in, mortgage or lien upon, any of
the Collateral (i) upon termination of the Commitments and payment and
satisfaction of all of the Obligations (other than contingent indemnification
obligations not asserted) and delivery of cash collateral to the extent required
under Section 13.1 below, or (ii) constituting property being sold or disposed
of if Administrative Borrower or any Borrower or Guarantor certifies to Agent
that the sale or disposition is made in compliance with Section 9.7 hereof (and
Agent may rely conclusively on any such certificate, without further inquiry),
or (iii) constituting property in which any Borrower or Guarantor did not own an
interest at the time the security interest, mortgage or lien was granted or at
any time thereafter, or (iv) having a value in the aggregate in any twelve (12)
month period of less than $1,500,000, and to the extent Agent may release its
security interest in and lien upon any such Collateral pursuant to the sale or
other disposition thereof, such sale or other disposition shall be deemed
consented to by Lenders, or (v) if required or permitted under the terms of any
of the other Financing Agreements, including any intercreditor agreement, or
(vi) approved, authorized or ratified in writing by all of Lenders. Except as
provided above, Agent will not release any security interest in, mortgage or
lien upon, any of the Collateral without the prior written authorization of all
of Lenders. Upon request by Agent at any time, Lenders will promptly confirm in
writing Agent's authority to release particular types or items of Collateral
pursuant to this Section.
(c) Without any manner limiting Agent's authority to act without any
specific or further authorization or consent by the Required Lenders, each
Lender agrees to promptly confirm in writing, upon request by Agent, the
authority to release Collateral conferred upon Agent under this Section. Agent
shall (and is hereby irrevocably authorized by Lenders to) execute such
documents as may be necessary to evidence the release of the security interest,
mortgage or liens granted to Agent upon any Collateral to the extent set forth
above; provided, that, (i) Agent shall not be required to execute any such
document on terms which, in Agent's opinion, would expose Agent to liability or
create any obligations or entail any consequence other than the release of such
security interest, mortgage or liens without recourse or warranty and (ii) such
release shall not in any manner discharge, affect or impair the Obligations or
any security interest, mortgage or lien upon (or obligations of any Borrower or
Guarantor in respect of) the Collateral retained by such Borrower or Guarantor.
(d) Agent shall have no obligation whatsoever to any Lender or any other
Person to investigate, confirm or assure that the Collateral exists or is owned
by any Borrower or Guarantor or is cared for, protected or insured or has been
encumbered, or that any particular items of Collateral meet the eligibility
criteria applicable in respect of the Loans or Letters of Credit hereunder, or
whether any particular reserves are appropriate, or that the liens and security
interests granted to Agent pursuant hereto or any of the Financing Agreements or
otherwise have been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority, or to exercise
at all or in any particular manner or under any duty of care, disclosure or
fidelity, or to continue exercising, any of the rights, authorities and powers
granted or available to Agent in this Agreement or in any of the other Financing
Agreements, it being understood and agreed that in respect of the Collateral, or
any act, omission or event related thereto, subject to the other terms and
conditions contained herein, Agent may act in any manner it may deem
appropriate, in its discretion, given Agent's own interest in the Collateral as
a Lender and that Agent shall have no duty or liability whatsoever to any other
Lender.
12.12 Agency for Perfection. Each Lender hereby appoints Agent and each
other Lender as agent and bailee for the purpose of perfecting the security
interests in and liens upon the Collateral of Agent in assets which, in
accordance with Article 9 of the UCC can be perfected only by possession (or
where the security interest of a secured party with possession has priority over
the security interest of another secured party) and Agent and each Lender hereby
acknowledges that it holds possession of any such Collateral for the benefit of
Agent as secured party. Should any Lender obtain possession of any such
Collateral, such Lender shall notify Agent thereof, and, promptly upon Agent's
request therefor shall deliver such Collateral to Agent or in accordance with
Agent's instructions.
12.13 Successor Agent. Agent may resign as Agent upon thirty (30) days'
notice to Lenders and Administrative Borrower. If Agent resigns under this
Agreement, the Required Lenders shall appoint from among the Lenders a successor
agent for Lenders. If no successor agent is appointed prior to the effective
date of the resignation of Agent, Agent may appoint, after consulting with
Lenders and Administrative Borrower, a successor agent from among Lenders which,
absent the occurrence and continuance of an Event of Default, shall be
acceptable to Administrative Borrower, which acceptance shall not be
unreasonably withheld or delayed. Upon the acceptance by the Lender so selected
of its appointment as successor agent hereunder, such successor agent shall
succeed to all of the rights, powers and duties of the retiring Agent and the
term "Agent" as used herein and in the other Financing Agreements shall mean
such successor agent and the retiring Agent's appointment, powers and duties as
Agent shall be terminated. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Section 12 shall inure to its benefit as to any
actions taken or omitted by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is thirty
(30) days after the date of a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nonetheless thereupon become effective and
Lenders shall perform all of the duties of Agent hereunder until such time, if
any, as the Required Lenders appoint a successor agent as provided for above.
12.14 Other Agent Designations. Agent may at any time and from time to time
determine that a Lender may, in addition, be a "Co-Agent", "Syndication Agent",
"Documentation Agent" or similar designation hereunder and enter into an
agreement with such Lender to have it so identified for purposes of this
Agreement. Any such designation shall be effective upon written notice by Agent
to Administrative Borrower of any such designation. Any Lender that is so
designated as a Co-Agent, Syndication Agent, Documentation Agent or such similar
designation by Agent shall have no right, power, obligation, liability,
responsibility or duty under this Agreement or any of the other Financing
Agreements other than those applicable to all Lenders as such. Without limiting
the foregoing, the Lenders so identified shall not have or be deemed to have any
fiduciary relationship with any Lender and no Lender shall be deemed to have
relied, nor shall any Lender rely, on a Lender so identified as a Co-Agent,
Syndication Agent, Documentation Agent or such similar designation in deciding
to enter into this Agreement or in taking or not taking action hereunder.
SECTION 13. TERM OF AGREEMENT; MISCELLANEOUS
13.1 Term.
(a) This Agreement and the other Financing Agreements shall become
effective as of the date set forth on the first page hereof and shall continue
in full force and effect for a term ending on the date five (5) years from the
date hereof (the "Renewal Date"), and from year to year thereafter, unless
sooner terminated pursuant to the terms hereof. Agent may, at its option (or
shall at the direction of any Lender in writing received by Agent at least
ninety (90) days prior to the Renewal Date or the anniversary of any Renewal
Date, as the case may be), terminate this Agreement and the other Financing
Agreements, or Administrative Borrower or any Borrower may terminate this
Agreement and the other Financing Agreements, each case, effective on the
Renewal Date or on the anniversary of the Renewal Date in any year by giving to
the other party at least sixty (60) days prior written notice; provided, that,
this Agreement and all other Financing Agreements must be terminated
simultaneously. In addition, Borrowers may terminate this Agreement at any time
upon ten (10) days prior written notice to Agent (which notice shall be
irrevocable) and Agent may, at its option, and shall at the direction of
Required Lenders, terminate this Agreement at any time upon the occurrence and
during the continuance of an Event of Default. Upon the Renewal Date or any
other effective date of termination of the Financing Agreements, Borrowers shall
pay to Agent all outstanding and unpaid Obligations and shall furnish cash
collateral to Agent (or at Agent's option, a letter of credit issued for the
account of Borrowers and at Borrowers' expense, in form and substance reasonably
satisfactory to Agent, by an issuer reasonably acceptable to Agent and payable
to Agent as beneficiary) in such amounts as Agent determines are reasonably
necessary to secure Agent and Lenders from loss, cost, damage or expense,
including attorneys' fees and expenses, in connection with any contingent
Obligations, including issued and outstanding Letter of Credit Obligations and
checks or other payments provisionally credited to the Obligations and/or as to
which Agent or any Lender has not yet received final and indefeasible payment
and any continuing obligations of Agent or any Lender pursuant to any Deposit
Account Control Agreement and for any of the Obligations arising under or in
connection with any Hedge Agreement in such amounts as the other party to such
Hedge Agreement may require (unless such Obligations arising under or in
connection with any Hedge Agreement are paid in full in cash and terminated in a
manner satisfactory to such other party). The amount of such cash collateral (or
letter of credit, as Agent may determine) as to any Letter of Credit Obligations
shall be in the amount equal to one hundred five (105%) percent of the amount of
the Letter of Credit Obligations plus the amount of any fees and expenses
payable in connection therewith through the end of the latest expiration date of
the Letters of Credit giving rise to such Letter of Credit Obligations. Such
payments in respect of the Obligations and cash collateral shall be remitted by
wire transfer in Federal funds to the Agent Payment Account or such other bank
account of Agent, as Agent may, in its discretion, designate in writing to
Administrative Borrower for such purpose. Interest shall be due until and
including the next Business Day, if the amounts so paid by Borrowers to the
Agent Payment Account or other bank account designated by Agent are received in
such bank account later than 12:00 noon, Chicago time.
(b) No termination of the Commitments, this Agreement or any of the other
Financing Agreements shall relieve or discharge any Borrower or Guarantor of its
respective duties, obligations and covenants under this Agreement or any of the
other Financing Agreements until all Obligations (other than contingent
indemnification obligations not asserted) have been fully and finally discharged
and paid, and Agent's continuing security interest in the Collateral and the
rights and remedies of Agent and Lenders hereunder, under the other Financing
Agreements and applicable law, shall remain in effect until all such Obligations
(other than contingent indemnification obligations not asserted) have been fully
and finally discharged and paid. Accordingly, each Borrower and Guarantor waives
any rights it may have under the UCC to demand the filing of termination
statements with respect to the Collateral and Agent shall not be required to
send such termination statements to Borrowers or Guarantors, or to file them
with any filing office, unless and until this Agreement shall have been
terminated in accordance with its terms and all Obligations (other than
contingent indemnification obligations not asserted) paid and satisfied in full
in immediately available funds.
(c) If for any reason this Agreement is terminated prior to the Renewal
Date, in view of the impracticality and extreme difficulty of ascertaining
actual damages and by mutual agreement of the parties as to a reasonable
calculation of Agent's and each Lender's lost profits as a result thereof,
Borrowers agree to pay to Agent, for the benefit of Lenders, upon the effective
date of such termination, an early termination fee in the amount equal to
Amount Period
(i) 1.0% of Maximum Credit From the date hereof to and including the first
anniversary of the date hereof
(ii) 0.50% of Maximum Credit From and after the first anniversary of the date
hereof to and including the second anniversary of
the date hereof
(iii) 0.25% of Maximum Credit From and after the second anniversary of the date
hereof but prior to the end of the then current
term (excluding the last 30 days of the then
current term).
Such early termination fee shall be presumed to be the amount of damages
sustained by Agent and Lenders as a result of such early termination and
Borrowers and Guarantors agree that it is reasonable under the circumstances
currently existing (including, but not limited to, the borrowings that are
reasonably expected by Borrowers hereunder and the interest, fees and other
charges that are reasonably expected to be received by Agent and Lenders
pursuant to the Credit Facility). In addition, Agent and Lenders shall be
entitled to such early termination fee upon the occurrence of any Event of
Default described in Sections 10.1(g) and 10.1(h) hereof, even if Agent and
Lenders do not exercise the right to terminate this Agreement, but elect, at
their option, to provide financing to any Borrower or permit the use of cash
collateral under the United States Bankruptcy Code. The early termination fee
provided for in this Section 13.1 shall be deemed included in the Obligations.
13.2 Interpretative Provisions.
(a) All terms used herein which are defined in Article 1, Article 8 or
Article 9 of the UCC shall have the meanings given therein unless otherwise
defined in this Agreement.
(b) All references to the plural herein shall also mean the singular and to
the singular shall also mean the plural unless the context otherwise requires.
(c) All references to any Borrower, Guarantor, Agent and Lenders pursuant
to the definitions set forth in the recitals hereto, or to any other person
herein, shall include their respective successors and assigns.
(d) The words "hereof", "herein", "hereunder", "this Agreement" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not any particular provision of this Agreement and as this Agreement
now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
(e) The word "including" when used in this Agreement shall mean "including,
without limitation" and the word "will" when used in this Agreement shall be
construed to have the same meaning and effect as the word "shall".
(f) An Event of Default shall exist or continue or be continuing until such
Event of Default is waived in accordance with Section 11.3 or is cured in a
manner satisfactory to Agent, if such Event of Default is capable of being cured
as determined by Agent.
(g) All references to the term "good faith" used herein when applicable to
Agent or any Lender shall mean, notwithstanding anything to the contrary
contained herein or in the UCC, honesty in fact in the conduct or transaction
concerned. Borrowers and Guarantors shall have the burden of proving any lack of
good faith on the part of Agent or any Lender alleged by any Borrower or
Guarantor at any time.
(h) Any accounting term used in this Agreement shall have, unless otherwise
specifically provided herein, the meaning customarily given in accordance with
GAAP, and all financial computations hereunder shall be computed unless
otherwise specifically provided herein, in accordance with GAAP as consistently
applied and using the same method for inventory valuation as used in the
preparation of the financial statements of Parent most recently received by
Agent prior to the date hereof. Notwithstanding anything to the contrary
contained in GAAP or any interpretations or other pronouncements by the
Financial Accounting Standards Board or otherwise, the term "unqualified
opinion" as used herein to refer to opinions or reports provided by accountants
shall mean an opinion or report that is unqualified as to going concern or the
scope of the audit.
(i) In the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including", the words "to" and
"until" each mean "to but excluding" and the word "through" means "to and
including".
(j) Unless otherwise expressly provided herein, (i) references herein to
any agreement, document or instrument shall be deemed to include all subsequent
amendments, modifications, supplements, extensions, renewals, restatements or
replacements with respect thereto, but only to the extent the same are not
prohibited by the terms hereof or of any other Financing Agreement, and (ii)
references to any statute or regulation are to be construed as including all
statutory and regulatory provisions consolidating, amending, replacing,
recodifying, supplementing or interpreting the statute or regulation.
(k) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
(l) This Agreement and other Financing Agreements may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
(m) This Agreement and the other Financing Agreements are the result of
negotiations among and have been reviewed by counsel to Agent and the other
parties, and are the products of all parties. Accordingly, this Agreement and
the other Financing Agreements shall not be construed against Agent or Lenders
merely because of Agent's or any Lender's involvement in their preparation.
13.3 Notices.
(a) All notices, requests and demands hereunder shall be in writing and
deemed to have been given or made: if delivered in person, immediately upon
delivery; if by telex, telegram or facsimile transmission, immediately upon
sending and upon confirmation of receipt; if by nationally recognized overnight
courier service with instructions to deliver the next Business Day, one (1)
Business Day after sending; and if by certified mail, return receipt requested,
five (5) days after mailing. Notices delivered through electronic communications
shall be effective to the extent set forth in Section 13.3(b) below. All
notices, requests and demands upon the parties are to be given to the following
addresses (or to such other address as any party may designate by notice in
accordance with this Section):
If to any Borrower or Guarantor: c/o Keystone Consolidated Industries, Inc.
5430 LBJ Freeway, Suite 1740
Dallas, Texas 75240
Attention: Vice President and Chief
Financial Officer
Telephone No.: (972) 458-0028
Telecopy No.: (972) 448-1445
If to Agent: Wachovia Capital Finance Corporation
(Central)
150 South Wacker Drive, Suite 2200
Chicago, Illinois 60606
Attention: Account Officer: Keystone Consolidated
Industries, Inc.
Telephone No.:(312) 332-0420
Telecopy No.: (312) 332-0424
(b) Notices and other communications to Agent and Lenders hereunder may be
delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to procedures approved by Agent or as
otherwise determined by Agent, provided, that, the foregoing shall not apply to
notices to any Lender pursuant to Section 2 hereof if such Lender, as
applicable, has notified Agent that it is incapable of receiving notices under
such Section by electronic communication. Unless Agent otherwise requires, (i)
notices and other communications sent to an e-mail address shall be deemed
received upon the sender's receipt of an acknowledgement from the intended
recipient (such as by the "return receipt requested" function, as available,
return e-mail or other written acknowledgement), provided, that, if such notice
or other communication is not given during the normal business hours of the
recipient, such notice shall be deemed to have been sent at the opening of
business on the next Business Day for the recipient, and (ii) notices or
communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail address
as described in the foregoing clause (i) of notification that such notice or
communications is available and identifying the website address therefor.
13.4 Partial Invalidity. If any provision of this Agreement is held to be
invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Agreement as a whole, but this Agreement shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.
13.5 Confidentiality.
(a) Agent and each Lender shall use all commercially reasonable efforts to
keep confidential, in accordance with its customary procedures for handling
confidential information and safe and sound lending practices, any non-public
information supplied to it by any Borrower pursuant to this Agreement, provided,
that, nothing contained herein shall limit the disclosure of any such
information: (i) to the extent required by statute, rule, regulation, subpoena
or court order, (ii) to bank examiners and other regulators, auditors and/or
accountants, in connection with any litigation to which Agent or such Lender is
a party, (iii) to any Lender or Participant (or prospective Lender or
Participant) or to any Affiliate of any Lender so long as such Lender or
Participant (or prospective Lender or Participant) or Affiliate shall have been
instructed to treat such information as confidential in accordance with this
Section 13.5, or (iv) to counsel for Agent or any Lender or Participant (or
prospective Lender or Participant).
(b) In the event that Agent or any Lender receives a request or demand to
disclose any confidential information pursuant to any subpoena or court order,
Agent or such Lender, as the case may be, agrees (i) to the extent permitted by
applicable law or if permitted by applicable law, to the extent Agent or such
Lender determines in good faith that it will not create any risk of liability to
Agent or such Lender, Agent or such Lender will promptly notify Administrative
Borrower of such request so that Administrative Borrower may seek a protective
order or other appropriate relief or remedy and (ii) if disclosure of such
information is required, disclose such information and, subject to reimbursement
by Borrowers of Agent's or such Lender's expenses, cooperate with Administrative
Borrower in the reasonable efforts to obtain an order or other reliable
assurance that confidential treatment will be accorded to such portion of the
disclosed information which Administrative Borrower so designates, to the extent
permitted by applicable law or if permitted by applicable law, to the extent
Agent or such Lender determines in good faith that it will not create any risk
of liability to Agent or such Lender.
(c) In no event shall this Section 13.5 or any other provision of this
Agreement, any of the other Financing Agreements or applicable law be deemed:
(i) to apply to or restrict disclosure of information that has been or is made
public by any Borrower, Guarantor or any third party or otherwise becomes
generally available to the public other than as a result of a disclosure in
violation hereof, (ii) to apply to or restrict disclosure of information that
was or becomes available to Agent or any Lender (or any Affiliate of any Lender)
on a non-confidential basis from a person other than a Borrower or Guarantor,
(iii) to require Agent or any Lender to return any materials furnished by a
Borrower or Guarantor to Agent or a Lender or prevent Agent or a Lender from
responding to routine informational requests in accordance with the Code of
Ethics for the Exchange of Credit Information promulgated by The Robert Morris
Associates or other applicable industry standards relating to the exchange of
credit information. The obligations of Agent and Lenders under this Section 13.5
shall supersede and replace the obligations of Agent and Lenders under any
confidentiality letter signed prior to the date hereof or any other arrangements
concerning the confidentiality of information provided by any Borrower or
Guarantor to Agent or any Lender. In addition, Agent and Lenders may disclose
information relating to the Credit Facility to Gold Sheets and other similar
bank trade publications, with such information to consist of deal terms and
other information customarily found in such publications.
13.6 Successors. This Agreement, the other Financing Agreements and any
other document referred to herein or therein shall be binding upon and inure to
the benefit of and be enforceable by Agent, Lenders, Borrowers, Guarantors and
their respective successors and assigns, except that Borrower may not assign its
rights under this Agreement, the other Financing Agreements and any other
document referred to herein or therein without the prior written consent of
Agent and Lenders. Any such purported assignment without such express prior
written consent shall be void. No Lender may assign its rights and obligations
under this Agreement without the prior written consent of Agent, except as
provided in Section 13.7 below. The terms and provisions of this Agreement and
the other Financing Agreements are for the purpose of defining the relative
rights and obligations of Borrowers, Guarantors, Agent and Lenders with respect
to the transactions contemplated hereby and there shall be no third party
beneficiaries of any of the terms and provisions of this Agreement or any of the
other Financing Agreements.
13.7 Assignments; Participations.
(a) Each Lender may, with the prior written consent of Agent, assign all
or, if less than all, a portion equal to at least $5,000,000 in the aggregate
for the assigning Lender, of such rights and obligations under this Agreement to
one or more Eligible Transferees (but not including for this purpose any
assignments in the form of a participation), each of which assignees shall
become a party to this Agreement as a Lender by execution of an Assignment and
Acceptance; provided, that, (i) such transfer or assignment will not be
effective until recorded by Agent on the Register and (ii) Agent shall have
received for its sole account payment of a processing fee from the assigning
Lender or the assignee in the amount of $5,000.
(b) Agent shall maintain a register of the names and addresses of Lenders,
their Commitments and the principal amount of their Loans (the "Register").
Agent shall also maintain a copy of each Assignment and Acceptance delivered to
and accepted by it and shall modify the Register to give effect to each
Assignment and Acceptance. The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and any Borrowers, Guarantors,
Agent and Lenders may treat each Person whose name is recorded in the Register
as a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by Administrative Borrower and any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(c) Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in each Assignment and Acceptance, the assignee
thereunder shall be a party hereto and to the other Financing Agreements and, to
the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, have the rights and obligations
(including, without limitation, the obligation to participate in Letter of
Credit Obligations) of a Lender hereunder and thereunder and the assigning
Lender shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement.
(d) By execution and delivery of an Assignment and Acceptance, the assignor
and assignee thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such Assignment and
Acceptance, the assigning Lender makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or any of the other Financing
Agreements or the execution, legality, enforceability, genuineness, sufficiency
or value of this Agreement or any of the other Financing Agreements furnished
pursuant hereto, (ii) the assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any
Borrower, Guarantor or any of their Subsidiaries or the performance or
observance by any Borrower or Guarantor of any of the Obligations; (iii) such
assignee confirms that it has received a copy of this Agreement and the other
Financing Agreements, together with such other documents and information it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance, (iv) such assignee will, independently and
without reliance upon the assigning Lender, Agent and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement and the
other Financing Agreements, (v) such assignee appoints and authorizes Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement and the other Financing Agreements as are delegated to Agent by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto, and (vi) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement and the
other Financing Agreements are required to be performed by it as a Lender. Agent
and Lenders may furnish any information concerning any Borrower or Guarantor in
the possession of Agent or any Lender from time to time to assignees and
Participants, subject to the provisions of Section 13.5.
(e) Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement and the other Financing Agreements (including, without limitation, all
or a portion of its Commitments and the Loans owing to it and its participation
in the Letter of Credit Obligations, without the consent of Agent or the other
Lenders); provided, that, (i) such Lender's obligations under this Agreement
(including, without limitation, its Commitment hereunder) and the other
Financing Agreements shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, and Borrowers, Guarantors, the other Lenders and Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other Financing
Agreements, and (iii) the Participant shall not have any rights under this
Agreement or any of the other Financing Agreements (the Participant's rights
against such Lender in respect of such participation to be those set forth in
the agreement executed by such Lender in favor of the Participant relating
thereto) and all amounts payable by any Borrower or Guarantor hereunder shall be
determined as if such Lender had not sold such participation.
(f) Nothing in this Agreement shall prevent or prohibit any Lender from
pledging its Loans hereunder to a Federal Reserve Bank in support of borrowings
made by such Lenders from such Federal Reserve Bank; provided, that, no such
pledge shall release such Lender from any of its obligations hereunder or
substitute any such pledgee for such Lender as a party hereto.
(g) Borrowers and Guarantors shall assist Agent or any Lender permitted to
sell assignments or participations under this Section 13.7 in whatever manner
reasonably necessary in order to enable or effect any such assignment or
participation, including (but not limited to) the execution and delivery of any
and all agreements, notes and other documents and instruments as shall be
reasonably requested and the preparation and delivery of offering materials,
projections and other informational materials, appraisals or other documents
for, and the participation of relevant management in meetings and conference
calls with, potential Lenders or Participants. Borrowers shall certify the
correctness, completeness and accuracy, in all material respects, of all
descriptions of Borrowers and Guarantors and their affairs provided, prepared or
reviewed by any Borrower or Guarantor that are contained in any selling
materials and all other information provided by it and included in such
materials.
13.8 Entire Agreement. This Agreement, the other Financing Agreements, any
supplements hereto or thereto, and any instruments or documents delivered or to
be delivered in connection herewith or therewith represents the entire agreement
and understanding concerning the subject matter hereof and thereof between the
parties hereto, and supersede all other prior agreements, understandings,
negotiations and discussions, representations, warranties, commitments,
proposals, offers and contracts concerning the subject matter hereof, whether
oral or written. In the event of any inconsistency between the terms of this
Agreement and any schedule or exhibit hereto, the terms of this Agreement shall
govern.
13.9 USA Patriot Act. Each Lender subject to the USA PATRIOT Act (Title III
of Pub.L. 107-56 (signed into law October 26, 2001) (the "Act") hereby notifies
Borrowers and Guarantors that pursuant to the requirements of the Act, it is
required to obtain, verify and record information that identifies each person or
corporation who opens an account and/or enters into a business relationship with
it, which information includes the name and address of Borrowers and Guarantors
and other information that will allow such Lender to identify such person in
accordance with the Act and any other applicable law. Borrowers and Guarantors
are hereby advised that any Loans or Letters of Credit hereunder are subject to
satisfactory results of such verification.
13.10 Counterparts, Etc. This Agreement or any of the other Financing
Agreements may be executed in any number of counterparts, each of which shall be
an original, but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Agreement or any of the
other Financing Agreements by telefacsimile or other electronic method of
transmission shall have the same force and effect as the delivery of an original
executed counterpart of this Agreement or any of such other Financing
Agreements. Any party delivering an executed counterpart of any such agreement
by telefacsimile or other electronic method of transmission shall also deliver
an original executed counterpart, but the failure to do so shall not affect the
validity, enforceability or binding effect of such agreement.
SECTION 14. CROSS-GUARANTY
14.1 Cross-Guaranty. Each Borrower hereby agrees that such Borrower is
jointly and severally liable for, and hereby absolutely and unconditionally
guarantees to Agent and Lenders and their respective successors and assigns, the
full and prompt payment (whether at stated maturity, by acceleration or
otherwise) and performance of, all Obligations owed or hereafter owing to Agent
and Lenders by each other Borrower. Each Borrower agrees that its guaranty
obligation hereunder is a continuing guaranty of payment and performance and not
of collection, that its obligations under this Section 14 shall not be
discharged until payment and performance, in full, of the Obligations (other
than contingent indemnification obligations not asserted) has occurred, and that
its obligations under this Section 14 shall be absolute and unconditional,
irrespective of, and unaffected by,
(a) the genuineness, validity, regularity, enforceability or any future
amendment of, or change in, this Agreement, any other Financing Agreement or any
other agreement, document or instrument to which any Borrower is or may become a
party;
(b) the absence of any action to enforce this Agreement (including this
Section 14) or any other Financing Agreement or the waiver or consent by Agent
and Lenders with respect to any of the provisions thereof;
(c) the existence, value or condition of, or failure to perfect its lien
against, any security for the Obligations or any action, or the absence of any
action, by Agent and Lenders in respect thereof (including the release of any
such security);
(d) the insolvency of any Borrower or Guarantor; or
(e) any other action or circumstances that might otherwise constitute a
legal or equitable discharge or defense of a surety or guarantor other than
payment in full of the Obligations (other than contingent indemnification
obligations not asserted).
Each Borrower shall be regarded, and shall be in the same position, as
principal debtor with respect to the Obligations guaranteed hereunder.
14.2 Waivers by Borrowers. Each Borrower expressly waives all rights it may
have now or in the future under any statute, or at common law, or at law or in
equity, or otherwise, to compel Agent or Lenders to marshal assets or to proceed
in respect of the Obligations guaranteed hereunder against any other Borrower or
Guarantor, any other party or against any security for the payment and
performance of the Obligations before proceeding against, or as a condition to
proceeding against, such Borrower. It is agreed among each Borrower, Agent and
Lenders that the foregoing waivers are of the essence of the transaction
contemplated by this Agreement and the other Financing Agreements and that, but
for the provisions of this Section 14 and such waivers, Agent and Lenders would
decline to enter into this Agreement.
14.3 Benefit of Guaranty. Each Borrower agrees that the provisions of this
Section 14 are for the benefit of Agent and Lenders and their respective
successors, transferees, endorsees and assigns, and nothing herein contained
shall impair, as between any other Borrower and Agent or Lenders, the
obligations of such other Borrower under the Financing Agreements.
14.4 Waiver of Subrogation, Etc. Notwithstanding anything to the contrary
in this Agreement or in any other Financing Agreement, and except as set forth
in Section 14.9, each Borrower hereby expressly and irrevocably waives any and
all rights at law or in equity to subrogation, reimbursement, exoneration,
contribution, indemnification or set off and any and all defenses available to a
surety, guarantor or accommodation co-obligor until payment in full of the
Obligations (other than contingent indemnification obligations not asserted) and
termination of all Commitments. Each Borrower acknowledges and agrees that this
waiver is intended to benefit Agent and Lenders and shall not limit or otherwise
affect such Borrower's liability hereunder or the enforceability of this Section
14, and that Agent, Lenders and their respective successors and assigns are
intended third party beneficiaries of the waivers and agreements set forth in
this Section 14.4.
14.5 Election of Remedies. If Agent or any Lender may, under applicable
law, proceed to realize its benefits under any of the Financing Agreements
giving Agent or such Lender a lien upon any Collateral, whether owned by any
Borrower or by any other Person, either by judicial foreclosure or by
non-judicial sale or enforcement, Agent or any Lender may, at its sole option,
determine which of its remedies or rights it may pursue without affecting any of
its rights and remedies under this Section 14. If, in the exercise of any of its
rights and remedies, Agent or any Lender shall forfeit any of its rights or
remedies, including its right to enter a deficiency judgment against any
Borrower or any other Person, whether because of any applicable laws pertaining
to "election of remedies" or the like, each Borrower hereby consents to such
action by Agent or such Lender and waives any claim based upon such action, even
if such action by Agent or such Lender shall result in a full or partial loss of
any rights of subrogation that each Borrower might otherwise have had but for
such action by Agent or such Lender. Any election of remedies that results in
the denial or impairment of the right of Agent or any Lender to seek a
deficiency judgment against any Borrower shall not impair any other Borrower's
obligation to pay the full amount of the Obligations. In the event Agent or any
Lender shall bid at any foreclosure or trustee's sale or at any private sale
permitted by law or the Financing Agreements, Agent or such Lender may bid all
or less than the amount of the Obligations and the amount of such bid need not
be paid by Agent or such Lender but shall be credited against the Obligations.
The amount of the successful bid at any such sale, whether Agent, Lender or any
other party is the successful bidder, shall be conclusively deemed to be the
fair market value of the Collateral and the difference between such bid amount
and the remaining balance of the Obligations shall be conclusively deemed to be
the amount of the Obligations guaranteed under this Section 14, notwithstanding
that any present or future law or court decision or ruling may have the effect
of reducing the amount of any deficiency claim to which Agent or any Lender
might otherwise be entitled but for such bidding at any such sale.
14.6 Limitation. Notwithstanding any provision herein contained to the
contrary, each Borrower's liability under this Section 14 (which liability is in
any event in addition to amounts for which such Borrower is primarily liable
under Section 1) shall be limited to an amount not to exceed as of any date of
determination the greater of:
(a) the net amount of all Loans advanced to any other Borrower under this
Agreement and then re-loaned or otherwise transferred to, or for the benefit of,
such Borrower; and
(b) the amount that could be claimed by Agent and Lenders from such
Borrower under this Section 14 without rendering such claim voidable or
avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law after taking into account, among other
things, such Borrower's right of contribution and indemnification from each
other Borrower under Section 14.7.
14.7 Contribution with Respect to Guaranty Obligations.
(a) To the extent that any Borrower shall make a payment under this Section
14 of all or any of the Obligations (other than Loans made to that Borrower for
which it is primarily liable) (a "Guarantor Payment") that, taking into account
all other Guarantor Payments then previously or concurrently made by any other
Borrower, exceeds the amount that such Borrower would otherwise have paid if
each Borrower had paid the aggregate Obligations satisfied by such Guarantor
Payment in the same proportion that such Borrower's "Allocable Amount" (as
defined below) (as determined immediately prior to such Guarantor Payment) bore
to the aggregate Allocable Amounts of each of the Borrowers as determined
immediately prior to the making of such Guarantor Payment, then, following
payment in full in cash of the Obligations (other than contingent
indemnification obligations not asserted) and termination of the Commitments,
such Borrower shall be entitled to receive contribution and indemnification
payments from, and be reimbursed by, each other Borrower for the amount of such
excess, pro rata based upon their respective Allocable Amounts in effect
immediately prior to such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of any Borrower
shall be equal to the maximum amount of the claim that could then be recovered
from such Borrower under this Section 14 without rendering such claim voidable
or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law.
(c) This Section 14.7 is intended only to define the relative rights of
Borrowers and nothing set forth in this Section 14.7 is intended to or shall
impair the obligations of Borrowers, jointly and severally, to pay any amounts
as and when the same shall become due and payable in accordance with the terms
of this Agreement, including Section 14.1. Nothing contained in this Section
14.7 shall limit the liability of any Borrower to pay the Loans made directly or
indirectly to that Borrower and accrued interest, fees and expenses with respect
thereto for which such Borrower shall be primarily liable.
(d) The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Borrower to which such
contribution and indemnification is owing.
(e) The rights of the indemnifying Borrowers against other Credit Parties
under this Section 14.7 shall be exercisable upon the full and indefeasible
payment of the Obligations (other than contingent indemnification obligations
not asserted) and the termination of the Commitments subject to Section 14.9.
14.8 Liability Cumulative. The liability of Borrowers under this Section 14
is in addition to and shall be cumulative with all liabilities of each Borrower
to Agent and Lenders under this Agreement and the other Financing Agreements to
which such Borrower is a party or in respect of any Obligations or obligation of
the other Borrower, without any limitation as to amount, unless the instrument
or agreement evidencing or creating such other liability specifically provides
to the contrary.
14.9 Subrogation. Upon payment in full of the Obligations (other than
contingent indemnification obligations not asserted) and the termination of the
Commitments, each Borrower shall be subrogated to the rights of Agent and
Lenders to the extent of any payments made by such Borrower pursuant to this
Section 14. Notwithstanding anything in this Section 14 to the contrary, to the
extent any Borrower acquires rights to subrogation, indemnification or
contribution under this Section 14 and such rights adversely affect Agent's or
any Lender's rights to exercise rights and remedies under the Financing
Agreements or to receive payment of the Obligations, then at Agent's request,
such Borrower or Borrowers shall execute an agreement pursuant to which such
Borrower or Borrowers waive their rights of subrogation, indemnification or
contribution under this Section 14.
[Signature Pages Follow]
[Signature Page to Loan and Security Agreement]
IN WITNESS WHEREOF, Agent, Lenders and Borrowers have caused these presents
to be duly executed as of the day and year first above written.
BORROWERS:
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
By:
-----------------------------------------------------------
Title:
--------------------------------------------------------
Name:
---------------------------------------------------------
KEYSTONE WIRE PRODUCTS INC.
By:
-----------------------------------------------------------
Title:
--------------------------------------------------------
Name:
---------------------------------------------------------
ENGINEERED WIRE PRODUCTS, INC.
By:
-----------------------------------------------------------
Title:
--------------------------------------------------------
Name:
---------------------------------------------------------
F V STEEL AND WIRE COMPANY
By:
-----------------------------------------------------------
Title:
--------------------------------------------------------
Name:
---------------------------------------------------------
AGENT AND LENDERS:
-----------------
WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL), as Agent and a Lender
By:
-----------------------------------------------------------
Title:
--------------------------------------------------------
Name:
---------------------------------------------------------
EXHIBIT A
to
LOAN AND SECURITY AGREEMENT
ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and Acceptance")
dated as of _____________, 200_ is made between ________________________ (the
"Assignor") and ____________________ (the "Assignee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Wachovia Capital Finance Corporation (Central), in its capacity as
agent pursuant to the Loan Agreement (as hereinafter defined) acting for and on
behalf of the financial institutions which are parties thereto as lenders (in
such capacity, "Agent"), and the financial institutions which are parties to the
Loan Agreement as lenders (individually, each a "Lender" and collectively,
"Lenders") have entered or are about to enter into financing arrangements
pursuant to which Agent and Lenders may make loans and advances and provide
other financial accommodations to Keystone Consolidated Industries, Inc.,
Keystone Wire Products Inc., Engineered Wire Products, Inc. and F V Steel and
Wire Company (collectively, "Borrowers") as set forth in the Loan and Security
Agreement, dated August 31, 2005, by and among Borrowers, certain of their
affiliates, Agent and Lenders (as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced, the
"Loan Agreement"), and the other agreements, documents and instruments referred
to therein or at any time executed and/or delivered in connection therewith or
related thereto (all of the foregoing, together with the Loan Agreement, as the
same now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced, being collectively referred to herein as the
"Financing Agreements");
WHEREAS, as provided under the Loan Agreement, Assignor committed to making
Loans (the "Committed Loans") to Borrowers in an aggregate amount not to exceed
$___________ (the "Commitment");
WHEREAS, Assignor wishes to assign to Assignee [part of the] [all] rights
and obligations of Assignor under the Loan Agreement in respect of its
Commitment in an amount equal to $______________ (the "Assigned Commitment
Amount") on the terms and subject to the conditions set forth herein and
Assignee wishes to accept assignment of such rights and to assume such
obligations from Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and Acceptance,
Assignor hereby sells, transfers and assigns to Assignee, and Assignee hereby
purchases, assumes and undertakes from Assignor, without recourse and without
representation or warranty (except as provided in this Assignment and
Acceptance) an interest in (i) the Commitment and each of the Committed Loans of
Assignor and (ii) all related rights, benefits, obligations, liabilities and
indemnities of the Assignor under and in connection with the Loan Agreement and
the other Financing Agreements, so that after giving effect thereto, the
Commitment of Assignee shall be as set forth below and the Pro Rata Share of
Assignee shall be _______ (__%) percent.
(b) With effect on and after the Effective Date (as defined in Section 5
hereof), Assignee shall be a party to the Loan Agreement and succeed to all of
the rights and be obligated to perform all of the obligations of a Lender under
the Loan Agreement, including the requirements concerning confidentiality and
the payment of indemnification, with a Commitment in an amount equal to the
Assigned Commitment Amount. Assignee agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Loan Agreement
are required to be performed by it as a Lender. It is the intent of the parties
hereto that the Commitment of Assignor shall, as of the Effective Date, be
reduced by an amount equal to the Assigned Commitment Amount and Assignor shall
relinquish its rights and be released from its obligations under the Loan
Agreement to the extent such obligations have been assumed by Assignee;
provided, that, Assignor shall not relinquish its rights under Sections 2.2,
6.4, 6.9, 11.5 and 12.5 of the Loan Agreement to the extent such rights relate
to the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set forth herein,
on the Effective Date Assignee's Commitment will be $_____________.
(d) After giving effect to the assignment and assumption set forth herein,
on the Effective Date Assignor's Commitment will be $______________ (as such
amount may be further reduced by any other assignments by Assignor on or after
the date hereof).
2. Payments.
(a) As consideration for the sale, assignment and transfer contemplated in
Section 1 hereof, Assignee shall pay to Assignor on the Effective Date in
immediately available funds an amount equal to $____________, representing
Assignee's Pro Rata Share of the principal amount of all Committed Loans.
(b) Assignee shall pay to Agent the processing fee in the amount specified
in Section 13.7(a) of the Loan Agreement.
3. Reallocation of Payments. Any interest, fees and other payments accrued
to the Effective Date with respect to the Commitment, Committed Loans and
outstanding Letters of Credit shall be for the account of Assignor. Any
interest, fees and other payments accrued on and after the Effective Date with
respect to the Assigned Commitment Amount shall be for the account of Assignee.
Each of Assignor and Assignee agrees that it will hold in trust for the other
party any interest, fees and other amounts which it may receive to which the
other party is entitled pursuant to the preceding sentence and pay to the other
party any such amounts which it may receive promptly upon receipt.
4. Independent Credit Decision. Assignee acknowledges that it has received
a copy of the Loan Agreement and the Schedules and Exhibits thereto, together
with copies of the most recent financial statements of Borrowers and their
Subsidiaries, and such other documents and information as it has deemed
appropriate to make its own credit and legal analysis and decision to enter into
this Assignment and Acceptance and agrees that it will, independently and
without reliance upon Assignor, Agent or any Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit and legal decisions in taking or not taking action under the Loan
Agreement.
5. Effective Date; Notices.
(a) As between Assignor and Assignee, the effective date for this
Assignment and Acceptance shall be _______________, 200_ (the "Effective Date");
provided, that, the following conditions precedent have been satisfied on or
before the Effective Date:
(i)......this Assignment and Acceptance shall be executed and delivered by
Assignor and Assignee;
(ii).....the consent of Agent as required for an effective assignment of
the Assigned Commitment Amount by Assignor to Assignee shall have been duly
obtained and shall be in full force and effect as of the Effective Date;
(iii)....written notice of such assignment, together with payment
instructions, addresses and related information with respect to Assignee, shall
have been given to Administrative Borrower and Agent;
(iv).....Assignee shall pay to Assignor all amounts due to Assignor under
this Assignment and Acceptance; and
(v)......the processing fee referred to in Section 2(b) hereof shall have
been paid to Agent.
(b) Promptly following the execution of this Assignment and Acceptance,
Assignor shall deliver to Administrative Borrower and Agent for acknowledgment
by Agent, a Notice of Assignment in the form attached hereto as Schedule 1.
6. Agent. [INCLUDE ONLY IF ASSIGNOR IS AN AGENT]
(a) Assignee hereby appoints and authorizes Assignor in its capacity as
Agent to take such action as agent on its behalf to exercise such powers under
the Loan Agreement as are delegated to Agent by Lenders pursuant to the terms of
the Loan Agreement.
(b) Assignee shall assume no duties or obligations held by Assignor in its
capacity as Agent under the Loan Agreement.]
7. Withholding Tax. Assignee (a) represents and warrants to Assignor, Agent
and Borrowers that under applicable law and treaties no tax will be required to
be withheld by Assignee, Agent or Borrowers with respect to any payments to be
made to Assignee hereunder or under any of the Financing Agreements, (b) agrees
to furnish (if it is organized under the laws of any jurisdiction other than the
United States or any State thereof) to Agent and Borrowers prior to the time
that Agent or Borrowers are required to make any payment of principal, interest
or fees hereunder, duplicate executed originals of either U.S. Internal Revenue
Service Form W-8BEN or W-8ECI, as applicable (wherein Assignee claims
entitlement to the benefits of a tax treaty that provides for a complete
exemption from U.S. federal income withholding tax on all payments hereunder)
and agrees to provide new such forms upon the expiration of any previously
delivered form or comparable statements in accordance with applicable U.S. law
and regulations and amendments thereto, duly executed and completed by Assignee,
and (c) agrees to comply with all applicable U.S. laws and regulations with
regard to such withholding tax exemption.
8. Representations and Warranties.
(a) Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any security interest, lien, encumbrance or other
adverse claim, (ii) it is duly organized and existing and it has the full power
and authority to take, and has taken, all action necessary to execute and
deliver this Assignment and Acceptance and any other documents required or
permitted to be executed or delivered by it in connection with this Assignment
and Acceptance and to fulfill its obligations hereunder, (iii) no notices to, or
consents, authorizations or approvals of, any Person are required (other than
any already given or obtained) for its due execution, delivery and performance
of this Assignment and Acceptance, and apart from any agreements or undertakings
or filings required by the Loan Agreement, no further action by, or notice to,
or filing with, any Person is required of it for such execution, delivery or
performance, and (iv) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of
Assignor, enforceable against Assignor in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles.
(b) Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or any of the other Financing
Agreements or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Agreement or any other instrument or document
furnished pursuant thereto. Assignor makes no representation or warranty in
connection with, and assumes no responsibility with respect to, the solvency,
financial condition or statements of Borrowers, Guarantors or any of their
respective Affiliates, or the performance or observance by Borrowers, Guarantors
or any other Person, of any of its respective obligations under the Loan
Agreement or any other instrument or document furnished in connection therewith.
(c) Assignee represents and warrants that (i) it is duly organized and
existing and it has full power and authority to take, and has taken, all action
necessary to execute and deliver this Assignment and Acceptance and any other
documents required or permitted to be executed or delivered by it in connection
with this Assignment and Acceptance, and to fulfill its obligations hereunder,
(ii) no notices to, or consents, authorizations or approvals of, any Person are
required (other than any already given or obtained) for its due execution,
delivery and performance of this Assignment and Acceptance, and apart from any
agreements or undertakings or filings required by the Loan Agreement, no further
action by, or notice to, or filing with, any Person is required of it for such
execution, delivery or performance; and (iii) this Assignment and Acceptance has
been duly executed and delivered by it and constitutes the legal, valid and
binding obligation of Assignee, enforceable against Assignee in accordance with
the terms hereof, subject, as to enforcement, to bankruptcy, insolvency,
moratorium, reorganization and other laws of general application relating to or
affecting creditors' rights to general equitable principles.
9. Further Assurances. Assignor and Assignee each hereby agree to execute
and deliver such other instruments, and take such other action, as either party
may reasonably request in connection with the transactions contemplated by this
Assignment and Acceptance, including the delivery of any notices or other
documents or instruments to Borrowers or Agent, which may be required in
connection with the assignment and assumption contemplated hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No failure or
delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance shall be without prejudice to any
rights with respect to any other for further breach thereof.
(b) All payments made hereunder shall be made without any set-off or
counterclaim.
(c) Assignor and Assignee shall each pay its own costs and expenses
incurred in connection with the negotiation, preparation, execution and
performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF ILLINOIS, Assignor and Assignee each
irrevocably submits to the non-exclusive jurisdiction of any State or Federal
court sitting in Cook County, Illinois over any suit, action or proceeding
arising out of or relating to this Assignment and Acceptance and irrevocably
agrees that all claims in respect of such action or proceeding may be heard and
determined in such Illinois State or Federal court. Each party to this
Assignment and Acceptance hereby irrevocably waives, to the fullest extent it
may effectively do so, the defense of an inconvenient forum to the maintenance
of such action or proceeding.
(f) ASSIGNOR AND ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH
THIS ASSIGNMENT AND ACCEPTANCE, THE LOAN AGREEMENT, ANY OF THE OTHER FINANCING
AGREEMENTS OR ANY RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, OR STATEMENTS (WHETHER ORAL OR WRITTEN).
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment and
Acceptance to be executed and delivered by their duly authorized officers as of
the date first above written.
[ASSIGNOR]
By:
--------------------------------------------------
Title:
-----------------------------------------------
[ASSIGNEE]
By:
--------------------------------------------------
Title:
-----------------------------------------------
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
___, 20__
.........
.........
.........
Attn.: .........
------------------------------
Re:
-----------------------------------------
Ladies and Gentlemen:
Wachovia Capital Finance Corporation (Central), in its capacity as agent
pursuant to the Loan Agreement (as hereinafter defined) acting for and on behalf
of the financial institutions which are parties thereto as lenders (in such
capacity, "Agent"), and the financial institutions which are parties to the Loan
Agreement as lenders (individually, each a "Lender" and collectively, "Lenders")
have entered or are about to enter into financing arrangements pursuant to which
Agent and Lenders may make loans and advances and provide other financial
accommodations to Keystone Consolidated Industries, Inc., Keystone Wire Products
Inc., Engineered Wire Products, Inc. and F V Steel and Wire Company
(collectively, "Borrowers") as set forth in the Loan and Security Agreement,
dated August 31, 2005, by and among Borrowers, certain of their affiliates,
Agent and Lenders (as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, the "Loan Agreement"),
and the other agreements, documents and instruments referred to therein or at
any time executed and/or delivered in connection therewith or related thereto
(all of the foregoing, together with the Loan Agreement, as the same now exist
or may hereafter be amended, modified, supplemented, extended, renewed, restated
or replaced, being collectively referred to herein as the "Financing
Agreements"). Capitalized terms not otherwise defined herein shall have the
respective meanings ascribed thereto in the Loan Agreement.
1. We hereby give you notice of, and request your consent to, the
assignment by __________________________ (the "Assignor") to
___________________________ (the "Assignee") such that after giving effect to
the assignment Assignee shall have an interest equal to ________ (__%) percent
of the total Commitments pursuant to the Assignment and Acceptance Agreement
attached hereto (the "Assignment and Acceptance"). We understand that the
Assignor's Commitment shall be reduced by $_____________, as the same may be
further reduced by other assignments on or after the date hereof.
2. Assignee agrees that, upon receiving the consent of Agent to such
assignment, Assignee will be bound by the terms of the Loan Agreement as fully
and to the same extent as if the Assignee were the Lender originally holding
such interest under the Loan Agreement.
3. The following administrative details apply to Assignee:
(A) Notice address:
Assignee name:
--------------------------------------------
Address:
--------------------------------------------
Attention:
--------------------------------------------
Telephone:
--------------------------------------------
Telecopier:
--------------------------------------------
(B) Payment instructions:
Account No.:
--------------------------------------------
At:
--------------------------------------------
Reference:
--------------------------------------------
Attention:
--------------------------------------------
4. You are entitled to rely upon the representations, warranties and
covenants of each of Assignor and Assignee contained in the Assignment and
Acceptance.
IN WITNESS WHEREOF, Assignor and Assignee have caused this Notice of
Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:
--------------------------------------------------
Title:
-----------------------------------------------
[NAME OF ASSIGNEE]
By:
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Title:
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ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
WACHOVIA CAPITAL FINANCE CORPORATION
(CENTRAL) as Agent
By: .........
--------------------------------------------------
Title: .........
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EXHIBIT B
to
LOAN AND SECURITY AGREEMENT
INFORMATION CERTIFICATE
EXHIBIT C
to
LOAN AND SECURITY AGREEMENT
Compliance Certificate
To: Wachovia Capital Finance Corporation (Central) as Agent
150 S. Wacker Drive, Suite 2200
Chicago, Illinois 60606
Ladies and Gentlemen:
I hereby certify to you in my capacity as an officer pursuant to Section
9.6 of the Loan Agreement (as defined below) as follows:
1. I am the duly elected Chief Financial Officer of Keystone Consolidated
Industries, Inc., Keystone Wire Products Inc., Engineered Wire Products, Inc.
and F V Steel and Wire Company (collectively, "Borrowers"). Capitalized terms
used herein without definition shall have the meanings given to such terms in
the Loan and Security Agreement, dated August 31, 2005, by and among Wachovia
Capital Finance Corporation (Central) as agent for the financial institutions
party thereto as lenders (in such capacity, "Agent") and the financial
institutions party thereto as lenders (collectively, "Lenders"), Borrowers and
certain of their affiliates (as such Loan and Security Agreement is amended,
modified or supplemented, from time to time, the "Loan Agreement").
2. I have reviewed the terms of the Loan Agreement, and have made, or have
caused to be made under my supervision, a review in reasonable detail of the
transactions and the financial condition of Borrowers and Guarantors, during the
immediately preceding fiscal month.
3. The review described in Section 2 above did not disclose the existence
during or at the end of such fiscal month, and I have no knowledge of the
existence and continuance on the date hereof, of any condition or event which
constitutes a Default or an Event of Default, except as set forth on Schedule I
attached hereto. Described on Schedule I attached hereto are the exceptions, if
any, to this Section 3 listing, in detail, the nature of the condition or event,
the period during which it has existed and the action which any Borrower or
Guarantor has taken, is taking, or proposes to take with respect to such
condition or event.
5. Attached hereto as Schedule III are the calculations used in
determining, as of the end of such fiscal month or fiscal quarter, as
applicable, whether Borrowers and Guarantors are in compliance with the
covenants set forth in Section 9.17 and Section 9.18 of the Loan Agreement for
such fiscal month or fiscal quarter, as applicable.
The foregoing certifications are made and delivered this day of
___________, 20__.
Very truly yours,
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
KEYSTONE WIRE PRODUCTS INC.
ENGINEERED WIRE PRODUCTS, INC.
F V STEEL AND WIRE COMPANY
By:
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Title:
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EXHIBIT D
to
LOAN AND SECURITY AGREEMENT
CLOSING CHECKLIST
SCHEDULE 1.37
EXISTING LENDERS
SCHEDULE 1.38
EXISTING LETTERS OF CREDIT
SCHEDULE 1.73
PERMITTED HOLDERS