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EXHIBIT 4(i)
REVOLVING CREDIT AND GUARANTY AGREEMENT
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Among
ARMSTRONG WORLD INDUSTRIES, INC.
a Debtor and a Debtor-in-Possession under Chapter 11 of the Bankruptcy Code
as Borrower
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and
THE SUBSIDIARIES OF THE BORROWER NAMED
HEREIN, each a Debtor and a Debtor-in-Possession under
Chapter 11 of the Bankruptcy Code
as Guarantors
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and
THE BANKS PARTY HERETO,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent and Documentation Agent
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CHASE SECURITIES INC.,
as Book Manager
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and
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Lead Arranger
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Dated as of December 6, 2000
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REVOLVING CREDIT AND GUARANTY AGREEMENT
Dated as of December 6, 2000
REVOLVING CREDIT AND GUARANTY AGREEMENT, dated as of December 6, 2000,
among ARMSTRONG WORLD INDUSTRIES, INC., a Pennsylvania corporation (the
"Borrower"), a debtor and debtor-in-possession in a case pending under Chapter
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11 of the Bankruptcy Code, and certain of the subsidiaries of the Borrower
signatory hereto (each a "Guarantor" and collectively, the "Guarantors"), each
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of which Guarantors referred to in this paragraph is a debtor and
debtor-in-possession in a case pending under Chapter 11 of the Bankruptcy Code
(the cases of the Borrower and the Guarantors, each a "Case" and collectively,
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the "Cases"), THE CHASE MANHATTAN BANK, a New York banking corporation
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("Chase"), each of the other financial institutions from time to time party
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hereto (together with Chase, the "Banks") and THE CHASE MANHATTAN BANK, as agent
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(in such capacity, the "Agent") for the Banks.
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INTRODUCTORY STATEMENT
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On December 6, 2000, the Borrower and the Guarantors filed voluntary
petitions with the Bankruptcy Court initiating the Cases and have continued in
the possession of their assets and in the management of their business pursuant
to Sections 1107 and 1108 of the Bankruptcy Code.
The Borrower has applied to the Banks for a revolving credit and
letter of credit facility in an aggregate principal amount not to exceed
$400,000,000, all of the Borrower's obligations under which are to be guaranteed
by the Guarantors.
The proceeds of the Loans will be used for working capital and other
general corporate purposes of the Borrower and the Guarantors, which shall
include intercompany loans and advances to Non-filed Subsidiaries to the extent
permitted by this Agreement.
To provide guarantees and security for the repayment of the Loans, the
reimbursement of any draft drawn under a Letter of Credit and the payment of the
other obligations of the Borrower and the Guarantors hereunder and under the
other Loan Documents (including, without limitation, Indebtedness of the
Borrower to Chase or any of its banking Affiliates permitted by Section
6.03(vi), the Borrower and the Guarantors will provide to the Agent and the
Banks the following (each as more fully described herein):
a guaranty from each of the Guarantors of the due and punctual payment and
performance of the obligations of the Borrower hereunder;
an allowed administrative expense claim in each of the Cases pursuant to Section
364(c)(1) of the Bankruptcy Code having priority over all administrative
expenses of the kind specified in Sections 503(b) and 507(b) of the Bankruptcy
Code; and
a perfected first priority Lien, pursuant to Section 364(c)(2) of the Bankruptcy
Code, upon all cash and cash equivalents in the Letter of Credit Account,
provided that following the Termination Date, amounts in the Letter of Credit
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Account shall not be subject to the Carve-Out hereinafter referred to.
All of the claims and the Liens granted hereunder in the Cases to the
Agent and the Banks shall be subject to the Carve-Out to the extent provided in
Section 2.23.
Accordingly, the parties hereto hereby agree as follows:
DEFINITIONS
Defined Terms.
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As used in this Agreement, the following terms shall have the meanings
specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
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"ABR Loan" shall mean any Loan bearing interest at a rate determined
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by reference to the Alternate Base Rate in accordance with the provisions of
Section 2.
"Additional Credit" shall have the meaning given such term in Section
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4.02(d) hereof.
"Adjusted LIBOR Rate" shall mean, with respect to any Eurodollar
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Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the quotient of (a) the LIBOR
Rate in effect for such Interest Period divided by (b) a percentage (expressed
as a decimal) equal to 100% minus Statutory Reserves. For purposes hereof, the
term "LIBOR Rate" shall mean the rate (rounded upwards, if necessary, to the
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next 1/16 of 1%) at which dollar deposits approximately equal in principal
amount to such Eurodollar Borrowing and for a maturity comparable to such
Interest Period are offered to the principal London office of the Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Affiliate" shall mean, as to any Person, any other Person which,
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directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, a Person (a
"Controlled Person") shall be deemed to be "controlled by" another Person (a
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"Controlling Person") if the Controlling Person possesses, directly or
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indirectly, power to direct or cause the direction of the management and
policies of the Controlled Person whether by contract or otherwise.
"Agent" shall have the meaning set forth in the Introduction.
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"Agreement" shall mean this Revolving Credit and Guaranty Agreement,
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as the same may from time to time be further amended, modified or supplemented.
"Alternate Base Rate" shall mean, for any day, a rate per annum
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(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such
day plus 1% and (c) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. For purposes hereof, "Prime Rate" shall mean the rate of interest per
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annum publicly announced from time to time by the Agent as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective on the date such change is publicly announced. "Base CD Rate"
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shall mean the sum of (a) the quotient of (i) the Three-Month Secondary CD Rate
divided by (ii) a percentage expressed as a decimal equal to 100% minus
Statutory Reserves and (b) the Assessment Rate. "Three-Month Secondary CD Rate"
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shall mean, for any day, the secondary market rate for three-month certificates
of deposit reported as being in effect on such day (or, if such day shall not be
a Business Day, the next preceding Business Day) by the Board through the public
information telephone line of the Federal Reserve Bank of New York (which rate
will, under the current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day), or, if such
rate shall not be so reported on such day or such next preceding Business Day,
the average of the secondary market quotations for three-month certificates of
deposit of major money center banks in New York City received at approximately
10:00 a.m., New York City time, on such day (or, if such day shall not be a
Business Day, on the next preceding Business Day) by the Agent from three New
York City negotiable certificate of deposit dealers of recognized standing
selected by it. "Federal Funds Effective Rate" shall mean, for any day, the
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weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by it. If
for any reason the Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Base CD
Rate or the Federal Funds Effective Rate or both for any reason, including the
inability or failure of the Agent to obtain sufficient quotations in accordance
with the terms hereof, the Alternate Base Rate shall be determined without
regard to clause (b) or (c), or both, of the first sentence of this definition,
as appropriate, until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the Prime Rate,
the Three-Month Secondary CD Rate or the Federal Funds Effective Rate shall be
effective on the effective date of such change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective Rate, respectively.
"Applicable Margin" shall mean, for any day with respect to any ABR
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Loan or Eurodollar Loan, or with respect to any unreimbursed draws under Letters
of Credit (as provided for in Section 2.03(d) or Letter of Credit Fees payable
hereunder as the case may be, the applicable rate per annum set forth below
under the caption "ABR Spread," "Eurodollar Spread,"
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Unreimbursed L/C Rate," or (except as set forth in Section 2.21) "Letter of
Credit Fee Rate" as the case may be, based upon the Total Facility Usage
applicable on such date:
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Letter of Credit Fee
Total Facility Usage ABR Spread Eurodollar Spread Unreimbursed L/C Rate Rate
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Less than $200,000,000 .50% 1.50% .50% 1.50%
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$200,000,000 to 1.00% 2.00% 1.00% 2.00%
$400,000,000
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"Assessment Rate" shall mean for any date the annual rate (rounded
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upwards, if necessary, to the next 1/100 of 1%) most recently estimated by the
Agent as the then current net annual assessment rate that will be employed in
determining amounts payable by the Agent to the Federal Deposit Insurance
Corporation (or any successor) for insurance by such Corporation (or any
successor) of time deposits made in dollars at the Agent's domestic offices.
"Assignment and Acceptance" shall mean an assignment and acceptance
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entered into by a Bank and an Eligible Assignee, and accepted by the Agent,
substantially in the form of Exhibit C.
"Bankruptcy Code" shall mean The Bankruptcy Reform Act of 1978, as
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heretofore and hereafter amended, and codified as 11 U.S.C. Section 101 et seq.
"Bankruptcy Court" shall mean the United States Bankruptcy Court for
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the District of Delaware or any other court having jurisdiction over the Cases
from time to time.
"Banks" shall have the meaning set forth in the Introduction.
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"Board" shall mean the Board of Governors of the Federal Reserve
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System of the United States.
"Borrower" shall have the meaning set forth in the Introduction.
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"Borrowing" shall mean the incurrence of Loans of a single Type made
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from all the Banks on a single date and having, in the case of Eurodollar Loans,
a single Interest Period (with any ABR Loan made pursuant to Section 2.16 being
considered a part of the related Borrowing of Eurodollar Loans).
"Borrowing Base" shall be defined in a manner satisfactory to the
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Agent and reflected in an amendment to this Agreement satisfactory to the Agent
to be executed prior to the entry of the Final Order and approved by the
Bankruptcy Court at the time of the entry thereof; such Borrowing Base shall
include inventory and receivables, and certain other assets
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satisfactory to the Agent (as to which the Agent shall have received such
appraisals and valuations as may have been requested by the Agent), of the
Borrower meeting certain eligibility standards determined by the Agent.
Borrowing Base standards may be fixed and revised from time to time solely by
the Agent in its exclusive discretion and consistent with its standard practice
with any changes in such standards to be effective 10 days after delivery of
notice thereof to the Borrower. The Borrowing Base shall not include any assets
of the Non-filed Subsidiaries, provided that the Borrower may request that the
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Borrowing Base include inventory and receivables, and certain other assets
satisfactory to the Agent (as to which the Agent shall have received such
appraisals and valuations as may have been requested by the Agent), meeting
eligibility standards determined by the Agent of certain Domestic Subsidiaries
if the Agent is satisfied in its sole judgment that such inventory, receivables
and other assets are subject to valid and perfected first Liens in favor of the
Borrower or the Agent.
"Borrowing Base Certificate" shall mean a certificate substantially in
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the form of an exhibit to the amendment to this Agreement referred to in the
definition of "Borrowing Base" (with such changes therein as may be required by
the Agent to reflect the components of and reserves against the Borrowing Base
as provided for hereunder from time to time), executed and certified by a
Financial Officer of the Borrower, which shall include appropriate exhibits and
schedules as referred to therein.
"Business Day" shall mean any day other than a Saturday, Sunday or
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other day on which banks in the State of New York are required or permitted to
close (and, for a Letter of Credit, other than a day on which the Fronting Bank
issuing such Letter of Credit is closed); provided, however, that when used in
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connection with a Eurodollar Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in dollar deposits on the
London interbank market.
"Capital Expenditures" shall mean, for any period, the aggregate of
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all expenditures (whether paid in cash and not theretofore accrued subsequent to
the date of this Agreement or accrued as liabilities during such period and
including that portion of Capitalized Leases which is capitalized on the
consolidated balance sheet of the Borrower and the Guarantors) net of cash
amounts received by the Borrower and the Guarantors from other Persons during
such period in reimbursement of Capital Expenditures made by the Borrower and
the Guarantors, excluding interest capitalized during construction, by the
Borrower and the Guarantors during such period that, in conformity with GAAP,
are required to be included in or reflected by the property, plant, equipment or
intangibles or similar fixed asset accounts reflected in the consolidated
balance sheet of the Borrower and the Guarantors (including equipment which is
purchased simultaneously with the trade-in of existing equipment owned by the
Borrower or any of the Guarantors to the extent of the gross amount of such
purchase price less the book value of the equipment being traded in at such
time), but excluding expenditures made in connection with the replacement or
restoration of assets, to the extent reimbursed or financed from insurance
proceeds paid on account of the loss of or the damage to the assets being
replaced or restored, or from awards of compensation arising from the taking by
condemnation or eminent domain of such assets being replaced.
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"Capitalized Lease" shall mean, as applied to any Person, any lease of
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property by such Person as lessee which would be capitalized on a balance sheet
of such Person prepared in accordance with GAAP.
"Carve-Out" shall have the meaning set forth in Section 2.23.
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"Cases" shall mean the Chapter 11 Cases of the Borrower and each of
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the Guarantors pending in the Bankruptcy Court.
"Change of Control" shall mean (i) the acquisition of ownership,
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directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof),
of shares representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Borrower; or (ii)
the occupation of a majority of the seats (other than vacant seats) on the Board
of Directors of the Borrower by Persons who were neither (A) nominated by the
Board of Directors of the Borrower nor (B) appointed by directors so nominated.
"Chase" shall have the meaning set forth in the Introduction.
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"Closing Date" shall mean the date on which this Agreement has been
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executed and the conditions precedent to the making of the initial Loans set
forth in Section 4.01 have been satisfied or waived, which date shall occur
promptly upon entry of the Interim Order, but not later than 10 days following
the entry of the Interim Order.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
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"Commitment" shall mean, with respect to each Bank, the commitment of
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each Bank hereunder in the amount set forth opposite its name on Annex A hereto
or as may subsequently be set forth in the Register from time to time, as the
same may be reduced from time to time pursuant to Section 2.10 of this
Agreement.
"Commitment Fee" shall have the meaning set forth in Section 2.20.
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"Commitment Letter" shall mean that certain Commitment Letter dated
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December 1, 2000 among the Agent, Chase Securities Inc. and the Borrower.
"Commitment Percentage" shall mean at any time, with respect to each
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Bank, the percentage obtained by dividing its Commitment at such time by the
Total Commitment at such time.
"Competitive Bid" means an offer by a Bank to make a Competitive Loan
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in accordance with Section 2.06A.
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"Competitive Bid Rate" means, with respect to any Competitive Bid, the
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Margin or the Fixed Rate, as applicable, offered by the Bank making such
Competitive Bid.
"Competitive Bid Request" means a request by the Borrower for
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Competitive Bids in accordance with Section 2.06A.
"Competitive Loan" means a Loan made pursuant to Section 2.06A.
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"Consummation Date" shall mean the date of the substantial
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consummation (as defined in Section 1101 of the Bankruptcy Code and which for
purposes of this Agreement shall be no later than the effective date) of a
Reorganization Plan of the Borrower or any of the Guarantors that is confirmed
pursuant to an order of the Bankruptcy Court.
"Cumulative Cash Flow" shall mean, as of the last day of each four (4)
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fiscal quarter period of the Borrower, the sum of the Borrower's EBITDA for such
period plus the aggregate cash dividends received by the Borrower from the
Guarantors and the Non-filed Subsidiaries during such period.
"Dollars" and "$" shall mean lawful money of the United States of
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America.
"Domestic Subsidiaries" shall mean, collectively, the direct and
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indirect domestic Subsidiaries of the Borrower, other than the Guarantors.
"EBITDA" shall mean, for any period, all as determined in accordance
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with GAAP, the consolidated net income (or net loss) of the Borrower and the
Guarantors for such period, plus (a) the sum of (i) depreciation expense, (ii)
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amortization expense, (iii) other non-cash expenses, (iv) provision for LIFO
adjustment for inventory valuation, (v) net total Federal, state and local
income tax expense, (vi) gross interest expense for such period less gross
interest income for such period, (vii) extraordinary losses, (viii) any
non-recurring charge or restructuring or reorganization charge (such as plant
closing costs, severance costs and asbestos reserve changes) which in accordance
with GAAP is not excluded from operating income, (ix) the cumulative effect of
any change in accounting principles and (x) "Chapter 11 expenses" (or
"administrative costs reflecting Chapter 11 expenses") as shown on the
Borrower's consolidated statement of income for such period less (b)
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extraordinary gains plus or minus (c) the amount of cash received or expended in
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such period in respect of any amount which, under clause (viii) above, was taken
into account in determining EBITDA for such or any prior period.
"Eligible Assignee" shall mean (i) a commercial bank having total
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assets in excess of $1,000,000,000; (ii) a finance company, insurance company or
other financial institution or fund, in each case acceptable to the Agent, which
in the ordinary course of business extends credit of the type contemplated
herein and has total assets in excess of $200,000,000 and whose becoming an
assignee would not constitute a prohibited transaction under Section 4975 of
ERISA; and (iii) any other financial institution satisfactory to the Borrower
and the Agent.
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"Environmental Lien" shall mean a Lien in favor of any Governmental
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Authority for (i) any liability under federal or state environmental laws or
regulations, or (ii) damages arising from or costs incurred by such Governmental
Authority in response to a release or threatened release of a hazardous or toxic
waste, substance or constituent, or other substance into the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
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1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" shall mean any trade or business (whether or not
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incorporated) which is a member of a group of which the Borrower is a member and
which is under common control within the meaning of Section 414(b) or (c) of the
Code and the regulations promulgated and rulings issued thereunder.
"Eurocurrency Liabilities" shall have the meaning assigned thereto in
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Regulation D issued by the Board, as in effect from time to time.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
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Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate
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determined by reference to the Adjusted LIBOR Rate in accordance with the
provisions of Section 2.
"Event of Default" shall have the meaning given such term in Section
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7.
"Fees" shall collectively mean the Commitment Fees, Letter of Credit
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Fees and other fees referred to in Sections 2.19, 2.20 and 2.21.
"Filing Date" shall mean December 6, 2000.
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"Final Order" shall have the meaning given such term in Section
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4.02(d).
"Financial Officer" shall mean the Chief Financial Officer, Corporate
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Controller, Treasurer or Assistant Treasurer of the Borrower.
"Fixed Rate" means, with respect to any Competitive Loan (other than a
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Eurodollar Competitive Loan), the fixed rate of interest per annum specified by
the Bank making such Competitive Loan in its related Competitive Bid.
"Fixed Rate Loan" means a Competitive Loan bearing interest at a Fixed
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Rate.
"Foreign Subsidiaries" shall mean, collectively, the direct and
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indirect foreign Subsidiaries of the Borrower.
"Fronting Bank" shall mean Chase (or any of its banking affiliates) or
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such other Bank (which other Bank shall be reasonably satisfactory to the
Borrower) as may agree with Chase to act in such capacity.
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"GAAP" shall mean generally accepted accounting principles applied in
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accordance with Section 1.02.
"Governmental Authority" shall mean any Federal, state, municipal or
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other governmental department, commission, board, bureau, agency or
instrumentality or any court, in each case whether of the United States or
foreign.
"Guarantor" shall have the meaning set forth in the Introduction.
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"Indebtedness" shall mean, at any time and with respect to any Person,
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(i) all indebtedness of such Person for borrowed money, (ii) all indebtedness of
such Person for the deferred purchase price of property or services (other than
property, including inventory, and services purchased, and expense accruals and
deferred compensation items arising, in the ordinary course of business), (iii)
all obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments (other than performance, surety and appeal bonds arising in
the ordinary course of business), (iv) all indebtedness of such Person created
or arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (v) all obligations of such Person
under leases which have been or should be, in accordance with GAAP, recorded as
capital leases, to the extent required to be so recorded, (vi) all
reimbursement, payment or similar obligations of such Person, contingent or
otherwise, under acceptance, letter of credit or similar facilities and all
obligations of such Person in respect of (x) currency swap agreements, currency
future or option contracts and other similar agreements designed to hedge
against fluctuations in foreign interest rates and (y) interest rate swap, cap
or collar agreements and interest rate future or option contracts; (vii) all
Indebtedness referred to in clauses (i) through (vi) above guaranteed directly
or indirectly by such Person, or in effect guaranteed directly or indirectly by
such Person through an agreement (A) to pay or purchase such Indebtedness or to
advance or supply funds for the payment or purchase of such Indebtedness, (B) to
purchase, sell or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment of
such Indebtedness or to assure the holder of such Indebtedness against loss in
respect of such Indebtedness, (C) to supply funds to or in any other manner
invest in the debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services are rendered)
or (D) otherwise to assure a creditor against loss in respect of such
Indebtedness, and (viii) all Indebtedness referred to in clauses (i) through
(vii) above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or in
property (including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness.
"Insufficiency" shall mean, with respect to any Plan, the amount, if
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any, of its unfunded benefit liabilities within the meaning of Section
4001(a)(18) of ERISA.
"Interim Order" shall have the meaning given such term in Section
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4.01(b).
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"Interest Payment Date" shall mean (i) as to any Eurodollar Loan, the
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last day of each consecutive 30 day period running from the commencement of the
applicable Interest Period, (ii) as to all ABR Loans, the last calendar day of
each month and the date on which any ABR Loans are refinanced with Eurodollar
Loans pursuant to Section 2.12 and (iii) as to any Competitive Loan, the last
day of the Interest Period applicable thereto.
"Interest Period" shall mean, as to any Borrowing of Eurodollar Loans,
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the period commencing on the date of such Borrowing (including as a result of a
refinancing of ABR Loans) or on the last day of the preceding Interest Period
applicable to such Borrowing and ending on the numerically corresponding day (or
if there is no corresponding day, the last day) in the calendar month that is
one or three months thereafter, as the Borrower may elect in the related notice
delivered pursuant to Sections 2.06(b) or 2.12; provided, however, that (i) if
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any Interest Period would end on a day which shall not be a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day,
and (ii) no Interest Period shall end later than the Termination Date.
"Investments" shall have the meaning given such term in Section 6.10.
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"Letter of Credit" shall mean any irrevocable letter of credit issued
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pursuant to Section 2.03, which letter of credit shall be (i) a standby or
import documentary letter of credit, (ii) issued for purposes that are
consistent with the ordinary course of business of the Borrower or any
Subsidiary, or for such other purposes as are reasonably acceptable to the
Agent, (iii) denominated in Dollars and (iv) otherwise in such form as may be
reasonably approved from time to time by the Agent and the applicable Fronting
Bank.
"Letter of Credit Account" shall mean the account established by the
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Borrower under the sole and exclusive control of the Agent maintained at the
office of the Agent at 270 Park Avenue, New York, New York 10017 designated as
the "Armstrong World Industries, Inc. Letter of Credit Account" that shall be
used solely for the purposes set forth in Sections 2.03(b) and 2.13.
"Letter of Credit Fees" shall mean the fees payable in respect of
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Letters of Credit pursuant to Section 2.21.
"Letter of Credit Outstandings" shall mean, at any time, the sum of
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(i) the aggregate undrawn stated amount of all Letters of Credit then
outstanding plus (ii) all amounts theretofore drawn under Letters of Credit and
not then reimbursed.
"Lien" shall mean any mortgage, pledge, security interest,
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encumbrance, lien or charge of any kind whatsoever (including any conditional
sale or other title retention agreement or any lease in the nature thereof).
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"Loan" shall have the meaning given such term in Section 2.01; except
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as used in Sections 2.01, 2.06, 2.08, 2.11 and 2.12, the term "Loan" shall
include Competitive Loans for all purposes of this Agreement and the other Loan
Documents.
"Loan Documents" shall mean this Agreement, the Letters of Credit, and
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any other instrument or agreement executed and delivered in connection herewith.
"Margin" means, with respect to any Competitive Loan bearing interest
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at a rate based on the LIBOR Rate, the marginal rate of interest, if any, to be
added to or subtracted from the LIBOR Rate to determine the rate of interest
applicable to such Loan, as specified by the Bank making such Loan in its
related Competitive Bid.
"Maturity Date" shall mean twenty-four (24) months after the
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commencement of the Debtor's Case.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
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Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" shall mean a Single Employer Plan, which (i)
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is maintained for employees of the Borrower or an ERISA Affiliate and at least
one Person other than the Borrower and its ERISA Affiliates or (ii) was so
maintained and in respect of which the Borrower or an ERISA Affiliate could have
liability under Section 4064 or 4069 of ERISA in the event such Plan has been or
were to be terminated.
"Net Debt" shall mean, on any day, the amount by which Total Facility
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Usage on such day exceeds the sum on such day of the Borrower's collected cash
balances plus cash equivalents.
"Non-Filed Subsidiaries" shall mean the Domestic Subsidiaries and the
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Foreign Subsidiaries.
"Obligations" shall mean (a) the due and punctual payment of principal
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of and interest on the Loans and the reimbursement of all amounts drawn under
Letters of Credit, and (b) the due and punctual payment of the Fees and all
other present and future, fixed or contingent, monetary obligations of the
Borrower and the Guarantors to the Banks and the Agent under the Loan Documents.
"Orders" shall mean the Interim Order and the Final Order of the
------
Bankruptcy Court referred to in Sections 4.01(b) and 4.02(d).
"Other Taxes" shall have the meaning given such term in Section 2.18.
-----------
11
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
----
successor agency or entity performing substantially the same functions.
"Pension Plan" shall mean a defined benefit pension or retirement plan
------------
which meets and is subject to the requirements of Section 401(a) of the Code.
"Permitted Investments" shall mean:
---------------------
direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by any agency
thereof to the extent such obligations are backed by the full faith and credit
of the United States of America), in each case maturing within twelve months
from the date of acquisition thereof;
without limiting the provisions of paragraph (d) below, investments in
commercial paper maturing within six months from the date of acquisition thereof
and having, at such date of acquisition, a rating of at least "A-2" or the
equivalent thereof from Standard & Poor's Corporation or of at least "P-2" or
the equivalent thereof from Moody's Investors Service, Inc.;
investments in certificates of deposit, banker's acceptances and time deposits
(including Eurodollar time deposits) maturing within six months from the date of
acquisition thereof issued or guaranteed by or placed with (i) any domestic
office of the Agent or the bank with whom the Borrower and the Guarantors
maintain their cash management system, or (ii) any domestic office of any other
commercial bank of recognized standing organized under the laws of the United
States of America or any State thereof that has a combined capital and surplus
and undivided profits of not less than $250,000,000 and is the principal banking
Subsidiary of a bank holding company having a long-term unsecured debt rating of
at least "A-2" or the equivalent thereof from Standard & Poor's Corporation or
at least "P-2" or the equivalent thereof from Moody's Investors Service, Inc.;
investments in commercial paper maturing within six months from the date of
acquisition thereof and issued by (i) the holding company of the Agent or (ii)
the holding company of any other commercial bank of recognized standing
organized under the laws of the United States of America or any State thereof
that has (A) a combined capital and surplus in excess of $250,000,000 and (B)
commercial paper rated at least "A-2" or the equivalent thereof from Standard &
Poor's Corporation or of at least "P-2" or the equivalent thereof from Moody's
Investors Service, Inc.;
investments in repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clause (a) above entered
into with any office of a bank or trust company meeting the qualifications
specified in clause (c) above;
investments in money market funds substantially all the assets of which are
comprised of securities of the types described in clauses (a) through (e) above;
and
12
investments whether directly or indirectly, in the capital stock of the
Guarantors and the other Subsidiaries of the Borrower by the Borrower.
"Permitted Liens" shall mean (i) Liens imposed by law (other than
---------------
Environmental Liens and any Lien imposed under ERISA) for taxes, assessments or
charges of any Governmental Authority for claims not yet due or which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being maintained in
accordance with GAAP; (ii) Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens (other than Environmental
Liens and any Lien imposed under ERISA) in existence on the Filing Date or
thereafter imposed by law and created in the ordinary course of business; (iii)
Liens (other than any Lien imposed under ERISA) incurred or deposits made in the
ordinary course of business (including, without limitation, surety bonds and
appeal bonds) in connection with workers' compensation, unemployment insurance
and other types of social security benefits, statutory obligations and other
similar obligations or arising as a result of progress payments under government
contracts; (iv) easements (including, without limitation, reciprocal easement
agreements and utility agreements), rights-of-way, covenants, consents,
reservations, encroachments, variations and zoning and other restrictions,
charges or encumbrances (whether or not recorded) and interest of ground
lessors, which do not interfere materially with the ordinary conduct of the
business of the Borrower or any Guarantor, as the case may be, and which do not
materially detract from the value of the property to which they attach or
materially impair the use thereof to the Borrower or any Guarantor, as the case
may be; (v) purchase money Liens (including Capitalized Leases) upon or in any
property acquired or held in the ordinary course of business to secure the
purchase price of such property or to secure Indebtedness permitted by Section
6.03(iv) solely for the purpose of financing the acquisition of such property;
and (vi) extensions, renewals or replacements of any Lien referred to in
paragraphs (i) through (v) above, provided that the principal amount of the
--------
obligation secured thereby is not increased and that any such extension, renewal
or replacement is limited to the property originally encumbered thereby.
"Person" shall mean any natural person, corporation, division of a
------
corporation, partnership, trust, joint venture, association, company, estate,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan" shall mean a Single Employer Plan or a Multiemployer Plan.
----
"Prepayment Date" shall mean forty-five (45) days after the Filing
---------------
Date if the Final Order has not been entered by the Bankruptcy Court prior to
the expiration of such forty-five (45) day period.
"Pre-Petition Payment" shall mean a payment (by way of adequate
--------------------
protection or otherwise) of principal or interest or otherwise on account of any
pre-petition Indebtedness or trade payables or other pre-petition claims against
the Borrower or any Guarantor.
"Register" shall have the meaning set forth in Section 10.03(d).
--------
13
"Reorganization Plan" shall mean a plan of reorganization in any of
-------------------
the Cases.
"Required Banks" shall mean, at any time, Banks holding Loans
--------------
representing in excess of 50% of the aggregate principal amount of such Loans
outstanding or, if no such Loans are outstanding, Banks having Commitments
representing in excess of 50% of the Total Commitment.
"Single Employer Plan" shall mean a single employer plan, as defined
--------------------
in Section 4001(a)(15) of ERISA, that (i) is maintained for employees of the
Borrower or an ERISA Affiliate or (ii) was so maintained and in respect of which
the Borrower could have liability under Section 4069 of ERISA in the event such
Plan has been or were to be terminated.
"Statutory Reserves" shall mean on any date the percentage (expressed
------------------
as a decimal) established by the Board and any other banking authority which is
(i) for purposes of the definition of Base CD Rate, the then stated maximum rate
of all reserves (including, but not limited to, any emergency, supplemental or
other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City, for new three month negotiable nonpersonal time
deposits in dollars of $100,000 or more or (ii) for purposes of the definition
of Adjusted LIBOR Rate, the then stated maximum rate for all reserves (including
but not limited to any emergency, supplemental or other marginal reserve
requirements) applicable to any member bank of the Federal Reserve System in
respect of Eurocurrency Liabilities (or any successor category of liabilities
under Regulation D issued by the Board, as in effect from time to time). Such
reserve percentages shall include, without limitation, those imposed pursuant to
said Regulation. The Statutory Reserves shall be adjusted automatically on and
as of the effective date of any change in such percentage.
"Subsidiary" shall mean, with respect to any Person (herein referred
----------
to as the "parent"), any corporation, association or other business entity
------
(whether now existing or hereafter organized) of which at least a majority of
the securities or other ownership interests having ordinary voting power for the
election of directors is, at the time as of which any determination is being
made, owned or controlled by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.
"Super-majority Banks" shall have the meaning given such term in
--------------------
Section 10.10(b).
"Superpriority Claim" shall mean a claim against the Borrower and any
-------------------
Guarantor in any of the Cases which is an administrative expense claim having
priority over any or all administrative expenses of the kind specified in
Sections 503(b) or 507(b) of the Bankruptcy Code.
"Taxes" shall have the meaning given such term in Section 2.18.
-----
14
"Termination Date" shall mean the earliest to occur of (i) the
----------------
Prepayment Date, (ii) the Maturity Date, (iii) the Consummation Date and (iv)
the acceleration of the Loans and the termination of the Total Commitment in
accordance with the terms hereof.
"Termination Event" shall mean (i) a "reportable event", as such term
-----------------
is described in Section 4043 of ERISA and the regulations issued thereunder
(other than a "reportable event" not subject to the provision for 30-day notice
to the PBGC under Section 4043 of ERISA or such regulations) or an event
described in Section 4068 of ERISA excluding events described in Section
4043(c)(9) of ERISA or 29 CFR (S)(S)2615.21 or 2615.23 and excluding events
which would not be reasonably likely (as reasonably determined by the Agent) to
have a material adverse effect on the financial condition, operations, business,
properties or assets of the Borrower and the Guarantors taken as a whole, or
(ii) the withdrawal of the Borrower or any ERISA Affiliate from a Multiple
Employer Plan during a plan year in which it was a "substantial employer", as
such term is defined in Section 4001(c) of ERISA, or the incurrence of liability
by the Borrower or any ERISA Affiliate under Section 4064 of ERISA upon the
termination of a Multiple Employer Plan, or (iii) providing notice of intent to
terminate a Plan pursuant to Section 4041(c) of ERISA or the treatment of a Plan
amendment as a termination under Section 4041 of ERISA, or (iv) the institution
of proceedings to terminate a Plan by the PBGC under Section 4042 of ERISA, or
(v) any other event or condition (other than the commencement of the Cases and
the failure to have made any contribution accrued as of the Filing Date but not
paid) which would reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the imposition of any liability under Title IV of ERISA
(other than for the payment of premiums to the PBGC).
"Total Commitment" shall mean, at any time, the sum of the Commitments
----------------
at such time.
"Total Facility Usage" shall mean, at any time, the sum of (i) the
--------------------
aggregate outstanding principal amount of all Loans and (ii) the aggregate
Letter of Credit Outstandings.
"Transferee" shall have the meaning given such term in Section 2.18.
----------
"Type" when used in respect of any Loan or Borrowing shall refer to
----
the Rate of interest by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "Rate" shall mean
the Adjusted LIBOR Rate and the Alternate Base Rate.
"Unused Total Commitment" shall mean, at any time (i) the Total
-----------------------
Commitment less (ii) the sum of (x) the aggregate outstanding principal amount
of all Loans other than Competitive Loans and (y) the aggregate Letter of Credit
Outstandings.
"Withdrawal Liability" shall have the meaning given such term under
--------------------
Part I of Subtitle E of Title IV of ERISA.
15
Terms Generally. The definitions in Section 1.01 shall apply equally to
---------------
both the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. All references herein to Sections, Exhibits and Schedules shall be
deemed references to Sections of, and Exhibits and Schedules to, this Agreement
unless the context shall otherwise require. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided,
--------
however, that for purposes of determining compliance with any covenant set forth
- -------
in Section 6, such terms shall be construed in accordance with GAAP as in effect
on the date of this Agreement applied on a basis consistent with the application
used in the Borrower's audited financial statements referred to in Section 3.04.
AMOUNT AND TERMS OF CREDIT
Commitment of the Banks.
-----------------------
Each Bank severally and not jointly with the other Banks agrees, upon the terms
and subject to the conditions herein set forth, to make revolving credit loans
(each a "Loan" and collectively, the "Loans") to the Borrower at any time and
---- -----
from time to time during the period commencing on the date hereof and ending on
the Termination Date (or the earlier date of termination of the Total
Commitment) in an aggregate principal amount not to exceed, when added to such
Bank's Commitment Percentage of the then aggregate Letter of Credit Outstandings
(in excess of the amount of cash then held in the Letter of Credit Account
pursuant to Section 2.03(b)), the Commitment of such Bank, which Loans may be
repaid and reborrowed in accordance with the provisions of this Agreement. At no
time following the entry by the Bankruptcy Court of the Final Order shall the
sum of the then outstanding aggregate principal amount of the Loans and
Competitive Loans (without duplication) plus the then aggregate Letter of Credit
----
Outstandings exceed the lesser of (i) the Total Commitment of $400,000,000, as
the same may be reduced from time to time pursuant to Section 2.10 and (ii) the
Borrowing Base.
Each Borrowing shall be made by the Banks pro rata in accordance with their
--- ----
respective Commitments; provided, however, that the failure of any Bank to make
-------- -------
any Loan shall not in itself relieve the other Banks of their obligations to
lend.
Borrowing Base. Notwithstanding any other provision of this Agreement to
--------------
the contrary, the aggregate principal amount of all outstanding Loans
(including, without limitation, Competitive Loans) plus the then aggregate
Letter of Credit Outstandings shall not at any time following the entry by the
Bankruptcy Court of the Final Order exceed the Borrowing Base and no Loan shall
be made or Letter of Credit issued in violation of the foregoing.
16
Letters of Credit.
-----------------
Upon the terms and subject to the conditions herein set forth, the Borrower may
request a Fronting Bank, at any time and from time to time after the date hereof
and prior to the Termination Date, to issue, and, subject to the terms and
conditions contained herein, such Fronting Bank shall issue, for the account of
the Borrower or a Guarantor one or more Letters of Credit, provided that no
--------
Letter of Credit shall be issued if after giving effect to such issuance (i) the
aggregate Letter of Credit Outstandings shall exceed $200,000,000 or (ii) the
aggregate Letter of Credit Outstandings, when added to the aggregate outstanding
principal amount of the Loans, would exceed the Total Commitment and, provided
--------
further that no Letter of Credit shall be issued if the Fronting Bank shall have
- -------
received notice from the Agent or the Required Banks that the conditions to such
issuance have not been met.
No Letter of Credit shall expire later than 60 days after the Maturity Date,
provided that if any Letter of Credit shall be outstanding on the Termination
- --------
Date, the Borrower shall, at or prior to the Termination Date, except as the
Agent may otherwise agree in writing, (i) cause all Letters of Credit which
expire after the Termination Date to be returned to the Fronting Bank undrawn
and marked "canceled" or (ii) if the Borrower is unable to do so in whole or in
part, either (x) provide a "back-to-back" letter of credit to one or more
Fronting Banks in a form satisfactory to such Fronting Bank and the Agent (in
their sole discretion), issued by a bank satisfactory to such Fronting Bank and
the Agent (in their sole discretion), is in an amount equal to 105% of the then
undrawn stated amount of all outstanding Letters of Credit issued by such
Fronting Banks and/or (y) deposit cash in the Letter of Credit Account in an
amount equal to 105% of the then undrawn stated amount of all Letter of Credit
Outstandings as collateral security for the Borrower's reimbursement obligations
in connection therewith, such cash to be remitted to the Borrower upon the
expiration, cancellation or other termination or satisfaction of such
reimbursement obligations.
The Borrower shall pay to each Fronting Bank, in addition to such other fees and
charges as are specifically provided for in Section 2.21 hereof, such fees and
charges in connection with the issuance and processing of the Letters of Credit
issued by such Fronting Bank as are customarily imposed by such Fronting Bank
from time to time in connection with letter of credit transactions.
Drafts drawn under each Letter of Credit shall be reimbursed by the Borrower in
Dollars not later than the first Business Day following the date of draw and
shall bear interest from the date of draw until the first Business Day following
the date of draw at a rate per annum equal to the Alternate Base Rate plus the
----
Applicable Margin and thereafter until reimbursed in full at a rate per annum
equal to the Alternate Base Rate plus the Applicable Margin plus two percent
---- ----
(2%) (computed on the basis of the actual number of days elapsed over a year of
360 days). The Borrower shall effect such reimbursement (x) if such draw occurs
prior to the Termination Date (or the earlier date of termination of the Total
Commitment), in cash or through a Borrowing without the satisfaction of the
conditions precedent set forth in Section 4.02 or (y) if such draw occurs on or
after the Termination Date (or the earlier date of termination of the Total
Commitment), in cash. Each Bank agrees to make the Loans described in clause (x)
of the
17
preceding sentence notwithstanding a failure to satisfy the applicable lending
conditions thereto or the provisions of Sections 2.02.
Immediately upon the issuance of any Letter of Credit by any Fronting Bank, such
Fronting Bank shall be deemed to have sold to each Bank other than such Fronting
Bank and each such other Bank shall be deemed unconditionally and irrevocably to
have purchased from such Fronting Bank, without recourse or warranty, an
undivided interest and participation, to the extent of such Bank's Commitment
Percentage, in such Letter of Credit, each drawing thereunder and the
obligations of the Borrower and the Guarantors under this Agreement with respect
thereto. Upon any change in the Commitments pursuant to Section 10.03, it is
hereby agreed that with respect to all Letter of Credit Outstandings, there
shall be an automatic adjustment to the participations hereby created to reflect
the new Commitment Percentages of the assigning and assignee Banks. Any action
taken or omitted by a Fronting Bank under or in connection with a Letter of
Credit, if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for such Fronting Bank any resulting liability to
any other Bank.
In the event that a Fronting Bank makes any payment under any Letter of Credit
and the Borrower shall not have reimbursed such amount in full to such Fronting
Bank pursuant to this Section, the Fronting Bank shall promptly notify the
Agent, which shall promptly notify each Bank of such failure, and each Bank
shall promptly and unconditionally pay to the Agent for the account of the
Fronting Bank the amount of such Bank's Commitment Percentage of such
unreimbursed payment in Dollars and in same day funds. If the Fronting Bank so
notifies the Agent, and the Agent so notifies the Banks prior to 11:00 a.m. (New
York City time) on any Business Day, such Banks shall make available to the
Fronting Bank such Bank's Commitment Percentage of the amount of such payment on
such Business Day in same day funds. If and to the extent such Bank shall not
have so made its Commitment Percentage of the amount of such payment available
to the Fronting Bank, such Bank agrees to pay to such Fronting Bank, forthwith
on demand such amount, together with interest thereon, for each day from such
date until the date such amount is paid to the Agent for the account of such
Fronting Bank at the Federal Funds Effective Rate. The failure of any Bank to
make available to the Fronting Bank its Commitment Percentage of any payment
under any Letter of Credit shall not relieve any other Bank of its obligation
hereunder to make available to the Fronting Bank its Commitment Percentage of
any payment under any Letter of Credit on the date required, as specified above,
but no Bank shall be responsible for the failure of any other Bank to make
available to such Fronting Bank such other Bank's Commitment Percentage of any
such payment. Whenever a Fronting Bank receives a payment of a reimbursement
obligation as to which it has received any payments from the Banks pursuant to
this paragraph, such Fronting Bank shall pay to each Bank which has paid its
Commitment Percentage thereof, in Dollars and in same day funds, an amount equal
to such Bank's Commitment Percentage thereof.
Issuance. Whenever the Borrower desires a Fronting Bank to issue a Letter
--------
of Credit, it shall give to such Fronting Bank and the Agent at least two
Business Days' prior written (including telegraphic, telex, facsimile or cable
communication) notice (or such shorter period as
18
may be agreed upon by the Agent, the Borrower and the Fronting Bank) specifying
the date on which the proposed Letter of Credit is to be issued (which shall be
a Business Day), the stated amount of the Letter of Credit so requested, the
expiration date of such Letter of Credit and the name and address of the
beneficiary thereof.
Nature of Letter of Credit Obligations Absolute. The obligations of the
-----------------------------------------------
Borrower to reimburse the Banks for drawings made under any Letter of Credit
shall be unconditional and irrevocable and shall be paid strictly in accordance
with the terms of this Agreement under all circumstances, including, without
limitation (it being understood that any such payment by the Borrower shall be
without prejudice to, and shall not constitute a waiver of, any rights the
Borrower might have or might acquire as a result of the payment by the Fronting
Bank of any draft or the reimbursement by the Borrower thereof): (i) any lack of
validity or enforceability of any Letter of Credit; (ii) the existence of any
claim, setoff, defense or other right which the Borrower or any Guarantor may
have at any time against a beneficiary of any Letter of Credit or against any of
the Banks, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction; (iii) any draft, demand,
certificate or other document presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; (iv) payment by a Fronting
Bank of any Letter of Credit against presentation of a demand, draft or
certificate or other document which does not comply with the terms of such
Letter of Credit; (v) any other circumstance or happening whatsoever, which is
similar to any of the foregoing; or (vi) the fact that any Event of Default
shall have occurred and be continuing.
Making of Loans.
---------------
Except as contemplated by Sections 2.06A and 2.11, Loans shall be either ABR
Loans or Eurodollar Loans as the Borrower may request subject to and in
accordance with this Section, provided that all Loans made pursuant to the same
--------
Borrowing shall, unless otherwise specifically provided herein, be Loans of the
same Type. Each Bank may fulfill its Commitment with respect to any Eurodollar
Loan or ABR Loan by causing any lending office of such Bank to make such Loan;
provided that any such use of a lending office shall not affect the obligation
- --------
of the Borrower to repay such Loan in accordance with the terms of this
Agreement. Each Bank shall, subject to its overall policy considerations, use
reasonable efforts (but shall not be obligated) to select a lending office which
will not result in the payment of increased costs by the Borrower pursuant to
Section 2.15. Subject to the other provisions of this Section and the provisions
of Section 2.12, Borrowings of Loans of more than one Type may be incurred at
the same time, provided that no more than five (5) Borrowings of Eurodollar
--------
Loans may be outstanding at any time.
The Borrower shall give the Agent prior notice of each Borrowing hereunder of at
least three Business Days for Eurodollar Loans and one Business Day for ABR
Loans; such notice shall be irrevocable and shall specify the amount of the
proposed Borrowing (which shall not be less than $5,000,000 (and integral
multiples of $5,000,000) in the case of Eurodollar Loans and $5,000,000 (and
integral multiples of $5,000,000) in the case of ABR Loans) and the date
19
thereof (which shall be a Business Day) and shall contain disbursement
instructions. Such notice, to be effective, must be received by the Agent not
later than 1:00 p.m., New York City time, on the third Business Day in the case
of Eurodollar Loans and 12:00 noon, New York City time on the first Business Day
in the case of ABR Loans, preceding the date on which such Borrowing is to be
made except as provided in the last sentence of this Section 2.06(b). Such
notice shall specify whether the Borrowing then being requested is to be a
Borrowing of ABR Loans or Eurodollar Loans. If no election is made as to the
Type of Loan, such notice shall be deemed a request for Borrowing of ABR Loans.
The Agent shall promptly notify each Bank of its proportionate share of such
Borrowing, the date of such Borrowing, the Type of Borrowing or Loans being
requested and the Interest Period or Interest Periods applicable thereto, as
appropriate. On the borrowing date specified in such notice, each Bank shall
make its share of the Borrowing available at the office of the Agent at 270 Park
Avenue, New York, New York 10017, no later than 12:00 noon, New York City time,
in immediately available funds. Upon receipt of the funds made available by the
Banks to fund any borrowing hereunder, the Agent shall disburse such funds in
the manner specified in the notice of borrowing delivered by the Borrower and
shall use reasonable efforts to make the funds so received from the Banks
available to the Borrower no later than 1:00 p.m. New York City time (other than
as provided in the following sentence). Notwithstanding the first sentence of
this subsection (b), the Borrower shall be permitted to request same day
borrowings of ABR Loans and the Banks shall make such Borrowings available to
the Borrower by 4:00 p.m., New York City time, on the same Business Day that the
Borrower gives notice to the Agent of such Borrowing by 10:30 a.m., New York
City time.
SECTION 2.06A Competitive Bid Procedure. (a) Subject to the terms and
-------------------------
conditions set forth herein, from time to time during the period commencing on
the date hereof and ending on the Termination Date (or the earlier date of
termination of the Total Commitment), the Borrower may request Competitive Bids
and may (but shall not have any obligation to) accept Competitive Bids and
borrow Competitive Loans; provided that the aggregate principal amount of
--------
outstanding Competitive Loans at any time shall not exceed $25,000,000 and the
provisions of Section 2.01(a) and Section 2.02 shall not have been violated by
the making thereof. To request Competitive Bids, the Borrower shall notify the
Agent of such request by telephone, in the case of a Eurodollar Borrowing, not
later than 11:00 a.m., New York City time, four Business Days before the date of
the proposed Borrowing and, in the case of a Fixed Rate Borrowing, not later
than 10:00 a.m., New York City time, one Business Day before the date of the
proposed Borrowing; provided that the Borrower may submit up to (but not more
--------
than) 3 Competitive Bid Requests on the same day, but a Competitive Bid Request
shall not be made within five Business Days after the date of any previous
Competitive Bid Request, unless any and all such previous Competitive Bid
Requests shall have been withdrawn or all Competitive Bids received in response
thereto rejected. Each such telephonic Competitive Bid Request shall be
confirmed promptly by hand delivery or telecopy to the Agent of a written
Competitive Bid Request in a form approved by the Agent and signed by the
Borrower. Each such telephonic and written Competitive Bid Request shall specify
the following information in compliance with Section 2.06(a):
20
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be a Eurodollar Borrowing or a
Fixed Rate Borrowing;
(iv) the Interest Period to be applicable to such Borrowing,
which (x) in the case of a Eurodollar Borrowing, shall be a
one-month period contemplated by the definition of the term
"Interest Period" and (y) in the case of a Fixed Rate
Borrowing, shall be no less than 3 days and no more than 20
days; and
(v) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the
requirements of this Agreement.
Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the Agent shall notify the Banks of the details thereof by telecopy,
inviting the Banks to submit Competitive Bids.
(b) Each Bank in its sole determination may (but shall not have any
obligation of any kind to) make one or more Competitive Bids to the Borrower in
response to a Competitive Bid Request. Each Competitive Bid by a Bank must be in
a form approved by the Agent and must be received by the Agent by telecopy, in
the case of a Eurodollar Borrowing, not later than 9:30 a.m., New York City
time, three Business Days before the proposed date of the Borrowing of such
Competitive Loan, and in the case of a Fixed Rate Borrowing, not later than 9:30
a.m., New York City time, on the proposed date of the Borrowing of such
Competitive Loan. Competitive Bids that do not conform to the form approved by
the Agent may be rejected by the Agent, and the Agent shall notify the
applicable Bank as promptly as practicable. Each Competitive Bid shall specify
(i) the principal amount (which shall be a minimum of $5,000,000 and an integral
multiple of $1,000,000 and which may equal the entire principal amount of the
Competitive Borrowing requested by the Borrower) of the Competitive Loan or
Loans that the Bank is willing to make, (ii) the Competitive Bid Rate or Rates
at which the Bank is prepared to make such Loan or Loans (expressed as a
percentage rate per annum in the form of a decimal to no more than four decimal
places) and (iii) the Interest Period applicable to each such Loan and the last
day thereof.
(c) The Agent shall promptly notify the Borrower by telecopy of the
Competitive Bid Rate and principal amount specified in each Competitive Bid and
the identity of the Bank that shall have made such Competitive Bid.
(d) Subject only to the provisions of this paragraph, the Borrower may
accept or reject any Competitive Bid. The Borrower shall notify the Agent by
telephone, confirmed by telecopy in a form approved by the Agent, whether and to
what extent it has decided to accept or
21
reject each Competitive Bid, in the case of a Eurodollar Borrowing, not later
than 10:30 a.m., New York City time, three Business Days before the date of the
proposed Competitive Loan, and in the case of a Fixed Rate Borrowing, not later
than 10:30 a.m., New York City time, on the proposed date of the Competitive
Loan; provided that (i) the failure of the Borrower to give such notice shall be
--------
deemed to be a rejection of each Competitive Bid, (ii) the Borrower shall not
accept a Competitive Bid made at a particular Competitive Bid Rate if the
Borrower rejects a Competitive Bid made at a lower Competitive Bid Rate, (iii)
the aggregate amount of the Competitive Bids accepted by the Borrower shall not
exceed the aggregate amount of the requested Competitive Loan specified in the
related Competitive Bid Request, (iv) to the extent necessary to comply with
clause (iii) above, the Borrower may accept Competitive Bids at the same
Competitive Bid Rate in part, which acceptance, in the case of multiple
Competitive Bids at such Competitive Bid Rate, shall be made pro rata in
--------
accordance with the amount of each such Competitive Bid, and (v) except pursuant
to clause (iv) above, no Competitive Bid shall be accepted for a Competitive
Loan unless such Competitive Loan is in a minimum principal amount of $5,000,000
and an integral multiple of $1,000,000; provided further that if a Competitive
----------------
Loan must be in an amount less than $5,000,000 because of the provisions of
clause (iv) above, such Competitive Loan may be for a minimum of $1,000,000 or
any integral multiple thereof, and in calculating the pro rata allocation of
acceptances of portions of multiple Competitive Bids at a particular Competitive
Bid Rate pursuant to clause (iv) the amounts shall be rounded to integral
multiples of $1,000,000 in a manner determined by the Borrower. A notice given
by the Borrower pursuant to this paragraph shall be irrevocable.
(e) The Agent shall promptly notify each bidding Bank by telecopy
whether or not its Competitive Bid has been accepted (and, if so, the amount and
Competitive Bid Rate so accepted), and each successful bidder will thereupon
become bound, subject to the terms and conditions hereof, to make the
Competitive Loan in respect of which its Competitive Bid has been accepted.
(f) If the Agent shall elect to submit a Competitive Bid in its
capacity as a Bank, it shall submit such Competitive Bid directly to the
Borrower at least one quarter of an hour earlier than the time by which the
other Banks are required to submit their Competitive Bids to the Agent pursuant
to paragraph (b) of this Section.
Repayment of Loans; Evidence of Debt.
------------------------------------
The Borrower hereby unconditionally promises to pay to the Agent for the account
of each Bank the then unpaid principal amount of each Loan on the Termination
Date, provided that the principal amount of each Competitive Loan shall be paid
--------
on the last day of the Interest Period applicable thereto.
Each Bank shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to such Bank resulting from
each Loan made by such Bank, including the amounts of principal and interest
payable and paid to such Bank from time to time hereunder.
22
The Agent shall maintain accounts in which it shall record (i) the amount of
each Loan made hereunder, the Type thereof and the Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Bank hereunder and (iii) the
amount of any sum received by the Agent hereunder for the account of the Banks
and each Bank's share thereof.
The entries made in the accounts maintained pursuant to paragraph (b) or (c) of
this Section shall be prima facie evidence of the existence and amounts of the
----- -----
obligations recorded therein; provided that the failure of any Bank or the Agent
--------
to maintain such accounts or any error therein shall not in any manner affect
the obligation of the Borrower to repay the Loans in accordance with the terms
of this Agreement.
Any Bank may request that Loans made by it be evidenced by a promissory note. In
such event, the Borrower shall execute and deliver to such Bank a promissory
note payable to the order of such Bank (or, if requested by such Bank, to such
Bank and its registered assigns) in a form furnished by the Agent and reasonably
acceptable to the Borrower. Thereafter, the Loans evidenced by such promissory
note and interest thereon shall at all times (including after assignment
pursuant to Section 10.03) be represented by one or more promissory notes in
such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
Interest on Loans.
-----------------
Subject to the provisions of Section 2.09, each ABR Loan shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360
days) at a rate per annum equal to the Alternate Base Rate plus the Applicable
----
Margin.
Subject to the provisions of Section 2.09, each Eurodollar Loan shall bear
interest (computed on the basis of the actual number of days elapsed over a year
of 360 days) at a rate per annum equal, during each Interest Period applicable
thereto, to the Adjusted LIBOR Rate for such Interest Period in effect for such
Borrowing plus the Applicable Margin.
----
Accrued interest on all Loans shall be payable monthly in arrears on each
Interest Payment Date applicable thereto (provided, that interest on each
--------
Competitive Loan shall be payable on the last day of the Interest Period
applicable thereto), at maturity (whether by acceleration or otherwise), after
such maturity on demand and (with respect to Eurodollar Loans) upon any
repayment or prepayment thereof (on the amount prepaid).
Default Interest. If the Borrower or any Guarantor, as the case may be,
----------------
shall default in the payment of the principal of or interest on any Loan or in
the payment of any other amount becoming due hereunder (including, without
limitation, the reimbursement pursuant to Section 2.03(d) of any draft drawn
under a Letter of Credit), whether at stated maturity, by acceleration or
otherwise, the Borrower or such Guarantor, as the case may be, shall on demand
from time to time pay interest, to the extent permitted by law, on such
defaulted amount up to (but not including) the date of actual payment (after as
well as before judgment) at a rate per annum
23
(computed on the basis of the actual number of days elapsed over a year of 360
days) equal to two percent (2%) in excess of the interest rate which would
otherwise be in effect from time to time with respect thereto.
Optional Termination or Reduction of Commitment. Upon at least two Business
-----------------------------------------------
Days' prior written notice to the Agent, the Borrower may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Total Commitment. Each such reduction of the Commitments shall be in the
principal amount of $5,000,000 or any integral multiple thereof. Simultaneously
with each reduction or termination of the Commitment, the Borrower shall pay to
the Agent for the account of each Bank the Commitment Fee accrued on the amount
of the Commitment of such Bank so terminated or reduced through the date
thereof. Any reduction of the Total Commitment pursuant to this Section shall be
applied pro rata to reduce the Commitment of each Bank.
--- ----
Alternate Rate of Interest. In the event, and on each occasion, that on the
--------------------------
day two Business Days prior to the commencement of any Interest Period for a
Eurodollar Loan, the Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower absent manifest error) that reasonable
means do not exist for ascertaining the applicable Adjusted LIBOR Rate, the
Agent shall, as soon as practicable thereafter, give written or telegraphic
notice of such determination to the Borrower and the Banks, and any request by
the Borrower for a Borrowing of Eurodollar Loans (including pursuant to a
refinancing with Eurodollar Loans) pursuant to Section 2.06 or 2.12 shall be
deemed a request for a Borrowing of ABR Loans. After such notice shall have been
given and until the circumstances giving rise to such notice no longer exist,
each request for a Borrowing of Eurodollar Loans shall be deemed to be a request
for a Borrowing of ABR Loans.
Refinancing of Loans. The Borrower shall have the right, at any time, on
--------------------
three Business Days' prior irrevocable notice to the Agent (which notice, to be
effective, must be received by the Agent not later than 1:00 p.m., New York City
time, on the third Business Day preceding the date of any refinancing), (x) to
refinance (without the satisfaction of the conditions set forth in Section 4 as
a condition to such refinancing) any outstanding Borrowing or Borrowings of
Loans of one Type (or a portion thereof) with a Borrowing of Loans of the other
Type or (y) to continue an outstanding Borrowing of Eurodollar Loans for an
additional Interest Period, subject to the following:
as a condition to the refinancing of ABR Loans with Eurodollar Loans and to the
continuation of Eurodollar Loans for an additional Interest Period, no Event of
Default shall have occurred and be continuing at the time of such refinancing;
if less than a full Borrowing of Loans shall be refinanced, such refinancing
shall be made pro rata among the Banks in accordance with the respective
principal amounts of the Loans comprising such Borrowing held by the Banks
immediately prior to such refinancing;
the aggregate principal amount of Loans being refinanced shall be at least
$5,000,000, provided that no partial refinancing of a Borrowing of Eurodollar
--------
Loans shall result in the Eurodollar
24
Loans remaining outstanding pursuant to such Borrowing being less than
$5,000,000 in aggregate principal amount;
each Bank shall effect each refinancing by applying the proceeds of its new
Eurodollar Loan or ABR Loan, as the case may be, to its Loan being refinanced;
the Interest Period with respect to a Borrowing of Eurodollar Loans effected by
a refinancing or in respect to the Borrowing of Eurodollar Loans being continued
as Eurodollar Loans shall commence on the date of refinancing or the expiration
of the current Interest Period applicable to such continuing Borrowing, as the
case may be;
a Borrowing of Eurodollar Loans may be refinanced only on the last day of an
Interest Period applicable thereto; and
each request for a refinancing with a Borrowing of Eurodollar Loans which fails
to state an applicable Interest Period shall be deemed to be a request for an
Interest Period of one month.
In the event that the Borrower shall not give notice to refinance any Borrowing
of Eurodollar Loans, or to continue such Borrowing as Eurodollar Loans, or shall
not be entitled to refinance or continue such Borrowing as Eurodollar Loans, in
each case as provided above, such Borrowing shall automatically be refinanced
with a Borrowing of ABR Loans at the expiration of the then-current Interest
Period. The Agent shall, after it receives notice from the Borrower, promptly
give each Bank notice of any refinancing, in whole or part, of any Loan made by
such Bank.
Mandatory Prepayment; Commitment Termination; Cash Collateral.
-------------------------------------------------------------
If at any time after the entry of the Final Order the aggregate principal amount
of the outstanding Loans plus the undrawn amount of outstanding Letter of Credit
Outstandings exceeds the lesser of (x) the Total Commitment and (y) the
Borrowing Base, the Borrower will within three Business Days (i) prepay the
Loans in an amount necessary to cause the aggregate principal amount of the
outstanding Loans plus the aggregate Letter of Credit Outstandings to be equal
----
to or less than the Total Commitment and/or the Borrowing Base, as the case may
be, and (ii) if, after giving effect to the prepayment in full of the Loans, the
undrawn amount of outstanding Letter of Credit Outstandings in excess of the
amount of cash held in the Letter of Credit Account exceeds the Total Commitment
and/or the Borrowing Base, as the case may be, deposit into the Letter of Credit
Account an amount equal to 105% of the amount by which the aggregate Letter of
Credit Outstandings in excess of the amount of cash held in the Letter of Credit
Account so exceeds the Total Commitment or Borrowing Base, as the case may be.
Upon the Termination Date, the Total Commitment shall be terminated in full and
the Borrower shall pay the Loans in full and, except as the Agent may otherwise
agree in writing, if any Letter of Credit remains outstanding, deposit into the
Letter of Credit Account an amount equal to 105% of the amount by which the sum
of the aggregate Letter of Credit Outstandings exceeds the amount of cash held
in the Letter of Credit Account, such cash to be remitted to the Borrower
25
upon the expiration, cancellation, satisfaction or other termination of such
reimbursement obligations, or otherwise comply with Section 2.03(b).
Optional Prepayment of Loans; Reimbursement of Banks.
----------------------------------------------------
The Borrower shall have the right at any time and from time to time to prepay
any Loans, in whole or in part, (x) with respect to Eurodollar Loans, upon at
least three Business Days' prior written, telex or facsimile notice to the Agent
and (y) with respect to ABR Loans on the same Business Day if written, telex or
facsimile notice is received by the Agent prior to 12:00 noon, New York City
time, and thereafter upon at least one Business Day's prior written, telex or
facsimile notice to the Agent; provided, however, that (i) each such partial
-------- -------
prepayment shall be in multiples of $5,000,000, (ii) no prepayment of Eurodollar
Loans shall be permitted pursuant to this Section 2.14(a) other than on the last
day of an Interest Period applicable thereto unless such prepayment is
accompanied by the payment of the amounts described in clause (i) of the first
sentence of Section 2.14(b), and (iii) no partial prepayment of a Borrowing of
Eurodollar Loans shall result in the aggregate principal amount of the
Eurodollar Loans remaining outstanding pursuant to such Borrowing being less
than $5,000,000. Each notice of prepayment shall specify the prepayment date,
the principal amount of the Loans to be prepaid and in the case of Eurodollar
Loans, the Borrowing or Borrowings pursuant to which made, shall be irrevocable
and shall commit the Borrower to prepay such Loan by the amount and on the date
stated therein. The Agent shall, promptly after receiving notice from the
Borrower hereunder, notify each Bank of the principal amount of the Loans held
by such Bank which are to be prepaid, the prepayment date and the manner of
application of the prepayment.
The Borrower shall reimburse each Bank on demand for any loss incurred or to be
incurred by it in the reemployment of the funds released (i) resulting from any
prepayment (for any reason whatsoever, including, without limitation,
refinancing with ABR Loans) of any Eurodollar Loan required or permitted under
this Agreement, if such Loan is prepaid other than on the last day of the
Interest Period for such Loan (including, without limitation, any such
prepayment in connection with the syndication of the credit facility evidenced
by this Agreement) or (ii) in the event that after the Borrower delivers a
notice of borrowing under Section 2.06 in respect of Eurodollar Loans, such
Loans are not made on the first day of the Interest Period specified in such
notice of borrowing for any reason other than a breach by such Bank of its
obligations hereunder. Such loss shall be the amount as reasonably determined by
such Bank as the excess, if any, of (A) the amount of interest which would have
accrued to such Bank on the amount so paid or not borrowed at a rate of interest
equal to the Adjusted LIBOR Rate for such Loan, for the period from the date of
such payment or failure to borrow to the last day (x) in the case of a payment
or refinancing with ABR Loans other than on the last day of the Interest Period
for such Loan, of the then current Interest Period for such Loan, or (y) in the
case of such failure to borrow, of the Interest Period for such Loan which would
have commenced on the date of such failure to borrow, over (B) the amount of
interest which would have accrued to such Bank on such amount by placing such
amount on deposit for a comparable period with leading banks in the London
interbank market. Each Bank shall deliver to the Borrower from time to time one
or more certificates setting forth the amount of such loss as determined by such
Bank.
26
In the event the Borrower fails to prepay any Loan on the date specified in any
prepayment notice delivered pursuant to Section 2.14(a), the Borrower on demand
by any Bank shall pay to the Agent for the account of such Bank any amounts
required to compensate such Bank for any loss incurred by such Bank as a result
of such failure to prepay, including, without limitation, any loss, cost or
expenses incurred by reason of the acquisition of deposits or other funds by
such Bank to fulfill deposit obligations incurred in anticipation of such
prepayment, but without duplication of any amounts paid under Section 2.14(b).
Each Bank shall deliver to the Borrower from time to time one or more
certificates setting forth the amount of such loss as determined by such Bank.
Any partial prepayment of the Loans by the Borrower pursuant to Sections 2.13 or
2.14 shall be applied as specified by the Borrower or, in the absence of such
specification, as determined by the Agent, provided that in the latter case no
--------
Eurodollar Loans shall be prepaid pursuant to Section 2.13 to the extent that
such Loan has an Interest Period ending after the required date of prepayment
unless and until all outstanding ABR Loans and Eurodollar Loans with Interest
Periods ending on such date have been repaid in full.
Notwithstanding anything to the contrary set forth herein, the Borrower shall
not have the right to prepay Competitive Loans.
Reserve Requirements; Change in Circumstances.
---------------------------------------------
Notwithstanding any other provision herein, if after the date of this Agreement
any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Bank of the principal
of or interest on any Eurodollar Loan made by such Bank or any fees or other
amounts payable hereunder (other than changes in respect of Taxes, Other Taxes
and taxes imposed on, or measured by, the net income or overall gross receipts
or franchise taxes of such Bank by the jurisdiction in which such Bank has its
principal office or in which the applicable lending office for such Eurodollar
Loan is located or by any political subdivision or taxing authority therein, or
by any other jurisdiction or by any political subdivision or taxing authority
therein other than a jurisdiction in which such Bank would not be subject to tax
but for the execution and performance of this Agreement), or shall impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of or credit extended by
such Bank (except any such reserve requirement which is reflected in the
Adjusted LIBOR Rate) or shall impose on such Bank or the London interbank market
any other condition affecting this Agreement or the Eurodollar Loans made by
such Bank, and the result of any of the foregoing shall be to increase the cost
to such Bank of making or maintaining any Eurodollar Loan or to reduce the
amount of any sum received or receivable by such Bank hereunder (whether of
principal, interest or otherwise) by an amount deemed by such Bank to be
material, then the Borrower will pay to such Bank in accordance with paragraph
(c) below such additional amount or amounts as will compensate such Bank for
such additional costs incurred or reduction suffered.
27
If any Bank shall have determined that the adoption or effectiveness after the
date hereof of any law, rule, regulation or guideline regarding capital
adequacy, or any change in any of the foregoing or in the interpretation or
administration of any of the foregoing by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or any lending office of such Bank) or any
Bank's holding company with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Bank's capital or on the capital of such Bank's holding company, if any,
as a consequence of this Agreement, the Loans made by such Bank pursuant hereto,
such Bank's Commitment hereunder or the issuance of, or participation in, any
Letter of Credit by such Bank to a level below that which such Bank or such
Bank's holding company could have achieved but for such adoption, change or
compliance (taking into account Bank's policies and the policies of such Bank's
holding company with respect to capital adequacy) by an amount deemed by such
Bank to be material, then from time to time the Borrower shall pay to such Bank
such additional amount or amounts as will compensate such Bank or such Bank's
holding company for any such reduction suffered.
A certificate of each Bank setting forth such amount or amounts as shall be
necessary to compensate such Bank or its holding company as specified in
paragraph (a) or (b) above, as the case may be, shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
each Bank the amount shown as due on any such certificate delivered to it within
10 days after its receipt of the same. Any Bank receiving any such payment shall
promptly make a refund thereof to the Borrower if the law, regulation, guideline
or change in circumstances giving rise to such payment is subsequently deemed or
held to be invalid or inapplicable.
Failure on the part of any Bank to demand compensation for any increased costs
or reduction in amounts received or receivable or reduction in return on capital
with respect to any period shall not constitute a waiver of such Bank's right to
demand compensation with respect to such period or any other period. The
protection of this Section shall be available to each Bank regardless of any
possible contention of the invalidity or inapplicability of the law, rule,
regulation, guideline or other change or condition which shall have occurred or
been imposed.
Change in Legality.
------------------
Notwithstanding anything to the contrary contained elsewhere in this Agreement,
if (x) any change after the date of this Agreement in any law or regulation or
in the interpretation thereof by any Governmental Authority charged with the
administration thereof shall make it unlawful for a Bank to make or maintain a
Eurodollar Loan or to give effect to its obligations as contemplated hereby with
respect to a Eurodollar Loan or (y) at any time any Bank determines that the
making or continuance of any of its Eurodollar Loans has become impracticable as
a result of a contingency occurring after the date hereof which adversely
affects the London interbank market or the position of such Bank in such market,
then, by written notice to the Borrower, such Bank may (i) declare that
Eurodollar Loans will not thereafter be made by such
28
Bank hereunder, whereupon any request by the Borrower for a Eurodollar Borrowing
shall, as to such Bank only, be deemed a request for an ABR Loan unless such
declaration shall be subsequently withdrawn; and (ii) require that all
outstanding Eurodollar Loans made by it be converted to ABR Loans, in which
event all such Eurodollar Loans shall be automatically converted to ABR Loans as
of the effective date of such notice as provided in paragraph (b) below. In the
event any Bank shall exercise its rights under clause (i) or (ii) of this
paragraph (a), all payments and prepayments of principal which would otherwise
have been applied to repay the Eurodollar Loans that would have been made by
such Bank or the converted Eurodollar Loans of such Bank shall instead be
applied to repay the ABR Loans made by such Bank in lieu of, or resulting from
the conversion of, such Eurodollar Loans.
For purposes of this Section 2.16, a notice to the Borrower by any Bank pursuant
to paragraph (a) above shall be effective, if lawful, and if any Eurodollar
Loans shall then be outstanding, on the last day of the then-current Interest
Period, otherwise, such notice shall be effective on the date of receipt by the
Borrower.
Pro Rata Treatment, etc. All payments and repayments of principal and
-----------------------
interest in respect of the Loans (except as provided in Section 2.07(a) with
respect to Competitive Loans and in Sections 2.15 and 2.16) shall be made pro
rata among the Banks in accordance with the then outstanding principal amount of
the Loans and/or participations in Letter of Credit Outstandings and all
outstanding undrawn Letters of Credit (and the unreimbursed amount of drawn
Letters of Credit) hereunder and all payments of Commitment Fees and Letter of
Credit Fees (other than those payable to a Fronting Bank) shall be made pro rata
among the Banks in accordance with their Commitments. All payments by the
Borrower hereunder shall be (i) net of any tax applicable to the Borrower or
Guarantor and (ii) made in Dollars in immediately available funds at the office
of the Agent by 12:00 noon, New York City time, on the date on which such
payment shall be due. Interest in respect of any Loan hereunder shall accrue
from and including the date of such Loan to but excluding the date on which such
Loan is paid in full or converted to a Loan of a different Type.
Taxes.
-----
Any and all payments by the Borrower or any Guarantor hereunder shall be made
free and clear of and without deduction for any and all current or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding (i) taxes imposed on or measured by the net income or
---------
overall gross receipts of the Agent or any Bank (or any transferee or assignee
thereof, including a participation holder (any such entity being called a
"Transferee")) and franchise taxes imposed on the Agent or any Bank (or
----------
Transferee) by the United States or any jurisdiction under the laws of which the
Agent or any such Bank (or Transferee) is organized or in which the applicable
lending office of any such Bank (or Transferee) is located or any political
subdivision thereof or by any other jurisdiction or by any political subdivision
or taxing authority therein other than a jurisdiction in which the Agent or such
Bank (or Transferee) would not be subject to tax but for the execution and
performance of this Agreement and (ii) taxes, levies, imposts, deductions,
charges or withholdings ("Amounts")
-------
29
with respect to payments hereunder to a Bank (or Transferee) in accordance with
laws in effect on the later of the date of this Agreement and the date such Bank
(or Transferee) becomes a Bank (or Transferee, as the case may be), but not
excluding, with respect to such Bank (or Transferee), any increase in such
Amounts solely as a result of any change in such laws occurring after such later
date or any Amounts that would not have been imposed but for actions (other than
actions contemplated by this Agreement) taken by the Borrower after such later
date (all such nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If the
-----
Borrower or any Guarantor shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder to the Banks (or any Transferee) or the
Agent, (i) the sum payable shall be increased by the amount necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) such Bank (or Transferee) or the
Agent (as the case may be) shall receive an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxing authority or other Governmental Authority in accordance with
applicable law.
In addition, the Borrower agrees to pay any current or future stamp or
documentary taxes or any other excise or property taxes, charges, assessments or
similar levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document (hereinafter referred to as "Other Taxes").
----- -----
The Borrower will indemnify each Bank (or Transferee) and the Agent for the full
amount of Taxes and Other Taxes paid by such Bank (or Transferee) or the Agent,
as the case may be, and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted by the relevant taxing
authority or other Governmental Authority. Such indemnification shall be made
within 30 days after the date any Bank (or Transferee) or the Agent, as the case
may be, makes written demand therefor. If a Bank (or Transferee) or the Agent
shall become aware that it is entitled to receive a refund in respect of Taxes
or Other Taxes as to which it has been indemnified by the Borrower pursuant to
this Section, it shall promptly notify the Borrower of the availability of such
refund and shall, within 30 days after receipt of a request by the Borrower,
apply for such refund at the Borrower's expense. If any Bank (or Transferee) or
the Agent receives a refund in respect of any Taxes or Other Taxes as to which
it has been indemnified by the Borrower pursuant to this Section, it shall
promptly notify the Borrower of such refund and shall, within 30 days after
receipt of a request by the Borrower (or promptly upon receipt, if the Borrower
has requested application for such refund pursuant hereto), repay such refund to
the Borrower (to the extent of amounts that have been paid by the Borrower under
this Section with respect to such refund plus interest that is received by the
Bank (or Transferee) or the Agent as part of the refund), net of all
out-of-pocket expenses of such Bank (or Transferee) or the Agent and without
additional interest thereon; provided that the Borrower, upon the request of
--------
such Bank (or Transferee) or the Agent, agrees to return such refund (plus
penalties, interest or other charges) to such Bank (or Transferee) or the Agent
in the event such Bank (or Transferee) or the Agent is required to repay such
refund. Nothing contained in this subsection (c) shall require any Bank
30
(or Transferee) or the Agent to make available any of its tax returns (or any
other information relating to its taxes that it deems to be confidential).
Within 30 days after the date of any payment of Taxes or Other Taxes withheld by
the Borrower in respect of any payment to any Bank (or Transferee) or the Agent,
the Borrower will furnish to the Agent, at its address referred to on the
signature pages hereof, the original or a certified copy of a receipt evidencing
payment thereof.
Without prejudice to the survival of any other agreement contained herein, the
agreements and obligations contained in this Section shall survive the payment
in full of the principal of and interest on all Loans made hereunder.
Each Bank (or Transferee) that is organized under the laws of a jurisdiction
outside the United States shall, if legally able to do so, prior to the
immediately following due date of any payment by the Borrower hereunder, deliver
to the Borrower such certificates, documents or other evidence, as required by
the Code or Treasury Regulations issued pursuant thereto, including (A) Internal
Revenue Service Form W-8 or W-9 and (B) Internal Revenue Service Form 1001 or
Form 4224 and any other certificate or statement of exemption required by
Treasury Regulation Section 1.1441-1, 1.1441-4 or 1.1441-6(c) or any subsequent
version thereof or successors thereto, properly completed and duly executed by
such Bank (or Transferee) establishing that such payment is (i) not subject to
United States Federal withholding tax under the Code because such payment is
effectively connected with the conduct by such Bank (or Transferee) of a trade
or business in the United States or (ii) totally exempt from United States
Federal withholding tax or subject to a reduced rate of such tax under a
provision of an applicable tax treaty. Unless the Borrower and the Agent have
received forms or other documents satisfactory to them indicating that such
payments hereunder are not subject to United States Federal withholding tax or
are subject to such tax at a rate reduced by an applicable tax treaty, the
Borrower or the Agent shall withhold taxes from such payments at the applicable
statutory rate.
The Borrower shall not be required to pay any additional amounts to any Bank (or
Transferee) in respect of United States Federal withholding tax pursuant to
subsection (a) above if the obligation to pay such additional amounts would not
have arisen but for a failure by such Bank (or Transferee) to comply with the
provisions of subsection (f) above.
Any Bank (or Transferee) claiming any additional amounts payable pursuant to
this Section 2.18 shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document requested by the
Borrower or to change the jurisdiction of its applicable lending office if the
making of such a filing or change would avoid the need for or reduce the amount
of any such additional amounts that may thereafter accrue and would not, in the
sole reasonable determination of such Bank (or Transferee), be otherwise
materially disadvantageous to such Bank (or Transferee).
Certain Fees. The Borrower shall pay to the Agent, for the respective
------------
accounts of the Agent and the Banks, the fees set forth in that certain letter
dated December 1, 2000 among the Agent, Chase Securities Inc. and the Borrower
at the times set forth therein.
31
Commitment Fee. The Borrower shall pay to the Banks a commitment fee (the
--------------
"Commitment Fee") for the period commencing on the date the Commitment Letter is
--------------
executed to the Termination Date or the earlier date of termination of the
Commitment, computed (on the basis of the actual number of days elapsed over a
year of 360 days) at the rate of three-eighths of one percent (3/8%) per annum
on the average daily Unused Total Commitment. Such Commitment Fee, to the extent
then accrued, shall be payable (x) monthly, in arrears, on the last calendar day
of each month, (y) on the Termination Date and (z) as provided in Section 2.10
hereof, upon any reduction or termination in whole or in part of the Total
Commitment.
Letter of Credit Fees. The Borrower shall pay with respect to each Letter
---------------------
of Credit (i) to the Agent on behalf of the Banks a fee calculated (on the basis
of the actual number of days elapsed over a year of 360 days) at the rate equal
to the Applicable Margin per annum on the daily average Letter of Credit
Outstandings, provided, that in the case of Letter of Credit Outstandings not in
--------
excess of $100,000,000, such percentage per annum shall be equal to 1.25% at all
times during which Total Facility Usage is less than $200,000,000, and (ii) to
the Fronting Bank such Fronting Bank's customary fees for issuance, amendments
and processing referred to in Section 2.03. Accrued fees described in clause
(ii) of the first sentence of this paragraph in respect of each Letter of Credit
shall be payable at times to be determined by the Fronting Bank, the Borrower
and the Agent.
Nature of Fees. All Fees shall be paid on the dates due, in immediately
--------------
available funds, to the Agent for the respective accounts of the Agent and the
Banks, as provided herein and in the letter described in Section 2.19. Once
paid, none of the Fees shall be refundable under any circumstances.
Priority and Liens. The Borrower and each of the Guarantors hereby
------------------
covenants, represents and warrants that, upon entry of the Interim Order, the
Obligations of the Borrower and the Guarantors hereunder and under the Loan
Documents and in respect of Indebtedness owed to Chase and its banking
Affiliates permitted by Section 6.03(vi): (i) pursuant to Section 364(c)(1) of
the Bankruptcy Code, shall at all times constitute allowed administrative
expense claims in the Cases having priority over all administrative expenses of
the kind specified in Sections 503(b) or 507(b) of the Bankruptcy Code; and (ii)
pursuant to Section 364(c)(2) of the Bankruptcy Code, shall at all times be
secured by a perfected first priority Lien on all cash maintained in the Letter
of Credit Account and any direct investments of the funds contained therein,
subject only to (x) in the event of the occurrence and during the continuance of
an Event of Default, the payment of allowed and unpaid professional fees and
disbursements incurred by the Borrower, the Guarantors and any statutory
committees appointed in the Cases in an aggregate amount not in excess of
$5,000,000 and (y) the payment of unpaid fees pursuant to 28 U.S.C. ss. 1930 and
to the Clerk of the Bankruptcy Court (collectively, the "Carve-Out"), provided
--------- --------
that following the Termination Date, amounts in the Letter of Credit Account
shall not be subject to the Carve-Out. The Banks agree that so long as no Event
of Default shall have occurred, the Borrower and the Guarantors shall be
permitted to pay compensation and reimbursement of expenses allowed and payable
under 11 U.S.C. ss. 330 and 11 U.S.C. ss. 331, as the same may be due and
payable, and the same shall not reduce the Carve-Out.
32
Right of Set-Off. Subject to the provisions of Section 7.01, upon the
----------------
occurrence and during the continuance of any Event of Default, the Agent and
each Bank is hereby authorized at any time and from time to time, to the fullest
extent permitted by law and without further order of or application to the
Bankruptcy Court, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by the Agent and each such Bank to or for the credit or the
account of the Borrower or any Guarantor against any and all of the obligations
of such Borrower or Guarantor now or hereafter existing under the Loan
Documents, irrespective of whether or not such Bank shall have made any demand
under any Loan Document and although such obligations may not have been
accelerated. Each Bank and the Agent agrees promptly to notify the Borrower and
Guarantors after any such set-off and application made by such Bank or by the
Agent, as the case may be, provided that the failure to give such notice shall
--------
not affect the validity of such set-off and application. The rights of each Bank
and the Agent under this Section are in addition to other rights and remedies
which such Bank and the Agent may have upon the occurrence and during the
continuance of any Event of Default.
Security Interest in Letter of Credit Account. Pursuant to Section
---------------------------------------------
364(c)(2) of the Bankruptcy Code, the Borrower and the Guarantors hereby assign
and pledge to the Agent, for its benefit and for the ratable benefit of the
Banks, and hereby grant to the Agent, for its benefit and for the ratable
benefit of the Banks, a first priority security interest, senior to all other
Liens, if any, in all of the Borrower's and the Guarantors' right, title and
interest in and to the Letter of Credit Account and any direct investment of the
funds contained therein. Cash held in the Letter of Credit Account shall not be
available for use by the Borrower, whether pursuant to Section 363 of the
Bankruptcy Code or otherwise.
Payment of Obligations. Subject to the provisions of Section 7.01, upon the
----------------------
maturity (whether by acceleration or otherwise) of any of the Obligations under
this Agreement or any of the other Loan Documents of the Borrower and the
Guarantors, the Banks shall be entitled to immediate payment of such Obligations
without further application to or order of the Bankruptcy Court.
No Discharge; Survival of Claims. Each of the Borrower and the Guarantors
--------------------------------
agrees that (i) its obligations hereunder shall not be discharged by the entry
of an order confirming a Plan of Reorganization (and each of the Borrower and
the Guarantors, pursuant to Section 1141(d)(4) of the Bankruptcy Code, hereby
waives any such discharge) and (ii) the Superpriority Claim granted to the Agent
and the Banks pursuant to the Order and described in Section 2.23 and the Liens
granted to the Agent pursuant to the Order and described in Sections 2.23 and
2.25 shall not be affected in any manner by the entry of an order confirming a
Plan of Reorganization.
REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to make Loans and issue and/or
participate in Letters of Credit hereunder, the Borrower and each of the
Guarantors jointly and severally represent and warrant as follows:
33
Organization and Authority. Each of the Borrower and the Guarantors (i) is
--------------------------
a corporation duly organized and validly existing under the laws of the State of
its incorporation and is duly qualified as a foreign corporation and is in good
standing in each jurisdiction in which the failure to so qualify would have a
material adverse effect on the financial condition, operations, business,
properties or assets of the Borrower and the Guarantors taken as a whole; (ii)
subject to the entry by the Bankruptcy Court of the Interim Order (or the Final
Order, when applicable) has the requisite corporate power and authority to
effect the transactions contemplated hereby, and by the other Loan Documents to
which it is a party, and (iii) subject to the entry by the Bankruptcy Court of
the Interim Order (or the Final Order, when applicable) has all requisite
corporate power and authority and the legal right to own, pledge, mortgage and
operate its properties, and to conduct its business as now or currently proposed
to be conducted.
Due Execution. Upon the entry by the Bankruptcy Court of the Interim Order
-------------
(or the Final Order, when applicable), the execution, delivery and performance
by each of the Borrower and the Guarantors of each of the Loan Documents to
which it is a party (i) are within the respective corporate powers of each of
the Borrower and the Guarantors, have been duly authorized by all necessary
corporate action including the consent of shareholders where required, and do
not (A) contravene the charter or by-laws of any of the Borrower or the
Guarantors, (B) violate any law (including, without limitation, the Securities
Exchange Act of 1934) or regulation (including, without limitation, Regulations
T, U or X of the Board of Governors of the Federal Reserve System), or any order
or decree of any court or governmental instrumentality, (C) conflict with or
result in a breach of, or constitute a default under, any material indenture,
mortgage or deed of trust entered into after the Filing Date or any material
lease, agreement or other instrument entered into after the Filing Date binding
on the Borrower or the Guarantors or any of their properties, or (D) result in
or require the creation or imposition of any Lien upon any of the property of
any of the Borrower or the Guarantors other than the Liens granted pursuant to
this Agreement or the Orders; and do not require the consent, authorization by
or approval of or notice to or filing or registration with any Governmental
Authority other than the entry of the Orders. Upon the entry by the Bankruptcy
Court of the Interim Order (or the Final Order, when applicable), this Agreement
has been duly executed and delivered by each of the Borrower and the Guarantors.
This Agreement is, and each of the other Loan Documents to which the Borrower
and each of the Guarantors is or will be a party, when delivered hereunder or
thereunder, will be, a legal, valid and binding obligation of the Borrower and
each Guarantor, as the case may be, enforceable against the Borrower and the
Guarantors, as the case may be, in accordance with its terms and the Orders.
Statements Made. The information that has been delivered in writing by the
---------------
Borrower or any of the Guarantors to the Agent or to the Bankruptcy Court in
connection with any Loan Document, and any financial statement delivered
pursuant hereto or thereto (other than to the extent that any such statements
constitute projections), taken as a whole and in light of the circumstances in
which made, contains no untrue statement of a material fact and does not omit to
state a material fact necessary to make such statements not misleading; and, to
the extent that any such information constitutes projections, such projections
were prepared in good faith on the
34
basis of assumptions, methods, data, tests and information believed by the
Borrower or such Guarantor to be reasonable at the time such projections were
furnished.
Financial Statements. The Borrower has furnished the Banks with copies of
--------------------
(i) the audited consolidated financial statement and schedules of the Borrower
and its consolidated Subsidiaries for the fiscal year ended December 31, 1999
and (ii) the unaudited consolidated financial statement and schedules of the
Borrower and its consolidated Subsidiaries for the fiscal quarter ended
September 30, 2000. Such financial statements present fairly the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis as of such date and for such period; such
balance sheets and the notes thereto disclose all liabilities, direct or
contingent, of the Borrower and its consolidated Subsidiaries as of the dates
thereof required to be disclosed by GAAP and such financial statements were
prepared in a manner consistent with GAAP. No material adverse change in the
operations, business, properties, assets, prospects or condition (financial or
otherwise) of the Borrower or the Borrower and its consolidated Subsidiaries,
taken as a whole, has occurred from that set forth in the Borrower's
consolidated financial statements for the fiscal quarter ended September 30,
2000 other than those which customarily occur as a result of events leading up
to and following the commencement of a proceeding under Chapter 11 of the
Bankruptcy Code and the commencement of the Cases (including, without
limitation, those reflected in the financial projections heretofore made
available to the Agent).
Ownership. Each of the Persons listed on Schedule 3.05 is a wholly-owned,
---------
direct or indirect Subsidiary of the Borrower, and the Borrower owns no other
Subsidiaries, whether directly or indirectly, other than as set forth on
Schedule 3.05.
Liens. Except for Liens existing on the Filing Date as reflected on
-----
Schedule 3.06, there are no Liens of any nature whatsoever on any assets of the
Borrower or any of the Guarantors other than: (i) Permitted Liens; (ii) Liens
permitted pursuant to Section 6.01(ii); and (iii) Liens in favor of the Agent
and the Banks on the Letter of Credit Account. Neither the Borrower nor the
Guarantors are parties to any contract, agreement, lease or instrument the
performance of which, either unconditionally or upon the happening of an event,
will result in or require the creation of a Lien on any assets of the Borrower
or any Guarantor or otherwise result in a violation of this Agreement other than
the Liens granted to the Agent and the Banks on the Letter of Credit Account as
provided for in this Agreement.
35
Compliance with Law.
-------------------
(i) The operations of the Borrower and the Guarantors comply in all material
respects with all applicable environmental, health and safety statutes and
regulations, including, without limitation, regulations promulgated under the
Resource Conservation and Recovery Act (42 U.S.C. (S)(S) 6901 et seq.); (ii) to
-- ---
the Borrower's and each of the Guarantor's knowledge, none of the operations of
the Borrower or the Guarantors is the subject of any Federal or state
investigation evaluating whether any remedial action involving a material
expenditure by the Borrower or any Guarantor is needed to respond to a release
of any Hazardous Waste or Hazardous Substance (as such terms are defined in any
applicable state or Federal environmental law or regulations) into the
environment; and (iii) to the Borrower's and each of the Guarantor's knowledge,
the Borrower and the Guarantors do not have any material contingent liability in
connection with any release of any Hazardous Waste or Hazardous Substance into
the environment.
Neither the Borrower nor any Guarantor is, to the best of its knowledge, in
violation of any law, rule or regulation, or in default with respect to any
judgment, writ, injunction or decree of any Governmental Authority the violation
of which, or a default with respect to which, would have a material adverse
effect on the financial condition, operations, business, properties or assets of
the Borrower and the Guarantors taken as a whole.
Insurance. All policies of insurance of any kind or nature owned by or
---------
issued to the Borrower and the Guarantors, including, without limitation,
policies of life, fire, theft, product liability, public liability, property
damage, other casualty, employee fidelity, workers' compensation, employee
health and welfare, title, property and liability insurance, are in full force
and effect and are of a nature and provide such coverage as is customarily
carried by companies of the size and character of the Borrower and the
Guarantors.
The Orders. On the date of the making of the initial Loans or the issuance
----------
of the initial Letters of Credit hereunder, whichever first occurs, the Interim
Order will have been entered and will not have been stayed, amended, vacated,
reversed or rescinded. On the date of the making of any Loan or the issuance of
any Letter of Credit, the Interim Order or the Final Order, as the case may be,
shall have been entered and shall not have been amended, stayed, vacated or
rescinded. Upon the maturity (whether by the acceleration or otherwise) of any
of the obligations of the Borrower and the Guarantors hereunder and under the
other Loan Documents, the Banks shall, subject to the provisions of Section
7.01, be entitled to immediate payment of such obligations, and to enforce the
remedies provided for hereunder, without further application to or order by the
Bankruptcy Court.
Use of Proceeds. The proceeds of the Loans shall be used for working
--------------
capital and for other general corporate purposes of the Borrower and the
Guarantors which shall include interrogatory loans and advances to, and the
issuance of Letters of Credit for the benefit of, the Non-filed Subsidiary,
subject, in each case, to the limitations provided for in Section 6.10 hereof.
36
Litigation. Other than as set forth on Schedule 3.11, there are no unstayed
----------
actions, suits or proceedings pending or, to the knowledge of the Borrower or
the Guarantors, threatened against or affecting the Borrower or the Guarantors
or any of their respective properties, before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, which is reasonably likely to be determined adversely to the Borrower
or the Guarantors and, if so determined adversely to the Borrower or the
Guarantors would have a material adverse effect on the financial condition,
business, properties, prospects, operations or assets of the Borrower and the
Guarantors, taken as a whole.
SECTION 1. CONDITIONS OF LENDING
Conditions Precedent to Initial Loans and Initial Letters of Credit. The
-------------------------------------------------------------------
obligation of the Banks to make the initial Loans or the Fronting Bank to issue
the initial Letter of Credit, whichever may occur first, is subject to the
following conditions precedent:
Supporting Documents. The Agent shall have received for each of the Borrower and
- --------------------
the Guarantors:
a copy of such entity's certificate of incorporation, as amended, certified as
of a recent date by the Secretary of State of the state of its incorporation;
a certificate of such Secretary of State, dated as of a recent date, as to the
good standing of and payment of taxes by that entity and as to the charter
documents on file in the office of such Secretary of State; and
a certificate of the Secretary or an Assistant Secretary of that entity dated
the date of the initial Loans or the initial Letter of Credit hereunder,
whichever first occurs, and certifying (A) that attached thereto is a true and
complete copy of the by-laws of that entity as in effect on the date of such
certification, (B) that attached thereto is a true and complete copy of
resolutions adopted by the Board of Directors of that entity authorizing the
Borrowings and Letter of Credit extensions hereunder, the execution, delivery
and performance in accordance with their respective terms of this Agreement, the
Loan Documents and any other documents required or contemplated hereunder or
thereunder and the granting of the security interest in the Letter of Credit
Account, (C) that the certificate of incorporation of that entity has not been
amended since the date of the last amendment thereto indicated on the
certificate of the Secretary of State furnished pursuant to clause (i) above and
(D) as to the incumbency and specimen signature of each officer of that entity
executing this Agreement and the Loan Documents or any other document delivered
by it in connection herewith or therewith (such certificate to contain a
certification by another officer of that entity as to the incumbency and
signature of the officer signing the certificate referred to in this clause
(iii)).
Interim Order. At the time of the making of the initial Loans or at the time of
- -------------
the issuance of the initial Letters of Credit, whichever first occurs, the Agent
and the Banks shall have received a signed copy of an order of the Bankruptcy
Court in substantially the form of Exhibit A-1 (the "Interim Order") approving
-------------
the Loan Documents and granting the Superpriority Claim status and
37
Liens on cash maintained in the Letter of Credit Account described in Section
2.23 which Interim Order (i) shall have been entered, upon an application or
motion of the Borrower reasonably satisfactory in form and substance to the
Agent, on such prior notice to such parties as may in each case be reasonably
satisfactory to the Agent, (ii) shall authorize extensions of credit in amounts
up to $150,000,000, (iii) shall approve the payment by the Borrower of all of
the Fees set forth in Section 2.19, (iv) shall be in full force and effect, and
(v) shall not have been stayed, reversed, modified or amended in any respect;
and, if the Interim Order is the subject of a pending appeal in any respect,
neither the making of such Loans nor the issuance of such Letter of Credit nor
the performance by the Borrower or any of the Guarantors of any of their
respective obligations hereunder or under the Loan Documents or under any other
instrument or agreement referred to herein shall be the subject of a presently
effective stay pending appeal.
First Day Orders. All of the "first day orders" entered by the Bankruptcy Court
- ----------------
at the time of the commencement of the Cases shall be reasonably satisfactory in
form and substance to the Agent.
Opinion of Counsel. The Agent and the Banks shall have received the favorable
- ------------------
written opinion of counsel to the Borrower and the Guarantors reasonably
acceptable to the Agent, dated the date of the initial Loans or the issuance of
the initial Letter of Credit, whichever first occurs, substantially in the form
of Exhibit B.
Payment of Fees. The Borrower shall have paid to the Agent the then unpaid
- ---------------
balance of all accrued and unpaid Fees due under and pursuant to this Agreement
and the letter referred to in Section 2.19.
Corporate and Judicial Proceedings. All corporate and judicial proceedings and
- ----------------------------------
all instruments and agreements in connection with the transactions among the
Borrower, the Guarantors, the Agent and the Banks contemplated by this Agreement
shall be reasonably satisfactory in form and substance to the Agent, and the
Agent shall have received all information and copies of all documents and
papers, including records of corporate and judicial proceedings, which the Agent
may have reasonably requested in connection therewith, such documents and papers
where appropriate to be certified by proper corporate, governmental or judicial
authorities.
Information. The Agent shall have received such information (financial or
- -----------
otherwise) as may be reasonably requested by the Agent and shall have discussed
such information with the Borrower's management and shall be satisfied with the
nature and substance of such information and such discussions.
Forecast. The Agent and the Banks shall have received from the Borrower a
- --------
forecast on a monthly basis of the Borrower's anticipated cash receipts and
disbursements for the period ending on the one year anniversary of the Filing
Date, satisfactory in form and substance to them.
Compliance with Laws. The Borrower and the Guarantors shall have granted the
- --------------------
Agent access to and the right to inspect all reports, audits and other internal
information of the Borrower and the Guarantors relating to environmental
matters, and any third party verification of certain
38
matters relating to compliance with environmental laws and regulations requested
by the Agent, and the Agent shall be reasonably satisfied that the Borrower and
the Guarantors are in compliance in all material respects with all applicable
environmental laws and regulations and be satisfied with the costs of
maintaining such compliance.
UCC Searches. The Agent shall have received UCC searches conducted in the
- ------------
jurisdictions in which the Borrower conducts business (dated as of a date
reasonably satisfactory to the Agent), reflecting the absence of Liens and
encumbrances on the assets of the Borrower other than such Liens as may be
satisfactory to the Agent.
Analysis. The Agent shall be satisfied with its analysis of the Borrower's
- --------
inventory and receivables (including, without limitation) their inventory and
receivables reporting and control systems.
Closing Documents. The Agent shall have received all documents required by this
- -----------------
Agreement reasonably satisfactory in form and substance to the Agent.
Conditions Precedent to Each Loan and Each Letter of Credit. The obligation
-----------------------------------------------------------
of the Banks to make each Loan and of the Fronting Bank to issue each Letter of
Credit, including the initial Loan and the initial Letter of Credit, is subject
to the following conditions precedent:
Notice. The Agent shall have received a notice with respect to such borrowing or
- ------
issuance, as the case may be, as required by Section 2.
Representations and Warranties. All representations and warranties contained in
- ------------------------------
this Agreement and the other Loan Documents shall be true and correct in all
material respects on and as of the date of each Borrowing or the issuance of
each Letter of Credit hereunder with the same effect as if made on and as of
such date except to the extent such representations and warranties expressly
relate to an earlier date.
No Default. On the date of each Borrowing hereunder or the issuance of each
- ----------
Letter of Credit, no Event of Default or event which upon notice or lapse of
time or both would constitute an Event of Default shall have occurred and be
continuing.
Orders. The Interim Order shall be in full force and effect and shall not have
- ------
been stayed, reversed, modified or amended in any respect without the prior
written consent of the Agent and the Required Banks, provided, that at the time
--------
of the making of any Loan or the issuance of any Letter of Credit the aggregate
amount of either of which, when added to the sum of the principal amount of all
Loans then outstanding and the Letter of Credit Outstandings, would exceed the
amount authorized by the Interim Order (collectively, the "Additional Credit"),
-----------------
the Agent and each of the Banks shall have received a certified copy of an order
of the Bankruptcy Court in substantially the form of Exhibit A-2 (the "Final
-----
Order"), which, in any event, shall have been entered by the Bankruptcy Court no
- -----
later than 45 days after the Filing Date, and at the time of the extension of
any Additional Credit the Final Order shall be in full force and effect, and
shall not have been stayed, reversed, modified or amended in any respect without
the prior written consent
39
of the Agent and the Required Banks; and if either the Interim Order or the
Final Order is the subject of a pending appeal in any respect, neither the
making of the Loans nor the issuance of any Letter of Credit nor the performance
by the Borrower or any Guarantor of any of their respective obligations under
any of the Loan Documents shall be the subject of a presently effective stay
pending appeal.
Payment of Fees. The Borrower shall have paid to the Agent the then unpaid
- ---------------
balance of all accrued and unpaid Fees then payable under and pursuant to this
Agreement and the letter referred to in Section 2.19.
Borrowing Base Certificate. Following the entry of the Final Order, the Agent
- --------------------------
shall have received the timely delivery of the most recent Borrowing Base
Certificate (delivered no more than thirty (30) days prior to the making of a
Loan or the issuance of a Letter of Credit) required to be delivered hereunder.
The request by the Borrower for, and the acceptance by the Borrower of, each
extension of credit hereunder shall be deemed to be a representation and
warranty by the Borrower that the conditions specified in this Section have been
satisfied or waived at that time.
AFFIRMATIVE COVENANTS
From the date hereof and for so long as any Commitment shall be in
effect or any Letter of Credit shall remain outstanding (in a face amount in
excess of the amount of cash then held in the Letter of Credit Account, or in
excess of the face amount of back-to-back letters of credit delivered, in each
case pursuant to Section 2.03(b)), or any amount shall remain outstanding or
unpaid under this Agreement, the Borrower and each of the Guarantors agree that,
unless the Required Banks shall otherwise consent in writing, the Borrower and
each of the Guarantors will:
Financial Statements, Reports, etc. Deliver to the Agent and each of the
----------------------------------
Banks:
within 90 days after the end of each fiscal year, the Borrower's stand alone and
the Borrower's consolidated balance sheet and related statement of income and
cash flows, showing the financial condition of the Borrower alone and the
Borrower and its consolidated Subsidiaries on a consolidated basis,
respectively, as of the close of such fiscal year and the results of their
respective operations during such year, the statement of the Borrower and the
consolidated statement of the Borrower to be audited for the Borrower by KPMG
LLP independent public accountants of recognized national standing acceptable to
the Required Banks and accompanied, in each case, by an opinion of such
accountants (which shall not be qualified in any material respect other than
with respect to the Cases or a going concern qualification) and to be certified
by a Financial Officer of the Borrower to the effect that such financial
statements fairly present the financial condition and results of operations of
the Borrower alone and the Borrower and its consolidated Subsidiaries on a
consolidated basis, respectively, in accordance with GAAP;
40
within 45 days after the end of each of the first three fiscal quarters and
within 90 days after the end of the fourth fiscal quarter of each fiscal year,
the Borrower's stand alone and the Borrower's consolidated balance sheets and
related statements of income and cash flows, showing the financial condition of
the Borrower alone and the Borrower and its consolidated Subsidiaries on a
consolidated basis as of the close of such fiscal quarter and the results of
their operations during such fiscal quarter and the then elapsed portion of the
fiscal year, each certified by a Financial Officer as fairly presenting the
financial condition and results of operations of the Borrower alone and the
Borrower and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP, subject to normal year-end audit adjustments;
concurrently with any delivery of financial statements under (a) or (b) above as
applicable, (i) a certificate of a Financial Officer certifying such statements
(A) certifying that no Event of Default or event which upon notice or lapse of
time or both would constitute an Event of Default has occurred, or, if such an
Event of Default or event has occurred, specifying the nature and extent thereof
and any corrective action taken or proposed to be taken with respect thereto and
(B) setting forth computations in reasonable detail satisfactory to the Agent
demonstrating compliance with the provisions of Sections 6.03, 6.04, 6.05 and
6.10 and (ii) a certificate (which certificate may be limited to accounting
matters and disclaim responsibility for legal interpretations) of such
accountants accompanying the audited consolidated financial statements delivered
under (a) above certifying that, in the course of the regular audit of the
business of the Borrower and its Subsidiaries, such accountants have obtained no
knowledge that an Event of Default has occurred and is continuing, or if, in the
opinion of such accountants, an Event of Default has occurred and is continuing,
specifying the nature thereof and all relevant facts with respect thereto;
as soon as available, but no more than 45 days after the end of each of the
first three fiscal quarters and within 90 days after the end of the fourth
fiscal quarter of each fiscal year, the unaudited quarterly cash flow reports of
the Borrower and the Guarantors on a consolidated basis and as of the close of
such fiscal quarter and the results of their operations during such fiscal
period and the then elapsed portion of the fiscal year;
at all times during which Total Facility Usage exceeds $50,000,000, not later
than the first business day of each week a weekly report satisfactory to the
Agent reflecting the Borrower's collected cash balances and cash equivalents as
of Friday of the immediately preceding week;
as soon as possible, and in any event within 45 days of the Closing Date,
separate consolidated pro forma balance sheets of the Borrower's and the
--- -----
Guarantors' financial condition as of the Filing Date;
as soon as possible, and in any event not later than 90 days after the filing
date, the Agent shall have received audited financial statements for the
Borrower alone for the fiscal year ended December 31, 1999;
not later than the first anniversary of the Filing Date, an annual update for
the period through the Maturity Date of the forecast delivered to the Agent
pursuant to Section 4.01(h), and prompt
41
notice of any changes to such forecast or updates thereof, in each case
satisfactory in form and substance to the Agent;
promptly after the same become publicly available, copies of all periodic and
other reports, proxy statements and other materials filed by the Borrower with
the Securities and Exchange Commission, or any governmental authority succeeding
to any of or all the functions of said commission, or with any national
securities exchange, as the case may be;
as soon as available and in any event (A) within 30 days after the Borrower or
any of its ERISA Affiliates knows or has reason to know that any Termination
Event described in clause (i) of the definition of Termination Event with
respect to any Single Employer Plan of the Borrower or such ERISA Affiliate has
occurred and (B) within 10 days after the Borrower or any of its ERISA
Affiliates knows or has reason to know that any other Termination Event with
respect to any such Plan has occurred, a statement of a Financial Officer of the
Borrower describing such Termination Event and the action, if any, which the
Borrower or such ERISA Affiliate proposes to take with respect thereto;
promptly and in any event within 10 days after receipt thereof by the Borrower
or any of its ERISA Affiliates from the PBGC copies of each notice received by
the Borrower or any such ERISA Affiliate of the PBGC's intention to terminate
any Single Employer Plan of the Borrower or such ERISA Affiliate or to have a
trustee appointed to administer any such Plan;
if requested by the Agent, promptly and in any event within 30 days after the
filing thereof with the Internal Revenue Service, copies of each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) with respect to
each Single Employer Plan of the Borrower or any of its ERISA Affiliates;
within 10 days after notice is given or required to be given to the PBGC under
Section 302(f)(4)(A) of ERISA of the failure of the Borrower or any of its ERISA
Affiliates to make timely payments to a Plan, a copy of any such notice filed
and a statement of a Financial Officer of the Borrower setting forth (A)
sufficient information necessary to determine the amount of the lien under
Section 302(f)(3), (B) the reason for the failure to make the required payments
and (C) the action, if any, which the Borrower or any of its ERISA Affiliates
proposed to take with respect thereto;
promptly and in any event within 10 days after receipt thereof by the Borrower
or any ERISA Affiliate from a Multiemployer Plan sponsor, a copy of each notice
received by the Borrower or any ERISA Affiliate concerning (A) the imposition of
Withdrawal Liability by a Multiemployer Plan, (B) the determination that a
Multiemployer Plan is, or is expected to be, in reorganization within the
meaning of Title IV of ERISA, (C) the termination of a Multiemployer Plan within
the meaning of Title IV of ERISA, or (D) the amount of liability incurred, or
which may be incurred, by the Borrower or any ERISA Affiliate in connection with
any event described in clause (A), (B) or (C) above;
42
promptly, from time to time, such other information regarding the operations,
business affairs and financial condition of the Borrower or any Guarantor
(including, without limitation, reports satisfactory to the Agent with respect
to environmental matters), or compliance with the terms of any material loan or
financing agreements as the Agent, at the request of any Bank, may reasonably
request;
furnish to the Agent and its counsel promptly after the same is available,
copies of all pleadings, motions, applications, judicial information, financial
information and other documents filed by or on behalf of the Borrower or any of
the Guarantors with the Bankruptcy Court in the Cases, or distributed by or on
behalf of the Borrower or any of the Guarantors to any official committee
appointed in the Cases.
Corporate Existence. Preserve and maintain in full force and effect all
-------------------
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its business except
(i)(A) if in the reasonable business judgment of the Borrower or its subsidiary,
as the case may be, it is in its best economic interest not to preserve and
maintain such rights, privileges, qualifications, permits, licenses and
franchises, and (B) such failure to preserve the same could not, in the
aggregate, reasonably be expected to have a material adverse effect on the
operations, business, properties, assets, prospects or condition (financial or
otherwise) of the Borrower and the Guarantors, taken as a whole, and (ii) as
otherwise permitted in connection with sales of assets permitted by Section
6.11.
Insurance. (a) Keep its insurable properties insured at all times, against
---------
such risks, including fire and other risks insured against by extended coverage,
as is customary with companies of the same or similar size in the same or
similar businesses; and maintain in full force and effect public liability
insurance against claims for personal injury or death or property damage
occurring upon, in, about or in connection with the use of any properties owned,
occupied or controlled by the Borrower or any Guarantor, as the case may be, in
such amounts and with such deductibles as are customary with companies of the
same or similar size in the same or similar businesses and in the same
geographic area; and (b) maintain such other insurance or self insurance as may
be required by law.
Obligations and Taxes. With respect to the Borrower and each Guarantor, pay
---------------------
all its material obligations arising after the Filing Date promptly and in
accordance with their terms and pay and discharge promptly all material taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property arising after the Filing Date,
before the same shall become in default, as well as all material lawful claims
for labor, materials and supplies or otherwise arising after the Filing Date
which, if unpaid, would become a Lien or charge upon such properties or any part
thereof; provided, however, that the Borrower and each Guarantor shall not be
required to pay and discharge or to cause to be paid and discharged any such
tax, assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings (if the Borrower and
the Guarantors shall have set aside on their books adequate reserves therefor).
43
Notice of Event of Default, etc. Promptly give to the Agent notice in
-------------------------------
writing of any Event of Default or the occurrence of any event or circumstance
which with the passage of time or giving of notice or both would constitute an
Event of Default.
Access to Books and Records. Maintain or cause to be maintained at all
---------------------------
times true and complete books and records in accordance with GAAP of the
financial operations of the Borrower and the Guarantors; and provide the Agent
and its representatives access to all such books and records during regular
business hours, in order that the Agent may examine and make abstracts from such
books, accounts, records and other papers for the purpose of verifying the
accuracy of the various reports delivered by the Borrower or the Guarantors to
the Agent or the Banks pursuant to this Agreement or for otherwise ascertaining
compliance with this Agreement; and at any reasonable time and from time to time
during regular business hours, upon reasonable notice, permit the Agent and any
agents or representatives (including, without limitation, appraisers) thereof
and the Banks to visit the properties of the Borrower and the Guarantors.
Borrowing Base Certificate. After the entry of the Final Order furnish to
--------------------------
the Agent as soon as available and in any event (i) within that number of days
after the end of each month that is agreed upon by the Borrower and the Agent,
of each month, a monthly Borrowing Base Certificate as of the last day of such
month, (ii) if requested by the Agent at any other time when the Agent
reasonably believes that the then existing Borrowing Base Certificate is
materially inaccurate, as soon as reasonably available but in no event later
than that number of Business Days after such request that is agreed upon by the
Borrower and the Agent, a Borrowing Base Certificate showing the Borrowing Base
as of the date so requested, in each case with supporting documentation, and
(iii) such other supporting documentation and additional reports with respect to
the Borrowing Base as the Agent shall reasonably request.
Collateral Monitoring and Review. At any time upon the request of the
--------------------------------
Agent, permit the Agent or professionals (including consultants, accountants and
appraisers) retained by the Agent or its professionals to conduct evaluations
and appraisals of (i) the Borrower's practices in the computation of the
Borrowing Base and (ii) the assets included in the Borrowing Base, and pay the
reasonable fees and expenses in connection therewith (including, without
limitation, the reasonable and customary fees and expenses associated with the
Agent's Collateral Agent Services Group). In connection with any collateral
monitoring or review and appraisal relating to the computation of the Borrowing
Base, the Borrower shall make such adjustments to the Borrowing Base as the
Agent shall reasonably require based upon the terms of this Agreement and
results of such collateral monitoring, review or appraisal.
Projections. As soon as practicable, and in any event not later than
-----------
January 15, 2001, furnish to the Agent the Borrower's projections prepared on a
quarterly basis for the period through the Maturity Date which shall be
satisfactory in form and substance to the Agent, and make its senior officers
available to discuss the same with the Agent upon the Agent's reasonable
request.
NEGATIVE COVENANTS
44
From the date hereof and for so long as any Commitment shall be in
effect or any Letter of Credit shall remain outstanding (in a face amount in
excess of the amount of cash then held in the Letter of Credit Account, or in
excess of the face amount of back-to-back letters of credit delivered, in each
case pursuant to Section 2.03(b)) or any amount shall remain outstanding or
unpaid under this Agreement, unless the Required Banks shall otherwise consent
in writing, the Borrower and each of the Guarantors will not (and will not apply
to the Bankruptcy Court for authority to):
Liens. Incur, create, assume or suffer to exist any Lien on any asset of
-----
the Borrower or the Guarantors, now owned or hereafter acquired by the Borrower
or any of such Guarantors, or permit any Domestic Subsidiary so to do other than
(i) Liens which were existing on the Filing Date as reflected on Schedule 3.06
hereto; (ii) Permitted Liens; (iii) Liens on cash maintained in the Letter of
Credit Account in favor of the Agent and the Banks; (iv) Liens securing purchase
money Indebtedness or Capitalized Leases permitted by Section 6.03(iv); (v) in
the case of Domestic Subsidiaries, Liens securing obligations outstanding in a
principal amount not in excess of $50,000,000 in the aggregate for all of such
Domestic Subsidiaries; and (vi) in the case of Domestic Subsidiaries, Liens in
favor of the Borrower.
Merger, etc. Consolidate or merge with or into another Person or permit any
-----------
of the Non-filed Subsidiaries so to do, except that (i) any Non-filed Subsidiary
may merge with or into any other Non-filed Subsidiary or (ii) or any Non-filed
Subsidiary may merge or consolidate in connection with asset dispositions
permitted pursuant to Section 6.11.
Indebtedness. Contract, create, incur, assume or suffer to exist any
------------
Indebtedness, or permit any of the Domestic Subsidiaries so to do, except for
(i) Indebtedness under this Agreement; (ii) in the case of the Borrower and the
Guarantors, Indebtedness incurred prior to the Filing Date (including existing
Capitalized Leases); (iii) intercompany Indebtedness between the Borrower and
the Guarantors, (iv) in the case of the Borrower, Indebtedness incurred
subsequent to the Filing Date secured by purchase money Liens or Capitalized
Leases in an aggregate amount not to exceed $15,000,000 to the extent permitted
by Section 6.04; (v) Indebtedness arising from Investments among the Borrower
and the Domestic Subsidiaries that are permitted hereunder; (vi) post-petition
Indebtedness owed to banks or other financial institutions in respect of any
overdrafts and related liabilities arising from treasury, depository and cash
management services or in connection with any automated clearing house transfers
of funds; (vii) hedging and foreign exchange transactions entered into in the
ordinary course of business consistent with past practices; and (viii) in the
case of the Domestic Subsidiaries, Indebtedness incurred prior to the Filing
Date and set forth on Schedule 6.03 hereto, refinancings thereof, purchase money
Indebtedness or Capitalized Leases and other Indebtedness in an aggregate amount
not in excess of $50,000,000 for all of such Domestic Subsidiaries.
Capital Expenditures. Make, or permit the Non-filed Subsidiaries to make,
--------------------
Capital Expenditures in excess of $170,000,000 in the aggregate in any fiscal
year.
45
Leverage Ratio. Permit the ratio of Net Debt on any day to the Borrower's
--------------
Cumulative Cash Flow for the then most recently ended four (4) fiscal quarters
to be greater than 2.50 to 1 at any time.
Guarantees and Other Liabilities. Purchase or repurchase (or agree,
--------------------------------
contingently or otherwise, so to do) the Indebtedness of, or assume, guarantee
(directly or indirectly or by an instrument having the effect of assuring
another's payment or performance of any obligation or capability of so doing, or
otherwise), endorse or otherwise become liable, directly or indirectly, in
connection with the obligations, stock or dividends of any Person, except (i)
for any guaranty of Indebtedness or other obligations of any Borrower, Guarantor
or Non-filed Subsidiary if such guarantor could have incurred such Indebtedness
or obligations under this Agreement and (ii) by endorsement of negotiable
instruments for deposit or collection in the ordinary course of business.
Chapter 11 Claims. Incur, create, assume, suffer to exist or permit any
-----------------
other Super-Priority Claim which is pari passu with or senior to the claims of
---- -----
the Agent and the Banks against the Borrower and the Guarantors hereunder,
except for the Carve-Out.
Dividends; Capital Stock. Declare or pay, directly or indirectly, any
------------------------
dividends or make any other distribution or payment, whether in cash, property,
securities or a combination thereof, with respect to (whether by reduction of
capital or otherwise) any shares of capital stock (or any options, warrants,
rights or other equity securities or agreements relating to any capital stock),
or set apart any sum for the aforesaid purposes, provided that any Guarantor may
--------
pay dividends to the Borrower.
Transactions with Affiliates. Sell or transfer any property or assets to,
----------------------------
or otherwise engage in any other material transactions with, any of its
Affiliates (other than the Borrower and its Subsidiaries), other than in the
ordinary course of business at prices and on terms and conditions not less
favorable to the Borrower or such Guarantor than could be obtained on an
arm's-length basis from unrelated third parties.
Investments, Loans, Advances and Acquisitions. Purchase, hold or acquire
---------------------------------------------
any capital stock, evidences of indebtedness or other securities of, make or
permit to exist any loans or advances to, or make or permit to exist any
investment in, any other Person (all of the foregoing, "Investments") or make
-----------
any acquisitions of assets other than in the ordinary course of business or
except to the extent permitted by Section 6.04, except for (i) Permitted
Investments, (ii) advances and loans among the Borrower and the Guarantors in
the ordinary course of business consistent with past practices and (iii)
advances and loans by the Borrower or the Guarantors to Non-filed Subsidiaries
in the ordinary course of business consistent with past practices, provided that
loans, advances and capital contribution after the Closing Date to Non-filed
Subsidiaries made from the proceeds of Loans plus Letters of Credit issued for
----
the exclusive benefit of Non-filed Subsidiaries shall not exceed $100,000,000 at
any one time outstanding.
Disposition of Assets. Sell or otherwise dispose of any assets (including,
---------------------
without limitation, the capital stock of any Subsidiary) or permit any of the
Non-filed Subsidiaries so to
46
do except for (i) sales of inventory, fixtures and equipment in the ordinary
course of business, (ii) sales of surplus equipment no longer used in
production, (iii) in the case of the Borrower and the Guarantors, sales of other
assets on an arm's-length basis for consideration in an amount not less than the
fair market value thereof if the aggregate purchase price for all of such other
assets does not exceed $75,000,000, and (iv) in the case of Non-filed
Subsidiaries, the sale or other disposition of (x) the cabinets division of
Triangle Pacific Corp. and the textile and sports business of the Borrowers'
European Subsidiaries and (y) sales of other assets on an arm's-length basis for
consideration in an amount not less than the fair market value thereof if the
aggregate purchase price for all of such other assets referred to in this clause
(y) does not exceed $150,000,000.
Nature of Business. Modify or alter in any material manner the nature and
------------------
type of its business as conducted at or prior to the Filing Date or the manner
in which such business is conducted (except as required by the Bankruptcy Code),
it being understood that asset sales permitted by Section 6.11 shall not
constitute such a material modification or alteration.
EVENTS OF DEFAULT
Events of Default. In the case of the happening of any of the following
-----------------
events and the continuance thereof beyond the applicable period of grace if any
(each, an "Event of Default"):
----------------
any material representation or warranty made by the Borrower or any Guarantor in
this Agreement or in any Loan Document or in connection with this Agreement or
the credit extensions hereunder or any material statement or representation made
in any report, financial statement, certificate or other document furnished by
the Borrower or any Guarantors to the Banks under or in connection with this
Agreement, shall prove to have been false or misleading in any material respect
when made or delivered; or
default shall be made in the payment of any (i) Fees or interest on the Loans
when due, and such default shall continue unremedied for more than two (2)
Business Days or (ii) principal of the Loans or other amounts payable by the
Borrower hereunder (including, without limitation, reimbursement obligations or
cash collateralization in respect of Letters of Credit), when and as the same
shall become due and payable, whether at the due date thereof (including the
Prepayment Date) or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise; or
default shall be made by the Borrower or any Guarantor in the due observance or
performance of any covenant, condition or agreement contained in Section 6
hereof; or
default shall be made by the Borrower or any Guarantor in the due observance or
performance of any other covenant, condition or agreement to be observed or
performed pursuant to the terms of this Agreement or any of the other Loan
Documents and such default shall continue unremedied for more than ten (10)
days; or
47
any of the Cases shall be dismissed or converted to a case under Chapter 7 of
the Bankruptcy Code or the Borrower or any Guarantor shall file a motion or
other pleading seeking the dismissal of any of the Cases under Section 1112 of
the Bankruptcy Code or otherwise; a trustee under Chapter 7 or Chapter 11 of the
Bankruptcy Code, a responsible officer or an examiner with enlarged powers
relating to the operation of the business (powers beyond those set forth in
Section 1106(a)(3) and (4) of the Bankruptcy Code) under Section 1106(b) of the
Bankruptcy Code shall be appointed in any of the Cases and the order appointing
such trustee, responsible officer or examiner shall not be reversed or vacated
within 30 days after the entry thereof; or an application shall be filed by the
Borrower or any Guarantor for the approval of any other Super-Priority Claim
(other than the Carve-Out) in any of the Cases which is pari passu with or
---- -----
senior to the claims of the Agent and the Banks against the Borrower or any
Guarantor hereunder, or there shall arise or be granted any such pari passu or
---- -----
senior Super-Priority Claim; or
the Bankruptcy Court shall enter an order or orders granting relief from the
automatic stay applicable under Section 362 of the Bankruptcy Code to the holder
or holders of any security interest to permit foreclosure (or the granting of a
deed in lieu of foreclosure or the like) on any assets of the Borrower or any of
the Guarantors which have a value in excess of $500,000 in the aggregate; or
a Change of Control shall occur; or
the Borrower shall fail to deliver a certified Borrowing Base Certificate when
due and such default shall continue unremedied for more than three (3) Business
Days; or
any material provision of any Loan Document shall, for any reason, cease to be
valid and binding on the Borrower or any of the Guarantors, or the Borrower or
any of the Guarantors shall so assert in any pleading filed in any court; or
an order of the Bankruptcy Court shall be entered reversing, amending,
supplementing, staying for a period in excess of 10 days, vacating or otherwise
modifying either of the Orders without the prior written consent of the Agent
and the Required Banks; or
any judgment or order as to a post-petition liability or debt for the payment of
money in excess of $1,000,000 shall be rendered against the Borrower or any of
the Guarantors and shall not be satisfied and the enforcement thereof shall not
have been stayed; or
any non-monetary judgment or order with respect to a post-petition event shall
be rendered against the Borrower or any of the Guarantors which does or would
reasonably be expected to (i) cause a material adverse change in the financial
condition, business, prospects, operations or assets of the Borrower and the
Guarantors taken as a whole on a consolidated basis, (ii) have a material
adverse effect on the ability of the Borrower or any of the Guarantors to
perform their respective obligations under any Loan Document, or (iii) have a
material adverse effect on the rights and remedies of the Agent or any Bank
under any Loan Document, and there shall be any period of 10 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
48
except as permitted by the Orders, the Borrower or the Guarantors shall make any
Pre-Petition Payment other than Pre-Petition Payments authorized by the
Bankruptcy Court (v) in accordance with other "first day" orders reasonably
satisfactory to the Agent, (w) not in excess $25,000,000 in respect of certain
critical vendors, (x) in connection with the assumption of executory contracts
and unexpired leases, (y) in respect of accrued payroll and related expenses and
employee benefits as of the Filing Date and (z) not in excess of $3,000,000 in
respect of other obligations; or
any Termination Event described in clauses (iii) or (iv) of the definition of
such term shall have occurred and shall continue unremedied for more than 10
days and the sum (determined as of the date of occurrence of such Termination
Event) of the Insufficiency of the Plan in respect of which such Termination
Event shall have occurred and be continuing and the Insufficiency of any and all
other Plans with respect to which such a Termination Event (described in such
clauses (iii) or (iv)) shall have occurred and then exist is equal to or greater
than $5,000,000; or
(i) the Borrower or any ERISA Affiliate thereof shall have been notified by the
sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to
such Multiemployer Plan, (ii) the Borrower or such ERISA Affiliate does not have
reasonable grounds to contest such Withdrawal Liability and is not in fact
contesting such Withdrawal Liability in a timely and appropriate manner, and
(iii) the amount of such Withdrawal Liability specified in such notice, when
aggregated with all other amounts required to be paid to Multiemployer Plans in
connection with Withdrawal Liabilities (determined as of the date of such
notification), exceeds $5,000,000 allocable to post-petition obligations or
requires payments exceeding $500,000 per annum in excess of the annual payments
made with respect to such Multiemployer Plans by the Borrower or such ERISA
Affiliate for the plan year immediately preceding the plan year in which such
notification is received; or
the Borrower or any ERISA Affiliate thereof shall have been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
if as a result of such reorganization or termination the aggregate annual
contributions of the Borrower and its ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the plan
years that include the date hereof by an amount exceeding $5,000,000; or
the Borrower or any ERISA Affiliate shall have committed a failure described in
Section 302(f)(1) of ERISA (other than the failure to make any contribution
accrued and unpaid as of the Filing Date) and the amount determined under
Section 302(f)(3) of ERISA is equal to or greater than $5,000,000; or
it shall be determined (whether by the Bankruptcy Court or by any other judicial
or administrative forum) that the Borrower or any Guarantor is liable for the
payment of claims arising out of any failure to comply (or to have complied)
with applicable environmental laws or regulations the payment of which will have
a material adverse effect on the financial condition,
49
business, properties, operations or assets of the Borrower or the Borrower and
its Subsidiaries, taken as a whole, and the enforcement thereof shall not have
been stayed;
then, and in every such event and at any time thereafter during the continuance
of such event, and without further order of or application to the Bankruptcy
Court, the Agent may, and at the request of the Required Banks, shall, by notice
to the Borrower (with a copy to counsel for any statutory committee appointed in
the Cases and to the United States Trustee for the District of Delaware), take
one or more of the following actions, at the same or different times (provided,
that with respect to clause (iv) below, the Agent shall provide the Borrower
(with a copy to counsel for any statutory committee appointed in the Cases and
to the United States Trustee for the District of Delaware with five (5) Business
Days' written notice prior to taking the action contemplated thereby and
provided, further, that upon receipt of notice referred to in the immediately
- -------- -------
preceding clause with respect to the accounts referred to in clause (iv) below,
the Borrower may continue to make ordinary course disbursements from such
accounts (other than the Letter of Credit Account) but may not withdraw or
disburse any other amounts from such accounts): (i) terminate forthwith the
Total Commitment; (ii) declare the Loans then outstanding to be forthwith due
and payable, whereupon the principal of the Loans together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of the Borrower
accrued hereunder and under any other Loan Document, shall become forthwith due
and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by the Borrower and the
Guarantors, anything contained herein or in any other Loan Document to the
contrary notwithstanding; (iii) require the Borrower and the Guarantors upon
demand to forthwith deposit in the Letter of Credit Account cash in an amount
which, together with any amounts then held in the Letter of Credit Account, is
equal to the sum of 105% of the then Letter of Credit Outstandings (and to the
extent the Borrower and the Guarantors shall fail to furnish such funds as
demanded by the Agent, the Agent shall be authorized to debit the accounts of
the Borrower and the Guarantors maintained with the Agent in such amount five
(5) Business Days after the giving of the notice referred to above); (iv)
set-off amounts in the Letter of Credit Account or any other accounts maintained
with the Agent and apply such amounts to the obligations of the Borrower and the
Guarantors hereunder and in the other Loan Documents; and (v) exercise any and
all remedies under the Loan Documents and under applicable law available to the
Agent and the Banks.
THE AGENT
Administration by Agent. The general administration of the Loan Documents
-----------------------
shall be by the Agent. Each Bank hereby irrevocably authorizes the Agent, at its
discretion, to take or refrain from taking such actions as agent on its behalf
and to exercise or refrain from exercising such powers under the Loan Documents
as are delegated by the terms hereof or thereof, as appropriate, together with
all powers reasonably incidental thereto. The Agent shall have no duties or
responsibilities except as set forth in this Agreement and the remaining Loan
Documents.
Advances and Payments
---------------------
50
On the date of each Loan, the Agent shall be authorized (but not obligated) to
advance, for the account of each of the Banks, the amount of the Loan to be made
by it in accordance with its Commitment hereunder. Should the Agent do so, each
of the Banks agrees forthwith to reimburse the Agent in immediately available
funds for the amount so advanced on its behalf by the Agent, together with
interest at the Federal Funds Effective Rate if not so reimbursed on the date
due from and including such date but not including the date of reimbursement.
Any amounts received by the Agent in connection with this Agreement (other than
amounts to which the Agent is entitled pursuant to Sections 2.19, 8.06, 10.05
and 10.06), the application of which is not otherwise provided for in this
Agreement shall be applied, first, in accordance with each Bank's Commitment
-----
Percentage to pay accrued but unpaid Commitment Fees or Letter of Credit Fees,
and second, in accordance with each Bank's Commitment Percentage to pay accrued
------
but unpaid interest and the principal balance outstanding and all unreimbursed
Letter of Credit drawings. All amounts to be paid to a Bank by the Agent shall
be credited to that Bank, after collection by the Agent, in immediately
available funds either by wire transfer or deposit in that Bank's correspondent
account with the Agent, as such Bank and the Agent shall from time to time
agree.
Sharing of Setoffs. Each Bank agrees that if it shall, through the exercise
------------------
of a right of banker's lien, setoff or counterclaim against the Borrower,
including, but not limited to, a secured claim under Section 506 of the
Bankruptcy Code or other security or interest arising from, or in lieu of, such
secured claim and received by such Bank under any applicable bankruptcy,
insolvency or other similar law, or otherwise, obtain payment in respect of its
Loans (other than Competitive Loans unless an Event of Default shall have
occurred and be continuing) as a result of which the unpaid portion of its Loans
is proportionately less than the unpaid portion of the Loans of any other Bank
(a) it shall promptly purchase at par (and shall be deemed to have thereupon
purchased) from such other Bank a participation in the Loans of such other Bank,
so that the aggregate unpaid principal amount of each Bank's Loans and its
participation in Loans of the other Banks shall be in the same proportion to the
aggregate unpaid principal amount of all Loans then outstanding as the principal
amount of its Loans prior to the obtaining of such payment was to the principal
amount of all Loans outstanding prior to the obtaining of such payment and (b)
such other adjustments shall be made from time to time as shall be equitable to
ensure that the Banks share such payment pro-rata, provided that if any such
non-pro-rata payment is thereafter recovered or otherwise set aside such
purchase of participations shall be rescinded (without interest). The Borrower
expressly consents to the foregoing arrangements and agrees that any Bank
holding (or deemed to be holding) a participation in a Loan may exercise any and
all rights of banker's lien, setoff (in each case, subject to the same notice
requirements as pertain to clause (iv) of the remedial provisions of Section
7.01) or counterclaim with respect to any and all moneys owing by the Borrower
to such Bank as fully as if such Bank held a Note and was the original obligee
thereon, in the amount of such participation.
Agreement of Required Banks. Upon any occasion requiring or permitting an
---------------------------
approval, consent, waiver, election or other action on the part of the Required
Banks, action shall be taken by the Agent for and on behalf or for the benefit
of all Banks upon the direction of the Required
51
Banks, and any such action shall be binding on all Banks. No amendment,
modification, consent, or waiver shall be effective except in accordance with
the provisions of Section 10.10.
Liability of Agent.
------------------
The Agent when acting on behalf of the Banks, may execute any of its respective
duties under this Agreement by or through any of its respective officers,
agents, and employees, and neither the Agent nor its directors, officers,
agents, employees or Affiliates shall be liable to the Banks or any of them for
any action taken or omitted to be taken in good faith, or be responsible to the
Banks or to any of them for the consequences of any oversight or error of
judgment, or for any loss, unless the same shall happen through its gross
negligence or willful misconduct. The Agent and its respective directors,
officers, agents, employees and Affiliates shall in no event be liable to the
Banks or to any of them for any action taken or omitted to be taken by them
pursuant to instructions received by them from the Required Banks or in reliance
upon the advice of counsel selected by it. Without limiting the foregoing,
neither the Agent, nor any of its respective directors, officers, employees,
agents or Affiliates shall be responsible to any Bank for the due execution,
validity, genuineness, effectiveness, sufficiency, or enforceability of, or for
any statement, warranty, or representation in, this Agreement, any Loan Document
or any related agreement, document or order, or shall be required to ascertain
or to make any inquiry concerning the performance or observance by the Borrower
of any of the terms, conditions, covenants, or agreements of this Agreement or
any of the Loan Documents.
Neither the Agent nor any of its respective directors, officers, employees,
agents or Affiliates shall have any responsibility to the Borrower or the
Guarantors on account of the failure or delay in performance or breach by any
Bank or by the Borrower or the Guarantors of any of their respective obligations
under this Agreement or any of the Loan Documents or in connection herewith or
therewith.
The Agent, in its capacity as Agent hereunder, shall be entitled to rely on any
communication, instrument, or document reasonably believed by such person to be
genuine or correct and to have been signed or sent by a person or persons
believed by such person to be the proper person or persons, and such person
shall be entitled to rely on advice of legal counsel, independent public
accountants, and other professional advisers and experts selected by such
person.
Reimbursement and Indemnification. Each Bank agrees (i) to reimburse (x)
---------------------------------
the Agent for such Bank's Commitment Percentage of any expenses and fees
incurred for the benefit of the Banks under this Agreement and any of the Loan
Documents, including, without limitation, counsel fees and compensation of
agents and employees paid for services rendered on behalf of the Banks, and any
other expense incurred in connection with the operations or enforcement thereof
not reimbursed by the Borrower or the Guarantors and (y) the Agent for such
Bank's Commitment Percentage of any expenses of the Agent incurred for the
benefit of the Banks that the Borrower has agreed to reimburse pursuant to
Section 10.05 and has failed to so reimburse and (ii) to indemnify and hold
harmless the Agent and any of its directors, officers, employees, agents or
Affiliates, on demand, in the amount of its proportionate share, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs,
52
expenses, or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against it or any of them in any way relating to or
arising out of this Agreement or any of the Loan Documents or any action taken
or omitted by it or any of them under this Agreement or any of the Loan
Documents to the extent not reimbursed by the Borrower or the Guarantors (except
such as shall result from their respective gross negligence or willful
misconduct).
Rights of Agent. It is understood and agreed that Chase shall have the same
---------------
rights and powers hereunder (including the right to give such instructions) as
the other Banks and may exercise such rights and powers, as well as its rights
and powers under other agreements and instruments to which it is or may be
party, and engage in other transactions with the Borrower or any Guarantor, as
though it were not the Agent of the Banks under this Agreement.
Independent Banks. Each Bank acknowledges that it has decided to enter into
-----------------
this Agreement and to make the Loans hereunder based on its own analysis of the
transactions contemplated hereby and of the creditworthiness of the Borrower and
the Guarantors and agrees that the Agent shall bear no responsibility therefor.
Notice of Transfer. The Agent may deem and treat a Bank party to this
------------------
Agreement as the owner of such Bank's portion of the Loans for all purposes,
unless and until a written notice of the assignment or transfer thereof executed
by such Bank shall have been received by the Agent.
Successor Agent. The Agent may resign at any time by giving written notice
---------------
thereof to the Banks and the Borrower. Upon any such resignation, the Required
Banks shall have the right to appoint a successor Agent, which shall be
reasonably satisfactory to the Borrower. If no successor Agent shall have been
so appointed by the Required Banks and shall have accepted such appointment,
within 30 days after the retiring Agent's giving of notice of resignation, the
retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be a commercial bank organized under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of a
least $100,000,000, which shall be reasonably satisfactory to the Borrower. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 8 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement.
GUARANTY
Guaranty
--------
Each of the Guarantors unconditionally and irrevocably guarantees the due and
punctual payment and performance by the Borrower of the Obligations. Each of the
Guarantors further
53
agrees that the Obligations may be extended or renewed, in whole or in part,
without notice to or further assent from it, and it will remain bound upon this
guaranty notwithstanding any extension or renewal of any of the Obligations. The
Obligations of the Guarantors shall be joint and several.
Each of the Guarantors waives presentation to, demand for payment from and
protest to the Borrower or any other Guarantor, and also waives notice of
protest for nonpayment. The Obligations of the Guarantors hereunder shall not be
affected by (i) the failure of the Agent or a Bank to assert any claim or demand
or to enforce any right or remedy against the Borrower or any other Guarantor
under the provisions of this Agreement or any other Loan Document or otherwise;
(ii) any extension or renewal of any provision hereof or thereof; (iii) any
rescission, waiver, compromise, acceleration, amendment or modification of any
of the terms or provisions of any of the Loan Documents; (iv) the release,
exchange, waiver or foreclosure of any security held by the Agent for the
Obligations or any of them; (v) the failure of the Agent or a Bank to exercise
any right or remedy against any other Guarantor; or (vi) the release or
substitution of any Guarantor or any other Guarantor.
Each of the Guarantors further agrees that this guaranty constitutes a guaranty
of performance and of payment when due and not just of collection, and waives
any right to require that any resort be had by the Agent or a Bank to any
security held for payment of the Obligations or to any balance of any deposit,
account or credit on the books of the Agent or a Bank in favor of the Borrower
or any other Guarantor, or to any other Person.
Each of the Guarantors hereby waives any defense that it might have based on a
failure to remain informed of the financial condition of the Borrower and of any
other Guarantor and any circumstances affecting the ability of the Borrower to
perform under this Agreement.
Each Guarantor's guaranty shall not be affected by the genuineness, validity,
regularity or enforceability of the Obligations or any other instrument
evidencing any Obligations, or by the existence, validity, enforceability,
perfection, or extent of any collateral therefor or by any other circumstance
relating to the Obligations which might otherwise constitute a defense to this
Guaranty. Neither of the Agent, nor any of the Banks makes any representation or
warranty in respect to any such circumstances or shall have any duty or
responsibility whatsoever to any Guarantor in respect of the management and
maintenance of the Obligations.
Subject to the provisions of Section 7.01, upon the Obligations becoming due and
payable (by acceleration or otherwise), the Banks shall be entitled to immediate
payment of such Obligations by the Guarantors upon written demand by the Agent,
without further application to or order of the Bankruptcy Court.
No Impairment of Guaranty. The obligations of the Guarantors hereunder
-------------------------
shall not be subject to any reduction, limitation, impairment or termination for
any reason, including, without limitation, any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to any defense or
set-off, counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of the Obligations. Without limiting
the generality
54
of the foregoing, the obligations of the Guarantors hereunder shall not be
discharged or impaired or otherwise affected by the failure of the Agent or a
Bank to assert any claim or demand or to enforce any remedy under this Agreement
or any other agreement, by any waiver or modification of any provision thereof,
by any default, failure or delay, willful or otherwise, in the performance of
the Obligations, or by any other act or thing or omission or delay to do any
other act or thing which may or might in any manner or to any extent vary the
risk of the Guarantors or would otherwise operate as a discharge of the
Guarantors as a matter of law, unless and until the Obligations are paid in
full.
Subrogation. Upon payment by any Guarantor of any sums to the Agent or a
-----------
Bank hereunder, all rights of such Guarantor against the Borrower arising as a
result thereof by way of right of subrogation or otherwise, shall in all
respects be subordinate and junior in right of payment to the prior final and
indefeasible payment in full of all the Obligations. If any amount shall be paid
to such Guarantor for the account of the Borrower, such amount shall be held in
trust for the benefit of the Agent and the Banks and shall forthwith be paid to
the Agent and the Banks to be credited and applied to the Obligations, whether
matured or unmatured.
MISCELLANEOUS
Notices. Notices and other communications provided for herein shall be in
-------
writing (including telegraphic, telex, facsimile or cable communication) and
shall be mailed, telegraphed, telexed, transmitted, cabled or delivered to the
Borrower or any Guarantor at 2500 Columbia Avenue, Lancaster, Pennsylvania
17604, Attention: E. Follin Smith and to a Bank or the Agent to it at its
address set forth on Annex A, or such other address as such party may from time
to time designate by giving written notice to the other parties hereunder. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the fifth
Business Day after the date when sent by registered or certified mail, postage
prepaid, return receipt requested, if by mail; or when delivered to the
telegraph company, charges prepaid, if by telegram; or when receipt is
acknowledged, if by any telegraphic communications or facsimile equipment of the
sender; in each case addressed to such party as provided in this Section 10.01
or in accordance with the latest unrevoked written direction from such party;
provided, however, that in the case of notices to the Agent notices pursuant to
the preceding sentence with respect to change of address and pursuant to Section
2 shall be effective only when received by the Agent.
Survival of Agreement, Representations and Warranties, etc. All warranties,
----------------------------------------------------------
representations and covenants made by the Borrower or any Guarantor herein or in
any certificate or other instrument delivered by it or on its behalf in
connection with this Agreement shall be considered to have been relied upon by
the Banks and shall survive the making of the Loans herein contemplated
regardless of any investigation made by any Bank or on its behalf and shall
continue in full force and effect so long as any amount due or to become due
hereunder is outstanding and unpaid and so long as the Commitments have not been
terminated. All statements in any such certificate or other instrument shall
constitute representations and warranties by the Borrower and the Guarantors
hereunder with respect to the Borrower.
55
Successors and Assigns.
----------------------
This Agreement shall be binding upon and inure to the benefit of the Borrower,
the Agent and the Banks and their respective successors and assigns. Neither the
Borrower nor any of the Guarantors may assign or transfer any of their rights or
obligations hereunder without the prior written consent of all of the Banks.
Each Bank may sell participations to any Person in all or part of any Loan, or
all or part of its Commitment, in which event, without limiting the foregoing,
the provisions of Section 2.15 shall inure to the benefit of each purchaser of a
participation (provided that such participant shall look solely to the seller of
such participation for such benefits and the Borrower's and the Guarantors'
liability, if any, under Sections 2.15 and 2.18 shall not be increased as a
result of the sale of any such participation) and the pro rata treatment of
--- ----
payments, as described in Section 2.17, shall be determined as if such Bank had
not sold such participation. In the event any Bank shall sell any participation,
such Bank shall retain the sole right and responsibility to enforce the
obligations of the Borrower and each of the Guarantors relating to the Loans,
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement (provided that such Bank may grant
its participant the right to consent to such Bank's execution of amendments,
modifications or waivers which (i) reduce any Fees payable hereunder to the
Banks, (ii) reduce the amount of any scheduled principal payment on any Loan or
reduce the principal amount of any Loan or the rate of interest payable
hereunder or (iii) extend the maturity of the Borrower's obligations hereunder).
The sale of any such participation shall not alter the rights and obligations of
the Bank selling such participation hereunder with respect to the Borrower.
Each Bank may assign to one or more Banks or Eligible Assignees all or a portion
of its interests, rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment and the same portion of
the related Loans at the time owing to it), provided, however, that (i) other
-------- -------
than in the case of an assignment to a Person at least 50% owned by the assignor
Bank, or by a common parent of both, or to another Bank, the Agent and the
Fronting Bank must give their respective prior written consent to such
assignment, which consent will not be unreasonably withheld, (ii) the aggregate
amount of the Commitment and/or Loans of the assigning Bank subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Agent) shall, unless otherwise agreed to
in writing by the Borrower and the Agent, in no event be less than $5,000,000 or
the remaining portion of such Bank's Commitment and/or Loans, if less (or
$1,000,000 in the case of an assignment between Banks) and (iii) the parties to
each such assignment shall execute and deliver to the Agent, for its acceptance
and recording in the Register (as defined below), an Assignment and Acceptance
with blanks appropriately completed, together with a processing and recordation
fee of $3,500 (for which the Borrower shall have no liability). Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be
within ten Business Days after the execution thereof (unless otherwise agreed to
in writing by the Agent), (A) the assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Bank hereunder and (B) the Bank thereunder shall, to the
extent provided in such Assignment and Acceptance, be released
56
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Bank's rights
and obligations under this Agreement, such Bank shall cease to be a party
hereto).
By executing and delivering an Assignment and Acceptance, the Bank assignor
thereunder and the assignee thereunder confirm to and agree with each other and
the other parties hereto as follows: (i) other than the representation and
warranty that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim, such Bank assignor makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any of the other Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any of the other Loan Documents; (ii) such Bank assignor makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or any Guarantor or the performance or observance by
the Borrower or any Guarantor of any of its obligations under this Agreement or
any of the other Loan Documents or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement and the other Loan Documents, together with copies of the
financial statements referred to in Section 3.04 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such Bank assignor or any
other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
thereto, together with such powers as are reasonably incidental hereof; and (vi)
such assignee agrees that it will perform in accordance with their terms all
obligations that by the terms of this Agreement are required to be performed by
it as a Bank.
The Agent shall maintain at its office a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses of
the Banks and the Commitments of, and principal amount of the Loans owing to,
each Bank from time to time (the "Register"). The entries in the Register shall
be conclusive, in the absence of manifest error, and the Borrower, the
Guarantors, the Agent and the Banks shall treat each Person the name of which is
recorded in the Register as a Bank hereunder for all purposes of this Agreement.
The Register shall be available for inspection by the Borrower or any Bank at
any reasonable time and from time to time upon reasonable prior notice.
Upon its receipt of an Assignment and Acceptance executed by an assigning Bank
and the assignee thereunder together with the fee payable in respect thereto,
the Agent shall, if such Assignment and Acceptance has been completed with
blanks appropriately filled and consented to by the Agent and the Fronting Bank
(to the extent such consent is required hereunder), (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt written notice thereof to the Borrower (together with a
copy
57
thereof). No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
Any Bank may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section 10.03, disclose to the
assignee or participant or proposed assignee or participant, any information
relating to the Borrower or any of the Guarantors furnished to such Bank by or
on behalf of the Borrower or any of the Guarantors; provided that prior to any
--------
such disclosure, each such assignee or participant or proposed assignee or
participant shall agree in writing to be bound by the provisions of Section
10.04.
The Borrower hereby agrees, to the extent set forth in the Commitment Letter, to
actively assist and cooperate with the Agent in the Agent's efforts to sell
participations herein (as described in Section 10.03(a)) and assign to one or
more Banks or Eligible Assignees a portion of its interests, rights and
obligations under this Agreement (as set forth in Section 10.03(b)).
Confidentiality. Each Bank agrees to keep any information delivered or made
---------------
available by the Borrower or any of the Guarantors to it confidential from
anyone other than persons employed or retained by such Bank who are or are
expected to become engaged in evaluating, approving, structuring or
administering the Loans; provided that nothing herein shall prevent any Bank
--------
from disclosing such information (i) to any of its Affiliates or to any other
Bank, provided such Affiliate agrees to keep such information confidential to
--------
the same extent required by the Banks hereunder, (ii) upon the order of any
court or administrative agency, (iii) upon the request or demand of any
regulatory agency or authority, (iv) which has been publicly disclosed other
than as a result of a disclosure by the Agent or any Bank which is not permitted
by this Agreement, (v) in connection with any litigation to which the Agent, any
Bank, or their respective Affiliates may be a party to the extent reasonably
required, (vi) to the extent reasonably required in connection with the exercise
of any remedy hereunder, (vii) to such Bank's legal counsel and independent
auditors, and (viii) to any actual or proposed participant or assignee of all or
part of its rights hereunder subject to the proviso in Section 10.03(f). Each
Bank shall use reasonable efforts to notify the Borrower of any required
disclosure under clause (ii) of this Section.
Expenses. Whether or not the transactions hereby contemplated shall be
--------
consummated, the Borrower and the Guarantors agree to pay all reasonable and
documented out-of-pocket expenses incurred by the Agent (including but not
limited to the reasonable fees and disbursements of Morgan, Lewis & Bockius LLP,
special counsel for the Agent, any other counsel that the Agent shall retain and
any internal or third-party appraisers, consultants and auditors advising the
Agent and Chase Securities Inc.) in connection with the preparation, execution,
delivery and administration of this Agreement and the other Loan Documents, the
making of the Loans and the issuance of the Letters of Credit, the perfection of
the Liens contemplated hereby, the syndication of the transactions contemplated
hereby, the reasonable and customary costs, fees and expenses internally
allocated charges and expenses relating to the Agent's initial and ongoing
Borrowing Base examinations, of the Agent in connection with its monthly and
other periodic field audits, monitoring of assets (including reasonable and
58
customary internal collateral monitoring fees) and publicity expenses, and,
following the occurrence of an Event of Default, all reasonable out-of-pocket
expenses incurred by the Banks and the Agent in the enforcement or protection of
the rights of any one or more of the Banks or the Agent in connection with this
Agreement or the other Loan Documents, including but not limited to the
reasonable fees and disbursements of any counsel for the Banks or the Agent.
Such payments shall be made on the date of the Interim Order and thereafter on
demand upon delivery of a statement setting forth such costs and expenses.
Whether or not the transactions hereby contemplated shall be consummated, the
Borrower and the Guarantors agree to reimburse the Agent and Chase Securities
Inc. for the expenses set forth in the Commitment Letter and the reimbursement
provisions thereof are hereby incorporated herein by reference. The obligations
of the Borrower and the Guarantors under this Section shall survive the
termination of this Agreement and/or the payment of the Loans.
Indemnity. The Borrower and each of the Guarantors agree to indemnify and
---------
hold harmless the Agent, Chase Securities Inc. and the Banks and their
directors, officers, employees, agents and Affiliates (each an "Indemnified
-----------
Party") from and against any and all expenses, losses, claims, damages and
- -----
liabilities incurred by such Indemnified Party arising out of claims made by any
Person in any way relating to the transactions contemplated hereby, but
excluding therefrom all expenses, losses, claims, damages, and liabilities to
the extent that they are determined by the final judgment of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such Indemnified Party. The obligations of the Borrower and the
Guarantors under this Section shall survive the termination of this Agreement
and/or the payment of the Loans.
CHOICE OF LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL IN ALL
-------------
RESPECTS BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH
STATE AND THE BANKRUPTCY CODE.
No Waiver. No failure on the part of the Agent or any of the Banks to
---------
exercise, and no delay in exercising, any right, power or remedy hereunder or
any of the other Loan Documents shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or remedy preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
All remedies hereunder are cumulative and are not exclusive of any other
remedies provided by law.
Extension of Maturity. Should any payment of principal of or interest or
---------------------
any other amount due hereunder become due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day and, in the case of principal, interest shall be payable thereon at
the rate herein specified during such extension.
Amendments, etc.
----------------
59
No modification, amendment or waiver of any provision of this Agreement or any
of the other Loan Documents, and no consent to any departure by the Borrower or
any Guarantor therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Required Banks, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given; provided, however, that no such modification or amendment shall without
-------- -------
the written consent of the Bank affected thereby (x) increase the Commitment of
a Bank (it being understood that a waiver of an Event of Default shall not
constitute an increase in the Commitment of a Bank), or (y) reduce the principal
amount of any Loan or the rate of interest payable thereon, or extend any date
for the payment of interest hereunder or reduce any Fees payable hereunder or
extend the final maturity of the Borrower's obligations hereunder; and,
provided, further, that no such modification or amendment shall without the
- -------- -------
written consent of all of the Banks (i) amend or modify any provision of this
Agreement which provides for the unanimous consent or approval of the Banks,
(ii) amend this Section 10.10 or the definition of Required Banks, or (iii)
amend or modify the Super-Priority Claim status of the Banks contemplated by
Section 2.23 provided, further, that no such modification or amendment shall
-------- -------
without the written consent of the Super-majority Banks (as defined in
subsection (b) below) release all or substantially all of the Guarantors. No
such amendment or modification may adversely affect the rights and obligations
of the Agent or any Fronting Bank hereunder or any Bank in the capacity referred
to in Section 6.03(vi) without its prior written consent. No notice to or demand
on the Borrower or any Guarantor shall entitle the Borrower or any Guarantor to
any other or further notice or demand in the same, similar or other
circumstances. Each assignee under Section 10.03(b) shall be bound by any
amendment, modification, waiver, or consent authorized as provided herein, and
any consent by a Bank shall bind any Person subsequently acquiring an interest
on the Loans held by such Bank. No amendment to this Agreement shall be
effective against the Borrower or any Guarantor unless signed by the Borrower or
such Guarantor, as the case may be.
Notwithstanding anything to the contrary contained in Section 10.10(a), in the
event that the Borrower requests that this Agreement be modified or amended in a
manner which would require the unanimous consent of all of the Banks (or the
consent described in clause (B) of the first sentence of Section 10.10(a)) and
such modification or amendment is agreed to by the Super-majority Banks (as
hereinafter defined), then with the consent of the Borrower and the
Super-majority Banks, the Borrower and the Super-majority Banks shall be
permitted to amend the Agreement without the consent of the Bank or Banks which
did not agree to the modification or amendment requested by the Borrower (such
Bank or Banks, collectively the "Minority Banks") to provide for (w) the
--------------
termination of the Commitment of each of the Minority Banks, (x) the addition to
this Agreement of one or more other financial institutions (each of which shall
be an Eligible Assignee), or an increase in the Commitment of one or more of the
Super-majority Banks, so that the Total Commitment after giving effect to such
amendment shall be in the same amount as the Total Commitment immediately before
giving effect to such amendment, (y) if any Loans are outstanding at the time of
such amendment, the making of such additional Loans by such new financial
institutions or Super-majority Bank or Banks, as the case may be, as may be
necessary to repay in full the outstanding Loans of the Minority Banks
immediately before giving effect to such amendment and (z) such other
modifications to this Agreement as may be
60
appropriate. As used herein, the term "Super-majority Banks" shall mean, at any
time, Banks holding Loans representing at least 66-2/3% of the aggregate
principal amount of the Loans outstanding, or if no Loans are outstanding, Banks
having Commitments representing at least 66-2/3% of the Total Commitment.
Severability. Any provision of this Agreement which is prohibited or
------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Headings. Section headings used herein are for convenience only and are not
--------
to affect the construction of or be taken into consideration in interpreting
this Agreement.
Execution in Counterparts. This Agreement may be executed in any number of
-------------------------
counterparts, each of which shall constitute an original, but all of which taken
together shall constitute one and the same instrument.
Prior Agreements. This Agreement represents the entire agreement of the
----------------
parties with regard to the subject matter hereof and the terms of any letters
and other documentation entered into between the Borrower or a Guarantor and any
Bank or the Agent prior to the execution of this Agreement which relate to Loans
to be made hereunder shall be replaced by the terms of this Agreement (except as
otherwise expressly provided herein with respect to the Commitment Letter and
the fee letter referred to therein, including without limitation the Borrower's
agreement to actively assist the Agent in the syndication of the transactions
contemplated hereby referred to in Section 10.03(g) and including also the
provisions of Section 2.19).
Further Assurances. Whenever and so often as reasonably requested by the
------------------
Agent, the Borrower and the Guarantors will promptly execute and deliver or
cause to be executed and delivered all such other and further instruments,
documents or assurances, and promptly do or cause to be done all such other and
further things as may be necessary and reasonably required in order to further
and more fully vest in the Agent all rights, interests, powers, benefits,
privileges and advantages conferred or intended to be conferred by this
Agreement and the other Loan Documents.
WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE GUARANTORS, THE AGENT AND
--------------------
EACH BANK HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.
[SIGNATURE PAGES FOLLOWS]
61
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and the year first written.
BORROWER:
ARMSTRONG WORLD INDUSTRIES, INC.
By:
------------------------------------------
Title:
GUARANTORS:
NITRAM LIQUIDATORS, INC.
By:
------------------------------------------
Title:
DESSEAUX CORPORATION OF NORTH AMERICA
By:
------------------------------------------
Title:
THE CHASE MANHATTAN BANK,
Individually and as Agent
By:
------------------------------------------
Title:
62
ANNEX A
to
REVOLVING CREDIT AND GUARANTY AGREEMENT
Dated as of December 6, 2000
Commitment Commitment
Bank Amount Percentage
- ---- ------ ----------
The Chase Manhattan Bank
270 Park Avenue $400,000,000 100%
New York, New York 10017
Attn: Ms. Kelly Shield
Vice President
Total $400,000,000 100.0000%
============ =========
63
SCHEDULE 6.03
EXISTING INDEBTEDNESS OF NON-FILED SUBSIDIARIES
Obligation Amount
-----------------------------------------------------------------------
Funded Debt
Bank Debt - Revolver $ 450.0
Commercial Paper 50.0
6.35% Senior Notes Due 2003 199.9
7.45% Senior Notes Due 2029 199.8
7.45% Senior Quarterly Interest Bonds Due 2038 180.0
6.50% Senior Notes Due 2005 149.8
ESOP Debt 142.2
Make Whole Obligation on ESOP 15.5
9.75% Senior Notes Due 2008 125.0
MTN's Due 2000-2001 7.5
Beverly, WV (Capital Lease) 7.3
Interest Rate Swap Derivative Obligations 1.5
Merrill Lynch Zero Coupon Note Due 2013 3.5
Kankakee Tax Exempt Bond 10.8
Searcy, AL (IRB) 0.5
Somerset, KY (IRB) 10.0
Clinton County (PA) 8.5
------------------
Total Funded Debt 1,561.7
Other (Undrawn)
Guarantees See Attached
CCR Safeco Bond 56.2
------------------
Total Debt $1,617.9
ARMSTRONG WORLD INDUSTRIES, INC.
GUARANTEES
----------
- ------------------------------------------------------------------------------------------------------------------------------------
COMPANY BANK BENEFICIARY AMOUNT EXPIRE DATE
- ------- ---------------- ------ -----------
- ------------------------------------------------------------------------------------------------------------------------------------
Armstrong World Industries (HK) Ltd. Bank of America 3,000,000 02/28/01
("AHK")
- ------------------------------------------------------------------------------------------------------------------------------------
1xiv
- ------------------------------------------------------------------------------------------------------------------------------------
COMPANY BANK BENEFICIARY AMOUNT EXPIRE DATE
- ------- ---------------- ------ -----------
- ------------------------------------------------------------------------------------------------------------------------------------
AHK Bank of America 128,200 02.28/01
- ------------------------------------------------------------------------------------------------------------------------------------
Triangle Pacific Corp. ("TRIP") Bank of America Leasing and Capital 5,259,844 N/A
LLP (Robbins)
- ------------------------------------------------------------------------------------------------------------------------------------
Armstrong Building Products Company Bank of America 16,000,000 04/01/01
(Shanghai), Ltd. ("ABPC-China")
- ------------------------------------------------------------------------------------------------------------------------------------
Armstrong World Industries Barclays 14,720,000 04/30/01
Ltd.-Uxbridge, England
- ------------------------------------------------------------------------------------------------------------------------------------
Armstrong Building Products S.R.L. Credito Italiano 2,718,000 02/28/01
- ------------------------------------------------------------------------------------------------------------------------------------
Worthington Armstrong Venture (WAVE) - Michigan Strategic Fund 3,550,000 10/01/22
US (Benton Harbor)
50% of $7,100,000 Michigan Strategic
Fund Limited Obligation Revenue Bond Issue
- ------------------------------------------------------------------------------------------------------------------------------------
Armstrong World Industries Canada Ltd. Province of Quebec 1,029,975 06/30/04
- ------------------------------------------------------------------------------------------------------------------------------------
Armstrong World Industries Canada AB Skandinaviska Enskilda 1,400,800 01/31/02
- ------------------------------------------------------------------------------------------------------------------------------------
Armstrong Building Products S.A. Societe Generale 7,353,500 2/28/01
- ------------------------------------------------------------------------------------------------------------------------------------
Armstrong Cork Finance Corp. ("ACFC") Societe Generale No amount. no expiration/revocable by
AWI upon notice to Societe
Generale.
AWI guarantees
obligations from
foreign exchange
contracts with
ACFC.
- ------------------------------------------------------------------------------------------------------------------------------------
Worthington Armstrong Venture Europe, SODIE 467,950 12/31/00
S.A. ("WAVE EUR")
- ------------------------------------------------------------------------------------------------------------------------------------
ABPC-China Standard Chartered 13,500,000 07/31/01
Armstrong World Industries (Delaware)
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
ABPC-China Standard Chartered 4,000,000 07/31/01
- ------------------------------------------------------------------------------------------------------------------------------------
Armstrong World Industries Canada Ltd. Banque Toronto Dominion 6,645,000 01/31/01
- ------------------------------------------------------------------------------------------------------------------------------------
Armstrong World Industries Holding GmbH Westdeutsche Landesbank Girozentrale 26,916,000 08/31/01
- - Germany
- ------------------------------------------------------------------------------------------------------------------------------------
1xv
REVOLVING CREDIT AND GUARANTY AGREEMENT
TABLE OF CONTENTS
Page No.
--------
SECTION 1. DEFINITIONS.......................................................2
SECTION 1.01 Defined Terms.......................................2
SECTION 1.02 Terms Generally....................................15
SECTION 2. AMOUNT AND TERMS OF CREDIT.......................................15
SECTION 2.01 Commitment of the Banks............................15
SECTION 2.02 Borrowing Base.....................................16
SECTION 2.03 Letters of Credit..................................16
SECTION 2.04 Issuance...........................................18
SECTION 2.05 Nature of Letter of Credit Obligations Absolute....18
SECTION 2.06 Making of Loans....................................18
SECTION 2.06A Competitive Bid Procedure..........................19
SECTION 2.07 Repayment of Loans; Evidence of Debt...............21
SECTION 2.08 Interest on Loans..................................22
SECTION 2.09 Default Interest...................................22
SECTION 2.10 Optional Termination or Reduction of Commitment....23
SECTION 2.11 Alternate Rate of Interest.........................23
SECTION 2.12 Refinancing of Loans...............................23
SECTION 2.13 Mandatory Prepayment; Commitment Termination;
Cash Collateral....................................24
SECTION 2.14 Optional Prepayment of Loans; Reimbursement
of Banks...........................................25
SECTION 2.15 Reserve Requirements; Change in Circumstances......26
SECTION 2.16 Change in Legality.................................27
SECTION 2.17 Pro Rata Treatment, etc............................28
SECTION 2.18 Taxes..............................................28
SECTION 2.19 Certain Fees.......................................31
SECTION 2.20 Commitment Fee.....................................31
SECTION 2.21 Letter of Credit Fees..............................31
SECTION 2.22 Nature of Fees.....................................31
SECTION 2.23 Priority and Liens.................................31
SECTION 2.24 Right of Set-Off...................................32
SECTION 2.25 Security Interest in Letter of Credit Account......32
SECTION 2.26 Payment of Obligations.............................32
SECTION 2.27 No Discharge; Survival of Claims...................32
SECTION 3. REPRESENTATIONS AND WARRANTIES ..................................33
SECTION 3.01 Organization and Authority.........................33
SECTION 3.02 Due Execution......................................33
SECTION 3.03 Statements Made....................................33
SECTION 3.04 Financial Statements...............................34
SECTION 3.05 Ownership..........................................34
SECTION 3.06 Liens..............................................34
1xvi
SECTION 3.07 Compliance with Law................................34
SECTION 3.08 Insurance..........................................35
SECTION 3.09 The Orders.........................................35
SECTION 3.10 Use of Proceeds....................................35
SECTION 3.11 Litigation.........................................35
SECTION 4. CONDITIONS OF LENDING............................................36
SECTION 4.01 Conditions Precedent to Initial Loans and Initial
Letters of Credit..................................36
SECTION 4.02 Conditions Precedent to Each Loan and Each Letter
of Credit..........................................38
SECTION 5. AFFIRMATIVE COVENANTS............................................39
SECTION 5.01 Financial Statements, Reports, etc.................39
SECTION 5.02 Corporate Existence................................42
SECTION 5.03 Insurance..........................................42
SECTION 5.04 Obligations and Taxes..............................42
SECTION 5.05 Notice of Event of Default, etc....................42
SECTION 5.06 Access to Books and Records........................42
SECTION 5.07 Borrowing Base Certificate.........................43
SECTION 5.08 Collateral Monitoring and Review...................43
SECTION 5.09 Projections........................................43
SECTION 6. NEGATIVE COVENANTS...............................................43
SECTION 6.01 Liens..............................................43
SECTION 6.02 Merger, etc........................................44
SECTION 6.03 Indebtedness.......................................44
SECTION 6.04 Capital Expenditures...............................44
SECTION 6.05 Leverage Ratio.....................................44
SECTION 6.06 Guarantees and Other Liabilities...................44
SECTION 6.07 Chapter 11 Claims..................................45
SECTION 6.08 Dividends; Capital Stock...........................45
SECTION 6.09 Transactions with Affiliates.......................45
SECTION 6.10 Investments, Loans, Advances and Acquisitions......45
SECTION 6.11 Disposition of Assets..............................45
SECTION 6.12 Nature of Business.................................45
SECTION 7. EVENTS OF DEFAULT................................................46
SECTION 7.01 Events of Default..................................46
SECTION 8. THE AGENT........................................................49
SECTION 8.01 Administration by Agent............................49
SECTION 8.02 Advances and Payments..............................49
SECTION 8.03 Sharing of Setoffs.................................50
SECTION 8.04 Agreement of Required Banks........................50
SECTION 8.05 Liability of Agent.................................50
SECTION 8.06 Reimbursement and Indemnification..................51
1xvii
SECTION 8.07 Rights of Agent..................................51
SECTION 8.08 Independent Banks................................51
SECTION 8.09 Notice of Transfer...............................52
SECTION 8.10 Successor Agent..................................52
SECTION 9. GUARANTY........................................................52
SECTION 9.01 Guaranty.........................................52
SECTION 9.02 No Impairment of Guaranty........................53
SECTION 9.03 Subrogation......................................53
SECTION 10. MISCELLANEOUS...................................................54
SECTION 10.01 Notices..........................................54
SECTION 10.02 Survival of Agreement, Representations and
Warranties, etc..................................54
SECTION 10.03 Successors and Assigns...........................54
SECTION 10.04 Confidentiality..................................56
SECTION 10.05 Expenses.........................................57
SECTION 10.06 Indemnity........................................57
SECTION 10.07 CHOICE OF LAW....................................58
SECTION 10.08 No Waiver........................................58
SECTION 10.09 Extension of Maturity............................58
SECTION 10.10 Amendments, etc..................................58
SECTION 10.11 Severability.....................................59
SECTION 10.12 Headings.........................................59
SECTION 10.13 Execution in Counterparts........................59
SECTION 10.14 Prior Agreements.................................59
SECTION 10.15 Further Assurances...............................59
SECTION 10.16 WAIVER OF JURY TRIAL.............................60
1xviii
ANNEX A - Commitment Amounts
EXHIBIT A-1 - Form of Interim Order
EXHIBIT A-2 - Form of Final Order
EXHIBIT B - Form of Opinion of Counsel
EXHIBIT C - Form of Assignment and Acceptance
SCHEDULE 3.05 - Subsidiaries
SCHEDULE 3.06 - Liens
SCHEDULE 3.11 - Litigation
SCHEDULE 6.03 - Existing Indebtedness of Non-filed Subsidiaries
FIRST AMENDMENT
TO REVOLVING CREDIT AND
GUARANTY AGREEMENT
FIRST AMENDMENT, dated as of February 2, 2001 (the "Amendment"), to the
---------
REVOLVING CREDIT AND GUARANTY AGREEMENT, dated as of December 6, 2000, among
ARMSTRONG WORLD INDUSTRIES, INC., a Pennsylvania corporation (the "Borrower"), a
--------
debtor and debtor-in-possession under Chapter 11 of the Bankruptcy Code, the
Guarantors named therein (the "Guarantors"), THE CHASE MANHATTAN BANK, a New
----------
York banking corporation ("Chase"), each of the other financial institutions
-----
party thereto (together with Chase, the "Banks") and THE CHASE MANHATTAN BANK,
-----
as Agent for the Banks (in such capacity, the "Agent"):
-----
W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantors, the Banks and the Agent are parties
to that certain Revolving Credit and Guaranty Agreement, dated as of December 6,
2000, (as the same may be amended, modified or supplemented from time to time,
the "Credit Agreement"); and
----------------
WHEREAS, the Borrower and the Guarantors have requested that from and after
the Effective Date (as hereinafter defined) of this Amendment, the Credit
Agreement be amended subject to and upon the terms and conditions set forth
herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
As used herein, all terms that are defined in the Credit Agreement shall
have the same meanings herein.
The second paragraph of the Introductory Statement is hereby amended by
deleting the amount "$400,000,000" appearing therein and inserting in lieu
thereof the amount "$300,000,000".
The fourth paragraph of the Introductory Statement is hereby amended by
deleting the words "Section 6.03(vi)" appearing in the parenthesis set forth
therein and inserting in lieu thereof the words "Sections 6.03(vi) and (vii)".
Section 1.01 of the Credit Agreement is hereby amended by inserting the
following new definitions in appropriate alphabetical order:
"Account" shall mean any right to payment for goods sold, regardless
-------
of how such right is evidenced and whether or not it has been earned
by performance.
"Adjusted Eligible Accounts Receivable" shall be equal to (a) Eligible
-------------------------------------
Accounts Receivable minus (b) the Dilution Reserve.
"Dilution Factors" shall mean, with respect to any period, the
----------------
aggregate amount of all gross deductions, credit memos, returns,
adjustments, allowances, bad debt write-offs and other non-cash
credits.
"Dilution Ratio" shall mean, at any date, the amount (expressed as a
--------------
percentage) equal to (a) the aggregate amount of the applicable
Dilution Factors for the 12
most recently ended fiscal months divided by (b) total gross sales for
-------
the 12 most recently ended fiscal months.
"Dilution Reserve" shall mean, at any date, the applicable Dilution
----------------
Ratio multiplied by the Eligible Accounts Receivable on such date.
"Eligible Accounts Receivable" shall mean the gross outstanding
----------------------------
balance, determined in accordance with GAAP and stated on a basis
consistent with the historical and current practices of the Borrower
and the Guarantors as of the date hereof, of Accounts of the Borrower
and the Guarantors that the Agent, in its reasonable discretion, shall
deem eligible, less all finance charges, late fees and other fees that
are unearned, and less (i) the value of any accrual which has been
----
recorded by the Borrower and the Guarantors with respect to downward
price adjustments, (ii) the aggregate amount of all cash received in
respect of the Accounts but not yet applied by the Borrower and the
Guarantors to reduce the amount of Accounts, (iii) the amount of all
actual returns, discounts, claims, credits, charges, price adjustments
or other adjustments, (iv) the aggregate amount of all other reserves,
limits and deductions provided for in this definition and elsewhere in
this Agreement, (v) fees due to regional distribution centers as of
the end of the most recent fiscal month which are incurred by the
Borrower or the Guarantors for shipments made from regional
distribution centers on behalf of the Borrower or the Guarantors it
being agreed that such fees shall not be deducted if a non-offset
agreement, in form and substance satisfactory to the Agent, shall have
been executed by such regional distribution centers, (vi) amounts due
to regional distribution centers as of the end of the most recent
fiscal month in connection with the repurchase of Inventory by the
Borrower or the Guarantors which was previously sold to such regional
distribution centers, it being agreed that such amounts will not be
deducted if a non-offset agreement, in form and substance satisfactory
to the Agent, shall have been executed by such regional distribution
centers, and (vii) such other reserves as the Agent, in its reasonable
discretion after consultation with the Borrower, shall deem
appropriate. Without in any way limiting the discretion of the Agent
to deem an Account ineligible, the Agent shall not treat an Account as
eligible if:
(a) the Borrower or the Guarantors have not complied with all
material Requirements of Law, including, without limitation, all
laws, rules, regulations and orders of any Governmental Authority
relating to billing practices, fair credit reporting, equal
credit opportunity, debt collection practices and consumer debtor
protection, applicable to such Account (or any related contracts)
or affecting the collectability of such Account;
(b) such Account is not assignable or a first priority security
interest in such Account in favor of the Agent for the benefit of
the Banks has not been obtained and fully perfected by (i) the
entry of the Orders, or (ii) the filing of Uniform Commercial
Code financing statements against the Borrower or the Guarantors;
(c) such Account is subject to any Lien whatsoever, other than
Liens in favor of the Agent for the benefit of the Banks;
71
(d) the Borrower or the Guarantors, in order to be entitled to
collect such Account, is required to perform any additional
service for, or perform or incur any additional obligation to,
the Account debtor;
(e) such Account does not constitute a legal, valid and binding
irrevocable payment obligation of the Account debtor to pay the
balance thereof in accordance with its terms or is subject to any
defense, set-off, recoupment or counterclaim;
(f) the Account debtor is an employee of the Borrower or any
Guarantor;
(g) such Account is an Account of the United States government,
or any agency or instrumentality of the foregoing;
(h) an estimated or actual loss has been recognized in respect of
such Account, as determined in accordance with the Borrower's or
the Guarantors' usual business practice;
(i) any representation or warranty contained in this Agreement or
in any other Loan Documents applicable either to Accounts in
general or to any such specific Account has been breached with
respect to such Account and such breach shall materially impair
the value of such Account or any Lien in favor of the Agent with
respect to such Account for the ratable benefit of the Banks;
(j) the Account debtor has filed a petition for relief under the
Bankruptcy Code (or similar action under any successor law or
under any comparable law), made a general assignment for the
benefit of creditors, had filed against it any petition or other
application for relief under the Bankruptcy Code (or similar
action under any successor law or under any comparable law),
failed, suspended business operations, become insolvent, called a
meeting of its creditors for the purpose of obtaining any
financial concession or accommodation, had or suffered a receiver
or a trustee to be appointed for all or a significant portion of
its assets or affairs, or shall generally not, or shall be unable
to, or shall generally admit in writing its inability to pay its
debts as such debts become due;
(k) any portion of such Account has remained unpaid for a period
exceeding 60 days from the due date (but only to the extent of
such overdue portion) or the Borrower or the Guarantors have
reason to believe such Account is uncollectible;
(l) 50% or more of the outstanding amount of all Accounts from
the Account debtor in respect of such Account have
72
become, or have been determined by the Agent to be, ineligible
pursuant to clause (k) above;
(m) the sale represented by such Account is to an Account debtor
organized or located outside the United States, unless a letter
of credit deemed acceptable by the Agent is held against such
Account;
(n) the Account debtor is a (i) creditor, (ii) has or has
asserted a right of setoff against the Borrower or any Guarantor
or (iii) has disputed its liability (whether by chargeback or
otherwise) or made any claim with respect to the Account or any
other Account of the Borrower or any Guarantor which has not been
resolved, in each case without duplication, to the extent of the
amount owed by the Borrower or such Guarantor to the Account
debtor, the amount of such actual or asserted right of setoff, or
the amount of such dispute or claim as the case may be;
(o) such Account is (i) not denominated in Dollars or is (ii)
payable outside the United States;
(p) the sale represented by such Account is on a bill-and-hold,
undelivered sale, guaranteed sale, sale-or-return, consignment,
or sale on approval basis or is subject to set-off or
charge-back;
(q) the Agent believes, in its reasonable discretion (after
consultation with the Borrower), that the collection of such
Account is unlikely or that such Account may not be paid;
(r) the Borrower, any Guarantor or any other party to such
Account, is in default in the performance or observance of any of
the terms thereof in any material respect;
(s) the Borrower or the Guarantors do not have good title to such
Account as sole owner of such Account;
(t) such Account does not arise from the sale and delivery of
goods by the Borrower or the Guarantors;
(u) such Account is on terms other than those normal or customary
in the business of the Borrower or the Guarantors;
(v) any amounts payable under or in connection with such Account
are evidenced by chattel paper, promissory notes or other
instruments, unless such chattel paper, promissory notes or
instruments have been endorsed and delivered to the Agent;
(w) such Account has been placed with an attorney or other third
party for collection;
73
(x) all Accounts of any single Account debtor and its Affiliates
exceed 15% of the total amount of all gross accounts receivable
at the time of any determination and such Account debtor does not
have a long-term rating of at least BBB- or a short-term rating
of at least A-3 by Standard & Poor's Rating Service or equivalent
rating agency, then the Accounts in excess of such 15% shall be
deemed to be ineligible;
(y) such Account is non-trade sundry; or
(z) such Account arises out of a sale made by the Borrower or any
Guarantor to any of their respective Affiliates.
Without limiting the foregoing, in determining the aggregate amount of
Accounts from the same Account debtor and any Affiliates thereof that
are unpaid more than 60 days from the due date pursuant to clause (k)
above, there shall be excluded the amount any net credit balance due
and owing to the Account debtor in respect of Accounts that are so
unpaid.
"Eligible Finished Goods" shall mean, on any date, the Inventory Value
-----------------------
of finished goods of the Borrower and the Guarantors on such date as
shown on the Borrower's or Guarantors' perpetual inventory records or
equivalent reporting, including but not limited to commercial and
residential ceiling and flooring products in accordance with their
current and historical classification of finished goods meeting the
definition of Eligible Inventory.
"Eligible Inventory" shall mean the Inventory Value of the Borrower on
------------------
such date deemed by the Agent in good faith for inclusion in the
calculation of the Borrowing Base reduced by (i) Inventory Reserves,
(ii) storage fees paid in connection with Inventory maintained at
public warehouses with the amount to be deducted equal to the sum of
the most recent three-months of storage fees incurred and (iii) such
other reserves as the Agent, in its reasonable commercial discretion
after consultation with the Borrower, shall deem appropriate. Without
in any way limiting the discretion of the Agent to deem an item of
inventory ineligible, the Agent shall not treat any item of inventory
as eligible if:
(a) such item of Inventory is not assignable or a first priority
security interest in such item of Inventory in favor of the Agent
for the benefit of the Banks has not been obtained and fully
perfected by (i) the entry of the Orders or (ii) the filing of
Uniform Commercial Code financing statements against the Borrower
or the Guarantors;
(b) such item of Inventory is subject to any prior Lien
whatsoever, other than Liens in favor of the Agent for the
benefit of the Banks;
(c) such item of Inventory (i) is damaged, not in good condition
(to the extent not provided for by reserves as described above)
or (ii) does not meet all material standards imposed by any
Governmental Authority having regulatory authority over such item
of inventory, its use or its sale;
74
(d) such item of Inventory is not currently either readily usable
or salable, at prices approximating at least the cost thereof, in
the normal course of the business of the Borrower and the
Guarantors (to the extent not provided for by reserves as
described above);
(e) any event shall have occurred or any condition shall exist
with respect to such item of Inventory which would substantially
impede the ability of the Borrower and the Guarantors to continue
to use or sell such item of Inventory in the normal course of
business;
(f) any claim disputing the title of the Borrower or any
Guarantor to, or right to possession of or dominion over, such
item of Inventory shall have been asserted;
(g) any representation or warranty contained in this Agreement or
in any other Loan Document applicable to either Inventory in
general or to any such specific item of Inventory has been
breached with respect to such items of Inventory, and such breach
shall materially impair the value of such Inventory or the
viability of any Lien in favor of the Agent with respect to such
Inventory for the ratable benefit of the Banks;
(h) neither the Borrower nor any Guarantor has sole and good,
valid and unencumbered title as sole owner of such item of
Inventory;
(i) such item of Inventory has been consigned to other Persons,
or is located at, or in the possession of, a vendor or customer
of the Borrower or any Guarantor, or is in transit to or from, or
held or stored by, third parties;
(j) such item of Inventory is located outside of the United
States;
(k) such item of Inventory is evidenced by an Account;
(l) such item of Inventory is subject to any licensing, patent,
royalty, trademark, trade name or copyright agreements with any
third party from whom the Borrower has received notice of a
dispute in respect of any such agreement;
(m) such item of Inventory consists of packing, pallets,
packaging and/or shipping supplies or sundry miscellaneous
materials;
(n) such item of Inventory is printed film, proprietary coating
or other proprietary materials such as plasticizers mixed by
Exxon Mobil using the Borrower's or Guarantors' specifications;
75
(o) such item of Inventory has been otherwise determined by the
Agent (after consultation with the Borrower), exercising its
commercially reasonable discretion, to be unacceptable because
the Agent believes that such item of Inventory is not readily
salable under the customary terms on which it is usually sold;
(p) it is located at any facility that the Borrower or any
Guarantor has closed or plans to close within thirty (30) days
from the date of determination of the most recent Borrowing Base;
(q) any merchandise classified by the Borrower as dropped
patterns or odd-lots;
(r) such item of Inventory is rug Inventory manufactured from
scrap;
(s) such item of Inventory is samples held at outside vendors; or
(t) such item of Inventory is "let down pigments" which are
pigments mixed with limestone.
"Eligible Period Expense on Inventory" shall mean, on any date,
------------------------------------
non-direct production related expenses capitalized for financial
statement purposes in a manner consistent with the Borrower's or the
Guarantors' historical and current accounting practices.
"Eligible Raw Materials" shall mean, on any date, the Inventory Value
----------------------
of raw materials of the Borrower and the Guarantors on such date as
shown on the Borrower's or Guarantors' perpetual inventory records or
equivalent reporting, including but not limited to resin, paper,
pigments, and plasticizer in accordance with their current and
historical classification of raw material meeting the definition of
Eligible Inventory.
"Eligible Work-In-Process" shall mean, on any date, the Inventory
------------------------
Value of work-in-process of the Borrower and the Guarantors on such
date that constitutes work-in-process as shown on the Borrower's or
Guarantors' perpetual inventory records or equivalent reporting in
accordance with their current and historical classification of
work-in-process meeting the definition of Eligible Inventory.
"Favorable Variance Reserve" shall mean an amount equal to the gross
--------------------------
capitalized favorable variance (the amount whereby standard cost used
to compute Inventory Value exceeds actual cost incurred) as classified
under the Borrower's or Guarantor's current and historical variance
cost categories.
"Inventory" shall mean "inventory" as such term is defined in the
---------
Bankruptcy Code, and shall also mean and include, without limitation,
all goods of the Borrower and the Guarantors, whether now owned or
hereafter acquired or in which the Borrower and the Guarantors now
have or hereafter may acquire any right, title or interest and
wherever located, whether in transit or otherwise, held
76
for sale or lease, or furnished or to be furnished under contracts for
service, sale or lease, including all goods returned or reclaimed from
customers, and all raw materials, or consumed or to be used or
consumed in its business, or in the processing, packaging or shipping
of the same, and all finished goods and all assets of a type
classified as inventory as reflected, in accordance with GAAP, as
stated on a consistent basis with the historical and current practices
of the Borrower and the Guarantors on the financial statements of the
Borrower and the Guarantors.
"Inventory Reserves" shall mean with respect to Inventory of the
------------------
Borrower and the Guarantors at any date, the amount equal to the sum
of (i) the amount of any reserves maintained by the Borrower and the
Guarantors for shrinkage and net realizable value in accordance with
its historical and current accounting practices and (ii) the Turnover
Reserve.
"Inventory Value" shall mean a dollar amount equal to the lesser of
---------------
(i) the standard cost (exclusive of favorable or unfavorable
variances) of Inventory (which includes direct labor, raw materials
and other direct manufacturing expenses and does not include Eligible
Period Expense on Inventory), determined on a basis consistent with
GAAP and with the Borrower's and Guarantors' current and historical
accounting practice or (ii) the market value of such Inventory;
provided, however that (a) in the event variances under the standard
-------- -------
cost method are capitalized, favorable variances shall be treated
according to the Favorable Variance Reserve and unfavorable variances
shall not be added to Eligible Inventory, and (b) in the event
variances under the standard cost method are expensed, a reserve shall
be determined by the Agent as appropriate in order to adjust the
standard cost of Eligible Inventory to approximate actual cost.
"PP&E Component" shall mean the lesser of (x) 33-1/3% of the Total
--------------
Commitment and (y) $100,000,000; it being understood that this amount
is based upon the liquidation value in place for machinery and
equipment of the Borrower and the Guarantors at fourteen sites
evaluated in the Daley-Hodkin Personal Property Auction Sale Value,
Orderly Liquidation Value & Liquidation Value in Place Appraisal
Report dated December 2000/January 2001 ("Daley-Hodkin Report"), a
-------------------
true and correct copy of which has been delivered to the Agent. This
amount may be revised by the Agent in the Agent's exclusive judgment
at any time after there shall have occurred sales of machinery and
equipment (or casualty losses not covered by insurance) at any of the
fourteen sites included in the Daley-Hodkin report and the
corresponding aggregate sales proceeds from the machinery and
equipment sale is greater than $5,000,000 and such assets have not
been replaced by assets of equal or greater value.
"Requirements of Law" shall mean, as to any Person, the Certificate or
-------------------
Articles of Incorporation and By-Laws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon
such Person or any of its property or to which such Person or any of
its property is subject.
"Turnover Days" shall mean inventory, as of the most current Borrowing
-------------
Base reporting date, determined in a manner consistent with historical
accounting practices utilized for external reporting purposes (which
shall include direct
77
costs, period expenses, FIFO and LIFO adjustments), divided by cost of
-------
goods sold for the most recently ended 12 months, determined in an
equivalent manner times 360.
-----
"Turnover Reserve" shall mean, on any date, with respect to the
----------------
Inventory, if Turnover Days for floor products exceeds 50 days or
Turnover Days for building products exceeds 35 days then, in the
Agent's exclusive judgment, an additional reserve for turnover may be
included.
The definition of the term "Applicable Margin" set forth in Section 1.01 of
the Credit Agreement is hereby amended by deleting the amount "$400,000,000" set
forth in the interest rate grid appearing therein and inserting in lieu thereof
the amount "$300,000,000".
The definition of the term "Borrowing Base" set forth in Section 1.01 of
the Credit Agreement is hereby amended in its entirety to read as follows:
"Borrowing Base" shall mean, on any date, the amount (calculated based
--------------
on the most recent Borrowing Base Certificate delivered pursuant to
this Agreement) that is equal to the sum of (a) 85% of Adjusted
Eligible Accounts Receivable plus (b) 60% of Eligible Finished Goods
----
plus (c) 15% of Eligible Raw Materials plus (d) 25% of Eligible
---- ----
Work-in-Process plus (e) 60% of Eligible Period Expense on Inventory
----
plus (f) the PP&E Component, provided that the amount derived from
---- --------
clause (e) shall not comprise more than 15% of the Borrowing Base.
Standards of eligibility and reserves and advance rates of the
Borrowing Base may be revised and adjusted from time to time by the
Agent in its sole discretion and consistent with its standard
practice, with any changes in such standards to be effective 10 days
after delivery of notice thereof to the Borrower.
The definition of the term "Borrowing Base Certificate" set forth in
Section 1.01 of the Credit Agreement is hereby amended in its entirety toward as
follows:
"Borrowing Base Certificate" shall mean a certificate substantially in
--------------------------
the form of Exhibit D hereto (with such changes therein as may be
required by the Agent to reflect the components of and reserves
against the Borrowing Base as provided for hereunder from time to
time), executed and certified as accurate and complete by a Financial
Officer of the Borrower, which shall include appropriate exhibits and
schedules as referred to therein and as provided for in Section 5.07.
The definition of the term "Prepayment Date" set forth in Section 1.01 of
the Credit Agreement is hereby amended in its entirety to read as follows:
"Prepayment Date" shall mean February 2, 2001 if the Final Order has
---------------
not been entered by the Bankruptcy Court on or prior to such date.
Section 2.01(a) of the Credit Agreement is hereby amended by deleting the
amount "$400,000,000" appearing in clause (i) thereof and inserting in lieu
thereof the amount "$300,000,000."
78
Section 2.23 of the Credit Agreement is here by amended by deleting the
words "Section 6.03(vi") appearing in the first sentence thereof and inserting
in lieu thereof the words "Sections 6.03(vi) and (vii)".
Section 5.01(f) of the Credit Agreement is hereby amended by deleting the
words "within 45 days of the Closing Date" appearing therein and inserting in
lieu thereof the words "not later than February 16, 2001."
Section 5.01 of the Credit Agreement is hereby further amended by deleting
the period at the end of clause (p) thereof and inserting in lieu thereof a
comma, and by inserting the following new clause (q) at the end thereof:
"(q) promptly, notice of the sale or other disposition (or casualty
loss) of any of the assets included in the PP&E Component with an
aggregate book value of in excess of $5,000,000."
Section 5.07 of the Credit Agreement is hereby amended by deleting the
words "within that number of days after the end of each month that is agreed
upon by the Borrower and the Agent," appearing in clause (i) thereof and
inserting in lieu thereof the words "within 20 days after the end".
Section 6.03 of the Credit Agreement is hereby amended by inserting the
parenthetical phrase "(including, without limitation, overseas netting, pooling
or sweep product arrangements)" immediately following the words "cash management
services" appearing in clause (vi) thereof.
Section 6.10 of the Credit Agreement is hereby amended by deleting the
proviso appearing in subsection (iii) thereof and inserting in lieu thereof the
following:
"provided that loans, advances and capital contributions after the
--------
Closing Date to Non-filed Subsidiaries made from the proceeds of Loans
plus Letters of Credit issued for the exclusive benefit of Non-filed
----
Subsidiaries shall not exceed $125,000,000 at any one time
outstanding, of which not more than $100,000,000 shall be from the
proceeds of Loans."
Annex A to the Credit Agreement is hereby replaced in its entirety by Annex
A hereto.
The Credit Agreement is hereby further amended by including a new Exhibit D
thereto in the form of Exhibit D hereto.
This Amendment shall not become effective until the date (the "Effective
---------
Date") on which this Amendment shall have been executed by the Borrower, the
- ----
Guarantors and Banks representing the Required Banks, and the Agent shall have
received evidence satisfactory to it of such execution.
79
Except to the extent hereby amended, the Credit Agreement and each of the
Loan Documents remain in full force and effect and are hereby ratified and
affirmed.
The Borrower agrees that its obligations set forth in Section 10.05 of the
Credit Agreement shall extend to the preparation, execution and delivery of this
Amendment, including the reasonable fees and disbursements of special counsel to
the Agent.
This Amendment shall be limited precisely as written and shall not be
deemed (a) to be a consent granted pursuant to, or a waiver or modification of,
any other term or condition of the Credit Agreement or any of the instruments or
agreements referred to therein or (b) to prejudice any right or rights which the
Agent or the Banks may now have or have in the future under or in connection
with the Credit Agreement or any of the instruments or agreements referred to
therein. Whenever the Credit Agreement is referred to in the Credit Agreement or
any of the instruments, agreements or other documents or papers executed or
delivered in connection therewith, such reference shall be deemed to mean the
Credit Agreement as modified by this Amendment.
This Amendment may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
This Amendment shall be governed by, and construed in accordance with, the
laws of the State of New York.
80
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and the year first written.
BORROWER:
ARMSTRONG WORLD INDUSTRIES, INC.
By:
------------------------------------
Name:
Title:
GUARANTORS:
NITRAM LIQUIDATORS, INC.
By:
------------------------------------
Title:
DESSEAUX CORPORATION OF NORTH AMERICA
By:
------------------------------------
Title:
THE CHASE MANHATTAN BANK,
Individually and as Agent
By:
------------------------------------
Title:
81
ANNEX A
to
REVOLVING CREDIT AND GUARANTY AGREEMENT
Dated as of December 6, 2000 (as amended)
Commitment Commitment
Bank Amount Percentage
------ ----------
The Chase Manhattan Bank
270 Park Avenue $300,000,000 100.0000%
New York, New York 10017
Attn: Ms. Kelly Shield
Vice President
Total $300,000,000 100.0000%
============ =========
THE CHASE MANHATTAN BANK
270 Park Avenue
New York, New York 10017
As of February 28, 2001
Armstrong World Industries, Inc.
2500 Columbia Avenue
Lancaster, Pennsylvania 17604
Attn: Ms. E. Follin Smith
Re: Amendment Letter
----------------
Ladies and Gentlemen:
This has reference to the Revolving Credit and Guaranty Agreement dated as
of December 6, 2000, as heretofore amended (the "Credit Agreement") among
----------------
Armstrong World Industries, Inc. (the "Borrower"), the Guarantors named therein,
--------
and The Chase Manhattan Bank, as Agent and as Bank. All terms used herein that
are defined in the Credit Agreement shall have the same meanings herein.
The undersigned hereby agrees to amend the Credit Agreement (x) by amending
Section 4.02(f) to delete, in its entirety, the parenthetical phrase "(delivered
no more than thirty (30) days prior to the making of a Loan or the issuance of a
Letter of Credit)" appearing therein,(y) by amending Section 5.07 to delete
clause (i) thereof in its entirety and inserting in lieu thereof the following:
"(i) within 20 days after the end of each quarter, a Borrowing Base
Certificate as of the last day of such quarter, provided, that the
--------
Borrower shall be required to furnish to the Agent a Borrowing Base
Certificate within 20 days after the end of each month (as of the last
day of such month) during which Total Facility Usage exceeded
$50,000,000 at any time during such month"
and (z) by amending Section 6.06 to insert a new clause (iii) at the end thereof
to read as follows:
"and (iii) any guaranty by the Borrower of obligations of any
Non-filed Subsidiary in respect of loans and advances to such
Non-filed Subsidiary in the ordinary course of its business consistent
with past practice; provided that the obligation of Borrower under
--------
such guaranty is unsecured and is not a Superpriority Claim."
This Amendment Letter shall not become effective until the date on which
counterparts of this Amendment Letter shall have been executed by the Borrower
and the Guarantors.
This Amendment Letter may be executed in any number of counterparts and by
the different parties hereto in separate counterparts, each of which, when so
executed and delivered, shall be deemed to be an original and all of which, when
taken together, shall constitute but one and the same instrument.
This Amendment Letter shall be limited precisely as written and shall not
be deemed (a) to be a consent granted pursuant to, or a waiver or modification
of, any other term or condition of the Credit Agreement or any of the
instruments or agreements referred to therein or (b) to prejudice any right or
rights which the Agent or the Banks may now have or have in the future under or
in connection with the Credit Agreement or any of the instruments or agreements
referred to therein. Whenever the Credit Agreement is referred to in the Credit
Agreement or any of the instruments, agreements or other documents or papers
executed or delivered in connection therewith, such reference shall be deemed to
mean the Credit Agreement as modified by this Amendment Letter.
The Borrower agrees that its obligations set forth in Section 10.05 of the
Credit Agreement shall extend to the preparation, execution and delivery of this
Amendment Letter, including the reasonable fees and disbursements of special
counsel to the Agent.
This Amendment Letter shall be construed in accordance with and governed by
the laws of the State of New York.
Very truly yours,
THE CHASE MANHATTAN BANK,
Individually and as Agent
By:
--------------------------------------
Title:
Acknowledged and Agreed to as
of this 28th day of February, 2001
ARMSTRONG WORLD INDUSTRIES, INC.
By:
-------------------------------
Title:
NITRAM LIQUIDATORS, INC.
By:
-------------------------------
Title:
DESSEAUX CORPORATION OF NORTH AMERICA
By:
-------------------------------
Title: