EXHIBIT 10.1
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
DATED AS OF OCTOBER 22, 2004
AMONG
INTERMET CORPORATION
AND
EACH OF ITS SUBSIDIARIES PARTY HERETO,
EACH AS A DEBTOR AND DEBTOR-IN-POSSESSION
THE LENDERS LISTED HEREIN,
AS LENDERS,
AND
DEUTSCHE BANK TRUST COMPANY AMERICAS
AS COLLATERAL AGENT AND AS CO-AGENT
AND
THE BANK OF NOVA SCOTIA
AS ADMINISTRATIVE AGENT
DEUTSCHE BANK SECURITIES INC.
AS SOLE LEAD ARRANGER
TABLE OF CONTENTS
Page No.
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Section 1. DEFINITIONS................................................................................. 2
1.1 Certain Defined Terms....................................................................... 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement.......... 38
1.3 Other Definitional Provisions and Rules of Construction..................................... 38
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS.................................................. 39
2.1 Commitments; Making of Revolving Loans; the Register; Optional Notes........................ 39
2.2 Interest on the Revolving Loans............................................................. 46
2.3 Fees........................................................................................ 48
2.4 Repayments, Prepayments and Reductions in Commitments; General Provisions Regarding
Payments; Application of Proceeds of Collateral and Payments................................ 49
2.5 Use of Proceeds............................................................................. 55
2.6 Special Provisions Governing Eurodollar Rate Loans.......................................... 56
2.7 Increased Costs; Taxes; Capital Adequacy.................................................... 58
2.8 Statement of Lenders; Obligation of Lenders and Issuing Lender to Mitigate.................. 62
2.9 Replacement of a Lender..................................................................... 63
2.10 Lien and Superpriority Nature of Obligations................................................ 64
2.11 Single Loan................................................................................. 65
2.12 Perfection.................................................................................. 65
2.13 Joint and Several Liability; Payment Indemnifications....................................... 65
Section 3. LETTERS OF CREDIT........................................................................... 66
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations Therein............... 66
3.2 Letter of Credit Fees....................................................................... 70
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.......................... 70
3.4 Obligations Absolute........................................................................ 73
3.5 Indemnification; Nature of Issuing Lender' Duties........................................... 74
3.6 Withdrawals from the Restricted Cash Account................................................ 75
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT................................................... 76
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4.1 Conditions to be Satisfied on the Closing Date.............................................. 76
4.2 Conditions to Increase in Revolving Commitments............................................. 80
4.3 Conditions to Loans......................................................................... 82
4.4 Conditions to Revolving Letters of Credit................................................... 83
4.5 Conditions to Withdrawals from Restricted Cash Account...................................... 84
Section 5. BORROWERS' REPRESENTATIONS AND WARRANTIES................................................... 85
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries............... 85
5.2 Authorization of Borrowing, etc............................................................. 86
5.3 Financial Condition......................................................................... 87
5.4 No Material Adverse Change; No Restricted Junior Payments................................... 88
5.5 Title to Properties; Liens; Real Property; Intellectual Property............................ 88
5.6 Litigation; Adverse Facts................................................................... 89
5.7 Payment of Taxes............................................................................ 89
5.8 Performance of Agreements; Material Contracts............................................... 90
5.9 Governmental Regulation..................................................................... 90
5.10 Securities Activities....................................................................... 90
5.11 Employee Benefit Plans...................................................................... 90
5.12 Certain Fees................................................................................ 91
5.13 Environmental Protection.................................................................... 91
5.14 Employee Matters............................................................................ 92
5.15 Matters Relating to Collateral.............................................................. 92
5.16 Disclosure.................................................................................. 94
5.17 Prepetition Senior Indebtedness............................................................. 94
5.18 Cash Management System...................................................................... 94
5.19 Orders...................................................................................... 95
5.20 Matters Relating to Loan Parties............................................................ 95
5.21 Foreign Assets Control Regulations, etc..................................................... 96
5.22 Inventory and Accounts...................................................................... 96
Section 6. COMPANY'S AFFIRMATIVE COVENANTS............................................................. 97
6.1 Financial Statements and Other Reports...................................................... 97
6.2 Existence, etc.............................................................................. 102
6.3 Payment of Taxes and Claims; Tax............................................................ 102
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6.4 Maintenance of Properties; Insurance; Application of Net Insurance/Condemnation
Proceeds.................................................................................... 103
6.5 Inspection Rights; Lender Meeting........................................................... 104
6.6 Compliance with Laws, etc................................................................... 104
6.7 Environmental Matters....................................................................... 104
6.8 Execution of Subsidiary Guaranty and Personal Property Collateral Documents After
the Closing Date............................................................................ 106
6.9 Matters Relating to Additional Real Property Collateral..................................... 108
6.10 Further Assurances.......................................................................... 108
6.11 Cash Management System...................................................................... 109
6.12 Borrowing Base and Inventory Reports........................................................ 109
6.13 Prepetition L/C Cash Collateral............................................................. 111
6.14 Matters Relating to Borrowers' Customers.................................................... 111
6.15 Environmental Reports....................................................................... 111
6.16 Post-Closing Deliveries..................................................................... 112
Section 7. BORROWERS' NEGATIVE COVENANTS............................................................... 112
7.1 Indebtedness................................................................................ 112
7.2 Liens and Related Matters................................................................... 113
7.3 Investments; Acquisitions................................................................... 114
7.4 Contingent Obligations...................................................................... 115
7.5 Restricted Junior Payments; Payments of Prepetition Indebtedness; Post-Petition Date
Expenses.................................................................................... 115
7.6 Budget Covenants............................................................................ 116
7.7 Restriction on Fundamental Changes; Asset Sales............................................. 117
7.8 Consolidated Capital Expenditures........................................................... 118
7.9 Sales and Lease-Backs....................................................................... 118
7.10 Transactions with Shareholders and Affiliates............................................... 118
7.11 Conduct of Business......................................................................... 119
7.12 Remedies of Agents.......................................................................... 119
7.13 Fiscal Year................................................................................. 119
7.14 Amendments of Agreements.................................................................... 119
7.15 Inactive Subsidiaries....................................................................... 119
7.16 ERISA Plans................................................................................. 119
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Section 8. EVENTS OF DEFAULT........................................................................... 120
8.1 Failure to Make Payments When Due........................................................... 120
8.2 Default in Post-Petition Liabilities........................................................ 120
8.3 Breach of Certain Covenants................................................................. 120
8.4 Breach of Warranty.......................................................................... 120
8.5 Other Defaults Under Loan Documents......................................................... 121
8.6 Bankruptcy Events........................................................................... 121
8.7 Judgments................................................................................... 123
8.8 Dissolution................................................................................. 123
8.9 Employee Benefit Plans...................................................................... 123
8.10 Invalidity of Subsidiary Guaranty; Failure of Security; Repudiation of Obligations.......... 123
8.11 Exercise of Offset.......................................................................... 124
8.12 Non-Loan Party Subsidiary Bankruptcy Events................................................. 124
8.13 Material Adverse Effect..................................................................... 125
8.14 Management Change........................................................................... 125
Section 9. AGENTS AND LEAD LENDERS..................................................................... 127
9.1 Appointment................................................................................. 127
9.2 Powers and Duties; General Immunity......................................................... 128
9.3 Independent Investigation by Lenders; No Responsibility For Appraisal of
Creditworthiness............................................................................ 129
9.4 Right to Indemnity.......................................................................... 130
9.5 Resignation of Administrative Agent; Successor Administrative Agent and Issuing
Lender...................................................................................... 130
9.6 Resignation of Collateral Agent............................................................. 131
9.7 Collateral Documents and Subsidiary Guaranty................................................ 131
9.8 Duties of Other Agents...................................................................... 132
9.9 Agent May File Proofs of Claim.............................................................. 132
Section 10. MISCELLANEOUS............................................................................... 133
10.1 Successors and Assigns; Assignments and Participations in Loans and Letters of Credit....... 133
10.2 Expenses.................................................................................... 136
10.3 Indemnity................................................................................... 138
10.4 Set-Off; Security Interest in Deposit Accounts.............................................. 139
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10.5 Ratable Sharing............................................................................. 140
10.6 Amendments and Waivers...................................................................... 141
10.7 Independence of Covenants................................................................... 142
10.8 Notices; Effectiveness of Signatures........................................................ 142
10.9 Survival of Representations, Warranties and Agreements...................................... 143
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative....................................... 143
10.11 Marshalling; Payments Set Aside............................................................. 144
10.12 Severability................................................................................ 144
10.13 Obligations Several; Independent Nature of Lenders' Rights; Damage Waiver................... 144
10.14 [Reserved].................................................................................. 145
10.15 Applicable Law.............................................................................. 145
10.16 Construction of Agreement; Nature of Relationship........................................... 145
10.17 Consent to Jurisdiction and Service of Process.............................................. 145
10.18 Waiver of Jury Trial........................................................................ 146
10.19 Confidentiality............................................................................. 146
10.20 Counterparts; Effectiveness................................................................. 147
10.21 Court Proceedings........................................................................... 148
10.22 USA Patriot Act............................................................................. 148
10.23 Release of Parties; Waivers................................................................. 148
Signature pages ............................................................................................. S-1
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EXHIBITS
I(a) FORM OF NOTICE OF BORROWING
I(b) FORM OF NOTICE OF WITHDRAWAL
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF INTERIM BORROWING ORDER
IV FORM OF REQUEST FOR ISSUANCE OF LETTER OF CREDIT
V FORM OF BORROWING SUBSIDIARY AGREEMENT
VI FORM OF REVOLVING NOTE
VII FORM OF SUBSIDIARY GUARANTY
VIII FORM OF COMPLIANCE CERTIFICATE
IX FORM OF OPINION OF COUNSEL TO LOAN PARTIES
X FORM OF SECURITY AGREEMENT
XI FORM OF ASSIGNMENT AGREEMENT
XII FORM OF BORROWING BASE CERTIFICATE
XIII FORM OF COLLATERAL ACCESS AGREEMENT
XIV FORM OF COVENANT ADDENDUM
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SCHEDULES
1.1B BUDGET
1.1C SPECIFIED ACCOUNT DEBTORS
2.1A(i) LENDERS' CLOSING DATE COMMITMENTS AND PRO RATA SHARES
2.1A(ii)(a) INCREMENTAL COMMITMENTS AND PRO RATA SHARES AS OF THE SUBSEQUENT
FUNDING DATE
2.1A(ii)(b) INCREMENTAL COMMITMENTS AND PRO RATA SHARES AS OF THE INCREMENTAL
COMMITMENT EFFECTIVE DATE
2.5A PERMITTED USE OF PROCEEDS
4.1J CASH MANAGEMENT SYSTEM
4.2H FIXED ASSETS
5.1 SUBSIDIARIES OF COMPANY; OWNERSHIP
5.2 THIRD PARTY CONSENTS
5.2E RESTRICTIONS ON TRANSFER
5.3 FINANCIAL INFORMATION
5.4 MATERIAL CHANGES
5.5B REAL PROPERTY
5.5C INTELLECTUAL PROPERTY
5.6 LITIGATION
5.8 MATERIAL CONTRACTS
5.11B ERISA EVENTS
5.11C CERTAIN EMPLOYEE BENEFIT PLANS
5.13 ENVIRONMENTAL MATTERS
5.17 PREPETITION SENIOR INDEBTEDNESS
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6.16 POST-CLOSING DELIVERIES
7.1 CERTAIN EXISTING OBLIGATIONS
7.2 CERTAIN EXISTING LIENS
7.3 CERTAIN EXISTING INVESTMENTS
7.4(iii) CERTAIN CONTINGENT OBLIGATIONS
7.9 EXISTING SALE LEASEBACKS
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INTERMET CORPORATION
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
This DEBTOR-IN-POSSESSION CREDIT AGREEMENT is dated as of October
22, 2004 and entered into by and among INTERMET CORPORATION, a Georgia
corporation, as a debtor and a debtor-in-possession ("COMPANY"), and EACH OF THE
COMPANY'S SUBSIDIARIES LISTED ON THE SIGNATURE PAGES HEREOF, each as a debtor
and a debtor-in-possession (each of Company and such Subsidiaries, and each
Additional Subsidiary Borrower (such term and other capitalized terms used
hereinafter without definition have the meanings set forth in subsection 1.1 of
this Agreement), a "BORROWER" or a "DEBTOR", and collectively, "BORROWERS" (on a
joint and several basis) or "DEBTORS"); THE FINANCIAL INSTITUTIONS LISTED ON THE
SIGNATURE PAGES HEREOF (each individually referred to herein as a "LENDER" and
collectively as "LENDERS"); DEUTSCHE BANK TRUST COMPANY AMERICAS ("DEUTSCHE
BANK"), as collateral agent for Lenders (in such capacity, "COLLATERAL AGENT")
and as co-agent; and THE BANK OF NOVA SCOTIA ("SCOTIA CAPITAL"), as
administrative agent for Lenders (in such capacity, "ADMINISTRATIVE AGENT").
R E C I T A L S
WHEREAS, on September 29, 2004 (the "PETITION DATE"), each Debtor
filed a voluntary petition for relief under the Bankruptcy Code with the United
States Bankruptcy Court for the Eastern District of Michigan (the "BANKRUPTCY
COURT") (such proceedings being jointly administered under Case No. 04-67597,
together with any other jointly administered proceedings under the Bankruptcy
Code for any Additional Subsidiary Borrowers, are hereinafter collectively
referred to as the "CHAPTER 11 CASES");
WHEREAS, each Borrower continues to operate its businesses and
manage its properties as a debtor-in-possession pursuant to Sections 1107 and
1108 of the Bankruptcy Code;
WHEREAS, Borrowers have requested Lenders to provide a
debtor-in-possession revolving credit facility in a principal amount of
$60,000,000, under which revolving loans shall be available for borrowing and
letters of credit may be issued, subject to the limitations set forth herein for
such letters of credit, on a post-petition basis on the terms and conditions set
forth herein;
WHEREAS, Company is party to the Prepetition L/C Facility, under
which the Prepetition Scotia L/C was issued for the account of Company and
secured by cash collateral;
WHEREAS, Lenders are willing to provide debtor-in-possession
financing only if all of the Obligations hereunder and under the other Loan
Documents constitute, in accordance with and on the terms and conditions set
forth herein, allowed superpriority administrative expense claims pursuant to
Section 364(c)(1) of the Bankruptcy Code in the Chapter 11 Cases;
WHEREAS, Borrowers are unable to obtain credit on more favorable
terms or obtain credit other than by granting a first priority lien, and the
Prepetition Senior Lenders have
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consented to the debtor-in-possession revolving credit facility contemplated
hereby and are being provided adequate protection payments as set forth herein;
and
WHEREAS, each Borrower desires to secure all of the Obligations
hereunder and under the other Loan Documents by granting to Collateral Agent, on
behalf of Lenders, a priming Lien (with the priority contemplated in this
Agreement) on substantially all of its real, personal and mixed property,
including pledges of up to 65% of the Capital Stock of its direct Foreign
Subsidiaries;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrowers, Lenders and Agents agree
as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the following
meanings:
"ACCOMMODATING CUSTOMER" means any Person who has executed a
Customer Agreement.
"ACCOUNTS" shall mean all present and future accounts, contract
rights, general intangibles, chattel paper, documents and instruments, as such
terms are defined in the UCC, of each Borrower, including, without limitation,
all obligations for the payment of money arising out of the sale, lease or other
disposition of goods or other property or rendition of services and all proceeds
thereof.
"ADDITIONAL SUBSIDIARY BORROWER" has the meaning assigned to that
term in subsection 6.8D.
"ADJUSTED PRO RATA SHARE" means, with respect to any Lender, the
percentage obtained by dividing (i) the Loan Exposure of that Lender by (ii) the
aggregate Loan Exposure of all Lenders other than Daily Funding Lender.
"ADMINISTRATIVE AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5A; provided, however,
that with respect to the period prior to the Subsequent Funding Date, solely
with respect to duties related to funding of, notices with respect to and
distributing payments with respect to Revolving Loans and Revolving Letters of
Credit, references to Administrative Agent hereunder shall be deemed references
to Collateral Agent.
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFECTED LOANS" has the meaning assigned to that term in subsection
2.6C.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the
2
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling", "controlled by" and "under common control with"), as
applied to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of that
Person, whether through the ownership of voting securities or by contract or
otherwise.
"AGENT-RELATED PERSONS" means Agents, Lead Lenders and such Agents'
and Lead Lenders' officers, directors, employees, agents and affiliates.
"AGENT" means any of Administrative Agent, Collateral Agent and
Co-Agent, and "AGENTS" means Administrative Agent, Collateral Agent and
Co-Agent, collectively.
"AGENTS' COUNSEL" means Wachtell, Lipton, Rosen & Katz, counsel to
Administrative Agent, and O'Melveny & Myers LLP, counsel to Collateral Agent.
"AGGREGATE AMOUNTS DUE" has the meaning assigned to that term in
subsection 10.5.
"AGGREGATE UTILIZED CASH COLLATERAL AMOUNT" means at any time (i)
prior to the Subsequent Funding Date, zero, and (ii) on and after the Subsequent
Funding Date, an amount equal to that portion of the aggregate amount of
Prepetition L/C Cash Collateral deposited in the Restricted Cash Account in
accordance with subsection 6.13 that has been either (a) applied to repay
Revolving Loans on the Subsequent Funding Date, or (b) withdrawn from the
Restricted Cash Account on or after the Subsequent Funding Date other than for
the purposes described in clause (ii)(a); provided, however, that if the Budget
in effect at the time the Aggregate Utilized Cash Collateral Amount is being
determined was delivered after the Subsequent Funding Date and the effect of
amounts deposited into the Restricted Cash Account was accounted for in
determining the maximum amount Revolving Loan usage projected in the Budget, the
Aggregate Utilized Cash Collateral Amount shall equal zero.
"AGREEMENT" means this Debtor-in-Possession Credit Agreement dated
as of October 22, 2004, as it may be amended, restated, supplemented or
otherwise modified from time to time.
"APPLICABLE LENDING OFFICE" means, for each Lender, the office of
such Lender (or of an Affiliate of such Lender) as such Lender may from time to
time specify to Administrative Agent and Company by written notice as the office
by which its Eurodollar Loans are made and maintained.
"APPROVED FUND" means a Fund that is administered or managed by (i)
a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an
entity that administers or manages a Lender.
"ASSET SALE" means the sale or assignment by Company or any of its
Subsidiaries to any Person other than Company or any of its wholly-owned direct
or indirect Subsidiaries of (i) any of the stock of any of Company's
Subsidiaries, (ii) substantially all of the assets of any division or line of
business of Company or any of its Subsidiaries, or (iii) any other assets
(whether tangible or intangible) of Company or any of its Subsidiaries (other
than (a) inventory
3
sold in the ordinary course of business, (b) sales, assignments, transfers or
dispositions of accounts in the ordinary course of business for purposes of
collection, and (c) sales of obsolete, worn-out or surplus property in the
ordinary course of business), including any assignment or sale of a lease.
"ASSIGNED RIGHTS AND OBLIGATIONS" has the meaning assigned to that
term in subsection 2.1A(ii).
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit XI annexed hereto.
"AVOIDANCE ACTIONS" means claims arising pursuant to Sections 544,
545, 547, 548, 553 and, to the extent applicable under the foregoing sections,
550 of the Bankruptcy Code.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BANKRUPTCY COURT" has the meaning assigned to that term in the
recitals to this Agreement.
"BANKRUPTCY RULE" means a rule promulgated as part of the Federal
Rules of Bankruptcy Procedure, as now or hereafter in effect.
"BASE RATE" means, at any time, the higher of (x) the Prime Rate or
(y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate.
"BASE RATE LOANS" means Revolving Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2A.
"BASE RATE MARGIN" means the margin over the Base Rate used in
determining the rate of interest of Base Rate Loans pursuant to subsection 2.2A.
"BORROWING BASE" means, as at any date of determination, an
aggregate amount equal to:
I. eighty-five percent (85%) of Eligible Accounts; plus
II. the lesser of (a) fifty percent (50%) of the Value of Eligible
Inventory related to Company's business, and (b) eighty-five percent
(85%) of the Net Orderly Liquidation Value of Eligible Inventory
related to Company's business; plus
III. one hundred percent (100%) of the Value of the Fixed Assets;
provided, that such amount shall be reduced by the aggregate amount of all
mandatory prepayments made pursuant to subsection 2.4A(iii)(a); minus
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IV. the aggregate amount of reserves, if any, established by
Collateral Agent in the exercise of its Permitted Discretion against
Eligible Inventory, Eligible Accounts and Fixed Assets; minus
V. the Carve-Outs (determined as of such date of determination);
provided that Collateral Agent, in the exercise of its Permitted Discretion, may
(a) increase or decrease reserves against Eligible Inventory and Eligible
Accounts and (b) reduce the advance rates provided in this definition, or
restore such advance rates to any level equal to or below the advance rates in
effect as of the Closing Date; provided further, that promptly after determining
that any action under the preceding proviso (any such action, a "PROPOSED
BORROWING BASE ADJUSTMENT") is necessary or desirable, Collateral Agent shall
notify and consult with Borrowers as to the rationale for such Proposed
Borrowing Base Adjustment (it being understood that such Proposed Borrowing Base
Adjustment shall be effective, immediately upon delivery by Collateral Agent of
such notice, for all purposes hereunder as a modification to the Borrowing Base;
provided, however, that so long as no Event of Default has occurred and is
continuing, solely during the 48-hour period after notification by the
Collateral Agent regarding the Proposed Borrowing Base Adjustment, any reduction
to the Borrowing Base that would otherwise have occurred pursuant to the
previous proviso shall not be effective to the extent that it would result in
the Borrowing Base being less than the sum of (x) the Revolving Loans
outstanding and (y) the issued and outstanding Revolving Letters of Credit, in
each case, immediately prior to such notice. Without limiting the generality of
the foregoing, based on the results of examinations and/or appraisals of
Inventory, Accounts and Fixed Assets of Borrowers to be initiated on or after
the Closing Date by a firm or firms selected by Collateral Agent, Collateral
Agent may, in the exercise of its Permitted Discretion, amend the provisions
hereof as provided in subsection 10.6 without consent of any Borrowers or
Lenders.
"BORROWING BASE CERTIFICATE" means a certificate substantially in
the form of Exhibit XII annexed hereto delivered by Borrowers to Collateral
Agent pursuant to subsection 6.12.
"BORROWING ORDERS" means the Interim Borrowing Order and the Final
Borrowing Order.
"BORROWING SUBSIDIARY AGREEMENT" means a Borrowing Subsidiary
Agreement, in substantially the form of Exhibit V.
"BUDGET" means (i) until the Incremental Commitment Effective Date,
the consolidated and consolidating cash flow projections attached hereto as
Schedule 1.1B showing weekly anticipated cash receipts and disbursements for the
10-week period commencing on the Closing Date and monthly anticipated cash
receipts and disbursements for the period from the Closing Date through the
Budget Period, together with weekly projected utilization of Revolving Loans and
Revolving Letters of Credit, and (ii) on and after the Incremental Commitment
Effective Date, Borrowers' business plan in the Chapter 11 Cases approved by
Administrative Agent and Collateral Agent pursuant to subsection 4.2C; provided
that, upon approval by Administrative Agent and Collateral Agent (or Requisite
Lenders, as applicable) in accordance with subsection 6.1(xvi) of the projected
financial statements and cash flow projections delivered
5
pursuant to such subsection, the Budget shall be deemed supplemented and/or
restated (and Schedule 1.1B shall be replaced) with respect to all periods
covered by such approved projections.
"BUDGET PERIOD" means the date from the Closing Date through and
including the later of (i) October 21, 2005 and (ii) the Maturity Date
(determined as of any date of determination).
"BUSINESS DAY" means (i) for all purposes other than as covered by
clauses (ii) and (iii) below, any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of Michigan or the State of
New York or is a day on which banking institutions located in either state are
authorized or required by law or other governmental action to close, (ii) with
respect to all notices, determinations, fundings and payments in connection with
the Eurodollar Rate or any Eurodollar Rate Loans, any day that is a Business Day
described in clause (i) above and that is also a day for trading by and between
banks in Dollar deposits in the London interbank market, and (iii) with respect
to all notices, determinations, fundings and payments in connection with any
Revolving Letter of Credit or Issuing Lender, any day excluding Saturday, Sunday
and any day which is a legal holiday under the laws of the State of New York or
is a day on which banking institutions located in such state are authorized or
required by law or other governmental action to close.
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CAPITAL STOCK" means the capital stock or other equity interests of
a Person.
"CARVE-OUT NOTICE" has the meaning assigned to that term in
subsection 2.10.
"CARVE-OUTS" has the meaning assigned to that term in subsection
2.10.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within thirty days
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within thirty days after
such date and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's ("S&P") or Moody's Investors Service,
Inc. ("MOODY'S"); (iii) commercial paper maturing no more than thirty days from
the date of creation thereof and having, at the time of the acquisition thereof,
a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv)
certificates of deposit or bankers' acceptances maturing within thirty days
after such date and issued or accepted by any Lender or by any commercial bank
organized under the laws of the United States of America or any state thereof or
the District of Columbia that (a) is at least "adequately capitalized" (as
defined in the regulations of its primary Federal banking regulator) and (b) has
Tier 1 capital (as
6
defined in such regulations) of not less than $100,000,000; and (v) shares of
any money market mutual fund that (a) has at least 95% of its assets invested
continuously in the types of investments referred to in clauses (i) and (ii)
above, (b) has net assets of not less than $500,000,000, and (c) has the highest
rating obtainable from either S&P or Moody's.
"CASH MANAGEMENT SYSTEM" means the cash management system as of the
Closing Date, as described in Schedule 4.1J attached hereto, as the same may be
modified in accordance with subsection 6.11.
"CHANGE IN LAW" means the occurrence, after the date of this
Agreement, of any of the following: (i) the adoption or taking effect of any
law, rule, regulation, treaty or order, (ii) any change in any law, rule,
regulation or treaty or in the administration, interpretation or application
thereof by any Government Authority, (iii) any determination of a court or other
Government Authority or (iv) the making or issuance of any request, guideline or
directive (whether or not having the force of law) by any Government Authority.
"CHAPTER 11 CASES" has the meaning assigned to that term in the
recitals of this Agreement.
"CLOSING DATE" means the earliest date as of which all conditions
set forth in subsection 4.1 of this Agreement shall have been satisfied or
waived (in accordance with subsection 10.6).
"CO-AGENT" has the meaning assigned to that term in the introduction
to this Agreement.
"COLLATERAL" means, collectively, all of the real, personal and
mixed property (including Capital Stock) in which Liens are purported to be
granted pursuant to this Agreement, Collateral Documents or the Borrowing Orders
as security for the Obligations; provided that, (i) until such time as the
Prepetition Senior Lien in favor of Scotia Capital under the Prepetition L/C
Facility on the Prepetition L/C Cash Collateral is released on the Subsequent
Funding Date, solely for purposes of the priming Lien created under the Interim
Borrowing Order securing the Obligations, the Collateral shall not include the
Prepetition L/C Cash Collateral, and (ii) in no event shall Collateral include
any rights, recoveries or proceeds of Avoidance Actions.
"COLLATERAL ACCOUNT" has the meaning assigned to that term in the
Security Agreement.
"COLLATERAL ACCESS AGREEMENTS" means any landlord waiver, mortgagee
waiver, bailee letter or any similar acknowledgment agreement of (i) any
landlord or mortgagee in respect of any Real Property Asset where any equipment
or Inventory is located or (ii) any warehouseman or processor in possession of
Inventory, substantially in the form of Exhibit XIII annexed hereto, with such
changes thereto as may be agreed to by Collateral Agent.
"COLLATERAL AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Collateral Agent appointed pursuant to subsection 9.6.
7
"COLLATERAL DOCUMENTS" means the Security Agreement, the Mortgages,
the Collateral Access Agreements and all other instruments or documents
delivered by any Loan Party pursuant to this Agreement or any of the other Loan
Documents or an applicable order of the Bankruptcy Court in order to grant to
Collateral Agent, on behalf of Lenders, a Lien on any real, personal or mixed
property of that Loan Party as security for the Obligations.
"COMMERCIAL LETTER OF CREDIT" means any letter of credit or similar
instrument issued for the purpose of providing the primary payment mechanism in
connection with the purchase of any materials, goods or services by Borrowers or
any of their respective Subsidiaries in the ordinary course of business of
Borrowers or such Subsidiary.
"COMMITMENT TERMINATION DATE" means the earliest of (i) the Maturity
Date, and (ii) the Business Day on which any Lead Lender delivers a Termination
Notice to Borrowers.
"COMMITMENTS" means one or more of the Revolving Commitments and the
Incremental Commitments or any combination thereof.
"COMMODITY AGREEMENT" means any commodity derivative contract,
forward sales contract, futures contract, option contract or other similar
agreement or arrangement to which Borrowers or any of their Subsidiaries is a
party.
"COMPANY" has the meaning assigned to that term in the introduction
to this Agreement.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the
form of Exhibit VIII annexed hereto.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the sum
of the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of Capital
Leases which is capitalized on the consolidated balance sheet of Company and its
Subsidiaries) by Company and its Domestic Subsidiaries during that period that,
in conformity with GAAP, are included in "additions to property, plant or
equipment" or comparable items reflected in the consolidated statement of cash
flows of Company and its Domestic Subsidiaries. For purposes of this definition,
the purchase price of equipment that is purchased simultaneously with the
trade-in of existing equipment or with insurance proceeds shall be included in
Consolidated Capital Expenditures only to the extent of the gross amount of such
purchase price less the credit granted by the seller of such equipment for the
equipment being traded in at such time or the amount of such proceeds, as the
case may be.
"CONSOLIDATED EBITDA" means, for any period, the sum, without
duplication, of the amounts for such period of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) provisions for taxes based on income, (iv)
total depreciation expense, (v) total amortization expense, (vi) other non-cash
items (other than any such non-cash item to the extent it represents an accrual
of or reserve for cash expenditures in any future period), and (vii)
extraordinary expenses described in the Covenant Addendum, provided that such
amounts may be added back to Consolidated Net Income solely for the periods and
subject to any limitations set forth in the
8
Covenant Addendum, but only, in the case of clauses (ii)-(vii), to the extent
deducted in the calculation of Consolidated Net Income, less non-cash items
added in the calculation of Consolidated Net Income (other than any such
non-cash item to the extent it will result in the receipt of cash payments in
any future period), all of the foregoing as determined on a consolidated basis
for Company and its Subsidiaries in conformity with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Company and its Domestic
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of Company and its Domestic Subsidiaries, net of interest income,
including all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing, net costs under
Interest Rate Agreements and amounts referred to in subsection 2.3 payable to
Agents and Lenders that are considered interest expense in accordance with GAAP,
but excluding, however, any such amounts referred to in subsection 2.3 payable
on or before the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of Company and its Domestic Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP;
provided that there shall be excluded (i) the income (or loss) of any Person
(other than a Subsidiary of Company) in which any other Person (other than
Company or any of its Subsidiaries) has a joint interest, except to the extent
of the amount of dividends or other distributions actually paid to Company or
any of its Domestic Subsidiaries by such Person during such period, (ii) the
income (or loss) of any Person accrued prior to the date it becomes a Domestic
Subsidiary of Company or is merged into or consolidated with Company or any of
its Domestic Subsidiaries or that Person's assets are acquired by Company or any
of its Subsidiaries, (iii) the income of any Subsidiary of Company to the extent
that the declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Subsidiary, (iv) any
after-tax gains or losses attributable to Asset Sales or returned surplus assets
of any Pension Plan, and (v) (to the extent not included in clauses (i) through
(iv) above) any net extraordinary gains or net non-cash extraordinary losses.
"CONTINGENT OBLIGATION", as applied to any Person, means any direct
or indirect liability, contingent or otherwise, of that Person (i) with respect
to any Indebtedness, lease, dividend or other obligation of another if the
primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Hedge Agreements. Contingent Obligations shall include
(a) the direct or indirect guaranty, endorsement (otherwise than for collection
or deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another, (b)
the obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (c) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise)
9
(1) to purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (2) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (1) or (2) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"CONTROL AGREEMENT" means an agreement, satisfactory in form and
substance to Collateral Agent and executed by the financial institution or
securities intermediary at which a Deposit Account or a Securities Account, as
the case may be, is maintained, pursuant to which such financial institution or
securities intermediary confirms and acknowledges Collateral Agent's security
interest in such account, and agrees that the financial institution or
securities intermediary, as the case may be, will comply with instructions
originated by Collateral Agent as to disposition of funds in such account,
without further consent by Company or any Subsidiary.
"COVENANT ADDENDUM" means the addendum to this Agreement,
substantially in the form of Exhibit XIV annexed hereto, delivered to Agents and
Lenders by Company pursuant to subsection 6.1(xvii) and approved by Lead
Lenders.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement to which Company or any of its Subsidiaries is
a party.
"CUSTOMER AGREEMENT" means an agreement with a customer of a
Borrower satisfactory in form and substance to Collateral Agent and
Administrative Agent.
"CUSTOMER PROGRAM APPROVAL DATE" means the earliest date (which
date, if it occurs, must be on or prior to December 31, 2004 or such later date
as Lead Lenders shall agree upon) that each Lead Lender shall have notified
Company in writing that it is satisfied, in its sole discretion, with the
Customer Agreements executed by each Major Customer.
"DAILY FUNDING LENDER" means, initially, Collateral Agent, in its
individual capacity as a Lender hereunder; provided, however, that with respect
to all periods on and after the Subsequent Funding Date and the transfer of the
Restricted Cash Account to Administrative Agent, Daily Funding Lender shall mean
Administrative Agent, in its individual capacity as a Lender hereunder.
"DEFAULT EXCESS" has the meaning assigned to that term in subsection
2.9.
"DEFAULT PERIOD" has the meaning assigned to that term in
subsection 2.9.
10
"DEFAULTED LOAN" has the meaning assigned to that term in
subsection 2.9.
"DEFAULTED PARTICIPATION" has the meaning assigned to that term in
subsection 2.9.
"DEFAULTING LENDER" has the meaning assigned to that term in
subsection 2.9.
"DEUTSCHE BANK" has the meaning assigned to that term in the
introduction to this Agreement.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or similar
account maintained with a Person engaged in the business of banking, including a
savings bank, savings and loan association, credit union or trust company.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"DOMESTIC SUBSIDIARY" means any Subsidiary of Company that is
incorporated or organized under the laws of the United States of America, any
state thereof or in the District of Columbia.
"ELIGIBLE ACCOUNTS" means the Accounts of Borrowers arising in the
ordinary course of business (and not, for example, in connection with any
liquidation, clearance or termination of operations of a division or line of
goods), deemed by Collateral Agent in the exercise of its Permitted Discretion
to be eligible for inclusion in the calculation of the Borrowing Base. In
determining the amount to be so included, the face amount of such Accounts shall
be reduced by, without duplication, the amount of all returns, discounts,
deductions, credits, charges, asserted setoffs or other allowances. Unless
otherwise approved in writing by Collateral Agent, an Account shall not be an
Eligible Account if:
(a) it does not comply in all respects with the
representations, covenants and warranties set forth herein or in any
of the other Loan Documents; or
(b) payment terms are longer than the customary payment
terms of those customer contracts as of the Petition Date; or
(c) it is unpaid more than 90 days after the original
invoice date; or
(d) it arises out of a sale made by Borrowers to an account
debtor which is not acceptable to Collateral Agent, in its sole
discretion, including without limitation, to an account debtor which
is a director, officer, employee, Subsidiary or Affiliate of
Borrowers; or
(e) it is from an account debtor or its Affiliates with
respect to which fifty percent (50%) or more of the total face value
of all Accounts from that account debtor (and its Affiliates) are
ineligible under any provision of this definition; or
11
(f) when aggregated with all other Accounts of an account
debtor, such Account exceeds (1) if such account debtor is a
Specified Account Debtor, thirty percent (30%) and (2) if such
account debtor is not a Specified Account Debtor, ten percent (10%),
in each case of an amount equal to (x) the face value of all
Accounts of Borrowers then outstanding less (y) all prepayments,
security deposits or similar advances made to Borrowers with respect
to such Accounts that are not otherwise subject to a non-offset
agreement that has been approved by Collateral Agent, but only to
the extent of such excess, unless such excess is supported by an
irrevocable letter of credit satisfactory to Collateral Agent (as to
form, substance and issuer) in which Collateral Agent has a
perfected First Priority security interest; or
(g) the account debtor is located in the States of New
Jersey, Minnesota, or any other State requiring the filing of a
Business Activity Report or similar document in order to bring suit
or otherwise enforce its remedies against such Account Debtor in the
courts or through any judicial process of such State, unless the
Borrower generating such Account has filed a Notice of Business
Activities Report with the New Jersey Division of Taxation, the
Minnesota Department of Revenue, or with such other States, as
appropriate, for the current year; or
(h) (1) after the Customer Program Approval Date, the
account debtor with respect to such Account is a Major Customer but
is not an Accommodating Customer, or (2) the account debtor for such
Account has asserted a contractual right of setoff against any
Borrower, or has disputed or contested its liability in whole or in
part or otherwise has asserted or made any claim with respect to
such Account or any other Account which has not been resolved, in
each case to the extent of the amount of such actual or asserted
right of setoff, or the amount of such dispute or claim, as the case
may be; or
(i) the account debtor for such Account is a creditor of any
Borrower, but only to the extent of the amount owed by any Borrower
to such account debtor, or
(j) such Account is not payable in Dollars or the account
debtor for such Account is located outside the continental United
States, unless such Account is supported by an irrevocable letter of
credit satisfactory to Collateral Agent (as to form, substance and
issuer) in which Collateral Agent has a perfected First Priority
security interest; or
(k) the account debtor is owed amounts in respect of trade
promotions or rebates, but only to the extent of such owed amounts;
or
(l) the account debtor is the United States of America or
any department, agency or instrumentality thereof, unless such
Borrower duly assigns its rights to payment of such Account to
Collateral Agent pursuant to the Assignment of Claims Act of 1940,
as amended (31 U.S.C. Sections 3727 et seq.) and
12
notice of such assignment has been provided to the applicable
department, agency or instrumentality in accordance with such act;
or
(m) the account debtor is (or its assets are) the subject of
an a case under the Bankruptcy Code or a similar insolvency
proceeding or has made an assignment for the benefit of creditors or
whose assets have been conveyed to a receiver or trustee; or
(n) the sale to the account debtor is on a bill-and-hold,
guarantied sale, sale-and-return, sale on approval or consignment
basis or made pursuant to any other written agreement providing for
repurchase or return; or
(o) the goods giving rise to such Account have not been
shipped to the account debtor, the services giving rise to such
Account have not been performed, or such Account otherwise does not
represent a final sale; or
(p) such Account does not comply with all requirements of
law, including without limitation the Federal Consumer Credit
Protection Act, the Federal Truth in Lending Act and Regulation Z of
the Board of Governors of the Federal Reserve System; or
(q) it is not subject to a valid and perfected First
Priority Lien in favor of Collateral Agent and for which Collateral
Agent has not received adequate certificates, reports and other
assurances (the adequacy of which shall be determined by Collateral
Agent in its sole discretion) of such priority and perfection; or
(r) such Account is subject to any adverse security deposit,
prepayment or other similar advance made by or for the benefit of
the applicable account debtor which are not otherwise subject to a
non-offset agreement which has been approved by Collateral Agent,
but only to the extent of such deposit, prepayment or advance; or
(s) the account debtor is owed amounts in respect of
contractual volume rebates, but only to the extent of such owed
amounts; or
(t) it is an Account in respect of a deferred payment
program unless the first required payment has been received;
provided that Collateral Agent, in the exercise of its Permitted Discretion, may
impose additional restrictions to the standards of eligibility set forth in this
definition. Without limiting the generality of the foregoing, based on the
results of an examination and/or appraisal of Inventory and Accounts of
Borrowers to be initiated on or about the Closing Date by a firm selected by
Collateral Agent, Collateral Agent may, in the exercise of its Permitted
Discretion, amend the provisions hereof as provided in subsection 10.6 without
consent of any Borrowers or Lenders.
"ELIGIBLE ASSIGNEE" means (i) any Lender, any Affiliate of any
Lender and any Approved Fund of any Lender; and (ii) (a) a commercial bank
organized under the laws of the
13
United States or any state thereof; (b) a savings and loan association or
savings bank organized under the laws of the United States or any state thereof;
(c) a commercial bank organized under the laws of any other country or a
political subdivision thereof; provided that (1) such bank is acting through a
branch or agency located in the United States or (2) such bank is organized
under the laws of a country that is a member of the Organization for Economic
Cooperation and Development or a political subdivision of such country; and (d)
any other entity that is an "accredited investor" (as defined in Regulation D
under the Securities Act) that extends credit or buys loans as one of its
businesses including insurance companies, mutual funds and lease financing
companies; provided that neither Company nor any Affiliate of Company shall be
an Eligible Assignee.
"ELIGIBLE INVENTORY" means the aggregate amount of Raw Materials,
Work-in-Process and Finished Goods of Borrowers (but not including any Spare
Parts and Supplies, Packaging Materials or Patterns) used in or arising from the
Borrowers' business deemed by Collateral Agent in its Permitted Discretion to be
eligible for inclusion in the calculation of the Borrowing Base. In determining
the amount to be so included, such Inventory shall be valued at the lower of
cost or market on a basis consistent with such Borrowers' current and historical
accounting practice and net of an allowance for shipping or freight charges.
Unless otherwise approved in writing by Collateral Agent, an item of such
Inventory shall not be included in Eligible Inventory if:
(a) it is not subject to a valid and perfected First
Priority Lien in favor of Collateral Agent except, with respect to
Inventory stored at sites described in clause (b) below, for Liens
for unpaid rent or normal and customary warehousing or storage
charges which are not past due; or
(b) it is located on property owned by a Borrower but
subject to a mortgage in favor of a Person other than the
Prepetition Senior Agent referred to in clause (i) of the definition
of Prepetition Senior Agents or Collateral Agent or it is located on
property leased by a Borrower, unless it is subject to a Collateral
Access Agreement executed by any applicable mortgagee or lessor, as
the case may be, and segregated or otherwise separately identifiable
from goods of others, if any, stored on the premises (provided that
the failure to deliver any Collateral Access Agreement referred to
in this clause (b) shall not render the applicable item ineligible
to the extent that Collateral Agent establishes reserves in an
amount at least equal to three months rent payable thereunder and
Borrowers' costs to store or transport such Inventory to a location
owned by Borrowers or subject to a Collateral Access Agreement); or
(c) it is not owned solely by any Borrower or Borrowers do
not have good, valid and marketable title thereto; or it is subject
to an exchange agreement or reciprocal supply or purchase agreement
with other producers or suppliers; or
(d) it constitutes promotional supplies; or
(e) it is not located in the United States; or
14
(f) it consists of goods returned or rejected by such
Borrowers' customers or goods in transit to third parties (other
than goods in transit in the United States to sites described in
clause (b) above, covered by a Collateral Access Agreement or as to
which such reserve has been established); or
(g) it is not first-quality goods, is obsolete or slow
moving, or does not otherwise conform to the representations and
warranties contained in the Loan Documents; or
(h) it is purchased on consignment; or
(i) it is or was produced in violation of the Fair Labor
Standards Act or subject to the so-called "hot goods" provisions
contained in Title 29 U.S.C. 215(a)(i);
(j) it is not in good condition, does not meet all standards
imposed by any governmental agency, or department or division
thereof, having regulatory authority over the Inventory, or is not
either currently usable or currently saleable in the ordinary course
of Borrowers' business; or
(k) after the Customer Program Approval Date, it is marked
for a Major Customer that has not executed a Customer Agreement;
provided that Collateral Agent, in the exercise of its Permitted Discretion, may
impose additional restrictions to the standards of eligibility set forth in this
definition. Without limiting the generality of the foregoing, based on the
results of an examination and/or appraisal of Inventory, Accounts and Fixed
Assets of Borrowers to be initiated on or about the Closing Date by a firm or
firms selected by Collateral Agent, Collateral Agent may, in the exercise of its
Permitted Discretion, amend the provisions hereof as provided in subsection 10.6
without consent of any Borrowers or Lenders.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was maintained or contributed to by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any Government Authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of any Government
Authority relating to (i) environmental matters, including those relating to any
Hazardous Materials Activity, (ii) the generation, use, storage, transportation
or disposal of Hazardous Materials, or (iii) industrial hygiene, or the
protection of
15
human, plant or animal health or welfare, in any manner applicable to Company or
any of its Subsidiaries or any Facility.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor thereto.
"ERISA AFFILIATE", as applied to any Person, means (i) any
corporation that is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) that is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member. Any former ERISA Affiliate of a Person or any of
its Subsidiaries shall continue to be considered an ERISA Affiliate of such
Person or such Subsidiary within the meaning of this definition with respect to
the period such entity was an ERISA Affiliate of such Person or such Subsidiary
and with respect to liabilities arising after such period for which such Person
or such Subsidiary could be liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability pursuant to Section
4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan; (vi) the imposition of liability on Company, any of
its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section
4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of
ERISA; (vii) the withdrawal of Company, any of its Subsidiaries or any of their
respective ERISA Affiliates in a complete or partial withdrawal (within the
meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there
is any potential liability therefor, or the receipt by Company, any of its
Subsidiaries or any of their respective ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated
under Section 4041A or 4042 of ERISA; (viii) the assertion of a material claim
(other than routine claims for benefits) against any Employee Benefit Plan other
than a Multiemployer Plan or the assets thereof, or against Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in connection with any
Employee Benefit Plan; (ix) receipt from the Internal Revenue Service of notice
of the failure of any Pension Plan (or any other Employee Benefit Plan intended
to be qualified under
16
Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of
the Internal Revenue Code, or the failure of any trust forming part of any
Pension Plan to qualify for exemption from taxation under Section 501(a) of the
Internal Revenue Code; or (x) the imposition of a Lien pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with
respect to any Pension Plan.
"EURODOLLAR RATE" means, for any Interest Rate Determination Date
with respect to an Interest Period for a Eurodollar Rate Loan, the rate per
annum obtained by dividing (i) the arithmetic average (rounded up to the nearest
1/16 of one percent) of the offered quotations, if any, to first class banks in
the interbank Eurodollar market by Deutsche Bank for U.S. dollar deposits of
amounts in same day funds comparable to the respective principal amounts of the
Eurodollar Rate Loans of Deutsche Bank for which the Eurodollar Rate is then
being determined with maturities comparable to such Interest Period as of
approximately 10:00 A.M. (New York time) on such Interest Rate Determination
Date by (ii) a percentage equal to 100% minus the stated maximum rate of all
reserve requirements (including any marginal, emergency, supplemental, special
or other reserves) applicable on such Interest Rate Determination Date to any
member bank of the Federal Reserve System in respect of "Eurocurrency
liabilities" as defined in Regulation D (or any successor category of
liabilities under Regulation D.
"EURODOLLAR RATE LOANS" means Revolving Loans bearing interest at
rates determined by reference to the Eurodollar Rate as provided in subsection
2.2A.
"EURODOLLAR RATE MARGIN" means the margin over the Eurodollar Rate
used in determining the rate of interest of Eurodollar Rate Loans pursuant to
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in Section 8.
"EXCESS FUNDED AMOUNT" has the meaning assigned to that term in
subsection 2.1D(ii).
"EXCESS PAYDOWN AMOUNT" has the meaning assigned to that term in
subsection 2.1D(iii).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"EXCLUDED TAXES" means, with respect to the Agents, any Lender, or
any other recipient of any payment to be made by or on account of any obligation
of Borrowers hereunder (i) taxes that are imposed on the overall net income
(however denominated) and franchise taxes imposed in lieu thereof (a) by the
United States, (b) by any other Government Authority under the laws of which
such Lender is organized or has its principal office or maintains its applicable
lending office, or (c) by any Government Authority solely as a result of a
present or former connection between such recipient and the jurisdiction of such
Government Authority (other than any such connection arising solely from such
recipient having executed, delivered or performed its obligations or received a
payment under, or enforced, any of the Loan Documents), (ii) any branch profits
taxes imposed by the United States or any similar tax imposed by any other
jurisdiction in which Company is located, and (iii) in the case of a Foreign
Lender (other than an assignee pursuant to a request of Company under subsection
2.9), any withholding tax that (x) is
17
imposed on amounts payable to such Foreign Lender at the time it becomes a party
hereto (or designates a new lending office), (y) is attributable to such Foreign
Lender's failure or inability (other than as a result of a Change in Law) to
comply with its obligations under subsection 2.7B(iv), except to the extent that
such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from Company with respect to such withholding tax pursuant to subsection
2.7B, or (c) is required to be deducted under applicable law from any payment
hereunder on the basis of the information provided by such Foreign Lender
pursuant to clause (d) of subsection 2.7B(iv).
"EXISTING LOAN PERCENTAGE" means with respect to any Lender's
Revolving Loans on the applicable Reallocation Date, the percentage obtained by
dividing (x) the Existing Revolving Loans of that Lender by (y) the sum of all
Existing Revolving Loans of all Lenders.
"EXISTING REVOLVING LOANS" means, with respect to any Lender, the
Revolving Loans of such Lender immediately prior to the applicable Reallocation
Date.
"FACILITIES" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by Company or any of its Subsidiaries
or any of their respective predecessors or Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Collateral Agent from three Federal funds brokers of
recognized standing selected by Collateral Agent.
"FINAL BORROWING ORDER" means an order substantially in the form of
the Interim Borrowing Order (with any modifications thereto approved by Agents)
entered by the Bankruptcy Court in the Chapter 11 Cases after a final hearing
under Bankruptcy Rule 4001(c)(2), as the same may be amended, supplemented or
otherwise modified from time to time; provided, however, that such order shall
not be deemed the Final Borrowing Order for purposes of this Agreement unless
(i) at least eleven (11) days have elapsed since the entry of such order, (ii)
such order has not been reversed or stayed by the Bankruptcy Court or any other
court of competent jurisdiction, and (iii) such order is in full force and
effect substantially in the form of the Interim Borrowing Order without
amendment, supplement or other modification other than amendments, supplements
or modifications made with the express written consent or joinder of Agents and
Requisite Lenders and approved by the Bankruptcy Court.
"FINAL ORDER" means an order, judgment or other decree of the
Bankruptcy Court or any other court or judicial body with proper jurisdiction,
as the case may be, which is in full force and effect and which has not been
reversed, stayed, modified or amended and as to which (i) any right to appeal or
seek certiorari, review or rehearing has been waived or (ii) the time to appeal
or seek certiorari, review or rehearing has expired and as to which no appeal or
petition for certiorari, review or rehearing is pending.
18
"FINISHED GOODS" means completed finished goods which are held for
sale or lease by a Person, but not including any Raw Materials, Work-in-Process,
Spare Parts and Supplies, Packaging Materials or Patterns.
"FIRST DAY ORDERS" means those orders entered by the Bankruptcy
Court as a result of motions and applications filed by Debtors with the
Bankruptcy Court on or prior to the Closing Date.
"FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral by a Loan Party or pursuant to any Collateral
Document, that such Lien is perfected and has priority over other Liens to the
extent set forth in subsection 5.15A.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Company and its Subsidiaries
consisting of the 12 consecutive calendar months ending on December 31 of each
calendar year.
"FIXED ASSETS" means Collateral consisting of all tangible real and
personal property of Loan Parties located on the Real Property Assets, together
with proceeds thereof; provided, (x) that the foregoing Collateral consisting of
personal property shall not constitute Fixed Assets unless the applicable Real
Property Assets, if owned by a Person other than a Borrower, are subject, in
each case, to a Collateral Access Agreement executed by any applicable mortgagee
or lessor, as the case may be, and segregated or otherwise separately
identifiable from goods of others, if any, stored on the premises (provided that
the failure to deliver any Collateral Access Agreement referred to in this
clause shall not render the applicable item ineligible to the extent that
Collateral Agent establishes reserves in an amount at least equal to three
months rent payable thereunder and Borrowers' costs to store or transport such
Inventory to a location owned by Borrowers or subject to a Collateral Access
Agreement); provided further, that in no event shall Fixed Assets include
Inventory and Accounts of Borrowers and their Subsidiaries, or any proceeds
thereof. The value of the Fixed Assets shall be (i) until such time as
Collateral Agent receives the results of an appraisal of the Fixed Assets from
an appraiser satisfactory to Collateral Agent, the fair market value as
certified by Borrowers, and (ii) upon and after receipt by Collateral Agent of
the results of such an appraisal, the appraised value set forth in such
appraisal.
"FLOOD HAZARD PROPERTY" means any real property located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards.
"FOREIGN LENDER" means any Lender that is organized under the laws
of a jurisdiction other than that in which Company is resident for tax purposes.
For purposes of this definition, the United States, each state thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"FOREIGN PLAN" means any employee benefit plan maintained by Company
or any of its Subsidiaries that is mandated or governed by any law, rule or
regulation of any Government Authority other than the United States, any state
thereof or any other political subdivision thereof.
19
"FOREIGN PLEDGE AGREEMENT" means each pledge agreement or similar
instrument governed by the laws of a country other than the United States,
executed on the Closing Date or from time to time thereafter in accordance with
subsection 6.8 by any Loan Party that owns Capital Stock of one or more Foreign
Subsidiaries organized in such country, in form and substance satisfactory to
Collateral Agent.
"FOREIGN SUBSIDIARY" means any Subsidiary of Company that is not a
Domestic Subsidiary.
"FUND" means any Person (other than a natural Person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business.
"FUNDING AND PAYMENT OFFICE" means (i) with respect to
Administrative Agent, (a) the office of Administrative Agent located at One
Liberty Plaza, New York, New York 10006 or (b) such other office of
Administrative Agent as may from time to time hereafter be designated as such in
a written notice delivered by Administrative Agent to Company and each Lender;
and (ii) with respect to Collateral Agent, (a) the office of Collateral Agent
located at 60 Wall Street, New York, New York 10005 or (b) such other office of
Collateral Agent as may from time to time hereafter be designated as such in a
written notice delivered by Collateral Agent to Company and each Lender.
"FUNDING DATE" means the date of funding of a Revolving Loan.
"FUNDING DEFAULT" has the meaning assigned to that term in
subsection 2.9.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set forth
in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"GOVERNING BODY" means the board of directors or other body having
the power to direct or cause the direction of the management and policies of a
Person that is a corporation, partnership, trust or limited liability company.
"GOVERNMENT AUTHORITY" means the government of the United States or
any other nation, or any state, regional or local political subdivision or
department thereof, and any other governmental or regulatory agency, authority,
body, commission, central bank, board, bureau, organ, court, instrumentality or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government, in each case
whether federal, state, local or foreign (including supra-national bodies such
as the European Union or the European Central Bank).
20
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
registration, authorization, plan, directive, consent, order or consent decree
of or from, or notice to, any Government Authority.
"HAZARDOUS MATERIALS" means (i) any chemical, material or substance
at any time defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste", "acutely
hazardous waste", "radioactive waste", "biohazardous waste", "pollutant", "toxic
pollutant", "contaminant", "restricted hazardous waste", "infectious waste",
"toxic substances", or any other term or expression intended to define, list or
classify substances by reason of properties harmful to health, safety or the
indoor or outdoor environment (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, "TCLP toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Laws); (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters and
other wastes associated with the exploration, development or production of crude
oil, natural gas or geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive materials; (vi) any asbestos-containing
materials; (vii) urea formaldehyde foam insulation; (viii) electrical equipment
which contains any oil or dielectric fluid containing polychlorinated biphenyls;
(ix) pesticides; and (x) any other chemical, material or substance, exposure to
which is prohibited, limited or regulated by any Government Authority.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or currency
values, respectively, or a Commodity Agreement designed to hedge against
fluctuations in commodity prices.
"INACTIVE SUBSIDIARIES" means Western Capital Corporation, a
Nebraska corporation, and Transnational Indemnity Company, a Vermont
corporation, so long as in each case such Subsidiary has no material assets or
operations.
"INCREMENTAL COMMITMENT" means a commitment by any Person to provide
any portion of the increase in the Revolving Commitments pursuant to subsection
2.1A(ii).
"INCREMENTAL COMMITMENT EFFECTIVE DATE" means the earliest time as
of which all conditions set forth in subsection 4.2 shall have been satisfied or
waived in accordance with the terms hereof.
"INCREMENTAL LENDER" means any Lender providing an Incremental
Commitment pursuant to subsection 2.1A(ii).
21
"INDEBTEDNESS", as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to Capital
Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, (v) Synthetic Lease Obligations, and (vi) all indebtedness
secured by any Lien on any property or asset owned or held by that Person
regardless of whether the indebtedness secured thereby shall have been assumed
by that Person or is nonrecourse to the credit of that Person. Obligations under
Interest Rate Agreements and Currency Agreements constitute (1) in the case of
Hedge Agreements, Contingent Obligations, and (2) in all other cases,
Investments, and in neither case constitute Indebtedness.
"INDEMNIFIED LIABILITIES" has the meaning assigned to that term in
subsection 10.3.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INDEMNITEE" has the meaning assigned to that term in subsection
10.3.
"INTELLECTUAL PROPERTY" means all patents, trademarks, tradenames,
copyrights, technology, software, know-how and processes used in or necessary
for the conduct of the business of Company and its Subsidiaries.
"INTERCOMPANY NOTES" means promissory notes in a form satisfactory
to Collateral Agent evidencing Indebtedness of Borrowers or their Subsidiaries
that (a) to the extent the Indebtedness evidenced thereby is owed to any
Borrower or any Subsidiary Guarantor, is pledged pursuant to the Collateral
Documents, (b) represents senior Indebtedness of such Subsidiary (except to the
extent that requiring such Indebtedness to be senior would breach a contractual
obligation binding on such Subsidiary), except that any such Indebtedness owed
by any Loan Party to any Subsidiary which is not a Borrower shall be
subordinated in right of payment to the payment in full of the Obligations
pursuant to the terms of the applicable notes, and (c) provide that any payment
by any Subsidiary Guarantor under any guaranty of the Obligations shall result
in a pro tanto reduction of the aggregate amount of the intercompany
Indebtedness owed by such Subsidiary Guarantor to Borrowers or to any of its
Subsidiaries for whose benefit such payment is made.
"INTEREST PAYMENT DATE" means (i) with respect to any Base Rate
Loan, the Business Day following the last day of each month, commencing on the
first such date to occur after the Closing Date, and (ii) with respect to any
Eurodollar Rate Loan, the Business Day following the last day of each Interest
Period applicable to such Revolving Loan; provided that in the case of each
Interest Period of longer than one month, "Interest Payment Date" shall also
include each date that is one month, or a multiple thereof, after the
commencement of such Interest Period.
22
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement to which Company or any of its Subsidiaries is a party.
"INTEREST RATE DETERMINATION DATE", with respect to any Interest
Period, means the second Business Day prior to the first day of such Interest
Period.
"INTERIM BORROWING ORDER" means the order of the Bankruptcy Court
entered in the Chapter 11 Cases after the interim hearing under Bankruptcy Rule
4001(c)(2), annexed hereto as Exhibit III, as the same may be amended,
supplemented or otherwise modified from time to time with the express written
consent or joinder of Agents and Requisite Lenders and approved by the
Bankruptcy Court.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"INVENTORY" shall mean any "inventory," as such term is defined in
the UCC, now or hereafter owned or acquired by Borrowers, wherever located, and,
in any event, including all inventory, merchandise, goods and other personal
property which are held by or on behalf of Borrowers for sale or lease or are
furnished or are to be furnished under a contract of service or which constitute
raw materials, work in process, or materials used or consumed or to be used or
consumed in Borrowers' business, or in the processing, packaging, advertising,
promotion, delivery or shipping of the same, and all finished goods and all
proceeds and products thereof, including Raw Materials, Work-in-Process,
Finished Goods, Spare Parts and Supplies, Packaging Materials and Patterns.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of
Company), (ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Company from any Person other than
Company or any of its Subsidiaries, of any equity Securities of such Subsidiary,
(iii) any direct or indirect loan, advance (other than retainers in the Chapter
11 Cases and advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary course of
business) or capital contribution by Company or any of its Subsidiaries to any
other Person, including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business, or (iv) Interest Rate Agreements or
Currency Agreements not constituting Hedge Agreements. The amount of any
Investment shall be the original cost of such Investment plus the cost of all
additions thereto, without any adjustments for increases or decreases in value,
or write-ups, write-downs or write-offs with respect to such Investment (other
than adjustments for the repayment of, or the refund of capital with respect to,
the original principal amount of any such Investment).
"IP COLLATERAL" means, collectively, the Intellectual Property that
constitutes Collateral under the Security Agreement.
23
"IP FILING OFFICE" means the United States Patent and Trademark
Office, the United States Copyright Office or any successor or substitute office
in which filings are, in the opinion of Collateral Agent, desirable in order to
evidence the interest of Collateral Agent and Lenders in, any IP Collateral.
"ISSUING LENDER" means Scotia Capital or its successor issuers of
Letters of Credit, or any other Lender that agrees at the request of Borrowers
to become an Issuing Lender pursuant to subsection 3.1B(ii), in each case in its
capacity as issuer of such Revolving Letter of Credit.
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form.
"LEAD LENDER" means each of Deutsche Bank and Scotia Capital, in
each case so long as it remains a Lender or an Agent under this Agreement.
"LEASEHOLD PROPERTY" means any leasehold interest of any Loan Party
(other than a Foreign Subsidiary) as lessee under any lease of real property.
"LENDER" and "LENDERS" means the Persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns pursuant to subsection 10.1.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"LOAN DOCUMENTS" means this Agreement, the Borrowing Orders, the
Notes, the Letters of Credit (and any applications for, or reimbursement
agreements or other documents or certificates executed by any Borrower in favor
of Issuing Lender relating to, the Letters of Credit), the Subsidiary Guaranty,
the Borrowing Subsidiary Agreements and the Collateral Documents.
"LOAN PARTY" means each of Company and any of Company's Subsidiaries
from time to time executing a Loan Document, and "LOAN PARTIES" means all such
Persons, collectively.
"LOAN/CASH USAGE AMOUNT" has the meaning assigned to that term in
subsection 7.6A.
"MAJOR CUSTOMER" means, at any time of determination, those
customers of Borrowers who, collectively, account for at least 75% of Borrowers'
gross sales, for the most recently-ended twelve-month period.
"MARGIN STOCK" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from time
to time.
24
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon
the business, operations, liabilities (whether contractual, environmental or
otherwise), properties, assets, condition (financial or otherwise) or prospects
of Company and its Subsidiaries taken as a whole or (ii) the impairment of the
ability of any Loan Party to perform, or of Administrative Agent or Collateral
Agent or Lenders to enforce, the Obligations.
"MATERIAL CONTRACT" means any contract or other arrangement to which
Company or any of its Subsidiaries is a party (other than the Loan Documents)
for which breach, nonperformance, cancellation or failure to renew could have a
Material Adverse Effect.
"MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property reasonably
determined by Collateral Agent to be of material value as Collateral or of
material importance to the operations of Company or any of its Subsidiaries.
"MATURITY DATE" means the earliest of (i) the Stated Maturity Date,
(ii) the effective date of a plan of reorganization in the Chapter 11 Cases,
(iii) the date of distributions to any class of creditors, equity holders or
other claimants under any plan of reorganization in the Chapter 11 Cases, (iv)
the date of termination in whole of the Revolving Commitments pursuant to
Section 8, (v) the date that is thirty (30) days after the date the Interim
Borrowing Order is entered by the Bankruptcy Court if the Final Borrowing Order
has not been entered by the Bankruptcy Court by such date, (vi) the date of
termination of exclusivity as to the proposal of any reorganization plan by any
Debtor under any of the Chapter 11 Cases without the prior written approval of
Requisite Lenders, (vii) the date of filing with the Bankruptcy Court of any
plan of reorganization or modification to any previously filed plan of
reorganization, in any case which has not been approved in writing by Requisite
Lenders prior to such filing, and (viii) the date of entry of an order, which
has not been withdrawn, dismissed or reversed, authorizing any Loan Party in any
of the Chapter 11 Cases to obtain additional financing under Section 364(c) or
(d) of the Bankruptcy Code (other than a financing to be used in whole or in
part to repay in full the Obligations and terminate the Commitments), or
authorizing any Person to recover from any portions of the Collateral any costs
or expenses of preserving or disposing of such Collateral under Section 506(c)
of the Bankruptcy Code (so long as Lenders are providing financing pursuant to
this Agreement as of such time), or (except as provided in the Interim Borrowing
Order or the Final Borrowing Order) authorizing the use of 363(c) of the
Bankruptcy Code (so long as Lenders are providing financing pursuant to this
Agreement as of such time).
"MORTGAGE" means (i) a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) executed and delivered by
any Loan Party, in such form as may be approved by Collateral Agent in its sole
discretion, or (ii) at Collateral Agent's option, in the case of any real
property or Material Leasehold Property that is the subject of subsection 6.9,
an amendment to an existing Mortgage, in form satisfactory to Collateral Agent,
in either case as such security instrument or amendment may be amended,
restated, supplemented or otherwise modified from time to time. "MORTGAGES"
means all such instruments collectively, whether executed as of or subsequent to
the Closing Date.
"MORTGAGED PROPERTIES" has the meaning assigned to such term in
subsection 4.2H.
25
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan that is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NET ASSET SALE PROCEEDS", with respect to any Asset Sale, means
Cash payments (including any Cash received by way of deferred payment pursuant
to, or by monetization of, a note receivable or otherwise, but only as and when
so received) received from such Asset Sale, net of any bona fide direct costs
incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable on or prior to the Commitment
Termination Date as a result of any gain recognized in connection with such
Asset Sale and (ii) payment of the outstanding principal amount of, premium or
penalty, if any, and interest on any Indebtedness (other than the Revolving
Loans) that is (a) secured by a Lien on the stock or assets in question and that
is required to be repaid under the terms thereof as a result of such Asset Sale
and (b) actually paid at the time of receipt of such cash payment to a Person
that is not an Affiliate of any Loan Party or of any Affiliate of a Loan Party.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments or
proceeds received by Company or any of its Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Company or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs incurred by Company or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
Company or such Subsidiary in respect thereof.
"NET ORDERLY LIQUIDATION VALUE" means (a) the "net orderly
liquidation value" determined by a valuation company acceptable to Collateral
Agent after performance of an Inventory valuation (to be done at Collateral
Agent's request and Borrowers' expense), less the amount estimated by such
valuation company for marshalling, reconditioning, carrying, and sales expenses
designed to maximize the resale value of such Inventory and assuming that the
time required to dispose of such Inventory is customary with respect to such
Inventory; or (b) if no such Inventory valuation has been requested by
Collateral Agent, the value customarily attributed to Inventory in the appraisal
industry for Inventory of similar quantity and quality, and similarly dispersed
(under similar and relevant circumstances under standard asset-based lending
procedures), at the time of the valuation, less the amount customarily estimated
in the appraisal industry at the time of any determination for marshalling,
reconditioning, carrying, and sales expenses designed to maximize the resale
value of such Inventory and assuming that the time required to dispose of such
Inventory is customary with respect to such Inventory.
"NET SECURITIES PROCEEDS" means the cash proceeds (net of
underwriting discounts and commissions and other reasonable costs and expenses
associated therewith, including reasonable legal fees and expenses) from the
issuance of Securities of or incurrence of Indebtedness by Company or any of its
Subsidiaries.
"NON-LOAN PARTY SUBSIDIARY" means any Subsidiary of Company that is
not a Loan Party; provided, that for purposes of subsection 8.13, the Inactive
Subsidiaries shall not be considered Non-Loan Party Subsidiaries.
26
"NOTES" means any promissory notes of Borrowers issued pursuant to
subsection 2.1F to evidence the Revolving Loans of any Lenders, substantially in
the form of Exhibit VI annexed hereto, as they may be amended, restated,
supplemented or otherwise modified from time to time.
"NOTICE OF BORROWING" means a notice substantially in the form of
Exhibit I(a) annexed hereto.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in
the form of Exhibit II annexed hereto.
"NOTICE OF WITHDRAWAL" means a notice substantially in the form of
Exhibit I(b) annexed hereto.
"OBLIGATIONS" means all obligations of every nature of each Loan
Party under the Loan Documents, including, without limitation, any liability of
such Loan Party on any claim, whether or not the right to payment in respect of
such claim is reduced to judgment, liquidated, unliquidated, fixed or
contingent, matured, disputed, undisputed, legal, equitable, secured or
unsecured, and whether or not such claim is discharged, stayed or otherwise
affected by any bankruptcy, insolvency, reorganization or other similar
proceeding. Without limiting the generality of the foregoing, the Obligations of
the Loan Parties under the Loan Documents include (a) the obligation to pay
principal, interest, charges, expenses, fees, attorneys' fees and disbursements,
indemnities and other amounts payable by any Loan Party under any Loan Document
and (b) the obligation to reimburse any amount in respect of any of the
foregoing that any Agent or any Lender, in its sole discretion, may elect to pay
or advance on behalf of such Loan Party.
"OFFICER" means the president, chief executive officer, a vice
president, chief financial officer, treasurer, general partner (if an
individual), managing member (if an individual) or other individual appointed by
the Governing Body or the Organizational Documents of a corporation,
partnership, trust or limited liability company to serve in a similar capacity
as the foregoing.
"OFFICER'S CERTIFICATE", as applied to any Person that is a
corporation, partnership, trust or limited liability company, means a
certificate executed on behalf of such Person by one or more Officers of such
Person or one or more Officers of a general partner or a managing member if such
general partner or managing member is a corporation, partnership, trust or
limited liability company.
"OPERATING LEASE", as applied to any Person, means any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease other
than any such lease under which that Person is the lessor.
"ORGANIZATIONAL DOCUMENTS" means the documents (including Bylaws, if
applicable) pursuant to which a Person that is a corporation, partnership, trust
or limited liability company is organized.
27
"OTHER TAXES" means all present or future stamp or documentary taxes
or any other excise or property taxes, charges, fees, expenses or similar levies
arising from any payment made hereunder or under any other Loan Document or from
the execution, delivery or enforcement of, or otherwise with respect to, this
Agreement or any other Loan Document.
"PACKAGING MATERIALS" means goods consisting of unused containers,
cardboard boxes and related supplies used for the packaging of Finished Goods.
"PARTICIPANT" means a purchaser of a participation in the rights and
obligations of a Lender under this Agreement pursuant to subsection 10.1C.
"PATTERNS" means patterns, tooling, molds, casts or dies that are
used in the production or manufacture of Finished Goods by a Person in the
ordinary course of business prior to use or consumption, and shall not include
any Raw Materials, Work-in-Process, Finished Goods, Spare Parts and Supplies or
Packaging Materials.
"PAYEE" has the meaning assigned to that term in subsection
2.1D(iv).
"PAYOR" has the meaning assigned to that term in subsection
2.1D(iv).
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, that is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA, and, for purposes of subsection 8.9, any Foreign Plan.
"PERMITTED DISCRETION" means Collateral Agent's good faith judgment
based upon any factor which it believes in good faith: (i) could be reasonably
likely to adversely affect the value of any Collateral, the enforceability or
priority of Collateral Agent's Liens thereon or the amount which Collateral
Agent and Lenders would be likely to receive (after giving consideration to
delays in payment and costs of enforcement) in the liquidation of such
Collateral; (ii) suggests that any collateral report or financial information
delivered to Agents by any Person on behalf of any Borrower is incomplete,
inaccurate or misleading in any material respect; or (iii) creates or reasonably
could be expected to create a Potential Event of Default or Event of Default. In
exercising such judgment, Collateral Agent may consider such factors already
included in or tested by the definition of Eligible Accounts or Eligible
Inventory, as well as any of the following: (a) the financial and business
climate of any Borrower's industry and general macroeconomic conditions, (b)
changes in collection history and dilution with respect to Borrowers' Accounts,
(c) changes in demand for, and pricing of, Borrowers' Inventory, (d) changes in
any concentration of risk with respect to such Accounts or Inventory, and (e)
any other factors that change the credit risk of lending to Borrowers on the
security of such Accounts or Inventory. The burden of establishing lack of good
faith shall be on Borrowers.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA, any such Lien imposed by a Government
Authority in connection with any Foreign Plan,
28
any such Lien relating to or imposed in connection with any Environmental Claim,
and any such Lien expressly prohibited by any applicable terms of any of the
Collateral Documents):
(ii) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by subsection
6.3;
(iii) statutory Liens of landlords, Liens of collecting banks under
the UCC on items in the course of collection, statutory Liens and rights
of set-off of banks, statutory Liens of carriers, warehousemen, mechanics,
repairmen, workmen and materialmen, and other Liens imposed by law, in
each case incurred in the ordinary course of business (a) for amounts not
yet overdue or (b) for amounts that are overdue and that (in the case of
any such amounts overdue for a period in excess of 5 days) are being
contested in good faith by appropriate proceedings, so long as (1) such
reserves or other appropriate provisions, if any, as shall be required by
GAAP shall have been made for any such contested amounts, and (2) in the
case of a Lien with respect to any portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the
Collateral on account of such Lien;
(iv) deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, trade contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations for the payment of
borrowed money), so long as no foreclosure, sale or similar proceedings
have been commenced with respect to any portion of the Collateral on
account thereof;
(v) licenses (with respect to Intellectual Property and other
property), leases or subleases granted to third parties in accordance with
any applicable terms of the Collateral Documents and not interfering in
any material respect with the ordinary conduct of the business of Company
or any of its Subsidiaries or resulting in a material diminution in the
value of any Collateral as security for the Obligations;
(vi) easements, rights-of-way, restrictions, encroachments, and
other minor defects or irregularities in title, in each case which do not
and will not interfere in any material respect with the ordinary conduct
of the business of Company or any of its Subsidiaries or result in a
material diminution in the value of any Collateral as security for the
Obligations;
(vii) any (a) interest or title of a lessor or sublessor under any
lease not prohibited by this Agreement, (b) Lien or restriction that the
interest or title of such lessor or sublessor may be subject to, or (c)
subordination of the interest of the lessee or sublessee under such lease
to any Lien or restriction referred to in the preceding clause (b), so
long as the holder of such Lien or restriction agrees to recognize the
rights of such lessee or sublessee under such lease;
(viii) Liens arising from filing UCC financing statements relating
solely to leases not prohibited by this Agreement;
29
(ix) Liens in favor of customs and revenue authorities arising as
a matter of law to secure payment of customs duties in connection with the
importation of goods;
(x) any zoning or similar law or right reserved to or vested in
any Government Authority to control or regulate the use of any real
property;
(xi) Liens of the United States or any agency or instrumentality
thereof on unliquidated advance and progress payments made by such Person
under any contract providing for the sale of goods to such Person,
together with any related work-in-process;
(xii) Liens of sellers of goods to Company and any of its
Subsidiaries arising under Article 2 of the UCC or similar provisions of
applicable law in the ordinary course of business, covering only the goods
sold and securing only the unpaid purchase price for such goods and
related expenses;
(xiii) Liens granted to Collateral Agent for the benefit of Lenders
(a) pursuant to the Collateral Documents or (b) authorized by the Interim
Borrowing Order or the Final Borrowing Order;
(xiv) Liens granted in favor of Prepetition Senior Lenders pursuant
to the Prepetition Senior Credit Facilities and the collateral documents
entered into in connection therewith and Liens granted pursuant to any
order of the Bankruptcy Court granting Prepetition Senior Lenders
replacement Liens; and
(xv) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating, reciprocal
easement or similar agreements entered into in the ordinary course of
business of Company and its Subsidiaries.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Government Authorities.
"PETITION DATE" has the meaning assigned to that term in the
recitals to this Agreement.
"PLEDGED COLLATERAL" means the "Pledged Collateral" as defined in
the Security Agreement.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"PREPETITION INDEBTEDNESS" means Indebtedness or other liability of
any Loan Party or claim (within the meaning of Bankruptcy Code section 101(5))
against any Loan Party outstanding on the Petition Date, including Prepetition
Senior Lenders' Claims.
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"PREPETITION L/C CASH COLLATERAL" means the cash collateral securing
Company's obligations under the Prepetition L/C Facility as of the Petition
Date.
"PREPETITION L/C FACILITY" (i) the Letter of Credit Facility
Agreement as of January 8, 2004 by and among the Company, the financial
institutions listed on the signature pages thereto, and Scotia Capital, as
administrative agent, (ii) all agreements, documents and instruments pursuant to
which any interest in collateral is granted or purported to be granted, created,
evidenced or perfected pursuant to the foregoing, including without limitation,
all deeds of trust, mortgages, security agreements, pledge agreements,
assignments, licenses, landlord consents and releases, financing statements,
fixture filings, registrations or similar documents, and (iii) all ancillary
agreements as to which any holder of any of the obligations evidenced by any of
the foregoing is a party or a beneficiary and all other agreements, instruments,
documents and certificates including promissory notes, consents, assignments,
contracts, and notices delivered in connection with any of the foregoing or the
transactions contemplated thereby, in each case as any of the foregoing may be
in effect as of the Closing Date and as the same may be amended, supplemented or
otherwise modified from time to time to the extent permitted hereunder.
"PREPETITION SCOTIA L/C" means that certain letter of credit issued
and outstanding on the Closing Date in the face amount of $35,690,411, issued by
Scotia Capital under the Prepetition L/C Facility; provided, that with respect
to periods after the Subsequent Funding Date, "Prepetition Scotia L/C" shall
mean the Revolving Letter of Credit deemed issued pursuant to Section 3 upon
conversion of such letter of credit to a Revolving Letter of Credit.
"PREPETITION SENIOR AGENTS" means, collectively, (i) the
"Administrative Agent" under (and as defined in) the Prepetition Senior Loan
Facility, in its capacity as administrative agent for the Prepetition Senior
Lenders, and (ii) the "Administrative Agent" under (and as defined in) the
Prepetition L/C Facility, in its capacity as administrative agent for the
lenders under Prepetition L/C Facility.
"PREPETITION SENIOR COLLATERAL" means all "Collateral" as defined in
the Prepetition Senior Credit Facilities.
"PREPETITION SENIOR CREDIT FACILITIES" means, collectively, the
Prepetition Senior Loan Facility and the Prepetition L/C Facility.
"PREPETITION SENIOR CREDIT PARTIES" means Company and any of its
Subsidiaries party on the date hereof to the Prepetition Senior Credit
Facilities.
"PREPETITION SENIOR LENDERS" means the parties identified as lenders
under the Prepetition Senior Credit Facilities in their capacities as lenders
under the Prepetition Senior Credit Facilities as of the Petition Date, together
with their successors and permitted assigns.
"PREPETITION SENIOR LENDERS' CLAIMS" means the claims of Prepetition
Senior Lenders against the Company and its Subsidiaries for amounts owing under
the Prepetition Senior Credit Facilities as of the Petition Date (including
Contingent Obligations arising as the result of outstanding letters of credit)
plus interest, fees and charges accruing after such date.
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"PREPETITION SENIOR LIENS" means valid, perfected and non-voidable
Liens and security interests in effect as of the Petition Date, granted for the
benefit of the Prepetition Senior Lenders and, as and if required, for the
benefit of certain other Persons pursuant to the Prepetition Senior Credit
Facilities.
"PREPETITION SENIOR LOAN FACILITY" means (i) that certain First
Amended and Restated Credit Agreement as of January 8, 2004 by and among the
Company, the financial institutions listed on the signature pages thereto, and
Scotia Capital, as administrative agent, (ii) all agreements, documents and
instruments pursuant to which any interest in collateral is granted or purported
to be granted, created, evidenced or perfected pursuant to the foregoing,
including without limitation, all deeds of trust, mortgages, security
agreements, pledge agreements, assignments, licenses, landlord consents and
releases, financing statements, fixture filings, registrations or similar
documents, (iii) all ancillary agreements as to which any holder of any of the
obligations evidenced by any of the foregoing is a party and all other
agreements, instruments, documents and certificates including promissory notes,
consents, assignments, contracts, and notices delivered in connection with any
of the foregoing or the transactions contemplated thereby, in each case as any
of the foregoing may be in effect as of the Closing Date and as the same may be
amended, supplemented or otherwise modified from time to time to the extent
permitted hereunder and (iv) excluding the Prepetition L/C Facility.
"PREPETITION SENIOR OBLIGATIONS" means all "Obligations" as defined
in the Prepetition Senior Credit Facilities.
"PRIME RATE" means the rate that Deutsche Bank announces from time
to time as its prime lending rate, as in effect from time to time. The Prime
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. Deutsche Bank or any other Lender may
make commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
"PRO RATA SHARE" means, with respect to any Lender, the percentage
obtained by dividing (x) the Revolving Loan Exposure of that Lender by (y) the
aggregate Revolving Loan Exposure of all Lenders, in any such case as the
applicable percentage may be adjusted pursuant to subsection 2.1F or by
assignments permitted pursuant to subsection 10.1. The initial Pro Rata Share of
each Lender for purposes of clause (i) of the preceding sentence is set forth
opposite the name of that Lender in Schedule 2.1A(i) annexed hereto.
"PROCEEDINGS" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration.
"PROPOSED BORROWING BASE ADJUSTMENT" has the meaning assigned to
that term in the definition of Borrowing Base.
"PURCHASING LENDER" has the meaning assigned to that term in
subsection 2.1A(ii).
"RAW MATERIALS" means all raw materials or supplies to be used or
consumed in the production or manufacture of the Finished Goods by a Person in
the ordinary course of
32
business prior to such use or consumption, but not including any Spare Parts and
Supplies, Packaging Materials or Patterns.
"REAL PROPERTY ASSET" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"REALLOCATION DATE" has the meaning assigned to that term in
subsection 2.1A(ii).
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been recorded in
all places necessary or desirable, in Collateral Agent's reasonable judgment, to
give constructive notice of such Leasehold Property to third-party purchasers
and encumbrancers of the affected real property. For purposes of this
definition, the term "RECORD DOCUMENT" means, with respect to any Leasehold
Property, (a) the lease evidencing such Leasehold Property or a memorandum
thereof, executed and acknowledged by the owner of the affected real property,
as lessor, or (b) if such Leasehold Property was acquired or subleased from the
holder of a Recorded Leasehold Interest, the applicable assignment or sublease
document, executed and acknowledged by such holder, in each case in form
sufficient to give such constructive notice upon recordation and otherwise in
form and substance satisfactory to Collateral Agent.
"REGISTER" has the meaning assigned to that term in subsection 2.1E.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil, surface water or
groundwater.
"REQUEST FOR ISSUANCE" means a request substantially in the form of
Exhibit IV annexed hereto.
"REQUISITE LENDERS" means Lenders having or holding more than 50% of
the aggregate Revolving Loan Exposure of all Lenders; provided, that at any time
that a Lead Lender and its Affiliates have or hold 50% or more of the aggregate
Revolving Loan Exposure of all Lenders, Requisite Lenders shall mean Lenders
consisting of (i) at least one Lender other than such Lead Lender and its
Affiliates and (ii) Lenders (including the Lender(s) described in clause (i))
having or holding more than 50% of the aggregate Revolving Loan Exposure of all
Lenders.
"RESTRICTED CASH ACCOUNT" means (i) until the Subsequent Funding
Date, a restricted cash account (or accounts) to be established under the
control of Collateral Agent into
33
which all Cash in the Cash Management System shall be transferred on a daily
basis, and (ii) with respect to all periods on and after the Subsequent Funding
Date, a restricted cash account (or accounts) under the control of
Administrative Agent into which all Cash in the Cash Management System shall be
transferred on a daily basis. On or immediately after the Subsequent Funding
Date, Collateral Agent shall transfer all amounts on deposit in the account(s)
described in clause (i) to the account(s) identified to Collateral Agent by
Administrative Agent as the account(s) described in clause (ii).
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company now or hereafter outstanding, and (iv)
any payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Subordinated
Indebtedness.
"REVOLVING AGGREGATE AMOUNTS DUE" has the meaning assigned to that
term in subsection 10.5.
"REVOLVING COMMITMENT" means the commitment of a Lender to make
Revolving Loans to Borrowers pursuant to subsection 2.1A(i), and "REVOLVING
COMMITMENTS" means such commitments of all Lenders in the aggregate.
Notwithstanding anything to the contrary herein, the Incremental Commitment of
any Lender shall not be a Revolving Commitment of such Lender until such
Incremental Commitment is converted to a Revolving Commitment pursuant to
subsection 2.1A(ii).
"REVOLVING LETTER OF CREDIT" or "REVOLVING LETTERS OF CREDIT" means
letters of credit issued or to be issued by Issuing Lenders for the account of
Borrowers pursuant to subsection 3.1A.
"REVOLVING LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all Revolving Letters of
Credit then outstanding plus (ii) the aggregate amount of all drawings under
Revolving Letters of Credit honored by Issuing Lenders and not theretofore
reimbursed out of the proceeds of Revolving Loans pursuant to subsection 3.3B or
otherwise reimbursed by Borrowers.
"REVOLVING LOAN" or "REVOLVING LOANS" means one or more of the loans
made by Lenders to Borrowers pursuant to subsection 2.1A(i) or 3.3B.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as of
any date of determination (i) prior to the termination of the Commitments, such
Lender's Revolving Commitment, and (ii) after the termination of the
Commitments, the sum of (a) the aggregate
34
outstanding principal amount of the Revolving Loans of such Lender plus (b) in
the event that Lender is an Issuing Lender of Revolving Letters of Credit, the
aggregate Revolving Letter of Credit Usage in respect of all Revolving Letters
of Credit issued by such Lender (in each case net of any participations
purchased by other Lenders in such Revolving Letters of Credit or in any
unreimbursed drawings thereunder) plus (c) the aggregate amount of all
participations purchased by such Lender in any other outstanding Revolving
Letters of Credit or any unreimbursed drawings under any such other Revolving
Letters of Credit.
"SCOTIA CAPITAL" has the meaning assigned to that term in the
introduction to this Agreement.
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated, certificated or uncertificated, or otherwise, or in general any
instruments commonly known as "securities" or any certificates of interest,
shares or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"SECURITY AGREEMENT" means the Security Agreement executed and
delivered on the Closing Date, substantially in the form of Exhibit X annexed
hereto, as such Security Agreement may thereafter be amended, restated
supplemented or otherwise modified from time to time.
"SELLING LENDER" has the meaning assigned to that term in subsection
2.1A(ii).
"SETTLEMENT DATE" has the meaning assigned to that term in
subsection 2.1D(i).
"SETTLEMENT NOTICE" has the meaning assigned to that term in
subsection 2.1D(i).
"SPARE PARTS AND SUPPLIES" means goods consisting of spare and
replacement parts and supplies used in or to facilitate the production or
manufacture of Finished Goods by a Person in the ordinary course of business,
but not including Raw Materials, Work-in-Process, Packaging Materials or
Patterns.
"SPECIFIED ACCOUNT DEBTOR" means any of the Persons listed on
Schedule 1.1C annexed hereto.
"STANDBY LETTER OF CREDIT" means any letter of credit or similar
instrument other than a Commercial Letter of Credit.
"STATED MATURITY DATE" means the earlier of (i) October 21, 2005 and
(ii) the date that is ninety (90) days after the Business Day on which any Lead
Lender delivers a Termination Notice to Borrowers.
35
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of Borrowers
incurred from time to time and subordinated in right of payment to the
Obligations.
"SUBSEQUENT FUNDING DATE" means the earliest time (so long as such
time is prior to 5:00 p.m. (New York City time) on the date that is 30 days
after the date of entry by the Bankruptcy Court of the Interim Borrowing Order)
that the following conditions shall have been satisfied: (i) the Final Borrowing
Order shall have been entered by the Bankruptcy Court, shall be in full force
and effect and shall be unstayed by the Bankruptcy Court or any other court of
competent jurisdiction, and Scotia Capital shall be satisfied that the Final
Borrowing Order shall be binding on all material creditors of Borrowers and
shall be effective to provide the stay of actions, priorities, Liens and other
protections for Borrowers, Agents and the Lenders purported to be granted
thereby, and (ii) Scotia Capital shall have received from Borrowers (a)
Borrowers' 13-Week Cash Forecast, in form and substance satisfactory to Scotia
Capital in its sole discretion, and (b) a certificate from the chief financial
officer of Company certifying that the projections described in clause (a) are
based upon good faith estimates and assumptions believed by Company to be
reasonable at the time made.
"SUBSIDIARY", with respect to any Person, means any corporation,
partnership, trust, limited liability company, association, Joint Venture or
other business entity of which more than 50% of the total voting power of shares
of stock or other ownership interests entitled (without regard to the occurrence
of any contingency) to vote in the election of the members of the Governing Body
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof.
"SUBSIDIARY GUARANTOR" means any Domestic Subsidiary of Company that
executes and delivers a counterpart of the Subsidiary Guaranty from time to time
after the Closing Date pursuant to subsection 6.8.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty to be executed
and delivered by additional Domestic Subsidiaries of Company from time to time
after the Closing Date in accordance with subsection 6.8, substantially in the
form of Exhibit VII annexed hereto, as such Subsidiary Guaranty may thereafter
be amended, restated, supplemented or otherwise modified from time to time.
"SUPPLEMENTAL COLLATERAL AGENT" has the meaning assigned to that
term in subsection 9.1B.
"SYNTHETIC LEASE OBLIGATION" means the monetary obligation of a
Person under (i) a so-called synthetic, off-balance sheet or tax retention
lease, or (ii) an agreement for the use or possession of property creating
obligations that do not appear on the balance sheet of such Person but which,
upon the insolvency or bankruptcy of such Person, would be characterized as the
indebtedness of such Person (without regard to accounting treatment).
"TAX" or "TAXES" means any present or future tax, levy, impost,
duty, fee, assessment, deduction, withholding or other charge of any nature and
whatever called, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed, including interest, penalties, additions to tax
and any similar liabilities with respect thereto.
36
"TERMINATION NOTICE" means a written notice executed by either Lead
Lender stating the following: (i) that one or more of the conditions set forth
in subsection 4.2 have not been satisfied as of the date that is 30 days
following the date of entry by the Bankruptcy Court of the Interim Borrowing
Order, and (ii) that the Obligations will become due and payable in full on the
date that is 90 days after the delivery of such notice. Notwithstanding the
foregoing, no such "Termination Notice" shall be considered delivered for any
purpose hereunder if such notice is rescinded in writing by the Person that
executed such notice, prior to the end of the 89th day following the delivery of
such notice.
"13-WEEK CASH FORECAST" means, with respect to the applicable period
covered thereby, the most recently delivered of the following: (i) the
consolidated cash flow projections contained in the Budget for the 10-week
period commencing with the week after the Closing Date, setting forth on a
line-item basis weekly anticipated cash receipts and disbursements; (ii) the
consolidated cash flow projections delivered pursuant to subsection 6.1(v)(b);
and (iii) the 13-week consolidated cash flow projections contained in a Budget
approved pursuant to subsection 6.1(xvi).
"TITLE COMPANY" means one or more title insurance companies
reasonably satisfactory to Collateral Agent.
"TOTAL UTILIZATION OF REVOLVING COMMITMENTS" means, as at any date
of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans plus (ii) the Revolving Letter of Credit Usage.
"TRANSACTION COSTS" means the fees, costs and expenses payable by
Borrowers on or before the Closing Date in connection with the transactions
contemplated by the Loan Documents.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"VALUE" means, as determined by Collateral Agent in good faith, (i)
with respect to Eligible Inventory, the lower of (a) cost computed on a
first-in, first-out basis in accordance with GAAP and (b) market value, and (ii)
with respect to Fixed Assets, $10,000,000; provided, that Collateral Agent shall
(x) after receiving the results of appraisals of Fixed Assets done after the
Closing Date at Collateral Agent's request and Borrowers' expense, apply to such
appraised values of various categories of Fixed Assets those advance rates
determined by Collateral Agent to be customary for financings of this type for
borrowers similarly situated to Borrowers, and (y) increase the value of Fixed
Assets (up to a maximum of $15,000,000) or decrease the value of Fixed Assets,
in either case to reflect the aggregate amount determined pursuant to clause
(x).
"WITHDRAWAL DATE" means the date of a withdrawal from the Restricted
Cash Account.
"WORK-IN-PROCESS" means goods to be sold or leased by a Person in
the normal course of business which are at the time of determination in the
process of being manufactured by such Person, but not including any Raw
Materials, Spare Parts and Supplies, Packaging Materials or Patterns.
37
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company or any other Borrower to Lenders pursuant to
clauses (ii) and (iii) of subsection 6.1 shall be prepared in accordance with
GAAP as in effect at the time of such preparation. Calculations in connection
with the definitions, covenants and other provisions of this Agreement shall
utilize GAAP as in effect on the date of determination, applied in a manner
consistent with that used in preparing the financial statements referred to in
subsection 5.3. If at any time any change in GAAP would affect the computation
of any financial ratio or requirement set forth in any Loan Document, and
Company, any Agent or Requisite Lenders shall so request, Agents, Lenders and
Company shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject to
the approval of Requisite Lenders), provided that, until so amended, such ratio
or requirement shall continue to be computed in accordance with GAAP prior to
such change therein.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
A. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
B. References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided. Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
C. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
D. Unless otherwise expressly provided herein, references to
Organizational Documents, agreements (including the Loan Documents) and other
contractual instruments shall be deemed to include all subsequent amendments,
restatements, extensions, supplements and other modifications thereto.
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SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF REVOLVING LOANS; THE REGISTER; OPTIONAL
NOTES.
A. COMMITMENTS.
(i) Initial Revolving Commitments. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of Borrowers herein set forth, each Lender hereby severally,
and not jointly and severally, agrees, subject to the limitations set
forth below with respect to the maximum amount of Revolving Loans
permitted to be outstanding from time to time, to lend to Borrowers from
time to time during the period from the Closing Date to but excluding the
Commitment Termination Date an aggregate amount not exceeding its Pro Rata
Share of the aggregate amount of the Revolving Commitments to be used for
the purposes identified in subsection 2.5A. The original amount of each
Lender's Revolving Commitment as of the Closing Date is set forth opposite
its name on Schedule 2.1A(i) annexed hereto and the aggregate original
amount of the Revolving Commitments as of the Closing Date is $20,000,000;
provided that (a) on the Incremental Commitment Effective Date, the
Revolving Commitments then in effect shall be increased by $40,000,000 by
adding thereto the Incremental Commitments of Incremental Lenders and (b)
the Revolving Commitments of Lenders shall be adjusted to give effect to
any assignments of the Revolving Commitments pursuant to subsection 10.1B
and shall be reduced from time to time by the amount of any reductions
thereto made pursuant to subsection 2.4. Each Lender's Revolving
Commitment shall expire on the Commitment Termination Date and all
Revolving Loans and all other amounts owed hereunder with respect to the
Revolving Loans and the Revolving Commitments shall be paid in full no
later than the Maturity Date. Amounts borrowed under this subsection
2.1A(i) may be repaid and reborrowed to but excluding the Commitment
Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, in no event shall the Total Utilization of Revolving
Commitments at any time exceed the least of (a) the aggregate Revolving
Commitments, (b) the Borrowing Base, and (c) the amount of Revolving Loans
and Revolving Letters of Credit permitted to be outstanding hereunder
pursuant to the Interim Borrowing Order or Final Borrowing Order (as
applicable), in each case as the foregoing limits are in effect at such
time.
(ii) Incremental Commitments. Each of Borrowers, Agents, Lenders
and Incremental Lenders hereby agree that (a) on the Subsequent Funding
Date, (1) each Incremental Lender's Incremental Commitment set forth on
Schedule 2.1A(ii)(a) annexed hereto shall be converted to and become an
additional Revolving Commitment for all purposes hereunder, and such
Incremental Commitment shall thereupon terminate, (2) the Revolving
Commitments in effect immediately prior to the Subsequent Funding Date
shall increase by $35,690,411, the aggregate amount of the Incremental
Commitments converted to Revolving Commitments as described in clause (1),
and (3) each Incremental Lender shall become a Lender on such date for all
purposes hereunder with respect to the Revolving Commitment into which
such Lender's Incremental Commitment is converted pursuant to clause (a),
provided that prior to the Subsequent
39
Funding Date, the Incremental Commitment of any such Incremental Lender
shall be adjusted to give effect to any assignment by such Incremental
Lender of its Incremental Commitment pursuant to subsection 10.1B, and
Schedule 2.1A(ii)(a) shall be deemed automatically modified to reflect
such assignments; and (b) on the Incremental Commitment Effective Date,
(1) each Incremental Lender's Incremental Commitment set forth on Schedule
2.1A(ii)(b) annexed hereto shall be converted to and become an additional
Revolving Commitment for all purposes hereunder, and such Incremental
Commitment shall thereupon terminate, (2) the Revolving Commitments in
effect immediately prior to the Incremental Commitment Effective Date
shall increase by $4,309,589, the aggregate amount of the Incremental
Commitments converted to Revolving Commitments as described in clause (1),
and (3) each Incremental Lender shall become a Lender on such date for all
purposes hereunder with respect to the Revolving Commitment into which
such Lender's Incremental Commitment is converted pursuant to clause (a),
provided that prior to the Incremental Commitment Effective Date, the
Incremental Commitment of any Incremental Lender shall be adjusted to give
effect to any assignment by such Incremental Lender of its Incremental
Commitment pursuant to subsection 10.1B, and Schedule 2.1A(ii)(b) shall be
deemed automatically modified to reflect such assignments. On the Business
Day immediately prior to the Subsequent Funding Date and on the Business
Day immediately prior to the Incremental Commitment Effective Date,
Administrative Agent will calculate the appropriate prospective
adjustments to the Register to reflect any reallocation of Revolving
Loans, Revolving Letters of Credit and unreimbursed drawings under
Revolving Letters of Credit in accordance with clause (a) and clause (b),
respectively, of the foregoing sentence after giving effect to the
addition of the Incremental Commitments and will prior to 4:00 P.M. (New
York City time) on such date (A) notify each such Lender of the amounts of
such reallocation and (B) notify each such Lender of the amounts,
representing the principal amount of such Revolving Loans or payments on
Revolving Letters of Credit on the Subsequent Funding Date or the
Incremental Commitment Effective Date, as applicable, which are required
to be made by such Lender or which shall be repaid to such Lender, which
such Lender will either advance or receive, respectively, as a result of
such reallocation and the assignments pursuant to the next sentence.
Notwithstanding anything to the contrary herein, on each of
the Subsequent Funding Date and the Incremental Commitment Effective Date
(each, a "REALLOCATION DATE"), each Lender that will have a greater Pro
Rata Share upon the applicable Reallocation Date than its applicable
Existing Loan Percentage (each a "PURCHASING LENDER"), without executing
an Assignment Agreement, shall be deemed to have automatically purchased
assignments, pro rata from each Lender (in proportion to the amounts to be
purchased from such Lender by all Purchasing Lenders) that will have a
smaller Pro Rata Share on the applicable Reallocation Date than its
applicable Existing Loan Percentage (each a "SELLING LENDER"), in all such
Selling Lender's rights and obligations under this Agreement and the other
Loan Documents with respect to the Revolving Loans and participations in
Revolving Letters of Credit and unreimbursed drawings (collectively,
except as set forth below, the "ASSIGNED RIGHTS AND OBLIGATIONS"), and
each Selling Lender shall be deemed to have automatically assigned and
sold such Revolving Loans and participations in Revolving Letters of
Credit and
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unreimbursed drawings in such amounts to such Purchasing Lenders, so that,
after giving effect to all such assignments, each Lender shall hold a Pro
Rata Share of each Revolving Loan and the aggregate participations in
Revolving Letters of Credit and unreimbursed drawings thereunder equal to
the percentage obtained by dividing the Revolving Commitment of such
Lender by the Revolving Commitments of all Lenders. Each such purchase
hereunder shall be at par for a purchase price equal to the principal
amount of the purchased Revolving Loans and unreimbursed drawings without
recourse, representation or warranty, except that each Selling Lender
shall be deemed to represent and warrant to each Purchasing Lender that
the Assigned Rights and obligations of such Selling Lender are not subject
to any Liens created by that Selling Lender.
Each Purchasing Lender required to make a payment pursuant to
any assignment described in the preceding paragraph shall make the net
amount of its required payment available to Administrative Agent, in same
day funds, at the Funding and Payment Office not later than 12:00 Noon
(New York City time) on the applicable Reallocation Date. Administrative
Agent shall distribute on the applicable Reallocation Date the proceeds of
such amounts to the Selling Lenders entitled to receive payments, pro rata
in proportion to the amount each Selling Lender is entitled to receive, at
the primary address set forth below such Selling Lender's name on the
signature pages hereof or at such other address as such Selling Lender may
request in writing to Administrative Agent. The purchase of a Revolving
Loan by a Lender as set forth in this subsection 2.1A(ii) shall be deemed
to be the making of a Revolving Loan to Borrowers on the date such funds
are transmitted to Administrative Agent.
B. BORROWING MECHANICS. Revolving Loans made on any Funding Date
(other than Revolving Loans made pursuant to subsection 3.3) shall be in an
aggregate minimum amount of $1,000,000 and integral multiples of $100,000 in
excess of that amount. Whenever any Borrower desires that Lenders make Revolving
Loans it shall deliver to Administrative Agent a duly executed Notice of
Borrowing, which shall include a certification by such Borrower that (i) each of
the applicable conditions to Revolving Loans set forth in Section 4 hereof has
been satisfied, and (ii) the use of the Revolving Loan is strictly in accordance
with the Budget (subject to the provisions of subsection 7.6), no later than
10:00 a.m. (New York time) at least three Business Days in advance of the
proposed Funding Date (in the case of a Eurodollar Rate Loan) or on the proposed
Funding Date (in the case of a Base Rate Loan). Revolving Loans may be continued
as or converted into Base Rate Loans and Eurodollar Rate Loans in the manner
provided in subsection 2.2D. In lieu of delivering a Notice of Borrowing,
Borrowers may give Administrative Agent telephonic notice by the required time
of any proposed borrowing under this subsection 2.1B; provided that such notice
shall be promptly confirmed in writing by delivery of a duly executed Notice of
Borrowing to Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any
liability to Borrowers in acting upon any telephonic notice referred to above
that Administrative Agent believes in good faith to have been given by an
Officer or other person authorized to borrow on behalf of Borrowers or for
otherwise acting in good faith under this subsection 2.1B or under subsection
2.2D, and upon funding of Revolving Loans by Daily Funding Lender and/or
Lenders, and upon conversion or continuation of the applicable basis for
determining the interest
41
rate with respect to any Revolving Loans pursuant to subsection 2.2D, in each
case in accordance with this Agreement, pursuant to any such telephonic notice
Borrowers shall have effected Revolving Loans or a conversion or continuation,
as the case may be, hereunder.
Borrowers shall notify Administrative Agent prior to the funding of
any Revolving Loans in the event that any of the matters to which Borrowers is
required to certify in the applicable Notice of Borrowing is no longer true and
correct as of the applicable Funding Date, and the acceptance by Borrowers of
the proceeds of any Revolving Loans shall constitute a re-certification by
Borrowers, as of the applicable Funding Date, as to the matters to which
Borrowers are required to certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for, or a Notice of Conversion/Continuation for conversion
to, or continuation of, a Eurodollar Rate Loan (or telephonic notice in lieu
thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Borrowers shall be bound to make a borrowing or to
effect a conversion or continuation in accordance therewith.
C. DISBURSEMENT OF FUNDS.
(i) Subject to this subsection 2.1C and subsection 2.1D, all
Revolving Loans under this Agreement shall be made by Lenders
simultaneously and proportionately to their respective Pro Rata Shares, it
being understood that neither Administrative Agent nor any Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Revolving Loan requested hereunder nor shall the
Commitment of any Lender to make the particular type of Revolving Loan
requested be increased or decreased as a result of a default by any other
Lender in that other Lender's obligation to make a Revolving Loan
requested hereunder.
(ii) Upon receipt by Administrative Agent of a Notice of Borrowing
pursuant to subsection 2.1B (or telephonic notice in lieu thereof) for
Revolving Loans that consist of Base Rate Loans and upon satisfaction or
waiver of the conditions precedent specified in subsection 4.1 (in the
case of Revolving Loans made on the Closing Date but prior to the
Incremental Commitment Effective Date), subsection 4.2 (in the case of
Revolving Loans made after the Incremental Commitment Effective Date) and,
subject to the provisions set forth in the immediately succeeding
paragraph, subsection 4.3 (in the case of all Revolving Loans), Daily
Funding Lender shall, without prior notice to the other Lenders, make such
Revolving Loans for its own account on the applicable Funding Date
(subject to settlement with the other Lenders in accordance with
subsection 2.1D) by making the proceeds of such Revolving Loans available
to Borrowers on such Funding Date by causing an amount of same day funds
equal to the proceeds of such Revolving Loans to be credited to the
account of Borrowers at the Funding and Payment Office. Such Revolving
Loans shall constitute Revolving Loans by Daily Funding Lender for all
purposes under the Loan Documents, subject to settlement with the other
Lenders pursuant to subsection 2.1D. All interest accrued on any such
Revolving Loans from the date made by Daily Funding Lender to the
Settlement Date with respect thereto shall be for Daily Funding Lender's
own account. Daily Funding Lender shall make Revolving Loans for its own
account pursuant to this subsection 2.1C(ii) notwithstanding the fact
42
that the principal amount of such Revolving Loans, when added to the
aggregate principal amount of Daily Funding Lender's Loans then
outstanding, may exceed Daily Funding Lender's Revolving Commitment then
in effect; provided that such Revolving Loans shall at all times be
Obligations owed to Daily Funding Lender under this Agreement; and
provided further that in no event shall the Total Utilization of Revolving
Commitments, after giving effect to such Revolving Loans, exceed the least
of (x) the Borrowing Base, (y) the aggregate Revolving Commitments and (z)
the amount of Revolving Loans and Revolving Letters of Credit permitted to
be outstanding hereunder pursuant to the Interim Borrowing Order or Final
Borrowing Order (as applicable), in each case as the foregoing limits are
in effect at such time.
(iii) Promptly after receipt by Administrative Agent of a Notice of
Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu
thereof) for any Revolving Loans other than Base Rate Loans,
Administrative Agent shall notify each Lender of the proposed borrowing.
Each such Lender shall make the amount of its Revolving Loan available to
Administrative Agent not later than 10:00 a.m. (New York time) on the
applicable Funding Date, in same day funds in Dollars, at the Funding and
Payment Office. Except as provided in subsection 3.3B with respect to
Revolving Loans used to reimburse Issuing Lender for the amount of a
drawing under a Revolving Letter of Credit issued by it, upon satisfaction
or waiver of the conditions precedent specified in subsections 4.1 (in the
case of Revolving Loans made on the Closing Date) and 4.3 (in the case of
all Revolving Loans), Administrative Agent shall make the proceeds of such
Revolving Loans available to Borrowers on the applicable Funding Date by
causing an amount of same day funds in Dollars equal to the proceeds of
all such Revolving Loans received by Administrative Agent from Lenders to
be credited to the account of Borrowers at the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any
Lender prior to a Funding Date for any Revolving Loans that such Lender
does not intend to make available to Administrative Agent the amount of
such Lender's Revolving Loan requested on such Funding Date,
Administrative Agent may assume that such Lender has made such amount
available to Administrative Agent on such Funding Date and Administrative
Agent may, in its sole discretion, but shall not be obligated to, make
available to Borrowers a corresponding amount on such Funding Date. If
such corresponding amount is not in fact made available to Administrative
Agent by such Lender, Administrative Agent shall be entitled to recover
such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Funding Date until the date such
amount is paid to Administrative Agent, at the customary rate set by
Administrative Agent for the correction of errors among banks for three
Business Days and thereafter at the Base Rate. If such Lender does not pay
such corresponding amount forthwith upon Administrative Agent's demand
therefor, Administrative Agent shall promptly notify Borrowers and
Borrowers shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from
such Funding Date until the date such amount is paid to Administrative
Agent, at the rate payable under this Agreement for Base Rate Loans.
Nothing in this subsection 2.1C shall be deemed to relieve any Lender from
its obligation to fulfill its
43
Commitments hereunder or to prejudice any rights that Borrowers may have
against any Lender as a result of any default by such Lender hereunder.
D. SETTLEMENT PROCEDURES.
(i) Daily Funding Lender will from time to time notify the other
Lenders, not later than 12:00 Noon (New York time) (a) on at least one
Business Day during each seven calendar-day period, (b) on each date on
which payment of interest on any Revolving Loans is required to be made
pursuant to subsection 2.2C, (c) on the Commitment Termination Date, and
(d) at such other times as Daily Funding Lender in its discretion may
determine (each such notice by Daily Funding Lender being a "SETTLEMENT
NOTICE" and the date of each Settlement Notice being a "SETTLEMENT DATE")
of the aggregate principal amount of outstanding Revolving Loans made by
Daily Funding Lender and each other Lender as of the close of business on
the Business Day immediately preceding the applicable Settlement Date.
(ii) If a Settlement Notice indicates that the aggregate principal
amount of outstanding Revolving Loans made by Daily Funding Lender
(including Revolving Loans made for its own account pursuant to subsection
2.1C(ii)) is in excess of Daily Funding Lender's applicable Pro Rata Share
of the aggregate principal amount of outstanding Revolving Loans made by
all Lenders (the amount of such excess being the "EXCESS FUNDED AMOUNT"),
each such other Lender will, not later than 4:00 P.M. (New York time) on
the applicable Settlement Date, pay to Daily Funding Lender, by depositing
same day funds in the account specified by Daily Funding Lender at the
Funding and Payment Office, an amount equal to such Lender's Adjusted Pro
Rata Share of such Excess Funded Amount, upon which payment Daily Funding
Lender shall be deemed to have sold, and such Lender shall be deemed to
have purchased, as of the applicable Settlement Date, a portion of the
outstanding Revolving Loans made by Daily Funding Lender for its own
account pursuant to subsection 2.1C(ii) on or after the immediately
preceding Settlement Date equal to such Lender's Adjusted Pro Rata Share
of such Excess Funded Amount. The obligation of each Lender to purchase a
portion of any Revolving Loan made by Daily Funding Lender as provided in
this subsection 2.1D(ii) is subject to the condition that at the time such
Revolving Loan was made by Daily Funding Lender, the duly authorized
officer of Daily Funding Lender responsible for the administration of
Daily Funding Lender's credit relationship with Borrowers believed in good
faith that either (a) no Event of Default had occurred and was continuing
or (b) any Event of Default that had occurred and was continuing had been
waived by Requisite Lenders at the time such Revolving Loan was made.
(iii) If a Settlement Notice indicates that the aggregate principal
amount of outstanding Revolving Loans made by Daily Funding Lender is less
than Daily Funding Lender's Pro Rata Share of the aggregate principal
amount of outstanding Revolving Loans made by all Lenders, respectively
(the amount of such difference being the "EXCESS PAYDOWN AMOUNT"), Daily
Funding Lender will, no later than 4:00 P.M. (New York time) on the
applicable Settlement Date, unconditionally pay to each other such Lender,
by depositing same day funds in the account specified by such Lender to
Daily Funding Lender, in an amount equal to such Lender's Adjusted Pro
Rata Share of such
44
Excess Paydown Amount, upon which payment such Lender shall be deemed to
have sold, and Daily Funding Lender shall be deemed to have purchased, as
of the applicable Settlement Date, a portion of the outstanding Revolving
Loans of such Lender equal to such Lender's Adjusted Pro Rata Share of
such Excess Paydown Amount.
(iv) Except as provided in subsection 2.1D(ii), the obligations of
Daily Funding Lender and each other Lender pursuant to subsections
2.1D(ii) and 2.1D(iii) shall be absolute and unconditional and shall not
be affected by any circumstance, including, without limitation, (a) any
set-off, counterclaim, recoupment, defense or other right which
Administrative Agent, Collateral Agent or any Lender may have against
Administrative Agent, Collateral Agent, any other Lender, any Loan Party
or any other Person for any reason whatsoever; (b) the occurrence or
continuance of an Event of Default or a Potential Event of Default; (c)
any adverse change in the condition (financial or otherwise) of any Loan
Party; (d) any breach of this Agreement by any Borrower or Borrowers,
Administrative Agent, Collateral Agent or any Lender; or (e) any other
circumstance, happening, or event whatsoever, whether or not similar to
any of the foregoing. In the event that any Person (the "PAYOR") obligated
to make a payment to any other Person (the "PAYEE") pursuant to this
subsection 2.1D fails to make available to the Payee the amount of such
payment required to be made by the Payor, the Payee shall be entitled to
recover such amount on demand from the Payor together with interest at the
customary rate set by Administrative Agent for the correction of errors
among Lenders for three Business Days and thereafter at the Base Rate.
(v) In the event that all or any portion of any repayment of
principal of the Revolving Loans is thereafter recovered by or on behalf
of Borrowers from Daily Funding Lender (including any such recovery in a
proceeding under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect) in an amount that is proportionately
greater (based on the respective applicable Pro Rata Shares of Lenders)
than any such recovery from the other Lenders, the loss of the amount so
recovered shall be ratably shared among all applicable Lenders in the
manner contemplated by subsection 10.5.
E. THE REGISTER. Administrative Agent, acting for these purposes
solely as an agent of Borrowers (it being acknowledged that Administrative
Agent, in such capacity, and its officers, directors, employees, agent and
affiliates shall constitute Indemnitees under subsection 10.3), shall maintain
at its address referred to in subsection 10.8 a register for the recordation of,
and shall record, the names and addresses of Lenders and the respective amounts
of the Revolving Commitment, Incremental Commitment and Revolving Loans of each
Lender from time to time (the "REGISTER"). Borrowers, Administrative Agent,
Collateral Agent and Lenders shall deem and treat the Persons listed as Lenders
in the Register as the holders and owners of the corresponding Commitments and
Revolving Loans listed therein for all purposes hereof; all amounts owed with
respect to any Commitment or Revolving Loan shall be owed to the Lender listed
in the Register as the owner thereof; and any request, authority or consent of
any Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and binding
on any subsequent holder, assignee or transferee of the corresponding
Commitments or Revolving Loans. Each Lender shall record on its internal records
the amount of its Revolving Loans and Commitments and each payment in
45
respect hereof, and any such recordation shall be conclusive and binding on
Borrowers, absent manifest error, subject to the entries in the Register, which
shall, absent manifest error, govern in the event of any inconsistency with any
Lender's records. Failure to make any recordation in the Register or in any
Lender's records, or any error in such recordation, shall not affect any
Revolving Loans or Commitments or any Obligations.
F. OPTIONAL NOTES. If so requested by any Lender by written
notice to Borrowers (with a copy to Administrative Agent) at least two Business
Days prior to the Closing Date or at any time thereafter, Borrowers shall
execute and deliver to such Lender (and/or, if applicable and if so specified in
such notice, to any Person who is an assignee of such Lender pursuant to
subsection 10.1) on the Closing Date (or, if such notice is delivered after the
Closing Date, promptly after Borrowers' receipt of such notice) a promissory
note or promissory notes to evidence such Lender's Revolving Loans substantially
in the form of Exhibit VI annexed hereto, with appropriate insertions.
2.2 INTEREST ON THE REVOLVING LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections 2.6
and 2.7, each Loan shall bear interest on the unpaid principal amount thereof
from the date made through maturity (whether by acceleration or otherwise), at
the Borrowers' option, at a rate determined by reference to the Base Rate or the
Eurodollar Rate. The applicable basis for determining the rate of interest with
respect to any Revolving Loan shall be selected by Borrowers initially at the
time a Notice of Borrowing is given with respect to such Revolving Loan pursuant
to subsection 2.1B, and the basis for determining the interest rate with respect
to any Revolving Loan may be changed from time to time pursuant to subsection
2.2D. If on any day a Revolving Loan is outstanding with respect to which notice
has not been delivered to Administrative Agent in accordance with the terms of
this Agreement specifying the applicable basis for determining the rate of
interest, then for that day that Revolving Loan shall bear interest determined
by reference to the Base Rate.
Subject to the provisions of subsections 2.2E, 2.2G, 2.6 and 2.7,
the Revolving Loans shall bear interest through maturity as follows:
(i) if a Base Rate Loan, then at the sum of the Base Rate plus
2.00% per annum; or
(ii) if a Eurodollar Rate Loan, then at the sum of the Eurodollar
Rate plus 3.00% per annum.
B. INTEREST PERIODS. In connection with each Eurodollar Rate
Loan, each interest period (an "INTEREST PERIOD") to be applicable to such
Revolving Loan shall be a one-, two- or three- (or, if all Lenders shall agree,
six-) month period; provided that:
(i) the initial Interest Period for any Eurodollar Rate Loan shall
commence on the Funding Date in respect of such Revolving Loan, in the
case of a Revolving Loan initially made as a Eurodollar Rate Loan, or on
the date specified in the applicable Notice of Conversion/Continuation, in
the case of a Revolving Loan converted to a Eurodollar Rate Loan;
46
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a
Notice of Conversion/Continuation, each successive Interest Period shall
commence on the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on the
last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the
Revolving Loans shall extend beyond the Maturity Date; and
(vi) there shall be no more than 5 Interest Periods outstanding at
any time.
C. INTEREST PAYMENTS. Subject to the provisions of subsection
2.2E, interest on each Revolving Loan shall be payable in arrears, computed on
the basis of a 360-day year, on and to each Interest Payment Date applicable to
that Revolving Loan and at maturity (including final maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of
subsection 2.6, Borrowers shall have the option (i) to convert at any time all
or any part of its outstanding Revolving Loans equal to $1,000,000 and integral
multiples of $100,000 in excess of that amount from Revolving Loans bearing
interest at a rate determined by reference to one basis to Revolving Loans
bearing interest at a rate determined by reference to an alternative basis or
(ii) upon the expiration of any Interest Period applicable to a Eurodollar Rate
Loan, to continue all or any portion of such Revolving Loan equal to $1,000,000
and multiples of $100,000 in excess of that amount as a Eurodollar Rate Loan;
provided, however, that a Eurodollar Rate Loan may only be converted into a Base
Rate Loan on the expiration date of an Interest Period applicable thereto.
Borrowers shall deliver a duly executed Notice of
Conversion/Continuation to Administrative Agent no later than 11:00 a.m. (New
York time) at least one Business Day in advance of the proposed conversion date
(in the case of a conversion to a Base Rate Loan) and at least three Business
Days in advance of the proposed conversion/continuation date (in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan). In lieu of
delivering a Notice of Conversion/Continuation, Borrowers may give
Administrative Agent telephonic notice by the required time of any proposed
conversion/continuation under this subsection 2.2D; provided that such notice
shall be promptly confirmed in writing by delivery of a duly executed Notice of
Conversion/Continuation to Administrative Agent on or before the proposed
conversion/continuation date. Upon receipt of written or telephonic notice of
any proposed
47
conversion/continuation under this subsection 2.2D, Administrative Agent shall
promptly transmit such notice by telefacsimile or telephone to each Lender of
the Revolving Loan subject to the Notice of Conversion/Continuation.
E. DEFAULT RATE. Upon the occurrence and during the continuation
of any Event of Default, the outstanding principal amount of all Revolving Loans
and, to the extent permitted by applicable law, any interest payments thereon
not paid when due and any fees and other amounts then due and payable hereunder,
shall thereafter bear interest (including post-petition interest in any
proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable upon demand at a rate that is 2% per annum in excess of the interest
rate otherwise payable under this Agreement with respect to the applicable
Revolving Loans (or, in the case of any such fees and other amounts, at a rate
which is 2% per annum in excess of the interest rate otherwise payable under
this Agreement for Base Rate Loans); provided that, in the case of Eurodollar
Rate Loans, upon the expiration of the Interest Period in effect at the time any
such increase in interest rate is effective such Eurodollar Rate Loans shall
thereupon become Base Rate Loans and shall thereafter bear interest payable upon
demand at a rate which is 2% per annum in excess of the interest rate otherwise
payable under this Agreement for Base Rate Loans. Payment or acceptance of the
increased rates of interest provided for in this subsection 2.2E is not a
permitted alternative to timely payment and shall not constitute a waiver of any
Event of Default or otherwise prejudice or limit any rights or remedies of
Administrative Agent, Collateral Agent or any Lender.
F. COMPUTATION OF INTEREST. Interest on the Revolving Loans shall
be computed on the basis of a 360-day year for the actual number of days elapsed
in the period during which it accrues. In computing interest on any Revolving
Loan, the date of the making of such Revolving Loan or the first day of an
Interest Period applicable to such Revolving Loan or, with respect to a Base
Rate Loan being converted from a Eurodollar Rate Loan, the date of conversion of
such Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Revolving Loan or the expiration date
of an Interest Period applicable to such Revolving Loan or, with respect to a
Base Rate Loan being converted to a Eurodollar Rate Loan, the date of conversion
of such Base Rate Loan to such Eurodollar Rate Loan, as the case may be, shall
be excluded; provided that if a Revolving Loan is repaid on the same day on
which it is made, one day's interest shall be paid on that Revolving Loan.
G. MAXIMUM RATE. Notwithstanding the foregoing provisions of this
subsection 2.2, in no event shall the rate of interest payable by Borrowers with
respect to any Revolving Loan exceed the maximum rate of interest permitted to
be charged under applicable law.
2.3 FEES.
A. COMMITMENT FEES. Borrowers jointly and severally agree to pay
to Administrative Agent, for distribution to each Lender in proportion to that
Lender's Pro Rata Share of Revolving Loan Exposure, commitment fees for the
period from and including the Closing Date to and excluding the Commitment
Termination Date equal to (i) the average of the daily excess of the aggregate
Revolving Commitments over the Total Utilization of Revolving
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Commitments multiplied by (ii) 0.50% per annum, computed on the basis of a
360-day year and payable monthly in arrears on the last Business Day of each
month and on the Maturity Date.
B. OTHER FEES. Borrowers jointly and severally agree to pay to
Administrative Agent for its own account and to Collateral Agent for its own
account and for distribution to Lead Arranger, such financing, administrative
and other fees in such amounts and at such times as have been agreed upon in
writing by Company, Administrative Agent, Lead Arranger and Collateral Agent and
approved by the Bankruptcy Court.
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN COMMITMENTS; GENERAL
PROVISIONS REGARDING PAYMENTS; APPLICATION OF PROCEEDS OF COLLATERAL
AND PAYMENTS.
A. PREPAYMENTS AND REDUCTIONS.
(i) Voluntary Prepayments. Borrowers may, upon not less than one
Business Day's prior written or telephonic notice, in the case of Base
Rate Loans, and three Business Days' prior written or telephonic notice,
in the case of Eurodollar Rate Loans, in each case given to Administrative
Agent by 11:00 a.m. (New York time) on the date required and, if given by
telephone, promptly confirmed in writing to Administrative Agent (which
original written or telephonic notice Administrative Agent will promptly
transmit by telefacsimile or telephone to each Lender for the Revolving
Loans to be prepaid), at any time and from time to time prepay any
Revolving Loans on any Business Day in whole or in part in an aggregate
minimum amount of $500,000 and integral multiples of $100,000 in excess of
that amount; provided, however, that a Eurodollar Rate Loan may only be
prepaid on the expiration of the Interest Period applicable thereto unless
Borrowers also prepay any applicable breakage costs in connection
therewith as set forth in subsection 2.6D. Notice of prepayment having
been given as aforesaid, the principal amount of the Revolving Loans
specified in such notice shall become due and payable on the prepayment
date specified therein. Any such voluntary prepayment shall be applied as
specified in subsection 2.4A(iv).
(ii) Voluntary Reductions of Commitments. Borrowers may, upon not
less than three Business Days' prior written or telephonic notice
confirmed in writing to Administrative Agent (which original written or
telephonic notice Administrative Agent will promptly transmit by
telefacsimile or telephone to each Lender), at any time and from time to
time terminate in whole or permanently reduce in part, without premium or
penalty, the Revolving Commitments in an amount up to the amount by which
the Revolving Commitments exceed the Total Utilization of Revolving
Commitments at the time of such proposed termination or reduction;
provided that any such partial reduction of the Revolving Commitments
shall be in an aggregate minimum amount of $1,000,000 and integral
multiples of $1,000,000 in excess of that amount. Borrowers' notice to
Administrative Agent shall designate the date (which shall be a Business
Day) of such termination or reduction and the amount of any partial
reduction, and such termination or reduction of the Revolving Commitments
shall be effective on the date specified in Borrowers' notice and shall
reduce the Revolving Commitment of each Lender
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proportionately to its Pro Rata Share. Any such voluntary reduction of the
Revolving Commitments shall be applied as specified in subsection
2.4A(iv).
(iii) Mandatory Prepayment of Revolving Loans and Mandatory
Reductions of Commitments. The Revolving Loans shall be prepaid and/or the
Commitments shall be permanently reduced (and or letters of credit cash
collateralized) in the amounts and under the circumstances set forth
below, all such prepayments and/or reductions to be applied as set forth
below or as more specifically provided in subsection 2.4A(iv):
(a) Prepayments and Reductions From Net Asset Sale Proceeds.
No later than the date of receipt by Borrowers of any Net Asset Sale
Proceeds, if such Net Asset Sale Proceeds together with the Net
Asset Sale Proceeds of all other Asset Sales since the Closing Date
would exceed $5,000,000, Borrowers shall prepay the Revolving Loans
and, if applicable, the Revolving Commitments shall be permanently
reduced (and/or Revolving Letters of Credit cash collateralized) in
an aggregate amount equal to such Net Asset Sale Proceeds in excess
of $5,000,000.
(b) Prepayments and Reductions from Net
Insurance/Condemnation Proceeds. No later than the first Business
Day following the date of receipt by Collateral Agent or by any
Borrower or any Subsidiary Guarantor of any Net
Insurance/Condemnation Proceeds that are required to be applied to
prepay the Revolving Loans and, if applicable, reduce the Revolving
Commitments pursuant to the provisions of subsection 6.4C, Borrowers
shall prepay the Revolving Loans and, if applicable, the Revolving
Commitments shall be permanently reduced (and/or Revolving Letters
of Credit cash collateralized) in an aggregate amount equal to the
amount of such Net Insurance/Condemnation Proceeds; provided, that
Borrowers may reinvest up to $5,000,000 in the aggregate of Net
Insurance/Condemnation Proceeds received since the Closing Date, so
long as such Net Insurance/Condemnation Proceeds are reinvested
within 180 days of receipt thereof in assets of Borrowers subject to
a First-Priority Lien securing the Obligations.
(c) Prepayments and Reductions Due to Issuance of Equity
Securities. On the date of receipt of the Net Securities Proceeds
from the issuance of any equity Securities of Borrowers after the
Closing Date, Borrowers shall prepay the Revolving Loans and, if
applicable, the Revolving Commitments shall be permanently reduced
(and/or Revolving Letters of Credit cash collateralized) in an
aggregate amount equal to such Net Securities Proceeds.
(d) Prepayments and Reductions Due to Issuance of
Indebtedness. On the date of receipt of the Net Securities Proceeds
from the issuance of any Indebtedness of Company or any of its
Subsidiaries after the Closing Date, Borrowers shall prepay the
Revolving Loans and, if applicable, the Revolving Commitments shall
be permanently reduced (and/or Revolving Letters of Credit cash
collateralized) in an aggregate amount equal to such Net Securities
Proceeds.
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(e) Calculations of Net Proceeds Amounts; Additional
Prepayments and Reductions Based on Subsequent Calculations.
Concurrently with any prepayment of the Revolving Loans and/or
reduction of the Revolving Commitments pursuant to subsections
2.4A(iii)(a)-(d), Borrowers shall deliver to Administrative Agent an
Officer's Certificate demonstrating the calculation of the amount of
the applicable Net Asset Sale Proceeds, Net Insurance/Condemnation
Proceeds or Net Securities Proceeds, as the case may be, that gave
rise to such prepayment and/or reduction. In the event that
Borrowers shall subsequently determine that the actual amount was
greater than the amount set forth in such Officer's Certificate,
Borrowers shall promptly make an additional prepayment of the
Revolving Loans (and, if applicable, the Revolving Commitments shall
be permanently reduced) in an amount equal to the amount of such
excess, and Borrowers shall concurrently therewith deliver to
Administrative Agent an Officer's Certificate demonstrating the
derivation of the additional amount resulting in such excess.
(f) Prepayments Due to Reductions or Restrictions of
Revolving Commitments. Borrowers shall from time to time prepay the
Revolving Loans to the extent necessary so that the Total
Utilization of Revolving Commitments shall not at any time exceed
the least of (1) the aggregate Revolving Commitments, (2) the
Borrowing Base, and (3) the amount of Obligations permitted to be
outstanding pursuant to the Interim Borrowing Order or Final
Borrowing Order (as applicable), in each case as the foregoing
limits may be in effect at such time, and, if any such payment
pursuant to this sentence does not result in elimination of such
excess, Borrowers shall, in an amount equal to such remaining
excess, first, promptly repay any unreimbursed drawings under
Revolving Letters of Credit and second, cash collateralize (on terms
and conditions reasonably satisfactory to the applicable Issuing
Lender and Agents) all issued and outstanding Revolving Letters of
Credit, for the ratable benefit of the holders thereof.
(g) Repayments from Restricted Cash Account. If any amounts
are transferred to the Restricted Cash Account on any Business Day,
then on such Business Day, if such amounts are transferred to the
Restricted Cash Account prior to 1:00 p.m. (New York City time) on
such Business Day, or on the next succeeding Business Day, if such
amounts are transferred to the Restricted Cash Account on or after
1:00 p.m. (New York City time) on such Business Day, Borrowers shall
prepay Revolving Loans in an amount equal to the amount transferred
to the Restricted Cash Account on such Business Day until all
Revolving Loans shall have been paid in full.
(iv) Application of Prepayments.
(a) Application of Voluntary Prepayments by Type of
Revolving Loans and Order of Maturity. Any voluntary prepayments
pursuant to subsection 2.4A(i) shall be applied as specified by
Borrowers in the applicable notice of prepayment.
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(b) Application of Mandatory Prepayments by Type of
Revolving Loans. Except as provided in subsection 2.4C, any amount
required to be applied as a mandatory prepayment of the Revolving
Loans and/or a reduction of the Revolving Commitments pursuant to
subsections 2.4A(iii)(a)-(d) shall be applied first, to prepay the
Revolving Loans to the full extent thereof and to permanently reduce
the Revolving Commitments to the extent of 100% of the amount of
such prepayment, and second, to the extent of any remaining portion
of such amount, to permanently reduce the Revolving Commitments to
the extent of 100% of such remaining amount, provided, that to the
extent such application would cause the Revolving Letter of Credit
Usage to exceed the Revolving Commitments, amounts so applied shall
be applied to cash collateralize (on terms and conditions reasonably
satisfactory to Issuing Lender and Agents) all issued and
outstanding Revolving Letters of Credit, for the ratable benefit of
the holders thereof, in an amount up to 110% of the maximum
aggregate amount that is or may at any time thereafter become
available for drawing under all such Revolving Letters of Credit.
Any mandatory reduction of Commitments pursuant to this subsection
2.4A shall be in proportion to each Lender's Pro Rata Share.
(c) Application of Prepayments to Base Rate Loans and
Eurodollar Rate Loans. Any prepayment of Revolving Loans shall be
applied first to Base Rate Loans to the full extent thereof before
application to Eurodollar Rate Loans, in each case in a manner which
minimizes the amount of any payments required to be made by
Borrowers pursuant to subsection 2.6D; provided, however, that
Borrowers may elect that the remainder of such prepayments not
applied to prepay Base Rate Loans be deposited in the Collateral
Account and applied thereafter to prepay the Eurodollar Rate Loan or
Revolving Loans with Interest Periods expiring on a date or dates
nearest the date of deposit in accordance with this subsection
2.4A(iv), upon expiration of such Interest Periods.
B. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Borrowers of
principal, interest, fees and other Obligations shall be made in Dollars
in same day funds, without defense, setoff or counterclaim, free of any
restriction or condition, and delivered to Administrative Agent not later
than 11:00 a.m. (New York time) on the date due at the Funding and Payment
Office for the account of Lenders; funds received by Administrative Agent
after that time on such due date shall be deemed to have been paid by
Borrowers on the next succeeding Business Day. In order to effect timely
payment of any interest, fees, commissions or other amounts due hereunder,
Borrowers hereby authorize Administrative Agent to request Daily Funding
Lender to make Revolving Loans for its own account (subject to settlement
pursuant to subsection 2.1D) in a principal amount equal to such interest,
fees, commissions or other amounts; provided that Administrative Agent
shall not have the right to request such Revolving Loans if, after giving
effect to such Revolving Loans, the Total Utilization of Revolving
Commitments would exceed the least of (x) the Borrowing Base, (y) the
aggregate Revolving Commitments and (z) the amount of Revolving Loans and
Revolving Letters of Credit permitted to be outstanding hereunder pursuant
to the Interim Borrowing Order
52
or Final Borrowing Order (as applicable), in each case as the foregoing
limits are in effect at such time. Daily Funding Lender shall make the
amount of such Revolving Loans (which shall be made as Base Rate Loans)
available to Administrative Agent, in same day funds, at the Funding and
Payment Office, not later than 1:00 P.M. (New York City time) on the date
requested by Administrative Agent, and Borrowers and Lenders hereby
authorize Administrative Agent, whether or not the conditions specified in
subsection 4.3 have been satisfied or waived, to apply the proceeds of
such Revolving Loans directly to the payment of such unpaid interest,
fees, commissions or other amounts. Borrowers hereby agree that, upon the
funding of any such Revolving Loans by Daily Funding Lender in accordance
with the provisions of this subsection 2.4B(i), Borrowers shall have
effected Revolving Loans hereunder, which Revolving Loans shall for all
purposes of this Agreement be deemed to have been made by Daily Funding
Lender pursuant to and in accordance with the provisions of subsection
2.1B(ii). Administrative Agent shall deliver prompt notice to Borrowers of
the amount of Revolving Loans made pursuant to this subsection 2.4B
together with copies of all invoices or other statements evidencing the
fees, commissions or other amounts due hereunder (other than interest)
paid with the proceeds of such Revolving Loans. Anything contained herein
to the contrary notwithstanding, (a) Borrowers jointly and severally
promise to repay all Revolving Loans and honored drawings under the
Revolving Letters of Credit when due in accordance with the terms hereof,
and (b) Borrowers agree that, to the extent any Revolving Letters of
Credit have not been returned and cancelled, on the Maturity Date, (1) the
unpaid principal amount of, and accrued interest on, any funded amounts
under such Revolving Letters of Credit and on any Revolving Loans, (2) an
amount equal to the maximum available amount that may at any time on or
after such date be drawn under all such Revolving Letters of Credit then
outstanding (whether or not any beneficiary under any such Revolving
Letter of Credit shall have presented, or shall be entitled at such time
to present, the drafts or other documents or certificates required to draw
under such Revolving Letter of Credit), and (3) all other Obligations
shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of
which are hereby expressly waived by Borrowers, and any amounts so due and
payable with respect to Revolving Letters of Credit shall be (A) cash
collateralized (pursuant to arrangements satisfactory to the Issuing
Lenders of such Revolving Letters of Credit) in an amount not less than
110% of such amount due and payable or (B) otherwise supported by letters
of credit in such amount and in form and substance satisfactory to the
Issuing Lenders of such Revolving Letters of Credit and to Agents.
Notwithstanding the foregoing, payments of amounts deposited in the
Collateral Account pursuant to the proviso to subsection 2.4A(iv)(c) shall
be deemed to have been paid by Borrowers on the applicable date or dates
such amounts are applied to prepay Eurodollar Rate Loans. Each Borrower
hereby authorizes Administrative Agent to charge its accounts with
Administrative Agent in order to cause timely payment to be made to
Administrative Agent of all principal, interest, fees and expenses due
hereunder (subject to sufficient funds being available in its accounts for
that purpose).
(ii) Application of Payments to Principal and Interest. Except as
provided in subsection 2.2C, all payments in respect of the principal
amount of any Revolving Loan shall include payment of accrued interest on
the principal amount being repaid or prepaid,
53
and all such payments shall be applied to the payment of interest before
application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
payments in respect of Revolving Loans, including payments pursuant to
Section 3, shall be apportioned among all outstanding Revolving Loans to
which such payments relate, in each case proportionately to Lenders'
respective Pro Rata Shares; provided that (i) payments of principal in
respect of the Revolving Loans pursuant to subsection 2.4A(iii)(g) shall
be applied to reduce the outstanding Revolving Loans of Daily Funding
Lender (subject to settlement pursuant to subsection 2.1D) prior to
application to the outstanding Revolving Loans of any other Lender and
(ii) payments of interest in respect of Revolving Loans which are Base
Rate Loans shall be apportioned ratably among Lenders in proportion to the
average daily amount of such Base Rate Loans of each Lender outstanding
during the period in which such interest shall have accrued.
Administrative Agent shall promptly distribute to each Lender, at its
primary address set forth below its name on the appropriate signature page
hereof or at such other address as such Lender may request, its Pro Rata
Share of all such payments received by Administrative Agent and the
commitment fees and Revolving Letter of Credit fees of such Lender, if
any, when received by Administrative Agent pursuant to subsection 2.3.
Notwithstanding the foregoing provisions of this subsection 2.4B(iii), if,
pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder or of the commitment fees hereunder, as the case may
be.
(v) Notation of Payment. Each Lender agrees that before disposing
of any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all
Revolving Loans evidenced by that Note and all principal payments
previously made thereon and of the date to which interest thereon has been
paid; provided that the failure to make (or any error in the making of) a
notation of any Revolving Loan made under such Note shall not limit or
otherwise affect the obligations of Borrowers hereunder or under such Note
with respect to any Revolving Loan or any payments of principal or
interest on such Note.
C. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS AFTER EVENT
OF DEFAULT.
Upon the occurrence and during the continuation of an Event of
Default, either if requested by Requisite Lenders or upon termination of the
Revolving Commitments (a) all payments received on account of the Obligations,
whether from Borrowers or otherwise, shall be applied by Administrative Agent
and Collateral Agent against the Obligations and (b) all
54
proceeds received by Collateral Agent in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral under any
Collateral Document may, in the discretion of Collateral Agent, be held by
Collateral Agent as Collateral for, and/or (then or at any time thereafter)
applied in full or in part by Collateral Agent against, the applicable
Obligations, in each case in the following order of priority:
(i) to the payment of all costs and expenses of such sale,
collection or other realization, all other expenses, liabilities and
advances made or incurred by Agents in connection therewith, and all
amounts for which Agents are entitled to compensation (including the fees
described in subsection 2.3), reimbursement and indemnification under any
Loan Document and all advances made by any Agent thereunder for the
account of the applicable Loan Party, and to the payment of all costs and
expenses paid or incurred by Agents in connection with the Loan Documents,
all in accordance with subsections 9.4, 10.2 and 10.3 and the other terms
of this Agreement and the Loan Documents;
(ii) thereafter, to the extent of any excess such proceeds, to
prepay the Revolving Loans to the full extent thereof, for the ratable
benefit of the holders thereof (subject to the provisions of subsection
2.4B(ii) hereof);
(iii) thereafter, to the extent of any excess such proceeds, to cash
collateralize (on terms and conditions reasonably satisfactory to Issuing
Lenders and Agents) all issued and outstanding Letters of Credit, for the
ratable benefit of the holders thereof, in an amount up to 110% of the
maximum aggregate amount that is or may at any time thereafter become
available for drawing under all Revolving Letters of Credit;
(iv) thereafter, to the extent of any excess such proceeds, to the
payment of all remaining unpaid Obligations, for the ratable benefit of
the holders thereof; and
(v) thereafter, to the payment to or upon the order of such Loan
Party or to whosoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct.
2.5 USE OF PROCEEDS.
A. REVOLVING LOANS. The proceeds of Revolving Loans shall be
applied by Borrowers, subject to compliance with subsection 2.10 and pro forma
compliance (giving effect to the borrowing) with the provisions of subsection
7.6, (i) to pay fees and expenses associated with the debtor-in-possession
credit facility under this Agreement and the Loan Documents, (ii) to pay the
other amounts set forth on Schedule 2.5A annexed hereto, and (iii) for working
capital and other general corporate purposes relating to Borrowers' postpetition
operations, which may include the making of intercompany loans to any of
Company's wholly-owned Subsidiaries, in accordance with subsection 7.1(iv), for
their own general corporate purposes; provided that no proceeds or any other
portion of the Revolving Loans shall be used, directly or indirectly, to finance
or make any payments prohibited under subsection 7.5 or under any other
provision of this Agreement, including any payment or prepayment in respect of
Pre-Petition Indebtedness prohibited hereunder.
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B. MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by Company or any of its
Subsidiaries in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation U, Regulation T or Regulation X of the Board
of Governors of the Federal Reserve System or any other regulation of such Board
or to violate the Exchange Act, in each case as in effect on the date or dates
of such borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Eurodollar Rate
Loans as to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 10:00 a.m. (New York time) on each Interest Rate Determination
Date, Administrative Agent shall determine (which determination shall, absent
manifest error, be conclusive and binding upon all parties) the interest rate
that shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event
that Administrative Agent shall have determined (which determination shall be
conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date that by reason of circumstances affecting the London
interbank Eurodollar market adequate and fair means do not exist for
ascertaining the interest rate applicable to such Revolving Loans on the basis
provided for in the definition of Eurodollar Rate, Administrative Agent shall on
such date give notice (by telefacsimile or by telephone confirmed in writing) to
Company and each Lender of such determination, whereupon (i) no Revolving Loans
may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist and (ii) any Notice of Borrowing or Notice
of Conversion/Continuation given by Company with respect to the Revolving Loans
in respect of which such determination was made shall be deemed to be for a Base
Rate Loan.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In
the event that on any date any Lender shall have determined (which determination
shall be conclusive and binding upon all parties hereto but shall be made only
after consultation with Company and Administrative Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful
as a result of compliance by such Lender in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be unlawful)
or (ii) has become impracticable, or would cause such Lender material hardship,
as a result of contingencies occurring after the date of this Agreement which
materially and adversely affect the London interbank Eurodollar market or the
position of such Lender in that market, then, and in any such event, such Lender
shall be an "AFFECTED LENDER" and it shall on that day give notice (by
telefacsimile or by telephone confirmed in writing) to Company and
Administrative Agent of such determination (which notice Administrative Agent
shall promptly transmit to each other Lender). Thereafter (a) the
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obligation of the Affected Lender to make Revolving Loans as, or to convert
Revolving Loans to, Eurodollar Rate Loans shall be suspended until such notice
shall be withdrawn by the Affected Lender, (b) to the extent such determination
by the Affected Lender relates to a Eurodollar Rate Loan then being requested by
Borrowers pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Revolving Loan as
(or convert such Revolving Loan to, as the case may be) a Base Rate Loan, (c)
the Affected Lender's obligation to maintain its outstanding Eurodollar Rate
Loans (the "AFFECTED LOANS") shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected Loans shall automatically
convert into Base Rate Loans on the date of such termination. Notwithstanding
the foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Borrowers
pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation,
Borrowers shall have the option, subject to the provisions of subsection 2.6D,
to rescind such Notice of Borrowing or Notice of Conversion/Continuation as to
all Lenders by giving notice (by telefacsimile or by telephone confirmed in
writing) to Administrative Agent of such rescission on the date on which the
Affected Lender gives notice of its determination as described above (which
notice of rescission Administrative Agent shall promptly transmit to each other
Lender). Except as provided in the immediately preceding sentence, nothing in
this subsection 2.6C shall affect the obligation of any Lender other than an
Affected Lender to make or maintain Revolving Loans as, or to convert Revolving
Loans to, Eurodollar Rate Loans in accordance with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Borrowers shall compensate each Lender, upon written request by that
Lender pursuant to subsection 2.8, for all reasonable losses, expenses and
liabilities (including any interest paid by that Lender to lenders of funds
borrowed by it to make or carry its Eurodollar Rate Loans and any loss, expense
or liability sustained by that Lender in connection with the liquidation or
re-employment of such funds) which that Lender may sustain: (i) if for any
reason (other than a default by that Lender) a borrowing of any Eurodollar Rate
Loan does not occur on a date specified therefor in a Notice of Borrowing or a
telephonic request therefor, or a conversion to or continuation of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request therefor, (ii) if any prepayment
or other principal payment or any conversion of any of its Eurodollar Rate Loans
(including any prepayment or conversion occasioned by the circumstances
described in subsection 2.6C) occurs on a date prior to the last day of an
Interest Period applicable to that Revolving Loan, (iii) if any prepayment of
any of its Eurodollar Rate Loans is not made on any date specified in a notice
of prepayment given by Borrowers, or (iv) as a consequence of any other default
by Borrowers in the repayment of its Eurodollar Rate Loans when required by the
terms of this Agreement.
E. BOOKING OF EURODOLLAR RATE LOANS. Upon written notification to
Administrative Agent, any Lender may make, carry or transfer Eurodollar Rate
Loans at, to, or for the account of any of its branch offices or the office of
an Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had funded each of its
Eurodollar Rate Loans through the purchase of a Eurodollar deposit bearing
interest at the rate obtained pursuant
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to clause (i) of the definition of Eurodollar Rate in an amount equal to the
amount of such Eurodollar Rate Loan and having a maturity comparable to the
relevant Interest Period, whether or not its Eurodollar Rate Loans had been
funded in such manner.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of
and during the continuation of an Event of Default, (i) Borrowers may not elect
to have a Revolving Loan be made or maintained as, or converted to, a Eurodollar
Rate Loan after the expiration of any Interest Period then in effect for that
Revolving Loan and (ii) subject to the provisions of subsection 2.6D, any Notice
of Borrowing or Notice of Conversion/Continuation given by Borrowers with
respect to a requested borrowing or conversion/continuation that has not yet
occurred shall be deemed to be for a Base Rate Loan or, if the conditions to
making a Revolving Loan set forth in subsection 4.2 cannot then be satisfied, to
be rescinded by Borrowers.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS. Subject to the provisions of
subsection 2.7B (which shall be controlling with respect to the matters covered
thereby), in the event that any Lender (including Issuing Lender) shall
determine (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) that any Change in Law:
(i) subjects such Lender to any additional tax of any kind
whatsoever with respect to this Agreement or any of its obligations
hereunder (including with respect to issuing or maintaining any Letters of
Credit or purchasing or maintaining any participations therein or
maintaining any Commitment hereunder) or any payments to such Lender of
principal, interest, fees or any other amount payable hereunder (except
for the imposition of, or any change in the rate of, any Excluded Tax
payable by such Lender);
(ii) imposes, modifies or holds applicable any reserve, special
deposit, compulsory loan, insurance charge or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
or advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to Eurodollar Rate Loans that
are reflected in the definition of Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to Taxes)
on or affecting such Lender or its obligations hereunder or the London
interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining its Revolving Loans or Commitments or
agreeing to issue, issuing or maintaining any Revolving Letter of Credit or
agreeing to purchase, purchasing or maintaining any participation therein or to
reduce any amount received or receivable by such Lender with respect thereto;
then, in any such case, Borrowers shall promptly pay to such Lender, upon
receipt of the statement referred to in subsection 2.8A, such additional amount
or amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such
58
Lender in its sole discretion shall determine) as may be necessary to compensate
such Lender for any such increased cost or reduction in amounts received or
receivable hereunder.
B. TAXES.
(i) Payments to Be Free and Clear. Any and all payments by or on
account of any obligation of Borrowers under this Agreement and the other
Loan Documents shall be made free and clear of, and without any deduction
or withholding on account of, any Indemnified Taxes or Other Taxes.
(ii) Grossing-up of Payments. If any Borrowers or any other Person
is required by law to make any deduction or withholding on account of any
Tax from any sum paid or payable by Borrowers to any Agent or any Lender
under any of the Loan Documents:
(a) Borrowers shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as
Borrowers become aware of it;
(b) Borrowers shall timely pay any such Tax to the relevant
Government Authority when such Tax is due, in accordance with
applicable law;
(c) unless such Tax is an Excluded Tax, the sum payable by
Borrowers shall be increased to the extent necessary to ensure that,
after making the required deductions (including deductions
applicable to additional sums payable under this subsection
2.7B(ii)), such Agent or such Lender, as the case may be, receives
on the due date a net sum equal to the sum it would have received
had no such deduction been required or made; and
(d) within 30 days after paying any sum from which it is
required by law to make any such deduction, and within 30 days after
the due date of payment of any Tax which it is required by clause
(b) above to pay, Borrowers shall deliver to Administrative Agent
the original or a certified copy of an official receipt or other
document satisfactory to the other affected parties to evidence the
payment and its remittance to the relevant Government Authority.
(iii) Indemnification by Borrowers. Borrowers shall indemnify each
Agent and each Lender, within 10 days after demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes (including for the full
amount of any Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this subsection 2.7B(iii)) paid by
such Agent or such Lender, as the case may be, and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether
or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Government Authority. A certificate as
to the amount of such payment or liability delivered to Borrowers by a
Lender (with a copy to Administrative Agent), or by either Agent on its
own behalf or on behalf of a Lender, shall be conclusive absent manifest
error.
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(iv) Tax Status of Lenders. Unless not legally entitled to do so:
(a) any Lender, if requested by Borrowers or Administrative
Agent, shall deliver such forms or other documentation prescribed by
applicable law or reasonably requested by Borrowers or
Administrative Agent as will enable Borrowers or Administrative
Agent to determine whether or not such Lender is subject to backup
withholding or information reporting requirements;
(b) any Foreign Lender that is entitled to an exemption from
or reduction of any Tax with respect to payments hereunder or under
any other Loan Document shall deliver to Borrowers and
Administrative Agent, on or prior to the date on which such Foreign
Lender becomes a Lender under this Agreement (and from time to time
thereafter, as may be necessary in the determination of Borrowers or
Administrative Agent, each in the reasonable exercise of its
discretion), such properly completed and duly executed forms or
other documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate of
withholding;
(c) without limiting the generality of the foregoing, in the
event that Borrowers are resident for tax purposes in the United
States, any Foreign Lender shall deliver to Borrowers and
Administrative Agent (in such number of copies as shall be requested
by the recipient) on or prior to the date on which such Foreign
Lender becomes a Lender under this Agreement (and from time to time
thereafter, as may be necessary in the determination of Borrowers or
Administrative Agent, each in the reasonable exercise of its
discretion), whichever of the following is applicable:
(1) properly completed and duly executed copies of
Internal Revenue Service Form W-8BEN claiming eligibility for
benefits of an income tax treaty to which the United States is
a party,
(2) properly completed and duly executed copies of
Internal Revenue Service Form W-8ECI,
(3) in the case of a Foreign Lender claiming the
benefits of the exemption "portfolio interest" under Section
881(c) of the Internal Revenue Code, (A) a duly executed
certificate to the effect that such Foreign Lender is not (i)
a "bank" within the meaning of Section 881(c)(3)(A) of the
Internal Revenue Code, (ii) a ten-percent shareholder (within
the meaning of Section 881(c)(3)(B) of the Internal Revenue
Code) of Borrowers or (iii) a controlled foreign corporation
described in Section 881(c)(3)(C) of the Internal Revenue Code
and (B) properly completed and duly executed copies of
Internal Revenue Service Form W-8BEN.
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(4) properly completed and duly executed copies of any
other form prescribed by applicable law as a basis for
claiming exemption from or a reduction in any Tax,
in each case together with such supplementary documentation as may
be prescribed by applicable law to permit Borrowers and
Administrative Agent to determine the withholding or deduction
required to be made, if any;
(d) without limiting the generality of the foregoing, in the
event that Borrowers are resident for tax purposes in the United
States, any Foreign Lender that does not act or ceases to act for
its own account with respect to any portion of any sums paid or
payable to such Lender under any of the Loan Documents (for example,
in the case of a typical participation by such Lender) shall deliver
to Administrative Agent and Borrowers (in such number of copies as
shall be requested by the recipient), on or prior to the date such
Foreign Lender becomes a Lender, or on such later date when such
Foreign Lender ceases to act for its own account with respect to any
portion of any such sums paid or payable, and from time to time
thereafter, as may be necessary in the determination of Borrowers or
Administrative Agent (each in the reasonable exercise of its
discretion):
(1) duly executed and properly completed copies of the
forms and statements required to be provided by such Foreign
Lender under clause (c) of subsection 2.7B(iv), to establish
the portion of any such sums paid or payable with respect to
which such Lender acts for its own account and may be entitled
to an exemption from or a reduction of the applicable Tax, and
(2) duly executed and properly completed copies of
Internal Revenue Service Form W-8IMY (or any successor forms)
properly completed and duly executed by such Foreign Lender,
together with any information, if any, such Foreign Lender
chooses to transmit with such form, and any other certificate
or statement of exemption required under the Internal Revenue
Code or the regulations thereunder, to establish that such
Foreign Lender is not acting for its own account with respect
to a portion of any such sums payable to such Foreign Lender;
(e) without limiting the generality of the foregoing, in the
event that Borrowers are resident for tax purposes in the United
States, any Lender that is not a Foreign Lender and has not
otherwise established to the reasonable satisfaction of Borrowers
and Administrative Agent that it is an exempt recipient (as defined
in section 6049(b)(4) of the Internal Revenue Code and the United
States Treasury Regulations thereunder) shall deliver to Borrowers
and Administrative Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such
Lender becomes a Lender under this Agreement (and from time to time
thereafter as prescribed by applicable law or upon the request of
Borrowers or Administrative Agent), duly executed and properly
completed copies of Internal Revenue Service Form W-9; and
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(f) without limiting the generality of the foregoing, each
Lender hereby agrees, from time to time after the initial delivery
by such Lender of such forms, whenever a lapse in time or change in
circumstances renders such forms, certificates or other evidence so
delivered obsolete or inaccurate in any material respect, that such
Lender shall promptly (1) deliver to Administrative Agent and
Borrowers two original copies of renewals, amendments or additional
or successor forms, properly completed and duly executed by such
Lender, together with any other certificate or statement of
exemption required in order to confirm or establish that such Lender
is an exemption from or reduction of any Tax with respect to
payments to such Lender under the Loan Documents and, if applicable,
that such Lender does not act for its own account with respect to
any portion of such payment, or (2) notify Administrative Agent and
Borrowers of its inability to deliver any such forms, certificates
or other evidence.
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
determined that Change in Law regarding capital adequacy, or any change therein
or in the interpretation or administration thereof by any Government Authority
charged with the interpretation or administration thereof, or compliance by any
Lender with any guideline, request or directive regarding capital adequacy
(whether or not having the force of law) of any such Government Authority, has
or would have the effect of reducing the rate of return on the capital of such
Lender or any corporation controlling such Lender as a consequence of, or with
reference to, such Lender's Revolving Loans or Commitments or Letters of Credit
or participations therein or other obligations hereunder with respect to the
Revolving Loans or the Letters of Credit to a level below that which such Lender
or such controlling corporation could have achieved but for such Change in Law
(taking into consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy), then from time to time, within
five Business Days after receipt by Company from such Lender of the statement
referred to in subsection 2.8A, Borrowers shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction.
2.8 STATEMENT OF LENDERS; OBLIGATION OF LENDERS AND ISSUING LENDER TO
MITIGATE.
A. STATEMENTS. Each Lender claiming compensation or reimbursement
pursuant to subsection 2.6D, 2.7 or 2.8B shall deliver to Company (with a copy
to Administrative Agent) a written statement, setting forth in reasonable detail
the basis of the calculation of such compensation or reimbursement, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
B. MITIGATION. Each Lender and Issuing Lender agrees that, as
promptly as practicable after the officer of such Lender or Issuing Lender
responsible for administering the Revolving Loans or Letters of Credit of such
Lender or Issuing Lender, as the case may be, becomes aware of the occurrence of
an event or the existence of a condition that would cause such Lender to become
an Affected Lender or that would entitle such Lender or Issuing Lender to
receive payments under subsection 2.7, use reasonable effort to make, issue,
fund or maintain the Commitments of such Lender or the Affected Loans or Letters
of Credit of such Lender or Issuing Lender through another lending or letter of
credit office of such Lender or Issuing Lender, if (i) as a result thereof the
circumstances which would cause such Lender to be an
62
Affected Lender would cease to exist or the additional amounts which would
otherwise be required to be paid to such Lender or Issuing Lender pursuant to
subsection 2.7 would be materially reduced and (ii) as determined by such Lender
or Issuing Lender in its sole discretion, such action would not otherwise be
disadvantageous to such Lender or Issuing Lender; provided that such Lender or
Issuing Lender will not be obligated to utilize such other lending or letter of
credit office pursuant to this subsection 2.8B unless Company agrees to pay all
incremental expenses incurred by such Lender or Issuing Lender as a result of
utilizing such other lending or letter of credit office as described above.
2.9 REPLACEMENT OF A LENDER.
Anything contained herein to the contrary notwithstanding, in the
event that any Lender (any such Lender being a "DEFAULTING LENDER") defaults (a
"FUNDING DEFAULT") in its obligation to fund its participation in any Revolving
Letter of Credit (a "DEFAULTED PARTICIPATION") or to fund any Revolving Loan (a
"DEFAULTED LOAN") in accordance with the terms of this Agreement, then (i)
during any Default Period (as defined below) with respect to such Defaulting
Lender, such Defaulting Lender shall not be deemed a "Lender" for purposes of
voting on any matters (including the granting of any consents or waivers) with
respect to any of the Loan Documents (provided, however, that nothing in this
clause (i) shall be construed as permitting, without the consent of the relevant
Defaulting Lender, a reduction in the principal amount of such Defaulting
Lender's funded Revolving Loans or other outstanding funded Obligations, an
increase in the amount of such Lender's Revolving Commitment or participation in
any Letters of Credit, a reduction or postponement of the due date of any amount
funded by such Defaulting Lender and payable in respect of any Revolving Letter
of Credit, an extension of the expiration date of any Revolving Letter of Credit
beyond the Maturity Date, or an extension of the Commitment Termination Date),
(ii) to the extent permitted by applicable law, until such time as the Default
Excess (as defined below) with respect to such Defaulting Lender shall have been
reduced to zero, any payment of amounts with respect to the Revolving Loans and
any payment or reimbursement of amounts with respect to a drawing under a
Revolving Letter of Credit shall be applied first, to amounts funded by an
Agent, Issuing Lender or other Lenders (together with unpaid interest accrued
thereon) in lieu of such amounts required to be funded by Defaulting Lenders and
second, to the Revolving Loans or Revolving Letter of Credit participations, as
the case may be, of other Lenders (other than any other Defaulting Lenders) as
if such Defaulting Lender (and any other Defaulting Lenders) had no Revolving
Loans outstanding and the Loan Exposure of such Defaulting Lender were zero,
(iii) such Defaulting Lender's Revolving Commitment, Revolving Loans and Pro
Rata Shares with respect thereto shall be excluded for purposes of calculating
the commitment fee in respect of any day during any Default Period with respect
to such Defaulting Lender, such Defaulting Lender's Commitments, Revolving Loans
and Pro Rata Shares with respect thereto shall be excluded for purposes of
calculating the letter of credit fees under subsection 3.2 in respect of any day
during any Default Period with respect to such Defaulting Lender, and such
Defaulting Lender shall not be entitled to receive any such commitment fee or
letter of credit fee with respect to such Defaulting Lender's Commitments in
respect of any Default Period with respect to such Defaulting Lender, and (iv)
the Total Utilization of Revolving Commitments as at any date of determination
shall be calculated as if such Defaulting Lender had funded all Defaulted Loans
of such Defaulting Lender.
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For purposes of this Agreement, (I) "DEFAULT PERIOD" means, with
respect to any Defaulting Lender, the period commencing on the date of the
applicable Funding Default and ending on the earliest of the following dates:
(A) the date on which all Commitments are cancelled or terminated and/or the
Obligations are declared or become immediately due and payable, (B) the date on
which (1) the Default Excess with respect to such Defaulting Lender shall have
been reduced to zero (whether by the funding by such Defaulting Lender of any
Defaulted Loans or Defaulted Participations, as the case may be, of such
Defaulting Lender or by the non-pro rata application of any payments of amounts
with respect to the Revolving Loans or any payments or reimbursements of amounts
with respect to drawings under Letters of Credit in accordance with the terms
hereof or any combination thereof), and (2) such Defaulting Lender shall have
delivered to Company and Administrative Agent a written reaffirmation of its
intention to honor its obligations under this Agreement with respect to its
Commitments, and (C) the date on which Company, Agents and Issuing Lender waive
all Funding Defaults of such Defaulting Lender in writing, and (II) "DEFAULT
EXCESS" means, with respect to any Defaulting Lender, the excess, if any, of (x)
such Defaulting Lender's applicable Pro Rata Shares of the aggregate outstanding
principal amount of Revolving Loans of all Lenders and all funded participations
in Letters of Credit of Lenders (calculated as if all Defaulting Lenders (other
than such Defaulting Lender) had funded all of their respective Defaulted Loans
and Defaulted Participations) over (y) the aggregate outstanding principal
amount of Revolving Loans of such Defaulting Lender and the aggregate funded
amount of such Defaulting Lender's participations in Letters of Credit.
No Commitment of any Lender shall be increased or otherwise
affected, and, except as otherwise expressly provided in this subsection 2.9,
performance by any Borrower of its obligations under this Agreement and the
other Loan Documents shall not be excused or otherwise modified, as a result of
any Funding Default or the operation of this subsection 2.9. The rights and
remedies against a Defaulting Lender under this subsection 2.9 are in addition
to other rights and remedies that Borrowers may have against such Defaulting
Lender with respect to any Funding Default and that Agents, Issuing Lender or
any Lender may have against such Defaulting Lender with respect to any Funding
Default.
2.10 LIEN AND SUPERPRIORITY NATURE OF OBLIGATIONS.
All Obligations of Borrowers under the Loan Documents (including the
obligation to pay principal, interest, professional fees, costs, charges,
commissions and expenses) shall be paid as provided in the Loan Documents when
due, without defense, offset, reduction or counterclaim, and shall constitute
allowed claims to the full extent thereof against Borrowers arising under
Section 364(c)(1) of the Bankruptcy Code, with priority for such claims over any
and all administrative expenses (other than the Carve-Outs to the extent
provided herein) of the kind specified or ordered pursuant to any provision of
the Bankruptcy Code, including Sections 105, 326, 328, 330, 331, 503(b), 506(c),
507(a), 507(b) and 726, provided that the Liens and security interests securing
the Obligations shall exclude (1) any proceeds from Avoidance Actions, (2)
solely for purposes of the priming Liens securing the Obligations, the
Prepetition L/C Cash Collateral until the Prepetition Senior Lien securing the
Prepetition L/C Facility is released, and (3) the Borrowers' Capital Stock
issued by a Foreign Subsidiary that was unencumbered as of the Petition Date and
shall be subject only to: (i) unpaid professional fees and expenses incurred (x)
prior to the date of the delivery of a notice from any Agent or
64
Requisite Lenders to Borrowers of the occurrence of an Event of Default and
specifying that the limitation on professional fees and expenses referred to in
the following clause (ii) is in effect (such notice being the "CARVE-OUT
NOTICE") or (y) after the earlier of (1) such time as no Event of Default shall
be continuing and (2) such time as such Carve-Out Notice shall be rescinded in
writing by any Agent at the direction of Requisite Lenders in their sole
discretion, and which are allowed by the Bankruptcy Court in the Chapter 11
Cases (either on an interim or final basis), (ii) from and after the date of the
delivery of a Carve-Out Notice, professional fees and expenses allowed by the
Bankruptcy Court in the Chapter 11 Cases in an aggregate amount (determined
without regard to fees and expenses incurred prior to the date of the delivery
of such Carve-Out Notice and which are at any time allowed by the Bankruptcy
Court either on an interim or final basis) not to exceed $1,500,000 (for any
period commencing at the time a Carve-Out Notice shall have been so delivered
and ending at the earlier of (1) such subsequent time as no Event of Default
shall be continuing and (2) such time as such Carve-Out Notice shall be
rescinded in writing by any Agent at the direction of Requisite Lenders in their
sole discretion), and (iii) fees payable to the Clerk of the Bankruptcy Court
and to the United States Trustee pursuant to 28 U.S.C. Section 1930(a)(6)
(collectively, the "CARVE-OUTS"); provided further, however, that in no event
shall there be paid from proceeds of the Revolving Loans any fees and expenses
incurred in challenging the liens or claims of the Prepetition Senior Lenders,
although, subject to the Carve-Outs, the professionals for any official
committee appointed in the Chapter 11 Cases pursuant to Section 1102 of the
Bankruptcy Code may be paid (to the extent allowed by the Bankruptcy Court) fees
and expenses incurred in analyzing such liens or claims in an amount not to
exceed $50,000. Subject to the Carve-Outs, the Obligations shall at all times be
senior to the rights of Borrowers, any trustee or examiner and any unsecured
claims of any creditor or other entity in this and any subsequent case under the
Bankruptcy Code. With the exception of the Carve-Outs, no cost or expense of
administration or any claims in this case, including those resulting from or
incurred after any conversion of this case pursuant to Section 1112 of the
Bankruptcy Code shall rank prior to, or on parity with, the claims of the
Lenders arising under this Agreement.
2.11 SINGLE LOAN
All Revolving Loans to Borrowers and all of the other Obligations of
Borrowers arising under this Agreement and the other Loan Documents shall
constitute one general obligation of Borrowers secured by all of the Collateral.
2.12 PERFECTION.
The security interests securing the Obligations shall be deemed
perfected without Administrative Agent, Collateral Agent or Lenders taking any
action whatsoever. Notwithstanding the foregoing, Borrowers agree, promptly upon
request by Collateral Agent, to take all actions reasonably requested by
Collateral Agent to reflect a First Priority Lien in all or any portion of the
Collateral.
2.13 JOINT AND SEVERAL LIABILITY; PAYMENT INDEMNIFICATIONS.
A. All Obligations of Borrowers under the Loan Documents shall be
the joint and several Obligations of each Borrower. The Obligations of and the
Liens granted by any such Borrower under the Loan Documents shall not be
impaired or released by any action or inaction
65
on the part of any Agent or any Lender with respect to any other Loan Party,
including any action or inaction which would otherwise release a surety.
B. In order to provide for just and equitable contribution
between the Borrowers if any payment is made by a Borrower (a "FUNDING
BORROWER") in discharging any of the Obligations, that Funding Borrower shall be
entitled to a contribution from the other Borrowers for all payments, damages
and expenses incurred by that Funding Borrower in discharging the Obligations,
in the manner and to the extent required to allocate liabilities in an equitable
manner among Borrowers on the basis of the relative benefits received by
Borrowers. If and to the extent that a Funding Borrower makes any payment to any
Lender or any other Person in respect of the Obligations, any claim which said
Funding Borrower may have against the other Borrower by reason thereof shall be
subject and subordinate to the prior Cash payment in full of the Obligations.
The parties hereto acknowledge that the right to contribution hereunder shall
constitute an asset of the party to which such contribution is owing.
Notwithstanding any of the foregoing to the contrary, such contribution
arrangements shall not limit in any manner the joint and several nature of the
Obligations, limit, release or otherwise impair any rights of any Agent or any
Lender under the Loan Documents, or alter, limit or impair the obligation of
each Borrower, which is absolute and unconditional, to repay the Obligations.
The obligation of any Borrower to make any contribution to another Borrower
under this subsection 2.13 shall be deemed an expense of administration of such
Borrower arising under Section 503(b) of the Bankruptcy Code and shall be junior
in priority to all Obligations of such Borrower under the Loan Documents.
SECTION 3. LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF
PARTICIPATIONS THEREIN.
A. LETTERS OF CREDIT. In addition to Borrowers requesting that
Lenders make Revolving Loans pursuant to subsection 2.1A(i) or 2.1A(ii),
Borrowers may request, in accordance with the provisions of this subsection 3.1,
from time to time during the period from the Closing Date to but excluding the
30th day prior to the Commitment Termination Date, that one or more Lenders
issue Revolving Letters of Credit for the account of Borrowers for the purposes
specified in the definition of Standby Letters of Credit and Commercial Letters
of Credit. Subject to the terms and conditions of this Agreement and in reliance
upon the representations and warranties of Borrowers herein set forth, any one
or more Lenders may, but (except as provided in subsection 3.1B(i)) shall not be
obligated to, issue such Revolving Letters of Credit in accordance with the
provisions of this subsection 3.1; provided that Borrowers shall not request
that any Lender issue (and no Lender shall issue):
(i) any Revolving Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Commitments would exceed the
least of (a) the aggregate Revolving Commitments, (b) the Borrowing Base
and (c) the amount of Revolving Loans and Revolving Letters of Credit
permitted to be outstanding hereunder pursuant to the Interim Borrowing
Order or Final Borrowing Order (as applicable), in each case as the
foregoing limits are in effect at such time;
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(ii) any Revolving Letter of Credit if, after giving effect to such
issuance, the Revolving Letter of Credit Usage (excluding therefrom the
Revolving Letter of Credit Usage, if any, with respect to the Prepetition
Scotia L/C) would exceed $5,000,000;
(iii) any Standby Letter of Credit having an expiration date later
than the earlier of (a) five Business Days prior to the Commitment
Termination Date and (b) the date which is one year after the date of
issuance of such Standby Letter of Credit; provided that the immediately
preceding clause (b) shall not prevent Issuing Lender from agreeing that a
Standby Letter of Credit will automatically be extended for one or more
successive periods not to exceed one year each unless such Issuing Lender
elects not to extend for any such additional period; and provided, further
that such Issuing Lender shall elect not to extend such Standby Letter of
Credit if it has knowledge that an Event of Default has occurred and is
continuing (and has not been waived in accordance with subsection 10.6) at
the time such Issuing Lender must elect whether or not to allow such
extension;
(iv) any Commercial Letter of Credit having an expiration date (a)
later than the earlier of (1) the date which is 30 days prior to the
Commitment Termination Date and (2) the date which is 180 days from the
date of issuance of such Commercial Letter of Credit or (b) that is
otherwise unacceptable to the applicable Issuing Lender in its reasonable
discretion;
(v) any Revolving Letter of Credit denominated in a currency other
than Dollars; or
(vi) any amendment or extension or replacement of the Prepetition
Scotia L/C, unless the maximum available amount thereunder and the other
terms of such amendment, extension or replacement are substantially
identical to the terms of the Prepetition Scotia L/C.
Notwithstanding anything to the contrary contained herein, on and as
of the Subsequent Funding Date upon giving effect to the increase in Revolving
Commitments contemplated under subsection 2.1A(ii) to occur on such date, (A)
the Prepetition Scotia L/C, in the amount thereof remaining after deducting from
the face amount thereof as of the Petition Date all drawings honored thereunder
prior to the Subsequent Funding Date, shall be deemed for all purposes hereunder
to be a Revolving Letter of Credit issued by Scotia Capital on such date, (B)
any existing participation of a Lender (in its capacity as a Prepetition Senior
Lender) in the Prepetition Scotia L/C shall terminate and be of no further force
and effect, (C) any rights or obligations of Lenders (in their capacity as
Prepetition Senior Lenders) to reimburse or participate in honored drawings
under, or to participate in payments made by Company or any of its Subsidiaries
with respect to, the Prepetition Scotia L/C under any of the Prepetition L/C
Facility shall be superseded by this Agreement, (D) any and all rights, titles,
claims (including "claims" within the meaning of Section 101(5) of the
Bankruptcy Code), interests, powers and privileges of the issuer of the
Prepetition Scotia L/C under the Prepetition Senior Credit Facilities shall be
deemed to have reverted back to the issuer of the Prepetition Scotia L/C and the
Prepetition Scotia L/C shall be deemed to be converted on such date to a
Revolving Letter of Credit under this Agreement, issued under this Agreement by
Scotia Capital as Issuing Lender,
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and (E) the Prepetition Senior Lien on any Prepetition L/C Cash Collateral that
is not applied on or prior to such date to reimburse drawings honored under the
Prepetition Scotia L/C shall be released, and such Prepetition L/C Cash
Collateral shall become Collateral for all purposes hereunder (and be deposited
into the Restricted Cash Account in accordance with subsection 6.13).
B. MECHANICS OF ISSUANCE.
(i) Request for Issuance of Revolving Letter of Credit. Except as
otherwise provided in subsection 3.1A regarding the Prepetition Scotia
L/C, whenever Borrowers desire the issuance of a Revolving Letter of
Credit, Company shall deliver to Administrative Agent a Request for
Issuance of Letter of Credit in the form of Exhibit IV annexed hereto no
later than 12:00 Noon (New York City time) at least three Business Days
(in the case of Standby Letters of Credit) or five Business Days (in the
case of Commercial Letters of Credit), or in each case such shorter period
as may be agreed to by the Issuing Lender in any particular instance, in
advance of the proposed date of issuance. The Issuing Lender, in its
reasonable discretion, may require changes in the text of the proposed
Revolving Letter of Credit or any documents described in or attached to
the Request for Issuance of Letter of Credit. In furtherance of the
provisions of subsection 10.8, and not in limitation thereof, Company may
submit Requests for Issuance of Letter of Credit by telefacsimile and
Administrative Agent and Issuing Lenders may rely and act upon any such
Request for Issuance of Letter of Credit without receiving an original
signed copy thereof. The only drawings permitted under Revolving Letters
of Credit shall be sight drawings.
(ii) Recertification. Company shall notify the applicable Issuing
Lender (and Administrative Agent, if Administrative Agent is not such
Issuing Lender) prior to the issuance of any Revolving Letter of Credit in
the event that any of the matters to which Borrowers are required to
certify in the applicable Request for Issuance is no longer true and
correct as of the proposed date of issuance of such Revolving Letter of
Credit, and upon the issuance of any Revolving Letter of Credit, Borrowers
shall be deemed to have re-certified, as of the date of such issuance, as
to the matters to which Borrowers are required to certify in the
applicable Request for Issuance.
(iii) Determination of Issuing Lender. Upon receipt by
Administrative Agent of a Request for Issuance of Letter of Credit
pursuant to subsection 3.1B(i) requesting the issuance of a Revolving
Letter of Credit, in the event Administrative Agent elects to issue such
Revolving Letter of Credit, Administrative Agent shall promptly so notify
Company, and Administrative Agent shall be the Issuing Lender with respect
thereto. In the event that Administrative Agent, in its sole discretion,
elects not to issue such Revolving Letter of Credit, Administrative Agent
shall promptly so notify Company, whereupon Company may request any other
Lender to issue such Revolving Letter of Credit by delivering to such
Lender a copy of the applicable Request for Issuance of Letter of Credit.
Any Lender so requested to issue such Revolving Letter of Credit shall
promptly notify Company and Administrative Agent whether or not, in its
sole discretion, it has elected to issue such Revolving Letter of Credit,
and any such Lender that so elects to issue such Revolving Letter of
Credit shall be the Issuing Lender with respect thereto.
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In the event that all other Lenders shall have declined to issue such
Revolving Letter of Credit, notwithstanding the prior election of
Administrative Agent not to issue such Revolving Letter of Credit,
Administrative Agent shall be obligated to issue such Revolving Letter of
Credit and shall be the Issuing Lender with respect thereto,
notwithstanding the fact that the Revolving Letter of Credit Usage with
respect to such Revolving Letter of Credit and with respect to all other
Revolving Letters of Credit issued by Administrative Agent, when
aggregated with Administrative Agent's outstanding Revolving Loans, may
exceed Administrative Agent's Revolving Commitment then in effect.
(iv) Issuance of Revolving Letter of Credit. Solely with respect to
Revolving Letters of Credit, upon satisfaction or waiver (in accordance
with subsection 10.6) of the conditions set forth in subsection 4.4, the
Issuing Lender shall issue the requested Revolving Letter of Credit in
accordance with the Issuing Lender's standard operating procedures.
(v) Notification to Lenders. Promptly after the issuance of or
amendment of any Standby Letter of Credit, the Issuing Lender shall
promptly notify the Administrative Agent and Company, in writing, of such
issuance or amendment, and such notice must be accompanied by a copy of
such issuance or amendment. Promptly upon receipt of such notice, the
Administrative Agent shall notify each other Lender of such issuance or
amendment, and if so requested by a Lender, the Administrative Agent shall
furnish such Lender with a copy of such issuance or amendment. With
regards to Commercial Letters of Credit, Issuing Lender shall on the first
Business Day of each week furnish Administrative Agent (with a copy to
Company), by facsimile, with a report of the daily aggregate outstanding
Commercial Letters of Credit issued by such Issuing Lender. Upon receipt
of such report, Administrative Agent shall notify each Lender in writing
of the contents thereof.
C. LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT.
Immediately upon the issuance (or deemed issuance pursuant to subsection 3.1A)
of each Revolving Letter of Credit, each Lender shall be deemed to, and hereby
agrees to, have irrevocably purchased from the Issuing Lender thereof a
participation in such Revolving Letter of Credit and any drawings honored
thereunder in an amount equal to such Lender's Pro Rata Share (with respect to
Revolving Loan Exposure) of the maximum amount which is or at any time may
become available to be drawn thereunder. Each Borrower, with respect to the
Prepetition Scotia L/C, hereby (1) represents, warrants, agrees, covenants and
reaffirms that it has no (and it permanently and irrevocably waives and releases
Agents and Lenders from any, to the extent arising on or prior to the date of
issuance or deemed issuance with respect to the Prepetition Scotia L/C) defense,
set off, claim or counterclaim against any Agent or any Lender in regard to its
obligations in respect of any such participation in the Prepetition Scotia L/C
or any drawings honored thereunder, and (2) affirms its obligation to pay such
participations, and any amounts owed (whether or not then due and payable, and
including all interest and fees accrued under the Prepetition Senior Credit
Facilities to the date of issuance or deemed issuance hereunder with respect to
the Prepetition Scotia L/C) with respect to the Prepetition Scotia L/C in
accordance with the terms and conditions of this Agreement and the other Loan
Documents.
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3.2 LETTER OF CREDIT FEES.
Company agrees to pay (and Borrowers agree to be jointly and
severally liable with Company for) the following amounts with respect to Letters
of Credit issued hereunder:
(i) with respect to each Revolving Letter of Credit, (a) a
fronting fee, payable directly to the applicable Issuing Lender for its
own account, equal to the greater of (X) $500 and (Y) 0.25% per annum of
the daily amount available to be drawn under such Revolving Letter of
Credit and (b) a letter of credit fee, payable to Administrative Agent for
the account of Lenders, equal to the Eurodollar Rate Margin multiplied by
the daily amount available to be drawn under such Revolving Letter of
Credit, in each case payable in arrears on and to (but excluding) the 15th
of each month (or, if such date is not a Business Day, on the next
succeeding Business Day) of each year and computed on the basis of a
360-day year for the actual number of days elapsed; and
(ii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each payment of a drawing made thereunder (without
duplication of the fees payable under clauses (i) and (ii) above),
documentary and processing charges, payable directly to the applicable
Issuing Lender for its own account, in accordance with such Issuing
Lender's standard schedule for such charges in effect at the time of such
issuance, amendment, transfer or payment, as the case may be.
For purposes of calculating any fees payable under clause (i) of
this subsection 3.2, the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination. Promptly upon receipt by Administrative Agent of any amount
described in clause (i)(b) of this subsection 3.2, Administrative Agent shall
distribute to each Lender its Pro Rata Share of such amount.
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF CREDIT.
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. REIMBURSEMENT BY BORROWERS OF AMOUNTS PAID UNDER LETTERS OF
CREDIT. In the event Issuing Lender has determined to honor a drawing under a
Revolving Letter of Credit issued by it, such Issuing Lender shall immediately
notify Company and Administrative Agent, and Company shall (and Borrowers agree
to be jointly and severally liable with Company to) reimburse such Issuing
Lender on or before the Business Day immediately following the date on which
such drawing is honored (the "REIMBURSEMENT DATE") in an amount in Dollars and
in same day funds equal to the amount of such payment; provided that, amounts on
deposit in the Restricted Cash Account on the Reimbursement Date up to the
amount of such drawing shall be applied as reimbursement of such drawing prior
to reimbursement by Company in accordance with this subsection 3.3B and amounts
so reimbursed shall be deemed a reimbursement by Company; provided further, that
anything contained in this Agreement to the
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contrary notwithstanding, (i) (except with respect to the reimbursement of
Revolving Letters of Credit from Cash on deposit on the Restricted Cash Account,
as described in the previous proviso), unless Company shall have notified
Administrative Agent and Issuing Lender prior to 10:00 A.M. (New York City time)
on the date such drawing is honored that Company intends to reimburse such
Issuing Lender for the amount of such payment with funds other than the proceeds
of Revolving Loans, then Company shall be deemed to have given a timely Notice
of Borrowing to Administrative Agent requesting Lenders to make Revolving Loans
that are Base Rate Loans on the Reimbursement Date in an amount in Dollars equal
to the amount of such payment, and (ii) subject to satisfaction or waiver of the
conditions specified in subsection 4.3B, Lenders shall, on the Reimbursement
Date, make Revolving Loans that are Base Rate Loans in the applicable foregoing
amount, the proceeds of which shall be applied directly by Administrative Agent
to reimburse such Issuing Lender for the amount of such payment; and provided,
further that if for any reason proceeds of Revolving Loans are not received by
such Issuing Lender on the Reimbursement Date in an amount equal to the amount
of such payment, Company shall reimburse such Issuing Lender, on demand, in an
amount in same day funds equal to the excess of the amount of such payment over
the aggregate amount of such Revolving Loans, if any, which are so received.
Nothing in this subsection 3.3B shall be deemed to relieve any Lender from its
obligation to make Revolving Loans on the terms and conditions set forth in this
Agreement, and Borrowers shall retain any and all rights it may have against any
Lender resulting from the failure of such Lender to make such Revolving Loans
under this subsection 3.3B.
C. PAYMENT BY LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER LETTERS
OF CREDIT.
(i) Payment by Lenders. In the event that Company shall fail for
any reason to reimburse any Issuing Lender as provided in subsection 3.3B
in an amount equal to the amount of any payment by such Issuing Lender
under a Revolving Letter of Credit issued by it, such Issuing Lender shall
promptly notify Administrative Agent of the unreimbursed amount of such
drawing and upon receipt of such notice, Administrative Agent shall
promptly notify each Lender (other than such Issuing Lender) of such
unreimbursed amount and of such Lender's respective participation therein
based on such Lender's Pro Rata Share; provided that no Lender's funding
of its participation in any such drawing shall exceed its Pro Rata Share
of the amount of such drawing, and the aggregate principal amount of all
participations funded by a Lender with respect to Revolving Letters of
Credit shall in no event exceed the amount of such Lender's Revolving
Commitment minus the principal amount of such Lender's outstanding
Revolving Loans. Each Lender shall make available to such Issuing Lender
an amount equal to its respective participation, in Dollars and in same
day funds, at the office of such Issuing Lender specified in such notice,
not later than 12:00 Noon (New York City time) on the first Business Day
(under the laws of the jurisdiction in which such office of such Issuing
Lender is located) after the date notified by Administrative Agent. In the
event that any Lender fails to make available to such Issuing Lender on
such business day the amount of such Lender's participation in such Letter
of Credit as provided in this subsection 3.3C, such Issuing Lender shall
be entitled to recover such amount on demand from such Lender together
with interest thereon at the rate customarily used by such Issuing Lender
for the correction of errors among banks for three Business Days and
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thereafter at the Base Rate. Nothing in this subsection 3.3C shall be
deemed to prejudice the right of any Lender to recover from any Issuing
Lender any amounts made available by such Lender to such Issuing Lender
pursuant to this subsection 3.3C in the event that it is determined by the
final judgment of a court of competent jurisdiction that the payment with
respect to a Letter of Credit by such Issuing Lender in respect of which
payment was made by such Lender constituted gross negligence or willful
misconduct on the part of such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From
Company. In the event Issuing Lender shall have been reimbursed by other
Lenders pursuant to subsection 3.3C(i) for all or any portion of any
payment by such Issuing Lender under a Revolving Letter of Credit issued
by it, such Issuing Lender shall distribute to each other Lender that has
paid all amounts payable by it under subsection 3.3C(i) with respect to
such payment such other Lender's Pro Rata Share of all payments
subsequently received by such Issuing Lender from Company in reimbursement
of such payment under the Revolving Letter of Credit when such payments
are received. Any such distribution shall be made to a Lender at its
primary address set forth below its name on the appropriate signature page
hereof or at such other address as such Lender may request.
D. INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.
(i) Payment of Interest by Company. Company agrees to pay (and
Borrowers agree to be jointly and severally liable with Company) to each
Issuing Lender, with respect to payments under any Revolving Letters of
Credit issued by it, interest on the amount paid by such Issuing Lender in
respect of each such payment from the date a drawing is honored to but
excluding the date such amount is reimbursed by Company (including any
such reimbursement out of Cash on deposit in the Restricted Cash Account
or out of the proceeds of Revolving Loans pursuant to subsection 3.3B) at
a rate equal to (a) for the period from the date such drawing is honored
to but excluding the Reimbursement Date, the rate then in effect under
this Agreement with respect to Revolving Loans that are Base Rate Loans
and (b) thereafter, a rate which is 2% per annum in excess of the rate of
interest otherwise payable under this Agreement with respect to Revolving
Loans that are Base Rate Loans. Interest payable pursuant to this
subsection 3.3D(i)(a) shall be payable on demand or, if no demand is made,
on the date on which the related drawing under a Revolving Letter of
Credit is reimbursed in full.
Interest payable pursuant to this subsection 3.3D(i) shall be
computed on the basis of a 360-day year, for the actual number of days elapsed
in the period during which it accrues. All payments by Company in respect of
payments made by an Issuing Lender under a Letter of Credit issued by it shall
include payment of accrued interest on the principal amount being repaid or
prepaid, and all such payments shall be applied to the payment of interest
before application to principal.
(ii) Distribution of Interest Payments by Issuing Lender. Promptly
upon receipt by Issuing Lender of any payment of interest pursuant to
subsection 3.3D(i) with respect to a payment under a Letter of Credit
issued by it, (a) such Issuing Lender shall distribute to each other
Lender, out of the interest received by such Issuing Lender in
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respect of the period from the date such drawing is honored to but
excluding the date on which such Issuing Lender is reimbursed for the
amount of such payment (including any such reimbursement out of the
proceeds of Revolving Loans pursuant to subsection 3.3B), the amount that
such other Lender would have been entitled to receive in respect of the
letter of credit fee that would have been payable in respect of such
Letter of Credit for such period pursuant to subsection 3.2 if no drawing
had been honored under such Letter of Credit, and (b) in the event such
Issuing Lender shall have been reimbursed by other Lenders pursuant to
subsection 3.3C(i) for all or any portion of such payment, such Issuing
Lender shall distribute to each other Lender that has paid all amounts
payable by it under subsection 3.3C(i) with respect to such payment such
other Lender's Pro Rata Share of any interest received by such Issuing
Lender in respect of that portion of such payment so reimbursed by other
Lenders for the period from the date on which such Issuing Lender was so
reimbursed by other Lenders to but excluding the date on which such
portion of such payment is reimbursed by Company. Any such distribution
shall be made to a Lender at its primary address set forth below its name
on the appropriate signature page hereof or at such other address as such
Lender may request.
3.4 OBLIGATIONS ABSOLUTE.
The obligation of Company (and of Borrowers to be jointly and
severally liable with Company) to reimburse Issuing Lender for payments under
the Letters of Credit issued by it and to repay any Revolving Loans made by
Lenders pursuant to subsection 3.3B and the obligations of Lenders under
subsection 3.3C(i) shall be unconditional and irrevocable and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances
including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other right
which Borrowers or any Lender may have at any time against a beneficiary
or any transferee of any Letter of Credit (or any Persons for whom any
such transferee may be acting), Issuing Lender or other Lender or any
other Person or, in the case of a Lender, against Borrowers, whether in
connection with this Agreement, the transactions contemplated herein or
any unrelated transaction (including any underlying transaction between
Borrowers or one of their Restricted Subsidiaries and the beneficiary for
which any Letter of Credit was procured);
(iii) any draft 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 the applicable Issuing Lender under any Letter of
Credit against presentation of a draft or other document which does not
substantially comply with the terms of such Letter of Credit;
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(v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Borrowers or
any of their Restricted Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by
any party thereto;
(vii) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 INDEMNIFICATION; NATURE OF ISSUING LENDER' DUTIES.
A. INDEMNIFICATION. In addition to amounts payable as provided in
subsection 2.7, Borrowers hereby agree to protect, indemnify, pay and save
harmless Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of outside counsel and allocated costs of
internal counsel) which such Issuing Lender may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of Credit by
such Issuing Lender, other than as a result of (a) the gross negligence or
willful misconduct of such Issuing Lender as determined by a final judgment of a
court of competent jurisdiction or (b) subject to the following clause (ii), the
wrongful dishonor by such Issuing Lender of a proper demand for payment made
under any Letter of Credit issued by it or (ii) the failure of such Issuing
Lender to honor a drawing under any such Letter of Credit as a result of any act
or omission, whether rightful or wrongful, of any present or future de jure or
de facto Government Authority.
B. NATURE OF ISSUING LENDER'S DUTIES. As between Borrowers and
Issuing Lender, Borrowers assume all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by such Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical
74
terms; (vi) any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any such Letter of Credit or of the
proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter
of Credit of the proceeds of any drawing under such Letter of Credit; or (viii)
any consequences arising from causes beyond the control of such Issuing Lender,
including any act or omission by a Government Authority specified in subsection
3.5A, and none of the above shall affect or impair, or prevent the vesting of,
any of such Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by Issuing Lender under or in connection with the Letters of
Credit issued by it or any documents and certificates delivered thereunder, if
taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Borrowers.
Notwithstanding anything to the contrary contained in this Agreement
or any of the Collateral Documents, Borrowers shall retain any and all rights it
may have against Issuing Lender for any liability arising solely out of the
gross negligence or willful misconduct of such Issuing Lender, as determined by
a final judgment of a court of competent jurisdiction.
3.6 WITHDRAWALS FROM THE RESTRICTED CASH ACCOUNT.
Borrowers may make withdrawals from the Restricted Cash Account for
any purpose not prohibited by this Agreement, in any amount up to and including
the aggregate amount of funds in such Restricted Cash Account, provided that the
conditions of subsection 4.5 have been satisfied or waived by Requisite Lenders
at the time of any such withdrawal, and provided further, that amounts withdrawn
from the Restricted Cash Account shall be applied to first, repay outstanding
Revolving Loans and second, to repay unreimbursed drawings under Revolving
Letters of Credit, to the full extent thereof, prior to any application of such
amounts to any other purpose. Other purposes that amounts withdrawn from the
Restricted Cash Account may be applied to shall be limited to expenditures of a
type projected to occur in the Budget for such week, and no such application
shall be made if, after giving effect to such expenditure, Borrowers would not
be in compliance with subsection 7.6A as of the date on which the relevant
Withdrawal Date occurs. Whenever Borrowers desire to make a withdrawal from the
Restricted Cash Account they shall deliver to Administrative Agent a Notice of
Withdrawal no later than 10:00 a.m. (New York time) on the proposed Withdrawal
Date (which shall be a Business Day). In lieu of delivering a Notice of
Withdrawal, Borrowers may give Administrative Agent telephonic notice by the
required time of any proposed withdrawal under this subsection 3.6; provided
that such notice shall be promptly confirmed in writing by delivery of a Notice
of Withdrawal to Administrative Agent on or before the applicable Withdrawal
Date.
Neither Administrative Agent nor any Lender shall incur any
liability to any Borrower in acting upon any telephonic notice referred to above
that Administrative Agent believes in good faith to have been given by an
Officer of a Borrower or for otherwise acting in good faith under this
subsection 3.6.
Borrowers shall notify Administrative Agent prior to a withdrawal
from the Restricted Cash Account in the event that any of the matters to which
Borrowers are required to
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certify in the applicable Notice of Withdrawal is no longer true and correct as
of the applicable Withdrawal Date, and the withdrawal by Borrowers of funds from
the Restricted Cash Account shall constitute a re-certification by Borrowers, as
of the applicable Withdrawal Date, as to the matters to which Borrowers are
required to certify in the applicable Notice of Withdrawal.
Upon satisfaction or waiver of the conditions precedent specified in
subsection 4.5, Administrative Agent shall authorize the financial institution
where the Restricted Cash Account is maintained to make funds available on the
applicable Withdrawal Date by causing an amount of same day funds in Dollars
equal to the amount requested in the applicable Notice of Withdrawal to be
transferred from the Restricted Cash Account to be credited to such account of
Borrowers in the Cash Management System as Company shall specify.
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Revolving Loans and the issuance
of Letters of Credit hereunder are subject to the satisfaction of the following
conditions.
4.1 CONDITIONS TO BE SATISFIED ON THE CLOSING DATE.
The obligations of Lenders to make any Revolving Loans or issue any
Revolving Letters of Credit shall be subject to satisfaction of the following
conditions on or prior to the Closing Date:
A. LOAN PARTY DOCUMENTS. On or before the Closing Date, Company
shall, and shall cause each other Loan Party to, deliver to Lenders (or
Administrative Agent, with sufficient originally executed copies, where
appropriate, for each Lender) the following with respect to Company or such Loan
Party, as the case may be, each, unless otherwise noted, dated the Closing Date:
(i) Copies of the Organizational Documents of such Person,
certified by the Secretary of State of its jurisdiction of organization
or, if such document is of a type that may not be so certified, certified
by the secretary or similar officer of the applicable Loan Party, together
with a good standing certificate from the Secretary of State of its
jurisdiction of organization and each other state in which such Person is
qualified to do business and, to the extent generally available, a
certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing
authority of each of such jurisdictions, each dated a recent date prior to
the Closing Date;
(ii) Resolutions of the Governing Body of such Person approving and
authorizing the execution, delivery and performance of the Loan Documents
to which it is a party, certified as of the Closing Date by the secretary
or similar officer of such Person as being in full force and effect
without modification or amendment;
(iii) Signature and incumbency certificates of the officers of such
Person executing the Loan Documents to which it is a party;
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(iv) Executed originals of the Loan Documents to which such Person
is a party; and
(v) Such other documents as Administrative Agent may reasonably
request.
B. [INTENTIONALLY OMITTED.]
C. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
Company shall have delivered to Agents an Officer's Certificate, in form
and substance satisfactory to Agents, to the effect that the
representations and warranties in Section 5 are true, correct and complete
in all material respects on and as of the Closing Date to the same extent
as though made on and as of that date (or, to the extent such
representations and warranties specifically relate to an earlier date,
that such representations and warranties were true, correct and complete
in all material respects on and as of such earlier date) and that Company
shall have performed in all material respects all agreements and satisfied
all conditions which this Agreement provides shall be performed or
satisfied by it on or before the Closing Date except as otherwise
disclosed to and agreed to in writing by Agents; provided that, if a
representation and warranty, covenant or condition is qualified as to
materiality, the applicable materiality qualifier set forth above shall be
disregarded with respect to such representation and warranty, covenant or
condition for purposes of this condition.
D. INTERIM BORROWING ORDER.
(i) The Interim Borrowing Order shall have been entered by the
Bankruptcy Court, shall be in full force and effect and shall be unstayed
by the Bankruptcy Court or any other court of competent jurisdiction, and
Collateral Agent shall be satisfied that the Interim Borrowing Order shall
be binding on all material creditors of Borrowers and shall be effective
to provide the stay of actions, priorities, Liens and other protections
for Borrowers, Agents and the Lenders purported to be granted thereby.
(ii) All First Day Orders entered by the Bankruptcy Court shall be
in form and substance reasonably satisfactory to Agents (provided, that
such orders shall be deemed satisfactory to Agents so long as they are
substantially in the form delivered to Agents on or prior to October 8,
2004).
E. PLEADINGS. No pleading or application shall have been filed in
the Bankruptcy Court by any party in interest which is not withdrawn, dismissed
or denied within 15 days after filing seeking (i) to dismiss or convert any of
the Chapter 11 Cases to a Chapter 7 Case, (ii) the appointment of a Chapter 11
trustee in any of the Chapter 11 Cases, (iii) the appointment of an examiner
having enlarged powers relating to the operation of the business of Borrowers
(beyond those set forth under Section 1106(a)(3) and (4) of the Bankruptcy Code)
under Section 1106(b) of the Bankruptcy Code, (iv) the granting of a
super-priority claim or a Lien pari passu or senior to that of Collateral Agent
granted pursuant to the Collateral Documents or the Interim Borrowing Order, (v)
to stay, reverse, vacate, or otherwise modify the Interim Borrowing Order
without the prior written consent of Agents and Requisite Lenders, or (vi)
relief from the automatic stay (or any other injunction having similar effect)
so as to allow a third party to proceed against any material property or assets
of Borrowers.
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F. NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS; EXPIRATION
OF WAITING PERIODS, Etc. In addition to the orders of the Bankruptcy Court
referenced in subsection 4.1D, Company shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the transactions contemplated by the
Loan Documents and the continued operation of the business conducted by Company
and its Subsidiaries in substantially the same manner as conducted prior to the
Closing Date. Each such Governmental Authorization and consent shall be in full
force and effect, except in a case where the failure to obtain or maintain a
Governmental Authorization or consent, either individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect. All
applicable waiting periods shall have expired without any action being taken or
threatened by any competent authority that would restrain, prevent or otherwise
impose adverse conditions on the transactions contemplated by the Loan Documents
or the financing thereof. No action, request for stay, petition for review or
rehearing, reconsideration, or appeal with respect to any of the foregoing shall
be pending, and the time for any applicable Government Authority to take action
to set aside its consent on its own motion shall have expired.
G. EXPENSES AND FEES. Borrowers shall have paid to the applicable
Agent, for distribution (as appropriate) to Agents and Lenders, the fees payable
on the Closing Date referred to in subsection 2.3, such payment coming from the
proceeds of the Revolving Loans made hereunder. Company shall have paid to
Agents all of Agents' reasonable costs and expenses incurred in connection with
the consummation of the transactions contemplated hereby and shall have paid all
of the reasonable fees, costs and expenses of all of Agents' experts (including
Capstone Corporate Recovery LLC), consultants, auditors, appraisers, counsel and
other advisors, including without limitation the fees and expenses of Agents'
Counsel and the fees and expenses of Luskin, Stern & Eisler LLP, counsel to
Scotia Capital as agent under the Prepetition L/C Facility. Company shall have
paid retainers in the amount of $125,000 to each of Agents' Counsel and Capstone
Corporate Recovery LLC. Company shall have made an expense deposit with
Collateral Agent of $200,000 for Collateral Agent's expenses in retaining the
services of its consultants and auditors in connection with examinations and
appraisals related to the Borrowing Base.
H. MATTERS RELATING TO EXISTING OBLIGATIONS. Administrative Agent
shall have received an Officer's Certificate of Company stating that all
Indebtedness and Contingent Obligations constituting Prepetition Indebtedness
(and all amounts owing in respect thereof) of Borrowers and their Subsidiaries
as of the Petition Date, and all lease payments and employee retention plans as
of the Petition Date, are as set forth on Schedule 7.1 annexed hereto. The terms
and conditions of all of the foregoing shall be in form and in substance
satisfactory to Agents.
I. LITIGATION. There shall not be pending or threatened any
action, suit, investigation, litigation or proceeding in any court or before any
arbitrator or Government Authority (other than an investigation permitted under
the Interim Order or the Final Order that is initiated by any official committee
appointed in the Chapter 11 Cases pursuant to section 1102 of the Bankruptcy
Code) that could reasonably be expected to have a Material Adverse Effect .
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J. CASH MANAGEMENT SYSTEM. The cash management system of Company
and its Subsidiaries shall be as described on Schedule 4.1J annexed hereto,
except that such Cash Management System shall provide for daily transfers of
amounts on deposit in Borrowers' bank accounts and lockbox account(s) from
Borrowers' cash management system to the Restricted Cash Account, to be applied
to prepay outstanding Revolving Loans pursuant to subsection 2.4A(iii)(g) and to
reimburse Issuing Lenders for amounts drawn under Revolving Letters of Credit
pursuant to subsection 3.3B.
K. RETENTION ARRANGEMENTS. Borrowers shall have disclosed in
writing to Agents and Lenders the terms of any proposed bonus, retention,
severance and similar arrangements with respect to their respective officers,
employees, directors and advisors, which terms shall be satisfactory to Agents.
L. SECURITY INTERESTS IN PERSONAL AND MIXED PROPERTY. Collateral
Agent shall have received evidence satisfactory to it that Borrowers shall have
taken or caused to be taken all such actions, executed and delivered or caused
to be executed and delivered all such agreements, documents and instruments, and
made or caused to be made all such filings and recordings that may be, in the
opinion of Collateral Agent, desirable in order to reflect a security interest
in the entire personal, real and mixed property Collateral. Such actions shall
include delivery to Collateral Agent of UCC financing statements and, where
appropriate, fixture filings, duly executed (if required by applicable law) by
each applicable Loan Party with respect to all personal and mixed property
Collateral of such Loan Party, for filing in all jurisdictions as may be, in the
opinion of Collateral Agent, desirable to reflect the security interests created
in such Collateral pursuant to the Collateral Documents.
M. OPINIONS OF COUNSEL TO LOAN PARTIES. Lenders shall have
received originally executed copies of one or more favorable written opinions of
Foley & Lardner LLP, counsel for Loan Parties, in form and substance reasonably
satisfactory to Agents and their counsel, dated as of the Closing Date and
setting forth substantially the matters in the opinions designated in Exhibit IX
annexed hereto and as to such other matters as Agents acting on behalf of
Lenders may reasonably request (this Agreement constituting a written request by
Loan Parties to such counsel to deliver such opinions to Lenders).
N. COMPLETION OF PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by Agents,
acting on behalf of Lenders, and their counsel shall be satisfactory in form and
substance to Agents and such counsel, and Agents and such counsel shall have
received all such counterpart originals or certified copies of such documents as
Agents may reasonably request.
Notwithstanding anything herein to the contrary, it is understood
and agreed that documents and other items or actions set forth on Schedule 6.16
annexed hereto shall be delivered or completed after the Closing Date in
accordance with subsection 6.16 (regardless of whether such items or actions are
listed above).
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4.2 CONDITIONS TO INCREASE IN REVOLVING COMMITMENTS.
In addition to the conditions set forth in subsection 4.1 to be
satisfied on the Closing Date, the Incremental Commitment Effective Date shall
occur at the earliest time (so long as such time is prior to 5:00 p.m. (New York
City time) on the date that is 30 days after the date of entry by the Bankruptcy
Court of the Interim Borrowing Order) as all of the following further conditions
precedent have been satisfied:
A. FINAL BORROWING ORDER. The Final Borrowing Order shall have
been entered by the Bankruptcy Court, shall be in full force and effect and
shall be unstayed by the Bankruptcy Court or any other court of competent
jurisdiction, and each Agent and the Requisite Lenders shall be satisfied that
the Final Borrowing Order shall be binding on all material creditors of
Borrowers and shall be effective to provide the stay of actions, priorities,
Liens and other protections for Borrowers, Agents and the Lenders purported to
be granted thereby.
B. NO MATERIAL ADVERSE CHANGE. Each Agent shall be satisfied that
there has been no material adverse change since the Petition Date in the
business, assets, condition (financial or otherwise), operations, liabilities
(whether contractual, environmental or otherwise), projections or prospects of
Company and its Subsidiaries taken as a whole (other than the commencement of
the Chapter 11 Cases and increases in the cost of Raw Materials occurring prior
to the Closing Date and except as disclosed prior to the Closing Date in public
filings or in writing to the Prepetition Senior Lenders), and Company shall have
delivered to each Agent an Officer's Certificate to the foregoing effect.
C. BUDGET. Administrative Agent and Collateral Agent shall have
received from Borrowers (i) Borrowers' business plan for the Chapter 11 Cases,
in form and substance satisfactory to each such Agent in its sole discretion,
containing (a) projections setting forth, on a weekly basis, anticipated cash
receipts and disbursements for the 13-week period commencing on the Incremental
Commitment Effective Date, together with weekly projected utilization of
Revolving Loans and Revolving Letters of Credit, (b) projected monthly
statements of income and cash flows for each month ending after the Incremental
Commitment Effective Date and during the Budget Period, and (c) projected
balance sheets for Borrowers as at each such month's end, in each case together
with an explanation of the material assumptions on which such projections are
based, and (ii) a certificate from the chief financial officer of Company
certifying that the projections described in clause (i) are based upon good
faith estimates and assumptions believed by Company to be reasonable at the time
made.
D. [INTENTIONALLY DELETED.]
E. EVIDENCE OF INSURANCE. Collateral Agent shall have received a
certificate from Company's insurance broker or other evidence satisfactory to it
that all insurance required to be maintained pursuant to subsection 6.4 is in
full force and effect and that Collateral Agent on behalf of Lenders has been
named as additional insured and/or loss payee thereunder to the extent required
under subsection 6.4.
F. CONTROL AGREEMENTS. Collateral Agent shall have received
Control Agreements with financial institutions and other Persons in order to
perfect Liens in respect of
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Deposit Accounts, Securities Accounts and other Collateral pursuant to the
Collateral Documents.
G. MINIMUM EXCESS AVAILABILITY. Borrowers shall have delivered to
Agents and Lenders a Borrowing Base Certificate as of the date of the
Incremental Commitment Effective Date demonstrating that the Borrowing Base on
such date exceeds the Total Utilization of Revolving Commitments (after giving
effect to any Revolving Loans or Revolving Letters of Credit to be issued on
such date, minus the amount of any Cash Collateral on deposit in the Restricted
Cash Account after giving effect to payments on the Prepetition Scotia L/C
contemplated hereunder to occur on the Subsequent Funding Date) by more than
$25,000,000.
H. MORTGAGES. Collateral Agent shall have received from Borrowers
executed and notarized Mortgages in proper form for recording in all appropriate
places in all applicable jurisdictions, encumbering each Real Property Asset
listed in Schedule 4.2H annexed hereto (each, a "MORTGAGED PROPERTY" and,
collectively, the "MORTGAGED PROPERTIES").
I. SECURITY INTERESTS IN PERSONAL AND MIXED PROPERTY. Collateral
Agent shall have received evidence satisfactory to it that Borrowers shall have
taken or caused to be taken such actions, executed and delivered or caused to be
executed and delivered such agreements, documents and instruments, and made or
caused to be made such filings and recordings that may be, in the opinion of
Collateral Agent, desirable in order to reflect the security interests in
personal, real and mixed property Collateral created under the Collateral
Documents.
J. OPINIONS OF COUNSEL TO LOAN PARTIES. Lenders shall have
received originally executed copies of one or more favorable written opinions of
Foley & Lardner LLP and other of the Borrowers' counsel, as counsel for Loan
Parties, in form and substance reasonably satisfactory to Agents and Agents'
Counsel and its counsel, dated as of the Closing Date and setting forth
substantially the matters in the opinions designated in Exhibit IX annexed
hereto and as to such other matters as Agents acting on behalf of Lenders may
reasonably request (this Agreement constituting a written request by Loan
Parties to such counsel to deliver such opinions to Lenders).
K. COMPLETION OF PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by Agents,
acting on behalf of Lenders, and Agents' Counsel shall be satisfactory in form
and substance to Agents and Agents' Counsel, and Agents and such counsel shall
have received all such counterpart originals or certified copies of such
documents as Agents may reasonably request.
L. SUBSEQUENT FUNDING DATE. On or prior to the Incremental
Commitment Effective Date, the Subsequent Funding Date shall have occurred.
M. EXPENSES AND FEES. Borrowers shall have paid to Agents all of
Agents' reasonable costs and expenses as of such date incurred in connection
with the transactions contemplated hereby and shall have paid all of the
reasonable fees, costs and expenses of all of Agents' experts, consultants,
auditors, appraisers, counsel and other advisors, including without
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limitation the fees and expenses of Agents' Counsel and the fees and expenses of
Luskin, Stern & Eisler LLP, counsel to Scotia Capital as agent under the
Prepetition L/C Facility.
4.3 CONDITIONS TO LOANS.
In addition to the conditions set forth in subsection 4.1 (and, on
and after the Incremental Commitment Effective Date, subsection 4.2), the
obligations of Lenders to make Revolving Loans on each Funding Date are subject
to the following further conditions precedent:
A. Administrative Agent shall have received before that Funding
Date, (i) in accordance with the provisions of subsection 2.1B, an originally
executed Notice of Borrowing, in each case signed by a duly authorized Officer
of Borrowers, and (ii) a certificate executed by the chief financial officer of
each Borrower certifying to Administrative Agent (a) that such officer and
Borrowers believe on and as of such Funding Date that (1) the estimates
contained in the Budget would be good faith estimates if made on such date and
(2) the assumptions on which the Budget are based are reasonable on such date,
(b) that the proceeds of the Revolving Loans requested on such Funding Date
shall be applied for a purpose or purposes identified in the Budget, and (c)
that the aggregate Revolving Loans outstanding, after giving effect to the
Revolving Loans to be made on such Funding Date, shall not exceed the applicable
limitations thereon in subsection 7.6A.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in the
other Loan Documents shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as though made
on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and complete
in all material respects on and as of such earlier date; provided that
where a representation and warranty is already qualified as to
materiality, such materiality qualifier shall be disregarded for purposes
of this condition;
(ii) No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute an Event of Default or a Potential Event
of Default;
(iii) The Interim Borrowing Order and/or the Final Borrowing Order,
as applicable, shall be in full force and effect and shall be unstayed by
the Bankruptcy Court or any other court of competent jurisdiction;
(iv) Each Loan Party shall have performed in all material respects
all agreements and satisfied all conditions which this Agreement provides
shall be performed or satisfied by it on or before that Funding Date;
(v) No order, judgment or decree of any arbitrator, the Bankruptcy
Court or other Government Authority shall purport to enjoin or restrain
any Lender from making the Revolving Loans to be made by it on that
Funding Date;
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(vi) After the consummation of the borrowing contemplated by such
Notice of Borrowing, the Total Utilization of Revolving Commitments shall
not exceed the least of (a) the aggregate Revolving Commitments, (b) the
Borrowing Base and (c) the amount of Revolving Loans and Revolving Letters
of Credit permitted to be outstanding hereunder pursuant to the Interim
Borrowing Order or Final Borrowing Order (as applicable), in each case as
the foregoing limits are in effect at such time;
(vii) if such Funding Date occurs on or after December 31, 2004 (or
such later date as Lead Lenders shall agree upon), each Lead Lender shall
have notified Company in writing prior to December 31, 2004 (or such later
date as Lead Lenders shall agree upon) that it is satisfied, in its sole
discretion, with all Customer Agreements entered into by Borrowers with
all Major Customers;
(viii) No pleading or application shall have been filed in the
Bankruptcy Court (or any other court of competent jurisdiction) by any
party in interest which is not withdrawn, dismissed or denied within 55
days after filing seeking (a) to dismiss or convert any of the Chapter 11
Cases to a Chapter 7 case, (b) the appointment of a Chapter 11 trustee in
any of the Chapter 11 Cases, (c) the appointment of an examiner having
enlarged powers relating to the operation of the business of Borrowers
(beyond those set forth under Sections 1106(a)(3) and (4) of the
Bankruptcy Code) under Section 1106(b) of the Bankruptcy Code, (d) the
granting of a super-priority claim or a Lien pari passu or senior to that
of the Collateral Agent granted pursuant to the Collateral Documents, the
Interim Borrowing Order and/or the Final Borrowing Order, (e) to stay,
reverse, vacate, or otherwise modify the Interim Borrowing Order or the
Final Borrowing Order without the prior written consent of each Agent and
the Requisite Lenders, or (f) relief from the automatic stay (or any other
injunction having similar effect) so as to allow a third party to proceed
against any material property or assets of Borrowers; and
(ix) No Cash shall be on deposit in the Restricted Cash Account.
4.4 CONDITIONS TO REVOLVING LETTERS OF CREDIT.
In addition to the conditions set forth in subsection 4.1 (and,
after the Incremental Commitment Effective Date, subsection 4.2), the issuance
of any Revolving Letter of Credit hereunder is subject to the following
conditions precedent:
A. On or before the date of issuance of such Revolving Letter of
Credit, Administrative Agent shall have received (i) in accordance with the
provisions of subsection 3.1, an originally executed Request for Issuance of
Letter of Credit (or a facsimile copy thereof) in each case signed by a duly
authorized Officer of Company, together with all other information specified in
subsection 3.1, (ii) certification by Company demonstrating that, after the
issuance of such Revolving Letter of Credit, the aggregate Letter of Credit
Usage shall not exceed the applicable limitations thereon in subsection 7.6A,
and (iii) such other documents or information as the applicable Issuing Lender
may reasonably require in connection with the issuance of such Revolving Letter
of Credit.
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B. On the date of issuance of such Revolving Letter of Credit,
all conditions precedent described in subsection 4.3B (other than subsection
4.3B(ix)) shall be satisfied to the same extent as if the issuance of such
Revolving Letter of Credit were the making of a Revolving Loan and the date of
issuance of such Revolving Letter of Credit were a Funding Date.
4.5 CONDITIONS TO WITHDRAWALS FROM RESTRICTED CASH ACCOUNT.
The obligation of Administrative Agent to permit withdrawals by
Company from the Restricted Cash Account on any Withdrawal Date is subject to
the following conditions precedent:
A. Administrative Agent shall have received on that Withdrawal
Date, in accordance with the provisions of subsection 3.6, an originally
executed Notice of Withdrawal, in each case signed by a duly authorized Officer
of Borrowers.
B. As of that Withdrawal Date:
(i) The representations and warranties contained herein and in the
other Loan Documents shall be true, correct and complete in all material
respects on and as of that Withdrawal Date to the same extent as though
made on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and complete
in all material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would result
from the consummation of the withdrawal contemplated by such Notice of
Withdrawal that would constitute an Event of Default or a Potential Event
of Default;
(iii) The Interim Borrowing Order and/or the Final Borrowing Order,
as applicable, shall be in full force and effect and shall be unstayed by
the Bankruptcy Court or any other court of competent jurisdiction;
(iv) Each Loan Party shall have performed in all material respects
all agreements and satisfied all conditions which this Agreement provides
shall be performed or satisfied by it on or before that Withdrawal Date;
(v) No pleading or application shall have been filed in the
Bankruptcy Court (or any other court of competent jurisdiction) by any
party in interest which is not withdrawn, dismissed or denied within 55
days after filing seeking (a) to dismiss or convert any of the Chapter 11
Cases to a Chapter 7 case, (b) the appointment of a Chapter 11 trustee in
any of the Chapter 11 Cases, (c) the appointment of an examiner having
enlarged powers relating to the operation of the business of Borrowers
(beyond those set forth under Sections 1106(a)(3) and (4) of the
Bankruptcy Code) under Section 1106(b) of the Bankruptcy Code, (d) the
granting of a super-priority claim or a Lien pari passu or senior to that
of the Collateral Agent granted pursuant to the Collateral Documents, the
Interim Borrowing Order and/or the Final Borrowing Order, (e) to stay,
reverse, vacate, or otherwise modify the Interim Borrowing Order or the
Final Borrowing Order without the prior written consent of each Agent and
the Requisite Lenders, or
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(f) relief from the automatic stay (or any other injunction having similar
effect) so as to allow a third party to proceed against any material
property or assets of Borrowers; and
(vi) Company shall have delivered to Agents an Officer's
Certificate (together with such supporting calculations as Agents may
reasonably request) dated as of the Withdrawal Date certifying that, the
contemplated amounts proposed to be withdrawn are for purposes of a type
of expenditure projected to occur in the Budget for such week and after
giving effect to the contemplated application of amounts proposed to be
withdrawn from the Restricted Cash Account, Borrowers shall be in
compliance with the limitations thereon in subsection 7.6A.
Without limiting the generality of the provisions of Section 9
hereof, Borrowers, Agents and Lenders hereby agree that each Agent and each
Agent-Related Person, for purposes of Sections 2 through 4 hereof, (i) shall not
be deemed to have knowledge or notice of the occurrence of any Event of Default
or Potential Event of Default unless such Agent or Agent-Related Person shall
have received notice from a Lender, an Agent or a Borrower referring to this
Agreement, describing such Event of Default or Potential Event of Default and
stating that such notice is a "notice of default"; (ii) shall not be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Loan
Documents or as to the use of the proceeds of the Revolving Loans or amounts
withdrawn from the Restricted Cash Account or the use of the Revolving Letters
of Credit or as to the existence or possible existence of any Event of Default
or Potential Event of Default; and (iii) shall be entitled to rely, and shall be
fully protected in relying, upon any communication, instrument or document
delivered pursuant to subsection 4.1, 4.2, 4.3, 4.4 or 4.5 believed by it to be
genuine and correct and to have been signed or sent by the proper person or
persons.
SECTION 5. BORROWERS' REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make
the Revolving Loans, to induce Issuing Lender to issue Letters of Credit and to
induce Lenders to purchase participations therein, Borrowers' represent and
warrant to each Lender:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each of Company and its Subsidiaries
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization as specified in Schedule 5.1 annexed
hereto. Subject to compliance with any applicable provisions of the Bankruptcy
Code, each of Company and its Subsidiaries has all requisite power and authority
to own and operate its properties, to carry on its business as now conducted and
as proposed to be conducted, to enter into the Loan Documents to which it is a
party and to carry out the transactions contemplated thereby. Each Borrower is
in compliance with its Certificate of Incorporation, Bylaws and other
organizational, formation and governing documents and all applicable orders of
the Bankruptcy Court.
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B. QUALIFICATION AND GOOD STANDING. Each of Company and its
Subsidiaries is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, except in jurisdictions where the failure to be so
qualified or in good standing has not had and could not reasonably be expected
to result in a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Company and its Subsidiaries are engaged
only in the businesses permitted to be engaged in pursuant to subsection 7.11.
D. SUBSIDIARIES. All of the Subsidiaries of Company as of the
Closing Date and their jurisdictions of organization are identified in Schedule
5.1 annexed hereto. The Capital Stock of each of the Subsidiaries of Company
identified in Schedule 5.1 annexed hereto is duly authorized, validly issued,
fully paid and nonassessable and none of such Capital Stock constitutes Margin
Stock. Each of the Subsidiaries of Company identified in Schedule 5.1 annexed
hereto is a corporation duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of organization set forth therein,
has all requisite power and authority to own and operate its properties and to
carry on its business as now conducted and as proposed to be conducted, and is
qualified to do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, in each case except where failure to be so qualified or in good
standing or a lack of such power and authority has not had and could not
reasonably be expected to result in a Material Adverse Effect. Schedule 5.1
annexed hereto correctly sets forth, as of the Closing Date, the ownership
interest of Company and each of its Subsidiaries in each of the Subsidiaries of
Company identified therein.
5.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Loan Documents (i) have been duly authorized by all necessary
action on the part of each Loan Party that is a party thereto and (ii) have
been, or by the Closing Date will be, duly authorized by the Bankruptcy Court.
B. NO CONFLICT. The execution, delivery and performance by Loan
Parties of the Loan Documents to which they are parties and the consummation of
the transactions contemplated by the Loan Documents do not and will not (i)
violate any provision of any law or any governmental rule or regulation
applicable to Company or any of its Subsidiaries, the Organizational Documents
of Company or any of its Subsidiaries or any order, judgment or decree of the
Bankruptcy Court or other Government Authority binding on Company or any of its
Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under (x) any Contractual Obligation
of Company or any of its Subsidiaries or (y) any applicable order of the
Bankruptcy Court, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Company or any of its Subsidiaries
(other than any Liens created under any of the Loan Documents in favor of
Collateral Agent on behalf of Lenders), or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of Company or any of its Subsidiaries (performance or enforceability
of which has not been waived or excused by the Bankruptcy Code or an applicable
order of the Bankruptcy Court), except for such approvals or
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consents or any applicable order of the Bankruptcy Court (x) that will be
obtained or, with respect to any consents potentially required from the
Prepetition Senior Lenders, rendered unnecessary by Bankruptcy Court order on or
before the Closing Date and disclosed on Schedule 5.2 annexed hereto or (y) that
(other than with respect to any applicable order of the Bankruptcy Court) the
failure to obtain could not reasonably be expected to result in a Material
Adverse Effect.
C. GOVERNMENTAL CONSENTS. Except as set forth in Schedule 5.2,
the execution, delivery and performance by Loan Parties of the Loan Documents to
which they are parties and the consummation of the transactions contemplated by
the Loan Documents do not and will not require any Governmental Authorization,
except for any applicable order of the Bankruptcy Court.
D. BINDING OBLIGATION. Upon entry of the Interim Borrowing Order,
each of the Loan Documents has been duly executed and delivered by each Loan
Party that is a party thereto and is the legally valid and binding obligation of
such Loan Party, enforceable against such Loan Party in accordance with its
respective terms.
E. RESTRICTIONS ON TRANSFER. There are no restrictions on any
Borrower or any of its Subsidiaries which prohibit or otherwise restrict the
transfer of Cash or other assets from one to another, other than prohibitions or
restrictions existing under or by reason of (i) this Agreement and the other
Loan Documents, (ii) applicable law (including the Bankruptcy Code and any
applicable orders of the Bankruptcy Court), (iii) customary non-assignment
provisions entered into in the ordinary course of business and consistent with
past practices, and (iv) any documents or instruments governing the terms of any
Indebtedness or other obligations secured by Liens permitted by subsection 7.2
(each of which document or instrument is set forth on, and each of which
document and instrument is described on, Schedule 5.2E annexed hereto); provided
that (x) such prohibitions or restrictions apply only to the assets subject to
such Liens, and (y) the prohibitions or restrictions set forth in clauses (iii)
or (iv) only apply to the extent enforceable under the Bankruptcy Code and the
applicable orders of the Bankruptcy Court.
F. PRE-PETITION INDEBTEDNESS. Prepetition Indebtedness (and all
amounts owing in respect thereof) of any Borrower and its Subsidiaries as of the
Petition Date will be set forth on the Debtors' Schedule of Assets and
Liabilities filed with the Bankruptcy Court, as they may be amended in
accordance with the Bankruptcy Rules.
G. CHAPTER 11 CASES. The Chapter 11 Cases were commenced on the
Petition Date in accordance with applicable law and proper notice thereof and of
the hearing for the approval of each of the Interim Borrowing Order and Final
Borrowing Order has been given as identified in the respective Certificates of
Service filed with the Bankruptcy Court and, without limiting the foregoing, has
been given to third-party creditors to the extent required by applicable law.
5.3 FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders' request,
the financial statements and information described on Schedule 5.3 annexed
hereto. All such statements were
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prepared in conformity with GAAP and fairly present, in all material respects,
the financial position (on a consolidated basis) of the entities described in
such financial statements as at the respective dates thereof and the results of
operations and cash flows (on a consolidated basis) of the entities described
therein for each of the periods then ended, subject, in the case of any such
unaudited financial statements, to the absence of footnotes and changes
resulting from audit and normal year-end adjustments. Neither Company nor any of
its Subsidiaries has (and will not have following the funding of the initial
Revolving Loans) any Contingent Obligation, contingent liability or liability
for taxes, long-term lease or unusual forward or long-term commitment that, as
of the Closing Date, is not reflected in the foregoing financial statements or
the notes thereto and, as of any Funding Date subsequent to the Closing Date, is
not reflected in the most recent financial statements delivered to Lenders
pursuant to subsection 6.1 or the notes thereto and that, in any such case, is
material in relation to the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Company or any of its Subsidiaries.
5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Since the Petition Date, no event or change has occurred that has
resulted in or evidences, either in any case or in the aggregate, a Material
Adverse Effect other than the commencement of the Chapter 11 Cases and increases
in the cost of Raw Materials occurring prior to the Closing Date and the
occurrence of the events described in Schedule 5.4 annexed hereto. Neither
Company nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted by subsection 7.5.
5.5 TITLE TO PROPERTIES; LIENS; REAL PROPERTY; INTELLECTUAL PROPERTY.
A. TITLE TO PROPERTIES; LIENS. Company and its Subsidiaries have
(i) marketable, sufficient and legal title to (in the case of fee interests in
real property), (ii) valid leasehold interests in (in the case of leasehold
interests in real or personal property), or (iii) marketable title to (in the
case of all other personal property), all of their respective properties and
assets reflected in the financial statements referred to in subsection 5.3 or in
the most recent financial statements delivered pursuant to subsection 6.1, in
each case except for assets disposed of since the date of such financial
statements in the ordinary course of business or as otherwise permitted under
subsection 7.7. Except as permitted by this Agreement, all such properties and
assets are free and clear of Liens.
B. REAL PROPERTY. As of the Closing Date, Schedule 5.5B annexed
hereto contains a true, accurate and complete list of (i) all fee interests in
any Real Property Assets and (ii) all leases, subleases or assignments of leases
(together with all amendments, modifications, supplements, renewals or
extensions of any thereof) affecting each Real Property Asset, regardless of
whether a Loan Party is the landlord or tenant (whether directly or as an
assignee or successor in interest) under such lease, sublease or assignment.
Except as specified in Schedule 5.5B annexed hereto, each agreement listed in
clause (ii) of the immediately preceding sentence is in full force and effect
and Company does not have knowledge of any default that has occurred and is
continuing thereunder, and each such agreement constitutes the legally valid and
binding obligation of each applicable Loan Party, enforceable against such Loan
Party in accordance with its terms, except as enforcement may be limited by the
Chapter 11 Cases.
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C. INTELLECTUAL PROPERTY. As of the Closing Date, Company and its
Subsidiaries own or have the right to use, all Intellectual Property used in the
conduct of their business, except where the failure to own or have such right to
use in the aggregate could not reasonably be expected to result in a Material
Adverse Effect. No claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor does Company
know of any valid basis for any such claim, except for such claims that in the
aggregate could not reasonably be expected to result in a Material Adverse
Effect. The use of such Intellectual Property by Company and its Subsidiaries
does not infringe on the rights of any Person, except for such claims and
infringements that, in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect. All federal and state and all foreign
registrations of and applications for Intellectual Property, and all
unregistered Intellectual Property, that are owned or licensed by Company or any
of its Subsidiaries on the Closing Date are described on Schedule 5.5C annexed
hereto.
5.6 LITIGATION; ADVERSE FACTS.
Except as set forth in Schedule 5.6 annexed hereto, there are no
Proceedings (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity, or before or by any court or other Government
Authority (including any Environmental Claims) that are pending or, to the
knowledge of Company, threatened against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries and that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither Company nor any of its Subsidiaries (i) is in
violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, or (ii) is subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any court
or other Government Authority that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3 and to the extent
payment has been excused by the Bankruptcy Code or an applicable order of the
Bankruptcy Court, all tax returns and reports of Company and its Subsidiaries
required to be filed by any of them have been timely filed, and all taxes shown
on such tax returns to be due and payable and all assessments, fees and other
governmental charges upon Company and its Subsidiaries and upon their respective
properties, assets, income, businesses and franchises that are due and payable
have been paid when due and payable. Company knows of no proposed tax assessment
against Company or any of its Subsidiaries that is not being actively contested
by Company or such Subsidiary in good faith and by appropriate proceedings;
provided that such reserves or other appropriate provisions, if any, as shall be
required in conformity with GAAP shall have been made or provided therefor.
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5.8 PERFORMANCE OF AGREEMENTS; MATERIAL CONTRACTS.
A. Except as excused by the Bankruptcy Code or applicable order
of the Bankruptcy Court, neither Company nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, could not reasonably be expected
to result in a Material Adverse Effect.
B. Schedule 5.8 contains a true, correct and complete list of all
the Material Contracts in effect on the Closing Date. As of the Closing Date,
all such Material Contracts are in full force and effect and no material
defaults currently exist thereunder.
5.9 GOVERNMENTAL REGULATION.
Neither Company nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation (other than the Bankruptcy Code) which
may limit its ability to incur Indebtedness or which may otherwise render all or
any portion of the Obligations unenforceable.
5.10 SECURITIES ACTIVITIES.
A. Neither Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Revolving Loan,
not more than 25% of the value of the assets (either of Company only or of
Company and its Subsidiaries on a consolidated basis) subject to the provisions
of subsection 7.3 or 7.7 or subject to any restriction contained in any
agreement or instrument, between Company and any Lender or any Affiliate of any
Lender, relating to Indebtedness and within the scope of subsection 8.2, will be
Margin Stock.
5.11 EMPLOYEE BENEFIT PLANS.
A. Company, each of its Subsidiaries and each of their respective
ERISA Affiliates are in compliance with all applicable provisions and
requirements of ERISA and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all
their obligations under each Employee Benefit Plan. Each Employee Benefit Plan
that is intended to qualify under Section 401(a) of the Internal Revenue Code is
so qualified.
B. Except as set forth on Schedule 5.11B annexed hereto, no ERISA
Event has occurred or is reasonably expected to occur. With respect to the
payments identified on Schedule 5.11B, no final, nonappealable order has been
entered compelling the Company to make such payments.
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C. Except to the extent required under Section 4980B of the
Internal Revenue Code or except as set forth in Schedule 5.11C annexed hereto,
no Employee Benefit Plan provides health or welfare benefits (through the
purchase of insurance or otherwise) for any retired or former employee of
Company, any of its Subsidiaries or any of their respective ERISA Affiliates.
D. As of the date hereof and during the last two years, Company,
its Subsidiaries and their respective ERISA Affiliates have contributed to, or
had an obligation to contribute to, only one Multiemployer Plan (within the
meaning of Section 4203 of ERISA), and the annual contributions to such
Multiemployer Plan during the last five years have not exceeded $40,000.
E. As of the date hereof, Company and its Subsidiaries have made
full payment when due of all required contributions to any Foreign Plan.
5.12 CERTAIN FEES.
Except for fees payable to Lead Arranger and Agents with respect to
this Agreement, no broker's or finder's fee or commission will be payable with
respect to this Agreement or any of the transactions contemplated hereby, and
Company hereby indemnifies Lenders against, and agrees that it will hold Lenders
harmless from, any claim, demand or liability for any such broker's or finder's
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.
5.13 ENVIRONMENTAL PROTECTION.
Except as set forth in Schedule 5.13 annexed hereto:
(i) neither Company nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written
order, consent decree or settlement agreement with any Person relating to
(a) any Environmental Law, (b) any Environmental Claim, or (c) any
Hazardous Materials Activity that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect;
(ii) neither Company nor any of its Subsidiaries has received any
letter or request for information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section
9604) or any comparable state law, except as set forth on Schedule
5.13(ii) attached hereto;
(iii) there are and, to Company's knowledge, have been no
conditions, occurrences, or Hazardous Materials Activities that could
reasonably be expected to form the basis of an Environmental Claim against
Company or any of its Subsidiaries that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect;
(iv) neither Company nor any of its Subsidiaries nor, to Company's
knowledge, any predecessor of Company or any of its Subsidiaries has filed
any notice
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under any Environmental Law indicating past or present treatment of
Hazardous Materials at any Facility, and none of Company's or any of its
Subsidiaries' operations involves the generation, transportation,
treatment, storage or disposal of hazardous waste, as defined under 40
C.F.R. Parts 260-270 or any state equivalent;
(v) compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws would not,
individually or in the aggregate, be reasonably expected to result in a
Material Adverse Effect.
5.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected
to result in a Material Adverse Effect.
5.15 MATTERS RELATING TO COLLATERAL.
A. TITLE TO PROPERTIES; PERFECTION AND PRIORITY OF LIENS. Company
and its Subsidiaries have (i) marketable, sufficient and legal title to (in the
case of fee interests in real property), (ii) valid leasehold interests in (in
the case of leasehold interests in real or personal property), or (iii)
marketable title to (in the case of all other personal property), all of their
respective material properties and assets reflected in the financial statements
referred to in subsection 5.3 or in the most recent financial statements
delivered pursuant to subsection 6.1, in each case except for assets disposed of
since the date of such financial statements in the ordinary course of business
or as otherwise permitted under subsection 7.7. Except as permitted by this
Agreement, all such properties and assets are free and clear of Liens. The
provisions of the Collateral Documents, the Interim Borrowing Order and, upon
its effectiveness, the Final Borrowing Order are effective to create in favor of
Collateral Agent for the benefit of the Lenders a legal, valid, perfected,
nonavoidable and enforceable security interest in all right, title and interest
of the Loan Parties in the Collateral described therein (having the priority
provided for herein and in the Interim Borrowing Order and, upon its
effectiveness, the Final Borrowing Order).
(i) Pursuant to Section 364(c)(2) of the Bankruptcy Code and the
Interim Borrowing Order and, upon its effectiveness, the Final Borrowing
Order, the Obligations will be secured by a first priority perfected
senior Lien on all Collateral which is not subject to a valid, perfected,
non-voidable and enforceable Lien existing as of the Petition Date,
subject only to (a) prior to the Customer Program Approval Date, all
rights of setoff and recoupment existing as of the Petition Date in favor
of account debtors of Borrowers on Borrowers' accounts receivable, (b)
prior to the Subsequent Funding Date, the Lien of Scotia Capital under the
Prepetition L/C Facility on the Prepetition Scotia L/C Cash Collateral and
(c) the Carve-Outs.
(ii) Pursuant to Section 364(c)(3) of the Bankruptcy Code and the
Interim Borrowing Order and, upon its effectiveness, the Final Borrowing
Order, the Obligations will be secured by a perfected Lien on the
Collateral, subject and junior to (a) any valid,
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perfected, non-voidable and enforceable Liens (other than Prepetition
Senior Liens) existing as of the Petition Date and (b) the Carve-Outs.
(iii) Pursuant to Section 364(d) of the Bankruptcy Code and the
Interim Borrowing Order and, upon its effectiveness, the Final Borrowing
Order, the Obligations at all times will be secured by a first priority
perfected senior priming Lien on the Prepetition Senior Collateral granted
under the Prepetition Senior Loan Facility, but having priority over only
the Prepetition Senior Liens granted pursuant to the Prepetition Senior
Loan Facility, subject only to the Carve-Outs.
The execution and delivery of the Collateral Documents by Subsidiary
Guarantors, together with (x) the actions taken on or prior to the date hereof
pursuant to subsections 4.1L, 6.8 and 6.9 and (y) the delivery to Collateral
Agent of any Pledged Collateral of the Subsidiary Guarantors not delivered to
Collateral Agent at the time of execution and delivery of the applicable
Collateral Document (all of which Pledged Collateral has been so delivered) are
effective to create in favor of Collateral Agent, for the benefit of Lenders, a
Lien on all of the Collateral of the Subsidiary Guarantors (which Lien has
priority over any other Lien on such Collateral, subject to Permitted
Encumbrances and Liens permitted under subsection 7.2A), and all filings and
other actions necessary or desirable to maintain the perfection and such
priority of such Liens have been duly made or taken and remain in full force and
effect, other than the filing of any UCC financing statements delivered to
Collateral Agent for filing (but not yet filed) and the periodic filing of UCC
continuation statements in respect of UCC financing statements filed by or on
behalf of Collateral Agent.
B. GOVERNMENTAL AUTHORIZATIONS. Other than Court approval, no
authorization, approval or other action by, and no notice to or filing with, any
Government Authority is required for either (i) the pledge or grant by any Loan
Party of the Liens purported to be created in favor of Collateral Agent pursuant
to any of the Collateral Documents or (ii) the exercise by Collateral Agent of
any rights or remedies in respect of any Collateral (whether specifically
granted or created pursuant to any of the Collateral Documents or created or
provided for by applicable law), except for filings or recordings contemplated
by subsection 5.15A and except as may be required, in connection with the
disposition of any Pledged Collateral, by laws generally affecting the offering
and sale of securities.
C. ABSENCE OF THIRD-PARTY FILINGS. Except such as may be filed in
favor of Collateral Agent and to evidence Permitted Encumbrances, (i) no
effective UCC financing statement, fixture filing or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO.
D. MARGIN REGULATIONS. The pledge of the Pledged Collateral
pursuant to the Collateral Documents does not violate Regulation T, U or X of
the Board of Governors of the Federal Reserve System.
E. INFORMATION REGARDING COLLATERAL. All information supplied to
any Agent by or on behalf of any Loan Party with respect to any of the
Collateral (in each case taken
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as a whole with respect to any particular Collateral) is accurate and complete
in all material respects.
5.16 DISCLOSURE.
No representation or warranty of Company or any of its Subsidiaries
contained in any Loan Document or in any other document, certificate or written
statement furnished to Lenders by or on behalf of Company or any of its
Subsidiaries for use in connection with the transactions contemplated by this
Agreement contains any untrue statement of a material fact or omits to state a
material fact (known to Company, in the case of any document not furnished by
it) necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. Any
projections (including the Budget and any 13-Week Cash Forecast) and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by Company to be reasonable at the time made,
it being recognized by Lenders that such projections as to future events are not
to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ from the projected results. There are
no facts known (or which should upon the reasonable exercise of diligence be
known) to Company (other than matters of a general economic nature) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect and that have not been disclosed herein or in such other
documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.
5.17 PREPETITION SENIOR INDEBTEDNESS.
The Indebtedness and Contingent Obligations constituting Prepetition
Senior Indebtedness (and all amounts owing in respect thereof) of Loan Parties
as of the Closing Date are set forth on Schedule 5.17 annexed hereto. The
Prepetition Senior Obligations are secured by valid and enforceable first
priority liens and security interests granted by the applicable Loan Parties for
the benefit of the Prepetition Senior Lenders, upon all of the Prepetition
Senior Collateral, subject only to the Liens contemplated hereby and
encumbrances permitted under the terms of the Prepetition Senior Credit
Facilities. The Prepetition Senior Obligations and the liens and security
interests of the Prepetition Senior Lenders in the Prepetition Senior Collateral
are not subject to avoidance, defense, objection, action, counterclaim, setoff
or subordination of any kind whatsoever. The Prepetition Senior Obligations
constitute legal, valid and binding obligations of each Loan Party party to the
Prepetition Senior Credit Facilities, enforceable in accordance with the terms
of the Prepetition Senior Credit Facilities and pursuant to applicable law,
except as limited by general equitable principles (regardless whether such
enforceability is considered in a proceeding at law or in equity).
5.18 CASH MANAGEMENT SYSTEM.
The summary of Borrowers' Cash Management System attached hereto as
Schedule 4.1J is accurate and complete in all material respects as of the
Closing Date and does not omit to state any material fact necessary to make the
statements set forth therein not misleading. No Borrower owns any Deposit
Account or Securities Account which is not described in Schedule 4.1J. There has
been no change to the Cash Management System since the
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Closing Date except such changes as are required to satisfy subsection 4.1J and
have been disclosed to Lenders in writing and approved by Administrative Agent.
5.19 ORDERS.
On the date of the making of the initial Revolving Loans hereunder,
the Interim Borrowing Order will have been entered and shall be in full force
and effect and unstayed by the Bankruptcy Court or any other court of competent
jurisdiction. On the date of the making of any Revolving Loan, the Interim
Borrowing Order or the Final Borrowing Order, as the case may be, shall be in
full force and effect and unstayed by the Bankruptcy Court or any other court of
competent jurisdiction. Upon the Maturity Date (whether by acceleration or
otherwise) of any of the Obligations of Borrowers hereunder and under the other
Loan Documents, Lenders shall 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 subject to the notice procedures
set forth in the second paragraph of subsection 8.14B.
5.20 MATTERS RELATING TO LOAN PARTIES.
A. LOAN PARTIES. Neither Company nor any of its Subsidiaries owns
any interest in any Domestic Subsidiary (other than the Inactive Subsidiaries)
which is neither a Borrower nor a Subsidiary Guarantor.
B. DOMESTIC SUBSIDIARY ASSETS. Each Domestic Subsidiary which is
a Loan Party has granted a Lien in favor of Collateral Agent on substantially
all of its property pursuant to the Collateral Documents, the Interim Borrowing
Order or the Final Borrowing Order, except for such Subsidiary Guarantors (i)
which have granted a Lien permitted under subsection 7.2A on certain property to
secure Indebtedness permitted under subsection 7.1, or (ii) with respect to
which the grant of such a Lien would constitute a material violation of (a) a
valid and enforceable Contractual Obligation in favor of or for the benefit of a
Person other than Company or any of its Subsidiaries and their respective
Affiliates for which the required consents have not been obtained or (b)
applicable law affecting such Loan Party.
C. DOMESTIC SUBSIDIARY CAPITAL STOCK. The Capital Stock of each
Domestic Subsidiary which is directly owned by any Loan Party has been pledged
to Collateral Agent pursuant to the Collateral Documents, the Interim Borrowing
Order or the Final Borrowing Order, except for the Capital Stock of those
Domestic Subsidiaries (other than Loan Parties) (i) which is subject to a Lien
permitted under subsection 7.2A securing Indebtedness permitted under subsection
7.1, or (ii) the pledge of which would constitute a material violation of (a) a
valid and enforceable Contractual Obligation in favor of or for the benefit of a
Person other than Company or any of its Subsidiaries and their respective
Affiliates for which the required consents have not been obtained or (b)
applicable law affecting such Loan Party or such Domestic Subsidiary.
D. FOREIGN SUBSIDIARY CAPITAL STOCK. 65% of the Capital Stock of
each Foreign Subsidiary which is directly owned by Loan Parties (or such lesser
percentage as is owned by Loan Parties) has been pledged to Collateral Agent
pursuant to the Collateral Documents except for the Capital Stock of those
Foreign Subsidiaries the pledge of which would
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(X) give rise to material increased Tax liabilities to Company and its
Subsidiaries or (Y) constitute a material violation of (a) a valid and
enforceable (on a post-Petition Date basis) Contractual Obligation in favor of
or for the benefit of a Person other than Company or any of its Subsidiaries and
their respective Affiliates for which the required consents have not been
obtained or (b) applicable law affecting such Loan Party or such Foreign
Subsidiary.
E. INACTIVE SUBSIDIARIES. Neither of the Inactive Subsidiaries
has any material assets or other operations. Borrowers have commenced
dissolution proceedings for Transnational Indemnity Company.
5.21 FOREIGN ASSETS CONTROL REGULATIONS, ETC.
Neither the making of the Revolving Loans to, or issuance of Letters
of Credit on behalf of, Company or its Subsidiaries nor their use of the
proceeds thereof will violate the Trading with the Enemy Act, as amended, or any
of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto. Without limiting the foregoing,
neither Company nor any of its Subsidiaries and their Affiliates (a) is or will
become a Person whose property or interests in property are blocked pursuant to
Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism (66 Fed. Reg. 49079 (2001)) or (b) engages or will engage in any
dealings or transactions, or be otherwise associated, with any such Person.
Company and its Subsidiaries and Affiliates are in compliance, in all material
respects, with the Uniting And Strengthening America By Providing Appropriate
Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act of 2001).
5.22 INVENTORY AND ACCOUNTS.
Except as disclosed in the written information provided to Agents
and Lenders by Borrowers under subsection 6.12 or otherwise disclosed to Agents
in writing, with respect to all Inventory and Accounts:
(i) Collateral Agent may rely upon all statements, warranties, or
representations made in any Borrowing Base Certificate or other written
report regarding Inventory and Accounts delivered hereunder by Borrowers
in determining which items of Inventory or Accounts are to be deemed
Eligible Inventory or Eligible Accounts, as the case may be;
(ii) No Inventory or Account is subject to any Lien whatsoever,
except for Liens of Lenders under the Collateral Documents and other Liens
permitted hereunder;
(iii) Other than as set forth on Schedule 7.2 annexed hereto, no
Inventory has been consigned to any Person;
(iv) All Inventory has been produced in accordance with all
applicable requirements of the Federal Fair Labor Standards Act of 1938,
as amended and all rules, regulations and orders related thereto;
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(v) All Inventory has been and shall be used in Borrowers'
business and not for personal, family, household or farming use;
(vi) Each Eligible Account represents a valid and legally
enforceable indebtedness based upon an actual and bona fide sale and
delivery of goods or rendition of services in the ordinary course of
Borrowers' business which has been finally accepted by the Account Debtor
and for which the Account Debtor is unconditionally liable to make payment
of the amount stated in each invoice, document or instrument evidencing
the Eligible Account in accordance with the terms thereof, without offset,
defense or counterclaim and will be paid in full at maturity;
(vii) All statements made and all unpaid balances appearing in the
invoices, documents and instruments evidencing each Eligible Account are
true and correct in all material respects and are in all material respects
what they purport to be and, to the best of Borrowers' knowledge, all
signatures and endorsements that appear thereon are genuine and all
signatories and endorsers have full capacity to contract;
(viii) None of the transactions underlying or giving rise to any
Account violate any state or federal laws or regulations, and all
documents relating to the Accounts are legally sufficient under such laws
or regulations and are legally enforceable in accordance with their terms
and all recording, filing and other requirements of giving public notice
under any applicable law have been duly complied with; and
(ix) All sales, excise and similar taxes relating to Accounts of
Borrowers have been paid when due.
SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the
Revolving Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Company shall perform, and shall cause each of its Subsidiaries to
perform, all covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Company will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP. Company will deliver to Agents and Lenders:
(i) Events of Default, etc.: promptly upon any officer of Company
obtaining knowledge (a) of any condition or event that constitutes an
Event of Default or Potential Event of Default, or becoming aware that any
Lender has given any notice (other than to Agents) or taken any other
action with respect to a claimed Event of Default or Potential Event of
Default, (b) that any Person has given any notice to Company or any of its
Subsidiaries or taken any other action with respect to a claimed default
or event or condition of the type referred to in subsection 8.2, or (c) of
the occurrence of any event or
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change that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect, an Officer's Certificate specifying
the nature and period of existence of such condition, event or change, or
specifying the notice given or action taken by any such Person and the
nature of such claimed Event of Default, Potential Event of Default,
default, event or condition, and what action Company has taken, is taking
and proposes to take with respect thereto;
(ii) Monthly Financials: as soon as available and in any event
within 30 days after the end of each month, the consolidated and
consolidating balance sheets of Company and its Subsidiaries as at the end
of such fiscal period and the related consolidated and consolidating
statements of operations, and consolidated shareholders' equity and cash
flows of Company and its Subsidiaries for such fiscal period and for the
period from the beginning of the then current Fiscal Year to the end of
such fiscal period, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal
Year, all in reasonable detail and certified by the chief financial
officer of Company that they fairly present, in all material respects, the
financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal
year-end adjustments;
(iii) Year-End Financials: as soon as available and in any event
within 90 days after the end of each Fiscal Year, (a) the consolidated and
consolidating balance sheets of Company and its Subsidiaries as at the end
of such Fiscal Year and the related consolidated and consolidating
statements of operations, and consolidated shareholders' equity and cash
flows of Company and its Subsidiaries for such Fiscal Year, setting forth
in each case in comparative form the corresponding figures for the
previous Fiscal Year, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present, in all material
respects, the financial condition of Company and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated, (b) a narrative report describing the
operations of Company and its Subsidiaries in the form prepared for
presentation to senior management for such Fiscal Year, and (c) in the
case of such consolidated financial statements, a report thereon of Ernst
& Young LLP or other independent certified public accountants of
recognized national standing selected by Company and satisfactory to
Agents, which report shall state that such consolidated financial
statements fairly present, in all material respects, the consolidated
financial position of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated in conformity with GAAP applied on a basis consistent
with prior years (except as otherwise disclosed in such financial
statements) and that the examination by such accountants in connection
with such consolidated financial statements has been made in accordance
with generally accepted auditing standards;
(iv) Compliance Certificates: together with each delivery of
financial statements of Company and its Subsidiaries pursuant to
subdivisions (ii) and (iii) above, a Compliance Certificate (a) stating
that the signers have reviewed the terms of this Agreement and have made,
or caused to be made under their supervision, a review in reasonable
detail of the transactions and condition of Company and its Subsidiaries
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during the accounting period covered by such financial statements and that
such review has not disclosed the existence during or at the end of such
accounting period, and that the signers do not have knowledge of the
existence as at the date of such Compliance Certificate, of any condition
or event that constitutes an Event of Default or Potential Event of
Default, or, if any such condition or event existed or exists, specifying
the nature and period of existence thereof and what action Company has
taken, is taking and proposes to take with respect thereto and (b)
demonstrating compliance with subsection 7.6C in reasonable detail;
(v) Weekly Reports; 13-Week Cash Forecast Updates; Compliance
with Budget: no later than the close of business (New York City time) on
Tuesday of each week after the Closing Date, (a) a weekly statement of
actual cash receipts and expenditures for the week most recently ended,
certified by the chief financial officer of Company, together with a
reconciliation on a line-item basis (current through the previous Friday)
of actual cash receipts and disbursements for the immediately preceding
week against the Budget and against the 13-Week Cash Forecast then in
effect, demonstrating in reasonable detail compliance during such week (or
fiscal month, as the case may be) with the restrictions contained in
subsections 7.6A and 7.6B, and (b) an updated consolidated cash flow
forecast for Borrowers, in a form consistent with the 13 Week-Cash
Forecast contained in the Budget, with weekly anticipated cash receipts
and disbursements for the 13-week period commencing with the week
beginning most recently after the delivery of such forecast;
(vi) Accountants' Certification: together with each delivery of
consolidated financial statements of Company and its Subsidiaries pursuant
to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating that
their audit examination has included a review of the terms of this
Agreement and the other Loan Documents as they relate to accounting
matters, (b) stating whether, in connection with their audit examination,
any condition or event that constitutes an Event of Default or Potential
Event of Default has come to their attention and, if such a condition or
event has come to their attention, specifying the nature and period of
existence thereof; provided that such accountants shall not be liable by
reason of any failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the course of
their audit examination, and (c) stating that based on their audit
examination nothing has come to their attention that causes them to
believe either or both that the information contained in the certificates
delivered therewith pursuant to subdivision (iv) above is not correct or
that the matters set forth in the Compliance Certificates delivered
therewith pursuant to clause (b) of subdivision (iv) above for the
applicable Fiscal Year are not stated in accordance with the terms of this
Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to Company by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Company and its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management
in connection with their annual audit;
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(viii) SEC Filings and Press Releases: promptly upon their becoming
available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Company to its
security holders or by any Subsidiary of Company to its security holders
other than Company or another Subsidiary of Company, (b) all regular and
periodic reports and all registration statements (other than on Form S-8
or a similar form) and prospectuses, if any, filed by Company or any of
its Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory authority,
and (c) all press releases and other statements made available generally
by Company or any of its Subsidiaries to the public concerning material
developments in the business of Company or any of its Subsidiaries;
(ix) Litigation or Other Proceedings: (a) promptly upon any
Officer of Company obtaining knowledge of (1) the institution of, or
non-frivolous threat of, any Proceeding against or affecting Company or
any of its Subsidiaries or any property of Company or any of its
Subsidiaries not previously disclosed in writing by Company to Lenders or
(2) any material development in any Proceeding that, in any case:
(x) if adversely determined, has a reasonable
possibility after giving effect to the coverage and policy
limits of insurance policies issued to Company and its
Subsidiaries of giving rise to a Material Adverse Effect; or
(y) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief
as a result of, the transactions contemplated hereby; and (b)
within twenty days after the end of each Fiscal Quarter, a
schedule of all Proceedings involving an alleged liability
of, or claims against or affecting, Company or any of its
Subsidiaries equal to or greater than $1,000,000, and
promptly after request by any Agent such other information as
may be reasonably requested by Agents to enable Agents and
Agents' Counsel to evaluate any of such Proceedings;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters;
(x) ERISA Events: promptly upon becoming aware of the occurrence
of or forthcoming occurrence of any ERISA Event, a written notice
specifying the nature thereof, what action Company, any of its
Subsidiaries or any of their respective ERISA Affiliates has taken, is
taking or proposes to take with respect thereto and, when known, any
action taken or threatened by the Internal Revenue Service, the Department
of Labor or the PBGC with respect thereto;
(xi) ERISA Notices: with reasonable promptness, copies of (a) all
notices received by Company, any of its Subsidiaries or any of their
respective ERISA Affiliates from a Multiemployer Plan sponsor concerning
an ERISA Event; and (b) copies of such other documents or governmental
reports or filings relating to any Employee Benefit Plan as either Agent
shall reasonably request;
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(xii) Insurance: as soon as practicable after any material change
in insurance coverage maintained by Company and its Subsidiaries notice
thereof to Agents specifying the changes and reasons therefor;
(xiii) Governing Body: with reasonable promptness, written notice of
any change in the Governing Body of Company;
(xiv) Material Contracts: promptly, and in any event within ten
Business Days after any Material Contract of Company or any of its
Subsidiaries is terminated or amended in a manner that is materially
adverse to Company or such Subsidiary, as the case may be, or any new
Material Contract is entered into, a written statement describing such
event with copies of such material amendments or new contracts, and an
explanation of any actions being taken with respect thereto;
(xv) Bankruptcy Information: promptly after the same is available,
Borrowers shall furnish or cause to be furnished to Agents' Counsel all
pleadings, motions, applications, judicial information, financial
information and other documents filed by or on behalf of Borrowers with
the Bankruptcy Court or the United States Trustee in the Chapter 11 Cases
or distributed by or on behalf of Borrowers to any official committee
appointed in the Chapter 11 Cases (except to the extent subject to
confidentiality agreement) and, without limiting the generality of the
foregoing, Borrowers shall promptly deliver to, and discuss with, Agents
and Agents' Counsel any and all information and developments in connection
with any proposed Asset Sale, including, without limitation, any letters
of intent, commitment letters or engagement letters received by Borrowers,
and any other event or condition which is reasonably likely to have a
material effect on Borrowers or the Chapter 11 Cases, including, without
limitation, the progress of any disclosure statement or any proposed
Chapter 11 plan of reorganization;
(xvi) Budget Updates: as soon as practicable but no later than the
Tuesday of the eleventh week after the Incremental Commitment Effective
Date and the Tuesday of each week that is an integral multiple of thirteen
weeks thereafter, (a) projections setting forth, on a weekly basis,
anticipated cash receipts and disbursements for the 13-week period
commencing with such week, together with the weekly projected utilization
of Revolving Loans and Revolving Letters of Credit, in a form consistent
with the 13 Week-Cash Forecast contained in the Budget prior to such date,
(b) projected monthly statements of income and cash flows for each month
ending during the remaining Budget Period, and (c) projected balance
sheets for Borrowers as at each such month's end, in each case together
with an explanation of the material assumptions on which such projections
are based, such forecast to be in form and substance reasonable acceptable
to Agents and, if within 3 Business Days after receipt by Lenders of such
cash forecast Requisite Lenders shall have notified Agents of objection
thereto, Requisite Lenders, and (d) a certificate from the chief financial
officer of Company certifying that the projections described in clauses
(a), (b) and (c) are based upon good faith estimates and assumptions
believed by Company to be reasonable at the time made;
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(xvii) Covenant Addendum: as soon as practicable after the Closing
Date but in any event no later than October 29, 2004, a fully completed
Covenant Addendum substantially in the form of Exhibit XIV annexed hereto,
setting forth proposed addbacks to Consolidated EBITDA and proposed
covenant levels for the covenants in subsections 7.6B and 7.8, which
levels shall be consistent with the projected receipts contained in the
periods covered by the Budget then in effect and which Covenant Addendum
shall otherwise be in substance acceptable to each Lead Lender in its sole
discretion;
(xviii) Exit Plan: as soon as practicable and in any event no later
than January 15, 2005, a plan of Borrowers for exiting the Chapter 11
Cases providing for payment in full in Cash of all Obligations on the
effective date of a plan of reorganization in the Chapter 11 Cases; and
(xix) Other Information: with reasonable promptness, such other
information and data with respect to Company or any of its Subsidiaries as
from time to time may be reasonably requested by any Lender.
6.2 EXISTENCE, ETC.
Except as permitted under subsection 7.7, Company will, and will
cause each of its Subsidiaries to, at all times preserve and keep in full force
and effect its existence in the jurisdiction of organization specified on
Schedule 5.1 and all rights and franchises material to its business; provided,
however that neither Company nor any of its Subsidiaries shall be required to
preserve any such right or franchise if the Governing Body of Company or such
Subsidiary shall determine that the preservation thereof is no longer desirable
in the conduct of the business of Company or such Subsidiary, as the case may
be, and that the loss thereof is not disadvantageous in any material respect to
Company, such Subsidiary or Lenders.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX.
A. Except as allowed by this Agreement or excused by the
Bankruptcy Code or an applicable order of the Bankruptcy Court, each Borrower
will, and will cause each of its Subsidiaries to, pay all taxes, assessments and
other governmental charges imposed upon it or any of its properties or assets or
in respect of any of its income, businesses or franchises before any penalty
accrues thereon, and all claims (including claims for labor, services, materials
and supplies) for sums that have become due and payable and that by law have or
may become a Lien upon any of its properties or assets, prior to the time when
any penalty or fine shall be incurred with respect thereto; provided that no
such tax, assessment, charge or claim need be paid if it is being contested in
good faith by appropriate proceedings promptly instituted and diligently
conducted, so long as such reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made therefor.
B. Borrowers will not, nor will any Borrower permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than Borrowers or any of its Subsidiaries).
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6.4 MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET INSURANCE/
CONDEMNATION PROCEEDS.
A. MAINTENANCE OF PROPERTIES. Company will, and will cause each of
its Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used or useful in the business of Company and its Subsidiaries (including all
Intellectual Property) and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof.
B. INSURANCE. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Collateral Agent shall be named
as loss payee and/or additional insured with respect to any policy of insurance
providing coverage in respect of the Collateral, and each provider of such
insurance policy shall agree, by endorsement upon the policy or policies issued
by it or by independent instruments furnished to Collateral Agent that it will
give Collateral Agent thirty (30) days prior written notice before any such
policy or policies shall be altered or cancelled.
C. APPLICATION OF NET INSURANCE/CONDEMNATION PROCEEDS.
(i) Business Interruption Insurance. Upon receipt by Company or any
of its Subsidiaries of any business interruption insurance proceeds
constituting Net Insurance/Condemnation Proceeds, (a) so long as no Event
of Default or Potential Event of Default shall have occurred and be
continuing, Company or such Subsidiary may retain and apply such Net
Insurance/Condemnation Proceeds for working capital purposes, and (b) if
an Event of Default or Potential Event of Default shall have occurred and
be continuing, Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to pay the Revolving Loans (and/or the
Revolving Commitments shall be reduced and/or Revolving Letters of Credit
shall be cash collateralized) as provided in subsection 2.4A;
(ii) Net Insurance/Condemnation Proceeds Received by Company.
Subject to Borrowers' right to reinvest, as set forth in subsection
2.4A(iii)(b), upon receipt by Company or any of its Subsidiaries of any
Net Insurance/Condemnation Proceeds other than from business interruption
insurance, Company shall, or shall cause one or more of its Subsidiaries
to, promptly and diligently apply such Net Insurance/Condemnation Proceeds
to pay or reimburse the costs of repairing, restoring or replacing the
assets in respect of which such Net Insurance/Condemnation Proceeds were
received or, to the extent not so applied, to prepay the Revolving Loans
(and/or the Revolving Commitments shall be reduced) and/or Revolving
Letters of Credit shall be cash collateralized as provided in subsection
2.4A.
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6.5 INSPECTION RIGHTS; LENDER MEETING.
A. INSPECTION RIGHTS. Company shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of Company or of any of its
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Company may, if it so chooses, be present at or participate in
any such discussion), all upon reasonable notice and at such reasonable times
during normal business hours and as often as may reasonably be requested or at
any time or from time to time following the occurrence and during the
continuation of an Event of Default.
B. LENDER MEETING. Company will, upon the request of either Agent or
Requisite Lenders, participate in a meeting or teleconference with either Agent
and Lenders to be held at Company's principal offices (or at such other location
as may be agreed to by Company and either Agent) at such time as may be agreed
to by Company and either Agent.
C. AUDIT OF INVENTORY AND ACCOUNTS RECEIVABLE; FIXED ASSET
APPRAISAL. Company shall, and shall cause each of its Subsidiaries to, permit
any auditors or appraisers designated by Agents to visit and inspect any of the
properties of Company or of any of its Subsidiaries, upon reasonable notice and
at reasonable times during normal business hours, in order to conduct audits of
the Inventory and Accounts Receivable and to prepare appraisals of the Fixed
Assets.
6.6 COMPLIANCE WITH LAWS, ETC.
Company shall comply, and shall cause each of its Subsidiaries to
comply, with the requirements of all applicable laws, rules, regulations and
orders of any Government Authority (including all Environmental Laws),
noncompliance with which could reasonably be expected to result in, individually
or in the aggregate, a Material Adverse Effect.
6.7 ENVIRONMENTAL MATTERS.
A. ENVIRONMENTAL DISCLOSURE. Company will deliver to Agents and
Lenders:
(i) Environmental Audits and Reports. As soon as practicable
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, Government Authorities or any other Persons, with
respect to significant environmental matters at any Facility that,
individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect or with respect to any Environmental Claims
that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect;
(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly
upon the occurrence thereof, written notice describing in reasonable
detail (a) any Release required to be reported to any federal, state or
local governmental or regulatory agency under any
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applicable Environmental Laws, (b) any remedial action taken by Company or
any other Person in response to (1) any Hazardous Materials Activities the
existence of which could reasonably be expected to result in one or more
Environmental Claims having, individually or in the aggregate, a Material
Adverse Effect, or (2) any Environmental Claims that, individually or in
the aggregate, could reasonably be expected to result in a Material
Adverse Effect, and (c) Company's discovery of any occurrence or condition
on any real property adjoining or in the vicinity of any Facility that
could cause such Facility or any part thereof to be subject to any
material restrictions on the ownership, occupancy, transferability or use
thereof under any Environmental Laws.
(iii) Written Communications Regarding Environmental Claims,
Releases, Etc. As soon as practicable following the sending or receipt
thereof by Company or any of its Subsidiaries, a copy of any and all
written communications with respect to (a) any Environmental Claims that,
individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect, (b) any Release required to be reported to
any Government Authority, and (c) any request for information from any
governmental agency that suggests such agency is investigating whether
Company or any of its Subsidiaries may be potentially responsible for any
Hazardous Materials Activity.
(iv) Notice of Certain Proposed Actions Having Environmental Impact.
Prompt written notice describing in reasonable detail (a) any proposed
acquisition of stock, assets, or property by Company or any of its
Subsidiaries that could reasonably be expected to (1) expose Company or
any of its Subsidiaries to, or result in, Environmental Claims that could
reasonably be expected to result in, individually or in the aggregate, a
Material Adverse Effect or (2) affect the ability of Company or any of its
Subsidiaries to maintain in full force and effect all material
Governmental Authorizations required under any Environmental Laws for
their respective operations and (b) any proposed action to be taken by
Company or any of its Subsidiaries to modify current operations in a
manner that could reasonably be expected to subject Company or any of its
Subsidiaries to any material additional obligations or requirements under
any Environmental Laws.
B. COMPANY'S ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES,
ENVIRONMENTAL CLAIMS AND VIOLATIONS OF ENVIRONMENTAL LAWS.
(i) Remedial Actions Relating to Hazardous Materials Activities.
Company shall, in compliance with all applicable Environmental Laws,
promptly undertake, and shall cause each of its Subsidiaries promptly to
undertake, any and all investigations, studies, sampling, testing,
abatement, cleanup, removal, remediation or other response actions
necessary to remove, remediate, clean up or abate any Hazardous Materials
Activity on, under or about any Facility that is in violation of any
Environmental Laws or that presents a material risk of giving rise to an
Environmental Claim.
(ii) Actions with Respect to Environmental Claims and Violations of
Environmental Laws. Company shall promptly take, and shall cause each of
its Subsidiaries promptly to take, any and all actions necessary to (i)
cure any violation of applicable Environmental Laws by Company or its
Subsidiaries that could reasonably be expected to result in, individually
or in the aggregate, a Material Adverse Effect and (ii)
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make an appropriate response to any Environmental Claim against Company or
any of its Subsidiaries and discharge any obligations it may have to any
Person thereunder where failure to do so could reasonably be expected to
result in, individually or in the aggregate, a Material Adverse Effect.
6.8 EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
DOCUMENTS AFTER THE CLOSING DATE.
A. EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
DOCUMENTS. In the event that any Person becomes a Domestic Subsidiary of Company
after the Closing Date, Company will promptly notify Agents of that fact and
cause such Domestic Subsidiary promptly (and in any event no later than the
Business Day after such Person becomes a Domestic Subsidiary) to execute and
deliver to Collateral Agent a counterpart of the Subsidiary Guaranty and
Security Agreement and to take all such further actions and execute all such
further documents and instruments as may be necessary or, in the opinion of
Collateral Agent, desirable to create in favor of Collateral Agent, for the
benefit of Lenders, a valid and perfected first priority security interest in
all of the personal and mixed property assets of such Domestic Subsidiary
described in the applicable forms of Collateral Documents, subject to any Liens
in existence on the date such Domestic Subsidiary becomes a Domestic Subsidiary
to the extent permitted under subsection 7.2A, provided that at the request of
Company in connection with sales of assets permitted under subsection 7.7,
Collateral Agent shall (without need for any further consent from any Lender or
Lenders) release any Liens on a Domestic Subsidiary's assets and/or release a
Domestic Subsidiary from the Subsidiary Guaranty or, in the case of a Person
that becomes a Domestic Subsidiary of Company in connection with such financing
or investment permitted hereunder, waive the requirement that such Domestic
Subsidiary execute and deliver to Collateral Agent a counterpart of the
Subsidiary Guaranty and Security Agreement, in each case solely to the extent
required by the terms of any such financings, investments or sales permitted
under the foregoing subsections of this Agreement.
B. SUBSIDIARY ORGANIZATIONAL DOCUMENTS, LEGAL OPINIONS, ETC. Company
shall deliver to Agents, together with the relevant Loan Documents, (i)
certified copies of Organizational Documents of each Domestic Subsidiary which
is becoming a Loan Party pursuant to subsection 6.8A or 6.8D, together with a
good standing certificate from the Secretary of State of the jurisdiction of
such Subsidiary's organization and each other state in which such Person is
qualified to do business and, to the extent generally available, a certificate
or other evidence of good standing as to payment of any applicable franchise or
similar taxes from the appropriate taxing authority of each of such
jurisdictions, each to be dated a recent date prior to their delivery to Agents,
(ii) a certificate executed by the secretary or similar officer of such
Subsidiary as to (a) the fact that the attached resolutions of the Governing
Body of such Subsidiary approving and authorizing the execution, delivery and
performance of such Loan Documents are in full force and effect and have not
been modified or amended and (b) the incumbency and signatures of the officers
of such Subsidiary executing such Loan Documents, and (iii) a favorable opinion
of counsel to such Subsidiary, in form and substance satisfactory to Agents and
their counsel, as to (a) the due organization and good standing of such
Subsidiary, (b) the due authorization, execution and delivery by such Subsidiary
of such Loan Documents, (c) the enforceability of such Loan Documents against
such Subsidiary and (d) such other matters (including matters relating to the
creation and perfection of Liens in any Collateral
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pursuant to such Loan Documents) as Agents may reasonably request, all of the
foregoing to be satisfactory in form and substance to Agents and their counsel.
C. FOREIGN PLEDGE AGREEMENTS. As soon as practicable (but not more
than 90 days, unless rendered impracticable by events or by action or inaction
of foreign Governmental Authorities in each case beyond the control of Borrowers
(as determined in the reasonable judgment of Collateral Agent)) after the
Closing Date (to the extent not completed on or prior to the Closing Date),
Borrowers shall cause foreign pledge agreements to be executed and delivered to
Collateral Agent with respect to 65% of the Capital Stock of all Foreign
Subsidiaries that are directly owned by any Borrower or Subsidiary Guarantor
(other than to the extent a pledge of such Capital Stock under the Collateral
Documents would constitute a material violation of (1) a valid Contractual
Obligation in favor of or for the benefit of a Person other than Company or any
of its Subsidiaries which is enforceable against the relevant Borrower or
Subsidiary Guarantor on a post-Petition Date basis and for which the required
consents have not been obtained or (2) applicable law affecting such Borrower,
such Subsidiary Guarantor or such Foreign Subsidiary), shall take all such other
actions under the laws of such jurisdictions as Collateral Agent may deem
necessary or advisable to perfect or otherwise protect the Liens purported to be
created in such Capital Stock under the Collateral Documents, and shall deliver
to Collateral Agent an opinion of counsel (which counsel shall be reasonably
satisfactory to Collateral Agent) under the laws of each jurisdiction in which
(i) any Loan Party holding stock of the relevant Foreign Subsidiary is organized
with respect to the due authorization, execution and delivery of such foreign
pledge agreement by such Loan Party, and (ii) such Foreign Subsidiary is
organized with respect to customary matters regarding enforceability, validity
and perfection of such pledge.
D. ADDITIONAL SUBSIDIARY BORROWERS. Borrowers shall (i) cause any
Domestic Subsidiary of any Borrower which commences a voluntary case under the
Bankruptcy Code to file the relevant petition for relief under the Bankruptcy
Code in the same venue as the Chapter 11 Cases, and shall promptly notify Agents
of such filing, (ii) apply to the Bankruptcy Court and otherwise use best
efforts to have any such voluntary case jointly administered with the Chapter 11
Cases, and (iii) cause any such Subsidiary promptly (and in any event no later
than one Business Day after such filing) to execute and deliver to Agents a
Borrowing Subsidiary Agreement and a counterpart of the Security Agreement (each
such Subsidiary being an "ADDITIONAL SUBSIDIARY BORROWER") and to take all such
further actions and execute all such further documents and instruments
(including actions, documents and instruments comparable to those described in
subsection 4.1L) as may be necessary or, in the opinion of Collateral Agent,
desirable to create in favor of Collateral Agent, for the benefit of Lenders, a
valid and perfected security interest in all of the personal and mixed property
assets of such Subsidiary described in the applicable forms of Collateral
Documents, with the same priority as set forth in the Interim Borrowing Order or
the Final Borrowing Order, as applicable, for the security interests granted by
the initial Borrowers hereunder. Upon delivery of such executed Borrowing
Subsidiary Agreement by the other Borrowers, notice of which is hereby waived by
Borrowers other than Company, and each of the other documents referred to in the
immediately preceding sentence, each such Additional Subsidiary Borrower shall
be a Borrower and shall be as fully a party hereto as if such Subsidiary were an
original signatory hereto as a Borrower. Each Borrower hereby expressly agrees
that its Obligations arising hereunder or under the other Loan
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Documents shall not be affected or diminished by the addition or release of any
Additional Subsidiary Borrower hereunder.
6.9 MATTERS RELATING TO ADDITIONAL REAL PROPERTY COLLATERAL.
From and after the Closing Date, in the event that (i) any Loan
Party acquires any fee interest in real property or any Material Leasehold
Property, or (ii) at the time any Person becomes a Loan Party after the Closing
Date, such Person owns or holds any fee interest in real property or any
Material Leasehold Property, such Loan Party shall, as soon as practicable after
such Person acquires such real property or Material Leasehold Property or
becomes a Subsidiary Guarantor, as the case may be, execute, acknowledge, file,
record, do and deliver all and any further acts, deeds, conveyances, mortgages,
hypothecations, pledges, charges, assignments, financing statements and
continuations thereof, notices of assignment, transfers, certificates,
assurances and other instruments, opinions, appraisals, title insurance and
environmental reports as Collateral Agent may reasonably request to perfect and
maintain the Liens created by the Collateral Documents, the Interim Borrowing
Order and the Final Borrowing Order, and to assure, convey, assign, transfer and
confirm unto Collateral Agent, for the benefit of the Lenders, the property and
rights thereby conveyed and assigned or intended to now or hereafter be conveyed
or assigned or that any Loan Party may be or may hereafter become bound to
convey or to assign to Collateral Agent.
6.10 FURTHER ASSURANCES.
A. ASSURANCES. Without expense or cost to any Agent or Lenders, each
Borrower shall from time to time hereafter execute, acknowledge, file, record,
do and deliver all and any further acts, deeds, conveyances, mortgages, deeds of
trust, deeds to secure debt, security agreements, hypothecations, pledges,
charges, assignments, financing statements and continuations thereof, notices of
assignment, transfers, certificates, assurances and other instruments as any
Agent may from time to time reasonably request and that do not involve a
material expansion of Borrowers' obligations or liabilities hereunder in order
to carry out more effectively the purposes of this Agreement, the other Loan
Documents, the Interim Borrowing Order or the Final Borrowing Order, including
to subject any Collateral, intended to now or hereafter be covered, to the Liens
created by the Collateral Documents, to perfect and maintain such Liens, and to
assure, convey, assign, transfer and confirm unto Collateral Agent the property
and rights thereby conveyed and assigned or intended to now or hereafter be
conveyed or assigned or that any Borrower may be or may hereafter become bound
to convey or to assign to Collateral Agent or for carrying out the intention of
or facilitating the performance of the terms of this Agreement, any other Loan
Documents, the Interim Borrowing Order or the Final Borrowing Order, registering
or recording this Agreement or any other Loan Document. Without limiting the
generality of the foregoing, Borrowers shall deliver to Collateral Agent,
promptly upon receipt thereof, all instruments received by Borrowers after the
Closing Date and take all actions and execute all documents necessary or
reasonably requested by Collateral Agent to perfect Collateral Agent's Liens in
any such instrument or any other Investment acquired by Borrowers.
B. FILING AND RECORDING OBLIGATIONS. Except as excused by the
Bankruptcy Code or applicable orders of the Bankruptcy Court, Borrowers shall
jointly and severally pay all
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filing, registration and recording fees and all expenses incident to the
execution and acknowledgement of any mortgage or other Loan Document, including
any instrument of further assurance described in subsection 6.9A, and shall pay
all mortgage recording taxes, transfer taxes, general intangibles taxes and
governmental stamp and other taxes, duties, imposts, assessments and charges
arising out of or in connection with the execution, delivery, filing, recording
or registration of any mortgage or other Loan Document, including any instrument
of further assurance described in subsection 6.10A, or by reason of its interest
in, or measured by amounts payable under, the mortgages or any other Loan
Document, including any instrument of further assurance described in subsection
6.10A, (excluding income, franchise and doing business taxes), and shall pay all
stamp taxes and other taxes required to be paid on any Loan Document; provided,
however, that such Borrower may contest in good faith and through appropriate
proceedings, any such taxes, duties, imposts, assessments and charges; provided
further, however, that such Borrower shall pay all such taxes, duties, imposts
and charges when due to the appropriate taxing authority during the pendency of
any such proceedings if required to do so to stay enforcement thereof. If any
Borrower fails to make any of the payments described in the preceding sentence
within ten (10) days after notice thereof from Administrative Agent (or such
shorter period as is necessary to protect the loss of or diminution in value of
any Collateral by reason of tax foreclosure or otherwise, as determined by
Administrative Agents) accompanied by documentation verifying the nature and
amount of such payments, either Agent may (but shall not be obligated to) pay
the amount due and Borrowers shall jointly and severally reimburse all amounts
in accordance with the terms hereof.
C. COSTS OF DEFENDING AND UPHOLDING THE LIEN. Collateral Agent may,
upon at least five (5) days' prior notice to Borrowers, (i) appear in and defend
any action or proceeding, in the name and on behalf of Collateral Agent, Lenders
or Company, in which Collateral Agent or any Lender is named or which Collateral
Agent in its sole discretion determines is reasonably likely to materially
adversely affect any mortgaged property, any other Collateral, any mortgage, the
Lien thereof or any other Loan Document and (ii) institute any action or
proceeding which Collateral Agent reasonably determines should be instituted to
protect the interest or rights of Collateral Agent and Lenders in any mortgaged
property or other Collateral or under this Agreement or any other Loan Document.
Borrowers jointly and severally agree that all reasonable costs and expenses
expended or otherwise incurred pursuant to this subsection (including reasonable
attorneys' fees and disbursements) by Collateral Agent shall be paid pursuant to
subsection 10.2 hereof.
6.11 CASH MANAGEMENT SYSTEM.
Company shall, and shall cause each of its Subsidiaries to, maintain
the Cash Management System as described in Schedule 4.1J, and Company shall not
open or close Deposit Accounts or Securities Accounts or make other changes to
the cash management systems without the written consent of each Agent. Borrowers
shall cause all Cash in the Cash Management System to be transferred on a daily
basis to the Restricted Cash Account.
6.12 BORROWING BASE AND INVENTORY REPORTS.
(i) Borrowing Base Certificates. Borrowers shall deliver a Borrowing
Base Certificate to Collateral Agent on the Closing Date, certifying the
Borrowing Base as of
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such date, to permit Collateral Agent to determine the Borrowing Base to
be in effect on the Closing Date. Thereafter Borrowers shall deliver
Borrowing Base Certificates on a weekly basis on Tuesday of each week,
with each such Borrowing Base Certificate dated and certifying the
Borrowing Base as of end of the immediately previous week. Promptly
following receipt of each such Borrowing Base Certificate, Collateral
Agent shall determine or, as the case may be, redetermine the Borrowing
Base in accordance with the definition thereof, using the information
contained in such Borrowing Base Certificate, and shall notify Borrowers
of the Borrowing Base so determined and so redetermined. Each such
Borrowing Base so determined or redetermined by Collateral Agent shall
remain in effect until notice of a redetermined Borrowing Base shall have
been given by Collateral Agent in accordance with the provisions of this
subsection 6.12.
(ii) Inventory Reports.
(a) Borrowers shall at all times hereafter maintain a perpetual
inventory (to the extent it is in effect as of the Petition Date) and
shall keep correct and accurate records itemizing and describing the kind,
type, quality and quantity of Inventory, Borrowers' cost therefor and
daily withdrawals therefrom and additions thereto, all of which records
shall be available during Borrowers' usual business hours upon reasonable
prior request of Collateral Agent.
(b) At such times as Collateral Agent may request, Borrowers shall
conduct a physical count of the Inventory for which a statistical sampling
will be sufficient, provided that such statistical sampling is consistent
with prior practice of Borrowers and performed in accordance with
generally accepted auditing standards, and promptly following such
physical Inventory shall supply Collateral Agent with a report in a form
and with such specificity as may be reasonably satisfactory to Collateral
Agent concerning such physical count of the Inventory.
(c) Upon Collateral Agent's request, at any time and from time to
time, Borrowers shall, at Borrowers' sole cost and expense, execute and
deliver to Collateral Agent written reports or appraisals of the Inventory
listing all items and categories thereof, describing the condition of same
and setting forth the value thereof (the lower of cost or market value of
the Inventory), in such form as is reasonably satisfactory to Collateral
Agent. Collateral Agent, in its reasonable discretion, and at Borrowers'
expense, may review or have an outside consultant selected by them review,
upon reasonable notice and at reasonable times, the quality and amount of
inventory.
(iii) Accounts.
(a) Borrowers shall, immediately upon obtaining knowledge thereof,
report to Collateral Agent all reclaimed, repossessed or returned goods
any account debtor claims and any other matter affecting the value,
enforceability or collectibility of Accounts, including any claim of
setoff or offset by any account debtor.
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(b) At Collateral Agent's request, any goods reclaimed or
repossessed by or returned to Borrowers will be set aside, marked with
Collateral Agent's name and held by Borrower for Collateral Agent's
account and subject to Collateral Agent's security interest.
(c) Borrowers shall pay all sales, excise or similar taxes relating
to Accounts when due.
6.13 PREPETITION L/C CASH COLLATERAL.
On the Subsequent Funding Date, Borrowers shall deposit all
Prepetition L/C Cash Collateral remaining after reimbursement to Scotia Capital
of all honored drawings under the Prepetition Scotia L/C into the Restricted
Cash Account. Borrowers shall use Cash in the Restricted Cash Account to repay
Revolving Loans pursuant to subsection 2.4A(iii)(g), to reimburse any Issuing
Lender for drawings honored under any Revolving Letters of Credit in accordance
with subsection 3.3B and, subject to the provisions of subsections 3.6 and 4.5,
for other purposes.
6.14 MATTERS RELATING TO BORROWERS' CUSTOMERS.
Borrowers shall cooperate and consult with Agents regarding the
material aspects of Borrowers' relationship with their customers. Without
limiting the generality of the foregoing:
A. Borrowers shall provide Agents with weekly updates regarding
negotiations with Borrowers' existing customers, including modifications to and
extensions of contracts with such customers, and updates on a monthly basis
regarding the operations of Company and its Subsidiaries;
B. With respect to a product supplied by any Borrower to a customer
under a contract with respect to which such customer has entered into a Customer
Agreement, Borrowers shall not enter into any amendment to such existing
contract or any new contract for such product with such customer unless such new
contract (or amended contract, as applicable) shall be subject to the terms of
such Customer Agreement; and
C. Borrowers shall provide such additional information as reasonably
requested by Agents with respect to Borrowers' customers.
6.15 ENVIRONMENTAL REPORTS.
Borrowers shall from time to time provide all available information
and reports that either Agent may request regarding environmental matters
relating to any Facility. Borrowers shall also provide, as soon as practicable
after request therefor by an Agent, such reports and information as such Agent
may reasonably request with respect to any Facility with respect to which such
Agent believes in good faith that material and adverse environmental issues
exist, including but not limited to, a Phase I environmental assessment for such
Facility which (i) conforms to the ASTM Standard Practice for Environmental Site
Assessments: Phase I Environmental Site Assessment Process, E 1527, (ii) was
conducted no more than six months
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prior to the date of request by one or more environmental consulting firms
reasonably satisfactory to such Agent and (iii) is accompanied by an estimate of
the reasonable worst-case cost of investigating and remediating any Hazardous
Materials Activity identified in such Phase I environmental assessments as
giving rise to an actual or potential material violation of any Environmental
Law or as presenting a material risk of giving rise to a material Environmental
Claim.
6.16 POST-CLOSING DELIVERIES.
Borrowers shall cause (i) any actions set forth on Schedule 6.16
annexed hereto to be taken and (ii) each document, certificate or other item set
forth on Schedule 6.16 to be delivered, in each case within the time period
specified on Schedule 6.16 and in form and substance satisfactory to Collateral
Agent.
SECTION 7. BORROWERS' NEGATIVE COVENANTS
Borrowers covenant and agree that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the
Revolving Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Borrowers shall perform, and shall cause each of its Subsidiaries to
perform, all covenants in this Section 7.
7.1 INDEBTEDNESS.
Each Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) Each Borrower may become and remain liable with respect to the
Obligations;
(ii) Each Borrower and its Subsidiaries may become and remain liable
with respect to Contingent Obligations permitted by subsection 7.4 and,
upon any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so extinguished;
(iii) Borrowers and their Subsidiaries may become and remain liable
with respect to Indebtedness (including in respect of Capital Leases)
incurred after the Closing Date, the proceeds of which are used to
purchase assets useful in Borrowers' business, so long as such
Indebtedness is unsecured except for Liens permitted under subsection
7.2A(iv) and the aggregate principal amount of such Indebtedness shall not
exceed $5,000,000 at any time outstanding;
(iv) (a) Each Borrower may become and remain liable with respect to
Indebtedness to any of its wholly-owned Subsidiaries; and any wholly-owned
Domestic Subsidiary of any Borrower may become and remain liable with
respect to Indebtedness to such Borrower or any other wholly-owned
Subsidiary of such Borrower, so long as (1) such Indebtedness shall be
unsecured, (2) such Indebtedness shall not be given
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administrative expense claim status by the Bankruptcy Court or any other
court of competent jurisdiction, and (3) all such intercompany
Indebtedness shall be evidenced by Intercompany Notes; and (b) after the
Incremental Commitment Effective Date, any Foreign Subsidiary may become
and remain liable with respect to Indebtedness to any Borrower or their
Subsidiaries, so long as (1) such Indebtedness shall be fully secured by
the assets of the Foreign Subsidiary, (2) such intercompany Indebtedness
shall be evidenced by Intercompany Notes, and (3) the aggregate amount of
Indebtedness for which all Foreign Subsidiaries are liable to any
Borrowers at any time shall not exceed $5,000,000;
(v) Each Borrower and its Subsidiaries may remain liable with
respect to Indebtedness existing on the Petition Date and identified on
Schedule 7.l attached hereto (without giving effect to any extensions,
renewals, refinancings, supplemental borrowings or other incurrences
thereof); and
(vi) Each Borrower and its Subsidiaries may become and remain liable
with respect to Indebtedness incurred in connection with the rejection of
unexpired leases and executory contracts in the Chapter 11 Cases; provided
that the obligations of any Borrower or any of its Subsidiaries in respect
of such Indebtedness shall be determined by the Bankruptcy Court order,
entered at the time of such rejection, to be a general, unsecured,
non-priority claim.
7.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Each Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur, assume
or permit to exist any Lien on or with respect to any property or asset of any
kind (including any document or instrument in respect of goods or accounts
receivable) of any Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC or under any similar recording or notice statute, or apply
to the Bankruptcy Court for the authority to do any of the foregoing, except:
(i) Permitted Encumbrances;
(ii) Liens created in favor of Collateral Agent (for the benefit of
Lenders) (a) pursuant to the Collateral Documents or (b) authorized by the
Interim Borrowing Order or the Borrowing Order;
(iii) Liens described in Section 2.9 annexed hereto and Liens
existing on the Petition Date described in Schedule 7.2 annexed hereto;
and
(iv) Liens securing Indebtedness permitted by subsection 7.1(iii),
so long as in each case the Liens securing such Indebtedness shall attach
only to the assets purchased with the proceeds of such Indebtedness.
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B. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR OTHER
SUBSIDIARIES. Company will not, and will not permit any of its Subsidiaries to,
create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such Subsidiary to
(i) pay dividends or make any other distributions on any of such Subsidiary's
Capital Stock owned by Company or any other Subsidiary of Company, (ii) repay or
prepay any Indebtedness owed by such Subsidiary to Company or any other
Subsidiary of Company, (iii) make loans or advances to Company or any other
Subsidiary of Company, or (iv) transfer any of its property or assets to Company
or any other Subsidiary of Company, except (a) as provided in this Agreement and
(b) as may be provided in an agreement with respect to an Asset Sale.
7.3 INVESTMENTS; ACQUISITIONS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, or acquire, by purchase or otherwise, all or substantially all
the business, property or fixed assets of, or Capital Stock or any asset or
ownership interest of any Person, or any division or line of business of any
Person except:
(i) Company and its Subsidiaries may make and own Investments in
Cash Equivalents;
(ii) Company and its Subsidiaries may make intercompany loans to the
extent permitted under subsection 7.1(iv);
(iii) Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 7.3 annexed hereto;
(iv) Company and its Subsidiaries may receive and hold promissory
notes and other non-cash consideration received in connection with any
sale of an asset permitted by subsection 7.7;
(v) Company and its Subsidiaries may acquire Securities in
connection with the satisfaction or enforcement of Indebtedness or claims
due or owing to Company or any of its Subsidiaries;
(vi) Company and its Subsidiaries may make and own other Investments
in accordance with the Budget; and
(vii) Company and its Subsidiaries may make and own Investments in
Joint Ventures after the Closing Date, provided that (a) the aggregate
amount of all Investments made as of any date in such Joint Ventures shall
not exceed the lesser of (x) $2,000,000 and (y) the aggregate amount of
Cash proceeds from Asset Sales permitted under subsection 7.7 remaining
after subtracting therefrom amounts required to be applied on or prior to
such date to prepay Loans or cash collateralize Letters of Credit pursuant
to subsection 2.4A(iii), and (b) Company and its Subsidiaries shall at no
time incur a Contractual Obligation to make an Investment in a Joint
Venture if, after giving
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effect to such Investment, the amount of all Investments made pursuant to
this subsection 7.3(vii) would exceed the amounts permitted under this
subsection.
7.4 CONTINGENT OBLIGATIONS.
Each Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) each Borrower may become and remain liable with respect to
Contingent Obligations in respect of the Obligations;
(ii) Any Borrower and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of any Indebtedness of
such Borrower or any of its Subsidiaries permitted by subsection 7.1; and
(iii) Each Borrower may remain liable with respect to Contingent
Obligations in existence on the date hereof as set forth on Schedule
7.4(iii) annexed hereto.
7.5 RESTRICTED JUNIOR PAYMENTS; PAYMENTS OF PREPETITION INDEBTEDNESS;
POST-PETITION DATE EXPENSES.
Borrowers shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, (1) declare, order, pay, make or set apart any sum
for any Restricted Junior Payment, (2) make any payment or prepayment on or
redemption or acquisition for value (including, without limitation, by way of
depositing with the trustee with respect thereto money or securities for the
purpose of paying when due) of any Prepetition Indebtedness or other
pre-Petition Date obligations of such Person, (3) pay any interest on any
Prepetition Indebtedness of such Person (whether in cash, in kind securities or
otherwise), or (4) make any payment or create or permit any Lien pursuant to any
provision of the Bankruptcy Code, or apply to the Bankruptcy Court for the
authority to do any of the foregoing; provided that, so long as no Event of
Default exists or is continuing, Borrowers may make:
(i) the following payments to Prepetition Senior Lenders and their
representatives under the Prepetition Senior Credit Facilities: (a)
monthly Cash payments of interest on the loans outstanding under the
Prepetition Senior Loan Facility and letter of credit fees with respect to
the letters of credit issued pursuant to the Prepetition L/C Facility and
(b) all fees, expenses, disbursements and other costs or liabilities of
any financial advisors, accountants, auditors, appraisers, attorneys and
other professionals retained by Prepetition Senior Agents (including,
without limitation, reasonable time-charges of in-house counsel and fees
and expenses of special counsel to Scotia Capital, as administrative agent
under the Prepetition Senior Loan Facility); provided that (1) such loans
outstanding under the Prepetition Senior Loan Facility shall bear
interest, and such letter of credit fees under the Prepetition L/C
Facility shall accrue, at a non-default rate (except as may be permitted
under the Interim Borrowing Order), (2) interest shall be calculated as if
each "Interest Period" (as defined in the Prepetition Senior Loan Facility
as in effect on the Petition Date) in effect on the Petition Date with
respect to loans outstanding under the Prepetition Senior Loan Facility
remains in effect until the end of such "Interest Period", (3) except as
described in clause (2), interest shall be calculated
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on loans outstanding under the Prepetition Senior Loan Facility in
accordance with section 3.03(a)(i) of the agreement referred to in clause
(i) of the definition of Prepetition Senior Loan Facility, and (4) letter
of credit fees shall be calculated on letters of credit outstanding under
the Prepetition Senior Loan Facility and the Prepetition L/C Facility in
accordance with section 3.05(b) of the agreement referred to in clause (i)
of the definition of Prepetition Senior Loan Facility and section 3.02 of
the agreement referred to in clause (i) of the definition of Prepetition
L/C Facility, respectively; provided further, that a portion of the
monthly interest payments on loans calculated in accordance with clause
(3) of the preceding proviso equal to 1.5% per annum on such loans shall
be paid-in-kind and shall not be payable in Cash until the effective date
of a plan of reorganization in the Chapter 11 Cases;
(ii) payments permitted under subsection 2.10;
(iii) payments of Prepetition Indebtedness or other pre-Petition
Date obligations pursuant to (a) First Day Orders and (b) other motions,
applications or stipulations approved by the Bankruptcy Court, each Agent
and Requisite Lenders;
(iv) payments by Subsidiaries that are not Loan Parties on
intercompany loans permitted under subsection 7.1(iv); and
(v) as specifically permitted by both Agents.
7.6 BUDGET COVENANTS.
A. BUDGET COVENANTS.
(i) Borrowers shall not make Cash disbursements or expenditures if
the aggregate amount of all such disbursements and expenditures made
during the period covered by the most recently approved Budget would
exceed the sum of (a) the aggregate Cash disbursements and expenditures
projected for all weeks in such Budget through the end of the week in
which such disbursement or expenditure occurs, plus (b) the lesser of (x)
$9,000,000 and (y) 15% of the amount described in clause (a).
(ii) On any date of determination, Borrowers shall not permit the
sum of (x) the aggregate amount of Revolving Loans outstanding, plus (y)
the Aggregate Utilized Cash Collateral Amount (the sum of clause(x) and
(y) on any date being the "LOAN/CASH USAGE AMOUNT"), plus (z) the maximum
available amount under all outstanding Revolving Letters of Credit, to
exceed, for each week covered by the most recently delivered Budget, the
sum of the amount of outstanding Revolving Loans projected in such Budget
for the week in which such date occurs, plus the amount of Letter of
Credit Usage projected in such Budget for such week, plus $5,000,000;
provided, however, that the maximum amount of Letter of Credit Usage
(excluding the Prepetition Scotia L/C) and Loan/Cash Usage Amount
permitted under this subsection 7.6A(ii) shall in no event exceed
$20,000,000 at any time prior to the Customer Program Approval Date.
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B. CUSTOMER AGREEMENT COVERAGE COVENANT. On any date of
determination after the Customer Program Approval Date, Borrowers shall not
permit gross sales (determined for the twelve month period most recently ended
prior to such date of determination) under customer contracts with respect to
which Customer Agreements have been entered into to account for less than an
amount equal to 75% of gross sales (determined for the twelve month period most
recently ended prior to the Customer Program Approval Date) under all customer
contracts of Borrowers.
C. MINIMUM CUMULATIVE MONTHLY EBITDA. As of the end of any month set
forth in the table entitled "Minimum Cumulative Monthly EBITDA" in the Covenant
Addendum, Borrowers shall not permit Consolidated EBITDA for the period
commencing October 1, 2004 and ending at the end of such month to be less than
the correlative amount indicated for such month in such table, which table is
incorporated herein by this reference.
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES.
Company shall not, and shall not permit any of its Subsidiaries to,
alter the corporate, capital or legal structure of Company or any of its
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor),
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets (including its
notes or receivables and Capital Stock of a Subsidiary, whether newly issued or
outstanding), whether now owned or hereafter acquired, except:
(i) Company and its Subsidiaries may sell or otherwise dispose of
assets in transactions that do not constitute Asset Sales; provided that
if the fair market value (or the consideration expected to be received by
Company) for such assets in such sale or disposition or series of related
sales or dispositions equals or exceeds $1,000,000, then such sale or
disposition must be conducted as an auction under Section 363 of the
Bankruptcy Code;
(ii) Company and its Subsidiaries may dispose of obsolete, worn out
or surplus property in the ordinary course of business; provided that if
the fair market value (or the consideration expected to be received by
Company) for such property in such sale or disposition or series of
related sales or dispositions equals or exceeds $1,000,000, then such sale
or disposition must be conducted as an auction under Section 363 of the
Bankruptcy Code;
(iii) in order to resolve disputes that occur in the ordinary course
of business, Company and its Subsidiaries may discount or otherwise
compromise for less than the face value thereof, notes or accounts
receivable;
(iv) Company and its Subsidiaries may make Asset Sales; provided
that (a) if the fair market value (or the consideration expected to be
received by Company) for the assets to be sold in such Asset Sale or
series of related Asset Sales equals or exceeds $1,000,000, then such
Asset Sale must be conducted as an auction under Section 363 of the
Bankruptcy Code, (b) not less than 90% of the consideration received
(other than any
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consideration consisting of the assumption of liabilities related to such
assets) in any such Asset Sale shall be Cash (it being agreed that Cash
the receipt of which may by the relevant terms of the Asset Sale be
deferred more than six months after the date of consummation of such Asset
Sale shall not be considered Cash for purposes of this clause (b), (c) the
Net Asset Sale Proceeds shall be applied as prepayments to the extent
required under subsection 2.4B(iii), and (d) (except in with respect to
the contemplated sale of the Columbus Machinery Plant in Midland,
Georgia), in the event that the Net Asset Sale Proceeds from any Asset
Sale, when added to the aggregate Net Asset Sale Proceeds from all other
Asset Sales after the Closing Date, would exceed $5,000,000, Company and
its Subsidiaries shall not be permitted to consummate such Asset Sale
without the prior written consent of Requisite Lenders; and
(v) any Inactive Subsidiary may be liquidated, wound up or
dissolved, provided, that no such transaction shall result in the obligee
or beneficiary of any Indebtedness, Contingent Obligation (other than the
Obligations) or other liability of such Inactive Subsidiary having greater
recourse to assets or Persons for the payment or collection of such
Indebtedness, Contingent Obligation or liability than such obligee or
beneficiary had immediately prior to such transaction.
7.8 CONSOLIDATED CAPITAL EXPENDITURES.
Borrowers shall not, and shall not permit their Domestic
Subsidiaries to, make or incur Consolidated Capital Expenditures, during the
period beginning October 1, 2004 and ending during any month set forth in the
table entitled "Consolidated Capital Expenditures" in the Covenant Addendum, in
an aggregate amount in excess of the correlative amount set forth for such month
in such table, which table is incorporated herein by this reference.
7.9 SALES AND LEASE-BACKS.
Except for the leases in existence prior to the Petition Date that
are described in Schedule 7.9 annexed hereto, Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, become or remain
liable as lessee or as a guarantor or other surety with respect to any lease,
whether an Operating Lease or a Capital Lease, of any property (whether real,
personal or mixed), whether now owned or hereafter acquired, (i) that Company or
any of its Subsidiaries has sold or transferred or is to sell or transfer to any
other Person (other than Company or any of its Subsidiaries) or (ii) that
Company or any of its Subsidiaries intends to use for substantially the same
purpose as any other property that has been or is to be sold or transferred by
Company or any of its Subsidiaries to any Person (other than Company or any of
its Subsidiaries) in connection with such lease.
7.10 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Company or with any Affiliate of Company or of any such holder, on terms that
are less favorable to Company or that Subsidiary, as the case may be, than those
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that might be obtained at the time from Persons who are not such a holder or
Affiliate; provided that the foregoing restriction shall not apply to (i) any
transaction between Company and any of its wholly-owned Subsidiaries or between
any of its wholly-owned Subsidiaries or (ii) reasonable and customary fees paid
to members of the Governing Bodies of Company and its Subsidiaries.
7.11 CONDUCT OF BUSINESS.
From and after the Closing Date, Company shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than (i) the
businesses engaged in by Company and its Subsidiaries on the Closing Date and
similar or related businesses and (ii) such other lines of business as may be
consented to by Agents and Requisite Lenders.
7.12 REMEDIES OF AGENTS.
Company shall not, and shall not permit any of its Subsidiaries to,
seek to obtain any stay on the exercise of the remedies available to either
Agent under this Agreement, except as provided in the Borrowing Orders.
7.13 FISCAL YEAR.
Company shall not change its Fiscal Year-end from December 31.
7.14 AMENDMENTS OF AGREEMENTS.
Borrowers shall not assume, reject, cancel, terminate, breach or
modify (whether pursuant to Section 365 of the Bankruptcy Code, or any other
applicable law), (i) any Pre-petition Indebtedness, (ii) any Material Contract
or (iii) any other agreement, contract, instrument or other document to which it
is a party which assumption, rejection, cancellation, termination, breach or
modification could reasonably be expected to result in a Material Adverse
Effect.
7.15 INACTIVE SUBSIDIARIES.
Borrowers shall not permit either Inactive Subsidiary to conduct any
operations or hold any material assets.
7.16 ERISA PLANS.
None of Company, its Subsidiaries nor its ERISA Affiliates shall (i)
amend or otherwise modify any Pension Plan to increase benefits thereunder, or
(ii) except for events scheduled in Schedule 5.11B and prudent decisions with
regard to investments of amounts in any Pension Plan, take any other action that
could reasonably be expected to increase the unfunded benefit liabilities
(within the meaning of Section 4001(a)(18) of ERISA) of any Pension Plan.
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SECTION 8. EVENTS OF DEFAULT
Notwithstanding the provisions of Section 362 of the Bankruptcy Code
and without application or motion to, or order from, the Bankruptcy Court, if
any of the following conditions or events ("EVENTS OF DEFAULT") shall occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal of or
interest on any Revolving Loan when due, whether at stated maturity, by
acceleration, by notice of voluntary prepayment, by mandatory prepayment or
otherwise; failure by Company to pay when due any amount payable to Issuing
Lender in reimbursement of any drawing under a Revolving Letter of Credit; or
failure by Company to pay any fee or any other amount due under this Agreement
within three days after the date due; or
8.2 DEFAULT IN POST-PETITION LIABILITIES.
(i) Failure of Company or any of its Subsidiaries to pay when due
any principal of or interest on or any other amount payable in respect of
one or more items of Indebtedness or Contingent Obligations, in each case
in the principal amount of $1,000,000 or more, individually or in the
aggregate, in each case beyond the end of any grace period provided
therefor, to the extent the obligations to repay such amounts are
enforceable on a post-Petition Date basis; or
(ii) breach or default by Company or any of its Subsidiaries with
respect to any other material term of (a) one or more items of
Indebtedness or Contingent Obligations in the individual or aggregate
principal amounts referred to in clause (i) above or (b) any loan
agreement, mortgage, indenture or other agreement relating to such item(s)
of Indebtedness or Contingent Obligation(s), if the effect of such breach
or default is to cause, or to permit the holder or holders of that
Indebtedness or Contingent Obligation(s) (or a trustee on behalf of such
holder or holders) to cause, that Indebtedness or Contingent Obligation(s)
to become or be declared due and payable prior to its stated maturity or
the stated maturity of any underlying obligation, as the case may be (upon
the giving or receiving of notice, lapse of time, both, or otherwise), and
to the extent that the obligations to repay such amounts are enforceable
on a post-Petition Date basis; or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of any Borrower to perform or comply with any term or
condition contained in subsection 2.5, 6.1(iv), 6.1(xvi), 6.2, 6.11 or Section 7
of this Agreement; or
8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made
by Company or any of its Subsidiaries in any Loan Document or in any statement
or certificate at any time given by Company or any of its Subsidiaries in
writing pursuant hereto or thereto or in connection herewith or therewith shall
be false in any material respect on the date as of which made; or
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8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or compliance
with any term contained in this Agreement or any of the other Loan Documents,
other than any such term referred to in any other subsection of this Section 8,
and such default shall not have been remedied or waived within 30 days after the
earlier of (i) an Officer of Company or such Loan Party becoming aware of such
default or (ii) receipt by Company and such Loan Party of notice from
Administrative Agent or any Lender of such default; or
8.6 BANKRUPTCY EVENTS.
With respect to the Chapter 11 Cases, (a) the entry of an order or
ruling, which has not been withdrawn, dismissed or reversed:
(i) authorizing any Borrower in any of the Chapter 11 Cases to
obtain additional financing under Section 364(c) or (d) of the Bankruptcy
Code, or authorizing any Person to recover from any portions of the
Collateral any amounts pursuant to Section 506(c) of the Bankruptcy Code
or otherwise, or (except as provided in the Interim Borrowing Order or the
Final Borrowing Order) authorizing the use of cash collateral without
Requisite Lenders' prior written consent under Section 363(c) of the
Bankruptcy Code; or
(ii) appointing an interim or permanent trustee in any of the
Chapter 11 Cases or the appointment of a responsible officer or an
examiner with powers beyond the duty to investigate and report (as set
forth in Sections 1106(a)(3) and (4) of the Bankruptcy Code) in any of the
Chapter 11 Cases; or
(iii) without the prior written consent of each Agent and Requisite
Lenders, dismissing of any of the Chapter 11 Cases, or converting of any
of the Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code;
or
(iv) granting relief from or modifying the automatic stay of Section
362 of the Bankruptcy Code with respect to assets having a value in excess
of $1,000,000 in the aggregate (x) to allow any creditor to execute upon
or enforce a Lien on any Collateral or on any other property or assets of
any Borrower, (y) with respect to any Lien of, or the granting of any Lien
on any Collateral or any other property or assets of any Borrower to, any
State or local environmental or regulatory agency or authority or (z) to
permit termination of or other exercise of remedies under Material
Contracts; or
(v) without the prior written consent of Agents and Requisite
Lenders, amending, supplementing, staying, reversing, vacating or
otherwise modifying any of the Interim Borrowing Order, the Final
Borrowing Order or this Agreement or any other Loan Document or any of the
Agents' or the Lenders' rights, benefits, privileges or remedies under the
Interim Borrowing Order, the Final Borrowing Order, this Agreement or any
other Loan Document; or
(vi) consolidating or combining any Borrower with any other Person
(other than another Borrower), except pursuant to a confirmed plan of
reorganization with the
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prior written consent of holders of Lenders having or holding at least
66-2/3% of the Revolving Loan Exposure of all Lenders as contemplated in
the plan of reorganization; or
(vii) approving any other administrative expense claim (other than
the Carve-Outs) having any priority over, or being pari passu with, the
administrative expense priority of the Obligations in respect of any of
the Chapter 11 Cases, or approving any Lien on the Collateral (other than
those specifically referred to in subsection 2.10 and the Final Borrowing
Order, but only to the extent therein described, and those expressly
permitted under this Agreement) having any priority over, or being pari
passu with, the Liens securing the Obligations pursuant to the Loan
Documents, the Interim Borrowing Order and the Final Borrowing Order;
(viii) other than as expressly permitted pursuant to the First Day
Orders or subsection 7.5, approving any payment or prepayment on or
redemption or acquisition for value (including, without limitation, by way
of depositing with the trustee with respect thereto money or securities
before due for the purpose of paying when due) of any Prepetition
Indebtedness or other pre-Petition Date obligations of any Borrower, or
approving any payment of any interest on any Prepetition Indebtedness of
any Borrower (whether in cash, in kind securities or otherwise); or
(ix) the filing by any of Company's Subsidiaries of any plan or
plans of arrangement or reorganization under the Bankruptcy Code, unless
such plan or plans provide for the payment in full in Cash in of all
Obligations; or
(x) any Borrower obtaining additional, priming debtor-in-possession
financing; or
(b) the filing by any Loan Party of a motion, application or other petition to
effect or consent to any order referred to in the foregoing clause (a); or (c)
after entry thereof, the Initial Borrowing Order shall at any time not be in
full force and effect or shall be stayed by the Bankruptcy Court or any other
court of competent jurisdiction, or shall cease to be binding on any material
creditor of Borrowers or shall no longer be effective to provide a stay of
actions, priorities, Liens and other protections for Borrowers, Agents and the
Lenders purported to be granted thereby; or (d) after entry thereof, the Final
Borrowing Order shall at any time not be in full force and effect or shall be
stayed by the Bankruptcy Court or any other court of competent jurisdiction, or
shall cease to be binding on any material creditor of Borrowers or shall no
longer be effective to provide a stay of actions, priorities, Liens and other
protections for Borrowers, Agents and the Lenders purported to be granted
thereby; or (e) there shall arise any other administrative expense claim (other
than the Carve-Outs) having any priority over, or being pari passu with the
administrative expense priority of the Obligations in respect of any of the
Chapter 11 Cases, or there shall arise any Lien on the Collateral (other than
the Carve-Outs, but only to the extent described in subsection 2.10 and the
Final Borrowing Order, and those expressly permitted under this Agreement)
having any priority over, or being pari passu with, the Liens securing the
Obligations pursuant to the Loan Documents, the Interim Borrowing Order and the
Final Borrowing Order; or (f) the Bankruptcy Court shall fail to enter the Final
Borrowing Order on or prior to the date that is 30 days after entry of the
Interim Borrowing Order approving, among other things, this Agreement and the
other Loan Documents and the transactions contemplated
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hereunder and thereunder, or shall abstain from hearing any of the Chapter 11
Cases, or any Loan Party shall file a motion, application or other petition
requesting such relief; or (g) prior to the Customer Program Approval Date, the
hearing for the Final Borrowing Order before the Bankruptcy Court shall be
adjourned or Borrowers shall withdraw their motion for approval of the Final
Borrowing Order, in either case without prior consent of Agents; or (h) any Loan
Party shall default in the due performance or observance by it of any term,
covenant or agreement contained in the Interim Borrowing Order or the Final
Borrowing Order and such default shall continue for a period of 3 days after the
earlier to occur of (x) an Officer of Company or such Loan Party becoming aware
of such default or (y) receipt by Company or such Loan Party of notice from any
Agent or any Lender of such default; or
8.7 JUDGMENTS.
(i) Any money judgment, writ or warrant of attachment or similar
process as to post-Petition Date liability or debt in any individual case or in
all cases in the aggregate in an amount in excess of $1,000,000 (not adequately
covered by insurance as to which a solvent and unaffiliated insurance company
has acknowledged coverage) shall be entered or filed against Company or any of
its Subsidiaries or any of their respective assets and shall remain
undischarged, unvacated, unbonded or unstayed for a period of 60 days (or in any
event later than five days prior to the date of any proposed sale thereunder);
or (ii) any non-monetary judgment or order with respect to a post-Petition Date
event shall be rendered against any Borrower which could reasonably be expected
to result in a Material Adverse Effect and shall remain undischarged, unvacated,
unbonded or unstayed for a period of 60 days; or
8.8 DISSOLUTION.
Any order, judgment or decree shall be entered against Company or
any of its Subsidiaries (other than the Inactive Subsidiaries) decreeing the
dissolution or split up of Company or that Subsidiary and such order shall
remain undischarged or unstayed for a period in excess of 30 days; or
8.9 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events or similar events in
respect of any Foreign Plans that individually or in the aggregate result in or
might reasonably be expected to result in liability of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in excess of $1,000,000
due and payable during the term of this Agreement, provided that the occurrence
of an event described on Schedule 5.11B or an event described in clause (v),
(vi), (vii) or (viii) of the definition of "ERISA Event" shall not result in an
Event of Default unless a court of competent jurisdiction enters a final
nonappealable order compelling the Company or its Subsidiaries or its ERISA
Affiliates to make payments in excess of $1,000,000 on account of liabilities
resulting from such events; or
8.10 INVALIDITY OF SUBSIDIARY GUARANTY; FAILURE OF SECURITY; REPUDIATION
OF OBLIGATIONS.
At any time after the execution and delivery thereof, (i) the
Subsidiary Guaranty for any reason, other than the satisfaction in full of all
Obligations, shall cease to be in full force
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and effect (other than in accordance with its terms) or shall be declared to be
null and void, (ii) the grants of Collateral made in the Interim Borrowing Order
and the Final Borrowing Order shall, at any time, cease to be in full force and
effect (other than by reason of a release of Collateral in accordance with the
terms thereof or the payment in full of the Obligations, the cancellation or
expiration of all Letters of Credit and the termination of the Commitments) or
shall be declared null and void, or the validity or enforceability thereof shall
be contested by any Loan Party, (iii) any Collateral Document shall cease to be
in full force and effect (other than by reason of a release of Collateral
thereunder in accordance with the terms hereof or thereof, the payment in full
of the Obligations, the cancellation or expiration of all Letters of Credit and
the termination of the Commitments or any other termination of such Collateral
Document in accordance with the terms hereof or thereof) or shall be declared
null and void, or Collateral Agent shall not have or shall cease to have a valid
and perfected Lien (with the priority set forth in subsection 5.15A) in any
Collateral purported to be covered thereby, in each case for any reason other
than the failure of Collateral Agent or any Lender to take any action within its
control, or (iv) any Loan Party shall contest the validity or enforceability of
any Loan Document in writing or deny in writing that it has any further
liability, including with respect to future advances by Lenders, under any Loan
Document to which it is a party; or
8.11 EXERCISE OF OFFSET.
Any counterparty to any Material Contract shall (i) contest or deny
(whether or not in writing) its obligation to make payments thereunder to
Company or any of its Subsidiaries for goods or services rendered or otherwise
contest or deny the payment of any Accounts and take further action that would
reasonably be expected to result in a Material Adverse Effect, or (ii) or
exercise any right of setoff or offset or similar right, or any right to payment
of incidental, consequential or special damages, against Company or any of its
Subsidiaries or any of their Accounts; or
8.12 NON-LOAN PARTY SUBSIDIARY BANKRUPTCY EVENTS.
Without the prior written consent of Requisite Lenders:
(i) an involuntary case shall be commenced against any Non-Loan
Party Subsidiary under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect; or a decree or order of a court
having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having
similar powers over such Non-Loan Party Subsidiary, or over all or a
substantial part of its property, shall have been entered; or there shall
have occurred the involuntary appointment of an interim receiver, trustee
or other custodian of such Non-Loan Party Subsidiary for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of such Non-Loan Party Subsidiary, and any such event described
in this clause (ii) shall continue for 60 days unless dismissed, bonded or
discharged; or
(ii) any Non-Loan Party Subsidiary shall have an order for relief
entered with respect to it or commence a voluntary case under applicable
bankruptcy, insolvency or similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in
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an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of
or taking possession by a receiver, trustee or other custodian for all or
a substantial part of its property; or any Non-Loan Party Subsidiary shall
make any assignment for the benefit of creditors; or
(iii) any Non-Loan Party Subsidiary shall be unable, or shall fail
generally, or shall admit in writing its inability, to pay its debts as
such debts become due; or the Governing Body any Non-Loan Party Subsidiary
(or any committee thereof) shall adopt any resolution or otherwise
authorize any action to approve any of the actions referred to in clause
(iii) above or this clause (iv); or
8.13 MATERIAL ADVERSE EFFECT.
Any event or change shall occur after the Petition Date that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect; provided, that neither of the commencement of the Chapter 11 Cases nor
the increases in the cost of Raw Materials occurring prior to the Closing Date
shall be considered a Material Adverse Effect for purposes of this subsection
8.14; or
8.14 MANAGEMENT CHANGE.
Any member of senior management of Company as of the Closing Date,
or any successor to such member satisfactory to each Lead Lender, shall cease,
for any reason whatsoever, to continuously perform the duties of such member of
senior management as of the Closing Date, and such member of senior management
or such successor shall be succeeded by a Person who is not satisfactory to each
of the Lead Lenders, in its reasonable discretion:
THEN, upon the occurrence and during the continuation of any such Event of
Default:
A. Either Agent may, and shall, upon the written request or with the
written consent of Requisite Lenders (notwithstanding the provisions of Section
362 of the Bankruptcy Code and without application, notice or motion to, or
order from, the Bankruptcy Court), by written notice (which may be delivered by
facsimile or overnight courier) to Borrowers, (i) declare (a) the commitment of
each Lender to make any Revolving Loan and the obligation or ability of Issuing
Lender to issue any Revolving Letter of Credit to be terminated, and/or (b) all
or any portion of (1) the unpaid principal amount of and accrued interest on the
Revolving Loans, (2) an amount equal to the maximum amount that may at any time
be drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any such Revolving Letter of Credit shall have presented, or
shall be entitled at such time to present, the drafts or other documents or
certificates required to draw under such Revolving Letter of Credit), and (3)
all other Obligations to be immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by Borrowers and/or (ii) revoke Borrowers' rights to use Cash
collateral and prohibit access by Borrowers to any Deposit Account with either
Agent or any Lender or over which either Agent or any Lender has control;
provided that the foregoing shall not affect in any way the obligations of
Lenders under subsection 3.3C(i); and provided further, that in any event the
Debtors shall retain the right
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to seek authority from the Bankruptcy Court for the further use of any Cash
collateral and/or (prior to the Subsequent Funding Date) the Prepetition L/C
Cash Collateral.
B. Either Agent shall, upon the written request or with the written
consent of Requisite Lenders (notwithstanding the provisions of Section 362 of
the Bankruptcy Code and without application or motion to, or order from, the
Bankruptcy Court), upon delivery of five (5) days prior written notice to
Company, statutory committees and the United States Trustee, without any further
action or order of the Bankruptcy Court, seek relief from the automatic stay to
exercise all rights and remedies of any Agent set forth in any of the Loan
Documents, in addition to all rights and remedies allowed by, the United States
and of any state thereof, including but not limited to the UCC, and, if any
hearing shall be requested after delivery of such notice, the sole issue to be
determined at such hearing shall be whether the Termination Date (as defined in
the Interim Borrowing Order until the entry of the Final Order, at which time
"Termination Date" shall be as defined in the Final Order) has occurred;
provided that, Borrowers shall retain any and all rights afforded to them under
applicable bankruptcy law to see a further order permitting the continued,
additional or different use of cash collateral at such hearing.
Any amounts described in clause A(i) (b) (2) above, when received by
Collateral Agent, shall be held by Collateral Agent pursuant to the terms of the
Security Agreement and shall be applied as therein provided.
Neither Agent nor Lenders shall have any obligation of any kind to
make a motion or application to the Bankruptcy Court to exercise their rights
and remedies set forth or referred to in this Agreement or in the other Loan
Documents. The enumeration of the foregoing rights and remedies is not intended
to be exhaustive and the exercise of any right or remedy shall not preclude the
exercise of any other rights or remedies, all of which shall be cumulative and
not alternative.
BORROWERS WAIVE, (i) PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF
PRESENTMENT, DISHONOR, NOTICE OF INTENT TO ACCELERATE, NOTICE OF ACCELERATION,
PROTEST, DEFAULT, NONPAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT,
EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS,
DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND GUARANTIES OR OTHER PROPERTY AT ANY
TIME HELD BY COLLATERAL AGENT OR LENDERS ON WHICH LOAN PARTIES MAY IN ANY WAY BE
LIABLE AND HEREBY RATIFY AND CONFIRM WHATEVER COLLATERAL AGENT AND LENDERS MAY
LAWFULLY DO IN THIS REGARD, (ii) SUBJECT TO THE NOTICE PROVISIONS OF THE
PRECEDING PARAGRAPH, ALL RIGHTS TO NOTICE AND HEARING PRIOR TO COLLATERAL
AGENT'S TAKING POSSESSION OR CONTROL OF, OR TO COLLATERAL AGENT OR LENDERS
REPLY, ATTACHMENT OR LEVY UPON, THE COLLATERAL, OR ANY BOND OR SECURITY WHICH
MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING ANY AGENT OR LENDERS TO
EXERCISE ANY OF THEIR REMEDIES, AND (iii) THE BENEFIT OF ALL VALUATION,
APPRAISAL AND EXEMPTION LAWS. BORROWERS ACKNOWLEDGE THEY HAVE BEEN ADVISED BY
COUNSEL OF THEIR CHOICE WITH RESPECT TO THE EFFECT OF THE FOREGOING WAIVERS AND
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS EVIDENCED BY THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS. BORROWERS SPECIFICALLY RETAIN AND DO NOT
WAIVE ANY AND ALL CLAIMS THEY MAY HAVE WITH RESPECT TO BREACHES OF THE
CONFIDENTIALITY PROVISIONS OF THE PREPETITION SENIOR CREDIT FACILITIES.
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SECTION 9. AGENTS AND LEAD LENDERS
9.1 APPOINTMENT.
A. APPOINTMENT OF AGENTS AND LEAD LENDERS. Scotia Capital is hereby
appointed Administrative Agent and a Lead Lender hereunder and under the other
Loan Documents. Deutsche Bank is hereby appointed Collateral Agent and a Lead
Lender hereunder and under the other Loan Documents. Each Lender hereby
authorizes each Agent and Lead Lender to act as its agent in accordance with the
terms of this Agreement and the other Loan Documents. Agents and Lead Lenders
agree to act upon the express conditions contained in this Agreement and the
other Loan Documents, as applicable. The provisions of this Section 9 are solely
for the benefit of Agents, Lead Lenders and Lenders and no Loan Party shall have
rights as a third party beneficiary of any of the provisions thereof. In
performing its functions and duties under this Agreement, each Agent (other than
as provided in subsection 2.1E) shall act solely as an agent of Lenders, and
each Agent and each Lead Lender does not assume and shall not be deemed to have
assumed any obligation towards or relationship of agency or trust with or for
Company or any other Loan Party.
B. APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the purpose
of this Agreement and the other Loan Documents that there shall be no violation
of any law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact business as agent or trustee in such
jurisdiction. It is recognized that in case of litigation under this Agreement
or any of the other Loan Documents, and in particular in case of the enforcement
of any of the Loan Documents, or in case Collateral Agent deems that by reason
of any present or future law of any jurisdiction it may not exercise any of the
rights, powers or remedies granted herein or in any of the other Loan Documents
or take any other action which may be desirable or necessary in connection
therewith, it may be necessary that Collateral Agent appoint an additional
individual or institution as a separate trustee, co-trustee, collateral agent or
collateral co-agent (any such additional individual or institution being
referred to herein individually as a "SUPPLEMENTAL COLLATERAL AGENT" and
collectively as "SUPPLEMENTAL COLLATERAL AGENTS").
In the event that Collateral Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to Collateral
Agent with respect to such Collateral shall be exercisable by and vest in such
Supplemental Collateral Agent to the extent, and only to the extent, necessary
to enable such Supplemental Collateral Agent to exercise such rights, powers and
privileges with respect to such Collateral and to perform such duties with
respect to such Collateral, and every covenant and obligation contained in the
Loan Documents and necessary to the exercise or performance thereof by such
Supplemental Collateral Agent shall run to and be enforceable by either
Collateral Agent or such Supplemental Collateral Agent, and (ii) the provisions
of this Section 9 and of subsections 10.2 and 10.3 that refer to Collateral
Agent shall inure to the benefit of such Supplemental Collateral Agent and all
references therein to Collateral Agent shall be deemed to be references to
Collateral Agent and/or such Supplemental Collateral Agent, as the context may
require.
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Should any instrument in writing from Company or any other Loan
Party be required by any Supplemental Collateral Agent so appointed by
Collateral Agent for more fully and certainly vesting in and confirming to him
or it such rights, powers, privileges and duties, Company shall, or shall cause
such Loan Party to, execute, acknowledge and deliver any and all such
instruments promptly upon request by Collateral Agent. In case any Supplemental
Collateral Agent, or a successor thereto, shall die, become incapable of acting,
resign or be removed, all the rights, powers, privileges and duties of such
Supplemental Collateral Agent, to the extent permitted by law, shall vest in and
be exercised by Collateral Agent until the appointment of a new Supplemental
Collateral Agent.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
A. POWERS; DUTIES SPECIFIED. Each Lender irrevocably authorizes each
Agent and each Lead Lender to take such action on such Lender's behalf and to
exercise such powers, rights and remedies hereunder and under the other Loan
Documents as are specifically delegated or granted to Agents and Lead Lenders by
the terms hereof and thereof, together with such powers, rights and remedies as
are reasonably incidental thereto. Agents and Lead Lenders shall have only those
duties and responsibilities that are expressly specified in this Agreement and
the other Loan Documents. Agents and Lead Lenders may exercise such powers,
rights and remedies and perform such duties by or through its agents or
employees. Agents and Lead Lenders shall not have, by reason of this Agreement
or any of the other Loan Documents, a fiduciary relationship in respect of any
Lender or Company; and nothing in this Agreement or any of the other Loan
Documents, expressed or implied, is intended to or shall be so construed as to
impose upon Agents or Lead Lenders any obligations in respect of this Agreement
or any of the other Loan Documents except as expressly set forth herein or
therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. No Agent-Related Person
shall be responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement or any other Loan Document or for any representations, warranties,
recitals or statements made herein or therein or made in any written or oral
statements or in any financial or other statements, instruments, reports or
certificates or any other documents furnished or made by such Person to Lenders
or by or on behalf of Company to such Person or any Lender in connection with
the Loan Documents and the transactions contemplated thereby or for the
financial condition or business affairs of Company or any other Person liable
for the payment of any Obligations, nor shall any Agent-Related Person be
required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained in any of
the Loan Documents or as to the use of the proceeds of the Revolving Loans or
the use of the Letters of Credit or as to the existence or possible existence of
any Event of Default or Potential Event of Default. Anything contained in this
Agreement to the contrary notwithstanding, no Agent-Related Person shall have
any liability arising from confirmations of the amount of outstanding Revolving
Loans, outstanding Letters of Credit, the Revolving Letter of Credit Usage, the
Commitments or the component amounts thereof.
C. EXCULPATORY PROVISIONS. No Agent-Related Person shall be liable
to Lenders for any action taken or omitted by any of these under or in
connection with any of the Loan Documents except to the extent caused by its own
gross negligence or willful misconduct.
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Each Agent and each Lead Lender shall be entitled to refrain from any act or the
taking of any action (including the failure to take an action) in connection
with this Agreement or any of the other Loan Documents or from the exercise of
any power, discretion or authority vested in it hereunder or thereunder unless
and until such Agent or Lead Lender shall have received instructions in respect
thereof from Requisite Lenders (or such other Lenders as may be required to give
such instructions under subsection 10.6) and, upon receipt of such instructions
from Requisite Lenders (or such other Lenders, as the case may be), such Agent
or Lead Lender shall be entitled to act or (where so instructed) refrain from
acting, or to exercise such power, discretion or authority, in accordance with
such instructions; provided, that no Agent-Related Person shall be required to
take any action that, in its opinion or the opinion of its counsel, may expose
such Agent-Related Person to liability or that is contrary to any Loan Document
or applicable law. Without prejudice to the generality of the foregoing, (i)
each Agent and each Lead Lender shall be entitled to rely, and shall be fully
protected in relying, upon any communication (including any electronic message,
Internet or intranet website posting or other distribution), instrument or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Company and its Subsidiaries), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any right of
action whatsoever against any Agent-Related Person as a result of such Person
acting or (where so instructed) refraining from acting under this Agreement or
any of the other Loan Documents in accordance with the instructions of Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6).
D. AGENTS ENTITLED TO ACT AS LENDER. The agency hereby created shall
in no way impair or affect any of the rights and powers of, or impose any duties
or obligations upon, an Agent in its individual capacity as a Lender hereunder
or in its individual capacity as a Lead Lender hereunder. With respect to its
participation in the Revolving Loans and the Letters of Credit, an Agent and a
Lead Lender shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not performing the duties and
functions delegated to it hereunder, and the term "Lender" or "Lenders" or any
similar term shall, unless the context clearly otherwise indicates, include each
Agent and each Lead Lender in its individual capacity. An Agent (or a Lead
Lender) and its Affiliates may accept deposits from, lend money to, acquire
equity interests in and generally engage in any kind of commercial banking,
investment banking, trust, financial advisory or other business with Company or
any of its Affiliates as if it were not performing the duties specified herein,
and may accept fees and other consideration from Company for services in
connection with this Agreement and otherwise without having to account for the
same to Lenders.
9.3 INDEPENDENT INVESTIGATION BY LENDERS; NO RESPONSIBILITY FOR
APPRAISAL OF CREDITWORTHINESS.
Each Lender agrees that it has made its own independent
investigation of the financial condition and affairs of Company and its
Subsidiaries in connection with the making of the Revolving Loans and the
issuance of Letters of Credit hereunder and that it has made and shall continue
to make its own appraisal of the creditworthiness of Company and its
Subsidiaries. No Agent and no Agent-Related Person shall have any duty or
responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders
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or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Revolving
Loans or at any time or times thereafter, and no Agent and no Agent-Related
Person shall have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally agrees
to indemnify Agents and each Agent-Related Person to the extent that any such
Person shall not have been reimbursed by Company, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements and fees and
disbursements of any financial advisor engaged by either Agent) or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against an Agent or an Agent-Related Person in exercising the powers,
rights and remedies of either Agent or either Lead Lender or performing duties
of an Agent hereunder or under the other Loan Documents or otherwise in its
capacity as an Agent or Lead Lender in any way relating to or arising out of
this Agreement or the other Loan Documents; provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of an
Agent or an Agent-Related Person resulting from its own gross negligence or
willful misconduct. If any indemnity furnished to Agents or any Agent-Related
Person for any purpose shall, in the opinion of either Agent or either Lead
Lender, be insufficient or become impaired, such Agent or Lead Lender may call
for additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished.
9.5 RESIGNATION OF ADMINISTRATIVE AGENT; SUCCESSOR ADMINISTRATIVE AGENT
AND ISSUING LENDER.
A. SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may resign
at any time by giving 30 days' prior written notice thereof to Collateral Agent,
Lenders and Company. Upon any such notice of resignation, Requisite Lenders
shall have the right, upon five Business Days' notice to Company (and consent by
Company, if no Event of Default shall have occurred and be continuing at such
time), to appoint a successor Administrative Agent. If no such successor shall
have been so appointed by Requisite Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, the retiring Administrative Agent may, on behalf of Lenders,
appoint a successor Administrative Agent (provided that Company consent shall be
required for such an appointment if no Event of Default shall have occurred and
be continuing at such time). If Administrative Agent shall notify Lenders and
Borrowers that no Person has accepted such appointment as successor
Administrative Agent, such resignation shall nonetheless become effective in
accordance with Administrative Agent's notice and (i) the retiring
Administrative Agent shall be discharged from its duties and obligations under
the Loan Documents, except that any Collateral held by Administrative Agent will
continue to be held by it until a Person shall have accepted the appointment of
successor Administrative Agent, and (ii) all payments, communications and
determinations provided to be made by, to or through Administrative Agent shall
instead be made by, to or through Collateral Agent, until such time as Requisite
Lenders appoint a successor Administrative Agent in accordance with this
subsection 9.5A. Upon the acceptance
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of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent and the retiring Administrative Agent shall
be discharged from its duties and obligations under this Agreement. After any
retiring Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Section 9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
B. SUCCESSOR ISSUING LENDER. Any resignation of Administrative Agent
pursuant to subsection 9.5A shall also constitute the resignation of Scotia
Capital or its successor as Issuing Lender under Revolving Letters of Credit,
and any successor Administrative Agent appointed pursuant to subsection 9.5A
shall, upon its acceptance of such appointment, become successor Issuing Lender
under Revolving Letters of Credit for all purposes hereunder.
9.6 RESIGNATION OF COLLATERAL AGENT.
Collateral Agent may resign at any time by giving 30 days' prior
written notice thereof to Administrative Agent, Lenders and Company. Upon any
such notice of resignation, Requisite Lenders shall have the right, upon five
Business Days' notice to Company (and consent by Company, if no Event of Default
shall have occurred and be continuing at such time), to appoint a successor
Collateral Agent. If no such successor shall have been so appointed by Requisite
Lenders and shall have accepted such appointment within 30 days after the
retiring Collateral Agent gives notice of its resignation, the retiring
Collateral Agent may, on behalf of Lenders, appoint a successor Collateral Agent
(provided that Company consent shall be required for such an appointment if no
Event of Default shall have occurred and be continuing at such time). If
Collateral Agent shall notify Lenders and Borrowers that no Person has accepted
such appointment as successor Collateral Agent, such resignation shall
nonetheless become effective in accordance with Collateral Agent's notice and
(i) the retiring Collateral Agent shall be discharged from its duties under the
Loan Documents, except that any Collateral held by Collateral Agent will
continue to be held by it until a Person shall have accepted the appointment of
successor Collateral Agent and (ii) all payments, communications and
determinations provided to be made by, to or through Collateral Agent shall
instead be made by, to or through Administrative Agent, until such time as
Requisite Lenders appoint a successor Collateral Agent in accordance with this
subsection 9.6. Upon the acceptance of any appointment of Collateral Agent
hereunder by a successor Collateral Agent, that successor Collateral Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent and the retiring Collateral Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring Collateral Agent's resignation hereunder as Collateral Agent, the
provisions of this Section 9 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Collateral Agent under this Agreement.
9.7 COLLATERAL DOCUMENTS AND SUBSIDIARY GUARANTY.
Each Lender hereby further authorizes Collateral Agent, on behalf of
and for the benefit of Lenders, to enter into each Collateral Document as
secured party and to be the agent for and representative of Lenders under the
Subsidiary Guaranty, and each Lender agrees to be bound by the terms of each
Collateral Document and the Subsidiary Guaranty; provided that
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Collateral Agent shall not (i) enter into or consent to any material amendment,
modification, termination or waiver of any provision contained in any Collateral
Document or the Subsidiary Guaranty or (ii) release any Collateral (except as
otherwise expressly permitted or required pursuant to the terms of this
Agreement or the applicable Collateral Document), in each case without the prior
consent of Requisite Lenders (or, if required pursuant to subsection 10.6, all
Lenders); provided further, however, that, without further written consent or
authorization from Lenders, Collateral Agent may execute any documents or
instruments necessary to (a) release any Lien encumbering any item of Collateral
that is the subject of a sale or other disposition of assets permitted by this
Agreement or to which Requisite Lenders have otherwise consented, (b) release
any Subsidiary Guarantor from the Subsidiary Guaranty if all of the Capital
Stock of such Subsidiary Guarantor is sold to any Person (other than an
Affiliate of Company) pursuant to a sale or other disposition permitted
hereunder or to which Requisite Lenders have otherwise consented or (c)
subordinate the Liens of Collateral Agent, on behalf of Lenders, to any Liens
permitted by subsection 7.2A which are permitted under this Agreement to be
senior to such Liens of Collateral Agent. Anything contained in any of the Loan
Documents to the contrary notwithstanding, each Borrower, each Agent and each
Lender hereby agree that (1) no Lender shall have any right individually to
realize upon any of the Collateral under any Collateral Document or to enforce
the Subsidiary Guaranty, it being understood and agreed that all powers, rights
and remedies under the Collateral Documents and the Subsidiary Guaranty may be
exercised solely by Collateral Agent for the benefit of Lenders in accordance
with the terms thereof, and (2) in the event of a foreclosure by any Collateral
Agent on any of the Collateral pursuant to a public or private sale, any Agent
or any Lender may be the purchaser of any or all of such Collateral at any such
sale and Collateral Agent, as agent for and representative of Lenders (but not
any Lender or Lenders in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing) shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Obligations as a credit on account of the purchase price for
any Collateral payable by Collateral Agent at such sale.
9.8 DUTIES OF OTHER AGENTS.
None of the Lenders identified in this Agreement as an agent (other
than Collateral Agent, Administrative Agent or any Lead Lender) shall have any
right, power, obligation, liability, responsibility or duty under this Agreement
other than those applicable to all Lenders as such. Without limiting the
foregoing, none of such Lenders shall have or be deemed to have a fiduciary
relationship with any Lender.
9.9 AGENT MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to Company or any of the Subsidiaries of
Company, each Agent (irrespective of whether the principal of any Revolving Loan
shall then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether such Agent shall have made any demand on Company)
shall be entitled and empowered, by intervention in such proceeding or otherwise
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(i) to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Revolving Loans and any other
Obligations that are owing and unpaid and to file such other papers or
documents as may be necessary or advisable in order to have the claims of
Lenders and Agents (including any claim for the reasonable compensation,
expenses, disbursements and advances of Lenders and Agents and their
agents and counsel and all other amounts due Lenders and Agents under
subsections 2.3 and 10.2) allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to either Agent and, in the event that such
Agent shall consent to the making of such payments directly to Lenders, to pay
to such Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of Agents and their agents and counsel, and any other
amounts due Agents under subsections 2.3 and 10.2.
Nothing herein contained shall be deemed to authorize either Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lenders or to authorize either Agent to vote in
respect of the claim of any Lender in any such proceeding.
SECTION 10. MISCELLANEOUS
10.1 SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND
LETTERS OF CREDIT.
A. GENERAL. This Agreement shall be binding upon the parties hereto
and their respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of Lenders (it being
understood that Lenders' rights of assignment are subject to the further
provisions of this subsection 10.1). Neither Company's rights or obligations
hereunder nor any interest therein may be assigned or delegated by Company
without the prior written consent of all Lenders (and any attempted assignment
or transfer by Company without such consent shall be null and void). No sale,
assignment or transfer or participation of any Revolving Letter of Credit or any
participation therein may be made separately from a sale, assignment, transfer
or participation of a corresponding interest in the Commitment pursuant to which
such Revolving Letter of Credit was issued and the Revolving Loans made pursuant
to such Commitment of the Lender effecting such sale, assignment, transfer or
participation. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Affiliates of each of Administrative Agent, Collateral
Agent and Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
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B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Any Lender may assign to one
or more Eligible Assignees all or any portion of its rights and
obligations under this Agreement; provided that such Lender shall give
prompt notice thereof to Administrative Agent and Company, and (a), except
(1) in the case of an assignment by Deutsche Bank or any of its
Affiliates, (2) in the case of an assignment of the entire remaining
amount of the assigning Lender's rights and obligations under this
Agreement or (3) in the case of an assignment to a Lender or an Affiliate
of a Lender or an Approved Fund of a Lender, the aggregate amount of the
Loan Exposure of the assigning Lender subject to each such assignment
shall not be less than $5,000,000, unless Administrative Agent otherwise
consents, (b) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations
under this Agreement with respect to the Revolving Loan or the Revolving
Commitment assigned, (c) the parties to each assignment shall execute and
deliver to Administrative Agent an Assignment Agreement, together with a
processing and recordation fee of $3,500 (unless (1) the assignor is
Deutsche Bank or any of its Affiliates or (2) the assignee is an Affiliate
or an Approved Fund of the assignor, in which case no fee shall be
required), and the Eligible Assignee, if it shall not be a Lender, shall
deliver to Administrative Agent information reasonably requested by
Administrative Agent, including such forms, certificates or other
evidence, if any, with respect to United States federal income tax
withholding matters as the assignee under such Assignment Agreement may be
required to deliver to Administrative Agent pursuant to subsection
2.7B(iii), and (d) except, in the case of an assignment (1) by Deutsche
Bank or any of its Affiliates or (2) to another Lender, an Affiliate of a
Lender or an Approved Fund of a Lender, Administrative Agent and, after
the completion of a successful syndication of the Commitments (as
determined by Deutsche Bank in its sole discretion) and so long as no
Event of Default exists or is continuing, Borrowers shall have consented
thereto, which consent shall not be unreasonably withheld or delayed. Upon
such execution, delivery and consent, from and after the effective date
specified in such Assignment Agreement, (y) the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment Agreement, shall have
the rights and obligations of a Lender hereunder and (z) the assigning
Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment Agreement,
relinquish its rights (other than any rights which survive the termination
of this Agreement under subsection 10.9B) and be released from its
obligations under this Agreement (and, in the case of an Assignment
Agreement covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be
a party hereto; provided that, anything contained in any of the Loan
Documents to the contrary notwithstanding, if such Lender is the Issuing
Lender with respect to any outstanding Letters of Credit such Lender shall
continue to have all rights and obligations of Issuing Lender with respect
to such Letters of Credit until the cancellation or expiration of such
Letters of Credit and the reimbursement of any amounts drawn thereunder).
The assigning Lender shall, upon the effectiveness of such assignment or
as promptly thereafter as practicable, surrender its Notes, if any, to
Administrative Agent for cancellation, and thereupon new Notes shall, if
so requested by the assignee and/or the assigning Lender in accordance
with
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subsection 2.1F, be issued to the assignee and/or to the assigning Lender,
substantially in the form of Exhibit VI annexed hereto, as the case may
be, with appropriate insertions, to reflect the new Commitments and/or
outstanding Revolving Loans of the assignee and/or the assigning Lender.
Other than as provided in subsection 10.5, any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply
with this subsection 10.1B shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations
in accordance with subsection 10.1C.
(ii) Acceptance by Administrative Agent; Recordation in Register.
Upon its receipt of an Assignment Agreement executed by an assigning
Lender and an assignee representing that it is an Eligible Assignee,
together with the processing and recordation fee referred to in subsection
10.1B(i) and any forms, certificates or other evidence with respect to
United States federal income tax withholding matters that such assignee
may be required to deliver to Administrative Agent pursuant to subsection
2.7B(iv), Administrative Agent shall, if Administrative Agent and Company
have consented to the assignment evidenced thereby (in each case) to the
extent such consent is required by subsection 10.1B(i), (a) accept such
Assignment Agreement by executing a counterpart thereof as provided
therein (which acceptance shall evidence any required consent of
Administrative Agent to such assignment), (b) record the information
contained therein in the Register, and (c) give prompt notice thereof to
Company. Administrative Agent shall maintain a copy of each Assignment
Agreement delivered to and accepted by it as provided in this subsection
10.1B(ii).
(iii) Deemed Consent by Borrowers. If the consent of Borrowers to an
assignment or to an Eligible Assignee is required hereunder (including a
consent to an assignment which does not meet the minimum assignment
thresholds specified in subsection 10.1B(i)), Borrowers shall be deemed to
have given its consent five Business Days after the date notice thereof
has been delivered to the assigning Lender (through Administrative Agent)
unless such consent is expressly refused by Borrowers prior to such fifth
Business Day.
C. PARTICIPATIONS. Any Lender may, without the consent of or notice
to Company or any Agent, sell participations to one or more Persons (other than
a natural Person or Company or any of its Affiliates) in all or a portion of
such Lender's rights and/or obligations under this Agreement; provided that (i)
such Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) Company, Collateral Agent,
Administrative Agent and Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver directly affecting (i) the extension of
the Stated Maturity Date or (ii) a reduction of the principal amount of or the
rate of interest payable on any Revolving Loan allocated to such participation.
Subject to the further provisions of this subsection 10.1C, Company agrees that
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each Participant shall be entitled to the benefits of subsections 2.6D and 2.7
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection 10.1B. To the extent permitted by law, each
Participant also shall be entitled to the benefits of subsection 10.4 as though
it were a Lender, provided such Participant agrees to be subject to subsection
10.5 as though it were a Lender. A Participant shall not be entitled to receive
any greater payment under subsections 2.6D and 2.7 than the applicable Lender
would have been entitled to receive with respect to the participation sold to
such Participant unless the sale of the participation to such Participant is
made with Company's prior written consent. No Participant shall not be entitled
to the benefits of subsection 2.7 unless Company is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of Company, to comply with subsection 2.7B(iv) as though it were a
Lender.
D. PLEDGES AND ASSIGNMENTS. Any Lender may at any time pledge or
assign a security interest in all or any portion of its Revolving Loans, and the
other Obligations owed to such Lender, to secure obligations of such Lender,
including without limitation any pledge or assignment to secure obligations to
any Federal Reserve Bank; provided that (i) no Lender shall be relieved of any
of its obligations hereunder as a result of any such assignment or pledge and
(ii) in no event shall any assignee or pledgee be considered to be a "Lender" or
be entitled to require the assigning Lender to take or omit to take any action
hereunder.
E. INFORMATION. Each Lender may furnish any information concerning
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 10.19.
F. AGREEMENTS OF LENDERS. Each Lender listed on the signature pages
hereof hereby agrees, and each Lender that becomes a party hereto pursuant to an
Assignment Agreement shall be deemed to agree, (i) that it is an Eligible
Assignee described in clause (ii) of the definition thereof; (ii) that it has
experience and expertise in the making of or purchasing loans such as the
Revolving Loans; and (iii) that it will make or purchase Revolving Loans for its
own account in the ordinary course of its business and without a view to
distribution of such Revolving Loans within the meaning of the Securities Act or
the Exchange Act or other federal securities laws (it being understood that,
subject to the provisions of this subsection 10.1, the disposition of such
Revolving Loans or any interests therein shall at all times remain within its
exclusive control).
10.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly without any further order of the
Bankruptcy Court, (i) all the reasonable fees, expenses and disbursements
(including travel expenses) of Administrative Agent, Collateral Agent and of
Agents' Counsel, in connection with the negotiation, preparation, execution and
administration of the Loan Documents and any consents, amendments, waivers or
other modifications thereto and any other documents or matters requested by
Company; (ii) all costs and expenses of furnishing all opinions by counsel for
Company (including any opinions requested by Agents or Lenders as to any legal
matters arising hereunder) and of Company's performance of and compliance with
all agreements and conditions on its part to be performed or complied with under
this Agreement and the other Loan Documents including with respect to
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confirming compliance with environmental, insurance and solvency requirements;
(iii) all reasonable fees, expenses and disbursements of Agents' Counsel
(including travel expenses) in connection with the negotiation, preparation,
execution and administration of the Loan Documents and any consents, amendments,
waivers or other modifications thereto and any other documents or matters
requested by Company; (iv) all costs and expenses of creating and perfecting
Liens in favor of Collateral Agent on behalf of Lenders pursuant to any
Collateral Document, including filing and recording fees, expenses and taxes,
stamp or documentary taxes, search fees, title insurance premiums, and
reasonable fees, expenses and disbursements of counsel to Collateral Agent and
of counsel providing any opinions that Collateral Agent or Requisite Lenders may
request in respect of the Collateral Documents or the Liens created pursuant
thereto; (v) all costs and expenses (including the reasonable fees, expenses and
disbursements of any auditors, accountants or appraisers and any environmental
or other consultants, advisors and agents employed or retained by either Agent
or its counsel) of obtaining and reviewing any environmental audits or reports
provided for under subsection 6.7A; (vi) all costs and expenses incurred by
Collateral Agent in connection with the custody or preservation of any of the
Collateral; (vii) all other costs and expenses incurred by either Agent in
connection with the syndication of the Commitments; (viii) all costs and
expenses, including reasonable attorneys' fees and fees, costs and expenses of
accountants, advisors, auditors and consultants, incurred by either Agent and
its counsel relating to efforts to (a) evaluate or assess any Loan Party, its
business or financial condition and (b) protect, evaluate, assess or dispose of
any of the Collateral; (ix) all costs and expenses, including reasonable
attorneys' fees, fees, costs and expenses of accountants, advisors and
consultants and costs of settlement, incurred by either Agent and Lenders in
enforcing any Obligations of or in collecting any payments due from any Loan
Party hereunder or under the other Loan Documents (including in connection with
the sale of, collection from, or other realization upon any of the Collateral or
the enforcement of the Loan Documents) or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or pursuant to the Chapter 11 Cases or any other
insolvency or bankruptcy proceedings; and (x) all actual and reasonable fees,
expenses, disbursements and other costs or liabilities of any financial
advisors, accountants, auditors or appraisers retained by either Agent or
Agents' Counsel, in connection with this Agreement or any other Loan Document or
the transactions contemplated thereby, including in connection with any audit or
examination of the inventory, accounts receivable and fixed assets of Borrowers.
Without limiting the generality of the foregoing, if, at any time or times,
regardless of the existence of an Event of Default, any Agent shall incur
reasonable expenses itself or employ Agents' Counsel, any local counsel or other
professional advisors, including, but not limited to, environmental, financial
and management consultants, for advice or other representation or shall incur
legal, appraisal, accounting, consulting or other reasonable costs and expenses
in connection with:
(a) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by any Agent, Lenders, any Borrower or any other
Person) in any way relating to the Collateral, any of the Loan Documents,
or any other agreements to be executed or delivered in connection
therewith or herewith, including any litigation, contest, dispute, suit,
case, proceeding or action, and any appeal or review thereof, in
connection with a case or proceeding commenced by or against any Loan
Party or any other Person that may be obligated to any Agent or Lenders by
virtue of the Loan Documents, under the
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Bankruptcy Code, or any other applicable Federal, state, or foreign
bankruptcy or other similar law;
(b) any attempt to enforce any rights or remedies of an Agent or
Lenders against any Loan Party or any other Person that may be obligated
to any Agent or Lenders by virtue of being a party to any of the Loan
Documents;
(c) any attempt to appraise, inspect, verify, protect, collect,
sell, liquidate or otherwise dispose of the Collateral, including without
limitation, obtaining and reviewing any environmental audits or reports;
or
(d) any Chapter 11 Case (including, without limitation, the on-going
monitoring by each Agent of the Chapter 11 Cases, including attendance by
each Agent and Agents' Counsel at hearings or other proceedings and the
on-going review of documents filed with a Court in respect thereof) and
each Agent's and Lenders' interests with respect to any Loan Party
(including, without limitation, the on-going review of any Loan Party's
business, assets, operations, prospects or financial condition as any
Agent shall deem necessary), the Collateral or the Obligations;
then, and in any such event, the reasonable fees and expenses incurred by any
Agent, Lenders and such attorneys and other professional advisors and
consultants arising from such services, including those of any appellate
proceedings, and all reasonable expenses, costs, charges and other fees incurred
by such counsel (including, as applicable, actual and reasonable allocated costs
of internal counsel) or other professionals in any way or respect arising in
connection with or relating to any of the events or actions described in this
subsection 10.2 shall be payable, on demand, by Borrowers to Administrative
Agent and shall be additional Obligations secured under the Collateral Documents
and the other Loan Documents. Without limiting the generality of the foregoing,
such expenses, costs, charges and fees may include: paralegal fees, costs and
expenses; accountants' and experts' fees, costs and expenses; appraisers' fees,
costs and expenses; management and other consultants' fees, costs and expenses;
court costs and expenses; photocopying and duplicating expenses; court reporter
fees, costs and expenses; long distance telephone charges; communication
charges, air express charges; telegram charges; secretarial overtime charges;
and expenses for travel, lodging and food paid or incurred in connection with
the performance of such legal or other professional services.
10.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless each Agent-Related Person, Issuing Lender,
Lenders, and their respective officers, directors, employees, agents and
Affiliates (collectively called the "INDEMNITEES"), from and against any and all
Indemnified Liabilities (as hereinafter defined); provided that Company shall
not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final judgment of a court of competent jurisdiction.
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As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any
and all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including the costs of any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or abate any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel (including allocated
costs of internal counsel) for Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened by any Person,
whether or not any such Indemnitee shall be designated as a party or a potential
party thereto, and any fees or expenses incurred by Indemnitees in enforcing
this indemnity), whether direct, indirect or consequential and whether based on
any federal, state or foreign laws, statutes, rules or regulations (including
securities and commercial laws, statutes, rules or regulations and Environmental
Laws), on common law or equitable cause or on contract or otherwise, that may be
imposed on, incurred by, or asserted against any such Indemnitee, in any manner
relating to or arising out of (i) this Agreement or the other Loan Documents or
the Chapter 11 Cases or the transactions contemplated hereby or thereby
(including Lenders' agreement to make the Revolving Loans hereunder or the use
or intended use of the proceeds thereof or the issuance or amendment of Letters
of Credit hereunder or the use or intended use of any thereof (including any
refusal by Issuing Lender to honor a demand for payment under a Revolving Letter
of Credit if the documents presented in connection with such demand do not
strictly comply with the terms of such Revolving Letter of Credit), or any
enforcement of any of the Loan Documents (including any sale of, collection
from, or other realization upon any of the Collateral)), (ii) the failure of
Issuing Lender to honor a drawing under any Revolving Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto Government Authority, (iii) the statements contained
in the commitment letter delivered by any Lender to Borrowers with respect
thereto, or (iv) any Environmental Claim or any Hazardous Materials Activity
relating to or arising from, directly or indirectly, any past or present
activity, operation, land ownership, or practice of Company or any of its
Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and
hold harmless set forth in this subsection 10.3 may be unenforceable in whole or
in part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
The agreements in this subsection 10.3 shall survive the resignation
of Administrative Agent or Collateral Agent, the replacement of any Lender, the
termination of the Commitments and the repayment, satisfaction or discharge of
all the other Obligations. All amounts due under this subsection 10.3 shall be
payable within ten Business Days after demand therefor.
10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence of any
Event of Default each of Lenders and their Affiliates is hereby authorized by
Company at any time or from time to time,
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to set off and to appropriate and to apply any and all deposits (general or
special, time or demand, provisional or final, including Indebtedness evidenced
by certificates of deposit, whether matured or unmatured, but not including
trust accounts) and any other Indebtedness at any time held or owing by that
Lender or any Affiliate of such Lender to or for the credit or the account of
Company and each other Loan Party against and on account of the Obligations of
Company or any other Loan Party to that Lender (or any Affiliate of such Lender)
or to any other Lender (or any Affiliate of any other Lender) under this
Agreement, the Letters of Credit and participations therein and the other Loan
Documents, including all claims of any nature or description arising out of or
connected with this Agreement, the Letters of Credit and participations therein
or any other Loan Document, irrespective of whether or not (i) that Lender shall
have made any demand hereunder or (ii) the principal of or the interest on the
Revolving Loans or any amounts in respect of the Letters of Credit or any other
amounts due hereunder shall have become due and payable pursuant to Section 8
and although said obligations and liabilities, or any of them, may be contingent
or unmatured. Borrowers hereby further grant to Collateral Agent and each Lender
a security interest in all deposits and accounts maintained with Collateral
Agent or such Lender as security for the Obligations.
10.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary or mandatory payment (other than a payment or prepayment of
Revolving Loans made and applied in accordance with the terms of this
Agreement), by realization upon security, through the exercise of any right of
set-off or banker's lien, by counterclaim or cross action or by the enforcement
of any right under the Loan Documents or otherwise, or as adequate protection of
a deposit treated as cash collateral under the Bankruptcy Code, receive payment
or reduction of a proportion of the aggregate amount of principal, interest,
amounts payable in respect of Revolving Loans, Revolving Letters of Credit, fees
and other amounts then due and owing to that Lender hereunder or under the other
Loan Documents with respect to Obligations (collectively, the "REVOLVING
AGGREGATE AMOUNTS DUE" to such Lender) that is greater than the proportion
received by any other Lender in respect of the Revolving Aggregate Amounts Due
to such other Lender, then the Lender receiving such proportionately greater
payment shall, unless such proportionately greater payment is required by the
terms of this Agreement, (i) notify Administrative Agent and each other Lender
of the receipt of such payment and (ii) apply a portion of such payment to
purchase assignments (which it shall be deemed to have purchased from each
seller of an assignment simultaneously upon the receipt by such seller of its
portion of such payment) of the Revolving Aggregate Amounts Due to the other
Lenders so that all such recoveries of Revolving Aggregate Amounts Due shall be
shared by all Lenders in proportion to the Revolving Aggregate Amounts Due to
them; provided that (A) if all or part of such proportionately greater payment
received by such purchasing Lender is thereafter recovered from such Lender,
those purchases shall be rescinded and the purchase prices paid for such
assignments shall be returned to such purchasing Lender ratably to the extent of
such recovery, but without interest and (B) the foregoing provisions shall not
apply to (1) any payment made by Borrowers pursuant to and in accordance with
the express terms of this Agreement or (2) any payment obtained by a Lender as
consideration for the assignment (other than an assignment pursuant to this
subsection 10.5A) of or the sale of a participation in any of its Obligations to
any Eligible Assignee or a Participant pursuant to subsection 10.1B. Each
Borrower expressly consents to the foregoing arrangement and agrees that any
purchaser of an assignment so
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purchased may exercise any and all rights of a Lender as to such assignment as
fully as if that Lender had complied with the provisions of subsection 10.1B
with respect to such assignment. In order to further evidence such assignment
(and without prejudice to the effectiveness of the assignment provisions set
forth above), each purchasing Lender and each selling Lender agree to enter into
an assignment agreement at the request of a selling Lender or a purchasing
Lender, as the case may be, in form and substance reasonably satisfactory to
each such Lender.
10.6 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any provision
of this Agreement or of the Notes, and no consent to any departure by any
Borrower therefrom, shall in any event be effective without the written
concurrence of Requisite Lenders; provided that no such amendment, modification,
termination, waiver or consent shall, without the consent of each Lender (1)
reduce the principal amount of any Revolving Loan, (2) increase the maximum
aggregate amount of Letters of Credit, (3) postpone the Stated Maturity Date,
(4) postpone the date on which any interest or any fees are payable, (5)
decrease the interest rate borne by any Revolving Loan (other than any waiver of
any increase in the interest rate applicable to any of the Revolving Loans
pursuant to subsection 2.2E) or the amount of any fees payable hereunder, (6)
reduce the amount or postpone the due date of any amount payable in respect of
any Revolving Letter of Credit, (7) change in any manner the obligations of
Lenders relating to the purchase of participations in Letters of Credit, (8)
change in any manner the definition of "Pro Rata Share" or the definition of
"Requisite Lenders", (9) change in any manner any provision of this Agreement
that, by its terms, expressly requires the approval or concurrence of all
Lenders, (10) release any Lien granted in favor of Collateral Agent with respect
to all or substantially all of the Collateral other than in accordance with the
terms of the Loan Documents, (11) release Company or all or substantially all
Borrowers from their obligations under the Loan Documents other than in
accordance with the terms of the Loan Documents, (12) increase the aggregate
amount of the Revolving Commitments, or (13) change in any manner or waive the
provisions contained in subsection 8.1 or this subsection 10.6. In addition, (i)
any amendment, modification, termination or waiver of any of the provisions
contained in Section 4 shall be effective only if evidenced by a writing signed
by or on behalf of each Agent and Requisite Lenders, (ii) no amendment,
modification, termination or waiver of any provision of any Note shall be
effective without the written concurrence of the Lender which is the holder of
that Note, (iii) no amendment, modification, termination or waiver of any
provision of Section 3 or any provision regarding the rights and obligations of
the Daily Funding Lender shall be effective without the written concurrence of
Collateral Agent and, with respect to the purchase of participations in
Revolving Letters of Credit, without the written concurrence of Issuing Lender
that has issued an outstanding Revolving Letter of Credit or has not been
reimbursed for a payment under a Revolving Letter of Credit, (iv) no amendment,
modification, termination or waiver of any provision which increases the advance
rate percentages specified in the definition of Borrowing Base shall be
effective without the written concurrence of all Lenders, (v) no amendment,
modification, termination or waiver of any provision of Section 9 or of any
other provision of this Agreement which, by its terms, expressly requires the
approval or concurrence of any Agent shall be effective without the written
concurrence of such Agent, and (vi) so long as Deutsche Bank or Scotia Capital
are party hereto, no amendment, waiver or other modification of the definitions
of "Commitment Termination Date", "Customer Program Approval Date", "Stated
Maturity Date" or "Termination Notice" or any provision hereof that
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would adversely affect rights granted hereunder exclusively to any Lead Lender
or Deutsche Bank and/or Scotia Capital individually shall be effective without
the written concurrence of Deutsche Bank (if Deutsche Bank is adversely
affected) and Scotia Capital (if Scotia Capital is adversely affected).
Notwithstanding anything to the contrary set forth herein, if the applicable
Lead Lender or Lead Lenders elect to exercise its own or their joint rights
under the letter agreements dated October 13, 2004 between Company and Agents
(A) to change the terms and conditions, pricing, amount, yield and structure of
the revolving credit facility created hereunder or (B) to establish advance
rates, or reduce advance rates already specified, in the definition of Borrowing
Base, to amend the Borrowing Base related definitions, to amend eligibility
criteria for the Borrowing Base, or to amend exclusions from and reserves
against the Borrowing Base, in each case in a manner that such Agent or Agents
expect to be more restrictive on Borrowers, then such Agent or Agents shall be
entitled to amend (in the exercise of Collateral Agent's Permitted Discretion,
in the case of an amendment of the type described in clause (B)) this Agreement
in writing in accordance with such rights without the consent of any other
Lender (except to the extent such amendment would require consent of each Lender
under the foregoing provisions of this subsection 10.6) or the consent of any
Borrower, and any such amendment shall be effective for all purposes hereof
without such consents. Either Agent may, but shall have no obligation to, with
the concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Nothing in this subsection 10.6 shall be
construed to require consent of any Lender (other than the Lead Lenders) to the
Covenant Addendum accepted by Lead Lenders pursuant to subsection 6.1(xvii). Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on any Loan
Party in any case shall entitle such Loan Party or any other Loan Party to any
other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 10.6 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by Company, on Borrowers and the
other Loan Parties.
10.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if
a particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 NOTICES; EFFECTIVENESS OF SIGNATURES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile in complete and legible
form, or three Business Days after depositing it in the United States mail with
postage prepaid and properly addressed; provided that notices to any Agent and
any Issuing Lender shall not be effective until received. For the purposes
hereof, the address of each party hereto shall be as set forth under such
party's name on the signature pages hereof or (i) as to Company and any Agent,
such other address as shall be designated by such Person in a written notice
delivered to
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the other parties hereto and (ii) as to each other party, such other address as
shall be designated by such party in a written notice delivered to
Administrative Agent. Electronic mail and Internet and intranet websites may be
used to distribute routine communications, such as financial statements and
other information as provided in subsection 6.1. Each Agent or any Borrower may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it;
provided, that approval of such procedures may be limited to particular notices
or communications. Loan Documents and notices under the Loan Documents may be
transmitted and/or signed by telefacsimile and by signatures delivered in `PDF'
format by electronic mail; provided, however, that no signature with respect to
any notice, request, agreement, waiver, amendment or other document that is
intended to have binding effect may be sent by electronic mail.
The effectiveness of any such documents and signatures shall,
subject to applicable law, have the same force and effect as an original copy
with manual signatures and shall be binding on all Loan Parties, Agents and
Lenders. Agents may also require that any such documents and signature be
confirmed by a manually-signed copy thereof; provided, however, that the failure
to request or deliver any such manually-signed copy shall not affect the
effectiveness of any facsimile document or signature.
Agents and Lenders shall be entitled to rely and act upon any
notices (including telephonic Notices of Borrowing) purportedly given by or on
behalf of Company even if (i) such notices were not made in a manner specified
herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. Company shall indemnify each
Agent-Related Person and each Lender from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of Company. All telephonic notices to and
other communications with any Agent may be recorded by such Agent, and each of
the parties hereto consents to such recording.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the
Revolving Loans and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of Company set forth in subsections 2.6D, 2.7,
10.2, 10.3, 10.4, 10.17 and 10.18 and the agreements of Lenders set forth in
subsections 9.2C, 9.4, 10.5 and 10.18 shall survive the payment of the Revolving
Loans, the cancellation or expiration of the Letters of Credit and the
reimbursement of any amounts drawn thereunder, and the termination of this
Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of an Agent or any Lender in the
exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall
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any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement and the other Loan Documents
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither any Agent nor any Lender shall be under any obligation to
marshal any assets in favor of Company or any other party or against or in
payment of any or all of the Obligations. To the extent that Company makes a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent for the benefit of Lenders), or Agents or Lenders enforce any security
interests or exercise their rights of setoff, and such payment or payments or
the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as
if such payment or payments had not been made or such enforcement or setoff had
not occurred.
10.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS; DAMAGE
WAIVER.
The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders, or
Lenders and Company, as a partnership, an association, a Joint Venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and it shall not be
necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
To the extent permitted by law, Company shall not assert, and hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with or as a result of this
Agreement (including, without limitation, subsection 2.1C hereof), any other
Loan Document, any transaction contemplated by the Loan Documents, any Revolving
Loan or the use of proceeds thereof. No Indemnitee shall be liable for any
damages arising from the use by unintended recipients of any information or
other materials distributed by it through
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telecommunications, electronic or other information transmission systems in
connection with the Loan Documents or the transactions contemplated thereby.
10.14 [RESERVED].
10.15 APPLICABLE LAW.
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH IN ANY SUCH LOAN DOCUMENT), AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE
APPLICATION OF ANOTHER LAW.
10.16 CONSTRUCTION OF AGREEMENT; NATURE OF RELATIONSHIP.
Each of the parties hereto acknowledges that (i) it has been
represented by counsel in the negotiation and documentation of the terms of this
Agreement, (ii) it has had full and fair opportunity to review and revise the
terms of this Agreement, (iii) this Agreement has been drafted jointly by all of
the parties hereto, and (iv) neither Administrative Agent, Collateral Agent nor
any Lender or other Agent has any fiduciary relationship with or duty to Company
arising out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between Administrative Agent, Collateral Agent,
the other Agents and Lenders, on one hand, and Company, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor.
Accordingly, each of the parties hereto acknowledges and agrees that the terms
of this Agreement shall not be construed against or in favor of another party.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
SUBJECT TO THE JURISDICTION OF THE BANKRUPTCY COURT, ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST BORROWERS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS THEREUNDER, MAY BE
BROUGHT IN THE BANKRUPTCY COURT. BY EXECUTING AND DELIVERING THIS AGREEMENT,
COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF THE BANKRUPTCY COURT;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
THE BANKRUPTCY COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO
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COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH
PROCEEDING IN THE BANKRUPTCY COURT, AND OTHERWISE CONSTITUTES EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN
THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402
OR OTHERWISE.
10.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE REVOLVING
LOANS MADE HEREUNDER. In the event of litigation, this Agreement may be filed as
a written consent to a trial by the court.
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10.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained pursuant
to the requirements of this Agreement that has been identified in writing as
confidential by Company in accordance with such Lender's customary procedures
for handling confidential information of this nature, it being understood and
agreed by Company that in any event a Lender may make disclosures (a) to its and
its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such information and instructed to keep such information
confidential), (b) to the extent requested by any Government Authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this subsection 10.19, to (i) any Eligible Assignee of or participant
in, or any prospective Eligible Assignee of or Participant in, any of its rights
or obligations under this Agreement or (ii) any direct or indirect contractual
counterparty or prospective counterparty (or such contractual counterparty's or
prospective counterparty's professional advisor) to any credit derivative
transaction relating to obligations of Company, (g) with the consent of Company,
(h) to the extent such information (i) becomes publicly available other than as
a result of a breach of this subsection 10.19 or (ii) becomes available to any
Agent or any Lender on a non-confidential basis from a source other than Company
or (i) to the National Association of Insurance Commissioners or any other
similar organization or any nationally recognized rating agency that requires
access to information about a Lender's or its Affiliates' investment portfolio
in connection with ratings issued with respect to such Lender or its Affiliates
and that no written or oral communications from any of Agents' Counsel or
Lenders and no information that is or is designated as privileged or as attorney
work product may be disclosed to any Person unless such Person is a Lender or a
participant hereunder; provided, that, unless specifically prohibited by
applicable law or court order, each Lender shall notify Company of any request
by any Government Authority or representative thereof (other than any such
request in connection with any examination of the financial condition of such
Lender by such Government Authority) for disclosure of any such non-public
information prior to disclosure of such information; and provided, further that
in no event shall any Lender be obligated or required to return any materials
furnished by Company or any of its Subsidiaries. In addition, Agents and Lenders
may disclose the existence of this Agreement and information about this
Agreement to market data collectors, similar service providers to the lending
industry, and service providers to Agents and Lenders, and any Agent or any of
its Affiliates may place customary "tombstone" advertisements relating hereto in
publications (including publications circulated in electronic form) of its
choice at its own expense.
10.20 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
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counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile transmission
shall be effective as delivery of a manually executed counterpart thereof.
10.21 COURT PROCEEDINGS.
This Agreement and the other Loan Documents shall be binding upon,
and inure to the benefit of, the successors of each Agent and each Lender, and
the assigns, transferees and endorsees of each Agent and each Lender. The
security interests and Liens created in this Agreement, the Collateral Documents
and the other Loan Documents shall be and remain valid and perfected, and the
claims of each Agent and Lenders hereunder valid and enforceable in accordance
with the terms hereof, notwithstanding the discharge of any Loan Party pursuant
to Section 1141 of the Bankruptcy Code, the conversion of any Chapter 11 Case or
any other bankruptcy case of any Loan Party to a case under Chapter 7 of the
Bankruptcy Code, the dismissal of any Chapter 11 Case or any subsequent Chapter
7 case or the release of any Collateral from the property of any Loan Party. The
security interests and Liens created in this Agreement, the Collateral Documents
and the other Loan Documents shall be and remain valid and perfected without the
necessity that any Agent file financing statements or otherwise perfect its
security interests or Liens under applicable law. This Agreement, the claims of
any Agent and Lenders hereunder, and all security interests or Liens created
hereby or pursuant hereto or by or pursuant to the Collateral Documents or any
other Loan Document shall at all times be binding upon Loan Parties, the estates
of Loan Parties and any trustee appointed in any Chapter 11 Case or any Chapter
7 case, or any other successor in interest to Company. This Agreement shall not
be subject to Section 365 of the Bankruptcy Code.
10.22 USA PATRIOT ACT.
Each Lender hereby notifies Borrowers that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the "ACT"), it is required to obtain, verify and record
information that identifies Loan Parties, which information includes the name
and address of each Loan Party and other information that will allow such Lender
to identify such Loan Party in accordance with the Act.
10.23 RELEASE OF PARTIES; WAIVERS.
A. Each Borrower, on behalf of itself and each of its Subsidiaries
(collectively, the "RELEASORS"), hereby releases, remises, acquits and forever
discharges each Agent, each Lender (in its capacity as a Lender hereunder and as
a lender, collateral agent, depository or letter of credit issuer and in any
other capacity under or in connection with the Prepetition Senior Credit
Facilities), and each of their respective employees, agents, representatives,
consultants, attorneys, fiduciaries, servants, officers, directors, partners,
predecessors, successors and assigns, subsidiary corporations, parent
corporations, related corporate divisions, participants and assigns (all of the
foregoing hereinafter called the "RELEASED PARTIES"), from any and all actions
and causes of action, judgments, executions, suits, debts, claims, demands,
liabilities, obligations, setoffs, recoupments, counterclaims, defenses, damages
and expenses of any and every character, known or unknown, suspected or
148
unsuspected, direct and/or indirect, at law or in equity, of whatsoever kind or
nature, whether heretofore or hereafter arising, for or because of any matter or
things done, omitted or suffered to be done by any of the Released Parties prior
to and including the date of execution hereof, and in any way directly or
indirectly arising out of or in any way connected to this Agreement, any of the
other Loan Documents, the Prepetition Senior Credit Facilities or the
administration or enforcement of any of such documents (all of the foregoing
hereinafter called the "RELEASED MATTERS"). Each Releasor acknowledges that the
agreements in this subsection are intended to be in full satisfaction of all or
any alleged injuries or damages suffered or incurred by such Releasor arising in
connection with the Released Matters and constitute a complete waiver of any
right of setoff or recoupment, counterclaim or defense of any nature whatsoever
which arose prior to the Closing Date to payment or performance of the
Obligations. Each Releasor represents and warrants that it has no knowledge of
any claim by it against the Released Parties or of any facts, or acts or
omissions of the Released Parties which on the date hereof would be the basis of
a claim by the Releasors against the Released Parties which is not released
hereby. Each Releasor represents and warrants that it has not purported to
transfer, assign, pledge or otherwise convey any of its right, title or interest
in any Released Matter to any other person or entity and that the foregoing
constitutes a full and complete release of all Released Matters. Releasors have
granted this release freely, and voluntarily and without duress.
B. BORROWERS HEREBY WAIVE ANY AND ALL RIGHTS TO CHALLENGE, BY WAY OF
CLAIMS, DEMANDS, AVOIDANCE, SUBORDINATION, OTHER CAUSES OF ACTION, ADVERSARY
PROCEEDINGS OR OTHER LITIGATION, THE AMOUNT, VALIDITY, PERFECTION, PRIORITY OR
ENFORCEABILITY OF, OR TO ASSERT ANY DEFENSE, OBJECTION, COUNTERCLAIM OR OFFSET
TO, THE OBLIGATIONS, THE PREPETITION SENIOR OBLIGATIONS, THE LIENS AND SECURITY
INTERESTS GRANTED BY THE LOAN PARTIES TO COLLATERAL AGENT (FOR THE BENEFIT OF
THE LENDERS) UPON ALL OF THE COLLATERAL, OR THE LIENS AND SECURITY INTERESTS
GRANTED BY THE PREPETITION SENIOR CREDIT PARTIES FOR THE BENEFIT OF THE
PREPETITION SENIOR LENDERS) UPON ALL OF THE PREPETITION SENIOR COLLATERAL.
C. Nothing in subsection 10.23A or 10.23B shall constitute a waiver
of the rights of the official committee for the unsecured creditors, if any,
appointed in the Chapter 11 Cases or any other party in interest to challenge
the validity, enforceability, nonavoidability, perfection or priority of the
Prepetition Senior Obligations or the Liens granted for the benefit of the
Prepetition Senior Lenders on the Prepetition Senior Collateral during the
period prior to the date that is 60 days after the appointment of such
committee.
D. In accordance with the Interim Borrowing Order and the Final
Borrowing Order, each Borrower hereby irrevocably waives on behalf of itself and
its estate, and shall cause each of its Subsidiaries to waive, any and all
claims to any surcharge of the security interests of Collateral Agent in the
Collateral under Section 506(c) of the Bankruptcy Code.
E. Each Borrower hereby irrevocably waives on behalf of itself and
its estate any and all right pursuant to Sections 364(c) or 364(d) of the
Bankruptcy Code or otherwise to grant any Lien of equal or greater priority than
the Lien securing the Obligations, or to approve a
149
claim of equal or greater priority than the Obligations, except in each case in
connection with the consummation of a financing to be used in whole or in part
to repay in full the Obligations and terminate the Commitments.
[Remainder of page intentionally left blank]
150
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
INTERMET CORPORATION,
as Debtor and Debtor-in-Possession
By: /s/ Alan J. Miller
------------------
Name: Alan J. Miller
Title: Vice President
Notice Address:
c/o INTERMET Corporation
5445 Corporate Drive, Suite 200
Troy, Michigan 48098-2683
Attention:
Telephone:
Facsimile:
OTHER BORROWERS:
ALEXANDER CITY CASTING COMPANY, INC.,
as Debtor and Debtor-in-Possession
By: /s/ Alan J. Miller
------------------
Name: Alan J. Miller
Title: Vice President
CAST-MATIC CORPORATION,
as Debtor and Debtor-in-Possession
By: /s/ Alan J. Miller
------------------
Name: Alan J. Miller
Title: Vice President
1
COLUMBUS FOUNDRY, L.P.,
as Debtor and Debtor-in-Possession
By: /s/ Alan J. Miller
------------------
Name: Alan J. Miller
Title: Vice President
DIVERSIFIED DIEMAKERS, INC.,
as Debtor and Debtor-in-Possession
By: /s/ Alan J. Miller
------------------
Name: Alan J. Miller
Title: Vice President
GANTON TECHNOLOGIES INC.,
as Debtor and Debtor-in-Possession
By: /s/ Alan J. Miller
------------------
Name: Alan J. Miller
Title: Vice President
INTERMET HOLDING COMPANY,
as Debtor and Debtor-in-Possession
By: /s/ Alan J. Miller
------------------
Name: Alan J. Miller
Title: Vice President
INTERMET ILLINOIS, INC.,
as Debtor and Debtor-in-Possession
By: /s/ Alan J. Miller
------------------
Name: Alan J. Miller
Title: Vice President
S-2
INTERMET INTERNATIONAL, INC.,
as Debtor and Debtor-in-Possession
By: /s/ Alan J. Miller
------------------
Name: Alan J. Miller
Title: Vice President
INTERMET U.S. HOLDING, INC.,
as Debtor and Debtor-in-Possession
By: /s/ Alan J. Miller
------------------
Name: Alan J. Miller
Title: Vice President
IRONTON IRON, INC.,
as Debtor and Debtor-in-Possession
By: /s/ Alan J. Miller
------------------
Name: Alan J. Miller
Title: Vice President
LYNCHBURG FOUNDRY COMPANY,
as Debtor and Debtor-in-Possession
By: /s/ Alan J. Miller
------------------
Name: Alan J. Miller
Title: Vice President
S-3
NORTHERN CASTINGS CORPORATION,
as Debtor and Debtor-in-Possession
By: /s/ Alan J. Miller
------------------
Name: Alan J. Miller
Title: Vice President
SUDBURY, INC.,
as Debtor and Debtor-in-Possession
By: /s/ Alan J. Miller
------------------
Name: Alan J. Miller
Title: Vice President
SUDM, INC.,
as Debtor and Debtor-in-Possession
By: /s/ Alan J. Miller
------------------
Name: Alan J. Miller
Title: Vice President
TOOL PRODUCTS, INC.,
as Debtor and Debtor-in-Possession
By: /s/ Alan J. Miller
------------------
Name: Alan J. Miller
Title: Vice President
S-4
WAGNER CASTINGS COMPANY,
as Debtor and Debtor-in-Possession
By: /s/ Alan J. Miller
------------------
Name: Alan J. Miller
Title: Vice President
WAGNER HAVANA, INC.,
as Debtor and Debtor-in-Possession
By: /s/ Alan J. Miller
------------------
Name: Alan J. Miller
Title: Vice President
Notice Address for all Borrowers:
c/o INTERMET Corporation
5445 Corporate Drive, Suite 200
Troy, Michigan 48098-2683
Attention:
Telephone:
Facsimile:
S-5
LENDERS: DEUTSCHE BANK TRUST
COMPANY AMERICAS,
individually and as Collateral Agent
By: /s/ Frank Fazio
------------------
Name: Frank Fazio
Title: Director
Notice Address:
Attention: Frank Fazio
60 Wall Street
New York, New York 10005
THE BANK OF NOVA SCOTIA,
individually and as Administrative Agent
By: /s/ D.N. Gillespie
---------------------------
Name: D.N. Gillespie
Title: Managing Director
Notice Address:
Attention: D.N. Gillespie
One Liberty Plaza
New York, New York 10006
1
EXHIBIT I(a)
[FORM OF NOTICE OF BORROWING]
NOTICE OF BORROWING
Pursuant to that certain Debtor-in-Possession Credit Agreement dated as
of October [__], 2004, as amended, supplemented or otherwise modified to the
date hereof (said Debtor-in-Possession Credit Agreement, as so amended,
supplemented or otherwise modified, being the "CREDIT AGREEMENT", the terms
defined therein and not otherwise defined herein being used herein as therein
defined), by and among Intermet Corporation ("COMPANY") and the subsidiaries of
Company listed on the signature pages thereof (collectively, Company and such
Subsidiaries of Company are "BORROWERS" and each a "BORROWER"); the financial
institutions listed on the signature pages thereof as Lenders; Deutsche Bank
Trust Company Americas, as Collateral Agent and as Co-Agent; and The Bank of
Nova Scotia, as Administrative Agent; this represents Borrowers' request to
borrow as follows:
1. Date of borrowing: ___________________, 200__
2. Amount of borrowing: $___________________
3. Interest rate option: [ ] a. Base Rate Loan(s)
[ ] b. Eurodollar Rate Loan(s)
The proceeds of such Revolving Loans are to be credited to the account of
Borrowers at the Funding and Payment Office.
[Each of the] [The] undersigned Officer[s], to the best of his or her
knowledge, and Borrowers certify that:
(i) (a) The estimates contained in the Budget would be good
faith estimates if made on the date hereof, (b) the assumptions on
which the Budget are based are reasonable as of the date hereof, (c)
the proceeds of the Revolving Loans requested hereby shall be applied
in accordance with subsection 7.6 and for a purposes or purposes
identified in the Budget and (d) the aggregate Revolving Loans to be
made on the date hereof do not exceed the applicable limitations
thereon in subsection 7.6A;
(ii) The representations and warranties contained in the
Credit Agreement and the other Loan Documents are true, correct and
complete in all material respects on and as of the date hereof to the
same extent as though made on and as of the date hereof, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties were
true, correct and complete in all material respects on and as of such
earlier date; provided, that, if a representation and warranty is
qualified as to materiality, with respect to such representation and
warranty the materiality qualifier set forth above shall be disregarded
for purposes of this condition;
(iii) The [Interim Borrowing Order] [and] [Final Borrowing
Order] is [are] in
I-1
full force and effect and has [have] not been stayed by the Bankruptcy
Court or any other court of competent jurisdiction;
(iv) No event has occurred and is continuing or would result
from the consummation of the borrowing contemplated hereby that would
constitute an Event of Default or a Potential Event of Default;
(v) Each Loan Party has performed in all material respects all
agreements and satisfied all conditions including, without limitation,
those set forth in Section 4 thereof, which the Credit Agreement
provides shall be performed or satisfied by it on or before the date
hereof;
(vi) No order, judgment or decree of any arbitrator, the
Bankruptcy Court or other Government Authority purports to enjoin or
restrain any Lender from making the Revolving Loans to be made by it on
the date hereof;
(vii) After the consummation of the borrowing contemplated by
this Notice of Borrowing, the Total Utilization of Revolving
Commitments will not exceed the least of (a) the aggregate Revolving
Commitments, (b) the Borrowing Base and (c) the amount of Revolving
Loans and Revolving Letters of Credit permitted to be outstanding under
the Credit Agreement pursuant to the Interim Borrowing Order or Final
Borrowing Order (as applicable); and
(viii) No pleading has been filed in the Bankruptcy Court (or
any other court of competent jurisdiction) by any party in interest
which has not been withdrawn, dismissed or denied within 55 days after
filing seeking (a) to dismiss or convert any of the Chapter 11 Cases to
a Chapter 7 case, (b) the appointment of a Chapter 11 trustee in any of
the Chapter 11 Cases, (c) the appointment of an examiner having
enlarged powers relating to the operation of the business of Borrowers
(beyond those set forth in Sections 1106(a)(3) and (4) of the
Bankruptcy Code), (d) the granting of a super-priority claim or a Lien
pari passu or senior to that of the Collateral Agent granted pursuant
to the Collateral Documents, the Interim Borrowing Order and/or the
Final Borrowing Order, (e) to stay, reverse, vacate, or otherwise
modify the Interim Borrowing Order or the Final Borrowing Order without
the prior written consent of each Agent and the Requisite Lenders, or
(f) relief from the automatic stay (or any other injunction having
similar effect) so as to allow a third party to proceed against any
material property or assets of Borrowers.
[The remainder of this page is intentionally left blank.]
I-2
DATED: _________________, 200__ INTERMET CORPORATION
By: ________________________________
Name:
Title:
EACH OF THE ENTITIES NAMED AS
BORROWERS ON THE SIGNATURE PAGES TO
THE CREDIT AGREEMENT
By: ________________________________
Name:
Title:
I-S-1
EXHIBIT I(b)
[FORM OF NOTICE OF WITHDRAWAL]
NOTICE OF WITHDRAWAL
Pursuant to that certain Debtor-in-Possession Credit Agreement dated as
of October [__], 2004, as amended, supplemented or otherwise modified to the
date hereof (said Debtor-in-Possession Credit Agreement, as so amended,
supplemented or otherwise modified, being the "CREDIT AGREEMENT", the terms
defined therein and not otherwise defined herein being used herein as therein
defined), by and among Intermet Corporation ("COMPANY") and the subsidiaries of
Company listed on the signature pages thereof (collectively, Company and such
Subsidiaries of Company are "BORROWERS" and each a "BORROWER"); the financial
institutions listed on the signature pages thereof as Lenders; Deutsche Bank
Trust Company Americas, as Collateral Agent and as Co-Agent; and The Bank of
Nova Scotia, as Administrative Agent; this represents Borrowers' request to
borrow as follows:
1. Date of Withdrawal: ___________________, 200__
2. Amount of Withdrawal: $___________________
[Each of the] [The] undersigned Officer[s], to the best of his or her
knowledge, and Borrowers certify that:
(i) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true, correct and complete
in all material respects on and as of the date hereof to the same
extent as though made on and as of the date hereof, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties were
true, correct and complete in all material respects on and as of such
earlier date; provided, that, if a representation and warranty is
qualified as to materiality, with respect to such representation and
warranty the materiality qualifier set forth above shall be disregarded
for purposes of this condition;
(ii) No event has occurred and is continuing or would result
from the consummation of the borrowing contemplated hereby that would
constitute an Event of Default or a Potential Event of Default;
(iii) The [Interim Borrowing Order] [and] [Final Borrowing
Order] is [are] in full force and effect and has [have] not been stayed
by the Bankruptcy Court or any other court of competent jurisdiction;
(iv) Each Loan Party has performed in all material respects
all agreements and satisfied all conditions including, without
limitation, those set forth in Section 4 thereof, which the Credit
Agreement provides shall be performed or satisfied by it on or before
the date hereof;
(v) No pleading has been filed in the Bankruptcy Court (or any
other court of
I-1
competent jurisdiction) by any party in interest which has not been
withdrawn, dismissed or denied within 55 days after filing seeking (a)
to dismiss or convert any of the Chapter 11 Cases to a Chapter 7 case,
(b) the appointment of a Chapter 11 trustee in any of the Chapter 11
Cases, (c) the appointment of an examiner having enlarged powers
relating to the operation of the business of Borrowers (beyond those
set forth in Sections 1106(a)(3) and (4) of the Bankruptcy Code), (d)
the granting of a super-priority claim or a Lien pari passu or senior
to that of the Collateral Agent granted pursuant to the Collateral
Documents, the Interim Borrowing Order and/or the Final Borrowing
Order, (e) to stay, reverse, vacate, or otherwise modify the Interim
Borrowing Order or the Final Borrowing Order without the prior written
consent of each Agent and the Requisite Lenders, or (f) relief from the
automatic stay (or any other injunction having similar effect) so as to
allow a third party to proceed against any material property or assets
of Borrowers; and
(vi) The contemplated amounts proposed to be withdrawn are
for purposes of a type of expenditure projected to occur in the Budget
for this week, and after giving effect to the contemplated application
of amounts proposed to be withdrawn from the Restricted Cash Account,
Borrowers will be in compliance with subsection 7.6A.
[The remainder of this page is intentionally left blank.]
I-2
DATED: _________________, 200__ INTERMET CORPORATION
By: ___________________________________
Name:
Title:
EACH OF THE ENTITIES NAMED AS BORROWERS
ON THE SIGNATURE PAGES TO THE CREDIT
AGREEMENT
By: ___________________________________
Name:
Title:
EXHIBIT II
[FORM OF NOTICE OF CONVERSION/CONTINUATION]
NOTICE OF CONVERSION/CONTINUATION
Pursuant to that certain Debtor-in-Possession Credit Agreement dated as
of October [__], 2004, as amended, supplemented or otherwise modified to the
date hereof (said Debtor-in-Possession Credit Agreement, as so amended,
supplemented or otherwise modified, being the "CREDIT AGREEMENT", the terms
defined therein and not otherwise defined herein being used herein as therein
defined), by and among Intermet Corporation ("COMPANY") and the subsidiaries of
Company listed on the signature pages thereof (collectively, Company and such
Subsidiaries of Company are "BORROWERS" and each a "BORROWER"); the financial
institutions listed on the signature pages thereof as Lenders; Deutsche Bank
Trust Company Americas, as Collateral Agent and as Co-Agent; and The Bank of
Nova Scotia, as Administrative Agent; this represents Borrowers' request to
convert or continue Revolving Loans as follows:
1. Date of conversion/continuation: ____________, 200__
2. Amount of Revolving Loans being converted/continued: $______________
3. Nature of conversion/continuation:
[ ] a.Conversion of Base Rate Loans to Eurodollar Rate Loans
[ ] b.Conversion of Eurodollar Rate Loans to Base Rate Loans
[ ] c.Continuation of Eurodollar Rate Loans as such
In the case of a conversion to or continuation of Eurodollar Rate
Loans, [each of] the undersigned Officer[s], to the best of his or her
knowledge, and Borrowers certify that no Event of Default or Potential Event of
Default has occurred and is continuing or would result from the consummation of
the conversion or continuation contemplated hereby.
[Remainder of page intentionally left blank.]
II-1
DATED: _________________, 200__ INTERMET CORPORATION
By: ___________________________________
Name:
Title:
EACH OF THE ENTITIES NAMED AS BORROWERS
ON THE SIGNATURE PAGES TO THE CREDIT
AGREEMENT
By: ___________________________________
Name:
Title:
II-S-1
EXHIBIT III
FORM OF INTERIM BORROWING ORDER
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
IN RE: : CASE NO. 04-67597
: CHAPTER 11
INTERMET CORPORATION ET AL., :
:
: (JOINTLY ADMINISTERED)
DEBTORS. :
INTERIM ORDER PURSUANT TO BANKRUPTCY CODE SECTIONS 105, 361, 363,
364, 503 AND 507: (A) AUTHORIZING DEBTORS-IN-POSSESSION TO (i) OBTAIN
SENIOR AND JUNIOR SECURED POST-PETITION FINANCING AND (ii) UTILIZE
CASH COLLATERAL, (B) GRANTING SUPERPRIORITY CLAIMS TO POST-PETITION
LENDERS, (C) GRANTING ADEQUATE PROTECTION TO
PRE-PETITION LENDERS AND (D) SCHEDULING A FINAL HEARING
Upon the motion (the "Motion") of Intermet Corporation
("Intermet") and each of its domestic subsidiaries that are debtors and
debtors-in-possession herein (collectively, the "Debtors"), dated October 8,
2004, seeking the entry of this order (the "Interim Order"):
(a) authorizing the Debtors, pursuant to Sections 105, 361,
363, 364, 503 and 507 of the United States Bankruptcy Code, 11 U.S.C. Sections
101, et seq. (the "Bankruptcy Code") and Rules 2002, 4001, 9007 and 9014 of the
Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") to:
(i) incur, on a joint and several basis,
post-petition financing under a revolving credit facility
available for the making of loans and other financial
accommodations, including the issuance of letters of credit,
up to an aggregate principal amount of $60 million (the
"Post-Petition Loans"; with $20 million of the Post-Petition
Loans authorized by this Interim Order, collectively, the "DIP
Facilities"), on a senior secured priming basis and with
superpriority administrative expense claim status, subject to
the terms, conditions, priorities and provisions set forth
herein and in the Debtor-In-Possession Credit Agreement
described below and such other agreements, instruments and
documents executed and/or delivered from time to time in
connection therewith, including, without limitation, the
Budget as defined therein (as amended from time to time,
collectively, the "DIP Financing Documents");
(ii) enter into, and perform under, the DIP Financing
Documents which (1) include a Debtor-In-Possession Credit
Agreement (as amended from time to time, the "DIP Credit
Agreement") by and among the Debtors, as borrowers (the
"Borrowers"), the financial institutions party thereto from
time to time (the "DIP Lenders"; which term shall include the
issuing banks under all letters of credit), The Bank of Nova
Scotia, as administrative agent (the "DIP Administrative
Agent"), and Deutsche Bank Trust Company Americas, as lead
arranger, book manager, co-agent and collateral agent for the
DIP Lenders (the "DIP Collateral Agent", and together with the
DIP Administrative Agent, the "DIP Agents"), (2) provide that
all amounts owed from time to time under the DIP Financing
Documents shall be jointly and severally, unconditionally and
irrevocably guaranteed by the domestic non-debtor entities set
forth on Schedule 1 annexed hereto (collectively, the
"Guarantors"; which schedule may be updated from time to time
without further order of this Court or approval of any party
in interest and which updated schedule shall be deemed a part
hereof from and as of the date hereof) and (3) provide that
the Debtors shall grant to the DIP Agents and the DIP
2
Lenders superpriority administrative expense claims and that
the Debtors shall grant to the DIP Collateral Agent (for the
benefit of the DIP Lenders) first priority, valid, enforceable
and perfected security interests, mortgages, liens and offset
rights ("Liens") on all property of the Debtors' estates
(other than the "Excluded Assets," as defined in paragraph
7(c)) now or hereafter acquired, and all products and proceeds
thereof, with the rights, privileges and priorities described
herein and in the DIP Financing Documents; and
(iii) cause the Guarantors to jointly and severally
and unconditionally and irrevocably guaranty all obligations
from time to time payable under the DIP Financing Documents
and grant to the DIP Collateral Agent (for the benefit of the
DIP Lenders) first priority, valid, enforceable and perfected
liens on all of the Guarantors' property, now or hereafter
acquired, and all products and proceeds thereof, with the
rights, privileges and priorities described in the DIP
Financing Documents;
(b) granting to the DIP Collateral Agent (for the benefit of
the DIP Lenders) as collateral security for all obligations incurred under the
DIP Financing Documents:
(i) pursuant to Section 364(c)(2) of the Bankruptcy
Code, valid, enforceable, perfected and unavoidable first
priority Liens on all unencumbered property of the Debtors'
estates (other than the applicable Excluded Assets), now or
hereafter acquired, of whatever kind or nature, at any time
existing or arising, now or in the future, wherever located,
and all proceeds and products thereof, subject only to the
Carve-Out (as defined in paragraph 15 below);
3
(ii) pursuant to Section 364(c)(3) of the Bankruptcy
Code, valid, enforceable, perfected and unavoidable Liens on
all property of the Debtors' estates (other than the
applicable Excluded Assets), now or hereafter acquired, of
whatever kind or nature, at any time existing or arising, now
or in the future, wherever located, and all proceeds and
products thereof, which Liens shall be junior only to valid,
enforceable, perfected and unavoidable Liens in existence on
the Filing Date (as defined in "Findings of Fact" paragraph A)
in favor of parties other than the Pre-Petition Agent and the
Pre-Petition Lenders (as such terms are defined in "Findings
of Fact" paragraph (B)(i)) (the "Third Party Filing Date
Liens") and subject to the Carve-Out;
(iii) pursuant to Section 364(d)(1) of the Bankruptcy
Code, valid, enforceable, perfected and unavoidable first
priority, senior priming Liens on all property of the Debtors'
estates (other than the Excluded Assets), now or hereafter
acquired, of whatever kind or nature, at any time existing or
arising, now or in the future, wherever located, and all
proceeds and products thereof, which shall prime the
Pre-Petition Liens (as defined in "Findings of Fact" paragraph
B(viii)), the adequate protection Liens granted to the
Pre-Petition Agent (for the benefit of the Pre-Petition
Lenders) and any other Liens, rights or interests (including,
without limitation, offsets but subject to the last sentence
of paragraph 7(c)) asserted by any party in interest after the
Filing Date; provided that such priming Liens granted to the
DIP Collateral Agent shall be subject to the Carve-Out and
shall not prime Third Party Filing Date Liens; and
4
(iv) valid, enforceable, perfected and non-voidable
Liens on all of the Guarantors' property, now or hereafter
acquired, of whatever kind or nature, at any time existing or
arising, now or in the future, wherever located, and all
proceeds and products thereof;
(c) granting to the DIP Agents and the DIP Lenders, pursuant
to Section 364(c)(1) of the Bankruptcy Code, superpriority administrative claims
for any and all obligations from time to time outstanding under the DIP
Financing Documents, having priority (other than with respect to the Carve-Out)
over any and all administrative expenses of any kind, including as specified in
Sections 503(b) and 507(b) of the Bankruptcy Code, whether now or hereafter
incurred;
(d) authorizing the Debtors, pursuant to Sections 361 and 363
of the Bankruptcy Code, to use the Pre-Petition Lenders' and the DIP Lenders'
Cash Collateral (as defined in "Findings of Fact" paragraph B(vii)) in
accordance with the terms hereof and the DIP Financing Documents and providing
the Pre-Petition Lenders with adequate protection of their interests in the
Pre-Petition Collateral (as defined in "Findings of Fact" paragraph B(viii))
pursuant to Sections 361, 363(e), 364(c) and 364(d), and all as more
particularly described herein;
(e) requesting interim approval of the DIP Financing Documents
and the transactions contemplated thereby; and
(f) scheduling a final hearing (the "Final Hearing") to be
held before this Court on November 5, 2004 at 11:00 a.m. (which date shall be no
later than 30 days after entry of this Interim Order),(1) to consider entry of a
final order approving the Motion, the DIP Facilities and the DIP Financing
Documents and the transactions contemplated thereby (including, without
- ----------------
(1) Objections to the relief addressed in this Order and the proposed Final
Order shall be filed and served no later than November 3, 2004.
5
limitation, the arrangements described therein concerning the L/C Facility
Agreement, L/C Facility Agreement Obligations and the L/C Cash Collateral (as
such terms are defined in "Findings of Fact" paragraphs B(v) and (vi)) on a
final basis and authorizing the continued use of Cash Collateral and granting
adequate protection therefor on a final basis, as set forth in the Motion, which
final order shall be in form and substance satisfactory to the DIP Agents (the
"Final Order");
and an interim hearing having been held before this Court on October 19, 2004
(the "Interim Hearing"); and upon the record of the Interim Hearing and all the
pleadings filed with this Court; and the Debtors having given due and proper
notice of the Motion and the Interim Hearing pursuant to Bankruptcy Rules 2002,
4001(b), (c) and (d), 9007 and 9014 as set forth in the Motion (including notice
to the Pre-Petition Agent, the twenty (20) largest unsecured creditors of the
Debtors (on a combined basis) and the office of the United States Trustee for
the Eastern District of Michigan); and the Court having concluded that entry of
this Interim Order is in the best interests of the Debtors, their creditors and
estates; and sufficient cause appearing therefor, the Court makes the following
FINDINGS OF FACT:
A. On September 29, 2004 (the "Filing Date"), the Debtors
commenced the within cases by filing voluntary petitions for relief under
chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the
Eastern District of Michigan, Southern Division (the "Court"). The Debtors
continue to operate their businesses and manage their properties as
debtors-in-possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy
Code. No request has been made for the appointment of a trustee or examiner in
these chapter 11 cases.
6
B. Without prejudice to the rights of the Committee (as
defined in paragraph 15) but solely to the extent provided in paragraph 28
below, the Debtors stipulate and acknowledge as follows:
(i) On January 8, 2004, Intermet, as the borrower, entered
into that certain Credit Agreement (as amended from time to time,
including without limitation by that certain First Amendment dated
April 13, 2004, the "Pre-Petition Credit Agreement") with The Bank of
Nova Scotia ("Scotiabank") as agent (in such capacity, the
"Pre-Petition Agent"), the financial institutions from time to time
party thereto as lenders (the "Pre-Petition Lenders"), pursuant to
which the Pre-Petition Lenders agreed to provide to Intermet $120
million in term loans and $90 million in revolving loans (the
"Pre-Petition Loans"). Certain domestic subsidiaries of Intermet
executed that certain Second Amended and Restated Guaranty Agreement,
dated as of January 8, 2004, as guarantors of payment (in such
capacity, the "Pre-Petition Guarantors"), in favor of the Pre-Petition
Lenders, guaranteeing the repayment of the Pre-Petition Loans and all
other amounts (including without limitation interest and fees) owing in
respect of the Pre-Petition Credit Agreement (as amended from time to
time, the "Guaranty Agreement"). The Pre-Petition Guarantors are each,
directly or indirectly, wholly-owned domestic subsidiaries of Intermet
and are Debtors herein. The guarantees of payment of the Pre-Petition
Guarantors shall hereinafter be referred to as the "Pre-Petition Credit
Agreement Guarantees." The collective obligations of the Debtors
arising under the Pre-Petition Credit Agreement, the Guaranty
Agreement, and the related collateral documents described below in
respect of the obligations under the Pre-Petition Credit Agreement
shall hereinafter be referred to as the "Pre-Petition Credit Agreement
Obligations." The
7
Pre-Petition Credit Agreement Obligations exclude any obligations of
the Debtors under the L/C Facility Agreement.
(ii) Prior to the Filing Date, Intermet executed and delivered
that certain First Amended and Restated Borrower Pledge and Security
Agreement, dated as of January 8, 2004 (as amended from time to time,
the "Pre-Petition Intermet Pledge and Security Agreement"), pursuant to
which Intermet granted to the Pre-Petition Agent for the benefit of the
Pre-Petition Lenders, and to secure the Pre-Petition Credit Agreement
Obligations, valid and enforceable first priority Liens in inter alia
substantially all of the personal and intangible properties of
Intermet, the Debtors believing such grant excludes the L/C Cash
Collateral but otherwise includes without limitation all other
accounts, deposit accounts, equipment, fixtures, general intangibles,
goods, instruments, inventory, investment property, bank and other
accounts and all cash and all investments therein, and the proceeds,
including cash and noncash proceeds, of all of the foregoing, but
solely to the extent provided in the Pre-Petition Intermet Pledge and
Security Agreement. The Pre-Petition Agent timely and properly filed
Uniform Commercial Code ("UCC") financing statements with respect to
Intermet, thereby perfecting its Liens in such properties for which a
UCC financing statement is sufficient to perfect a security interest.
In addition, pursuant to the Pre-Petition Intermet Pledge and Security
Agreement, Intermet pledged and assigned to the Pre-Petition Agent, and
granted to the Pre-Petition Agent a Lien on, as collateral security for
the Pre-Petition Credit Agreement Obligations, all of the right, title
and interest of Intermet in all of the outstanding shares of Capital
Securities (as defined in the Pre-Petition Intermet Pledge and Security
Agreement) and all of the
8
indebtedness from time to time owned by Intermet.(1) The Pre-Petition
Intermet Pledge and Security Agreement, together with the delivery of
the applicable documents to the Pre-Petition Agent, create valid,
perfected and enforceable first priority Liens in favor of the
Pre-Petition Agent (for the benefit of the Pre-Petition Lenders) in
such Capital Securities and such indebtedness.
(iii) Prior to the Filing Date, the Pre-Petition Guarantors
executed and delivered that certain First Amended and Restated
Subsidiary Pledge and Security Agreement, dated as of January 8, 2004
(as amended from time to time, the "Pre-Petition Subsidiary Pledge and
Security Agreement"), pursuant to which the Pre-Petition Guarantors
granted to the Pre-Petition Agent for the benefit of the Pre-Petition
Lenders, and to secure the Pre-Petition Credit Agreement Obligations,
valid and enforceable first priority Liens in inter alia substantially
all of the personal and intangible properties of the Pre-Petition
Guarantors, including without limitation all accounts, deposit
accounts, equipment, fixtures, general intangibles, goods, instruments,
inventory, investment property, bank and other accounts and all cash
and all investments therein, and the proceeds, including cash and
noncash proceeds, of all of the foregoing, but solely to the extent
provided in the Pre-Petition Subsidiary Pledge and Security Agreement.
The Pre-Petition Agent timely and properly filed UCC financing
statements with respect to the Pre-Petition Guarantors, thereby
perfecting its Liens in such properties for which a UCC financing
statement is sufficient to perfect a security interest. In addition,
pursuant to the Pre-Petition Subsidiary Pledge and Security Agreement,
the Pre-Petition Guarantors pledged and assigned to the Pre-Petition
Agent, and granted to the Pre-Petition Agent a
- -----------------------
(1) For the avoidance of doubt, neither the Pre-Petition Intermet Pledge and
Security Agreement nor the Pre-Petition Subsidiary Pledge and Security Agreement
grant Liens on more than 65% of the equity interests of the Debtors'
9
Lien in, as collateral security for the Pre-Petition Credit Agreement
Obligations, all of the right, title and interest of the Pre-Petition
Guarantors in all of the outstanding shares of Capital Securities (as
defined in the Pre-Petition Subsidiary Pledge and Security Agreement)
and all of the indebtedness from time to time owned by such
Pre-Petition Guarantors. The Pre-Petition Subsidiary Pledge and
Security Agreement, together with the delivery of the applicable
documents to the Pre-Petition Agent, created valid, perfected and
enforceable first priority Liens in favor of the Pre-Petition Agent
(for the benefit of the Pre-Petition Lenders) in such Capital
Securities and such indebtedness.
(iv) Prior to the Filing Date, the Debtors executed various
mortgages, assignments, deeds of trust, and various amendments thereof
(collectively, the "Pre-Petition Credit Agreement Mortgages") on
various of their real properties including those located in Alexander
City, Alabama; Stevensville, Michigan; Columbus, Georgia; Monroe City,
Palmyra, and Hannibal, Missouri; Sturtevant, Wisconsin; Jackson and
Pulaski, Tennessee; Lynchburg and Radford, Virginia; Ironton, Ohio;
Hibbing and New Hope, Minnesota; and Decatur and Havana, Illinois
(collectively, the "Mortgaged Properties"), in favor of the
Pre-Petition Agent (for the benefit of the Pre-Petition Lenders) to
secure the Pre-Petition Credit Agreement Obligations, but solely to the
extent provided in the Pre-Petition Credit Agreement Mortgages. The
Pre-Petition Credit Agreement Mortgages have been properly filed and
create valid, perfected and enforceable Liens against the Mortgaged
Properties, solely to the extent described in the Pre-Petition Credit
Agreement Mortgages, securing the Pre-Petition Credit Agreement
Obligations.
- ----------------
non-U.S. subsidiaries.
10
(v) Prior to the Filing Date, Intermet entered into that
certain Letter of Credit Facility Agreement, dated as of January 8,
2004, among Intermet, the lenders listed therein (the "L/C Facility
Lenders"), and Scotiabank as Administrative Agent and Issuer (as such
terms are defined therein and which terms shall be included in the
definition of "L/C Facility Lenders") (as amended from time to time,
the "L/C Facility Agreement") pursuant to which Intermet agreed to
reimburse the Issuer for any draws under letters of credit issued
pursuant to the L/C Facility Agreement and to pay fees to the L/C
Facility Lenders in respect of letters of credit issued pursuant to the
L/C Facility Agreement, interest in respect of unreimbursed draws under
such letters of credit and fees and expenses (including attorneys'
fees) of the L/C Facility Lenders.
(vi) Prior to the Filing Date, Intermet entered into that
certain Cash Collateral Agreement, dated as of January 8, 2004, between
Intermet and Scotiabank, pursuant to which Intermet pledged to
Scotiabank (solely to the extent described therein) a valid and
enforceable first priority Lien in all of Intermet's right, title and
interest in the "Cash Collateral" and "Cash Collateral Account" (as
each such term is defined in the Cash Collateral Agreement and are
collectively referred to herein as the "L/C Cash Collateral") as
security for Intermet's obligations under the L/C Facility Agreement
and the Cash Collateral Agreement (collectively, "L/C Facility
Agreement Obligations"). The Debtors believe that the L/C Cash
Collateral does not secure the Pre-Petition Credit Agreement
Obligations.
(vii) As of the Filing Date, all cash and cash equivalents of
the Debtors and any and all cash and cash equivalents generated after
the Filing Date as proceeds, products, offspring or profits of the
Pre-Petition Collateral (but expressly excluding for this purpose
11
the L/C Cash Collateral) constitutes collateral securing the
Pre-Petition Credit Agreement Obligations within the meaning of Section
363(a) and Section 552(b) of the Bankruptcy Code (the "Cash
Collateral").
(viii) The Pre-Petition Intermet Pledge and Security
Agreement, Pre-Petition Subsidiary Pledge and Security Agreement,
Guaranty Agreement, and the Pre-Petition Credit Agreement Mortgages,
together with the financing statements, notices of liens, assignments,
amendments, modifications, and continuations thereof, and other related
instruments, shall be referred to together as the "Pre-Petition
Collateral Documents." All of the collateral in which any of the
Debtors granted the Pre-Petition Lenders a Lien or other encumbrance or
property interest, including without limitation the Cash Collateral
(but expressly excluding for this purpose the L/C Cash Collateral),
shall be referred to as the "Pre-Petition Collateral", but solely to
the extent provided in the Pre-Petition Collateral Documents, and all
such Liens shall be referred to as the "Pre-Petition Liens".
(ix) The Debtors are truly and justly indebted to the
Pre-Petition Lenders, and as of the Filing Date and prior to giving
effect to this Interim Order (A) Intermet was liable to the
Pre-Petition Lenders in respect of (i) the loans made by them pursuant
to the Pre-Petition Credit Agreement in the aggregate principal amount
of $161,000,000 under the Pre-Petition Credit Agreement, plus interest,
fees and expenses (x) accrued but unpaid as of the Filing Date and (y)
accrued and accruing subsequent to the Filing Date and (ii) letters of
credit issued pursuant to the Pre-Petition Credit Agreement in the
aggregate face amount of $23,785,761.90, and (B) each Pre-Petition
Guarantor was directly and primarily liable to the Pre-Petition Lenders
pursuant to the terms of the Pre-Petition Credit Agreement Guarantees.
12
(x) As of the Filing Date, the Liens granted to the
Pre-Petition Agent for the benefit of the Pre-Petition Lenders pursuant
to the Pre-Petition Collateral Documents are valid, binding, perfected
and enforceable Liens in the Pre-Petition Collateral and are junior and
subject to only Liens and encumbrances permitted under the Pre-Petition
Credit Agreement, to the extent such permitted Liens and encumbrances
are valid, enforceable, perfected and senior to the Liens of the
Pre-Petition Agent on the Pre-Petition Collateral (the "Permitted
Liens").
(xi) Intermet is truly and justly indebted to the L/C Facility
Lenders in the amount of $35,690,411 on a contingent basis in respect
of Irrevocable Letter of Credit #S330/43695/00 dated December 23, 1999
(the "Georgia Letter of Credit") issued by the Issuer for the account
of Intermet in favor of BNY Midwest Trust Company in the maximum stated
amount of $35,690,411, and Intermet is further indebted to the L/C
Facility Lenders (solely to the extent provided in the L/C Facility
Agreement) in respect of fees and expenses (x) accrued but unpaid under
the L/C Facility Agreement as of the Filing Date and (y) accrued and
accruing subsequent to the Filing Date.
(xii) As of the Filing Date, Scotiabank's Lien on the L/C Cash
Collateral is a valid, binding, perfected and enforceable first
priority Lien on the L/C Cash Collateral.
C. On October 1, 2004, after due notice and a hearing, the
Court entered on its docket the Stipulated Interim Order Authorizing the Use of
Cash Collateral and Granting Adequate Protection Pursuant to 11 U.S.C. Sections
361, 362(d) and 363 and Scheduling a Final Hearing Pursuant to Rule 4001 (the
"Cash Collateral Stipulation"). Pursuant to the Cash Collateral Stipulation, the
Debtors were granted authority for limited use of Cash Collateral and the
Pre-Petition Agent and the Pre-Petition Lenders were granted certain adequate
protection, in
13
each case, as more particularly described in the Cash Collateral Stipulation.
The Debtors do not believe that they can remain viable entities and successfully
reorganize if their sole source of liquidity is the limited use of Cash
Collateral permitted under the Cash Collateral Stipulation. Accordingly, in
their business judgment and after reviewing alternative financing proposals, the
Debtors have concluded that the approval of the DIP Financing Documents and
having the authority to access liquidity thereunder, subject to the terms
thereof, is critical and immediate and in the best interest of their estates and
creditors (unsecured and secured) and all other parties in interest in these
chapter 11 cases.
D. The Debtors advise that it is critical to their continued
operation and the administration of these chapter 11 cases that the Debtors be
permitted to continue to use certain of the Cash Collateral and incur the
Post-Petition Loans for payroll, payroll expenses and certain other operating
expenses to the extent and as specifically set forth in the Budget delivered in
connection with the DIP Financing Documents.
E. The Debtors have an immediate need to obtain the
Post-Petition Loans and continue the use of Cash Collateral in order to maintain
business relationships with their vendors, suppliers and customers, pay
necessary employees and otherwise finance their operations and maintain their
continued viability. In the absence of the relief requested hereby, the
continued operation of the Debtors' business would not be possible and immediate
and irreparable harm to the Debtors' creditors (including, without limitation,
unsecured creditors), and the Debtors' estates would occur. The ability of the
Debtors to obtain sufficient working capital and liquidity through the use of
Cash Collateral and incurrence of new indebtedness for borrowed money and other
financial accommodations under the DIP Financing Documents is vital to the
preservation and maintenance of the going concern values of the Debtors and to a
successful reorganization of the Debtors.
14
F. The Debtors have engaged in a reasonable exploration of the
availability of alternate credit and are unable to obtain the financing
necessary for the operation of their business either (i) on an unsecured basis
under Section 503(b)(1) of the Bankruptcy Code, (ii) pursuant to Sections 364(a)
or 364(b) of the Bankruptcy Code, (iii) solely on a junior secured basis under
Section 364(c)(3) of the Bankruptcy Code, or (iv) on any other terms or
conditions more favorable to the Debtors than the terms and conditions set forth
in the DIP Financing Documents.
G. The Debtors do not have sufficient available sources of
working capital, including after giving effect to the use of Cash Collateral to
carry on the operation of their business without the Post-Petition Loans. The
Debtors have requested the authority to incur the Post-Petition Loans pursuant
to the terms and conditions set forth in the DIP Financing Documents. The
Debtors have further requested that they be authorized to immediately incur $20
million in advance of the Final Order authorizing the entire amount of the
Post-Petition Loans so that they will be able to pay immediately certain
necessary expenses.
H. Pursuant to Sections 361, 363(e) and 364(c) and (d) of the
Bankruptcy Code, the Pre-Petition Agent and the Pre-Petition Lenders are
entitled to adequate protection of their interests in the Pre-Petition
Collateral (including, without limitation, the Cash Collateral) and the L/C
Facility Lenders are entitled to adequate protection of their interests in the
L/C Cash Collateral in order to protect the Pre-Petition Agent and the
Pre-Petition Lenders from any diminution in the value of the Pre-Petition
Collateral and the L/C Facility Lenders from any diminution in the value of the
L/C Cash Collateral resulting from, among other things (i) in the case of the
Pre-Petition Agent and the Pre-Petition Lenders, the Debtors' use of Cash
Collateral, (ii) in the case of the Pre-Petition Agent and the Pre-Petition
Lenders, the incurrence by the Debtors of the post-petition financing secured by
the priming Liens granted to the DIP Collateral
15
Agent (for the benefit of the DIP Lenders) pursuant to this Interim Order and
the DIP Financing Documents, (iii) in the case of the Pre-Petition Agent and the
Pre-Petition Lenders, the Debtors' use, sale or lease of the Pre-Petition
Collateral other than Cash Collateral, and (iv) in the case of the Pre-Petition
Agent, the Pre-Petition Lenders and the L/C Facility Lenders, the imposition of
the automatic stay.
I. The Debtors and their estates will receive substantial
benefit from the loans and other financial accommodations to be provided by the
DIP Agents and the DIP Lenders under the DIP Financing Documents and from the
use of Cash Collateral in accordance with the terms hereof and the DIP Financing
Documents. The loans and other financial accommodations to be provided under the
DIP Financing Documents and the use of Cash Collateral are necessary to fund the
business of the Debtors and will, subject to the Budget, contribute to payment
of the actual and necessary costs and expenses of preserving their estates and
is critical for the Debtors to successfully reorganize.
J. Based upon the record of the Interim Hearing and the
pleadings filed with this Court, the terms of the Post-Petition Loans and the
DIP Financing Documents, are fair and reasonable, reflect the Debtors' exercise
of prudent business judgment consistent with their fiduciary duties, and are
supported by reasonably equivalent value and fair consideration.
K. The Debtors having received multiple offers for
debtor-in-possession financing, and based upon the record of the Interim Hearing
and the pleadings filed with this Court, the financing contemplated by the DIP
Financing Documents and the use of Cash Collateral are the product of an arm's
length negotiation and are entered into by the DIP Agents and the DIP Lenders
and the Pre-Petition Agent and the Pre-Petition Lenders, as the case may be, in
good faith, and any Cash Collateral used or credit extended and advances made or
other services provided pursuant to the DIP Financing Documents, including,
without limitation, cash
16
management services and the making of Post-Petition Loans, shall be, and shall
be deemed, extended or made in good faith, as the term "good faith" is used in
Section 364(e) of the Bankruptcy Code, and in express reliance upon the
protections afforded by Section 364(e), and the DIP Agents, DIP Lenders,
Pre-Petition Agent and the Pre-Petition Lenders shall be entitled to the full
protection of Section 364(e) of the Bankruptcy Code in the event that this
Interim Order or any provision hereof is vacated, reversed or modified, on
appeal or otherwise.
L. The arrangements and the transactions contemplated by the
DIP Financing Documents and the use of Cash Collateral do not provide the DIP
Agents, DIP Lenders, Pre-Petition Agent or Pre-Petition Lenders, as applicable,
with sufficient control over the Debtors so as to subject any one or more of
them to any liability (including, without limitation, environmental liability as
an "owner", "operator" or "responsible person" as those terms are used in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorizations Act of 1986) in
connection with the management of any of the Debtors' businesses or properties
or in connection with that restructuring efforts.
M. The entry of this Interim Order is necessary to avoid
immediate and irreparable harm to, and is in the best interests of, the Debtors,
their estates and their creditors.
N. Notice of the Motion and the Interim Hearing has been
provided in accordance with the terms of the Motion and such notice is, in all
respects, due, timely, adequate and sufficient notice and complies, in all
respects, with the requirements of Bankruptcy Code Sections 102(l), 363(c) and
364, Bankruptcy Rules 2002, 4001(b), 4001(c), 4001(d), 9007 and 9014 and Local
Bankruptcy Rule 4001-2, and any other applicable provisions of the Bankruptcy
Code and the Bankruptcy Rules.
17
On the basis of the foregoing Findings of Fact and the record at the
Interim Hearing on the Motion and the other pleadings heretofore filed, the
Court reaches the following
CONCLUSIONS OF LAW:
O. To the extent any part or all of the foregoing Findings of
Fact should be more properly deemed Conclusions of Law, the Court expressly
designates any such findings as a Conclusion of Law.
P. This is a "core" proceeding within the meaning of 28 U.S.C.
Section 157(b)(2)(D), (G) and (M), and this Court has authority to enter this
Interim Order pursuant to Sections 105, 503, 507, 361, 362, 363 and 364 of the
Bankruptcy Code. Venue is proper before this Court pursuant to 11 U.S.C.
Sections 1408 and 1409.
Q. Notice of the Motion and the Interim Hearing has been duly
and properly provided by the Debtors and is sufficient under the circumstances
and has been provided in accordance with Sections 102(1), 363(c) and 364 of the
Bankruptcy Code and Bankruptcy Rules 2002, 4001(b) and (c), 4001(d), 9007 and
9014.
R. The entry of this Interim Order, the grant to the Debtors
of the authorizations that follow, and the grant to the Pre-Petition Agent, the
Pre-Petition Lenders, the L/C Facility Lenders, the DIP Agents and the DIP
Lenders of the protections that follow are in the best interest of the Debtors
and their respective estates, creditors and other parties in interest in these
cases.
S. To the extent any provisions of the Bankruptcy Code or
Bankruptcy Rules or applicable law requires the findings of "cause" for entry of
any provisions of this Interim Order, the Court expressly finds and concludes
that such cause exist.
18
T. This Interim Order shall be immediately valid and fully
effective upon its entry and shall not be subject to any stay otherwise
applicable and its provisions shall be self-executing.
In view of the foregoing, it is hereby
ORDERED:
A. APPROVAL OF, AND AUTHORIZATION TO INCUR, POST-PETITION LOANS.
1. The Motion is granted, all objections not previously
withdrawn are hereby overruled and the DIP Financing Documents and the
transactions contemplated thereby are approved in all respects and the
performance of the Debtors' obligations thereunder and relating thereto is
hereby approved and authorized in all respects. The omission in this Interim
Order of specific reference to any provision of the DIP Financing Documents
shall not impair or diminish the efficacy, propriety and approval and
authorization of such provision, it being the intent of this Court that the DIP
Financing Documents and the transactions contemplated thereby be authorized and
approved in their entirety.
2. The Debtors, jointly and severally, are immediately
authorized to:
(a) borrow and obtain letters of credit, subject to
the terms and conditions of this Interim Order and the DIP
Financing Documents, up to an aggregate principal amount of
$20 million until entry of the Final Order and, thereafter, up
to $60 million subject, in each case, to the terms and
conditions of the Interim Order or the Final Order (as
applicable), the Budget and the other DIP Financing Documents
(including, without limitation, the borrowing base limitations
set forth therein); provided, however, borrowings (to the
extent authorized hereby) shall
19
only be permitted to fund the permitted disbursements set
forth in, and limited by, the Budget and the other DIP
Financing Documents, including provisions therein establishing
certain allowed variances with respect to the Budget, and to
pay interest, fees and expenses in accordance with this
Interim Order and the DIP Financing Documents; and
(b) use Cash Collateral; provided, however, the use
of Cash Collateral shall only be permitted to fund the
permitted disbursements set forth in, and limited by, the
Budget and the terms of the other DIP Financing Documents,
including provisions therein establishing certain allowed
variances with respect to the Budget, and the Carve-Out.
Notwithstanding anything in this Interim Order to the
contrary, the Debtors shall not, and shall not be authorized
to, (x) use the proceeds of the Post-Petition Loans or the
Cash Collateral in any manner other than as set forth in
clauses (a) and (b) above and (y) use the L/C Cash Collateral
for any purpose other than the payment of the adequate
protection obligations specifically set forth in paragraph 13
hereof.
3. (a) The Debtors are hereby jointly and severally authorized
and directed to pay, and the Borrowers shall jointly and severally immediately
pay, all accrued fees, costs, charges, commissions and expenses set forth in the
DIP Financing Documents, including, without limitation, reasonable counsel fees
of the DIP Agents and the non-refundable fees owed to the DIP Agents and DIP
Lenders, as the case may be, under the DIP Financing Documents.
20
(b) An annual administrative fee of $250,000, such fee to be
fully earned and payable to Administrative Agent quarterly, in advance, for its
own account, with the first such payment to be made upon satisfaction of the
conditions under "Initial Conditions Precedent" in the Term Sheet, and each
payment thereafter to be made at three month intervals. An annual collateral
agency fee of $250,000, such fee to be fully earned and payable to Collateral
Agent quarterly, in advance, for its own account, with the first such payment to
be made upon satisfaction of the conditions under "Initial Conditions Precedent"
in the Term Sheet, and each payment thereafter to be made at three month
intervals. In the event the Debtors obtain alternative financing in lieu of the
DIP Credit Agreement within twelve months of the date of this Order (the
"Alternative Financing"), the Debtors agree to pay the DIP Collateral Agent for
its own account on the date of the closing of such Alternative Financing, an
amount equal to 2.00% of the aggregate $60.0 million commitment with respect to
the DIP Credit Agreement; provided that this Alternative Financing fee shall not
be payable if (a) the DIP Collateral Agent has received each of the fees set
forth in paragraphs 1 and 2 in the Fee Letter or (b) after the initial $20.0
million principal amount of the DIP Credit Agreement becomes available, the DIP
Credit Agreement matures as a result of notice being delivered to the Debtors
that any condition set forth under the heading "Further Conditions" in the Term
Sheet has not been satisfied; provided that the DIP Collateral Agent shall
deliver such notice in the event the Final Order (as contemplated in the Term
Sheet) in respect of the DIP Credit Agreement is not entered by the Court (in
which event the Alternative Financing fee shall not be earned or payable);
provided further that in the event the DIP Collateral Agent receives the
Financing Fee set forth in paragraph 1(a) of the Fee Letter and the Alternative
Financing fee, the Financing Fee paid
21
pursuant to paragraph 1(a) of the Fee Letter shall be credited against the
Alternative Financing fee paid to the DIP Collateral Agent.
4. The Debtors are immediately authorized and directed to
cause the Guarantors to (a) jointly and severally and unconditionally and
irrevocably guaranty the prompt payment in full in cash of all Post-Petition
Loans and other Obligations (as defined in the DIP Credit Agreement) and (b)
grant valid, enforceable, perfected and non-voidable Liens on all of the
Guarantors' property, now or hereafter acquired, of whatever kind or nature, at
any time existing or arising, now or in the future, wherever located, and all
proceeds and products thereof.
5. The Debtors are authorized and directed to (a) enter into
and perform their obligations under the DIP Financing Documents in order to
implement the financing contemplated thereby, (b) grant the Liens contemplated
by this Interim Order and the DIP Financing Documents, (c) effect all
transactions and take any actions provided for in or contemplated by the DIP
Financing Documents or deemed necessary or appropriate by the DIP Agents to
effectuate the terms and conditions of the DIP Financing Documents and this
Interim Order, and (d) comply with all provisions of the DIP Financing
Documents.
6. Upon the entry of this Interim Order, the DIP Financing
Documents shall constitute valid and binding obligations of the Debtors and the
Guarantors, enforceable against each such Debtor and Guarantor in accordance
with the terms of each of the DIP Financing Documents. Notwithstanding any other
provision hereof, without further approval of this Court, amendments to the DIP
Financing Documents may be made pursuant to Section 10.6 of the DIP Credit
Agreement, provided that such amendments do not alter material terms of the DIP
Credit Agreement in a manner that is adverse to the Debtors, it being understood
that a modification of
22
the applicable interest rate as contemplated by the Fee Letter agreed to by the
Debtors and the DIP Agents shall not be deemed materially adverse with respect
to the foregoing provision. Upon the entry of the Final Order, and the
satisfaction of each of the conditions to borrowing set forth in the DIP
Financing Documents, the Borrowers shall be authorized to borrow as
Post-Petition Loans up to an aggregate principal amount of $60,000,000, subject
to the terms and conditions of such Final Order and the DIP Financing Documents
(including, without limitation, the borrowing base limitations set forth therein
and the arrangements described therein concerning the L/C Facility Agreement
Obligations and the L/C Cash Collateral).
B. POST-PETITION LOANS AND OTHER OBLIGATIONS: LIENS, SUPERPRIORITY
CLAIMS AND PRIORITIES.
7. The DIP Collateral Agent (for the benefit of the DIP
Lenders) shall be entitled to, and is hereby irrevocably granted, the following
protections, Liens and priorities, to secure full and complete compliance with,
and timely payment of, all Obligations at any time or from time to time owing or
to be performed by the Debtors pursuant to the DIP Financing Documents, which
shall include, without limitation, the indefeasible payment in full in cash of
all principal, interest, fees, costs, charges, commissions, expenses and other
amounts payable from time to time thereunder:
(a) pursuant to Section 364(c)(2) of the Bankruptcy Code,
valid, enforceable, perfected and unavoidable first priority Liens on
all unencumbered property of the Debtors' estates (other than the
applicable Excluded Assets), now or hereafter acquired, of whatever
kind or nature, at any time existing or arising, now or in the future,
wherever located, and all proceeds and products thereof, subject only
to the Carve-Out;
23
(b) pursuant to Section 364(c)(3) of the Bankruptcy Code,
valid, enforceable, perfected and unavoidable Liens on all property of
the Debtors' estates (other than the applicable Excluded Assets), now
or hereafter acquired, of whatever kind or nature, at any time existing
or arising, now or in the future, wherever located, and all proceeds
and products thereof, which Liens shall be junior only to the Third
Party Filing Date Liens and subject to the Carve-Out; and
(c) pursuant to Section 364(d)(1) of the Bankruptcy Code,
valid, enforceable, perfected and unavoidable first priority, senior
priming Liens on all property of the Debtors' estates (other than the
Excluded Assets), now or hereafter acquired, of whatever kind or
nature, at any time existing or arising, now or in the future, wherever
located, and all proceeds and products thereof, which Liens shall prime
the Pre-Petition Liens and the Liens granted to the Pre-Petition Agent
(for the benefit of the Pre-Petition Lenders) on or after the Filing
Date to provide adequate protection to the Pre-Petition Lenders and any
other Liens, rights or interests (including, without limitation,
offsets but subject to the last sentence hereof) asserted by any party
in interest after the Filing Date; provided that, the priming Liens
granted to the DIP Collateral Agent (for the benefit of the DIP
Lenders) pursuant to this paragraph 7(c) shall be subject to the
Carve-Out and shall not prime Third Party Filing Date Liens; (all of
the property referred to in the preceding clauses (a), (b) and (c) is
hereinafter referred to as the "DIP Collateral" and shall include, for
the avoidance of doubt, any and all pre- and post-petition property of
the Debtors' estates, whether now or hereafter acquired, of whatever
kind or nature, at any time existing or arising, now or in the future,
wherever located, and all proceeds and products thereof, but shall
exclude (i) the L/C Cash Collateral solely for purposes of granting any
Lien to the
24
DIP Collateral Agent (for the benefit of the DIP Lenders) that is
senior or equal to the Lien of the L/C Facility Lenders so long as, and
only to the extent, the L/C Facility Lenders have valid, perfected and
unavoidable liens on the L/C Cash Collateral (it being understood and
agreed that the DIP Collateral Agent (for the benefit of the DIP
Lenders) shall have Liens on the L/C Cash Collateral senior to any
entity other than the L/C Facility Lenders and the L/C Cash Collateral
shall not be deemed "Excluded Assets" for such Liens of the DIP
Collateral Agent), (ii) Liens on more than 65% of the equity interests
of the Debtors' non-U.S. subsidiaries so long as no other party has a
Lien thereon (i.e. the unencumbered 35% of the equity interests of such
foreign subsidiaries shall be excluded from the DIP Collateral) and
(iii) causes of action prosecuted under Sections 544, 545, 547, 548,
550 or 553 of the Bankruptcy Code so long as, and only to the extent,
the Debtors retain such causes of action and no other party has a Lien
or other interest therein (the assets excluded from the DIP Collateral
as described in clauses (i), (ii) and (iii) above are referred to
herein as "Excluded Assets")). Notwithstanding anything herein to the
contrary, unless so provided in and until the entry of the Final Order,
the DIP Lenders and the Pre-Petition Lenders shall not be deemed to
have been granted Liens on the Debtors' accounts receivable that arise
in the ordinary course of business that are senior to the offset or
recoupment rights that may be asserted by the Debtors' customers with
respect to such receivables. Nothing herein shall be a waiver of any
party's (including, without limitation, the Debtors') right to object
to or otherwise contest any assertion or exercise of offset or
recoupment by such customers.
8. In addition, in order to further assure full and complete
compliance with, and timely payment of, all Obligations at any time owing or to
be performed by the Debtors pursuant
25
to the DIP Financing Documents, the DIP Agents and the DIP Lenders are hereby
granted, pursuant to Section 364(c)(1) of the Bankruptcy Code and subject only
to the Carve-Out, superpriority administrative claim status for such
Obligations, with priority over any and all administrative expenses (including,
without limitation, any administrative claims of the Pre-Petition Agent, the
Pre-Petition Lenders, L/C Facility Lenders or any administrative claims granted
to the debtors for post-petition intercompany loans and other post-petition
Intercompany Claims as defined in the Order Granting Debtors' Motion for Order
(I) Authorizing Continued Use of (A) Existing Bank Accounts, (B) Business Forms
and Checks and (C) Cash Management System; (II) Authorizing the Continuation of
Intercompany Transactions and According Administrative Expense Status To Claims
for such Transactions (the "Cash Management Order")) of the kind specified or
ordered pursuant to any provision of the Bankruptcy Code, including, but not
limited to, Sections 105, 326, 328, 330, 331, 503(b), 506(c), 507(a), 507(b),
726, 1113 and 1114 of the Bankruptcy Code, and which allowed superpriority
administrative expense claims shall be payable from and have recourse to all
pre-and post-petition property of the Debtors and all proceeds thereof, subject
only to the Carve-Out. All Obligations owing to the DIP Agents and the DIP
Lenders under the DIP Financing Documents shall be paid as provided herein and
in the DIP Financing Documents, without defense, offset, reduction, claim or
counterclaim, and shall constitute allowed claims to the full extent thereof
against the Debtors.
9. [Intentionally Omitted.]
C. USE OF CASH COLLATERAL AND ADEQUATE PROTECTION FOR PRE-PETITION
LENDERS.
10. Any and all Cash Collateral and other cash and amounts now
held or hereafter received by any of the Debtors shall be collected, received,
maintained and segregated by the Debtors in accordance with the DIP Financing
Documents; provided however, that with regard to
26
the account of the Debtors securing the L/C Facility Agreements, the requirement
that the Debtors comply with Section 345(b) of the Bankruptcy Code shall be
waived for a period of forty-five days within which time the U.S. Trustee may
file an objection relating to compliance with same; failing which the waiver
will be deemed to have been agreed to by the U.S. Trustee and shall become
final.
11. Subject to the provisions of this Interim Order, including
relating to the Obligations arising under the DIP Financing Documents and the
rights, remedies and privileges afforded the DIP Agents and the DIP Lenders in
connection therewith, and subject further to the granting of adequate protection
to the Pre-Petition Lenders and the Pre-Petition Agent in accordance with
paragraph 12 below, the Debtors are hereby authorized to use the Cash Collateral
of the Pre-Petition Agent, the Pre-Petition Lenders, the DIP Agents and the DIP
Lenders solely for the purposes of funding the permitted disbursements of the
Debtors as set forth in, and to the extent permitted under, the Budget, this
Interim Order and the other DIP Financing Documents, including provisions
therein establishing certain allowed variances with respect to the Budget. The
Cash Collateral shall be applied to fund working capital requirements relating
to the Debtors' post-petition operations in accordance with, and limited by, the
Budget, this Interim Order and the other DIP Financing Documents; provided that
no portion of the Cash Collateral or any other cash shall be used, directly or
indirectly, to make any payment or prepayment on any pre-petition indebtedness
or other pre-petition claims or interests except to the extent specifically
permitted by the Budget, this Interim Order, other order of this Court provided
that such order shall be subject to the prior consent and approval of the DIP
Agents, the other DIP Financing Documents or for any purpose prohibited by
paragraph 16 of this Interim Order.
27
12. As partial adequate protection for (i) the Debtors' use of
Cash Collateral, (ii) the priming of the Pre-Petition Liens by the Liens granted
to the DIP Collateral Agent (for the benefit of the DIP Lenders), (iii) the
Debtors' use, sale or lease (or other decline in value) of the Pre-Petition
Collateral other than the Cash Collateral and (iv) the imposition of the
automatic stay pursuant to Section 362 of the Bankruptcy Code:
(a) The Debtors shall grant and hereby do grant to the
Pre-Petition Agent (for the benefit of the Pre-Petition Lenders)
replacement Liens on all of the DIP Collateral (including, without
limitation, the Pre-Petition Collateral, but excluding the Excluded
Assets), subject only to (w) the Liens granted to the DIP Collateral
Agent (for the benefit of the DIP Lenders) in respect of the
Obligations, (x) the Third Party Filing Date Liens and (y) the
Carve-Out.
(b) To the extent that (i) any Cash Collateral is used by any
of the Debtors for purposes not permitted by this Interim Order, the
Budget or the other DIP Financing Documents, (ii) the Liens granted
pursuant to clause (a) above are insufficient as adequate protection or
(iii) the value of the Pre-Petition Collateral is diminished or
declines after the Filing Date, whether as a result of the Debtors' use
of Pre-Petition Collateral (including the Cash Collateral) or
otherwise, the Pre-Petition Lenders, in addition to any other right,
remedy or claim that the Pre-Petition Lenders may have as a result of
such insufficiency or diminution, shall each have an allowed claim
therefor, which claim shall have priority over any and all other
administrative expenses of the kind specified or ordered pursuant to
any provision of the Bankruptcy Code, including, but not limited to,
Sections 105, 326, 328, 330, 331, 503(b), 506(c), 507(a), 507(b), 726,
1113
28
and 1114 of the Bankruptcy Code, junior only to (x) the superpriority
claims granted to the DIP Agents and the DIP Lenders and (y) the
Carve-Out.
(c) Subject to paragraph 12(e), the Debtors shall pay to the
Pre-Petition Agent (for the benefit of the Pre-Petition Lenders) (1)
monthly in arrears, on the last business day of each month, (x)
interest on the Pre-Petition Credit Agreement Obligations at the
non-default rate in effect immediately prior to the Filing Date at the
Base Rate (as the same may fluctuate from time to time) plus the
applicable Base Rate Margin (as such terms are defined in the
Pre-Petition Credit Agreement); provided that 1.50% of such interest
shall be payable in kind and shall be deemed added to the outstanding
principal amount of the Pre-Petition Credit Agreement Obligations (it
being understood that at the expiry of an Interest Period for existing
Eurodollar Advances such loans shall be continued as Base Rate
Advances, as such terms are defined in the Pre-Petition Credit
Agreement) and (y) all fees payable under the Pre-Petition Credit
Agreement, including, without limitation, the fees set forth in Section
3.05 of the Pre-Petition Credit Agreement, (2) pursuant to the terms of
and in accordance with Section 10.04 of the Pre-Petition Credit
Agreement, all reasonable fees, costs and expenses (including, without
limitation, the reasonable fees and disbursements of counsel and
third-party consultants, including financial consultants, and auditors)
heretofore or hereafter incurred by the Pre-Petition Agent (including
any unpaid pre-petition fees and expenses) or any Pre-Petition Lenders'
reasonable attorneys' fees for their respective counsel in an amount
not to exceed $2,000 per Pre-Petition Lender; provided that solely with
respect to such fees the Debtors and the Committee shall retain their
rights to object to any such amounts and (3) on a current and
continuing basis, all administrative fees that are provided for under
the Pre-Petition
29
Credit Agreement. Without limiting the generality of this paragraph
12(c), nothing contained herein shall constitute or be deemed to
constitute a waiver of the Pre-Petition Lenders' right to seek payment
of interest at any higher rate to which the Pre-Petition Lenders may be
entitled or any other party's right to object to the same. Counsel to
the Pre-Petition Lenders and Pre-Petition Agent shall serve copies of
their bills upon the Debtors, the U.S. Trustee, the DIP Agents and
counsel to the Committee.
(d) The Debtors shall deliver to the Pre-Petition Agent all of
the financial information and related reports, documents and analysis
as required under the terms of the DIP Credit Agreement. All such
reports and information shall be delivered on or before the date and
time specified for the delivery thereof in the DIP Credit Agreement. In
addition, the Debtors shall provide the Pre-Petition Agent, with copies
to its counsel, immediately upon filing with the Court, copies of all
monthly reports, status reports, pleadings, motions, and other requests
or objections filed by the Debtors.
(e) The Debtors' joint and several obligations set forth in
clauses (a) through (d), inclusive, shall be referred to herein as the
"Adequate Protection Obligations." Notwithstanding anything herein to
the contrary, (i) any payments received by the Pre-Petition Agent or
the Pre-Petition Lenders prior to the date hereof pursuant to the terms
of the Cash Collateral Stipulation are incorporated herein as permitted
adequate protection payments, (ii) any payments made to the
Pre-Petition Agent, the Pre-Petition Lenders or the L/C Facility
Lenders under paragraph 12(c)(1) and paragraph 13 (as applicable) or
made under the equivalent provisions of the Cash Collateral Stipulation
shall be without prejudice to the rights of the Committee to later
contend that such payments should be applied to the principal amount of
the obligations owed to the Pre-
30
Petition Lenders or the L/C Facility Lenders, as the case may be, and
(iii) the adequate protection Liens and administrative claims granted
to the Pre-Petition Agent and the Pre-Petition Lenders pursuant to the
terms hereof shall be limited to the extent of the diminution in value
of the interests of the Pre-Petition Lenders in the Pre-Petition
Collateral.
13. As adequate protection, the Debtors shall pay to the L/C
Facility Lenders monthly in arrears, on the last business day of each month,
letter of credit fees accruing at the non-default rate under the L/C Facility
Agreement together with all other fees and expenses (including attorneys' fees)
payable under the L/C Facility Agreement; provided that, if the Georgia Letter
of Credit is drawn and not reimbursed prior to the entry of a Final Order
approving the DIP Financing Documents, the Debtors shall, in addition to any
letter of credit fees and other fees and expenses payable under the L/C Facility
Agreement and until the L/C Facility Obligations are paid in full, pay to the
L/C Facility Lenders monthly in arrears, on the last business day of each month,
interest at the non-default rate set forth in the L/C Facility Agreement;
provided further that such amounts may only be payable from the L/C Cash
Collateral.
14. Under the circumstances and given that the above adequate
protection is consistent with the Bankruptcy Code, the Court finds that the
adequate protection provided herein is reasonable and sufficient to protect the
interests of the Pre-Petition Agent, the Pre-Petition Lenders and L/C Facility
Lenders. Subject to any party's right to object, the Pre-Petition Agent, the
Pre-Petition Lenders and the L/C Facility Lenders, may request further or
different adequate protection but in no event may they request (or be granted)
any adequate protection that
31
primes or otherwise grants them rights that are superior to or pari passu with
the Liens, rights, privileges, protections, or remedies granted to the DIP
Agents and the DIP Lenders.
E. THE CARVE-OUT.
15. The superpriority administrative claims granted to the DIP
Agents, the DIP Lenders, the Pre-Petition Agent and the Pre-Petition Lenders
pursuant to this Interim Order, and the Liens securing the same, shall be
subject to the Carve-Out. For purposes hereof, the "Carve-Out" shall mean (i)
the fees payable pursuant to 28 U.S.C. Section 1930 and (ii) the unpaid fees and
expenses of the professionals retained by the Debtors and the official
creditors' committee appointed pursuant to Section 1102 of the Bankruptcy Code
and applicable order of this Court (the "Committee") that are allowed by order
of this Court (whether allowed prior to or after the Carve-Out Limit Notice
Date) and incurred (x) prior to the delivery to the Debtors' counsel and the
Committee's counsel of notice that the Termination Date (as defined in paragraph
21) has occurred (the "Carve-Out Limit Notice Date"), provided that such unpaid
allowed fees and expenses shall not exceed amounts permitted in the Budget and
(y) after the Carve-Out Limit Notice Date; provided that such allowed fees and
expenses do not exceed, for purposes of the Carve-Out only, $1.5 million less,
in each case, any retainers paid to such professionals. The portion of the
Carve-Out described in clause (ii) hereof (the "Professional Fee Carve-Out")
shall be allocated among the professionals retained by the Debtors and the
Committee (the "Professionals") by agreement among the Professionals or pursuant
to further order of the Court.
16. Notwithstanding anything herein to the contrary and except
for the Committee's Investigation Expenses, no Cash Collateral, L/C Cash
Collateral, Post-Petition Loans or any proceeds of the Post-Petition Loans or
other cash shall be used by the Debtors or any other party in interest, and the
Professional Fee Carve-Out shall not apply, to fund any fees
32
or expenses for services which involve or relate to, directly or indirectly (i)
any attempt from and after the date of the entry of this Interim Order to
challenge, avoid, equitably subordinate, recharacterize or otherwise impair or
reduce any claim of the Pre-Petition Agent, the Pre-Petition Lenders, the L/C
Facility Lenders, the DIP Agents, the DIP Lenders or any of their affiliates
against any or all of the Debtors (whether such claims arise prior to or after
the Filing Date) or the validity, priority, enforceability or perfection of any
of the Liens granted (either prior to or after the Filing Date) to the
Pre-Petition Agent, the Pre-Petition Lenders, the DIP Agents or the DIP Lenders
or (ii) without duplication of clause (i), the assertion or litigation of any
claims against, the Pre-Petition Agent, the Pre-Petition Lenders, the DIP Agents
or the DIP Lenders (including, without limitation, any litigation or claims
arising under Sections 510, 544, 545, 547, 548, 549, 550 or 553 of the
Bankruptcy Code or other applicable law). Nothing contained in this Interim
Order shall be deemed to constitute a request by the Pre-Petition Agent, the
Pre-Petition Lenders, the DIP Agents or the DIP Lenders for the rendering of
services by any such Professionals or an admission that any such services
rendered or to be rendered by any of such Professionals (x) have benefited or
will benefit the Pre-Petition Agent, the Pre-Petition Lenders, the DIP Agents or
the DIP Lenders or the DIP Collateral (including, without limitation, the
Pre-Petition Collateral) in any respect whatsoever or (y) have contributed or
will contribute to the protection or preservation of the DIP Collateral
(including, without limitation, the Pre-Petition Collateral). The amount of the
Professional Fee Carve-Out shall neither be reduced nor increased by the amount
of any compensation or reimbursement of expenses paid prior to the Carve-Out
Limit Notice Date or by any fees, expenses, indemnities or other amounts paid to
the DIP Agents, the DIP Lenders, the Pre-Petition Agent, the Pre-Petition
Lenders, or their respective attorneys and other professionals or otherwise.
33
F. PROTECTION OF DIP LENDERS' RIGHTS.
17. Until the Obligations have been Paid in Full (as defined
in paragraph 19 below), the Pre-Petition Agent, Pre-Petition Lenders and the L/C
Facility Lenders (except as provided in the next sentence) shall (a) at all
times forbear from exercising, and shall not be entitled to exercise, any right
or remedy granted pre-petition or post-petition including, without limitation,
seeking relief from the automatic stay, or seeking any sale, foreclosure,
realization upon or repossession or liquidation of any property of any Debtor,
or take any position after the Termination Date (as defined in paragraph 21)
with respect to any disposition of the property, the business operations, or the
reorganization of the Debtors that could reasonably be expected to interfere
with or adversely affect the ability of the DIP Agents or the DIP Lenders to
exercise any right or remedy or obtain satisfaction in full of the Obligations
and (b) after the Termination Date, be deemed to have consented to any release
of DIP Collateral authorized under the DIP Financing Documents. Except with
respect to the adequate protection payments permitted hereby, the Pre-Petition
Agent, Pre-Petition Lenders and the L/C Facility Lenders shall not receive or
retain any payments, property or other amounts until the Obligations have been
Paid in Full; provided, however, that if the Georgia Letter of Credit is drawn
prior to the entry of a Final Order approving the DIP Financing Documents, then,
upon and subject to the entry of the Final Order approving the DIP Financing
Documents (the "L/C Cash Collateral Release Event"), Intermet is authorized and
directed to irrevocably release (or permit the release) to Scotiabank, all of
the L/C Cash Collateral then on deposit in the Cash Collateral Account to be
applied by Scotiabank in permanent reduction and discharge of Intermet's
obligations under the L/C Facility Agreement and any balance remaining after
such application is to be returned by Scotiabank to Intermet (and all such
amounts remitted to Intermet shall thereupon be deemed DIP Collateral and be
subject to the terms and conditions hereof and of the DIP Financing Documents)
and
34
Scotiabank shall contemporaneously be deemed to have purchased commitments in an
amount set forth, and as more particularly described, in the DIP Credit
Agreement; and provided further, however, that (i) on or after the Termination
Date or (ii) if the L/C Cash Collateral is not immediately released to
Scotiabank upon the occurrence of the L/C Cash Collateral Release Event, the L/C
Facility Lenders shall, notwithstanding the first sentence of this paragraph 17,
be entitled to exercise any right or remedy available to them under the L/C
Facility Agreement, subject to compliance with the Bankruptcy Code, or under
applicable law, including, without limitation, the right to seek relief from the
automatic stay without prejudice to any other party's right to object to the
same; provided that the DIP Collateral Agent and DIP Lenders in their capacity
as Lien holders with respect to the L/C Cash Collateral shall not object to the
exercise by Scotiabank of such rights and remedies. Until the Obligations have
been Paid in Full, each Debtor holding an administrative claim against another
Debtor pursuant to the Cash Management Order or otherwise, shall not exercise
any right or remedy with respect to such administrative claim and shall forbear
from exercising, and shall not be entitled to exercise, any right or remedy
granted post-petition including, without limitation, seeking any sale,
realization upon or liquidation of any property of any Debtor, or taking any
position with respect to any disposition of the property, the business
operations, or the reorganization of the Debtors that could reasonably be
expected to interfere with or adversely affect the ability of the DIP Agents or
the DIP Lenders to exercise any right or remedy or obtain satisfaction in full
of the Obligations. The Liens granted to the DIP Collateral Agent (for the
benefit of the DIP Lenders) pursuant to the terms hereof and the DIP Financing
Documents shall not be subject or subordinate to any Lien that is avoided and
preserved for the benefit of the Debtors and their estates under Section 551 of
the Bankruptcy Code or any Liens arising after the Filing Date. Notwithstanding
the foregoing,
35
so long as no Event of Default has occurred and is continuing under the DIP
Credit Agreement the Debtors may continue to advance funds solely among the
Debtors in the ordinary course of their business. Notwithstanding the foregoing,
the Pre-Petition Lenders shall have the right to seek relief in this Court in
the event that the Debtors fail to make the adequate protection interest and fee
and expense payments provided for herein.
G. ADDITIONAL COVENANTS AND OBLIGATIONS
18. The Liens granted to the DIP Collateral Agent (for the
benefit of the DIP Lenders) in respect of the Obligations and to the
Pre-Petition Agent (for the benefit of the Pre-Petition Lenders) in respect of
the Adequate Protection Obligations, are, and for all purposes shall be deemed
to be, valid, enforceable, unavoidable and duly and automatically perfected, and
no further filing or recordation or other act in accordance with any applicable
local, state, federal or common law, rule or regulation shall be necessary to
create or perfect such Liens. Without limiting the foregoing, the DIP Collateral
Agent shall not be required, but shall be authorized, to file or record
mortgages, notices of liens or similar instruments or take any other action in
order to evidence the Liens (and the priority thereof) granted pursuant to this
Interim Order. If the DIP Collateral Agent shall, in its sole discretion, choose
to file such mortgages, notices of liens or similar instruments or otherwise
confirm perfection of such Liens, all such documents shall be deemed to have
been filed or recorded at the time and on the date of entry of this Interim
Order. The Pre-Petition Agent shall not file or record mortgages, notices of
liens or similar instruments or take any other action in order to evidence the
Liens (and the priority thereof) granted pursuant to this Interim Order.
19. Other than the Third Party Filing Date Liens, the Liens
granted pursuant to this Interim Order and under the terms of the DIP Financing
Documents, no Liens (other than
36
replacement Liens for the use of Cash Collateral in favor of the Pre-Petition
Lenders and the DIP Lenders if ordered by this Court) shall attach to any
property of the Debtors' estates in these cases or any cases to which these
cases may be converted under the Bankruptcy Code unless either (a) the DIP
Collateral Agent and the requisite DIP Lenders give their express written
consent or such Liens are otherwise permitted under the DIP Financing Documents,
or (b) in connection therewith (i) all Obligations under the DIP Financing
Documents have been indefeasibly paid in full in cash, (ii) all letters of
credit issued under the DIP Credit Agreement have been returned to the issuing
bank undrawn and marked "canceled" or such letters of credit have been secured
by (x) another letter of credit issued by an institution satisfactory to the DIP
Collateral Agent of a tenor and containing terms acceptable to the DIP
Collateral Agent and having a face amount not less than 110% of the letters of
credit being so secured or (y) cash collateral in an amount not less than 110%
of the face amount of such letters of credit pursuant to documentation in form
and substance satisfactory to the DIP Collateral Agent, and (iii) the
commitments under the DIP Financing Documents have been terminated ("Paid in
Full" or "Payment in Full"). The Pre-Petition Agent shall retain the right to
object to the creation, incurrence or assumption of Liens on property of the
Debtors' estates in these cases or any cases to which these cases may be
converted under the Bankruptcy Code after the Obligations under the DIP
Financing Documents have been Paid in Full.
20. Prior to the Payment in Full of the Obligations the
Debtors shall not incur indebtedness prohibited by the DIP Financing Documents
unless (a) the DIP Agents and the requisite DIP Lenders consent in writing
thereto, or (b) the proceeds thereof are used for the Payment in Full of the
Obligations. Prior to the Payment in Full of the Obligations, the Debtors shall
not incur or otherwise consent to any administrative expense claim (or the entry
of an order
37
approving the same) having any priority over or being pari passu with, the
superpriority administrative expense claims granted to the DIP Lenders (subject
to the Carve-Out).
H. TERMINATION AND REMEDIES.
21. The Debtors' limited authorization hereunder to use Cash
Collateral, and to incur the Post-Petition Loans shall continue until the
occurrence of an Event of Termination (as defined in paragraph 22 below; the
date of such occurrence being the "Termination Date"), at which time the DIP
Lenders may exercise such rights, remedies and privileges set forth herein and
in the DIP Financing Documents and (without limiting the generality of the
foregoing) the Debtors' authorization to use Cash Collateral, or make further
borrowings or extensions of credit under the DIP Financing Documents shall
automatically cease and terminate, unless (subject to paragraph 25(a) with
respect to the use of Cash Collateral) the requisite DIP Lenders shall have
consented in writing, in their sole, absolute and exclusive discretion to an
order of this Court authorizing the Debtors to use Cash Collateral or incur
further Post-Petition Loans (provided that the DIP Lenders shall have no
obligation or commitment to make any such advance) for whatever period of time
that the DIP Lenders deem appropriate in accordance with the terms of this
Interim Order and such other order and any Budget approved pursuant to the terms
of the DIP Credit Agreement. No approval or disapproval of any Budget or
supplement or modification thereto (which in all instances shall be in the sole
and absolute discretion of the DIP Agents or (if applicable) the requisite DIP
Lenders as provided for in DIP Credit Agreement) shall create any claim or cause
of action against the DIP Agents or any DIP Lender, or any of their respective
affiliates or shall result in the disallowance or subordination of either DIP
Agent's or any DIP Lender's or their respective affiliate's claims based upon
lender liability, equitable subordination or otherwise.
38
22. The term "Event of Termination" as used herein shall mean
the occurrence of any of the following:
(a) without duplication of clauses (b) through (k) below, any
of the "Events of Default" set forth under DIP Financing Documents;
(b) any stay, reversal, vacatur, rescission or other
modification of the terms of this Interim Order not consented to by the DIP
Agents and the Pre-Petition Agent, in their sole, absolute and exclusive
discretion;
(c) non-compliance by the Debtors with any of the terms or
provisions of this Interim Order or the Budget;
(d) entry of an order by this Court dismissing or converting
any of the Debtors' cases to a case under Chapter 7 of the Bankruptcy Code;
(e) the appointment of a trustee or an examiner (other than a
fee examiner) with enlarged powers in any of the Debtors' cases;
(f) the substantial consummation of a plan of reorganization
in respect of any of the Debtors or the distribution of any amounts (whether in
cash or in kind) to any class of creditors, equity holders or other claimants
under such plan;
(g) the sale, transfer or other disposition of all or
substantially all of the assets or stock of any one or more of the Debtors or
Guarantors unless expressly consented to in writing by the DIP Agents or
permitted by the DIP Financing Documents;
39
(h) except as otherwise provided herein or in the DIP Credit
Agreement, the entry of an order which has not been withdrawn, dismissed or
reversed authorizing any of the Debtors to obtain additional financing under
Section 364(c) or (d) of the Bankruptcy Code, or authorizing any person to
recover from any portions of the DIP Collateral, including, without limitation,
the Pre-Petition Collateral, any costs or expenses of preserving or disposing of
such under Section 506(c) of the Bankruptcy Code or any similar principle of
law, in each case, without the express written consent of the DIP Agents (which
consent may be granted or withheld in their sole, absolute and exclusive
discretion);
(i) except as otherwise provided herein or in the DIP Credit
Agreement, other than the Carve-Out, the entry of an order approving, or there
shall arise, any other administrative expense claim having any priority over, or
being pari passu with, the superpriority administrative expense claims granted
to the DIP Lenders;
(j) the one year anniversary of the "Closing Date" of, and as
such term is defined in, the DIP Credit Agreement; or
(k) the failure of a Final Order approving, among other
things, the DIP Financing Documents, the incurrence of the Post-Petition Loans,
the use of Cash Collateral and the arrangements relating to the L/C Facility
Agreement, L/C Facility Agreement Obligations and L/C Cash Collateral provided
for in the DIP Credit Agreement to be entered within thirty (30) days after the
entry of this Interim Order.
23. Notwithstanding anything herein to the contrary, (x) upon
the DIP Collateral Agent's delivery to the Debtors of the Termination Notice (as
defined in the DIP Credit Agreement), the Debtors shall have Paid in Full all
outstanding Obligations of the DIP Lenders
40
within 90 days of delivery of such notice and (y) the Pre-Petition Agent, the
Pre-Petition Lenders and the L/C Facility Lenders shall not object to the
immediate Payment in Full of such Obligations through realization on the DIP
Collateral or otherwise (but excluding the Excluded Assets).
24. Nothing herein contained shall prejudice, impair or
otherwise affect the rights, remedies or privileges of the DIP Lenders, the DIP
Agents under the DIP Financing Documents or the L/C Facility Lenders, under the
Bankruptcy Code or under any other applicable law (all of which rights, remedies
and privileges are cumulative and not alternative), including, without
limitation, the right at any time to seek (i) the appointment of a trustee under
Section 1104 of the Bankruptcy Code, (ii) relief from the automatic stay under
Section 362(d) or (f) of the Bankruptcy Code (to the extent applicable), (iii)
relief in the event that any of the Debtors hereafter uses Cash Collateral or
the proceeds of any borrowing under the DIP Financing Documents (including,
without limitation, any borrowings authorized under this Interim Order) in a
manner contrary to the provisions of this Interim Order, the Budget or the other
DIP Financing Documents, (iv) dismissal or conversion of the within cases under
Section 1112 of the Bankruptcy Code, or (v) any other appropriate relief.
25. (a) On and after the Termination Date, the automatic stay
provided under Section 362(a) of the Bankruptcy Code shall automatically be
modified, without further order of the Court, to the extent necessary to permit
the DIP Collateral Agent to exercise and enforce, and the DIP Collateral Agent
thereupon shall be authorized to exercise and enforce, any and all rights and
remedies that the DIP Collateral Agent and the DIP Lenders (as applicable) have
under the DIP Financing Documents and applicable law, including, without
limitation, the right to (i) prohibit the further use of Cash Collateral, (ii)
foreclose on any Liens granted to or for the
41
benefit of the same, (iii) declare all of the outstanding Obligations to be
immediately due and payable, (iv) terminate any further commitment to lend under
the DIP Financing Documents (or issue any letters of credit thereunder) and (v)
set-off any amounts held as Cash Collateral in any accounts maintained with the
DIP Collateral Agent or any DIP Lenders; provided that, prior to exercising any
rights of setoff or rights to foreclose upon or otherwise enforce any Liens, or
prohibit the further use of Cash Collateral, the DIP Collateral Agent's counsel
shall give five (5) days prior written notice to this Court, the Debtors'
counsel, counsel to the Committee and to the office of the United States Trustee
for the Eastern District of Michigan; provided that if any hearing shall be
requested after delivery of such notice, the sole issue to be determined at such
hearing shall be whether the Termination Date has occurred; provided further,
and notwithstanding anything herein to the contrary, the Debtors shall retain
any and all rights afforded them under applicable bankruptcy law to seek a
further order permitting the continued, additional or different use of Cash
Collateral.
(b) In the event that the Court shall enter an order modifying
the automatic stay provided under Section 362(a) of the Bankruptcy Code to
permit any holder of a claim against the Debtors that is secured by any item of
DIP Collateral to exercise and enforce its rights and remedies in respect of
such item of DIP Collateral, the automatic stay shall automatically be modified,
without further order of the Court, but only to the extent necessary to permit
the DIP Collateral Agent to exercise and enforce, and the DIP Collateral Agent
thereupon shall be authorized to exercise and enforce, any and all rights and
remedies that the DIP Collateral Agent and the DIP Lenders have with respect to
such item of DIP Collateral under (as applicable) the DIP Financing Documents,
this Interim Order and applicable law.
42
26. Subject to paragraph 25(a), the Debtors shall not apply
for or cause the entry of any order enjoining, staying or otherwise prohibiting
the exercise and enforcement of any of the DIP Lenders' rights or remedies under
the DIP Financing Documents, this Interim Order and applicable law.
I. OTHER PROVISIONS.
27. Except to the extent of the Carve-Out, none of the
Debtors, any Professionals, or any other professional retained by any party in
connection with these cases, nor any other party in interest or entity shall,
pursuant to Section 506(c) of the Bankruptcy Code or other applicable law or
principles of equity, be entitled to recover from (a) the DIP Collateral
(including, without limitation, the Pre-Petition Collateral), or (b) the DIP
Lenders, the DIP Agents, the Pre-Petition Agent, the Pre-Petition Lenders or any
of their respective affiliates, (i) any costs, expenses or fees incurred by the
Debtors, any Professionals, any other professional retained by any party or any
other party in interest or other entity in connection with the preservation or
disposition of any DIP Collateral (including, without limitation, the
Pre-Petition Collateral) and (ii) any expenses of administration of these
chapter 11 cases or any future proceeding or case which may result therefrom,
including liquidation in bankruptcy or other proceedings under the Bankruptcy
Code; provided however, that for the purpose of this Order such provisions shall
not apply to the assertion of Section 506(c) claims by a Chapter 11 or Chapter 7
trustee against the Pre-Petition Lenders. The DIP Agents and the DIP Lenders do
not consent to the incurrence by the Debtors, any other party in interest
(including, without limitation, the Committee), any Professionals, any other
professional retained by any other party in interest or entity of any of the
costs, expenses or fees contemplated under Section 506(c) of
43
the Bankruptcy Code or any other similar principle of law or equity and no
consent shall be implied from any action, inaction or acquiescence by the DIP
Agents or the DIP Lenders.
28. The Debtors acknowledge and agree to each of the findings
of fact contained herein and each such finding of fact shall be binding upon all
parties in interest including, but not limited to, any trustee appointed under
Section 1104 of the Bankruptcy Code or under chapter 7 of the Bankruptcy Code,
the Debtors and any Committee appointed in the within cases unless, with respect
to the Committee only and solely with respect to the findings of fact
specifically disputed (a) the Committee has properly and timely filed no later
than 60 days after entry of the final order applicable to the Motion, or such
other date as the Pre-Petition Agent may consent to, an adversary proceeding or
contested matter (x) challenging the validity, enforceability, unavoidability,
perfection or priority of the Pre-Petition Credit Agreement Obligations, the L/C
Facility Agreement Obligations, the Pre-Petition Liens or any pre-petition Liens
granted to the L/C Facility Lenders or (y) asserting any claim or cause of
action against the Pre-Petition Agent, the Pre-Petition Lenders or the L/C
Facility Lenders and (b) an order of a court of competent jurisdiction which is
no longer appealable has been entered in favor of the Committee in any such
timely and properly filed adversary proceeding or contested matter. If no such
adversary proceeding or contested matter is properly commenced as of such date
or a final order of a court of competent jurisdiction has not been entered in
favor of the Committee (i) the Pre-Petition Credit Agreement Obligations and the
L/C Facility Agreement Obligations shall constitute allowed claims for all
purposes in the within cases and any subsequent chapter 7 cases, and the
Pre-Petition Liens on the Pre-Petition Collateral and the Liens on the L/C Cash
Collateral shall be deemed legal, valid, binding, and properly perfected, and
not subject to subordination or avoidance, and (ii) the Pre-Petition Credit
Agreement Obligations and the L/C Facility
44
Agreement Obligations and the Pre-Petition Liens on the Pre-Petition Collateral
and any Liens granted to the L/C Facility Lenders on the L/C Facility Cash
Collateral shall not be subject to any other or further challenge by any party
in interest seeking to exercise the rights of any Debtor's estate including,
without limitation, any successor thereto. Nothing herein is intended to assign
any claim of the Debtors to any party in interest, including, without
limitation, the Committee, and/or to bestow any standing with respect thereto.
Notwithstanding anything herein to the contrary, the Committee shall be limited
to $50,000 (the "Committee's Investigation Expenses")solely to investigate
whether there are any potential causes of action relating to (x) the validity,
enforceability, unavoidability, perfection or priority of the Pre-Petition
Credit Agreement Obligations, the L/C Facility Agreement Obligations, the
Pre-Petition Liens or any pre-petition Liens granted to the L/C Facility Lenders
or (y) the Pre-Petition Agent, the Pre-Petition Lenders or the L/C Facility
Lenders, which investigation shall be concluded within 60 days of the entry of
the final order applicable to the Motion (or by such later date as the
Pre-Petition Agent may consent to); provided that the Committee's investigation
or any subsequent challenge (whether or not successful) shall not in any manner
relate to or limit the rights (including, without limitation, the lien and
administrative priorities set forth herein), remedies and privileges of the DIP
Lenders set forth in this Interim Order or the DIP Financing Documents with
respect to any of the Obligations.
29. If any or all of the provisions of this Interim Order are
hereafter reversed, modified, vacated or stayed by a subsequent order of this
Court (including in connection with the Final Hearing) or any other court, such
reversal, stay, modification or vacatur shall not affect (a) the validity and
enforceability of any Post-Petition Loans, any other Obligations, or any other
indebtedness or liability authorized and incurred hereby or (b) the validity and
enforceability of
45
any Lien, priority, protection or benefit authorized or created hereby. The
obligations of the Debtors under this Interim Order and the DIP Financing
Documents shall not be discharged by the entry of an order confirming a plan of
reorganization in any of the Debtors' chapter 11 cases and, pursuant to Section
1141(d)(4) of the Bankruptcy Code, the Debtors hereby waive such discharge.
30. The Pre-Petition Agent, the Pre-Petition Lenders, the DIP
Agents and the DIP Lenders, having been found to be acting in good faith, shall
be and are entitled to the full benefits and protection of Section 364(e) of the
Bankruptcy Code and the claims, Liens and priorities created or authorized in
this Interim Order, the DIP Financing Documents and the DIP Financing Documents
and Pre-Petition Collateral Documents shall be and are entitled to the full
benefits and protections of Section 364(e) of the Bankruptcy Code.
31. The terms and provisions of this Interim Order shall be
binding upon and inure to the benefit of the Debtors, the DIP Lenders, the DIP
Agents, the Pre-Petition Agent, the Pre-Petition Lenders and their respective
successors and assigns and shall survive the Termination Date. The terms and
provisions of this Interim Order shall be binding upon any trustee appointed in
the within cases or in any chapter 7 case to which the within chapter 11 cases
may be converted.
32. No entity affiliated with the Debtors hereafter commencing
a case under Chapter 11 of the Bankruptcy Code may use the Cash Collateral or
the proceeds of the Post-Petition Loans unless and until, in each such case, the
Pre-Petition Lenders and the DIP Lenders (as applicable) consent and an order is
entered causing all of the terms and conditions of this Interim Order to apply
to such entity.
46
33. The Debtors hereby waive (i) the requirement that the
Pre-Petition Agent or the Pre-Petition Lenders file proofs of claim in these
chapter 11 cases with respect to the Pre-Petition Indebtedness and any other
claims granted hereunder or created hereby, and (ii) the requirement that the
DIP Agents or the DIP Lenders file proofs of claim in these chapter 11 cases
with respect to the any borrowings made or credit extended pursuant to the DIP
Financing Documents and any other claims granted hereunder or created hereby.
34. This Interim Order supersedes and terminates the Cash
Collateral Stipulation in all respects; provided that entry of this Interim
Order shall not be deemed in any way to cause an interruption in the continuity
of the Pre-Petition Agent's, the Pre-Petition Lenders' and the L/C Facility
Lenders' adequate protection granted pursuant to the Cash Collateral
Stipulation.
35. Any plan of reorganization confirmed in these Chapter 11
cases shall provide that the 1.5% accrual on Base Rate Advances that have been
converted from Eurodollar Advances pursuant to paragraph 12(c) of this Interim
Order shall be paid in full in cash on the effective date thereof.
36. The reservation of rights and stipulations set forth on
the record at the Interim Hearing by counsel for the Committee are incorporated
herein by reference.
37. The final hearing on the Motion is scheduled for November
5, 2004 at 11:00 a.m. (Detroit time) before this Court (the "Final Hearing")
(which date shall be within 30 days of entry of this Interim Order). Under the
circumstances, the notice given by the Debtors of the Motion and the Interim
Hearing held thereon constitutes due and sufficient notice of the Motion and of
the Interim Hearing. The Debtors shall promptly mail by ______ __, 2004 copies
of this Interim Order to the parties who were given notice of the Interim
Hearing and to any other party
47
which has filed a request for notices with either the Court or the Debtors'
counsel, and to any Committee after the same has been appointed, or to Committee
counsel, if the same shall have been appointed. Any party in interest objecting
to the relief sought at the Final Hearing shall serve and file written
objections; which objections shall be served upon (i) O'Melveny & Myers LLP,
Seven Times Square, New York, New York 10036 Attention: Sandeep Qusba, Esq.,
Attorneys for the DIP Collateral Agent; (ii) Wachtell Lipton Rosen & Katz LLP,
51 West 52(nd) Street, New York, New York 10019 Attention: Richard Mason, Esq.,
Attorneys for the Pre-Petition Agent and the DIP Administrative Agent; (iii)
Foley and Lardner LLP, 150 West Jefferson, Suite 1000, Detroit, Michigan 48226
Attention: Judy O'Neill, Esq., Attorneys for the Debtors; (iv) the Office of the
United States Trustee for the Eastern District of Michigan and shall be filed
with the Clerk of the United States Bankruptcy Court for the Eastern District of
Michigan; and (v) Luskin, Stern & Eisler LLP, 330 Madison Avenue, New York, New
York 10017, Attention: Michael Luskin, Esq., Attorneys for Scotiabank with
respect to L/C Facility Agreement, so as to be received no later than 5:00 p.m.
three (3) days before such hearing.
SO ORDERED, this 19 day of October.
____________________________________
United States Bankruptcy Court Judge
48
EXHIBIT IV
[FORM OF REQUEST FOR ISSUANCE]
REQUEST FOR ISSUANCE
Pursuant to that certain Debtor-in-Possession Credit Agreement dated as
of October [__], 2004, as amended, supplemented or otherwise modified to the
date hereof (said Debtor-in-Possession Credit Agreement, as so amended,
supplemented or otherwise modified, being the "CREDIT AGREEMENT", the terms
defined therein and not otherwise defined herein being used herein as therein
defined), by and among Intermet Corporation ("COMPANY") and the subsidiaries of
Company listed on the signature pages thereof (collectively, Company and such
Subsidiaries of Company are "BORROWERS" and each a "BORROWER"); the financial
institutions listed on the signature pages thereof as Lenders; Deutsche Bank
Trust Company Americas, as Collateral Agent and as Co-Agent; and The Bank of
Nova Scotia, as Administrative Agent; this represents Borrowers' request for the
issuance of a Revolving Letter of Credit as follows:
1. Issuing Lender: [Insert Name and Address of Issuing Lender]
2. Date of issuance of Revolving Letter of Credit: ____________, 200__
3. Type of Revolving Letter of Credit:
[ ] a. Commercial Letter of Credit
[ ] b. Standby Letter of Credit
4. Face amount of Revolving Letter of Credit: $______________
5. Expiration date of Revolving Letter of Credit:
____________, 200__
6. Name and address of beneficiary:
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
7. Attached hereto is:
[ ] a. the verbatim text of such proposed Revolving Letter
of Credit
[ ] b. a description of the proposed terms and conditions
of such Revolving Letter of Credit, including a precise
description of any documents to be presented by the
beneficiary which, if presented by the beneficiary
prior to the expiration date of such Revolving Letter
of Credit, would require the Issuing Lender to make
payment under such Revolving Letter of Credit.
IV-1
[Each of the] [The] undersigned Officer[s], to the best of his or her
knowledge, and Borrowers certify that:
(i) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true, correct and complete
in all material respects on and as of the date hereof to the same
extent as though made on and as of the date hereof, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties were
true, correct and complete in all material respects on and as of such
earlier date; provided, that, if a representation and warranty is
qualified as to materiality, with respect to such representation and
warranty the materiality qualifier set forth above shall be disregarded
for purposes of this condition;
(ii) (a) The issuance of the requested Revolving Letter of Credit is
strictly in accordance with the Budget and (b) after the issuance of
the requested Revolving Letter of Credit, the aggregate Revolving
Letter of Credit Usage will not exceed the applicable limitations
thereon in subsection 7.6A;
(iii) The [Interim Borrowing Order] [and] [Final Borrowing Order] is
[are] in full force and effect and has [have] not been stayed by the
Bankruptcy Court or any other court of competent jurisdiction;
(iv) No event has occurred and is continuing or would result from the
consummation of the borrowing contemplated hereby that would constitute
an Event of Default or a Potential Event of Default;
(v) Each Loan Party has performed in all material respects all
agreements and satisfied all conditions including, without limitation,
those set forth in Section 4 thereof, which the Credit Agreement
provides shall be performed or satisfied by it on or before the date
hereof;
(vi) No order, judgment or decree of any arbitrator, the Bankruptcy
Court or other Government Authority purports to enjoin or restrain any
Lender from making the Revolving Loans to be made by it on the date
hereof;
(vii) After the consummation of the borrowing contemplated by this
Notice of Borrowing, the Total Utilization of Revolving Commitments
will not exceed the least of (a) the aggregate Revolving Commitments,
(b) the Borrowing Base and (c) the amount of Revolving Loans and
Revolving Letters of Credit permitted to be outstanding under the
Credit Agreement pursuant to the Interim Borrowing Order or Final
Borrowing Order (as applicable); and
(viii) No pleading has been filed in the Bankruptcy Court (or any other
court of competent jurisdiction) by any party in interest which has not
been withdrawn, dismissed or denied within 55 days after filing seeking
(a) to dismiss or convert any of the Chapter 11 Cases to a Chapter 7
case, (b) the appointment of a Chapter 11 trustee in any of the Chapter
11 Cases, (c) the appointment of an examiner having enlarged powers
relating to the operation of the business of Borrowers (beyond those
set forth in Sections 1106(a)(3)
IV-2
and (4) of the Bankruptcy Code), (d) the granting of a super-priority
claim or a Lien pari passu or senior to that of the Collateral Agent
granted pursuant to the Collateral Documents, the Interim Borrowing
Order and/or the Final Borrowing Order, (e) to stay, reverse, vacate,
or otherwise modify the Interim Borrowing Order or the Final Borrowing
Order without the prior written consent of each Agent and the Requisite
Lenders, or (f) relief from the automatic stay (or any other injunction
having similar effect) so as to allow a third party to proceed against
any material property or assets of Borrowers.
[Remainder of page intentionally left blank.]
IV-3
DATED: _________________, 200__ INTERMET CORPORATION
By: ___________________________________
Name:
Title:
EACH OF THE ENTITIES NAMED AS BORROWERS
ON THE SIGNATURE PAGES TO THE CREDIT
AGREEMENT
By: ___________________________________
Name:
Title:
IV-S-1
EXHIBIT V
[FORM OF BORROWING SUBSIDIARY AGREEMENT]
BORROWING SUBSIDIARY AGREEMENT
This BORROWING SUBSIDIARY AGREEMENT (this "AGREEMENT") is dated as of
_____________, 200__ and entered into among [NAME OF SUBSIDIARY BORROWER], a
_______________ corporation (the "SUBSIDIARY"), INTERMET CORPORATION, a Georgia
corporation ("COMPANY"), each of THE OTHER BORROWERS LISTED ON THE SIGNATURE
PAGES HEREOF, each of THE SUBSIDIARY GUARANTORS LISTED ON THE SIGNATURE PAGES
HEREOF, DEUTSCHE BANK TRUST COMPANY AMERICAS, as collateral agent (in such
capacity, "COLLATERAL AGENT") for the lenders party to that certain
Debtor-in-Possession Credit Agreement, dated as of October [__], 2004, by and
among Company, the Subsidiary Borrowers (collectively, Company and such
subsidiaries are referred to herein as "BORROWERS" and each as a "BORROWER"),
the financial institutions listed on the signature pages thereof as Lenders, The
Bank of Nova Scotia, as administrative agent for the Lenders, and Collateral
Agent (such Debtor-in-Possession Credit Agreement, as amended, amended and
restated, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"; capitalized terms used herein without definition having the meanings
set forth in the Credit Agreement).
The parties hereto hereby agree as follows:
(1) Pursuant to subsection 6.8D of the Credit Agreement, Company hereby
designates the Subsidiary as an Additional Subsidiary Borrower and a Borrower
under the Credit Agreement.
(2) The Subsidiary hereby confirms that it has received a copy of, and
is fully familiar with, the Credit Agreement. Company and the Subsidiary hereby
enter into this Agreement in order to comply with subsection 6.8D of the Credit
Agreement and do so in consideration of the advances to be made from time to
time under the Credit Agreement to the Subsidiary.
(3) The Subsidiary, with respect to itself, and Company each represent
and warrant that all representations and warranties contained in the Credit
Agreement are true, correct and complete in all material respects on and as of
the date hereof to the same extent as though made on and as of that date, except
to the extent such representations and warranties specifically relate to an
earlier date, in which case they were true, correct and complete in all material
respects on and as of such earlier date.
(4) As and from the date hereof, the Subsidiary shall be considered,
and deemed to be, for all purposes of the Credit Agreement, a Borrower under the
Credit Agreement as fully as though the Subsidiary had executed and delivered
the Credit Agreement as a "Borrower" thereunder at the time originally executed
and delivered and hereby ratifies and confirms its obligations under the Credit
Agreement, all in accordance with the terms thereof.
V-1
(5) The Subsidiary hereby covenants and agrees with and in favor of the
parties hereto and each of the Agents and Lenders that as of the date indicated
above, it (i) shall be deemed to be a Borrower under the Credit Agreement to the
same extent and with the same effect as though it were a party thereto and named
as a Borrower therein, (ii) will observe and perform at all times from and after
the date hereof all of the obligations contained in the Credit Agreement on the
part of a Borrower to be observed and performed by it with respect to any
Revolving Loans or Revolving Letters of Credit or other Obligations as a
Borrower under the terms of the Credit Agreement, and (iii) confirms for itself
all of the representations and warranties of Borrowers under the Credit
Agreement mutatis mutandis with respect to the execution, delivery and
performance of this Agreement (and the Credit Agreement as modified hereby) by
it and the enforceability of its obligations under the Credit Agreement as
modified by this Agreement.
(6) Any notice which may or is required to be given to the Subsidiary
pursuant to the Credit Agreement shall be given in accordance with the terms
thereof. For purposes of the Credit Agreement, the address of the Subsidiary
shall be as set forth under its name on the signature pages hereof.
(7) Upon execution of this Agreement by Borrowers, Subsidiary
Guarantors, the Subsidiary and Collateral Agent, the Subsidiary shall be a party
to the Credit Agreement and shall be a "Borrower" for all purposes thereof, and
the Subsidiary hereby agrees to be bound by all provisions of the Credit
Agreement.
(8) The Subsidiary agrees that all of its property which would
be "Collateral" as defined in the Credit Agreement if it were property of
another Borrower shall become part of the "Collateral" for purposes of the
Collateral Documents and shall secure all Secured Obligations under (and as
defined in) the Collateral Documents, and hereby grants to Collateral Agent a
security interest in all of the Subsidiary's right, title and interest in and to
such Collateral of the Subsidiary, whether now or hereafter existing or in which
the Subsidiary now has or hereafter acquires an interest and wherever the same
may be located.
(9) This Agreement and the rights and obligations of the parties
hereunder shall be governed by, and shall be construed and enforced in
accordance with, the internal laws of the State of New York (including without
limitation Section 5-1401 of the General Obligations Law of the State of New
York), without regard to conflicts of law principles.
(10) This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
[Remainder of page intentionally left blank.]
V-2
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
[NAME OF SUBSIDIARY]
By: _____________________________________
Name:
Title:
Notice Address: _________________________
_________________________
_________________________
INTERMET CORPORATION
By: _____________________________________
Name:
Title:
EACH OF THE ENTITIES NAMED AS BORROWERS
ON THE SIGNATURE PAGES TO THE CREDIT
AGREEMENT
By: _____________________________________
Name:
Title:
EACH OF THE ENTITIES NAMED AS GUARANTORS
ON THE SIGNATURE PAGES TO THE SUBSIDIARY
GUARANTY
By: _____________________________________
Name:
Title:
V-S-1
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Collateral Agent
By: _______________________________
Name: _____________________________
Title: ____________________________
V-S-2
EXHIBIT VI
[FORM OF] REVOLVING NOTE
INTERMET CORPORATION
$_____________________(1) ______________________(2)
{Issuance date}
FOR VALUE RECEIVED, Intermet Corporation, a Georgia
corporation ("COMPANY"), promises to pay to ________________(3) ("PAYEE") or its
registered assigns, the lesser of (x) _______________________(4)
($[____________________1]) and (y) the unpaid principal amount of all advances
made by Payee to Company as Revolving Loans under the Credit Agreement referred
to below. The principal amount of this Note shall be payable on the dates and in
the amounts specified in the Credit Agreement.
Company also promises to pay interest on the unpaid principal
amount hereof, until paid in full, at the rates and at the times which shall be
determined in accordance with the provisions of that certain Credit Agreement
dated as of October [__], 2004 by and among Company, the financial institutions
listed therein as Lenders, Deutsche Bank Trust Company Americas, as Collateral
Agent and Co-Agent and The Bank of Nova Scotia, as Administrative Agent (said
Credit Agreement, as it may be amended, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
This Note is one of Company's "Revolving Notes" and is issued
pursuant to and entitled to the benefits of the Credit Agreement, to which
reference is hereby made for a more complete statement of the terms and
conditions under which the Revolving Loans evidenced hereby were made and are to
be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the Funding and Payment Office or at such other place as shall be designated
in writing for such purpose in accordance with the terms of the Credit
Agreement. Unless and until an Assignment Agreement effecting the assignment or
transfer of this Note shall have been accepted by Administrative Agent and
recorded in the Register as provided in the Credit Agreement, Company and
Administrative Agent shall be entitled to deem and treat Payee as the owner and
holder of this Note and the Revolving Loans evidenced hereby. Payee hereby
agrees, by its acceptance hereof, that before disposing of this Note or any part
hereof it will make a notation hereon of all principal payments previously made
hereunder and of the date to which interest hereon has been paid; provided,
however, that the failure to make a notation of any payment made on this Note
shall not limit or otherwise affect the obligations of Company hereunder with
respect to payments of principal of or interest on this Note.
- ------------------
(1) Insert amount of Lender's Revolving Loan Commitment in numbers.
(2) Insert place of delivery of Note.
(3) Insert Lender's name in capital letters.
(4) Insert amount of Lender's Revolving Loan Commitment in words.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
the Credit Agreement and to prepayment at the option of Company as provided in
the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligations of
Company, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
Company promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in the Credit Agreement, incurred in
the collection and enforcement of this Note. Company and any endorsers of this
Note hereby consent to renewals and extensions of time at or after the maturity
hereof, without notice, and hereby waive diligence, presentment, protest, demand
and notice of every kind and, to the full extent permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, Company has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
INTERMET CORPORATION
By: _________________________________
Title: ______________________________
TRANSACTIONS
ON
REVOLVING NOTE
Outstanding
Type of Amount of Amount of Principal
Loan Made Loan Made Principal Paid Balance Notation
Date This Date This Date This Date This Date Made By
- ------ --------- --------- -------------- ----------- --------
EXHIBIT VII
[FORM OF SUBSIDIARY GUARANTY]
SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY is entered into as of October [__], 2004 by
the undersigned (each a "GUARANTOR", and together with any future Subsidiaries
of Company executing this Guaranty, being collectively referred to herein as the
"GUARANTORS") in favor of and for the benefit of DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Collateral Agent for and representative of (in such capacity herein
called "GUARANTIED PARTY") the Lenders from time to time party to the Credit
Agreement referred to below and in favor of and for the benefit of the other
Beneficiaries (as hereinafter defined).
RECITALS
A. Intermet Corporation, a Georgia corporation ("COMPANY"),
and certain subsidiaries of Company (collectively, Company and such subsidiaries
of Company are "BORROWERS" and each a "BORROWER"), have entered into that
certain Debtor-in-Possession Credit Agreement dated as of October [__], 2004
with the financial institutions listed on the signature pages thereof as
Lenders, The Bank of Nova Scotia, as Administrative Agent ("ADMINISTRATIVE
AGENT"), and Guarantied Party, as Collateral Agent for Lenders (said
Debtor-in-Possession Credit Agreement, as it may heretofore have been and as it
may hereafter be amended, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT"; capitalized terms defined therein and not
otherwise defined herein being used herein as therein defined).
B. Guarantied Party, Administrative Agent and Lenders are
sometimes referred to herein as "BENEFICIARIES".
C. Pursuant to the Credit Agreement, Borrowers and the Lenders
have agreed that the Lenders shall provide, subject to the terms and conditions
contained in the Credit Agreement, a debtor-in-possession revolving credit
facility for the Borrowers to fund working capital and general corporate
purposes and to make certain other payments during the Chapter 11 Cases, and
thus the Guarantied Obligations (as hereinafter defined) are being incurred for
and will inure to the benefit of Guarantors (which benefits are hereby
acknowledged).
D. It is a condition precedent to the making of the initial
Revolving Loans under the Credit Agreement that Borrower's obligations
thereunder be guarantied by Guarantors.
E. Guarantors are willing irrevocably and unconditionally to
guaranty such obligations of Borrowers.
NOW, THEREFORE based upon the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce Lenders and Guarantied Party to enter into the Credit
Agreement and to make Revolving Loans and other extensions of credit thereunder,
Guarantors hereby agree as follows:
VII-1
1. GUARANTY. (a) In order to induce Lenders to extend credit
to Borrowers pursuant to the Credit Agreement, Guarantors jointly and severally
irrevocably and unconditionally guaranty, as primary obligors and not merely as
sureties, the due and punctual payment in full of all Guarantied Obligations (as
hereinafter defined) when the same shall become due, whether at stated maturity,
by acceleration, demand or otherwise (including amounts that would become due
but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code). The term "GUARANTIED OBLIGATIONS" is used herein in its most
comprehensive sense and includes, without limitation, any and all Obligations of
Borrowers, now or hereafter made, incurred or created, whether absolute or
contingent, liquidated or unliquidated, whether due or not due, and however
arising under or in connection with the Credit Agreement, this Guaranty and the
other Loan Documents, including, without limitation, those arising under
successive borrowing transactions under the Credit Agreement which shall either
continue the Obligations of Borrowers or from time to time renew them after they
have been satisfied.
Each Guarantor acknowledges that a portion of the Revolving Loans may
be advanced to it, that Revolving Letters of Credit may be issued for the
benefit of its business, and that the Guarantied Obligations with respect to the
Credit Agreement and the other Loan Documents are being incurred for and will
inure to its benefit.
Any interest, fees, costs, expenses or other charges on any portion of
the Guarantied Obligations that accrue after the commencement of any proceeding,
voluntary or involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of Borrowers or of Company and/or its
Subsidiaries, as the case may be, including, without limitation, accruals
permitted under Section 506(b) of the Bankruptcy Code (or, if interest, fees,
costs, expenses or other charges on any portion of the Guarantied Obligations
cease to accrue by operation of law by reason of the commencement of said
proceeding, such interest as would have accrued on such portion of the
Guarantied Obligations if said proceeding had not been commenced) shall be
included in the Guarantied Obligations because it is the intention of each
Guarantor and Guarantied Party that the Guarantied Obligations should be
determined without regard to any rule of law or order that may relieve Borrowers
or of Company and/or its Subsidiaries, as the case may be, of any portion of
such Guarantied Obligations.
In the event that all or any portion of the Guarantied Obligations is
paid by Borrowers or by Company and/or its Subsidiaries, as the case may be, the
obligations of each Guarantor hereunder shall continue and remain in full force
and effect or be reinstated, as the case may be, in the event that all or any
part of such payment(s) is rescinded or recovered directly or indirectly from
Guarantied Party or any other Beneficiary as a preference, fraudulent transfer
or otherwise, and any such payments that are so rescinded or recovered shall
constitute Guarantied Obligations.
Subject to the other provisions of this Section 1, upon the failure of
Borrowers or of Company and/or its Subsidiaries, as the case may be, to pay any
of the Guarantied Obligations when and as the same shall become due, each
Guarantor will upon demand pay, or cause to be paid, in cash, to Guarantied
Party for the ratable benefit of Beneficiaries, an amount equal to the aggregate
of the unpaid Guarantied Obligations.
VII-2
(b) Anything contained in this Guaranty to the contrary
notwithstanding, the obligations of each Guarantor under this Guaranty shall be
limited to a maximum aggregate amount equal to the largest amount that would not
render its obligations hereunder subject to avoidance as a fraudulent transfer
or conveyance under Section 548 of the Bankruptcy Code or any applicable
provisions of comparable state law (collectively, the "FRAUDULENT TRANSFER
LAWS"), in each case after giving effect to all other liabilities of such
Guarantor, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of such
Guarantor (x) in respect of intercompany indebtedness to Borrowers or other
affiliates of Borrowers to the extent that such indebtedness would be discharged
in an amount equal to the amount paid by such Guarantor hereunder and (y) under
any guaranty of Subordinated Indebtedness which guaranty contains a limitation
as to maximum amount similar to that set forth in this Section 1(b), pursuant to
which the liability of such Guarantor hereunder is included in the liabilities
taken into account in determining such maximum amount) and after giving effect
as assets to the value (as determined under the applicable provisions of the
Fraudulent Transfer Laws) of any rights to subrogation, reimbursement,
indemnification or contribution of such Guarantor pursuant to applicable law or
pursuant to the terms of any agreement.
(c) Each Guarantor under this Guaranty, and each guarantor under other
guaranties, if any, relating to the Credit Agreement (the "RELATED GUARANTIES")
that contain a contribution provision similar to that set forth in this Section
1(c), together desire to allocate among themselves (collectively, the
"CONTRIBUTING GUARANTORS"), in a fair and equitable manner, their obligations
arising under this Guaranty and the Related Guaranties. Accordingly, in the
event any payment or distribution is made on any date by a Guarantor under this
Guaranty or a guarantor under a Related Guaranty, each such Guarantor or such
other guarantor shall be entitled to a contribution from each of the other
Contributing Guarantors in the maximum amount permitted by law so as to maximize
the aggregate amount of the Guarantied Obligations paid to Beneficiaries.
2. GUARANTY ABSOLUTE; CONTINUING GUARANTY. The obligations of
each Guarantor hereunder are irrevocable, absolute, independent and
unconditional and shall not be affected by any circumstance which constitutes a
legal or equitable discharge of a guarantor or surety other than payment in full
of the Guarantied Obligations. In furtherance of the foregoing and without
limiting the generality thereof, each Guarantor agrees that: (a) this Guaranty
is a guaranty of payment when due and not of collectibility; (b) Guarantied
Party may enforce this Guaranty upon the occurrence and during the continuation
of an Event of Default under the Credit Agreement notwithstanding the existence
of any dispute between Borrowers and any Beneficiary with respect to the
existence of such event; (c) the obligations of each Guarantor hereunder are
independent of the obligations of Borrowers under the Loan Documents and the
obligations of any other Guarantor and a separate action or actions may be
brought and prosecuted against each Guarantor whether or not any action is
brought against Borrowers or any of such other Guarantors and whether or not
Borrowers are joined in any such action or actions; and (d) a payment of a
portion, but not all, of the Guarantied Obligations by one or more Guarantors
shall in no way limit, affect, modify or abridge the liability of such or any
other Guarantor for any portion of the Guarantied Obligations that has not been
paid. This Guaranty is a continuing guaranty and shall be binding upon each
Guarantor and its successors and assigns,
VII-3
and each Guarantor irrevocably waives any right to revoke this Guaranty as to
future transactions giving rise to any Guarantied Obligations.
3. ACTIONS BY BENEFICIARIES. Any Beneficiary may from time to
time, subject to the terms and conditions in the Credit Agreement, without
notice or demand and without affecting the validity or enforceability of this
Guaranty or giving rise to any limitation, impairment or discharge of any
Guarantor's liability hereunder, (a) renew, extend, accelerate or otherwise
change the time, place, manner or terms of payment of the Guarantied
Obligations, (b) settle, compromise, release or discharge, or accept or refuse
any offer of performance with respect to, or substitutions for, the Guarantied
Obligations or any agreement relating thereto and/or subordinate the payment of
the same to the payment of any other obligations, (c) request and accept other
guaranties of the Guarantied Obligations and take and hold security for the
payment of this Guaranty or the Guarantied Obligations, (d) release, exchange,
compromise, subordinate or modify, with or without consideration, any security
for payment of the Guarantied Obligations, any other guaranties of the
Guarantied Obligations, or any other obligation of any Person with respect to
the Guarantied Obligations, (e) enforce and apply any security now or hereafter
held by or for the benefit of any Beneficiary in respect of this Guaranty or the
Guarantied Obligations and direct the order or manner of sale thereof, or
exercise any other right or remedy that Guarantied Party or the other
Beneficiaries, or any of them, may have against any such security, as Guarantied
Party in its discretion may determine consistent with the Credit Agreement and
any applicable Loan Documents, including foreclosure on any such security
pursuant to one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable, and (f) exercise any other
rights available to Guarantied Party or the other Beneficiaries, or any of them,
under the Loan Documents.
4. NO DISCHARGE. This Guaranty and the obligations of
Guarantors hereunder shall be valid and enforceable and shall not be subject to
any limitation, impairment or discharge for any reason (other than payment in
full in cash of the Guarantied Obligations), including without limitation the
occurrence of any of the following, whether or not any Guarantor shall have had
notice or knowledge of any of them: (a) any failure to assert or enforce or
agreement not to assert or enforce, or the stay or enjoining, by order of court,
by operation of law or otherwise, of the exercise or enforcement of, any claim
or demand or any right, power or remedy with respect to the Guarantied
Obligations or any agreement relating thereto, or with respect to any other
guaranty of or security for the payment of the Guarantied Obligations, (b) any
waiver or modification of, or any consent to departure from, any of the terms or
provisions of the Credit Agreement, any of the other Loan Documents or any
agreement or instrument executed pursuant thereto, or of any other guaranty or
security for the Guarantied Obligations, (c) the Guarantied Obligations, or any
agreement relating thereto, at any time being found to be illegal, invalid,
unenforceable or disallowed in any respect (including, without limitation,
pursuant to Section 502 of the Bankruptcy Code), (d) the application of payments
received from any source to the payment of indebtedness other than the
Guarantied Obligations, even though Guarantied Party or the other Beneficiaries,
or any of them, might have elected to apply such payment to any part or all of
the Guarantied Obligations, (e) any failure to perfect or continue perfection of
a security interest in any collateral which secures any of the Guarantied
Obligations, (f) any defenses, set-offs or counterclaims which Borrowers may
assert against Guarantied Party or any Beneficiary in respect of the Guarantied
Obligations, including but not limited to failure of consideration, breach of
warranty, payment, statute of frauds, statute of
VII-4
limitations, accord and satisfaction and usury, and (g) 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 a Guarantor as an obligor in respect of
the Guarantied Obligations.
5. WAIVERS. Each Guarantor waives, for the benefit of
Beneficiaries: (a) any right to require Guarantied Party or the other
Beneficiaries, as a condition of payment or performance by such Guarantor, to
(i) proceed against Borrowers, any other guarantor (including any other
Guarantor) of the Guarantied Obligations or any other Person, (ii) proceed
against or exhaust any security held from Borrowers, any other guarantor of the
Guarantied Obligations or any other Person, (iii) proceed against or have resort
to any balance of any deposit account or credit on the books of any Beneficiary
in favor of Borrowers or any other Person, or (iv) pursue any other remedy in
the power of any Beneficiary; (b) any defense arising by reason of the
incapacity, lack of authority or any disability or other defense of Borrowers
including, without limitation, any defense based on or arising out of the lack
of validity or the unenforceability of the Guarantied Obligations or any
agreement or instrument relating thereto or by reason of the cessation of the
liability of Borrowers from any cause other than payment in full of the
Guarantied Obligations; (c) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither larger in amount
nor in other respects more burdensome than that of the principal; (d) any
defense based upon Guarantied Party's or any other Beneficiary's errors or
omissions in the administration of the Guarantied Obligations, except behavior
that amounts to bad faith; (e) (i) any principles or provisions of law,
statutory or otherwise, that are or might be in conflict with the terms of this
Guaranty and any legal or equitable discharge of such Guarantor's obligations
hereunder, (ii) the benefit of any statute of limitations affecting such
Guarantor's liability hereunder or the enforcement hereof, (iii) any rights to
set-offs, recoupments and counterclaims, and (iv) promptness, diligence and any
requirement that any Beneficiary protect, secure, perfect or insure any Lien or
any property subject thereto; (f) notices, demands, presentments, protests,
notices of protest, notices of dishonor and notices of any action or inaction,
including acceptance of this Guaranty, notices of default under the Credit
Agreement, notices of any renewal, extension or modification of the Guarantied
Obligations or any agreement related thereto, notices of any extension of credit
to Borrowers and notices of any of the matters referred to in Section 3 and 4
hereof and any right to consent to any thereof; and (g) to the fullest extent
permitted by law, any defenses or benefits that may be derived from or afforded
by law which limit the liability of or exonerate guarantors or sureties, or
which may conflict with the terms of this Guaranty.
6. GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC.;
SUBORDINATION OF OTHER OBLIGATIONS. Each Guarantor waives any claim, right or
remedy, direct or indirect, that such Guarantor now has or may hereafter have
against Borrowers or any of its assets in connection with this Guaranty or the
performance by such Guarantor of its obligations hereunder, in each case whether
such claim, right or remedy arises in equity, under contract, by statute under
common law or otherwise and including without limitation (a) any right of
subrogation, reimbursement or indemnification that such Guarantor now has or may
hereafter have against Borrowers, (b) any right to enforce, or to participate
in, any claim, right or remedy that any Beneficiary now has or may hereafter
have against Borrowers, and (c) any benefit of, and any right to participate in,
any collateral or security now or hereafter held by any Beneficiary. In
addition, until the Guarantied Obligations shall have been paid in full in cash
and the Commitments shall have terminated and all Revolving Letters of Credit
shall have expired or
VII-5
been cancelled, each Guarantor shall withhold exercise of any right of
contribution such Guarantor may have against any other guarantor of any of the
Guarantied Obligations. Each Guarantor further agrees that, to the extent the
waiver or agreement to withhold the exercise of its rights of subrogation,
reimbursement, indemnification and contribution as set forth herein is found by
a court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation, reimbursement or indemnification such Guarantor may have
against Borrowers or against any collateral or security, and any rights of
contribution such Guarantor may have against any such other guarantor, shall be
junior and subordinate to any rights Guarantied Party or the other Beneficiaries
may have against Borrowers, to all right, title and interest Guarantied Party or
the other Beneficiaries may have in any such collateral or security, and to any
right Guarantied Party or the other Beneficiaries may have against such other
guarantor.
Any indebtedness of Borrowers now or hereafter held by any Guarantor is
subordinated in right of payment to the Guarantied Obligations, and any such
indebtedness of Borrowers to a Guarantor collected or received by such Guarantor
after an Event of Default has occurred and is continuing, and any amount paid to
a Guarantor on account of any subrogation, reimbursement, indemnification or
contribution rights referred to in the preceding paragraph when all Guarantied
Obligations have not been paid in full in cash, shall be held in trust for
Guarantied Party on behalf of Beneficiaries and shall forthwith be paid over to
Guarantied Party for the benefit of Beneficiaries to be credited and applied
against the Guarantied Obligations.
7. EXPENSES. Guarantors jointly and severally agree to pay, or
cause to be paid, on demand, and to save Guarantied Party and the other
Beneficiaries harmless against liability for, (i) any and all costs and expenses
(including fees and disbursements of counsel and allocated costs of internal
counsel) incurred or expended by Guarantied Party or any other Beneficiary in
connection with the enforcement of or preservation of any rights under this
Guaranty and (ii) any and all costs and expenses (including those arising from
rights indemnification) required to be paid by Guarantors under the provisions
of any other Loan Document, together with any and all interest (at the default
rate set forth in subsection 2.2E of the Credit Agreement) that shall accrue on
unpaid costs and expenses referred to in clause (i) and (ii) hereof (to the
extent permitted by applicable law).
8. FINANCIAL CONDITION OF BORROWERS. No Beneficiary shall have
any obligation, and each Guarantor waives any duty on the part of any
Beneficiary, to disclose or discuss with such Guarantor its assessment, or such
Guarantor's assessment, of the financial condition of Borrowers or any matter or
fact relating to the business, operations or condition of Borrowers. Each
Guarantor has adequate means to obtain information from Borrowers on a
continuing basis concerning the financial condition of Borrowers and their
ability to perform their obligations under the Loan Documents, and each
Guarantor assumes the responsibility for being and keeping informed of the
financial condition of Borrowers and of all circumstances bearing upon the risk
of nonpayment of the Guarantied Obligations.
9. REPRESENTATIONS AND WARRANTIES. Each Guarantor makes, for
the benefit of Beneficiaries, each of the representations and warranties made in
the Credit Agreement by Borrowers as to such Guarantor, its assets, financial
condition, operations, organization, legal status, business and the Loan
Documents to which it is a party.
VII-6
10. COVENANTS. Each Guarantor agrees that, so long as any part
of the Guaranteed Obligations shall remain unpaid, any Revolving Letter of
Credit shall be outstanding or any Lender shall have any Commitment, such
Guarantor will, unless Requisite Lenders shall otherwise consent in writing,
perform or observe, and cause its Subsidiaries to perform or observe, all of the
terms, covenants and agreements that the Loan Documents state that Borrowers are
to cause a Guarantor and such Subsidiaries to perform or observe.
11. SET OFF. In addition to any other rights any Beneficiary
may have under law or in equity, if any amount shall at any time be due and
owing by a Guarantor to any Beneficiary under this Guaranty, such Beneficiary is
authorized at any time or from time to time, without notice (any such notice
being expressly waived), to set off and to appropriate and to apply any and all
deposits (general or special, including but not limited to indebtedness evidence
by certificates of deposit, whether matured or unmatured) and any other
indebtedness of such Beneficiary owing to a Guarantor and any other property of
such Guarantor held by a Beneficiary to or for the credit or the account of such
Guarantor against and on account of the Guarantied Obligations and liabilities
of such Guarantor to any Beneficiary under this Guaranty.
12. TAXES AND SET-OFF BY GUARANTORS. All payments to be made
by the Guarantors hereunder will be made without set-off or counterclaim and
without deduction for any taxes, levies, duties, fees, deductions, withholdings,
restrictions or conditions of any nature whatsoever. If at any time any
applicable law, regulation or international agreement requires any Guarantor to
make any such deduction or withholding from any such payment, the sum due from
such Guarantor with respect to such payment will be increased to the extent
necessary to ensure that, after the making of such deduction or withholding,
each Lender receives a net sum equal to the sum which it would have received had
no deduction or withholding been required.
13. DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR. If all of
the stock of a Guarantor or any of its successors in interest under this
Guaranty shall be sold or otherwise disposed of (including by merger or
consolidation) in a sale not prohibited by the Credit Agreement or otherwise
consented to by Lenders, the obligations of such Guarantor or such successor in
interest, as the case may be, hereunder shall automatically be discharged and
released without any further action by any Beneficiary or any other Person
effective as of the time of such sale; provided that, if the sale of such stock
constitutes an Asset Sale as a condition precedent to such discharge and
release, Guarantied Party shall have received evidence satisfactory to it that
arrangements satisfactory to it have been made for delivery to Guarantied Party
of the Net Asset Sale Proceeds of such Asset Sale as required by the Credit
Agreement.
14. AMENDMENTS AND WAIVERS. No amendment, modification,
termination or waiver of any provision of this Guaranty, and no consent to any
departure by any Guarantor therefrom, shall in any event be effective without
the written concurrence of Guarantied Party and, in the case of any such
amendment or modification, Guarantors. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.
15. MISCELLANEOUS. It is not necessary for Beneficiaries to
inquire into the capacity or powers of any Guarantor or Borrowers or the
officers, directors or any agents acting or purporting to act on behalf of any
of them.
VII-7
The rights, powers and remedies given to Beneficiaries by this Guaranty
are cumulative and shall be in addition to and independent of all rights, powers
and remedies given to Beneficiaries by virtue of any statute or rule of law or
in any of the Loan Documents or any agreement between one or more Guarantors and
one or more Beneficiaries or between Borrowers and one or more Beneficiaries.
Any forbearance or failure to exercise, and any delay by any Beneficiary in
exercising, any right, power or remedy hereunder shall not impair any such
right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy.
In case any provision in or obligation under this Guaranty shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTORS, GUARANTIED
PARTY AND THE OTHER BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
This Guaranty shall inure to the benefit of Beneficiaries and their
respective successors and assigns.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GUARANTOR ARISING OUT OF
OR RELATING TO THIS GUARANTY SHALL BE BROUGHT IN THE BANKRUPTCY COURT; PROVIDED,
THAT UPON DISMISSAL OF THE CHAPTER 11 CASES OR SHOULD THE BANKRUPTCY COURT
DECLINE JURISDICTION OVER THIS AGREEMENT, THE CREDIT AGREEMENT, THE CHAPTER 11
CASES OR THE TRANSACTIONS CONTEMPLATED THEREBY, SUCH PROCEEDINGS MAY BE BROUGHT
IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW
YORK, AND BY EXECUTION AND DELIVERY OF THIS GUARANTY EACH GUARANTOR ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS GUARANTY. Each Guarantor agrees that service of
all process in any such proceeding in any such court may be made by registered
or certified mail, return receipt requested, to such Guarantor at its address
set forth below its signature hereto, such service being acknowledged by such
Guarantor to be sufficient for personal jurisdiction in any action against such
Guarantor in any such court and to be otherwise effective and binding service in
every respect. Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of Guarantied Party or
any Beneficiary to bring proceedings against such Guarantor in the courts of any
other jurisdiction.
VII-8
EACH GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF,
GUARANTIED PARTY EACH AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY. The
scope of this waiver is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including without limitation contract claims, tort claims, breach
of duty claims and all other common law and statutory claims. Each Guarantor
and, by its acceptance of the benefits hereof, Guarantied Party each (i)
acknowledges that this waiver is a material inducement for such Guarantor and
Guarantied Party to enter into a business relationship, that such Guarantor and
Guarantied Party have already relied on this waiver in entering into this
Guaranty or accepting the benefits thereof, as the case may be, and that each
will continue to rely on this waiver in their related future dealings, and (ii)
further warrants and represents that each has reviewed this waiver with its
legal counsel and that each knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
OF THIS GUARANTY. In the event of litigation, this Guaranty may be filed as a
written consent to a trial by the court.
16. ADDITIONAL GUARANTORS. The initial Guarantor(s) hereunder
shall be such of the Subsidiaries of Borrowers as are signatories hereto on the
date hereof. From time to time subsequent to the date hereof, Subsidiaries of
Borrowers shall become parties hereto, in accordance with and subject to
subsection 6.8A of the Credit Agreement, as additional Guarantors (each an
"ADDITIONAL GUARANTOR"), by executing a counterpart of this Guaranty. A form of
such a counterpart is attached as Exhibit A. Upon delivery of any such
counterpart to Guarantied Party, notice of which is hereby waived by Guarantors,
each such Additional Guarantor shall be a Guarantor and shall be as fully a
party hereto as if such Additional Guarantor were an original signatory hereof.
Each Guarantor expressly agrees that its obligations arising hereunder shall not
be affected or diminished by the addition or release of any other Guarantor
hereunder, nor by any election of the Guarantied Party not to cause any
Subsidiary of Borrowers to become an Additional Guarantor hereunder. This
Guaranty shall be fully effective as to any Guarantor that is or becomes a party
hereto regardless of whether any other Person becomes or fails to become or
ceases to be a Guarantor hereunder.
17. COUNTERPARTS; EFFECTIVENESS. This Guaranty 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 for all purposes; but all such counterparts together shall
constitute but one and the same instrument. This Guaranty shall become effective
as to each Guarantor upon the execution of a counterpart hereof by such
Guarantor (whether or not a counterpart hereof shall have been executed by any
other Guarantor) and receipt by the Guaranteed Party of written or telephonic
notification of such execution and authorization of delivery thereof.
18. GUARANTIED PARTY AS AGENT.
(a) Guarantied Party has been appointed to act as Guarantied
Party hereunder by Lenders. Guarantied Party shall be obligated, and shall have
the right hereunder, to make
VII-9
demands, to give notices, to exercise or refrain from exercising any rights, and
to take or refrain from taking any action, solely in accordance with this
Guaranty and the Credit Agreement; provided that Guarantied Party shall
exercise, or refrain from exercising, any remedies under or with respect to this
Guaranty in accordance with the instructions of Requisite Lenders.
(b) Guarantied Party shall at all times be the same Person that is Collateral
Agent under the Credit Agreement. Written notice of resignation by Collateral
Agent pursuant to subsection 9.6 of the Credit Agreement shall also constitute
notice of resignation as Guarantied Party under this Guaranty; removal of
Collateral Agent pursuant to subsection 9.6 of the Credit Agreement shall also
constitute removal as Guarantied Party under this Guaranty; and appointment of a
successor Collateral Agent pursuant to subsection 9.6 of the Credit Agreement
shall also constitute appointment of a successor Guarantied Party under this
Guaranty. Upon the acceptance of any appointment as Collateral Agent under
subsection 9.6 of the Credit Agreement by successor Collateral Agent, that
successor Collateral Agent shall thereupon succeed to become vested with all the
rights, powers, privileges and duties of the retiring or removed Guarantied
Party under this Guaranty, and the retiring or removed Guarantied Party under
this Guaranty shall promptly (i) transfer to such successor Guarantied Party all
sums held hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Guarantied Party under this Guaranty, and (ii) take such other actions as may be
necessary or appropriate in connection with the assignment to such successor
Guarantied Party of the rights created hereunder, whereupon such retiring or
removed Guarantied Party shall be discharged from its duties and obligations
under this Guaranty. After any retiring or removed Guarantied Party's
resignation or removal hereunder as Guarantied Party, the provisions of this
Guaranty shall inure to its benefits as to any actions taken or omitted to be
taken by it under this Guaranty while it was Guarantied Party hereunder.
[Remainder of page intentionally left blank.]
VII-10
IN WITNESS WHEREOF, each Guarantor (and Guarantied Party solely for the
purposes of the waiver of the right to jury trial contained in Section 15) has
caused this Guaranty to be duly executed and delivered by its respective officer
thereunto duly authorized as of the date first written above.
EACH OF THE ENTITIES NAMED ON SCHEDULE A
ANNEXED HERETO
By: ____________________________________
Name:
Title:
Notice Address for each Guarantor:
[INSERT ADDRESS]
VII-S-1
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Guarantied Party
By: ____________________________________
Name:
Title:
Address: _______________________________
_______________________________
_______________________________
VII-S-2
EXHIBIT A
[FORM OF COUNTERPART FOR ADDITIONAL GUARANTORS]
This COUNTERPART (this "COUNTERPART"), dated _______, 200__, is
delivered pursuant to Section 16 of the Guaranty referred to below and
subsection 6.8A of the Credit Agreement referred to therein. The undersigned
hereby agrees that this Counterpart may be attached to the Subsidiary Guaranty,
dated as of October [__], 2004 (as it may be from time to time amended, modified
or supplemented, the "GUARANTY"; capitalized terms used herein not otherwise
defined herein shall have the meanings ascribed therein), among the Guarantors
named therein and Deutsche Bank Trust Company Americas, as Guarantied Party. The
undersigned, by executing and delivering this Counterpart, hereby becomes an
Additional Guarantor under the Guaranty in accordance with Section 16 thereof
and agrees to be bound by all of the terms thereof.
IN WITNESS WHEREOF, the undersigned has caused this Counterpart to be
duly executed and delivered by its officer thereunto duly authorized as of
______________, 20___.
[NAME OF ADDITIONAL GUARANTOR]
By: ____________________________________
Name:
Title:
Address: _______________________________
_______________________________
_______________________________
EXHIBIT VIII
[FORM OF COMPLIANCE CERTIFICATE]
COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFY THAT:
(1) We are the duly elected [Title] and [Title] of Intermet
Corporation, a Georgia corporation ("COMPANY");
(2) We have reviewed the terms of that certain
Debtor-in-Possession Credit Agreement dated as of October [__], 2004, as
amended, supplemented or otherwise modified to the date hereof (said
Debtor-in-Possession Credit Agreement, as so amended, supplemented or otherwise
modified, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined in this Certificate (including Attachment No. 1 annexed hereto
and made a part hereof) being used in this Certificate as therein defined), by
and among Company and the subsidiaries of Company listed on the signature pages
thereof (collectively, Company and such Subsidiaries of Company are "BORROWERS"
and each a "BORROWER"); the financial institutions listed on the signature pages
thereof as Lenders; Deutsche Bank Trust Company Americas, as Collateral Agent
and as Co-Agent; and The Bank of Nova Scotia, as Administrative Agent; and the
terms of the other Loan Documents, and we have made or have caused to be made
under our supervision, a review in reasonable detail of the transactions and
condition of Company and its Subsidiaries during the accounting period covered
by the attached financial statements; and
(3) The review described in paragraph (2) above did not
disclose, and we have no knowledge of, the existence of any condition or event
which constitutes an Event of Default or Potential Event of Default during or at
the end of the accounting period covered by the attached financial statements or
as of the date of this Certificate [, except as set forth on Exhibit A attached
hereto]; and
XI-1
The foregoing certifications, together with the computations
set forth in Attachment No. 1 annexed hereto and made a part hereof and the
financial statements delivered with this Certificate in support hereof, are made
and delivered this __________ day of _____________, 200__ pursuant to subsection
6.1(iv) of the Credit Agreement.
INTERMET CORPORATION
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
XI-2
ATTACHMENT NO. 1
TO COMPLIANCE CERTIFICATE
This Attachment No. 1 is attached to and made a part of a Compliance
Certificate dated as of ____________, 200__ and pertains to the period from
____________, 200__ to ____________, 200__. Subsection references herein relate
to subsections of the Credit Agreement.
A. RESTRICTED PAYMENTS
1. Aggregate amount of the proceeds of Revolving Loans used to
pay professionals for an official creditors' committee to
cover fees and expenses incurred in analyzing the liens and
claims of the Prepetition Lenders, as permitted under subsection 2.10: $_____________
2. Maximum permitted under subsection 2.10: $ 50,000
B. INDEBTEDNESS
1. Indebtedness, currently outstanding the proceeds of which are
used to purchase assets useful in Borrowers' business, of
Borrowers and their Subsidiaries after the Closing Date, as
permitted under subsection 7.1(iii): $_____________
2. Maximum permitted under subsection 7.1(iii): $ 5,000,000
3. Indebtedness, currently outstanding, of Foreign Subsidiaries owed to any
Borrower or its Subsidiaries, since the Closing Date, as permitted under
subsection 7.1(iv): $_____________
4. Maximum permitted under subsection 7.1(iv): $ 5,000,000
C. DISBURSEMENTS (for each week during the one month period ended ____, 200_): $_____________
1. Cash disbursements made by Company and its Subsidiaries for the one week
period ended _____, 200__, as defined in subsection 7.6A, for [INSERT
HEADING] $_____________
2. Amount of Cash disbursements set forth in the budget for such week and
such heading (including 15% cushion permitted according to subsection 7.6A
(Item C.1*1.15): $_____________
3. Cash disbursements made by Company and its Subsidiaries for the one week
period ended _____, 200__, as defined in subsection 7.6A, for [INSERT
HEADING] $_____________
4. Amount of Cash disbursements set forth in the budget for such week and
such heading (including 15% cushion permitted according to subsection 7.6A
(Item C.3*1.15): $_____________
5. Cash disbursements made by Company and its Subsidiaries for the one week
period ended _____, 200__, as defined in subsection 7.6A, for [INSERT
HEADING] $_____________
XI-3
6. Amount of Cash disbursements set forth in the budget for such week and
such heading (including 15% cushion permitted according to subsection 7.6A
(Item C.6*1.15): $_____________
D. MINIMUM CUMULATIVE CONSOLIDATED EBITDA (for the one month period ended ________, 200_):
1. Consolidated Net Income: $_____________
2. Consolidated Interest Expense: $_____________
3. Provisions for taxes based on income: $_____________
4. Total depreciation expense: $_____________
5. Total amortization expense: $_____________
6. Other non-cash items reducing Consolidated Net Income: $_____________
7. Other non-cash items increasing Consolidated Net Income: $_____________
8. Consolidated EBITDA (Item D.1+Item D.2+Item D.3+Item D.4+Item D.5+Item
D.6-Item D.7): $_____________
9. Minimum required under subsection 7.6B: $_____________
F. FUNDAMENTAL CHANGES
1. Aggregate fair market value of assets sold in any one or more
Asset Sales after Closing Date in one or more transactions
permitted under subsection 7.7(iv): $_____________
2. Maximum permitted under subsection 7.7(iv):(1) $ 5,000,000
G. CONSOLIDATED CAPITAL EXPENDITURES
1. Consolidated Capital Expenditures for month ended ______, 200__: $_____________
2. Maximum permitted under subsection 7.8 for month ended ______, 200_: $_____________
- ------------------------
(1) Maximum permitted without prior written consent of Requisite Lenders.
XI-4
EXHIBIT A
Exhibit A to Compliance Certificate
Set forth below are all exceptions to paragraph (3) above listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which Borrowers have taken, are taking, or propose to
take with respect to each such condition or event:
________________________________________________________________________________
________________________________________________________________________________
_________________ .
XI-5
EXHIBIT IX
FOLEY & LARDNER LLP
ATTORNEYS AT LAW
150 WEST JEFFERSON, SUITE 1000
DETROIT, MI 48226-4443
313.963.6200 TEL
313.963.9308 FAX
October 22, 2004 www.foley.com
CLIENT/MATTER NUMBER
083476-0157
Deutsche Bank Trust Company Americas, as
Collateral Agent and Co-Agent
60 Wall Street
New York, New York 10005
The Bank of Nova Scotia, as Administrative
Agent
One Liberty Plaza
New York, New York 10006
Each of the Lenders from time to time party to
the Credit Agreement referenced below
Re: Debtor in Possession Credit Agreement
of
Intermet Corporation and certain of its Subsidiaries
Ladies and Gentlemen:
We have acted as special counsel for Intermet Corporation, a Georgia
corporation (the "Company"), Northern Castings Corporation and Intermet
International, Inc., each Georgia corporations (collectively with the Company,
the "Georgia Loan Parties"); Intermet Holding Company, Tool Products, Inc.,
Sudbury, Inc., Wagner Castings Company, Wagner Havana, Inc., Diversified
Diemakers, Inc. and Intermet U.S. Holding, Inc., each Delaware corporations
(collectively, the "Delaware Corporate Loan Parties"); Ironton Iron Inc., an
Ohio corporation (the "Ohio Loan Party"); SUDM, Inc. and Cast-Matic Corporation,
each Michigan corporations (the "Michigan Loan Parties"); Intermet Illinois,
Inc. and Ganton Technologies Inc., each Illinois corporations (the "Illinois
Loan Parties"); Lynchburg Foundry Company, a Virginia corporation (the "Virginia
Loan Party"); Alexander City Casting Company, an Alabama corporation (the
"Alabama Loan Party"); and Columbus Foundry, L.P., a Delaware limited
partnership ("Columbus Foundry" and collectively, with the Georgia Loan Parties,
the Ohio Loan Party, the Michigan Loan Parties, the Illinois Loan Parties, the
Virginia Loan Party, the Alabama Loan Party, and the Delaware Corporate Loan
Parties, sometimes referred to herein as the "Loan Parties") in connection with
that certain Debtor-In-Possession Credit Agreement (the "Credit Agreement")
dated as of even date herewith, among the Loan Parties, the lenders party
thereto (the "Lenders"), Deutsche Bank Trust Company Americas, as Collateral
Agent and Co-Agent, and The Bank of Nova Scotia, as Administrative Agent. Each
initially capitalized term used, but not otherwise defined, in this letter shall
have the meaning ascribed to such term in the Credit Agreement. We are
delivering this letter at the request of the Loan Parties pursuant to Section
4.1(M) of the Credit Agreement.
BRUSSELS LOS ANGELES ORLANDO SAN FRANCISCO TOKYO
CHICAGO MADISON SACRAMENTO SILICON VALLEY WASHINGTON, D.C.
DETROIT MILWAUKEE SAN DIEGO TALLAHASSEE WEST PALM BEACH
JACKSONVILLE NEW YORK SAN DIEGO/DEL MAR TAMPA
[FOLEY LOGO]
Deutsche Bank Trust Company Americas, as Collateral Agent
and Co-Agent, The Bank of Nova Scotia, as Administrative Agent, and each
of the Lenders from time to time party to the Credit
Agreement referred to herein
October 22, 2004
Page 2
We have reviewed execution copies of the Credit Agreement, the Security
Agreement, the Form of Revolving Note attached to the Credit Agreement as
Exhibit VI to be delivered by the Loan Parties to each Lender (together with the
Credit Agreement and the Security Agreement, the "Credit Documents"), the
separate UCC-1 Financing Statements attached as EXHIBIT A attached hereto, which
name each of the Loan Parties, respectively, as debtor and the Collateral Agent
as secured party (the "Financing Statements"), the Interim Borrowing Order (as
defined herein), and the docket sheet of the Bankruptcy Court in the Chapter 11
Cases, as of October 21, 2004 (the "Docket").
We have also reviewed (a) the Articles of Incorporation, the
Certificate of Incorporation or the Certificate of Limited Partnership, as
applicable, of each of the Loan Parties (collectively, the "Charters"), (b) the
Bylaws, Code of Regulations or Partnership Agreement, as applicable, of each of
the Loan Parties (collectively, the "Bylaws"), (c) resolutions adopted by the
Boards of Directors or Partners, as applicable, of each of the Loan Parties and
(d) such other agreements, instruments and documents of the Loan Parties as we
deem appropriate under the circumstances. As to certain questions of fact
material to our opinions, we have relied upon the representations of the Loan
Parties made in the Credit Documents and upon certificates of the Loan Parties
or their respective officers or of public officials, but have conducted no
further investigation. In that regard, with your permission and except with
respect to the Docket, we have not conducted any judicial docket or court record
searches.
In rendering this opinion, we have assumed that:
i. The copies of all Credit Documents submitted to us
are accurate and complete, and all documents
submitted to us as originals or duplicate originals
are authentic and all documents submitted to us as
copies, whether certified or not, conform to
authentic original documents.
ii. All representations and warranties of each of the
Loan Parties in the Credit Documents and all other
certificates, statements, representations, documents,
records and papers, with respect to factual matters,
are accurate, true and correct.
iii. The Credit Documents constitute the legal, valid and
binding obligations of all parties other than the
Loan Parties and are enforceable against such parties
in accordance with their terms.
iv. Each Credit Document has been executed and delivered
in the respective form submitted to us as the
execution form thereof.
v. Value has been or will be given to the Loan Parties
pursuant to the Credit Documents.
[FOLEY LOGO]
Deutsche Bank Trust Company Americas, as Collateral Agent
and Co-Agent, The Bank of Nova Scotia, as Administrative Agent, and each
of the Lenders from time to time party to the Credit
Agreement referred to herein
October 22, 2004
Page 3
vi. The Loan Parties have rights in the Collateral (as
defined in the Security Agreement) or the power to
transfer rights in the Collateral to a secured party.
vii. The signatures of persons signing all documents in
connection with which the following opinions are
rendered are genuine, and all natural persons who are
signatories to the Credit Documents were or will be
legally competent at the time of execution.
viii. The Financing Statements contain the correct name of
Deutsche Bank Trust Company Americas, as Collateral
Agent for the Lenders, and an address for Deutsche
Bank Trust Company Americas from which information
concerning the security interest may be obtained.
ix. The Loan Parties have received adequate consideration
with respect to the execution and delivery of the
Credit Documents.
x. There have been no changes since the respective dates
of the government certificates examined by us in
connection with our opinions set forth in paragraph 1
below that would make untrue or qualify any statement
contained therein.
Based upon the foregoing, but subject to the assumptions,
qualifications and limitations set forth herein, we are of the opinion that:
1. Assuming the Loan Parties were organized under the laws of the
State of Michigan, each of the Loan Parties, except Columbus Foundry, is a
corporation validly existing and has the requisite corporate power to own its
properties and to conduct its business as we understand such business to be
conducted. Assuming it were organized under the laws of the State of Michigan,
Columbus Foundry is a partnership validly existing and has the requisite
partnership power to own its properties and to conduct its business as we
understand such business to be conducted. Based solely on certificates of good
standing issued by the relevant jurisdiction of incorporation or organization,
as applicable, each of the Loan Parties is in good standing under the laws of
the state of its incorporation or organization.
2. Assuming the Loan Parties were organized under the laws of the
State of Michigan, each of the Loan Parties has all requisite corporate or
partnership, as applicable, power and authority to execute and deliver the
Credit Documents to which it is a party, and to perform its obligations under
the Credit Documents to which it is a party. Assuming the Loan Parties were
organized under the laws of the State of Michigan, each of the Credit Documents
has been duly authorized, executed and delivered by each of the Loan Parties.
[FOLEY LOGO]
Deutsche Bank Trust Company Americas, as Collateral Agent
and Co-Agent, The Bank of Nova Scotia, as Administrative Agent, and each
of the Lenders from time to time party to the Credit
Agreement referred to herein
October 22, 2004
Page 4
3. Assuming the Loan Parties were organized under the laws of the
State of Michigan, the Credit Documents are the legal and binding obligations of
each of the Loan Parties that is a party thereto, enforceable in accordance with
their respective terms.
4. The execution, delivery and performance by each of the Loan
Parties of the Credit Documents to which it is a party do not conflict with (i)
its Charter or its Bylaws, (ii) any existing federal or New York law or (iii)
any provision of any applicable order, writ, injunction or decree of any court
or government instrumentality binding on the Loan Parties and known to us.
5. No authorization, consent, approval, license or exemption of
or filing or registration with any existing court or governmental authority,
except for those that have been obtained or made on or prior to the date of the
Credit Documents that remain in full force and effect on such date, is or will
be necessary for the valid execution, delivery and performance by any of the
Loan Parties of, or the enforceability of, the Credit Documents.
6. None of the Loan Parties is an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "subsidiary company" or a
"holding company" or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
7. The making of the loans under the Credit Agreement, and the
application of proceeds thereof as provided in the Credit Agreement, do not
violate regulation U or X of the Board of Governors of the Federal Reserve
System.
8. Under the Uniform Commercial Code (the "UCC") in effect in the
State of New York (the "New York UCC"), the provisions of the Security Agreement
are effective to create a valid and enforceable security interest in each Loan
Party's rights in the Collateral to the extent the New York UCC governs a
security interest in such Collateral in favor of the Collateral Agent, for the
ratable benefit of the Lenders.
9. To the extent the UCC in effect in each of the States and
Commonwealth on Schedule 1 is applicable and with respect to each Loan Party
organized under the laws of such State or Commonwealth, upon the filing of the
Financing Statements in the appropriate office of the relevant State or
Commonwealth identified on Schedule 1 attached hereto, the Collateral Agent will
have a valid and perfected security interest in the items and types of
Collateral (other than Fixtures) as to which security interests may be perfected
by filing financing statements under the UCC in effect in such State or
Commonwealth.
10. The Interim Order Pursuant to Bankruptcy Code Sections 105,
361, 363, 364, 503 and 507: (A) Authorizing Debtors-in-Possession to (i) Obtain
Senior and Junior Secured Post-Petition Financing and (ii) Utilize Cash
Collateral, (B) Granting Superpriority Claims to Post-Petition Lenders, (C)
Granting Adequate Protection to Pre-Petition Lenders and (D) Scheduling a Final
[FOLEY LOGO]
Deutsche Bank Trust Company Americas, as Collateral Agent
and Co-Agent, The Bank of Nova Scotia, as Administrative Agent, and each
of the Lenders from time to time party to the Credit
Agreement referred to herein
October 22, 2004
Page 5
Hearing (the "Interim Borrowing Order") was approved by the U.S. Bankruptcy
Court for the Eastern District of Michigan (the "Bankruptcy Court") on October
19, 2004. Based solely on our review of the Docket, no order amending, staying,
vacating or rescinding the Interim Borrowing Order has been entered by the
Bankruptcy Court.
The opinions expressed above are subject to the following
qualifications and limitations:
A. The enforceability of the rights and remedies under each of
the Credit Documents is subject to the effect of any applicable bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting
creditors' rights generally, and to the discretionary nature of specific
performance, injunctive relief and other equitable remedies, including the
appointment of a receiver.
B. No opinion is expressed as to the effect, if any, of the
provision of Sections 548 or 549 of the U.S. Bankruptcy Code, the New York
Uniform Fraudulent Conveyance Act or any other Federal or State laws pertaining
to fraudulent conveyances or transfers or dividends or distributions by
corporations or other entities, upon the validity, binding character and
enforceability of any of the Credit Documents.
C. Enforceability of the Credit Documents is subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law), including, without limitation, requirements
of reasonableness and good faith in the exercise of rights and remedies under
any of the Credit Documents.
D. We express no opinion with respect to any provision subject to
the Credit Documents respecting severability; "self-help"; summary remedies
without notice or opportunity for hearing or correction; penalties, late payment
charges or increased interest rates upon delinquency, if in the nature of a
penalty or forfeiture; attorneys' fees, to the extent inconsistent with public
policy or applicable law; indemnity, to the extent contrary to public policy or
providing for indemnity of a party against its own wrongful or negligent acts;
cumulation, election or non-exclusivity of remedies, or non-waiver of remedies
by a failure or delay of exercise; appointment of any attorney-in-fact with
irrevocable power to take action binding upon the principal; unreasonable
restraints on alienation of property; waiver, release or relinquishment of
statutory rights (including rights of redemption and the right to assert claims
and counterclaims), broadly or vaguely stated rights, unknown future rights,
defenses to, obligations, or rights otherwise granted by law (including
marshalling of assets), where contrary to public policy or otherwise prohibited,
limited or made unenforceable by law; and any provision exculpating any person
or entity from liability for such person's or entity's negligence or other
misconduct.
E. Certain other remedies, waivers and other provisions of the
Credit Documents may not be enforceable, but such unenforceability will not
render the Credit Documents invalid as a whole.
[FOLEY LOGO]
Deutsche Bank Trust Company Americas, as Collateral Agent
and Co-Agent, The Bank of Nova Scotia, as Administrative Agent, and each
of the Lenders from time to time party to the Credit
Agreement referred to herein
October 22, 2004
Page 6
F. We have not reviewed for purposes of our opinions, and nothing
herein shall be construed as an opinion by us as to compliance with, applicable
environmental or zoning laws, ordinances, rules or regulations, or federal,
state and local taxation (except as expressly set forth herein), securities or
"blue sky" rules and regulations, labor, ERISA and other employee benefit laws
or antitrust laws.
G. Enforceability of those provisions in the Credit Documents
relating to the payment of various charges and of various costs and expenses,
including attorneys' fees, incurred by the Collateral Agent, the Administrative
Agent or the Lenders in enforcing their remedies thereunder may be subject to
limitations imposed by law.
H. We have not examined and render no opinion on any document
incorporated by reference in the Credit Documents which itself is not a Credit
Document, and we have assumed that such documents so incorporated do not affect
the opinions hereby given.
I. You have not asked us to opine as to the enforceability of the
choice of law or choice of venue provisions contained in the Credit Documents,
and we express no opinion with respect to such matters.
J. Wherever we indicate that our opinion with respect to the
existence or absence of facts is "to our knowledge" or the like, our opinion is,
with your permission, based solely on certificates of the Loan Parties or
officers of the Loan Parties and the current conscious awareness of facts or
other information of the attorneys currently with our firm who have represented
the Loan Parties in connection with the Credit Documents.
K. We express no opinion with respect to consumer goods,
investment property in a consumer transaction, as-extracted collateral, timber
to be cut, commercial tort claims or goods represented by a certificate of
title.
L. In the case of proceeds, continuation of perfection of the
Collateral Agent's security interest therein is limited to the degree set forth
in Section 9-315 of the applicable UCC as in effect in the various States and
Commonwealth identified on Schedule 1 and, in each case, with respect only to
the Loan Party organized or incorporated under the laws of each such State or
Commonwealth.
M. We have made no examination of, and express no opinion as to,
title to the real property, fixtures, personal property or other Collateral
described in the Credit Documents or the existence of any liens, charges or
encumbrances thereon. Further, we express no opinion as to the relative priority
of the security interests created or evidenced by any of the Credit Documents,
or the effect of any security interest perfected prior to July 1, 2001.
N. The opinions rendered herein are limited to (i) the federal
law of the United States, (ii) the laws of the State of New York, (iii) with
respect to paragraphs 1 and 2, the laws of the State
[FOLEY LOGO]
Deutsche Bank Trust Company Americas, as Collateral Agent
and Co-Agent, The Bank of Nova Scotia, as Administrative Agent, and each
of the Lenders from time to time party to the Credit
Agreement referred to herein
October 22, 2004
Page 7
of Michigan and (iii) with respect to paragraph 9, the UCC in effect in the
States of Georgia, Delaware, Alabama, Illinois, Michigan and Ohio and the
Commonwealth of Virginia and, in each case, with respect only to the Loan Party
organized or incorporated under the laws of each such State or Commonwealth. We
shall have no continuing obligations to inform you of changes in law or fact
subsequent to the date hereof or of facts of which we become aware after the
date hereof.
O. Our security interest opinion in paragraph 9 is limited to
Article 9 of the UCC of the State or Commonwealth in which the applicable Loan
Party is organized or incorporated, and therefore that opinion paragraph does
not address (i) laws of jurisdictions other than those States and Commonwealth,
and of those States and Commonwealth except for Article 9, of the applicable
UCC, (ii) Collateral of a type not subject to Article 9 of the applicable UCC,
or (iii) under Sections 9-301 through 9-307 of the applicable UCC, what law
governs perfection, the effect of perfection or non-perfection, or priority of
the security interests granted in the collateral covered by this letter.
P. With respect to our opinions that are limited to the UCC in
effect in the States of Georgia, Delaware, Alabama and Ohio and the Commonwealth
of Virginia, we have relied solely on our review, as of October 21, 2004, of
certain provisions of Article 9 of applicable enactments of the UCC found in the
following sources: the Delaware UCC found on the official website for the State
of Delaware (www.delcode.state.de.us), the Official Code of Georgia Annotated as
found on LexisNexis (www.lexis.com), Michie's Alabama Code as found on
LexisNexis (www.lexis.com), Page's Ohio Revised Code Annotated as found on
LexisNexis (www.lexis.com) and the Code of Virginia as found on LexisNexis
(www.lexis.com), copies of which are attached hereto as EXHIBIT B, without any
investigation of the legal decisions or statutory provisions in effect in such
States or Commonwealth that may affect the filing of financing statements or
perfection of security interests in that jurisdiction.
These opinions are intended for use by the Administrative Agent and
Collateral Agent and the Lenders in connection with the Credit Documents and do
not extend to any other purpose and may not be relied upon by any other person
(other than successors and assigns of the Lenders and the Administrative Agent
and Collateral Agent and persons who purchase or acquire participations in the
Secured Obligations) and no portion hereof may be quoted or in any other way
published or communicated without the express written consent of the
undersigned; provided, however, that this opinion may be disclosed (a) in
connection with the enforcement of the Credit Documents, (b) in response to a
subpoena or other legal process, (c) as otherwise required by applicable law or
regulations or (d) in connection with the sale or transfer of any of the Secured
Obligations or participations therein.
This opinion is limited to the matters set forth herein; no opinion may
be inferred or implied beyond the matters expressly stated herein, and the
opinion expressed herein must be read in conjunction with the assumptions,
limitations, exceptions and qualifications set forth in this letter.
Very truly yours,
EXHIBIT X
[FORM OF SECURITY AGREEMENT]
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "AGREEMENT") is dated as of
October [__], 2004 and entered into by and among INTERMET CORPORATION, a Georgia
corporation ("COMPANY"), each of THE OTHER BORROWERS LISTED ON THE SIGNATURE
PAGES HEREOF, each of THE SUBSIDIARY GUARANTORS LISTED ON THE SIGNATURE PAGES
HEREOF and each ADDITIONAL SUBSIDIARY GUARANTOR AND BORROWER that may become a
party hereto after the date hereof in accordance with Section 22 hereof (each an
"ADDITIONAL GRANTOR" and collectively "ADDITIONAL GRANTORS"; Borrowers and
Subsidiary Guarantors, including any Additional Grantors, are sometimes
collectively referred to herein as "GRANTORS" and individually as a "GRANTOR"),
and DEUTSCHE BANK TRUST COMPANY AMERICAS, in its capacity as collateral agent
for and representative of Lenders from time to time party to the Credit
Agreement (in such capacity, "SECURED PARTY"). Terms defined in the Credit
Agreement and not otherwise defined herein are being used herein as therein
defined.
RECITALS
WHEREAS, on September 29, 2004, each Borrower filed a
voluntary petition for relief under the Bankruptcy Code with the United States
Bankruptcy Court for the Eastern District of Michigan (the "BANKRUPTCY COURT"),
and each Borrower continues to operate its businesses and manage its properties
as a debtor-in-possession pursuant to Sections 1107 and 1108 of the Bankruptcy
Code;
WHEREAS, Secured Party, as Collateral Agent and Co-Agent, The
Bank of Nova Scotia ("SCOTIA CAPITAL"), as Administrative Agent, and Lenders are
entering into that certain Debtor-in-Possession Credit Agreement dated as of
even date herewith with Borrowers (said Debtor-in-Possession Credit Agreement,
as it may hereafter be amended, restated, supplemented or otherwise modified
from time to time, being the "CREDIT AGREEMENT"), pursuant to which, inter alia,
Lenders have agreed to provide, subject to the terms and conditions contained in
the Credit Agreement, a debtor-in-possession revolving credit facility for the
Borrowers to fund working capital and general corporate purposes and to make
certain other payments during the Chapter 11 Cases;
WHEREAS, Subsidiary Guarantors have entered into that certain
Subsidiary Guaranty dated as of even date herewith (said Subsidiary Guaranty, as
it may hereafter be amended, restated, supplemented or otherwise modified from
time to time, being the "SUBSIDIARY GUARANTY") in favor of Secured Party for the
benefit of Lenders, pursuant to which each Subsidiary Guarantor has guarantied
the prompt payment and performance when due of all obligations of Borrowers
under the Credit Agreement;
WHEREAS, it is a condition precedent to the initial extensions
of credit by Lenders under the Credit Agreement that Grantors listed on the
signature pages hereof shall have granted the security interests and undertaken
the obligations contemplated by this Agreement;
NOW, THEREFORE, in consideration of the premises and in order
to induce Lenders to enter into the Credit Agreement and make loans and other
extensions of credit thereunder from time to time and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, each Grantor hereby agrees with Secured Party as follows:
SECTION 1. GRANT OF SECURITY.
In addition to, and not in lieu of, any security interests for
the benefit of Lenders effected pursuant to the Interim Borrowing Order or the
Final Borrowing Order, as applicable, each Grantor hereby assigns to Secured
Party, and hereby grants to Secured Party a security interest in, all of such
Grantor's right, title and interest in and to all assets (including all real,
personal and mixed property) of each of the Grantors (or, in the case of
Borrowers, all assets of the estates of each of such Grantors), including,
without limitation, the following, in each case whether now or hereafter
existing, whether tangible or intangible, or in which such Grantor now has or
hereafter acquires an interest and wherever the same may be located and whether
or not subject to the Uniform Commercial Code as it exists on the date of this
Agreement, or as it may hereafter be amended in the State of New York (the
"UCC"), including all Assigned Agreements and the following (the "COLLATERAL"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Money and all Deposit Accounts, together with all
amounts on deposit from time to time in such Deposit Accounts;
(d) all Documents;
(e) all General Intangibles, including all intellectual
property, Payment Intangibles and Software;
(f) all Goods, including Inventory, Equipment and Fixtures;
(g) all Instruments;
(h) all Investment Property;
(i) all Letter of Credit Rights and other Supporting
Obligations;
(j) all Records;
(k) all Commercial Tort Claims, including those set forth on
Schedule 1 annexed hereto; and
(l) all Proceeds and Accessions with respect to any of the
foregoing Collateral.
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Each category of Collateral set forth above shall have the
meaning set forth in the UCC (to the extent such term is defined in the UCC), it
being the intention of Grantors that the description of the Collateral set forth
above be construed to include the broadest possible range of assets.
Notwithstanding anything herein to the contrary, in no event
shall the Collateral include, and no Grantor shall be deemed to have granted a
security interest in (i) any of such Grantor's rights or interests in or under
any license, contract, permit, Instrument, Security or franchise to which such
Grantor is a party or any of its rights or interests thereunder, to the extent,
but only to the extent, that such a grant would, under the terms of such
license, contract, permit, Instrument, Security or franchise, result in a breach
of the terms of, or constitute a default under, such license, contract, permit,
Instrument, Security or franchise (other than to the extent that any such term
would be rendered ineffective pursuant to the UCC or any other applicable law
(including the Bankruptcy Code) or principles of equity); provided, that
immediately upon the ineffectiveness, lapse or termination of any such
provision, the Collateral shall include, and such Grantor shall be deemed to
have granted a security interest in, all such rights and interests as if such
provision had never been in effect.
In the event that any asset of a Grantor is excluded from the
Collateral by virtue of the foregoing paragraph, such Grantor agrees to use all
reasonable efforts to obtain all requisite consents to enable such Grantor to
provide a security interest in such asset pursuant hereto as promptly as
practicable.
Notwithstanding the foregoing, the Collateral (I) shall
include Equity Interests issued by a Foreign Subsidiary only to the extent that
creation of a security interest by a Grantor in such Equity Interests could not
reasonably be expected to result in material adverse Tax consequences to
Company, it being acknowledged and agreed that the creation of a security
interest in Equity Interests comprising up to but not exceeding 65% of the
voting power of all classes of the Equity Interests of such Foreign Subsidiary
entitled to vote will not result in such adverse Tax consequences; provided,
that, to the extent a Grantor has previously pledged 65% of the Equity Interests
of such Foreign Subsidiary to The Bank of Nova Scotia, as Collateral Agent,
under that certain First Amended and Restated Borrower Pledge and Security
Agreement dated as of January 8, 2004 or that certain Subsidiary Pledge and
Security Agreement dated as of January 8, 2004 (together, the "Prepetition
Security Agreements"), the Collateral shall only include such Equity Interests
so pledged and (II) shall not include any rights, recoveries or proceeds related
to Chapter 5 of the Bankruptcy Code with the exception of Section 549 thereof.
SECTION 2. SECURITY FOR OBLIGATIONS.
This Agreement secures, and the Collateral is collateral
security for, the prompt payment or performance in full when due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including without limitation the payment of amounts that would become
due but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code), of all Secured Obligations of each Grantor. "SECURED
OBLIGATIONS" means:
3
(i) with respect to Borrowers, all obligations and
liabilities of every nature of Borrowers now or hereafter existing
under or arising out of or in connection with the Credit Agreement and
the other Loan Documents; and
(ii) with respect to each Subsidiary Guarantor, and each
Additional Grantor all obligations and liabilities of every nature of
such Subsidiary Guarantors now or hereafter existing under or arising
out of or in connection with the Subsidiary Guaranty;
in each case together with all extensions or renewals thereof,
whether for principal, interest (including without limitation interest that, but
for the filing of a petition in bankruptcy with respect to such Subsidiary
Guarantor, would accrue on such obligations, whether or not a claim is allowed
against such Subsidiary Guarantor for such interest in the related bankruptcy
proceeding), reimbursement of amounts drawn under Revolving Letters of Credit,
fees, expenses, indemnities or otherwise, whether voluntary or involuntary,
direct or indirect, absolute or contingent, liquidated or unliquidated, whether
or not jointly owed with others, and whether or not from time to time decreased
or extinguished and later increased, created or incurred, and all or any portion
of such obligations or liabilities that are paid, to the extent all or any part
of such payment is avoided or recovered directly or indirectly from Secured
Party or any Lender as a preference, fraudulent transfer or otherwise, and all
obligations of every nature of Grantors now or hereafter existing under this
Agreement. Nothing in this Agreement is intended to be nor shall it be construed
to be a provision of collateral security for any obligation of the Grantors that
arose prior to the date of the Interim Borrowing Order.
SECTION 3. GRANTORS REMAIN LIABLE.
Anything contained herein to the contrary notwithstanding, (a)
each Grantor shall remain liable under any contracts, licenses and agreements
included in the Collateral, to the extent set forth therein, to perform all of
its duties and obligations thereunder to the same extent as if this Agreement
had not been executed, (b) the exercise by Secured Party of any of its rights
hereunder shall not release any Grantor from any of its duties or obligations
under the contracts, licenses and agreements included in the Collateral, and (c)
Secured Party shall not have any obligation or liability under any contracts,
licenses, and agreements included in the Collateral by reason of this Agreement,
nor shall Secured Party be obligated to perform any of the obligations or duties
of any Grantor thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
Each Grantor represents and warrants as follows:
(a) OWNERSHIP OF COLLATERAL. Except as expressly
permitted by the Credit Agreement, such Grantor owns the Collateral free and
clear of any Lien and no effective financing statement or other instrument
similar in effect covering all or any part of the Collateral is on file in any
filing or recording office, including any IP Filing Office.
(b) PERFECTION. The security interests in the Collateral
granted to Secured Party for the ratable benefit of Lenders hereunder constitute
valid security interests in the Collateral, securing the payment of the Secured
Obligations. If the Grantor is a Subsidiary
4
Guarantor, upon (i) the filing of UCC financing statements naming each Grantor
as "debtor", naming Secured Party as "secured party" and describing the
Collateral in the filing offices with respect to such Grantor set forth on
Schedule 2 annexed hereto, (ii) in the case of the Securities Collateral
consisting of certificated Securities or evidenced by Instruments, in addition
to filing of such UCC financing statements, delivery of the certificates
representing such certificated Securities and delivery of such Instruments to
Secured Party (and in the case of Securities Collateral issued by a foreign
issuer, any actions required under foreign law to perfect a security interest in
such Securities Collateral), in each case duly endorsed or accompanied by duly
executed instruments of assignment or transfer in blank, (iii) in the case of
the Intellectual Property Collateral, in addition to the filing of such UCC
financing statements, the recordation of a Grant with the applicable IP Filing
Office, (iv) in the case of Equipment that is covered by a certificate of title,
the filing with the registrar of motor vehicles or other appropriate authority
in the applicable jurisdiction of an application requesting the notation of the
security interest created hereunder on such certificate of title, and (v) in the
case of any Deposit Account and any Investment Property constituting a Security
Entitlement, Securities Account, Commodity Contract or Commodity Account, the
execution and delivery to Secured Party of an agreement providing for control by
Secured Party thereof, the security interests in the Collateral granted to
Secured Party for the ratable benefit of Lenders will constitute perfected
security interests therein (except to the extent that recordation of the Lien is
required under the laws of any foreign country or any subdivisions thereof with
respect to the Copyrights, Trademarks and Patents) prior to all other Liens, and
all filings and other actions necessary or desirable to perfect and protect such
security interests have been, or promptly after the Closing Date will be, duly
made or taken. If Grantor is a Borrower, upon entry of the Interim Borrowing
Order or Final Borrowing Order, the security interests in the Collateral granted
to Secured Party for the benefit of Lenders hereunder will constitute security
interests therein prior to all other Liens other than Liens permitted under the
Credit Agreement to the extent such Liens are permitted to be senior in priority
to the Liens in favor of the Lenders.
(c) OFFICE LOCATIONS; TYPE AND JURISDICTION OF
ORGANIZATION; LOCATIONS OF EQUIPMENT AND INVENTORY. Such Grantor's name as it
appears in official filings in the jurisdiction of its organization, type of
organization (i.e. corporation, limited partnership, etc.), jurisdiction of
organization, principal place of business, chief executive office, office where
such Grantor keeps its Records regarding the Accounts, Intellectual Property and
originals of Chattel Paper, and organization number provided by the applicable
Government Authority of the jurisdiction of organization are set forth on
Schedule 3 annexed hereto. All of the Equipment and Inventory is located at the
places set forth on Schedule 4 annexed hereto, except for Inventory which, in
the ordinary course of business, is in transit either (i) from a supplier to a
Grantor, (ii) between the locations set forth on Schedule 4 annexed hereto, or
(iii) to customers of a Grantor.
(d) NAMES. No Grantor (or predecessor by merger or
otherwise of such Grantor) has, within the six month period preceding the date
hereof, or, in the case of an Additional Grantor, the date of the applicable
Counterpart, had a different name from the name of such Grantor listed on the
signature pages hereof, except the names set forth on Schedule 5 annexed hereto.
5
(e) DELIVERY OF CERTAIN COLLATERAL. All certificates or
Instruments (excluding checks) evidencing, comprising or representing the
Collateral have been or, when required pursuant to this Agreement, will have
been delivered to Secured Party duly endorsed or accompanied by duly executed
instruments of transfer or assignment in blank.
(f) SECURITIES COLLATERAL. All of the Pledged Subsidiary
Equity set forth on Schedule 6 annexed hereto has been duly authorized and
validly issued and is fully paid and non-assessable; all of the Pledged
Subsidiary Debt set forth on Schedule 7 annexed hereto has been duly authorized,
authenticated or issued, and delivered and is the legally valid and binding
obligation of the issuers thereof and is not in default; there are no
outstanding warrants, options or other rights to purchase, or other agreements
outstanding with respect to, or property that is now or hereafter convertible
into, or that requires the issuance or sale of, any Pledged Subsidiary Equity;
Schedule 6 annexed hereto sets forth all of the Equity Interests and the Pledged
Equity owned by each Grantor, and the percentage ownership in each issuer
thereof; and Schedule 7 annexed hereto sets forth all of the Pledged Debt owned
by such Grantor.
(g) INTELLECTUAL PROPERTY COLLATERAL. A true and complete
list of all Trademark Registrations and applications for any Trademark owned,
held (whether pursuant to a license or otherwise) or used by such Grantor, in
whole or in part, is set forth on Schedule 8 annexed hereto; a true and complete
list of all Patents owned, held (whether pursuant to a license or otherwise) or
used by such Grantor, in whole or in part, is set forth on Schedule 9 annexed
hereto; a true and complete list of all Copyright Registrations and applications
for Copyright Registrations held (whether pursuant to a license or otherwise) by
such Grantor, in whole or in part, is set forth on Schedule 10 annexed hereto;
and after reasonable inquiry, such Grantor is not aware of any pending or
threatened claim by any third party that any of the Intellectual Property
Collateral owned, held or used by such Grantor is invalid or unenforceable.
(h) DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS, COMMODITY
ACCOUNTS. Schedule 11 annexed hereto lists all Deposit Accounts, Securities
Accounts and Commodity Accounts owned by each Grantor, and indicates the
institution or intermediary at which the account is held and the account number.
(i) CHATTEL PAPER. Such Grantor has no interest in any
Chattel Paper, except as described in Schedule 12 annexed hereto.
(j) LETTER-OF-CREDIT RIGHTS. Such Grantor has no interest
in any Letter-of-Credit Rights, except as set forth on Schedule 13 annexed
hereto.
(k) DOCUMENTS. No negotiable Documents are outstanding
with respect to any of the Inventory, except as set forth on Schedule 14 annexed
hereto.
(l) ASSIGNED AGREEMENTS. Each Assigned Agreement is in
full force and effect and is enforceable against the parties thereto in
accordance with its terms.
(m) MOTOR VEHICLES. Such Grantor owns no motor vehicles,
except as set forth on Schedule 15 annexed hereto, which lists each motor
vehicle by model, model year, jurisdiction of registration and vehicle
identification number.
6
The representations and warranties as to the information set
forth in Schedules referred to herein are made as to each Grantor (other than
Additional Grantors) as of the date hereof and as to each Additional Grantor as
of the date of the applicable Counterpart, except that, in the case of a Pledge
Supplement, IP Supplement or notice delivered pursuant to Sections 5(b)-(c)
hereof, such representations and warranties are made as of the date of such
supplement or notice.
SECTION 5. FURTHER ASSURANCES.
(a) GENERALLY. Each Grantor agrees that from time to
time, at the expense of Grantors, such Grantor will promptly execute and deliver
all further instruments and documents, and take all further action, that may be
necessary or desirable, or that Secured Party may request, in order to perfect
and protect any security interest granted or purported to be granted hereby or
to enable Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of the
foregoing, each Grantor will: (i) notify Secured Party in writing of receipt by
such Grantor of any interest in Chattel Paper and at the request of Secured
Party, mark conspicuously each item of Chattel Paper and each of its records
pertaining to the Collateral, with a legend, in form and substance satisfactory
to Secured Party, indicating that such Collateral is subject to the security
interest granted hereby, (ii) deliver to Secured Party all promissory notes and
other Instruments and, at the request of Secured Party, all original
counterparts of Chattel Paper, duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
Secured Party, (iii) (A) execute (if necessary) and file such financing or
continuation statements, or amendments thereto, (B) execute and deliver, and
cause to be executed and delivered, agreements establishing that Secured Party
has control over electronic Chattel Paper and Letter-of-Credit Rights of such
Grantor, (C) deliver such documents, instruments, notices, records and consents,
in each case, as may be necessary or desirable and as Secured Party may request,
in order to perfect and preserve the security interests granted or purported to
be granted hereby, (iv) furnish to Secured Party from time to time statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Secured Party may reasonably
request, all in reasonable detail, (v) promptly after the acquisition by such
Grantor of any item of Equipment that is covered by a certificate of title under
a statute of any jurisdiction under the law of which indication of a security
interest on such certificate is required as a condition of perfection thereof
execute and file with the registrar of motor vehicles or other appropriate
authority in such jurisdiction an application or other document requesting the
notation or other indication of the security interest created hereunder on such
certificate of title, (vi) within 30 days after the end of each calendar
quarter, deliver to Secured Party copies of all such applications or other
documents filed during such calendar quarter and copies of all such certificates
of title issued during such calendar quarter indicating the security interest
created hereunder in the items of Equipment covered thereby, (vii) at any
reasonable time, upon reasonable notice and during normal business hours,
provided the same shall not materially interfere with the operations of the
relevant guarantor, exhibit the Collateral to and allow inspection of the
Collateral by Secured Party, or persons designated by Secured Party, (viii) at
Secured Party's request, appear in and defend any action or proceeding that may
affect such Grantor's title to or Secured Party's security interest in all or
any part of the Collateral, and (ix) use commercially reasonable efforts to
obtain any necessary consents of third parties to the creation and perfection of
a security interest in favor of
7
Secured Party with respect to any Collateral. Each Grantor hereby authorizes
Secured Party to file one or more financing or continuation statements, and
amendments thereto, relative to all or any part of the Collateral (including any
financing statement indicating that it covers "all assets" or "all personal
property" of such Grantor) without the signature of any Grantor.
(b) SECURITIES COLLATERAL. Without limiting the
generality of the foregoing Section 5(a), each Grantor agrees that (i) all
certificates or Instruments representing or evidencing the Securities Collateral
shall be delivered to and held by or on behalf of Secured Party pursuant hereto
and shall be in suitable form for transfer by delivery or, as applicable, shall
be accompanied by such Grantor's endorsement, where necessary, or duly executed
instruments of transfer or assignments in blank, all in form and substance
satisfactory to Secured Party and (ii) it will, upon obtaining any additional
Equity Interests or Indebtedness, promptly (and in any event within five
Business Days) deliver to Secured Party a Pledge Supplement, duly executed by
such Grantor, in respect of such additional Pledged Equity or Pledged Debt;
provided, that the failure of any Grantor to execute a Pledge Supplement with
respect to any additional Pledged Equity or Pledged Debt shall not impair the
security interest of Secured Party therein or otherwise adversely affect the
rights and remedies of Secured Party hereunder with respect thereto. Upon each
such acquisition, the representations and warranties contained in Section 4(f)
hereof shall be deemed to have been made by such Grantor as to such Pledged
Equity or Pledged Debt, whether or not such Pledge Supplement is delivered.
(c) INTELLECTUAL PROPERTY COLLATERAL. At least quarterly,
within 15 days after the end of each calendar quarter, each Grantor shall
promptly notify Secured Party of any rights to Intellectual Property Collateral
acquired by such Grantor after the date hereof. Promptly after the filing of an
application for any Trademark Registration, Patent or Copyright Registration,
each Grantor shall execute and deliver to Secured Party an IP Supplement, and
submit a Grant for recordation with respect thereto in the applicable IP Filing
Office; provided, the failure of any Grantor to execute an IP Supplement or
submit a Grant for recordation with respect to any additional Intellectual
Property Collateral shall not impair the security interest of Secured Party
therein or otherwise adversely affect the rights and remedies of Secured Party
hereunder with respect thereto. Upon delivery to Secured Party of an IP
Supplement, Schedules 8, 9 and 10 annexed hereto and Schedule A to each Grant,
as applicable, shall be deemed modified to include reference to any right, title
or interest in any existing Intellectual Property Collateral or any Intellectual
Property Collateral set forth on Schedule A to such IP Supplement. Upon each
such acquisition, the representations and warranties contained in Section 4 (g)
hereof shall be deemed to have been made by such Grantor as to such Intellectual
Property Collateral, whether or not such IP Supplement is delivered.
(d) COMMERCIAL TORT CLAIMS. Grantors have no Commercial
Tort Claims as of the date hereof, except as set forth on Schedule 1 annexed
hereto. In the event that a Grantor shall at any time after the date hereof have
any Commercial Tort Claims, such Grantor shall promptly notify Secured Party
thereof in writing, which notice shall (i) set forth in reasonable detail the
basis for and nature of such Commercial Tort Claim and (ii) constitute an
amendment to this Agreement by which such Commercial Tort Claim shall constitute
part of the Collateral.
SECTION 6. CERTAIN COVENANTS OF GRANTORS.
8
Each Grantor shall:
(a) not use or permit any Collateral to be used
unlawfully or in violation of any provision of this Agreement or any applicable
statute, regulation or ordinance or any policy of insurance covering the
Collateral;
(b) give Secured Party at least 30 days' notice of (i)
any change in such Grantor's name, identity or corporate structure, (ii) any
change in such Grantor's chief place of business, chief executive office or
residence or the office where such Grantor keeps its records regarding the
Accounts and all originals of all chattel paper that evidence Accounts or (iii)
any reincorporation, reorganization or other action that results in a change of
the jurisdiction of organization of such Grantor;
(d) if Secured Party gives value to enable such Grantor
to acquire rights in or the use of any Collateral, use such value for such
purposes;
(e) except as expressly permitted by the Credit
Agreement, pay promptly when due all property and other taxes, assessments and
governmental charges or levies imposed upon, and all claims (including claims
for labor, services, materials and supplies) against, the Collateral; provided
that such Grantor shall in any event pay such taxes, assessments, charges,
levies or claims not later than five days prior to the date of any proposed sale
under any judgment, writ or warrant of attachment entered or filed against such
Grantor or any of the Collateral as a result of the failure to make such
payment;
(e) keep correct and accurate Records of Collateral at
the locations described in Schedule 3 annexed hereto; and
(f) permit representatives of Secured Party upon
reasonable notice and during normal business hours to inspect and make abstracts
from such Records, and each Grantor agrees to render to Secured Party, at
Grantor's cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto; and
(g) after the date hereof, give Secured Party prompt
notice with sufficient regularity of any claim or cause of action of any Grantor
arising in tort and not otherwise identified on Schedule 1 hereto.
SECTION 7. SPECIAL COVENANTS WITH RESPECT TO EQUIPMENT AND INVENTORY.
Each Grantor shall:
(a) if any Inventory is in possession or control of any
of such Grantor's agents or processors, if the aggregate book value of all such
Inventory in possession or control of any such agent or processor, exceeds
$[500,000], and in any event upon the occurrence of an Event of Default,
instruct such agent or processor to hold all such Inventory for the account of
Secured Party and subject to the instructions of Secured Party;
9
(b) if any Inventory is located on premises leased by
such Grantor, deliver to Secured Party a fully executed Collateral Access
Agreement;
(c) promptly upon the issuance and delivery to such
Grantor of any Negotiable Document of Title, deliver such document to Secured
Party;
(d) promptly furnish to Secured Party a statement
respecting any material loss or damage to any of the Equipment owned by such
Grantor;
(e) keep correct and accurate records of Inventory owned
by such Grantor itemizing and describing the kind, type and quantity of such
Inventor, such Grantor's cost therefore and (where applicable) the current list
prices for such Inventory; and
(f) each Grantor shall, at its own expense, maintain
insurance with respect to the Equipment and Inventory in accordance with the
terms of the Credit Agreement.
SECTION 8. SPECIAL COVENANTS WITH RESPECT TO ACCOUNTS.
(a) Each Grantor shall, for not less than one year from
the date on which each Account of such Grantor arose, maintain (i) complete
Records of such Account, including records of all payments received, credits
granted and merchandise returned, and (ii) all documentation relating thereto.
(b) Except as otherwise provided in this subsection (b),
each Grantor shall continue to collect, at its own expense, all amounts due or
to become due to such Grantor under the Accounts. In connection with such
collections, each Grantor may take (and, upon the occurrence and during the
continuance of an Event of Default at Secured Party's direction, shall take)
such action as such Grantor or Secured Party may deem necessary or advisable to
enforce collection of amounts due or to become due under the Accounts; provided,
however, that Secured Party shall have the right at any time, upon the
occurrence and during the continuation of an Event of Default and upon written
notice to such Grantor of its intention to do so, to (i) notify the account
debtors or obligors under any Accounts of the assignment of such Accounts to
Secured Party and to direct such account debtors or obligors to make payment of
all amounts due or to become due to such Grantor thereunder directly to Secured
Party, (ii) notify each Person maintaining a lockbox or similar arrangement to
which account debtors or obligors under any Accounts have been directed to make
payment to remit all amounts representing collections on checks and other
payment items from time to time sent to or deposited in such lockbox or other
arrangement directly to Secured Party, (iii) enforce collection of any such
Accounts at the expense of Grantors, and (iv) adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as such
Grantor might have done. After receipt by such Grantor of the notice from
Secured Party referred to in the proviso to the preceding sentence, (I) all
amounts and proceeds (including checks and other Instruments) received by such
Grantor in respect of the Accounts shall be received in trust for the benefit of
Secured Party hereunder, shall be segregated from other funds of such Grantor
and shall be forthwith paid over or delivered to Secured Party in the same form
as so received (with any necessary endorsement) to be held as cash Collateral
and applied as provided by Section 18 hereof, and (II) such Grantor shall not,
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without the written consent of Secured Party, adjust, settle or compromise the
amount or payment of any Account, or release wholly or partly any account debtor
or obligor thereof, or allow any credit or discount thereon.
SECTION 9. SPECIAL COVENANTS WITH RESPECT TO THE SECURITIES COLLATERAL.
(a) FORM OF SECURITIES COLLATERAL. Secured Party shall
have the right at any time to exchange certificates or instruments representing
or evidencing Securities Collateral in its possession or control for
certificates or instruments of smaller or larger denominations. If any
Securities Collateral is not a security pursuant to Section 8-103 of the UCC, no
Grantor shall take any action that, under such Section, converts such Securities
Collateral into a security without causing the issuer thereof to issue to it
certificates or instruments evidencing such Securities Collateral, which it
shall promptly deliver to Secured Party as provided in this Section 9(a).
(b) COVENANTS. Each Grantor shall (i) not, except as
expressly permitted by the Credit Agreement, permit any issuer of Pledged
Subsidiary Equity to merge or consolidate unless all the outstanding Equity
Interests of the surviving or resulting Person are, upon such merger or
consolidation, pledged and become Collateral hereunder and no cash, securities
or other property is distributed in respect of the outstanding Equity Interests
of any other constituent corporation; provided, if the surviving or resulting
Person upon any such merger or consolidation involving an issuer of Pledged
Subsidiary Equity is a Foreign Subsidiary, then such Grantor shall only be
required to pledge outstanding capital stock of such surviving or resulting
Person possessing up to but not exceeding 65% of the voting power of all classes
of capital stock of such issuer entitled to vote; (ii) cause each issuer of
Pledged Subsidiary Equity not to issue Equity Interests in addition to or in
substitution for the Pledged Subsidiary Equity issued by such issuer, except to
such Grantor; (iii) immediately upon its acquisition (directly or indirectly) of
any Equity Interests, including additional Equity Interests in each issuer of
Pledged Equity, comply with Section 5(b); (iv) immediately upon issuance of any
and all Instruments or other evidences of additional Indebtedness from time to
time owed to such Grantor by any obligor on the Pledged Debt, comply with
Section 5; (v) promptly deliver to Secured Party all written notices received by
it with respect to the Securities Collateral; (vi) at its expense (A) perform
and comply in all material respects with all terms and provisions of any
agreement related to the Securities Collateral required to be performed or
complied with by it, (B) maintain all such agreements in full force and effect
and (C) enforce all such agreements in accordance with their terms; and (vii),
at the request of Secured Party, promptly execute and deliver to Secured Party
an agreement providing for control by Secured Party of all Securities
Entitlements, Securities Accounts, Commodity Contracts and Commodity Accounts of
such Grantor.
(c) VOTING AND DISTRIBUTIONS. So long as no Event of
Default shall have occurred and be continuing, (i) each Grantor shall be
entitled to exercise any and all voting and other consensual rights pertaining
to the Securities Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement or the Credit Agreement and (ii)
each Grantor shall be entitled to receive and retain any and all dividends,
other distributions, principal and interest paid in respect of the Securities
Collateral to the extent permitted under the Credit Agreement; provided, any and
all (A) dividends, distributions and interest paid or payable other
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than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Securities Collateral, (B) dividends and other distributions paid or payable in
cash in respect of any Securities Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus, and (C) cash paid, payable or otherwise
distributed in respect of principal or in redemption of or in exchange for any
Securities Collateral shall be, and shall forthwith be delivered to Secured
Party to hold as, Collateral and shall, if received by such Grantor, be received
for the benefit of Secured Party, be segregated from the other property or funds
of such Grantor and be forthwith delivered to Secured Party as Collateral in the
same form as so received (with all necessary endorsements).
Upon the occurrence and during the continuation of an Event of
Default, (x) all rights of such Grantor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise pursuant
hereto shall cease, and all such rights shall thereupon become vested in Secured
Party who shall thereupon have the sole right to exercise such voting and other
consensual rights; (y) except as otherwise specified in the Credit Agreement,
all rights of such Grantor to receive the dividends, other distributions,
principal and interest payments which it would otherwise be authorized to
receive and retain pursuant hereto shall cease, and all such rights shall
thereupon become vested in Secured Party who shall thereupon have the sole right
to receive and hold as Collateral such dividends, other distributions, principal
and interest payments; and (z) all dividends, principal, interest payments and
other distributions which are received by such Grantor contrary to the
provisions of clause (ii) of the immediately preceding paragraph or clause (y)
above shall be received in trust for the benefit of Secured Party, shall be
segregated from other funds of such Grantor and shall forthwith be paid over to
Secured Party as Collateral in the same form as so received (with any necessary
endorsements).
In order to permit Secured Party to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant hereto and
to receive all dividends and other distributions which it may be entitled to
receive hereunder, (I) each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to Secured Party all such proxies, dividend
payment orders and other instruments as Secured Party may from time to time
request, and (II) without limiting the effect of clause (I) above, each Grantor
hereby grants to Secured Party an irrevocable proxy to vote the Pledged Equity
and to exercise all other rights, powers, privileges and remedies to which a
holder of the Pledged Equity would be entitled (including giving or withholding
written consents of shareholders or other holders of Equity Interests, calling
special meetings of shareholders or other holders of Equity Interests and voting
at such meetings), which proxy shall be effective, automatically and without the
necessity of any action (including any transfer of any Pledged Equity on the
record books of the issuer thereof) by any other Person (including the issuer of
the Pledged Equity or any officer or agent thereof), upon the occurrence of an
Event of Default and which proxy shall only terminate upon the payment in full
in cash of all of the Secured Obligations and the termination of all Revolving
Commitments of the Lenders under the Credit Agreement and the satisfactory cash
collateralization (as determined by Secured Party) of all Revolving Letters of
Credit and other letters of credit issued or maintained in connection therewith.
SECTION 10. SPECIAL COVENANTS WITH RESPECT TO THE INTELLECTUAL PROPERTY
COLLATERAL.
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(a) Each Grantor shall:
(i) use reasonable efforts so as not to permit
the inclusion in any contract to which it hereafter becomes a party of
any provision that could or might in any way impair or prevent the
creation of a security interest in, or the assignment of, such
Grantor's rights and interests in any property included within the
definitions of any Intellectual Property Collateral acquired under such
contracts;
(ii) take any and all reasonable steps to protect
the secrecy of all trade secrets relating to the products and services
sold or delivered under or in connection with the Intellectual Property
Collateral, including, without limitation, where appropriate entering
into confidentiality agreements with employees and labeling and
restricting access to secret information and documents;
(iii) use proper statutory notice in connection
with its use of any of the Intellectual Property Collateral and
products and services covered by the Intellectual Property Collateral;
and
(iv) use a commercially appropriate standard of
quality (which may be consistent with such Grantor's past practices) in
the manufacture, sale and delivery of products and services sold or
delivered under or in connection with the Trademarks.
(b) Except as otherwise provided in this Section 10, each
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to such Grantor in respect of the Intellectual Property Collateral or
any portion thereof. In connection with such collections, each Grantor may take
(and, after the occurrence and during the continuation of any Event of Default
at Secured Party's reasonable direction, shall take) such action as such Grantor
or Secured Party may deem reasonably necessary or advisable to enforce
collection of such amounts; provided, Secured Party shall have the right at any
time, upon the occurrence and during the continuation of an Event of Default, to
notify the obligors with respect to any such amounts of the existence of the
security interest created hereby and to direct such obligors to make payment of
all such amounts directly to Secured Party, and, upon such notification and at
the expense of such Grantor, to enforce collection of any such amounts and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as such Grantor might have done. Upon the occurrence and
during the continuation of any Event of Default, (i) all amounts and proceeds
(including checks and other Instruments) received by each Grantor in respect of
amounts due to such Grantor in respect of the Intellectual Property Collateral
or any portion thereof shall be received in trust for the benefit of Secured
Party hereunder, shall be segregated from other funds of such Grantor and shall
be forthwith paid over or delivered to Secured Party in the same form as so
received (with any necessary endorsement) to be held as cash Collateral and
applied as provided by Section 18 hereof and (ii) such Grantor shall not adjust,
settle or compromise the amount or payment of any such amount or release wholly
or partly any obligor with respect thereto or allow any credit or discount
thereon.
(c) Each Grantor shall have the duty diligently, through
counsel reasonably acceptable to Secured Party, to prosecute, file and/or make,
unless and until such Grantor, in its
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commercially reasonable judgment, decides otherwise, (i) any application for
registration relating to any of the Intellectual Property Collateral owned, held
or used by such Grantor and set forth on Schedules 8, 9 or 10 annexed hereto, as
applicable, that is pending as of the date of this Agreement, (ii) any Copyright
Registration on any existing or future unregistered but copyrightable works
(except for works of nominal commercial value or with respect to which such
Grantor has determined in the exercise of its commercially reasonable judgment
that it shall not seek registration), (iii) any application on any future
patentable but unpatented innovation or invention comprising Intellectual
Property Collateral, and (iv) any Trademark opposition and cancellation
proceedings, renew Trademark Registrations and Copyright Registrations and do
any and all acts which are necessary or desirable to preserve and maintain all
rights in all Intellectual Property Collateral. Any expenses incurred in
connection therewith shall be borne solely by Grantors. Subject to the
foregoing, each Grantor shall give Secured Party prior written notice of any
abandonment of any Intellectual Property Collateral.
(d) Except as provided herein, each Grantor shall have
the right to commence and prosecute in its own name, as real party in interest,
for its own benefit and at its own expense, such suits, proceedings or other
actions for infringement, unfair competition, dilution, misappropriation or
other damage, or reexamination or reissue proceedings as are necessary to
protect the Intellectual Property Collateral. Each Grantor shall promptly,
following its becoming aware thereof, notify Secured Party of the institution
of, or of any adverse determination in, any proceeding (whether in an IP Filing
Office or any federal, state, local or foreign court) or regarding such
Grantor's ownership, right to use, or interest in any Intellectual Property
Collateral. Each Grantor shall provide to Secured Party any information with
respect thereto requested by Secured Party.
(e) In addition to, and not by way of limitation of, the
granting of a security interest in the Collateral pursuant hereto, each Grantor,
effective upon the occurrence and during the continuation of an Event of
Default, hereby assigns, transfers and conveys to Secured Party the nonexclusive
right and license to use all Trademarks, tradenames, Copyrights, Patents or
technical processes (including, without limitation, the Intellectual Property
Collateral) owned or used by such Grantor that relate to the Collateral and any
other collateral granted by such Grantor as security for the Secured
Obligations, together with any goodwill associated therewith, all to the extent
necessary to enable Secured Party to realize on the Collateral in accordance
with this Agreement and to enable any transferee or assignee of the Collateral
to enjoy the benefits of the Collateral. This right shall inure to the benefit
of all successors, assigns and transferees of Secured Party and its successors,
assigns and transferees, whether by voluntary conveyance, operation of law,
assignment, transfer, foreclosure, deed in lieu of foreclosure or otherwise.
Such right and license shall be granted free of charge, without requirement that
any monetary payment whatsoever be made to such Grantor.
SECTION 11. SPECIAL PROVISIONS WITH RESPECT TO THE ASSIGNED AGREEMENTS.
(a) Each Grantor shall at its expense:
(i) if consistent with sound business practices,
perform and observe all terms and provisions of the Assigned
Agreements to be performed or observed by it, maintain the
Assigned Agreements in full force and effect, enforce the
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Assigned Agreements in accordance with such Grantor's
customary business practice, and
(ii) after the occurrence and continuation of an
Event of Default and upon the request of Secured Party,
furnish to Secured Party, promptly upon receipt thereof,
copies of all notices, requests and other documents received
by such Grantor under or pursuant to the Assigned Agreements,
and from time to time (A) furnish to Secured Party such
information and reports regarding the Assigned Agreements as
Secured Party may reasonably request and (B) upon request of
Secured Party make to the parties to such Assigned Agreements
such demands and requests for information and reports or for
action as such Grantor is entitled to make under the Assigned
Agreements.
(b) Upon the occurrence and during the continuance of an
Event of Default, no Grantor shall, without prior Bankruptcy Court approval:
(i) cancel or terminate any of the Assigned
Agreements or consent to or accept any cancellation or
termination thereof;
(ii) amend or otherwise modify the Assigned
Agreements or give any consent, waiver or approval thereunder;
(iii) waive any default under or breach of the
Assigned Agreements;
(iv) consent to or permit or accept any
prepayment of amounts to become due under or in connection
with the Assigned Agreements, except as expressly provided
therein; or
(v) take any other action in connection with the
Assigned Agreements that could reasonably be expected to
materially impair the value of the interest or rights of such
Grantor thereunder or that could reasonably be expected to
materially impair the interest or rights of Secured Party.
SECTION 12. SPECIAL PROVISIONS WITH RESPECT TO THE COLLATERAL ACCOUNTS.
Secured Party is hereby authorized to establish and maintain
at its offices restricted deposit accounts and restricted securities accounts
which shall be in the names of Grantors and under the sole dominion and control
of Secured Party (the "COLLATERAL ACCOUNTS"). Each Grantor agrees that from time
to time, at the expense of Grantors, such Grantor will promptly execute and
deliver account control agreements in form and substance satisfactory to Secured
Party and take all further action that may be necessary or desirable, or that
Secured Party may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby in such accounts or
to enable Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any such accounts.
SECTION 13. SECURED PARTY APPOINTED ATTORNEY-IN-FACT.
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Each Grantor hereby irrevocably appoints Secured Party as such
Grantor's attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor, Secured Party or otherwise, from time
to time in Secured Party's discretion to take any action and to execute any
instrument that Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:
(a) upon the occurrence and during the continuance of an
Event of Default, to obtain and adjust insurance required to be maintained by
such Grantor or paid to Secured Party pursuant to the Credit Agreement;
(b) upon the occurrence and during the continuance of an
Event of Default, to ask for, demand, collect, sue for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(c) upon the occurrence and during the continuance of an
Event of Default, to receive, endorse and collect any drafts or other
Instruments, Documents, Chattel Paper and other documents in connection with
clauses (a) and (b) above;
(d) upon the occurrence and during the continuance of an
Event of Default, to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce or protect the
rights of Secured Party with respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Secured Party in its
sole discretion, any such payments made by Secured Party to become obligations
of such Grantor to Secured Party, due and payable immediately without demand;
(f) upon the occurrence and during the continuance of an
Event of Default, to sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with Accounts and other
documents relating to the Collateral; and
(g) upon the occurrence and during the continuance of an
Event of Default, generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though Secured Party were the absolute owner thereof for all purposes, and to
do, at Secured Party's option and Grantors' expense, at any time or from time to
time, all acts and things that Secured Party deems necessary to protect,
preserve or realize upon the Collateral and Secured Party's security interest
therein in order to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.
SECTION 14. SECURED PARTY MAY PERFORM.
If any Grantor fails to perform any agreement
contained herein, Secured Party may itself perform, or cause performance of (but
shall not be obligated to perform or cause the performance of), such agreement,
and the expenses of Secured Party incurred in connection therewith shall be
payable by Grantors under Section 19(b) hereof.
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SECTION 15. STANDARD OF CARE.
The powers conferred on Secured Party hereunder are
solely to protect its interest in the Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the exercise of reasonable care
in the custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Secured Party shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Secured Party accords its own
property.
SECTION 16. REMEDIES.
(a) GENERALLY. If any Event of Default (as defined in the
Credit Agreement) shall have occurred and be continuing, Secured Party may
exercise in respect of the Collateral, in addition to all other rights and
remedies provided for herein or otherwise available to it, all the rights and
remedies of a secured party on default under the UCC (whether or not the UCC
applies to the affected Collateral), and also may (i) require each Grantor to,
and each Grantor hereby agrees that it will at its expense and upon request of
Secured Party forthwith, assemble all or part of the Collateral as directed by
Secured Party and make it available to Secured Party at a place to be designated
by Secured Party that is reasonably convenient to both parties, (ii) enter onto
the property where any Collateral is located and take possession thereof with or
without judicial process, (iii) prior to the disposition of the Collateral,
store, process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Secured Party deems
appropriate, (iv) take possession of any Grantor's premises or place custodians
in exclusive control thereof, remain on such premises and use the same and any
of such Grantor's equipment for the purpose of completing any work in process,
taking any actions described in the preceding clause (iii) and collecting any
Secured Obligation, (v) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of Secured Party's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as Secured Party may deem commercially reasonable, (vi) exercise
dominion and control over and refuse to permit further withdrawals from any
Deposit Account maintained with Secured Party or any Lender and provide
instructions directing the disposition of funds in Deposit Accounts not
maintained with Secured Party or any Lender and (vii) provide entitlement orders
with respect to Security Entitlements and other Investment Property constituting
a part of the Collateral and, without notice to any Grantor, transfer to or
register in the name of Secured Party or any of its nominees any or all of the
Securities Collateral or exercise any and all voting rights in connection
therewith pursuant to Section 9 hereof or otherwise. Secured Party or any Lender
(subject to the terms of the Credit Agreement) may be the purchaser of any or
all of the Collateral at any such sale and Secured Party, as agent for and
representative of Lenders (but not any Lender in its individual capacity unless
Requisite Lenders shall otherwise agree in writing), shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by Secured Party at such sale. Each purchaser
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at any such sale shall hold the property sold absolutely free from any claim or
right on the part of any Grantor, and each Grantor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Each Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten days' notice to
such Grantor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification. Secured
Party shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. Secured Party may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned. Each Grantor hereby waives any claims against Secured Party
arising by reason of the fact that the price at which any Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale, even if Secured Party accepts the first offer
received and does not offer such Collateral to more than one offeree. If the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay all the Secured Obligations, Grantors shall be jointly and severally liable
for the deficiency and the fees of any attorneys employed by Secured Party to
collect such deficiency. Each Grantor further agrees that a breach of any of the
covenants contained in this Section will cause irreparable injury to Secured
Party, that Secured Party has no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section shall be specifically enforceable against such Grantor, and each Grantor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no default has
occurred giving rise to the Secured Obligations becoming due and payable prior
to their stated maturities.
(b) Securities Collateral.
(i) Each Grantor recognizes that, by reason of
certain prohibitions contained in the Securities Act and
applicable state securities laws, Secured Party may be
compelled, with respect to any sale of all or any part of the
Securities Collateral conducted without prior registration or
qualification of such Securities Collateral under the
Securities Act and/or such state securities laws, to limit
purchasers to those who will agree, among other things, to
acquire the Securities Collateral for their own account, for
investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges that any such private sales
may be at prices and on terms less favorable than those
obtainable through a public sale without such restrictions
(including a public offering made pursuant to a registration
statement under the Securities Act) and, notwithstanding such
circumstances, each Grantor agrees that any such private sale
shall be deemed to have been made in a commercially reasonable
manner and that Secured Party shall have no obligation to
engage in public sales and no obligation to delay the sale of
any Securities Collateral for the period of time necessary to
permit the issuer thereof to register it for a form of public
sale requiring registration under the Securities Act or under
applicable state securities laws, even if such issuer would,
or should, agree to so register it. If Secured Party
determines to exercise its right to sell any or all of the
Securities Collateral, upon written request, each Grantor
shall and shall cause each issuer of any Securities Collateral
to be sold
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hereunder from time to time to furnish to Secured Party all
such information as Secured Party may request in order to
determine the number of shares and other instruments included
in the Securities Collateral which may be sold by Secured
Party in exempt transactions under the Securities Act and the
rules and regulations of the Securities and Exchange
Commission thereunder, as the same are from time to time in
effect.
(ii) If Secured Party shall determine to exercise
its right to sell all or any of the Securities Collateral
pursuant to this Section, each Grantor agrees that, upon
request of Secured Party (which request may be made by Secured
Party in its sole discretion), such Grantor will, at its own
expense (A) execute and deliver, and cause each issuer of the
Securities Collateral contemplated to be sold and the
directors and officers thereof to execute and deliver, all
such instruments and documents, and do or cause to be done all
such other acts and things, as may be necessary or, in the
opinion of Secured Party, advisable to register such
Securities Collateral under the provisions of the Securities
Act and to cause the registration statement relating thereto
to become effective and to remain effective for such period as
prospectuses are required by law to be furnished, and to make
all amendments and supplements thereto and to the related
prospectus which, in the opinion of Secured Party, are
necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission
applicable thereto; (B) use its best efforts to qualify the
Securities Collateral under all applicable state securities or
"Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Securities Collateral, as
requested by Secured Party; (C) cause each such issuer to make
available to its security holders, as soon as practicable, an
earnings statement which will satisfy the provisions of
Section 11(a) of the Securities Act; (D) do or cause to be
done all such other acts and things as may be necessary to
make such sale of the Securities Collateral or any part
thereof valid and binding and in compliance with applicable
law; and (E) bear all costs and expenses, including reasonable
attorneys' fees, of carrying out its obligations under this
Section.
(iii) Without limiting the generality of
subsections 10.2 and 10.3 of the Credit Agreement, in the
event of any public sale described herein, each Grantor agrees
to indemnify and hold harmless Secured Party, and each Lender
and each of their respective directors, officers, employees
and agents from and against any loss, fee, cost, expense,
damage, liability or claim, joint or several, to which any
such Persons may become subject or for which any of them may
be liable, under the Securities Act or otherwise, insofar as
such losses, fees, costs, expenses, damages, liabilities or
claims (or any litigation commenced or threatened in respect
thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any
preliminary prospectus, registration statement, prospectus or
other such document published or filed in connection with such
public sale, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
will reimburse Secured Party and such other Persons
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for any legal or other expenses reasonably incurred by Secured
Party and such other Persons in connection with any
litigation, of any nature whatsoever, commenced or threatened
in respect thereof (including any and all fees, costs and
expenses whatsoever reasonably incurred by Secured Party and
such other Persons and counsel for Secured Party and such
other Persons in investigating, preparing for, defending
against or providing evidence, producing documents or taking
any other action in respect of, any such commenced or
threatened litigation or any claims asserted). This indemnity
shall be in addition to any liability which any Grantor may
otherwise have and shall extend upon the same terms and
conditions to each Person, if any, that controls Secured Party
or such Persons within the meaning of the Securities Act.
(c) COLLATERAL ACCOUNTS. If an Event of Default has occurred
and is continuing, Company shall, as and when required under the Credit
Agreement, pay to Secured Party all amounts provided for in Section 8 thereof
(including, without limitation, any amounts to be held in a collateral account
as cash collateral for undrawn Revolving Letters of Credit).
(d) REMEDIES WITH RESPECT TO BORROWERS. Furthermore, upon the
occurrence and during the continuance of any Event of Default, Secured Party may
revoke Borrowers' rights to use cash collateral in which Secured Party has an
interest; provided that, any other provision of this Agreement or any other Loan
Document to the contrary notwithstanding, with respect to the foregoing, Secured
Party shall give Credit Parties and counsel to any official committees in
respect of the Chapter 11 Cases and the office of the United States Trustee five
Business Days prior written notice (which notice shall be delivered by facsimile
or overnight courier) of the exercise of its rights and remedies with respect to
the Collateral and file a copy of such notice with the clerk of the Bankruptcy
Court. Neither Secured Party nor Lenders shall have any obligation of any kind
to make a motion or application to the Bankruptcy Court to exercise their rights
and remedies set forth or referred to in this Agreement or in the other Loan
Documents. The enumeration of the foregoing rights and remedies is not intended
to be exhaustive and the exercise of any right or remedy shall not preclude the
exercise of any other rights or remedies, all of which shall be cumulative and
not alternative. Borrowers waive (i) presentment, demand and protest and notice
of presentment, dishonor, notice of intent to accelerate, notice of
acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all commercial paper, accounts,
contract rights, documents, instruments, chattel paper and guaranties or other
property at any time held by Secured Party or Lenders on which Loan Parties may
in any way be liable and hereby ratify and confirm whatever Secured Party and
Lenders may lawfully do in this regard, (ii) subject to the notice provisions of
the preceding paragraph, all rights to notice and hearing prior to Secured
Party's taking possession or control of, or to Secured Party's or Lenders'
reply, attachment or levy upon, the Collateral, or any bond or security which
might be required by any court prior to allowing Secured Party or Lenders to
exercise any of their remedies, and (iii) the benefit of all valuation,
appraisal and exemption laws. Borrowers acknowledge they have been advised by
counsel of their choice with respect to the effect of the foregoing waivers and
this Agreement, the other Loan Documents and the transactions evidenced by this
Agreement and the other Loan Documents.
SECTION 17. ADDITIONAL REMEDIES FOR INTELLECTUAL PROPERTY COLLATERAL.
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(a) Anything contained herein to the contrary notwithstanding,
upon the occurrence and during the continuation of an Event of Default, (i)
Secured Party shall have the right (but not the obligation) to bring suit, in
the name of any Grantor, Secured Party or otherwise, to enforce any Intellectual
Property Collateral, in which event each Grantor shall, at the request of
Secured Party, do any and all lawful acts and execute any and all documents
required by Secured Party in aid of such enforcement and each Grantor shall
promptly, upon demand, reimburse and indemnify Secured Party as provided in
subsections 10.2 and 10.3 of the Credit Agreement and Section 19 hereof, as
applicable, in connection with the exercise of its rights under this Section,
and, to the extent that Secured Party shall elect not to bring suit to enforce
any Intellectual Property Collateral as provided in this Section, each Grantor
agrees to use all reasonable measures, whether by action, suit, proceeding or
otherwise, to prevent the infringement of any of the Intellectual Property
Collateral by others and for that purpose agrees to use its commercially
reasonable judgment in maintaining any action, suit or proceeding against any
Person so infringing reasonably necessary to prevent such infringement; (ii)
upon written demand from Secured Party, each Grantor shall execute and deliver
to Secured Party an assignment or assignments of the Intellectual Property
Collateral and such other documents as are necessary or appropriate to carry out
the intent and purposes of this Agreement; (iii) each Grantor agrees that such
an assignment and/or recording shall be applied to reduce the Secured
Obligations outstanding only to the extent that Secured Party (or any Lender)
receives cash proceeds in respect of the sale of, or other realization upon, the
Intellectual Property Collateral; and (iv) within five Business Days after
written notice from Secured Party, each Grantor shall make available to Secured
Party, to the extent within such Grantor's power and authority, such personnel
in such Grantor's employ on the date of such Event of Default as Secured Party
may reasonably designate, by name, title or job responsibility, to permit such
Grantor to continue, directly or indirectly, to produce, advertise and sell the
products and services sold or delivered by such Grantor under or in connection
with the Trademarks, Trademark Registrations and Trademark Rights, such persons
to be available to perform their prior functions on Secured Party's behalf and
to be compensated by Secured Party at such Grantor's expense on a per diem,
pro-rata basis consistent with the salary and benefit structure applicable to
each as of the date of such Event of Default.
(b) If (i) an Event of Default shall have occurred and, by
reason of cure, waiver, modification, amendment or otherwise, no longer be
continuing, (ii) no other Event of Default shall have occurred and be
continuing, (iii) an assignment to Secured Party of any rights, title and
interests in and to the Intellectual Property Collateral shall have been
previously made, and (iv) the Secured Obligations shall not have become
immediately due and payable, upon the written request of any Grantor, Secured
Party shall promptly execute and deliver to such Grantor such assignments as may
be necessary to reassign to such Grantor any such rights, title and interests as
may have been assigned to Secured Party as aforesaid, subject to any disposition
thereof that may have been made by Secured Party; provided, after giving effect
to such reassignment, Secured Party's security interest granted pursuant hereto,
as well as all other rights and remedies of Secured Party granted hereunder,
shall continue to be in full force and effect; and provided further, the rights,
title and interests so reassigned shall be free and clear of all Liens other
than Liens (if any) encumbering such rights, title and interest at the time of
their assignment to Secured Party and Liens permitted under subsection 7.2A of
the Credit Agreement.
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SECTION 18. APPLICATION OF PROCEEDS.
Except as expressly provided elsewhere in this Agreement, all
proceeds received by Secured Party in respect of any sale of, collection from,
or other realization upon all or any part of the Collateral shall be applied as
provided in subsections 2.4A and 2.4C of the Credit Agreement.
SECTION 19. INDEMNITY AND EXPENSES.
(a) Grantors jointly and severally agree to indemnify Secured
Party and each Lender from and against any and all claims, losses and
liabilities in any way relating to, growing out of or resulting from this
Agreement and the transactions contemplated hereby (including without limitation
enforcement of this Agreement), except to the extent such claims, losses or
liabilities result solely from Secured Party's or such Lender's gross negligence
or willful misconduct as finally determined by a court of competent
jurisdiction.
(b) Grantors jointly and severally agree to pay to Secured
Party upon demand the amount of any and all costs and expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, that
Secured Party may incur in connection with (i) the administration of this
Agreement, (ii) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral, (iii) the
exercise or enforcement of any of the rights of Secured Party hereunder, or (iv)
the failure by any Grantor to perform or observe any of the provisions hereof.
(c) The obligations of Grantors in this Section 19 shall (i)
survive the termination of this Agreement and the discharge of Grantors' other
obligations under this Agreement, the Credit Agreement and the other Loan
Documents, and (ii) as to any Grantor that is a party to a Subsidiary Guaranty,
be subject to the provisions of Section 1(b) thereof.
SECTION 20. CONTINUING SECURITY INTEREST; TRANSFER OF REVOLVING LOANS;
TERMINATION AND RELEASE.
(a) This Agreement shall create a continuing security interest
in the Collateral and shall (i) remain in full force and effect until the
payment in full in cash of the Secured Obligations, the cancellation or
termination of the Revolving Commitments and the cancellation or expiration of
all outstanding Revolving Letters of Credit, (ii) be binding upon Grantors and
their respective successors and assigns, and (iii) inure, together with the
rights and remedies of Secured Party hereunder, to the benefit of Secured Party
and its successors, transferees and assigns. Without limiting the generality of
the foregoing clause (iii), but subject to the provisions of subsection 10.1 of
the Credit Agreement, any Lender may assign or otherwise transfer any Revolving
Loans held by it to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to Lenders herein
or otherwise.
(b) Upon the payment in full in cash of all Secured
Obligations, the cancellation or termination of the Revolving Commitments and
the cancellation or expiration of all outstanding Revolving Letters of Credit,
the security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the applicable Grantors. Upon any such termination
22
Secured Party will, at Grantors' expense, execute and deliver to Grantors such
documents as Grantors shall reasonably request to evidence such termination. In
addition, upon the proposed sale, transfer or other disposition of any
Collateral by a Grantor in accordance with the Credit Agreement for which such
Grantor desires to obtain a security interest release from Secured Party, such
Grantor shall deliver an Officer's Certificate (x) stating that the Collateral
subject to such disposition is being sold, transferred or otherwise disposed of
in compliance with the terms of the Credit Agreement and (y) specifying the
Collateral being sold, transferred or otherwise disposed of in the proposed
transaction. Upon the receipt of such Officer's Certificate and so long as no
Event of Default has occurred and is continuing or would result from the
proposed disposition of the Collateral and so long as the Proceeds from such
disposition are applied in accordance with the Loan Documents, Secured Party
shall, at Grantor's expense, so long as Secured Party has no reason to believe
that the Officer's Certificate delivered by such Grantor with respect to such
sale is not true, correct and complete, execute and deliver such releases of its
security interest in such Collateral which is to be so sold, transferred or
disposed of, as may be reasonably requested by such Grantor.
SECTION 21. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders. Secured Party shall be obligated, and shall have the
right hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that Secured
Party shall exercise, or refrain from exercising, any remedies provided for in
Section 16 hereof in accordance with the instructions of Requisite Lenders.
(b) Secured Party hereunder shall at all times be the
same Person that is Collateral Agent under the Credit Agreement. Written notice
of resignation by Collateral Agent pursuant to subsection 9.6 of the Credit
Agreement shall also constitute notice of resignation as Secured Party under
this Agreement; and appointment of a successor Collateral Agent pursuant to
subsection 9.6 of the Credit Agreement shall also constitute appointment of a
successor Secured Party under this Agreement. Upon the acceptance of any
appointment as Collateral Agent under subsection 9.6 of the Credit Agreement by
a successor Collateral Agent, that successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Secured Party under this Agreement, and the retiring Secured
Party under this Agreement shall promptly (i) transfer to such successor Secured
Party all sums, securities and other items of Collateral held hereunder,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Secured Party
under this Agreement, and (ii) execute (if necessary) and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring Secured Party shall be discharged from its
duties and obligations under this Agreement. After any retiring Collateral
Agent's resignation hereunder as Secured Party, the provisions of this Agreement
shall inure to its benefit as to any actions taken or omitted to be taken by it
under this Agreement while it was Secured Party hereunder.
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SECTION 22. ADDITIONAL GRANTORS.
In accordance at all times with subsections 6.8A and 6.8D of
the Credit Agreement, any Subsidiary of Company which is not a party hereto may
become a party hereto as a Subsidiary Guarantor or as a Borrower, respectively,
by executing a Counterpart substantially in the form of Exhibit VI annexed
hereto, whereupon such Subsidiary shall become (i) in the case of a Subsidiary
which is not a party hereto and is the subject of subsection 6.8A of the Credit
Agreement, a Grantor with the obligations and liabilities of a Subsidiary
Guarantor hereunder, and (ii) in the case of a Subsidiary which becomes a
Borrower under the Credit Agreement pursuant to subsection 6.8D thereof or
otherwise, a Grantor with the obligations and liabilities of a Borrower
hereunder. Upon delivery of any such Counterpart to Secured Party, notice of
which is hereby waived by Grantors, each such Additional Grantor shall be a
Grantor and shall be as fully a party hereto as if such Additional Grantor were
an original signatory hereto. Each Grantor expressly agrees that its obligations
arising hereunder shall not be affected or diminished by the addition or release
of any other Grantor hereunder, nor by any election of Collateral Agent not to
cause any Subsidiary of Company to become an Additional Grantor hereunder. This
Agreement shall be fully effective as to any Grantor that is or becomes a party
hereto regardless of whether any other Person becomes or fails to become or
ceases to be a Grantor hereunder.
SECTION 23. AMENDMENTS; ETC.
No amendment, modification, termination or waiver of any
provision of this Agreement, and no consent to any departure by any Grantor
therefrom, shall in any event be effective unless the same shall be in writing
and signed by Secured Party and, in the case of any such amendment or
modification, by Grantors; provided that this Agreement may be modified by the
execution of a Counterpart by an Additional Grantor in accordance with Section
22 hereof and Grantors hereby waive any requirement of notice of or consent to
any such amendment. Any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given.
SECTION 24. NOTICES.
Any notice or other communication herein required or permitted
to be given shall be in writing and may be personally served or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile, or three Business Days after depositing it in the United States
mail with postage prepaid and properly addressed; provided that notices to
Secured Party shall not be effective until received. For the purposes hereof,
the address of each party hereto shall be as provided in subsection 10.8 of the
Credit Agreement or as set forth under such party's name on the signature pages
hereof or such other address as shall be designated by such party in a written
notice delivered to the other parties hereto. Electronic mail and Internet and
intranet websites may be used to distribute routine communications; provided,
however, that no signature
24
with respect to any notice, request, agreement, waiver, amendment or other
document or any notice that is intended to have binding effect may be sent by
electronic mail.
SECTION 25. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Secured Party in the
exercise of any power, right or privilege hereunder shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
SECTION 26. SEVERABILITY.
In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 27. HEADINGS.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 28. GOVERNING LAW; RULES OF CONSTRUCTION.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT
THE UCC PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise
defined herein or in the Credit Agreement, terms used in Articles 8 and 9 of the
NY UCC are used herein as therein defined. The rules of construction set forth
in subsection 1.3 of the Credit Agreement shall be applicable to this Agreement
mutatis mutandis. To the extent (if at all) any provision of this Agreement is
inconsistent and conflicts with any particular provision of the Credit Agreement
in any particular circumstance, the parties hereto agree that such provision of
the Credit Agreement shall prevail in such circumstance.
SECTION 29. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
25
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING
OUT OF OR RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, SHALL BE
BROUGHT IN THE BANKRUPTCY COURT; PROVIDED, THAT UPON DISMISSAL OF THE CHAPTER 11
CASES OR SHOULD THE BANKRUPTCY COURT DECLINE JURISDICTION OVER THIS AGREEMENT,
THE CREDIT AGREEMENT, CHAPTER 11 CASES OR THE TRANSACTIONS CONTEMPLATED THEREBY,
SUCH PROCEEDINGS MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND
DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO SUCH GRANTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SECTION 24; (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH GRANTOR IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT; (V) AGREES THAT, SUBJECT TO THE BANKRUPTCY COURT
SEEKING EXCLUSIVE JURISDICTION HEREUNDER, SECURED PARTY RETAINS THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST SUCH GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION; AND (VI) AGREES
THAT, SUBJECT TO THE BANKRUPTCY COURT SEEKING EXCLUSIVE JURISDICTION HEREUNDER,
THE PROVISIONS OF THIS SECTION 29 RELATING TO JURISDICTION AND VENUE SHALL BE
BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL
OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
SECTION 30. WAIVER OF JURY TRIAL.
GRANTORS AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including without limitation
contract claims, tort claims, breach of duty claims, and all other common law
and statutory claims. Each Grantor and Secured Party acknowledge that this
waiver is a material inducement for Grantors and Secured Party to enter into a
business relationship, that Grantors and Secured Party have already relied on
this waiver in entering into this Agreement and that each will continue to rely
on this waiver in their related future dealings. Each Grantor and Secured Party
further warrant and represent that each has reviewed this waiver with its legal
counsel, and that each knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL
WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 30 AND EXECUTED BY EACH OF
THE PARTIES
26
HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
SECTION 31. COUNTERPARTS.
This Agreement may be executed in one or more counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
SECTION 32. DEFINITIONS.
(a) Each capitalized term utilized in this Agreement that
is defined in this Agreement shall have the meaning ascribed to such term in
this Agreement. Except as otherwise provided in Section 1 hereof with respect to
the categories of Collateral listed in Section 1 hereof, each capitalized term
utilized in this Agreement that is not defined in this Agreement, but that is
defined in the Credit Agreement, shall have the meaning ascribed to such term in
the Credit Agreement. Each capitalized term utilized in this Agreement that is
not defined in the Credit Agreement or in this Agreement, but that is defined in
the UCC, including the categories of Collateral listed in Section 1 hereof,
shall have the meaning set forth in Articles 1, 8 or 9 of the UCC.
(b) In addition, the following terms used in this
Agreement shall have the following meanings:
"ADDITIONAL GRANTOR" means a Subsidiary of Company that becomes a party
hereto after the date hereof as an additional Grantor by executing a
Counterpart.
"ASSIGNED AGREEMENTS" means, with respect to any Grantor, the
agreements with any account debtor of such Grantor, including, without
limitation, (a) all purchase orders given by any customer to such Grantor, (b)
all rights of such Grantor to receive moneys due or to become due under or
pursuant to the Assigned Agreements, (c) all rights of such Grantor to receive
proceeds of any Supporting Obligations with respect to the Assigned Agreements,
(d) all claims of such Grantor for damages arising out of any breach of or
default under the Assigned Agreements, and (e) all rights of such Grantor to
terminate, amend, supplement, modify or exercise rights or options under the
Assigned Agreements, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder.
"BENEFICIARY" means Collateral Agent (including, without limitation,
each Supplemental Collateral Agent) and each Lender (including, without
limitation, each Issuing Lender).
"COLLATERAL" has the meaning set forth in Section 1 hereof.
"COLLATERAL ACCOUNTS" has the meaning set forth in Section 12 hereof.
27
"COPYRIGHT REGISTRATIONS" means all copyright registrations issued to
any Grantor and applications for copyright registration that have been or may
hereafter be issued or applied for thereon in the United States and any state
thereof and in foreign countries (including, without limitation, the
registrations set forth on Schedule 10 annexed hereto, as the same may be
amended pursuant hereto from time to time).
"COPYRIGHT RIGHTS" means all common law and other rights in and to the
Copyrights in the United States and any state thereof and in foreign countries
including all copyright licenses (but with respect to such copyright licenses,
only to the extent permitted by such licensing arrangements), the rights (but no
the obligation) to renew and extend Copyright Registrations and any such rights
and to register works protectable by copyright and the right (but not the
obligation) to sue in the name of any Grantor or in the name of Secured Party or
Lenders for past, present and future infringements of the Copyrights and any
such rights.
"COPYRIGHTS" means all items under copyright in various published and
unpublished works of authorship including, without limitation, computer
programs, computer data bases, other computer software layouts, trade dress,
drawings, designs, writings, and formulas (including, without limitation, the
works set forth on Schedule 10 annexed hereto, as the same may be amended
pursuant hereto from time to time).
"COUNTERPART" means a counterpart to this Agreement entered into by a
Subsidiary of Company pursuant to Section 22 hereof.
"CREDIT AGREEMENT" has the meaning set forth in the Preliminary
Statements of this Agreement.
"EQUITY INTERESTS" means all shares of stock, partnership interests,
interests in Joint Ventures, limited liability company interests and all other
Equity Interests in a Person, whether such stock or interests are classified as
Investment Property or General Intangibles under the UCC.
"EVENT OF DEFAULT" means any Event of Default as defined in the Credit
Agreement.
"GRANT" means a Grant of Trademark Security Interest, substantially in
the form of Exhibit I annexed hereto, a Grant of Patent Security Interest,
substantially in the form of Exhibit II annexed hereto, and a Grant of Copyright
Security Interest, substantially in the form of Exhibit III annexed hereto.
"INTELLECTUAL PROPERTY COLLATERAL" means, with respect to any Grantor
all right, title and interest (including rights acquired pursuant to a license
or otherwise but only to the extent permitted by agreements governing such
license or other use) in and to all
(a) Copyrights, Copyright Registrations and Copyright
Rights, including, without limitation, each of the Copyrights, rights, titles
and interests in and to the Copyrights, all derivative works and other works
protectable by copyright, which are presently, or in the future may be, owned,
created (as a work for hire for the benefit of such Grantor), authored (as a
work for hire for the benefit of such Grantor), or acquired by such Grantor, in
whole or in part, and all Copyright Rights with respect thereto and all
Copyright Registrations therefor, heretofore or
28
hereafter granted or applied for, and all renewals and extensions thereof,
throughout the world, including all proceeds thereof (such as, by way of example
and not by limitation, license royalties and proceeds of infringement suits),
the right (but not the obligation) to renew and extend such Copyright
Registrations and Copyright Rights and to register works protectable by
copyright and the right (but not the obligation) to sue in the name of such
Grantor or in the name of Secured Party or Lenders for past, present and future
infringements of the Copyrights and Copyright Rights;
(b) Patents;
(c) Trademarks, Trademark Registrations, the Trademark
Rights and goodwill of such Grantor's business symbolized by the Trademarks and
associated therewith; and
(d) all trade secrets, trade secret rights, know-how,
customer lists, processes of production, ideas, confidential business
information, techniques, processes, formulas, and all other proprietary
information.
"IP SUPPLEMENT" means an IP Supplement, substantially in the form of
Exhibit V annexed hereto.
"PATENT REGISTRATIONS" means all Patents that have been or may
hereafter be issued or applied for thereon in the United States and in foreign
countries, but in the case of such foreign countries only to the extent such
registration in such foreign country relates to a Patent that is not registered
in the United States (including, without limitation, the registrations and
applications set forth on Schedule 9 annexed hereto).
"PATENTS" means all patents and patent applications and rights and
interests in patents and patent applications under any domestic or foreign law
that are presently, or in the future may be, owned or held by such Grantor and
all patents and patent applications and rights, title and interests in patents
and patent applications under any domestic or foreign law that are presently, or
in the future may be, owned by such Grantor in whole or in part (including,
without limitation, the patents and patent applications set forth on Schedule 9
annexed hereto), all rights (but not obligations) corresponding thereto to sue
for past, present and future infringements and all re-issues, divisions,
continuations, renewals, extensions and continuations-in-part thereof.
"PLEDGED DEBT" means the Indebtedness from time to time owed to a
Grantor, including the Indebtedness set forth on Schedule 7 annexed hereto and
issued by the obligors named therein, the Instruments and certificates
evidencing such Indebtedness and all interest, cash or other property received,
receivable or otherwise distributed in respect of or exchanged therefor.
"PLEDGED EQUITY" means all Equity Interests now or hereafter owned by a
Grantor, including all securities convertible into, and rights, warrants,
options and other rights to purchase or otherwise acquire, any of the foregoing,
including those owned on the date hereof and set forth on Schedule 6 annexed
hereto, the certificates or other instruments representing any of the foregoing
and any interest of such Grantor in the entries on the books of any securities
intermediary pertaining thereto and all distributions, dividends and other
property received, receivable or otherwise distributed in respect of or
exchanged therefor, but excluding any Equity
29
Interests of Foreign Subsidiaries to the extent a security interest in such
Equity Interests would result in material adverse Tax consequences to Borrower
or any Subsidiary.
"PLEDGED SUBSIDIARY DEBT" means Pledged Debt owed to a Grantor by any
obligor that is, or becomes, a direct or indirect Subsidiary of such Grantor, of
which such Grantor is a direct or indirect Subsidiary or that controls, is
controlled by or under common control with such Grantor.
"PLEDGED SUBSIDIARY EQUITY" means Pledged Equity in a Person that is,
or becomes a direct Subsidiary of a Grantor.
"PLEDGE SUPPLEMENT" means a Pledge Supplement, in substantially the
form of Exhibit IV annexed hereto, in respect of the additional Pledged Equity
or Pledged Debt pledged pursuant to this Agreement.
"SECURED OBLIGATIONS" has the meaning set forth in Section 2 hereof.
"SECURITIES COLLATERAL" means, with respect to any Grantor, the Pledged
Equity, the Pledged Debt and any other Investment Property in which such Grantor
has an interest.
"TRADEMARKS" means all trademarks, service marks, designs, logos,
indicia, tradenames, trade dress, corporate names, company names, business
names, fictitious business names, trade styles and/or other source and/or
business identifiers and applications pertaining thereto, owned by such Grantor,
or hereafter adopted and used, in its business (including, without limitation,
the trademarks specifically set forth on Schedule 8 annexed hereto).
"TRADEMARK REGISTRATIONS" means all trademark registrations that have
been or may hereafter be issued or applied for thereon in the United States and
any state thereof and in foreign countries (including, without limitation, the
registrations and applications set forth on Schedule 8 annexed hereto).
"TRADEMARK RIGHTS" means all common law and other rights (but in no
event any of the obligations) in and to the Trademarks in the United States and
any state thereof and in foreign countries.
"UCC" means the Uniform Commercial Code, as it exists on the date of
this Agreement or as it may hereafter be amended, in the State of New York or
when the context applies, the Uniform Commercial Code as in effect from time to
time in any other applicable jurisdiction.
[Remainder of page intentionally left blank]
30
IN WITNESS WHEREOF, Grantors and Secured Party have caused
this Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BORROWERS:
INTERMET CORPORATION
By:_______________________________
Name:___________________________
Title:__________________________
[NAMES OF OTHER BORROWERS]
By:_______________________________
Name:___________________________
Title:__________________________
SUBSIDIARY GUARANTORS:
[NAMES OF SUBSIDIARY GUARANTORS]
By:_______________________________
Name:___________________________
Title:__________________________
Notice Address: __________________
__________________
__________________
Security Agreement S-1
DEUTSCHE BANK TRUST COMPANY
AMERICAS,
as Secured Party
By:_______________________________
Name:___________________________
Title:__________________________
Security Agreement S-2
SCHEDULE A
TO
SECURITY AGREEMENT
Name Notice Address for each Grantor
Schedule A-1 Security Agreement
SCHEDULE B
TO
SECURITY AGREEMENT
Inactive Domestic Subsidiary Existing Encumbrance
Schedule A-2 Security Agreement
SCHEDULE 1
TO
SECURITY AGREEMENT
Commercial Tort Claims
Schedule 1-1 Security Agreement
SCHEDULE 2
TO
SECURITY AGREEMENT
Filing Offices
Grantor Filing Offices
Schedule 2-1 Security Agreement
SCHEDULE 3
TO
SECURITY AGREEMENT
Office Locations, Type and Jurisdiction of Organization
NAME OF TYPE OF OFFICE JURISDICTION OF ORGANIZATION
GRANTOR ORGANIZATION LOCATIONS(1) ORGANIZATION NUMBER
- ------- ------------ ----------- --------------- ------------
- ---------------------
(1) List principal place of business, chief executive office and office where
records regarding Accounts, Intellectual Property and Chattel Paper are kept.
Schedule 3-1 Security Agreement
SCHEDULE 4
TO
SECURITY AGREEMENT
Locations of Equipment and Inventory
NAME OF GRANTOR LOCATIONS OF EQUIPMENT AND INVENTORY
Schedule 4-1 Security Agreement
SCHEDULE 5
TO
SECURITY AGREEMENT
Other Names
NAME OF GRANTOR OTHER NAMES
Schedule 5-1 Security Agreement
SCHEDULE 6
TO
SECURITY AGREEMENT
CLASS PERCENTAGE OF
OF EQUITY PAR AMOUNT OF OUTSTANDING
EQUITY ISSUER EQUITY CERTIFICATE NOS. VALUE EQUITY INTERESTS EQUITY PLEDGED
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Schedule 6-1 Security Agreement
SCHEDULE 7
TO
SECURITY AGREEMENT
AMOUNT OF
DEBT ISSUER INDEBTEDNESS
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
Schedule 7-1 Security Agreement
SCHEDULE 8
TO
SECURITY AGREEMENT
U.S. Trademarks:
Trademark Registration Registration
Registered Owner Description Number Date
- ---------------- ----------- ------------ ------------
Foreign Trademarks:
Trademark Registration Registration
Registered Owner Description Number Date
- ---------------- ----------- ------------ ------------
Schedule 8-1 Security Agreement
SCHEDULE 9
TO
SECURITY AGREEMENT
U.S. Patents Issued:
Patent No. Issue Date Title Inventor(s)
- ---------- ---------- ----- -----------
U.S. Patents Pending:
Date Application
Filed Number Title Inventor(s)
- ----- ----------- ----- -----------
Foreign Patents Issued:
Country Patent No. Issue Date Title Inventor(s)
- ------- ---------- ---------- ----- -----------
Foreign Patents Pending:
Applicant's Date Application
Country Name Filed Number Title Inventor(s)
- ------- ----------- ----- ------------ ----- -----------
Schedule 9-1 Security Agreement
SCHEDULE 10
TO
SECURITY AGREEMENT
U.S. Copyright Registrations:
Title Registration No. Date of Issue Registered Owner
- ----- ---------------- ------------- ----------------
Foreign Copyright Registrations:
Country Title Registration No. Date of Issue
- ------- ----- ---------------- -------------
Pending U.S. Copyright Registration Applications:
Title Appl. No. Date of Application Copyright Claimant
- ----- --------- ------------------- ------------------
Pending Foreign Copyright Registration Applications:
Country Title Appl. No. Date of Application
- ------- ----- --------- -------------------
Schedule 10-1 Security Agreement
SCHEDULE 11
TO
SECURITY AGREEMENT
Deposit Accounts, Securities Accounts, Commodity Accounts
Depository Bank or Address of Depository Bank
Type of Account Securities Intermediary or Securities Intermediary Account Number
- --------------- ----------------------- --------------------------
Schedule 11-1 Security Agreement
SCHEDULE 12
TO
SECURITY AGREEMENT
Chattel Paper
Schedule 12-1 Security Agreement
SCHEDULE 13
TO
SECURITY AGREEMENT
Letter-of-Credit Rights
Schedule 13-1 Security Agreement
SCHEDULE 14
TO
SECURITY AGREEMENT
Documents
Schedule 14-1 Security Agreement
SCHEDULE 15
TO
SECURITY AGREEMENT
Motor Vehicles
Jurisdiction
Model Model Year of Registration VIN
- ----- ---------- --------------- ---
Schedule 15-1 Security Agreement
EXHIBIT I TO
SECURITY AGREEMENT
[FORM OF GRANT OF TRADEMARK SECURITY INTEREST]
GRANT OF TRADEMARK SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation
("GRANTOR"), owns and uses in its business, and will in the future adopt and so
use, various intangible assets, including the Trademark Collateral (as defined
below); and
WHEREAS, INTERMET CORPORATION, a Georgia corporation
("COMPANY") and the Subsidiaries of Company listed on the signature pages
thereof (collectively, Company and such Subsidiaries of Company are "BORROWERS"
and each a "BORROWER") have entered into a Debtor-in-Possession Credit Agreement
dated as of October [__], 2004 (said Credit Agreement, as it may heretofore have
been and as it may hereafter be further amended, restated, supplemented or
otherwise modified from time to time, being the "CREDIT AGREEMENT") with the
financial institutions listed on the signatures pages thereof as Lenders
(collectively, together with their respective successors and assigns party to
the Credit Agreement from time to time, the "LENDERS"), THE BANK OF NOVA SCOTIA,
as Administrative Agent for the Lenders and DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Collateral Agent for the Lenders (in such capacity, "SECURED
PARTY") pursuant to which Lenders have made certain commitments, subject to the
terms and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company; and
[Insert if Grantor is a Subsidiary Guarantor] [WHEREAS,
Grantor has executed and delivered that certain Subsidiary Guaranty dated as of
October [__], 2004 (said Subsidiary Guaranty, as it may heretofore have been and
as it may hereafter be further amended, restated, supplemented or otherwise
modified from time to time, being the "GUARANTY") in favor of Secured Party for
the benefit of Lenders, pursuant to which Grantor has guarantied the prompt
payment and performance when due of all obligations of Borrowers under the
Credit Agreement and the other Loan Documents; and
WHEREAS, pursuant to the terms of a Security Agreement dated
as of October [__], 2004 (said Security Agreement, as it may heretofore have
been and as it may hereafter be further amended, restated, supplemented or
otherwise modified from time to time, being the "SECURITY AGREEMENT"), among
Grantor, Secured Party and the other grantors named therein, Grantor has created
in favor of Secured Party a security interest in, and Secured Party has become a
secured creditor with respect to, the Trademark Collateral;
NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, subject to the terms and
conditions of the Security Agreement, to evidence further the security interest
granted by Grantor to Secured Party pursuant to the Security Agreement, Grantor
hereby grants to Secured Party a security interest in all of Grantor's right,
title and interest in and to the following, in each case whether now or
hereafter
I-1 Grant of Trademark Security Interest
to Security Agreement
existing or in which Grantor now has or hereafter acquires an interest
and wherever the same may be located (the "TRADEMARK COLLATERAL"):
(i) all rights, title and interest (including
rights acquired pursuant to a license or otherwise but only to the
extent permitted by agreements governing such license or other use) in
and to all trademarks, service marks, designs, logos, indicia,
tradenames, trade dress, corporate names, company names, business
names, fictitious business names, trade styles and/or other source
and/or business identifiers and applications pertaining thereto, owned
by such Grantor, or hereafter adopted and used, in its business
(including, without limitation, the trademarks specifically identified
on Schedule A annexed hereto) (collectively, the "TRADEMARKS"), all
registrations that have been or may hereafter be issued or applied for
thereon in the United States and any state thereof and in foreign
countries (including, without limitation, the registrations and
applications set forth on Schedule A annexed hereto), all common law
and other rights (but in no event any of the obligations) in and to the
Trademarks in the United States and any state thereof and in foreign
countries, and all goodwill of such Grantor's business symbolized by
the Trademarks and associated therewith; and
(ii) all proceeds, products, rents and profits of
or from any and all of the foregoing Trademark Collateral and, to the
extent not otherwise included, all payments under insurance (whether or
not Secured Party is the loss payee thereof), or any indemnity,
warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Trademark Collateral.
For purposes of this Grant of Trademark Security Interest, the term
"PROCEEDS" includes whatever is receivable or received when Trademark
Collateral or proceeds are sold, licensed, exchanged, collected or
otherwise disposed of, whether such disposition is voluntary or
involuntary.
Grantor does hereby further acknowledge and affirm that the
rights and remedies of Secured Party with respect to the security interest in
the Trademark Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
[The remainder of this page is intentionally left blank.]
I-2 Grant of Trademark Security Interest
to Security Agreement
IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark
Security Interest to be duly executed and delivered by its officer thereunto
duly authorized as of the __ day of _______, _____.
[NAME OF GRANTOR]
By: ________________________
Name: ______________________
Title: _____________________
I-3 Grant of Trademark Security Interest
to Security Agreement
SCHEDULE A
TO
GRANT OF TRADEMARK SECURITY INTEREST
Trademark Registration/ Registration/
Owner Description Appl. Number Appl. Date
- ----- ----------- ------------ ----------
I-A-1 Grant of Trademark Security Interest
to Security Agreement
EXHIBIT II TO
SECURITY AGREEMENT
[FORM OF GRANT OF PATENT SECURITY INTEREST]
GRANT OF PATENT SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation
("GRANTOR"), owns and uses in its business, and will in the future adopt and so
use, various intangible assets, including the Patent Collateral (as defined
below); and
WHEREAS, INTERMET CORPORATION, a Georgia corporation
("COMPANY") and the Subsidiaries of Company listed on the signature pages
thereof (collectively, Company and such Subsidiaries of Company are "BORROWERS"
and each a "BORROWER") have entered into a Debtor-in-Possession Credit Agreement
dated as of October [__], 2004 (said Credit Agreement, as it may heretofore have
been and as it may hereafter be further amended, restated, supplemented or
otherwise modified from time to time, being the "CREDIT AGREEMENT") with the
financial institutions listed on the signatures pages thereof as Lenders
(collectively, together with their respective successors and assigns party to
the Credit Agreement from time to time, the "LENDERS"), THE BANK OF NOVA SCOTIA,
as Administrative Agent for the Lenders and DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Collateral Agent for the Lenders (in such capacity, "SECURED
PARTY") pursuant to which Lenders have made certain commitments, subject to the
terms and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company; and
[Insert if Grantor is a Subsidiary Guarantor] [WHEREAS,
Grantor has executed and delivered that certain Subsidiary Guaranty dated as of
October [__], 2004 (said Subsidiary Guaranty, as it may heretofore have been and
as it may hereafter be further amended, restated, supplemented or otherwise
modified from time to time, being the "GUARANTY") in favor of Secured Party for
the benefit of Lenders, pursuant to which Grantor has guarantied the prompt
payment and performance when due of all obligations of Borrowers under the
Credit Agreement and the other Loan Documents; and]
WHEREAS, pursuant to the terms of a Security Agreement dated
as of October [__], 2004 (said Security Agreement, as it may heretofore have
been and as it may hereafter be further amended, restated, supplemented or
otherwise modified from time to time, being the "SECURITY AGREEMENT"), among
Grantor, Secured Party and the other grantors named therein, Grantor has created
in favor of Secured Party a security interest in, and Secured Party has become a
secured creditor with respect to, the Patent Collateral;
NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, subject to the terms and
conditions of the Security Agreement, to evidence further the security interest
granted by Grantor to Secured Party pursuant to the Security Agreement, Grantor
hereby grants to Secured Party a security interest in all of Grantor's right,
title and interest in and to the following, in each case whether now or
hereafter
II-1 Grant of Patent Security Interest
to Security Agreement
existing or in which Grantor now has or hereafter acquires an interest and
wherever the same may be located (the "PATENT COLLATERAL"):
(i) all rights, title and interest (including
rights acquired pursuant to a license or otherwise but only to the
extent permitted by agreements governing such license or other use) in
and to all patents and patent applications and rights and interests in
patents and patent applications under any domestic or foreign law that
are presently, or in the future may be, owned or held by such Grantor
and all patents and patent applications and rights, title and interests
in patents and patent applications under any domestic or foreign law
that are presently, or in the future may be, owned by such Grantor in
whole or in part (including, without limitation, the patents and patent
applications set forth on Schedule A annexed hereto), all rights (but
not obligations) corresponding thereto to sue for past, present and
future infringements and all re-issues, divisions, continuations,
renewals, extensions and continuations-in-part thereof; and
(ii) all proceeds, products, rents and profits of
or from any and all of the foregoing Patent Collateral and, to the
extent not otherwise included, all payments under insurance (whether or
not Secured Party is the loss payee thereof), or any indemnity,
warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Patent Collateral. For
purposes of this Grant of Patent Security Interest, the term "PROCEEDS"
includes whatever is receivable or received when Patent Collateral or
proceeds are sold, licensed, exchanged, collected or otherwise disposed
of, whether such disposition is voluntary or involuntary.
Grantor does hereby further acknowledge and affirm that the
rights and remedies of Secured Party with respect to the security interest in
the Patent Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
[The remainder of this page intentionally left blank.]
II-2 Grant of Patent Security Interest
to Security Agreement
IN WITNESS WHEREOF, Grantor has caused this Grant of Patent
Security Interest to be duly executed and delivered by its officer thereunto
duly authorized as of the ___ day of ____________, _____.
[NAME OF GRANTOR]
By: ________________________
Name: ______________________
Title: _____________________
II-3 Grant of Patent Security Interest
to Security Agreement
SCHEDULE A
TO
GRANT OF PATENT SECURITY INTEREST
Patents Issued:
Patent No. Issue Date Invention Inventor(s)
- ---------- ---------- --------- -----------
Patents Pending:
Applicant's Date Application
Name Filed Number Invention Inventor(s)
- ----------- ----- ------------ --------- -----------
II-A-1 Grant of Patent Security Interest
to Security Agreement
EXHIBIT III TO
SECURITY AGREEMENT
[FORM OF GRANT OF COPYRIGHT SECURITY INTEREST]
GRANT OF COPYRIGHT SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation
("GRANTOR"), owns and uses in its business, and will in the future adopt and so
use, various intangible assets, including the Copyright Collateral (as defined
below); and
WHEREAS, INTERMET CORPORATION, a Georgia corporation
("COMPANY") and the Subsidiaries of Company listed on the signature pages
thereof (collectively, Company and such Subsidiaries of Company are "BORROWERS"
and each a "BORROWER") have entered into a Debtor-in-Possession Credit Agreement
dated as of October [__], 2004 (said Credit Agreement, as it may heretofore have
been and as it may hereafter be further amended, restated, supplemented or
otherwise modified from time to time, being the "CREDIT AGREEMENT") with the
financial institutions listed on the signatures pages thereof as Lenders
(collectively, together with their respective successors and assigns party to
the Credit Agreement from time to time, the "LENDERS"), THE BANK OF NOVA SCOTIA,
as Administrative Agent for the Lenders and DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Collateral Agent for the Lenders (in such capacity, "SECURED
PARTY") pursuant to which Lenders have made certain commitments, subject to the
terms and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company; and
[Insert if Grantor is a Subsidiary Guarantor] [WHEREAS,
Grantor has executed and delivered that certain Subsidiary Guaranty dated as of
October [__], 2004 (said Subsidiary Guaranty, as it may heretofore have been and
as it may hereafter be further amended, restated, supplemented or otherwise
modified from time to time, being the "GUARANTY") in favor of Secured Party for
the benefit of Lenders, pursuant to which Grantor has guarantied the prompt
payment and performance when due of all obligations of Borrowers under the
Credit Agreement and the other Loan Documents; and
WHEREAS, pursuant to the terms of a Security Agreement dated
as of October [__], 2004 (said Security Agreement, as it may heretofore have
been and as it may hereafter be further amended, restated, supplemented or
otherwise modified from time to time, being the "SECURITY AGREEMENT"), among
Grantor, Secured Party and the other grantors named therein, Grantor has created
in favor of Secured Party a security interest in, and Secured Party has become a
secured creditor with respect to, the Copyright Collateral;
NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, subject to the terms and
conditions of the Security Agreement, to evidence further the security interest
granted by Grantor to Secured Party pursuant to the Security Agreement, Grantor
hereby grants to Secured Party a security interest in all of Grantor's right,
title and interest in and to the following, in each case whether now or
hereafter
III-1 Grant of Copyright Security Interest
to Security Agreement
existing or in which Grantor now has or hereafter acquires an interest and
wherever the same may be located (the "COPYRIGHT COLLATERAL"):
(i) all rights, title and interest (including rights
acquired pursuant to a license or otherwise but only to the extent
permitted by agreements governing such license or other use) under
copyright in various published and unpublished works of authorship
including, without limitation, computer programs, computer data bases,
other computer software layouts, trade dress, drawings, designs,
writings, and formulas (including, without limitation, the works set
forth on Schedule A annexed hereto, as the same may be amended pursuant
hereto from time to time) (collectively, the "COPYRIGHTS"), all
copyright registrations issued to Grantor and applications for
copyright registration that have been or may hereafter be issued or
applied for thereon in the United States and any state thereof and in
foreign countries (including, without limitation, the registrations set
forth on Schedule A annexed hereto, as the same may be amended pursuant
hereto from time to time) (collectively, the "COPYRIGHT
REGISTRATIONS"), all common law and other rights in and to the
Copyrights in the United States and any state thereof and in foreign
countries including all copyright licenses (but with respect to such
copyright licenses, only to the extent permitted by such licensing
arrangements) (the "COPYRIGHT RIGHTS"), including, without limitation,
each of the Copyrights, rights, titles and interests in and to the
Copyrights, all derivative works and other works protectable by
copyright, which are presently, or in the future may be, owned, created
(as a work for hire for the benefit of Grantor), authored (as a work
for hire for the benefit of Grantor), or acquired by Grantor, in whole
or in part, and all Copyright Rights with respect thereto and all
Copyright Registrations therefor, heretofore or hereafter granted or
applied for, and all renewals and extensions thereof, throughout the
world, including all proceeds thereof (such as, by way of example and
not by limitation, license royalties and proceeds of infringement
suits), the right (but not the obligation) to renew and extend such
Copyright Registrations and Copyright Rights and to register works
protectable by copyright and the right (but not the obligation) to sue
in the name of such Grantor or in the name of Secured Party or Lenders
for past, present and future infringements of the Copyrights and
Copyright Rights; and
(ii) all proceeds, products, rents and profits of or from
any and all of the foregoing Copyright Collateral and, to the extent
not otherwise included, all payments under insurance (whether or not
Secured Party is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with
respect to any of the foregoing Copyright Collateral. For purposes of
this Grant of Copyright Security Interest, the term "PROCEEDS" includes
whatever is receivable or received when Copyright Collateral or
proceeds are sold, licensed, exchanged, collected or otherwise disposed
of, whether such disposition is voluntary or involuntary.
Grantor does hereby further acknowledge and affirm that the
rights and remedies of Secured Party with respect to the security interest in
the Copyright Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
III-2 Grant of Copyright Security Interest
to Security Agreement
[The remainder of the page is intentionally left blank.]
III-3 Grant of Copyright Security Interest
to Security Agreement
IN WITNESS WHEREOF, Grantor has caused this Grant of Copyright
Security Interest to be duly executed and delivered by its officer thereunto
duly authorized as of the ___ day of ___________, _____.
[NAME OF GRANTOR]
By: ________________________
Name: ______________________
Title: _____________________
III-4 Grant of Copyright Security Interest
to Security Agreement
SCHEDULE A
TO
GRANT OF COPYRIGHT SECURITY INTEREST
U.S. Copyright Registrations:
Title Registration No. Date of Issue Registered Owner
- ----- ---------------- ------------- ----------------
Foreign Copyright Registrations:
Country Title Registration No. Date of Issue
- ------- ----- ---------------- -------------
Pending U.S. Copyright Registration Applications:
Title Appl. No. Date of Application Copyright Claimant
- ----- --------- ------------------- ------------------
Pending Foreign Copyright Registration Applications:
Country Title Appl. No. Date of Application
- ------- ----- --------- -------------------
III-A-1 Grant of Copyright Security Interest
to Security Agreement
EXHIBIT IV TO
SECURITY AGREEMENT
PLEDGE SUPPLEMENT
This Pledge Supplement, dated as of __________________, is
delivered pursuant to the Security Agreement, dated as of October [__], 2004,
between ____________________, a _______________ ("GRANTOR"), the other Grantors
named therein, and Deutsche Bank Trust Company Americas, as Secured Party (said
Security Agreement, as it may heretofore have been and as it may hereafter be
further amended, restated, supplemented or otherwise modified from time to time,
being the "SECURITY AGREEMENT"). Capitalized terms used herein not otherwise
defined herein shall have the meanings ascribed thereto in the Security
Agreement.
Grantor hereby agrees that the [Pledged Equity] [Pledged Debt]
set forth on Schedule A annexed hereto shall be deemed to be part of the
[Pledged Equity] [Pledged Debt] and shall become part of the Securities
Collateral and shall secure all Secured Obligations.
IN WITNESS WHEREOF, Grantor has caused this Pledge Supplement
to be duly executed and delivered by its duly authorized officer as of
_______________.
[GRANTOR]
By: _______________________________
Name: _____________________________
Title: ____________________________
IV-1 Pledge Supplement
to Security Agreement
SCHEDULE A
TO
PLEDGE SUPPLEMENT
IV-A-1 Pledge Supplement
to Security Agreement
EXHIBIT V TO
SECURITY AGREEMENT
IP SUPPLEMENT
This IP SUPPLEMENT, dated as of _______, is delivered pursuant
to and supplements (i) the Security Agreement, dated as of October [__], 2004
(said Security Agreement, as it may heretofore have been and as it may hereafter
be further amended, restated, supplemented or otherwise modified from time to
time, being the "SECURITY AGREEMENT"), among Intermet Corporation, [Insert Name
of Grantor] ("GRANTOR"), the other grantors named therein, and Deutsche Bank
Trust Company Americas, as Secured Party, and (ii) the [Grant of Trademark
Security Interest] [Grant of Patent Security Interest] [Grant of Copyright
Security Interest] dated as of ___________, _____ (the "GRANT") executed by
Grantor. Capitalized terms used herein not otherwise defined herein shall have
the meanings ascribed thereto in the Grant.
Grantor grants to Secured Party a security interest in all of
Grantor's right, title and interest in and to the [Trademark Collateral] [Patent
Collateral] [Copyright Collateral] set forth on Schedule A annexed hereto. All
such [Trademark Collateral] [Patent Collateral] [Copyright Collateral] shall be
deemed to be part of the [Trademark Collateral] [Patent Collateral] [Copyright
Collateral] and shall be hereafter subject to each of the terms and conditions
of the Security Agreement and the Grant.
IN WITNESS WHEREOF, Grantor has caused this IP Supplement to
be duly executed and delivered by its duly authorized officer as of
______________.
[GRANTOR]
By: _______________________
Name: _____________________
Title: ____________________
V-1 IP Supplement
to Security Agreement
EXHIBIT VI TO
SECURITY AGREEMENT
[FORM OF COUNTERPART]
COUNTERPART (this "COUNTERPART"), dated as of _______, is
delivered pursuant to Section 21 of the Security Agreement referred to below.
The undersigned hereby agrees that this Counterpart may be attached to the
Security Agreement, dated as of October [__], 2004 (said Security Agreement, as
it may heretofore have been and as it may hereafter be further amended,
restated, supplemented or otherwise modified from time to time being the
"SECURITY AGREEMENT"; capitalized terms used herein not otherwise defined herein
shall have the meanings ascribed therein), among Intermet Corporation, the other
Grantors named therein, and Deutsche Bank Trust Company Americas, as Secured
Party. The undersigned by executing and delivering this Counterpart hereby
becomes a Grantor under the Security Agreement in accordance with Section 21
thereof and agrees to be bound by all of the terms thereof. [Without limiting
the generality of the foregoing, the undersigned hereby [For new Subsidiary
Borrowers only: agrees that it hereby becomes a party to the Security Agreement
as a Grantor, and hereafter has the rights and obligations of a Borrower
thereunder and is bound by all of the provisions thereof as fully as if the
undersigned were one of the original parties thereto.][:
**Paragraphs (i)-(v) for new Subsidiary Guarantors only**
(i) agrees that all Collateral of the undersigned,
including the items of property described on the Schedules attached
hereto, shall become part of the Collateral and shall secure all
Secured Obligations, and hereby grants to the Secured Party for the
benefit of the Lenders a continuing security interest in all such
Collateral of the undersigned;
(ii) authorizes the Secured Party to add the information
set forth on the Schedules to this Agreement to the correlative
Schedules attached to the Security Agreement;(1)
(iii) agrees that it hereby becomes a party to the Security
Agreement as a Grantor and hereafter has the rights and obligations of
a Subsidiary Guarantor thereunder and is bound by all of the provisions
thereof as fully as if the undersigned were one of the original parties
thereto;
(iv) makes the representations and warranties set forth in
the Security Agreement, as amended hereby, to the extent relating to
the undersigned; and
(v) agrees that the address and facsimile number of the
undersigned for notice purposes pursuant to Section 24 of the Security
Agreement shall be initially as set forth below.
- ---------------------
(1) The Schedules to the Counterpart should include copies of all Schedules that
identify Collateral to be granted by the Subsidiary Guarantor.
Security Agreement 1
[NAME OF ADDITIONAL GRANTOR]
By: ____________________________
Name: __________________________
Title: _________________________
Notice Address:
S-1
EXHIBIT XI
[FORM OF ASSIGNMENT AGREEMENT]
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT (this "AGREEMENT") is entered into by and
between the parties designated as Assignor ("ASSIGNOR") and Assignee
("ASSIGNEE") above the signatures of such parties on the Schedule of Terms
attached hereto and hereby made an integral part hereof (the "SCHEDULE OF
TERMS") and relates to that certain Debtor-in-Possession Credit Agreement
described in the Schedule of Terms (said Debtor-in-Possession Credit Agreement,
as amended, supplemented or otherwise modified to the date hereof and as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT", the terms defined therein and not otherwise
defined herein being used herein as therein defined).
IN CONSIDERATION of the agreements, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
SECTION 1. ASSIGNMENT AND ASSUMPTION.
Effective upon the Settlement Date specified in Item 4 of the
Schedule of Terms (the "SETTLEMENT DATE"), Assignor hereby sells and
assigns to Assignee, without recourse, representation or warranty
(except as expressly set forth herein), and Assignee hereby purchases
and assumes from Assignor, that percentage interest in all of
Assignor's rights and obligations as a Lender arising under the Credit
Agreement and the other Loan Documents with respect to Assignor's (i)
Commitments and/or outstanding Loans, and (ii) Letters of Credit or
participations therein, if any (collectively, the "COMMITMENTS AND
OUTSTANDING LOANS") which represents, as of the Settlement Date, the
percentage interest specified in Item 3 of the Schedule of Terms of all
rights and obligations of Lenders arising under the Credit Agreement
and the other Loan Documents with respect to such Commitments, such
outstanding Loans, and such Letters of Credit (the "ASSIGNED SHARE").
Without limiting the generality of the foregoing, the parties hereto
hereby expressly acknowledge and agree that any assignment of all or
any portion of Assignor's rights and obligations relating to Assignor's
Commitments shall include, in the event Assignor is an Issuing Lender
with respect to any outstanding Letters of Credit (any such Letters of
Credit being "ASSIGNOR LETTERS OF CREDIT"), the sale to Assignee of a
participation in the Assignor Letters of Credit and any drawings
thereunder as contemplated by subsection 3.1C of the Credit Agreement.
Any assignment under this Agreement shall be subject to the terms and
conditions in the Credit Agreement, including but not limited to those
provisions with respect to the giving of notice to the Borrowers and
Administrative Agent.
In consideration of the assignment described above, Assignee
hereby agrees to pay to Assignor, on the Settlement Date, the principal
amount of any outstanding Loans included within the Assigned Share,
such payment to be made by wire transfer of
XI-6
immediately available funds in accordance with the applicable payment
instructions set forth in Item 5 of the Schedule of Terms.
Assignor hereby represents and warrants that Item 3 of the
Schedule of Terms correctly sets forth the amount of the Commitments
and the Pro Rata Share corresponding to the Assigned Share.
Assignor and Assignee hereby agree that, upon giving effect to
the assignment and assumption described above, (i) Assignee shall be a
party to the Credit Agreement and shall have all of the rights and
obligations under the Loan Documents, and shall be deemed to have made
all of the covenants and agreements contained in the Loan Documents,
arising out of or otherwise related to the Assigned Share, and (ii)
Assignor shall be absolutely released from any of such obligations,
covenants and agreements assumed or made by Assignee in respect of the
Assigned Share (but shall continue to be entitled to the benefits of
subsection 10.9 of the Credit Agreement). Assignee hereby acknowledges
and agrees that the agreement set forth in this Section 1(d) is
expressly made for the benefit of Borrowers, Administrative Agent,
Collateral Agent, Assignor and the other Lenders and their respective
successors and permitted assigns.
Assignor and Assignee hereby acknowledge and confirm their
understanding and intent that (i) this Agreement shall effect the
assignment by Assignor and the assumption by Assignee of Assignor's
rights and obligations with respect to the Assigned Share, (ii) any
other assignments by Assignor of a portion of its rights and
obligations with respect to the Commitments shall have no effect on the
Commitment and the Pro Rata Share corresponding to the Assigned Share
as set forth in Item 3 of the Schedule of Terms, and (iii) from and
after the Settlement Date, Administrative Agent shall make all payments
under the Credit Agreement in respect of the Assigned Share (including
all payments of principal and accrued but unpaid interest, commitment
fees and letter of credit fees with respect thereto) (A) in the case of
any such interest and fees that shall have accrued prior to the
Settlement Date, to Assignor, and (B) in all other cases, to Assignee;
provided that Assignor and Assignee shall make payments directly to
each other to the extent necessary to effect any appropriate
adjustments in any amounts distributed to Assignor and/or Assignee by
Administrative Agent under the Loan Documents in respect of the
Assigned Share in the event that, for any reason whatsoever, the
payment of consideration contemplated by Section 1(b) occurs on a date
other than the Effective Date (as defined in subsection 3(h) below).
SECTION 2. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Assignor represents and warrants that it is the legal and
beneficial owner of the Assigned Share, free and clear of any adverse
claim.
Assignor shall not be responsible to Assignee for the
execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of any of the Loan Documents or for any
representations, warranties, recitals or statements made therein or
made in any written or oral statements or in any financial or other
statements, instruments, reports or certificates or any other documents
furnished or made by Assignor
XI-7
to Assignee or by or on behalf of Company or any of its Subsidiaries to
Assignor or Assignee in connection with the Loan Documents and the
transactions contemplated thereby or for the financial condition or
business affairs of Company or any other Person liable for the payment
of any Obligations, nor shall Assignor be required to ascertain or
inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the
Loan Documents or as to the use of the proceeds of the Loans or the use
of the Letters of Credit or as to the existence or possible existence
of any Event of Default or Potential Event of Default.
Assignee represents and warrants that it is an Eligible
Assignee; that it has experience and expertise in the making of loans
and participating in Letters of Credit such as the Loans and Letters of
Credit; that it has acquired the Assigned Share for its own account in
the ordinary course of its business and without a view to distribution
of the Loans within the meaning of the Securities Act or the Exchange
Act or other federal securities laws (it being understood that, subject
to the provisions of subsection 10.1 of the Credit Agreement, the
disposition of the Assigned Share or any interests therein shall at all
times remain within its exclusive control); and that it has received,
reviewed and approved a copy of the Credit Agreement (including all
Exhibits and Schedules thereto).
Assignee represents and warrants that it has received from
Assignor such financial information regarding Company and its
Subsidiaries as is available to Assignor and as Assignee has requested,
that it has made its own independent investigation of the financial
condition and affairs of Company and its Subsidiaries in connection
with the assignment evidenced by this Agreement, and that it has made
and shall continue to make its own appraisal of the creditworthiness of
Company and its Subsidiaries. Assignor shall have no duty or
responsibility, either initially or on a continuing basis, to make any
such investigation or any such appraisal on behalf of Assignee or to
provide Assignee with any other credit or other information with
respect thereto, whether coming into its possession before the
Settlement Date or at any time or times thereafter, and Assignor shall
not have any responsibility with respect to the accuracy of or the
completeness of any information provided to Assignee.
Each party to this Agreement represents and warrants to the
other party hereto that it has full power and authority to enter into
this Agreement and to perform its obligations hereunder in accordance
with the provisions hereof, that this Agreement has been duly
authorized, executed and delivered by such party and that this
Agreement constitutes a legal, valid and binding obligation of such
party, enforceable against such party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity.
SECTION 3. MISCELLANEOUS.
Each of Assignor and Assignee hereby agrees from time to time,
upon request of the other such party hereto, to take such additional
actions and to execute and deliver such additional documents and
instruments as such other party may reasonably request to effect the
transactions contemplated by, and to carry out the intent of, this
Agreement.
XI-8
Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated, except by an instrument in writing
signed by the party (including, if applicable, any party required to
evidence its consent to or acceptance of this Agreement) against whom
enforcement of such change, waiver, discharge or termination is sought.
Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be
in writing and may be personally served or sent by telefacsimile or
United States mail or courier service and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of
telefacsimile or three Business Days after depositing it in the United
States mail with postage prepaid and properly addressed. For the
purposes hereof, the notice address of each of Assignor and Assignee
shall be as set forth on the Schedule of Terms or, as to either such
party, such other address as shall be designated by such party in a
written notice delivered to the other such party. In addition, the
notice address of Assignee set forth on the Schedule of Terms shall
serve as the initial notice address of Assignee for purposes of
subsection 10.8 of the Credit Agreement.
In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and
assigns.
This Agreement may be executed in one or more counterparts and
by different parties hereto in separate counterparts, each of which
when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same
instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature
pages are physically attached to the same document.
This Agreement shall become effective upon the date (the
"EFFECTIVE DATE") upon which all of the following conditions are
satisfied: (i) the execution of a counterpart hereof by each of
Assignor and Assignee, (ii) the execution of a counterpart hereof by
Administrative Agent as evidence of its consent hereto to the extent
required under subsection 10.1B(i) of the Credit Agreement, (iii) the
receipt by Administrative Agent of the processing and recordation fee
referred to in subsection 10.1B(i) of the Credit Agreement, (iv) in the
event Assignee is a Non-US Lender, the delivery by Assignee to
Administrative Agent of such forms, certificates or other evidence with
respect to United
XI-9
States federal income tax withholding matters as Assignee may be
required to deliver to Administrative Agent pursuant to subsection
2.7B(v) of the Credit Agreement, (vi) the execution of a counterpart
hereof by Administrative Agent as evidence of its consent hereto to the
extent required under subsection 10.1B(ii) of the Credit Agreement,
(vii) the acceptance of this Agreement by Administrative Agent and the
recordation of the information contained herein in the Register by
Administrative Agent as provided in subsection 10.1B(ii) of the Credit
Agreement, (viii) the receipt by Company of notice of such recordation,
and (ix) the receipt by Administrative Agent of originals or
telefacsimiles of the counterparts described in clauses (i) and (ii)
above and authorization of delivery thereof.
[Remainder of page intentionally left blank]
XI-10
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized, such execution being made as of the Effective Date.
XI-11
SCHEDULE OF TERMS
1. Borrowers: Intermet Corporation ("Company") and the Subsidiaries of
Company listed on the signature pages of the Credit Agreement.
2. Name and Date of Credit Agreement: Debtor-in-Possession Credit
Agreement dated as of October [__], 2004 by and among Borrowers, the
financial institutions listed on the signature pages thereof as
Lenders, Deutsche Bank Trust Company Americas, as Collateral Agent and
as Co-Agent, and The Bank of Nova Scotia, as Administrative Agent.
3. Amounts:
Loans
-----
(a) Aggregate Commitments of all Lenders: $_________
(b) Assigned Share/Pro Rata Share: _________%
(c) Amount of Assigned Share of Commitments: $_________
(d) Amount of Assigned Share of Loans: $_________
Re: Letters of Credit
---------------------
(a) Aggregate Amount of Participations by all Lenders: $_________
(b) Assigned Share/Pro Rata Share: _________%
(c) Amount of Assigned Share: $_________
4. Settlement Date: ____________, 200__
5. Payment Instructions:
ASSIGNOR: ASSIGNEE:
______________________________ ____________________________
______________________________ ____________________________
______________________________ ____________________________
Attention: __________________ Attention: ________________
Reference: _________________ Reference: _______________
6. Notice Addresses:
ASSIGNOR: ASSIGNEE:
______________________________ ____________________________
______________________________ ____________________________
______________________________ ____________________________
______________________________ ____________________________
7. Signatures:
[NAME OF ASSIGNOR], [NAME OF ASSIGNEE],
as Assignor as Assignee
By: ____________________________________ By: ____________________________
Title: Title:
Accepted in accordance with subsection [Consented to in accordance with
10.1B(ii) of the Credit Agreement: subsection 10.1B(ii) of the
Credit Agreement:
THE BANK OF NOVA SCOTIA, [ISSUING LENDER],
as Administrative Agent as Issuing Lender
By: ____________________________________ By: ____________________________
Title: Title:]
EXHIBIT XII
[FORM OF] BORROWING BASE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFY THAT:
(1) Reference is made to that certain Debtor-in-Possession Credit
Agreement dated as of October 21, 2004 (as amended, modified or revised from
time to time (the "CREDIT AGREEMENT") by and among Intermet Corporation, a
Georgia Corporation (the "COMPANY"), each of the Company's Subsidiaries listed
on the signature pages thereof (collectively with Company, the "BORROWERS", and
each, a "BORROWER"), the financial institutions listed on the signature pages
thereof, as Lenders, Deutsche Bank Trust Company Americas, as Collateral Agent
and Co-Agent and The Bank of Nova Scotia, as Administrative Agent.
(2) Pursuant to the Credit Agreement, each of the undersigned in his or
her capacity as the indicated officer of Borrowers hereby certifies that they
have reviewed the terms of the Credit Agreement and Annex I is a true and
correct calculation of the Borrowing Base as of [___________, 200__] determined
in accordance with the Credit Agreement.
[The remainder of this page intentionally left blank]
1 Borrowing Base Certificate
The foregoing certifications, together with the computations set forth
in Annex 1 annexed hereto and made a part hereof, are made and delivered this
___ day of ________, 200__ pursuant to subsection 6.12 of the Credit Agreement.
INTERMET CORPORATION,
By: ___________________________________
Name:
Title:
ALEXANDER CITY CASTING COMPANY, INC.,
By: ___________________________________
Name:
Title:
CAST-MATIC CORPORATION,
By: ___________________________________
Name:
Title:
COLUMBUS FOUNDRY, L.P.,
By: ___________________________________
Name:
Title:
DIVERSIFIED DIEMAKERS, INC.,
By: ___________________________________
Name:
Title:
S-1 Borrowing Base Certificate
GANTON TECHNOLOGIES INC.,
By: ___________________________________
Name:
Title:
INTERMET HOLDING COMPANY,
By: ___________________________________
Name:
Title:
INTERMET ILLINOIS, INC.,
By: ___________________________________
Name:
Title:
INTERMET INTERNATIONAL, INC.,
By: ___________________________________
Name:
Title:
INTERMET U.S. HOLDING, INC.,
By: ___________________________________
Name:
Title:
IRONTON IRON, INC.,
By: ___________________________________
Name:
Title:
A-2 Borrowing Base Certificate
LYNCHBURG FOUNDRY COMPANY,
By: ___________________________________
Name:
Title:
NORTHERN CASTINGS CORPORATION,
By: ___________________________________
Name:
Title:
SUDBURY, INC.,
By: ___________________________________
Name:
Title:
SUDM, INC.,
By: ___________________________________
Name:
Title:
TOOL PRODUCTS, INC.,
By: ___________________________________
Name:
Title:
WAGNER CASTINGS COMPANY,
By: ___________________________________
Name:
Title:
A-3 Borrowing Base Certificate
WAGNER HAVANA, INC.,
By: ___________________________________
Name:
Title:
A-4 Borrowing Base Certificate
ATTACHMENT NO. 1
TO
BORROWING BASE CERTIFICATE
AMOUNTS
-----------
A. RECEIVABLES:
1. Total Accounts Receivable: $__________
2. Less Ineligibles:*
- Not in compliance with Loan Documents (a): $__________
- Extended payment terms (b): $__________
- More than 90 days past due (c): $__________
- Affiliate or otherwise unacceptable sales (d): $__________
- Multiple ineligible accounts (50%) (e): $__________
- Concentration (30%) (f): $__________
- States requiring Business Activity Report (g); $__________
- Disputes, chargebacks (h): $__________
- Contra-accounts (i): $__________
- Foreign accounts (j): $__________
- Trade promotions, rebates (k): $__________
- Government accounts (l): $__________
- Insolvency (m): $__________
- Bill-and-hold, sale on approval etc. (n): $__________
- Goods not shipped (o): $__________
- Not in legal compliance (p): $__________
- Not subject to First Priority Lien (q): $__________
- Prepayments, security deposits (r): $__________
- Volume rebates (s): $__________
- Deferred payment program (t): $__________
3. Total Ineligible Accounts Receivable: $__________
4. Gross Eligible Accounts Receivable (A1-A3): $__________
5. Less (without duplication) returns, discounts, deductions, $__________
credits, other allowances:
6. Net Eligible Accounts Receivable (A4-A5): $__________
B. INVENTORY
1. Total RAW MATERIALS: $__________
- ------------------
* Parenthetical references are to clauses set forth in "Eligible Accounts
Receivable" definition.
A-1 Borrowing Base Certificate
AMOUNTS
-----------
2. Less Ineligibles:**
- Not subject to First Priority Lien (a): $__________
- Not located on approved sites (b): $__________
- Not solely owned, subject reciprocal agreements (c): $__________
- Promotional supplies (d): $__________
- Not in US (e): $__________
- Returned, rejected or certain in transit goods (f): $__________
- Not first quality or conforming (g): $__________
3. Total Ineligible Raw Material Inventory: $__________
4. Less freight and shipping in an amount equal to 0.5% of Line $__________
B1
5. Net Eligible Raw Material Inventory (B1-B3-B4): $__________
6. Total WORK-IN-PROCESS: $__________
7. Less Ineligibles:
- Not subject to First Priority Lien (a): $__________
- Not located on approved sites (b): $__________
- Not solely owned, subject reciprocal agreements (c): $__________
- Promotional supplies (d): $__________
- Not in US (e): $__________
- Returned, rejected or certain in transit goods (f): $__________
- Not first quality or conforming (g): $__________
8. Total Ineligible Work-In-Process Inventory: $__________
9. Less freight and shipping in an amount equal to 0.5% of Line $__________
B6
10. Net Eligible Work-In-Process Inventory (B6-B8-B9): $__________
11. Total FINISHED GOODS: $__________
12. Less Ineligibles:
- Not subject to First Priority Lien (a): $__________
- Not located on approved sites (b): $__________
- Not solely owned, subject reciprocal agreements (c): $__________
- ------------------
** Parenthetical references are to clauses set forth in "Eligible Inventory"
definition.
A-2 Borrowing Base Certificate
AMOUNTS
-----------
- Promotional supplies (d): $__________
- Not in US (e): $__________
- Returned, rejected or certain in transit goods (f): $__________
- Not first quality or conforming (g): $__________
13. Total Ineligible Finished Goods Inventory: $__________
14. Less freight and shipping in an amount equal to 0.5% of Line $__________
B11
15. Net Eligible Finished Goods Inventory (B11-B13-B14): $__________
C. VALUE OF ELIGIBLE INVENTORY (lower of cost (first-in, first-out) and market
value):
1. Raw Materials - (B5 multiplied by advance rate of 50%): $__________
2. Work-in-Process - (B10 multiplied by advance rate of 50%): $__________
3. Finished Goods - (B15 multiplied by advance rate of 50%): $__________
D. NET ORDERLY LIQUIDATION VALUE OF ELIGIBLE INVENTORY
1. Raw Materials - (B5 multiplied by advance rate of 85%): $__________
2. Work-in-Process - (B10 multiplied by advance rate of 85%): $__________
3. Finished Goods - (B15 multiplied by advance rate of 85%): $__________
E. FIXED ASSETS:
1. (i) $10,000,000 or (ii) appraised value, maximum $15,000,000. $__________
2. Less mandatory prepayments (Section 2.4A(iii)(a)):
- Net Asset Sale proceeds over $5,000,000: $__________
A-3 Borrowing Base Certificate
AMOUNTS
-----------
F. BORROWING BASE
1. Net Eligible Accounts Receivable (A6 multiplied by advance $__________
rate of 85%):
2. Net Eligible Inventory:
a. Raw Materials (lesser of C1 and D1) $__________
b. Work-in-Process (lesser of C2 and D2): $__________
c. Finished Goods (lesser of C3 and D3): $__________
3. Total Net Eligible Inventory (F2a + F2b + F2c): $__________
4. Total Fixed Assets (from line E2): $__________
5. Total Borrowing Base Availability (Add F1, F3 and F4 in the $__________
aggregate):
6. Required Reserves:
a. Established by Agent $__________
b. Carve-Outs $__________
c. Total Reserves (6a+6b) $__________
7. Utilization:
a. Revolving Loans: $__________
b. L/C Usage: $__________
c. Total Utilization (7a+7b) $__________
8. Net Borrowing Base Availability (E5 minus 6c minus 7c): $__________
A-4 Borrowing Base Certificate
EXHIBIT XIII
[**FORM OF**] COLLATERAL ACCESS AGREEMENT
REAL PROPERTY HOLDER'S WAIVER AND CONSENT AGREEMENT
This REAL PROPERTY HOLDER'S WAIVER AND CONSENT AGREEMENT (this
"AGREEMENT") is dated as of ___________, 20___ and entered into by
_________________________, a ____________________ ("REAL PROPERTY HOLDER"), to
and for the benefit of DEUTSCHE BANK TRUST COMPANY AMERICAS, having offices at
60 Wall Street, NYC 60-0219, New York, New York 10005, as collateral agent for
and representative of (in such capacity, "COLLATERAL AGENT") the financial
institutions ("LENDERS") from time to time party to the Credit Agreement (as
hereinafter defined).
R E C I T A L S
A. ________________, a ______________ corporation ("COMPANY") has
possession of and occupies all or a portion of the property described on Exhibit
A annexed hereto (the "PREMISES").
B. Company's interest in the Premises [arises under the lease
agreement (the "LEASE")][is subject to the [mortgage][deed of trust] (the
"MORTGAGE")] more particularly described on Exhibit B annexed hereto, pursuant
to which Real Property Holder has rights, upon the terms and conditions set
forth therein, to take possession of, and otherwise assert control over, the
Premises.
C. The Bank of Nova Scotia, as administrative agent, Collateral
Agent and Lenders have entered into that certain Debtor-in-Possession Credit
Agreement dated as of October [__], 2004, (said Credit Agreement, as amended,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT") with [Company,][Intermet Corporation ("INTERMET"), a Georgia
corporation,] and each of the other borrowers listed on the signature pages
thereof (collectively, with [Intermet,] [and] [Company,] "BORROWERS") and
Company has executed a [guaranty,] a security agreement and other collateral
documents in relation to the Credit Agreement.
D. The extensions of credit made by Lenders to Borrowers under
the Credit Agreement will be secured, in part, by the inventory, equipment and
all other personal property (collectively, the "Collateral") now or hereafter
located on the premises described in the [Lease][Mortgage].
E. Collateral Agent has requested that Real Property Holder
execute this Agreement as a condition to the extension of credit to Borrowers
under the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Real Property Holder hereby represents and warrants to, and
covenants and agrees with, Collateral Agent as follows:
XIII-1 Collateral Access Agreement
1. Real Property Holder hereby (a) waives and releases unto
Collateral Agent and its successors and assigns any and all rights granted by or
under any present or future laws to levy or distraint for rent or any other
charges which may be due to Real Property Holder against the Collateral, and any
and all other claims, liens and demands of every kind which it now has or may
hereafter have against the Collateral, and (b) agrees that any rights it may
have in or to the Collateral, no matter how arising (to the extent not
effectively waived pursuant to clause (a) of this paragraph 1), shall be second
and subordinate to the rights of Collateral Agent in respect thereof. Real
Property Holder acknowledges that the Collateral is and will remain personal
property and not fixtures even though it may be affixed to or placed on the
Premises.
2. Real Property Holder certifies that (a) Real Property Holder
is the [landlord under the Lease][beneficiary under the Mortgage], (b) the
[Lease][Mortgage] is in full force and effect and has not been amended,
modified, or supplemented except as set forth on Exhibit B annexed hereto, (c)
there is no defense, offset, claim or counterclaim by or in favor of Real
Property Holder against Company under the [Lease][Mortgage] or against the
obligations of Real Property Holder under the [Lease][Mortgage], except as set
forth on Exhibit C annexed hereto, which defense, offset, claim or counterclaim
is currently stayed by the Bankruptcy Code, (d) no notice of default has been
given under or in connection with the [Lease][Mortgage], except as set forth on
Exhibit D annexed hereto, which notice of default has not been cured or
otherwise stayed, and Real Property Holder has no knowledge of the occurrence of
any other default under or in connection with the [Lease][Mortgage], and (e)
except as disclosed to Collateral Agent, no portion of the Premises is
encumbered in any way by any deed of trust or mortgage lien or ground or
superior lease.
3. Real Property Holder consents to the installation or placement
of the Collateral on the Premises, and Real Property Holder grants to Collateral
Agent a license to enter upon and into the Premises to do any or all of the
following with respect to the Collateral: assemble, have appraised, display,
remove, maintain, prepare for sale or lease, repair, transfer, or sell (at
public or private sale). In entering upon or into the Premises, Collateral Agent
hereby agrees to indemnify, defend and hold Real Property Holder harmless from
and against any and all claims, judgments, liabilities, costs and expenses
incurred by Real Property Holder caused solely by Collateral Agent's entering
upon or into the Premises and taking any of the foregoing actions with respect
to the Collateral. Such costs shall include any damage to the Premises made by
Collateral Agent in severing and/or removing the Collateral therefrom.
4. Real Property Holder agrees that it will not prevent
Collateral Agent or its designee from entering upon the Premises at all
reasonable times and after reasonable notice to inspect or remove the
Collateral. In the event that Real Property Holder has the right to, and desires
to, obtain possession of the Premises [(either through expiration of the Lease
or termination thereof due to the default of Company THEREUNDER)] [(through the
exercise of its rights under the Mortgage upon a default by Company
thereunder)], Real Property Holder will deliver notice (the "REAL PROPERTY
HOLDER'S NOTICE") to Collateral Agent to that effect. Within the 45 day period
after Collateral Agent receives the Real Property Holder's Notice, Collateral
Agent shall have the right, but not the obligation, to cause the Collateral to
be removed from the Premises. During such 45 day period, Real Property Holder
will not remove the Collateral from the Premises nor interfere with Collateral
Agent's actions in removing the Collateral from the Premises or Collateral
Agent's actions in otherwise enforcing its security interest in the
XIII-2 Collateral Access Agreement
Collateral. Notwithstanding anything to the contrary in this paragraph,
Collateral Agent shall at no time have any obligation to remove the Collateral
from the Premises.
5. Real Property Holder shall send to Collateral Agent a copy of
any notice of default under the [Lease][Mortgage] sent by Real Property Holder
to Company. In addition, Real Property Holder shall send to Collateral Agent a
copy of any notice received by Real Property Holder of a breach or default under
any other lease, mortgage, deed of trust, security agreement or other instrument
to which Real Property Holder is a party which may affect Company's rights in,
or possession of, the Premises.
6. All notices to Collateral Agent under this Agreement shall be
in writing and sent to Collateral Agent at its address set forth on the
signature page hereof by telefacsimile, by United States mail, or by overnight
delivery service.
7. The provisions of this Agreement shall continue in effect
until Real Property Holder shall have received Collateral Agent's written
certification that all amounts advanced under the Credit Agreement have been
paid in full.
8. This Agreement and the rights and obligations of the parties
hereunder shall be governed by, and shall be construed and enforced in
accordance with, the internal laws of the State of New York, without regard to
conflicts of laws principles that would require the application of another law.
[Remainder of page intentionally left blank.]
XIII-3 Collateral Access Agreement
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed and delivered as of the day and year first set forth above.
[NAME OF REAL PROPERTY HOLDER]
By: ___________________________________
Name:
Title:
XIII-S-1 Collateral Access Agreement
By its acceptance hereof, as of the day and year first set forth above,
Collateral Agent agrees to be bound by the provisions hereof.
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Collateral Agent
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
Address: ______________________________
______________________________
______________________________
Facsimile Number: _____________________
XIII-S-2 Collateral Access Agreement
EXHIBIT A
LEGAL DESCRIPTION OF PREMISES
XIII-A-1 Collateral Access Agreement
EXHIBIT B
DESCRIPTION OF [LEASE][ MORTGAGE]
XIII-B-1 Collateral Access Agreement
EXHIBIT C
DESCRIPTION OF PREPETITION DEFAULTS
EXHIBIT D
NOTICES OF DEFAULT
EXHIBIT XIV
[FORM OF] COVENANT ADDENDUM
This Covenant Addendum (this "COVENANT ADDENDUM") is the Covenant
Addendum referenced in the Debtor-In-Possession Credit Agreement dated as of
October [__], 2004, among Intermet Corporation (the "COMPANY"), each of the
Company's Subsidiaries listed on the signature pages thereof, the financial
institutions listed on the signature pages thereof, Deutsche Bank Trust Company
Americas, as co-agent and collateral agent, and The Bank of Nova Scotia, as
administrative agent (the "CREDIT AGREEMENT"). All terms used herein and not
otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement.
I. MINIMUM CUMULATIVE MONTHLY EBITDA.
MINIMUM CUMULATIVE
MONTH CONSOLIDATED EBITDA
- ---------------- -------------------
October 2004
November 2004
December 2004
January 2005
February 2005
March 2005
April 2005
May 2005
June 2005
July 2005
August 2005
September 2005
October 2005
II. CONSOLIDATED CAPITAL EXPENDITURES.
MAXIMUM CONSOLIDATED
MONTH CAPITAL EXPENDITURES
- --------------- --------------------
October 2004
November 2004
December 2004
January 2005
February 2005
March 2005
April 2005
May 2005
June 2005
July 2005
August 2005
September 2005
October 2005
III. EXTRAORDINARY EXPENSES TO BE ADDED BACK TO CALCULATING CONSOLIDATED NET
INCOME IN CONSOLIDATED EBITDA.
Description of Expense Period Limitations
- ---------------------- ------ -----------
[Remainder of page intentionally left blank]
This Covenant Addendum is accepted in accordance with subsection
6.1(xvii) of the Credit Agreement.
DEUTSCHE BANK TRUST
COMPANY AMERICAS,
as Lead Lender
By: ____________________________________
Name: Frank Fazio
Title: Director
THE BANK OF NOVA SCOTIA,
as Lead Lender
By: ____________________________________
Name: D.N. Gillespie
Title: Managing Director
SCHEDULE 1.1B
BUDGET
INTERMET CORPORATION 1 2 3 4 5 6
CONSOLIDATED
DIP BUDGET
10/29/04 11/5/04 11/12/04 11/19/04 11/26/04 12/3/04
-------- ------- -------- -------- -------- -------
MEMO: SALES
Sales (non-tooling) 13,629 13,492 13,366 13,643 9,355 12,319
Less: Intercompany (308) (303) (307) (303) (242) (302)
Tooling 665 25 25 150 369 26
-------- ------- -------- -------- -------- -------
Total Sales 13,986 13,214 13,084 13,490 9,482 12,043
CASH RECEIPTS:
Account Receivable Collections 9,027 13,525 11,524 14,456 23,136 14,148
Tooling Collections 536 68 100 117 303 100
Misc. Cash Receipts 12 9 17 27 - 1,682
-------- ------- -------- -------- -------- -------
Total Cash Receipts 9,575 13,602 11,641 14,600 23,439 15,930
DISBURSEMENTS:
Accounts Payable Disbursements:
Materials (incl PPV) and freight 5,115 6,602 5,260 4,984 4,856 5,796
Utilities (including Melt
Utilities) 2,132 1,081 1,951 640 406 339
Repairs & maintenance 388 328 326 347 294 394
Supplies 474 478 438 451 413 479
Purchased components 303 367 344 331 327 384
Purchased services 673 630 610 582 549 513
Tooling payments (Pattern costs) 77 114 32 37 27 65
MIS (outside services) 7 4 11 4 - 8
Travel & entertainment 8 10 59 10 9 10
Capital expenditures 194 60 120 60 30 90
Commissions - 17 38 135 29 -
Rent & lease payments 252 117 19 162 92 156
Property/sales taxes - 130 - 68 405 -
All other (excluding Intercompany) 1,330 2,093 1,275 1,279 1,112 4,008
-------- ------- -------- -------- -------- -------
Total A/P Disbursements 10,953 12,031 10,483 9,090 8,549 12,243
Payroll Disbursements:
Direct labor (hourly) 1,094 1,043 1,041 1,035 1,050 985
Indirect labor (hourly) 961 925 927 919 947 896
Salaries 300 1,648 148 354 547 2,498
Overtime premium (total) 112 123 111 124 108 110
Benefits (paid at plant) 1,376 947 1,289 965 1,291 989
All other -
-------- ------- -------- -------- -------- -------
Total Payroll Disbursements 3,842 4,684 3,515 3,396 3,943 5,478
Other Disbursements
Interest & Fees 775 1,024 - - - 1,001
Principal - - - - - -
Professional Fees 996 - - - 2,229 -
Pension - - - - - -
-------- ------- -------- -------- -------- -------
Total Other Disbursements 1,771 1,024 - - 2,229 1,001
-------- ------- -------- -------- -------- -------
TOTAL DISBURSEMENTS 16,566 17,740 13,999 12,486 14,720 18,721
-------- ------- -------- -------- -------- -------
INCREASE/(DECREASE) IN CASH (6,991) (4,138) (2,357) 2,114 8,719 (2,791)
======== ======= ======== ======== ======== =======
TOTAL DIP BALANCE (6,991) (11,129) (13,486) (11,372) (2,653) (5,445)
INTERMET CORPORATION 7 8 9 10
CONSOLIDATED
DIP BUDGET
12/10/04 12/17/01 12/24/04 12/31/04 TOTAL
-------- -------- -------- -------- -------
MEMO: SALES
Sales (non-tooling) 12,187 12,113 8,352 6,321 114,777
Less: Intercompany (428) (304) (359) (181) (3,037)
Tooling - - 45 418 1,723
-------- -------- ------- -------- -------
Total Sales 11,759 11,809 8,038 6,558 113,463
CASH RECEIPTS:
Account Receivable Collections 11,911 11,812 10,101 8,565 128,206
Tooling Collections - 516 - 114 1,854
Misc. Cash Receipts 9 28 - (131) 1,653
-------- -------- ------- -------- -------
Total Cash Receipts 11,920 12,356 10,101 8,548 131,713
DISBURSEMENTS:
Accounts Payable Disbursements:
Materials (incl PPV) and freight 4,489 4,333 4,426 4,511 50,373
Utilities (including Melt
Utilities) 1,594 997 342 272 9,754
Repairs & maintenance 352 393 309 378 3,509
Supplies 396 410 385 385 4,311
Purchased components 322 327 322 342 3,369
Purchased services 576 502 497 482 5,614
Tooling payments (Pattern costs) 119 22 24 24 541
MIS (outside services) 12 5 1 8 60
Travel & entertainment 57 11 7 5 187
Capital expenditures 30 60 60 60 764
Commissions 38 135 12 - 404
Rent & lease payments 73 68 247 19 1,205
Property/sales taxes - 72 1 50 726
All other (excluding Intercompany) 1,336 1,277 1,237 1,236 16,183
-------- -------- ------- -------- -------
Total A/P Disbursements 9,395 8,613 7,871 7,773 97,000
Payroll Disbursements:
Direct labor (hourly) 1,012 1,012 1,013 927 10,212
Indirect labor (hourly) 904 904 916 827 9,126
Salaries 25 477 25 3,020 9,042
Overtime premium (total) 102 111 100 105 1,105
Benefits (paid at plant) 1,250 912 1,306 997 11,319
All other -
-------- -------- ------- -------- -------
Total Payroll Disbursements 3,293 3,416 3,360 5,876 40,803
Other Disbursements
Interest & Fees - - - 1,325 4,125
Principal - - - - -
Professional Fees - - - 2,229 5,453
Pension - - - - -
-------- -------- ------- -------- -------
Total Other Disbursements - - - 3,554 9,578
-------- -------- ------- -------- -------
TOTAL DISBURSEMENTS 12,688 12,028 11,231 17,202 147,381
-------- -------- ------- -------- -------
INCREASE/(DECREASE) IN CASH (768) 328 (1,130) (8,654) (15,668)
======== ======== ======= ======== =======
TOTAL DIP BALANCE (6,212) (5,885) (7,014) (15,668)
3
SCHEDULE 1.1C
SPECIFIED ACCOUNT DEBTORS
American Axle & Manufacturing
DaimlerChrysler
Delphi
Ford
GM
Metaldyne
PBR
SMW
TRW
Visteon
4
SCHEDULE 2.1
LENDERS' COMMITMENTS AND PRO RATA SHARES
2.1A(i) - CLOSING DATE COMMITMENTS AND PRO RATA SHARES
Loan
Lender Commitment Pro Rata Share
------ ------------ --------------
Deutsche Bank Trust Company Americas $ 20,000,000 100%
The Bank of Nova Scotia $ 0 0%
TOTAL $ 20,000,000 100%
2.1A(ii)(a) - INCREMENTAL COMMITMENTS AS OF THE SUBSEQUENT FUNDING DATE
Incremental
Lender Commitment
------ ------------
The Bank of Nova Scotia $ 35,690,411
TOTAL $ 35,690,411
2.1A(ii)(b) - INCREMENTAL COMMITMENTS AS OF THE INCREMENTAL COMMITMENT EFFECTIVE
DATE
Incremental
Lender Commitment
------ ------------
Deutsche Bank Trust Company Americas $ 4,309,589
TOTAL $ 4,309,589
SCHEDULE 2.5A
PERMITTED USE OF PROCEEDS
See Budget attached as Schedule 1.1B
SCHEDULE 4.1J
CASH MANAGEMENT SYSTEM
See Attached
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
In re: )
) Case No.
INTERMET CORPORATION ) Chapter 11
)
Debtor. ) Honorable
- --------------------------------------------------------------------------------
In re: )
) Case No.
ALEXANDER CITY CASTING ) Chapter 11
COMPANY, INC. )
)
Debtor. ) Honorable
- --------------------------------------------------------------------------------
In re: )
) Case No.
CAST-MATIC CORPORATION ) Chapter 11
)
Debtor. ) Honorable
- --------------------------------------------------------------------------------
In re: )
) Case No.
COLUMBUS FOUNDRY, L.P. ) Chapter 11
)
Debtor. ) Honorable
- --------------------------------------------------------------------------------
In re: )
) Case No.
DIVERSIFIED DIEMAKERS, INC. ) Chapter 11
)
Debtor. ) Honorable
- --------------------------------------------------------------------------------
In re: )
) Case No.
GANTON TECHNOLOGIES INC. ) Chapter 11
)
Debtor. ) Honorable
- --------------------------------------------------------------------------------
MOTION FOR CONTINUED USE OF
BANK ACCOUNTS AND CASH
MANAGEMENT SYSTEM
In re: )
) Case No.
INTERMET HOLDING COMPANY ) Chapter 11
)
Debtor. ) Honorable
- --------------------------------------------------------------------------------
In re: )
) Case No.
INTERMET ILLINOIS, INC. ) Chapter 11
)
Debtor. ) Honorable
- --------------------------------------------------------------------------------
In re: )
) Case No.
INTERMET INTERNATIONAL, INC. ) Chapter 11
)
Debtor. ) Honorable
- --------------------------------------------------------------------------------
In re: )
) Case No.
INTERMET U.S. HOLDING, INC. ) Chapter 11
)
Debtor. ) Honorable
- --------------------------------------------------------------------------------
In re: )
) Case No.
IRONTON IRON, INC. ) Chapter 11
)
Debtor. ) Honorable
- --------------------------------------------------------------------------------
In re: )
) Case No.
LYNCHBURG FOUNDRY COMPANY ) Chapter 11
)
Debtor. ) Honorable
- --------------------------------------------------------------------------------
2
In re: )
) Case No.
NORTHERN CASTINGS CORPORATION ) Chapter 11
)
Debtor. ) Honorable
- --------------------------------------------------------------------------------
In re: )
) Case No.
SUDBURY, INC. ) Chapter 11
)
Debtor. ) Honorable
- --------------------------------------------------------------------------------
In re: )
) Case No.
SUDM, INC. ) Chapter 11
)
Debtor. ) Honorable
- --------------------------------------------------------------------------------
In re: )
) Case No.
TOOL PRODUCTS, INC. ) Chapter 11
)
Debtor. ) Honorable
- --------------------------------------------------------------------------------
In re: )
) Case No.
WAGNER CASTINGS COMPANY ) Chapter 11
)
Debtor. ) Honorable
- --------------------------------------------------------------------------------
In re: )
) Case No.
WAGNER HAVANA, INC. ) Chapter 11
)
Debtor. ) Honorable
- --------------------------------------------------------------------------------
3
DEBTORS' MOTION FOR ORDER (I) AUTHORIZING CONTINUED USE OF
EXISTING (A) BANK ACCOUNTS, (B) BUSINESS FORMS AND CHECKS, AND (C)
CASH MANAGEMENT SYSTEM; (II) AUTHORIZING THE CONTINUATION OF
INTERCOMPANY TRANSACTIONS AND ACCORDING ADMINISTRATIVE
EXPENSE STATUS TO CLAIMS FOR SUCH TRANSACTIONS; AND (III) WAIVING
THE INVESTMENT AND DEPOSIT REQUIREMENTS OF SECTION 345(b) OF THE
BANKRUPTCY CODE
The Debtors,(1) by and through their attorneys, Foley & Lardner LLP,
hereby submit the Debtors' Motion For Order (I) Authorizing Continued Use Of
Existing (A) Bank Accounts, (B) Business Forms And Checks, And (C) Cash
Management System; (II) Authorizing The Continuation Of Intercompany
Transactions And According Administrative Expense Status To Claim For Such
Transactions; And (III) Waiving The Investment And Deposit Requirements Of
Section 345(b) Of The Bankruptcy Code (this "Motion"). In support of this
Motion, the Debtors rely on the Declaration Of Robert Belts In Support Of
Chapter 11 Petitions And First Day Orders sworn to on September 29, 2004 (the
"Declaration"). In further support of this Motion, the Debtors represent as
follows:
BACKGROUND
A. THE CHAPTER 11 FILING
1. On September 29, 2004 (the "Petition Date") the Debtors filed
voluntary petitions in this Court for relief under chapter 11 of title 11 of the
United States Code, 11 U.S.C. Sections 101-1330, as amended (the "Bankruptcy
Code").
2. The Debtors continue to manage and operate their businesses as
debtors-in-possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code.
- ----------------
(1) The Debtors are Intermet Corporation, Alexander City Casting
Company, Inc., Cast-Matic Corporation, Columbus Foundry, L.P., Diversified
Diemakers, Inc., Ganton Technologies, Inc., Intermet Holding Company, Intermet
Illinois, Inc., Intermet International, Inc., Intermet U.S. Holding, Inc.,
Ironton Iron, Inc., Lynchburg Foundry Company, Northern Castings Corporation,
Sudbury, Inc., SUDM, Inc., Tool Products, Inc., Wagner Castings Company, and
Wagner Havana, Inc., as debtors and debtors-in-possession.
4
3. The Debtors have filed a motion requesting joint administration of
the Debtors' chapter 11 cases.
4. No trustee or examiner has been appointed and no committees have
been appointed or designated in the Debtors' chapter 11 cases.
5. The Court has jurisdiction over this Motion pursuant to 28 U.S.C.
Sections 157 and 1334. Venue is proper pursuant to 28 U.S.C. Sections 1408 and
1409. This is a core proceeding pursuant to 28 U.S.C. Section 157(b)(2).
6. The statutory predicates for the relief requested herein are
Sections 105(a) and 345 of the Bankruptcy Code.
B. THE DEBTORS' BUSINESS OPERATIONS
7. The Debtors, together with their direct and indirect subsidiaries
and affiliates (collectively, "Intermet"), constitute one of the largest
independent producers of ductile iron, aluminum, magnesium and zinc castings in
the world. Intermet also provides machining and tooling services and products
related to its casting business, along with a range of other products and
services for the automotive and industrial markets. Intermet specializes in the
design and manufacture of highly engineered, cast automotive components for the
global light truck, passenger car, light vehicle and heavy-duty vehicle markets.
For the fiscal year ended December 31, 2003, Intermet had sales from continuing
operations of approximately $731 million.
8. Intermet directly and indirectly provides products and services to
every major North American automotive original equipment manufacturer ("OEM"),
several major European and Japanese OEMs, and several leading suppliers to the
OEMs (also known as "Tier 1" or "Tier 2" suppliers).
5
9. Intermet directly or indirectly operates 18 manufacturing facilities
in the United States, Germany and Portugal. Intermet's principal executive
offices are located in Troy, Michigan. As of the Petition Date, Intermet
employed, directly or indirectly, approximately 5,400 people worldwide,
including approximately 4,200 employees in the United States.
C. THE DEBTORS' FINANCING ARRANGEMENTS
10. Prior to the Petition Date, the Debtors' operations were financed,
in part, by a senior credit facility (the "Prepetition Credit Facility"), in
which approximately 20 lenders (the "Prepetition Lenders") participate (whether
pursuant to direct agreements or instruments with the Debtors, or through
participation with the lenders in contractual privity with the Debtors), and for
which the Bank of Nova Scotia is the Administrative Agent (the "Agent"). The
Prepetition Credit Facility consists of a $90 million revolving credit line and
a $120 million term loan. The Debtors have borrowed approximately $41 million
under the aforementioned revolver. In addition, the Debtors have approximately
$27 million of principal and interest outstanding under letters of credit issued
under the aforementioned revolving credit line. Intermet Corporation is the
principal obligor under the Prepetition Credit Facility. The remaining Debtors
are joint and several guarantors of the obligations under the Prepetition Credit
Facility, which is secured by certain of the Debtors' United States domestic
assets and pledges of 65% of the stock of certain of the Debtors' foreign
subsidiaries.
11. The Debtors are also parties to a $35.6 million Letter of Credit
Facility Agreement dated January 8, 2004. $35.6 million of principal and
interest is outstanding under the letter of credit issued pursuant to the
foregoing Letter of Credit Facility Agreement (the "Georgia LC"). The Georgia LC
is secured solely by an account of the Debtors holding $35.6 million of the
Debtors' funds. The Georgia LC does not secure the Prepetition Credit Facility.
6
12. The Debtors have also used the capital markets to finance their
operations and have indebtedness under a series of unsecured notes issued on
June 13, 2002 (the "Senior Notes")(2), in the aggregate outstanding amount of
principal and interest of approximately $175 million. U.S. Bank National
Association (the "Indenture Trustee") is the trustee under the indenture for the
Senior Notes. A default under the Senior Notes constitutes a default under the
Prepetition Credit Facility, and the acceleration of indebtedness under the
Prepetition Credit Facility would constitute a default under the Senior Notes.
13. In addition, one of the Debtors, Columbus Foundry, L.P., has
obligations relating to indebtedness under variable rate limited obligation
revenue bonds in the approximate outstanding principal amount of $35 million,
which are secured by the Georgia LC. Another of the Debtors, Lynchburg Foundry
Company, has approximately $2 million outstanding under industrial development
revenue bonds in favor of SunTrust Bank as trustee, which are secured by letters
of credit.
14. Furthermore, as part of an asset purchase transaction, the Debtor
entity now known as Tool Products, Inc. assumed obligations relating to certain
industrial development revenue bond debt in favor of U.S. Bank, NA as trustee,
of which approximately $1.5 million in principal and interest is outstanding.
15. As of the Petition Date, the Debtors had trade debt in the
approximate amount of $56 million.
D. EVENTS LEADING TO THE CHAPTER 11 FILINGS
16. The primary contributors to the Debtors' bankruptcy filings are
substantial increases in costs of raw materials used by the Debtors, especially
unprecedented increases in
- -----------------
(2) The only Debtors that are not obligors or guarantors of the Senior
Notes are Intermet Holding Company and Intermet International, Inc.
7
prices for steel scrap, which the Debtors use extensively in their businesses.
The Debtors have also experienced operational issues at certain of their
light-metals plants, which have had a negative impact upon their recent
performance. In addition, the Debtors recently incurred substantial costs in
closing their Havana, Illinois foundry.
17. The foregoing issues combined to put significant financial strains
upon the Debtors such that the Debtors' ability to draw on the revolver portion
of the Prepetition Credit Facility became impaired. As a result, the Debtors
sought a waiver of certain conditions to receiving additional funds from the
Prepetition Lenders. The Debtors were unable to obtain such a waiver in order to
obtain additional funds under the Prepetition Credit Facility, which
necessitated the Debtors' bankruptcy filings.
E. OBJECTIVES OF THE CHAPTER 11 FILING AND RESTRUCTURING INITIATIVES
18. The Debtors intend to maximize the benefits of their restructuring
in these cases by extensively reviewing all aspects of their businesses for
opportunities to improve performance. Among other things, the Debtors will seek
to restructure their secured and unsecured debt, rationalize their costs
(including labor costs and facility costs) and their manufacturing capacity with
their business needs, effect a customer strategy focused upon scrap steel
recovery and other commercial and financial issues, reject onerous contracts and
explore refinancing and equity investment opportunities.
DESCRIPTION OF CASH MANAGEMENT SYSTEM AND BANK ACCOUNTS
19. The Debtors utilize a highly sophisticated and multi-layered cash
management system to collect, transfer and disburse funds generated by the
Debtors' operations and to record accurately all such funds transactions as they
are made, as described herein (the "Cash Management System").
8
20. The Debtors(3) rely primarily on accounts at Standard Federal Bank
N.A. ("Standard Federal") and Comerica Bank ("Comerica"). Accounts at these two
banks are used for substantially all the Debtors' payables, including payroll
for salaried and hourly employees. In addition, Standard Federal and Comerica
maintain lockbox deposit accounts to which customers remit payment to the
Debtors. The Debtors also use accounts at Bank One, N.A. ("Bank One") for
accounts payable, hourly payroll and benefits disbursements for several of their
operating entities. Bank One also has lockbox deposit accounts which receive
payments from the Debtors' customers. The Debtors also maintain one deposit
account at each of Bank of America NA ("Bank of America"), LaSalle Bank
("LaSalle") and U.S. Bank NA ("U.S. Bank"), to collect funds from customers of
certain of the Debtors' facilities.
21. Cash used to fund the Debtors' operating expenditures comes, in
large part, from the daily collection of accounts receivable. Receivables from
third parties are primarily checks and electronic transfers deposited in the
Debtors' various lockbox deposit accounts.
22. Standard Federal maintains nine lockbox deposit accounts that
receive customer payments (the "Standard Federal Lockbox Accounts"). Each day,
the funds deposited into the Standard Federal Lockbox Accounts are swept into a
master concentration account that the Debtors maintain at Standard Federal (the
"Standard Federal Concentration Account"). The Debtors also maintain at Standard
Federal an accounts payable account, salary payroll account, and hourly payroll
account for each of their eight ferrous metal operating entities, as well as
separate accounts payable, hourly payroll, and salary payroll accounts for
Intermet Corporation (the "Standard Federal Disbursement Accounts"). Electronic
debits and credits and paper checks are transacted from the Standard Federal
Disbursement Accounts. Disbursements from the
- -------------------
(3) The particular Debtors that hold each of the Debtors' Bank Accounts
(as defined below) are set forth on Exhibit B on the line describing each such
account.
9
Standard Federal Disbursement Accounts are funded daily from the collections
that are received into the Standard Federal Lockbox Accounts through
disbursements from the Standard Federal Concentration Account.
23. Comerica maintains six lockbox deposit accounts that also collect
customer payments (the "Comerica Lockbox Accounts"). On a daily basis, the funds
deposited into the Comerica Lockbox Accounts flow into a master concentration
account that the Debtors maintain at Comerica (the "Comerica Concentration
Account"). The Debtors also maintain at Comerica Bank an accounts payable
account, salary payroll account, and hourly payroll account for each of their
six light metals operating entities, as well as a separate account for the
payment of employee benefits (the "Comerica Disbursement Accounts"). Electronic
debits and credits and paper checks are transacted from the Comerica
Disbursement Accounts. The disbursements from the Comerica Disbursement Accounts
are funded daily from the collections that are received into the Comerica
Lockbox Accounts, through disbursements from the Comercia Concentration Account.
24. The Debtors also maintain at Bank One nine lockbox deposit accounts
that collect customer payments (the "Bank One Lockbox Accounts"). Each day, the
funds deposited into the Bank One Lockbox Accounts flow into a master
concentration account that the Debtors maintain at Bank One (the "Bank One
Concentration Account", and together with the Standard Federal Concentration
Account and the Comerica Concentration Account, the "Concentration Accounts").
The Debtors also maintain at Bank One an accounts payable account, an hourly
payroll account and three accounts for the payment of employee benefits (the
"Bank One Disbursement Accounts", and together with the Standard Federal
Disbursement Accounts and the Comerica Disbursement Accounts, the "Disbursement
Accounts"). Electronic debits and
10
credits as well as paper checks are transacted from the Bank One Disbursement
Accounts. The disbursements from the Bank One Disbursement Accounts are funded
daily from the collections that are received into the Bank One Lockbox Accounts.
25. The Debtors also maintain a lockbox deposit account at LaSalle (the
"LaSalle Lockbox Account", and together with the Standard Federal Lockbox
Accounts, the Comerica Lockbox Accounts and the Bank One Lockbox Accounts, the
"Lockbox Accounts"). The LaSalle Lockbox Account receives payments from certain
of the Debtors' customers. Funds deposited by customers into this account are
automatically transferred the following day into the Bank One Concentration
Account.
26. The Debtors further maintain a deposit account at Bank of America
(the "Bank of America Deposit Account"), to which certain customers of the
Debtors remit payments. As customers deposit money into the Bank of America
Deposit Account, an automatic transfer of these funds is made the following day
into the Bank One Concentration Account.
27. The Debtors also maintain a deposit account at U.S. Bank (the "U.S.
Bank Deposit Account"), which is used to receive funds from certain customers.
Funds deposited by customers into the Bank of America Deposit Account are
automatically transferred the following day into the Bank One Concentration
Account.
28. Finally, the Debtors also maintain a deposit account at SunTrust
Bank (the "SunTrust Deposit Account", and together with the U.S. Bank Deposit
Account, and the Bank of America Deposit Account, the "Non-Lockbox Deposit
Accounts"), which is primarily used to make interest payments on one of the
Debtors' series of industrial revenue bonds and to pay dividends.
11
29. Funds borrowed from the Prepetition Lenders under the Prepetition
Credit Facility are deposited into the Bank One Concentration Account. Payments
towards obligations under the Prepetition Credit Facility or the Senior Notes
are paid directly from the Bank One Concentration Account.
30. The funds in the Concentration Accounts are used to fund the
Debtors' operational needs, through the Disbursement Accounts and the SunTrust
Deposit Account, and to repay indebtedness. Generally, excess funds in the
Concentration Accounts, after payment of accounts payable and other ordinary
course of business obligations, are used to pay down debt as opposed to being
invested.
31. Monies are transferred from the Concentration Accounts to the
Disbursement Accounts as needed to fund expenditures from such accounts (e.g.,
payables, payroll, employee benefits, etc.).
32. Each of the Concentration Accounts, the Lockbox Accounts, the
Non-Lockbox Deposit Accounts and the Disbursement Accounts are more specifically
described and listed on attached Exhibit B and such accounts are collectively
referred to hereinafter as the "Debtors' Bank Accounts."
33. The collection and use of all funds of the Debtors through the
Debtors' Bank Accounts are recorded in general ledgers and through intercompany
accounts, such that all payables, receivables and intercompany balances, if any,
are appropriately allocated.
12
RELIEF REQUESTED
A. REQUEST FOR AUTHORITY TO MAINTAIN THE DEBTORS' EXISTING BANK ACCOUNTS
AND BUSINESS FORMS AND CHECKS
34. The United States Trustee for the District of Michigan has
established certain operating guidelines for debtors-in-possession in order to
supervise the administration of chapter 11 cases. These guidelines require
chapter 11 debtors to, among other things: (a) close all existing bank accounts;
(b) establish a new debtor-in-possession account for all estate monies required
for the payment of taxes, including payroll taxes; (c) establish a new
debtor-in-possession account for amounts required for payroll; (d) establish a
new general debtor-in-possession account for deposit of all revenues and income;
and (e) obtain checks for all debtor-in-possession accounts which bear the
designation "Debtor-In Possession" and the bankruptcy case number. The Debtors
seek authority to waive these requirements and to continue using their existing
bank accounts, business forms and checks. Absent such authority, the Debtors
submit that their business will suffer significant and unnecessary disruption.
35. As shown on Exhibit B and described above, in the ordinary course
of business, the Debtors use approximately 77 different bank accounts maintained
with 6 different financial institutions. The Debtors' Bank Accounts are part of
a carefully constructed and complex, automated Cash Management System, as
previously described, which ensures the Debtors' ability to monitor and control
all of their cash receipts and disbursements efficiently.
36. If the Debtors are forced to comply with the United States
Trustee's requirements, those requirements would cause enormous disruption in
the business of the Debtors and their affiliates and would impair the Debtors'
efforts to reorganize or pursue other alternatives to maximize the value of the
estate. Maintenance of the Debtors' Bank Accounts and the existing
13
Cash Management System would greatly facilitate the Debtors' transition to
post-petition operations, avoid delays in payments to administrative creditors
and employees, and ensure as smooth a transition into chapter 11 as possible
with minimal disruption.
37. The Debtors request that they be authorized to maintain and use the
Debtors' Bank Accounts in the same manner and with the same account numbers,
account names, styles, and document forms as those employed during the
pre-petition period.
38. To protect against inadvertent payment of prepetition claims, the
Debtors will immediately advise all banks maintaining the Debtors' Bank Accounts
not to honor checks issued prior to the Petition Date, except as otherwise
ordered by the Court.(4)
39. Bankruptcy courts have routinely permitted debtors to utilize their
prepetition bank accounts after the filing of their chapter 11 petitions. See,
e.g., In re Venture Holdings Company, LLC, Chapter 11 Case No. 03-48939 (TJT)
(Bankr. E.D. Mich. 2003); In re Pilot Industries Inc., Chapter 11 Case No.
01-64881 (SWR) (Bankr. E.D. Mich. 2001); In re National Century Financial
Enterprises, Inc., Chapter 11 Case No. 02-65235 (Bankr. S.D. Ohio 2002); In re
Federal-Mogul Global, Inc., Chapter 11 Case No. 01-10578 (Bankr. D. Del. 2001).
40. The Debtors also request that they be authorized to continue to use
all correspondence, business forms (including, but not limited to, letterhead,
purchase orders, and invoices) and checks existing immediately before the
Petition Date, without reference to the Debtors' status as
debtors-in-possession. Parties doing business with the Debtors undoubtedly will
be aware of the Debtors' status as debtors-in-possession as a result of the size
and publicity surrounding the cases, the press releases issued by the Debtors,
and other press coverage. Moreover, if the Debtors were required to change their
correspondence, business forms and
- -----------------
(4) For instance, contemporaneously with this Motion, the Debtors have
filed a motion requesting authority to pay certain prepetition obligations to
employees.
14
checks, they would be forced to choose standard forms rather than the current
forms with which the Debtors' employees, customers and vendors are familiar.
Such a change in operations would create a sense of disruption and potential
confusion within the Debtors' organization and confusion for the Debtors'
customers and vendors. The Debtors further believe that it would be extremely
costly and disruptive to cease using all existing forms and to purchase and
begin using new business forms and checks.
41. Courts in this district and other districts in major business cases
have routinely granted the same or similar relief as that sought by the Debtors.
See, e.g., In re Gold Standard Baking, Inc., 179 B.R. 98, 105-06 (Bankr. N.D.
Ill. 1995) (holding United States Trustee's requirement prohibiting issuance of
checks without "debtor-in-possession" designation to be unenforceable); In re
Johnson, 106 B.R. 623, 624 (Bankr. D. Neb. 1989) (debtors not required to obtain
new checks imprinted with "Debtors-in Possession" legend); see also, In re
Venture Holdings Company, LLC, Chapter 11 Case No. 03-48939 (TJT) (Bankr. E.D.
Mich. 2003); In re Pilot Industries Inc., Chapter 11 Case No. 01-64881 (SWR)
(Bankr. E.D. Mich. 2001).
B. REQUEST FOR AUTHORITY TO CONTINUE TO USE EXISTING CASH MANAGEMENT
SYSTEM
42. In order to ensure an orderly transition into chapter 11, the
Debtors also request authority to continue to use their existing Cash Management
System as it may be modified in connection with the Debtors' contemplated
debtor-in-possession financing, authority for which will be sought by separate
motion, or as required by the Debtors in the ordinary course of business.
43. The Cash Management System includes accounting controls needed to
enable the Debtors, as well as creditors and the Court, if necessary, to trace
funds through the system and ensure that all transactions are adequately
documented and readily ascertainable.
15
44. The Cash Management System incorporates ordinary, usual and
essential business practices similar to those used by other major corporate
enterprises. The Cash Management System provides significant benefits to the
Debtors, including the ability to control corporate funds centrally, segregate
cash flows, invest idle cash, ensure availability of funds when necessary, and
reduce administrative expenses by facilitating the movement of funds and the
development of timely and accurate balance and presentment information.
45. The operation of the Debtors' business requires that the Cash
Management System continue during the pendency of these chapter 11 cases.
Requiring the Debtors to adopt a new cash management system at this critical
stage of these cases would be expensive, would create unnecessary administrative
burdens and problems (including the possibility that transactions might not be
adequately documented), and would likely disrupt and adversely affect the
Debtors' ability to reorganize successfully. Indeed, requiring changes to the
Cash Management System could irreparably harm the Debtors, their estates and
their creditors by creating cash flow interruptions while systems were changed.
Maintenance of the existing Cash Management System therefore is in the best
interests of all creditors and other parties-in-interest.
46. Bankruptcy courts routinely grant chapter 11 debtors authority to
continue utilizing existing cash management systems and treat requests for such
authority as a "simple matter . . . ." In re Baldwin-United Corp., 79 B.R. 321,
327 (Bankr. S.D. Ohio 1987); See also In re Charter Co., 778 F.2d 617 (11th Cir.
1985). Courts in this district have permitted debtors to maintain their existing
cash management systems, as requested by the Debtors. See In re Venture Holdings
Company, LLC, Chapter 11 Case No. 03-48939 (TJT) (Bankr. E.D. Mich. 2003); In re
Pilot Industries Inc., Chapter 11 Case No. 01-64881 (SWR) (Bankr. E.D. Mich.
2001).
16
47. Courts have recognized that a centralized cash management system
"allows efficient utilization of cash resources and recognizes the
impracticalities of maintaining separate cash accounts for the many different
purposes that require cash." In re Columbia Gas Systems, Inc., 136 B.R. 930, 934
(Bankr. D. Del. 1993), aff'd in part and rev'd in part, 997 F.2d 1039 (3d Cir.
1993), cert. denied, sub nom., Official Comm. Of Unsecured Creditors v. Columbia
Gas Transmission Corp., 510 U.S. 1110 (1994). Similarly, courts have emphasized
that a requirement to maintain all accounts separately "would be a huge
administrative burden and economically inefficient." Columbia Gas, 997 F.2d at
1061; see also, In re Southmark Corp., 49 F.3d 1111, 1114 (5th Cir. 1995) (cash
management system allows debtor "to administer more efficiently and effectively
its financial operations and assets.").
C. REQUEST FOR AUTHORITY TO CONTINUE INTERCOMPANY TRANSACTIONS AMONG
DEBTORS AND FOR ALLOWANCE OF ADMINISTRATIVE EXPENSE STATUS FOR
INTERCOMPANY CLAIMS FOR SUCH TRANSACTIONS
48. The Debtors fund certain intercompany transactions involving
intercompany trade and intercompany capital needs of the Debtors (the
"Intercompany Transactions"). The Cash Management System relies upon
intercompany accounting and intercompany movement of funds amongst the Debtors.
As described above, cash collections generally flow to the Concentration
Accounts and the Debtors' disbursements are made through the Disbursement
Accounts. Each of the movements or payments (or establishment of the payables)
involving affiliated Debtor entities is recorded as an Intercompany Transaction
in the Debtors' books and records.
49. The Intercompany Transactions are an integral part of the Cash
Management System and critical to meeting liquidity and other needs within the
Debtors' organization. Because the Debtors are part of an integrated business,
the funds remain within the spectrum of the Debtors' control. Furthermore, the
Cash Management System allows for the accurate tracking and tracing of all
Intercompany Transactions.
17
50. The Debtors believe that the continuation of the Intercompany
Transactions is beneficial to their estates and creditors and, thus, that the
Intercompany Transactions should be permitted. Furthermore, the loss of
liquidity within the Debtors' organization provided by the Intercompany
Transactions would threaten the ability of the Debtors to reorganize
successfully. Accordingly, the Debtors submit that the continuation of the
Intercompany Transactions is in the best interests of the Debtors' estates and
creditors.
51. If the Court authorizes continuation of the Intercompany
Transactions, at any given time there may be balances due and owing from one
Debtor to another. These balances represent extensions of intercompany credit.
The Debtors have maintained and will continue to maintain records of such
transfers, including records of all current intercompany accounts receivable and
accounts payable.
52. To ensure that each individual Debtor will not, at the expense of
its creditors, fund the operations of another entity, the Debtors respectfully
request that, pursuant to Sections 364(b) and 503(b)(1) of the Bankruptcy Code,
all intercompany claims against a Debtor by another Debtor arising after the
Petition Date as a result of Intercompany Transactions (the "Intercompany
Claims") be accorded administrative expense priority status. If Intercompany
Claims are accorded such priority status, each entity utilizing funds flowing
through the Cash Management System should continue to bear ultimate payment
responsibility for such borrowings, thereby maximizing the protection to each
entity's creditors. Bankruptcy Courts in the Sixth Circuit and other
jurisdictions have allowed administrative expense priority status or
super-priority status to postpetition intercompany claims between affiliated
debtors in order to resolve concerns relating to the intercompany transfer of
funds. See, e.g., In re National Century
18
Financial Enterprises, Inc., Chapter 11 Case No. 02-65235 (Bankr. S.D. Ohio
2002); In re Federal-Mogul Global, Inc., Chapter 11 Case No. 01-10578 (Bankr. D.
Del. 2001).
D. REQUEST FOR WAIVER OF INVESTMENT AND DEPOSIT REQUIREMENTS OF SECTION
345(b)
53. The Debtors request that the Court relieve the Debtors of the
obligations of Section 345 of the Bankruptcy Code. Section 345(a) of the
Bankruptcy Code provides that a debtor-in-possession "may make such deposit or
investment of the money of the estate . . . as will yield the maximum reasonable
net return on such money, taking into account the safety of such deposit or
investment." 11 U.S.C. Section 345(a). Pursuant to Section 345(b), any deposit
or other investment made by a debtor, except those insured or guaranteed by the
United States or by a department, agency or instrumentality of the United States
or backed by the full faith and credit of the United States, must be secured by
a bond in favor of the United States or by the deposit of securities of the kind
specified in 31 U.S.C. Section 9303. 11 U.S.C. Section 345(b). Section 345(b)
further provides, however, that a bankruptcy court may relieve the Debtors of
the obligations of Section 345 for "cause." Id; see also In re Service
Merchandise Co., 240 B.R. 894, 896 (Bankr. M.D. Tenn. 1999).
54. In the Service Merchandise case, the court listed the following
factors as a guide for determining whether cause exists to waive the
requirements of Section 345(b):
a. The sophistication of the debtors' business;
b. The size of the debtors' business operations;
c. The amount of investments involved;
d. The bank ratings of the financial institutions where
the debtors' funds are held;
e. The complexity of the case;
f. The safeguards in place within the debtors' own
businesses for insuring the safety of the funds;
19
g. The debtors' ability to reorganize in the face of a
failure of one or more of the financial institutions;
h. The benefit to the debtors of allowing the existing
investment guidelines to control; and
i. The reasonableness of the debtor's request for relief
from the requirements of Section 345(b) in light of
the overall circumstances of the case.
Service Merchandise, 240 B.R. at 896. The Service Merchandise court concluded
that "cause" existed because the debtors were "large, sophisticated [companies]
with a complex cash management system," with the ability to shift money as
needed to insure the safety of their funds. Id. Moreover, the benefits to the
debtors of waiving the requirements of Section 345(b) far outweighed any
potential harm to their estates, and the failure to waive the requirements
"would needlessly handcuff these debtors' reorganization efforts." Id.
55. As in the Service Merchandise case, the Debtors are large,
sophisticated companies with a complex Cash Management System that provides the
Debtors with the ability to transfer funds rapidly to ensure their safety.
Furthermore, all of the banks and financial institutions with which the Debtors
do business are financially stable and insured by the FDIC, or comparable
governmental protections.
56. The Debtors do not typically invest excess funds, but rather use
such funds to pay down debt. Nonetheless, the Debtors might determine in the
future to make investments that do not strictly comply with each and every
approved investment practice as identified in Section 345 of the Bankruptcy
Code, but, in the Debtors' business judgment, are safe, prudent and designed to
yield the maximum reasonable net return on the funds invested taking into
account the safety of such investments.
57. In light of these factors, the Debtors believe that sufficient
cause exists under Section 345(b) of the Bankruptcy Code to allow the Debtors to
deviate from the investment
20
guidelines set forth therein. Bankruptcy courts inside and outside of this
district have routinely granted requests for approval of the continued use of
investment and deposit guidelines that do not comply strictly with Section 345
of the Bankruptcy Code, but that are nevertheless safe and prudent. See, e.g.,
In re Venture Holdings Company, LLC, Chapter 11 Case No. 03-48939 (TJT) (Bankr.
E.D. Mich. 2003); In re Federal-Mogul Global, Inc., Chapter 11 Case No. 01-10578
(Bankr. D. Del. 2001).
NOTICE
58. Notice of this Motion has been provided to: (a) the Office of the
United States Trustee for the Eastern District of Michigan; (b) counsel to the
Agent for the Prepetition Lenders; (c) the twenty largest unsecured creditors of
each Debtor; (d) the indenture trustees for the Senior Notes and the Debtors'
industrial revenue bonds; and (e) counsel to DaimlerChrysler Corporation,
General Motors Corporation, Ford Motor Company, Delphi Corporation and Metaldyne
Corporation. The Debtors submit that in light of the nature of the relief
requested, no further notice is required. This Motion has been submitted on an
expedited basis because of the numerous matters to be considered by the Court
during the initial period of these cases regarding the administration and the
postpetition operations of the Debtors.
21
WHEREFORE, the Debtors respectfully request entry of an order,
substantially in the form attached hereto as Exhibit A: (I) authorizing the
Debtors to continue to use (A) the Debtors' Bank Accounts, (B) the Debtors'
business forms and checks, and (C) the Cash Management System; (II) authorizing
the continuation of Intercompany Transactions and according administrative
expense priority status to the Intercompany Claims; (III) waiving the investment
and deposit requirements of Section 345(b) of the Bankruptcy Code; and (IV)
granting the Debtors such other relief as is just and proper.
Respectfully Submitted,
FOLEY & LARDNER LLP
/s JAS
----------------------------------
Judy A. O'Neill (P32142)
John A. Simon (P61866)
David G. Dragich (P63234)
150 W. Jefferson Ave., Suite 1000
Detroit, Michigan 48226
(313) 963-6200
Dated: September 29, 2004 Attorneys for the Debtors
22
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
In re: )
) Case No. 04-67597
INTERMET CORPORATION et al., ) Chapter 11
) (Jointly Administered)
)
Debtors. ) Honorable McIvor
- --------------------------------------------------------------------------------
ORDER GRANTING DEBTORS' MOTION FOR ORDER (I) AUTHORIZING
CONTINUED USE OF EXISTING (A) BANK ACCOUNTS, (B) BUSINESS FORMS AND
CHECKS, AND (C) CASH MANAGEMENT SYSTEM; (II) AUTHORIZING THE
CONTINUATION OF INTERCOMPANY TRANSACTIONS AND ACCORDING
ADMINISTRATIVE EXPENSE STATUS TO CLAIMS FOR SUCH TRANSACTIONS; AND
The Debtors(5) having filed the Debtors' Motion For Order (I)
Authorizing Continued Use Of Existing (A) Bank Accounts, (B) Business Forms And
Checks, and (C) Cash Management System; (II) Authorizing The Continuation Of
Intercompany Transactions And According Administrative Expense Status To Claims
For Such Transactions; And (III) Waiving The Investment And Deposit Requirements
Of Section 345(b) Of The Bankruptcy Code (the "Motion")(6); the Court having
reviewed the Motion and the Declaration Of Robert Belts In Support Of Chapter 11
Petitions And First Day Orders, sworn to on September 29, 2004; the Court
finding that (a) the Court has jurisdiction over this matter pursuant to 28
U.S.C. Sections 157 and 1334, (b) this is a core proceeding pursuant to 28
U.S.C. Section 157(b)(2), (c) notice of the
- ----------------
(5) The Debtors are Intermet Corporation, Alexander City Casting
Company, Inc., Cast-Matic Corporation, Columbus Foundry, L.P., Diversified
Diemakers, Inc., Ganton Technologies Inc., Intermet Holding Company, Intermet
Illinois, Inc., Intermet International, Inc., Intermet U.S. Holding, Inc.,
Ironton Iron, Inc., Lynchburg Foundry Company, Northern Castings Corporation,
Sudbury, Inc., SUDM, Inc., Tool Products, Inc., Wagner Castings Company and
Wagner Havana, Inc., as debtors and debtors-in-possession.
(6) Unless otherwise defined, capitalized terms used herein shall have
the meanings ascribed to them in the Motion.
Motion was sufficient under the circumstances, and (d) cause exists, within the
meaning of Section 345(b) of the Bankruptcy Code, to permit the Debtors to
invest and deposit funds in accordance with their business practices prior to
filing bankruptcy, and the Court having determined that the bases set forth in
the Motion establish just cause for the relief granted herein; it is hereby
ORDERED that the Motion is granted in its entirety; and it is further
ORDERED that the U. S. Trustee requirements that the Debtors close
existing bank accounts and open new "debtor-in-possession" accounts are hereby
waived; and it is further
ORDERED that the Debtors are authorized to maintain their existing bank
accounts, including the Debtors' Bank Accounts described on Exhibit B to the
Motion, in the same manner and with the same account numbers, styles and
document forms used during the pre-petition period, and to modify or close such
accounts, or open new accounts, as necessary to facilitate the operations of the
Debtors and their affiliates, including any accounts that may be required
pursuant to any post-petition financing order; and it is further
ORDERED that the Debtors are authorized to continue to use their
existing business and correspondence forms and checks in their existing form and
without the designation "Debtor-In-Possession" printed upon them or any other
alteration; and it is further
ORDERED that the Debtors are authorized to continue to use their Cash
Management System in the ordinary course of their businesses, including without
limitation its use for the management and use of cash, the payment of
intercompany and other payables, and the extension of intercompany credit; and
it is further
ORDERED that the Debtors are authorized to continue all Intercompany
Transactions in a manner consistent with the Debtors' prepetition practice; and
it is further
2
ORDERED that intercompany loans and other Intercompany Claims are
hereby granted administrative priority status pursuant to Sections 503(b)(1) and
507(a)(1) of the Bankruptcy Code; and it is further
ORDERED that the investment and deposit requirements of Section 345(b)
of the Bankruptcy Code are waived as they pertain to the Debtors.
Dated: Oct 01 2004 /s/ Marci B. McIvor
-------------------- ------------------------------
Detroit, Michigan UNITED STATES BANKRUPTCY JUDGE
A True Copy
Clerk, U.S. Bankruptcy Court
Eastern District of Michigan
By: /s/ Patricia O'Hara
Deputy Clerk
Date: Oct 01 2004
3
SCHEDULE 4.2H
FIXED ASSETS
See owned property listed on Schedule 5.5B
3
SCHEDULE 5.1
SUBSIDIARIES OF COMPANY; OWNERSHIP
Incorporation
or Place Ownership of
Name of Subsidiary of Organization Capital Stock
------------------ --------------- -------------
ACTIVE SUBSIDIARIES:
Lynchburg Foundry Company Virginia Intermet Corporation
Northern Castings Corporation Georgia Intermet Corporation
Intermet International, Inc. Georgia Intermet Corporation
Intermet U.S. Holding, Inc. Delaware Intermet International, Inc.
Intermet Netherlands, B.V. Netherlands Intermet International, Inc.
Intermet Holding, B.V. Netherlands Intermet European Foreign
Sales Holdings Corporation,
B.V.
SUDM, Inc. Michigan Intermet International, Inc.
Columbus Foundry, L.P. Delaware (SUDM, Inc. is the limited
partner, Intermet U.S. Holding,
Inc. is the general partner)
Alexander City Casting Company, Inc. Alabama Intermet Corporation
Tool Products, Inc. Delaware Intermet Corporation
Intermet Europe GmbH Germany Intermet Holding, B.V.
Intermet Services GmbH Germany Intermet Europe GmbH
Intermet Neunkirchen Foundry GmbH Germany Intermet Europe GmbH
Sudbury, Inc. Delaware Intermet Corporation
Cast-Matic Corporation Michigan Sudbury, Inc.
Intermet Illinois, Inc. Illinois Sudbury, Inc.
Wagner Castings Company Delaware Sudbury, Inc.
Wagner Havana, Inc. Delaware Wagner Castings Company
Intermet Holding Company Delaware Intermet International, Inc.
Intermet Foreign Sales Corporation Barbados Intermet Holding Company
Intermet International Business, Inc. Barbados Intermet Foreign Sales Corporation
4
Ironton Iron Inc. Ohio Intermet Corporation
Note: Ironton Iron Inc. has
outstanding approximately 12,750
shares of Series A Cumulative
Preferred Stock having a par value of
$200 per share. Annual dividends on
these shares are cumulative at $10 per
share. The shares were issued on
10/31/88. No dividends have been
paid.
Ganton Technologies Inc. Illinois Intermet Corporation
Diversified Diemakers, Inc. Delaware Intermet Corporation
Inter-Met Industrial de Mexico, S. de Mexico Intermet Corporation (95%)
R.L. de C.V. Intermet International, Inc. (5%)
Fundicao Nodular, SA Portugal Intermet Europe GmbH owns 75% of the
shares of Fundicao Nodular, SA
INACTIVE SUBSIDIARIES:
Transnational Indemnity Company Vermont Sudbury, Inc.
Western Capital Corporation Nebraska Sudbury, Inc.
Intermet European Foreign Sales Netherlands Intermet Netherlands, B.V.
Corporation, B.V.
Intermet Polska Sp. Z.o.o. Poland Intermet [Netherlands], B.V.
Confirm
Intermet Europe Verwaltungs Gmbh Germany Intermet Holding, B.V.
5
SCHEDULE 5.2
THIRD PARTY CONSENTS
Any consent required pursuant to the Prepetition Credit Facility
Any consent rendered unnecessary by the Interim Borrowing Order
6
SCHEDULE 5.2E
RESTRICTIONS ON TRANSFER
All restrictions contained in the Prepetition Senior Credit Facilities
All restrictions contained in the Indenture dated as of June 13, 2002.
7
SCHEDULE 5.3
FINANCIAL INFORMATION
The Borrowers' financial information can be found in the
audited financial statements included in Intermet Corporation's Annual Report on
Form 10-K filed with the SEC and in the unaudited financial statements included
in Intermet Corporation's Quarterly Reports on Form 10-Q filed with the SEC.
8
SCHEDULE 5.4
MATERIAL CHANGES
Intermet
Cash Requirements through December 31, 2004
Changed Estimates
Quarterly Increase
Net Tons Funding
Purchased Availability
--------- ------------
KNOWN INCREASES IN MATERIAL COSTS:
Scrap Steel
Increase from $400 to $435.42 per net ton at 10/1/04 35.42
Decrease in model from $400 to $380 per net ton by forecast 20.00
Increase in broker commision per net ton 5.77
Total steel scrap increase 61.19 70,000 4,283,300
Pig Iron
Increase by $167 ton for deliveries to Columbus and
Decatur - 700 tons per week 167.00 9,100 1,519,700
Magnesium
Excess cost of spot market buys vs. tolled material 700,000
Additional Iron-related Raw Materials & Other Costs
Management estimate based on prior quarter 600,000
TOTAL KNOWN INCREASES 7,103,000
OTHER
Operations, based on updated 4Q forecast 2,500,000
Launch costs - TRW 500,000
3,000,000
9
SCHEDULE 5.5B
REAL PROPERTY
Owned Properties:
Alexander City Casting Company, Inc. 620 Robinson Court
Alexander City, Alabama 35010
Intermet U.S. Holding, Inc. 6960 Jamesson Road
Midland, Georgia 31820
Wagner Havana, Inc. 227 Wagner Avenue
Havana, Illinois 62644-1723
Wagner Castings Company 825 N. Lowber Street
Decatur, Illinois 62521
Cast-Matic Corporation 2800 Yasdick Drive
Stevensville, Michigan 49127-1241
Northern Castings Corporation 555 W. 25th Street
Hibbing, Minnesota 55746
Tool Products, Inc. 5100 Boone Avenue North
New Hope, Minnesota 55428-4093
Diversified Diemakers, Inc. 4649 Route MM
Hannibal, Missouri 63401
Diversified Diemakers, Inc. 801 Second Street
Monroe City, Missouri 63456
Diversified Diemakers, Inc. 318 Winter Street
Monroe City, Missouri 63456
Diversified Diemakers, Inc. 212 South Main Street
Monroe City, Missouri 63456
Diversified Diemakers, Inc. 7063 Country Road 328
Palmyra, Missouri 63461
Ironton Iron Inc. 2520 S. 3rd St.
Ironton, Ohio
Ganton Technologies Inc. 450 Bennett Drive
Pulaski, Tennessee 38478
Intermet U.S. Holding, Inc. 1701 West Main Street
Radford, Virginia 24141-1221
Lynchburg Foundry Company 1605 West Main Street
Radford, Virginia 24141
Lynchburg Foundry Company Mt. Athos Road @ Route 450E
Lynchburg, Virginia 24504
10
Ganton Technologies Inc. 8213 Durand Avenue
Sturtevant, Wisconsin 53177 (Parcel E)
Ganton Technologies Inc. 2620 90th Street
Sturtevant, Wisconsin 53177
(Parcels A-D)
Ganton Technologies Inc. 217 Fay Avenue
Addison, Illinois
Real and personal property located at 825 Lower Brownsville Road Jackson,
Tennessee is occupied and used under leases from the Industrial Development
Board of the City of Jackson, Tennessee to Tool Products, Inc. in connection
with the January, 1989 issuance of $8 million in Industrial Development Revenue
Bonds and in connection with certain tax abatements. See also Schedule 7.1.
Certain real and personal property located in Columbus, Georgia has been leased
by Columbus Foundry, L.P from the Development Authority of Columbus, Georgia in
connection with the November, 1999 issuance of $35 million in Variable Rate
Limited Obligation Revenue Bonds (Columbus Foundry, L.P. Project), Series 1999A.
See also Schedule 7.1.
Intermet also leases the following real property:
Headquarters Office
5445 Corporate Drive
Troy, Michigan 48098
Technical Center
939 Airport Road
Lynchburg, Virginia 24502
Management Information Systems
1000 Brookstone Center Parkway
Columbus, Georgia 31904
Intermet Flight Operations
6340 Highland Road
Waterford, Michigan 48327
11
SCHEDULE 5.5C
INTELLECTUAL PROPERTY
In 1998 Intermet was notified by the Lemelson Medical, Education and Research
Foundation Limited Partnership (the "Lemelson Foundation") that the Lemelson
Foundation claimed that Intermet's operations infringed certain patents owned by
the Lemelson Foundation related to machine vision and bar coding technology. On
June 30, 2000 the Lemelson Foundation filed a lawsuit against Intermet and many
other defendants in the U.S. District Court for the District of Arizona alleging
infringement of the patents. The case has been stayed by the Court pending the
outcome of certain litigation pending in U.S District Court in Denver,
challenging the validity of the patents being pursued by manufacturers of bar
code and machine vision equipment.
FILE NO. FILING ISSUE/REGISTRATION
(65,278-) TYPE DATE DATE STATUS
- --------- -------------------------------------- -------- ------------------ -------------------
-001 U.S. Provisional Patent Application 09/04/02 N/A "MADI", expired
after one year,
utility filed based
off of provisional
-006 U.S. Utility Patent Application 09/04/03 None Yet "MADI", pending,
awaiting Office
Action
-007 PCT (International) Patent Application 08/29/03 N/A "MADI", pending,
awaiting Office
Action
-013 U.S. Utility Patent Application None Yet None Yet "AutoPour 6", draft
will be out to
inventor/client
early October,
application will be
filed this year
-002 PCPC Text Trademark 10/30/02 None Yet Already allowed,
awaiting necessary
use of mark by
INTERMET so
Statement of Use
can be filed
-004 Blue Sand Text Trademark 10/30/02 None Yet Already allowed,
awaiting necessary
use of mark by
INTERMET so
Statement of Use
can be filed
-009 INTERMET Text Service/Trademark 08/29/03 None Yet Published for
opposition, wating
for allowance
-011 Blue Sand Design Trademark 08/19/03 None Yet Already allowed,
awaiting necessary
use of mark by
INTERMET so
Statement of Use
can be filed
12
- -012 PCPC Design Trademark 08/19/03 None Yet Already allowed,
awaiting necessary
use of mark by
INTERMET so
Statement of Use
can be filed
- -016 Columbus Foundries Text Trademark 09/30/82 06/19/84 Abandoned
- -017 Columbus Foundries Design Trademark 08/19/83 10/24/84 Registered, next
renewal due
08/19/2013, but
will likely abandon
due to lack of use
- -018 CS (and Ladle Design) Trademark 12/16/83 12/11/84 Registered, next
renewal due
12/11/2004, but
will likely abandon
due to lack of use
- -019 Ladle Design Trademark 09/30/82 08/14/84 Abandoned
13
SCHEDULE 5.6
LITIGATION
Note: The following litigation or investigations involving Intermet or its
Subsidiaries are currently pending. Notwithstanding this disclosure, Intermet
does not believe that any of the listed actions, either individually or in the
aggregate, if determined adversely, are reasonably likely to have a Material
Adverse Effect. None of the listed actions pertain to the Credit Documents or
the transactions contemplated thereby.
See also Schedule 5.13
Various EEO charges brought by individual employees are pending at various
company locations.
Case Insurance/
Case/Claim Filing Date Type Deductible Status/Evaluation Reserve
Compass Bank v. Intermet 1/1700 Commercial No Open. Action by bank to recover
Corporation possession of machining center. Bank -0-
(File 00-53) alleges a lien that has priority over
Muscogee County, Georgia. purchaser (Columbus Machining).
Counsel: Rob Brand - Page,
Scrantom, Columbus.
Factory Mutual Insurance v. 8/12/03 Commercial No Open. Claim by subrogated insurer of
Intermet International, Inc., et al. American Axle for breach of contract -0-
(File 00-132) related to New River explosion.
WD Virginia Alleged damages of $2.5 million. In
Counsel: Tom Grossmann - Taft, discovery.
Stettinius & Hollister, Cincinnati
Kevin Blair- Woods, Rogers &
Hazelgrove, Roanoke.
Intermet v. American Axle, et al. -0-
(File 00-132) 10/22/03 Commercial No Open. Complaint for declaratory
Oakland County, Mi. judgment against American Axle and
Counsel: Tom Grossmann - Taft, Factory Mutual. Case stayed pending
Stettinius & Hollister, Cincinnati, outcome of the related Virginia case.
Pat McCarthy - Howard &
Howard, Detroit
Lemelson Foundation v. Butler Mfg., et 7/24/00 Commercial No Open. Claim for patent infringement of -0-
al. bar coding and machine vision patents.
(File 00-86) Case has been stayed pending outcome
D. Arizona. of litigation seeking to invalidate
Counsel: Cheryl Johnson - Squire, patents. District Court in Symbol
Sanders & Dempsey, Los litigation held on January 23, 2004 that
Angeles. patents are invalid and unenforceable.
Decision will be appealed.
Simpson v. Intermet and Ironton 3/7/00 Injury Yes Open. Wrongful death action by estate $194,528
Iron, Inc., et al, CMI $250,000 of employee killed in core machine. In
International, Inc. v. Ironton Iron, discovery. Crossclaim has been filed by
Inc. CMI. Motion for summary judgment
(File 99-106) filed. Settlement demand is $4.0
S. D. Ohio. million. Settled 9/17/04 for $1.4
Counsel: Larry Barty - Taft, million.
Stettinius & Hollister, Cincinnati,
Dave Alexander - Squire,
Sanders & Dempsey, Columbus
15
Ganton Technologies, Inc. v. 6/14/02 Commercial No Open. Complaint to vacate labor -0-
International Union, United arbitration award. Summary Judgment
Automobile, Aerospace and granted to union on 6/20/03. Affirmed
Agricultural Implement Workers by 7th Circuit. Union claims backpay
of America (UAW, Local 627 of $900,000 - $1.0 million resulting
(File 02-392) from prohibited outsourcing of tooling
E.D. Wisconsin work.
Counsel: Jack Pawley - Reinhart,
Boerner, Milwaukee,
Larry Lynch - Foley & Lardner, Milwaukee
Parrish, Inc. v. Intermet 10/24/02 Commercial No Open. Complaint to recover alleged -0-
Corporation transportation costs of $65,000 incurred
(File 02-440) by plaintiff trucking company.
St. Clair County, Illinois Transport of cores to Columbus
Counsel: Tim McCurdy - Foundry. In discovery.
Blackwell, Sanders, St. Louis
Spanhook v. Intermet Corporation 9/23/02 Injury Yes Open. Employee of contractor claims -0-
(File 02-445) $100,000 injury resulting from a fall on Decatur
Macon County, Illinois foundry premises on 10/12/2000. In
Counsel: Gary Schwab - Heyl, discovery.
Royster, Voelker & Allen,
Springfield
16
American Guarantee and Liability Commercial No Open. Subrogation claim filed by N/A
Company v. Illinois Power insurer arising out of fire at Decatur
Company Foundry. Settled in September, 2004.
(File 02-401) Recovery of $6,500.
Macon County, Illinois
Counsel: Mark Walton - Hunziker &
Walton, Peoria
Merchut v. Frisby P.M.C., Inc. 3/20/03 Employment No Open. Complaint alleging age and -0-
(File 03-507) national origin discrimination. In
N.D. Illinois discovery. Summary judgment filed.
Counsel: Bennett Epstein - Foley
& Lardner, Chicago
Ramos v. Intermet Corporation, et al. 8/18/03 Employment No Open. Sexual harassment at Hibbing -0-
(File 03-486) D. Minn. facility.
Counsel: John Birmingham -
Foley & Lardner, Detroit -
Dorsey & Whitney, Minneapolis.
Klee et al. v. Hawkeye-Security 9/9/03 Injury No Open. Injury case alleging subrogation N/A
Ins., et al. rights of Ganton Technologies. Amount
(File 03-572, 03-660) in question is less than $5,000.
Circuit Court, Racine County, Wi
Counsel: Kelli Tafora -Foley &
Lardner, Milwaukee
North American Royalties, et al. 11/3/03 Commercial No Open. Complaint to recover -0-
v. Ironton Iron, Inc. preferential transfer of $15,012.
(File 03-511)
Bankruptcy Court, ED Tennessee
Counsel: Dawn Copley -
Dickinson-Wright, Detroit
17
Moore, et al. v. Airco, Inc., et al. 10/22/03 Injury Yes Open. Complaint alleging injury due to -0-
(File 03-678) asbestos exposure. In discovery.
Fulton County, Ga. Unlikely that asbestos exposure was due
Counsel: Kay Deming - Troutman, Sanders, to Intermet products or operations.
Atlanta
Colopy, et al. v. Intermet 12/19/03 Discrimination No Open. Age discrimination complaint -0-
Corporation brought by two employees of Columbus
(File 04-681) Machining. Early stages of discovery.
M.D. Ga.
Counsel: Slayton Tuggle -
Kilpatrick, Stockton, Atlanta
Huffman v. Frisby P.M.C., 2/6/04 Wrongful No Open. Alleged wrongful termination. -0-
Incorporated, et al. termination Early stages, no discovery yet.
(File 03-546)
Cook County, Illinois
Counsel: Diane Gianos - Foley &
Lardner, Chicago
Hart v. Constitutional Casualty, et al. 2/20/04 Injury No Open. Injury case alleging subrogation N/A
(File 04-712) rights of Ganton Technologies. No
Circuit Court, Racine County, Wi defending as subrogated amount is
Counsel: Kelli Tafora -Foley & small and not worth legal costs.
Lardner, Milwaukee
Milivoj Teodorovic 6/14/04 Wrongful No Claim of wrongful termination. -0-
(File ) termination Investigating.
Claim only
18
UAW v. Cast-Matic Unfair Labor On appeal to NLRB from ALJ decision -0-
(File 03-515) Practice granting bargaining order. Arose from
Counsel: Valerie Speakman - charges unsuccessful UAW organizing
Jackson, Shields, Memphis campaign in early 2002.
UAW v. Cast-Mati Unfair Labor Unfair labor practice charges. Union -0-
(File 03-515) Practice alleges that approximately 10
Counsel: Valerie Speakman - charges employees have been discharged
Jackson, Shields, Memphis actually or constructively for union
activity. Hearing concluded 8/18/04.
Decision expected early 2005.
Edwards, et al. v. Air Products 9/8/04 Injury Yes Alleged esposure to benzene. -0-
and Chemicals, Inc., et al.
(File )
Madison County, Illinois
Counsel: Foley & Lardner,
Chicago
Johnson v. Air Products and Chemicals, 9/8/04 Injury Yes Alleged esposure to benzene. -0-
Inc., et al.
(File )
Madison County, Illinois
Counsel: Foley & Lardner,
Chicago
McDonald, et al. v. Air Products and 9/8/04 Injury Yes Alleged esposure to benzene. -0-
Chemicals, Inc., et al.
(File )
Madison County, Illinois
Counsel: Foley & Lardner,
Chicago
19
O'Brien, et al. v. Air Products and 9/8/04 Injury Yes Alleged esposure to benzene. -0-
Chemicals, Inc., et al.
(File )
Madison County, Illinois
Counsel: Foley & Lardner,
Chicago
Rose, et al. v. Air Products and 9/8/04 Injury Yes Alleged esposure to benzene. -0-
Chemicals, Inc., et al.
(File )
Madison County, Illinois
Counsel: Foley & Lardner,
Chicago
Financial Federal Credit, Inc. v. 8/26/04 Commercial No Alleged damages for quantum meriut, -0-
Intermet Corporation unjust enrichment etc. arising from use
(File ) of machining center at Columbus
ND Georgia Machining. Arises out of prior case
Counsel: Rob Brand - Page, awarding writ of possession.
Scrantom, Columbus.
New York Job Development 5/21/04 Commercial No Complaint to foreclose liens, including
Authority v. Leroy Industries, judgment lien filed in collection action
Inc., et al. against Leroy Industries.
(File )
Sulllivan Precision Components, 9/27/04 Commercial No Complaint for commissions payable to
Inc. v. Intermet Corporation manufacturer's representative.
(File )
Union County, New Jersey
20
SCHEDULE 5.8
MATERIAL CONTRACTS
See Exhibits to Borrowers' audited financial statements included in Intermet
Corporation's Annual Report on Form 10-K filed with the SEC and in the unaudited
financial statements included in Intermet Corporation's Quarterly Reports on
Form 10-Q filed with the SEC.
No material defaults exist other than those that may have been caused by the
Bankruptcy.
Borrower has contractual arrangements with its customers for the sale of
Borrower's products. Contract with customers are generally created and governed
by purchase orders issued by customers for specific parts. Many are subject to
the rights of customers to terminate.
Borrower has contractual arrangements with many of its suppliers for the
purchase of materials. Borrower's purchases of raw materials are generally done
through the issuance of purchase orders or the execution of contracts.
There is a Commercial Real Estate Sales Agreement dated June 1, 2004 between
Intermet U.S. Holding, Inc. and Jacoby Development, Inc. for the sale of land
and a building located in Muscogee County, Georgia. The facility is currently
occupied by Intermet Columbus Machining.
See Schedule 5.2E
See Schedule 5.17
SCHEDULE 5.11B
ERISA EVENT
The filing of the Chapter 11 Cases was a Reportable Event
The October 15 quarterly contribution for five defined benefit plans has been
deferred, giving rise to another Reportable Event
Future scheduled pension plan contributions may be further deferred during the
course of the Chapter 11 Cases.
22
SCHEDULE 5.11C
CERTAIN EMPLOYEE BENEFIT PLANS
Borrowers provide health care and life insurance benefits to certain retired
U.S. employees and their dependents. In 2003, eligibility requirements for
retiree health care for certain salaried employees were changed so that these
employees can become eligible for retiree health care benefits at age 62,
depending on years of service. Additionally, newly-hired employees will not be
eligible for retiree health care benefits. Certain salaried employees who
already have met eligibility requirements at age 55 or age 60, depending on
years of service, would continue to be eligible for retiree health care
benefits. Retirees and their dependents under age 65 receive substantially the
same health care benefits as active employees. The medical plans generally pay
most medical expenses less deductible and co-pay amounts. Salaried and hourly
employees also contribute to the cost of coverage. Certain salaried employee
coverage converts to a Medicare carve-out plan at age 65. Borrowers subsidize a
Medicare supplement plan for certain eligible salaried employees over age 65.
Most hourly employee coverage ceases at age 65. However, certain hourly
employees retain eligibility for coverage supplementing Medicare.
23
SCHEDULE 5.13
ENVIRONMENTAL MATTERS
1. Sudbury, Inc. and its subsidiary Western Capital sold substantially
all of the assets and business of Western's General Products Division in
December of 1989 and retained responsibility for certain environmental matters.
In connection with that sale, a Phase II environmental assessment of real
property located in Jackson, Michigan was undertaken. The assessment identified
certain soil and groundwater contamination as a result of historical practices.
A work plan addressing the contamination was developed, submitted to, and
approved by the Michigan Department of Environmental Quality. The work plan has
been implemented and a groundwater treatment system has been installed and is in
operation. The system is expected to continue to operate until a no further
action letter can be obtained.
2. At the Decatur, Illinois facility nine areas of petroleum based soil
contamination have been identified. Seven areas have been voluntarily addressed
with remediation activities. The remaining two areas are still undergoing
investigation; however, some free product has been identified. Free product is
being removed as an interim measure. Upon completion of the investigation, a
proposed corrective action plan will be submitted to the Illinois Environmental
Protection Agency (IEPA) for the remaining two areas. A Supplemental Subsurface
Investigation (SSI) Report, which contained the proposed correction action plan,
was submitted to IEPA. IEPA provided comments to the report. To address those
comments and to obtain a No Further Remediation (NFR) letter, a Site Remediation
Program Site Investigation Work Plan was submitted to the IEPA. This plan has
been approved by the IEPA.
3. Certain soil and groundwater contamination clean-up of chlorinated
volatile organic compounds ("vocs") is being required by the IEPA at the Havana,
Illinois facility. A soil vapor extraction system was installed in 1995. Based
on the sampling results the system ceased operation in 1998. Groundwater
monitoring has continued. Additional monitoring wells were installed and on-site
soil analyses were performed as directed by the IEPA in response to Intermet's
request for a no further action letter. The soil analyses resulted in the
remediation system being reactivated in November 2003. Nearby residential wells
have been impacted but are not being used for potable water. The facility will
continue to operate the remediation system until the IEPA approves the
discontinuation of the system. Monitoring of the groundwater will continue until
the IEPA issues a no further action letter.
4. Sudbury, Inc. formerly operated a facility known as the Clark Oil
property in St. Paul, Minnesota. A remediation system has been installed at the
site to address petroleum contamination. The system has been effective in
reducing petroleum contamination at the site. The Company has submitted and
received partial (75%) reimbursement of eligible costs associated with the
petroleum cleanup work from the Minnesota Petroleum Tank Cleanup Fund (the
"Petrofund"). In 2003, the Minnesota Pollution Control Agency (MPCA) requested
some additional cleanup actions (including installation of a new well) to
accelerate the pace of cleanup and hopefully bring the site to closure more
quickly. A workplan for the additional work has been submitted and approved. The
work is scheduled to be completed in late 2003 or
24
early 2004. It is anticipated that the costs for the additional work will also
be eligible for reimbursement from the Petrofund.
5. A site located in Philadelphia, Pennsylvania, Master Lubricants, was
previously operated as a lubricants blending and packaging facility by a
division of Western Capital, which was a subsidiary of Sudbury, Inc. In July
1992, substantially all of the assets of the division were sold. In 1995 and
1996, Sudbury removed aboveground storage tanks and piping at the site. At that
time, petroleum contamination was identified in the soil and groundwater and
reported to the State of Pennsylvania. A site investigation was completed and
the site was paved. A passive sump system was installed to remove petroleum from
the groundwater in the area of a former piping trench. A report was prepared and
submitted to the state recommending that no further action was required at the
site. No additional investigations or cleanup action, beyond the operation of
the passive recovery system, are contemplated. However it remains possible that
the state may require Intermet to undertake additional investigation and
remediation.
6. At Lynchburg Foundry Company's former Lower Basin site in Lynchburg,
Virginia, a former manufacturing site, Intermet is conducting monitoring and
remediation of petroleum hydrocarbons. The involved property was sold in 1997.
An underground storage tank located at this site was removed in 1992. Subsequent
regulatory requirements included passively monitoring certain hydrocarbon
contamination. This type of monitoring continued until 1998. In March of 1999,
the Virginia Department of Environmental Quality (VA DEQ) formally requested a
Corrective Action Plan (CAP) for the site. The CAP was submitted and approved by
the VA DEQ. A soil vapor extraction unit was installed and was operated until
October 2003. At that time the free product endpoint had been achieved and
maintained for twelve consecutive months per the CAP. Therefore, the operation
of the extraction unit was discontinued. A VA DEQ approved a monitoring well
abandonment plan and the site has been closed. A no further action letter has
been received.
7. Lynchburg Foundry Company is the operator and permittee of the
formerly utilized Florida Avenue landfill located in Lynchburg, Virginia. In
cooperation with the VA DEQ, Intermet has made certain improvements to manage
leachate from the landfill. The Company expects to continue collection and
disposal of leachate generated at this site for the foreseeable future.
8. Lynchburg Foundry Company is the operator and permittee of the
Falwell Aviation landfill located in Campbell County, Virginia, where leachate
issues are being addressed. A plan to replace a cap and address other leachate
issues was developed and submitted to the VA DEQ. The plan was approved and the
work has been completed. The last cell at the landfill has been filled and a
closure plan has been submitted to the VA DEQ for approval. Due to permitting
restrictions and development cost, the landfill will not be expanded. Monitoring
of groundwater has indicated potential groundwater contamination in the area. As
a result, groundwater protections standards (GPS) have been permitted for this
site. The groundwater continues to be monitored with respect to the established
GPS. The Company expects to continue collection and disposal of leachate
generated at this site for the foreseeable future. A revised closure plan has
been submitted to VA DEQ and the consultant is responding to the VA DEQ's
comments.
25
9. In 1989 Intermet's Radford, Virginia site removed four underground
storage tanks. Only one of the areas revealed any contamination. The monitoring
was done, as required by the VA DEQ, using a passive absorption process. In a
letter to the plant dated September 22, 1999 the VA DEQ requested a Corrective
Action Plan for the site. The plant is preparing to enter into the pilot study
phase of clean-up. The VA DEQ has approved the CAP and the remedial system was
installed and has been operational. Monitoring of the discharge from the system
and the groundwater continues.
10.Property located at 217 Fay Avenue in Addison, Illinois was acquired
by Ganton Technologies Inc. in 1986 from Quadion Corporation. Although a cleanup
of polychlorinated biphenyl ("PCB") contamination at the site was performed
prior to the sale, Ganton was informed 1987 that PCB contamination still existed
at the site. Ganton then filed a lawsuit against the seller and the consultants
who had been involved in the cleanup. That lawsuit was settled in 1987. Under
the terms of the settlement, the other parties agreed to contribute a total of
$3,300,000 to a settlement trust, and Quadion Corporation agreed to indemnify
Ganton for an additional $2,300,000 for the purpose of cleaning up and
remediating all PCB contamination at the site in accordance with applicable
regulatory standards. To the extent the cleanup cost exceeds the amount of the
settlement trust and indemnification, the excess will be the responsibility of
Ganton. Ganton is working with the Illinois Environmental Protection Agency to
determine the scope of the required remediation. Based upon reports from
Ganton's consultants, Ganton believes that the funds in the settlement trust and
indemnification will be adequate to fund the required remediation. The current
balances, net of spending and interest, is approximately $3.1 million in the
settlement and $2.1 million in the indemnity. IEPA has approved the remedial
plan. Negotiations with the contractor to perform the clean up work are
underway.
11.The United States Environmental Protection Agency (USEPA) has
requested that Intermet conduct an environmental investigation at its Radford
Foundry with respect to the USEPA RCRA Corrective Action Program. This
investigation will also include the adjacent New River Foundry. Intermet and
USEPA signed a RCRA corrective action consent order. This order establishes a
two phase investigation plan and a process for identifying any remedial action
that may be required. The corrective action will address closure and corrective
action requirements for waste management units located at the facility. Phase I
has been completed and a summary report submitted to USEPA. Intermet has
responded to USEPA's comments on the Phase I report. Environmental indicators
for human health and groundwater have been submitted to USEPA. Phase II workplan
is being developed.
12.Intermet is in the process of closure of the on-site landfill at its
Radford Foundry. Closure has been delayed pending resolution of final height and
slope closure requirements. Since this is a waste management unit, the closing
of the landfill will be addressed through the RCRA Consent Order referred to in
paragraph 11 above. A closure plan will be prepared and submitted to USEPA for
approval. Closure of the landfill will commence upon USEPA's approval of the
closure plan.
13.The Radford Foundry and the New River Foundry, are included in the
VA DEQ investigation of the source of the PCB contamination discovered in the
New River. Samples
26
from the area industries have been obtained by the VA DEQ and are being
analyzed. Intermet is cooperating with the VA DEQ in this investigation.
14.Waste disposal at the on-site landfill at the Archer Creek Foundry,
located in Campbell County Virginia (outside Lynchburg, VA), is nearly
completed. A closure plan is being developed for submission to the VA DEQ for
approval. Monitoring of groundwater has indicated potential groundwater
contamination. As a result, groundwater protections standards (GPS) are being
developed for this site. Until the GPS are established, the groundwater
monitoring will continue per the current groundwater monitoring plan.
15.A Phase I has been completed on the property in Ironton, Ohio (i.e.,
the former Ironton Foundry facility site) and a copy of the report has been
provided to the City of Ironton. The City is interested in working with Intermet
to enter the property into the Ohio VAP. There is groundwater contamination from
an off-site source.
16.The Wisconsin Department of Natural Resources (DNR) requested
additional information concerning two remediation activities at the Racine Plant
located in Racine, Wisconsin: (1) an underground storage tank removal performed
in 1989 and (2) soil contamination discovered during construction excavation in
1994. An investigation has been performed and a report has been submitted to the
DNR.
27
SCHEDULE 5.17
PREPETITION SENIOR INDEBTEDNESS
The Prepetition Senior Credit Facilities
Revolving Loan $41,000,000 plus various letters of credit issued
pursuant to such facility Term Loan $120,000,000
L/C Facility Agreement $35,690,411
28
SCHEDULE 6.16
POST-CLOSING DELIVERABLES
a. COMPANY SHALL DELIVER EACH OF THE FOLLOWING ITEMS TO
COLLATERAL AGENT NO LATER THAN 7 DAYS AFTER THE CLOSING DATE, IN EACH
CASE IN FORM AND SUBSTANCE SATISFACTORY TO COLLATERAL AGENT:
i. Schedules to the Security Agreement.
ii. Grants of Trademark Security Interest, including
the schedules thereto, for each Borrower granting such
interest.
iii. Grants of Patent Security Interest, including
the schedules thereto, for each Borrower granting such
interest.
iv. Grants of Copyright Security Interest, including
the schedules thereto, for each Borrower granting such
interest.
b. BY NOVEMBER 5, 2004 AT 5 P.M., THE CASH MANAGEMENT SYSTEM
DESCRIBED IN SCHEDULE 4.1J SHALL BE INSTITUTED IN FORM AND SUBSTANCE
SATISFACTORY TO COLLATERAL AGENT. NOTWITHSTANDING THE FOREGOING, EACH
BORROWER SHALL USE IT GOOD-FAITH EFFORTS TO INSTITUTE THE CASH
MANAGEMENT SYSTEM AS SOON AS POSSIBLE AFTER THE DATE HEREOF.
c. BY NOVEMBER 5, 2004 AT 5 P.M., DEPOSIT ACCOUNT CONTROL
AGREEMENTS FOR EACH INSTITUTION IN WHICH BORROWERS HAVE A DEPOSIT
ACCOUNT (EACH IN FORM AND SUBSTANCE SATISFACTORY TO COLLATERAL AGENT),
SHALL BE DELIVERED TO COLLATERAL AGENT. NOTWITHSTANDING THE FOREGOING,
EACH BORROWER SHALL USE IT GOOD-FAITH EFFORTS TO DELIVERY SUCH DEPOSIT
ACCOUNT CONTROL AGREEMENTS AS SOON AS POSSIBLE AFTER THE DATE HEREOF.
d. ANY AND ALL FEES DESCRIBED IN SECTION 4.1G SHALL BE PAID BY
5 P.M. ON OCTOBER 25, 2004.
Notwithstanding the foregoing, if Borrowers or Company, as
applicable, fail to deliver any of the foregoing items to Collateral Agent or
take any of the foregoing actions within such period indicated above, Collateral
Agent may (but shall not be obligated to) (i) consent to an additional period of
time for such delivery or waive the delivery requirement, in the case of an item
described in paragraph A of this Schedule, or (ii) consent to an additional
period of time for the completion of such actions or waive such requirement, in
the case of an action described in paragraph B of this Schedule.
29
SCHEDULE 7.1
CERTAIN EXISTING OBLIGATIONS
1. $8,000,000 Industrial Development Revenue Bonds dated January 1, 1989 between
The Industrial Development Board of the City of Jackson (Tennessee) and Tool
Products, Inc.
2. $4,800,000 Pollution Control Revenue Bonds dated June 1, 1976 between The
Industrial Development Authority of the City of Lynchburg, Virginia and
Lynchburg Foundry Company.
3. Synthetic Lease dated August 27, 2003 between General Electric Capital
Corporation and Intermet in the amount of approximately $1,900,000.
4. Various capital leases in the aggregate amount of approximately $2,000,000.
5. Various foreign obligations in the aggregate amount of approximately
$16,500,000.
Portugal Debt
1. Caixa Geral de Depositos, approximately $8,100,000
2. Fortis Bank, approximately $5,200,000
3. Banco Comercial Portugues, approximately $1,900,000
4. Other, approximately $1,100,000
Germany Debt
1. Other, approximately $200,000
6. Indebtedness described on Schedule 5.17
7. Those matters described on Schedule 7.4(iii)
8. Indebtedness described on Schedule 7.9
30
SCHEDULE 7.2
CERTAIN EXISTING LIENS
1. ALEXANDER CITY, ALABAMA: Mortgage, Security Agreement, Financing Statement
and Assignment of Rents and Leases from Alexander City Casting Company, an
Alabama corporation, to Collateral Agent, dated as of August 15, 2001, and
recorded at Card No. 163774.
2. COLUMBUS, GEORGIA: Deed to Secure Debt, Security Agreement, Financing
Statement and Assignment of Rents and Leases from Columbus Foundry, L.P., a
Delaware limited partnership, to Collateral Agent, dated as of August 15, 2001,
and recorded at Book 6063, Page 132.
3. COLUMBUS, GEORGIA: Deed to Secure Debt, Security Agreement, Financing
Statement and Assignment of Rents and Leases from Intermet U.S. Holding, Inc.
(as successor-in-interest to Intermet International, Inc.), to Collateral Agent,
dated as of August 15, 2001, and recorded at Book 6053, Page 286, as amended by
that certain Amendment to and Confirmation of Deed to Secure Debt dated as of
June 7, 2002 and recorded at Book 6404, Page 154.
4. HAVANA, ILLINOIS: Mortgage, Assignment of Leases and Rents, Security
Agreement and Fixture Filing from Wagner Havana, Inc., a Delaware corporation,
to Collateral Agent, dated as of August 15, 2001, and recorded in Book 817, Page
228.
5. DECATUR, ILLINOIS: Mortgage, Assignment of Leases and Rents, Security
Agreement and Fixture Filing from Wagner Castings Company, a Delaware
corporation, to Collateral Agent, dated as of August 15, 2001, and recorded in
Book 3093, Page 93, as amended by that certain First Amendment to Mortgage,
Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as
of November 20, 2001 and recorded at Book 3127, Page 910.
6. STEVENSVILLE, MICHIGAN: Mortgage from Cast-Matic Corporation, a Michigan
corporation, to Collateral Agent, dated as of August 15, 2001, and recorded in
Liber 2168, Page 625.
7. HIBBING, MINNESOTA: Mortgage, Security Agreement, Financing Statement and
Assignment of Leases and Rents, from Northern Castings Corporation, a Georgia
corporation, to Collateral Agent, dated as of August 15, 2001, and recorded as
Document No. 00828129.
8. NEW HOPE, MINNESOTA: Mortgage, Security Agreement, Financing Statement and
Assignment of Leases and Rents, from Tool Products, Inc., a Delaware
corporation, to Collateral Agent, dated as of August 15, 2001, and recorded as
Document No. 3424823.
9. HANNIBAL, MISSOURI: Deed of Trust, Security Agreement, Financing Statement
and Assignment of Leases and Rents, from Diversified Diemakers, Inc., a Delaware
corporation, to Collateral Agent, dated as of August 15, 2001, and recorded in
Book 561, Page 14111.
10 MONROE CITY, MISSOURI: Deed of Trust, Security Agreement, Financing Statement
and Assignment of Leases and Rents, from Diversified Diemakers, Inc., a Delaware
corporation, to Collateral Agent, dated as of August 15, 2001, and recorded in
Book 290, Page 661.
31
11. PALMYRA, MISSOURI: Deed of Trust, Security Agreement, Financing Statement
and Assignment of Leases and Rents, from Diversified Diemakers, Inc., a Delaware
corporation, to Collateral Agent, dated as of August 15, 2001, and recorded in
Book 561, Page 14090.
12. IRONTON, OHIO: Open-End Mortgage, Security Agreement, Financing Statement
and Assignment of Leases and Rents, from Ironton Iron Inc., an Ohio corporation,
to Collateral Agent, dated as of August 15, 2001, and recorded in Book Volume
115, Page 244.
13. PULASKI, TENNESSEE: Line of Credit Deed of Trust, Security Agreement,
Financing Statement and Assignment of Leases and Rents, from Ganton
Technologies, Inc., an Illinois corporation, to Collateral Agent, dated as of
August 15, 2001, and recorded in Book DT326, Page 881.
14. JACKSON, TENNESSEE: Line of Credit Leasehold Deed of Trust, Security
Agreement, Financing Statement and Assignment of Leases and Rents, from Tool
Products, Inc. a Delaware corporation, to Collateral Agent, dated as of August
15, 2001, and recorded in Book T1316, Page 526, as amended by that certain First
Amendment to Line of Credit Leasehold Deed of Trust, Security Agreement,
Financing Statement and Assignment of Rents and Leases dated May 19, 2003, and
recorded in Book T1518, Page 28 and re-recorded in Book T1542, Page 627.
15. RADFORD, VIRGINIA (Parcel A): Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Fixture Filing Statement, from Intermet U.S. Holding,
Inc. (as successor-in-interest to Intermet International, Inc.), a Delaware
corporation, to Collateral Agent, dated as of August 15, 2001, and recorded in
Book 214, Page 540, as amended by that certain Amendment to and Confirmation of
Deeds of Trust dated as of June 7, 2002 and recorded at Book 226, Page 120.
16. RADFORD, VIRGINIA (Parcel B): Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Fixture Filing Statement, from Intermet U.S. Holding,
Inc. (as successor-in-interest to Intermet International, Inc.), a Delaware
corporation, to Collateral Agent, dated as of August 15, 2001, and recorded in
Book 214, Page 518, as amended by that certain Amendment to and Confirmation of
Deeds of Trust dated as of June 7, 2002, and recorded at Book 226, Page 120.
17. LYNCHBURG, VIRGINIA: Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Fixture Filing Statement, from Lynchburg Foundry Company, a
Virginia corporation, to Collateral Agent, dated as of August 15, 2001, and
recorded as Instrument No. 010006052.
18. STURTEVANT, WISCONSIN (Parcel E): Mortgage, Assignment of Leases and Rents,
Security Agreement and Fixture Filing Statement, from Ganton Technologies, Inc.
an Illinois corporation, to Collateral Agent, dated as of August 15, 2001, and
recorded in Book Volume 3239, Page 721 as Document No. 1787086.
19. STURTEVANT, WISCONSIN (Parcels A-D): Mortgage, Assignment of Leases and
Rents, Security Agreement and Fixture Filing Statement, from Ganton
Technologies, Inc. an Illinois corporation, to Collateral Agent, dated as of
August 15, 2001, and recorded in Book Volume 3239, Page 740, as Document No.
1787087.
32
20. Any and all liens provided to the Prepetition Agent pursuant to the
Pre-petition Credit Facility.
33
I. Debtor: INTERMET CORPORATION, a Georgia corporation
JURISDICTION SECURED PARTY NUMBER DATE COLLATERAL DESCRIPTION
- ------------- ----------------------------- --------------- ---------- ------------ ---------------
GEORGIA
Central Index IBM Credit LLC 007-2003-011653 10/17/2003 listing only Operating Lease
(Barrow Co.)
Ameritech Credit Corporation 007-2003-004591 4/25/2003 listing only Operating Lease
(Barrow Co.)
De Lage Landen Financial 007-2002-004648 5/6/2002 listing only Operating Lease
Services (Barrow Co.)
General Electric Capital 014-2003-000506 8/11/2003 listing only Operating Lease
Corporation (Brooks Co.)
General Electric Capital 014-2003-000569 9/15/2003 listing only Operating Lease
Corporation (Brooks Co.)
General Electric Capital 014-2003-000573 9/18/2003 listing only Operating Lease
Corporation (Brooks Co.)
34
The Bank of Nova Scotia 060-2001-013263 7/19/2001 listing only
(Fulton Co.)
Toyoda Machinery USA 067-2003-003540 4/4/2003 listing only Operating Lease
Corporation (Gwinnett Co.)
General Electric Capital 067-2003-004645 5/7/2003 listing only Operating Lease
Corporation (Gwinnett Co.)
LaSalle National Leasing 067-2003-006458 6/19/2003 listing only Operating Lease
Corporation (Gwinnett Co.)
LaSalle National Leasing 067-2003-006457 6/19/2003 listing only Operating Lease
Corporation (Gwinnett Co.)
Toyoda Machinery USA 067-2003-006563 6/23/2003 listing only Operating Lease
Corporation (Gwinnett Co.)
NMHG Financial Services Inc. 067-2002-008800 8/26/2002 listing only Operating Lease
(Gwinnett Co.)
Global Capital, Ltd. 067-2003-007011 7/2/2003 listing only Capital Lease -
(Gwinnett Co.) lighting fixtures
35
Global Capital, Ltd. 067-2003-007012 7/2/2003 listing only Capital Lease -
(Gwinnett Co.) lighting fixtures
Eastern Computer Exchange, 044-2001-001446 2/20/01 listing only Operating Lease
Inc. (Dekalb Co.)
IBM Credit Corporation 106-2000-003653 12/28/00 listing only Operating Lease
(Muscogee Co.)
The Bank of Nova Scotia 106-1999-004784 12/29/00 listing only
(Muscogee Co.)
Hyster Credit Corporation 044-1999-010870 12/29/00 listing only Operating Lease
(Dekalb Co.)
UST Leasing Corporation 007-1999-006810 6/30/99 listing only Operating Lease
(Barrow Co.)
UST Leasing Corporation 007-1999-006785 6/30/99 listing only Operating Lease
(Barrow Co.)
Hyster Credit Company 044-1998-009746 10/1/98 listing only Operating Lease
(Dekalb Co.)
36
Hyster Credit Company 044-1998-009747 10/1/98 listing only Operating Lease
(Dekalb Co.)
Hyster Credit Company 044-1998-004321 4/28/98 listing only Operating Lease
(Dekalb Co.)
Sterling Bank & Trust, FSB 106-1997-004481 9/20/97 listing only Operating Lease
(Muscogee Co.)
ZF Industries, Inc. 106-1997-000983 2/27/00 listing only Filing on
(Muscogee Co.) customer-owned
tooling
Barrow County DeLage Landen Financial 007-2002-004648 5/6/02 leased equipment 94508 Solarcom Operating Lease
Services
Ameritech Credit Corporation 007-2003-004591 4/5/03 leased equipment Operating Lease
IMB Credit LLC 007-2003-011653 10/17/03 leased computer equipment Operating Lease
UST Leasing Corporation 007-1999-006810 6/30/99 Leased equipment under Operating Lease
Equipment Lease Agreement No.
2899075. Two 9395-B23 Ramac 2
Drawers S/N 51878 & 51853
UST Leasing Corporation 007-1999-006785 6/30/99 Leased equipment under Operating Lease
Equipment Lease Agreement No.
2699075A. One 9394-002 and
seven 9395-B23
Brooks County General Electric Capital 014-2003-506 8/11/03 leased equipment Operating Lease
Corporation
37
General Electric Capital 014-2003-569 9/15/03 leased equipment; same equipment Operating Lease
Corporation as Sec. of State of IL file
#7572107 for Ganton Technologies
Inc.
General Electric Capital 014-2003-573 9/18/03 leased equipment; same equipment Operating Lease
Corporation as Sec. of State of IL file
#7572093 for Ganton Technologies
Inc.
Dekalb County Hyster Credit Corporation 044-1999-010870 12/29/00 2 Hyster model 850 XMIS Operating Lease
additional debtor name-d/b/a
Intermet Columbus Machinery
Hyster Credit Company 044-1998-009746 10/1/98 1 Hyster model H70XL Operating Lease
Hyster Credit Company 044-1998-009747 10/1/98 1 Hyster model H70XL additional Operating Lease
debtor name - d/b/a Intermet
Columbus Foundry L.P.
Hyster Credit Company 044-1998-004321 4/28/98 8 Hysters model N 60KN Operating Lease
Eastern Computer Exchange, 44-2001-001446 2/20/01 computer equipment Operating Lease
Inc.
Fulton County The Bank of Nova Scotia, as 060200113263 7/19/01 all personal property
Collateral Agent
Gwinnett County NMHG Financial Services Inc. 067-2002-8800 8/26/02 leased equipment Operating Lease
Toyoda Machinery USA 067-2003-3540 4/4/03 5 Toyoda machining centers Operating Lease
Corporation
General Electric Capital 067-2003-004645 5/7/2003 1 1992 Cessna 0695 550 Citation Operating Lease
Corporation II has been
terminated.
LaSalle National Leasing 067-2003-006457 6/19/2003 leased Toyoda machining centers Operating Lease
Corporation
38
LaSalle National Leasing 067-2003-006458 6/19/2003 right, title and interest in Operating Lease
Corporation Equipment Sublease Agreement
dated as of 5/13/03 between
debtor and Ganton Technologies,
Inc.; Toyoda machining centers
Toyoda Machinery USA 067-2003-006563 6/23/2003 4 Toyoda machining centers Operating Lease
Corporation
Global Capital, Ltd. 067-2003-007011 7/2/2003 leased equipment Capital Lease -
lighting fixtures
Global Capital, Ltd. 067-2003-007012 7/2/2003 leased equipment Capital Lease -
lighting fixtures
General Electric Capital 067-2003-011547 10/30/03 Leased 1998 Cessna Citation Operating Lease
Corporation Ultra
Muscogee County ZF Industries, Inc. 106-1997-000983 2/27/00 tooling equipment (4 pieces) Filing on
Additional debtor: Columbus customer-owned
Foundry tooling
Pacific Rim Capital, Inc. 10697004481 9/2/97 Leased equipment (Caterpillar Operating Lease
Assignee: Sterling Bank & Model 320L) Material Handler and
Trust FSB related equipment
The Bank of Nova Scotia 10699004784 12/29/99 all right, title & interest to Operating Lease
Development Authority of
Columbus, GA Industrial
Development Revenue Bonds,
Series 1999
IBM Credit Corporation, as 10600003653 12/28/00 leased computer equipment Operating Lease
Lessor
General Electric Capital ###-##-#### 3/4/2004 horizontal machining center
Corporation (Bacon Co.)
LaSalle National Leasing 067-2004-006981 7/13/2004 equipment sublease agreement
Corporation (Gwinnett Co.)
LaSalle National Leasing 067-2004- 7/13/2004 leased equipment
39
Corporation 006980
(Gwinnett Co.)
The Bank of Nova Scotia 060-2004-000388 1/12/2004 cash collateral
(Fulton Co.)
St. Francis Bank 067-2003-012332 11/24/2003 leased radio equipment
(Gwinnett Co.)
The Bank of Nova Scotia, as 060-2003-14985 12/5/2003 in lieu filing to continue
Collateral Agent (Fulton Co.) effectiveness of filing in the
State of Michigan #26844C filed
7/19/2001 covering all personal
property and filing in the
Commonwealth of Virginia
#0107197189 filed 7/19/2001
covering all personal property
MICHIGAN
Secretary of State IKON Office Solutions D779941 5/30/2001 leased office equipment Operating Lease
The Bank of Nova Scotia, as 26844C 7/19/2001 all personal property Operating Lease
Collateral Agent
Citicorp Del Lease, Inc. D814792 9/6/2001 equipment (1998 Caterpillar Operating Lease
model #GC18LP)
Citicorp Del Lease, Inc. D749586 3/2/01 leased equipment Operating Lease
Assignee: WEISE PLANNING & Assignment filed on 6/13/2002,
ENGINEERING INC. as #D922486
Alan Blaine/IKON Office D151999 10/22/96 leased copier Operating Lease
Solutions
IKON Office Solutions D313723 12/10/97 leased copier Operating Lease
IKON Office Solutions D313759 12/10/97 leased copier Operating Lease
40
General Electric Capital 93553B 4/15/98 airplane Cessna Citation II Operating Lease
Corporation model 550 S/N 550-0695, 2 Pratt has been
& Whitney engines. Debtor is not terminated.
authorized to sell equipment.
IKON Office Solutions D352442 3/20/98 leased copier Operating Lease
Hyster Credit Corporation D377270 5/21/98 equipment (8 Hyster H60XMs) Operating Lease
Intermet Columbus Foundry L.P.
as additional debtor
Hyster Credit Corporation D386501 6/15/98 equipment ( Hyster 90XL & Hyster Operating Lease
H 80XL and related equipment)
Intermet Columbus Foundry L.P.
as additional debtor
Oakland County clear
VIRGINIA
State Corporation The Bank of Nova Scotia, as 010719 7189 07/19/2001 all personal property
Commission Collateral Agent
Midsouth Financial Network, 960916 7039 9/16/96 boom lift
Ltd. Continuation filed 08/23/2001 as
Assignee: The Bank of Floyd file #010823 7191.
Termination filed 09/24/2001 as
file #010924 7181.
Globe Metallurgical, Inc. 961223 7401 12/23/96 all inventory Consigned
inventory
VBS Inc. 970103 7087 1/3/97 lift truck Operating Lease
VBS Inc. 970212 7041 2/12/97 5 lift trucks Operating Lease
Pacific Rim Capital, Inc. 980325 7116 3/25/98 leased equipment Operating Lease
Assignee: Sterling Bank &
Trust
41
Campbell County Globe Metallurgical, Inc. 30289 12/23/96 all inventory Consigned
inventory
VBS Inc. 30418 2/12/97 5 lift trucks Operating Lease
Independent City clear
of Lynchburg
42
II. Debtor: LYNCHBURG FOUNDRY COMPANY, a Virginia corporation
JURISDICTION SECURED PARTY NUMBER DATE COLLATERAL DESCRIPTION
- ------------------ ----------------------------- --------------- ---------- -------------------------------- ----------------
MICHIGAN
Secretary of State The Bank of Nova Scotia, as 26853C 07/19/2001 all personal property
Collateral Agent
VIRGINIA
State Corporation The Bank of Nova Scotia, as 010719 7190 07/19/01 all personal property
Commission Collateral Agent
Applied Industrial 021015 71132 10/15/02 purchase money security interest Consigned
Technologies-Dixie, Inc. in specific equipment inventory
General Electric Capital 03092973677 09/29/03 10 leased forklifts Operating Lease
Corporation
General Electric Capital 990608 7824 6/8/99 leased equipment (10 lift Operating Lease
Corporation trucks)
General Electric Capital 990726 7803 7/26/99 leased equipment (9 forklifts) Operating Lease
Corporation
Forseco, Inc. 010131 7191 1/31/01 consigned inventory (CELEX) Consigned
"This inventory belonging to inventory
Forseco, Inc., covered under the
Consignment Agreement, is
subject to change
The Bank of Nova Scotia, as 0312837282-4 Not in lieu filing to continue In lieu filing
Collateral Agent stamped effectiveness of filing in the
State of Michigan #26853C filed
7/19/2001 covering all personal
property
General Electric Capital illegible Not in lieu filing to continue In lieu filing
Corporation stamped effectiveness of filing in the
Commonwealth of Virginia
#99-7471 filed 7/26/1999
covering
43
leased forklifts and filing in
Commonwealth of Virginia #576-99
filed 7/26/1999 covering leased
forklifts
Campbell County Forseco, Inc. 33571 1/31/01 consigned inventory(CELEX) Consigned
"This inventory belonging to inventory
Forseco, Inc., covered under the
Consignment Agreement, is
subject to change
Independent City General Electric Capital 424-99 6/8/99 leased equipment (10 lift Operating Lease
of Lynchburg Corporation trucks)
General Electric Capital 576-99 7/26/99 leased equipment (10 forklifts) Operating Lease
Corporation
Independent City General Electric Capital 99-7471 7/26/99 leased equipment (9 forklifts) Operating Lease
of Radford Corporation
44
III. Debtor: IRONTON IRON, INC., an Ohio corporation (inactive)
JURISDICTION SECURED PARTY NUMBER DATE COLLATERAL DESCRIPTION
- ------------------ ----------------------------- --------------- ---------- -------------------------------- ----------------
OHIO
Secretary of State The Bank of Nova Scotia, as OH00036225200 7/20/2001 all personal property
Collateral Agent
IKON Office Solutions, Inc. AN76363 6/25/97 leased office equipment Operating Lease
The Bank of Nova Scotia, as OH00071479644 12/5/2003 in lieu filing to continue
Collateral Agent effectiveness of filing in the
State of Michigan #26850C filed
7/19/2001 covering all personal
property
Lawrence County IKON Office Solutions, Inc. 970902 6/23/97 leased office equipment Operating Lease
MICHIGAN
Secretary of State The Bank of Nova Scotia, as 26850C 7/19/2001 all personal property
Collateral Agent
45
IV. Debtor: NORTHERN CASTINGS CORPORATION, a Georgia corporation
JURISDICTION SECURED PARTY NUMBER DATE COLLATERAL DESCRIPTION
- ------------------ ----------------------------- --------------- ---------- -------------------------------- ----------------
GEORGIA
Central Index The Bank of Nova Scotia 060-2001-013264 7/19/2001 listing only
(Fulton Co.)
Fulton County The Bank of Nova Scotia 060-2001-013264 7/19/2001 all personal property
General Electric Capital 044-2004-000853 3/3/04 leased forklift
Corporation (Dekalb Co.)
General Electric Capital 011-2004-000979 3/31/2004 leased forklift
Corporation (Bibb Co.)
The Bank of Nova Scotia 060-2003-014983 12/5/2003 in lieu filing to continue
(Fulton Co.) effectiveness of filing in the
State of Michigan #26854C filed
7/19/2001 covering all personal
property and filing in State of
Minnesota #20011168446 filed
7/19/2001 covering all personal
property
MICHIGAN
The Bank of Nova Scotia, as 26854C 7/19/2001 all personal property
Collateral Agent
MINNESOTA
Secretary of State The Bank of Nova Scotia, as 20011168446 7/19/2001 all personal property
Collateral Agent
St. Louis County clear
46
V. Debtor: INTERMET INTERNATIONAL, INC., a Georgia corporation
JURISDICTION SECURED PARTY NUMBER DATE COLLATERAL DESCRIPTION
- ------------------ ----------------------------- --------------- ---------- -------------------------------- ----------------
GEORGIA
Central Index General Electric Capital 060-2003-001446 2/3/2003 listing only Operating Lease
Corporation (Fulton Co.)
The Bank of Nova Scotia 060-2001-013265 7/19/2001 listing only
(Fulton Co.)
General Electric Capital 106-1999-002034 5/21/99 leased equipment Operating Lease
Corporation (Muscogee
County)
Pittard Leasing 060-1998-010927 5/26/98 listing only Operating Lease
(Fulton
County)
Cobb County clear
Fulton County Pittard Leasing 060-1998-010927 5/26/98 coolant shower system Operating Lease -
(collateral description does not to be confirmed
indicated the collateral is
leased)
The Bank of Nova Scotia, as 060-2001-013265 7/19/2001 all personal property
Collateral Agent
General Electric Capital 060-2003-01446 2/3/03 7 leased lift trucks Operating Lease
Corporation
The Bank of Nova Scotia, as 060-2003-14984 12/5/2003 in lieu filing to continue In lieu filing
Collateral Agent effectiveness of filing in the
State of Michigan #26852C filed
7/19/2001 covering all personal
property and filing in the
47
Commonwealth of Virginia
#0107197191 filed 7/19/2001
covering all personal property
Muscogee County General Electric Capital 106-1999-002034 5/21/99 leased equipment (3 lift trucks) Operating Lease
Corporation
MICHIGAN
Secretary of State The Bank of Nova Scotia, as 26852C 07/19/2001 all personal property of debtor
Collateral Agent
VIRGINIA
State Corporation The Bank of Nova Scotia, as 010719 7191 07/19/2001 all personal property of debtor
Commission Collateral Agent
General Electric Capital 981013 7842 10/13/98 leased forklift Operating Lease
Corporation
General Electric Capital 990218 7813 2/18/99 leased equipment (3 forklifts) Operating Lease
Corporation
General Electric Capital 990521 7814 5/21/99 leased equipment (2 lift trucks) Operating Lease
Corporation
Independent City General Electric Capital 7343 10/14/98 leased forklift Operating Lease
of Radford Corporation
General Electric Capital 7414 2/19/99 leased equipment (3 forklifts) Operating Lease
Corporation
General Electric Capital 7547 2/18/00 leased equipment (2 forklifts) Operating Lease
Corporation
48
VI. Debtor: ALEXANDER CITY CASTINGS COMPANY, INC., an Alabama corporation
JURISDICTION SECURED PARTY NUMBER DATE COLLATERAL DESCRIPTION
- ------------------ ----------------------------- --------------- ---------- -------------------------------- ----------------
ALABAMA
Secretary of State The Bank of Nova Scotia, as B2001-28510 7/20/2001 Intercompany Notes, investment
Collateral Agent property, equipment, inventory,
accounts, etc.
Caterpillar Financial B96-32277 8/2/96 lift truck Operating Lease
Services Corporation
The Bank of Nova Scotia, as L03-1054927 12/5/2003 in lieu filing to continue In lieu filing
Collateral Agent effectiveness of filing in the
State of Michigan #26845C filed
7/19/2001 covering all personal
property
Tallapoosa County clear
DELAWARE
Secretary of State clear
MICHIGAN
Secretary of State The Bank of Nova Scotia. as 26845C 7/19/01 all personal property
Collateral Agent
49
VII. Debtor: SUDM, INC., a Michigan corporation
JURISDICTION SECURED PARTY NUMBER DATE COLLATERAL DESCRIPTION
- ------------------ ----------------------------- --------------- ---------- -------------------------------- ----------------
MICHIGAN
Secretary of State The Bank of Nova Scotia. as 26856C 7/19/01 all personal property
Collateral Agent
Oakland County clear
50
VIII. Debtor: SUDBURY, INC., a Delaware corporation
JURISDICTION SECURED PARTY NUMBER DATE COLLATERAL DESCRIPTION
- ------------------ ----------------------------- --------------- ---------- -------------------------------- ----------------
DELAWARE
Secretary of State The Bank of Nova Scotia, as 10698030 7/19/01 all personal property
Collateral Agent
The Bank of Nova Scotia, as 33201368 12/5/2003 in lieu filing to continue In lieu filing
Collateral Agent effectiveness of filing in the
State of Michigan #26855C filed
7/19/2001 covering all personal
property
ILLINOIS
Secretary of State clear
Cook County clear
Macon clear
Mason clear
IOWA
Secretary of State clear
MICHIGAN
Secretary of state The Bank of Nova Scotia, as 26855C 7/19/01 all personal property
Collateral Agent
Berrien County clear
OHIO
Secretary of State clear
51
IX. Debtor: COLUMBUS FOUNDRY, L.P., a Delaware limited partnership
JURISDICTION SECURED PARTY NUMBER DATE COLLATERAL DESCRIPTION
- ------------------ ----------------------------- --------------- ---------- -------------------------------- ----------------
DELAWARE
Secretary of State The Bank of Nova Scotia, as 10698402 7/19/01 all personal property
Collateral Agent
General Electric Capital 21460405 6/13/02 6 leased forklifts Operating Lease
Corporation
General Electric Capital 21460413 6/13/02 3 leased forklifts Operating Lease
Corporation
General Electric Capital 22848707 11/12/02 3 leased forklifts Operating Lease
Corporation
General Electric Capital 32502915 9/26/03 leased forklifts Operating Lease
Corporation
CBI Leasing, Inc. (ASSIGNED 32555632 9/22/03 leased Caterpillar equipment Operating Lease
TO U.S. BANCORP EQUIPMENT
FINANCE, INC. ON 11/19/2003)
General Electric Capital 33061457 11/20/2003 in lieu filing to continue In lieu filing
Corporation effectiveness of filing in the
State of Georgia (Gwinnett
County) #10699002283 filed
6/9/1999 covering all leased
forklifts
The Bank of Nova Scotia, as 33201715 12/5/2003 in lieu filing to continue In lieu filing
Collateral Agent effectiveness of filing in the
State of Georgia (Gwinnett
County) #10699002283 filed
7/19/2001 covering all leased
forklifts and filing in the
State of Michigan #26847C filed
7/19/2001 covering all personal
property
52
GEORGIA
Central Index The Bank of Nova Scotia, as 060-2001-013262 7/19/01 listing only
Collateral Agent (Fulton
County)
The Bank of Nova Scotia, as 106-2001-002279 10/5/01 listing only
Collateral Agent (Muscogee
County)
Caterpillar Financial 106-1992-003500 listing only Operating Lease
Services Corporation (Muscogee continuation filed 6/18/97 as #
County) 106-1997-003139 (NOTE: this
did not show on Muscogee Co.
search report)
ZF Industries, Inc. 106-1997-000983 2/27/97 listing only, equipment Filing on
(Muscogee customer-owned
County) tooling
General Electric Capital 106-2000-003470 12/7/00 listing only, equipment Operating Lease
Corporation (Muscogee
County)
General Electric Capital 106-2000-002056 7/26/00 listing only, equipment Operating Lease
Corporation (Muscogee
County)
General Electric Capital 106-2000-002055 7/26/00 listing only, equipment Operating Lease
Corporation (Muscogee
County)
53
The Bank of Nova Scotia 106-1999-004784 12/29/99 listing only; accounts,
(Muscogee chattel paper, documents,
County) instruments, proceeds
General Electric Capital 106-1999-002283 6/9/00 listing only, equipment Operating Lease
Corporation (Muscogee
County)
Fulton County The Bank of Nova Scotia, as 060200113262 7/19/01 all personal property
Collateral Agent
Muscogee County The Bank of Nova Scotia 10601002279 10/5/01 all improvements, buildings and
structures, property rights,
real property, intangibles,
rents and leases
ZF Industries, Inc. 106-1997-000983 2/27/97 equipment (4 pcs. tooling Filing on
equipment) customer-owned
tooling
Sun Trust Bank of West Georgia 10698003506 8/7/98 boom lift NOTE: Debtor's name is Operating Lease
listed as Intermet Columbus
Foundry, L.P.
The Bank of Nova Scotia 106-1999-004784 12/29/99 all right, title & interest to
Development Authority of
Columbus, GA Industrial
Development Revenue Bonds,
Series 1999
Caterpillar Financial 92-03500 9/3/92 leased excavator; continued Operating Lease
Services Corporation 6/18/97
General Electric Capital 106-1999-002283 6/9/99 10 leased Hyser trucks Operating Lease
Corporation
MICHIGAN
Secretary of State The Bank of Nova Scotia, as 26847C 7/19/01 all personal property
Collateral Agent
54
X. Debtor: TOOL PRODUCTS, INC., a Delaware corporation
JURISDICTION SECURED PARTY NUMBER DATE COLLATERAL DESCRIPTION
- ------------------ ----------------------------- --------------- ---------- -------------------------------- ----------------
DELAWARE
Secretary of State The Bank of Nova Scotia, as 10697420 7/19/01 all personal property
Collateral Agent
General Electric Capital 21527575 5/24/02 in lieu filings to continue Operating Lease
Corporation effectiveness of filing with
Secretary of State of Minnesota
#1963854 filed 8/7/97 and
covering leased equipment
General Electric Capital 22010753 7/31/02 in lieu filings to continue Operating Lease
Corporation effectiveness of filing with
Secretary of State of Minnesota
#1978152 filed 10/6/97 and
covering leased equipment
General Electric Capital 40930018 4/2/2004 leased forklift
Corporation
The Bank of Nova Scotia, as 33201186 12/5/2003 in lieu filing to continue
Collateral Agent effectiveness of filing in the
State of Michigan #26857C filed
7/19/2001 covering all personal
property, filing in the State of
Minnesota #20011169404 filed
7/19/2001 covering all personal
property, and filing in the
State of Tennessee #301-095267
filed 8/26/2001 covering all
personal property
ILLINOIS
Secretary of State clear
MICHIGAN
Secretary of State The Bank of Nova Scotia. as 26857C 7/19/01 all personal property
Collateral Agent
MINNESOTA
55
Secretary of State The Bank of Nova Scotia, as 20011169404 7/19/2001 all personal property
Collateral Agent
Citicorp Del Lease, Inc. 2045820 6/17/98 forklift. Tool Products, Inc. Operating Lease
is an additional debtor listed
to Quadiron Corp. (collateral
description does not indicated
the collateral is leased).
Hennepin County clear
PENNSYLVANIA
Secretary of clear
Commonwealth
TENNESSEE
Secretary of State The Bank of Nova Scotia, as 301-095267 08/29/2001 all personal property
Collateral Agent
Madison County clear
56
XI. Debtor: CAST-MATIC CORPORATION, a Michigan corporation
JURISDICTION SECURED PARTY NUMBER DATE COLLATERAL DESCRIPTION
- ------------------ ----------------------------- --------------- ---------- -------------------------------- ----------------
MICHIGAN
Secretary of State The Bank of Nova Scotia, as 26846C 7/19/01 all personal property
Collateral Agent
Myers Electric Products, Inc. 21050B 6/15/92 equipment. Continuation filed Probably customer-
Assignee: Heller Financial, 5/22/98 as #85008B. (12" owned tooling
Inc. Housing-Single Cavity, 12" Door
Single Cavity, 8" Housing-Single
Cavity, 8" Door-Single Cavity,
12" Housing Trim Die, 12" Door
Trim Die, 8" Housing Trim Die,
8" Door Trim Die) Secured Party
is owner of equipment.
Berrien County clear
57
XII. Debtor: INTERMET ILLINOIS (f/k/a FRISBY P.M.C., INCORPORATED, an Illinois
corporation
JURISDICTION SECURED PARTY NUMBER DATE COLLATERAL DESCRIPTION
- ------------------ ------------------------- -------- --------- ---------------------------------------- ---------------------
ILLINOIS
Secretary of State The Bank of Nova Scotia, 4414781 7/20/2001 all personal property
as Collateral Agent
The Bank of Nova Scotia, 7345968 7/29/2003 all assets, property and rights
as Collateral Agent
NMHG Financial Services, 7157770 6/17/2003 leased equipment Operating Lease -
Inc. assigned to Frisby
P.M.C., L.L.C.
Ameritech Credit 3570081 7/24/96 leased telecommunication equipment Operating Lease -
Corporation Continuation filed 5/10/2001 as #4382395 assigned to Frisby
P.M.C., L.L.C.
Ellison Machinery Company 3639822 1/15/97 leased equipment (1 lathe & related Operating Lease -
equipment) assigned to Frisby
P.M.C., L.L.C.
NBD Equipment Finance, 3725335 8/7/97 leased equipment (Nakamure Torme TWHD Operating Lease -
Inc. 6 Axis CNC (...illegible) and assigned to Frisby
related equipment) P.M.C.
General Electric Capital 4112699 10/22/99 leased equipment (sharpening machine) Operating Lease -
Corporation assigned to Frisby
P.M.C.
Cook County General Electric Capital 99U11698 10/25/99 leased equipment (sharpening machine) Operating Lease -
Corporation assigned to Frisby
P.M.C.
Banc One Leasing 8317542 3/2/2004 all equipment and inventory
Corporation
58
General Electric Capital 8600988 4/28/2004 in lieu filing to continue effectiveness In lieu filing
Corporation of filing in the State of Illinois
#99U11968 filed 10/25/1999 covering
leased equipment (sharpening machine)
DMG Chicago, Inc. 7907222 12/2/2003 leased equipment (lathe machine)
General Electric Capital 8601704 4/28/2004 Continuation of filing #4112699 filed Continuation
Corporation 10/22/1999 covering leased equipment
(sharpening machine)
The Bank of Nova Scotia, 7852754 11/18/2003 Amendment changing
as Collateral Agent Frisby P.M.C., Inc.
to Intermet Illinois,
Inc.
MICHIGAN
Secretary of State The Bank of Nova Scotia, 26848C 7/19/2001 all personal property
as Collateral Agent
59
XIII. Debtor: WAGNER CASTINGS COMPANY, a Delaware corporation
JURISDICTION SECURED PARTY NUMBER DATE COLLATERAL DESCRIPTION
- ------------------ ------------------------- -------- --------- ---------------------------------------- ---------------------
DELAWARE
Secretary of State The Bank of Nova Scotia, 10696232 7/19/01 all personal property
as Collateral Agent
General Electric Capital 31216699 4/25/03 in lieu filing to continue effectiveness Operating Lease
Corporation of filing in Mason County, IL #98-235
filed 10/23/98 and covering leased
equipment
General Electric Capital 31216723 4/25/03 in lieu filing to continue effectiveness Operating Lease
Corporation of filings with Secretary of State if IL
#3929199 filed 10/23/98 and in Mason
County, IL #1497190/94315 filed 10/23/98
and covering leased equipment
General Electric Capital 31859605 7/21/03 in lieu filing to continue effectiveness Operating Lease
Corporation of filing in Mason County, IL #1506270
filed 2/18/99 and covering leased
equipment
General Electric Capital 31861908 7/21/03 in lieu filing to continue effectiveness Operating Lease
Corporation of filing with Secretary of State of IL
#3990053 filed 2/17/99 and covering
leased equipment
The Bank of Nova Scotia, 33201749 12/5/2003 in lieu filing to continue effectiveness In lieu filing
as Collateral Agent of filing in the State of Illinois
#4414782 filed 7/20/2001 covering all
personal property and filing in the
State of Michigan #26858C filed
7/19/2001 covering all personal property
ILLINOIS
Secretary of State The Bank of Nova Scotia, 4414782 7/20/2001 all personal property
as Collateral Agent
60
Ameritech Credit 3300179 8/30/94 leased telecommunication equipment. Operating Lease
Corporation Continuation filed 7/6/99 as #4061214
Hyster Credit Company 3552295 6/12/96 lift trucks (2) Operating Lease
Ameritech Credit 3581628 8/26/96 leased telecommunication equipment Operating Lease
Corporation
Albany Bank & Trust Co., 3781987 1/5/98 leased equipment (2 SGI Octane/S1R1000 Operating Lease
N.A. Cad Cam; & computer equipment)
Continuation filed 12/9/2002 as #6236553
Matrix Funding 3804138 2/19/98 leased equipment. Assignment to Albany Operating Lease
Corporation Bank & Trust Co., N.A. filed 4/27/98 as
#3840542 (Catia Finite Element
Integration Analysis Configuration Pkg.)
Matrix Funding 3825621 3/31/98 leased computer equipment. Assignment Operating Lease
Corporation to Albany Bank & Trust Co., N.A. filed
4/23/98 as #3839166
General Electric Capital 3885654 7/28/98 leased equipment (11 lift trucks) Operating Lease
Corporation
General Electric Capital 3929199 10/23/98 leased equipment (5 forklifts) Operating Lease
Corporation
General Electric Capital 3990053 2/17/99 leased equipment (1 rider sweeper) Operating Lease
Corporation
General Electric Capital 4343373 2/23/01 leased equipment (11 forklifts) Operating Lease
Corporation
Macon County General Electric Capital 1490176 7/28/98 leased equipment (11 forklifts) Operating Lease
Corporation
General Electric Capital 1497190 10/23/98 leased equipment (5 forklifts) Operating Lease
Corporation
61
General Electric Capital 1506270 2/18/99 leased equipment (1 rider sweeper) Operating Lease
Corporation
MICHIGAN
Secretary of State The Bank of Nova Scotia, 26858C 7/19/2001 all personal property
as Collateral Agent
XIV. Debtor: WAGNER HAVANA, INC., a Delaware corporation
JURISDICTION SECURED PARTY NUMBER DATE COLLATERAL DESCRIPTION
- ------------------ ------------------------- -------- --------- ---------------------------------------- ---------------------
DELAWARE
Secretary of State The Bank of Nova Scotia, 10696208 7/19/01 all personal property
as Collateral Agent
CBI Leasing, Inc. 30950330 4/11/03 leased equipment (forklift) Operating Lease
The Bank of Nova Scotia, 33201491 12/5/2003 in lieu filing to continue effectiveness In lieu filing
as Collateral Agent of filing in the State of Illinois
#4414785 filed 7/20/2001 covering all
personal property and filing in the
State of Michigan #26859C filed
7/19/2001 covering all personal property
ILLINOIS
Secretary of State The Bank of Nova Scotia, 4414785 7/20/2001 all personal property
as Collateral Agent
Mason County clear
MICHIGAN
Secretary of State The Bank of Nova Scotia, 26859C 7/19/01 all personal property
as Collateral Agent
62
XV. Debtor: INTERMET HOLDING COMPANY, Delaware corporation
JURISDICTION SECURED PARTY NUMBER DATE COLLATERAL DESCRIPTION
- ------------------ ------------------------- -------- --------- ---------------------------------------- ---------------------
DELAWARE
Secretary of State The Bank of Nova Scotia, 10697503 7/19/01 all personal property
as Collateral Agent
The Bank of Nova Scotia, 33201624 12/5/2003 in lieu filing to continue effectiveness In lieu filing
as Collateral Agent of filing in the State of Michigan
#26851C filed 7/19/2001 covering all
personal property
MICHIGAN
Secretary of State The Bank of Nova Scotia, 26851C 7/19/01 all personal property
as Collateral Agent
63
XVI. Debtor: GANTON TECHNOLOGIES, INC., an Illinois corporation
JURISDICTION SECURED PARTY NUMBER DATE COLLATERAL DESCRIPTION
- ------------------ ------------------------- -------- --------- ---------------------------------------- ---------------------
ILLINOIS
Secretary of State The Bank of Nova Scotia, 4414783 7/19/2001 all personal property
as Collateral Agent
Absolute Machine Tools 7348878 7/30/2003 equipment (1 Vertical Machining Center) Equipment Lease
General Electric Capital 7572093 9/19/2003 leased equipment (2 Horizontal Machining Operating Lease
Corporation Centers) NOTE: Intermet Corporation is
shown as assignor; same equipment as
Brooks County, GA file #014-2003-573 for
Intermet Corporation
General Electric Capital 7572107 9/19/2003 leased equipment (3 Horizontal Machining Operating Lease
Corporation Centers) NOTE: Intermet Corporation is
shown as assignor; same equipment as
Brooks County, GA file #014-2003-569 for
Intermet Corporation
Intermet Corporation 7702132 10/17/2003 leased equipment (2 Horizontal Machining Operating Lease
Centers NM 9576,N M9858)
The Bank of Nova Scotia, 8072612 12/5/2003 in lieu filing to continue effectiveness In lieu filing
as Collateral Agent of filing in the State of Michigan
#26849C filed 7/19/2001 covering all
personal property, filing in the State
of Tennessee #301-095268 covering all
personal property, and filing in the
State of Wisconsin #010000733518
covering all personal property
The Bank of Nova Scotia, 7929544 1/8/2004 Assignment of security
as Collateral Agent interest to
64
The Bank of Nova
Scotia
MICHIGAN
Secretary of State The Bank of Nova Scotia, 26849C 7/19/01 all personal property
as Collateral Agent
TENNESSEE
Secretary of State The Bank of Nova Scotia, 301- 8/29/2001 all personal property
as Collateral Agent 095268
ZF Industries, Inc. 515724 2/2/96 tooling equipment owned by Secured Party Filling on customer-
owned tooling
Communications Leasing 961- 11/21/96 leased equipment (1 sweeper/scrubber) Operating Lease
Mid-South, Inc. 548112
Assignee: First National
Bank of Pulaski
Caterpillar Financial 962- 6/4/96 leased lift truck Operating Lease
Services Corporation 017574
Caterpillar Financial 962- 6/21/96 leased lift truck Operating Lease
Services Corporation 022742
Tennant Company 962- 8/30/96 equipment (1 sweeper/scrubber) Operating Lease
034852
Communications Leasing 972- 1/30/97 leased equipment (1 RAD Megaplex Equipment Lease
Mid-South, Inc. 001846 2000/w/int CSU s/n 6442864; 1 RAD MP
Assignee: First National 2000/HS-H,T-1 sub Channel card; 1 RAD MP
Bank of Pulaski 2000/HS-2 High Speed Channel card; 1
RAD CBL-HS2-V35F Connecter Cable; 1 RAD
MP2000/S, 4 Port S Interface, 1 Merlin
legend 100 D,DS-1 Cercant Pkg.1
Panasonic Vision Pro 7500 with 27"color
monitor s/n 19558DC0145)
65
Communications Leasing 972- 6/4/97 leased computer equipment Operating Lease
Mid-South, Inc. 043299
Assignee: First National
Bank of Pulaski
Toyota Motor Credit Corp. 982- 6/22/98 5 leased forklifts Operating Lease
058285
Yamazen, Inc. 993- 4/26/99 equipment (Hitachi Seike VS50 Vertical Operating Lease
022786 Machining Center & related equipment)
Communications Leasing 993- 12/17/99 leased computer equipment Operating Lease
Mid-South, Inc. 065961
Assignee: First National
Bank of Pulaski
Giles County clear
WISCONSIN
Secretary of State Wolter Investment 03000086 1/16/2003 equipment; 5 Linde model E2OC0600), 8 Operating Lease
Company LLC 6222 batteries, 3 chargers
Wolver Investment 020011351 6/12/2002 equipment; 1 forklift Operating Lease
Company LLC 011
The Bank of Nova Scotia, 010000733 7/19/2001 all personal property
as Collateral Agent 518
Capital Data Inc. 0162199 10/18/96 Leased IMB 650 DASD Controller Operating Lease
CD Leasing Inc. 01622000 10/18/96 Lease 76034 of slot hub and related Operating Lease
equipment
Yamazen Inc. 01639235 1/6/97 equipment serial #966174A Operating Lease
Yamazen Inc. 01640887 1/13/97 equipment Indexer, serial #102656 Operating Lease
First Nat'l Bank of 1645210 1/31/97 computer equipment under Lease Agreement Operating Lease
Pulaski dated 11/15/96
66
First Nat'l Bank of 1645211 1/31/97 computer equipment under Lease Agreement Operating Lease
Pulaski dated 11/15/96
First Nat'l Bank of 1677718 6/6/97 computer equipment under Lease Agreement Operating Lease
Pulaski dated 1/24/97
First Nat'l Bank of 1677719 6/6/97 computer equipment under Lease Agreement Operating Lease
Pulaski dated 1/24/97
Caterpillar Financial 01691056 8/1/97 equipment 5 Baker E25B Operating Lease
First Nat'l Bank of 1698349 9/4/97 computer equipment under Lease Agreement Operating Lease
Pulaski dated 5/28/97
Caterpillar Financial 01699626 9/10/97 SBS 18-125F-19 and 4 SBS 18-125F-17 Operating Lease
First Nat'l Bank of 01710650 10/27/97 computer equipment under Lease Agreement Operating Lease
Pulaski dated 5/28/97
Caterpillar Financial 01790116 9/17/98 Caterpillar model GC30-LP Operating Lease
Caterpillar Financial 01790117 9/17/98 7 lift trucks Operating Lease
Caterpillar Financial 01797133 10/16/98 Baker model H16D Operating Lease
Caterpillar Financial 01804819 11/17/98 Caterpillar model GC15LP Operating Lease
US Bank, N.A. 01856989 6/23/99 equipment leased under lease #3281, Operating Lease
Tennant model 7200 and related equipment
Ingersoll International 01871376 8/10/99 machine tool, serial #29613 and related Operating Lease
Inc. equipment
Dell Financial Services, 01875537 8/24/99 equipment lease under Equipment Lease Operating Lease
L.P. #007569584-003
67
GFC Leasing 01892626 10/25/99 leased equipment-NNY06560, ZNE05364,
ZSV13447, ZSJ08064, G9768
TERMINATION FILED 11/23/2001 AS FILE
#010008959637
IBM Credit Corporation 01934341 3/8/00 leased computer equipment under IBM Operating Lease
Supplement #724161 dated 6/27/99
Banc One Leasing 01958205 5/19/00 equipment leased under Equipment Lease Operating Lease
Corporation Schedule #1000103275 pursuant to Master
Lease Agreement dated 5/2/00
General Electric Capital 02028959 1/23/01 leased equipment; 2 Hitachi Seiki VS40 Operating Lease
Corporation and 3 Hitachi Seiki VS50
General Electric Capital 02028961 1/23/01 leased equipment; 2 Hitachi Seiki VS40 Operating Lease
Corporation and 3 Hitachi Seiki VS50
Racine County General Electric Capital 300753 7/28/00 leased equipment, fixture filing for Operating Lease
Corporation 8313 Durand Av., Sturtevant, WI (Hitachi
Seiki Horizontal CNC Machining & 2
Machining Center)
68
XVII. Debtor: DIVERSIFIED DIEMAKERS, INC., a Delaware corporation
JURISDICTION SECURED PARTY NUMBER DATE COLLATERAL DESCRIPTION
- ------------------ ------------------------- -------- --------- ---------------------------------------- ---------------------
DELAWARE
Secretary of State The Bank of Nova Scotia, 10698386 7/19/01 all personal property (ON 7/2/2004
as Collateral Agent SECURED PARTY RELEASED RIGHTS IN AIRPORT
HANGAR IN MONROE CITY, MO)
Fleet Capital 9915218 3/30/99 aircraft (Cessna S550, S/N S5500067, AIRCRAFT OWNERSHIP WAS
Corporation, as Agent N900DM) and related equipment RETAINED BY THE FORMER
OWNERS OF DIVERSIFIED
DIEMAKERS, THIS
AIRCRAFT IS NOT OWNED
BY INTERMET
The Bank of Nova Scotia, 33201640 12/5/2003 in lieu filing to continue effectiveness
as Collateral Agent of filing in the State of Michigan
#26860C filed 7/19/2001 covering all
personal property and filing in the
State of Missouri #2001-8004498 filed
7/19/2001 covering all personal property
KENTUCKY
Secretary of State clear
MICHIGAN
Secretary of State The Bank of Nova Scotia, 26860C 07/19/01 all personal property
as Collateral Agent
MISSOURI
Secretary of State The Bank of Nova Scotia, 200180044 7/19/2001 all personal property
as Collateral Agent 98
Mazak Corporation 3095749 11/22/99 equipment (1Mazak Vertical Machining Operating Lease
Impulse)
69
Mazak Corporation 3095750 11/22/99 equipment (1 Mazak Impulse) Operating Lease
Marion County Mazak Corporation 046841 11/24/99 equipment (1 Mazak Impulse) Operating Lease
Mazak Corporation 046842 11/24/99 equipment (1Mazak Vertical Machining Operating Lease
Impulse)
Monroe County clear
70
XVIII. Debtor: INTERMET ILLINOIS, INC.
JURISDICTION SECURED PARTY NUMBER DATE COLLATERAL DESCRIPTION
- ------------------ ------------------------- -------- --------- ---------------------------------------- ---------------------
ILLINOIS
Secretary of State The Bank of Nova Scotia, 7850492 11/18/2003 in filing to continue effectiveness of In lieu filing
as Collateral Agent filing in the State of Michigan #26848C
filed 7/19/2001 covering all personal
property
MICHIGAN
Secretary of State The Bank of Nova Scotia, 26848C 7/19/2001 all personal property
as Collateral Agent
71
XIX. Debtor: INTERMET U.S. HOLDING, INC.
JURISDICTION SECURED PARTY NUMBER DATE COLLATERAL DESCRIPTION
- ------------------ ------------------------- -------- --------- ---------------------------------------- ---------------------
DELAWARE
Secretary of State The Bank of Nova Scotia, 21421621 6/10/02 all personal property
as Collateral Agent
GEORGIA
Central Index clear
MICHIGAN
Secretary of State Clear
VIRGINIA
Secretary of State Clear
Independent City Clear
of Radford
72
SCHEDULE 7.3
CERTAIN EXISTING INVESTMENTS
Certain Investments to be made to purchase the remaining 25% of the shares of
Fundicao Nodular, SA that is not owned by Intermet Europe GmbH in an amount not
to exceed 4,750,000 Euros shall be permitted when due. Such Investment to be
made by Intermet Europe GmbH or some other Foreign Subsidiary of the Company.
73
SCHEDULE 7.4(iii)
CERTAIN CONTINGENT OBLIGATIONS
Guaranty by Intermet Corporation of certain facility leases and equipment leases
entered into by the Borrowers
Guaranty of obligations by certain Borrowers of the Prepetition Senior Credit
Facilities
See Schedule 7.9
SCHEDULE 7.9
EXISTING SALE LEASEBACKS
$35,000,000 Sale and Leaseback Transaction among Development Authority of
Columbus, Georgia, as Issuer and Lessor, Columbus Foundry, L.P., as Lessee, and
Intermet Corporation, as Guarantor on the Lease, pertaining to the manufacturing
facility of the Lessee in Muscogee County, Georgia known as the "Disa Expansion
Project."
$8,000,000 Sale and Leaseback Transaction between The Industrial Development
Board of the City of Jackson (Tennessee) and Tool Products, Inc.
75