Exhibit 10.1
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POST-PETITION CREDIT AGREEMENT
dated as of April 11, 2005,
among
EAGLEPICHER INCORPORATED,
THE GUARANTORS PARTY HERETO,
THE LENDERS PARTY HERETO
and
HARRIS TRUST AND SAVINGS BANK,
as DIP Agent
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TABLE OF CONTENTS
SECTION HEADING PAGE
ARTICLE I DEFINITIONS.................................................................. 2
Section 1.01. Defined Terms................................................................ 2
Section 1.02. Terms Generally.............................................................. 20
Section 1.03. Accounting Terms; GAAP....................................................... 21
ARTICLE II THE CREDITS.................................................................. 21
Section 2.01. Commitments.................................................................. 21
Section 2.02. Loans and Borrowings......................................................... 21
Section 2.03. Requests for Borrowings...................................................... 22
Section 2.04. Swingline Loans.............................................................. 22
Section 2.05. Letters of Credit............................................................ 23
Section 2.06. Funding of Borrowings........................................................ 28
Section 2.07. Intentionally Deleted........................................................ 28
Section 2.08. Termination and Reduction of Commitments..................................... 28
Section 2.09. Repayment of Loans; Evidence of Debt......................................... 29
Section 2.10. Prepayment of Loans.......................................................... 30
Section 2.11. Fees......................................................................... 31
Section 2.12. Interest..................................................................... 32
Section 2.13. Increased Costs.............................................................. 33
Section 2.14. Taxes........................................................................ 34
Section 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-Offs.................. 35
Section 2.16. Mitigation Obligations....................................................... 38
ARTICLE III REPRESENTATIONS AND WARRANTIES............................................... 38
Section 3.01. Organization; Powers......................................................... 38
Section 3.02. Authorization; Enforceability................................................ 39
Section 3.03. Governmental Approvals; No Conflicts......................................... 39
Section 3.04. Financial Condition; No Material Adverse Change.............................. 39
Section 3.05. Properties................................................................... 40
Section 3.06. Litigation and Environmental Matters......................................... 40
Section 3.07. Compliance with Laws and Agreements.......................................... 41
Section 3.08. Investment and Holding Company Status........................................ 41
Section 3.09. Taxes........................................................................ 41
Section 3.10. ERISA........................................................................ 41
Section 3.11. Disclosure................................................................... 41
Section 3.12. Subsidiaries................................................................. 42
Section 3.13. Insurance.................................................................... 42
Section 3.14. Labor Matters................................................................ 42
Section 3.15. Margin Regulations........................................................... 42
Section 3.16. Interim Financing Order...................................................... 42
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Section 3.17. Super-Priority Administrative Expense........................................ 43
ARTICLE IV CONDITIONS................................................................... 43
Section 4.01. Effective Date............................................................... 43
Section 4.02. Each Credit Event............................................................ 46
ARTICLE V AFFIRMATIVE COVENANTS........................................................ 47
Section 5.01. Financial Statements and Other Information................................... 47
Section 5.02. Notices of Material Events................................................... 49
Section 5.03. Information Regarding Collateral............................................. 50
Section 5.04. Existence; Conduct of Business............................................... 50
Section 5.05. Payment of Obligations....................................................... 50
Section 5.06. Maintenance of Properties.................................................... 50
Section 5.07. Insurance.................................................................... 51
Section 5.08. Casualty and Condemnation.................................................... 51
Section 5.09. Books and Records; Inspections............................................... 51
Section 5.10. Compliance with Laws......................................................... 51
Section 5.11. Use of Proceeds and Letters of Credit........................................ 52
Section 5.12. Investment Banking Firm Engagements.......................................... 52
Section 5.13. DIP Agent's Financial Consultant............................................. 52
Section 5.14. Foreign Subsidiary Distributions, Etc........................................ 53
Section 5.15. Further Assurances........................................................... 53
ARTICLE VI NEGATIVE COVENANTS........................................................... 53
Section 6.01. Indebtedness; Certain Equity Securities...................................... 53
Section 6.02. Liens........................................................................ 55
Section 6.03. Fundamental Changes.......................................................... 56
Section 6.04. Investments, Loans, Advances, Guarantees and Acquisitions.................... 56
Section 6.05. Asset Sales.................................................................. 58
Section 6.06. Sale and Leaseback Transactions.............................................. 58
Section 6.07. Swap Agreements.............................................................. 58
Section 6.08. Restricted Payments; Certain Payments of Indebtedness........................ 58
Section 6.09. Transactions with Affiliates................................................. 59
Section 6.10. Restrictive Agreements....................................................... 59
Section 6.11. Amendment of Material Documents.............................................. 59
Section 6.12. Chapter 11 Claims............................................................ 60
Section 6.13. Assets Purchases, Executory Contracts, Pre-Petition Debt and Payments
Outside the Ordinary Course of Business.................................. 60
Section 6.14. Limitation on Restrictions on Subsidiary Distributions....................... 60
Section 6.15. No Additional Subsidiaries; Inactive Subsidiaries; Receivables
Subsidiary............................................................... 60
ARTICLE VII EVENTS OF DEFAULT............................................................ 61
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ARTICLE VIII THE ADMINISTRATIVE AGENT..................................................... 66
ARTICLE IX. THE COLLATERAL............................................................... 68
Section 9.01. Security..................................................................... 68
Section 9.02. Perfection of Security Interests............................................. 69
Section 9.03. Receivables and Inventory Collections........................................ 69
Section 9.04. Cash Collateral Account...................................................... 69
Section 9.05. Rights of DIP Agent.......................................................... 70
Section 9.06. Performance by DIP Agent of Debtor's Post-Petition Obligations............... 70
Section 9.07. DIP Agent's Appointment as Attorney-in-Fact................................. 71
ARTICLE X GUARANTEE.................................................................... 73
Section 10.01. Guarantee.................................................................... 73
Section 10.02. Right of Contribution........................................................ 73
Section 10.03. No Subrogation............................................................... 74
Section 10.04. Amendments, Etc. with Respect to the Borrower Obligations.................... 74
Section 10.05. Guarantee Absolute and Unconditional......................................... 75
Section 10.06. Reinstatement................................................................ 75
Section 10.07. Payments..................................................................... 76
ARTICLE IX MISCELLANEOUS................................................................ 76
Section 11.01. Notices...................................................................... 76
Section 11.02. Waivers; Amendments.......................................................... 76
Section 11.03. Expenses; Indemnity; Damage Waiver........................................... 78
Section 11.04. Successors and Assigns....................................................... 79
Section 11.05. Survival..................................................................... 82
Section 11.06. Counterparts; Integration; Effectiveness..................................... 82
Section 11.07. Severability................................................................. 83
Section 11.08. Right of Set-Off............................................................. 83
Section 11.09. Governing Law; Jurisdiction; Consent to Service of Process................... 83
Section 11.10. Waiver of Jury Trial......................................................... 84
Section 11.11. Headings..................................................................... 84
Section 11.12. Confidentiality.............................................................. 84
Section 11.13. Interest Rate Limitation..................................................... 85
Section 11.14. Disclosure................................................................... 85
Section 11.15. No Modification; No Discharge; Survival of Claims............................ 85
Section 11.16. Pre-Petition Loan Documents.................................................. 85
Section 11.17. Bankruptcy Code Waivers...................................................... 86
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SCHEDULES:
Schedule 1.01(a) -- Inactive Subsidiaries
Schedule 1.01(b) -- Joint Ventures
Schedule 1.01(c) -- Initial Mortgaged Properties
Schedule 2.01 -- Commitments
Schedule 3.05 -- Real Property
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.04 -- Existing Investments
Schedule 6.10 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Borrowing Base Report
Exhibit B -- Interim Financing Order (with Budget attached)
Exhibit C -- Executory Contracts
Exhibit D -- Assignment and Assumption
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POST-PETITION CREDIT AGREEMENT
POST-PETITION CREDIT AGREEMENT, dated as of April 11, 2005, is by and
among EAGLEPICHER INCORPORATED, an Ohio corporation (the "Borrower"), as debtor
and debtor-in-possession in a case pending under Chapter 11 of the Bankruptcy
Code, and each of the parties executing this Agreement under the heading
"Guarantors" (each a "Guarantor" and collectively the "Guarantors"), each as
debtor and debtor-in-possession in a case pending under Chapter 11 of the
Bankruptcy Code (the Borrower and the Guarantors, each a "Debtor" and
collectively the "Debtors"), each of which Guarantors is a debtor and
debtor-in-possession in a case pending under Chapter 11 of the Bankruptcy Code
(the cases of the Borrower and the Guarantors who are Debtors, each a "Chapter
11 Case" and collectively the "Chapter 11 Cases"), the several banks and other
financial institutions or entities from time to time parties to this Agreement
(individually a "Lender" and collectively the "Lenders"), HARRIS TRUST AND
SAVINGS BANK, individually ("Harris") and as administrative and collateral agent
for the Lenders (in such capacity, the "DIP Agent").
PRELIMINARY STATEMENTS:
A. On April 11, 2005 (the "Petition Date"), the Borrower and the Guarantors
filed voluntary petitions for relief with the United States Bankruptcy Court for
the Southern District of Ohio, Western Division, initiating the Chapter 11 Cases
and have continued in possession of their assets and the management of their
businesses pursuant to Sections 1107 and 1108 of the Bankruptcy Code.
B. EaglePicher Holdings, Inc., a Delaware corporation ("Holdings"), as
debtor and debtor-in-possession in a Chapter 11 Case, owns all of the issued and
outstanding capital stock of the Borrower; and the Borrower owns, directly or
indirectly, all of the issued and outstanding capital stock or other equity
interests of each of the other Guarantors.
C. The Borrower and the Guarantors have requested that the Lenders enter
into certain financing arrangements with the Borrower pursuant to which the
Lenders may make loans and provide other financial accommodations to the
Borrower.
D. The Lenders are willing to make such loans and provide such financial
accommodations on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:
"1996 Confirmation Order" means the order of the United States
Bankruptcy for the Southern District of Ohio, Western Division, confirming the
1996 Plan of Reorganization.
"1996 Permanent Injunction" means the order of the United States
Bankruptcy for the Southern District of Ohio, Western Division, confirming the
1996 Plan of Reorganization, and permanently staying, restraining and enjoining
any entity from taking actions with respect to asbestos or lead injury claims
against the Borrower and certain of its subsidiaries designated as debtors in
such order.
"1996 Plan of Reorganization" means the Borrower's Third Amended
Consolidated Plan of Reorganization dated August 28, 1996, and confirmed by the
United States Bankruptcy Court, Southern District of Ohio, Western Division on
November 18, 1996, as the same may be amended from time to time in accordance
with Section 6.11.
"Adequate Protection Obligations" means all present and future
obligations of the Debtors under any order or orders of the Bankruptcy Court to
pay principal, interest, fees, costs, expenses and charges on or with respect to
the Pre-Petition Obligations under Sections 361 and 506(b) of the Bankruptcy
Code as set forth in the Interim Financing Order under any Final Financing Order
approved by the DIP Lenders.
"Administrative Expense Carve-Out" means the "Carve Out" as defined in
the Interim Financing Order and in any Final Financing Order approved by the DIP
Lenders.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agreement" means this Post-Petition Credit Agreement, as amended,
modified, or supplemented from time to time.
"Alternate Base Rate" means, for any day, a rate per annum equal to
the greatest of (a) the Prime Rate in effect on such day, and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
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"Applicable Percentage" means, with respect to any Lender, the
percentage of the total DIP Commitments represented by such Lender's DIP
Commitment. If the DIP Commitments have terminated or expired, the Applicable
Percentages shall be determined based upon the DIP Commitments most recently in
effect, giving effect to any assignments.
"Assignment and Assumption" means an assignment and assumption entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 11.04), and accepted by the DIP Agent, in the form attached
hereto as Exhibit D.
"Available Borrowing Base" means, at any time the same is to be
determined, the lesser of (A) the Cap Amount then in effect and (B) the
Borrowing Base at such time minus, to the extent not in respect of matters taken
into account in determining the Borrowing Base, reserves established by the DIP
Agent with notice to the Borrower from time to time (but in any event including,
without limitation, reserves for the Administrative Expense Carve-Out); provided
that the Borrowing Base shall be computed only as against and on so much of such
Collateral as is included on the certificates to be furnished from time to time
by the Borrower pursuant to this Agreement and, if required by the DIP Agent, as
verified by such other evidence required to be furnished to the DIP Agent
pursuant hereto.
"Bankruptcy Code" shall mean The Bankruptcy Reform Act of 1978, as
heretofore and hereafter amended, and codified as 11 U.S.C. Section 101 et seq.
"Bankruptcy Court" shall mean the United States Bankruptcy Court for
the Southern District of Ohio, Western Division, or any other court having
jurisdiction over the Chapter 11 Cases from time to time.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrower" is defined in the introductory paragraph of this Agreement.
"Borrowing Base" means, at any time the same is to be determined, 90%
of the Investment Base (determined net of credit memos relating to Eligible
Receivables included in the Investment Base) (as such terms are defined in Annex
X to the Receivables Sale Agreement and Receivables Purchase and Servicing
Agreement, each dated as of January 8, 2002, as amended by the First, Second,
Third, and Fourth Amendments thereto entered into prior to the date of this
Agreement, by and between certain Loan Parties and the Receivables Subsidiary,
and the Receivables Subsidiary, Redwood Receivables Corporation, the Borrower,
and General Electric Capital Corporation, respectively, in the forms heretofore
delivered to the DIP Agent ("Annex X"), the definitions of such terms as
appearing in Annex X together with all definitions of terms used therein and all
other provisions referred to in any of such agreements being incorporated herein
by reference, mutatis mutandis, in their entirety as though set forth fully
herein, provided, however that (i) the provisions so incorporated shall survive
any
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termination, amendment or modification to such provisions or the documents in
which they appear, (ii) all references therein to the "Administrative Agent"
shall be deemed references to the DIP Agent hereunder, (iii) Eligible
Receivables shall not include any Receivables which are not owned by the
Borrower or a Subsidiary Loan Party, (iv) all reserves and/or discretionary
adjustments and decisions heretofore made by the Administrative Agent (as that
term is defined in Annex X) shall be applicable in the computation of the
Borrowing Base unless and until changed by the DIP Agent, to the extent changes
are permitted by the terms of the documents in question, (v) references to
"Transferred Receivables" shall be references to Receivables of the Borrower or
a Subsidiary Loan Party on which the DIP Agent has a first priority perfected
Lien, (vi) references to the "Transfer Date" shall be deemed references to the
date a Receivable becomes an Eligible Receivable, (vii) references to the
"Originator" shall be references to the Borrower or a Subsidiary Loan Party,
(viii) references to the "Purchasers" shall be deemed references to the Lenders,
and (ix) the existence of the Liens securing Pre-Petition Obligations shall be
deemed permitted.
"Borrowing Base Report" shall mean a Borrowing Base Report in the form
of Exhibit A hereto.
"Borrowing" means (a) DIP Loans made on the same date or (b) a
Swingline Loan.
"Borrowing Request" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
"Budget" means the budget projecting the Debtors' budgeted cash
receipts and disbursements on a weekly basis from the Petition Date through the
Maturity Date delivered to satisfy the requirements of Section 4.01 hereof and
attached to the Interim Financing Order, as such budget may from time to time be
extended or otherwise modified with the consent of the Required Lenders.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City and Chicago, Illinois, are
authorized or required by law to remain closed.
"BV Loans" means loans made by Eagle-Picher Industries Europe, B.V.
("BV"), to the Borrower in an aggregate principal amount not to exceed the sum
of $14,500,000 plus the aggregate amount of cash flows from the operations of BV
for each fiscal year of BV, commencing with the fiscal year ended November 30,
2003, provided that such loans shall (a) mature no earlier than the date that is
180 days after the Maturity Date and (b) be expressly subordinated to the
Obligations on terms reasonably satisfactory to the DIP Agent.
"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required
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to be classified and accounted for as capital leases on a balance sheet of such
Person under GAAP, and the amount of such obligations shall be the capitalized
amount thereof determined in accordance with GAAP.
"Cap Amount" means $43,000,000, or such greater amount (not in excess
of the DIP Commitment) approved by all of the DIP Lenders.
"Cash Collateral" shall mean the cash collateral (within the meaning
of Section 363 of the Bankruptcy Code) subject to the Liens securing the
Obligations or any portion thereof.
"Cash Collateral Account" shall have the meaning set forth in Section
9.04 hereof.
"Certificate of Designations" means the Certificate of Designation,
Preferences and Rights relating to the Existing Preferred Stock, as filed with
the Secretary of State of Delaware on February 23, 1998, as the same may be
amended from time to time in accordance with Section 6.11.
"Change in Control" means (a) the acquisition of ownership, directly
or indirectly, beneficially or of record, by any Person other than Holdings of
any Equity Interests in the Borrower, (b) the failure by Granaria to
beneficially own (as defined in the Exchange Act), directly or indirectly,
Equity Interests in Holdings representing at least 51% of each of the aggregate
ordinary voting power and aggregate value represented by the issued and
outstanding Equity Interests in Holdings, (c) the occupation of a majority of
the seats (other than vacant seats) on the board of directors of Holdings by
Persons who were neither nominated nor appointed by a majority of the board of
directors of Holdings nor elected by Granaria, (d) the failure by Granaria to
retain the right to vote, or direct the voting of, directly or indirectly, more
than 75% of the issued and outstanding Existing Preferred Stock, or (e) the
occurrence of any change of control or similar event, however denominated, as
defined in (i) the Senior Debt Documents, (ii) the Certificate of Designations
or the certificate of designations related to any Refinancing Preferred Stock,
or (iii) the Industrial Revenue Bonds.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.14(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Chapter 11 Case" shall have the meaning set forth in the preamble
hereof.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
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"Collateral" shall have the meaning set forth in Section 9.01 hereof.
"Collection Account" shall have the meaning set forth in Section 9.03
hereof.
"Commitment" means the DIP Commitment.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Costs of Reorganization" means all legal, professional and advisory
fees paid by the Debtors (whether or not incurred by the Debtors) in connection
with the Chapter 11 Cases as set forth in the Budget and approved in the
Financing Order or as may be otherwise approved from time to time by the
Bankruptcy Court, subject to the Lenders' and the DIP Agent's right to object
thereto.
"Debtor" shall have the meaning specified in the first paragraph of
this Agreement.
"Default" means any event or condition that constitutes an Event of
Default or that upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DIP Agent" shall have the meaning specified in the first paragraph of
this Agreement, and also includes any successor DIP Agent pursuant to Article
VIII hereof.
"DIP Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the DIP Commitments.
"DIP Commitment" means, with respect to each Lender, the commitment,
if any, of such Lender to make DIP Loans and to acquire participations in
Letters of Credit and Swingline Loans hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender's DIP Exposure
hereunder, as such commitment may be (a) reduced from time to time pursuant to
the terms hereof and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 11.04. The initial amount
of each Lender's DIP Commitment is set forth on Schedule 2.01, or in the
Assignment and Assumption pursuant to which such Lender shall have assumed its
DIP Commitment, as applicable. The initial aggregate amount of the Lenders' DIP
Commitments is $50,000,000.
"DIP Credit" means the debtor-in-possession credit facility for Loans
and Letters of Credit extended to the Borrower by the Lenders hereunder.
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"DIP Exposure" means, with respect to any Lender at any time, the sum
of the outstanding principal amount of such Lender's DIP Loans and its LC
Exposure and Swingline Exposure at such time.
"DIP Loan" means a Loan made pursuant to Section 2.01.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
"Disposition" means the sale, lease, conveyance or other disposition
(including casualty and condemnation) of any assets or property.
"Dollars" or "$" refers to lawful money of the United States of
America.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 11.02).
"Environmental Laws" means all former, current and future Federal,
state, local and foreign laws (including common law), treaties, regulations,
rules, ordinances, codes, decrees, judgments, directives, final orders
(including consent orders), and agreements in each case, relating to protection
of the environment, natural resources, human health and safety or the presence,
Release of, or exposure to, Hazardous Materials, or the generation, manufacture,
processing, distribution, use, treatment, storage, transport, recycling or
handling of, or the arrangement for such activities with respect to, Hazardous
Materials.
"Environmental Liability" means liabilities, obligations, claims,
actions, suits, judgments or orders under or relating to any Environmental Law
for any damages, injunctive relief, losses, fines, penalties, fees, expenses
(including reasonable fees and expenses of attorneys and consultants) or costs,
whether contingent or otherwise, including those arising from or relating to:
(a) compliance or non-compliance with any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the Release of any
Hazardous Materials or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.
"EPTEC Loans" means loans made by the Borrower to EPTEC, S.A. de C.V.,
after August 7, 2003, in an aggregate principal amount not to exceed $5,000,000
at any time outstanding.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
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"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived), (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived, (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan, (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan,
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan, (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Essential Trade Creditor" means (a) essential trade creditors who
agree to provide goods and services to the Debtors on a normal and customary
basis, and (b) the holders of certain tax claims and certain employee related
claims to the extent provided for in the Budget or, if not provided for in the
Budget, to the extent mutually agreed upon by the Borrower and the DIP Agent.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Excluded Taxes" means, with respect to the DIP Agent, any Lender, the
Issuing Bank or any other recipient of any payment to be made by or on account
of any obligation of the Borrower hereunder, (a) income or franchise taxes
imposed on (or measured by) its net income by the United States of America, or
by the jurisdiction under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which
its applicable lending office is located, (b) any branch profits taxes imposed
by the United States of America or any similar tax imposed by any other
jurisdiction described in clause (a) above and (c) in the case of a Foreign
Lender, any withholding tax that (i) is in effect, and would apply to amounts
payable to such Foreign Lender, at the time such Foreign Lender becomes party to
this Agreement (or designates a new lending office), except to the extent that
(A) such Foreign Lender was entitled at the time of its designation of a new
lending office or (B) such Foreign Lender's assignor, if any, was entitled at
the time of assignment to receive additional amounts from the Borrower with
respect to any withholding tax pursuant to Section 2.14(a), or (ii) is
attributable to such Foreign Lender's failure to comply with Section 2.14(e).
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"Existing Preferred Stock" means the 11.75% Series A Cumulative
Redeemable Exchangeable Preferred Stock and the 11.75% Series B Cumulative
Redeemable Exchangeable Preferred Stock of Holdings issued pursuant to the
Certificate of Designations.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the DIP Agent from three Federal funds brokers of
recognized standing selected by it.
"Final Financing Order" means a final order of the Bankruptcy Court
authorizing and approving the DIP Credit on terms and conditions no less
favorable to the Lenders than those contained in the Interim Financing Order, in
substantially the form of the Interim Financing Order and otherwise acceptable
to the DIP Lenders as to form and substance.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"Financing Order" means the Interim Financing Order prior to entry of
the Final Financing Order and the Final Financing Order at all times thereafter.
"Foreign Lender" means any Lender that is organized under the laws of
a jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof, and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized under the
laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"Foreign Subsidiary Distribution" means any cash dividend or other
cash distribution with respect to any Equity Interest of the Borrower or any
Guarantor in any Foreign Subsidiary or any cash payment, including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any Equity Interest of the Borrower
or any Guarantor in such Foreign Subsidiary or any option, warrant or other
right to acquire any such Equity Interest of the Borrower or any Guarantor in
such Foreign Subsidiary.
"Foreign Subsidiary Loans" means loans made by any Foreign Subsidiary
to the Borrower in an aggregate principal amount not to exceed the aggregate
amount of cash on hand from such Foreign Subsidiary, commencing after August 7,
2003, provided that
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such loans shall (a) mature no earlier than the date that is 180 days after the
Maturity Date and (b) be expressly subordinated to the Obligations on terms
reasonably satisfactory to the DIP Agent.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States of
America, or any other nation, and any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Granaria" means Granaria Holdings N.V., a Dutch corporation, and its
successors.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"Guarantor" means Holdings, the Subsidiary Loan Parties, and any
Person that is at any time a guarantor hereunder or under any separate Guaranty.
"Guaranty" means Article X of this Agreement and other guaranty
agreements in form and substance acceptable to the DIP Agent pursuant to which
any Person Guarantees the payment and performance of any or all of the
Post-Petition Obligations and the Adequate Protection Obligations, as the same
may be supplemented, amended, restated or otherwise modified from time to time
and any agreement entered into in substitution therefor or replacement thereof.
"Harris" shall have the meaning specified in the first paragraph of
this Agreement.
"Hazardous Materials" means (a) any petroleum products or byproducts
and all other hydrocarbons, coal ash, radon gas, asbestos, urea formaldehyde
foam insulation,
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polychlorinated biphenyls, chlorofluorocarbons and all other ozone-depleting
substances or (b) any chemical, material, substance or waste that is prohibited,
limited or regulated by or pursuant to any Environmental Law.
"Holdings" is defined in Preliminary Statement B of this Agreement.
"Inactive Subsidiary" means a Subsidiary listed on Schedule 1.01(a);
provided that (a) the Borrower intends to dissolve, liquidate, wind-up or take
other similar action in respect of such Subsidiary as promptly as reasonably
practicable, (b) such Subsidiary has no business or operations and conducts no
activities other than those activities reasonably necessary to the maintenance
or dissolution of such Subsidiary, (c) such Subsidiary does not incur any
Indebtedness or other liabilities (other than reasonable fees of attorneys and
accountants and other de minimis fees in connection with such maintenance,
dissolution, liquidation, winding up or similar process) after August 7, 2003,
and (d) the Inactive Subsidiaries as a group shall not have more than $100,000
in assets.
"Incur" shall have the same meaning as defined in Section 6.12 hereof.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid
(other than current trade accounts payable incurred in the ordinary course), (d)
all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) to the extent
determinable, all obligations of such Person in respect of the deferred purchase
price of property or services (excluding current accounts payable and expense
accruals incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h)
all Capital Lease Obligations of such Person, (i) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty, and (j) all obligations, contingent or otherwise, of
such Person in respect of bankers' acceptances. The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Industrial Revenue Bonds" means the (a) State of Oregon Economic
Development Revenue Bonds, Series XCVI (Eagle-Picher Industries, Inc. Project),
dated December 1, 1984, and (b) Michigan Strategic Fund Federally Taxable
Variable Rate Demand Limited Obligation Revenue Bonds (Carpenter Enterprise
Limited Project), Series 1996.
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"Interest Payment Date" means (a) with respect to any DIP Loan, the
last day of each month, and (b) with respect to any Swingline Loan, the day that
such Loan is required to be repaid.
"Interim Financing Order" means an order entered by the Bankruptcy
Court on an interim basis after notice given in a hearing conducted in
accordance with Bankruptcy Rule 4001(c) and in substantially the form attached
hereto as Exhibit B.
"Issuing Bank" means Harris Trust and Savings Bank, in its capacity as
the issuer of Letters of Credit hereunder, and its successors in such capacity
as provided in Section 2.05(i). The Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of the Issuing
Bank, in which case the term "Issuing Bank" shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.
"Joint Venture" means any corporation, partnership or other entity or
arrangement in which the Borrower or any Subsidiary owns or controls any, but
not more than 70%, of the Equity Interests. As of the Effective Date, no Joint
Ventures exist other than those set forth on Schedule 1.01(b).
"LC Application" is defined in Section 2.05(b).
"LC Disbursement" means a payment made by the Issuing Bank pursuant to
a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such time. The LC Exposure of any Lender at any time shall be
its Applicable Percentage of the total LC Exposure at such time.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption. Unless the context otherwise requires, the term
"Lenders" includes the Swingline Lender.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset, and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
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"Lien Finding" means an order of the Bankruptcy Court in form and
substance satisfactory to the DIP Agent finding that the Pre-Petition Lenders
are fully secured by the Pre-Petition Collateral (as hereinafter defined) by
means of a valid, first priority, senior, fully perfected and non-avoidable
security interest and lien on the Pre-Petition Collateral, excluding only
Permitted Liens permitted by the Interim Financing Order, and any Final
Financing Order acceptable to the DIP Lenders which are not avoidable.
"Lien Validation Process" means the procedure set forth in the Interim
Financing Order for dealing with objections to the validity of the Liens in the
Pre-Petition Collateral or confirming such Liens in the absence of any objection
thereto.
"Loan" means any loan made by a Lender to the Borrower pursuant to
this Agreement.
"Loan Documents" means this Agreement, the promissory notes (if any)
issued hereunder, the LC Applications, Security Documents, and the Financing
Order.
"Loan Parties" means Holdings, the Borrower, and the Subsidiary Loan
Parties.
"Long-Term Indebtedness" means any Indebtedness that, in accordance
with GAAP, constitutes (or, when incurred, constituted) a long-term liability.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations or condition, financial or otherwise, of the Loan
Parties taken as a whole or of Holdings, the Borrower and their Subsidiaries
taken as a whole, (b) the ability of any Loan Party to perform any of its
obligations under any Loan Document or (c) the rights of or benefits available
to the DIP Agent or any of the Lenders under any Loan Document.
"Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Swap Agreements, of
any one or more of Holdings, the Borrower or any Subsidiary in an aggregate
principal amount exceeding $5,000,000. For purposes of determining Material
Indebtedness, the "principal amount" of the obligations of Holdings, the
Borrower or any Subsidiary in respect of any Swap Agreement at any time shall be
the maximum aggregate amount (giving effect to any netting arrangements) that
Holdings, the Borrower or such Subsidiary would be required to pay if such Swap
Agreement were terminated at such time.
"Maturity Date" means the earlier of (a) the date on which the Final
Financing Order is granted by the Court or (b) forty-five (45) days following
the Petition Date, or such later date as may be agreed upon in writing by the
Borrower and all of the Lenders.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document (including, without
limitation, the
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Financing Order) granting a Lien on any Mortgaged Property to secure the
Post-Petition and the Adequate Protection Obligations or any part thereof. Each
Mortgage shall be satisfactory in form and substance to the DIP Agent.
"Mortgaged Property" means, initially, each parcel of real property
and the improvements thereto owned by a Loan Party and identified on Schedule
1.01(c), and includes each other parcel of real property and improvements
thereto with respect to which a Mortgage is granted pursuant to Section 5.12 or
5.13.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Cash Proceeds" means, as applicable, (a) with respect to any
Disposition by a Person, cash and cash equivalent proceeds received by or for
such Person's account, net of (i) reasonable direct costs relating to such
Disposition, including reasonable investment banking fees, reasonable legal and
accounting fees and other reasonable fees and expenses, (ii) sale, use or other
transactional taxes and income taxes paid or payable by such Person or any
Person with respect to which such Person files a consolidated return as a direct
result of such Disposition (after giving effect to any available deductions,
credits, carry forwards, carry backs or other items which would reduce any
actual tax payable), provided, however, that Net Cash Proceeds shall not include
any casualty or condemnation proceeds if and to the extent that (x) the relevant
Loan Party has elected to use such proceeds to repair, rebuild, or replace the
assets subject to such casualty or condemnation, (y) no Event of Default exists,
and (z) for proceeds in excess of $5,000,000 with respect to any single casualty
or condemnation event, the Lenders have approved such repair, rebuilding or
replacement. Any property so repaired, rebuilt, or replaced shall constitute
Post-Petition Collateral and subject to a replacement lien in favor of the
Pre-petition Lenders.
"Normalized Trade Creditor" means an Essential Trade Creditor that is
a trade creditor and has executed an agreement (in form and substance reasonably
satisfactory to the DIP Agent) with the relevant Loan Party pursuant to which
such Essential Trade Creditor agrees to continue to extend credit and supply
goods and/or services to the Borrower in accordance with industry standards and
enhanced terms (favorable to the relevant Loan Party) acceptable to the DIP
Agent and consistent with the assumptions used in the projections of the
Borrower or the relevant Guarantor that support feasibility of the Borrower and
that have been approved by the DIP Agent.
"Obligations" shall mean the Pre-Petition Obligations, the
Post-Petition Obligations, and the Adequate Protection Obligations.
"Other Taxes" means any and all present or future recording, stamp,
documentary, excise, transfer, sales, property or similar taxes, charges or
levies arising from any payment made under any Loan Document or from the
execution, delivery, registration or enforcement of, or otherwise with respect
to, any Loan Document.
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"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes or assessments that are not
yet due or are being contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not
overdue by more than 30 days or are being contested in compliance with
Section 5.05;
(c) pledges and deposits made in the ordinary course of business
in compliance with workers' compensation, unemployment insurance and
other social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature, in each case in the
ordinary course of business;
(e) judgment liens in respect of judgments that do not constitute
an Event of Default under clause (k) of Article VII; and
(f) easements, zoning restrictions, rights-of-way, covenants,
conditions, restrictions and similar encumbrances on real property
imposed by law or arising in the ordinary course of business that do
not secure any monetary obligations and do not materially detract from
the value of the affected property or interfere with the ordinary
conduct of business of the Borrower or any Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations
are backed by the full faith and credit of the United States of
America), in each case maturing within one year from the date of
acquisition thereof;
(b) investments in commercial paper maturing within 270 days from
the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Moody's;
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(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of any commercial bank
organized or licensed under the laws of the United States of America or
any State thereof which has a combined capital and surplus and undivided
profits of not less than $500,000,000; and
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and entered
into with a financial institution satisfying the criteria described in
clause (c) above.
"Permitted Liens" shall have the same meaning herein as such term is
defined under the Interim Financing Order and any Final Financing Order
acceptable to the DIP Lenders.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Personal Injury Trust" means the personal injury trust established
pursuant to the 1996 Plan of Reorganization.
"Petition Date" is defined in Preliminary Statement A of this Agreement.
"Petty Cash and Payroll Accounts" shall have the meaning specified in
Section 9.03 hereof.
"Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Post-Petition Obligations" means any and all present and future
indebtedness, obligations and liabilities, fixed or contingent, of the Borrower
and the Guarantors to the Lenders or the DIP Agent arising under or in
connection with this Agreement, the Financing Order or the other Loan Documents
or evidenced by promissory notes (if any) issued by the Borrower hereunder or in
connection with the Letters of Credit, including without limitation the payment
of the principal of and interest on the Loans and the reimbursement obligations
with respect to Letters of Credit.
"Preferred Dividends" means any cash dividend payments made in respect of
the Existing Preferred Stock.
"Pre-Petition Agent" means Harris Trust and Savings Bank in its capacity
as administrative agent under the Pre-Petition Credit Agreement.
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"Pre-Petition Collateral" means all collateral security for the
Pre-Petition Obligations which was in existence as of the Petition Date and all
proceeds thereof (including as such, accounts arising from the sale of inventory
on which the Pre-Petition Agent had a Lien as of the Petition Date).
"Pre-Petition Credit Agreement" shall mean that certain Credit Agreement
dated as of August 7, 2003, by and between the Borrower, the several lenders
from time to time parties thereto, and Harris Trust and Savings Bank, as
administrative agent, as the same has from time to time been modified or
amended.
"Pre-Petition Credits" means the loans and letters of credit provided for
by the Pre-Petition Credit Agreement.
"Pre-Petition Guarantee and Collateral Agreement" means the Guarantee and
Collateral Agreement dated as of August 7, 2003, from Holdings, the Borrower,
and certain Subsidiaries to the Pre-Petition Agent, as the same may be
supplemented, amended, restated or otherwise modified from time to time and any
agreement entered into in substitution therefor or replacement thereof.
"Pre-Petition Lenders" means the several lenders from time to time parties
to the Pre-Petition Credit Agreement.
"Pre-Petition Loan Documents" means the Pre-Petition Credit Agreement, the
Pre-Petition Security Documents and any other security agreement, pledge
agreement, trust deed, mortgage, collateral assignment, financing statement or
other instrument or agreement executed and delivered in connection therewith.
"Pre-Petition Mortgages" means any and all mortgages, deeds of trust,
deeds to secured debt and other instruments or documents granting or creating a
Lien on real property (or any interest therein) at any time delivered to the
Pre-Petition Agent or any Pre-Petition Lender to provide collateral security for
any indebtedness, obligations and liabilities of the Borrower or any Guarantor
under the Pre-Petition Loan Documents.
"Pre-Petition Obligations" means all the indebtedness, obligations, and
liabilities, fixed or contingent, of Holdings, the Borrower and its Subsidiaries
to the Pre-Petition Lenders or the Pre-Petition Agent arising or in connection
with the Pre-Petition Credit Agreement or evidenced by the promissory notes
issued by the Borrower thereunder or in connection with the letters of credit
issued by the Pre-Petition Lenders thereunder, including without limitation the
payment of the principal of and interest on the loans and the reimbursement
obligations with respect to the Pre-Petition Credits and all amounts relating to
Swap Agreements entitled to the benefits and security of the Pre-Petition Loan
Documents.
"Pre-Petition Security Documents" shall mean the Pre-Petition Mortgages,
the Pre-Petition Guarantee and Collateral Agreement, various patent collateral
agreements and trademark collateral agreements executed and delivered by the
Borrower and certain
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of its Subsidiaries to the Pre-Petition Agent, the various mortgages and deeds
of trust made from time to time by various Debtors in favor of, or for the
benefit of, the Pre-Petition Agent and all other security documents delivered to
the Pre-Petition Agent granting a Lien on Property of any Person to secure the
obligations and liabilities of any Debtor under the Pre-Petition Loan Documents.
"Prime Rate" means the rate of interest per annum announced or otherwise
established from time to time by the DIP Agent as its prime rate in effect at
its principal office in Chicago, Illinois; each change in the Prime Rate shall
be effective from and including the date such change is publicly announced as
being effective.
"Receivables Subsidiary" means EaglePicher Funding Corporation, a
Delaware corporation.
"Refinancing Preferred Stock" means preferred Equity Interests issued by
Holdings for the purpose of redeeming outstanding Existing Preferred Stock or
previously issued Refinancing Preferred Stock, in either case that shall (a) not
require cash dividends to be paid, (b) not be mandatorily redeemable, (c) be
subordinate to the Obligations, and (d) have other terms and conditions no less
favorable to the Lenders than the terms and conditions of the Existing Preferred
Stock.
"Register" has the meaning set forth in Section 11.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Release" means any release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration into or
through the environment or within or upon any building, structure, facility or
fixture.
"Required Lenders" means (a) if there are fewer than three (3) Lenders,
all the Lenders and (b) if there are three (3) or more Lenders, Lenders having
DIP Exposures and unused Commitments representing more than 66 2/3% of the sum
of the total DIP Exposures and unused Commitments at such time.
"Restricted Payment" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any Equity Interests in
Holdings, the Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any Equity Interests in Holdings, the Borrower or any Subsidiary
or any option, warrant or other right to acquire any such Equity Interests in
Holdings, the Borrower or any Subsidiary.
"S&P" means Standard & Poor's.
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"Security Documents" shall mean this Agreement, the Financing Order and
all security documents hereafter delivered to the DIP Agent granting a Lien on
any Property of any Person to secure the Post-Petition Obligations.
"Senior Debt" means the senior unsecured notes issued by the Borrower on
or about August 7, 2003, in an aggregate principal amount of up to $250,000,000
and the indebtedness represented thereby.
"Senior Debt Documents" means the indenture under which the Senior Debt,
if any, is issued and all other instruments, agreements and other documents
evidencing or governing the Senior Debt, if any, or providing for any Guarantee
or other right in respect thereof.
"subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower other than (a) the
Receivables Subsidiary, (b) any Joint Venture or (c) any Inactive Subsidiary.
"Subsidiary Loan Party" means any Subsidiary (other than any Foreign
Subsidiary) that is also a Debtor in a Chapter 11 Case.
"Superpriority Claim" shall mean a claim against the Borrower or any of
the Guarantors in any of the Chapter 11 Cases which is an administrative expense
claim with the priority authorized under Section 364(c)(1) of the Bankruptcy
Code, with priority over any or all administrative expenses of the kind
specified in Sections 503(b) or 507 of the Bankruptcy Code and over any or all
other costs and expenses of the kind specified in, or ordered pursuant to,
Sections 105, 326, 330, 331, 506(c) or 726 of the Bankruptcy Code. When used
with reference to the claims of the DIP Agent, the Lenders, the Pre-Petition
Agent, and the Pre-Petition Lenders in respect of the Post-Petition Obligations
or Adequate Protection Obligations, the term Superpriority Claim shall mean a
claim which has priority over all such costs and expenses. When used with
reference to any other party, such party shall have a Superpriority Claim if its
claim is an administrative expense claim having priority over any administrative
expenses of the kind specified in Sections 503(b) or 507 of the Bankruptcy Code
or any of such other costs and expenses.
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"Swap Agreement" means any agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, commodities, equity or
debt instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions; provided that no phantom
stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
the Borrower or the Subsidiaries shall be a Swap Agreement.
"Swingline Exposure" means, at any time, the aggregate principal amount of
all Swingline Loans outstanding at such time. The Swingline Exposure of any
Lender at any time shall be its Applicable Percentage of the total Swingline
Exposure at such time.
"Swingline Lender" means Harris Trust and Savings Bank, in its capacity as
a lender of Swingline Loans hereunder.
"Swingline Loan" means a Loan made pursuant to Section 2.04.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Termination Date" shall mean the earliest to occur of the following: (a)
the Maturity Date; (b) the date that a plan of reorganization confirmed by an
order of the Bankruptcy Court entered pursuant to Sections 1129 and 1141 of the
Bankruptcy Code becomes effective pursuant to its terms; or (c) the date on
which the Lenders terminate the DIP Commitments after the occurrence of an Event
of Default and after three (3) Business Days prior written notice by the DIP
Agent to the Borrower of such Event of Default and of the Lenders' intention to
terminate the DIP Commitments as a result thereof.
"Transactions" means the execution, delivery and performance by each Loan
Party of the Loan Documents to which it is to be a party, the borrowing of
Loans, the use of the proceeds thereof and the issuance of Letters of Credit
hereunder.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
Section 1.02. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to
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time amended, supplemented or otherwise modified (subject to any restrictions on
such amendments, supplements or modifications set forth herein), (b) any
reference herein to any Person shall be construed to include such Person's
successors and assigns, (c) the words "herein", "hereof" and "hereunder", and
words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all references herein
to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e)
the words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
Section 1.03. Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrower notifies the DIP Agent that the Borrower requests an amendment to any
provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application thereof on the operation of such provision
(or if the DIP Agent notifies the Borrower that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.
ARTICLE II
THE CREDITS
Section 2.01. Commitments. Subject to the terms and conditions set forth
herein, each Lender agrees to make DIP Loans to the Borrower from time to time
during the DIP Availability Period in an aggregate principal amount that will
not result in such Lender's DIP Exposure exceeding such Lender's Commitment or,
if less, such Lender's Applicable Percentage of the sum of the Available
Borrowing Base minus the LC Exposure and Swing Line Exposure at such time.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow DIP Loans.
Section 2.02. Loans and Borrowings. (a) Each Loan (other than a Swingline
Loan) shall be made as part of a Borrowing made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender's failure to make Loans
as required.
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(b) At the time that each Borrowing of DIP Loans is made, such Borrowing
shall be in an aggregate amount that is an integral multiple of $100,000 and not
less than $1,000,000; provided that a Borrowing of DIP Loans may be in an
aggregate amount that is equal to the entire unused balance of the total
Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.05(e). Each Swingline Loan shall be in
an amount that is an integral multiple of $100,000 and not less than $100,000.
Section 2.03. Requests for Borrowings. To request a Borrowing of DIP Loans,
the Borrower shall notify the DIP Agent of such request by telephone not later
than 1:00 p.m., New York City time, one Business Day before the date of the
proposed Borrowing; provided that any such notice of a Borrowing to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.05(e) shall be
given not later than 10:00 a.m., New York City time, on the date of the proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or facsimile to the DIP Agent of a
written Borrowing Request in a form approved by the DIP Agent and signed by the
Borrower. Each such telephonic and written Borrowing Request shall specify the
following information in compliance with Section 2.02:
(i) the aggregate amount of such Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day; and
(iii) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.06.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the DIP Agent shall advise each Lender of the details thereof and of
the amount of such Lender's Loan to be made as part of the requested Borrowing.
Section 2.04. Swingline Loans. (a) Subject to the terms and conditions set
forth herein, the Swingline Lender agrees to make Swingline Loans to the
Borrower from time to time during the DIP Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of outstanding Swingline Loans exceeding $5,000,000
or (ii) the sum of the total DIP Exposures exceeding the lesser of the total DIP
Commitments and the Available Borrowing Base at such time; provided that the
Swingline Lender shall not be required to make a Swingline Loan to refinance an
outstanding Swingline Loan. Within the foregoing limits and subject to the terms
and conditions set forth herein, the Borrower may borrow, prepay and reborrow
Swingline Loans.
(b) To request a Swingline Loan, the Borrower shall notify the DIP Agent of
such request by telephone (confirmed by facsimile), not later than 1:00 p.m.,
New York City time, on the day of a proposed Swingline Loan. Each such notice
shall be irrevocable and shall specify the (i) requested date (which shall be a
Business Day) and (ii) amount of the requested Swingline Loan. The DIP Agent
will promptly advise the
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Swingline Lender of any such notice received from the Borrower. The Swingline
Lender shall make each Swingline Loan available to the Borrower by means of a
credit to the general deposit account of the Borrower with the Swingline Lender
(or, in the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.05(e), by remittance to the Issuing Bank)
by 3:00 p.m., New York City time, on the requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the DIP Agent not
later than 1:00 p.m., New York City time, on any Business Day require the
Lenders to acquire participations on such Business Day in all or a portion of
the Swingline Loans outstanding. Such notice shall specify the aggregate amount
of the Swingline Loans in which Lenders will participate. Promptly upon receipt
of such notice, the DIP Agent will give notice thereof to each Lender,
specifying in such notice such Lender's Applicable Percentage of such Swingline
Loan or Loans. Each Lender hereby absolutely and unconditionally agrees, upon
receipt of notice as provided above, to pay to the DIP Agent, for the account of
the Swingline Lender, such Lender's Applicable Percentage of such Swingline Loan
or Loans. Each Lender acknowledges and agrees that, except in respect of a
Swingline Loan made following the delivery by the Borrower or a Lender to the
Swingline Lender of written notice of a Default, its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever. Each Lender shall
comply with its obligation under this paragraph by wire transfer of immediately
available funds, in the same manner as provided in Section 2.06 with respect to
Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to
the payment obligations of the Lenders), and the DIP Agent shall promptly pay to
the Swingline Lender the amounts so received by it from the Lenders. The DIP
Agent shall notify the Borrower of any participations in any Swingline Loan
acquired pursuant to this paragraph, and thereafter payments in respect of such
Swingline Loan shall be made to the DIP Agent and not to the Swingline Lender.
Any amounts received by the Swingline Lender from the Borrower (or other party
on behalf of the Borrower) in respect of a Swingline Loan after receipt by the
Swingline Lender of the proceeds of a sale of participations therein shall be
promptly remitted to the DIP Agent; any such amounts received by the DIP Agent
shall be promptly remitted by the DIP Agent to the Lenders that shall have made
their payments pursuant to this paragraph and to the Swingline Lender, as their
interests may appear. The purchase of participations in a Swingline Loan
pursuant to this paragraph shall not relieve the Borrower of any default in the
payment thereof.
Section 2.05. Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Borrower may request the issuance of Letters of
Credit for its own account, in a form reasonably acceptable to the DIP Agent and
the Issuing Bank, at any time and from time to time during the DIP Availability
Period. In the event of any inconsistency between the terms and conditions of
this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the
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Borrower to, or entered into by the Borrower with, the Issuing Bank relating to
any Letter of Credit, the terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
To request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or facsimile (or transmit by electronic communication, if arrangements for doing
so have been approved by the Issuing Bank) to the Issuing Bank and the DIP Agent
(reasonably in advance of the requested date of issuance, amendment, renewal or
extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall be
a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Bank, the Borrower also shall submit a
letter of credit application on the Issuing Bank's standard form in connection
with any request for a Letter of Credit (herein, a "LC Application"). A Letter
of Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed
$5,000,000 and (ii) the total DIP Exposures shall not exceed the lesser of the
total DIP Commitments and the Available Borrowing Base at such time.
(c) Expiration Date. Each Letter of Credit shall expire at or prior to the
close of business on the date that is one year after the date of the issuance of
such Letter of Credit (or, in the case of any renewal or extension thereof, one
year after such renewal or extension).
(d) Participations. By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit increasing the amount thereof) and without any further
action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby
grants to each Lender, and each Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the DIP Agent, for the account
of the Issuing Bank, such Lender's Applicable Percentage of each LC Disbursement
made by the Issuing Bank and not reimbursed by the Borrower on the date due as
provided in paragraph (e) of this Section, or of any reimbursement payment
required to be refunded to the Borrower for any reason. Each Lender acknowledges
and agrees that, except in respect of a Letter of Credit (other than an
amendment, renewal or extension thereof) issued following the delivery by the
Borrower or a Lender to the Issuing Bank of a written notice of a Default, its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a
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Default or reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement
by paying to the DIP Agent an amount equal to such LC Disbursement not later
than 12:00 noon, New York City time, on the date that such LC Disbursement is
made, if the Borrower shall have received notice of such LC Disbursement prior
to 10:00 a.m., New York City time, on such date, or, if such notice has not been
received by the Borrower prior to such time on such date, then not later than
12:00 noon, New York City time, on (i) the Business Day that the Borrower
receives such notice, if such notice is received prior to 10:00 a.m., New York
City time, on the day of receipt, or (ii) the Business Day immediately following
the day that the Borrower receives such notice, if such notice is not received
prior to such time on the day of receipt; provided that the Borrower may,
subject to the conditions to borrowing set forth herein, request in accordance
with Section 2.03 or 2.04 that such payment be financed with a Borrowing of DIP
Loans or a Swingline Loan in an equivalent amount and, to the extent so
financed, the Borrower's obligation to make such payment shall be discharged and
replaced by the resulting Borrowing of DIP Loans or Swingline Loan. If the
Borrower fails to make such payment when due, the DIP Agent shall notify each
Lender of the applicable LC Disbursement, the payment then due from the Borrower
in respect thereof and such Lender's Applicable Percentage thereof. Promptly
following receipt of such notice, each Lender shall pay to the DIP Agent its
Applicable Percentage of the payment then due from the Borrower, in the same
manner as provided in Section 2.06 with respect to Loans made by such Lender
(and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of
the Lenders), and the DIP Agent shall promptly pay to the Issuing Bank the
amounts so received by it from the Lenders. Promptly following receipt by the
DIP Agent of any payment from the Borrower pursuant to this paragraph, the DIP
Agent shall distribute such payment to the Issuing Bank or, to the extent that
Lenders have made payments pursuant to this paragraph to reimburse the Issuing
Bank, then to such Lenders and the Issuing Bank as their interests may appear.
Any payment made by a Lender pursuant to this paragraph to reimburse the Issuing
Bank for any LC Disbursement (other than the funding of DIP Loans or a Swingline
Loan as contemplated above) shall not constitute a Loan and shall not relieve
the Borrower of its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit or (iv) any other event or circumstance
whatsoever,
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whether or not similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of set-off against, the Borrower's obligations hereunder.
Neither the DIP Agent, the Lenders nor the Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by
the Borrower that are caused by the Issuing Bank's failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the DIP
Agent and the Borrower by telephone (confirmed by facsimile) of such demand for
payment and whether the Issuing Bank has made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice
shall not relieve the Borrower of its obligation to reimburse the Issuing Bank
and the Lenders with respect to any such LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement,
then, unless the Borrower shall reimburse such LC Disbursement in full on the
date such LC Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that the Borrower reimburses such LC Disbursement, at
the rate per annum then applicable to DIP Loans; provided that, if the Borrower
fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of
this Section, then Section 2.12(b) shall apply. Interest accrued pursuant to
this paragraph shall be for the account of the Issuing Bank, except that
interest accrued on and after the date of payment by any Lender pursuant to
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paragraph (e) of this Section to reimburse the Issuing Bank shall be for the
account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at
any time by written agreement among the Borrower, the DIP Agent, the replaced
Issuing Bank and the successor Issuing Bank. The DIP Agent shall notify the
Lenders of any such replacement of the Issuing Bank. At the time any such
replacement shall become effective, the Borrower shall pay all unpaid fees
accrued for the account of the replaced Issuing Bank pursuant to Section
2.11(b). From and after the effective date of any such replacement, (i) the
successor Issuing Bank shall have all the rights and obligations of the Issuing
Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters
of Credit.
(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the DIP
Agent or the Required Lenders demanding the deposit of cash collateral pursuant
to this paragraph, the Borrower shall deposit in an account with the DIP Agent,
in the name of the DIP Agent and for the benefit of the Lenders, an amount in
cash equal to 105% of the LC Exposure as of such date plus any accrued and
unpaid interest thereon; provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to the Borrower described in
clause (h) or (i) of Article VII and on the Maturity Date. The Borrower also
shall deposit cash collateral pursuant to this paragraph as and to the extent
required by Section 2.10. Each such deposit shall be held by the DIP Agent as
collateral for the payment and performance of the obligations of the Borrower
under this Agreement. The DIP Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Other than any
interest earned on the investment of such deposits, which investments shall be
made at the option and sole discretion of the DIP Agent and at the Borrower's
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the DIP Agent to reimburse the Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated pursuant to Article VII, be applied to satisfy other
obligations of the Borrower under this Agreement. If the Borrower is required to
provide an amount of cash collateral hereunder as a result of the occurrence of
an Event of Default, such amount (to the extent not applied as aforesaid) shall
be returned to the Borrower within three Business Days after all Events of
Default have been cured or waived. If the Borrower is required to provide
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an amount of cash collateral hereunder pursuant to Section 2.10, such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower as and to
the extent that, after giving effect to such return, the Borrower would remain
in compliance with Section 2.10 and no Default shall have occurred and be
continuing.
Section 2.06. Funding of Borrowings. (a) Each Lender shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the DIP Agent most recently designated by it for such purpose by notice to the
Lenders; provided that Swingline Loans shall be made as provided in Section
2.04. The DIP Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the DIP Agent in Chicago, Illinois, and designated by the
Borrower in the applicable Borrowing Request; provided further that DIP Loans
made to finance the reimbursement of an LC Disbursement as provided in Section
2.05(e) shall be remitted by the DIP Agent to the Issuing Bank.
(b) Unless the DIP Agent shall have received notice from a Lender prior to
the proposed date of any Borrowing that such Lender will not make available to
the DIP Agent such Lender's share of such Borrowing, the DIP Agent may assume
that such Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the DIP
Agent, then the applicable Lender and the Borrower severally agree to pay to the
DIP Agent forthwith on demand such corresponding amount with interest thereon,
for each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the DIP Agent, at (i) in the
case of such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the DIP Agent in accordance with banking industry rules on
interbank compensation or (ii) in the case of the Borrower, the interest rate
applicable to the Loans. If such Lender pays such amount to the DIP Agent, then
such amount shall constitute such Lender's Loan included in such Borrowing.
Nothing in this Section 2.06(b) shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment hereunder or to prejudice any rights that
the Borrower may have against any Lender as a result of any default by such
Lender hereunder.
Section 2.07. Intentionally Deleted.
Section 2.08. Termination and Reduction of Commitments. (a) Unless previously
terminated, the Commitments shall terminate on the Maturity Date.
(b) The Borrower may at any time terminate, or from time to time reduce,
the Commitments; provided that (i) each reduction of the Commitments shall be in
an amount that is an integral multiple of $500,000 and not less than $1,000,000
and (ii) the Borrower shall not terminate or reduce the Commitments if, after
giving effect to any concurrent prepayment of the Loans in accordance with
Section 2.10, the sum of the DIP Exposures would exceed the total Commitments.
The Borrower shall notify the DIP
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Agent of any election to terminate or reduce the Commitments under paragraph (b)
of this Section at least three Business Days prior to the effective date of such
termination or reduction (or such shorter period agreed to by the DIP Agent),
specifying such election and the effective date thereof. Promptly following
receipt of any notice, the DIP Agent shall advise the Lenders of the contents
thereof. Each notice delivered by the Borrower pursuant to this Section shall be
irrevocable; provided that a notice of termination of the Commitments delivered
by the Borrower may state that such notice is conditioned upon the effectiveness
of other credit facilities, in which case such notice may be revoked by the
Borrower (by notice to the DIP Agent on or prior to the specified effective
date) if such condition is not satisfied.
(c) Unless otherwise agreed to in writing by all of the DIP Lenders, the
Commitments shall terminate by an amount equal to 100% of each mandatory
prepayment required to be applied to the DIP Credit by Section 2.10(d) relating
to any Disposition.
(d) Any termination or reduction of the Commitments shall be permanent.
Each reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.
Section 2.09. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay (i) to the DIP Agent for the account of each
Lender the then unpaid principal amount of each DIP Loan of such Lender on the
Maturity Date, and (ii) to the Swingline Lender the then unpaid principal amount
of each Swingline Loan made by the Swingline Lender on the earlier of the
Maturity Date and the first date after such Swingline Loan is made that is the
last Business Day of the week; provided that on each date that a Borrowing is
made, the Borrower shall repay all Swingline Loans that were outstanding on the
date such Borrowing was requested.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(c) The DIP Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the DIP Agent hereunder
for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b)
or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the DIP Agent to maintain such accounts or any error therein shall not
in any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.
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(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its assigns registered pursuant to
clause (iv) of Section 11.04(b)) and in a form approved by the DIP Agent.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 11.04) be
represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to
such payee and its assigns registered pursuant to clause (iv) of Section
11.04(b)).
Section 2.10. Prepayment of Loans. (a) Voluntary. The Borrower shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to the requirements of Section 2.11(e).
(b) Amounts in Excess of Commitments. In the event and on such occasion
that the sum of the DIP Exposures exceeds the total Commitments, the Borrower
shall prepay DIP Loans or Swingline Loans (and, after the Loans have been
reduced to zero, deposit cash collateral in an account with the DIP Agent
pursuant to Section 2.05(j)) in an aggregate amount equal to such excess.
(c) Available Borrowing Base Deficiencies. If at any time the DIP Exposures
hereunder shall exceed the Available Borrowing Base at such time, the Borrower
shall immediately prepay Loans (and, after the Loans have been reduced to zero,
deposit cash collateral in an account with the DIP Agent pursuant to Section
2.05(j) in an aggregate amount equal to such excess.
(d) Asset Sales Before Termination Date. In the event of any Disposition
(whether voluntary or involuntary) outside the ordinary course of business of
any Property of any Loan Party occurring prior to the Termination Date that
results in Net Cash Proceeds in excess of $1,000,000 in the aggregate, (x) the
Borrower shall promptly notify the DIP Agent of such proposed Disposition or
receipt of proceeds of such Disposition (including the amount of the estimated
Net Cash Proceeds to be received by such Loan Party in respect thereof) and (y)
promptly upon receipt by the Loan Party of the Net Cash Proceeds of such
Disposition, the Loan Parties shall deliver all of such Net Cash Proceeds in
excess of $1,000,000 in the aggregate to the DIP Agent for application as
follows: First, up to $25,000,000 of Net Cash Proceeds in the aggregate shall be
applied to the Pre-Petition Obligations, Second, to the payment of then
outstanding Loans and, if no Loans are then outstanding, to be held as cash
collateral for outstanding LC Exposure (in an amount equal to 105% hereof); and
Third, to any remaining Post-Petition Obligations; provided, however, that if no
Loans or LC Exposure are then outstanding under this Agreement, the Commitments
have been reduced to zero, and all other Post-Petition Obligations have been
fully paid, all such Net Cash Proceeds shall be applied to the Pre-Petition
Obligations as provided in the Pre-Petition Credit Agreement. Nothing contained
herein shall impair or otherwise affect the prohibitions against the Disposition
of Property contained herein and in the other Loan Documents, any requirement
that the Bankruptcy Court approve such Disposition or the right of the Lenders
or the Pre-Petition
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Lenders to object to such Disposition. Any proceeds of a Disposition described
in this Section designated to pay actual taxes payable and costs of such
Disposition shall be held by the DIP Agent in escrow until applied to pay such
taxes and costs.
(e) Notice of Prepayments. The Borrower shall notify the DIP Agent (and, in
the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone
(confirmed by facsimile) of any prepayment hereunder (i) in the case of
prepayment of a Borrowing of DIP Loans, not later than 11:00 a.m., New York City
time, one Business Day before the date of prepayment or (ii) in the case of
prepayment of a Swingline Loan, not later than 12:00 noon, New York City time,
on the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date, the principal amount of each Borrowing or portion
thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment; provided that, if a
notice of optional prepayment is given in connection with a conditional notice
of termination of the Commitments as contemplated by Section 2.08, then such
notice of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.08. Promptly following receipt of any such notice
(other than a notice relating solely to Swingline Loans), the DIP Agent shall
advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing as provided in Section 2.02, except as necessary to apply
fully the required amount of a mandatory prepayment. Each prepayment of a
Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.12.
Section 2.11. Fees. (a) The Borrower agrees to pay to the DIP Agent for the
account of each Lender a commitment fee, which shall accrue at a rate of 0.50%
per annum on the average daily unused amount of the Commitment of such Lender
during the period from and including the date of this Agreement to but excluding
the date on which such Commitment terminates. Accrued commitment fees shall be
payable in arrears on the last day of each month of each year and on the date on
which the Commitments terminate, commencing on the first such date to occur
after the date hereof. All commitment fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). For purposes of computing
commitment fees hereunder, a Commitment of a Lender shall be deemed to be used
to the extent of the outstanding DIP Loans and LC Exposure of such Lender (and
the Swingline Exposure of such Lender shall be disregarded for such purpose).
(b) The Borrower agrees to pay (i) to the DIP Agent for the account of each
Lender a participation fee with respect to its participations in Letters of
Credit, which shall accrue at the rate per annum of 4.50% on the average daily
amount of such Lender's LC Exposure (excluding any portion thereof attributable
to unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender's DIP
Commitment terminates and the date on which such Lender ceases to have any LC
Exposure, and (ii) to the Issuing Bank a
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fronting fee, which shall accrue at the rate of 0.125% per annum on the average
daily amount of the LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date of termination of the DIP
Commitments and the date on which there ceases to be any LC Exposure, as well as
the Issuing Bank's standard fees with respect to the issuance, amendment,
renewal or extension of any Letter of Credit or processing of drawings
thereunder. Participation fees and fronting fees accrued through and including
the last day of each month of each year shall be payable on the third Business
Day following such last day, commencing on the first such date to occur after
the Effective Date; provided that all such fees shall be payable on the date on
which the DIP Commitments terminate and any such fees accruing after the date on
which the DIP Commitments terminate shall be payable on demand. Any other fees
payable to the Issuing Bank pursuant to this paragraph shall be payable within
10 days after demand. All participation fees and fronting fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
(c) On the Effective Date, the Borrower agrees to pay to the DIP Agent (i)
for its own account, an agent's fee of $50,000, and (ii) for the ratable account
of the Lenders in accordance with their Applicable Percentages, a closing fee of
$500,000.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the DIP Agent (or to the Issuing Bank, in the
case of fees payable to it) for distribution, in the case of commitment fees and
participation fees, to the Lenders entitled thereto. Fees paid shall not be
refundable under any circumstances.
Section 2.12. Interest. (a) The Loans (including each Swingline Loan) shall
bear interest at the Alternate Base Rate plus 3.0% per annum.
(b) Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable by the Borrower hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, or upon
notice to the Borrower by the DIP Agent (acting at the direction or with the
consent of the Required Lenders) during the existence of any Event of Default,
such obligations shall bear interest, after as well as before judgment, at a
rate per annum equal to (i) in the case of principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to Loans as provided in paragraph (a) of this Section.
(c) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and upon termination of the Commitments;
provided that (i) interest accrued pursuant to paragraph (b) of this Section
shall be payable on demand, and (ii) in the event of any repayment or prepayment
of any Loan (other than a prepayment of a Loan prior to the end of the DIP
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment.
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(d) All interest hereunder shall be computed on the basis of a year of 365
days (or 366 days in a leap year), and in each case shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day). The applicable Alternate Base Rate shall be determined by the DIP Agent,
and such determination shall be conclusive absent manifest error.
Section 2.13. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank any other condition
affecting this Agreement or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender or the Issuing Bank of participating in, issuing or maintaining any
Letter of Credit or to reduce the amount of any sum received or receivable by
such Lender or the Issuing Bank hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender or the Issuing Bank, as
the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or the Issuing Bank's capital or on the capital of
such Lender's or the Issuing Bank's holding company, if any, as a consequence of
this Agreement or the Loans made by, or participations in Letters of Credit held
by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company could have achieved but for such Change in Law (taking
into consideration such Lender's or the Issuing Bank's policies and the policies
of such Lender's or the Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the amount
or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or
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the Issuing Bank's right to demand such compensation; provided that the Borrower
shall not be required to compensate a Lender or the Issuing Bank pursuant to
this Section for any increased costs or reductions incurred more than 270 days
prior to the date that such Lender or the Issuing Bank, as the case may be,
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender's or the Issuing Bank's intention to claim
compensation therefor; provided further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 270-day period
referred to above shall be extended to include the period of retroactive effect
thereof.
Section 2.14. Taxes. (a) Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the DIP
Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the DIP Agent, each Lender and the Issuing
Bank, within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the DIP Agent, such Lender or the
Issuing Bank, as the case may be, on or with respect to any payment by or on
account of any obligation of the Borrower hereunder or under any other Loan
Document (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) 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 Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender or the
Issuing Bank, or by the DIP Agent on its own behalf or on behalf of a Lender or
the Issuing Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to
the DIP Agent the original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment, a copy of the return reporting
such payment or other evidence of such payment reasonably satisfactory to the
DIP Agent.
(e) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which the Borrower is
located, or any
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treaty to which such jurisdiction is a party, with respect to payments under
this Agreement shall deliver to the Borrower (with a copy to the DIP Agent), at
the time or times prescribed by applicable law, such properly completed and
executed documentation and/or representations prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate, provided that such Foreign Lender has
received written notice from the Borrower advising it of the availability of
such exemption or reduction and supplying all applicable documentation.
(f) If the DIP Agent or a Lender determines, in its sole discretion, that
it has received a refund of any Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section 2.14, it shall pay over such refund to the Borrower
(but only to the extent of indemnity payments made, or additional amounts paid,
by the Borrower under this Section 2.14 with respect to the Taxes giving rise to
such refund), net of all out-of-pocket expenses of the DIP Agent or such Lender
and without interest (other than interest paid by the relevant Governmental
Authority with respect to such refund); provided that the Borrower, upon the
request of the DIP Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the DIP Agent or such Lender in the event
the DIP Agent or such Lender is required to repay such refund to such
Governmental Authority. This Section 2.14 shall not be construed to require the
DIP Agent or any Lender to make available its Tax returns (or any other
information relating to its taxes that it deems confidential) to the Borrower or
any other Person.
Section 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-Offs. (a)
The Borrower shall make each payment required to be made by it hereunder or
under any other Loan Document (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under Section 2.13 or
2.14, or otherwise) prior to the time expressly required hereunder or under such
other Loan Document for such payment (or, if no such time is expressly required,
prior to 12:00 noon, New York City time), on the date when due, in immediately
available funds, without set-off or counterclaim. Any amounts received after
such time on any date may, in the discretion of the DIP Agent, be deemed to have
been received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the DIP Agent at its
offices at 111 West Monroe Street, Chicago, Illinois 60603, except payments to
be made directly to the Issuing Bank or the Swingline Lender as expressly
provided herein and except that payments pursuant to Sections 2.13, 2.14 and
11.03 shall be made directly to the Persons entitled thereto and payments
pursuant to other Loan Documents shall be made to the Persons specified therein.
The DIP Agent shall distribute any such payments received by it for the account
of any other Person to the appropriate recipient promptly following receipt
thereof. If any payment under any Loan Document shall be due on a day that is
not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
under each Loan Document shall be made in Dollars.
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(b) Payments out of Cash Collateral. Prior to the Termination Date, if at
any time required by the DIP Agent, all proceeds of the inventory and proceeds
of the accounts receivable of the Borrower and the Guarantors and all Cash
Collateral generated in the ordinary course of the Borrower's and the
Guarantors' businesses (other than amounts subject to Section 2.10(d) hereof)
shall be deposited in the Collection Accounts referred to in Section 9.03 hereof
and applied daily as follows:
(i) First, to the payment of normal operating expenses consistent
with the terms of the Interim Financing Order and any Final Financing
Order approved by all of the DIP Lenders;
(ii) Second, to the costs, fees and expenses of the DIP Agent
(including without limitation the reasonable fees and expenses of its
counsel and other professionals and previous employed or retained by the
DIP Agent);
(iii) Third, to interest and fees then due and then to the
prepayment of all outstanding Loans and unreimbursed LC Disbursements
hereunder until all such Loans and LC Disbursements shall be fully paid
(but without any reduction in the DIP Commitments resulting from such
prepayments);
(iv) Fourth, to be held by the DIP Agent in the Cash Collateral
Account until released or applied pursuant to Section 9.04 hereof; and
(v) Fifth, as the Financing Order shall provide if then in effect
and otherwise as shall be determined by the Bankruptcy Court.
(c) Payments on or after the Termination Date. Anything contained herein to
the contrary notwithstanding, on or after the Termination Date all payments and
collections received in respect of the Obligations and all proceeds of the
Collateral (including Net Cash Proceeds and all other proceeds of any
Disposition of Collateral) and all Cash Collateral shall be remitted to the DIP
Agent and distributed as follows:
(i) first, to the payment of all costs and expenses incurred by the
DIP Agent which the Borrower has agreed to pay under Section 11.03 hereof,
including without limitation any reasonable costs and expenses incurred by
the DIP Agent in monitoring, verifying, protecting, preserving or
enforcing the Liens on the Collateral or in protecting, preserving or
enforcing rights under the Loan Documents (such funds to be retained by
the DIP Agent for its own account unless it has previously been reimbursed
for such costs and expenses by the Lenders, in which event such amounts
shall be remitted to the Lenders to reimburse them for payments previously
made to the DIP Agent);
(ii) second, to the payment of principal and interest on all
outstanding Loans and unreimbursed LC Disbursements until all such amounts
are fully paid, then to be held as collateral for all outstanding LC
Exposure (in an amount equal to 105% thereof) under this Agreement;
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(iii) third, to the payment of all other outstanding Post-Petition
Obligations until all such amounts are fully paid;
(v) fourth, to the Pre-Petition Obligations, and to collateralize
any letters of credit issued under the Pre-Petition Credit Agreement,
until all such Pre-Petition Obligations shall be fully paid and all such
letters of credit shall be fully collateralized (subject to the
Administrative Expense Carve-Out); and
(v) fifth, as shall be determined by the Bankruptcy Court.
(d) If at any time insufficient funds are received by and available to the
DIP Agent to pay fully all amounts of principal, unreimbursed LC Disbursements,
interest and fees then due hereunder, such funds shall be applied (i) first,
towards payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, towards payment of principal and
unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
(e) If any Lender shall, by exercising any right of set-off or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of its DIP Loans or participations in LC Disbursements or Swingline Loans
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its DIP Loans and participations in LC Disbursements and
Swingline Loans and accrued interest thereon than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the DIP Loans and participations in
LC Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective DIP Loans and participations in LC Disbursements and Swingline
Loans; provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
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(f) Unless the DIP Agent shall have received notice from the Borrower prior
to the date on which any payment is due to the DIP Agent for the account of the
Lenders or the Issuing Bank hereunder that the Borrower will not make such
payment, the DIP Agent may assume that the Borrower has made such payment on
such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Issuing Bank, as the case may be, the amount
due. In such event, if the Borrower has not in fact made such payment, then each
of the Lenders or the Issuing Bank, as the case may be, severally agrees to
repay to the DIP Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the DIP Agent, at the greater of the Federal Funds Effective Rate and a rate
determined by the DIP Agent in accordance with banking industry rules on
interbank compensation.
(g) If any Lender shall fail to make any payment required to be made by it
pursuant to this Agreement, then the DIP Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the DIP Agent for the account of such Lender to satisfy such
Lender's obligations under this Agreement until all such unsatisfied obligations
are fully paid.
Section 2.16. Mitigation Obligations. (a) If any Lender requests compensation
under Section 2.13, or if the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.14, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or Affiliates, or otherwise take such reasonable action available to
it, if, in the judgment of such Lender, such designation, assignment or other
action (i) would eliminate or reduce amounts payable pursuant to Section 2.13 or
2.14, as the case may be, in the future and (ii) would not subject such Lender
to any unreimbursed cost or expense and would not otherwise be disadvantageous
to such Lender. The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation,
assignment or other action.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants to the Lenders that:
Section 3.01. Organization; Powers. Each Loan Party is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.
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Section 3.02. Authorization; Enforceability. The Transactions to be entered
into by each Loan Party are within such Loan Party's corporate or other
organizational powers subject to Bankruptcy Court approval, and have been duly
authorized by all necessary corporate or other organizational action and, if
required, equity holder action. This Agreement has been duly executed and
delivered by each Loan Party and constitutes, and each other Loan Document to
which any Loan Party is to be a party, when executed and delivered by such Loan
Party, will constitute, a legal, valid and binding obligation of such Loan
Party, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
Section 3.03. Governmental Approvals; No Conflicts. The Transactions (a)
except for entry of the Interim Financing Order, do not require any consent or
approval of, registration or filing with, or any other action by, any
Governmental Authority, except such as have been obtained or made and are in
full force and effect, (b) will not violate any applicable law, regulation or
order of any Governmental Authority or the charter, by-laws or other
organizational documents of Holdings, the Borrower or any Subsidiary, (c) will
not violate or result in a default under any indenture, agreement or other
instrument binding upon Holdings, the Borrower, any Subsidiary or any of the
assets of the foregoing, or give rise to a right thereunder to require any
payment to be made by Holdings, the Borrower or any Subsidiary, except, in each
case, those matters that have been or will be stayed by virtue of the filing of
the Chapter 11 Case, and (d) will not result in the creation or imposition of
any Lien on any asset of Holdings, the Borrower or any Subsidiary, except Liens
created under the Loan Documents.
Section 3.04. Financial Condition; No Material Adverse Change. (a) The
Borrower has heretofore furnished to the Lenders its consolidated balance sheet
and statements of income, equity holders equity and cash flows (i) as of and for
the 2003 and 2004 fiscal years reported on by Deloitte & Touche LLP, independent
public accountants, and (ii) as of and for the fiscal months ended December 31,
2004, and January 31, 2005, in each case certified by a Financial Officer. Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as of such dates and for such periods in accordance
with GAAP, subject to normal year-end adjustments in the case of quarterly
statements, normal quarter-end adjustments in the case of monthly statements and
the absence of footnotes in the case of all statements referred to in clause
(ii) above.
(b) Except as disclosed in the financial statements referred to above or
the notes thereto and except for the Disclosed Matters, after giving effect to
the Transactions, none of Holdings, the Borrower or the Subsidiaries has, as of
the Effective Date, any material contingent liabilities or long-term
commitments, in each case outside the ordinary course of business.
(c) Except for the Disclosed Matters, those matters disclosed in Holdings'
SEC Form 10-k filed on March 14, 2005, and SEC Form 8-k filings through the date
hereof,
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and the filing of the Chapter 11 Cases, since January 31, 2005, there has not
occurred any fact or circumstance that has had, or could reasonably be expected
to have, a Material Adverse Effect.
Section 3.05. Properties. (a) Each of Holdings, the Borrower and the
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business (including its Mortgaged
Properties), except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.
(b) Each of Holdings, the Borrower and the Subsidiaries owns, or is
licensed to use, all trademarks, trade names, copyrights, patents and other
intellectual property material to its business, and the use thereof by Holdings,
the Borrower and the Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(c) Schedule 3.05 sets forth the address of each real property that is
owned or leased by the Borrower or any Subsidiary as of the Effective Date and
currently used in the operation of its business, and each other parcel of real
property having a fair value in excess of $250,000, indicating in each case
whether such property is owned or leased and, in the case of each owned
property, the record holder thereof. The value of all real property owned by the
Borrower and the Subsidiaries that is not listed on Schedule 3.05 does not
exceed $1,000,000 in the aggregate.
(d) As of the Effective Date, neither Holdings, the Borrower nor any
Subsidiary has received notice of, or has knowledge of, any pending or
contemplated condemnation proceeding affecting any Mortgaged Property or any
sale or disposition thereof in lieu of condemnation. Other than as indicated on
Schedule 1.01(c), neither any Mortgaged Property nor any interest therein is
subject to any right of first refusal, option or other contractual right to
purchase such Mortgaged Property or interest therein.
Section 3.06. Litigation and Environmental Matters. (a) There are no actions,
suits or proceedings by or before any arbitrator or Governmental Authority
pending against or, to the knowledge of Holdings or the Borrower, threatened
against or affecting Holdings, the Borrower or any Subsidiary as to which there
is a reasonable possibility of an adverse determination and that, (i) if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) challenges the validity, legality or enforceability of the Loan
Documents or the Transactions.
(b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, neither Holdings, the Borrower nor any
Subsidiary (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become
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subject to any Environmental Liability, (iii) has received notice of any claim
with respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
Section 3.07. Compliance with Laws and Agreements. Each of Holdings, the
Borrower and the Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority (including the 1996 Confirmation Order, the
1996 Plan of Reorganization and the trust agreement relating to the Personal
Injury Trust) applicable to it or its property and all indentures, certificates,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
Section 3.08. Investment and Holding Company Status. Neither Holdings, the
Borrower nor any Subsidiary is (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940, as amended, or
(b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935, as amended.
Section 3.09. Taxes. Each of Holdings, the Borrower and the Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) any Taxes that are being contested in good faith by
appropriate proceedings and for which Holdings, the Borrower or such Subsidiary,
as applicable, has set aside on its books adequate reserves in accordance with
GAAP or (b) to the extent that the failure to do so could not reasonably be
expected to result in a Material Adverse Effect.
Section 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $5,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $10,000,000 the fair
market value of the assets of all such underfunded Plans.
Section 3.11. Disclosure. (a) The Borrower has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which Holdings,
the Borrower or any Subsidiary is subject, and all other matters known to any of
them, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. The factual information (taken as a whole)
contained in any of the reports, financial statements, certificates or other
information furnished by or on behalf of any Loan Party to the DIP Agent or any
Lender in connection with the negotiation of this
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Agreement or any other Loan Document or delivered hereunder or thereunder (as
modified or supplemented by other information so furnished) does not contain any
material misstatement of fact or omit to state any material fact necessary to
make the statements therein (if taken as a whole), in the light of the
circumstances under which they were made, not misleading.
(b) The Budget has been prepared in good faith based upon assumptions
believed by the Borrower to be reasonable as of (i) the date hereof and (ii) the
date such Budget was furnished to the Lenders.
Section 3.12. Subsidiaries. Holdings does not have any subsidiaries other than
the Borrower and the Subsidiaries and those entities expressly excluded from the
definition of "Subsidiary". Schedule 3.12 sets forth the name of, and the
ownership interest of the Borrower in, each Subsidiary and identifies each
Subsidiary that is a Subsidiary Loan Party, in each case as of the Effective
Date.
Section 3.13. Insurance. Schedule 3.13 sets forth a description of all
insurance maintained by or on behalf of the Borrower and the Subsidiaries as of
the Effective Date. As of the Effective Date, all premiums due and payable in
respect of such insurance have been paid. The Borrower believes that the
insurance maintained by or on behalf of the Borrower and the Subsidiaries is
consistent with the insurance customarily maintained by similarly situated
companies.
Section 3.14. Labor Matters. As of the Effective Date, there are no strikes,
lockouts or slowdowns against Holdings, the Borrower or any Subsidiary pending
or, to the knowledge of Holdings or the Borrower, threatened. The hours worked
by and payments made to employees of Holdings, the Borrower and the Subsidiaries
have not been in violation of the Fair Labor Standards Act or any other
applicable Federal, state, local or foreign law dealing with such matters. All
payments due from Holdings, the Borrower or any Subsidiary, or for which any
claim may be made against Holdings, the Borrower or any Subsidiary, on account
of wages and employee health and welfare insurance and other benefits, have been
paid or accrued as a liability on the books of Holdings, the Borrower or such
Subsidiary. The consummation of the Transactions will not give rise to any right
of termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which Holdings, the Borrower or any
Subsidiary is bound.
Section 3.15. Margin Regulations. Neither Holdings, the Borrower nor any
Subsidiary is engaged principally, or as one of its primary activities, in the
business of extending credit for the purpose of purchasing or carrying "Margin
Stock" as defined in Regulation U of the Board and neither Holdings, the
Borrower nor any Subsidiary will use the proceeds of any Loan in a manner that
violates any provisions of Regulation T, U or X of the Board.
Section 3.16. Interim Financing Order. As of the Effective Date, the Interim
Financing Order has been duly entered, is valid, subsisting and continuing and
has not
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been vacated, modified, reversed on appeal, or vacated or modified by any
Bankruptcy Judge or District Court Judge and is not subject to any pending stay.
Section 3.17. Super-Priority Administrative Expense. Upon entry of the Interim
Financing Order, (a) pursuant to Section 364(c)(1) of the Bankruptcy Code, the
Post-Petition Obligations shall at all times constitute allowed administrative
expense claims in the Chapter 11 Cases having priority over all administrative
expenses of the kind specified in Section 503(b) or 507 of the Bankruptcy Code,
whether arising or incurred in any of the Chapter 11 Cases or (subject to
Section 726(b) of the Bankruptcy Code) in any superseding case or cases under
Chapter 7 of the Bankruptcy Code except as otherwise provided in the Interim
Financing Order, (b) the Post-Petition Obligations shall at all times otherwise
constitute Superpriority Claims, and (c) pursuant to Sections 364(c)(2) and
364(d)(1) of the Bankruptcy Code, the Post-Petition Obligations shall at all
times be secured by a first priority Lien on the Collateral, subject in each
case only to the Permitted Liens and the fees and expenses subject to the
Administrative Expense Carve-Out.
ARTICLE IV
CONDITIONS
Section 4.01. Effective Date. The obligations of the Lenders to make Loans and
of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 11.02):
(a) the DIP Agent (or its counsel) shall have received from each
party hereto either (i) a counterpart of this Agreement signed on behalf
of such party or (ii) written evidence satisfactory to the DIP Agent
(which may include facsimile transmission of a signed signature page of
this Agreement) that such party has signed a counterpart of this
Agreement.
(b) the DIP Agent shall have received a favorable written opinion
(addressed to the DIP Agent and the Lenders and dated the Effective Date)
of Squire, Sanders & Dempsey L.L.P., counsel for the Borrower, covering
such matters as the DIP Agent shall reasonably request. Each of Holdings
and the Borrower hereby requests such counsel to deliver such opinions.
(c) the DIP Agent shall have received such documents and
certificates as the DIP Agent or its counsel may reasonably request
relating to the organization, existence and good standing of each Loan
Party, the authorization of the Transactions and any other legal matters
relating to the Loan Parties, the Loan Documents, and the Transactions,
all in form and substance satisfactory to the DIP Agent and its counsel.
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(d) the DIP Agent shall have received a certificate, dated the
Effective Date and signed by the President, a Vice President or a
Financial Officer of the Borrower, confirming compliance with the
conditions set forth in paragraphs (a), (b), (d), and (e) of Section 4.02.
(e) the DIP Agent shall have received an incumbency and signature
certificate for the Borrower and each Guarantor satisfactory in form and
substance to the DIP Agent;
(f) the DIP Agent shall have received a Borrowing Base Report
showing the calculation of the Borrowing Base as of April 1, 2005 (giving
effect to the repurchase of Transferred Receivables and certain related
assets from General Electric Capital Corporation referred to in Section
4.01(o) below);
(g) the DIP Agent shall have received the Budget, in form
and substance reasonably satisfactory to the Lenders;
(h) the DIP Agent shall have received the Interim Financing Order
substantially in the form of Exhibit B hereto and acceptable to the DIP
Agent after notice given and a hearing conducted in accordance with
Bankruptcy Rule 4001(c) shall have been entered by the Bankruptcy Court
and shall be in full force and effect and shall not have been amended,
modified, stayed, vacated, reversed or rescinded in any respect;
(i) the DIP Agent shall have received a cash management order
including procedures requiring all proceeds of Collateral and all
revenues, income and cash flow of the Borrower and the Guarantors to be
deposited in a Collection Account or such other arrangement as is
acceptable to the DIP Agent such that, except with respect to the Petty
Cash and Payroll Accounts, the DIP Agent attains exclusive dominion and
control of such accounts and proceeds of collection deposited therein
shall have been entered by the Bankruptcy Court and shall be in full force
and effect and shall not have been amended, modified, stayed, vacated,
reversed or rescinded in any respect;
(j) the DIP Agent shall have received all fees and other amounts
then due and payable to it and to the Lenders in connection with the
execution and delivery of this Agreement and the transactions contemplated
hereby, including the payment of the closing fee and the DIP Agent's fee
payable pursuant to Section 2.11 (provided such amounts may be paid out of
the initial Borrowing under the DIP Credit);
(k) the DIP Agent shall have received evidence of insurance
required by Section 5.07;
(l) no trustee, or other disinterested person with expanded powers
pursuant to Section 1104(c) of the Bankruptcy Code, shall have been
appointed or
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designated with respect to any Debtor or its respective business or
Properties, including, without limitation the Collateral, no order shall
be entered appointing such a trustee or other disinterested person and no
motion by or supported by the Debtors shall be pending seeking such
relief;
(m) the Borrower shall have reimbursed the Pre-Petition Agent for
all reasonable fees and expenses incurred by them, including the
reasonable fees and expenses of Chapman and Cutler LLP, Chapman and Cutler
LLP's local counsel, and FTI Consulting, Inc., in connection with the
Pre-Petition Credit Agreement and the transactions contemplated hereby for
which the Borrower has received an invoice (provided such amounts may be
paid out of the initial Borrowing under the DIP Credit) (it being
understood that such amounts paid remain subject to Bankruptcy Court
approval);
(n) the Borrower shall have paid the reasonable costs and expenses
(including the reasonable fees and expenses of Chapman and Cutler LLP,
Chapman and Cutler LLP's local counsel, and FTI Consulting, Inc.) incurred
by the DIP Agent in connection with this Agreement and the transaction
contemplated hereby for which the Borrower has received an invoice
(provided such amounts may be paid out of the initial Borrowing under the
DIP Credit) (it being understood that such amounts paid remain subject to
Bankruptcy Court approval);
(o) (i) execution and delivery by the Borrower and the Receivables
Subsidiary of a receivables purchase and reassignment agreement with
General Electric Capital Corporation with respect to the Receivables
Purchase Agreement (as such term is defined in the Pre-Petition Credit
Agreement) and (ii) repurchase and termination of the outstanding
Permitted Receivables Financing (as such term is defined in the
Pre-Petition Credit Agreement), evidenced by such receivables purchase and
reassignment agreement, which shall be in form and substance acceptable to
the DIP Lenders and General Electric Capital Corporation, with the
proceeds of the initial advance under the DIP Credit being advanced by the
Borrower to or for the account of the Receivables Subsidiary, with all
Transferred Receivables (as such term is defined in the Receivables
Purchase Agreement (as such term is defined in the Pre-Petition Credit
Agreement)), and related assets being simultaneously re-conveyed by the
"Purchasers" party to the Receivables Purchase Agreement to the
Receivables Subsidiary and by the Receivables Subsidiary to the
originating sellers so long as it is a Loan Party or to the Borrower (all
such receivables and related assets to constitute Post-Petition
Collateral) as contemplated by such receivables purchase and reassignment
agreement, which termination and repurchase arrangements shall be
acceptable to the DIP Lenders and General Electric Capital Corporation;
(p) the Loan Parties shall have established if and as requested by
the DIP Agent a blocked account or lockbox for their collections and the
transfer
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thereof to the DIP Agent, which shall be in form and substance reasonably
acceptable to the DIP Agent; and
(q) the DIP Agent's Liens in the Collateral shall have been
perfected in a manner satisfactory to it and shall be first priority Liens
subject only to Permitted Liens and the Administrative Expense Carve Out.
Section 4.02. Each Credit Event. The obligation of each Lender to make a Loan
on the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew
or extend any Letter of Credit, is subject to receipt of the request therefor in
accordance herewith and to the satisfaction of the following conditions:
(a) the representations and warranties of each Loan Party set forth
in the Loan Documents shall be true and correct (or, in the case of such
representations and warranties that are not qualified as to materiality,
true and correct in all material respects) on and as of the date of such
Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable;
(b) at the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Default shall have occurred and be
continuing;
(c) the DIP Agent shall have received a notice of such Borrowing as
required by Section 2.03 or 2.04 or, in the case of the issuance,
amendment, extension or renewal of a Letter of Credit, the Issuing Bank
and the DIP Agent shall have received a notice requesting the issuance,
amendment, extension or renewal of such Letter of Credit as required by
Section 2.05(b);
(d) at the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, the aggregate unpaid DIP Exposure shall not
exceed the lesser of (i) the Commitments then in effect and (ii) the
Available Borrowing Base as then determined; and
(e) the applicable Financing Order shall be in full force and effect
and the Debtors shall be in compliance with all the terms hereof and with
respect to the Financing Order and it shall be final and non-appealable.
Each Borrowing and each issuance, amendment, renewal or extension of a
Letter of Credit shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in this Section.
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ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated, the principal of
and interest on each Loan and all fees payable hereunder shall have been paid in
full, all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, each of Holdings and the Borrower
covenants and agrees with the Lenders that:
Section 5.01. Financial Statements and Other Information. The Borrower
will furnish to the DIP Agent (for distribution to each Lender):
(a) within 90 days after the end of each fiscal year of Holdings,
its audited consolidated balance sheet and related statements of
operations, equity holders' equity and cash flows as of the end of and for
such year, setting forth in each case in comparative form the figures for
the previous fiscal year, all reported on by Deloitte & Touche LLP or
other independent public accountants of recognized national standing to
the effect that such consolidated financial statements present fairly in
all material respects the financial condition and results of operations of
Holdings and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of Holdings (except that the quarterly
financial statements for the fiscal quarter ending February 28, 2005,
shall be due no later than April 30, 2005,) its consolidated balance sheet
and related statements of operations, equity holders' equity and cash
flows as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form
the figures for the corresponding period or periods of (or, in the case of
the balance sheet, as of the end of) the previous fiscal year, all
certified by a Financial Officer as presenting fairly in all material
respects the financial condition and results of operations of Holdings and
its consolidated subsidiaries on a consolidated basis in accordance with
GAAP consistently applied, subject to normal year-end adjustments and the
absence of footnotes;
(c) within 30 days after the end of each fiscal month of Holdings
(except that the monthly financial statements for the fiscal month ending
February 28, 2005, shall be due no later than April 30, 2005, for the
fiscal month ending March 31, 2005, shall be due no later than May 31,
2005, and for the fiscal month ending April 30, 2005, shall be due no
later than June 15, 2005, its consolidated balance sheet and related
statements of operations, equity holders' equity and cash flows as of the
end of and for such fiscal month and the then elapsed portion of the
fiscal year, all certified by a Financial Officer as presenting in all
material respects the financial condition and results of operations of
Holdings and its consolidated subsidiaries on a consolidated basis in
accordance with GAAP
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consistently applied, subject to normal quarter-end adjustments and the
absence of footnotes;
(d) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer (i)
certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed
to be taken with respect thereto, and (ii) stating whether any change in
GAAP or in the application thereof applicable to the Borrower has occurred
since the date of the Borrower's audited financial statements referred to
in Section 3.04 and, if any such change has occurred, specifying the
effect of such change on the financial statements accompanying such
certificate;
(e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
Holdings, the Borrower or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
distributed by Holdings to its shareholders generally, as the case may be;
(f) on Wednesday of each week, a Borrowing Base Report setting forth
the computation of the Available Borrowing Base as of the last Business
Day of the preceding week, together with such other information as such
certificate requires, certified as correct by a Financial Officer of the
Borrower (it being agreed that the Borrower may elect to deliver a
Borrowing Base Report more frequently than required by this Section);
(g) on Wednesday of each week, a report (the "Budget Report") (i)
showing the actual receipts and disbursements of the Borrower and the
Subsidiary Loan Parties during the immediately preceding week, and (ii)
comparing the actual receipts and disbursements for the Borrower and the
Subsidiary Loan Parties to the receipts and disbursements shown in the
Budget both for the week covered by such Budget Report and on a cumulative
basis for the period from the Effective Date to the date of the Budget
Report in each of the categories set forth in the Budget, each Budget
Report to be in form and substance reasonably satisfactory to the DIP
Agent and certified by a Financial Officer of the Borrower;
(h) by Wednesday of each week, the Borrower shall deliver a 13-week
cash flow forecast showing projected cash receipts and cash disbursements
of Holdings, the Borrower, and their Subsidiaries over the following
13-week period (prepared on a consolidated basis), together with a
reconciliation of actual cash receipts and cash disbursements of Holdings,
the Borrower, and their Subsidiaries from the immediately preceding week,
prepared by the Borrower and in form and substance, and with such detail,
as the DIP Agent may reasonably require;
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(i) as soon as available, and in any event within fifteen (15) days
after the end of each month, an accounts receivable and accounts payable
aging, an accounts receivable concentration and reconciliation report, an
inventory report (broken down by category) and such other information and
reports as the DIP Agent may reasonably request, each as of the close of
such period and in reasonable detail prepared by the Borrower and
certified to by a Financial Officer of the Borrower;
(j) promptly furnish to the DIP Agent or its counsel (or cause to be
furnished to the DIP Agent or its counsel by means of the Bankruptcy
Court's electronic case filing notification system) promptly after the
same is available, copies of all pleadings, motions, applications,
judicial information, financial information and other documents filed by
or on behalf of the Borrower or any other Loan Party with the Bankruptcy
Court in the Chapter 11 Cases, or distributed by or on behalf of the
Borrower or any other Loan Party to any official committee appointed in
the Chapter 11 Cases;
(k) promptly upon receiving the same, copies of all written offers
which the Borrower should reasonably expect to be of interest to the
Lenders and agreements regarding the sale or recapitalization of Holdings,
the Borrower or any Subsidiary; and
(l) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of
Holdings, the Borrower or any Subsidiary, or compliance with the terms of
any Loan Document, as the DIP Agent or any Lender may reasonably request.
Section 5.02. Notices of Material Events. The Borrower will furnish to the
DIP Agent (for distribution to the Lenders) prompt written notice of the
following (and in any event within one Business Day following the discovery by
Holdings, the Borrower or any Subsidiary of the following):
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority (including in respect
of the 1996 Confirmation Order, the 1996 Plan of Reorganization or the
1996 Permanent Injunction) against or affecting Holdings, the Borrower or
any Affiliate thereof as to which there is a reasonable possibility of an
adverse determination that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of Holdings, the Borrower, the Subsidiaries or any of
the Borrower's ERISA Affiliates in an aggregate amount exceeding
$5,000,000; and
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(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a
statement of a Financial Officer or other executive officer of the Borrower
describing in reasonable detail the event or development requiring such notice
and any action taken or proposed to be taken with respect thereto.
Section 5.03. Information Regarding Collateral. The Borrower will furnish
to the DIP Agent prompt written notice of any change (i) in any Loan Party's
corporate name or in any trade name used to identify it in the conduct of its
business or in the ownership of its properties, (ii) in the location of any Loan
Party's chief executive office, its principal place of business, any office in
which it maintains books or records relating to Collateral owned by it or any
office or facility at which Collateral owned by it is located (including the
establishment of any such new office or facility), (iii) in any Loan Party's
identity or corporate structure or (iv) in any Loan Party's Federal Taxpayer
Identification Number. The Borrower agrees not to effect or permit any change
referred to in the preceding sentence unless all necessary filings have been
made under the Uniform Commercial Code or otherwise that are required in order
for the DIP Agent to continue at all times following such change to have a
valid, legal and perfected security interest in all the Collateral. The Borrower
also agrees promptly to notify the DIP Agent if any material portion of the
Collateral is damaged or destroyed.
Section 5.04. Existence; Conduct of Business. Each Loan Party will, and
will cause each Subsidiary to, do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges, franchises, patents, copyrights,
trademarks and trade names material to the conduct of its business; provided
that the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03.
Section 5.05. Payment of Obligations. Each Loan Party will, and will cause
each Subsidiary to, pay its Indebtedness and other material obligations,
including Tax liabilities, before the same shall result in a default, except
where (a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) Holdings, the Borrower or such Subsidiary has set
aside on its books adequate reserves with respect thereto in accordance with
GAAP, (c) such contest effectively suspends collection of the contested
obligation and the enforcement of any Lien securing such obligation and (d) the
failure to make payment pending such contest could not reasonably be expected to
result in a Material Adverse Effect.
Section 5.06. Maintenance of Properties. Each Loan Party will, and will
cause each Subsidiary to, (a) keep and maintain all property material to the
conduct of its business in good working order and condition, ordinary wear and
tear and damage by fire or casualty excepted, and (b) furnish to the DIP Agent,
at the expense of the Borrower, Phase I environmental site assessment reports or
updates, in form, scope and substance reasonably acceptable to the DIP Agent,
prepared by an environmental consulting firm
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reasonably acceptable to the DIP Agent, for such properties or operations as
have been specified by the DIP Agent.
Section 5.07. Insurance. Each Loan Party will, and will cause each
Subsidiary to, maintain, with financially sound and reputable insurance
companies (a) insurance in such amounts (with no greater risk retention) and
against such risks as are customarily maintained by companies of established
repute engaged in the same or similar businesses operating in the same or
similar locations and (b) all insurance required to be maintained pursuant to
the Security Documents. The Loan Parties shall also cause all property and
casualty insurance on the Collateral and all business interruption insurance to
include mortgagee's and lender loss payee endorsements in favor of the DIP Agent
(and, if requested, the Lenders) and the Pre-Petition Agent (and, if requested,
the Pre-Petition Lenders), and containing all endorsements and assurances of
affirmative coverage requested by them for the protection of their interests as
they shall reasonably require. The Borrower will furnish to the DIP Agent (for
distribution to the Lenders), upon request, information in reasonable detail as
to the insurance so maintained.
Section 5.08. Casualty and Condemnation. The Borrower (a) will furnish to
the DIP Agent (for distribution to the Lenders) prompt written notice of any
material casualty or other insured damage to any material portion of any
Collateral or the commencement of any action or proceeding for the taking of any
Collateral or any part thereof or interest therein under power of eminent domain
or by condemnation or similar proceeding and (b) will ensure that the Cash
Proceeds of any such event (whether in the form of insurance proceeds,
condemnation awards or otherwise) are collected and applied in accordance with
this Agreement.
Section 5.09. Books and Records; Inspections. Each Loan Party will, and
will cause each Subsidiary to, keep proper books of record and account in which
full, true and correct entries are made of all dealings and transactions in
relation to its business and activities. Each Loan Party will, and will cause
each Subsidiary to, permit any representatives designated by the DIP Agent or
any Lender, upon reasonable prior notice and during reasonable business hours,
to visit and inspect its properties, to examine and make extracts from its books
and records, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times and as often
as reasonably requested. The DIP Agent and the Lenders may from time to time,
upon reasonable prior notice and during reasonable business hours, perform field
examinations of the business, operations and assets of Holdings the Borrower and
its Subsidiaries, and the Borrower shall pay the reasonable costs and expenses
of the DIP Agent in connection with any such examination.
Section 5.10. Compliance with Laws. Each Loan Party will, and will cause
each Subsidiary to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
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Section 5.11. Use of Proceeds and Letters of Credit. The Borrower shall
use the proceeds of the Loans made hereunder and of all Letters of Credit issued
hereby (a) for payment of normal operating expenses of the Loan Parties
consistent with the Budget and payment of such amounts as may be ordered by the
Bankruptcy Court, (b) to fund LC Disbursements, (c) for the payment of
professional fees of the DIP Agent and the Pre-Petition Agent related to the DIP
Credit and the Pre-Petition Loans, (d) for the payment of interest, fees and
expenses on the DIP Credit, (e) for payment of the Administrative Expense Carve
Out, (f) for the payment of interest accruals, fees and expenses with respect to
the Pre-Petition Loans as adequate protection to the Pre-Petition Lenders, and
(g) to fund the purchase of outstanding accounts receivable and related assets
incident to the termination of the Permitted Receivables Financing (as defined
in the Pre-Petition Credit Agreement) and the payment of all indemnification
payments, fees, costs, and expenses (including, without limitation, fees, costs,
and expenses of counsel and other advisors) to the "Purchasers", the
"Administrative Agent", the "Collateral Agent" and other "Indemnified Persons"
under the Receivables Purchase Agreement (in each case, whether incurred before
or after the Effective Date). No part of the proceeds of any Loan will be used,
whether directly or indirectly, for any purpose that entails a violation of
Regulations T, U and X of the Board. Letters of Credit will be issued only to
support obligations of the Borrower and the Subsidiary Loan Parties incurred for
general corporate purposes.
Section 5.12. Investment Banking Firm Engagements. The Borrower shall at
all times continue to engage one or more nationally recognized investment
banking firms selected by it and reasonably acceptable to the Pre-Petition Agent
and the DIP Agent, to explore and evaluate the prompt sale of assets previously
described to the DIP Lenders (including EaglePicher Pharmaceutical Services,
LLC, EaglePicher Filtration and Minerals, Inc., Wolverine Gasket Division of the
Borrower, the Boron Products and Services Division, and the Government Power
Division) under one or more written engagement letters in form and substance
reasonably acceptable to the Pre-Petition Agent and the DIP Agent.
Section 5.13 DIP Agent's Financial Consultant. The DIP Agent shall have
the continuing right to engage on behalf of the Lenders a financial advisor,
selected by the DIP Agent, to evaluate the financial condition, operating
performance, and business prospects of the Loan Parties and their Subsidiaries
and to perform such other information gathering or evaluation acts as may be
reasonably requested by the DIP Agent or the Required Lenders, and the
reasonable costs and expenses of such financial advisor shall be borne by the
Borrower and constitute part of the Post-Petition Obligations. The Borrower
shall promptly pay such reasonable costs and expenses as and when invoice(s) for
such amounts are delivered to the Borrower by the DIP Agent. The Borrower shall
take reasonable steps to make available to such financial advisor and its
representatives such information respecting the financial condition, operating
performance, and business prospects of the Loan Parties and their Subsidiaries
as may be reasonably requested and shall make its officers, employees, and
independent public accountants available with reasonable prior notice to discuss
such information with such financial advisor and its representatives.
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Section 5.14. Foreign Subsidiary Distributions, Etc. To the extent
permitted by applicable law and regulation, the Loan Parties shall take such
action from time to time as may be required to cause Net Cash Proceeds from the
disposition of Foreign Subsidiaries or their assets to the extent available for
distribution, and amounts available for distribution by any Joint Venture, to be
distributed and paid over to the Borrower.
Section 5.15. Further Assurances. (a) Each Loan Party will execute any and
all further documents, financing statements, agreements and instruments, and
take all such further actions (including the filing and recording of financing
statements, fixture filings, mortgages, deeds of trust and other documents),
which may be required under any applicable law, or which the DIP Agent or the
Required Lenders may reasonably request, to cause the Collateral to be and
remain fully perfected and protected at all times, all at the expense of the
Loan Parties.
(b) If any material assets (including any real property or improvements
thereto or any interest therein) are acquired by any Loan Party after the
Effective Date (other than assets constituting Collateral that become subject to
the Lien of the Security Documents upon acquisition thereof), the Borrower will
notify the DIP Agent and the Lenders thereof, and, if requested by the DIP Agent
or the Required Lenders, the Borrower will cause such assets to be subjected to
a Lien securing the Post-Petition Obligations and will take, and cause the
relevant Loan Parties to take, such actions as shall be necessary to grant and
perfect such Liens, including actions described in paragraph (a) of this
Section, all at the expense of the Loan Parties.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated, the principal of and
interest on each Loan and all fees payable hereunder have been paid in full, all
Letters of Credit have expired or terminated and all LC Disbursements have been
reimbursed, each Loan Party covenants and agrees with the Lenders that:
Section 6.01. Indebtedness; Certain Equity Securities. (a) The Borrower
will not, and will not permit any Subsidiary to, create, incur, assume or permit
to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) the Pre-Petition Credits;
(iii) the Senior Debt;
(iv) Indebtedness existing on the date hereof and set forth in
Schedule 6.01, and extensions, renewals and replacements of any such
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Indebtedness that do not increase the outstanding principal amount thereof
or result in an earlier maturity date or decreased weighted average life
thereof;
(v) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary, in each case
outstanding on the Effective Date; provided that (A) Indebtedness of any
Subsidiary that is not a Loan Party to the Borrower or any Subsidiary Loan
Party shall be subject to clause (ii) of the proviso to Section 6.04(d) or
Section 6.04(l) and (B) Indebtedness of the Borrower or any other Loan
Party to any Subsidiary that is not a Loan Party shall be subordinated to
the Obligations on terms reasonably satisfactory to the DIP Agent;
(vi) Guarantees by the Borrower of Indebtedness of any Subsidiary
and by any Subsidiary of Indebtedness of the Borrower or any other
Subsidiary, in each case outstanding on the Effective Date; provided that
Guarantees by the Borrower or any Subsidiary Loan Party of Indebtedness of
any Subsidiary that is not a Loan Party shall be subject to Section
6.04(f);
(vii) Indebtedness of the Borrower or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or
capital assets, including Capital Lease Obligations and any Indebtedness
assumed in connection with the acquisition of any such assets or secured
by a Lien on any such assets prior to the acquisition thereof, in each
case outstanding on the Effective Date, and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof or result in an earlier maturity date or
decreased weighted average life thereof; provided that (A) such
Indebtedness is incurred prior to or within 90 days after such acquisition
or the completion of such construction or improvement and (B) the
aggregate principal amount of Indebtedness permitted by this clause (vii)
shall not exceed $15,000,000 at any time outstanding;
(viii) surety and appeal bonds, performance and return-of-money
bonds and other similar obligations incurred in the ordinary course of
business of the Borrower or any Subsidiary (exclusive of obligations in
respect of the payment for borrowed money) and accrued expenses incurred
in the ordinary course of business of the Borrower or any Subsidiary;
(ix) Indebtedness of Foreign Subsidiaries to lenders in
jurisdictions outside the United States; provided that the aggregate
principal amount of all such Indebtedness shall not exceed $15,000,000 at
any time outstanding;
(x) Indebtedness of the Borrower or any Subsidiary under any Swap
Agreement permitted pursuant to Section 6.07;
(xi) Indebtedness under the Permitted Receivables Financing (as such
term is defined in the Pre-Petition Credit Agreement), provided such
Indebtedness
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shall be paid in full (except for any contingent indemnification claims,
costs, fees, and expenses (including, without limitation, costs, fees and
expenses of counsel) that survives the termination of the Permitted
Receivables Financing) out of the proceeds of the initial Borrowing made
under this Agreement;
(xii) the BV Loans and Foreign Subsidiary Loans; and
(xiii) the EPTEC loans.
(b) Holdings will not create, incur, assume or permit to exist any
Indebtedness except Indebtedness created under the Loan Documents and a
Guarantee of the Senior Debt as set forth in the Senior Debt Documents.
(c) Neither Holdings nor the Borrower will, nor will they permit any
Subsidiary to, issue any preferred Equity Interests, except Holdings may issue
Refinancing Preferred Stock to refinance outstanding Existing Preferred Stock.
Section 6.02. Liens. (a) The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(i) Liens created under the Loan Documents;
(ii) Permitted Encumbrances;
(iii) any Lien on any property or asset of the Borrower or any
Subsidiary existing on the date hereof and set forth in Schedule 6.02;
provided that (A) such Lien shall not apply to any other property or asset
of the Borrower or any Subsidiary and (B) such Lien shall secure only
those obligations which it secures on the date hereof and extensions,
renewals and replacements thereof that do not increase the outstanding
principal amount thereof;
(iv) Liens created under the Pre-Petition Loan Documents securing
the Pre-Petition Obligations;
(v) Liens on any property or assets of any Foreign Subsidiary
securing Indebtedness permitted by clause (ix) of Section 6.01(a); and
(vi) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary; provided that (A) such
security interests secure Indebtedness permitted by clause (vii) of
Section 6.01(a), (B) such security interests and the Indebtedness secured
thereby are incurred prior to or within 90 days after such acquisition or
the completion of such construction or improvement, (C) the Indebtedness
secured thereby does not exceed 100% of the cost of acquiring,
constructing or improving such fixed or capital assets and
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(D) such security interests shall not apply to any other property or
assets of the Borrower or any Subsidiary.
(b) Holdings will not create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect
thereof, except Liens created under the Loan Documents, Liens created under the
Pre-Petition Loan Documents securing the Pre-Petition Obligations, and Permitted
Encumbrances.
Section 6.03. Fundamental Changes. (a) No Loan Party will, nor will they
permit any Subsidiary to, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or liquidate or
dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Default or Event of Default shall have occurred and be
continuing, (i) any Subsidiary may merge into the Borrower in a transaction in
which the Borrower is the surviving corporation, (ii) any entity may merge into
any Subsidiary in a transaction in which the surviving entity is a Subsidiary
and (if any party to such merger is a Subsidiary Loan Party) is a Subsidiary
Loan Party, and (iii) any Subsidiary (other than a Subsidiary Loan Party) may
liquidate or dissolve if the Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the Borrower and is not
materially disadvantageous to the Lenders; provided that any such merger
involving a Person that is not a wholly-owned Subsidiary immediately prior to
such merger shall not be permitted unless also permitted by Section 6.04.
(b) The Borrower will not, and will not permit any Subsidiary to, engage
to any material extent in any business other than businesses of the type
conducted by the Borrower and such Subsidiary on the date of execution of this
Agreement and businesses reasonably related thereto.
(c) Holdings will not engage in any business or activity, except (i) the
ownership of all the outstanding Equity Interests of the Borrower, (ii) the
performance of its obligations under the Loan Documents, (iii) the performance
of its obligations related to the Existing Preferred Stock, (iv) the maintenance
of its existence and compliance with laws, (v) other activities that are
permitted by this Agreement (including the issuance of preferred Equity
Interests to the extent permitted by Section 6.01(c)) and (vi) legal, tax and
accounting matters in connection with any of the foregoing activities. Holdings
will not own or acquire any assets (other than the Equity Interests of the
Borrower, cash and Permitted Investments) or incur any liabilities (other than
liabilities under the Loan Documents, liabilities imposed by law, including tax
liabilities, and other liabilities incidental to its existence and permitted
business and activities).
Section 6.04. Investments, Loans, Advances, Guarantees and Acquisitions.
The Borrower will not, and will not permit any Subsidiaries to, purchase, hold
or acquire (including pursuant to any merger with any Person that was not a
wholly-owned Subsidiary prior to such merger) any Equity Interests in or
evidences of indebtedness or other securities (including any option, warrant or
other right to acquire any of the
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foregoing) of, make or permit to exist any loans or advances to, Guarantee any
obligations of, or make or permit to exist any investment or any other interest
in, any other Person, or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person constituting a business
unit, except:
(a) intentionally deleted;
(b) Permitted Investments;
(c) investments existing on the date hereof and set forth on
Schedule 6.04;
(d) investments by the Borrower and the Subsidiaries in Equity
Interests in their respective subsidiaries; provided that (i) any such
Equity Interests held by a Loan Party shall be pledged pursuant to the
Security Documents and (ii) no additional investments by Loan Parties in
subsidiaries that are not Loan Parties shall be made after the Effective
Date except as provided in the Budget;
(e) loans or advances made by the Borrower to any subsidiary and
made by any Subsidiary to the Borrower or any other subsidiary; provided
that (i) any such loans and advances made by a Loan Party shall be
evidenced by a promissory note pledged pursuant to the Security Documents
and (ii) no additional loans or advances shall made by Loan Parties to
subsidiaries that are not Loan Parties after the Effective Date except as
provided in the Budget;
(f) Guarantees constituting Indebtedness permitted by Section 6.01;
provided that (i) a Subsidiary shall not Guarantee the Senior Debt unless
such Subsidiary also has Guaranteed the Post-Petition Obligations and the
Pre-Petition Obligations, and (ii) no additional Indebtedness of
Subsidiaries that are not Loan Parties shall be Guaranteed by any Loan
Party after the Effective Date except as provided in the Budget;
(g) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(h) intentionally deleted;
(i) receivables owing to the Borrower or any Subsidiary if created
or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms;
(j) existing Swap Agreements;
(k) loans and advances by the Borrower and the Subsidiaries to
employees or directors of the Borrower and the Subsidiaries for moving and
travel
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expenses and other similar expenses, in each case incurred in the ordinary
course of business, in an aggregate principal amount not to exceed
$1,000,000 at any time outstanding (determined without regard to any
write-downs or write-offs of such loans and advances); and
(l) the EPTEC loans.
Section 6.05. Asset Sales. The Borrower will not, and will not permit any
Subsidiary to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interests owned by it, nor will the Borrower permit any
Subsidiary to issue any additional Equity Interests in such Subsidiary, except:
(a) sales of inventory, used equipment and Permitted Investments in
the ordinary course of business and consistent with past practice; and
(b) sales, transfers and other dispositions of assets (other than
less than all the Equity Interests in a Subsidiary) that are not permitted
by any other clause of this Section; provided that the aggregate fair
market value of all assets sold, transferred or otherwise disposed of in
reliance upon this clause (b) shall not exceed $1,000,000 in the
aggregate.
Section 6.06. Sale and Leaseback Transactions. The Borrower will not, and
will not permit any Subsidiary to, enter into any arrangement, directly or
indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred.
Section 6.07. Swap Agreements. The Borrower will not, and will not permit
any Subsidiary to, enter into any Swap Agreement, other than Swap Agreements
outstanding on the Effective Date.
Section 6.08. Restricted Payments; Certain Payments of Indebtedness. (a)
No Loan Party will, nor will they permit any Subsidiary to, declare or make, or
agree to pay or make, directly or indirectly, any Restricted Payment, or incur
any obligation (contingent or otherwise) to do so, except (i) Holdings may
declare and pay dividends with respect to its capital stock payable solely in
additional shares of its common stock, (ii) Subsidiaries of the Borrower may
declare and pay dividends ratably with respect to their capital stock, and (iii)
the Borrower may reimburse Granaria or any of its Affiliates for their
reasonable out-of-pocket expenses relating to their management of Holdings so
long as at the time of such payment and after giving effect thereto as Default
exists.
(b) Neither Holdings nor the Borrower will, nor will they permit any
Subsidiary to, make or agree to pay or make, directly or indirectly, any payment
or other distribution (whether in cash, securities or other property) of or in
respect of principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or
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other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any Indebtedness (other than the payment of the Obligations as provided
herein and in the Financing Order or as otherwise ordered by the Bankruptcy
Court and consistent with the Interim Financing Order and any Final Financing
Order approved by the DIP Lenders).
Section 6.09. Transactions with Affiliates. No Loan Party will, nor will
they permit any Subsidiary to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except (a) transactions in the ordinary course of business that do not involve
Holdings and are at prices and on terms and conditions not less favorable to the
Borrower or such Subsidiary than could be obtained on an arm's-length basis from
unrelated third parties, (b) transactions between or among the Borrower and the
Subsidiary Loan Parties not involving any other Affiliate, (c) any Restricted
Payment permitted by Section 6.08, (d) any sale, transfer or disposition by a
Loan Party to another Loan Party pursuant to Section 6.05(b), and (e) the EPTEC
loans.
Section 6.10. Restrictive Agreements. No Loan Party will, nor will they
permit any Subsidiary to, directly or indirectly, enter into, incur or permit to
exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of Holdings, the Borrower or any Subsidiary
to create, incur or permit to exist any Lien upon any of its property or assets,
or (b) the ability of any Subsidiary to pay dividends or other distributions
with respect to any shares of its capital stock or to make or repay loans or
advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of
the Borrower or any other Subsidiary; provided that (i) the foregoing shall not
apply to restrictions and conditions imposed by law or by any Loan Document or
Senior Debt Documents, or the Pre-Petition Loan Documents, (ii) the foregoing
shall not apply to restrictions and conditions existing on the date hereof
identified on Schedule 6.10 (but shall apply to any amendment or modification
expanding the scope of any such restriction or condition), (iii) the foregoing
shall not apply to customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is to be sold and
such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.
Section 6.11. Amendment of Material Documents. No Loan Party will, nor
will they permit any Subsidiary to, amend or modify, or permit the amendment or
modification of, any provision of (a) its certificate of incorporation, by-laws
or other organizational documents, (b) any Senior Debt Document, (c) the
Certificate of Designation, (d) the Industrial Revenue Bonds, (e) the 1996
Confirmation Order, (f) the 1996 Plan of Reorganization, or (g) the 1996
Permanent Injunction, other than amendments or modifications that are not in any
manner materially adverse to Lenders
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and that do not affect the subordination provisions thereof (if any) in a manner
adverse to the Lenders.
Section 6.12. Chapter 11 Claims. No Loan Party shall, nor shall it permit
any Subsidiary to, directly or indirectly create, incur, assume or suffer to
exist (in each case, to "Incur") or permit any unsecured claim in the Chapter 11
Cases or (subject to Section 726(b) of the Bankruptcy Code) any superseding case
or cases under Chapter 7 of the Bankruptcy Code (including, without limitation,
any deficiency claim remaining after the satisfaction of a Lien that secures a
claim) to be pari passu with or senior to the claims of the DIP Agent and the
Lenders against the Loan Parties on the Post-Petition Obligations, or apply to
the Bankruptcy Court for authority so to do, except for the Administrative
Expense Carve-Out and except as otherwise provided in the Interim Financing
Order.
Section 6.13. Assets Purchases, Executory Contracts, Pre-Petition Debt and
Payments Outside the Ordinary Course of Business. No Loan Party shall, nor shall
it permit any Subsidiary to, directly or indirectly (a) purchase any assets
outside the ordinary course of business, except for interests in Transferred
Receivables and related assets repurchased in connection with the termination of
the Permitted Receivables Financing referred to in Section 4.01(o) above, (b)
assume any material executory contracts (other than the executory contracts
listed on Exhibit C) under Section 365 of the Bankruptcy Code without the prior
approval of the DIP Agent, (c) pay any pre-petition debt, other than (i) the
Pre-Petition Obligations and obligations with respect to the Permitted
Receivables Financing as permitted by this Agreement and the Financing Order,
(ii) pre-petition obligations owed to Normalized Trade Creditors to the extent
consistent with the Budget, (iii) pre-petition obligations to other Essential
Trade Creditors that are not trade creditors to the extent consistent with the
Budget and up to $100,000 in the aggregate for certain ordinary course
professionals, and (iv) employee incentives, retention, and severance benefits,
to the extent consistent with the Budget, and (d) make any payments outside the
ordinary course of their respective businesses, in each case without prior
approval of the Bankruptcy Court.
Section 6.14. Limitation on Restrictions on Disclosure of Certain
Information. No Loan Party shall, nor shall it permit any Subsidiary to,
directly or indirectly enter into any consensual encumbrance or restriction
(subject to any mandatory requirements of the United States of America or any of
its agencies) on the ability of any Loan Party to disclose to the DIP Agent or
the Lenders the information and matters the Loan Parties are required to report
pursuant to Section 5.01 of this Agreement.
Section 6.15. No Additional Subsidiaries; Inactive Subsidiaries;
Receivables Subsidiary. No Loan Party shall permit any additional Subsidiary to
be formed or acquired (or permit any Inactive Subsidiary to cease being an
Inactive Subsidiary) after the Effective Date. Immediately following the initial
Borrowing made hereunder, the Receivables Subsidiary shall be, and shall at all
times thereafter continue to be, an Inactive Subsidiary.
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ARTICLE VII
EVENTS OF DEFAULT
If any of the following events (each an "Event of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise, or the Borrower shall fail
to pay any Adequate Protection Obligation when due in accordance with the
terms of the Financing Order;
(b) the Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this Agreement or any other Loan Document,
when and as the same shall become due and payable, and such failure shall
continue unremedied for a period of two Business Days;
(c) any representation or warranty made or deemed made by or on
behalf of Holdings, the Borrower or any Subsidiary in or in connection
with any Loan Document or any amendment or modification thereof or waiver
thereunder, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with any Loan Document or
any amendment or modification thereof or waiver thereunder, shall prove to
have been incorrect (or, in the case of any such representation or
warranty that is not qualified as to materiality, incorrect in any
material respect) when made or deemed made;
(d) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in Section (5.01(f) (Borrowing Base
Report), 5.02, 5.04 or 5.11 or in Article VI;
(e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b) or (d) of this Article), and such failure
shall continue unremedied for a period of ten (10) Business Days after
notice thereof from the DIP Agent to the Borrower (which notice will be
given at the request of any Lender);
(f) other than defaults arising as a result of the Chapter 11 Cases,
and other than payments that are stayed pursuant thereto, Holdings, the
Borrower or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, beyond the period of grace, if any, provided in the
instrument, agreement or other document evidencing or governing such
Material Indebtedness;
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(g) other than defaults arising as a result of the filing of the
Chapter 11 Cases, and other than matters that are otherwise stayed
pursuant thereto, any event or condition occurs that results in any
Material Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material Indebtedness
to become due, or to require the prepayment, repurchase, redemption or
defeasance thereof, prior to its scheduled maturity; provided that this
clause (g) shall not apply to secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets
securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of any Subsidiary who is not a Loan Party or its debts,
or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for any
Subsidiary who is not a Loan Party or for a substantial part of its
assets, and, in any such case, such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of
the foregoing shall be entered (provided the occurrence of any event
specified herein shall not constitute an Event of Default if the
proceeding with respect to such Subsidiary is jointly administered with
the Borrower and the other Loan Parties and the Financing Orders are
modified so as to afford the Lenders and the Pre-Petition Lenders the same
protections with respect to such Subsidiary and its assets as they have
with respect to the Subsidiary Loan Parties party to this Agreement);
(i) any Subsidiary who is not a Loan Party shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or petition described in clause (h)
of this Article, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for any Subsidiary who is not a Loan Party or for a substantial
part of its assets, (iv) file an answer admitting the material allegations
of a petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing (provided the occurrence of any
event specified herein shall not constitute an Event of Default if the
proceeding with respect to such Subsidiary is jointly administered with
the Borrower and the other Loan Parties and the Financing Orders are
modified so as to afford the Lenders and the Pre-Petition Lenders the same
protections with respect to such Subsidiary and its assets as they have
with respect to the Subsidiary Loan Parties party to this Agreement);
(j) intentionally deleted;
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(k) one or more judgments for the payment of money in an aggregate
amount (that is not covered by insurance to the extent such insurance is
provided by insurers that are solvent and have not denied payment with
respect to any such event or condition) in excess of $5,000,000 shall be
rendered against Holdings, the Borrower, any Subsidiary or any combination
thereof and the same shall remain undischarged for a period of 60
consecutive days during which execution shall not be effectively stayed,
or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of Holdings, the Borrower or any Subsidiary to
enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that
have occurred, could reasonably be expected to result in liability of the
Borrower, the Subsidiaries or the Borrower's ERISA Affiliates in an
aggregate amount exceeding (i) $5,000,000 in any year or (ii) $10,000,000
for all periods;
(m) any Lien purported to be created under any Security Document
shall cease to be, or shall be asserted by any Loan Party not to be, a
valid and perfected Lien on any Collateral, with the priority required by
the applicable Security Document, except as a result of the sale or other
disposition of the applicable Collateral in a transaction permitted under
the Loan Documents;
(n) a Change in Control shall occur;
(o) the Borrower or any Subsidiary shall become generally subject to
asbestos-related claims that were otherwise enjoined as to the Borrower or
such Subsidiary by the 1996 Permanent Injunction;
(p) the failure of any Loan Party to comply with any of the terms of
the Financing Order or the occurrence of any condition or event which
permits the Lenders to exercise any of the remedies set forth in the
Financing Order, including, without limitation, any "Termination Event" as
defined in the Financing Order;
(q) the granting of a Lien on or other interest in any Property of
any Loan Party, or Superpriority Claim, by any Bankruptcy or District
Court Judge which is superior to or ranks in parity with the Lien of the
DIP Agent granted in this Agreement and the Financing Order except for the
Administrative Expense Carve Out and as otherwise permitted under the
Financing Order;
(r) any Lien purported to be created by this Agreement, the Interim
Financing Order or the Final Financing Order in any of the Collateral
shall, for any reason other than the acts of the DIP Agent, the DIP
Lenders, the Pre-Petition Agent or the Pre-Petition Lenders, cease to be
valid or any action is commenced by any Debtor which contests the
validity, perfection or enforceability of any pre-petition Liens of
Pre-Petition Agent under any of the Pre-Petition Loan
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Documents or any Lien created by this Agreement, the Interim Financing
Order or the Final Financing Order;
(s) (i) an order shall be entered by the Bankruptcy Court confirming
a plan of reorganization of any Debtor without the Lenders' consent, or
(ii) there shall be substantial consummation of a plan of reorganization
of any Debtor;
(t) any material provision of any Loan Document shall, for any
reason, cease to be valid and binding on any Loan Party or any Loan Party
shall so assert in any pleading filed in any court, or any Lien created by
the Loan Documents or the Financing Order shall cease to be a valid and
perfected Lien against any of the Collateral purported to be covered
thereby pursuant to Sections 364(c) and (d) of the Bankruptcy Code;
(u) any of the Chapter 11 Cases shall be dismissed or converted to a
case under Chapter 7 of the Bankruptcy Code;
(v) a trustee under Chapter 7 or Chapter 11 of the Bankruptcy Code
shall be appointed in any of the Chapter 11 Cases;
(w) an order of the Bankruptcy Court shall be entered in any of the
Chapter 11 Cases appointing an examiner with enlarged powers relating to
the operation of the business (powers beyond those set forth in Section
1106(a)(3) and (4) of the Bankruptcy Code) under Section 1106(b) of the
Bankruptcy Code;
(x) the Financing Order shall be amended, modified, stayed, vacated,
reversed or rescinded in any way which materially and adversely affects
the rights of the Lenders or the DIP Agent and which modification is not
acceptable to the DIP Lenders;
(y) an application shall be filed by any Debtor for the approval of
any other Superpriority Claim in any of the Chapter 11 Cases which is pari
passu with or senior to the claims of the DIP Agent and the Lenders with
respect to the Post-Petition Obligations (except for the Administrative
Expense Carve-Out) or there shall arise any such pari passu or
Superpriority Claim;
(z) the Bankruptcy Court shall enter an order or orders granting
relief from the automatic stay applicable under Section 362 of the
Bankruptcy Code with respect to any Lien on any assets of any Loan Party
having an aggregate net book value (determined in accordance with
generally accepted accounting principles, consistently applied) in excess
of $1,000,000 for all such assets;
(aa) other than as contemplated by the Budget, any Debtor
permanently ceases operation of any of its businesses (other than as a
result of the shut-down of its three (3) Hillside business operation
plants disclosed in writing to the DIP
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Agent) or takes any material action for the purpose of effecting the
foregoing without the prior written consent of the DIP Agent;
(bb) the Bankruptcy Court shall not overrule any objection filed
with respect to the Lien Finding within 60 days following the appointment
of the creditors committee; or
(cc) any Material Adverse Effect shall occur.
Upon the occurrence of the Maturity Date and upon the occurrence and during the
continuation of any Event of Default beyond the applicable cure period (if any)
and upon the expiration of three (3) Business Days after written notice by the
DIP Agent to the Borrower, the DIP Agent, the Lenders and the Pre-Petition
Lenders, as applicable, may take any or all of the following actions, in each
case without further order of or application to the Bankruptcy Court:
(a) declare the principal of an accrued interest on the outstanding
Post-Petition Obligations to be immediately due and payable;
(b) set off any amounts in any account (including any accounts
maintained by the Borrower with the DIP Agent)
(c) terminate the DIP Commitments and any other obligations of the
Lenders to extend any further credit hereunder on the date (which may be
the date thereof) stated in such notice;
(d) demand that any Cash Collateral be applied to reduce or
collateralize the Post-Petition Obligations and Pre-Petition Obligations
as set forth in Section 2.15(c);
(e) demand payment of interest on the Post-Petition Obligations and
Pre-Petition Obligations at the default rates set forth herein and in the
Financing Order, in which event interest at such rates shall accrue and be
payable as therein set forth without further order of or application to
the Bankruptcy Court; and
(f) the automatic stay shall be deemed lifted as to the Collateral
and the DIP Agent may, and upon request of the Required Lenders shall,
(without regard to whatever other action the DIP Agent or the Lenders may
be taking), foreclose and realize upon and exercise any other rights or
remedies with respect to the Collateral as security for the Post-Petition
Obligations and Pre-Petition Obligations.
Nothing contained in this Agreement shall impair or otherwise effect the
Lenders' right to seek relief from the automatic stay as to their Collateral for
cause at any time, which right the Lenders hereby fully reserve.
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ARTICLE VIII
THE DIP AGENT
Each of the Lenders, the Issuing Bank and the Swingline Lender hereby
irrevocably appoints the DIP Agent as its agent and authorizes the DIP Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the DIP Agent by the terms of the Loan Documents, together with such actions and
powers as are reasonably incidental thereto.
The Lender serving as the DIP Agent hereunder shall have the same rights
and powers in its capacity as a Lender as any other Lender and may exercise the
same as though it were not the DIP Agent, and such Lender and its Affiliates may
accept deposits from, lend money to and generally engage in any kind of business
with Holdings, the Borrower or any Subsidiary or other Affiliate thereof as if
it were not the DIP Agent hereunder.
The DIP Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) the DIP Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) the DIP Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that the DIP Agent is required to
exercise as directed in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 11.02(b)), and (c) except as expressly set forth in the Loan
Documents, the DIP Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to Holdings, the
Borrower or any Subsidiary that is communicated to or obtained by the DIP Agent
or any of its Affiliates in any capacity. The DIP Agent shall not be liable for
any action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 11.02(b)) or in the
absence of its own gross negligence or willful misconduct. The DIP Agent shall
be deemed not to have knowledge of any Default unless and until written notice
thereof is given to the DIP Agent by the Borrower or a Lender, and the DIP Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or document
or (v) the satisfaction of any condition set forth in Article IV or elsewhere in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to the DIP Agent.
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The DIP Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The DIP Agent also may
rely upon any statement made to it orally or by telephone and believed by it to
be made by the proper Person, and shall not incur any liability for relying
thereon. The DIP Agent may consult with legal counsel (who may be counsel for
the Borrower), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.
The DIP Agent may perform any and all its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by the DIP Agent.
The DIP Agent and any such sub-agent may perform any and all its duties and
exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of the DIP Agent and any such sub-agent,
and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as DIP Agent.
Subject to the appointment and acceptance of a successor DIP Agent as
provided in this paragraph, the DIP Agent may resign at any time by giving the
Lenders, the Issuing Bank and the Borrower at least 30 days' notice. Upon any
such resignation, the Required Lenders shall have the right to appoint a
successor, which shall (unless an Event of Default shall have occurred and be
continuing) be reasonably acceptable to the Borrower. If no successor shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring DIP Agent gives notice of its
resignation, then the retiring DIP Agent may, on behalf of the Lenders and the
Issuing Bank, appoint a successor DIP Agent which shall be a bank or other
financial institution with an office in Chicago, Illinois, or New York City
reasonably acceptable to the Borrower, or an Affiliate of any such bank or
financial institution. Upon the acceptance of its appointment as DIP Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring DIP Agent, and the
retiring DIP Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor DIP Agent shall be
the same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the DIP Agent's resignation hereunder, the
provisions of this Article and Section 11.03 shall continue in effect for the
benefit of such retiring DIP Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as DIP Agent.
Each Lender acknowledges that it has, independently and without reliance
upon the DIP Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the DIP Agent or any other Lender
and based on such documents and information as it shall from time to time deem
appropriate, continue to make its own
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decisions in taking or not taking action under or based upon this Agreement, any
other Loan Document or related agreement or any document furnished hereunder or
thereunder.
ARTICLE IX.
THE COLLATERAL
Section 9.01. Security. As collateral security for the prompt and complete
payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of the Post-Petition Obligations and the Adequate Protection
Obligations and to induce the Lenders to make the DIP Credit available to the
Borrower in accordance with the terms hereof, the Borrower and each of the
Guarantors hereby assigns, creates, grants, conveys, mortgages, pledges,
hypothecates and transfers to the DIP Agent for the ratable benefit of the
Lenders, first priority Liens and for the benefit of the Pre-Petition Lenders
second priority Liens (subject to Permitted Liens permitted by, and with the
priority established by, the Interim Financing Order) in accordance with
Sections 364(c) and (d) of the Bankruptcy Code in all right, title and interest
of the Borrower and each of the Guarantors in and to any and all Property,
assets and things of value of every kind or type, tangible, intangible, real,
personal and fixed, whether now owned or hereafter acquired and wherever
located, including, without limitation, real property (including without
limitation all leasehold interests, mineral leases, and mineral and water
rights), the Cash Collateral Account and all other deposit accounts, accounts,
chattel paper, instruments, documents, inventory, equipment, rolling stock
(including titled and non-titled vehicles), general intangibles (including,
without limitation, payment intangibles, intellectual property, interests in
partnerships and joint ventures, tax refunds and bankruptcy-related causes of
action), letter of credit rights, supporting obligations, commercial tort
claims, and investment property and, to the extent not otherwise included, (i)
all proceeds of each of the foregoing, (ii) all accessions to, substitutions and
replacements (including any Property repaired, rebuilt or replaced with casualty
insurance proceeds and condemnation awards) for, and insurance and condemnation
proceeds, rents, profits and products of each of the foregoing, (iii) all monies
and other property of any kind and nature recovered by the Borrower and each of
the Guarantors in accordance with the provisions of the Bankruptcy Code,
including, without limitation, Sections 544, 547 and 548 thereof, or other
applicable law but except as otherwise provided in the Financing Order, (iv) the
Pre-Petition Collateral and (v) all Property of the Borrower and each of the
Guarantors held by the DIP Agent or any Lender, including without limitation,
the funds from time to time on deposit in the Collection Accounts referred to in
Section 9.03 hereof, any funds held in escrow by the DIP Agent pursuant to the
last sentence of Section 2.10(d) hereof and all other Property of every
description, now or hereafter in the possession or custody of or in transit to
the DIP Agent or any Lender for any purpose, including safekeeping, collection
or pledge, for the account of the Borrower or any Guarantor or as to which the
Borrower or any Guarantor may have any right or power (all of which being
hereinafter collectively referred to as the "Collateral").
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Section 9.02. Perfection of Security Interests. (a) At the request of the
DIP Agent or the Required Lenders and at the Borrower's expense, the Borrower
and each of the Guarantors shall (i) execute and deliver to the DIP Agent
documentation satisfactory to the DIP Agent or the Lenders evidencing the Liens
granted hereby, providing for the perfection of such Liens and evidencing that
the automatic stay provisions of Section 362 of the Bankruptcy Code have been
modified to permit the execution, delivery and filing of such documentation, and
(ii) perform or take any and all steps at any time necessary to perfect,
maintain, protect and enforce the DIP Agent's Lien on the Collateral; provided,
however, that no such documentation shall be required as a condition to the
validity, priority or perfection of any of the Liens created pursuant to this
Agreement which security interests and liens shall be deemed valid and properly
perfected upon approval by the Bankruptcy Court of the Financing Order.
(b) Until all Post-Petition Obligations and Adequate Protection
Obligations have been indefeasibly satisfied and paid in full by the Debtors and
the Commitments shall have terminated, the DIP Agent's security interest in the
Collateral as security for such obligations shall continue in full force and
effect.
(c) Notwithstanding the provisions of Section 2.2(a) hereof, or failure on
the part of the Borrower, any Guarantor, the DIP Agent or any Lender to perfect,
maintain, protect or enforce the DIP Agent's Lien on the Collateral, the
Financing Order shall automatically, and without further action by any Person,
perfect the DIP Agent's Lien against the Collateral.
Section 9.03. Receivables and Inventory Collections. The Borrower and the
Guarantors agree to continue, or if appropriate, forthwith make, such
arrangements as shall be necessary or appropriate to assure that all proceeds of
the inventory and accounts receivable of the Borrower and the Guarantors and any
other Cash Collateral generated after the Closing Date are deposited (in the
same form as received) in an account maintained with the DIP Agent or accounts
under the control of the DIP Agent (except for local petty cash accounts and
local payroll accounts approved by the DIP Agents (the "Petty Cash and Payroll
Accounts")) which provide for collections therein to be transmitted, upon the
DIP Agent's request, to an account maintained with or otherwise under the
exclusive dominion and control of the DIP Agent, all such accounts maintained
with or under the control of the DIP Agent to constitute special restricted
accounts (each a "Collection Account" and collectively the "Collection
Accounts"). The Borrower acknowledges on behalf of itself and the Guarantors
that the DIP Agent has (and is hereby granted to the extent that it does not
already have) a Lien for the ratable benefit of the Lenders on each of the
Collection Accounts and all funds contained therein to secure the Post-Petition
Obligations and Adequate Protection Obligations, subject to the provisions of
the Financing Order and the Bankruptcy Code. Cash held in the Collection
Accounts shall constitute Cash Collateral subject to the Financing Order (if in
effect) and otherwise as the Bankruptcy Court shall determine.
Section 9.04. Cash Collateral Account. All Cash Collateral and other
amounts referred to in Section 2.15(b) shall be deposited by the Loan Parties in
one or more
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accounts subject to the DIP Agent's first priority perfected Lien and, if at any
time required by the DIP Agent, under its exclusive dominion and control
(collectively, the "Cash Collateral Account"). Such funds shall be held in the
Cash Collateral Account until such time as the amounts held therein are applied
by the relevant Loan Party to pay normal operating expenses consistent with the
Budget and the Interim Financing Order and any Final Financing Order approved by
the DIP Lenders or as the DIP Agent shall otherwise require, except that the Net
Cash Proceeds of Dispositions shall be applied as set forth in Section 2.10(d)
hereof. So long as no Event of Default shall have occurred and be continuing,
amounts held in the Cash Collateral Account shall be made available to the
relevant Loan Party to pay normal operating expenses consistent, in amount and
type of expenditure, with the Budget. During the existence of an Event of
Default all amounts held in the Cash Collateral Account shall be applied as
required by Section 2.15(c).
Section 9.05. Rights of DIP Agent. The DIP Agent may, or upon the
direction of the Required Lenders, shall, in each case at any time on or after
the Termination Date, after three (3) Business Days prior written notice to the
Borrower of its intention to do so, notify account debtors, parties to contracts
with the Borrower or any Guarantor, obligors on instruments of the Borrower or
any Guarantor and obligors in respect of chattel paper of the Borrower or any
Guarantor that the right, title and interest of the Borrower and the Guarantors
in and under such accounts, such contracts, such instruments and such chattel
paper have been assigned to the DIP Agent and that payments shall be made
directly to the DIP Agent. Upon the request of the DIP Agent or the Required
Lenders on or after the Termination Date, the Borrower and the Guarantors will,
so notify such account debtors, such parties to contracts, obligors on such
instruments and obligors in respect of such chattel paper. Upon the occurrence
and during the continuation of a Default or an Event of Default, the DIP Agent
may in its own name or in the name of others communicate with such parties to
such accounts, such contracts, such instruments and such chattel paper to verify
with such persons to the DIP Agent's satisfaction the existence, amount and
terms of any such accounts, contracts, instruments or chattel paper.
Section 9.06. Performance by DIP Agent of Debtor's Post-Petition
Obligations. If the Borrower or any Guarantor fails to perform or comply with
any of its agreements contained in this Agreement, the other Loan Documents or
the Financing Order and the DIP Agent, as provided for by the terms of this
Agreement, shall itself perform or comply, or otherwise cause performance or
compliance, with such agreement, the reasonable expenses of the DIP Agent
incurred in connection with such performance or compliance, together with
interest thereon at the rate per annum determined by adding 5% to the Alternate
Base Rate as from time to time in effect, shall be payable by the Loan Parties
to the DIP Agent on demand and shall constitute Post-Petition Obligations
secured by the Collateral. Moreover, neither the DIP Agent nor any Lender shall
in any way be responsible for the payment of any costs incurred in connection
with preserving or disposing of Collateral pursuant to Section 506(c) of the
Bankruptcy Code, and the Collateral may not be charged for the incurrence of any
such cost.
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Section 9.07. DIP Agent's Appointment as Attorney-in-Fact. (a) The
Borrower and each of the Guarantors hereby irrevocably constitutes and appoints
the DIP Agent and any officer of DIP Agent, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power and authority
in the place and stead of the Borrower and each of the Guarantors and in the
name of the Borrower or such Guarantor or in the DIP Agent's own name, from time
to time in the DIP Agent's discretion, for the purpose of collecting the
Post-Petition Obligations when due in accordance with the provisions of this
Agreement, to take any and all appropriate action and to execute and deliver any
and all documents and instruments which may be necessary and desirable to
accomplish such purpose, and, without limiting the generality of the foregoing,
hereby gives the DIP Agent the power and right, on behalf of the Borrower and
the Guarantors, without notice to or assent from them, to do the following:
(i) to ask, demand, collect, receive and give acquittances and
receipts for any and all monies due and to become due under any Collateral
and, in the name of the Borrower or any Guarantor or the DIP Agent's own
name or otherwise, to take possession of and endorse and collect any
checks, drafts, notes, acceptances or other instruments for the payment of
moneys due under any Collateral and to file any claim or to take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the DIP Agent for the purpose of collecting any and all
moneys due under any Collateral whenever payable and to file any claims or
to take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the DIP Agent for the purpose of
collecting any and all such moneys due under any Collateral whenever
payable;
(ii) to pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against the Collateral, to
effect any repairs or any insurance called for by the terms of this
Agreement and to pay all or any part of the premiums therefor and the
costs thereof; and
(iii) (A) to direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due, and to become
due, and to become due thereunder, directly to the DIP Agent or as the DIP
Agent shall direct; (B) to receive payment of and receipt for any and all
moneys, claims and other amounts due and to become due at any time in
respect of or arising out of any Collateral; (C) to sign and endorse any
invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against the Borrower or any Guarantor, assignments,
verifications and notices in connection with accounts and other documents
constituting or relating to the Collateral; (D) to commence and prosecute
any suits, actions or proceedings at law or equity in any court of
competent jurisdiction to collect the Collateral or any part thereof and
to enforce any other right in respect of any Collateral; (E) to defend any
suit, action or proceeding brought against the Borrower or any Guarantor
with respect to any Collateral; (F) to settle, compromise or adjust any
suit, action or proceeding described above and, in connection therewith,
to give such discharges or releases
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as the DIP Agent or the Required Lenders may deem appropriate; (G) to
license or, to the extent permitted by an applicable license, sublicense,
whether general, special or otherwise, and whether on an exclusive or
non-exclusive basis, any trademark, throughout the world for such term or
terms, on such conditions, and in such manner, as the DIP Agent or the
Required Lenders shall in its or their sole discretion determine is
appropriate to liquidate the Collateral; and (H) 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 the DIP Agent
were the absolute owner thereof for all purposes, and to do, at the option
of the DIP Agent and at the Borrower's expense, at any time, or from time
to time, all acts and things which the DIP Agent reasonably deems
necessary to protect, preserve or realize upon the Collateral and the DIP
Agent's lien therein, in order to effect the intent of this Agreement, all
as fully and effectively as the Borrower and the Guarantors might do.
(b) The DIP Agent agrees that it will forbear from exercising the power of
attorney or any rights granted to them pursuant to this Section until after the
Termination Date or as otherwise expressly permitted by this Agreement. The
Borrower and the Guarantors hereby ratifies, to the extent permitted by law, all
that said attorneys shall lawfully do or cause to be done by virtue hereof. The
power of attorney granted pursuant to this Section is a power coupled with an
interest and shall be irrevocable until the Post-Petition Obligations and the
Adequate Protection Obligations are indefeasibly paid in full and the
Commitments have terminated.
(c) The powers conferred on the DIP Agent hereunder are solely to protect
the DIP Agent's and the Lenders' interests in the Collateral and shall not
impose any duty upon any of them to exercise any such powers. The DIP Agent
shall be accountable only for amounts that it actually receives as a result of
the exercise of such powers and neither it nor any of its officers, directors,
employees or DIP Agents shall be responsible to the Borrower and the Guarantors
for any act or failure to act, except for its own gross negligence or willful
misconduct.
(d) The Borrower and each Guarantor also authorizes the DIP Agent, at any
time and from time to time on and after the Termination Date or as otherwise
expressly permitted by this Agreement, (i) to communicate, in the name of the
Borrower or such Guarantor or in the DIP Agent's own name (at the DIP Agent's
option), with any party to any contract with regard to the assignment of the
right, title and interest of the Borrower or such Guarantor in and under the
contracts hereunder and other matters relating thereto and (ii) to execute any
endorsements, assignments or other instruments or conveyance or transfer with
respect to the Collateral.
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ARTICLE X
GUARANTEE
Section 10.01. Guarantee. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the DIP Agent, for the
ratable benefit of the Lenders and their respective successors, indorsees,
transferees and assigns, the prompt and complete payment and performance by the
Borrower when due (whether at the stated maturity, by acceleration or otherwise)
of the Post-Petition Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 10.02).
(c) Each Guarantor agrees that the Post-Petition Obligations may at any
time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Article 10 or
affecting the rights and remedies of the DIP Agent or any Lender hereunder.
(d) The guarantee contained in this Article 10 shall remain in full force
and effect until all the Post-Petition Obligations and the obligations of each
Guarantor under the guarantee contained in this Article 10 shall have been
satisfied by payment in full, no LC Exposure shall be outstanding and the
Commitments shall have been terminated, notwithstanding that from time to time
during the term of this Agreement the Borrower may be free from any
Post-Petition Obligations.
(e) No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the DIP Agent or any
Lender from the Borrower, any of the Guarantors, any other guarantor or any
other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of or
in payment of the Post-Petition Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of any Guarantor hereunder which
shall, notwithstanding any such payment (other than any payment made by such
Guarantor in respect of the Post-Petition Obligations or any payment received or
collected from such Guarantor in respect of the Post-Petition Obligations),
remain liable for the Post-Petition Obligations up to the maximum liability of
such Guarantor hereunder until the Post-Petition Obligations are paid in full,
no LC Exposure shall be outstanding and the Commitments are terminated.
Section 10.02. Right of Contribution. Each Guarantor hereby agrees that to
the extent that a Guarantor shall have paid more than its proportionate share of
any payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and
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conditions of Section 10.03. The provisions of this Section 10.02 shall in no
respect limit the obligations and liabilities of any Guarantor to the DIP Agent
and the Lenders, and each Guarantor shall remain liable to the DIP Agent and the
Lenders for the full amount guaranteed by such Guarantor hereunder.
Section 10.03. No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the DIP Agent or any Lender, no Guarantor shall be entitled to be subrogated to
any of the rights of the DIP Agent or any Lender against the Borrower or any
other Guarantor or any collateral security or guarantee or right of offset held
by the DIP Agent or any Lender for the payment of the Post-Petition Obligations,
nor shall any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments
made by such Guarantor hereunder, until all amounts owing to the DIP Agent and
the Lenders by the Borrower on account of the Post-Petition Obligations are paid
in full, no LC Exposure shall be outstanding, and the Commitments are
terminated. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Post-Petition Obligations shall
not have been paid in full, such amount shall be held by such Guarantor in trust
for the DIP Agent and the Lenders, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
to the DIP Agent in the exact form received by such Guarantor (duly indorsed by
such Guarantor to the DIP Agent, if required), to be applied against the
Post-Petition Obligations, whether matured or unmatured, in such order as this
Agreement shall prescribe.
Section 10.04. Amendments, Etc. with Respect to the Post-Petition
Obligations. Each Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against any Guarantor and without notice
to or further assent by any Guarantor, any demand for payment of any of the
Post-Petition Obligations made by the DIP Agent or any Lender may be rescinded
by the DIP Agent or such Lender and any of the Post-Petition Obligations
continued, and the Post-Petition Obligations, or the liability of any other
Person upon or for any part thereof, or any collateral security or guarantee
therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the DIP Agent or any Lender, and
this Agreement and the other Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the DIP Agent (or the Required Lenders or
all Lenders, as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the DIP
Agent or any Lender for the payment of the Post-Petition Obligations may be
sold, exchanged, waived, surrendered or released. Neither the DIP Agent nor any
Lender shall as a condition to any Guarantor's liability hereunder have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Post-Petition Obligations or for the guarantee contained in
this Article X or any property subject thereto.
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Section 10.05. Guarantee Absolute and Unconditional. Each Guarantor waives
any and all notice of the creation, renewal, extension or accrual of any of the
Post-Petition Obligations and notice of or proof of reliance by the DIP Agent or
any Lender upon the guarantee contained in this Article X or acceptance of the
guarantee contained in this Article X; the Post-Petition Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Article X; and all dealings between the Borrower and any of
the Guarantors, on the one hand, and the DIP Agent and the Lenders, on the other
hand, likewise shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Article X. Each Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower or any of the Guarantors with respect to the
Post-Petition Obligations. Each Guarantor understands and agrees that the
guarantee contained in this Article X shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of this Agreement or any other Loan Document, any of
the Post-Petition Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the DIP Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower or any other Person against
the DIP Agent or any Lender, or (c) any other circumstance whatsoever (with or
without notice to or knowledge of the Borrower or such Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower for the Post-Petition Obligations, or of such
Guarantor under the guarantee contained in this Article X, in bankruptcy or in
any other instance. When making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against any Guarantor, the DIP Agent or any Lender
may, but shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as it may have against the Borrower, any other
Guarantor or any other Person or against any collateral security or guarantee
for the Post-Petition Obligations or any right of offset with respect thereto,
and any failure by the DIP Agent or any Lender to make any such demand, to
pursue such other rights or remedies or to collect any payments from the
Borrower, any other Guarantor or any other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of the Borrower, any other Guarantor or any other Person or any such
collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the DIP Agent or any Lender against any Guarantor. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.
Section 10.06. Reinstatement. The guarantee contained in this Article X
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Post-Petition Obligations is
rescinded or must otherwise be restored or returned by the DIP Agent or any
Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
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officer for, the Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.
Section 10.07. Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the DIP Agent without set-off or counterclaim in
Dollars at the office of the DIP Agent specified in this Agreement.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by facsimile, as follows:
(a) if to any Loan Party, to it at 3402 East University Drive,
Phoenix, Arizona 85034, Attention of Chief Financial Officer (Facsimile
No. _______) with a copy of any Notice of Default to: 250 E. Fifth Street,
5th Floor, Cincinnati, Ohio 45202, Attention of General Counsel, Treasurer
(Facsimile No. (513) 629-2571) and to Squire, Sanders & Dempsey L.L.P.,
312 Walnut Street, Suite 3500, Cincinnati, Ohio 45202, Attention: Stephen
D. Lerner, Esq.;
(b) if to the DIP Agent, Issuing Bank or Swingline Lender, to it at
111 West Monroe Street, Chicago, Illinois 60603, Attention of Lawrence A.
Mizera (Facsimile No. (312) 461-7958; and
(c) if to any other Lender, to it at the address (or facsimile
number) set forth in its administrative questionnaire heretofore provided
to the DIP Agent.
Any party hereto may change its address or facsimile number for notices
and other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.
Section 11.02. Waivers; Amendments. (a) No failure or delay by the DIP
Agent, the Issuing Bank or any Lender in exercising any right or power hereunder
or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the DIP Agent, the Issuing Bank and the Lenders hereunder and
under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of
any Loan Document or consent to any departure by any Loan Party therefrom shall
in any event be effective unless the same shall be
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permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the DIP Agent, any Lender or the Issuing Bank may
have had notice or knowledge of such Default at the time. No notice 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.
(b) Neither this Agreement nor any other Loan Document nor any provision
hereof or thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrower and the Required Lenders or, in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by the DIP Agent
and the Loan Party or Loan Parties that are parties thereto, in each case with
the consent of the Required Lenders; provided that no such agreement shall (i)
increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
maturity of any Loan, or the required date of reimbursement of any LC
Disbursement, or any date for the payment of any interest or fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender affected thereby, (iv) change Section 2.15(b) or (c) in a
manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (v) increase the advance rate on the
Investment Base referred in the definition of Borrowing Base or change any of
the provisions of this Section or the percentage set forth in the definition of
"Required Lenders" or any other provision of any Loan Document specifying the
number or percentage of Lenders required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender, (vi) release Holdings or any Subsidiary Loan
Party from its Guarantee, or limit its liability in respect of such Guarantee,
without the written consent of each Lender, or (vii) release all or any
substantial part of the Collateral from the Liens created or intended to be
created by this Agreement and the other Security Documents, without the written
consent of each Lender; provided further that no such agreement shall amend,
modify or otherwise affect the rights or duties of the DIP Agent, the Issuing
Bank or the Swingline Lender without the prior written consent of the DIP Agent,
the Issuing Bank or the Swingline Lender, as the case may be. Notwithstanding
the foregoing, any provision of this Agreement may be amended by an agreement in
writing entered into by Holdings, the Borrower, the Required Lenders and the DIP
Agent (and, if their rights or obligations are affected thereby, the Issuing
Bank and the Swingline Lender) if (i) by the terms of such agreement the
Commitment of each Lender not consenting to the amendment provided for therein
shall terminate upon the effectiveness of such amendment and (ii) at the time
such amendment becomes effective, each Lender not consenting thereto receives
payment in full of the principal of and
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interest accrued on each Loan made by it and all other amounts owing to it or
accrued for its account under this Agreement.
Section 11.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower shall
pay (i) all reasonable out-of-pocket expenses incurred by the DIP Agent,
including the reasonable fees, charges and disbursements of counsel for the DIP
Agent, in connection with the preparation and administration of the Loan
Documents or any amendments, modifications or waivers of the provisions thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the DIP Agent, the Issuing Bank or any
Lender, including the fees, charges and disbursements of any counsel for the DIP
Agent, the Issuing Bank or any Lender, in connection with the enforcement or
protection of its rights in connection with the Loan Documents, including its
rights under this Section, or in connection with the Loans made or Letters of
Credit issued hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans or
Letters of Credit.
(b) The Borrower shall indemnify the DIP Agent, the Issuing Bank and each
Lender, and the DIP Agent's agents, attorneys, and financial consultants and
each Related Party of any of the foregoing Persons (each such Person being
called an "Indemnitee") against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses, including the
reasonable fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of any Loan Document or
any other agreement or instrument contemplated hereby, the performance by the
parties to the Loan Documents of their respective obligations thereunder or the
consummation of the Transactions, any other transactions contemplated hereby,
(ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or Release of Hazardous Materials on or from any Mortgaged
Property or any other property currently or formerly owned or operated by
Holdings, the Borrower or any Subsidiary, or any Environmental Liability related
in any way to Holdings, the Borrower or any Subsidiary, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount required to be
paid by it to the DIP Agent, the Issuing Bank or the Swingline Lender under
paragraph (a) or
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(b) of this Section, each Lender severally agrees to pay to the DIP Agent, the
Issuing Bank or the Swingline Lender, as the case may be, such Lender's pro rata
share (determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the DIP Agent,
the Issuing Bank or the Swingline Lender in its capacity as such. For purposes
hereof, a Lender's "pro rata share" shall be determined based upon its share of
the sum of the total DIP Exposures and unused Commitments at the time.
(d) To the extent permitted by applicable law, neither Holdings, the
Borrower nor any Subsidiary shall assert, and each 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 or any
agreement or instrument contemplated hereby, the Bond Refinancing, the
Transactions or any Loan or Letter of Credit or the use of the proceeds thereof.
(e) RELEASE. FOR VALUE RECEIVED, INCLUDING WITHOUT LIMITATION, THE
AGREEMENTS OF THE LENDERS IN THIS AGREEMENT, THE LOAN PARTIES HEREBY RELEASE THE
DIP AGENT AND EACH LENDER, ITS CURRENT AND FORMER SHAREHOLDERS, DIRECTORS,
OFFICERS, AGENTS, EMPLOYEES, ATTORNEYS, CONSULTANTS, AND PROFESSIONAL ADVISORS
(COLLECTIVELY, THE "RELEASED PARTIES") OF AND FROM ANY AND ALL DEMANDS, ACTIONS,
CAUSES OF ACTION, SUITS, CONTROVERSIES, ACTS AND OMISSIONS, LIABILITIES, AND
OTHER CLAIMS OF EVERY KIND OR NATURE WHATSOEVER, BOTH IN LAW AND IN EQUITY,
KNOWN OR UNKNOWN, WHICH ANY LOAN PARTY HAS OR EVER HAD AGAINST THE RELEASED
PARTIES FROM THE BEGINNING OF THE WORLD TO THIS DATE, ARISING OUT OF THE
FINANCING ARRANGEMENTS BETWEEN THE BORROWER, THE GUARANTORS, THE DIP AGENT AND
THE LENDERS, AND THE LOAN PARTIES FURTHER ACKNOWLEDGE THAT, AS OF THE DATE
HEREOF, THEY DO NOT HAVE ANY COUNTERCLAIM, SET-OFF, OR DEFENSE AGAINST THE
RELEASED PARTIES, RELATING TO SUCH FINANCING ARRANGEMENTS EACH OF WHICH THE LOAN
PARTIES HEREBY EXPRESSLY WAIVE. NOTHING CONTAINED HEREIN APPLIES TO THE
PRE-PETITION CREDIT FACILITY OR THE PRE-PETITION AGENT OR PRE-PETITION LENDERS,
IN THEIR CAPACITIES AS SUCH.
(f) All amounts due under this Section shall be payable promptly after
written demand therefor.
Section 11.04. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i)
no Loan Party may assign or otherwise transfer any of its rights or
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obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by such Loan Party without such consent shall
be null and void) and (ii) no Lender may assign or otherwise transfer its rights
or obligations hereunder except in accordance with this Section. Nothing in this
Agreement, express or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the DIP Agent, the Issuing Bank and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below,
any Lender may assign to one or more assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld or delayed) of the DIP Agent;
provided that no consent of the DIP Agent shall be required for an assignment of
any Commitment to an assignee that is a Lender with a Commitment immediately
prior to giving effect to such assignment.
(ii) Assignments shall be subject to the following additional conditions:
(A) except in the case of an assignment to a Lender, or an
assignment of the entire remaining amount of the assigning Lender's
Commitment or Loans, the amount of the Commitment or Loans of the
assigning Lender subject to each such assignment (determined as of the
date the Assignment and Assumption with respect to such assignment is
delivered to the DIP Agent) shall not be less than $5,000,000 unless the
DIP 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;
(C) the parties to each assignment shall execute and deliver to the
DIP Agent an Assignment and Assumption, together with a processing and
recordation fee of $3,500;
(D) the assignee, if it shall not be a Lender, shall deliver to the
DIP Agent an administrative questionnaire duly completed in the form then
required by the DIP Agent; and
(E) such assignee shall represent to the Borrower and the DIP Agent
that it has the financial resources to honor its obligations as a Lender
hereunder.
(iii) Subject to acceptance and recording thereof pursuant to paragraph
(b)(iv) of this Section, from and after the effective date specified in each
Assignment and Assumption the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its
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obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.13, 2.14 and 11.03). Any assignment
or transfer by a Lender of rights or obligations under this Agreement that does
not comply with this Section 11.04 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 paragraph (c) of this Section.
(iv) The DIP Agent, acting for this purpose as an agent of the Borrower,
shall maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitment of, and principal amount of the Loans and LC
Disbursements owing to, each Lender pursuant to the terms hereof from time to
time (the "Register"). The entries in the Register shall be conclusive, and the
Borrower, the DIP Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower, the
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the DIP Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrower, the DIP
Agent, the Issuing Bank or the Swingline Lender, sell participations to one or
more banks or other entities (a "Participant") in all or a portion of such
Lender's rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans owing to it); provided that (A) such Lender's
obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (C) the Borrower, the DIP Agent, the Issuing Bank and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. 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 described in the first proviso to Section
11.02(b) that affects such Participant. Subject to paragraph (c)(ii) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.13 and 2.14 to the same extent as if it were a Lender
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and had acquired its interest by assignment pursuant to paragraph (b) of this
Section. To the extent permitted by law, each Participant also shall be entitled
to the benefits of Section 11.08 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.15(e) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater payment
under Section 2.13 or 2.14 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 the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.14 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.14(e) as
though it were a Lender.
(d) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure the obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
Section 11.05. Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuances of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the DIP Agent, the Issuing Bank or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.13(d), 2.14, 11.03, 11.12 and Article VIII shall survive and remain
in full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
Section 11.06. Counterparts; Integration; Effectiveness. This Agreement
may be executed in any number of counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and any separate letter agreements with respect to fees
payable to the DIP Agent constitute the entire contract among the parties
relating to the subject matter hereof and
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supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the DIP
Agent and when the DIP Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by facsimile shall be effective as
delivery of a manually executed counterpart of this Agreement.
Section 11.07. Severability. Any provision of this Agreement held invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
Section 11.08. Right of Set-Off. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set-off and apply any and all deposits (general or special, time or
demand, provisional or final and in whatever currency denominated) at any time
held and other obligations at any time owing by such Lender or its Affiliate to
or for the credit or the account of the Borrower or any other Loan Party against
any of and all the obligations of the Borrower or any other Loan Party now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
set-off) which such Lender may have.
Section 11.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.
(b) The United States Bankruptcy Court for the Southern District of Ohio,
Western Division, shall have jurisdiction in any action or proceeding arising
out of or relating to any Loan Documents.
(c) Each Loan Party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
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(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 11.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
Section 11.10. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
Section 11.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
Section 11.12. Confidentiality. Each of the DIP Agent, the Issuing Bank
and the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (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 regulatory 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 any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to any assignee or pledgee of or Participant in, or any
prospective assignee or pledgee of or Participant in, any of its rights or
obligations under this Agreement, (g) with the consent of the Borrower or (h) to
the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) becomes available to the DIP Agent,
the Issuing Bank or any Lender on a nonconfidential basis from a source other
than Holdings or the Borrower. For the purposes of this Section, "Information"
means all information received from Holdings or the Borrower relating to
Holdings or the Borrower or its business, other than any such information that
is available to the DIP Agent, the Issuing Bank or any Lender on a
nonconfidential basis prior to disclosure by Holdings or the Borrower.
Notwithstanding anything herein to the contrary, any Party to this Agreement
(and any employee, representative or other agent of such Party) may disclose to
any and all persons, without limitation of any kind, the tax treatment and tax
structure of the
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transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided to it relating to
such tax treatment and tax structure, except that tax treatment and tax
structure shall not include the identity of any existing or future Party (or any
affiliate of such Party) to this Agreement.
Section 11.13. Interest Rate Limitation. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively, the "Charges"), shall exceed
the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
Section 11.14. Disclosure. Each of the DIP Agent and each Lender may
discuss the Borrower's business and the financial condition of the Borrower and
its Subsidiaries with each other, the Pre-Petition Lenders and the Pre-Petition
Agent.
Section 11.15. No Modification; No Discharge; Survival of Claims. This
Agreement, the credit extended hereunder and the Loan Documents shall not be
modified, altered or affected in any manner by any plan of reorganization or any
order of confirmation for any Debtor of any other financing or extensions or
incurring of indebtedness by any Debtor pursuant to Section 364(c) of the
Bankruptcy Code. Without limiting the generality of the foregoing, each of the
Borrower and the Guarantors agrees that (i) its obligations hereunder shall not
be discharged by the entry of an order confirming a plan of reorganization (and
each of the Borrower and the Guarantors, pursuant to Section 1141(d)(4) of the
Bankruptcy Code, hereby waives any such discharge) and (ii) the Superpriority
Claim granted to the DIP Agent and the Lenders pursuant to the Financing Order
and described in Section 3.17 and the Lien granted to the DIP Agent pursuant to
this Agreement and the Financing Order and described in Section 9.01 hereof
shall not be affected in any manner by the entry of an order confirming a plan
of reorganization.
Section 11.16. Pre-Petition Loan Documents. Subject to the provisions of
the Bankruptcy Code, the Pre-Petition Loan Documents shall remain in full force
and effect, and the execution of this Agreement by the DIP Agent and the
Lenders, and the execution of the other Loan Documents by those of the Debtors
party thereto, and the delivery to and acceptance thereof by the DIP Agent and
the Lenders, do not and shall not constitute a waiver of any provision of the
Pre-Petition Loan Documents.
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Section 11.17. Bankruptcy Code Waivers. In consideration of the credit
extended hereunder, to the extent not irreconcilably inconsistent with the
provisions hereof or the Financing Order, the Borrower and each Guarantor hereby
agrees not to assert and affirmatively waives any claim it otherwise might have
under Sections 105, 506(c) and 552(b) of the Bankruptcy Code.
[SIGNATURE PAGES TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Post-Petition
Credit Agreement to be duly executed by their respective authorized officers as
of the day and year first above written.
"BORROWER"
EAGLEPICHER INCORPORATED, as Debtor and
Debtor-in-Possession
By
Name___________________________________
Title__________________________________
"GUARANTORS"
EAGLEPICHER HOLDINGS, INC., as Debtor and
Debtor-in-Possession
By
Name___________________________________
Title__________________________________
EAGLE-PICHER FAR EAST, INC., as Debtor and
Debtor-in-Possession
EAGLEPICHER FILTRATION & MINERALS, INC.,
as Debtor and Debtor-in-Possession
EAGLEPICHER AUTOMOTIVE, INC., as Debtor
and Debtor-in-Possession
DAISY PARTS, INC., as Debtor and
Debtor-in-Possession
CARPENTER ENTERPRISES LIMITED, as Debtor
and Debtor-in-Possession
EAGLEPICHER PHARMACEUTICAL SERVICES, LLC,
as Debtor and Debtor-in-Possession
By
Name___________________________________
Title__________________________________
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"GUARANTORS"
EAGLEPICHER TECHNOLOGIES, LLC, as Debtor
and Debtor-in Possession
By
Name___________________________________
Title__________________________________
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"LENDERS"
AMOUNT OF DIP COMMITMENT: HARRIS TRUST AND SAVINGS BANK,
$25,000,000 individually as a Lender and as
DIP Agent
By
Name___________________________________
Title__________________________________
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AMOUNT OF DIP COMMITMENT: GENERAL ELECTRIC CAPITAL
$12,500,000 CORPORATION, AS LENDER
By
Name___________________________________
Title__________________________________
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AMOUNT OF DIP COMMITMENT: UBS LOAN FINANCE LLC, AS LENDER
$12,500,000
By
Name___________________________________
Title__________________________________
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